Allen Allen & Hemsley v Australian Securities Commission - [1992] FCA 341

No judgment structure available for this case.

IN THE FEDERAL COURT OF AUSTRALIA )
1
VICTORIA DISTRICT REGISTRY

1 No VG 79 of 1992
1
GENERAL DIVISION 1

BETWEEN: AUEN ALLEN h HEMSLEY
(Applicant)

AND : AUSTRALIAN SECURITIES
COMMISSION

(Respondent)

Coram: Ryan J
Date: 29 May 1992

Place: Melbourne RECEIVED)

MINUTES OF ORDERS PRINCIPAL

THE COURT ORDERS:

1. That so much of the request made on behalf of the applicant by its solicitors' letters of 14 August and 5 September 1991 as sought the formation of an opinion under s.l27A(2)(c) of the Australian Securities Commission Act 1989 that it is in the public interest for

NOTE: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

Mr Graeme Cantwell to disclose information to those

solicitors, be referred to the respondent for further
consideration.
2. That there be no order made as to costs.

IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY

GENERAL DIVISION j - ,
I .~

BETWEEN: ALLEN ALLEN & HEMSLEY i.
!

8 ,

(Applicant)

AND : AUSTRALIAN SECURITIES
COMMlSSION

(Respondent) I

Coram: Ryan J
Date:
- 29 May 1992

Place: Melbourne

REASONS FOR JUDWNT

Rvan J: There is pending in the Supreme Court of Victoria an action in which Paul Mungo Redshaw as plaintiff seeks damages from Allen Allen & Hemsley ("Allens") a firm of solicitors. By the further amended statement of claim in that action, it is alleged that Allens used information and instructions provided to them by Mr Redshaw and acted otherwise than in his

Wardley Investment Management Ltd ("WIML") which it is alleged interests but in the conflicting interests of his employer,

was also a client of Allens. It is further alleged that Allens in a letter dated 30 March 1987 and an attached statement of facts, disclosed to one James Yonge, then Managing Director of WIML, the instructions and information which they had received from Mr Redshaw. That letter and the statement of facts were, it is then pleaded, made available to the National Companies and Securities Commission ("the NCSC") with Allens' knowledge and consent, in connection with an investigation which the NCSC was then conducting in relation to trading of shares in APA Holdings Ltd at a time when a proposed takeover of Humes Ltd by Unity APA Ltd was on foot.

Paragraph 47 of the further amended statement of claim is in these terms:

"Acting on and i n r e l i a n c e on t h e letter dated 30 March 1987, t h e

Statement of Facts , t h e letter dated 1 Apr i l 1987 and t h e conveyance

of t h e fu r the r i n s t r u c t i o n s and information by Allens and Yonge t o

t h e NCSC, and as a r e s u l t thereof t h e NCSC on o r about 18 August 1987

revoked Redshaw's l i c e n c e and made publ ic t h e f a c t t h a t it had
revoked h i s lrcence."

The licence there referred to was a securities dealer's representative's licence.

The NCSC when it decided to revoke M r Redshaw's licence was constituted by its Chairman, M r Bosch and one of its Deputy

Chairmen, Mr Williams.

By letter dated 14 August 1991, Messrs Minter Ellison, the

wrote to the Australian Securities Commission ("the ASC") solicitors acting for Allens in the Supreme Court action,

requesting permission to speak to Messrs Bosch and Williams, and to Messrs Schoer, Cantwell, Shaw and Kryger who had all been officers of the NCSC in 1987. By a further letter to the ASC dated 5 September 1991 the following assertions, amongst others, were made:

"Further t o t h a t letter, we would l i k e t o add t h e f o l l o w ~ n g comments.

W e understand t h a t Graham Cantwell, formerly-.of t h e s t a f f - o f t h e

NCSC, has provided M r Redshaw's s o l i c i t o r s (Clayton Utz) with a

statement which r e l a t e s t o t h e above proceedings. I n a p r e - t r i a l

conference earlier t h i s year , Clayton Utz r e f e r r e d t o t h ~ s tatement

a s being damaging t o our c l r e n t ' s defence of t h e proceedings.

We a r e aware, i n very general terms, of some of t h e mat ters with

which l4r Cantwell 's statement deals . However, w e do no t have and
have not seen-a copy of Mr Cantwell's statement.

. . .
In order f o r our c l i e n t s t o put f o r t h t h e i r b e s t defence w e be l ieve they must have access t o information held by former members and s t a f f of t h e NCSC. This is p a r t i c u l a r l y so i n t h e l i g h t of t h e f a c t t h a t

Clayton Utz have access t o Mr Cantwell 's s tatement. A s you w i l l

r e a d i l y apprecia te , possession of t h i s s tatement by Clayton Utz and

Mr Redshaw p u t s our c l i e n t s a t a s rgnr f rcan t disadvantage i n t h e i r
defence of t h e proceedings.
It i s obviously important f o r our c l i e n t s t o o b t a i n access t o information held by former members and s t a f f of t h e NCSC and t o r e l a t e d documents, a s t h a t information goes t o t h e very hea r t of t h e

questron of causat ion i n t h e proceedings. It is e s s e n t i a l t o

e s t a b l i s h t h e events between 3 March 1987 and 22 J u l y 1987 i n order

t o determine what caused t h e NCSC t o revoke M r Redshaw's l rcence, and

whether, but f o r t h e ac t ions of our c l i e n t , t h i s would have occurred

i n any event .

. . .

W e would t h e r e f o r e ask t h a t t h e Commrssion g ran t us a dispensation i n

r e l a t r o n t o a l l of t h e re levant mater ra l a s it would allow t h a t

ma te r i a l and information t o be drsclosed m t h e s e proceedings. Apart
from documents a l r eady released t o Clayton Utz on 17 June 1991,

copies of whrch we hold, w e request f o r t h e same purpose, t h e
following documents:

1. The s t a f f paper presented t o t h e NCSC on 6 Apr i l 1987.

2 . The t r a n s c r i p t of NCSC hearrngs on 1 Aprr l 1987 r e l a t ~ n g t o
evrdence given by Redshaw.

