Commonwealth of Australia v Helicopter Resources Pty Ltd & Ors

[2019] HCATrans 131

[2019] HCATrans 131

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S71 of 2019

B e t w e e n -

COMMONWEALTH OF AUSTRALIA

Applicant

and

HELICOPTER RESOURCES PTY LTD ACN 006 485 105

First Respondent

MARY MACDONALD

Second Respondent

CORONER’S COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Third Respondent

Application for special leave to appeal

NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 21 JUNE 2019, AT 9.30 AM

Copyright in the High Court of Australia

MR S.P. DONAGHUE, QC, Solicitor‑General of the Commonwealth:   May it please the Court, I appear with MR T.M. BEGBIE for the applicant.  (instructed by the Australian Government Solicitor)

MR N.C. HUTLEY, SC:  If your Honours please, I appear with my learned friend, MR T.J. BRENNAN, for the first respondent.  (instructed by Norton White)

Your Honours, just before my learned friend rises, we have handed up – I think your Honours have it before you – an affidavit of Andrew Harrington, sworn yesterday, which brings the Court up to date with the state of the proceedings in the Magistrates Court. 

GORDON J:   Is that to say that it has started and it is not yet finished ‑ ‑ ‑

MR HUTLEY:   It has started and not finished.

GORDON J:   ‑ ‑ ‑ and it will take six weeks?

MR HUTLEY:   It is set down for six weeks but there was an estimate expressed by counsel, which we have referred to, that it could be done in about three weeks.  It will be finished sometime within the next six weeks, more likely closer to three.

NETTLE J:   We will take the affidavit of Andrew John Leslie Harrington as read, Mr Hutley.  Yes, Mr Solicitor.

MR DONAGHUE:   Your Honours, there are two special leave questions, if I can identify them in the reverse order that they are set out in our application.  The first and most important of the questions is whether the accusatorial principle is engaged if the employee of a corporation – that is, a person who is not themselves charged with any offence – is compelled to give evidence relevant to the subject matter of a pending charge against that person’s corporate employer.

That question has arisen in this proceeding right from the outset.  If your Honours have the application book and could turn to page 31 of the book ‑ this is in the judgment of the learned primary judge, Justice Bromwich – you will see at the bottom of page 31, paragraph 48, that his Honour says:

As will be seen, a large part of Helicopter’s case depends upon eliding the distinction between compulsorily examining a defendant who has been charged and compulsorily examining a person employed by or otherwise closely associated with such a defendant.  The distinction is fundamental and cannot be glossed over.  Yet the submissions for Helicopter touched only lightly on how that distinction was to be bridged.

Your Honours can see the breadth of the proposition that Helicopters was advancing as to the accusatorial principle on the previous page in the application book, on page 30, in the paragraph numbered (4).  This is paragraph 45(4), where it is noted, particularly in the second half of that paragraph:

Helicopter submits that while the facts of the cases –

being the cases concerning the accusatorial principle in this Court:

establishing this proposition have involved parallel prosecution of the examinee, the reasoning upon which it relies has not and cannot be so limited.

Effectively, Helicopters was submitting that the accusatorial principle was not limited to compulsory examination of an accused him or herself but extended more broadly to coercive examinations of other persons.  So the first special leave question concerns that topic.

GORDON J:   Is that because of what is set out by the Full Court at page 139 onwards is said to be wrong – i.e. you challenge both the test that they applied at the principle level?  It seemed to me you had three points.  You had a complaint about the principle, a complaint about construction and then a complaint about provision 90 and others that did not seem to enter into the debate.

MR DONAGHUE:   Yes.

GORDON J:   Is that fair?

MR DONAGHUE:   It is but the first two are closely related because it was really in common in applying its view of the principle together with its view of section 87 of the Evidence Act, which is the second point I was about to identify and I think your Honour just put to me.  It was that combination that was said to mean that when an employee is compelled to give evidence, that is the same as the corporate accused being compelled to give evidence. 

The respondent really seemed to come at it from the point of view of either extending the accusatorial principle so that they did not need to have that identity of the employee and corporate defendant or by achieving that identity through the section 87 route.  The Full Court found for them at least on the second of those two matters.  Quite where they landed on the first is a little difficult to entangle, but in circumstances where the correctness of the construction of section 87 would be put squarely in play on the appeal one would need to deal with both in order to deal with the way we understand Helicopters have advanced their case on these issues.

