R v Kinghorn

ssion Act 2002 (Cth), s 25A Commonwealth Constitution, s 80 Crimes Act 1900 (NSW), s 178BA Criminal Code (Cth), s 135.1 Income Tax Assessment Act 1936 (Cth), ss 16, 16(2A), 161, 162, 263, 264 Income Tax Assessment Act 1997 (Cth), s 995-1(1) Independent Broad-based Anti-corruption Commission Act 2011 (Vic), s 144(2) Judiciary Act 1903 (Cth), s 78B New South Wales Crime Commission Act 1985 (NSW), s 13(9) Sales Tax Assessment Act (No 1) 1930 (Cth), s 10(2) Taxation Administration Act 1953 (Cth), ss 3E, 3G, 8C, 8D, 8K, 8M, 8N, 8ZA, Sch 1 s 353-10, Sch 1 Div 355, Sch 1 Div 355 Subdiv 355-B, ss 355-25, 355-50, 355-70, 355-175 Cases Cited: A v Maughan (2016) 50 WAR 263; [2016] WASCA 128 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334; [1999] HCA 9 Binetter v Deputy Commissioner of Taxation (2012) 206 FCR 37; [2012] FCAFC 126 Canadian Pacific Tobacco Company Ltd v Stapleton (1952) 86 CLR 1; [1952] HCA 32 Commissioner of Taxation v De Vonk (1995) 61 FCR 564; [1995] FCA 994 Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257 Commonwealth v Helicopter Resources Pty Ltd [2020] HCA 16; (2020) 94 ALJR 466 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Director of Public Prosecutions (Cth) (2020) 102 NSWLR 72; [2020] NSWCCA 48 Do Young Lee v The Queen (2014) 253 CLR 455; [2014] HCA 20 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477; [1993] HCA 74 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Hammond v The Commonwealth (1982) 152 CLR 188; [1982] HCA 42 Huddart Parker & Co Pty Ltd v Moorehead (1908) 8 CLR 330; [1909] HCA 36 Lee v New South Wales Crime Commission (2013) 251 CLR 196; [2013] HCA 39 Macdonald v R; Maitland v R (2016) 93 NSWLR 736; [2016] NSWCCA 306 Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333; [1912] HCA 69 R v Independent Broad-based Anti-corruption Commissioner (2016) 256 CLR 459; [2016] HCA 8 R v Kinghorn (No 4) [2019] NSWSC 1420; (2019) 348 FLR 281 R v Kinghorn (No 7) (2020) 103 NSWLR 63; [2020] NSWSC 1483 R v Leach [2019] 1 Qd R 459; [2018] QCA 131 R v OC (2015) 90 NSWLR 134; [2015] NSWCCA 212 R v Seller; R v McCarthy [2013] NSWCCA 42; (2013) 232 A Crim R 249 Sorby v The Commonwealth (1983) 152 CLR 281; [1983] HCA 10 South Australia v Totani (2010) 242 CLR 1; [2010] HCA 39 Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; [2018] HCA 53 X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29 Yates v R (1991) 102 ALR 673 Zanon v Western Australia (2016) 50 WAR 1; [2016] WASCA 91 Texts Cited: Tax Laws Amendment (2007 Measures No. 1) Bill 2007 (Cth) Category: Principal judgment Parties: Crown (Appellant) John Alan Kinghorn (Respondent) Commonwealth Attorney-General (Intervening) New South Wales Attorney-General (Intervening) Representation: Counsel: J Giles SC, K Ginges, H Mann (Crown) B Walker SC, S Buchen SC, G Huxley, H Atkin (Respondent) S Donaghue QC, J Davidson (Commonwealth Attorney-General) M Sexton SC, M Pulsford (New South Wales Attorney-General)

Solicitors: Commonwealth Director of Public Prosecutions (Crown) King & Wood Mallesons (Respondent) Australian Government Solicitor (Commonwealth Attorney-General) Crown Solicitor's Office (New South Wales Attorney-General) File Number(s): 2017/304100 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law - Crime Citation: [2020] NSWSC 1483 Date of Decision: 23 October 2020 Before: Adamson J File Number(s): 2017/304100

