Hogan v Australian Crime Commission [2005] FCA 913 | Case summary

'MR HANNAFORD: An application has been made by Mr Martin Carter to appear before me to represent Mr Hogan as his legal representative during the course of these examinations. Mr Camilos has submitted to me that having regard to the discretion that is available to the Examiner as determined in (a), (b) and (d) and the NCA [sic, a reference to the A, B and D case referred to below], that I should exercise that discretion so as to preclude Mr Carter being present, as Mr Carter has previously appeared before another Examiner representing a witness who is a - a witness to these examinations and to the matter which is the subject of this investigation. Mr Camilos has submitted to me that the fact that Mr Carter has been previously present, that there could arise a conflict of interest as a result of either the evidence that has been given by the previous witness, or as a result of the evidence which may be given by this witness, which could relate to the - the previous witness. The - the approach that has been taken by other Examiners and which will be taken by myself in this matter is that to the very best of the ability of the Examiners, we do not wish to have arise a situation where an investigation could be compromised, either overtly, or inadvertently. The approach is to not grant leave to appear to legal advisers where the legal adviser will be present representing persons who are witnesses within the same investigation. It is the issue of seeking to avoid compromising a particular investigation that this matter does arise. It is important in the exercise of that discretion that regard be had to the integrity of the investigation, whilst at the same time recognising the right of the witness to be legally represented. The issue of the representation is one that is recognised by the legislation, however, the legislation does not recognise that it is the entitlement of the witness to have any person represent them. The witness has been given an adequate opportunity to seek to have represented - have a - have representation by a person who has not previously been present before the Commission during the course of the investigation. During the examination yesterday this matter was also raised and the issue of not compromising, or potentially compromising an investigation was drawn to the witness's attention. Again, the witness was given an adequate opportunity to seek alternative representation. Mr Carter did as a matter of courtesy indicate to me yesterday that he would be making this application. At the time I drew attention to the potential concern. Mr Carter today again makes the application on instructions from Mr Hogan. The issue is not one of a reflection on Mr Carter. The issue is one of sustaining the investigation but, also, not compromising either the witnesses or the integrity of the evidence, or the overall direction of the investigation. Therefore, in the exercise of the discretion that's available to me I decline to grant leave to Mr Carter to represent Mr Hogan.' As the examiner pointed out, and as senior counsel for the respondents on this application repeated, the direction was not given by reason of any concern about the professional integrity of the counsel personally. It was accepted that he would conscientiously endeavour to comply with any direction given by the examiner under s 25A(9) that any material presented at the examination not be published. 15 As noted, the examiner found that he had the power to exclude the counsel notwithstanding s 25A(2). It is common ground that he was referring to s 25A(3). Once that step was taken, the examiner's reason for the decision was in essence that the counsel should not be permitted to be present at the examination because he had already represented another person who had been examined in relation to the same special investigation. Such dual representation might, it was said, compromise 'either overtly, or inadvertently' the special investigation. The examiner then observed that the applicant had been given an adequate opportunity to secure alternative representation by a legal representative who had not previously represented a witness at an examination in relation to the investigation. On the previous day, the issue as to whether the counsel would be permitted to appear at the examination to represent the applicant arose. The examiner gave a preliminary intimation of his attitude in the following passage: ' … the Examiners take a very serious view of the issues of conflict of interest and the - the principles espoused in A, B and D, that's why in the notes that are attached to the summons that's given to a witness, that attention is drawn to that, so that the practitioners have their attention drawn to it, so as to avoid any potential embarrassment --- It's not an issue in relation to the integrity of the - the legal practitioners, the issue is one of what could result in a peer conflict that could arise out of the evidence where there is an investigation that's involved organised crime and under our legislation organised crime is where more than two people are involved in a particular enterprise. This particular investigation does involve a group of people who were - who it is submitted to me are involved jointly in particular enterprises. The evidence of the particular witnesses will impinge upon the activities of those other witnesses, in particular, witnesses as I understand it you've represented. For you to be in a situation where you might hear that evidence would significantly - has the potential to significantly compromise