Schomburgk v Poker No. Dcaat-97-92 Judgment No. D3795

[1998] SADC 3990

David Colin Schomburgk v Johannes Gerhardus Poker

D3795

Administrative Appeals Jurisdiction

His Honour Judge Sulan

This is an application brought by the National Crime Authority (“the Authority”) seeking to set aside a subpoena issued by the District Court requiring production of certain documents.  I shall deal with the specific documents sought later in the judgment. 

The circumstances leading to the issue of the subpoena were that on the 16th May, 1997, David Colin Schomburgk (“the complainant”), an officer of the office of Consumer and Business Affairs, issued a summons alleging that there is proper cause for disciplinary action against Johannes Gerhardus Poker (“the defendant”).  It is alleged that between November 1992 and December 1996 the defendant acted contrary to the Second Hand Vehicle Dealers Act, 1995, (S.A.), (“the Act”), in the course of conducting the business of a dealer. 

The Act regulates dealing in second hand motor vehicles.  Part 2 of the Act deals with the granting of licences.  Section 7 of the Act provides :

“A person must not carry on the business or hold himself or herself out as a dealer unless licensed under this Act.
Penalty       Division 5 fine.”

The Acts Interpretation Act, 1915, as amended, deals with fines and penalties. A division 5 fine is a fine not exceeding $8,000 (section 28A). Section 29 provides that when a fine or penalty is imposed under any Act, the Act will be taken to provide that the fine or penalty, when recovered, must be paid to the Treasurer of the State and form part of General Revenue. By virtue of section 30(2) penalty includes punishment. Hence contravention of a section or subsection that has the word “penalty” at the foot creates an offence punishable on conviction by a penalty not exceeding the penalty so set out.

It follows that a breach of section 7 of the Act is an offence punishable on conviction by a fine of up to $8,000.

The Act also provides for penalties in respect of breaches of various sections including those relating to registration of business premises, the displaying of various notices, the form of contract to be used and various notices required to be provided to purchasers.  Provisions relating to auctions, require notices to be displayed giving detailed information about the vehicles to be offered for sale.  Failure to comply with the provisions is dealt with by way of penalty.  In other words, it is an offence to fail to comply and the failure to do so may result in a fine. 

Part 5 of the Act deals with discipline.  Section 26 defines “dealer” to mean :

“(a)... a dealer or former dealer required to be licensed under this Act or a corresponding previous enactment (whether or not currently or previously licensed); or

(b).... a licensee (whether or not carrying on business as a dealer)”

.................. Section 3 states a dealer is a person who carries on the business of selling second hand vehicles. 

I set out below other relevant provisions of the Act :

“Section 27 :

(1)There is proper cause for disciplinary action against a dealer if -

(a)     ….

(b)    ….

(c)     the dealer or another person has acted contrary to this Act or otherwise unlawfully, or improperly, negligently or unfairly, in the course of conducting, or being employed or otherwise engaged in, the business of the dealer; or

(d)    ….

(e)     ….

(f)     ….

(g)     ….

(h)     ….”

“Section 31 :

(1)     On the hearing of a complaint, the District Court may, if it is satisfied on the balance of probabilities that there is proper cause for taking disciplinary action against the person to whom the complaint relates, by an order or orders do one or more of the following :

(a)     reprimand the person;

(b)    impose a fine not exceeding $8 000 on the person;

(c)     in the case of a person who is licensed as a dealer-

(i) .... suspend the licence for a specified period or until the fulfilment of stipulated conditions or until further order; or

(ii) cancel the licence; or

(iii) suspend the registration of premises registered in the name of the dealer until the fulfilment of stipulated conditions or until further order; or

(iv) cancel the registration of premises registered in the name of the dealer;

(d)    impose conditions as to the conduct of the person or the person’s business as a dealer;

(a)     disqualify the person from being licensed under this Act;

(b)    prohibit the person from being employed or otherwise engaged in the business of a dealer;

(c)     prohibit the person from being a director or having an interest in a body corporate that is a dealer.”

“Section 31(3) :

(3)     If-

(a)     a person has been found guilty of an offence; and

(b)     the circumstances of the offence form, in whole or in part, the subject matter of the complaint,

the person is not liable to a fine under this section in respect of conduct giving rise to the offence.”

