Churche v Australian Securities and Investments Commission (No. 2)
[2006] FCA 923
•20 JULY 2006
FEDERAL COURT OF AUSTRALIA
Churche v Australian Securities and Investments Commission (No. 2) [2006] FCA 923
ADMINISTRATIVE LAW – whether a decision to which the Administrative Decisions (Judicial Review) Act applies (to make transcripts of s 19 examinations available to APRA) is excluded from the operation of s 13 by reason of s 13(11)(c) as a decision relating to the administration of criminal justice.
Held: the respondent’s decision was not a decision relating to the administration of criminal justice within Schedule 2 paragraph (e) to the Act
Australian Securities and Investments Commission Act 2001 (Cth) s 19
Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 3(1), 5, 13, Schedule 2(e)
Insurance Act 1973 (Cth)
Criminal Code Act 1995 (Cth)
Crimes Act 1914 (Cth)Australian Securities Commission v Somerville (1994) 51 FCR 38
Federal Commissioner of Taxation v Nestle Australia Limited (1986) 12 FCR 257
Mostyn v Deputy Federal Commissioner of Taxation (1986) 86 ATC 4930
Hatfield v Health Insurance Commission (1987) 15 FCR 487
Jones v Dunkel (1959) 101 CLR 298
West v Government Insurance Office of New South Wales (1981) 148 CLR 62WARWICK JAMES CHURCHE v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
NSD 866 OF 2006
GRAHAM J
20 JULY 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 866 OF 2006
BETWEEN:
WARWICK JAMES CHURCHE
ApplicantAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
RespondentJUDGE:
GRAHAM J
DATE OF ORDER:
20 JULY 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The separate questions ordered on 3 July 2006 be answered as follows:
‘1. No.
2. Does not arise’
2. Costs of the hearing of the separate questions reserved pending further submissions.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 866 OF 2006
BETWEEN:
WARWICK JAMES CHURCHE
ApplicantAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent
JUDGE:
GRAHAM J
DATE:
20 JULY 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
In these proceedings the applicant seeks review of a decision of the respondent made on 27 April 2006 to provide the Australian Prudential Regulation Authority (‘APRA’) with a copy of a transcript of an examination of the applicant under s 19 of the Australian Securities and Investments Commission Act 2001 (Cth) (‘the ASIC Act’) which was conducted by the respondent on 14, 15 and 21 April 2005.
The proceedings were commenced by an application filed on 5 May 2006 which was superseded by an amended application filed on 5 June 2006.
The matter is presently before the Court pursuant to orders made on 3 July 2006 in accordance with Order 29 rule 2 of the Federal Court Rules (‘the Rules’). Those orders posed the following questions for decision separately from and before any other question in the proceedings:
‘ “Decision” means the decision of the respondent made on 27 April 2006 to provide the Australian Prudential Regulation Authority with a copy of the transcript of the applicant’s s 19 examination conducted by the respondent on 14, 15 and 21 April 2005.
1.Is the Decision included in the class of decisions set out in paragraph (e) of Schedule 2 to the Administrative Decisions (Judicial Review) Act 1977 (Cth)?
2.If the answer to 1 is Yes, should the Court make an order that the respondent file and serve within 28 days of the making of the order an affidavit which sets out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving reasons for the Decision?’
By letter dated 2 May 2006 the solicitors for the applicant wrote to the respondent as follows:
‘I refer to your letter of 27 April 2006.
I note that ASIC has made a decision under section 127(2A)(c) of the ASIC Act 2001 to provide APRA with a copy of the transcript of Mr Churche’s section 19 examination (the transcript).
The decision made by ASIC to provide the transcript to APRA is a reviewable decision under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). Mr Churche is entitled to approach the Court to seek a review of that decision.
Before Mr Churche makes an application to the Court, Mr Churche requests that ASIC provide him with a written statement under section 13 of the ADJR Act which sets out the material questions of fact, or other material, on which it based its decision to provide a copy of the transcript to APRA.
Section 13 of the ADJR Act requires a written statement to be provided within 28 days of the decision maker’s receipt of the request.
Please confirm that ASIC will provide a written statement under section 13 of the ADJR Act and that APRA will not take any steps to release the transcript to APRA until 7 days after receipt by me of the written statement.
If I do not hear from you by 3.00 pm on Wednesday 3 May 2006, Mr Churche will have no option but to seek urgent injunctive relief preventing ASIC from releasing the transcript to APRA.
I await your urgent response.
…’
By a facsimile dated 3 May 2006 the respondent replied as follows:
‘We refer to your letter dated 2 May 2006.
We advise that ASIC will not be providing a statement of reasons in this matter as the decision is one which is excluded from the requirement to provide reasons by virtue of paragraph (e) of Schedule 2 of the Administrative Decisions (Judicial Review) Act 1977 (Cth).
