McLachlan v Australian Stock Exchange & Anor No. Scgrg-98-573 Judgment No. S6925

McLACHLAN v AUSTRALIAN STOCK EXCHANGE LTD & ANOR
[1998] SASC 6925

Full Court: Olsson, Lander and Bleby JJ

OLSSON J

Introduction

This is an appeal against a decision of the Chief Justice, whereby he dismissed a claim by the appellant for certain declaratory and injunctive relief in relation to an internal inquiry and consequential disciplinary proceedings initiated against the appellant by the first named respondent (“the ASX”).

Background history

The relevant train of events commenced on or about 13 April 1997, when Mr Kinsky (the National Manager, Market Intermediaries Division of the ASX) received information which suggested that irregularities may have occurred in connection with dealings between Thomson Brindal Limited (“TBL”), a stock broker and corporate member of the ASX of which the appellant was Managing Director, a company known as Retireinvest Pty Ltd (“Retireinvest”) and a large number of investors on whose behalf transactions had occurred. Those transactions had involved both TBL and Retireinvest.
On 15 April 1997 Kinsky, purporting to exercise powers of the Board of ASX sub-delegated to him, orally directed the second respondent (“Francese”) to “investigate and determine whether, in his opinion, any breach of ASX’s Articles or Business Rules, or any Prohibited [Conduct] had occurred in relation to the TBL/Retireinvest matter”.
Francese was a duly appointed exchange inspector for the purposes of the Business Rules of the ASX. He was also the State Manager, Membership of the ASX.
By resolution dated 26 July 1996 the Board of the ASX, inter alia, had made a delegation in the following terms:-
“5.... DELEGATION OF RULES - MANAGING DIRECTOR AND MANAGEMENT
......... Pursuant to Article 6 of the Articles, the Board delegates to each of the Managing Director, National Director Supervision and National Manager Membership the following power:
......... ARTICLE 57 - to call upon any Member or Member Organisation to produce without delay for inspection by the Delegate or his duly appointed representatives all books or copies thereof relating to the business of the Member or Member Organisation, to require Members and their partners, officers, employees, consultants or securities representatives to appear before the Delegate at any time, and to give such information as may be required in connection with the business of the Member to enable the Delegate to consider whether or not the Member continues to comply with admission requirements for the purposes of Article 38(5) and for other matters referred to in Article 57(2).”
By the same resolution it further authorised the Managing Director and the National Manager, Membership to sub-delegate that power.
The Managing Director, by instrument dated 29 July 1996, did in fact sub-delegate the same power, inter alia, to the Manager, Membership of the State “subject to the Manager obtaining prior written approval of the National Director Supervision or National Manager Membership”.
The wording of the delegation, as both set out in the Board resolution and reproduced in the instrument signed by the Managing Director, follows the terms of Article 57(1) of the Articles of Association of the ASX verbatim, save that the word “or” has been omitted where it first appears in the third to last line of it (Appeal Book 363B). I will return to this aspect in due course.
On 7 May 1997, in conformity with the sub-delegation instrument signed by the Managing Director, Kinsky specifically wrote to Francese conferring on him “approval ... to require representatives of Thompson Brindal Limited to appear and give you information under Article 57, in respect of your investigations concerning certain trading activities of TBL”.
On the same day Francese, who had already made some oral contact with TBL, addressed a letter to its Board. This requested certain specified representatives of that company to attend before him, on specified dates and at specified times, to provide information “pursuant to Article 57”. The appellant was one of the persons so specified. He was last on the list. It is to be noted that the letter was addressed to the Board of TBL, in effect requesting that the persons concerned, all of whom were officers or employees of the company, be made available for interview. So far as I can determine no separate request was ever directed to the appellant personally.
The letter of request indicated that the subject matter of the inquiry was “aspects of the business of Thompson Brindal Limited, including the trading activities of Mr Hamish McLachlan/Thompson Brindal Limited in respect of clients associated with Mr Ken Laming/Retireinvest in South Australia”.
On the following day Piper Alderman, solicitors for TBL, wrote to Francese seeking a deferment of the proposed interviews and particulars identifying the topics on which each “representative” of TBL would be questioned. As the learned Chief Justice pointed out, this letter, from time to time, referred to “representatives of our client”.
Francese replied immediately. Having intimated that the representatives of TBL to be interviewed were more than welcome to bring their legal representatives when they appeared, he responded to the request for particulars by saying that the purpose of the exercise was “to enable ... [the TBL] ... representatives to provide information to ASX in connection with the trading activities of Mr Hamish McLachlan/Thompson Brindal Limited in relation to clients associated with Mr Ken Laming/Retireinvest in South Australia”. He went on to say that ASX intended to inform itself as fully as possible in relation to those matters and that, when it formed a view on whether any action on the part of ASX may be required, TBL would be notified and afforded an opportunity of being heard.
In his letter Francese went on to say that:-
“At this stage, those topics which ASX has identified as being matters in relation to which it requires representatives of your client to provide information are as follows:
......... Thompson Brindal internal controls and procedures (including accounting procedures) in relation to trading activities
......... The trading activities of Thompson Brindal Limited on behalf of clients of Retireinvest/Mr Ken Laming
......... Trading by Thompson Brindal Limited in the shares of Uranium Australia Ltd
......... Ancillary matters including:
-The trading activities of Mr Hamish McLachlan
-The trading activities of Mr Bob Mennie.”
It must be borne in mind that this intimation was given against the background of the letter from Piper Alderman of 8 May 1997 in which, inter alia, it made the statement:-
“We can only assume from the terms of Article 57(1) and the lack of any statement in your letter that the attendance of the representatives of our client is required to enable the Board to consider whether or not our client continues to comply with the admission requirements of the Articles for the purposes of Article 35(5). ... ”

