Johns, I.M. v Australian Securities Commission

Re: IAN MALCOLM JOHNS
And: AUSTRALIAN SECURITIES COMMISSION; ANTHONY GEOFFREY HARTNELL; NOREEN
CLAIRE MEGAY; ALBERT EDWARD WOODWARD; DOUGLAS GILBERT WILLIAMSON; THE HERALD
AND WEEKLY TIMES LTD; AUSTRALIAN BROADCASTING CORPORATION and THE STATE OF
VICTORIA
No. V G149 of 1992 FED No. 421
Administrative Law - Contempt
(1992) 10 ACLC 1057
(1992) 8 ASCR 156
(1992) 108 ALR 405
(1992) 35 FCR 146
(1992) 27 ALD 545

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Black C.J.(1), Davies(2) and von Doussa(1) JJ.

CATCHWORDS

Administrative Law - judicial review - extension of time - delay by applicant - public policy considerations - s.11 Administrative Decisions (Judicial Review) Act 1977.

Whether ASC could validly aid Royal Commission by making available ASC powers of investigation - whether an investigation initiated by Ministerial direction under the co-operative scheme legislation lapsed when the ASC Law came into operation - whether the investigation continued under the ASC Law as one by the ASC - whether exercise of coercive powers of investigation under Part 3 of the ASC Law by the ASC was for a proper purpose or contrary to ASC Law - s.13, 14 and 14A ASC Law.

Delegation of powers to officers of ASC to assist in Royal Commission investigation - whether officer seconded from ASC to Royal Commission a "staff member" - whether investigation power validly delegated - effect of s.33C(2) of the Public Service Act 1922.

Confidentiality of material obtained in examinations by ASC - whether disclosure of material by ASC to Royal Commission lawful - whether disclosure of material at public hearings by Royal Commission lawful - Ss.25(3) and 127(4) and(5) ASC Law.

Contempt - Royal Commission - pending criminal proceedings - contempt of court - receipt by Commission of final submissions in public - whether real risk of interference with administration of justice given delay before criminal trial and nature of alleged contempt - whether any risk of interference outweighed by public interest in hearing submissions in public.

Administrative Decisions (Judicial Review) Act 1977: s.11.

Australian Securities Commission Act 1989: Ss. 5, 13, 14, 14A, 102, 120, 125, 127.

Companies (Victoria) Code: ss.291, 292.

Public Service Act 1922; s.33C(2).

Cases

1. Johns v Connor (Unreported, Lockhart J., Federal Court of Australia, 7 May 1992) applied.

2. Australian Securities Commission v Graco (1991) 29 FCR 491 applied.

3. Ex parte Wardley Australia Limited (1991) 5 ACSR 786 applied.

HEARING

MELBOURNE

#DATE 19:6:1992

Counsel for the Applicant: Mr R. Merkel QC

with Mr. J. Beach

Solicitors for the
Applicant: Arnold Bloch Leibler

Counsel for the First, Mr. A.J. Myers QC
Second and Third Respondents: with Mr. T. Pagone

Solicitors for the First, Australian Securities Commission,
Second and Third Respondents: Regional General Counsel

Counsel for the Fourth Ms. E. Wentworth
and Fifth Respondents:

Solicitors for the Fourth Clayton Utz
and Fifth Respondents:

Counsel for the Sixth and Mr. M. Dreyfus
Seventh Respondents:

Solicitors for the Sixth Arthur Robinson and Hedderwicks
Respondent:

Solicitors for the Seventh Blake Dawson Waldron
Respondent:

Counsel for the Eighth Mr. R.A. Finkelstein QC
Respondent: with Mr. R.M. Garratt

Solicitor for the Eighth Victorian Government Solicitor

ORDER

THE COURT ORDERS THAT

1. The appeal be dismissed.

2. The appellant pay the costs of the respondents other than those of the eighth respondent.

3. There be liberty to the eighth respondent to make submissions in writing on the question of its costs if it so desires and to the appellant to make submissions in writing in reply on that question.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Introduction This is an appeal against the dismissal by a single judge of this Court (Heerey J) of an application by the appellant for an order of review of decisions of the first and second respondents under the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act"), and for other relief against the respondents.

The appellant ("Mr Johns") was the Managing Director of the 22 companies comprising the Tricontinental group ("Tricontinental") at the time of the group's collapse. On 7 September 1990 the Victorian Government secured the appointment by the Governor-in-Council of a Royal Commission to enquire into the affairs of Tricontinental. The members of the Royal Commission were the Hon. Sir Edward Woodward QC, (Chairman), Mr Douglas Williamson QC and Mr William Gurry. In October 1990 Mr Gurry expressed his wish to relinquish his appointment, and by Letters Patent dated 16 October 1990 Mr Leo John Carden was appointed a member of the Royal Commission in his stead. More recently Mr Carden has also relinquished his appointment. The remaining Royal Commissioners are the fourth and fifth respondents. The terms of reference of the Royal Commission were to enquire into and report upon the affairs of, and transactions engaged in, by the corporations comprising the Tricontinental group. The terms of reference specified a number of topics in particular for investigation which, in summary, covered (1) whether any person was guilty of any criminal offence or breach of statutory duties; (2) whether any officer of Tricontinental had acted illegally, improperly or in breach of duty; (3) what matters and events caused the collapse; (4) whether any auditor, valuer or adviser had acted in breach of duty to Tricontinental or had given false or misleading information; (5) whether the affairs of Tricontinental were properly supervised by its own directors and managers, and by other nominated people; (6) whether any person should make restitution or pay compensation to Tricontinental or the State Bank of Victoria; and (7) whether any changes to the law are necessary.
In the latter part of 1990 the Royal Commission was mostly concerned with setting up administrative arrangements and making preliminary enquiries. Two days of public hearings were conducted in December 1990. In 1991 the Royal Commission commenced substantial public hearings. The first phase of those hearings was mainly concerned with the structures and practices of Tricontinental and the roles played by the more important individuals concerned. An interim report dealing with the first phase of the Royal Commission was presented to His Excellency the Governor of Victoria on 30 July 1991, and published shortly thereafter. In the second half of 1991 the Royal Commission turned its examination to specific transactions in which Tricontinental had been concerned.
Following an arrangement made on about 11 February 1991 between the first respondent, the Australian Securities Commission ("the ASC"), and the Royal Commission, the ASC agreed to make available to the Royal Commission the services of certain people whom it considered to be ASC officers, including the third respondent, Ms Megay. The ASC purported to delegate to those officers the powers and functions of the ASC under Part 3 of the Australian Securities Commission Act, 1989 ("the ASC Law"). From July 1991 onwards officers of the ASC, and in particular Ms Megay, issued notices to a number of people including Mr Johns requiring their attendance for examination, examined them on oath in private, and obtained documents from them. Transcripts of these examinations and the documents obtained were then made available to the Royal Commission. In the case of certain of the transcripts relating to examinations of Mr Johns, the disclosure to the Royal Commission was made under sub-s.127(4) of the ASC Law by delegates of the ASC purportedly acting under delegations of power made by the second respondent, Mr Hartnell, as chairperson of the ASC pursuant to sub-s.127(5). Other transcripts relating to the examination of Mr Johns were disclosed to the Royal Commission by delegates of the ASC under sub-s.25(3) of the ASC Law. At public hearings of the Royal Commission many of the transcripts were tendered. The transcripts were also used in other ways by the Royal Commission, for example as proofs of evidence of witnesses called in public hearings.
By his application for relief Mr Johns alleged that the arrangement made on about 11 February 1991 between the ASC and the Royal Commission was improper, unlawful and beyond the powers conferred on the ASC under the ASC Law, and that the examinations conducted by Ms Megay and others were not conducted for a purpose of or authorised by the statutory provisions contained in Part 3 of the ASC Law. He further alleged that the material obtained in the examinations was given to the ASC in confidence, and that it was unlawful for the ASC to make the material available to the Royal Commission, and for the Royal Commission to permit the material to be tendered in public hearings without the consent of the persons examined. It was contended that the disclosure of material by Ms Megay to the Royal Commission went beyond the terms of a delegation of power to her under sub-s.127(4), and was not authorised by sub-s.25(3) of the ASC Law. Moreover, both the delegation of the power of investigation under Part 3 of the ASC Law, and the delegation under s.127, were said to be invalid as Ms Megay was not at any relevant time a member of the staff of the ASC.
Mr Johns contended that the material gathered in exercise of the coercive powers under Part 3 of the ASC Law, and the unlawful use of that information, has become inextricably interwoven and intermingled with the conduct of the Royal Commission. He alleged that the Royal Commission has no power or jurisdiction to conduct its proceedings by using this material directly or indirectly and should be restrained from making any findings adverse to him.
Transcripts of examinations of Mr Johns conducted by Ms Megay, after being tendered in evidence at the Royal Commission, were made available to media representatives, including journalists from the sixth respondent, The Herald and Weekly Times Ltd ("HWT") and from the seventh respondent, the Australian Broadcasting Corporation ("ABC"). It is unclear how much of the information contained in those transcripts has been published by the media. On 14 February 1992 the Royal Commission made an order prohibiting the further publication of material from the transcripts of the examination of Mr Johns. HWT and the ABC brought proceedings in the Supreme Court of Victoria challenging the Royal Commission's non-publication order. Those proceedings were adjourned pending a determination of these proceedings, as Mr Johns had sought orders from this Court against HWT and the ABC restraining further publication of the material from the transcripts of his examinations.
Mr Johns also sought orders restraining the Royal Commission from hearing final submissions from counsel in public. He is awaiting trial in the County Court of Victoria on charges alleging the receipt of secret commissions. His pleadings alleged that the receipt of submissions in public would create a real risk of interference with the administration of justice and constitute a contempt of court.
Each of these contentions was pursued at trial. Each was decided against the appellant by the primary judge. Each contention has been renewed before this Court.
Before the primary judge a further allegation was also agitated. On 3 and 4 October 1991 Mr Johns had given evidence on oath before the Royal Commission in confidential sessions concerning his financial resources. This hearing was solely concerned with Mr Johns' endeavours to obtain Victorian Government assistance for legal representation before the Royal Commission. He contended that in the course of the special sitting certain prejudicial evidence was admitted. Although the Royal Commissioners had stated that they would disregard the evidence, Mr Johns contended that the receipt of the evidence created a reasonable apprehension of bias on the part of the Royal Commissioners against him, and that they should be restrained from making any findings adverse to him on the issues with which that evidence was concerned, despite the availability of other evidence. The rejection of this submission by the trial judge is challenged in the notice of appeal, but the challenge was abandoned on the hearing of the appeal.
A further ground of appeal challenges a ruling of the primary judge made in the course of the trial which upheld a claim for public interest immunity in respect of parts of several documents discovered by the ASC and Mr Hartnell which related to the arrangement made between the ASC and the Royal Commission on about 11 February 1991.
Extension of time:
Mr Johns' application, insofar as it claimed relief under the ADJR Act, sought an extension of the 28 day period prescribed by sub-s.11(3) for the bringing of an application for an order of review. Before the primary judge the appellant accepted that the decision to enter into the arrangement on about 11 February 1991 with the Royal Commission, and other decisions made by the ASC, Mr Hartnell, and Ms Megay, in purported exercise of power under the ASC Law, could not be reviewed unless an extension was granted. The primary judge extended time. By notice of contention filed under FCR O.52, r.22, the ASC, Mr Hartnell and Ms Megay contend before this Court that the primary judge ought not to have granted an extension of time. It is convenient to deal with this matter first.
At trial the extension of time was opposed on the ground that the evidence established that on 31 July 1991 Mr Johns, through his solicitor, was advised in writing by solicitors for the Royal Commission of the use of the transcripts of his examinations in the very way of which he complained in his application. Further, he admitted in cross-examination before the primary judge that he knew at the time that information he was providing was going to be used by investigators attached to the Royal Commission. He made no protest until January 1992. In the meantime the Royal Commission had proceeded, and in the absence of any protest from Mr Johns the ASC material had become "inextricably interwoven" in the proceedings of the Royal Commission.
The learned primary judge considered there was force in these submissions even though he held that in the latter part of 1991 the solicitor who had received the letter of 31 July 1991 on Mr Johns behalf was acting merely as a "post box", not as his legal adviser, apart from helping him with an application for Government assistance for legal representation. Nevertheless the primary judge granted the extension of time saying considerations of public policy weighed strongly in favour of the extension sought. His Honour expressed his reasons as follows:

"An attack has been made on the legal validity of the Royal Commission's proceedings in a fundamental respect. This has now been fully argued over a trial lasting five days. I think there would be a substantial risk to public confidence in the Royal Commission's conduct of its proceedings in any subsequent report were these issues to remain unresolved. This is particularly so when a contributing cause to the delay by Mr Johns in bringing his complaint before a court was a persistent refusal of the Victorian Government to grant him legal assistance until quite recently, notwithstanding that all other major figures appearing before the Royal Commission had substantial legal representation (most of them at public expense) and despite the Royal Commission's recommendation for such a grant as long ago as 28 March 1991."

Counsel for the ASC (who also appears for Mr Hartnell and Ms Megay) concedes that the exercise of the power to grant an extension of time involved the exercise of a judicial discretion. Accordingly, to make good its challenge, the ASC must demonstrate that the primary judge made some error of fact or law in exercising the discretion: House v The King (1936) 55 CLR 499 at 504-505. Furthermore, counsel acknowledges that the decision to extend time was one of an interlocutory nature made on a matter of practice and procedure, and an appellate court will exercise particular caution in reviewing a decision of this kind: Adam P. Brown Male Fashions Proprietary Limited v Phillip Morris Incorporated and Another (1981) 148 CLR 170 at 177-178. Nevertheless counsel contends that the order extending time should be set aside as, in two respects, the primary judge proceeded upon wrong principles. It is contended that he erred in taking into account, first, "a substantial risk to public confidence" in the Royal Commission's conduct of its proceedings in any subsequent report if the issues raised by the application were to remain unresolved, and secondly, the refusal of the Victorian Government to grant Mr Johns legal assistance.
In our opinion the primary judge did not fall into error in these respects. The issues sought to be argued by Mr Johns alleged improper exercise of power and illegal conduct in the gathering of evidence such that there had been invasions of the rights of Mr Johns and other individuals. If these allegations were not determined by a court of law, there would clearly be a substantial risk to public confidence. The nature and seriousness of the issues sought to be raised in proceedings under the ADJR Act are matters relevant to the exercise of the discretion to extend time, and were important matters in the present case. Where the extension of a procedural time limit is sought, the explanation for the delay which has occurred is one of the paramount matters to be considered by the court: Ulowski v Miller (1968) SASR 277 at 280 per Bray C.J. A delay for which the plaintiff is personally responsible will operate more severely against him than delays brought about by the act of others. The finding of the primary judge that the refusal of legal aid was a contributing cause to the delay by Mr Johns in bringing his complaint before the court is not challenged. The primary judge did not fall into error in taking into account this matter as one of the explanations for the delay.
On the basis upon which the question was argued before the primary judge and before this Court, no error in the exercise of the discretion to extend time has been demonstrated, and the order extending time should not be disturbed.
The question of an extension of time was argued before the primary judge and in this Court on the assumption that the time limit prescribed in sub-s.11(3) of the ADJR Act had application to the decisions under the challenge. We think this assumption is open to doubt. Sub-section 11(3) prescribes a period for the purpose of para.11(1)(c). Paragraph 11(1)(c) requires that an application to the Court for an order of review be made within the prescribed period "in the case of an application in relation to a decision that has been made and the terms of which were recorded in writing and set out in a document that was furnished to the applicant". It is improbable that the decision of the ASC made on about 11 February 1991, or the other decisions under challenge, fall within that class of case. If the challenged decisions do not fall within the class of decision described in para.11(1)(c), Mr. Johns' application was governed by sub-s.11(4), and the issue which fell for consideration was whether the application was commenced within a reasonable time after the decisions were made. When delay is involved this question raises considerations which would also be relevant to the exercise of the Court's discretion whether to grant relief if the application were to be entertained. This question, in the context of sub-s.11(4), has not been addressed by the parties.

The application was in fact entertained by the primary judge and decided on the merits. In these circumstances we consider the appeal should also be decided on the merits. The matter of delay by Mr. Johns would become relevant if the challenge to the judgment below succeeded, and it became necessary for this Court to exercise its discretion whether to grant relief.
Whether the delegation of ASC powers was made for an improper purpose:
Central to the appellant's claims for relief is the argument that the purpose of the arrangement made on about 11 February 1991, and the resolutions passed in pursuance of that arrangement, for the ASC to assist the Royal Commission in its work by making available to it the ASC powers to obtain evidence and information under Part 3 of the ASC Law were improper, unlawful and ultra vires. It was common ground at trial that a purpose of the arrangement and the related resolutions was to aid, assist and enable the Royal Commission to obtain material and information for its use. However by their defence the ASC, Mr Hartnell and Ms Megay pleaded that other purposes of the arrangement were:

"(a) for the expedient and due administration of a national scheme law within the meaning and for the purpose of the ASC Law;

(b) to give effect to the objects set out in section 1 of the ASC Law conformably with the terms of that section;

(c) to perform the duties imposed upon the ASC by the ASC Law;

(d) to facilitate (by co-operative arrangements) the performance by the ASC to fulfil its duties and obligations to complete investigations under previous legislation as required by section 14A of the ASC Law; and

(e) to facilitate (by co-operative arrangements) investigations under section 13 of the ASC Law."

It will be noted, in particular, that reliance was placed on ss.13 and 14A of the ASC Law. Before the primary judge, and before this Court, it was contended that the primary source of power stemmed from s.14A, the purpose of which was achieved by the conduct of the ASC, Ms Megay and other ASC officers following the arrangement made on 11 February 1991. Section 13 was relied on as a subsidiary source of power. The ASC law relevantly provides:

"13(1) The Commission may make such investigation as it thinks expedient for the due administration of a national scheme law of this jurisdiction where it has reason to suspect that there may have been committed:

(a) a contravention of a national scheme law; or

(b) a contravention of a law of the Commonwealth or of a State or Territory, being a contravention that:

(i) concerns the management or affairs of a body corporate; or

(ii) involves fraud or dishonesty and relates to a body corporate, securities or futures contracts.

(2) ...

(3) Where the Commission has reason to suspect

that a contravention of a relevant previous law of this jurisdiction may have been committed, the Commission may make such investigation as it thinks appropriate.

(4) ...

(5) Where:

(a) immediately before the commencement of this subsection, the NCSC was investigating a matter under a relevant previous law of this jurisdiction; and

(b) either or both of subsections (1) and (3) empower the Commission to investigate that matter; then:

(c) the Commission may continue the NCSC's investigation of that matter; and

(d) the investigation, as continued by the Commission, is taken to be an investigation under that subsection, or each of those subsections, as the case may be.

14(1) Where, in the Minister's opinion, it is in the public interest in respect of this jurisdiction for a particular matter to which subsection (2) applies to be investigated, he or she may by writing direct the Commission to investigate that matter.

(2) This subsection applies to a matter relating to any of the following, whether occurring, or alleged to have occurred, within this jurisdiction or elsewhere:

(a) an alleged or suspected contravention of a national scheme law or of a relevant previous law of a jurisdiction;

(b) an alleged or suspected contravention of a law of the Commonwealth or of a State or Territory, being a contravention that:

(i) concerns the management or affairs of a body corporate; or

(ii) ...

(c) the affairs, or particular affairs, of a corporation;

...

(3) The Commission shall comply with a direction under subsection (1).

(4) A direction under subsection (1) does not prevent the Commission from delegating a function or power. 14A(1) This section applies where, immediately before the commencement of this section:

(a) a direction was in force under:

(i) subsection 290(4) or 291(1), (2) or (3) of the relevant previous law of this jurisdiction relating to the formation of companies; or

(ii) subsection 16(1), (2) or (3) of the relevant previous law of this jurisdiction relating to the securities industry; or

(iii) subsection 22(1), (2) or (3) of the relevant previous law of this jurisdiction relating to the futures industry; and

(b) no investigation pursuant to the direction had yet begun, or such an investigation had begun but had not yet been completed or terminated.

