Stockbridge v Ogilvie
[1993] FCA 469
•06 JULY 1993
ROBERT EDWARD STOCKBRIDGE; HAROLD CECIL NORRISH; DOROTHY JOYCE CAMPBELL; SUSAN
MAY CALDERBANK; DENNIS JOHN RAYMOND CALDERBANK and ANDREW JOHN WILKES v. JAMIE
GEORGE MICHAEL OGILVIE and AUSTRALIAN SECURITIES COMMISSION
No. WAG3003 of 1993
FED No. 469
Number of pages - 12
Corporations
(1993) 11 ACLC 645
(1993) 10 ACSR 688
(1993) 43 FCR 244
COURT
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J(1)
CATCHWORDS
Corporations - examination of persons - Australian Securities Commission Law s.19 - notices issued pursuant to s.19 - validity of - extent to which notice must disclose nature of matter under investigation - legal representation - direction by inspector excluding particular legal representative - whether valid.
Australian Securities Commission Act 1989 (Cth)
Australian Securities Commission v. Graco (1991) 29 FCR 491
WA Pines Pty Ltd v. Bannerman (1980) 30 ALR 559
Johns v. Connor (1992) 35 FCR 1
Australian Securities Commission v. Bell (1991) 32 FCR 517
Wood v. NCSC (1990) 8 ACLR 462
HEARING
PERTH, 30 March 1993
#DATE 6:7:1993
Counsel for the Applicants: Mr B. Laurie
Solicitors for the Applicants: Mossensons
Counsel for the Respondent: Mr W. Martin
Solicitors for the Respondent: Australian Securities Commission
ORDER
The Court orders that:
1. The application be dismissed.
2. The applicants pay the respondent's costs of the application.
Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
Introduction
FRENCH J On 9 February 1993, notices were issued by the Australian Securities Commission ("ASC") pursuant to s.19 of the ASC Law. The notices were issued to a number of persons connected with a group of companies who had an association with Michael Wayne Childs. The persons to whom the notices were issued are represented by a single firm of solicitors. The officer of the ASC conducting the examination has indicated that he will exclude any representative of the applicants' present solicitors from appearing for any of the applicants at the s.19 examinations. The validity of that direction is challenged as is the validity of the notices.
Factual Background
2. Robert Byrne is a Senior Investigator employed by the ASC. Jamie Ogilvie is a Principal Investigator with the ASC. On 25 November 1992, Mr Byrne made a determination pursuant to s.13(3) of the Australian Securities Commission Act 1989 (Cth) ("ASC Law"). The determination, which was in written form, referred to the examination of an undisclosed witness concerning one Michael Wayne Childs and to documents relating to the following companies:
Vishna Pty Ltd;
M.W. Childs and Associates Pty Ltd; Aardaria Pty Ltd;
Aardwolf Pty Ltd;
Aardwolf Finance Pty Ltd;
Effilon Pty Ltd; and
Karonda Pty Ltd ("the Companies")
The determination went on:
"As a result I have reason to suspect that s.227(2) of the Companies (Western Australia) Code and/or s.229(3) of the Corporations Law has been breached by Michael Wayne Childs between August 1989 which was the date he was released from custody in WA to date. For this reason I have determined it expedient for the Australian Securities Commission to conduct an enquiry into these suspected breaches of the Companies (Western Australia) Code and/or the Corporations Law."
A second determination was made by the same officer on 7 December 1992. It referred to further inquiries and recited a suspicion that Childs had also contravened s.227(2) of the Companies (Western Australia) Code and/or s.229(3) of the Corporations Law in relation to a company called Selin Pty Ltd. The determination was to the effect that it was expedient for the ASC to include Selin Pty Ltd in its inquiries as a company identified with suspected contraventions of the recited provisions of the Code and the Corporations Law.
On 24 and 30 December 1992 Byrne served notices pursuant to s.33 of the ASC Law upon the Companies and a number of persons associated with the Companies as directors, who are the applicants in the present proceedings (save for the first named applicant Robert Edward Stockbridge, who will be referred to below). The notices required the production of the books of the Companies maintained since 29 July 1988. The books specified in the notices included minutes and registers of the Companies, all financial accounting ledgers and journals and contracts, file notes, correspondence and memoranda.