It goes on to refer, in some detail, to other provisions of the Articles touching on admission requirements.

This letter was written against the background of Article 57(1) expressed in the ASX constitution in the following terms:-
“The Board may call upon any Member or Member Organisation to produce, without delay, for inspection by themselves or their duly appointed representatives, all books or copies thereof relating to the business of the Member or Member Organisation, and may also require Members and their partners, officers, employees, consultants or securities representatives to appear before the Board or its delegates at any time, and to give such information as may be required in connection with such business or to enable the Board to consider whether or not the Member continues to comply with admission requirements for the purposes of Article 38(5).”
It is at once to be observed that this Article expressly contemplates the seeking of information of two quite separate types, namely:-

.information in connection with the business of a Member or Member Organisation or
.to enable the Board to consider whether or not the Member continues to comply with admission requirements for the purposes of Article 38(5).

This is by way of contrast with the two documented delegations which, somewhat inexplicably, omitted the word “or” in the third to last line.

The only possible inferences which can be drawn from the Piper Alderman letter of 8 May 1997 are either that they and their client were well aware of the missing word “or” in the instruments of delegation or, alternatively, they misread Article 57(1), so as to limit any power simply to the topic of compliance with admission requirements.
I do not accept the second possibility in relation to a highly experienced firm of solicitors with a specialty in commercial law. The Article plainly speaks for itself.
The significant feature for present purposes is that the Francese response rendered it obvious that he saw his delegation and assigned task as taking him far beyond the limited scope exercise postulated in the Piper Alderman letter - well into the realm of the wider field of inquiry contemplated by Article 57(1). Despite that situation neither the appellant nor Piper Alderman sought, at any relevant time, to press for the more limited scope exercise, or to object to Francese that he was exceeding his remit. Indeed, immediately prior to that time, Piper Alderman had cooperated with Francese in initiating a broad, independent accounting investigation along the lines being pursued by Francese. (See correspondence at Appeal Book pp 395 - 397.)
Whether or not the submission of Mr Rice, of counsel for the ASX, that the appellant and TBL waived any perceived excess of delegated power is correct in law, it seems to me that the above scenario gives rise to a situation in which, with knowledge of a possible argument as to scope of power, the appellant nevertheless voluntarily gave information to Francese on the wider basis. Having done so against the foregoing background, he cannot now be heard to complain of its use by the ASX. This is the more so as he attended at the instance of TBL as its “representative”; and not as a consequence of a summons direct to him.
Be that as it may, Francese later interviewed various persons, including the appellant. A solicitor for TBL was in attendance when the appellant was interviewed. He was not separately represented. This is scarcely surprising, as he was managing director of the company. At the outset of his interview Francese made it plain that the appellant was at liberty to consult with “your legal representative” during the interview.
On 12 September 1997 Francese sent copies of what was termed “a draft Inspection Report” to both the appellant personally and also to the Directors of TBL. They were told that access would be given to confidential annexures to the report, subject to appropriate undertakings. The appellant signed the requisite undertaking on 24 September 1997 and was thereupon given such access. Moreover, the covering letter specifically drew attention to a particular segment of the draft concerning issues which might lead to the taking of disciplinary action by the ASX.
The lastmentioned letter invited written comments and corrections of any errors of fact by 24 October 1997. The appellant has never responded to it.