That answer to your Honour’s question foreshadows that the second special leave question we submit arises concerns the correctness of the Full Court’s approach to section 87, which is a provision in common form throughout the uniform Evidence Act jurisdictions and which has been the subject of very little consideration.

NETTLE J:   Mr Solicitor, is it contended that the effect of section 87 would not be to render, as it were, evidence by the employee admissible as an admission against interest as against his corporate employer?  I do not say a form of admission, I say an admission against interest, obviously rebuttable by the corporation by other evidence if it were available.  But subject to that, it would stand, would it not, as an admission against interest?

MR DONAGHUE:   Your Honour that, in our submission, is not the consequence of section 87.  Section 87’s only purpose is to facilitate evidence going to the question then of whether an admission has been made within section 81. 

GORDON J:   Is that right, having regard to 87(2)?

MR DONAGHUE:   Section 87(2) goes to the question of whether or not the person is or is not an employee for the purpose of then applying 87(1)(b).

GORDON J:   No, it is broader than that, is it not, (a) deals with authority. 

MR DONAGHUE:   Your Honour, 87(1)(b) has two limbs. 

GORDON J:   Section 87(2)(b) – (2)(a) and (2)(b).  You have:

an employee of someone else or had authority –

MR DONAGHUE:   Yes, and here we are concerned with the employee limb.  If the person is an employee, one does not need to get to the authority question because one could then take the benefit of 87(1)(b).

NETTLE J:   If that evidence were given by the employee before the trial of the prosecution, it would be admissible ‑ ‑ ‑

MR DONAGHUE:   It would be admissible.

NETTLE J:   ‑ ‑ ‑ as against the corporation.

MR DONAGHUE:   Yes, reading 87 and 81 together.  But our point in that regard is that, leaving aside the Evidence Act entirely, as a matter of common law it was quite possible for an employee with authority ‑ ‑ ‑

NETTLE J:   With authority.  Fraser Henleins v Cody would normally have excluded it.  That is to say, absent authority ‑ ‑ ‑

MR DONAGHUE:   Absent authority it would have.  So that was the relevant change that section 87 made to the common law, but what 87 did not do is what the Full Federal Court found that it did at 184, in the last sentence, which was alter the common law identified in Caltex that:

“[o]ral evidence given by an officer of a corporation is that of the witness, not that of the corporation”.

GORDON J:   That is what I was asking you about.  That bit, you contend, is wrong?

MR DONAGHUE:   We do.

GORDON J:   How does section 90 fit with it?

MR DONAGHUE:   Section 90 would then come in at ‑ ‑ ‑

GORDON J:   Is it not another protection mechanism?

MR DONAGHUE:   Yes.

NETTLE J:   Just before you go to the supposed error in the Full Court’s analysis, accept for the sake of argument that the effect of section 87 was not to change the common law in the way that is alleged there but was simply, as it appears you accept, to make evidence given by the employee admissible as an admission against interest as against the corporation.  It would de facto raise questions, would it not, as to whether the principle should apply in such a case for similar reasons that it applies in a case where the common law is not changed?

MR DONAGHUE:   Your Honour, our submission is that the common law principle articulated by Chief Justice Mason and Justice Toohey in Caltex set out at the bottom of 84 is a principle that recognised – and their Honours cited some authority, a decision of Justice Stephen in one of the Smorgon cases, which itself cited some English authority, which recognised that, even applying the Fraser Henleins v Cody approach, an employee with authority could give evidence that constituted an admission binding on the company but that nevertheless the admission remained the evidence of the witness, not the evidence of the corporation.

GORDON J:   That was the distinction drawn.

MR DONAGHUE:   Yes, and that is the distinction that is wrongly collapsed in that passage.  While 87 and 81 go to the admissibility question, they do not change the character of the person who is making the admission; it remains the evidence of the employee admissible against the company but able to be contradicted by the company, as your Honour has put to me. 

NETTLE J:   So you would say that long before the enactment of section 87 a director could have been subpoenaed to the coronial inquiry, compelled to give evidence and it would have been admissible against the corporation?

