VCA and Ors and Australian Prudential Regulation Authority - [2006] AATA 873

CATCHWORDS – PRACTICE AND PROCEDURE – whether records of examination transcript required to be lodged under s 37 of the Administrative Appeals Tribunal Act 1975 – adequacy of Tribunal documents – privilege against self-incrimination – privilege against exposure to penalty – admissibility of answers given under compulsion – whether privileges abrogated by Superannuation Industry (Supervision) Act 1993

Administrative Appeals Tribunal Act 1975 ss 33, 37, 38, 39 and 43
Administrative Decisions (Judicial Review) Act 1977 s 13
Australian Securities and Commission Act 1989
Bankruptcy Act 1966 s 69
Migration Act 1958 ss 500, 501 and 501G
Police Regulation (Allegations of Misconduct) Act 1978 (NSW) s 59

Royal Commissions Act 1902 ss 6A and 6DD

Superannuation Industry (Supervision) Act 1993 ss 3, 10, 29, 55, 62, 111, 120A, 121, 253, 254, 255, 256, 257, 263, 265, 269, 270, 272, 277, 278, 280, 281, 282, 284, 285, 286, 287, 290, 291, 298 and 298A
Superannuation Industry (Supervision) Bill 1993 cll 282 and 286
Trade Practices Act 1974 ss 155 and 177

Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412
Australian Competition and Consumer Commission v FFE Building Services (2003) 130 FCR 37

Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd [2006] VSC 192
Australian Securities Commission v Kippe (1996) 67 FCR 499; 137 ALR 423
Baker v Campbell (1983) 153 CLR 52; 49 ALR 385

British American Tobacco Australia Services v Cowell (2002) 7 VR 524

Broussard v Minister for Immigration Local Government and Ethnic Affairs (1989) 21 FCR 472; 98 ALR 180

cf Saffron v Federal Commissioner of Taxation (1992) 109 ALR 695

Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598

Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1984) 156 CLR 385; 57 ALR 751

Controlled Consultants v Commissioner for Corporate Affairs [1984] VR 137

Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; 192 ALR 561

Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60
Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 2001 ATC 4343
Goldie v Minister for Immigration and Multicultural Affairs (2001) 111 FCR 378; 33 AAR 446
Hall v Minister for Immigration and Multicultural Affairs (2000) 97 FCR 387, 59 ALD 458

Jackson v Gamble [1983] 1 VR 522

McDonald v Director-General of Social Security (1984) 6 ALD 6

Mees v David Kemp in his capacity as Minister for the Environment and Heritage [2005] FCAFC 5
National Employer’s Mutual General Insurance Association v Waind Hill [1978] 1 NSWLR 372

Police Service Board v Morris & Martin (1985) 156 CLR 397; 58 ALR 1
Project Blue Sky Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490
Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; 45 ALR 609
R v Boyes (1861) 1 B&S 311
R v Saleam (1989) 16 NSWLR 14
R v Zion [1986] VR 609

Re Hitek Holdings Pty Ltd and Export Development Grants Board (1985) 8 ALN N156
Re Kippe and Australian Securities Commission (1995) 19 ACSR 296
Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368
Re Palmer and Minister for the Capital Territory (1978) 1 ALD 183; 23 ALR 196
Re VBN and Australian Prudential Regulation Authority [2005] AATA 1060
Re Wertheim and Department of Health (1984) 7 ALD 121

Reid v Howard (1995) 184 CLR 1; 131 ALR 609; 83 A Crim R 288

Rich v Australian Securities and Investments Commission (2004) 220 CLR 129; 209 ALR 271

Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] 1 All ER 434
Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] AC 547
Rochfort v Trade Practices Commission (1982) 43 ALR 659
Sorby v The Commonwealth (1983) 152 CLR 281; 46 ALR 237

Sullivan v Department of Transport (1978) 20 ALR 323; 1 ALD 383

DECISION AND REASONS FOR DECISION [2006] AATA 873

ADMINISTRATIVE APPEALS TRIBUNAL     )
  )  V2006/114
GENERAL ADMINISTRATIVE DIVISION     )

Re VCA

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
V2006/144

Re VCD

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
V2006/145

Re VCC

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent

DECISION

Tribunal:                   Deputy President S A Forgie
Date:  12 October 2006
Place:  Melbourne

Decision:The Tribunal:
1.direct that in the proceedings relating to each of the applicants, the respondent is required to lodge as part of the documents lodged under s 37(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act):
(1)the record of those parts of the examination of that applicant that:
(a) do not meet both of the criteria specified in s 287(2) of the Superannuation Industry (Supervision) Act 1993 (SIS Act); and
(b) that are relevant to the review of the reviewable decision; and
(2)the records of those parts of the examinations of the other two applicants that are relevant to the review of the reviewable decision; and

2.decline to order the respondent to lodge further statements of reasons under s 38(1) of the AAT Act; and
3.direct, by dates to be determined:
(1)each of the applicants lodge his Statement of Facts and Contentions before the respondent;
(2)each of the applicants lodge his witness statements, reports and other supporting material before the respondent; and
(3)each of the applicants have an opportunity to lodge any Statement of Facts and Contentions and any witness statements, reports and other supporting material in reply to those of the respondent.
S A FORGIE
Deputy President

ADMINISTRATIVE APPEALS TRIBUNAL     )
  )  V2006/114
GENERAL ADMINISTRATIVE DIVISION     )

Re VCA

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
V2006/144

Re VCD

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
V2006/145

Re VCC

Applicant

AndAUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent

DECISION

Tribunal:                   Deputy President S A Forgie
Date:  27 October 2006
Place:  Melbourne

CORRIGENDUM TO DECISION [2006] AATA 873

The Tribunal amends its decision and reasons for decision published on 12 October 2006 as follows:

Decision and reasons for decision
Paragraph 64, line 5
Delete the word “inadmissible” and insert “admissible”.
S A FORGIE
Deputy President

REASONS FOR DECISION

The Australian Prudential Regulation Authority (APRA) has disqualified VCA, VCC and VCD under the SIS Act under s 120A. That means that none can be or act as the trustee or a responsible officer of a superannuation entity.[1] It has disqualified them under s 120A(2) on the basis that they were responsible officers of a superannuation fund (Fund) and the trustee of that fund has contravened the SIS Act. In relation to VCC, it has also disqualified him under s120A(3) on the basis that it is satisfied he is not a fit an proper person to be a trustee or responsible officer. The parties have agreed that their cases should be heard concurrently. As APRA’s reviewable decisions in relation to each all arise out of similar or related circumstances, I agree that this is the correct approach.

[1] ss 121(1) and (2)

An initial issue that has arisen for resolution in this case concerns the documents APRA is required to lodge under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act) (T documents). Should APRA include among those documents, records of examinations, which were conducted under the SIS Act and in relation to which the examinees claimed “privilege”? I have decided that those records should not be included in the T documents of an applicant to the extent that they contain statements of that applicant at the examination in relation to which he claimed that they might tend to incriminate him or make him liable to a penalty and the statements might in fact tend to incriminate him or make him liable to a penalty. They should include the remaining statements of that applicant and of the other applicants to the extent that they are relevant to the review of the decision.

A second preliminary issue relates to the order in which the parties should lodge their Statement of Facts and Contentions (SFC). At the hearing of an application to review a decision, or at least where both parties are legally represented, an applicant’s case is usually presented before the respondent, or decision-maker, is asked to do so. On 5 April 2006, VCA, VCC and VCD submitted that the Tribunal’s normal practice would be unfair to them and asked that APRA be required to present its case first. I decided on that day that the normal practice should be followed. The applicants now renew their submission that APRA should file their SFCs before they do. APRA has submitted that the usual practice should be followed and it should file its SFC after receiving those of the applicants. I have decided that the normal practice should be maintained.

SHOULD TRANSCRIPTS OF EXAMINATIONS BE INCLUDED IN THE T DOCUMENTS?

Background

Using its powers under Division 4 of Part 25 of the SIS Act, APRA investigated the affairs of a superannuation fund (the Fund). In doing so, it appointed an inspector under the SIS Act. The inspector required each of the applicants to appear for examination concerning matters relevant to that investigation.[2] VCA was examined on 15, 16 and 17 February 2005, VCC on 22 February 2005 and 8 March 2005 and VCD on 1 and 2 February 2005.
[2] s 270(d)

During the course of the examinations, the inspector told each of the applicants that he was not “… disclose to any person the questions asked of you during this examination for a period of twelve months following this examination”. Counsel who appeared for each of the applicants were also each told: “… you do not directly or indirectly disclose to any person the questions asked or the information or documents provided to or by the examinee during this examination or the answers given to those questions in a manner which discloses such questions, information or directions”[3]. Collectively, the two sets of directions will be referred to as the “Examination Directions”. During their examinations, VCA, VCC and VCE each made a claim of the sort specified in s 287(2) of the SIS Act before answering each question asked of them. They signed written records of their examinations.
[3] Respondent’s Submissions on the Use of Examination Transcripts; [3]

APRA sent notices to each of VCA, VCC and VCD asking them to show cause as to why he should not be disqualified from acting as a trustee, investment manager or custodian of a regulated superannuation entity. These are referred to as Show Cause Notices. Such a notice was sent to VCA on 4 August 2005, to VCC on 12 September 2005 and to VCD on 30 August 2005. Each of the Show Cause Notices set out APRA’s preliminary findings of fact and the evidence on which those preliminary findings were made. Each Show Cause Notice referred to statements made during the examinations of the applicants other than the applicant to whom the notice was addressed. It did not refer to statements made during an examination by the applicant to whom the notice was addressed.

Each of the applicants made written submissions responding to the Show Cause Notice addressed to him. In those submissions, each applicant referred to the record of his own examination and parts of the records of the examinations of the other two applicants but not those parts of the examinations to which APRA had referred.

