Hobart Central Child Care Pty Ltd and Commissioner of Taxation - [2004] AATA 1222

CATCHWORDS – PRACTICE & PROCEDURE – disclosure of documents to applicant – legal professional privilege – public interest immunity – third party information – whether breach of conditions imposed by ASIC – whether breach of s. 79 Australian Securities and Investments Commission Act 1989

PRACTICE & PROCEDURE – whether transcripts of examination by ASIC admissible in evidence – whether knowledge of existence of transcripts taints Tribunal

PRACTICE & PROCEDURE – whether document already disclosed properly included on respondent’s list of documents

PRACTICE & PROCEDURE – summons to give evidence – extent of evidence that may be given by an officer of the Australian Taxation Office when summonsed – limitation of s. 16 of the Income Tax Assessment Act 1936

Income Tax Assessment Act 1936 ss. 6, 8 , 16, 263 and 264
Australian Securities and Investment Commission Act 1989 ss. 5, 68, 76, 79 and 127
Australian Securities and Investment Commission Act 2001 s. 276
Freedom of Information Act 1982 ss. 4, 33, 33A, 34 and 35
Taxation Administration Act 1953
Evidence Act 1995 s. 56
Administrative Appeals Tribunal Act 1975 ss. 29, 33, 36, 36A, 36B, 36C, 36D, 37 and 40
Administrative Appeals Tribunal Amendment Act 1977 s. 23
Law and Justice Amendment Act 1988 ss. 12 and 13
Australian National Airlines Act 1945

Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority [2004] AATA 704
Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33
R v Deputy Industrial Injuries Commissioner; Ex parte Moore [1965] 1 QB 456
Drake v Minister for Immigration and Ethnic (1979) 24 ALR 577
Australian Securities Commission v Kippe (1996) 67 FCR 499
The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543
AM & S Europe Ltd v Commission of the European Communities [1983] QB 878; 1 All ER 705
Grant v Downs (1976) 135 CLR 674
Rich v Australian Securities and Investments Commission [2004] HCA 42
Attorney-General (NT) v Maurice (1986) 161 CLR 475
Commissioner of the Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
Re Lindsey and Australian Postal Commission (1989) 18 ALD 340
Re McMaugh and Australian Telecommunications Commission (1991) 22 ALD 393
Sankey v Whitlam (1978) 142 CLR 1
R v Young [1999] NSWCCA 166
The Queen v Strawbridge [2002] NZCA 332
D v National Society for the Prevention of Cruelty to Children [1978] AC 171
Cain v Glass (No 2) (1985) 3 NSWLR 230
Canwest Global Communications Corporation v Treasurer of the Commonwealth of Australia [1997] FCA 1601
Air Canada v Secretary of State for Trade (No. 2) [1983] 2 AC 394
NTEU v Commonwealth (2001) 111 FCR 583
Re Queensland Nickel Management Pty Ltd and Great Barrier Reef Marine Park Authority and Others (1991) 25 ALD 160
Re Ajka Pty Ltd and Australian Fisheries Management Authority (1995) 39 ALD 445
Pollitt v The Queen (1992) 174 CLR 558
Marks v Beyfus (1890) 25 QBD 494
R v Robertson, Ex parte McAulay (1983) NTR 11
Canwest Global Corporation v Treasurer of the Commonwealth [1997] FCA 1602
Somerville v Australian Securities Commission (1995) 60 FCR 319
Malika Holdings Pty Limited v Stretton (2001) 204 CLR 290
Re MacPhee and Department of Treasury (1988) 11 AAR 166
Hartigan J, President, Australian Doctors' Fund Ltd v Commonwealth of Australia (1994) 49 FCR 478
Burmah Oil Co v Bank of England [1980] AC 1090
The Commissioner of Taxation for the Commonwealth of Australia v Dalco (1989-90) 168 CLR 614
Re Richardson and Commissioner of Taxation and Anor [2004] AATA 367
Johns v Connor and Others (1992) 107 ALR 465
Consolidated Press Holding Limited and Ors v Commissioner of Taxation and Anor (1995) 129 ALR 443
Australian National University v Burns (1982) 43 ALR 25
Lewins v Australian National University (1995) 133 ALR 452
Australian National Airlines Commission v Newman (1987) 162 CLR 466; 70 ALR 275
Hutchins v Deputy Commissioner of Taxation (1994) 123 ALR 133
Canadian Pacific Tobacco Co Limited v Stapleton (1952) 86 CLR 1

DECISION AND REASONS FOR DECISION [2004] AATA 1222

ADMINISTRATIVE APPEALS TRIBUNAL     )
  )          TT2003/10 and
TAXATION   APPEALS   DIVISION                 )          TT2003/15-17

Re HOBART CENTRAL CHILD CARE PTY LTD

Applicant

AndCOMMISSIONER OF TAXATION
Respondent

DECISION

Tribunal:                   Deputy President S A Forgie
Date:  19 November 2004
Place:  Melbourne

Decision:The Tribunal:
1.decide that the following documents were properly included on the respondent’s list of documents:
(a)the transcripts of the Australian Securities and Investment Commission’s examinations of Mrs Bronwen Watson (“transcripts”) are properly included in the respondent’s list of documents; and
(b)a report by Deloitte sent by the applicant’s solicitors to the respondent on a “without prejudice” basis was properly included in the list of documents;

2.direct that:
(a)the respondent is not required to disclose to the applicant documents 421, 423 and 424 in Part 2 of Schedule 1 of his list of documents as they are subject to legal professional privilege;
(b)the respondent may not disclose to the applicant documents 419 and 420 of Part 2 of Schedule 1 and documents 374 and 376 of Part 3 of Schedule 1 of his list of documents as they are subject to public interest immunity; and
(c)the respondent is required to disclose to the applicant all documents in his list of documents other than documents 374, 376, 419, 420. 421, 423 and 424 described above;

3.decide that when answering a summons to give evidence, Mr Richard Watson:
(a)may give evidence regarding the policy and procedure of the respondent; and
(b)will not be permitted to answer any questions regarding the applicant’s affairs within the meaning of the definition of an “officer” in s. 16(1) of the Income Tax Assessment Act 1936;

4.adjourn further consideration of whether the transcripts are inadmissible on the basis that the Tribunal’s proceedings are for the imposition of a penalty within the meaning of s. 68(3)(b) of the Australian Securities and Investment Commission Act 1989; and
5.decide I am not tainted by my being informed of the existence of the transcripts by means of the respondent’s list of documents.
S A FORGIE
Deputy President

REASONS FOR DECISION

A list of documents has been prepared by the respondent, the Commissioner of Taxation (“Commissioner”). The list is intended to include the documents that he considers relevant to the Tribunal’s review of his objection decision under the Income Tax Assessment Act 1936 (“ITA Act”) and that have not previously been made available to the applicant, Hobart Central Childcare Pty Ltd (“HCCC”). A directions hearing was held to consider his claims that he did not need to disclose the contents of some of the documents on the basis that they were subject to claims of legal professional privilege or public interest immunity. At that hearing, a number of other issues emerged until there were nine in all:

Issues (1) and (2):
The Commissioner has claimed that three of the documents on his list are exempt from disclosure to HCCC on the basis of their being subject to a claim of legal professional privilege and a further four on the basis that they are subject to a claim of public interest immunity. His claim gives rise to the first two issues. On behalf of HCCC, Mr Watson, has submitted that neither claim can be supported.
Having inspected the documents and considered the submissions, I have decided that the Commissioner has made out his claims and that the documents may be withheld from HCCC.
Issue (3):
The Commissioner has noted that public interest immunity is claimed in relation to third party information contained in a number of other documents in Parts 2 and 3 of Schedule 1 of the list of documents. He has not pressed his claims with any alacrity.
I have decided that claims of public interest immunity are not sustainable and the documents must be disclosed to HCCC.
Issues (4) and (5):
Two issues arise from Mr Watson’s submission that the Commissioner has wrongly included four documents numbered 264, 265, 266 and 267 on the list. Each is described as “… transcript of ASIC [Australian Securities and Investment Commission] interview with B Watson” and is further described by reference to its number of pages. Each is dated 15 October 1999. “B Watson” is Mrs Bronwen Watson, who was a director of HCCC. Those transcripts were given to the ATO by ASIC on certain conditions.
On behalf of HCCC, Mr Watson submitted that the Commissioner’s including them in his list of documents is in breach of ASIC’s conditions and in breach of s. 79 of the Australian Securities and Investment Commission Act 1989 (“ASIC Act”).
I have decided that the Commissioner is not in breach of either of ASIC’s conditions or of s. 79.
Issue (6):
Mr Watson submitted that the transcripts are not admissible because the proceedings in the Tribunal are for the imposition of a penalty within the meaning of s. 68(3)(b) of the ASIC Act (and see also ASIC Act, s. 76).
I have decided that resolution of this issue is premature and should only be considered if it becomes relevant for the Tribunal to have regard to the transcripts.
Issue (7):
Mr Watson also submitted that the reference to the four transcripts in the Commissioner’s list of documents meant that I was tainted by the knowledge that the transcripts existed.
I have decided that I am not tainted.
Issue (8):
Mr Watson submitted that a report sent by HCCC’s solicitors to the Commissioner on a “without prejudice” basis should not have been included on the Commissioner’s list as it was not admissible in evidence and was already in HCCC’s possession.
I have decided that the report was properly included on the Commissioner’s list.
Issue (9):
At HCCC’s request, the Tribunal issued a summons to Mr Richard Watson. Mr Richard Watson is the son of Mr Watson and Mrs Watson. On the Commissioner’s behalf, Mr Abbott of counsel submitted that Mr Richard Watson should not be asked questions regarding the general policy and procedure in the ATO. Mr Watson submitted that the evidence given by Mr Richard Watson should not be so constrained.
I have decided that Mr Richard Watson:
(a)may give evidence regarding the policy and procedure of the Commissioner as its disclosure is not restricted by s. 16 of the ITA Act; but
(b)will not be permitted to answer any questions regarding HCCC’s affairs within the meaning of the definition of “officer” in s. 16(1) of the ITA Act. That is because I am not satisfied on the evidence available to me that his doing so would be in the performance of his duties as an officer within the meaning of s. 16(2A) or that he is authorised to communicate it for the purposes of s. 16(4)(c).

