Goodall v Ronald
[2005] VSC 374
•20 September 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 7636 of 2005
IN THE MATTER OF s 223C(3) of the Local Government Act 1989
| KELVIN JOHN GOODALL | Plaintiff |
| v | |
| WILLIAM BRUCE RONALD | Defendant |
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JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 5 SEPTEMBER 2005 | |
DATE OF JUDGMENT: | 20 SEPTEMBER 2005 | |
CASE MAY BE CITED AS: | GOODALL v RONALD | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 374 | |
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Power of inspector of municipal administration – Meaning of Local Government Act 1989 s.223B – Power to investigate and examine - Any matter concerning a council's operations.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R.R.S. Tracey QC with Dr M.J. Collins | Minter Ellison |
| For the Defendant | Mr P.G. Nash QC with Dr R.J. Sadler | Kellehers Australia |
HIS HONOUR:
The plaintiff in this matter is an inspector of municipal administration appointed pursuant to the terms of the Local Government Act 1989 ('the Act').
By originating motion he seeks:
An order pursuant to s.223C3(a) of the Local Government Act 1989 that the defendant appear before Kelvin John Goodall, inspector of municipal administration, for examination on oath and to answer questions at the offices of the Department for Victorian Communities, Level 15, 1 Spring Street, Melbourne, Victoria, at a time and date to be fixed by the Court.
The statutory framework pursuant to which this order is sought is as follows. Section 223A provides for the appointment of inspectors of municipal administration.
"(1)The Minister may appoint any person who has, in the opinion of the Minister, appropriate skills or knowledge to be an inspector of municipal administration.
(2) The Minister –
(a)may make an appointment either generally or specifically; and
(b)may impose conditions on an appointment."
Section 223B grants such inspectors power in the following terms:
"(1)An inspector of municipal administration may examine or investigate –
(a)any matter relating to a Council’s operations or to Council elections or electoral matters; and
(b)any possible breaches of this Act.
(2)An inspector may, by notice in writing, require a person to –
(a)produce any document (whether or not specifically identified in the notice) in the person’s custody or control that relates to any matter that the inspector may examine or investigate; and[1]
[1]cf ss.14 and 17 Evidence Act 1958
(b)give all reasonable assistance in connection with an examination or investigation; and
(c)appear before the inspector for examination on oath and to answer questions.[2]
(3)An inspector may administer an oath.
(4)An inspector may take possession of any document produced under sub-section (1) for so long as she or he considers necessary.
(5)However, while an inspector retains possession of such a document, she or he must permit any person who would be entitled to inspect the document if it were not in the inspector’s possession to inspect the document at any reasonable time.
(6)A person appearing before an inspector is entitled to be represented by another person."
[2]cf ss.15 and 18 Evidence Act 1958
Section 223C provides for sanctions with respect to the powers of an inspector of municipal administration.
"(1)A person must not –
(a)refuse or fail to comply with a requirement of an inspector of municipal administration to the extent to which that person is able to comply; or
(b)give information which he or she knows is false or misleading to an inspector of municipal administration; or
(c)when appearing before an inspector of municipal administration –
(i)refuse to take an oath or affirmation; or
(ii)make a false or misleading statement.
Penalty:100 penalty units or imprisonment for 2 years.[3]
(2)If a person fails to comply with a requirement made by an inspector of municipal administration and does not prove that he or she had a lawful excuse for the failure, the inspector of municipal administration may certify the failure in writing to the Supreme Court.[4]
(3)The Supreme Court may inquire into the failure and may -
(a)make an order requiring the person to comply with the requirement made by the inspector of municipal administration within the period fixed by the Supreme Court; or[5]
(b)instead of or in addition to an order under paragraph (a), if the Supreme Court is satisfied that the person failed without lawful excuse to comply with the requirement of the inspector of municipal administration punish the person as if he or she had been guilty of contempt of court.
[3]cf ss.16 and 19 Evidence Act 1958
[4]cf s.20(1) Evidence Act 1958
[5]cf s.20(2) Evidence Act 1958
The present application seeks to invoke the power contained in s.223C(3)(a).
