Collard v Australian Securities and Investments Commission (No. 2)

[2008] FCA 1680

FEDERAL COURT OF AUSTRALIA

Collard v Australian Securities & Investments Commission (No. 2) [2008] FCA 1680

Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227

DAVID JOHN COLLARD, MIN HUA LI and LI MIN ZENG v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

NSD 1617 of 2008

PERRAM J
28 OCTOBER 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1617 of 2008

BETWEEN:

DAVID JOHN COLLARD
First Applicant

MIN HUA LI
Second Applicant

LI MIN ZENG
Third Applicant

AND:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	28 OCTOBER 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The matter be adjourned to 2.15 pm on 29 October 2008.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1617 of 2008

BETWEEN:

DAVID JOHN COLLARD
First Applicant

MIN HUA LI
Second Applicant

LI MIN ZENG
Third Applicant

AND:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Respondent

JUDGE:	PERRAM J
DATE:	28 OCTOBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The Applicants have issued a notice to produce to ASIC.  That notice has been answered but in respect of four documents ASIC has made a claim that it was entitled to resist production on the grounds of public interest immunity.  Last Thursday 23 October 2008, I heard argument as to that claim and on the same day, found that the affidavit material filed by ASIC was not sufficient at that time to make good the claim.  I directed that a further confidential affidavit making good that claim be filed by the evening of Monday 27 October 2008 – that is yesterday.

2. The matter is fixed for final hearing this Friday 31 October 2008.  The reasons for that degree of expedition appear in my reasons of 23 October 2008.  Those reasons should be read in tandem with these reasons.  It is apparent from the Full Court’s decision in Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at 232 [22] that I am required to conduct a balancing exercise between the public interest in non-production and the public interest in a court of justice performing its functions, and this is so even in relation to those cases where information has been provided to ASIC by third parties on an understanding of confidence.

3. ASIC has now filed the further affidavit directed as a result of the reasons of 23 October 2008.  At my direction, it is confidential and has not been provided to the Applicants or their advisors.  The affidavit has been sworn by Mr David McGuinness who is the senior official within ASIC ultimately responsible for ASIC’s investigation.  He has read the documents in question and has given, in the confidential affidavit, a detailed explanation of their significance.  Without dwelling on the detail of the documents, it is apparent, in a practical sense, that they have some relevance to the decision-making process.  They seem to me to be important to an allegation that the Applicants were denied procedural fairness.  I say no more than that.

4. On the other hand, there is no doubt in my mind that disclosure of the documents would have a deleterious effect on the investigation.  Further, there is an argument available that if this material were released to Mr Hartnell, or his firm, then that would, in a sense, pre-empt the outcome of the present proceeding.  However, also to be taken into account, is the possibility of fashioning a confidentiality regime which may serve both of these aspects of the public interest.

5. It seems to me in this case that such a regime may, in fact, be fashioned.  It would have the following features.  First, the four documents in question could be shown to counsel for the Applicants on an undertaking by them, proffered to the Court, that:

   (1)they would not disclose or discuss the contents of the documents with their instructing solicitors, the Applicants or anyone else apart from the Court and the representatives of the Respondents;

   (2)they would not make copies of the documents;

   (3)any notes taken by them of the documents would not be copied and would be returned at the end of the case; and

   (4)the counsel in question would not act in any related proceedings, including the Supreme Court proceedings, other than appeals from the current proceeding without the leave of this Court.

6. The second feature would be that copies shown to counsel have the names of third parties who have provided information to ASIC voluntarily redacted.  I would also suggest that there be liberty to apply on one hour’s notice.

7. I propose to stand the matter down to 2.15 pm to allow the parties to formulate appropriate orders to give effect to this regime, for counsel for the Applicants to consider whether they are willing to act under such undertakings and for ASIC to consider whether it seeks to leave to appeal.  I should indicate that, given the subject matter, my present inclination would be to grant leave if leave were sought.

   [ The Court resumed sitting at 2.15 pm and there was further discussion with counsel. ]

8. We will adjourn until 2.15 pm tomorrow.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:        11 November 2008

Counsel for the Applicants:	Ms EA Collins
Solicitors for the Applicants:	Atanaskovic Hartnell
Counsel for the Respondent:	Mr JA Halley SC
Solicitors for the Respondent:	Australian Securities & Investments Commission

Date of Hearing:	23 October 2008
Date of Judgment:	28 October 2008