Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625 (28 June 1990)

HIGH COURT OF AUSTRALIA

BALOG v. INDEPENDENT COMMISSION AGAINST CORRUPTION [1990] HCA 28; (1990) 169 CLR 625
F.C. 90/031

Statutory Bodies

High Court of Australia
Mason C.J.(1), Deane(1), Dawson(1), Toohey(1) and Gaudron(1) JJ.

CATCHWORDS

Statutory Bodies - Investigating Commission - Independent Commission Against Corruption - Investigation - Report - Powers - Inclusion of statement that person was or may have been guilty of criminal offence or corrupt conduct - Independent Commission Against Corruption Act 1988 (N.S.W.), ss. 13, 74.

HEARING

Canberra, 1990, April 5;
Brisbane, 1990, June 28. 28:6:1990
APPEAL from the Supreme Court of New South Wales.

DECISION

MASON C.J., DEANE, DAWSON, TOOHEY AND GAUDRON JJ. The Independent Commission Against Corruption has been conducting an investigation into the manner in which the Waverley Municipal Council dealt with applications for the development of land within its municipality during a period commencing in July 1982. The appellant Balog is the managing director of a company called Dainford Limited, which is involved in land development, and the appellant Stait was for some six years during the period under investigation the engineer and town planner for the municipality. Each of them is, within the meaning of s.74(6) of the Independent Commission Against Corruption Act 1988 (N.S.W.) ("the Act"), a person substantially and directly interested in the subject-matter of a hearing which the Commission has been holding as part of its investigation.

2. The appellants were unsuccessful at first instance in seeking to limit by way of declaration and injunction the findings which the Commission might make against them. By the time the matter reached the Court of Appeal, the appellants sought only a declaration in the following terms:
"(That) on the true construction of the Independent
Commission Against Corruption Act 1988 ('the Act'), and in
the events which have happened, the defendant is not
entitled in any report prepared pursuant to section 74 or 76
of the Act to make any finding or state any conclusion that
the plaintiff, he being a person substantially and directly
interested in an investigation, was guilty of a criminal
offence or of any conduct which may constitute a criminal
offence other than making a statement within section 74(5)
of the Act".
entitlement to a declaration, it did not contest that, where appropriate to do so, a court may grant declaratory relief in a case such as this. The respondent did not alter its position upon appeal by the appellants to this Court, but the appellant Balog sought and obtained leave to amend his grounds of appeal by adding a ground that the Court of Appeal ought to have held that the respondent Commission has no power to make any statement that corrupt conduct by the appellant may have occurred. The appellant Stait was, at all events tacitly, granted similar leave to amend his grounds of appeal.

3. The Commission is incorporated and exercises its functions through a Commissioner and Assistant Commissioners appointed under the Act. Its principal functions broadly involve the investigation of corrupt conduct, the education of the community, public authorities and public officials concerning corrupt conduct and the means whereby it might be eliminated, and the enlisting and fostering of public support in combating corrupt conduct: s.13(1). It is the investigative functions of the Commission which are significant in this case and these are as follows:

"13.(1) ...
(a) to investigate any circumstances implying, or any
allegations, that corrupt conduct may have occurred, may
be occurring or may be about to occur;
(b) to investigate any conduct which, in the opinion of the
Commission, is or was connected with or conducive to
corrupt conduct;
(c) to communicate to appropriate authorities the results of
its investigations; ..."

"Corrupt conduct" is defined in ss.7, 8 and 9 and extends generally to any conduct of any person that adversely affects or could adversely affect the honest or impartial exercise of official functions or which constitutes or involves the dishonest or partial exercise of official functions or a breach of public trust. It also includes conduct that adversely affects or could adversely affect the exercise of official functions and involves any one of a number of specified criminal offences, including bribery, blackmail, perverting the course of justice and the like. Nevertheless, conduct does not amount to corrupt conduct unless it could constitute or involve a criminal offence, a disciplinary offence or reasonable grounds for dismissing or dispensing with the services of a public official or otherwise terminating those services.

