NSW Crime Commission v Lee [2010] NSWSC 1159 (15 October 2010)

Last Updated: 15 October 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
NSW Crime Commission v Lee [2010] NSWSC 1159


JURISDICTION:
COMMON LAW

FILE NUMBER(S):
2010/118966

HEARING DATE(S):
23 September 2010

JUDGMENT DATE:
15 October 2010

PARTIES:
Dennis Miralis (Applicant)
NSW Crime Commission (Respondent/Plaintiff)
Jason Lee (First Defendant)

JUDGMENT OF:
Davies J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
C R Newlinds SC & G Jones (Applicant)
I Temby QC (Respondent/Plaintiff)

SOLICITORS:
Nyman Gibson Stewart (Applicant)
NSW Crime Commission (Respondent/Plaintiff)


CATCHWORDS:
CRIMINAL LAW - procedure - confiscation of proceeds of crime - restraining or freezing order -
subsequent order that solicitor for the Defendant produce documents - whether order should have been made ex parte - whether illegitimate forensic advantage obtained by the Commission - redacted documents a sufficient answer to the order.

LEGISLATION CITED:
Criminal Assets Recovery Act 1990
New South Wales Crime Commission Act 1985

CATEGORY:
Procedural and other rulings

CASES CITED:
Hamilton v Oades [1989] HCA 21; (1969) 166 CLR 486
Hong Kong Bank of Australia v Murphy (1992) 28 NSWLR 512
International Finance Trust Company Limited v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319
North Australian Territory Co. v Goldsbrough, Mort & Co. [1893] 2 Ch 381
NSW Crime Commission v Bonaccorso [2010] NSWSC 876
Pickles v Gratzon [2002] NSWSC 688; (2002) 55 NSWLR 533
Re Auto Import Co. (Australia) Ltd (1924) 25 SR (NSW) 52
Re Hugh J Roberts Pty Ltd (In Liq) and the Companies Act (1969) 91 WN (NSW) 537
State Drug Crime Commission v Larsson (1991) 53 A Crim R 131

TEXTS CITED:


DECISION:
The Applicant's Notice of Motion is dismissed.



JUDGMENT:

- 1 -

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

DAVIES J

15 OCTOBER 2010

2010/118966 NSW CRIME COMMISSION V LEE

JUDGMENT

1 On 13 May 2010 the New South Wales Crime Commission obtained restraining orders under s 10A Criminal Assets Recovery Act 1990 against the property of Jason Lee and the property of Elizabeth Park.

2 On 4 June 2010 Jason Lee filed an application pursuant to s 10C of the Act that the restraining order made on 13 May 2010 be set aside. The solicitor acting for Mr Lee on that application was Dennis Miralis of Nyman Gibson Stewart Criminal Defence Lawyers.

3 On 1 July 2010 the Crime Commission made application to Hoeben J ex parte for orders pursuant to s 33(2) of the Act requiring Mr Miralis to produce documents described as property-tracking documents.

4 Mr Miralis now moves to set aside those orders, alternatively, to vary those orders such as to limit them to a defined schedule of specific documents concerning the whereabouts and extent of assets of Jason Lee and Elizabeth Park.

Legislation

5 The power to make production orders of the nature that Hoeben J made, is to be found in Pt 4 of the Act entitled Information Gathering Powers. Section 33 relevantly provides:

33 Making of production order

(1) If an authorised officer has reasonable grounds for suspecting that a person has possession or control of a property-tracking document, or property-tracking documents, the authorised officer may:

(a) lay before the Supreme Court an information on oath setting out those grounds, and

(b) apply to the Court, ex parte, for a production order against the person suspected of having possession or control of the document or documents.

(2) The Supreme Court may order the person against whom an application for a production order is made under subsection (1):

(a) except in the case of bankers’ books, to produce to an authorised officer at a specified time, or between specified times, and at a specified place any property-tracking documents that are in the person’s possession or control, or

(b) to make available to an authorised officer, for inspection at a specified time or times, or between specified times, at the place at which they are kept, any property-tracking documents that are in the person’s possession or control.

...

6 The definition of property-tracking document is to be found in s 4 of the Act as follows:

property-tracking document means:

(a) a document relevant to:

(i) identifying, locating or quantifying any interest in property of a person who might reasonably be suspected of being, or of having been, engaged in a serious crime related activity, or

(ii) identifying or locating any document necessary for the transfer of an interest in property of a person who might reasonably be suspected of being, or of having been, engaged in a serious crime related activity, or

(b) a document relevant to:

(i) identifying, locating or quantifying an interest in property that might reasonably be suspected of being an interest that is serious crime derived property, or

(ii) identifying or locating any document necessary for the transfer of an interest in property that might reasonably be suspected of being an interest that is serious crime derived property.

