Macleod v Australian Securities Commission P39/2000 [2001] HCATrans 545 (24 October 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P39 of 2000

B e t w e e n -

MALCOLM MACLEOD

Applicant

and

AUSTRALIAN SECURITIES COMMISSION

Respondent

Application for special leave to appeal

GLEESON CJ

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON WEDNESDAY, 24 OCTOBER 2001, AT 12.36 PM

Copyright in the High Court of Australia

MR P.W. NICHOLS: May it please your Honour, with my learned friend, MR W.B. HARRIS, I appear for the applicant. (instructed by William B. Harris)

MR D.J. BUGG, QC: May it please the Court, I appear with my learned friend, MR L.R.M. FLETCHER, for the respondent. (instructed by Director of Public Prosecutions (Commonwealth))

GLEESON CJ: Mr Nichols.

MR NICHOLS: If your Honours please, this matter comes down to two points, which can be readily, quickly, disposed of. The first is the issue of the right of the prosecutor to maintain the appeal. The point was made in the quotation and in the underlying portion of Part IV, paragraph f of the submissions: the quotation from Byrnes, at paragraph 58. If this is right, and we argue that it is, Hosken was wrongly decided, and hence the basis of the decision in the court below is destroyed. I would respectfully refer to the quotations in subparagraphs j and k in support thereof. As for the second point, the consequence is that it is not enough to point to a co-operative state between the State and the Commonwealth.

This my learned friend does, and from there derives the authority to appeal. That section is a law with respect to trade and commerce, because it involves a share trading on the Australian Stock Exchange. I refer to my learned friend's paragraphs 55 and 75. Thus, interstate transactions are inseparably connected, and the result is that that section 998 - which was, of course, not this section with which we are considering now - does not need to be read down. Mr MacLeod was charged with conduct likely to induce the purchase of securities, and not securities on the stock market. That point is made quite obviously, or quite strongly, I should say, by Mr Justice Owen in the case appealed from. Therefore, can section 999(a) be seen as a law with respect to trading corporations or interstate trade?

In the case of O'Halloran, a very significant case, Mr Justice of Appeal Heydon has dealt with that issue. I particularly refer to Mr Justice of Appeals Heydon's decision at paragraphs 39, 47, 55 and 69. He has determined that it is not so. We contend that my learned friend must be able to show that the federal law which provides the authority was a valid process.

GLEESON CJ: Mr Nichols, we thought we might be assisted by hearing what Mr Bugg has to say at this stage.

MR NICHOLS: If you think so, your Honour.

GLEESON CJ: Yes, Mr Bugg.

MR BUGG: Thank you. Your Honours, in so far as this matter is concerned, and the points taken by the applicant, there are some distinctions between the process which was undertaken, and the parties involved in that process, to the situation which this Court examined in both Byrnes and Bond, and also, of course, the - - -

McHUGH J: It is not a point that is favourable to you. The distinction is not one that is favourable to you, is it? No doubt your client was entitled to make an application for leave to appeal under the Justices Act, since it was a party to the appeal, and by operation of various State laws that were picked up by section 79 of the Judiciary Act, the Full Court had jurisdiction to hear the appeal. But that was subject to two matters. First of all, that as a matter of State law, your client had power to institute appeals conferred on it, whereas in Byrnes, the point was whether, as a matter of Commonwealth law, a consent to that conferral was as wide as the actual conferral of power by State law. Now, it is on that first point that it seems to me that you are in trouble, unless Hosken is right. Hosken relies on section 11 which is an excluded provision under the Securities Commission statutes, is it not?

MR BUGG: No, it is not an excluded provision - - -

McHUGH J: Is it not?

MR BUGG: I do not believe I have the full text of the statute, the volume of statutes. But I certainly - - -

McHUGH J: It is expressly excluded by section 58, that is, of the Western Australian Act.

MR BUGG: Yes, that is right, but - - -

McHUGH J: That is the problem of the Full Court's decision in Hosken. It saw the incidental power contained in section 11(4) of the ASC Act as justifying the right of appeal, but that is contained in a Commonwealth law and not a State law, and section 11 is in Part 2 of the ASC Act, which is expressly excluded by section 54 of the Western Australian Corporations Act. So you have no authorisation, it seems to me, at the moment, as a matter of State law, for ASIC to institute these appeals. I mean, it is very complex.

MR BUGG: I appreciate that, your Honour, and 20 minutes is hardly fair. That is almost a confession that this matter needs more time to be agitated, and that is not a concession I would like to make. The situation in terms of the authorisation for the conferral of powers, of course, must be seen in light of just what jurisdiction the court was exercising in this particular matter and, of course, it was - - -

McHUGH J: I know, but that is another problem, is it not?

