West Tamar Council v Leonard
[2012] TASSC 68
•19 October 2012
[2012] TASSC 68
COURT: SUPREME COURT OF TASMANIA
CITATION: West Tamar Council v Leonard [2012] TASSC 68
PARTIES: WEST TAMAR COUNCIL
SMITH, Matthew
v
LEONARD, GaryINTEGRITY COMMISSION
FILE NO/S: 321/2012
DELIVERED ON: 19 October 2012
DELIVERED AT: Hobart
HEARING DATE: 6 September 2012
JUDGMENT OF: Evans J
CATCHWORDS:
Administration Law – Judicial review – Generally – Declaration – Integrity Commission – Notice served by – Notice required the production of documents – Validity.
Integrity Commission Act 2009 (Tas), ss47(1)(c) and 92.
Evidence Act 2001 (Tas), s118.
Commissioner of Taxation (Cth) v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499, applied.
Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403; MM v Australian Crime Commission [2007] FCA 2026; Commissioner of Taxation v Pilnara Pty Ltd (1999) 96 FCR 82, referred to.
Seven Network Ltd v Australian Competition and Consumer Commission [2004] FCAFC 267, (2004) 140 FCR 170; Singapore Airlines Ltd v ACCC [2009] FCAFC 136, (2009) 260 ALR 244, distinguished.
Aust Dig Administration Law [1001]
REPRESENTATION:
Counsel:
First Plaintiff: S B McElwaine
Second Plaintiff: S B McElwaine
First Defendant: P J Davis SC and B R McTaggart
Second Defendant: P J Davis SC and B R McTaggart
Solicitors:
First Plaintiff: Shaun McElwaine + Associates
Second Plaintiff: Shaun McElwaine + Associates
First Defendant: Crown Solicitor
Second Defendant: Crown Solicitor
Judgment Number: [2012] TASSC 68
Number of paragraphs: 66
Serial No 68/2012
File No 321/2012
WEST TAMAR COUNCIL and MATTHEW SMITH v GARY LEONARD and INTEGRITY COMMISSION
REASONS FOR JUDGMENT EVANS J
19 October 2012
The plaintiffs seek a declaration that a notice to produce, expressed to be issued under the Integrity Commission Act 2009 (Tas) by the first defendant, Gary Leonard, to the second plaintiff, Matthew Smith, is invalid.
The notice is as follows:
"NOTICE TO PRODUCE
Section 47(1) Integrity Commission Act
Notice number: NPR11-0037/12/17
To: Mr Matt Smith
West Tamar Council
Eden Street, RIVERSIDE TAS 7250
I, Gary Leonard, having been appointed as an assessor pursuant to section 35(2) of the Integrity Commission Act 2009 ('the Act') in respect of a complaint made to the Integrity Commission, and exercising the powers of an investigator, hereby give you Notice under section 47(1)(c) of the Act directing you:
To produce to me, or any person assisting me, the records, information, materials or things in your custody or possession or under your control, as described in the Schedule to this Notice.
The records, information, materials or things as described in the Schedule, are to be produced to me at the Integrity Commission, Level 2 199 Macquarie Street Hobart, or such alternative location as might be agreed by me, at a time and date convenient to you, but no later than 5pm on 23 April 2012
The contact officer for this matter is Gary Leonard who may be contacted by telephone on (03) 62164450
DATED at Hobart this 11 day of April 2012
Gary Leonard
Principal Investigation Officer
Assessor
SCHEDULE
All incoming and outgoing emails, including those that may have been deleted, in respect of the West Tamar Council email accounts of:
Michael (Mike) Sluce, (Statutory Planner, West Tamar Council)
Karin Van Straten, (Senior Statutory Planner, West Tamar Council)
Ian Howard, (Infrastructure Services Manager, West Tamar Council)
between the dates of 21 March 2010 and 23 June 2010."
The notice was served on Mr Smith, together with a three page document containing what it describes as important information for recipients of a notice under s47(1). I will refer to some of this information later in these reasons.
The plaintiffs contend that on a proper construction of the provisions of the Integrity Commission Act, the notice is invalid. In substance they contend that the notice does not contain information, that as a matter of statutory interpretation must be included in it, in order for it to be valid.
The Integrity Commission Act
The interpretation of a statute involves a consideration of its terms in the context of its subject matter, scope and ultimately its purpose, Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40.
The object of the Integrity Commission Act is to promote and enhance standards of ethical conduct by public officers by the establishment of an Integrity Commission, s3(1).
The objectives of the Commission are to:
"(a)improve the standards of conduct, propriety and ethics in public authorities in Tasmania; and
(b)enhance public confidence that misconduct by public officers will be appropriately investigated and dealt with; and
(c)enhance the quality of, and commitment to, ethical conduct by adopting a strong educative preventative and advisory role." (s3(2)).
The Commission is required to endeavour to achieve these objectives by, inter alia, dealing with allegations of serious misconduct or misconduct by designated public officers, s3(3).
The functions of the Commission include the receipt and assessment of complaints or information relating to matters involving misconduct by a public officer, referring complaints to appropriate entities, such as a relevant public authority, the Commissioner of Police or the Director of Public Prosecutions, and investigating complaints, s8(1)(f), (g), (h), and (i).
Of its own initiative the Commission may initiate an investigation into any matter related to misconduct, s8(1)(j).
When conducting or monitoring an investigation the Commission may gather evidence for the prosecution of persons for offences or proceedings as to a breach of a code of conduct or proceedings under any Act, s8(m).
The Commission may conduct inquiries into complaints, s8(n).
A complaint to the Commission about alleged misconduct by a public officer is to be made in writing and may be made anonymously, s33(1) and (1A).
