Bazzo v Kirman
[2020] WASCA 43
•7 APRIL 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BAZZO -v- KIRMAN [2020] WASCA 43
CORAM: BUSS P
MITCHELL JA
BEECH JA
HEARD: 3 MARCH 2020
DELIVERED : 7 APRIL 2020
FILE NO/S: CACV 38 of 2019
BETWEEN: TINA MICHELLE BAZZO
Appellant
AND
ROBERT MICHAEL KIRMAN joint and several liquidators of GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 099 191 714)
First Respondent
WILLIAM JAMES HARRIS joint and several liquidators of GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 099 191 714)
Second Respondent
FILE NO/S: CACV 39 of 2019
BETWEEN: ALLEN BRUCE CARATTI
Appellant
AND
ROBERT MICHAEL KIRMAN as liquidator of ACN 142 745 337 PTY LTD (IN LIQUIDATION) ACN 142 745 337
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: KENNETH MARTIN J
Citation: ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS JOINT AND SEVERAL LIQUIDATORS OF GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQ) -v- BAZZO [2019] WASC 45
File Number : COR 104 of 2018
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: KENNETH MARTIN J
Citation: ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS JOINT AND SEVERAL LIQUIDATORS OF GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQ) -v- BAZZO [2019] WASC 45
File Number : COR 111 of 2018
Catchwords:
Bankruptcy and insolvency - Examination by liquidators as to the examinable affairs of an insolvent corporation - Where directors summonsed for examination are the targets of an investigation by the Australian Federal Police and Australian Taxation Office and are suspected of having committed serious indictable offences - Where primary judge refused to order that the examinations be held in private on the ground that he did not consider that, by reason of special circumstances, it was desirable to hold the examinations in private - Whether it was open to the primary judge to fail to be satisfied that, by reason of special circumstances, it was desirable to hold the examinations in private
Legislation:
Corporations Act 2001 (Cth), s 596A, s 596B, s 596F, s 597
Result:
Leave to appeal refused
Appeals dismissed
Category: B
Representation:
CACV 38 of 2019
Counsel:
| Appellant | : | JT Schoombee and AP Rumsley |
| First Respondent | : | JE Scovell and CM Guy |
| Second Respondent | : | JE Scovell and CM Guy |
Solicitors:
| Appellant | : | Alan Rumsley |
| First Respondent | : | HWL Ebsworth Lawyers |
| Second Respondent | : | HWL Ebsworth Lawyers |
CACV 39 of 2019
Counsel:
| Appellant | : | JT Schoombee and AP Rumsley |
| Respondent | : | JE Scovell and CM Guy |
Solicitors:
| Appellant | : | Alan Rumsley |
| Respondent | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Do Young Lee v The Queen [2014] HCA 20; (2014) 253 CLR 455.
Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176.
Friedrich v Herald and Weekly Times Ltd [1990] VR 995.
Hamilton v Oades (1989) 166 CLR 486.
In re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 604.
In re Plutus Payroll Australia Pty Ltd (in liq) [2020] NSWSC 46.
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374.
Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 196.
LFG v The State of Western Australia [2015] WASCA 88; (2015) 48 WAR 178.
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66.
Palmer v Ayres [2017] HCA 5; (2017) 259 CLR 478.
R v Independent Broad-based Anti-corruption Commissioner [2016] HCA 8; (2016) 256 CLR 459.
Re Pan Pharmaceuticals Ltd [2003] NSWSC 1204; (2003) 176 FLR 341.
Strickland (a pseudonym) v Director of Public Prosecutions (Cth) [2018] HCA 53; (2018) 93 ALJR 1.
The State of Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40.
Trans Petroleum v White Gum Petroleum [2012] WASCA 165; (2012) 268 FLR 433.
Wilson v Metaxas [1989] WAR 285.
X7 v Australian Crime Commission [2013] HCA 29; (2013) 248 CLR 92.
JUDGMENT OF THE COURT:
Summary
The respondents (liquidators) are the joint liquidators of GH1 Pty Ltd (formerly called Gucce Holdings Pty Ltd). Mr Robert Kirman is the liquidator of ACN 142 745 337 Pty Ltd (formerly called Mammoth Civil Pty Ltd). It will be convenient to refer to those companies as Gucce Holdings and Mammoth Civil in these reasons. The appellant in CACV 38 of 2019, Ms Tina Bazzo, is the sole director of Gucce Holdings. The appellant in CACV 39 of 2019, Mr Allen Caratti, is the sole director of Mammoth Civil.
On 30 July 2018, summonses for examination were issued for Mr Caratti and Ms Bazzo to attend before the Supreme Court. The summonses provided for Mr Caratti and Ms Bazzo to be examined about the examinable affairs of Mammoth Civil and Gucce Holdings respectively. The summonses also required Mr Caratti and Ms Bazzo to produce the books and records of the relevant company which had not already been provided to the liquidator. The summonses were issued on the application of the liquidators under s 596A of the Corporations Act 2001 (Cth) (Act).
The examinations were adjourned when the appellants applied for orders which included orders under s 597(4) of the Act that the examinations be held in private. Section 597(4) provides that an examination is to be held in public except to such extent (if any) as the Court considers that, by reason of special circumstances, it is desirable to hold the examination in private. The basis for the appellants' applications for private examinations concerned a long running joint criminal investigation by the Australian Taxation Office (ATO) and the Australian Federal Police (AFP) targeting the appellants and companies associated with them. There is evidence that the investigators suspect Mr Caratti and Ms Bazzo of having committed serious offences against the Criminal Code (Cth) and the Taxation Administration Act 1953 (Cth).
On 1 March 2019, the primary judge determined Mr Caratti's application and Ms Bazzo's appeal from a registrar's refusal to make the orders sought by her application. The primary judge dismissed Mr Caratti's application and Ms Bazzo's appeal essentially on the ground that he was not persuaded that it was desirable, by reason of special circumstances, for their examinations to be held in private. The appellants now appeal against the primary judge's orders.
For the following reasons, none of the grounds are established. Leave to appeal should be refused in both appeals and the appeals should be dismissed.
Statutory provisions
Part 5.9 of the Act contains provisions for examining a person about a corporation.
Sections 596A and 596B make provision for the court to summon a person for examination about a corporation's examinable affairs on the application of an 'eligible applicant'. An eligible applicant is defined to mean:
eligible applicant, in relation to a corporation, means:
(a)ASIC; or
(b)a liquidator or provisional liquidator of the corporation; or
(c)an administrator of the corporation; or
(d)an administrator of a deed of company arrangement executed by the corporation; or
(e)a person authorised in writing by ASIC to make:
(i)applications under the Division of Part 5.9 in which the expression occurs; or
(ii)such an application in relation to the corporation.
