Australian Trade Commission v Deputy President McMahon
[1997] FCA 626
•6 MARCH 1997
CATCHWORDS
Practice and Procedure - appeal from AAT - whether Tribunal made an error of law in refusing to hear ex‑parte an application for release from an implied undertaking as to the collateral use of certain documents used in proceedings - whether Tribunal failed to take into account matters which were relevant and took into account matters which were not - whether Tribunal failed to take into account the public interest in maintaining the secrecy of aspects of the criminal investigation process - whether Tribunal erred in holding that it may not be able to release a party from an implied undertaking
Export Market Development Grants Act 1974
Administrative Appeals Tribunal Act 1975
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247 at 270
McLeod v Repatriation Commission [1993] Admin Review 16
Director‑General of Social Services v Chaney (1980) 3 ALD 161
Re Environmental Images Pty Ltd v Australian Trade Commission (1996) 23 AAR 439
Crest Homes Plc v Marks [1987] AC 829
Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576
Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217
AUSTRALIAN TRADE COMMISSION v DEPUTY PRESIDENT McMAHON, comprising the General Administrative Division of the Administrative Appeals Tribunal
No. NG135 of 1997
CORAM:Lehane J
PLACE:Sydney
DATE:6 March 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION ) No. NG 135 of 1997
BETWEEN:AUSTRALIAN TRADE COMMISSION
Applicant
AND:DEPUTY PRESIDENT McMAHON,
comprising the General
Administrative Division of
the Administrative Appeals Tribunal
Respondent
CORAM:Lehane J
PLACE:Sydney
DATE:6 March 1997
MINUTE OF ORDERS
THE COURT ORDERS THAT:
The decision of the respondent dated 28 January 1997 is set aside.
The applicant has leave to use documents received by it in the proceedings before the Tribunal, referred to at the head of the decision, for the purpose of:
(i)an application for search warrants under the Crimes Act 1914; and
(ii)the conduct of investigations as to whether offences have occurred under laws of the Commonwealth.
Until further order:
(i)this application;
(ii)the reasons for decision of the Tribunal dated 28 January 1997; and
(iii)other documents revealing this application or the application before the Tribunal,
shall not be disclosed to persons other than persons making the application.
The applicant shall apply for this proceeding to be relisted a soon as practicable, and no later than 21 days, after the occurrence of the first of the following events:
(a)the execution of a search warrant obtained where the application for the warrant entailed use of information contained in documents received by the applicant in the proceeding in the Tribunal (a "warrant");
(b)the applicant becoming aware of the making of a decision that no application for a warrant will be made; and
(c)the applicant becoming aware of the refusal by a justice (or other proper person) of an application for the issue of a warrant.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION ) No. NG 135 of 1997
BETWEEN:AUSTRALIAN TRADE COMMISSION
Applicant
AND:DEPUTY PRESIDENT McMAHON,
comprising the General
Administrative Division of
the Administrative Appeals Tribunal
Respondent
CORAM:Lehane J
PLACE:Sydney
DATE:6 March 1997
REASONS FOR JUDGMENT
LEHANE J: This is an appeal which I have heard ex parte from a decision of the Administrative Appeals Tribunal (Deputy President McMahon). By the decision the Tribunal refused to hear, ex parte, an application by the applicant, the Australian Trade Commission (Austrade), to be released from any implied undertaking by which it might be bound not to use for collateral purposes four categories of documents:
(a)documents tendered as exhibits in certain proceedings before the Tribunal in which Austrade was the respondent;
(b)the transcript of those proceedings;
(c)witness statements served on Austrade as respondent in those proceedings, but not tendered in evidence;
(d)certain documents produced to the Tribunal on summons in those proceedings but not tendered in evidence.
