Zhen v Mo & Ors
[2009] VSC 273
•30 June 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 7266 of 2008
BETWEEN :
| DE WEI ZHEN | Plaintiff |
| - and - | |
| MIN ZHI MO and others (according to the schedule attached) | Defendants |
| - and - | |
| WESTPAC BANKING CORPORATION | Third Party |
| AND BETWEEN: | |
| MIN ZHI MO and M.S. INTERNATIONAL TRADING PTY LTD (ACN 094 263 582) | Plaintiffs by Counterclaim |
| - and - | |
| DE WEI ZHEN | Defendant by Counterclaim |
JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 December 2008 | |
DATE OF JUDGMENT: | 30 June 2009 | |
CASE MAY BE CITED AS: | De Wei Zhen v Min Zhi Mo and Ors | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 273 | |
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PRACTICE AND PROCEDURE – Appeal from decision of Associate Justice upholding objection to production of documents under subpoena – Objection by Commissioner of State Revenue – Reliance on secrecy provisions in First Home Owners Grant Act 2000 – s 50 First Home Owners Grant Act 2000.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R K J Meldrum QC and Mr J R T Love | Australian Legal Advisory Centre |
| For the Commissioner of State Revenue | Ms P Neskovcin | Legal Services Branch State Revenue Office |
| No appearance by or on behalf of any other party |
TABLE OF CONTENTS
The Act................................................................................................................................................. 2
Submissions........................................................................................................................................ 2
Conclusions......................................................................................................................................... 6
HER HONOUR:
This is an appeal from a decision of an Associate Justice upholding the objection of the Commissioner of State Revenue (“the Commissioner”) to the plaintiff’s subpoena issued on 16 October 2008 directed at the Director of the State Revenue Office (“the subpoena”). The appeal proceeded as a hearing de novo under r 77.06(7) of the Supreme Court (General Civil Procedure) Rules 2005.
The plaintiff seeks compliance with the subpoena. The documents sought relate to applications under the First Home Owners Grant Act 2000 (“the Act”) for a First Home Owner Grant or First Home Bonus by Mr Mo, the second defendant, and Ms Zhen who is the third defendant. There is no issue now as to the documents relating to Ms Zhen who has consented to their release. Mr Mo does not consent to the release of the documents relating to any application made by him (“the documents”).
There is no dispute about the relevance of the documents to the issues between the parties in this proceeding. The proceeding is brought under Part IX of the Property Law Act 1958 against the first defendant. The first defendant admits having been in a domestic relationship with the plaintiff. Mr Mo is the son of the first defendant. The documents sought relate to the ownership of a penthouse property at Southbank, purchased in Mr Mo’s name. The plaintiff alleges that Mr Mo applied for a First Home Owner Grant under the Act in relation to the purchase and this allegation is denied by the defendants.
The Commissioner objects to the production of the documents on the basis that they are covered by secrecy provisions in s 50 of the First Home Owner Grant Act 2000 (“the Act”) and maintains that he is prohibited from producing them.
The Commissioner relies upon the Court’s decision in R v Clarkson(No. 2)[1] and a 1 June 1995 ruling of a former Commissioner made well before the enactment of the subject provision (“the Ruling”).
[1][1982] VR 522.
The Act
Section 50 of the Act contains the secrecy provisions relied upon by the Commissioner:
50. Protection of confidential information
(1) In this section—
"protected information" means information
about an applicant or applicant's spouse for a
first home owner grant obtained under or in
relation to the administration of this Act.
(2) A person is subject to a duty of confidentiality
if—
(a) the person is, or has been, engaged in the
administration or enforcement of this Act; or
(b) the person has obtained access to protected
information (directly or indirectly) from a
person who is, or has been, engaged in the
administration or enforcement of this Act.
(3) A person who is subject to a duty of
confidentiality must not disclose protected
information except as permitted by sub-section
(4).
Penalty: 60 penalty units.
(4) Protected information may be disclosed—
(a) at the request or with the consent of the
person to whom the information relates or a
person acting on that person's behalf; or
(b) in connection with the administration or
enforcement of—
(i) this Act or a corresponding law; or
(ii) a taxation law; or
(c) for the purposes of legal proceedings; or
(d) as authorised under the regulations.
(5) For the purposes of the Freedom of Information
Act 1982, protected information is information of
a kind to which section 38 of that Act applies.
The purpose of the Act is set out in s 1:
1. Purpose
The purpose of this Act is to encourage and assist
home ownership, and to offset the effect of the
GST on home ownership, by establishing a
scheme for the payment of grants to first home
owners.
Submissions
Counsel for the Commissioner argues that, properly interpreted and, despite the absence of any express limitation to this effect, s 50(4)(c) limits the circumstances in which the Commissioner may exercise a discretion to disclose the protected information to production in legal proceedings to which the Commissioner is a party.
