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[1991] HCA 28
High Court of Australia
1982-07-01
McHugh JJ, Brennan J, Dawson J
Original judgment source is linked above.
High Court of Australia Brennan, Dawson, Toohey, Gaudron and McHugh JJ. Corporate Affairs Commission (NSW) v Yuill [1991] HCA 28
ORDER Appeal allowed with costs. Set aside the orders and declarations of the New South Wales Court of Appeal except so far as it was ordered that the appellant (the respondent in the Court of Appeal) pay the costs of the respondents (the appellants in the Court of Appeal) of the appeal before that Court and in lieu thereof order that the appeal to that Court be dismissed. Leave to the appellant and the respondents within fourteen days to apply in writing for such further order as it or they may be advised as to the production of the envelopes of documents returned to the respondents pursuatnt to the order of the Court of Appeal.
In O'Reilly v. State Bank of Victoria Commissioners [16] , this Court held that legal professional privilege is limited to judicial and quasi-judicial proceedings and therefore did not qualify the obligation to comply with a notice issued under s. 264 of the Income Tax Assessment Act 1936 Cth by the Commissioner requiring a person to attend and give evidence and to produce books relating to any person's income or assessment. Then, in Baker v. Campbell [1] , this Court held that the power of a police officer executing a search warrant issued under s. 10 of the Crimes Act 1914 Cth is restricted by legal professional privilege. The Court by majority overruled the proposition that legal professional privilege is limited to judicial and quasi-judicial proceedings, holding that a statute should be construed as preserving a right to legal professional privilege unless the privilege is abrogated by express words or necessary intendment. The change in the law of this country which was effected by Baker v. Campbell raises two questions in relation to the construction of ss. 295 and 296(2) of the Companies (New South Wales) Code ("the Code"). Section 295 confers on an inspector power to require an officer of a corporation whose affairs are under investigation to produce books relating to its affairs and to appear for examination and to answer questions; s. 296(2) prohibits a refusal or failure to comply with such a requirement "without reasonable excuse". Should ss. 295 and 296(2) be construed in the light of the law as declared in Baker v. Campbell or in the light of the law as understood when the Code came into force on 1 July 1982 and as expressed in O'Reilly v. State Bank of Victoria Commissioners? And, if ss. 295 and 296(2) should be construed in the light of the law as declared in Baker v. Campbell, does the Code necessarily intend to abrogate legal professional privilege? The circumstances in which these questions arise and the relevant statutory context of ss. 295 and 296(2) of the Code are set out by Dawson J. and I shall not repeat them.
Statutory construction has often been described as a search for the intention of Parliament but Lord Reid's description in Black-Clawson Ltd. v. Papierwerke A.G. [2] is more accurate:
We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used. We are seeking not what Parliament meant but the true meaning of what they said. However, as Lord Simon of Glaisdale explained in that case [3] : if the draftsman uses the tools of his trade correctly, the meaning of his words should actually represent what their promulgator meant to say. And the court of construction, retracing the same path in the opposite direction, should arrive, via the meaning of what was said, at what the promulgator meant to say In order to understand the meaning of the words which the draftsman has used to convey what Parliament meant to say, the court must so far retrace the path of the draftsman as actually to put itself in his position and that of Parliament. The expositio must be both contemporanea and eodem loco. 1. [1975] A.C. 591, at p. 613. 2. [1975] A.C., at pp. 645-646.
The authority of the courts to change the common law rules of statutory construction must therefore be extremely limited for the courts are duty bound to the legislature to give effect to the words of the legislature according to the rules which the courts themselves have prescribed for the communication of the legislature's intentions: In re Jordison; Raine v. Jordison [4] ; Sorby v. The Commonwealth [5] . It is only when the operation of an old rule fails to yield the effect that the court conceives the legislature would intend its words to have in contemporary conditions (see, e.g., Bropho v. Western Australia [6] ) that it is legitimate for the courts to propound a new rule better fitted to accord with that conceived intention. Baker v. Campbell should not be regarded as prescribing an alteration in the rules of statutory construction, but rather as declaring legal professional privilege to be a common law right or privilege available (unless excluded) not only in judicial and quasi-judicial proceedings but whenever the exercise of a statutory power would trespass upon the confidentiality of the communications which the privilege protects. We are therefore not so much concerned with a change in the rules of statutory construction, as with an application of the presumption that the legislature does not intend to abrogate a common law right or privilege unless a contrary intention is clearly expressed or implied in the statute. That presumption is a means by which to discover the true intention of the legislature: see Potter v. Minahan [7] , per O'Connor J. We are thus concerned with an application of that presumption in a legal matrix which has changed since the Code was enacted. The alteration of the law which Baker v. Campbell prescribes evokes an application of the rule contemporanea expositio est optima et fortissima in lege - the best and surest mode of construing an instrument is to read it in the sense which would have been applied when it was drawn up: Broom's Legal Maxims, 10th ed. (1939), p. 463. And so, the answer to our first question is that the Code should be construed in the light of the law as it stood when the Code came into force - that is, the law as it stood before Baker v. Campbell was decided - unless there be something in the Code which is inconsistent with the operation that would thus be attributed to the Code.
Construing the Code in that way, the phrase "without reasonable excuse" in s. 296(2) would not embrace the excuse of legal professional privilege, for an exercise by an inspector of the powers conferred by s. 295 does not give rise to a judicial or quasi-judicial proceeding. (Cf. s. 295(4) which has no present relevance.) If, at the time when the Code was enacted, the legislature had directed its attention to the question whether to exclude the privilege expressly, no such exclusion would have been enacted for it was not then understood that the obligation to comply with a requirement under s. 295 would be restricted by the privilege. Imputing to the legislature at the time when the Code was enacted an understanding of the law as expressed in O'Reilly v. State Bank of Victoria Commissioners, the legislature must be taken to have intended that, without having to say so expressly, legal professional privilege should not restrict that obligation. The argument that, because the legislature has not enacted an express exclusion, the privilege must now be taken to restrict the obligation imposed by s. 296(2) must be rejected.
The Code contains no provision that is inconsistent with the operation thus attributed to the Code. To the contrary, even if ss. 295 and 296(2) were construed in the light of Baker v. Campbell so that the privilege would be available unless abrogated by express words or necessary intendment, the Code evinces an intention that legal professional privilege should not be a reasonable excuse for failure to comply with a requirement under s. 295. In the absence of language which expressly excludes the privilege, indicia of legislative intention can be found in the nature of the statutory power, the prescribed manner of its exercise and the purpose which its exercise is designed to achieve: Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs [8] . That case considered the question of reasonable excuse for non-production of a company's documents on the grounds that the production might tend to incriminate the person from whom the production was sought.
The indicia of legislative intent are found in the text of the statute. The powers conferred by s. 295 are exercised by the giving of a notice in writing to an "officer of a corporation". Solicitors for a corporation are included as a class within the definition of "officer" for the purposes of Pt VII of the Code: s. 289(1). Compliance with a requirement under s. 295 is enforced by a court which, after inquiry, may order compliance or may impose a penalty: s. 297(2). The court does not enter upon an inquiry unless the inspector has certified that a person has failed to comply with a requirement under s. 295 "without reasonable excuse". It is unlikely that the legislature intended that an inspector, contemplating the issue of a certificate, should have to form an opinion as to whether a claim of legal professional privilege has been validly made either by a solicitor or by a client. Next, s. 308 creates a specific exemption which entitles solicitors to refuse to comply with a notice issued under s. 295 where compliance would involve a breach of legal professional privilege, the exemption being conditioned on the furnishing of the client's name and address. The enactment of s. 308 would be otiose and the specifying of a condition governing the solicitor's excuse for non-compliance would be futile if the observance of legal professional privilege were a reasonable excuse for non-compliance, for a solicitor who is bound to observe legal professional privilege would be entitled to refuse to comply with a notice issued under s. 295 without satisfying such a condition (Reg. v. Bell; Ex parte Lees [9] ) otherwise than by identifying the client whose privilege is asserted: Southern Cross Commodities v. Crinis [10] . The apparent purpose of the statutory condition is to ensure that a client can be located and required to disclose communications protected by legal professional privilege although the solicitor may be excused from disclosing them.