[This headnote is not to be read as part of the judgment] On 6 October 2017 the respondent, John Alan Kinghorn, was charged with three offences, two of which were that, contrary to s 135.1(7) of the Criminal Code (Cth), he dishonestly represented to a public official that he did not control Kalomo Corporation Ltd and Kalomo Pacific Leasing Ltd (collectively called Kalomo). The indictment relating to the third charge was later discontinued. Some twelve years prior to the laying of the charges, the respondent was examined by counsel engaged by the Australian Taxation Office (ATO), pursuant to what was then s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936). Particulars of the charges against the respondent include that he made false representations during the s 264 examination about his involvement with Kalomo. The Crown proposes to tender portions of the transcript of the s 264 examination at the trial, solely for the purpose of proving that the representations were in fact made. Prior to the laying of charges, the transcript of the s 264 examination and related material was disclosed to the Australian Federal Police (AFP) and the Commonwealth Director of Public Prosecutions (CDPP) on a number of different occasions. A critical issue in the proceedings was whether the ATO was empowered to make those disclosures. With some adjudication by the primary judge, the parties formulated three separate questions aimed at addressing that issue. Although the respondent reserved his right to later challenge the lawfulness of the s 264 examination, the questions proceeded on the basis that the s 264 examination was lawfully conducted. The questions and her Honour's answers were as follows: "The Leach question Question: Does the law as applied in R v Leach [2019] 1 Qd R 459, concerning the accusatorial principle, the companion rule and the application of those principles to answers compelled under taxation legislation, have the effect that investigative authorities and prosecuting authorities should not have disseminated and/or should not have had access to and/or should not have used the content of the accused's compulsory examination under s 264 of the Income Tax Assessment Act 1936 (Cth), where the prosecution of the accused for offences contrary to s 135.1(7) of the Commonwealth Criminal Code may possibly occur or will occur and where the offences allegedly involve a course of conduct that included false or misleading statements made during the s 264 examination? Answer: The answer to each part of the question is yes. The evidence questions Question: In respect of use by the prosecutor, is the content of the s 264 examination admissible in the trial of the accused? Answer: No. Question: If so, what are the limits on its use? Answer: This question does not arise, having regard to the previous answer." The Crown appealed against the primary judge's answers to the separate questions. The Crown's position was that the accusatorial principle and companion rule have no application pre-charge, but even if they did, the disclosures were authorised by statute. The respondent's argument had two strands. The first was that the principle of legality required the generally expressed statutory provisions to be interpreted in such a way that the pre-charge dissemination of material to investigating or prosecuting authorities would be unlawful at the time of the dissemination. The second strand (the crystallisation argument) accepted that pre-charge dissemination was lawful but said that no use could be made of the material once charges were laid. When the appeal was initially called on for hearing, there was a dispute between the parties about the concessions made in the Court below in relation to R v Leach [2019] 1 Qd R 459 (Leach). Senior counsel for the respondent sought an adjournment and then argued that if the legislation pursuant to which the transcripts were supplied to the CDPP and the AFP authorised the disclosure and the use to which the transcript was put, the legislation to that extent was constitutionally invalid. The raising of that issue necessitated the giving of notice of the constitutional issue to the various Attorneys General for the Commonwealth, the States and Territories pursuant to the Judiciary Act 1903 (Cth). The Attorneys General for the Commonwealth and New South Wales intervened in the appeal in support of the Crown. Held (Bathurst CJ and Payne JA, Bell P, Ward CJ in Eq and Bellew J agreeing), allowing the appeal and substituting the answers to the separate questions: As to the application and abrogation of the accusatorial principle and companion rule and as to whether Leach should be followed:

Judgment

1. BATHURST CJ & PAYNE JA: The respondent, John Alan Kinghorn (the respondent) was charged on indictment dated 17 July 2018 with three offences, two of which were that, contrary to s 135.1(7) of the Criminal Code (Cth), he dishonestly represented to a public official that he did not control two companies incorporated in Jersey, namely Kalomo Corporation Ltd and Kalomo Pacific Leasing Ltd (collectively called Kalomo). The respondent had been served with a Court Attendance Notice in respect of those charges on 6 October 2017.
2. The Crown subsequently split the indictment into two indictments. On 8 October 2019 the respondent was arraigned by reference to the two dishonesty offences on an indictment dated 1 October 2019. The indictment relating to the third charge was discontinued.
3. Some 12 years prior to the laying of the charges, the respondent was examined by counsel engaged by the Australian Taxation Office (ATO) pursuant to the provisions of the then s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) (the s 264 examination). The examination covered, among other things, the respondent's relationship with Kalomo. Particulars of the charge brought against him include making representations during the course of the s 264 examination concerning his involvement with Kalomo which were said to be false. The appellant proposes to tender portions of the transcript of the s 264 examination (the s 264 transcript) at the trial, solely for the purpose of proving that the representations were in fact made.
4. On 15 April 2019 the respondent filed a notice of motion seeking a stay of the proceedings. Prayer one sought a temporary stay pending disclosure of certain material including particulars of the dissemination of the s 264 transcript. Prayer two sought a permanent stay and prayer three sought, in the alternative, a temporary stay pending the appointment of a new prosecution team which had not listened to or read the transcript of the s 264 examination.
5. The prosecution of the charges has had a tortuous history. The respondent has claimed that the availability of the s 264 transcript to the investigating and prosecuting team responsible for the formulation of the charges resulted in a fundamental departure from the accusatorial nature of the criminal justice system such as to warrant the proceedings being permanently stayed or, at the very least, temporarily stayed until a new prosecution team replaced the persons who had access to the s 264 transcript: see X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29 ("X7"); Do Young Lee v The Queen (2014) 253 CLR 455; [2014] HCA 20 ("Lee (2014)").

Two initial difficulties

1. In reaching her conclusion as to the appropriate answers to the separate questions, the primary judge noted what she regarded as an express concession by the Crown that Leach was correctly decided. She made the following comments (R v Kinghorn (No 7) (2020) 103 NSWLR 63; [2020] NSWSC 1483 ("Kinghorn (No 7)") at [85]): "[85] Leach must be examined in some detail because it is at the heart of the separate questions. Leach was relied on by the accused. The Crown sought to distinguish it. The Crown is bound by its concession that Leach is correct. It was common ground that I am bound by it, to the extent to which it applies to the present case."
2. The fact that such a concession was made also seems implicit in the formulation of the first question.
3. However, when the appeal was initially called on for hearing, senior counsel for the Crown stated that the only concession made was that the result in Leach was correct and the concession did not extend to conceding that the reasoning was correct or that this Court was bound to follow it. Senior counsel for the respondent disputed that this accurately stated the concession which was made and sought an adjournment which was granted to enable him to argue that if the legislation pursuant to which the transcripts were supplied to the CDPP and the AFP authorised such disclosure, as well as the use to which the transcript was to be put, the legislation to that extent was constitutionally invalid. The raising of that issue necessitated the giving of notice of the constitutional issue to the various Attorneys General for the Commonwealth, the States and the Territories pursuant to s 78B of the Judiciary Act 1903 (Cth). Notice was in fact given and the Attorneys General for the Commonwealth and New South Wales intervened in the appeal.
4. That gave rise to two difficulties. The first was that to the extent that the first question was based on an assumption or concession from which the Crown would be able to depart in the future, it was arguable the question was hypothetical and not one that the Court exercising federal jurisdiction should answer: Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334; [1999] HCA 9. Further, even if a problem of this nature did not arise, the question in those circumstances may have no utility.
5. However, as senior counsel for the respondent pointed out, the question was based on an agreed statement of facts which demonstrated beyond doubt that the s 264 transcript was given to the AFP and the CDPP and used by them in connection with the investigation of the alleged offences and the formulation of the charges. As he pointed out, if the disclosure or the use made of the s 264 transcript was not authorised, it would form the ground for an appeal against conviction. Thus, the question is not hypothetical. The fact that any conclusion may be based on a concession of law does not alter that fact. Any attempt to withdraw the concession would fall for consideration at the time an application for withdrawal is made.