you and it could have the impact of compromising the investigation.' The summons did not have any notes attached to it which addressed specifically the present issue. It had an annexure containing notations pursuant to s 29A headed 'Statement of Rights and Obligations under Section 29B of the Australian Crime Commission Act 2002'. It emphasised that the person receiving the summons may not disclose its existence, or any information about it, except in very limited circumstances. To do so involves the commission of an offence against s 29B. 16 There is much to be said for the proposition that s 25A(3) does not itself empower an examiner to exclude a nominated legal representative from being present during the examination of a client. Section 25A(2)(a) entitles a person being examined to such representation. It would have been easy to express the entitlement recognised or granted in s 25A(2)(a) in a qualified way, that is as being subject to any direction given under s 25A(3). It does not do so. Moreover, s 25A(3) can readily be understood as creating a power and discretion to control those present at an examination, other than those who are there by reason of such an entitlement. Furthermore, s 25A(4) appears expressly to limit the power to an examiner under s 25A(3) so that a direction may not prevent the presence during an examination of the legal representative of the examinee. There is an interaction of s 25A(2) and (4). Section 25A(2) permits an examinee, and may permit in special circumstances another person, to be represented by a legal practitioner during an examination. Section 25A(4) then provides that a direction under s 25A(3) does not prevent the legal representatives in either category in s 25A(2) from being present at the examination. Section 25A(5) limits those who may be present at an examination to those eligible to be present by a declaration under s 25A(3) or by the operation of s 25A(4). If a direction under s 25A(3) could, as the respondents contend, preclude the legal representative of an examinee from being present, then s 25A(5) would itself have been differently expressed. 17 There may, of course, be circumstances where the conduct of a legal representative (or of other persons) impedes or may impede the conduct of an examination. Such circumstances can include unruly or disruptive behaviour. It would not be possible to provide an exhaustive list of the circumstances which might arise. Some are referred to by Macrossan CJ in Re Whiting [1994] 1 Qd R 561 at 567. 18 In court proceedings, a court has an inherent power to regulate the conduct of its proceedings. That power extends to the exclusion from the court of an unruly or disruptive person. It is necessary to have such power to ensure the fair and expeditious conduct of proceedings. If that power did not exist, the court would be unable to preserve the integrity of its process from abuse. The power exists in addition to any statutory power to make rules of procedure: see per Lord Devlin in Connelly v Director of Public Prosecutions [1964] AC 1254 at 1347. The wide scope of the power is discussed by Mason QC (now Mason P of the Supreme Court of New South Wales) in 'The Inherent Jurisdiction of the Court' (1983) 57 ALJ 449. See also Dockray, 'The Inherent Jurisdiction to Regulate Civil Proceedings' (1997) 113 LQR 120. 19 Notwithstanding a statutory right of audience exclusively granted to legal practitioners, a court may permit other persons to appear on behalf of a party: O'Toole v Scott [1965] 2 All ER 240. The statutory right of audience enjoyed by legal practitioners will not generally oust or diminish the inherent power of the court, unless clear and specific words are used: Skouvakis v Skouvakis [1976] 2 NSWLR 29 at 34; Douglas v Douglas [1976] Qd R 75. There is no reason to think it has done so in any of the Australian jurisdictions. The entitlement of a person to be represented in proceedings cannot be removed, but it is qualified only to the extent the proper exercise of that inherent power (or some other statutory power) permits: R v Matthews (1887) 8 LR (NSW) 45 per Darley CJ at 49-50. 20 The point of those remarks is that s 25A(1) of the ACC Act appears to be intended to empower an examiner to exercise the same powers to control the examination as a court has in the exercise of its inherent power. If that be so, s 25A(3) would not need to be available to perform that function. It could perform the function of empowering the examiner to exclude from the examination all but those persons who are there by reason of an entitlement otherwise provided for in the Act. 21 However, that approach to the construction of s 25A(3) may be foreclosed by the Full Court (Bowen CJ, Sheppard and Morling JJ) in National Crime Authority v A, B and D (1988) 18 FCR 439 (the A, B & D case). The A, B & D case concerned the antecedent provisions in the NCA Act. Apart from the use of 'the Authority' instead of 'the examiner', subs 25(4) and (5) of the NCA Act are in the same terms as subs 25A(2) and (3) of the ACC Act. The equivalent provision to s 25A(1) was not then present in the NCA Act. It was decided in the A, B & D case at 448 that the National Crime Authority (the NCA) was empowered under s 25(4) of the NCA Act to exclude a legal practitioner from a hearing conducted by the NCA if it concluded on reasonable grounds and in good faith that to allow the representation would, or might, prejudice the investigation which it was carrying out. 22 The Full Court first addressed the nature of the NCA and its functions. They were said at 446-447 to be so extensive as to indicate that the NCA had power to regulate its own proceedings with a view to ensuring that they were not prejudiced, or exposed to the risk of being prejudiced, by the conduct of any person. The next step was to rely upon s 19 of the NCA Act, which at 447 their Honours described as a 'critical provision'. It is in the same terms as s 19 of the ACC Act, except that 'the Authority' i.e. the NCA is referred to instead of the ACC. Section 19 of the ACC Act provides: 'The ACC has power to do all things necessary to be done for or in connection with, or reasonably incidental to, the performance of its functions, and any specific powers conferred on the ACC by this Act shall not be taken to limit by implication the generality of this section.' 