Background facts
Various companies in a corporate group applied to Austrade for grants under the Export Market Development Grants Act 1974 (the EMDG Act). Following earlier proceedings in the Tribunal and the Court, certain of those applications were granted, others refused. Applications for review of the refusals were made to the Tribunal. After some evidence had been given and certain submissions had been made in the review proceedings, the applications for review were "discontinued or withdrawn"; as a result, the Tribunal was taken to have dismissed the applications without proceeding to review Austrade's decisions: Administrative Appeals Tribunal Act 1975 (the AAT Act) subs 42A(1B).
In the review proceedings certain documents were tendered and other documents produced on summons, both by the corporations concerned and by their auditors, which, taken together with evidence in the review proceedings, led Austrade (and particularly a member of the Australian Federal Police seconded to Austrade as National Manager of the Special Investigations Unit, Grants) to suspect that those involved in applying for the grants may have committed offences under the EMDG Act. There are references in certain documents produced on summons to other documents which, it is believed, might be relevant to the question whether offences have been committed. Austrade wishes to approach the Australian Federal Police with a view to applying to a justice for the issue of search warrants to be executed against both the corporations and the auditors; Austrade fears, however, that because such an approach would be based on information contained in documents produced in the review proceedings and on evidence in those proceedings the approach would involve a breach of the so called Harman implied undertaking (Harman v Secretary of State for the Home Department [1983] 1 AC 280, discussed and applied in cases such as Ainsworth v Hanrahan (1991) 25 NSWLR 155 and Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited (1995) 57 FCR 360).
The respondent Deputy President appeared to submit to such order as the Court might make, except as to costs. No other party was notified of the application to the Court, or appeared before me.
Ex parte application to Tribunal
Hence Austrade's application to the Tribunal for a release from the implied undertaking. the application was made ex parte on the footing that the same considerations of public policy which justify the issue of warrants on ex parte application justified equally an ex parte application for a release from the implied undertaking in order that information might be given to the police on the basis of which, in turn, application might be made for the issue of search warrants.
Reasons
The decision of the Tribunal was that the request to have the substantive application (viz the application for release from the implied undertaking) heard ex parte was refused. Reasons for that decision were given by the Deputy President on 28 January 1997. The reasons refer to the importance of the "quality of openness" of review by the Tribunal: the Deputy President quoted the well known passage in the judgment of Brennan J in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247 at 270. He referred also to some exceptions to the general rule of openness, most of which were founded in express and implied legislative provisions. He pointed out that in cases where hearings are regularly held in private, for example in cases involving taxation objections, that is done for the benefit of the applicants. Provisions authorising that course formed no basis for excluding an applicant from participation in proceedings affecting his or her interests. The Deputy President quoted a further passage from the reasons of Brennan J in Pochi, where his Honour expressed (at 273) the view that:
it is necessary to show that the information is of such importance and cogency that justice is more likely to be done by receiving the information in confidence, and denying the party access to it, than by refusing an order to exclude the party. This criterion is not easy to satisfy though it is possible to do so. The criterion is not easy to satisfy because an applicant's interest in a hearing fair to him can be over‑ridden only by another and superior interest, and then only when reconciliation of the two interests is impossible. But the criterion may be satisfied when a public interest in confidentiality clearly appears ...
The Deputy President continued:
If it is a grave step to exclude a party from a hearing, how much more serious must it be to exclude that party even from notice that a hearing is to take place? It may well be that in applications of this nature parties affected have a legitimate expectation of procedural protection arising from the very nature of the application, in the manner discussed in Kioa & Ors v Minister for Immigration and Ethnic Affairs & Anor (1985) 62 ALR 321 at 345. The existence of such a legitimate expectation, however, is a matter for a court to determine. I merely turn to the test propounded by Brennan J and the criterion referred to in the above passage.
The Deputy President then proceeded to consider whether urgency required that the matter be dealt with ex parte, and concluded it did not; to conclude that the existence of a right of appeal in the event of an adverse finding was no argument for excluding a party from the initial process; and to refer to the importance of a party's right to cross‑examine and to make submissions.
