Kingham v Cole

Jurisdiction 7 The Commonwealth objected to the jurisdiction of this Court to try the application under the AD(JR) Act on the grounds that the decision of the Commissioner to issue the Practice Note was not a decision which was final or operative or determinative nor was it given force or effect by an enactment. It was also said that the conduct of the Commissioner in issuing the Practice Note was not conduct for the purpose of making a decision to which the AD(JR) Act applied. Reference was made to the decision of a Full Court of this Court in Geographical Indications Committee v O'Connor (2000) 32 AAR 169 at [20]. However the Commonwealth accepted that the essential relief sought by the applicants could be granted under s 39B of the Judiciary Act. Accordingly no argument was addressed on the objection as to competency. The appropriate order will be to dismiss that objection without any determination as to its merits.

The Royal Commissions Act 8 Section 1A of the Act authorises the Governor-General by Letters Patent to issue commissions to persons requiring or authorising them to make enquiry into and report on any matter specified in the Letters Patent and which relates to or is connected with the peace, order and good government of the Commonwealth or any public purpose or any power of the Commonwealth. 9 Section 2 empowers a member of a Commission to summon persons to give evidence or to produce documents and to take evidence on oath or affirmation. Section 3 prescribes penalties for failure to attend or produce documents. Section 4 authorises the issue of search warrants upon application to a judge of a prescribed court. Section 6 prescribes penalties for persons refusing to be sworn or give evidence. Section 6A limits the operation of the privilege against self-incrimination. In effect the privilege can only be relied on in respect of answering questions or producing documents or things if proceedings for an offence or recovery of a penalty have been commenced and not finally dealt with. Various other provisions deal with the giving of evidence before a Commission. For present purposes reference need only be made to s 6FA which provides: "Any legal practitioner appointed by the Attorney-General to assist a Commission, any person authorized by a Commission to appear before it, or any legal practitioner authorized by a Commission to appear before it for the purpose of representing any person, may, so far as the Commission thinks proper, examine or cross-examine any witness on any matter which the Commission deems relevant to the inquiry, and any witness so examined or cross-examined shall have the same protection and be subject to the same liabilities as if examined by any of the Commissioners, or by the sole Commissioner, as the case may be."

The applicants' case 10 Senior counsel for the applicant attacked the validity of par 12 of the Practice Note on two grounds. First it was put that at common law Royal Commissions have no coercive powers: McGuinness v Attorney-General for Victoria (1940) 63 CLR 73 at 98-99, Herald & Weekly Times Limited v Woodward [1995] 1 VR 156 at 159. Any coercive powers must be found in the relevant statute under which the Royal Commission is established. Nothing in the Act compels the provision of a witness statement or its adoption in the witness box as prescribed in the Practice Note. It is impermissible to require, as a condition precedent to the exercise of the right to cross-examine, the performance of an obligation which is beyond the power of the Commissioner to impose. Paragraph 12 of the Practice Note is an attempt by the Commissioner to do indirectly what he cannot do directly: Wragg v New South Wales (1953) 88 CLR 353 at 387-8, Caltex Oil (Australia) Pty Ltd v Best (1990) 170 CLR 516 at 522. Further, it was said that the Commissioner did not have an unfettered discretion to grant or refuse leave to cross-examine. Secondly, it was put that the rules of natural justice may in some circumstances include the right to cross-examine a witness giving evidence adverse to a person affected. Paragraph 12 of the Practice Note was in absolute terms and applicable to all cross-examination, including cross-examination which was an exercise of rights conferred by the rules of natural justice.