The respondents, as the liquidators of Mammoth Civil and Gucce Holdings, fall within the definition of 'eligible applicant' for the purposes of pt 5.9 of the Act.
The issue of a summons under s 596A is mandatory where the court is satisfied that the person to be examined is an officer or provisional liquidator of the corporation, or was such an officer or provisional liquidator in a defined period. The issue of a summons is in the discretion of the court under s 596B where the court is satisfied that the person to be examined:
(i) has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation; or
(ii)may be able to give information about examinable affairs of the corporation.
Section 9 of the Act defines the 'examinable affairs' of a corporation in the following terms:
examinable affairs, in relation to a corporation means:
(a)the promotion, formation, management, administration or winding up of the corporation; or
(b)any other affairs of the corporation (including anything that is included in the corporation’s affairs because of section 53); or
(c)the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation or to anything that is included in the corporation’s examinable affairs because of paragraph (a) or (b).
Section 53 of the Act identifies a very broad range of the 'affairs of a body corporate' for the purposes of the definition of 'examinable affairs'.
Under s 596D(2) of the Act, a summons to a person under s 596A or s 596B may require the person to produce at the examination specified books that:
(a)are in the person's possession; and
(b)relate to the corporation or to any of its examinable affairs.
Section 596E of the Act generally provides that, if the court summons a person for examination, the person who applied for the summons must give written notice of the examination to as many of the corporation's creditors as reasonably practicable; and each eligible applicant.
Section 596F of the Act provides:
(1)Subject to section 597, the Court may at any time give one or more of the following:
(a)a direction about the matters to be inquired into at an examination;
(b)a direction about the procedure to be followed at an examination;
(c)a direction about who may be present at an examination while it is being held in private;
(d)a direction that a person be excluded from an examination, even while it is being held in public;
(e) a direction about access to records of the examination;
(f)a direction prohibiting publication or communication of information about the examination (including questions asked, and answers given, at the examination);
(g)a direction that a document that relates to the examination and was created at the examination be destroyed.
(2)The Court may give a direction under paragraph (1)(e), (f) or (g) in relation to all or part of an examination even if the examination, or that part, was held in public.
(3)A person must not contravene a direction under subsection (1).
Section 597(4) of the Act provides:
An examination is to be held in public except to such extent (if any) as the Court considers that, by reason of special circumstances, it is desirable to hold the examination in private.
Section 597(5A) of the Act provides for ASIC or any other eligible applicant to take part in an examination, and be represented by a lawyer or agent authorised in writing for that purpose. Section 597(5B) provides:
The Court may put, or allow to be put, to a person being examined such questions about the corporation or any of its examinable affairs as the Court thinks appropriate.
Section 597(6) and s 597(6A) in effect provide that a person who is summoned must not intentionally or recklessly fail to attend the examination unless the person has a reasonable excuse. Section 597(7) of the Act provides:
A person who attends before the Court for examination must not:
(a)without reasonable excuse, refuse or fail to take an oath or make an affirmation; or
(b)without reasonable excuse, refuse or fail to answer a question that the Court directs him or her to answer; or
(c)make a statement that is false or misleading in a material particular; or
(d)without reasonable excuse, refuse or fail to produce books that the summons requires him or her to produce.
Section 597(12) and s 597(12A) of the Act deal with, and override, the common law privilege against self-incrimination. Section 597(12) provides:
A person is not excused from answering a question put to the person at an examination on the ground that the answer might tend to incriminate the person or make the person liable to a penalty.
Under s 597(12A):
Where:
(a)before answering a question put to a person (other than a body corporate) at an examination, the person claims that the answer might tend to incriminate the person or make the person liable to a penalty; and
(b)the answer might in fact tend to incriminate the person or make the person so liable;
the answer is not admissible in evidence against the person in:
(c)a criminal proceeding; or
(d)a proceeding for the imposition of a penalty;
other than a proceeding under this section, or any other proceeding in respect of the falsity of the answer.
Section 597(13) - (14A) of the Act deal with the making of a written record of the examination, and provide:
(13)The Court may order the questions put to a person and the answers given by him or her at an examination to be recorded in writing and may require him or her to sign that written record.
(14)Subject to subsection (12A), any written record of an examination so signed by a person, or any transcript of an examination of a person that is authenticated as provided by the rules, may be used in evidence in any legal proceedings against the person.
(14A)A written record made under subsection (13):
(a)is to be open for inspection, without fee, by:
(i)the person who applied for the examination; or
(ii)an officer of the corporation; or
(iii)a creditor of the corporation; and
(b)is to be open for inspection by anyone else on paying the prescribed fee.
Under s 597(16) of the Act:
A person ordered to attend before the Court or another court for examination under this Division may, at his or her own expense, employ a solicitor, or a solicitor and counsel, and the solicitor or counsel, as the case may be, may put to the person such questions as the Court, or the other court, as the case may be, considers just for the purpose of enabling the person to explain or qualify any answers or evidence given by the person.
Section 1311(1) of the Act provides that, subject to presently immaterial exceptions:
A person who:
(a)does an act or thing that the person is forbidden to do by or under a provision of this Act; or
(b)does not do an act or thing that the person is required or directed to do by or under a provision of this Act; or
(c)otherwise contravenes a provision of this Act;
is guilty of an offence by virtue of this subsection, unless that or another provision of this Act provides that the person:
(d)is guilty of an offence; or
(e)is not guilty of an offence.
The operation of pt 5.9 of the Act
A number of matters may be noted about the structure of pt 5.9 of the Act.
First, the issue of the summons is mandatory where the examinee is, or was during the relevant time, an officer or provisional liquidator of the corporation. However, the general conduct of the examination is subject to the control of the court in the exercise of the powers conferred by pt 5.9 of the Act. These include giving directions about the matters to be inquired into,[1] who may be present at or excluded from the examination,[2] and the appropriateness of questions asked of an examinee.[3] The court is also empowered to adjourn the examination from time to time.[4]
[1] Section 596F(1)(a) of the Act.
[2] Section 596F(1)(c) and (d) of the Act.
[3] Section 597(5B) of the Act.
[4] Section 597(17) of the Act.
As was noted by the plurality in Palmer v Ayres,[5] in the course of upholding the validity of s 596A of the Act:
Moreover, once a summons order is made, the power to examine the examinee (here, each former director) is and remains subject to the court’s control. The court has the duty and ability to control the questions to be put to the examinee. The court can set aside a summons order if it thinks that it should not have been made on the grounds that it was an abuse of process or for other reasons. In any event, the court can also order costs against either an applicant for the summons or a person who took part in the examination. (citation omitted)
[5] Palmer v Ayres [2017] HCA 5; (2017) 259 CLR 478 [35].
