Smith v Papamihail

[1998] FCA 1310

BRIAN MILLWOOD SMITH v KERRIE PAPAMIHAIL AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
No. WAG 95 of 1998
FED No. 1310/98
Number of pages - 17
Corporations
(1998) 158 ALR 451

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

CARR J

Corporations - investigation by Australian Securities Commission (as it was then known) - Commission served statutory notice on applicant requiring assistance - applicant required to sign authorities addressed to a bank and trustee company overseas - whether notice issued under a power to require a person to give all reasonable assistance must include a requirement that the person appear for examination - whether the Commission has separate powers in that regard - whether privilege against self-incrimination applies - whether required assistance would prove futile.

Australian Securities and Investments Commission Law ss 13(1), 19, 68, 70

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 6

Australian Securities Commission v Kutzner (1997) 25 ACSR 723 followed

Australian Paper Ltd v The Anti-Dumping Authority (Federal Court of Australia, 2 October 1998, No 1244 of 1998) cited

Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1984) 156 CLR 385 cited

Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 cited

BTR Engineering (Australia) v Patterson (1990) 20 NSWLR 724 cited

Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 cited

Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 cited

Hamilton v Oades (1989) 166 CLR 486 cited

Khan v Khan [1982] 1 WLR 513 cited

Re The Licensing Ordinance (1968) 13 FLR 143 cited

Doughty v Corporate Affairs Commission (NSW) (1988) 13 ACLR 612 cited

Traders Prudent Insurance Co Ltd v The Registrar of the Workers' Compensation Commission of New South Wales [1971] 2 NSWLR 513 cited

PERTH, 21 September 1998 (hearing), 16 October 1998 (decision)

#DATE 16:10:1998

Appearances

Counsel for the Applicant: Mr N P Gentilli

Solicitor for the Applicant: Messrs Jackson McDonald

Counsel for the Respondent: Mr K J Martin QC with Mr M J Gething

Solicitor for the Respondent: Mr Michael Gething

THE COURT ORDERS THAT:

1. The application be dismissed.

   2. The applicant pay the respondents' costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

CARR J

INTRODUCTION

This is an application, under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), for an order of review of a decision of the first respondent, Ms Kerrie Papamihail (a legal officer employed by the second respondent, the Australian Securities and Investments Commission, as it is now named) made on 22 June 1998 under s 19(2) of what was then the Australian Securities Commission Law ("the ASIC Law") requiring the applicant to give to the second respondent certain assistance in connection with an investigation being conducted by the second respondent. In summary, the assistance which the second respondent required was that the applicant sign two authorities, addressed respectively to a bank in England and a trust company in the Channel Islands, authorising and consenting to the release to the second respondent of certain specified information. The applicant also seeks to review the second respondent's proposed conduct being proceedings foreshadowed under s 70 of the ASIC Law against him if he fails to comply with that notice.

FACTUAL BACKGROUND

On 2 January 1998 the second respondent received a complaint alleging that the applicant and another person were beneficial holders of more than 20% of the share capital of a company called Welcome Stranger Mining Company NL ("WSM") in contravention of various provisions of the Corporations Law. Later that month the second respondent made a decision under s 13(1) of the ASIC Law to commence an investigation into dealings in the fully paid ordinary shares of WSM. For the purposes of these proceedings, the applicant concedes that there are grounds for such an investigation. On 26 February 1998 the second respondent served a notice issued under s 33 of the ASIC Law on the applicant requiring the production of various books in his possession custody or control relating to the period 1 January 1996 to 23 January 1998. The applicant's response to that notice was to say that he had no such documents to produce. On 27 February 1998 he signed a written confirmation to that effect. It would appear that shortly thereafter the second respondent served a notice under s 19 of the ASIC Law on the applicant. In any event the applicant was examined under s 19 of the ASIC Law on 29 April 1998. On 22 June 1998 the first respondent (by arrangement) served on the applicant's solicitors a notice ("the Notice") which I reproduce below.

AUSTRALIAN SECURITIES COMMISSION

FORM 1 Regulation 4

AUSTRALIAN SECURITIES COMMISSION REGULATIONS Australian Securities Commission

NOTICE REQUIRING APPEARANCE AT AN EXAMINATION OR REASONABLE ASSISTANCE IN CONNECTION WITH AN INVESTIGATION

To: Brian Millwood Smith Unit 2, 1050 Hay Street WEST PERTH WA 6005

In relation to an investigation of suspected contraventions of the Corporations Law sections 615, 709, 710, 995, 1308 and 1309 in respect of dealings in fully paid ordinary shares ("Shares") of Welcome Stranger Mining Company NL ACN 007 670 386 ("WSM") in the period from 18 August 1995 to 19 June 1998 ("Investigation"), you are hereby notified that, under subsection 19(2) of the ASC Law, you are required:

to give to the Commission all reasonable assistance in connection with the Investigation by signing the consents annexed to this notice at Annexure A and Annexure B and returning them to the Commission by no later than 10:00 am on 26 June 1998, thereby authorising the Commission to request from the persons referred to in Schedule A of each annexure, the information referred to in Schedule B of each annexure, and consenting to the release of such information to the Commission.

Please note the provisions of section 68 of the ASC Law (relating to self-incrimination). The effect of those provisions is set out at the end of this form.

