Dainford Limited & Ors v Independent Commission Against Corruption

[1990] HCATrans 166

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S46 of 1990

B e t w e e n -

DAINFORD LIMITED

First Applicant

DAINFORD CONSTRUCTIONS PTY

LIMITED

Second Applicant

PROGRESS & PROPERTIES PTY LTD

Third Applicant

and

INDEPENDENT COMMISSION AGAINST

CORRUPTION

Respondent

Application for special leave

leave to appeal

MASON CJ

TOOHEY J

GAUDRON J

Dainford 1 6/8/90

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 6 AUGUST 1990, AT 10.05 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friends, MR G.A. FLICK and

MR w.G. HODGEKISS, for the applicants. (instructed

by J.M. Caruana, Kay & Barry)

MR J.M.N. ROLFE, QC: If the Court please, I appear with my

learned friend, MR J.L.B. ALLSOP, for the

respondent. (instructed by David Catt)

MASON CJ: Yes, Mr Jackson.

MR JACKSON:	Your Honours, may I hand the Court a document which contains a copy of the enactment, a copy of
our outline of submissions and there is also a
supplementary affidavit of some documents attached
to it.

MASON CJ:  Thank you. What is the supplementary affidavit

then?

MR JACKSON:  Your Honour, it raises a point which is in

addition to those set out in the original

application for special leave and that is the

substantial point with which we wish to deal

MASON CJ:  Yes. Why was it not put on earlier?

MR JACKSON:	Your Honour, it is a point that derives, in part from the Court's decision in Balog v
Independent Commission Against Corruption and,
Your Honour, that provides the base for it. That decision, I might also say, provides the reason why we shall not be proceeding with one of the grounds
for special leave.
MASON CJ: Yes.	I might say, Mr Jackson, that it would have

been of assistance if this material had been made

available earlier. As you will appreciate the

members of the Court read the papers before the

applications come on for hearing.

MR JACKSON:  Your Honour, may I say, in defence of that, that we were not permitted to file the document.

MASON CJ:	You were not permitted to?
MR JACKSON:	No, Your Honour.
MR ROLFE:	Your Honours, would it be of any assistance if we

were to indicate the respondent's attitude to

certain paragraphs of the affidavit?

MASON CJ: Yes.

MR ROLFE:	Your Honour, paragraph 5 annexes - - -
Dainford	6/8/90

MASON CJ: What page is this in the supplementary book?

MR ROLFE: It is page 38, Your Honour.

MASON CJ: Yes.

MR ROLFE:  - - - a series of correspondence which took

place after the decision in respect of which

special leave to appeal is sought. Paragraph 6,

Your Honours, deals with a different report

delivered after the judgment of the Court of Appeal

and paragraph 7 also annexes a letter which

postdated the decision of the Court of Appeal.

TOOHEY J:  It is a bit hard to know how to approach those

paragraphs, Mr Rolfe, until we know exactly what it

is that the applicant is now seeking to have

argued, because it appears to be a different case

to that originally formulated.

MASON CJ:  You are just giving us advance notice that you

have some kind of objection to these paragraphs?

MR ROLFE:  Well, yes. I thought it may be of some

assistance to the Court.

MASON CJ: Yes, Mr Jackson.

MR JACKSON:  Your Honours, as I indicated a moment ago,

since the application was filed, the Court has

given its decision in Balog v Independent

Commission against Corruption and, Your Honours,

that decision has had the effect that the

respondent does not in the present investigation,

to which that decision also related, have power to

make findings that persons have engaged in what I
might describe shortly as corrupt conduct, and

instead the Commission's powers are relevantly

those specified in section 74(5) of the Act, The

Independent Commission Against Corruption Act 1988

and may I take Your Honours to that section for

just one moment - it is at the top of page 32 of

the pamphlet copy of the Act, and Your Honours will

see that was the section with which the Court was

primarily concerned in Balog's case.

Your Honours, the contention which had been

advanced was that the Independent Commission

Against Corruption Act was ultra vires the State in that it enabled the making of a finding of criminal

conduct and, Your Honours, in consequence of that
decision, as I mentioned a moment ago, we do not

propose to pursue that ground because it seems to

have taken away, at least in the present case, the

foundation of it.