(2) The direction has effect:

(a) with such modifications (if any) as are specified, in relation to the direction, in an application order; and

(b) with such other modifications (if any) as the circumstances require;

as if it were a direction to the Commission under subsection 14(1).

(3) If, immediately before that commencement, an investigation was being carried out pursuant to the direction:

(a) the Commission must comply with the direction, as it has effect because of subsection (2), by continuing the investigation in accordance with the direction as it so has effect; and

(b) the investigation, as continued by the Commission, is taken to be an investigation under section 14."

To understand the submissions of counsel it is necessary to go back to the commencement of the Royal Commission. On the same day that the Governor-in-Council appointed the Royal Commissioners, the Attorney-General for the State of Victoria, being the Minister for the time being responsible for the administration of the Companies (Application of Laws) Act 1981 (Vic), gave a Ministerial direction pursuant to ss.291 and 292 of the Companies (Victoria) Code ("the Code") to the National Companies and Securities Commission ("NCSC") to arrange for an investigation into the affairs of Tricontinental by the three Royal Commissioners who were identified by name in the Ministerial direction. The matter to be investigated was specified as "the affairs of and transactions engaged in by the corporations in the Tricontinental group...". The topics in particular to be investigated were specified in the same terms as in the Letters Patent establishing the Royal Commission. On the same day the NCSC, in compliance with sub-s.292(3) of the Code, appointed the Royal Commissioners under sub-s.292(4) as Inspectors, and notification of the investigation was given under sub-s.292(6). The Commission also certified under sub-s.292(9) that an investigation under Part VII of the Code into the affairs of Tricontinental was being carried out by the Royal Commissioners as Inspectors. The Ministerial direction, and the appointment of the Inspectors, contained the following direction:

"Pursuant to sub-section 292(1)(c), to the extent they are lawfully entitled to do so, the Inspectors are to conduct their inquiry into the matters mentioned aforesaid together with -

(i) their appointment as Commissioners by the Governor in Council of the State of Victoria to inquire into and report upon the affairs of, and transactions engaged in, by the Tricontinental Group;

(ii) their authorisations pursuant to s.45 of the National Companies and Securities Industry Act 1979 of the Commonwealth and s.12 of the National Companies and Securities (State Provisions) Act 1981;

(iii) any other appointments or authorisations they receive under the laws of the Commonwealth or of any State or Territory of the Commonwealth to conduct an investigation concerning the affairs of or transactions engaged in by corporations in the Tricontinental Group."

Paragraph (2) of this direction referred to authorisations given to the Royal Commissioners pursuant to the legislative provisions referred to which had the effect of delegating to the Royal Commissioners and each of them powers and functions conferred on the NCSC under the legislation of the States and Territories of Australia to enable the Royal Commissioners to more effectively perform the functions of Inspectors. Sections 291 and 292 of the Code relevantly provided:

"291(1) Where it appears to the Minister that it is in the public interest in respect of the State that an investigation be carried out into the affairs, or into particular affairs, of a corporation, the Minister may, by instrument in writing, direct the Commission to arrange for the investigation into the affairs, or into those particular affairs, of that corporation. ...

292(1) An instrument containing a prescribed direction-

(a) shall specify the matters that are to be investigated;

(b) may require the investigation to be carried out by the Commission or require it to be carried out by an inspector to be appointed by the Commission; and

(c) in the case of an investigation that is to be carried out by an inspector appointed by the Commission - may require a specified person to be appointed as the inspector and may require him to be appointed on specified terms and conditions.

(2) ...

(3) Where the Commission receives a direction, the Commission shall -

(a) in the case of a prescribed direction - comply with any requirements specified in the direction; and

(b) ...

(4) Where the Commission receives a direction,

the Commission shall -

(a) arrange for an investigation to be carried out into the matters specified in the instrument containing the direction; and

(b) subject to sub-section (3)-

(i) decide whether the investigation is to be carried out by the Commission or by an inspector to be appointed by the Commission; and

(ii) if it decides that the investigation should be carried out by an inspector - appoint the inspector on such terms and conditions as the Commission determines.

(5) ...

(6) Where the Commission is directed under sub-section 290(4) or 291(1), (2) or (3) to arrange for an investigation into affairs of a corporation, the Commission shall cause to be published in the Gazette a notice stating that the direction has been given and specifying the affairs concerned.

(7) ...

(8) ...

(9) A certificate by the Commission stating that-

(a) an investigation into a matter specified in the certificate, being a matter relating to affairs of a corporation, is being or is to be carried out by the Commission; or

(b) an investigation into a matter specified in the certificate, being a matter relating to affairs of a corporation, is being or is to be carried out by an inspector named in the certificate, is prima facie evidence of the matters stated in the certificate and, in the case of an investigation by an inspector, that the inspector has been duly appointed."

On 1 January 1991 the new national scheme for corporate regulation came into force. It replaced the legislative provisions under which the Ministerial direction of 7 September 1990 had been given, and under which the Royal Commissioners had been appointed Inspectors. The ASC, established under the ASC Law, replaced the NCSC. These legislative changes led to the arrangement reached between the ASC and the Royal Commissioners on about 11 February 1991. The minutes of the ASC for 11 February 1991 include the following:

"(iii) Relationship with the Royal Commission into the Tricontinental Group

The Commission considered a paper concerning the Victorian Royal Commission's investigation of the Tricontinental Group and the degree of overlap between its investigations and the investigations of the ASC and co-operation between the two agencies. The Commission discussed the relationship between its obligation to treat information in its possession in confidence and providing assistance to the Royal Commission. The Commission noted that the most important issue relates to whether the Chairman is satisfied as to the disclosure of the information under section 127(4) and the delegation of authority in the manner contemplated by the draft letter.

The Commission noted that the Chairman may authorise the disclosure of information where satisfied that the information may assist a Government agency in the performance of its duties. This power may be delegated to a staff member under Section 127(4). The Chairman emphasised that staff of the ASC, including Ms Megay, not appear before public hearings conducted by the Royal Commission and that staff not be subject to cross examination.

The Commission proceeded to make amendments to the draft letter attached to the paper addressed to Ms Noreen Megay, Director of Investigations, Royal Commission into the Tricontinental Group of Companies (an officer of the ASC on unpaid leave). Point (2) of the draft letter concerning the Interwest investigation was amended after consultation between the Chairman and Mr Menzies. Point 7 paragraph 3 was amended by deleting the words 'the Director of Investigations of the Victorian Regional Office, Mr Pat Whitehouse' and including the words 'the Regional Commissioner, Victoria, Mr Ron Trevethan'.

RESOLVED that the ASC enter into an arrangement with the Royal Commission into the Tricontinental Group in the terms set out in the draft letter attached to the paper, amended to reflect the views of the Commission. AGREED that the Chairman delegate authority to Mr Ron Trevethan, Regional Commissioner, Victoria and to Noreen Claire Megay in respect of information gathered by her and her assistants under ASC powers, to disclose information under Section 127(4) in accordance with the arrangements proposed.

FURTHER RESOLVED that the Commission delegate to Noreen Claire Megay, Donald James Christie and Kim Audrey Holmes powers of investigation under Part 3 of the Australian Securities Commission Act, subject to direction.

ALSO RESOLVED that the Commission execute the Instrument to give effect to the Commission's decision concerning the delegation of power to Megay, Christie and Holmes.

AGREED that Ms Megay might authorise Messrs Bruce Chamberlain, Peter Collens, Paul Fallon, Frances Hall, Malcolm Howell, Kenneth Jack, Ian McCubbing, Gailie Oliver, Donald Phillips, Jeremy Seabridge under section 29 of the Australian Securities Commission Act to inspect documents."

The draft letter referred to in the minutes is the letter dated 31 January 1991 to which reference has earlier been made. In respect of parts of this letter the primary judge upheld the claim by the ASC for public interest immunity. After hearing argument on that question this Court ruled that the claim for public interest immunity was not made out and that the letter should be produced for inspection, save for the identification of certain companies the subject of current investigations identified in the letter. The Court directed that the names of these companies be disclosed to counsel for Mr Johns on a confidential basis.
Counsel for Mr Johns contended that the parts of the draft letter discovered pursuant to the Court's ruling were highly relevant and should have been received into evidence at the trial. Had this happened it was contended that correspondence passing between the solicitor acting for Mr Johns, the Royal Commission, and the ASC in February 1992 ("the February 1992 correspondence") would also have been relevant to show that the examinations of Mr Johns by Ms Megay in purported exercise of power under Part 3 of the ASC Law were unlawful. In light of the ruling of the primary Judge upholding the claim of public interest immunity, the relevance of this correspondence had not been appreciated by counsel for Mr Johns at the trial. To avoid any question of a retrial, this Court has been urged on Mr Johns' behalf to receive into evidence both the full text of the draft letter of 31 January 1991, and the February 1992 correspondence. The Court has been invited to take that further evidence into account in considering the contention that the arrangement made on about 11 February 1992, and the impugned conduct of the ASC and Ms Megay which followed, were unlawful. The Court accepts that the full text of the draft letter of 31 January 1991, and the February 1992 correspondence, is relevant to the case argued on Mr Johns' behalf, and rules that both should be admitted into evidence. (The February 1992 correspondence is identified in Part B, item 2, and Part C of the Further Appeal Book dated 15 May 1992 handed to the Court by Mr Johns' counsel during argument. Those parts marked in pink are subject to an order of this Court restricting their publication to counsel for the ASC and Mr Johns on the ground that reference is made in them to investigations of transactions which involved corporations other than Tricontinental). Reference will be made to parts of this further evidence sufficient to disclose the reasons for our judgment. Having regard to the conclusions we have reached about the appeal, it is not necessary for us to consider whether the ASC should have an opportunity to lead additional evidence as a consequence.
It is sufficient for present purposes to set out part only of the draft letter of 31 January 1991, the names of certain companies being deleted:

"Ms Noreen Megay, Director of Investigations, Royal Commission into the Tricontinental Group of Companies 31 January 1991

Dear Ms Megay,

I refer to your meeting on 24 January with Mr Ron Trevethan, Regional Commissioner, Victoria, Mr Stephen Menzies, National Coordinator for Investigations and officers of the Victorian Regional Office of the Australian Securities Commission.