BACKGROUND

HCCC has applied for review of the Commissioner’s objection decisions disallowing its objections in respect of amended assessments issued on 15 December 1997 in respect of the years of income ending 30 June 1993, 1994, 1995 and 1996. Its application has a long history in the Tribunal. Part of that history is HCCC’s wish to serve a summons on an officer of the ATO. The wording of that summons was discussed at a directions hearing held on 26 May 2004 before Senior Member Pascoe and the parties were left to attempt to agree on the wording. After they failed to reach agreement, I directed that any summons that was issued should require the officer of the ATO to whom it was directed to produce “copies of all documents, including electronic documents, relevant to matters before the Tribunal which have not previously been made available to the Applicant or its representatives”. A summons has not been issued. Instead, it was agreed that the Commissioner would produce a list of documents that he says are the relevant documents. On 16 September 2004, the Commissioner was directed to file and serve on HCCC a list that identifies those documents he claims are privileged from disclosure. He did so on 4 October 2004. A directions hearing has been held to resolve the claims of privilege.

At a directions hearing held on 26 May 2004, Senior Member Pascoe approved the issue of a summons to Mr Richard Watson “… who although employed by ATO is [a] relative and [will] give evidence as to facts. Advised applic rep. that this witness not to be asked to give evidence regarding ATO practice or policy” (document 32 on Tribunal’s file). At the same time, Senior Member Pascoe approved the issue of summonses to other persons with certain qualifications. The summons has been issued to Mr Richard Watson without mention of the parameters of the evidence that he is to give.

CONSIDERATION

Inclusion of Deloitte’s report in list of documents

Mr Watson submitted that the Commissioner’s inclusion of a “Letter enclosing Deloitte’s report” dated 24 March 1999 as item 16 in the list of documents was mischief making. It was a report that had been sent to the Commissioner by the solicitors for HCCC and for Mrs Watson on a without prejudice basis. It was a letter that was already in HCCC’s possession as well as in the T documents. As it had been provided on a without prejudice basis, it was not admissible in evidence.

On the basis of the letter from HCCC’s solicitors to the Commissioner dated 24 March 1999 (Exhibit B), I am satisfied that Deloitte’s report was provided on a without prejudice basis to the Commissioner. On the basis of its inclusion in the list of documents prepared by the Commissioner, I am satisfied that he considers that it is relevant to the matters before the Tribunal. Given that the report found its way to the Commissioner from HCCC’s solicitors, I am satisfied that it has previously been made available to HCCC or its representatives. I am not satisfied, though, that it has previously been made available to them by the Commissioner. It seems to me that the Commissioner’s including the report on the list is eminently reasonable and far from being mischief making. He has included it because it is relevant. Its admissibility in evidence is not a matter that the Commissioner was asked to consider in compiling his list of documents.

Transcripts of ASIC examination of Mrs Watson: should the Commissioner have referred to them in his list of documents?

Mr Watson referred to a letter written on behalf of the Australian Securities and Investment Commission (“ASIC”) to him on 2 November 1994 enclosing ASIC’s letter dated 5 January 1999 to Mr Watson’s solicitors. That letter advised him that a delegate of ASIC’s Chairperson had decided that the transcripts of his examination (i.e. Maxwell Clyde Watson) would enable or assist the ATO to perform or exercise its functions or powers (Exhibit A). He had made that decision under s. 127(5) of the ASIC Act and in accordance with s. 127(4). As a consequence of his decision, the delegate released the transcripts to the Commissioner but imposed conditions on the disclosure.

The conditions on the disclosure were:
“1. The information will only be used in relation to the disputed decision/s of the Commissioner of Taxation to disallow objections to amended assessments issued to Bronwen Watson and Hobart Central Child Care Pty Ltd pursuant to subsection 170(2) of the Income Tax Assessment Act and for no other purpose.
2.The information will not be voluntarily disclosed outside the ATO.
3.If the ATO intends to have statements admitted in the Administrative Appeals Tribunal (“AAT”) proceedings the ATO will ensure it complies with the requirements specified in section 79 of the ASC Law.
4.The ATO undertakes to return the transcripts (and any copies) to ASIC once the AAT proceedings are concluded.
5.In any event, the ATO undertakes to return the transcripts (and any copies) upon written request by ASIC.” (Exhibit A)

I note that the letter refers to the transcript of Mr Watson’s examination and not that of Mrs Watson. This was not noticed at the hearing but, for the sake of this decision, I have assumed that the transcripts relating to Mrs Watson’s examination were released to the ATO on the same basis.

Mr Watson stated that he had objected to ASIC’s releasing the transcripts to the ATO at all. He had relied on what he described as the “Star Chamber” nature of the examination proceedings, their unfairness and length, inadequate rest periods and the power of the examiners to run the examination as they saw fit. Through these examinations, ASIC had power to obtain information that the ATO could not otherwise have obtained. There were, therefore, strong arguments why the ATO should not be given access to information that it could not have obtained itself.

Whether or not the Commissioner and the ATO are entitled to copies of the examination depends upon the provisions of the ASIC Act. In that regard, I have had regard to s. 127 of the ASIC Act. When ASIC formulated its conditions, it did so with the ASIC Act in mind. That Act has since been repealed and the Australian Securities and Investment Commission Act 2001 (“ASIC Act 2001”) enacted in its place. Part 16 of the ASIC Act 2001 sets out the transitional provisions. Section 276 provides for the creation of equivalent rights and liabilities under the ASIC Act to those that existed before 15 July 2001 under the ASIC Act. With that in mind, my references are to the ASIC Act but they are substantively the same as their equivalent sections appearing in the ASIC Act 2001.

In general terms, ASIC must take all reasonable measures to protect certain information from unauthorised use or disclosure. Broadly described, that information is information given to it in confidence or in connection with the performance of its functions or the exercise of its powers under the corporations legislation or that is protected information (ASIC Act, s. 127(1)). There are several qualifications to ASIC’s obligation to protect that information. Again in general terms, s. 127(2) provides that “…disclosure of information as required or permitted by a law of the Commonwealth or a prescribed law of a State or internal Territory is taken to be authorised use and disclosure of the information.” More specifically, s. 127(4)(a), provides:
“Where the Chairperson is satisfied that particular information:
(a)will enable or assist an agency, being … or any other agency within the meaning of the Freedom of Information Act 1982, to perform or exercise any of the agency's functions or powers; …”

The Chairperson may impose conditions, as he has done in this case, that must be complied with regarding information disclosed under s. 127(4) (ASIC Act, s. 127(4A) and (5)).

Having regard to the provisions of s. 127, I am satisfied for the purpose of this matter that ASIC’s release of the transcripts of Mrs Watson’s examination appears to have been properly made. The Commissioner is a person holding or performing the duties of an office established by an enactment and so a prescribed authority and, in turn, an agency for the purposes of the Freedom of Information Act 1982 (“FOI Act”) (ASIC Act, s. 127, FOI Act, s. 4(1)). His functions or powers include the general administration of the ITA Act (ITA Act, s. 8). The Taxation Administration Act 1953 (“TA Act”) provides for the administration of the ITA Act as well as other legislation relating to taxation (TA Act, long title). It provides for the review by the Tribunal of certain decisions made by the Commissioner. Consequently, the Commissioner’s functions must include his taking all actions and making all decisions that are required of a decision-maker whose decision is under review in the Tribunal. His functions would include, for example, gathering material that is relevant to the resolution of the issues raised by review of his decision, considering and negotiating a settlement and taking part in any proceeding in the Tribunal.

The Chairperson has permitted the Commissioner to use the transcripts in relation to the objection decisions under review in this case. On its face, therefore, disclosure “will enable or assist … [the Commissioner] to perform or exercise any of the … [his] functions or powers …”. I have no basis for querying whether the Chairperson’s delegate made the decision properly in law and fact. Even if I were minded to explore it, I would have to be careful not to stray beyond the boundaries within which the Tribunal may exercise its jurisdiction.