Childs accepted service of the notices to produce documents which were addressed to himself and Mrs Childs and the Companies at his home address at 13 Swinstone Street, Rockingham, which is also the registered office of all of the Companies other than Selin Pty Ltd. At the time of service Childs told Byrne that the Companies' documents were with Robert Stockbridge, an accountant, who was doing "end of year work" in relation to the Companies. He said it would be possible for Stockbridge to bring all of the documents to the Rockingham address. On the same day, Stockbridge telephoned Byrne and told him that Childs had sent him a facsimile concerning the notices to produce documents, that he was an interested party and that he was giving assistance to Childs and that the notices were going to be difficult to satisfy by 30 December 1992 because the documents had to be sorted and collated into date and company sequence. He also told Byrne that Childs intended "going away". He said, however, that the notices could be complied with by 25 January 1993. The relevant documents were in about twenty or twenty two cartons. Company records were also held on a computer at 13 Swinstone Street, Rockingham. He said there was nothing to prevent Byrne from collecting the companies' documents on the return date of 30 December 1992 and that he would telephone him on the morning of that day to let him know when he could go in to collect those documents.
On 29 December 1992, Byrne received a facsimile from Stockbridge asking him to arrange a suitable time for officers of the ASC to attend at 13 Swinstone Street, Rockingham to access the records. The facsimile, however, went on to say that "due to holidays over the coming weeks, this will need to be after 25 January, 1993". No documents were received by the ASC on 30 December 1992 as required by the notices to produce. A further notice was served on the applicant, Harold Cecil Norrish, on 30 December 1992 in the same terms as those already served with the exception that it required the production of the books on 5 January 1993. On 31 December 1992 Byrne delivered two letters in identical terms to Mr and Mrs Childs at Rockingham. He also hand delivered copies of those letters to Stockbridge on the same day. The letters noted that the return date for compliance with the notice was 2pm on 30 December 1992 and that the books specified in the notice had not been delivered. They made reference to s.63(1) of the ASC Law which provides that it is an offence to fail, without reasonable excuse, to comply with a requirement under a notice requiring the production of books. Byrne said that the ASC rejected Stockbridge's submissions that the return date of the notice was impracticable and said that the ASC would commence proceedings to secure production of the specified documents. On 4 January 1993 Byrne received a telephone call from Mark Detata of the firm of solicitors, Mossensons, in which Detata stated that he had received a copy of the notices and that he was assessing his clients' position in relation to them. Detata did not then specify on whose behalf he was acting.
On 5 January 1993 Byrne received a letter dated 29 December 1992 signed by the applicants, Norrish, Campbell, Mr and Mrs Calderbank, Wilkes, and Mrs Childs. The letter was expressed to be a joint response to the "sundry letters of demand" which had been delivered to the recipients of the notices on 24 December 1992. It complained of unprofessional conduct and "Gestapo type tactics" employed by the ASC to harass certain directors and said:
"Thirdly, we are fully aware of Mr Child's past: as are we aware of the attempts to extort money and/or other gains from him by the two complainants that we are aware of. But what puzzles us is the fact that by your own comments and conduct you have found him guilty: yet your extreme tactics of harassment and intimidation of certain Directors indicate that you are attempting to create a bigger issue. The question that arises from this is "In whose interest does this elusive bigger issue lie"?"
The writers of the letter sought information about complaints that had been made to the ASC, and specifically about who had laid the complaints, how many there were and what evidence had been put before the ASC. They asked whether they were under suspicion of any sort of wrong doing. They also asked:
"o) What gives you the right to call Mr Childs a criminal?"
At the bottom of the second page the following appeared:
"After receiving legal advice we will be perfectly happy to comply with whatever demands are approved by our solicitors. In order to expedite matters, we have instructed Micheal (sic) Childs and Robert Stockbridge to:
(a) Seek legal advice on our behalf to see where we stand legally: and to ensure that by complying with your demands we will not be breaking some other laws - such as the client's right to Privacy, etc.
(b) To give you every assistance with whatever the solicitors say you are able to have access to."
The writers said they took offence at the way in which the ASC had revealed Childs' past to certain directors. They accused Byrne of trying to use Childs' past against him in attempts to destroy their confidence and faith in the man and in an attempt to glean some snippet of information that could be used against him. Reference was also made to Byrne's "quest to destroy Mr Childs".
