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[2005] FCAFC 32
Federal Court of Australia (Full Court)
2005-03-10
Black CJ, Emmett JJ
Original judgment source is linked above.
REASONS FOR JUDGMENT THE COURT: 1 Central to this proceeding is the question of whether the Commonwealth Parliament has achieved its clearly stated purpose of ensuring a seamless transition from the earlier corporations regime put in place by cooperative effort of the States and the Commonwealth to the regime enacted by the Corporations Act 2001 (Cth) ('the 2001 Corporations Act') and the Australian Securities and Investments Commission Act 2001 (Cth) ('the 2001 ASIC Act'), following referral of power to the Commonwealth by the States. 2 During 2003, Australian Securities and Investments Commission ('the Commission') began investigating whether the applicant, Mr Trevor John Kennedy, had committed offences in connection with investigations that were conducted in 1995 concerning the beneficial ownership of shares in Offset Alpine Printing Group Limited ('Offset') held by Swiss entities. The second respondent, the Director of Public Prosecutions for the Commonwealth ('the DPP'), would be responsible for instituting prosecution proceedings against Mr Kennedy in respect of any alleged offences. The DPP has requested the third respondent, the Attorney-General of the Commonwealth ('the Attorney General'), to make requests to the relevant authorities in Switzerland for documents that may be relevant to any such prosecution. The Attorney-General has in fact made requests to the competent authority of Switzerland under the Mutual Assistance in Criminal Matters Act 1987 (Cth) ('the Mutual Assistance Act'). 3 Mr Kennedy has challenged the conduct of the respondents at two levels. At the first level, Mr Kennedy asserts that the transitional provisions contained in the 2001 Corporations Actand the 2001 ASIC Act did not achieve their stated purpose. At the second level, Mr Kennedy draws attention to irregularities to be found in the documentation brought into existence by the respondents in relation to the matters briefly described above. 4 Mr Kennedy seeks injunctions, declarations and other orders under the Judiciary Act 1903 (Cth) ('the Judiciary Act'). There is no dispute about the facts and, because the proceeding raises important questions of principle, which could have a significant bearing on many other prospective prosecutions, the proceeding was removed into the Full Court (see s 20(1A) Federal Court of Australia Act 1976 (Cth)) with a request that it be heard as quickly as practicable.
RELEVANT PARTS OF THE COOPERATIVE SCHEME 5 By s 7 of the Corporations (New South Wales) Act 1990 (NSW) ('the 1990 Corporations Act'), the corporations law set out in s 82 of the Corporations Act 1989 (Cth) ('the 1989 Corporations Act'), as in force for the time being, was applied as a law of New South Wales, to be referred to as the Corporations Law of New South Wales ('the Corporations Law'). There were provisions in the same terms in the corporations laws of each of the other States and the territories (except the Australian Capital Territory), but it is not necessary to make further reference to these. Section 58(1) of the 1990 Corporations Act also provided that the Australian Securities and Investments Commission Act 1989 (Cth) ('the 1989 ASIC Act') applied as a law of New South Wales, to be referred to as the ASC Law of New South Wales ('the ASC Law'). 6 Section 74(1) of the 1990 Corporations Act provided that, for the purposes of Part III of the ASC Law, Part III of the Crimes Act 1914 (Cth) ('the Crimes Act') applies as a law of New South Wales. Section 74(2) provided that, for the purposes of Part III of the Crimes Act, as so applying, an examination or a hearing is a judicial proceeding. Section 74(3) then provided that, for the purposes of the Corporations Law or the ASC Law, an offence under Part III of the Crimes Act in relation to an examination or hearing is taken to be an offence against Part III of the ASC Law.
THE RESPONDENTS 7 The Commission is a body corporate incorporated under s 8 of the 1989 ASIC Act. The Commission was originally known as Australian Securities Commission and was continued in existence by s 261 of the 2001 ASIC Act. 8 The DPP is appointed under s 5(2) of the Director of Public Prosecutions Act 1983 (Cth) ('the DPP Act'). Under s 6 of the DPP Act, the functions of the DPP include:
INVESTIGATIONS OF MR KENNEDY'S CONDUCT 11 On or shortly after 21 April 1995, the Commission received a referral from Australian Stock Exchange Limited ('ASX'), which drew the attention of the Commission to trading in the shares of Offset between 1 September 1994 and 28 February 1995. ASX suggested that there might have been breaches of certain provisions of the Corporations Law in relation to shares of Offset. On 26 April 1995, the Commission commenced an investigation in relation to that matter. 12 On or about 16 May 1995, the Commission issued a notice to Mr Kennedy requiring him to attend an examination pursuant to s 19 of the ASC Law. On 18 May 1995, Mr Kennedy attended such an examination and was examined by an officer of the Commission. At the commencement of the examination, an oath was administered to Mr Kennedy. During the examination, Mr Kennedy denied having any interest in the Offset shares that were the subject of the Commission's investigation at that time. 13 On or about 31 May 1995, the Commission issued a notice to Mr Rene Rivkin requiring him to attend an examination pursuant to s 19 of the ASC Law. On 6 June 1995 and 6 September 1995, Mr Rivkin attended such an examination and was examined by an officer of the Commission. During that examination, Mr Rivkin denied having any interest in the shares in Offset that were the subject of the Commission's investigation. 14 On 30 October 2003, an article was published in the Australian Financial Review newspaper. The article reproduced extracts from transcripts of interviews of Mr Rivkin that had been conducted by the District Attorney of Zurich, Switzerland, in which Mr Rivkin identified himself, Mr Kennedy and Mr Graham Richardson as the ultimate beneficial owners of certain shares in Offset. 15 On 31 October 2003, the Commission, by its delegate, Mr Peter Riordan, made a decision to investigate possible contraventions by Mr Rivkin during the examinations held on 6 June 1995 and 6 September 1995 ('the First Investigation Decision'). The First Investigation Decision was recorded in a file note made by Mr Riordan and dated 31 October 2003. The file note referred to possible contraventions of s 64(1) 'of the ASC Law/ASIC Act' in relation to the information given, and the statements made, by Mr Rivkin during the examinations held on 6 June 1995 and 6 September 1995. A question arises as to what was meant by 'the ASC Law/ASIC Act'. 16 On 10 November 2003, the Commission, by its delegate Mr Riordan, made a further decision ('the Second Investigation Decision'). The Second Investigation Decision was to extend the investigation to suspected contraventions of: (i) ss 709 and 710 of the 'Corporations Law' by Messrs Kennedy, Rivkin and Richardson; (ii) s 64(1) of the 'ASC Law/ASIC Act' by Messrs Rivkin and Kennedy; (iii) s 35 of the 'Crimes Act 1914' by Messrs Rivkin and Kennedy in relation to their testimony during their respective examinations on 6 June 1995 and 6 September 1995 in the case of Mr Rivkin and on 18 May 1995 in the case of Mr Kennedy; (iv) s 1309 of the 'Corporations Law' by the Board of Directors of Offset in relation to statements made to ASX by the Board on 4 May 1995 and clarified on 11 May 1995. The Second Investigation Decision was recorded in a file note made by Mr Riordan on 10 November 2003. 17 Mr Riordan's note of 10 November 2003 is set out in Schedule 1 to these reasons. It is fair to say that there is a degree of looseness in the language used by Mr Riordan in the file note. Mr Kennedy relies upon that looseness as giving rise to grounds upon which he says that the First Investigation Decision was invalid. 18 On 19 November 2003, Mr Riordan and Mr Robert Ghali, who are authorised by the Commission to conduct examinations under s 19 of the 2001 ASIC Act, signed a notice addressed to Mr Kennedy ('the Notice'), which was subsequently served on him. The Notice relevantly provided as follows: 'In relation to an investigation concerning suspected contraventions of [provisions of various statutes]… you are hereby notified that, under subsection 19(2) of [the 2001 ASIC Act], you are required:
