Ross, A.M. & Anor v Costigan, F.X. [1982] FCA 57

Federal Court of Australia|1982-04-19|Before: Ellicott J

Administrative Law - Order of Review - Interlocutory Relief - Royal Commission under Commonwealth and Victorian Letters Patent into conduct by Federated Ship and Painters and Dockers Union - Disposition of shares as part of tax minimisation transaction - Possible involvement therein

of union members - Inquiry by Royal Commission into minimisation transaction concerning applicant Heap - Whether consideration thereof relevant to inquiry by

Royal Commission under Commonwealth Letters Patent - Whether decisions to issue summonses and inquire of an administrative character - Whether made under an enactment - Whether decisions to which the Act applies or conduct engaged in or proposed to be engaged in for the purpose of making such a decision - Whether terms of reference of Commonwealth Letters Patent beyond constitutional power.

Administrative Decisions (Judicial Review) Act, 1977 sa. 5, 6, 3.

Commonwealth Constitution, ss. 51(1), 51(xxxix), 51 (xxxv)

Companies Act, 1961 (N.S.W.) s.67 Judiciary Act, 1903 s.78B

ALAN MAXWELL ROSS, JOHN STAFFORD HEAP v. FRANCIS XAVIER COSTIGAN No. G.30 of 1982

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ) No. G30 of 1982 GENERAL DIVISION

AND: FRANCIS XAVIER COSTIGAN and THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA

JUDGE MAKING ORDER: Ellicott J. WHERE MADE: Sydney DATE: 19 April 1982 THE COURT ORDERS THAT:

be dismissed. 2. The applicants pay the costs of the

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. G30 of 1982

AND: FRANCIS XAVIER COSTIGAN and THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA

This is an application for interlocutory relief in proceedings brought by Alan Maxwell Ross and John Stafford Heap ("the applicants") under the Administrative Decisions (Judicial Review) Act 1977 ("the Act") against Francis Xavier Costigan ("the respondent") in which they seek an order of review of decisions alleged to have been made and conduct alleged to have been engaged

ian by the respondent as Royal Commissioner appointed by the

Commonwealth to enquire into certain conduct by the Federated Ship

Painters and Dockers Union ("the Union"). The Commonwealth

On 1 October 1980 another Royal Commission appointing

the respondent as Commissioner and relating to the Union was

The scope of these two commissions differ and I shall

The respondent has been conducting inquiries pursuant to the respective Letters Patent since October 1980. In the course of those inquiries questions have been asked under oath concerning transactions entered into by the applicant, John Stafford Heap and others relating to the disposition of shares in certain asociated companies in relation to which transactions he was advised by the applicant, Alan Maxwell Ross. Counsel assisting the Commission indicated that he proposed to question witnesses with a view to ascertaining whether either of the applicants by engaging in these transactions had been party to a breach or involved in a criminal conspiracy to breach s.67 of the Companies Act 1961 (N.S.W.). Counsel also indicated an intention in due course (no doubt if he thought the evidence warranted it) to submit that the Commissioner

should recommend to government that these persons be prosecuted.

The applicants claim that the respondent as Royal Commissioner under the Commonwealth Letters Patent, following a ruling given by him on 4 March last, intends to inquire into these matters and to issue summonses to witnesses for the purpose and

that, pursuant to the Act, they are entitled to orders directing

that he not do so. They claim that to the extent relied on for the purpose of making the inquiries the Commonwealth Letters Patent are invalid not being supported by Commonwealth power and that even if valid they do not authorise the respondent to conduct the inquiry. Because the case to some extent could involve matters arising under the Constitution or anvolving its interpretation notice was given under s.78B of the Judiciary Act 1903 to both the Attorney-General of the Commonwealth and the Attorney-General of New South Wales. The latter appeared through the State Crown Solicitor and indicated he did not wish to add anything to what would be put on behalf of the Attorney-General of the Commonwealth. Counsel for the respondent appeared as well for

Being interlocutory in character, the applicants are required to make out a prima facie case in the sense that if the evidence remains as it is there is a probability that at the trial of the action the applicants will be entitled to relief. (See

World Cricket v. Parish (1977) 16 A.L.R. 181 per Bowen C.J. at

The facts which are critical to the determination of

this interlocutory application are not, in my view, seriously in dispute nor, so far as I am aware, is it likely that there will be

serious dispute as to them if the matter goes to a final hearing.