In accordance with the discussions in that meeting, the ASC would like to propose to the Royal Commissioners certain arrangements designed to ensure that the respective activities of the ASC and the Royal Commission are coordinated, while recognising the respective duties and/or authorities of each. Such coordination seems particularly necessary where the ASC has commenced investigations into the affairs of a particular company, which may result in prosecutions for breaches of corporate law and those matters may also be subject to consideration by the Royal Commission. The ASC would propose for consideration by the Royal Commissioners, the following arrangements:

(1) The current investigations into the following companies:

(names deleted)

would continue and, subject to the comments below in relation to the (...) investigation, the ASC would proceed to brief the Director of Public Prosecutions in relation to any possible offences which may be disclosed by those investigations.

(2) In the case of the (...) investigation, I understand that the Royal Commissioners will be examining various matters associated with the (...). Accordingly, it seems appropriate that the ASC will limit its investigation to certain particular aspects of (...) activities, but will defer finalising its investigation until the Royal Commissioners have completed their examination of persons associated (...). ...

(3) ...

(4) ...

(5) By reason of section 14A of the ASC Act, the direction previously given by the National Companies and Securities Commission, in effect establishing the Royal Commission as a special investigation pursuant to the Companies (Victoria) Code, is deemed to continue as if the Royal Commission were an investigation under the ASC Act. I understand that the Royal Commissioners are happy to continue to give effect to that investigation. However, it is necessary that the ASC delegate to the Royal Commissioners powers of investigation. This delegation by the ASC is permitted under section 102 of the Act to staff members (which term would not include the Royal Commissioners), and to other persons with the Minister's approval. Unless you wish some other procedure, the ASC will seek the approval of the Minister to a delegation of investigative powers under section 102 to the Royal Commissioners. However, I assume that any delay in obtaining that approval will not jeopardise the activities of the Royal Commission to the extent that delegations can be made to employees of the Royal Commission, who are also 'staff' of the ASC for the purposes of the Act, as described below.

(6) I understand that the Royal Commissioners would like Messrs Megay, Christie and Holmes, each of whom are staff of the ASC (presently on unpaid leave and seconded to the Royal Commission) to be delegated powers of investigation. The ASC is prepared to make that delegation of authority, subject to the agreement of the Royal Commissioners as to appropriate procedures to ensure that the ASC is properly responsible for the acts of its staff members. It seems appropriate that the ASC (whose acts are subject to administrative and judicial review in accordance with applicable Commonwealth law) can monitor and, if necessary supervise, the actions of staff to whom authority is delegated under section 102. For this reason, it is appropriate that the delegations be on the condition that:

(a) All procedures for investigations adopted by the ASC are complied with by such delegates (in which regard I note that the Royal Commission already holds a copy of the draft investigative procedures manual under consideration by the ASC);

(b) On a monthly basis, the delegates report briefly to the ASC as to the circumstances in which their authorities may have been exercised by reference to persons examined and notices issued and answered; and

(c) To the extent that the delegate is exercising delegated powers, the delegate remains subject to direction by the ASC (although in practice, the ASC would only intend to give any such direction after consultation with the Royal Commissioners).

In addition, the ASC will authorise the other ten employees of the Royal Commission nominated by you to exercise power under section 29.

(7) There would seem to be a public benefit in an exchange of information obtained by both the ASC and the Royal Commission pursuant to the respective investigations.

Under section 127 of the ASC Act, the ASC is bound to take all reasonable measures to protect from all unauthorised disclosure information given to it in confidence. However, the Chairperson of the ASC may authorise the disclosure of information where satisfied that the particular information will enable or assist the government of the State or an 'agency' of a State, to perform a function. This power of the Chairperson under section 127(4) may be delegated to a staff member. I have discussed appropriate arrangements with the Chairman, Tony Hartnell, and he is satisfied that it would be appropriate for particular information relevant to the Royal Commissioners to be disclosed to the Royal Commissioners or nominated staff of the Royal Commission. ...

Secondly, you could be authorised in relation to information obtained by you under powers delegated to you to disclose that information to the Royal Commission. The Chairman would be prepared to delegate that function to you.

In relation to information which may be held by the Royal Commissioner, and would assist in investigations of the ASC, the ASC would propose to issue a notice to the Royal Commissioners under section 30 of the ASC Act, in order that such disclosures as may occur was by operation of law. ...

(8) ...

(9) ...

Would you please indicate whether the above would represent an arrangement satisfactory to the Royal Commissioners. Pending the consideration of these matters, I shall arrange as a matter of urgency for the delegation to staff to be submitted to the next meeting of Commission members, in accordance with paragraph (6). Yours sincerely,

STEPHEN MENZIES"

Mr Menzies at the relevant time was the special adviser for national investigations and a staff member of the ASC, office of the Chairperson, Sydney.
Prior to the establishment of the Royal Commission Ms Megay was employed as a legal officer by the Corporate Affairs Commission in Victoria. From 29 October 1990 to 31 December 1990 she was appointed to and performed the functions of the position of Director of Investigations of the Royal Commission. She was appointed to that position by the Chief Executive of the Attorney-General's Department of the State of Victoria. Her appointment required her to report directly to the Chairman of the Royal Commission. It will be necessary to say more about her status after the commencement of the ASC Law, but it is sufficient at this point to observe that in January 1991, and thereafter, she was treated by the ASC as a member of the staff of the ASC on unpaid leave seconded to the Royal Commission.
Section 102 of the ASC Act, referred to in para.(5) of the draft letter, provides:

"102(1) The Commission may, by writing under its common seal, delegate to a person all or any of its functions and powers.

(2) The Commission shall not, without the Minister's approval, delegate a function or power to a person other than:

(a) a member;

(b) a staff member; or

(c) a person who, by virtue of the regulations, is a prescribed person in relation to the delegation.

(3) ...

(4) ...

(5) In the performance of a function, or the exercise of a power, delegated under this section, the delegate is subject to the Commission's directions.

(6) Where a function or power conferred on the Commission by or under a law (including this Law) and delegated under this section is performed or exercised by the delegate, it shall, for the purposes of that law and this Law, be deemed to have been performed or exercised by the Commission.

(7) ..."

As anticipated by the draft letter and the resolutions of the ASC, a delegation was made under s.102 to Ms Megay by the ASC on 11 February 1991. Delegations were also made to other staff members of the ASC. However no delegation under that section was made to the Royal Commissioners, nor was there any other delegation of "powers of investigation" under the ASC Law to the Royal Commissioners.
In purported exercise of their delegated powers Ms Megay and the other delegates, from July 1991, used the coercive powers of examination under Division 2 of Part 3 of the ASC Law, and inspected books under Division 3 of Part 3. This process commenced with the service on Mr Johns of a Notice Requiring Appearance At An Examination dated 5 July 1991. The Notice was in the form required by regulation 4 of the Australian Securities Commission Regulations. It informed Mr Johns that "in relation to an investigation of the activities of the Tricontinental group of companies...for the years 1985 to 1990 inclusive" under sub-s.19(2) of the ASC Law he was required to appear for examination on oath or affirmation and to answer questions put to him in relation to the investigation and to give the ASC all reasonable assistance in connection with the investigation. The Notice was signed by Ms Megay as a person authorised by the "Commission" (that is the ASC) to conduct the examination. Pursuant to that and similar notices the examinations of Mr Johns, and other witnesses, occurred.
The primary judge observed that the submission that the arrangement made on about 11 February 1991, and the resolutions passed to implement it, were unlawful, raised the question of the proper construction of the ASC Law, and in particular whether the purpose of aiding a Royal Commission was a proper purpose for which the statute conferred power on ASC. That observation is undoubtedly correct. In rejecting the submission, his Honour said:

"The subject matter of the Royal Commission's enquiry - the collapse of the Tricontinental Group - was squarely within the province of the ASC. Subject to compliance with Part 3 of the ASC Law, the ASC could investigate that collapse itself. It would be within power for the ASC to make arrangements with others for the purpose of such an investigation. But in fact another public body was lawfully carrying out an investigation of its own into the same subject matter. Broadly speaking the ASC had three courses open to it: do nothing, conduct its own investigation or aid the Royal Commission. Mr Johns' argument would accept a decision to take the first two courses as proper and lawful, but not the third. That is to say Parliament's intention, as it appears from the ASC Law, would be that inaction or duplication were all right, but co-operation was not."

His Honour referred to sub-s.1(2) of the ASC Law which provides:

"In performing its functions and exercising its powers, the Commission must strive:

(a) to maintain, facilitate, and improve, the performance of companies, and of the securities markets and futures markets, in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy; and

(b) to maintain the confidence of investors in the securities markets and futures markets by ensuring adequate protection for such investors; and

(c) ...

(d) to administer national scheme laws effectively but with a minimum of procedural requirements; and

(e) ...

(f) ...

(g) to take whatever action it can take, and is necessary, in order to enforce and give effect to national scheme laws."

Reference should also be made to sub-s.1(3) which provides that: "This Act has effect, and is to be interpreted, accordingly". The primary judge concluded that there were clear indications in the language of sub-s.1(2) that Parliament did not intend the operation of the ASC Law to be limited in the way which Mr John's argument would require. His Honour concluded that the purpose of aiding the Royal Commission was a purpose completely consistent with the objects of the Act; and that this conclusion gained further support from sub-s.127(4) to which reference is made later in this judgment.

