Elliott v Seymour (No 3)

[2001] FCA 1727

FEDERAL COURT OF AUSTRALIA

Elliott v Seymour (No 3) [2001] FCA 1727

VG411 of 1993

John Dorman Elliott  -v-  Sergeant Douglas Seymour, Thomas Sherman, National Crime Authority, Director of Public Prosecutions For The State of Victoria, Australian Broadcasting Corporation,  and  Steven Marshall Crabb

VG434 of 1993

Peter Camm, Peter Damien Scanlon and Kenneth Robert Biggins  -v-  Sergeant Douglas Seymour, Thomas Sherman, National Crime Authority, Director of Public Prosecutions For The State of Victoria

RYAN J
MELBOURNE
7 DECEMBER 2001

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG411 of 1993

BETWEEN:

JOHN DORMAN ELLIOTT
Applicant

AND:

SERGEANT DOUGLAS SEYMOUR
First Respondent

THOMAS SHERMAN
Second Respondent

NATIONAL CRIME AUTHORITY
Third Respondent

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF VICTORIA
Fourth Respondent

AUSTRALIAN BROADCASTING CORPORATION
Fifth Respondent

STEVEN MARSHALL CRABB
Sixth Respondent

JUDGE:

RYAN J

DATE OF ORDER:

7 DECEMBER 2001

WHERE MADE:

MELBOURNE

THE COURT ORDERS:

1.THAT the proceedings as against the third respondent, the National Crime Authority, be dismissed.

2.THAT the applicant pay the first and second respondents’ costs of the proceedings up to and including 21 July 2000, including all reserved costs together with the costs of the hearing as to costs on 22 February 2001, such costs to be taxed as between party and party.

3.THAT the applicant pay the third respondent’s costs of the proceedings to date, including all reserved costs and the costs of the hearing as to costs on 22 February 2001, to be taxed as between party and party.

4.THAT the applicant pay the costs of the fourth respondent, the Director of Public Prosecutions for the State of Victoria, of the proceedings up to and including 21 July 2000, including all reserved costs together with the costs of the hearing as to costs on 22 February 2001, such costs to be taxed as between party and party.

5.THAT subject to paragraph 6 of this Order and to payment of the costs referred to in paragraph 7 of this Order, the applicant have leave to file and serve a fresh statement of claim herein confined to the cause of action of misfeasance in a public office against the sixth respondent, Crabb, and incorporating therein paragraphs corresponding with paragraphs 77 to 82 but omitting sub-paragraph 81(b) of the draft statement of claim referred to in the reasons for judgment of Ryan J published this day as “the latest statement of claim” (“the latest statement of claim”).

6.THAT the leave granted by paragraph 5 of this Order be conditional upon the applicant’s subjoining to the paragraph corresponding to paragraph 78(b) of the latest statement of claim, particulars of the disclosure therein alleged in accordance with the said reasons for judgment published this day.

7.THAT the applicant pay the sixth respondent’s costs of the proceedings to date including all reserved costs and his costs of the hearing as to costs on 22 February 2001, such costs to be taxed as between party and party and paid within 21 days of the completion of the taxation thereof.

8.THAT liberty be reserved to any party to apply on not less than 48 hours notice in writing to the other parties.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG434 of 1993

BETWEEN:

PETER CAMM, PETER DAMIEN SCANLON and KENNETH ROBERT BIGGINS
Applicants

AND:

SERGEANT DOUGLAS SEYMOUR
First Respondent

THOMAS SHERMAN,
Second Respondent

NATIONAL CRIME AUTHORITY
Third Respondent

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF VICTORIA
Fourth Respondent

JUDGE:	RYAN J
DATE:	7 DECEMBER 2001
PLACE:	MELBOURNE

THE COURT ORDERS:

1.THAT the second applicant, Peter Damian Scanlon, pay the costs of the fourth respondent, the Director of Public Prosecutions for the State of Victoria up to and including 24 July 2000, including all reserved costs, together with that respondent’s costs of and incidental to its motion on notice dated 4 December 2000 and the hearing of that motion on 22 February 2001, such costs to be taxed as between party and party.

2.THAT liberty be reserved to each party to apply on not less than 48 hours notice in writing to the other party.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG411 of 1993

BETWEEN:

JOHN DORMAN ELLIOTT
Applicant

AND:

SERGEANT DOUGLAS SEYMOUR
First Respondent

THOMAS SHERMAN
Second Respondent

NATIONAL CRIME AUTHORITY
Third Respondent

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF VICTORIA
Fourth Respondent

AUSTRALIAN BROADCASTING CORPORATION
Fifth Respondent

STEVEN MARSHALL CRABB
Sixth Respondent

AND

VG434 of 1993

BETWEEN:

PETER CAMM, PETER DAMIEN SCANLON and KENNETH ROBERT BIGGINS
Applicants

AND:

SERGEANT DOUGLAS SEYMOUR
First Respondent

THOMAS SHERMAN
Second Respondent

NATIONAL CRIME AUTHORITY
Third Respondent

DIRECTOR OF PUBLIC PROSECUTIONS FOR THE STATE OF VICTORIA
Fourth Respondent

JUDGE:

RYAN J

DATE:

7 DECEMBER 2001

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

Introduction

1. On 26 May 2000, I made orders, the first of which directed the applicant in VG411 of 1993 (“Elliott”) to file and serve by 21 July 2000 a draft further amended statement of claim confined to the causes of action in conspiracy and misfeasance in a public office which had been referred to in reasons for judgment published on that day.  Those reasons for judgment referred to the “convoluted history” of this litigation and the fact that there were unresolved motions by the first, second, third, fourth and sixth respondents to strike out the then extant version of Elliott’s statement of claim.  The reasons for judgment of 26 May 2000 referred to earlier reasons for judgment published on 19 July 1999 which canvassed a multitude of criticisms of what had then been proposed to be substituted as Elliott’s statement of claim.  Those criticisms included an attack on the pleading as an abuse of process and were embodied in motions to strike it out as disclosing no cause of action.  As will be apparent from those reasons and the order made in consequence of them, which permitted Elliott to file and serve yet another draft further amended statement of claim, I did not then uphold those attacks which would have been fatal to Elliott’s application continuing in any form.

2. However, various respondents succeeded in a greater or lesser degree in their attacks on those portions of the draft statement of claim then under examination which purported to plead certain discrete causes of action.  Accordingly, Elliott was required to confine any future attempt at repleading to those causes of action which had been indicated in the reasons published on 19 July 1999 to be arguably available.  The reasons for judgment of 19 July 1999 required to be read in conjunction with much earlier reasons published on 12 May 1995 which had canvassed jurisdictional questions and pleading issues which had been raised in the present proceedings and in a related application (VG410 of 1993) in which Kenneth Charles Jarrett had sought relief against the first four respondents to Elliott’s application in VG411 of 1993.  For a full understanding of the successive elaborate attempts which have been made on behalf of Elliott, and, to a lesser extent, Scanlon as the remaining applicant in VG434 of 1993, to construct a viable statement of claim, it is similarly necessary for these reasons to be read in conjunction with all three of the earlier sets of reasons respectively published on 12 May 1995, 19 July 1999 and 26 May 2000.  In the interests of economy of space, I shall, where appropriate, incorporate in these reasons, relevant discussion of principle or common features of the successive versions of the statement of claim occurring in one or other of the earlier sets of reasons.

   The Latest Statement of Claim

3. In the reasons for judgment published on 26 May 2000 I described in detail the pleading then under consideration which was called “the substituted statement of claim”.  The third substituted statement of claim which has been introduced since then, I shall call “the latest statement of claim”.  The introductory paragraphs of the latest statement of claim differ little, if at all, from those examined in the earlier reasons of 19 July 1999 and 26 May 2000.  Paragraphs 23 and 24 of the substituted statement of claim have become paragraphs 20 and 21 of the latest statement of claim.  Paragraphs 23, 24 and 25 of the latest statement of claim introduce the Forex Transactions in terms substantially identical to pars 26, 27 and 28 of the substituted statement of claim except that par 25 of the latest statement of claim, which recites that;

   “The Payments were not genuinely in settlement of foreign exchange transactions.”

   has appended to it this greatly expanded set of particulars;

   “The Payments were made to discharge the indebtedness of EXL to Hawkins and/or ETL.  The indebtedness of EXL to ETL arose out of an agreement made between EXL and ETL in or about July 1986.  The agreement was partly oral, partly in writing and partly to be implied.

