Y v Australian Prudential Regulation Authority

THE SHOW CAUSE LETTERS 6 The same questions arise in relation to each of the Show Cause Letters. It is therefore convenient to deal with only one of them. Only the Show Cause Letter addressed to X ('the X Show Cause Letter') will be considered. 7 In the X Show Cause Letter, Mr Godfrey relevantly said as follows: 'On the basis of the information referred to in this letter, I have come to the preliminary view that you are not a fit and proper person to be or to act as someone referred to in paragraph 24(1)(a), (b) or (c) of [the Insurance Act]… I have, therefore, come to the preliminary view that you should be disqualified from being or acting as the holder of a senior insurance role, pursuant to subsection 25A(1) of the Insurance Act… My preliminary findings are set out in Attachment B to this letter. I have included in Attachment B a list of documents… containing information that I have considered in reaching my preliminary findings. The document references used to identify the relevant material are those that were used by [the P Royal Commission]. …' 8 The list of documents referred to in Attachment B includes references to pages of the transcript of examinations before the P Royal Commission and documents tendered to the P Royal Commission. Under the heading 'Preliminary Findings on Material Questions of Fact', Attachment B relevantly said as follows: '3. You have been a member of the executive board of [Z]… 4. You are also chairman of [a committee for related companies of Z] 5. Evidence provided to [the P Royal Commission] ('the Royal Commission') demonstrates the following: (a) … [Z] entered into [certain arrangements] with [P]… (b) A critical aspect of the arrangements between Z and P was [the relevant agreement]. (c) In general terms the [Relevant Agreement had a particular effect]. (d) … (e) [Y] was an [officer] of [Z] when the arrangements were entered with P. (f) You told the Royal Commission that you principally dealt with [Y] in relation to the transaction… (g) You also stated that… you had dealings with [other persons]… (h) You gave oral evidence to the Royal Commission [as to your role] in relation to the transactions… (i) You agreed with counsel assisting [as to certain matters]. (j) You stated [certain things]. (k) … (l) You gave evidence [to a particular effect]. (m) You stated [certain things]. (n) … (o) In your witness statement you stated [certain things]. (p) You also stated [certain things]. (q) In oral evidence to the Royal Commission, you agreed with counsel assisting [as to certain matters]… You also stated [certain matters]. (r) You told the Royal Commission [certain things]. (s) In your witness statement, you stated [certain things]. (t) You gave oral evidence to the Royal Commission [as to certain matters]. (u) However, you later gave evidence [as to certain other matters]. (v) You agreed with counsel assisting [as to certain matters]. (w) You gave [certain] evidence… (x) You told the Royal Commission [certain things]. (y) You also stated [certain things]. … 6. On the basis of the matters outlined above, I have reached the preliminary view that: (a) you were the person with ultimate responsibility for [a certain arrangement] with [Z]; (b) … (c) you knew, or should have known, that [certain instruments] were drafted in a manner which meant they could be used by [P] to mislead auditors and/or regulators into [certain beliefs]; (d) your authorisation of the [arrangements] in circumstances where you knew, or should have known, that the form of the [instruments] could be used by [P] to mislead its auditors and APRA… demonstrates that you are not a fit and proper person to be or act as the holder of a senior insurance role. 7. I am satisfied that APRA's powers of disqualification, if exercised by a delegate, would be properly applied in the circumstances given the global nature of the insurance industry, the fact that [Z] has an Australian presence, and the protective purpose which APRA is pursuing in the exercise of its powers disqualification under the Act. 8. In forming my preliminary conclusion, I have had regard to the relevant submissions of counsel assisting the Royal Commission and the findings of the Royal Commission. I have also had regard to your submissions in reply to your submissions in reply to counsel assisting's proposed adverse findings. This material has not caused me to alter my preliminary view. 9. Your conduct as set out above is evidence that you are not a fit and proper person to be or to act as the holder of a senior insurance role. 10. As a consequence, I propose to recommend to the appropriate delegate of APRA that you be disqualified pursuant to subsection 25A(1) of the Insurance Act. …' [Emphasis added]

