LHRC v Deputy Commissioner of Taxation (No 4)

[2015] FCA 70

FEDERAL COURT OF AUSTRALIA

LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70

Citation:	LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70
Parties:	LHRC, LHRD, LHRE, LHRF, LHRG, LHRH v DEPUTY COMMISSIONER OF TAXATION and AUSTRALIAN CRIME COMMISSION
File number(s):	NSD 365 of 2014
Judge(s):	PERRY J
Date of judgment:	12 February 2015
Addendum:	2 March 2015
Catchwords:	PRACTICE AND PROCEDURE – Where evidence is given at an examination by the Australian Crime Commission pursuant to exercise of compulsive powers – Where no privilege against self-incrimination at examination – Whether suppression orders necessary to prevent prejudice to proper administration of justice – Whether entirety of proceedings and judgment should be suppressed – Importance of open justice
Legislation:	Australian Crime Commission Act 2002 (Cth) ss 25A, 28(1), 30(5) Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG, 37AJ Income Tax Assessment Act 1936 (Cth) s 264
Cases cited:	Australian Broadcasting Commission v Parish (1980) 29 ALR 228 Brown v Brown (No. 3) [2007] FamCA 1639 David Syme & Co Ltd v GMH Ltd [1984] 2 NSWLR 294 Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 John Fairfax Group Pty Ltd v Local Court of NSW (1991) 26 NSWLR 131 LHRC v Deputy Commissioner of Taxation [2015] FCA 52 SRD v Australian Securities Commission (1994) 52 FCR 187
Date of hearing:	18 August 2014
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	27
Counsel for the Applicants:	Mr Hyde Page
Solicitor for the Applicants:	Dormer Stanhope
Counsel for the First Respondent:	Ms K Morgan
Counsel for the Second Respondent:	Ms K Alexander (Solicitor)
Solicitor for the Respondents:	Australian Government Solicitor

FEDERAL COURT OF AUSTRALIA

LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70

ADDENDUM

1. On 2 March 2015, with retrospective effect to 19 February 2015, order 8 of the orders made on 12 February 2015 was vacated.

I certify that the preceding one (1) numbered paragraph is a true copy of the Addendum to the Reasons for Judgment herein of the Honourable Justice Perry.

Associate:

Dated:        2 March 2015

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 365 of 2014

BETWEEN:

LHRC
First Applicant

LHRD
Second Applicant

LHRE
Third Applicant

LHRF
Fourth Applicant

LHRG
Fifth Applicant

LHRH
Sixth Applicant

AND:

DEPUTY COMMISSIONER OF TAXATION
First Respondent

AUSTRALIAN CRIME COMMISSION
Second Respondent

JUDGE:	PERRY J
DATE OF ORDER:	12 FEBRUARY 2015
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and subject to Orders 2 and 3 below and to the confidential order also made on 12 February 2015:

(a)the contents of any documents filed or tendered; and

(b)the transcript of any hearing;

in this proceeding are not to be disclosed to anyone except the parties to the proceedings and their legal representatives, the Commonwealth Attorney General’s Department, the Court and Court Staff.

2.Order 1 above does not apply to references which are made to such evidence or transcript in the final judgment in these proceedings or in the reasons for these orders.

3.Order 1 does not operate so as to prevent a party or its legal representatives from disclosing documents that were already in that party’s possession before the commencement of these proceedings, where such disclosure is otherwise permitted by law.

4.On or before 4.00 pm on 13 February 2015 all parties are to destroy in a secure manner all electronic and printed copies of the reasons delivered on 6 February 2015.

5.Pursuant to s 37AJ of the Federal Court of Australia Act 1976 (Cth) and subject to further order of the Court, order 1 is to remain in force until 1 January 2034.

6.Any judgment or order in these proceedings is to refer to the applicants by use of a pseudonym.

7.On or before 4.00 pm on 13 February 2015, the parties are to file and serve any submissions suggesting redactions from the reasons that accompany these orders in order to prevent disclosure of the identity of the first applicant.

8.Pending further order, no party is to disseminate the reasons given on 12 February 2015 for these orders otherwise than to the parties and their legal representatives.

9.There be liberty to apply.

