Corporate Affairs Commission of New South Wales v Yuill

[1990] HCATrans 298

A'1t	-!.h AUSTRALIA,&
->).») >' $ ««:',( '-

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl0l of 1990

B e t w e e n -

CORPORATE AFFAIRS COMMISSION

OF NEW SOUTH WALES

Applicant

and

BRIAN RICHARD YUILL

First Respondent

TOURIST HOLIDAY VILLAGES PTY

LIMITED

Second Respondent

NODROGAN PTY LIMITED

Third Respondent

Application for special leave

to appeal

BRENNAN J
DAWSON J

Yuill 1 7/12/90

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 DECEMBER 1990, AT 12.14 PM

Copyright in the High Court of Australia

MR B.M.J. TOOMEY, QC:  May it please Your Honours, I appear

with my learned friend, MR G.E. UNDERWOOD for the

applicant. (instructed by M.M. Martin)

MR T.M. JUCOVIC, QC: If it please the Court, I appear with

my learned friend, MR N.A. COTMAN, for the

respondents. (instructed by Simons & Baffsky)

MR TOOMEY:  Can I hand up to Your Honours an outline of

argument and photocopies of Part VII of the

Companies Code and the relevant sections of the

Australian Securities Commission Act which

reproduced the sections here in issue,

Your Honours.

Your Honours, this is, it must be conceded, a

mere construction point. It is a question as to whether or not, on a construction of Part VII of

the New South Wales Companies Code of 1980, legal

professional privilege is available to a person

required to produce documents or answer questions

by an inspector appointed under the Code.

This arose out of the inquiry into the Spedley

companies which has now been conducted by

Mr Miller QC. Mr Miller required Mr Yuill to

produce documents. Mr Yuill claimed privilege for

them. A declaration was sought by the Corporate

Affairs Commission before the Supreme Court of New

South Wales. Mr Justice Hodgson declared that on a

proper construction of the Act legal professional
privilege was not available either for documents or

for oral statements.

In the Court of Appeal, Mr Justice Kirby, with

whom Mr Justice Mahoney concurred, held that the

privilege was not available either for documents or

for oral statements. Mr Justice Handley concurred

in allowing the appeal but was of the view that on

a construction of the statement, although documents

were accorded legal professional privilege, oral

statements were not, which would leave the curious

position that a person called before the Inspector

could be asked as to what advice he had received

from his solicitor and would have no privilege

against answering, although the document of advice

could not be required to be produced.

The basis upon which the Court of Appeal

foundered was that having regard to the decision in

Baker v Campbell, the decision of this Court in

153 CLR that it was necessary to find in the

relevant parts of the statute an intention to

abrogate the common law rule providing legal

professional privilege, Their Honours were of the

view that the Code did not evidence such an

intention.

Yuill 2 7/12/90

It is the submission of the applicant that

Their Honours erred in failing to give weight to a

number of matters, one of which was that it was

generally believed in 1980 when the Code was

passed, in accordance with Minter v Priest, a

decision of the House of Lords, and a number of

other authorities which are referred to by

Mr Justice Hodgson at pages 4 to 6 of the

application book, that legal professional privilege

was available only in judicial or quasi-judicial

proceedings.

In Testro v Tait in this Court in the 1960s it

had been held that an investigation under the

Companies Code was not a judicial or a quasi-

judicial proceeding. Accordingly, the argument

runs, in 1980 it must have been in the minds of the

legislature that legal professional privilege was

not available and the statute ought be construed in

that manner. Indeed, it is our respectful

submission that on the bare question of

construction Their Honours in the Court of Appeal

erred for this reason. If I can take Your Honours

to section 299 of the Code Your Honours will see

that that is under a heading, "Admissibility of

record of examination in evidence in proceedings

against person examined." Subsection (1) says:

Except as provided by sub-section (2),

any statements made at an examination of a

person under this Part are admissible in

evidence in any criminal or civil proceedings

against the person.