MR DONAGHUE:   Absolutely I would say that.  I would say that was a clear position.  Section 90 then provides an additional possible means of protection that the Full Court did not grapple with, which might be a way that one could, at trial, give a corporate defendant such protection as the corporate defendant is considered to be entitled to by the trial court, but it does not save the error that has been made because ‑ ‑ ‑

GORDON J:   No, no, but it does provide a mechanism or an additional fact that might suggest that the construction adopted by the Full Court was wrong.

MR DONAGHUE:   Yes, I entirely embrace that, your Honour.

GORDON J:   You have a problem, though, have you not?

MR DONAGHUE:   The utility issue?  Your Honour will, I hope, understand from what I have said already that we submit that the two issues I have identified are important questions of principle, the significance of which goes well beyond this particular prosecution and this particular subpoena.  We have cast this case as a test case. 

Your Honours will have seen that we have accepted that we should pay the reasonable costs of the respondent in defending the appeal.  So from a discretionary perspective, we submit that there should not be a difficulty with granting special leave if your Honours were satisfied that the questions are of sufficient importance.

Insofar as it is put against us, and it may be put against us, that there is a more fundamental problem than a discretionary one, in my submission there is not, for this reason:  that the matter that the Full Federal Court identified – your Honours will see this at page 94 of the application book, at paragraph 29, in the middle of that paragraph:

The “matter” or controversy is the validity of the decision to issue a subpoena to Captain Lomas to give evidence.

That is how their Honours identified the controversy. 

An appeal to this Court under section 73 of the Constitution, if your Honours grant special leave, is of course an appeal in a strict sense, so the legal question is: as at the date of the judgment at first instance on the facts and the law as they existed at that time, was the decision correct? We still have a controversy about that. From the perspective of there being a matter that can found the jurisdiction of the court, the matter crystallised at that point in time, and an appeal in a strict sense concerns whether or not there was an error made at that point.

Obviously, facts having moved on, there might be discretionary reasons not to grant special leave, and we accept that that is so, but at the more fundamental level of matter or jurisdiction, in our submission, there is not a difficulty.  Insofar as there might be said to be a discretionary difficulty, the point of principle, in our submission, outweighs the fact that the particular interests of the respondent might lapse on the completion of the criminal trial.  The question is really one of whether there is an appropriate contradictor for the legal ‑ ‑ ‑

NETTLE J:   Who would it be? 

MR DONAGHUE:   If the respondent wants to play that role, us having undertaken to pay their costs, then the respondent.  If not, and so far they have not indicated that they would not play that role on an appeal if special leave is granted, there are procedures that have been followed in other cases to appoint an amicus for that kind of purpose.

Our concern, your Honours, is that this case, if it stands, is a Full Federal Court authority that the Commonwealth regulators would be expected to honour.  It is not easy to see how a further case to test the principle could be generated if regulators cannot properly exercise coercive powers against employees of corporations after they have been charged.  That is a matter of significance for ASIC, the ACCC, the Australian Crime Commission – all of the bodies that exercise powers of these kinds.

If, for example, as indeed has happened recently, cartel proceedings are commenced against a bank, people who may be in a unique position to know about facts going to that question and people against whom other regulatory action might appropriately need to be taken would effectively become immune from those steps because regulators could not exercise their powers in relation to matters that overlapped with the pending criminal proceedings against the bank.  That is a matter, in our submission, of profound significance for Commonwealth regulators.

NETTLE J:   Mr Solicitor, is it not likely that the question will arise in that context and be one which will be productive of a utile outcome?

MR DONAGHUE:   Only if someone tries to exercise their coercive powers against an employee in that situation.

NETTLE J:   I daresay they will, or at least it is likely that it will be so.

MR DONAGHUE:   The Full Federal Court would suggest that to do so would be a contempt of court. 

NETTLE J:   I just make the point that if the Commonwealth is of the view, as plainly it is, that the Full Court’s decision is wrong, it will move accordingly in these proceedings of which you speak.

MR DONAGHUE:   To do that, your Honour, it would have to manufacture, if you like, a test case where it would say to someone, here we are doing something that the Full Federal Court has said is a contempt of court, but we are doing it and we will fund you so that we can take a test case against it which will not have meaningful prospects of success until it gets to the level of this Court.