The fact that a court presides over an examination under pt 5.9 of the Act is significant. The High Court has recognised the important difference between a compulsory examination supervised by a court and one conducted by a member of the executive.[6] The ambit of the court's powers of direction in relation to an examination under s 541 of the Companies Code, a statutory predecessor to pt 5.9 of the Act, were summarised by Mason CJ in Hamilton v Oades,[7] in terms which remain relevant under the current Act:
The court retains its power to give directions and to restrain questions in cases where the examination is being conducted for an improper purpose or constitutes an abuse of process. Thus if a liquidator were to conduct an examination directed to compel the examinee to disclose defences or to give pre-trial discovery, or to establish guilt, this examination may be restrained as an abuse of process. …
Again, the inherent powers of the court are retained and the duty of the court to ensure the proper administration of justice may require that orders be made of types other than those which restore the privilege against self-incrimination or which serve to defeat the purposes of the section. For example, an examination may need to be held in private, or the publication of names or evidence restricted. Or it may be that the court in conducting the examination may feel it necessary, in accordance with the statutory purpose, not to permit a particular question to be asked which would prejudice the examinee's fair trial. But the types of questions which may warrant such a course should not be predicted by a court in advance of their being asked. (emphasis added) (citations omitted).
[6] X7 v Australian Crime Commission [2013] HCA 29; (2013) 248 CLR 92 [50], [140].
[7] Hamilton v Oades (1989) 166 CLR 486, 498 - 499.
Secondly, pt 5.9 expressly contemplates that examinees may be asked about their own conduct which may involve the commission of an offence. One of the grounds which activates the court's discretion to summon a person for examination under s 596B(1)(b)(i) is the court's satisfaction that the person 'has been … guilty of misconduct in relation to the corporation'. Misconduct is defined to include 'fraud, negligence, default, breach of trust and breach of duty' (emphasis added).[8] The reference to breach of duty would include breaches of the statutory duties created by the Act, some of which create criminal offences (for example, s 184). While s 596B is generally directed to the examination of persons other than officers of the corporation, the question of whether an officer of a corporation had engaged in misconduct would clearly form part of the 'examinable affairs' of the corporation.
[8] Section 9 of the Act.
In Hamilton,[9] Mason CJ identified two purposes of a liquidators' examination under the s 541 of the Companies Code:
There are the two important public purposes that the examination is designed to serve. One is to enable the liquidator to gather information which will assist him in the winding up; that involves protecting the interests of creditors. The other is to enable evidence and information to be obtained to support the bringing of criminal charges in connexion with the company's affairs. (citation omitted)
Those observations reflect the historic purposes of compulsory examinations in bankruptcy and insolvency, which were summarised by Kiefel J in Lee v NSW Crime Commission.[10] They remain pertinent under the current provisions in pt 5.9 of the Act, and are consistent with the purpose of the current provisions recognised by the High Court in Palmer.[11]
[9] Hamilton (496).
[10] Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 196 [243] - [248].
[11] Palmer [30] - [31].
Thirdly, the persons who may ask questions about that conduct include ASIC and its authorised officers. ASIC, of course, has the statutory functions of investigating and prosecuting offences against the corporations legislation.[12] It is apparent that one purpose for which an examination may legitimately be conducted is for ASIC to investigate whether persons have committed offences against the Act.
[12] Sections 13 and 49 of the Australian Securities and Investments Commission Act 2001 (Cth).
Fourthly, the privilege against self-incrimination is expressly abrogated by s 597(12) of the Act. The protection offered by the Act is to make answers given by an examinee generally inadmissible as evidence in criminal proceedings against the examinee, where privilege is properly claimed.[13] However, the Act does not preclude use of an incriminating answer to obtain other derivative evidence which may be admissible in a prosecution of an examinee, or to otherwise assist a prosecutor in proving the prosecution case. The conduct of an examination which impinges on the right to silence is expressly authorised by the Act. Indeed, the statutory purpose of facilitating investigations into criminal conduct, discussed above, comprehends an examination to obtain information which may be used in the investigation and prosecution of criminal offences. Where privilege against self-incrimination is properly claimed, answers may not be used directly in criminal proceedings against the examinee. However, derivative use of the information in an investigation is entirely within the ambit of the provision.
[13] Section 597(12A) of the Act.
The following observations of Mason CJ in Hamilton, in relation to s 541 of the Companies Code, also remain apposite:[14]
Of course the section gives no protection to the witness against the use in criminal proceedings of derivative evidence, i.e., evidence which is obtained from other sources in consequence of answers given by the witness in his examination. … [B]y enacting s 541 without providing such specific protection, Parliament has made its legislative judgment that such action is not required and has limited specific protection to the possible consequences of direct use in evidence of the answers of the witness, thereby guarding against the possibility that the witness will convict himself out of his own mouth - the principal matter to which the privilege [against self-incrimination] is directed. Thus the legislative resolution of the competition between public and private interest is to provide for a compulsory examination and to give specific protection in relation to the principal matter covered by the privilege but not otherwise, except in so far as a judge, in the exercise of a wide statutory discretion, may see fit in the particular circumstances of a case to give directions as to the matters to be inquired into. (emphasis added)
His Honour noted that the exercise of that statutory discretion was a difficult task, which required the judge to take account of competing private and public interests, including the public purposes of the examination discussed above. Mason CJ also observed:[15]
In the light of the statutory provisions and the public purposes which I have outlined it would be going too far altogether to view the existence of the discretion as requiring ordinarily the giving of directions which will protect the witness from the consequences of abrogation of the privilege in so far as they include the derivative use of the answers of the witness. To give such directions as a matter of course would be to frustrate the statutory purpose.
[14] Hamilton (496).
[15] Hamilton (497).
Fifthly, the court has the power to give directions about access to records of the examination, to prohibit the publication or communication of information about the examination, and to direct that documents relating to and created by the examination be destroyed.[16] These powers may be exercised even if the examination is held in public.[17] However, these powers are expressly conferred subject to s 597, which makes provision for public inspection of written records of questions put to an examinee, and the examinee's answers to those questions.[18] It is unnecessary to further consider the interaction between these aspects of s 596F and s 597 of the Act.
[16] Section 596F(1)(e) - (g) of the Act.
[17] Section 596F(2) of the Act.
[18] Section 597(13) - (14A) of the Act.
Sixthly, despite the above features of the examination, the policy of the Act is that examinations are generally to be held in public. The exception operates only to the extent that the court considers that, by reason of special circumstances, it is desirable to hold the examination in private.