The defendant opposes the orders sought on two bases:
(a)it is contended the plaintiff is seeking to investigate matters beyond his powers; and
(b)it is contended the relief sought in the originating motion is in any event too wide.
The History of the Matter
By affidavit sworn on 10 August 2005, the plaintiff deposes that he was appointed an inspector of municipal administration by the Minister for Local Government for the years 2004 and 2005 respectively.
In August 2004, he was informed that the defendant, who is a councillor of Cardinia Shire Council, may have breached:
(a)Sections 77A, 77B, 78, 79 and 81 of the Act in relation to an alleged failure to declare a pecuniary and/or conflict of interest as:
(i)beneficiary in the estate of Mr Peter Jason Bruce Ronald; and
(ii)owner of the property located on the McGregor Road in Pakenham
in relation to Council proposals for construction of a road, drainage and other works;
(b)Section 77 of the Act by allegedly having disclosed confidential information in relation to such works.
After preliminary investigations the plaintiff wrote to the defendant in February 2005 requesting the provision of specified documents.
The plaintiff did not respond and by letter of 29 March 2005, the plaintiff again wrote to the defendant and required him to produce the documents, give all reasonable assistance in connection with the investigation, and appear before the plaintiff for examination on oath, and to answer questions in relation to the investigation on 7 April 2004.
A series of communications then took place between solicitors for the defendant and the plaintiff. As a result, the time for the proposed examination was extended.
On or about 13 April 2005, the plaintiff received from the defendant the documents he had previously requested.
After examining the documents, the plaintiff again requested the defendant by letter of 6 June 2005 to appear before the plaintiff for examination on oath.
On 9 June 2005, the defendant’s solicitor responded by requesting further and better particulars of the plaintiff’s investigation.
On 16 June 2005 the plaintiff provided particulars in the following terms:
"2.Without limiting the scope of my investigation the specific allegations about which I will be seeking Cr Ronald's response at the above interview are as follows:
a.On 16 June 2004 Cr Ronald released information confidential to the Council to Mr Mark Cockburn in relation to a tender for the construction of road and drainage works in Henry Road Pakenham, thereby breaching section 77 of the Act as in force at that time and prior to amendments to the Act which came into operation on 31 July 2004.
b.On 21 June 2004 at the ordinary meeting of the Cardinia Shire Council Cr Ronald failed to declare a pecuniary interest in and voted on a motion before the Council in relation to the construction of part of Henry Road Pakenham thereby breaching sections 78 and 79 of the Act as in force at that time and prior to amendments to the Act which came into operation on 31 July 2004.
c.Cr Ronald failed to accurately disclose his beneficial interests in relation to the estate of PB Ronald, the contract of sale in relation to land forming part of that estate and open space arrangements in his ordinary returns in 2002, 2003 and 2004 thereby breaching section 81 of the Act as in force prior to amendments to the Act coming into operation on 31 July 2004.
d.Cr Ronald failed to accurately disclose gifts received from Mr Andrew Facey and/or Krastoy Pty Ltd in his ordinary returns in 2002, 2003 and 2004 in excess of $2,000 and in 2005 in excess of $500 thereby breaching section 81 of the Act as in force at that time and prior to amendments to the Act which came into operation on 31 July 2004 and as amended as of 31 July 2004 respectively.
e.On 16 August 2004 at the ordinary meeting of the Cardinia Shire Council Cr Ronald failed to declare an interest and/or conflict of interest in a motion before the Council in relation to the Council's consideration of urban design guidelines for Pakenham which included specific works in Henry and McGregor Roads Pakenham thereby breaching sections 77A, 77B, 78 and/or 79 of the Act as amended.
f.On 20 September 2004 at the ordinary meeting of the Cardinia Shire Council Cr Ronald failed to declare an interest in a motion before the Council in relation to the development of a skate park at the PB Ronald Reserve notwithstanding that his wife is an executive member of Learning and Living Inc which had expressed an interest in the matter thereby breaching sections 77A and 77B of the Act as amended.
