Greer v King
[2002] FCA 1617
•24 DECEMBER 2002
FEDERAL COURT OF AUSTRALIA
Greer v King [2002] FCA 1617
ADMINISTRATIVE LAW – natural justice – bias – whether hypothetical fair-minded lay person would conclude that the Companies Auditors and Liquidators Disciplinary Board was guilty of apparent bias
Australian Securities and Investments Commission Act 2001 (Cth) Part II, s 218(2), 220, 220(1), 220(2)
Corporations Act 2001 (Cth) s 1292(1)(d), 1292(2)(d)
Criminal Code Act 1995 (Cth) Sch s 1.1, 2.2, 5.1, 5.2(1), 5.2(3), 5.6, 5.6(2), 6Re Refugee Review Tribunal; Ex parte H (2001) 75 ALJR 982 applied
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 applied
Johnson v Johnson (2000) 201 CLR 488 applied
He Kaw Teh v The Queen (1984-1985) 157 CLR 523 applied
Hills v Ellis [1983] 1 QB 680 citedJOHN GREER v PHILLIP KING & ORS
N 1282 OF 2002
HELY J
24 DECEMBER 2002
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 1282 OF 2002
BETWEEN:
JOHN GREER
APPLICANTAND:
PHILLIP KING
PETER BARRETT
BRIAN MORRIS
BRUCE ROBERTSON
PATRICK PONTING
FIRST RESPONDENTSPAUL COLEMAN
SECOND RESPONDENTJUDGE:
HELY J
DATE OF ORDER:
24 DECEMBER 2002
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The application be dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 1282 OF 2002
BETWEEN:
JOHN GREER
APPLICANTAND:
PHILLIP KING
PETER BARRETT
BRIAN MORRIS
BRUCE ROBERTSON
PATRICK PONTING
FIRST RESPONDENTSPAUL COLEMAN
SECOND RESPONDENT
JUDGE:
HELY J
DATE:
24 DECEMBER 2002
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Background
The first respondents are the members of the Companies Auditors and Liquidators Disciplinary Board (“the Board”) constituted by Part II of the Australian Securities and Investments Commission Act 2001 (Cth) (“the ASIC Act”). The second respondent is the Registrar of the Board (“the Registrar”).
On or about 18 January 2002 ASIC served a Statement of Facts and Contentions (“SOFAC”) on the applicant in relation to an application made by ASIC to the Board under sections 1292(1)(d) and 1292(2)(d) of the Corporations Act 2001 (Cth) with respect to the applicant (“the ASIC application”). Those sections concern the power of the Board to cancel or suspend a person’s registration as an auditor or liquidator.
On 27 February 2002 a pre-hearing conference was held at which a timetable for the conduct of the matter was agreed. That timetable provided for particulars to be requested and supplied in March 2002, and for the applicant to lodge his response to ASIC’s SOFAC by 10 April 2002. The hearing was scheduled to commence on 9 December 2002.
The applicant was represented by Mr Johns, solicitor, in relation to the proceedings before the Board.
On 17 April 2002 the Board wrote to Mr Johns noting that the response to ASIC’s SOFAC had not been filed by the agreed date, and enquiring when it would be filed.
On 2 May 2002 the Registrar telephoned Mr Johns’ office and was informed that Mr Johns was away from the office until the week commencing 6 May 2002. A message was left for Mr Johns to call the Registrar on his return. On 23 May 2002 the Registrar again telephoned Mr Johns’ office and left a message for Mr Johns to return his call. Mr Johns called in response to this message, and advised that the matter was being attended to, but that Mr Johns could not give the Registrar any indication of the date on which the applicant could file a response to ASIC’s SOFAC.
On 9 August and 22 August 2002 the Registrar telephoned Mr Johns’ office, but did not succeed in speaking to him. It appears that Mr Johns was overseas between 6 and 24 August 2002.
The letter complained of
On 23 August 2002 the Registrar wrote to Mr Johns on the letterhead of the Board. The letter is as follows:
“Dear Mr Johns,
Australian Securities and Investments Commission And John Greer
Matter No 2/NSW 02I refer to the timetable for this matter which was agreed between the parties at a pre-hearing conference held on 27 February 2002. I refer also to my letter to you of 17 April 2002. I note from that timetable (as amended) that your client was due to file with the Board his response to ASIC’s Statement of Facts and Contentions and provide a copy of that response to ASIC by no later than 2 May 2002.
ASIC has advised me that to date it has not received that response and indeed the Board’s records indicate that a response has not yet been filed at its registry. As I said in my earlier letter the timetable agreed between the parties at the aforementioned pre-hearing conference was, by any standards, a generous one. Yet it appears that your client has done nothing to rectify the situation. Furthermore a number of attempts by me to contact you by telephone have gone unanswered.
