AB v National Crime Authority

[1997] FCA 1088

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - National Crime Authority - whether permissible to have regard to any of the events which led to the references being granted or any other matter extrinsic to the references or any other issues raised by the pleadings - whether refusal by applicant to answer a question was justified - order of review under s 32 - nature of review - nature and scope of “matter” in the reference - whether the Authority acted within the powers conferred upon it by the reference - Notice of reference required to desribe general nature of circumstance or allegations constituting the relevant criminal activity - whether the reference complies with the statutory requirements.

National Crime Authority Act 1984 (Cth) s 13, 28, 32
National Crime Authority (State Provisions) Act 1984 (Vic) s 5
Federal Court Rules, O 54, O57 r 1

National Crime Authority v A1 & A2 (1997) 145 ALR 126 (applied)
Director of Public Prosecutions Reference No 2 of 1996, Court of Appeal, Vic, (Winneke P, Brooking and Tadgell JJ, 26 September 1997, unreported) (applied)

AB v NATIONAL CRIME AUTHORITY
No. VG 765 of 1995

NORTHROP ACJ
MELBOURNE
22 OCTOBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 765  of   1995

BETWEEN:		AB APPLICANT
AND:		NATIONAL CRIME AUTHORITY RESPONDENT
COURT:	NORTHROP ACJ
PLACE:	MELBOURNE
DATE:	22 OCTOBER 1997

THE COURT ORDERS THAT:

The application be dismissed with costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 765 of 1995

BETWEEN:	AB APPLICANT
AND:	NATIONAL CRIME AUTHORITY RESPONDENT

COURT:	NORTHROP ACJ
PLACE:	MELBOURNE
DATE:	22 OCTOBER 1997

REASONS FOR JUDGMENT

The applicant is seeking an order of review under s 32 of the National Crime Authority Act 1984 (“the NCA Act”) of a decision by the National Crime Authority (“the Authority”) that a claim that the applicant was entitled to refuse to furnish information was not justified. Aspects of the application have been the subject of earlier judgments of the Federal Court; see AB v National Crime Authority (Northrop J, 7 March 1996, unreported) and AB v National Crime Authority (Full Court, 3 July 1996, unreported) where the Full Court refused to grant leave to appeal from the orders that had been made on 7 March 1996. Those judgments provide useful background information relevant to the matters presently before the Court.

For present purposes, the relevant statutory provisions and relevant facts can be adapted from the reasons of judgment of 7 March 1996. On 8 September 1995 the applicant, under summons, attended a meeting being held by the Authority pursuant to powers conferred by the NCA Act and its complementary Acts including the National Crime Authority (State Provisions) Act 1984 (Vic), (“the Victorian Act”). The applicant was represented by counsel. Counsel told the Authority that the applicant proposed to challenge the validity of the summons by way of a challenge to the power of the Authority to issue the summons. The applicant was sworn to give evidence, was identified and was asked a question by the member of the Authority presiding at the meeting. Counsel for the applicant claimed there were reasonable excuses for the applicant to refuse to answer the question. Following submissions by counsel for the applicant and by counsel assisting the Authority, the member made a decision, giving reasons, that the claim by the applicant to be entitled to refuse to answer the question was not justified and formally required the applicant to answer the question. The meeting was adjourned to enable the applicant to apply under s 32(2) of the NCA Act for an order of review in respect of that decision.

By application issued on 14 September 1995, the applicant, pursuant to s 32(2) of the NCA Act, applied for an order of review in respect of that decision. The substantive order sought by the applicant was:-

“An order quashing or setting aside the decision by the NCA that the claim by the applicant, that the applicant is entitled to refuse to attend at a hearing before the NCA to answer the question, is not justified.”

The substantive grounds relied upon to support the application presently before the Court are not readily apparent from a consideration of the documents filed in Court. These and other related matters are discussed in the judgment given on 7 March 1996. At this stage it is sufficient to say that the essential contention made on behalf of the applicant was that, for various reasons, the notices given pursuant to s 13(1) of the NCA Act and s 5(1) of the Victorian Act were invalid and thus the Authority was not conducting a special investigation, as defined, to which a person could be summoned lawfully to appear to give evidence.  In order to present the case for the applicant, counsel desired to lead evidence from a number of witnesses and to produce documents relating to events which led to the making of the references before the Authority. Counsel for the Authority contended that evidence of that kind was not admissible. By orders made on 8 April 1997 the Court gave directions relating to the names of witnesses proposed to be called and brief summaries of the evidence proposed to be elicited from those witnesses. In addition, the Court made the following orders:-

“5.       On or before 4 pm on 30 April 1997 each party file and serve a written submission which addresses the question whether in order to determine whether the proposed line of investigation falls within the scope of the references granted to the Authority, or any other issue raised by the pleadings, it is permissible to have regard to any of the events which led to their being given, or other matter extrinsic to the references themselves or any other issues raised by the pleadings;

6.The question set out in paragraph 5 above be dealt with as a preliminary question of law at the commencement of the trial;”

The hearing of the trial commenced on 5 May 1997 and submissions were made on the preliminary question of law on 5, 6 and 7 May. On 7 May the Court said:-

“The question before the Court is that posed in paragraph 5 of the orders of the Court made on 8 April 1997. There is no doubt that the issues raised in that question do involve difficult questions of law, but I have come to a firm view as to what the answer should be. In my opinion the answer should be no, namely it is not permissible to have regard to any of the events which led to the reference being given, or other matters extrinsic to the references themselves, or any other issues raised by the pleadings. Having regard to the importance of the matter it is desirable that I should give written reasons as to why I have come to that opinion.”

