Johns v Australian Securities Commission

[1992] HCATrans 202

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M29 of 1992

B e t w e e n -

IAN MALCOLM JOHNS

Applicant

and

AUSTRALIAN SECURITIES

COMMISSION

First Respondent

ANTHONY GEOFFREY HARTNELL

Second Respondent

NOREEN CLAIRE MEGAY

Third Respondent

ALBERT EDWARD WOODWARD

Fourth Respondent

DOUGLAS GILBERT WILLIAMSON

Fifth Respondent

THE HERALD AND WEEKLY TIMES LTD

Johns 93 26/6/92

Sixth Respondent

AUSTRALIAN BROADCASTING

CORPORATION

Seventh Respondent

THE STATE OF VICTORIA

Eighth Respondent

Application for special leave

to appeal

BRENNAN J

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON FRIDAY, 26 JUNE 1992, AT 9.20 AM

(Continued from 25/6/92)

Copyright in the High Court of Australia

BRENNAN J:	Mr Holley.
MR HOLLEY:	Yes, Your Honour.
BRENNAN J:	Mr Holley, we wish to raise a question which

perhaps concerns chiefly the ASC and it is this,

that the decision to disclose information to the

Royal Commission or to provide the Royal Commission

with copies of transcripts of examination in
circumstances where the Commission was not obliged

to maintain confidentiality of that information or

those documents is a decision which may attract -

first of all, it is a decision which, one would

think, would have to be exercised in the manner in

which Parliament intended and that, of course,

brings in the provisions of section 5 of the

AD(JR) Act.

It is also a question as to whether the exercise of that power is conditioned upon the according of natural justice to any person whose	reputation or interests might be affected by the
decision to be made. In other words, it may not be
simply a question of the existence of a power to
disclose or to provide copies and, in those
circumstances, although the proposition that I have
just been outlining may not be precisely as in
accordance with the four points that we raised when we came back after hearing Mr Merkel's submissions,
it is something upon which we wish to provide your
client with an opportunity for making any further
submissions as it sees fit.

I think the Court, perhaps, should adjourn for

a few minutes.

Johns 94 26/6/92

AT 9.23 AM SHORT ADJOURNMENT

UPON RESUMING AT 9.47 AM:

MR HOLLEY:	I thank the Court for its indulgence.
BRENNAN J:	Not at all, Mr Holley, these are problems which,

unfortunately, confront all of us at some stage of

a professional career.

MR HOLLEY:  Thank you, Your Honour. Your Honour, I only

have a short submission to make in relation to

Your Honour's point and that is the purpose of

Division 2 on confidentiality and the nature of and

the purpose of the proceedings as being an

investigation into activity of a statutory body

which is quite separate and distinct from it being

anything in the nature of a judicial proceeding.

The question was referred to in the judgment

of the Full Court at page 193 of the application

book, volume 1, Your Honours, where the court says:

For the opportunity to be heard on whether

disclosure should be made to be meaningful it

would be necessary for the decision-maker to

reveal frankly and fully the reasons why

disclosure was under consideration. This

would be likely to require the decision-maker

to reveal other evidence gathered by the ASC
to make known why information in the record of

examination would be relevant to the

legitimate interests of the person to whom

disclosure was proposed. If the disclosure

proposed was to a law enforcement agency in

connection with a possible offence such an

explanation would be inimical to the process

of criminal investigation. If the disclosure

proposed was to a person contemplating civil

proceedings the decision-maker could be

required to reveal the reasons given
confidence·about the proposed proceedings to

the ASC by the party seeking the record.

These considerations point strongly against it

being in the contemplation of the legislation

that an examinee should be afforded a right to

be heard on whether disclosure of a record of

examination should be made.

Your Honours, it is submitted that that really is

the essential distinction between the statutory

confidentiality which is given in the Australian

Securities Commission and is controlled by this Act

Johns 95 26/6/92

for the purposes of an investigation and the

general principles of confidentiality that apply to

judicial proceedings, proceedings in the nature of

court proceedings.

Division 2 of the Act established

confidentiality and then it takes it away. It

clearly seeks to control the confidence in documents and how that confidence is to be controlled.

BRENNAN J:  You would expound that as a code, as it were,

for the Act?

MR HOLLEY:	Yes, Your Honour. Section 127(4) enables the chairperson of the ASC to release information to
assist a government agency and it enables it to do
that without condition. That establishes the level of confidentiality to which the applicant in this case is entitled. In fact, what the ASC has done
is given him a level of confidentiality which is
greater than that to which the Act entitles him by
seeking to control even further and impose its own restriction upon the release of any information obtained in the investigation.

It has given him a right, in a sense, that the

statute does not give him and it has then taken

away that right - the decision to consent to the

release of information, in effect, is just taking

away a right that he was never given in the first

place under the statute.

It would seem incongruous, in our submission,

for special leave based on concern of a breach of

confidence of documents could be granted on the

grounds of a decision, if it be that, which, in

fact, gave more confidence to the documents rather

than less.

The decision to consent was not an exercise of

statutory power in the sense that it is not an

exercise of a power given under section 127(4) of

the Act and, in our submission, it is therefore not

a decision within the purview of the AD(JR) Act.

That is all I would wish to say to Your Honours and

I believe my friend, Mr Finkelstein, might have

some more to say on the matter.

BRENNAN J: Yes, thank you, Mr Holley.

MR HOLLEY: If the Court pleases.

BRENNAN J: Mr Finkelstein, we will hear you on the same

point as it obviously affects your interests.

Johns 96 MR FINKELSTEIN, QC 26/6/92

MR FINKELSTEIN:  If the Court pleases. We adopt the

argument that the legislation sets out a code
within which the parameters of the issue should be

considered. The case is not to be regarded in the

same way as where a person prepares a report which

may be critical of another.

