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Federal Court of Australia |
Last Updated: 28 February 2008
FEDERAL COURT OF AUSTRALIA
Australian
Securities and Investments Commission v Albarran [2008] FCA 147
CORPORATIONS – defendant refused to answer questions before the
Companies Auditors & Liquidators Board Disciplinary Panel
– no
"reasonable excuse" – reliance on legal advice not "reasonable excuse"
– advice not given – reliance
not reasonable – defendant to be
punished as if guilty of contempt of court
Australian Securities
and Investments Commission Act 2001 (Cth) ss 68, 204, 217,
219
Corporations Act 2001 (Cth) s 1292
Criminal Code Act
1995 (Cth) ss 3.1, 4.1, 5.1, 5.2, 5.3, 5.6, 9.3, 13.1, 13.2, 13.3,
13.4
Bank of Valletta PLC v National Crime Authority (1999)
164 ALR 45 discussed
Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493
followed
Re Modern Woodcraft Pty Limited (In Liquidation) (1997) 75
FCR 245 distinguished
Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 referred
to
Pearce, D C & Geddes, R S, Statutory Interpretation in
Australia (6th ed, LexisNexis Butterworths, 2006)
Williams N
J, Payne A J & McNaughton S M, Federal Criminal Law (LexisNexis
Butterworths, 1994)
AUSTRALIAN
SECURITIES AND INVESTMENTS COMMISSION v RICHARD ALBARRAN
NSD 1399
of 2007
JACOBSON J
26 FEBRUARY
2008
SYDNEY
THE COURT ORDERS THAT:
1. Pursuant to s 219(7)(b) of the Australian Securities and Investments Commission Act 2001 (Cth), the defendant be punished in the same manner as if he had been guilty of contempt of court.2. The matter be stood over to a date to be fixed for the making of orders on the question of punishment.
Note: Settlement and
entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
BETWEEN:
|
AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
Plaintiff |
|
AND:
|
RICHARD ALBARRAN
Defendant |
|
JUDGE:
|
JACOBSON J
|
|
DATE:
|
26 FEBRUARY 2008
|
|
PLACE:
|
SYDNEY
|
REASONS FOR JUDGMENT
Introduction
1 The defendant in these proceedings, Mr Richard Albarran, was summoned to give evidence before the Companies Auditors and Liquidators Disciplinary Board in a matter which was the subject of disciplinary proceedings before the Board.
2 The name of the person whose matter was before the Board is confidential and he will be referred to as "the Partner".
3 Mr Albarran appeared before the Board on 7 February 2007 but he declined to answer certain questions that were put to him by the Panel Chairman.
4 Section 219(2)(b) of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act") provides that a person appearing as a witness at a hearing must not refuse or fail to answer a question that he or she is required to answer by the Panel Chairperson. This subsection does not apply to the extent that the person has a reasonable excuse: s 219(2A) of the ASIC Act.
5 The Panel Chairman certified in writing under s 219(6) of the ASIC Act that Mr Albarran had, when required by the Chairman to answer 37 questions specified in the certificate, refused or failed to comply with that requirement, without reasonable excuse.
6 The plaintiff, the Australian Securities and Investments Commission, seeks orders under s 219(7)(b) of the ASIC Act punishing Mr Albarran for his refusal or failure to answer the questions, in the same manner as if he had been guilty of contempt of court.
7 The question which now arises is whether I am satisfied that Mr Albarran
had a reasonable excuse for his refusal or failure to
answer the questions: s
219(7) of the ASIC Act.
Mr Albarran’s excuse
8 The reason put forward by Mr Albarran for declining to answer the questions is that he relied on legal advice. That was not the reason he gave to the Panel Chairman on 7 February 2007. On that occasion he told the Chairman that he believed that answering the questions may prejudice his interests in a separate matter that he had brought in the Administrative Appeals Tribunal ("the AAT").
9 That matter arose out of disciplinary proceedings that were determined adversely to Mr Albarran by the Board in December 2005. Mr Albarran sought a review of that determination by the AAT. Mr Albarran’s proceeding in the AAT had not been heard at the time when he was summoned to give evidence in the Partner’s matter before the Board.
10 Mr Albarran and the Partner were both members of a firm of Chartered Accountants, Hall Chadwick. I will set out the background facts in more detail below. It is sufficient to say by way of introduction that the issues before the Board in both matters were substantially identical, each of them arising out of the voluntary administration of a company, Formula Engineering Pty Ltd, which was a client of Hall Chadwick.
11 In Mr Albarran’s disciplinary proceeding the Board found that he had been party to a contrived arrangement to appoint a person as voluntary administrator of Formula Engineering in circumstances in which Hall Chadwick and its members were precluded from taking that appointment.
12 The Board organised the disciplinary proceedings in respect of Mr
Albarran and the Partner such that the two sets of proceedings
were kept
separate, and the Panels were constituted by different members.
The
legislation
13 The Board is constituted under Division 1 of Part 11 of the ASIC Act. Its functions and powers include those conferred on it by s 1292 of the Corporations Act 2001 (Cth): see s 204 of the ASIC Act.
14 Section 210A(1) of the ASIC Act provides that the Board’s functions and powers in relation to an application to the Board by ASIC for a person to be dealt with under s 1292 of the Corporations Act are to be performed and exercised by a panel constituted under s 210A(2).
15 Section 210A(2) of the ASIC Act provides that the Chairperson of the Board is to determine in writing the members of the Board who are to constitute the Panel that is to hear the matter.
16 Section 1292 of the Corporations Act confers powers on the Board, if it is satisfied on an application by ASIC, to cancel or suspend the registration of the person as an auditor or liquidator.
17 Section 1292(2) of the Corporations Act deals with liquidators. Section 1292(2)(d) provides:
(2) The Board may, if it is satisfied on an application by ASIC for a person who is registered as a liquidator to be dealt with under this section that, before, at or after the commencement of this section:
...
(d) that the person has failed, whether in or outside this jurisdiction, to carry out or perform adequately and properly:
(i) the duties of a liquidator; or(ii) any duties or functions required by an Australian law to be carried out or performed by a registered liquidator;
or is otherwise not a fit and proper person to remain registered as a liquidator;
by order, cancel, or suspend for a specified period, the registration of the person as a liquidator.
18 Section 217(1) of the ASIC Act confers power on the Panel Chairperson to summon a person to give evidence at a hearing.
19 Section 219 of the ASIC Act imposes an obligation upon a person served with a prescribed summons to appear as a witness before the Board, to attend and give evidence. As I said in the introduction, the obligation is subject to the exception of "reasonable excuse". The section contains the procedure, to which I have referred, for the Chairperson to give a certificate, and it confers power on the Court where a certificate is given.
20 I will set out the whole of s 219 of the ASIC Act as follows:
Failure of witnesses to attend and answer questions
(1) A person served, as prescribed, with a summons to appear as a witness at a hearing must not:
(a) fail to attend as required by the summons; or
(b) fail to attend from day to day unless excused, or released from further attendance, by the Panel Chairperson.