The Board considers this delay to be unacceptable and has asked me to draw your attention and the attention of your client to the provisions of section 220 of the Australian Securities and Investments Commission Act, 2001 dealing with contempt of the Board. The Board is concerned that this matter is now so far behind schedule for no apparent satisfactory reason that the hearing set down to commence on 9 December may indeed not go ahead. Should this occur the Board will certainly be giving very serious consideration to all of the options available to it.
I look forward to your prompt response.
Yours sincerely
Paul J Coleman
Registrar”Section 220 of the ASIC Act provides as follows:
“Section 220 CONTEMPT OF DISCIPLINARY BOARD
220(1) [Offence of obstruction or disruption] A person must not:(a)engage in conduct that results in the obstruction or hindering of the Disciplinary Board or a member in the performance or exercise of any of the Disciplinary Board’s functions and powers; or
(b)engage in conduct that results in the disruption of a hearing.
Penalty:10 penalty units or imprisonment for 3 months.
220(2)[Offence of contravening direction] A person must not contravene a direction given under paragraph 216(5)(b).
Penalty:10 penalty units or imprisonment for 3 months.
220(2A)[Strict liability offence] Subsection (2) is an offence of strict liability.
220(2B)[Reasonable excuse] Subsection (2) does not apply to the extent that the person has a reasonable excuse.
220(3)[Offence punishable on summary conviction] An offence constituted by a contravention of subsection (1) or (2) is punishable on summary conviction.”
(Section 216(5)(b) deals with directions given by the Board preventing or restricting publication of evidence or other materials given before the Board.)
On 16 September 2002 Mr Johns responded to the Registrar’s letter. The response includes the following:
“Procedural delay of the kind that has occurred in this matter does not and cannot amount to contempt of the Board within the meaning of section 220 of the Australian Securities and Investments Commission Act 2001. If it did, lawyers and their clients would be in contempt of courts every day of the week as preparation to timetables are exceeded.
We know of no precedent for such a contention and are surprised and dismayed that you and the Board have made this none too veiled threat. Such conduct is oppressive and intimidatory. It disqualifies the Members of the Board who are responsible for it from sitting on this inquiry. Please identify them.”
By letter dated 10 October 2002 the Registrar recounted the history of the matter and concluded:
“In the light of the above circumstances, I do not consider my letter of 23 August to be either ‘oppressive’ or ‘intimidatory’ but simply necessary action by me to facilitate the Board in meeting its statutory obligations. Accordingly, I do not propose to identify any Board members nor do I believe that any of the Board members should disqualify themselves from hearing this matter in the light of your letter.”
These proceedings were instituted on 3 December 2002. The substance of the relief sought is an injunction restraining the Board, or such of its members who previously expressed the opinion that the applicant is or may have been guilty of contempt of the Board, from hearing and determining the ASIC application.
ASIC is not a party to these proceedings. When the matter came before me on 4 December 2002, I raised with the parties the question of whether ASIC was a necessary party, and directed that notice of these proceedings be given to ASIC.
Apparently agreement was reached between the applicant, ASIC and the Board that the ASIC application would not proceed on 9 December 2002 for reasons unconnected with the present proceedings. At a preliminary hearing of the Board on 9 December 2002, counsel for the applicant submitted to the Board that the letter of 23 August 2002 gave the appearance of pre-judgment of the ASIC application on the part of those members of the Board who concurred in the sending of the letter. Counsel emphasised that the complaint was of apparent bias: “we are not talking about any actual bias at all”. The Chairman of the Board, Mr P J L King, and Mr B M Robertson, a member of the Board were present on that occasion. They rejected the applicant’s contention that the letter of 23 August 2002 would give rise to a reasonable apprehension of bias on the part of those members of the Board who concurred in the sending of the letter, and gave reasons why they reached that conclusion. Accordingly, the application that members of the Board who concurred in the sending of the letter should disqualify themselves was rejected.
The parties have agreed that this matter should proceed in this Court by way of a final hearing. Neither party submitted that ASIC was a necessary party to the proceedings, and although given notice of the proceedings, ASIC did not seek to appear. Counsel for the respondents accepted that if the applicant’s complaint is made out, the applicant would be entitled to appropriately framed relief. He did not contend that the only remedy available to the applicant would be to quash any adverse decision of the Board if it was infected by apparent bias on the part of one or more of its members.
Under s 218(2) of the ASIC Act, the Board must observe the rules of natural justice at and in connection with a hearing. One of the traditional rules of natural justice is the rule against bias. That rule covers cases of apparent bias, as well as cases of actual bias.
