Kelly v Hilton [No 3]

Case •

[2023] WASC 235

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   KELLY -v- HILTON [No 3] [2023] WASC 235

CORAM:   STRK J

HEARD:   31 JANUARY 2023 & ON THE PAPERS FILED

DELIVERED          :   29 JUNE 2023

FILE NO/S:   CIV 2228 of 2020

BETWEEN:   ALLAN JOHN KELLY

First Plaintiff

ALLAN JOHN KELLY AS TRUSTEE FOR THE KELLY FAMILY TRUST

Second Plaintiff

XGS PTY LTD AS TRUSTEE FOR THE KELLY SUPERANNUATION FUND

Third Plaintiff

DEBNAL PTY LTD

Fourth Plaintiff

AND

JOHN CHARLES HILTON

Defendant


Catchwords:

Practice and procedure - Subpoena to produce issued to the Australian Securities and Investments Commission - Corporations Act 2001 (Cth) pt 9.4AAA (protection for whistleblowers) - Information not to be disclosed to a court or tribunal - Exception to prohibition if s 1317AG(c) or (d) applies - Application made seeking exemption under s 1317AG(d) - Production of documents to a court where the court thinks production necessary in the interests of justice

Legislation:

Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Application granted

Category:    A

Representation:

Counsel:

First Plaintiff : SB Nadilo
Second Plaintiff : SB Nadilo
Third Plaintiff : SB Nadilo
Fourth Plaintiff : SB Nadilo
Defendant :

D Banda
Interested Party : R Chiarella for the Australian Securities and Investments Commission (31 January 2023) & A Willinge (on papers)

Solicitors:

First Plaintiff : HHG Legal Group
Second Plaintiff : HHG Legal Group
Third Plaintiff : HHG Legal Group
Fourth Plaintiff : HHG Legal Group
Defendant :

Bennett + Co
Interested Party : Australian Government Solicitor

Case(s) referred to in decision(s):

Alister v The Queen [1984] HCA 85; (1984) 154 CLR 404

Attorney-General (NSW) v Lipton [2012] NSWCCA 156; (2012) 224 A Crim R 177

Attorney-General (NSW) v Nationwide News Pty Ltd [2007] NSWCCA 307; (2007) 73 NSWLR 635

Brown v Commissioner, Australian Federal Police (1988) 15 ALD 318; (1988) 83 ALR 477

Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604

Earglow Pty Ltd v Newcrest Mining Ltd [2015] FCA 328; (2015) 324 ALR 316

El Ossman v Minister for Immigration and Border Protection [2017] FCA 636; (2017) 248 FCR 491

Kelly v Hilton [2021] WASC 369

Kelly v Hilton [No 2] [2022] WASC 374

LM Investment Management Ltd (ACN 077 208 461) (in liq) (recs and mgrs apptd) (as responsible entity of the LM First Mortgage Income Fund) v Bruce [2014] QCA 136; (2014) 102 ACSR 481

National Crime Authority v Gould (1989) 23 FCR 191; (1989) 90 ALR 489

Parkin v O'Sullivan [2009] FCA 1096; (2009) 260 ALR 503

Rochfort v Trade Practices Commission [1982] HCA 66; (1982) 153 CLR 134

Table of Contents

Introduction

Claims made in this proceeding and applications now agitated

Procedural history - the first application

Evidence

The submissions

Mr Hilton's position

The plaintiffs' position

ASIC's position

When the application of s 1317AG is in issue

Section 1317AG(d)

Disposition

Statutory context

Section 1317AG

Application of s 1317AG

Is production by ASIC necessary in the interests of justice?

Conclusion and orders

Sch A - Proposed order

STRK J:

Introduction

  1. At the request of the defendant, John Charles Hilton, the court on 14 November 2022 issued to the Australian Securities and Investments Commission (ASIC), a subpoena to produce which was returnable on 5 December 2022.  By a notice issued pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 36B r 5A, the time by which ASIC was to comply with the subpoena was extended to 19 December 2022.

  2. By operation of the subpoena, ASIC was ordered to produce:

    Documents recording any complaints or statements made by Mr Allan John Kelly regarding Riversgold Limited (ACN 617 614 598) or Mr John Charles Hilton on or after 1 June 2019.

  1. In the subpoena, the term 'document' was defined to mean 'any record whether electronic or in hard copy form and includes electronic communications by electronic mail, text message, Facebook, Twitter, Instagram, WhatsApp, Skype, Viber, Messenger, LinkedIn, Signal and all other forms of social media'.

  2. On 16 December 2022, an officer of ASIC sent an email communication to an email address maintained by this court, which was copied to the parties' legal representatives. By that email communication, ASIC sought to advise the court's registry that due to the effect of pt 9.4AAA of the Corporations Act 2001 (Cth), including s 1317AG, ASIC considered itself precluded from responding to the subpoena. ASIC also indicated that should the court be minded to make an order pursuant to s 1317AG(d), ASIC expected to be able to comply with the subpoena within five business days.[1]

    [1] First affidavit of SM Samaraweera, SMS-1, page 6; second affidavit of SM Samaraweera, SMS-1, page 5.

  3. Part 9.4AAA is concerned with the protection of whistleblowers and s 1317AG of the Corporations Act provides as follows:

    If a person (the discloser) makes a disclosure of information that qualifies for protection under this Part, the discloser or any other person is not to be required:

    (a) to disclose to a court or tribunal:

    (i) the identity of the discloser; or

    (ii) information that is likely to lead to the identification of the discloser;

    or

    (b) to produce to a court or tribunal a document containing:

    (i) the identity of the discloser; or

    (ii) information that is likely to lead to the identification of the discloser;

    except where:

    (c) it is necessary to do so for the purposes of giving effect to this Part; or

    (d) the court or tribunal thinks it necessary in the interests of justice to do so.

  4. No request was made by ASIC to set aside the subpoena, or seeking directions or relief in respect of it as provided for by the RSC O 36B r 8A and 8B. As the email sent on behalf of ASIC on 16 December 2022 was not an application for the purposes of the RSC O 36B, nor was it sent to the appropriate email address, it was not promptly brought to the attention of the Principal Registrar or my chambers. In the lacuna that arose by ASIC having taken no formal step in response to the subpoena in the manner prescribed by the RSC O 36B r 8A, on 20 December 2022 Mr Hilton brought an application in this action to compel ASIC to produce the subpoenaed documents (which subpoena had been issued to ASIC at Mr Hilton's request). Mr Hilton pressed for orders in the following terms:

    1 Within 5 business days of the date of this order, the Australian Securities and Investments Commission (ASIC) produce to the Supreme Court of Western Australia, located at David Malcolm Justice Centre Level 11, 28 Barrack Street, Perth in the State of Western Australia, the documents described in the subpoena issued to ASIC by this Court at the request of [Mr Hilton] dated 14 November 2022 pursuant to section 1317AG (d) of the Corporations Act 2001 (Cth).

    2 The costs of this application be costs in the cause.

  5. In these reasons, reference to the first application is a reference to the application made on behalf of Mr Hilton on 20 December 2022 concerning ASIC's compliance with the subpoena issued to it on 14 November 2022.

  1. For the reasons set out below, I proceed on the basis that s 1317AG of the Corporations Act applies, and I am satisfied that it is necessary in the interests of justice for ASIC to comply with the subpoena and produce to the court documents recording any complaints or statements made by Allan John Kelly (the first plaintiff) regarding Riversgold Limited or Mr Hilton on or after 1 June 2019.  An order will be made in the terms promoted on behalf of Mr Hilton.

Claims made in this proceeding and applications now agitated

  1. This proceeding was commenced by writ of summons indorsed with a statement of claim on behalf of the four named plaintiffs on 15 December 2020 as against Mr Hilton.  Mr Kelly in his personal capacity is the first plaintiff in this action, and had been employed as the Managing Director of Riversgold.  As the trustee of the Kelly Family Trust, Mr Kelly prosecutes this proceeding as the second plaintiff.  Mr Kelly is also a director of the third and fourth named plaintiffs.  The third plaintiff company is the trustee of the Kelly Superannuation Fund.