The Commissioner argues that s 50 ‘s purpose is to maintain secrecy and to prohibit the disclosure of protected information to unauthorised persons. He contends that the Court should be slow to allow access to information collected under his investigative powers (under Part 3 Division 2), bearing in mind that the Act makes it an offence for an applicant to make a false or misleading statement in connection with an application (under Part 4) and that information is collected to ensure that public funds are properly expended.
Counsel for the Commissioner argues that, if the Act were not interpreted in this way, it might compel the disclosure of protected information relevant to a potential investigation, prejudicing or compromising that investigation. Counsel maintains that, if the Commissioner were to disclose protected information for the purposes of legal proceedings to which he was not a party, there would be a significant increase in the types of people who would be able to require disclosure of information. Further, the undesirable and unintended result would be the Commissioner’s involvement in litigation between private litigants. Counsel argues that s 50 demonstrates a legislative intent to strictly limit the situations in which the Commissioner may exercise the discretion to disclose protected information. As far as the ambit of s 50(4)(c) is concerned, counsel also cites what she argues is the significant absence of the word “any” before “legal proceedings”.
The Commissioner also contends that, in any event, he has a discretion as to whether or not he makes disclosure in the context of a legal proceeding covered by s 50(4)(c) and that, if he does not choose to do so, he is prohibited from disclosing the material under sub-s 50(3) under the subpoena.
The Commissioner seeks support for his preferred construction of s 50(4)(c) in secrecy provisions under State taxation laws, urging the Court to maintain consistency in so far as that legislation prohibits the Commissioner from disclosing protected information.
He cites the secrecy provisions in s 92(1)(b) of the Taxation Administration Act 1997. Section 92 is relevantly in the following terms:
92. Permitted disclosures to particular persons
(1) A tax officer may disclose information obtained under or in relation to the administration of a taxation law-
(a) with the consent of the person to whom the information relates or at the request of a person acting on behalf of that person; or
(b) in connection with the administration or execution of a taxation law (including for the purpose of any legal proceedings arising out of a taxation law or a report of those proceedings); or
(c) in connection with the administration or execution of a law of another Australian jurisdiction that is prescribed by the regulations to be a reciprocal taxation law for the purposes of this section; or
(d) in accordance with a requirement imposed under an Act; or
(e) to an authorised recipient … or
(f) in connection with the operation of Landata, in the case of information obtained under or in relation to the administration of the Land Tax Act 2005.
Counsel for the Commissioner also refers to the Payroll Tax Act 1971 provisions considered by O’Bryan J in R v Clarkson (No. 2).[2] Section 5(1) of the Payroll Tax Act 1971 was then relevantly in the following form:
5(1)Except as provided by sub-s(2) or in accordance with the requirement under the law of the Commonwealth relating to Census or Statistics a person shall not disclose any information or publish any document or part of a document obtained by him in connection with the administration or execution of this Act, unless the disclosure or production is made –
(a)with the consent of the person from whom the information or document was obtained;
(b)in connection with the administration or execution of this Act or the regulations; or
(c)for the purpose of any legal proceedings arising out of this Act or the regulations or of any report of any such proceedings.[3]
[2][1982] VR 522.
[3]The Payroll Tax Act1971 was repealed on 1 July 2007.
In R v Clarkson, O’Bryan J held that:
On its proper construction I consider sub-s(1) would prohibit the production or publication of the document of the kind now sought by [counsel], notwithstanding that in a strict sense it came into existence within the office of the Commissioner. Inevitably, the prohibition against disclosure of information obtained by the Commissioner in connection with the administration of the Act would be breached when those documents are produced from their proper custody.[4]
[4][1982] VR 522 at 525.
Counsel for the plaintiff seek compliance with the subpoena. They concede that the information sought would be protected information within the meaning of s 50(1) of the Act. They note, however, that the expression “legal proceedings” is not defined in the Act. They also assert that the interpretation for which the Commissioner argues would be inconsistent with his prima facie obligation to make disclosure of all relevant matters in any proceeding involving him. Counsel refer to the widely framed exceptions in sub-ss (4)(b)(i) and (ii) of s 50 of the Act.
Counsel for the plaintiff argue that s 50(4)(c) is clear and unambiguous and that effect should be given to the ordinary meaning of the words, absent a result so irrational that it would force the Court to conclude that the drafter had made a mistake.[5]
[5]See : Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 55 ALJR 434 at 437 per Gibbs CJ.
Counsel for the plaintiff argue that, where a party to litigation uses an appropriate subpoena to seek information for valid purposes connected with legal proceedings, the Commissioner is obliged to provide the information in answer to the subpoena. He cannot object on the basis of the s 50(3) prohibition if he does not choose to make disclosure under s 50(4)(c). They rely upon the express exception in s 50(3).
Counsel point out that the Ruling related to provisions of revenue legislation administered by the Commissioner expressed in substantially different terms from the provisions in s 50(4)(c). They contend that the Court should be more tentative in circumventing such confidentiality requirements.
