7 The prima facie immunity to which McLelland J referred does not establish the result of the balancing exercising but it does establish that such documents enter into it. McLelland J referred to the following statement by the majority of the High Court, in National Companies and Securities Commission v. News Corporation (1984) 156 CLR 296 at 323: -
"It is of the very nature of an investigation that the investigator proceeds to gather relevant information from as wide a range of sources as possible without the suspect looking over his shoulder all the time to see how the inquiry is going. For an investigator to disclose his hand prematurely will not only alert the suspect to the progress of the investigation, but may well close off other sources of inquiry."
8 The claims of the public interest in favour of not requiring law enforcement agencies to reveal the information they have before their investigations are complete are strong and obvious. They are no less strong because of several circumstances of the present case.
9 For a number of sources of information no effectual claim of immunity could be made as the information is available from other sources. The form of questions put to Mr Robert Porter and recorded in a transcript which is available show some parts of what must be taken to be information furnished to ASIC in some way by Mr Rodney Adler; however the whole of Mr Adler's information is not shown in that way. There is probably a basis for deducing something about ASIC's methods and lines of inquiry from the records which are outside the immunity. The fact that the public interest claim cannot be effective to protect all of the investigation and can only protect part of it has no force as a reason for withholding immunity from that part.
10 Several considerations were put forward in Mr Orchard's evidence for the balancing exercise. It was contended that the production of documents would be contrary to public interest in relation to due performance by the Commission of its statutory function to investigate suspected contraventions of the Corporations Law and if appropriate to refer such matters to the DPP. The statutory function is conferred by subs.13(1) of the Australian Securities and Investments Commission Act and relates to investigations where ASIC has reason to suspect that contraventions of law have been committed.
Mr Orchard said that the documents were comprised completely of documents brought into existence in the course of conducting an investigation into suspected contraventions of the Corporations Law. These contentions only express the initial approach to production of a law enforcement agency's documents which brings such documents into the balancing process.
11 Mr Orchard said of a number of documents and classes of information that they were given to the Commission in confidence. He offered no evidence of specific arrangements with any of the informants establishing the existence and terms of the confidence or limiting the use to be made of the information. His evidence referred to confidence arising from statutory restrictions and from the circumstances of information being furnished to a prosecuting authority. It is obvious to reasonable people taking part in such an activity and goes without saying that the information is given so as to be used only for proper purposes connected with the prosecution. If an examination is conducted in accordance with s.19 statutory controls over the use of the transcript operate. When informants give information without being compelled in that way (which costs ASIC considerably less) they have a legitimate expectation that use of the information will be similarly restricted.
12 There are obvious limits to the obligation of confidence, as if there is a prosecution the information will probably have to be revealed, in a proper way, in connection with the prosecution; and law enforcement agencies like everyone else may be subject to compulsion from Parliaments, courts and other public authorities. The circumstances in which confidence is implied has a part but I feel not a large part in the balancing exercise. It could well have some limiting effect on the availability of information if persons furnishing information thought that their information was unquestionably or readily available for use in civil litigation, or for any use other than investigation of law enforcement.
13 Mr Orchard expressed this consideration as follows:
"17. From time to time during the course of any investigation, the investigative officers may identify persons from whom admissible evidence may be obtained but who they also believe may have committed an offence. In those circumstances, the only way that the investigative officers may obtain that evidence from the person or persons in a form that they have confidence in respect of its admissibility, is to offer that person or those persons a formal record of interview in which the proper formalities are observed. It is my experience that such persons having been offered a formal record of interview, often agree to participate in the interview in the knowledge that the process and interview are in confidence and that it and the transcript are conducted or created for the purpose of the Commission and, or the DPP being better able to consider and decide whether to charge persons for contraventions of the Corporations Law or use that interview material so obtained in any future criminal proceedings.
18. I believe that should the audio tapes and, or the transcripts of such interviews be generally available for production to the Court under subpoena issued by litigants in civil proceedings, the number of occasions in which persons who have been offered records of interview also agree to participate in that voluntary process would decline significantly. Such an outcome would significantly hinder the ability of the Commission in future cases to obtain admissible evidence from persons with relevant knowledge in those future investigations. In some cases, that may impact of the quality of the decision-making in respect of the question of whether to initiate criminal proceedings."
