Cohen and Australian Prudential Regulation Authority
[2006] AATA 512
•13 June 2006
CATCHWORDS – PRACTICE AND PROCEDURE – HEARING OF APPLICATION- whether review should be deferred pending resolution of criminal proceedings – deferred
Administrative Appeals Tribunal Act 1975 ss 25, 33, 35 and 37
Australian Securities and Investments Commission Act 2001 s 19
Corporations Act 2001 s 1309
Corporations Law
Insurance Act 1973 ss 25, 25A and 26
Supreme Court Act 1970 (NSW) s 23
Accident Insurance Holdings Ltd v McFadden (1993) 31 NSWLR 412 (CA)
Baker v Campbell (1983) 153 CLR 52; 49 ALR 385; 57 ALJR 749
Brebner v Perry [1961] SASR 177
Dolan and Australian and Overseas Telecommunications Corporation (1993) 42 FCR 206; 114 ALR 231; 31 ALD 510
Duncan v Fayle (2004) 138 FCR 510; 38 AAR 541; [2004] FCA 723
Esber v The Commonwealth (1992) 174 CLR 430; 106 ALR 577; 66 ALJR 373
Hurley v Commissioner of Taxation (1992) 37 FCR 11
Lamb v Munster (1882) 10 QBD 110
Reid v Howard (1995) 184 CLR 1; 131 ALR 609; 69 ALJR 863
Sorby v The Commonwealth (1983) 152 CLR 281; 46 ALR 237; 57 ALJR 248
Street Nation Pty Ltd and Australian Communications Authority (2004) 40 AAR 68; 86 ALD 433; [2004] AATA 1251
The State of Queensland v The Australian Industrial Relations Commission (2000) 105 FCR 584; [2000] FCA 1654
DECISION AND REASONS FOR DECISION [2006] AATA 512
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2006/15
GENERAL ADMINISTRATIVE DIVISION )
Re GEOFFREY ARTHUR COHEN
Applicant
AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 13 June 2006
Place: Melbourne
Decision:Until further order the Tribunal:
1.defer hearing of the application filed in V2006/15 until after the conclusion of the criminal proceedings against the applicant under the Corporations Act 2001; and
2.adjourn further consideration to a telephone directions hearing on 9 October 2006 at 9.30am.
S A FORGIE
Deputy President
REASONS FOR DECISION
The applicant, Mr Geoffrey Arthur Cohen, has applied for review of a decision of the respondent, the Australian Prudential Regulation Authority (APRA), to disqualify him under s 25A(1) of the Insurance Act 1973 (Insurance Act). APRA’s decision, which was made on 26 September 2005 and confirmed on 9 December 2005, followed its finding that Mr Cohen is not a fit and proper person to act as a director or senior manager of a general insurer, foreign general insurer or authorised no-operating holding company. Mr Cohen has also been charged with two criminal offences arising out of the events leading to his disqualification. The committal hearing in relation to those charges is listed for hearing during the week commencing 25 September 2006 in the Magistrates’ Court in New South Wales. He has asked that the Tribunal defer hearing his application until after the resolution of the criminal charges but APRA wants the hearing to proceed in the normal course. I gave an oral decision to defer the hearing until after the conclusion of the criminal charges but to hold a directions hearing from time to time to monitor progress of the hearing of the criminal charges. These are my reasons.
BACKGROUND
For the purpose of determining this aspect of the matter only, I make the following findings of fact based on the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act), Mr Cohen’s affidavit sworn on 27 April 2006 and an affidavit of his solicitor, Mr Scott Anthony McDonald, sworn on 27 April 2006.
Mr Cohen was a non-executive director and Chairman of the Board of Directors of HIH Insurance Limited (HIH) during the period from January 1992 to 15 March 2001. On 13 September 2000, HIH entered an agreement with Allianz Australia Limited (Allianz) to form a joint venture. At HIH’s Annual General Meeting (AGM) held on 20 December 2000, Mr Cohen made certain statements regarding that joint venture.