The disclosures

1. The transcript of the s 264 examination and related material was disclosed to the AFP and the CDPP on a number of different occasions. Because the relevant legislation differed on the various dates the disclosures were made, it is convenient to summarise the position prior to considering that legislation.
2. The first disclosure (disclosure No 1) took place on 31 January 2007. On that date Mr Walton, an officer of the Criminal Investigation arm of the ATO, sent a minute requesting advice from the CDPP as to whether an investigation into the respondent was worth pursuing. It enclosed an electronic copy of the s 264 transcript.
3. The second disclosure (disclosure No 2) was a further disclosure by Mr Walton which took place on 15 October 2007. The disclosure was to the AFP as part of a formal referral for joint investigation into the respondent. It included references to the respondent's answers at the s 264 examination but did not include the transcript.
4. On or about 22 January 2009 the ATO drafted a file note to the AFP summarising the contents of eight folders intended to be provided to the AFP (disclosure No 3). The documents included the Report of Counsel, the ATO's Position Paper and the respondent's answers. The Report of Counsel was a report by counsel who examined the respondent at the s 264 examination, which, according to the agreed statement of facts, recorded the following matters: "35. The ATO received a 'Report of Counsel' in 2005 which: a. stated that the object of the section 264 examination was to determine whether the accused owned or controlled KCL or KPL [Kalomo]; b. stated that, prior to the section 264 examination of the accused and the section 264 examinations of the other individuals, the ATO had expressed the view to counsel that, among other things, the accused held his interest in various business ventures through KCL and KPL and that dealings between the accused and KCL / KPL were not at arms length; c. noted the ATO had briefed counsel with a draft position paper addressing the possibility of issuing amended assessments for the accused on the basis of information gathered from the examination of him and the examination of Messrs Holmes, Coe, Walldov, Thomas and Medway; and d. addressed issues which they considered would be key to the likely outcome of any hearing at which revised assessments were challenged by the accused, including extracting and analysing segments of the transcripts of the section 264 examination of the accused in relation to KCL." (Footnotes omitted.)

The relevant legislation

1. Section 264 of the ITAA 1936 was in the following terms at the time of the examination: "264 Commissioner may require information and evidence (1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority: (a) to furnish him with such information as he may require; and (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto."
2. Section 264 formed part of a suite of information-gathering powers conferred on the Commissioner. They included the requirement in s 161 and s 162 of ITAA 1936 that taxpayers furnish annual returns and provide other information requested by the Commissioner. Section 263 empowered the Commissioner to enter premises and to make extracts from or copy books, documents or papers of a taxpayer. Section 8C of the TAA made it an offence to fail to comply with requests under a taxation law, whilst s 8D made failure to answer questions when attending before the Commissioner an offence.
3. Section 8K of the TAA, as it existed at the time of the s 264 examination, made it an offence to make a false or misleading statement to a taxation officer, punishable pursuant to s 8M by a fine not exceeding $2,000 for a first offence and not exceeding $4,000 for a second or subsequent offence.
4. Section 8N provided for the offence of recklessly making a false or misleading statement to a taxation officer punishable by a fine not exceeding $3,000 for a first offence or in certain circumstances, a fine not exceeding $5,000 and/or imprisonment for a period not exceeding 12 months.
5. Section 8ZA provided that a taxation offence that was punishable by a term of imprisonment not exceeding 12 months was punishable on summary conviction.
6. In Commissioner of Taxation v De Vonk (1995) 61 FCR 564; [1995] FCA 994 ("De Vonk") the Full Court of the Federal Court of Australia held that the construction of s 264 of the ITAA 1936 combined with the terms of s 8C and s 8D of the TAA led to the conclusion that the privilege against self-incrimination had been abrogated in respect of s 264 examinations. That was not disputed on this appeal.