…’The question of whether or not the applicant is entitled to a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the respondent’s decision made on 27 April 2006 depends upon whether the decision in question was a ‘decision to which this section applies’ within the meaning of s 13(11) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘the AD(JR) Act’).
Section 13 of the AD(JR) Act relevantly provides:
‘13(1)Where a person makes a decision to which this section applies, any person who is entitled to make an application to the Federal Court or the Federal Magistrates Court under section 5 in relation to the decision may, by notice in writing given to the person who made the decision, request him or her to furnish a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision.
(2)Where such a request is made, the person who made the decision shall, subject to this section, as soon as practicable, and in any event within 28 days, after receiving the request, prepare the statement and furnish it to the person who made the request.
…
(4A)The Federal Court or the Federal Magistrates Court may, on the application of:
(a) a person to whom a request is made under subsection (1); …
…
make an order declaring that the person who made the request concerned was, or was not, entitled to make the request.
…
(11)In this section, decision to which this section applies means a decision that is a decision to which this Act applies, but does not include:
(a)a decision in relation to which section 28 of the Administrative Appeals Tribunal Act 1975 applies;
(b)a decision that includes, or is accompanied by a statement setting out, findings of facts, a reference to the evidence or other material on which those findings were based and the reasons for the decision; or
(c)a decision included in any of the classes of decisions set out in Schedule 2.’
(emphasis in original)
Under s 3(1) of the AD(JR) Act the expression ‘decision to which this Act applies’ is defined as follows:
‘3(1) In this Act, unless the contrary intention appears:
…
“decision to which this Act applies” means a decision of an administrative character made, proposed to be made, or required to be made (whether in the exercise of a discretion or not and whether before or after the commencement of this definition):(a)under an enactment referred to in paragraph (a), (b), (c) or (d) of the definition of enactment; or
(b)by a Commonwealth authority or an officer of the Commonwealth under an enactment referred to in paragraph (ca) or (cb) of the definition of enactment; other than:
(c)a decision by the Governor-General; or
(d)a decision included in any of the classes of decisions set out in Schedule 1.’
(emphasis in original)
The respondent accepts that the decision made on 27 April 2006 was a decision to which the AD(JR) Act applies. However, the respondent contends that the decision was not a decision to which s 13 applies by virtue of s 13(11)(c) of the Act and in particular paragraph (e) of Schedule 2 thereto. Schedule 2 to the Act is entitled ‘CLASSES OF DECISIONS THAT ARE NOT DECISIONS TO WHICH SECTION 13 APPLIES’. It includes the following as paragraph (e), namely:
‘(e)decisions relating to the administration of criminal justice, and, in particular:
(i)decisions in connection with the investigation, committal for trial or prosecution of persons for any offences against a law of the Commonwealth or of a Territory;
(ii)decisions in connection with the appointment of investigators or inspectors for the purposes of such investigations;
(iii)decisions in connection with the issue of warrants, including search warrants and seizure warrants, under a law of the Commonwealth or of a Territory;
(iv)decisions under a law of the Commonwealth or of a Territory requiring the production of documents, the giving of information or the summoning of persons as witnesses.
(v)decisions in connection with an appeal (including an application for a new trial or a proceeding to review or call in question the proceedings, decision or jurisdiction of a court or judge) arising out of the prosecution of persons for any offences against a law of the Commonwealth or of a Territory;’
For the purposes of this case the respondent contends that its decision made on 27 April 2006 was a decision ‘relating to the administration of criminal justice’, and, in particular, a decision ‘in connection with the investigation … of persons for ... offences against’ the Insurance Act 1973 (Cth), the Criminal Code Act 1995 (Cth) or the Crimes Act 1914 (Cth).
By letter dated ‘10 November 2005’ which was apparently prepared and sent in or about mid February 2006 the respondent advised the solicitors for the applicant as follows:
‘As you are aware, the Australian Securities and Investments Commission (“ASIC”) has been conducting an investigation into the circumstances in which [an insurance company] negotiated and entered into certain reinsurance contracts with [another company].
I write to advise that, in the view of ASIC, the admissible evidence assembled to date does not constitute a sufficient basis on which a recommendation can be made to the Commonwealth DPP to prosecute any person for a contravention of a provision of the Corporations Act. In so advising, ASIC reserves its position should sufficient admissible evidence become available.
…
ASIC has received a request from APRA for the release to it of, relevantly, the transcripts of examinations conducted by ASIC pursuant to s 19 of the ASIC Act. ASIC is authorised (section 127(2A)(c) of the ASIC Act) to provide the transcripts to APRA.ASIC examined Mr Churche on 14, 15 and 21 April 2005, and a copy of the transcripts of his examination were provided to, and signed by, Mr Churche. Before making a decision whether to provide to APRA a copy of Mr Churche’s transcripts, I offer Mr Churche the opportunity to make a submission to ASIC on whether the transcripts should be so released.