The Deputy President then set out, by way of summary, six reasons for his conclusion that no ground appeared for departing from what he described as well established procedures involving notice to parties affected:
23.The first reason deals with the nature of the application itself. So far as I am aware, there is no judicial authority to support the proposition that there is an implied undertaking to this Tribunal not to use for unrelated purposes documents acquired during Tribunal proceedings. The only consideration of the question of which I am aware occurs in my reasons in Environmental Images. The whole concept of implied undertakings has been developed from case law and clearly has been accepted as appropriate for curial proceedings. Whether such a concept should be recognised in administrative review and, if so, whether a Tribunal has power to release any such undertaking, are matters upon which there has been no authoritative pronouncement. Whilst judicial activism can be accepted as an accepted method of rule making, no such liberty (quite properly) should be allowed to administrative activism. This being so, a person affected by procedures based upon an uncertain premise should be given an opportunity of being heard.
24.My second reason arises from the views I expressed in Environmental Images based upon what I perceived were authoritative decisions for courts. Once a document has been admitted into evidence, it seems to me that permission to use it for legitimate collateral purposes follows automatically. Except where a court proceeds for "more abundant caution" it would seem that there is no requirement to grant leave in those circumstances. In the present case the two exhibits and the whole of the transcript of evidence given orally fall into that category. It would be unjustifiable, in my view, to depart from the ordinary procedures of natural justice where the object of the exercise may not even be legally necessary.
25.My third reason deals with the facts deposed to in the affidavit accompanying the present application. Whilst I make no comment as to whether the allegations, if established, would amount to criminal conduct, I can say that arguably the facts alleged are explicable with reference to circumstances not involving criminal intent. I can also say that allegations made in the affidavit appear to me to be less serious than those made in the affidavit considered in Environmental Images. That latter application was not heard ex parte nor was there any application on the part of the same respondent for any such procedure to be adopted.
26.My fourth reason concerns the fears expressed by the investigator. The applicants are a group of publicly listed companies. The auditors referred to are one of the six big firms. There is no evidence of any nature of a threat by any of the applicants or their officers or associates that evidence will be tampered with or destroyed. There is no apparent situation which can be met only by an abandonment of a fundamental rule of natural justice. The investigator expressed some concern in the affidavit for documents that have not been produced and expressed the belief that there may have been some concealment. There is no evidence to support this belief that is before me but in any event in proceedings of the present nature, I am concerned only with implied undertakings arising out of the production of documents to this Tribunal.
27.My fifth reason for not departing from the ordinary procedures is that other remedies are available to the respondent. If there is evidence to justify the issue of a search warrant then it is appropriate that the respondent should pursue this course rather than apply to this Tribunal. If there is no such evidence then that may be a reason why the substantive application may be denied. If there are grounds to support an action by the Commonwealth to recover moneys paid by way of civil action, then all the ancillary remedies of discovery, inspection and other procedures of the courts may be availed of by the respondent. This brings me to my final reason.
28.My sixth reason is that this Tribunal should not be seen to be a secretive mechanism of criminal law enforcement. There is a public interest in the maintenance of confidence and respect for the Tribunal and in the observance of its reviews and decisions. This element will be endangered if the Tribunal departs from its seminal duty to conduct its proceedings openly, unless there are overwhelming reasons why it should not do so in a particular case. This is not one of those cases. Without knowing the facts of the other cases said to be pending I, of course cannot say whether they would justify the Tribunal in departing from its public duty as prescribed in the AAT Act. However, I can only echo the words of Brennan J that the criterion will not be easy to satisfy.
