29 As an inferior statutory court the Local Court does not have any inherent jurisdiction. It does, however, have a narrower implied jurisdiction which arises upon the principle that a grant of power carries with it everything necessary for its exercise: Grassby v The Queen (1989) 168 CLR 1 at 16-17 per Dawson J (with whom Mason CJ, Brennan and Toohey JJ agreed). In New South Wales much ink has been spilled on the question of whether that implied power extends to the making of non-publication orders which are rooted in notions of contempt: cf. John Fairfax Publications Pty Ltd v District Court of New South Wales (2004) 61 NSWLR 344 at 356-366 [38]-[99] per Spigelman CJ.
30 For present purposes, what is relevant is the general acceptance that the inherent jurisdiction of the Supreme Court of a State extends to the protection of the jurisdiction of courts involved in the administration of justice in the State: John Fairfax Publications at 354 [27] per Spigelman CJ. That emerges from the Supreme Court's ultimate supervisory jurisdiction over the administration of justice.
31 By contrast, this Court does not have a general supervisory jurisdiction over the administration of justice in New South Wales (or any other State). Thus, the mere fact that the Board's processes might constitute contempt of the Local Court is not, without more, sufficient to attract this Court's jurisdiction.
32 There are a number of instances, of course, where this Court and the High Court in its original jurisdiction have assumed a jurisdiction in relation to criminal proceedings then pending before a State court: Hammond v Commonwealth (1982) 152 CLR 188; Commissioner of Taxation v De Vonk (1995) 61 FCR 564; Watson v Commissioner of Taxation (1999) 96 FCR 48. However, in each of those cases the proceedings pending in the State court involved the alleged commission of a crime against a law of the Commonwealth. In Hammond, Mr Hammond had been charged with conspiracy in relation to the substitution of kangaroo meat for beef in the export market, apparently an offence against s 86(1)(a) of the Crimes Act 1914 (Cth). Not only that, but the prosecuting body was the Commonwealth as were, effectively, the commissioners conducting the Royal Commission. In De Vonk, the applicant was charged with conspiring to defraud the Commonwealth as was Mr Watson in Watson. In each case, the question of whether a contempt was being committed was part of a matter arising under a law made by the Parliament or in which the Commonwealth was a party. Federal jurisdiction was, therefore, clear.
33 The present case does not reveal that circumstance. The prosecutor is a New South Wales detective, the offence a New South Wales crime. However, jurisdiction is conferred on this Court with respect to matters in which an injunction is sought against an officer or officers of the Commonwealth: s 39B(1) Judiciary Act 1903 (Cth). The second respondent holds office as the Chairperson of the Board under s 251D(1A) and is appointed by the relevant minister. So too, each member of the Board is appointed under s 251D. That provision makes clear that the Board consists of its members from time to time. For that reason, the Board, as a respondent, is but a shorthand way of referring to its constituent members each of whom is, so it seems to me, an officer of the Commonwealth. It follows that the Court has jurisdiction over the applicant's claims against those officers pursuant to s 39B(1).
34 Granted then that the Court has jurisdiction to entertain the contempt argument against the Board, what are the relevant principles? Five propositions should, I think, be accepted. First, the existence of a parallel administrative inquiry is capable of constituting a contempt of criminal proceedings: McGuinness v Attorney-General (Vic) (1940) 63 CLR 73 at 85; Victoria v Australian Building Constructions Employees' and Builders Labourers' Federation (1982) 152 CLR 25 ("BLF") at 54 and 72; Hammond v Commonwealth (1982) 152 CLR 188 at 206. Secondly, whether it does so depends upon whether there is a real risk that the pursuit of the administrative investigation will prejudice, undermine or interfere with the conduct of those criminal proceedings: Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299; BLF at 96. Thirdly, where the person facing prosecution is required to answer questions by such an inquiry this risk is particularly acute because of the capacity of such questions to undermine the accused person's right against self-incrimination. Fourthly, that risk will also be more pronounced where the identity of the prosecutor and the investigating body are the same or where they are connected in some way: Hammond at 207. Fifthly, a risk may well be shown where a personother than the accused is to be examined by the administrative inquiry: Watson v Commissioner of Taxation (1999) 96 FCR 48 at 59-60 [54]-[56].
35 The application of those principles is not always straightforward. Ultimately, however, the question in each case is one of practical judgment and impression founded upon the need to identify a real risk of interference with the administration of justice. In this case, that risk is to be assessed in a statutory context which includes extensive secrecy provisions. These are to be found in Part II of the Act. Section 16(2) provides:
Subject to this section, an officer shall not either directly or indirectly, either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of officer in subsection (1).
36 "Officer" is defined in s 16(1) thus:
Officer means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to income tax.