(2) A person appearing as a witness at a hearing must not:
(a) when required pursuant to subsection 217(2) to either take an oath or make an affirmation--refuse or fail to comply with the requirement; or
(b) refuse or fail to answer a question that he or she is required to answer by the Panel Chairperson; or
(c) refuse or fail to produce a document that he or she was required to produce by a summons under subsection 217(1) served on him or her as prescribed.
(2A) Subsections (1) and (2) do not apply to the extent that the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the Criminal Code.
(3) A person must not, at a hearing, give evidence that is false or misleading.
(4) A person must not contravene subsection (1), (2) or (3).
Penalty: 10 penalty units or imprisonment for 3 months.
(5) A person who contravenes subsection (3) is not guilty of an offence against subsection (4) if it is proved that he or she, when giving the evidence, believed on reasonable grounds that it was true and not misleading.
(6) Where the Panel is satisfied that:
(a) a person served, as prescribed, with a summons to appear as a witness at a hearing has, without reasonable excuse, failed to attend as required by paragraph (1)(a) or (b); or(b) a person appearing as a witness at a hearing has, without reasonable excuse:
(i) when required pursuant to subsection 217(2) either to take an oath or make an affirmation; or(ii) when required by the Panel Chairperson to answer a question; or
(iii) when required to produce a document by a summons under subsection 217(1) served on him or her as prescribed;
refused or failed to comply with the requirement;
the Panel Chairperson may, by instrument in writing, certify the failure to attend or the refusal or failure to comply with the requirement, as the case may be, to the Court.
(7) Where a certificate is given under subsection (6), the Court may inquire into the case and, if it is satisfied that the person to whom the certificate relates has, without reasonable excuse, failed to attend or refused or failed to comply with a requirement as mentioned in the certificate:
(a) may order the person to attend or to comply with the requirement at a hearing to be held at a time and place specified in the order; or(b) may punish the person in the same manner as if he or she had been guilty of contempt of the Court and, if it thinks fit, also make an order under paragraph (a)."
21 Section 68 of the ASIC Act provides that for the purpose of Division 2 of Part 11 (which includes s 219) it is not a reasonable excuse for a person to refuse or fail to give information, in accordance with a requirement made of the person, that the information might tend to incriminate the person or make the person liable to a penalty.
22 The note appearing under s 219(2A) of the ASIC Act refers to s 13.3(3) of the Criminal Code Act 1995 (Cth). That subsection is contained in Part 2.6 of the Criminal Code which deals with proof of criminal responsibility. I will set out the relevant portions of that Part:
13.1 Legal burden of proof--prosecution
(1) The prosecution bears a legal burden of proving every element of an offence relevant to the guilt of the person charged.Note: See section 3.2 on what elements are relevant to a person's guilt.
(2) The prosecution also bears a legal burden of disproving any matter in relation to which the defendant has discharged an evidential burden of proof imposed on the defendant.
(3) In this Code:
legal burden, in relation to a matter, means the burden of proving the existence of the matter.
13.2 Standard of proof--prosecution
(1) A legal burden of proof on the prosecution must be discharged beyond reasonable doubt.
(2) Subsection (1) does not apply if the law creating the offence specifies a different standard of proof.
13.3 Evidential burden of proof--defence
(1) Subject to section 13.4, a burden of proof that a law imposes on a defendant is an evidential burden only.
(2) A defendant who wishes to deny criminal responsibility by relying on a provision of Part 2.3 (other than section 7.3) bears an evidential burden in relation to that matter.
(3) A defendant who wishes to rely on any exception, exemption, excuse, qualification or justification provided by the law creating an offence bears an evidential burden in relation to that matter. The exception, exemption, excuse, qualification or justification need not accompany the description of the offence.
(4) The defendant no longer bears the evidential burden in relation to a matter if evidence sufficient to discharge the burden is adduced by the prosecution or by the court.
(5) The question whether an evidential burden has been discharged is one of law.
(6) In this Code:evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.
13.4 Legal burden of proof--defence
A burden of proof that a law imposes on the defendant is a legal burden if and only if the law expressly:
(a) specifies that the burden of proof in relation to the matter in question is a legal burden; or(b) requires the defendant to prove the matter; or
(c) creates a presumption that the matter exists unless the contrary is proved.
23 Senior Counsel for Mr Albarran relied on a number of other provisions of the Criminal Code which deal with the elements of an offence. I will set out the provisions to which I was taken as follows:
3.1 Elements
(1) An offence consists of physical elements and fault elements.
(1) A physical element of an offence may be:
(a) conduct; or(b) a result of conduct; or
(c) a circumstance in which conduct, or a result of conduct, occurs.
(1) A fault element for a particular physical element may be intention, knowledge, recklessness or negligence.
(2) Subsection (1) does not prevent a law that creates a particular offence from specifying other fault elements for a physical element of that offence.
(1) A person has intention with respect to conduct if he or she means to engage in that conduct.
(2) A person has intention with respect to a circumstance if he or she believes that it exists or will exist.
(3) A person has intention with respect to a result if he or she means to bring it about or is aware that it will occur in the ordinary course of events.
5.3 Knowledge
A person has knowledge of a circumstance or a result if he or she is aware that it exists or will exist in the ordinary course of events.
5.6 Offences that do not specify fault elements
(1) If the law creating the offence does not specify a fault element for a physical element that consists only of conduct, intention is the fault element for that physical element.
(2) If the law creating the offence does not specify a fault element for a physical element that consists of a circumstance or a result, recklessness is the fault element for that physical element.
24 Section 9.3 of the Criminal Code is also relevant to the consideration of the issues raised on this application. I will set it out in full:
9.3 Mistake or ignorance of statute law
(1) A person can be criminally responsible for an offence even if, at the time of the conduct constituting the offence, he or she is mistaken about, or ignorant of, the existence or content of an Act that directly or indirectly creates the offence or directly or indirectly affects the scope or operation of the offence.
(2) Subsection (1) does not apply, and the person is not criminally responsible for the offence in those circumstances, if the Act is expressly to the contrary effect.
The Issues
25 Three issues arise in this proceeding. The first issue is whether reliance on legal advice amounts to reasonable excuse.
26 Senior counsel for ASIC submits that reliance upon legal advice cannot constitute reasonable excuse; to permit such an excuse to be raised would be to defeat the very purpose of the proceeding before the Board.
27 Nevertheless, senior counsel for Mr Albarran points to the provisions of the Criminal Code set out above. The essence of his submissions is that Mr Albarran’s evidence before me discharges the evidential burden referred to in s 13.3(3) of the Criminal Code.
28 The second issue is whether Mr Albarran received the legal advice that he claims to have relied upon. This is an issue of fact which turns upon whether I accept his evidence.
