AB v Independent Broad-based Anti-corruption Commission
[2022] VSCA 283
•15 December 2022
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2022 0086 |
| NOTE: | This is a redacted version of the judgment that was published to the parties on a confidential basis. |
| AB (A PSEUDONYM) AND CD (A PSEUDONYM) | Applicants |
| v | |
| INDEPENDENT BROAD‑BASED ANTI‑CORRUPTION COMMISSION | Respondent |
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| JUDGES: | EMERTON P, BEACH and KYROU JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 14 November 2022 |
| DATE OF JUDGMENT: | 15 December 2022 |
| MEDIUM NEUTRAL CITATION: | [2022] VSCA 283 |
| JUDGMENT APPEALED FROM: | [2022] VSC 570 (Ginnane J) |
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JUDICIAL REVIEW – Natural justice – Investigation by Independent Broad-based Anti‑corruption Commission – Preparation of draft special report – Common law natural justice obligations in course of investigation – Statutory natural justice obligations in seeking responses to adverse material in draft special report – Whether judge erred in finding Commission did not breach natural justice obligations – Whether judge misinterpreted meaning of ‘adverse material’ in Independent Broad-based Anti-corruption Commission Act 2011, s 162(3) – Application for leave to appeal refused.
WORDS AND PHRASES – ‘Adverse material’ – Independent Broad-based Anti-corruption Commission Act 2011, s 162(3).
Independent Broad-based Anti-corruption Commission Act 2011, ss 4, 8, 15, 42, 44, 51, 57, 59, 59A, 60, 116–120, 127, 132A, 133, 159, 162, 164, 166.
National Companies and Securities Commission v The News Corporation Ltd (1984) 156 CLR 296 applied; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88, Coutts v Close [2014] FCA 19 considered.
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| Counsel | |||
| Applicants: | Mr G Hill SC with Mr B Bromberg | ||
| Respondent: | Mr PJ Hanks KC and Ms FI Gordon SC with Mr J Maxwell | ||
Solicitors | |||
| Applicants: | Slater and Gordon | ||
| Respondent: | Independent Broad-based Anti-corruption Commission | ||
TABLE OF CONTENTS
Introduction and summary
Relevant provisions of the IBAC Act
Objects of the IBAC Act and functions of IBAC
Preliminary inquiries and investigations by IBAC
Actions IBAC may take at the conclusion of an investigation
Facts and procedural history
Relevant legal principles
Overview of IBAC’s draft report
Judge’s reasons
Grounds of appeal and notice of contention
Notice of contention: Meaning of ‘adverse material’ in s 162(3) of the IBAC Act
Parties’ submissions on the notice of contention
Decision on the notice of contention
Grounds 8 to 12: Natural justice in the context of s 162(3) of the IBAC Act
Parties’ submissions on grounds 8 to 12
Decision on grounds 8 to 12
Grounds 1 to 7: Natural justice in the context of the preparation of the draft report
Parties’ submissions on grounds 1 to 7
Decision on grounds 1 to 7
Conclusion
EMERTON P
BEACH JA
KYROU JA:
Introduction and summary
The first applicant, AB, is a senior officer of the second applicant, CD, which is a non‑governmental body.
Between 2019 and 2021, the respondent, the Independent Broad-based Anti-corruption Commission (‘IBAC’), conducted an investigation codenamed ‘Operation [redacted]’. The investigation concerned [redacted].
On 4 and 5 November 2020, pursuant to a summons served upon him by IBAC in the course of its investigation, AB gave evidence in a private examination conducted by IBAC relating to [redacted].
After it completed its investigation, IBAC prepared a draft special report setting out its findings and recommendations. The draft report contained adverse comments and opinions relating to AB and CD. In accordance with s 162 of the Independent Broad‑based Anti-corruption Act 2011 (‘IBAC Act’),[1] on 6 December 2021 IBAC sent to AB a redacted version of the report and requested that he provide his response to it by 20 December 2021. The redacted version disclosed those parts of the draft report that were relevant to AB or which were necessary to provide context.
[1]Section 162 of the IBAC Act is relevantly set out at [30] below.
On 12 December 2021, AB’s solicitor wrote to IBAC requesting the transcript of his witness examination, the transcripts of examinations of other witnesses and copies of other materials upon which IBAC relied in preparing the draft report.
On 14 December 2021, IBAC agreed to provide the transcript of AB’s examination, but not the transcripts of other witnesses.
On 31 January 2022, AB commenced a proceeding in the Trial Division seeking judicial review remedies in relation to the draft report. AB alleged that IBAC had infringed the common law principles of natural justice in the manner in which it prepared the draft report and the natural justice requirements of s 162(3) of the IBAC Act in the manner in which it sought his response to the draft report.
On 7 February 2022, IBAC served CD with the same redacted version of the draft report that had been provided to AB and sought a response from CD by 21 February 2022.
On 11 February 2022, at CD’s request, CD was added as a party to AB’s proceeding against IBAC. CD sought the same relief as that sought by AB.
On 28 September 2022, the judge decided that IBAC had not infringed either the common law principles of natural justice or the natural justice requirements of s 162(3) of the IBAC Act.[2]
[2][Redacted] The judge also published a redacted version of his Reasons: [2022] VSC 570.
On 14 October 2022, the applicants filed an application for leave to appeal against the judge’s decision. The grounds upon which they rely are set out at [104] below.[3]
[3]In these reasons, proposed grounds of appeal are referred to as grounds of appeal.
On 21 October 2022, IBAC filed a notice of contention asserting that the judge had erred in his interpretation of one aspect of the natural justice requirements of s 162(3) of the IBAC Act. The grounds in the notice of contention are set out at [106] below.
For the reasons that follow, we have concluded that the error alleged in IBAC’s notice of contention is made out and that none of the applicants’ grounds of appeal are made out. Accordingly, the application for leave to appeal will be refused.
Relevant provisions of the IBAC Act
Objects of the IBAC Act and functions of IBAC
Section 8 of the IBAC Act sets out the objects of the Act relevantly as follows:
8Objects of Act
The objects of this Act are to—
(a)provide for the identification, investigation and exposure of—
(i)corrupt conduct; …
…
(b)assist in the prevention of—
(i)corrupt conduct; …
(c)facilitate the education of the public sector and the community about the detrimental effects of corrupt conduct … on public administration and the community and the ways in which corrupt conduct … can be prevented; …
Section 15 of the IBAC Act sets out IBAC’s functions. Section 15(2) refers to the function of identifying, exposing and investigating corrupt conduct. Section 15(3) refers to the functions of: receiving complaints and notifications in relation to corrupt conduct (para (a)); conducting preliminary inquiries (para (ba)); holding examinations (para (c)); and making referrals to other persons or bodies (para (d)). Subsections 15(5), (6) and (7) relevantly provide as follows:
(5)The IBAC has education and prevention functions for the purpose of achieving the objects of this Act.
(6)Without limiting the generality of subsection (5), the IBAC has the following functions under subsection (5)—
(a)to examine systems and practices in the public sector and public sector legislation;
(b)to provide information to, consult with and make recommendations to, the public sector;
(c)to assist the public sector to increase capacity to prevent corrupt conduct … by providing advice, training and education services;
(d)to provide information and education services to the community about the detrimental effects of corruption on public administration and ways in which to assist in preventing corrupt conduct;
…
(f)to publish information on ways to prevent corrupt conduct …
(7)For the purpose of achieving the objects of this Act, the IBAC has the following functions—
(a)to receive information, conduct research and collect intelligence, and to use that information, research and intelligence in support of investigations;
(b)to report on, and make recommendations as a result of, the performance of its duties and functions.
Section 4 of the IBAC Act contains a wide definition of ‘corrupt conduct’ by public officers and public bodies. The definition includes ‘the misuse of information or material acquired in the course of the performance of his or her or its functions as a public officer or public body’.[4]
Preliminary inquiries and investigations by IBAC
[4]IBAC Act, s 4(1)(d).
IBAC may conduct investigations in accordance with the powers and procedures contained in pt 3 of the IBAC Act (ss 51 to 80).
Section 51 of the IBAC Act enables complaints to be made to IBAC about conduct that may constitute corrupt conduct. Section 59 sets out the notifications to be given to a complainant by IBAC in relation to actions taken by it in response to a complaint. Section 59(4) provides that IBAC must withhold information from a complainant in certain circumstances, including when the provision of information would: not be in the public interest; put a person’s safety at risk; cause unreasonable damage to a person’s reputation; prejudice an investigation; contravene any applicable statutory secrecy obligation; or would involve the unreasonable disclosure of information relating to the affairs of any person.
Section 57(1) of the IBAC Act provides that, subject to certain exceptions, the principal officer of a public body must notify IBAC of any matter which he or she suspects on reasonable grounds involves corrupt conduct in relation to that public body.
Section 59A of the IBAC Act empowers IBAC to conduct a preliminary inquiry for the purpose of determining whether to dismiss, refer or investigate a complaint made under s 51 or a notification made under s 57. Subsections 60(1) and (2) provide that, if IBAC suspects on reasonable grounds that the conduct the subject of a complaint or notification constitutes corrupt conduct, it may conduct an investigation. IBAC may also conduct an investigation on its own motion (s 60(1)).
Part 4 of the IBAC Act (ss 81 to 101A) sets out IBAC’s investigative powers. Part 6 (ss 115 to 158) contains provisions relating to examinations conducted by IBAC for the purposes of an investigation.
Sections 116 to 119A of the IBAC Act relevantly provide as follows in relation to the conduct of examinations by IBAC.
116Conduct of examinations
In holding an examination, the IBAC—
(a)is not bound by the rules of evidence; and
(b)subject to any requirements under this Division, may regulate the procedure of the examination as the IBAC considers appropriate
117Examinations generally to be held in private
(1)Subject to subsection (2), an examination is not open to the public unless the IBAC considers on reasonable grounds—
(a)there are exceptional circumstances; and
(b)it is in the public interest to hold a public examination; and
(c)a public examination can be held without causing unreasonable damage to a person’s reputation, safety or wellbeing; …
…
118Offence to be present at examination
(1)A person (other than an IBAC Officer or a Victorian Inspectorate Officer) must not be present at an examination that is not open to the public unless he or she is—
(a)attending in accordance with a witness summons …; or
(b)… an Australian legal practitioner representing a person who is attending in accordance with a witness summons; or
(c)entitled to be present by reason of a direction given by the IBAC under section 119; or
(d)an Australian legal practitioner, or other person, engaged by the IBAC to assist the IBAC in the examination; or
(e)any other person authorised to be present by the IBAC or otherwise authorised to be present under this Act or any other law.
Penalty: 120 penalty units or imprisonment for 12 months or both.
…
119The IBAC may give directions
(1)The IBAC may give directions as to the persons who—
(a)may be present during an examination or part of an examination;
(b)must not be present during an examination or part of an examination.
…
119AAppearance at public examination by interested party
The IBAC may authorise a person to appear at a public examination if satisfied that—
(a)the person has a substantial and direct interest in the subject matter of the examination; and
(b)it is appropriate for the person to appear at the examination as an interested party.
Note
Under section 127(7), the IBAC may authorise the person to be represented at the examination by an Australian legal practitioner.
Under s 120(1) of the IBAC Act, IBAC may issue a witness summons to a person to attend IBAC to give evidence at an examination or to produce documents or other things or to do both. Section 127 provides that, subject to a direction to the contrary by IBAC, a witness may be represented at an examination by an Australian legal practitioner.
Section 132A of the IBAC Act provides as follows in relation to cross-examination of witnesses:
132ACross-examination of witness
(1)The following persons may, with the leave of the IBAC, cross-examine a witness at a public examination of the witness on any matter that the IBAC considers relevant—
(a)another witness;
(b)a person authorised under section 119A to appear at the examination;
(c)an Australian legal practitioner authorised under section 127 to represent a person referred to in paragraph (a) or (b) during the examination of the witness.