Dainford 6/8/90

Your Honours, the ground which it is submitted

merits the grant of special leave is that there has

never been a definition of the general scope and

purpose, if I could use that expression for a

moment, of the hearing taking place before the

Commission, that expression being one in terms used

in section 30(3) - - -

TOOHEY J: _ Mr Jackson, on that approach is there anything

left of the original draft notice of appeal?

MR JACKSON:  Your Honour, I think the answer is probably

"no", except that I would qualify that in one way,

the qualification being that the argument which we

seek to advance is one which is capable of being

put both as a matter of natural justice and as a

matter of power. Your Honour, may I perhaps go to

the terms of the notice of appeal in a moment, but
the way in which we put it is a double way, as it

were.

Your Honours, I was about to take

Your Honours to section 30(3), which provides that:

At each hearing, the person presiding shall

announce the general scope and purpose of the

hearing.

And our submission would be that there has never been a definition of the general scope and purpose

with the result that the hearing has not been

properly constituted and, Your Honours, I will come

on to the consequence of that more fully in a

moment if I may. Your Honours, we would submit

that a report based upon events taking place at a

purported hearing would not be a report

contemplated by the Act.

Now, Your Honours, may I go, and I can do so

very shortly, indeed, to the relevant provisions of

the Act and the associated facts. Your Honours,

under section 13(1) of the Act, paragraphs (a) and

(b) empower the Commission: to investigate any circumstances implying, or	any allegations, that corrupt conduct may have
occurred, may be occurring or may be about to occur;

and section 13(l)(b) is a cognate provision.

"Corrupt conduct" is defined by sections 7 and 8.

Your Honours, the power given by section 13(1)

is a power to investigate matters with the

investigation commencing of the Commission's own

motion and, Your Honours, this is such a case. The

Commission also has additional powers or additional

Dainford 4 6/8/90

functions in relation to matters which have been

referred to it by the Houses of Parliament and

Your Honours will see that in section 13(2)(a)(i).

The difference in language between

section 13(2)(a)(i) and section 13(l)(a) was

remarked upon by the Court in Balog's case at

page 9 as being significant in determining the

ambit of the powers conferred upon the Commission

by section 13(1).

Your Honours, the Commission is empowered to

prepare reports in relation to matters which it has

investigated. That is section 74(1). Those
reports go to the Parliament. That is

section 74(4). And one of the circumstances in

which the Commission must prepare a report is where

it has conducted a public hearing. That is

section 74(3). And, Your Honours, the reports is
to include the matters referred to in section 74(5)

and, Your Honours, that is the provision dealt with

by the Court in Balog's case where the Court said,

at page 10 of its reasons for judgment - and,

Your Honours, I am looking about three-quarters of

the way down the page in the last full paragraph:

The Commission is primarily an investigative

body whose investigations are intended to

facilitate the actions of others in combating

corrupt conduct. It is not a law enforcement agency and it exercises no judicial or quasi-

judicial function. Its investigative powers

carry with them no implication, having regard

to the manner in which it is required to carry

out its functions, that it should be able to

make findings against individuals of corrupt

or criminal behaviour.

Now, Your Honours, the Commission is empowered

to hold hearings in aid of its investigations.

That appears from section 30(1), and what is of

critical importance, in our submission, is the

requirement of subsection (3) of the same section,

that:

At each hearing, the person presiding shall

announce the general scope and purpose of the

hearing.

And it is of critical importance because whilst no

doubt required only to be stated in general terms,

it provides the only reference point by which one

can judge the subject-matter of the hearing and the

procedural rights which flow from it.

Your Honours in that regard, could I give

Your Honours references to the various sections of

the Act to which those matters are material. They

Dainford 5 6/8/90

are section 17(1) and section 17(2) at page 10, and

then from there - those sections set out the type

of hearing and then if one goes then to

section 30(4):

A person appearing before the Commission at a

hearing is entitled to be informed of the general scope and purpose of the hearing.