  2. On 26 July 2021, an application for summary judgment made by Mr Hilton was heard.  In the reasons published dismissing that application, the plaintiffs' claims as against Mr Hilton as pleaded in the statement of claim indorsed on the writ of summons filed on 15 December 2020 were outlined:  Kelly v Hilton [2021] WASC 369 [3] to [8]. The circumstances alleged by Mr Hilton as having given rise to the alleged termination of Mr Kelly's employment by Riversgold were also summarised: Kelly v Hilton [12]. The claims made in this proceeding and the status of the pleadings (as it then was) were also summarised in Kelly v Hilton [No 2] [2022] WASC 374 [6] to [13]. I do not intend to repeat here what was said in those reasons. These reasons should be read with and as if they incorporate the earlier reasons.

  3. The first application is one of several inter‑related applications to be determined.  A second application was filed on behalf of Mr Hilton on 21 December 2022, and an amended version of the same was filed on 22 May 2023.  By the second application, Mr Hilton seeks to be released from the obligation not to use certain documents for a purpose other than in connection with this action, and that leave be granted to him to use those documents in a contempt proceeding against the first plaintiff, Mr Kelly (which proceeding is yet to be commenced).  The scope of the second application extends to documents to be produced by ASIC in response to the subpoena issued to it in this action at the request of Mr Hilton, which is described at [1] to [3] above.

  4. As noted above, the documents ASIC is ordered to produce pursuant to the subpoena are documents recording any complaints or statements made by Mr Kelly regarding Riversgold or Mr Hilton on or after 1 June 2019.  I understand that the first and second applications are made to further Mr Hilton's foreshadowed application against Mr Kelly for punishment for contempt of court.  I understand Mr Hilton proposes to file a notice of motion for contempt in this action as he contends that Mr Kelly caused documents discovered by Mr Hilton in this action to be used for collateral or ulterior purposes; and/or to be used to interfere with the proper administration of justice in that discovered documents were provided to a regulatory body for it to investigate claims and make referrals for legal action against Mr Hilton and/or others which would have the effect of placing pressure on Mr Hilton in regards to this action.  In these reasons, I refer to the foreshadowed notice of motion for contempt as the foreshadowed contempt application.

  5. An application made by chamber summons was also filed on 14 April 2023 on behalf of Mr Kelly.  By the application, Mr Kelly seeks orders in the following terms:

    1[Mr Kelly]:

    1.1be discharged from punishment for his breach of the implied undertaking resulting from him disclosing or making available to the persons identified in Schedule 1 of the documents or information identified in Schedule 1; and

    1.2 pay [Mr Hilton's] costs of and incidental to this application on an indemnity basis, to be assessed if not agreed.

    2. Alternatively, [Mr Kelly] be punished for his breach of the implied undertaking resulting from him disclosing or making available to the persons identified in Schedule 1 of the documents or information identified in Schedule 1 by way of an order that [Mr Kelly] pay [Mr Hilton's] costs of and incidental to this application on an indemnity basis, to be assessed if not agreed.

    3. Such further or other orders or relief as the Court sees fit.

  6. In sch 1 to the chamber summons filed on 14 April 2023, among other things, Mr Kelly identifies documents or information obtained in this proceeding and used in disclosures made to ASIC.

  7. In communications with the court, Mr Kelly refers to the application made on his behalf on 14 April 2023 as the purge application.  In these reasons, I adopt that description for ease of reference.

  8. As noted above, an amended version of the second application was filed on behalf of Mr Hilton on 22 May 2023.  By the second application, Mr Hilton now also seeks to be released from the obligation not to use documents filed by Mr Kelly in support of the purge application (namely, the chamber summons dated 14 April 2023 and the affidavit of Mr Kelly sworn on 14 April 2023 in support of the purge application) for a purpose other than in connection with this action, and seeks that leave be granted for use of those documents in the foreshadowed contempt application against Mr Kelly.

  9. Mr Hilton says that out of an abundance of caution, he makes the second application for leave to use documents discovered by the plaintiffs in this action and produced in response to subpoenas so that the foreshadowed contempt application is not itself in breach of the Harman undertaking in so far as the documents discovered by Mr Kelly or produced in response to subpoenas are sought to be relied upon to prosecute the foreshadowed contempt application.[2]

    [2] Affidavit of JC Hilton par 14.

Procedural history - the first application

  1. On behalf of Mr Hilton, a memorandum pursuant to the RSC O 59 r 9(1) was filed with the first application on 20 December 2022, together with a minute of proposed orders. The memorandum recorded that there had been conferral as between the parties, the result of which was that the plaintiffs then neither consented to nor opposed the first application. The court was informed in late December 2022 that in light of the position adopted by the plaintiffs, Mr Hilton was content for the first application to be determined on the papers.

  2. On 10 January 2023, an outline of submissions was filed on behalf of Mr Hilton in support of the first application.  The three affidavits filed in support of the first application are described below at [30] to [35].

  3. In the submissions filed on 10 January 2023 in support of the first application, counsel for Mr Hilton noted that it is 'not necessarily accepted' by Mr Hilton that Mr Kelly is an eligible whistleblower for the purposes of pt 9.4AAA.[3]

    [3] Defendant's submissions filed 10 January 2023 par 16.1.

  4. On 23 January 2023, the court sent a communication to the parties' representatives and to ASIC in which the court:

    (a)noted that upon receipt of the submissions filed on behalf of Mr Hilton, the court understood Mr Hilton's position to be that, assuming Mr Kelly is an eligible whistleblower (which is 'not necessarily accepted'), the exception to the operation of s 1317AG afforded by subsection (d) ought apply;

    (b)noted that it would appear from the text of s 1317AG that the operation of the section is predicated upon a person (that is, the discloser) having made a disclosure of information that qualifies for protection under pt 9.4AAA. Further, that it would appear that s 1317AG when read with the remainder of pt 9.4AAA, particularly s 1317AA, contemplates that not all disclosers are 'eligible whistleblowers', and not all disclosures of information by eligible whistleblowers fall within the ambit of pt 9.4AAA and qualify for protection; and

    (c)sought the assistance of the parties and ASIC in relation to whether in the disposition of the first application, the court must be positively satisfied that s 1317AG is engaged before turning to consider whether the court thinks it necessary in the interests of justice for ASIC to produce documents in compliance with the subpoena.

  5. The parties and ASIC were informed that the question was raised in circumstances where the court did not have before it the evidence necessary to determine whether a person (the discloser) had made a disclosure of information that qualified for protection under pt 9.4AAA of the Corporations Act, particularly whether the criteria in s 1317AA(4) had been met. Put another way, the court queried whether it would be within power for the court to grant the application if the court were to think production by ASIC necessary in the interests of justice, without making a positive finding and reserving the determination of whether the disclosure of information to ASIC qualified for protection under pt 9.4AAA of the Corporations Act to another day.

  6. The court requested that the parties and ASIC confer in relation to the issues raised by the court, and the court received email communications on 27 and 30 January 2023 describing the respective positions of the parties.  The first application was listed on 31 January 2023 so that the parties and ASIC could be heard.

  7. After hearing the parties and ASIC on 31 January 2023, the first application was adjourned part‑heard, so as to allow ASIC to file and serve written submissions; and for the parties to file any responsive submissions.  On 3 March 2023, ASIC's submissions were filed and the parties' responsive submissions were filed on 17 March 2023.

  8. On 3 April 2023, solicitors for Mr Hilton wrote to the court requesting that the court defer deciding the first and second applications in circumstances where draft papers for the foreshadowed contempt application had been provided to Mr Hilton's representatives, and additional time was requested to allow conferral as between the parties as to the relevance of the foreshadowed contempt application to the disposition of the first and second applications.

  9. As noted above, the purge application was filed on behalf of Mr Kelly on 14 April 2023, and it was then suggested by the representatives of Mr Kelly that the application be referred to another judge for hearing.  It was also requested that I refrain from reading the affidavit evidence filed in support of the purge application.

  10. On 1 May 2023, solicitors for Mr Hilton informed the court that Mr Hilton no longer pressed for the determination of the first application or the second application to be deferred.  The court was also informed that the parties had conferred and no longer pressed for the purge application to be heard by another judge.