The legislative framework

Part 25 of the SIS Act is concerned with monitoring and investigating superannuation entities. Its objects are:
“(a) to ensure that the Regulator has sufficient power to monitor superannuation entities (Division 2); and
(b)to empower the Regulator to require the trustee of a superannuation entity to appoint an individual, or a committee, to investigate the financial position of the entity (Division 3); and
(c)to authorise the Regulator to conduct an investigation of the whole or a part of the affairs of a superannuation entity (Divisions 4, 5, 6, 7, 8 and 9); and
(d)to authorise the Regulator to accept written undertakings and to apply to the Court for an order remedying breaches of such undertakings.”[4]
[4] s 253

To that end, a Regulator such as APRA[5] is given various powers to obtain information. Division 2 provides that a superannuation entity must give information as prescribed by the Regulations and must produce books as required.[6] A person authorised under s 298A[7] may enter premises to inspect and copy or take extracts from books in accordance with s 256. APRA may require the trustee of a superannuation entity to appoint an individual or a committee of individuals to investigate that entity’s financial position, or a part of it, for a period and to report on that investigation.[8]
[5] s 10(1)
[6] ss 254 and 255
[7] s 10(1)
[8] s 257

APRA may itself investigate a superannuation entity if it appears to it that there has been a contravention of the SIS Act, the financial position of a superannuation entity may be unsatisfactory or the trustee of a regulated superannuation fund or of an approved deposit fund has refused or failed to give effect to a determination of the Superannuation Complaints Tribunal.[9] It may appoint a member of staff to be an inspector for the purposes of conducting such an investigation.[10] An inspector may require the production of books[11] and may require a certain persons to give all reasonable assistance in connection with an investigation and/or appear for examination concerning the matters relevant to the investigation.[12] Those certain persons are those who have been relevant persons in relation to a superannuation entity whose affairs are under investigation or persons whom the inspector, on reasonable grounds, suspects or believes can give information relevant to the investigation.[13] In certain circumstances, a magistrate may issue a warrant to enter and search premises and take possession of books.[14]
[9] s 263
[10] s 265(1)
[11] s 269
[12] ss 270 (c) and (d)
[13] ss 270(a) and (b). A “relevant person” is defined in s 10(1) to mean an individual if the trustee is or includes an individual, a responsible officer if the trustee is or includes a body corporate, an auditor or actuary of the fund or trust and a person who is a custodian in relation to the fund or trust.
[14] s 272

If an inspector has given a person a written notice under s 270(d) to appear for examination, Division 5 of Part 25 applies. An inspector may examine a person on oath or affirmation and, for that purpose, may require the person to take an oath or make an affirmation and administer them to the person.[15] The oath taken or affirmation made is to the effect that the statements made by the person during the examination will be true.[16] The person examined is referred to in Division 5 as the “examinee’. Section 277(3) provides that:
“The inspector may require the examinee to answer a question that is put to the examinee at the examination and is relevant to a matter that the Regulator is investigating, or is to investigate.”
[15] s 277(1)
[16] s 277(2)

The examination is to take place in private and the inspector may give directions about who may be present during it, or during part of it.[17] Unless a person is entitled to be present because the inspector has made such a direction[18] or is the lawyer of the person being examined,[19] a person may not attend the examination unless the inspector, the examinee or a member of staff of, in this case, APRA and authorised by APRA to attend.[20] The inspector must cause a written record of the examination to be made of statements made at the examination and may require the examinee to sign it after reading it or having it read to that person.[21] The inspector must give the examinee a copy of the written record but may do so subject to conditions.[22] The examinee to whom the copy is given and any other person, who has possession, custody or control of the copy, must comply.[23]
[17] s 278(1)
[18] s 278(2)(c)(i)
[19] s 278(2)(c)(ii) and see also s 279
[20] ss 278(2)(a) and (b)
[21] s 280(1) and (2)
[22] s 280(3)
[23] s 282(1)

In certain circumstances, a copy of the written record may be given to other persons. That may occur if a person’s lawyer satisfies APRA that the person is carrying on, or is contemplating in good faith, a proceeding in respect of the matter to which the examination related. In that case, APRA may give the person’s lawyer a copy of a written record of the examination, a copy of that record together with a copy of any related book.[24] Once given a copy, the person may not use it except in connection with preparing, beginning or carrying on, or in the course of, a proceeding.[25]
[24] s 281(1)
[25] s 281(2)

Division 6 of Part 25 sets out the obligation of an inspector to prepare a report about the investigation. The report must set out the inspector’s findings about the matters investigated and the evidence on which those findings are based.[26] A copy of it must be given to the trustee of the superannuation entity investigated.[27] If the report, or part of it, relates to the affairs of another person to a material extent, APRA may give a copy of the report, or a part of it, to that person.[28]
[26] ss 284(1) and (2)
[27] s 284(3)(a)
[28] s 284(3)(b)

Division 7 is headed “Offences”. A person must not, without reasonable excuse, intentionally or recklessly refuse or fail to comply with a requirement of, among others, the inspector given under the Act.[29] It is not a reasonable excuse for a person to refuse or fail to give information, sign a record or produce a book in accordance with a requirement made of that 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.”[30]
[29] s 285
[30] s 287(1)

In the circumstances prescribed in s 287(2), s 287(3) provides that:
“… none of the following:
(a)the statement;
(b)the fact that the person has signed the record;
is admissible in evidence against the person in a criminal proceeding or a proceeding for the imposition of a penalty.”[31]

It must be noted, however, that s 287(3):

“… does not apply to admissibility in proceedings in respect of:
(a)in the case of the making of a statement – the falsity of the statement; or
(b)in the case of the signing of a record – the falsity of any statement contained in the record.”

[31] s 287(3)

The circumstances in which s 287(3) prevails arise if:
“(a) before:
(i)making an oral statement giving information; or
(ii)signing a record;
as required under this Part, a person 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 liable to a penalty.”[32]
[32] s 287(2) although it does not generally apply to person that is a body corporate if the claim relates to a requirement: s 287(2A).

Division 8 of Part 25 is headed “Evidentiary use of certain material”. Section 290(1) provides that:
“Subject to this section, a statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding.”

That is so even if the proceeding against the person is heard with a proceeding against another person.

The general principle stated in s 290(1) is qualified by four exceptions. Each prescribes the circumstances in which a statement will not be admissible. One applies if the statement is not relevant to the proceeding and the person objects to the admission of evidence of the statement.[33] A second applies if the statement is not admissible if it is qualified or explained by some other statement made at the examination, the evidence of the other statement is not tendered in the proceeding and the person objects to the admission of evidence of the subject statement.[34] A third applies if it discloses matter in respect of which the person could claim legal professional privilege and the person objects to the admission of evidence of the statement. It is the fourth with which I am concerned in this case. It is found in s 290(2) and provides that:
“The statement is not admissible if:
(a)the proceeding is:
(i)a criminal proceeding; or
(ii)a proceeding for the imposition of a penalty;
other than a proceeding in respect of the falsity of the statement; and
(b)the person is an individual who, before making the statement, claimed that it might tend to incriminate him or her or make him or her liable to a penalty.”
[33] s 290(3)
[34] s 290(4)

Division 9, which is headed “Miscellaneous”, provides that the Regulator may begin or carry on a proceeding for the recovery of damages for fraud, negligence, default, breach of duty, or other misconduct, committed in connection with a matter to which the investigation or examination related or for the recovery of property if it appears to the Regulator to be in the public interest to do so.[35]
[35] s 298

The submissions

The dispute between the parties arising from ss 287 and 290 has two aspects. The first is whether the mere claim that the statement might tend to incriminate an applicant or make him liable to a penalty is sufficient to render the examination inadmissible in proceedings reviewing APRA’s decision to disqualify the person making the claim. The second is whether such a claim made by one applicant can render a statement inadmissible in proceedings reviewing APRA’s decision to disqualify the other applicants.

On behalf of APRA, Ms McLeod SC with Mr Lewis of counsel contended that an answer given at an examination is inadmissible in a proceeding for the imposition of a penalty if the applicants both claimed “privilege” before giving the answer and the answer might in fact tend to incriminate the person or make the person liable to a penalty within the meaning of s 287(2). Relying on Sorby v The Commonwealth,[36] (Sorby) Ms McLeod submitted that an answer might have this effect if it is directly incriminatory or if it leads to the discovery of real evidence of an incriminating character. The risk of incrimination must be real and not fanciful.[37] The applicants carry the burden of establishing that there are reasonable grounds for believing that the answer will have the effect of tending to incriminate him.[38]
[36] (1983) 152 CLR 281; 46 ALR 237 at 310; 259
[37] Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] 1 All ER 434 at 457
[38] Jackson v Gamble [1983] 1 VR 522 at 555-556 per Young CJ and see also Controlled Consultants v Commissioner for Corporate Affairs [1984] VR 137 at 151-2

Ms McLeod also submitted that the privilege against self-incrimination may be waived. In this case, the applicants had waived their privilege in the course of making submissions to APRA in response to the Show Cause Notices and in exhibiting passages from the examinations to affidavits in support of their stay applications.

In relation to the second aspect of the dispute between the parties, Ms McLeod submitted that privilege claimed by the applicants is a privilege against self-incrimination. Therefore, it can protect only the examinee and not other persons. She drew support from Rochfort v Trade Practices Commission[39] and Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd.[40] Consequently, APRA may tender and refer to the transcript of the examination of any one applicant in the proceedings relating to the other applicants.
[39] (1982) 43 ALR 659 at 666-670
[40] [2006] VSC 192 at [94]

In the interests of fairness and in order to ensure that the Tribunal is fully informed of the applicants’ evidence when making its decision, Ms McLeod submitted, it ought to have regard to the entirety of the records of their examination. In the alternative, the applicants have waived privilege over all of those parts of the records relied on by the applicants in rebutting APRA’s contentions regarding their conduct.

On behalf of VCA and VCD, Mr Anderson SC with Mr Broadfoot of counsel submitted that any evidence of statements made by them in their examinations is inadmissible against them in these proceedings. If not inadmissible in their entirety, those portions in respect of which privilege claims were made at the examinations may not be relied upon. To the extent that APRA wishes to rely upon the applicants’ records of examination at the hearing of their applications for review, they are, a fortiori, evidence of statements which might make them liable to a penalty or tend to incriminate them. They are entirely inadmissible under s 287(3). Apart from s 287(3), Mr Anderson submitted, the records are inadmissible without its being necessary to determine whether or not they might in fact tend to incriminate or expose the applicants to penalties. That is the effect of s 290(2).

At this stage of the proceedings, Mr Anderson submitted, APRA should not lodge the records of the examinations in the Tribunal when it lodges the T documents. This avoids the possibility of the Tribunal’s reading material that it subsequently decides is privileged and of its making findings on an improper basis if that is the case.[41]
[41] Reference was made to the judgment of the Victorian Court of Appeal in British American Tobacco Australia Services v Cowell (2002) 7 VR 524 at 569

On behalf of VCC, Mr Quinn of counsel made similar submissions in relation to ss 287(3) and 290(2). APRA has already relied on VCC’s examination as the basis for the disqualification decision it made in relation to him. That it has done so demonstrates that the danger of the imposition of a penalty on VCC is “real and appreciable” and not “imaginary and insubstantial” or “so improbable that no reasonable man would suffer it to influence his conduct”.[42] This is not a case in which the extent of the risk of the imposition of a penalty is not known at the time that the privilege is invoked or where there has been some undertaking given by the authorities not to impose a penalty.[43]
[42] Outline of Submissions on behalf of VCC at [14] Mr Quinn referred to R v Boyes (1861) 1 B&S 311 at 330; Rio Tinto Zinc Corp v Westinghouse Electric Corp [1978] AC 547 at 628
[43] cf Saffron v Federal Commissioner of Taxation (1992) 109 ALR 695

Mr Quinn submitted that, in so far as VCC is not protected by the statutory protections in ss 287(3) and 290(2), he would be entitled to rely on the common law privilege as an alternative basis for the inadmissibility of statements used in evidence against him. That privilege continues to exist despite the statutory provisions as the SIS Act does not abrogate it either expressly or by necessary implication. This is consistent with Mr Anderson’s submissions on behalf of VCA and VCD.

The privilege against self-incrimination

As the parties both referred to the privilege against self-incrimination, I will look briefly at the nature and extent of that privilege. In view of the fact that the Tribunal is not bound by the rules of evidence,[44] it is to be noted that the privilege against self-incrimination is not simply a rule of evidence. As Dawson J said in Baker v Campbell:[45]
“… the majority in Pyneboard Pty Ltd v Trade Practices Commission [(1983) 152 CLR 328] … was not prepared to hold that the privilege against self-incrimination was inherently incapable of the application in non-judicial proceedings, having regard to the view that the rule of the common law nemo tenetur seipsum accusare^[[46]] is too fundamental a bulwark of liberty to be categorized simply as a rule of evidence …”[47]
[44] AAT Act, s 33(1)(c)
[45] (1983) 153 CLR 52; 49 ALR 385
[46] This expression means “No one is bound to accuse himself [or herself].” (Maxims of Law from Bouvier’s Law Dictionary, 1856
[47] (1983) 153 CLR 52; 49 ALR 385 at 127; 442-443 and see also the judgment of Mason, Wilson and Dawson JJ in Sorby v The Commonwealth (1983) 152 CLR 281; 46 ALR 237 at 309; 258.