(a) to appear… before Peter Riordan and Robert Ghali for examination on oath or affirmation and to answer questions put to you in relation to the investigation; and
(b) to give [the Commission] all reasonable assistance in connection with the investigation; …' The Notice is set out in Schedule 2 to these reasons. There is also some looseness in the language of the Notice. 19 On 24 November 2003, Mr Kennedy attended at the offices of the Commission for an examination. There was no examination at that time and the matter was adjourned to 1 December 2003 at Mr Kennedy's request. Mr Kennedy was examined on 1 and 2 December 2003, purportedly pursuant to s 19 of the 2001 ASIC Act. 20 On or prior to 22 January 2004, the DPP requested the Attorney-General ('the First Request') to make a request to the relevant authorities in Switzerland for certain documents relating to ownership of shares in Offset. Following the First Request, the Attorney-General made a request, dated 22 January 2004, to the competent authority in Switzerland. 21 On or before 2 April 2004, the DPP requested the Attorney-General to make a request to the relevant authorities in Switzerland for further documents ('the Second Request'). By a further request to the competent authority in Switzerland, dated 2 April 2004, the Attorney-General supplemented the request made on 22 January 2004.
MR KENNEDY'S CLAIMS 22 Mr Kennedy first challenges the validity of the investigations commenced on 10 November 2003 and 31 October 2003, the validity of the Notice and the validity of the purported examination pursuant to the Notice. Mr Kennedy seeks an order restraining the Commission from taking any further steps in its investigation of him. He also seeks a declaration that the Notice is invalid and that the examination that took place on 1 and 2 December 2003 was not an examination pursuant to the 2001 ASIC Act. 23 In addition, Mr Kennedy says that the requests made to Switzerland do not comply with the Mutual Assistance Act or with the Swiss Treaty and, accordingly, are invalid. He seeks an order restraining the DPP from performing any further functions in respect of the matters alleged against him. Finally, Mr Kennedy seeks declarations that the requests to Switzerland of 22 January 2004 and 2 April 2004 are beyond the powers conferred by the Mutual Assistance Act and Article 1 of the Swiss Treaty.
THE SUSPECTED OFFENCES 24 There are four possible offences that it is said may have been committed by Mr Kennedy in 1995. They were referred to in Mr Riordan's file note of 10 November 2003 recording the Second Investigation Decision. It is convenient to deal with each of the suspected offences separately.
SECTIONS 709 AND 710 OF THE CORPORATIONS LAW 25 Section 709(1) of the Corporations Law provided that a person who is a substantial shareholder in a company must give a written notice to the Company in accordance with that section. A substantial shareholder in a company is a person who is entitled to not less than 5% of the shares of the company. Section 710(1) of the Corporations Law provided that, where:
SECTION 1309 OF THE CORPORATIONS LAW 28 Section 1309(1) of the Corporations Law provided that an officer of a corporation who makes available or furnishes information or authorises or permits the making available or furnishing of information to a securities exchange, being information that relates to the affairs of the corporation and that, to the knowledge of the officer, is false or misleading in a material particular, is guilty of an offence. 29 On 4 May 1995, Offset stated in a release to ASX that it had no independent knowledge of the beneficial ownership of certain shares in its capital. In a further release to ASX on 11 May 1995 Offset reiterated that neither Offset nor any of its directors had knowledge of the beneficial ownership of those shares. Mr Kennedy was at that time an officer of Offset, in that he was a director of Offset. 30 It is asserted that, on the assumption that Mr Kennedy had a relevant interest in, or was entitled to, at least 5% of the shares in Offset in the period 1 September 1994 to 28 February 1995 and on the assumption that Mr Kennedy authorised or permitted statements to be made to ASX on 4 and 11 May 1995 concerning shares in Offset, he committed an offence under s 1309(1) of the Corporations Law.
SECTION 64 OF THE 1989 ASIC ACT 31 Section 64(1) of the ASC Law provided that a person must not, in the course of an examination of the person, give information, or make a statement, that is false or misleading in a material particular. It is asserted that, on the assumption that Mr Kennedy had a relevant interest in, or was entitled to, at least 5% of the shares in Offset in the period 1 September 1994 to 28 February 1995, his denial of having any interest in those shares in the course of the examination of 18 May 1995 was a contravention of s 64 of the ASC Law.
SECTION 35 OF THE CRIMES ACT 1914 32 Section 35 of the Crimes Act, which is contained within Part III of that Act, provides that any person who, in any judicial proceeding, intentionally gives false testimony touching any matter, material in that proceeding, is guilty of an indictable offence. Under s 31 of the Crimes Act, 'judicial proceeding' includes a proceeding, before a body or person acting under the law of the Commonwealth, in which evidence may be taken on oath. It is asserted that, on the assumption that Mr Kennedy had a relevant interest in, or was entitled to, at least 5% of the shares in Offset in the period 1 September 1994 to 28 February 1995, Mr Kennedy made false or misleading statements in his examination on 18 May 1995 and committed an offence under s 35 of the Crimes Act, as applied as a law of New South Wales by s 74(1) of the 1990 Corporations Act.
THE TRANSITIONAL PROVISIONS 33 Following the decision of the High Court in Re Wakim; Ex parte McNally (1999) 198 CLR 511, in which it was held that the cross-vesting provisions of the Corporations Acts of the States were unconstitutional and of no effect in so far as they purported to invest and confer on the Federal Court jurisdiction in cases arising under the corporations law of a State, and the consequent effects upon the cooperative scheme, the Parliaments of each of the States referred to the Parliament of the Commonwealth, pursuant to s 51(xxxvii) of the Constitution, certain matters relating to corporations. The intention was that the Parliament of the Commonwealth would pass legislation in relation to corporations and in relation to the Commission that would take the place of the cooperative scheme. 34 Each of the States has passed laws for the purposes of s 51(xxxvii) of the Constitution, referring certain matters relating to corporations to the Parliament of the Commonwealth for the purpose of enabling it to pass the 2001 Corporations Act and the 2001 ASIC Act. In particular, New South Wales enacted the Corporations (Commonwealth Powers) Act 2001 (NSW) ('the NSW Referral Act'). 35 Thus, s 4(1) of the NSW Referral Act provides that the following matters are referred to the Parliament of the Commonwealth: (a) the matters to which the referred provisions relate, but only to the extent of the making of laws with respect to those matters by including the referred provisions in Acts enacted in the terms, or substantially in the terms, of thetabled text; (b) the matters of the formation of corporations, corporate regulation and the regulation of financial products and services, but only to the extent of the making of laws with respect to those matters by making express amendments to the Corporations legislation.
