Australian Securities & Investments Commission v Macdonald

LEGISLATION CITED : Australian Securities and Investments Commission Act 2001 (Cth) Evidence Act 1995

Australian Securities and Investments Commission (Plaintiff) Peter Donald Macdonald (First Defendant) Peter James Shafron (Second Defendant) Phillip Graham Morley (Third Defendant) Michael Robert Brown (Fourth Defendant) Michael John Gillfillan (Fifth Defendant) PARTIES : Meredith Hellicar (Sixth Defendant) Martin Koffel (Seventh Defendant) Geoffrey Frederick O'Brien (Eighth Defendant) Gregory James Terry (Ninth Defendant) Peter John Willcox (Tenth Defendant) ABN 60 Pty Ltd (Eleventh Defendant) James Hardie Industries NV (Twelfth Defendant)

Mr A Bannon SC/ Mr R Beech-Jones SC/ Ms D Hogan-Doran/ Ms S Pritchard / Ms J Single/ Mr A Kuklik (Plaintiff) Mr S Finch SC/ Mr D Studdy SC/ Mr D Mackay (First Defendant) Mr B Walker SC/ Mr M Holmes QC/ Mr R Lancaster/ Mr N Owens (Second Defendant) Mr B Oslington QC/ Mr R Dick/ Mr N Bender (Third Defendant) COUNSEL : Mr T Bathurst QC/ Mr R Whitington QC/ Mr R Hollo/ Mr R Hardcastle/ Mr I Colquhoun (Fourth to Seventh Defendants) Mr P Wood/ Mr M Henry (Eighth Defendant) Mr R McHugh SC/ Mr S Nixon (Ninth Defendant) Mr T Jucovic QC/ Mr R Scruby (Tenth Defendant) Mr I Pike (Eleventh Defendant) Mr A Meagher SC/ Ms K Morgan (Twelfth Defendant)

Clayton Utz (Plaintiff) Minter Ellison (First Defendant) Middletons (Second Defendant) Henry Davis York (Third Defendant) SOLICITORS : Atanaskovic Hartnell (Fourth to Seventh Defendants) Arnold Block Leibler (Eighth Defendant) Blake Dawson (Ninth Defendant) Kemp Strang (Tenth Defendant) Baker & McKenzie (Eleventh Defendant) Mallesons Stephen Jaques (Twelfth Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1490/07 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v PETER DONALD MACDONALD & ORS (N0 7) EX TEMPORE JUDGMENT

1 The fifth defendant, Michael John Gillfillan, volunteered to be interviewed by the plaintiff, the Australian Securities and Investments Commission. He was not required to give evidence under s 19(2) of the Australian Securities and Investments Commission Act 2001 (Cth) and did not, thereby obtain the immunity from use of the transcript of his evidence under s 68(2) and s 68(3) which are in the following terms: "(2) Subsection (3) applies where: (a) before: (i) making an oral statement giving information; or (ii) signing a record; pursuant to a requirement made under this Part, Division 3 of Part 10 or Division 2 of Part 11, a person (other than a body corporate) claims that the statement, or signing the record, as the case may be, might tend to incriminate the person or make the person liable to a penalty; and (b) the statement, or signing the record, as the case may be, might in fact tend to incriminate the person or make the person so liable. (3) The statement, or the fact that the person has signed the record, as the case may be, is not admissible in evidence against the person in: (a) a criminal proceeding; or (b) a proceeding for the imposition of a penalty; other than a proceeding in respect of: (c) in the case of the making of a statement - the falsity of the statement; or (d) in the case of the signing of a record - the falsity of any statement contained in the record."

2 Instead, Mr Gillfillan obtained undertakings from ASIC equivalent to the protection under s 68(3) Australian Securities and Investments Commission Act under a protocol. It provided, amongst other things: "ASIC agrees that a statement made by Mr Gillfillan during the interview may not be tendered in evidence, and will not be admissible in evidence, against Mr Gillfillan in . a criminal proceeding against him; or . a proceeding for the imposition of a penalty against him." 3 ASIC was ordered to produce copies of the transcript of Mr Gillfillan's evidence to other parties in these proceedings on 28 March 2008, it being noted that Mr Gillfillan's counsel informed the court that the evidence was obtained pursuant to the protocol which Mr Gillfillan maintained was still on foot and he reserved the right to object to the tender of any statements in the transcript. 4 The first defendant, Peter Donald Macdonald, submits, correctly in my view, that the protocol does not bind him, nor is he bound by section 68(3) of the Australian Securities And Investments Commission Act. His counsel seeks to cross-examine Mr Gillfillan about the contents of some of the statements in the transcript. 5 Counsel for Mr Gillfillan calls in aid section 127(1)(a) of the Australian Securities and Investment Commission Act which is in the following terms:

"ASIC must take all reasonable measures to protect from unauthorised use or disclosure information: (a) given to it in confidence in or in connection with the performance of its functions or the exercise of its powers under the corporations legislation (other than the excluded provisions)." 6 That does not assist Mr Gillfillan in excluding the cross-examination. Mr Macdonald is not bound by that provision. It is submitted that confidentiality with respect to the transcript should be protected in equity by an injunction against Mr Macdonald. Such of the transcript as has been opened in support of Mr Gillfillan's claim does not include a claim to confidentiality, and the transcript was produced to Mr Macdonald under court order. I am not prepared to find that Mr Macdonald is bound, in conscience, to adhere to the protocol or that the material retains any claim to confidentiality that ought to be protected by injunction. 7 Section 26 of the Evidence Act 1995 is called in aid. It provides: "The court may make such orders as it considers just in relation to: (a) the way in which witnesses are to be questioned, and (b) the production and use of documents and things in connection with the questioning of witnesses, and (c) the order in which parties may question a witness, and (d) the presence and behaviour of any person in connection with the questioning of witnesses."

8 That is a provision that enables a judge to govern the general way in which proceedings should be conducted. It says nothing about the exclusion of evidence. 9 Section 29 of the Evidence Act is called in aid. It provides: "(1) A party may question a witness in any way the party thinks fit, except as provided by this Chapter or as directed by the court. (2) A witness may give evidence wholly or partly in narrative form if: (a) the party that called the witness has applied to the court for a direction that the witness give evidence in that form; and (b) the court so directs. (3) Such a direction may include directions about the way in which evidence is to be given in that form. (4) Evidence may be given in the form of charts, summaries or other explanatory material if it appears to the court that the material would be likely to aid its comprehension of other evidence that has been given or is to be given."

10 That provision deals with the way in which evidence may be given. Again, it says nothing about the exclusion of evidence. Reference was also made to s 42 of the Evidence Act and its reference to leading questions. I do not think that helps Mr Gillfillan's application to exclude the evidence. 11 Reference was made to paragraph 55 to paragraph 57 of the fourth further amended statement of claim and the allegations as to the ASX announcement contained therein which were not admitted in Mr Macdonald's pleading. I do not yet know whether that which is sought to be adduced on behalf of Mr Macdonald will impinge upon that pleading. 12 Section 44 of the Evidence Act was also raised, but at this stage I do not know the nature of the questions sought to be asked to determine its possible operation with respect to previous representations. 13 Finally, reliance is placed on s 135 of the Evidence Act which provides:

"The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party, or (b) be misleading or confusing; or (c) cause or result in undue waste of time."

14 I am minded to act under that provision if the evidence be unfairly prejudicial to Mr Gillfillan. Persons should be encouraged to volunteer information to ASIC under the protection of some suitable protocol, such as the one in this case. They should not have the threat of the possible use of the information they supply by some third party to whom ASIC has ordered to produce the transcript of the person's evidence. 15 It can be inferred that Mr Gillfillan only gave his evidence to ASIC on the basis that he had the protection of immunity from tender of his evidence in civil penalty proceedings against him that these proceedings are. That immunity should not be lightly thwarted. 16 I do not know if the evidence sought to be adduced will be unfairly prejudicial. I propose to hold a voir dire under s 189 of the Evidence Act in which counsel for Mr Macdonald may put the questions in order that I may determine that issue. In fairness to Mr Gillfillan, the voir dire will be held in closed court and will be contained in a separate transcript. If I make an order under s 135, the transcript will not be published. If I do not exclude the evidence, the transcript will become evidence in the proceedings.

Upon conclusion of the voir dire 17 In my view, the probative value of the evidence that has emerged during the voir dire is slight in that the witness was unable to recollect any of the matters put to him. The probative value being slight is to be weighed against any unfair prejudice to Mr Gillfillan. In my view, unfair prejudice is established by the possible use of the evidence given during the voir dire as going to his credit. I do not admit the evidence on the voir dire in the proceedings. I order that the transcript of evidence on the voir dire not be published to any person and that it be provided to the court to be sealed in an envelope not to be opened except by order of the court.

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