Were the disclosures made by the ATO lawful

1. A critical issue in the proceedings is whether the ATO was empowered to disclose the information to the AFP and the CDPP. The primary judge concluded following Leach that the exceptions to the secrecy provisions in the ITAA 1936 and the TAA were not such as to permit the disclosure of the s 264 transcript to the AFP and the CDPP (save perhaps for use in summary proceedings under s 8K or s 8N of the TAA). Her Honour's conclusion was summarised in the following paragraph of her judgment (Kinghorn (No 7) at [136]): "[136] There are further reasons for concluding that Leach cannot relevantly be distinguished from the present case. As is evident from the authorities, including Leach, the accusatorial principle and the companion rule apply whether a charge is laid before, or after, the compelled examination. Although the effect of the principles may not be evident until a charge is laid (as in IBAC), the accusatorial principle and companion rule plainly form part of the common law against which legislation is to be interpreted. Thus, as Leach established, the principles affect the construction of disclosure provisions in the taxation legislation. I do not regard the Crown's submission that the accusatorial principle and companion rule do not limit disclosure of compulsory examinations to investigators or prospective prosecutors as consistent with its concession that Leach was correctly decided." (Emphasis in original.)
2. Assuming that the accusatorial principle (namely, that the onus of proof rests at all times on the prosecution) and the companion rule (that the prosecution cannot compel an accused to assist it) applies to disclosure before charge, it is well established that the principle and the rule can be abrogated by express words or necessary intendment: X7 at [86]-[94], [124]-[125] per Hayne and Bell JJ, [160] per Kiefel J; Lee v New South Wales Crime Commission (2013) 251 CLR 196; [2013] HCA 39 ("Lee (2013)") at [3], [29]-[30] per French CJ, [126] per Crennan J, [176] per Kiefel J (dissenting), [313]-[314] per Gageler and Keane JJ; Lee (2014) at [31], [46]. Quite apart from the question of whether the companion rule has any operation to a pre-charge examination and disclosure, it is necessary to consider whether the relevant legislation in force at the time the disclosures were made abrogated these principles.

Disclosures Nos 1 and 2

1. The appellant relied on s 16(2A) of the ITAA 1936 in respect of the ATO's entitlement to make these disclosures. For reasons which are not entirely clear, whilst reliance was initially placed on s 3E of the TAA, that reliance was withdrawn in respect of these disclosures. Nevertheless, s 3E formed part of the legislative context which existed at the relevant time, and the relationship between s 16(2A) and that section needs to be considered. Although s 3G of the TAA was in existence at the time of disclosure No 2, it did not have any application to the respondent at that time as his matter had not been endorsed as a Project Wickenby matter. His matter was endorsed as a Project Wickenby matter on 26 February 2008.
2. Section 16 of the ITAA 1936 in force at the time of the first two disclosures was in the following terms: "16 Officers to observe secrecy (1) In this section, unless the contrary intention appears: Director of Public Prosecutions means a person holding office as, or acting as, the Director of Public Prosecutions under the Director of Public Prosecutions Act 1983. officer means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to income tax. … tax‑related offence means: (a) an offence against: (i) an Act of which the Commissioner has the general administration or regulations under such an Act; or (ii) the Crimes (Taxation Offences) Act 1980; or (b) an offence against the Crimes Act 1914 relating to a law referred to in paragraph (a). … (2) Subject to this section, an officer shall not either directly or indirectly, either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any information respecting the affairs of another person acquired by the officer as mentioned in the definition of officer in subsection (1). (2A) Subsection (2) does not apply to the extent that the person makes the record of the information, or divulges or communicates the information, in the performance of the person's duties as an officer."
3. Section 3E of the TAA in force at the time provided as follows: "3E Use of tax information by law enforcement agencies and eligible Royal Commissions etc. (1) Notwithstanding any taxation secrecy provision, the Commissioner may disclose information acquired by the Commissioner under the provisions of a tax law to an authorised law enforcement agency officer, or to an authorised Royal Commission officer, if the Commissioner is satisfied that the information is relevant to: (a) establishing whether a serious offence has been, or is being, committed; or (b) the making, or proposed or possible making, of a proceeds of crime order. (2) Where information is communicated to an officer under subsection (1) of this section or paragraph 3EA(3)(e), the officer must not divulge or communicate the information to another person, or make a record of the information. (2A) Subsection (2) does not apply to the extent that the information was divulged or communicated, or the record of the information was made, for, or in connection with: (a) the investigation of a serious offence; or (b) an investigation relating to the making, or proposed or possible making, of a proceeds of crime order. … (11) In this section: … serious offence means an offence against a law of the Commonwealth, of a State or of a Territory that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence). taxation secrecy provision means a provision of a tax law that prohibits the communication or divulging of information. tax law means: (a) a taxation law; (b) any other Act of which the Commissioner has the general administration; (c) a repealed Act of which the Commissioner had the general administration; or (d) regulations under an Act referred to in paragraph (b) or (c). tax‑related offence means: (a) an offence against: (i) a tax law; or (ii) the Crimes (Taxation Offences) Act 1980; (b) an offence against the Crimes Act 1914 or the Criminal Code relating to a law referred to in paragraph (a); or (c) an offence against section 134.1, 134.2, 135.1, 135.2 or 135.4 of the Criminal Code, being an offence that relates to a liability to the Commonwealth arising under, or by virtue of, a tax law."

