Frugtniet v Australian Securities & Investments Commission

[2018] HCATrans 155

[2018] HCATrans 155

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M163 of 2017

B e t w e e n -

RUDY FRUGTNIET

Applicant

and

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION

Respondent

Application for special leave to appeal

GAGELER J
NETTLE J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 17 AUGUST 2018, AT 10.08 AM

Copyright in the High Court of Australia

MR M.H. O’BRYAN, QC:   If the Court pleases, I appear with MR J.P. WHEELAHAN for the applicant.  (instructed by the applicant)

MR S.B. LLOYD, SC:   I appear with MR R.C. KNOWLES for the respondent.  (instructed by the Australian Securities and Investments Commission)

GAGELER J:   Thank you.  Mr Lloyd, what do you say about Justice Basten’s judgment?

MR LLOYD: What we say, your Honour, is that I do not need to say as to whether or not it is right or wrong. That would probably only make the issue more attractive for a grant than less attractive, but let us say his Honour looked at a situation where there was legislation within the same polity and said, having regard to the way that jurisdiction or function is conferred onto the Tribunal in that polity, that meant that section 16 of the Criminal Records Act should be construed so that the reference to “tribunal” should not include a reference to a review tribunal.  His Honour got to that position by saying that excluding the review tribunal would be anomalous or counterintuitive.

In this case, applying the same reasoning or the same analysis would itself lead to anomalies.  That is the first point and I will make that good.  The second point is that there is a significant difference between the way the Criminal Records Act (NSW) works and the Crimes Act (Cth).

The Criminal Records Act (NSW) operates on legislation to, in effect, change the meaning of other State legislation, whereas the Crimes Act creates obligations to particular people and those obligations – and this is perhaps the most important point – apply not only to, for example, the AAT or other Commonwealth bodies but also to all State and Territory bodies through the prism of section 109.

So if I can make the point, first of all in relation to section 43, which is set out in the book at 239, although the metaphor is often used that this places the Tribunal in the shoes of the decision‑maker, we say that while that might be a useful metaphor in some circumstances, what it actually does is it confers power on the Tribunal.  The Tribunal does not change its nature.  Any laws and other statutes that are directed to the Tribunal apply to the Tribunal as the Tribunal.

GAGELER J:   But a relevant consideration before the primary decision‑maker is a relevant consideration before the Tribunal and an irrelevant consideration before the primary decision‑maker is an irrelevant consideration before the Tribunal.

MR LLOYD:   I accept that entirely.  We do not step away from that.  So to know what is an irrelevant consideration is determined by what the legislation says.  What the legislation says in this case is in section 80.  If one goes to section 80 on page 231, the power is in subsection (1) and then in terms of mandatory relevant considerations they are identified in subsection (2) and they are said to be:

subject to Part VIIC of the Crimes Act - 

That does not say “subject to Division 3 of Part VIIC”.  It identifies the entirety of Part VIIC.  So we accept that when the Tribunal exercises the power or considers a review of a decision made in relation to section 80, of course it has to have regard to the same considerations subject to the constraints as expressed in that legislation and the constraint is subject to Part VIIC of the Crimes Act.

GAGELER J:   Which includes section 85ZW(b)(ii).

MR LLOYD:   Indeed, and it also includes section 85ZZH.

EDELMAN J:   So it all comes down to 85ZZH(c), the construction of that.

MR LLOYD:   Not all, but perhaps primarily.  Can I go then to the relevant parts of the Crimes Act.  If I can start on page 202 and note that there is a definition there of “Commonwealth authority”, that definition in paragraph (c) includes “tribunal” and in paragraph (g) includes “federal court”.  There is a definition of “Commonwealth offence” on the next page.  Over the next page is a definition “foreign offence”.  There is also a definition of “law enforcement agency” and “law enforcement agency” includes both federal agencies and State agencies.  One sees that, for example, just by looking at paragraphs (a) and (b).  There is a definition of “State authority” on the next page, which includes in paragraph (c):

a body . . . or a tribunal -

and also in paragraph (g):

a State court.