On 19 September 1997 TBL’s solicitors sought an extension of time for comments, noting that “The conclusions raise serious allegations against our clients and its Member Directors. Natural justice dictates that our client has sufficient time to consider and comment on this draft report.”
Correspondence then ensued between the solicitors for TBL and solicitors for the ASX. A complaint was made by the former that the draft failed to differentiate between TBL and its directors “in terms of any breach of the Business Rules or Prohibited Conduct”. It was a feature of the correspondence which flowed over a considerable period of time that the solicitors for the ASX repeatedly invited Piper Alderman to make a specific application for an extension of time and the latter studiously ignored that invitation.
Following ongoing correspondence concerning a possible extension, the TBL solicitors wrote a letter dated 21 October 1997 to the solicitors for the ASX. They claimed that they could not deal with the draft report and other matters until they received a response to the following questions:-
“1.... For what purpose is the report produced;
2...... Upon what authority does your client produce such a report (draft or otherwise);
3...... What status does your client claim any final report may or will have;
4...... What is the status of the witness statements, that have been produced subsequent to the interviews referred to above. For what purpose were they produced and what future use or purpose, if any, is proposed for them.”
The solicitors for the ASX responded on 24 October 1997. Inter alia, they said:-
“The Report is being prepared by the Exchange Inspector for the purpose of determining whether or not your client and the Members named in the Report are complying with the provisions of the ASX Rules and Articles of Association or have conducted themselves in a manner considered to represent prohibited conduct. The Report is presently in draft form only as furnished to your client. The Report, once finalised, is a matter which ASX would take into account in considering whether to commence any disciplinary action against your client or the Members named in the Report, including consideration of whether or not to bring charges pursuant to Articles 51 or 52.”
This provoked something of a flurry of correspondence.
On 4 November 1997 the TBL solicitors, inter alia, commented to the effect that they presumed that, as none of the TBL directors or officers were cautioned regarding the danger of self-incrimination, the ASX was not proposing to use the records of interview in pursuance of any disciplinary charges which it might lay in the future.
By letter dated 14 November 1997 the solicitors for ASX reminded the solicitors for TBL that (despite earlier requests in that regard) a formal specific extension of time had not been requested, nor had any detailed objections to the draft report been forthcoming.
On 24 December 1997 the TBL solicitors claimed, by letter, that, until they had received the draft report, they had not realised either that Business Rule 1.4.2 was being relied upon, or that compliance with the Business Rules and Articles was in issue. It was contended that the individuals who were interviewed had not been told that their conduct was being investigated and that they had been entitled to separate representation. It was reiterated that appropriate cautions ought to have been given to the individuals concerned and were not. The letter concluded with the bland statement that a response to the draft report would be provided by 30 April 1998, ie over four months hence.
It is small wonder that, bearing in mind the apparent procrastination which had occurred, Francese obviously regarded this letter as yet another attempt to obstruct his task.
On 13 January the ASX solicitors responded to various points raised by the TBL solicitors, referring to the fact that TBL had already had the draft for some four months and not given any definitive response to it. They said that the report had, accordingly, been finalised and that a notice of charges was being sent to TBL. By a separate letter a copy of the completed final inspection report (“FIR”) and a notice of charges were sent to the appellant. At that point he, personally, had never responded to the original ASX letter of 12 September 1997.