K Papamihail 22 June 1998 ______________________ _____________________ Kerrie Papamihail Date ASC Position No. 1344 Signature of person authorised by the Commission to require reasonable assistance

Annexure A to the Notice was a form of authority whereby the applicant would authorise the second respondent to request from Midland Bank PLC ("Midland Bank") of 365 Chartwell Square, Southend-On-Sea, Essex, United Kingdom, the release of certain information to the second respondent, and a consent by the applicant to such release. The information was described in the following terms:

SCHEDULE B

For the period 18 August 1995 to 19 June 1998:

(a) Statements of accounts and correspondence relating in any way whatsoever to Midland Gold Mastercard account Number 5434 5801 0113 1130 and any other credit card account held in the name of Brian Millwood Smith and/or Centurion Trust Company Limited re Gold Coast Trust; and

(b) Statements of accounts and correspondence relating in any way whatsoever to Centurion Trust Company Limited Re The Gold Coast Trust - Australian Dollar Deposit Account, account number 010 721215 362 and any other account held in the name of Brian Millwood Smith and/or Centurion Trust Company Limited re Gold Coast Trust.

Annexure B to the Notice was a similar form of authority and consent in relation to the release of information by Centurion Trust Company Ltd ("Centurion Trust") of Centurion House, St Helier, Jersey in the Channel Islands. The information sought in Annexure B was described in the following terms:

SCHEDULE B

For the period 18 August 1995 to 19 June 1998:

(a) all correspondence sent to, or received from, Brian Millwood Smith relating in any way whatsoever to Welcome Stranger Mining Company NL ACN 007 670 386 ("WSM");

(b) all correspondence sent to, or received from, Brian Millwood Smith relating in any way whatsoever to Gold Coast Trust; and

(c) all correspondence sent to, or received from Brian Millwood Smith relating in any way whatsoever to accounts held with Midland Bank PLC by:

(i) Brian Millwood Smith; and

(ii) Centurion Trust Company Limited re Gold Coast Trust.

LEGISLATION

Part 3 of the ASIC Law is concerned with investigations and information-gathering. It contains sections 13 to 93 (both inclusive). Section 13(1) provides that the second respondent may make such investigation as it thinks expedient for the due administration of a national scheme law where it has reason to suspect that a contravention of such a law may have been committed. There is no dispute that the second respondent is conducting such an investigation. Section 19 provides as follows:

Division 2 - Examination of persons

SECTION 19 NOTICE REQUIRING APPEARANCE FOR EXAMINATION

19(1) [Application of section] 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.

19(2) [Person to assist; appear for examination] 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.

19(3) [Contents of notice] 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.

"Giving information" is defined in s 6 of the ASIC Law as including a reference to:

(a) explaining or stating a matter;

(b) identifying a person, matter or thing;

(c) disclosing information; or

(d) answering a question.

Section 20 provides that the remaining provisions of Division 2 of Part 3 apply where, pursuant to a requirement made under s 19, a person appears before an inspector for examination. Those provisions impose obligations to take an oath or affirmation and to answer questions from the inspector (s 21), provide for the examination to be in private (s 22), confer a right of legal representation (s 23), provide for the record of examination (s 24) and the giving of a copy of such record on conditions (ss 25, 26) and that if a report of the investigation is prepared, provide that such report shall be accompanied by each record of examination (s 27). Section 63 relevantly provides that a person shall not, without reasonable excuse, fail to comply with a requirement made under s 19. A penalty of 100 penalty units or imprisonment for 2 years, or both, is provided. Section 68 deals with the matter of self-incrimination in the following terms:

SECTION 68 SELF-INCRIMINATION

68(1) [Restriction on privilege against self-incrimination] For the purposes of this Part, of Division 3 of Part 10, and of Division 2 of Part 11, it is not a reasonable excuse for a person to refuse or fail:

(a) to give information;

(b) to sign a record; or

(c) to produce a book;

in accordance with a requirement made of the person, that the information, signing the record or production of the book, as the case may be, might tend to incriminate the person or make the person liable to a penalty.

68(2) [Circumstances in which sec 68(3) applies] Subsection (3) applies where:

(a) before:

(i) making an oral statement giving information;

(ii) signing a record;

pursuant to a requirement made under this Part, Division 3 of Part 10 or Division 2 of Part 11, or under a corresponding law of another jurisdiction, a person (other than a body corporate) claims that the statement, or signing the record, as the case may be, might tend to incriminate the person or make the person liable to a penalty; and

(b) the statement, or signing the record, as the case may be, might in fact tend to incriminate the person or make the person so liable.

68(3) [Circumstances in which statement, etc not admissible] The statement, or the fact that the person has signed the record, as the case may be, is not admissible in evidence against the person in:

(a) a criminal proceeding; or

(b) a proceeding for the imposition of a penalty;

other than a proceeding in respect of:

(c) in the case of the making of a statement - the falsity of the statement; or

(d) in the case of the signing of a record - the falsity of any statement contained in the record.

68(4) [Application of sec 68(2) and (3) to requirements made on or after 14 May 1992] Subsections (2) and (3), as in force after the commencement of section 4 of the Corporations Legislation (Evidence) Amendment Act 1992, apply in relation to a requirement made, as mentioned in paragraph (2)(a) of this section as so in force, at or after that commencement.

68(5) . . .