For the purposes of those provisions, the following terms are defined as indicated:
MR KENNEDY'S POSITION AFTER 14 JULY 2001 53 On the basis indicated above, namely, on the assumption (which is asserted) that Mr Kennedy had a relevant interest in, or was entitled to, at least 5% of the shares in Offset in the period 1 September 1994 to 28 February 1995 and on the assumption that Mr Kennedy authorised or permitted statements to be made to ASX on 4 and 11 May 1995 concerning shares in Offset, Mr Kennedy was liable, on 14 July 2001, to be prosecuted under:
The first question is whether Mr Kennedy's position was different after the Commencement. 54 On the assumptions that are asserted and indicated above, Mr Kennedy had incurred a duty or obligation under ss 709 and 710 of the Corporations Law. That duty or obligation constituted a pre-commencement liability within the meaning of s 1401(1) of the 2001 Corporations Act. By the operation of s 1401(2), the 2001 Corporations Act is taken to include ss 709 and 710 of the Corporations Law. By the operation of s 1401(3), Mr Kennedy incurred a liability equivalent to the pre-commencement liability under ss 709 and 710 of the Corporations Law as those provisions were taken to be included in the 2001 Corporations Act. He did so as if ss 709 and 710, as included in the 2001 Corporations Act, applied to his conduct or the circumstances that gave rise to the pre-commencement liability in 1994 and 1995. 55 Section 1311(1) of the 2001 Corporations Act relevantly provides that a person who does not do an act or thing that the person is required or directed to do by or under a provision of the 2001 Corporations Act or otherwise contravenes a provision of that Act is guilty of an offence. A failure by Mr Kennedy to comply with ss 709 and 710 of the Corporations Law would mean that he did not do an act or thing that he was required or directed to do by or under a provision of the 2001 Corporations Act. Accordingly, there would be a contravention of the 2001 Corporations Act. 56 Similar reasoning leads to the conclusion that there would be a contravention of s 1309 of the Corporations Law, as taken to be included in the 2001 Corporations Act, and also a contravention of s 64 of the ASC Law, as that provision is taken to be included in the 2001 ASIC Act. 57 Thus, Mr Kennedy's potential criminal liability under s 1311 of the Corporations Law became a substituted criminal liability under s 1311 of the 2001 Corporations Act, by the operation of s 1400 of the 2001 Corporations Act. Similarly, criminal liability under s 1309 of the Corporations Law became a substituted criminal liability under s 1309 of the 2001 Corporations Act, by the operation of s 1400. In relation to prospective criminal liability under s 64 of the ASC Law, that criminal liability became a substituted criminal liability under s 64 of the 2001 ASIC Act, by the operation of s 276 of the 2001 ASIC Act. 58 The position is not quite so clear in relation to s 35 of the Crimes Act. However, we accept the submission of ASIC, the DPP and the Attorney General that s 35 of Crimes Act, applied as a law of New South Wales by s 74(1) of the 1990 Corporations Act, has a corresponding provision in the "new ASIC legislation", that is, s 35 of the Crimes Act (which applies to an ASIC examination or hearing by reason of s 88(1) of the 2001 ASIC Act and, prior to that Act, by reason of s 88(1) of the 1989 ASIC Act). The reason for that conclusion is that s 35 of the Crimes Act, applied by s 74(1) of the 1990 Corporations Act, is part of the "old ASIC legislation" as defined in para (b)(iii) of the definition of that term in s 254(1) of the 2001 ASIC Act and s 35 of the Crimes Act is part of the "new ASIC legislation" as defined in para (c) of the definition of that term in s 254(1) of the 2001 ASIC Act, which incorporates the definition in para (b)(iii). By reason of ss 276 and 279 of the 2001 ASIC Act any contravention of s 35 is dealt with in the same way as a contravention of s 64 of the 1989 ASIC Act.
THE COMMISSION'S POWER TO INVESTIGATE 59 Division 1 of Part 3 of the 2001 ASIC Act is concerned with investigations. Section 13, which is in Division 1, relevantly provides that the Commission may make such investigation as it thinks expedient for the due administration of the Corporations Legislation, where it has reason to suspect that there may have been committed a contravention of the Corporations Legislation. Under s 5 of the 2001 ASIC Act, Corporations Legislation means the 2001 Corporations Act and the 2001 ASIC Act. 60 Division 2 of Part 3 of the 2001 ASIC Act deals with the examination of persons. Section 19 applies where the Commission, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1. Under s 19(2), the Commission may, by written notice to a person, require the person to give to the Commission all reasonable assistance in connection with the investigation and to appear before a specified member or staff member for examination on oath and to answer questions. Under s 19(3) the notice must state the general nature of the matter that the Commission is investigating or is to investigate. 61 Thus, the Commission's power to investigate is predicated on suspicion of contravention of the Corporations Legislation. The question is whether the Commission was authorised, as at 31 October 2003 and 10 November 2003, to investigate conduct by Mr Kennedy in 1995. The Corporations Legislation, of course, is Commonwealth legislation enacted in 2001, several years after the time when the conduct of Mr Kennedy that is in question occurred. Mr Kennedy contends that any potential liability that he might have had prior to the Commencement has been cancelled and that there is no longer anything that the Commission can investigate. He says that the transitional provisions are not effective to create something to which s 13(1) of the 2001 ASIC Act can respond.