THE PROCEEDINGS 9 A statement of claim was filed in each proceeding prior to the formulation of the preliminary questions. The applications and the statements of claim are substantially identical in each proceeding. It is convenient to deal with only one of the proceedings. In their application, X and Z sought an order restraining both respondents from taking any action to investigate, consider or pronounce upon the fitness of X to hold the senior insurance roles referred to in ss 24(1)(a), (b) or (c) of the Insurance Act.They also claimed a declaration that APRA and Mr Godfrey are precluded from exercising power under s 25A of the Insurance Act to disqualify X, on account of: (a) X appearing as a witness before the P Royal Commission; (b) evidence given by X before the P Royal Commission orally and by statement; (c) documents produced by Z to the P Royal Commission pursuant to a notice issued pursuant to s 2 of the Royal Commissions Act. 10 The statement of claim in the proceeding brought by X and Z ('the X Statement of Claim') asserted lack of jurisdiction or power on the part of APRA to act against X. First, the X Statement of Claim pleaded relevant personal attributes and characteristics of X as follows: · X was a citizen of a named foreign country · X was an employee of Z, holding a senior position · X travelled to Australia voluntarily to give evidence to the P Royal Commission. · X does not occupy, and never has occupied, any of the positions in s 24(1)(a) or (b) or (c) of the Insurance Act · X has never been employed in Australia · X has no intention of occupying any of the positions referred to in s 24(1)(a) or (b) or (c) of the Insurance Act, or coming to Australia or being employed in Australia. It then made the following assertions: · Given X's circumstances as set out above, APRA has no jurisdiction or power under section 25A of the Insurance Act to disqualify X from being or acting as a person referred to in s 24(1)(a), (b) or (c) of the Insurance Act. · Further, or in the alternative, APRA's power under section 25A of the Insurance Act is limited to disqualifying a person if it is satisfied that the person is not a fit and proper person to be, in Australia, or act, in Australia, as a person referred to s 24(1)(a), (b) or (c) of the Insurance Act. 11 The allegations in the X Statement of Claim concerning the operation of the Royal Commissions Act can be summarised as follows: (1) By the X Show Cause Letter, Mr Godfrey notified X that he had formed a conclusion: (a) that conduct referred to in the X Show Cause Letter was evidence that X is not a fit and proper person to be or to act as: · a director or senior manager of a general insurer, other than a foreign general insurer, · a senior manager, or agent in Australia for the purpose of s 118 of the Insurance Act, of a foreign general insurer; or · a director or senior manager of an authorised non-operating holding company; and (b) to recommend to a delegate of APRA that X be disqualified pursuant to s 25A of the Insurance Act from holding any of those positions. (2) Mr Godfrey's conclusions were founded upon views that he formed as to X's involvement in, knowledge of and responsibility for certain arrangements entered into between a general insurer ('P') and Z. (3) In order to form those views and conclusions, Mr Godfrey had regard to: (a) X appearing as a witness before the P Royal Commission; (b) evidence given by X before the P Royal Commission orally and by statement; (c) documents produced by Z to the P Royal Commission pursuant to a notice issued pursuant to s 2 of the Royal Commissions Act. (4) The views and conclusions reached by Mr Godfrey were on account of: (a) X appearing as a witness before the P Royal Commission; (b) evidence given by X before the P Royal Commission orally and by statement; (c) documents produced by Z to the P Royal Commission pursuant to a notice issued pursuant to s 2 of the Royal Commissions Act. (5) The X Show Cause Letter has caused or inflicted damage, loss and/or disadvantage to X and Z, in that it has caused X considerable personal upset and he has been obliged to and has sought and obtained legal advice as to his rights and has been obliged to and has notified his employer, Z, of the contents of the X Show Cause Letter, which has caused Z to seek and obtain legal advice as to its rights and the possible impact of the X Show Cause Letter on its reputation. (6) APRA intends to consider disqualification of X having regard to: (a) X appearing as a witness before the P Royal Commission; (b) evidence given by X before the P Royal Commission orally and by statement; (c) documents produced by Z to the P Royal Commission pursuant to a notice issued pursuant to s 2 of the Royal Commissions Act. (7) On the basis of those facts, APRA and Mr Godfrey have acted, and propose to act, in contravention of s 6M of the Royal Commissions Act. (8) In the premises, any conduct or action by APRA, its delegates, officers, employees or agents, including Mr Godfrey, to investigate and/or consider further and/or to pronounce upon X's fitness to be or act in the capacity referred to in s 24(1) of the Insurance Act would be an excess of jurisdiction and/or abuse of power.

THE INSURANCE ACT 12 The background to the present controversy is the P Royal Commission. Z had had some commercial dealings with P, the subject of the inquiry by the P Royal Commission. X and Y travelled to Australia and volunteered evidence to the P Royal Commission. APRA, having examined material available to it, including the transcript of the proceedings before the P Royal Commission, has come to the preliminary view, expressed in the Show Cause Letters, that neither X nor Y is a fit and proper person to be or act as someone referred to in s 24(1)(a), (b) or (c) of the Insurance Act.