Section 70 relevantly provides that where the second respondent is satisfied that a person has, without reasonable excuse, failed to comply with a requirement made under (inter alia) s 19, it may by writing certify that failure to the Court. If it does so, s 70(3) provides that the Court may inquire into the case and may order the person to comply with the requirement.

THE ISSUES TO BE DECIDED

The parties have agreed that the applicant's challenge to the first respondent's decision and the second respondent's proposed conduct is to be resolved by deciding the following four issues:

(a) whether s 19(2) is to be read conjunctively so that the Notice is invalid because it only requires the applicant to give reasonable assistance without requiring him to appear for examination?

(b) whether, on its proper construction, s 19 only applies if there is an examination on foot or to be held?;

(c) whether there exists any relevant privilege against self-incrimination?; and

(d) whether the applicant has a reasonable excuse for not complying with the Notice until such time as there is evidence that the Midland Bank PLC and/or Centurion Trust Co Ltd will comply with the requests which the second respondent has required the applicant to sign?

THE CONJUNCTIVE ARGUMENT [BEING ISSUES (A) AND (B) ABOVE]

APPLICANT'S CONTENTIONS

Mr N P Gentilli, counsel for the applicant made the following submissions in support of the proposition that s 19(2) is to be read conjunctively, i.e. that for a notice to be given validly under that subsection the second respondent must require the person not just to give it all reasonable assistance in connection with an investigation, but also to appear before a specified member or staff member for examination on oath and to answer questions. First, reliance was placed on the heading of Division 2 of Part 3 namely, "Examination of persons". The applicant pointed out that s 5(3) of the ASIC Law incorporates by reference Parts 1.2 and 1.3 of the Corporations Law. Section 109D of the Corporations Law (which is in Part 1.2) provides that such a heading is to be taken to be part of the Corporations Law. The applicant contended that if the second respondent required production of books, power so to require was contained in Division 3 of Part 3 of the ASIC Law. This included power to require production of books for the purposes of an investigation under Division 1 of Part 3. As a further indication that s 19(2) was concerned with reasonable assistance only in the context of an examination, the applicant relied on the fact that s 19(3)(b) of the ASIC Law provides that a notice issued under s 19(2) shall, amongst other things, set out the effect of s 23(1). Section 23(1) provides that the examinee's lawyer may be present at his examination. There is also reference to this right of representation in Form 1, being the form prescribed by Regulation 4 of the ASIC Regulations for a notice served under s 19 of the ASIC Law. The applicant submitted that s 23(2) has no relevance to the rendering of reasonable assistance, other than in the context of an examination. The applicant contended that the presence of the heading of Division 2 of Part 3 and the requirement for a notice under s 19(2) to set out the effect of s 23(1) meant that the word "and" in s 19 was to be read conjunctively. The applicant referred to evidence that his examination had been concluded, and that the record of that examination had been reduced to writing, which he had signed as required by s 24 of the ASIC Law. In the alternative, the applicant submitted that even if the word "and" in s 19(2) was to be read disjunctively a "requirement" under s 19(2)(a) must be linked to an examination of the person who can "give information". As the notice was aimed at obtaining information from persons other than the applicant and as it was not proposed to use the information so obtained in the examination of the applicant, the notice was, so it was submitted, beyond power.

RESPONDENTS' CONTENTIONS

The respondents submitted that the power to require "reasonable assistance" under s 19(2)(a) is independent of the power to require appearance for examination under s 19(2)(b). They relied upon the decision of Heerey J in Australian Securities Commission v Kutzner (1997) 25 ACSR 723 as authority that s 19(2)(a) and (b) are to be read disjunctively. It would not be a sensible constraint upon an investigative body, so it was put, to require it to impose its "assistance" requests in the context of a pending oral examination. Further, the respondents pointed out that there was no limit in s 19(2)(b) to the number of occasions on which an examinee may be examined. In relation to the legal scope of "reasonable assistance" the respondents contended that the ordinary meaning of the term "assistance" extended to doing a physical act including the giving of authority and consent to the release of information. The respondents' case was that the assistance required of the applicant was reasonable because:

(a) the second respondent had a legitimate forensic need for the information in pursuit of its inquiries concerning the true identity of persons who have the power to control the voting or disposal of shares in WSM; and

(b) the applicant was not being required to do anything which was unreasonable in the sense of being unlawful or requiring the incurring of any expense. The Notice, so it was put, imposed clear and unambiguous obligations which could be complied with in minimal time (by signing and returning the annexures) in circumstances where there were reasonable grounds to anticipate that Midland Bank and Centurion Trust have documents which will fall within the terms of the requests.

MY REASONING

In Australian Securities Commission v Kutzner, Mr Kutzner was the recipient of a notice under s 19(2) which required him to execute a power of attorney in favour of a Mr Emrith of Port Louis, Mauritius, to inspect books of a company registered in Mauritius. One of the arguments advanced on behalf of Mr Kutzner was that s 19(2)(a) should be read as if the words "for that purpose" appeared after the word "and" at the end of that paragraph. Mr Kutzner argued that "reasonable assistance" did not extend to doing a physical act but was limited to assistance by way of answering questions in the course of an examination. I acknowledge that this is a slightly different argument to that advanced on behalf of the applicant in this matter. However, it was rejected by Heerey J (at 731) in the following terms:

"In my opinion this contention is untenable. The ordinary meaning of the term "assistance" extends to a physical act. It is not difficult to imagine circumstances that would have been in the contemplation of those drafting the ASC Law, for example, providing the key to a locked safe or calling up information stored on a computer. The power to require reasonable assistance under para (a) is quite independent of the power to require appearance for examination under para (b). That latter function is the subject of detailed regulation in ss 20 to 27."