It is common ground that the test for apprehended bias in the case of a body such as the Board, whose proceedings are ordinarily conducted in private (ASIC Act s 216(2)), is whether a hypothetical fair-minded lay person who is properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias, might reasonably apprehend that the Board might not bring an impartial mind to the resolution of the question to be decided. See Re Refugee Review Tribunal; Ex parte H (2001) 75 ALJR 982 at [27], [28].
The relevant hypothetical lay person must be presumed to have knowledge of the material objective facts: Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 95 (Deane J). Whilst the relevant hypothetical person by reference to whom the test is formulated is a lay person, who is not to be assumed to have a detailed knowledge of the law (see Johnson v Johnson (2000) 201 CLR 488 at 493, it does not necessarily follow that the person is wholly uninformed or uninstructed about “the law in general or the issue to be decided”: see Johnson at 508, per Kirby J.
Thus in Laws (supra) Mason CJ and Brennan J (at 87-88) and Gaudron and McHugh JJ (at 98-99) attributed to the relevant hypothetical person knowledge of the significance and effect of pleadings in a defamation case. The pleading was a material objective fact, and the legal effect of the pleading was part of the actual circumstances of the case.
In the present case it is the applicant’s contention that the penultimate paragraph of the letter of 23 August 2002 would lead the relevant hypothetical lay person to conclude that there was an apparent prejudgment of the merit or likely merit of the applicant’s case in the ASIC application on the part of those members of the Board who concurred in the sending of the letter.
That conclusion is said to follow because the “material facts” in this case are as follows:
“(a) The provisions of section 220 of the ASIC Act including both:
(i) the nature of the acts and mens rea constituting the offence;
(ii)the gravity of the offence, having regard to the penalty which may be imposed.
(b)The fact that the letter written by the Registrar dated 23 August 2002 was written at the direction of one or more members of the Board;
(c)The fact that the Board or any member of it would not refer to section 220 lightly, i.e. that the Board member or members who expressed the view reflected in the Registrar’s letter must have concluded that the circumstances which then existed made section 220 applicable or arguably applicable;
(d)The fact that section 220 requires that the person whose conduct falls within the terms of the section [has] acted deliberately to achieve the result of hindering or obstructing the Board;
(A negligent driver who hinders the Board by injuring one or more Board members in a road accident would not, on those facts, even arguably be guilty of an offence against section 220, but a driver who deliberately collided with a car carrying Board members with intent thereby to hinder or obstruct the Board’s discharge of its duties would be guilty of such offence.)
(e)The necessary inference that deliberate action to hinder or obstruct the Board would be motivated by a desire to prevent or delay the Board’s consideration of the ASIC application;
(f)The necessary inference that such motive would be attributable to a perception that the outcome of the Board’s deliberations was likely to be adverse to the Applicant;
(g)The necessary corollary that the Applicant and/or his legal representatives believed that the Applicant’s case in relation to the ASIC application to the Board was likely to be unpersuasive, i.e. that it was weak and was likely to fail;
(h)Therefore the Board member or members who had expressed the view that section 220 was or might arguably be applicable to the Applicant and/or his legal representatives had necessarily reached the view that procedural delays were or probably were deliberate and were or probably were motivated by a desire to hinder or obstruct the Board in its statutory duty to hear and determine the ASIC application because the Applicant’s case was weak.”
This recitation of supposedly material facts is taken from the applicant’s written submissions.
As a matter of language, s 220(1) is enlivened if a person engages in conduct which has a particular effect. Section 220(1) does not expressly import mens rea as an element of the offence; the word “knowingly” does not appear. However, the seriousness of the punishment prescribed for an offence against s 220(1), and the contrast with s 220(2) which, by virtue of s 220(2A) is an offence of strict liability, suggest that the common law presumption that mens rea in the sense of “an evil intention, or a knowledge of the wrongfulness of the act” is an essential ingredient in the offence created by s 220(1): He Kaw Teh v The Queen (1984-1985) 157 CLR 523.
However, as Gibbs CJ pointed out in He Kaw Teh (at 530), the expression “mens rea” is ambiguous and imprecise. In the present case there may be a question as to whether, under the general law, it would be sufficient to establish that the conduct in question was deliberate or intentional, and that it had the requisite result, or whether it would be necessary to establish, in addition, an intention that the conduct would produce that result: cf Hills v Ellis [1983] 1 QB 680, 686.
Section 220 of the ASIC Act is an offence against laws of the Commonwealth within the meaning of s 1.1 of the Schedule to the Criminal Code Act 1995 (Cth). Part 2.2 of the Schedule to that Act deals with the elements of an offence. An offence consists of physical elements and fault elements unless the law which creates the offence provides that there is no fault element for one or more physical elements: s 3.1(2). Where, for example, the law that creates an offence provides that the offence is an offence of strict liability, there are no fault elements for any of the physical elements of the offence (s 6).