7 Sections 34-37 provide:

34 Powers under production order

(1) If a document is produced to an authorised officer under a production order, the authorised officer may do any one or more of the following:

(a) inspect the document,

(b) take extracts from the document,

(c) make copies of the document,

(d) retain the document if, and for so long as, its retention is reasonably necessary for the purposes of this Act.

(2) If a document is made available to an authorised officer for inspection under a production order, the authorised officer may do any one or more of the following:

(a) inspect the document,

(b) take extracts from the document,

(c) make copies of the document.

(3) An authorised officer who retains a document under subsection (1) (d) must, on request by the person against whom the order is made:

(a) give the person a copy of the document certified by the authorised officer in writing to be a true copy of the document, and

(b) unless the person has received a copy of the document under paragraph (a) - permit the person to do any one or more of the following:

(i) inspect the document,

(ii) take extracts from the document,

(iii) make copies of the document.

35 Effect of production order on proceedings etc

(1) A person is not excused from complying with a production order on the ground that:

(a) the production or making available of the document might tend to incriminate the person or make the person liable to a forfeiture or penalty, or

(b) the production or making available of the document would be in breach of an obligation (whether imposed by an enactment or otherwise) of the person not to disclose the existence or contents of the document, or

(c) the production or making available of the document would disclose information that is the subject of legal professional privilege.

(2) If a person objects to a production order:

(a) the production or making available of the document, or

(b) any document or thing obtained as a consequence of the production or making available of the document,

is not admissible against the person in any criminal proceedings except proceedings for an offence under section 37 (Failure to comply with production order).

36 Variation of production order

If the Supreme Court makes an order under section 33 requiring a person to produce a document to an authorised officer, the person may apply to the Court for a variation of the order and the Court may, if satisfied that the document is essential to the business activities of the person, vary the production order so that it requires the person to make the document available under section 33(2)(b) to an authorised officer for inspection.

37 Failure to comply with production order

(1) If a person is required by a production order to produce a document to an authorised officer or to make a document available to an authorised officer for inspection, the person is guilty of an offence if the person:

(a) contravenes the order without reasonable excuse, or

(b) in purported compliance with the order produces or makes available a document known to the person to be false or misleading in a material particular without:

(i) indicating to the authorised officer to whom the document is produced or made available that the document is false or misleading and the respect in which the document is false or misleading, and

(ii) providing correct information to the authorised officer if the person is in possession of, or can reasonably acquire, the correct information.

Maximum penalty: 500 penalty units if the offender is a body corporate or, in any other case, 100 penalty units or imprisonment for 2 years, or both.

(2) It is sufficient compliance with a requirement of a production order that a person produce a document or make a document available if:

(a) the person has provided the Commission with a statement verified by statutory declaration to the effect that the person does not have possession and does not have control of the document, and

(b) the Commission has notified the person in writing that the Commission is prepared to accept provision of the statement as compliance with the order.

8 It can be seen that once the order is made many or all of the usual rights associated with the production of documents are abrogated by the provisions of s 35. If there was any doubt about the matter in relation to legal professional privilege that was made clear by the decision in State Drug Crime Commission v Larsson (1991) 53 A Crim R 131 at 134.

The making of the ex parte order

9 The Crime Commission read an affidavit of Jonathan Lee Spark sworn 1 July 2010 in support of its application to obtain the production orders. Mr Spark is the Assistant Director, Financial Investigations at the Commission and is an Authorised Officer within the meaning of s 4(1) of the Act. Mr Spark had sworn the affidavit to support the earlier application to Buddin J to obtain the restraining orders against Mr Lee’s and Ms Park’s property.

10 In his earlier affidavit of 12 May 2010 Mr Spark swore that he suspected that Jason Lee had engaged in a serious crime-related activity or serious crime-related activities, and he set out the basis for the holding of that suspicion. He reiterated those matters in his affidavit of 1 July 2010 and made reference to his earlier affidavit.

11 He then went on to say this:

[5] I suspect that the person named in Schedule Two hereto ("Miralis") has possession or control of a property-tracking document, or property tracking documents (within the meaning of "property-tracking document" as defined in section 4(1) of the Act) in respect of Lee and the Waterloo property.

