AB (a pseudonym) & Anor v Independent Broad-based Anti-corruption Commission [2023] HCATrans 180 (7 December 2023)

Last Updated: 12 December 2023

[2023] HCATrans 180

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M63 of 2023

B e t w e e n -

AB (A PSEUDONYM)

First Appellant

CD (A PSEUDONYM)

Second Appellant

and

INDEPENDENT BROAD‑BASED ANTI‑CORRUPTION COMMISSION

Respondent

GAGELER CJ
GORDON J
STEWARD J
GLEESON J
JAGOT J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 7 DECEMBER 2023, AT 10.00 AM

Copyright in the High Court of Australia
MR N.M. WOOD, SC: If it pleases the Court, I appear with MR C.J. TRAN and MR B. BROMBERG for the appellants. (instructed by Slater & Gordon Lawyers)

MR P.J. HANKS, KC: Your Honours, I appear with MS F.I. GORDON, KC and MR J. S. MAXWELL for the respondent. (instructed by Independent Broad‑based Anti‑corruption Commission)

GAGELER CJ: Thank you, Mr Hanks. Before you begin, Mr Wood, I note that the parties have consented to Justice Edelman participating in the hearing by reading the transcript.

MR WOOD: Thank you, your Honour. The issue in the appeal concerns the proper construction of the expression “adverse material” in section 162(3) of the IBAC Act. Your Honours will have received, I think, our two‑page outline, we address that question of construction and propositions at paragraphs 1 through to 8. It will also be necessary, briefly, to address why the relief that we seek should be granted. In the event that the Court were persuaded of our construction of “adverse material”, I propose to do that at the end, at proposition 9.

Out of an abundance of caution, I note the approach we have taken to the presentation of oral submissions in this matter, conscious of the criminal prohibition created by 166 of the Act. We do not propose to refer orally to any of the contents of the draft report, including by reference to the Court of Appeal’s reasons. Obviously, we have made submissions about the contents of the report in writing. If necessary, we will make non‑revelatory submissions by reference to documents, should that need arise.

Your Honours, where I wish to start is the Court of Appeal’s approach to the construction of “adverse material”. We submit that the Court of Appeal’s approach was critically informed by a view that it took that the scheme of the Act, and in particular, section 166 of the Act, suggested that 162(3), the duty imposed therein, could only require disclosure of contents of a draft report, the essential logic being, it would be anomalous in light in particular of 166 if IBAC might be required to disclose to a person information that travelled beyond what is in a draft report.

GORDON J: Does the Court of Appeal’s approach proceed on the basis that section 162 is an exhaustive statement of the rules of natural justice in relation to the comments that you are identifying?

MR WOOD: I think implicitly it probably does. I think it is also fair to say that in respect of the part of the argument that we are presenting now, that was part of the appeal below, it was not put that the fairness that was owed to our clients resided, if you like, in a common law implication outside of the scope of 162(3). The argument was focused on what 162(3) required.

GORDON J: And you are proceeding on the basis that it is an exhaustive statement?

MR WOOD: Yes, except perhaps insofar as what be implicit in the very terms of 162(3). So, we locate the content of the duty in the four corners of 162(3). If I can take the Court to the core appeal book, and in particular, the judgment of the Court of Appeal, and invite the Court to turn to paragraph 135, which is located at page 115 of the core appeal book, within the discussion of what was IBAC’s notice of contention concerning the proper construction of “adverse material”, the Court of Appeal at 135, halfway through – or in the whole of the paragraph, really, saying:

Having regard to the careful and detailed approach that the IBAC Act adopts to the protection of confidential or sensitive information –

in particular referring to 166, that I referred to earlier, the court thinks that that element of the scheme is “instructive”, and the court says:

It strongly suggests that the natural justice obligation in s 162(3) is confined to the adverse comments or opinions in the draft report –

And then I note and emphasise:

and any other contents of the draft report which disclose the basis upon which –

those comments are intended to be included. Consistently, if one turns to paragraph 164 of their Honours’ reasons, albeit in a part of the reasons that, having dealt with the notice of contention, now deal with the question of whether a reasonable opportunity on that premise was provided, the court, halfway through 164 says:

Obviously, for such an opportunity to be reasonable, it would not be sufficient for IBAC to provide to the applicants the adverse comments and opinions in bare, conclusionary form. Rather, a reasonable opportunity required IBAC to also provide any other contents of the draft report which disclose the basis –

of those comments or opinions. The critical point of functional departure between the appellants’ case and the Court of Appeal’s construction of the provision is, we say, that properly construing “adverse material”, that includes the evidence that IBAC proposes to rely on, including “adverse comments or opinions”, and, therefore, the duty in 162(3) would require disclosure of the substance of such evidence, even if, coincidentally, IBAC does not see fit to include or to recite or summarise the effect of that evidence in its report. Hence, we say, the duty applies irrespective of the contents of the draft report, and discharge of the duty might therefore require giving more than what a draft report contains.

STEWARD J: So, if we can just get some clarification about that, Mr Wood. You are not seeking the evidence itself?

MR WOOD: We are not seeking the documents, your Honour.

STEWARD J: Or the transcripts, for example?

MR WOOD: It need not be the transcript.

STEWARD J: So, you are happy if there is a disclosure of what is called the “substance or gravamen” of the evidence.

MR WOOD: Yes, yes.

STEWARD J: And is that not what the Court of Appeal said you were entitled to, and then there was a dispute about whether the report – draft report – did that or did not do that?

MR WOOD: The short answer is, no, your Honour, because the Court of Appeal started from the wrong premise. It started from the position that “adverse material” means only findings or “comments or opinions”. It then explored the concept of reasonable opportunity through the premise that the obligation in 162 could only involve disclosing what happens to be in the draft report, which, therefore, slims down whatever might be the scope of the duty.

Then, in terms of the examples that had been explored in argument before the Court of Appeal, most obviously, one sees from paragraph 177 of the Court of Appeal’s judgment, where this hits dirt, because the Court of Appeal at 177, at least in respect of one example, accepted that the body of the draft report did not give my clients the substance of what was said against them, but the logic of the Court of Appeal’s resolution of that point is consistent with what we say is their wrong approach to the very premise, because the Court of Appeal will basically say, nevertheless, you have what IBAC said, limited though it might have been, the substance of the evidence not having been disclosed, your opportunity is now to critique that, you can say, well, we were not given fairness.

Now, we say there is a fundamental difference between fairness in the sense of an opportunity to respond to the substance of information on the one hand, which is what we say we are entitled to, and on the other hand, an opportunity merely to critique whether fairness has been afforded, which is ‑ ‑ ‑

GORDON J: Can I just take that into two stages? At 166 and 167, at core appeal book 122 to 123, the Court of Appeal sets out a process that might be gone through in terms of the substance or gravamen. You do not take issue with 166 or 167, or at least 166? In terms of method, we are just talking about method, for the moment.

MR WOOD: No, we do not, and we take out of 166 – it is an interesting point, 166 – we take it as implicit from 166, the Court of Appeal in that paragraph is recognising that the duty in 162(3) may be discharged by different methods. One method might be disclosing the draft report. There might be other methods, but we say one of the flaws in the Court of Appeal’s analysis, however ‑ ‑ ‑

GORDON J: No, no, I am not dealing with flaws, I am just dealing with method for the moment. I am trying to work out what the confines of your debate are. So, you accept that the methods that are identified in 166 are available methods?

MR WOOD: Yes.

GORDON J: In the discharge of the duty of 162(3)?

MR WOOD: Yes.

GORDON J: Right. Then, if that is right, what is the error in the Court of Appeal’s approach in their judgment, the application of those methods to the facts?

MR WOOD: That is what I seeking to use 177 to illustrate. The error is that because the Court of Appeal, back at 135, at the outset, says all you can get is what is in the draft, therefore, if the draft does not as a matter of fact set out, in any particular respect, the substance of evidence being deployed against you, you do not get it. What you get, however, is just the opportunity to say, well, we have not been afforded much fairness because we have not been disclosed the substance. So, it is ‑ ‑ ‑

STEWARD J: We will say for 177 – I thought the Court of Appeal said that the report did set out the substance or gravamen of the evidence against your client.

GORDON J: It did, at 167, consistent with the methods in 166.

MR WOOD: It did, and we say, though, that it has proceeded down that pathway having established the premise of what “adverse material” means, which was, we say, the wrong starting point. Now, once ‑ ‑ ‑

STEWARD J: Again, just going back to doing this in steps. Your ground 1 is: what does “adverse material” mean?

MR WOOD: Correct.

STEWARD J: It means or at least includes the substance or gravamen of the evidence which supports the adverse claim or comment.

MR WOOD: Correct.

STEWARD J: That is what it means, and you perceive Mr Hanks to have a different view about that?

MR WOOD: Absolutely. The IBAC say that “adverse material” means just the adverse comment or opinion. The approach of IBAC is to say, to the extent that there is extra, the extra is provided through the reasonable opportunity window in 162(3), but we are faced with a Court of Appeal judgment that, in its premise, in its construction of “adverse material” – an element of the court’s construction of “adverse material”, informed by 166, is that it must be confined to whatever – “any” was the word they used – any evidentiary basis that happens to be disclosed in the draft report. So, if the draft ‑ ‑ ‑

BEECH-JONES J: Mr Wood, so your construction point would crystallise in a case where IBAC included a bare conclusion of, say, corrupt conduct?

MR WOOD: Correct.

BEECH-JONES J: But nothing else?

MR WOOD: Correct.

BEECH-JONES J: Then you say, on this construction, a reasonable opportunity could not be afforded because all we would ever get was that and nothing more?

MR WOOD: Because you have to start with the subject matter. The subject matter is the “adverse material”. If the “adverse material” is the evidence and if it happens not to be, contingently, in the exercise of IBAC’s discretion, set out in the draft report, you will not get it.

GLEESON J: Mr Wood, just to be technical for a moment, I think I do understand that argument, but the error that you are identifying is not the error that is specified in the notice of appeal, is it?

MR WOOD: We say that it is. We say that the error, which was the error at the premise by the Court of Appeal, is the construction of “adverse material”. We say that if one construes “adverse material” correctly, then it almost inevitably leads to the relief that we seek, and 177 is an example of that. Now, I am acutely conscious of the submissions that our friends have made in writing and in their outline suggesting that we are exceeding the scope of leave.

Can I outline our answer to that, if it is a concern now. It is a four‑part answer. The first is this. An appeal is from orders, not reasons. The relief that we sought in the application for special leave was substitutionary orders. In our notice of appeal, we have primarily sought substitutionary orders; in other words, the orders that the Court of Appeal should have made – declarations, prohibition and the like. In our notice of appeal, we have protectively said any other relief the Court thinks fit – I will come back ‑ ‑ ‑

STEWARD J: Just on that, do you accept that grounds 1 and 2 of your application for special leave both went to the relief sought?

MR WOOD: In the special leave application, ground 1 was expressed as only a question of construction. In ground 2, the tenor of that argument was, we said, we did not get a reasonable opportunity to be provided that adverse material, and then we ran an alternative argument which we have been denied. The alternative argument was that even if we are wrong about “adverse material”, then we still did not get a reasonable opportunity, accepting the Court of Appeal’s legal premise. We have been denied the ability to argue that point, and we do not.

STEWARD J: Is there a disconnect between being limited to ground 1 and the relief you seek?

MR WOOD: The view that we took in light of the confined grant of special leave where the application sought substitutionary relief, the view that we took – right or wrong, no doubt we will be told – is that it only made sense to understand the limited grant of special leave in light of the relief we have sought if we could say, if we are right on “adverse material”, then we would be allowed to persuade the Court that, on that premise, we ought to win. Because obviously we accept that you cannot get relief merely by saying that a court construed a section of an Act wrongly.

So, we were denied one pathway, we have not pursued it. We have taken that approach to the pathway that we thought we were allowed to pursue. Now, if we are wrong about all of that and if the Court is of the view that it exceeds the special leave or, in any event, it is not appropriate in some way for the Court to be considering, on the premise that we are right on “adverse material”, whether 162(3) was not complied with, then we say that the solution there is for the Court to focus on the question of construction, to say that if the Court holds that the Court of Appeal’s judgment was premised on the construction of “adverse material”, as we say that it was, and the Court does not want to get into the weeds, then the Court could remit it back to the Court of Appeal on the basis that the Court of Appeal would then determine the remitted appeal on the proper construction of the provision which, of course, is the very premise that we took to the Court of Appeal, saying that the primary judge got the construction right but the answer wrong.

GAGELER CJ: Mr Wood, can I just understand the construction, if we look at section 162(3). You start, I think, with a proposal by IBAC to include a comment or an opinion in a report. The “adverse material”, as I understand your submission, is the evidence on which IBAC proposes to base that comment or opinion.

MR WOOD: Correct.

GAGELER CJ: And then giving the gravamen of the adverse material may be one way of providing the person a reasonable opportunity to respond to it. Is that so?

MR WOOD: I think I would put it this way, if it assists: the “adverse material” defines that which you have the right to a reasonable opportunity to respond to. You have a right to, therefore, a reasonable opportunity to respond to the substance or gravamen of the information that IBAC proposes to rely on in making an adverse finding. The reasonableness of the opportunity is cashed out in terms of time and mode: a week is not enough; a month may be enough, depending on the circumstances. The starting point is defining the matter to which you are entitled to respond to, and we say that includes the evidence.

BEECH‑JONES J: But you do not now suggest you have a right to get the evidence, do you?

MR WOOD: No. Can I try to be as clear as I can about this. We see the concern of procedural fairness as being with substance and not form. There are many cases, particularly in the migration jurisprudence, where the Court has accepted that being entitled to adverse information does not necessarily mean in the particular documentary form in which it might be before the decision‑maker.