Section 4 provides:
"4 Interpretation
(1) In this Act, unless the contrary intention appears –
misconduct means -
(a) conduct, or an attempt to engage in conduct, of or by a public officer that is or involves –
(i) a breach of a code of conduct applicable to the public officer; or
(ii)the performance of the public officer's functions or the exercise of the public officer's powers, in a way that is dishonest or improper; or
(iii)a misuse of information or material acquired in or in connection with the performance of the public officer's functions or exercise of the public officer's powers; or
(iv)a misuse of public resources in connection with the performance of the public officer's functions or the exercise of the public officer's powers; or
(b) conduct, or an attempt to engage in conduct, of or by any public officer that adversely affects, or could adversely affect, directly or indirectly, the honest and proper performance of functions or exercise of powers of another public officer –
but does not include conduct, or an attempt to engage in conduct, by a public officer in connection with a proceeding in Parliament;
…
public officer means a person who is a public authority or a person who holds any office, employment or position in a public authority whether the appointment to the office, employment or position is by way of selection or election or by any other manner …"
Upon the receipt of a complaint, the Commission's chief executive officer ("CEO"), may dismiss it, accept it for assessment, refer it to an appropriate person for action, or recommend that a commission of inquiry be established in relation to it, s35(1).
If the CEO accepts a complaint for assessment, the CEO is to appoint an assessor to assess whether the complaint should be accepted for investigation, s35(2). In conducting an assessment the assessor may exercise any of the powers of an investigator under Pt 6 of the Act, if the assessor considers it is reasonable to do so, s35(4).
Part 6 is comprised of ss44 to 59. Section 46(1) provides that subject to the Act and any directions issued by the CEO, an investigator:
"(a) may conduct an investigation in any lawful manner he or she considers appropriate; and
(b)may obtain information from any persons in any lawful manner he or she considers appropriate; and
(c) must observe the rules of procedural fairness; and
(d) may make any investigations he or she considers appropriate."
Section 47(1) is:
"47 Conduct of investigation
(1) In conducting an investigation under section 46(1), the investigator, by written notice given to a person, may require or direct the person to do any or all of the following:
(a)to provide the investigator or any person assisting the investigator with any information or explanation that the investigator requires;
(b)to attend and give evidence before the investigator or any person assisting the investigator;
(c)to produce to the investigator or any person assisting the investigator any record, information, material or thing in the custody or possession or under the control of a person."
Section 54(1) is to the effect that a person who, without reasonable excuse, fails to comply with a s47(1) notice, commits an offence punishable by a fine of up to 5,000 penalty units.
The asserted deficiencies in the notice
In par3.9 of their statement of claim the plaintiffs contend that upon a proper construction of the provisions of the Integrity Commission Act, a notice pursuant to s47(1)(c):
"(a)is required to disclose, by reasonable particularity, the substance or nature of the complaint which has been accepted for assessment;
(b)must sufficiently identify the matter which it is said confers jurisdiction upon the assessor to issue the notice such that a recipient is able to determine whether or not the notice has been issued in accordance with the provisions of the Act;
(c)must specify the information required to be produced with sufficient particularity to enable the recipient to know if the assessor is entitled to issue it;
(d)must reasonably relate to the subject matter of a complaint the subject of an assessment and must not require the production of documents which are irrelevant to such assessment;
(e)must be reasonably confined to the subject matter and scope of the powers conferred upon an assessor pursuant to the Act; and
(f)must not require, or purport to require, the production of documents by the person to whom it is addressed where such documents concern private or confidential information of third parties or contain communications which are the subject of legal professional privilege of third parties, without the express consent of those third parties."
In par4.1 of their statement of claim the plaintiffs contend that the subject notice is invalid as it:
"(a)fails to disclose the substance or nature of the complaint accepted for assessment;
(b)fails to identify the matter which it is said confers jurisdiction upon [Mr Leonard] to issue the notice;
(c)fails to specify the information required to be produced with sufficient particularity to enable Mr Smith or the council to know if Mr Leonard is entitled to issue it;
(d)does not reasonably relate to the subject matter of a complaint and purports to require the production of documents within a specified period, without confining the documents in any relevant way; and
(e)does not limit the documents to be produced by excluding documents which refer to or contain confidential or private information of third parties or information which is properly the subject of a claim of legal professional privilege by the third parties."
It should be noted that the plaintiffs, quite rightly, do not assert that the notice is invalid because it fails to disclose with reasonable clarity the record, information, material or thing that must be furnished. There is no question that it does. The decisions to which I will refer should be read with this in mind.
Authorities for the implication of entitlement disclosure conditions
Central to the contentions advanced on behalf of the plaintiffs is a line of authority which establishes that entitlement disclosure conditions can be implied into some statutes that authorise an entity to issue notices requiring a recipient to provide records or information. The primary authorities for this principle relate to the Trade Practices Act 1974, s155(1). At the outset of these authorities s155(1) relevantly provided:
"Where the Commission, the Chairman or the Deputy Chairman has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act … a member of the Commission may, by notice in writing served on that person, require that person –
(a)to furnish to the Commission … any such information;
(b)to produce to the Commission … any such documents; or
(c)to appear before the Commission … to give any such evidence … ."
Although subsequently amended, s155(1), as it was in the Trades Practices Act, and as it now is in that Act rebadged as the Competition and Consumer Act 2010, retains the terms that are relevant for present purposes as follows:
"… if the Commission, the Chairperson or a Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act … a member of the Commission may, by notice in writing served on that person, require that person …"
to furnish information, produce documents, or appear.
A convenient summary of the decisions the plaintiffs rely on is contained in Seven Network Ltd v Australian Competition and Consumer Commission [2004] FCAFC 267, (2004) 140 FCR 170, where Sackville and Emmett JJ, agreed with by Tamberlin J, said at pars[48] and [49]:
"48 Section 155(1) of the TP Act has been said to provide the ACCC (as it is now called) with a 'powerful investigative tool': SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357, at 359, per Fisher and French JJ. However, the power conferred on the ACCC and its officers is given for the purpose of enabling the ACCC to perform its functions under the TP Act: Riley McKay Pty Ltd v Bannerman, at 566, per Bowen CJ; WA Pines Pty Ltd v Bannerman [1980] FCA 79; (1980) 41 FLR 175, 187, per Lockhart J. This qualification receives support both from the language of s 155(1), considered in its context, and from the principle that statutory provisions are not to be construed as abrogating important common law rights or immunities in the absence of clear words or necessary implication: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543, at 553 [11], per Gleeson CJ, Gaudron, Gummow and Hayne JJ.