[6] The suspicion referred to in paragraph 5 above is held by me upon the following grounds:

(a) on 26 May 2010 Miralis filed an Appearance in these proceedings for Lee, the First Defendant;

(b) on 27 May 2010, the Commissioner of the Commission issued a Notice to Attend and Produce Documents pursuant to section 17 of the New South Wales Crime Commission Act 1985, to Miralis ("the section 17 Notice");

(c) On 10 June 2010, pursuant to the section 17 Notice, Miralis provided to the Commission copies of receipts of Nyman Gibson Stewart Lawyers in relation to cheques and cash received from J & Lee Property Investment Group Pty Limited and Lee, the details of which are as follows:

(i) receipt dated 27 February 2009 received from "Jason Lee" for the sum of $1,650, in relation to "Knowingly Deal With Crime";

(ii) receipt dated 3 March 2009 received from "J & Lee Property Investment Group P/L" for a cheque in the sum of $218,371.63, in relation to "Jason Lee - Legal Fees";

(iii) receipt dated 3 March 2009 received from "J & Lee Property Investment Group P/L" for the sum of $24,200, in relation to "Jason Lee - Legal Fees";

(iv) receipt dated 16 April 2009 received from "Jason Lee" for cash in the sum of $200,000, in relation to "Knowingly Deal With Crime, Possess Prohibited Drug" (sic);

(v) receipt dated 12 November 2009 received from "J & Lee Property Investment Group" for a cheque in the sum of $200,000, in relation to "Jason Lee - Legal Proceedings";

(vi) receipt dated 8 December 2009 received from "J & Lee Property Investment Group" for a cheque in the sum of $600,000, in relation to "Legal Fees"; and

(vii) receipt dated 14 December 2009 received from "Jason Lee - J & L Property Invest. Grp" for cash in the sum of $500, in relation to "Deal with Crime/ Possess Prohibited Drug".

Annexed hereto and marked with the letter "A" is a true copy of the above receipts.

(d) on 7 June 2010 Miralis filed an Appearance in these proceedings for Park, the Second Defendant and proprietor of the Waterloo property.

SCHEDULE ONE

The whole of the property described as Lot 35 in Strata Plan 80807 at Waterloo also known as Unit 1404, 6 Lachlan Street, Waterloo, New South Wales and registered in the name of Elizabeth Park.

SCHEDULE TWO

Dennis Miralis, Solicitor, of Nyman Gibson Stewart Lawyers at 17 George Street, Parramatta, New South Wales.

12 The order made by Hoeben J was in these terms:

1. Pursuant to section 33(2) of the Criminal Assets Recovery Act 1990 ("the Act") Dennis Miralis, Solicitor, of Nyman Gibson Stewart Lawyers at 17 George Street, Parramatta, New South Wales, produce to the person named in Schedule 1 hereto at the time and place specified in Schedule 2 hereto in respect of the period 1 January 2009 to date, the following documents:

(a) any original, duplicate or copy document, in the possession or control of Dennis Miralis, Solicitor, of Nyman Gibson Stewart Lawyers at 17 George Street, Parramatta, New South Wales, including the documents described in Schedule 4 hereto relevant to:

(i) identifying, locating or quantifying any interest in property (within the meaning of "interest in property" as defined in section 7 of the Act) of the person named in Schedule 3 hereto; and

(ii) identifying or locating any document necessary for the transfer of an interest in property (within the meaning of "interest in property" as defined in section 7 of the Act) of the person named in Schedule 3 hereto.

(b) any original, duplicate or copy document, in the possession or control of Dennis Miralis, Solicitor, of Nyman Gibson Stewart Lawyers at 17 George Street, Parramatta, New South Wales, including the documents described in Schedule 4 hereto relevant to:

(i) identifying, locating or quantifying any interest in property (within the meaning of "interest in property" as defined in section 7 of the Act) in the property described in Schedule 5 hereto; and

(ii) identifying or locating any document necessary for the transfer of an interest in property (within the meaning of "interest in property” as defined in section 7 of the Act) in the property described in Schedule 5 hereto.

Schedule 1

Jonathan Lee Spark

Assistant Director, Financial Investigations and Authorised Officer of the New South Wales Crime Commission.