Counsel contends that the purposes for which the powers in Part 3 of the ASC Law may be exercised are to be determined from the specific provisions in Part 3, and not from the general object provisions such as sub-s.1(2). It was submitted that the general purpose of aiding the Royal Commission by making available to it the ASC's powers to obtain evidence and information under Part 3 was not a purpose of or authorised by any of the specific statutory provisions within Part 3 (which includes ss.13, 14 and 14A). Further, it was submitted that the Ministerial direction given to the NCSC on 7 September 1990 to arrange for an investigation into the affairs of Tricontinental by the three Royal Commissioners required expressly that the investigation be by the Royal Commissioners personally. The only power able to be exercised under s.14A of the ASC Law was a power of the ASC to comply with or give effect to the direction in accordance with its terms, with such modifications, (if any), as the circumstances required, i.e. to arrange an investigation by the Royal Commissioners as delegates of the ASC. It was submitted that s.14A did not permit the Ministerial direction to be complied with or carried out by any other person nominated by the ASC as this would be contrary to the express terms of the direction and inconsistent with its obvious purpose of empowering the Royal Commissioners to simultaneously conduct an investigation under Part VII of the Code with their Royal Commission.
We are unable to accept these submissions. Subsection 14A(2) requires that the Ministerial direction has effect "as if it were a direction to the Commission under sub-s.14(1)". Subsection 14(1) empowers the Minister to "direct the Commission to investigate" a particular matter of the kind enumerated in sub-s.14(2). Under para.292(1)(b) of the Code a Ministerial direction could require an investigation to be carried out either by the NCSC or by an inspector to be appointed by the NCSC. The option which hitherto existed in the Code for the conduct of an investigation by an inspector appointed by the NCSC was not re-enacted in the ASC Law. In contrast with the earlier provisions, the ASC Law provides only for investigations to be carried out by the ASC, although in furtherance of that function the ASC is empowered by sub-s.14(4) and s.102 to delegate all or any of its functions and powers. That a direction under sub-s.291(1) of the Code is to continue under the ASC Law as an investigation by the Commission is reinforced by sub-s.14A(3) of the ASC Law which requires that the investigation "as continued by the Commission, is taken to be an investigation undertaken under section 14."
A direction to which s.14A applies has effect by operation of the section according to its terms. Such a direction cannot lapse. There is nothing in the section that would allow it to do so and there are powerful indications that it does not. Sub-section 14A(2) operates of its own force to modify the direction as the circumstances require so that it has effect as if it were a direction to the ASC. Paragraph 14A(3)(a) commands the ASC to comply with the direction "as it has effect because of subsection (2), by continuing the investigation in accordance with the direction as it so has effect." The nature of the obligation unequivocally imposed upon the ASC by sub-s.14A(3) serves to reinforce the conclusion that the wide language of sub-s.14A(2) is not to be read down and that a direction to which s.14A applies may take effect with substantial modifications.
To the extent that the Ministerial direction required the NCSC to arrange for an investigation into the affairs of Tricontinental by the Royal Commissioners, under para.14A(2)(b) modification of that direction was required by the circumstance that the ASC Law no longer provided the option, available under para.292(1)(b), for the investigation to be carried out by an inspector to be appointed by the "Commission".
The conduct of the ASC and Ms Megay which Mr Johns seeks to impugn must be considered against the very unusual circumstances which had happened. From the commencement of the Royal Commission, the NCSC was required by Ministerial direction to conduct an investigation into the affairs of Tricontinental, on terms of reference identical to those of the Royal Commission, and had arranged for the Royal Commissioners to carry out that investigation. In the performance of that investigation, coercive powers for the examination of witnesses and for the inspection of books, similar to those arising under Part 3 of the ASC Law, were available under the corresponding provisions of the Code. The Royal Commissioners had also received delegations of power under sub-s.45(4) of the National Companies and Securities Commission (State Provisions) Act 1981 which enabled them to exercise similar investigative powers arising under Part VI of the former Act and ss.7-10 of the latter Act. Had the ASC Law not come into operation, the Royal Commissioners could have conducted examinations of Mr. Johns and others during 1991 under those powers. It would have been open to the Royal Commissions to exercise those powers in relation to the examination of witnesses under s.10 of the National Companies and Securities Commission (State Provisions) Act in public hearings. When the ASC Law came into operation and superseded the co-operative scheme laws, the ASC was obliged to continue the investigation into the affairs of Tricontinental. At the same time the Royal Commissioners were continuing their investigation pursuant to their appointment under their letters patent.
The investigation directed by the Ministerial direction could lawfully be carried out by the ASC through Ms Megay, provided that the delegation of ASC power to her was valid. Notices which required Mr Johns and others to appear for examination in relation to the investigation directed by the Ministerial direction could lawfully be given by the ASC. Although the Royal Commissioners were conducting an investigation pursuant to terms of reference which were identical to the description of the subject matter of the Ministerial direction, and were required to report thereon, the ASC was not thereby deprived of power to investigate the same subject matter. It is a requirement of Part 3 of the ASC Law, (sub-s.17(2)) that at the end of an investigation under s.14, the ASC shall prepare a report about the investigation, and distribute that report in accordance with s.18. There is no evidence that the ASC does not intend to fulfil this obligation, and the Court was informed in response to a question from the Bench, that the Commission intends so to report. It will be noted that in para.(5) of the draft letter of 31 January 1991 referred to in the resolutions of the ASC passed on 11 February 1991, s.14A is referred to as the source of power under which the investigation directed by the Ministerial direction was to continue. The notion expressed in the draft letter that the investigation is to continue "as if the Royal Commission were an investigation under the ASC Act" is a muddled one, but in the result no delegation under s.102 was made to the Royal Commissioners. The inference arising from paras.(5) and (6) of the draft letter, is that the delegations made under s.102 to Ms Megay (and to Messrs Christie and Holmes) were for the purpose of carrying out the investigation directed by the Ministerial direction on behalf of the ASC.
We are also unable to accept the further argument advanced in this Court on behalf of Mr Johns that the operation of sub-para.14A(1)(a)(i) is restricted to Ministerial directions where the matter to be investigated relates to the formation of companies. If this were so, s.14A would only apply to directions relating to a narrow part of the field of corporate regulation, in contrast with the unrestricted scope of directions relating to the security industry and the futures industry under sub-paras.14A(1)(a)(ii) and (iii).
This argument is based on the literal wording of sub-para.14A(1)(a)(i). The reference in the sub-paragraph to a direction in force under sub-ss.290(4) or 291(1)(ii), or (iii) of the "relevant previous law of this jurisdiction relating to the formation of companies" is not one which requires the paragraph to be limited in the way contended. The description reflects the style of drafting adopted when the constitutional underpinning of the Corporations Act 1989 (Cwth) and the Australian Securities Commission Act 1989 (Cwth) was removed by the Corporations Legislation Amendment Act 1990 (Cwth) following the decision of the High Court in The State of New South Wales and Others v The Commonwealth of Australia (1989-1990) 169 CLR 482. Section 14A was drafted so as to permit the ASC Law, as the law of the Australian Capital Territory, to be adopted by the States and the Northern Territory, and to enable the new national scheme for corporate regulation to apply uniformly throughout Australia.

The expression "relevant previous law" for the purposes of the ASC Law is defined in Part 1.2 of the Corporations Law, (see sub-s.5(3) of the ASC Law) as follows:

"'relevant previous law', in relation to a jurisdiction, means:

(a) in the case of the Capital Territory - a relevant Act within the meaning of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980; and

(b) in the case of any other jurisdiction - a relevant Code within the meaning of a law of that other jurisdiction."

By s.3 of the Companies and Securities (Interpretation and Miscellaneous Provisions) (Victoria) Code a "relevant Code" includes a number of Codes forming part of the former co-operative scheme legislation in Victoria including the Companies (Victoria) Code. It is that Code, as distinct from the other Codes, which relates to the formation of companies. The expression used in sub-para.14A(1)(a)(i) is descriptive of the Companies (Victoria) Code.

The subsidiary contention of the ASC is that the impugned conduct of Ms Megay can be justified as an authorised exercise of power under s.13 of the ASC Law, and in particular under sub-ss.(3) and (5). The evidence before the primary judge establishes that on 13 December 1990 Ms Megay, acting as a delegate from the NCSC under s.45 of the National Companies and Securities Commission Act 1979 and corresponding provisions of State legislation, determined to conduct an investigation under s.16A of the Code into possible breaches of ss.269(8A) and 229(2) of the Code by one or more of the directors of Tricontinental, she having reason to suspect the commission of those offences. The NCSC was therefore investigating those matters under a relevant previous law of the jurisdiction. On 1 January 1991 they became matters which the ASC was empowered to investigate under sub-s.13(3), and to continue the NCSC's investigation under sub-s.13(5). Furthermore, on 18 June 1991 Ms Megay, then purporting to act as a delegate of the ASC, after considering additional information that had become available after 13 December 1990, expressed in writing her opinion that the additional material "reinforced the view formed by me on 13 December 1990 that I had reason to suspect that an offence under sub-s.229(2) of the various State Companies Codes may have been committed by some or all of the directors of Tricontinental during the period from 1985 to 1990." The additional material also led her to suspect that in the case of all but one of the companies in the Tricontinental group one or more directors of those companies may have committed contraventions of s.556(1) of the various State Companies Codes. Having formed these suspicions she determined to issue notices pursuant to s.19 of the ASC Law to persons whom she believed could "give information relevant to the ongoing investigation of the affairs of the Tricontinental group of companies".
In respect of the matters where Ms Megay had reason to suspect that there had been committed contraventions of provisions of the previous law she was empowered by s.13, as a delegate of the ASC, assuming the delegation to have been valid, to make such investigations as she thought appropriate. However those investigations must relate to the question whether there may have been a contravention of the previous law of the kind suspected: Johns v Connor and Others (unreported judgment, Lockhart J, 7 May 1992 at p 20). If in the course of those investigations the ASC comes to suspect that contraventions of other provisions of the previous law may have been committed the ASC may make such investigation as it thinks appropriate into those matters also, but there is no suggestion that this occurred in the present case. Investigations of the possible contraventions identified by Ms Megay in her memorandum of 13 December 1990 would not empower her to embark on so wide an investigation as that described in the Notices requiring appearance at examinations served on Mr Johns and others, that is, to quote from the Notices, "an investigation of the activities of the Tricontinental group of companies for the years 1985 to 1990 inclusive".
The Notices served on Mr Johns and others were given under s.19 of the ASC Law. Paragraph 19(3)(a) requires that such a notice shall "state the general nature of the matter" which the ASC is investigating, or is to investigate. In Australian Securities Commission v Graco (1991) 29 FCR 491 at 495 Jenkinson J observed:

"In its context the expression 'general nature' invites both comprehensiveness and brevity in description of the matter, and gives no encouragement to definitional particularity."