g.On 20 September 2004 at the ordinary meeting of the Cardinia Shire Council, Cr Ronald failed to declare an interest and/or conflict of interest in a motion before the Council in relation to an agreement between the Council and VicRoads for the provision of access ramps associated with McGregor Road Pakenham in connection with Pakenham By-pass thereby breaching sections 77A, 77B, 78 and/or 79 of the Act as amended.
h.On 20 September at the ordinary meeting of the Cardinia Shire Council Cr Ronald failed to declare an interest and/or conflict of interest in a motion before the Council in relation to the Council's proposal to purchase 335 McGregor Road Pakenham and having previously declared an interest in matters relating to Greenhills business park thereby breaching sections 77A, 77B, 78 and/or 79 of the Act as amended.
i.On 15 November 2004 at the ordinary meeting of the Cardinia Shire Council, Cr Ronald failed to declare an interest and/or conflict of interest in a motion before the Council in relation to the Council's consideration of a planning application of the construction of 7 commercial premises at 95 Main Street Pakenham being the owner of a commercial development in McGregor Road Pakenham thereby breaching sections 77A, 77B, 78 and/or 79 of the Act as amended.
j.On 15 November 2004 at the ordinary meeting of the Cardinia Shire Council Cr Ronald having declared a conflict of interest in the Council's consideration of a report into contamination of Toomuc Creek Pakenham voted on the matter thereby breaching section 79 of the Act as amended.
3.The relevant Minutes of the Council meetings open to the public are available on the Council's website under 'Council and Committee Meetings' and Cr Ronald has been provided with copies of the Agendas and Minutes of meetings including in camera sessions by the Council.
4.The basis of the alleged breaches are Cr Ronald's interests in a terms contract of sale with Krastoy Pty Ltd and/or its parent company Parklea Pty Ltd and in relation to the estate of PB Ronald and himself in so far as they relate to any possible interest in the following properties:
· LI PS441732V McGregor Road Pakenham;
· LBB PS512303C Henry Road Pakenham;
· LJ PS512301G & LZ PS512301G Henry Road Pakenham;
· L316 PS512301G 14 Murray Ave Pakenham;
· L322 PS512301G Henry Lawson Drive Pakenham;
· L309 PS512301G 1 Murray Ave Pakenham;
· L310 PS512301G 2 Murray Ave Pakenham; and
· L321 PS512301G 36 Henry Lawson Drive Pakenham."
The proposed examination was adjourned to 18 July 2005.
Further information was exchanged between the parties and on 22 June 2005 the plaintiff provided further particulars of the matters itemised in his letter of 16 June 2005 which I have quoted above.
"3.In relation to the specific information you sought in your letter of 21 June 2005 I further advise as follows:
Para (a)The confidential information allegedly released by Cr Ronald is that he advised Mr Mark Cockburn on 16 June 20044 that he was not the lowest tender for the construction of road and drainage works in Henry Road Pakenham. The actual tender document is not in my possession as it is not materially relevant to the allegation.
Para (c)The 'open space arrangements' allegedly omitted from Cr Ronald's ordinary returns in 2002, 2003 and 2004 refer to a public open space contribution to count towards the future development of Lot 1 85 McGregor Road.
Para (d)The gifts of Cr Ronald allegedly received from Mr Andrew Facey and/or Krastoy Pty Ltd refer to the payment of Council rates for 85 McGregor Road and farmland owned the estate of PB Ronald and farmed by Cr Ronald under an agreement that he pay all rates and outgoings. The specifically in 2002/03 Cr Ronald received $10,781.05, in 2003/04 $10,903.58 and in 2004/05 $18,723.66.
Para (e)Cr Ronald's alleged interest in the Council's consideration of urban design guidelines for Pakenham is that the specific works in Henry and McGregor Roads Pakenham relate to his property which is accessed from this intersection.
Para (f)Cr Ronald's alleged interest in a motion before the Council in relation to the development of a skate park at the PB Ronald Reserve is that his wife is an executive member of Learning and Living Inc which occupies the building adjacent to the proposed skate park and had requested that skate park be relocated.