23 Their Honours concluded at 447 that: '… the essential nature of the [NCA] and the functions with which it has been entrusted, when considered along with s 19 of the [NCA Act], lead to the conclusion that the power exists [to refuse to allow the legal representative to appear].' Reference was also made to s 46(8) of the NCA Act. That power enabled the NCA to regulate its proceedings to avoid a situation arising where the confidentiality of information obtained by it may be exposed to the risk of disclosure. Hence, the entitlement to legal representation at an examination was said to be subject to the proper exercise of that power. 24 Their Honours then noted that the NCA had given 'anxious consideration' to its exercise, where a legal practitioner was to have represented five witnesses at examinations to be conducted by the NCA. After noting that there was no suggestion of any anticipated impropriety on the part of the legal practitioner, their Honours said at 447: 'What the Authority feared was that a legal practitioner anxious to do his duty to his clients might, quite unintentionally, perhaps subconsciously, reveal to one or more of the respondents matters which would forewarn them of what they might expect to be asked. That is the sort of risk which concerned the Authority and which persuaded it that it should refuse to allow the legal representative to appear.' 25 Strictly speaking, that decision may not be binding upon me. That is because part of its ratio decidendi involved reliance on s 19 of the NCA Act. It is not clear that s 19 of the ACC Act does apply directly to the powers of an examiner. Under the NCA Act the examination was conducted by the NCA itself and so it had the incidental powers in s 19 of the NCA Act when conducting the examination. The ACC is established by s 7(1) of the ACC Act. Section 7(2) states that the ACC consists of its CEO, and the examiners appointed under s 46B(1), and the members of the staff of the ACC as extensively defined in s 4. Hence, the second respondent as an examiner conducting the examination, whilst part of the ACC, may not himself be the ACC so as to have its incidental powers under s 19. On the other hand, the broad observations of the Full Court in the A, B & D case appear largely to be based upon their Honours' view as to the scope of the general power to regulate its proceedings (see at 448). That general power is now expressed in s 25A(1) of the ACC Act. 26 Section 25(3D) of the NCA Act is in the same terms as s 25A(1) of the ACC Act. Section 25(3D) was enacted by s 38 of the Crimes Legislation Amendment Act 1989 (Cth), that is following the decision in the A, B & D case. There is nothing in the Second Reading Speech or in the Explanatory Memorandum to the Crimes Legislation Amendment Bill 1989 to explain its particular presence. Whether its presence may have affected the reasoning of the Full Court in the A, B & D case is speculative. It may have been inserted to make explicit the power which in that decision was inferred from other provisions of the NCA Act. 27 In any event, it is clear that the examiner has power to regulate the conduct of the proceedings at the examination. Whether that power extends to protect the integrity of the special investigation itself is not so clear. There is a difference between the examiner regulating the conduct of proceedings at an examination to ensure the examination is conducted fairly and efficiently, and the examiner seeking to preserve the integrity of the special investigation itself. The integrity of the special investigation may be seen to be qualified by the legislative entitlement of an examinee to be legally represented. That entitlement involves the legal representative coming to learn of the summons, of the special investigation, and what is gleaned from the content of the examination. In the context of the ACC Act generally, it may be that s 25A(3) does not extend the power of an examiner to exclude the counsel from the examination in the circumstances and that, in respect of the entitlement under s 25A(2), the power granted to the examiner in s 25A(1) is limited to regulating the conduct of proceedings at an examination to ensure that they are conducted fairly and efficiently. 28 Sections 25A(4) and (5) are mirrors of the provisions previously in s 25(6) and (7) of the NCA Act. In the A, B & D case, the Full Court made only fleeting reference to them at 446. It said it was not unmindful of those provisions but that they are in aid of the right to representation, so they do not themselves create the right to appear on the part of the legal practitioner or practitioners. The context was that the Full Court was emphasising that s 25(4) of the NCA Act created a right in an examinee to be represented, and not a right in a legal practitioner per se to appear at an examination. In the wider context, for the reasons I have given, I regard those provisions as significant to the proper construction of s 25A(3) of the ACC Act. 29 Were I not constrained by authority, and were it necessary to do so, I would conclude that s 25A(3) does not entitle an examiner to direct that a legal representative of an examinee may not be present during an examination. 