Schedule 2

Time: Between 9am and 5pm

Date: on or before 22 July 2010

Place: 453-463 Kent Street, Sydney NSW

Schedule 3

Name of person: Jason Lee (also known as Do Young Lee)

Date of Birth: 25 May 1964

Address of person: In custody at Parramatta Correctional Centre, Corner of Dunlop and New Streets, North Parramatta, NSW 2151

Schedule 4

1. All costs agreements.

2. Invoices and letters relating to work carried out and disbursements.

3. All documents relating to all monies received from, paid to, or held on behalf of such persons, including Client Trust Account Ledgers.

4. Accounting records.

The Applicant’s contentions

13 The Applicant put forward 6 matters he said would justify setting aside the orders made by Hoeben J. These matters were:

(a) The orders should not have been made ex parte;

(b) There was substantial non-disclosure when the order was sought;

(c) The documents were privileged documents;

(d) The order was ambiguous and involved the need for the Applicant to make judgments of law and fact;

(e) The order made went beyond the entitlement proved on the application.

(f) The order gives the Commission an illegitimate forensic advantage.

(a) Order made ex parte

14 The Applicant does not contend that Hoeben J did not have the power to make the order ex parte. However, the Applicant says that it was inappropriate to have made the order ex parte on this occasion. He was a solicitor of the Court and there was no suggestion that, if notified of the application, he would have acted in any way improperly to destroy documents or put them beyond his control.

15 In any event, the Applicant submits that even if it was appropriate for the order to be made ex parte, he is entitled to challenge the order even though s 36 appears to be a very limited method of obtaining variation of the order. The Applicant says that the ordinary rules of the Court apply so that, for example, Part 36 r 16(2)(b) provides a basis for the present application.

16 The Crime Commission does not dispute that the Applicant is entitled to make application to set aside or vary the order. Whilst I doubt that the Applicant is entitled under Part 36 r 16(2)(b) because he is probably not a party within the meaning of the rules: Pickles v Gratzon [2002] NSWSC 688; (2002) 55 NSWLR 533 at [37], for the reasons I gave in NSW Crime Commission v Bonaccorso [2010] NSWSC 876 at [31] I consider that the Applicant does have the right to make the present application.

17 Because of that, the issues that gave rise to the litigation in International Finance Trust Company Limited v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319 do not arise. Hoeben J had a discretion whether or not to make the orders ex parte. I can see no basis upon which that discretion was wrongly exercised. The fact that the person against whom the orders was sought was a solicitor is no doubt a factor to be taken into account but is not determinative of whether notice should be given.

(b) Non-disclosure

18 The Applicant’s written submissions asserted that Hoeben J was not told that there was current litigation on foot between the Commission and Mr Lee with restraining orders in place and orders for examination, and was not told the Applicant acted for Mr Lee in those proceedings. In oral submissions the Applicant accepted that Mr Spark’s affidavit was before Hoeben J, but it was said that his Honour did not fully appreciate that the effect of the orders he was being asked to issue would give the Commission the right to look at the solicitor’s file in circumstances where the Commission was in litigation against that solicitor’s client.

19 As Mr Spark’s affidavit of 1 July makes clear, the Applicant was acting for Mr Lee in proceedings where restraining orders had already been obtained under s 10A of the Act by the Commission – see particularly para 6(a), (c) and (d). Even if Hoeben J did not have the file at the time he made the orders, he would know from long experience of applications by the Commission for orders pursuant to s 10A that those orders ordinarily involved orders for examination and were, in any event, interim orders pending final orders in the nature of those contemplated by ss 22 and 27 of the Act.

20 However, even if Hoeben J had not been aware that the Applicant was acting for Mr Lee in the current litigation, it is difficult to see, in the light of s 35(1)(c) what difference that would have made. Given that obligations imposed by legal professional privilege are abrogated by that section, the only remaining consideration would be whether, notwithstanding those provisions, an order ought not to have been made because of some illegitimate forensic advantage that the Commission would obtain by the orders being made. I will discuss this matter later in the judgment.

(c) Legal professional privilege

21 The Applicant submits that because the documents sought to be obtained would, but for the provisions of s 35, be protected from disclosure on the basis of legal professional privilege, that ought to have been a matter that weighed heavily with his Honour before he made the order.

22 I have some difficulty with that submission. If legal professional privilege is abrogated by s 35, the mere fact alone that documents which would be required to be produced would otherwise attract legal professional privilege could not be a basis for a refusal of the order. There would need to be something additional to justify the refusal of an order. It seems to me that that is something which is available to be raised at an application such as the present. Self evidently, any additional matter concerning a privileged document would be unlikely to be known by the Commission when it applied for an order partly, for the reason that it does not know with any specificity what documents will be produced in answer to the order.