37 Mr Dubler SC argued that the Board was not an officer. I accept that submission. However, the Board is constituted by its members and it has no separate legal personality from them. Indeed as I have said the joinder of the Board is but shorthand for the joinder of the members constituting the Board from time to time. In my opinion, each of those members is an officer of the Commonwealth.
38 Section 16(3) provides:
An officer shall not be required to produce in Court any return, assessment or notice of assessment, or to divulge or communicate to any Court any matter or thing coming under his notice in the performance of his duties as an officer, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax.
39 The consequence of these provisions is that, other than for the purpose of discharging its functions under the Act, the Board may not release, or be required by subpoena to release, such information. However, that broad proposition must be read in light of s 16(2A) which provides:
Subsection (2) does not apply to the extent that the person makes the record of the information, or divulges or communicates the information, in the performance of the person's duties as an officer.
40 If the discharge of a member's duties required disclosure of information then s 16(2A) would have the effect of permitting that disclosure to occur.
41 There is no evidence to suggest that the Board is deliberately interfering with the proceedings before the Local Court. It is likely, if that were to be suggested, that the provisions of the Act would not authorise such behaviour: De Vonk at 588. However, as De Vonk shows, unintentional action may yet have the capacity to prejudice the administration of justice. It is necessary therefore to attend to the relationship between the Board's proceedings and those in the Local Court. The following factors are relevant:
(a) An important question in the criminal proceedings is whether CAP had any entitlement to receive the Midnight Seas cheque. If it did, then it is difficult to see how Sam could have fraudulently misappropriated it.
(b) Whether CAP was entitled to receive the cheque, and if so, on what basis, is a significant aspect of the Board's inquiry.
(c) CAP denies Midnight Seas' claim that it was not entitled to the proceeds of the cheque. Any explanation of CAP's position can, indeed should, be conveyed to Midnight Seas as the complainant for its comment. The Board's function of inquiry requires as much. Any information provided to Midnight Seas in that way will not be immune from release by Midnight Seas for the secrecy provisions of Part II of the Act do not operate upon Midnight Seas.
(d) If, and when, the Board comes to decide how it should proceed in relation to CAP's registration, then the Board will be required to give reasons for that decision. It is very likely that any such reasons will include the Board's conclusions on the questions of whether CAP was entitled to deposit the cheque together with an assessment of the circumstances leading to that conclusion.
(e) That assessment will involve, most likely, a consideration of CAP's relationship with Midnight Seas, a matter also centrally relevant in the criminal proceedings.
42 Because of the secrecy provisions in the Act I do not think that the conduct by the Board of its investigation poses, in itself, a real risk to the integrity of the criminal proceedings. However, part of that investigation will require the Board to obtain Midnight Seas' response to CAP's account of how the cheque came to be deposited into its trust account. That raises, to my mind, a risk that the prosecutor (through Midnight Seas) will come to know, in advance, of CAP's explanation of how it obtained the cheque. That has the capacity to interfere with Sam's defence of the proceedings against him.
43 Independently of that conclusion, the delivery by the Board of its reasons, if it should decide to suspend or cancel CAP's registration, is likely to reveal in advance of Sam's trial CAP's explanation of how it obtained the cheques.
44 It follows that some aspects of the ongoing investigation by the Board do pose a risk to Sam's defence of the criminal proceedings. That risk consists of the central issue of CAP's role being revealed to the prosecution in advance of the trial. That does not, however, lead to the conclusion that the Board's entire inquiry should be restrained. This is because it is possible to furnish relief which permits the inquiry to continue whilst safeguarding Sam's position by restraining the Board from communicating the results of its inquiries to any other person during the pendency of the criminal proceedings. By a parity of reasoning, it would also be necessary to prevent the Board from determining CAP's suspension or cancellation until the determination of the criminal proceedings so that it does not produce reasons which might imperil the trial.
45 Against that it may be said that the Board's function of protecting the public is being thwarted. This is, in a sense, true. No doubt matters of public interest inform the breadth of injunctive relief which may be granted: see Hammond v Commonwealth (1982) 152 CLR 188 at 198-199 per Gibbs CJ (with whom Mason and Murphy JJ relevantly agreed) and 208 per Deane J. In that case the public significance of the investigation being performed by the Royal Commission made it appropriate only to prevent examination of the plaintiff and not any other witness. No doubt too, there is a public interest served by protecting the populace at large from unscrupulous tax agents, an interest to which the powers in s 252K seem naturally inclined. However, there is a countervailing public interest in ensuring the proper operation of the criminal justice system. In this case the former does not warrant a narrowing of the injunctive relief I am otherwise minded to grant.
46 The effect of my orders will be that the Board will be entitled to continue its inquiries so long as it does not divulge any of its results to other persons during the pendency of the criminal proceedings. It will also be restrained during the same period from concluding whether the registration of CAP should be suspended or cancelled as a result of the matters arising out of the Midnight Seas' complaint. For practical reasons, these conclusions must apply mutatis mutandis to David.