   Insofar as the agreement was oral it was constituted by conversations between Hawkins on behalf of ETL and Peter Scanlon (Scanlon) on behalf of EXL in or about July 1986.  The substance of the conversations was that EXL agreed to indemnify ETL in respect of a holding by ETL of between 55 and 60 million ordinary shares in BHP for the difference, if any, between a price of $9 per share as at 1 July 1986 increasing by 20% per annum (provided that the shares remain unsold at 30 November, 1986) until the shares were sold (the indemnified price) up to a period of 12 months and the sale price of any shares sold during period.  It was also agreed that in the event that ETL had not sold some or all of the shares during the period it would be entitled to the indemnified price as if on the last day of the period the remaining shares were sold at the best opportunity price for the unsold shares during the last month of the period.  It was further agreed that Elders Finance Group would become the preferred supplier of financial services to the ETL Group.  The agreement was to remain confidential to offers and agents of EXL and ETL on a need-to-know basis.

   Insofar as the agreement was in writing it was set out in a note hand written by Scanlon.  The note has not been located.

   Insofar as the agreement was to be implied it was to be implied from the conversation, the note and the delivery by Scanlon of a copy of the note to Hawkins.”

4. The latest statement of claim preserves the same recital of the issue of various notices (“the First Sandon Notice”, “the Second Sandon Notice”, “the Duffy Notice” and “the Second Sumner Notice”) by way of preface to the allegation in what was par 44 of the substituted statement of claim.  That allegation, which now appears in par 41 of the latest statement of claim, has been recast somewhat to read;

   “Each of the First Sandon, Second Sandon, Duffy and Second Sumner Notices was procured by the NCA for one or more of the following purposes:

   (a)investigating the business affairs of the Applicant whether or not the investigation was authorised under the Act;

   (b)      attracting adverse publicity to the Applicant;
   (c)       causing damage to the Applicant’s reputation;

   (d)obtaining evidence for use by the New Zealand Securities Commission (NZSC);

   (e)obtaining evidence for use by the New Zealand Serious Fraud Office (NZSFO);

   (f)obtaining evidence for use by the Statutory Managers of ETL (SMETL).”

5. The latest statement of claim reproduces (renumbered 44 to 49) the paragraphs under the heading “Scope of the Notice” which have been described in the reasons for judgment of 26 May 2000.  There are then identical allegations in what have become pars 50 to 53, leading to the conclusion noted at [5] of the earlier reasons of 26 May 2000 that “each of the Notices “was and is invalid and incapable of authorising the NCA to use its Coercive Powers” and that “none of the Notices authorised a special investigation into the Forex Transactions.””

6. The section from the substituted statement of claim headed “Negligence of NCA concerning Notices” has been omitted from the latest statement of claim which proceeds, under the heading “NCA Summons and Hearings” to reproduce as pars 55 to 76 what had been pars 63 to 84 of the substituted statement of claim.  Paragraph 72 of the latest statement of claim corresponds with par 80 of the substituted statement of claim which is reproduced at [8] of the reasons for judgment of 26 May 2000 but has been expanded and recast to read;

   “72.Each of Summonses MS46 and MS94 was issued for a purpose other than the purpose for which the power in section 28 of the Act was conferred, being one or more of the following purposes:

   (a)       investigating the Forex Transactions;

   (b)investigating the business affairs of the Applicant whether or not the investigation was authorised under the Act;

   (c)attracting adverse publicity to the Applicant;

   (d)charging the Applicant with criminal offences whether or not such charges were justified;

   (e)causing damage to the Applicant’s reputation;

   (f)causing prejudice to a fair trial of the Applicant if he were to be charged with a criminal offence;

   (g)obtaining evidence for use of the NZSC;

   (h)obtaining evidence for use of the NZSFO;

   (i)obtaining evidence for use by the SMETL.

   PARTICULARS

   The Applicant refers to the particulars under paragraph 41 above.  He says further that the Summonses were issued to facilitate the unfair examination of the Applicant, in the absence of any caution or warning that he may incriminate himself, to undermine his credibility should he be required or choose to give evidence at some future time on behalf of EXL or on his own behalf in relation to the affairs of EXL.”

7. It is correspondingly alleged in par 73 of the latest statement of claim that each of “the First, the Second and the Third Hearings was convened” for an ulterior purpose being one or more of the purposes asserted in sub-pars 72(a) to (i) reproduced above.  Paragraphs 74 to 76 of the latest statement of claim then plead the consequential unlawfulness of the issue of the Summonses and of the convening of the Hearings and the resultant invalidity of each of the Summonses.  However, there is no allegation in the latest statement of claim corresponding with that in pars 85 to 89 of the substituted statement of claim that the Summonses had been issued negligently and in breach of a duty of care owed to Elliott.  In consequence, there is no allegation corresponding with par 58 of the substituted statement of claim of any loss and damage suffered by Elliott.  Nor is there any allegation corresponding with pars 90 to 91 of the substituted statement of claim, of a duty of care owed to Elliott in the conduct of the First Hearing.  Also omitted from the latest statement of claim are allegations, corresponding with pars 95 to 100 of the substituted statement of claim, alleging negligence against Leckie, Livermore and the NCA in the disclosure of secret information.  Instead, the latest statement of claim proceeds immediately to make, under the heading “Misfeasance by Crabb” allegations in pars 77 to 82 which correspond with pars 101 to 105 of the substituted statement of claim.  The particulars to what has become sub-par 78(b) of the latest statement of claim alleging disclosure by Crabb of the Crabb Information to the ABC have been recast to read;

   “That Crabb provided the information is to be inferred from the ABC’s solicitors’ letters to the Applicant’s solicitors which are referred to in and/or are exhibits to the affidavit sworn by the Applicant on 30 September 1993 filed herein and by Anthony Darvall on 22 October 1993 and filed therein.”

8. Allegations of a conspiracy by Seymour, Sherman, the NCA and the DPP to injure Elliott by unlawful means corresponding with pars 109 to 111 of the substituted statement of claim have been omitted from the latest statement of claim, as have the allegations, corresponding with pars 112 to 114 of the substituted statement of claim, charging a further conspiracy between the NCA, NZSC, NZSFO AND SMETL.  The claim for exemplary damages formerly made in par 115 of the substituted statement of claim has been confined, in par 82 of the latest statement of claim to Crabb “by reason of his contumelious disregard of the applicant’s rights and reputation when engaging in the conduct complained of in paragraphs 78 to 80 above.”

9. The latest statement of claim preserves, in par 84, the allegation in these terms of a continuing investigation by the NCA;

   “The NCA continues to conduct a special investigation into the affairs of the Applicant pursuant to the Notices and each of them.

   PARTICULARS

   The continuation of the special investigation is:

   (a)admitted by the NCA in its Annual Reports prepared pursuant to section 61;  and

   (b)to be inferred from the fact that the NCA has not served written notices pursuant to section 29A(5) of the Act on any person upon whom it served a summons.”

10. The Schedule of Parties to the latest statement of claim shows as deleted from the list of respondents Seymour, Sherman, the DPP and the ABC, leaving only the NCA and Crabb as continuing respondents.

    Should the proceedings continue confined to injunctive and declaratory relief against the NCA?

11. The allegation of a continuing investigation by the NCA into Elliott’s activities was said by Mr Macaw QC who appeared with Mr R Peters for Elliott on his application for leave to substitute the latest statement of claim for that presently standing as his pleading, to give Elliott a real practical interest in obtaining declaratory relief.  The latest statement of claim contains no prayer for relief, but the abandonment of any allegation that Elliott has suffered loss and damage otherwise than as a result of the actions alleged against Crabb confines his claim to final relief against the NCA to the following paragraphs from a draft substituted application prepared as at September 1999;

    “1.A declaration that each of the Bowen, the Crabb, the First Sumner, the First Sandon, the Second Sandon, the Duffy and the Second Sumner Notices (“the Notices”), all referred to in the accompanying Substituted Statement of Claim, is invalid.

    2.A declaration that each of the Notices did not authorise the Third Respondent (NCA) its officers, servants or agents to investigate any matter purportedly referred to it thereunder.

    3.A declaration that none of the Notices authorised the NCA its officers, servants or agents to investigate the Forex Transactions referred to in paragraph 27 of the Substituted Statement of Claim.

    4.A declaration that summons MS46 and Summons MS94 referred to in the accompanying Substituted Statement of Claim are invalid.

    5.A declaration that the issuing of Summons MS46 and Summons MS94 was unlawful.

    6.A declaration that the convening of the First, Second and Third Hearings referred to in the accompanying Substituted Statement of Claim was unlawful.

    7.A declaration that the disclosure and provision of the information referred to in paragraph 102 of the accompanying Substituted Statement of Claim was unlawful.

    8.A declaration that the conduct referred to in paragraphs 109(a), (b), (c) and (d) of the accompanying Substituted Statement of Claim was unlawful.

    9.A declaration that the conduct referred to in the particulars in paragraph (g) under paragraph 112 of the accompanying Substituted Statement of Claim was unlawful.

    10.An injunction restraining the NCA by its officers, employees, agents or otherwise howsoever from further conducting an investigation pursuant to the Notices.