The applicant, Mr Ross, is an accountant who at all relevant times acted for the applicant, Mr Heap, and for companies associated with him. In February 1979 the shares in two companies associated with Mr Heap, namely, J.S. Heap Pty. Limited and Culloden (No. 1) Pty. Limited were sold by him and the other shareholder to a company, Camper Timber and Trading Pty. Limited. The sale of the shares 1s said to have followed the form of the transactions referred to in Slutzkin v. Federal Commissioner of Taxation ((1977) 140 C.L.R. 314). The agreements for sale dated

Evidence has already been given before the respondent regarding the transactions, the effect of which is that the sale of the shares was implemented consequent upon the advice of senior counsel, that the agreements for the sale of the shares contained a warranty by the purchasers that the provision of s.67 of the Companies Act would be observed, that it was a condition of the sale that the purchase price was to be provided at settlement in

the form of bank cheques drawn upon the purchaser's bank and that

this bank was a different bank from that at which the accounts of

the two companies were maintained and that the applicants had no

knowledge of any event that occurred after settlement of the sale of the shares concerning the disposition of the funds of the

No evidence to the contrary has yet been given before the respondent, nor has it yet been disputed by counsel assisting the respondent. The applicant, Mr Ross, has confirmed in evidence before me that neither he nor Mr Heap has or has had any connection with Ward Knight & Dunn Limited (a company with which Camper Timber and Trading Pty. Limited is associated), nor has he ever made any payment to Camper Timber and Trading Pty. Limited,

Ward Knight & Dunn Limited or any member or official of the Union.

Mr Ross has given evidence on affidavit as to the steps taken to implement the transaction involving the sale of the shares in Culloden (No. 1) Pty. Limited and J.S. Heap Pty. Limited. I shall not set them out in detail. It 1s sufficient to say that they took place on 2 February 1979. He affirmed that in acting for the applicant Mr Heap and the other shareholder he dealt with, either Mr Ward or Mr Knight of Ward, Knight & Dunn, and had no contact with nor did he meet any of the directors or shareholders of Camper Timber and Trading Pty. Limited. Neither he nor Mr Heap has met or knows the persons who have been directors of that lastmentioned company since 1978, one of whom

Counsel assisting the Commission has not yet contended

that either of the applicants has had any connection whatever with the Union or any member thereof or has ever made any payments to

any member or official of the Union or of the Union itself.

Suggested Union connections with these and similar transactions

The Union was established in 1900. It covers employees an ship building and ship repair in shipyards slipways and

shipping companies. Two of the biggest work locations at which

members have been employed are the naval dockyards at

Williamstown, Victoria, and Garden Isiand, New South Wales.

At an early stage the respondent began investigating a

company called Macbell Minerals Pty. Limited which became interested 1n obtaining contracts to supply lagging (that is the provision and fitting of insulation around pipes and boilers) to the naval dockyard at Williamstown. Evidence already before the Commission appears to establish that the membership and board of that company was changed in 1976, that most of the new members and directors were members of the Union or closely associated with it, that some of them had criminal records, that although it had no prior involvement in lagging it made determined attempts to secure the contract at Williamstown, that the Union gave strong support to these attempts and that it apparently did not seek to obtain

In the course of inspecting the office of Guy Keith Campbell, a director of Macbell Minerals Pty. Limited, documents were found relating to the company, Camper Timber and Trading Pty. Limited and the Commission then began investigating its activities. To date documents tendered and evidence given have revealed in relation to this company that in 1978 there were changes in its membership and board, that thereafter the directors included Campbell, Durston, Tariszynos/Sterling as well as a man called Alfred William John Johansen who was also a director of Macbell and a member of the Union, that, although its returns as filed show no assets or liabilities, approximately $9M passed through its bank accounts between September 1978 and June 1979 and that Ward, Knight and Dunn Pty. Limited acted for it in a number