The present application
The application before me takes the form of an application for an order of review, an application pursuant to s 39B of the Judiciary Act 1903 and also an appeal under s 44 of the AAT Act. Mr Walker SC, who appeared with Mr Comans for Austrade, invited me to consider the application primarily as an appeal under s 44 of the AAT Act. He submitted that the Tribunal had made a "decision"; it was not in any sense a preliminary decision which might be reversed at a later hearing (McLeod v Repatriation Commission [1993] Admin Review 16). What was before the Tribunal was not an application for review; the decision was "the effective decision or determination of the application" which was before it (Director‑General of Social Services v Chaney (1980) 3 ALD 161). As a simple matter of construction, it seems to me clear that the ex parte application was a proceeding before the Tribunal and the decision now in question was a decision of the Tribunal in that proceeding. I think it is appropriate, therefore, to proceed on the footing that this is an appeal under s 44 of the AAT Act.
Mr Walker was content to proceed on the footing that the Harman principle applies to proceedings before the Tribunal (see Re Environmental Images Pty Ltd v Australian Trade Commission (1996) 23 AAR 439). That being so, although it may very well be that Austrade is not subject to any implied undertaking in relation to evidence given in the review proceedings (including documents tendered in evidence) that undertaking does prohibit the use, for collateral purposes, of both witness statements served but not tendered and documents produced on summons and not tendered, in the absence of a release. Mr Walker suggested that there might be a distinction between witness statements voluntarily prepared and filed and documents produced under compulsion, but again that is a matter which it is inappropriate to pursue now.
Mr Walker submitted that the reasons given by the Tribunal revealed a number of errors of law, so that the decision should be set aside and consequential orders made under subs 44(4). The errors involved principally failing to take into account matters which were relevant and taking account of matters which were not. Thus, it was submitted, the discussion of the general principle of openness, and the exceptions to that principle, related to, and relied solely upon authorities concerning, proceedings, inter partes, for review of a decision. These proceedings were of a different character from the present, requiring different considerations to be taken into account. The Deputy President, it was said, failed to take account of the important public interest in maintaining the secrecy of aspects of the criminal investigation process, including particularly the process of applying for the issue of a warrant and steps leading up to such an application. If there is a public interest that investigating authorities should be able to obtain a warrant on ex parte application, so equally it must be in the public interest that, if leave of a Tribunal or Court is required in order that information which an authority has may be used for the purpose of applying for the issue of a warrant, an application for such leave ought equally to be entertained ex parte and without notice. So, it was submitted, the reference to a legitimate expectation was inapt in a case such as the present.
The following submissions were made concerning the six reasons. As for the first reason, the only matter on which it appears that the corporations or auditors concerned would have an interest in arguing to the contrary of that which Austrade submits or is prepared to assume, is the question whether, if there is an implied undertaking in relation to proceedings before the Tribunal, the Tribunal has power to release such an undertaking. But, assuming there to be an undertaking, it must be an undertaking to the Tribunal and there is no reason to suppose that the Tribunal could not release it. The second reason involves error in that it reaches a conclusion, apparently in relation to all four categories of the documents in question, by reference to considerations applicable to two only of those categories. The third and fourth reasons are irrelevant: the question is whether, using among other things information contained in the documents, those responsible for investigating possible offences can properly obtain a warrant: matters of the weight of evidence do not otherwise matter, nor does the identity of parties whose affairs or conduct may be investigated. The fifth reason assumes that Austrade is in a position to arrange for the issue of a warrant: but the basis of the application is that Austrade is in a position to do so only if it can use, for the purpose, information obtained from the documents. The criticism of the sixth reason has already been mentioned: it is that it fails to take account of the fact that the proceeding before the Tribunal was not an application for review of a decision but a quite different kind of application, requiring different considerations to be taken into account.
Austrade does not merely seek that the matter be remitted to the Tribunal for further consideration. It seeks orders, under subs 44(4) of the AAT Act, granting Austrade leave to use the documents the purpose of investigating possible criminal conduct. Mr Walker submits positively that where a party to proceedings in a court or tribunal seeks leave to use information acquired in the course of the proceedings for the purpose of criminal investigations, particularly as the basis of an application for the issue of a warrant, an application for leave ought to be dealt with ex parte and without notice and leave should, ordinarily at least, be granted: at least where the party, or its privy, is an authority or person charged with the investigation of possible criminal conduct of the particular kind in question. As will appear, in my view that qualification is important.
