Australian Securities and Investments Commission v Singapore LIASON Pty Ltd

[1998] FCA 1813

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 139 of 1998

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
APPLICANT

AND:

SINGAPORE LIASON PTY LTD
FIRST RESPONDENT

LANCE FREDERICK SHAW
ALSO KNOWN AS HASSAN MOHAMMADI
SECOND RESPONDENT

FAWZIAH RAHMAN
THIRD RESPONDENT

MATTHEW FERGUSON SHAW
FOURTH RESPONDENT

GRAEME ROSS KOVALEVSKY
FIFTH RESPONDENT

JOHN WILLIAM HOWARD
SIXTH RESPONDENT

BRIAN LUCAS PERRY
SEVENTH RESPONDENT

JUDGE:

COOPER J

DATE OF RULING:

18/12/98

WHERE MADE:

BRISBANE

RULING

THE COURT RULES THAT :

1. Subject to establishing :-

   (a)the relevance of the specific statements from the transcripts of evidence of the third respondent and other persons examined by Rodney James Peters pursuant to s19 of the Act which it wishes to tender into evidence against the third respondent in respect of the issues raised against her;

   (b)that the statements of persons other than the third respondent would, if given personally in these proceedings by those persons, be admissible against the third respondent;  and

   (c)that the evidence is not otherwise inadmissible under the Evidence Act 1995 (Cth)

   the ASIC is entitled to tender into evidence the making of such statements and rely upon that evidence for the purpose of this interlocutory application.

1. The ASIC, in default of having given notice under s79 of the Act, is not entitled to adduce into evidence pursuant to the Act, statements admissible against the third respondent if the conditions as to admissibility under s76 and s77 of the Act are otherwise satisfied.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 139 of 1998

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
APPLICANT

AND:

SINGAPORE LIASON PTY LTD
FIRST RESPONDENT

LANCE FREDERICK SHAW
ALSO KNOWN AS HASSAN MOHAMMADI
SECOND RESPONDENT

FAWZIAH RAHMAN
THIRD RESPONDENT

MATTHEW FERGUSON SHAW
FOURTH RESPONDENT

GRAEME ROSS KOVALEVSKY
FIFTH RESPONDENT

JOHN WILLIAM HOWARD
SIXTH RESPONDENT

BRIAN LUCAS PERRY
SEVENTH RESPONDENT

JUDGE:	COOPER J
DATE:	18/12/98
PLACE:	BRISBANE

REASONS FOR RULING

The applicant is the Australian Securities and Investments Commission (“the ASIC”). It seeks orders against the respondents, including interlocutory orders pending trial of the action, pursuant to s1324 or s1323 or s1114 of the Corporations Law. The question of interlocutory relief has been resolved in respect of all respondents other than the third respondent.

The ASIC seeks to tender, in support of its application for interlocutory relief, transcripts of the examination of a number of persons, including the third respondent, carried out pursuant to notices given under s19 of the Australian Securities and Investments Commission Act 1989 (Cth) (“the Act”). The examinations were carried out by Mr Rodney Peters, an officer of the ASIC. The transcripts are annexed to an affidavit of Mr Peters who deposes to the accuracy of the contents of each of the transcripts.

The admission into evidence of the evidence of Mr Peters as to the statements made and of the transcripts is opposed by the third respondent. The basis of the objection, so far as this ruling is concerned, is that the procedure specified in s79 of the Act has not been followed and that failure to follow the procedure prevents the statements made on the examinations being adduced into evidence. Section 79 is found in Division 9 of Part 3 of the Act. Part 3 is headed “Investigations and Information-Gathering”. Division 9 is headed “Evidentiary Use of Certain Material”.

The following sections of Division 9 are relevant to the present ruling :-

“76(1)A statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding unless:

(a)because of subsection 68(3), the statement is not admissible in evidence against the person in the proceeding;

(b)the statement is not relevant to the proceeding and the person objects to the admission of evidence of the statement;

(c)the statement is qualified or explained by some other statement made at the examination, evidence of the other statement is not tendered in the proceeding and the person objects to the admission of evidence of the first-mentioned statement;  or

(d)the statement discloses matter in respect of which the person could claim legal professional privilege in the proceeding if this subsection did not apply in relation to the statement, and the person objects to the admission of evidence of the statement.

(2)Subsection (1) applies in relation to a proceeding against a person even if it is heard together with a proceeding against another person.