Want of power 11 It is beyond doubt that a Royal Commissioner does not have any coercive powers apart from those conferred by statute. However, par 12 is not coercive. It does not compel a person to do anything. The first case cited by senior counsel for the applicants dealt with the prohibition against interference with interstate trade contained in s 92 of the Constitution. The second dealt with a statutory prohibition against contracting out of the statute in question (the Petroleum Retail Marketing Franchise Act 1980 (Cth)). Such prohibitions cannot be avoided by indirect means. However, the present case is concerned not with prohibition but with power. To continue the constitutional analogy, the Commonwealth may make a grant to the States under s 96 conditional on the States performing acts of a kind which the Commonwealth does not have legislative power to require: Victoria v Commonwealth (1926) 38 CLR 399, Pye v Renshaw (1951) 84 CLR 58. 12 Of course, if in the exercise of his discretion under s 6FA the Commissioner imposed a condition that had no reasonable connection with his function under the Act or the Letters Patent, that would not be a valid exercise of power. To take an extreme example, a direction that leave to cross-examine would not be granted unless an applicant made a donation to a political party would be plainly invalid. But par 12 on its face seems rationally and reasonably related to the efficient performance of the obligations of the Commissioner. Paragraph 12 is a means of ascertaining whether or not an applicant has demonstrated a sufficient interest in challenging the evidence of a particular witness. Further, a statement under par 12 will alert the Commissioner and all others concerned as to the true extent of factual disputes and thus promote the efficient resolution of those disputes. In a large and complex administrative enquiry where there is no equivalent to the pleadings and particulars used in civil litigation, the par 12 procedure has an obvious utility. 13 While it may be accepted that s 6FA does not confer an unfettered discretion, par 12 does not involve exercising the discretion in an unfettered way. On the contrary, par 12 will assist in the exercise of the discretion in a way that is both orderly and predictable and likely to assist in the efficient discharge of the Commissioner's task. 14 I should add that a question of the construction of par 12 was debated. Senior counsel for the applicants put his argument on the assumption that persons seeking permission to cross-examine not only had to provide a signed statement of evidence but would be examined by Counsel Assisting before any evidence was taken from the witness sought to be cross-examined. I do not agree with that construction. The second sentence of par 12 merely alerts persons concerned to the fact that they are liable to be cross-examined upon their statements. This need not necessarily occur before such a person cross-examines the witness in question.

