Collie v Behan

[1997] FCA 1191

FEDERAL COURT OF AUSTRALIA

CORPORATIONS LAW - motion for interlocutory relief to restrain the Australian Securities Commission (‘ASC’) from proceeding with any hearing with respect to notices issued pursuant to s 600(2) of the Corporations Law - whether applicants’ rights rendered nugatory if interlocutory relief is not granted - claim not open to the respondents - application dismissed.

ADMINISTRATIVE LAW - whether a decision or conduct anterior to a decision of the ASC to issue s 600(2) notices is reviewable under the Administrative Decisions (Judicial Review) Act 1997 (Cth) (‘the ADJR Act’) - meaning of “conduct” under s 6 of the ADJR Act - decision and conduct not reviewable.

Administrative Decisions (Judicial Review) Act 1977 (Cth), s 6
Judiciary Act 1903 (Cth)
Corporations Law, s 600

IAN DAVID STAFFORD COLLIE and CAROLINE HELEN COLLIE v BRENDAN CHARLES BEHAN, DIANE BINSTEAD and AUSTRALIAN SECURITIES COMMISSION
NO QG 158 of 1997

SPENDER J
BRISBANE
17 OCTOBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 158  of   1997

BETWEEN:

IAN DAVID STAFFORD COLLIE
FIRST APPLICANT

CAROLINE HELEN COLLIE
SECOND APPLICANT

AND:

BRENDAN CHARLES BEHAN
FIRST RESPONDENT

DIANE BINSTEAD
SECOND RESPONDENT

AUSTRALIAN SECURITIES COMMISSION
THIRD RESPONDENT

JUDGE:

SPENDER J

DATE OF ORDER:

17 OCTOBER 1997

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

The motion be dismissed and the applicants on the motion pay the respondents’ costs, to be taxed if not agreed.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 158 of 1997

BETWEEN:

IAN DAVID STAFFORD COLLIE
FIRST APPLICANT

CAROLINE HELEN COLLIE
SECOND APPLICANT

AND:

BRENDAN CHARLES BEHAN
FIRST RESPONDENT

DIANE BINSTEAD
SECOND RESPONDENT

AUSTRALIAN SECURITIES COMMISSION
THIRD RESPONDENT

JUDGE:	SPENDER J
DATE:	17 OCTOBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

I propose not to grant interlocutory relief.  I will now give reasons for that conclusion.

On 9 October 1997 an application was filed which sought to review the conduct of Brendan Charles Behan, Diana Binstead and the Australian Securities Commission (‘the ASC’) whereby Mr Behan, as a delegate of the ASC, and on the advice of and assisted by Ms Binstead, determined to give to the first and second applicant a number of notices pursuant to s 600(2) of the Corporations Law (‘the Law’) requiring Mr and Mrs Collie to show cause why the ASC should not serve upon them a notice pursuant to s 600(3) of the Law. The application further sought to review the conduct of those respondents in which they engaged, namely, the issue of an amended notice pursuant to s 600(2) and the conduct of hearings pursuant to s 600(3).

The application is headed “APPLICATION FOR AN ORDER OF REVIEW AND FOR ORDERS PURSUANT TO SECTION 39B OF THE JUDICIARY ACT 1903”. At least since May 1995 the question of review of the decision to issue a notice was canvassed by Messrs Cleary Hoare, the solicitors for Mr and Mrs Collie, and that notice, or threat, however it be viewed, was repeated on a number of occasions subsequent to 30 May 1997, in particular, in a letter of 2 June 1997 and a further letter of 12 June 1997.

On 1 July 1997, the decision to institute Federal Court proceedings seeking a review of the delegate’s decision to issue the further notices was communicated to the ASC.  There was a further letter of 9 September 1997 of the intention by the applicants to institute proceedings in this court.

The hearing in respect of the s 600(2) show cause notices is appointed to commence on Monday next, 20 October 1997.