49 The authorities have established a number of propositions concerning the interpretation of s 155(1) of the TP Act. They include the following:
(i)In a context where refusal or failure to comply with a s 155 notice is punishable by imprisonment or fine, the notice must:
(a) convey with reasonable clarity to the recipient the information that must be furnished; and
(b) disclose that the ACCC is entitled to require the recipient to furnish the specified information:
Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1982) 57 FLR 368, at 374, per curiam.
(ii)The second of these requirements will not be satisfied unless it appears from the notice that the information sought is information 'relating' to one or more 'matters' of a kind described in s 155(1): Pyneboard v TPC, at 375; SA Brewing v Baxt, at 369-370; Bannerman v Mildura Fruit Juices Pty Ltd [1984] FCA 156; (1984) 2 FCR 581, at 584, per Bowen CJ and Neaves J. However, the question whether a notice discloses the necessary 'relatedness' is not to be approached in an 'over-technical or hypercritical way': Pyneboard v TPC, at 376. Moreover, the 'relatedness' is to a proper inquiry into the suspected offences: Panelboard Pty Ltd v Trade Practices Commission [1981] FCA 98; (1981) 59 FLR 395, at 407, per Fox J.
(iii)Section 155(1) does not require the Chairperson of the ACCC to have 'reason to believe' that a specified matter constitutes or may constitute a contravention of the TP Act. The Chairperson must, however, have reason to believe that the relevant person is capable of furnishing information relating to the matter specified in the notice: WA Pines v Bannerman, at 179, per Brennan J (with whom Bowen CJ agreed); TNT Australia Pty Ltd v Fels [1992] ATPR 41-190, at 40,598-40,599, per Gummow J. It follows that the Chairperson or other officer must believe that the person to whom the notice is directed is capable of furnishing information relating to the facts known or suspected: WA Pines v Bannerman at 180. In addition, there must be facts in existence which are sufficient to induce that belief in a reasonable person: George v Rockett, at 112.
(iv)The word 'matter' in s 155(1) is to be construed in its ordinary sense of an affair or thing: Melbourne Home of Ford Pty Ltd v Trade Practices Commission [1979] FCA 15; (1979) 36 FLR 450, at 474, per Franki and Northrop JJ; SA Brewing v Baxt, at 369. It refers to a body of facts which constitutes or may constitute a contravention of the TP Act. Whether or not the relevant body of facts constitutes a contravention is a matter of law and does not turn on the perception or knowledge of the ACCC or its officers: WA Pines v Bannerman, at 179.
(v)When s 155(1) speaks of a matter which may constitute a contravention, it refers to a body of facts not fully known and which may, when fully known, reveal themselves as constituting a contravention: WA Pines v Bannerman, at 179. The words 'may constitute' enable a court to judge from the material in the notice whether, if other facts which may or may not have occurred come to light, the whole body of facts would constitute a contravention: SA Brewing v Baxt at 370. It is not necessary for the court to determine whether a contravention has occurred; but equally it will not 'idly speculate' or 'draw on improbable circumstances' to uphold a Notice: SA Brewing v Baxt, at 370. An alternative formulation is that the court can take account of facts which may 'reasonably be suspected' to have occurred: WA Pines v Bannerman at 179.
(vi)Where the matter referred to in the notice, after allowing for undiscovered facts, is incapable of amounting to a contravention, the issue of the notice is not a valid exercise of the power conferred by s 155(1): SA Brewing v Baxt, at 371-372.
(vii)In view of the principle that a court should not adopt an 'over-technical or hypercritical approach' to the construction of a notice, there is no requirement that the notice 'plead' all the facts necessary to constitute a contravention or possible contravention of the TP Act: SA Brewing v Baxt, at 370.
(viii)Information which tends to negative a suspected contravention or liability to conviction or which tends to exculpate a person suspected to be a party to a contravention, is within the ambit of s 155(1). It follows that an inquiry under s 155 may relate to a defence or possible defence available to the suspected person: WA Pines v Bannerman at 180."
A further authority cited on behalf of the plaintiffs is the more recent decision in Singapore Airlines Ltd v ACCC [2009] FCAFC 136, (2009) 260 ALR 244, where Black CJ, Mansfield and Jacobson JJ, at pars[33] and [34], referred with favour to the propositions set out in the above passage from the Seven Network decision, and restated four of those propositions in the following terms:
"[35] First, in order to satisfy the requirements of s 155(1), it must appear from the terms of the notice that it seeks information 'relating to a matter' of a kind described in that sub-section, relevantly, one that constitutes or may constitute a contravention of s 45. In determining that question, the Court is not to adopt a 'precious', 'over-technical' or 'hypercritical' approach to the construction of the notice: Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1982) 57 FLR 368 at 375–376; Bannerman v Mildura Fruit Juices Pty Ltd [1984] FCA 156; (1984) 2 FCR 581 at 584; S A Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 369–370; Seven Network[2004] FCAFC 267; 140 FCR 170 at [49(ii)].
[36] Second, the word 'matter' is to be construed in its ordinary sense; it refers to a body of facts which constitute, or may constitute, a contravention of the Act: Melbourne Home of Ford Pty Ltd v Trade Practices Commission and Bannerman [1979] FCA 15; (1979) 36 FLR 450 at 474; W A Pines Pty Ltd v Bannerman [1980] FCA 79; (1980) 41 FLR 175 at 179; S A Brewing Holdings 23 FCR 357 at 360; Seven Network [2004] FCAFC 267; 140 FCR 170 at [49(iv)].