The privilege against self-incrimination is regarded as a fundamental part of the fabric of the administration of justice. In Reid v Howard,[48] Toohey, Gaudron, McHugh and Gummow JJ explained it in this way:
“There is simply no scope for an exception to the privilege, other than by statute. At common law, it is necessarily of general application – a universal right which, as Murphy J pointed out in Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 346, protects the innocent and the guilty. There is no basis for excepting any class or category of person whether by reference to legal status, legal relationship or, even, the offence in which he or she might be incriminated because, as already indicated, its purpose is the completely general purpose of protecting against ‘the peril and possibility of being convicted as a criminal’ Lamb v Munster (1882) 10 QBD 110 at 111. For the same reason, there can be no exception in civil proceedings, whether generally or of one kind or another. Moreover, it would be anomalous to allow that a person could refuse to answer questions in criminal proceedings or before investigative bodies where the privilege has not been abrogated if that person could be compelled to answer interrogatories or otherwise make disclosure with respect to the same matter in civil proceedings.”[49]
[48] (1995) 184 CLR 1; 131 ALR 609; 83 A Crim R 288
[49] (1995) 184 CLR 1; 131 ALR 609; 83 A Crim R 288 at 14; 618; 297-298

In Accident Insurance Mutual Holdings Ltd v McFadden,[50] Kirby P set out eight principles relating to the privilege. I will set out only the essential aspects of those principles and omitting the authorities to which his Honour referred:
[50] (1993) 31 NSWLR 412
“1.      The principle that a person is exempt from an obligation to incriminate himself or herself is fundamental to a civilised legal system …
2.        … The principle is rooted deep in the resistance of our system of law to obliging a person to convict himself or herself by that person’s own testimony … Such a person has ordinarily a right to remain silent in the face of an accusation of a crime or wrongdoing. To the extent that the privilege against self-incrimination is eroded, so are attributes of freedom conventionally regarded as important …
3.        Often the suggested derogation from the privilege against self-incrimination arises from the terms of the legislation. … Nevertheless, statutes will be construed, unless their language is clear, so as to prevent or diminish infringement of the privilege …
The test traditionally applied is whether the person claiming the privilege genuinely and reasonably apprehends a danger from being compelled to answer the question objected to …
4.        A mere statement by a witness that the answer may tend to incriminate that witness is not sufficient to found the claim for the privilege against self-incrimination. The Court must be satisfied that there is reasonable ground and that the objection is taken bona fide: Jackson v Gamble [1983] 1 VR 552 at 556. The test applied is whether there is a ‘real and appreciable risk of criminal proceedings …being taken against’ the witness…: see Rank Film Distributors Ltd v Video Information Centre (A Firm) [1982] AC 380 at 441. A remote or slight possibility of legal peril to a witness may not, in a particular case, be sufficient to invoke the privilege and to sustain a refusal to answer a question … or if earlier dealt with by law upon the subject said to give rise to the apprehension of jeopardy. If criminal proceedings have been concluded (either by acquittal or by conviction and sentence) a person can stand in no further jeopardy of punishment upon the precise matters already dealt with …
5.        Where a question arises as to whether the claimed privilege is not claimed bona fide or whether the danger apprehended is without substance, it is clear law that ‘great latitude should be allowed to … [the witness] in judging for himself the effect of any particular question …
6.        The foregoing considerations will be reasons for caution in deriving a conclusion that the claim of the privilege against self-incrimination is not made bona fide. There is authority to suggest that a want of subjective bona fides in invoking the privilege will remove the privilege … However, in my respectful view this is a dubious principle. What is in issue, ultimately is not the subjective fears of the witness claiming privilege but the objective tendency of the question to expose that witness to the risk of criminal prosecution …
One witness may have multiple motives and even mala fides. But if the question is such in fact to expose him or her to the risk of future prosecution, it is the duty of the judicial officer to upheld [sic] the privilege. It will be easier and more reliable to assess the reasonableness of the apprehension that the genuineness of the sentiment. A court can quite readily speculate upon and judge the possible use of demanded oral testimony. The devil himself knoweth not the mind of man [or woman];
7.        It is for the presiding judicial officer to determine whether the objection taken is good and whether there are reasonable grounds for the belief on the part of the witness that he or she is, or may be, in peril of future criminal or like proceedings if the answer is given. Just as the court must protect the privilege, it must also make sure that the rule is not abused; but applied only where its invocation is justified … The proper procedure in a claim for privilege is to object to each question as it is asked … It is not proper to refuse to be sworn or to decline to answer any questions at all or to claim a global protection from the privilege. Such refusal may amount to a contempt of court … Nevertheless, a point will be reached in questioning where it will be unnecessary to persist with an entire cross-examination which is clearly futile by reason of the invocation of the privilege against self-incrimination. To demand a tedious repetition of questions, rebuffed every time by a claim of privilege which is upheld, would be pointless;
8.        The privilege against self-incrimination may be waived in certain circumstances. In this respect it accords with other privileges. This much is clear law   … The presence of a privileged document in the hands of a third party does not necessarily destroy the privilege. The question remains whether the party entitled to the privilege has actually waived it … Nevertheless, as with any waiver, it is necessary to define with some precision what is waived. It will be rare that a person is taken to have waived all rights and privileges in respect of any prosecution for any offence arising out of circumstances only generally defined. The point of difficulty will be presented by the definition of the subject matter of the waiver. This will require assessment of the reasonable interpretation to be placed upon the conduct of the witness said to amount to the waiver.”[51]
[51] (1993) 31 NSWLR 412 at 420-424

Mason ACJ, Wilson and Dawson JJ considered the circumstances in which the privilege will be impliedly excluded by legislation. They did so in Pyneboard Pty Ltd v Trade Practices Commission[52] (Pyneboard) and I will return to that below. Shortly after the Pyneboard judgment, the High Court considered whether legislation had abrogated the privilege in Sorby. It did so in relation to ss 6DD and 6A(2) of the Royal Commissions Act 1902 (Royal Commissions Act). Section 6DD provided that “A statement or disclosure made by any witness in the course of giving evidence before a Commission is not (except in proceedings for an offence against this Act) admissible in evidence against that witness in any civil or criminal proceedings in any court of the Commonwealth, of a State or of a Territory.” Section 6A(2) provided that “A person is not entitled to refuse or fail to answer a question that he is required to answer by a member of a Commission on that the ground that the answer by a member of a Commission on the ground that the answer to the question might tend to incriminate him”.
[52] (1983) 152 CLR 328; 45 ALR 609 and see [34] below

The majority of the High Court held that s 6A of the Royal Commissions Act required a witness to answer questions put to him notwithstanding that the answers might tend to incriminate him.[53] They also decided that s 6DD did not remove the right of a witness to refuse to answer a question on the ground that the answer might tend to incriminate him. As Mason ACJ, Wilson and Dawson JJ said:
“There is no sufficient indication in the Act that a witness is not entitled to that protection if the reason for his refusal is a well-grounded claim to the privilege against self-incrimination.”[54]

Gibbs CJ also explained that:

“ In the absence of binding authority the matter must be approached from the standpoint of principle. If a witness is compelled to answer questions which may show that he has committed a crime with which he may be charged, his answers may place him in real and appreciable danger of conviction, notwithstanding that the answers themselves may not be given in evidence. The traditional objection that exists to allowing the executive to compel a man to convict himself out of his own mouth applies even when the words of the witness may not be used as an admission. It is a cardinal principle of our system of justice that the Crown must prove the guilt of an accused person, and the protection which that principle affords to the liberty of the individual will be weakened if power exists to compel a suspected person to confess his guilt. Moreover the existence of such a power tends to lead to abuse and to ‘the concomitant moral deterioration in methods of obtaining evidence and in the general administration of justice’: Validity of Section 92(4) of The Vehicles Act 1957 (Saskatchewan)^[[55]^]. It is true that in some cases the legislature may consider that it can only achieve the intended purpose of the statute by limiting or abrogating the privilege against self-incrimination, but, as I have said, if the legislature intends to render the privilege unavailable it must manifest clearly its intention to do so. To provide that the answers may not be used in evidence is not to reveal clearly an intention that the privilege should be unavailable, although, if the legislature did intend to remove the privilege, it might, in fairness, at the same time prevent the use in criminal proceedings of statements which otherwise would have been privileged: cf. Rank Film Ltd v Video Information Centre^[[56]], per Lord Russell of Killowen.
For these reasons, in my opinion, the presence of s 6DD in the Royal Commissions Act 1902 was not sufficient to reveal a clear intention to enact that a witness called before a Royal Commission should not be entitled to refuse to answer questions on the ground that the answers might tend to incriminate him. …”[57]

[53] (1983) 152 CLR 281; 46 ALR 237 at 296; 247 per Gibbs CJ; at 305; 254 per Mason, Wilson and Dawson JJ; and at 312-313; 261 per Murphy J.

[54] (1983) 152 CLR 281; 46 ALR 237 at 311; 259 and see also Murphy J at 311-312; 260-261

[55] [1958] SCR 608 at 619

[56] [1982] AC 380 at 448

[57] (1983) 152 CLR 281; 46 ALR 237 at 294-295; 245-246

The Chief Justice considered that a version of s 6A that had subsequently been inserted in the Royal Commissions Act did have the effect that a witness before a Royal Commission was bound to answer questions if required to do so. That witness was so required notwithstanding that the answers might tend to expose him or her to criminal charge.[58] Mason, Wilson and Dawson JJ[59] and Murphy J[60] reached the same conclusion. The new s 6A, which has since been amended, then provided in part:
“(1)     It is not a reasonable excuse for the purposes of sub-section 3(2) for a person to refuse or fail to produce a document or other thing that he was required to produce at a hearing before a Commission that the production of the document or other thing might tend to incriminate him.
(2)      A person is not entitled to refuse or fail to answer a question that he is required to answer by a member of a Commission on the ground that the answer to the question might tend to incriminate him.
(3)      This section does not apply where the offence in respect of which the production of a document or other thing or the answer to a question might tend to incriminate a person is an offence with which the person has been charged and the charge has not been finally dealt with by a court or otherwise disposed of.”
[58] (1983) 152 CLR 281; 46 ALR 237 at 296; 247
[59] (1983) 152 CLR 281; 46 ALR 237 at 305; 254
[60] (1983) 152 CLR 281; 46 ALR 237 at 312; 261

The privilege against exposure to a penalty

The majority of the High Court in Sorby referred to Pyneboard decided earlier in 1983. In the earlier case, the High Court considered s 155 of the Trade Practices Act 1974 (TC Act) which authorised a member of the Trade Practices Commission (TPC) to require a person to furnish information and produce documents or to appear before it to give evidence and produce documents. The power could be exercised where the TPC or its Chairman or Deputy Chairman believed the person was capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute a contravention of the TP Act. Section 155(7) provided that a person was not excused from the obligation under s 177 on the ground that the information or document required might tend to incriminate him or her. The answer the person gave to any question asked in a notice under the section or produced in response to it was not admissible in evidence against that person in any criminal proceedings other than proceedings under the TP Act.