So prima facie a statement made in the examination

may be tendered against the person either in civil

proceedings, for instance, I suppose, an action by

a contributory to the company against the director

for negligence in the conduct of the affairs of the

company or in criminal proceedings. The relevant

qualification is to be found in 299(2)(d) and it

says:  Evidence of a statement made by a person

at an examination under this Part shall not be

admitted in evidence in criminal or civil

proceedings against the person if -

(d) the statement disclosed matter in respect

of which a claim of legal professional

privilege could be made by the person in the

proceedings if the provisions of this Division
did not apply in relation to that evidence,
and the person objects to the admission of the

evidence.

Yuill 7/12/90

Now, Your Honours, there is an error in the

use of the word "Division" because in Part VII of

the Code there are no divisions and it must be read
to be "Part" or possibly "section". Putting that
aside, the meaning must be this, Your Honours, that

if in a statement to the investigator - and we

concede that "statement made" as it appears both in

299(1) and 299(2) must include only an oral

statement made before the investigator or a

statement made for the purposes of the

investigation, perhaps handed up to the

investigator, for instance, as is common practice,

not some other statement or document - if such a

statement contains matters which reveal privileged

communications between solicitor and client and

those are the words in (d):

the statement disclosed matter in respect of

which a claim of legal professional privilege

could be made -

then the statement may be protected from use
against the person making it although the statement

itself, of course, could not be the subject of

legal professional privilege because the statement

is not a communication between lawyer and client,

the statement is a communication from someone to an

investigator. So what the subsection is saying is

that this statement, which would not be protected

by legal professional privilege because it is not a

statement between lawyer and client, is protected

if it discloses matter in respect of which a claim

of legal professional privilege could be made.

Now we say the very fact which was relied on

by Mr Justice Handley as saying that the abrogation

of legal professional privilege was only in respect
of oral material is indeed the fact which proves
that it was intended by the statute not to abrogate

but to deal with the question of legal professional

privilege on the basis that it did not apply in

such proceedings as were being considered, and that

reason is this: legal professional privilege

attaches to a document because the document itself

is the communication between solicitor and client.

Accordingly, no provision was necessary to be made

in section 299 to protect documentary privilege.

Since, the argument runs, the legislature

envisaged that legal professional privilege was not

available, the production of such a document before

the investigator could not be used as waiver

against the person who produced it. Production by

force of law could not be said to be waiver.

Accordingly, no protection was necessary to be provided by section 299 in respect of documents.

The document when tendered against a person on

Yuill 4 7/12/90

either civil or criminal proceedings of itself was

entitled to the privilege. The oral or written

statement handed up, including matters which
otherwise would have been the subject of legal
professional privilege, was not of itself

privileged because it did not fall within the

category of communications between solicitor and

client. It is a communication between witness and

investigator and, accordingly, it was necessary to

include in the Act -

DAWSON J: If it was tendered it revealed the communication

between solicitor and client, why could that not be

a waiver of privilege?

MR TOOMEY:	Your Honour, if the person is required - -
DAWSON J:	I mean on the same basis - it either was or was

not on the same basis as the document handed up.

MR TOOMEY:  The question depends upon whether the person is

required to make the statement. If they are
required to make the statement, then legal

professional privilege is not available, then no

argument of waiver is available.

DAWSON J:  The same for documents, the same for statements.

MR TOOMEY: Except, Your Honours, you see what is being

protected by 299(2)(d) is the statement which has
been made before the Inspector. It is not the
primary material which was the subject of legal
professional privilege, it is the statement, you

see. That appears from the words in 299(1):

any statements made at an examination ..... are

admissible in evidence -

and 299(2):

Evidence of a statement made by a person at an

examination under this Part shall not be

admitted -

et cetera. It is the statement to the

investigator, not the primary material which is

protected. We pose the question in this way.

Supposing this matter had come before the High

Court in 1981 before Baker v Campbell had been
decided, when the common law was believed to be

that indeed legal professional privilege did not

run, it is our respectful submission that the

inevitable result must have been that this Court

would have held that a proper construction of this

Part was that legal professional privilege was not available before the investigator.

Yuill 5 7/12/90

True it is that since Baker v Campbell we all

know now that the common law was not as it was

believed to be but there is authority referred to

in the application book in the House of Lords, the

case of Black-Clawson in which Their Lordships said

that in construing a statute it is proper to have

regard to the law as it was thought to be at the

passing of the statute. It is our respectful

submission that the only way one can make sense of

the Code is by reading it in the light of the law

as it was then believed to be. The other section

of relevance in the - - -

DAWSON J: I am not sure that I follow that, Mr Toomey. In

the state of the law as it was thought to be it was

unnecessary to provide that the privilege be

excluded, therefore the legislature did not.