Para (g)Cr Ronald's alleged interest in relation to an agreement between the Council and VicRoads for the provision of access ramps associated with McGregor Road Pakenham in connection with Pakenham By-pass is that the decision would result in a pecuniary interest or non-financial benefit to Cr Ronald's property in McGregor Road.
Para (h)It is alleged that Cr Ronald had previously declared an interest in matters related to Greenhills therefore he had a possible interest in relation to the Council's proposal to purchase 335 McGregor Road Pakenham.
Para (i)Cr Ronald's alleged interest in the Council's consideration of a planning application for the construction of 7 commercial premises at 95 Main Street Pakenham being the owner of a commercial development in McGregor Road Pakenham is that the proposed development would be in competition to his own development thereby resulting in a pecuniary disadvantage to him.
Please note that while I propose to ask Cr Ronald questions in relation to the matters outlined in my letter of 16 June 2005 my investigation is not restricted to these matters should information be forthcoming which indicates further breaches of the Act."
On 14 July 2005, the defendant’s solicitor disputed by letter the plaintiff’s power to conduct the investigation and requested that he discontinue the investigation and/or further adjourn the examination. By letter of 14 July 2005, the plaintiff wrote to the defendant’s solicitor declining to either discontinue the investigation or grant a further adjournment of the examination and confirming that he required the defendant to appear before him on 18 July 2005.
By facsimile letter of 18 July 2005, the defendant’s solicitor again disputed the plaintiff’s power to conduct the investigation and informed the plaintiff that the defendant did not intend to appear before him for examination.
By facsimile letter of 18 July 2005, the plaintiff confirmed that he required the defendant to appear for examination on that day. He also informed the defendant’s solicitor that should the defendant fail to appear as required, the plaintiff would pursue action pursuant to s.223C of the Act. Later on the same day, a facsimile letter was received from the defendant’s solicitor confirming the defendant would not be appearing for an examination as required.
The defendant did not appear before the plaintiff for examination on oath and to answer questions in relation to the plaintiff’s investigation as required.
The plaintiff then on 9 August 2005 certified the following matters pursuant to s.223C(2) of the Act.
"1.I am undertaking an investigation under Section 223B(1)(b) of the Act in relation to possible breaches of the Act by William Ronald, a councillor of the Cardinia Shire Council.
2.Pursuant to Section 223B(2) of the Act I requested William Ronald provide me with the following:
(1)a copy of a terms contract of sale with Krastoy Pty Ltd and/or its parent company Parklea Pty Ltd in respect of the property bordered by McGregor Road and Henry Road, Pakenham; and
(2)any other documents in your custody or control in relation to the Estate of P.B. Ronald and to yourself insofar as they relate to any possible interest in the following properties:
(a)L1 PS441732V McGregor Road, Pakenham;
(b)LBB PS512303C Henry Road, Pakenham;
(c)LJ PS512301G & LZ PS512301G Henry Road, Pakenham;
(d)L316 PS512301G 14 Murray Avenue, Pakenham;
(e)L322 PS512301G Henry Lawson Drive, Pakenham;
(f)L309 PS512301G 1 Murray Avenue, Pakenham;
(g)L310 PS512301G 2 Murray Avenue, Pakenham; and
(h)L321 PS512301G 36 Henry Lawson Drive, Pakenham.
3.William Ronald has complied with my request to produce documents relating to the investigation.
4.Pursuant to Section 223B(2) of the Act, I required William Ronald to appear before me for examination on oath and to answer questions in relation to my investigation.
5.William Ronald has failed to appear before me for examination on oath and to answer questions in relation to the investigation.
6.William Ronald has not proved he has a lawful excuse for this failure.
Pursuant to Section 223C(2) of the Act, I hereby certify that William Ronald has failed to appear before me for examination on oath and to answer questions as required pursuant to Section 223B(2) of the Act."
The Construction Question
It is convenient to repeat the terms of s.223B(1):
"An inspector of municipal administration may examine or investigate –
(a)any matter relating to a Council’s operations or the Council elections or electoral matters; and
(b) any possible breaches of this Act."