The majority, Mason ACJ, Wilson and Dawson JJ, began with the proposition that:
“ It is well settled that ‘a party cannot be compelled to discover that which, if answered, would tend to subject him to any punishment, penalty, forfeiture, or ecclesiastical censure’ to use the words of Bowen LJ in Redfern v Redfern [1891] P 139 at 147. …”[61]

They made two points about the explanation:

“… The first is that, although the rule is expressed as one that relates to discovery, it is necessarily a reflection of the law of privilege. The second point is that Bowen LJ was not saying that the privilege against exposure to conviction for a crime was the same as, or includes, the privilege against exposure to penalties or forfeiture or ecclesiastical censure. Quite obviously they are four different aspects or grounds of privilege. …”[62]

[61] (1983) 152 CLR 328; 45 ALR 609 at 335; 613

[62] (1983) 152 CLR 328; 45 ALR 609 at 336; 614

Regarding the nature of the privilege against exposure to penalties, their Honours went on to conclude:
“… the construction of s 155 is to be approached on the footing that the privilege of refusing to answer questions or provide information on the ground that the answers or the information might tend to expose the party to the imposition of a civil penalty is (a) not confined in its application to discovery and interrogatories; (b) available at common law as well as in equity; and (c) distinct from, though often associated in discussion with, the privilege against exposure to conviction for a crime.”[63]
[63] (1983) 152 CLR 328; 45 ALR 609 at 337; 614

They went on to consider whether the privilege against exposure to a penalty is confined in its application to testimonial disclosures in judicial proceedings and so is inherently incapable of application in non-judicial proceedings. Those authorities reflected a number of concerns regarding the nature of the privilege and whether the body requiring the answer, document or information should decide whether the claim for privilege is correctly made. They concluded that they were:
“… not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings. The issue of its availability in these proceedings, therefore, falls to be decided by reference to the statute itself. In the consideration of that question it is necessary to bear in mind the general principle that a statute will not be construed to take away a common law right unless the legislative intent to do so clearly emerges, whether by express words or necessary implication …
In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings.”[64]
[64] (1983) 152 CLR 328; 45 ALR 609 at 346; 617-618

Much more recently, Gleeson CJ, Gaudron, Gummow and Hayne JJ commented on the proper approach to be taken in construing legislation to decide whether or not it is abrogating a common law right. They did so in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission[65] (Daniels) when they commented on the approaches taken in Pyneboard:
“… In construing s 155, Mason ACJ, Wilson and Dawson JJ expressly acknowledged that legislation is construed as abrogating a common law right only if it does so expressly or by necessary implication ((1983) 152 CLR 328 at 341; 45 ALR 609 at 617). On the other hand, Brennan J approached the construction of s 155 on the basis that the issue was whether the obligation in s 155(5) to comply with a notice under s 155(1) was impliedly qualified by the privilege against self-incrimination or any like privilege… – an approach which fails to give effect to the rule expressed in Potter v Minahan (1908) 7 CLR 277.”[66]
[65] (2002) 213 CLR 543; 192 ALR 561
[66] (2002) 192 ALR 561 at 566-567

Pyneboard has been applied by the High Court in the subsequent cases of Police Service Board v Morris & Martin[67] and Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs.[68]

May answers required to be given under compulsion be rejected on the basis that they are involuntary and so inadmissible in subsequent proceedings?

[67] (1985) 156 CLR 397; 58 ALR 1 at 404, 408 and 411; 5, 8 and 10 where the headnote summarises the majority judgments of Gibbs CJ and Wilson, Brennan and Dawson JJ as deciding that “… the privilege against answering questions the answers to which might expose a person to a penalty is capable of applying to a statutory provision which required members of the police force to answer questions tending to show the commission by them of disciplinary offences. … the privilege was excluded by reg 95A(7) [of the Police Regulations 1957].” Regulation 95A(7) provided that no member of the Force shall disobey any lawful order, written or otherwise and it was accepted that it was lawful for it was lawful for an officer to require a subordinate officer to answer a question regarding his duties while on duty.

[68] (1984) 156 CLR 385; 57 ALR 751 at 394; 756-757. The High Court considered s 8(1) of the Securities Industry (Victoria) Code which authorised the Corporate Affairs Commission (Vic) to direct a person to produce books in certain circumstances. A person was not permitted, without reasonable excuse, to fail to comply with a requirement to do so (s 10(1)). Section 10(5) provided that a person was not excused from making a statement providing an explanation as to any matter to which the books related on the ground that the statement might tend to incriminate him or her. Where he or she does make that claim before making the statement, the statement is not admissible in evidence in criminal proceedings other than under s 10 of the Code. Gibbs CJ, Mason and Dawson JJ decided that the power under the Code to require the production of books is not subject to the privilege against self-incrimination.

This question was considered by Murphy J in R v Zion.[69]It was submitted that admissions made in the course of Mr Zion’s answering questions during a public examination under s 69 of the Bankruptcy Act 1966 (Bankruptcy Act) were not admissible as they were contained in statements that were not voluntary. Section 69(1) has since been repealed but it then provided that a bankrupt be examined on oath as to his conduct, trade dealings, property and affairs. Section 69(14) provided that a transcript of the evidence given at the examination might “… be used in evidence in any proceedings under this Act against the bankrupt” and be open for inspection. Mr Zion had not objected to answering questions at his examination. Section 69(8) provided that the bankrupt was to answer all questions unless directed by the Court, Registrar or Magistrate not to and was “…not excused from answering any such question by reason only of the fact that the answer to it may render him liable to punishment.”
[69] [1986] VR 609

Murphy J considered that s 69 abrogated the privilege unless the Court, Registrar or Magistrate made a direction to the contrary. It is one which, in his view:
“… has as its purpose not only the protection of the interests of creditors of the bankrupt but also the protection of the public at large … It provides for public compulsion examination in order to flush out or investigate any suspicion of fraud or dishonest conduct … It is just such an Act which must be seen to depend to a large extent for the achievement of its purpose upon the exercise of these powers, which might otherwise be seen to be arbitrary.”[70]
[70] [1986] VR 609 at 613

As to whether the statements made in an examination could be regarded as voluntary, Murphy J said:
“… it appears to me that, if the privilege against self-incrimination is abrogated by statute, as it is here, and nothing more appears in the statute to limit or prohibit the use of answers given as a result of such statutory abrogation, there is much merit in concluding that it was legislatively intended that such answers could be used as evidence for the purpose of obtaining the subsequent conviction of the examinee on a criminal charge. Otherwise, it might be asked, how could they incriminate?
…
… the answers given in the present case were voluntary in the sense in which that term should be understood in this context, and that is to say that they are not excluded by the principles which state that a man should not be required to accuse himself. … in the present circumstances, the principle nemo tenetur se ipsum accusare is abrogated.”[71]
[71] [1986] VR 609 at 614-615. The provisions considered by Murphy J are now found in s 81 of the Bankruptcy Act in a slightly different form. Section 81(11) provides that the person being examined shall answer all questions the Court, Registrar or magistrate puts, or allows to be put. Section 81(11A) provides that: “Subject to any contrary direction by the Court, the Registrar or the magistrate, the relevant person is not excused from answering a question merely because to do so might tend to incriminate the relevant person.”

Have the privileges been abrogated by the SIS Act?

The principle underlying both the privilege against self-incrimination and the privilege against exposure to penalty is that no person is bound to accuse himself or herself. It is, as the authorities have shown, a fundamental principle in the administration of justice. As Gibbs CJ said in Pyneboard, it cannot be abrogated by Parliament except in the clearest terms. It cannot be abrogated merely by Parliament’s providing that a statement given under compulsion is not admissible in a criminal proceeding or a proceeding for the imposition of a penalty. It is inherent in all of the authorities that regard must be had not only to such a provision but to the whole of the scheme of the legislation.

The purpose of the SIS Act is:
“… to make provision for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by APRA, ASIC and the Commissioner of Taxation.”[72]

Compliance with the supervisory scheme brings with it eligibility for concessional taxation treatment.[73] The SIS Act sets out a number of standards and requirements that superannuation entities must meet.

[72] s 3(1)

[73] s 3(2)

A Regulator, such as APRA, is given powers to monitor and investigate a superannuation entity’s compliance. Those powers are found in Part 25 and I have summarised them above. A clear theme in the various Divisions of Part 25 is that of information and the need to provide it. A superannuation entity must give the Regulator information or the Regulator, either itself or through an inspector, may obtain information from it. It is information that is essential if the Regulator is to assess whether or not a superannuation entity has complied with the SIS Act. The power to examine a person is limited to those who can be expected to be the repositories of information that is relevant to the affairs of a superannuation entity. That follows from their being “relevant persons” and so in that position by virtue of the positions they hold in relation to the superannuation entity or from their being persons whom the inspector, on reasonable grounds, suspects or believes can give information relevant to the investigation. It is to be expected that those people will be the sole repository of information in relation to whether or not a superannuation entity has complied with the requirements and standards established by the SIS Act.

It is against this background that Parliament has provided in s 287(1) that it is not a reasonable excuse for a person to refuse or to fail to give information, sign a record or produce a book in accordance with a requirement to do so by claiming that to do so might incriminate the person or make the person liable to a penalty. It has limited the use that may be made of the information given by a person if that person makes the appropriate claim in terms of s 287(2) but it is clear from both s 287(1) and the tenor of the SIS Act that Parliament intends that the Regulator be given all of the relevant information that it needs.

Parliament has sought to define the circumstances in which the statement and the fact that a person has signed the record is admissible against a person. It has done so in ss 287(2) and (3) and 290(2). On their face, they do not entirely accord with those established at common law. On its face, s 290(2) provides for only one criterion to be established and that is the making of the claim. I will return to that. In so far as the requirement in ss 287(2) and (3) that there are two criteria that must be satisfied is consistent with the position at common law. Where they differ is in the second criteria specified in s 287(2)(b) that the “statement … might in fact tend to incriminate the person …”. Under the common law, the second criteria has been specified a little differently. Kirby P, for example, has stated that it is a judicial officer’s duty to uphold a claim of privilege if “… the question is such in fact as to expose him or her to the risk of future prosecution.”[74]. In Sorby, Mason, Wilson and Dawson JJ expressed it a little differently again:
“… the privilege [against self-incrimination] protects the witness not only from incriminating himself directly under the compulsory process, but also from making a disclosure which may lead to incrimination or to the discovery of real evidence of an incriminating character. …”[75]
[74] Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 423
[75] (1983) 152 CLR 281; 46 ALR 237 at 310; 259

There is no practical difference, however, between that and a test that the statement “might in fact tend to incriminate the person” in s 287(2). Given one of the ordinary meanings of the word “incriminate”, s 287(2)(b) is referring to a statement that might in fact tend to lead to “… charg…[ing]… [that person] with a crime or fault …”. That is consistent with the way in which s 287(2)(b) provides that s 287(3) applies if the statement “might in fact tend to … make the person liable to a penalty”. In both instances, the provisions appear to reflect that aspect of the common law.

