Australian Crime Commission v. Wallace and Anor [2012] HCATrans 287 (16 November 2012)

Last Updated: 20 November 2012

[2012] HCATrans 287

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P17 of 2012

B e t w e e n -

AUSTRALIAN CRIME COMMISSION

Applicant

and

STEPHEN JOHN WALLACE

First Respondent

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

Second Respondent

Office of the Registry
Perth No P18 of 2012

B e t w e e n -

AUSTRALIAN CRIME COMMISSION

Applicant

and

ANDREW REGINALD KEITH FAGAN

First Respondent

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

Second Respondent

Office of the Registry
Perth No P19 of 2012

B e t w e e n -

AUSTRALIAN CRIME COMMISSION

Applicant

and

DAVID FRANK MARRAPODI

First Respondent

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

Second Respondent

Applications for special leave to appeal
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO PERTH

ON FRIDAY, 16 NOVEMBER 2012, AT 11.39 AM

Copyright in the High Court of Australia

MS S.J. MAHARAJ, QC: I appear with MR R.L. HOOKER for the applicant in all three matters. (instructed by Australian Government Solicitor)

MR L.M. LEVY, SC: I appear with MS A.M. PADMANABHAM for the first respondents in P17 and 19 of 2012. (instructed by Alana Padmanabham)

MS A.S. ROGERS: I appear for the first respondent in P18 of 2012.

MS MAHARAJ: The second respondent in all three matters has filed a submitting appearance.

HAYNE J: Yes, thank you. Yes, Ms Maharaj. I assume it is convenient that all three matters should be heard together. Is there any objection to that course? Very well. Yes, Ms Maharaj.

MS MAHARAJ: Your Honours, the issued raised by the application at page 72 of the application book is the construction of section 30(2)(b) of the Australian Commission Act 2002 and, in particular, the question whether the service of a valid section 28 summons is an element of an offence under this subsection. Section 30, your Honours, is set out at page 48, paragraph 73 of the application book. The critical words - - -

HAYNE J: Well, now, if you identify the question as that, and only that, what becomes of the possibility of a collateral challenge to the summons in the course of proceedings against the respondents?

MS MAHARAJ: Your Honours, the way we see the matter is that if the respondents wish to allege that collateral attacks should be permitted on a ground other than the ratio of the majority judgment, then they would have to file a notice of contention.

HAYNE J: Yes.

MS MAHARAJ: Upon grant of leave. The critical words - - -

HAYNE J: But, you say, the majority have held, do you, that service of a valid summons is an element of the offence?

MS MAHARAJ: Yes, your Honour.

HAYNE J: Yes.

MS MAHARAJ: The critical words in section 30(2)(b) to be construed are:

A person appearing as a witness at an examination –

The question is whether these words apply only to a person served with a valid section 28 summons or, to any person appearing at an examination, irrespective of whether he appears pursuant to the summons or voluntarily. The reasons, we submit, leave ought to be granted are, first, the majority judgment in the court below is attended with sufficient doubt. Second, this Court’s intervention is needed to settle the construction of this subsection in light of conflicting judicial opinions expressed not only in the court below by the majority with the Chief Justice dissenting, but other courts which we will address shortly.

The third point, your Honours, is that the majority judgment has significant practical ramifications for the present and pending prosecutions under section 32(b) and equivalent provisions in the State legislations, these being a corporative scheme and section 34A of the ACC Act which deals with content of the ACC in the context of such examinations.

Section 34A, your Honours, is at tab 1, the third page of the materials that has been filed with this Court and it was introduced by crimes legislation amendment Serious and Organised Crime Act (No 2) 2010 which is at tab 28 and the extrinsic material which is the explanatory memoranda to this legislation is at tab 38. Tab 38, your Honours, pages 178 to 181 gives insight into the policy reasons for the introduction of section 34A into the scheme of provisions dealing with examinations in order to deal with unco-operative witnesses who delayed and frustrated investigation into serious and organised crime as defined by the ACC Act by failing to answer questions at an examination and then delayed the finalisation of prosecutions that followed by taking technical objections.