Here we are concerned with a document which,

really, records the evidence of a particular

person. The legislation contemplates, for example,

that that person can be asked to look at the

document to make sure that it is accurate and is

entitled to a copy of the document and the facts in

this case show that the applicant got copies of all
of the transcripts that he had been involved in,

they were sent to him.

It is also relevant to note, if you have

regard to section 76 of the ASC Act, that records
of transcript of evidence obtained under the
exercise of coercive powers is said to be capable

of being used against that person in proceedings.

When you go to the definition of "proceedings" it

becomes clear, in our submission, that proceedings

encompass proceedings before a Royal Commission.

What the legislation does is it may impose a level

of confidentiality on the ASC but it makes it clear

when and in what circumstances the ASC can use the

material it obtains, especially in relation to

evidence obtained from examinees.

It would be inconsistent with the objects of

the Act and inconsistent with the powers given to
the ASC that it would be fettered by being required

to consult with the person who has given the

evidence. Bearing in mind that it is not material

which emanates from the ASC, in the sense that it

is not a report prepared by the ASC, or a set of

conclusions made by the ASC, it is no more than the

evidence given by a particular persons.

When the legislation says that evidence which

is obtained in that way can be used in half a dozen

specific ways enumerated in the legislation, it is

not conceivable that a person would have requisite

rights affected that he could say are entitled to

be heard on the question of whether it be used, for

example, in evidence against the examinee under

section 76 or given to a foreign agency under

section 127. All it is is an example of material

being provided by a person to a regulatory

authority and the legislation then tells the

regulatory authority how and in what circumstances

it can use the information so provided.

BRENNAN J: Section 25(3) is not, in fact, expressed to be

limited in any way, is it?

Johns 97 MR FINKELSTEIN, QC 26/6/92

MR FINKELSTEIN:	No, it is not.
BRENNAN J:	So if one looks at the documents which are the

subject of section 25, which are the transcripts of

examinations in substance, then they can be dealt

with in whatever way the ASC sees fit?

MR FINKELSTEIN:	Yes.
BRENNAN J:	And in whatever way the ASC sees fit.

MR FINKELSTEIN: Subject to the qualification that it has

got to be an activity of the ASC in conformity with

its objects as identified in the legislation.

BRENNAN J: Yes, but in whatever way it sees fit subject to

that qualification.

MR FINKELSTEIN:	Yes.
BRENNAN J:	The use of the material is then authorized for the purposes of 127(1)?

MR FINKELSTEIN: Yes. There is another possible

construction of the legislation and that is that

there is not an overlap between 25(3) and

section 127, that section 127 is to deal with a

different class of document or a different class of

information than section 25 deals with;

section 25(3) dealing specifically with transcripts

obtained under the investigatory powers used in

that division and section 127 and the ability to
release information under section 127(4) being

limited to information given to the Commission in

confidence. That is to say one looks at the

compulsory extraction of information and says how

that is to be dealt with and 25(3) says, ttin

whatever way the Commission thinks fit, subject to conditionstt, and section 127 says, ttin relation to

information given to the Commission in confidence",

that is to be maintained in confidence subject to

the statutory exceptions.

So that, on that view, you do not do a

comparison between 25 and 127, you just see what is

the information that is going to be given by the

ASC to somebody, and you see if it is compulsorily acquired information; you go to 25(3) to see how it

can be dealt with, and if it is information given

to the Commission in confidence you go to 127 and

see what the Commission's powers there are. In
respect of that information the Commission's powers
are much more constrained; in relation to
compulsorily acquired evidence the Commission's

powers are less constrained.

BRENNAN J: Yes.

Johns 98 MR FINKELSTEIN, QC 26/6/92

TOOHEY J: For section 76 to operate, somehow the evidence

has to be - or the statement taken on examination

has to be available. Presumably, it becomes

available through section 25?

MR FINKELSTEIN: Section 25(3), that is so.

TOOHEY J: It is unlikely to become available through

section 124?

MR FINKELSTEIN:	We would so submit.
TOOHEY J:	Does that put a record of examination in a

particular category quite distinct from other

information that the Commission might gather in the

course of its activities?

MR FINKELSTEIN:  Our primary submission before the Full

Court was along those lines. That is to say that

information obtained by the coercive power in the

form of a statement is different and to be treated

differently than other information that the
Commission may obtain in different circumstances.
So that if, for example, the Commission gets a

draft Part A statement or a draft prospectus, which

it would often do in the ordinary course of its

activities, that information may be given to the

Commission in confidence until the document is in

settled form and goes to the public, that would

attract section 127 and the obligations that are

imposed on the Commission by that section. But the

Commission could not use section 25 obviously

enough to release that information. So that that

tends to suggest that section 25 is the section

that one would go to, perhaps exclusively, to see

what the Commission can do with transcripts. And

then, section 76 says that they are admissible

assuming therefore that a person is in a position

to tender and make admissible the transcript in

particular proceedings, the proceedings that are

there identified. If the Court pleases.

BRENNAN J: Thank you, Mr Finkelstein. Yes, thank you,

Mr Dreyfus.

MR DREYFUS:  If the Court pleases. I propose to address the

Court on the third question posed by Your Honour

Justice Brennan yesterday, that being question of the right to relief against the Herald and Weekly

Times Limited in relation to the information it

records of interview to the Royal Commission by the	acquired as a result of the disclosure of the so, if I might, perhaps, very briefly make one
additional comment in relation to this question of natural justice that Your Honour has raised this
morning: first, to say that it is submitted that

Johns 99 26/6/92

there is a very great distinction to be drawn

between the record of interview and a report made

or an investigation.

This is a distinction drawn by the majority in the Full Court at pages 192 and 193 of the

application book where the majority said:

A record of examination stands on a very

different footing to a report made on an
investigation where findings of fact contrary
to the evidence of an exarninee may be stated.