Evidence has been placed before the Commission by Counsel assisting with a view to establishing that approximately $1.5M of the $9M was money which came to Camper Timber and Trading Pty. Limited through transactions which were effected on 2 February 1979 involving the payment of amounts totalling that sum by J.S. Heap Pty. Limited and Culloden (No. 1) Pty. Limited to Pliton Finance Pty. Limited and the payment of that sum by Pliton Finance Pty. Limited to Camper Timber and Trading Pty. Limited. It is also suggested by counsel assisting that the balance of the S$9M came from other tax minimisation schemes arranged by Ward Knight and Dunn Pty. Limited in which Camper Trading and Timber

On 27 October and 25 November 1981 summonses were issued

by the respondent pursuant to s.2 of the Royal Commissions Act 1902 (Commonwealth) requiring the applicant, Mr Heap, to attend to

He subsequently gave evidence before the respondent in the course of which he indicated he relied heavily on the advice of his accountant, the first applicant, Mr Ross. Counsel for Mr Heap then offered to ask the applicant, Mr Ross, to give evidence about the transaction involving Mr Heap and Camper Timber and Trading Pty. Limited and later the applicant, Mr Ross, came before

the Commission and gave evidence. The evidence which has been

given before the Commission establishes that Ward, Knight & Dunn Pty. Limited acted for Camper Timber and Trading Pty. Limited in relation to various so-called tax minimisation schemes of which

Tax minimisation schemes involving painters and dockers

In an interim report (No. 3) under his Commonwealth Commission dated 18 December 1981, the respondent referred to the involvement of the Union in relation to tax minimisation schemes,

particularly those falling within Slutzkin's Case. Paragraphs

Following Slutzkin it seems that many contrived situations have come into existence. Evidence before the Commission indicates that the ability to contrive such situations attracted the attention of antelligent but less than honest members of the community and that they relied upon the services of ship painters and dockers to give effect to their schemes. I will return to the role of the painters and dockers a little later in this report. A scheme was devised which gained superficial support from the decision in Slutzkin's case but which I preferred to describe in public session of the Commission as fraudulent. The substance of the scheme can be described shortly. Two companies are brought into existence (or shelf companies acquired) to facilitate the scheme's execution: one is a finance company, the other is a purchasing company. Agreements are made between the purchasing company and the shareholders of the target company (i.e. the company which has income in its hands) whereby the shares are sold for a percentage (say 90 percent) of the income generated by the target company. If the income is, for example, $1,000,000 then the shares are sold for $900,000. Settlement takes place with all parties including bank managers being present. The directors of the target company (being either the shareholders in it or their representatives) on receipt of the bank cheque being the purchase price of the shares immediately change the bank authority of the target company so that such bank account can be at once operated by the agent of the purchasing company. That agent then causes the target company to transfer $1 million to the finance company which in turn transfers the same $1 million to the purchasing company. That company then applies $900,000 to purchase bank cheques to be handed over to the original shareholders in exchange for their shares and the remaining $100,000 is paid to the promoters of the scheme. All relevant shares are transferred. The entire transaction is completed within minutes.

In the result the target company is left with its income of $1 million but now has no assets save for the 'loan' due to it by the finance company. It has new shareholders and directors, both of whom are closely connected with the directors and shareholders of the finance company. The 'loan' is not repaid and in fact

the finance company 1s sold to another company. This company fails to submit annual returns and

other returns required by the Companies Act. Notices are sent out by the Corporate Affairs office. There is no compliance with these notices save for the response that the directors

address'. This information should cause no surprise. The names are false. The addresses are false. In at least one significant company the directors are painters and dockers. In due

course the Corporate Affairs office loses patience and the finance company is struck off. The 'loan' to the original target company remains unpaid. The company records- disappear.