The reasons for that answer are now given but these reasons apply also with respect to the substantive issues between the parties, submissions on which were made on 8 and 9 May 1997.

The NCA Act and the Victorian Act are complementary statutory provisions. For the purposes of these reasons reference need be made to the provisions of the NCA Act only. The Authority is constituted “an Authority” by s 7 of the NCA Act. Section 8 establishes an Inter-Governmental Committee and s 9 specifies the functions of that Committee. A reference to s 10 shows that the Authority is empowered to initiate procedures which could lead to the making of a reference to the Authority. The applicant sought to lead evidence relating to actions taken by the Authority under these powers. The functions of the Authority are set out in s 11. For present purposes s 11(2) is of importance:-

“(2)     The special functions of the Authority are:

(a)where a reference to the Authority made under section 13 is in force in respect of a matter relating to a relevant criminal activity - to investigate the matter in so far as the relevant offence is, or the relevant offences are or include, an offence or offences against a law of the Commonwealth or of a Territory; and

(b)where a reference to the Authority made in accordance with section 14 by a Minister of the Crown of a State is in force in respect of a matter relating to a relevant criminal activity - subject to subsection 14(1), to investigate the matter in so far as the relevant offence is, or the relevant offences are or include, an offence or offences against a law of the State.”

By reason of definitions contained in s 4, a “relevant criminal activity” means:-

“any circumstances implying, or any allegations, that a relevant offence may have been, or may be being, committed against a law of the Commonwealth, of a State or of a Territory;”

In the NCA Act the words “relevant offence” are defined in s 4 to mean any one or more of a large number of offences but excludes some offences which otherwise would be within those offences. One offence so excluded is an offence the time for the commencement of a prosecution for which had expired at the time of the reference.

It should be noted that the words “special investigation” appearing in the NCA Act mean an investigation that the Authority is conducting in the performance of its special functions.

Section 13(1) and (2) are of importance. Those subsections are set out:-

“13.   (1)       The Minister may, after consulting the Inter-Governmental Committee, by notice in writing to the Authority, refer a matter relating to a relevant criminal activity to the Authority for investigation in so far as the relevant offence is, or the relevant offences are or include, an offence or offences against a law of the Commonwealth or of a Territory.

(2)A notice under subsection (1) referring a matter to the Authority for investigation:

(a)shall describe the general nature of the circumstances or allegations constituting the relevant criminal activity;

(b)shall state that the relevant offence is, or the relevant offences are or include, an offence or offences against a law of the Commonwealth or a law of a Territory but need not specify the particular offence or offences; and

(c)shall set out the purpose of the investigation.”

Division 2 of Part II comprising ss 25-36 of the NCA Act, contains provisions relating to hearings before the Authority. Section 25 provides that for the purposes of special investigations the Authority has power to hold hearings and that at a hearing the Authority may be constituted by one or more members. In the present case the Authority was constituted by one member only. The section contains many other provisions relating to procedural matters not presently relevant. Section 28 confers a power, subject to a limitation, on a member of the Authority to summon a person to appear before the Authority at a hearing to give evidence. The parts of s 28 presently relevant are set out:-

“28.(1)       A member may summon a person to appear before the Authority at a hearing to give evidence and to produce such documents or other things (if any) as are referred to in the summons.

(2)A summons under subsection (1) requiring a person to appear before the Authority at a hearing shall be accompanied by a copy of the notice, or of each of the notices, by which the matter or matters to which the hearing relates was or were referred to the Authority under section 13 or in accordance with section 14.

(3)A summons under subsection (1) requiring a person to appear before the Authority at a hearing shall, ........ , set out, so far as is reasonably practicable, the general nature of the matters in relation to which the Authority intends to question the person, but nothing in this subsection prevents the Authority from questioning the person in relation to any matter that relates to a special investigation.

........

(7)The powers conferred by this section are not exercisable except for the purposes of a special investigation.”

Section 30 makes it a criminal offence for a person appearing as a witness before the Authority “without reasonable excuse” to refuse or fail to answer a question that the witness is required to answer by the member constituting the Authority.

Section 32 contains provisions under which a person can seek review of a decision by a member of the Authority made under s 30. The provisions of s 32 relevant for present purposes are set out:-

“32.     (1)       Where:

........

(c)a person claims to be entitled to refuse to answer a question put to him, or to produce a document that he was required to produce, at a hearing before the Authority;

the Authority shall decide as soon as practicable whether in its opinion the claim is justified and notify the person of its decision.

(2)If the person is dissatisfied with the decision, he may apply to the Federal Court for an order of review in respect of the decision.