There is then, in effect, a definition of a spent offence in 85ZM(2).  There “offence” is used in generality.  So it is defining for the purposes of this part what is an offence having regard to foreign offences, State offences and Commonwealth offences and whether they will be treated as spent for the purposes of this part.

Section 85ZQ, although it might otherwise have been apparent, there is an express indication that it binds the Crown, which is important when one sees how the legislation works.  Going then to 85ZV, there are three operative provisions here.  Subsection (1) applies in relation to Commonwealth offences and one sees, first of all, that it is:

Subject to Division 6, but despite any other Commonwealth law or any State law or Territory law -

So, it overrides Commonwealth, State or Territory law and then the obligation applies relevantly under (b) to both Commonwealth authorities and State authorities and under (a) to any person.  In relation to (2), they are all subject to Division 6.  Subsection (2) only applies in relation to State offences and foreign offences.  It applies to any person in a Territory, but, say, in a State it only applies to a Commonwealth authority.  So there is a careful analysis as to who or what bodies and authorities these requirements apply to.

In relation to subsection (3), there is a recognition that the States might have their own legislation which is similar, which might make something spent under the State law which is not spent under Commonwealth law and it then picks that up for the purposes of the provision, but again only applying to Commonwealth authorities or any person in a Territory.

Then one goes to section 85ZW. It then overrides Commonwealth law, State or Territory law. So it is clearly engaging section 109 of the Constitution to prevail, but we say subject to Division 6 will mean it will not prevail over, say, relevantly, review tribunals of a State because there will not be any inconsistency in that regard because it will not engage there.

Then under 85ZW(a) there is, in effect, a creation of a positive right to say something which you would not otherwise be able to say.  So you could say on oath that you did not have any convictions.  Then under (b)(ii), anyone else who knows, in effect, that one of the circumstances in 85ZV applies, then in those circumstances – so 85ZV has to have applied – and for that purpose some of those provisions are purposive, then any person who knows it shall not take account of the matter.

So all of that applies; that is the obligation.  Then to see how that bites, one goes to – if I stop there and say from the Commonwealth perspective we say that all of this was in place at the time the Credit Act came along and said, “We are going to make the obligation to have regard to all of these matters subject to all of this part.”  So it knew there would be an obligation but knew that there was an exception.  The relevant exception is in 85ZZH.

Now, unlike the way the Criminal Records Act works and again bearing in mind that this part applies sometimes, through the mediation of section 109, care is taken to identify first of all a decision‑making entity and then also a purpose. So under 85ZZH(c):

a court or tribunal established under a Commonwealth law, a State law or a Territory law, for the purpose of making a decision, including a decision in relation to sentencing -

That would, we would say, exclude, for example, employment decisions made by a court or a tribunal but would capture their principal functions of exercising their jurisdiction.

GAGELER J:   Mr Lloyd, if we go back to ASIC’s power under section 80 for a moment, you accept that ASIC’s power is bounded by section 85ZW(b)(ii).

MR LLOYD:  That is right.

GAGELER J:   So it would be an irrelevant consideration for ASIC, in making the primary decision, to take into account a spent conviction.

MR LLOYD:   Your Honour puts it that way.  I would put it as anything the Tribunal thinks is relevant is a mandatory relevant consideration but it cannot do that if that would infringe the contrary obligations in Part VIIC.

GAGELER J:   I am talking about ASIC exercising the power, if you like, at first instance.

MR LLOYD:   I accept that.  What I am saying is that the way it works is that, under section 80(2), it creates a duty to have regard to any other matter ASIC considers relevant.  That might be an entitlement rather than a duty, but putting that aside it at least presumptively allows that.  But that entitlement or duty to have regard to anything which could, at face value, include spent convictions is then subject to Part VIIC, so it is subject to the operation of Part VIIC.  So if to have regard to material or statement or information would be in breach of Part VIIC, then ASIC can have regard to that.  I accept that.