Section 133(4) of the IBAC Act provides that, unless IBAC considers on reasonable grounds that doing so may prejudice an investigation, a person who is examined must be provided with a copy of the video recording of his or her examination and any transcript of the examination that is created. There is no provision allowing a person to obtain the transcript of other witnesses’ examinations.
Part 2 of the IBAC Act (ss 12 to 50) is also relevant to IBAC investigations.
Section 42(1) of the IBAC Act provides that IBAC may serve a confidentiality notice if, during the investigation, it considers on reasonable grounds that the disclosure of restricted matters would be likely to prejudice an investigation, the safety or reputation of a person, or the fair trial of a person charged with an offence. Under s 42(5), IBAC must cancel a confidentiality notice if it considers on reasonable grounds that it is no longer necessary to restrict disclosure of the restricted matters. While a confidentiality notice is in force, a person upon whom it has been served commits an offence if he or she discloses a restricted matter specified in the notice.[5]
[5]IBAC Act, s 44(1).
Division 4 of pt 2 of the IBAC Act (ss 45 to 50) contains provisions affording protection for persons who appeared as witnesses at an IBAC examination or who provided information to IBAC. For example, some provisions prohibit disclosure of information which is likely to reveal the identity of, or endanger the safety of, such a person.[6]
Actions IBAC may take at the conclusion of an investigation
[6]IBAC Act, ss 46 to 50.
Part 7 of the IBAC Act (ss 159 to 166) sets out the actions that IBAC may take at the conclusion of an investigation. Those actions include: the making of recommendations to a principal officer of a public body, a responsible Minister or the Premier (s 159(1)); the making of a referral to prosecutorial and other bodies (div 5 of pt 3); and the transmission of a special report to the Victorian Parliament (s 162). A special report is a report prepared by IBAC other than an annual report.
Sections 162, 164 and 166 of the IBAC Act relevantly provide as follows:
162Special reports
(1)The IBAC may at any time cause a report to be transmitted to each House of the Parliament on any matter relating to the performance of its duties and functions.
(2)If the IBAC intends to include in a report under this section adverse findings about a public body, the IBAC must give the relevant principal officer of that public body an opportunity to respond to the adverse material and fairly set out each element of the response in its report.
(3)If the IBAC intends to include in a report under this section a comment or an opinion which is adverse to any person, the IBAC must first provide the person a reasonable opportunity to respond to the adverse material and fairly set out each element of the response in its report.
(4)If the IBAC intends to include in a report under this section a comment or an opinion about any person which is not adverse to the person, the IBAC must first provide that person with the relevant material in relation to which the IBAC intends to name that person.
…
(7)The IBAC must not include in a report under this section any information that would identify any person who is not the subject of any adverse comment or opinion unless the IBAC—
(a)is satisfied that it is necessary or desirable to do so in the public interest; and
(b)is satisfied that it will not cause unreasonable damage to the person’s reputation, safety or wellbeing; and
(c)states in the report that the person is not the subject of any adverse comment or opinion.
…
(11)If the IBAC proposes to transmit a report to the Parliament on a day on which neither House of the Parliament is actually sitting, the IBAC must—
(a)give one business day’s notice of intention to do so to the clerk of each House of the Parliament; and
(b)give the report to the clerk of each House of the Parliament on the day indicated in the notice; and
(c)publish the report on the IBAC’s Internet website as soon as practicable after giving it to the clerks.
…
(13)A report that is given to the clerks under subsection (11)(b) is taken to have been published by order, or under the authority, of the Houses of the Parliament.
(14)The publication of a report by the IBAC under subsection (11)(c) is absolutely privileged and the provisions of sections 73 and 74 of the Constitution Act 1975 and any other enactment or rule of law relating to the publication of the proceedings of the Parliament apply to and in relation to the publication of the report as if it were a document to which those sections applied and had been published by the Government Printer under the authority of the Parliament.
…
164Outcome of investigation
(1)After conducting an investigation, the IBAC may—
(a)make a referral under Division 5 of Part 3;
(b)make a recommendation in accordance with section 159;
(c)transmit a special report under section 162;
(d)advise a complainant or other person in accordance with section 163;
(e)do any combination or all or none of the matters referred to in paragraphs (a) to (d);
(f)determine to make no finding or take no action following the investigation.
…
166Persons who receive reports or information prior to publication
(1)… a person who receives a proposed report … or a draft or part of a proposed report or information contained in a proposed report or draft or part of a proposed report, before the report is published by the IBAC in accordance with section 162 … must not disclose any information contained in the proposed report or draft or part of the proposed report unless—
(a)the disclosure is permitted under subsection (2); and
…
Penalty: 120 penalty units or imprisonment for 12 months or both.
(2)For the purposes of subsection (1), a disclosure is permitted if the disclosure—
(a)is made in accordance with a direction or authorisation given by the IBAC; or
(b)is made by an officer of an entity to other officers of the entity for the purposes of enabling the entity to respond to the proposed report or draft or part of the proposed report; or
(c)subject to section 127(2) and (8), is made for the purposes of obtaining legal advice or representation in relation to the proposed report or draft or part of the proposed report; or
…
(d)is otherwise authorised or required to be made by or under this Act.
Section 162 of the IBAC Act was inserted into the Act by s 9 of the Independent Broad‑based Anti-corruption Commission Amendment (Investigative Functions) Act 2012 (‘2012 amending Act’). The explanatory memorandum for the 2012 amending Act relevantly stated as follows in relation to s 162 (which was originally numbered s 86):
The new section 86 provides that IBAC may at any time report to Parliament on any matter relating to the performance of its duties and functions. This section enables IBAC to make special reports, separate from its annual report. The new section 86 provides a protection to allow an opportunity for any person the subject of any adverse opinion or comment to respond to adverse findings made by IBAC and for all elements of this response to be set out in a report. If IBAC intends to include adverse findings about a public body in a report, IBAC must give the relevant principal officer of that body an opportunity to respond to the adverse material and fairly set out each element of the response in its report.[7]
[7]Explanatory Memorandum, Independent Broad-based Anti-corruption Commission Amendment (Investigative Functions) Bill 2011, 30 (emphasis added).
Facts and procedural history
In June 2018, [redacted] notified IBAC of allegations of [redacted]. The notification was made under s 57(1) of the IBAC Act. [redacted]
In July 2018, in response to [redacted] notification, IBAC commenced Operation [redacted] as a preliminary inquiry into the matters the subject of the notification. In January 2019, IBAC determined to progress the preliminary inquiry as an investigation under s 60(1)(b) of the IBAC Act. In June 2019, IBAC expanded the scope of the investigation to include further allegations of [redacted].
Between 2019 and 2021, IBAC gathered information and conducted private examinations of witnesses.
On 7 August 2019, IBAC served a confidentiality notice numbered [redacted] upon AB. The notice listed the following restricted matters that AB was not permitted to disclose, subject to certain exceptions:
1. What is this notice?
This confidentiality notice is issued under section 42 of the [IBAC Act] in respect of the following restricted matters:
–Any evidence or information given to, or obtained by, the IBAC;
–The contents of any document, or a description of any thing, produced to, or obtained by, the IBAC;
–The contents of any document, or a description of any thing, which the IBAC has made a copy of or seized under Division 3 or Division 4 of Part 4 [of the IBAC Act];
–The existence of, or any information about, a confidentiality notice or a witness summons;
–The subject matter of an investigation in relation to which a witness summons has been issued;
–Any information that could enable a person who has been, or is proposed to be, examined by, or who has produced, or may produce, any document or thing to, the IBAC, to be identified or located; and
–The fact that a person has been, or is proposed to be, examined by, or has produced, or may produce, any document or thing to, the IBAC.
On 7 February 2020, pursuant to s 120 of the IBAC Act, IBAC served a witness summons upon AB requiring him to give evidence in a private examination on four matters, only one of which is presently relevant. That matter was described as [redacted].
Pursuant to the witness summons, AB gave evidence in a private examination on 4 and 5 November 2020. He was represented by senior counsel at the examination.
After it completed its Operation [redacted] investigation, IBAC prepared a draft special report setting out its findings and recommendations pursuant to ss 162(1) and 164(1)(c) of the IBAC Act. The draft report contained adverse comments and opinions relating to AB and CD.
On 6 December 2021, IBAC sent a letter by email to seven persons, including AB and one public body, attaching a redacted version of the draft report which disclosed parts of the report relevant to each of them or which were necessary to provide them with context. Each recipient was required to respond to the draft report by 20 December 2021. The letter stated that IBAC intended to finalise the draft report and provide it to Parliament as a special report after it received and considered responses from the seven recipients.
IBAC’s letter dated 6 December 2021 to AB accompanying the redacted draft report[8] stated:
Dear [AB]
Draft Special Report — Operation [redacted] — For Natural Justice Review
As you are aware, IBAC has investigated [redacted] (Operation [redacted]). IBAC has concluded this investigation and prepared a draft special report (Draft Report) under section 162 of the [IBAC Act].
The purpose of this letter is to make a redacted copy of the Draft Report available to you for your review and response. IBAC is making a redacted Draft Report available to you because it contains comments or opinions that may be considered adverse to you. These comments or opinions are unredacted.
Please provide any response to the Draft Report to IBAC by close of business on Monday 20 December 2021. If IBAC has not received a response from you by this date, we will take this to mean that you do not wish to comment. If this is the case, your decision not to respond to the Draft Report will not be the subject of adverse comment in the final special report.
…
The Draft Report is provided to you in strict confidence. You are prohibited from making copies or disclosing any of its contents except for the purpose of obtaining legal advice or representation. We draw your attention to section 166 of the IBAC Act which imposes criminal penalties for unauthorised disclosure of any information contained in a report, a draft or part of a proposed report prior to its publication.
Once IBAC has considered all feedback to the Draft Report, the special report will be finalised and provided to Parliament for tabling. Depending on comments received by IBAC in response to the Draft Report, the final version might differ in some respects.[9]
[8]For convenience, we will refer to the redacted draft report that was sent to AB as ‘the draft report’.
[9]Emphasis in original.
On 12 December 2021, AB’s solicitor wrote to IBAC requesting the transcript of AB’s witness examination, the transcripts of examinations of other persons referred to in the draft report and copies of the reports and other documents cited and relied upon in the draft report. The solicitor also sought an extension until the end of March 2022 for AB to provide a response to the draft report.
On 14 December 2021, IBAC granted an extension until 7 January 2022 and agreed to provide the transcript of AB’s examination, together with copies of all documents shown to him during his examination, which it did three days later. On 17 December 2021, IBAC advised AB’s solicitor that it would not provide him with the transcripts of the examinations of other witnesses. IBAC granted AB further extensions of time until 4 February 2022.
On 19 January 2022, AB’s solicitor spoke by telephone to IBAC’s solicitor and requested that AB be allowed to seek the assistance of persons employed by CD for the purpose of preparing his response to the draft report. The applicants maintain that IBAC’s solicitor refused the request on the basis that the draft report was provided to AB personally on a confidential basis. IBAC maintains that its solicitor stated that she did not have authority to make a decision on the request and that the request should be confirmed in writing so that it could be considered by IBAC. The judge appears to have adopted the applicants’ version of the telephone discussion.[10] It is not necessary for us to resolve this factual dispute. In any event, AB’s solicitor did not reiterate his request in writing.
[10]Reasons, [12].
On 21 January 2022, AB’s solicitor sent an email to IBAC stating that IBAC had denied AB a reasonable opportunity to respond to the adverse material in the draft report because he was not provided the documentation he had requested and was not permitted to seek assistance from other employees of CD. The email stated that CD had also been denied natural justice because it had not been given the draft report and an opportunity to respond to it. The email stated that the solicitor had been instructed to commence a court proceeding.
On 31 January 2022, AB commenced a proceeding in the Trial Division by filing an originating motion seeking judicial review remedies in relation to the draft report.
At an interlocutory hearing on 3 February 2022, IBAC undertook that, in the event of the originating motion being dismissed, it would allow AB five business days to respond to the draft report under s 162(3) of the IBAC Act. IBAC also undertook not to finalise the draft report, or send the finalised report to Parliament, until after final judgment in the proceeding.