29 The third issue is whether, even if Mr Albarran received the advice that he claims, reliance upon it was reasonable. This issue turns upon the nature of the advice said to have been received and the circumstances in which the advice was communicated to him.
30 In order to determine the second and third issues, it is necessary to set out the relevant factual background. An important part of this centres upon an application made by Mr Albarran, several weeks prior to his attendance before the Board to give evidence, to be excused from attendance.
31 That application was unsuccessful. What was said by Mr Albarran’s
legal advisers, and by ASIC, prior to the hearing of
the application, and by the
Board Chairman, Mr Magarey, are critical to the determination of the issues
before me.
The Factual Background
32 On 23 December 2005, a Panel of the Board, constituted inter alia by Mr Magarey, in an application made by ASIC, found that Mr Albarran had failed within the meaning of s 1292(d)(ii) of the Corporations Act, to carry out or perform, adequately and properly, the duties or functions required by an Australian law to be carried out or performed by a registered liquidator.
33 The relevant finding of the Board was that Mr Albarran had participated in a contrived nominee arrangement to appoint two persons as administrators of Formula Engineering while he or his firm, Hall Chadwick:
...in effect, were to, or actually did, perform functions of the appointed Administrator in respect of which his firm was to, and did receive, fees for work performed in circumstances where he himself and any member of his firm was precluded from accepting the appointment ... because he had a conflict of interest as a result of the prior professional relationship with Formula Engineering.
Although the Board concluded that Mr Albarran participated in contrived nominee arrangements, it found that he had no part in their creation. Moreover, the Board did not find that Mr Albarran acted dishonestly.
34 The gravamen of the Board’s finding against Mr Albarran was that he did not properly understand his professional duty, or did not give it sufficient consideration, or simply ignored it; a reasonably competent liquidator would have given consideration to and understood that the contrived arrangements were contrary to published professional codes and standards.
35 On 3 May 2006, the Board made orders against Mr Albarran in his disciplinary proceedings. On 8 May 2006, Mr Albarran made application to the AAT for a review of the adverse determination.
36 Before the date of the Board’s determination in 2005, Mr Albarran instituted proceedings in the High Court for a Constitutional writ to prohibit the Board from taking further steps in the disciplinary proceeding against him. The matter was remitted to the Federal Court which dismissed the application. Special leave to appeal was granted by the High Court on 29 September 2006 but the appeal was ultimately unsuccessful.
37 On 27 June 2006, at the request of ASIC, the Panel Chairman of the proceeding against the Partner issued a summons to Mr Albarran to appear before the Board on 18 December 2006 in that matter. The summons was served on 18 July 2006.
38 In November 2006, the solicitors who were acting for Mr Albarran in his disciplinary proceeding gave consideration as to whether he could decline to appear in answer to the summons to attend before the Board in the Partner’s matter. The solicitors who were acting were NOTLawyers. The relevant persons were Mr Simon Gallant, a partner in that firm, and Mr David Blessington, an employed solicitor.
39 On 21 November 2006, Mr Blessington attended a conference with Mr AJ Sullivan QC and Mr K Eassie. Mr Sullivan was briefed as senior counsel for the Partner. Mr Eassie was briefed to appear for Mr Albarran in his disciplinary proceeding.
40 Mr Blessington’s notes of the meeting include the following:
Section 219 "reasonable excuse"
Think should make submission to Chairperson of the Board – if deny (?) –
219(7).
Options - CALB
AAT
Federal Court
Prejudice – "de novo" hearing before the AAT
Issue of claim by ASIC that can introduce fresh contentions in the AAT proceedings could also be of relevance here.
Being compelled to give evidence in proceedings which may prejudice our position.
...
Best strategy would be for RA to attend on 18/12 – get ruling.
If adverse we –
have decision
either give evidence or walk out
...
Letter to ASIC should consider "reasonable excuse".
Eassie to research issue of "reasonable excuse" plus section 219 of ASIC Act – look to second reading speech.
41 Following that conference Mr Blessington sent an email to Mr Albarran. The email was sent in the afternoon of 21 November 2006 and it was copied to Mr Sullivan, Mr Eassie and Mr Gallant. It included the following:
I met with Alan Sullivan and Kerry Eassie this morning to get advice on the way forward.
All are reasonably confident that appropriate steps can be taken to prevent you giving evidence but of course, no guarantees can be given.
Kerry and I had drafted a letter to ASIC setting out why it is inappropriate that you give evidence in [the Partner’s] proceedings but Alan wants it expanded to include the bases for you having "reasonable excuse" for not attending/giving evidence. That expression is used in s 219 of the ASIC Act but research will have to be done as to the meaning it has been given in other cases.
42 On 12 December 2006 Mr Blessington wrote to ASIC contending that the summons issued to Mr Albarran in the Partner’s proceeding was invalid. Serious allegations were made against ASIC including a contention that the summons was issued for the collateral purpose of a "dress rehearsal" of Mr Albarran’s proceeding in the AAT and a conflict of interest on the part of the Panel in the Partner’s proceeding.
43 It is not suggested that the letter was settled by Mr Sullivan or Mr Eassie.
44 The letter of 12 December 2006 included the following statement:
In these circumstances, it would appear to be the case that the Summons was issued for an improper purpose, and should accordingly be held to be invalid, as an abuse of process (see Ganin v NSW Crime Commission (1993) 32 NSWLR 423). As well, and as a separate ground, Albarran relies upon what was said in the High Court in Taikato v R [1996] HCA 28; 139 ALR 386, that what amounts to a "reasonable excuse" depends not only on the circumstances of the individual case, but also on the purpose of the provision to which the defence of "reasonable excuse" is an exception. CALDB is obliged pursuant to s.218(2) of the ASIC Act to observe the rules of natural justice "... at and in connection with a hearing", and we submit that the matters referred to above, considered together, plainly constitute a reasonable excuse for him not to attend the hearing of the [Partner’s] Proceedings to give evidence (Section 219(1) of the ASIC Act), as well as for refusing to comply otherwise with Section 219 of the ASIC Act.
45 Mr Blessington concluded his letter by stating that if ASIC did not agree not to call Mr Albarran in response to the summons, the solicitors had instructions to make an application to set it aside.
46 ASIC replied on 14 December 2006 stating that it would not agree not to call Mr Albarran at the hearing of the Partner’s matter which had been reconvened to commence on 5 February 2007. ASIC denied the "baseless allegation" that the summons was issued for an improper purpose. ASIC observed that the summons was sought for the legitimate forensic purpose of having Mr Albarran available to give evidence relevant to ASIC’s case for orders against the Partner.
47 Importantly, ASIC’s letter of 14 December 2006 made it clear that the evidence which ASIC sought to adduce from Mr Albarran in the Partner’s matter was the same evidence he had given in his own matter before the Board.