    11.An injunction compelling the NCA, its officers, employees and agents to return all evidence, documents and things obtained pursuant to or in the course of the investigation conducted pursuant to the Notices and all copies thereof to the person from whom it was obtained.”

1. The provision of the information referred to in par 102 of what is there called “the Substituted Statement of Claim” was to “information concerning the Forex Transactions obtained using coercive powers” allegedly provided to the NZSC, the NZSFO and SMETL.  In the latest statement of claim there is no reference to the provision of information to any of those New Zealand agencies.

2. The conduct referred to in par 8 of the prayer for relief quoted in [11] above, was referable to the conspiracy by which Seymour, Sherman, the NCA and the DPP were said to have combined to injure Elliott by unlawful means.  The conduct alleged in par 112 of what was then proposed as the substituted statement of claim was said to have occurred in furtherance of the conspiracy then alleged between the NCA, NZSC, NZSFO and SMETL.  As already noted, neither of those allegations of conspiracy has been preserved in the latest statement of claim.  It will be apparent that, if leave be given to substitute the latest statement of claim for the pleading presently standing as Elliott’s statement of claim, the application must be amended so that paragraphs of the prayer for relief refer intelligibly to corresponding paragraphs of the statement of claim in its final version.  However, no point has been taken about that matter for the purposes of the argument about whether the latest statement of claim discloses a viable cause of action against the NCA.

3. One respect in which Elliott is said to have a real practical interest in obtaining declaratory relief is that such relief, by establishing that powers conferred by the National Crime Authority Act had been exercised for an ulterior purpose, would provide a platform for seeking to exclude evidence obtained in exercise of those powers, should Elliott need to do so in proceedings in the future.  Reference was made to the following passage from the judgment of Brooking JA in Director of Public Prosecutions Reference No 2 of 1996 [1998] 3 VR 241, which is quoted at [53] of my reasons for judgment of 19 July 1999;

   “To say that the phrase ‘for the purposes of’ in s 25(1) and s 28(7) is not concerned with the state of mind of members of or other persons representing the authority is of course not to say that that state of mind may not be called in question in an attempt to show, in reliance upon the doctrine of administrative law, that a power has been exercised for an ulterior purpose.”

4. However, from the discussion which follows in Brooking JA’s judgment in that case, it is clear that the controversy in that case was whether Vincent J had determined that unlawfulness of the investigative process meant that statements made in the course of it were necessarily involuntary or whether voluntariness was a question of fact depending on the circumstances.  Shortly after the passage just quoted, Brooking JA continued, also at 261;

   “Before us the parties were unable to agree either on what the gist of their respective submissions was before the judge or on what it was that the judge decided so far as the question of voluntariness is concerned.  The material shows that before the judge the director argued that it did not necessarily follow from the invalidity of process that a statement made at a hearing was in all circumstances involuntary.  Before us the respondents asserted that they had not sought to persuade the judge that the unlawfulness of the process necessarily meant that the statements made were involuntary, but reference to the material shows that this was the position they took up before the judge.  In the end the principal dispute before us concerned what it was the judge had decided in relation to voluntariness.  For it became apparent that the respondents were not seeking to maintain the position they had taken up at the trial, in that they now accepted that the unlawfulness of the process did not necessarily meant that the statements were involuntary.  This concession is plainly correct.  The respondents argued that the judge had not determined that the unlawfulness of the process meant that the statements must be involuntary but had instead accepted that voluntariness was a question of fact, depending on the circumstances. 

   At the time the judge gave Ruling No. 9, the respondents were asserting, and the director was denying, that the unlawfulness of the compulsive process would necessarily and in all circumstances mean that statements made at the hearings were involuntary and inadmissible.  It is clear enough that in Ruling No. 9 his Honour determined this question in favour of the respondents.  At an early stage of Ruling No. 9 at 3372-3 his Honour referred to what had been said by Brennan J in Collins v R (1980) 31 ALR 257 at 307 on the need, in considering the issue of voluntariness, to make a careful assessment of the effect of the actual circumstances of a case upon the will of the particular accused. His Honour went on to say that the case did not raise an issue of voluntariness in the sense in which Brennan J had been discussing that matter: rather it raised a quite different question, namely, whether the authority had acted without power in conducting its hearings, so that it had no power to require any of the accused to attend at the hearing or to compel them to answer questions.” (emphasis added)

5. The passage to which I have added emphasis makes it clear that, if the concession there referred to is maintained, Elliott could not obtain a conclusive declaration that information procured from him in the NCA hearings is inadmissible in future proceedings whatever the circumstances.  Voluntariness would still be open in those future proceedings as a question of fact.  Even if the latest statement of claim were further amended to plead circumstances which are said to render involuntary the provision of information by Elliott to the NCA, I consider that it would be inappropriate for this Court to attempt to resolve that issue outside the context of proceedings, almost certainly in another court, in which it might be sought to make the information admissible.

6. Nor do I consider that the case for allowing the latest statement of claim to go forward in its present form is supported by the observations of a Full Court of this Court in AB v National Crime Authority (1998) 85 FCR 538, to which Mr Macaw also referred. In that case, the Full Court accepted that evidence relevant to the contention that the NCA was acting for an improper purpose, ie one outside the scope of the matter which had been referred to it, was admissible in an application under s 32(2) of the National Crime Authority Act to review a decision of the NCA.  However, no attempt is made in the latest statement of claim to seek a review of any presently operative decision of the NCA and I do not regard the observations of the Full Court in that case as of assistance on the question of whether Elliott should be permitted to seek a declaration at large that some action of the NCA has been infected by improper purpose in that sense. 

7. Counsel for Elliott next referred to the judgment of the Court of Appeal of the Northern Territory in Northern Australian Aboriginal Legal Aid Service v Bradley (unreported, 16 November 2000) where a specially constituted Court (Priestley J, Doyle AJ and Brooking AJ) considered whether Olney J had been correct in striking out a statement of claim which alleged that the appointment of the first defendant as Chief Magistrate had been for an improper purpose.  The Court of Appeal held that the plaintiff had an arguable cause of action, concluding at [35] that if the purposes imputed to the Executive and the first defendant by the plaintiff were to be established;

   “..... then it would in our view be fairly arguable - still leaving aside justiciability - that the appointment was invalid as not made, to adapt the words of Brennan J in Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 34, for the purpose of securing the proper administration of justice according to law by the magistrates of the Northern Territory.”

8. The Court of Appeal in Bradley went on to observe, at [36] - [38];

   “But the pleading shows that the agreement or arrangement alleged that the first defendant should hold office for two years was not made to accommodate an unwillingness on his part to serve for a longer period.  Paragraph 12 asserts that the purposes of the appointment made to give effect to the agreement or arrangement were, inter alia, “to create what was, in effect, a two year appointment subject to review at the expiration of that time: and “to secure the appointment ... of a person who would, at the expiration of two years, be dependent upon the Executive Government for remuneration and allowances.”  These two particulars are quite inconsistent with a mere case of acquiescence in an intimation prior to appointment of a desire to retire early.

   It is fairly arguable that, where a statute provides that a magistrate appointed under it holds office, subject to the statute, until attaining the age of 65 years, it is not an exercise of the power of appointment for the purpose for which it was conferred to appoint someone in order to give effect to an agreement or arrangement that the appointee shall hold office for only two years on certain terms and conditions and that this should “create what was, in effect, a two year appointment subject to review at the expiration of that time.”

   Another way of putting the same point is to say that it is fairly arguable that an appointment under such circumstances is made improperly to circumvent the statutory provisions as to tenure.”

9. Their Honours then concluded that it was fairly arguable that the validity of the appointment of the first defendant was justiciable.  In that respect, that case is to be distinguished from the present because, as the subsequent history of Bradley demonstrates, the plaintiff in that case, as a corporation charged with the representation of many persons required on a continuing basis to appear before the Magistrates Court of the Northern Territory, had a present, practical interest in the validity of the appointment of the Chief Magistrate.  By contrast, a determination by way of declaration in the present case that some conduct of the NCA has been unauthorised, or for an improper purpose or otherwise invalid, would simply hang in the air until Elliott should choose to invoke the declaration, as I have said already, as a platform for excluding evidence or otherwise impeding some activity which the NCA can be shown to be undertaking which impinges on some interest of his.

10. I accept, as Counsel for Elliott submitted, that the Court, in assessing whether a pleading discloses a cause of action is bound to assume the truth of the factual allegations pleaded.  Thus, in Hubbuck & Sons Ltd v Wilkinson Heywood & Clark Ltd [1899] 1 QB 886, Sir Nathaniel Lindley MR said, at 90;

    “The application is made under Order XXV, r 4.  Order XXV abolished demurrers and substituted a more summary process for getting rid of pleadings which shew no reasonable cause of action or defence.  Two courses are open to a defendant who wishes to raise the question whether, assuming a statement of claim to be proved, it entitles the plaintiff to relief.  One method is to raise the question of law as directed by Order XXV, r 2;  the other is to apply to strike out the statement of claim under Order XXV, r 4.  The first method is appropriate to cases requiring argument and careful consideration.  The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands is insufficient, even if proved, to entitle the plaintiff to what he asks.  The use of the expression “reasonable cause of action” in rule 4 shews that the summary procedure there introduced is only intended to be had recourse to in plain and obvious cases.”