........

(4)On an application for an order of review in respect of a decision of the Authority under subsection (1), the Federal Court may, in its discretion, make an order:

(a)affirming the decision; or

(b)setting aside the decision.

........

(12)An application to the Federal Court under subsection (2) or (8):

(a)shall be made in such manner as is prescribed by Rules of Court made under the Federal Court of Australia Act 1976;

(b)shall set out the grounds of the application; and

(c)shall be lodged with a Registry of the Federal Court within the period of 5 days (excluding days on which the Registry is closed) immediately after:

(i)in the case of an application under subsection (2) - the relevant day in relation to the decision to which the application relates; or

(ii)in the case of an application under subsection (8) - the relevant day in relation to the notice given in accordance with subsection (8A) in relation to the application;

or within such further period as that Court (whether before or after the expiration of the first-mentioned period) allows.”

The manner of making an application to the Federal Court for an order of review of a decision made under s 32(1)(c) and s 32(2) is prescribed by O 57 r 1 of the Federal Court Rules. The application is headed “Application for an order of review”. The application must identify the decision the subject of the application, the interest of the applicant, the grounds of the application and the orders sought. Subject to minor variations not presently relevant, the provisions of O 54 apply to applications within O 57. Order 54 regulates applications for orders of review under the Administrative Decisions (Judicial Review) Act 1977.

By separate notices in writing to the Authority dated 10 September 1990 and 5 September 1990, the Attorney-General for the Commonwealth and the Minister for Police and Emergency Services for the State of Victoria, respectively, referred “a matter relating to a relevant criminal activity to the Authority for investigation”. With one exception, the notices were identical. The notice given by the Attorney-General identified the relevant criminal activity as being offences against a law of the Commonwealth while the notice given by the Minister for Police and Emergency Services identified the relevant criminal activity as being offences against a law of the State of Victoria. The substantive parts of each notice were:-

“ COMMONWEALTH OF AUSTRALIA
NATIONAL CRIME AUTHORITY
NOTICE
TO: NATIONAL CRIME AUTHORITY

PURSUANT to Subsection 13(1) of the NATIONAL CRIME AUTHORITY ACT 1984 and having consulted the Inter-Governmental Committee, I HEREBY REFER to the National Crime Authority for investigation the following matter relating to a relevant criminal activity insofar as the relevant offence or relevant offences are or include an offence or offences against the law of the Commonwealth or of a Territory.

MATTER

Whether any relevant offences have been committed as alleged in the allegations particulars of which are set out below, and if so the identity of the person or persons involved and the nature of their involvement.

PARTICULARS PURSUANT TO SUBSECTION 13(2)

(a)The general nature of the allegations is:

That, in and in relation to transactions concerning (directly or indirectly) the disposal and/or acquisition of securities in (a company I shall call “A Ltd”), certain directors of that company, alone, or in concert with other persons, improperly used their positions as directors of that company, and improperly used information acquired by virtue of those positions, in order to gain an advantage or advantages for themselves or some other person or persons or to cause detriment to that company and that with fraudulent intent, certain directors of that company, alone, or in concert with other persons, failed, in and in relation to the said transactions, to act honestly in the exercise of their powers and the discharge of the duties of their office as directors of the said A Ltd.

(b)The allegations constitute a relevant criminal activity because the alleged activities may have constituted, or may be continuing to constitute, an offence against a law of the Commonwealth or of a Territory:

(particulars were given).

(c)The offence or offences which may have been, or are being committed, are as follows:

(particulars were given).

(d)The purpose of the investigation is:

(i)to ascertain whether any or what relevant offences (including any offence deemed to be a relevant offence pursuant to s.4(2) of the National Crime Authority Act 1984) have been or are being committed against the laws of the Commonwealth or of a Territory;

(ii)to identify the offender or offenders;

(iii)to assemble evidence that would be admissible in the prosecution of offenders; and

(iv)to furnish the evidence to the Attorney-General of the Commonwealth of Australia or of a State or Territory or the relevant law enforcement agency for the prosecution of those offences.”

On its face, the reference by the Commonwealth, and similarly the reference by the State of Victoria, constitutes a special investigation under the NCA Act. In conformity with the provisions of s 28 of the NCA Act, a member of the Authority summoned the applicant to appear before the Authority at a hearing to give evidence. No objection has been taken to the summons.

The issues sought to be raised by the applicant are:-

1. The nature and scope of the “matter” referred to in the reference.

2. Whether, in seeking to ask questions of the applicant relating to what is described in these reasons as “the investment” the Authority was acting within the powers conferred upon it by the reference. In other words did these questions come within the nature and scope of the “matter” referred to in the reference.

3. Whether the reference complies with the statutory requirements to describe the general nature of the circumstances or allegations constituting the relevant criminal activity.

In order to establish the claim, the applicant proposed to call some six persons, being members or former members of the Authority or persons engaged to assist the Authority in its investigations, to give oral evidence and to produce documents relating to those issues. The evidence extended to matters affecting the Inter-Governmental Committee and the decision to make the reference. This material, so it was contended, was to be directed to the identification of the “matter” and the validity of the reference.