On 7 February 2022, IBAC served CD with the same redacted copy of the draft report that had been provided to AB by sending it to AB in his capacity as a senior officer of CD. The covering letter provided an opportunity for CD to respond to the draft report in accordance with s 162(3) of the IBAC Act by 21 February 2022. The covering letter was similar to the letter to AB dated 6 December 2021,[11] save that it included the following paragraph:
Given the Draft Report is being provided to [CD] as an organisation named in the report, we anticipate that you may apply to IBAC for approval to seek instructions from particular [CD] staff to enable a response to be provided. While maintaining confidentiality of the Draft Report is of critical importance at this stage of the process, IBAC will promptly consider any request made in writing. In order for IBAC to consider such a request, we ask that you identify the name, role title of the staff member and relevance of the person you propose to speak to about the Draft Report and provide that to IBAC for response.
[11]See [40] above.
On 10 February 2022, AB’s solicitor relevantly informed the Court: ‘Now that [CD] has received and is aware of the draft report, [CD] objects to the draft report on the same grounds as [AB] and seeks to be joined as a plaintiff in [the] proceeding.’
On 11 February 2022, CD was added as a party to the proceeding and leave was given to the applicants to file an amended originating motion. In the amended originating motion, the applicants sought the following judicial review remedies:
(a)An order in the nature of prohibition restraining IBAC from transmitting the special report to each House of Parliament and from publishing it by any other means, including on IBAC’s website.
(b)Declarations that IBAC has failed to afford the applicants procedural fairness in the preparation of the special report.
(c)Declarations that IBAC has contravened s 162(3) of the IBAC Act by failing to provide the applicants with a reasonable opportunity to respond to adverse findings made against them in the special report.
In the amended originating motion, the applicants relied upon four grounds of review. Grounds 1 and 3 related to AB, whilst grounds 2 and 4 related to CD.
Ground 1 asserted that AB was denied natural justice during the preparation of the draft report for the following reasons:
(i)[AB] was not put on notice that the IBAC intended to prepare a Special Report.
(ii)[AB] was not provided an opportunity to address the allegations and provide supporting material to the IBAC, before the adverse findings were made by the IBAC in the Draft Report.
(iii)The evidence that is relied upon in the Draft Report to support adverse findings against [AB] was not put to [AB] in his witness examination.
(iv)[AB] has not been provided with the transcripts from other witness examinations which are relied upon in reaching adverse findings in relation to [AB].
(v)[AB] has not been provided with other documents and reports cited and relied upon in the Draft Report.
(vi)[AB] has not been afforded a reasonable time period in which to respond properly to [the] Draft Report.
(vii)[AB] has been precluded from speaking with other persons employed by [CD] who could have assisted him to prepare his response.
Ground 2 relied upon the same reasons as ground 1, other than (vi) and (vii), for the assertion that CD had been denied natural justice during the preparation of the draft report.
Ground 3 asserted that IBAC failed to provide AB with a reasonable opportunity to respond to the adverse findings made against him in the draft report, in contravention of s 162(3) of the IBAC Act, for the following reasons:
(i)[AB] has not been afforded a reasonable time period in which to respond properly to [the] Draft Report.
(ii)[AB] has not been provided with the transcripts from other witness examinations which are relied upon in reaching adverse findings in relation to [AB].
(iii)[AB] has not been provided with other documents and reports cited and relied upon in the Draft Report.
(iv)[AB] has been precluded from speaking with other persons employed by [CD] who could have assisted him to prepare his response.
Ground 4 relied upon the same reasons as ground 3, other than (iv), for the assertion that IBAC failed to provide CD with a reasonable opportunity to respond to the adverse findings made against it in the draft report, in contravention of s 162(3) of the IBAC Act.
On 21 February 2022, IBAC sent a letter by email to the applicants’ solicitor about the confidentiality notice referred to at [35] above, which relevantly stated:
Confidentiality Notice [redacted]
I refer to the confidentiality notice [redacted] that was served on you in relation to … Operation [redacted].
As a result of a recent Court of Appeal decision in another IBAC matter,[[12]] the form of confidentiality notices issued by IBAC was found invalid because it did not sufficiently specify the ‘restricted matter or restricted matters’ that apply. As a consequence, we consider that you are no longer bound by the terms of the confidentiality notice previously served on you.
Please be advised that the Court of Appeal decision does not otherwise impact on IBAC’s … Operation [redacted] [investigation] nor its findings or recommendations.
Despite the Court of Appeal’s conclusions about the validity of the confidentiality notice, I note that at no time has IBAC been made aware of any misunderstanding as to the nature of the confidentiality attached to any evidence or information given to IBAC. On this occasion, given [the operation is] nearing completion, IBAC does not intend to issue a new confidentiality notice to you as it’s no longer considered necessary to restrict disclosure of the restricted matters in respect of the [investigation]. If IBAC forms the view that a new confidentiality notice is required, we will contact you.
…
Operation [redacted] Special Report — Natural Justice
The draft special report for Operation [redacted] [was] provided to you on 6 December 2021 as a part of natural justice process required by section 162 of the [IBAC Act]. The natural justice process imposed separate confidentiality obligations that [prohibit] the unauthorised disclosure of any information contained in the draft report prior to its publication.
In this regard, while you are allowed to disclose information in the draft report for the purpose of obtaining legal advice or representation, for the avoidance of any doubt, the confidentiality obligations do not prevent you from seeking any welfare support should you wish to do so. If you would like to discuss any aspect of the draft report with any other person, please contact IBAC for authorisation.
[12]The decision in question is Beckingham v Browne (2021) 294 A Crim R 67; [2021] VSCA 362, which was published on 17 December 2021 and held that IBAC’s confidentiality notices in that case were invalid.
On 28 September 2022, the judge decided that the applicants had not been denied natural justice in the preparation of the draft report and that IBAC had not contravened s 162(3) of the IBAC Act. The hearing before the judge was conducted in closed court pursuant to an order made by him under s 30(1) of the Open Courts Act 2013 on 3 February 2022. The judge published an unredacted version of his reasons to the parties and a redacted version publicly.[13]
[13]See n 2 above.
On 4 October 2022, after hearing further submissions from the parties, the judge made an order dismissing the proceeding. The order also restrained IBAC from finalising the draft report, transmitting it to Parliament or publishing it by any other means until 5:00 pm on 12 October 2022.
As we have already stated, on 14 October 2022, the applicants filed an application for leave to appeal against the judge’s order dismissing their proceeding.
Prior to the filing of that application, on 12 October 2022, a judicial registrar made a consent order dealing with an application filed by the applicants on 5 October 2022 seeking certain interlocutory orders. The consent order relevantly noted the following:
(a)the proposed application for leave to appeal and any resultant appeal could be heard on an expedited basis on 14 November 2022;
(b)IBAC had undertaken not to transmit the special report to Parliament or otherwise publish it (except for the purpose of discharging the obligations imposed by s 162(2) or (3) of the IBAC Act in relation to persons other than the applicants) prior to the final determination of any application for leave to appeal or resultant appeal; and
(c)the applicants will provide their responses to the draft report no later than five business days after the final determination of any application for leave to appeal or resultant appeal.
As a result of the consent order dated 12 October 2022, the special report will not be finalised until after the final determination of the application for leave to appeal and any resultant appeal.
Relevant legal principles
The terms ‘rules of natural justice’ and ‘rules of procedural fairness’ are often used interchangeably. In the present case, the judge and the parties tended to use the former terminology. For convenience, we will also do so except where we are quoting from authorities or other documents, or where the context otherwise requires.
Where a statute confers power upon a public official to adversely affect a person’s rights or interests, the exercise of that power is subject to the rules of natural justice unless they are excluded by plain words of necessary intendment.[14] In this context, a person includes a corporation or other body[15] and interests includes the reputation of a person or body.[16] Accordingly, a public official who is exercising a power to inquire and make findings which may adversely affect a person’s reputation is subject to the rules of natural justice in relation to that person.[17]
[14]Kioa v West (1985) 159 CLR 550, 584, 619, 632 (‘Kioa’); Annetts v McCann (1990) 170 CLR 596, 598 (‘Annetts’).
[15]Haoucher v Minister of State for Immigration and Ethnic Affairs (1990) 169 CLR 648, 652 (‘Haoucher’).
[16]Kioa (1985) 159 CLR 550, 582, 618–19; Annetts (1990) 170 CLR 596, 608; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 578, 592, 594, 597 (‘Ainsworth’).
[17]In re Pergamon Press Ltd [1971] 1 Ch 388, 399–400 (‘Pergamon Press’); Annetts (1990) 170 CLR 596, 608–9; Ainsworth (1992) 175 CLR 564, 578–9, 594.
A court will not find in a statute a necessary intendment to exclude the rules of natural justice unless the intention can be inferred clearly from the provisions of the statute. The fact that the statute includes some features of the rules of natural justice will not necessarily give rise to an inference that the statute intends to exclude all other features of the rules of natural justice.[18]
[18]Annetts (1990) 170 CLR 596, 598.
The hearing rule of natural justice requires that a person whose rights or interests may be adversely affected by the exercise of a statutory power be given a ‘reasonable opportunity to be heard’. In broad terms, a reasonable opportunity to be heard encompasses a person being given prior notice of the substance of the matters to be taken into account by the public official against the person and being afforded a reasonable opportunity to respond to them before the statutory power is exercised. A reasonable opportunity to respond does not necessarily require an oral hearing.
Whilst the phrase ‘reasonable opportunity to be heard’ is well understood at the broad conceptual level, there is no universally applicable checklist of what a public official must do to provide it.[19] That is because the precise contents of the hearing rule may vary depending on a range of factors that may be relevant to the circumstances of a particular case.[20] Those factors include: the nature of the body exercising the statutory power; the scope and objects of the statute conferring the statutory power and the nature of that power; the identity of the person who may be affected by the exercise of the statutory power; the right or interest of that person that may be interfered with by the exercise of that power; and the severity of the consequences for that person resulting from such interference.[21] The concern of the law is to avoid practical injustice.[22]
[19]National Companies and Securities Commission v The News Corporation Ltd (1984) 156 CLR 296, 311–12, 319–20 (‘News Corporation’); Annetts (1990) 170 CLR 596, 617; Haoucher (1990) 169 CLR 648, 652–3.
[20]Kioa (1985) 159 CLR 550, 582, 615–16, 633; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88, 99 [25] (‘VEAL’).
[21]Pergamon Press [1971] 1 Ch 388, 403; Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, 503–4 (‘Mobil Oil’); Kioa (1985) 159 CLR 550, 585, 616; VEAL (2005) 225 CLR 88, 98 [23]; News Corporation (1984) 156 CLR 296, 311–12, 326; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152, 160–1 [26].
[22]Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1, 14 [37].
In National Companies and Securities Commission v The News Corporation Ltd, Brennan J stated the principle succinctly as follows:
The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice.[23]
[23](1984) 156 CLR 296, 326 (citations omitted).
In the context of the exercise of investigative powers by a public official, the courts have been careful in articulating what a public official must do to comply with the rules of natural justice in order to ensure that the investigation being conducted is not impeded or compromised or the statutory function being performed is not frustrated. It has been held that there is no universal principle that the person being investigated is entitled:
(a)to receive notice of the investigation, and its subject matter, at the commencement of the investigation;[24]
(b)to be informed of the identity of a witness providing evidence or information that is adverse to that person;[25]
(c)to attend when a witness provides evidence or information or to cross-examine the witness;[26]
(d)to receive a copy of any document provided by a witness or a transcript of the witness’s evidence;[27] and
(e)to be informed during the course of an investigation of the public official’s preliminary views about the outcome of the investigation.[28]
[24]Pergamon Press [1971] 1 Ch 388, 404, 407; News Corporation (1984) 156 CLR 296, 323–6.
[25]Pergamon Press [1971] 1 Ch 388, 399–400, 407; VEAL (2005) 225 CLR 88, 92 [7], 100 [29].