So, you might, therefore, not be entitled to the whole transcript; you might not be entitled to a letter that someone has sent to IBAC with their name at the end of it; you would be entitled to the substance of the material. In other words, apt to invoke the ideas of information or evidence that is being deployed against you. Recognising, as I think we have referred to a couple of cases in writing, that that distinction is not a sharp one, there can be some circumstances where it is not possible to give the information disembodied from a particular form, but that is context‑sensitive.

If we come back to the Court of Appeal, we say that the first indication of error in the court – sorry, before I do that, can I just close out at least part of an answer to the criticism that our friends make of us. So, our friends at paragraph 9 of their written submissions, in the final sentence, say that:

there is no apparent difference between the approach of the Appellants and that of the Court of Appeal to the nature of –

what they call the “overall obligation”. That is just not so, and I think I have tried to explain why that is not so. Similarly, at paragraph 30, your Honours can see that our friends quote our submissions, and in the quote, what you will see undermines their point. The quote from our submissions ends:

whether or not, as a contingent fact, that is information that IBAC considers appropriate for inclusion in a public‑facing report –

Now, our friends then say at 31, that is the precise effect of the Court of Appeal’s judgment, and that plainly is not. The whole point made by the Court of Appeal, particularly at paragraph 135, is that you cannot be entitled under 162(3) to anything that goes beyond the contents of the draft report.

STEWARD J: If the draft report did include the substance or gravamen of the evidence, would you be content?

MR WOOD: Yes. We accept, coming back to Justice Gordon’s question – our complain is not about methods. We accept that a method – if IBAC included, as a matter of fact, the substance of the evidence in the draft report and then gave it to us, that is all fine. One of the underlying difficulties of the Court of Appeal’s approach in our friends’ argument is a conflation of the discretionary power of IBAC under 162(1) to draft a report intended to be consumed by the public, its discretionary power utterly unenforceable by someone in my client’s position to include what information they think fit to tell the Parliament and, therefore, the world.

A conflation of that, compared to the anterior duty – which is to give a person in my client’s position a reasonable opportunity to comment on the adverse material – there is no necessary relationship between the two. Indeed, much of the tenor of our friends’ concern about sensitivity and so forth illustrates why IBAC might very well not be inclined to include certain information that, in truth, they are relying on in support of adverse findings in a report that goes to the world. That does not answer the question about whether or not they are obliged, as anterior proposition, before they do or do not exercise the power to publish – they might decide not to – the anterior duty to our client.

If we come back to the Court of Appeal’s approach, in substance, we say, the Court of Appeal’s approach is unattractive, at the very least, because the functional effect of it is that if – point 1 – IBAC seeks to discharge its duty in 162 by the method of giving a person extract of a draft report, then the measure of fairness that the person gets depends on IBAC’s unenforceable discretion as to how much of the evidence it chooses to put in the draft report, that being entirely unenforceable.

We say the second difficulty with the Court of Appeal’s approach is that it rather tends to assume that IBAC has a draft report and that it will or must discharge the duty in 162(3) by giving that to people in my clients’ positions. If it does not have a draft report, or if it does not want to discharge its anterior duty in that way – and nothing in 162(3) requires that – then the functional effect of the IBAC’s construction of “adverse material” is that we would get just the bare “adverse comment or opinion”, and that is what, we say, is unattractive – just bear with me a moment.

So, we say, in light of that, it certainly would not – our friends cite Justice Brennan in Annetts v McCann (1990) 170 CLR 596 at 608, which is joint book of authorities tab 6, at page 384. I do not need to take the Court to it. His Honour spoke there of the right to a:

full and fair opportunity to show why the finding should not be made.

And we say that the Court of Appeal’s premise denies that “full and fair opportunity”. It becomes a contingent opportunity, dependent on the IBAC’s discretion as to how much, if any, of the evidence that it chooses to put in a draft report and whether or not, indeed, it chooses to discharge the duty in 162 by giving a draft report to the person in my clients’ position.

We say the very occasion for the compliance with the duty of 162(3) is by the text of that provision, one where IBAC “intends to include” the adverse comment in the report. It forms that intention despite that it has not yet heard from a person in my clients’ position as to their response, if any. We say if the Court were to say that IBAC is permitted, consistently with 162(3), to discharge the duty by only inviting a response to the comment rather than the underlying evidence, then it is scarcely to be supposed that IBAC would readily be deterred from publishing a report simply on the basis that the person says, in a generalised way, that is unfair – in a generalised way that does not accord to the limited duty that IBAC is required to comply with under 162(3).

BEECH-JONES J: Mr Wood, can I just ask you this: is there a difference between “a comment or an opinion” and an “adverse finding”? That is, in (2) or (3) – as in, is it accepted that “a comment or an opinion” could include a “finding” of corrupt conduct?

MR WOOD: It is something we have thought about. We find it a little hard to see a meaningful difference. It is conceivable that Parliament have taken the approach, perhaps, that “finding” is a sharper proposition than a mere “comment”. I am not sure it makes a difference to the resolution – it is obviously an anomaly. I think it is relied on by our friends to suggest, well, some of the language in this provision generally is not tight, in an attempt to defeat some of our arguments, but it is hard to see, I think, a functional difference between an “opinion” and a “finding”. At least, an opinion would appear to wrap into, at least, a finding – an opinion is presumably based on some view of facts of the world.

GORDON J: What about a “comment” and an “opinion”?

MR WOOD: Well, again, it is a little hard to see what the difference between a “comment” and “opinion” is. I think I would take that as a sort of wrap‑around set of words. Now, I have mentioned that one of the flaws in the Court of Appeal’s approach is to tend to assume that IBAC will or must discharge its duty by giving a draft report. In answer to Justice Gordon, I said at 166 the Court of Appeal appears to, in that paragraph, implicitly accept that is only one method by which it can be done, however. Can I take the Court to paragraph 166 of the court’s reasons. The first way, the court says in the second sentence, that a person can be provided – the first way of according an opportunity to be heard, according to the Court of Appeal, is to:

provide the person with the substance or gravamen of the matters that are adverse to him or her –

So, substance, and then reasonable opportunity to comment on the substance. By the way, we say that is precisely what 162(3) requires. The Court of Appeal then has a footnote, 97, which takes you to paragraphs 74 and 75 of the judgment, which I will ask the Court to pull up.

GORDON J: Core appeal book 98.

MR WOOD: Page 98, and at paragraph 75, the Court of Appeal, in its discussion of general principle, cites Chief Justice Gibbs in News Corporation, or the NCSC Case, and we say, again, that is consistent with our view about what the common law would ordinarily require, absent contraindication, and is indeed what we say what 162(3) does require. What the Chief Justice says is:

it will be enough . . . if the respondents are given a fair opportunity to correct or contradict any relevant material prejudicial to them –

Again, we say on the Court of Appeal’s construction, we do not necessarily get that. It is contingent on whether or not IBAC gives us a draft report, uses that method, and indeed then, in the draft report, includes the substance of the evidence. Likewise, the plurality in the News Corporation Case [1984] HCA 29; (1984) 156 CLR 296 at page 324, joint book of authorities tab 10, volume 3, at page 458. It is a short quote, your Honours, obviously. Have a look if you would like, but the majority there, the plurality say, would:

clearly be a denial of natural justice if the Commission –

in that case had not afforded, or did not afford, News Corporation an opportunity to be heard on:

the substance of the adverse information received during the investigation –

The distinction that the Court was drawing in the NCSC Case was between natural justice, if you like, during the investigative phase, and the Court says, well, it is entirely appropriate for the investigator, effectively, to keep their cards close, but the time will come where, in order to afford fairness:

the substance of the adverse information received during the investigation –

would need to be “disclosed”.

GLEESON J: That paragraph seems to conform with what the Chief Justice put to you, that the content of “reasonable opportunity” can be directed to the substance rather than the mode.

MR WOOD: I think that – I accept that one of the oddities, perhaps, is that in the world of common law procedural fairness, or implications of duty in statutes by common law means, one often does not need to be subdividing questions of the “reasonable opportunity” and the “adverse material”. It is a composite requirement.

Now, it is a composite requirement in 162(3) as well. We only have leave to talk about “adverse material”, which is why the alternative pathway that we had in ground 2 at the special leave phase is closed off to us. So, if, as a question of construction, the flex is in the “reasonable opportunity” – in other words, “adverse material” means the findings but somehow it is the “reasonable opportunity” that allows you to go beyond the findings – then that is a pathway that is closed to us. We say it is not the most attractive construction of the section.

We would say – which is entirely consistent with the quote from Chief Justice Gibbs – that what the legislation is doing is defining the matter to which you had the opportunity or reasonable opportunity to respond. The matter is called the “adverse material”. It therefore is important to identify at the outset what is it that you are entitled to respond to. We say the answer to that is findings and evidence in this context, but we accept, in light of logic and jurisprudence, that it does not mean the documentary form; it means the substance.

STEWARD J: Mr Wood, can I take you back to 164 in the Court of Appeal. There, the court agrees with you that a bare comment is not enough and says “reasonable opportunity” requires you to disclose the basis upon which you made the adverse comment and opinion. At 166 they go on to talk about how one way of doing that is to disclose the “substance or gravamen of the matters that are adverse”. They say one way of doing that is to put it in the report. At 167, they say doing it in the report is consistent with section 162. Then in the next sentence they make a finding:

In accordance with that section, pt 5 of the draft reports sets out the terms of the comments and opinions that are adverse to the applicants and also the substance or gravamen of the matters that IBAC took into account in formulating those comments and opinions.

Are you stuck with that finding?

MR WOOD: No. Can I give two answers?

STEWARD J: Of course.

MR WOOD: The first is that I would quibble to some extent with your Honour’s starting proposition. So, if we go back to 164, the Court of Appeal did not say that a reasonable opportunity required IBAC to give us the substance of the evidence. It said, consistently with its framing of the issue at the very start, in particular at 135, you get “any other contents of the draft report which disclose” it. Now, that – and I am at risk of repeating myself here – is an entirely contingent question. So, that is where we are not the same as the Court of Appeal. If we – 177, again is the clearest indication ‑ ‑ ‑

STEWARD J: But what about the second sentence of 167? They say the report does set out the substance and gravamen.

MR WOOD: Well, I can see that sentence, but you have to read it with the balance, including 177, where, more specifically, if I can take your Honours to that, what it says is ‑ ‑ ‑

STEWARD J: This is the exception?

MR WOOD: Yes, and it says it was:

impossible for the applicant to respond to it.

IBAC had not provided sufficient information. But this is why I said earlier, this is the clearest manifestation of the ‑ ‑ ‑

STEWARD J: But does it mean that your complaint is now limited to the exception? Exception is the statement – I will not read it out – concerning paragraph 87(d) of the report.

MR WOOD: No, because, your Honour, we say I think what I took your Honour to be putting to me is, do we not really have a debate with the Court of Appeal about the legal framework at all? And the answer is yes, we do. If we do have a debate about the legal framework, if the Court were to be persuaded that “adverse material” means evidence, and there is no contingency there about whether it happens to be set out on the draft report and so forth, then we would have demonstrated that the Court of Appeal has made a legal error at the premise. We would then say that 177 is the clearest example of where that - - -

STEWARD J: Section 177 is described as an “exception” – an exception to the finding at 167.

MR WOOD: The point I am making, your Honour, is if we were to persuade your Honours of the ground, that there has been an error of construction, the question would then arise: what, if any, relief should issue? At that point, what we would say is that on the proper construction, paragraph 177 is easy, but there were more, which we have discussed in writing ‑ ‑ ‑

BEECH-JONES J: Mr Wood, on the findings, just taking the Court of Appeal’s findings, on your construction, 177 is it, is it not?

MR WOOD: If the Court of Appeal’s findings are not impugned, although I think the qualification that I have to give to that is that we have also, I think, provided examples to this Court that were not provided to the Court of Appeal. They were provided to the Court of Appeal as examples. We have given further examples in respect of which our friends have not actually answered. They have criticised us, but they have not actually explained how it is that, in light of those paragraphs – it is obviously awkward to talk about in this environment.

GORDON J: But those matters that you raise in paragraph 58 were not raised in the Court of Appeal.

MR WOOD: I think there might be – I think some yes, some no, might be the answer. I will have to confirm the overlap.

GORDON J: Can I ask a really practical question?

MR WOOD: Yes.

GORDON J: You do not take issue, as I understand it, with 166 reflecting the fact that there is a variety of methods available to meet the requirement under 162(3). One of them is to provide the gravamen or substance in the draft report, including, to the extent necessary, additional parts of the draft report to give context to the substance or gravamen that is provided in that way.

MR WOOD: I agree with that.

GORDON J: The way the Court of Appeal resolved the practical difficulty, which I think is really your complaint about the fact that we really do not know, unless we are given the materials to be able to test that, that I have the substance or gravamen of what has been provided. You would have it provided up‑front rather than in any other mechanism because you, in a sense, want to test it yourself. Is that the practical difficulty? Because the way the Court of Appeal resolved that was, in 177, to say there is an omission here, you could have asked for more detail. Is that not the appropriate method?

MR WOOD: Well, IBAC has not yet exercised its power under 162(1) to publish a report to Parliament.

GORDON J: No. This is your opportunity, in a draft report, to seek to be given material. They thought that they had done it. The Court of Appeal has said they did do it, subject to one matter.

MR WOOD: But they have not given it to us, your Honour.

GORDON J: Well, they have not, I know. But that is why we are here.

MR WOOD: Yes. So, we say that the duty sits with them. Now, if the practical point is, we had not appreciated it, well, I would be sympathetic.

GORDON J: The practical point is not that you do not appreciate it, the practical point is trying to determine whether or not your starting proposition is the right starting proposition.

MR WOOD: Yes.

GORDON J: And that is why I am asking the question.

MR WOOD: We say it is. It coheres with the ordinary common law position that it is the duty of the holder of the power to give the person an opportunity to comment on adverse material. Now, occasionally, debates can arise about what that is. And those debates play out, whether before or during court. We say, though, that is the right legal starting premise. That is their duty.