In reaching his decision, APRA’s delegate referred to Mr Cohen’s part in negotiating the joint venture with Allianz. In summary, the delegate made findings of fact that Mr Cohen had made or approved decisions without having sufficient information. The delegate also made a number of findings of fact in relation to other matters relating to the manner in which Mr Cohen had fulfilled his responsibilities as a non-executive director and Chairman of the Board of Directors. Those other matters fell under five main headings.
On 15 November 2005, Mr Cohen was charged with two offences:
that, contrary to s 1309(1) of the Corporations Act 2001, he knowingly gave information that was false or misleading at the AGM; and
that, contrary to s 1309(2) of the same Act, he gave information that was false or misleading at the AGM.
In mid February 2006, the Director Public Prosecutions (DPP) sent Mr McDonald a disk of his brief in respect of the charges. When printed, the brief comprised over 10,000 pages of 18 witness statements or transcripts of evidence taken under s 19 of the Australian Securities and Investments Commission Act 2001 as well as annexures and exhibits.
On 18 April 2006, the Local Court listed the matter for a committal hearing. Mr McDonald had already notified the DPP of the 13 witnesses whom Mr Cohen intended to call. Examination of the issues relating to Allianz will require Mr Cohen and his solicitors to review all evidence given in relation to them as well as all documents relating to board meetings, communications and papers relating to the period 1 September 2000 to 31 December 2000. Mr Cohen’s presence will be required in Sydney to assist his legal representatives prepare for the committal proceedings and to give instructions. Should Mr Cohen be committed for trial on either or both of the charges, it is expected that the trial will take place in the Supreme Court of New South Wales over a two week period at an indeterminate time in 2007.
SUBMISSIONS
On Mr Cohen’s behalf, Mr Moshinsky relied on four main aspects. In summary, they are:
If Mr Cohen is convicted of either or both of the criminal offences, the Tribunal’s review of the decision will be pointless; Mr Cohen will be a disqualified person even if the Tribunal were to set aside APRA’s decision. That would be the effect of s 25(1)(a)(iii) of the Insurance Act.
APRA will not suffer any prejudice if the Tribunal’s proceedings are deferred;
Mr Cohen’s status as a disqualified person under the Insurance Act continues as he has not applied for a stay of APRA’s decision; and
Mr Cohen would suffer substantial prejudice were the application to the Tribunal to be heard before the criminal charges.
Mr Archibald, representing APRA, opposed the application. Again in summary, his main points were:
It is in both APRA’s and the public interest that the application be heard in the normal course of events.
Mr Cohen’s concern that he will suffer prejudice if the application is heard first can be accommodated by the Tribunal’s making an order under s 35 of the AAT Act to protect any evidence he might give were he to waive his privilege not to incriminate himself.
Mr Cohen chose to apply for review of the decision in the Tribunal after he was charged with the criminal offences. His concerns regarding his giving evidence should be discounted as he could have chosen not to apply for review of the decision. Instead, he could have chosen to apply to APRA to revoke the disqualification after the criminal charges had been heard and decided.
APRA, as the decision-maker, has a right to have the application in the Tribunal heard and determined. It is a grave matter to defer what is a public process.
If the proceedings are to be deferred, they should not be deferred indefinitely but to a specific date.
CONSIDERATION
General principles
In Street Nation Pty Ltd and Australian Communications Authority,[1] I reviewed a number of authorities regarding the issue that I must consider. They were concerned with resolving the issue in the courts but I summarised their application to proceedings in the Tribunal in this passage:
[1] (2004) 40 AAR 68; 86 ALD 433; [2004] AATA 1251
“An applicant pursuing a right of review in the Tribunal while facing criminal proceedings may face injustice in one or other of the proceedings unless the Tribunal exercises special care. Relevant factors in considering what amounts to injustice will include:
(1)the proximity of the criminal proceedings. If they are to be heard and determined in the near future and there are no countervailing factors, justice may require that the Tribunal proceedings are heard after the criminal proceedings;
(2)whether the applicant in the Tribunal has already disclosed all of its evidence in both the Tribunal proceedings and those in the criminal courts;
(3)if the criminal proceedings are ultimately to be heard by a jury, any possible publicity that may reach a jury;
(4)whether the applicant wishes to proceed in the Tribunal before the criminal proceedings or regardless of when the criminal proceedings are heard;
(5)whether the applicant has been properly advised regarding such matters as the right to silence and possible consequences of having the Tribunal matter heard first;
(6)whether the disclosure of evidence in the Tribunal could lead the respondent to make inquiries that it would not otherwise have known it should be making; and
(7)any adverse effect on the applicant and the respondent in not having the application in the Tribunal heard and determined in the normal course of business.”[2]
[2] (2004) 40 AAR 68 at 83; 86 ALD 433 at 413; [2004] AATA 1251 at [44]
In deciding whether there is any adverse effect on the parties, regard might be had to a wide range of matters. Some will relate to the burden placed on the applicant in preparing for two sets of proceedings at a time if that be the case. Another may relate to the respondent’s having to defer the matter and, in doing so, possibly incurring costs. Once all of the relevant factors have been considered, the ultimate question for the Tribunal to determine is just where the pendulum of justice between the parties falls.