[37] Third, a matter 'may constitute' a contravention if it refers to a body of facts not fully known, and which may, when they are fully known, reveal themselves as constituting a contravention: W A Pines [1980] FCA 79; 41 FLR 175 at 179; S A Brewing Holdings 23 FCR 357 at 370; Seven Network[2004] FCAFC 267; 140 FCR 170 at [49(v)].
[38] Fourth, where the 'matter' referred to in the notice is incapable, after allowing for undiscovered facts, of amounting to a contravention of the Act, the issue of the notice is not a valid exercise of power: W A Pines [1980] FCA 79; 41 FLR 175 at 179; S A Brewing Holdings 23 FCR 357 at 371; Seven Network [2004] FCAFC 267; 140 FCR 170 at [49(vi)]."
The following needs to be said referable to the authorities relied upon by the plaintiffs. The issues raised in many of the authorities differ from those that are before me. I am not reviewing the circumstances that underpin the issuing of the impugned s47(1)(c) notice. I am only dealing with an application for a declaration that the form of the notice is invalid by reason of its failure to comply with implicit requirements of the Integrity Commission Act. Insofar as the authorities referred to are to the effect that it must appear on the face of a s155(1) notice that the documents and the like that are sought by the notice relate to "a matter that constitutes or may constitute a contravention of this Act", they have no direct application to the Integrity Commission Act, s47(1)(c), because it contains no similar requirement.
Other authorities
The Commissioner of Taxation (Cth) v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499, (Smorgon's Case) brings into focus a distinction that may be drawn between a provision similar to s155(1), which restricts the power to require the provision of information, documents and evidence to a specified matter, and provisions such as the Integrity Commission Act, s47(1)(c), which contains no similar limitation. The statutory provision that was the subject of Smorgon's Case is the Income Tax Assessment Act 1936 (Cth), s264(1), which was relevantly as follows:
"264 (1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, …
(a) to furnish him with such information as he may require; and
(b) to attend and give evidence … concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto."
As can be seen, s264(1)(b) restricts the entitlement to require the production of books, documents and other papers in the recipient's custody and control to those that relate to the income or assessment of the recipient or any other person. However s264(1)(a) contains no similar restriction. The notices that were the subject of Smorgon's Case relied on s264(1)(b). Smorgon's Case reports the decision of Stephen J at first instance and the judgments on the appeal from his decision. A primary issue in the case was whether the documents in question, the contents of safe deposit boxes at the bank's premises, were in the custody and control of the bank. A subsidiary issue was whether one form of the challenged notices (the short form), was invalid as it failed to identify any particular person whose income or assessment the documents to be produced were to relate. In the course of concluding that the short form notice was invalid, Stephen J said at 507 - 508:
"… I have assumed that s 264 (1) (b) requires that the Commissioner should have some specific person or persons' income or assessment in mind when he exercises the powers it confers; it will not be enough that the documents he demands turn out to relate to the income or assessment of some quite different person. It is upon this assumption that it becomes apparent that an addressee must know whose income or assessment is in question if he is to make any sort of a determination whether the Commissioner's notice is, in relation to any particular document, a lawful exercise of power.
If the Commissioner's power were to require the production of documents, without more, no objection could arise to this short form of notice: the addressee having documents in his custody and being required to produce what he had, that would then be an end to the matter. But in s 264 (1) (b) the power is not conferred in such broad terms; it is confined to those documents which relate to a person's income or assessment, that is the effect of the concluding words, 'relating thereto'."
As I read the above passage, Stephen J recognised that had the short form notice been issued pursuant s264(1)(a), no objection could have been made to the notice, as pursuant to s264(1)(a) the Commissioner had power to require information without more.
The construction of s264(1) was addressed on the appeal from Stephen J's decision. Mason J (as he then was), at 535 said that s264(1) should be construed according to its terms which are not to be cut down and distorted by the making of a vague and indefinite implication based on the existence of a prior section. His Honour went on to say:
"Except in one respect the powers given by s 264 should be circumscribed only by reference to the limitations which are expressed in that section. Thus, in s 264 (1) (b) the power to compel evidence is restricted to evidence 'concerning his or any other person's income or assessment' and the power to require production is confined to documentary records 'relating thereto', that is, to 'his or any other person's income or assessment'. However, the power to require information contained in par (1) (a) is not similarly limited. As it is a power given to the Commissioner for the purpose of enabling him to perform his functions under the Act it must be circumscribed by reference to this purpose."
Jacobs J at 541 and Murphy J at 547 in substance agreed with the relevant aspect of Mason J's decision.
Commissioner of Taxation v Pilnara Pty Ltd (1999) 96 FCR 82 was an appeal against a decision that entitlement disclosure conditions could be implied into the Income Tax Assessment Act, s264A, which deals with offshore information notices. It is relevantly as follows:
"264A(1)Where the Commissioner has reason to believe that:
(a) information relevant to the assessment of a taxpayer is:
(i) within the knowledge … of a person outside Australia; or
(ii) recorded …in a document outside Australia; or
(iii) kept … by means of a mechanical, electronic or other device outside Australia; or
(b)documents relevant to the assessment of a taxpayer are outside Australia …;
the Commissioner may, by notice in writing served on the taxpayer … request the taxpayer:
(c)to give to the Commissioner … any such information; or
(d)to produce to the Commissioner … any such documents; or
(e)to make copies of any such documents and to produce to the Commissioner … those copies."
At pars[34] – [39], Wilcox, Hill and Carr JJ said:
"34 The task at hand is, of course, to construe s 264A. The section does not contain an express requirement that any notice issued under it must contain an entitlement disclosure condition. The question is whether such a condition should be implied.
35 In our view, and with due respect to the primary judge, no such condition should be implied into s 264A.
36 We think that there are relevant distinctions between s 264A of the Income Tax Assessment Act and s 155 of the Trade PracticesAct.