The device adopted by the promoters of these schemes bears no resemblance to the facts presented to the Court in Slutzkin's case. It 1s a deliberate attempt by the promoters to avoid the payment of tax by the use of fraudulent, illegal and dishonest techniques. The techniques are illegal in that they are based upon a clear breach of section 67 of the Companies Act. They are dishonest in that the transfers of money described in the books of account as 'loans' were never intended to be repaid. Moreover there was the destruction or disappearance of company records, deliberate transgression of the requirements of the Companies Act in relation to returns coupled with the obvious intention to have the companies struck off the Register of Companies and thus make more difficult action by the Commissioner of Taxation. The ultimate sale of companies to fresh companies which had as their directors painters and dockers with false names and false addresses is further evidence of the clear intention to eliminate their activities from any official scrutiny. Fortunately the investigative techniques employed by the Commission have enabled it to attack these activities from an unsuspected direction and to lay bare what it was undoubtedly hoped would never see the light of day.

The statement by counsel assisting the Commission that he was considering submitting that there had been a conspiracy to breach s.67 of the Companies Act was made on 17 February 1982 and on the following day counsel for the applicants submitted that an inquiry by the Commissioner into whether the applicants had breached or been a party to a breach of s.67 was beyond his terms of reference and that he should neither so enquire or make any recommendations relating to the prosecution of the applicants. The statement on 17 February was, apparently, the first indication by counsel assisting of an intention to suggest that the

applicants had been involved in a conspiracy to breach s.67.

Following these submissions the respondent, on 4 March 1982, handed down a ruling rejecting the submissions and stating that he would allow the evidence to be adduced. It as not necessary for me to set out the ruling at length but in the course of it the Commissioner referred to the fact that a number of painters and dockers had been used as directors of companies which were an integral part of the Slutzkin type schemes and that in order properly to understand their involvement it had been necessary for him to consider the detail of the arrangements surrounding these schemes and to follow their implementation step by step. He set out a number of questions in which this had been involved including ~- How was the taxpayer (or his accountant

and/or lawyer) introduced to the scheme?; Did the taxpayer know

of the involvement of painters and dockers in the scheme?; Was he

aware of the fact that the scheme involved one or more

illegalities? Such questions were directed, he said, to the basic inquiry as to whether painters and dockers were involved in these

Having referred to the terms of reference of the two Commissions, he pointed out that the debate on the submissions had

proceeded on the basis that he should have regard to the terms of both and demonstrated that the width of his task by reference to the Victorian Commission which he said required him to ascertain whether any member of the Union had engaged in any illegal

He rejected the submission requiring him to limit his

"In so far as the evidence before me discloses an involvement by painters and dockers in tax minimisation schemes and illegalities associated with them (including breaches of the Companies Acts Of various States and the Income Tax Assessment Act) it is incumbent upon me to understand as fully as possible the ramifications of such schemes (and possible illegalities) so that I can direct my mind to the way in which the Union may have been used for such purposes, and whether, and by whom, any payments have been made to members of the Union. In an inquiry of this kind it 1s impossible to lay down in advance the limits of investigation. And yet this 1s what the submission made to me would require me to do. Is not one view of the evidence that the payment made to a painter and docker company director came to him (at least indirectly) from a taxpayer? At the very least am I not bound to iunquire into this matter? If the evidence should disclose that a taxpayer either knew or ought to have known that his tax was being minimised by the use of painters and dockers as company directors, am

I not obliged to inquire as to whether this falls within the concept of 'use of the union for illegal activities'? I am not making any findings on these matters at this stage and will not until the evidence is complete and submissions have been advanced on that evidence by those who wish to make them. But it is not possible to limit my inquiries into these areas by

producing a conclusion mid-way through those inquiries." As to the submission that he should not make any

recommendation on these matters he rejected this too and in the

"My task is quite different. It is to inquire into muititudinous factual situations so as to discover the truth. For this purpose I am granted under my

Commission 'full power and authority to call before me such person or persons as I shall judge likely to afford me any information upon the subject of my Commission.' When I have collected all such information I would expect to hear submissions from Counsel assisting me and from Counsel appearing for other parties as to the conclusions I should come to in my report. If the evidence then before me raises for example a question of criminal conspiracy I would expect to hear submissions from all inrterested parties as to whether I should draw that conclusion. If the conclusion is based on evidence admissible in a Court of law sufficient to place such persons on trial for that offence, 1t 1s my view that I would be required under my Commission to recommend the appropriate action."