The disclosure in the list of documents of the existence of the transcripts of Mrs Watson’s examination is consistent with the conditions that ASIC has placed on their disclosure. In particular, the transcripts “… will only be used in relation to the disputed decisions of the Commissioner of Taxation to disallow objections to amended assessments issued to Bronwen Watson and Hobart Central Child Care Pty Ltd …”. The document setting out the conditions is not a piece of delegated legislation and so its interpretation should not be confined by the rules of statutory interpretation. Even so, it is a carefully drafted document and some assistance can be obtained from cases that have considered the words it uses as well as from s. 127(4)(a) of the ASIC Act, which authorises the Chairperson’s decision. In particular, that assistance can be gained from cases that have considered the phrase “in relation to”. Three were summarised by Conti J in McNeil v Commissioner of Taxation (2004) 206 ALR 527:
“[55] …I was referred by the applicant to three authorities
which have considered the meaning of those words [“in relation to”] in other statutory contexts. The first was Workers’ Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642; 81 ALR 260, where in the joint judgment of Deane, Dawson and Toohey JJ at CLR 653–4; ALR 267, it was said that the expression in respect of (and similarly in relation to) has a wide meaning, and ‘... gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends’. The second was Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) (1996) 69 FCR 531 at 547;139 ALR 527 at 542; 21 ACSR 474 at 490, where Lehane J (with whose reasons for judgment Lockhart and Foster JJ agreed) described the import of the words ‘in relation to’ in s 742(2) of the Corporations Law as ‘very much a matter of impression’, and found that an order dealing with the proceeds of the sale of certain shares in controversy, such as by vesting them in the Australian Securities
Commission, or by requiring payment of such proceeds into court, was not an
order ‘in relation to’ shares within that subsection. The third was Jeffrey James Prebble Pty Ltd v FCT (2003) ATC 4770, where Hill and Hely JJ observed at 4777, in the context of s 82AAA(i) of the 1936 Tax Act, as follows:
27. We find little assistance from the numerous cases which have concerned the word ‘in relation to’ for the meaning of the expression must be found from the context in which it appears. To say that the words require ‘a relationship between two subject matters’ will usually be true. …” (at 65-66; [55])

In view of these authorities, I have looked to whether there is a relationship between the Commissioner’s including the documents in the list and his objection decisions. As the Commissioner’s objection decisions may be reviewed by the Tribunal, his functions or powers must include his undertaking all steps necessary for the review of the objection decisions. Those steps must include his complying with the Tribunal’s directions and with what is required of him to take the matter forward so that it may be resolved. The preparation of a list of documents and of those which are claimed to be exempt from disclosure is one of those steps. Therefore, I have concluded that the Commissioner has used the transcripts in relation to the objection decisions. He has complied with the first of the conditions imposed by the Chairperson of ASIC in releasing the transcripts to him.

Mr Watson also submitted that the Commissioner’s reference to the four transcripts was in breach of s. 79 of the ASIC Act and so in breach of the conditions on which the transcripts were released to the ATO. Section 79(1) of the ASIC Act provides that:
“A party (in this section called the adducing party) to a proceeding may, not less than 14 days before the first day of the hearing of the proceeding, give to another party to the proceeding written notice that the adducing party:
(a)will apply to have admitted in evidence in the proceeding specified statements made at an examination; and
(b)for that purpose, will apply to have evidence of those statements admitted in the proceeding.”

The notice must comply with certain requirements (ASIC Act, s. 79(2)). A “proceeding” includes a proceeding or hearing of an administrative nature before a tribunal (ASIC Act, s. 5(1)). Consequently, it applies to a hearing or proceeding in this Tribunal.

If a notice has been given under s. 79(1), the other party to the proceeding may object to those statements’ being admitted in evidence. If that is the case, the other party must give notice of the objections to the adducing party and generally must do so within 14 days after receiving the notice from the adducing party (ASIC Act, ss. 79(3) and (4)). Unless notice is given of the objections, the other party will not generally be able to object to the statements’ being admitted in evidence although a court or tribunal may give leave to do so (ASIC Act, s. 79(7)). If given notice by the other party, the adducing party is then required to give notice to the court or tribunal which determines the objections (ASIC Act, ss. 79(5) and (6)).

If the Commissioner wishes to ask the Tribunal to admit the transcripts in evidence, he will have had to comply with the procedures in s. 79. Does his including them in a list of documents equate to his “applying to have them admitted in evidence” within the meaning of s. 79 of the ASIC Act? The words “admitted in evidence” bring to mind the rules of evidence. Although there are exceptions, the general rule is that “… evidence that is relevant in a proceeding is admissible in the proceeding” (Evidence Act 1995, s. 56). It would follow that an application to have documents admitted in evidence would be based on an assertion that they are relevant.

The Tribunal, of course, is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit (Administrative Appeals Tribunal Act 1975 (“AAT Act”), s. 33(1)(c)). In theory, the manner in which it informs itself is limited only by its need to observe the rules of procedural fairness. In practice, however, the Tribunal’s use of its inquisitorial powers is fairly limited and the Tribunal relies on material produced by the parties (see my discussion in Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority [2004] AATA 704 at [128]-[131]). Whether produced as a result of the exercise of its own powers or produced by the parties, the Tribunal is limited to the material to which it may have regard by the requirement that the material must be logically probative. Provided it is logically probative, it may have regard to it regardless of whether that material would be legally admissible in a court (Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33 at 42 per Brennan J, President). As Diplock LJ said in R v Deputy Industrial Injuries Commissioner; Ex parte Moore [1965] 1 QB 456 at 488, “If it is capable of having any probative value, the weight to be attached to it is a matter for the person to whom Parliament has entrusted the responsibility of deciding the issue.” (see also Re Pochi at 41-42)

What is and is not logically probative is determined by relevance. The question becomes: is the material relevant to an issue or to issues that the Tribunal must resolve in order to review the merits of an administrative decision and to reach the correct or preferable decision (Drake v Minister for Immigration and Ethnic (1979) 24 ALR 577, per Bowen CJ and Deane J at page 589)? The Tribunal’s procedures are directed to ensuring that the parties bring all relevant material, documentary and otherwise, to the Tribunal. The parties are expected to lodge that material before any hearing. That procedure facilitates settlement and also means that the parties are usually aware of all relevant evidence before any hearing takes place. In many hearings, it may be that the parties and the Tribunal focus only on some of the material that has been lodged. Certain documents may be tendered in evidence at the hearing. If the Tribunal considers it relevant, it is formally admitted and given an exhibit number. Sometimes, the parties refer to certain documents during the hearing but do not formally tender them in evidence and the Tribunal does not formally admit them in evidence even though it considers them as relevant and has regard to them in reaching a decision. Whether a formal or less formal approach is taken, it seems to me that the material can be said to have been “admitted in evidence” as that concept is used in s. 79 of the ASIC Act. There may be other material to which no reference is made during the hearing but which has been lodged on the Tribunal’s file. Whether that has been admitted in evidence is another question and not one I need to answer in this case.

Given the various ways in which material may come to the Tribunal and the various ways in which the Tribunal may deal with it, what amounts to an application to have them admitted in evidence in a proceeding within the meaning of s. 79 of the ASIC Act? Tendering the material at a hearing would certainly amount to such an application. That would be so regardless of whether the Tribunal ultimately decides to formally admit them and mark them with an exhibit number or not. In some circumstances, it may be arguable that mere lodgement of material on the Tribunal’s file is a request, implicit or otherwise, that the Tribunal have regard to it. So, for example, if the material were lodged in response to a direction by the Tribunal to lodge and serve all material on which the parties rely, it is arguable that lodgement equates with an implicit application to the Tribunal that it have regard to that material in any relevant proceeding. The same could be said of the material lodged pursuant to s. 37 of the AAT Act (i.e. the T documents) for they comprise the material that the decision-maker considers relevant to the Tribunal’s review of the decision.

In this case, the documents have not been lodged in any way. They have been described in the broadest terms in a list of documents in response to an agreement brokered by the Tribunal but have not been lodged. Their presence on the list indicates that the Commissioner considers that they are relevant to the review. It does not indicate that he either will, or will not, want to ask the Tribunal to have regard to them at any proceeding whether or not he formally applies to have them admitted in evidence. Their presence on the list does not indicate that the Tribunal will require their production or even that, when he sees them, Mr Wallace will want them lodged in the Tribunal. The Tribunal will need to consider whether it considers them relevant. Value judgments as to the weight that could be given to each of the documents on the list, either alone or when considered with other evidence, will need to be made.

In the circumstances of this case, it could not yet be said that there has been any application to have any regard had to the documents on the list let alone any application to admit them in evidence. Consequently, I have decided that the Commissioner was not obliged to follow the procedure in s. 79 of the ASIC Act before including the transcripts in the list of documents. The Commissioner has not been in breach of any of the Chairperson’s conditions in referring to them in the list.

Transcripts of ASIC examination of Mrs Watson: has reference to them on the Commissioner’s list tainted the Tribunal?

If the Commissioner considered the transcripts relevant to the matters before the Tribunal, he was obliged to include them in his list. Their presence on the list tells Mr Watson and the Tribunal that he considers them relevant and no more.
As I have said, value judgments as to any weight that could be given to each of the documents on the list, either alone or when considered with other evidence, will need to be made by the Tribunal before that is done. That will need to be done by the Commissioner and by Mr Watson. If the Tribunal eventually sees the transcripts and has regard to them, it too will need to make that judgment. In the meantime, the Tribunal and, more particularly in this case, I have not seen the transcripts. I have no knowledge of what is in them or even the broad subjects canvassed during Mrs Watson’s examination by ASIC. I do not consider that I have been in any way tainted by being made aware, through the medium of the Commissioner’s list, that there has been such an examination and that there are transcripts of it.

Transcripts of ASIC examination of Mrs Watson: are they admissible in evidence?

