Hart, Steven Irvine v Brown, Roger

[1998] FCA 365

FEDERAL COURT OF AUSTRALIA

INTERLOCUTORY APPLICATION - whether decision of the Insurance and Superannuation Commissioner to disclose information to the Australian Taxation Office should be stayed

Superannuation Industry (Supervision) Act 1993 (Cth) s 346

Steven Irvine Hart, Steve Hart Family Holdings Pty Ltd and Harts Australia Limited v Roger Brown and Insurance and Superannuation Commissioner
QG 211 of 1997

Kiefel J
Brisbane
9 February 1998

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 211 of 1997

BETWEEN:

STEVEN IRVINE HART, STEVE HART FAMILY HOLDINGS PTY LTD AND HARTS AUSTRALIA LIMITED
APPLICANTS

AND:

ROGER BROWN
FIRST RESPONDENT

INSURANCE AND SUPERANNUATION COMMISSIONER
SECOND RESPONDENT

JUDGE:

KIEFEL J

DATE OF ORDER:

9 FEBRUARY 1998

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1. The decision of the respondents dated 17 December 1997 be suspended until the final determination of the matters in issue in these proceedings.

1. That the second respondent pay the applicants’ costs of and incidental to the motion including any reserve costs, to be taxed.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 211 of 1997

BETWEEN:

STEVEN IRVINE HART, STEVE HART FAMILY HOLDINGS PTY LTD AND  HARTS AUSTRALIA LIMITED
APPLICANTS

AND:

ROGER BROWN
FIRST RESPONDENT

INSURANCE AND SUPERANNUATION COMMISSIONER
SECOND RESPONDENT

JUDGE:	KIEFEL J
DATE:	9 FEBRUARY 1998
PLACE:	BRISBANE

REASONS FOR JUDGMENT
Ex Tempore

The applicants have been the subject of investigation by the Insurance and Superannuation Commissioner for some time.  They allege the investigation was undertaken on the complaint of a former employee and that the Commissioner or his officers have a biased or prejudicial view towards them.  These matters are not relevant to the determination of this application.

The Australian Taxation Office also executed search warrants in respect of the applicants’ records and these have been the subject of other proceedings.  It is not alleged that the request by that Office of the Commissioner for documents, which lies at the heart of these proceedings, was untoward in the procedure utilised.  The question here is essentially one of construction of disclosure provisions in the Superannuation Industry (Supervision) Act 1993 (Cth).

On 28 July 1997 the Australian Tax Office wrote to the Insurance and Superannuation Commissioner referring to a previous telephone conversation and requesting:

“All external papers, documents and records relative to any ISC audit relating to the Hart group of companies or superannuation funds associated with the Hart group of companies.  Access to internal working papers relative to any ISC audit relating to the Hart group of companies or superannuation funds connected with any ISC audit relating to the Hart group of companies or superannuation funds associated with the Hart Group of Companies.”

That is to say, it seems that the whole of the Insurance and Superannuation Commissioner’s file of investigations, which would likely contain reference to and details of the applicants, their documents and affairs, were requested. Following communications with the applicants including representations made by them as to the legality of the action to be undertaken, a superannuation standards officer published a decision dated 17 December 1997. I intend no disrespect by summarising that decision as one to provide the documents because s 346(6) of the Superannuation Industry (Supervision) Act permitted them to be given and the Australian Taxation Office had requested them.

I am today concerned with an application for a stay of the decision pending the final hearing in this matter. As to the question involved, it is one of law, s 346 is concerned with secrecy as its title shows. Section 346(2) enacts a general prohibition in relation to the disclosure of information obtained by the Commissioner in pursuance of the duties under the Act. The section then goes on to deal with a number of exceptions. Sub-section 6(a) is in these terms:

“Sub-section (2) does not prohibit a superannuation standards officer from disclosing protected information or producing a protected document other than a report of an inspector to

(a) the Commissioner of Taxation or a taxation officer authorised by the Commissioner of Taxation for the purposes of this section.”

The applicants’ submission that disclosure can nevertheless be provided only for the purposes of the Superannuation Industry (Supervision) Act itself would seem to me likely to go too far. It would render nugatory the provision of material to other bodies such as the Commissioner of Taxation. On the other hand the respondents’ submission, consistent with the decision made, that s 346(6) enables a superannuation standards officer to hand over protected information whenever the Australian Taxation Office requests it, ignores the need for the Australian Taxation Office to be acting bona fide and in the pursuit of its powers and functions when requesting the material and any obligation on the part of the ISC officer to be satisfied as to the source of power and the qualifications of those requesting it before handing over the material.

That is to say it seems to me quite arguable that there needs to be a source of power in the Australian Taxation Office as well as there being the permission given by s 346(6) to hand over the documents. Further it seems to me to follow from that, that the relevant superannuation standards officer might then be required to consider the source of the power, the purpose disclosed and the qualification of the person requesting it. It is not necessary for me to come to a concluded view of course on this application. It is sufficient that I am satisfied, as I am, that there is a question proper to be heard and determined in the judicial review proceedings brought as a consequence of the decision.

So far as the balance of convenience is concerned, there is not a strong case for the respondent itself and it does not suggest that to be the case.  At my suggestion the Australian Taxation Office, whose investigations are said to be affected by the request, appeared.  It was said that some disruption to an audit process might result from a stay but this was not further explained.  It is difficult to see that it could have substantial effect, given in particular that the request for the documents was made so long ago.  In any event it is difficult to see how its interests could be such as to prevail over the applicants’ confidentiality at least until a question about so serious a matter is determined.  In these circumstances I propose to grant the stay sought until the hearing of the matter.

The orders will then be that the decision of the respondents dated 17 December 1997 be suspended until the final determination of the matters in issue in these proceedings.

That the second respondent pay the applicants’ costs of and incidental to the motion including any reserve costs, to be taxed.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel

Associate:

Dated:            9 February 1998

Counsel for the Applicant:	Ms C E Holmes
Solicitor for the Applicant:	Hawthorn Cuppaidge & Badgery
Counsel for the First and Second Respondents:	Mr P E Hack
Solicitor for the First and  Respondents:	Australian Government Solicitor
Date of Hearing:	9 February 1998
Date of Judgment:	9 February 1998