It is not entirely clear, but it would appear from the report (at 726) that the examination of Mr Kutzner had been concluded at the time when the notice was served on him. He had been examined on 13 May 1996 and the notice which was served on him under s 19(2) was dated 30 July 1997.

At the hearing of this matter, the applicant (while not formally conceding the point) expressly disclaimed any argument that "reasonable assistance" did not extend to the doing of a physical act. Mr Gentilli submitted that Heerey J's observations were by way of obiter dicta and had not been supported by closely reasoned argument. He said that his Honour had decided the case against the Australian Securities Commission on the basis that the evidence established that it would be futile to require Mr Kutzner to execute the power of attorney. Mr K J Martin QC who (with Mr M J Gething) appeared for the respondents, argued that his Honour's above observations were not obiter dicta. In my view, the observations were technically obiter dicta in that they were not necessary to the decision eventually reached. I think that Mr Gentilli correctly identified the basis upon which Heerey J decided the case. However, I think that it would be appropriate for me to adopt Heerey J's conclusions on this point of law, unless I thought that they were clearly wrong. Whether such an approach would elevate those conclusions unduly does not matter in the present case, because I have formed the view that paras (a) and (b) of s 19(2) are to be read disjunctively. I respectfully agree with Heerey J's conclusion. I do not think that the heading of Division 2 of Part 3 of the ASIC Law, namely, "Examination of persons" requires a different construction. As can be seen from the heading to Part 3, that Part as a whole is concerned with "Investigations and Information-Gathering". As a Full Court of this Court observed in Australian Paper Ltd v The Anti-Dumping Authority (Federal Court of Australia, 2 October 1998, No. 1244 of 1998), at 14:

"It is a fundamental principle of statutory interpretation that words used in a section or sub-section of an Act are to be construed by reference to the statutory context in which they appear, the word "context" being used in the broad sense of encompassing not merely the legislation as a whole, but the legislative history and parliamentary purpose as evident in the legislation or, where appropriate, extrinsic material: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297 at 304 per Gibbs CJ, and at 322-3 per Mason and Wilson JJ; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ."

Counsel for the applicant referred me to Re The Licensing Ordinance (1968) 13 FLR 143 where (at 147) Blackburn J of the Supreme Court of the Northern Territory rejected the proposition that "and" can sometimes mean "or" as being not true either in law or in English usage. That decision was cited with approval by Waddell CJ in Eq in Doughty v Corporate Affairs Commission (NSW) (1988) 13 ACLR 612 at 615. I was also referred to Traders Prudent Insurance Co Ltd v The Registrar of the Workers' Compensation Commission of New South Wales [1971] 2 NSWLR 513 at 521. But in each of those cases the statutory provisions were very different in form and purpose to s 19(2) of the ASIC Law. Helpful as they may be in their particular context, I do not think that they are of assistance in deciding this case. They are simply examples of where a disjunctive application of the word "and" would not have accorded with the intent of the legislature.

As the authors of Pearce and Geddes "Statutory Interpretation in Australia" (4 ed) point out (at paragraph 2.15), cases decided before the enactment of s 15AA of the Acts Interpretation Act 1901 (Cth) indicate that the circumstances in which the courts were prepared to modify the usual meaning of "and" were limited to two categories. The first category was where the word "and" had been used by mistake. The second category was where the context, for example by the use of the word "includes" followed by a list of items joined by the word "and", required each item to be read dispersively. The authors suggest that the purposive approach to interpretation set out in s 15AA of the Acts Interpretation Act "... could include reading 'and' for 'or' or vice versa if the purpose of the legislation suggests such an interpretation." I think that this is such a case. I see no inconsistency in Parliament providing a power to the second respondent to require a person to give all reasonable assistance in connection with an investigation, but without requiring that person to appear for examination. In other words, I think that the second respondent has a choice in what it may require. Usually, so I would have thought, the power to require a person to appear for examination would be more intrusive and draconian in nature than a requirement to give reasonable assistance in connection with an investigation. In a particular case, the second respondent may not wish to impose an examination on the recipient. I accept that the heading of Division 2 and the requirement that the notice set out the effect of s 23(1) and s 68 provide some basis for the applicant's argument. In particular, the former requirement seems unnecessary in respect of a notice seeking only the giving of reasonable assistance. I think that (at least so far as s 68 is concerned) the width of the words "all reasonable assistance" is of significance. One can imagine that in some circumstances "all reasonable assistance" might include giving information, signing a record or producing a book which might bring into play the operation of s 68. I acknowledge that there remains the reference to s 23(1) which would be superfluous in the case of a notice which did not include a requirement to appear for an examination. The draftsperson may have inserted the former requirement as a matter of abundant caution (as Blackburn J concluded in Re The Licensing Ordinance at 147) or it might have been on oversight. Nevertheless, to the extent that any doubt arises, I consider that, in terms of s 15AA of the Acts Interpretation Act, the purpose and object of the ASIC Law are clear. They include the establishment of the second respondent to administer the national scheme laws. Section 1(2) relevantly imposes obligations on the second respondent to strive;

* to administer national scheme laws effectively but with a minimum of procedural requirements; and

* to take whatever action it can take, and is necessary, in order to enforce and give effect to the national scheme laws.