The purpose of ordinarily requiring public examinations of officers of insolvent corporations by liquidators investigating fraudulent conduct was considered by the Full Court of the Supreme Court of Victoria in Friedrich v Herald and Weekly Times Ltd.[19] Friedrich was also decided under s 541 of the Companies Code. After referring to the history of provisions of this kind, the court observed:[20]
There can be little doubt, therefore, that an examination in public, in contrast to one in private, is seen as the norm under the present legislation. One may venture some opinions as to why this is so. The legislature must have seen it to be desirable that, whenever an examination is ordered, it should be given as much publicity as the matter deserves. Since no dispute is resolved upon the hearing of an examination, the benefit must be seen in the general publication of the proceedings, whether by press, radio, television or by word of mouth. Not only might that lead to the possibility of further information being provided from other sources to the liquidator or other person in control of the company, but the risk that improper activities of company officers might thereby be spread abroad may have been thought as some form of deterrence to them. One may doubt that the more thick skinned of the company 'sharks' of this world would be especially conscious of the risk of examination, but at least the possibility of public examination may be seen as part of the price paid for the privilege of incorporation and the right to transact business as a company, albeit that the price is usually paid by those who become directors or officers of that company. (citation omitted)
[19] Friedrich v Herald and Weekly Times Ltd [1990] VR 995.
[20] Friedrich (1003).
In Friedrich, it was recognised that the court retains power to control the examination to avoid injustice to the examinee, including by prohibiting publication about the examination where there is a real or substantial risk that publication will cause an interference with the administration of justice which might cause serious injustice.[21] The court said that a non-publication order:[22]
cannot be justified unless it be shown that the particular question and answer or even, arguably, some particular line of questioning will, if published, result in prejudice of a kind which outweighs the need for publicity which the legislature sees as forming an essential element of the purposes of examinations under s 541.
[21] Friedrich (1004 - 1005).
[22] Friedrich (1007).
The above passages of Friedrich were cited with approval by the Full Court of the Federal Court of Australia in Evans v Wainter Pty Ltd,[23] a case concerning s 596A and s 596B of the Act.
[23] Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176 [91].
The reference to 'special circumstances' is naturally a reference to circumstances which are unusual or out of the ordinary. However, it is not sufficient that there is something unusual about the circumstances of the case. The power to dispense with a public examination only arises where the court considers that, by reason of special circumstances, it is desirable to hold the examination in private. Something about the unusual or out of the ordinary circumstances must provide the reason why a private examination is desirable.
The condition for the holding of a private examination is a state of satisfaction in the mind of the court. The examination is to be held in public except to such extent that the court considers that, by reason of special circumstances, it is desirable to hold the examination in private. Unless the court is satisfied that is the case, the examination is to be held in public.
That the condition for holding a private examination is a state of satisfaction by the primary court is significant for the role of this court on appeal. Here the primary judge did not consider that, by reason of special circumstances, it was desirable to hold the appellants' examinations in private. Absent some vitiating error of law (such as a misconstruction of the provisions), the question for this court on appeal will be whether, on the material before him, it was open to the primary judge to fail to be satisfied that, by reason of special circumstances, it was desirable to hold the appellants' examinations in private. If it was so open, and the primary judge did not consider that, by reason of special circumstances, it was desirable to hold the appellants' examinations in private, the Act required the examinations to be held in public.
The primary judge's approach
The primary judge recognised that a large scale joint investigation, which had been running since 2008, was being conducted against the appellants by the AFP and the ATO. The investigation had seen a number of search warrants issued, giving rise to significant litigation.[24]
[24] Primary decision [28].
The primary judge accepted evidence as to the scale and duration of the investigation set out in an affidavit of the appellants' solicitor.[25] That evidence is summarised below.
[25] Primary decision [29].
It appears from that material that, in 2008, the ATO formed 'Project Caballus' to investigate the appellants and Mr John Caratti (the brother of Allen Caratti). On 27 May 2013, the ATO requested assistance from the AFP with 'ATO Project Caballus - Starbrake Investigation'. That investigation concerned the lodgement of an allegedly false and misleading business income tax return of Starbrake Pty Ltd, a company of which Allen Caratti was the sole director.
On 12 December 2013, the ATO referred to the AFP for consideration 10 additional cases relating to companies or trust funds controlled by the appellants. The investigations in those cases were said to 'centre on the non-declaring of income and the deception of the ATO in order to refrain or limit the taxation paid by their companies'.[26] The cases were described in an evaluation by an AFP officer to include matters concerning the activities of Gucce Holdings and Mammoth Nominees Pty Ltd, of which Allen Caratti was director. Before the primary court, the appellants' solicitor deposed that Allen Caratti had informed him that Mammoth Civil had carried out sub-contract work for Mammoth Nominees, Gucce Holdings and other companies in relation to matters which are the subject of the investigation.[27]
[26] Evaluation of ATO Project Caballus, page 2 of 20 (Green AB 95).
[27] Affidavit of Alan Phillip Rumsley sworn 7 November 2018 in COR 104 of 2018, par 3 (Green AB 91 - 92).
In May 2014, the ATO and AFP signed a joint agency agreement to conduct a joint investigation, operating under the name Operation Caballus, into:[28]
suspected non-declaration of income, the deception of the ATO in order to refrain or limit the taxation paid by the CARATTI Group and the deception of the ATO in order to dishonestly obtain tax refunds.
[28] Green AB 114.
The ATO and AFP agreed to utilise their resources to investigate offences alleged to have been committed by members of the Caratti Group, including the appellants. The alleged offences were said to include forgery contrary to s 145.1 of the Criminal Code and fraud upon the ATO contrary to various provisions of pt 7.3 of the Criminal Code. The agreement provided for the agencies to conduct investigations, share information (subject to legal restrictions) and to:[29]
prosecute any persons of the CARATTI group where sufficient evidence exists, using the most applicable offences under the [Criminal Code and the Taxation Administration Act].
[29] Green AB 116.
An ATO/AFP investigation plan dated 25 July 2014 indicated that the referred incidents concerning Gucce Holdings and Mammoth Nominees were being investigated. The investigation was considering criminal charges against the appellants which included offences against the following provisions of the Criminal Code: s 134.2 (obtaining a financial advantage by deception), s 135.4 (conspiracy to defraud), s 143.2 (using false documents) and s 144.1 (forgery).[30] The 'concept of the investigation' was described in part as:[31]
The alleged offending occurs through the Caratti Group's property development operations. It is alleged that [Allen] CARATTI and BAZZO have deliberately created forged documentation to support taxation fraud and have engaged in business dealings in a manner designed to obfuscate their criminal purpose. By doing so, they have amassed significant wealth.