[26]Pergamon Press [1971] 1 Ch 388, 399–400, 407; News Corporation (1984) 156 CLR 296, 313–14, 323–6.
[27]Pergamon Press [1971] 1 Ch 388, 399–400, 407; Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381, 435 [245], 439 [267] (‘South Sydney City Council’); VEAL (2005) 225 CLR 88, 92 [7], 100 [29].
[28]News Corporation (1984) 156 CLR 296, 315–16.
News Corporation[29] involved an investigation into the respondent companies by the National Companies and Securities Commission (‘NCSC’). The High Court rejected a submission from the respondent companies that, prior to the NCSC making any findings, they and their lawyers were entitled to: be present throughout private hearings being conducted by the NCSC; cross-examine witnesses; give evidence in reply; and make submissions.
[29](1984) 156 CLR 296.
Gibbs CJ explained the position as follows:
Let it be assumed that as a result of the hearing the reputation of the respondents may in some way be affected. The question would then be what natural justice requires … That question has to be answered in the light of a statutory framework which expressly recognizes the need for expedition and gives the [NCSC] power to decide who may attend and who may intervene at the hearing. If the [NCSC] were to accord to all the persons whose reputation might possibly be affected by the hearing a right to cross-examine the witnesses and call evidence as though they were in a court of law, the hearing might become so protracted as to render it practically futile. In these circumstances, with all respect, I find it quite impossible to say that the rules of natural justice require the [NCSC] to proceed as though it were conducting a trial. It seems to me in no way unfair that, at a hearing of the kind which I have described, the respondents should not be entitled to cross-examine such witnesses as the [NCSC] may call, or to call evidence of their own.[30]
[30]News Corporation (1984) 156 CLR 296, 313–14.
Mason, Wilson and Dawson JJ stated:
There is considerable force in the [NCSC’s] claim that to [allow the respondents to be present and cross-examine witnesses in private hearings] would frustrate the purpose of the hearing. It is of the very nature of an investigation that the investigator proceeds to gather relevant information from as wide a range of sources as possible without the suspect looking over his shoulder all the time to see how the inquiry is going. For an investigator to disclose his hand prematurely will not only alert the suspect to the progress of the investigation but may well close off other sources of inquiry. Of course, there comes a time in the usual run of cases when the investigator will seek explanations from the suspect himself and for that purpose will disclose the information that appears to require some comment. Having regard to the express statutory injunction of s. 38(1)(d) of the NCSC Act, it would clearly be a denial of natural justice if the [NCSC] in the present hearing received evidence adverse to [the respondents] without providing an opportunity to [them] to be heard. An effective examination of such persons would require that the substance of the adverse information received during the investigation be disclosed to them. Legal representation would be permitted to such witnesses with the opportunity for their further examination by counsel and for submissions to be made touching matters covered by the examination. There is no reason why the [NCSC] should not welcome, time permitting, any request by [the respondents] that further persons be called to give evidence. A hearing conducted along these lines … would in our opinion be fair in all the circumstances.
…
In our opinion the [NCSC] will comply with the statutory mandate to observe the rules of natural justice in the present case if it proceeds to allow each witness who is called to give evidence to be legally represented, with freedom for that representative to participate in the examination of the witness, and for the provision of a transcript of his evidence. The conduct of an investigation in such a manner is fair and nothing more is required.[31]
[31]News Corporation (1984) 156 CLR 296, 323–6.
A public official who conducts an investigation may receive information which is confidential in nature or is provided by a confidential source in circumstances where disclosure of the information, or the identity of the source, to a person being investigated may have prejudicial consequences. In such a case, a reasonable opportunity to be heard is often satisfied by the public official providing to a person being investigated the ‘substance’ or ‘gravamen’ of the allegations made against him or her rather than the primary information which contains the allegations.[32]
[32]VEAL (2005) 225 CLR 88, 92 [7], 99 [27], 100 [29]; Coutts v Close [2014] FCA 19, [118] (‘Coutts’).
For example, in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs,[33] the High Court rejected a submission from a person who had appealed to the Refugee Review Tribunal (‘RRT’) against the refusal of a protection visa that he was entitled to be provided with an adverse letter received by the RRT. The Court held that the appellant was not entitled to be given a copy of the letter or to be informed of the identity of its author, but was entitled to be informed of the substance of the allegations made in the letter. The Court explained its conclusion as follows:
[T]he steps the [RRT] was bound to take in order to afford procedural fairness are not necessarily to be identified with the steps that should be taken by a court deciding a matter by adversarial procedures. …
…
The appellant submitted that procedural fairness … required that he be given the letter because, if he did not know who had written the letter, one obvious form of answer to the allegations made in it would be denied to him. He could not say that the author of the letter was not to be believed. That is, he could not attack the credibility of the informer unless he knew who the informer was.
So much may readily be accepted. But it by no means follows that the [RRT] was bound to give the appellant a copy of the letter, or tell him who had sent it, or even tell him that the information had been sent in written form. To give the appellant a copy of the letter or tell him who wrote it would give no significance to the public interest in the proper administration of the Act which … required that those entitled to a visa be granted one and those not entitled be refused. It is in aid of that important public interest that, so far as possible, there should be no impediment to the giving of information to authorities about claims that are made for visas. That public interest, and the need to accord procedural fairness to the appellant, could be accommodated. They were to be accommodated, in this case, by the [RRT] telling the appellant what was the substance of the allegations made in the letter and asking him to respond to those allegations. How the allegations had been given to the [RRT] was not important. No doubt the appellant’s response to the allegations would then have to be considered by the [RRT] in light of the fact that the credibility of the person who made the allegations could not be tested. And that may well leave the [RRT] in a position where it could not decide whether the allegations made had substance. But the procedure outlined would be fair to the appellant and it would be a procedure which accommodated what Brennan J described in Kioa as the ‘problem of confidentiality’.[34]
[33](2005) 225 CLR 88.
[34]VEAL (2005) 225 CLR 88, 98 [24], 99–100 [28]–[29] (citations omitted).
Coutts v Close[35] concerned an investigation which led to the termination of the applicant’s employment as a police officer. One of the issues in the case was whether the applicant was entitled to be informed of the names of individuals who had given adverse evidence in relation to him. Griffiths J stated that the general requirement that adverse material which is credible, relevant and significant to a proposed decision which may adversely affect a person be disclosed to that person did not require that a decision‑maker must always disclose verbatim copies of the adverse material. He stated that, in some circumstances, it is sufficient if the affected person is informed of the substance or gravamen of the issue.[36] He decided that there were appropriate reasons in that case for preserving confidentiality, by redacting the names of the individuals. Those reasons included that it was possible that the individuals may have a future working relationship with the applicant in the hierarchical structure of the police force.[37] He also decided that it was sufficient for the applicant to be given accurate summaries of the evidence of witnesses rather than full copies of the documents containing the evidence.[38]
[35][2014] FCA 19.
[36]Coutts [2014] FCA 19, [118].
[37]Coutts [2014] FCA 19, [124].
[38]Coutts [2014] FCA 19, [127].
In some cases, it may be sufficient for a public official exercising investigative powers to afford a person who is the subject of the investigation a reasonable opportunity to be heard by giving that person, towards the end of the investigation, proposed adverse findings — for example, in a draft report or show cause notice — and seeking his or her response.[39] The fact that the opportunity to respond is afforded at a time when the public official has formed tentative views which are adverse to the person — or has formulated tentative adverse findings — does not mean that he or she is being denied natural justice.[40] However, in such a case, the public official must give the person a reasonable opportunity to respond to the tentative adverse findings and must consider any response in good faith and with an open mind.[41]
[39]Pergamon Press [1971] 1 Ch 388, 404, 407; News Corporation (1984) 156 CLR 296, 315–16; Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (2011) 195 FCR 318, 363–4 [71]; Brooks v Easther [2017] TASFC 12, [26]–[27], [38], [44] (‘Brooks’).
[40]News Corporation (1984) 156 CLR 296, 315–16; Brooks [2017] TASFC 12, [26]–[27], [38], [44].
[41]News Corporation (1984) 156 CLR 296, 315–16; Brooks [2017] TASFC 12, [26]–[27], [38].
In News Corporation, Gibbs CJ stated:
[A]s common judicial experience shows, minds may remain open and impartial although they have given consideration to a matter and reached tentative conclusions upon it; and it will be enough in the present case if the respondents are given a fair opportunity to correct or contradict any relevant material prejudicial to them. … [T]here is no reason to think that the [NCSC] will not give to the respondents adequate notice of any adverse conclusion which it has tentatively reached, or of any criticism which it tentatively proposes to make, or that it will not listen with an open mind to whatever material is then put before it by the respondents and give full weight to such material.[42]
[42]News Corporation (1984) 156 CLR 296, 315–16 (citations omitted).
Overview of IBAC’s draft report
The draft report is divided into the following six parts: 1 ‘Summary of investigation and outcomes’; 2 ‘Background’; 3 ‘The people and entities involved’; 4 ‘What IBAC’s investigation found’; 5 ‘Systems, controls and culture’; and 6 ‘Conclusions and recommendations’.
The applicants’ grounds of appeal seek to impugn the judge’s findings regarding IBAC’s natural justice obligations only in relation to pt 5 of the draft report. Before we turn to pt 5, we will briefly refer to the other parts to provide context for pt 5.
Part 1 of the draft report refers to some of the factual matters to which we have already referred and summarises the scope and outcome of the Operation [redacted] investigation, and the recommendations contained in the report.
Part 2 of the draft report refers to reports resulting from previous inquiries into [redacted]
Part 3 of the draft report makes brief references to a number of persons or entities, including [redacted] AB and CD.[43]
[43]The identity of, and details relating to, other persons or entities are redacted.
Part 4 of the draft report sets out details of the allegations relating to [redacted]. At the hearing of the application for leave to appeal, senior counsel for the applicants informed us that the applicants accept that they were provided with sufficient information about the allegations against them that are dealt with in pt 4 and that they were given a reasonable opportunity to respond to the allegations.
Part 6 of the draft report sets out IBAC’s conclusions and recommendations. The last paragraph of pt 6 states as follows:
In line with its prevention and education functions, IBAC is publishing this special report to inform the community and public sector of [redacted].
Part 5 of the draft report deals with systems, controls and culture within [redacted].
Part 5 of the draft report is then divided into the following sections and sub-sections:
[redacted]
Although the applicants complain that they were not given the underlying material that informed IBAC’s findings against them in pt 5 as a whole and an adequate opportunity to respond, at the hearing of the application for leave to appeal they focused upon a number of specific findings. Those findings and the sections or sub-sections of pt 5 in which they are located are set out at [87] below. Before setting out those findings, it is necessary to explain some of the individuals or matters that are referred to in those findings.
The first is [redacted]. The second is [redacted]. The third is [redacted].
The findings in pt 5 of the draft report upon which the applicants focused are as follows:[44]
[44]Citations omitted.
(a)The first finding, under the heading [redacted], is as follows:
[redacted]
(b)The second finding, also under the heading [redacted], is as follows:
[redacted]
(c)The third finding, under the heading [redacted], is as follows:
[redacted]
(d)The fourth finding, under the heading [redacted], is as follows:
[redacted]
Other concerns were also raised about providing evidence against [CD] or [AB].
(e)The fifth finding, under the heading [redacted], is as follows:
[redacted]
Judge’s reasons
The judge’s reasons deal with each of the four grounds upon which the applicants relied in support of the judicial review remedies they sought.[45] The summary of the judge’s reasons that follows focuses on those reasons that are relevant to the issues before us.
[45]See [49]–[54] above.
The judge found that the IBAC Act did not exclude natural justice in respect of IBAC’s actions when conducting an investigation. He said that the question that arose in respect of grounds 1 and 2 was what was the content of the natural justice that IBAC had to provide during its investigation, and that the answer to this question depended upon the statutory context.