There are, however, two differences between the common law privileges and the provisions of ss 287(2) and (3) and 290(2) that are significant. The first is that no mention is made of waiver in those provisions. At common law, the privileges are those of the person refusing to make the statement or resisting the discovery of a document. Waiver may be as a result of a person’s expressly choosing to do so or implicitly by engaging in conduct that is inconsistent with that person’s being permitted to maintain the confidentiality that the privileges bestow. I give my reasons below[76] but, for the moment, I note that I do not consider that ss 287(2) or 290(2) allow for any concept that equates with waiver.
[76] [57] to [64] below

The second difference between the two is that ss 287(2) and (3) and 290(2) refer to inadmissibility but make no express reference to the protection they afford the person making a disclosure that may lead to the discovery of other evidence of an incriminating character or other evidence relevant to liability to a penalty.

What the relevant provisions of the SIS Act do provide for is the inadmissibility of a statement that is made in circumstances meeting the two criteria set out in s 287(2) is provided for by Parliament in s 287(3). Section 290(2) refers to inadmissibility. Inadmissibility is the protection that the SIS Act offers in return for requiring an examinee to answer questions. It might be thought that inadmissibility equates with that aspect of the privileges that protects the person from self-condemnation by rendering the statement inadmissible but there is no mention made of the other aspect of the privileges. That aspect is the protection they afford the person making a disclosure that may lead to the discovery of other evidence of an incriminating character or other evidence relevant to liability to a penalty.

The fact that a statement is inadmissible, as provided in ss 287(3) and 290(2) does not of itself provide the second aspect of the protection afforded by the privileges. That is apparent from the judgment of Hunt J, with whom Carruthers and Grove JJ agreed, in the Court of Criminal Appeal (NSW) in R v Saleam.[77] He was considering a submission that documents brought into existence under the Police Regulation (Allegations of Misconduct) Act 1978 (NSW) (PRAM Act) and produced under a subpoena could not be disclosed to Mr Saleam. That submission was based on s 59 of the PRAM Act that provided, in general terms, that any document brought into existence for the purposes of that legislation “is not admissible in evidence in any proceedings”. Hunt J said:
“ The circumstance that a document is inadmissible in evidence in any particular proceedings does not mean that a party to those proceedings may not have access to it for legitimate forensic purposes. … Subject to the existence of a legitimate forensic purpose, a party is entitled to see documents produced on subpoena not only to see whether they themselves prove relevant facts but also to see whether they disclose information which may be established in some other admissible form.”[78]
[77] (1989) 16 NSWLR 14
[78] (1989) 16 NSWLR 14 at 16

Having regard to the objects of the SIS Act and the role of APRA in achieving those objects, it seems to me that the concept of a statement not being admissible in ss 287(2) and (3) and 290(2) in the same way. That means that a statement meeting the two criteria in s 287(2) is not admissible in the proceedings to which those sections refer but may still be used for legitimate forensic purposes such as those leading to the discovery of other evidence or material relevant to the issues. This interpretation is consistent with the Regulator’s being given wide powers to obtain information and to investigate superannuation entities as a factor in carrying out the stated object of the SIS Act to make provision for their prudent management.

Having regard to these variations between the provisions of ss 287(2) and (3) and the common law privileges as well as to the object of the Act and its detailed provisions relating to the provision and gathering of information, I have concluded that Parliament has abrogated the privileges against self-incrimination and exposure to penalties. Instead, it has intended that the Regulator and an investigator have access to all relevant information unqualified by such privileges. It has ensured that this occurs by giving an examinee some protection but only the protection it has fashioned in the SIS Act. Consequently, the use that may be made of the statements made at the examinations of VCA, VCC and VCD is governed not by the law relating to those two privileges but by the terms of the SIS Act.

Can an examinee render admissible what is inadmissible?

The question that I have asked in the heading requires me to consider whether an examinee can, as he or she can at common law, choose to waive the protection that he or she would otherwise have. The provisions of ss 287(3) and 290(2) appear on their face to permit no exceptions other than those in relation to proceedings in respect of the falsity of the statement or of any statement contained in the record of the examination. That is a status or characteristic that is attached to the statement by the operation of those sections. If that is the correct view to take of the provisions, it is not a status or characteristic that can be set aside by the actions or wishes of those affected by it.

The provisions could also be viewed on the basis of the obligations that they impose. It is a consequence of the status or characteristic given to the statement by the SIS Act that a court or tribunal is under an obligation not to admit the statement in evidence or, if it be more appropriate language, to have regard to it as a relevant document in resolving the issues it must decide. If the provision is to be viewed in that light, it is relevant to ask whether the obligation must be complied with. That necessarily requires a consideration of the consequences of non-compliance[79] or:
“... whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. … In determining the question of purpose, regard must be had to ‘the language of the relevant provision and the scope and object of the whole statute’ ….”[80]
[79] Project Blue Sky Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 at 374; 503-504 per Brennan J
[80] (1998) 194 CLR 355; 153 ALR 490 at 390-1; 516-517 per McHugh, Gummow, Kirby and Hayne JJ

These principles were considered by Finkelstein J in Hall v Minister for Immigration and Multicultural Affairs[81] (Hall) in the context of s 500(6C) of the Migration Act1958 (Migration Act). That section provides that, if a decision under s 501 relates to a person in the migration zone, an application for review of a decision must be accompanied by, or by a copy of, the document notifying the person of the decision and one of the sets of documents given to him or her under s 501G(2). Finkelstein J concluded that a failure to comply with s 500(6C) would not result in invalidity of the application. He added that “no purpose would be served by invalidating an application for a failure to provide documents which the Tribunal can obtain in any event”.[82] His Honour observed that failure to comply with s 500(6C) would still mean that the application would be dealt with expeditiously as intended by Parliament. The Tribunal could require the Minister to produce the documents once the application has been lodged. Cancellation of a visa would result in the deportation of the non-citizen and so cause great hardship to him or her and to his or her family. It was difficult to imagine, he said, that Parliament intended that a non-citizen should lose his or her right to review merely because documents that remained in the possession of the Minister had not been lodged.
[81] (2000) 97 FCR 387; 59 ALD 458
[82] (2000) 97 FCR 387; 59 ALD 458 at 391; 560

A different result was reached by Gray J in Goldie v Minister for Immigration and Multicultural Affairs[83] (Goldie) in analysing a different aspect of the scheme established by s 500. Section 500(6J) provides that an applicant wanting the Tribunal to have regard to any documents other than those provided by the Minister, must give the Minister a copy of those documents at least two business days before the Tribunal holds a hearing.
[83] (2001) 111 FCR 378; 33 AAR 446 (Gray, RD Nicholson and Stone JJ)

Gray J concluded that s 500(6J) required strict compliance:
“It is plain that the scheme is designed to disadvantage an applicant for review. Subsections (6H) and (6J) are not counterbalanced by any express obligation on the Minister to disclose the entire case against the applicant prior to the hearing. The purpose of subss (6H) and (6J) can only be to advantage the Minister at the hearing. Being forewarned as to the entirety of the case of the applicant for review, the Minister is better able to respond to the case. …”[84]
[84] (2001) 111 FCR 378; 33 AAR 446 at 390; 457-8

The two outcomes are consistent when regard is had to the whole scheme. Finkelstein J was concerned with that relating to the application and Gray J with that relating to the Minister’s being forewarned of the documentary evidence to be given at the hearing. They reached different conclusions but from a common basis of reasoning. That common basis of reasoning was that Parliament intended that the Minister be forewarned of the evidence that was to be given on behalf of an applicant for review. Strict compliance with s 500(6C), requiring that the applicant lodge with an application documents that he has already been given by the Minister’s delegate, did not advance the Minister’s knowledge of the applicant’s case. Strict compliance with s 500(6J) relating to documentary evidence did advance the Minister’s knowledge.

The type of analysis applied by Finkelstein and Gray JJ in Hall and Goldie respectively are equally applicable in this case. Parliament has chosen a scheme of regulation and supervision of superannuation entities that gives the Regulators considerable powers of investigation and information gathering. It has sought to give some measure of protection to those it requires to provide information in those circumstances. The consequences of a court or tribunal’s choosing to disregard that protection would be to undermine Parliament’s scheme by exposing an examinee to the risk of having the protection removed in circumstances in which the examinee may argue that he or she has not waived it either expressly or implicitly. That outcome is inconsistent with the scheme of the provisions in the SIS Act.

It follows that, viewed from either aspect, I consider that the provisions of ss 287(2) and 290(2) cannot be ignored. If, of course, an examinee should choose to repeat his or her statements outside the examination and in, for example, a statement lodged in the Tribunal, those sections would have no application. Evidence of them would be inadmissible in the normal way.

What use does the SIS Act permit to be made of the statements made at an examination?

It is necessary to ask this question because there appears to be an inconsistency between the terms of s 287(2), when read with s 287(3), and those of s 290(2). If regard is had only to ss 287(2) and (3), it appears that a statement is inadmissible in evidence in a criminal proceeding or in a proceeding for the imposition of a penalty if two criteria are met. The first is that the person claims that the statement might tend to be incriminatory or make the person liable to a penalty. The second is that the statement might in fact tend to do so. Both need to be present before admissibility is limited.

Section 290(2), on the other hand, appears to limit admissibility if only the first criterion is met. That is more generous than would be the case had the two privileges not been abrogated by Parliament. The only other difference between the two is that ss 287(2) and (3) relate to both the statement and the fact that the person has signed the record whereas s 290(2) refers only to the statement. I do not consider that to be a relevant difference but the first is of some concern. Although both sections have since been amended, they have not been amended in any way that is material to this case. They appeared in the original Superannuation Industry (Supervision) Bill 1993 as cll 282 and 286 respectively but the Explanatory Memorandum does not assist in reconciling the apparent discrepancy between them.

Sections 287(2) and (3) appear in Division 7 under the heading of “Offences” and s 290 under the heading of “Evidentiary use of certain material”. Their placement in two different provisions does not appear to be a relevant factor in reconciling them. There are two reasons. First, ss 287(2) and (3) and 290 appear to be referring to precisely the same issue i.e. the inadmissibility of a statement in a criminal proceeding or a proceeding for the imposition of a penalty. Sections 287(2) and 287(3) are not limited to proceedings involving an offence. The second reason flows from the first. Division 7 establishes two offences: failing to comply with the requirements of the SIS Act[85] and concealing books relevant to the investigation.[86] Sections 287(2) and (3) are not limited to those offences but are drafted more broadly to extend to proceedings beyond those that can be described as proceedings relating to the offences referred to in Division 7 of Part 25 of the SIS Act.
[85] s 285
[86] s 286

How are the provisions to be reconciled? It seems to me that s 290 is to be seen as a gathering of provisions relating to the use that may be made of statements made at an examination in proceedings against the examinee. The general proposition is found in s 290(1):
“Subject to this section, a statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding.”