Relying on s. 76 of the ASIC Act, Mr Watson submitted that the Commissioner’s objection decisions effectively impose a penalty. As the Tribunal is reviewing those decisions, it is a proceeding for the imposition of a penalty. His submission is based on s. 76(1) of the ASIC Act. Subject to three exceptions, s. 76(1) provides that a statement made by a person at an examination is admissible in evidence against that person. One of the exceptions is that the statement is not relevant to the proceeding and the person objects to its admission (s. 76(1)(b)). Another is that the statement is not admissible because of the provisions of s. 68(3) (s. 76(1)(a)). The general effect of s. 68(1) is that a person being examined by ASIC cannot refuse to give information by claiming the privilege against self-incrimination. There are exceptions. One applies to a proceeding for an imposition of a penalty provided that is not a proceeding in respect of the falsity of the statement. The statement is not admissible in evidence against the person who made the statement in a proceeding for the imposition of a penalty (s. 68(3)(b)).

This exception raises issues as to what is meant by “a proceeding for an imposition of a penalty”. That has been considered by the Full Court of the Federal Court in Australian Securities Commission v Kippe (1996) 67 FCR 499 (von Doussa, Cooper and Tamberlin JJ) in a different context. This is not the appropriate time at which to consider whether review of the Commissioner’s objection decisions in this case may be described as a proceeding for the imposition of a penalty. The Commissioner has not yet decided whether he will produce the transcripts as evidence of the statements made by Mrs Watson during her examination. The Tribunal has not given any consideration to whether it will ask that they be produced. Only Mr Watson has decided that they should not be produced. Until there is a proposal that the Tribunal have regard to the transcripts, I do not intend to consider whether I should have regard to them. That is the time for submissions to be made by both parties. Those submissions would need to address issues raised by s. 68(3) and, if they are not excluded by that section, issues of relevance.

Legal professional privilege: the submissions

The Commissioner has claimed legal professional privilege in respect of documents numbered 421, 423 and 424. They are described respectively as a letter from the Commissioner instructing his solicitor, an advice from counsel and the Commissioner’s response to the advice from counsel. They are shown in Part 2 of Schedule 1 of the list of documents that has been prepared.

Mr Watson has submitted that a claim for legal professional privilege should be considered differently in the Tribunal from the manner in which it is considered in a court. The Tribunal should not allow the Commissioner to use a claim for legal professional privilege as a shield to prevent scrutiny of his actions when there is evidence of the Commissioner’s conduct that is contrary to all accepted norms and ethics; it has not acted as a model litigant as is required of the Commonwealth. Equity requires that an applicant come to it with clean hands. A person claiming legal professional privilege should come in the same way.

Legal professional privilege: what is it and when may it be claimed?

As Mr Abbott submitted, legal professional privilege is a rule of substantive law. A person may use it to:
“…resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.” (The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 552 [9])

The reason for the rule was explained by Advocate General Sir Gordon Glynn:
“Whether it is described as the right of the client or the duty of the lawyer, this principle has nothing to do with the protection or privilege of the lawyer. It springs essentially from the basic need of a man in a civilised society to be able to turn to his lawyer for advice and help, and if the proceedings begin, for representation; it springs no less from the advantages to a society which evolves complex law reaching into all the business affairs of persons, real and legal, that they should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.” (AM & S Europe Ltd v Commission of the European Communities [1983] QB 878; 1 All ER 705

The party claiming legal professional privilege must establish it on the balance of probabilities and may do so:
“… by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by reference to any verbal formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.” (Grant v Downs (1976) 135 CLR 674 per Stephen, Mason and Murphy JJ at 689)

As a rule of substantive law, it has application beyond legal proceedings (Rich v Australian Securities and Investments Commission [2004] HCA 42 at [24] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). It is not a rule that permits a court or tribunal to weigh a person’s interest in resisting the production of the information or documents either against another’s interest in seeing that information or those documents or against a background of the behaviour of the person claiming legal professional privilege. If information or a document is subject to legal professional privilege, a court or tribunal cannot order its production. The person claiming it may waive the privilege, either intentionally or by implication (Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ and at 493 per Deane J). As Gibbs CJ said:
“… where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production.” (at 481)

It is the use that is made of the document by the person who is claiming legal professional privilege and notions of fairness that are relevant in deciding waiver. Except in one limited area, the authorities do not pay any regard to the person’s behaviour with regard to the other party in a proceeding or with regard to other matters. That limited exception arises in relation to communications in furtherance of a fraud or crime. Where the communications are of that nature, they do not attract legal professional privilege in the first place. It is not a case of legal professional privilege’s being waived (Commissioner of the Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 556 per McHugh J).

Legal professional privilege may only be abrogated by the clear words of a statute or by necessary implication (Daniels at 553 [11] per Gleeson CJ, Gaudron, Gummow and Hayne JJ).

Legal professional privilege: may it be claimed in the Tribunal?

Has legal professional privilege been abrogated in relation to the review of the objection decisions in the Tribunal? There is nothing in the ITA Act or in the TA Act that is relevant. What of the AAT Act? It provides three avenues for the production of documents. Section 37 is travelled in almost every case. It relates to the production of the T documents (AAT Act, ss. 37(1) – (1D)). It also relates to the lodgement of other documents that the Tribunal may consider relevant to the Tribunal’s review of a decision and that it may require to be lodged according to a written notice served on a person, who must be the decision-maker when the whole of the section is read (AAT Act, s. 37(2) and see Re Lindsey and Australian Postal Commission (1989) 18 ALD 340 at 344 (Gray J, Senior Member Dwyer and Prof. Webster, Member). Section 37(3) provides that s. 37 “… has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.” This is a clear abrogation of any rule of law relating to privilege and so of legal professional privilege. The Tribunal has reached the same conclusion in Re McMaugh and Australian Telecommunications Commission (1991) 22 ALD 393 at 398-399 (Deputy President Johnston).

The effect of s. 37(1AG) is that the decision-maker must give to each other party in a proceeding a copy of the documents lodged in the Tribunal under s. 37(1) or under s. 37 (1AB), which relates to particular decisions or classes of decisions made the subject of specific directions by the President. As legal professional privilege has been abrogated by s. 37(3), the result is that the documents must be given to each other party to the proceeding regardless of any claim for legal professional privilege.

When it comes to s. 37(2), there is no provision that plays the role that s. 37(1AG) plays for s. 37(1). That is to say, there is no provision stating that the decision-maker who is required to produce documents under that provision is also required to give a copy of them to each other party to the proceeding. It follows that, although s. 37(3) means that the decision-maker must produce to the Tribunal all documents described in the Tribunal’s notice issued under s. 37(2), it is not obliged to give a copy of those same documents to the other parties. Whether or not those copies are given to other parties must be a matter for the Tribunal to decide. Its power to do so must be drawn not from s. 37 but from the more general powers of s. 33 to determine its procedures. For the reasons I give below, I consider that it cannot exercise its powers so as to override any claim for legal professional privilege.

That brings me to the second avenue in s. 33 of the AAT Act. Section 33(2A)(a) provides that the Tribunal may require any person who is a party to the proceeding to provide further information in relation to the proceeding. There is no express or implied provision in the section that the Tribunal may override a claim for privilege. This accords with the decision reached in Re Lindsey at 344-5.

Section 40 of the AAT Act is concerned with various powers of the Tribunal and provides the third avenue for the production of documents. Among those is its power to issue a summons to require the production of books, documents or things (AAT Act, ss. 40(1A)-(1E)). Like s. 33, it does not contain any express or implied provision to do away with any privilege. Certainly, s. 40(1D) provides that a presidential or senior member may give a party to the proceeding leave to inspect a document produced under a summons. Unlike s. 37(3), however, there is no express provision that the documents must be produced regardless of any claim of privilege. It is unnecessary to read such a qualification into the section in order to make sense of it. Section 40(1D) does not oblige the presidential or senior member to give a party leave to inspect the summonsed documents. Instead, it gives a discretion to give that leave. The discretion must be limited by the AAT Act and, in the absence of any express or implied abrogation of the substantive law, by any rule of that substantive law. Legal professional privilege is a rule of that substantive law and it must prevail in any interpretation of s. 40.

My examination of the three avenues for the production of documents under the AAT Act leads me to conclude that whether or not disclosure of documents may be resisted on the basis of their being subject to legal professional privilege depends on the basis on which the documents would be produced to the Tribunal were they produced. As no summons has been issued, I do not consider that they could be said to be produced under the auspices of s. 40 of the AAT Act. They would not have been produced in response to the notice of decision sent to the Commissioner under s. 29 of the AAT Act. Those documents were filed long ago. Therefore, I would not regard them as being produced under s. 37(1) if and when they were produced. If they were to be produced under s. 37(2), they would be produced in response to a notice served on the Commissioner by the Tribunal stating that it considered that particular documents or documents in a particular class might be relevant. The Tribunal has not served a notice of that kind. Having regard to the history of the matter, I consider that the documents would be produced as a consequence of the Tribunal’s direction made under its s. 33 powers. For the reasons I have given, their production could not be required under that section if they were subject to a claim for legal professional privilege that could be made out.

Legal professional privilege: are documents 421, 423 and 424 exempt from disclosure?