That, of course, was after setting out a lengthy quotation from the decision of this Court in

Ainsworth which was concerned, of course, with a

report of a commission of inquiry and did indeed
make findings adverse to the applicant in that

case.

The other point that I would seek to make in

relation to the natural justice question is that
the Court in Ainsworth made it clear that the right

to natural justice is attracted in circumstances

where - to use Your Honour Justice Brennan's
words - there was - indeed, it is at page 30 of

the report in the Australian Law Reports which I

believe is in the book of authorities that

Mr Merkel handed up. But Your Honour
Justice Brennan quoted from the decision of this

Court in Annetts v Mccann and the passage being to the effect that:

It can now be taken as settled that, when a

statute confers power upon a public official

to destroy, defeat or prejudice a person's

rights, interests or legitimate expectations,

the rules of natural justice regulate the

exercise of that power unless they are

excluded by plain words of necessary

intendrnent.

The majority in the Full Court, Your Honours, at

page 192 of the application book made an assumption

for the purposes of the argument that the

publication of the transcripts would have, as a

consequence, the destruction, defeat or prejudicing
of "Mr John's rights, interests or legitimate

expectations". But as the majority noted on that

page, at page 192:

The Court has not seen the transcripts -

and, indeed, they are not in evidence. It is
submitted that the Court ought not to assume, as a

fact, that the publication of these transcripts will have any of the effects necessary or which

Johns 100 26/6/92

have been held necessary in these previous
decisions on natural justice to attract the
requirements of the rules of natural justice and
that if the applicant contends that one or more of

those effects would flow from the publication of

these records of interview it is incumbent upon an

applicant to put the material before the Court and

to adduce evidence to show that, either by simply

having the transcripts before the Court or some

other evidence, there will be the necessary

detrimental effect in order to attract the

requirements of natural justice.

Your Honours, to return to the question which

I was invited to address, that being the right to

relief against the Herald and Weekly Times Limited, I would adopt the submissions of my learned friend, Mr Myers, in relation to the effect of

sections 25(3) and section 127 of the ASC Act and

they were, in effect, that the majority in the Full

Court was correct in concluding, as it does at

page 190 of the application book, that the

disclosure to the Royal Commissioners was not

beyond power nor was it for an improper purpose.

My learned friend, Mr Myers' further

submission was that there had been no obligation of

confidence created in any other way by Mr Johns'

conduct or by anything that the Australian

Securities Commission investigators had done and,

indeed, that is also the subject of a direct

finding by both the learned trial judge and the

majority in the Full Court who, at pages 194 to 197

of the application book, concluded that no

obligation of confidence had been created in any

other way; that is, apart from statute.

There are two further matters in relation to

this question of the right to relief against the

Herald and Weekly Times Limited and both proceed on

the basis, for argument's sake, that there is, in

fact, some obligation of confidence or some quality

of confidence created by the legislation or by

Mr Johns' actions.

The first, Your Honours, is that it is

submitted that whatever confidentiality was there

has now been lost because these documents, the

eight transcripts in question, have all been

tendered in evidence at the public hearings of the

Royal Commission; they have been generally

available to the public, in some cases for up to

six months before Mr Johns first complained to the

Royal Commission. It was to that end that

yesterday evening I put before the Court the

affidavit of my instructing solicitor, Ms Arendsen;

I do not think I need take the Court to it. She

Johns 101 26/6/92

exhibits to that affidavit, the affidavit that she

swore in the trial and the affidavit of Mr Forrest,

who was the solicitor for the ABC.

Those affidavits are to the effect that the

documents in question were tendered in evidence at

the Royal Commission; that they were generally

available to the public, as with all other

documents that were tendered in evidence at the

Royal Commission - and there is a very large body

of documentary material that has been tendered at

the Royal Commission; that to the knowledge of the

two deponents the documents in question had been

made available to several journalists, apart from

the journalist employed by the ABC and the Herald

and Weekly Times Limited; that they were able to

identify at least one other person, that being a

staff member of a Victorian Government minister who

had availed himself of the opportunity to obtain

copies of these transcripts; and that, as I have

already said, the documents were generally

available, copies may well have been given to other

persons.

It is submitted that before one even goes to

the discretionary matters as to the effect on the right to relief of Mr Johns' actions, the fact of what has occurred means that the confidentiality,

if there was any, in these documents has been lost.

I draw to the Court's attention the way in which

the court proceeded in Marcel's case, at first

instance. In the book of authorities that my

learned friend, Mr Merkel, has handed up to the

Court, extracts from the decision of the

Vice-Chancellor, Sir Nicolas Browne-Wilkinson, and also the decision of the Court of Appeal are set out but, unfortunately, the passage from Marcel's

case, at first instance, that is included in that

book commences at page 1129 of the report which is

from (1991) 2 WLR, and the passage I wish to draw

to the Court's attention is on page 1127 and I will

hand to the Court that page.

In Marcel's case, Your Honours, for the

purpose of dealing with the claim for protection of

supposedly confidential documents, the court, for

convenience, divided the documents up into several

categories and at the foot of page 1127, at H,

there is a comment made by the court as to the

so-described category B documents and what was said

was that:

In the case of the category B documents which

have been read in open court, they have now

lost their confidentiality by disclosure in

open court.

Johns 102 26/6/92

The court proceeded to deal with the documents that

fell into other categories where the

confidentiality of the documents had not been lost

by the tender in open court.

The only other matter, Your Honours, that I

wish to address the Court on is the question of
what effect Mr Johns' conduct should have on

whether or not he is entitled to any relief in

respect of these records of interview. The

question of his delay and his conduct is something

that was considered both by His Honour partic~lar, I draw the Court's attention to the

comments made by the majority in the Full Court at

page 208 of the application book where

Their Honours the Chief Justice Black and

Mr Justice von Doussa said that although they had

concluded that he was not entitled as a question of

law to relief they considered that:

the lateness of his challenge would point
strongly towards the discretion being

exercised against him.