4. Under s.13(2)(a)(i) and (ii) the principal functions of the Commission also include the investigation of any matter referred to it by both Houses of Parliament with a view to determining whether any corrupt conduct may have occurred, may be occurring or may be about to occur or whether the laws governing any public authority need to be changed with a view to reducing the likelihood of the occurrence of corrupt conduct. Section 14 confers "other functions" upon the Commission. Under s.14(1) the Commission is to assemble evidence that may be admissible in a prosecution in New South Wales in connection with corrupt conduct and to furnish that evidence to the Director of Public Prosecutions. Where evidence obtained in the course of its investigations may be admissible in a prosecution in another State, the Commonwealth or a Territory, the Commission is to furnish the evidence to the Attorney-General and to recommend what action should be taken in relation to it. Under s.14(2), if the Commission obtains any information in the course of its investigations relating to the exercise of the functions of a public authority, it may, if it considers it desirable to do so, furnish that information or a report on that information to the Minister responsible for the authority, together with recommendations. If any evidence or information is furnished under sub-ss.(1) or (2) of s.14 on the understanding that the evidence is confidential, it is subject to quite stringent secrecy provisions under s.111.

5. Section 16 requires the Commission to work in co-operation with law enforcement agencies and allows it to work in co-operation with other agencies such as the Auditor-General, the Ombudsman, the National Crime Authority and the Australian Bureau of Criminal Intelligence. For this purpose it may disseminate information but, if it does so on the understanding that the information is confidential, the secrecy provisions of s.111 apply.

6. The Commission may conduct an investigation on its own initiative, on a complaint made to it, on a report made to it or on a reference made to it: s.20(1). It is not bound by the rules or practice of evidence and can inform itself on any matter in such manner as it considers appropriate. It is to exercise its functions with as little formality and technicality as is possible and hearings are to be conducted with as little emphasis on an adversarial approach as is possible: s.17. It may continue its activities despite any proceedings before a court but, in that event, as far as practicable, any hearing should be in private and the publication of the evidence should be prohibited under s.112. Also in that event, the Commission is to defer making any report to Parliament in relation to the investigation during the currency of the proceedings: s.18.

7. The powers of the Commission are far-reaching. It may require a public authority or public official to produce a statement of information and may require any person to produce a document or other thing: ss.21, 22. It may enter any premises occupied or used by a public authority or public official to inspect any document or thing on the premises: s.23. Public interest immunity from disclosure will not prevail where the Commission requires the production of any statement of information or of any document or other thing: ss.21, 22, 24. Nor will the privilege against self-incrimination prevail in such circumstances, although the information, document or other thing may not be used in proceedings against the person concerned, except proceedings for an offence against the Act: s.26.

8. The Commission may hold hearings for the purposes of an investigation: s.30. A hearing is to be held in public unless the Commission directs it to be held in private: s.31(1). A witness summoned to attend or appearing before the Commission is not entitled to refuse to answer any question relevant to an investigation or to refuse to produce any document or thing required to be produced. Where an objection is raised upon the basis of the privilege against self-incrimination, the evidence covered by the objection is not, except for certain limited purposes such as proceedings for an offence under the Act, admissible in any civil or criminal proceedings or in any disciplinary proceedings: s.37.

9. Provision is made for the issue of search warrants, either by an authorized justice or the Commissioner, to enter premises and to search for and seize documents or other things connected with any matter that is being investigated under the Act: ss.40, 41.

10. Under s.53 of the Act the Commission may refer a matter for investigation or action to any person or body considered by it to be appropriate, recommending what action should be taken and the time within which it should be taken. If the Commission communicates information for this purpose on the understanding that the information is confidential, that information will be subject to the secrecy provisions of s.111: s.53. Various steps may be taken by the Commission to ensure that action is taken: ss.55, 77.

11. Section 73 provides that both Houses of Parliament may, by resolution of each House, refer to the Commission any matter of the kind mentioned in s.13(2) and that it is the duty of the Commission to investigate fully a matter referred to in s.13(2)(a).