I have had regard to the descriptions of the three documents given in the list of documents and, for the purpose of resolving the claim for privilege, have also examined each of them. I am satisfied that each document has been accurately described on the list of documents. Having regard to their content, I am also satisfied that each is a communication between the Commissioner, or one of his officers in the ATO, and his legal adviser or advisers for the dominant purpose of the Commissioner’s seeking or being provided with legal advice. None of the matters raised by Mr Watson as to the Commissioner’s conduct suggest to me that these communications were in the furtherance of any fraud or crime. Nothing on their face suggests that. For the reasons I have already given, I do not consider that any other actions by the Commissioner are relevant in considering the matter and do not make any findings regarding Mr Watson’s allegations about them.

I am satisfied, therefore, that the claim for legal professional privilege may be properly made in respect of them. Furthermore, I am satisfied that the Commissioner has not waived the privilege either expressly or impliedly. Documents 421, 423 and 424, therefore, are exempt from disclosure on the basis of the Commissioner’s claim for legal professional privilege.

Public interest immunity: the submissions

The Commissioner has claimed public interest immunity in respect of documents numbered 419 and 420 from Part 2 of Schedule 1 of the list of documents and 374 and 376 from Part 3 of Schedule 1. They are described as:
374 Case progress report for audit manager – third party
376 Final report on audit findings – third party
419Third party information
420Third party information

In each case, Mr Abbott submitted that production of those documents would reveal the identity of the Commissioner’s informants.

Mr Abbott submitted that there is a clear and very strong public interest in maintaining the confidentiality of information provided to the Commissioner on a confidential basis. That is particularly so where information has led to an audit and to amended assessments’ being issued. Informants are encouraged to give the Commissioner confidential information and are comforted in the knowledge that their identities will not be revealed in proceedings in a court or tribunal. No informant should be subject to the risk of harassment, persecution or any other prejudice that may flow from the revelation of that informant’s identity. In this case, Mr Abbott submitted, harassment, persecution or prejudice was likely to flow if an informant’s identity were disclosed to HCCC or its representative.

Mr Watson submitted that the Commissioner should not be permitted to claim public interest immunity in relation to the documents. He again relied on his assertion that the Commissioner had not come to the Tribunal with clean hands and had not acted as a model litigant. The public should have confidence that the Commissioner is collecting taxation properly and that he is supervised. There is a strong public interest in ensuring that is so. The Commissioner’s description of the documents for which public interest immunity is claimed are not described in terms helpful to him, Mr Watson submitted.

The Tribunal should know the evidence that is provided by an informer. If the identity of the informer has already been disclosed in documents to which HCCC has been given access (as it has been on two occasions Mr Watson submitted) the remainder of the document should not be suppressed. On a file note headed “Information Received” and dated 7 February 1997, a box noted that anonymity of the information was required but, Mr Watson submitted that the document released under the FOI Act had revealed the telephone number of the informant (Exhibit C). Mr Watson observed that this was a document that was not recorded in the list of documents although he had received it under the FOI Act. Even though it is aware of the identity of the informer by looking up the telephone number in the book, HCCC has already demonstrated that it is mature and responsible and will not take any steps against those informers.

On the other hand, Mr Watson submitted, the Commissioner has demonstrated that he cares little about informers. People should know that if they inform on another to the Commissioner, the Commissioner will not take any great steps to preserve their confidentiality. He should not induce people to inform on others if confidentiality cannot be maintained. It is wrong that informers think that their confidentiality will be maintained when the Commissioner will not maintain it. It is especially important that the Commissioner maintain confidentiality in a small place such as Hobart. It is in the public interest that people know that their anonymity will not be protected if they inform on others.

The Commissioner has not produced any evidence as to any consequences that would flow from disclosure of the documents let alone whether those consequences would be grave. There is no evidence that the Commissioner could not do his job without informers. It is an action in futility to attempt to suppress information already provided to HCCC by the Commissioner.

Mr Watson submitted that to remove the names of confidential sources of information negatives HCCC’s opportunity to see who did what and when. He had no quarrel with suppressing the names of those people in organisations but HCCC needed to know the names of individuals so that it could judge the quality of the information that was being given.

Public interest immunity: what is it and when may it be claimed?

The concept of public interest immunity was explained by Gibbs ACJ in Sankey v Whitlam (1978) 142 CLR 1:
“The general rule is that the court will not order the production of a document, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose it. However the public interest has two aspects which may conflict. These were described by Lord Reid in Conway v Rimmer [1968] AC 919 at 940 as follows:
‘There is the public interest that harm shall not be done to the nation or the public service by disclosure of certain documents, and there is the public interest that the administration of justice shall not be frustrated by the withholding of documents which must be produced if justice is to be done.’
It is in all cases the duty of the court, and not the privilege of the executive government, to decide whether a document will be produced or may be withheld. The court must decide which aspect of the public interest predominates, or in other words whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence. In some cases, therefore, the court must weigh the one competing aspect of public interest against the other, and decide where the balance lies. In other cases, however, as Lord Reid said in Conway v Rimmer [at 940], ‘the nature of the injury which would or might be done to the nation or the public service is of so grave a character that no other interest, public or private, can be allowed to prevail over it.’ In such cases once the court has decided that ‘to order production of the document in evidence would put the interest of the state in jeopardy’, it must decline to order production.” (at 38‑39)

An objection to the production of a document on the ground of public interest immunity may be made either on the basis of its contents or on the basis of the class of document to which it belongs regardless of its contents. In either case, the same question will need to be resolved: is it “…really necessary for the proper functioning of the public service to withhold documents of that class from production.” (Sankey v Whitlam at 39, per Gibbs ACJ). Even when a document is claimed to belong to a class that has received protection in the past, “The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest. In a particular case the court must balance the general desirability that documents of that kind should not be disclosed against the need to produce them in the interests of justice.” (Sankey v Whitlam at 43 per Gibbs ACJ and see also Stephen J at 60 and Mason J at 96).

The notion of justice and what is in its interests require a consideration of the general principle that the course of justice should not be impeded but also a consideration of what the circumstances of a particular case require (see Sankey v Whitlam per Stephen J at 56 and 62). The “Relevant aspects of the public interest are not confined to strict and static classes” (per Stephen J at 60). Whether those classes may be extended to take in an aspect quite unconnected with the affairs of central government as Stephen J appears on the surface to have suggested is a matter that has not gained unequivocal acceptance (see e.g. R v Young [1999] NSWCCA 166 (Spigelman CJ, Abadee, James and Barr JJ; Beazley JA dissenting) at [53]-[63] per Spigelman CJ [218]-[223] per Abadee and Barr JJ).

Among the classes that have been accepted is the information provided by a police informer. As Tippin J said in The Queen v Strawbridge [2002] NZCA 332 (Gault P, Tipping and McGrath JJ):
“In Rodgers v Secretary of State for the Home Department [1973] AC 388, 407; [1972] 2 All ER 1057, 1067 Lord Simon observed that sources of police information are a judicially recognised class of evidence excluded on the ground of public policy, unless the production is required to establish innocence in a criminal trial. Relevant authorities cited were R v Hardy (1794) 24 State Tr 199; Hennessy v Wright (1888) 21 QBD 509; and the influential case of Marks v Beyfus (1890) 25 QBD 494.” (at [9])

The rationale for the rule was explained by Lord Diplock in D v National Society for the Prevention of Cruelty to Children [1978] AC 171:

“If their identity were liable to be disclosed in a court of law, these sources of information would dry up and the police would be hindered in their duty of preventing and detecting crime. So the public interest in preserving the anonymity of police informers had to be weighed against the public interest that information which might assist a judicial tribunal to ascertain facts relevant to an issue upon which it is required to adjudicate should be withheld from that tribunal. By the uniform practice of the judges which by the time of Marks v Beyfus 25 QBD 494 had already hardened into a rule of law, the balance has fallen upon the side of non-disclosure except where upon the trial of a defendant for a criminal offence disclosure of the identity of the informer could help to show that the defendant was innocent of the offence. In that case, and in that case only, the balance falls upon the side of disclosure.” (at 218).

Similar sentiments have been expressed in Australia by McHugh J when he was a member of the New South Wales Court of Appeal:
“Until the High Court decides to the contrary, however, I think that the courts in this State should continue to apply the rule that no question of weighing competing public interests arises when a claim is made that the name of a police informer should be disclosed. The rule is absolute and is relaxed only ‘where upon the trial of a defendant for a criminal offence disclosure of the identity of the informer could help to show that the defendant was innocent of the offence'. I have stated the exception in the language of Lord Diplock in D v National Society for the Prevention of Cruelty to Children (at 218).” (Cain v Glass(No 2) (1985) 3 NSWLR 230 at 248)

Hill J considered a public interest immunity claim in a civil context in Canwest Global Communications Corporation v Treasurer of the Commonwealth of Australia [1997] FCA 1601 (10 July 1997):
“There is no doubt that there is a public interest in an investigatory agency, such as the ABA [Australian Broadcasting Authority], receiving confidential information from informants on the basis that the name of the informant and the information to the extent that it might identify that informant, not be revealed. Many cases have pointed to the significance and confidentiality of informants not merely in the area of criminal investigations, where the significance is obvious, but also in civil matters involving bodies, such as the Corporate Affairs Commission, the Trade Practices Commission or similar bodies, having an investigatory function. Indeed, the Commissioner of Taxation could probably not function without information received from informants.”