The balance of the disclosures

1. Disclosures Nos 3 to 5, which included disclosure of the s 264 transcript and the Report of Counsel, took place during the currency of s 3G of the TAA. That section so far as relevant was in the following terms: "3G Providing taxation information to the Project Wickenby taskforce Disclosure of taxation information by the Commissioner (1) The Commissioner may disclose information acquired under a taxation law to a person to whom subsection (2) applies (a Project Wickenby officer) if: (a) the Commissioner is satisfied that the information is relevant to a purpose of the Project Wickenby taskforce; and (b) the disclosure occurs before 1 July 2012, or a later prescribed date. Project Wickenby officer (2) This subsection applies to a person: (a) who holds an office in, is employed in, or is performing services for: (i) an agency in the Project Wickenby taskforce; or (ii) an agency that is supporting the Project Wickenby taskforce; and (b) whose duties relate to a purpose of the Project Wickenby taskforce. Project Wickenby taskforce agencies (3) The following agencies are agencies in the Project Wickenby taskforce: (a) the Australian Taxation Office; … (c) the Australian Federal Police; … (e) the Office of the Director of Public Prosecutions; (f) a prescribed agency. … Purposes of Project Wickenby taskforce (5) The purposes of the Project Wickenby taskforce are to: (a) detect; and (b) deter; and (c) investigate; and (d) enforce the law relating to; The promotion of or participation in arrangements (within the meaning of the Income Tax Assessment Act 1997) of an international character, or purported international character, that relate to one or more of these: (e) tax avoidance or evasion; (f) breaches of laws regulating financial markets and corporations; (g) criminal activity in the nature of fraud or obtaining benefits by deception (including deceiving investors or creditors); (h) money laundering; (i) concealing income or assets. Offence - disclosure of taxation information by Project Wickenby officer (6) A person commits an offence if: (a) the person is or has been a Project Wickenby officer; and (b) the person: (i) makes a record of information about the affairs of a second person; or (ii) discloses to a third person information about the affairs of a second person; and (c) the information was disclosed to the person under this section. Penalty: Imprisonment for 2 years. (7) Subsection (6) does not apply if the person: (a) makes a record of the information for a purpose of the Project Wickenby taskforce; or (b) discloses the information: (i) to a Project Wickenby officer; and (ii) for a purpose of the Project Wickenby taskforce. Note: A defendant bears an evidential burden in relation to the matters in subsection (7): see subsection 13.3(3) of the Criminal Code. (8) Subsection (6) does not apply if: (a) a record of the information is made, or the information is disclosed to a person, for the purposes of, or in connection with: (i) an actual, proposed or possible criminal, civil or administrative proceeding; or (ii) the exercise of an administrative power or the performance of an administrative function; relating to a purpose of the Project Wickenby taskforce; or (b) the information is voluntarily communicated to a court or tribunal in the course of a proceeding of a kind referred to in subparagraph (a)(i). Note: A defendant bears an evidential burden in relation to the matters in subsection (8): see subsection 13.3(3) of the Criminal Code. (9) A person commits an offence if: (a) information is disclosed to the person in accordance with paragraph (8)(a); and (b) the person makes a record of the information, or discloses the information to another person. Penalty: Imprisonment for 2 years. (10) Subsection (9) does not apply to the person if a record of the information is made, or the information is disclosed to another person, for the purposes of, or in connection with, the proceeding or the exercise of the power or the performance of the function referred to in paragraph (8)(a). Note: A defendant bears an evidential burden in relation to the matters in subsection (10): see subsection 13.3(3) of the Criminal Code. … (12) This section: (a) has effect despite any provision of a taxation law that prohibits the communication or divulging of information; and (b) is in addition to, and does not detract from, any other provision of this Act or of any other law relating to the communication of information."

… 355-70 Exception - disclosure for law enforcement and related purposes (1) Section 355-25 does not apply if: (a) the entity is the Commissioner or a *taxation officer authorised by the Commissioner to make the record or disclosure; and (b) an item in the table in this subsection covers the making of the record or the disclosure … Records or disclosures for law enforcement and related purposes Item The record is made for or the disclosure is to … and the record or disclosure … is for the purposes of: (a) investigating a *serious offence; or 1 an *authorised law enforcement agency officer, or a court or tribunal (b) enforcing a law, the contravention of which is a serious offence; or (c) the making, or proposed or possible making of, a *proceeds of crime order; or (d) supporting or enforcing a proceeds of crime order. … 3 a *Project Wickenby officer, or a court or tribunal (a) is for or in connection with a *purpose of the Project Wickenby taskforce; and (b) is made before 1 July 2015, or a later prescribed day. …

… Meaning of various terms … (3) Authorised law enforcement agency officer means: (a) the head of a *law enforcement agency; or (b) an officer of a law enforcement agency, or a person engaged by, or otherwise performing services for, a law enforcement agency, authorised in writing by the head of the agency to perform the functions of an authorised law enforcement agency officer under this Act. (4) Law enforcement agency means: (a) the Australian Federal Police; or … (c) the Office of the Director of Public Prosecutions established by section 5 of the Director of Public Prosecutions Act 1983; … … (6) An entity is a Project Wickenby officer if the entity: (a) holds an office in, is employed in, or is performing services for: (i) a *Project Wickenby taskforce agency; or (ii) a *Project Wickenby taskforce supporting agency; and (b) performs duties that relate to a *purpose of the Project Wickenby taskforce. (7) The following agencies are Project Wickenby taskforce agencies: (a) the Australian Taxation Office; … (c) the Australian Federal Police; … (e) the Office of the Director of Public Prosecutions; (f) a prescribed agency. … (9) The purposes of the Project Wickenby taskforce are to: (a) detect; and (b) deter; and (c) investigate; and (d) enforce the law relating to; the promotion of or participation in *arrangements of an international character, or purported international character, that relate to one or more of the following: (e) tax avoidance or evasion; (f) breaches of laws regulating financial markets and corporations; (g) criminal activity in the nature of fraud or obtaining benefits by deception (including deceiving investors or creditors); (h) money laundering; (i) concealing income or assets. (10) Serious offence means an offence against an *Australian law that is punishable by imprisonment for a period exceeding 12 months. … 355-175 Exception - on‑disclosure for original purpose (1) Section 355-155 does not apply if: (a) the information was originally disclosed under an exception in Subdivision 355-B for a purpose specified in that exception (the original purpose); and (b) the information was acquired by the entity under this section or an exception in Subdivision 355-B; and (c) the record or disclosure is made by the entity for the original purpose, or in connection with the original purpose. Note: A defendant bears an evidential burden in relation to the matters in this subsection: see subsection 13.3(3) of the Criminal Code." Subdivision 355-B is in that part of the Division which contains s 355-70.