In an analogous situation, in relation to the investigative power given by sub-s.155(1) of the Trade Practices Act 1974 it has been said that to be valid a notice served on a person requiring information to be furnished "relating to a matter that constitutes, or may constitute, a contravention of this Act" must identify the "matter" in such a way that the recipient can perceive the general ambit of the subject matter of the investigation that is being undertaken: Davenport v Trade Practices Commission (1983) 70 FLR 123 at 132 and Bannerman and Another v Mildura Fruit Juices Pty Ltd (1984) 55 ALR 367 at 373-374. See also W.A. Pines Pty Ltd v Bannerman (1980) 30 ALR 559 per Brennan J at 565-566. Likewise, a notice requiring appearance at an examination given under the ASC Law and Regulations must, on a reasonable reading, identify the "matter" that the ASC is investigating.
The Notices given by Ms Megay do not identify possible breaches of the previous law by one or more of the directors of Tricontinental as the subject matter of the investigation. The Notices given to Mr Johns and others do not comply with the requirements of Part 3 of the ASC Law if the investigation in connection with which they were given is an investigation conducted under s.13 into possible breaches of the previous law: Johns v Connor and Others.
A matter into which investigation is made under s.13 will be the possible contravention of a specific law and a proper description of that matter in a notice given under s.19 will usually include a reference to that law. However a matter into which investigation is made under s.14 may not be so limited. For example a matter to be investigated under sub-s.14(1) may, by para.14(2)(c), be "a matter relating to...the affairs, or particular affairs, of a corporation": see Australian Securities Commission v Graco at 496-498. In the present case the investigation which the ASC was required by s.14A to continue pursuant to the Ministerial direction was an investigation into a matter broadly described in the direction. The description of the matter contained in the Notices given to Mr Johns and others was sufficient to "state the general nature of the matter" for the purpose of that investigation. The question however is whether the Notices were given for the purpose of continuing under s.14A the Tricontinental investigation directed by the Ministerial direction, or were given for the purpose of pursuing enquiries into suspected breaches of specific laws as part of an investigation or investigations being conducted under s.13.
Counsel for the appellant contends that the Notices were given by Ms Megay for the latter purpose and to obtain information for that purpose under cloak of investigating the activities of Tricontinental was an improper exercise of power. Reliance is placed on Municipal Council of Sydney v Campbell and Others (1925) AC 338, and The Queen v Toohey; Ex parte Northern Land Council (1980-1981) 151 CLR 170. In the former case the Judicial Committee of the Privy Council at p 343 said:

"A body such as the Municipal Council of Sydney, authorized to take land compulsorily for specified purposes, will not be permitted to exercise its powers for different purposes, and if it attempts to do so, the Courts will interfere. As Lord Loreburn said, in Marquess of Clanricarde v. Congested Districts Board 79 JP 481: 'Whether it does so or not is a question of fact.' Where the proceedings of the Council are attacked upon this ground, the party impeaching those proceedings must, of course, prove that the Council, though professing to exercise its powers for the statutory purpose, is in fact employing them in furtherance of some ulterior object."

In the latter case Gibbs C.J. at 186-187 said:

"Under a statutory provision such as the present, the nature and extent of the power 'must be inferred from a construction of the Act read as a whole'. Padfield v. Minister of Agriculture, Fisheries and Food (1968) AC 997, at p 1033. The principle, which is clearly settled, at least in the case of authorities subordinate to the Crown, is that a statutory power may be exercised only for the purposes for which it is conferred. As Latham C.J. said in Brownells Ltd. v. Ironmongers' Wages Board

(1950) 81 CLR 108, at p 120:

'No inquiry may be made into the motives of the Legislature in enacting a law, but where a statute confers powers upon an officer or a statutory body and either by express provision or by reason of the general character of the statute it appears that the powers were intended to be exercised only for a particular purpose, then the exercise of the powers not for such purpose but for some ulterior object will be invalid. This question was fully examined in Arthur Yates and Co. Pty. Ltd. v. Vegetable Seeds Committee (1945) 72 CLR 37, at pp 67-69,72,75,76,82,83. and it was there held that subordinate bodies exercising powers conferred by statutes were bound to exercise their powers bona fide for the purposes for which the power was conferred and not otherwise.'"

Mr Johns seeks to discharge the onus of establishing the fact that Ms Megay gave Notices to himself and others for the purpose of specific s.13 investigations, and not for the purpose of continuing the Tricontinental investigation under s.14A, by relying in particular on the memorandum of Ms Megay dated 18 June 1991 to which reference has been made, the draft letter of 31 January 1991, and the February 1992 correspondence. This argument involves a re-assessment of the evidence taking into account the further evidence.
In the memorandum of 18 June 1991, Ms Megay refers to sub-ss.13(3) and 13(5). She then records grounds for her suspicion that one or more directors of Tricontinental may have committed breaches of sub.ss.229(2) and 556(1) of the various State Companies Codes, and concludes:

"In the circumstances I have formed the necessary suspicion upon which to base a series of notices pursuant to subsection 19(2) of the ASC Act with a view to investigating for the purposes of the due administration of the relevant company law.

I intend to issue notices pursuant to section 19 of the ASC to persons whom I believe can give information relevant to the ongoing investigation of the affairs of the Tricontinental group of companies...".

In the draft letter of 31 January 1991 there is express reference to investigations into five corporate groups other than Tricontinental being conducted by the ASC into suspected breaches of the law, inferentially under s.13 of the ASC Law. In the February 1992 correspondence, Mr Johns' solicitor sought as a matter of urgency documents evidencing the arrangement between the ASC and the Royal Commission, and the exercise of ASC powers. The correspondence suggests that Mr Hartnell, as chairperson of the ASC, received several detailed letters of request on 20 February 1992. He immediately responded, saying he was studying the correspondence and would attempt to deal with the matter quickly, "although it may take me a little while to get on top of its full details". Later that day he wrote again to Mr Johns' solicitor saying in part:

"I refer to your letters of 11 February 1992, 17 February 1992 and 19 February 1992, all referable to your client Ian Malcolm Johns.

The ASC at all relevant times was conducting investigations pursuant to suspicion of a contravention of a relevant law. To the extent that the ASC examined your client, it did so as a person reasonably suspected or believed as able to give information relevant to those investigations.

The investigations of the ASC and the Royal Commission into the Tricontinental Group have overlapping objects of interest. Accordingly, to the extent of that overlap, it would obviously be of practical interest to us both how the other exercised investigative powers, and the deliberations of the ASC was concerned with those matters.

You have now requested material which, in part, either expressly or by inference, goes to the nature of our investigations into contraventions of law. It is our belief that your actions could prejudice the conduct of our investigations. Accordingly, we reject your request for papers and other material as contained in your letter of 11 February 1992..."

Before dealing with this evidence it is necessary to look more broadly at the course of the several investigations being conducted by the ASC, including the Tricontinental investigation.
The broad terms of the Ministerial direction required an investigation into, amongst other topics, what matters and events caused the collapse of Tricontinental. That topic necessitated enquiry into transactions which caused loss to Tricontinental. The transactions investigated included loans to other corporations. Some of these loans were, apparently, to corporations named as the subject of the five investigations in the draft letter of 31 January 1991. It has been assumed that these investigations were instituted by the NCSC and not by Ministerial direction, and hence were being continued by the ASC under s.13, although the evidence leaves this unclear. A schedule of interviews with Mr Johns admitted into evidence shows that the examinations conducted by Ms Megay under Part 3 powers dealt with 14 separate "subjects", each identified by the name of a corporate group unrelated to Tricontinental. It can be inferred that these "subjects" were borrowers from Tricontinental. In the case of nine of these subjects there is no evidence that the ASC had, at the time of the examination of Mr Johns, separate investigations under s.13 on foot into possible breaches of the law. It is possible that the examinations by Ms Megay in respect of these nine subjects revealed evidence of possible breaches of the law by one or more people but even if that were so, that would not indicate that the ASC was conducting investigations under s.13 about those offences. The Ministerial direction to investigate the affairs of, and transactions engaged in, by Tricontinental included a direction to enquire whether any person was guilty of any criminal offence or breach of statutory duty. It therefore appears that in relation to at least nine of the corporate groups about which Mr Johns was examined, the examinations must have occurred as a direct part of the Tricontinental investigation.
In respect of five corporate groups which appear to have been involved in transactions with Tricontinental, there were overlapping investigations being conducted by the ASC during 1991 in the sense that enquiries made and information gathered by the ASC about a particular transaction were relevant both to the Tricontinental investigation and to other specific investigations instituted by the ASC on suspicion of the commission of an offence. In addition, there was overlap between the specific investigation which Ms Megay determined on 13 December 1990 to hold into possible breaches of sub-s.229(2) and s.269(8A) of the Code by Tricontinental directors, and the Tricontinental investigation being conducted under Ministerial direction.
The Notices given under s.19 by Ms Megay identify the matter in relation to which the addressee was required to appear for examination and to give all reasonable assistance as the Tricontinental investigation. In giving those Notices Ms Megay purported to act on behalf of the ASC. It was open to her, as a delegate of the ASC, to give those Notices as part of the investigation into Tricontinental if, on reasonable grounds, she suspected that the addressee could give information relevant to that matter. There is no reason to doubt that she so suspected in the case of Mr Johns, or in the case of any other person to whom a Notice was given.
In all, 151 Notices were given. The Notices were in a standard form, each identifying the "matter" to which the Notice related as the Tricontinental investigation. A presumption of regularity operates in favour of the Notices being given in proper exercise of power in relation to that investigation.
Against this background the items of evidence relied on by the appellant must be considered. The memorandum of 18 June 1991 when read in its entirety is ambiguous as to the source of power for the investigations in respect of which Ms Megay proposed to give s.19 Notices. The memorandum commences with references to sub-ss.13(3) and 13(5) of the ASC Law, and to her decision made on 13 December 1990 to investigate possible breaches of sub-s.229(2) and 269(8A), but then refers to transcripts and other material of the Royal Commission. The concluding paragraphs, the principal two of which are set out above, refer to the formation of the necessary suspicion to base a series of s.19 Notices. That suspicion was a pre-requisite to the giving of Notices whether the source of power for the investigation to which the Notices related was s.13 or s.14A. Significantly, Ms Megay then says that Notices will be issued "to persons whom I believe can give information relevant to the ongoing investigation of the affairs of the Tricontinental group of companies".
The draft letter of 31 January 1991 certainly refers to the five other investigations on foot, but the letter overall evidences an intention that the ASC, through Ms Megay and others as its delegates, will pursue the investigation into the affairs of Tricontinental which the ASC was obliged to continue pursuant to the Ministerial direction in co-operation with the Royal Commission: see para.(5) in particular.
The second letter of Mr Hartnell dated 20 February 1992 at first sight would appear to give support to the appellant's argument. However the letter was obviously written in haste, and its text does not suggest that Mr Hartnell's attention had been directed to the matters that have been addressed to this Court. His statement that at all times the ASC was conducting investigations pursuant to a suspicion of a contravention of a relevant law was by way of explanation for his decision not to disclose information which went to the nature of the ASC's investigations into contraventions of the law. His statement is contrary to the evidence of Mr Menzies, who had been closely involved in the investigations, that an investigation by the ASC was continuing into the affairs of Tricontinental. Mr Menzies was not asked one question in cross-examination on that part of his evidence. Moreover, the purported exercise of the ASC power in giving Notices to Mr Johns and others was not an exercise of power in which Mr Hartnell played any part, even as a member of the ASC. The exercise of power was by Ms Megay as the delegate of the ASC. Insofar as it may be relevant to consider the state of mind of officers of a corporate entity in determining whether an exercise of power on behalf of that entity was for a proper purpose, the primary consideration must be the state of mind of the person who acted: see Arthur Yates and Company Proprietary Limited v The Vegetable Seeds Committee and Others (1945) 72 CLR 37 at 69, 76, and 82. Mr Hartnell's statement should not be relied on to supplant the opinion of the Court based on the weight of other evidence. The other evidence favours the conclusion that Ms Megay acting as delegate of the ASC gave the Notices, and exercised power under Part 3 of the ASC Law, as part of the investigation being continued under s.14A by the ASC into the affairs of Tricontinental pursuant to the Ministerial direction.