The Commonwealth Letters Patent in their terms are issued "in pursuance of the Constitution......the Royal

Commissions Act 1902 and other enabling powers." The Commissioner

"To inquire for the purpose of the exercise and performance of the powers and functions of the Parliament and Government of the Commonwealth whether

the Federated Ship Painters and Dockers Union (hereinafter referred to as 'the Union') or any officer or member of the Union is engaged in illegal activities

in relation to Shipping engaged in trade and commerce between Australia and places outside Australia or among the States or ships operated by, or on behalf of, the Commonwealth or in relation to any naval establishment within the meaning of the Naval Defence Act 1910;

AND without restricting the scope of your inquiry, we direct you, for the purpose of your inquiry, to give particular attention to the following questions:- -

(a) whether any executive administrative or other body forming part of, or established by the Union, has been used, or is being used, for the purposes of illegal activities, other than activities involving only breaches of laws, whether of the Commonwealth or a State relating to trade unions."

There then followfurther paragraphs which also set out

specific matters which are to be the subject of inquiry.

The Victorian Commission is wider in terms and directs

"Whether (the Union) or any officer or member of the Union in the course of or in relation to the affairs of the Union has engaged in any illegal activities (other than activities involving only breaches of law whether of the Commonwealth or a State relating to trade unions).

And without restricting the scope of your inquiry, we direct you, for the purpose of your inquiry, to give particular attention to the following questions:-

There then follow, as 1n the Commonwealth Commission, a series of lettered paragraphs referring to specific matters which

On 1 April 1982 the Commonwealth Letters Patent were

"so as to require that, to the extent that you are not required to do so by those Letters Patent, you inquire -

(a) whether the Union or any officers or members of the Union have engaged in illegal activities, other than activities in relation to shipping or any naval establishment;

(b) whether any person, group of persons or body established by, or associated with, the Union or its members is engaged 1n illegal activities; and

AND WE DECLARE that, for the purposes of these Our Letters Patent, 'illegal activities' means:-

(d) activities involving any breach of a law of the Commonweaith or a Territory;

(e) activities in, or in relation to, trade and commerce between Australia and places outside Australia, among the States or between a State and a Territory, being activities which are contrary to a law of the Commonwealth, a State or a Territory; and

(£) activities that have the effect of, or are directed to, impeding, preventing or defeating, or that tend to impede, prevent or defeat, the operation, implementation or enforcement of a law

AND WE FURTHER DECLARE that, for the purposes of the Letters Patent issued on 10 September 1980, without limiting the meaning of the expression 'illegal activity', that expression includes any activity that is an illegal activity for the purposes of these Letters

The originai Letters Patent contained a direction regarding findings concerning criminal conduct. Under the

variation it was declared that the original Letters Patent should

have effect as if the relevant words were omitted and the

"AND WE FURTHER DIRECT that a finding that the union or a person has engaged in conduct amounting to a criminal offence be made only on evidence, admissible in a Court of Law, sufficient to place the union or that person, as the case may be, on trial for that offence."