What has occurred here is that the applicant did

nothing at all, even though, as found by both the

trial judge and the Full Court, he knew at an early

date that these documents were being tendered in

public hearings at the Royal Commission. That

finding is recorded by His Honour Mr Justice Heerey

at page 70 of the application book and by the

majority in the Full Court at page 196 where the

majority found that there was no reason to in any

sense set aside the finding of fact by His Honour

Mr Justice Heerey that Mr Johns knew that his

examinations were being tendered in the public

hearings. Indeed, Mr Johns, in cross-examination
admitted that he read newspaper articles, including

some of those that are exhibited to the documents

that I handed up yesterday, where there are

comments made in the newspaper articles about

particular records of interview that he had given
being used in the proceedings of the Royal

Commission and quotations are set out from them.

It is a very strange kind of confidential

information case, it is submitted, Your Honours,

where the applicant who alleges some right to

confidentiality of certain material does not act

with any urgency at all to prevent the use of that

material. It is submitted that all of the reported

instances of people attempting to restrain the use
of confidential information are ones which show

that very prompt action indeed was taken by parties

who wished to preserve confidentiality and one

recent example might be the attempts made by the

Johns 103 26/6/92

Westpac Bank to restrain the use of letters passing

between Westpac and its solicitors which it was
alleged were confidential and as soon as Westpac

found that these documents had fallen into the

possession of some other party they immediately

went to court to restrain it.

GAUDRON J:	I realize that the discussion has at all stages centred on confidentiality but the premise upon
which you must construct your argument, I would have thought, goes a little bit beyond
confidentiality, the premise being that the
documents were handed over - they were not only
confidential, at a certain stage, but handed over
unlawfully or in breach of the procedures or intent discernable in the Act. So that there is an aspect of unlawfulness in the documents being in the
public domain over and above that of
confidentiality.
MR DREYFUS:	I accept that, Your Honour, and the primary submission that is made is that there was no
unlawfulness.

GAUDRON J: Yes, but the premise - I mean, if there was no

unlawfulness in the sense of which we speak, that

is to say that there is no restraint on either the

material being handed over or the way in which it

was handed over or the purpose for which it was

handed over then there is no argument to make at

all, from your point of view I should not have

thought. But it is not only the confidentiality as

such but the breach of express or implied statutory

requirement.

MR DREYFUS:  Assuming, Your Honour, for the purpose of

argument that there was some unlawfulness, it is

nevertheless submitted that the discretionary

factors that I am pointing to still apply and

still, in the circumstances of this case,

disentitle the applicant to relief because of the

lateness of his acting and the complete absence of

complaint; the complete absence of any indication

that he was in any way concerned about the use of

this information.

GAUDRON J: But it is a different thing to resist a remedy

on the basis that confidentiality has been lost, is

it not, from resisting a remedy which would prevent

use of material which to your knowledge is tainted

with illegality; the possession of which is tainted

with illegality, being a breach of statute?

MR DREYFUS:  I accept, with respect, the distinction but

even there, with this taint of illegality there is

a discretion to be exercised and it goes, with

respect, to the point that His Honour the presiding

Johns 104 26/6/92

Judge made yesterday about the utility of the Court granting relief where the documents have, in

effect, entered the public domain. Here we have a
situation where the documents have been widely

distributed and yet no attempt has been made by the

applicant to investigate how wide that distribution

has been, where the documents have gone nor even

has the applicant at any stage brought before the
court other persons who, to the applicant's

knowledge, are in possession of this material.

There must, with respect, be a real question about

the utility of granting any relief in the

circumstances of this case notwithstanding that

there may be some taint of illegality. Unless

there are other matters, that concludes my

submissions.

BRENNAN J: Thank you, Mr Dreyfus.

MR DREYFUS:  May it please the Court.

BRENNAN J: Yes, Mr Gallagher.

MR GALLAGHER:  May it please the Court. On behalf of the

seventh respondent I wish to adopt the submissions

made on behalf of the sixth respondent, in this

sense, Your Honours: the two respondents mentioned

are, in essence, of the same interest and stand in

the same position as to how the information was

acquired and also in the same position in the sense

that each has used the material substantially in

publication of that information in the public arena

since the release through the ASC to the

Commission.

In essence, the point we wish to emphasize is

the last one addressed by Mr Dreyfus and that is

that there would be no utility in making an order

against the seventh respondent at this stage, given

the facts. Quite apart from any legal questions

the facts are that no assurance of confidentiality

was given to Mr Johns, that if there was ever any

doubt about the character and quality of confidence

in the information it must be vitiated by the

circumstances that there was a substantial release

wider than the two respondents brought to the

court. There was the fact th.at the information was

in the public domain for a period of many months.

There is also the fact that there was a substantial

publication by reference to that information by the

respondents and, as well, the opportunity for

members of the public to access the information.

And as Mr Dreyfus has said, there is no certainty

here as to how wide that public dissemination has

gone beyond what the sixth and seventh respondents

are responsible for.

Johns 105 26/6/92

In those circumstances, on the facts, it is

our submission that there could	be no utility in
making an order at this stage.	Unless there is
anything further, Your Honours,	that is as far as I
think I can take the matter.

BRENNAN J: Thank you, Mr Gallagher. Mr Merkel.

MR MERKEL:  If the Court pleases, if I could first deal with the ASC submissions. We would, with respect, adopt

what Your Honour Justice Gaudron said about the

necessary distinction in the present case between

the equitable duty of confidence and a consequence

of failure to comply with statutory provisions. We

say in the latter one finds that the questions are

whether the statute was complied with or whether a

section 5 remedy is available and, if so, whether

relief ought to be granted under section 16(l)(d).