THE RELEVANT PROVISIONS OF THE INSURANCE ACT 13 Section 2A of the Insurance Act provides as follows: '(1) The main object of this Act is to protect the interests of policyholders and prospective policyholders under insurance policies (issued by general insurers and Lloyd's underwriters) in ways that are consistent with the continued development of a viable, competitive and innovative insurance industry. (2) This Act, and the prudential standards determined by APRA under this Act, achieve this mainly by: (a) restricting who can carry on insurance business in Australia by requiring general insurers, and the directors and senior management of general insurers, to meet certain suitability requirements; and (b) imposing primary responsibility for protecting the interests of policyholders on the directors and senior management of general insurers; and (c) imposing on general insurers requirements to promote prudent management of their insurance business (including requirements concerning capital adequacy, the valuation of liabilities, reinsurance arrangements and the effectiveness of risk management strategies and techniques); and (d) providing for the prudential supervision of general insurers by APRA. …' 14 One of the means by which APRA protects the interests of policy holders is the exercise of powers given by the Insurance Act to disqualify persons from relevantly participating in the insurance industry in Australia. This disqualification by APRA forms one basis for a person having the status of a disqualified person. Section 25 sets out who is a disqualified person in the following terms: '(1) A person is a disqualified person if, at any time: (a) the person has been convicted of an offence against or arising out of: (i) this Act; or (ii) the Financial Sector (Collection of Data) Act 2001; or (iii) the Corporations Act 2001, the Corporations Law that was previously in force, or any law of a foreign country that corresponds to that Act or to that Corporations Law; or (b) the person has been convicted of an offence against or arising out of a law in force in Australia, or the law of a foreign country, if the offence concerns dishonest conduct or conduct relating to a financial sector company (within the meaning of the Financial Sector (Shareholdings) Act 1998); or (c) the person has been or becomes bankrupt; or (d) the person has applied to take the benefit of a law for the relief of bankrupt or insolvent debtors; or (e) the person has compounded with his or her creditors; or (f) APRA has disqualified the person under section 25A. (2) A reference in subsection (1) to a person who has been convicted of an offence includes a reference to a person in respect of whom an order has been made relating to the offence under: (a) section 19B of the Crimes Act 1914; or (b) a corresponding provision of a law of a State, a Territory or a foreign country. (3) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914 (which includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them).' [Original emphasis] 15 APRA's power to disqualify a person is contained in s 25A, which is in the following terms: '(1) APRA may disqualify a person if it is satisfied that the person is not a fit and proper person to be or to act as someone referred to in paragraph 24(1)(a), (b) or (c). (2) A disqualification takes effect on the day on which it is made. (3) APRA may revoke a disqualification on application by the disqualified person or on its own initiative. A revocation takes effect on the day on which it is made. (4) APRA must give the person written notice of a disqualification, revocation of a disqualification or a refusal to revoke a disqualification. (5) As soon as practicable after a notice is given to a person under subsection (4), APRA must cause particulars of the disqualification, revocation or refusal to which the notice relates: (a) to be given: (i) if the person is, or is acting as, a person referred to in paragraph 24(1)(a) - to the general insurer concerned; or (ii) if the person is, or is acting as, a person referred to in paragraph 24(1)(b) - to the foreign general insurer concerned; or (iii) if the person is, or is acting as, a person referred to in paragraph 24(1)(c) - to the authorised NOHC; and (b) to be published in the Gazette. (6) Part VI applies to a disqualification under this section or to a refusal to revoke such a disqualification.' 16 The consequences of disqualification are set out in s 24, which is in the following terms: '(1) A disqualified person must not be or act as: (a) a director or senior manager of a general insurer (other than a foreign general insurer); or (b) a senior manager, or agent in Australia for the purpose of section 118, of a foreign general insurer; or (c) a director or senior manager of an authorised NOHC. (2) A person commits an offence if the person contravenes subsection (1). Maximum penalty: Imprisonment for 2 years. (3) A person commits an offence if the person contravenes subsection (1). This is an offence of strict liability. Maximum penalty: 60 penalty units. (4) A body corporate must not allow a disqualified person to be or act as: (a) if the body corporate is a general insurer (other than a foreign general insurer) - a director or senior manager of the insurer; or (b) if the body corporate is a foreign general insurer - a senior manager, or agent in Australia for the purpose of section 118, of the insurer; or (c) if the body corporate is an authorised NOHC - a director or senior manager of the NOHC. (5) A body corporate commits an offence if it contravenes subsection (4). Maximum penalty: 250 penalty units. (6) A body corporate commits an offence if it contravenes subsection (4). This is an offence of strict liability. Maximum penalty: 60 penalty units. (7) In a prosecution under subsection (5), it is a defence if the defendant: (a) contacted APRA within a reasonable period before allowing the person to be or act as a director, senior manager or agent (as the case may be); and (b) was advised by APRA that the person was not a disqualified person. (8) A failure to comply with this section does not affect the validity of an appointment or transaction.' 