MR KENNEDY'S CONTENTIONS AS TO RETROSPECTIVITY 62 Section s 276 of the 2001 ASIC Act (s 1400 of the 2001 Corporations Act) and s 7 of the Ancillary Provisions Act operate so that, if a criminal liability under s 276 (or s 1400) is activated, then the corresponding criminal liability under the equivalent ASC Law or Corporations Law provisions is cancelled. Mr Kennedy says that that has happened and that, if he had a pre-existing criminal liability, that liability arose, for example, under s 64(1) of the ASC Law (s 1309 of the Corporations Law). 63 On the Commencement, s 276(1) gave him an equivalent liability under s 64(1) of the 2001 ASIC Act as if that provision had applied to the conduct in question. Because he acquired such a liability by virtue of s 276(1), any liability under s 64(1) of the ASC Law was cancelled by s 7 of the Ancillary Provisions Act. The same contentions would be applied to the operation of s 1400 of the 2001 Corporations Act. 64 Mr Kennedy says that the federal liability generated by s 276 of the 2001 ASIC Act (s 1400 of the 2001 Corporations Act) can be described, within the meaning of s 13(1) of the 2001 ASIC Act, as a contravention of the 2001 ASIC Act (the 2001 Corporations Act) only if s 276 or s 277 of the 2001 ASIC Act (s 1400 or s 1401) has the effect of making, for example, s 64 of the 2001 ASIC Act (s 1309 of the 2001 Corporations Act) apply retrospectively to a time in 1995. He says that, if s 276 and s 277 (s 1400 and s 1401) do not have that effect, then it would be impossible to describe what has happened as a contravention of s 64 of the 2001 ASIC Act (s 1309 of the 2001 Corporations Act) because, ex hypothesi, s 64 of the 2001 ASIC Act (s 1309 of the 2001 Corporations Act) was not in force in 1995: something that is not in force at the time when conduct occurs cannot be contravened by that conduct. 65 Mr Kennedy contends that the question depends upon the meaning of the words 'as if' as used in s 276 and s 277 of the 2001 ASIC Act (ss 1400 and 1401 of the 2001 Corporations Act). Sometimes the words as if connote that the reader is to proceed on an hypothesis that is different from the actual fact. In other cases the reader is to proceed on the basis that a real state of affairs is connoted. Mr Kennedy contends that, if the words are given the former meaning, the effect of s 276 and s 277 (ss 1400 and 1401) would be retrospective. He says that there are several factors that indicate that those sections were not intended to have any retrospective effect. 66 Mr Kennedy points to the following factors: (a) Section 280(1) of the 2001 ASIC Act (s 1404(1) of the 2001 Corporations Act) provides that a reference in the new legislation to an event, circumstance or thing of a particular kind that happens or arises, or that has happened, or arisen, is taken to include a reference to an event, circumstance or thing of that kind that happened or arose at a time before the Commencement, unless a contrary intention is expressed. Section 280(2) (s 1404(2)) provides that nothing in s 280(1) (s 1404(1)) is taken to produce a result that a right or liability exists under a provision of the new legislation that relates solely to events, circumstances or things that occurred before the Commencement. Mr Kennedy says that that provision explicitly states that the 2001 ASIC Act (the 2001 Corporations Act) does not apply to events prior to the Commencement. (b) Division 4 of Part 16 (Part 10.1) deals with court proceedings that were started before the commencement. Division 4 contains transitional arrangements in respect of such proceedings. Mr Kennedy contends that such arrangements would be wholly unnecessary if the 2001 ASIC Act (the 2001 Corporations Act) simply applied retrospectively. (c) Section 255 of the 2001 ASIC Act (s 1372 of the 2001 Corporations Act) deals with certain invalid administrative action by a Commonwealth officer. Mr Kennedy contends that that provision is meaningless if the 2001 ASIC Act (the 2001 Corporations Act) applies retrospectively because no invalid administrative action of the kind contemplated could then exist. (d) Part 16 (Part 10.1) consists of over 30 sections. Mr Kennedy contends that if the effect of s 276 (s 1400) is to make the 2001 ASIC Act (the 2001 Corporations Act) retrospective, most of the provisions of Part 16 (Part 10.1) would be unnecessary and otiose. (e) The words 'as if' appear in several different places where the hypothesis cannot be true. (f) Criminal liability will not be created by retrospective legislation without words of clear intendment: in the present instance, the words 'as if' are ambiguous.
THE PROVISIONS ARE NOT RETROSPECTIVE 67 On their proper construction, the transitional provisions do not have the retrospective effect for which Mr Kennedy contends. On 14 July 2001, Mr Kennedy was liable to be prosecuted for a contravention of s 64 of the ASC Law (s 1309 of the Corporations Law) in the manner described above. Section 64 (s 1309) is a carried over provision under Part 16 of the 2001 ASIC Act (Part 10.1 of the 2001 Corporations Act). Accordingly, on 15 July 2001, Mr Kennedy's liability to be prosecuted under s 64 of the ASC Law (s 1309 of the Corporations Law) was transformed by s 276 of the 2001 ASIC Act (s 1400 of the 2001 Corporations Act) into a liability to be prosecuted under s 64 of the 2001 ASIC Act (s 1309 of the 2001 Corporations Act). 68 Putting it another way, on the assumption that Mr Kennedy gave false evidence, that would have had the legal consequence, as at 14 July 2001, that he was liable to be prosecuted under s 64 of the ASC Law. On the same assumption, by virtue of the operation of s 279 of the 2001 ASIC Act, on 15 July 2001 Mr Kennedy became liable to be prosecuted under s 64 of the 2001 ASIC Act because s 64 of the 2001 ASIC Act corresponds with s 64 of the ASC Law, which was a "carried over provision" for the purposes of s 279 of the 2001 ASIC Act. 69 That does not involve giving s 64 of the 2001 ASIC Act retrospective operation. The transitional provisions do not make the legislation operate retrospectively: rather, they create present liabilities by reference to historical facts, namely, the existing liability under the ASC Law. 70 It is true that the transitional provisions do not state explicitly that, where a liability to prosecution under the new legislation is created (as, for example, through s 1400 of the 2001 Corporations Act), there is, or there is taken to be, a contravention of that legislation. However, there could not be a liability to prosecution without a contravention. If Mr Kennedy became liable, after 14 July 2001, to be prosecuted under s 64 of the 2001 ASIC Act (s 1309 of the 2001 Corporations Act), it can only be because he committed, or is taken to have committed, an offence under that section. Since the offences under the old legislation have been abolished, and it is plainly intended that a person incurs an equivalent liability under the new legislation, it must follow that there are new offences under the new legislation. Such a construction is consistent with - and indeed may be seen to be compelled by - the admonition contained in the 2001 Corporations Act and the 2001 ASIC Act, that the transitional provisions are to be construed as giving an interpretation consistent with the object of providing for a smooth transition from the regime provided for in the old legislation to the regime provided for in the new legislation. 71 Section 281 of the 2001 ASIC Act (s 1405 of the 2001 Corporations Act) gives further support to that conclusion. Section 281 (s 1405) enables the reference to 'contravention of the ASIC Legislation' in s 13(1) of the 2001 ASIC Act to include a reference to contraventions of the previous legislation. It follows that the Commission is authorised to investigate the contraventions, even if any prosecution would now be in respect of the substituted liabilities under the new legislation, whether it be the 2001 Corporations Act or the 2001 ASIC Act.