MR TOOMEY: With respect, Your Honour, if one puts it in the

mind of the legislature in 1980, they believed

legal professional privilege was not available

before an investigator.

DAWSON J: Yes; so it was unnecessary to exclude it.

MR TOOMEY:  Indeed, but what we say is that the question to

be asked in those circumstances is the implication

from the statute that it was intended by the

legislature that it should not apply.

DAWSON J:  You can do that, can you? I mean, it may have

had an intention which it thought it unnecessary to

express. We can only proceed on intentions - ~ -

MR TOOMEY:	We say it did express them.
DAWSON J:	Even impliedly.
MR TOOMEY:	With respect, Your Honour, we say it did express (2). It expressed it because it said, in effect,
it.  You see it expressed it, we say, by 299(1) and
you have to answer before the Inspector so we
protect you before a court in respect of the
statement you make to the Inspector. That is the
effect - - -

DAWSON J: Because, it may be said, the privilege may have

otherwise been thought to have been waived by this

provision.

MR TOOMEY: 

That is so, Your Honour. No, with respect, not

so, because it is the statement which is being
protected which is not the subject and could never

be the subject of legal professional privilege,

because it is a statement made to the Inspector.
Does Your Honour take my point?

Yuill	6	7/12/90
DAWSON J: Yes, I do.
MR TOOMEY:	That is why we say waiver does not arise.	The

legislature, in dealing with it on the basis that

since the statement would not be covered by legal
professional privilege, it would otherwise be
admissible because the statement itself, the oral
statement or the statement tendered to the

Inspector is not the subject of legal professional

privilege. It is why it is unnecessary, with

respect, to make the same provision in respect of

documents because - - -

DAWSON J: That still only goes to show that the legislature

thought that the privilege did not extend to these

types of proceedings.

MR TOOMEY: Indeed, Your Honour.

DAWSON J: Therefore they wanted to extend a measure of

protection to someone who was compelled to give

evidence which in other circumstances would have

been a breach of legal professional privilege. The

statutory provision proceeds upon the basis that
legal professional privilege does not apply and

therefore there is no need to make provision for it

on the basis that it does.

MR TOOMEY: Quite so.

DAWSON J: But you are left with the legislature not

expressing really any view.

MR TOOMEY:  With respect, Your Honour, we say not. We say

that what the legislature has done is to set up a

code for investigations in which it makes it plain

that it has set up an investigation in which legal

professional privilege is not available. Now, it

does not matter whether that was because it

believed one thing or amother; if that is the

reading of - - -

DAWSON J:  That is the opposite view. The other view is it

set the Code up in the comfortable belief it did

not have to provide for the situation.

MR TOOMEY:  Your Honour, with respect, that goes to the

question posed by Baker v Campbell which says that

you must find a clear intention to abrogate. Now,

Baker v Campbell was a question on the Commonwealth

Crimes Act which makes no reference to legal

professional privilege at all and in our respectful

submission, this case is distinguishable. The

legislature does deal with the question of legal

professional privilege, has put its mind to it, and

has come up with this Code which makes provision

for protecting what would otherwise have been

Yuill 7/12/90

protected by legal professional privilege to an

extent.

If I can take Your Honours to section 308,

Privileged Communications:

Where in the exercise of his powers under

section 295 an inspector requires a duly

qualified legal practitioner to disclose a

privileged communication made by or on behalf

of or to that legal practitioner in his

capacity as a legal practitioner, the legal

practitioner is entitled to refuse to comply

with the requirement unless the person to whom

or by or on behalf of whom the communication

was made or, if the person is a body corporate

that is under official management or in the

course of being wound up, the official manager

or the liquidator, as the case may be, agrees

to the legal practitioner complying with the

requirement but, where the legal practitioner

so refuses to comply with a requirement, he

shall, if he knows the name and address of the

person to whom or by or on behalf of whom the

communication was made, forthwith furnish that

name and address in writing to the inspector.