The primary judgment

1. We have set out the ultimate conclusion of the primary judge at [40] above. Her Honour in reaching that conclusion reviewed a number of authorities concerning the dissemination of compulsorily acquired material. In relation to X7, her Honour noted at [63] that it involved a proposed examination after X7 had been arrested and charged with criminal offences. The primary judge referred to what was stated by Hayne and Bell JJ that if an alteration to the accusatorial nature of the criminal justice system of that kind is to be made by statute, it must be done by express words or necessary implication: X7 at [125]. At [76], her Honour also referred to what was said by the Court in Lee (2014) at [51] that there was no legislative authority for the alteration in the respective positions of the prosecution and the accused which had been caused in that case by the prosecutor's access to the accused's evidence before the Commission. The relevance of those conclusions in the present case must be considered in light of the provisions of s 3G, s 355-70 and s 355-175.
2. Her Honour also referred to the decisions of this Court in R v OC (2015) 90 NSWLR 134; [2015] NSWCCA 212 and Macdonald v R; Maitland v R (2016) 93 NSWLR 736; [2016] NSWCCA 306, which she described as examples of where Parliament was found to have abrogated the accusatorial principle by express words or necessary implication. Her Honour stated (at [80]) that it was not suggested that there was any provision in the ITAA or TAA which was similar to the provisions considered in R v OC. The primary judge did not indicate why s 3G, s 355-70 or s 355-175 did not fall into this category.
3. Her Honour also referred to R v Independent Broad-based Anti-corruption Commissioner (2016) 256 CLR 459; [2016] HCA 8 ("IBAC"). Her Honour made the following comments in respect of that case: "[83] The High Court held that the Independent Broad-based Anti-corruption Act 2011 (Vic) (the IBAC Act) authorised the examinations, that the accusatorial principle and companion rule were not engaged because there was no prosecution pending and that the IBAC Act had abrogated the privilege against self-incrimination with the effect that R and M were obliged to answer the questions put to them. [84] It is important to note that the Court in IBAC was not required to address the use of information obtained in the course of the compulsory examinations before the examinees were charged. Further, as in X7, in IBAC there was a provision in the IBAC Act, s 144(2), which conferred limited use immunity by providing that any answer that might tend to incriminate the examinee was not admissible in evidence against the examinee in court except in proceedings for perjury or giving false information, an offence under the IBAC Act or a disciplinary process or action: IBAC at [26]."

a. The Crown and the Solicitor-General for the Commonwealth

1. The Crown in its submissions identified the question in issue as whether the provisions of s 16(2A) of the ITAA 1936 and s 3G and s 355-70 of the TAA authorised the disclosure of the s 264 transcript or whether such disclosure was limited by reference to the accusatorial principle and the companion rule. Senior counsel for the Crown in submitting there was no such limitation in s 16(2A) referred to Yates and what was said by this Court in Kinghorn (2020) in the passage which we have referred to at [51] above.
2. In dealing with the accusatorial principle and the companion rule, senior counsel for the Crown submitted that X7 and Lee (2013) arose in a different context than the present case, namely, examination post-charge. He submitted that a different conclusion was reached in each of those cases because of the differing legislative regimes. He also contrasted the present case with Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; [2018] HCA 53 ("Strickland"), which involved an unlawful examination. Senior counsel for the Crown submitted that the accusatorial principle and the companion rule were engaged when the person the subject of the compulsory examination had been charged. He submitted that proposition was supported by the decision of the High Court in IBAC.
3. IBAC involved a public examination of police officers alleged to have assaulted a woman at a police station. The officers had not been charged although they had been suspended on the basis that it was reasonably likely that they had assaulted the woman. It was contended that the relevant legislation (the Independent Broad-based Anti-corruption Commission Act 2011 (Vic) (the IBAC Act)) on its true construction did not authorise an examination which might incriminate the examinee. That argument was rejected.
4. Senior counsel for the Crown referred to the statement by the plurality at [43] in IBAC that the companion rule is an adjunct to the rights of an accused person within the system of criminal justice. He also referred to the conclusion at [48] that the companion rule was not there engaged because the appellants had not been charged and there was no prosecution pending.
5. Senior counsel for the Crown submitted that subject to legislative control, use could be made of any material obtained pre-charge, provided the power by which such information was obtained was exercised for a proper purpose. He also referred to what was said by the plurality at [51] in IBAC that to apply the companion rule in anticipation of the commencement of criminal proceedings would fetter the pursuit and exposure of a lack of probity within the police force, which was stated to be an object of the IBAC Act. He also submitted that that submission was supported by two decisions of the Western Australian Court of Appeal subsequent to IBAC which were not referred to in Leach or by the primary judge: A v Maughan (2016) 50 WAR 263; [2016] WASCA 128 ("Maughan"); Zanon v Western Australia (2016) 50 WAR 1; [2016] WASCA 91 ("Zanon").