The Administrative Decisions (Judicial Review)Act 1977

The applicants rely on ss. 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977. Section 5 entitles a person who 1s aggrieved by a decision to which the Act applies to apply to the Court for an order of review of the decision. Section 6 enables a person aggrieved to apply to the Court for an order of review in respect of conduct where a person has engaged, is engaging or proposes to engagee in conduct for the purpose of making a decision to which the Act applies. Both ss. 5(1) and 6(1) set out the grounds on which an order of review may be

By s.- 3 "a decision to which this Act applies" is defined to mean a decision of an administrative character made, proposed to be made or required to be made as the case may be (whether in the exercise of a discretion or not) under an

enactment. It does not include a decision by the Governor-General

or a decision included in any of the classes of decisions set out

"(3) Where provision is made by an enactment for the making of a report or recommendation before a decision is made in the exercise of a power under that enactment or under another law, the making of such a report or recommendation shall itself be deemed, for the purposes of this Act, to be the making of a decision.

(a) a reference to a person aggrieved by a decision includes a reference -

(i) to a person whose interests are adversely affected by the decision; or

(iz) an the case of a decision by way of the making of a report or recommendation - to a person whose interests would be adversely affected

if a decision were, or were not, made 1n accordance with the report or

(b) a reference to a person aggrieved by conduct that has been, is being, or is proposed to

be, engaged in for the purpose of making a decision or by a failure to make a decision

includes a reference to a person whose interests are or would be adversely affected by the conduct or failure.

(5) A reference in this Act to conduct engaged in for the purpose of making a decision includes a reference to the doing of any act or thing preparatory to the making of the decision, including the taking of evidence, or the holding of an inquiry or investigation."

The applicants claim that each is a person aggrieved and

is entitled to make the application either under s.5 or s.6 of the

The applicants' claims to relief 1s based solely on the Act and there is no need to discuss any other possible form of relief. They must therefore show that the respondent made a decision to which the Act applies or has engaged, 1s engaging or

proposes to engage in conduct for the purpose of making such a decision, that one of them at least is a person aggrieved and that one of the stated grounds exists for granting an order of review

Has the respondent made or 1s he proposing to make a decision to which the Act applies?

The first question is whether the respondent has made or

1s about to make a decision to which the Act applies . This in turn depends on whether the alleged decision or proposed decision 1s of an administrative character made or proposed to be made or

The applicants claim that the ruling of the respondent of 4 March 1982, the decision to require the attendance of Mr Ward on 9 March 1982 for examination on the matters referred to and the decisions made in October and November 1981 to issue summonses to Mr Heap, Mr Ward and other persons are, each, a decision to which

the Act applies. It is also claimed that the conduct of the

Commissioner in taking or proposing to take evidence relating to the matters referred to is conduct engaged in for the purpose of

recommendations, reliance being placed on s.3(3) of the Act.

The respondent's counsel has submitted that none of this constitutes a decision to which the Act applies or conduct engaged

The origins, nature and scope of Royal Commissions has been discussed at length in a number of cases. (See Clough v.

Leahy (1904) 2 C.L.R. 139; Colonial Sugar Refining Co. Ltd. v. Attorney-General (1912) 15 C.L.R. 182 (High Court) (1913) 17

C.L.R. 644 (P.C.). McGuinness v. Attorney-General of Victoria

(1940) 63 C.L.R. 73; Lockwood v. Commonwealth (1954) 90 C.L.R.

177; Johns and Waygood Ltd. v. Utah (1963) V.R. 70; R.V. Collins

Ex parte ACTU-Solo Enterprises Pty. Limited (1976) 8 A.L.R. 691).

There is a full discussion and summary of the position in the

judgment of Stephen J. in Colliins' Case and I have no need to

It 1s clear that there is no limit to the inquiries which the Commonwealth Executive may make by Royal Commission, Committee, or otherwise for the purpose of informing itself provided the information is sought on a voluntary basis. In substance it is in no different position to the ordinary citizen.