Section 1(3) provides that the ASIC Law "has effect, and is to be interpreted accordingly."

The purpose of s 19 is to assist the second respondent in carrying out an investigation for the due administration of a national scheme law where it has reason to suspect that there may have been a contravention of such a law. In circumstances where the second respondent does not wish to conduct an examination on oath, it would not advance that purpose or object of the ASIC Law to require the two paragraphs to be read conjunctively. I accept the respondents' submission that, in the context of an investigation, it makes no sense to fetter the power by requiring the "tacking on" of a requirement to conduct an examination on each occasion that the second respondent seeks reasonable assistance in connection with an investigation. I acknowledge that the tacking on of such a requirement where the second respondent had no genuine desire to conduct an examination would not save such a notice if it were otherwise invalid for requiring only reasonable assistance. As I have indicated, my view is that a notice which simply seeks all reasonable assistance without requiring the recipient to appear for examination on oath is not invalid due to that deliberate omission. It was common ground that had the second respondent required such assistance in the notice given (about two months earlier) to the applicant when he was required to appear for examination, there would have been no suggestion that such a notice was invalid. The respondents submitted, and I agree with the submission, that the applicant could be required to appear for further examinations. I can see no policy reasons why the expression "and" in s 19(2) should be read conjunctively and require there to be a further examination before the second respondent may require reasonable assistance from the applicant. Some further, perhaps slight, support for the argument that the word "and" should be read disjunctively is, as Mr Martin pointed out in oral argument, the assistance requirement appears first in s 19(2)(a). If the two types of requirements were to be read conjunctively, one would usually expect to see the requirement for attendance for examination being followed by the requirement to give reasonable assistance, but that is not the case. Also it is to be noted that s 19(2)(a) refers to "all reasonable assistance in connection with the investigation" rather than in connection with the examination on oath. Again, this latter point is, in my view, but a further slight indication of Parliament's intention. Taking a purposive approach to the construction of the section, I think that the word 'and" in s 19(2) should be read disjunctively. So regarded, the section can be seen as offering a short "menu" of powers available to the Commission. For those reasons, I reject the applicant's contentions in relation to this issue.

Finally, the applicant submitted that even if the word "and" in s 19(2) is read disjunctively, a proper reading of the subsection in its context would dictate that a "requirement" must be linked to an examination of the person who can "give information". The applicant submitted that the Notice was aimed at obtaining information from persons other than the applicant and that it was not proposed to use the information obtained from Midland Bank and Centurion Trust in any examination of him. I reject that submission for the following reasons:

1. The covering letter served with the Notice contains the following:

   "This notice is issued because the ASC, on reasonable grounds, suspects or believes that you can give information relevant to a matter that it is investigating, or is to investigate, under Division 1 of Part 3 of the Law."

   2. The first respondent's affidavit swore to the truth of the above statement and the applicant did not dispute this evidence. When read as a whole, the first respondent's affidavit clearly establishes the existence of the circumstances described in s 19(1).

   3. The transcript of Mr Smith's examination on 29 April 1998 shows that the second respondent endeavoured to obtain information about his relationship with the Centurion Trust and the operation of a Midland Gold Mastercard account. In relation to the latter, the applicant said twice that he could not recall having a credit card account with the Midland Bank. When a statement of account in relation to a Midland Bank Gold Mastercard in the applicant's name was, shortly thereafter, put to him as being a statement of his account he replied "Privilege. It appears to be." He was asked whether he had some arrangement with Centurion Trust to pay that credit card account. His answer to that question and to other questions relating to Midland Bank and Centurion Trust provided virtually no information.

   4. I diverge from that factual analysis (most of which I was taken to by senior counsel for the respondents in the course of oral submissions) because it gives a striking example of how s 19(2) operates in a practical, effective and sensible manner. That is, the second respondent, having been unable to obtain information from the person who it believes can give that information, is provided with an alternative means of obtaining it. There was no dispute that the information sought from the Midland Bank and the Centurion Trust was relevant to the matter which the second respondent was investigating. Nor was there any dispute that the assistance required was "in connection with the investigation".

   5. In any event, the answer to the applicant's contention that the requirement of reasonable assistance must be linked to an examination of, in this case, the applicant, is that the link is clearly established. He could not or would not provide that information at his examination and, in my view, in those circumstances, the second respondent was entitled to serve the Notice requiring him to give this alternative form of assistance in connection with the investigation, whereby the information might be forthcoming.

   6. But there is nothing in s 19 which requires there to be, as the applicant argues, a link to an examination. There is nothing in s 19(1) which requires that the requisite suspicion or belief on the second respondent's part should arise out of an examination of the relevant person, whether that examination has been conducted, is in the course of being conducted, or is in contemplation.