37 First, s 155 is concerned with a 'matter' involving a contravention of the Trade Practices Act. There are many contraventions which might arise under that Act. That fact necessitates the implication of an entitlement disclosure condition in any notice issued under s 155. But s 264A of the Income Tax Assessment Act is only concerned with information and documents 'relevant to the assessment of a taxpayer'.
38 Secondly, the basis upon which the condition was implied in Pyneboard is absent in the present context. The implication in Pyneboard was expressed as being based on the circumstances that refusal or failure to comply with a notice issued under s 155 was punishable by imprisonment or fine (see p 374).
39 We acknowledge that the evidentiary exclusion in s 264A(10) may, on occasion, be a very serious matter. Accordingly we would not distinguish the s 155 cases solely on this basis."
In McCormack v Commissioner of Taxation (2001) 114 FCR 574, Sackville J rejected a number of submissions as to requirements that should be implied into the Income Tax Assessment Act, s264(1)(a), and said at par[46]:
"46 In my opinion, it is not necessary for a notice issued under s 264(1)(a) of the ITAA to reveal on its face that the Commissioner is entitled to require the information specified in the notice. It is enough for the notice or the covering letter to record that the information is required for the purposes of the ITAA, that being the only relevant constraint on the exercise of the statutory power. The covering letters in the present case were in these terms. The applicants' contention on this point therefore fails."
In James v Chief Commissioner of State Revenue (No 2) [2011] NSWSC 654, Gzell J dealt with a challenge to the validity of a notice issued under the Taxation Administration Act 1996 (NSW), s72. It is relevantly as follows:
"(1) The Chief Commissioner may require a person, by written notice, to do any one or more of the following:
(a) to provide to the Chief Commissioner … information that is described in the notice,
(b) to attend and give evidence before the Chief Commissioner or an authorised officer,
(c) to produce to the Chief Commissioner an instrument or record in the person's custody or control that is described in the notice.
(2) The Chief Commissioner must, if the requirement is made of a person to determine that person's tax liability, indicate in the notice that the requirement is made for that purpose, but the Chief Commissioner is not otherwise required to identify a person in relation to whom any information, evidence, instrument or record is required under this section."
At par[12] of the decision Gzell J distinguished this provision from statutory provisions that contain a limitation of the type contained in the Income Tax Assessment Act, s264(1)(b), and said that the Chief Commissioner's powers under s72 would, in the absence of a specific provision, be analogous to that with respect to the power in the Income Tax Assessment Act, s264(1)(a). Consistent with this view, at pars[83] – [89], Gzell J rejected a submission that the notices in contention were beyond power because they did not state on their face the Chief Commissioner's purpose in issuing them.
In AB Pty Ltd v Australian Crime Commission (2009) 175 FCR 296, Flick J dealt with challenges to the validity of notices issued under the Australian Crime Commission Act 2002 (Cth), s29, which deals with the power to obtain documents. It is relevantly as follows:
"(1) An examiner may, by notice in writing served on a person, require the person:
(a)to attend …; and
(b)to produce … a document or thing specified in the notice, being a document or thing that is relevant to a special ACC operation/investigation.
(1A)Before issuing a notice under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so."
One of the contentions advanced before his Honour was that the notices were not valid by reason of their failure to include any notation on their face of the purpose for which they had been issued, or the particular "special ACC operation/investigation" to which the documents sought were said to be relevant. At par[43], his Honour referred to authorities to the effect that a notice issued under the Trades Practices Act, s155, must satisfy an entitlement disclosure condition which required that the notice contained sufficient information to disclose the necessary relationship between the information or documents sought, and the matter in respect of which that material was sought. His Honour went on to say:
"44 But s 29 is not likewise constrained. The functions vested in the Commission by s 7A are so diverse that any field of personal or business activity may potentially fall within its reach. A person served with a notice under s 29 may not have any knowledge that any 'special ACC operation/investigation' is being undertaken and may have even less knowledge as to either the information available to the Commission exposing his own involvement or participation in any such operation or investigation. There may be good reason to keep such information confidential to the Commission. Both those persons who are improperly pursuing an activity of legitimate concern to the Commission and those persons who are completely innocent may have 'a document or thing' which could be relevant to the tasks entrusted to the Commission. A person upon whom a notice has been served may immediately realise or suspect why the Commission is requesting that the 'document or thing' be produced; others may have no knowledge. But how or why a 'document or thing' is required to be produced may not be able to be tested by reference to such other criteria as there is in other statutory contexts — for example, the document being a financial record potentially of relevance to income or the recovery of tax; or a corporate record potentially of relevance to a contravention of the 1974 Act.
45 Whatever may be the degree of knowledge of the person upon whom a notice under s 29 has been served, any notice must be construed according to its terms. The express legislative constraint imposed by s 29 which is invoked by the present applicants is the requirement that the notice 'specify' that which is required to be produced."
Observations in the same vein as the above have been made to the effect that subject to the terms of the legislation that governs the issuing of a notice, the notice may enable the issuer to fish for information. See for example Smorgon's Case at 536 and 546, Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403 at 430 and Australia and New Zealand Banking Group Ltdv Konza (2012) 289 ALR 286, at pars[64] - [66].
Should conditions as to the provision of information be implied?
As can be seen there is a marked divergence between the authorities that have imposed entitlement disclosure conditions and those that have not. In the main this divergence is a consequence of the differing terms of the legislation to which the authorities relate. This brings into focus the need to determine the issues raised before me in the light of the terms of the Integrity Commission Act.
As to the issues for my determination, it can be seen from pars3.9 and 4.1 of the plaintiffs' statement of claim, which are set out in pars[20] and [21] of these reasons, that save for the contention advanced in pars3.9(f) and 4.1(e) with regard to confidential, private or privileged information of third parties, each contention in one way or another complains of a lack of information. These contentions carry with them the proposition that it can be implied that information of the nature of that referred to must be provided in or with a notice issued pursuant to s47(1)(c). In effect it is contended that the notice must:
· disclose the substance or nature of the complaint;
· identify the matter which confers jurisdiction on the assessor;
· provide sufficient information with regard to that which is required to be produced to enable the recipient of the notice to know if the assessor is entitled to issue it; and
· provide sufficient information to show that it relates to the subject matter of the identified complaint and requires relevant documents.