The applicant relies, your Honours, on the affidavit of Ms Joanne Lynne Smith sworn 5 July 2012, application book page 116 to 167, which gives the Court statistics regarding the number of prosecutions that have been completed and are pending under this provision and the equivalent provisions in the State Act since 2006 to the date of the swearing of the affidavits. Your Honours will note from the affidavit that the following numbers of section 30(2)(b) prosecutions have been dealt with, paragraph 10, 2006 to 2007, 10, paragraph 12, 2007 to 2008, 10 or 2009 to 2010, 9 and for - - -

HAYNE J: You may take it that we have read all that, Ms Maharaj. Where do you say we most conveniently identify what you say to be the central error made by the Court of Appeal?

MS MAHARAJ: Your Honours, in the judgment of President McLure, paragraphs 40 and 41, that is appeal book page 39 and Justice Allanson, at 117, 118 at appeal book page 62. We identify these paragraphs as containing the ratio of the judgment of the majority.

We have also identified, your Honours, examples of similarly crafted provisions as section 30(2)(b) in the broader body of statute law in our summary of argument. That is at application book page 113, footnote 10, and the Administrative Appeals Tribunal Act, section 62(5) is at tab 4, and the Australian Securities and Investments Commission Act 2001, section 58(4) and section 219(2) is at tab 5.

The majority judgment affects, your Honours, the manner in which section 30(2)(b) offences are prosecuted including first the burden the prosecution bears, the oral and documentary evidence, including evidence from the examiners that has to be called by the prosecution, and the production of documents pursuant to summonses or subpoenas issued to a third party like the Australian Crime Commission involving invariably complex public interest immunity claims. This in turn impacts on the length and complexity of the prosecutions, all in the context often of continuing investigations into serious and organised crime, as defined.

HAYNE J: The immediate question, or the question arises immediately in the context of an application to set aside a subpoena, is that right?

MS MAHARAJ: Yes, your Honour.

HAYNE J: A question which is an interlocutory question now resolved by the Court of Appeal?

MS MAHARAJ: That is correct, your Honour.

HAYNE J: Trial of the offences charged will occur in the ordinary fashion?

MS MAHARAJ: Yes, your Honour, that is currently in abeyance.

HAYNE J: Are the points which it is now sought to agitate points that will be available to be taken by the accused – are they points that will remain available and live at the end of the trial?

MS MAHARAJ: Yes, your Honour.

HAYNE J: Why should we come in at this point of the process? Why should we interrupt the criminal trial process at this point if the points are alive and available at the end of trial?

MS MAHARAJ: Your Honour, the argument that emerges at this point in time would constitute in principle defences that could be argued in the substantive trial and we would say that it would save the courts a lot of time in resolving this point which not only affects the future conduct of this particular matter and the subpoena matter, but it also affects other pending prosecutions.

HAYNE J: Yes.

MS MAHARAJ: So, there is some utility in deciding the points sooner rather than later, your Honour, especially when it seems to be coming up in most of the pending proceedings. Further, one assumes that the collateral attacks on the summons involving often complex legal issues heard by judges alone ordinarily in the administrative law context would have to be left with juries, thus adding to the length and complexity of such trials. In the court below, the majority followed the Northern Territory Court of Appeal judgment in R v LB [2011] NTCCA 4 - this is at tab 9 of our material - even though that judgment dealt with a section 30(2)(a) offence, that is, failing to take an oath or an affirmation at an examination as required.

The majority held on the basis of LB that service of a valid summons is an element of an offence under section 32(2)(b). The different opening words to subsections 30(1) and (2) did not provide a sufficient basis for the majority in the court below to distinguish it. It did, however, for the Chief Justice who dissented. Even in the majority, one judge, President McLure expressed a preference in obiter remarks for a different constructional premise for section 30(2)(b), that is, a valid summons is a condition not an element of the offence than the one advocated in LB and the approach, in fact, taken by the majority below.

The Chief Justice dissented and at paragraph 6, application book page 30 said there was nothing in the language and context of section 30(2)(b) or any public policy reason which supported the conclusion that the power of the examiner to require the witness to answer questions depended upon the validity of the summons which may have compelled the attendance of the person examined.

We submit that the majority view is correct and the Chief Justice’s construction should be favoured for the following reasons. The language of section 30(2)(b) which is set out at application book page 48 and its surrounding provisions is clear. The power to examine conferred on an examiner by section 28(5) which is at application book page 47 is not expressed as being premised upon the service of a summons, let alone a valid summons. Second, the offence creating provision section 30(1) is premised on failures to do certain things by a person, served as prescribed with a summons to appear as a witness at an examination before an examiner, different words.