(3)Where a written record of an examination of a person is signed by the person under subsection 24(2) or authenticated in any other prescribed manner, the record is, in a proceeding, prima facie evidence of the statements it records, but nothing in this Part limits or affects the admissibility in the proceeding of other evidence of statements made at the examination.

77.      Where direct evidence by a person (in this section called the ‘absent witness’) of a matter would be admissible in a proceeding, a statement that the absent witness made at an examination of the absent witness and that tends to establish that matter is admissible in the proceeding as evidence of that matter:

(a)if it appears to the court or tribunal that:

(i)the absent witness is dead or is unfit, because of physical or mental incapacity, to attend as a witness;

(ii)the absent witness is outside the State or Territory in which the proceeding is being heard and it is not reasonably practicable to secure his or her attendance;  or

(iii)all reasonable steps have been taken to find the absent witness but he or she cannot be found;  or

(b)if it does not so appear to the court or tribunal - unless another party to the proceeding requires the party tendering evidence of the statement to call the absent witness as a witness in the proceeding and the tendering party does not so call the absent witness.

78(1)This section applies where evidence of a statement made by a person at an examination of the person is admitted under section 77 in a proceeding.

(2)In deciding how much weight (if any) to give to the statement as evidence of a matter, regard shall be had to:

(a)how long after the matters to which it related the statement was made;

(b)any reason the person may have had for concealing or misrepresenting a material matter;  and

(c)any other circumstances from which it is reasonable to draw an inference about how accurate the statement is.

(3)If the person is not called as a witness in the proceeding:

(a)evidence that would, if the person had been so called, have been admissible in the proceeding for the purpose of destroying or supporting his or her credibility is so admissible;  and

(b)evidence is admissible to show that the statement is inconsistent with another statement that the person has made at any time.

(4)However, evidence of a matter is not admissible under this section if, had the person been called as a witness in the proceeding and denied the matter in cross-examination, evidence of the matter would not have been admissible if adduced by the cross-examining party.

79(1)A party (in this section called the ‘adducing party’) to a proceeding may, not less than 14 days before the first day of the hearing of the proceeding, give to another party to the proceeding written notice that the adducing party:

(a)will apply to have admitted in evidence in the proceeding specified statements made at an examination;  and

(b)for that purpose, will apply to have evidence of those statements admitted in the proceeding.

(2)A notice under subsection (1) shall set out, or be accompanied by writing that sets out, the specified statements.

(3)Within 14 days after a notice is given under subsection (1), the other party may give to the adducing party a written notice:

(a)stating that the other party objects to specified statements being admitted in evidence in the proceeding;  and

(b)specifies, in relation to each of those statements, the grounds of objection.

(4)The period prescribed by subsection (3) may be extended by the court or tribunal or by agreement between the parties concerned.

(5)On receiving a notice given under subsection (3), the adducing party shall give to the court or tribunal a copy of :

(a)the notice under subsection (1) and any writing that subsection (2) required to accompany that notice;  and

(b)the notice under subsection (3).

(6)Where subsection (5) is complied with, the court or tribunal may either:

(a)determine the objections as a preliminary point before the hearing of the proceeding begins;  or

(b)defer determination of the objections until the hearing.

(7)Where a notice has been given in accordance with subsections (1) and (2), the other party is not entitled to object at the hearing of the proceeding to a statement specified in the notice being admitted in evidence in the proceeding, unless:

(a)the other party has, in accordance with subsection (3), objected to the statement being so admitted;  or

(b)the court or tribunal gives the other party leave to object to the statement being so admitted.

.....

83.      Nothing in this Division renders evidence inadmissible in a proceeding in circumstances where it would have been admissible in that proceeding if this Division had not been enacted.”

The third respondent, by her counsel, submits that these sections form a statutory code for the admissibility and reception into evidence of statements made by a person examined (s76) or by another examinee other than the person against whom it is sought to use the statements (s77).

Failure to comply with the code, the third respondent submits, requires that the ASIC establish any matter which it seeks to prove against the third respondent by real evidence which speaks for itself as distinct from oral evidence which is brought into existence in response to an exercise of investigative power:  Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385 at 392; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 326; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 502. Section 83, the third respondent submits, preserves the admissibility of real evidence, that is evidence which speaks for itself, under the common law or some other statute notwithstanding the enactment of Division 9 of the Act.

Counsel for the ASIC, Ms O’Reilly SC, submits that s79 is merely facilitative and independent of the other provisions of the Division. Ms O’Reilly submits that s79 is available as a means of precluding objection to the tender of the statements on the hearing. Recourse to s79 is available, she submits, at the option of the adducing party. In any event, Ms O’Reilly submits, it is unnecessary to have regard to Division 9 because the statements are admissible under the general law and their admissibility is preserved by s83 of the Act.

