Binetter v BCI Finances Pty Limited

[2016] HCATrans 33

[2016] HCATrans 033

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S184 of 2015

B e t w e e n -

ANDREW BINETTER

Applicant

and

BCI FINANCES PTY LIMITED

First Respondent

COMMISSIONER OF TAXATION

Second Respondent

JOHN SHEAHAN

Third Respondent

IAN RUSSELL LOCK

Fourth Respondent

Application for special leave to appeal

GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 FEBRUARY 2016, AT 12.18 PM

Copyright in the High Court of Australia

____________________

MR I.M. JACKMAN, SC:   May it please the Court, I appear for the applicant, with my learned friend, MR R.D. GLOVER.  (instructed by Polczynski Lawyers)

MR R.S. HOLLO, SC:   If it please the Court, I appear for the first, third and fourth respondents, with my learned friend, MR B. MOSTAFA.  (instructed by Cusoff Cudmore Knox Lawyers)

MR M. RICHMOND, SC:   If the Court pleases, I appear with my learned friend, MS K.C. MORGAN, for the second respondent.  (instructed by Minter Ellison Lawyers)

GAGELER J:   Mr Jackman.

MR JACKMAN:   Our opponents have made the good point in their written submissions that much of this application has been overtaken by events, namely, the way in which the trial was conducted in proceedings SAD 5 in the Federal Court in September last year and in the light of that we abandon the second and third grounds.  If your Honours go to the application book at page 94, we press the ground that appears first beside paragraph number 2 but we do not press the grounds set out in paragraphs 3 and 4 of the application which were then repeated in the draft notice of appeal.  Ground 1 is the argument that the Foreign Evidence Act is an exhaustive code as to the extent to which evidence obtained pursuant to a letter of request may be used in other proceedings.

GAGELER J:   Does the abandonment of those other grounds meet the totality of the point against you?

MR JACKMAN:   Yes, as we apprehend it, that is that if we are correct on ground 1 it is irrelevant that some of the letter of request documents were tendered in proceedings SAD 5 which is the point that has been made against us.  Or, for that matter ‑ and it does not matter to any of the grounds that some of these documents or near identical copies of them may be available from other sources; if that be the case, so be it. 

KEANE J:   If that is the case, given that this is – however one likes to dress it up, a case about a matter of practice or procedure, about matters adjectival, what injustice is there that would warrant this Court taking the matter up?  How is your client suffering some injustice from what has happened? 

MR JACKMAN:   Well, the question of how is he suffering an injustice, documents have been obtained from Switzerland and used in – are proposed to be used in proceedings and for other purposes, apart from the proceedings which they have been sought, and the use of those documents is detrimental to his interests.  It is as simple as that.

KEANE J:   They are not documents, the obtaining of which – they are not his documents, are they?  They are the documents of other persons.

MR JACKMAN:   They are documents of Bank Hapoalim in Switzerland, that is right.  It is our contention that whatever may have happened in SAD 5, those documents cannot be used in other proceedings or for other purposes by reason of the limits imposed by the Foreign Evidence Act.  At one level it can be described as a matter of practice and procedure but it is a matter that goes beyond the ordinary category of practice and procedure in that it is a matter that calls for the construction of an Act that in itself implements an international convention that was, on the face of ‑ ‑ ‑

KEANE J:   It deals with matters of practice and procedure.

MR JACKMAN:   Of a very special kind and of a fundamental kind in terms of the extent to which the judicial resources of other States can properly be invoked and used for proceedings here.  So, there is an unusual overlay even if one does characterise it as practice and procedure. 

KEANE J:   Using the judicial resources of another State, that has all happened; that has occurred.

MR JACKMAN:   That has occurred on the basis that the documents were going to be used in one set of proceedings, namely, proceedings which have now been disposed of between BCI Finances – brought by the Commissioner of Taxation against – sorry, BCI Finances and the Commissioner of Taxation and a number of directors.

KEANE J:   Do you say that our Act impliedly proscribes the use of those documents for purposes beyond that which they were originally sought. 

MR JACKMAN:   Not quite; no, that is a little more extreme than our argument.  Our argument is that the use to which documents can be put – obtained under the letter of request procedure is use in the proceedings in which they are sought and a very narrow category of other proceedings referred to in section 13 of the Act.

GAGELER J:   If you are right about this argument based on the construction of the Foreign Evidence Act would it have been the fact that your client, amongst others, has acted in disconformity with the Act?

MR JACKMAN:   Yes, I accept that.  Whether, in a way that was retaliatory to initiatives taken by other parties or otherwise ‑ in SAD 5 a number of tactical decisions were made and those representing my client made the best of what was a far from ideal circumstance given that we had lost before the Full Federal Court.