12. Section 74 provides:

"(1) The Commission may prepare reports in relation
to any matter that has been or is the subject of an
investigation.
(2) The Commission shall prepare reports in relation
to a matter referred to the Commission by both Houses of
Parliament, as directed by those Houses.
(3) The Commission shall prepare reports in relation
to matters as to which the Commission has conducted a public
hearing, unless the Houses of Parliament have given
different directions under subsection (2).
(4) The Commission shall furnish reports prepared
under this section to the Presiding Officer of each House of
Parliament.
(5) A report may include a statement of the
Commission's findings as to whether there is or was any
evidence or sufficient evidence warranting consideration
of -
(a) the prosecution of a specified person for a
specified offence; or
(b) the taking of action against a specified person
for a specified disciplinary offence; or
(c) the taking of action against a specified public
official on specified grounds, with a view to
dismissing, dispensing with the services of or
otherwise terminating the services of the public
official.
(6) A report shall include such a statement in
relation to the persons substantially and directly
interested in the subject-matter of the investigation
concerned or persons named in the reference made by both
Houses of Parliament.
(7) A report required under this section shall be
furnished as soon as possible after the Commission has
concluded its involvement in the matter.
(8) The Commission may defer making a report under
this section if it is satisfied that it is desirable to do
so in the public interest, except as regards a matter
referred to the Commission by both Houses of Parliament.
(9) In determining whether it is desirable in the
public interest to defer making a report under this section,
the Commission shall have regard as to whether or not the
matter is before a court."

13. The matter being investigated by the Commission in this case was not referred to the Commission by Parliament but, as it has conducted a public hearing, it is required to prepare a report and must furnish the report to the presiding officer of each House. Under s.78, a copy of the report must be laid before each House within 15 sitting days after it is received by the presiding officer and it is clear from the section that it is intended that by this means the report will be made public.

14. The submission is made on behalf of the appellants that the power of the Commission to report a finding concerning the liability of a person to be prosecuted or convicted of a criminal offence is limited to the finding referred to in s.74(5), namely, whether there is any evidence or sufficient evidence warranting consideration of the prosecution of a specified person for a specified offence, and that the Commission is precluded from reporting a finding that any offence was or may have been committed by either of the appellants. It is also submitted that the Commission is precluded from reporting that corrupt conduct involving the appellants or either of them may have occurred, may be occurring or may be about to occur.

15. The first of these submissions is based chiefly upon the structure of s.74. It is conceded that the Commission's report must, because the appellants are substantially and directly interested in the subject-matter of the investigation, contain a statement whether there is any evidence or sufficient evidence warranting consideration of the prosecution of either or both of them for a specified offence or specified offences. But, it is said, that is the extent of any statement of findings which the Commission may properly make concerning the criminal liability of the appellants. In support of this contention, the appellants are able to rely upon the maxim that the express mention of something excludes that which is not mentioned - expressum facit cessare tacitum. However, that maxim, whilst a valuable servant, is apt to be a dangerous master and it is necessary to seek confirmation in the broader context of the whole Act.

16. That confirmation is, we think, to be found there. Since the broad function of the Commission under s.13(1)(c) is to communicate the results of its investigations concerning corrupt conduct to appropriate authorities, it is apparent that its primary role is not that of expressing, at all events in any formal way, any conclusions which it might reach concerning criminal liability. Not only does corrupt conduct extend beyond the commission of a criminal offence, but the appropriate authorities (an expression which is not defined), to whom the Commission is to communicate its results, obviously extend beyond those agencies concerned with law enforcement. Indeed, under s.14(2) the Commission may report, with appropriate recommendations, to the Minister responsible for any public authority if it considers it desirable to do so, if necessary under the protection of the secrecy provisions of s.111. Also, the Commission may refer a matter to any person or body under s.53 and may take steps under ss.54 and 55 to see that proper action is taken in relation to it.

17. The one function expressly given to the Commission which directly relates to criminal proceedings (and it is not a principal function) is that referred to in s.14(1), where it is required to assemble evidence that may be admissible and to pass it on to either the Director of Public Prosecutions or the Attorney-General. It is significant that this sub-section speaks of evidence in this way, because it is apparent that the Commission in the exercise of its other functions is not required to confine itself to evidence that may be admissible in a court of law. It may proceed upon the basis of hearsay or privileged evidence, being able to inform itself as it considers appropriate. Not only does this, together with the other matters which we have mentioned, indicate that the Commission is intended to be primarily an investigative body and not a body the purpose of which is to make determinations, however preliminary, as part of the criminal process, but it also indicates how inappropriate it would be for the Commission to report a finding of guilt or innocence. Because it speaks of prosecution, the evidence referred to in s.74(5)(a) is by implication admissible evidence. It is hardly to be supposed that if the Commission were to reach a finding that there was insufficient admissible evidence to warrant consideration of the prosecution of a specified person for a specified offence, the section nevertheless contemplates that it should go on to express a finding, upon inadmissible evidence, that the same person had committed the offence in question.