His Honour referred to authorities in both the criminal and civil jurisdictions and concluded:
“… Although it is clear that there is a public interest in ensuring that the name of informants not be disclosed which might indirectly reveal that name [of an informant], the public interest immunity is not absolute nor is it suggested that it is. The true principle, as the cases make clear, is that the Court must balance against the public interest … the interest that justice be done in litigation, particularly what harm would be done by the failure on the part of the authority in the present case, to produce the documents and whether the administration of justice would be frustrated or impaired if the documents were in fact withheld.” (D v National Society for the Prevention of Cruelty to Children at 219A-C, F and see also at 229-230 per Lord Hailsham LC and 241F per Lord Simon of Glaisdale).

A claim of public interest immunity may be made by the Commonwealth or State or a party to a proceeding. Even when no claim is made, a court may raise the issue itself (Sankey v Whitlam at 58-9 per Stephen J). It may be “… supported by whatever material may be thought appropriate to the occasion …” but in matters concerning “… defence secrets, matters of diplomacy or affairs of government at the highest level, it will often appear readily enough that the balance of public interest is against disclosure” (at 58). The fact that a claim has been made does not determine the matter. It is for the court to determine “… how best the public interest may be served, how least it will be injured.” (at 59 and see per Gibbs ACJ at 38-39). Once a court has decided that there is a public interest that is worthy of protection, it may not be waived (Air Canada v Secretary of State for Trade (No. 2) [1983] 2 AC 394 at 436). Moreover, “the rule which permits secondary evidence of a privileged document to be adduced is inapplicable to documents which are the subject of a claim for public interest immunity” (NTEU v Commonwealth (2001) 111 FCR 583 per Weinberg J at 595[48]).

Public interest immunity: may it be claimed in the Tribunal?

Unlike legal professional privilege, no specific mention is made of public interest immunity in the AAT Act. Mention is made, though, of the public interest. That appears in s. 36 of the AAT Act. That section applies when the Attorney-General certifies that the disclosure of specified information would be contrary to the public interest because it would either:
prejudice the security, defence or international relations of Australia or involve the disclosure of deliberations or decisions of the Cabinet or a Cabinet Committee (AAT Act, s. 36(1)(a) and (b)); or
“for any other reason specified in the certificate that could form the basis for a claim by the Crown in right of the Commonwealth in a judicial proceeding that the information or the matter contained in the document should not be disclosed …” (AAT Act, s. 36(1)(c)).

If the Tribunal requires disclosure of the specified information, it must be disclosed to it (AAT Act, s. 36(2)). The effect of ss. 36(2) is that the Tribunal may not under any circumstances disclose information of the type certified as meeting the description in ss. 36(1)(a) and (b). It may disclose information coming within s. 36(1)(c) to all or some of the parties but only after it has decided that it should be disclosed (AAT Act, s. 36(3)). In reaching that decision, it must:
“… take as the basis of its consideration the principle that it is desirable in the interest of securing the effective performance of the functions of the Tribunal that the parties to a proceeding should be made aware of all relevant matters but shall pay due regard to any reason specified by the Attorney-General in the certificate as a reason why the disclosure of the information or of the matter contained in the document, as the case may be, would be contrary to the public interest.” (AAT Act, s. 36(4))

A certificate issued by a State Attorney-General has a similar effect AAT Act, s. 36B). Where the Commonwealth or a State Attorney-General informs the Tribunal that a person’s answering a question would be contrary to the public interest for a reason given in s. 36(1), for all practical purposes, the person is excused from answering the question unless the reason specified by the Attorney-General is one within s. 36(1)(c) and the Tribunal decides that answering it would not be contrary to the public interest (AAT Act, ss. 36A(2)(b) and 36C(2)(b)). A decision to disclose information or to require a question to be answered may only be made by a presidential member who is a Judge of the Federal Court of Australia (AAT Act, s. 36D(3)).

Are ss. 36 to 36D intended to be a codification of how the Tribunal is to deal with a claim for public interest immunity? May it only be claimed by an Attorney-General’s issuing a certificate? Section 36D(6) could suggest that for it provides that:
“Sections 36 and 36B exclude the operation of any rules of law that relate to the public interest and would otherwise apply in relation to the disclosure of information, or of matter contained in documents, in proceedings before the Tribunal.”

Gray J said of this section:
“It is plain from s 36D(6) that s 36B is intended to operate as a code, whenever an Attorney-General of a state certifies in terms of subs (1). Any common law rule is specifically excluded by s 36D(3)-(6).” (Re Queensland Nickel Management Pty Ltd and Great Barrier Reef Marine Park Authority and Others (1991) 25 ALD 160 at 164)

It would seem that his Honour meant that s. 36B (or s. 36 in this case) is intended to operate as a code only when a certificate has been issued rather than that it operates as a code generally. Deputy President McMahon looked at s. 36D(6) quite differently. He thought it quite possible that it always constituted a code and had “… the effect of displacing the operation of the common law doctrine of public interest immunity in proceedings in this tribunal” but did not have to decide the point (Re Ajka Pty Ltd and Australian Fisheries Management Authority (1995) 39 ALD 445 at 448).

There may be an inconsistency between Re Queensland Nickel Management and Re Ajka. I would not need to resolve any inconsistency if public interest immunity does not constitute a “rule of law”. If it constitutes a rule of evidence, for example, it is not excluded by s. 36D(6) whatever the scope of that provision may be.

What is a “rule of law”? It may be described as:
“A legal principle, of general application, sanctioned by the recognition of authorities, and usually expressed in the form of a maxim or logical proposition. Called a ‘rule,’ because in doubtful or unforeseen cases it is a guide or norm for their decision. …” (Black’s Law Dictionary, 6^th edition, 1990)

The AAT Act clearly distinguishes between rules of law and rules of evidence for reference is made in s. 33(1)(c) to “rules of evidence”. “Rules of evidence” have been described as:
“Rules of court which govern the admissibility of evidence at trials and hearings …” (ibid)

Using the expression “law of evidence”, Brennan J said:

“The law of evidence, though adjectival, is the working tool which a trial judge must keep constantly at hand and the principles of the law of evidence are, so to speak, the ground on which the dynamics of a trial, especially a criminal trial, are played out.” (Pollitt v The Queen (1992) 174 CLR 558 at 573 per Brennan J)

A consequence of the difference between a rule of substantive law and a rule of evidence was explained by the majority in Daniels in the context of legal professional privilege:
“ Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection … and the giving of evidence in judicial proceedings … Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures … Thus, for example, it was held in Baker v Campbell [(1983) 153 CLR 52], that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant under s 10 of the Crimes Act 1914 (Cth) …” (at 552, [10] per Gleeson CJ, Gaudron, Gummow and Hayne JJ)

That is a consequence of the difference between the two but where is the boundary delineating the difference between them? In view of the passage from Brennan J in Pollitt, it is arguable that the rules of evidence, though adjectival, have in fact become a sub-set of the general law rather than simply rules. If that is the case, public interest immunity is a rule of law and so would be excluded by s. 36D(6). In case that be incorrect, I have also considered the matter on the basis that there remains a distinction between rules of law and rules of evidence.

I will look first at the situation when the claim for public interest immunity is based on the information’s having been given by a confidential source to the police. Lord Esher MR in Marks v Beyfus (1890) 25 QBD 494 said of the rule:
“this rule … was founded on grounds of public policy ... I do not say it is a rule which can never be departed from; if upon the trial of a prisoner the judge should be of opinion that the disclosure of the name of the informant is necessary or right in order to shew the prisoner's innocence, then one public policy is in conflict with another public policy, and that which says that an innocent man is not to be condemned when his innocence can be proved is the policy that must prevail. But except in that case, this rule of public policy is not a matter of discretion; it is a rule of law ...” (at 498 and see also R v Robertson, Ex parte McAulay (1983) NTR 11 at 21)

By way of contrast, the authorities do not point to public policy’s dictating the same result with the same exception in every case when an informant approaches an investigatory body. Instead, they suggest that the competing public interest in maintaining information’s confidentiality must be weighed against the public interest in disclosing that information (Canwest Global Corporation v Treasurer of the Commonwealth [1997] FCA 1602, Hill J). As Lockhart J said in Somerville v Australian Securities Commission (1995) 60 FCR 319:
“… The Court must consider two conflicting aspects of the public interest: first, whether harm would be done by production of the documents and secondly, whether it would impair the administration of justice if the documents were withheld. The Court must then engage in a balancing exercise and determine which of these elements predominates. The balancing exercise can be undertaken only when it appears that both aspects of the public interest require consideration. …” (at 331)

Once the balance has been struck and struck in favour of not disclosing the document, it cannot be waived. Although the court is required to undertake that balancing process, it seems to me that this does not take public interest immunity from the realm of a rule of law to a rule of evidence. The principles remain the same as they do in the case of a police informer. Where the balance lies is a matter of judgment in the case of an informer to an investigatory body just as it is a matter of judgment whether disclosure of information given by a police informer can show an accused person’s innocence. Once the judgment has been exercised, the outcome is clear and rights and privileges follow according to a pre-determined path.