Therefore, if a complaint is lodged pursuant to Part 5 and the defendant has already been convicted of an offence under section 7, then that person cannot be liable to be fined again under section 31.  Section 49(1) of the Act provides that proceedings for an offence against this Act must be commenced within two years after the date on which the offence is alleged to have been committed or, with the authorisation of the Minister, at a later time within five years after that date.  Section 49(2) provides that a prosecution for an offence against the Act cannot be commenced except by the Commissioner, an authorised officer or a person who has the consent of the Minister to commence the prosecution.

Section 28 permits the Commissioner or any other person to lodge a complaint with the District Court setting out matters that constitute grounds for disciplinary action under Part 5.

Section 31 provides that the standard of proof of allegations under Part 5 is on the balance of probability. 

The Act therefore draws a clear distinction between the disciplinary provisions and prosecutions for offences under the Act. 

It is accepted that the bringing of the complaint by the Commissioner against the defendant in this case resulted from investigations conducted by the Authority and South Australian police officers pursuant to a joint operation conducted under the National Crime Authority Act, 1984, (Cth), as amended, (“the NCA Act”). By virtue of section 11(1)(b) of the NCA Act the general functions of the Authority include the investigation of matters relating to relevant criminal activities. Relevant criminal activities is defined in section 4 of the NCA Act.

Section 11(2) states that the special functions of the Authority are to investigate both Commonwealth and State offences where a reference has been given to the Authority by the Commonwealth Minister or a State Minister. 

Section 12 of the NCA Act provides :

“12.(1) Where, in carrying out an investigation under paragraph 11(1)(b) or subsection 11(2), the Authority obtains evidence of an offence against a law of the Commonwealth or of a State or Territory, being evidence that would be admissible in a prosecution for the offence, the Authority must assemble the evidence and give it to:

(a)     the Attorney-General of the Commonwealth or the State, as the case requires; or

(b)    the relevant law enforcement agency; or

(c)     any person or authority (other than a law enforcement agency) who is authorised by or under a law of the Commonwealth or of the State or Territory to prosecute the offence.”

Section 22 of the NCA Act deals with the issuing of search warrants and section 22(10) provides that the right of a person to apply for, or the power of a person to issue, a warrant, being a right or power existing otherwise than by virtue of the section is not affected by this section.  The effect of that provision is that where there is a joint investigation involving State police officers, they may exercise their powers under a warrant issued otherwise than under the NCA Act. 

Section 67 of the Summary Offences Act, 1953, (S.A.), as amended, provides that notwithstanding any law or custom to the contrary, the Commissioner of Police may issue general search warrants to such members of the police force as the Commissioner thinks fit.

It is agreed that the proceedings against the defendant herein resulted from a joint operation being conducted by the NCA and the South Australian Police Department.  During the course of that investigation, South Australian police officers, exercising their powers pursuant to a general search warrant, entered and searched the premises of the defendant.  In the course of that search documentation was seized.  Pursuant to section 12 of the NCA Act, evidence was provided to the Commissioner for Consumer Affairs consequent upon which the proceedings were issued in the District Court.

As a result of an application by the defendant on the 1st December, 1997, a subpoena was issued and subsequently served on the Regional Director of the Authority seeking the following documents :

1. .... Copies of any search warrant purportedly used by police to authorise the search of the Defendant’s premises at 4 Ellis Street, Morphetville on 12.03.96;

2. .... Any internal memoranda or documentation purportedly authorising the seizure of the documents seized from my client’s premises;

3. .... Copies of any correspondence passing between the complainant herein and police officers who seized the documents from the Defendant’s home;

4. .... A list of names of police officers assigned to attend and search the Defendant’s home; and

5. .... A copy of any document or reference authorising police to investigate the Defendant pursuant to the National Crime Authority Act.

............. The subpoena was issued pursuant to section 25 of the District Court Act, 1991 :

“(1)... The Court may, on the application of a party to proceedings or on its own initiative, issue a summons requiring a person to appear before the Court at a specified time and place to give evidence or to produce evidentiary material (or both).”

Evidentiary material is defined in section 3 as :

“any document, object or substance of evidentiary value in proceedings before the Court, and includes any document, object or substance that should, in the opinion of the Court, be produced for the purpose of enabling the Court to determine whether or not it has evidentiary value.”

The Authority has now sought to have the subpoena set aside.

There are two grounds upon which Mr Bonnici, on behalf of the Authority, relies.  First, he submitted that section 51 of the NCA Act applies, and therefore the Authority cannot be compelled to produce the documents sought.  Secondly, he has submitted that the subpoena should be set aside because the subpoena is “fishing”. 