GAGELER J:   It is a very unattractive vehicle to explore the point. 

MR JACKMAN:   Well, in a sense, it is the perfect vehicle to explore the point because it arises in circumstances where everybody has, in fact, acted otherwise than properly in accordance with our argument if it is successful. 

KEANE J:   So, we will not be distracted by considerations of merit.

MR JACKMAN:   Well, not only for that reason, but if the matter is correct as a matter of statutory construction then what people have actually done inconsistently with that is irrelevant.  So, it tests the point of statutory construction in a stark way.  It is a point that has never been raised before.  It was touched on in a sense in one case in the UK a decade ago, Dendron which the Full Court refers to but the point was not argued there.  Otherwise, it has not been explored anywhere in the common law world as to the extent to which the implied obligation as it exists in our law not to use documents for other purposes subject to the Court granting leave relates to the very tight controls that exist pursuant to the Hague Convention for the use of documents obtained under a letter of request procedure. 

Can I take your Honours to page 116 of the application book which contains from extracts from the Foreign Evidence Act?  There are really three steps to our argument.  The first step is that the process for obtaining evidence by letter of request is statutory and the statute in turn reflects a very heavily negotiated international treaty in which most, if not all, countries insist on very tight controls concerning the use to which documents obtained under a letter of request could be used and the way in which their own judicial resources could be used by other countries for that purpose.

GAGELER J:   What do you draw out of that international context?  Is there something in the international practice or in the travaux preparatoire that assists your argument?

MR JACKMAN:   No, only that the Act must be construed against the background of the Convention which itself imposes tight controls on the process.

GAGELER J:   But does it suggest exclusivity of the kind that you are now suggesting exists within our domestic legislation?

MR JACKMAN:   Well, the Convention speaks only of use of the documents in the proceedings in which the process has been invoked.  Our Act goes a slight degree further in section 13 by picking up a narrow range of related cases, but given that the Act is an implementation of the Convention there is no reason to construe those narrow categories of other cases more widely than the Act itself specifies.  The second step in the argument is to note the scheme of the Act which, beginning of page 116, section 7 deals with “Proceedings in superior courts” and the way in which a letter of request can be sought, and section 9 then prescribes the “Use of [the] evidence taken in an examination” pursuant to a letter of request, that is, in that very same proceeding.

I should just interpolate there that section 9 speaks of tendering as evidence in the proceeding but that, of course, carries with it the usual incidence of tendering evidence, mainly that counsel in due course address upon it, they will cross‑examine on it, they will draw links with other evidence, they will consider it in settlement negotiations and so on.  So, it is not a question of simply contrary to one of the submissions made against us, it is not a question of tendering that evidence and then forgetting about it, it carries the usual practical repercussions of that, including, of course, journalists reporting on the case.

Then, beginning on page 118 are the provisions that deal with the Federal Circuit Court and inferior courts, in 9A, 10 and 11, and then section 12 is the counterpart to section 7, namely, a specification of the “Use of evidence taken in an examination”, relevantly tendering it as evidence in the proceeding.  Then, we come to Division 3, sections 13 and 14, which deal with subsequent proceedings.  Section 13 is very confined.  So, subsection (1) deals with a letter of request being sought in a committal proceeding and then the superior court issuing the letter “may” – discretionary matter:

may include in the order a direction that evidence taken outside Australia under the order may, subject to this Division, be tendered in a proceeding that is:

(a)a criminal proceeding that results from the committal proceeding; or

(b)      a related civil proceeding.

Then subsection (2) has another category of case which is:

a superior court makes an order in relation to a criminal proceeding (other than a committal proceeding), it may include in the order a direction that evidence taken outside Australia under the order may, subject to this Division, be tendered in a proceeding that is a related civil proceeding.

Then section 14 specifies the use that that can be made of in a subsequent proceeding.  It is the burden of our argument that section 13 has no practical utility if all of this can be swept aside by some free ranging judicial discretion under Harman v The Home Office principles which would, if our opponents are correct, go well beyond the narrow categories of case in section 13.

KEANE J:   What about section 15?

MR JACKMAN:   Section 15 ‑ now, great weight was placed on that by Justice Jagot as expanding the judicial discretion to stray outside the ambit of section 7 to 14 but section 15, on its face, is an exclusionary or limiting provision, that is, it excludes or limits the use of evidence.  It does not expand the role of a judicial discretion beyond the case in which the documents are sought or evidence is sought or the section 13 subsequent proceedings, it narrows ‑ ‑ ‑

KEANE J:   Would the considerations that apply in Harman v The Home Office be relevant to the exercise of the discretion proposed in the court by section 15?