We submit that the statutory confidentiality

was one that is imposed by law, and indeed it is
odd to hear submissions from the ASC that there was

none. At page 310 of the appeal book, they wrote

to the Royal Commission that all documents obtained

under Part 3 examinations were to be confidential.

We said it required an Act under the statute for

the ASC to remove that confidentiality, and we

would, with respect, submit that there is nothing

at all in this Act that would, by necessary

intendment or otherwise, remove the obligation to

give a person a right to be heard before that

confidentiality is removed by a decision under the

Act.

The Full Court's concern that there may be a

need to disclose the purpose for which the

disclosure is to occur we say may go to the content

of the duty in a particular case, but does not go

to negative it in all cases. I remind the Court

that as a matter of fact, it would be a somewhat

extraordinary proposition to say there could be no

confidence in this information, as the Full Court

has held, when one can find provisions such as

sections 68 and 69 dealing with self-incrimination

and the removal of legal professional privilege.

So we submit there is a clear case for decision under enactment and a very strong case of

an improper exercise of the power under the

enactment and the failure to comply with the rules

of natural justice in that regard. We submit that
for those reasons, these matters are of general

importance and are appropriate for special leave.

TOOHEY J:  Mr Merkel, section 76 contemplates that

statements made in an examination are admissible in

evidence in any proceeding as defined in the Act,

Johns 106 26/6/92

and of course with the qualification that so long

as it is relevant. That presupposes that someone

is coming into possession of a statement, as that

is defined in the Act. I am not sure how

section 76 ties in with the other sections to which

we have been referred; sections 25 and 127 in

particular.

It may be one thing to make a statement

available to another investigative body to enable

that body to continue with its investigations or to

embark on investigations without it being assumed

that that document will see the light of day other

than for the purpose of the investigation, but once

you move into the area of public proceedings, and

having regard to section 76, what is it that lends

some confidentiality to the record of examination?

MR MERKEL:  Your Honour, we submit that there are two quite

separate questions. One is whether there is a

power to make available a statement under a
provision of the Act and then on an assumption

which we say is implicit, that where a statement is

lawfully made available, it has an evidentiary

effect. All section 76 does, Your Honour, is make

a statement as such admissible in a very limited

circumstance and it is admissible only against the

person who made the statement.

We say, Your Honour, all it does is give an

evidentiary admissibility, but nothing more. It ties in, for example, with section 25(1) where a

statement can be provided to a person's lawyer if

the Commission is satisfied the person is

contemplating a proceeding. So we say,

Your Honour, that it does not remove the discretion

of a court to say "It shall not be admissible"; it

just merely empowers the tribunal as defined in a

proceeding against the person, which of course a Royal Commission is not, in a proceeding against	the person, the person cannot be held to object to	the statement's admissibility if it is a statement
which has been made in accordance with the Act and,
we would submit, a statement that comes before the
tribunal in accordance with statutory requirements in relation to its release or availability.

TOOHEY J:  "Proceeding" is given a pretty wide meaning in

the definition section, section 5(1).

MR MERKEL:	It is given a wide meaning, Your Honour, but the section itself requires it to be admissible against
the person. We would say it is implicit that to be admissible against a person carries with it the
notion of some contest between parties. One does
not have the evidence admissible against someone in
any legal or statutory sense.

Johns 107 26/6/92

TOOHEY J:	Not even on a question of credibility?
MR MERKEL:	We would say not even on a question of

credibility in a Royal Commission, which is doing

no more than inquiring and reporting. There are
not matters admissible in evidence against a

person, as that term would normally be understood,

Your Honour, in a proceeding which is determinative

of someone's rights.

BRENNAN J: But where do you get this requirement of

admissibility against a person from?

MR MERKEL:  It is in the words of section 76(1),

Your Honour.

BRENNAN J: Yes, but you see, 25(1) is obviously designed, is it not, to provide information to a person who

is mounting an action against the examinee, whether

admissible or not, in other words, to put him on a

trail of inquiry. Once you see that documents

which record the contents of an examination taken

under Part 3 can be distributed to those who have

interests adverse to the examinee at the discretion

of the ASC, it is difficult, is it not, to ascribe

to those transcripts the quality of

confidentiality?

MR MERKEL:  Your Honour, we have maintained that the

statutory confidentiality is not absolute, in other

words, that there is a distinction between saying

that the transcripts when given are confidential

and saying that the document may be released in

accordance with the statutory provision, which
means that the release of it will not be in breach
of confidence. If a statutory provision is
properly complied with and the document is released
to another person pursuant to that provision, that

does not remove the confidentiality of the document

under the statute; it really means that in respect

of that release, it was not a breach of confidence.

Its use pursuant to any lawfully conferred power

upon the release itself would not constitute a

breach of confidence.

That was very much the subject of the decision

of the Full Federal Court in Bercove's case, where
it was held that when a person gives a statement,
it is of course given subject to the conditions of

the Act and that if there is a power on the body

receiving the statement - that I think dealt with a

Part 7 examination for use in disciplinary

proceedings of a particular kind pursuant to an

express statutory provision - then that would not
be actionable at the instance of the person giving
the statement. But it said nothing about the

Johns 108 26/6/92

issues that arise in the present case, Your Honour,

which really - - -

BRENNAN J:  No, but it does say this, does it not, that if

there is a release under either section 25 or under

127(4) consistently with those provisions, then

there is no contravention of 127(1)?

MR MERKEL:	Yes, Your Honour.
BRENNAN J:	You accept that proposition?
MR MERKEL:	I accept, Your Honour, what Justice Gaudron said

was the premise that we must start from, and that

is, if there was a valid exercise of power under a
statutory provision, then there is no question of

any relief arising because that statutory

provision, by being lawfully exercised or the power

conferred under it being lawfully exercised, does

not any longer give a right of complaint.