Counsel for the plaintiff go on to refer to the origins of the coercive power to subpoena documents and the Court’s power to control its process to ensure that subpoenas are not abused. In this case, they point out, the plaintiff has undertaken to the Commissioner not to use any material made available to her, other than in pursuit of her claim in this proceeding.
The plaintiff argues that the right of a party to have access to any material relevant to litigation is a fundamental one. It is protected by an established presumption of statutory interpretation that a common law right or doctrine ought not be set aside by statute which is unclear or uncertain as to its effects in that regard. They refer to Potter v Minahan[6] where O’Connor J accepted a principle of interpretation from Maxwell on Statutes that:
It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law without expressing its intention with irresistible clearness.
[6](1908) 7 CLR 277.
Finally, counsel for the plaintiff contend that the Commissioner has failed to recognise that the First Home Owners Grant Act is an entirely separate and different piece of legislation from the revenue statutes which he is more generally responsible to administer. They contend that this legislation is not part of a general statutory scheme of legislation designed to raise revenue and therefore cannot be read by reference to what are the meanings of terms or limits on disclosure specific to revenue Acts.
Conclusions
I agree with the submissions of counsel for the plaintiff that the provisions of s 50(4)(c) are clear and unambiguous and that there is no warrant for reading them down in the context of revenue legislation provisions of the type to which the Commissioner has referred. Parliament had the opportunity to limit the provision in the same way as it had chosen to do in the other statutes to which the Commissioner refers.
The Act is not of the revenue raising type, forming part of a statutory scheme requiring consistent interpretation.[7] The secrecy provisions of the Act relate to disclosure in the context of an application for funds, rather than in the context of the mandatory reporting required for the purpose of assessment of liability for taxation; applicants for funds are not compelled to involve themselves in the process which requires disclosure of the relevant information.
[7]Counsel relied upon Commissioner of Taxation v Tang; Commissioner of Taxation v District Court of SA (2006) 96 SASR 55; Javorsky v Commissioner of Taxation (2005) 58 ATR 604.
Essentially, the Commissioner maintains that he is prohibited from making disclosure under s 50(3), that his discretionary power under sub-s 50(4)(c) does not require him to do so and that, if he declines to exercise his discretion in favour of production, he may not disclose the material under the general prohibition.
In my opinion, sub-s 50(4)(c) does not prohibit the disclosure sought. It does not have the effect of the Payroll Tax Act provisions considered by O’Bryan J in Clarkson. I am not persuaded that the ambit of the permissive power should be limited to disclosure in proceedings to which the Commissioner is a party for any of the reasons advanced.
Nor am I persuaded that I ought to limit the Commissioner’s power of disclosure by reference to the confidentiality provisions of other legislation, such as the Family Law Act 1975 (Cth).[8] The limiting words are not there and, in my opinion, there is no statutory purpose evident in s 50 of the Act warranting the interpretation of the clear words of the sub-section to interfere with a party’s right to avail herself of the Court’s power of compulsion to ensure that all relevant documents are before it.
[8]Counsel relied upon R v Liddy(No. 2) (2001) 79 SASR 401.
I would not be persuaded, in any event, that the clear words of the sub-section should be read as the Commissioner contends because of any risk of him becoming involved in litigation by reason of his production of material relevant to proceedings to which he is not a party. I note that, if there were any potential prejudice to an investigation or enquiry under the Act, the Commissioner might object to produce documents on the grounds that of public interest immunity under the principle stated by Gibbs ACJ in Sankey v Whitlam.[9]
[9](1978) 142 CLR 1 at 38.
The Commissioner does have a discretion under s 50 (4)(c) which does not compel him to do anything. He has a power to do what is otherwise forbidden and is permitted to disclose the information sought by the compulsory subpoena process of the Court. If he refuses to comply with the subpoena, declining to exercise his discretionary power of disclosure on the ground of the general prohibition, his objection is of no avail, given the exception in the subsection.
In the absence of any other sustainable objection, the Commissioner must comply with the subpoena.
The appeal should be allowed.
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SCHEDULE OF PARTIES
| No. 7266 of 2008 | |
| BETWEEN: | |
| DE WEI ZHEN | Plaintiff |
| - and - | |
| MIN ZHI MO | Firstnamed Defendant |
| JIA REN MO | Secondnamed Defendant |
| SUE ZHEN | Thirdnamed Defendant |
| - and - | |
| WESTPAC BANKING CORPORATION | Third Party |
| AND BETWEEN: | |
| MIN ZHI MO | Firstnamed Plaintiff by Counterclaim |
| M.S. INTERNATIONAL TRADING PTY LTD (ACN 094 263 582) | Secondnamed Plaintiff by Counterclaim |
| - and - | |
| DE WEI ZHEN | Defendant by Counterclaim |
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