The next four sub-sections of s 290 are exceptions to the general proposition. The first, in s 290(2) is headed the “Self-incrimination exception”. The others are the “Irrelevant statement exception” in s 290(3), the “Related statement exception” in s 290(4) and the “Legal professional privilege exception” in s 290(5). Section 290(6) makes it clear that the general proposition “… applies in relation to a proceeding against a person even if it is heard together with a proceeding against another person.” The “… admissibility in the proceeding of other evidence to statements made at the examination” is not limited or affected by Part 25.[87]

[87] s 290(8)

Although s 290(2) does not mirror s 287(2) precisely, it seems to me that it must be read in its context and that is the context of Part 25. The sections in Part 25 complement one another and are directed to enabling the Regulator to monitor and investigate superannuation entities. The Regulator is given power to institute certain proceedings under Division 9 of Part 25 but is also given powers under other Parts such as the power to disqualify found in s 120 of Part 15. Given that, the meaning to be given to s 290(2) must be affected by its context. Its context is that of enabling the Regulator to gain the maximum amount of information relevant to its functions while offering an examinee an appropriate level of protection. The reference in s 290(2) to a person’s making a claim that a statement might tend to incriminate him or her or make him or her liable to a penalty must be read as a shorthand reference to the wider requirements of s 287(2). It is s 287(2) that is concerned with the specifics of the examination.[88]
[88] cf the reasoning of the High Court in Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 2001 ATC 4343 at 4,366-4,367 when it considered s 177E, which is concerned with the stripping of company profits, in its broader context of the anti-avoidance provisions Part IVA of the Income Tax Assessment Act 1936. It said “…In framing s 177E, the legislature has adopted the language of tax avoidance, and it has place s 177E in Pt IVA, for a reason related to the necessity to supplement, in a particular respect, the general anti-avoidance provisions. This is not an example of a statutory provision in respect of which a purposive construction is merely an available choice; such a construction is necessary.”

If this is the correct view, it means that a statement made at an examination is inadmissible in a criminal proceeding against that person or in a proceeding for the imposition of a penalty if the person has made the appropriate claim specified in s 287(2) and the statement might in fact tend to incriminate the person or make the person liable to a penalty. That means that each statement made at an examination must be considered to decide whether it meets both criteria and so whether or not it is admissible or inadmissible in a criminal proceeding or a proceeding for the imposition of a penalty. It is not possible for a person to make a “blanket claim” rendering all of the person’s statements at an examination inadmissible.

There is nothing in the SIS Act that prevents a person’s statements made at an examination being used in a proceeding relating to another person. Inadmissibility of a statement or the fact that a person has signed the record under the SIS Act arises only in a criminal proceeding or a proceeding for the imposition of a penalty against the person who made them and who meets the two criteria. The SIS Act makes no such provision in relation to any other person. The protection extends only to those whose words might condemn themselves and not to others who might be condemned by them.

Are the proceedings to review APRA’s decision proceedings for the imposition of a penalty?

The proceedings are to review APRA’s decisions to disqualify each of the applicants so that none can be or act as the trustee or a responsible officer of a superannuation entity. Unlike the Australian Securities and Commission Act 1989 (ASC Act) considered in Re Kippe and Australian Securities Commission,[89] the SIS Act does not define the word “proceeding”. Like the SIS Act, the ASC Act permitted a regulatory body to make orders preventing a person from carrying out an activity. In the case of the ASC Act, they were called banning orders rather than decisions to disqualify a person but the outcome is the same. Both contained provisions similar to those in ss 287(2) and (3) of the SIS Act. The Full Court of the Federal Court decided that the Tribunal was incorrect in concluding that the Tribunal’s proceedings to review the banning order were proceedings for the imposition of a penalty.[90] In Rich v Australian Securities and Investments Commission,[91] the Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ concluded:
“In Kippe [v Australian Securities Commission^[[92]]], the question was whether statements made in an examination under s 19 of the Australian Securities Commission Act 1989 (Cth) were admissible in evidence in proceedings before the Administrative Appeals Tribunal in which banning orders were sought under ss 829 and 830 of the Corporations Law. Section 68(3) of the Australian Securities Commission Act provided that the statements were not admissible in ‘a proceeding for the imposition of a penalty’. The Full Court of the Federal Court held^[[93]] that a proceeding which might result in a banning order was to be characterised as ‘“protective” in purpose and not as one for the imposition of a penalty’. For the reasons given earlier, that conclusion was wrong. Kippe should be overruled.”[94]
[89] (1995) 19 ACSR 296
[90] Australian Securities Commission v Kippe (1996) 67 FCR 499; 137 ALR 423
[91] (2004) 220 CLR 129; 209 ALR 271
[92] (1996) 67 FCR 499; 137 ALR 423
[93] (1996) 67 FCR 499; 137 ALR 423 at 508; 431.
[94] (2004) 220 CLR 129; 209 ALR 271 at 147; 282-283

The reasons given by their Honours earlier read, in part:
“ It was not suggested, and could not seriously be suggested, that directors, alternate directors and company secretaries do not hold offices to which the privileges against forfeiture and penalties may apply. Rather, the contention of the Commission was that discussed above, namely that the relevant proceedings were protective rather than penal.
If a disqualification order is made, the person against whom the order is made ceases to be a director, alternate director, or a secretary of a company^[[95]], unless given permission under s 206F or s 206G of the 2001 Act to manage the corporation concerned. The order for disqualification thus causes the person against whom it is made to forfeit any office then held in a corporation and forbids that person from holding office in a corporation for the duration of the disqualification order. Those consequences, whether taken separately or in combination, when inflicted on account of a defendant's wrongdoing, are penalties. That the penalty is not exacted in the form of a money payment does not deny that conclusion. As the authorities referred to earlier in these reasons reveal, equity's concern with penalties was never confined to pecuniary penalties. If exposure to loss of office or exposure to dismissal from a police force^[[96]] is exposure to penalty, exposure to a disqualification order is exposure to a penalty.”[97]
[95] s 206A(2).
[96] Police Service Board v Morris (1985) 156 CLR 397; 58 ALR 1
[97] (2004) 220 CLR 129; 209 ALR 271 at 147; 282

The same reasoning leads me to conclude that the proceedings in this Tribunal in which the applicants seek review of APRA’s decisions are proceedings for the imposition of a penalty.

What documents must be lodged under s 37 of the AAT Act?

Section 37(1) of the AAT Act provides that:
“Subject to this section, a person who has made a decision that is the subject of an application for a review by the Tribunal must, within 28 days after receiving notice of the application (or within such further period as the Tribunal allows), lodge with the Tribunal 2 copies of:
(a)a statement setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision; and
(b)every other document or part of a document that is in the person’s possession control and is relevant to the review of the decision by the Tribunal.”

In Re VBN and Australian Prudential Regulation Authority[98] I summarised the Tribunal’s task in reviewing a decision:
“10. Knowing the process followed by the decision-maker may be relevant in some cases but, in others, of peripheral interest only.^[[99]] Far more important is the decision itself for it underpins the Tribunal’s jurisdiction and the standing of a person applying for its review^[[100]] or to be joined as a party to a proceeding.^[[101]] More important too is the evidence or the material that the decision-maker has available and that is relevant to the review of the decision. It forms a foundation to which other evidence or material may be added.
11. Given the task that the Tribunal must follow, it is apparent that the Tribunal should not defer to the decision under review. It should not treat the decision under review as the positions from which it needs to be persuaded. To do that would be inconsistent with its role to determine the correct or preferable decision.^[[102]] Determining that correct or preferable decision requires the Tribunal to adopt a neutral position and to consider all legal and factual issues from the beginning.”[103]
[98] [2005] AATA 1060
[99] Revelation of the process could, on occasion, reveal that no decision had been made at all. In that case, the Tribunal would not have jurisdiction (e.g. Tradigrain Australia Pty Ltd and Export Market Development Grants Board (1984) 6 ALD 442). If revelation of the process merely showed that a decision was improperly or even unlawfully made, that is unlikely to affect the Tribunal’s jurisdiction to review the decision: see Collector of Customs(NSW) v Brian Lawlor Automotive Pty Ltd (1979) 25 ALR 307 at 317 per Bowen CJ and 339-340 per Smithers J.
[100] AAT Act, s. 27
[101] AAT Act, s. 30(1A)
[102] As the Full Court said in Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598 at 602:
“It seems to us to be unsound in determining the correctness of a decision to treat the decision itself as being probative of its own correctness.”
[103] [2005] AATA 1060 at [10]-[11]

These are the general principles that underpin s 37 and its requirements to give reasons for the decision and documents that are relevant to the review of the decision. I went on to consider why s 37 has those requirements:
“13.             In providing the reasons, the statement is intended to make the decision-maker’s position clear. If the Tribunal considers that it is not adequate, it may order the decision-maker to lodge an additional statement containing further and better particulars in relation to the matters in respect of which it considers the statement inadequate.[104]
14.               The documents that must be lodged form a framework of relevant material to which the parties may add other relevant material. The statement of reasons permits the parties to analyse the decision-maker’s reasons. Analysis permits the parties to examine the merits of the reasoning process. If the reasoning process is flawed, they may decide to agree upon another decision that is acceptable to them. Alternatively, the suggestion of a flaw may suggest to them other relevant avenues of enquiry or review. Travelling down those roads may reveal relevant material to add to the foundation of documents already lodged in the Tribunal or new lines of reasoning. Section 37(1) is the beginning of what is, for all practical purposes, an incremental process.
15.               It has always been clear that relevance to the review of a decision does not equate to its supporting, or being relevant to, the decision that was actually made. The test is whether the documents are relevant to the review and that incorporates documents that meet that description regardless of whether they support the decision that was made and is now under review.”[105]
[104] AAT Act, s. 38
[105] [2005] AATA 1060 at [13]-[15]

The test is an objective test and that is apparent when it is read with s 37(2):
“Where the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal, the Tribunal may cause to be served on the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the prescribed number of copies of each of those other documents that is in his or her possession or under his or her control, and a person on whom such a notice is served shall comply with the notice.”

A decision-maker would find it very difficult, if not impossible to maintain a position that he or she did not consider documents relevant to the review of a decision in circumstances in which any reasonable decision-maker would have considered them to be relevant.

Is APRA required to lodge each applicant’s record of examination in the T documents relating to that applicant’s application?

The test, then, under s 37(1)(b) is that of relevance. Sections 287(3) and 290 speak in terms of a statement’s not being “admissible in evidence”. How does that relate to relevance? The concept of “admissibility” is associated with the law of evidence and the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.[106] That depends on what is meant by a statement’s not being “admissible in evidence”? The ordinary meanings of the word “admissible” are:
“… that can be allowed or accepted, especially as proof in a court of law ….”[107]

In a legal context, it has been understood to mean:

“Pertinent and proper to be considered in reaching a decision. Used with reference to the issues to be decided in any judicial proceeding.
Admissible evidence. As applied to evidence, the term means that the evidence introduced is of such a character that the court or judge is bound to receive it; that is allow it to be introduced at trial. To be ‘admissible’ evidence must be relevant and, inter alia, to be ‘relevant’ if must tend to establish material proposition. Smith v State, Alaska, 431 P2d 507, 509. …”[108]

[106] AAT Act, s 33(1)(c)

[107] Chambers 21^st Century Dictionary, updated edition, 1999, reprinted 2004, Chambers

[108] Black’s Law Dictionary, 6^th edition, West Publishing Co, 1990

In considering the manner in which the powers of the Minister for Immigration and Ethnic Affairs may be exercised under the Migration Act 1958, Gummow J considered a conclusion reached by the Minister’s delegate that there had been “no evidence” to support a visa applicant’s claim. The delegate did so because there was a lack of corroboration of the material produced by the applicant. His Honour said:
“ Plainly, the relevant powers of decision-making for which provision made in the Act were not to be exercised only upon consideration of what would be treated as admissible evidence by a court or tribunal whose procedures were controlled by the rules of evidence. Nevertheless, in describing the procedures of such decision-making authorities the terms ‘evidence’ and ‘material of probative value’ are often used interchangeably. …”[109]
[109] Broussard v Minister for Immigration Local Government and Ethnic Affairs (1989) 21 FCR 472; 98 ALR 180 at 479; 187

In the context in which it is used in ss 287(3) and 290(2), it seems to me that the word “admissible” is to be understood more widely than simply referring to evidence that is bound to be received in a court. The SIS Act itself contemplates that there will be proceedings both in courts and this Tribunal. Its powers to investigate and to obtain information are wide so that the Regulator can carry out its functions. The protection normally available under the common law to those being questioned about their activities is removed. Consequently, the protection that is offered by ss 287(2) and (3) and 290(2) of the SIS Act should be read with those features in mind. The terms of that protection, extend not only to criminal proceedings, which will be heard by courts, but to proceedings for the imposition of a penalty, which may be heard by courts or by this Tribunal. In view of that, it seems to me that the expression “admissible in evidence” should be given a meaning that extends beyond its usual place in the rules of evidence as they apply to a court or to a tribunal applying the rules of evidence. It should be extended to a place which accommodates the purpose for which the protection is given. That is to say, it should be interpreted to include evidence or material that is relevant to the Tribunal’s review of a decision to impose a penalty as well as evidence that is admissible in accordance with the rules of evidence.