MR JACKMAN:   No, not particularly.

KEANE J:   They would not be relevant?

MR JACKMAN:   No, not particularly, no, no, because section 15 is talking about a situation where you can use the documents pursuant to section 7 or 12 or 14 but section 15 is saying the court is not compelled to admit the evidence just because 7, 12 and 14 allow it to be admitted.  All the ordinary discretions about excluding or limiting the tender of evidence still apply.  That is the work that section 15 does.  It certainly does not expand the judicial discretion into subsequent proceedings that were not mentioned in section 13.  Otherwise, again, the drafting of section 13 would be odd.

KEANE J:   It says:

This section applies to any civil proceeding or criminal proceeding in a superior court.

It looks rather comprehensive.

MR JACKMAN:   But it must in context be read as a reference to the kinds of proceedings that section 7 to 14 have dealt with.  The Full Court for that reason was dismissive of Justice Jagot’s reliance on section 15, saying that it is far more equivocal than Justice Jagot thought and cannot be taken as expanding the Court’s discretion to allow documents to be used in proceedings other than those specifically nominated.

KEANE J:   Because of their view that Harman v The Home Office was a relevant limitation on use. 

MR JACKMAN:   Quite, but they thought that simply because the Act had not – I will take your Honour – the third step in our argument is to criticise the Full Court’s reasons and I will deal with that in due course.  Then can I note section 16 which has a power to vary an order which in subsection (2) also includes varying in order to include a direction under section 13 and that is not limited as to time.  So, if something subsequently arises which suggests that a direction under section 13 is called for then the order can be varied at any time to pick up that direction.

GAGELER J:   The Full Court said, did they not, that section 13 has a limited operation in relation to a certain category of documents but has nothing to say about documents falling outside that category.

MR JACKMAN:   About proceedings outside that category?  Well, that is what they said.  Can I turn to the Full Court’s reasoning?  In two respects the Full Court did adopt aspects of our argument, although they did not agree, ultimately, with the submission that was put.  One is in paragraph 34 where, in the fourth line ‑ line 31 on page 62, I am sorry – the Court does observe that what they there call:

The relevant sections, ss 9, 12 and 14, are quite specific as to the use which may be made of evidence taken in an examination.

GAGELER J:   Then the next two sentences.

MR JACKMAN:   Yes, I am going to deal with those.  Then at the end of paragraph 35 the Court says:

ss 9, 12 and 14 the legislature wished to make it clear how the evidence might be used and not leave it to the discretion of the Court ‑

which is the burden of our argument.  Now, there are two flaws in what the Full Court has done.  One is that although back on page 60 at the foot of the page, four lines up from the bottom of page 60, the Full Court appreciated, in paraphrasing my submission, that the heart of it was section 13.  Your Honours see that in the fourth last line on page 60, that it is an argument based on section 13 and, for that matter, 14.

But when we come to paragraphs 34 and 35 that really do the work in the reasoning, the collocation of sections is 9, 12 and 14 and, mysteriously, 13 has been omitted.  The Court simply has not grappled with what is the primary section on which our argument is based, namely, the detailed specification in section 13 of the kinds of subsequent proceedings in which letter of request material can be used.  That is compounded by what appears at the beginning of paragraph 34 in the second line, namely, that the Court is focused on “the language of the statutory provisions”.

We accept the text of the statute does not contain an express prohibition on using the documents, other than in the circumstances set out in the Act, but it is our argument that that is a necessary implication from the scheme of the Act read as a whole.  What the Full Court has done is to focus on the text, rather than implications from the text, and in looking at the text they have omitted reference to section 13 which is the height of our argument.

So that in our submission, the conclusion at the end of paragraph 35, which is essentially what we were submitting, is a conclusion that is all the stronger once one takes into account section 13 because that is the basis of our argument and one appreciates that our argument is not based purely on the express language of the Act but on necessary implications from it.  As we submit, the issue has not been raised as an issue before as far as we can tell anywhere in the world, apart from being slightly touched on in Dendron, and unless there is anything further on which I can assist the Court, those are our submissions.

GAGELER J:   Thank you very much, Mr Jackman.  We do not need to hear from you, Mr Hollo and Mr Richmond.

In our view, an appeal from the decision of the Full Court of the Federal Court on the construction of the relevant provisions of the Foreign Evidence Act 1994 (Cth) would have insufficient prospects of success to warrant the grant of special leave to appeal. Special leave is refused with costs.

AT 12.37 PM THE MATTER WAS CONCLUDED