Under section 31(4), the general scope and purpose

is material to the question whether the hearing

should proceed in public or in private. Under

section 32 the subject-matter of the hearing is

material to the question whether a person may be

authorized to appear at the hearing or at part of

it. Under section 33(l)(b):

The Commission may, in relation to a hearing,

authorise -

and this picks up then in paragraph (b) the

preceding provision of section 32:

a person referred to in section 32,

to be represented by a legal practitioner - Your Honours, section 34(1) permits cross-

examination or examination on any matter that the

Commission considers relevant and that, of course,

must mean going back to the scope and purpose of

it. And Your Honours, section 36(2) empowers the

Commissioner to issue a warrant for the arrest of a

person if he is satisfied:

whose evidence is desired and is necessary and

relevant to an investigation -

and he will not come unless compelled. And then,

Your Honours, section 37(l)(b) says:

A witness summoned to attend •.•.. is not

entitled to refuse- ..... (b) to answer a question relevant to an	investigation put to the witness -
Now, Your Honours, in the instant case the

form of statement adopted in order to comply with

section 30(3) is that which is set out in the

supplementary book. It appears in a number of

places, Your Honours, but perhaps the easiest to

read is at page 40 and oral statements to the same

effect were made during the hearing on a number of

occasions.

Your Honours will see, going to the second paragraph of page 40:

Dainford 6 6/8/90

The Commissioner	has now decided to hold a
public hearing.	The general scope and purpose
of the hearing -	see section 30(3) ..... will be
as follows -

And then Your Honours will see two headings in

capitals:

TO INVESTIGATE -

and then Your Honours will see each of the three

subparagraphs following refers to:

the conduct of persons involved in the making

of applications -

and so on. The last one says:

matters related to any of the foregoing.

And then, Your Honours, the purpose - if one can

separate out "purpose" for the moment - is referred

to as being:

TO ASCERTAIN whether any such conduct amounts

to corrupt conduct within the meaning of

section 7 of the Act.

Now, Your Honours will see that the scope and

purpose there referred to is first in relation to

the conduct of specified persons or classes of

persons and, secondly, to ascertain that which the

Commission is not empowered to ascertain.

Your Honours, the difference is not one of mere

academic interest because if one goes back for a

moment to section 37(1) one sees in paragraph (b)

that a person"

is not entitled to refuse -

(b)to answer any question relevant to an

investigation - - -

GAUDRON J: Is it not really an over-statement of the

purpose, pure and simple?

MR JACKSON:  Your Honour, it is. If it were possible

GAUDRON J:  But it does not alter the subject-matter of the inquiry, does it?

MR JACKSON: Well, it does, with respect, Your Honour,

because the subject-matter of the inquiry on one
view as put by the Commission is that it is an

inquiry to ascertain whether the conduct of persons

amounted to corrupt conduct which is defined as

Dainford 7 6/8/90

Your Honour will have seen which leads one along a

certain track.

Now, Your Honours, on the other hand the

conduct which the Commission is empowered to

investigate is whether the conduct is sufficient to

result in the conclusions set out in section 74(5)

which is a lesser conclusion, of course. So,

Your Honour, it is right to say there is an element

of quality which is the same but, on the other hand

- and I was just going to seek to illustrate it,

Your Honour, by section 37(l)(b) - that if one is

looking at section 37(l)(b) the question relevant

to an investigation, one is looking at an

investigation of the question whether - and if I

could take Your Honours back to section 74(5) -

there is evidence or sufficient evidence warranting

consideration of one of the specified matters.

Now, Your Honours, if one is looking at a

particular question and the issue whether that

question is relevant, that is a different question,

in our submission, from the issue whether the

particular person is obliged to answer a question

of a nature relating to his own conduct. If the

Commission's powers are limited to those specified

in section 74(5) then the test of relevance has to

be by reference to what evidence would be

admissible at a hearing. On the other hand, if the

Commission's powers are to determine whether a person has engaged in the conduct specified, then

the Commission must not only go further but the

tests, in our submission, are somewhat different.

So, ·Your Honours, what we would submit in

relation to the provision is the difference is not

a mere academic interest and a different approach

is appropriate where what is sought is a

determination of a prima facie case.

GAUDRON J:  Is that the only difference you point to,

Mr Jackson?

MR JACKSON: Well, Your Honour, it is the only immediate

difference, yes. One could no doubt seek to

analyse evidence of particular witnesses in

particular ways but essentially the difference is

that on the one hand one is looking to see what

evidence might be material on the trial of a

person; on the other hand, one is looking to see

whether a particular person has been guilty of the

conduct in question bearing in mind the approach

which section 17 requires the Commission to take.

TOOHEY J:  Is that what is meant by paragraph 2 of the

outline of submissions, Mr Jackson, when it is

said:

Dainford 6/8/90

that the hearing conducted by the Commission

has never been the subject of an announcement

complying withs. 30(3)?