Whilst one might well find provisions in a statute that provide grounds for implying conditions as to the disclosure of information along the lines of some or all of the above, they are not to be found in the Integrity Commission Act. There is no suggestion to be found in its provisions that information about actions taken pursuant to it should be freely available, indeed the contrary is the case. Many of its provisions relate to the confidentiality of such actions.
With regard to confidentiality, matters that I have in mind include the following:
· A complaint may be made anonymously, s33(1A).
· An assessor need only give notice of intention to assess a complaint if: "he or she considers it appropriate", s35(3).
· If it is decided to investigate a complaint the CEO need only give notice of this and related matters if "he or she considers it appropriate", s44(2) and (3).
· An investigation is to be conducted in private unless otherwise authorised by the CEO, s48.
· Before finalising any report the CEO need only provide a draft to persons who have a special interest in it "if he or she considers it appropriate", s56(1).
· If, having given the Board a report of an investigation, the CEO does not recommend that the complaint be dismissed or be the subject of an inquiry, it is for the CEO to recommend that it be referred to one of a number of designated entities for action. These are entities such as the principal officer of the relevant public authority, the Commissioner of Police or the Director of Public Prosecutions, s57. Upon receiving a report of an investigation and the CEO's recommendations, the Board's power to make a determination is similarly circumscribed, s58. Having made a determination, the Board is to give written notice of it to the principal officer of the relevant public authority, or "if it considers it appropriate" the public officer who was the subject of the investigation or any other person with a special interest in the matter, s59.
· It is only on the commencement of an inquiry by an Integrity Tribunal that the public officer who is the subject of the inquiry must be given written notice of it, including the allegation of misconduct and the substance of the evidence supporting it, s65.
· The persons designated in s94(1), which include an officer or employee of the Commission, assessor, investigator, member of the Board or Integrity Tribunal, and an inquiry officer or person appointed to assist an Integrity Tribunal, must preserve confidentiality in respect of all matters that come to their knowledge in the course of their employment or duties under the Act. A breach is an offence for which the maximum penalty is a fine not exceeding 5000 penalty units or imprisonment for a term not exceeding two years, s94(2).
· A person on whom a notice that is designated to be a confidential document is served, or to whom the existence of such a notice is disclosed, must not, without reasonable excuse, disclose the existence or contents of the notice or any matters relating to or arising from it. A breach of these requirements is an offence which attracts a penalty of 2000 penalty units, s98. Provisions that authorise the designation of notices and documents as confidential documents include ss35, 38, 44, 45, 47, 56, 59, 65, 71, 73, 78 and 89.
· A directions conference before the Integrity Tribunal is to be held in private, s68(4). Whilst Integrity Tribunal hearings are to be in public, the Tribunal may prohibit or restrict the public reporting of a hearing or the publishing of any evidence taken or received by it if it is satisfied that the public interest in that regard is outweighed by any other consideration, s76, Sch6, cls 1 and 4(1).
The plain objective of provisions such as the above is to ensure that complaints may be dealt with in confidence up until the time of a hearing before the Tribunal. It would fly in the face of these provisions to imply into the Integrity Commission Act conditions along the lines of those advanced by the plaintiffs. To do so, cannot be justified.
Save for the contention with regard to confidential or private information of third parties, the above is sufficient to dispose of the plaintiffs' contentions with regard to implied conditions that require that the subject notice contains further information. However, before leaving this aspect of the matter, I mention the following.
In essence, the plaintiffs' approach involves two steps. Firstly, they contend that it can be implied from the provisions of the Integrity Commission Act that a number of matters must be included in a notice issued pursuant to s47(1)(c). Secondly, they contend that if all or any of these matters are not included in a notice it is invalid.
With respect, this approach is too simplistic and stark, and harks back to a time when courts were more ready to find that actions that did not strictly comply with the requirements of a statute were invalid, that is, a nullity. It is no longer sufficient to simply identify an express or implied provision of a statute that has not been complied with in order to establish that an action taken pursuant to the statute is invalid. There is high authority that the test for determining the validity of an act done in breach of a statutory provision is to ask whether it was a purpose of the legislation that such an act should be invalid, Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ at 390. So in this case, not only was it incumbent on the plaintiffs to establish that the conditions upon which they relied were implied by the statute, but also that it was a purpose of the statute that an act done in breach of the particular implied condition should be invalid.
As to the reluctance of courts in recent times to invalidate actions done pursuant to a statutory provision that failed to fully comply with that provision, or an antecedent condition contained in the statute, see Emanuele v Australian Securities Commission (1997) 71 ALJR 717 and Woods v Bate (1986) 7 NSWLR 560 at 567. Jadwan Pty Ltd v Middletons [2007] TASSC 74, pars[11] – [15], is an application of this line of authority.
Reading the notice under challenge in the context of the Integrity Commission Act it can be inferred:
· that a complaint has been made to the Commission about alleged misconduct by a public officer, s33(1); and
· that the CEO of the Commission has accepted the complaint for assessment and referred it to Gary Leonard, as an assessor, to assess whether the complaint should be accepted for investigation, s35(1) and (2); and
· that Gary Leonard considers it reasonable to exercise the powers of an investigator under ss47(1), 35(4); and
· that in the exercise of those powers, Gary Leonard has directed the second named plaintiff to produce the information specified in the notice, s47(1)(c).
In my view this is sufficient for the notice to be enforceable. If there was a statutory deficiency in the form of the notice, its validity would depend upon whether it was a purpose of the Integrity Commission Act that the particular statutory deficiency should invalidate the notice. In this regard, attention would need to be given to the Act, s54(1), which is:
"54(1) A person who, without reasonable excuse, fails to comply with a requirement or direction under section 47 within 14 days of receiving it commits an offence.