48 This is clearly stated in the following paragraph of ASIC’s letter of 14 December 2006:
There is no "dress rehearsal" of Mr Albarran’s evidence for the AAT Proceedings. ASIC merely seeks to adduce from Mr Albarran the same evidence which he has already given at his own CALDB proceedings. ASIC has provided Mr Albarran with a copy of the transcript of the evidence he gave at his own CALDB proceedings. ASIC has also provided him with an outline of the evidence which ASIC expects to adduce from him. The outline is a summary of the evidence which Mr Albarran gave at his own CALDB proceedings.
49 On 15 December 2006 Mr Blessington forwarded a copy of ASIC’s letter of 14 December 2006 to Mr Albarran. Mr Blessington stated that "Its contents are predictable."
50 On 19 December 2006 Mr Blessington wrote to the Board stating that Mr Albarran wished to make an application to the Panel hearing the Partner’s proceeding, in the following terms:
1. that he be excused and/or released from further attendance in response to the Summons pursuant to Section 219(1)(b) of the ASIC Act;
In the alternative:
2. that pursuant to sub-sections (1) and (2) of Section 219 of the ASIC Act he be excused from attendance in response to the Summons by reason of reasonable excuse in accordance of Section 219(2A) of the Act.
51 On 17 January 2007 a conference took place in the boardroom of NOTLawyers. Mr Albarran and the Partner were present. So too were Mr Blessington and Mr Eassie. It appears that Mr Gallant was also in attendance.
52 The notes of the meeting commence with the comment that:
We do not want RA to give evidence in [the Partner’s] matter because of possible detrimental effect on AAT proceedings.
53 The notes also state that Mr Albarran’s position "is different to" the Partner’s.
54 The Partner is recorded in the notes as having made reference to the possibility of Mr Albarran raising the privilege against self-incrimination. Mr Eassie’s response is recorded in the following terms:
that is not clear on the law. Should focus on reasonable excuse.
55 The notes of the conference of 17 January 2007 record that Mr Albarran asked what would happen if he refused to answer questions. The notes continue as follows:
- read s 219
- contempt – difficult issues
- jail – possible
56 On 18 January 2007 Mr Albarran sent an email to Mr Blessington asking him to consider certain comments made by the Partner on the applicability of the privilege against self-incrimination. Whatever discussion took place between Mr Albarran and Mr Blessington about that topic, it is clear that privilege against self-incrimination was not raised before Mr Magarey or when Mr Albarran appeared to give evidence.
57 Mr Magarey held a pre-hearing conference on 22 January 2007 to deal with Mr Albarran’s application to be excused from attendance in response to the summons. Mr Magarey also dealt, at the same time, with an application by the Partner that the summons against Mr Albarran should be dismissed.
58 Mr Magarey gave his ruling on both applications on 25 January 2007. He rejected both of them in a detailed set of rulings and reasons delivered on that date.
59 The ruling contains two important preliminary comments about Mr Albarran’s application. First, Mr Magarey observed that there may be an argument that no application of this nature could be made until there was a failure to attend or to answer questions. However, Mr Magarey accepted Mr Albarran’s submission that it was realistic to deal with the application on an anticipatory basis, there being said to be a basis which would constitute a reasonable excuse for an anticipated failure to attend or to answer questions.
60 Mr Magarey continued by saying:
I should add that the result of any ruling I give on that anticipatory basis will be that no party will be able to challenge that ruling before the Panel or otherwise to act contrary to that ruling but that no party will be precluded from making any other application under s219, based on grounds other than those on which submissions have been made in connection with the present applications. I understand that the parties do not disagree with this.
61 The second important preliminary comment was as to the meaning of "reasonable excuse". Mr Magarey said:
It seems to me that the purpose of s 217 is to give the Board wide powers to summon witnesses and that s 219 is intended to give enforceability to that except in cases of "reasonable excuse". It further seems that that expression in s 219 is to recognise that (in addition to physical excuses such as sickness, transport strikes, etc) there may be good reasons affecting that particular person which should justify an excuse. However, I take the purpose of the expression in s 219 to be that unless there can be established (to my satisfaction in this case) some particular prejudice to the particular person which is such as to displace the general presumption of compliance with the summons then the general purpose of compliance should be enforced.
62 Mr Magarey then proceeded to reject each of the nine submissions put forward by counsel for Mr Albarran as to why he would have reasonable excuse for not attending or refusing to answer questions. As to the "dress rehearsal" submissions, Mr Magarey said:
Since there is no indication that ASIC will seek to adduce any evidence from Albarran other than that which he gave in the Albarran proceedings, I do not see how that can be of prejudice to Albarran such as to amount to a reasonable excuse not to answer the summons.
63 At about 12.45 pm on 25 January 2007, Mr Blessington forwarded a copy of Mr Magarey’s ruling to Mr Albarran. Mr Blessington also sent a copy to Mr Gallant.
64 Later in the afternoon of 25 January 2007 Mr Blessington had a conversation with Mr Albarran about Mr Magarey’s ruling. Mr Blessington’s note records that he told Mr Albarran that they needed to discuss the "next move". The note also records the following:
He sd wd not be answering q’s if he thought wd prejudice his position in AAT as "they can take me to the Federal Court" if they want.
65 On 1 February 2007 Mr Gallant sent an email to Mr Albarran stating that he had discussed the matter with Mr Blessington who was of the view that Mr Eassie should renew Mr Albarran’s application to be excused from further attendance. Mr Gallant noted Mr Albarran’s instructions that he would prefer Mr Blessington to make the application.
66 Mr Gallant’s email suggested the following form of answer when Mr Albarran wished to raise "reasonable excuse" for not answering:
Mr Chair, I have a matter currently before the Administrative Appeals Tribunal and believe that answering this question may prejudice my interests in that matter. I believe I have a reasonable excuse not to answer that question and will not do so.
67 The Panel appointed to hear the
Partner’s matter re-commenced sitting on 5 February 2007. Mr Albarran
attended with Mr
Blessington on 7 February 2007.
The hearing before the
Panel on 7 February 2007
68 I will set out the transcript of the most salient parts of the hearing on 7 February 2007. It is unnecessary to set out the exchanges that took place in relation to every one of the 37 questions the subject of the present application. Mr Albarran’s approach is sufficiently revealed by the portions of the transcript set out below.
69 The following exchange took place in relation to the first of the 37 questions asked by Mr Speakman who appeared for ASIC:
MR SPEAKMAN: Q. As a salaried partner, were you given directions from time to time by equity partners to undertake tasks in 2000?
THE CHAIRMAN: Are you seeking to establish the difference between salaried partners and equity partners?
MR SPEAKMAN: Yes, I am.
THE CHAIRMAN: It is a general question. I will allow the question and I can’t see the need to confer. It doesn’t specifically relate to anything here except background.