MR BUGG: Well, it is - - -

McHUGH J: A lot of the courts below thought they were in State jurisdiction, and now you concede, quite correctly, that they were always in federal jurisdiction.

MR BUGG: That is correct. Your Honour raised that this time last year, and it has not taken us a year to come to that acceptance. Yes, certainly. That misconception, however, is not fatal to the outcome.

McHUGH J: No, I think that is probably right, because section 79 probably picks up the same law - - -

MR BUGG: Yes, it does.

McHUGH J: - - - as the Full Court referred to, but you come to this vital question, it seems to me, as to whether or not you can point to a State law which gives the ASC power to institute the appeals conferred on that. In that respect, it is different from Bond and Byrnes, which looked for a Commonwealth law which gave consent to the conferral of power which was as wide as the actual conferral of power, and then raise a 109 point.

MR BUGG: The distinction, though, is also, of course, the nature of the appeal which was being undertaken in Bond and Byrnes, and the strict approach which had to be applied in seeking or identifying an express grant of the power to appeal. That, of course, we would say, from Davern v Messel, is not so in this particular case, because here we are dealing with a quite different appellate function. We are dealing with an appellate function which seeks to sustain the outcome of the original prosecution. In other words, there was a conviction before the magistrate. That was overturned on appeal to a single judge or the Commissioner, and by the process of further appealing to the Full Court, all that the prosecutor or the party, ASIC, was trying to do in this case was sustain that which it obtained at first instance. So the double jeopardy barrier or hurdle which confronted us in both Bond and Byrnes is not present here - - -

GLEESON CJ: That is the point of your argument that this was incidental - - -

MR BUGG: Yes.

GLEESON CJ: - - - that here, there is no doubt about the original authority to prosecute. What you are seeking to do by this particular appeal, in these particular circumstances, was to maintain the result that you got from your original prosecution.

MR BUGG: That is correct, yes.

GLEESON CJ: That might be a very important matter in the ultimate resolution of this, Mr Bugg, but it is a little difficult to avoid the conclusion that this raises a fairly important issue, is it not?

MR BUGG: It does, and I would not seek to persuade the Court otherwise. The detail which had to be gone into to present our position is a fair indication of the breadth of the potential application of an outcome of this case adverse to the position we take, and - - -

GLEESON CJ: Even if you are ultimately right, it may be important to get it settled.

MR BUGG: Well, I have heard Justice McHugh on a number of occasions say, "Don't cite special leave results to us, it is not law". It would certainly be good to have the law, your Honour, but I had hoped to - perhaps in a little more than 20 minutes - persuade your Honours that it would save the Court's time to deal with the matter today. But as I say, I would not attempt to argue that this is not an important matter.

McHUGH J: The real difficulty I have is the reliance on 11(4), which seems to me to be excluded by section 58 of the Western Australian law. Section 58 excludes Part 2 of the ASC Act, and section 11(4) is in there.

MR BUGG: Yes, but ASIC still has that power, under 11(4) of its Act.

McHUGH J: Yes, but it has to do two things, has it not? It has to show, as a matter of State law, it was empowered to institute the appeal, and then it has to show also, as a matter of Commonwealth law, the Commonwealth consented to that conferral of State power in terms as wide as what the State purports to authorise. It was that second aspect that the prosecutions failed in Bond and Byrnes, but it is the first one, it seems to me, to be part of the problem here.

MR BUGG: Yes. As I say, your Honour, I accept the importance of the matter and I can - - -

GLEESON CJ: Maybe it is a matter that would warrant some expedition.

MR BUGG: It certainly would, your Honour.

GLEESON CJ: Mr Bugg, there are some people who appear to wish to interpret any decision on our part to look at a matter as being a threat to hold it invalid, but it does seem that if we were to grant special leave, we ought to give the case some expedition.

MR BUGG: Yes.

McHUGH J: Well, particularly after the delay. I was astonished to find the special leave application had not come back to us. On the last occasion, I suggested it could be done by video link.

MR BUGG: Yes, I have no explanation for that at all, your Honour. I have only recently become involved in the matter. If your Honours will just bear with me. Yes, I cannot take the matter any further, and I would seek a direction in the way in which your Honours are clearly intended, that the matter be dealt with expeditiously.

GLEESON CJ: In this matter, there will be a grant of special leave to appeal. I will indicate that the matter should be given some expedition when it comes to fixing a hearing date for the appeal.

AT 12.50 PM THE MATTER WAS CONCLUDED