Rights arising from Mr Cohen’s lodging an application
Mr Cohen had a right to apply to the Tribunal for review of APRA’s decision. That right arises from a reading of s 25 of the AAT Act and ss 25A(6) and 63 of the Insurance Act. His right leads to corresponding duties. One duty is upon the Tribunal to hear his application. Another is upon APRA to comply with consequential statutory duties such as the duty to lodge documents under s 37 of the AAT Act. Mr Cohen’s right leads to a further right; both he and APRA have a right to have the application heard and determined.[3]
[3] The State of Queensland v The Australian Industrial Relations Commission (2000) 105 FCR 584 at 599-600; [2000] FCA 1654 at [40] citing Esber v The Commonwealth (1992) 174 CLR 430 at 440; 106 ALR 577 at 583 ; 66 ALJR 373 at 377 per Mason CJ, Deane, Toohey and Gaudron JJ
His right cannot be compromised by the fact that he might have made choices other than lodging an application for review. As Mr Archibald submitted, Mr Cohen could have decided to wait until time had passed and to then apply to APRA that he is not a disqualified person. He could have done that under s 26(1) Insurance Act. In considering whether or not to make the determination, APRA would have to be “… satisfied that the person is highly unlikely to be a prudential risk to any general insurer or authorised NOHC.”[4] Its determination would take effect on the day on which it was made.[5] Therefore, even if APRA made a determination that Mr Cohen was not a disqualified person and did so unconditionally, he would still have been a disqualified person from 26 September 2005 until the date of the determination. It could not be backdated. Mr Cohen would be in a different position were he successful in his application for review of APRA’s disqualification decision under s 25A of the Insurance Act. Certainly, he would be a disqualified person until the decision were set aside. Once it had been set aside, he would be taken as not having been a disqualified person at all.
[4] Insurance Act, s 26(2)
[5] Insurance Act, s 26(5)
Mr Cohen’s right is not without qualification, however, and nor can it be when the Tribunal has more than one application to consider. That is not to say that the Tribunal will not hear the application as quickly as it can but that does not mean that it is required to hear it regardless of all other considerations. Its procedure lies in its discretion.[6] In determining what that procedure will be, s 33 of the AAT Act recognises that there may be factors in addition to expedition that may impinge on its decision in relation to a particular application. Reference is made to such factors in s 33(1)(b), which provides that:
“In a proceeding before the Tribunal:
…
(b)the proceeding shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit”.
[6] AAT Act, s 33(1)
A relevant consideration is whether the proceedings in the Tribunal have purpose. This is a different question from whether the proceedings are frivolous or vexatious within the meaning of s 42B of the AAT Act. The answer to that question:
“…is a decision which finally disposes of the application. It has necessarily involved a consideration of the merits in the sense that it requires a finding that the application cannot succeed.”[7]
The answer to the question I have posed is determined by an applicant such as Mr Cohen in making a choice whether to invest financial and emotional resources in continuing the application. If Mr Cohen chooses to continue with it, the Tribunal must hear it.