THE WITNESS: Mr Chairman, I have currently a matter before the Administrative Appeals Tribunal and I believe that answering this question may prejudice my interests in that matter. I believe I have a reasonable excuse not to answer that question. At this point in time, I’m not able to answer that question. I’m happy to return, once my appeal has been concluded, and answer that question.
THE CHAIRMAN: Mr Albarran, if you take that attitude to that question, when you are asked specific questions that directly relate to this case you are not going to be much help to us, are you?
THE WITNESS: I believe not, Mr Chairman.
THE CHAIRMAN: That will involve your appearance here being virtually useless.
THE WITNESS: In relation to that, [the Partner] wasn’t required at my hearing. I can’t see such a big issue about me being required at [the Partner’s] hearing. To me, it seems that ASIC want to have a go at me before they get to my appeal, but that’s just simply me as a layman.
THE CHAIRMAN: Mr Albarran, the opportunity to canvass your presence here has been given and a ruling has been made. It is binding, I think, on the parties and on you to the extent that you made the application, so you have to accept the fact that you are here. If you come here and refuse to answer reasonable questions relating to this case, then you negative that ruling and you are of no value as a witness to anyone in this case, so we can’t allow that to happen.
THE WITNESS: Mr Chairman, I’m not refusing to answer the questions. At this point in time, I’m not in a position to answer the questions because of my position. There’s a difference between refusing to answer the question and not being in a position to answer the question because of my position.
THE CHAIRMAN: There really is no difference in kind.
THE WITNESS: There is.
THE CHAIRMAN: We don’t get an answer. This Panel can only proceed on the basis that witnesses answer legitimate questions that are put to them. Otherwise, there is no point in calling the witness, for whatever reason.
THE WITNESS: I appreciate that, Mr Chairman.
THE CHAIRMAN: The question is a generic question as to the difference in the roles and duties of salaried and equity partners. It would seem that I have already ruled that there is a legitimate question if it is sufficiently clear to you what the question is. It is not a question on which I think you should need to confer, because we have ruled that the evidence here, in the opinion of the Panel, will not incriminate you in your own case.
THE WITNESS: Well, I believe differently and my legal advisers believe differently. So, again, if you want me to answer the question, Mr Chair, I have a matter currently before the Administrative Appeals Tribunal. I believe that answering this question may prejudice my interests in that matter. I believe I have a reasonable excuse not to answer that question and cannot do so at this point in time.
THE CHAIRMAN: Mr Albarran, did you raise that issue before the Chairman of the Board, that you presence here would prejudice you in your case, in your proceedings?
THE WITNESS: I would have to confer on that, because I wasn’t present on 22 January, but I believe it was raised. My lawyers were present, so can I confer?
THE CHAIRMAN: You certainly can.
THE WITNESS: Can I get Mr Blessington to speak on that behalf, because I wasn’t present, but I’m pretty positive that, yes, it was raised.
THE CHAIRMAN: I will put the position of the Panel quite clearly to you and to Mr Blessington. You, through counsel, made an application to be excused from the hearing. My understanding is that that was argued at some length and that a decision was made. That decision was that you were not excused from attendance.
Now it appears to the Panel that you have come here today not accepting that decision and subverting it, if you like, by not being prepared to answer questions, which has the same effect as overcoming the decision of the Chairman that you are required to attend. There is no point in you coming here and nor answering questions. It’s just as if you are not here at all.
THE WITNESS: No, Mr Chairman. I believe your statement is incorrect there. I believe that the reason that the Chairman required my attendance here today is because, at that point in time, there was no knowledge of what questions were going to be asked and he couldn’t possibly say whether I would or I wouldn’t have a reasonable excuse. But, clearly, the questions that are being asked and are being put to me relate to my case and I believe I have a reasonable excuse. If you go to the Chairman’s ruling, that was his ruling.
THE CHAIRMAN: Have you seen the evidence to be adduced? Have you seen the document produced by ASIC, "Evidence to be adduced by Mr Albarran"?
THE WITNESS: I haven’t read it, no, Mr Chairman.
THE CHAIRMAN: Has it been sent to you?
THE WITNESS: It has been sent to me, yes.
THE CHAIRMAN: So you are on notice of the precise questions that ASIC is going to put to you?
THE WITNESS: No.
THE CHAIRMAN: Why not?
THE WITNESS: Because they could ask a lot of other questions and not the precise questions.
THE CHAIRMAN: We have been provided with this list of questions. I am ticking off straight down the list, and there hasn’t been a question asked here that is not on this list.
THE WITNESS: I’ve been asked four questions, so are you saying that throughout the day I wouldn’t be asked any more questions apart from –
THE CHAIRMAN: I’m not saying that at all, but I’m saying that you are at least on notice that you will be asked the questions on this list.
THE WITNESS: Maybe some of them I wouldn’t be asked.
THE CHAIRMAN: Maybe not. But to the extent that you are asked questions on this list, you are on notice of the questions.
THE WITNESS: I haven’t read the questions.
THE CHAIRMAN: You had the opportunity t read them.
THE WITNESS: Yes.
70 After this exchange took place, Mr Blessington addressed the Panel Chairman. He contended that the ruling of Mr Magarey related to "the first limb" of s 219, whether or not Mr Albarran had reasonable excuse not to attend. Mr Blessington contended that Mr Albarran was entitled to rely on "the second limb" of s 219 which related to answering specific questions.
71 There was then some further discussion, after which Mr Speakman addressed the Panel Chairman. Mr Speakman referred to Mr Magarey’s observation about the anticipatory basis of the application to be excused from attendance. He pointed to Mr Magarey’s statement that it was not open to Mr Albarran to agitate the matters he had relied upon in his application to be excused from attendance.
72 The following exchange then took place between the Panel Chairman and Mr Blessington:
THE CHAIRMAN: Perhaps I should short-circuit this by asking Mr Blessington, are there any grounds you’re putting to us today for Mr Albarran refusing to answer that particular question that are not already covered by the application not to attend and as summarised in paragraph 4, subsections (a) though (i) of the Chairman’s ruling.
MR BLESSINGTON: Most certainly, Mr Chairman.
THE CHAIRMAN: And what are they?
MR BLESSINGTON: His objection is his claim to have reasonable excuse must be considered in relation to each question which is asked of him. This ruling, despite what ASIC claims, is in relation to the first limb of section 219, nothing more, that is, whether he had reasonable excuse not to comply with the summons to be here, and he is here.
The issue before the Panel now is whether, in relation to a question put to him, he has reasonable excuse at the time not to answer it. That could not have been covered by the Chairman, because he did not know the questions which were going to be put to him. He didn’t have in front of him, so far as I’m aware, the list of questions. They were not contemplated, they were not tendered. How could that possibly be the case?
THE CHAIRMAN: But the question of a reasonable excuse is common, I think, to both applications and if the Chairman rejected as a reasonable excuse for not attending those excuses, I’m putting to you that this Panel will also reject as a reasonable excuse for not answering questions the same material that has already been put.