  11. While it is appropriate to put the first application in its context (and I attempt to do so above), these reasons only concern the first application.  The second application will fall to be determined after the first, to be followed by the purge application and the foreshadowed contempt application.  The position of the plaintiffs in relation to the second application, to the extent it concerns documents to be produced by ASIC in response to the subpoena, remains reserved pending the determination of the first application, and if the first application is granted, pending inspection of documents produced by ASIC and consideration of the submissions to be filed in support of the second application.[4]

    [4] As reflected in programming orders made on 16 January 2023 in this action by the consent of the parties.

  12. At this time, I propose to deliver these reasons and then hear and determine the second application before re‑visiting the appropriateness of my hearing the purge application and the foreshadowed contempt application.

Evidence

  1. In support of the first application, Mr Hilton relied upon three affidavits, being:

    (a)two affidavits deposed to by Shemali Marianne Samaraweera on 20 December 2022 and 22 December 2022; and

    (b)the affidavit of Mr Hilton sworn on 21 December 2022.

  2. Ms Samaraweera attached to her first affidavit an email chain which commenced with the email communication sent on 16 December 2022 by an officer of ASIC to an email address maintained by this court, which was copied to the parties' legal representatives and is referred to at [4] above, and then continued as between the parties' legal representatives concerning ASIC's response to the subpoena.

  1. In her second affidavit, Ms Samaraweera attached a further email chain as between Mr Hilton's legal representatives and ASIC, which included confirmation that as at 22 December 2022 ASIC did not seek to be heard in respect of the first application.

  2. At par 16 of his affidavit, Mr Hilton deposed to his belief that Mr Kelly had caused documents discovered by Mr Hilton in this action to be used for collateral or ulterior purposes; and/or to be used to interfere with the proper administration of justice in that discovered documents were provided to a regulatory body for it to investigate claims, and make referrals for legal action against Mr Hilton and/or others which would have the effect of placing pressure on Mr Hilton in regards to this action.

  1. Mr Hilton further deposed that the reason the second application includes the documents expected to be produced by ASIC was because:[5]

    15.1Mr Kelly stated in correspondence to the ASX and Mr Richard Stanger that he has made a complaint to ASIC about me (for example see pages 80, 118, 120, 125 and 146 of this affidavit);

    15.2it is more efficient and cost effective to include the documents to be produced by ASIC as part of this application to avoid another applications on the same topic.

    [5] Affidavit of JC Hilton par 15.

  2. Mr Hilton attached to his affidavit a list of documents discovered by the plaintiffs; a list of documents produced in response to a subpoena issued by this court to the Australian Securities Exchange Ltd (ASX) dated 7 November 2022; a list of documents produced in response to the plaintiffs' request of 19 August 2021 for the documents referred to in Mr Hilton's further and better particulars; and copies of communications between the parties' legal representatives and attachments to those communications.

The submissions

  1. The position of the parties and ASIC with respect to the first application changed over time.  Set out below is an overview of their respective positions.

Mr Hilton's position

  1. On behalf of Mr Hilton, submissions were filed on 10 January 2023 on the understanding that Mr Kelly neither consented to nor opposed the first application; ASIC did not seek to be heard in relation to the same; no objection had been raised as to the relevance of the documents sought by the subpoeana; and ASIC had not raised any issues of oppression or burden in complying with the subpoena.[6]

    [6] Defendant's submissions filed 10 January 2023 pars 5 - 7, referring to the first affidavit of SM Samaraweera, SMS-1, and the second affidavit of SM Samaraweera, SMS-1.

  2. Mr Hilton's position articulated in submissions filed on 10 January 2023 was that on a proper construction of s 1317AG(a) and (b) of the Corporations Act, a person who has received disclosure of information which qualifies for protection (in this case, ASIC) is prohibited from disclosing or producing a document to a court which identifies the discloser or information that is likely to lead to the identification of the discloser unless the exception in s 1317AG(c) and (d) of the Corporations Act apply.[7]

    [7] Defendant's submissions filed 10 January 2023 par 15.

  3. On behalf of Mr Hilton it was further submitted that:[8]

    (a)assuming Mr Kelly is an eligible whistleblower (which is not necessarily accepted), s 1317AG(d) of the Corporation Act applies in this case;

    (b)the object of sub-sections (a) and (b) of s 1317AG is the preservation of the identity or maintenance of confidentiality of the identity of an eligible whistleblower, particularly where the identity of the person is not known;

    (c)the preservation of the identity or maintenance of confidentiality of the identity of an eligible whistleblower is not absolute and the court is granted express powers under s 1317AG(d) to permit the disclosure of the identity of a whistleblower or information that is likely to lead to the identification of a whistleblower. A court may, for example, permit disclosure where the whistleblower has by their own conduct acted in a way not consistent with preservation of their identity as a whistleblower, or where in the circumstances of the case it is necessary and in the interests of justice for the identity of the whistleblower to be disclosed;

    (d)where there is no evidence or risk of victimisation of the purported whistleblower, such as in this case where Mr Kelly resigned from Riversgold on 15 March 2019, the court should be more prepared to exercise the power under s 1317AG(d); and

    (e)an order under s 1317AG(d) does not affect the immunities provided to an eligible whistleblower under s 1317AB.

    [8] Defendant's submissions filed 10 January 2023 par 16.

  4. Further, it was submitted that: [9]

    (a)Mr Kelly had informed Mr Richard Stanger and the ASX, strangers to this proceeding, that he intended to make or in fact had made complaints or statements to ASIC about Riversgold and/or Mr Hilton;

    (b)through the discovery process and the subpoena issued to the ASX in the proceeding, Mr Hilton is aware that Mr Kelly made complaints or statements to ASIC about Riversgold and/or Mr Hilton; and

    (c)accordingly, the identity of Mr Kelly as a complainant to ASIC concerning the subject matter of this proceeding is known by the parties to this proceeding and is not confidential as between the parties or other third parties.

    [9] Defendant's submissions filed 10 January 2023 pars 17 - 19, referring to the affidavit of JC Hilton sworn on 21 December 2022 par 15 and pages 80, 118, 120, 125 and 146.

  5. Also, as the subpoena is limited to documents recording any complaints or statements made by Mr Kelly, no issue concerning the identification of whistleblowers other than Mr Kelly arises.[10]

    [10] Defendant's submissions filed 10 January 2023 par 20.

  6. Assuming for the purpose of this application that Mr Kelly is an eligible whistleblower who provided information to ASIC which qualifies for protection under the Corporations Act, it was submitted that it was in the interests of justice for the court to make an order under s 1317AG(d) of the Corporations Act to compel ASIC to produce the documents sought under the subpoena for the following reasons:[11]

    [11] Defendant's submissions filed 10 January 2023 par 22.

    22.1 neither ASIC nor the plaintiffs oppose the Application;

    22.2 it is well known that Mr Kelly has made complaints to ASIC about the Defendant;

    22.3 Mr Kelly has not kept his identity as a complainant to ASIC confidential;

    22.4 there is no risk that the identity of someone other than Mr Kelly would be disclosed;

    22.5 there is no dispute that the documents sought under the Subpoena are relevant to the issues for determination in these proceedings;

    22.6 there is no evidence or risk of victimisation of Mr Kelly by Riversgold;

    22.7 if Mr Kelly is an eligible whistleblower, he will still enjoy the immunities provided under section 1317AB;

    22.8 ASIC has indicated that it is a position to produce the documents sought under the Subpoena on 5 business days' notice; and

    22.9 ASIC will be able to comply with the Subpoena without the risk of contravening sections 1317AG(a) and (b) of the [Corporations Act].