CONSTITUTIONAL VALIDITY 72 Mr Kennedy contends that if the provisions operate to apply the 2001 legislation retrospectively to a time prior to the Commencement they are invalid as being beyond the head of power conferred by the operation of s 51(xxxvii) of the Constitution. Mr Kennedy contends that the NSW Referral Act did not refer to the Parliament of the Commonwealth a matter of such a character as to confer the legislative power to enact the 2001 Corporations Act and the 2001 ASIC Act so as to have effect at a time prior to the Commencement. 73 Mr Kennedy contends that s 4(4)(a) of the NSW Referral Act, together with the terms of s 4(1), make it clear that the 2001 Corporations Act can have its operation altered only after the Commencement. He says that, if the 2001 Corporations Act were retrospective to a time prior to the Commencement, the effect of those provisions would be that that retrospective operation could never be amended. He says that that result was clearly not intended. Therefore, he says, the NSW Referral Act did not refer to the Commonwealth Parliament the power to make the 2001 ASIC Act and the 2001 Corporations Act have effect at a time prior to the Commencement. 74 Formulation of the propositions in that way serves to demonstrate the fallacy in Mr Kennedy's contention that the operation of the 2001 Corporations Act or the 2001 ASIC Act is retrospective. Neither has the effect of making an offence conduct that, when it occurred, was not an offence. There is nothing in s 4 of the NSW Referral Act that restricts the power of the Commonwealth to enact the transitional provisions of Part 10.1 of the 2001 Corporations Act and Part 16 of the 2001 ASIC Act. Section 4(5) of the NSW Referral Act deals with the period in which the Commonwealth Parliament may legislate. It does not deal with the period for which it may legislate. 75 Similarly, s 4(4) of the NSW Referral Act imposes no limit on the ability of the Commonwealth Parliament to legislate retrospectively pursuant to the reference. That provision makes clear that the Commonwealth Parliament can amend the new legislation, within its own sphere of legislative competence, without reliance on the express reference of power to amend that is conferred by s 4(1)(b) of the NSW Referral Act. In any event, even if the new legislation does operate retrospectively in some relevant respect, it would not be outside the scope of the matter referred, because the tabled text, which is part of that matter, included the very transitional provisions that are challenged by Mr Kennedy.
Decisions of other appellate courts 76 The parties made only passing reference to two decisions in other jurisdictions to which it is important that we now turn. The two decisions were the decision of the Court of Appeal of Queensland in R v Corbett [2004] 1 Qd R 146 ("Corbett") and the interlocutory decision of Grove J in R v Frawley (70070/03 on 9 September 2004) in a prosecution for insider trading allegedly committed in 1998 and prosecuted under the new 2001 Corporations legislation. Since the hearing before us the New South Wales Court of Criminal Appeal refused leave to appeal from the interlocutory decision of Grove J: see R v Frawley [2005] NSWCCA 66 ("Frawley"). In Frawley, which is directly in point on some of the issues raised by Mr Kennedy in the present case, Spigelman CJ, with whom Mason P and Santow JA agreed, rejected the contention that the use of the words "as if" in s 1400(2) of the 2001 Corporations Act created ambiguity. The Chief Justice observed at [16]: "Section 1400(2) has the effect of creating criminal liability as and from the commencement of the Corporations Act. The offence is created by s1311(1)(a) of the Commonwealth Act by reference to the then s1002G(1) of the same Act. The extent of the offence so created is "equivalent to" the criminal liability previously created under the State Corporations Law. That a Commonwealth law may validly operate in this manner was established in Regina v Humby; Ex parte Rooney (1973) 129 CLR 231. The same approach was applied to State legislation in Re Macks; Ex parte Saint (2000) 204 CLR 158, being legislation to validate decisions of the Federal Court and the Family Court in the exercise of the cross-vesting legislation that was struck down in Re Wakim; Ex party McNally (1999) 198 CLR 511." 77 Having discussed Re Macks: Ex parte Saint Spigelman CJ concluded: "Section 1400(2) operates in the same way. It creates a criminal liability under Commonwealth law, relevantly s1002G and s1311(1)(a) of the Commonwealth Act, (referred to in s1400(2) as the 'substituted right or liability'). It does so by reference to the liability existing under the pre-exiting State law (referred to as the 'pre-commencement right or liability' in s1400(1) and (2)). The pre-existing liability is 'used as an historical fact only', to use McHugh J's formulation in Macks. Section 1400(2) creates a liability for an offence against the law of the Commonwealth, relevantly the offence created by s1311(1)(a)." 78 Subject to a qualification not presently material, Spigelman CJ agreed with the analysis of the operation of s 1401 by the Court of Appeal in Corbett. He considered the analysis equally applicable to s 1400. In Corbett Davies JA, with whom Williams JA and Jerrard JA agreed, observed that neither the referral nor s 1401 operated upon past conduct by making past conduct unlawful; rather, they operated upon existing liabilities for that conduct: see at [24]-[26]. 79 Spigelman CJ rejected the contention that s 1400 was outside the scope of the matter referred to the Commonwealth Parliament on the ground that it operated upon events that occurred prior to the commencement. He drew the same distinction that we have drawn between the period in which the Commonwealth Parliament may legislate in respect of the referred matter and the period for whichit may legislate. 80 As will be apparent, the analysis in the Courts of Appeal in New South Wales and Queensland is consistent with our own. 81 The way in which the case was conducted before us, the different circumstances under which Corbett arose, and the fact that at the time of the hearing before us Frawley had not been considered on appeal, made it desirable that we consider for ourselves the issues raised by Mr Kennedy rather than consider simply applying, to the extent applicable, the principles emerging from Frawley and Corbett. We should, however, note that the importance of uniformity in the interpretation of national legislation, such as the Corporations Act, was emphasised by the High Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, a case arising under the old legislation. In that case Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ said (at 492): "…[U]niformity of decision in the interpretation of uniform national legislation such as the Law is a sufficiently important consideration to require that an intermediate appellate court - and all the more so a single judge - should not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong" See also Trans Pacific Investment Corporation Pty Ltd v Rusty Rees Pty Ltd & Ors (1995) 57 FCR 210 at 214 per Black CJ, Davies and Beaumont JJ.
IRREGULARITY OF THE SPECIFIC DOCUMENTATION 82 Mr Kennedy also raises questions as to the manner and form of the decision making process in the present case. His complaints relate to the file notes made by Mr Riordan, to the Notice and to the requests made to Switzerland.