The judge considered provisions of the IBAC Act which modified or restricted aspects of the common law hearing rule during the conduct of investigations, including modifications to the right of a complainant to be notified of an investigation,[46] the right of a person affected to be present at witness examinations,[47] and the right to cross‑examine witnesses.[48] He noted that the IBAC Act leaves it to IBAC to determine how an investigation should proceed, including who may be present at a private examination, and did not contain a right to obtain documents or transcripts of other witnesses’ evidence. He also observed that an important aim of the IBAC Act is to protect the identity of persons who give evidence or provide information to IBAC and who may fear reprisal as a result. He said that the IBAC Act ‘contains a compromise between confidentiality of the investigative process and natural justice’.[49] He also said that these features of the IBAC Act ‘suggest that the content of natural justice during the investigative stage does not include the rights that the [applicants] seek’.[50]
[46]See [18] above.
[47]See [22] above.
[48]See [24] above.
[49]Reasons, [119].
[50]Reasons, [120].
The judge ultimately determined that grounds 1 and 2 were not established for the following reasons:
In the case of a statutory investigation, especially a confidential investigation, the requirement to give natural justice is usually satisfied by giving persons affected a reasonable opportunity to respond to adverse comments or allegations about them before final conclusions are formed. It will usually be sufficient that the substance of the adverse comments or opinions is given to the person who may be affected and that they are given an opportunity to respond to them before a final report is completed. I consider that to be IBAC’s obligation during Operation [redacted]. The common law does not require that a confidential investigation be conducted like a trial. It does not require that notice be given to people who may be the subject of investigation, or that witnesses be provided with the transcripts of other witness examinations conducted in private hearings or documents relied on in preparing a report.
I do not consider that the provision of redacted witnesses’ transcripts in an attempt to remove identifying features is likely to be possible. In Operation [redacted], most of the witnesses are likely to have been employed by the same employer and many may be working in the same work place and will be known to each other, whether directly or indirectly. It will be difficult to avoid the risk that the provision of even redacted transcripts of witness examinations will enable the identification of persons who have assisted IBAC.
Investigations have particular features that often make much of the content of natural justice inapplicable. The allegations may not be formulated, or the persons they affect may not be known until well into the investigation. It may commence with nothing more than the notification of the complaint. The investigators may not want to ‘show their hand’ and the details of the matter being investigated may only emerge during the investigation. The nature of an investigation makes natural justice most applicable at its final stages. …
…
I do not accept the [applicants’] submission that the Draft Report was only prepared in performance of IBAC’s education and prevention functions and that the greater need for confidentiality necessary in a report about corruption did not apply. …
… Operation [redacted] commenced as an investigation under s 60 which concerns investigations into corrupt conduct. The processes by which IBAC may conclude an investigation are governed by Part 7 of the [IBAC] Act, ‘Recommendations, actions and reports’. They do not provide different conclusions to an investigation for education and prevention functions, than for the performance of other functions.
…
I conclude that the [applicants] were not denied natural justice during the investigation and preparation of the Draft Report. They had no right to be notified of the investigation, to receive the transcripts of other witnesses’ evidence or documents on which IBAC relied, to cross-examine other witnesses or to call witnesses.[51]
[51]Reasons, [122]–[124], [127]–[129] (citations omitted).
The judge framed the issue raised by grounds 3 and 4 as the nature of the ‘reasonable opportunity to respond’ within the meaning of s 162(3) of the IBAC Act.
The judge stated that s 162(3) of the IBAC Act contains Parliament’s statement of the contents of natural justice that is to be given at the draft report stage when the report contains adverse comments or opinions. He said that the opening words of s 162(3) ‘suggest that once IBAC has formed the intention to include adverse comments or opinions about a person in its special report, its natural justice obligations are enlivened’.[52]
[52]Reasons, [146].
The judge concluded that, on the ordinary meaning of the words ‘the adverse material’ in s 162(3) of the IBAC Act, those words meant ‘the material upon which IBAC’s adverse comments or opinions contained in the Draft Report were based’.[53]
[53]Reasons, [147].
The judge referred to the definition of ‘material’ in the Macquarie Dictionary in support of the above conclusions. He then made three observations. First, subsections 162(2), (3) and (4) of the IBAC Act dealt in different ways with the inclusion of findings, comments or opinions in special reports. Secondly, s 162 contains provisions, such as s 162(7), which require that aspects of investigations be kept confidential. Thirdly, although s 162(3) does not require that a draft report be provided to persons about whom adverse comments and opinions are made, provision of a draft report is one way of giving a reasonable opportunity to respond to the adverse material upon which those adverse comments and opinions are based. The judge said that, whilst there are other ways of affording a reasonable opportunity to respond, ‘the provision of a draft report appears to be anticipated or assumed as s 166 places restrictions on the disclosure of information by persons who have been provided with the proposed report, presumably as part of the s 162(3) natural justice process’.[54]
[54]Reasons, [150].
The judge stated that ‘[a]t common law the requirement to accord natural justice to a person who may be detrimentally affected by adverse comments in a confidential report or similar document, which is credible, relevant or significant, is often satisfied by providing them with the substance or gravamen of the allegations’.[55] He considered that this approach applied to the obligations contained in s 162(3) and that it was sufficient for IBAC to provide the applicants with the substance or gravamen of the adverse material.[56] He referred to VEAL[57] and Coutts[58] as ‘examples of that line of authority which accepts that the nature of confidential investigations may permit a limited content of natural justice to be provided’.[59] He described VEAL as ‘an example of a compromise between natural justice and confidentiality that has relevance in this case’.[60]
[55]Reasons, [151] (citations omitted).
[56]Reasons, [151].
[57](2005) 225 CLR 88. See [72] above.
[58][2014] FCA 19. See [73] above.
[59]Reasons, [151].
[60]Reasons, [152].
The judge concluded as follows on how the natural justice requirements of s 162(3) of the IBAC Act may be satisfied:
In my opinion, when IBAC has conducted a confidential investigation with private examinations of witnesses, the requirements of s 162(3) are satisfied by the provision of the substance of the adverse material in a draft report to the affected persons. So are the requirements of common law natural justice which are that a person who may be the subject of adverse allegations or findings in a confidential statutory investigation must be given a reasonable opportunity to respond to them.[61]
[61]Reasons, [154].
The judge referred to two aspects of the IBAC Act which he said supported the above conclusion. First, the scheme of the IBAC Act, which provides a default position of private examination of witnesses and contains provisions restricting disclosure of information about an investigation. Secondly, IBAC’s need to receive confidential information from the public in order to perform its functions.
The judge stated that the restriction on AB speaking with other persons employed by CD, who could have assisted him to prepare his response to the draft report, was a consequence of the investigation being confidential. He said that its effect on AB’s capacity to provide a response to IBAC appeared to have been lessened by the withdrawal of the confidentiality notice, although AB was still subject to the restrictions contained in s 166 of the IBAC Act.
The judge accepted that, whereas matters adverse to AB and CD in pt 4 of the draft report were put to AB when he was examined, some matters adverse to them in pt 5 were not. He said that it was possible that some of the matters in pt 5 were not put to AB at the time of his examination ‘because of the nature of an investigation, which can develop and broaden as it proceeds’.[62] He observed that, although IBAC ‘might well have allowed AB to give oral evidence about the adverse comments or opinions it proposed to include in the Draft Report that concern him and CD … it was not obliged to do so’.[63] The judge gave two reasons for this conclusion.
[62]Reasons, [160].
[63]Reasons, [164].
The first reason was that IBAC was not bound by the rule in Browne v Dunn.[64] The judge said that this was because s 116 of the IBAC Act provides that IBAC is not bound by the rules of evidence. He noted that IBAC’s investigations are inquisitorial rather than adversarial.
[64](1893) 6 R 67.
The second reason was that the IBAC Act’s method of providing natural justice to persons in the applicants’ position was contained in s 162(3), which gave AB and CD the right to respond in writing to the adverse material on which the adverse comments and opinions contained in the draft report were based. The judge elaborated as follows:
Although a chance to respond to allegations is a fundamental part of our justice system, that principle does not necessarily require the right to give oral evidence in a confidential investigation like Operation [redacted]. I accept that a written response will not enable the [applicants] to test the credibility of the persons whose identities are not revealed. But as was suggested in a different context in VEAL, that fact should be taken into account when IBAC is deciding whether the allegations have substance. The argument that the Draft Report is one sided can be made in the [applicants’] response. IBAC must, as it has indicated that it will, consider the response and its effect on the Draft Report’s findings. If the special report does not contain a fair balance of views, it will carry less authority.
As I stated above, the provision of the right to make a written response to the adverse material on which the adverse comments and opinions about the [applicants] in the Draft Report are based is to provide a reasonable opportunity to respond to the adverse material, as required by s 162(3) and by common law. It is sufficient that the substance of the material on which the adverse comments or opinions are based is provided. It is not the only way in which a reasonable opportunity to respond may be provided, but it is one reasonable way.[65]
[65]Reasons, [166]–[167].
The judge concluded that pt 5 of the draft report contained the substance of the adverse material upon which the adverse comments or opinions about the applicants in that part were based. After referring to the contents of pt 5, the judge stated his conclusion that grounds 3 and 4 were not made out in the following terms:
The Draft Report does not give the names of all persons whose comments, opinions or evidence are quoted, but it does not have to do that to provide the substance of the allegations. Nor do AB and CD require the whole of those persons’ witness statements or examination transcripts to respond to the adverse material on which adverse comments or opinions are based. As I have previously accepted, the absence of witness transcripts may prevent AB and CD challenging the credibility of unnamed persons’ evidence, but the authorities to which I have referred accept that restricting credibility attacks may be a necessary consequence of confidential hearings or confidential investigations. However, when that restriction occurs, the decision-maker, or in this case IBAC, the investigator, in assessing the evidence and in preparing its final report, must take into account that the persons, in this case AB and CD, have not had the opportunity to challenge the credibility of particular evidence.
The [applicants] can make submissions and provide documents and affidavits in their response. IBAC must fairly set out each element of the response in the final report. The [IBAC] Act requires that to occur, whether or not IBAC decides to accept the response. The [applicants] will be able to state their view [redacted] and its causes and on the matters that were not put to AB in his examination. AB and CD can provide the ‘other side of the story’ in their response. If IBAC does not properly consider that response, the value of its report may be diminished.
I have concluded that IBAC can discharge its responsibilities by providing the [applicants] with the opportunity to make a written response. But IBAC must bear in mind that this response, if made, may provide ‘the other side of the story’ which it may be yet to hear. It might have been simpler if it had recalled AB and put to him its proposed adverse comments and opinions about him and CD and invited him to respond orally before it completed its Draft Report. Be that as it may, it must consider the [applicants’] written response, if one is provided, as potentially containing the [applicants’] ‘other side of the story’, and demonstrate that it has properly considered it in its final report.
The Draft Report is provisional or incomplete because it does not contain AB’s and CD’s accounts of matters which have led IBAC to make … adverse comments or opinions about them. If the [applicants] present affidavits or other evidence in their response that contradicts the adverse comments or opinions about them contained in the Draft Report, then IBAC will have to consider whether its draft opinions and findings can stand. It will have to take into account any additional material and reconsider its conclusions when it makes its final special report.
AB and CD have not yet provided their responses, but they have been given the opportunity to do so.
For the reasons I have given, I consider that right of response satisfies IBAC’s obligations under s 162(3) and to accord natural justice at common law.[66]
[66]Reasons, [171]–[176].
Grounds of appeal and notice of contention
The applicants’ grounds of appeal are in the following terms:[67]
[67]We have slightly altered the format of the grounds for clarity.