   7. In my view, once the prerequisites of s 19(1) are satisfied then, in terms of s 19(2)(a) there is no need to read down the reference to "all reasonable assistance in connection with the investigation" by requiring that assistance to take the form of directly providing information. In terms of obtaining information, the link (if there needs to be one) between s 19(1) and s 19(2) in the present matter can be seen in the likelihood that if the applicant is obliged to provide the reasonable assistance then this will result in the receipt of information relevant to the matter being investigated. The second respondent's affidavit was said to lead to grounds for suspicion (and this was not challenged) that there were circumstances in which WSM shares were held overseas, sold, and the proceeds of sale paid to financial institutions (which included Centurion Trust) which in turn caused bills such as Mastercard bills to be paid from those proceeds.

In my opinion, s 19(2)(a) does not require that the "reasonable assistance" results in obtaining information directly from the recipient of the relevant notice. Nor does it require that any information obtained as a result of the "reasonable assistance" be used in any examination of the recipient of a notice. Even if that were essential, there is no evidence to support the applicant's assertion. It must be remembered that these are proceedings under the Administrative Decisions (Judicial Review) Act and the applicant has the onus of proving the factual basis for any alleged misuse of power or other illegality. On the state of the evidence to date, depending upon the information forthcoming from Midland Bank and Centurion Trust, I would have thought that it was inherently likely that the applicant would be further examined upon that information.

For the foregoing reasons, I reject the applicant's contentions that the Notice is beyond power.

PRIVILEGE AGAINST SELF-INCRIMINATION

APPLICANT'S CONTENTIONS

The applicant's contentions in this regard were short and very much to the point. They were as follows:

* a statute should not be construed as excluding the privilege against self-incrimination unless an intention to do so clearly appears: Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385 at 388;

* in Controlled Consultants and in Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 the relevant statutes were silent on whether privilege against self-incrimination applied. In those cases the High Court of Australia held, for policy reasons so it was put, that privilege was excluded by implication. The ASIC Law was materially different from the statutes examined in those cases;

* section 68(1) of the ASIC Law expressly negatives the privilege against self-incrimination as an excuse for a person to refuse or fail:

(a) to give information;

(b) to sign a record; or

(c) to produce a book;

* the ASIC Law was enacted after the decisions in Controlled Consultants and Pyneboard. Accordingly, on the basis of those authorities, there was no need for s 68(1) unless the legislative intent was to specify precisely where under Part 3 the privilege against self-incrimination was excluded and, as a corollary, by implication to allow that privilege to continue to apply to the balance of Part 3. Were it not for the section, so it was submitted, on the basis of those two authorities, the privilege against self-incrimination would not apply at all to any of the provisions of Part 3 of the ASIC Law; and

* as a result of the enactment of s 68(1), the principle "expressio unius est exclusio alterius" applied, so that a requirement under s 19(2)(a) to give the second respondent all reasonable assistance in connection with an investigation was not a matter in respect of which the privilege against self-incrimination had been taken away by s 68(1), unless it fell within the three specific categories identified in s 68(1), and set out above.

RESPONDENTS' CONTENTIONS

The respondents contended that, in effect, it was too early to raise this point. Any future potential by the applicant to assert privilege against self-incrimination (which the respondents disputed) did not, so it was contended, go towards establishing error of law in the decision under challenge i.e. the decision to issue the Notice. I take that submission as extending to the challenge to the proposed conduct whereby the second respondent would institute proceedings under s 70 of the ASIC Law against the applicant if he failed to comply with the Notice. In my opinion, so far as the decision to issue the Notice is concerned, the second respondent's threshold contention is correct. If there is a relevant privilege and if there are factual circumstances which give rise to that privilege, then that would not necessarily invalidate the decision to issue the Notice. All of those matters go to whether the applicant would have a reasonable excuse for failing to comply with the Notice. However, the applicant seeks declaratory relief to the effect that he is not required to comply with the Notice or that he has a reasonable excuse for failing so to comply. The matter was contested on that basis. The rest of the respondents' contentions were as follows. The relevant law governing issues of privilege in relation to investigations by the second respondent was the common law as modified to avoid any inconsistency with the Evidence Act 1995 (Cth). I was not taken to any inconsistency relevant to this matter. Privilege against self-incrimination had no application to the seizure of documents or their use for the purposes of incrimination: Controlled Consultants. The act of signing the consents attached to the Notice required neither the answering of a question, nor the production of any document by the applicant. Provision of that degree of assistance has no evidential effect against the applicant. The situation was analogous to the seizure of documents pursuant to a search warrant. In both cases, any relevant documents that were located would have to be proved against the applicant in the usual independent way.

I interpolate here to say that, by way of response, the applicant contended that the fact that Centurion Trust (in particular) answered such a request, if made, would be evidence from which it could be inferred that the applicant exercised some control over Centurion Trust or the shares which it holds. That evidence, so it was put on behalf of the applicant, could be used against him in a prosecution under the various sections mentioned in the Notice, in particular ss 1308, 1309 and 709 of the Corporations Law. If the "substantial shareholder" notices signed by the applicant concerning his shareholding in WSM were not accurate then he would be exposed to penalties of up to 100 penalty units or imprisonment for two years or both. The mere response from the third parties identified in the annexures to the Notice would show, so it was submitted, that the applicant had some control over their affairs. Otherwise, so Mr Gentilli asked, why would a recipient of the request respond, if the applicant had no ability to control its affairs? I shall return to that question below, but in the meantime resume my summary of the respondents' other submissions.