23 This need on the part of the Applicant to point to some factor over and above the privilege itself caused me to raise with counsel the question of the provision of redacted documents. Mr Temby QC for the Commission said that the provision of a redacted document would be acceptable, subject to the right of the Commission to return to Court to apply for more of the document if appropriate.

24 I note, therefore, that to the extent that any document the subject of legal professional privilege can be said to be a property tracking document, the Applicant is permitted to produce a redacted version of that document provided that the information concerning the property is unredacted.

(d) Ambiguity – need for judgment

25 In this regard, the Applicant points to the fact that the failure to comply with the production order is a serious criminal offence judged by the penalty provided in s 37. The Applicant says that the terms of the order require him to make subjective judgments of fact and law about whether any such documents locate or quantify any interest in property or the transfer of an interest in property.

26 I do not think this submission should be accepted. First, any party faced with discovery or a notice to produce, or any person faced with compliance with a subpoena, is likely to have to exercise some judgment about what documents fall within a particular category for discovery or a particular description in a subpoena or Notice to Produce. There is nothing exceptional about that. Secondly, the Applicant in the present case is a solicitor and might be expected to be in a better position than most to determine what documents fall within the terms of the order. Thirdly, the offence created by s 37 is not an offence of strict liability. Putting aside the production of documents known by a person to be false or misleading, an offence is only committed if the order is contravened without reasonable excuse. It would be surprising if a mistake in judgment about a particular document would not fall within the description of a reasonable excuse.

27 Finally, bearing in mind the limited classes of documents in Schedule 4 to the order, it does not seem to me that there is any oppression about the order even if it is accepted that some judgments would have to be made.

(e) Width of the order

28 The Applicant submits that the only reasonable suspicion disclosed by Mr Spark was a suspicion going to accounting records. In those circumstances, it is submitted, any order which required production of more than accounting records was not justifiable.

29 That submission seems to me to misunderstand the evidence that Mr Spark gave. In paragraph 5 of his affidavit Mr Spark said that he suspected that the Applicant had possession or control of property-tracking documents. He then said in paragraph 6 what it was that caused him to have that suspicion. Paragraph 6 identified the fact that the Applicant was acting for both Mr Lee and Ms Park in the proceedings, and that when a Notice to Produce Documents under s 17 of the New South Wales Crime Commission Act 1985 was answered, the Applicant produced a number of receipts that concerned property of Mr Lee and his company J & Lee Property Investment Group Pty Limited.

30 What Hoeben J had to determine is whether Mr Spark had reasonable grounds for suspecting that the Applicant had possession or control of property-tracking documents (s 33(1)). Hoeben J must have concluded that there were reasonable grounds for the suspicion, but the suspicion was not simply that the Applicant had documents in the nature of receipts, but a suspicion that because he had documents in the nature of receipts he may well have other property-tracking documents. Nothing in the legislation suggests that the order that is made under s 33 is somehow limited to the grounds for the reasonable suspicion of the authorised officer.

31 In the present case it can be assumed that the documents that are required to be produced under the order are documents other than those that form the basis for Mr Spark’s belief because those documents have already been produced. If, therefore, the documents already produced provide the basis for suspecting that there are other documents, there is no reason why those “other documents” should be limited to the same class as those already produced. There is no warrant for reading the legislation down in that way.

(f) Illegitimate forensic advantage

32 The Applicant submits that, particularly because s 33 is to be found in Pt 4 of the Act concerned with information gathering, it cannot have been the intention of the Legislature that material could be obtained to give the Commission some advantage in proceedings which were on foot between the Commission and some other person. In that regard, the Applicant points to the fact that Mr Lee has an application under s 10C to set aside the restraining orders and will be required to contest final orders under s 22 or s 27 of the Act.

33 In my opinion, a number of matters suggests that the Act as a whole might be intended to provide some sort of forensic advantage to the Commission in proceedings under the Act. The fact that orders for examination of either the Defendant or other persons may be made points to that conclusion. Secondly, nothing in Pt 4 of the Act suggests that orders may only be sought or made when there are not proceedings on foot. Since proceedings under the Act concern property, an order made under s 33 must assist the Commission in such proceedings. Thirdly, the fact that 3 significant privileges are abrogated in s 35 also points to a similar conclusion.