3. o t h e r documents which a s s i s t e d o r w e r e r e l evan t t o t h e

formation of t h e b e l i e f of s t a f f and NCSC members t h a t Redshaw

had not a c t e d "efficiently, honest ly o r f a i r l y " .

4. Documents which were r e l i e d upon by NCSC s t a f f i n t h e
p repara t ion f o r t h e lrcence revocatron hearing on 17 and 22

J u l y 1991.

I n r e l a t i o n t o witnesses, w e request a d ispensat ron t o allow us t o

in terv iew former NCSC s t a f f members Cantwell, Schoer and Shaw t o garn
information:

1. which l e d NCSC s t a f f t o prepare t h e s t a f f paper;

2 . r e l a t i n g t o t h e preparatron of t h e case t o revoke Redshaw's

l i c e n c e i n t h e 17 and 22 July 1987 hearing;
3. a s t o how former NCSC s t a f f obtarned information whrch enabled them t o prepare and form t h e recommendations contained m t h e

s t a f f paper;
4 .

as t o how t h o s e s t a f f members gained informatron concerning t h e

p repara t ion of t h e case t o revoke Redshaw's l icence . I n
p a r t i c u l a r , w e would seek t o determine whether any discuasrons
w e r e held between former NCSC s t a f f and Redshaw between March
and J u l y 1987."

As indicated in that letter, Mr Cantwell, a former officer of the NCSC had made a statement to Messrs Clayton Utz, the solicitors for Mr Redshaw. It is now common ground that the provision of Mr Cantwell's statement occurred without any expression of opinion by the ASC pursuant to s.l27A(2) of the Australian Securities Commission Act ("the ASC Act") that such disclosure would be in the public interest. Sub-sections (1) and (2) of s.127A of the ASC Act are in the following terms:

"127A(1) Subject to thrs sectron, a person who was at any time:

(a) appornted for the purposes of a law specified in an applrcation order; or
(b) engaged as a member of the staff of the NCSC; or
(C) authorised to perform or exercise any function or power of the NCSC or any function-or power on behalf of the NCSC;
must not, except to the extent necessary to perform his or her official dutles, or to perform or exercise such a functlon or power, either directly or indirectly, make a record of, or drsclose to any person, any information that is or was acquired by hrm or her because of having been so appornted, engaged or authorised, or make use of any such information, for any purpose other than the performance of his or her official duties or the performance or exercise of that functron or power.

Penalty: $5,000 or imprisonment for one year, or both.
127A(2) Nothlng rn subsection (1) precludes a person from:

(a)

producing a document to a court in the course of crimrnal ~roceedinas or in the course of anv
under - the National Companies an;
Securities Commrssion Act 1979 or under a

prescrrbed law or national scheme law of this or

any other jurrsd~ctron; or
(b) drsclosing to a court ln the course of any
proceedings referred to in paragraph (a) any matter
or thing that came under his or her notice in the performance of official duties or in the performance of a function or the exercise of a power referred to in that subsection; or
(c) producing a document or disclosing rnformation to a person to whom, in the opinion of the Commission, it is m the public interest that the document be produced or the rnformatlon be disclosed; or
(d) producrng a document or disclosing information that is requrred or permitted by any Act of this or any other jurrsdiction to be produced or disclosed, as the case may be; or
(e)

producing a document- or -disclosing- informatron to
the Commission."

On about 16 September 1991, the Principal Legal Officer of the ASC's Markets Division ("the Principal Legal Officer") wrote to Allens' solicitors a letter which, omitting formal parts, was in these terms:

"I refer to your letter of 5 September 1991 and to your previous
letters of 10 May and 14 August in respect of the above matter.
A meeting of the Commission constituted by Messrs Wrlliams and Robinson today considered the above correspondence. A previous meeting of the Commission had considered another- application in respect of the same matter on 17 June. Today's meeting resolved that you be informed of the content of the resolutron of 17 June and provided wrth any transcript etc. not already available to you including relevant transcript of 1 April 1991.
The resolution of 17 June referred to provided that the Commission:

(a)

pursuant to sub-section ll(1A) of the Australian Securrtres Commission Act 1989 vary so much of any directions of the NCSC in respect of non-drsclosure of:

(i)

transcrrpt of hearings held by the NCSC in respect of APA Holdlngs in March 1987 in so far as the transcript relates to evidence given by Paul Mungo Redshaw;

(ii)

transcript of hearings held by the NCSC in July 1987 m respect of the cancellation of the dealer's representatrves licence of Redshaw;
(rii) Exhibits tendered in the sard cancellatron hearings
in July 1987; and

(rv)

the decision of the NCSC of 18 August 1987 in respect of the cancellatron of the dealer's
representatives lrcence of Redshaw,

as would be necessary to allow those documents to be drsclosed in Actron No 1203 of 1988 in the Supreme Court of Vrctoria and

rn any proceedings consequentral on that action; and

(b) authorise the Deputy Charrman to inform [the applicant], by

letter, of the variat~on of the said directions.
You will appreciate that the resolution of 17 June was passed in terms of the law in operation before 1 August 1991.
In accordance with those resolutions I should be glad rf you would inform me whether any of the listed materials (other than the transcript of 1 Aprrl 1987 referred to in your correspondence) needs to be provided to you.
With regard to the other matters raised in your correspondence and summarised on page 4 of your letter of 5 September, I have to inform you that the Commissron was unable to finalise its consideration of your application due to the absence of some necessary informatron. It is hoped that this information will be available to the Commission soon. I will, in any case, inform you as soon as possible of the date on which the Commission's consideratron of the matter rs likely to be completed."