[7] Duncan v Fayle (2004) 138 FCR 510 at 517; 38 AAR 541 at 548; [2004] FCA 723 at [22]
Although that question can only be answered by Mr Cohen, the fact that it is a real question for him in the circumstances that he finds himself is relevant in deciding whether or not to defer his application until he has had time to answer it. Those circumstances concern the criminal charges that he faces in New South Wales. If he is convicted of those charges, he will have been convicted of an offence against or arising out of the Corporations Act 2001 or the Corporations Law previously in force. By virtue of s 25(1)(a)(iii), he will be a disqualified person. Even if the Tribunal had previously set aside APRA’s decision under s 25A, he would remain a disqualified person. If the Tribunal set aside APRA’s decision after his conviction, he would still be a disqualified person by virtue of s 25(1)(a)(iii). There would be no point in his having had his application heard.
That there would be no point if he were convicted is relevant to the Tribunal, as I have said. If Mr Cohen wanted to continue with his application, I would not think it appropriate to adopt a paternalistic approach and decide that the Tribunal’s proceedings should be deferred in any event. The concerns I had in Re Street Nation Pty Ltd and Australian Communications Authority would not trouble me in this case. Where, as is the case with Mr Cohen, he has had access to legal advice, the criminal proceedings are soon to commence and the outcome of those proceedings will determine whether or not he would want to proceed with his application, significant weight should be accorded to his wish to defer the hearing of the application.
Some weight also needs to be given to the proper use of public money. If for all practical purposes the hearing of the application may be of academic interest only, pursuing it at this stage is not an appropriate use of public money. If Mr Cohen wishes to pursue his application even though the outcome may be of academic interest only, that is his right and public money would need to be spent in APRA’s taking part in the proceedings and the Tribunal’s conducting them. Until Mr Cohen makes his decision, resources are better directed to those cases that have a practical outcome even if their academic interest may or may not be as great.
The relevance of Mr Cohen’s privilege against self-incrimination
The privilege against self-incrimination is not a rule of evidence[8] but a “… basic and substantive common law right. … It operates so that a person cannot be compelled ‘to answer any question, or to produce any document or thing, if to do so “may tend to bring him into the peril and possibility of being convicted as a criminal”’ ….[9] As it is not a rule of evidence, it is not affected by the provision in s 33(1)(c) that the Tribunal is not bound by the rules of evidence but may inform itself on a matter in a manner that it thinks appropriate.
[8] Baker v Campbell (1983) 153 CLR 52 at 127; 49 ALR 385 at 442-443; 57 ALJR 749 at 780 per Dawson J
[9] Reid v Howard (1995) 184 CLR 1 at 11; 131 ALR 609 at 616; 69 ALJR 863 at 868 per Toohey, Gaudron, McHugh and Gummow JJ citing Sorby v The Commonwealth (1983) 152 CLR 281 at 288; 46 ALR 237 at 241 ; 57 ALJR 248 at 251 per Gibbs CJ quoting Lamb v Munster (1882) 10 QBD 110 at 111
In the particular context of the Tribunal’s hearing Mr Cohen’s application and the pending criminal proceedings, there will be some common areas being examined in both proceedings. Mr Cohen’s statements to the AGM in light of what he knew or should have known may reflect in some measure on whether or not he is a fit and proper person to act as a director or senior manager of certain enterprises engaged in insurance.