During the course of argument, I was informed that the documents sought in paragraph 1 of the subpoena are not in the possession of the Authority.  In respect of the documents sought in paragraph 3, that being any correspondence passing between the complainant and police officers who seized the documents from the defendant’s home, it is accepted that any such correspondence would not be in the possession of the Authority and the application was not pressed.  I am also informed that details of the names of police officers assigned to attend and search the defendant’s home have or will be provided, and therefore the documents sought in paragraph 4 of the subpoena are no longer sought.

That leaves paragraphs 2 and 5.  Paragraph 2 seeks any internal memoranda or documents purportedly authorising the seizure of the documents seized from the defendant’s premises, and paragraph 5 seeks a copy of any document or reference authorising police to investigate the defendant pursuant to the NCA Act.

The primary argument put on behalf of the Authority was that section 51(3) of the NCA Act creates a statutory immunity against production of documents by the Authority or any of its officers and the subpoena and documents sought, do not fall within the exceptions to that statutory immunity provided in the NCA Act.

Section 51 of the NCA Act provides :

“51.(1)This section applies to:

(a)     a member of the Authority; and

(b)    a member of the staff of the Authority.

(2)     A person to whom this section applies who, either directly or indirectly, except for the purposes of this Act or otherwise in connection with the performance of his duties under this Act, and either while he is or after he ceases to be a person to whom this section applies:

(a)     makes a record of any information; or

(b)    divulges or communicates to any person any information;

being information acquired by him by reason of, or in the course of, the performance of his duties under this Act, is guilty of an offence punishable on summary conviction by a fine not exceeding $5,000 or imprisonment for a period not exceeding 1 year, or both.

(3)     A person to whom this section applies shall not be required to produce in any Court any document that has come into his custody or control in the course of, or by reason of, the performance of his duties under this Act, or to divulge or communicate to a Court a matter or thing that has come to his notice in the performance of his duties under this Act, except where the Authority, or a member or acting member in his official capacity, is a party to the relevant proceeding or it is necessary to do so:

(a)     for the purposes of a carrying into effect the provisions of this Act; or

(b)    for the purposes of a prosecution instituted as a result of an investigation carried out by the Authority in the performance of its functions.

(4)     In this section:

“court” includes any tribunal, authority or person having power to require the production of documents or the answering of questions;

“member of the staff of the Authority” means:

(a)     a person referred to in the definition of “member of the staff of the Authority” in subsection 4(1); or

(b)    a person who assists, or performs services for or on behalf of, a legal practitioner appointed under section 50 in the performance of the legal practitioner’s duties as counsel to the Authority;

“produce” includes permit access to, and “production” has a corresponding meaning.”

The Authority is not a party nor is any member or acting member in their official capacity, a party to the proceedings by the complainant.  The question therefore arises whether production of the document is necessary for the purpose of carrying into effect the provisions of the NCA Act, or for the purposes of the prosecution instituted as a result of an investigation carried out by the Authority in the performance of its functions. 

In Gould v Nam-Yung (1989) 46 A Crim R 1, the Federal Court considered section 51(3) of the NCA Act. The matter came to the Federal Court seeking a review of a magistrate’s decision ordering the Authority to produce documents in a criminal prosecution. The magistrate had determined that the documents sought fell within paragraph (b) of subsection 51(3). Foster J was particularly concerned with the construction of section 51(3) and in particular the word “necessary” in that subsection. It had been conceded that the proceedings were instituted as a result of an investigation carried out by the Authority. Foster J said :

“. . .  there should be no restrictive definition of the word ‘necessary’ where used in this legislation.  It was quite open, in my view, to the learned Magistrate to accept, as he clearly appears to have done, the production of the documents was ‘necessary’ if they appeared sufficiently relevant to the issues raised or to be raised in the proceedings before him.” 

It had been submitted that “necessary” should be construed as meaning “indispensable” or “that cannot be done without”.

Foster J rejected a narrow construction of the section and concluded that “necessary” should not be narrowly defined and should be construed as meaning sufficiently relevant to the issues raised or to be raised in the proceedings. 

Mr Bonnici submitted that although the proceedings in this case may well have been instituted as a result of an investigation by the Authority, the proceedings are not a prosecution.  He argued that there is a clear distinction in the Act between prosecutions and disciplinary proceedings, and because disciplinary proceedings have been instituted, the proceedings are not a prosecution.  Therefore, he said the exception to the statutory immunity does not apply. 