  7. In response to the court's communication of 23 January 2023 (referred to at [21] and [22] above), by an email communication received on 27 January 2023 from Mr Hilton's representatives, the court was informed that Mr Hilton and ASIC were in agreement that:

    1.the court must be satisfied s 1317AG is engaged before turning to whether the court thinks it necessary in the interests of justice for ASIC to produce documents in compliance with the subpoena;

    2.the evidentiary basis upon which the court can be satisfied that s 1317AG is engaged is ASIC's assessment and conclusion as communicated to the court on 16 December 2022, that ASIC is prevented from disclosure pursuant to s 1317AG(a) and (b) unless compelled to do so under s 1317AG(d);

    3.it is not necessary for the court to conduct a separate assessment of ASIC's conclusion that Mr Kelly or another person is an eligible whistleblower, as this would in effect require ASIC to make disclosures (by affidavit and submissions) which may potentially undermine the purpose of s 1317AG(a) and (b);

    4.Mr Hilton does not challenge ASIC's assessment that Mr Kelly or any other person affected by the subpoena are eligible whistleblowers;

    5.the making of an order pursuant to s 1317AG(d) affords protection to ASIC; and

    6.if the court were not satisfied that s 1317AG was engaged, then the court would in any event have inherent power to compel ASIC to comply with the subpoena.[12]

    [12] See also ts 98 (31 January 2023).

  8. No authority was cited in support of this analysis. Indeed, as was noted in the submissions filed on behalf of Mr Hilton on 10 January 2023, no authority dealing with s 1317AG had been identified.

  9. The court was further informed by the correspondence of 27 January 2023 as follows:

    The reason the defendant stated in the submissions that he did not necessarily accept Mr Kelly is an eligible whistleblower is because he is not privy to all the of the facts and circumstances considered by ASIC in concluding s 1317AG applies. The defendant was simply reserving his rights. The defendant accepts, for the purpose of the application, ASIC's assessment and conclusion that Mr Kelly or any other person affected by the Subpoena are eligible whistleblowers.

    …

  10. At the hearing of the first application on 31 January 2023, it was acknowledged on behalf of Mr Hilton that he would not be in a position to form a view as to whether sub‑sections (4) and (5) of s 1317AA were engaged, so as to contend that documents falling within the scope of the subpoena qualified for protection under pt 9.4AAA or not.[13]

    [13] ts 94 - 95 (31 January 2023).

  11. Following receipt of the submissions filed on behalf of ASIC on 3 March 2023, it was Mr Hilton's position that it would be in the interests of justice for the court to compel and/or enforce compliance with its own order (the subpoena) particularly where the order is directed to the attainment of justice in disputed proceedings, such as this one.[14]

The plaintiffs' position

[14] Defendant's responsive submissions filed 17 March 2023.

  1. In response to the court's communication of 23 January 2023, on 30 January 2023 the court was informed that it was the plaintiffs' view that the court must be satisfied that s 1317AG is engaged before moving to the question of whether it is in the interests of justice to order production of the subpoenaed documents, this being a precondition of the exercise of discretion. That is, the plaintiffs did not accept that the court could simply delegate that determination to ASIC. However, it was acknowledged that the preferable course would be for the parties to agree that the precondition had been satisfied, and for the court to then deal with the issue upon that agreed position, rather than conduct its own fact‑finding exercise with the attendant time and cost. It was suggested that the court could then turn to consider whether the 'interests of justice' test had been met.

  2. On behalf of the plaintiffs it was acknowledged that Mr Hilton was not presently in a position to comment on the contents of the documents and as a result, while agreement might be made for the purposes of the first application, it was on the basis that rights would be reserved in that regard as to any future issue.

  3. At the hearing on 31 January 2023, counsel for the plaintiffs (among other things) suggested that as there was no evidence before the court, the court might proceed to determine the application on the basis that it was an agreed fact for the purposes of this application only that a person (that is, the discloser) had made a disclosure of information that qualified for protection under pt 9.4AAA, that is, that s 1317AG applied.[15]

    [15] ts 100 (31 January 2023).

  4. Counsel also agreed with the preliminary view expressed by the court that had ASIC objected to the subpoena in the orthodox way, the documents could have been provided to the court on a confidential basis, and the court could have then satisfied itself as to whether a person (that is, the discloser) had made a disclosure of information that qualified for protection under pt 9.4AAA.[16]

    [16] ts 99 - 100 (31 January 2023).

  5. Following receipt of the submissions filed by ASIC on 3 March 2023 (described below), the plaintiffs' position as to the court's question and the agreed facts was expressed as follows:

    4. The Court's question was whether it must first be positively satisfied that section 1317AG of the Corporations Act is engaged before turning to consider whether the Court thinks it necessary in the interests of justice for ASIC to produce documents in compliance with the subpoena.

    5. The Court identified, in the Plaintiff's respectful view correctly, that section 1317AG contemplates a two-step process whereby the Court must be satisfied:

    5.1 first, that the documents the subject of the Application qualify for protection under Part 9.4AAA such that section 1317AG is engaged; and

    5.2 secondly, that it is necessary in the interests of justice to order the documents to be produced such that section 1317AG(d) applies.

    6. The plaintiffs confirm their agreement that the answer to the Court's question is 'yes'.

    7. The plaintiffs also confirm their agreement, strictly and solely for the purpose the Application, that, with respect to the 'first step', the jurisdictional preconditions to section 1317AG of the Corporations Act are enlivened in this case (i.e., they agree that the first plaintiff's disclosures to ASIC qualified for protection under Part 9.4AAA).

    8. The plaintiffs agree that the Court may proceed on the basis of the parties' agreement with respect to the Court's question and as to the 'first step' arising under section 1317AG.

    9. For the avoidance of doubt, the plaintiffs' agreement summarised in paragraph 7 above is only as to the facts which enliven the jurisdictional preconditions to section 1317AG applying (i.e., that first plaintiff's disclosures to ASIC qualified for protection under Part 9.4AAA). The plaintiffs do not agree that the exception in section 1317AG(d) applies in this case. (footnotes omitted)

ASIC's position

  1. Prior to the hearing on 31 January 2023, the court understood ASIC's position to be as described at [4] and [43] above. At the hearing on 31 January 2023, Mr Chiarella on behalf of ASIC indicated that in circumstances where the parties were prepared for the limited purposes of the first application to agree that s 1317AG was engaged, ASIC agreed that the court was able to proceed on that agreed basis.[17]  I understood that it was also ASIC's position that if the court was to otherwise engage in an analysis as to whether ASIC's assertion by email of 16 December 2022 was a sufficient foundation for the court to be satisfied that a person (the discloser) had made a disclosure of information that qualifies for protection under pt 9.4AAA or otherwise analyse s 1317AG, then ASIC would seek time to file submissions, and ASIC would need to consult with stakeholders such as Treasury and the Australian Prudential Regulation Authority (APRA).[18]

    [17] ts 102 (31 January 2023).

    [18] ts 104 (31 January 2023).

  2. On 3 March 2023, submissions were filed on behalf of ASIC. By the submissions, I understood ASIC to resile from its earlier stated position (expressed via counsel for Mr Hilton on 27 January 2023) that the evidentiary basis upon which the court could be satisfied that s 1317AG was engaged was ASIC's assessment and conclusion as communicated to the court on 16 December 2022.

  3. In response to the question of whether the court ought be positively satisfied that s 1317AG is engaged before turning to consider whether the court thinks it necessary in the interests of justice for ASIC to be required to produce documents in compliance with the subpoena, it was submitted on behalf of ASIC that it is appropriate for the court to be satisfied that s 1317AG applies before making an order under s 1317AG(d), however, the court may proceed on the basis of facts agreed by the parties for this purpose (as evidence is not required to prove a fact not in issue).[19]

    [19] ASIC's submissions filed 3 March 2023 par 4.

  4. ASIC further noted that in other cases, more complex procedural and substantive issues may arise, including how the court, given the prohibition in s 1317AAE(1), can be satisfied of the applicability of s 1317AG; and the way in which any documents should be produced.[20]

    [20] ASIC's submissions filed 3 March 2023 par 10.

  5. In a further communication to the court sent on 14 June 2023, it was acknowledged by ASIC that the court proposed to consider and determine whether the s 1317AG(d) exception applied in this case, and in relation to the same, ASIC referred to and relied upon the submissions of general principle in relation to sub‑section (d) made at pars 26 to 34 of its submissions filed on 3 March 2023.