The Issues

The appellant took as his commencement point that the actions of Francese and of the ASX were contrary to the Articles or the Business Rules, or were not authorised by them. Thus, it was said, they were void and ineffective.
As the learned Chief Justice pointed out, this is scarcely an accurate statement of the situation on any view. A more definitive statement would appear to be whether any breaches did occur and, if so, whether their nature and legal effect was such that, applying the principles applicable to the grant of injunctions, an injunction ought to be granted to prevent an exercise, by ASX, of any powers under the Articles consequential upon any relevant breach.

Discussion of sub issues

In his reasons for decision, the learned Chief Justice noted that there was no dispute that an Article 57 power was validly sub-delegated to Francese, given the written approval issued by Kinsky on 7 May 1997.
As I have already recited, the instruments of delegation and sub‑delegation in force at the time of the direction to Francese simply referred to Article 57 and reproduced the precise language of the Article, save that they omitted the word “or” in the third to last line after the phrase before the phrase “to enable”. This omission was rectified in later, re-issued versions of the instruments. Indeed, by resolution of the Board passed on 6 November 1997, it purported to make the relevant correction with effect from 1 March 1995 and resolved to “ratify and adopt all acts of the Managing Director or any sub‑delegate since 1 March 1997 in exercise or purported exercise of the powers conferred under” Article 57(1), Article 57(2) and Rule 1.4.2(2) to Rule 1.4.2(5) inclusive.
It was contended that the effect of the sub-delegation, as originally made, was that Francese’s power was specifically intended to be limited to seeking information to enable him to consider only whether or not TBL continued to comply with admission requirements; and did not extend to the question of whether TBL and others had been in breach of the Articles or the Rules. It was pointed out that Rule 1.4.2 did not confer any separate power to require a person to attend and give information. On the foregoing basis it was argued that the FIR and everything else which flowed from it were void.
The learned Chief Justice rejected that argument. He held that the obvious intention of the Board was to authorise sub-delegation in terms of Article 57 and the omission of the word “or” was simply no more than an unintended clerical slip. In that regard he arrived at the same conclusion as had been expressed by Bryson J in Shaw Stockbroking Ltd v Australian Stock Exchange & Anor (1998) 16 ACLC 827 at 839 concerning precisely the same situation.
In the course of his reasons in that case, Bryson J at 835 - 836 reasoned thus:-
“... Even reading the paragraphs in isolation there is room for the reader to doubt whether the references to the information which may be required should not be disjoined by commas or by implying ‘and’ or ‘or’. When these passages are read with a view to the context in the Delegation Document and in the Sub-delegation document and with a view to the terms of Article 57 powers under which are intended to be delegated it becomes clear, in my opinion, that there have been accidental omissions of the word ‘or’ and that the passages should be read as if it had not been omitted. In my opinion this conclusion is dictated merely by referring to Article 57, but it is reinforced by considering whether there could be any reason for the Delegation and Sub-delegation to be limited to narrow parts of the subjects to which a proceeding under Article 57 could relate, and also whether it is likely that the Board and the Managing Director chose to limit them narrowly and also chose to do so by picking up words that appear in Article 57 and using them in a different sense in which the later qualifying the earlier with an altogether different result to that produced by the same words in Article 57. It is very unlikely that delegation to the Managing Director and sub-delegation to the National Director, Supervision and the National Manager Membership, who are also mentioned in Sched.4, would be intended to be narrowly confined. It is very difficult to see what purpose would be served by such a limitation. On the other hand it is likely that the intended purpose was complete delegation, and there is no indication of any other purpose in the provisions dealing with powers under Article 57.”

With respect, that states the plain common sense of the matter. Furthermore, as was recognised by the learned Chief Justice, even leaving to one side the question of the purported retrospective amendment of the forms of delegation and ratification of prior actions taken, those actions provide the clearest possible evidence of what had always been the intention of the Board.