The purpose of section 51 of the NCA Act is to ensure that the Authority, or any member of the staff of the Authority is bound not to divulge or communicate information obtained by that person in the performance or carrying out of his or her duties, under the NCA Act.  That general prohibition extends to the production of documents pursuant to a subpoena, duces tecum, where that document has come into the possession of the Authority in the performance of an officer’s duty under the NCA Act.  An exception to the prohibition exists where a Court requires production during proceedings involving the Authority or one of its members as a party, or alternatively it is necessary to produce the document for the purpose of carrying into effect the provisions of the NCA Act, or for the purposes of a prosecution instituted as a result of an investigation carried out by the Authority in the performance of its functions. 

As to the last exception, I am of the view that it was intended that the ordinary rules which apply to the issue and enforcement of a Court’s subpoena powers should apply in any case when, as a result of an investigation under the NCA Act, proceedings are brought and prosecuted by any relevant agency.  If an agency, such as the Commissioner of Consumer Affairs of South Australia, has commenced proceedings consequent upon an investigation under the NCA Act, then in my view, it was intended that the Court should be empowered to order the production of documents on application by any party to the proceedings, if the document or documents sought are material to the issues.  The Court can tailor any orders in respect of inspection to provide any necessary protection in respect of confidentiality.  Any argument as to public interest immunity or privilege is still available to persons or bodies subpoenaed to produce documents.  The subpoena can be challenged on the usual grounds of “oppression” or “fishing”.  If a party to a proceeding resulting from an investigation by the Authority is denied the right to seek relevant documents, then in my view injustice could result.  I consider it is not the intention of the NCA Act to deprive a person who is a party to such a proceeding, that party’s right to seek documents relevant to the issues.  The section seeks to protect the confidentiality of NCA investigations and any information and documents obtained in the course of those investigations.  In the course of proceedings commenced, either by the Authority or some other person or agency, as a result of an investigation under the NCA Act, there does not seem to be any reason to deny parties their usual rights to seek production and inspection of material documents, no matter how these documents came to be in the possession of the Authority.  If there is a valid reason for maintaining confidentiality or if there are public policy grounds for not making the documents available, the Court has power to deny or restrict access.  The purpose of section 51 is to prohibit disclosure of information or documents, the subject of an investigation, but once legal proceedings are commenced, in my view, the Court is empowered to order production. 

Mr Bonnici submitted that the statutory exception is restricted to prosecutions for an offence.  The question is whether the words “prosecution instituted as a result of an investigation” are to be interpreted as being limited to a prosecution for an offence.  Usually a prosecution exists where a criminal charge is made before a judicial officer or a tribunal.  (See Halsbury’s Laws of England, 4th Edition, Volume 45, page 612, paragraph 1342).  However, in my view, prosecution can mean the institution and carrying out of any legal proceedings against a person.  (See Macquarie Dictionary, 2nd Edition, 1991)  In my view, there is no reason to restrict the meaning of “prosecution” as submitted by Mr Bonnici.  If, as a result of an investigation by the Authority, proceedings are commenced against a person, I consider that whether they be criminal or civil proceedings, the documents which may be relevant should be, subject to the usual subpoena powers of the Court.  Section 51, should not taken to unduly restrict those powers, unless the words of the section are clear and unambiguous. 

If, however, “prosecution” in section 51(3)(b) is restricted to criminal proceedings, the question then arises whether in this case, the proceedings are criminal proceedings.  Mr Bonnici argued that section 7 of the Act provides a specific offence for acting as a dealer without a licence and that section should be distinguished from the disciplinary provisions in Part 5 which he argued are civil proceedings.

The distinction between criminal and civil proceedings is not clear.  Civil proceedings are commonly regarded as having as their object, the recovery of money or other property or the enforcement of a right or advantage on behalf of an individual plaintiff.  Criminal proceedings by their nature, have for their object, the punishment of a person who has committed a crime.  (See Halsbury’s Laws of England, 4th Edition, Volume 11(1), page 16, paragraph 2).  The definition of a crime does not appear to have a definite set of criteria to characterise it.  Crime may be defined to include acts which are not criminal in the real sense, but are acts which are prohibited under a penalty on the grounds of public interest (see Halsbury’s Laws of Australia, Volume 9, page 247033, paragraph 130-1).  One of the more important characteristics of a crime is that a penalty is imposed and is recoverable by the Crown.  Clearly, if a person may be imprisoned for a breach of the law that would be characterised as a criminal offence.  If a statute provides for a fine for a breach, then conduct constituting the breach would be regarded as an offence and classified as criminal conduct.  In the case of the Act, a person who conducts the business of a dealer is liable to a fine or penalty of $8,000 whether proceedings are taken pursuant to section 7 or under Part 5 of the Act.  The other orders that may be made by the Court pursuant to section 31 are mainly relevant to persons who are currently licensed.  In my view the disciplinary provisions of the Act, insofar as they apply to persons who are not licensed are of a criminal nature, given that the main sanction is a fine.  I conclude, that in bringing an action under the disciplinary provisions of the Act for dealing without a license, the Commissioner is, in substance, prosecuting a crime.  Therefore, in my opinion, even if one takes a narrow view of the word “prosecution” in section 51(3) of the NCA Act, the exception applies. 