A further textual indication of legislative intent appears in s. 299. As a general rule, statements made by a person at an examination by an inspector are admissible in evidence against that person in any criminal or civil proceedings: s. 299(1). That general rule is subject to the exception, inter alia, contained in s. 299(2)(d):
the statement disclosed matter in respect of which a claim of legal professional privilege could be made by the person in the proceedings if the provisions of this Division did not apply in relation to that evidence, and the person objects to the admission of the evidence. As the admission in evidence of a statement pursuant to sub-s. (1) would destroy any claim of privilege, sub-s. (2)(d) is enacted to restore, sub modo, the privilege which would have been available to protect the matter disclosed under compulsion on examination by the inspector had ss. 295 and 296(2) not overridden the privilege. Thus it appears that an assertion of legal professional privilege is not a "reasonable excuse" where the requirement is to answer questions. It would be a curious asymmetry to treat an assertion of the privilege as a "reasonable excuse" for non-compliance with a requirement to produce books, for the contents of the books could be ascertained in any event by compelling oral disclosure by any person who has knowledge of them.
However, there is no provision of the Code which precludes the admission in evidence of books produced in compliance with a requirement under s. 295, even though any obligation to produce those books under the general law would be subject to unwaived legal professional privilege. Indeed, the Code provides for the taking of possession by the inspector and the retention by the National Companies and Securities Commission of possession of books so produced (ss. 295(6), 307) and for the Commission to permit their use for the purposes of legal proceedings instituted as a result of the investigation: s. 307(1)(d). Although the circumstances in which privileged documents are obtained by an adversary may preclude the adversary's tendering of those documents or secondary evidence of them (see, in addition to Baker v. Campbell [11] and the cases there cited, Goddard v. Nationwide Building Society [12] ; Guinness Peat Properties Ltd. v. Fitzroy Robinson Partnership [13] ; and Hooker Corporation Ltd v. Darling Harbour Authority [14] ), it is clear that the Code intends that books which the Commission permits to be used in proceedings should not be inadmissible in evidence by reason of the manner in which their production and retention have been obtained. The absence of some provision protective of the privilege in relation to books when they are tendered in evidence, comparable with the provision of s. 299(2)(d) in relation to oral evidence, arguably suggests that the Code intends legal professional privilege to qualify the obligation to produce books. But legal professional privilege in the event of civil proceedings is not protected by the Code even in respect of oral evidence. If oral evidence given before an inspector goes to establish a fact or matter and the inspector reports that he finds that that fact or matter exists, a certified copy of the report itself is admissible as evidence of that fact or matter in civil proceedings: s. 306(12). The protection accorded to oral evidence by s. 299(2)(d) is probably to be explained by the legislature's unwillingness to compel a person to furnish out of his own mouth evidence which might be used against him on a criminal trial (cf. Hammond v. The Commonwealth [15] ) even though the compulsory disclosure of privileged communications might lead to the discovery of other admissible evidence: Hamilton v. Oades [16] . That consideration does not inhibit the compulsory production of books which might be used in evidence, for books are real evidence which speak for themselves unlike oral evidence which comes into existence only in response to an exercise of investigative power: Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs [17] .
Yet another and important indication of legislative intention to exclude the privilege emerges from consideration of the purpose of instituting a special investigation under Pt VII of the Code - "Special Investigations". Part VII provides for investigation into the affairs of corporations when investigation is, in the opinion of the relevant Minister, warranted in the public or national interest (s. 291(1) and (2)) or when the Ministerial Council decides that an investigation should take place: s. 291(3). It would frequently be impossible in practice for an inspector to discharge the duty laid upon him by s. 305 to form an opinion on the affairs of a corporation and to report that opinion and the facts on which it is based if he were unable to compel disclosure of professional communications between legal advisers and those who have played some part in a corporation's affairs. An investigation into the affairs of a corporation may extend to the possible commission of offences, the possible occurrence of fraud, negligence, default, breach of trust, breach of duty or other misconduct occasioning damage to the corporation and the possible taking or non-return of the corporation's property: see s. 306(8) and (11). An inspector's ability to satisfy the public or national interest or to meet the concerns of the Ministerial Council on these topics would be significantly diminished if the inspector were not empowered effectively to compel full disclosure of the contents of privileged communications passing between legal advisers and persons whose conduct is material to the investigation. In Rees v. Kratzmann [18] , Windeyer J. said:
The honest conduct of the affairs of companies is a matter of great public concern today. If the legislature thinks that in this field the public interest overcomes some of the common law's traditional consideration for the individual, then effect must be given to the statute which embodies this policy. This observation related to a public examination under s. 250 of the Companies Act 1961 Q.. Walsh J. cited this observation in Mortimer v. Brown [19] , where it was held that a witness in such a public examination may not decline to answer a question on the ground that the answer to it may tend to incriminate him. His Honour said [20] : This view, with which I am in respectful agreement, means that, having regard to the purpose of s. 250 and to the public interest which it is intended to serve, the contention should not be accepted that there should be applied to its construction the principle that a statute should not be construed as being intended to take away common law rights unless that intention is specifically stated. Equally, I do not think that s. 296(2) of the Code should be construed so as to admit legal professional privilege as an excuse for failing or refusing to comply with a legitimate requirement under s. 295 to produce books. To admit such an excuse would be to impair and, in some cases, to destroy the effectiveness of the mechanism which Pt VII has created in order to enforce the laws governing corporations. 1. (1965) 114 C.L.R. 63, at p. 80. 2. (1970) 122 C.L.R. 493. 3. (1970) 122 C.L.R., at p. 499.
An inspector was appointed under Pt VII of the Companies (New South Wales) Code ("the Code") to investigate the affairs of a group of companies, including their dealings with the two companies which are the second and third respondents. The first respondent, Brian Richard Yuill, was an officer of one or other of those companies being investigated. The inspector issued a notice under s. 295(1) of the Code requiring Yuill to produce certain documents which were listed in the notice. The inspector had previously sought the documents from Yuill's solicitors, but a claim of legal professional privilege was successfully made in respect of them under s. 308 of the Code. These provisions are set out later.
Yuill produced the documents in sealed envelopes to the inspector, but again a claim was made that they were protected by legal professional privilege. An arrangement was made whereby the sealed envelopes were to remain unopened in the inspector's possession until the claim for privilege could be tested. It was common ground that, apart from the provisions of the Code, the documents, or at least some of them, would attract legal professional privilege, having come into existence in the course of a professional relationship between Yuill and his solicitors.
Proceedings were commenced in the Supreme Court of New South Wales by the appellant, the Corporate Affairs Commission, claiming declaratory relief that legal professional privilege was not available. The matter came before Hodgson J. who made the declaration sought. Upon appeal to the Court of Appeal, a declaration was made upholding the claim of legal professional privilege and it is from that order that the appellant appeals to this Court.