…’
APRA’s request for copies of, amongst other things, the transcript of the applicant’s examination was contained in an email from APRA to ASIC of 24 January 2006 at 3.20 pm. This email appears to have been responsive to an email sent by ASIC to APRA at 2.23 pm on the same day in which ASIC said:
‘Further to our telephone conversation yesterday, I would be grateful if APRA would please advise whether it proposes to make a formal application for the s 19 transcripts arising from ASIC’s investigation.
…’
In APRA’s response it said:
‘APRA wishes to request copies of the following documents relating to ASIC’s investigation into [a named insurance company] and/or [a named financial services company]:
1. A copy of each s 19 transcript obtained by ASIC;
…
APRA wishes to use these documents to assess whether it may be possible to prosecute any criminal offences under the Insurance Act 1973, the Criminal Code Act or the Crimes Act. (If so, APRA would propose to provide copies of any of these documents to the DPP.) APRA may also wish to use these documents to consider whether disqualification or similar action may be taken against any individual under the Insurance Act 1973 (eg s.25A).Accordingly, I would be grateful if you would seek instructions as to whether these documents can be provided to APRA, to assist APRA in the performance of its functions and/or the discharge of its duties under the Insurance Act and any other relevant legislation.
…’
The applicant draws attention to the fact that APRA’s request for copies of the relevant transcripts was to facilitate an assessment by APRA as to whether it may be possible to prosecute any criminal offences and secondly to enable APRA to consider whether disqualification or similar action may be taken under the Insurance Act 1973 (Cth). The third stated purpose of the request namely ‘to assist APRA in the performance of its functions and/or the discharge of its duties under the Insurance Act and any other relevant legislation’ would appear to be repetitive of the second reason for its request and to be unrelated to any investigation of persons for offences against a law of the Commonwealth.
It may also be observed that APRA’s request for copies of s 19 transcripts was somewhat indiscriminate. It sought the provision of such transcripts regardless of the identity of the person examined and regardless of whether such transcripts were obtained by ASIC in relation to ASIC’s investigation of the named insurance company or the named financial services company or both.
The available evidence does not provide a clear connection between APRA’s requests for transcripts and ASIC’s ultimate decision of 27 April 2006 to release transcripts of the applicant’s examination conducted on 14, 15 and 21 April 2005.
A letter from APRA to the applicant’s solicitors dated 23 March 2006 revealed that APRA was engaged in what it described as ‘an investigation into the improper use of reinsurance arrangements’.
Section 13 applies whether or not the person aggrieved has applied to the Court for an order of review in respect of the decision in respect of which reasons may be sought (per Black CJ, Ryan and Olney JJ in Australian Securities Commission v Somerville (‘Somerville’) (1994) 51 FCR 38 at 48).
The purpose of s 13 statements is to ensure that a person who is entitled to apply to the Court under s 5 of the AD(JR) Act for an order of review may be furnished with a statement of the findings and reasons for the decision so that he or she may be in a position to consider his or her challenge or perhaps prospective challenge to the decision. The section provides machinery to inform citizens of matters fundamental to decisions of an administrative character which affect them so that they may be better informed and therefore better equipped to determine their future course of action (per Bowen CJ, Lockhart and Sheppard JJ in Federal Commissioner of Taxation v Nestle Australia Limited (‘Nestle’) (1986) 12 FCR 257 at 265).
Independently of s 13 of the AD(JR) Act, the Court, in the control of its own process, cannot be kept in the dark as to what the decision-making process may have been (per Lockhart J in Mostyn v Deputy Federal Commissioner of Taxation (1986) 86 ATC 4930 at 4932).
The inclusion of s 13 in the AD(JR) Act does not preclude the Court from ordering discovery and inspection or any other interlocutory relief (see Nestle at 265 and Somerville at 48. See also s 13A(4) of the AD(JR) Act).
A s 13 statement and the Court’s powers in relation to discovery and inspection are of a basically different nature and different time scales apply to them. Courts may take into account in the exercise of discretion, on an application for discovery or inspection, whether a s 13 statement has been sought or provided, whether it is sufficient and whether it is appropriate to leave the parties to their rights under s 13, including the right to obtain further and better particulars under s 13(7) (per Bowen CJ, Lockhart and Sheppard JJ in Nestle at 265). One might also add as an alternative, whether it is appropriate to leave the parties to their rights under s 13, including the right to seek a declaration under s 13(4A).