30 However, as it is unnecessary to decide that issue, I will proceed on the basis that the examiner had power, by reason of s 25A(1) or s 25A(3) to give directions to avoid a situation where the confidentiality of information obtained in an examination may be exposed to the risk of disclosure so that the special investigation is itself impaired. Subject to one matter, I shall therefore proceed on the basis that the Full Court in the A, B & D case states the applicable legal principles. 31 The one matter to which it is necessary to refer arises from a submission of senior counsel for the applicant. In the event that the Court was persuaded that the examiner had power under s 25A(3) to direct that the counsel not attend the examination, it was submitted that the A, B & D case understated the test as to when that power could properly be exercised. Based upon the observations of Lockhart J in Australian Securities Commission v Bell (1991) 104 ALR 125 at 131, it was contended that the correct test is whether the examiner concludes on reasonable grounds and in good faith that to allow the representation 'will or is likely to' (rather than 'will, or may') prejudice the special investigation. However, Lockhart J's comments expressly referred to the A, B & D case and his Honour noted the differences between the relevant provisions of the NCA Act and the Australian Securities Commission Act 1989 (Cth) to reach his view. Moreover, Shepphard J in that case at 139 did not see the need to depart from the formulation in the A, B & D case. Burchett J, the other member of the Full Court, did not directly comment on the issue. 32 In the circumstances, I consider I should follow the formulation of the relevant test in the A, B & D case. In any event, as Lockhart J said at 131, the difference in practical application will depend on judicial approach to the facts of the particular case. As the outcome of this issue does not depend upon which is the correct or preferable formulation, it is not necessary to depart from that expressed by the Full Court in the A, B & D case. 33 The ACC Act interferes with the liberty of the applicant. He is required to attend the examination. The examiner is empowered under s 29A to notate the summons to prohibit its disclosure, or any matter connected with it. The examiner did so in this instance. Section 29B then makes it an offence to disclose such information, except in the very limited circumstances provided for in s 29B(2). Relevantly, the applicant would commit a criminal offence even by disclosing the existence of the summons, or any matter connected with it, except to a legal practitioner to obtain legal advice or representation relating to the summons or matter. The ACC Act thus preserves an important feature of his rights: the right to consult a legal practitioner of his choice. 34 It is in that statutory framework that the exercise of the power to exclude the counsel from the examination, even though the applicant has engaged the counsel to represent him at the examination, and seeks to exercise the entitlement under s 25A(2), must be assessed. The statutory right of representation which is conferred is an important right and not one to be lightly cast aside: see per Sheppard J in Bell at 141. In Bell, Burchett J at 142 said: 'It follows that, in my opinion, an onus lay upon the appellant to justify the action of the inspector in this case. That was not a light burden. It could not be discharged simply by showing that the solicitor had acted for other examinees in the same examination, nor by showing that he had been involved, as solicitor, in legal work for the company relevant to the subject matter of the inquiry. In a particular case, of course, the circumstances of such an involvement might be relevant to show that the solicitor's presence at a particular examination was inconsistent with the performance of the statutory function. But the circumstances would have to be exposed for consideration by the court.' 35 The Full Court in Bell upheld the decision at first instance that, on the evidence, the exclusion of the examinee's legal representative was not justified. 36 On the material before me, the counsel disclosed to counsel assisting the examiner that he had previously appeared at an examination of another person with respect to the same special investigation. There is nothing in the transcript of the hearing on 15 or 16 December 2004 to suggest the examiner was otherwise aware of that fact. I infer that he was not. If he was, no doubt some evidence to support that fact would have been forthcoming. There is also nothing to suggest the examiner was aware of the circumstances of that earlier examination, that is the identity of the person then examined or the nature of the examination. Again, I infer that he was not. I do so from the transcript itself, and draw comfort from the absence of any evidence from the respondents to the contrary. The range of potential examinees under the ACC Act is very wide. They may include persons suspected of involvement in criminal activities, and persons who are not the subject of such suspicion. The latter category may include those who can provide information which, from their perspective, is routine and insignificant: bankers regarding bank records, accountants and other professionals, those handling transactions for clients and the like. There is no information as to whether the earlier examinee who was represented by the counsel fell into that latter category. Indeed, there is no information as to whether the summons to the earlier examinee contained the notations provided for by s 29A; it is not a routine imposition. 