When the application of s 1317AG is in issue

  1. ASIC submitted that where the application of s 1317AG is in issue, or a party requests that the court exercise its power under s 1317AG(d), it seems tolerably clear that notwithstanding s 1317AAE, ASIC may produce to the court any documents sought by a summons or subpoena, where that is necessary and appropriate for the purposes of determining the issue.[21] ASIC considered that this is so because on its proper construction, s 1317AG is a more specific provision that operates to the exclusion of s 1317AAE where compulsory production to a court or tribunal is contemplated. This is consistent with the exception provided for in s 1317AG(c) which provides that the discloser or other person is not to be required to disclose to a court or tribunal the prohibited information 'except where it is necessary to do so for the purposes of giving effect to this Part'.[22]

    [21] ASIC's submissions filed on 3 March 2023 par 12.

    [22] ASIC's submissions filed on 3 March 2023 par 13.

  2. Further, it was noted that where a court or tribunal determines that it is necessary to consider any documents that fall within the scope of a subpoena to determine the applicability of s 1317AG, or the exception in s 1317AG(d), then disclosure of that information will be necessary for the purpose of giving effect to pt 9.4AAA within the meaning of s 1317AG(c).[23]

    [23] ASIC's submissions filed on 3 March 2023 par 14.

  3. ASIC also addressed the way documents should be produced so as to give effect to pt 9.4AAA. ASIC submitted that where a court or tribunal determines that disclosure is necessary for either or both of these reasons, it would be appropriate to:[24]

    (a)order ASIC to produce any documents or provide evidence; and

    (b)allow the documents or other evidence to be produced in confidence to the court or tribunal, and not the parties.

    [24] ASIC's submissions filed on 3 March 2023 par 15.

  4. It was suggested that the reason for making a formal order would be to make clear production had been compelled, given the potential application of the prohibition in s 1317AAE, and the possibility that information was provided on the basis that it would be kept confidential.[25]

    [25] ASIC's submissions filed on 3 March 2023 par 16, referencing Brown v Commissioner, Australian Federal Police (1988) 15 ALD 318; (1988) 83 ALR 477.

  5. Further, it was submitted that the reason for allowing any disclosure to be made to the court or tribunal in confidence (for example, by way of confidential affidavit) would be to ensure that any information required to be kept confidential by the Corporations Act was kept confidential, at least unless and until an order for disclosure had been made.[26]  ASIC submitted that such an approach is often taken in other contexts, including claims for public interest immunity.[27]  It was ASIC's position that in the absence of such an approach, the protective policy of the relevant provisions in the Corporations Act may be undermined; and the protections afforded by those provisions potentially rendered nugatory.[28]

    [26] ASIC's submissions filed on 3 March 2023 par 17, referencing Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604, 620.

    [27] ASIC's submissions filed on 3 March 2023 par 18, referencing Alister v The Queen [1984] HCA 85; (1984) 154 CLR 404, 469; Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604, 620; Parkin v O'Sullivan [2009] FCA 1096; (2009) 260 ALR 503 [23] ‑ [30] (and the cases there cited); El Ossman v Minister for Immigration and Border Protection [2017] FCA 636; (2017) 248 FCR 491 [30]; Attorney-General (NSW) v Nationwide News Pty Ltd [2007] NSWCCA 307; (2007) 73 NSWLR 635 [43]; National Crime Authority v Gould (1989) 23 FCR 191; (1989) 90 ALR 489.

    [28] ASIC's submissions filed on 3 March 2023 par 17.

  1. ASIC drew upon language used in Commonwealth of Australia v Northern Land Council at 620, stating that there should be no disclosure to the parties or their lawyers of the information over which s 1317AG is asserted, pending the determination of that question, as this would represent an 'encroachment upon the confidentiality claimed for the documents'.[29]

    [29] ASIC's submissions filed on 3 March 2023 par 20.

  2. ASIC referenced other circumstances which may arise, such as where to even confirm that there is material falling within the scope of a subpoena may risk disclosing the identity of a whistleblower (where this is not otherwise known, and the whistleblower has not consented to disclosure), and suggested that it may be appropriate to excuse the recipient of the subpoena from confirming (or denying) whether documents are held which fall within the scope of the subpoena, and from the obligation to produce any such documents.[30]

    [30] ASIC's submissions filed on 3 March 2023 pars 21 - 22, citing Alister v The Queen [1984] HCA 85; (1984) 154 CLR 404, 452; Attorney-General (NSW) v Lipton [2012] NSWCCA 156; (2012) 224 A Crim R 177 [10].

  3. ASIC emphasised that this was not applicable to the circumstances of the first application.[31] ASIC submitted that in this case, ASIC had communicated its position prior to the extended time for compliance with the subpoena. As apparent from the terms of the email, ASIC was concerned about providing a response to the subpoena, given the effect of pt 9.4AAA of the Corporations Act. Given the prohibition in s 1317AAE (the violation of which constitutes an offence: s 1311(1)) and the lack of appellate authority on the provisions and approach to be taken, ASIC submitted that this concern was warranted. ASIC noted that subsequent correspondence established that the parties were content to proceed on the basis that s 1317AG applies.[32]

    [31] ASIC's submissions filed on 3 March 2023 par 21.

    [32] ASIC's submissions filed on 3 March 2023 par 23; referencing first affidavit of SM Samaraweera, SMS-1, page 6, email from ASIC to the Supreme Court of Western Australia Registry dated 16 December 2022.

  4. In other cases, one way ASIC considered this issue might be raised with the court is a request under RSC O 36B r 8A(2) for other relief in respect of a subpoena. Depending on the circumstances, ASIC suggested that it may be necessary for unorthodox orders to be sought, such as an order that ASIC be excused from answering the subpoena altogether, or for unorthodox procedures to be adopted.[33]

Section 1317AG(d)

[33] ASIC's submissions filed on 3 March 2023 par 24.

  1. ASIC's submissions also addressed the phrase 'in the interests of justice' used in s 1317AG(d). ASIC noted that provisions similar to the whistleblower protections in pt 9.4AAA of the Corporations Act are contained in the Taxation Administration Act 1953 (Cth), the Public Interest Disclosure Act 2013 (Cth), Fair Work (Registered Organisations) Act 2009 (Cth), and other various legislation in the banking and financial services sector.[34]

    [34] ASIC's submissions filed on 3 March 2023 par 27, referencing the Taxation Administration Act 1953 (Cth) s 14ZZW; the Public Interest Disclosure Act 2013 (Cth) s 20; the Fair Work (Registered Organisations) Act2009 (Cth) pt 4A ch 11 and various legislation in the banking and financial services sector.

  2. ASIC submitted that the policy of these provisions is to encourage whistleblowers, as has been explained in various explanatory materials. In ASIC's submission, the proper construction of the phrase 'necessary in the interests of justice' should take into account the text of s 1317AG and the context of surrounding provisions, as well as the evident policy of those provisions, as confirmed in the explanatory material.[35]

    [35] ASIC's submissions filed on 3 March 2023 pars 28 - 30, referencing Second Reading Speech for the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018; Parliamentary debates, Hansard, 14 February 2019; the revised explanatory memorandum for the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018; the Senate Economics Legislation Committee Inquiry regarding the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017.

  3. ASIC did not consider it necessary or desirable in the present circumstances to attempt to define the boundaries of the proper construction and approach to s 1317AG(d).[36]  However, it identified the following matters as being relevant to constructing the boundaries:[37]

    (a)the context, which includes the prohibition in s 1317AAE;

    (b)the exceptions in s 1317AG(c) and (d);

    (c)the reference in s 1317AG(d) to it being 'necessary' in the interests of justice (rather than, say, appropriate or convenient);

    (d)the reference in s 1317AG(d) to the court think(ing) it necessary, which suggests a state of positive satisfaction must be reached; and

    (e)a construction of the exception in s 1317AG(d) which conforms with the evident policy behind the provisions.

    [36] ASIC's submissions filed on 3 March 2023 par 31.

    [37] ASIC's submissions filed on 3 March 2023 par 32.