The respondents contended that the common law privilege against self-incrimination had been impliedly abrogated by the relevant statutory provisions of the ASIC Law, when regard was had to the purpose of s 19 and the public interest which that section was intended to serve. Section 68, so it was submitted, dealt with privilege against self-incrimination in the context of investigations by the second respondent. It applied only to circumstances where before making an oral statement, giving information or "signing a record", pursuant to a requirement under Part 3, Division 3 of Part 10, or of Division 2 of Part 11 of the ASIC Law, the statement or record might in fact tend to incriminate the person. The respondents contended that s 68 by its terms did not extend to dealing with the circumstances of being required "to give reasonable assistance" pursuant to ASIC Law s 19. Section 68 evinced a legislative intention that, aside from the circumstances referred to in s 68(2) a person would not be able to refuse to comply with a requirement under Part 3 of the ASIC Law on the basis of privilege against self-incrimination. In its terms s 68(1) did not purport to be exhaustive of the circumstances in which the privilege against self-incrimination would not be a reasonable excuse for non-compliance. The express provision in s 68(1) in relation to giving information, signing a record or producing a book was, so it was contended, no more than parliamentary recognition that the maxim that no person is bound to incriminate himself, applied to those matters. Section 68(1) did not assist in the construction of provisions which conferred other powers upon the second respondent. It was important to consider the policy of the ASIC Law and the purpose of investigations in the implementation of that policy. Had the second respondent been "jurisdictionally capable" of serving a notice directly on Midland Bank or Centurion Trust, then the privilege against self-incrimination would not have been a relevant consideration "to compliance with the Notice". In oral argument, Mr Gentilli agreed with this specific contention. Then the second respondent contended that a person should not be able to evade the investigative processes by using an overseas entity outside the territorial jurisdiction. Mr Gentilli also agreed with that, but responded by saying that the investigative processes are set out by statute, do not exist otherwise and the question is what does the statute provide? Finally, subject to the evidentiary dispute referred to below, the second respondent argued that the fact that "assistance" may lead to incrimination of the person giving it, does not render the assistance "unreasonable". Mr Gentilli's response to that proposition was to say that if the relevant assistance fell within the categories referred to in s 68(1) [giving information, signing a record or producing a book] then the fact that it may lead to incrimination of the person giving it would not render the assistance unreasonable. But if the assistance sought fell outside s 68(1) then the fact that it might lead to the incrimination of that person would render the assistance unreasonable.

In terms of evidence, the second respondent submitted that even if privilege applied, the applicant had not yet identified the precise basis of his claim for privilege. He had not provided any evidence to the effect that giving the assistance required might tend to incriminate him or render him liable for a penalty. Nor, so it was put, had the applicant established a bona fide apprehension of such consequence on reasonable grounds: BTR Engineering (Australia) v Patterson (1990) 20 NSWLR 724 at 730; Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 441. It was for the Court to concern itself with the risk to the person claiming privilege, not that claimant's perception of that risk: Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 422 and 433. In response to that, Mr Gentilli referred to the fact that the applicant had received the Notice, which told him that in relation to an investigation of suspected contraventions of ss 615, 709, 710, 995, 1308 and 1309 of the Corporations Law, he was required to give certain assistance. The factual basis for the second respondent's case was set out in the first respondent's affidavit (Exhibit A2). If the first respondent's beliefs were correct, then the applicant had committed an offence. That being so, so Mr Gentilli submitted, he was entitled to claim the privilege against self-incrimination.

MY REASONING

In Kutzner (at 731) Heerey J rejected a submission, made on behalf of Mr Kutzner, that because the requirement to execute the power of attorney in that matter [which was the reasonable assistance the second respondent sought from him under s 19(2)(a)] did not fall within s 68(1)(a), (b) or (c), privilege against self-incrimination applied. His Honour accepted that the assistance did not fall within any of those sub-paragraphs. He then rejected any argument that assistance might not be "reasonable" because it may lead to the incrimination of the person giving it. It will be recalled that this was in the context of an application by the second respondent for an order that Mr Kutzner comply with the requirement. His Honour then turned to the question of privilege and said:

"Nor does the privilege against self-incrimination provide a "reasonable excuse" for the purposes of s 70. This conclusion follows from the approach adopted by the High Court in cases such as [Pyneboard and Controlled Consultants]. In the latter case the High Court was concerned with a statutory requirement to produce books which provided for a defence of "reasonable excuse". Gibbs CJ, Mason and Dawson JJ said (at CLR 392):

"So far as the actual production of books is concerned, it really goes without saying that a requirement that they be produced in relation to a contravention or failure to comply with a provision of the Code, which is what the Code authorizes, is quite inconsistent with the maintenance of the privilege against self-incrimination in relation to their production and, that being so, the absence of any provision dealing with the privilege, such as is to be found in s 10(5), is a clear indication of an intention to exclude the privilege completely.

For these reasons, the defence of reasonable excuse provided by s 10(1) does not, in our view, include the privilege against self-incrimination so far as production of the books is concerned and is directed to other matters, such as the physical or practical difficulties which may be involved in their production."

See also Australian Securities Commission v Ampolex Ltd (1995) 18 ACSR 735; 14 ACLC 80 at 92."