It cannot be stressed too strongly that what we are here concerned with is not some statutory, inquisitorial process in the criminal jurisdiction, supported by threats of penal sanctions of a criminal nature. The process embarked on by Francese stemmed from asserted contractual arrangements between the parties. The appellant attended with counsel for TBL, who seems also to have acted in the interests of the individual officers of it by reason of their mode of participation in the proceedings, including the taking of objections.
If it had been asserted that there was a want of power to conduct the proceedings in the manner and according to the scope adopted, then it was open to the appellant to pursue an appropriate objection, particularly in view of what had already been said in the Piper Alderman letter concerning the scope of the inquiry. He did not do so, but voluntarily answered the various questions put to him. Save for a need to observe the principles of natural justice as to any proposed use of those responses I can see no reason in law why they may not be resorted to by Francese and/or the ASX for any relevant purpose.
This, as it seems to me, was the conclusion arrived at by the learned Chief Justice.
Quite apart from the aspects already discussed, there is yet another basis upon which the appellant’s present contention must be rejected.
Article 18 stipulates that:-
“All acts done by any meeting of the Board or any Committee or by any person acting as a director or as a member of any Committee or as a delegate of the Board are, notwithstanding any defect in the constitution, proceedings or appointment of the Board or any Committee or of any member or observer of either or any such person’s disqualification or any failure to comply with any direction or delegation of the Board, as valid as if there were no such defect, disqualification or failure.”
In the course of his reasons in Shaw Stockbroking Ltd v Australian Stock Exchange & Anor (supra) Bryson J expressed the view that, if, contrary to his conclusion, the instruments of delegation had to be read down to the restricted ambit now contended for by the appellant, the conduct of the relevant ASX officer in requiring information on a wider range of subjects than was delegated was a failure to comply with the delegations, which was cured by Article 18.
Once it be accepted, as is undoubtedly the case, that Francese, at all times, bona fide believed that his delegation authorised him to proceed as he did, then I consider that the reasoning of Bryson J is apposite to the present case. Article 18 regularised the process embarked on by him, if it was in any way defective.
This is yet another conclusive answer against the primary proposition advanced on behalf of the appellant.
Reliance was further placed by the appellant on an argument to the effect that, according to its proper construction, Article 6(2) had the effect that, because the Article 57 power was not delegated exclusively to the Managing Director of the ASX, the power sought to be sub-delegated to Francese could only be exercised by specific Board resolution in the particular case.
That sub Article reads as under:-
“(2).. A power of the Board unless it has been conferred exclusively under Article 6(1) or delegated exclusively under Article 6(3), is exercisable only:
(a)     by resolution at a meeting of the Board at which a
        quorum is present; or
(b)     by a resolution of the directors under Article 17.”

Although, as the learned Chief Justice pointed out, the provision is somewhat curiously worded, the obvious intention of it appears to me to be plain. I agree with him that the Article, inter alia, confirms that, absent a specific, exclusive delegation of power by the Board, it remains entitled, itself, to still exercise the relevant power, notwithstanding any delegation of it.
However, with respect to the learned Chief Justice, I do not consider that that is its primary purpose. It seems to me that its presence is intended to render it clear that the Board may not delegate a relevant power to a subcommittee of itself, which could be less than a quorum of the whole. The clear aim of the sub Article is to ensure that, if a relevant power is to be exercised at the Board level, then the Board must deal with it as a Board, subject to the normal quorum provisions, or by resort to the Article 17 procedure.
Article 6(2) does not operate in the manner contended for by the appellant, which, for all practical purposes, would constitute a negation of any general non-exclusive delegations.
Relevantly Rule 1.4.2 of the ASX Business Rules provides as follows:-
“(1).. The Exchange shall appoint as exchange inspectors one or more persons who shall be suitably qualified for such appointment.
(2).... The Exchange may at any time direct any one or more of the exchange inspectors to determine whether or not a Broker selected by the Exchange is complying with the provisions of the Rules and Articles or has conducted itself in a manner considered to represent Prohibited Conduct. Any such Broker shall make available or cause to be made available to the exchange inspector any account and other records of, or relating to that Broker, which are within the power of the Broker to provide and which are relevant to the enquiry and are required by the inspector.
(3).... For the purposes of complying with a director given by the Exchange under Rule 1.4.2(2), the exchange inspector shall have such access as authorised by the Exchange to accounts and other records relating to the Broker or Brokers or the business of the Broker or Brokers or any associate of the Broker or Brokers or of a Settlement Agent of the Participating Broker, as are within the power of the Broker or Brokers to provide, including all accounts and other records held by the Exchange on behalf of the Broker, by the Broker or any associate of the Broker, by the auditors of the Broker, by the bankers of the Broker, by a Settlement Agent of the Participating Broker or by the Exchange Examining Accountant.”