  4. In ASIC's view, s 1317AG(d) on its proper construction, envisages a balancing of the factors for and against disclosure, analogous to that which can occur in claims for public interest immunity.[38]  In this context, ASIC submitted that relevant factors may include:[39]

    (a)the character of the proceedings (and particularly whether they are civil or criminal and the liberty of the subject may be at stake);

    (b)the evident public interest in protecting whistleblowers which lies behind the introduction of pt 9.4AAA and the exceptional nature of a decision to release reflected in the terms of s 1317AG(d); and

    (c)the extent to which the identity of a specific whistleblower remains confidential.

    [38] ASIC's submissions filed on 3 March 2023 par 33.

    [39] ASIC's submissions filed on 3 March 2023 par 34.

  5. For these reasons, ASIC suggested the scope of the exception in s 1317AG(d) may be a narrow one. However, it was suggested that the resolution of the scope of s 1317AG(d) could be deferred to another time.[40]

    [40] ASIC's submissions filed on 3 March 2023 pars 35 - 36.

Disposition

Statutory context

  1. The following draws from the submissions filed on behalf of ASIC and the parties.

  2. Part 9.4AAA of the Corporations Act is concerned with the protection of whistleblowers. In general terms, pt 9.4AAA protects whistleblowers who qualify for protection under the Corporations Act from civil or criminal action when they make disclosures of information that indicate that a company, its officers or employees have or may have contravened the Corporations Act, and also preserves the identity of whistleblowers to prevent victimisation.

  3. Part 9.4AAA was inserted into the Corporations Act in 2004.  The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) was introduced to consolidate and broaden the existing whistleblower protection regime under the Corporations Act. Part 9.4AAA was repealed and replaced in July 2019 with provisions that clarified and expanded the scope of protection offered to the identity of persons making disclosures.

  4. The disclosures by an individual that qualify for protection under pt 9.4AAA are described in s 1317AA. First, the discloser must be an eligible whistleblower in relation to a regulated entity.[41] 

    [41] Corporations Act s 1317AA(1)(a).

  5. Secondly, the disclosure must be made to:[42]

    (a)ASIC, APRA or other Commonwealth body prescribed by regulations;

    (b)an eligible recipient in relation to the regulated entity (eligible recipients for the purposes of pt 9.4AAA are as prescribed in s 1317AAC); or

    (c)a lawyer for the purposes of obtaining legal advice or representation in relation to the operation of pt 9.4AAA.

    [42] CorporationsAct s 1317AA(2) - (3).

  6. Thirdly, the disclosure must concern a disclosable matter. 

  7. A disclosure of information will qualify for protection if the discloser has reasonable grounds to suspect that the information concerns misconduct, or an improper state of affairs or circumstances in relation to the regulated entity; or if the regulated entity is a body corporate, a related body corporate of the regulated entity:  CorporationsAct s 1317AA(4).

  8. Without limiting subsection (4), a disclosure of information will qualify for protection if the discloser has reasonable grounds to suspect that the information indicates that any of the following:[43]

    (a)the regulated entity, or an officer or employee of the regulated entity;

    (b)if the regulated entity is a body corporate, a related body corporate of the regulated entity, or an officer or employee of a related body corporate of the regulated entity;

    has engaged in conduct that:

    (c)constitutes an offence against, or a contravention of the Corporations Act, the Australian Securities and Investments Commission Act 2001 (Cth), the Banking Act 1959 (Cth), the Financial Sector (Collection of Data) Act 2001 (Cth), the Insurance Act 1973 (Cth), the Life Insurance Act 1995 (Cth), the National Consumer Credit Protection Act 2009 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth), or an instrument made under any of these Acts; or

    (d)constitutes an offence against any other law of the Commonwealth that is punishable by imprisonment for a period of 12 months or more; or

    (e)represents a danger to the public or the financial system; or

    (f)is prescribed by the regulations for the purposes of s 1317AA(5) of the CorporationsAct.

    [43] CorporationsAct s 1317AA(5).

  9. Who is an eligible whistleblower in relation to a regulated entity is defined in s 1317AAA of the CorporationsAct. An individual is an eligible whistleblower in relation to a regulated entity if the individual is, or has been: an officer or employee of the regulated entity; an individual who supplies goods or services to the regulated entity or an employee of such a person; an individual who is an associate of the regulated entity; or a relative or dependent of any of them. If a regulated entity is a superannuation entity, who is an eligible whistleblower is defined in s 1317AAA(f).

  10. Section 1317AAB prescribes the entities that are regulated entities for the purposes of pt 9.4AAA, which includes a company: s 1317AAB(a).

  11. Section 1317AAD of the CorporationsAct deals with public interest disclosure and emergency disclosure.

  12. Section 1317AADA concerns personal work‑related grievances.

  13. Section 1317AAE of the CorporationsAct deals with the protection of the confidentiality of a whistleblower's identity. Subsection (1) provides that it is a contravention of s 1317AAE of the CorporationsAct for a person (first person) to disclose information that qualifies for protection under pt 9.4AAA of the Corporations Act that discloses the identity of the discloser, or information that may lead to the identification of a discloser, in circumstances where the confidential information is information that the first person obtained directly or indirectly because of the qualifying disclosure, and the first person's disclosure is not authorised under subsections (2) or (3).

  14. A disclosure is authorised under s 1317AAE(2) of the Corporations Act if it is made to ASIC; to APRA; to a member of the Australian Federal Police; to a legal practitioner for the purpose of obtaining legal advice or legal representation in relation to the operation of pt 9.4AAA; to a person or body prescribed by the regulations for the purposes of s 1317AAE(2)(e); or with the consent of the discloser. Without limiting subsection (2), a disclosure is authorised under subsection (3) if it is made by ASIC, APRA or a member of the Australian Federal Police to a Commonwealth, State or Territory authority, for the purpose of assisting the authority in the performance of its functions or duties. Further, there is no contravention if subsection (4) applies.

  15. Section 1317AB of the CorporationsAct deals with a range of immunities which apply to a person if they make a disclosure that qualifies for protection. Among other things, if a person makes a disclosure that qualifies for protection under pt 9.4AAA, that person is not subject to any civil, criminal or administrative liability for making the disclosure.[44] Also, subsection (c) provides that if the disclosure qualifies for protection under pt 9.4AAA under s 1317AA(1) or s 1317AAD, the information is not admissible in evidence against the person in criminal proceedings or in proceedings for the imposition of a penalty, other than in proceedings in respect of the falsity of the information.

    [44] Corporations Act s 1317AB(1)(a).

  16. Section 1317AC of the CorporationsAct is directed towards the prohibition of the victimisation of whistleblowers, and s 1317AD and s 1317AE of the CorporationsAct deal with compensation and other remedies. For the purposes of s 1317AC and s 1317AD, detriment includes, without limitation: dismissal of an employee; injury of an employee in his or her employment; alteration of an employee's position or duties to his or her disadvantage; discrimination between an employee and other employees of the same employer; harassment or intimidation of a person; harm or injury to a person, including psychological harm; damage to a person's property; damage to a person's reputation; damage to a person's business or financial position and any other damage to a person.[45]

    [45] Corporations Act s 1317ADA.

  17. Part 9.4AAA of the Corporations Act, as originally enacted, required that a whistleblower self identify, and did not offer protection to those who disclosed anonymously. Section 1317AG of the Corporations Act (which is reproduced at [5] above) came into effect in July 2019.

  18. The Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) explains that s 1317AG of the Corporations Act provides an exception to the general position that relevant evidence should be admissible, in order to ensure that the protection of a whistleblower's identity afforded under the Corporations Act cannot be extinguished by means of court processes such as discovery of documents or subpoena.[46]  It further states that the purpose of this additional protection is to prevent individuals from being deterred from exposing wrongdoing for fear of their identity being disclosed in prosecution or other proceedings, and to protect whistleblowers from risk and detriment.[47]

    [46] Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) 2.134, 2.135, 2.136, 5.11.

    [47] Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) 5.11, 5.14.

  19. The Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) states the restriction should be balanced with the interests of justice.[48] 

    [48] Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) 5.13.

  20. There is also a note to s 1317AG, which provides that:

    A discloser may also be able to apply to the court or tribunal, in accordance with the rules of the court or tribunal, for an order preserving the discloser's identity.