It follows that APRA is not be required to include in the T documents for each of the applicants, any of the statements made by that applicant at his examination if the two criteria in s 287(2) have been met. That is so because they are not admissible in the review of the decision regarding their disqualification as it is a proceeding for the imposition of a penalty. As they are not admissible, they cannot be regarded as relevant to the review of the disqualification decision and so are not caught within the terms of s 37(1)(b) of the T documents.

APRA will need to include in the T documents relating to each applicant those parts of the record of examination containing that applicant’s statements that do not meet both criteria specified in s 287(2) and that are relevant to the review of the decision. In some instances, it will be clear whether a statement is required to be included or not but in others it will not. I have not seen the records of examination and cannot reach any substantive conclusion.

Mr Anderson drew my attention to a judgment of the Court of Appeal (Vic) in British American Tobacco Australia Services v Cowell[110] (Cowell) when it said:
“… Given that the defendant’s claim to legal professional privilege ought not to have been overruled, the documents were not properly admitted into evidence and the foundation for his Honour’s conclusions, even if they were correct, must be taken as withdrawn.”[111]

Mr Anderson relied on this passage to support his submission that I should not see the records of examination until some time after APRA has lodged its T documents. By then, the parties will have considered the use that should be made of the records and whether or not they wish to waive their privilege. Furthermore, the Tribunal will avoid impermissibly inspecting privileged material and making findings of fact on an improper basis.

[110] (2002) 7 VR 524

[111] (2002) 7 VR 524 at 569; [131]

For the reasons that I have already given, I do not consider that issues of waiver arise. There may, however, well be issues that relate to whether the criteria in s 287(2) have been met. In deciding whether or not statements made during an examination are admissible or inadmissible in evidence, it may well be necessary for the Tribunal to examine the records and any other relevant material as well as to hear submissions from the parties. This would accord with the normal practice of the courts and of this Tribunal to examine documents to determine matters such as whether they should be produced on subpoena or summons.

In National Employer’s Mutual General Insurance Association v Waind Hill,[112] Moffitt P, with whom Hutley and Glass JJA concurred, set out the three steps that apply when a party asks the court to issue a subpoena for the production of documents. The first step is compliance by the person upon whom the subpoena is served and determination of any objections that person might have to complying with it. Those objections, which will focus on whether the subpoena was improperly issued or whether it is an abuse of power to compel production, are determined by the judge. The second step also requires a determination by the judge and that is to permit part or all of the documents to be inspected by the party who issued the subpoena or by the parties. At that stage, the documents are in the custody of the court. The only limit is that they must have some apparent relevance to the issues in the case. At that stage, there is no ruling upon relevance. That is the province of the third step. The third step is concerned with the admission of the documents in evidence. It involves a ruling by the judge regarding the relevance in fact of the documents and their admissibility in evidence. This approach has been accepted by Stone J in Dorajay Pty Limited v Aristocrat Leisure Limited.[113]
[112] [1978] 1 NSWLR 372
[113] [2005] FCA 588

In discovery proceedings in a court, a judge must become involved at various stages. If, for example, discovery is resisted on the basis that the documents are subject to legal professional privilege, a judge may be required to rule on the point. It cannot be said that examination of a document for that purpose or for one or other of the steps in the subpoena process is such that it affects any finding of fact. Judges make rulings as to admissibility or not as part of the normal course of a civil or criminal trial. As the decider of fact in a civil trial, the judge’s findings of fact regarding the substantive issues cannot thereby be said to be tainted in some way. This was not what the Court of Appeal was referring to in Cowell. It was referring not to the judge’s having looked at the documents for the purpose of deciding admissibility but to his having relied on them having first found them admissible.

Is APRA required to lodge the records of examination in the T documents relating to the applications of applicants other than the examinee?

Sections 287(2) and (3) and 290(2) deny admissibility of a record of an examination only when it is sought to use it against the person examined. They do not provide that it is inadmissible in evidence against persons other than the examinee. That means that their relevance to the decision under review must be assessed in the normal way. If they are relevant, APRA will be under an obligation to include them in the T documents in relation to those other applicants. The weight that the Tribunal will accord to any of those statements that are included in the T documents will be another matter to be decided at a later time.

Whether or not the statements are ultimately admissible at the hearing will depend on the operation of s 291. Assuming that none of the applicants becomes an absent witness for the purposes of s 290(2), their statements will be admissible in the proceedings:
“… unless another party to the proceeding requires the party tendering evidence of the statement
to call the absent witness as witness in the proceeding and the tendering party does not so call the absent witness.”[114]

It is too early to know whether there will be any such requirement.

THE ADEQUACY OF THE S 37 STATEMENT OF REASONS

[114] s 291(2)(b)

The submissions

Mr Anderson submitted that the s 37 statement of reasons lodged by APRA in the proceedings relating to VCC are inadequate. Their primary fault lies in their cross-referencing to the evidence in that they often refer to incorrect paragraphs of documents or to documents that are not included among the T documents. The s 37 statement should be self-contained and subsequent revisions by APRA have not adequately addressed the defects. In light of that, Mr Quinn renewed the previous application that APRA be required to lodge its Statement of Facts and Contentions before any of the applicants. The rule against exposure to penalties would preclude an order for discovery. Therefore, it is inappropriate for the applicants to file their Statements of Facts and Contentions before APRA filed its.

Mr Anderson had earlier submitted that APRA should be required to do that to enable the applicants to understand fully the case that APRA proposed to make against them in the Tribunal. It is not enough for them to understand the reasons why APRA made its decisions. They need to know whether APRA intends to rely on the same grounds or whether it intends to introduce new grounds. Considerations of procedural fairness and the fact that the proceedings are for the imposition of a penalty render it essential that APRA be required to lodge its Statements of Facts and Contentions before the applicants are required to do so. He relied on a number of authorities to which I will return.

Mr Quinn made similar submissions to those of Mr Anderson. He submitted that a statement does not comply with s 37 of the AAT Act unless it provides transparency and clarity, rather than ambiguity and confusion, in respect of the decision-making process. It does so by informing an applicant and the Tribunal of the evidence and other material upon which the impugned decision was actually based.

Ms McLeod submitted that I had already made a decision as to the order in which the parties were to lodge their material and that the applicants were simply wishing to reopen that issue. In any event, the statements of reasons were quite adequate and were supplemented by 14 lever arch folders of material.

Consideration: the adequacy of the statement of reasons

I have already set out the provisions of s 37(1)(a). It must be read with s 38(1) of the AAT Act which provides:
“Where the Tribunal considers that a statement referred to in paragraph 37(1)(a) that is lodged by a person with the Tribunal does not contain adequate particulars of findings on material questions of fact, an adequate reference to the evidence or other material on which those findings were based or adequate particulars of the reasons for a decision, the Tribunal may order that person to lodge with the Tribunal, within a time specified in the order, an additional statement or additional statements containing further and better particulars in relation to matters specified in the order with respect to those findings, that evidence or other material or those reasons.”

Mr Quinn referred me to a passage from the reasons for decision of Fisher J, Deputy President, Senior Member Hall and Mr Woodley, Member in Re Palmer and Minister for the Capital Territory:[115] (Re Palmer)
“ By requiring the decision-maker to give not only the reasons for his decision but additionally a statement of ‘the findings on material questions of fact referring to the evidence or other material on which those findings were based’, Parliament certainly intended that the citizen should be fully informed. These further requirements will be satisfied by a statement setting out the findings of fact, together with a reference to ‘the evidence or other material’ on which the findings were based. It is important to note that neither s 28 nor s 37 requires that the relevant ‘evidence or other material’ be ‘set out’ in the statement, only that it be referred to. Moreover, the citizen's entitlement to be fully informed was not merely an incident arising in the course of and for the purpose of a review by this Tribunal. It is a right which arises consequent upon a decision being made which is capable of being so reviewed, and the reasons, when properly given, ensure that the citizen is sufficiently informed to determine whether he wishes to take the matter further, and if so whether to make representations to the Minister, proceed in the appropriate court of law or to seek a review by this Tribunal. It follows that to achieve this end the reasons must, in the words of Megaw J in Re Poyser & Mills’ Arbitration, supra, [[1964] 2 QB 467] at 478, ‘be reasons which will not only be intelligible but which deal with the substantial points that have been raised’. We would also refer to Elliott v London Borough of Southwark [1976] 2 All ER 781 per James LJ at 791: ‘the duty to give reasons pursuant to statute is a responsible one and cannot be discharged by the use of vague general words which are not sufficient to bring to the mind of the recipient a clear understanding of why his request … is being refused’.”[116]
[115] (1978) 1 ALD 183; 23 ALR 196
[116] (1978) 1 ALD 183; 23 ALR 196 at 193-194; 206-207

The Tribunal in that case referred also to its obligation, under s 39 of the AAT Act. In doing so, it relied on the judgment of Smithers J in Sullivan v Department of Transport.[117]Smithers J had said that Tribunal’s obligation is to:
“… ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents.”[118]

Section 39 supported the Tribunal’s view in Re Palmer that, if the applicant were:

“…to present an effective case he will require to be adequately informed of the matters which prompted the Minister’s decision, and adequately informed, it might be said, by a statement intelligible to a layman.”[119]

[117] (1978) 20 ALR 323 ; 1 ALD 383 and referred to in Re Palmer and Minister for the Capital Territory (1978) 1 ALD 183; 23 ALR 196 at 194; 207

[118] (1978) 20 ALR 323 ; 1 ALD 383 at 326; 386

[119] (1978) 1 ALD 183; 23 ALR 196 at 194; 207

There are other matters that need also to be taken into account in assessing the adequacy of the statement of reasons. One relates to what is actually required by s 37(1)(a). What it requires is a statement of the “the reasons for the decision” (emphasis added). “The” decision to which it refers is the “decision that is the subject of an application for review” referred to in the opening words of s 37(1). Given the 28 day time limit for lodging the application and the 28 day time period allowed by s 37 for the lodgement of the T documents in a matter such as those with which I am concerned, it is to be expected that, in most cases, the statement of reasons will be prepared some two months after the initial decisions have been made. Although the decision-maker might have received more information in that time, it can generally be expected that there will have been little addition to his or her store of knowledge in the meantime. Therefore, the statement of reasons represents the decision-maker’s reasons at the time. It represents the foundation upon which all else is built.