Part VII of the Code contains in s. 289(1) a wide definition of "officer" which extends to any person who has, or has at any time had, in his possession any property of the corporation or is capable of giving information concerning affairs of the corporation. Sections 291-293 provide a mechanism for instituting an investigation of the affairs of a corporation and for the appointment of an inspector to carry out the investigation. Section 295, so far as is relevant, is as follows:
(1) An inspector may, by notice in writing , require an officer of a corporation affairs of which are being investigated under this Part -
(a) to produce to the inspector such books of the corporation and other books relating to affairs of the corporation as are in the custody or under the control of the officer;
(c) to appear before the inspector for examination on oath or affirmation and to answer questions put to him,
(3) Where an inspector has reasonable grounds for believing that books in the custody or under the control of a person may be relevant to any of the matters relating to affairs of a corporation that are being investigated under this Part, the inspector may, by notice in writing , require that person to produce those books to the inspector.
(6) Where books are produced to an inspector under this Part, the inspector may take possession of the books for such period as he considers necessary for the purposes of the investigation, and during that period he shall permit a person who would be entitled to inspect any one or more of those books if they were not in the possession of the inspector to inspect at all reasonable times such of those books as that person would be so entitled to inspect.
Section 296(2) provides: A person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under section 295. Under s. 296(7): An officer is not excused from answering a question put to him by an inspector on the ground that the answer might tend to incriminate him but, where the officer claims, before answering the question, that the answer might tend to incriminate him, the answer is not admissible in evidence against him in criminal proceedings other than proceedings under sub-section (2), (3) or (4) or other proceedings in respect of the falsity of the answer.
Section 298(1) makes provision for an inspector to cause a record to be made of the statements made at an examination under Pt VII and sub-s. (3) provides that a written record of an examination of a person under that Part that is signed by the person or authenticated in any other prescribed manner is prima facie evidence of the statements made at the examination. Section 299(1) provides that, except as provided by sub-s. (2), any statements made at an examination of a person under Pt VII are admissible in evidence in any criminal or civil proceedings against the person. Sub-section (2), so far as is relevant, provides:
Evidence of a statement made by a person at an examination under this Part shall not be admitted in evidence in criminal or civil proceedings against the person if -
(a) where the statement is an answer given by the person to a question - the proceedings are criminal proceedings (other than proceedings for an offence against sub-section 296(2), (3) or (4) or other proceedings in respect of the falsity of the answer) and, before answering the question, the person claimed that the answer might tend to incriminate him;
(d) the statement disclosed matter in respect of which a claim of legal professional privilege could be made by the person in the proceedings if the provisions of this Division did not apply in relation to that evidence, and the person objects to the admission of the evidence.
It is apparent that s. 299(2)(d) is in error in referring to "this Division" and that the reference was intended to be to "this Part". The only other provision to which I should refer at this point is s. 308. That section provides: Where in the exercise of his powers under section 295 an inspector requires a duly qualified legal practitioner to disclose a privileged communication made by or on behalf of or to that legal practitioner in his capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with a requirement, he shall, if he knows the name and address of the person to whom or by or on behalf of whom the communication was made, forthwith furnish that name and address in writing to the inspector.
In submitting that these provisions exclude by necessary implication a claim of legal professional privilege against the production to an inspector of a corporation's books (which are widely defined in s. 5(1) to include any document), the Corporate Affairs Commission relied upon the fact that, until the decision of this Court in Baker v. Campbell [21] in October 1983, the law was, or was thought to be, that a claim of legal professional privilege was not available other than in judicial or quasi-judicial proceedings: see Crowley v. Murphy [22] ; O'Reilly v. State Bank of Victoria Commissioners [23] . After the legislation in question had come into force, this Court delivered its judgment in Baker v. Campbell, which held that the doctrine of legal professional privilege is not confined to judicial and quasi-judicial proceedings. It should be added that another decision of this Court, Testro Bros. Pty. Ltd. v. Tait [24] , held that an investigation such as an investigation under Pt VII of the Code was not in the nature of a judicial proceeding.
The argument of the Corporate Affairs Commission was put upon the basis that, if the legislature proceeded upon an assumption that the law was as it was expounded in O'Reilly v. State Bank of Victoria, which would have made legal professional privilege inapplicable in the circumstances of this case, then it must be taken that the intention of the legislature was in accordance with the law as it was thought to be. But even if in enacting the provisions of Pt VII the legislature thought that the doctrine of legal professional privilege was no more than a rule of evidence and thus confined to judicial or quasi-judicial proceedings, that would not carry the argument of the Corporate Affairs Commission far enough. For it is one thing to say that the legislature accepted the law as it thought it to be; it is quite another thing to speculate upon whether the legislature would have sought to change the law had it realized that it went as far as Baker v. Campbell held it did. The Corporate Affairs Commission placed reliance upon the decision of the House of Lords in Black-Clawson Ltd. v. Papierwerke A.G. [25] where in various ways it was pointed out that it is appropriate in construing legislation to look at it through the eyes of the legislature at the time the legislation was passed and not to make assumptions which were not available to the legislature at the time - contemporanea expositio est optima et fortissima in lege. But in the present circumstances, that approach goes little further than to explain why there is limited reference in Pt VII to the doctrine of legal professional privilege. While the legislature may have acted upon the basis that the doctrine was confined to the law of evidence and had no application in a proceeding which was not of a judicial nature, it is not possible to know from that circumstance alone how the legislature might have provided had it appreciated that the doctrine embodied a fundamental right of more general application.
However, the history of the matter may at least serve to explain why the legislation is cast in the form in which it is. The absence of an express provision excluding a claim for legal professional privilege in an investigation under Pt VII may be accounted for by the view of the law which the legislature took at the time the legislation was passed: cf. Annetts v. McCann [26] . And if the legislation otherwise evinces a sufficiently clear intention to exclude the doctrine, then effect must be given to that intention: see Bropho v. Western Australia [27] . It should, however, be emphasized that, in the absence of an express exclusion, any implication to that effect must be a necessary requirement, for legal professional privilege is a doctrine of a fundamental kind which is not to be abrogated except in the clearest terms: see Baker v. Campbell [28] ; Sorby v. The Commonwealth [29] ; Balog v. Independent Commission Against Corruption [30] .
In determining the intention of the legislature, that is to say, the intention which is revealed by the words used by the legislature, it is permissible to look to the general purpose or object of the legislation. In speaking of the privilege against self-incrimination in an inquiry under the Trade Practices Act 1974 Cth, the majority in Pyneboard Pty. Ltd. v. Trade Practices Commission [31] , said:
In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings. 1. (1983) 152 C.L.R. 328, at p. 341.
Both Mortimer v. Brown [32] and Hamilton v. Oades [33] were concerned with the investigation of an officer of a company under the relevant companies legislation. In both cases it was held that the character and purpose of the legislation, which was the investigation of the conduct of persons who might be concerned, fraudulently or otherwise, to conceal information which ought to be revealed in the public interest, pointed inevitably to the exclusion of the privilege against self-incrimination. In speaking of the section imposing an obligation to provide answers in Mortimer v. Brown [34] , Kitto J. observed that "[t]o read down the wide terms of the section so as to allow a danger of self-incrimination as a valid ground for refusing to answer a question would render the provision relatively valueless in the very cases which call most loudly for investigation". And as Mason C.J. pointed out in Hamilton v. Oades [35] , Mortimer v. Brown is a striking illustration of the statutory abrogation of the privilege where the intention to abrogate was ascertained by necessary implication. In Hamilton v. Oades [35] the character and purpose of the legislation remained the same as in Mortimer v. Brown, but in the former case there was an express provision excluding the privilege and providing a limited measure of protection which was previously unavailable to a person being examined.