THE COURT NOTES THAT:

10.Pursuant to s 37AG of the Federal Court of Australia Act 1976 (Cth), the ground on which these orders are made is that they are necessary to prevent prejudice to the proper administration of justice.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 365 of 2014

BETWEEN:

LHRC
First Applicant

LHRD
Second Applicant

LHRE
Third Applicant

LHRF
Fourth Applicant

LHRG
Fifth Applicant

LHRH
Sixth Applicant

AND:

DEPUTY COMMISSIONER OF TAXATION
First Respondent

AUSTRALIAN CRIME COMMISSION
Second Respondent

JUDGE:	PERRY J
DATE:	12 FEBRUARY 2015
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1.               THE ISSUES      

1. On 6 February 2015, I made orders dismissing the substantive application for relief and published my reasons in LHRC v Deputy Commissioner of Taxation [2015] FCA 52 (LHRC). The applicants had sought relief intended to ensure that those conducting any interview of the first applicant pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) did not have access to, or knowledge of, the substance of the first applicant’s evidence given in an examination on 24 February 2011 by the Australian Crime Commission (the Commission or ACC) in the exercise of compulsive powers under the Australian Crime Commission Act 2002 (Cth) (the ACC Act). At the examination, while the first applicant had no privilege against self-incrimination, he answered questions on the basis that he had invoked protections under the ACC Act limiting the uses to which his evidence could be put.

2. At the time of delivering my reasons, I also made orders that: 

   3.   On or before 4.00 pm on Tuesday, 10 February 2015, the parties are to file and serve any submissions suggesting redactions from these reasons in order to prevent disclosure of the identity of the first applicant.

   4.   Pending further order, no party is to disseminate the reasons given on 6 February 2015 otherwise than to the parties and their legal representatives.

3. This otherwise left outstanding the interlocutory applications for suppression orders under s 37AF of the Federal Court of Australia Act1976 (Cth) (the Federal Court Act) made by the ACC on 31 July 2014 for suppression of the transcript of the ACC examination and the applicants on 29 August 2014 by an amended application for more comprehensive suppression orders and a pseudonym order. Oral submissions were made by the parties following the trial in relation to the interlocutory applications which were supplemented by further written submissions. 

4. As my orders and the ascribing of a pseudonym to the title of the proceedings foreshadowed, I have decided that it is appropriate to make orders largely in line with those proposed by the applicants.   

   2.               BACKGROUND

5. Interim orders suppressing the publication of any documents filed or orders made in the proceeding and any transcript that would disclose defined information were initially made by the duty judge in early 2014 pursuant to s 37AI of the Federal Court Act.

6. Shortly thereafter, the matter came before me and I made suppression orders in these proceedings.  At that time, both the Commissioner and the applicants made submissions as to why they considered it was appropriate for suppression orders to be made and for them to endure for twenty years.  The ACC was not then a party to these proceedings.

7. The operative paragraph in these orders (including amendments made by consent on 8 May 2014 and 30 September 2014) was in the following terms:

   1.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth),

   (a)the contents of any documents filed or tendered,

   (b)the contents of any order made, and

   (c)the transcript of any hearing,

   in this proceeding not be disclosed to anyone other than the parties and their legal representatives in these proceedings, in proceedings [redacted] and in any appeal therefrom, the Court and Court staff, the Commonwealth Attorney-General’s Department and the Australian Crime Commission.

   (The amendments made on 8 May 2014 are identified by single underlining and those on 30 September by double underlining.)

8. I made these orders on the ground that I was satisfied that they were necessary to prevent prejudice to the proper administration of justice in accordance with s 37AG(1)(a) and (2) of the Federal Court Act. In particular, I took into account that the substantive proceedings relate to a non-publication direction made by the ACC with respect to a transcript of evidence given by the applicant before an examiner in the context of a special investigation pursuant to a summons issued under s 28(1) of the ACC Act. That direction has been varied on a couple of occasions but continues to impose strict limitations upon the persons to whom the information may be disclosed and the purposes for which the information might be used: see LHRC at [84]-[90]. I also took into account that the applicant contended that the failure to protect the information subject to the non-publication direction by the ACC against publication in these proceedings may prejudice the investigation pursuant to which the examination was undertaken and that the Commissioner was of the same view.