EDELMAN J:   In effect, your submission is that the spent convictions fall into the same category of case as new or fresh information that is put before a tribunal.

MR LLOYD:   I would embrace that to an extent.  Certainly the decision of this Court in Shi stands for the proposition that a review tribunal can always look at material that was not before the decision‑maker but I am not just saying that; I am saying that when Parliament came to make section 80, it knew what the Crimes Act said.  It knew that tribunals were exempt from this provision and, by wording it in this way, knowing that the Tribunal would do over again what ASIC had done, it also would be subject to Part VIIC but Part VIIC would operate differently to it.

GAGELER J:   What coherent policy reason could lie behind that structure?

MR LLOYD:   Well, because the Parliament is making a law here which applies to a whole array of tribunals, including tribunals which it does not control, being State and Territory tribunals, and which it does not know if there is an equivalent to section 43.  Some of them might be review tribunals which do not have a standing on the Shi type thing.  Some might be review tribunals that look for some form of error.  It applies equally to all of them and the policy intention is the one we would embrace from Kocic from the reasons of Justice White, which is that ‑ ‑ ‑

GAGELER J:   The dissent in Kocic.

MR LLOYD:   The dissent, indeed.  As your Honour says:  what is the coherent policy reason?  That is a coherent policy reason, also recognised by Justice Basten.  Can I go to section 85ZZH(c).  If the answer is Justice Basten’s answer, then one has to read that as saying something like, “a tribunal, for the purpose of making a decision other than a decision on merits review” – that would be the equivalent of his Honour’s construction.

If that is what it meant, then one goes to the fact that some of the things that tribunals do on merits review are themselves not subject to Part VIIC.  The clearest one would be under 85ZZH.  So the Minister, undertaking a decision to cancel a visa on character grounds, makes a decision under the Migration Act ‑ that is, the Minister can have regard to spent convictions.

Now, when there is a review of that, that can go to the AAT.  The AAT is not making a decision under the Migration Act.  The decision of Justice French in Powell, which is referred to in our submissions – and, indeed, countless other cases ‑ indicates that the AAT is making decisions under section 43 of the AAT Act and not under the Migration Act.

Then if one goes to (c) and if (c) is read as “except for a review tribunal”, that would mean the Minister could have regard to the spent convictions but then the Tribunal could not have regard to the convictions and that would be an anomaly which did not arise in Kocic but does arrive

on this legislation.  It creates an anomaly whereby the primary decision‑maker can look at different materials from the review body.

That is so unless one reads words into (c) which say something like, “a court or tribunal established under the tribunal, for the purpose of making a decision, not being a review decision unless, when you are making the review decision, the primary decision‑maker can also have regard to this information”. We say they are a lot of words to imply into a provision which operates on all kinds of tribunals and all kinds of courts throughout Australia through the prism of section 109.

It is not clear on its face, so any State or Territory court or State or Territory polity that made legislation would think, looking at this, “Our tribunals are entitled to look at that material, or at least the Commonwealth legislation does not prevent that”.  We say that these considerations are considerations which did not arise in Kocic and therefore it makes that different.

EDELMAN J:   It makes the point a much larger one, too, does it not?

MR LLOYD:   I suppose in a sense that it has broader ramifications but we say that what drove his Honour was the idea that it was anomalous but we say at least his Honour’s solution creates anomalies.  It creates the migration anomalies but it also creates anomalies in relation to 85ZZH, to the extent that decisions in relation to employees of police forces and the like can be merits reviewed within those bodies at State levels.

If you are a State merits review body, you would look at that and say that the police commissioner can have regard to spent convictions.  If 85ZZC means “excludes review tribunals”, then they would be out.  So we say there are not sufficient prospects of success for the grant of special leave.

GAGELER J:   Thank you.  There will be a grant of special leave to appeal in this matter. 

AT 10.27 AM THE MATTER WAS ADJOURNED