[30] Green AB 127.
[31] Green AB 129.
On 27 January 2015, a search warrant was issued which indicated that there were reasonable grounds for suspecting that the search would afford evidence as to the commission of a number of indictable offences by the appellants. It appears that the ATO and AFP agreed not to inspect the material seized in the execution of the search warrant pending the outcome of legal challenges by the appellants, which concluded in 2018.
The primary judge accepted the following matters:[32]
I am prepared to evaluate both these matters on the basis that there is a strong likelihood, at some presently uncertain future time, that both Ms Bazzo and Mr Caratti will face significant criminal charges arising out of the financial and trading affairs of the many corporations with which they are associated - including the financial affairs of the two corporations whose liquidators make the present examination applications.
I also accept there is potential for some intersection as between the subject areas of the proposed examinations by the liquidators with whatever future serious criminal charges might eventually be preferred against Ms Bazzo and Mr Caratti (for the purpose of evaluating the present private examination applications). (emphasis added)
[32] Primary decision [30] - [31].
The primary judge noted that the appellants eschewed any reliance on the effect of pre-trial publicity,[33] but rather relied on the risks to the accusatorial process in any future trial.
[33] Primary decision [32] - [33].
The primary judge said that he was not persuaded that it was desirable by reason of special circumstances for the examinations of the appellants to be held in private.[34] In reaching that conclusion, his Honour noted that it was:[35]
necessary to pay regard in the evaluation to not merely the asserted risks of prejudice articulated by the examinees, but also to 'ameliorative steps' that could, in the ordinary course of things, be adopted to address any risks as might in due course emerge.
[34] Primary decision [72].
[35] Primary decision [73].
The primary judge gave seven reasons for that conclusion,[36] many of which focussed on the purpose of public examinations under pt 5.9 discussed above. His Honour referred to the passages of Mason CJ's reasons in Hamilton quoted at [31] above. The essence of his Honour's ultimate conclusion was expressed in his sixth reason:
Sixth, the examinees' arguments predicated upon asserted risks to the accusatorial process (in present circumstances where they currently face no criminal charges albeit the likelihood that they will at some uncertain future time) are not sufficient, pitched only at that theoretical and plenary level, to constitute special circumstances for the purposes of s 597(4). More is necessary, by my assessment, to constitute a sufficient basis to depart from the default position as it is textually set down under the Corporations Act. Clearly, the legislature enacted the regime now seen under s 597 within pt 5.9 div 1, with full cognisance of the significance of the fact that such a regime, as Mason CJ observed in [Hamilton], gave no further protections to an examinee against the use of their evidence in criminal proceedings on a derivative basis.
[36] Primary decision [74] - [89].
The primary judge saw the observations of Mason CJ in Hamilton as supporting 'a rejection of the examinees' plenary arguments of prejudice towards their public examinations'. His Honour continued:[37]
However, further ameliorative aspects from a more ad hoc protection, where appropriate, are not removed. They remain to be excised by the presiding judicial officer as appropriate concerning any particular question, or line of questioning, during the public examination that might need, then, to be addressed. That process remains unaffected by this decision.
[37] Primary decision [86].
The primary judge accepted that the judicial officer presiding over an examination under s 596A had a wide discretionary power to issue directions under s 596F(1) of the Act. His Honour noted favourable judicial 'sentiments towards an ad hoc capacity to intervene by providing a protective direction in the context of a specific question or line of questioning'.[38]
[38] Primary decision [87] - [89].
The companion principle
As is apparent from the primary judge's reasons, the focus of the appellants' submissions before the primary court was the risk to the accusatorial process in any future trial of the appellants if their examinations were not held in private. Much of the appellants' written submissions in this appeal are also focussed on the operation of the 'companion principle'.
The common law 'companion principle' was described in the following terms by the plurality in R v Independent Broad-based Anti‑corruption Commissioner (IBAC):[39]
[39] R v Independent Broad-based Anti-corruption Commissioner [2016] HCA 8; (2016) 256 CLR 459 [43] - [46].
The companion principle is, as its name suggests, an adjunct to the rights of an accused person within the system of criminal justice. Its application depends upon the judicial process having been engaged because it is an aspect of that process. Thus, in X7, the joint reasons of Hayne and Bell JJ made it clear that the companion principle protects the position of 'a person charged with, but not yet tried for' a criminal offence.
In Lee v The Queen, this Court affirmed the fundamental principle of the common law that it is for the prosecution to prove the guilt of an accused person as 'an aspect of the accusatorial nature of a criminal trial in our system of criminal justice.' The Court went on to say:
'The companion rule to the fundamental principle is that an accused person cannot be required to testify. The prosecution cannot compel a person charged with a crime to assist in the discharge of its onus of proof.'
These observations were set in the context of a discussion of the 'balance struck between the power of the State to prosecute and the position of an individual who stands accused.'
Most recently, in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd, French CJ, Kiefel, Bell, Gageler and Keane JJ referred to this passage from Lee v The Queen, and went on to say that the companion principle:
'is an 'aspect of the accusatorial nature of a criminal trial in our system of criminal justice' whereby an accused person cannot be compelled to assist the prosecution to make its case. The companion principle is a 'companion' of criminal trials'.
(emphasis in original) (citations omitted)
In R v IBAC, two police officers were summonsed for compulsory public examination by the Commissioner, who had commenced an investigation into an allegation that the officers had assaulted a woman at a police station. At the time of being summonsed, they had been suspended from duty on the basis that they were reasonably believed to have committed the assault being investigated by the Commissioner. The officers brought proceedings seeking to restrain the examinations being conducted, either at all or in public. The plurality held that the companion principle was not engaged because the officers had not been charged, and there was no prosecution pending. Their Honours declined to extend the principle to cases where a person was reasonably believed to have committed an offence or was the specific subject of an examination.[40]
[40] R v IBAC [48] - [51].
Much of the focus of litigation relating to the companion principle has been its operation, in conjunction with the principle of legality, in relation to the construction of statutes authorising compulsory examinations.[41] The question which arises is whether a statute providing for compulsory examination authorises the examination of a person who has been charged with a criminal offence in relation to matters which are the subject of the charge. The question that arises in such a case was framed in the following terms by French CJ in Lee v NSW Crime Commission:[42]
In some cases, a person under statutory examination may already be facing criminal charges and find himself or herself being asked questions touching matters the subject of those charges. Whether a statute authorises a compulsory interrogation of an accused person in those circumstances is a question of statutory interpretation. The courts do not interpret a statute to permit such questioning unless it is expressly authorised or permitted as a matter of necessary implication. When the text, context and purpose of a statute permit a choice to be made, the courts will choose that interpretation which avoids or minimises the adverse impact of the statute upon common law rights and freedoms. However, subject to constitutional limits, where a parliament has decided to enact a law which abrogates such a right or freedom, its decision must be respected.