   3.               THE POWER TO MAKE A SUPPRESSION OR NON-PUBLICATION ORDER

9. Section 37AF of the Federal Court Act provides that:

   (1)The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:

   (a)information tending to reveal the identity of all otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or

   (b)information that relates to a proceeding before the Court and is:

   (i)information that comprises evidence or information about evidence; or

   (ii)information obtained by the process of discovery; or

   (iii)information produced under a subpoena; or

   (iv)information lodged with or filed in the Court.

   (2)The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).

10. Section 37AE provides that, in deciding whether to make a suppression or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. As, for example, Hill J observed in SRD v Australian Securities Commission (1994) 52 FCR 187 at 189:

    It will ordinarily be essential in order to maintain confidence in the integrity and independence of the Court that its proceedings be open to scrutiny by the general public and it will only be in exceptional cases where the interest of justice would override the ordinary requirement of open justice.

11. Consistently with this primary objective, s 37AG provides that the Court may make a suppression or non-publication order on the grounds that the order is “necessary” relevantly to prevent prejudice to the proper administration of justice.  As such, the section imposes a high threshold for the making of such an order consistently with the principle that open justice is a fundamental tenet of the rule of the law.  As the High Court said in Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30], “‘necessary’ is a strong word.”  However, as the Court also said in Hogan at [33], once the court has reached that state of satisfaction, it would be a misreading of s 50 of the Federal Court Act (and, by analogy, its successor provisions, ss 37AF and 37AG) to then refuse to make the order. Furthermore, under s 37AJ, in deciding the period for which an order is to operate, the Court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made.

    4.               THE PARTIES’ RESPECTIVE POSITIONS

12. The ACC seeks orders suppressing the transcript of the ACC examination of the first applicant on 24 February 2011 for twenty years, but subject to a “carveout” so as to permit a party or its legal representatives to disclose documents already in that party’s possession before commencement of proceedings where such disclosure is otherwise permitted by law.  The transcript of the ACC examination was tendered in evidence as part of exhibit A1. 

13. The applicants seek more comprehensive suppression orders which would ensure also the confidentiality of the first applicant.  In summary, they seek the following alternative sets of suppression orders:

    Alternative 1

    (a)All documents in the proceedings would be suppressed, including transcripts of any hearings, but excluding the reasons for decision and orders; and

    (b)the applicants would be referred to by a pseudonym in the reasons for judgment, court orders and information displayed on the Commonwealth Court’s Portal.

    Alternative 2

    (a)All documents in the proceedings would be suppressed, including transcripts, orders and the reasons for decision.

    Alternative 3

    (a)Only the transcript of the ACC examination of the first applicant would be suppressed and “any document that discloses the nature of any answers provided by the First Applicant in the examination”; and

    (b)if any person applies to review items on the court file, each party has three business days to apply regarding any items it proposes should be suppressed.

14. The ACC and the applicants led evidence in support of the orders sought. 

15. While the ACC did not contend that it was necessary, the ACC does not oppose the use of a pseudonym.  The first set of proposed suppression orders by the applicants is not opposed by the Commissioner. Nor does the Commissioner oppose the third alternative set of proposed orders in principle but correctly points to practical difficulties that would be posed in administering the orders. In any event, as I explain below, I consider that the first set of proposed suppression orders is necessary to protect against prejudice that would otherwise be suffered to the administration of justice.

    5.               CONSIDERATION

    5.1             The second alternative proposed by the applicants

16. The second alternative proposed by the applicants would mean that the entirety of the case would be kept confidential, including the reasons and orders.  I agree with the submissions for the Commissioner that it is not in the interests of justice to make so extreme a suppression order.  As Street CJ said in David Syme & Co Ltd v GMH Ltd [1984] 2 NSWLR 294 at 300G, “I hesitate to state an absolute but I find it difficult to conceive a situation in which the need for confidentiality is such as to justify a total non-disclosure of the judge’s reasons and order”.  His Honour continued at 300-301:

    So far as concerns the statement of reasons I should have thought that it would always be possible for them to be formulated in such general terms as would … convey an adequate account of the litigation and the reasons underlying the orders.  Where it is absolutely necessary that the reasons incorporate confidential material, it is commonplace for that material to be identified by some neutral description and to be set out in a document directed to be sealed up with an appropriate endorsement and placed with the papers.  Incorporation in this way by reference has been found an effective means of enabling a trial judge to canvass confidential material adequately while at the same time giving, as he is obliged to, a public account of the litigation and the reasons for his orders.  Failure to adopt either this or some other course which would enable such a public account to be given will, in my view, almost invariably, if not invariably, amount to error on the part of the trial judge.  The extent and the content of the public account may vary according to the particular case in hand.  I repeat, however, that I find it difficult to conceive any case in which it is impossible to provide some statement by way of a public account of the proceedings and the reasons.

17. Similarly, in Brown v Brown (No. 3) [2007] FamCA 1639, Moore J declined to suppress the whole of his reasons for judgment under the Family Law Act 1975 (Cth), holding at [26] that:

    … I cannot identify here any sufficient justification for such an extreme measure. To do so would go beyond providing anonymity which is the focus of s 121 [of the Family Law Act] and beyond suppressing parts that might possibly be categorised as an acceptable exception to the principle of open administration of justice. If there are legitimate interests to be protected, editing is the answer, not wholesale suppression.

18. Equally, I do not consider that suppression of the entirety of these proceedings, including the reasons for judgment and orders disposing of the matter, can be justified.

    5.2             The first alternative set of suppression orders sought by the applicants

19. However, I do consider that it is appropriate for orders to be made protecting not only the transcript of the ACC examination, but also the identity of the first applicant, the transcripts of the hearings in this Court and other documents filed or tendered.  I have reached this view because of the potential prejudice otherwise to the administration of justice and the “chilling effect” that publication of the applicant’s identity may have on the processes of the ACC. As Mahoney JA stated (Hope AJA agreeing) in John Fairfax Group Pty Ltd v Local Court of NSW (1991) 26 NSWLR 131 at 161:

    This leads to the consideration of what is meant by “necessary to secure the proper administration of justice” in this context. The phrase does not mean that if the relevant order is not made, the proceedings will not be able to continue. Plainly they can.  If the name of an informer is not hidden under a pseudonym, the proceeding will go on: at least, the instant proceeding will.… The basis of the implication is that if the kind of order proposed is not made, the result will be – or at least will be assumed to be – that particular consequences will flow, that those consequences are unacceptable, and that therefore the power to make orders which will prevent them is to be implied as necessary to the proper function of the court. The kinds of consequences that, in this sense, will be seen as unacceptable may be gauged by those involved in the cases in which statutory courts have been accepted as having restrictive powers. Thus, there will be hardship on the informer or the security officer or the blackmail victim; the future supply of information from such persons will end or will be impeded; and it will be more difficult to obtain from such persons the evidence necessary to bring offenders before the courts and deal with them.

20. Here, the abrogation of the privilege against self-incrimination in ACC examinations reflects the priority afforded by the Parliament to the public interest in the ACC being armed with full and effective investigatory powers into serious and organised crime over the rights of individuals. By way of partial redress for the loss of that privilege, among other things examinations are held in private and ss 25A(9) and (11) of the ACC Act require non-publication directions to protect an examinee against the potential impact that disclosure of his or her identity and of the content of an examination might have on his or her safety or reputation, as well as on the capacity to hold a fair trial. To permit this information therefore to be released publicly, i.e. without restriction, would cut across that scheme and would not be a step lightly taken. This is particularly so given:

    (a)the nature of the conduct which was the subject of the examination;

    (b)the fact that non-publication directions are in place (albeit not binding on the Court) which otherwise continue to protect the identity of the first applicant, as well as the content of his evidence and the fact that the examination was held:  see LRHC at [84]-[90]; and

    (c)the evidence (which, while hearsay, was unchallenged) as to the first applicant’s understandable concern about damage to his reputation  if the fact that he attended an ACC examination is made public, or prejudice to a fair trial if he is charged at some later time.