17 The phrase 'general insurer' has the meaning given by s 11, which is in the following terms: 'A general insurer is a body corporate that is authorised under section 12 to carry on insurance business in Australia.' [Original emphasis] 18 Section 12 is in the following terms: '(1) A body corporate may apply in writing to APRA for an authorisation to carry on insurance business in Australia. (1A)APRA may require the body corporate to provide a statutory declaration in relation to information or documents provided in relation to the application. (2) APRA may authorise an applicant to carry on insurance business in Australia. The authorisation must be in writing. (3) Without limiting the circumstances in which APRA may refuse an application, APRA may refuse an application if the applicant is a subsidiary of a NOHC that is not an authorised NOHC. (3A)Without limiting the circumstances in which APRA may refuse an application, APRA must refuse an application if: (a) an arrangement under which medical indemnity cover is provided for a health care professional was entered into before 1 July 2003; and (b) the arrangement was not effected by means of a contract of insurance; and (c) the applicant may pay, or may have to pay, an amount under the arrangement at some time after the time when the application is made. (4) If APRA authorises an applicant, APRA must: (a) give written notice to the applicant; and (b) ensure that notice of the authorisation is published in the Gazette. (5) The taking of an action is not invalid merely because of a failure to comply with subsection (4). (6) Part VI applies to a refusal of APRA to authorise an applicant under this section.' 19 The phrase 'foreign general insurer' is defined in s 3(1) as follows: 'foreign general insurer means a body corporate that: (a) is a foreign corporation within the meaning of paragraph 51(xx) of the Constitution; and (b) is authorised to carry on insurance business in a foreign country; and (c) is authorised under section 12 to carry on insurance business in Australia.' [Original emphasis] 20 The acronym NOHC means non-operating holding company. In s 3(1) the term is defined in the following terms: 'NOHC or non-operating holding company, in relation to a body corporate, means a body corporate: (a) of which the first body corporate is a subsidiary; and (b) that does not carry on a business (other than a business consisting of the ownership or control of other bodies corporate); and (c) that is incorporated in Australia.' [Original emphasis] 21 The phrase 'authorised "NOHC"' is defined in s 3(1) as meaning a body corporate that is : '(a) authorised under s 18; and (b) that is a NOHC of a general insurer or general insurers.' 22 Section 18 deals with authorisation to be an NOHC and is in the following terms: '(1) A body corporate may apply in writing to APRA for an authorisation (a NOHC authorisation) under this section. The authorisation operates as an authorisation in relation to the body corporate and any general insurers that are subsidiaries of the body corporate from time to time. (2) APRA may require the body corporate to provide a statutory declaration in relation to information or documents provided in relation to the application. (3) APRA may authorise an applicant if it considers it is appropriate to do so. The authorisation must be in writing. (4) If APRA authorises an applicant, APRA must: (a) give written notice to the applicant; and (b) ensure that notice of the authorisation is published in the Gazette. (5) The taking of an action is not invalid merely because of a failure to comply with subsection (4). (6) Part VI applies to a refusal of APRA to authorise an applicant under this section.' [Original emphasis] 23 The phrase 'senior manger' is defined in s 3(1) in the following terms: 'senior manager of a general insurer means a person who has or exercises any of the senior management responsibilities (within the meaning of the prudential standards) for the insurer.' [Original emphasis] 24 Under Prudential Standard GPS220 'senior management responsibilities' means: '…primary responsibility for one or more of the following:

(b) implementing strategies and policies approved by the Board;

(c) developing processes that identify, manage and monitor risks incurred by the insurer; and

(d) monitoring the appropriateness, adequacy and effectiveness of the risk management system' 25 As can be seen from the above provisions, the Insurance Act provides that persons who are disqualified (whether by application of the terms of s 25(1)(a) to (e) to the circumstances of the person in question, or by the operation of the power of disqualification under s 25A and the operation of s 25(1)(f)) cannot be or act as set out in s 24(1). The positions set out in s 24(1)(a), (b) and (c) have a connection with insurance business in Australia in the manner and to the extent there provided. A general insurer is a body corporate authorised to carry on insurance business in Australia. A foreign general insurer is a body corporate authorised to carry on insurance business in a foreign country and in Australia. An authorised NOHC has one or more subsidiaries that are general insurers. 26 Thus, disqualification under ss 25 and 25A of the Insurance Act can be seen as a control on the type of people who direct the policies and affairs of companies carrying on insurance business in Australia or the parent companies thereof.