In my opinion, Division 9 is a code complete in itself to facilitate the evidentiary use of statements made at examinations (as defined in s5 of the Act). Sections 76 and 77 are concerned with the admissibility of the statements subject to satisfaction or non-satisfaction of the circumstances prescribed in each section. Section 78 is concerned with the weight to be given to evidence of a statement made by a person and admitted under s77 in a proceeding.

The means by which the evidence which is otherwise admissible under either s76 or s77 is to be adduced in a proceeding, is provided by s79 of the Act. It requires that written notice be given not less than fourteen days before the first day of the hearing of the proceedings that :-

(a)an application will be made to have admitted into evidence in the proceedings specified statements made at an examination;  and

(b)for that purpose, the adducing party will apply to have evidence of those statements admitted in the proceedings.

That there is a requirement to apply to have such evidence admitted is clear from s79(1)(a) and (b) and s79(6).

It was submitted by counsel for the ASIC that such a construction would prevent the immediate use of any statements made on an examination and would postpone the use of the material until after the requisite notice has been given.  It is to be inferred from this submission that it is contended that such a result would seriously impair the ability of the ASIC to act immediately in discharge of its statutory functions if the circumstances required and that the legislature should not be presumed to have intended such a result.

In my view, Division 9 was intended to supplement the means available to adduce evidence of statements made in an examination as original evidence to prove the fact contained in the statement or to prove another fact in issue in the proceedings. However, to take advantage of the provisions, it is necessary to comply with the requirements of the Division. Otherwise, the ASIC must firstly look to the general law or some other statute to make the statements admissible against a person and secondly comply with the requisite rules of practice or procedure, whether at common law or under statute for adducing such evidence. The ASIC can always move immediately for interim or interlocutory relief as a consequence of material discovered on an examination conducted as part of an investigation. Indeed, that is what the ASIC contends on the present application; that the material is admissible on an interlocutory application by virtue of s75 of the Evidence Act 1995 (Cth) (“the Evidence Act”).

Although Division 9 provides an additional means of adducing evidence of statements made in an examination, it does not provide the only means or operate to render inadmissible such statements in all circumstances other than those provided in the Division. Section 83 operates to leave the admissibility of such statements to the general law of evidence.

To have evidence of the third respondent’s statements on her examination admitted into evidence against her, the ASIC must demonstrate that each of the statements made on the examination which it is sought to tender into evidence is relevant. If it is relevant within the meaning of s55(1) of the Evidence Act, it is admissible unless excluded for some other reason: s56(1). If it is not relevant, it is inadmissible: s56(2).

At present the whole of the transcript of her examination is annexed to the affidavit of Mr Peters.  In my view, only so much of the transcript as can be shown to be relevant to the points of claim is admissible.

The evidence of other examinees falls into a different category.

The evidence of others must firstly be shown to be relevant. That is, the parts of the transcript which it is sought to swear to the truth of and have admitted into evidence must be identified and be shown to be relevant to the existence of a fact in issue against the third respondent. The evidence of others as evidence as to the truth of the fact asserted in the statement is hearsay and is inadmissible (s59(1) of the Evidence Act) unless falling within an exception to the hearsay rule. The only exception sought to be relied upon is that contained in s75 of the Evidence Act.

In my opinion the ASIC is entitled, in these proceedings, to rely on evidence which would otherwise infringe the hearsay rule provided that the evidence is relevant and, if given personally in these proceedings by the person examined pursuant to s19 of the Act, would be admissible against the third respondent, and further that it does not contravene the opinion rule (s76 of the Evidence Act).

Unless the evidence is otherwise to be treated as inadmissible by the operation of some other provision of the Evidence Act or at common law, the ASIC, if it satisfies the requirements set out in the previous paragraph, is entitled to rely on the evidence of Mr Roberts with respect to the statements as contained in his several affidavits.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Ruling herein of the Honourable Justice Cooper

Associate:

Dated:             18 December 1998

Counsel for the Applicant:	E M O’Reilly SC with M K Stunden
Solicitor for the Applicant:	Australian Securities and Investments Commission
Counsel for the Third Respondent:	D O J North SC
Solicitor for the Third Respondent:	Adamson Bernays Kyle & Jones
Date of Hearing:	17 December 1998
Date of Ruling:	18 December 1998