On 7 January 1993, Byrne received a facsimile from Stockbridge stating that the books and records required under the notices would be available for his inspection at 13 Swinstone Street, Rockingham on 13 January and that he would be welcome to make copies of any documents required. On 13 January 1993, Barry Etherington, a Principal Investigator employed by the ASC, attended at the Rockingham house accompanied by Detective Sergeant Ivan White of the Australian Federal Police and an Assistant Investigator, Michael Andrews, employed by the ASC. There they were met by Stockbridge who showed them a box containing secretarial volumes and various other papers relating to the Companies. Stockbridge then said he was under solicitors' instructions to supply the Commission only with certain documents being those described in Items 1 to 8 in the Notices to Produce. When Etherington asked Stockbridge where all of the Companies books and records were, he said he could not answer that question, but he supposed that the solicitor could and that he was only acting on legal advice. Etherington noticed that there was no computer present at the premises. He asked Stockbridge where it was and was told that there had been some mechanical problems with it and that it had been with a computer repairer for a couple of weeks and that he presumed that it was still being fixed. Stockbridge also stated that he had been advised by solicitors that the computer was not part of the Companies' books and records and that he had copies and computer printouts of some of the Companies' records at his home where he was working on tax records. Etherington and Andrews collected certain documents for which a receipt was provided. Those described as "general ledger" were provided with portions cut out and, according to Etherington, it was impossible to make any sense of them. Neither Mr nor Mrs Childs were present during this visit and Stockbridge said he did not know where Childs was.
On 18 January, the ASC wrote to Messrs. Mossensons asserting that only a very few of the documents specified in the notices had been provided to the Commission. It was also alleged that copies of what appeared to be account statements had been heavily edited. The Commission foreshadowed that it would be seeking Court orders for delivery of the documents specified in the notice. Mossensons were asked to confirm whether they had instructions to accept service on behalf of any or all of the Companies, Mr and Mrs Childs and the applicants who had been served with notices to produce. By a letter to the ASC dated 25 January 1993, Mossensons advised that they were prepared to accept service of documents on behalf of the Companies and the applicants (save for Stockbridge who had not been served with any notice). The letter concluded:
"We advise that we are also authorised to accept service on behalf of Mr M.W. Childs as well."
On 5 February 1993, Byrne made a further determination under s.13(3) of the ASC Law that the ASC should investigate suspected breaches of ss.43 and 45 of the Securities Industry (Western Australia) Code or ss.780 and 781 of the Corporations Law, or both, by Michael Wayne Childs between September 1988 and the date of the determination in relation to the affairs of the Companies.
On or about 9 February 1993, Byrne decided that examinations of the applicants should be conducted pursuant to s.19 of the ASC Law. At that time he suspected Childs of having committed the offences referred to in the notices. He was of the opinion that Mossensons were acting for Childs and the applicants. He intended to ask most of the questions at the proposed examination. Byrne communicated his views to Ogilvie who holds a delegation to act as an inspector at examinations pursuant to s.19 of the ASC Law. Ogilvie decided that he would convene examinations of the applicants. On 9 February 1993 he had a conversation with Detata during which he stated that he was aware that Mossensons acted on behalf of the applicants and Childs. He told Detata that "in the interests of ensuring the efficiency of the investigation and to avoid an apparent conflict of interests that Mossensons would have in representing the Applicants at the examinations" he intended to exclude any lawyer from Mossensons from the examination. Ogilvie confirmed his position in a letter dated 9 February 1993. The letter was in the following terms:
"I refer to my telephone conversations with your Mr Detata earlier today.
This letter is to confirm that I have decided, in the interests of the efficiency of the investigation into suspected contraventions of the Companies (Western Australia) Code, the Securities Industry (Western Australia) Code and the Corporations Law in respect of a number of companies associated with Michael Wayne Childs, that the examinees should not have the benefit of legal representation from any lawyer associated with your firm. I have made this decision in the light of my duty to ensure that conflicts of interest are avoided where possible."
Detata denies that at the time of his telephone conversation with Ogilvie Mossensons were aware that Childs was suspected by the ASC of having committed offences. He also denies that if a solicitor from Mossensons were to be present at the examinations of the applicants, that solicitor would also be seeking to protect the interests of Childs. In his affidavit filed in these proceedings, Detata said that Mossensons is only acting for the applicants through Stockbridge. He also said:
"If and when the question of representation for Mr Childs arises, my firm will consider its position in the light of what has transpired to that time."