The motion with which I am presently concerned was filed on 14 October 1997. That motion seeks orders that an injunction be granted to Mr and Mrs Collie to restrain the ASC and any delegate of the ASC from proceeding with any hearing with respect to notices presently issued by the ASC to the first and second applicants pursuant to s 600 of the Law until such time as the applicants’ application for review and orders pursuant to s 39B (a misprint appearing in the motion) of the Judiciary Act 1903 (Cth) can be heard and determined.

The basis for the interlocutory orders sought, according to the submissions by the applicant, is that they have commenced proceedings seeking a review pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘the ADJR Act’) of the conduct of the ASC’s delegate in giving the notices to show cause and a review pursuant to the ADJR Act of the conduct of the ASC’s delegate in issuing an amended notice and an injunction to restrain the ASC from issuing fresh notices.

The central argument in favour of the grant of interlocutory relief, according to counsel for the applicants, is that, absent orders by the court today of an interlocutory kind, their substantive application will be rendered nugatory.  A number of matters are referred to as constituting at least an arguable case of bad faith.  I refer in particular to the matters detailed in the entirety of paragraph 26 of the application.

The central difficulty I have in exercising the court’s discretion to grant interlocutory relief, is that on my present view of the matter, the rights which are said to be rendered nugatory if the interlocutory relief is not granted, are not, in my opinion, open to Mr and Mrs Collie, at least insofar as they seek to challenge, pursuant to the ADJR Act, conduct anterior to the issuing of the notices under s 600(2).

In Neate v The Australian Securities Commission (1995) 60 FCR 518, Drummond J upheld an objection to competency where there had been an application seeking judicial review under the ADJR Act of a decision to issue a notice pursuant to s 600(2) of the Law to show cause why an order not to manage corporations should not be made against Mr Neate. In upholding the objection to competency, Drummond J held that s 600(2) of the Law does not require a finding to be made as to a person being a relevant person as a condition precedent to the exercise of the substantive power, and, more importantly for present purposes, that the decision of the ASC to issue a notice under s 600(2) of the Law is not determinative and is not a “decision” within the meaning of that term in the ADJR Act.

I refer to his Honour’s reasons for judgment at p 520:

There is nothing in the wording of s 600(2) of the Corporations Law, read in the context of the whole section, that suggests that it imposes any decisional obligation on the Commission with respect to such a matter. The purpose intended to be served by a s 600(2) notice is to ensure that a decision to issue a prohibition notice under s 600(3) will not be made without the person concerned first being accorded natural justice by being given an opportunity to demonstrate why a s 600(3) prohibition cannot or should not be imposed. A provision intended to confer such a benefit on the person against whom the Commission is considering taking action is unlikely to be the source of an obligation on the Commission to make determinations, even preliminary ones, upon which the power to prohibit depends.

These considerations arising from the construction of s 600 of the Corporations Law, in my opinion, show that, before it can lawfully issue a notice under s 600(2), the Commission does not have to make a decision, in the sense of reaching a positive conclusion, that the intended recipient is “a relevant person”.  It would have to have some reason for thinking that the person intended to be served with the notice is “a relevant person”: if the Commission were to issue a s 600(2) notice without that, it would be making an improper use of the power conferred by the section. But the Commission does not have to form any more definite view than that it might be the case that the person in question is “a relevant person”. The decision of the Commission to issue a notice under s 600(2) of the Corporations Law is determinative of nothing.  Such a decision is not a “decision” within the meaning of that term in the ADJR Act.

I refer also to his Honour’s extraction of observations by members of the High Court in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 in his Honour’s reasons for judgment at p 521 et seq.

It should be noted that the application filed 9 October 1997 seeks to review the conduct of the respondents. However, the difficulty that confronts the applicants is that a decision to issue a s 600(2) notice does not become reviewable by seeking to challenge the conduct which precedes its issue. The reason for that is s 6 of the ADJR Act, which provides for the review of conduct.