The primary contention of the defendant is that s.223B(1)(b) of the Act does not empower an inspector to examine or investigate any possible breaches of the Act unless they arise out of the subject matter of s.223B(1)(a) namely "any matter relating to a Council’s operations or to Council elections or electoral matters."
The plaintiff submits that he may examine or investigate any possible breaches of the Act whether or not they arise out of or relate to a matter falling within the terms of s.223B(1)(a).
If the defendant is correct, it remains to be considered whether the inspector is seeking to examine the defendant with respect to "any matter relating to a Council's operations." Accordingly, a view must be formed as to the relevant ambit of that phrase and the facts of the matter characterised.
The Context of the Provision
Provisions governing the ambit of powers such as those now in issue must be construed having regard to their statutory context.
"… to read the section in isolation from the enactment of which it forms a part is to offend against the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context … . Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise." [6]
(Citations omitted)
[6]K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 per Mason J.
There are, in my view, a series of contextual factors which bear on the questions of construction in issue.
(a)Section 223A provides for the appointment of inspectors of "municipal administration." Such an inspector is required to be a person who has, in the opinion of the Minister, "appropriate skills or knowledge to be an inspector of municipal administration." The title of the inspector supports the view that his functions are directed towards matters of municipal administration.
The concept of municipal administration is a potentially broad one. In my view it embraces both the conduct of the Council and its staff. It includes those matters which the Act deals with under the heading "Council Administration" in Part 4, although that heading is not to be read as part of the Act.[7] Part 4 contains a series of divisions dealing in turn with the Mayor and other Councillors, Conduct and Interests, Procedure and Proceedings, and Council Staff.
[7]See s.36(1A) Interpretation of Legislation Act 1984
In R v Local Commissioner for Administration for the North and East Area of England; Ex parte Bradford MCC[8], Lord Denning MR considered the jurisdiction under the relevant English legislation of a commissioner with respect to a written complaint "made by or on behalf of a member of the public who claims to have sustained injustice in consequence of maladministration in connection with action taken by or on behalf of a local authority … being action taken in the exercise of the administrative functions of that authority."
[8][1979] QB 287
His Lordship adopted the words of Professor Wade[9] as to the meaning of the word "maladministration" (in connection with action taken in the exercise of the administrative functions of the authority).
[9]Reflecting a statement made to Parliament by Mr Crossman, the Lord President of the Council.
"It will cover 'bias, neglect, inattention, delay, incompetence, ineptitude, perversity, turpitude, arbitrariness and so on.' It 'would be a long and interesting list,' clearly open-ended, covering the manner in which a decision is reached or discretion is exercised; but excluding the merits of the decision itself or of the discretion itself. It follows that 'discretionary decision, properly exercised, which the complainant dislikes but cannot fault the manner in which it was taken, is excluded': see Hansard, 734 H.C. Deb., col. 51."[10]
[10]Above at 311-312
(b)The Act provides also for an alternative form of more general enquiry. Under s.209, the Minister may appoint a person as a commissioner;
(i)to conduct an enquiry into matters relating to the affairs of a Council; and
(ii)to report in writing to the Minister on those matters.
The matters which an inspector of municipal administration may examine or investigate are by contrast more specific than "matters relating to the affairs of a Council."
(c)The meaning of the phrase "Council’s operations" in s.223B(1)(a) is to be ascertained in the context of the local government charter provided for in Part 1A of the Act.[11] This charter comprises a statement of the purpose of local government (s.3A), a statement of how a Council is constituted (s.3B), a statement of the objectives of a Council (s.3C), a statement of the role of a Council (s.3D), a statement of the functions of a Council (s.3E), and a statement of the powers of Councils (s.3F).
(d)The Act contains criminal offences which would not directly relate to the operations of a Council. Section 220E exemplifies this point.
"A person who is, or has been, a member of a Local Government panel must not make improper use of any information acquired as a member of the panel to gain, or to attempt to gain, directly or indirectly a pecuniary or other advantage for himself or herself or for any other person."
(e)Section 223B grants the inspector powers which interfere significantly with an individual's common law rights, enabling the inspector to require the production of documents, the giving of "all reasonable assistance", and appearance on oath and to answer questions.