He denied the suggestion that in the event of a solicitor from Mossensons being present at the examination of any of the applicants, that solicitor would disclose to Childs or any of the other applicants or to any other persons, the questions asked and the answers given or both at the examinations at which the solicitor was present.
On 9 February 1993, notices were issued to each of the applicants in terms which are typified by the notice issued to Stockbridge:
"To: Robert Edward Stockbridge,
32 Prescott Drive,
GOSNELLS WA 6110
WA 6110.
In relation to an investigation of suspected contraventions of section 227(2) of the Companies (Western Australia) Code and/or section 229(3) of the Corporations Law between August 1989 and 7 December 1992 in respect of the companies listed in the schedule marked "A" attached to this notice ("the Companies") and,
suspected contraventions of sections 43 and 45 of the Securities Industry (Western Australia) Code and/or sections 780 and 781 of the Corporations Law between September 1988 and 5 February 1993, you are hereby notified that under subsection 19(2) of the ASC Law you are required:
(a) to appear:
at: 10am
on: Wednesday, 17 February 1993
at: 3rd Floor, 66 St George's Terrace Perth before: Jamie George Michael Ogilvie for an examination on oath or affirmation and to answer questions put to you in relation to the investigation; and
(b) to give the Australian Securities Commission all reasonable assistance in connection with the investigation. Please note the provisions of subsection 23(1) of the ASC Law (relating to legal representation) and section 68 of the ASC Law (relating to self incrimination). The effect of those provisions is set out in the attachment to this form.
Dated this 9th day of February 1993 Australian Securities Commission by its delegate:"
The schedule to the notice set out the names of the Companies.
The Present Proceedings
11. By an application filed on 15 February 1993, the applicants seek declarations in the following terms:
"1. A declaration that Notices issued by the First Respondent pursuant to s.19 of the Australian Securities Commission Law requiring the Applicants to attend an examination before the First Respondent are invalid.
2. The First Respondent be restrained from taking any further steps upon or in relation to the Notices.
3. A declaration that the decision of the First Respondent to exclude Mossensons from representing the Applicants at an examination pursuant to s.19 of the Australian Securities Commission Law be set aside.
4. The Respondents pay the Applicants' costs."
The Contentions
12. By way of attack upon the validity of the notices the applicants say that s.19(3) of the ASC Law requires a notice, inter alia, to state the general nature of the matter under investigation. The word "matter" as used in the section comprehends the factual circumstances attendant upon that conduct. It was submitted that none of the notices in this case makes any reference to the person whose conduct is being investigated. The identity of such a person is an essential element of the contravention under investigation. The omission to make reference to the suspected contravenors is said to constitute a failure to comply with s.19(3).
In reply the ASC points to the nature of its investigative function. It submits that it can undertake an investigation provided that it holds the belief that a contravention may have occurred and that the investigation is bona fide for the purposes of ascertaining what were the facts of the matter and whether a prosecution should be commenced. It is not necessary for the purposes of convening an examination that any of the applicants should have information as to the totality of the matter under investigation. The ASC is only required to disclose in the notice, the "general nature" of the matter. A s.19 notice adequately meets that requirement if it refers to possible offences by reference to sections and states a temporal limit to the investigation. The notices in the present case do this. The fact that they do not identify the name of suspects does not mean that they are invalid. Policy considerations militating against such a requirement are also advanced.
On the question of legal representation, the applicants say that they have a right to such representation which is derived from s.23(1) of the ASC Law and that right is not likely to be set aside. In normal circumstances they should be able to chose their own representatives. If the ASC requires that an applicant not be represented by his or her usual solicitor, it has an obligation to make a clear statement of its grounds for so requiring. It has failed to do so in the present case.
The ASC submits that although s.23 permits a person examined pursuant to s.19 to have legal representation, s.22 empowers the inspector to exclude a particular lawyer from an examination. An inspector, it is submitted, may exclude a particular lawyer if he has a belief, in good faith on reasonable grounds, that the presence of that lawyer will or is likely to prejudice the investigation. The ASC asserts that Ogilvie had and still has that belief in relation to the present investigation. The reasonable grounds for that belief are said to be:
(a) That Mossensons intend to represent all of the applicants at the examinations and they also represent Childs who may be prosecuted for having committed the offences identified in the notices.
(b) A lawyer from Mossensons present at the examinations would also be seeking to protect Childs' interests at each examination as well as the interests of each person being examined.