It follows that section 51 of the NCA Act does not apply to prohibit the Court from issuing or giving effect to the subpoena.

Mr Bonnici submitted the further ground that the subpoena should be set aside as “fishing”.

Mr Lister submitted that the forensic purpose in seeking the production of the documents is that it is necessary to have the material available in order to argue that the Authority and the South Australian Police Department have acted beyond power under the NCA Act, and therefore, the material upon which the action is based was illegally obtained.  He argued that in that event the evidence may be inadmissible, or alternatively that it would be appropriate for the Court to grant a permanent stay in respect of the action. 

In Hunt and Boyce v Judge Russell and De Pinto (1995) 63 SASR 402, a subpoena had been issued to the Commissioner of Police and the Police Complaints Authority, requiring the Commissioner of Police to produce, inter alia, the personal files of the apprehending and interrogating officers, and further requiring the Police Complaints Authority to produce statements involving any complaint alleged against the apprehending and interrogating officers. Objection was taken to the production of the materials on the grounds that the subpoenas were “fishing”. Perry J referred to the decision of Carter v Hayes (1994) 61 SASR 451, and said :

“It is clear from the decision in that case that in determining the appropriate procedure applicable to a subpoena to produce documents issued under the latter Act (ie, the Magistrates Court Act, 1991) it is necessary to bring to bear the common law rules relating to subpoena duces tecum. Those rules include the rule that such subpoena cannot be used to obtain discovery in a criminal process Sobh v Police Force (Vic) (1994) 1 VR 41, and the common law rule as to ‘fishing’ subpoenas.”

His Honour observed :

“Generally speaking a complaint that a subpoena is ‘fishing’ should be determined by reference to the judge’s knowledge and understanding of the case and the description of the documents in the subpoena.”

His Honour then said :

“In my view, consistent with the dicta to which I have referred to in Alister a mere ‘fishing’ expedition should not be allowed, and before a Court should proceed to inspect the documents sought to be produced, it must be ‘on the cards’ that the documents ‘will materially assist the defence’ or having regard to the terms of section 25 of the District Court Act, it must be ‘on the cards’ that the documents sought to be produced will be of ‘evidentiary value’ in the proceedings. If that test is satisfied, the subpoena is not to be characterised as ‘fishing’ and will not be struck out as bad.”

In my opinion, the documents sought in paragraphs 2 and 5 of the subpoena are documents falling within the description of “evidentiary material” as defined in the District Court Act. The documents are of the kind which may assist the defendant in challenging the admissibility of evidence relied upon by the complainant. In addition, the documents may be relevant or lead to relevant evidence to support a submission that the proceedings should be stayed as an abuse of process.

Mr Bonnici argued that it is only in rare cases that a Court will exclude evidence in civil matters, therefore, the subpoena should be set aside because application to exclude the evidence or to have the proceedings stayed, even if the evidence was illegally obtained, was destined to fail. 

There are two answers to that submission. Firstly, in Mazinski v Bakka (1978) 20 SASR 350, King CJ accepted that there may be circumstances in a civil case where the Court must seriously consider assuming a discretionary power to reject evidence which a party has obtained by a serious and deliberate infringement of the legal rights of another. The question of whether that power should be exercised depends on the circumstances in each case. Until the documents are considered and evidence is adduced, it is not possible to determine whether this case is one which was contemplated by King CJ, as falling within those circumstances.

Secondly, as I have indicated, it is open for the defendant to argue that the bringing of disciplinary proceedings under the Act are criminal proceedings, and therefore the discretion in criminal cases to exclude evidence “applies” to the proceedings in this case.

The application to set aside the subpoena is therefore refused.  The application is dismissed.  I order that the documents, the subject of paragraphs 2 and 5 of the subpoena be produced.