It is to be noted that this Rule specifically refers to a "Broker". TBL is a "Broker", whereas the appellant, its managing director, is not.
It is contended that, on the express working of the Rule provisions, any exercise of Rule 1.4.2 powers could not support the making of an inquiry and report of the existence of evidence of breaches of the Rules and Articles, or of Prohibited Conduct, on the part of an officer of a Broker, such as the appellant.
As the learned Chief Justice pointed out, the short answer to that submission lies in the fact that Francese did not rest on that Rule. His inquiry derived from the powers conferred by Article 57. Such powers are wide ranging in nature and there is nothing in the Articles or the Rules which would deny the use of any factual information procured in exercise of them to found charges of breaches of the Articles or the Rules.
Equally, as he recognised, there is simply no reason to conclude that any information as to the inappropriate conduct of a member garnered in the course of a Rule 1.4.2 inquiry must be excluded from a Report based on such an exercise. On the contrary, Rule 1.4.2 (5A) expressly contemplates the possibility of disciplinary action against a member arising out of a Rule 1.4.2 report. Moreover, as Mr Rice pointed out, the concept of "Prohibited Conduct", adverted to in Rule 1.4.2(4), which is required to be reported on, has no reference to a Broker as such. The definition of such term in the Articles is specifically pitched at Members of the ASX.
In either situation the sole limitation is clearly that the rules of natural justice should be adhered to, so that any Member who is potentially the subject of an adverse report ought to be given notice of that fact and afforded a reasonable opportunity to present submissions as to the relevant subject matter. That opportunity was provided in the instant case and the appellant failed to avail himself of it.
In my opinion the conclusion of the learned Chief Justice on this score was patently correct.
Moreover, as he said, there can be no question of unfairness in all of the circumstances. Francese's correspondence in May 1987 made it crystal clear that the thrust of his inquiries would be as to the trading activities of Mr Hamish McLachlan and TBL in relation to clients associated with Mr Ken Laming/Retireinvest in South Australia. Such an inquiry obviously necessitated a review of the conduct of all relevant officers of TBL in relation to the transactions in question, as the appellant must have appreciated at the time. It would have been naive in the extreme to think otherwise.

The issue of procedural fairness

Before the learned Chief Justice the appellant asserted that the core and real purpose of the Francese interview with him was, in reality, to investigate his personal conduct and that this purpose was not made known to him.
The learned Chief Justice rejected that premise as false. He said that there was no reason to think that the primary purpose of the investigation was other than the broader topic of the dealings between TBL and Retireinvest - given that, as a matter of common sense, Francese would have been alert to possible misconduct by any of the various individuals interviewed, as an ancillary aspect of his primary exercise. After all TBL, as a corporate entity, could only have acted through its officers and employees.
It was no more than a counsel of plain common sense that, to employ the words of the learned Chief Justice, as a member of the ASX and as managing director of TBL, the appellant could not have been in any doubt that his own conduct would come under scrutiny. It was quite unrealistic to believe that his part (if any) in the relevant transactions would not be in issue. The invitation by Francese for persons interviewed to attend with their legal representatives, if desired, strongly reinforces such a conclusion.
Like the learned Chief Justice I find it significant that the appellant has never claimed ignorance of the Francese correspondence and has also never claimed any specific prejudice by reason of the course of events which I have outlined. Any present assertion that the appellant lost the opportunity to prepare properly for his interview rings very hollow. It is also significant that, despite a flurry of solicitors' correspondence after receipt of the draft report (much of which appears to me to have been little more than a delaying tactic), no detailed representations related to the appellant and his interview responses were ever made over what was a very lengthy period of time.
This was so despite the fact that the draft FIR made a number of specific references to the appellant, who must have been left under no illusion that he was at risk of disciplinary action against him, unless he was able to refute or explain away the factual findings based on his own statements and the evidence generally. There was never any complaint by him that he did not appreciate his potential situation, or that he was unclear as to what was being asserted against him. He simply made no response. The solicitors' correspondence was confined solely to technical issues and was generated by the solicitors for TBL, rather than the appellant.
It is trite to say that the requirements of natural justice vary according to the circumstances (National Companies and Securities Commission v The News Corporation Limited and Others (1984) 156 CLR 296). As in that case it must be remembered that this was a process of the nature of a preliminary investigation only, and not an adjudicative procedure. That case stands as authority for the proposition that, in any event, where a purely inquisitorial and non adjudicatory process is in contemplation, the ASX officer is obliged to do no more than permit proper legal representation and to provide a transcript of any evidence given.
Be that as it may, I can do no better than adopt the final summation of the learned Chief Justice on this aspect when he said:-
"... In the present case I am satisfied that the plaintiff knew the subject matter under enquiry; knew that his own conduct would be scrutinised; knew that disciplinary charges against him were a possibility; had the opportunity to get his own legal advice and legal representation; had an adequate opportunity to comment on the draft report before the FIR was prepared, and will still have an opportunity to answer the charges against him. In my opinion procedural fairness was accorded to the plaintiff."