MR JACKSON:  Yes, Your Honour.

TOOHEY J: Just so that I understand this. Is the complaint

that, in a sense, the statement by the Commission

goes - not that it is inadequate but it goes too

far in so far as it purports to, as it were, to

authorize the Commission to ascertain whether the

conduct to be investigated amounts to corrupt
conduct?

MR JACKSON:	Yes, Your Honour.
TOOHEY J:	If that last sentence were not there and the statement simply spoke of the investigation to be
carried out by the Commission, would there be any
complaint?
MR JACKSON:	No, Your Honour, there would not be a complaint

for present purposes; it also would not be a

sentence, of course.	And, Your Honour, there would
not be - - -

TOOHEY J: Well if it stopped at "associated companies", it

would be.

MR JACKSON:  Yes. But, Your Honour, one really cannot

separate out the two, with respect, and the way in

which the statement of the scope and purpose of it

is put is one - one must bear in mind that what the

Act requires is that not merely the ambit of the

inquiry but its purpose also be stated. That is

section 30(3). If one looks at the whole of the

document, the whole of the statement, it is an

attempt to comply with it but it seeks to empower

the Commission to do the very thing which the Court

said it was not able to do in Balog's case.

GAUDRON J:  You have got to take other things into

consideration in your proposition, though, that the

evidence would be different, have you not? You

have got to take into account section 17.

MR JACKSON:  Yes, Your Honour, I have taken it into account,

Your Honour, but perhaps used it for a number of

purposes. One of the things that we would use

section 17(4) is this: section 17(4) - I am sorry,
section 17 does a number of things. One of them is

that it says:

The Commission is not bound by the rules or

practice of evidence and can inform itself on

any matter in such manner as it considers

appropriate.

Dainford 6/8/90

Now, Your Honour, the Commission is not just

dealing with investigations of this kind. If

Your Honour goes to section 13, Your Honour will

see that in subsection (1) it deals with functions

which the Commission has and which it is to

exercise, in effect, of its own motion. Now, they

fall into a number of categories and, Your Honours,

some of them are investigatory - that is (l)(a) and

(l)(b) - some of them are matters of education and,

Your Honours, I will not go through them but I

would refer Your Honours, for example, to 13(1)(i).

One also sees in subsection (2) that where matters

have been referred by the Commission to both Houses

of Parliament then the Commission is empowered to
do the very thing which, in the cases under 13(1),
it was held by the court the Commission could not

do in the 13(1) cases. So, Your Honours, one must

treat section 17 as having an operation which is

distributive in a way.

The second thing is that when one looks at

section 17(2), the fact that its hearings are to

be:

conducted with as little emphasis on an

adversarial approach as_ is possible -

gives weight, in our submission, to the contention

that the terms of section 30(3) are ones which have

to be complied with because they provide to any

person whose rights both of a procedural and

substantive nature may be in question, really the

only way in which the definition of the area within

which those rights may potentially be affected is

to be set out. And it is for those reasons,

Your Honours, that we would submit that that is a

matter of importance and what we would say is if it

be mandatory, it has not been complied with; if it
be directory, there has not been any substantial

compliance with it.

GAUDRON J: But is not the only consequence of what you have

put this, that had your client then been aware of

the proper construction or it being aware - I am

not too sure whether it is a he or an it - it might

have exercised his or its entitlement to refuse to

answer a question?

MR JACKSON: Well, it is a little more than that,

Your Honour, because where one goes from

section 30(3) is that if one goes back to
section 74, because there has been a public

hearing, there has to be a report and that appears

from section 7 4 ( 3 ) ..

Now, Your Honours, one would think it

inevitable that the report which is given is one

Dainford 10 6/8/90

which is to have a relationship to - to put it at

its lowest - what occurred at the public hearing.

Now, if it be, Your Honours, that the approach

taken in the public hearing in relation to the

evidence which might be accepted from any witness
or from the totality of witnesses was an approach

which was not one authorized by the Act, then one

should not be in a position where the report being

given to the Parliament is one which is based on a

hearing which occurred, in effect, in excess of

power.

TOOHEY J: But if the Commission were now to say, "We've

read the judgment of the High Court in Balog and we

realize that our report has to be couched in a way

that meets the requirements of that judgment", is

there any complaint that your clients can make?