Now, as things have played out in fact, we have given a variety of examples – that is one – where we have plainly said, you have not given us what appears to be the substance of evidence that has been given to you, upon which you propose to rely on in making adverse findings about us. If IBAC had, some time during the course of this process – including the High Court appeal process – said, here is another draft of the report – which they could do at any time – here it is, here is the substance, we might then have lost a controversy, but they never have done that.

We come back to our legal framework, which we say is the right one. We say that the Court of Appeal had the wrong starting premise, and there we have it. The debate, I accept, could potentially be overcome, but only by activity from IBAC. They are the only ones who can give us another draft or give us further information, and they have not. So, beyond the NCSC Case, where I was at earlier, which we say is entirely consistent with our view of what fairness would ordinarily – if I can put it that way – require, at paragraph 74, which I was at earlier, of the Court of Appeal’s judgment, the court says in the first sentence that:

In some cases, it may be sufficient for a public official . . . to afford a person who is the subject of the investigation a reasonable opportunity to be heard by giving that person, towards the end of the investigation, proposed adverse findings . . . and seeking his or her response.

Then, in footnote 40, a string of cases is referred to. One is the NCSC Case, which I have mentioned; another is Pergamon Press, which I will mention in a moment. Absolutely none of those cases support the proposition that it is sufficient to afford fairness merely to give a person who is subject to an investigation an opportunity to comment on the findings. Those cases all talk about the need to give not just the findings but the substance of the evidence.

That is what NCSC said, it is what Pergamon says. I think, in light of the time, unless the Court would like me to take you to the specific case, I will give you references. So, Pergamon Press [1971] 1 Ch 388, at pages 399 to 400, that is joint book of authorities number 22 at page 803. We have a Lord Denning saying it is “axiomatic” that inspectors could not use evidence in support of an adverse finding unless they give the person:

sufficient information to enable him to deal with it.

Lord Justice Buckley said much the same at page 407:

the inspectors should give him . . . such information of the complaint or criticism which they may make of him in their report and of their reasons for doing so, including –

I emphasise:

such information as to the nature and effect of the evidence which disposes them so to report –

So, we say that the construction that the Court of Appeal adopts is at odds with a clear body of case law concerning – if I can put it, again, in this slightly fudgy way – what “fairness” ordinarily requires. Now, of course, we accept that these things are matters for statutory modification. It depends on the context. We appreciate that. But it is important to appreciate what common law would ordinarily expect, which is what those cases say.

The first point I think I have already made, which is that textually it is more apt to regard that the expression “adverse material” as defining the subject matter to which the opportunity is respond to, rather than – as the Court of Appeal did and IBAC do – say, no, the “adverse material” is just the findings, but to the extent there is any flexibility, that is accommodated by the words “reasonable opportunity”. We say opportunity is more readily understood as time, and time within which and manner by which a person is to give their response to the matter; the matter is the “adverse material”, which is why it is important to get that construction correct.

We say the word “material”, in its ordinary meaning, is wider than an opinion or comment. It is capable of capturing the proposed opinion or comment, but the ordinary meaning of the word is wider than that. Next, we say that the Parliament’s use of different language in 162(2), (3), and (4), to define the trigger for the enlivenment of the duty as compared to the duty, is significant. The trigger in 162(3) is the formation of an intention to include a:

comment or an opinion which is adverse –

The duty is to give adverse material. This is a point that can be made in respect of each of these subsections. It is not at all clear why, if it was merely Parliament’s intention, that which the reasonable opportunity was required to be afforded in respect to was just the trigger. Why would it not have used the very same words? That is most‑clearly illustrated in 162(2), if we have a look at that. It says there that:

If the IBAC intends to include in a report . . . adverse findings about a public body, the IBAC must give the relevant principal officer . . . an opportunity to respond to the adverse material –

It is just inexplicable why there you would not say “the adverse findings”, if that is what Parliament meant. We would have some more sympathy for IBAC’s construction when it comes to 162(3) in isolation. The reason for that is that in 162(3), you have this disjunctive which is “comment or an opinion”. So, one might think that if one was zooming in exclusively on subparagraph (3), one might have sympathy for the view that the word “material” is then used as a synonym of that disjunctive concept, which is “comment or an opinion”. But that cannot explain subparagraph (2), and if (2) is a clear hint that the material is different from the findings, one would expect the logic of that to carry through by parity of reasoning to subparagraph (3).

We say that it is worth emphasising how peculiar 162(4) would be on the Court of Appeal’s construction and on our friends’ submissions. On the Court of Appeal’s approach and our friends’ approach, the “relevant material” in subsection (4) – sorry, that which would have to be provided is just the comment or opinion which is not adverse, but instead the duty is to provide relevant material in relation to which IBAC intends to name the person. That is more than just prolix and complex. It textually suggests a distinction between the naming of the person – in other words, the non‑adverse comment or opinion – on the one hand, and on the other hand, the “material” to be provided, which merely needs to relate to the intended naming. Again, provides a hint – we do not want to overplay it, but a hint – in that section that there is a difference between the trigger and the discharge of the duty.

Now, I am not sure that it matters, but with respect to 162(4) we say that, as with subparagraphs (2) and (3), it plainly is designed to accord a procedural fairness function that necessarily follows from the fact that IBAC is being obliged to notify a person before a report is published to Parliament that this non‑adverse comment or opinion is included. It would make no sense to do that unless Parliament was anticipating the possibility that one would get a submission in response from that person.

The difference between subparagraphs (2) and (3), on the one hand, and subparagraph (4) on the other, is that under subparagraph (4) IBAC is not obliged to set out, fairly, the response. That makes sense just because if the comment is not adverse, no occasion would arise to put in, if you like, the rebuttal. But it remains the case that it serves, in a general sense, a procedural fairness function.

Now, much ink has been spilt on the significance of the use by Parliament of the definite article. I think we have said our piece on that. We say it has a definite referential quality either way; therefore, it is equivocal. I do not propose to go back into that debate. What I propose to do now is to move to what might be called the problem of confidentiality. We say that that is not a new problem in this area of law.

We say that, in the absence of very clear language, the problem is not ordinarily solved in a way that the Court of Appeal’s construction is apt to lead to, which is that you get, potentially, only the bare comment or opinion, depending on IBAC’s discretionary choices about what it includes in its draft report. We say that the Act accommodates various ways to mitigate the risk of confidential information. I can give your Honours four, and then I will have a transcendent point to make at the end of all of that.

The first is that, as we have accepted, consistent with cases such as VEAL, we say that “adverse material” only means the substance; therefore, it may not be necessary, and we do not say it is necessary here for names to be given. You can give the information without identifying the informer. Secondly – and we say this is significant – the confidentiality notice regime in Part 2, Division 3 of the Act, which is sections 42 through to 44, is available.

With respect, the Court of Appeal’s dealing with that regime is, we say, quite unpersuasive. The effect of the confidentiality notice regime in those sections is that IBAC can give a person, including my clients, a notice that makes it a criminal offence for that person to then tell that information to anyone else. So, it has the same functional effect as 166, but it does it by IBAC saying, here is some information that you cannot tell anyone else.

Now, the Court of Appeal approached the construction on the premise that, effectively, IBAC might fail – through oversight, perhaps – to exercise those powers appropriately, hence the need for automatic or blanket protection in 166. That implicitly proceeds on the premise, which is a most surprising one, that Parliament does not expect IBAC to do its job well. It is not at all onerous, at the moment at which IBAC discharges the duty in 162(3) and gives the person the reasonable opportunity – at that very moment IBAC can, if appropriate, issue a blanket confidentiality notice to the person with respect to the information put to them for their response. And indeed, albeit that IBAC did not, we say, discharge its 162(3) duty in this case, it gave our clients a blanket such notice anyway. That is at paragraph 35 of the Court of Appeal’s judgment.

The point is that it will not always be appropriate to give a confidentiality notice. The effect of the Court of Appeal’s approach is to impose rigidity where no rigidity is called for. It will not always and necessarily be the case that information that IBAC has and wishes to rely on in support of an adverse finding is such that it ought to be protected in that way. So, we say the gap that the Court of Appeal speak of in the final sentence of 138 is illusory.

STEWARD J: What do you want to say about the fact that 166 appears in the same part as 162?

MR WOOD: We say that that is natural and unsurprising, because 162 is framed on the basis of an intention to include in a report comment. We accept that one way, but not the only way, to discharge the duty is by giving a draft report, so it makes sense that in that suite of provisions Parliament has said, effectively, if you get a draft report, you cannot tell anyone. We say it is perfectly sensible to understand why that is blanket because, of its nature, a draft report will always have the quality of sensitivity because it does not reflect IBAC’s considered views. It would cause mischief and confusion if draft reports are flying around the country.

STEWARD J: You say nothing follows from the limitation of 166 to information in the draft report?

MR WOOD: We say absolutely, if a draft report or information in a draft report is given, 166 is blanket coverage. We say the Court of Appeal’s error was in inferring or implying that that must mean that a person will never get anything beyond the draft report. That is the logic at 135. That is what we say is wrong, and we say the availability of the ‑ ‑ ‑

STEWARD J: But if you are right, why would 166 not have extended to any information disclosed for the purposes of 162 outside the report or in the report?

MR WOOD: Because, if we go to 166, it is confined to:

a proposed report, an advance copy of a report . . . draft or part of a proposed report or information contained in a . . . draft of part of a proposed report –

So, it does not encompass in its terms what might be in truth evidence that IBAC is persuaded by to make an adverse finding. We say that they are confidentiality notice regime is readily available, therefore, to provide exactly the same protection that 166 provides, but for information outside of the draft report.

The third point we make in terms of the confidentiality issue is the availability of the regime in the PID Act, or the Public Interest Disclosure Act, concerning detrimental action in reprisal. Now, it is not a perfect overlap. I accept that there can be circumstances where IBAC is preparing a report and making an adverse comment in circumstances that are not covered by that detrimental action in reprisal regime, but there will be an overlap. The point is that Parliament has identified clearly defined circumstances where it has created a criminal offence for someone – which would include my client – to take certain action defined as detrimental action, in reprisal against a person who has made a complaint, in effect, called a public interest disclosure, or a person who has cooperated in an investigation of such a complaint by a body, including IBAC.

I think each party has provided their own extracts of the PID Act. We provided one yesterday, I think. I think ours just – our friends’ does not include all the provisions that we would take the Court to. But just to briefly plot the way through that Act works, first of all, we have a definition of “detrimental action” in section 3, so:

(a) action causing injury, loss or damage;

(b) intimidation –

So forth and so on. Then, if we get to section 43, it defines where a person takes detrimental action against another person in reprisal, and it says:

a person takes detrimental action . . . in reprisal for a public interest disclosure if –

the person takes or threatens to take such action on the belief that they have made a disclosure or they have cooperated with an investigation. A “public interest disclosure” is defined in section 9(1) as a:

disclosure by a natural person of –

(a) information that shows or tends to show –

(i) a person . . . is engaging or proposes to engage in improper conduct –

“Improper conduct” is defined in section 4(1)(a) as including “corrupt conduct”. “Corrupt conduct” is defined as having the same meaning as the IBAC Act, and all of IBAC’s functions concerned “corrupt conduct”. Section 11 of the PID Act says that:

A disclosure may be a public interest disclosure even if it is a complaint, notification, or disclosure (however described) made under another Act.

So, in other words, even if there is a mechanic in the IBAC Act utilised, which I think the open judgment of the Court of Appeal demonstrated there was here, it can still be a public interest disclosure. We would say that by that scheme – and all this gives rise to a criminal offence in section 45 punishable by two years’ imprisonment if a person takes action.

So, in the circumstance where compliance with the duty in 162(3) had a consequence that a person in my client’s position knows – or perhaps even surmises by intermingling their own knowledge with what they have been given and so forth – that another person out there has made a disclosure or has cooperated in an investigation by IBAC, then they are at risk of serious criminal penalty if they do anything bad – do something inappropriate, if you like, in a consequence of that – again, which mitigates, if you like, what one might call the problem of confidentiality.

Finally, if one goes to 162 of the IBAC Act, we accept that the effect of subsections (7) and (8) would prevail to the extent of inconsistency over 162(3). What I mean by that is that in 162(3), IBAC is not only required to give a reasonable opportunity to someone in my client’s position to respond, but must also then:

fairly set out each element of the response in its report.

We would say that the more specific provisions in subsections (7) and 8 – subsection (7), in particular, saying:

The IBAC must not include in a report under this section any information that would identify any person who is not the subject of any adverse comment –

unless satisfied of various matters, including that:

it will not cause unreasonable damage –

to their health and whatnot, which is by no means likely or necessary, but in the event that a response is to be given by IBAC that said, we reckon you have this information from person X – that is what the subject of the notice is inferring – and that person is a liar for this or that reason, IBAC would be restrained from naming them if IBAC is not making an adverse comment about them, subject to the protections. In other words, another way of mitigating the problem of confidentiality because the report that goes to the world will not name anyone else – sorry. If it names anyone else in a non‑adverse way, it can only be in circumstances where IBAC is satisfied they will not suffer harm.

The transcendent point that I want to make now – and I am effectively at the end of the submissions on construction – is this. It is set out in our outline of oral submissions at paragraphs 7 and 8. The only value in a special report that is published by IBAC to Parliament, so far as it contains an adverse finding, comment or opinion, the only value of that adverse finding, comment or opinion lies in its reliability. No other public interest is achieved by the inclusion of an adverse comment or opinion unless it is reliable.

Justice Ginnane in Woodman, which is joint book of authorities tab 29, volume 4, at page 978, paragraph 68 – again, I do not need to read from it – essentially makes the point that 162(3) therefore serves two purposes. Of course, it serves a purpose of protecting the reputational interests of a person by giving them a procedural right to respond before their reputations might be tarnished, but it also serves the purpose of assisting to ensure that anything that IBAC does publish – which we think would attract, by operation of ordinary principles, absolute immunity in Parliament – is safe, is as reliable as it can reasonably be.