Subsequently, the Principal Legal Officer wrote the following further letter dated 20 November 1991 to Allens' solicitors:

"I refer to your letters of 5 September and 1 November 1991 and my
letter of 16 September 1991.
A meeting of the Commission constituted by the Deputy Chairman and Statutory Member considered the above correspondence on 18 November and made resolutions pursuant to paragraph 127A(2)(c) of the ASC Law to the following effect:

(a)

it is in the publrc interest that the attached "staff paper" be disclosed to Minter Ellrson and Clayton Utz for use in preparing them cases an the above Supreme Court proceedings and for settling those proceedings but it is not in the publrc interest that the staff paper be disclosed publrcly otherwise than as evidence adduced durrng any trial of those proceedings;

(b)

the Commission would not have considered rt in the public interest for the staff paper to be so d~sclosed had not a statement of information previously been given by a former NCSC officer, Mr Graeme Cantwell, to Clayton Utz ln respect of the Redshaw licence cancellation hearrngs;

(C)

it is not in the public rnterest that Mr Ray Schoer, Mr Graeme Cantwell or Mr Alan Shaw should provide information to Mrnter Ellison or Clayton Utz in respect of matters known to the NCSC regardrng the cancellation of the Redshaw licence except to the extent that there has already been publlc disclosure or to the extent that disclosure 1s authorised in (a) above;

(d)

the reason for non-disclosure of information as provlded for above rs the public interest in not revealing the sources and procedural detarls of investigations relating to whether licence cancellation proceedings should be instituted.
A copy of the staff paper referred to above (i.e. the staff paper
referred to m Exhibit PR8 m the previous proceedings) is enclosed in accordance with the Commrssron's resolutions and I should be grateful if you would have regard to the basis in those resolutions on which it is provided to your firm.
You will also note that the statement of informatron referred to in

paragraph (b) above has not, except to the extent that the information coincides with matters dealt wrth in the staff paper,
been authorrsed by the Commissron under paragraph 127A(2)(c) or cognate predecessor legislatron to be produced or drsclosed to any person and that the Commissron has no record of any such authorisation by the Natronal Companres and Securities Commissron.
Please confirm that all outstanding requests for Commission action under paragraph 127(2) (c) [sic] of the ASC Law have now been dealt with. "

As foreshadowed in that letter, copies of the transcript of the hearing before the NCSC and the staff paper have been provided to Allens' solicitors but they have not been

permitted to interview any of Messrs Bosch, Williams, Schoer, Cantwell, Shaw or Kryger. Allens' solicitors then sought pursuant to s.13 of the Administrative Decisions (Judicial Review\ Act 1977 ("the AD(JR) Act"), reasons for the decision of 18 November 1991. Those reasons were furnished in a further letter from the Principal Legal Officer dated 18 February 1992 which, after reciting some of the background facts set forth above, continued:

"8. In connection with the Supreme Court proceedings, Clayton Utz obtarned a wrrtten statement from Mr Graeme Cantwell, a member of NCSC staff who had participated in the hearrngs referred to in paragraph 5. A copy of the wrrtten statement was not avarlable to the ASC (Clayton Utz had declined, in a letter to the ASC dated 6 September 1991, to furnrsh a copy of the statement) but it was understood, from information supplred by Mr Cantwell to the ASC, to have dealt in part wrth the basis on whrch the NCSC had instrtuted licence cancellatron proceedings agarnst Redshaw.
9. The ASC had no record of the NCSC or the Australian Securitres Commission havrng made a frndrng under paragraph 47(2)(c) of the National Companres and Securrties Commission Act 1979 or paragraph 127A(2)(c) of the Australian Securities Commrssion Act 1989 that rt was in the publrc rnterest that Mr Cantwell should divulge or communicate lnformatron to Clayton Utz in respect of matters relatrng to the hearings referred to in paragraph 5 either for the purposes of the proceedings referred to in paragraph 4 or for any other purpose.
10.

The decisron to which the present request refers relates to the applications made by Mrnter Ellison rn its letter of 5 September 1991 addressed to Mr George Durbrrdge, General Counsel for the Australian Securitres Commissron, other than the applrcation in that letter requesting a finding by the ASC that it is in the public rnterest that certain transcript be produced. A decisron in reapect of the request relating to
transcript had been given by the ASC on 16 September 1991.
Reasons for decision
11.   The reasons for the ASC's decision in respect of M~nter Ellison's applications in its letter of 5 September 1991 are set out in paragraphs (b) and (d) of Attachment "B" to thrs statement.
12.    A factor taken into account by the ASC in reachrng its decision was that whether or not a findrng had been made by the NCSC or the Australian Securrtres Commissron in respect of the divulgement or comunrcation made by Mr Cantwell and referred to in paragraph 9, the written statement furnished by Mr Cantwell to Clayton Utz could be used by that firm in determrning the basis, if any, on which it should settle the proceedings referred to in paragraph 4.
13.    In reaching its decision to which the present request relates,
the ASC had to take into account its previous decrsions finding it to be in the public interest, for the purposes of paragraph 127A(2)(c) of the Australian Securrtaes Commission Act 1989, that transcrrpt of the hearrngs referred to in paragraph 5 be produced for the purposes of the proceedings referred to in paragraph 4. In d~stinguishing the public interest with respect to the production of that transcript and the public interest with respect to the further divulgement sought in Minter Ellison's applrcations, the ASC had regard to the decision of the Federal Court of Australia in NCSC v Bankers Trust Australia Ltd & Ors 1990 ACLC 1."

Annexure B to that statement of reasons comprised the letter dated 20 November 1991 which is set out above.

Allens now apply under s.5 of the AD( JRI Act for a review of the decision of the ASC that:

"... rt is not in the public Interest within the meaning of section
127A(Z)(c) of the Australian Securities Commiss~on Act 1989 for the
Applicant:

(a)

to confer wrth former members and staff of the National Com~anies and Securrtles Commiss~on ("NCSC") ("the relevant persons") with respect to proceedings rn the Supreme Court of Victorla wherean Paul Mungo ~edshaw ("~edshaw") is Plaintrff and the Applicant is Defendant ("the proceeding");

(b)

inspect and obtain copres of documents ("the relevant documents") relating to or connected with the Investigation and conduct of a hearing by the NCSC into the revocation of Redshaw's Dealers licence.