73 The hearing proceeded but Mr Albarran declined to answer the questions which are the subject of the Panel Chairman’s certificate. Mr Albarran used slightly different formulation in relation to some of his refusals but the effect of each was that Mr Albarran had a matter currently before the AAT and he believed that answering the question may prejudice his interests in that matter. He said he believed he had a reasonable excuse and would not be able to answer "at this point in time".
74 When asked to elaborate on the question of reasonable excuse, Mr Speakman observed that there could not be reasonable excuse to refuse to answer a question on the basis that it would prejudice the AAT proceedings. Mr Speakman continued:
There can’t be any reasonable apprehension of a prejudice to the AAT proceedings by giving evidence that confirms evidence previously given. There’s no implicit concession in that submission that if any evidence went beyond this transcript there would be prejudice, but at least on this narrow question there can’t be any prejudice in being asked to give the same evidence that’s been given before.
75 Notwithstanding this, Mr Albarran declined to answer the 37 questions. At the conclusion of Mr Albarran’s evidence, the Panel Chairman stated to him, the Panel "does appreciate your position... and that you are acting on legal advice". However, the Chairman pointed out that the absence of his answers prejudiced the matter before the Panel which was left to make what it could of the "patchwork quilt" of Mr Albarran’s answers.
76 This was a reference to the fact that Mr Albarran did answer some
questions that were put to him.
Whether reliance on legal advice
constituted "reasonable excuse"
77 Even if Mr Albarran received and acted upon the advice he asserts, in my opinion this did not constitute "reasonable excuse" within the meaning of s 219 of the ASIC Act.
78 The authorities on the scope of "reasonable excuse" as a ground of exculpation from the operation of a statutory prescription were comprehensively analysed and explained by Hely J in Bank of Valletta PLC v National Crime Authority (1999) 164 ALR 45 at [36] ff.
79 Justice Hely’s explanation of the authorities indicates that the proper construction of "reasonable excuse" in s 219 is consistent with the view taken by Mr Magarey, as set out at [61]. That is to say, the person seeking to rely upon it must establish some particular prejudice which is sufficient to displace the assumption of compliance with the summons.
80 In Valletta, Hely J referred to authorities of the High Court, the New South Wales Court of Appeal and the Privy Council. Three propositions may be gleaned from his Honour’s analysis of those authorities.
81 First, the question of what constitutes "reasonable excuse" is to be determined from the terms and structure of the particular statute and the circumstances of each particular case: Valletta at [39], [47].
82 Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance, but it is necessary to bear in mind the importance of the particular statutory prescription to the overall statutory regime: Valletta at [42].
83 Third, the question of what constitutes reasonable excuse involves an objective determination in all the circumstances. These include the adverse consequences to an individual of being compelled to answer and the adverse consequences to an inquiry if the questions are not answered: Valletta at [44], [47].
84 Applying these principles, it is quite plain that reliance on legal advice as a ground of reasonable excuse would be inconsistent with the statutory scheme contained in particular in s 1292 of the Corporations Act and ss 68, 217 and 219 of the ASIC Act.
85 The primary function of the Board is to hear disciplinary proceedings brought by ASIC in respect of auditors and liquidators. Privilege against self-incrimination and privilege against exposure to a penalty do not constitute reasonable excuse for failing to answer. It seems to me that the Board’s statutory functions would be rendered otiose if reliance on legal advice were to constitute reasonable excuse.
86 In my view, support for this proposition is to be found in the remarks of the High Court in Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493 at [2] per Gleeson CJ and Kirby J; at [53] – [54] per McHugh J; and at [85] per Callinan and Heydon JJ.
87 The point was put in strong terms by Callinan and Heydon JJ at [85] as follows:
A mockery would be made of the criminal law if accused persons could rely on, for example, erroneous legal advice, or their own often self-serving understanding of the law as an excuse for breaking it...
88 It is true that in Ostrowski their Honours were concerned with s 24 of the Criminal Code (WA) which applied to mistakes about the factual ingredients of an offence, not mistakes about the existence of the law creating the offence, or to the question of reasonable excuse. However, the approach stated by their Honours is applicable by analogy in the present context.
89 In Re Modern Woodcraft Pty Limited (In Liquidation) (1997) 75 FCR
245 at 253-254, Lindgren J appears to have considered that reliance on legal
advice was reasonable excuse for failure
to file affidavits within the time
limited for the purpose of s 597A(3) of the Corporations Law.
Nevertheless, for the reasons stated by his Honour at 254, that decision is
confined to its own facts.
The defendant’s approach to the
construction and effect of s 219 of the ASIC Act is rejected
90 The Court’s jurisdiction is enlivened under s 219(7) of the ASIC Act. That sub-section falls to be considered in its own terms, in its full statutory context.
91 Section 219(7) is in the nature of a contempt proceeding. It provides that if the Court is satisfied that the person to whom a certificate has been given has "without reasonable excuse" failed to comply with a requirement stated in the certificate, the Court may punish the person "in the same manner as if he or she had been guilty of contempt."
92 In Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 534, 545, the High Court said that proceedings for contempt must be seen as criminal in nature. It follows that charges must be proved to the criminal standard. It does not follow that every provision of the Criminal Code is imported into the proceeding.
93 The note under s 219(2A) of the ASIC Act refers to s 13.3 of the Criminal Code in an aid to the construction of s 219(7) and part of the statutory context: Pearce, D C & Geddes, R S, Statutory Interpretation in Australia (6th ed, LexisNexis Butterworths, 2006) at [4.49]. But it does not follow from this that the provisions of Ch 2 of the Criminal Code dealing with the General Principles of Criminal Responsibility are applicable.
94 As the learned authors of Federal Criminal Law (LexisNexis Butterworths, 1994) observe at [5A-015] observe:
The essence of Ch 2 of the Criminal Code is to do away with the concepts of actus reus and mens rea and to replace them with a mechanism requiring all federal offences to be divided up...into so-called "physical" and "fault" elements.
95 Even if the provisions of Ch 2 are applicable, in my opinion, the absence of reasonable excuse is not a physical element of the offence created by s 219(2) (4) of the ASIC Act. Rather, it is in the nature of a fault element within s 5.1 of the Criminal Code.
96 Senior counsel for Mr Albarran sought, in my view incorrectly, to treat the absence of reasonable excuse as a physical element. He then sought to argue that the prosecutor was required to prove that Mr Albarran intended to refuse to answer the question without reasonable excuse. I reject that submission as contrary to the terms of s 219(2), (2A) and (4) of the ASIC Act.
97 Section 219(2A) imposed an evidentiary burden on Mr Albarran. The question which arises before me under s 219(7) is whether I am satisfied that the burden has been discharged.