11. However, his Lordship’s reference to “plain and obvious cases” has to be qualified by the caveat entered by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] 112 CLR 125, where it was observed, at 129;

    “At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed;  or “so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument”;  “so to speak apparent at a glance”.

    As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same.”

12. After referring to Dey v Victorian Railways Commissioners (1949) 78 CLR 62, and observing that “great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal”, his Honour continued, at 130;

    “On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim.  Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”

13. As the tortured history of the present case demonstrates, there has been complex argument of a most extensive kind which has resulted in the striking out, or abandonment, of successive attempts to plead a variety of causes of action.  What is left for consideration is whether the remaining claims for declaratory and injunctive relief can possibly succeed.

14. One allegation of fact, the truth of which, Counsel for Elliott contended, must be assumed for all present purposes, is that in par 12 of the latest statement of claim that no consultation with the Inter-Governmental Committee occurred before a matter, the subject of the Bowen Notice, was referred to the NCA. Another is that in pars 57, 60 and 70 of the latest statement of claim to the effect that, contrary to s 28(2) of the National Crime Authority Act, the Summonses MS46 and MS94 were not accompanied by a copy of each of the Bowen, the Crabb, the First Sumner and the First Sandon Notices. It is then said that the Summonses, which were accordingly defective, were issued as part of an investigation as a result of which evidentiary material was invalidly obtained. As the investigation is pleaded in par 84 of the latest statement of claim quoted at [9] above to be continuing, Elliott, so the argument went, is entitled to declaratory and injunctive relief in vindication of his right not to be subject to an invalid investigation.

15. Reference was made in this context to the joint judgment of Lockhart and Beaumont JJ as members of a Full Court of this Court in Jarrett v Seymour (1993) 46 FCR 557, where it was observed, at 564;

    “One of the great problems in the litigation in this Court is that at the final hearing the Court will be asked to find that certain evidence which may be relevant to the prosecution’s case in criminal proceedings against the applicants should be held to be incapable of being relied on in criminal proceedings for one reason or another, including the fact that it was gathered illegally.  The applicants seek a in a final hearing in this court permanently to restrain the respondents from prosecuting the applicants in respect of “foreign exchange matter”.  But this court does not even know what the precise charges are that may be brought against the applicants, as they have not yet been laid.  Also, as the written submissions demonstrate and the oral argument before us reinforces, many of the questions of fact which the primary judge was asked to determine may become hypothetical when criminal prosecutions commence.  The prosecuting authorities will determine what evidence should be led in support of the prosecutions, and such evidence may or may not include evidence of the kind which the applicants seek to challenge in this case.”

16. Those observations were said by Counsel for Elliott to be inapplicable to the question of whether the latest statement of claim discloses a cause of action because they were directed to an attempt to restrain the laying of any charges at all, which might not depend wholly on the presumptively invalid investigation.  All that Elliott seeks to achieve by the latest statement of claim is to restrain continuing conduct of an investigation founded on deficient notices or which utilised invalid summonses and the disgorgement of evidentiary material which, as a result, has been invalidly obtained.  That, it was said, is a narrower form of relief than a restraint on the laying of charges however they might arise. 

17. In a related way it was contended that the proceedings as originally formulated included a claim for injunctions against Seymour and Sherman who were indisputably officers of the Commonwealth within the meaning of s 75(v) of the Constitution. Accordingly, the claims as a whole attracted the accrued jurisdiction of this Court as recently described in Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572 (8 November 2000), where it was observed, at [84] - [85];

    The judgment to be made in assessing the scope of the accrued jurisdiction extends to the relationship between the federal and non-federal claims said to fall within it.  Further, the federal claim must be a substantial aspect of the controversy if that controversy is to attract federal judicial power.  As the majority said in Fencott v Muller at 609:

    “A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect.  Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power.”

    It is to be noted that the characterisation “trivial or insubstantial” is not an absolute attribute of the federal claim or a description of its strength or weakness but rather a description of its relationship to the controversy in respect of which jurisdiction is invoked.

    Jurisdiction conferred on a Federal Court in respect of a matter authorises the Court to determine all the claims, federal and non-federal, which are involved in the controversy.  That the federal claim is determined adversely to the applicant does not thereby deprive the Court of jurisdiction to deal with the non-federal claims.”

18. In the same case the Full Court went on to observe that the exercise of accrued jurisdiction is subject to the Court’s discretion. 

19. The force of these submissions as to jurisdiction on behalf of Elliott may be conceded.  As I observed in the reasons for judgment of 12 May 1995;

    “This Court may, on a full investigation of what Lockhart and Beaumont JJ in Jarrett & Ors v Seymour & Ors (1993) 119 ALR 46 called "the factual matrix" in which arise the questions sought to be agitated by the present applicants, conclude that no decisions were taken and no conduct was engaged in by Seymour or Sherman in their respective capacities as a Commonwealth officer. However, although the relevant paragraphs in the prayer for relief are not framed as claims for injunctions expressly restraining either of them in that capacity, on the approach indicated in McIntosh v National Australia Bank (supra,) I am not able to conclude from the face of the pleadings that the injunctions do not rest on an alleged violation of a positive law to which Seymour or Sherman was subject by virtue of being a Commonwealth officer.  Accordingly, I consider that this Court has jurisdiction to entertain so much of the matter disclosed by the statement of claim as arguably involves those officers in their capacity as such.”

1. At p 26 of the same reasons, I went on to refer to Fencott v Muller (1983) 152 CLR 570, and observed;

   “Since I have found it impossible to conclude on the facts disclosed by the further amended statement of claim that federal jurisdiction has not been attracted to this Court under either or both s 39B of the Judiciary Act or the AD(JR) Act, it would be premature now to decide whether the other matters discernible from the pleading are relevant to those matters which arguably attract federal jurisdiction under those Acts.”

2. However, it has not been contended on behalf of the NCA that the latest statement of claim discloses a cause of action which this Court lacks jurisdiction to entertain.  Rather, it is said that the remaining claims for relief are not supported by allegations of fact which demonstrate a legal or equitable right justiciable by any court.  It was pointed out on behalf of the NCA that the various Notices which the latest statement of claim impugns as invalid were all in respect of identifiable allegations of criminal conduct.  What is sought by these proceedings is a permanent injunction restraining any investigation of that alleged conduct and the return of material obtained in a past phase of the investigation.  Foster J at first instance in Jarrett v Seymour (1993) 46 FCR 521, dismissed the possibility of the applicants (including Elliott) obtaining a permanent injunction restraining the laying of criminal charges. His Honour said, at 549;

   “It must be acknowledged, however, that there are questions involved which cannot really be determined by myself at this stage.  What I must determine, however, is whether those questions realistically raise a serious issue, resolution of which might lead to the imposition of a permanent injunction against Seymour restraining him from laying charges against Elliott and the other applicants.  For reasons which are substantially similar to those that I have already advanced in relation to the alleged lack of authority in the references, I decline to hold that a serious issue has been demonstrated.  I am quite unable to accept that a judge of this Court finally hearing this matter would, as a matter if discretion, issue a permanent injunction restraining Seymour from laying charges on the basis that he would be acting wholly or partly as an agent of the NCA when so doing.  In any event, such an injunction would restrain only Seymour.  Any other police officer in the Victoria Police Force, whose “independence” was not in question, could take control of the matter and lay the charges.”

3. In my view, the likelihood of the outcome described by his Honour is even stronger when it is postulated in respect of a permanent injunction restraining the NCA from “further conducting an investigation pursuant to the Notices.”  There would be an obvious difficulty in supervising obedience to any such injunction because of the statutory regime of secrecy which surrounds investigations by the NCA and because it would be virtually impossible to predicate of a particular investigation (assuming that one could be identified) that it was being conducted “pursuant” to one of the presumptively invalid Notices. 

4. In any event, I am not persuaded that an individual citizen has a right in the abstract to what Mr Macaw accepted could be characterised as “a right not to be subject to invalid investigations.”  It may be accepted that if some administrative act performed for an improper purpose or otherwise without lawful authority impinges on the person or property of a citizen, as when an attempt is made to execute an invalid search warrant, a remedy is usually afforded to prevent such an impact.  Similar considerations would apply to an invalidly founded attempt to use the coercive powers of the NCA to compel a citizen to furnish information to it.  However, there is nothing in the latest statement of claim to indicate any practical impact on Elliott of the continuing “special investigation into the affairs of the Applicant” alleged in par 84 of the latest statement of claim.