The following are relied on as the grounds of the application:

"(a) that the making of the decision was an Improper exercise of the power conferred by the enactment, namely paragraph 127A(2)(c) of the Australian Securrtres Commission Act 1989 in pursuance of whrch it was purported to be made in that:-

(1) the Respondent took irrelevant considerations into
account in the exercise of the power;

(ii)

the Respondent failed to take relevant consrderations into account in the exercise of the power;

(iii)

the Respondent exercrsed the power for a purpose other than a purpose for which the power was conferred;

(iv)

the exercise of the power was so unreasonable that no reasonable person could--have-so exercised the power;

(V)

the exercise of the power constituted an abuse of the power an that it was arbizrary and drd not properly take into account the public interest;

(b) the decision involved an error of law; --
(C) there was no evidence or other material to justify the making
of the decision."

It is convenient in determining this application to consider separately and in order each of those grounds.

(a) (i) Irrelevant considerations:

It seems to be common ground that the task which confronted the ASC in considering the requests made on behalf of Allens was similar to that undertaken by courts when adjudicating on a claim that a concededly relevant document should, in the public interest, be immune from production. The approach which the courts should take to that task has been the subject of much judicial exposition. It involves a balancing exercise which has been succinctly described by Lord Upjohn in Conwav v Rimmer [l9681 AC 910 at 992 in these terms:

"On the one side there LS the public interest to be protected; on the other srde of the scales rs the rnterest of the subject who

will support his own or defeat his adversary's case. Both are legrtrmately wants product~on of some documents whrch he belreves

matters of public interest, for it is also in the public rnterest that justice should be done between litigating partres by production of all documents whrch are relevant and for which prrvrlege cannot be claimed under the ordinary rules. They must be werghed in the balance one against the other."

I

It is suggested on behalf of Allens that the lapse of time ! ,
!
since the NCSC's investigation and hearing and the fact that
the NCSC has effectively ceased to exist makes irrelevant any
supposed public interest in non-disclosure of its sources of I.
information (including confidential informants) and its 1
, -

- l0 -

investigative techniques. I am unable to accept this submission. It is reasonable to infer that the ASC on its formation acquired an interest in preserving the confidentiality of information provided to the NCSC and in not disclosing the sources of that information. It can similarly be inferred that the ASC has applied, with or without modification, some of the investigative techniques formerly employed by the NCSC. Of course, the passage of time necessarily reduces the weight to be attached to preserving those matters immune from disclosure, but that is not to say that they are irrelevant to the decision which the ASC had to make in the present case.

It was next contended that the distinction drawn by the ASC between the disclosure of the transcript of the NCSC hearing (which was held to be in the public interest) and permission to interview the former members and officers of the NCSC (which was held not to be in the public interest) was an irrelevant consideration. In my view, the ASC drew that

make and did not thereby apparently take into account an distinction in reaching the decision which it was required to

irrelevant consideration. There was, in fact, a distinction between the transcript which had been made available to M r Redshsw for the purposes of the hearing and access to the investigating officers and members which, saving Mr Cantwell, had not so been made available.

The decision of a Full Court of. this Court- in NCSC v Bankers

Trust Aus t ra l i a Ltd (1989) 24 FCR 217 t o which t h e ASC

r e f e r r e d i n i t s reasons f o r decis ion concerned t h e d i s c r e t i o n

of t h e NCSC t o conduct hearings i n p r i v a t e and t o r e s t r i c t t h e

d i sc losure of evidence given a t such hearings. I n t h e i r j o i n t judgment, Beaumont and Einfe ld JJ (with whom Lockhart J agreed i n t h a t r e spec t ) a l s o discussed t h e r e l a t e d ques t ion of

whether na tu r a l j u s t i c e requi red t h e provision t o each witness

of a t r a n s c r i p t of t h e evidence which he had given a t a

p r i va t e hearing.

The neares t po in t a t which t h e i r Honours' judgments i n t h a t

case a r e capable of a s s i s t i n g i n t h e balancing exe rc i s e on

which t h e ASC was engaged here i s i n t h e d iscuss ion of

temporal limits on a p roh ib i t ion of pub l ica t ion of evidence

given i n a p r i v a t e hearing. Lockhart J pointed ou t , a t 222:

"When courts or tribunals make secrecy orders (I use thrs expressron as a composite expression to encompass orders for hearang in pravate and restraining the disclosure of evidence) they may expressly impose a temporal constraint upon thelr operation, for example, until the determinataon of the proceeding or further order. Sometimes a judge wall be able to say at the tame he makes the order for how long the secrecy order should continue. Sometimes when delivering judgment the judge may remove the cloak of secrecy and disclose the confidential material in his reasons, either by necessity (for

because he is satisfied that the mformation needs no further example, the materaal must be mentaoned m the orders themselves) or

protection or is in truth on, further exammation, information that should not be protected by secrecy. Often when asked to make secrecy orders the judge wlll be able only to form a p r m a facie view as to whether such orders should be made, but after the benefit of all the evidence and argument, he wall be in a better position to determine whether those orders should continue, in some cases of course only after g~ving the parties an opportunity to be heard if the protective order is to be revoked.

This gaves some illustration of the temporary nature of most secrecy orders. There are cases where secrecy orders are necessarily permanent as, for example, m the cases mentioned earlier involving the disclosure of confidential anformation or trade secrets; but that is because property rights are protected requirang the maintenance of the secrecy of the information. In most instances, however, the circumstances of the case would not justify mposang permanent orders restraining disclosure of evidence.

In the circumstances of an investigation by the Commiss~on into possible criminal conduct it may be difficult to establish that permanent non-disclosure orders could be supported by the implied or incidental powers of the Commassion arising from the power to hold a private hearing. At the same trme it may be almost impossible for the Commission to accurately forecast at the time of makang the orders the appropriate duration of them. In such circumstances it seems unrealistic to impose, as a pre-condition for valrdity, a requirement that a specifac time limat be set in advance for the operation of the orders. It would be wathin the Commission's powers to order non-disclosure pending some definitive but undetermined date, such as the conclusion of the hearing or the investigation or alternatavely untal further order. The Commission must have a wide dascretion as to the appropriate temporal imitation of non- disclosure orders. Provaded that the orders made by the Commission are reasonably necessary for the purposes of the prrvate hearing, the fact that they are of uncertain duration will not automatically rnvalidate them.