14 I regard these considerations as relevant, but not of great weight in view of limits which otherwise exist on the effect of confidentiality. Where implications of this kind exist, the public interest is served by respecting the confidence; cf Jacobsen v. Rogers (1995) 182 CLR 572 at 590.
15 The revelation to Mr Robert Porter of parts of what Mr Adler must be taken to have told ASIC is an illustration of how the implied confidence must be understood to be qualified; if the information is given, it must become known to somebody when it is later used, and a prosecuting authority comes under obligations, when interviewing a person against whom proceedings may be brought, to give that person the opportunity to deal with information.
16 Mr Orchard also put forward that the consideration that revealing documents which contained the full text of interviews conducted with potential witnesses will disclose all lines of inquiry pursued by the investigation officer and the information received by ASIC in confidence up to the point of each interview. I regard this as a consideration of some weight, but limited weight as several statements have already been made available.
17 Mr Orchard's evidence was that revealing the documents would seriously impede the ability of ASIC to fulfil its function of effectively investigating possible offences. My view is that the ability and effectiveness of the Commission's investigation would be impeded to some extent, but not so far as to make it ineffective. Mr Orchard also referred to the prospects, which in view of the preliminary advice from the DPP appear to me to be quite strong, that further investigation may have to be undertaken and further evidence may have to be decided before a final decision is made. He pointed to disadvantages if, before the investigation was completed, the potential evidence and relevance comprehensiveness and clarity became known; he contended that this might compromise the reliability of any further information. In my judgment this is a strong consideration favouring immunity; the investigation is not yet completed, and the utility of anything further found and the opportunity to find it may be impaired if the information already collected, with whatever limitations it has, is made available to those potentially affected.
18 Overall, the circumstance that the investigation is incomplete and has not reached the point where a decision has been taken as to whether there is to be a prosecution or not is a powerful consideration favouring immunity. An investigation in which all information to hand from time to time is open to knowledge of the persons potentially affected, and the parties to this litigation include several of those persons, is very unlikely to be effective.
19 The consideration set against this is another public interest in the attainment of justice which supports the plaintiff and other parties to the litigation having available to them any statements made by parties and potential witnesses about the relevant facts. All such statements can make a contribution to establishing what a witness can be expected to say, and also the reliability of evidence; they enable processes of comparison and testing of narrations given by witnesses at different times to be undertaken. For information given by the defendant, and by all witnesses who are prepared to consent, the plaintiff already has that material. For the remaining seven persons it may be inferred that as they have not given their consent the plaintiff may have difficulty getting information from them, and for two of them, Mr Adler and Mr Loiterton there is evidence that they have declined to give information. Mr Frawley, a solicitor conducting the litigation for the plaintiffs, has given evidence that he perceives that Richard Walker and Ian Porter (who is the defendant's brother) would be unwilling to assist the plaintiffs.
20 The plaintiff's counsel pointed to the decision of Lehane J in Hadid v. Lenfest Communications Inc. FCA 7 May 1998, and contended that in view of that decision there could not reasonably be much reliance on such circumstances of confidence. That decision was an application of the balancing test to the facts of that case, of which Lehane J. said "The cumulative circumstances of this case are somewhat unusual" (p5). Those circumstances included that the investigation had long been concluded and that the applicant already had part of the witness's information, and I would respectfully say that the following conclusion was on the facts unremarkable: "In all those circumstances, in my view, disclosure of the Heller documents to the parties to this proceeding is likely to have only a slight deterrent effect, if any, on those who in future might contemplate voluntarily giving information to the ASC; …". This cannot be applied generally to cases where the investigation still proceeds.
21 The plaintiffs' wishes relate to finding out what evidence may be available, and to matters ancillary to the adduction of evidence relating to credit and credibility. Evidence already filed shows, or makes it likely that Messrs Adler, Loiterton, Peter Hall and Ian Hall spoke to the defendant Mr Robert Porter before or at the time of the relevant discussions; hence it can be inferred that they may be able to give relevant information. Mr Glasgow is a witness whose affidavit the plaintiff has obtained and filed. Mr Walker is a witness whose affidavit the defendant has obtained and filed. The other five are persons whose evidence neither party has obtained and filed, although the parties have been under directions which would have required them to do so. Plaintiff's counsel observed that the plaintiffs may wish to call evidence from these persons depending on its contents. The plaintiff either has not been able to get or has not got evidence from them. The plaintiffs' counsel contended "depending on what they may have told ASIC in examinations on oath, the plaintiffs may wish to subpoena them to give evidence in these proceedings. At the moment that is not a practicable course ..". Counsel also referred to the possibility that information given at an early stage when recollection was fresh may be better than information available later, and may be available as a test of recollection.