GORDON J: I think the language used is:

transmitting a more accurate and balanced special report.

MR WOOD: Yes. I am paraphrasing. I do not have that text in front of me. But we say the substance is the same. We embrace that, “accurate”. We say, for that reason, to the extent that our construction of 162(3) is apt to inhibit IBAC from including certain adverse comments or opinions in a report that goes to Parliament, it is only inhibiting IBAC from including such adverse comments or opinions in circumstances where they have not given the subject of that adverse comment or opinion an opportunity to respond to the case against them. So, there is no great loss of public interest, if I can put it this way, in IBAC not being inhibited from publishing a comment that it is not prepared to give a standard incident of fairness in respect of to the person before it publishes the comment to the world.

So, we say IBAC is obviously not required to publish a report at all. It has a range of powers available to it set out in section 164, but also section 41 of the IBAC Act. They include reference to law enforcement agencies or prosecutorial bodies and the like. Now, if IBAC is in possession of sensitive information suggesting that someone has engaged in corrupt conduct – which, as defined in the IBAC Act, necessarily means criminal conduct – IBAC can engage the special report procedure if it does so fairly, so it does not tarnish the reputation of a person unless it is doing so fairly; or, if it cannot or is unwilling to do that, it has a range of other options available to it. If it is sent to a prosecutor and a criminal prosecution is commenced, well, the person will get the information in the course of the prosecution, as well as all the other ordinary incidents.

The point we are making is there is no public value or interest lost by our construction. To the contrary, public interest is promoted and a purpose of the Act is promoted, being a guarantee, as best as can be reasonably achieved, that any adverse finding attracting absolute immunity that is published to the world is accurate or, we would say, safe or reliable.

The final point in that respect that I want to make is this. There are occasions, of course, where an officer or a body is under a duty to exercise a power or make a decision of some kind. In those circumstances, there are many cases that show that sometimes fairness has to give way to a countervailing public interest. So, public interest immunity is an obvious example of that. If circumstances arise that a decision must be made, one can have circumstances where fairness, in a practical sense, gives way to the competing public interest – the person might not get the full substance of the adverse information.

But that is not the situation we have here; there is no duty to do anything. Nor is this a situation like Nikolic, which is at joint book of authorities tab 18, volume 4, starting at page 659, where you have a statutory power but not a duty. So, a discretionary power, but there is a discernible public interest in the power being exercised. So, in Nikolic, the situation was an order was made by the Chief Commissioner of Police that had the consequence that the recipient of the notice could not attend a racing track, and the public interest that was served by that was ensuring the integrity of the racing industry.

That is where we came back to our point – and that was a circumstance where the Court of Appeal said, well, in those circumstances, to protect the investigative methods and confidential sources and the like, fairness gave way to those competing interests. But here, if the only interest is the publication of safe and reliable commentary, that public interest is not sacrificed by our construction; it is promoted. And that is all we can understand could be the possible public interest in the inclusion, in a special report, of an adverse comment. I had prepared to come to the question of relief, but I think I have probably, effectively, already made our submissions on relief – subject, perhaps, to the opportunity to reply, if that be needed.

Unless there are any questions, those are our submissions.

BEECH-JONES J: Mr Wood, do you accept that if you are confined to the findings of the Court of Appeal but your construction is upheld, then the complaint about the report reduces to the finding in 177?

MR WOOD: Just bear with me, your Honour. I understand why that question would be put to me. The answer is, I would submit, no. The reason for that is that the Court of Appeal premised its analysis, we say, at the outset, on its construction of “adverse material”. To the extent that it has used the concept of “reasonable opportunity” to allow for flexibility, it has nevertheless done that by reference to what we say is the wrong starting point.

Paragraph 177 is the clearest example of where the Court of Appeal recognised that we did not get the substance, but, as I indicated earlier, examples that we have given to this Court are not confined to examples that were non‑exhaustively suggested to the Court of Appeal where it was apparent that we did not get the substance.

So, I would come back to what I said at the start, that if this Court were to take the view that it is outside leave or, in any event, inappropriate to descend to that level of detail that one is looking at particular sentences and particular paragraphs of the draft report and assessing them by reference to the proper construction, we would say that in that circumstance, the appropriate disposition would be to remit.

But if the Court were to take the view, which is the approach that we have taken to this appeal, that we are permitted to argue, if we have identified the incorrect premise by the Court of Appeal, where that leads to in terms of relief, then we would ask the Court to substitutionary relief.

May it please the Court.

GAGELER CJ: Thank you, Mr Wood. Mr Hanks, we may take the customary adjournment a little earlier today. How long do you expect to be?

MR HANKS: A little longer than my learned friend. I think an hour and a half.

GAGELER CJ: All right. We will take a 15‑minute adjournment now.

AT 11.07 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.21 AM:

MR HANKS: Your Honours, the format is that which we wish to address, and we will be dividing responsibility for that address between myself and Ms Gordon. First, I will provide a brief history of this proceeding from the time it commenced before Justice Ginnane to assist an understanding of what is the current forensic position adopted by each party. Then I will go to what we would describe as an abandonment by the appellants of their proposition about what a “reasonable opportunity” means, and why their current position renders academic the meaning of “adverse material” in section 162(3).

GAGELER CJ: Meaning we should not deal with it?

MR HANKS: I beg your pardon?

GAGELER CJ: If it is academic, are you saying that we should not deal with it?

MR HANKS: I regret, I did not catch your Honour.

GAGELER CJ: Mr Hanks – what do you mean? What is the consequence of it being academic, in your submission?

MR HANKS: One consequence will be that the appeal will fail, because there is no controversy. But another consequence can be that this Court will withdraw the grant of special leave, because of the absence of a controversy within the grant of special leave before the Court.

The third topic we wish to address will be the construction of those two words in 162(3) – “adverse material”. Ms Gordon will present the argument on that, and finally I will come back to the lectern and turn to the question of relief, and my argument there will be that this Court should not countenance the attempt by the appellants to agitate the question upon which they will refuse special leave. That is, in our submission, plainly what they seek they do in the relief that they ask for.

I should start with the procedural history. When the case was argued before Justice Ginnane, the appellants submitted that “adverse material” – those two words – meant that the proposed adverse comments and opinions and the underlying evidence. Consistent with the way in which the originating motion had been drafted and settled and filed, the appellants said that what was required from IBAC was the provision to them of all the evidence that had been collected and that is used by IBAC to support the adverse comments and opinions.

Your Honours can see this – the most convenient way to see this is to go to page 91 of the appeal book, in the judgment of the Court of Appeal at paragraph 53. What their Honours did here was to quote from the originating motion, or it is the amended originating motion. Initially, the case started as one brought by AB and then it was amended to include CD as a second plaintiff. If your Honours start at the bottom of page 91 and go across to page 92, your Honours can see the specificity with which the appellants identified what it was that they were required to be given. Then, over the page, paragraph 54 makes the point that CD, after being added as a plaintiff, made the same allegations in the originating motion.

As your Honours know, Justice Ginnane accepted part of the case presented by the appellants. His Honour accepted the submission that “adverse material” meant not only the adverse comments and opinions, plus, but also the underlying evidence before IBAC. But then his Honour went on to say that there was no obligation to disclose the underlying evidence itself. It was sufficient for IBAC to give the relevant person a draft report containing the proposed adverse comments and opinions, along with the substance of the underlying evidence. Your Honours can see that in the primary judgment in the appeal book at page 58, at paragraph 151 from the fourth line onwards. Then, if we turn to page 60, paragraph 154.

That is how Justice Ginnane dealt with, as it were, the content of the obligation to provide a reasonable opportunity. In the Court of Appeal initially the appellants advanced the same case as they had before the primary judge. Part of their case depended upon the construction of “adverse material”. If we go to page 111 of the appeal book, one can see that. In paragraph 114 in the Court of Appeal judgment, there is an accurate summary of the argument presented by the appellants.

The case that was put on the nature of the obligation, the nature of the reasonable opportunity to respond, differed. We can see that from the application for leave to appeal which starts at page 71 of the appeal book. At this point, if we go to the bottom of page 72 and proposed ground of appeal 1(6), there is a repetition of the case advanced to Justice Ginnane: we should have got the transcripts. Then ground 1(7), IBAC should have provided us:

with any documents or reports containing material adverse to the Applicants, upon which it proposed to rely –

There is a further ground 1(9) that refers to an obligation to provide transcripts. But then ground 2 marks a departure. This is the confession and avoidance ground. If it is accepted that the 162(3) obligation:

only requires IBAC to provide . . . the substance or gravamen of the adverse material . . . then the learned primary judge erred in finding that the Draft Special Report –

did so. Interestingly, that reveals an important aspect of the substratum against which we need to read the reasons of the Court of Appeal. The appellants’ case in the Court of Appeal was heavily focused – concentrated on the contents of the draft report, and it follows from that that when the Court of Appeal in its reasons said that a way in which the obligation in 162(3) can be discharged is through the draft report – and this draft report, with one exception, did that – the Court of Appeal was responding to the argument that was put to it. We do not think that it can sensibly be read as saying that is the only way, but that is the way that was relevant for the conduct of the appeal.

In advancing that alternative ground before the Court of Appeal, ground 2, the current appellants relied on five findings in part 5 of the report, and those are the five findings that we see summarised between pages 100 and 103 in the appeal book, paragraph 87. That is where the attack was focused. It was said that those particular findings in the draft report were ones against which IBAC had failed to provide sufficient material to allow the appellants to see the substance or gravamen of the underlying evidence. As our learned friend, Mr Wood, said to your Honours earlier this morning, not all those examples, as he put it, have survived into this Court.

I wish to make a very short point here. If we look at 87(a), (b), and (c), we can see that they have been replicated in the written submissions filed on behalf of the appellants. They have been replicated in paragraphs 59.1, 59.2, and 59.3. Two of the examples or passages or findings identified before the Court of Appeal have not survived. Those are 87(d) and (e). Effectively, the appellants have replaced them in their written submissions with paragraphs 58.1 and 58.2, which are focused on different parts of the draft report.

The inconsistency in one way is neither here nor there, because the submissions now made in those paragraphs of the written submissions are not relevant to the ground on which the appellants were given special leave. That ground is concentrated on, confined to, the proper construction of two words in 162 and 163, and the special leave grant necessarily excluded the ground – which was ground 2 – in the application for special leave, in which the appellants wished to complain about the adequacy of the opportunity that they were given.

Although it is strictly not relevant, in our submission, it is a good illustration of how the appellants’ case keeps evolving. We know that the Court of Appeal refused to grant leave to appeal. It accepted the notice of contention filed by IBAC, adopted a different construction of “adverse material”, but effectively endorsed Justice Ginnane’s view that what was required in 162(3) was provision in the draft report of the substance or gravamen of the matters taken into account by IBAC in formulating its comments and opinions.

I said a little earlier that that was consistent with the argument put by the appellants before the Court of Appeal. We can see that, for example, if we go to page 99 in the appeal book, paragraph 81. This is the paragraph where the appellants – before the Court of Appeal, they were actually the applicants at that point – acknowledged that part 4 did what section 162(3) required. Part 4 of the draft report provided sufficient information to give them a reasonable opportunity to respond.

We turn over to the following page – we have been here before – paragraph 87. Here we have a detailed critique on the part of the appellants of various aspects of the draft report. Just to give you a little further context, if I could take your Honours to paragraph 85. Third line:

at the hearing of the application for leave to appeal they focussed upon a number of specific findings.

That is the context for the conclusion and the observations made by the Court of Appeal. Could I say something, as we move through the reasons of the Court of Appeal, about paragraph 177, which starts with the words “with one exception”. Your Honours can see how the paragraph continues, but effectively it is saying IBAC has provided sufficient information to allow the applicants to respond to part 5.

Now, the one exception is a single line found in the draft report. Your Honours can see that it is quoted, beginning on the fourth line of paragraph 177. The Court of Appeal said, well, that is a problem, that is not sufficiently disclosed, but that is not the end of the matter. It does not mean that IBAC has denied a reasonable opportunity to be heard. There are options open to the now appellants. They can ask IBAC to provide those details or they can delete the statement from the next version of the draft, the final version.

The criticisms that we see made, for example, recorded by the Court of Appeal in paragraph 87 of its reasons, and the criticism that the Court of Appeal itself offered in paragraph 177, have never been raised by the appellants with IBAC. Never.

STEWARD J: Mr Hanks, did I hear you say earlier that in any event, 87(d) has not survived into this Court?

MR HANKS: I believe that is what your Honour heard me say.

STEWARD J: So, that the exception has fallen away?

MR HANKS: Our friends say we only offer these as examples. I think that by that they wish to convey that they do not wish to be tied down, but I had simply drawn the Court’s attention to this changing because there has been some doubt right from the beginning of the litigation as to what the appellants’ case really was. It is, in our submission, significant that there are points of criticism of the draft report and its adequacy that could be, at any time – could have been when IBAC sent out the draft report to the appellants for their opportunity to be heard. That has never been taken up. The appellants said, you are not giving us enough material, you should give us the transcript – I am sorry ‑ ‑ ‑

BEECH‑JONES J: Is that a way of saying it was too – at least in those respects, it is too premature to conclude that 162(3) has not been complied with?

MR HANKS: That is correct, your Honour, yes. Section 162(3) does not exclude an iterative process. Indeed, that would be entirely consistent with its language, its purpose, and its context.

BEECH‑JONES J: Of course, that would be predicated, though, on the acceptance of your opponent’s construction, would it not? Because if there is nothing more in the report to provide, that would be the end of the process, would it not?

MR HANKS: Yes. Yes, indeed. The Court of Appeal refused to grant leave to appeal. There was then the application to this Court for special leave, and the special leave application ‑ ‑ ‑

GLEESON J: Mr Hanks, sorry to interrupt you, but just to follow up on Justice Beech‑Jones’ question, the prospect of an iterative is consistent, is it not, with the last sentence of paragraph 177 of the Court of Appeal’s judgment?