Other courts throughout the country would be expected to follow the Full Federal Court, unless it is plainly wrong.  In circumstances where we contend it is clearly wrong, there are important issues of principle raised, and this case can conveniently operate as a test case to operate that principle with a respondent who can serve as a contradictor and whose reasonable costs we have agreed to pay, in our submission, the Court should look at these questions.

I have not noted, but I should note, that there is, in our submission, an evident tension between the approach that the Full Court took and the actual decision of this case in Caltex.  Caltex is, we think, the source of the terms “fundamental principle” and “companion rule” that are now well established in the jurisdiction of this Court.  But in Caltex, after the corporate defendant had been charged, coercive powers were issued for the sole purpose of acquiring evidence for use in the criminal proceedings against the corporate defendant. 

The Full Court effectively says, you cannot do that because of the companion principle or the fundamental principle combined with section 87.  That tension with the governing authority in this Court is one that we consider the Court should examine.  The Court has not looked at its recent jurisprudence in the accusatorial practice context as applied to corporations since Caltex, so it has been 25 years.  There has been a lot of authority developed in the context of individual defendants.

NETTLE J:   There was a touch of it in the CFMEU, was there not?

MR DONAGHUE:   Yes, and Boral.  There was a touch of it.  Particularly what your Honour said in your Honour’s judgment in that case is consistent with the proposition that I am now advancing, that one needs to be careful applying the Lee and X7 line of authority to corporate defendants, having regard to what was said in Caltex.

The points are important.  There is grave doubt as to the correctness of what the Full Federal Court has said, and this case is an appropriate vehicle to test the correctness of those principles.  Really, for those reasons, your Honours, we submit that the grant of special leave is appropriate.  Unless your Honours have anything further.

NETTLE J:   Thank you, Mr Solicitor.  Mr Hutley.

MR HUTLEY:   At the moment, in reply, we have received a proposal from the Commonwealth that the reasonable costs of the appeal be paid ‑ ‑ ‑

NETTLE J:   Yes.

MR HUTLEY:   ‑ ‑ ‑ but they have not as yet offered a basis such as was considered by this Court in CSR v Eddy.  I have handed that up to your Honours just to remind your Honours at paragraph 81 that it be a condition of a grant of special leave that there be no interference with any costs orders in the courts below.

GORDON J:   In the courts below.  I cannot imagine that is a problem for the Commonwealth.

NETTLE J:   I think the big question is whether you will be around to contradict.

MR HUTLEY:   Quite.  The only reason we would, other than as a matter of, as it were, sport, turn up would be if such a condition was not imposed, because then we would really be coming ‑ the extra one we have adverted to ‑ because otherwise we would have to turn up to defend the costs order in the Full Court and at trial.

GORDON J:   You are there defending costs rather than the principle?

MR HUTLEY:   Exactly.

GORDON J:   And you want to defend the principle?

MR HUTLEY:   Quite.  My client at this moment commercially does not care about the outcome except from a costs point of view.  That is the only possible way they sit, because obviously it will all be moot.  Your Honours will, in effect, have to write a judgment, as I understand it, when one gets to paragraph 87, in the past conditional.  That is the nature of what is to take place.  My client’s interest could only be as a corporation, not as a lawyer, to expend money of its shareholders.  It has no interest.  In fact, on one view it would be an improper thing for it to do.  Also, of course, the offer is only what “the reasonable costs” are.

GORDON J:   You are very reasonable, I would have thought, Mr Hutley.  Your costs are very reasonable.

MR HUTLEY:   It will not be me, your Honour. 

NETTLE J:   Someone more unreasonable?

MR HUTLEY:   Mr Gleeson.  I am just warming a bench for a morning; Mr Gleeson will be doing it, and I will say nothing about his costs.  But more to the point is that I do not know what attitude the Commonwealth has to his fees.  As I understand it, they have different views of reasonableness. 

So there are issues of that variety.  We think it should be on the condition that they pay all proper costs on a solicitor‑client basis charged by my client.  If my client is to turn up, it is at no risk, unless they decide to get very large rooms at the Hyatt, for the conduct of this litigation.  We are really, in effect, being asked to come along to assist the Court in the answer of a wholly moot question.

We do not say it is beyond power; we accept that there is a decision, an order, and a time was fixed then, and section 73 allows your Honours to deal with it, and there are cases which are similar. That is our position, with respect, so we say, in effect, the terms upon which the grant should be more generous, both at the appellate level and at ‑ in protecting us from any exposure for reversal of costs orders.