Now the view, as I understand it, advanced by

the respondent is that that establishes that the

legislation believed that legal professional

privilege ran in respect of a legal practitioner.

We say that rather than that, it was a right

conferred upon a legal practitioner - the words are

only apt to be read as conferring a right upon a

legal practitioner subject to a qualification. If,

indeed, the legislature believed it was dealing

with an established right, all it would be

necessary for it to say would be - - -

DAWSON J: Would you remind me, Mr Toomey. That section was

designed to overcome the decision in the Stanhill

case in the Supreme Court of Victoria. I think I

appeared in it. That was a decision, will you

remind me, that legal professional privilege did

apply in the case of a practitioner called before

an Inspector. Really what it was designed to do is

to allow the privilege to be waived by the

liquidator of the company.

MR TOOMEY:  Yes, but more, Your Honour. To provide that the

name of the person on whose behalf the privilege is

claimed must be provided so, it was assumed, the

Inspector may pursue that person.

DAWSON J:	To waive the privilege?
Yuill	7/12/90
MR TOOMEY:	No, we say for the purpose of procuring the information from the client.
BRENNAN J:	To get the lawyer off the hook.

DAWSON J: That is right.

MR TOOMEY:  Yes, so he does not have to give up his client.

He says, look, I am not going to tell you, but I

will tell you the name of my client and if you can

get him to tell you, so much the better.

DAWSON J: Did the Stanhill decision determine that the

legal practitioner was entitled to raise a claim of

privilege?

MR TOOMEY:  Your Honour, I thought it did not go as far as

that.

DAWSON J:	You may well be right.
MR TOOMEY:	It is referred to in the judgments, Your Honour.

If Your Honours will excuse me one moment -

DAWSON J:  Do not let me detain you; it is just that

section 308 was a particular section designed to

deal with a particular problem which arose in a

particular case.

MR TOOMEY: Indeed, Your Honour, indeed. But, in our

respectful submission, it does not prove anything

in respect of the client.

BRENNAN J:  Mr Toomey, you have drawn attention to

sections 308 and 299, those are the foundations of

your submission, are they?

MR TOOMEY:	Yes, Your Honour, but I
BRENNAN J:	I do not want to cut you short, but is that as

far as we need to - - -

MR TOOMEY:  No, no, of course, it is a very short point,

Your Honour.

BRENNAN J: Yes.

MR TOOMEY:  The foundation of the right arises under

section 295, which sets out the powers of

investigators, examination of officers is dealt

with in 296, and expressly provides a right to

object on the ground of self-incrimination, then to

be required to answer, and of course this Court

dealt in Controlled Consultants, 166 CLR, I think

it was - it is referred to in the appeal book, but

this Court held that self-incrimination was not

abrogated. The only sections which deal expressly

Yuill 9 7/12/90

with legal professional privilege are 299(2)(d) and

section 308.

I appreciate, with respect, the force of what

Your Honour Mr Justice Dawson puts to me. If the

legislature believed the state of the law to be

that there was no availability of legal

professional privilege, on one view of it it can be

said they did not intend to abrogate legal

professional privilege. However, the opposite side
of that coin is that when passing a law concerning
the powers of an investigator and the obligations

on officers of companies, they have codified the

examination before the inspector in such a way as

to include sections to make it plain that they
intended the investigation to be conducted without
the availability of legal professional privilege.

In the light of the fact that that was believed to

be the law at the time, it is our respectful

submission that must be taken to be the intention

of the legislature, because had they wished to do

so they could have changed it. They could have

provided for legal professional privilege.

This takes us back, with great respect, to the

what we say - what would the High Court have said

had this matter come before it for interpretation

in 1981, and if it meant that in 1981, how can it

means something different in 1990. One has to have

regard to what the legislature meant by what they

believed to be the factual basis upon which they

were operating.

DAWSON J:  One thing, Mr Toomey, it is said somewhere that

these rather unsatisfactory provisions are going to

be translated into the new corporations - - -

MR TOOMEY: Well, Your Honour, with great respect, we have

handed up the photocopy of the relevant sections

from the Australian Securities Commission Act,

which is the legislation which controls the federal

body which is taking over from the States, all, I

understand, except Western Australia possibly, and

if Your Honours would look at sections 68, 69

and 76, Your Honours will find that those sections

have been reproduced; not in terms, but without any

material amendment. So, it is a live issue, it is

not an issue on a code which has gone.

