Abrook v Paterson
[1995] FCA 694
•24 Aug 1995
CATCHWORDS
PRACTICE AND PROCEDURE - subpoena - whether party prohibited by terms of statute from compliance - terms of statute
Subpoena - See above
Securities Industry Act 1976 (NSW)
Telephonic Communications (Interception) Act 1960 (Cth)
Telecommunications (Interception) Act 1979 (Cth)
Trade Commission Act 1985 (Cth)
Queensland Office of Financial Supervision Act 1992 (Qld)
Trade Practices Act 1974 (Cth)
Friendly Societies Act 1991 (Qld)
Rochfort v Trade Practices Commission 91982) 153 CLR 134
Lloyd's Ships Holdings Pty Ltd v Davros Pty Ltd (1985) 11 FCR
287
Graylor Pty Ltd v Chapple [1991] 2 QdR 26
Parkes Management Ltd v Perpetual Trustee Co Ltd [1979] 1 NSWLR 274
Miller v Miller (1978) 141 CLR 269
Hilton v Wells (1985) 157 CLR 57
ROBERT & LORNA ABROOK & ORS Applicants
- and -
GREGORY PATERSON & ORS Respondents
O'LOUGHLIN J.
ADELAIDE
24 AUGUST 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY ) No: SG30 of 1995
)
GENERAL DIVISION )
B E T W E N:
ROBERT & LORNA ABROOK & ORS
Applicants
- and -
GREGORY PATERSON & ORS
Respondents
MINUTES OF ORDER
JUDGE MAKING ORDER : O'LOUGHLIN J.
WHERE MADE : ADELAIDE
DATE OF ORDER : 24 AUGUST 1995
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The applicant on the motion file and serve its submissions on costs by 31 August 1995 and that the respondents file and serve their submissions by 7 September 1995.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY ) No: SG30 of 1995
)
GENERAL DIVISION )
B E T W E N:
ROBERT & LORNA ABROOK & ORS
Applicants
- and -
GREGORY PATERSON & ORS
Respondents
REASONS FOR JUDGMENT
Coram: O'Loughlin J.
Place: Adelaide
Date: 24 August 1995
Stephen James Maitland ("Mr Maitland"), the Chief Executive Officer of the Queensland Office of Financial Supervision ("QOFS") has moved the court on motion for an order that a subpoena issued on 8 August 1995, directed to "The Chief Executive Officer, Queensland Office of Financial Supervision", be set aside. The primary ground advanced in support of the order sought was that both QOFS and its CEO are prohibited by statute, namely, s8.11 of the Friendly Societies Act 1991 (Qld), under penal sanction, from giving the evidence that is sought to be adduced and from producing the documents that are sought to be produced; a further argument that the evidence would be protected from disclosure by public interest immunity was not pursued. It was raised, during the course of submissions, that the subpoena ought to have been directed to the corporate body, QOFS: Rochfort v Trade Practices
Commission (1982) 153 CLR 134. But as no point was taken that the subpoena was defected on this ground I will not pursue the matter.
Section 8.11 of the Friendly Societies Act 1991 is in the following terms:
"8.11(1) A person who is, or has been, appointed or engaged under this Act (an 'official') must not, other than under this Act -
(a) make a record of information disclosed to, or obtained by, the person as an official ('protected information'); or
(b) whether directly or indirectly, divulge or communicate protected information about a person to someone else; or
(c) otherwise make use of the protected information.
Maximum penalty - 50 penalty units or imprisonment for 6 months.
(3) Nothing in subsection (1) precludes an official from -
(a) producing a document to a court in the course of criminal proceedings or proceedings under this Act or from divulging or communicating to a court in the course of such proceedings any matter or thing coming under his or her notice as an official; or
(b) producing a document or communicating any information gained by or conveyed to him or her -
(i) to the Minister or a person acting for the Minister (whether the official produces the document or communicates the information under section 12.21A or otherwise); or
(ii)to the Registrar, or an investigator appointed under this Act; or
(iii) in accordance with a reciprocal arrangement under
section 12.21; or
(iv)to a police officer exercising functions as such; or
(v) with the approval of the Minister or the Registrar first had and obtained, to any person appointed or engaged under the provisions of this Act for the purpose of the person exercising functions under the appointment or engagement."