MR JACKSON: Well, there is, Your Honour, because inevitably

the report of the Commission will be one that

depends upon what occurred at the hearing which it

had. Now, it is one thing to couch the findings

which the Commission may make in a manner which is

in accordance with the Court's decision in the

earlier case, but it is another thing altogether to

base them upon the terms of a hearing which took
place, in our submission, in excess of power and

what we would submit, Your Honour, is that gives

rise to questions whether, if evidence attained at

the hearing was sought to be used against anyone in
the future, the question would arise, for example,

whether that evidence had been obtained unlawfully

and whether it should be permitted to be adduced in

the case.

So, Your Honours, the question is one, we

would submit, leaving aside its correctness for the

moment, of importance because it operates in this

way: first, the report will be based upon what

took place at the hearing; secondly, the hearing,

in our submission, if wear~ correct, is a hearing

which was not authorized by the enactment in the

sense that it should not have proceeded further

without there being a correct statement under

section 30(3) and if that is so, our submission is

that the report must be one which is based, at

least in part and one would suspect in a very large

part, upon a hearing which was one not authorized

by the Act.

Your Honours, could I just say this: that if

one treats the issue as being purely one of power

or as being one of natural justice, as we would

submit it can also be treated, that is, a case

where a possibly adverse report should not be made

where it is based on evidence obtained in a hearing

conducted in excess of power, the issue is one of

Dainford 11 6/8/90

importance and, Your Honours, it affects, as we have set out in our outline of submissions, the persons whose conduct is in question; it affects

the question whether, if evidence was obtained in

excess of power, that evidence should be treated as

having been obtained illegally for the purposes of

the existence of a discretion be excluded and,

thirdly, the case is of importance because it will

determine the function to be performed by

section 30(3) in relation to future hearings.

Your Honours, may I also say that we would

accept that if special leave be granted that it is
accepted that the issue would need to be resolved

expeditiously.

Your Honours, one other question which does

arise is in relation to the question whether

special leave should, in any event, be granted in

order that the result of the case might be one in

accordance with the Court's decision in Balog and Stait v Independent Commission Against Corruption.

Your Honours, the issue probably is not one

necessary to resolve on the assumption that the

respondent is prepared to give assurances that - as

between ourselves and the Commission - the report

would be one following the decision of the Court.

TOOHEY J: Are you suggesting that special leave should be

granted in order to ensure that the Commission does

not act contrary to the judgment of this Court?

MR JACKSON: Well, Your Honour, I suppose that is one way of

putting it, with respect, but - - -

TOOHEY J:	It is a fairly stark way of putting it.
MR JACKSON:	Your Honour, the thing is we are not a party to - we had proceedings in being; we were not a
party to the appeal in the court. we are persons
whose conduct is likely to be discussed in the
report and as a matter of strictness, of course,
the earlier decision binds the Commission as
between itself and the parties to it and if there
are any further proceedings between the parties we
would want to be in a position where the fact that
the issue was not decided directly between us and
the Commission did not affect our rights in any
way.

MASON CJ: The Court will take a short adjournment in order

to determine the course it will take in this

matter.

AT 10.37 AM SHORT ADJOURNMENT

Dainford	12	6/8/90
UPON RESUMING AT 10.40:

MASON CJ:  The Court need not trouble you, Mr Rolfe.

In the light of this Court's recent decision

in the Balog case, the applicant has put forward a
fresh ground for the grant of special leave; one
not argued in the court below, namely, that the
hearing conducted by the Commission has never been

the subject of an announcement complying with

section 30(3) of the Act and that as a consequence

the hearing and any report published as a

consequence of the hearing would be beyond power or

involve a denial of natural justice.

We do not consider that this ground is

sufficiently arguable to warrant the grant of

special leave. Even if the announcement made as to

the scope and purpose of the hearing did not comply
with section 30(3) by reason of its statement of
the purpose, that non-compliance would not lead to

the consequences for which the applicant contends.

The application for special leave is therefore

refused. ·

MR ROLFE:	Your Honour, we would seek an order as to costs.
MASON CJ:	You do not oppose that, Mr Jackson? The

application is refused with costs.

AT 10.41 AM THE MATTER WAS ADJOURNED SINE DIE

Dainford 13 6/8/90