The learned primary judge erred in that he did not find, but should have found, that:
1the Applicants were denied natural justice during the preparation of the Special Report (the Report);
2part 5 of the Report was a separate exercise of [IBAC’s] powers which called for a separate and less restricted application of the rules of natural justice than the investigation to which Part 4 relates;
3part 5 of the Report was prepared only in furtherance of IBAC’s education function;
4in relation to the preparation of Part 5 of the Report, [IBAC] was required to put to [AB] during his examination, all of the allegations against him or [CD] upon which [IBAC] proposed to rely so that he might reply, including by presenting contrary evidence and/or directing [IBAC’s] attention to other contrary evidence;
5in relation to the preparation of Part 5 of the Report, [IBAC] should have allowed [AB] to attend at the examination of other witnesses whose evidence was anticipated to be adverse to the Applicants and to make application to cross-examine them;
6in the alternative to ground 5, [IBAC] should have provided the Applicants with transcripts of the examinations of witnesses adverse to the Applicants;
7in relation to the preparation of Part 5 of the Report, [IBAC] should have provided the Applicants with any documents or reports containing material adverse to the Applicants, upon which it proposed to rely;
8in contravention of s 162(3), [IBAC] had failed to provide the Applicants with a reasonable opportunity to respond to the adverse findings made against them in the Draft Special Report;
9[IBAC] should have provided the Applicants with the transcripts of witnesses referred to in Part 5 of the Draft Special Report and any documents referred to and relied upon therein;
10the Applicants will not be able to ‘make submissions and provide documents and affidavits in their response’ because they will be unable to gather affidavit or other material from other persons with relevant knowledge of the matters dealt with by the Report, without contravening s 166 of the IBAC Act;
11providing a reasonable opportunity to respond to the Draft Special Report in accordance with s 162(3) of the IBAC Act, did not cure a failure to provide natural justice during the investigation and preparation of the Draft Report.
In the alternative:
12if it is accepted that the obligation under s 162(3) of the IBAC Act only requires IBAC to provide the Applicants with the substance or gravamen of the adverse material … then the learned primary judge erred in finding that the Draft Special Report contained the substance and gravamen of the adverse material.
In addition to seeking leave to appeal and an order allowing the appeal and setting aside the judge’s order dated 4 October 2022, the applicants have sought the same relief they had sought at trial.[68]
[68]See [49] above.
IBAC’s notice of contention is in the following terms:
1The primary Judge erred in finding … that the ‘adverse material’ referred to in s 162(3) of the [IBAC Act], and to which IBAC must provide an affected person a reasonable opportunity to respond, means the material upon which IBAC’s comments or opinions in a draft report, adverse to the affected person, are based.
2The primary Judge should have found that:
(a)the ‘adverse material’ referred to in s 162(3) consists of the comments or opinions contained in a draft report that are adverse to the affected person;
(b)it is those comments or opinions to which s 162(3) requires that the affected person be given a reasonable opportunity to respond.
It is convenient to deal with the notice of contention and the grounds of appeal in the following order: first, the notice of contention; secondly, grounds 8 to 12; and thirdly, grounds 1 to 7.
Notice of contention: Meaning of ‘adverse material’ in s 162(3) of the IBAC Act
Parties’ submissions on the notice of contention
IBAC submitted that a natural reading of s 162(3) of the IBAC Act indicated that the expression ‘the adverse material’ was shorthand for the earlier reference in the same sub-section to ‘a comment or an opinion which is adverse to any person’. That was said to be because the use of the definite article suggests that ‘the adverse material’ refers to something already identified expressly or by implication, and because s 162(3) does not provide any description of what else ‘the adverse material’ might encompass. Consequently, IBAC contended that, on the proper construction of s 162(3), an affected person is entitled to a ‘reasonable opportunity to respond’ to any adverse comment or opinion that IBAC proposes to include in a special report.
IBAC argued that it would be anomalous and highly improbable for the legislature to have intended s 162(3) of the IBAC Act to require IBAC to disclose a category of documents beyond the adverse material proposed to be included in a special report. That was said to be because the sub-section did not spell out precisely what should be disclosed or specify any protection for the confidentiality of the additional documents or information. IBAC submitted that s 166(1) was highly significant in this context because it contemplates that what a person will receive under s 162(3) is ‘a draft or part of a proposed report or information contained in a proposed report or draft or part of a proposed report’. IBAC contended that s 166(1) proceeds on the assumption that a person will not receive any other documents or information, because the sub-section does not protect their confidentiality, and no other provision confers any automatic protection for them.
IBAC contended that its construction of the phrase ‘the adverse material’ in s 162(3) of the IBAC Act was supported by the use of the phrase ‘the relevant material’ in s 162(4). Under s 162(4), if IBAC intends to include in a special report a non-adverse comment or opinion about a person, IBAC must give the person ‘the relevant material in relation to which the IBAC intends to name that person’. IBAC argued that ‘the relevant material’ is plainly the non-adverse comment or opinion itself, rather than the information or evidence underlying it. That was said to be particularly so given that, under s 162(4), an affected person has no entitlement to respond to such a comment or opinion.
IBAC submitted that its construction of the phrase ‘the adverse material’ in s 162(3) of the IBAC Act was also supported by the fact that the explanatory memorandum for the 2012 amending Act uses the phrase ‘adverse findings’ to describe the material in respect of which the right to respond is conferred.[69]
[69]See [31] above.
IBAC contended that, on the judge’s construction of s 162(3) of the IBAC Act, IBAC is required as a matter of course to disclose the material upon which IBAC’s adverse comments or opinions are based, but not the adverse comments or opinions themselves. IBAC argued that that is an unlikely result, which would be much less helpful for a person seeking to ascertain the relevant issues to which he or she may wish to respond. According to IBAC, the judge’s construction distracts from the true object of s 162(3), namely, to provide an opportunity to respond to the adverse comment or opinion itself (which poses the risk of reputational harm and enlivens the operation of the provision).
In oral submissions, counsel for IBAC submitted that any presumption that Parliament deliberately drew a distinction between ‘a comment or an opinion which is adverse’ and ‘adverse material’ in s 162(3) of the IBAC Act must yield to the context. It was said that the context included the matters set out at [108]–[109] above. In addition, it was said that the drafters of the IBAC Act had not shown great care in their choice of words. By way of example, counsel contended that the phrase ‘an opportunity to respond’ in s 162(2) was to be understood as meaning the same thing as the phrase ‘a reasonable opportunity to respond’ in s 162(3). Similarly, counsel contended that there was no reason why the phrase ‘adverse findings’ in s 162(2) should be given a different meaning to the phrase ‘a comment or an opinion which is adverse’ in s 162(3).
The applicants submitted that the judge’s interpretation of the phrase ‘the adverse material’ in s 162(3) of the IBAC Act was correct.
The applicants contended that, on its face, s 162(3) of the IBAC Act distinguishes between ‘a comment or an opinion’, on the one hand, and ‘material’, on the other. It argued that, because Parliament could have used the same words but chose to use different words, its presumed intention was to change the meaning. It submitted that the ordinary meaning of ‘material’ was broader than ‘a comment or an opinion’. It also submitted that ‘material’ could not be confined to ‘a comment or an opinion’ in the light of the apparent purpose of s 162(3), namely, to provide procedural fairness. That was said to be because procedural fairness obliges a decision-maker to provide adverse credible and significant information, not merely a decision-maker’s analysis of material.
The applicants argued that it was difficult for AB to respond to allegations about [redacted] because, pursuant to s 166(1) of the IBAC Act and the confidentiality notice dated 7 August 2019, he could not talk to [redacted] to obtain information to respond. It was said that the confidentiality restrictions informed the level of information with which AB needed to be provided in order to be given a reasonable opportunity to respond.
The applicants submitted that the test for determining whether the confidentiality of informers overrode procedural fairness was that there are good and substantial reasons for preserving the confidentiality in the particular case, such as whether the person the subject of the allegations is able to adversely affect the informer’s position at work. They contended that, when the test was satisfied, procedural fairness was accommodated by informing the person of the substance of the allegations against him or her. They argued that, in the present case, they did not need to be provided the names of informers. However, they submitted that procedural fairness required them to have the surrounding context of the allegations against them, not merely the substance of the allegations, in order to respond meaningfully to the allegations.
The applicants contended that pt 5 of the draft report was prepared in furtherance of IBAC’s education and prevention functions, with no clear link to the adverse findings in pt 4, and that these functions informed the content of procedural fairness. It was said that, because findings under IBAC’s education and prevention functions were less serious than findings under IBAC’s function of exposing corrupt conduct, there was a decreased need to maintain confidentiality (relative to IBAC’s exposing corrupt conduct function) and an increased need to strive to achieve balance. Accordingly, so it was said, IBAC was required to apply the hearing rule in a less restricted manner in relation to pt 5 of the draft report compared to pt 4, such that IBAC should have permitted the applicants to attend and cross-examine adverse witnesses or provide the applicants with full transcripts of the evidence of those witnesses.
Drawing upon the submissions they had already made, the applicants argued that they were denied practical natural justice in responding to pt 5 of the draft report for five reasons. First, IBAC’s refusal to provide them with the transcripts of witnesses’ evidence meant that they were unable to address: all aspects of the witnesses’ evidence; the credibility of the witnesses; or any broader context that had a bearing on the witnesses’ evidence. Secondly, IBAC’s refusal to provide them with the documents upon which it relied meant that they were not able to respond to those documents directly, including by seeking to place any extracts from documents in context. Thirdly, IBAC’s refusal to permit them to call their own witnesses prejudiced their ability to persuade IBAC to change the adverse conclusions in pt 5. Fourthly, IBAC’s refusal to permit them to cross-examine witnesses prejudiced their ability to challenge the credibility and reliability of the witnesses. Fifthly, IBAC’s failure to put evidence to AB during his examination deprived him of the opportunity to dissuade IBAC from forming the adverse conclusions in pt 5.
According to the applicants, the adverse findings in pt 5 of the draft report were particularly problematic for the following reasons:
(a)In respect of the first finding set out at [87(a)] above, [redacted]
(b)In respect of the second finding set out at [87(b)] above, there was insufficient detail of what the complaint is against the applicants for them to be able to respond to it appropriately.
(c)The third finding set out at [87(c)] above [redacted].
(d)The fourth finding set out at [87(d)] above relates to allegations, including hearsay allegations, which are in general terms and devoid of context, and therefore it is impossible to respond to them.
(e)The fifth finding set out at [87(e)] above is highly partisan and, more importantly, does not provide enough context to enable the applicants to respond. This finding has a very significant adverse effect upon the applicants’ reputations [redacted].
The applicants submitted that procedural fairness was an obligation imposed upon IBAC by law, rather than dependent upon them to request information. Consequently, it was said that, even if the form of a request for information is too broad, that was not determinative. They contended that, although CD never made any requests for documents, it should be treated in the same way as AB for two reasons. First, CD was not given a copy of the draft report until after AB had commenced the proceeding. Secondly, AB’s and CD’s interests are closely aligned. They argued that, in any event, whilst the fact that a request had or had not been made was relevant to the factual background, the obligation to provide procedural fairness existed regardless of whether CD asked for particular things.
In response to questions from the Bench, senior counsel for the applicants submitted that it was open to the applicants to respond to the draft report by stating that there had been a lack of procedural fairness due to the limited information in pt 5 and that the report should be ignored. However, senior counsel contended that such a response was more in the nature of a submission to the public sphere and was contrary to the scheme of the IBAC Act. That was said to be because the IBAC Act contemplated that IBAC would not provide special reports to Parliament which were not to be given weight in public debate.
In response to further questions from the Bench, senior counsel for the applicants argued that it was not sufficient to discharge IBAC’s procedural fairness obligations that some of the allegations in the draft report had been expressed in the public domain. That was said to be because a greater degree of specificity was required to respond to a draft report from IBAC than it was to respond in the court of public opinion.
IBAC submitted that s 162(3) of the IBAC Act exhaustively states the procedural fairness requirements in relation to adverse comments or opinions which IBAC proposes to publish in a special report, namely, that the applicants be given a reasonable opportunity to respond to them. It was said that these requirements were satisfied in the present case because:
(a)the applicants were given the proposed adverse comments and opinions in the form of the draft report with sufficient detail to allow them to understand what the comments or opinions were and to put forward explanations or material to the contrary; and
(b)the applicants were given a reasonable time within which to respond.