In Hatfield v Health Insurance Commission (1987) 15 FCR 487 Davies J considered Schedule 2(e) of the ADJR Act. In relation to the expression ‘relating to’ his Honour said at 491:
‘Expressions such as “relating to”, “in relation to”, “in connection with” and “in respect of” are commonly found in legislation but invariably raise problems of statutory interpretation. They are terms which fluctuate in operation from statute to statute. …
The terms may have a very wide operation but they do not usually carry the widest possible ambit, for they are subject to the context in which they are used, to the words with which they are associated and to the object or purpose of the statutory provision in which they appear.’
In relation to paragraph (e) of Schedule 2 Davies J said at 493:
‘His Honour [referring to the judgment of Pincus J in Murphy v KRM Holdings Pty Limited (1985) 8 FCR 349] was pointing to the fact that par (e) uses the words “relating to” not primarily with respect to matters which are peripheral to the administration of criminal justice or to the investigation of persons for offences but to matters which form part of the process of the administration of justice and of the investigation of persons for offences.
In my opinion par (e) refers to decisions which are part of the administration of justice and part of the investigation of persons for offences and also … to decisions that are ancillary or incidental thereto or made in assistance thereof. The paragraph does not, however, encompass decisions which are not made in the course of the administration of justice or the investigation of persons for offences but which are simply connected in an indirect manner therewith. Decisions of the latter type do not have the necessary relationship.’
As to whether the decision of ASIC to provide APRA with a copy of the transcript of the examination in question in this case was a decision relating to the administration of criminal justice and, in particular, a decision in connection with the investigation of persons for offences against a law of the Commonwealth, Senior Counsel for the applicant submits that the respondent’s reliance upon the exclusion for which Schedule 2 provides in respect of the provision of a s 13 statement cannot be left to guess work. He refers to the illustration provided by Dixon CJ in Jones v Dunkel (1959) 101 CLR 298 at 304 as follows:
‘It is possible … to say that if you have an empty diesel truck coming down a winding road on the outside at thirty-five miles per hour and an International truck going up the road on the inside at twenty-five miles per hour, the former is more likely than the latter to be over the centre line of the road on its wrong side. But that is only to say that of two guesses one is more probable than the other.’
At 305 the Chief Justice continued by saying
‘… the law … does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.’
(See also per Stephen, Mason, Aickin and Wilson JJ in West v Government Insurance Office of New South Wales (1981) 148 CLR 62 at 66.)
In relation to the construction of paragraph (e) of Schedule 2 to the AD(JR) Act, it seems to me significant that the general preamble is followed by the words ‘and, in particular’ rather than by words such as ‘including’ or ‘for example’.
It seems to me that subpara (i) of paragraph (e) is intended to cover decisions such as those reached by a Magistrate who may determine that a person be committed for trial or of a person in the position of the Director of Public Prosecutions who may decide that a particular person be prosecuted for an offence. Whilst it may be possible to extend the reach of the subparagraph to include decisions made by APRA in connection with its own investigation of persons for offences, it does not seem to me that the subparagraph was intended to apply to decisions by third parties, such as the respondent in the instant case, to make records in their possession available to a requesting body such as APRA. The tenuous nature of the connection between ASIC’s decision to provide a copy of the relevant transcript to APRA and APRA’s investigation, which may or may not utilise the material so provided, militates against a finding that the relevant decision in this case was one to which paragraph (e) of Schedule 2 of the AD(JR) Act applied. Furthermore, absent the words of particularity contained in the subparagraphs within paragraph (e), one could hardly describe ASIC’s decision as one ‘relating to the administration of criminal justice’. APRA’s disclosed purpose for making its request provides no certainty that each and every transcript to which its request applied was sought with a view to investigating whether offences against the three nominated Acts or any of them had been committed. As indicated above, APRA’s request was not limited to the provision of the transcript of the applicant’s examination, nor was it limited to transcripts of examinations in relation to the affairs of an insurance company.
For the foregoing reasons I am of the opinion that question one as asked should be answered in the negative. In the circumstances question two does not arise. I should say, however, that it would not seem to me appropriate for the Court to make an order that the respondent cause an affidavit to be provided which to all intents and purposes amounted to a s 13 statement in disguise. This does not mean that the Court would not be vigilant to ensure that it was not kept in the dark and would not, by means of its traditional interlocutory processes including discovery, inspection, interrogatories and the production of documents to the Court, ensure that a person in the position of the applicant was in a position where he could mount a proper challenge to the decision in respect of which review had been sought.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate:
Dated: 20 July 2006
Counsel for the Applicant: M Cashion SC Solicitor for the Applicant: Henry Davis York Counsel for the Respondent: M N Allars Solicitor for the Respondent: S E Le Breton of Australian Securities and Investments Commission Date of Hearing: 13 July 2006 Date of Judgment: 20 July 2006
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