The submissions made on behalf of the applicant depend largely on the word “matter” appearing in s 13(1) of the NCA Act. A reference to any dictionary shows that the word “matter” has many different meanings. In construing the word “matter” regard must be had to the context in which the word appears. Lawyers tend to give the word “matter” a special meaning. This follows from the appearance of the word “matter” in ss 75, 76, 77 and 78 of the Constitution and in the context of the jurisdiction of Courts. In the present case the word “matter” is used in the context of s 13(1) which confers a power on the Minister to refer a matter relating to a relevant criminal activity to the Authority for investigation but limited to certain types of offences. By inserting the meaning given to the phrase “relevant criminal activity”, the power is to “refer a matter relating to any circumstances implying, or any allegations, that a relevant offence may have been, or may be being, committed against a law of the Commonwealth, of a State or of a Territory”. For present purposes it is not necessary to include the extended meaning to be given to the words “relevant offence”.

In this context, the word “matter” is not to be given a restricted meaning of things in dispute between parties or the subject of contention, dispute, litigation or the like. The word “matter” is to be given the meaning of the “events, affairs, circumstances etc., understood to refer to a particular occasion, but not further specified”, see The Shorter Oxford English Dictionary”. As was put by Counsel for the Authority, the word “matter” is to be construed as a convenient neutral term describing what is referred to the Authority by the Minister for investigation after the appropriate procedures have been followed. The only limitation to be imposed is that the “matters” to be investigated must relate to a relevant criminal activity and a relevant offence. A further limitation is imposed by the requirements of s 13(2).

For present purposes, it is sufficient to say that the summons under s 28 of the NCA Act directed to the Applicant was in the following form:-

The National Crime Authority is conducting special investigations into the matters that have been referred to it as set out in the notices, copies of which are annexed to this summons as Annexures A and B.

Pursuant to Section 28(1) of the National Crime Authority Act 1984 (Cwlth) and Section 17(1) of the National Crime Authority (State Provisions) Act 1984 (Vic) you are required:

(a)to attend at 10 am on 7 September 1995 before the Authority at the hearing to be held for the purposes of the abovementioned investigations at 340 Albert Street, East Melbourne to give evidence in relation to the nature of and circumstances surrounding the investment of $52 million by (a company I shall call “AB Ltd”) (a subsidiary of A Ltd) in securities in (a company I shall call “V Ltd”) in or about July 1988; and

(b)to attend from day to day unless excused or released from further attendance.”

The Annexures A and B referred to in the summons are references to the Authority under the NCA Act and the Victorian Act respectively.

In due course, the Applicant attended before the Authority. The applicant answered questions in relation to general or preliminary matters, but as soon as he was asked the question:-

“Look at the letter dated ........ ..... to ........ ...., exhibit MX 39546/006 to 0011; was that letter signed by you ?”

the applicant claimed to have a reasonable excuse not to answer. This was the first question directly touching the subject matter of the summons and the reference.

In the light of the judgment given by a Full Court of the Federal Court of Australia in National Crime Authority v A1 & A2 (1997) 145 ALR 126, it is not necessary for me to refer in detail to the matters discussed at length at the hearing or the issue of whether it is permissible to have regard to any of the events which led to the granting of the references to the Authority, or other matters extrinsic to the references themselves.

Counsel for the applicant contended that the word “matter” appearing in s 13(1) of the NCA Act had to be given a special or restricted meaning. Although s 13(1) does not require the “matter” to be defined the practice has been adopted of limiting the “matter” by the description, the statement, or the setting out as specified in s 13(2)(a), (b) and (c) respectively. This practice, it was contended, is not authorized by the NCA Act. In order to determine the true “matter” of a reference it was necessary, so it was said, to examine all relevant material leading to the grant of the reference including oral evidence as well as contemporaneous documentary material. In criminal proceedings in the Supreme Court of Victoria in which the question of admissibility of evidence obtained in a reference under s 13 of the NCA Act arose,Vincent J (Ruling No 9) accepted this approach. His Honour admitted evidence of this kind and concluded:-

“The subject of the proposed, and then authorised investigation, (setting to one side the question of the validity and the precise wording of the Notices of Reference) was “the way in which directors of A Ltd have gained effective control of one of Australia’s largest companies”. There were suspicions that “relevant offences” may have been committed in the achievement of this objective and possibly, if the note made by ........ .., on 22 November 1989, accurately records the views expressed to him by ........ ., the involvement of some directors in a “conspiracy of huge magnitude”.

It is painfully obvious that the Authority neither sought, nor was it granted, a general reference to investigate the affairs of A Ltd, its directors, or associated companies or persons.”

His Honour ruled that most of the statements made were inadmissible in the criminal prosecution.

In A1 & A2 v National Crime Authority (Federal Court of Australia, 26 June 1996, unreported) Merkel J admitted evidence extrinsic to the words of a reference under s 13 of the NCA Act in order to determine the “matter” the subject of the reference.