CRENNAN J: In terms of your single appeal ground that there was an error in the holding that the relevant respondent had a legitimate forensic interest in the documents summonsed, that is the unredacted portions of the documents, as I understand it?

MS MAHARAJ: Yes,your Honour.

CRENNAN J: Now, in that context, I know you have pointed to what was said by President McLure on page 39 in paragraph 39, where at the mid-point of the paragraph, her Honour distinguished between a point between the validity of the summons not being an element of the contravention under 30(2)(b), but referred to an alternative reason for collateral challenge, you might say, by making reference to the fact that the validity conditions the power to require the answer to the question. Is that encompassed by your ground of appeal?

MS MAHARAJ: No, your Honour, the way we read the judgment is that paragraph 39 contains obiter remarks of her Honour and she said she was not going to decide the point because it was not necessary.

CRENNAN J: Well, that might be a point against taking the point at this stage of the trial?

MS MAHARAJ: Your Honour, the construction issue has to be resolved in light of the ramifications that we have highlighted for other trials and this trial, but if the respondent wishes to contend that the judgment ought to stand on another footing - - -

CRENNAN J: This is back to the notice of contention point?

MS MAHARAJ: - - - on the condition footing, then the notice of contention has to be filed. But, what we pitch to this Court, your Honours, is the construction issue and we accept that our notice of appeal is not as precise as it should be, but the construction issue are taking the ration of the majority judgment. But, we do accept that if a notice of contention is filed, then it is possible that the issue of collateral attack may be agitated as well.

HAYNE J: If the Court of Appeal judgment remains unaffected, is a trial judge bound to hold that it is for the prosecution to establish that a summons was served and that the summons was valid?

MS MAHARAJ: Yes, your Honour. This is exactly what happened in the LB matter where the trial judge had ruled on the summons issue in similar terms and, subsequently, he followed that decision when he ruled substantively.

HAYNE J: And, for that purpose, the subpoena which has been issued would have an evident legitimate forensic purpose, would it not?

MS MAHARAJ: At the moment, it does, your Honour. This point, we say respectfully, adds to the utility of this vehicle for the grant of special leave at this point in time.

HAYNE J: And, if it were, on inquiry, found that the summons was not valid, on the Court of Appeal holding as it stands, the persons accused would be entitled to directed verdicts of acquittal?

MS MAHARAJ: Yes, your Honour.

HAYNE J: Would the prosecution have any appellate review open to it of that decision?

MS MAHARAJ: We would expect, your Honour, that they would, but I am not familiar with the precise provision.

HAYNE J: If you do, that would go into the melting pot of whether we should take it now or wait until we see what happens. If, in the end, the summons issue turns out to be a storm in the teacup, we have come into it, the prosecution is delayed. If, when the documents are produced, there can be no valid argument mounted that the summons is invalid, we seem to have had an unnecessary journey, have we not, Ms Maharaj?

MS MAHARAJ: Your Honour, that was reason for putting the affidavit before this Court, that the issue has ramifications – larger ramifications beyond this case, and it is likely that this precise argument – as it was in LB – will be agitated in the defence. So, we would respectfully say, that it would not be a waste of this Court’s time, or premature, to grant leave in order to decide the issue for the lower courts.

Your Honours, the other reasons why we say that the majority judgment is not only attended with sufficient doubt but may be clearly wrong, is that when one studies the structure of the whole legislation and studies section 30(2)(b) in its proper context, it is quite clear that there is a

textual dichotomy evident in the ACC Act where it treats persons summonsed differently from person appearing as witnesses.

The deliberate form of words a person appearing at a witness at an examination before an examiner appear again in subsection 30(4)(a) – this is in application book page 48 – thus giving direct use immunity to all witnesses appearing and not just summonsed witnesses by virtue of section 35, in circumstances where privilege against self-incrimination has been claimed. Further, other provisions in Division 2, Part II of the Act reinforce the textual dichotomy to illustrate section 31(1) – this is at tab 1A – which empowers a judge, upon application by an examiner when satisfied of certain things, to issue a warrant for the apprehension of a witness at an examination, requires the court to be satisfied by virtue of subsection (b) that a summons has been issued under subsection (28)(a).