As to the appeal, your Honours, we say there really is no particular point of interest in respect of section 87.  The observation of the Full Court at paragraph 184, the last sentence, I think when one reads the judgment as

a whole it cannot be taken to mean that the court was suggesting that the effect of 187 was to make any person who was an officer of a company entering the witness box became the company.

GORDON J:   I do not know about that.  When you get to 187 there seems to be an eliding of the appellant and the person.

MR HUTLEY:   Your Honour, it is pretty hard that the Full Court could take that when one reads section 87 itself.  It says:

must admit the representation if it is reasonably open to find –

NETTLE J:   Mr Hutley, accepting that is so, accepting that what they are saying is it is de facto equivalent, we are still left with the question of whether that is a ‑ ‑ ‑

MR HUTLEY:   I am not going to trouble your Honours very long on the matter.  I feel the mood.  If it is to be done, my client should not be in a position where it is turning up and having to expend any of its shareholder’s money to assist the Court.  Of course, if it does not, it may well be that my client takes the view that it should turn up to assist the Court.  As I have said, my learned junior and Mr Gleeson, if available, would be the counsel involved, as I understand it.  Of course, in that situation, the Court would be mightily assisted by those two individuals addressing the Court.  But that is the basis upon which it should take place, in our respectful submission.  That is all I wish to say.

NETTLE J:   Thank you.  Mr Solicitor.

MR DONAGHUE:   Your Honours, as to the costs of the appeal, my understanding is that in the correspondence between the parties we have agreed to pay the reasonable solicitor‑client costs of the respondent.  In my submission, that is all that should be required of us.  If there is not agreement as to the exact numbers, that can be sorted out in the usual way.

As to costs below, our submission is that our friends are really seeking a windfall gain because, if it turns out that we are correct, that the Full Federal Court was wrong, then the Full Federal Court should not have reversed Justice Bromwich, who awarded us costs.

NETTLE J:   So you oppose that suggestion?

MR DONAGHUE:   So I oppose that.

GORDON J:   You are here asking, in effect, for a test case in circumstances where the discretionary factors would all favour not the grant of special leave.

MR DONAGHUE:   Your Honour, I appreciate that.  My submission is that that consideration means that we should fund the proceeding going forward, but should not change what happened in the past.  If your Honours are against me on that and the grant of special leave depends on the position below then we are prepared to pay or not seek to disturb the costs orders below.

GORDON J:   Leave the orders below.

MR DONAGHUE:   Our primary submission is that your Honours should not impose that additional condition.

NETTLE J:   What troubles me about it more than costs, Mr Solicitor, is the hypothetical nature of the question which would ultimately be decided.  The order against which the appeal is brought is an order staying a subpoena which, by the time the appeal is heard and determined, would long since have been spent.  What would be the outcome of the appeal?

MR DONAGHUE:   The outcome of the appeal would be ‑ is directed to the correctness of the orders that were made by the courts below. 

NETTLE J:   That was to stay the subpoena.

MR DONAGHUE: Yes, but the question in this Court, in my submission, under section 73 is whether the subpoena should or should not have been stayed. Your Honours would be determining the question: was that stay order made right or wrong? That is not hypothetical, in my submission. It does not have any ongoing implications for the particular subpoena in question, but that is the question that your Honours would be answering. It is not a hypothetical question and it has obvious ramifications for other matters going forward as a matter of precedent. If the Court pleases.

NETTLE J:   Thank you. 

In this matter there will be a grant of special leave on conditions:

1.that there be no interference with the orders for costs which were made below; and

2.that the Commonwealth shall pay the respondent’s solicitor‑client costs to be taxed on a reasonable basis of the appeal regardless of the outcome.

MR DONAGHUE:   If the Court pleases.

NETTLE J:   As to an estimate, Mr Solicitor and Mr Hutley?

MR DONAGHUE:   I would think no more than a day.

MR HUTLEY:   We agree.

NETTLE J:   As to directions, the parties will need to comply with the directions which have been issued today by the Deputy Registrar, copies of which can be obtained on the way out.  Thank you, gentlemen.

AT 9.58 AM THE MATTER WAS CONCLUDED