Centurion Trust Company Limited and Australian Securities and Inv Estments Commission

[2003] AATA 524

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 524

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   W2002/44

GENERAL DIVISION		)
Re		CENTURION TRUST COMPANY LIMITED

Applicant

And AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION 

Respondent

DECISION

Tribunal

  Justice Garry Downes, President

Murray Allen, Member

Date                21 May 2003

PlacePerth

Decision The Tribunal will adjourn into a hearing in camera at which it will hear evidence and submissions relating to those documents produced by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 to which the respondent objects to production to the applicant, with a view to it then determining whether any and if so what parts of the material should be disclosed to the applicant and on what terms.

...............................................

Justice Downes, President

CATCHWORDS

PRACTICE AND PROCEDURE – Administrative Appeals Tribunal Act 1975 s 35(2) – respondent claims material ought not be disclosed to applicant or public to avoid compromising investigation – respondent’s supporting evidence and submissions may be heard ex parte

Administrative Appeals Tribunal Act1975 s 35

Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247
Spargos Mining NL v Standard Chartered Australia Ltd (1989) 1 ACSR 311
Oliveri v Administrative Appeals Tribunal (1997) 50 ALD 190

REASONS FOR DECISION

Justice Downes, President
  Murray Allen, Member

1.         The background facts and the nature of the application for review before the Tribunal appear in reasons for decision of the Tribunal relating to preliminary matters given on 10 February 2003.  We will not repeat the matter set out in those reasons in these oral reasons for our further decision.  The application before us at present relates to the disclosure to the applicant of documents produced by the respondent and to the question of whether the Tribunal should hear evidence and further submissions in the absence of the applicant and the applicant's legal

advisers.

2. Pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 the respondent produced a set of documents relating to the issues which arise in the proceedings.  The documents are contained in five folders.  As to some of the documents, the respondent has no opposition to their being made available to the applicant.  Indeed, those documents have already been made available to the applicant.  However, there are a number of other documents to which the respondent objects to production to the applicant.  Those documents have been conveniently reproduced on blue pages in the five volumes of documents that have been lodged with the Tribunal.

3. The precise matter which came before the Tribunal this morning was the question of whether an order should be made under subs 35(2) of the Administrative Appeals Tribunal Act 1975 which would have the effect of preventing the applicants seeing the blue documents. Section 35(2) relevantly provides:

"35   Hearings to be in public exceept in special circumstances

...

(2) Where the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter, or for any other reason, the Tribunal may, by order:

(a) direct that a hearing or part of a hearing shall take place in private and give directions as to the persons who may be present; and

...

(c) give directions prohibiting or restricting the disclosure to some or all of the parties to a proceeding of evidence given before the Tribunal, or of the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to the proceeding."

4. It is worth noting that a post-script to s 35 cautions the Administrative Appeals Tribunal, as follows, in considering applications under the section:

“... [T]he Tribunal shall take as the basis of its consideration the principle that it is desirable that hearings or proceedings before the Tribunal should be held in public and that evidence given before the Tribunal, and the contents of documents lodged with the Tribunal or received in evidence by the Tribunal should be made available to the public and to all the parties but shall pay due regard to any reasons given to the Tribunal why the hearing should be held in private or why publication or disclosure of the evidence of the matter contained in the document should be prohibited or restricted."

5. The case put forward by the respondent is that disclosure of the material in the blue pages in the s 37 documents would compromise the investigation which it is engaged upon with respect to the trading of shares in the two companies who were identified in the major reasons we gave earlier this year.

6.        Ms Kerrie Papamihail, who is a senior legal officer with ASIC and who has been in charge of the investigation throughout its duration, has sworn an affidavit which sets out, in conclusionary form, some reasons why the material should not be disclosed.  The material contained in Ms Papamihail's affidavit has been criticised by counsel for the applicant as not containing detail but the respondent claims that the disclosure of the detail would itself amount to a disclosure that might compromise the
investigation. When Sir Gerard Brennan was the President of this Tribunal he dealt with the question of how the relevant provisions of subs 35(2) should be applied in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247, where he said, at 272:

"Yet the powers conferred upon this Tribunal by s 35(2) are not intended to lie dormant – they are to be exercised, albeit sparingly. The purpose of their exercise is to secure to the Tribunal the availability of as much relevant information as possible, without violating the confidentiality which a party, a witness or the public is properly entitled to preserve (though a proper entitlement to confidentiality is not lightly established).  A court may be constrained to violate that confidentiality in order to conduct its proceedings in public; but the Tribunal's powers are intended to facilitate the flow of relevant information to it, and if the exclusion of the public or even of a party is essential to preserve the proper confidentiality of the information needed to determine the application, then that is a price that has to be paid, however reluctantly."

7. Sir Gerard Brennan succinctly brings together, in that passage, the twofold requirements of conducting the affairs of the Tribunal in the presence of the public, and particularly the parties, whenever possible, but with the qualification that circumstances may arise which compel the public, or even a party, to be excluded. Mr Bennett, who appears for the applicant in this matter, in his closing address said that as little material as possible, consistently with the requirements of subs 35(2), should be held back from the parties and we agree entirely with that approach.