Penalty:
Fine not exceeding 5 000 penalty units."
Clearly enough, some defects in a notice to produce, whether statutory or otherwise, could provide the recipient of the notice with a reasonable excuse for not complying with it. Establishing that an objective of the statute is that a notice with a particular statutory defect is invalid may be more difficult in circumstances where that defect provides the recipient of the notice with a reasonable excuse for not complying with it.
Confidential, private or privileged information of third parties
In par3.9(f) of the plaintiffs' statement of claim they contend that upon a proper construction of the provisions of the Act, a notice "must not require, or purport to require, the production of documents by the person to whom it is addressed where such documents concern private or confidential information of third parties or contain communications which are the subject of legal professional privilege of third parties, without the express consent of those third parties".
In par4.1(e) of the plaintiffs' statement of claim they contend that the notice is invalid as it "does not limit the documents to be produced by excluding documents which refer to or contain confidential or private information of third parties or information which is properly the subject of a claim of legal professional privilege by the third parties".
The short answer to these contentions is that the Act includes no express requirement that any information on a third party's rights with regard to confidentiality, privacy or privilege be included in the form of a notice issued pursuant to s47(1)(c), and there is no basis for implying a requirement to this effect into the Act.
The Act contains no relevant provisions with regard to the confidential or private information of third parties. It contains some provisions that address claims of privilege and the privilege of Parliament. Privilege is defined in s4, claims of privilege are dealt with by s92, and the primacy of the privilege of Parliament is acknowledged in s100.
Section 92 is relevantly as follows:
"92 Claims of privilege
(1) This section applies if a person claims privilege in respect of –
(a)any requirement or direction of an assessor exercising the powers of an investigator under Part 6;
…
to … produce any record, information, material or thing.
(2) A person may, during an assessment of a complaint under section 35, an investigation under Part 6 or an inquiry under Part 7, claim privilege and refuse to –
(a) …
(b) produce any record, material or thing.
(3) If a claim of privilege is made under subsection (2), the assessor … may withdraw the requirement or direction to –
(a) …
(b) produce any record, material or thing.
(4) If the requirement or direction to –
(a) …
(b) produce any record, material or thing –
is not withdrawn, the assessor, … must issue a notice to comply with the requirement or direction.
(5) A person must comply with the requirement or direction under subsection (4) or make application to the Supreme Court, within 14 days of being given notice to comply, for the Court to determine the claim of privilege.
(6) A person who makes application to the Supreme Court under subsection (5) must give notice of the application to the Integrity Commission and the Integrity Commission is taken to be a party to the application.
(7) The Supreme Court may determine that the answer, information or material is –
(a) privileged; or
(b) not privileged; or
(c) partly privileged.
(8) The assessor … must give effect to any determination or order or other direction made by the Supreme Court.
(9) …
(10) If a person who is subject to a notice to comply does not apply under subsection (5), the person is not entitled to claim privilege as a reasonable excuse in respect of –
(a)any requirement or direction of an assessor exercising the powers of an investigator under Part 6;
…
to provide information or explanation, answer any question or produce any record, information, material or thing.
(11) If the Supreme Court does not determine that a claim of privilege exists and the person who is subject to the notice to comply does not comply with the notice, that person is not entitled to claim privilege as a reasonable excuse for not complying with the requirement or direction of an assessor, investigator, chief executive officer, inquiry officer or Integrity Tribunal.
(12) Nothing in this section prevents a person entitled to claim privilege from waiving its application to any record, information, material or thing and a waiver once made cannot later be revoked."
The only information on privilege that was provided to the recipient of the subject notice is contained in a three page document served with the notice. That document is headed: "Important information for recipients of a notice under section 47(1)". It includes the following:
"Claims of privilege
The powers conferred on the Integrity Commission by section 47(1) of the Act may not automatically be avoided by a claim of privilege.
If you seek to claim privilege in respect of any matter contained in this Notice, the Integrity Commission may withdraw the requirement or direction in accordance with section 92(3) of the Act. If the requirement or direction is not withdrawn, a further written Notice to comply with the requirement or direction will be issued. You will be obligated to comply with that further Notice within 14 days, or make application to the Supreme Court to determine the claim of privilege. Section 92 of the Act sets out the procedure that is to be followed to determine a claim of privilege.
As the recipient of this Notice, you should consider, where necessary, seeking appropriate legal advice as to whether a third party may be able to assert privilege over any documents you are required to produce."
If the Act could be construed as requiring that the recipient of a s47(1)(c) notice be informed of the possibility that a third party may have a claim of privilege in any of the documents covered by the notice, then, in my view, that requirement would have been satisfied by the last paragraph of the information set out above. In this regard, see the approach taken in Australian Securities and Investments Commission v Sigalla (No 2) (2010) 271 ALR 164, White J at par[47].
In his written submissions, on behalf of the plaintiffs, Mr McElwaine contends that the information that accompanied the subject notice is positively misleading because it purports to impose a requirement on the recipient which is not authorised by the Act. For reasons that I will turn to a little later, Mr McElwaine contends that s92 does not apply to the recipient of the subject notice, and accordingly the references made to s92 in the information that accompanied the notice is misleading. On this basis Mr McElwaine contends that the notice is beyond statutory authority.
Before proceeding further, I should say something about privilege. In the absence of a legislative intention to oust privilege, it applies to documents that are the subject of a notice such as that in issue, Baker v Campbell (1983) 153 CLR 52, and Commissioner of Taxation v Citibank Ltd (supra). It is beyond question that a claim of privilege may be made referrable to documents that are the subject of a notice pursuant to s47(1)(c). Section 92(1) expressly recognises such a claim.