Its action in so doing involves no breach of the law and no

infringement of legal rights. However when it seeks, e.g. through a Royal Commissions Act to use coercive powers to compel the attendance of witnesses to give evidence before such a Commission, questions of limitation on the power of inquiry may arise. This was found to be so in the C.S.R. Case. The Commonwealth Parliament cannot compel attendance of witnesses before a Royal Commission where the terms of reference cover matters about which the Commonwealth cannot legislate. That was a case where the

The question can arise however where a Royal Commission seeks to use the coercive powers to compel answers to questions which are not relevant to or do not touch or concern or are not likely to afford any information about its terms of reference. W1i1l the Courts interfere to keep the Commission within its terms of reference. I have not been referred to any case in Australia

where that has happened although Sholl J. in John Waygood v. Utah

(supra at p.75) suggested that the Courts might. The question arises in this case and if this Court has the power it must be

In the absence of statute a Royal Commissioner has no powers to compel the attendance of witnesses. In the case of Commonwealth Commissions the Royal Commissions Act 1902 provides them. The powers conferred are extensive. The Commissioners may, in writing, summon any person to attend the Commission at a time

and place named in the summons to give evidence and to produce any

books, documents or writings in his custody or control which he is required by the summons to produce (s.2). The witness may be examined on oath (s.3). There 1s a penalty for failure without reasonable excuse to attend or to produce the documents etc. unless the defendant proves in the case of a failure to produce

documents etc. that they were not relevant to the inguiry (s.5).

"If any person appearing as a witness before the Commission refuses to be sworn or to make an affirmation or to answer any question relevant to the inquiry put to him by any of the Commissioners he shall be guilty of an

Every witness summoned is required to attend from day to day unless excused or released from further attendance by the

"OFA. Any barrister or solicitor appointed by the Attorney-General to assist a Commission, any person authorized by a Commission to appear

before it, or any barrister or solicitor 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.

6H. Any witness before a Royal Commission who knowingly gives false testimony touching any matter, material in the inquiry being made by the Commission, shall be guilty of an indictable offence. Penalty: Imprisonment for five years.

This short analysis of the powers conferred by the Royal

Commissions Act shows that a Commissioner 1s armed with considerable power to call people before him. It is based on the power to issue and cause a summons to be served on people and 1s enforced through imposing an obligation, under threat of penalty, on the person served to attend produce documents and give evidence. That obligation however appears to be confined to documents and evidence "relevant to the inquiry". The question of relevance is not one solely for the Commissioner for, clearly

enough, it is a matter which would have to be tested in

prosecution proceedings if a witness refused to answer. (See McGuinness v. Attorney-General (supra)). To this extent,

therefore, the power to compel attendance and answers is qualified. At the same time, although his office as Commissioner is dependent on the Letters Patent, his power of compulsion regarding witnesses 1s dependent on the statute. When he decides to summon a witness he does so under the Royal Commissions Act. When the witness attends he may decide to examine the witness on oath or put particular questions to him or allow counsel to put particular questions to him. Once questions are put the witness is bound to answer the question if 1t is relevant to the inquiry. All these decisions, 1t seems to me, are decisions made by the

Commissioner under the Royal Commissions Act. Because they are

decisions made as a Commissioner appointed by the Executive Government in carrying into effect the instructions contained in the Letters Patent they are decisions of an administrative

In the present case the respondent has by his ruling of 4 March last said that he will allow evidence to be adduced regarding the transactions arranged or entered into by the applicants in February 1979. It is no doubt implicit in that ruling that he will, if he thinks it necessary, seek that

information from or allow questions to be put about the matter to witnesses already summonsed including Mr Ward or the applicant, Mr Heap or will summons other witnesses to attend for that purpose. Having regard to what I have already said, I think that the decisions involved in adducing the relevant evidence are in exercise of the coercive power conferred on him by the Royal Commissions Act. They are not mere voluntary enquiries of persons asked to attend. The form of summons clearly shows that. They are decisions which, because they are made in exercise of the coercive power are intended to impose obligations or duties on the persons

In my view therefore they are, or would be, if made, decisions of an administrative character made under an enactment, namely, the Royal Commissions Act and not being excluded are decisions to which the Administrative Decisions (Judicial Review)