37 The examiner's reasons for the decision, in the circumstances, reflect the view that a legal practitioner who has appeared for an examinee at one examination will not be permitted to appear subsequently for another examinee at a later examination in relation to the same special investigation. The reason for that view is the risk of the special investigation being 'overtly, or inadvertently' compromised. 38 The reference to the danger of overt compromise of the investigation is a serious finding. It was unfounded. Senior counsel for the respondents eschewed any suggestion that the counsel might breach s 29B of the ACC Act or otherwise consciously disclose any fact or material which is confidential. The examiner himself pointed out that he did not doubt the integrity of the counsel. There is no suggestion that the counsel was unaware of the stringent confidentiality obligations which were imposed on him. The reference to the danger of 'overt' disclosure of confidential information was, I suspect, unintended on the part of the examiner. It was not capable of being supported by any material. It was not presented by senior counsel for the respondents as capable of sustaining the validity of the decision to give the direction under s 25A(3). 39 The risk of inadvertent disclosure of information so as to compromise the investigation must, as the Full Court in the A, B & D case decided, be one which the second respondent must have assessed on reasonable grounds. Possible prejudice to the special investigation might follow clearly enough from such disclosure. But the risk of such disclosure does not arise by assertion. It must arise on material known to the examiner. Here, I have found the examiner had no relevant knowledge, other than the counsel having previously appeared at an examination by another examiner of another person in the same special investigation. The nature of the former examinee or of the evidence that person gave or of the questions that person was asked was not known. 40 In those circumstances, in my judgment, the decision of the second respondent to direct that the counsel not be permitted to attend the hearing must be set aside. It was a decision made by application of a policy without regard to the particular merits of the case. It failed to apply the law correctly to the question to be considered. 41 Indeed, the ACC Act contemplates that a legal representative may appear at an examination at the behest of an examinee. The legal representative will thereby gain certain knowledge. It may not be used for any purpose outside that of the particular client's examination. The legal representative may be consulted by any other person summonsed to be examined in respect of the same investigation: s 29B(2). The respondent cannot prevent that. The legislation permits it. The legal practitioner may obtain from the proposed examinee information on the matter the subject of the summons (as required by s 28(3) except in particular circumstances). At that point it is a matter for the legal practitioner as to whether to accept instructions from the proposed examinee, in the light of the practitioner's knowledge, and inability to disclose (if the notation under s 29A was on it), the fact of the earlier summons or the information revealed at the earlier examination. If the legal practitioner then acts for the proposed examinee, the examiner must address whether there are reasonable grounds to consider that the presence of the legal representative will or may prejudice the special investigation in that context. That may depend upon the general nature of the matters the subject of the earlier examination, including whether the earlier summons was notated in accordance with s 29A, and the general nature of the matters the subject of the proposed examination. The examiner should ask how the presence of the legal representative at the second examination might be any more prone to prejudice the investigation than that person's presence at the earlier examination at which that legal representative was, and was entitled to be, present. 42 The examiner did not address the exercise of the power under s 25A(3) in the way required by law, as explained in the A, B & D case. Consequently, the decision involved an error of law, and it was an improper exercise of the power under s 25A(3) as having been made in accordance with a policy and without regard to the merits of the particular case. The examiner did not apply ' … proper, genuine and realistic consideration to the merits of the case' (per Gummow J in Khan v Minister for Immigration & Ethnic Affairs [1987] FCA 713, unreported 11 December 1987 at p 11). 43 For those reasons, the decision of the examiner to direct that the counsel not be permitted to attend the examination of the applicant must be set aside. I will give the parties leave to apply for any further or consequential orders as they may be advised. As the applicant has succeeded on the contention principally argued on this application, I have the tentative view that the respondents should be ordered to pay the costs of the application. However, I will hear the parties on that issue. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Hogan v Australian Crime Commission

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