5. A mere investigation by the Executive or a statutory agency does not, of itself, infringe the rights of a citizen.  As Stephen J observed in R v Collins;  Ex parte ACTU-Solo Enterprises Pty Ltd (1976) 8 ALR 691, at 694;

   “At common law no limit exists as to the powers of inquiry of the executive government;  these powers it may exercise by means of Royal Commissions and if it does so no question can arise for the courts as to the propriety of doing so.  The courts will not “inquire into the propriety of executive action” so long as no question whether the law has been transgressed arises, and for the executive to inquire by means of a Commission is not in itself any such transgression (Clough v Leahy (1904) 2 CLR 139, especially at 156-7 per Griffith CJ). The power to legislate carries with it a power to make inquiry, if necessary by Royal Commission (Colonial Sugar Case per Griffith CJ (15 CLR) at 194 and especially per Barton J at 205), and no legal objection exists to “commissions of mere inquiry and report involving no compulsion, except under the authority of statute, no determination carrying legal consequences and no exercise of authority of a judicial nature in invitos” (Dixon J in McGuinness v Attorney-General (Vic) [1940] ALR 110; 63 CLR 73 at 102). The instant Royal Commission is just such a mere commission of inquiry and report, its compulsive powers it derives from Commonwealth statute law and they are not under challenge. The reported conclusions of the Commission no doubt serve to inform the mind of government and may, in consequence, to a greater or lesser extent, be instrumental in shaping the course of future legislative or executive initiatives but they neither directly determine, or of their own force affect, rights nor does the reporting of particular conclusions satisfy some condition precedent to the exercise of power which will in turn affect rights or otherwise give rise to legal consequences. The making of the report does not place rights “in a new jeopardy” or “subject them to a new hazard”, as Kitto J thought was done by the inspector’s reports in Testro Bros Pty Ltd v Tait [1963] ALR 769; 109 CLR 353 at 369 and 370.”

6. As his Honour there implied, a remedy may be available where some unauthorised compulsion is directed at a citizen or the citizen’s rights are jeopardised or subject to a new hazard.  However, the latest statement of claim alleges no fresh infraction of that kind of Elliott’s rights. 

7. The position would also be different if actual criminal charges had been laid or formulated against Elliott.  It will be remembered that this action was originally instituted to restrain the laying of charges of just that kind, of which, in the result, Elliott was acquitted, after the ruling by Vincent J which was the subject of Director of Public Prosecutions Reference No 2 of 1996, discussed at [14] and [15] above. However, the latest statement of claim is devoid of any allegation that the NCA or anybody else proposes to lay, or has laid, against Elliott fresh criminal charges of any kind. If and when such charges are laid, the remaining issues between Elliott and the NCA raised by the latest statement of claim will no longer be hypothetical, although a real question of discretion may arise as to whether they should be determined by a civil court like this rather than in the course of a criminal trial. The question was adverted to in the present context by Gaudron J in Elliott v Seymour (1993) 119 ALR 1, where her Honour observed, at 7 - 8;

   “It is by no means clear that civil proceedings will lie to prevent the laying of criminal charges.  But, if they do, it will only be because it would be an affront to justice if the proceedings were to be instituted or, and this may be an aspect of the same thing, because the safeguards available in criminal proceedings are clearly inadequate to protect against the injustice involved.  As earlier indicated, if that could be said of a case, it would be an exceptional case and no question of the balance of convenience could sensibly arise.

   ... ... ... ... ...

   It is essential that bodies such as the NCA and the DPP are scrupulous in observing the limits of their powers, in paying proper regard to the civil liberties of those whom they investigate and prosecute and in ensuring that they and their officers and employees exercise and are seen to exercise their powers bona fide and only for the purposes for which they are intended.  Otherwise and as this case demonstrates, public confidence in the prosecution process will be eroded.  That notwithstanding, it does not seem to me that it is fairly arguable in the circumstances of this case that the failure of the NCA to act within the limits of its powers makes the case exceptional in the sense indicated or in any other sense that might justify an order preventing charges being laid.  As earlier noted, that failure is confined to the exercise of coercive powers in relation to a matter which was not within the terms of references given to the NCA (if that should prove to be the case) and acquiescence in Sergeant Seymour’s becoming a Special Constable to avoid the implied prohibition in s 12 of the Act (again, if that should prove to be the case).  I am of the view that there is no prospect of special leave being granted to enable the applicants to argue that those matters make the case exceptional.”

8. For other examples of judicial emphasis on the need for exceptional circumstances to justify injunctive relief against executive officers in cases like the present, see R v Horseferry Road Magistrates’ Court;  Ex parte Bennett [1994] 1 AC 42 and Jago v District Court of New South Wales (1989) 168 CLR 23, where Brennan J indicated that abuse of process can constitute one species of the exceptional circumstances which are required. There is nothing on the face of the latest statement of claim to indicate anything capable of making this case exceptional in the sense indicated by Gaudron J in Elliott v Seymour to justify a permanent injunction to restrain, not the laying of criminal charges, but the further conduct of an investigation. Moreover, although not strictly creating an issue estoppel, the finding by Vincent J in Ruling No 13, quoted at [51] of my reasons for judgment of 19 July 1999, that “there has [not] been any deliberate abuse of those powers [of the NCA]” raises an almost insuperable obstacle to Elliott’s now alleging exceptional circumstances of the requisite kind.

9. Whether or not considerations like those just canvassed prove decisive in the future, a refusal by this Court to allow those issues to be agitated in the present proceedings will not preclude Elliott from reviving his complaints if and when the impugned investigation has given rise to actual charges.

10. Similar considerations apply to the claims for declaratory relief against the NCA.  It is well-established that the exercise of the jurisdiction to grant relief of that kind turns on a very wide discretion possessed by the Court but it is a discretion to pronounce “on the rights of the parties”;  Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 per Gibbs J, at 435, who went on, however, to observe, at 437;

    “It is neither possible nor desirable to fetter the broad discretion given by s 10 by laying down rules as to the manner of its exercise.  It does, however, seem to me that the Scottish rules summarized by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438, at p 448, should in general be satisfied before the discretion is exercised in favour of making a declaration:

    “The question must be a real and not a theoretical question;  the person raising it must have a real interest to raise it;  he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought.”

    Beyond that, however, little guidance can be given.  As Lord Radcliffe said in Ibeneweka v Egbuna [1964] 1 WLR, at p 225:

    “After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making.  Beyond that there is no legal restriction on the award of a declaration.”

    In the present case the question whether Jododex held a valid exploration licence was in no way hypothetical.”

11. However, as explained in [34] to [36] above, I consider that the question sought to be raised by the latest statement of claim is at present a theoretical or hypothetical, not a real, one.  It does not assert a present right in Elliott which the NCA is actually infringing or threatening to infringe;  c.p. University of New South Wales v Moorhouse (1975) 133 CLR 1, at 10. As I have already observed, the factual consequences for Elliott and the other applicants which prompted the institution of these proceedings are spent. In that respect, these observations of Mason J in Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180, at 188, can be paraphrased to apply with similar force to the present case;

    “... ... ... ... ... I would not have been disposed to grant declaratory relief to the appellants.  The rearrangements were no longer in operation when the appellants commenced their proceedings.  They had been superseded by the fourth rearrangement which had been set up under the auspices of amending legislation.  It was not contended that the appellants, had their argument been correctly founded, were entitled to damages or other consequential relief.  All that was suggested was that the Executive might in some undefined way initiate administrative or legislative action which would improve the lot of the appellants and persons in the appellants’ position.  It is one thing to say that declaratory relief will be granted against the Executive or a statutory authority in relation to existing rights and transactions.  It is quite another thing to say that it should be granted in respect of past transactions under legislation which has been repealed or amended when the Court’s declaration will produce no foreseeable consequences for the parties.”

12. Because of the absence of any allegation of practical consequences for Elliott which affect any identifiable right, this case cannot be assimilated to Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, where it was observed in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ, at 582;

    “The present case involves no mere hypothetical question.  At all stages there has been a controversy as to the Commission’s duty of fairness.  A report has been made and delivered under s 2.18 of the Act.  That report has already had practical consequences for the appellants’ reputations.  For all that is known, those consequences may extend well into the future.  It is appropriate that a declaration be made in terms indicating that the appellants were denied natural justice.  That may redress some of the harm done.”

13. As indicated at [37] above, the declarations sought in the present case are capable of impinging on Elliott’s rights only if certain events occur, which are at present merely hypothetical. In that sense, Elliott seeks “general declarations ‘in air’ ”, to use a phrase employed by Einfeld and Kenny JJ in Martin v Taylor [2000] FCA 1002, at [27]. In these circumstances, it would be contrary to principle, I consider, for the Court to grant the declarations even if Elliott were to succeed in establishing the factual and legal bases for invalidating the impugned Notices and Summonses.

