Greenleaf, Graham --- "Cases and Complaints" [1997] PrivLawPRpr 22; (1997) 4(1) Privacy Law & Policy Reporter 11
Cases and Complaints
Leask v The Commonwealth
High Court of Australia, 5 November 1996
Constitutional law – currency – taxation – reporting financial transactions – whether anti-avoidance offence valid – Financial Transactions Reports Act 1988 (Cth), s 31.
Section 7 of the Financial Transactions Reports Act 1988 (Cth) obliged a ‘cash dealer’ who is party to a ‘significant cash transaction’ to prepare a report of the transaction and communicate that information to AUSTRAC unless:
(i) the cash dealer is a dealer approved by AUSTRAC or
(ii) the transaction is an exempt cash transaction.
A ‘cash transaction’ is a transaction involving ‘the physical transfer of currency from one person to another’. A ‘significant cash transaction’ is a cash transaction involving the transfer of currency of not less than $10,000 in value. A ‘non-reportable cash transaction’ is a cash transaction which is not a significant cash transaction or which is an exempt cash transaction.
The Act provided for disclosure by AUSTRAC to the Commissioner of Taxation of information reported to AUSTRAC by cash dealers. The Act recited that its principal object was to facilitate the administration and enforcement of taxation laws
Section 31 of the Act was an anti-avoidance provision. It provided that a person commits an offence if:
(a) the person is a party to 2 or more non-reportable cash transactions; and(b) having regard to the manner and form in which the transactions were conducted it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that [either] would not give rise to a significant cash transaction or would give rise to an exempt cash transaction.
In 1993 Stephen Arthur Leask was committed for trial in Sydney on 54 counts alleging offences against s 31 of the Act. He sought a declaration that s 31 was not a valid law of the Commonwealth. The Commonwealth argued that s 31 was supported by s 51(xii), the currency power, and s 51(ii), the taxation power.
Held, unanimously, that s 31 was validly enacted:
- (per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ): Section 31 was a qualified prohibition on the physical transfer of currency from one person to another. That was sufficient to characterise it as a law with respect to currency.
- (per Kirby J): Section 31 was sufficiently connected to the taxation power for the reason that it concerned the enforcement of taxation laws which may be avoided through the medium of the cash economy.
The concept of proportionality
Discussion of the role of the concept of proportionality in determining the constitutional validity of a law:
- (per Brennan CJ, Dawson, Toohey, Gummow JJ): If reasonable proportionality were to become a general touchstone of constitutional power, the Court would become drawn inexorably into areas of policy and value judgments. Accordingly, the place of reasonable proportionality should be restricted to two situations:
(i) to assist in determining the validity of a law said to be supported by a purposive power; and(ii) to assist in determining whether an impugned law affects a constitutional immunity.
- (per Gaudron J): Proportionality is one of several considerations that may be taken into account in determining the purpose of a law, where that is in issue, and in determining whether a law is relevantly connected with a particular subject of head of constitutional power.
- (per McHugh J): Where the dominant subject matter of an impugned law is not itself a head of federal power, the test of proportionality may sometimes prove helpful in determining whether the subject matter of an impugned law is sufficiently connected to the subject of federal power.
- (per Kirby J): Proportionality may sometimes be helpful in the context of constitutional characterisation. Particularly, it may be useful to examine whether a law may be so disproportionate to the legitimate attainment of the subject matter of the grant of power as to take it outside that grant.
Cunliffe v The Commonwealth [1994] HCA 44; (1994) 182 CLR 272; Re Dingjan; Ex parte Wagner [1995] HCA 16; (1995) 183 CLR 323; Re DPP; Ex parte Lawler [1994] HCA 10; (1994) 179 CLR 270; Australian Capital Television Pty Ltd v The Commonwealth [1992] HCA 45; (1992) 177 CLR 106; Nationwide News Pty Ltd v Wills [1992] HCA 46; (1992) 177 CLR 1, discussed.
Comment
This case was chosen by the court as a vehicle for the discussion of the means of constitutional interpretation and, in particular, whether the concept of reasonable proportionality, a concept rooted in civil law systems (particularly German and European Union law), had a role to play in interpretation of the Commonwealth Constitution. For this reason, it may be predicted that the case will find a place in most texts on constitutional law.
The concept was relevant because counsel for Mr Leask argued that s 31 was not reasonably proportionate to the attainment of the objects of the currency or taxation powers. However, the court held that, because the currency and taxation powers were not purposive powers and because s 31 did not infringe any constitutional immunity, the proportionality of the law was irrelevant to its characterisation as a law with respect to either of these subject matters. The desirability of the means chosen by the legislature in this case was simply not justiciable.