In the substantive proceedings, a large group of people, all former members of the failed Family Security Friendly Society ("the Society"), have sued various parties in an attempt to recoup some of their losses. One such party is the former auditor of the Society, Howarth and Howarth; they audited the Society's accounts for the 1989 and 1990 financial years.
On 15 January 1991 John Angus Reyment was the Registrar of Friendly Societies for the State of Queensland; on that day he appointed himself Administrator of the Society, a position that he held until 22 September 1994 when the second applicant in these proceedings, William John East was appointed in his place. Mr Reyment continued, however, as Registrar of Friendly Societies until 30 September 1994. In that period, he had custody and control of documents that were required to be lodged with the Registrar, including files associated with the Society and files associated with the administration of the legislation.
The QOFS, a body corporate established under s5 of the Queensland Office of Financial Supervision Act 1992, became the Registrar under the Friendly Societies Act 1991 on 1
October 1994 in place of Mr Reyment. It is the supervisory body charged with overseeing the activities of certain non-bank financial institutions in Queensland such as Friendly Societies, Building Societies and others. As Registrar, QOFS now has the custody and control of the documents that are required to be lodged with the Registrar; it also has the custody and control of the files associated with its administration of the Friendly Societies Act and the former legislation, the Friendly Societies Act 1913.
Howarth and Howarth have caused the subject subpoena to be issued seeking, generally, all documents concerned with the Society and, in particular, its 1989 and 1990 Returns and any correspondence between the Society and its agents on the one hand and the Registrar of Commercial Act or QOFS on the other. The width of the subpoena is not under challenge.
Gareth John Jenkins, a solicitor in the employ of Clayton Utz, the solicitors for Howarth and Howarth has deposed that it is important for his clients to have access to the documents which relate to the Society which are now in the hands of the Registrar. He said in his affidavit:
"...(T)he applicants' case as opened in this action is that had (Howarth and Howarth) not misconducted themselves in the ways alleged by the applicants, the Registrar would have exercised powers under the Act in a way or ways which would have reduced the financial loss allegedly suffered by the applicants."
Howarth and Howarth wish to test that proposition by examining the Registrar's records to assess the way in which the Registrar did act in light of the information about the Society that was placed on the file.
The Chief Executive Officer of is appointed by the Governor in Council on the nomination of the QOFS Board: s37 of the QOFS Act. In terms of s8.11 of the Friendly Societies Act, he is not, therefore, appointed under that Act; that leaves then the issue whether he is or has been engaged under that Act. In my opinion, the answer to this question has to be: Yes. In the performance of his duties as the CEO of the Registrar of Friendly Societies, Mr Maitland must be regarded as a person who is "engaged under this Act".
I reject the argument that the proceedings presently before the court are "proceedings under [the Friendly Societies] Act" (see par8.11(3)(a)). Without in any way seeking to diminish the importance and complexity of these proceedings, they are appropriately described, in general terms, as raising issues of common law negligence, breaches of fiduciary duty and contract and breaches of the Trade Practices Act 1974 (Cth) and the Queensland Fair Trading Act. I am further satisfied that none of the other exclusions that are referred to in subs(3) are available to resolve this issue. [I mention in passing, as a matter of interest, that there is no subs(2)].
Mr Conrick, counsel for QOFS relied heavily on the decisions in Lloyd's Ship Holdings Pty Ltd v Davros Pty Ltd (1985) 11 FCR 287 and Graylor Pty Ltd v Chapple [1991] 2 QdR 26 in support of his argument that the subpoena should be set aside. Both these decisions are, however, in my opinion, distinguishable. In Lloyd's Ships the court had to consider the provisions of subs94(5) of the Australian Trade Commission Act 1985 (Cth). That subsection provided:
"A person... shall not be required to divulge or communicate to a court any information..."