14. For the reasons which I have endeavoured to explain, I have concluded that the latest statement of claim does not disclose a cause of action in the sense of identifying an entitlement to appropriate relief on the assumption that all of the factual allegations contained in it are true.  Accordingly, leave to substitute the latest statement of claim must be refused.  Moreover, I consider that a point has now been reached in this protracted saga of refinement and reformulation of the statement of claim, at which it can be concluded that the factual or legal obstacles in the way of disclosing one or other of the many causes of action which it has at different times attempted to articulate, are insuperable.  Accordingly, there should be no leave to file a yet further amended statement of claim and the application as against the NCA which, as I understand it, is the only remaining respondent other than Crabb, should be dismissed.

    The cause of action against Crabb

15. At [67] of the reasons of judgment of 26 May 2000 I concluded that pars 101 to 104 of the substituted statement of claim sufficiently imputed to the sixth respondent (“Crabb”) the actions and state of mind necessary to constitute the tort of misfeasance in a public office discussed in [101] and [102] of the reasons for judgment of 19 July 1999.  As noted in [7] of these reasons, the latest statement of claim reproduces in pars 77 to 82 the pleadings charging Crabb which had appeared as pars 101 to 105 of the substituted statement of claim. 

16. In the light of the ruling in the reasons for judgment of 26 May 2000, Mr Southall QC, who appeared with Mr McGarvie for Crabb, accepted that it was no longer open to him to contend that pars 77 to 82 of the latest statement of claim should be struck out as disclosing no cause of action against Crabb.  However, he went on to make a number of criticisms of the form of those paragraphs and the sufficiency of the particulars appended to them. 

17. The first of those criticisms was accommodated by a further amendment to par 78(b) of the latest statement of claim which deleted the reference to Crabb’s affidavit of 15 May 1999 which was conceded by Counsel for Elliott to be, in terms, inapt to furnish particulars of an allegation that Crabb had provided information to the ABC.  The proposed new particulars to par 78(b) of the latest statement of claim have been set out at [7] of these reasons but to make the matters at issue intelligible it is necessary to set out pars 78 and 81 as substantively pleaded;

    “78.     Prior to 20 February 1990 Crabb:

    (a)in his capacity as a member of the IGC received information of and concerning the business affairs of the Applicant (the Crabb Information) which he knew or ought reasonably to have known would, if disclosed to the public, discredit the applicant in his reputation, employment, public office and business and thereby cause him loss and damage.

    ... ... ...

    (b)disclosed the Crabb Information or part of it to the Australian Broadcasting Commission (ABC) in circumstances where he knew or ought reasonably to have known that the ABC would disclose that information or some part of it to the public.

    ... ... ...

    ... ...

    81.In the premises by disclosing the Crabb Information to the ABC, Crabb:

    (a)       was guilty of misfeasance in public office;

    (b)       committed an unlawful act;

    (c)       inflicted actual economic loss on the Applicant.”

18. In my view, the purported particulars appended to par 78(b) of the latest statement of claim are not particulars at all.  They are a reference to evidence which, if admissible, might be relied on as tending to prove a disclosure by Crabb to the ABC.  Mr Southall strongly disputed the suggestion that the Court can receive evidence of statements by a third party as constituting admissions by a defendant or respondent unless there is also proof of the express or ostensible authority of the third party to make the alleged admissions on behalf of the defendant or respondent.  Reference was made to Fraser Henleins Pty Ltd v Cody (1945) 70 CLR 100, where the authority of a managing director to make admissions on behalf of his company is discussed by Latham CJ at 112-113, by Starke J at 123, by Dixon J at 128-129 and by Williams J at 133-136.

1. It is not necessary for present purposes to resolve the question of whether a statement by the ABC or its solicitors is admissible as against Crabb to prove a disclosure or communication allegedly made by him.  Where the making of a communication is alleged against a party, he or she is entitled to be informed by sufficient particulars of the allegation which has to be met, not the evidence by which the other party proposes to prove that allegation.  Particulars of the communication will ordinarily indicate whether it was in writing, oral or by implication, with appropriate details of the time and place of its making and the persons between whom it passed.  The present reported particulars of par 78(b) of the latest statement of claim manifestly fail to appraise Crabb in that way of the case which he has to meet.

2. It was also pointed out that par 80(a) of the latest statement of claim is demonstrably incorrect in referring to par 23 of the statement of claim instead of to par 20, as par 23 of the substituted statement of claim became in the latest statement of claim. Mr Macaw undertook to make that formal amendment to cure the oversight. However, the need for such a formal amendment will be overtaken by the order foreshadowed at [44] above in relation to the proceedings against the NCA. I shall therefore give leave to Elliott to reformulate his statement of claim by confining it to the cause of action of misfeasance in a public office alleged against Crabb and by incorporating in the reformulated statement of claim paragraphs corresponding with pars 77 to 82, but omitting the sub-paragraph corresponding with par 81(b) of the latest statement of claim. That sub-paragraph, Mr Southall identified, correctly in my view, as otiose.

3. Counsel for Crabb joined with the other respondents in pressing for an order for his costs to be taxed on an indemnity basis.  They also sought an order that Crabb’s costs to date be paid forthwith after taxation.  Those issues are considered below.

   The claim for costs by the NCA, Seymour and Sherman

4. The proceedings by Elliott against the first and second respondents (“Seymour” and “Sherman”) were brought to an end by the filing on 21 July 2000 of notices of discontinuance in respect of those respondents.  That discontinuance occurred pursuant to O 22 r 2(1)(b) of the Rules of this Court and without the leave of the Court so that Elliott became liable to pay the costs of Seymour and Sherman pursuant to O 22 r 3(1) which provides;

   “A party who discontinues pursuant to paragraph 2(1)(a) or (b) shall be liable to pay the costs of the other party or parties occasioned by the whole or the relevant part of the proceeding.”

5. It was accepted by Mr Garratt QC, who appeared with Mr R Peters for Elliott when submissions were taken as to costs, that the effect of the rule just quoted is that Elliott is liable for Seymour’s and Sherman’s costs of the proceedings against them insofar as such costs have not been the subject of earlier, specific orders. Mr Garratt also appeared to accept that, whatever the outcome of the NCA’s attack on his pleadings, Elliott is liable to pay the costs incurred to date by the NCA in relation to the pleadings and in other interlocutory proceedings, again except to the extent that those costs have already been dealt with by earlier orders. In the light of the conclusion reached at [44] above that the proceedings against the NCA must be dismissed, I shall treat that acceptance as extending to the NCA’s costs to date of the whole proceeding against it.

6. Mr J W S Peters of Counsel for Seymour, Sherman and the NCA did not contradict the respects in which Elliott’s liability for costs had been accepted and did not invite the Court to revisit earlier, specific, orders as to costs which had been made in respect of particular aspects of the proceedings.  However, he pressed for an order that the costs to be awarded to those respondents for whom he appeared should be taxed on an indemnity basis or as between solicitor and client.

7. In Re Wilson;  Ex parte Venture Industries (No 2) (1996) 72 FCR 151, a Full Court of this Court considered the principles governing the choice between an award of costs as between party and party and an order that the costs be taxed on an indemnity basis. The joint judgment of Cooper and Merkel JJ was prefaced by this observation, at 156;

   “The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Company v. Cussons Pty. Ltd. (1993) 46 FCR 225.”

8. Their Honours then (ibid) distilled these principles from Colgate-Palmolive;

   “1.      Section 43 of the FCA confers an absolute and unfettered discretion on the Court to make orders as to costs but the discretion must be exercised judicially.

   2.In order to exercise the discretion judicially the following principles have been accepted by the Court as applicable:

   (a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;

   (b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;

   (c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.”

9. After examining s 43 of the Federal Court Act 1976 and the relevant provisions of O 62 of the Rules of this Court, their Honours concluded, at 158;

   “The rules apply unless otherwise ordered. The very fact and terms of the relevant Rules suggest to us that, unless the justice of the particular case requires or some special or unusual feature arises, the Rules should not be departed from by the making of some other order for costs in exercise of the jurisdiction conferred under s.43. The generality of the criteria for departing from the usual rule ensures that the discretion to depart from the rule can be exercised whenever the Court is of the view that after applying the criteria to the facts of the particular case, it is just to do so. Such an approach is consistent with the requirement that the discretion to award costs is to be exercised judicially.

   However, there are other reasons for continuing to apply the principles that have been generally applied in the Court.

   As was also pointed out by Sheppard J in Colgate-Palmolive, for the reasons discussed by him, the ordinary rule in favour of party and party costs, has been settled practice in the courts in England and Australia over a very long period of time. It is not readily apparent why that practice should be changed. It may well be that the scale rates, rather than the principles, require review.”