The privilege means that the Tribunal cannot compel Mr Cohen to answer any question that might be put to him if his answer might expose him to the possibility of being convicted of an offence that he knowingly gave information that was false or misleading or that he gave information that was false and misleading at the AGM. Whether or not a question will in fact expose him to that possibility will have to be determined at the time of the hearing:
“The claim by the witness, although on oath, even if there be no doubt as to his credibility, is not sufficient. It must be shown to the Court, from the circumstances, and the nature of the testimony that is sought to be educed, that there is reasonable ground he may be implicated in some offence by his answer.”[10]
Furthermore, “[w]here the risk is removed by a pardon or by lapse of time, certainly if there be a statutory limitation upon proceedings, the privilege of the witness no longer remains.”[11]
[10] Brebner v Perry [1961] SASR 177 at 181 per Mayo J
[11] Brebner v Perry [1961] SASR 177 at 180-181 per Mayo J
Kirby P explained the relevant principles in Accident Insurance Holdings Ltd v McFadden:[12]
“7. It is for the presiding judicial officer to determine whether the objection taken is good and whether there are reasonable grounds for the belief on the part of the witness that he or she is, or may be, in peril of future criminal or like proceedings if the answer is given. Just as the court must protect the privilege, it must also make sure that the rule is not abused; but applied only where its invocation is justified: see Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd [1939] 2 KB 395 at 403. The proper procedure in a claim for privilege is to object to each question as it is asked: see Ex parte Reynolds (at 294); Brebner v Perry [1961] SASR 177 at 180. It is not proper to refuse to be sworn or to decline to answer any questions at all or to claim a global protection from the privilege. Such a refusal may amount to a contempt of court: see Smith v The Queen (1991) 25 NSWLR 1 at 9. Nevertheless, a point will be reached in questioning where it will be unnecessary to persist with an entire cross-examination which is clearly futile by reason of the invocation of the privilege against self-incrimination. To demand a tedious repetition of questions, rebuffed every time by a claim of privilege which is upheld, would be pointless;”[13]
[12] (1993) 31 NSWLR 412 (CA)
[13] (1993) 31 NSWLR 412 (CA) at 423
In view of these principles, it must remain a matter for determination on the relevant material available at the time whether or not the Tribunal would uphold any claim for privilege made by Mr Cohen. That determination must be made in relation to each question that is asked. It would not be appropriate for me to predict at this stage what that determination will be.
Despite that, I will assume for the moment that the Tribunal has upheld the claim. The outcome may be that the Tribunal may not be able to hear all of the relevant information that pertains to the decision under review. Although its task will be to reach the correct or preferable decision on the information that it does have, it will not be known whether that will be the correct or preferable decision that it would have reached had it been given all relevant information.
Quite apart from considerations of the Tribunal’s concern about the limitations on the way in which it may have to perform its function, non-disclosure of relevant information may or may not be the best course to adopt in presenting Mr Cohen’s case. Should he choose to exercise his privilege, “… it is impermissible to draw any adverse inference, because the drawing of an adverse inference necessarily assumes that the answer would incriminate. …”[14] He, though, may want the Tribunal to know matters that might incriminate him. If that is his wish, he may opt to choose to waive any privilege he might have. Does this mean that he will have waived his privilege for all purposes or only for the purpose of the proceedings in the Tribunal?
[14] Dolan and Australian and Overseas Telecommunications Corporation (1993) 42 FCR 206 at 215; 114 ALR 231 at 241; 31 ALD 510 at 520 per Spender J
Kirby P touched on this aspect in Accident Insurance Holdings Ltd v McFadden when he said:
“8. The privilege against self-incrimination may be waived in certain circumstances. In this respect it accords with other privileges. This much is clear law: see, eg, J H Wigmore, Evidence in Trials at Common Law (1961) Boston, Little, Brown & Co, vol 8 at 453ff and BTR Engineering (at 727). The presence of a privileged document in the hands of a third party does not necessarily destroy the privilege. The question remains whether the party entitled to the privilege has actually waived it: see Kennedy v Lyell (1883) 23 Ch D 387; Trade Practices Commission v Sterling (1979) 36 FLR 244; Hartogen Energy Ltd (In Liq) v Australian Gaslight Co (1992) 109 ALR 177; cf Giannarelli v Wraith [No 2] (1991) 171 CLR 592 at 604. The extent of possible waiver is, however, disputed. The respondents asserted, with the support of Wigmore, that it was available in two cases only, being the two mentioned by that author, viz, by contract or other binding pledge before trial and by voluntarily testifying in the case. I do not consider that this states the common law of Australia. It is conceptually unsatisfactory. It appears to be inconsistent with the passage of Lord Barker LC in East India Co v Atkins (1719) 1 Str 168 at 176; 93 ER 452 at 457 where it was pointed out that what was involved is "only a privilege, not an actual right". It also appears incompatible with reasoning of the High Court of Australia in analogous cases: see, eg, Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 at 480. Nevertheless, as with any waiver, it is necessary to define with some precision what is waived. It will be rare that a person is taken to have waived all rights and privileges in respect of any prosecution for any offence arising out of circumstances only generally defined. The point of difficulty will be presented by the definition of the subject matter of the waiver. This will require assessment of the reasonable interpretation to be placed upon the conduct of the witness said to amount to the waiver.”[15]
Again, it is clear that the answer to the question that I have posed would only be able to be answered after Mr Cohen has been asked and has answered questions in the Tribunal without claiming privilege.