18. Moreover, the quite guarded way in which s.74(5) is phrased lends support to the construction for which the appellants contend. The use of the expression "any evidence or sufficient evidence warranting consideration" suggests that it is someone else's evaluation of the evidence - that of the person who is to consider it - which is to determine whether a person is to be prosecuted or not and that the function of the Commission is to investigate and assemble the evidence rather than to evaluate it for itself, save for the limited purpose of deciding whether it warrants further consideration.

19. If the legislature had intended, by allowing or requiring the Commission to report, to confer upon it a power to express a finding concerning the criminal liability of a specified person, then it would have been unnecessary to include sub-s.(5) of s.74. The reason for the inclusion of the sub-section in the limited form in which it is expressed is not difficult to discern. The expression of a finding of guilt or innocence of an offence or even of a prima facie case against an individual, in a report which is bound to be made public, must be likely to have a damaging effect on the reputation of the person concerned. And whilst such a finding may not necessarily have a tendency to interfere with the due administration of justice in the event of a subsequent trial, the possibility cannot be disregarded. Under s.18, the Commission may furnish reports in connection with an investigation despite any proceedings that may be before any court (presumably proceedings in relation to a matter under investigation). But in the event of there being proceedings before a court, the Commission is, under the same section, to defer making a report to Parliament during the currency of the proceedings. Clearly the legislature was aware of the dangers of a report which would be made public and was concerned to protect proceedings before a court from interference arising from the publication of such a report. The concern of the legislature for the potentially damaging effect of a report is also to be seen in s.74 itself. Sub-section (8) of that section allows the Commission to defer making a report (not being a report as to a matter referred by Parliament) where it is desirable to do so in the public interest, particularly, under sub-s.(9), where the matter is before a court. It would at least be consistent with that concern to conclude that the relevant limits of s.74 are defined by sub-s.(5) and to construe the section as conferring no other power to make findings as to the liability of an individual to conviction or even prosecution.

20. For all of those reasons it seems to us, simply as a matter of construction, that the only finding which the Commission may properly make in a report pursuant to s.74 concerning criminal liability is that referred to in sub-s.(5), namely, whether there is or was any evidence or sufficient evidence warranting consideration of the prosecution of a specified person for a specified offence.

21. Similar considerations are raised by the appellants' further submission that the Commission is not in the present case entitled to report a finding in relation to them that corrupt conduct may have occurred, may be occurring or may be about to occur. They concede that such a finding may be reported where a matter has been referred to the Commission by Parliament. One of the functions of the Commission under s.13(2)(a)(i) in that event is to determine "whether any corrupt conduct may have occurred, may be occurring or may be about to occur". That is not expressed to be a function of the Commission where a matter is not referred to it by Parliament, its relevant duty (under s.3(2) a function includes a duty) then being merely to investigate any circumstances implying, or any allegations, that corrupt conduct may have occurred, may be occurring or may be about to occur and to investigate any conduct which, in its opinion, is or was connected with or conducive to corrupt conduct. Again the appellants are able to rely upon the maxim expressum facit cessare tacitum, having regard to the express provision made by s.13(2)(a) where a matter is referred to the Commission by Parliament. That suggests that, had the legislature intended the Commission otherwise to have the function of making findings of corrupt conduct, it would have made specific provision for it to do so. Not only does the presence of s.13(2)(a) suggest that, but so also does s.74(5), where specific power is expressly given to the Commission to make a finding of a particular kind. Moreover, the power given to the Commission in the case of a reference by Parliament to determine whether corrupt conduct may have occurred, may be occurring or may be about to occur, is a power to make a finding of a tentative kind only which, together with the limited nature of the findings which may be expressed pursuant to s.74(5), indicates that the Commission was intended to have only a restricted capacity to make findings, its principal roles being to investigate, educate and advise and to enlist and foster public support against corrupt conduct.