10. Applying those principles, the Court considered that the abuse of process which could be imputed to the prosecutor warranted a departure from the usual course in relation to costs and ordered that the second respondent, the Australian Competition and Consumer Commission, should recover its costs on an indemnity basis. 

11. Counsel for Seymour, Sherman and the NCA pointed to the fact that Elliott had taken advantage of the opportunity afforded by committal proceedings, a lengthy hearing on the voir dire before Vincent J and on the application for an interlocutory injunction in this Court to cross-examine Seymour and Sherman at length and to explore exhaustively the processes undertaken by the NCA and the archive of documentary material which they generated.  Despite that advantage, it was submitted, he had abandoned, or been unable to sustain, any of the multiplicity of causes of action against the first three respondents which he had attempted to formulate over an interval of years.  Accordingly, it was contended, the case could be characterised as one involving “the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions”, a consideration which Sheppard J noted in Colgate-Palmolive, at 233, had weighed with Davies J in favour of an order for indemnity costs in Ragata Development Pty Ltd v Westpac Banking Corporation (unreported, 5 March 1993). 

12. However, although the present case has been punctuated by long delays, some attributable to Elliott’s preoccupation with the lengthy criminal proceedings, it cannot be said that the making of contentions in support of the successive attempts to formulate a statement of claim unduly prolonged the case.  Much of the need to pick so painstakingly over the pleadings has been created by the detailed and thoroughly-researched attacks which the respondents (no doubt advisedly) have elected to make on them.  In the events which have happened, the allegations of fact on which Elliott sought to erect various causes of action have never been tested and, except in the sense that many of them have been ruled insufficient to found one or other of those causes of action, the Court cannot come to a positive conclusion that they ought never to have been made.  Nor can the contentions advanced on behalf of Elliott in support of successive versions of his statement of claim be characterised as “groundless.”.  The elaborate arguments marshalled against them and the time and space devoted to them in the reasons for judgment of 12 May 1995, 19 July 1999, 26 May 2000 and the present reasons are eloquent testimony to the novelty and the difficulty of the issues which those contentions have raised.

13. Nor have I been persuaded that Elliott’s apparent reluctance to furnish particulars of when and how he learned of the true nature of the Forex Transactions should expose him to a liability for costs on the higher basis.  It is also true that, at least arguably, he took a contradictory position in the course of proceedings in the Supreme Court and in his pleadings in this Court on the validity of the third set of Notices.  I am not unmindful of the fact that the NCA and its officers have had to confront a shifting set of allegations framed to make out causes of action like abuse of process, civil conspiracy and misfeasance in a public office which import serious departures from the highest standards of administrative propriety.  However, Mr J W S Peters was unable to point to any authority which identified the likely effect of the course of litigation on the feelings of particular public officers as a matter militating in favour of an award of indemnity costs.  In particular, I am unable to assimilate the allegations raised in these proceedings to an unfounded allegation of fraud which Mr Peters instanced as likely to justify an order for costs on the higher basis.

14. For these reasons and, where applicable, the further reasons outlined below in relation to the DPP’s claim for costs, I have concluded on balance that the circumstances attending the proceedings against Seymour, Sherman and the NCA are not such as to warrant an order that their costs be taxed on an indemnity basis.

    The claim for costs by the DPP

15. As with the proceedings against Seymour and Sherman, Elliott discontinued his proceedings against the fourth respondent (“the DPP”) by notice filed on 21 July 2000.  Scanlon, the sole remaining applicant in VG434 of 1993, similarly discontinued that proceeding against the DPP by notice filed on 24 July 2000.  Mr Garratt for Elliott conceded that the DPP is entitled, in the same way as Seymour and Sherman, to his costs in consequence of that discontinuance.  However, Mr Di Lallo for the DPP pressed for an order for those costs payable by both Elliott and Scanlon to be taxed on an indemnity basis and urged that taxation on that basis should be extended to past orders for costs in favour of the DPP and even that orders denying costs to any party of particular parts of the proceedings or awarding costs against the DPP should be varied to provide that those costs now be taxed on an indemnity basis and paid to the DPP. 

16. Mr Di Lallo, like Mr J W S Peters, pointed to the conduct of Elliott and Scanlon as deserving of special orders for indemnity costs.  He referred to Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, where Woodward J observed, at 400 to 401;

    “That discretion is ‘absolute and unfettered’, but must be exercised judicially (Trade Practices Commission v Nicholas Enterprises (1979) 28 ALR 201 at 207). Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases where ‘there is some special or unusual feature in the case to justify the court exercising its discretion in that way’ (Preston v Preston [1982] 1 All ER 41 at 58). It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court’s discretion - for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties: see Andrews v Barnes (1888) 39 Ch D 133; Forester v Read (1870) 6 LR Ch App 40; Christie v Christie (1873) 8 LR Ch App 499; Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354.

    “Another case cited in argument was Australian Guarantee Corp Ltd v De Jager [1984] VR 483 where (at 502) Tadgell J allowed solicitor and client costs because he found the pursuit of the action to have been ‘a high-handed presumption’.”

    No doubt the expression “high-handed presumption” was appropriate in the case Tadgell J had to decide, and he needed to go no further;  but in order to establish a convenient principle in such cases it is necessary to be a little more prosaic.  I believe that it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success.  In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.  Such cases are, fortunately, rare.  But when they occur, the court will need to consider how it should exercise its unfettered discretion.

    I regard the present as a borderline case.  However, I believe justice will be done if I order the applicant to pay the second respondent’s costs incurred up to the end of January 1986 on a party and party basis, and those incurred later on a solicitor and client basis.  For the precise form of the order I propose to adopt the words used by Holland J in Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 at 359-60. I believe that wording provides greater certainty than any reference to "“solicitor and client” costs.”

17. For reasons which can be inferred from the discussion above of the claim for costs by Seymour, Sherman and the NCA, I am not able to conclude that either Elliott or Scanlon, properly advised, should have known that he had no chance of success.  The applicants have been represented throughout these proceedings by responsible and experienced Senior Counsel and I consider it inconceivable that, so advised, they have persevered in the claims which they attempted to make knowing them to be hopeless.  I derive no assistance from White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169, to which I was referred in this context by Mr Di Lallo because that was an extraordinary case in which the successful respondent became apprised of the substance of the advice which had been given by Senior Counsel to the unsuccessful applicant. Moreover, at [79] of the reasons for judgment of 19 July 1999, I rejected what I called “effectively, an invitation to enter summary judgment for the respondents” on the ground that the proceedings were “foredoomed to failure.” Similarly, I am unable to impute some ulterior motive to the applicants having, in the same reasons for judgment of 19 July 1999, rejected a contention that the proceeding should be struck out because of an available inference that they were being prosecuted in bad faith. I there said, at [82];

    “However, I am not persuaded to impute those ulterior purposes to him on the basis of any such inference.  If the statement of claim wholly fails to disclose a cause of action it will be struck out for that reason alone without any exploration of the applicant’s motives in pursuing the proceedings.  Mere lack of particularity or confusion, on the other hand, can be cured by appropriate leave to make further amendments subject to the usual protection of the respondents in respect of costs.  I fail to see how the continued prosecution of an action to a judgment in favour of the respondents with costs could be regarded by Elliott as contributing to the object attributed to him of bringing about the “disbanding” of the NCA.”

18. I was also referred by Mr Di Lallo to Davids Holdings Pty Ltd v Coles Myer Ltd (1995) ATPR 41-383 and Sammy Russo Supplies Pty Ltd v Australian Safeway Stores Pty Ltd (1998) ATPR 41-641, where some stress was laid on the fact that an applicant had proceeded after being put on notice by the other party that it considered the proceedings to be misconceived or that there were matters in the common knowledge of both parties which precluded the applicant from propounding an effective statement of claim. It is obvious that Elliott and Scanlon were put on notice early in these proceedings that the respondents would not allow them to proceed to trial without castigating every attempt made by their pleadings to disclose a cause of action. However, those criticisms were not uniformly compelling or successful and I am unable to conclude that, at any time before they discontinued against the DPP, Elliott and Scanlon accepted, or had proper advice, that they had no justification for proceeding.