  21. Section 1317AG of the Corporations Act is analogous to s 21 of the Public Interest Disclosure Act 2013 (Cth). However it appears that neither section has been the subject of judicial consideration reflected in published reasons.

  22. As to the exceptions to the prohibition in s 1317AG afforded by subsections (c) and (d), the section does not state the criteria to be applied in determining whether the court or tribunal thinks it necessary in the interests of justice for disclosure to be made or production to be given.

  23. As noted above, ASIC submits that the proper construction of the phrase 'necessary in the interests of justice' should take into account the text of s 1317AG and the context of the surrounding provisions, as well as the evident policy of those provisions as confirmed in the explanatory material, which ASIC submits is to encourage whistleblowers.[49]

Section 1317AG

[49] ASIC's submissions filed 3 March 2023 par 30.

  1. As to s 1317AG of the Corporations Act, I make the following observations.

  2. First, the operation of s 1317AG is predicated upon a person (that is, the discloser) having made a disclosure of information that qualifies for protection under pt 9.4AAA. Section 1317AG when read with the remainder of pt 9.4AAA, particularly s 1317AA, makes plain that not all disclosers are 'eligible whistleblowers', and not all disclosures of information by eligible whistleblowers fall within the ambit of pt 9.4AAA and qualify for protection.

  1. Secondly, while the application pressed by Mr Hilton is concerned with production of documents to a court by a person who is not 'the discloser', the section operates so that neither 'the discloser' nor 'any other person' can be required to make certain disclosure to a court or tribunal, or produce certain documents to a court or tribunal, subject to the exceptions provided by subsections (c) and (d).

  2. Thirdly, there is no express limitation to the words 'any other person' in the text of the relevant provision. It is not limited to those to whom disclosure has been made under s 1317AA(1)(b), s 1317AA(2)(b) or s 1317AA(3), nor to those to whom disclosure has been made in circumstances that are otherwise authorised or afforded protection.[50]  This reading is consistent with the discussion recorded in the Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018, which at 2.81 states:

    With the exception of disclosures to or between regulators, the prohibition on disclosure of a whistleblower's identity (and the exceptions there to) applies equally to any person or body that receives the information following the original disclosure.

    [50] For example, pursuant to s 1317AAE(2) of the Corporations Act or a public interest disclosure pursuant to s 1317AAD of the Corporations Act.

  3. In the disposition of the first application, I accept that 'any other person' includes the addressee of the subpoena, being the 'Proper Officer' within the legal division of ASIC.

  4. Fourthly, the object of the section within the part is to provide for the confidentiality of a whistleblower's identity to be maintained. However, the text of s 1317AG makes plain that the prohibition against disclosure in s 1317AG is not absolute. Disclosure is prohibited except where it is necessary for the purposes of giving effect to pt 9.4AAA; or where the court or tribunal thinks it necessary in the interests of justice. Under subsection (d), a court or tribunal has the power to circumvent that prohibition, but only if that court or tribunal thinks that disclosure or production to it is necessary in the interests of justice. That is, whether disclosure or production is 'necessary in the interests of justice' within the meaning of s 1317AG(d) is a matter to be determined by the court exercising judicial discretion.

  5. In this regard, s 1317AG is consistent with other provisions within pt 9.4AAA. While anonymous disclosure is now permitted,[51] and the unauthorised disclosure of 'confidential information' in certain circumstances will constitute an offence,[52] it is not a precondition to a whistleblower being afforded the various protections under pt 9.4AAA for their identity to remain confidential. Further, it is not an offence under s 1317AAE to disclose the identity of a whistleblower, or information likely to lead to their identification, with the consent of the whistleblower.[53]

    [51] As is made clear in the note to s 1317AA of the Corporations Act, which provides that '[t]here is no requirement for a discloser to identify himself or herself in order for a disclosure to qualify for protection under this Part.'  See also the Revised Explanatory Memorandum, Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) 2.73.

    [52] Corporations Act s 1317AAE(1).

    [53] Corporations Act s 1317AAE(2)(f).

  1. Fifthly, in order for the exception in subsection (d) to be invoked, the court or tribunal must think disclosure or production necessary in the interests of justice.  The word 'necessary' ought be afforded its natural meaning, and the court or tribunal must think disclosure or production is essential, indispensable or requisite in the interests of justice.[54]  The inclusion of the word 'necessary' in subsection (d) appears to impose a more stringent test than other provisions of the Corporations Act where a court is afforded the power to make orders where it is thought to be 'convenient', 'desirable' or 'just and equitable'.[55]

    [54] Macquarie Dictionary (online) definition of 'necessary'.

    [55] The words 'if the court thinks necessary' are used in s 601NF of the Corporations Act s 601NF(2), and discussed in LM Investment Management Ltd (ACN 077 208 461) (in liq) (recs and mgrs apptd) (as responsible entity of the LM First Mortgage Income Fund) v Bruce [2014] QCA 136; (2014) 102 ACSR 481 [137] ‑ [138] (Fraser JA), citing Earglow Pty Ltd v Newcrest Mining Ltd [2015] FCA 328; (2015) 324 ALR 316 [31] ‑ [37].

  2. Sixthly, s 1317AG does not state the criteria to be applied when a court or tribunal considers whether disclosure or production is necessary in the interests of justice. While subsection (d) gives the court a great deal of flexibility, the words 'thinks it necessary' requires the court or tribunal to be satisfied that an exemption granted under subsection (d) meets the statutory test, that is, that disclosure is necessary in the interests of justice.

  3. As was submitted on behalf of ASIC, I accept that it is neither necessary nor appropriate to try to list here all factors that might be relevant to the exercise of judicial discretion pursuant to s 1317AG(d). I proceed on the basis that when considering whether disclosure or production is necessary in the interests of justice in the context of s 1317AG, it may be appropriate for the court or tribunal to consider:

    (a)the evident policy in pt 9.4AAA to preserve the identity of whistleblowers to prevent victimisation;

    (b)the context in which the application is made, the nature of any underlying action in which the application is made, and the extent to which the information or documents sought relate to one or more of the matters in question in that action by reference to pleadings or otherwise;

    (c)the proposed use of the information or documents; and

    (d)whether the information might be obtained otherwise, in a manner that would not disclose to the court or tribunal the identity of the discloser or information that is likely to lead to the identification of the discloser.

  4. When balancing the restriction with the interests of justice, it may also be appropriate to consider the views of the discloser to the application; the potential for detriment or prejudice to be suffered by the discloser; the extent to which the discloser's identity is in the public domain; the extent to which the discloser's identity is otherwise known to the parties to the proceeding before the court or tribunal; the views of the body to whom disclosure had been made under s 1317AA(1)(b), s 1317AA(2)(b) or s 1317AA(3) of the Corporations Act; and whether orders may be made in accordance with the rules of the court or tribunal, protecting the discloser's identity or prohibiting publication of information that is likely to lead to the identification of the discloser.

Application of s 1317AG

  1. The subpoena issued to ASIC at the request of Mr Hilton is an order requiring ASIC to produce the subpoena (or a copy of it) and the document or thing as directed by the subpoena.  The subpoena was issued in the prescribed form,[56] which included the following note:

    [56] RSC O 36B r 3(1); Form 21A.

Applications in relation to subpoena

9. You have the right to apply (before or after complying with this subpoena) to the Court for an order —

(a)  setting aside this subpoena (or a part of it);

(b) giving directions in relation to removing from and returning to the Court, and the inspection, copying and disposal, of any document or thing that you produce or are required to produce by this subpoena;

(c)  giving other relief in respect of it.

Unless the Court has made such an order, a registrar may permit the parties to the proceeding to inspect, copy, or remove and return any document or thing you produce under this subpoena.

  1. The documents ordered to be produced by ASIC are documents recording any complaints or statements made by Mr Kelly regarding Riversgold, and ASIC considers itself precluded from complying with the subpoena in light of effect of pt 9.4AAA of the Corporations Act, including s 1317AG.