34 It has been held in relation to trustees in bankruptcy and liquidators that it is no reason to deny those persons information obtainable from examinations on the basis that the information may assist the trustee or liquidator in proceedings he brings or intends to bring. In Re Hugh J Roberts Pty Ltd (In Liq) and the Companies Act (1969) 91 WN (NSW) 537 Street J said (at 540-542):

These cases do not, in my opinion, lay down any principle of general application such as is sought to be advanced by Mr. Spender on behalf the applicants. The mere fact that questions might be asked of an examinee directly involving a matter currently being litigated between the company or the liquidator and that examinee or a third party does not render those questions inadmissible, nor does it render the private examination itself an abuse of the processes of the court. The liquidator is given by the statute this special authority to proceed by way of private examination to obtain information which he needs for the due winding up of the company, the affairs of which he has the responsibility of administering. The mere fact that in obtaining that information he also obtains admissions or material that are available for him to use in evidence in current proceedings falls short of rendering the process abusive, vexatious or oppressive.

There is ample authority to the effect that the liquidator's power to proceed by way of a private examination is available to him notwithstanding that the litigation to which the subject matter of the private examination may be directed is already current.

35 His Honour then made reference to North Australian Territory Co. v Goldsbrough, Mort & Co. [1893] 2 Ch 381 at 384 and Re Auto Import Co. (Australia) Ltd (1924) 25 SR (NSW) 52 at 55 and continued:

The position is somewhat similar in the cognate field of bankruptcy. It may not be identical, inasmuch as in a bankruptcy the trustee's primary source of information is the bankrupt himself under the compulsion, inter alia, of statutory public examination. The public examination has a wider scope than the examination of a stranger. In a company winding up there is no principal party to be examined, and it may therefore be permissible for the court to take a more liberal view of the scope of the examination where the examinee was an officer of the company than where he is a stranger. But this is no more than one element encompassed within the overall question of how far the court should, in its discretion, allow a particular examination to proceed before it becomes oppressive or vexatious.

The similarity of approach in the bankruptcy jurisdiction is exemplified in Re Price (No. 3). At p. 140 Clyne J. quoted from an earlier decision of Cave J., In re Easton; Ex parte Davis, namely: " I admit that when the person seeking to interrogate is the official receiver or the trustee, it is no answer to say that an action is pending by the official receiver or trustee against the witness he proposes to examine."

A liquidator needs information concerning his company just as much in connection with current or contemplated litigation as in connection with other aspects of its affairs. In using the statutory machinery of private examination he will in many cases be gathering evidence as an ordinary and legitimate use of this procedure.

...

In my judgment it is immaterial in basic substance whether the private examination is sought to be used by a liquidator to gather information in connection with proceedings he believes he might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought. There is no presently relevant distinction in substance between gathering information referable to commencing proceedings and gathering information referable to continuing proceedings. There may be more risk of or opportunity for the examination being vexatious or oppressive after proceedings have been commenced... Also an abuse of process may be more readily exposed once proceedings are already on foot. But this is surely not to the point, as vexation or oppression will not be tolerated no matter when the examination is held.

A liquidator need not be diffident in using a private examination for its ordinary and legitimate purpose in the gathering of information. But he must not abuse this process. For instance an attempt, where litigation is either contemplated or commenced, to summon the prospective or existing defendant's probable witnesses and examine them simply for the purpose of destroying their credit would exceed the legitimate use of the process. Beyond stating this extreme instance, I consider it unsafe to generalize - very often the gathering of information quite properly involves testing the reliability or credit of the examinee from whom the information is being obtained.

36 This approach of Street J was expressly approved by the Court of Appeal in Hong Kong Bank of Australia v Murphy (1992) 28 NSWLR 512 at 518-520, and see also Hamilton v Oades [1989] HCA 21; (1969) 166 CLR 486 at 497.

37 It seems to me that the provisions of the Act, particularly those in Pt 4, make it appropriate to adopt a similar approach to the issue of forensic advantage as obtains in the area of trustees in bankruptcy and liquidators. Particularly when the Commission has indicated it will accept redacted documents in answer to the order, there is not a significant disadvantage to the Applicant or those for whom he acts if he is required to produce the documents notwithstanding the proceedings that have already been commenced against his clients.

Conclusion

38 Both parties submitted that there was no need to vary Hoeben J’s order if the only effect of the variation was to permit redacted documents to be produced. For the reasons I have given, the Applicant otherwise fails in his challenge to the order made. In those circumstances the Notice of Motion should be dismissed.

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LAST UPDATED:
15 October 2010