22 The endeavour to find what these five persons told ASIC is at one remove from the matter brought into the balancing exercise, that is the public interest in the administration of justice, which is served by having relevant evidence before the court; it is at a remove because the plaintiff wishes to find whether they can give relevant evidence, and what it is, without their co-operation. The exercise is to find out whether there is any relevant evidence, not necessarily to get it before the court. Plaintiffs' counsel contended that simply to call a witness on subpoena without knowing in advance what the witness is likely to say and find that out from his evidence what it is is not a practical course. I accept that in all prudence a witness cannot be called on that basis where, as here, the litigant has other material. The considerations which make it imprudent to call a witness who does not co-operate may be reduced if the witness' statement is available, depending on what it contains, but remain formidable. For Mr Glasgow and Mr Walker the exercise is to find what additional sources of material, which may be useful either to assist memory or to attack credibility, may be available in a context where what the witness has to say in evidence in chief is already known.
23 Counsel also contended that it was appropriate for the court to consider restricting access to and use of the material, for example to restricting access to lawyers representing the parties. I do not regard an attempt to restrict access as practicable; if the information is of any use, it must be given in the proceedings and given publicly, and there is no substantial basis for attempting to conduct the hearing in private. I regard an attempt to give limited protection to the immunity as impracticable.
24 What these five persons may have to say could well be important, but the evidence does not establish that it will be important or establish except in the most general way what it may deal with. It has not been shown that it is necessary for the attainment of justice that what they have to say should be known; the object of seeking to compel inspection is to find out what they have to say, whether it is significant and how it is significant. The matters relating to the evidence of Mr Glasgow and Mr Walker must present themselves in every case where civil litigation and a law enforcement investigation deal with the same facts.
25 Consideration of what the public interest in the administration of justice requires should not be broken down into an easy assumption that all information collected by law enforcement authorities is to be available for litigants; law enforcement authorities do not labour for the advantage of private litigants, but for public purposes of high importance. The plaintiff does not bring into the balance any demonstration that anything will be added to the evidence to be put before the court in these proceedings; the exercise is investigative.
26 My view of the balancing exercise is that there is a decided preponderance in favour of according immunity.
27 The defendant Mr Porter brought the second to sixth cross-claims against five persons who are alleged to have been present at a joint meeting of the Investment Committee and the Board of Directors of OAMPS Ltd on 30 June 1998 when decisions were made which are at the heart of the plaintiff's claim against Mr Porter. These cross-defendants Mr Siggins, Mr Harris, Mr Glasgow, Mr Sharkey and Mr Windebank each applied for orders that these cross-claims be struck out under Pt.15 r.26. There are four notices of motion on the file and I was told that Mr Sharkey so applied, although he has not filed a notice of motion. The defendant conceded these applications and applied by Notice of Motion of 11 November 1999 for leave to amend each of the cross-claims. This application was opposed.
28 As the trial of the proceedings is almost three months off and the cross-defendants are already involved there is adequate time for them to prepare for the hearing. Part 20 r.1(2) of the Rules of Court in imperative terms, provides: "All necessary amendments shall be made for the purpose of determining the real matters raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings." This greatly limits the discretionary element, but it is relevant to consider whether the amendment will produce a procedurally fair result in terms of clarity and particularity, and whether the claims raised are fairly arguable or obviously futile. A liberal approach is required: Queensland v. J.L. Holdings Pty Ltd (1997) 189 CLR 146.
29 During the course of argument the plaintiff's counsel pointed out minor redrafting which he proposed and produced particulars of paras 4, 5, 6 and 8; these should be incorporated.