FAILURE TO COMPLY WITH THE MUTUAL ASSISTANCE ACT AND THE SWISS TREATY 83 As indicated above, the Mutual Assistance Regulations provide that the Mutual Assistance Act applies to Switzerland subject to such limitations, conditions, exceptions or qualifications as are necessary to give effect to the Swiss Treaty. The Swiss Treaty relevantly imposes two conditions. 84 First, under Article 1 of the Swiss Treaty, the Contracting Parties are to grant to each other assistance in investigations or proceedings in respect of 'offences the punishment of which falls or would fall within the jurisdiction of the judicial authorities of the requesting state'. Thus, it must be shown that there is an investigation or proceeding in respect of offences by Mr Kennedy, the punishment of which falls or would fall within the jurisdiction of the judicial authorities of Australia. Secondly, Article 7(1)(b) of the Swiss Treaty relevantly provides that requests for assistance must include 'a description of the essential acts or omissions alleged or sought to be ascertained, including the text, or a statement, of the law applicable at the place where the offence was committed'. 85 The Second Request is expressed to be a supplementary request and Mr Kennedy advanced no separate contentions in relation to the Second Request. It is therefore unnecessary to say anything about the Second Request specifically. 86 The First Request is divided into sections under headings as follows: REQUEST OF ASSISTANCE IN A CRIMINAL MATTER AUTHORITY ON WHOSE BEHALF THE REQUEST IS MADE PURPOSE OF THE REQUEST ALLEGED FACTS SUSPECTED OFFENCES DETAILS OF SUSPECTED OFFENDERS NATURE OF ASSISTANCE SOUGHT PARTICULAR PROCEDURES TO BE FOLLOWED LIAISON WITH AUSTRALIAN LAW ENFORCEMENT AUTHORITIES LIAISON WITH THE AUSTRALIAN CENTRAL AUTHORITY LIAISON WITH SWISS AUTHORITIES CONFIDENTIALITY POSSIBLE SUPPLEMENTARY REQUEST
Mr Kennedy's complaints relate to the material under the heading 'SUSPECTED OFFENCES'. 87 The First Request states its purpose in the following terms: '3. The purpose of this request is to obtain material for the purposes of an investigation being conducted into the activities of two people in Australia. 4. This request asks for copies of two transcripts of hearings which Australian authorities believe were conducted in Switzerland… 5. This request also asks for a general search to be conducted for bank records in Switzerland. It also asks for bank records from a particular account. The bank documents from the particular account are asked for in a form which is admissible in Australian courts. 6. The purpose of this request is not to obtain material to assess or collect tax.' 88 The material under the heading 'ALLEGED FACTS' refers to the Commission's investigation commenced in April 1995 into the ownership of shares in Offset and the examinations of Messrs Rivkin and Kennedy on 6 June 1995 and 6 September 1995 and on 18 May 1995 respectively. The effect of evidence given by Messrs Rivkin and Kennedy at those examinations is summarised under that heading. 89 Under the heading 'SUSPECTED OFFENCES' the following appears: '40. Section 19 of the ASC Law enables ASSC (or ASIC) to compulsorily require a person to appear for examination where ASC believes the person can give information relevant to an investigation. 41. Under section 21 of the ASC Law, the examinee is required to take an oath or affirmation as to the truth of their answers given to questions put to them in the interview. Under section 64 of that Act, it is an offence to give a false or misleading statement in the course of examination. The maximum penalty for an offence against section 64 is a fine of A$10,000 or imprisonment for 2 years, or both. 42. Australian authorities suspect that Rivkin and Kennedy made false or misleading statements in the course of the examination about the ownership of shares held by EBC and Leumi in OAP. 43. It is also an offence under section 35 of the Crimes Act 1914 (Commonwealth of Australia) to intentionally give false testimony. Section 35 covers testimony which is given in the course of a section 19 examination. The maximum penalty for an offence against section 35 of the Crimes Act 1914 is five years imprisonment. 44. Australian authorities suspect that Rivkin and Kennedy may have committed offences against section 35 of the Crimes Act 1914 by giving false testimony in the course of a section 19 examination about their shareholdings of OAP shares. 45. The Corporations Act 2001 (Commonwealth of Australia) (the Corporations Act) replaced the Corporations Law on 15 July 2001. However, the effect of sections 1400 and 1401 of that Act is that if a person is liable to be prosecuted for offences committed before the commencement of that Act (under the previous Corporations Law), then that person can be charged under the Corporations Act 2001. 46. Under section 709 of the Corporations Law, a person who is a substantial shareholder of shares in a company must give notice to the company of the shareholding. Under section 710 of the Corporations Law, where a change occurs in the type of shareholdings held by a substantial shareholder, the shareholder must give notice to the company. 47. Under section 1311 of the Corporations Act, failing to give notice as required by section 709 or 710 of the Corporations Law is an offence. The maximum penalty for an offence against section 709 or 710 is A$500. 48. Australian authorities suspect that both Rivkin and Kennedy failed to lodge substantial shareholder notices which disclosed their entitlements to the OAP shares held by either or both Leumi and EBC. 49. Extracts from the legislation are at Attachment C.' It was not suggested that the extracts from the legislation in Attachment C are inaccurate or incorrect. 90 In essence, paragraphs 40 to 49 describe suspected offences as follows:
Mr Kennedy asserts that the First Request fails to state any offence the punishment of which falls, or would fall, within the jurisdiction of the judicial authorities of Australia. Accordingly, he says, the condition imposed by Article 1 of the Swiss Treaty was not satisfied. The complaint concerning non-compliance with Article 1 is based on the contention that the transitional provisions are defective. That complaint is answered by the conclusions reached above. 91 Mr Kennedy's complaint concerning Article 7(1)(b) is that paragraphs 40 to 49 of the First Request do not contain an adequate description of the text, or a statement, of the law applicable in New South Wales where the suspected offences were committed. The references to statutes in those paragraphs are references to Commonwealth statutes and the paragraphs do not set out the way in which Commonwealth laws were made applicable in New South Wales by the 1990 Corporations Act. 92 The term 'ASC Law' was defined in paragraph 10 of the First Request as the 1989 ASIC Act. In fact, the examination of Messrs Rivkin and Kennedy in 1995 was pursuant to the ASC Law and not the 1989 ASIC Act. The 1989 ASIC Act simply had no application to an examination in New South Wales. Of course, the terms of s 64 of the 1989 ASIC Act were identical to the terms of s 64 of the ASC Law. That is because the 1989 ASIC Act was applied as a law of New South Wales by the operation of the 1990 Corporations Act. 93 A similar complaint is made in respect to the reference to s 1311 of the 2001 Corporations Act. That is to say, s 1311 of the 2001 Corporations Act did not make a breach of ss 709 or 710 of the Corporations Law an offence. Rather, it was s 1311 of the Corporations Law that made such non-compliance an offence. 94 When considering compliance with a treaty, the Court should look to substance rather than form: Harris v Attorney-General of the Commonwealth (1994) 52 FCR 386 at 401. Under the Vienna Convention on the Law of Treaties, to which Australia is a signatory ([1974] ATS 2), the terms of a treaty are to be interpreted in their context and in the light of the object and purpose of the treaty. Such an approach requires an analysis of the Swiss Treaty in order to determine its object and purpose and then consideration of the context in which Article 7 is found. 95 Article 1 of the Swiss Treaty states that the Contracting Parties are to grant each other assistance in investigations or proceedings in respect of offences. Clause 2 of Article 1 specifies the kind of assistance that may be granted. Under clause 3, assistance is not to include extradition enforcement or execution of final criminal judgments. 96 Article 2 provides that assistance may be refused in certain circumstances as follows:
MR RIORDAN'S FILE NOTES 100 Mr Kennedy contends that there are several difficulties with the First Investigation Decision and the Second Investigation Decision that arise on the face of the file notes that recorded those decisions. 101 The investigation contemplated by the file note of 31 October 2003 was narrower than that contemplated by the file note of 10 November 2003. The file note of 31 October 2003 refers only to s 64(1)'of the ASC Law/ASIC Act' and records that Mr Riordan had reason to suspect that there may have been contraventions of that provision in relation to the information given, and the statements made, by Mr Rivkin during his examination of 6 June 1995 and 6 September 1995. Mr Kennedy's complaints in relation to the First Investigation Decision therefore stand or fall with his complaints in relation to the Second Investigation Decision. 102 Mr Riordan's file note in relation to the Second Investigation decision recorded that Mr Riordan had reason to suspect that there may have been contraventions of 'section 64(1) of the ASC Law/ASIC Act' as well as the three other provisions to which reference has been made. It is common ground that, despite the language of the 10 November 2003 file note, the examination of Mr Kennedy on 18 May 1995 was pursuant to s 19 of the ASC Law. The ASC Law was relevantly the 1989 ASIC Act, as applied in New South Wales by the 1990 Corporations Act. Thus, it is clear that the examination was conducted pursuant to a law of New South Wales. 103 Mr Kennedy contends that Mr Riordan failed to identify properly, in his file note of 31 October 2003, the relevant statutory provisions. He says that the file note exhibits a misapprehension, namely, that the Commission was exercising power under the 1989 ASIC Act rather than power under the ASC Law. That is to say, the references to the provisions contravened are to provisions of laws of New South Wales, which do not satisfy the description 'the corporations legislation' as that term is used in s 13(1) of the 2001 ASIC Act: in s 13, corporations legislation means the 2001 ASIC Act and the 2001 Corporations Act. 104 A decision to investigate under s 13 of the 2001 ASIC Act does not need to be recorded in writing. If a written record of the decision to investigate is made, it ought not necessarily be treated as a formal statement of reasons (see Little River Goldfields NL v Moulds (1991) 32 FCR 456 at 462 and 464). Even if an officer were under a misapprehension as to the source of his statutory power, that misapprehension would not of itself invalidate the exercise of the power: misdescription of the statutory provision by reference to which a power is exercised would not of itself invalidate the exercise of the power: see Johns v Australian Securities Commission (1993) 178 CLR 408 at 426. 105 Thus, if Mr Riordan bona fide believed that the conduct of Mr Kennedy that he wished to investigate was capable of constituting a contravention of the Corporations Legislation, as defined, and that conduct was in law capable of constituting a contravention of the Corporations Legislation, it would be immaterial that he may, at some time, have misapprehended or misdescribed the provision of the Corporations Legislation that was contravened. Mr Riordan's errors in the file note do not indicate that he did not have a bona fide belief that there may have been contraventions of provisions of the Corporations Legislation, as that term is defined. 106 Certainly, it is apparent that Mr Riordan did not spell out how it was that he suspected that there were contraventions of the corporations legislation, in the way that has been summarised above. It may be that Mr Riordan had an imperfect understanding of the somewhat arcane way in which the transitional provisions operate to transform a liability under the former State law into a liability under the new federal corporations legislation. His file note clearly does not state fully the way in which Mr Kennedy is liable to prosecution under the corporations legislation by reason of conduct in contravention of State legislation that occurred in 1995. It should be noted, however, that both file notes conclude with the statement: 'I am also of the view that it is expedient for the due administration of the corporations Act 2001 and the ASIC Act [2001] that ASIC investigate the matters set out above' The statements disclose, implicitly if not explicitly, that Mr Riordan was of the view, which we have found to be correct, that the due administration of the 2001 Corporations Act and the 2001 ASIC Act enabled the investigation and prosecution of the contraventions referred to in the file notes. 107 Accepting that Mr Riordan may have had an imperfect understanding of the operation of the transitional provisions, it does not follow that Mr Kennedy has established that s 13 of the 2001 ASIC has not been activated such that a notice pursuant to s 19 of the 2001 ASIC Act in relation to such an investigation could not validly be given. Plainly, an incomplete record of a decision cannot invalidate a decision that was validly made. Mr Kennedy has not established that there was no power to investigate or that the decision to investigate was not validly made. 108 An additional issue arose in respect of s 35 of the Crimes Act. As explained in [58] above a pre-2001 contravention of s 35 of the Crimes Act was transformed into a contravention of the new federal corporations legislation by reason of the definitions in s 254(1) of the 2001 ASIC Act of "old ASIC legislation" and "new ASIC legislation" and s 276 of that Act. However, the definition of "old ASIC legislation" was amended by the Financial Sector Legislation Amendment Act No 1 of 2001 (Cth), which was assented to on from 27 November 2003 but operated retrospectively from immediately after the commencement of the 2001 ASIC Act on 15 July 2001, to ensure that both definitions included the Crimes Act. The Second Investigation Decision, (which relied, inter alia, on a suspected contravention of s 35 of the Crimes Act) was made on 19 November 2003. The s 19 notice, which also pre-dated the amendment, did not refer to s 35 of the Crimes Act. We have concluded, however, that nothing turns on the point, as, by the time Mr Kennedy was examined (1 and 2 December 2003) and the First and Second Requests were made (22 January 2004 and 2 April 2004), a pre-2001 contravention of s 35 of the Crimes Act applied as a law of New South Wales, was an offence under the new federal corporations legislation and ASIC's suspicion in relation to it remained operative. Thus, as from the date of the amending Act, ASIC's investigation under the 2001 ASIC Act in relation to a suspected contravention of s 35 of the Crimes Act satisfied the requirements of s 13(1) of the 2001 ASIC Act and was valid and lawful. 109 As we have concluded that ASIC's investigation into the matter set out in the notice given to Mr Kennedy pursuant to s 19 of the 2001 ASIC Act was a valid and lawful investigation, the only remaining issue is whether the notice complied with s 19(3) of the 2001 ASIC Act which requires the notice to state "the general nature of the matter" ASIC is investigating. The "matter" referred to in s 19(3) is the matter the subject of the s 13 investigation, which is whether the contravention of the kind to which the section is directed may have been committed: see Australian Securities Commission v Graco (1991) 29 FCR 491 ("Graco") at 497-8 per Jenkinson J; Johns v Connor (1992) 35 FCR 1 ("Johns v Connor") at 11-13 per Lockhart J; Johns v Australian Securities Commission (1992) 35 FCR 146 ("Johns v ASC") at 166-8 per Black CJ and von Doussa J. 110 The requirement that a s 19 notice describe the "general nature" of the matter ASIC is investigating "invites both comprehensiveness and brevity in description of the matter, and gives no encouragement to definitional particularity": see Graco at 495 and Johns v Connor at 13. In Johns v ASC at 167-168 Black CJ and von Doussa J, drawing upon the analogous situation of a notice under s 155(1) of the Trade Practices Act 1974 (Cth), suggested that in identifying the matter that is being investigated the notice must identify the matter in such a way that the recipient can "perceive the general ambit of the subject matter of the investigation that is being undertaken". Black CJ and von Doussa J also observed (at 168) that a proper description of "the matter" will usually include a reference to the specific law suspected of being contravened. 111 The s 19 notice given to Mr Kennedy plainly enables the recipient to perceive the general ambit of the subject matter of the investigation that is being undertaken. However, Mr Kennedy relies on the failure of the notice to describe the transitional provisions that operate to transform the liability under the previous laws described in the notice into a liability under the new federal corporations legislation. In fact, the notice purported to do so in respect of the possible contraventions of s 709 of the Corporations Law, but mistakenly referred to s 1400 instead of s 1401 of the 2001 Corporations Act as the transforming provision. 112 In our view the omissions complained of do not have the consequence that the notice fails to state the general nature of the matter being investigated. The notice accurately describes the general nature of that matter being investigated, including the specific pre-2001 provisions that were suspected of having been contravened. It's failure to state the legal basis upon which those pre-2001 contraventions were transformed into contraventions under the new federal corporations legislation is an omission relating to the legal nature of the matter being investigated, and is not such as to result in the general nature of that matter not being sufficiently described. Accordingly, Mr Kennedy's challenge to the s 19 notice also fails.