Privilege against self-incrimination and legal professional privilege rest upon different, although not wholly unrelated, foundations. But with both it can be said that legislation, based upon a public concern for the honest conduct of the affairs of companies, may disclose a sufficiently clear purpose as to indicate the withdrawal, in the public interest, of those protections which are otherwise afforded to individuals. Obviously, the more specific the legislation the less difficult it will be to determine whether such an implication is justified, but the character or purpose of the legislation may of itself be a sufficient indication of legislative intent.
Some idea of the purpose of Pt VII is to be found in s. 306. Sub-section (8) provides:
If from a report under this Part or from the record of an examination under this Part, it appears to the Commission that an offence may have been committed by a person and that a prosecution ought to be instituted, the Commission shall cause a prosecution to be instituted and prosecuted. And sub-s. (11) of the same section provides: If, from a report under this Part, or from the record of an examination under this Part, the Commission is of the opinion that proceedings ought in the public interest to be brought by a corporation for the recovery of damages in respect of fraud, negligence, default, breach of trust, breach of duty or other misconduct in connection with affairs of, or for the recovery of property of, the corporation to which the report or record relates, the Commission may cause proceedings to be brought accordingly in the name of the corporation. Under sub-s. (13)(b) of s. 306, a certified copy of a report under Pt VII is admissible in civil proceedings as evidence of any facts or matters stated in the report to have been found to exist by the Commission.
An investigation may be instigated under Pt VII by a minister only where it appears to him that it is in the public interest in respect of the State or, in the case of the Commonwealth minister, that it is in the national interest: s. 291(1) and (2). An investigation may also be directed by the Ministerial Council: s. 291(3). Plainly, any investigation is likely to be hampered by a claim of legal professional privilege on the part of an officer of the company being investigated. This is the more so when the aims of the investigation include the prosecution of offences and the institution of civil proceedings. In particular, establishing such matters as fraud, negligence or breach of duty may depend upon proof of the nature of any legal advice given. Legal professional privilege may not, of course, be claimed even at common law for communications which amount to participation in a crime or a fraud, but a claim of legal professional privilege may nevertheless seriously impede the investigation of those matters.
It is against that background that the specific provisions of Pt VII which throw light upon the intention of the legislature should be considered. It is convenient to turn first to s. 308.
That section is derived from s. 367 of the uniform Companies Act for the States and Territories which was first introduced in 1961. Section 367 originally provided:
No inspector appointed under this Act shall require disclosure by a duly qualified legal practitioner of any privileged communication made to him in that capacity, except as respects the name and address of his client. Inspection under the uniform companies legislation was a procedure comparable to a special investigation under Pt VII of the Code. There was, as might be expected, no indication that the draftsman of the legislation in 1961 understood that a claim for legal professional privilege might be made in the course of an inspection, which, upon the basis of Testro Bros. Pty. Ltd. v. Tait, was not a judicial or quasi-judicial proceeding. Nevertheless, it was evidently felt necessary to protect legal practitioners against the compulsory disclosure of privileged communications to an inspector. No such concern was shown where the client himself was required to provide information and the legal practitioner was required to disclose the name and address of his client, obviously to enable the necessary information to be obtained compulsorily from the latter. In Re Stanhill Consolidated Ltd. [36] an inspector obtained from the liquidator of a company the waiver of any privilege on the part of the company, but Menhennitt J. held that certain privileged communications remained privileged within the meaning of s. 367, notwithstanding the purported waiver by the liquidator, with the consequence that the company's solicitor was entitled to refuse to reveal them. Section 308 of the Code represents s. 367 in an amended form. It allows the privilege to be waived, but otherwise entitles a legal practitioner to claim privilege against an inspector. Thus s. 308 represents (as did s. 367 before it) what was thought to be a limited extension of the doctrine of legal professional privilege into the area of company investigation in order to protect the professional confidence of a legal practitioner. At the same time it manifests an intention to extend the protection of legal professional privilege no further; in particular, not to extend it to the client. 1. [1967] V.R. 749.
Section 299(2)(d) of the Code provides that evidence of a statement made by a person at an examination under Pt VII shall not be admitted in criminal or civil proceedings against the person if the statement discloses matter in respect of which a claim of legal professional privilege could be made in the proceedings if the provisions of Pt VII did not apply in relation to that evidence and the person objects to the admission of that evidence. Part VII does not of itself preclude legal professional privilege from being claimed in civil or criminal proceedings, but if a person were required to disclose information in the course of an investigation under Pt VII, the privilege would or may be lost and, in the absence of a provision such as s. 299(2)(d), be unavailable in subsequent proceedings even if they were of a judicial kind: Baker v. Campbell [37] . What s. 299(2)(d) does indicate is that the legislature assumed that legal professional privilege would be unavailable in the course of an investigation yet sought to ensure its availability in judicial proceedings but not otherwise. It is, of course, possible that s. 299(2)(d) envisages a situation in which a claim of legal professional privilege was available during the course of an investigation but was not made or, having been made, was rejected, but it is hardly likely that the legislature would seek to restore the privilege if it were not claimed initially and the history of the legislation suggests a different explanation for the provision.
It is of significance that s. 296(7) expressly denies the privilege against self-incrimination to an officer in answering questions put to him by an inspector. That provision does not extend to the production of books, but the questions that may be put by an inspector under s. 295(1) clearly may include those relating to the compilation of books or to matters to which the books relate. That fact, together with the requirement that books be produced to an inspector when requested, point to the conclusion that the privilege against self-incrimination in relation to the production of books is excluded by necessary implication: see Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs [38] . Controlled Consultants was concerned with comparable provisions under the Securities Industry (Victoria) Code and it was recognized in that case that the legislation drew a distinction between real evidence in the form of books and evidence of a testimonial character. It may be noted in passing that s. 308, in dealing with a claim of legal professional privilege by a legal practitioner, draws no such distinction. Be that as it may, privilege against self-incrimination must, upon the reasoning adopted in Controlled Consultants, be held to have been abrogated by Pt VII. That privilege is the other leading exception to the rule of compulsion in relation to evidence and it is unlikely that the legislature thought it necessary to deny its protection for the purposes of an investigation under Pt VII, intending at the same time to preserve legal professional privilege, when a claim of legal professional privilege might well hamper an investigation as much as, or more than, a claim of privilege against self-incrimination.
The reason why, in relation to answers to questions, privilege against self-incrimination is expressly denied by s. 296(7) would appear to be in order to restore the privilege in relation to a limited class of criminal proceedings. Similarly, when express mention is made of legal professional privilege in relation to statements in s. 299(2)(d), it is in order to restore the privilege in relation to criminal or civil proceedings. It is not possible to read into these provisions any intention to cut down the generality of the obligation otherwise imposed by s. 296(2) to comply with a requirement under s. 295.
Section 296(2) itself modifies the generality of the obligation which it imposes by providing, in effect, that a person may refuse or fail to discharge the obligation if he has a reasonable excuse. However, as was pointed out in Controlled Consultants [39] in a passage dealing with a similar provision in relation to the privilege against self-incrimination, but with equal application to legal professional privilege, "what may constitute a reasonable excuse obviously extends beyond matters which give rise to the privilege and there are the strongest indications in other provisions of the Code that the privilege was not intended to constitute a reasonable excuse for failing to produce books pursuant to a requirement to do so". "Reasonable excuse" more aptly refers to any physical or practical difficulties in complying with a requirement under s. 295. To construe it as embracing legal professional privilege would be to render ss. 299(2)(d) and 308 superfluous and to produce an incongruity with the denial of self-incrimination as a reasonable excuse.