1. While the ACC contended for a narrower set of suppression orders, I consider that its evidence bears out the concerns to which Mahoney JA referred in the analogous case of informers, and strongly supports the orders sought by the applicants.  Specifically, the State Manager of the New South Wales Office of the ACC and then Acting Executive Director of Operations in the ACC, Mr Warren Gray, gave evidence that:

   10.      The position of individuals who are summonsed to attend an examination before the ACC is akin to that of an informer, in that:

   10.1     the witness is not permitted to disclose receipt of the summons to any person aside from a legal representative pursuant to s 29A of the Act; and

   10.2      a non-publication direction is made at the conclusion of the examination restricting access to examination information to persons specified by the Examiner.

   11.      In making any non-publication direction or varying such a direction, the Examiner and the CEO must take into account any prejudice to the safety or reputation of a person or prejudice to the fair trial of a person who has been or may be charged with an offence.

   12.      In my experience, witnesses who are compelled to attend the ACC for an examination take some measure of comfort from the secrecy provisions relating to examinations, in that they are more inclined to provide information that can assist the ACC if they are assured that the disclosure of information they provide to the ACC will be restricted.

   13.      The ACC is concerned that if the ACC transcript were to be published it would have the effect of discouraging witnesses from providing important assistance to the ACC and law enforcement agencies.  There is a strong public interest in encouraging persons being examined by the ACC to speak the truth freely by guaranteeing that disclosure of what they say will remain restricted.

   14.      For the above reasons it is my opinion that the disclosure of the ACC transcript beyond the terms of the ACC’s non-publication direction has the potential to prejudice the administration of justice and the non-publication orders sought by the ACC are necessary to prevent such prejudice.

2. I accept the force of that evidence. 

3. Fourthly, this is not a case where the making of such orders, including a pseudonym order, lacks utility despite no order for the use of a pseudonym having been sought at the start of the proceedings.  No party contended otherwise. The hearings have been conducted almost exclusively in closed court, and the pleadings and other documents filed in the proceedings have been protected by the suppression orders to which I have referred.  Accordingly I consider that the use of pseudonyms in the written reasons and orders, together with the other orders sought, will provide appropriate and necessary protection to the applicant’s identity.

4. In the fifth place, I am of the view that the contents of the transcript of the ACC examination ought to be kept confidential in so far as it records the giving of evidence. However, I do not consider that there is any warrant for not including in my published reasons those parts of the transcript in which the first applicant claims the protection of s 30(5) of the ACC Act with respect to incriminatory evidence or that part of the transcript where the examiner makes the non-publication direction (collectively, the procedural passages).  In these circumstances, I consider that the appropriate course is to make an order that protects the confidentiality of the transcript while permitting publication of passages in my published reasons subject to redacting information from those passages of the transcript which might otherwise identify the first applicant.

5. I have also taken into account the fact that the suppression orders are not opposed, consistently with the fact that the interim and interlocutory suppression orders, as well as all of the amendments to them, were made by consent.  In this regard, Deane J said in Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 254 with respect to (then) s 50 of the Federal Court Act:

   In considering an application for an order for confidentiality under s 50, the weight to be given to the prima facie desirability of the evidence in proceedings before the Federal Court being open to the public may vary according to whether the other party to the litigation opposes, or consents to, the making of the order sought. This is not only because an order under s 50 will affect the prima facie right of the litigant that the evidence in his particular case be open to public scrutiny. It is also because there is less likelihood of damage to public confidence in the administration of justice if an order for confidentiality is made in circumstances where the parties to the litigation are agreed that the order should be made, than if such an order is made in circumstances where the other party or parties protest against the relevant evidence being concealed from public scrutiny.

6. Finally, in all of the circumstances, I consider that it is appropriate and necessary for the suppression order to be expressed to endure for a substantial period of time, although it is not possible to set a period by reference to precise criteria. For this reason, I consider that it is appropriate to provide that the suppression order would endure until 2034 in line with the suppression orders earlier made, subject to any further order of the Court.

   6.               COSTS

7. The first respondent sought its costs in relation to the applicant’s amended application for suppression orders filed on 29 August 2014 and the provision of additional submissions. It is my tentative view that the first respondent ought to receive these costs as it submits. I have, however, reserved the question of costs otherwise in these proceedings so as to afford the parties the opportunity to be heard on the issue and consider in all of the circumstances that it would be more convenient to deal with the totality of the issues as to questions of costs at the same time.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.

Associate:

Dated:        12 February 2015