Counsel for the applicant contended that the material sought to be led as evidence would tend to prove there was no connection between the V Ltd investment, the subject matter of the question put to the applicant, and A Ltd and AB Ltd and that the question relating to the V Ltd investment was not directed to the purpose of the reference relating to A Ltd and AB Ltd and related matters,. In other words, it was contended that the question lay outside the scope of the “matter” referred to the Authority for investigation.

Since those submissions were made and the ruling given on 7 May 1997, a Full Court allowed an appeal by the Authority from the orders made in A1 & A2 v National Crime Authority on 26 June 1996. It is necessary to consider the reasons of the Full Court (145 ALR 126). In their joint reasons von Doussa and Sundberg JJ, commencing at 130 set out the issues, the Commonwealth legislation, the Commonwealth reference, the summons and the primary judge’s reasoning. Commencing at 135 their Honours considered the nature of an investigation, the question of relevance and the alleged deficiencies in the references being (a) criminal activities too broadly described, (b) no time-frame, (c) persons the subject of the allegations not identified and (d) conduct and transactions not described. Their Honours, commencing at 144, then discussed a number of earlier legal authorities, the functions of notice of reference and their conclusion. The following extract is taken from 144-145:-

“An NCA investigation starts with no specific issues or charges. It has only its terms of reference, which may be extremely wide. Its function is inquisitorial, not adversarial. It must pursue lines of inquiry, and in doing so may find that other lines of inquiry appear profitable: cf Douglas v Pindling [1996] AC 890 at 901. The NCA should not be regarded as outside its charter so long as it bona fide seeks to establish a relevant connection between certain facts and the subject matter of the reference, and the connection is one that is reasonably capable of being related to the purpose for which the power is conferred: cf Ross v Costigan (1982) 41 ALR at 334; Melbourne Home of Ford (1980) 31 ALR 519; 47 FLR at 175 and Douglas v Pindling at 905. Because the NCA is an investigative body, it must necessarily embark on a fishing expedition: cf McGuiness v Attorney-General (Vic) (1940 63 CLR at 92 and Douglas v Pindling at 904. Given the nature of an NCA investigation, to say that it is a function of the notice of reference to enable the NCA to ascertain the extent or limits of its powers does not mean that a notice must possess the particularity insisted upon by the primary judge.

Another purpose his Honour considered was to be served by the notice of reference was to enable the NCA and persons subjected to the exercise of its coercive powers to determine the relevance of matters, documents and things to the special investigation: see, for example, ss 25(8) and 29(1). Again, this is an undoubted function of the notice: see AB v National Crime Authority (Full Fed C, 3 July 1996, unreported) and cf Mannah v State Drug Crime Commission (1988) 13 NSWLR 43 at 54. But once the expansive notion of relevance in the context of an NCA investigation is appreciated, this purpose does not lead to the conclusion that the reference is inadequate because it fails to identify persons, conduct and time-frame.

The third purpose of the notice of reference was said by his Honour to be to enable a court to adjudicate upon issues of power and relevance. Because of the nature of the NCA’s powers and the wide scope of the notion of relevance described above, a court’s ability to intervene is necessarily limited. Once it is understood that intervention is restricted to cases in which the NCA is off on a frolic of its own or is engaging in conduct that no reasonable body, correctly directing itself in law, could properly engage in, the absence of information as to persons, conduct and time-frame will not impede a court from discharging its function, though its role will be more restricted than it would be if it were determining questions of relevance in ordinary adversary litigation or questions of power in contexts other than those involving wide-ranging inquiries and investigations such as those engaged in by the NCA.

The contention that to be valid a notice must identify the persons whose conduct is in question, describe that conduct, state when or between what dates the conduct occurred, and state in a detailed way (ie not broadly) the alleged criminal activities, cannot be correct. A notice which included all those matters would contain a specific, and not a general, description of the circumstances or allegations constituting the relevant criminal activity. Section 13(2)(a) shows that parliament did not intend that a notice must contain that degree of specificity. Moreover, if the minister were aware of all the facts insisted upon by the primary judge, there would be no need for an investigation by the NCA. The matter could be dealt with by the ordinary police forces. If, on the other hand, the minister were not aware of those facts, an investigation, the very process by which the information might be obtained, could not occur.”

These opinions are binding upon me. In any event, with respect, I agree with them. The opinions express clearly what I had in mind when, on 7 May 1997, I expressed my opinion that the preliminary question of law should be answered in the negative.  The opinions support the answer given.

Another relevant factor should be mentioned. During the course of argument on the preliminary question, submissions were directed to the question of the nature of an order of review under s 32(2) of the NCA Act. The provisions of s 32 relevant for present purposes are set out earlier in these reasons. In substance, where a person claims to be entitled to refuse to answer a question at a hearing before the Authority, the Authority is required to decide whether, “in its opinion the claim is justified”. Under 32(2), if the person is dissatisfied with the decision, the person “may apply to the Federal Court for an order of review in respect of the decision” (emphasis added). On the application, the Court may affirm the decision or set aside the decision. The application must set out the grounds of the application.