Contractual compliance

There is only one other specific issue which requires some comment.
During the appeal Mr Wilkinson sought strongly to rely on the principle applied in cases such as Lee v The Showmen's Guild of Great Britain [1952] 2 QB 329. It was his fundamental proposition that, where a process was founded in contract, any failure, strictly, to adhere to stipulated prerequisite requirements necessarily tendered the whole process void. Of course, his argument necessarily begs the question as to whether there was, in fact, any non compliance with the Articles and/or Business Rules of ASX, or any excess of power said to derive from them.
I have already expressed my views with regard to the last mentioned aspect. However, for the sake of completeness I would merely comment that, in my opinion, the argument advanced misses the point in this case.
In essence, the authorities relied on by Mr Wilkinson are the familiar expulsion type cases, in which it has long been held that strict compliance with contractual prerequisites is required when what is in prospect is a procedure which imperils the property rights, or rights to earn a livelihood, of a person. A failure in that regard will render the process void. Equally, a fundamental failure to accord natural justice in relation to a contractual procedure will also render the process void. (Macksville & District Hospital v Mayze (1987) 10 NSWLR 708.)
But it does not follow that all failures to comply with contractual requirements will render a process totally void ab initio in all situations. Here there is no doubt that, at the very least, Francese lawfully and properly embarked on a valid article 57 enquiry. The sole question was whether, in the course of so doing, he went beyond his mandate in relation to the scope of questions asked. If it be accepted that he did, then this occurred against the background which I have already traversed. Piper Alderman, presumably with the appellant's knowledge, had raised the scope of the inquiry at the outset, Francese had made his position clear, no further objection was raised, and the appellant readily answered all questions put to him. No real question of the doctrine of ultra vires, in the true sense, here arose.
As the learned Chief Justice so clearly appreciated, at the end of the day, it is necessary to avoid becoming lost in a sea of interesting, but largely sterile, legal arguments. The core issue is whether, in all of the circumstances, the charges against the appellant should be allowed to proceed to a hearing on the basis that the information gathered by Francese can be used as evidence to support those charges.
The short answer is that there is no reason to deny such a process. Despite Mr Wilkinson's declamations to the contrary, there was no impropriety or unfairness in the gathering of the relevant material. The appellant only has himself to blame for failing to supply input in relation to the draft FIR when he had ample opportunity of doing so. He currently has full knowledge of what is being asserted against him and full opportunity of meeting those assertions before the National Adjudicatory Tribunal. There was no want of legality in the processes adopted by Francese.

Conclusion

In the foregoing circumstances I am not persuaded that there is any basis upon which this court can or should intervene. The ultimate conclusion come to by the learned Chief Justice was unexceptional.
I would dismiss the appeal.
LANDER J. I agree that the appeal should be dismissed.
BLEBY J. I agree that the appeal should be dismissed and I am in substantial agreement with the reasons given by Olsson J.

[1998] SASC 6925

11 November 1998