It follows that consideration of public interest immunity claimed in respect of information given by a confidential source to an investigative body is a “rule of law” referred to in s. 36D(6) of the AAT Act. I must, therefore, resolve any inconsistency between the views expressed in Re Queensland Nickel Management and Re Ajka. In doing so, I am mindful that:
“Courts do not construe legislation as abolishing, suspending or adversely affecting rights, freedoms and immunities that the courts have recognised as fundamental unless legislation does so in unambiguous terms …” (Daniels at 562, [43] per McHugh J)

I am also mindful that:

“… Such is the reach of the regulatory state that it is now difficult to assume that the legislature would not infringe rights or interfere with the general system of law. …
…
Speaking generally, a much surer guide to the legislative intention in areas of legislation dealing with ordinary rights or the general system of law is to construe the language of the enactment in its natural and ordinary meaning, having regard to its context – which will include other provisions of the enactment, its history and the state of the law – as well as the purpose which the enactment seeks to achieve.” (Malika Holdings Pty Limited v Stretton (2001) 204 CLR 290 at 299, [29]-[30], per McHugh J)

On its face, s. 36D(6) bears the very wide interpretation favoured in Re Ajka. Sections 36 and 36B exclude the operation of any rules of law that (1) relate to public interest (i.e. including public interest immunity) and that (2) would otherwise apply in relation to the disclosure of information in proceedings before the Tribunal. Arguably, that means that the only way in which public interest immunity can be raised is by means of ss. 36 and 36B i.e. by an Attorney-General’s certifying that disclosure would be contrary to the public interest in the manner set out.

When that wide interpretation is viewed against the AAT Act as a whole, it becomes a little less attractive. If s. 36D(6) has “… the effect of displacing the operation of the common law doctrine of public interest immunity in proceedings in this tribunal”, why does it make reference only to ss. 36 and 36B? An examination of the legislative history shows that Parliament seems to have made a deliberate decision to include a provision in terms of s. 36D(6) in relation to ss. 36 and 36B. It was first included as s. 36(5) when the AAT Act was enacted in 1975. When s. 36A was added in 1997, it was enacted without its inclusion (Administrative Appeals Tribunal Amendment Act 1977, s. 23). When ss. 36B and 36C relating to State Attorneys-General were added in 1988, s. 36D(6) appeared for the first time (Law and Justice Amendment Act 1988, ss. 12 and 13). It was limited in its terms to s. 36 and its mirror provision, s. 36B.

Looking at the terms of ss. 36 and 36B, it is clear that they are concerned with the “disclosure of information, or of matter contained in documents” and do set out a “code” to be followed when an Attorney-General has issued a certificate. Sections 36A and 36C are expressed in terms of answering a question rather than of disclosing information but, in broad terms, the outcome is the same as that in ss. 36 and 36B. That is to say, having been informed by an Attorney-General that answering a question would be contrary to the public interest, the Tribunal is constrained in its consideration by those sections. Putting aside the special considerations that apply when the public interest is said to be one of those set out in ss. 36(1)(a) and (b), an appropriately constituted Tribunal must decide whether answering the question would not be contrary to the public interest (ss. 36A(2)(b) and 36C(2)(b)). Unlike ss. 36 and 36B, the Tribunal is not directed as to the manner in which it must consider whether disclosure would be contrary to the public interest (ss. 36(4) and 36B(5)). It would follow logically that the Tribunal should have regard to the general law of public interest immunity in considering that question under those sections. It would not be confined in its consideration as it is when a Minister has issued a certificate under, for example, s. 33(3) of the FOI Act (see Re MacPhee and Department of Treasury (1988) 11 AAR 166, Hartigan J, President, Australian Doctors' Fund Ltd v Commonwealth of Australia (1994) 49 FCR 478, Beazley J).

If s. 36D(6) were to be read in the manner proposed in Re Ajka so that it has “… the effect of displacing the operation of the common law doctrine of public interest immunity in proceedings in this tribunal”, it would accord with the Tribunal’s approach that it and the parties have all available and relevant material. At the same time, it would be inconsistent with its having to limit disclosure of all available and relevant evidence if that is evidence subject to legal professional privilege (Re Lindsey at 344-5). To protect one public interest but not another does not seem to be a proper outcome either in the context of merits review in the Tribunal or in the context of the protection that Parliament generally affords to such information. So, for example, Part IV of the Freedom of Information Act 1982 exempts from disclosure information of the type for which public interest immunity could be claimed (for example ss. 33, 33A, 34 and 35).

Having regard to all of these matters, I have concluded that s. 36D(6) of the AAT Act, is not intended to exclude the general operation of considerations of public interest immunity in proceedings in the Tribunal. It is intended instead to exclude its operation only when an Attorney-General has given a certificate under ss. 36 or 36B and those provisions come into play. Otherwise, if disclosure of a document is resisted on the basis of its being subject to public interest immunity, the Tribunal is bound to consider the claim and make a decision on whether or not it applies.

Public interest immunity: are documents 374, 376, 419 and 420 exempt from disclosure?

With the consent of the parties, I have looked at the documents in order to decide whether they are subject to public interest immunity (Burmah Oil Co v Bank of England [1980] AC 1090 at 1129 per Lord Edmund-Davies). With regard to documents 374, 376, 419 and 420, I am satisfied from their content that they contain information that was given to the Commissioner or the ATO on a confidential basis. It is information that would come within the protection given by s. 16(2) of the ITA Act (see paragraph 84 below) and it has been communicated to the Tribunal under the qualification in s. 16(4)(c) in connection with these proceedings. The information retains this character whether or not it has been released to Mr Watson or to HCCC under the FOI Act.

Information of this sort may assist the Commissioner in carrying out one of his functions i.e. to prevent and detect those who would avoid payment of the taxation required of them. It may assist him, for example, by putting him on a course of enquiry. It is information that may well not come to him in the future if it is known that it will be released in due course and informants’ identities known. That will impede the Commissioner in the administration of the ITA Act and related legislation. Some areas he should investigate will be clear to him but others may not be readily apparent. His extensive powers to obtain information are of little use if he is not, from time to time, led by confidential informants to areas of enquiry of which he might otherwise be unaware. The passage of time has not eroded the information’s confidentiality.

I am satisfied that it is not information of the sort that assists the HCCC to prepare or present its case in the Tribunal. Its task is summarised in the headnote to The Commissioner of Taxation for the Commonwealth of Australia v Dalco (1989-90) 168 CLR 614 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ):
“(1)… the task for a taxpayer, upon an appeal or a review under Pt V of the Act, is to show that the amount of money for which tax is levied by a notice of assessment exceeds his actual substantive liability.
(2)… a taxpayer does not prove that his taxable income was less than the amount shown in the assessment merely by showing that in some respects the Commissioner erred in the way in which he attributed income to the taxpayer or otherwise dealt with the material available to him.” (at 614)

In conclusion, therefore, I am satisfied that documents 374, 376, 419 and 420 are subject to public interest immunity and may not be disclosed to HCCC.

Public interest immunity: other documents for which public interest immunity claimed

The submission made on behalf of the Commissioner reads:
“9. The respondent does not maintain its objection to production of the working documents remaining in issue.
10. As to the documents procured from third parties, or containing third party information (other than the names or other identifying particulars relating to informants), the respondent only took its objection in the first place because of procuration of the documents or their content by or through the use or the threat, express or implied, of use, of his coercive powers, so as to protect the interests of the third parties. If the applicant persuades the Tribunal that it ought to have access to these documents the respondent will not trouble the Tribunal with submissions as to why that ought not to occur.”

For the purposes of considering this issue, I have examined each of the documents in Parts 2 and 3 of Schedule 1 other than the seven documents which I have considered above. Each contains information obtained from third parties but that information has been given because the Commissioner has sought it out. Some, for example, he has sought by asking for records and documents and other he has sought by formal interview. It is not information that has been volunteered to the Commissioner but nor is there anything about the documents that suggests it was given in confidence. People may or may not part with information of that sort happily and freely but ss. 263 and 264 of the ITA Act mean that their happiness is ultimately irrelevant. Even if it were released and their identity disclosed, they could not refuse to provide it in the future if the Commissioner were to require them to give it.

The extent to which the information will be used in the proceedings remains to be seen. It is, however, relevant. Even though the extent to which it will be used is uncertain, I consider that its relevance in the Tribunal’s proceedings outweighs any public interest in keeping it from HCCC. Therefore, the documents must be disclosed to HCCC.

Summons issued to Mr Richard Watson

Mr Abbott submitted that Mr Richard Watson could be in breach of his fiduciary duty to his employer in answering the summons. He referred to s. 16(2) of the ITA Act, which provides:
“Subject to this section, an officer shall not either directly or indirectly, either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of ‘officer’ in subsection (1).”

The definition of “officer” is in these terms:

“ ‘officer’ means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to income tax.” (ITA Act, s. 16(1))

Section 16(2) “… does not apply to the extent that the person makes the record of the information, or divulges or communicates the information, in the performance of the person’s duties as an officer” (ITA Act, s. 16(2A)).

A further restriction on what an officer may and may not divulge is found in s. 16(3) of the ITA Act:
“An officer shall not be required to produce in Court any return, assessment or notice of assessment, or to divulge or communicate to any Court any matter or thing coming under his notice in the performance of his duties as an officer, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax.”

Section 16(4) does permit the disclosure of information that would otherwise be prohibited in 28 situations. One of those is set out in s. 16(4)(c):
“Nothing in this section shall be deemed to prohibit the Commissioner, a Second Commissioner, or a Deputy Commissioner, or any person thereto authorized by him, from communicating any information to:
(c)the Tribunal in connection with proceedings under an Act of which the Commissioner has the general administration”.

The “Tribunal” is the Administrative Appeals Tribunal (ITA Act, s. 6(1)).