Apart from the character and purpose of the legislation, s. 308 positively indicates, in respect of both books and statements, an intention not to extend the full protection of legal professional privilege beyond a legal practitioner. The unavailability of the privilege against self-incrimination strongly suggests that Pt VII was not intended to preserve legal professional privilege save to the limited extent provided in ss. 299(2)(d) and 308. And the very limits imposed by those provisions render inescapable, in my view, the conclusion that it was intended that, save as provided, legal professional privilege should play no part in an investigation under Pt VII.
For these reasons I have reached the conclusion that there was no claim of legal professional privilege in relation to the documents which the first respondent was required to produce. I would allow the appeal.
I would allow the appeal, for the reasons given by Dawson J.
This is an appeal from a declaratory order of the New South Wales Court of Appeal to the effect that certain documents need not be produced in the course of a special investigation under Pt VII of the Companies (New South Wales) Code ("the Code") by reason of legal professional privilege.
Part VII of the Code provides for special investigations into the affairs of corporations when directed by the Minister, the Commonwealth Minister or the Ministerial Council in the public interest or in the national interest: s. 291 of the Code. Special investigations may be conducted by the National Companies and Securities Commission ("the Commission") or by an inspector appointed by the Commission: s. 292. The investigation involved in this appeal is one conducted by the appellant as inspector, the appellant having appointed a delegate for that purpose.
Section 295(1) of the Code empowers an inspector to require an officer of a corporation whose affairs are being investigated under Pt VII:
(a) to produce such books relating to the affairs of the corporation as are in the custody or under the control of the officer;
(c) to appear before the inspector for examination on oath or affirmation and to answer questions put to him.
Section 5(1) of the Code defines "books" to include "any document".
Section 296(2) of the Code provides that "[a] person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under section 295." The present case arises out of the failure of the first respondent, an officer of a corporation whose affairs are being investigated under Pt VII, to comply with a requirement to produce documents which, although not the documents of the corporation under investigation, relate to its affairs. It is not in issue that legal professional privilege subsists in the first respondent with respect to those documents. Nor is it in issue that, unless that privilege is abrogated by the Code, it may be claimed in the course of an investigation under Pt VII.
This Court had not given its decision in Baker v. Campbell [40] when the Code was enacted in 1981. Until that decision it was generally thought that legal professional privilege could be claimed only in the course of judicial and quasi-judicial proceedings: see, e.g., O'Reilly v. State Bank of Victoria Commissioners [41] . The appellant relies on that history as a matter bearing on the meaning and effect of the Code so far as it concerns legal professional privilege. It may be more accurate to say that it relies on that history as a matter bearing upon the approach that should be taken in ascertaining that meaning and effect. In any event, it was put that there should be imputed to the Parliament of New South Wales, when it enacted the Code in 1981, the belief that legal professional privilege could not be claimed in answer to a requirement of the nature of that laid down by s. 295(1).
It is a well-understood rule of construction that a statute is not read as abrogating important common law rights, including legal professional privilege, save to the extent directed by express words or necessary implication: see Baker v. Campbell [42] . See also Potter v. Minahan [43] ; Ex parte Walsh and Johnson; In re Yates [44] ; Sorby v. The Commonwealth [45] ; and Balog v. Independent Commission Against Corruption [46] . It was submitted on behalf of the appellant that, by reason of the belief which, in its submission, should be imputed to the Parliament in 1981, that rule should not be applied in the present case.
The rule that important common law rights are abrogated only by express words or necessary implication is one which can be applied only to provisions capable of abrogating those rights. Thus, it can be applied to a provision creating an obligation to provide information - at least if the obligation is expressed in general terms. However, this is not a case which is concerned with the meaning of words creating an obligation to provide information. Rather, it is concerned with the meaning of an exception or qualification to such an obligation. That exception or qualification is constituted by the words "reasonable excuse" in s. 296(2), which words mark out the matters entitling an officer of a corporation to refuse to provide information required under s. 295(1). The exercise in the present case is to ascertain the meaning of those words.
The expression "reasonable excuse" is not defined in the Code. However, in its immediate context and as a matter of ordinary language, it is quite wide enough to cover any matter which the law acknowledges by way of answer, defence, justification or excuse for refusing or failing to provide information pursuant to a requirement of the type laid down by s. 295(1). And, as a matter of ordinary grammar and by reason of the nature of proscriptive provisions, the expression has an ambulatory operation so that it refers to such answer, defence, justification or excuse acknowledged by the law as at the time of the refusal or failure in question. Legal professional privilege is, of its nature, such a matter. And, by reason of the grammar and the proscriptive nature of s. 296(2), it is of no significance that it might have been thought, when the Code was enacted, that it could be claimed only in judicial and quasi-judicial proceedings.
The ascertainment of the meaning of words according to ordinary usage does not necessarily determine their true meaning. It may be that the words have been used in some technical sense; it may be that their ordinary meaning is cut down, modified, qualified or extended by the terms of some other provision in the instrument; or, it may be that the words must be construed as cut down, modified, qualified or extended by reason of the need to reconcile them with some other provision. And, quite apart from those matters, there are other circumstances in which a court will depart from the ordinary meaning of words. Those circumstances are limited and, in the main, are confined to those involving the use of general language which, because of its breadth, might result in unforeseen consequences. The rules which permit of that approach are well settled and are often stated in terms of a presumption that the legislature did not intend to effect a particular consequence: see Bropho v. Western Australia [47] , and the examples there given. The rule that general words are not read as abrogating important common law rights save to the extent required by express words or necessary implication is such a rule.
Although resort is often had to the "intention of the legislature" in formulating rules of construction and in construing statutory provisions, that intention has aptly been described as "somewhat of a fiction": Mills v. Meeking [48] , per Dawson J. And, with equal aptness, the expression "the intention of the legislature" has been described, at least in its popular usage, as a "very slippery phrase, which may signify anything from intention embodied in positive enactment to speculative opinion as to what the Legislature probably would have meant, although there has been an omission to enact it": Salomon v. Salomon & Co. [49] , per Lord Watson. The difficulty inherent in the notion of "the intention of the legislature" dictates that, save where there are settled rules or where there is some feature of the legislation requiring otherwise, the legislature should be taken to have said what it meant and to have meant what it said. Or, more accurately in terms of legal principle, the words of the statute should be taken to bear their natural and ordinary meaning. And that is the fundamental rule, often said to be the golden rule of statutory interpretation, namely, that "the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument": Grey v. Pearson [50] , per Lord Wensleydale. And that rule is dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.
It follows from what has been said that the "intention of the legislature" to be inferred from the general belief in 1981 that legal professional privilege could not be claimed in answer to a requirement of the nature of that laid down by s. 295(1) cannot, of itself, displace the ordinary meaning of the words reasonable excuse in s. 296(2). The words have no technical meaning: there is no settled rule which might affect their ordinary meaning. Accordingly, they can be given some other meaning only if some feature of the Code so requires. In that case, the "belief" or the "intention" of the legislature may serve to provide an indication of or to confirm some other meaning which, because it reconciles the words "reasonable excuse" with that feature, is their true meaning.