[15] (1993) 31 NSWLR 412 (CA) at 424
It is said that Mr Cohen could waive his privilege but that the Tribunal could make an order under s 35 so that disclosure of the information that he gave would be limited to members and staff of the Tribunal, the parties and their legal representatives. Section 35(2)(b) provides that “where the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter of for any other reason, the Tribunal may …” prohibit or restrict the publication of evidence given before it. In doing so, it must take into account “… the principle that it is desirable that hearings of proceedings before the Tribunal should be made available to the public and to all the parties …”.[16] It must also take into account reasons why access to evidence should be restricted.
[16] AAT Act, s 35(3)
Whether the Tribunal would exercise its discretion to make an order under s 35 is a matter for conjecture. One of the matters it would consider would be the effect of what it was being asked to permit. It might see itself as being asked to determine that Mr Cohen’s waiver of his privilege for the purposes of the Tribunal’s proceedings but to make an order that protected him from the possible consequences of a waiver. That he should choose to take advantage of a waiver where he might think it to his advantage and yet shelter behind the privilege in any criminal proceedings brought against him might make the Tribunal uncomfortable.
Before making any order, the Tribunal might have regard to the judgment of the High Court in Reid v Howard. [17] The facts are summarised in the headnote to the report:
“ Former clients of a chartered accountant, having learned that he was misappropriating funds, applied for orders in the Supreme Court of New South Wales compelling him to disclose information about certain assets. The accountant claimed privilege against self-incrimination. The Court of Appeal accepted the claim for privilege but made orders compelling disclosure upon conditions intended to protect the accountant from the risk of prosecution. The Crown was not a party to the making of the orders.”[18]
The orders were designed to limit disclosure of the information that the accountant was required to lodge in affidavit form and to keep it from prosecuting authorities. The orders could be varied only by leave of a Judge of the Equity Division of the Supreme Court of New South Wales.[19]
[17] (1995) 184 CLR 1; 131 ALR 609; 69 ALJR 863
[18] (1995) 184 CLR 1 at 1
[19] (1995) 184 CLR 1 at 9; 131 ALR 609 at 614; 69 ALJR 863 at 871 per Toohey, Gaudron, McHugh and Gummow JJ
In Reid v Howard, Toohey, Gaudron, McHugh and Gummow JJ referred to the inherent powers of a superior court such as the Supreme Court of New South Wales or its powers under s 23 of the Supreme Court Act 1970 (NSW). Such powers cannot be restricted to defined and closed categories, they said. Equally, they cannot:
“… authorise the making of orders excusing compliance with obligations or preventing the exercise of authority deriving from statute. Thus, neither can be exercised to authorise non-compliance with a search warrant issued in the exercise of statutory power as, apparently, was intended in the present case. Nor, of course, can either be exercised to excuse compliance with a subpoena issued by the Federal Court which might occur if, for example, bankruptcy proceedings were brought against the appellant. There are other difficulties with the orders. What considerations are to be taken into account by a judge of the Equity Division in deciding, pursuant to orders 6 and 7, whether or not to grant leave to the respondents' solicitors to disclose the information contained in the affidavits? If there is to be no disclosure, are proceedings to be conducted behind closed doors even though such a course is allowed only in exceptional cases when that is necessary in the interests of justice? These considerations lead to the conclusion not merely that the privilege is not to be modified or abrogated in favour of some different protection by judicial decision, but that its modification or the substitution of some different protection can effectively be achieved only by legislation.