19. Like Mr J W S Peters, Mr Di Lallo pointed to the serious nature of the allegations sought to be made against the DPP and the effect which they can be presumed to have had on the maintenance of confidence in that agency’s discharge of its functions central to the administration of justice in Victoria.  However, essentially for the reasons explained in [61] above, I do not regard those considerations as tipping the balance in favour of an award of indemnity costs.  Nor, for the reasons indicated in [60] above in relation to the NCA’s claim for indemnity costs, have I been able to attribute an effect conclusive of that issue to the matters of delay and prolongation of the proceedings to which Mr Di Lallo also pointed.  Counsel for both the DPP and the NCA relied, as a fact attending in favour of indemnity costs, on the fact that the DPP and the NCA had incurred substantial costs over the long life of these proceedings which Mr Di Lallo contended have been “wasted”.  In his written submissions, Mr Peters put it that “an order for party/party costs will not compensate [the NCA] in respect of the costs of the proceedings to date.”  That is self-obviously true of party and party costs in every proceeding of any substance, yet it has not resulted in the adoption of a principle that indemnity costs should be awarded as a general rule.  The difference between costs which would have been recovered on an indemnity basis and those actually recovered will always be “wasted” by the successful party but that has not been recognised by the authorities as a factor which should be allowed an operative effect on the exercise of this discretion.  Rather, the concentration has been, as Sheppard J put it in Colgate-Palmolive, at 233, on whether there has been “some special or unusual feature in the case to justify the Court in departing from the ordinary practice.”

1. Counsel for the DPP pointed to the covering letter under which Elliott’s solicitors forwarded a copy of their notice of discontinuance against that respondent.  The letter recited;

   “In the absence of discovery from the DPP our client is unable to further particularise his claim against the DPP.  Having regard to the reasons for judgment published by Ryan J on 26 May 2000, and in the absence of discovery, our client has no choice but to discontinue those claims.”

2. It was argued that the assertion that Elliott has been inhibited in formulating a viable statement of claim by the absence of discovery is disingenuous because there had been ample opportunity (which was taken) during the proceedings described in [59] above, to obtain all relevant documents and information in the possession of the DPP and the NCA.

3. However, an applicant who discontinues proceedings is under no obligation to explain that action.  The reasons which may be inferred as actuating such discontinuance are many and varied.  It may be attributable to changed perception of the prospects of success, stringency of financial resources, a need to direct energies and resources elsewhere or one or more of those considerations in combination with others.  I am not prepared to impute to Elliott bad faith in the institution or continuation of the proceedings merely because his solicitors gratuitously furnished an excuse for the discontinuance which may not have fully or convincingly explained that action.

4. It will be apparent from my analysis of the considerations canvassed above in relation to the NCA’s claim for costs on an indemnity basis and the similar and partly overlapping contentions urged on behalf of the DPP that I have not been persuaded to accede to those arguments.  Accordingly, it is unnecessary to consider the submissions advanced on behalf of the DPP in respect of previous orders whereby costs have been reserved or which have been silent on the question of costs.  I except from that observation the DPP’s costs in proceedings numbered VG434 of 1993 in which, on 24 March 1994, I decided that there should be no order as to costs for or against the applicant Scanlon.  That was expressly or by necessary implication done on the understanding that Elliott, as the applicant in VG411 of 1993 should pay the whole of the respondents’ costs of that day.  Counsel for Elliott and Scanlon accept that the filing of the notices of discontinuance attract a liability on their part to pay the respondents’ costs, other than those subject to previous express orders, such costs to be taxed as between party and party.

5. It therefore remains to consider the contention advanced on behalf of the DPP that the Court should revisit and reverse those orders which require the DPP to pay the applicants’ costs of particular aspects of the proceedings.  The only order of that kind was made in both VG411 and VG434 of 1993 on 12 May 1995 on motions by the first to third respondents and the DPP seeking the dismissal of the proceedings primarily on jurisdictional grounds.  The respondents essentially failed to make those grounds good and I see no reason to vary the orders as to costs which were then made.  I would reach that conclusion even if, as Counsel for the DPP contended, contrary to my view, those orders as to costs were interlocutory in nature within the meaning of O 35 r 7(2) of the Rules of this Court.  However, I regard the orders as to costs of 12 May 1995 as final because, unlike those considered by a Full Court of this Court in Merit Protection Commission v Nonnenmacher (1999) 86 FCR 112, at 118, they expressly directed that the costs be taxed and paid by the relevant respondents. (It is implied by such an order, in the absence of a provision to the contrary, that the costs be taxed as between party and party.)

   Crabb’s claim for costs

6. Counsel for Crabb also sought an order that his costs be taxed on an indemnity basis for reasons substantially the same as those urged on behalf of the first four respondents.  Since I have concluded that the allegations against him disclose a cause of action and should be allowed to proceed, subject to the furnishing of proper particulars of the alleged disclosure to the ABC, it follows a fortiori that his claim for indemnity costs must be denied. 

7. However, there is much force in the contention that the costs which Crabb has incurred and which have been thrown away as a result of Elliott’s successive attempts to amend the statement of claim (which, as I perceive, comprise all, or almost all, of his costs to date which have not been the subject of earlier, specific orders) should be taxed and paid forthwith.  That course receives support from the judgment of a Full Court of this Court in Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited (unreported, 17 August 1995) where it was observed, at p 2;

   “The proceeding has been set down for hearing commencing on 18 March 1996 and unless settled may subsist for a substantial time.  The litigation is complex.  It is unlikely that final judgment will be given until late 1996 or even later.  The successful parties to the appeals before this Court will therefore, in the ordinary course of events, not recover their costs for a long time.

   It would be wrong if the successful parties do not enjoy the fruits of their order for costs for such a long time.  The parties entitled to the benefit of the order for costs which this Court has made in appeals from interlocutory orders should not be deprived of that benefit until the case has been finally disposed of.

   In all the circumstances in our opinion the order for costs made by this Court on 11 July 1995 should be made on the basis that the costs are taxed and paid forthwith notwithstanding that the principal proceeding has not concluded.”

8. See also Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297, at 312, per Olney J, and Compaq Computer Australia Pty Limited v Merry (unreported, 3 June 1996) where the same learned Judge observed, at 3;

   “It is entirely unsatisfactory that an applicant should occupy something like 20 months to get its statement of claim in order.  It is clear that the applicant’s case had not been properly researched before proceedings were instituted and that all available means of evidence gathering had not been availed of in anticipation of the proceeding.  It is true that not all of the delay can be held against the applicant but it is equally true that little, if any, can be held against the respondents.  I do not think that it is ever a fruitful exercise to try to apportion responsibility when proceedings founder but it is appropriate in a case such as this to observe that the respondents have been involved in this proceeding from the outset, that the proceeding has a long way to go before it can come to trial and that the respondents along the way have had to foot the bill for various interlocutory proceedings for which the Court has from time to time considered they are entitled to recover their costs.

   In this case, the time which has been occupied thus far in the proceeding, the further time which is likely to be involved before the matter is resolved and the multiplicity of costs orders made in favour of the respondents are factors which indicate to me that justice demands that the general rule which is evidenced by O 62 r 3(3) should be departed from and that the respondents be entitled to tax and be paid all costs awarded in their favour in interlocutory proceedings already determined.”

9. Those observations apply with even more force to Crabb’s costs to date of Elliott’s claim against him and I shall, accordingly, order that those costs be paid within twenty-one days of taxation as a further condition of Elliott’s leave to amend his statement of claim confining it to the action against Crabb for misfeasance in a public office.

   Conclusion

10. The form of the orders which I propose by way of determining the various issues raised by the motions currently before the Court has been sufficiently indicated and explained by those parts of the foregoing reasons which are related to those several issues.  It is intended that the orders to be made today should completely determine each of the proceedings except for that part of VG411 of 1993 which concerns Elliott’s remaining claim against Crabb.  However, against the possibility that something has been overlooked or the orders are in some way deficient in reflecting that intention, I shall reserve liberty to apply in each matter.

I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated:             7 December 2001

Counsel for the Applicant in VG411 of 1993:	Mr R C Macaw QC (on 8 December 2000) and Mr R Garratt QC (on 22 February 2001) with Mr R Peters
Solicitor for the Applicant in VG411 of 1993:	Tress Cocks & Maddox
Counsel for the Applicants in VG434 of 1993:	Mr R Peters
Solicitor for the Applicants in VG434 of 1993:	Arnold Bloch Leibler
Counsel for the First, Second and Third Respondents in VG411 of 1993:	Mrs S Crennan QC with Mr J W S Peters (on 8 December 2000) and Mr J W S Peters (on 22 February 2001)
Solicitor for the First, Second and Third Respondents in VG411 of 1993:	Australian Government Solicitor
Counsel for the Fourth Respondent in VG411 of 1993 and VG434 of 1993:	Mr T Di Lallo
Solicitors for the Fourth Respondent in VG411 of 1993 and VG434 of 1993:	Mr Peter Wood, Office of Public Prosecutions for the State of Victoria
There was no appearance by the Fifth Respondent in VG411 of 1993.
Counsel for the Sixth Respondent in VG411 of 1993:	Mr A G Southall QC with Mr R W McGarvie
Solicitors for the Sixth Respondent in VG411 of 1993:	Maurice Blackburn Cashman
Dates of Hearing:	8 December 2000 and 22 February 2001
Date of Judgment:	7 December 2001