  2. If a person (the discloser) has made a disclosure of information that qualifies for protection under pt 9.4AAA of the Corporations Act, then ASIC (being 'any other person' for the purposes of s 1317AG) is not to be required to produce to the court a document containing the identity of the discloser; or information that is likely to lead to the identification of the discloser. Part 9.4AAA is concerned with protection for whistleblowers. Section 1317AG does not ground a basis for non-compliance with the court's subpoena unless a person (the discloser) has made a disclosure of information that qualifies for protection under pt 9.4AAA of the Corporations Act.

  3. Although it is well established that in the ordinary course, where an addressee objects to producing documents, the grounds of the objection should be stated on oath so that the court may determine their sufficiency,[57] ASIC initially considered that its informal communication by an email addressed to this court's registry was an adequate response to a subpoena to produce. The processes prescribed in the RSC O 36B were not observed by ASIC, in that no formal objection was taken nor was a request made by ASIC in the manner prescribed by the RSC O 36B r 8B, and no affidavit was filed in which an officer of ASIC deposed to the grounds of objection so that the court could determine their sufficiency. As a consequence, while ASIC purported to object to producing documents pursuant to the subpoena by reference to s 1317AG of the Corporations Act, no determination was made as to whether the prohibition in s 1317AG was engaged such that ASIC's objection to production was properly taken. It was in these circumstances that Mr Hilton filed the first application.

    [57] LexisNexis, Civil Procedure Western Australia, (online version) at [36B.8B.4], citing Rochfort v Trade Practices Commission [1982] HCA 66; (1982) 153 CLR 134, 143.

  4. Mr Hilton as applicant was put in a very difficult position by the approach adopted by ASIC in response to the subpoena. ASIC did not respond to the subpoena as prescribed by this court's rules or practice directions. While Mr Hilton made the first application seeking to invoke the exception in sub-section (d), he was in no position to satisfy the court that s 1317AG was in fact engaged.

  5. In this case, after the first application was made, all parties and ASIC resolved that they were prepared for the court to proceed on the basis that the documents to be produced by ASIC pursuant to the subpoena qualify for protection under pt 9.4AAA such that s 1317AG is engaged. In the end, in light of the position adopted by the parties for the purpose of the first application, it was not necessary for ASIC to put before the court evidence so that the court might determine the sufficiency of ASIC's objection.

  6. The early suggestion that the evidentiary basis upon which the court can be satisfied that s 1317AG is engaged is the assessment and assertion of 'the discloser or any other person' (in this case, ASIC) was not maintained. What is required for the purpose of objecting to disclosure by operation of s 1317AG will likely depend upon the circumstances in which disclosure is sought. As is noted above, 'any other person' in s 1317AG is not limited to those to whom disclosure has been made under s 1317AA(1)(b), s 1317AA(2)(b) or s 1317AA(3). Further, the section may be invoked in circumstances where there is controversy as to whether a disclosure of information in fact qualifies for protection.

  7. While s 1317AG may apply in varied circumstances, ASIC in the end accepted that: [58]

    Where the application of s 1317AG is in issue or a party requests that the Court exercise its power under s 1317AG(d), it seems tolerably clear that, notwithstanding s 1317AAE, ASIC may produce to the Court any documents sought by a summons or subpoena, where that is necessary and appropriate for the purposes of determining the issue.

    [58] ASIC's submissions filed 3 March 2023 par 12.

  8. In this court there was a mechanism available to ASIC under the RSC O 36B r 8A(2) by which ASIC could have sought an order to set aside the subpoena or part of it; or sought relief in respect of the subpoena in reliance upon s 1317AG or otherwise. Further, ASIC may have sought orders pursuant to RSC O 67B r 5(1)(b) restricting access to any application made under the RSC O 36B r 8A(2) for relief pursuant to the subpoena, which might have restricted access to any affidavit deposed in support of ASIC's position and submissions filed.

  9. I accept, as was submitted on behalf of ASIC, that depending upon the circumstances, it may be necessary for unorthodox orders to be sought.[59] The approach that ought to have been taken in the circumstances of the first application was similar to that taken when a claim of legal professional privilege is made. When invoking s 1317AG, the facts relied upon by ASIC ought to have been deposed to so that the claim could be tested, but not in so much detail as would reveal the identity of the discloser and undermine the purpose of s 1317AG(a) and (b). In appropriate circumstances (where the court thinks it necessary in the interests of justice), an order might be made pursuant to the RSC O 67B r 5 restricting access to documents filed in support of the claim to all but the court, so that the claim can be tested with the benefit of having regard to the documents.

Is production by ASIC necessary in the interests of justice?

[59] See [66] above.

  1. As is noted above, the text of s 1317AG makes plain that the prohibition against disclosure in s 1317AG is not absolute, and one of two available exceptions is afforded by subsection (d), but only if that court or tribunal thinks that disclosure or production to it is necessary in the interests of justice. In the circumstances in which the first application is prosecuted, having regard to the affidavits of Ms Samaraweera and Mr Hilton, I consider it necessary in the interests of justice for ASIC to answer the subpoena and produce to this court documents containing the identity of the discloser; or information that is likely to lead to the identification of the discloser.

  2. In so concluding, I weighed the following in the balance.

  3. First, I had regard to the context in which the application was made, and the proposed use of the information or documents.

  4. Documents which fall within the ambit of the subpoena addressed to ASIC appear to have been subpoenaed for legitimate forensic purpose.  Mr Hilton contends that documents falling within the scope of the subpoena are relevant to the determination of the foreshadowed contempt application, and the question of whether Mr Kelly has indeed caused documents discovered by Mr Hilton in this action to be used for collateral or ulterior purposes; and/or to be used to interfere with the proper administration of justice in that discovered documents were provided to a regulatory body for it to investigate claims and make referrals for legal action against Mr Hilton and/or others which would have the effect of placing pressure on Mr Hilton in regards to this action.[60]

    [60] Affidavit of JC Hilton par 16.

  5. I proceeded on the basis that the class of documents subpoenaed appear to be relevant to the issues for determination in an application made in this proceeding (the purge application), and an application intended to be made in this proceeding (the foreshadowed contempt application).  Given the narrow scope of the subpoena, I am comfortable so proceeding without inspecting the subpoenaed documents.

  6. I note that in a different context, the exercise of judicial discretion may require the court to examine the subpoena documents (with appropriate safeguards) in order for court to be satisfied that the exception in s 1317AG(d) applies, that is, that production is necessary in the interests of justice. In the circumstances of the first application, I considered it possible to proceed without inspection.

  7. Secondly, this is not a case where the identity of 'the discloser' is not known to the parties to the proceeding or the court.  The ambit of the subpoena is directed at documents recording any complaints or statements made by Mr Kelly, as discloser, to ASIC.

  8. Thirdly, I have considered the views of Mr Kelly, who I understand to be the discloser for the purposes of s 1317AG. Mr Kelly's position is set out at [48] to [52] above. Relevantly, the exercise of discretion by the court pursuant to s 1317AG(d) is not opposed.

  9. Fourthly, I considered the potential for detriment or prejudice to be suffered by the discloser.  In the circumstances of the first application, there was no concern raised as to the potential victimisation of the discloser, or evidence of potential prejudice that might flow from the grant of an exception pursuant to sub‑section (d).

  10. Fifthly, I had regard to the attitude of ASIC to the application.  I take considerable comfort that ASIC does not oppose the first application.

  11. Finally, I was cognisant that the exercise of discretion in favour of a sub‑section (d) exception will not affect the immunities provided to an eligible whistleblower under s 1317AB.

Conclusion and orders

  1. For these reasons, the first application is granted and an order will be made in the terms set out at sch A to these reasons.  I will hear the parties and ASIC as to costs.

Sch A - Proposed order

1.Within 5 business days of the date of this order, ASIC must produce to the Supreme Court of Western Australia, located at David Malcolm Justice Centre Level 11, 28 Barrack Street, Perth in the State of Western Australia, the documents described in the subpoena issued to ASIC by this court at the request of the defendant dated 14 November 2022.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RW

Associate to the Honourable Justice Strk

28 JUNE 2023


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Cases Citing This Decision

2

Kelly v Hilton [No 4] [2023] WASC 282
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Cases Cited

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Statutory Material Cited

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Kelly v Hilton [2021] WASC 369
Kelly v Hilton [No 2] [2022] WASC 374
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