(c) A person being examined would feel ill at ease in answering questions in the presence of a solicitor also acting for Childs and this might affect answers to questions put during the examination.
(d) Examinations are to take place in private to ensure that questions asked and answers given remain confidential between the ASC and the examinee.
(e) If any one of the applicants has knowledge of questions asked and answers given in the previous examination this is likely to impinge on the veracity of that person's own answers to questions and thereby prejudice the investigation.
(f) Knowledge on the part of Childs of questions asked and answers given in the examination will prejudice the investigation by impinging on the veracity of statements he might make to the ASC.
(g) Mossensons, being retained by the applicants and Childs, have a duty to use all information available to them in furthering the interests of their clients and would be obliged to use information obtained in the examination to further the interests of the other applicants appearing at subsequent examinations and the interests of Mr Childs.
(h) Upon the giving of a direction that questions asked and answers given during the examination not be disclosed, a lawyer from Mossensons would have a duty to the Commission not to disclose information gathered during the examination which would conflict with that lawyer's duty to the applicants and Childs.
(i) The applicants would not suffer any prejudice being represented by lawyers from separate firms of solicitors, as the nature of the examinations do not require common preparation and there is adequate opportunity for separate representation.
Statutory Framework
16. Part 3 of the ASC Law deals with investigations and information- gathering. Section 13 in Division 1 of Part 3 provides:
"13(1) The Commission may make such investigation as it thinks expedient for the due administration of a national scheme law of this jurisdiction where it has reason to suspect that there may have been committed:
(a) a contravention of a national scheme law; or
(b) a contravention of a law of the Commonwealth or of a State or Territory, being a contravention that:
(i) concerns the management or affairs of a body corporate; or
(ii) involves fraud or dishonesty and relates to a body corporate, securities or futures contracts. .
.
.
13(3) Where the Commission has reason to suspect that a contravention of a relevant previous law of this jurisdiction may have been committed, the Commission may make such investigation as it thinks appropriate. 13(4) Neither of subsections (1) and (3) limits the generality of the other."
Division 2 of Part 3 relates to the examination of persons and s.19, under which the notices the subject of this action were issued, provides:
"19(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. 19(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. 19(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."
Section 20 designates the person conducting the examination as the "inspector" and the person subject to examination as the "examinee". Section 21 empowers an inspector to examine an examinee on oath or affirmation and to require the examinee to answer a question put at the examination that is relevant to a matter that the ASC is investigating, or is to investigate, under Division 1. Section 22(1) provides for examinations to take place in private and empowers the inspector to give directions about who may be present during the examination or during a part of it. Section 22(2) makes it an offence for a person to be present at an examination unless that person is the inspector, the examinee, a member of the Commission, a staff member approved by the Commission or a person entitled to be present by virtue of a direction under sub-s.22(1) or by virtue of sub-s.23(1).
Section 23 which deals with legal representation at an examination provides:
"23(1) The examinee's lawyer may be present at the examination and may, at such times during it as the inspector determines:
(a) address the inspector; and
(b) examine the examinee;
about matters about which the inspector has examined the examinee. 23(2) If, in the inspector's opinion, a person is trying to obstruct the examination by exercising rights under subsection (1), the inspector may require the person to stop addressing the inspector, or examining the examinee, as the case requires."
There is provision for a record to be taken of statements made at the examination (s.24(1)) and for statements taken at the examination to be reduced to writing and signed by the examinee (24(2)). A copy of the written record of the examination may be given to a person's lawyer if the lawyer satisfies the Commission that the person is carrying on or is contemplating in good faith, a proceeding in respect of a matter to which the examination related.
The Validity of the Notices
18. Sub-section 19(3) read with s.19(1) of the ASC Law, requires that a notice issued under that section "state the general nature of the matter" in respect of which the Commission suspects or believes on reasonable grounds that the examinee can give relevant information. In their statutory context, the words "general nature of the matter" require no more than a brief and comprehensive description. They do not prescribe particularity - Australian Securities Commission v. Graco (1991) 29 FCR 491 at 495 (Jenkinson J). In that case Jenkinson J saw the requirement as reflecting a legislative intention that the person served with a notice under s.19 be forewarned of circumstances likely to make it desirable that he consider in advance of the examination whether to take legal advice and whether to have legal representation at the hearing (at 495). The word "matter" in this context is used in the sense of "a subject, as of discussion or debate or for consideration or investigation". It does not require a statement of the matter with the degree of precision necessary to enable an examinee to make a judgment of the relevance of the question which he or she is required to answer under s.21(3). It is to be distinguished from the sense in which the word is used in s.155 of the Trade Practices Act 1974 as explained in WA Pines Pty Ltd v. Bannerman (1980) 30 ALR 559 at 565-566. There it appears in a narrower statutory context limited to matters which constitute or may constitute a contravention.