Conduct in the abstract is not able to be reviewed pursuant to the ADJR Act. Pursuant to s 6, conduct can be reviewed if it is conduct related to the making of a decision, and if the decision to issue the notice is not a reviewable decision, conduct leading to the making of a decision to issue the notice is not reviewable conduct. Section 6(1) provides:

Where a person is engaged, is engaging or proposes to engage in conduct for the purpose of making a decision to which this Act applies, a person who is aggrieved by the conduct may apply to the court for an order of review in respect of the conduct on any one or more of the following grounds -

which grounds are then set out.

It follows, therefore, as Drummond J found in Neate’s case, that a decision to issue a s 600(2) notice under the Law is not a reviewable decision, and conduct anterior to the making of the decision, or associated with it, is not conduct reviewable under the ADJR Act. The rights which the applicants today are seeking to vindicate by having them not rendered nugatory in fact do not exist.

I turn now to the question of injunctions which may be said to be sought under s 39B of the Judiciary Act 1903 (Cth). An injunction, as a matter of principle, ought to be issued in vindication or in justification of a party’s rights. It is difficult to see how an injunction in the principal application could be granted where the injunction is not directed at the vindication of a particular party’s right but merely at a piece of conduct which may or may not be thought to be appropriate.

It is plain, in my view, that the present claim for interlocutory relief is not fairly to be regarded as open to the applicants, and I do not accept the central basis on which the application is brought.  I simply express my reservations as to whether in fact what is set up as evidence of bad faith should be regarded as setting up an arguable case of that matter.

There are considerable reservations, particularly in relation to the history and content of the submissions regarding s 85ZW of the Crimes Act 1914 (Cth). The reticence in respect of complaining about that, the chronology of events, particularly the participation in the directions hearing that occurred on 17 June 1997, and the terms of the section itself and the terms of s 85ZZH, cause me to doubt whether in fact there is any true issue concerning this matter.

It seems to me that this is a clear case where the court, in the exercise of its discretion, ought not interfere with the precedents by the ASC which are scheduled to commence on Monday.  I have been referred in the course of submissions to considerable authority concerning the proper approach by a court in those circumstances.  I simply highlight the observations of the Full Court of the Supreme Court of Queensland in R v Windridge, ex parte Pacific Coal Pty Ltd [1992] QdR 180 in the judgment of Thomas J at 195, and to the observations by Mason J, as he then was, in Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552 at 574-575.

In addition to that, I should make reference to the observations of Phillips J in Mapel Nominees Pty Ltd v Whitvan Pty Ltd, (1992) 29 ALD 223, where his Honour concluded that the Court should set its face against interrupting the course of a hearing at first instance, this being a proceeding in respect of the Liquor Control Act 1987 (Vic), and his Honour held in the discretion of the Court given by s 4(2) of the Administrative Law Act 1978 (Vic):

Relief should be denied in order that the due and orderly administration of the law is not unnecessarily interfered with.

At 227 his Honour said:

On behalf of Mapel, it was submitted that the order nisi is not appropriate at this stage of the proceeding before the Liquor Control Commission; that the application by Mapel for a “general licence” under s 47 is but part heard and that the hearing of that application should not be interrupted to allow this challenge to the correctness of the rulings made by Commissioner Bond on 23 September 1992.  These were only rulings made in running and, it is submitted, the court sets its face against interrupting a hearing to allow a dissatisfied party the opportunity to test such rulings before a final determination has been made.  In this regard, I was referred to what was said by Adam J, in Mudge v O’Grady [1965] VR 65 at 66-7 and by Gowans J, in Andrew v W Pridham (Aust) Pty Ltd, supra, at 624.

For Whitvan, counsel submitted that these cases should be distinguished on the ground that criminal proceedings were there involved and this was a civil application for a license; that the decision on the sufficiency of Mapel’s existing planning permit had plainly been made, according to the commissioner herself, on 14 September; that, one way or the other, the proceedings were now tainted with a denial of natural justice and that, if so, the sooner the hearing was ended the better.