In this case the non-disclosure orders made by the Commission were not expressed to be limited in time. In the circumstances of the investigation it is possible that the Commissron may not have been able to accurately forecast at the time it made the orders the length of their durat~on. The orders were not expressly made sub~ect to further order. However, the temporary nature of them seems to me to be dascernible from the clrcurnstances in which they were made."

In the same context, Beaumont and Einfeld JJ observed, at 233:

"In our opinion, the non-disclosure order went beyond what was reasonably necessary to achaeve the secrecy of the hearing. It was appropriate to limat the order to persons present and to evidence given at the hearang. In other words, the difficulties whach arase in the case of an order which purports to bind any member of the public do not arise here. But, in our view, because the order would have continued to operate until discharged by another order, if ever made, the order went beyond what was necessary to achieve the privacy of the hearing. It is one thing to secure the secrecy of the hearing by prohibiting disclosure during the currency of the hearing, or, perhaps, within a reasonable time after it has concluded. (As to the temporary character of the public interest in the non-disclosure of information pending prosecution, see Inland Revenue Commrssioners v Rossminster Ltd [l9801 AC 952 at 1001, 1012; R v Inland Revenue Commrseaoners; Ex Darte TC Coombs & Co. English Court of Appeal, Times Law Report, 1 June 1989.) It is a very different thing, as was
attempted here, to seek to prohrbit dasclosure indefinitely, or at least unless and until an order of discharge, if anv, is made. or all practical purposes, the order would have operated as a permanent restraint upon future publacatron. Put differently, the order, in our view, travelled beyond the peraod an respect of which the Commission's implied power to prohabit dasclosure could reasonably operate: cf NcDonald v Brott [l9891 VR 177 at 181."

I consider that by its reference to the Bankers Trust case the ASC was acknowledging the force of their Honours' conclusion that rarely, if ever, can the public interest require a prohibition on the disclosure of evidence given in the course of a hearing long after the proceedings in which the hearing occurred have been determined. The ASC then went on to imply that the public interest may impinge differently on disclosure of mattexs going to the investigation, including the supply of information, which led to the institution of those proceedings. That implication did not, in my view, give rise to an irrelevant consideration.

(a)(ii) Failure to take into account relevant considerations:
Essentially the relevant consideration said not to have been
taken into account is the provision by Mr Cantwell of a
statement to Redshaw's solicitors without a dispensation
having been obtained under s.l27A(2)(c) of the ASC Act, and
without any attempt by the ASC to restrain the use of that
statement or the information which it contains. A related
consideration identified by Allens is "the fact that the said
statement or information contained therein may be used to the
advantage of one side to litigation and the disadvantage of

the other side".

because the Principal Legal Officer expressly referred to them It is obvious that the ASC adverted to those considerations

in sub-paragraph (b) of his letter of 20 November 1991. They are also referred to in paragraphs 8 and 12 of the statement of reasons furnished pursuant to s.13 of the ADfJR) Act on 18 February 1992. However, those references do not conclude the question because a decision-maker is required to take account of a consideration in respect of each part of the decision to which it is relevant.

It is not sufficient for a particular matter to be set out in the statement of reasons in a catalogue of considerations said

to have been taken into account. The statement must- -also-

indicate expressly or by necessary implication how the reasoning process took account of that consideration in coming to each decision to which it was relevant. Thus in Ansett Transport Industries (Operations) Ltd v Secretam, Department of Aviation (1987) 73 ALR 193 Lockhart J observed, at 197:

"The purpose of s.13 is to enable persons whose property or whose interests are affected by an administrative decision to be fully informed of the basls on which the declsion was made and the reasons for at. Hence the sectlon requires that the statement set out the findings on material questions of fact wlth reference to the material on which the findings were based and that it give the reasons for the decision.....
Section 13 seeks to strike a balance between the requirement that persons affected by an administratrve decrsion know the basis upon which it was made and the necessity that the admrnistratron of this country be carried on effectively without undue rntervention by the courts in the administratrve process. The crtizen must have, when he receives the statement, sufficrent information to decide whether to accept the decision or to pursue the matter further withrn the adminrstratlve process itself or to challenge the decls~on m the courts."

See also ARM Constructions Ptv Ltd v Commissioner of Taxation

(1986) 10 FCR 197 at 202-205 and Soldatow v Australia Council
(1991) 28 FCR 1.

In the present case the decision to which the unauthorised provision to Redshaw's solicitors of M r Cantwell's statement was clearly relevant was whether to allow Allens' solicitors to seek themselves to obtain a statement from Mr Cantwell. In coming to a decision on that matter, the ASC drew no distinction between M r Cantwell on the one hand, and two other officers of the NCSC on the other. It was content to recite in sub-paragraph (c) of the Principal Legal Officer's letter of 20 November 1991 that:

" i t is not i n the public in teres t that Mr Ray Schoer, Mr Graeme
Cantwell or Nr Alan Shaw should provide information t o Minter El l i son or Clayton Utz i n respect of matters known t o the NCSC regarding the cancellation of the Redshaw l icence except t o the extent that there has already been public disclosure or t o the extent that disclosure

i s authorised i n ( a ) above;"

That statement entirely overlooks the central complaint of Allens that Mr Cantwell had already provided information to Clayton Utz to an extent not authorised in sub-paragraph. (a) of the letter. Moveover, the provision to Clayton Utz of Mr Cantwell's statement is expressly relied on in sub-paragraph (b) of the same letter as justifying the disclosure to both Minter Ellison -a Clayton Utz of the "staff paper". That decision did nothing to alleviate the discrimination between the two litigants of which Minter Ellison, on behalf of Allens, were complaining.