This view accords with that expressed by Deputy President Hall when he suggested the procedure that should be followed when a decision-maker, in that case the Export Development Grants Board, based its decision on only one of the issues that arose in the circumstances:
“Where the Board has based its decision on only one of a number of issues that may arise in the case, the s 37 statement should, of course, deal with that issue … However, it is also appropriate for the Board to canvass, in a supplementary statement, any other issues that, in the view of the Board, may be relevant to the decision under review, although they were not relied upon at the time when the decision was made (see Re UK Family Reunion and Australian Postal Commission (1978) 2 ALD 383 at 400). It will then be for the Tribunal to give any necessary directions as to how the matter should proceed and as to the manner in which the relevant issues are to be dealt with (see s 33 of the Administrative Appeals Tribunal Act 1975). We would commend that course to the Board in the future.”[120]
[120] Re Hitek Holdings Pty Ltd and Export Development Grants Board (1985) 8 ALN N156

Another factor that needs to be taken into account in assessing the adequacy of reasons is the role of the Tribunal. That role is to conduct merits review and to determine:
“... whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.”[121]

The Tribunal’s task is not to enquire whether the decision-maker made an error in making the decision. That is the task of courts under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) if a person affected by the decision wants to question the process. The Tribunal’s task is not to adjudicate upon whether the decision-maker is able to defend the decision he or she made.[122] The task of the Tribunal is to determine the correct process it should follow, follow it, ascertain the law that is applicable and the issues that are relevant, consider the probative material that is available to it and make findings of fact that are based on that material and relevant to the issues, ascertain the decision or range of decisions that can correctly be made in light of the law and the facts and, if more than one, choose the decision that is the preferable decision.

[121] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 589; 68 per Bowen CJ and Deane J and 599; 77 per Smithers J

[122] Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368 as set out and adopted in Re Wertheim and Department of Health (1984) 7 ALD 121 at 154

Being aware of these matters, an applicant needs to have sufficient information on which to understand the decision-maker’s decision and, having understood it, to decide whether or not to seek review of the decision in the Tribunal. To that end, a statement of reasons under s 37(1)(a) of the AAT Act fulfils the same role as a statement of reasons given under ss 13(1) and (2) the ADJR Act. Of that statement, the Full Court of the Federal Court in Mees v David Kemp in his capacity as Minister for the Environment and Heritage[123] said:
“54 The section requires that reasons be furnished ‘which make intelligible the true basis of the decision’ – ARM Constructions Pty Ltd v Commissioner of Taxation (1986) 10 FCR 197 at 204 (Burchett J). It is remedial and supplies the deficiency of the common law – Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124 at 130 (Gummow J). It is designed to provide persons affected by a decision with sufficient information to decide whether to accept it or to pursue the matter further with the administrative process or through the Court – Ansett Transport Industries (Operations) Ltd v Secretary, Department of Aviation (1987) 73 ALR 193 at 197 (Lockhart J).
55 The section does not require that the reasons are set out with the degree of precision or detail which might be appropriate to a judicial decision:
‘But it demands a statement of the real findings and the real reasons. It is an incident of the obligation that the statement should not omit findings or reasons for the decision which may, in the light of a pending review application, appear to be irrelevant or reflective of some false assumption or pre-judgment.’ – Minister for Immigration and Ethnic Affairs v Taveli (1990) 23 FCR 162 at 179 (French J)”
[123] [2005] FCAFC 5

Another factor that forms the background to a consideration of the adequacy of the statement of reasons is that, in most proceedings, neither party carries a burden of proof. That is consistent with the nature of the task that the Tribunal is required to carry out. It is also consistent with there being no presumption that the decision under review is correct. This was considered generally in McDonald v Director-General of Social Security[124] and follows from the general principles in s 43(1) of the AAT Act that the Tribunal “...may exercise all the powers and discretions that are conferred by any relevant enactment on the person ...”.
[124] (1984) 6 ALD 6 per Woodward, Northrop and Jenkinson JJ

I turn now to APRA’s Further Amended Section 37 AAT Act Statement (Statement) filed in relation to each of the three applications. Each has the same format and the same qualities. I will take that of VCC as an example. At first sight, it does not stand alone but refers to the delegate’s reasons for his initial decision in relation to VCA before it was reviewed by another delegate. On further examination, it seems that those references to his reasons are simply that: a reference to the appropriate parts of his reasons as an aide memoir but nothing more.

The Statement is divided into five parts. The first four deal with four sections of the SIS Act: ss 29, 55, 62 and 111. At the beginning of each section, the Statement sets out the finding of the delegate. In relation to s 29, for example, it states:
“The decision maker found that contrary to section 29 of the SIS Act, the Trustee failed to give APRA written notice in respect of a number of contraventions of its Instrument of Approval (‘the IOA’).”

Under that heading, the Statement sets out each finding of fact that the delegate made in relation to each of four conditions of the IOA. For example:

“Specific condition 4 of the IOA – Requisite Eligible Assets
At the time … was appointed administrator of the Fund, it did not have the requisite eligible assets and liquid assets of at least $100,000.”

Under each finding, are listed documents relied upon by the delegate in making the finding. Each document is, as a rule, described in one line and a reference is given for the document. I accept that there may be some errors in those references but I also accept that the applicants have been able to locate them despite some errors. Having done this in relation to each of the four headings, the Statement sets out the conclusions:

“10. On the basis that … [VCC] was a responsible officer of the Trustee at the time that the abovementioned contraventions occurred and on the basis of the number, nature and seriousness of the contraventions, the decision maker decided to disqualify [VCC] in accordance with section 120A(2) of the SIS Act (paragraphs 200-203 of the Statement of Reasons).”

What the Statement does not do is to set out how the delegate analysed and then weighed the material in the documents and how the results of that exercise led to the particular finding of fact. It does not give reasons for making the findings but does s 37(1)(a) require it to do so? All that it requires is that it give reasons for the decision. It has done that in so far as its ultimate decision is concerned.

The Statement adopts a minimalist approach but, for all that, it permits VCC to examine the reasoning process to the extent that it enables him to know the issues that the delegate considered and the material upon which he relied in making the decision. It does not enable him to see precisely how he made each finding of fact but it does, in my view, reveal enough for the purposes of a statement under s 37 of the AAT Act. It reveals enough to equip VCC with the information that he needs to know to address the issues. If he has other material that has not been referred to in the statement, he knows that he should produce it. He may consider that a different conclusion should be drawn from the material referred to in the Statement but that fact does not mean that the Statement is inadequate. If he considers that the delegate did not take all relevant issues into account, he knows that he needs to raise them. Those are matters that need to be developed by VCC and APRA in preparing for the hearing of the substantive application.

Consideration: the order of proceedings

Authorities in the courts regarding the order of proceedings in a court are not necessarily directly applicable in the Tribunal. It is not a forum in which a decision-maker presents its case and may then be exposed to a submission that the other party has no other case to answer and that the decision should be set aside. It is generally a forum in which the applicant presents its case first followed by the respondent. It proceeds by way of examination, cross-examination and re-examination of witnesses but the parties may well be permitted rather more latitude in re-examination than would be permitted in a court. At times, re-examination is permitted on re-examination if procedural fairness requires it. In so far as the lodgement of documents is concerned, a similar procedure is followed.[125] This means that each party is given an opportunity to consider the material lodged by the other, to pursue lines of enquiry that it may reveal and to file answering material. Only in that way can the Tribunal have any hope of reaching the correct or preferable decision rather than a decision that is based on limited and possibly untested material. There will, of course, be claims from time to time that material is privileged and, if it is, that material will not be available to it.
[125] See generally the Tribunal’s General Practice Direction issued on 1 July 1998.

There are substantial differences between those in the Tribunal and those in the Federal Court in which a regulatory body, such as the successor to the TPC the Australian Competition and Consumer Commission (ACCC), seeks the imposition of pecuniary penalties under legislation such as the TP Act against a respondent. The ACCC carries a burden of proof in adversarial proceedings. The judgment of the Full Court of the Federal Court in Australian Competition and Consumer Commission v FFE Building Services[126] illustrates, in brief, the factors that influence a court:
“ By requiring an individual respondent, prior to the closure of an applicant’s case, to file statements of evidence proposed to be given by the witnesses to be called by that respondent, such a respondent would be exposed to the risk that indirect or derivative evidence, being evidence obtained by using the material disclosed in the statement as a basis of investigation, could be tendered against the respondent. The provisional disclosure of information may set in train a process that may lead to the imposition of a penalty or may lead to the discovery of real evidence in support of the imposition of a penalty: Reid v Howard^[[127]] at 6.”[128]
[126] (2003) 130 FCR 37
[127] (1995) 184 CLR 1
[128] (2003) 130 FCR 37 at 14

The concern expressed in this passage is inapplicable to a merits review of an administrative decision imposing a penalty in the exercise of a power that is given as part of a regulatory scheme intended to ensure the prudent management of superannuation entities and so protect the public. Concern about limiting relevant enquiries and so the information that is made available to the Tribunal is inconsistent with its role even though that is a legitimate concern in a court considering the imposition of a penalty in an adversarial context.

In the context of this case, it seems to me that it is appropriate to follow the normal course and to require the applicants to file their SFCs first followed by APRA. The applicants are sufficiently informed of the issues and of the material that persuaded APRA to reach its decision. That material is a sufficient foundation on which the applicants can state the issues and contentions as they see them and ultimately lay their material. Having seen those issues and contentions, APRA may develop its issues and contentions differently but, as it is not defending a decision but taking part in a process to find the correct or preferable decision, it is entitled to do so. The applicants will have an opportunity to raise further issues and contentions and to lodge material in response.

DECISION

For the reasons I have given, I:
1.direct that in the proceedings relating to each of the applicants, the respondent is required to lodge as part of the documents lodged under s 37(1) of the AAT Act:
(1)the record of those parts of the examination of that applicant that:
(a)do not meet both of the criteria specified in s 287(2) of the SIS Act; and
(b)that are relevant to the review of the reviewable decision; and
(2)the records of those parts of the examinations of the other two applicants that are relevant to the review of the reviewable decision; and
2.decline to order the respondent to lodge further statements of reasons under s 38(1) of the AAT Act; and
3.direct, by dates to be determined:
(1)each of the applicants lodge his Statement of Facts and Contentions before the respondent;
(2)each of the applicants lodge his witness statements, reports and other supporting material before the respondent; and
(3)each of the applicants have an opportunity to lodge any Statement of Facts and Contentions and any witness statements, reports and other supporting material in reply to those of the respondent.

I certify that the one hundred and ten preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: ...............................................................

Jayne Rathjen Associate

Date of Directions Hearing           15 June 2006
Date of Decision  12 October 2006
Counsel for VCA & VCD            Mr S Anderson SC with Mr A Broadfoot
Solicitor for the VCA & VCD      Slater & Gordon
Counsel for VCC  Mr B Quinn
Solicitor for the VCC                   Slater & Gordon
Counsel for the Respondent         Ms F McLeod SC with Mr A Lewis
Solicitor for the Respondent         Australian Prudential Regulation Authority