The appellant invokes two features of the Code in support of its argument. The first is that the Code, in s. 299(2)(d) and in s. 308, expressly confers or confirms certain benefits associated with legal professional privilege. According to the argument, those provisions are unnecessary if legal professional privilege can be the subject of an independent claim in the course of an investigation under Pt VII. The second feature upon which the appellant relies is the purpose of a Pt VII special investigation.
Paragraph (d) of s. 299(2) provides that "[e]vidence of a statement made at an examination" which discloses "matter in respect of which a claim of legal professional privilege could be made if the provisions of this Division [sic] did not apply in relation to that evidence" is not admissible in subsequent proceedings if objection is taken in those later proceedings. Section 308 makes special provision with respect to legal practitioners as follows:
Where in the exercise of his powers under section 295 an inspector requires a duly qualified legal practitioner to disclose a privileged communication made by or on behalf of or to that legal practitioner in his capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with a requirement, he shall, if he knows the name and address of the person to whom or by or on behalf of whom the communication was made, forthwith furnish that name and address in writing to the inspector.
It is clear that, save to the extent that provision is made with respect to the waiver of legal professional privilege, s. 308 is not necessary if that privilege can be the subject of an independent claim: see, as to the waiver of privilege, Re Stanhill Consolidated Ltd. [51] . It is not clear that no useful purpose attends s. 299(2)(d). It may be that that paragraph usefully operates where privileged matter is disclosed in consequence of a ruling by an inspector, after objection, that privilege does not attach. However, the presence of ss. 299(2)(d) and 308 does prompt curiosity. That curiosity is, to a considerable extent, satisfied by the history to which the appellant points and from which it might reasonably be inferred that the Parliament of New South Wales, when it enacted the Code, intended to provide a measure of protection which it believed would not otherwise be available. To the extent that the intention of the Parliament is relevant, that explanation does not import an intention to abrogate legal professional privilege. On the contrary, it imports an intention to confer at least some of the benefits associated with it.
Even if one treats the presence of ss. 299(2)(d) and 308 as inexplicable, they do not require the words "reasonable excuse" to be read down. Those provisions do not expressly cut down, qualify or modify the ordinary meaning of those words. In this respect they are to be contrasted with s. 296(7) which, to the extent of a requirement to answer questions, expressly abrogates the privilege against incrimination by providing that "[a]n officer is not excused from answering a question on the ground that the answer might tend to incriminate him". The express abrogation of the privilege to the extent specified in that sub-section precludes any implication of its abrogation to some greater extent. The decision in Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs [52] provides no basis for holding otherwise. The Securities Industry (Victoria) Code considered in that case allowed, in s. 8(6)(a)(ii), that a person could be required "to make a statement providing [an] explanation as to any matter relating to the compilation of the books or as to any matter to which the books relate" and also expressly provided, in s. 10(5), that a person could not claim the privilege against incrimination as an excuse for not making that statement. It is but a short step to say that, if an explanation as to the compilation or the contents of books cannot attract a claim of privilege, that privilege is also excluded with respect to their production. Part VII of the Code contains no provision which is truly comparable with s. 8(6)(a)(ii) of the Securities Industry (Victoria) Code.
Neither s. 299(2)(d) nor s. 308 detracts in any way from the terms of or impairs the operation of s. 296(2) unless, for some reason, they are treated as exhaustive of the benefits available to a person otherwise entitled to claim legal professional privilege. The only matter which might found an argument that those provisions should be treated as exhaustive of the benefits available to a person otherwise entitled to claim legal professional privilege is the reference in s. 299(2)(d) suggesting that "a claim of legal professional privilege could be made if the provisions of this Division [sic] did not apply". The use of those words is curious, particularly in light of the general understanding in 1981 that legal professional privilege could be claimed only in judicial and quasi-judicial proceedings. Even so, the words cannot be used to justify an approach that would treat those provisions as exhaustive. As earlier mentioned, s. 296(7) abrogates the privilege against self-incrimination, but only to the extent involved in "answering a question put by an inspector". If ss. 299(2)(d) and 308 were to be treated as exhaustive, they would, by their silence, effect an abrogation of legal professional privilege with respect to the production of documents and the answering of questions, whilst s. 296(7), by reason that it abrogates the privilege against incrimination in terms, effects an abrogation of that privilege only to the extent involved in answering questions.
Of course, no incongruity is involved if s. 299(2)(d) is treated as exhaustive of the benefits associated with legal professional privilege in its application to an oral examination under s. 295(1). This was the approach adopted by Handley J.A. in the Court of Appeal. There are two difficulties with that approach. First, although similar provision is made in s. 299(2)(a) with respect to the inadmissibility of incriminating answers in subsequent proceedings, the privilege against incrimination is, to the extent therein specified, expressly abrogated by s. 296(7). That express abrogation tells against the limited evidentiary provisions in s. 299(2)(a) and (d) performing any greater function than is indicated by their terms. Secondly, to the extent that the general understanding as to the availability in 1981 of legal professional privilege provides a basis for discerning any relevant legislative intent, that understanding suggests an intention to confer benefits, not to abrogate the privilege. Indeed, it is somewhat odd to ascribe to the legislature an intention to abrogate (whether wholly or partly) a privilege which, on the premise attending the appellant's argument, it thought need not be abrogated. There is no acceptable basis for treating s. 299(2)(d) as exhaustive even in the limited area of answering questions put by an inspector. Accordingly, it cannot be used to limit the ordinary meaning of the words "reasonable excuse".
For the sake of completeness, further mention should be made of s. 299(2)(a) and (d). As earlier indicated, those paragraphs enable a "statement" containing incriminating matter or matter involving legal professional privilege to be kept out of evidence in subsequent proceedings. No like provision is made with respect to books. Some attempt was made in argument to suggest, by reference to s. 307(1)(d), that that omission was the result of a legislative intention that documentary evidence should always be admissible in subsequent proceedings. Paragraph (d) of s. 307(1) provides that the Commission may "permit the use of books [of which an inspector has taken possession] for the purposes of legal proceedings instituted as a result of the investigation". However, s. 307(1)(d) cannot assist in the present exercise, for its meaning and effect necessarily depend on the meaning and effect of s. 296(2) and (7): to the extent that books contain privileged matter, they will come into the possession of an inspector only if the relevant privilege has been abrogated by the Code (which, so far as legal professional privilege is concerned, is the question to be decided by this appeal) or abandoned.
It is necessary to consider whether the purpose of a special investigation under Pt VII limits the ordinary meaning of the words reasonable excuse in s. 296(2).
The "purposive approach" to construction is now often required by statute. That approach is directed with respect to the Code by s. 5A of the Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code. See also s. 33 of the Interpretation Act 1987 N.S.W. which directs that a construction "that would promote the purpose or object underlying the Act" is to be preferred to one "that would not promote that purpose or object". There is no difficulty in applying a direction to that effect if a choice has to be made between different meanings that are fairly open. The circumstances, if any, in which it may be applied to deprive unambiguous words of their ordinary and grammatical meaning must be extremely rare: a direction to that effect is not authority for distilling the purpose or object of an Act in isolation from its terms or divorced from the means which the legislature has selected for its attainment.
The "purposive approach", at least in its common statutory formulation, is concerned with the purpose or object of a statute, not with the purpose or object of some particular provision or part thereof. Even so, it is not unreasonable to ascribe a purpose or object to a special investigation under Pt VII. That course was taken in relation to an examination under s. 250 of the Companies Act 1961 Q. in Mortimer v. Brown [53] , where it was said by Kitto J. that its "evident purpose" was "to enable a suggestion of fraud or concealment of a material fact to be fully investigated by means of the public examination of certain classes of persons". His Honour added that "[t]o read down the wide terms of the section so as to allow a danger of self-incrimination as a valid ground for refusing to answer a question would render the provision relatively valueless in the very cases which call most loudly for investigation." See also per Barwick C.J. [54] , and per Walsh J. [55] . And the same approach was taken by Mason C.J. and by Dawson J. with respect to s. 541 of the Code in Hamilton v. Oades [56] .