For these reasons I consider that by its statement of reasons the ASC has at least created the impression that it has not

separately decided whether or not to allow Minter Ellison to interview Mr Cantwell as distinct from other former officers of the NCSC. It also conveys, even more strongly, that if that question has been addressed, there has been a failure to take into account a consideration specifically relevant to it, namely, that one party to civil litigation has had the advantage of access to a former officer of the NCSC which will be denied to the other party unless the ASC forms the opinion contemplated by s.l27A(2) of the ASC Act. The public interest invoked by a litigant in cases like the present which has to be weighed against the public interest in non-disclosure, is so much the stronger if non-disclosure would result in the administration of justice being, or appearing to be, not impartial. As Lord Radcliffe said in Glasqow Cor~oration v Central Land Board [l9561 S.C. (H.L.) 1 at 18:

"The in teres t s of government, for which the Minister should speak with f u l l authority, do not exhaust the public in teres t . Another

aspect of that in teres t i s seen i n the need that ampartial jus t i ce

should be done i n the Courts of law, not l e a s t between c i t i z e n and
Crown, and that a l i t i g a n t who has a case t o maintain should not be deprived of the means of its proper presentation by anything less than a weighty public reason."

Accordingly, I regard it as incumbent on the ASC in the present case to deny Allens access to Mr Cantwell only if that access cannot be given on any terms at all without infringing a strongly counter-veiling public interest. That consideration would very likely involve an assessment of whether the public interest could not be preserved by allowing

M r Cantwell to be interviewed in the presence of an officer of

public interest required should on no account be disclosed to the ASC, after first indicating to him those matters which the

Allens' solicitors. Because it does not appear that the ASC has approached this part of its decision having regard to the consideration which I have identified, I propose to order that so much of the request made on behalf of Allens as sought a dispensation under S. 127A(2) (c) of the ASC Act to allow their solicitors to interview Mr Cantwell be referred to the ASC for further consideration in accordance with these reasons.
(a)(iii) Exercise of power for an ulterior Puruose:
This ground, as appears from the further and better
particulars of it supplied to the ASC under cover of a letter
dated 30 March 1992, involves an inference drawn from the
ASC'S alleged regard to irrelevant considerations, and
failure to take account of relevant considerations discussed
under (a)(i) and (ii) above. Although I have found that, in a
limited sense, there may have been a failure to take into
account relevant considerations, that finding does not support
the inference on which this third ground is based. The
purpose for which the power described in s.l27A(2) (c) of the
ASC Act has been conferred is to permit the disclosure of what
is declared to be secret information acquired in the course of
corporate regulation by a statutory agency, where such
disclosure is in the public interest. A failure to take
account of a consideration relevant to the exercise of that
power does not entail that it has been exercised for an

ulterior purpose.

Counsel for Allens did not press this ground in his argument, and I am unable to uphold it.

(a)(iv) Unreasonable exercise of Dower:
This ground too, has not been developed in the submissions of
Counsel for Allens.
It was made clear by Lord Greene MR in Associated Provincial
Picture Houses Limited V Wednesburv Cor~oration L19481 1 KB
223 at 229 that a claim that a person entrusted with a
discretion has acted "unreasonably" may be bound up with
related assertions of the kind made here under grounds (a)(i),
(ii) , (iii) and (v). His Lordship continued, at 230 to point
out that:

"It is clear that the local authority are entrusted by Parliament with the decision on a matter whlch the knowledge and experience of that authority can best be trusted to deal with. The subject-matter with which the condition deals rs one relevant for its consideration. They have consrdered it and come to a decisron upon it. It is true to say that, if a decrsion on a competent matter is so unreasonable that no reasonable authorrty could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something overwhelming, and, in thls case, the facts do not come anywhere near anythlng of that kind. I thlnk Mr Gallop in the end agreed that his propositron that the decision of the local authority can be upset if rt is proved to be unreasonable, really meant that rt must be proved to be unreasonable in the sense that the court considers it to be a decislon that no reasonable body could have come to. It is not what the court considers unreasonable, a different thlng altogether. If it is what the court considers unreasonable, the court may very well have different views to that of a local authorrty on matters of high public policy of thrs kind. Some courts mrght think that no children ought to be admrtted on Sundays at all, some courts mlght thlnk the reverse, and all over the country I have no doubt on a thing of that sort honest and slncere people hold d~fferent views. The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another. It is the local authority that are set in that posrtion and, provided they act, as they have acted, withan the four corners of thelr ~urisdrction, this court, in my opinron, cannot interfere."

grounds (a) (i) and (ii) that I am not persuaded that the It will be apparent from what I have said in relation to

decision reached by the ASC, even including the refusal to allow Mr Cantwell to disclose information to Allens' solicitors, is one which could not reasonably have been made, according to the Wednesbury test, as approved, for example, by Mason J (as he then was) in Minister for Aboriainal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41. Accordingly, this fourth ground of attack on the ASC's decision has not been made out.

(a) (v) Abuse of ~ower:

It will be apparent that this sub-paragraph has been formulated to invoke the reference set out in s.5(2)(j) of the AD(JR1 Act to "any other exercise of a power in a way that constitutes abuse of the power." However, the applicant relies essentially on the discrimination between two parties to civil litigation to which I have referred in discussing ground (a)(ii).

It has been indicated by Pincus J in Sunshine Coast Broadcasters Ltd v Duncan (1988) 83 ALR 121 that an administrative decision which works an unfairness on one citizen as against another may constitute an abuse of power if there is no stated or rational justification for the discrimination. However, I have already proposed an order which will require a reconsideration of the discrimination between Allens and Redshaw. In undertaking that

reconsideration the ASC should state the justification (if

any) for the apparent unfairness. Further discussion of this
ground is therefore unnecessary.
(b) Alleaed error of law:
The only error attributed to the ASC is its coming to what is
said to be a wrong result after undertaking the balancing
exercise identified in my consideration of ground (a)(!.) and

l'
I -
[

- 20 - I ,-
l',

(ii). It has not been suggested that the ASC misconstrued s.l27A(2) of the ASC Act or otherwise misunderstood the nature

I
I I
of the task which it was required to perform. The only error

which can be imputed to it is its failure to have regard to a - l:

relevant consideration in forming an opinion whether or not it t ,
was in the public interest for Mr Cantwell to disclose

l , ,
information to Allens' solicitors. Since the order which I
propose will afford relief in respect of that possible error, I !
the invocation of this ground is superfluous.