98 The view which I have reached that reliance on legal advice cannot amount
to "reasonable excuse" disposes of the matter but even
if I am wrong on that
question, I am not satisfied that Mr Albarran has discharged the burden upon
him. Moreover, even if the absence
of reasonable excuse is a physical element,
I am satisfied of this element beyond reasonable doubt.
Whether Mr
Albarran received any relevant advice
99 Mr Albarran asserts that he believed he had a reasonable excuse for declining to answer questions on 7 February 2007 because he claims to have received legal advice to that effect.
100 I accept that Mr Albarran received advice from Mr Gallant and Mr Blessington prior to the conference of 21 November 2006 that Mr Albarran "may have a reasonable excuse" not to attend the hearing which was, at that stage, scheduled to take place in December 2006.
101 I also accept that the preliminary advice given by those solicitors was confirmed in the letter of 21 November 2006 following upon Mr Blessington’s conference with Mr Sullivan and Mr Eassie. But the letter did not convey the advice in unqualified terms because the confidence expressed in the opening words of the second sentence is tempered by the statement that "no guarantees can be given."
102 However, that advice, such as it was, related only to the question of whether Mr Albarran had a reasonable excuse for not attending before the Board in answer to the summons. Once Mr Magarey’s ruling was handed down on 25 January 2007, the relevant question was whether Mr Albarran received legal advice that he had reasonable excuse for not answering the questions that were put to him when he appeared before the Panel on 7 February 2007.
103 It is true that Mr Albarran was accompanied at the hearing on 7 February 2007 by Mr Blessington. It might be inferred from this, and from what Mr Blessington said before the Panel that Mr Albarran was acting on legal advice. The Panel Chairman’s remark which I have recorded at [75] might also be thought to support that view.
104 However, the content of any advice which Mr Albarran might be thought to have acted on 7 February 2007 was not established. Nor was the occasion on which it was given established on the evidence before me. Accordingly, upon a careful consideration of the whole of the evidence, I reject Mr Albarran’s contention that he received or acted upon legal advice that he had reasonable excuse for not answering the 37 questions which he was required to answer before the Panel on 7 February 2007.
105 There are four reasons for this finding. First, Mr Albarran was an unsatisfactory witness and I reject critical aspects of his evidence as untruthful. Second, his evidence was not supported, and was in some respects contradicted by Mr Gallant. Third, Mr Blessington was not called. Fourth, the entire documentary record is inconsistent with a finding that Mr Albarran received legal advice in the terms that he asserts. I will expand on these reasons below.
106 Mr Albarran commenced his evidence-in-chief by stating that Mr Blessington told him that after reviewing the matter, Mr Sullivan and Mr Eassie believed that Mr Albarran "may have a reasonable excuse" for not attending the hearing. Not long after, he said the advice that Mr Blessington conveyed to him was that Mr Sullivan and Mr Eassie were "of a firm opinion" that he had a reasonable excuse for not attending.
107 This later evidence was, plainly, an embellishment of what Mr Albarran said at the outset. It was contrary to the evidence given by Mr Gallant who said that after the conference with counsel he confirmed his firm’s preliminary view to Mr Albarran that he "may" have a reasonable excuse for not answering the summons.
108 Moreover, Mr Albarran’s evidence is contrary to the only contemporaneous written record of the advice that was communicated to him. That advice was contained in the letter of 21 November 2006 which was qualified by the statement that no guarantees could be given.
109 Mr Albarran agreed that he had produced, in response to a notice to produce given to him by ASIC, all documents that he and his solicitors had been able to locate that recorded advice given to Mr Albarran on this topic. As I have said, none of them supported him.
110 Moreover, in spite of the clear terms of the statement in the letter of 21 November 2006, Mr Albarran would not accept that the words "no guarantees could be given" qualified the terms of the advice that preceded it. Mr Albarran’s credit was adversely affected by his refusal to accept the obvious.
111 A further example of this was Mr Albarran’s evidence that the Partner wanted him to give evidence at the hearing of the Partner’s matter before the Board.
112 Mr Albarran’s evidence on that issue is contradicted by the note of the conference of 17 January 2007 set out above. The Partner raised the possibility of Mr Albarran claiming privilege against self-incrimination. The only conceivable explanation for the Partner’s suggestion was that he did not want Mr Albarran to give evidence.
113 Indeed, the Partner persisted in this approach after the conference, as is recorded in Mr Albarran’s email to Mr Blessington of 18 January 2007 forwarding the comments by the Partner as to his view, namely, that privilege against self-incrimination may be claimed by Mr Albarran.
114 What is more, Mr Magarey’s ruling of 25 January 2007 deals not only with Mr Albarran’s application to be excused from attendance. Mr Magarey also dealt with the Partner’s application that the summons against Mr Albarran should be dismissed.
115 Notwithstanding the overwhelming body of evidence against him, Mr Albarran stubbornly refused to depart from his statement that the Partner wanted him to give evidence before the Board.
116 Another example of the unsatisfactory nature of Mr Albarran’s evidence is to be found in his assertion that at the conference of 17 January 2007 Mr Eassie was of the "very strong opinion" that Mr Albarran had a reasonable excuse not to attend, and that even if he did attend, not to answer questions that may affect his AAT appeal.
117 Mr Eassie was not called but the note of what he said at the conference is inconsistent with the proposition that any such advice was given.
118 Mr Blessington’s note records that Mr Eassie said that the right to claim privilege against self-incrimination was not clear and "(s)hould focus on reasonable excuse." If Mr Eassie had gone beyond this and given "a very strong opinion" that Mr Albarran had reasonable excuse, it would have been recorded in Mr Blessington’s note, which on its face, contains a comprehensive record of what was said at the conference.
119 Mr Albarran was taken to the note but he clung to his earlier evidence, insisting that Mr Eassie said that it was his "opinion or it was his firm opinion" that Mr Albarran had a reasonable excuse.
120 Despite his professional qualifications as a chartered accountant, Mr Albarran’s evidence was that he did not read Mr Magarey’s ruling of 25 January 2007. Having regard to his overall approach to the matter, I am inclined to accept this piece of evidence, although his failure to read it reflects adversely upon the third limb of the argument, namely the "reasonableness" of his professed excuse.
121 However, I do not accept Mr Albarran’s evidence of the terms in which the content of Mr Magarey’s ruling was conveyed to Mr Albarran. His evidence was that he was told that the basis of the ruling was that Mr Magarey could not know what questions were going to be put to Mr Albarran and whether those questions would be ones which, if answered, could affect his AAT proceedings.
122 That was plainly not the basis on which the application was made to Mr Magarey or the basis of his ruling. The letter of 14 December 2006 from ASIC made it clear that the evidence which was to be sought from Mr Albarran was the same evidence he had given in his own disciplinary proceeding. That was why Mr Magarey was able to rule upon the first of the two preliminary points, namely that it was realistic to deal with the application on an anticipatory basis, it being known what the scope of the questions would be.