The contrast is also evident in section 33 which is also at tab 1A at section 34 and section 34A which deals with the content of the ACC. There is nothing in the language of section 30(2)(b) or the Act as a whole to suggest that the Parliament intended the different legal regimes operate – that a different legal regime operate for section 30(2)(b).

Stepping outside the ACC Act, we have noted by way of examples at application book 109 footnote 2, other examples where the same formula as section 30(2)(b) has been used. The other judgments, your Honour, where the divergence of views are evident is the Australian Crime Commission v Magistrates’ Court of Victoria and Brereton [2007] 69 ATR. Those are our submissions.

HAYNE J: Yes, thank you, Ms Maharaj. Yes, Mr Levy, have you reached some agreement with the counsel for the other respondent about how submissions will be divided?

MR LEVY: May it please the Court, as I understand it, your Honours, counsel for the respondent in P18 of 2012 is simply going to adopt my submissions.

HAYNE J: Very well. Yes, Mr Levy.

MR LEVY: Your Honours, the special leave point posited by the applicant in these proceedings is, of course, whether the service of a valid summons under section 28(1) of the Act is an element of the offence. However, even if it were decided in the applicant’s favour, that would not resolve the issues that were litigated in the courts below. That is because the issues in the court below was whether, in fact, the first respondent had a legitimate forensic interest in the document’s summons.

My learned friend for the applicant, refers to the decision of her Honour, the President, in the decision below and noted that her Honour had merely formed a preliminary view with respect to how her Honour might deal with one of the issues. That being, whether, in fact, it is a pre-condition to the examiner compelling an answer that, in fact, the summons is valid. In the respondent’s submissions, whilst it is true that the Court of Appeal decided the case on the basis that the earlier decision in R v LB was not plainly wrong, and followed Farah Constructions and other cases, it is the case that the court below noted, particularly her Honour the President and Justice Allanson, that the pre-conditions to the compulsion of a person being required to answer the questions was valid to the summons itself.

Indeed, if I could take the Court to his Honour Justice Allanson’s reason for decision which appear at appeal book page 61 at paragraphs 116 and 117 and 118 of the decision which commence at about line 30 on page 61. Halfway down the paragraph, his Honour Justice Allanson says:

It is inconceivable, in my view, that the legislation requires an examiner to be satisfied of the matters set out in s 28(1A), and to record his or her reasons, before issuing a summons to require a person to attend, but can exercise compulsory powers to require a person to take an oath and answer questions, with the privilege against self incrimination abrogated, without any consideration of whether it is reasonable to do so, simply because the person happens to be present.

His Honour then goes on over the page and towards the end of paragraph 117 on page 62 his Honour says:

I am not convinced that the decision in R vLB is wrong, and I regard it as persuasive. I do not regard the fact that the present respondents have been charged under s 30(2)(b) and not s 30(2)(a) as a material difference that affects the result.

Accordingly, in my opinion, the validity of the summons is relevant to whether the respondents were required to answer questions, and the respondents have a legitimate forensic interest in documents relating to that issue.

Thus, it is not the case that his Honour Justice Allanson merely followed R v LB. His Honour noted, as the President did, that there was another road potentially to deciding the issues as to whether or not the applicant, the respondents in this case, had a legitimate forensic interest in the documents sought. So, as your Honours have noted, ultimately, even if the special leave point raised by the applicants is decided in their favour, we are still left with the position that these issues will still be live before the District Court. His Honour Justice Allanson also noted that, not only would they be live, but it would not preclude the respondents from bringing an application to stay the proceedings permanently on an abuse of process. That is an alternative proceedings that would be available to the respondents in this case. So for that reason alone, as your Honour Justice Hayne noted, it is preliminary to consider these matters.

The preferred position is the position that we submit the Court of Criminal Appeal in the Northern Territory came to, and that is that it is an element of the offence. We submit that a proper construction takes into account the entire provisions of the Act, including section 28, which set out the preconditions for the issuing of a valid summons. The Court will note that section 28(1)(a) requires the examiner to turn his or her mind to the issue of a valid summons and not only whether should it be issued, but whether it is reasonable in all the circumstances to do so.

