Bell, T.J. v Australian Securities Commission
[1991] FCA 515
•26 AUGUST 1991
Re: TREVOR JOHN BELL
And: AUSTRALIAN SECURITIES COMMISSION
No. Q G113 of 1991
FED No. 515
Corporations
COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)
CATCHWORDS
Corporations - investigation by Australian Securities Commission - objection to examinee's lawyer - whether validity of objection examinable.
Australian Securities Commission Act 1989, s.23
Administrative Decisions (Judicial Review) Act 1977
HEARING
BRISBANE
#DATE 26:8:1991
Counsel for the applicant: Mr A.J.H. Morris
Solicitors for the applicant: Feez Ruthning
Solicitors for the respondent: Australian Securities Commission
ORDER
The examination of the applicant proposed to be held tomorrow not take place.
The respondent be enjoined from conducting any further examination of the applicant until Thursday, 29 August 1991 at 4.15 p.m. or further earlier order.
The application for interim relief be adjourned until Thursday, 29 August 1991 at 10.15 a.m.
Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This application relates to an investigation being conducted by the Australian Securities Commission under Division 2 of Part 3 of the Australian Securities Commission Act 1989 ("the Act"). The application is made by Mr Trevor John Bell, who wishes to have interim relief, relating to an examination of Mr Bell under that Act. The applicant has applied under the Administrative Decisions (Judicial Review) Act 1977 for review of a number of decisions attributed to the respondent and made by Mr B.C. Behan.
The critical point for present purposes is that Mr Behan, who has been examining a number of witnesses in the course of the investigation, is, as I understand it, not prepared to continue to examine Mr Bell in the presence of a Mr J.F. Mackenney, who is a solicitor engaged by Mr Bell to act in the matter.
The application for interim relief was brought before the Court on short notice and Mr Behan himself appeared for the Commission and told me from the bar table that he had informed Mr Mackenney that he believes Mr Mackenney has a conflict of interest. There is evidence suggesting that the conflict to which Mr Behan refers is based upon Messrs Gilshenan and Luton, the firm of which Mr Mackenney is a partner, having prepared a prospectus. But it appears that there must be other grounds also, because Mr Behan has informed me that he does not wish to state the reasons why Messrs Gilshenan and Luton should not, in his view, appear.
Mr Behan proposes, unless restrained, to examine Mr Bell tomorrow and he wishes to do so other than in the presence of Mr Mackenney and other than in the presence of any other representative of Gilshenan and Luton, attending in lieu of Mr Mackenney.
The provision upon which the applicant relies in connection with this aspect of the case is s.23 of the Act which reads in part as follows:
"(1) The examinee's lawyer may be present at the examination and may,
at such times during it as the inspector determines:
(a) address the inspector; and
(b) examine the examinee;
about matters about which the inspector has examined the examinee".
The issues which are foreshadowed by Mr Morris, counsel for the applicant, are firstly whether the expression "examinee's lawyer" implies that the examinee has a choice of lawyer and, secondly, whether the Commission does not have that choice - that is, the right to choose the examinee's lawyer. He implies, as I understand it, that one should not construe the section in such a way as to give the Commission a right of veto as to the choice of lawyer.
Mr Behan has, as I mentioned, come to Court at fairly short notice and the shortness of time has produced the result that he has appeared himself and without any evidence prepared. The evidence before me is such that I could not possibly hold either that there is a rational objection to Mr Mackenney or that there is not; I simply do not know. The difficulty I have at present is that Mr Behan has not gone into evidence to explain the nature of his objection to Mr Mackenney's appearance, in detail. I do not invite him to do so; it is purely up to the respondent.
One question, as I have said, is whether the expression "examinee's lawyer" implies that the examinee may have a free choice as to who his lawyer shall be, or whether it is possible for the examiner effectively to object to a particular lawyer on the ground that the presence of that lawyer, rather than another, might prejudice the investigation. It is evident that circumstances could be imagined in which the presence of a particular lawyer might prejudice the investigation; for example, the lawyer might himself have been closely involved in irregularities, if there were any, which are being investigated.
As has been mentioned by Mr Morris, it would be possible for the respondent Commission to place evidence before the Court as to the nature of the objection to Mr Mackenney in such a way as would keep it confidential. But in the absence of such evidence, it is hardly possible for me to hold that the applicant has no case fit to be investigated. The applicant plainly has available to him an argument that, even assuming that there is a right on the part of Mr Behan effectively to exclude Mr Mackenney, that right must have some limitation and it must be possible for the applicant to challenge the decision of Mr Behan. That is, Mr Behan may well have no right to keep Mr Mackenney out merely on his assertion that Mr Mackenney's presence would prejudice the investigation. The applicant has, of course a simpler argument available - that there is no right of exclusion of his lawyer.
There are other matters raised by the application which should be mentioned briefly. They concern events which took place during the investigation, when the applicant was represented by Mr Quinn of Gilshenan and Luton. They have to do with the question of Mr Quinn and Mr Bell being directed to cease to address Mr Behan. They seem to be matters of lesser significance and I do not need to say anything about them at this stage of the proceedings. The real question is whether or not the applicant has raised a sufficient case to induce the Court in the exercise of its discretion to prevent the examination of Bell going ahead for the time being.
Mr Behan argues that the investigation needs to be pursued expeditiously and without considerable delay. He says, and I accept that this may be so, that if there is a long delay awaiting a full hearing of the matter, it could significantly prejudice the investigation. Nevertheless, it seems to me inevitable that the applicant must have relief today. My present proposal is to give relief only for a short time so that, to put it bluntly, the respondent Commission can have more time to decide what to do. It could, for example, have Mr Behan discuss the difficulty privately with counsel appearing for the applicant, to see if the matter can be resolved. The other course which the respondent Commission might take, if it sees fit, is to decide to go into evidence and ask that the evidence be treated as confidential by appropriate order. It may, on the other hand, prefer to leave matters as they stand. It is entirely for the Commission to decide whether it does that.
It is undesirable that investigations be impeded by applications of this sort, but it is equally undesirable that the investigation proceed in a manner other than that which the law prescribes. It is the Court's hope that the parties can avoid both those outcomes by some sensible resolution of the dispute.
The order will therefore be that the examination of the applicant proposed to be held tomorrow not take place and that the respondent be enjoined from conducting any further examination of the applicant until Thursday, 29 August 1991 at 4.15 p.m. or further earlier order. I say "further earlier order" in deference to the fact that the respondent Commission may see fit to apply at some earlier time to discharge the order and, of course, it can do that. I will adjourn the application for interim relief until Thursday, 29 August 1991 at 10.15 a.m. If it turns out that the matter is resolved in the meantime, please let my associate know. The costs will be reserved.
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