IBAC contended that, contrary to the applicants’ submission, providing a person who might be adversely affected with an opportunity to be heard once a draft report has been prepared is not antithetical to the idea of practical natural justice. That was said to be so for two reasons. First, minds may remain open and impartial although they have reached tentative conclusions.[80] Secondly, individuals who may be affected by a decision are generally not entitled to be advised of the decision-maker’s provisional conclusions. Consequently, it was said that s 162(3) provided an unusual opportunity to change the decision-maker’s mind.
[80]IBAC relied upon News Corporation (1984) 156 CLR 296, 315. See [75] above.
IBAC argued that the IBAC Act did not prevent CD from obtaining assistance to prepare a response. That was said to be because s 166(2)(b) permits an officer of CD to disclose information contained in the draft report to other officers of CD for the purposes of enabling CD to respond to the draft report. IBAC submitted that the evidence taken as a whole did not establish that it refused to agree to AB consulting with others. Rather, it contended that it was possible that the process of negotiating authorisation for AB to disclose information contained in the draft report under s 166(2)(a) collapsed when AB commenced this proceeding.[81]
[81]See [43] above.
According to IBAC, there is no room in the IBAC Act to distinguish between its functions when engaging in an investigation because an investigation can be directed at more than one function. In the present case, so it was said, there was a single investigation whose outcome may serve more than one function. According to IBAC, pt 5 of the draft report relies upon material collected during that single investigation. IBAC argued that, contrary to the applicants’ submission, distinguishing between IBAC’s functions did not inform the rules of procedural fairness.
IBAC contended that it was not required to put to AB, during his examination, all the allegations against the applicants upon which it proposed to rely, to allow the applicants to cross-examine witnesses, to provide transcripts of witnesses’ examinations or to provide copies of documents containing material that was adverse to the applicants. According to IBAC, three considerations informed whether the applicants had been given a reasonable opportunity to respond: confidentiality; administrative feasibility; and the rights and interests at stake, namely, reputational harm. It argued that the statutory context and relevant case law had the effect that a reasonable opportunity to respond required provision of a draft report containing the proposed adverse comments and opinions with sufficient information (in the draft report) to allow the affected person to understand the gravamen of those comments and opinions and to put forward explanations or materials to the contrary.[82]
[82]IBAC relied upon Pergamon Press [1971] 1 Ch 388; Ainsworth (1992) 175 CLR 564; South Sydney City Council (2002) 55 NSWLR 381.
IBAC submitted that the applicants’ contentions as to what was required to afford them a reasonable opportunity to respond was unworkable in practice. It also submitted that, contrary to the applicants’ contentions, procedural fairness could be satisfied by quoting witnesses in the draft report without ‘quot[ing] chapter and verse’.[83]
[83]IBAC relied upon Pergamon Press [1971] 1 Ch 388, 400.
IBAC contended that, if the applicants had concerns about particular comments or opinions in the draft report, s 162(3) of the IBAC Act allowed them to raise those concerns. It argued that the applicants had not been denied natural justice because they had not yet responded to the draft report and the natural justice process set out in s 162(3) was still on foot.
Decision on grounds 8 to 12
In our opinion, grounds 8 to 12 are not made out.
Both parties accepted that the rules of natural justice applied to IBAC’s Operation [redacted] investigation. As the applicants did not allege there was any actual or ostensible bias on the part of IBAC, the key issues in the proceeding were what the hearing rule of natural justice required IBAC to do to ensure that it provided to the applicants a reasonable opportunity to be heard, and whether the steps that IBAC took were sufficient in all the circumstances.
The principles summarised at [61] to [75] above demonstrate that the requirements of the hearing rule of natural justice are flexible and respond to the circumstances of each case. In a broad sense, those requirements seek to avoid practical injustice in each case. They are informed by a variety of factors, including the scope and objects of the statute conferring the statutory power being exercised, the nature of that power, the right or interest of a person that may be affected by the exercise of the power and the severity of the consequences to that person resulting from the exercise of the power.[84]
[84]See [65] above.
In the present case, the main factors that inform the contents of the hearing rule are as follows:
(a)A key object of the IBAC Act is provide for the identification, investigation and exposure of corrupt conduct,[85] which it seeks to achieve by conferring upon IBAC the function of identifying, investigating and exposing corrupt conduct and investing IBAC with significant coercive powers.[86]
(b)The IBAC Act recognises that, in investigating corrupt conduct, IBAC may receive sensitive information whose disclosure may jeopardise the safety or reputation of individuals, and contains provisions for protecting such information and the identity of individuals who provide it.[87]
(c)The IBAC Act also recognises that the exercise of IBAC’s powers may affect the rights or interests of persons who are the subject of an investigation, and contains specific provisions about how those rights or interests are to be protected.[88] The key provision is s 162(3), which expressly deals with the natural justice rights of such persons. Other provisions deal with matters such as whether hearings are public or private,[89] legal representation of witnesses,[90] cross-examination of witnesses,[91] and provision of the transcript of a witness’s evidence.[92] The general effect of these provisions is that hearings are generally in private and, whilst a witness is entitled to legal representation and a copy of the transcript of his or her evidence, a person who is being investigated is not entitled to be present during the examination of a witness, to cross-examine a witness or to obtain a copy of the transcript of a witness’s evidence.
(d)From a natural justice perspective, the interest of a person who may be adversely affected by the exercise of IBAC’s power to transmit a special report to Parliament, which the IBAC Act seeks to protect, is that person’s reputation.
(e)The damage to a person’s reputation resulting from the exercise of that power by IBAC may be severe.
[85]IBAC Act, s 8. See [14] above.
[86]IBAC Act, s 15, pts 3–4, 6. See [15], [17]–[25] above.
[87]IBAC Act, ss 59(4), 117, pt 2. See [18], [22], [26]–[28] above.
[88]IBAC Act, ss 162, 166. See [30] above.
[89]IBAC Act, s 117. See [22] above.
[90]IBAC Act, ss 118, 127. See [22]–[23] above.
[91]IBAC Act, s 132A. See [24] above.
[92]IBAC Act, s 133(4). See [25] above.
The judge’s articulation of the applicable law is consistent with the principles summarised at [61] to [75] above, and he took into account the matters set out at [162] above. Apart from the error in his construction of the phrase ‘adverse material’ in s 162(3) of the IBAC Act, which we have discussed above in relation to IBAC’s notice of contention, the judge did not err in applying the law to the facts of the present case.
We commence our analysis of the issues raised by grounds 8 to 12 by noting that, as the draft report contained comments and opinions which were adverse to the applicants, s 162(3) of the IBAC Act required IBAC to provide those comments and opinions to the applicants and give them a reasonable opportunity to respond to the comments and opinions. Obviously, for such an opportunity to be reasonable, it would not be sufficient for IBAC to provide to the applicants the adverse comments and opinions in bare, conclusionary form. Rather, a reasonable opportunity required IBAC to also provide any other contents of the draft report which disclose the basis upon which IBAC formed the adverse comments and opinions or which provide necessary context for them.[93]
[93]See [135] above.
In our opinion, IBAC satisfied the requirements of s 162(3) of the IBAC Act. With one exception,[94] the draft report that IBAC provided to the applicants sets out comments and opinions that are adverse to them, which are easily understood. It also contains contextual material that is sufficiently detailed to disclose the basis upon which IBAC formed those comments and opinions and necessary context, and thus affords the applicants a reasonable opportunity to respond.
[94]See [177] below.
A public official who conducts an investigation which may result in the publication of a report containing adverse findings about a person may afford that person a reasonable opportunity to be heard in a variety of ways. One way is to provide the person with the substance or gravamen of the matters that are adverse to him or her and give him or her a reasonable opportunity to respond to that material before the public official forms final views.[95] The substance or gravamen of adverse matters may be disclosed to a person by giving him or her a draft report which discusses those matters and sets out proposed findings in relation to them. This method may be acceptable if it is consistent with the applicable statutory framework and the public official has not formed any final views, so that he or she is able to consider any response from the affected person in good faith and with an open mind prior to finalising the report.
[95]See [74]–[75] above.
In the present case, the method discussed at [166] above is not only consistent with the applicable statutory framework, it is facilitated by s 162(3) of the IBAC Act. In accordance with that section, pt 5 of the draft report sets out the terms of the comments and opinions that are adverse to the applicants and also the substance or gravamen of the matters that IBAC took into account in formulating those comments and opinions. The correspondence from IBAC to the applicants makes it clear that IBAC has not formed any final views on the matters set out in pt 5 and will consider any response from the applicants in finalising the report. Section 162(3) goes further than simply requiring IBAC to take into account the applicants’ response prior to finalising its report; it requires IBAC to fairly set out each element of their response.
The applicants’ submissions before this Court differed somewhat from the submissions at trial. Before the judge, the applicants submitted that the rules of natural justice required that they be provided with all the primary material upon which IBAC relied and that they be permitted to be present while witnesses gave evidence and to cross‑examine them or, alternatively, to be given copies of the transcripts of witnesses’ evidence. The judge correctly rejected these submissions, as they were inconsistent with the express provisions of the IBAC Act.[96] Before us, the applicants accepted that the rules of natural justice did not impose all of these obligations upon IBAC. However, the applicants nevertheless contended that IBAC did not comply with the natural justice requirements of s 162(3) because it did not provide them with sufficient material to afford them a reasonable opportunity to respond to the adverse comments or opinions in pt 5 of the draft report.
[96]See [162(c)] above.
We reject the applicants’ contention. In our opinion, pt 5 of the draft report is sufficiently detailed to enable the applicants to understand, and respond to, the adverse comments and opinions concerning them and the basis upon which IBAC formed them.
It is true that the identity of some of the witnesses is not disclosed. However, the draft report explains that the names of some witnesses are redacted in order to protect them. This course is not only consistent with pt 2 of the IBAC Act,[97] but also with authorities such as VEAL[98] and Coutts.[99]
[97]See [26]–[28] above.
[98](2005) 225 CLR 88. See [72] above.
[99][2014] FCA 19. See [73] above.
It is also true that, in some instances, pt 5 of the draft report records the evidence of some witnesses without giving much detail about the incidents or events that informed that witness’s evidence. That is not surprising, as much of the evidence consists of opinions about intangible matters such as [redacted] in respect of which opinions may be formed by overall personal impression rather than arrived at forensically on the basis of objectively verifiable facts. However, that does not mean that the applicants are deprived of a reasonable opportunity to respond to such opinions. AB and other senior officers of CD [redacted]. Accordingly, they are well able to provide a response to IBAC which sets out their own opinions on the relevant matters and explains — by reference to their own experience and, where applicable, particular incidents or events — why the adverse opinions of other witnesses should be rejected by IBAC.
Further, pt 5 of the draft report contains references to publicly available information, such as [redacted]. The applicants are able to adequately respond to any comments in the draft report that are derived from publicly available information. We note that aspects of the [redacted] were put to AB during his examination.
We reject the applicants’ submission that IBAC denied AB natural justice by refusing his request for permission to seek assistance from other officers of CD in responding to the draft report. As we have already stated at [43] above, there is a factual dispute as to whether IBAC refused AB’s request, as distinct from requiring him to confirm his request in writing. In any event, [redacted]. Furthermore, when the draft report was provided to CD on 7 February 2022 and it was given an opportunity to respond, s 166(2)(b) of the IBAC Act enabled AB to consult with other officers of CD for the purpose of preparing a response to the draft report.[100] Further, under s 166(2)(a), the applicants could apply to IBAC for authority to consult other persons.
[100]See [30], [47] above.
We accept that, when AB was examined by IBAC, many of the contents of pt 5 of the draft report were not put to him. We also accept that the judge engaged in some speculation in suggesting that this may have occurred because the investigation may not have been sufficiently advanced at the time that AB was examined.[101] However, the judge was correct in concluding that, whilst it was open to IBAC to either put the matters to AB or recall him for that purpose, the rules of natural justice did not oblige IBAC to do so.[102]
[101]See [100] above.