The judgment of Kirby J will be of interest to readers for his Honour’s discussion of the background leading to the introduction of the Act. Indeed, it is notable as the first judgment of the Court to refer to the Australia Card Bill 1986 (Cth).
Patrick Gunning, Solicitor, Mallesons Stephens Jaques, Sydney.
L v N ($20,000 damages for humiliation)
Complaints Review Tribunal (NZ), 4 April 1997
Privacy Act 1993 (NZ) — IPP 6(1)(a) failure to confirm existence of personal information — s 66(1) humiliation, loss of dignity or injury to feelings — s 88 remedies
Plaintiff L had worked from time-to-time as a volunteer for defendant N, an organisation, for eight years to 1994, with work including supervision of disabled children on recreational activities. In 1995 L was suspended from a position he held with a new employer X following the passing of information to X that L had been the subject of a complaint to the police by N about the indecent assault of a child in 1991. Prior to receiving reasons for his suspension, L was unaware of the existence of the complaint, N’s internal inquiry into it, or the passing of information to the police.
L made a request to N under the Privacy Act 1993 IPP 6.1 which provides that:
1. Where an agency holds personal information in such a way that it can be readily retrieved, the individual concerned shall be entitled:
(a) to obtain from the agency confirmation of whether or not the agency holds such personal information; and(b) to have access to that information.
N replied by providing a file which (it subsequently transpired) it had created in large part after receiving the complaint, which contained no information about the above investigation etc but did contain a note ‘Not a current volunteer — any inquiries refer to Ex Manager’.
L complained to the Privacy Commissioner that the reply did not refer to the complaint or the ensuing matters. After a further request by L, N still failed to disclose information about the internal inquiry. A further complaint to the Commissioner resulted in the Commissioner finding that the complaint was without substance because ‘the information does not exist’. N had in fact misled the Commissioner on this point, the Tribunal found.
Breach of IPP 6(1)(a)
In earlier proceedings the Tribunal had held that:
... the personal information was held by [N], notwithstanding that it was held in the memory of officers of [N], and because it was held by them in the course of their employment. It was readily retrievable by them because it was sufficiently specific and particular and signposted as accessible from the executive manager.
Consequently, N failed to comply with its IPP 6 (1)(a) obligation to confirm the existence of personal information on two occasions:
- in the first complaint, relating to the information about the allegations, which N eventually conceded its officers knew and was ‘signposted’ in the file; and
- in the second complaint concerning the information about the internal inves-tigation held in the memory of a Mr F.
Interference with privacy
Under s 66(1), a breach of an IPP is an interface with privacy if inter alia it results in significant humiliation, loss of dignity or injury to feelings. The Tribunal said:
At the heart of this matter is the failure to accord to [L], a person who volunteered his services for eight years to [N], sufficient respect to treat him honestly, decently or fairly.
However, it had to find further to satisfy the requirements of s 66(1), and did so on the basis of these factors, finding the damage by way of stress and humiliation ‘self evident’ and not requiring support by doctor’s notes or expert evidence:
- The ‘signpost’ in the file meant that the information would be made available to others but not to L.
- The failure to admit the destruction of his original file until the hearing was a ‘betrayal of trust’.
- The deception of the Privacy Commissioner that the file presented to him was the original file (even though ‘he was naive in so believing’) was a factor, and [L]’s knowledge of the deception and failure to convince the Commissioner of it ‘simply added to his distress’.
The Tribunal made orders under s 85 that N was restrained from continuing conduct similar to that giving rise to the complaint; that N pay NZ$20,000 damages for L’s humiliation, loss of dignity and injury to feelings, plus NZ$5,000 for L’s costs, and that N apologies to L and destroy the current file it holds on him.
Comment
This case illustrates dramatically the way in which the NZ Act, by its references to ‘personal information’ rather than ‘a record of personal information’ (as is typical throughout Australia’s Privacy Act) is capable of providing remedies in relation to information which is not (or not any longer) held in a record. The ‘medium-neutral’ approach of NZ’s IPP 6 is provides far more powerful rights than IPPs 5 and 6 in the Australian Act, and needs to be taken into account in any revision of Australia’s IPPs.
The Tribunal’s approach to the award of remedies for ‘significant humiliation, loss of dignity or injury to feelings’ may, however, be useful in the interpretation of the equivalent provisions in the Australian Privacy Act 1988, which allow the Privacy Commissioner to award compensation for ‘injury to the complainant’s feelings or humiliation suffered by the complainant’ (s 52(1A)).
Notice of the Appeal may be given within 30 days of the decision.
Graham Greenleaf, General Editor.