Questions could arise as to whether the respondent has

yet made "a decision". In relation to the Act 1t may well be that

the word "decision", means an ultimate or operative determination not a mere expression of opinion or a statement which can of

itself have no effect on a person. (cf. Director-General of

Social Services. v. Chaney (1980) 31 A.L.R. 571 per Deane J. at

pp- 590-3). Section 3(3) also assists this view. If this be correct 1t could be argued that the respondent's ruling of 4 March and possibly his decisions to issue summonses are not "decisions"

However, if this were correct I would nevertheless be of the opinion that the ruling and the existing or intended summonses to witnesses for the purpose of adducing the evidence in question constitute conduct engaged 1n or proposed to be engaged in for the purpose of making a decision. The "decisions" for this purpose would be the decisions which the respondent would clearly have to make that the particular questions were relevant when he places a witness on oath, if not already sworn, and asks or allows the questions to be asked of the witnesses. Such decisions would impose a Jegal duty and liability on the witness. He would be open to prosecution 1f he refused to be sworn or refused to answer

For the purposes of this interlocutory hearing, I would prefer to base my decision on the view I hold that there is a probability that at the hearing what the respondent has done or evinced an intention to do would be held to be conduct engaged in or proposed to be engaged in for the purpose of making decisions to which the Act applies and that therefore one condition for the

It was argued that because of the provisions of s.3(3) of the Act the making of a report and recommendation pursuant to the Letters Patent is "a decision" and that combined with s.3(5) the conduct of the respondent to which I have referred is conduct engaged in or proposed to be engaged in for the purpose of making

I do not think that s.3(3) has that effect in this case. In my view it contemplates a case where there is provision in an enactment for a specific report or recommendation as a condition precedent to the making of a decision under that enactment or some other. An example of such a case is illustrated by the

circumstances in Beetingham-Moore v. St. Leonards Municipality

(1969) 121 c.L.R. 509. This 1s not such a case. I therefore do not propose to grant any interlocutory relief in relation to the making of a report or recommendation in relation to the matter in question. This does not mean that in my view, upon full

consideration a Court could not come to the conclusion that a

decision of a Royal Commission such as this to report or recommend

was a decision for the purposes of the Act. If it did, however,

1t would not do so, in my view, because of the operation of s.3(3)

On the basis that s.6 applies to the respondent's conduct in the manner I have indicated, I think that each of the applicants 1s a person aggrieved by the conduct within the meaning of s.6. Each of them is liable to be called as a witness and one of them, Mr Heap, has been summonsed and has not been excused from further attendance. They are aggrieved in my opinion because, if the proposed inquiry is beyond the terms of reference it could whether confined to them or to other witnesses, subject them to unjustified inconvenience or their affairs to unwarranted

Are there any grounds for making an order of review?

Having formed the view that 1f final relief were granted it would be granted under s.6 and not s.5 it remains to consider whether there is a probability that any of the grounds set out in s.6(1) of the Act would be established. Those suggested are those

contained in s.6(1)(b)(c)(d)(e)(£) and (3) and are as follows:-

(b) that procedures that are required by law to be observed in respect of the conduct have not been, are not being, or are likely not to be, observed;

(c) that the person who has engaged, is engaging, or proposes to engage, in the conduct does not have jurisdiction to make the proposed decision;

(da) that the enactment in pursuance of which the decision is proposed to be made does

not authorize the making of the proposed decision; (e) that the making of the proposed decision

would be an improper exercise of the power conferred by the enactment in pursuance of

which the decision 1s proposed to be made; (£) that an error of law has been, is being, or is likely to be, committed in the course of the conduct or is likely to be

(3) that the making of the proposed decision would be otherwise contrary to law."

Having regard to the manner in which this interlocutory application has been argued, I think the existence of one or more of these grounds depends on the answer to two questions, first, whether the terms of reference of the Commonwealth Letters Patent are in relevant respects beyond power, and secondly whether the subject matters proposed to be investigated are outside the terms

The attack on validity was ultimately confined to a consideration of paras. (b) and (c) of the variation to the

Letters Patent. It was argued that these paragraphs could only be

At a glance

Court

Decision date

Before

Source

Judgment (774 paragraphs)

Legislation Cited (1)