GAUDRON J:  Does it have the same life with the code as it

has - - -

MR TOOMEY:	I am sorry, the same?
GAUDRON J:	Does it have the same life with the new

provisions?

Yuill 10 7/12/90

MR TOOMEY: Well, Your Honour, it is passed after Baker v

Campbell. There is a nice question as to whether

an interpretation which would have been available

when it had been passed has been changed by a later

decided case, and if the legislature picks up the

same wording then it really does pose a very nice

question indeed.

BRENNAN J: There is still a question of the implication

that you have drawn from each of the provisions.

MR TOOMEY:  Yes, Your Honour, but, in our respectful

submission the judgment of Mr Justice Handley is

compelling as to the reason why one should draw the

inference that section 299(2)(d) evidences an

intention or a belief, at least, to take

Mr Justice Dawson's distinction, that legal

professional privilege did not apply in respect of

oral statements, and once one gets to that alone,

that is an important question, because, as I

pointed out, if that were the case then, even if

documents protected by privilege were excluded, the

effect of being required to answer oral questions
could be to make that exclusion nugatory.

I do not know whether it is to be argued that

this is not a matter of general public importance,
Your Honours, but there are matters throughout

Australia - investigations proceeding throughout

Australia - in which this question has arisen, and

is desired to be decided.	May it please Your
Honours.

BRENNAN J: Mr Jucovic.

MR JUCOVIC:  Your Honours, the decision was an application

of the principle which was settled by the High

Court in Baker v Campbell, in our respectful

submission, not attended with sufficient doubt to

warrant the grant of special leave. The Court of

Appeal posed for themselves the correct question;

that is, one of statutory construction; whether

there was a clear and unambiguous intention to

abrogate legal professional privilege, against the

background in 1981, that at the state of the law,

the provisions that are pointed to in

section 299(2)(d) and 308, were protected with
legal professional privilege, and did not indicate
an intention to abrogate legal professional

privilege.

Baker v Campbell changed the position, but did not change the intention. The intention is that

there be a sufficient intention to abrogate by

clear words legal professional privilege. That is

not found here. If there is no such intention,

Your Honour, because of the state of the law, what

Yuill 11 7/12/90

you would then have here by the change of a law

following Baker v Campbell is really legislation by

stealth abrogating legal professional privilege,

having regard to the state of the law, the
legislature not having the relevant intention, so

found by the Court of Appeal.

BRENNAN J: But the test in Baker v Campbell was postulated

by reference to the view there expressed, that

there was a general common law right to legal

professional privilege?

MR JUCOVIC:  Yes, Your Honour.

BRENNAN J: And in that context, if the legislature should

then pass laws which fail to abrogate it by clear

and distinct language, understandably the view of

the majority in Baker v Campbell would be given

effect to so that the common law privilege would be

maintained, but that can scarcely be the test to

apply to determine the intention of a legislature

when the legislature is exercising its powers alio

intuitu, without any reference to the view

expressed in Baker v Campbell, which then

introduced a rule which had so recently been

disallowed by the High Court.

MR JUCOVIC:  Yes. We answer that by this means,

Your Honour. If the legislature is mistaken as to

its view of the application of legal professional

privilege, then it is not to be cured in this way,

that is by references in the division to elements
which are protective of legal professional

privilege, and by reference to section 308, which was passed to cure the difficulty in the Stanhill

case.

BRENNAN J: But is not the problem one of not applying

artificial rules, but ascertaining what the

legislature intended by the exercise of its powers?

MR JUCOVIC:  The Court of Appeal applied Baker v Campbell,

Your Honour, and the principle set forth in Baker v Campbell to determine whether there was a clear and

unambiguous intention to abrogate legal
professional privilege, and correctly, in our

respectful submission.

DAWSON J: Your answer is just simply it was unnecessary to

intend to do something it was unnecessary to do.

MR JUCOVIC:  That is correct, Your Honour, and the hints

that one finds in the sections are really based

upon an assumption protective of the subject so far

as legal professional privilege is concerned.