The trial Judge discussed the objectives of the ASC Law and said:-

"The purpose of aiding the Royal Commission would in my opinion be a purpose completely consistent with those objectives."

His Honour did go on to say:-

"Thus, in terms of the direction, the ASC arranged (in a modified manner) for the continuation of an investigation into the affairs of the Group by the Royal Commissioners."

However, I am of the view that the direction of the Attorney-General had lapsed and that, even if it had not, the investigation into the Tricontinental group of companies in which Ms Megay was involved was not an investigation by the ASC but an investigation by the Royal Commissioners.

The Royal Commissioners also considered that the ASC's powers were being used to aid the Royal Commission. In a ruling given on 3 March 1992, the Royal Commissioners said inter alia:-

"16. The Commission has no reason to believe that there had been any irregularity in the use of ASC powers by the officers seconded to it, or in the circumstances of their secondment by the ASC and the later delegation of powers to them by the ASC. In particular, we see no proper basis for the submission that the ASC could not use its powers in aid of the Commission's inquiry, given that the material in question related to matters which were in any event appropriate for investigation by the ASC itself, in accordance with its legislation. It must also be remembered that one of the functions of the Commission is to make recommendations as to whether proceedings should be instituted against any person or persons, in which case the ASC would most likely be involved. The Commission regards all the ASC material as being, ultimately, subject to the control of the ASC. That material will remain within the control of the ASC when the Commission is wound up."

In rulings published on 14 February 1992, the Royal Commissioners said, inter alia:-

"Submissions by counsel assisting included the following points:-

(a) An investigation under section 13 overlaps or is similar to terms 1 and 2 of the Commission's terms of reference.

(b) Sections 25(3) and 127(4) entitled Mrs Megay, as a delegate, to release ASC transcripts to the Commission. Section 25(3) is in wide terms and ought not be read down. ...

(c) Once the transcripts were released by the ASC, it was a function of the Commission to determine the extent of publication and use to be made of the transcripts, subject only to such conditions, if any, as were imposed by the ASC. In fact the releases were unconditional.

(d) Mrs Megay was a staff member of the ASC (or predecessor bodies) throughout her secondment to the Commission. (Similarly with the other relevant persons with delegated powers.) She functioned as an ASC staff member when conducting the examinations under section 13.

(e) She conducted each examination because she had reason to suspect that there may have been a contravention of the companies legislation."

In my opinion, the evidence established that the ASC was not conducting its own general investigation into the Tricontinental group of companies, merely that it was aiding the Royal Commission.
Although s.127(4) of the ASC Law empowered the ASC to pass information to the Royal Commission, the ASC had no general authority to use its powers for the purposes of the Royal Commission. It could only use its powers to examine witnesses for the purposes of an investigation which it was undertaking. Ms Megay did not pass over to the Royal Commissioners information which the ASC had otherwise obtained. She passed over to the Royal Commission information which she obtained by exercising the compulsory powers of the ASC.
The finding that the ASC was not itself conducting an inquiry into the Tricontinental group of companies leads to the result that Ms Megay's exercise of the compulsory powers of the ASC was wrong. She used those powers otherwise than for the purposes of the ASC, for the ASC was not investigating the matter which she nominated in her notices and summonses. To do so was to use the statutory powers for an extraneous purpose and in a manner which was not authorised by the ASC Law.
To assist the Royal Commission, the ASC conferred ASC powers upon the Director of Investigations of the Royal Commission. That in itself was an excessive and invalid exercise of power. One object of the ASC Law was to ensure that investigations were undertaken by and powers were exercised by the ASC through its members and staff members. Inspectors were therefore dispensed with. In this light, it is extraordinary that the extensive powers delegated to Ms Megay were delegated to a person who was working full time as Director of Investigations of the Royal Commission and who was on unpaid leave from the ASC.
The arrangement entered into with Ms Megay, the conferral upon her and her assistants of the delegations and authorities and the exercise of those powers breached the fundamental principle succinctly expressed by Mason, Murphy, Brennan and Deane JJ. in O'Reilly v. Commissioners of the State Bank of Victoria (1983) 153 CLR 1, where their Honours said at 48:-

"Like all statutory powers, that power must be used bona fide for the purposes for which it was conferred and that involves that its exercise be not excessive in the circumstances of the case."

The powers were not exercised by Ms Megay and her assistants for the purposes of the ASC but for the purposes of the Royal Commission. And the conferral of the delegations upon Ms Megay and her assistants, unattached officers on leave from the ASC, who were working full time for the Royal Commission enabling them to undertake any investigations they wished to undertake in relation to the Tricontinental group of companies was excessive, being beyond the contemplation of the ASC Law.

In the circumstances, I would declare that the delegations granted to Ms Megay and her assistants and the authorities granted to other members of staff of the Royal Commission were invalid. I would declare that the exercise of the ASC powers under ss.19, 30 and 33 of the ASC Law was unlawful. I would order that all copies of the transcripts of the examinations obtained as a result of the exercise of those powers and held by Ms Megay or other members of staff of the Royal Commission be returned by Ms Megay to the ASC.
The Solicitor-General for Victoria submitted that there was no power to make an order in this respect against the Commissioners personally. He referred to s.21A of the Evidence Act which confers immunity from suit upon those persons acting as Royal Commissioners. It appears to me that there would be such power but I need not discuss the issue. There is no reason to doubt that, if the order is directed to Ms Megay, the Director of Investigations, that order will be carried out and the Royal Commissioners will give to Ms Megay such support as she may request.
The return of the transcripts to the ASC will not preclude the Chairman of the ASC or a delegate from releasing the transcripts to the Royal Commissioners under s.127(4) should it be appropriate to do. The Royal Commissioners are an agency of the State of Victoria. However, such a release should not be made save by a delegate who is a full time staff member of the ASC independent of the Royal Commission.
I would not order that any documents obtained by the use of these powers be removed from the possession of the Royal Commission. The Royal Commissioners could have obtained the documents by exercising their own powers. It is too late to raise an objection now to what has occurred in that respect.
Only a few of the transcripts of the evidence taken under the compulsory powers were tendered in evidence before the Royal Commissioners. The remainder dealt with transactions which the Royal Commission reviewed privately but did not take further because they did not raise "new or significantly different issues which, in the Commission's view, ought to be canvassed in detail in public hearing" (Ruling of the Royal Commissioners 3 March 1992, para 10).
In addition to the transcript of Mr Johns' examination, another 7 transcripts were tendered in evidence. On 14 February 1992, the Royal Commissioners ruled that they would not rely upon the transcripts of Mr Johns' examination. The Royal Commissioners heard evidence in public from 4 of the examinees about the matters which have been dealt with in the private ASC examinations. Another 2 of the transcripts were later thought to be of no further use to the Commission and the 7th transcript was thought to be sufficiently covered by the evidence given by another witness. Accordingly, those transcripts themselves are no longer of importance to the Royal Commission.
But the transcripts have assisted the Royal Commission. What occurred is set out in a paragraph of the ruling of the Royal Commissioners on 9 March 1992:-

"9. It is clear that statements and documents obtained under ASC powers have been of assistance to Commission staff in their investigations and preparation of other material, including the compilation of many folders of relevant documents, and instructions for questions to be put by counsel assisting to witnesses in the Commission hearings. Although the ASC material comprises a relatively small proportion of the material tendered in evidence in Commission hearings, we would nevertheless agree with Mr Merkel's description of the material as being `inextricably interwoven with the general conduct of the Commission'."

Counsel for Mr Johns submitted on this foundation that there should be no public reference about his affairs in the further proceedings of the Royal Commission. Counsel further sought relief against:-

"7.6.1 any further use or exercise of the ASC powers as a consequence of or in reliance upon the resolutions of 11 February, 1991 and the delegations granted in accordance therewith. 7.6.2 any further use of the Appellant's ASC transcripts by the ASC.

7.6.3 any further use of the ASC information and material obtained by or on behalf of the ASC and the Tricontinental Royal Commissioners in relation to any further investigative action proposed to be taken against or in respect of the Appellant.

7.6.4 the direct or indirect use of the ASC information and material by the Tricontinental Royal Commissioners for the purpose of making any report adverse to or findings against the Appellant. 7.6.5 any final report or findings adverse to the Appellant which are directly or indirectly based upon the ASC information and material.

7.6.6 any publication by the ABC or the HWT of the content or information contained in the Appellant's ASC transcripts."