[41] X7; Lee v New South Wales Crime Commission.
[42] Lee v NSW Crime Commission [3].
The decision of the majority of the High Court in Hamilton established that s 541 of the Companies Code authorised examination with respect to matters which may be the subject of pending charges, where the questions were being asked of a person charged with the commission of an offence. Hamilton was distinguished but not doubted in X7.[43] Further, nothing said in X7 or Lee v NSW Crime Commission, understood in light of R v IBAC, provides reason for doubting that pt 5.9 authorises the examination of a person who is not facing any pending charges at the time of the examination in relation to matters which might be the subject of future charges.
[43] X7 [49] - [51]; [138] - [140], [161]; see also Lee v NSW Crime Commission [38] - [45], [69], [72], [134] - [140], [242] - [249], [315] - [317].
Issues concerning the companion principle can also arise where the prosecution in a criminal trial unlawfully receives information which an accused has been compelled to give. In Do Young Lee v The Queen,[44] the accused was lawfully examined by the New South Wales Crime Commission before being charged. Transcripts of the accused's examination were unlawfully published to officers of the police and the Director of Public Prosecutions. That result was found to have altered the accused's trial in a fundamental respect, giving rise to a substantial miscarriage of justice.
[44] Do Young Lee v The Queen [2014] HCA 20; (2014) 253 CLR 455.
In Strickland (a pseudonym) v Director of Public Prosecutions (Cth),[45] four accused persons had been subjected to pre-charge compulsory examination by the Australian Crime Commission. It was held that the examinations of the accused persons were not held for the purposes of a special ACC investigation, there being no ACC investigation on foot. Rather, the examinations were 'for an extraneous, unlawful purpose of assisting the AFP to compel the [accused persons] to give answers to questions about offences of which they were suspected and had declined to be interviewed'.[46] Importantly, the purportedly compulsory examination was unlawful. The plurality concluded that the forensic disadvantage which would be suffered by the accused persons at trial, in conjunction with the relevant officer's 'unlawful, reckless disregard of his statutory responsibilities', meant that the continued prosecution would bring the administration of justice into disrepute.[47] The court restored an order that the prosecution be permanently stayed.
[45] Strickland (a pseudonym) v Director of Public Prosecutions (Cth) [2018] HCA 53; (2018) 93 ALJR 1.
[46] Strickland [74].
[47] Strickland [86].
Do Young Lee v The Queen and Strickland show that pre-charge unlawful conduct can impact the accusatorial character of a later trial in a way that constitutes a substantial miscarriage of justice or gives rise to an abuse of process.
The above decisions have limited application in the present case. The appellants do not contend that the proposed examinations are not authorised by the Act. In those circumstances, particularly as the appellants have not been charged with any relevant offence, the question of whether the companion principle and the principle of legality combine to lead to a reading down of the provisions of the Act does not arise. There is no question of unlawful conduct of prosecuting authorities infringing on the accusatorial nature of a criminal trial in a manner not authorised by the Act. The capacity of Australian Parliaments, acting within constitutional limits, to modify the companion principle has not been doubted, and the validity of pt 5.9 of the Act is not impugned in these proceedings.
Further, this court is not concerned with the orders that should be made where a summons is issued to a person who has been charged with, and is facing trial on, a criminal offence. As the passage cited from R v IBAC at [55] above illustrates, that is a significant factor. At least the principles which underlie the companion principle may be relevant for a court in deciding what protective orders should be made in the case where an examinee is charged with a criminal offence related to the subject matter of the examination. However, this case is not concerned with the appropriate curial response to that circumstance.
As noted above, the companion principle was the focus of the appellants' written submissions in this court, and the written and oral submissions made before the primary judge. However, at the hearing of the appeal, counsel for the appellants changed tack. They abandoned any reliance on the potential derivative use by criminal investigators or prosecutors of answers in the examinations as part of the special circumstances said to provide a reason for holding private examinations.[48] For the reasons discussed above, the appellants' appeal counsel were correct to abandon reliance on that factor in this appeal.
[48] Appeal ts 28 - 30.
Grounds 1 - 3: failure to order private examination
Ground 1 of both appeals contends that the primary judge erred in failing to find that there were special circumstances within the meaning of s 597(4) of the Act. The special circumstances on which the appellants rely are particularised in ground 2, which contends that the primary judge should have found, and this court should find, the existence of special circumstances on the grounds of:
(a) The strong likelihood that the examinees will face serious criminal charges arising out of the financial and trading affairs of the many corporations with which they are associated - including the two corporations whose liquidators are respondents.
(b) The examinees being the main targets of the largest and most complex fraud investigation that the [ATO] in Perth has encountered, namely Operation Caballus, initiated in 2008, and related investigations, carried out under formalised co-operation regimes between the [AFP] and ATO.
(c) The potential for intersection between the subject areas of the proposed examinations with future serious criminal charges against the examinees, … which should further have been found as a high probability, given also the circumstances that the ATO is funding the examinations … and is likely to influence the questions put at the examination.
(d) The high media profile of, and strong media interest in, the examinees and their business affairs … and the resultant extensive reporting of any public examination which will occur in Western Australian and other media.
(e) Further to the above, the circumstances that the charges the AFP and ATO are seeking to establish against the examinees relate to federal offences … where trial by jury is unavoidable, in circumstances where there is a high risk that potential jurors (and potential witnesses) will be influenced and prejudiced by such reporting, denying the examinees a fair trial.
(references omitted)
Ground 3 contends that the primary judge erred by failing to take into account the circumstances referred to in ground 2 and by failing to order that the respective examinations take place in private.
As was explained in oral submissions,[49] these grounds for finding special circumstances are cumulative, with the points made in par (a) - (d) being stepping stones to the conclusion reached in par (e). That is to say, the appellants contend that there is a strong likelihood that they will face serious criminal charges (par (a) and (b)), that there is a potential for intersection between the subject areas of the proposed examinations and those charges (par (c)) and that the appellants' high media profiles mean that the examinations will be widely reported (par (d)). This means that potential jurors and witnesses will be exposed to publicity about the appellants' answers which, because of claims of privilege, will not be admissible in the criminal proceedings. The appellants therefore submitted that public examinations will prejudice their fair trial through the publication of inadmissible and potentially prejudicial material. It is the impact of those allegedly special circumstances on the fair conduct of a future criminal trial which, the appellants now contend, provides the reason why the examinations should be held in private.