But, Your Honour, that raises the two

questions that are central. One is the proper

release in the circumstances of the case, and two is the exclusion as held by the Full Court of any

right to be heard prior to any release in any

circumstances under this Act. We say they are the

questions of importance which we seek to agitate,

because they go beyond any holding in any prior or

other case.

Indeed, they are, with respect, inconsistent

with it, when you look at the end result of what
has occurred in the present case, which is a

transcript in private hearing being published and

becoming public without the opportunity of the

individual being heard at any stage. We say under

section 76, for example - and this was very much at

the heart of what the Court of Appeal said in

Marcel's case where documents that were obtained

under police powers were then the subject of a

subpoena to a court. There was the right of the

court of course to subpoena them. The question

that agitated Their Lordships's minds in Marcel's

case is whether there should be an obligation on

the police to inform the person whose documents

were being subpoenaed that that was occurring so

that person would have a right to be heard in

respect of the use to which the documents would be
put.

Section 76, quite to the contrary of the

general submissions, would suggest because it is
admissible in evidence against the person who made

the statement that there seems to be a

justification for an assumption that that person

would of course have some ability to know that this

Johns 109 26/6/92

is occurring. That only further reinforces the

notion which we put forward that the right to use

expressed in such general terms - and if one can

take section 25(3) as the example - clearly, in our

submission, attracts the right to be heard in

compliance with the rules of natural justice rather

than suggesting anything to the contrary that would
take it away, because the width of the power, as
held by the Full Court, was to give it to any

person.

If my learned friend, Mr Finkelstein, is

correct, he said it can be given to any person for

any object under the Act, the wider the discretion

and the ambit of it, we say the stronger and

clearer the case for the right to be heard before

such a power can be exercised. In fact, our

primary submission - and we say this is a matter of

quite fundamental importance for the administration

of these sections of the Code, which are very

important provisions - is that section 25(3) has a

much narrower operation altogether.

It is an operation found in Part 3 and we say

ought to be implicitly limited to the exercise of

powers and functions of the ASC in relation to

Part 3, not any wider, because it renders nugatory

subsections (1) and (2) - they are unnecessary -

and it really puts itself outside 127, which again

is unnecessary in respect of those matters.

There is an important distinction that points

to the fallacy of my learned friend,

Mr Finkelstein's argument. Section 25 is concerned

solely with the written record, the physical

object. Section 127 is concerned with the

information contained within it. So we say that it

is quite wrong to see the two as in effect

operating with separate lives of their own. We say

that section 127 stipulates the most fundamental

requirement that reasonable steps are to be taken

to maintain the confidence, and we say that that

applies in respect of all information acquired, and

that would include and embrace information in a

written record which is the subject-matter of

section 25.

We say that the location of each in the Act and the role each is to fulfil provides the answer

to that question. We say that these matters are

clearly of fundamental importance, because if the are no rights in respect of persons going along to

Part 3 examinations, irrespective of their claims to privilege or irrespective of any other matter,

and they have no power to impose any

confidentiality.

Johns 110 26/6/92

The Full Court seemed to assume that there may

be some separate argument that if you do not get it

under the statute, which they held you do not, that

you have got some obligation to superimpose on your

examination a duty of confidence. But there is no

such right because you are required to answer the

question. You have no power to ask the ASC and no

right to ask the ASC that it only take this

evidence in confidence because you are obliged to

give it, so we say that the answer must be found in
the statute itself. For the reasons that we have

put forward, we say that the statute does not

operate in any shape or form as a Code, as that is

understood to exclude the right to be heard in

respect of a disclosure.

So for those reasons, we submit that the questions that we seek to agitate on the appeal are

questions of importance, and we say that the

judgment of the Full Court is attended with the

necessary doubt to enable this Court to grant leave

to appeal. They are the submissions that we would

seek to put in respect of the matter in relation to

breach of confidence.

My learned friend, Mr Finkelstein, made a

submission that the AD(JR) Act should be construed

in some very narrow way to exclude the rights to

relief against anyone other than the decision

maker. He sought to give the word "matter", in

effect, a limited or narrow definition, really in

effect a cause of action known to law.

That was rejected in Re Judiciary and

Navigation Act and has since been acted upon in

this Court. There is absolutely no reason to treat

the use of the word "matter" in the AD(JR) in any
narrower sense than its constitutional use. He

also seemed to suggest that "parties" again has

some very narrow definition.	We say in
administrative law, that is not a tenable

submission and, indeed, section 12 makes the

obvious point that any interested person can become

a party.

The thrust of his submission was that if there

is a statutory provision which says that a

statutory authority under a federal enactment can

make particular information available to a third

person and that power is exercised and the

information belongs to a corporation and is

confidential to it, the corporation can come along

and challenge the decision by the statutory

authority but cannot seek any relief because the

information has been imparted to the third person.

Johns 111 26/6/92

We say that that is precisely the situation that has occurred here and we say it is clear that

section 16(l)(d) would operate to regard the

parties in respect of the matter as the statutory

authority in the third person.

BRENNAN J: That is a very curious consequence if that is

so, because it means that the scope or connotation

of the word "matter" in 16(l)(d) awaits the

constitution of the suit.

MR MERKEL:  No, Your Honour. We would submit it is derived

from the facts that have occurred. The "matter" is

the release of the information by a statutory

authority to a third person in breach of a

statutory requirement. The person whose

information has been the subject of the release
comes to the court under the AD(JR) and sets aside

the decision made under the enactment; then one

goes to see what the court's power is to order the

return of the information to the statutory

authority.