(c)

Absence of evidence or other material to iustifv the decision:

I regard this ground as a sub-species of error of law which is

made available as a ground of review by S .5(l) (f) of the

ADiJR) Act. Section 13 of that Act requires the decision-

maker to refer to the evidence or other material on which any

findings of fact were based. That reference may be express or

by necessary implication. There has been no express finding

of fact that Mr Cantwell or any of the other officers by whom

disclosure of information was sought knew of the "sources and !:

I .

procedural details of investigations relating to whether

i ,
I

licence cancellation proceedings should be instituted." I
However, Allens' request for permission to interview those 1-
officers must have been made on the assumption that they I
possessed that knowledge. Accordingly I am not disposed on I

1 .
this application for review to require the ASC to set out the 1.:
I
l
evidence on which the finding which I have attributed to it !.

was based. Nevertheless it would be desirable for the ASC, in undertaking the limited reconsideration which I have

I
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foreshadowed, to indicate the nature of the knowledge which M r Cantwell is believed to possess and the evidence for imputing that knowledge to him. That evidence will almost certainly be from sources within the NCSC or the ASC and known only to those agencies. The indication to which I have referred can therefore only be given in such a way as to preserve the public interest in the continuing secrecy of the information if that aspect of the public interest is found, upon reconsideration, to prevail.
Conclusion:
I was invited by Counsel for Allens to quash or set aside the

decision of the ASC and direct it to make an affirmative response to the request made to it by the letters dated 14 August and 5 September 1991 from Allens' solicitors. However, it will be apparent from the reasons given above that I consider the ASC's exercise of discretion to have only arguably miscarried. Moreover, that arguable miscarriage has been confined to the question of whether it is in the public
Sheppard J as a member of the Full Court in Minister for solicitors. Consistently with the approach endorsed by interest for Mr Cantwell to disclose information to Allens'

Immiuration and Ethnic Affairs v Convnqham (1986) 68 ALR 441 at 453, I shall therefore order that so much of the request made by Allens by its solicitors' letters of 14 August and 5 September 1991 as sought the formation of an opinion under s.l27A(2) (c) of the ASC Act that it is in the public interest for Mr Cantwell to disclose information to those solicitors be
!
referred to the ASC for further consideration. 1 :
L ,
l
Since the applicant has succeeded to only a limited extent in i !
obtaining the review which it seeks, and since it has failed i j I
on many of the grounds raised by its application, I regard it !
as appropriate to make no order as to costs. I ..
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I certify that this and the 1.
preceding twenty one (21). pages l...
are a true copy of the reasons I
for judgment of his Honour I
M r Justice Ryan

Counsel for the Applicant: M r PG Cawthorn

Solicitor for the Applicant: Minter Ellison

Counsel for the Respondent: M r R Downing

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Citations

Allen Allen & Hemsley v Australian Securities Commission [1992] FCA 341

Cases Citing This Decision

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Cases Cited

7

Statutory Material Cited

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Mees v Kemp [2005] FCAFC 5

Kioa v West [1985] HCA 81

IN THE FEDERAL COURT OF AUSTRALIA	)
VICTORIA DISTRICT REGISTRY

Wardley Investment Management Ltd ("WIML") which it is alleged	interests but in the conflicting interests of his employer,
was also a client of Allens. It is further alleged that Allens in a letter dated 30 March 1987 and an attached statement of facts, disclosed to one James Yonge, then Managing Director of WIML, the instructions and information which they had received from Mr Redshaw. That letter and the statement of facts were, it is then pleaded, made available to the National Companies and Securities Commission ("the NCSC") with Allens' knowledge and consent, in connection with an investigation which the NCSC was then conducting in relation to trading of shares in APA Holdings Ltd at a time when a proposed takeover of Humes Ltd by Unity APA Ltd was on foot.
Paragraph 47 of the further amended statement of claim is in these terms:

"Acting on and	i n r e l i a n c e on t h e letter dated 30 March 1987,	t h e
Statement of	Facts ,	t h e letter dated 1 Apr i l 1987 and t h e conveyance

wrote to the Australian Securities Commission ("the ASC")	solicitors acting for Allens in the Supreme Court action,
requesting permission to speak to Messrs Bosch and Williams, and to Messrs Schoer, Cantwell, Shaw and Kryger who had all been officers of the NCSC in 1987. By a further letter to the ASC dated 5 September 1991 the following assertions, amongst others, were made:

Clayton Utz have access t o Mr	Cantwell 's	s tatement.	A s you w i l l
r e a d i l y apprecia te ,	possession of	t h i s s tatement by	Clayton Utz and

in terv iew former NCSC	s t a f f members Cantwell,	Schoer and Shaw t o garn
information:

(a)	it is in the publrc interest that the attached "staff paper" be disclosed to Minter Ellrson and Clayton Utz for use in preparing them cases an the above Supreme Court proceedings and for settling those proceedings but it is not in the publrc interest that the staff paper be disclosed publrcly otherwise than as evidence adduced durrng any trial of those proceedings;
(b)	the Commission would not have considered rt in the public interest for the staff paper to be so d~sclosed had not a statement of information previously been given by a former NCSC officer, Mr Graeme Cantwell, to Clayton Utz ln respect of the Redshaw licence cancellation hearrngs;
(C)	it is not in the public rnterest that Mr Ray Schoer, Mr Graeme Cantwell or Mr Alan Shaw should provide information to Mrnter Ellison or Clayton Utz in respect of matters known to the NCSC regardrng the cancellation of the Redshaw licence except to the extent that there has already been publlc disclosure or to the extent that disclosure 1s authorised in (a) above;
(d)	the reason for non-disclosure of information as provlded for above rs the public interest in not revealing the sources and procedural detarls of investigations relating to whether licence cancellation proceedings should be instituted.