b. The respondent

1. Although senior counsel for the respondent accepted that it was necessary to deal with the construction issue prior to dealing with the constitutional argument, he submitted that his argument on the construction issue had what could be described as a constitutional underpinning. Thus, he stated at the outset of his submissions that this case presented for the first time the question of whether the accusatorial principle and its companion rule are part and parcel of the administration of justice insofar as crime is concerned, so as "to deny the capacity for legislative effect or alteration or modification of aspects of criminal justice trespassing beyond a relevant line".
2. He accepted that there had been some amendments to a traditional trial by, for example, reversal of the onus of proof or ease of proof by averment, but submitted that in every case it was a question of whether upon a proper scrutiny of the legislation it has gone further than the administration of justice properly understood in constitutional terms can allow. He referred in that context to the different outcomes in South Australia v Totani (2010) 242 CLR 1; [2010] HCA 39 and Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7, each of which depended on the construction of the challenged legislation.
3. Senior counsel for the respondent submitted that in considering the present case it was necessary to take into account that s 264 was not a provision which expressly abrogated the privilege against self-incrimination, nor as a consequence were there any protections against direct or derivative use of incriminating material obtained. He stated that this was not a case where there was illegality or unlawfulness constituted by a contravention of either a direction given by the person supervising the examination or by a general statutory provision applying to all such examinations.
4. He submitted the constitutional principle was that to the extent that provisions such as s 16(2A) of the ITAA 1936 and s 3G of the TAA purport to permit the tender and use of the s 264 transcript in criminal proceedings, they are beyond the power of the Parliament because they thereby detract materially from the nature of a proposed trial as a trial within the meaning of s 80 of the Constitution, pursuant to the exercise of judicial power by a court.

Consideration

1. There are a number of matters which should be noted at the outset.
2. First, the respondent did not seek to challenge the now well-established proposition that the privilege against self-incrimination was abrogated by necessary implication by s 264 of the ITAA 1936. The respondent did not call into question this aspect of the decisions of the Full Court of the Federal Court of Australia in De Vonk (Foster, Hill and Lindgren JJ) or Binetter v Deputy Commissioner of Taxation (2012) 206 FCR 37; [2012] FCAFC 126, where Edmonds, Perram and Jagot JJ expressly affirmed and followed De Vonk at [30].
3. Second, the respondent did not challenge the lawfulness of his s 264 examination in this case. Although the respondent has reserved his right to argue in some future application that the s 264 examination was conducted for an improper purpose, these separate questions proceeded on the basis that the s 264 examination was lawfully conducted.
4. Third, the decision in Leach is inconsistent with what was said by this Court in Yates in the passage to which we have referred at [51] above and with what was said by this Court in Kinghorn (2020) at [98] (see at [54] above). It is also inconsistent with the decisions of the Court of Appeal of Western Australia in Maughan and Zanon (as to which, see below). In these circumstances, where there are differing decisions on the issue by various intermediate appellate courts, the Court is not constrained by the principles laid down in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 and Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 to follow Leach unless convinced it is plainly wrong.
5. Fourth, it must be borne in mind that the legislative provision considered in Leach was s 355-50 of Sch 1 to the TAA. That section, whilst cast in general terms in a manner similar to s 16(2A), sets out in tabular form a number of items in respect of which disclosure is permitted. They include disclosure to any entity, court or tribunal for the purpose of criminal, civil or administrative proceedings that are related to a taxation law. Taxation laws are defined in s 995-1(1) of the Income Tax Assessment Act 1997 (Cth) in the following terms: "'taxation law' means: (a) an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or (b) legislative instruments made under such an Act (including such a part of an Act); or (c) the Tax Agent Services Act 2009 or regulations made under that Act."

The construction of s 3G

1. The ATO disclosed all the material complained of during the currency of s 3G or s 355-70. The material disclosed prior to that time (disclosure Nos 1 and 2) formed part of the material which was subsequently disclosed. Thus s 3G of the TAA is critical to this issue.
2. The Explanatory Memorandum to the Bill which led to the introduction of s 3G, the Tax Laws Amendment (2007 Measures No. 1) Bill 2007 (Cth), referred to Project Wickenby and explained the introduction of s 3G in that context: "1.1 Schedule 1 to this Bill amends the secrecy and disclosure provisions in the Taxation Administration Act 1953 (TAA 1953) to allow the Commissioner of Taxation (Commissioner) to disclose taxpayer information to Project Wickenby taskforce officers and officers in other taskforces that may be established in the future to protect the public finances of Australia. Project Wickenby is a multi-agency taskforce addressing alleged tax avoidance and evasion involving the use of offshore entities. 1.2 These amendments allow the Commissioner to share information with other government agencies in limited circumstances, in order to facilitate concerted enforcement of Australia's laws. … 1.9 The Project Wickenby taskforce is a multi-agency taskforce investigating internationally promoted arrangements allegedly involving tax avoidance or evasion, which may also entail other features such as large-scale money-laundering, fraud, or breaches of the law relating to the regulation of financial markets or corporations. 1.10 Current tax secrecy and disclosure legislation impedes the ability of the taskforce to function effectively. These amendments will help agencies involved in the Project Wickenby taskforce to better share information to foster concerted law enforcement and to promote the integrity of the Australian taxation system. Individuals and other entities who seek to avoid or evade tax using international arrangements commonly commit offences against laws other than taxation laws. Where the facts that form the basis of a prosecution unrelated to tax also constitute essential steps in the implementation of a tax avoidance or evasion scheme, prosecution of the non-tax offences can be seen to discourage the tax scheme. 1.11 These amendments therefore allow the Commissioner to disclose information to Project Wickenby officers for purposes related to the Project Wickenby taskforce. Project Wickenby officers can use that information pursuant to those purposes, including for the prosecution of offences unrelated to tax and for other criminal, civil and administrative actions. … 1.13 The new law allows the Commissioner to disclose information acquired under a taxation law to officers of Project Wickenby taskforce agencies for any purpose relevant to the taskforce, including investigating possible contraventions of the law and determining appropriate actions and remedies."