There is no difficulty in ascribing to a special investigation under Pt VII of the Code the general purpose of enabling the investigation of companies whose affairs have been so conducted as to attract the concern of the Minister, the Commonwealth Minister or the Ministerial Council. And there is no difficulty in saying that, to the extent that fraud, dishonesty or even incompetence remains unrevealed, that purpose is not achieved. Although it is possible to ascribe that general purpose to an investigation under Pt VII, it is more accurate to identify the purpose as that of investigating the affairs of a corporation to which Pt VII applies by the means specified in that Part. And the means specified allow that information may be withheld on the ground of "reasonable excuse". The Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code provides no authority for an approach which would allow the means selected by the Parliament to be extended or supplemented because, in the view of a court, the general purpose of investigation would thereby be more easily or better achieved. That is what is involved in the argument that the words "reasonable excuse" should be read, contrary to their natural and ordinary meaning, as not including an established claim of legal professional privilege.
In my opinion this appeal should be dismissed. The facts and statutory provisions are set out in other judgments.
The essential question in the appeal is whether, when the Companies (New South Wales) Code ("the Code") is read as a whole, the words "reasonable excuse" in s. 296(2) authorize a person to "refuse or fail to comply with a requirement made under section 295" on the ground that compliance with the requirement would involve a breach of legal professional privilege.
This Court has held that the right to claim legal professional privilege is not confined to judicial or quasi-judicial proceedings: Baker v. Campbell [57] . Absent a contrary legislative indication, legal professional privilege is a lawful excuse for refusing to comply with any form of compulsory legal process. Legal professional privilege, therefore, is a "reasonable excuse" for refusing to answer a requirement under s. 295 unless, by express words or necessary implication, the Code excludes the privilege from the protection conferred by the words "reasonable excuse": cf. Baker v. Campbell [58] . The privilege is not excluded expressly. But the appellant asserts that it is excluded by necessary implication. Two matters are relied on in support of this proposition.
First, it is contended that, since Baker v. Campbell was not decided until after the enactment of the Code, the Code was passed on the assumption that legal professional privilege was not an answer to a requirement made under s. 295. Accordingly, so it is contended, Parliament did not intend the words "reasonable excuse" to cover a claim of legal professional privilege.
The notion of legislative intention in the context of statutory interpretation has been said to be "somewhat of a fiction":Mills v. Meeking [59] , per Dawson J. Nevertheless, as Lord Radcliffe pointed out in Attorney-General (Canada) v. Hallet & Carey Ltd. [60] : "the paramount rule remains that every statute is to be expounded according to its manifest or expressed intention." As this statement implies, the intention of Parliament is not the collective, psychological state of mind of the individual members of Parliament; it is the intention which is inferred from the terms of the enactment. In Black-Clawson Ltd. v. Papierwerke A.G. [61] Lord Diplock pointed out:
The acceptance of the rule of law as a constitutional principle requires that a citizen, before committing himself to any course of action, should be able to know in advance what are the legal consequences that will flow from it. Where those consequences are regulated by a statute the source of that knowledge is what the statute says. In construing it the court must give effect to what the words of the statute would be reasonably understood to mean by those whose conduct it regulates. That any or all of the individual members of the two Houses of the Parliament that passed it may have thought the words bore a different meaning cannot affect the matter. Parliament, under our constitution, is sovereign only in respect of what it expresses by the words used in the legislation it has passed. (My emphasis.) 1. (1990) 169 C.L.R. 214, at p. 234. 2. [1952] A.C. 427, at p. 449. 3. [1975] A.C. 591, at p. 638.
The first step in the process of statutory construction is the ascertainment of the ordinary grammatical meaning of the legislative provision in question. However, ascertaining the ordinary grammatical meaning of a legislative provision is only the first step in the process of statutory construction, for the object of that process is to ascertain the meaning which Parliament intended. The grammatical meaning of a provision is not always the meaning which Parliament intended the statute to have. For the purpose of ascertaining the statutory or legal meaning of an enactment, it is necessary to take into account various rules of construction which Parliament is presumed to have intended to be used to ascertain the meaning of its legislation. The application of these rules often results in the statutory or legal meaning being different from the grammatical meaning of an enactment. Thus, it is a rule of construction that the purpose of the legislation must be taken into account in determining the statutory meaning of one of its provisions. The application of this rule may have the effect of modifying the grammatical meaning of the provision. Likewise, it is a rule of construction that, in the absence of a clear contrary indication, legislation is not to be interpreted as abolishing basic common law rights and privileges. The application of this rule may require the reading down of the literal meaning of general words in an enactment.
Rules of construction, however, are only guides to the statutory or legal meaning which Parliament intended an enactment to have. As Lord Reid pointed out in Maunsell v. Olins [62] :
rules of construction are not rules in the ordinary sense of having some binding force. They are our servants, not our masters. They are aids to construction, presumptions or pointers. Not infrequently one "rule" points in one direction, another in a different direction. In each case we must look at all relevant circumstances and decide as a matter of judgment what weight to attach to any particular "rule". 1. [1975] A.C. 373, at p. 382.
In the present case, the appellant relies on the rule of construction that, in determining the meaning of an enactment, it is permissible to take into account the state of the existing law at the time when the enactment was passed: Black-Clawson Ltd. [63] . The appellant then says that, at the time when the Code was passed, the accepted opinion of well-informed lawyers was that a claim of legal professional privilege was confined to judicial and quasi-judicial proceedings: Minter v. Priest [64] ; Parry-Jones v. Law Society [65] ; Brayley v. Wilton [66] . Consequently, so the appellant contends, it should be inferred that Parliament did not intend legal professional privilege to be a "reasonable excuse" within the meaning of s. 296 because proceedings under Pt VII of the Code were not judicial or quasi-judicial proceedings. Moreover, the appellant asserts that the provisions of ss. 299(2)(d) and 308 are explicable only on the basis that Parliament assumed and intended that legal professional privilege was not a "reasonable excuse", within the meaning of s. 296.
But accepting that the Code is to be construed on the basis that Parliament assumed that legal professional privilege was not an answer to a requirement made under s. 295, it does not follow that Parliament intended legal professional privilege to be outside the protection conferred by s. 296 if that assumption should prove to be wrong. The expression "reasonable excuse" has an ambulatory operation. Absent a contrary indication from other provisions of the Code, the intention of Parliament, therefore, was that the words "reasonable excuse" should include any current legal right to resist the compulsory production of documents or answering of questions. Since Baker v. Campbell, legal professional privilege has been recognized as such a right. Exercise of the privilege is a "reasonable excuse", therefore, unless the provisions of the Code indicate the contrary. Hence, the assumption that legal professional privilege was not a "reasonable excuse" within the meaning of s. 296, at the time of its enactment, is not itself a ground for holding that Parliament intended that legal professional privilege could not be a "reasonable excuse".
The second contention of the appellant is that, having regard to the purpose of Pt VII, the language of s. 295, reinforced by the provisions of ss. 299(2)(d) and 308, evinces a legislative intention to exclude legal professional privilege from the scope of the expression "reasonable excuse" for failing to comply with s. 295.