In the context of this matter generally, the decision in Commissioner of Taxation v Citibank Ltd warrants attention. It dealt with a search conducted pursuant to the Income Tax Assessment Act, s263. Section 263(1) provides that an officer authorised by the Commissioner of Taxation "shall at all times have full and free access to all buildings, places, books, documents and other papers for any of the purposes of this Act, and for that purpose may make extracts from or copies of any such books, documents or papers". Citibank Ltd applied to the court for a review of a number of matters, one of which arose from the failure of the officers who conducted the search that is the subject of the decision to provide Citibank Ltd with a practical or realistic opportunity to ascertain and test claims of legal professional privilege. As a consequence of this failure it was held that the manner in which the right of access had been exercised went beyond power. See Bowen CJ and Fisher J at 414 to 419, and French J (as he then was) at 437 and 438. Whilst this aspect of the decision is informative on the need to provide the recipient of a notice with a reasonable opportunity to claim privilege, it is not authority as to what, if anything, the form of a notice of the nature of that in question must contain with regard to privilege.
A further issue dealt with in Commissioner of Taxation v Citibank Ltd is of some relevance to the proceedings before me. It relates to a contention that the authorisations for the search that is the subject of that decision were invalid as they did not specify the occasion for the exercise of the power, the premises to be entered or the document or classes of documents to be inspected. This contention was rejected by Bowen CJ and Fisher J at 412 and 413. French J said at 432 that the language of s263(1) does not support such a limited construction, and at 434 his Honour said all that was required was proof of the general authorisation of the officer and:
"There can be no superadded requirement that it show on its face the premises to be searched and the books, documents and other papers which are the subject of the search. In this regard, the approach which would generally require these details to be shown reflects the imposition of ancillary procedural rules that cannot be found in the language of the section."
A case which addresses the proposition that a person other than the recipient of a compulsory production notice should be afforded an opportunity to claim privilege in respect of the documents to be produced is MM v Australian Crime Commission [2007] FCA 2026. In that case the applicants claimed legal professional privilege in relation to documents that had been produced by persons other than the applicants in response to notices issued under the Australian Crime Commission Act. The essence of their argument was that each notice was invalid because no reasonable opportunity to make a claim for legal professional privilege had been afforded to the applicants (as distinct from the recipients of the notices) before the recipients were required to produce the documents in question. Whilst Emmett J accepted that an authority issuing a compulsory production notice must provide the recipient of the notice with a reasonable opportunity to claim privilege, both on behalf of the recipient and on behalf of others, his Honour said at par[36]:
"36 However, there is no requirement for such an authority to give clients of the recipient, as distinct from the recipient, a reasonable opportunity to make claims for privilege before enforcing the compulsory production notice. The most that is required is that the recipient of such a notice must be afforded the opportunity of asserting legal professional privilege, either on the recipient’s account or on account of another person, such as a client. It has not been suggested that any recipient of a notice in issue in the present proceeding was not given an opportunity to obtain legal advice or that any claim for privilege made by a recipient, on behalf of the recipient or a third party, was not respected."
I return to Mr McElwaine's contention that the information that accompanied the subject notice is positively misleading because it purports to impose a requirement on the recipient with regard to s92, which has no application. Besides s92, provisions relevant to this contention are:
· The Integrity Commission Act, s4. It is as follows:
"4 Interpretation
(1) In this Act, unless the contrary intention appears –
privilege includes any of the following:
(a) all the privileges set out in Part 10 of Chapter 3 of the Evidence Act 2001;
(b) the privileges of spouses and others set out in sections 18, 19 and 20 of the Evidence Act 2001;
(c) the privileges of the Parliament; …"
· The Evidence Act 2001, Pt10 of Ch3. It deals with, amongst other things, legal privilege and contains s118 which is as follows:
"118 Legal advice
Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of –
(a) a confidential communication made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c) the contents of a confidential document, whether delivered or not, prepared by the client, lawyer or another person –
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client."
As I understand it, the argument advanced on behalf of the plaintiffs relies on the following propositions:
(1) The combined effect of the Integrity Commission Act, ss4 and 92, and the Evidence Act, s118, is that the only claim that can be made in respect of legal professional privilege under the Integrity Commission Act, s92, is one that is sustainable pursuant to the Evidence Act, s118.
(2) The Evidence Act only applies to proceedings in a Tasmanian court, s4(1).
(3) By reason of the words "Evidence is not to be adduced", at the commencement of the Evidence Act, s118, coupled with s4(1), a person is only entitled to claim legal professional privilege pursuant to s118 in circumstances where evidence is to be adduced in proceedings in a Tasmanian court.
(4) The delivery of documents to an assessor in compliance with a notice under the Integrity Commission Act, s47(1)(c), does not amount to adducing evidence in proceedings in a Tasmanian court for the purposes of the Evidence Act, s118. See Esso Australia Resources Ltd v Commissioner of Taxation(Cth) (1999) 201 CLR 49 at 55.
(5) In result the Evidence Act, s118, and in turn the Integrity Commission Act, s92, have no application to such a delivery, and accordingly the subject notice is misleading because it purports to impose a requirement based on the Integrity Commission Act, s92, when that section has no application.
Even if propositions (2) to (4) above are correct, the contention must fail as proposition (1) is wrong. Proposition (1) is advanced on the erroneous premise that the definition of privilege in the Integrity Commission Act, s4, is exclusive. It is not. It is an inclusive definition. There is no reason to deny the word privilege as used in the Integrity Commission Act, s92, its ordinary meaning and scope. Accordingly, there is no reason to exclude from its embrace the various forms of common law privilege that are available. They include the privilege against self-incrimination, legal professional privilege, penalty privilege, forfeiture privilege and ecclesiastical censure privilege, see Alishah v Gunns Ltd [2010] TASFC 6, par[8]. It may be that the latter three of these forms of common law privilege are not substantive rules of law that have application beyond judicial proceedings. Nonetheless it is clear that the recipient of a s47(1)(c) notice may be able to claim in aid a privilege other than that dealt with in the Evidence Act, s118. Accordingly the information contained in the document that accompanied the s47(1)(c) notice is not misleading.
For these reasons I refuse to make the declaration sought by the plaintiffs.
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