CONCLUSION 113 Mr Kennedy has failed to establish any invalidity in relation to the First Investigation Decision or the Second Investigation Decision. Nor has he established that the Notice is invalid or that the First Request or the Second Request was beyond power. There is no reason why the Commission and the DPP should not continue to investigate the matters that are currently being investigated. The application should be dismissed with costs. I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justices Merkel and Emmett.
Counsel for the Applicant: Mr P M Wood and Mr N Perram
Solicitor for the Applicant: Arnold Bloch Leibler
Counsel for the First Respondent: Mr S Gageler SC and Mr M Pearce
Solicitor for the First Respondent: Australian Securities and Investments Commission
Counsel for the Second and Third Respondents: Mr D M J Bennett QC (Solicitor-General), Mr G H Livermore and Mr G A Hill
Solicitor for the Second Respondent: Director of Public Prosecutions for the Commonwealth of Australia
Solicitor for the Third Respondent: Australian Government Solicitor
Date of Hearing: 8 and 20 December 2004
Date of Judgment: 10 March 2005
SCHEDULE 1 SECTION 13(1) AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION ACT 2001 ("ASIC ACT") FILE NOTE
ASCTEC Number 03-20144 Subject: Decision to extend section 13(1) ASIC Act investigation commenced on 31 October 2003. Date: 10 November 2003. Review: I have reviewed the following additional material: (i) transcripts of the examinations, pursuant to s19(2) of the ASC Law, of Trevor Kennedy ("Kennedy") (18 May 1995) and Rene Rivkin ("Rivkin") (6 September 1995) relating to the investigation being conducted by the Australian Securities Commission into trading in the shares of Offset Alpine Printing Group Limited ("Offset") and into the beneficial ownership of certain of those shares held by Bank Leumi Le-Israel and EBC Zurich AG: (ii) DELETED FOR CONFIDENTIALITY (iii) the documents provided to ASIC by the Australian Financial Review; (iv) the telephone interview on 4 November 2003 with Peter Hunig, an examining magistrate in the Chief Examining Magistrate's Office in Zurich; (v) Offset's announcements to ASC on 4, 5 and 11 May 1995. Determination: As a result of my review, I have reason to suspect that there may have been contraventions of: (i) sections 709 and 710 of the Corporations Law, in relation to the suspected failure of Rivkin, Kennedy and Graham Richardson to comply with the disclosure requirements of the substantial shareholder provisions of the Corporations Law between 1 January 1991 and 31 December 1995; (ii) section 64(1) of the ASC Law / ASIC Act ("false information"), in relation to the information given, and the statements made, by Rivkin and Kennedy during their respective examinations. (iii) section 35 of the Crimes Act 1914 ("false testimony") in relation to the testimony of Rivkin and Kennedy during their respective examinations; and (iv) section 1309 of the Corporations Law ("false information"), in relation to statements made by the Board of Offset on 4 May 1995 (and clarified on 11 May 1995). I am also of the view that it is expedient for the due administration of the Corporations Act 2001 and the ASIC Act that ASIC investigate the matters set out above.
………………………………………………………. Peter Riordan, a delegate of the Australian Securities and Investments Commission
FORM 1 Regulation 4 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION REGULATIONS 2001 Australian Securities and Investments Commission NOTICE REQUIRING APPEARANCE AT AN EXAMINATION OR REASONABLE ASSISTANCE IN CONNECTION WITH AN INVESTIGATION
To: Trevor John Kennedy 15 Elamang Avenue KIRRIBILLI NSW 2061 In relation to an investigation concerning suspected contraventions of: (i) section 64(1) of the Australian Securities Commission Act 1989 ("the ASC Act"), as taken to be included in the Australian Securities and Investments Commission Act 2001 ("the ASIC Act") by s.276 of that Act, in relation to statements made, and information given, during examinations conducted on 18 May, 6 June and 6 September 1995 concerning the beneficial ownership of Offset Alpine Printing Group Limited ("OAP") shares held by two Swiss entities, Bank Leumi Le-Israel and EBC Zurich AG ("the Swiss Parcels"). The Swiss Parcels were the subject of an application by the then Australian Securities Commission ("ASC") to the Federal Court of Australia on or about 4 May 1995. The examinations were conducted by the ASC in the course of an investigation into possible contraventions of section 709 of the Corporations Law ("CL"), as taken to be included in the Corporations Act 2001 by s.1400 of that Act, and ongoing contraventions of sections 605 and 710 CL in relation to OAP between 16 November 1988 and 5 June 1995; (ii) section 1309 CL, in relation to statements made by the Board of Directors of OAP to Australian Stock exchange Limited on 4 and 11 May 1995 concerning the Swiss Parcels; and (iii) sections 709 and s.710 CL, in relation to the failure, between 1 January 1991 and 31 December 1995, of the beneficial owners of the Swiss Parcels to give to OAP such substantial shareholder notice(s) as were required by the CL, you are hereby notified that, under subsection 19(2) of the ASIC Act, you are required: (a) to appear at 10:00am on Thursday, 20 November 2003 at Level 18, 1 Martin Place, Sydney in the State of New South Wales, before Peter Riordan and Robert Ghali for examination on oath or affirmation and to answer questions put to you in relation to the investigation; and (b) to give the Australian Securities and Investments Commission all reasonable assistance in connection with the investigation. Please note the provisions of subsection 23(1) of the ASIC Act (relating to legal representation) and section 68 of the ASIC Act (relating to self-incrimination). The effect of those provisions is set out at the end of this form.
Peter Riordan Robert Ghali Signatures of persons authorised by the Commission to conduct the examination.
Kennedy
Australian Securities & Investments Commission & Ors
(1993) 177 CLR 485
(1995) 57 FCR 210
(1994) 52 FCR 386
(1991) 32 FCR 456
(1993) 178 CLR 408
(1991) 29 FCR 491
(1992) 35 FCR 1
(1992) 35 FCR 146
(1999) 198 CLR 511
(1973) 129 CLR 231
(2000) 204 CLR 158