Reasons and conclusion
In my view Mr Walker's submissions are soundly based, particularly his criticisms of the Tribunal's reasons which I have already sufficiently described. The general principle is, no doubt, that a release of the implied undertaking will be given only if "special circumstances" are established: Crest Homes Plc v Marks [1987] AC 829. Where an application for release is decided in contested proceedings, it seems that "special circumstances" will fairly readily be found where it is established that the use of documents discovered in a proceeding is reasonably required for the purpose of doing justice between the parties in other proceedings: see, e.g., Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217. Where an authority or person charged with the investigation of possible criminal conduct is a party to a proceeding and obtains, through for example documents discovered in the proceeding, information suggesting that criminal conduct, of a kind which the authority or person is charged to investigate, the public interest seems to me to require, in most cases at least, that permission be given to use the information for that purpose. Once that step is taken, it seems to me difficult to resist the next step: if the public interest accepts the necessity of secrecy in the conduct of criminal investigation, particularly as to the issue of warrants, an authority ought, in a proper case, to be able on ex parte application, without notice, to obtain leave to use for that purpose information the subject of a Harman implied undertaking.
I confess to reaching that conclusion with some hesitation. It is easy to sympathise, with respect, with the considerations which led the Deputy President to refuse to proceed ex parte. Authority is not lacking for the proposition that it is the essence of our system that justice be administered openly. Ex parte relief is almost invariably granted only for a limited period, in order to protect the status quo. That is so even in the case of the typical Anton Piller order, similar in some respects to what is sought here. While, as I have said, I accept that this is a proper case for a release on an ex parte application, and I shall make orders accordingly, it is important in my view that secrecy in relation to these proceedings be imposed for no longer than is necessary. It is undesirable that the orders I propose to make, and these reasons, not be published in the near future, particularly in circumstances where, as I have been told, there are number of other cases in which similar questions arise. No doubt the persons whose conduct Austrade seeks to investigate will, if warrants are obtained and executed, be able to take proceedings by which my decision can be tested, though obviously somewhat after the event. Plainly it is undesirable that they be denied that opportunity to any greater extent, or for any longer time, than is necessary. To some extent the fourth of the orders which follow will meet that requirement. Additionally, however, it is appropriate that the matter be relisted before me within a relevantly short time (as to which I shall hear submissions) so that the need for the continuation of the third of the orders which I shall make may be further considered.
In the meantime the orders of the Court are as follows:
The decision of the respondent dated 28 January 1997 is set aside.
The applicant has leave to use documents received by it in the proceedings before the Tribunal, referred to at the head of the decision, for the purpose of:
(i)an application for search warrants under the Crimes Act 1914; and
(ii)the conduct of investigations as to whether offences have occurred under laws of the Commonwealth.
Until further order:
(i)this application;
(ii)the reasons for decision of the Tribunal dated 28 January 1997; and
(iii)other documents revealing this application or the application before the Tribunal,
shall not be disclosed to persons other than persons making the application.
The applicant shall apply for this proceeding to be relisted a soon as practicable, and no later than 21 days, after the occurrence of the first of the following events:
(a)the execution of a search warrant obtained where the application for the warrant entailed use of information contained in documents received by the applicant in the proceeding in the Tribunal (a "warrant");
(b)the applicant becoming aware of the making of a decision that no application for a warrant will be made; and
(c)the applicant becoming aware of the refusal by a justice (or other proper person) of an application for the issue of a warrant.
I certify that this and the preceding 13 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.
Associate:
Dated: 6 March 1997
Heard: 6 March 1997
Place: Sydney
Decision: 6 March 1997
Appearances: Mr B W Walker SC and Mr P Comans of counsel instructed by Australian Government Solicitor appeared for the applicant.
Mr A Marcus of the Australian Government Solicitor appeared for the respondent to submit to any such orders as the Court might make.
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