The prohibition of disclosure to a court should be noted and emphasised. That same prohibition was present in Graylor v Chapple. In fact, it was stressed because there were separate prohibitions with respect to disclosure to "any person" and then followed other prohibitions with respect to "any court". The relevant legislation in that case was the Queensland Law Society Act 1952-1988, the relevant provisions of which were contained in subs50(3):
"(3) An official -
(a) shall not -
(i) communicate to any person any confidential information;
(ii)produce to any person any confidential document,
relating to the affairs of another person, except in the performance of his functions under this Act.
(b) shall not -
(i) be required to produce in any court or other court or tribunal (other than a court in the exercise of its
criminal jurisdiction) any confidential information or matter,
relating to the affairs of another person, except where, in the opinion of the Council it is necessary so to do to carry the provisions of this Act into effect."
In both cases it was held that the references to the "court" make it clear that production of documents was proscribed. These decisions are to be contrasted with others, such as Parkes Management Ltd v Perpetual Trustee Co Ltd [1979] 1 NSWLR 274 where it was held that the prohibition of the communication of information "to any person" contained in subs13(1) of the Securities Industry Act 1976 (NSW) did not extend to the communication of such information to a court. This decision is in line with the views of the High Court, first mentioned by Gibbs J (as he then was) in Miller v Miller (1978) 141 CLR 269 at 277. In a passage of obiter dicta, his Honour was considering the meaning of the words "a person shall not divulge or communicate to another person..." appearing in the Telephonic Communications (Interception) Act 1960 (Cth). His Honour said that he doubted whether a court is "another person" within the meaning of those words. The position firmed up six years later in Hilton v Wells (1985) 157 CLR 57 where the High Court had to consider a like provision in the Telecommunications (Interception) Act 1979 (Cth). In a joint judgment, Gibbs CJ, Wilson and Dawson JJ said at 76:
"In Miller v Miller (1978) 141 CLR 269, at p277 it was said of similar words in s5(3) of the Telephonic Communications (Interception) Act 1960 (Cth): '...I
doubt whether a court is "another person" within the meaning of the words, "A person shall not divulge or communicate to another person..." in that sub-section'."
Mason and Deane JJ in the course of discussing the same subject
in Hilton v Wells said at 87:
"Another question relevant to the interrelation between the various sub-sections is whether the prohibition (in sub-s(4)) against divulging or communicating information to 'another person' applies in respect of the disclosure of such information in the course of giving evidence before a court. In our view it does not for the reason that, as a matter of ordinary language, the words 'divulge or communicate to another person' are inappropriate to refer to the giving of evidence before a court 'which would hardly be called' another person: see per Dixon CJ, Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1, at p.6; per Gibbs J., Miller v Miller (1978) 141 CLR 269, at p277."
In my opinion, there is now no uncertainty. The decision in Hilton v Wells is authority for the proposition that the secrecy provisions in s8.11 of the Friendly Societies Act do not extend to the disclosure of information to a court.
The application to set aside the subpoena is dismissed. By arrangement with the parties leave is granted to the parties to make written submissions on the subject of costs. The unsuccessful applicant is to file and serve its submissions by 31 August 1995 and the respondents to the motion are to file and serve theirs by 7 September 1995.
I certify that this and the 8 preceding pages are a true copy of the Reasons for Judgment of Justice O'Loughlin.
Associate
Dated:
Counsel for the applicant
(On the Notice of Motion) : Mr M.K. Conrick
Solicitors for the Applicant : Sean Robertson
Counsel for the Respondents
(On the Notice of Motion) : Mr J K Bond
Solicitors for the Respondents : Clayton Utz
Hearing Date : 21 August 1995
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