In determining the question arising from this contention, three rules of construction are of importance, but two rules point in one direction and the other rule in the opposite direction. One rule is that enacted in s. 5A of the Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code ("the Interpretation Code") which provides that "a construction that would promote the purpose or object underlying the relevant Act shall be preferred to a construction that would not promote that purpose or object". Another is the rule that a statute will not be construed to abolish a fundamental common law right unless the legislative intention to do so emerges clearly by either express words or necessary intendment: Sorby v. The Commonwealth [67] ; Baker v. Campbell [68] . The third is the rule that a common law privilege will be impliedly abrogated by an obligation, expressed in general terms, to answer questions or produce documents if the character and purpose of the provision indicate that the obligation is not intended to be subject to any qualification: Pyneboard Pty. Ltd. v. Trade Practices Commission [69] .
The right to refuse to disclose communications and materials passing between a legal adviser and client for the purposes of advice or use in existing or anticipated litigation is a fundamental common law right: Baker v. Campbell. An intention to abolish the privilege will not be assumed and will not be inferred "from indirect references, uncertain inferences or equivocal considerations": The Commissioner of Police v. Tanos [70] . Nor is such an intention to be inferred from the application of the expressio unius principle: cf. Annetts v. McCann [71] . This right can be taken away only by express words or necessary implication. The general words of s. 295 are not themselves sufficient to abolish the privilege any more than the general words of s. 10 of the Crimes Act 1914 Cth were sufficient to abolish the privilege in Baker v. Campbell. Nor are the references to the privilege in ss. 299(2)(d) and 308, when read with s. 295, sufficient to indicate an intention to exclude the privilege. The words of s. 299(2)(d) - "matter in respect of which a claim of legal professional privilege could be made by the person in the proceedings if the provisions of this Division [sic] did not apply in relation to that evidence" - do not unequivocally indicate that Parliament intended the privilege not to be a "reasonable excuse" for the purpose of s. 296. They are explicable on the basis that the Parliament assumed that the privilege did not apply in Pt VII proceedings and that once privileged matter was disclosed it would thereafter be admissible in any legal proceedings. Section 299(2)(d) shows only an intention to protect the privilege, not an intention to exclude it from the protection conferred by s. 296(2). Of course, s. 299(2)(d) is unnecessary if the privilege can be claimed in answer to a requirement made under s. 295. But that is because Parliament assumed that legal professional privilege did not apply in Pt VII proceedings; s. 299(2)(d) gives no guidance as to what the intention of Parliament was if the privilege should be held to be available in those proceedings. Likewise, the terms of s. 308 do not unequivocally indicate that the Parliament intended to exclude legal professional privilege as a "reasonable excuse" within the meaning of s. 296(2). That section is also explicable on the basis that the privilege was assumed to be inapplicable in Pt VII proceedings. Even then s. 308 seeks to protect the position of the legal practitioner by entitling him or her to refuse to comply with the requirement unless authorised by the person entitled to claim the privilege.
Ironically, the assumption of Parliament that the privilege did not apply in Pt VII proceedings negates the inference which might otherwise be drawn from the terms of ss. 299(2)(d) and 308. If Baker v. Campbell had been decided before the enactment of the Code, those two provisions would have given rise to the inference that Pt VII intended to abolish the privilege as a "reasonable excuse" for failing to comply with a s. 295 requirement.
The general words of s. 295 and the references to legal professional privilege in ss. 299 and 308, however, are equivocal on the issue whether Parliament intended to abolish legal professional privilege as an excuse for failing to comply with s. 295. Consequently, they do not compel the inference that Parliament intended to withdraw that privilege from the ambit of the words "reasonable excuse" in s. 296(2). But the appellant says that s. 295 is capable of that construction and that the Code is to be interpreted in accordance with the rule laid down by the Interpretation Code that "a construction that would promote the purpose or object underlying" the Code is to be preferred "to a construction that would not promote that purpose or object". One of the objects of the Code is to investigate the affairs of corporations for the purpose of determining whether the Commission should institute criminal or civil proceedings. Clearly that object is promoted by the Commission having available all relevant evidence including evidence of communications and documents passing between a legal practitioner and client. However, the appellant's argument on this point cannot succeed unless the words of s. 296(2) - not s. 295 - are capable of a construction that legal professional privilege is excluded from the ambit of the words "reasonable excuse" in that sub-section. Whether that is so depends on the answer to the question whether Pt VII of the Code, read as a whole, unequivocally indicates an intention to exclude the privilege from the defence given by s. 296(2). Consequently, the rule of construction embodied in s. 5A of the Interpretation Code does not assist the appellant. The success of the appellant's case depends on whether the general words of s. 295 together with the purposes of the Code evince a manifestly plain intention to exclude legal professional privilege from the scope of s. 296(2).
In Pyneboard Pty. Ltd. v. Trade Practices Commission, this Court considered whether s. 155 of the Trade Practices Act 1974 Cth intended to abolish the right to refuse to answer questions if they expose the person questioned to a civil penalty. By majority, the Court held that it did. In the course of doing so, Mason A.C.J., Wilson and Dawson JJ. said [72] :
it is necessary to bear in mind the general principle that a statute will not be construed to take away a common law right unless the legislative intent to do so clearly emerges, whether by express words or by necessary implication: Pearce, Statutory Interpretation in Australia, 2nd ed. (1981), pars. 113-116; cf. Mitcham v. O'Toole [73] .
In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation.
This statement was intended as a general rule of construction for determining whether a statute had impliedly abrogated a common law right or privilege. It was deduced from decisions such as Mortimer v. Brown [74] and King v. McLellan [75] . It is applicable to the present case. Section 296(2) makes it clear that the general power conferred by s. 295 was intended to be subject to the qualification that a requirement under that section need not be complied with if there was a "reasonable excuse" available. Unlike s. 155 of the Trade Practices Act, therefore, the general terms of s. 295 show no implied intention to abolish all relevant common law rights and privileges. To the contrary, the terms of s. 296(7) expressly abolishing the common law right to refuse to incriminate oneself, and the terms of s. 296(2) allowing a person with a "reasonable excuse" to refuse or fail to comply with a requirement made under s. 295 show conclusively that s. 295 has no such implied intention. Because of the presence of s. 296(2) and (7), the general purpose and character of Pt VII do not assist the appellant's claim.
At the time of enactment of the Code, Parliament assumed that legal professional privilege was applicable only in judicial and quasi-judicial proceedings. Acting on that assumption, it took steps to protect a legal practitioner asked to reveal matters protected by the privilege; it also took steps to protect the use of information disclosed in breach of that privilege. At the same time, Parliament permitted a person to refuse to comply with a requirement under s. 295 if that person had a reasonable excuse for doing so. Except for self-incrimination (s. 296(7)), the expression "reasonable excuse" was intended to include any general common law right or privilege to refuse to answer questions or produce documents. Legal professional privilege has now been held to be such a right or privilege. The fact that Parliament assumed that that privilege was not a general common law privilege, available outside judicial or quasi-judicial proceedings, does not mean that Parliament intended legal professional privilege to be outside the protection conferred by the words "reasonable excuse" if, contrary to its belief or assumption, the privilege was otherwise held to be available in Pt VII proceedings. Moreover, because of the qualification contained in s. 296(2) and the terms of s. 296(7), the character and purpose of Pt VII provide no ground for inferring that Parliament intended to exclude legal professional privilege as a "reasonable excuse" for not complying with a requirement made under s. 295.
Corporate Affairs Commission (NSW)
Yuill