MR HANKS: We believe so.

GLEESON J: In other words, the Court of Appeal was contemplating the prospect of material being supplied outside of the draft report.

MR HANKS: Well, I do not want to tie the Court of Appeal down to that particular way of providing additional information. It might take the course of reissuing the draft report in a different form.

GLEESON J: Yes, of course. Yes.

GORDON J: Or, as you put it earlier, deleting the line.

MR HANKS: Yes, all of those are possibilities. In our submission, the last two lines of 177 do contemplate an iterative process. They contemplate IBAC responding to a request.

GAGELER CJ: Do they also assume the correctness of the Court of Appeal’s construction of “adverse material”?

MR HANKS: Who is “they”, your Honour?

GAGELER CJ: Those two lines.

MR HANKS: In our submission, that would be beside the point, because the primary judge and the Court of Appeal said what IBAC needs to do, in order to provide the “reasonable opportunity”, is two things: to provide the adverse comments and opinions; secondly, to provide the substance of the underlying evidentiary material – using “evidentiary” in the broader sense. It does not really matter what meaning is attributed to “adverse material”. What the Court of Appeal said was IBAC need to give the person an opportunity to respond, and the way you do that is by providing your proposed adverse comment or opinion, your conclusion and also the substance of the underlying material.

GAGELER CJ: Or – they say, or just delete the statement.

MR HANKS: Yes, that is another option.

GAGELER CJ: Is that really an option, on Mr Wood’s construction?

MR HANKS: No, it may not be, your Honour, it may not be. But I do not think that I can take it any further than that. The special leave application, which your Honours will find in the appellants supplementary book of further materials – the appellants have filed a book of further materials and a supplementary book of further materials. The second one was filed on 10 November and included in that is the application for special leave to appeal.

Your Honours can see on the very first page, under the heading “PROPOSED GROUNDS OF APPEAL AND ORDERS SOUGHT”, of the two grounds in paragraph 2, 1 and 2, it is only the first of those grounds that is the subject of this appeal, because the appellants were refused special leave to agitate the second ground, which goes to the adequacy of the opportunity to respond to the adverse material that they were given. And that will assume significance in submissions we will make about relief – the relief that is now sought.

There are other aspects of that application for special leave I will come back to – perhaps I could foreshadow that at the moment. If your Honours go to paragraph 29 of the special leave application, there are particular submissions foreshadowed about what is contained in the draft report and why it is said – as we read that paragraph 29, why it is said that the opportunity afforded to the appellants to respond was not sufficient. I just want your Honours to note that. I will come to that shortly when I look at the written submissions filed by the appellants in this appeal.

Before I do that, can I address your Honours on where the issues between the parties now stand. The parties are agreed that IBAC can discharge the obligation in 162(3) by providing the affected person with the adverse comments or opinions that will be provisionally included in the special report and the substance of the evidence or information on which IBAC relied in formulating those comments and opinions. There is broad agreement between the parties on that.

BEECH-JONES J: So, do you accept that even where the substance is not included in the report? Do you accept that that is so, even if the substance of the material upon which IBAC relied is not included in the draft report?

MR HANKS: The obligation would still be there, yes, your Honour. Now, let me illustrate the point that the parties – not only the parties seem to be ad idem, but the appellants appear to have endorsed the approach taken by the Court of Appeal by – going to the written submissions of the appellants, page 10, and I have in mind paragraph 47:

The only way to ensure fairness is to construe s 162(3) as requiring IBAC to give an affected person the opportunity to comment on the substance of the adverse information or evidence on which IBAC relies in forming its provisional adverse comments opinions or about a person –

STEWARD J: I am sorry, Mr Hanks, what paragraph was that?

MR HANKS: Paragraph 47, your Honour. I apologise, your Honour. It is on page 9 of the appellants’ written submissions.

STEWARD J: Thank you.

GORDON J: Can I just raise another paragraph with you? On page 7, at paragraph 36, again:

the substance of evidence or information on which it has relied . . . provided that sufficient context is given –

Is that to the same effect?

MR HANKS: I believe so, your Honour, yes. So, 36 and 47 are very, very similar.

GORDON J: And the same in 41 – “respond to the substance of the evidence”.

MR HANKS: Which paragraph, your Honour?

GORDON J: Paragraph 41, in the second sentence:

However, these evident purposes of s 162(3) are undermined if the provision is construed ‑ ‑ ‑

MR HANKS: I have that, thank you.

GORDON J: That you “are not entitled to respond to the substance” of it?

MR HANKS: Yes.

GLEESON J: Are these propositions about the meaning of “adverse material”, or are they are about the meaning of “reasonable opportunity”, or are they about the two?

MR HANKS: We think they are about the second, your Honour. They are about the content of the reasonable opportunity.

GAGELER CJ: I am sorry, Mr Hanks. Can I just understand this: do you say you agree with paragraph 47?

MR HANKS: I do.

GAGELER CJ: You just use different words to get to it?

MR HANKS: Well, the different words that we use are not radically different, your Honour. We are indulging in the advantage that the flexibility of language offers. But our point is, not only do we agree with that proposition, but so does the Court of Appeal. If we – paragraph 164, in the Court of Appeal’s judgment, which would be on page 122. Obviously, here the court is talking about the reasonable opportunity. The last three lines. The Court has been taken to this paragraph earlier today, but a:

bare, conclusionary form –

is not sufficient:

a reasonable opportunity required IBAC to also provide any other contents of the draft report which disclose the basis upon which IBAC formed the adverse comments and opinions or which provide necessary context for them.

GAGELER CJ: It is all about what is in the draft report, is it not?

MR HANKS: Well, I was about to offer this reminder, if I might. The way the case was conducted before the Court of Appeal was all about the draft report. Was this draft report adequate? That was the focus of the submissions made on behalf of the appellants. Those were the submissions that the court dealt with, and that explains the reference in the second‑last line to the draft report.

STEWARD J: Did you rely on the first sentence of paragraph 166, which says that you may discharge your obligation “in a variety of ways”?

MR HANKS: Yes, indeed.

STEWARD J: It then goes on to say one way is to disclose it in a report, and then it says at 167 the statutory provision is consistent with using that particular method.

MR HANKS: We do say that, your Honour. The Court of Appeal is dealing with a very specific attack made by or on behalf of the appellants. Responding to that attack and explaining why in this case, the draft report provided the reasonable opportunity. The complaint of the appellants before the Court of Appeal was that the draft report failed to do it.

GLEESON J: Or the complaint was that they wanted the underlying evidence.

MR HANKS: Yes.

BEECH‑JONES J: I am sorry, Mr Hanks, are you saying that the last three lines of 164 are not a general construction of 162(3), but simply the application of 162(3) in this particular case?

MR HANKS: We do. We do say that, your Honour. We have arrived at a situation, in our submission, where the construction of 162(3), apart from the meaning of “adverse material” advanced by the appellants, supported by the respondent and adopted by the Court of Appeal are essentially identical. That is why we say that there is no real controversy before the Court apart from that construction point. The construction point does not go anywhere for that reason. I will hand over now, if I might, to Ms Gordon. Were you just about to delay me, your Honour?

GAGELER CJ: I was just thinking – you are coming back, are you not, Mr Hanks?

MR HANKS: I am. I hope that does not disappoint you.

MS GORDON: Apologies, your Honour, I just wanted to make sure that I could situate the Court in our oral outline. I take up the argument at paragraph 10, which focuses on the question of construction of 162(3) on a premise that the meaning of the phrase “adverse material” has significance for the overall obligation imposed by section 162(3), and the disposition of this matter. As your Honours will have seen, in the respondent’s submission, the natural construction of section 162(3) is that the opportunity that must be given is an opportunity to respond to the adverse comments and opinions proposed to be included in the report, and in particular, the phrase “the adverse material” is naturally to be understood as shorthand for the thing earlier identified in that subsection – being the adverse comments or opinions.

To be very clear, your Honours, that opportunity must, on the terms of 162(3), be reasonable. In our submission, the Court of Appeal did not, and certainly, the respondent does not suggest that bare statements of conclusion would be sufficient to give a reasonable opportunity, and for the reasons advanced by Mr Hanks, nor, on a proper construction, did the Court of Appeal. Indeed, that is the very point of its conclusion at paragraph 177 that a reasonable opportunity had not been given in connection with that adverse finding.

Now, the difference between the parties may in fact simply come down to where one locates the meat of the obligation in section 162(3). Is it to be located in the concept of “adverse material”, or is it to be located in the concept of “reasonable opportunity”?

STEWARD J: Is there a necessary dichotomy? I mean, presumably “reasonable opportunity” feeds into what material is to be given.

MS GORDON: Precisely, precisely. I cannot take that much further – we respectfully embrace that, but the construction submissions I am about to make, as I foreshadowed, are premised on there being a significance to locating the meat of the obligation in that expression “adverse material”. Now, it is, of course, set out in more detail in our written submissions, and we have endeavoured to summarise in paragraph 10, really, the reasons of construction that we advance, and I will try to be as brief as I can in canvassing those.

The first is, of course, the text of the provision, including the use of the definite article, and we have referred to a case, in particular Central Queensland Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2017] FCAFC 43; (2017) 249 FCR 154 at paragraphs 31 to 32, and that is at tab 17. I will not go to that, but it does contain quite a useful ‑ ‑ ‑

GAGELER CJ: That is all about the meaning of the word “the”.

MS GORDON: Precisely, your Honour. Yes. Surprisingly, interesting, nonetheless, to go to those paragraphs.

GAGELER CJ: I am sure it is.

MS GORDON: No, as I say, I was not proposing to take your Honours there except, really, as matter of natural language, when one looks at 162(3) these signal something, and it naturally takes one back to the comments and opinions, and that is really the point. To the extent that our learned friends rely on the meaning of “material”, our response is that “material” is the broadest of terms referred to in one of the authorities which we have cited as a linguistic chameleon, so not much joy is going to be found worrying about that in general terms.

The next matter we rely on is the purpose of the provision, both as disclosed by its terms in the sense that this is an obligation that is enlivened only when IBAC is proposing to include adverse comments and opinions, and we would say, self‑evidently, those are the focus of what it is that the appellants, or any person affected, is entitled to respond to. We also rely on the explanatory materials, and there is one citation which we may not have given your Honours in writing, so I will briefly take you to that, and that is the statement of compatibility for the 2011 Bill that introduced many of IBAC’s investigative powers, and in particular section 162(3), although it was then numbered 86(3).

You will find the statement of compatibility in volume 5 of the joint bundle, tab 31, and it is page 1069 of the bundle, or 6305 of the Hansard. Now, if your Honours have that just in the top, the first column, and the first paragraph, your Honours will see:

Under new sections 86(3) and 89(3) –

So, section 86(3) is what has become 162(3), and 89 is what has become 165, and I will briefly alert your Honours to that significance of that in a moment, but:

if IBAC intends to include an adverse comment or opinion about a person in a special or annual report, IBAC must first provide the person a reasonable opportunity to respond to the adverse material and fairly set out each element of the response in its report.

Pausing there – actually, it is quite an important aspect of 162 – is that requirement to set out the response in the report, but – and this is the key sentence on which we rely:

Affording an affected person the opportunity to respond to an adverse finding before publication ensures that IBAC will be required to follow proper process and fairly present its findings.

So, there we see the statements squarely describing the interest that is sought to be protected, which is the opportunity to respond to the adverse findings.

GLEESON J: I am sorry, what page are you on?

MS GORDON: I am terribly sorry, your Honour. Page 1069 of the joint bundle.

GLEESON J: Thank you.

MS GORDON: Mr Maxwell is just letting me know how much time I have. So, that is purpose. The third matter we rely on is the context of other provisions in the statute, and in particular, section 166. If your Honours could take that up – you have already been taken to it, so I will not detain the Court for long. The point we make about 166 is really a point of construction, and it does two things of present significance.

First, it expressly contemplates that a person may receive all or part of a proposed report or information from such a report before the report is published, and it gives automatic protection to those matters. That is because, in our submission, the premise of section 166 is that the thing of which section 162(3) in all cases requires a person to be put on notice, consists of the proposed comments and opinions.

BEECH‑JONES J: Ms Gordon, do I understand you to say, in the particular case, the “reasonable opportunity” is the basis upon which something might be provided to an affected person beyond what is in the draft report?

MS GORDON: We accept that, your Honour, in a particular case.

BEECH‑JONES J: Right. Then, how would the confidentiality of that be preserved?

MS GORDON: Well, if there be a confidentiality concern, the way the appellant puts it is that it could be preserved through the means of confidentiality notices under section 42.

BEECH‑JONES J: And you accept that?

MS GORDON: Yes. And, conversely, your Honours, if the thing of which the person was required to be put on notice was something else – the underlying evidence, confidential transcripts of examination – one would expect – put on notice as a matter of course, one would expect the automatic protection envisaged by section 166 to mirror that obligation.

Now, Mr Wood’s reliance on confidentiality notices or the reprisal provisions that the Public Interest Disclosure Act do not really answer that point of construction. They are simply to say, well, that if information is provided, there are ways of protecting its confidentiality. Part of the reason I should explain why we gave the Court the additional provisions of the Public Interest Disclosure Act was just to be clear that that Act does not simply rely on prohibitions on reprisal. There are also restrictions on disclosure. It is only if those somehow do not do the job they are supposed to do that the reprisal provisions are necessary.

Of course, as your Honours will have appreciated, what has been referred to by the parties as the underlying evidence that will have been obtained in the investigation will have pertained to what is a very confidential process. A good example is the transcripts of examination, because unless exceptional circumstances pertain – and your Honours will see this from section 117 – examinations are to be held in private. There is no right of interested parties to attend other witnesses’ examinations unless they are public examinations.