paragraph (b) above has not, except to the extent that the	information coincides with matters dealt wrth in the staff paper,
been authorrsed by the Commissron under paragraph 127A(2)(c) or cognate predecessor legislatron to be produced or drsclosed to any person and that the Commissron has no record of any such authorisation by the Natronal Companres and Securities Commissron.
Please confirm that all outstanding requests for Commission action under paragraph 127(2) (c) [sic] of the ASC Law have now been dealt with. "

(a)	to confer wrth former members and staff of the National Com~anies and Securrtles Commiss~on ("NCSC") ("the relevant persons") with respect to proceedings rn the Supreme Court of Victorla wherean Paul Mungo ~edshaw ("~edshaw") is Plaintrff and the Applicant is Defendant ("the proceeding");
(b)	inspect and obtain copres of documents ("the relevant documents") relating to or connected with the Investigation and conduct of a hearing by the NCSC into the revocation of Redshaw's Dealers licence.

(1)	the Respondent took irrelevant considerations into account in the exercise of the power;
(ii)	the Respondent failed to take relevant consrderations into account in the exercise of the power;
(iii)	the Respondent exercrsed the power for a purpose other than a purpose for which the power was conferred;
(iv)	the exercise of the power was so unreasonable that no reasonable person could--have-so exercised the power;
(V)	the exercise of the power constituted an abuse of the power an that it was arbizrary and drd not properly take into account the public interest;

(b)	the decision involved an error of law;	--
(C)	there was no evidence or other material to justify the making of the decision."

will support his own or defeat his adversary's case. Both are	legrtrmately wants product~on of some documents whrch he belreves
matters of public interest, for it is also in the public rnterest that justice should be done between litigating partres by production of all documents whrch are relevant and for which prrvrlege cannot be claimed under the ordinary rules. They must be werghed in the balance one against the other."

It is suggested on behalf of Allens that the lapse of time	! ,
!
since the NCSC's investigation and hearing and the fact that
the NCSC has effectively ceased to exist makes irrelevant any
supposed public interest in non-disclosure of its sources of	I.
information (including confidential informants) and its	1
, -

because he is satisfied that the mformation needs no further	example, the materaal must be mentaoned m the orders themselves) or
protection or is in truth on, further exammation, information that should not be protected by secrecy. Often when asked to make secrecy orders the judge wlll be able only to form a p r m a facie view as to whether such orders should be made, but after the benefit of all the evidence and argument, he wall be in a better position to determine whether those orders should continue, in some cases of course only after g~ving the parties an opportunity to be heard if the protective order is to be revoked.
This gaves some illustration of the temporary nature of most secrecy orders. There are cases where secrecy orders are necessarily permanent as, for example, m the cases mentioned earlier involving the disclosure of confidential anformation or trade secrets; but that is because property rights are protected requirang the maintenance of the secrecy of the information. In most instances, however, the circumstances of the case would not justify mposang permanent orders restraining disclosure of evidence.
In the circumstances of an investigation by the Commiss~on into possible criminal conduct it may be difficult to establish that permanent non-disclosure orders could be supported by the implied or incidental powers of the Commassion arising from the power to hold a private hearing. At the same trme it may be almost impossible for the Commission to accurately forecast at the time of makang the orders the appropriate duration of them. In such circumstances it seems unrealistic to impose, as a pre-condition for valrdity, a requirement that a specifac time limat be set in advance for the operation of the orders. It would be wathin the Commission's powers to order non-disclosure pending some definitive but undetermined date, such as the conclusion of the hearing or the investigation or alternatavely untal further order. The Commission must have a wide dascretion as to the appropriate temporal imitation of non- disclosure orders. Provaded that the orders made by the Commission are reasonably necessary for the purposes of the prrvate hearing, the fact that they are of uncertain duration will not automatically rnvalidate them.
In this case the non-disclosure orders made by the Commission were not expressed to be limited in time. In the circumstances of the investigation it is possible that the Commissron may not have been able to accurately forecast at the time it made the orders the length of their durat~on. The orders were not expressly made sub~ect to further order. However, the temporary nature of them seems to me to be dascernible from the clrcurnstances in which they were made."

"In our opinion, the non-disclosure order went beyond what was reasonably necessary to achaeve the secrecy of the hearing. It was appropriate to limat the order to persons present and to evidence given at the hearang. In other words, the difficulties whach arase in the case of an order which purports to bind any member of the public do not arise here. But, in our view, because the order would have continued to operate until discharged by another order, if ever made, the order went beyond what was necessary to achieve the privacy of the hearing. It is one thing to secure the secrecy of the hearing by prohibiting disclosure during the currency of the hearing, or, perhaps, within a reasonable time after it has concluded. (As to the temporary character of the public interest in the non-disclosure of information pending prosecution, see Inland Revenue Commrssioners v Rossminster Ltd [l9801 AC 952 at 1001, 1012; R v Inland Revenue	Commrseaoners; Ex Darte TC Coombs & Co. English Court of Appeal,	Times Law Report, 1 June 1989.) It is a very different thing, as was
attempted here, to seek to prohrbit dasclosure indefinitely, or at least unless and until an order of discharge, if anv, is made. or all practical purposes, the order would have operated as a permanent restraint upon future publacatron. Put differently, the order, in our view, travelled beyond the peraod an respect of which the Commission's implied power to prohabit dasclosure could reasonably operate: cf NcDonald v Brott [l9891 VR 177 at 181."

aspect of	that in teres t i s seen i n the need that ampartial	jus t i ce
should be done i n the Courts of	law,	not l e a s t between c i t i z e n and

I certify that this and the	1.
preceding twenty one (21). pages	l...
are a true copy of the reasons	I
for judgment of his Honour	I
M r Justice Ryan