30 The substance of the case proposed to be raised, as revealed by the pleading and also by the course of argument, is that each of these cross-defendants as a member of the Investment Committee voted in favour of a resolution proposed by the defendant that the second plaintiff invest a large sum in Clifford Corporation thereby committing the second plaintiff to making that investment; and did so with the improper purpose of securing the position of the defendant Mr Robert Porter as managing director of the first plaintiff. The purpose alleged is a condition of mind and a party pleading that condition of mind is to give particulars of facts relied on. See Pt.16 r.3. A deficiency in the pleading proffered is that it does not explicitly say, and should have said if it was fairly to express the cross-claim, that the existence of the wrongful purpose is alleged to be shown by the events set out in para.1(f); that Mr Robert Porter made a statement at the joint meeting of the Investment Committee attended by each cross-defendant, and that they then each voted in favour of the resolution. Unless this is stated with clarity and in the form of particulars the possibility exists that these cross-defendants may be exposed to attempts to prove the alleged purpose in some other way. This may be overcome by redrafting the document to some extent so as to bring appropriate precision to bear on the allegation.
31 The facts on which this finding is, according to the pleading, to be based are not facts which on the whole view of his case the defendant advocates. He denies that he had or expressed the improper purpose of making the investment to secure his own position, and the claims against these cross-defendants are in effect claims for contribution to a liability which he disputes he should bear. That is, of course, an appropriate case to present in a cross-claim. These circumstances are alluded to in the opening lines of para.1 of the proposed amendment: "In these proceedings the plaintiffs have alleged and have sought to prove by affidavits filed in the proceedings …" which introduces a number of subparagraphs including 1(f). It is appropriate to recite those circumstances in which the cross-claim was made but it is not appropriate that reference to any of those affidavits should be required to understand any of the allegations in the cross-claim. The pleading should speak for itself, and even cross-references incorporating passages in earlier pleadings are inappropriate ways of making allegations.
32 The proposed amended cross-claim should be redrafted to incorporate all the particulars to which I have referred.
33 Another respect in which the draft is inadequate is that in not an altogether explicit way it is alleged against each cross-defendant that he was present at the meeting at all material times; whereas reference to the affidavits shows that Mr Windebank was not present at some time, although there is no undisputed position about when he was present and how he participated. Reference to the affidavits initially appeared incidental but it precipitated a survey of what the affidavits had to say, and this is an inappropriate means of ascertaining what is alleged in the pleading.
34 On behalf of Mr Windebank, the sixth cross-defendant it was contended that paras 4 and 5 in the draft are internally inconsistent. To my reading, when allowances are made for the circumstances in which allegations adverse to Mr Porter are made and are not adopted by him for all purposes, there is no internal inconsistency.
35 It was also contended by Mr Windebank's counsel that para.8(b) in referring to "fiduciary duties" is unsatisfactory because fiduciary duties breached are not earlier alleged, nor are they satisfactorily identified. This submission is correct; any fiduciary duty alleged and the based on the facts in which the duty is said to exist should be clearly shown by the pleading, and breaches should be alleged with sufficient particularity to relate the matter complained of to the fiduciary duty.
36 Mr Windebank's counsel also made an observation on the reference in para.4 of the draft to subpara.1(d); the text shows that this reference is incorrect and the plaintiff's counsel told me that he wished to substitute a reference to subpara.1(f)(1).
37 Mr Windebank's counsel also argued to the effect that it is futile to maintain or that it is not reasonably arguable, having regard to the references to Mr Windebank in the affidavit, that Mr Windebank was present at the meeting at a time when Mr Porter made the statement alleged. As a formal matter it appears to me to be correct that no affidavit or combination of affidavits establishes that Mr Porter made the statement alleged and that Mr Windebank was present at the meeting at the same time; this exemplifies the difficulty for the cross-claim that Mr Porter maintains that there was no such statement and his affidavit is to that effect, yet the cross-claims are based on a view of the facts which his own evidence does not support. The procedure of allowing cross-claims to be heard at the same time as principal claims exists, in large part, to enable merits to be determined notwithstanding that anomalies of this kind appear to stand in the way of commencing claims; the whole of the facts are to be sorted out at the trial of the proceedings. These submissions demonstrated difficulties confronting Mr Porter; they did not demonstrate that the cross-claim was futile.
38 Mr Windebank's counsel made observations on a lack of particularity in paras. 4, 5 and 6 which in my view are overcome by particulars which the plaintiff's counsel proposes to incorporate.