Natural Justice 15 It was accepted that the Commissioner is bound by the rules of natural justice: Mahon v Air New Zealand [1984] AC 808 at 820-821, Annetts v McCann (1990) 170 CLR 596 at 598, Ainsworth v Criminal Justice Commission (1992) 175 CLR 564. In Mahon, in a passage relied upon by senior counsel for the applicants, the Privy Council said: "The rules of natural justice that are germane to this appeal can, in their Lordships' view, be reduced to those two that were referred to by the Court of Appeal of England in Reg. v. Deputy Industrial Injuries Commissioner, Ex parte Moore [1965] 1 Q.B. 456, 488, 490, which was dealing with the exercise of an investigative jurisdiction, though one of a different kind from that which was being undertaken by the judge inquiring into the Mt. Erebus disaster. The first rule is that the person making a finding in the exercise of such a jurisdiction must base his decision upon evidence that has some probative value in the sense described below. The second rule is that he must listen fairly to any relevant evidence conflicting with the finding and any rational argument against the finding that a person represented at the inquiry, whose interests (including in that term career or reputation) may be adversely affected by it, may wish to place before him or would have so wished if he had been aware of the risk of the finding being made. The technical rules of evidence applicable to civil or criminal litigation form no part of the rules of natural justice. What is required by the first rule is that the decision to make the finding must be based upon some material that tends logically to show the existence of facts consistent with the finding and that the reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory. The second rule requires that any person represented at the inquiry who will be adversely affected by the decision to make the finding should not be left in the dark as to the risk of the finding being made and thus deprived of any opportunity to adduce additional material of probative value which, had it been placed before the decision-maker, might have deterred him from making the finding even though it cannot be predicted that it would inevitably have had that result." (Emphasis in original) 16 The critical issue is just what the rules of natural justice require in the particular setting of the present case. Senior counsel for the applicants did not contend that cross-examination, let alone an unrestricted right to cross-examine, was always a component of the rules of natural justice. Rather, he said that cross-examination may in some circumstances be comprehended by the rules of natural justice and where that is the case it is unfair to take away or restrict that right. 17 Of course, s 6FA makes express provision for cross-examination in terms which plainly contemplate some limitations being imposed ("may, so far as the Commission thinks proper"). One way of looking at the issue is to ask whether the rules of natural justice, as applicable in the present case, prevent the Commissioner from exercising the s 6FA discretion in the way he has. 18 First it is necessary to say something about an aspect of the applicants' argument which stressed what was said to be the inflexible and absolute nature of the restriction imposed by par 12. But it is of the essence of a Practice Note that it may be revoked or varied from time to time in the light of the changing nature of the proceedings or unexpected eventualities. On 10 December 2001 the Commissioner issued his first Practice Note which included the following: "19. The Commission reserves the right at any time to vary the above practices." 19 It is true that Practice Note No 2 of 19 December 2001 contains no equivalent statement, but there can be no doubt that if the Commissioner were to issue subsequent Practice Notes varying or revoking anything in Practice Notes 1 or 2 that in itself would be valid. More fundamentally, a Practice Note of the kind under consideration does not purport to create legally binding rights and obligations. It is obviously useful for the guidance of all concerned to have an indication of what procedures are likely to be adopted. But even without formal amendment or revocation the Commissioner would always be able to deal with a situation where fairness and efficiency suggested a different procedure from that laid down in a Practice Note. 20 Senior counsel for the applicants was unable to point to any authority for the proposition that cross-examination is a right always conferred by the rules of natural justice, whenever they are applicable. The passage from Mahon where reference is made to the "opportunity to adduce additional material of probative value" is not to be taken as necessarily including adducing material by cross-examination. Cross-examination or limitation of cross-examination was not an issue in that case. Further, in National Companies and Securities Commission v The News Corporation Limited (1984) 156 CLR 296 the High Court set aside an order of the Full Court of the Federal Court which included a direction "that legal representatives of News be permitted to cross-examine witnesses called at the hearing." 21 A feature of that case was that it was no part of the Commission's function to publish adverse findings, conclusions or evidence. At most the Commission's determination might result in subsequent proceedings in a court. Moreover the hearings were held in private: see per Brennan J (at 326). So senior counsel for the applicants was correct in saying that the statutory regime was relevantly different from that with which the present case is concerned. That said, the case certainly provides no positive support for cross-examination being an inevitable concomitant of natural justice. The majority (Mason, Wilson and Dawson JJ) said (at 325): "In our opinion the Commission will comply with the statutory mandate to observe the rules of natural justice in the present case if it proceeds to allow each witness who is called to give evidence to be legally represented, with freedom for that representative to participate in the examination of the witness, and for the provision of a transcript of his evidence. The conduct of an investigation in such a manner is fair and nothing more is required." 22 Gibbs CJ said (at 314): "… I find it quite impossible to say that the rules of natural justice require the Commission to proceed as though it were conducting a trial. It seems to me in no way unfair, that at a hearing of the kind which I have described, the respondents should not be entitled to cross-examine such witnesses as the Commission may call, or to call evidence of their own. If proceedings are subsequently brought in the Supreme Court against the respondents, they will of course be able to test by cross-examination the evidence adduced, and to call evidence themselves." 