R v Kaine
[2000] TASSC 131
•18 September 2000
[2000] TASSC 131
CITATION: R v Kaine [2000] TASSC 131
PARTIES: R
v
KAINE, Leon Gregory
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 30/2000
DELIVERED ON: 18 September 2000
DELIVERED AT: Burnie
HEARING DATES: 18 September 2000
RULING OF: Slicer J
[Edited Reasons for Ruling delivered orally]
CATCHWORDS:
Constitutional Law - States - Prosecution by Commonwealth Director of Public Prosecutions of offence arising under law pursuant to national scheme for corporate regulation - Prosecution arising from examination of company director conducted in accordance with Commonwealth statute - Power incidental to primary grant.
Australian Securities and Investments Commission Act 1989 (Cth), ss5, 64.
R v Hughes (2000) 171 ALR 155, applied.
Aust Dig Constitutional Law [142]
REPRESENTATION:
Counsel:
Crown: I M Arendt
Accused: G A Richardson
Solicitors:
Crown: Commonwealth Director of Public Prosecutions
Accused: G A Richardson
Judgment Number: [2000] TASSC 131
Number of Paragraphs: 13
Serial No 131/2000
File No 30/2000
THE QUEEN v LEON GREGORY KAINE
REASONS FOR RULING DURING TRIAL SLICER J
18 SEPTEMBER 2000
Leon Gregory Kaine, pursuant to the Criminal Code, s353, has moved to quash the indictment prepared against him by an officer of the Commonwealth Director of Public Prosecutions on the ground that the indictment is formally defective in that the Court has no jurisdiction to determine the prosecution.
The indictment alleges the commission of offences against the Australian Securities and Investments Commission Act 1989 ("the Act"), s64. The Statement of Crime and Particulars for count 1 reads:
"1 STATEMENT OF CRIME
Making a false or misleading statement contrary to Section 64(1)(b) of the Australian Securities Commission Act [sic]
PARTICULARS
That on the 9th day of February 1995 at Burnie in Tasmania Leon Gregory Kaine did in the course of an examination make a statement, namely in answer to question ' … do you deny that any of the writing on the deposit slip is yours?' he said 'Privilege. Yes, I do,' which statement was false or misleading in a material particular",
while the remaining counts are in similar terms.
The argument advanced by counsel is that the Commonwealth has no power to have its legislation apply to an officer or employee of a corporation incorporated in the State of Tasmania and, accordingly, cannot empower or authorise its federal officer to commence a prosecution for a breach of its law.
For the purposes of the resolution of the motion to quash, the parties have agreed the following:
1That North West Computers and Software Pty Ltd was a trading corporation incorporated in the state of Tasmania at all relevant times.
2 That the accused was a director and employee of that corporation.
3That on 20 December 1994 a document identified as an exhibit was forwarded by facsimile transmission to Epsco Computer Pty Ltd.
4 That the facsimile transmission was a telecommunications service.
5That the documents as exhibits namely, bank statements, form a part of the business records of Epsco Pty Ltd.
6That a photocopy of the identified document was shown to the accused during an ASC examination into the affairs of North West Computers Pty Ltd. Such examination being conducted on 9 February 1995 and that the accused made answers in relation to that document during the course of examination.
The Act, s64, states:
"False information
(1) A person shall not:
(a) in purported compliance with a requirement made under this Part; or
(b) in the course of an examination of the person;
give information, or make a statement, that is false or misleading in a material particular.
Penalty: 100 penalty units or imprisonment for 2 years, or both.
(2)A person shall not, at a hearing, give evidence that is false or misleading in a material particular.
Penalty: 10 penalty units or imprisonment for 3 months, or both.
(3) It is a defence to a prosecution for a contravention of subsection (1) or (2) if it is proved that the defendant, when giving the information or evidence or making the statement, believed on reasonable grounds that it was true and not misleading."
The creation of the offence arises as an auxiliary consequence of the power to conduct an examination as permitted by the Act, s19, which relevantly provides:
"(1)This section applies where the Commission, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1.
(2)The Commission may, by written notice in the prescribed form given to the person, require the person:
(a)to give to the Commission all reasonable assistance in connection with the investigation; and
(b)to appear before a specified member or staff member for examination on oath and to answer questions.
(3) A notice given under subsection (2) shall:
(a) state the general nature of the matter referred to in subsection (1); and
(b) set out the effect of subsection 23(1) and section 68",
whilst an examination is defined by s5 in the following terms:
"'examination' means:
(a)in this section, and Part 3 (other than subsection 27(2) and Division 9)—an examination of a person pursuant to a requirement made under section 19; or
(b)in subsection 27(2) and Division 9 of Part 3—an examination of a person pursuant to a requirement made under section 19 or a corresponding provision of the ASC Law of another jurisdiction."