39 Mr Windebank's counsel made observations on the multifariousness of para.6 of the draft, and offered an analysis which shows arithmetically that when the allegations of being concerned in, a party to aiding, abetting (and so forth) the transaction are applied to all the matters referred to in para.1(g), draft para. 6 rolls up 42 different allegations, but does not state any of them with particularity. Draft para.6 is introduced by the words "by reasons of the matters referred to in paras.4 and 5" and these words confine, to some degree the multifariousness of para. 6, but do so only by introducing great difficulty in reading three paragraphs together and discerning what is referred to. In my view there is a need to redraft para.6 and greatly confine its reference so that it could be understood directly and does not introduce or roll up a large number of mathematical possibilities which are not truly relied on.
40 As the breach truly relied on is voting in support of the resolution, para.6 should be drafted so as directly to show that that is the breach, and to remove possibilities that it may be used as a vehicle for presenting some other matter which is not clearly indicated by its terms. Paragraph 7 is related to para.6 and suffers in a similar way. It suffers from excessive reliance on cross-references and from the absence of any clear specification that the breach complained of is voting at the meeting and doing so with the improper purpose. The reference to s.79 of the Corporations Law is very unclear as that section specifies many ways in which a person may be involved in a contravention. The references to subsections 232(2),(4) and (6) are also unclear. Once again arithmetic could suggest a very large number of combinations to which para.7 could refer; the allegation must be reduced to intelligibility and what in substance is relied on must be shown with particularity.
41 Counsel for the second, third, fourth and fifth cross-defendants traced the elaborate chain of provisions in the Corporations Law which may impose liability for involvement in a contravention of s.232 by another person. This demonstrates the importance of showing in a clear way in the pleading whether the claim is based on a liability imposed under the Law on a particular cross-defendant in respect of that cross-defendant's own conduct or its based on involvement in breaches by Mr Porter. Precision of definition has implications for the approach to be taken in Mr Porter's claims for contribution.
42 Counsel for these cross-defendants contended that the circumstances in which one director can claim contribution from another were limited in some way which does not extend to the present facts. In my opinion the authority to which he referred, Walsh v. Bardsley & Anor (1931) 57 Times Law Reports 564, does not bear this out; that decision, in which there is no exposition of underlying principles, appears to me to have been based on Romer LJ's view of the appropriate equitable adjustment upon the facts of that case. If Mr Porter and the cross-defendant incurred a co-ordinate liability for breaches of fiduciary duty arising out of the same events it is reasonably open to contention that one or the other may be entitled to contribution or indemnity.
43 Counsel also contended that the apportionment legislation of Victoria and New South Wales referred to in para.9 of the draft cannot support the claim. For the New South Wales legislation which refers only to a tortfeasor this contention could well be right, although counsel did not refer to any authority establishing conclusively that this is so. The Victorian contribution legislation does not speak in terms of tort and tortfeasors. It is introduced by subs.23B(1) of the Wrongs Act 1958 (Victoria) thus "… A person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect to the same damage …" It is reasonably arguable that this extends to causes of action created by statute, to causes of action founded on breach of statutory duty and to equitable claims as well as to claims based on tort.
44 Counsel contended to the effect that it has been established by observations of Clarke JA in Thompson v Hill (1995) 38 NSWLR 714 at 734-735 that a claim for contribution based on s.23B of the Wrongs Act 1958 (Victorian) is not justiciable in New South Wales. His Honour's observations relate to the content and application of private international law with respect to proceedings in New South Wales for damages for a tort committed outside New South Wales. The observations were not addressed to claims based on the statutory rights to contribution or other statutory rights, and were not addressed to jurisdiction under the cross-vesting legislation. In that case the plaintiff did not invoke the cross-vesting legislation or ask this court to exercise the jurisdiction of the Supreme Court of Victoria; to do so would have been entirely fatal to the plaintiff's claim, the object of which was to escape from Victorian statutory provisions. In my respectful view Clarke JA's observations did not deal with the justiciability of a claim based on the Victorian contribution legislation, and it is reasonably open to argument that in the claim which the cross-claimant now makes the rules of private international law have no part.
45 In my view, although the amendment should not be allowed in exactly the form in which it is put forward, an amendment should be allowed if redrafted in the manner which I have indicated, provided that the redraft is put before me very promptly.
46 The application may be restored to the list on one day's notice.