8. Although he was not dealing with s 35 of the Administrative Appeals Tribunal Act, nor with any proceedings involving the Australian Securities and Investments Commission, Mr McClelland J of the Supreme Court of New South Wales, in Spargos Mining NL v Standard Chartered Australia Ltd (1989) 1 ACSR 311, succinctly described the basis upon which it might be said that the subject matter of an ASIC investigation should be treated as confidential. He said (at 312):

"In my opinion, documents within the possession of the Commission of a confidential nature recording information received by the Commission relating to possible offences or irregularities, or recording information received in the course of the investigation the possible offences or irregularities, including the identity of informants, and confidential documents recording the actual or possible course of such investigations or particulars of available or potentially available evidence, are in the public interest prima facie immune from compulsory disclosure, on the basis that such disclosure would be likely to seriously impede the ability of the Commission to fulfil its functions of effectively investigating possible offences under, inter alia, the Companies (NSW) Code, and in appropriate cases instituting and prosecuting criminal or civil proceedings in the public interest."

9.        However his Honour went on to confirm (at 312) that what is involved is a balancing exercise which requires:

"...[T]he nature of the injury to the public interest which would be involved in disclosure ... [to be balanced] against the forensic importance of the documents in the circumstances of the particular litigation, and the nature of that litigation."

10.      Spargos was not a case in which the issue before the court involved the precise subject matter dealt with by the documents sought to be produced, nor was it a case in which the Australian Securities and Investments Commission was a party.  The present proceedings are therefore quite different to the proceedings in Spargos..  In particular, the documents as such, as opposed to the factual material which they evidence, may be relevant to the issues which arise in the present case.  We explain that observation in this way.  One of the issues in the present proceedings is whether there has been unjustified delay in the conduct of the investigation.  We apprehend that some of the documents which the respondent seeks to hold confidential will address that very issue.  At a final hearing of these proceedings the absence of such documents may create problems.

11.      It is clear that before the Tribunal makes a decision about the disclosure of the documents the Tribunal should examine the documents for itself.  Such an approach accords with conventional authority and has the approval of Madgwick J in Oliveri v Administrative Appeals Tribunal (1997) 50 ALD 190. However, the respondent suggests that we should go further and hear evidence and submissions, in the absence of the parties, in support of the claim to confidentiality. We think that a court or Tribunal ought to resist, wherever possible, applications to hear submissions by one party in the absence of other parties. The reasons are obvious. However, we must remember that we are not a court but rather an administrative decision making body forming part of the executive arm of the Commonwealth Government of Australia.

12. As many judges and members of the Tribunal have observed, we will ultimately stand in the shoes of the respondent in making our decision in this case. Moreover, subs 35(2) expressly provides for the Tribunal to make orders that it will, from time to time, exclude the public and even the parties.

13.      It seems to us that there is a possible advantage to the applicant in the Tribunal acceding to the course that is proposed by the respondent, once the Tribunal has determined, as it has, that it will not simply make all the documents available without inspecting them.  This is because although the respondent may think that the opportunity of putting submissions in camera before the Tribunal will give it the opportunity to further explain its position, we think that it will give the Tribunal itself, to a limited degree, the opportunity to act as a contradictor and to take steps to question the claims that are put forward in a way that it might not have been able to do had it merely acted upon assertion and a reading of the documents.

14.      It was submitted to the Tribunal that it would be appropriate for the Tribunal to permit a limited disclosure of the documents.  However, it seems to us that now is not the time to permit a limited disclosure, even if that disclosure were to be confined to the legal representatives of the applicants.  In fact, the applicant’s submission appears to be that any limited disclosure should be to both the legal representatives and to the applicant itself, but on the basis that undertakings would be given relating to keeping the material confidential.

15.      It seems to us that there are difficulties with such an approach and that in any event it would be better for us to wait until we have examined the documents for ourselves and heard what further is to be said about them from the respondent before we make a decision on that issue.

16.      One submission that has been made on behalf of the applicant, is that we have been asked to sit in camera and hear evidence and submissions relating to these documents on a paucity of supporting evidence, such evidence being basically conclusions which do not inform the reader or hearer as to any acceptable basis for them. They are what might be described as the "trust me" submissions.

17.      We think that notwithstanding this, it is appropriate for the present, for the Tribunal to trust the respondent, but as we made clear during the course of the submissions, there will be kept a transcript of the closed session and should it appear that matter disclosed in that transcript, is not in the opinion of the Tribunal confidential, then we see no reason at present why those parts of the transcript which relate to the material which the Tribunal does not consider to be confidential, cannot be made available to the applicant.  The problem from the Tribunal's point of view is that it has a duty not to act in such a way as will reveal material, which should not be disclosed, without being satisfied about that matter before disclosure.  This can only be achieved by a hearing of the kind that is proposed, given that the respondent has informed us that if anything more is said, there will be an untoward disclosure of confidential information.

18.      The Tribunal accordingly now proposes to adjourn into a hearing in camera at
which it will hear evidence and submissions relating to the blue documents, with a view to it then determining whether any and if so what parts of the material should be disclosed to the applicant and on what terms.

I certify that the eighteen (18) preceding paragraphs are a true copy of the reasons for the decision herein of:
Justice Garry Downes, President
Murray Allen, Member

Signed:         .......................................................................................
  Associate

Dates of Hearing  21 May 2003                  

Date of Decision  21 May 2003

Counsel for Applicant                M Bennett

Solicitor for Applicant               Bennett & Co.

Counsel for Respondent         A Jones

Solicitor for Respondent          Australian Securities and Investments Commission