The question arises from the decision of the High Court in R v Hughes (2000) 171 ALR 155, which concerned the power of the Commonwealth Director of Public Prosecutions to prosecute for a breach of the Corporations (Western Australia) Act 1990 WA. In essence, the High Court stated the law in the following terms:
1A parliament of a state is entitled to give power and authority to the Commonwealth in relation to a subject matter within its province.
2Within certain constitutional limits the Commonwealth may accept the grant of power provided that in doing so it does not breach a term of the Constitution.
3The grant and acceptance of power must relate to a subject matter upon which the Commonwealth is entitled to legislate in its own right.
The State of Tasmania has, by virtue of its Corporations (Tasmania) Act 1990, s29, transferred power in relation to corporations. The section provides:
"29 (1) The Commonwealth laws apply as laws of Tasmania in relation to an offence against the applicable provisions of Tasmania as if those provisions were laws of the Commonwealth and were not laws of Tasmania.
(2) For the purposes of a law of Tasmania, an offence against the applicable provisions of Tasmania -
(a) is taken to be an offence against the laws of the Commonwealth, in the same way as if those provisions were laws of the Commonwealth; and
(b) is taken not to be an offence against the laws of Tasmania.
(3) Subsection (2) has effect for the purposes of a law of Tasmania except as prescribed by regulations under section 80."
The Commonwealth has legislated to adopt such transferred power by means of its Corporations Act 1989 through one of its Ministers (s46) or prescribed authorities or officers (s47) and has by regulation designated the Commonwealth Director of Public Prosecutions as one of such officers (Corporations (Commonwealth Authorities and Officers) Regulations, reg3).
The Commonwealth relies, as a head of power, on the Constitution, s51(xx), which provides for specific legislative power in respect of:
" … financial corporations formed within the limits of the Commonwealth: … "
The extent of that power has been considered by the High Court in the case of The Commonwealth of Australia and Another v The State of Tasmania and Others (1984 - 1985) 158 CLR 1 and it is not necessary for the purposes of this motion to consider the question of extent of power in any detail. It is sufficient to state that the court preferred a liberal interpretation of the provision so as to enhance the power of the Commonwealth afforded by the Constitution, s51(xx). That power permits legislation which is incidental to the primary head of power (Australian Coastal Shipping Commission v O'Reilly (1961 - 1962) 107 CLR 46). In this case, Mr Kaine was at the relevant times an officer of a corporation which was engaged in trading. The offence alleged is said to have arisen as a consequence of a dealing by the Corporation with a third party. The examination was in relation to that dealing by the Corporation. The nexus between the grant of power and the institution of a regulatory regime is as stated by McHugh J in Re Dingjan and Ors; ex parte Wagner and Anor (1995) 183 CLR 323 at 369 - 370, when he said:
"Where a law purports to be 'with respect to' a s51(xx) corporation, it is difficult to see how it can have any connection with such a corporation unless, in its legal or practical operation, it has significance for the corporation. That means that it must have some significance for the activities, functions, relationships or business of the corporation. If a law regulates the activities, functions, relationships or business of a s51(xx) corporation, no more is needed to bring the law within s51(xx)(119). That is because the law, by regulating the activities, etc, is regulating the conduct of the corporation or those who deal with it. Further, if, by reference to the activities or functions of s51(xx) corporations, a law regulates the conduct of those who control, work for, or hold shares or office in those corporations, it is unlikely that any further fact will be needed to bring the law within the reach of s51(xx)."
That statement of principle was accepted by Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ in their joint judgment in The State of Victoria v The Commonwealth of Australia (1995 - 1996) 187 CLR 416. If, as the High Court accepted in Hughes, the Commonwealth is entitled to accept responsibility for the operation of and prosecution for laws affecting trading corporations generally, it follows that it can validly provide for laws incidental to that general power. The conduct of an examination is a necessary adjunct to the supervision of activities of corporations and the provision of a sanction by means of the Act, s64, is a necessary incident to the proper conduct of examination conducted in accordance with the Act, Pt3, Div2.
It may also be the case that since the Commonwealth has power to legislate for its own territories and does so enact legislation, a state might cede or transfer power to accord with such legislation. However, it is not necessary to decide that possibility given the reasoning of the High Court in Hughes. That reasoning permits the conclusion that there is sufficient nexus between a requirement to make honest answer to an examination and the general grant of power afforded by the State of Tasmania.
For the purposes of this ruling there is no necessity to determine whether or not the Commonwealth has power by virtue of postal or telegraphic powers and/or incidental power afforded by the Constitution, ss51(v), (xxxix).
The motion to quash the Indictment is dismissed.
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