The wording of s 32(2) of the NCA Act can be contrasted with the relevant parts of s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 which provide:-

“5.(1)A person who is aggrieved by a decision to which this Act applies ........ may apply to the Court for an order of review in respect of the decision on any one or more of the following grounds:  ........ ”

A large number of grounds are then specified which, on one view, limit the grounds upon which an application for an order of review may be made.

Section 32 of the NCA Act does not specify grounds upon which an application for an order of review under that section may be made. It is noted that under s 32(12)(b) the application “shall set out the grounds of the application”. Further, it is noted that the only orders the Court may make on an application for an order of review under s 32 is to affirm the decision or to set aside the decision. These provisions are to be contrasted with the orders the Court may make in relation to applications for orders of review under s 16 of the Administrative Decisions (Judicial Review) Act.

Section 30(2) of the NCA Act provides that a person appearing as a witness at a hearing before the Authority “shall not, without reasonable excuse” “refuse or fail to answer a question that he is required to answer by the member presiding at the hearing”. Section 30(11) provides that a person who contravenes s 30(2) is guilty of a criminal offence and is liable to a fine not exceeding $1,000 or imprisonment for a period not exceeding 6 months. These provisions illustrate the importance of the decision the Authority must make under section 32. The Authority must decide whether, in its opinion, the claim by the person that the person “has reasonable excuse” to refuse or fail to answer a question, is justified. Here, the Authority made a decision, giving reasons, that the claim by the applicant to be entitled to refuse to answer the question was not justified and formally required the applicant to answer the question. In this context it is important to note that the Court is not required to make a decision that the applicant “has reasonable cause” to refuse to answer a question. The orders it can make involves a true alternative, to affirm or to set aside the decision of the Tribunal.

Counsel for the applicant submitted that the application to the Court under s 32 of the NCA Act should be a hearing de novo of the question whether the applicant “has reasonable cause” to refuse to answer a question. In considering this question, the Court could act only on evidence properly presented to the Court. It was not appropriate to consider whether the Authority was in error or not, the Court must decide on the evidence led before it. Accordingly, counsel contended that evidence should be led directed to the validity of the reference.

Counsel for each party accepted, correctly in my opinion, that if the application involved a hearing de novo, for constitutional reasons the Court would need to determine the application on evidence given at the hearing of the application.

The contentions made on behalf of the applicant are rejected. Section 32(2) of the NCA Act enables a person to apply for an “order of review”. The use of the word “order” in this phrase has a limiting effect. The instances where the Court conducts a hearing de novo from a decision of a non-judicial tribunal arise where the Court is required “to review” the decision. The phrase “order of review” is used in the Administrative Decisions (Judicial Review) Act 1977. In a very helpful passage in Woss v Jacobsen (1985) 11 FCR 243 Davies J commencing at 259 discusses the nature of an applicaiton for an order of a review under the ADJR Act. As his Honour said at 260:

“Thus, the function of review which is conferred upon the Federal Court of Australia under the ADJR Act is the function of ensuring that persons and authorities conferred power by enactments of the Parliament shall, when acting in exercise of those powers, act within power and in accordance with power. That function is performed by the court not merely in the final order by way of review which the Court may choose to make but also and primarily in the consideration anterior thereto which the court gives in reaching its decision to grant or refuse such an order.”

This function is completely different from a function of exercising the discretion or power conferred on the person making the decision sought to be reviewed. In the latter case, the function is exercised by a hearing de novo.

The similarity between an application for an order of review under s 32 of the NCA Act and an application for an order of review under the ADJR Act is strengthened by reference to s 57 of the NCA Act which provides, in substance, by adaption, that s 11 of the ADJR Act is to apply to applications for an order of review under s 32. An application is to be made and it “shall set out the grounds of the application”. The orders that can be made under s 32 are limited to confirming or setting aside the decision of the Authority.

Further, it must be remembered that the hearing before the Authority does not involve a dispute between parties. The Authority is exercising an investigatory power conferred upon it by statute. The applicant claims to be entitled to refuse to answer a question. At the hearing the applicant was represented by counsel. Counsel appeared for the Authority but did so to assist the Authority which was required to decide whether the claim should be allowed. The fact that opposing counsel appeared before the Authority should not obscure the true position namely that the applicant was seeking to be relieved of the obligation to answer a question put by the Authority. No question of onus of proof arises. The hearing is inquisitorial. The hearing is not adversarial. The Authority is the inquisitor. The Authority is required to decide whether, in its opinion, the claim should be allowed.

The hearing of the application for the order of review is adversarial.

At the hearing the Court is required to decide whether the Authority made its decision within and in accordance with the power conferred upon it. The Court has no power to substitute its decision for that of the Authority. It is not appropriate for the Court to treat the hearing of the application as a hearing de novo.

The Court turns to consider the substantive issues between the parties. At the request of the Court, on 7 May 1997, counsel for the applicant supplied a summary of the grounds of the application for the order of review. The summary, but not disclosing the names of the companies mentioned, was as follows:-

“SUMMARY OF GROUNDS

1.The notice of reference from the Commonwealth Minister dated 10 September 1990 does not comply with paragraph 13(2)(a) of the NCA Act because it does not describe the general nature of the circumstances or allegations constituting the relevant criminal activity which or the purpose of which is the subject of the special investigation. Accordingly, there is no “special investigation” for the purposes of the NCA Act. The same contention is made in relation to the Victorian reference dated 5 September 1990.