Then what the affected person is entitled to under the Act – and this is consistent with what the Court in News Corp had to say – was they are entitled to a transcript of their own interview, their own examination, and they are entitled to legal representation, but there is no entitlement in the investigative process to be part of those private examinations. All that is to say – is to reinforce the point that when one comes to look at section 166, if one is to interpret 162(3) as requiring or imposing a prima facie requirement to disclose the underlying evidence, one would expect a corresponding automatic protection.

While we are on the subject of confidentiality, I should address an argument that appears in the appellants’ outline of oral argument – although it was not, I think, developed by Mr Wood – and that is that there is some inherent difficulty in a public‑facing report being capable of performing the function. I think in one sense that has been displaced by a concession that a report is capable, depending on what is in it, of satisfying 162(3), but one needs to be careful in this context about drawing any a priori distinction between public facing – or information that goes into the public domain and information that is provided to an affected person, because the interest in confidentiality or in anonymity may be no less pressing in relation to the public than in relation to the proposed subject of adverse comments.

Just to make one more point on that, as Mr Hanks has explained, the way this case has progressed, there has not been an argument, well, we need more; you cannot have it because of some particular confidentiality concern. It is a sort of all or nothing basis. Either we wanted everything or what is in the report was not sufficient. But there has not been a joining of issue on that question.

STEWARD J: Ms Gordon, do you accept that the effect of paragraph 167 is that in relation to part 5 of the draft report, the Court of Appeal made a finding that the report did disclose the subject or gravamen of the underlying evidence, subject to the one exception in paragraph 177?

MS GORDON: Yes, your Honour.

STEWARD J: So, does that mean that the dispute between the two of you is now limited to a ground not raised, namely, whether the last two sentences of the paragraph 177 are sufficient to deal with the exception?

MS GORDON: Yes, subject to emphasising it is not raised, and nor was that particular paragraph of the report.

STEWARD J: You both agree on the test, there is an unchallenged finding the Court of Appeal found that the substance and gravamen were set out in the report, subject to 177, but 177 is not a ground on which special leave is granted.

MS GORDON: That is correct. When an unchallenged finding – I think Mr Wood may wish to say something about that, because I think the Court of Appeal’s approach to the particular paragraphs was sought to be challenged, but that was ground 2. I just did not want to overstate the degree of ‑ ‑ ‑

STEWARD J: No, no, it is okay. Thank you.

MS GORDON: Your Honours, before leaving the statutory context, could I just alert you to two other provisions in the Act in which a similar formula to that which is in subsections (2) and (3) of 162 appears, and that is 165(3), which concerns annual reports. I do not need to make any particular submission. The fact of these provisions, we say, is perfectly consistent with our construction, but I just wanted to alert you to the fact that there are other provisions which use this.

The other provision is section 170A(7). I will just give your Honours a tiny explanation of that so that you have some context. There is a provision for performance audits of IBAC, largely governed by a separate Act, the Audit Act 1994. When one comes to section 170A, you will see – and now I am referring to the IBAC Act, your Honours. It provides that:

(1) The independent performance auditor may make a report of a performance audit conducted under section 170.

. . .

(3) The independent performance auditor must not make a under subsection (1) unless –

(a) at least 20 business days before making the report, the independent performance auditor gives the IBAC a copy of the proposed report or a summary of findings and proposed recommendations –

There one sees an explicit obligation to provide part of a report or the report, or a summary of the findings. Then, skipping down to subparagraph (7):

If the independent performance auditor intends to include in a report under subsection (1) a comment or an opinion that is adverse to any person who is to be named in the report and who is employed under section 35(1) or engaged under section 35(2) or 36, the IBAC must, after receiving a copy of the proposed report or the relevant part of the proposed report, give the person a reasonable opportunity to respond to the IBAC in relation to the adverse material.

So, one again sees that phrase deployed. We say its deployment there tends to assist the respondent’s construction of 162(3) because, in that situation, all IBAC has is the report of someone else. It will not necessarily have the underlying evidence on which the performance auditor relied.

Now, in terms of the particular formulation of the duty in (3)(a), on the performance auditor to provide a report or part of the report, that is language that is taken from the Audit Act 1994, where the duty of the auditor, in sections 58(2) and 57(3) to (4), is expressed in those terms, which may explain the particular language used there. I should say, those were pursuant to amendments inserted in 2019, and that is also the time at which 178 came into being. All that, really, your Honours, just to make sure we gave you the complete picture in terms of where those formulations appear in the Act.

The fourth matter that we say supports our reading are the authorities in analogous contexts involving damage to reputation by the publication of a report of an investigation or inquiry. An oddity of this case is, I think we are all relying on the same trio of authorities to support our respective arguments, which may tend to illustrate the degree of congruence. The cases of Pergamon Press, Annetts, and Ainsworth – and I did want to take your Honours to Pergamon Press, because that is a foundational case in a reasonably analogous context where one sees an elaboration of what might be the scope of procedural fairness in such a context, and it is a case that is then cited in the later High Court authority.

This was a case about a proposed acquisition of shares in Pergamon Press, and that proposed acquisition was the subject of an investigation by two inspectors appointed under the Companies Act. The question was whether the inspectors owed procedural fairness obligations to the directors of Pergamon Press, and, if so, the extent of those obligations. Now, if I could take your Honours to the judgment of Lord Denning at page 399, at about point H. His Lordship has just been discussing the reputational damage that might arise from the publication of a report, even though it would have no immediate effect on rights or liabilities. And his Lordship says:

Seeing that their work and their report may lead to such consequences, I am clearly of the opinion that the inspectors must act fairly . . . The inspectors can obtain information in any way they think best, but before they condemn or criticise a man, they must give him a fair opportunity for correcting or contradicting what is said against him. They need not quote chapter and verse. An outline of the charge will usually suffice.

That is what the inspectors here propose to do, but the directors of the company want more. They want to see the transcripts of the witnesses who speak adversely of them, and to see any documents which may be used against them. They, or some of them, even claim to cross‑examine the witnesses.

In all of this the directors go too far.

And then, just to complete what Lord Denning – and, of course, we rely on that your Honours, in the sense that it supports the construction of 162(3) in the sense of what is required is a reasonable opportunity to respond. To what? To what is proposed to be said that is adverse. And I will not take up the time now, but his Honour does go on to discuss the principle in a way that is relevant. Lord Justice Sachs – I will not take your Honours to his Lordship’s judgment, but I will give you the reference. It is at 405 at point G. Lord Justice Buckley – I will take your Honours to that, at 407 C to D. If your Honours have that, at point C, his Lordship begins:

If inspectors are disposed to report on the conduct of anyone in such a way that he may in consequence be proceeded against, either in criminal or civil proceedings, the inspectors should give him, if he has not already had it, such information of the complaint or criticism which they may make of him in their report and of their reasons for doing so, including such information as to the nature and effect of the evidence which disposes them so to report, as is necessary to give the person concerned a fair opportunity –

Here the statute uses “reasonable opportunity”, but obviously it is the same concept:

of dealing with the matter, and they should give him such an opportunity.

GAGELER CJ: Does this earlier case add anything to the reasoning of this Court in News Corporation?

MS GORDON: It does to this extent, your Honour: in News Corporation, there was a real question about whether the body in that case had the power to publish a report, so their Honours were much more focused on the process of investigation. That is where one has the holding that the plaintiff in that case did not need to be privy to proceedings, et cetera, but was sufficient that they have legal representation and be given a transcript of their evidence. But what was a bit more equivocal was could the body then go onto publish a report? For example, Justice Brennan, as he then was, at page 326 of News Corporation, which is at tab 10, said this:

Once it is clear that it is no part of the Commission’s function to publish adverse findings, conclusions or evidence after a hearing of the kind proposed in the present case, it is unnecessary to consider what the rules of natural justice might require if such a publication were one of its functions.

GORDON J: What page is that, Ms Gordon?

MS GORDON: At 326, your Honour. It is right at the beginning of Justice Brennan’s judgment. His Honour goes on:

For my part, I should prefer to reserve consideration of that question until an appropriate case arises. At the forefront of the factors for consideration at that time will be the statutory provision which creates that function. If a statute were enacted to authorize an administrative agency to publish matter reflecting adversely upon the reputation of a person after an inquiry into that person’s conduct, the statute might be expected to specify the procedural protection which the agency would be required to accord to that person.

That is not to gainsay the passages to which Mr Wood referred, which discussed what might be required if publication of a report were permitted, but in my submission, their Honours are really focused on an earlier part of the process, for the reasons really given by Justice Brennan.

Indeed, Justice Brennan’s comments are one of the responses we make to the proposition that in interpreting 162(3), one would read “adverse material” as picking up a line of administrative law authority in a different context. Conscious of the time, your Honours, I will not take you to the passages in Annetts and Ainsworth, but the references are given in our oral outline at paragraph 10.4.

BEECH-JONES J: Ms Gordon, does it come to this, you say that to the extent that it may be some reason to disclose the effective evidence, that is founded in the nature of the “reasonable opportunity” when Mr Wood says, no, it is founded in the “adverse material”, and that is what you are responding to. Is that where it gets to?

MS GORDON: In my submission, yes, but I am about to come to what it is we understand the appellants to be submitting and, in my submission, there is a considerable degree of uncertainty still, about what the precise ambit of that is.

In fact, I will move directly to that, your Honour. What they seem to be saying first is that the expression means a combination of two things. And this is partly inspired by what was in the originating application to which Mr Hanks took you. It refers both to the proposed adverse comments and opinions proposed to be transmitted to Parliament and it picks up the concept of adverse, credible, relevant, significant information as understood in the migration and other like administrative law context.

The first point we make is that it cannot be both. If it is picking up the concept of credible, relevant, significant information, that is one thing. But what the appellants are getting here is something that an applicant in a migration case or like administrative law cases does not usually get, which is notice of the proposed adverse conclusions and findings of the repository of the power. So, that is point one, your Honours.

The next point is that to the extent that the argument is that the expression “adverse material” picks up an expression well known in administrative law, that fails to account for two things, one of which Mr Wood acknowledged today, which is that we are here concerned with a particular statutory scheme, not only one that is pretty different to the standard migration application or the Alphaone scenario, where there is an application for a permit to sell videos.

And relatedly, while there is no doubt that the Alphaone formulation, Justice Brennan’s formulation of credible, relevant, significant in Kioa, et cetera, have been picked up and applied in numerous cases – those are quite different contexts. The appellants seek to rely on cases where concepts like annuity are to be given their technical legal meaning and, in our submission, we are in quite a different landscape here. The term “adverse material” is not like the term “annuity”.

I did want to address Applicant VEAL for a moment, your Honours, because that, in a sense, highlights the uncertainty at the heart of what is being put by the appellants. Your Honours will no doubt be familiar with it, it is at tab 7 of volume 3. That was a case where the – again, an application for a visa, and the Tribunal had in its possession a letter that made adverse allegations against the applicant. The Tribunal did not provide the letter or the substance of the allegations in the letter to the applicant, but it did not take the contents of the letter into account in its decision.

Two different points are made in the judgment of the Court in VEAL, and the first was concerned with the issue of what significance was to be attached to the fact that the Tribunal did not take the letter into account. On the Court’s reasoning, that did not matter, because the point in time at which the obligation in a case like VEAL arises is at an anterior point in time. One is not fixing on the decision and asking, well, what did you take into account. One is looking back and asking – before a decision‑maker has formed any views, what does that decision‑maker need to tell an applicant? Hence that formulation in Kioa: I need to tell the applicant things that are adverse that I cannot dismiss as not credible, not relevant, not significant.

The second point in VEAL, of course, was the point that one does not need to provide the letter, it would have been sufficient to provide the substance, but the appellants here critically rely on that first aspect, that anterior – the reasoning that one has to give over the adverse material as they read it. But it is inapposite to the present context for the following reasons. For a start, and I have already made this point, we are dealing with a very different statutory context, and that is why we have referred your Honours to Pergamon Press, Ainsworth, and Annetts, which are more directed to a situation where an inquiry has taken place and public findings are proposed to be made which may adversely affect someone.

Very importantly, the point in time at which section 162(3) fixes is the point in time at which IBAC will necessarily have formed tentative conclusion for inclusion in a proposed report. As I have said, quite unlike the usual migration law or administrative law application case, what is envisaged is that the person will have notice of those proposed tentative conclusions. That reveals what I might call an uncertainty, difficulty, ambiguity, about the appellants’ case, which is the extent to which the obligation in 162(3) is divorced from the conclusions reached in the draft report.

Because on one understanding of the applicant’s case, and I think this comes back to a question your Honour Chief Justice Gageler put, would it be a solution just to remove the adverse conclusion from the draft report? In our submission it would, but – and Mr Wood may clarify this in reply, but it is not at all clear to us, based on what Mr Wood said this morning, whether that would sufficient, because it may be that in a VEAL prism, one puts to one side the report entirely and one is looking at an anterior point in time. I did pick up that Mr Wood used the term “anterior” a number of times.

BEECH-JONES J: Ms Gordon, if IBAC said it wanted to delete it, it would then no longer have the intention to include it in a report.

MS GORDON: Precisely, your Honour. That is my point, that VEAL is about an anterior point in time. Here, we have a scheme fixed on an obligation that only arises based on an intent to include.

JAGOT J: Yes, but do you intend to delete it? I mean, is that not the issue? Without any indication of a change – it is in there – without any indication of a change of intention, we are just left floating. Why should we not assume – or I assume, at least – that the intention continues, if there is no indication to the contrary?

MS GORDON: Well, because, your Honour, it is clear from paragraph 177 of the Court of Appeal’s judgment that if it were left in without any further information being provided to enable a reasonable opportunity to respond, then it could not lawfully be transmitted to Parliament.

JAGOT J: So, you are going to delete it? You do not intend to publish it?

MS GORDON: Well, the options are: delete it; include it, but provide more information. Those are the options outlined by the Court of Appeal.

JAGOT J: But we have no clue. I am just not following how this can answer it myself, because if you are not going to delete it and you are going to put more information, is that information sufficient? To me, it just leaves it all hanging.