[102]See [100], [103] above
We also accept that IBAC did not provide to the applicants the documents upon which it relied in preparing pt 5 of the draft report and did not permit them to call their own witnesses. However, some of these documents were publicly available [redacted]. In any event, cases such as VEAL and Coutts make clear that a public official conducting an investigation is not obliged to provide to a person copies of underlying documents provided he or she is informed of the substance or gravamen of the contents of those documents that are adverse to him or her.[103] Further, in the light of News Corporation, IBAC was not required to permit the applicants to call their own witnesses.[104]
[103]See [71]–[73] above.
[104]See [68]–[70] above.
For the reasons we have already explained, IBAC sufficiently complied with the rules of natural justice by providing the draft report to the applicants and giving them an opportunity to respond.
With one exception, our conclusion that IBAC has provided sufficient information to the applicants to enable them to respond to pt 5 of the draft report in a manner that is consistent with the requirements of natural justice is applicable to each of the findings set out at [87] above. That exception is the statement ‘[o]ther concerns were also raised about providing evidence against [CD] or [AB]’ that forms part of the fourth finding set out at [87(d)] above. That statement is so general and lacking in content that it is impossible for the applicants to respond to it. However, the inclusion of that statement in the draft report does not mean that IBAC has denied the applicants a reasonable opportunity to be heard. That is because, in their response to IBAC, the applicants may make the same criticism of that statement that we have made, and request that IBAC either provide details of the ‘other concerns’ to enable them to respond to them or delete the statement.
The final sentence in the preceding paragraph serves as an important reminder that the draft report is precisely that: a draft report which the applicants can urge IBAC to change in the light of the response they provide to it. As the judge noted, consistent with s 162(3) of the IBAC Act, upon receiving the applicants’ response to the draft report, IBAC may:
(a)add information to the report about particular comments or opinions or the evidence supporting them;
(b)remove or alter particular comments or opinions; or
(c)provide a further draft of the report to the applicants for their response with any such amendments.[105]
[105]Reasons, [141].
As we have already noted, even if IBAC is not persuaded by the applicants’ response to the draft report that any changes should be made to it, s 162(3) of the IBAC Act contains the additional protection of requiring IBAC to set out in the final report each element of the applicants’ response. This requirement is significant because it ensures that anyone reading the report is able to consider not only IBAC’s findings but also the applicants’ perspective in relation to those findings.
To the extent that pt 5 of the draft report has been prepared by IBAC after it had heard only [redacted] ‘partisan’ perspective on matters such as [redacted], the applicants have an opportunity to submit a response which presents their perspective on those matters and to urge IBAC to alter particular aspects of pt 5. Insofar as IBAC does not adopt any of the applicants’ proposed changes to pt 5, their perspective — or, as they put it, their ‘side of the story’ — must still be included in the final report in accordance with s 162(3) of the IBAC Act.
The applicants placed significant reliance upon the last paragraph of pt 6 of the draft report, which stated that IBAC was publishing the report ‘[i]n line with its prevention and education functions’.[106] It is readily apparent that pt 5 of the draft report forms part of IBAC’s Operation [redacted] investigation and builds upon [redacted] that are dealt with in pt 4.[107] Part 5 is an integral component of the draft report and has been included in furtherance of IBAC’s investigation function as well as its education and prevention functions. Part 5 is not a standalone component of the draft report which has been included solely in furtherance of IBAC’s education and prevention functions.
[106]See [82] above.
[107][redacted].
The fact that pt 5 has been included in the draft report partly in furtherance of IBAC’s education and prevention functions does not undermine our analysis regarding the requirements of the rules of natural justice. As we have already stated, the content of the rules of natural justice in a particular case will be informed by a number of considerations. The interest of the applicants that engages the rules of natural justice in the present case is their reputation. Accordingly, the key considerations are the extent to which comments or opinions are adverse to the applicants, and the severity of the impact upon their reputations resulting from publication of the comments or opinions, rather than the function being performed by IBAC in arriving at those comments or opinions.
If a comment or opinion about the applicants is adverse and its publication would harm their reputations, the degree to which the comment or opinion is adverse, and the publication would be harmful, will be the same whether the comment or opinion was arrived at in the performance of IBAC’s investigation or education functions. Put another way, if it is assumed that pt 4 of the draft report results from the performance of IBAC’s investigation function and pt 5 results from the performance of IBAC’s education function, a finding of corrupt conduct is likely to have the same harmful effect upon reputation irrespective of whether it is included in pt 4 or pt 5.
We accept that, in some instances, confidentiality may be of lesser significance when IBAC performs its education function compared to its investigation function. Self‑evidently, if a special report deals with causes of corruption in general terms and relies solely upon publicly available information — such as past reported judicial decisions and reports of anti-corruption authorities — the hearing rule of natural justice may require fuller disclosure of information to a person whose reputation might be adversely affected by the special report. The draft report in the present case does not fall into this category. It is readily apparent from the contents of pt 5 that the adverse comments and opinions are based upon confidential information provided by individuals who have expressed concerns for their safety if IBAC were to disclose information which enables them to be identified. It is also readily apparent that the individuals who provided the confidential information [redacted] and therefore, as in Coutts, there may be reprisals affecting their careers as well as their safety if their identity is disclosed.
In summary, IBAC has sufficiently complied with its natural justice obligations and the terms of s 162(3) of the IBAC Act by providing the draft report to the applicants and giving them an opportunity to respond to it. It is important to note that the applicants’ rights — and IBAC’s obligations — under s 162(3) have not yet been exhausted. The applicants’ response to the draft report will provide them with considerable scope to: critique the draft report; suggest deletions, additions and other changes to the draft report; and present their perspective or ‘side of the story’ on the matters covered by the draft report. Upon receiving the applicants’ response, IBAC will be obliged to consider it in good faith and with an open mind, and determine what steps to take in relation to it, including those set out at [178] above. Even if IBAC is entirely unpersuaded by the applicants’ response, in accordance with s 162(3), it must set out in its final report each element of that response.
Grounds 1 to 7: Natural justice in the context of the preparation of the draft report
Parties’ submissions on grounds 1 to 7
The applicants submitted that IBAC had denied them natural justice in the preparation of the draft report by failing to do the following:
(a)put them on notice of the allegations it was investigating for pt 5;
(b)provide them with all of the relevant material supporting those allegations;
(c)ask AB about all of the adverse matters in pt 5 during his witness examination;
(d)provide them the opportunity to cross-examine certain witnesses;
(e)give them an opportunity to provide evidence to IBAC before any findings were made and before witness examinations were completed; and
(f)give them an opportunity during the investigation and preparation of pt 5 to answer or contradict any of the evidence that was adverse to them.
In respect of item (c) above, the applicants contended that the judge erred in determining that the failure to put adverse comments to AB during his examination did not constitute a failure to afford him natural justice, for two reasons. First, the judge was wrong to speculate about how the investigation unfolded. In any event, so it was said, IBAC could have recalled AB to deal with evidence acquired after his examination. Secondly, although the judge correctly noted that IBAC is not bound by the principles in Browne v Dunn,[108] the inapplicability of that case did not exclude obligations of natural justice.
[108](1893) 6 R 67.
In respect of item (d) above, the applicants argued that it was too broad for the judge to reason that the IBAC Act required investigations to be confidential and that that overrode procedural fairness. They submitted that there were two factors which favoured IBAC exercising the power in ss 116(b) or 119(1)(a) to allow them to either attend other witnesses’ examinations or be given the transcripts of other witnesses’ examinations. The first factor was said to be that pt 5 of the draft report was an exercise of IBAC’s education and prevention functions, as opposed to its function of exposing corrupt conduct, and that this informed the content of the natural justice requirement.[109] The second factor was said to be that credibility was a serious issue [redacted], with the potential for the evidence of some witnesses to be coloured by their hostility to the applicants. The applicants contended that this element of natural justice was not unworkable in the present case given the small number of witnesses named in the draft report.[110]
[109]See [146] above.
[110]The applicants relied upon City of Brighton v Selpam Pty Ltd [1987] VR 54, 61.
IBAC submitted that the natural justice rights proposed by the applicants are not consistent with the IBAC Act.
IBAC contended that there are three broad stages in an IBAC investigation. The first stage is the decision to commence an investigation. The second stage is the conduct of the investigation, including holding examinations. The third stage is the outcome of the investigation, such as a special report under s 162 of the IBAC Act. IBAC argued that the applicants did not have, at any of the stages, the right to participate in the investigation by attending private examinations and cross-examining other witnesses.
In any event, IBAC submitted that, pursuant to s 132A of the IBAC Act, cross‑examination is only possible at a public examination and s 133(4) only permits a person to receive the transcript for his or her own examination.
Decision on grounds 1 to 7
In our opinion, grounds 1 to 7 are not made out.
The parties’ submissions on those grounds overlapped with their submissions on grounds 8 to 12. We will deal with the former submissions only insofar as they raise issues that have not already been covered in our discussion of grounds 8 to 12.
Insofar as the applicants’ submissions were intended to convey that the hearing rule of natural justice required IBAC to give them notice of the allegations it was investigating for pt 5 of the draft report at an early stage of the Operation [redacted] investigation, those submissions find no support in the IBAC Act and are inconsistent with authority. Authorities such as Pergamon Press and News Corporation recognise that a public official conducting an investigation may defer approaching a person being investigated until the investigation has advanced sufficiently to enable relevant information to be collected and issues to put to that person have been identified.[111]
[111]See [67(a)] above.
The applicants’ submission that IBAC was required to provide them with all of the relevant material supporting the allegations being investigated for pt 5 of the draft report cannot be accepted, for the reasons we have discussed under grounds 8 to 12. That submission is contrary to the provisions of the IBAC Act, which direct the requirements of the hearing rule predominantly at the stage where a draft report has been prepared and provide a mechanism for giving effect to those requirements in s 162(3). The submission is also contrary to authorities such as VEAL and Coutts, which stipulate that it is usually sufficient for a public official to provide a person who may be affected by an investigation with the substance or gravamen of the matters that are adverse to that person.
In relation to the applicants’ submission regarding IBAC’s failure to put to AB during his examination all of the adverse matters dealt with in pt 5 of the draft report, for the reasons set out in our discussion of grounds 8 to 12, we accept that there was an element of speculation in the judge’s suggestion that matters may not have been put to AB because the investigation may not have progressed sufficiently at the time he was examined. We also accept the applicants’ submission that the fact that IBAC is not bound by the evidentiary principles in Browne v Dunn[112] is not a significant consideration in ascertaining the requirements of the hearing rule in the present case. However, for the reasons set out at [174] above, the fact that IBAC did not put to AB all adverse matters dealt with in pt 5 of the draft report does not mean that IBAC did not comply with the hearing rule of natural justice in relation to the applicants.
[112](1893) 6 R 67.
In relation to the applicants’ submission regarding IBAC’s failure to give them the opportunity to cross-examine certain witnesses, we have already dealt with the applicants’ contention regarding the role of IBAC’s education and prevention functions in the preparation of pt 5 of the draft report.
We reject the applicants’ additional contention that the credibility of witnesses was a serious issue due to [redacted], and that this meant that they should have been permitted to cross-examine witnesses. The applicants are able to infer — and have in fact drawn the inference — that the witnesses who gave evidence that was adverse to them were [redacted]. As such, it was not necessary for the applicants to have a fair hearing (in the natural justice sense) to know the identity of the witnesses or to cross-examine them in order to be in a position to submit to IBAC that the evidence of the witnesses should not be accepted because it was biased against the applicants.
Furthermore, cases such as VEAL and Coutts recognise that, where a person adversely affected by an investigation is not informed of the identity of witnesses and is not permitted to cross-examine them, the public official conducting the investigation must take into account the fact that the person was not able to test the credibility of the witnesses.
We have already dealt with the applicants’ submissions set out at [186(e) and (f)] above in our discussion of grounds 8 to 12.
Conclusion
For the above reasons, the application for leave to appeal will be refused.
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