We say the party in respect of the matter is

not framed in terms of how the suit is framed, but it arises from the factual substratum which is the

issue, really clearly identified as the corporation

whose information has been unlawfully released,

setting aside the decision to release it and having

the information returned to the decision maker, who

should never have released it. We would say it

would render nugatory the operation of these

provisions to say you cannot grant the relief that

necessarily follows from the decision to put the

person who was entitled to that relief in the
position they should have been had the decision

been lawfully made.

So we say that certainly Park Ho's case, which

is the only occasion, I think, we are aware of

where section 16(l)(d) was considered, this Court	made it very clear that the width of the remedies
under section 16 was one that was intended to have
a wide and beneficient operation, not in any sense
a narrow or legalistic operation; that which is
necessary to do justice between the parties in the matter.

The next submission Mr Finkelstein made

related to whether there was power in effect to

enjoin a Royal Commission from committing contempt. He made the startling submission that the Court has

no power in respect of a contempt by the Royal

Commission under section 21A of the Evidence Act

conferring immunities.

Johns 112 26/6/92

Firstly, Your Honours, the decision of this

Court in the BLF case is directly against him,

because the commission there considered was a State

and federal commission, and there was reference

to - and one of the matters decided was whether
there was power in the Court to make an order

enjoining a Royal Commission, both State and

federal or either State or federal, from committing

a contempt. The decision was that there was such a

power.	We say in any event my learned friend
has - - -

BRENNAN J: But that would be a case where there was

protection of a federal power, federal judicial
power, to be considered. Let us take the simplest

case where a Royal Commission in a State is about

to take a course which might be prejudicial to the

fair trial about to take place before a county

court.	They have got no federal element in this at
all.

MR MERKEL:  No, Your Honour, but we say the principle in the

BLF case was not based upon a federal power

overriding a State power; it was based upon the

much more basic proposition that there is no lawful

authority for any tribunal, including a Royal
Commission, to commit a contempt of court. It was

not based upon an overriding federal power. We say, Your Honour, that the BLF case was not the

first case where this question arose. I think

there are many cases - Mr Justice Shell's judgment,

I think, in the Johns v Waygood case, and I think

there was McGuinness' case which I think involved Victoria, where Royal Commissions were assumed to

not have the power to act in contempt of court.

Put quite simply, this Royal Commission was

only authorized to conduct its activities by lawful

means. That is set out clearly in the letters

patent.	We would say it would be a startling
proposition that it could conduct its proceedings
by unlawful means.	We say that clearly the Court's

jurisdiction to enjoin an interference with the

administration of justice is attracted to the Royal

Commission and any other domestic tribunal which

has similar immunities. We say there is no

immunity in a tribunal to be immune from

interfering with the administration of justice.	We
say that more significantly, there is just no authority to support my learned friend's

proposition and, indeed, the case law would seem to

go directly against him.

The main point he argued on the question of

the contempt aspect was that he said there was no
error in the judgment of the Full Court. We would

submit that the issues we seek to raise are issues

Johns 113 26/6/92

of importance. We say that the problem of

denigration of character, given its significance in

a criminal trial, is directly raised. We submit

that what the Full Court did is, if one looks at

its judgment, particularly at page 202, its only

reason for saying there is no real tendency to

interfere with the trial was that a jury would not absorb the complexity of allegations of commercial

criminality as opposed to allegations of sexual

misconduct or illegality.

We say in the context of what will be a

commercial trial with a large number of witnesses,

Their Honours have misconceived the essence of this

area of the law. It is not the detail of the

allegations made in public that cause the

vilification; it is their sting. It is the

impression on the public mind, that of potential

jurors and that of witnesses, which leaves the

sting of the allegations, and I took the Court to the material that we rely upon. We say the sting

is inescapably that which is one of denigration of

character which the Crown could not call, and

therefore we find our trial threatened by a

fundamental right being overridden.

There is a very important distinction in this

case which answers another point my learned friend put forward from that of most apprehended contempt cases. Most of the apprehended contempt cases, and

particularly the BLF case, it was a matter of

surmise as to precisely what evidence was to be

called and precisely what allegations may be made.

The tendency then had to be assessed in that context.

In the present case, the material that I took

Your Honours to yesterday is taken from the written

submissions of counsel assisting and from other

counsel which are about to be tendered as such in

open hearing, subject only to the control of the
Royal Commissioners of that tender.	So we say that

this is unusual in the sense that it is a case

where these are in effect the minimum or the floor,

not the ceiling, of what allegations and what will

in fact be reported.

We would submit that that brings into question

a number of very important principles. The BLF

case of course dealt with a case before a judge and

dealt with civil proceedings.

BRENNAN J:  You have taken us through this in your argument

in-chief, I think.

MR MERKEL:  Yes, Your Honour. We say it is important, and

the proximity of the trial does, in our submission,

Johns 114 26/6/92

warrant the grant of special leave. That also is a

response to my learned friend's final point, namely

that the contempt will be that of the media rather

than the Commission. We say the control of the

manner in which these submissions are to be put is

entirely that of the Commissioners who have to make

a decision whether they will proceed in public or

private - that is the decision to proceed in public

for these submissions to then be tendered, which will be the act of the Royal Commission, not the parties, that constitutes the contempt, and then the proceeding in public hearing.

Finally in respect of my learned friend,

Mr Dreyfus' submissions, we submit that it is wrong

to say in the present case that the fact that the

documents were tendered somehow loses or denies any

right to relief. Indeed, his affidavit makes the

point that the persons who received the transcript

are identified. I think there were five or six of

them. They are persons who have not published the

content and, we would have no doubt, are persons

who would not use the documents and would return

them if requested if it was held that their

possession was unlawful.

The affidavit identifies precisely who those

persons are, and the reason why they were not
joined as defendants is that they are not
threatening to publish or use them in the way that

they two defendants are threatening to use them.

