X v Australian Prudential Regulation Authority

The case of X v Australian Prudential Regulation Authority (APRA) concerned a judicial review application brought by X and another appellant (referred to as "Y") against APRA. The appellants sought to restrain APRA from acting on a "preliminary view" formed by its Senior Manager that X and Y were not "fit and proper" to hold senior management positions within a foreign general insurer. The dispute centred on whether APRA could use evidence previously given by the appellants before the HIH Royal Commission in its decision-making process, and whether such use would contravene section 6M of the *Royal Commissions Act 1902* (Cth). The matter was heard by the High Court of Australia.

The central legal issues before the High Court were: (1) whether section 6M of the *Royal Commissions Act 1902* (Cth) prevented APRA from using evidence given by the appellants before the HIH Royal Commission when determining their fitness and propriety to act as senior managers under section 25A of the *Insurance Act 1973* (Cth); and (2) whether any potential disqualification of the appellants by APRA would constitute a "disadvantage" arising "for or on account of" their evidence to the Royal Commission. The Court was required to interpret the meaning of "disadvantage" and the phrase "for or on account of" within the context of section 6M.

The High Court reasoned that section 6M of the *Royal Commissions Act* protects witnesses from suffering a disadvantage "for or on account of" giving evidence, meaning the disadvantage must be motivated by the act of giving evidence itself. The Court held that APRA's consideration of the appellants' evidence, in the proper discharge of its statutory functions under the *Insurance Act*, did not constitute a disadvantage arising "for or on account of" the evidence. The Court distinguished between the act of giving evidence and the content of that evidence, finding that while the content of the evidence might inform APRA's decision, any disadvantage flowing from the proper application of regulatory provisions was not "for or on account of" the evidence being given. The Court concluded that APRA was not victimising the appellants in the sense contemplated by section 6M.

The High Court ordered that the appeal be allowed in part, setting aside paragraph 1 of the Federal Court's orders and substituting a variation to a question posed to the primary judge. This variation clarified that the answer to whether APRA's use of the evidence contravened section 6M was governed by the construction of section 6M alone, and that answer was "No". The appeal was otherwise dismissed with costs.