I agree, respectfully, with Heerey J's conclusion. It does not appear that any "expressio unius" argument was put to him. However, for reasons which I am about to give, I do not think that affects the situation. In my view the situation is that, on the basis of authorities such as Pyneboard, Controlled Consultants, Ampolex, Hamilton v Oades (1989) 166 CLR 486 and the like, s 19(2) impliedly abrogates any privilege against self-incrimination, subject to s 68. Section 68(1) and (2) simply prevents self-incrimination from being "a reasonable excuse" for refusing or failing to do any of the three categories of things mentioned in that subsection i.e. to give information, sign a record or produce a book. The section then goes on to provide a means whereby, in respect of two of those categories, (oral statements giving information and signing a record) the statement or the fact that the person had signed the record would not be admissible in evidence in certain proceedings. It is quite true, as the applicant pointed out, that when construing a statute, it is presumed that the legislature knows the existing state of the law. But, in my view, s 68 can be seen as recognising expressly what is, on the case law, implicit i.e. absence of privilege and then as providing a code for extending some protection to persons making oral statements, giving information or signing a record. Section 68 singles out some aspects of a person's duties under the ASIC Law and confirms the unavailability of privilege in those cases, but goes on to carve out some limited areas of exception. In my view, given the statutory policy of the ASIC Law as a whole, it would be a misuse of the "expressio unius" guideline of statutory interpretation to read into the enactment of s 68 an intention to remove the implication which would arise at common law from s 19 that there was to be no privilege from self-incrimination in respect of all of the matters which might fall within s 19(2). As I see it, the statutory scheme works the other way and provides what might be called a code for extending some statutory protection in the limited circumstances which I have just described.

Having reached that conclusion, it is not strictly necessary for me to consider the applicant's alternative arguments, but I shall do so briefly out of deference to counsel's submissions.

Mr Gentilli provided strong arguments for distinguishing Rank and Khan v Khan [1982] 1 WLR 513 on a factual basis. The respondents relied upon Rank as authority for the proposition that an order requiring persons to allow access to premises for the purposes of looking for illicit copy films and to allow their being removed to safe custody, was not a matter to which the privilege against self-incrimination applied. The Court of Appeal had upheld the validity of such an order and at least Lord Wilberforce in the House of Lords (at 441) was satisfied that no privilege against self-incrimination applied. In Khan the Court of Appeal held that, under the relevant statutory provision [s 31(1) of the Theft Act 1968 (UK)], the appellant would have privilege against self-incrimination if any charges were laid arising out of the thefts which were alleged to be the subject matter of those proceedings. In any event, the Court of Appeal held that the tracing order, made at first instance, did not have any bearing on the risk of criminal proceedings. In neither case was there any assertion that the mere ability to open the premises in Rank or to make an affidavit of the type sought in Khan would itself be evidence of an incriminating nature. However, in my opinion, the underlying principle in Rank still applies. The applicant will not incriminate himself simply by signing the authorities. I accept that the manner in which the recipients of the respective authorities respond (quite apart from the content of such responses) may be some evidence of the degree to which the applicant has control over them. I think that the analogy of requiring a person, who has a key to a safe to open that safe, is a useful one. Supposing the safe contained narcotics. The evidence that the person had a key with which he could unlock the safe would probably be evidence supporting a charge of possession of the narcotics. However, I do not think that the person would be able to resist on the basis of privilege, a search warrant which included an order that the person surrender any safe keys. But I was not taken to any authority directly in point and I acknowledge that the matter is not free from doubt.

FUTILITY

The applicant contended that there was no evidence that either Midland Bank or Centurion Trust would comply with the authorities and consents which he was required to sign. He conceded that it can be inferred that a bank with whom he had a credit card account would be likely to comply with such an authority and consent, but argued that no such inference arose in relation to a trustee company in the Channel Islands. The applicant submitted that the second respondent should have written to Midland Bank and Centurion Trust and asked them to provide the documents and, if they refused, should have asked them whether they would produce the documents if the applicant signed a form of authority and consent. Again the applicant acknowledged that "presumably" a bank would reply that it would do so with the account holder's authority but "who knows" so it was put, what reply would be received from Centurion Trust? The applicant, at the hearing, abandoned his submission that if one of the forms of authority and consent was thus unreasonable, both notices must fall. Accordingly in terms of evidence, the focus is upon whether there is evidence that the Centurion Trust would respond to an authority and consent from the applicant? In my view, there is sufficient evidence before the Court to infer, on a prima facie basis, (as I do) that Centurion Trust would be likely to respond. I refer to Exhibits KLP27 and KLP29 to the first respondent's affidavit. Those were Centurion Trust's responses to notices from the second respondent. In those responses, Centurion Trust provided quite a lot of information to the second respondent, even without any authority from the applicant. In those circumstances, I think that an evidentiary onus shifted to the applicant to prove the futility of requiring him to provide an authority and consent addressed to Centurion Trust. The applicant denied that there was any such onus upon him, but conceded that if there were such an onus, then he had not adduced evidence to indicate futility. In those circumstances I reject the applicant's submissions based upon the contention that the Notice was unreasonable due to futility. I should mention that I would distinguish Kutzner, where there was clear evidence that nothing would have been achieved by requiring Mr Kutzner to provide the power of attorney to the second respondent, from the circumstances of the present matter.

CONCLUSION

For the above reasons the application will be dismissed with costs.