I considered the scope of s. 16(2) in Re Richardson and Commissioner of Taxation and Anor [2004] AATA 367 at [36]-[42]. The essential features of the obligation imposed on an officer, who is employed by the ATO are that the information must: (1) be in relation to the affairs (which encompasses a very wide range of activities and concerns) of another; (2) it must have been disclosed or obtained under the provisions of the ITA Act or any previous Commonwealth law relating to income tax; and (3) the officer must have acquired that information by reason of employment or in the course of employment with the ATO. Provided that the information meets these three criteria, it does not matter whether the Commissioner uses the information. In assessing whether or not information has been disclosed under the provisions of the ITA Act or any other relevant law, regard needs to be had to the nature of the information itself as well as the powers, functions and duties of the Commissioner and of the officers in the ATO under that legislation.

Does information about the Commissioner’s policy and procedure come within the description of “information respecting the affairs of any other person, disclosed or obtained under the provisions of …” among others, the ITA Act? Policy and procedure may affect a person’s affairs. Once applied and coupled with a particular outcome, it may be information respecting a person’s affairs. Without that link, I do not consider that the Commissioner’s policy and procedure can be regarded as being of the information described in the definition of an “officer” in s. 16(1) unless the Commissioner himself is to be regarded as an “officer”.

It is perhaps arguable that the Commissioner is another person within the meaning of s. 16(2). Given the breadth of the word “affairs” as it is understood in s. 16(2) (Johns v Connor and Others (1992) 107 ALR 465 at 476 per Lockhart J), it is perhaps arguable that s. 16(2) could be read as extending to the Commissioner’s affairs in administering the Act. The argument may lose some of its gloss when the rationale of s. 16 is considered:
“Section 16 is designed to ensure that officers of the Australian Taxation Office maintain secrecy regarding the affairs of taxpayers. The section reflects the intent of the Parliament to balance two competing areas of public interest: on the one hand the interests of taxpayers in having the privacy of their financial information respected; and on the other hand the facilitation of governmental business. Taxpayers are responsible for reporting their income and outgoings. It is essential if the confidence of taxpayers is to be maintained that private information that private information concerning their finances and affairs will not be disclosed except in the special circumstances mentioned in the various subs-sections of s. 16. The voluntary disclosure by taxpayers of this confidential information concerning their assessable income and outgoings is vital to the efficient operation of Australia’s taxation laws. If taxpayers lack this confidence, reluctance may develop to disclose voluntarily the requisite information.” (Consolidated Press Holding Limited and Ors v Commissioner of Taxation and Anor (1995) 129 ALR 443 at 446 per Lockhart J)

If the argument retains its gloss in light of the section’s intention, it loses it entirely when regard is had to whether information regarding the Commissioner’s policy and procedure could be said to have been disclosed or obtained “under the provisions of”, among others, the ITA Act. It could not be said to have been disclosed or obtained in that way.

The word “under” “… connotes ‘in pursuance of’ or ‘under’ …” (Australian National University v Burns (1982) 43 ALR 25 at 31 per Bowen CJ and Lockhart J and see also Lewins v Australian National University (1995) 133 ALR 452 at 461 per Lee J). Whether or not information has been disclosed or obtained under an enactment depends on whether there is power in that enactment to obtain that information. That power may be precisely stated in the enactment or may be broadly stated (Burns at 32). At the same time, not every act of an agency or body established under an enactment must be carried out under that or any other enactment. This is illustrated by Australian National Airlines Commission v Newman (1987) 162 CLR 466; 70 ALR 275. The High Court found that the Australian National Airline Commission’s conduct of a kitchen was not something “done or purported to be done” under the Australian National Airlines Act 1945. Brennan J said:
“In the present case, the Commission required no statutory authority to conduct a kitchen. That is an activity which, so far as appears, might lawfully be engaged in without statutory authority. The Commission was at liberty to perform the functions prescribed by s 19(1) or by other provisions of the Act by whatever lawful means it chose, an not further grant of power or prescription of functions was needed to authorise the conduct of the kitchen. True it is that the Act expressly confers powers on the Commission to operate services and facilities for the purposes of and incidental to the carrying on of its business (s 19D) and to do ‘all things necessary or convenient to be done for or in connection with, or as incidental to, the performance of its functions’ (s 19H) but the Act is not to be regarded, for the purpose of s 63(1), as the source of power which the commission otherwise possesses. Freedom under the common law to engage in conduct requires no grant of statutory power to confirm it, and a limitation provision which affects liability for things done or purportedly done ‘under’ the statute does not affect liability for things which are and can be done without reliance on a statutory power to do them. The conduct of the kitchen was something which the Commission had capacity to undertake without the grant of statutory power to undertake it. It follows that an act committed in the course of conducting the kitchen is not an act arising out of something done or purportedly done under the Act for the purpose of s 63(1).” (at 282-3)

Section 8 of the ITA Act provides that the Commissioner has general administration of the legislation. Jenkinson J decided in Hutchins v Deputy Commissioner of Taxation (1994) 123 ALR 133 at 139 that a general power cannot be understood to make provision for any of the many decisions which the Commissioner must make in exercising his authority. The function of s. 8, he said, is merely to nominate the person by whom decisions relating to general administration may be made. On appeal, Black CJ and Spender J similarly concluded that s. 8 was too generally expressed to support a conclusion that a specific decision had been made under it.
On the basis of these authorities, it seems to me that information regarding the Commissioner’s policy and procedure in the administration of the ITA Act cannot be said to have been given or acquired under that enactment or any other. Therefore, it is not information whose disclosure is prohibited by s. 16(2).

This conclusion is consistent with the provisions in s. 16(3). Policy and procedure and their development are part of the Commissioner’s functions in administering legislation including the ITA Act. Knowledge of that policy and procedure and the manner in which legislation is administered generally would be “… a matter or thing coming under his notice in the performance of carrying into effect the provisions of …” that legislation within the meaning of s. 16(3). That Parliament thought it necessary to restrict disclosure of that matter or thing separately from s. 16(2) reinforces the interpretation that s. 16(2) is not intended to restrict disclosure of information that is not respecting the affairs of another person but is of general application.

The restriction in s. 16(4) applies only to the Court and not to the Tribunal. Arguably, that is so because the Tribunal exercises the powers and discretions of the Commissioner and so may need to be aware of them. The Court, on the other hand, is limited by its judicial role and has limited power to override the Commissioner’s discretions.

It follows that I consider that s. 16 does not prevent Mr Richard Watson from disclosing information regarding the Commissioner’s practice and procedure. It is not within the purview of s. 16(2).

Information respecting the affairs of HCCC is a different matter. It does come within the purview of s. 16(2). In the context of this case, Mr Richard Watson may not disclose that information unless he is authorised to do so by ss. 16(2A) or (4)(c). The qualification to the restrictions imposed by s. 16(2A) turns on what is required by the performance of an officer’s duties. As Dixon CJ said of the word “duty” when the qualification in s. 16(2A) was found in s. 16(2) itself:
“The word ‘duty’ there is not, I think, used in a sense that is confined to legal obligation but really would be better represented by the word ‘function’.” (Canadian Pacific Tobacco Co Limited v Stapleton (1952) 86 CLR 1 at 6 per Dixon CJ)

Whether or not disclosure of information about HCCC’s affairs will be in the performance of Mr Richard Watson’s duties or functions will depend on what his duties and functions are. I do not have evidence regarding that and so cannot make a decision. The same applies to s. 16(4)(c). I have no evidence whether Mr Richard Watson has been authorised to communicate any information to the Tribunal in connection with these proceedings. If that evidence is produced, I will reconsider the matter but in the meantime decide that Mr Richard Walsh will not be permitted to answer any questions regarding HCCC’s affairs within the meaning of the definition of “officer” in s. 16(1) of the ITA Act.

For the reasons I have given, I:
1.decide that the following documents were properly included on the respondent’s list of documents:
(a)the transcripts of the Australian Securities and Investment Commission’s examinations of Mrs Bronwen Watson (“transcripts”) are properly included in the respondent’s list of documents; and
(b)a report by Deloitte sent by the applicant’s solicitors to the respondent on a “without prejudice” basis was properly included in the list of documents;

2.direct that:

(a)the respondent is not required to disclose to the applicant documents 421, 423 and 424 in Part 2 of Schedule 1 of his list of documents as they are subject to legal professional privilege;
(b)the respondent may not disclose to the applicant documents 419 and 420 of Part 2 of Schedule 1 and documents 374 and 376 of Part 3 of Schedule 1 of his list of documents as they are subject to public interest immunity; and
(c)the respondent is required to disclose to the applicant all documents in his list of documents other than documents 374, 376, 419, 420. 421, 423 and 424 described above;

3.decide that when answering a summons to give evidence, Mr Richard Watson:
(a)may give evidence regarding the policy and procedure of the respondent; and
(b)will not be permitted to answer any questions regarding the applicant’s affairs within the meaning of the definition of an “officer” in s. 16(1) of the Income Tax Assessment Act 1936;

4.adjourn further consideration of whether the transcripts are inadmissible on the basis that the Tribunal’s proceedings are for the imposition of a penalty within the meaning of s. 68(3)(b) of the Australian Securities and Investment Commission Act 1989; and
5.decide I am not tainted by my being informed of the existence of the transcripts by means of the respondent’s list of documents

I certify that the ninety-nine preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: ………………………………………..

R. Crook Associate

Date of Directions Hearing           4 November 2004
Date of Decision  19 November 2004
For the Applicant  Mr M C Watson
Counsel for the Respondent         Mr A J Abbott
Solicitor for the Respondent         Australian Government Solicitor