On this aspect, I think that the submission for Mapel is to be preferred.  The court does set its face against interrupting the course of such a hearing at first instance and to the cases cited, I add the discussion on the point by the Full Federal Court in Lamb v Moss (1983) 49 ALR 533 at 544-6; 5 ALD 446 at 456-8. It is true that what was said there, like what was said by Adam J, and Gowans J, was directed principally to the undesirability of interrupting the course of criminal proceedings, but I do not think that the principle is confined to that. After all, at centre is the exercise of a discretion and these cases simply demonstrate that in many cases the refusal of relief, as an exercise of discretion, may be called for so as to avoid what is regarded as undesirable - that is, unnecessary interference with the due and orderly administration of the law. I agree with the submission that, at least ordinarily, the court will not assist a review of a current proceeding at a stage before a determination of the matter has been made - and in this case, that means a decision on Mapel’s application for a general licence. After all, if that application is refused, the matter ends.

I ought also to refer to the observations by the Full Court of the Federal Court constituted by Lockhart, Sheppard and Beaumont JJ in Jarret v Seymour (1993) 46 FCR 557 in the joint judgment of Lockhart and Beaumont JJ at 565, where their Honours said:

There is no doubt that there can indeed be injustice or unfairness to an accused in his being charged and put on trial without reasonable grounds and that an action for damages for malicious prosecution does not necessarily remove the injustice or unfairness: Barton v The Queen (1980) 147 CLR 75 per Gibbs ACJ and Mason J at 96-97.

It is not necessary for us to decide in these motions for leave to appeal the precise ambit of the Court’s power to intervene by injunction to prevent the laying and prosecution of criminal charges in circumstances where it may be an affront to justice that the charges be laid.  Many authorities were cited to us in the written submissions and in oral argument and indeed were cited to the primary judge to support or negate the existence of this power.  We approach this case on the footing that such power would only be exercised in exceptional circumstances.  It may be, for example, that a charge which a prosecuting authority is about to lay against a person has no conceivable basis in law on any view of the facts.  Such a case would be analogous to Sankey v Whitlam (1978) 142 CLR 1.

While I readily accept that Jarrett v Seymour (supra) relates to criminal prosecutions, the principles concerning the fragmentation of the legal process are of wider application and are not strictly confined to criminal proceedings. It may very well be that independently of any question of the propriety of the delegate in issuing the s 600(2) notices, no consequences adverse to Mr and Mrs Collie will in fact result at the conclusion of the show cause hearings.

As opposed to that, one has to accept that there may be adverse consequences, in which case there are avenues of review and challenge available to Mr and Mrs Collie.  There are powerful discretionary reasons based on those considerations for which interlocutory relief should be refused.  There are other matters which suggest to me that interlocutory relief of a discretionary kind should be refused.  Here the delay is truly unexplained and quite extraordinary.

Given the history of the correspondence from the solicitors for the present applicants against the chronology of the filings in this court, it is almost impossible to avoid the conclusion that these proceedings were delayed until death knock.  It seems to me that the delay is unacceptable and has been embarked upon with at least one purpose of achieving a forensic advantage.  In my opinion the applicants have not come to the court in a mantle of candour.  For these reasons, I decline to grant interlocutory relief.

I order that the motion be dismissed and that the respondents on the motion have their costs, to be taxed if not agreed.  Absent any further order, O 62 of the Federal Court Rules, will prevent the taxation at the moment at this stage.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender

Associate:

Dated:            17 October 1997

Counsel for the Applicant:	Mr P E Hack
Solicitor for the Applicant:	Cleary Hoare
Counsel for the Respondent:	Mr P H Morrison QC with Mr J D McKenna
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	17 October 1997
Date of Judgment:	17 October 1997