In Johns v. Connor (1992) 35 FCR 1 at 12, Lockhart J agreed in substance with what Jenkinson J had said concerning the sense of the word "matter" in s.19. His Honour also said:
"The language of s.19(1) and (3) indicate to me that the "matter" to which they are referring is the subject of investigation by the ASC; and that is defined by s.13(1) as an investigation by the ASC as to whether a contravention of the kind to which the section is directed may have been committed."
His Honour, however, considered that in Graco, Jenkinson J had intended to confine his observations about the sufficiency of the notices in issue to the facts of that case. Those observations were in response to a submission by counsel that in order to comply with s.19(3)(a) the notice must describe the "general nature of the matter" sufficiently to enable the examinee to determine the relevance of questions put in the examination pursuant to s.21(3). Lockhart J rejected a contention that Graco is authority for the proposition that a description of a matter in a s.19 notice by reference to the affairs of a corporation during a defined time period would be sufficient.
In my opinion, whatever the level of generality which will comply with s.19(3), there is no requirement implicit in the section as expounded in the authorities to which I have referred which would require identification of the person or persons suspected of any contravention under investigation when a notice issues. The matter under inquiry may involve the commission of a contravention, in respect of which the identity of the contravenors is uncertain. In my opinion, the applicants fail on this limb of their argument.
Exclusion of a Particular Legal Representative
21. By virtue of s.23 an examinee's lawyer may be present at the examination and, at times determined by the inspector, may address the inspector and examine the examinee about matters concerning which the inspector has examined the examinee. That right is subject to the express qualification in s.23(2) whereby the inspector may require a person acting obstructively in the exercise of the right to stop addressing the inspector or examining the examinee as the case may be. It is also subject to the general power conferred on the inspector by s.22(1) to give directions about who may be present during the examination or part of it. In the exercise of that power the inspector may direct that a particular lawyer not be present during the examination or part of it - Australian Securities Commission v. Bell (1991) 32 FCR 517 at 521 (Lockhart J), 531-532 (Sheppard J) and 532-533 (Burchett J). That power must of course, as with any statutory power, be exercised for legitimate statutory purposes. One example of circumstances in which it might properly be exercised was given by Lockhart J in Australian Securities Commission v. Bell at 520:
"The possible examples are numerous; but if, for example, a lawyer has been personally involved in the affairs of a company being investigated under Div 2 and there is a real risk of his having committed offences, it would plainly be inappropriate and improper for him to seek to represent a witness himself, thereby enabling him to gain insight into the substratum of the investigation which he could use for his own advantage."
Where one lawyer seeks to represent a number of examinees in the same investigation, it may be thought that there is a risk that without consciously intending any impropriety that lawyer might divulge to one examinee what has passed in the examination of another. The extension of a restriction to all members of a given firm may be controversial - see Wood v. NCSC (1990) 8 ACLR 462. However there are matters of judgment and assessment involved. It is of course, not the role of the ASC to supervise the lawyer-client relationships of those who appear before it in s.19 examinations. It is only where a conflict of interest has some actual or potential impact on the investigative process that a direction based on such a concern would be within power.
In this case it is plain that the ASC is concerned to enquire into matters relating to the conduct of Childs in the affairs of the Companies. The applicants are, for the most part, strongly supportive of Childs as evidenced by their letter of 5 January. In that letter it was also said that they had instructed Childs and Stockbridge to seek legal advice about their position and to give the ASC every assistance. The possibility exists that in such an adversarial atmosphere some element of the advantages derived from independent interview might be lost if each examinee were to be represented by the same lawyer. I do not consider that a "Chinese wall" is an answer to that concern. There is also, in this case, the clear possibility of an ongoing connection between Mossensons and Childs. The basis upon which the ASC inspector directed the exclusion of Mossensons was not merely speculative. It came within the range of a fair discretionary judgment and, in my opinion, should not be disturbed.
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