However, it is too late to put the clock back. It may be accepted that Mr Johns was not legally represented during most of the hearings of the Royal Commission and that he assumed that Ms Megay was entitled to exercise the ASC powers which she did. But, in this area, as in any other, if administrative decisions and actions are to be challenged, they ought to be challenged promptly. Mr Johns did not make any formal challenge to the exercise by Ms Megay of the ASC powers until these proceedings were instituted, which was at a very late stage after the transcripts had been used in the examination and cross-examination of witnesses in open session.
I would not make any order against the Royal Commissioners as sought and I therefore need not consider whether there would be any power to do so.
The evidence does not suggest that the Royal Commissioners have acted otherwise than in good faith and in accordance with law. The submission by counsel for Mr Johns that the Royal Commissioners have been guilty of misfeasance in public office and conspiracy is entirely without foundation. The extracts from the rulings of the Royal Commissioners set out above show that the Royal Commissioners understood that Ms Megay and her assistants exercised ASC powers to obtain information for the purpose of s.13 investigations and acted under ss.25(3) and 127(4) of the ASC Law to pass over information to the Royal Commission when it seemed to them appropriate to do so. It was the responsibility of the ASC, not of the Royal Commissioners, to ensure that what was done in the purported exercise of ASC power was properly done.
The next issue is whether the Herald and Weekly Times Limited and the Australian Broadcasting Corporation should be restrained from further use of the transcripts of Mr Johns' examinations. What occurred was that, when the 8 transcripts obtained under the compulsory ASC powers were tendered in evidence before the Royal Commission, they were immediately made available to members of the public. Members of the media took advantage of their availability.
I pause to say that it was unfortunate that the transcripts were made available to the media. The examinations were conducted in private. See s.22 of the ASC Law. Notwithstanding that there is a power of disclosure conferred by s.25(3) and s.127(4) of the ASC Law, the ASC Law does not have it in mind that such transcripts will be made available to members of the public generally. This is one of the problems which arose from the procedure which was adopted. Had the Royal Commissioners themselves been exercising ASC powers, they would not have thought it proper to release the transcripts to the public. Section 127(4) would not have permitted it and s.25(3), although unlimited in terms, is given careful application having regard to the basic principle established by s.22 that an examination is in private. It was because the staff of the Royal Commission considered that the transcripts of the examinations had been formally passed over from the ASC to the Royal Commission and because the Royal Commissioners wished to proceed so far as possible in public that the Royal Commissioners or the staff of the Royal Commission thought that the transcripts should be made available to the public including the media. But the confidentiality which the ASC Law confers upon the transcripts should always have been protected.
Section 25(3), in the context in which it appears in the ASC Law, is a facultative provision which empowers the ASC when it is appropriate to do so in the performance of its functions to supply a copy of a transcript to a person on such terms and conditions as the ASC decides. Section 25(3) does not override the provisions as to confidentiality appearing in ss. 22 and 127(1). Nor does it override the provisions of s.127(4) which specify the circumstances in which information held by the ASC may be communicated to others for purposes other than those of the ASC.
For some months Ms Megay released copies of transcripts to the Royal Commissioners pursuant to s.127(4). From October 1991 onwards, transcripts were released in reliance upon s.25(3). In my opinion, s.127(4) is the only provision which empowers the ASC to release information which it holds to a person or agency external to itself in the context that the release is not in furtherance of a function which the ASC is performing. The release of the transcripts from October 1991 onwards to the Royal Commissioners was therefore unlawful. Moreover, as earlier mentioned, it was wrong to give the delegation to release to Ms Megay for her duties lay with the potential recipient. Section 127(4) intends that a decision to release will be made at a high level in the ASC, by the Chairperson or his or her delegate. This is because the release of confidential material can be a sensitive matter. The delegation of the decision-making power under s.127(4) to the Director of Investigations of the Royal Commission was an excessive exercise of power which did not give effect to the intent of the provision.
The Royal Commissioners on 14 February 1992 ruled that they would not make any further use of the transcripts of Mr Johns' examinations and they imposed an order preventing publication of those transcripts. Apparently, the Herald and Weekly Times Limited and the Australian Broadcasting Corporation have challenged in the Supreme Court of Victoria the power of the Royal Commissioners to make such an order. However, as the order was made, the contents of Mr Johns' transcripts have not yet been disseminated to the public at large. There is still confidentiality attached to them. In my opinion, that confidentiality should be protected. I would order that the Herald and Weekly Times Limited and the Australian Broadcasting Corporation forthwith return to Ms Megay all copies which they hold of Mr Johns' examinations and that they be restrained from publishing or disseminating the contents or any part thereof.
The public interest which lies in the protection of the confidentiality which the ASC Law gives to transcripts of examination under s.22 is a strong one. That public interest justifies the Court in making an order protecting the statutory confidentiality which otherwise would be lost.
In Commonwealth of Australia v. John Fairfax and Sons Ltd (1980) 147 CLR 39 at 50, Mason J. referred to the general principle:-

"The plaintiff says that this case falls neatly within a fundamental principle of Equity. The principle is that the court will `restrain the publication of confidential information improperly or surreptitiously obtained or of information imparted in confidence which ought not to be divulged' (Lord Ashburton v. Pape (1913) 2 Ch 469, at p 475, per Swinfen Eady L.J.). In conformity with this principle, employees who had access to confidential information in the possession of their employers have been restrained from divulging information to third parties in breach of duty and, if they have already divulged the information, the third parties themselves have been restrained from making disclosure or making use of the information (Tipping v. Clarke (1843) 2 Hare 383, at p 393 (67 ER 157); Lamb v. Evans (1893) 1 Ch 218 at p 235)."

In the present case, the duty of confidentiality arose from the ASC Law. The breach of that duty in the circumstances I have outlined satisfies the requirement that the information be improperly obtained. An order by way of judicial review may issue to restrain or rectify the breach on application by a person aggrieved, which Mr Johns is insofar as his own transcripts are concerned. Third parties may also be restrained in an appropriate case if it is necessary to do so to rectify the breach or to prevent further damage to the aggrieved party. In the present case, it is appropriate to make an order against the Herald and Weekly Times Ltd and the Australian Broadcasting Corporation for they have been on notice, ever since the Royal Commissioner's orders that there be no further publication of the transcripts of Mr Johns' examinations, that there is confidentiality in them and that they should not be published. Yet, these respondents threaten to publish unless restrained.
The next issue is whether the conduct of the proceedings in the Royal Commission would be likely to prejudice the trial of Mr Johns on three charges which are likely to be heard in the County Court in Melbourne in February 1993. I need not discuss this point at any length. The general nature of Tricontinental's collapse is not only public knowledge in Victoria. Moreover, by now, the position which Mr Johns held as Managing Director of Tricontinental companies is also common knowledge. Further discussion in public about affairs of the Tricontinental companies is unlikely to prejudice a fair trial of Mr Johns on the three charges which are to come up for hearing. The jurors will be able to distinguish the general circumstances of the Tricontinental collapse from the evidence required to establish beyond reasonable doubt the matters with which Mr Johns is charged.

The principle was stated by Gibbs C.J. in State of Victoria v. Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56:-

"There is a contempt of court of the kind relevant to the present case only when there is an actual interference with the administration of justice, or `a real risk, as opposed to a remote possibility' that justice will be interfered with: cf. Attorney-General v. Times Newspapers Ltd (1974) AC at p 299. The essence of this kind of contempt is a `real and definite tendency to prejudice or embarrass pending proceedings': John Fairfax and Sons Pty Ltd v. McRae (1955) 93 CLR 351, at p 372."

In The Queen v. Glennon (High Court of Australia, 6 May 1992) Mason C.J. and Toohey J. said at p 9 of their opinion:-

"As Toohey J. observed in (Hinch v. Attorney-General

(Vic) (1987) 164 CLR 15 at p 74) in the past too little weight may have been given to the capacity of jurors to assess critically what they see and hear and their ability to reach their decisions by reference to the evidence before them."

Applying these tests I am not satisfied that there is a real likelihood of contempt.

The Royal Commissioners are sensitive to the problem. None of the evidence before them and none of the matters on which they will report will bear directly upon the matters which are the subject of the trial. It is, of course, important that counsel be restrained in their addresses. The point of prejudice which Mr Johns raises is a very real one. Extravagant headline grabbing observations by counsel to the Royal Commissioners could prejudice the fair trial of Mr Johns. But if counsel are restrained in their language and deal with matters which are not the subject of the criminal proceeding, a fair trial of the proceedings should not be prejudiced. If a counsel oversteps the mark, the County Court of Victoria will have power to adjourn the proceedings so as to ensure that Mr Johns' trial is a fair one.
The final issue with which I need deal is whether or not his Honour should have extended time to permit the bringing of the proceedings. It seems to me that his Honour's order was a proper one having regard to the importance of the matters involved and to the fact that Mr Johns has not had legal representation until a late stage. His Honour's discretionary order should not be disturbed.
Mr Johns has had partial success. I would order that the Australian Securities Commission pay one-half of Mr Johns' costs of the proceedings below and of the appeal. In relation to the issues raised against them, the sixth and seventh respondents should pay Mr Johns' costs of the proceedings below and of this appeal. The fourth, fifth and eighth respondents should abide their own costs.
The principles of the orders I would propose are:-
1. That the appeal be allowed.

2. That the orders below be set aside and there be substituted therefor the following orders:-

i) Declaration that the conferral of the delegations and authorities upon Ms Megay and other officers of the Royal Commission were void ab initio. ii) Declaration that the summonses and notices issued pursuant to those delegations and authorities were void ab initio.

iii) Order that Ms Megay return to the Australian Securities Commission all copies of the transcripts of examination held pursuant to those delegations which are in the possession of Ms Megay or of other officers of the Royal Commission.

iv) Order that the sixth and seventh respondents return to Ms Megay all copies of the transcripts of the examinations of Mr Johns which were held by them. v) Order that the sixth and seventh respondents be restrained from publishing the transcripts of the examinations of Mr Johns or any part thereof. vi) Order that the sixth and seventh respondents pay Mr Johns costs below and of the appeal in relation to the issues which concerned them exclusively. Order that the first respondent pay one-half of Mr Johns' costs below and of the appeal. Order that the fourth, fifth and eighth respondents abide their own costs.

[1992] FCA 421

19 JUNE 1992