Your Honour, the matter is of public importance so

far as existing inquiries are concerned, but it is,

Yuill 12 7/12/90

in our submission, overtaken by the new companies

legislation, although it contains legislation of

substantially similar form. But Your Honours will

be asked in this case to determine the construction

of this Act by reference to the state of the law in

1981, which can have no application to the

interpretation of the subsequent legislation.

GAUDRON J: Well it does rather depend, does it not,

Mr Jucovic, on the process which is adopted in the

construction of the legislation? I mean, if the

view were taken that the abrogation of the

privilege was necessarily to be implied because

otherwise the provisions made no sense, that would

determine both matters, would it not?

MR JUCOVIC:  I accept that, Your Honour, but inherent - it

depends on the way in which it is approached if

special leave is granted - but inherent in the
arguments put here is the construction of these

provisions against the background of the state of

the law in 1881.

GAUDRON J: Yes, but is that not simply one matter which is

taken into account in the necessary implication? Is the argument not rather, look at those · provisions, that they only make sense on one basis

and that basis ought to be accepted because, in any

event, that was what it was assumed to be

generally.

MR JUCOVIC:  I accept that, Your Honour. That assumes that

a particular view is taken in argument in the

High Court and that is a unanimous view to be of

any utility in relation to the new legislation.

The point is that in relation to that legislation

the point can be made again on the basis of an

understanding that that legislation was enacted

against the decision in Baker v Campbell and that

question can come up in due course when it arises,

in our submission.

Your Honours, can I point out that the only

question before the Court of Appeal was privilege

in relation to documents. Mr Justice Handley was

part of the majority so far as that issue was

concerned. There was just not sufficient material

in the section to abrogate the privilege in

relation to documents. The question of oral

disclosure does not arise.

May I just remind Your Honours that

Mr Justice Hodgson thought that the question was a

finely balanced one. If Your Honours come to the

conclusion that special leave should be given, we

ask that it be given on terms as to costs. Can I

Yuill 13 7/12/90

just take Your Honours to Mr Justice Hodgson's

decision on costs at page 14. He noted that this:

is something of a test case.

He says at line 15 it is a finely balanced one.

It seems to me that in so far as the problem

has arisen because of this problem of the

legislation, I think it is reasonable that

each party bear their own costs up to the

present.

It is now put that it is a matter of public

importance and important for other investigations,

Your Honours. We would ask, if Your Honours

granted special leave, it be on terms that orders

for costs below are not disturbed and the

respondents be given an indemnity for their costs

in the High Court. If Your Honours please.

BRENNAN J: What do you say on the question of costs,

Mr Toomey?

MR TOOMEY:  Your Honour, I do not have instructions but I

could seek instructions and, no doubt, it would not

take very long.

BRENNAN J:	Do you need some time to do that?
MR TOOMEY:	I am afraid I would, Your Honour.

BRENNAN J: Yes. In that case, we will adjourn

MR TOOMEY:  May I deal very shortly with my learned friend's

argument?

BRENNAN J:  You do not need to reply on the other aspects of

the case.

MR TOOMEY: If Your Honour pleases.

BRENNAN J: Our order, of course, may be affected by the

instructions that you get.

MR TOOMEY:  I understand, Your Honour.

BRENNAN J: Perhaps we will adjourn this until 2 o'clock.

AT 12.55 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

Yuill 14 7/12/90

UPON RESUMING AT 2.04 PM:

BRENNAN J: Yes, Mr Toomey?

MR TOOMEY:  Your Honours, I regret to tell Your Honours that

I have not been given those instructions. I wish

to make plain, Your Honours, that I sought those

instructions.

BRENNAN J: Yes, of course. Do you wish to say anything,

Mr Jucovic?

MR JUCOVIC: Only that we would press that as a condition of

leave .•... such an order as to costs, Your Honour.

BRENNAN J:  Yes. The Court will grant special leave to

appeal upon terms that whatever be the result of

the appeal, the order for costs in the courts below will not be disturbed. The question of other costs

will be in the discretion of the Court.

MR JUCOVIC:  May it please Your Honours.

AT 2.06 PM THE MATTER WAS ADJOURNED SINE DIE

Yuill 15 7/12/90