MS GORDON: Well, what is not left hanging is the Court of Appeal’s conclusion that it could not, in this form, be transmitted to Parliament, because it would not comply with the obligation. In my submission, that is clear.

GAGELER CJ: Sorry, where is that conclusion?

MS GORDON: That is how we read 177, your Honour.

STEWARD J: But do you need to resolve this here today? Ground 1 was, what does “adverse materials” mean?

MS GORDON: Yes, your Honour, quite. So, there is something left hanging, I cannot deny that, but is not something that is before this Court.

JAGOT J: That is a different answer. I do not mind that answer. It is just what you were suggesting previously that I take issue with, but if that is your answer, I understand that answer.

GAGELER CJ: I am sorry, if the Court of Appeal is saying at the end of 177 that compliance with section 162(3) means that this report cannot in this form be transmitted to Parliament, would it have made the order that it made?

MS GORDON: Well, the order that it made was based on the point which Mr Hanks outlined, that because, in a sense, the first time the complaint had been made was in oral argument of the Court of Appeal, it was premature to foreclose the continuance of the natural justice process. But, your Honour, the slight difficulty I am in is that there has been no appeal on the basis that the prematurity reasoning was wrong, and perhaps we have interpreted it a different way to how the appellants have interpreted it.

GORDON J: Your position is, and I understand it, for the purposes of section 162(3), it is sufficient if the substance or gravamen of the material supporting the adverse opinion or comments is provided. The Court of Appeal says it is and was except in relation to this one exception identified in 177. The process of natural justice has not been completed, as recognised in 177. But the consequence of those three propositions is that the draft report in its present form could not go to Parliament.

MS GORDON: Yes, in its current form. That is how we put it.

GAGELER CJ: And you accept that?

MS GORDON: Yes. I have just seen the time, your Honours, which is ‑ ‑ ‑

GAGELER CJ: And has that been communicated to Mr Wood before this moment?

MS GORDON: I will need to get instructions on that, your Honour. One thing I would say is that one would have little confidence that that would resolve a matter in the context where these are only put forward as examples. Never – they are not expressed as complete obligations that would then – if we could just satisfy this bit, then the complaint – no, no,
they are examples, and they are iterative examples that have expanded in this Court.

GAGELER CJ: Well, leave all that aside. Mr Wood has a quiver of points. One of them might be much better than the others. If we just focus on his best point; as I understand your position now, is that it gets him some kind of undertaking on your part that is equivalent to the relief that he seeks.

MS GORDON: Could I take that on board, your Honour? Just to clarify what your Honour is putting to me, it is that the undertaking would be limited to the provision, either the removal of that or the provision of further information.

GAGELER CJ: I am just trying to translate into a more formal statement what you have told us about your client’s position.

MS GORDON: Yes, understood, your Honour. In view of the time, I do not think I need to say anything more.

GAGELER CJ: Mr Hanks, do you want the luncheon adjournment before you continue?

MR HANKS: Well, others might, your Honour, but I do not particularly worry about that.

GAGELER CJ: Well, I think we are not going to finish before lunch anyway.

MR HANKS: I am confident of that.

GAGELER CJ: We will take the luncheon adjournment and resume at 2.15 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

GAGELER CJ: Mr Hanks.

MR HANKS: May I return to the invitation, if I can perhaps overstate it, that your Honour the Chief Justice issued to my client before we rose for lunch. I think the word “undertaking” might have been floated, not necessarily by your Honour, but one of the difficulties, obviously, that any litigant faces is that there are issues that are relevant to the appeal. Amongst those issues, the particular passage identified by the Court of Appeal in paragraph 177 is not included.

We are not here to debate the adequacy or otherwise of the opportunity offered to the appellants to deal with the adverse material but, subject to that significant caveat, IBAC is prepared, and will undertake not to transmit to Parliament a report containing the proposed comment or opinion which is set out at the sixth paragraph on page 32 of the appellants’ book of further materials. In that segment of the further material is a copy of the draft report. So, I will continue with the undertaking, without providing the appellants with the substance or gravamen of the matters that IBAC took into account when formulating that comment or opinion.

GAGELER CJ: You put that in the future tense. Is it an undertaking you now give on behalf of your client?

MR HANKS: It is, your Honour, yes. I apologise for my inelegant expression.

GAGELER CJ: Thank you.

MR HANKS: I have offered a footnote, as your Honour understands. I will return to a related topic, which is the relief sought now by the appellants. One can see that in the appeal book at page 138 onto 139. The substantiative relief consists of – apart from allowing the appeal – the appeal brought from the primary judge to the Court of Appeal, apart from allowing that appeal, will include the declaration and prohibition. Each of those is focused on what is said to be the failure to provide the appellants with a reasonable opportunity to respond, in accordance with 162(3). I will not quote the full terms of the relief, but that is the focus.

There is a critical problem, which is that the orders now sought are identical to the orders that were foreshadowed in the special leave application. Your Honours know where that application is, it is in the applicants’ ‑ ‑ ‑

GLEESON J: Mr Hanks, does not that order need to be understood in the context of the ground of the appeal?

MR HANKS: I think our friends say the grant of appeal has to be understood in the context of the order. Our submission, your Honour, is that the two do not go together. We have a limited ground of appeal. Initially there was, you might say, a double‑barrelled grant of appeal. The orders, on their face, can be seen to be relevant specifically to the second ground of appeal, the proposed second ground, because they hinge on what is said to be a failure to provide the appellants with a reasonable opportunity to respond to the adverse material. That is the very point that would have been raised by ground 2.

GAGELER CJ: Mr Hanks, is there any order that the Court could make if it were to uphold the single ground of appeal?

MR HANKS: Well, one order would be a declaration, your Honour. A declaration that that is the meaning of 162(3).

GAGELER CJ: I ask that because your opponent does ask for such further or other order as the Court thinks fit.

MR HANKS: I understand that our friend, Mr Wood, says ultimately that the Court could, having allowed the appeal, make an order remitting the matter either to the primary judge or to the Court of Appeal, to do again what they have already done. That is, to consider whether – how can I put it? There has been a failure on the part of IBAC to allow the reasonable opportunity that 162(3) demands and to consider that in light of this Court’s reasons. That would be a conventional remitter. Our difficulty with that is that would simply ask a court, or the primary judge, to determine again whether the draft report contains the substance or gravamen of the evidence or information on which IBAC relied in formulating the proposed adverse comments or opinions.

In our submission, that underscores the academic nature of the issues raised on the appeal. The primary judge and the Court of Appeal have done that once. The way in which they have done it is entirely clear from their reasons for judgment. This Court would then be saying, do it again in the light of our reasons, unless this Court identified some deficiency in the way in which the Court of Appeal went about that task, which this Court could only do if there is a ground of appeal that invited the Court to rule on that. And there is not.

So, the issues in this appeal are relatively – not relatively. They are quite specific. They do not include the alleged inadequacy of the opportunity afforded to the appellants. The Court might think that a bare declaration in the terms that I have suggested is inappropriate and rather that remitter would be the only option that the Court could undertake. There are just some points I wanted to make in anticipation of our friends’ reply, because they are points directly relevant to relief. They are made in the reply. For example, in paragraph 5.1 of the appellants’ reply, it said that:

Conspicuously, IBAC has failed to answer –

the appellants’ submissions that IBAC did not disclose the substance of the supporting information. Our response in anticipation of that is that that omission on the part of IBAC is only relevant, would only be relevant, to the non‑existent second ground of appeal, the ground that has been excluded from this appeal.

Then our friends say in their reply that if IBAC says it was unfair for the appellants to have advanced ground 12 in the Court of Appeal, IBAC ought to have made that complaint there, and did not. That is a response to a submission that we made that the ground in question should not be agitated in this Court because there is inadequate evidentiary foundation for this Court to consider whether IBAC has allowed a reasonable opportunity to respond.

That is a product of the way that the litigation developed. At first instance, the appellants’ attack was very different from the attack that is now mounted, and I have already dealt with that. There was no opportunity before the primary judge for IBAC to put on evidence about such matters as what other material it has, what other material it relied on, and what confidentiality concerns might be associated with disclosing that information. We do not say that is a matter of a lack of fairness, as our friends put it in paragraph 5.2 of their reply. We simply say it is a matter of an inadequate evidentiary foundation for this Court to consider that question.

GAGELER CJ: But not the Court of Appeal if it were remitted?

MR HANKS: Yes. There would also be an inadequate evidentiary foundation there. There is another point that is made in paragraph 5.3, that IBAC can only make that submission about inadequate evidentiary foundation by way of a notice of contention in support of the Court of Appeal’s decision. I do not wish to be disrespectful, but that is not a very sensible submission. How can IBAC put on a notice of contention of that kind? Could that be relevant to the one ground of appeal, which goes to the construction of “adverse material”?

Finally, I want to make a short point about some paragraphs in our friends’ primary submissions in this Court – paragraphs 51 to 60. These are submissions that deal with the orders that might be made, and effectively they address the non‑existent ground of appeal. A substantial part of those paragraphs, namely the one‑and‑a‑half pages that are occupied by paragraphs 59, 59.1, 59.2, and 59.3 are lifted almost verbatim from the special leave application. If you compare those paragraphs in our friends’ written submissions with paragraph 29 of the special leave application,
your Honours will see the point I am making. They are word for word a copy. They were made in support of the proposed ground 2, and now they are made in support of the relief if your Honours should agree with ground 1. In our submission, they are irrelevant.

Those are the only matters we wish to raise. Thank you.

GAGELER CJ: Thank you, Mr Hanks. Mr Wood.

MR WOOD: I will not take too long, but I think there are a few points to address. The first point, I think, flows from a question that Justice Beech‑Jones, as I recall, put to Ms Gordon seeking to confirm that it was IBAC’s position that the words “reasonable opportunity” in their context could or would, in circumstances, require IBAC to put the substance of adverse evidence to a person even if that evidence was not set out in the draft report. And Ms Gordon answered the question, yes.

To be perfectly clear, that is not the position of the Court of Appeal. I want to briefly bed that down, but it is an important point, because the net result of where IBAC has come to – although they accuse us of shifting position, I think in truth we have narrowed our position to some extent – that involves both parties telling the High Court that the Court of Appeal was wrong. We say they are wrong because the right way to understand it is the words “adverse material” that requires the evidence to be put. In substance, IBAC must say the Court of Appeal was wrong, but they used the words “reasonable opportunity”. To the extent that there is unanimity of the position of the parties, it is that the Court of Appeal is wrong.

Can I demonstrate why that is so. If we go to the core appeal book in the judgment of the Court of Appeal, I want to start at paragraph 118. At paragraph 118, the Court of Appeal is recording my client’s argument on the notice of contention. Before I read out a bit of 118, recall that it was put to this Court I think by – I cannot remember who for IBAC, but it was suggested that the Court of Appeal’s judgment in paragraph 164 in particular was just a product of the way that the applicants argued their case below, as though the suggestion were that it was the applicants who were saying to the Court of Appeal that the only way that the duty under 162(3) would be discharged would be by giving a draft report that set out the – so, I am not quite sure what the point was supposed to be made about the way we ran our case, but this is the way we ran it. At 118, we were advancing the proposition that:

it is not anomalous for s 162(3) of the IBAC Act to require disclosure of material going beyond adverse comments or opinions proposed to be include in a draft report.

That is because, as that paragraph goes on to record in some detail, 166 is concerned with the automatic confidentiality of the preliminary thought product of IBAC, but the confidentiality notice regime in sections 42 through to 44 is where Parliament has contemplated the possibility that the duty in 162(3) might require IBAC, in order to give the substance of the information on which IBAC proposes, to rely beyond whatever might be set out in the draft report.

The Court of Appeal’s decision on the notice of contention starts at paragraph 122. The court decides IBAC’s position on the notice of contention must be upheld. An important yet critical part of the Court of Appeal’s reasoning in that respect is paragraph 135. One looks at 134 through to 136 as a package, but the key quote, if you like, is in 135, where, having referred to section 166 of the Act that gives the automatic protection for the contents of the proposed draft report, the Court of Appeal says:

It strongly suggests that the natural justice obligation in s 162(3) is confined to the adverse comments or opinions in the draft report and any other contents of the draft report which disclose –

it. Any. It is confined to the draft report. We then go to 164, where I think it was suggested by our friends that the final sentence of 164 was simply the product of the way the case was argued, somehow, by the applicants. It is just not so. The final sentence of 164 has at the end of it – it uses the very same logic and phraseology to provide any other contents of the draft report that disclose evidentiary basis – not simpliciter; disclose the evidentiary basis – then, it has at the end of it footnote 95, which takes you back to paragraph 135.

It is an unusual position that is now achieved in this Court where the parties, in a sense, agree on the end product, that a person in my client’s position is required to have identified to them or disclosed to them the substance of the evidence to be used against them, if, as I think Ms Gordon said, it is outside of the draft report, and as we submitted in the Court of Appeal, but was rejected, the confidentiality notice regime in sections 42 to 44 provides the solution to the problem of the confidentiality of that information.

So, insofar as the parties have eventually agreed, we have been consistent at least, and the end result is an agreement that the Court of Appeal’s construction is wrong. Now, it might be said against us now by Mr Hanks, well, all of our eggs are in the “adverse material” basket because of the limited grant of leave. That is so. We have maintained that the right and better way to read this provision is that it is the “adverse material” expression that defines the subject of which the opportunity to respond is to be given, and that is the proposed finding and the evidence contemplated by IBAC to support that.

STEWARD J: Can I ask you two questions, if I may? Firstly, does the Court of Appeal actually give a construction to the words “adverse material”?

MR WOOD: Yes. It says it is the findings ‑ ‑ ‑

STEWARD J: As distinct from what is required for a “reasonable opportunity”?