(f)Section 223C provides for criminal sanctions in the event of non-compliance with a requirement of the inspector. It further provides for proceedings enabling injunctive relief to be instituted in a summary fashion in this Court.
(g)I was informed by counsel that there is no extrinsic material which assists with respect to the issues of construction with which I am concerned.
[11]The heading was inserted in 2003. See s.36(1A) Interpretation of Legislation Act 1984.
In my view:
(a)the reference to possible breaches of the Act contained in (b) is to be understood to refer to possible breaches of the Act arising out of any matter relating to one of the categories set out in (a); but
(b)the matters which the inspector has particularised fall within the category of "any matter relating to a Council's operations".
Insofar as the first conclusion is concerned it is supported by the context of the provisions including the title of the inspector, the extent of the inspector's powers, and the provision of penal and injunctive remedies for breach of requirements made by an inspector pursuant to those powers.
I accept that as Gibbs J stated in Beckwith v R[12]:
"The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences … . The rule is perhaps one of last resort."
[12](1976) 135 CLR 569 at 576
Nevertheless in the present context the sanctions provided for in s.223B support a power to compel an individual to attend for oral examination on oath together with a power to require all reasonable assistance and to produce documents. In these circumstances it seems to me that the context does support the confinement of s.223B(1)(b) to circumstances which it is clear it was intended to cover.
The context does not suggest that before the matters referred to in s.223B(a) can be the subject of examination or investigation there must also be an identification of possible breaches of the Act under (b). As Mr Tracey submitted it would be perfectly possible for a municipal inspector to conduct an examination of a Council's operations without any suggestion of any breach of the Act having occurred. The context does, however, support the view that the possible breaches referred to in (b) must arise out of a matter falling within (a).
The Characterisation Question
It follows that the critical question in the present case is whether the plaintiff has required the defendant to appear before him and answer questions concerning "any matter relating to a Council's operations."
Although Mr Tracey did not initially press me to so conclude but put the proposition as a fall back position, I have reached the view that the phrase embraces the allegations relied on by the inspector.
Particular (a) alleges that the defendant as a councillor released information confidential to the Council in breach of s.77 of the Act. A Council consists of its councillors (s.3B) and is elected to provide leadership for the good governance of the municipal district and the local community (s.3D(1)). It is required to pursue the primary objective of achieving "the best outcomes for the local community having regard to the long term and cumulative effects of decisions" (s.3C(1)). It is required to have regard to the "facilitating objective" to "ensure transparency and accountability in decision making." It exercises the function inter alia of:
"exercising, performing and discharging the duties, functions and powers of Councils under this Act and other Acts;"
Section 77 imposes obligations upon individual councillors with respect to confidential information. Compliance with that section bears directly on the operations of a Council both as a Council and by way of special committee. It also bears upon the achievement of the Council's objectives, fulfilment of its role, and exercise of its functions in accordance with the sections to which I have referred comprising part of the local government charter.
Further, the concept of municipal administration implicit in the inspector's title is sufficiently broad to embrace Council's operations in the relevant sense.
Likewise the allegations of failure to disclose a pecuniary interest or conflict of interest in a matter before the Council (particulars (b), (e), (f), (g), (h) and (i)), failure to disclose in the register of interests provided for by s.81 (particulars (c) and (d)) and voting concerning a matter in respect of which the defendant had declared a conflict of interest (particular (j)), all relate to operations of the Council when it is understood that the imposition of obligations as to conduct and interests imposed upon councillors individually form elements of the statutory scheme within which a Council carries on its operations and further bear on the proper constitution, achievement of objectives, role, functions and power of the Council as set out in the Act.
Accordingly, in my view the plaintiff is entitled to compel the defendant to attend before him for the purpose of examination on oath and to answer questions in relation to the matters which have been particularised.
The plaintiff is not, however, entitled to an order requiring the defendant to attend for purposes which have not been specifically identified. To do so would involve this Court, requiring the defendant to attend for purposes which have not been demonstrated to be within power. I will hear counsel further as to the appropriate form of order in the circumstances.
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