23 The high point of the authorities cited by senior counsel for the applicants was Australian Postal Commission v Hayes (1989) 23 FCR 320, which arose out of a hearing by the Administrative Appeals Tribunal of a claim under the Compensation (Commonwealth Government Employees) Act 1971 (Cth). Prior to the hearing the solicitors for the claimant became aware that the Commission proposed to use a video film portraying her activities. The Tribunal acceded to a submission that the claimant should be given access to the video prior to the completion of her evidence-in-chief. The Tribunal rejected a submission by the Commission that the claimant's credit could best be tested if the film were first shown to her during the course of cross-examination. The Commission's challenge under the AD(JR) Act to this ruling was upheld by Wilcox J. His Honour (at 327) accepted an argument that "… the testing of opposing relevant material by cross-examination is an essential feature of the opportunity to correct or contradict that material; it is not enough that the party against whom the evidence is led has the right to present evidence in reply. Moreover, although counsel accept there exists some discretion to control cross-examination so as to ensure relevance and to guard against repetition and prolixity, it is said that the right to cross-examine means the right effectively to cross-examine. If directions given by a court or a tribunal have the effect of so fettering cross-examination that a witness's evidence cannot properly be tested, procedural fairness has been denied." 24 His Honour observed (at 327) that "(i)t is the everyday experience of those who attend courts that cross-examination is at its most effective when the evidence of a witness is able to be confronted by documents. But, as with any other cross-examination, it is normally necessary for the cross-examiner first to have the witness commit himself or herself to a precise version of relevant matters; the process which the late Mr J W Smyth QC called "closing the gates", see "The Art of Cross-examination" (Autumn 1988) Bar News at 12-13. It is important, in that process, that a mendacious witness not be aware of the material available of the cross-examiner to contradict the evidence under manufacture." 25 The observation as to the frequency with which such an approach is adopted in cross-examination is perhaps not all that easy to reconcile with a later observation of his Honour where in dealing with what was said by the Tribunal as to the open conduct of proceedings his Honour said (at 329): "Openness is a notable feature of the Tribunal's procedures. It is a feature which has contributed significantly to the Tribunal's efficiency and which has enhanced the status of its decisions. There is everything to be said, in the vast majority of cases, for insistence upon the full and early disclosure of all material documents. But in an exceptional case in which a party can demonstrate that the temporary suppression of a document is necessary for the proper presentation of its case, the ideal of openness must give way to the Tribunal's statutory obligation to give to all parties a reasonable opportunity to present their cases." 26 The judgment in Hayes makes no reference to the decision of the High Court in NCSC some five years earlier. Hayes appears to elevate a useful forensic technique to the status of a mandatory legal rule binding an administrative decision-maker. I would respectfully decline to follow it. 27 In any case, I note that par 12 does not require a statement of evidence advancing all material contrary to the evidence of the witness or which might be otherwise relevant. To take a hypothetical example, if witness A gives evidence of B's participation in unlawful conduct at a given place and time, B's signed statement under par 12 might say that he was then present but engaged in different, and lawful, conduct or perhaps that he was not present at all but was on holiday at an interstate location. However, if B had in his possession a letter written by A to C expressing hostility towards B, par 12 would not require the production of that letter in the statement and A could be confronted with it in cross-examination, no doubt after appropriate gate closing. 28 There is some basis for thinking that the Commissioner has already taken an approach consistent with this view. At a hearing on 24 January 2002 (transcript p 1113) the following exchange took place: "MR PERRY: May I raise a number of matters, please. In terms of cross-examination, earlier in the week, I think in response, perhaps, to Mr Crawshaw, you indicated that what you required was a notice or indication of the areas of cross-examination, I think was the way you described it. Is that still your requirement, that it be done in that form, that is, by reference, obviously, to witnesses required for cross-examination and the areas of those witness's evidence to be (indistinct) for summary. Is that sufficient for your purposes? COMMISSIONER: Yes, that is sufficient. What I have in mind is that witness A will have said X, witness Z will say, 'I don't agree with X because W,P,Q happened.' MR PERRY: I understand. As long as that is sufficient for your purposes. COMMISSIONER: I don't want the detail, I just want the area." 29 Moreover, as I have already mentioned, par 12 is not set in stone. If some unforeseen circumstance arose in which a person would be unfairly disadvantaged by the application of it, the Commissioner would presumably deal with that situation on its merits. 30 Further, I am not persuaded that par 12 creates unfairness in the broad sense which the law relating to natural justice postulates. As the authorities make clear, the fact that it might prescribe a procedure not normally adopted in civil or criminal litigation is not to the point. When asked to demonstrate what was wrong or unfair about par 12, senior counsel for the applicants gave an example (which he said had in fact already occurred) of a person who might have the protection of the privilege against self-incrimination in the limited circumstances prescribed by s 6A (that is, proceedings already having been commenced). Such a person would have to either give a statement and be liable to cross-examination, thus waiving the privilege, or forgo any opportunity to cross-examine the adverse witness. However, the same result would follow if the Commissioner reached a tentative conclusion that an adverse finding should be made against the person. The rules of natural justice would require that the person be given an opportunity to respond, which usually would involve that person giving his or her version of the events on which the Commissioner's tentative conclusion was based. It is hard to see that this could be done without waiving the privilege. If the privilege were maintained and no contrary version proffered, the Commissioner might well make a final finding in adverse terms. Par 14 contemplates the acceptance of unchallenged evidence, but there is nothing revolutionary or unfair in this. So maintaining the privilege necessarily runs the risk of an adverse finding, whether or not there is cross-examination by the person subject to the finding. Moreover, if the privilege is waived and evidence given, that evidence cannot be used against the person in any civil or criminal proceedings in any Australian court, other than in proceedings for an offence against the Act: s 6DD, Giannarelli v The Queen (1983) 154 CLR 212.

Orders 31 The second respondent's objection to competency will be dismissed with no order as to costs. The application will be dismissed. There will be an order that the applicants pay the respondents' costs of the application including reserved costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate: Dated: 1 February 2002 Counsel for the Applicants: H Borenstein SC and K Hanscombe

Counsel for the Respondents: S Gageler SC and S Lloyd

Solicitor for the Respondents: Australian Government Solicitor