We say that when one reads section 28(1)(a) together with section 30(2)(b), it demonstrates that it is clearly a precondition to the issue of a valid summons. With respect to the Chief Justice, we submit that his Honour the Chief Justice took, in our submission, a limited view of whether or not a person would be required to answer questions by focusing too much on section 30(2)(b) and ignoring the preconditions that an examiner is required to be satisfied of under section 28(1)(a).

HAYNE J: A further possible point of view is that paragraphs (a), (b) and (c) of subsection (2) of section 30 in their terms bespeak circumstances of compulsion. They are not immediately apt to the case of the voluntary witness. The voluntary witness is hardly likely to be refusing to take an oath or affirmation.

MR LEVY: With respect, that is clearly so. There are, of course, two mechanisms by which one could be before the examiner. One is voluntarily, and as your Honour Justice Hayne noted, you would not expect a person who appears voluntarily to then change his or her mind and then refuse to answer questions. These cases do not deal with the position of a voluntary witness. These are witnesses – they are under compulsion pursuant to a summons. So, we submit, that it is an entirely different situation altogether from a voluntary witness.

The other point that the respondents make is that the cases that the applicant refers to – particularly the case of JJ v ACC – which the applicant submits is at odds with the decision of LB. We note that the decision in JJ was an entirely different regime. In JJ v ACC, that was a case that involved a judicial review of proceedings where the onus was, indeed, on the applicant to satisfy the court that, in fact, the summons was not valid. In

criminal proceedings, of course, it is an entirely different onus of proof and, for those reasons, our submission is that The Queen v LB was correctly decided. But, in any event, the alternative routes discussed by her Honour the President at paragraph 39 and his Honour Justice Allanson in the decision at paragraphs 116 to 118, demonstrate that the resolution of the special leave point would not resolve the issues in this appeal. May it please the Court?

HAYNE J: Yes. Yes, Ms Maharaj.

MS MAHARAJ: Your Honours, LB was a subpoena case and at the substantive ruling there was criticism of the fact that the ruling in respect of the subpoena and the legitimate forensic purpose was not appealed. So, whilst the DPP may have a right of appeal, the ACC is a third party – a subpoenaed party to the prosecution – that has lost its rights because it has been forced to answer the subpoena, and that is happening in a large number of prosecutions.

Regarding JJ, it is true, your Honours, that that was the Full Court considering the LB judgment in the context of a judicial review. Nevertheless, the Full Court criticised the holding – and the reasoning – in LB. Similarly, Justice McClellan in the matter of Schneider v Brydon which is in our book of materials in New South Wales also criticised the ruling in LB which the majority followed in the present case and said he preferred the approach that was taken by the Full Court in JJ. In ACC v Magistrates Court Victoria and Brereton – this is number 10 in our list of authorities – Justice Smith of the Supreme Court in Victoria, in respect of a subpoena, reasoned that the validity of a summons could be questioned because it was a condition to a section 30 prosecution.

So, what we are faced with, your Honours, is various authorities at high levels giving differing constructions of the elements of section 30(2)(b) or section 30(2)(a). Therefore, we respectfully repeat our submissions, your Honours, that there is utility in answering that precise question at this level in order to guide the hand of the lower courts, not only in respect of the subpoenas, but the substantive prosecution’s hearings under section 32.

HAYNE J: Yes, thank you, Ms Maharaj. Ms Rogers, I regret to say, I did not even do you the courtesy of calling on you. I worked on the assumption that Mr Levy was right to say that you propose to adopt his submissions. Forgive my rudeness in not doing so, Ms Rogers, but do you wish to be heard?

MS ROGERS: No, thank you, your Honour.

HAYNE J: Thank you. We will adjourn for a time to consider the course we should take in this matter.

AT 12.12 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.15 PM:

HAYNE J: The actual orders made by the Court of Appeal in these matters concerning the availability of subpoenas to produce documents are not attended by doubt. We express no opinion about the questions of construction which the applicant seeks to agitate. Their determination must await a matter in which the construction of the relevant provisions is necessary to the decision. Special leave must be refused. With costs, Mr Levy? Can you resist costs, Ms Maharaj? In each matter with costs. Court will adjourn to reconstitute.

AT 12.16 PM THE MATTERS WERE CONCLUDED