[49] Appeal ts 31.
There are two fundamental problems with the appellants' submissions.
First, as the appellants' counsel frankly acknowledged,[50] the point which the appellants now seek to advance was not raised before the primary judge. To the contrary, it was disavowed by the appellants' counsel in the primary proceedings, as noted by the primary judge in the passage referred to at [49] above. In the course of his submissions, counsel in the primary proceedings referred to a number of single judge decisions which addressed the potential impact of media attention on a criminal trial.[51] He referred to the complaint in those cases as concerning 'the real or substantial risk that publication would cause interference with the administration of justice by reason of affecting the memory of jurors'. He submitted that the points taken in these cases, and another case concerning medical harm which could result from the stress of being examined, were 'in absolute contradistinction to the point we raise'.[52]
[50] Appeal ts 14 - 16.
[51] Being Re Pan Pharmaceuticals Ltd [2003] NSWSC 1204; (2003) 176 FLR 341 [8]; Friedrich (1005) - (1006); In re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 604 [21] - [26]. Counsel also referred to Jagelman v Sheahan [2002] NSWSC 419; (2002) 41 ACSR 487, which did not deal with the effect of publicity on a criminal trial, but rather held (at [13]) that likely media coverage of the examination was not a special circumstance.
[52] Primary ts 156 - 157.
As noted above, the question for this court is whether it was open to the primary judge, on the material before him, to fail to be satisfied that, by reason of special circumstances, it was desirable to hold the examinations of the appellants in private. The appellants' appeal counsel accepted that this was the test.[53] The question of whether the primary judge erred by failing to reach that view must be assessed having regard to the cases which the appellants advanced before the primary court. The primary judge cannot be said to have erred in failing to make a finding on a basis that was never advanced before him, and was indeed disavowed by the appellants. Nor can his Honour be held to have erred in failing to consider matters on which the appellants, through their counsel, said they did not rely.[54]
[53] Appeal ts 7, 23, 24 - 25.
[54] Cf Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand[2008] HCA 42; (2008) 237 CLR 66 [120].
Further, as has often been noted, an appellant is bound by the conduct of his or her case at trial. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him or her, to raise a new argument which, whether deliberately or by inadvertence, he or she failed to put during the trial when he or she had an opportunity to do so. These points apply with even stronger force where counsel for a party expressly concedes or abandons a point at trial, and the party seeks to agitate the point on appeal.[55] Even if, contrary to the view just expressed, it were possible to say that the judge erred in failing to reach the required state of satisfaction by reference to matters not raised before him, the appellants should not be allowed to raise a new case on appeal. There is nothing in the circumstances of this case which would justify allowing the conceded point to be raised on appeal as a basis for establishing error by the primary judge.
[55] See Trans Petroleum v White Gum Petroleum [2012] WASCA 165; (2012) 268 FLR 433 [99] - [101] and cases there cited.
Secondly, in any event, there is no merit in the new point which the appellants seek to raise on appeal.
As noted above at [35], in Friedrich, the court recognised that a real or substantial risk that a publication will cause an interference with the administration of justice of a kind which might cause serious injustice could justify an order restricting publication of examination proceedings.[56] Such a risk might also constitute special circumstances which make a private hearing desirable. But in deciding whether that is the case, the potential impact on a criminal trial has to be balanced against the legislative policy that public examinations are generally beneficial to the commercial and general community.[57]
[56] Friedrich (1005).
[57] Friedrich (1004, 1005).
The decision of Gleeson J in In re Plutus Payroll Australia Pty Ltd (in liq),[58] on which the appellants rely, provides a recent example of a case in which a private examination was called for. In that case, there was a pending prosecution, the defence to which might be prejudiced by what transpired in the examinations. The examinations were to take place in March 2020, and the criminal trial was listed to commence in October 2020. Gleeson J was satisfied that it could be reasonably anticipated that a public examination would attract significant media publicity which had the prospect of affecting potential jurors in the upcoming trial.
[58] In re Plutus Payroll Australia Pty Ltd (in liq) [2020] NSWSC 46.
By contrast, in the present case, there are no pending charges. It is unclear whether the appellants will ever be charged and, if so, what those charges may be. While the papers obtained by the appellants in relation to 'Operation Caballus' identify certain offences, that material also recognises that the institution of a prosecution depends on the existence of 'sufficient evidence'. The ATO investigation has been ongoing since 2008 and the joint ATO/AFP investigation since 2014. The absence of any charges in 2020 suggests that the investigation has not yet identified evidence establishing a prima facie case with reasonable prospects of success against either appellant. Accepting the primary judge's finding of a 'strong likelihood' that the appellants will face significant criminal charges at 'some presently uncertain future time', there remains considerable uncertainty as to whether either appellant will actually be charged and, if so, as to the offence or offences with which they will be charged.
Even if charges were to be brought against the appellants in the near future, it would inevitably be a long time before any trial occurred. Given the litigious history of the present proceedings, and those challenging the validity of the search warrants,[59] it may be inferred that any prosecution will be tenaciously defended. The length and complexity of the ATO and AFP investigations will likely make the preparation of a prosecution brief and the provision of disclosure to the accused a time-consuming exercise. A lengthy trial is unlikely to be quickly accommodated by the District Court's busy lists. A trial would likely be years rather than months away. Even if charges were instituted in the near future, the prospects of any juror recalling a media report of an examination of the appellants in relation to the affairs of Mammoth Civil and Gucce Holdings would be extremely remote. In so saying, we reject the appellants' submission that their, especially Mr Caratti's, notoriety would lead to a high level of publicity with an enduring effect.[60]
[59] See Caratti v Commissioner of the Australian Federal Police [2017] FCAFC 177; (2017) 257 FCR 166.
[60] Appeal ts 16 - 17, 23, 27 - 28.
Further, as Leeming JA noted in Courtenay House,[61] in considering whether the prospect of publicity impacting on criminal proceedings makes it desirable to hold an examination under pt 5.9 of the Act in private, it is necessary to have regard not merely to the risk of prejudice but also the various ameliorative steps that can be, and in the ordinary course are, taken to address that risk. If the appellants face trial, the jury will be directed by the trial judge to determine the case solely on the evidence admitted against the accused in the trial. They will be instructed not to undertake their own research, including by accessing the internet. While it may be accepted that any media reports of the appellants' examinations are likely to remain accessible via the internet, the jury are presumed to follow the trial judge's directions that would preclude them from searching for or accessing that material.[62]
[61] Courtenay House [24] - [26].
[62] See LFG v The State of Western Australia [2015] WASCA 88; (2015) 48 WAR 178 [332] - [334] and the cases there cited.