The crystallisation argument

1. As the Solicitor-General for the Commonwealth pointed out, this argument assumes that the initial disclosure was lawful but that no further use could be made of the material once the charges were laid. We are unable to accept this proposition for the following reasons.
2. First, if as this argument assumes the initial disclosure was lawful, then it will be necessary to find a legislative constraint on use to be made post-charge. There is nothing in the legislation which suggests such a limitation. Indeed, it is contrary to s 3G(5) which stated that the purposes of the Project Wickenby taskforce included enforcement of law relating to financial crimes. Section 355-70 Sch 1 is to the same effect.
3. Second, if the respondent's crystallisation argument were correct, this would result in the improbable consequence that dissemination and use of material acquired in a compulsory examination could only take place in circumstances where the examinee could not thereafter be prosecuted in connection with that material. Investigating and prosecuting authorities would be prohibited from any continued use of information which they lawfully possessed and by which they lawfully investigated and formulated the criminal charges, upon the laying of those same charges. Such a result would undermine the very purpose of the statutory information-gathering powers.
4. The High Court has previously recognised that coercive powers are commonly conferred for the purpose of determining whether proceedings should be instituted: Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333; [1912] HCA 69; Huddart Parker & Co Pty Ltd v Moorehead (1908) 8 CLR 330; [1909] HCA 36 ("Huddart Parker v Moorehead"). It is for that reason that such coercive powers are commonly construed as being exhausted upon the laying of charges, since their purpose is spent at the point when those charges are laid. As stated by Brennan J in Caltex at 516-517, quoted by Gageler and Keane JJ in Lee (2013) at [325]: "When an investigative power to require the giving of information is conferred by statute, the power will ordinarily be construed as exhausted when criminal proceedings to which the information relates have been commenced and are pending. That is because the power is understood to be conferred for the purpose of the performance of the administrative function of determining whether proceedings should be instituted." (Footnote omitted.)

The constitutional argument

1. On the assumption that the accusatorial principle and the companion rule were engaged, neither is constitutionally entrenched so as to invalidate any legislative provision said to be in breach of either the principle or the rule. The High Court has repeatedly described the accusatorial principle and companion rule as common law principles that are subject to statutory modification: see X7 at [123]-[125]; Lee (2013) at [3], [126], [313]; Lee (2014) at [32], [51]; IBAC at [28], [48]; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 at [36]; Helicopter Resources at [22].
2. Nor does Hammond lend any support to the proposition that fair trial values are constitutionally entrenched. In the passages which we have cited at [38] above, it was made clear that the injunction restraining the post-charge examination was granted on the basis that the examination would be an interference with the administration of justice amounting to a contempt of court. The grant of the injunction did not rest on any constitutional principle. That was made clear in Sorby v The Commonwealth (1983) 152 CLR 281; [1983] HCA 10, decided some six months after Hammond. In that case Gibbs CJ at 298 stated that the privilege against self-incrimination is not protected by the Constitution, and like other rights and privileges of equal importance, may be taken away by legislative action: see also Mason, Wilson and Dawson JJ at 309.
3. Acceptance of the proposition that fair trial values are constitutionally entrenched would erect a constitutional rule in an area that has been accepted as appropriate for legislative judgment. The respondent's contention that the accusatorial principle and companion rule are necessary features of the exercise of judicial power under Ch III and of a trial under s 80 of the Constitution, effectively converts the principle and rule into a constitutionally entrenched protection or immunity. Having regard to the authorities to which we have referred above, it would be quite inappropriate for an intermediate Court of Appeal to hold that these principles are constitutionally entrenched.
4. Finally, it is clear that s 80 of the Constitution does not invalidate the impugned provisions. In Huddart Parker v Moorehead the High Court rejected the contention that the conduct of a compulsory examination infringed the right to trial by jury in s 80 of the Constitution, even though the examination occurred after the examiner had formed the opinion that the examinee had committed an indictable offence. The function of the jury as the tribunal of fact, and the structural role of s 80 in mandating trial by jury, are unaffected by any of the impugned provisions.

Conclusion and orders

1. It follows that we respectfully disagree with the answers given to the separate questions by the primary judge.
2. For the foregoing reasons we propose the following orders: 1. Appeal allowed; 2. Set aside the answers given by Adamson J on 23 October 2020 to the separate questions for determination and substitute the following: The Leach question Question: Does the law as applied in R v Leach [2019] 1 Qd R 459, concerning the accusatorial principle, the companion rule and the application of those principles to answers compelled under taxation legislation, have the effect that investigative authorities and prosecuting authorities should not have disseminated and/or should not have had access to and/or should not have used the content of the accused's compulsory examination under s 264 of the Income Tax Assessment Act 1936 (Cth), where the prosecution of the accused for offences contrary to s 135.1(7) of the Commonwealth Criminal Code may possibly occur or will occur and where the offences allegedly involve a course of conduct that included false or misleading statements made during the s 264 examination? Answer: The accusatorial principle, the companion rule and the application of those principles to answers compelled under taxation legislation, do not have the effect that investigative authorities and prosecuting authorities should not have disseminated and/or should not have had access to and/or should not have used the content of the accused's compulsory examination under s 264 of the Income Tax Assessment Act 1936 (Cth), where the prosecution of the accused for offences contrary to s 135.1(7) of the Commonwealth Criminal Code may possibly occur or will occur and where the offences allegedly involve a course of conduct that included false or misleading statements made during the s 264 examination. The evidence questions Question: In respect of use by the prosecutor, is the content of the s 264 examination admissible in the trial of the accused? Answer: Yes. Question: If so, what are the limits on its use? Answer: To prove the fact that the representations particularised as made during the examination pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) were made by the accused (and the terms of those representations).
3. BELL P: I agree with Bathurst CJ and Payne JA.
4. WARD CJ in EQ: I agree with Bathurst CJ and Payne JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 December 2021