Moreover and of more importance, the inherent power and the jurisdiction conferred by s 23 of the Supreme Court Act are to be exercised only as necessary for the administration of justice. …it is inimical to the administration of justice for a civil court to compel self-incriminatory disclosures, while fashioning orders to prevent the use of the information thus obtained in a court vested with criminal jurisdiction with respect to the matters disclosed. Nor is justice served by the ad hoc modification or abrogation of a right of general application, particularly not one as fundamental and as important as the privilege against self-incrimination.”[20]
[20] Reid v Howard (1995) 184 CLR 1 at 16-17; 131 ALR 609 at 619-620; 69 ALJR 863 at 871
If the Tribunal were to require Mr Cohen to answer questions despite any legitimate claim to privilege he might make, the principles in Reid v Howard might lead a Tribunal to consider that it should not exercise its discretion under s 35 to try to protect his evidence. If Mr Cohen were to ask it to make an order under s 35 to protect any evidence he would give if he were to waive his privilege and that claim were to be accepted, the Tribunal might equally have regard to those principles. It might say that whether or not Mr Cohen chooses to claim the privilege is a matter for his judgment. The consequences of his claiming it or choosing not to are prescribed by law. It would be inappropriate for the Tribunal to attempt to circumvent those consequences by using its power under s 35 to make a confidentiality order keeping it from the prosecuting authorities. Whether or not its attempt would be successful is by no means certain. If its order were seen in its context as an attempt to abrogate the privilege, it might be held to have been made without power. The privilege may only be abrogated by legislation and not by an order of the Tribunal.
Given these uncertainties, it seems to me that Mr Cohen would be in a difficult position were he required to make a decision whether he should, in response to an appropriate question, rely on the privilege against self-incrimination. Even if the Tribunal could be persuaded to make an order under s 35, he could have no guarantee that the order might not be varied at a later time or that it would survive an appeal or judicial review. He could well be limited in the preparation and presentation of his case. That would be, to use the words of Hill J in Hurley v Commissioner of Taxation,[21] “unjust prejudice to the … [applicant] by requiring the case to proceed.”[22]
[21] (1992) 37 FCR 11
[22] (1992) 37 FCR 11 at 13
Other relevant matters
Deferring the hearing of the application until the criminal proceedings certainly postpones its resolution but it does not do so indefinitely. The date of the committal hearing is known. If Mr Cohen is not committed for trial, the application can proceed in the normal way. That will represent only a short interruption in the path to its resolution. If he is committed, there will be a much longer interruption. Taking all of the matters to which I have referred into account, I consider that the interests of justice are best served by deferring the Tribunal’s proceedings until the resolution of the criminal proceedings. The public is protected from any harm as Mr Cohen continues to be a disqualified person. Mr Cohen will be in a position in which he can take proper advantage of his privilege not to incriminate himself in the Tribunal’s proceedings. He will also be able to devote himself properly to the criminal proceedings. It would be an unreasonable burden to expect him to deal with both proceedings concurrently. The criminal proceedings will focus on one particular matter and will themselves be complex. The Tribunal’s will be more complex as they are likely to explore a broader range of issues and factual matters. Although the parties incur some costs by virtue of this adjournment application and future directions hearings relating to the outcome of the criminal proceedings, they will be of much lesser significance than those that would be thrown away if the parties were to prepare for hearing, the hearing were held and Mr Cohen were subsequently convicted of either or both of the offences.
The matter should not be deferred indefinitely. Consequently, there will be a further directions hearing so that Mr Moshinsky can advise regarding the outcome of the committal proceedings.
For the reasons I have given, until further order, I:
1.defer hearing of the application filed in V2006/15 until after the conclusion of the criminal proceedings against the applicant under the Corporations Act 2001; and
2.adjourn further consideration to a telephone directions hearing on 9 October 2006 at 9.30 am.
I certify that the thirty-five preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ...............................................................
Jayne Rathjen Associate
Date of Hearing 18 May 2006
Date of Decision 13 June 2006
Counsel for the Applicant Mr M. MoshinskySolicitor for the Applicant Mr G. Ben-Meir
Ben Meir & AssociatesCounsel for the Respondent Mr C. Archibald
Solicitor for the Respondent Ms K. Plowman
Sparke Helmore Lawyers
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