Section 4.1 of the Schedule provides that the physical elements of an offence may be conduct (including an omission to perform an act or a state of affairs) and the result of conduct. Conduct can only be a physical element if it is voluntary: s 4.2(1).
A fault element for a particular physical element may be intention, knowledge, recklessness or negligence (s 5.1). If the law creating an offence does not specify a fault element for an offence that consists only of conduct, intention is the fault element for that physical element: s 5.6(1). If the law creating the offence does not specify a fault element for a physical element of an offence that consists of circumstances or a result, recklessness is the fault element for that physical element (s 5.6(2)).
A person has intention with respect to conduct if the person means to engage in that conduct (s 5.2(1)). A person has intention with respect to a result if the person means to bring it about or is aware that it will occur in the ordinary course of events (s 5.2(3)). A person has knowledge of a result if the person is aware that it will exist in the ordinary course of events (s 5.3). “Recklessness” is defined in s 5.4 as follows:
“5.4(1) A person is reckless with respect to a circumstance if:
(a)he or she is aware of a substantial risk that the circumstance exists or will exist; and
(b)having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
(2)A person is reckless with respect to a result if:
(a)he or she is aware of a substantial risk that the result will occur; and
(b)having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
(3)The question whether taking a risk is unjustifiable is one of fact.
(4)If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element.”
The physical elements for the offence created by s 220 of ASIC Act are both conduct and the result of conduct. In a prosecution for contravention of s 220, in the circumstances of the present case, the prosecution would need to establish that the non-lodgement of the applicant’s response to ASIC’s SOFAC by the specified date was intentional – something which the applicant meant to do - and that the applicant intended that the Board would thereby be hindered or obstructed or was aware that this result would occur in the ordinary course of events.
I accept that the “material facts” include the matters identified in par (a) and (b) of the applicant’s submission. In general terms, I accept par (c). A fair-minded properly informed lay person reading the letter could well conclude that the Board was unhappy with the manner in which the matter had proceeded to date, and that the Board considered that the applicant’s failure to comply with the agreed timetable for filing a response to ASIC’s SOFAC, and failure to give an explanation for that failure, to be “unacceptable”. Such a reader could also conclude that the Board had entertained the possibility that the conduct, or at least a continuation of the conduct if it led to the hearing not proceeding on the scheduled date, might amount to the commission of an offence against s 220 on the part of either or both of the applicant or Mr Johns. I also accept par (d) of those submissions, subject to the qualification that it would be sufficient to establish that the person was aware that hindering or obstruction of the Board would occur in the ordinary course of events, or that the person was reckless as to whether hindering or obstruction of the Board would ensue (Criminal Code Act Schedule: ss 5.6(2), 5.4(1)).
I do not accept that the matters referred to in pars (e), (f), (g) or (h) are a necessary inference from, or a corollary to, the “material facts” which I have accepted. There may be many reasons why an applicant (or his solicitor) might not comply with a timetable for the conduct of proceedings before the Board appreciating that a likely consequence will be postponement of a hearing date, other than a consciousness that the applicant’s case in the proceedings before the Board is a weak one. For example, there may be a perception on the part of solicitor or client that other matters enjoy a higher priority, or there might be some perceived tactical advantage if a postponement of the hearing before the Board can be engineered.
An assertion by the Board that the applicant and/or Mr Johns might have engaged in deliberate conduct with the intention of obstructing the Board in the performance of its functions, or knowing that obstruction would occur in the ordinary course of events, would not lead the relevant hypothetical lay person to conclude that the Board was guilty of prejudgment in relation to the ASIC application. That is particularly so in circumstances where the history of the proceedings before the Board (summarised above) indicates a long period of unexplained delay which the Board could properly characterise as “unacceptable”. Counsel for the applicant submitted that the evidence summarised under this heading was irrelevant and inadmissible, because the issue is whether there is the appearance of prejudgment, not whether the prejudgment is right. This submission confuses the subject matter of the alleged prejudgment. The issue is not whether the Board prejudged whether the delay was unacceptable, but whether the Board gave the appearance of prejudging the ASIC application. The history of unexplained delay is a relevant contextual fact which the hypothetical fair-minded lay person would take into account in assessing whether the letter of 23 August 2002 indicated apparent bias in relation to the determination of the ASIC application.
In my view, the hypothetical fair-minded lay person would not reasonably apprehend that the Board would bring other than an unprejudiced and impartial mind to the ASIC application.
The application should be dismissed with costs.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate:
Dated: 24 December 2002
Counsel for the Applicant: Mr V Gray Solicitor for the Applicant: Malcolm Johns & Co Counsel for the Respondent: Mr J Stevenson Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 13 December 2002 Date of Judgment: 24 December 2002
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