22. It follows that while the Commission may, and in some instances must, report the results of its investigations to Parliament, it may not make any findings apart from those which it is empowered to make under s.13(2)(a) and s.74(5). At least in theory there may be a fine line between making a finding and merely reporting the results of an investigation. But in practice the line should not be difficult to draw. It is clear enough that there is a distinction between the revelation of material which may support a finding of corrupt conduct or the commission of an offence and the actual expression of a finding that the material may or does establish those matters. And in this case it is possible to observe that the only finding which the Commission may include in its report in relation to the appellants is a finding whether there is any evidence or sufficient evidence warranting consideration of the prosecution of them or either of them for a specified offence or specified offences. It may not include a finding that any corrupt conduct on their part occurred or may have occurred.

23. Whilst in our view the conclusions which we have expressed flow from the application to the Act of the ordinary principles of interpretation, we would add the following observations lest we be thought to have taken an unduly restrictive view of the Commission's functions. Although the pernicious practices at which the Act is aimed no doubt call for strong measures, it is obvious that the Commission is invested with considerable coercive powers which may be exercised in disregard of basic protections otherwise afforded by the common law. Were the functions of the Commission to extend to the making of findings, which are bound to become public, that an individual was or may have been guilty of corrupt or criminal conduct, there would plainly be a risk of damage to that person's reputation and of prejudice in any criminal proceedings which might follow. If the legislation admits of a wider interpretation than that which we have given to it (and we do not think that it does), then the narrower construction is nevertheless to be adopted upon the basis that where two alternative constructions of legislation are open, that which is consonant with the common law is to be preferred: Smorgon v. Australia and New Zealand Banking Group Ltd. (1976) 134 CLR 475, at p 487. See also Hamilton v. Oades [1989] HCA 21; (1989) 166 CLR 486, at p 494; Potter v. Minahan [1908] HCA 63; (1908) 7 CLR 277, at p 304; Wade v. New South Wales Rutile Mining Co. Pty. Ltd. [1969] HCA 28; (1969) 121 CLR 177; Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52, at p 123.

24. Moreover, it is not apparent that the objects of the legislation embrace the publication of findings by the Commission, save in the two instances for which the Act expressly provides. The Commission is primarily an investigative body whose investigations are intended to facilitate the actions of others in combating corrupt conduct. It is not a law enforcement agency and it exercises no judicial or quasi- judicial function. Its investigative powers carry with them no implication, having regard to the manner in which it is required to carry out its functions, that it should be able to make findings against individuals of corrupt or criminal behaviour.

25. We would allow the appeal. It is important that the terms of any declaration should not be too wide. It must be clear that, even if the material elicited by the Commission in the course of its investigation is such as to establish or suggest that the appellants or either of them have been guilty of criminal or corrupt conduct, the Commission may set forth or refer to that material in its report pursuant to s.74, notwithstanding that it cannot state any finding of its own. Of course, depending upon the nature of the material, even to deal with it in that way may inevitably implicate the appellants or one or other of them in criminal or corrupt conduct. The Commission is nonetheless entitled to report upon the results of its investigation; it is merely precluded from expressing any finding, other than under s.74(5), in relation to the appellants. We would declare in each appeal that the Commission is not entitled in any report pursuant to s.74 of the Act to include a statement of any finding by it that the appellant was or may have been guilty of a criminal offence or corrupt conduct other than a statement made pursuant to sub-s.(5) of that section.

ORDER

Appeals allowed with costs.

Set aside the orders of the Court of Appeal and in lieu thereof order that the appeal to that Court be allowed with costs.

Set aside the order of Smart J. dismissing the summons of the respective appellants with costs and in lieu thereof declare that the respondent is not entitled in any report pursuant to s. 74 of the Independent Commission Against Corruption Act 1988 (N.S.W.) to include a statement of any finding by it that the respective appellants or either of them was or may have been guilty of a criminal offence or corrupt conduct other than a statement made pursuant to s. 74(5) of that Act.