2.The NCA was authorised to conduct a special investigation (“the Special Investigation”) into allegations that certain directors of (AAA Ltd) (formerly A Ltd) (“A Ltd”) associated with X Ltd might have committed offences under a number of Commonwealth and State Acts and at common law in relation to a series of transactions whereby X Ltd acquired majority control of A Ltd in or about 1988 (the “X Ltd/A Ltd matter”). The NCA has not exercised its power under section 28(1) of the NCA Act to summon the applicant to give evidence in relation to the special investigation of the X Ltd/A Ltd matter, and has thereby contravened section 28(7) of the NCA Act.

3.Alternatively, if the NCA was authorised to conduct a special investigation into allegations that certain directors of A Ltd might have committed offences concerning the disposal and/or acquisition of securities in A Ltd, the NCA has not exercised its power under section 28(1) of the NCA Act to summon the applicant to give evidence in relation to the special investigation., and has thereby contravened section 28(7) of the NCA Act.

4.The NCA has sought to question the applicant in relation to the V Ltd transaction, which is a matter that does not relate to the special investigation, and the NCA has thereby contravened section 28(3) of the NCA Act.”

The application for the order of review is to be determined by reference to the terms of the notice constituting the special investigation referred to the Authority pursuant to s 13(1) and (2) of the NCA Act and the terms of the summons under s 28(1), (2) and (3) directed to the applicant to appear before the Authority to give evidence. In addition, the transcript of the hearing before the Tribunal on 7 and 8 September 1995 during which the decision under challenge was given, is in evidence before the Court. Other documents are in evidence, the one relevant for present purposes being the letter shown to the applicant when asked whether the letter had been signed by the applicant. The transcript includes the submissions made by counsel for the applicant and by counsel appearing to assist the Authority in relation to the claim by the applicant that there was reasonable cause for the refusal to answer the question. The transcript includes the reasons of Authority for the decision made.

Ground 1 of the summary of grounds relied on by the applicant is directed to the validity of the reference under s 13 of the NCA Act and the equivalent reference under the Victorian Act.

Ground 2 is directed to the purpose of the reference and the allegation made is that the purpose of the summons and the question do not come within the scope of the reference.

Ground 3 is directed, essentially, to the same issue namely that the summons and the question do not come within the scope of the reference.

Ground 4 is directed to the question and its relevance to the reference.

It is noted that counsel for the applicant did not make a detailed objection to the reasons of the Authority. The submissions were directed to the validity of the reference and whether the question asked came within the terms of the investigation referred to the Authority.

Reference is made again to the extracts from National Crime Authority v A1 & A2 set out earlier in these reasons. Further, in Director of Public Prosecutions Reference No 2 of 1996, Court of Appeal, Vic (Winneke P, Brooking and Tadgell JJ, 26 September 1997, unreported), made it clear that the subject matter of a special investigation under s 13 of the NCA Act is to be determined by reference to the terms of the notice alone and that in determining whether the intended subject of a hearing is sufficiently linked to that “matter” to enable the powers conferred by ss 25 and 28 to be invoked, regard must be had to the notice given under s 13 above. The judgments in Reference No 2 of 1996 involved an examination of a number of rulings made by Vincent J in the criminal proceedings referred to earlier in these reasons and expressed opinions contrary to those expressed by Vincent J. The judgments in National Crime Authority v A1 & A2 and in Reference No 2 of 1996 were given after judgment in the present case had been reserved. Those judgments supply the answers to most of the submissions made on behalf of the applicant.

In considering the submissions so made, it is important to remember that of necessity a special investigation normally is expressed in very wide terms. It directs the Authority to pursue lines of inquiry as an inquisitor seeking to establish a relevant connection between facts and the subject matter of the reference which is reasonably capable of being related to the purpose for which the power is conferred. At this stage of the investigation no identified issues between identified persons have been determined. The Authority is empowered to investigate what is referred to it by notice under s 13(1) of the NCA Act for investigation. The notice must be in conformity with s 13(2) but that subsection does not require the notice to identify particular persons, conduct or a time frame. The Authority has a wide discretion in the exercise of its powers of investigation. The Court can set aside the decision of the Authority in cases where the Authority “is off on a frolic of its own or is engaging in conduct that no reasonable body, correctly directing itself in law, could properly engage in”. The Court is not “determining questions of relevance in ordinary adversary litigation or questions of power in contexts other than those involving wide ranging inquiries and investigations such as those engaged in by (the Authority) in conducting a special investigation”.

Counsel for the applicant pursued grounds 1, 2, 3 and 4 but were limited in their submissions by the adverse ruling on the preliminary issue. Evidence sought to be led was held to be inadmissible. Subpoenas to witnesses were set aside.