We note, in passing, one matter to which Leeming JA adverted in Courtenay House which does not arise in the present case. Leeming JA had regard to the option for the examinee in that case to apply for a judge alone trial. That option is unlikely to be available in the present case, as the offences being investigated by 'Operation Caballus' are federal indictable offences which must be tried by jury.[63] It is unnecessary for this court to consider whether account could be taken of the availability of trial by judge alone where an examinee is charged with State offences.
[63] Section 80 of the Commonwealth Constitution.
It is also relevant to note that the primary judge correctly identified only a 'potential for some intersection' between the subject of the examinations and any particular charge that might be brought in the future. The appellants have not given any specific examples of questions or answers which are likely to be asked in the examinations that are likely to prejudice a future criminal trial by virtue of the impact of reporting of the examinations on jurors or witnesses. While there is potential for some overlap between the subject matter of the examinations and future criminal charges, it is a matter of speculation as to whether answers might be given and reported in a way that will have any impact on a future criminal trial. It is not desirable to hold the whole of the examinations in private based on such an unparticularised abstract risk. Further, the judicial officer before whom the appellants' examination will be conducted will retain the capacity to deal with any particular problematic questions or answers which do arise, including by holding the relevant part of the examinations in private or making a non‑publication order. As was noted in the emphasised passage of Hamilton cited at [26] above, and affirmed in Friedrich,[64] the types of questions which may warrant such a course should not be predicted by a court in advance.
[64] Friedrich (1004).
In our view, the material before the primary judge fell well short of establishing any real or substantial risk that a publication of reports of the appellants' examinations will interfere with the administration of justice in any future criminal trial. Even if it is assumed that the circumstances identified by ground 2 are unusual or out of the ordinary, they do not justify a departure from the default position that examinations under pt 5.9 should be held in public. That is, even assuming that those circumstances can be characterised as 'special', they do not provide a reason for concluding that it is desirable that the whole of the examinations be held in private.
For the above reasons, it was well open to the primary judge to fail to be satisfied that, by reason of special circumstances, it was desirable to hold the appellants' examinations in private. His Honour did not make any error in concluding that the prima facie position of public examination provided for in s 597(4) of the Act should not be disturbed. Further, in our view, the evidence before the primary judge did not support the conclusion that, by reason of special circumstances, it was desirable to hold the appellants' examinations in private.
In our view, grounds 1 - 3 are not established.
Grounds 4 and 5: other orders
Ground 4 of both appeals contends that the primary judge erred in law in failing to address, and in failing to make orders under, s 596F(1)(e) and s 596F(1)(f) of the Act. Ground 5 contends that the primary judge erred in law in failing to address, and in failing to direct, that there be no order pursuant to s 597(13) of the Act, for each examinee to authenticate the transcript of their respective examination.
Before the primary judge, Ms Bazzo sought the following orders:[65]
1. Order pursuant to [s 597(4) of the Act] that the examination of Ms Bazzo to be conducted in accordance with an Examination Summons dated 30 July 2018 be held in private before the Registrar ('the Bazzo Examination').
2. Direct that there be no order pursuant to [s 597(13) of the Act] for Ms Bazzo to authenticate the transcript of the examinations referred to in Order 1 above.
3. Direct pursuant to [s 596F(1)(e) of the Act] that, without the leave of the Court, no person or organisation shall be entitled to have access to the transcript or any other written record of the Bazzo Examination, other than Ms Bazzo, the Plaintiffs and their respective legal advisors. (To avoid any doubt, a reference to the Plaintiffs includes the Plaintiffs' employees.)
4. Direct pursuant to [s 596F(1)(f) of the Act] that, without the leave of the Court, the Plaintiffs, by themselves, their servants and agents, must not publish or communicate to any person or organisation other than their legal advisers any information about the Bazzo Examination, including questions asked and answers given at the examination.
Mr Caratti sought corresponding orders.[66]
[65] Notice of appeal in COR 104 of 2018 (Blue AB 32 - 33); Outline of Submissions of Tina Bazzo and Allen Caratti dated 7 November 2018, par 1.
[66] Outline of Submissions of Tina Bazzo and Allen Caratti dated 7 November 2018, par 2.
Proposed orders 2 - 4 follow from the court making an order about 'the Bazzo Examination' or the 'examinations referred to in Order 1', those being examinations conducted in private in the manner proposed by order 1. The focus of the oral and written submissions advanced before the primary judge were on whether the examinations should be conducted in private. In that context, orders 2 - 4 appear to be ancillary to, or consequential upon, an order that the examinations be held in private. Further, the appellants did not advance a submission in the primary proceedings that proposed orders 2 - 4 should be made even if the primary judge did not order private examinations.
In the above circumstances, the primary judge did not err by failing to consider whether proposed orders 2 - 4 should be still made even though he had rejected the argument that the examinations should be held in private. His Honour had not been asked to do so. In oral submissions before this court, counsel properly abandoned the argument that, having rejected the argument that the examinations should be held in private, the primary judge nonetheless erred in failing to consider whether the other orders should be made.[67]
[67] Appeal ts 33.
Also at the hearing of the appeal, counsel for the appellants accepted that grounds 4 and 5 only arose for consideration by this court if grounds 1 - 3 succeeded.[68] As grounds 1 - 3 are not established, it is unnecessary to consider grounds 4 and 5 further.
[68] Appeal ts 32 - 33.
Abandoned ground: adjournment of the examinations
We note that there was a ground in both appeals contending that the primary judge erred in law by failing to address, and in failing to find, that the examinations should be adjourned until the conclusion of the criminal investigation or criminal judicial process against the respective examinees. It does not appear that the appellants ever sought an adjournment of the examinations before the primary judge. This ground was abandoned when it was deleted in the amendment which the court, at the hearing of the appeal, permitted the appellants to make to their grounds of appeal.
Orders
As the primary judge's orders are interlocutory in nature, leave to appeal is required. The applications for leave to appeal were referred to the hearing of the appeals.
The principles governing the grant of leave to appeal from an interlocutory decision are well established. Generally, leave should not be granted unless the decision below is plainly wrong or is attended by sufficient doubt to justify the grant of leave and a substantial injustice would be done if it remains undisturbed.[69]
[69] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374 [80] - [81]; The State of Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40 54 - 57; Wilson v Metaxas [1989] WAR 285, 294.
In our view, the primary judge's decision was correct and is not attended by sufficient doubt to justify the grant of leave to appeal. Leave to appeal should be refused in both appeals, and both appeals should be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MT
Research Orderly to the Honourable Justice Mitchell7 APRIL 2020
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