123 Mr Magarey’s ruling expressly dealt with the application on the basis that there was no indication from ASIC that it would seek to adduce evidence from Mr Albarran other than that which he had given in his own proceedings.
124 In light of this, I cannot accept that any of Mr Albarran’s legal representatives conveyed the substance of the ruling in the terms stated by Mr Albarran. To make a finding that the advice was in those terms would be to say that the legal representatives gave an entirely inaccurate account of the ruling. That would be a most surprising result and there is no evidence before me (other than Mr Albarran’s assertion) to support it.
125 Mr Albarran agreed that after Mr Magarey’s ruling, he discussed what was to be done thereafter with Mr Gallant and Mr Blessington. Notwithstanding Mr Magarey’s adverse ruling, Mr Albarran said that Mr Gallant and Mr Blessington gave firm advice that he still had a reasonable excuse for not answering questions.
126 This evidence was contradicted by Mr Gallant who said that the question of whether Mr Albarran had a reasonable excuse was "not revisited in great depth" after Mr Magarey’s ruling.
127 Furthermore, in cross-examination on this topic, Mr Albarran departed from what he had said in chief. Mr Albarran said in chief that the people with whom he discussed Mr Magarey’s ruling were Mr Gallant and Mr Blessington. He said they told him they were still "very confident" or still "confident" that he had a reasonable excuse. Yet in cross-examination Mr Albarran said, for the first time, that the advice was conveyed, albeit indirectly from Mr Sullivan and Mr Eassie. Later he said he could not remember mention of Mr Sullivan but he said that Mr Gallant told him he had discussed it with Mr Eassie.
128 The documentary evidence discloses that there was a discussion between Mr Blessington and Mr Albarran on 25 January 2007 after Mr Magarey’s ruling. But the terms of Mr Blessington’s note, and Mr Albarran’s answers to questions about it provide yet further reason for rejecting his evidence.
129 The note of the conversation states in plain terms that Mr Albarran said he would not be answering questions if he thought it would prejudice him in the AAT and they could take him to the Federal Court if they wanted to.
130 Notwithstanding this, Mr Albarran at first denied that he had spoken those words. He persisted with this even after he was taken to the note. Later, he gave a version of the conversation which was not supported by the note. This included the self-serving statement that Mr Blessington "believed strongly that I still had a reasonable excuse". No such words, or words touching on that subject, were contained in the note.
131 Upon a careful consideration of the whole of Mr Albarran’s evidence, I have come to the view that he has, without any foundation, convinced himself that advice was given even though it is plain that no such advice was received by him. No responsible lawyer could have given the advice that Mr Albarran asserts. Yet he persisted with his assertion and was not prepared to depart from it despite being taken to the overwhelming evidence against him.
132 It is plain that he was prepared to run the risk of the consequences that would flow from his failure to answer the questions regardless of what was told by his lawyers and regardless of the obvious effect of Mr Magarey’s adverse ruling.
133 It follows that I do not need to consider the third issue, namely
"reasonableness" but I will do so briefly.
Reasonableness
134 In the face of Mr Magarey’s ruling, no reasonable person could have held the view that he had a reasonable excuse for declining to answer questions that sought to adduce, in the Partner’s matter, the same evidence that Mr Albarran had previously given in his own disciplinary proceeding.
135 Nevertheless, Mr Albarran asserted that Mr Magarey’s rejection of Mr Albarran’s lawyer’s arguments did not cause him to have doubt whether the advice be claimed to have received from his lawyers was correct.
136 There are only two possibilities that follow. Either Mr Albarran’s evidence as to this was false, or, if his evidence is to be accepted, his approach was entirely unreasonable.
137 So too with his evidence that he did not read Mr Magarey’s ruling. This evidence was either false, or, alternatively, if he did not read the ruling, his approach was not reasonable. No person, let alone a professional person, can be heard to assert the reasonableness of an excuse that relies upon a failure to read a document, which is central to a consideration of the excuse that is proffered. Senior Counsel for Mr Albarran conceded that Mr Albarran’s approach was cavalier, yet he asked me to accept it as reasonable.
138 Even if I were to accept Mr Gallant’s evidence that a view had been formed before Mr Magarey’s decision was handed down, that there was a second limb to Mr Albarran’s claim of reasonable excuse which may still be open after the ruling, it does not assist Mr Albarran. This is because it is plain from the ruling that this excuse was not open in respect of questions that were intended to elicit evidence that had already been given by Mr Albarran in his own disciplinary proceeding.
139 There was no suggestion before me that any of the 37 questions asked of Mr Albarran went beyond the subject matter of his evidence in the earlier proceeding. Indeed, a schedule prepared by ASIC indicates that the questions did not go beyond those which had been the subject of Mr Albarran’s earlier evidence and of which he was given notice in ASIC’s letter of 14 December 2006.
140 I should add that I do not consider that Mr Gallant’s evidence that "the view had been formed before the decision of Mr Magarey was handed down" that Mr Albarran may have a second limb to his approach, namely reasonable excuse not to answer, supports Mr Albarran’s case. In my view, the only fair reading of the evidence is that Mr Gallant was referring to advice given in November 2006. That advice was superseded by ASIC’s communication of 14 December 2006 and by Mr Magarey’s ruling.
141 The absence of any reasonable excuse is graphically illustrated by Mr Albarran’s answer to the last line of questions put to him in cross-examination.
142 The following exchange took place:
If the evidence you gave in the Partner’s proceedings was confined to the same evidence you had given in your own proceedings, how could you have been prejudiced by that?-- I may have been prejudiced. Certain questions may have been answered differently. So that’s how I could have been prejudiced.
143 Even more graphic was Mr Albarran’s attitude to
giving evidence as is revealed in the file note of 17 January 2007 at [55].
Despite his denials, I find that Mr Albarran was told that if he failed to
answer questions before the Board without a reasonable
excuse, he would commit a
criminal offence and it was possible he would go to gaol.
Conclusion
and Orders
144 I am satisfied that Mr Albarran, without reasonable excuse, failed or refused to answer the 37 questions which are the subject of the certificate given by the Panel Chairman under s 219(6) of the ASIC Act.
145 If, as was submitted by Senior Counsel for Mr Albarran, I am required to be satisfied of the absence of reasonable excuse as a physical element, I am satisfied to the requisite standard. Upon consideration of all the evidence, I am satisfied beyond reasonable doubt that Mr Albarran failed or refused to answer the questions without reasonable cause or excuse.
146 I will order, pursuant to s 219(7)(b) of the ASIC Act that Mr Albarran be punished in the same manner as if he had been guilty of contempt of court.
147 I propose to stand the matter over to a date to be fixed for the making
of further orders on the question of punishment.
Associate:
Date: 26
February 2008
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Solicitor for the Applicant:
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Counsel for the Respondent:
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Solicitor for the Respondent:
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Date of Hearing:
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5 and 6 February 2008
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Date of Judgment:
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/147.html