There has been no publication of the contents in

any relevant sense, and the dissemination - I think

it is at page 3, Your Honours, of Ms Arendsen's

affidavit. There are some six people who were

identified as recipients.

There has been no publication in any relevant

sense of the material.	The material, as I
indicated, Your Honour - I think some three

transcripts ran to over 300 pages, and there are

many hundreds of pages. The press reports at most

may have put one or two sentences from a transcript

and the media have not identified, by reference to

the transcripts, any publication that would suggest

that the right to relief ought to be lost.

In particular, when that issue was raised

before His Honour Mr Justice Heerey in the Full

Court, we said that if anything has been published

in the press, we would not seek relief in respect

of it, but the press have never identified anything

that would be excluded under that category, because

it is either so minuscule it is irrelevant, or it

is not able to be identified.

Johns 115 26/6/92

We say that the notion that there has been

publication and it has entered the public domain in

the Spycatcher sense where it is publicly available

and is being used by the general public has no

applicability whatsoever here. That in any event

would only go to a basis for a refusal to grant

discretionary relief.

We say that the circulation of it is indeed

confined, and we say that the Royal Commissioners,

on having our submissions put to them, directed

that there be no further publication of the

material. So that as long as that direction is one

that is lawful, there has been and there will be no

further publication. So we say quite to the

contrary of what is put, this is not public domain

material and, indeed, its publication would be in

breach of a direction of the Commission if that be

a lawful one.

So we submit that this is not a matter of dissemination, not a matter where material is read

in open court, not a matter where the material is

generally available to the public. So that in so

far as the public domain becomes relevant, we

would, with respect, adopt what Justice Gaudron put

to my learned friend, Mr Dreyfus, in that regard;

it has not been overridden.

The final matter is the suggestion that we

ought to fail because the conduct of Mr Johns

confronted him concerning legal advice. There is no finding anywhere of consent or waiver and, importantly, the only matter that he was aware of

somehow disqualifies himself from obtaining relief.

was that one transcript had been tendered - he had

been aware of it after the event - and his evidence

was he may have read of some suggestion in respect

of that particular matter in a newspaper, but he

also said he assumed that all powers exercised were
exercised lawfully.	We say there could be no

discretionary reason for the withholding of relief

on those grounds.

So we would submit that the matters that

Your Honours have sought counsel for the

respondents to address Your Honours on are matters

in respect of which the grant of special leave is

warranted. If the Court pleases.

BRENNAN J:  Thank you, Mr Merkel. The Court will adjourn in

order to consider what course it will take.

AT 10.52 AM SHORT ADJOURNMENT

Johns 116 26/6/92

UPON RESUMING AT 11.28 AM:

BRENNAN J:	The argument seeking special leave to appeal has ranged over a number of issues which must be
identified with some precision in order to
determine whether an appeal on any and which of
them should be allowed.

The first issue is whether a decision by the

Australian Securities Commission under the Australian Securities Commission Act 1989 (Cth) to delegate to Ms Noreen Megay the Commission's powers of investigation and information gathering under

Part 3 of that Act was valid. A majority of the

Full Court of the Federal Court upheld the validity of the delegation of those powers to carry out an

investigation pursuant to a direction given by the

Minister under section 291 of the Companies Code.

In our view, their Honours were right to identify the investigation by reference to its

subject-matter and not by reference to the

inspectors who were nominated under section 292 of

the Code to conduct the investigation. We do not

think that their Honours' conclusion that the

delegation of the Part 3 powers was valid is
attended with sufficient doubt as to its

correctness to justify the grant of special leave. Nor do we think that the challenge to the validity

of the decisions made by Ms Megay, which determined

the scope of the investigation which she conducted
pursuant to the delegation of the investigation and

information-gathering powers, has engendered

sufficient doubt to justify the grant of special

leave.

The next group of issues relates to Ms Megay's powers to release to the Tricontinental Royal

Commission transcripts of evidence taken and copies
of documents acquired by Ms Megay in exercise of

the delegated powers of investigation and

information gathering. The Australian Securities

Commission has powers to release material produced

and/or information acquired by the Commission under

two relevant provisions of the Australian

Securities Commission Act: section 25 and

section 127(4). The Australian Securities

Commission purported to delegate both powers to Ms

Megay. We see no reason to doubt the correctness

of the view of the majority of the Full Court that these powers were validly delegated. We would not

grant special leave to appeal on that issue.

The Court will, however, grant special leave

to appeal on limited issues: namely, whether the

Johns 117 26/6/92

decisions by Ms Megay, in purported exercise of the
powers delegated to her to release material

acquired by exercise of Part 3 powers or to release

other information to the Royal Commission in

circumstances which allowed the material or

information released to be published generally,

were invalid either on the ground that the powers
were exercised in breach of the rules of natural

justice or otherwise in breach of the express or

implied requirements of the Australian Securities

Commission Act. Those grounds must, however, be

specified with particularity in the notice of

appeal.

Consequential on this limited grant of special

leave, it is desirable to grant special leave to

consider whether, if the decisions of Ms Megay to

release material or information to the Royal

Commission were or any of them was invalid, the applicant has any right to relief against any and which of the respondents.

We would not grant special leave to canvass

the question of contempt of the County Court. This

issue raises no question of general principle and

we do not think it appropriate to grant special
leave to consider the appreciation made by the Full

Court of the facts of the case. There is no reason

to grant special leave under section 35(b) of the

Judiciary Act 1903 (Cth).

Except to the extent stated, the application

for special leave is refused. We would reserve the costs of this application noting, however, that the applicant has failed on many of the issues in

respect of which special leave was sought. Are

there any other matters to be raised from the bar
table? The Court will adjourn to a date to be

fixed.

AT 11.32 AM THE MATTER WAS AJOURNED SINE DIE

Johns 118 26/6/92