As a result, in relation to grounds 2, 3 and 4, leading counsel for the applicant said:

“...... accordingly , there is no basis as we perceive it upon which the grounds can be presently made out, and my learned friend accepts, I think, that as far as those grounds are concerned the applicant fails at this juncture, and if an appellate Court were to hold that the evidence which we sought to lead was admissible, then those grounds could be determined on the basis of that evidence, and accordingly we do not presently advance any submissions in support of the grounds and would expect that their fate would follow the ruling that your Honour made yesterday.”

It was clearly understood that if an appeal court held the ruling made was in error, there would have to be a retrial in relation to grounds 2, 3 and 4.

The submissions in support of ground 1, the purpose ground, involved a detailed examination of the notice of reference. The notice has been set out earlier in these reasons. The notice is expressed to be given pursuant to s 13(1) of the NCA Act as a reference to the Authority for investigation of a “matter” relating to criminal activity but limited to relevant offences against the law of the Commonwealth or of a Territory. The complementary notice under the Victorian Act refers to laws of the State. In each case the words mirror the words of the legislation. The heading “Matter” then appears. The matter is described. Particulars pursuant to s 13(2) are then given under paragraphs corresponding to s 13(2)(a),(b) and (c). The particulars to paragraphs (b) and (c) are not set out in the extract of the notice set out earlier in these reasons. They are:

(b)The allegations constitute a relevant criminal activity because the alleged activities may have constituted, or may be continuing to constitute, an offence against a law of the Commonwealth or of a Territory:

(i)involving 2 or more offenders and substantial planning and organisation including the use of complex corporate structures and complex commercial transactions;

(ii)of a kind or kinds ordinarily involving the use of sophisticated methods and techniques, including the deployment of persons with extensive knowledge of company law and regulation and with expertise in the area of corporate structures and financing mechanisms;

(iii)of a kind or kinds ordinarily committed in conjunction with other offences of like kinds; and

(iv)involving fraud, company violations, matters of the same general nature as fraud, and matters of the same general nature as company violations.

(c)The offence or offences which may have been, or are being committed, are as follows:

(i)breaches of sub-s 229(1) of the Companies Act 1981 to which paragraph (b) of that sub-section applies;

(ii)breaches of sub-ss.229(3) and (4) of the Companies Act 1981.

(iii)conspiracy, contrary to s.86(1)(a) of the Crimes Act 1914, to commit -

- an offence or offences against sub-s.299(1) of the Companies Act 1981 to which paragraph (b) of that sub-section applies; and

- offences against sub-ss.229(3) and (4) of the Companies Act 1981.”

Counsel referred to the width of the possible offences against the law, the absence of any time frame limiting the investigation with respect to the possible offences, the fact that some offences may be excluded since the time for the commencement of a prosecution for which had expired at the time of the reference [c/f definition of a “relevant criminal activity” in s 4]. Counsel stressed the width of the reference for investigation and the absence of any limits on that investigation. Implicit in the submission was the absence of particulars of identifiable offences, time limits, purpose and factual statements. The submissions involved a contention that a mere copying of the words of s 13(2) with general references to possible relevant criminal activity, offences and purpose would not constitute a valid reference.

These submissions should be rejected. They fail to take account of the inquisitorial nature of the reference. What is to be investigated involves a wide area of time, place, persons and activities into the allegations described by their general nature. In conducting the investigation, the Authority must decide what line of investigation should be followed and subject to acting in excess of its power including an improper purpose, it must be given a free hand. The power of the Court to restrain its activities is limited.

In view of the judgment of the Full Court in National Crime Authority v A1 & A2, it is not necessary to consider further the submissions made and the authorities cited. They are dealt with by the Full Court. The submissions went to the extent of asserting that there was no practical limitation to the scope of the investigation and thus the reference was invalid. Similar submissions were rejected by the Full Court.

In conclusion, one further aspect should be mentioned. During submissions made to the Authority on 8 September 1995, counsel assisting the Authority had indicated possible lines of investigations that were relevant to pursue under the reference and in particular with questions to be directed to the applicant. In the reasons expressed by the Authority in support of the decision made, these submissions were mentioned and the Authority continued:-

“(The applicant) was to be questioned regarding his knowledge of the matters that I have outlined. Accordingly, I am of the view that there is the required connection between the references on the one hand and the line of inquiry presently being pursued on the other and that therefore the use of the special powers is authorised. It follows that in my opinion the claim of (the applicant) to be entitled to refuse to answer the question is not justified, and I hereby notify (the applicant) and his legal advisers of that decision. Therefore, (the applicant), I formally require you to answer the question.”

This connection was not challenged. Neither can it be in the context that the validity of the special investigation has been upheld.

In the result, the application is dismissed with costs.

I certify that this and the preceding twenty-two (22) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R M Northrop

Associate:

Dated:             22 October 1997

Counsel for the Applicant:	Dr P Buchanan, QC with Mr P W Collinson
Solicitor for the Applicant:	Clayton Utz
Counsel for the Respondent:	Mr M Weinberg QC with Mr B E Walters
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	5, 6, 7, 8 and 9 May 1997
Date of Judgment:	22 October 1997