MR WOOD: I will try to find the paragraph, but I feel confident that the answer to the question is, yes, the Court of Appeal says that “adverse material” means the findings. I think they might say that around the 135 area. And then what the Court of Appeal does is to move on in the judgment to talk about grounds 8 to 12 collectively. Grounds 8 to 12 collectively included complaints about reasonable opportunity, even if we were wrong on adverse material, and said, you got it.

STEWARD J: So, then the second question becomes, assuming you were right, what do you do with the second sentence of 167, namely, a finding that you had been given the substance?

MR WOOD: I think I am in the position of answering a similar question your Honour put to me earlier ‑ ‑ ‑

STEWARD J: We are refining the dispute as we go along.

MR WOOD: Yes, there is a lot of refining going on. My answer is that one has to read 167 together with 177, where, in 177 quite specifically, the Court of Appeal, in respect of one bit of the draft report, say, in substance, as I read that paragraph, we did not get the substance of the information.

STEWARD J: Well, you have the substance of everything but 177?

MR WOOD: That is what the Court of Appeal, I accept, says about the examples that were presented to it. I am conscious that 177 may be my better point. Can I say this, though, without belabouring the other examples that we have given. If we go to – Mr Hanks is correct. The contents of paragraph 58 of our submissions were not examples given to the Court of Appeal. That is the historical – they are certainly not examples that are resolved in the judgment of the Court of Appeal.

GAGELER CJ: What are we meant to do with those examples? Do we make findings, is that what you are asking us to do?

MR WOOD: Or remit.

GORDON J: Why should you be permitted to run them, when you have run the case below? They were not put below.

MR WOOD: Perhaps, if I can attempt to answer that in this way, if we go to paragraph 85 of the Court of Appeal’s judgment ‑ ‑ ‑

GORDON J: This was the focus, where you identified five examples that you put to the court, and they were not part of those five examples.

MR WOOD: That is right, so I cannot ‑ ‑ ‑

GAGELER CJ: Mr Wood, do your new examples rise higher than your old examples? Are we just dealing with more examples, or are you making rod for your own back, here?

MR WOOD: I certainly do not wish to. If I can just finish the answer to Justice Gordon, paragraph 85 says that:

Although the applicants complain that they were not given the underlying material that informed IBAC’s findings against them in pt 5 as a whole . . . at the hearing –

they focused on certain things. So, the complaint was global, but the focus was on particular findings, and what we ‑ ‑ ‑

GORDON J: I will be blunt. I cannot imagine that you, in the Court of Appeal, did not choose your best five.

MR WOOD: Well, I was not involved and, as I understand it ‑ ‑ ‑

GORDON J: I am saying your team chose their best five and put the best five up and ran them, and why is that we are now given other examples that were not before the court and not considered?

MR WOOD: Well, because people’s thinking evolves, I think is the short answer. I think there was a limited period of time over lunch, as I understand it, as I am told, where the court said, what are some examples, and some examples were given and on reflection it seems to us there is a couple of obvious examples where it seems patent from the terms of the finding that the finder – that we did not get.

GAGELER CJ: If the rejection of your ground 2 means anything, it means that this Court is not going to get into the facts at a level that have not been explored in the argument put to the court below.

MR WOOD: I understand what you are putting to me.

BEECH-JONES J: Mr Wood, is your proposition, as I understand it, this. You say the Court of Appeal’s findings about part 5 and whether your client got the opportunity were undertaken through the confines of their incorrect construction?

MR WOOD: Yes, we do say that.

BEECH-JONES J: And that is the basis on which you seek remitter?

MR WOOD: Yes.

BEECH-JONES J: Then if it is not the case, if they are properly construed, effectively, as almost freestanding, irrespective of your construction, do you agree that you do not succeed?

MR WOOD: Subject to 177 ‑ ‑ ‑

BEECH-JONES J: Okay.

MR WOOD: ‑ ‑ ‑ in respect of which we have now had the undertaking given, which we say, in a sense, in light of where I started this reply, pointing out that it is really IBAC’s statement now, that we are entitled to the substance of the evidence. If that is their view today, it is very hard to see why we ought not to have got that bit, 177, some time ago, including in the ‑ ‑ ‑

GORDON J: Putting aside the time question, and you can make your complaint about that, is your answer to Justice Beech-Jones, then, that on the two alternatives, the way it is put to you that there is no ground for relief on the second ground because you have now got what you could get. In other words, you have got everything in terms of the substance or gravamen of the examples that are set out consistent with the Court of Appeal’s reasons, and you have now got an undertaking in relation to what is left in 177.

MR WOOD: As I understood Justice Beech-Jones’ proposition, I think that I might have misunderstood. The first point was is our first position ‑ ‑ ‑

GORDON J: Not the first, it is just the second I am concerned about. The first was the Court of Appeal at about part 5, within the confines of the – and therefore you would get remitter.

MR WOOD: If our more ambitious argument, if you like, that the Court of Appeal’s misconstruction of “adverse material” has not infected its reasons, if we are not given leave, as has been suggested to me by a couple of your Honours, about the examples that were not the focus in the Court of Appeal argument, then I accept that we are left with 177, in respect of which we have had an undertaking now extremely late in the process.

GORDON J: And the next question, then, is there is nothing left for relief on that alternative?

MR WOOD: I think that that may be right, subject, perhaps, to this – it is a confusing element of the situation that I think the parties are in now, which is that the Court of Appeal’s construction, on both parties’ position, as I – I know it does not say it is their position, but as we read the Court of Appeal’s judgment, what both parties are saying to this Court would entail that the Court of Appeal’s construction is wrong. It would be an odd result if the Court were not to give – if the judgment were to stand, it would continue to bind IBAC and the world, with respect, to the operation of that Act, and its net result, as I started off with, is the proposition that no one is entitled to anything beyond what might be set out in a draft report, which neither side consider is correct, although they use different words to explain why that is so.

JAGOT J: Could I point you to 163, which seems to clearly contain the Court of Appeal’s construction, and it does it by reference back to the paragraphs to which you have taken us. That is, there does seem to be clear construction that “adverse material” is confined to what is in the draft report, which is why the Court of Appeal is saying the primary judge erred in its construction, that is point 1.

MR WOOD: That is right, that is the whole – yes.

JAGOT J: Point 2 is: is it sufficient for your case that there should be, I am going to say remittal, that you do not have to demonstrate that the Court of Appeal’s construction did in fact infect the way it approached its analysis of the draft report – is it enough that you cannot tell one way or another whether it did or did not – there is a risk that it did, is that enough? Is that – because they construed it wrongly, that is an error, you say. You are either – and I cannot remember the bit of the transcript where you say that Ms Gordon said yes, I thought that might have altered in – I do not know. The transcript will speak for itself. Whatever it is, it is. So, is it enough that, given if there is demonstrable statutory construction error and that creates a risk – or we cannot tell one way or another whether that is infected, is that enough?

MR WOOD: I think if that premise was so, that the Court could not tell one way or the other, then I think that it would be enough to remit. I would go further, and say that I know we have the undertaking ‑ ‑ ‑

JAGOT J: That is 177 ‑ ‑ ‑

MR WOOD: ‑ ‑ ‑ which is another feature of the case, but 177 demonstrates, as I said at the start of the day, it is where the point hits dirt. That is demonstratable.

JAGOT J: Well, 177 is, but you have the undertaking, but it may – I understood your point to mean that if they have looked at it through the wrong construction lens, it infects the reasoning. All I am positing is that if we cannot tell one way or another, should it not ‑ ‑ ‑

MR WOOD: Yes. I would naturally endorse that. If one goes to paragraph 164, the Court of Appeal states that they commenced their analysis of the issues raised by the grounds – as I read that sentence – on the premise of the construction of the matter that they have just resolved with respect to the notice of contention. That is why defining the subject matter of what it is that you are getting the right to respond to matters, because if the subject matter is the proposed finding plus the evidence, then the reasonable opportunity might be different.

If the subject matter is just the finding, then the “reasonable opportunity” again might be different. The Court of Appeal has set up its judgment on the basis that “adverse material” is just the proposed finding, which we have contended in our ground one, which is at play – is wrong. Just bear with me a moment, I will see if I can complete that answer in a more useful way. I think that is my answer.

Can I briefly deal with the second point – and I do not have much to go, you will be relieved to know. It may not matter anymore because of the undertaking, but the suggestion that there is some prematurity in the complaint is quite wrong in principle. If our friends were right, the Act could work this way: IBAC notifies someone of an intention to make an adverse comment, does not give them the substance of the evidence on which they rely, therefore does not comply with the duty on it in 162(3).

The respondent says, you have not given me enough to respond. Now, at that point, what Ainsworth would say is that at that point you go to court prophylactically to get injunction or a prohibition to stop IBAC from doing what it has manifested its intention to do, which is to include this comment in the report.

GLEESON J: But it is a matter of evidence whether they are actually going to publish the report. In this case, the Court of Appeal says, or expresses the view, that your rights under 162(3) had not been exhausted.

MR WOOD: But we say – if anything, that is a misconception that relates to our ground, because what the court says at 177 is that, after the court deprecates the statement as “lacking in content” and it being “impossible” to respond to, what the court then says is that that:

does not mean that IBAC has denied the applicants a reasonable opportunity to be heard.

So, the court seems to be saying that 162(3) has been complied with because it does not mean that we have been denied the reasonable opportunity. The court goes on to say:

That is because, in their response to IBAC, the applicants may make the same criticism . . . and request that IBAC either provide details . . . to enable them to respond to them or delete the statement.

But we are entitled the right for IBAC to tell us the substance of the information which, on the main part of 177, has not occurred. It may be fact‑sensitive in the sense that if later IBAC writes a letter and says, we are giving you more or we no longer intend to include that comment, the world changes, but until that happens – the first moment of which that might have happened is this afternoon. Until that point happens, it is most definitely not premature to go to court, because what you are doing is going to court to stop the event happening, which is the publication of the report, at which point the reputation is irretrievably damaged.

You do not wait to see, are IBAC just going to publish or not. You go to court and say, at this point of time, the intention having been made manifest and there being no deviation from that, we at the moment have a non‑compliance by IBAC with its duty and we would like prohibition slash injunction what would then be, on the present state of affairs, an unlawful act by them to publish a report. The pages in Ainsworth concerning the approach there would be – so that is Ainsworth [1992] HCA 10; (1992) 175 CLR 564, at 581 in the plurality, 594 to 595 in Justice Brennan’s reasons.

GORDON J: May I ask a very practical question? If you are right on your construction and the matter is remitted, do you expect to get anything more in relation to the paragraphs of the subject of the reasons of decision of the Court of Appeal?

MR WOOD: We would certainly raise, as an example, the paragraph 58 material. Yes, our view is that – by 58, I mean 58 of our submission – our view is that ‑ ‑ ‑

GORDON J: Putting them to one side, because 58 will not raise below, but in relation to the paragraphs that were considered by the Court of Appeal.

MR WOOD: I would not expect the Court of Appeal to express a different view from the views that they have expressed about the paragraphs that the court directed itself to.

GORDON J: Because you have the substance or gravamen of those adverse opinions or comments.

MR WOOD: I would not expect the Court of Appeal to change its mind, and then I think we are back to Justice Jagot’s questions about ‑ ‑ ‑

GORDON J: That is why I am asking it.

MR WOOD: I think I would give the same answer, which is that it is unclear, in light of the way that the Court of Appeal has set up its premises. I think we are back to that topic. I think there is one very small final point on the underlying question of construction, it just concerns section 170A of the IBAC Act, if the Court can turn that up.

This has been deployed against us on a question of construction of “adverse material”. As I understand the point being made by Ms Gordon, it is being suggested that in 170A, “adverse material” means the proposed report, therefore, I think, the argument goes that contextually suggests that that is what it means in 162(3) as well. Quite clear points of distinction. In 170A, it is IBAC that gets a report and is required to get a report – draft report, proposed report – from the auditor. For a start, everyone agrees that under 162(3), people in my client’s position are not entitled to a draft report at all. They are entitled to a reasonable opportunity to comment on adverse material, whatever that means.

JAGOT J: Sorry to interrupt – they actually get either a proposed report or a summary of findings and proposed recommendations, which is weird considering that (7) assumes that they have the report, whereas they might not; they might just have a summary.

MR WOOD: I accept that qualification, but in any event, what IBAC does not get is what it does have in the 162 land, which is the evidence. So, in 162 land, IBAC has evidence that it is obviously moving on in proposing
to include adverse findings. The question is: does it have to give that? Common law procedural fairness would say yes. We say, properly construed, yes.

In 170A land, it does not have that because it is the auditor’s report. All that IBAC has is either a proposed report or a summary of the findings. IBAC then has to give that to another person, a third person, and give them a reasonable opportunity to respond. In that context, it would make no sense whatsoever, obviously, for it to be thought that, in that setting, the “adverse material” is anything beyond the very thing that IBAC has from the auditor. But it is a radically different context in 162(3), so it does not really advance matters further, is the only point to make. Those are our submissions.

STEWARD J: Before you sit down, did Mr Tran give you some paragraph numbers about the Court of Appeal’s construction of “adverse material”, or did I misunderstand that?

MR WOOD: Maybe I have not perfectly understood either.

JAGOT J: I raised 163 because that makes it clear ‑ ‑ ‑

STEWARD J: That is one.

JAGOT J: ‑ ‑ ‑ that they did construe it, and I thought you also had given us 135, 164 and 165.

MR WOOD: Just bear with me.

GAGELER CJ: You could just point to the upholding of the notice of contention, could you not? I mean, it is the substance of the notice of contention, which they said they uphold.

MR WOOD: Yes. Mr Tran would draw your attention to paragraphs 138 and 126.

STEWARD J: Thank you, Mr Tran.

MR WOOD: May it please the Court.

GAGELER CJ: Thank you, Mr Wood. The Court will consider its decision in this matter and will adjourn until 10.00 am on Tuesday, 12 December.

AT 2.56 PM THE MATTER WAS ADJOURNED