THE DECISION OF THE PRIMARY JUDGE 27 The appellants argued before the primary judge that there was an insufficient connection or nexus between X, Y and Z and their circumstances, and the power in s 25A for s 25A to be engaged. A number of arguments were put to the primary judge, not all of which were repeated on appeal. It is sufficient to set out what the primary judge accorded as the relevant argument in [5] and [56] of his Honour's reasons: 'The applicants contend that APRA lacks power to disqualify the first applicants under s 25A, because APRA's statutory power is limited so as to apply only to persons who have been, or have acted as, the holders of specific insurance positions in Australia, or perhaps, persons who intend to take up such a position in the future, neither of which conditions is satisfied by Applicant [X] or Applicant [Y]. An alternative basis of the injunction sought is that if APRA were to proceed to disqualify Applicant [X] or Applicant [Y], it would be causing a disadvantage to him for or on account of evidence given by him to the Royal Commission, in contravention of s 6M of the Royal Commissions Act 1902 (Cth) ('the RC Act'). … The applicants submit: "12. … APRA's power to disqualify a person is restricted. The power to disqualify does not apply to any person. The power provided by s 25A must be read in the context of the Insurance Act and the related legislation governing APRA's operation. When read in that context, we submit the power is restricted to the disqualification by APRA of persons who have been, or who have acted as, the holders of the specific insurance positions in Australia. APRA's power to disqualify extends only to disqualification from holding the position (or positions) that the person has held in Australia. 13. Arguably, the section may extend to persons who have indicated an intention to take up such a position in the future, but that does not arise in this case. 14. In relation to "senior managers of foreign general insurers", that description in section 24(1)(b) means people holding such positions in relation to the Australian operation of the foreign insurer's insurance business. That is, that person must have primary responsibility for one or more of the following things: a. high level decision making in Australia; b. implementing strategies and policies in Australia approved by the Board; c. developing processes that identify, manage and monitor risks incurred by the insurer in Australia; d. monitoring the appropriateness, adequacy and effectiveness of the risk management system in Australia.' (emphasis in original)"' 28 Those arguments were supported by affidavits sworn by X and Y attesting to their lack of connection with Australia. The primary judge set out that evidence at [42] and [49] of his reasons. 29 The submissions put by APRA to the primary judge were recorded in [57] of his Honour's reasons, as follows: 'The respondents submit: 3.9 ... The respondents accept that a limitation must be placed upon the power under s 25A(1) to disqualify a person from being or acting as someone referred to in s 24(1)(b). That limitation is drawn from the "nexus" which must exist in order for the power to be exercised consistently with the protective objects of the Act, as developed in the Act ... Consistently with the requirement of a "nexus" with respect to the power to disqualify under s 25A(1), the meaning of "senior manager" of a "foreign general insurer" in s 24(1)(b) and defined in paragraph 21 of GPS 220 must be confined by reference to the protective object of the Act. ... That object would not be served by disqualification of a person from taking up a s 24(1) position when that person has not made decisions affecting the insurer's Australian operations and there is not a remote chance that he or she will do so. The meaning of "senior manager" of a "foreign general insurer" is confined to this extent. 3.23 The respondents accept that the power in s 25A(1), through the reference to s 24(1) is limited by a requirement that there exist a nexus between the disqualification and the Australian operation of the foreign general insurer. The required nexus is not, however, of the kind advanced by the applicants. ... 3.24 The respondents submit that a "senior manager" of a "foreign general insurer" in s 24(1)(b) of the Act, as defined in paragraph 21 of GPS 220, is confined to persons who have made decisions affecting the insurer's Australian operations and there is at least a remote chance that he or she will take up a s 24(1) position.' [Emphasis given by the primary judge] 30 It is perhaps not surprising, in the light of those submissions by both parties, that the primary judge approached the matter as he did. His Honour said that, as a precondition to the engagement of the power to consider the application of the disqualification power in s 25A, it was necessary for there to be demonstrated some factual nexus between the person postulated as the subject of the possible application of the power and the Australian insurance industry. At [76] to [80] the primary judge said the following: 'I do not accept that the intended limitation is that advanced in the applicants' submission set out at [56] above. The limitation there suggested would prevent APRA from disqualifying persons who posed a risk of the kind described, just because they had not been or acted as senior manger [sic] in Australia or in relation to the Australian operation. The fact that a person is not a fit and proper person to have or to exercise senior management responsibilities might be shown by other evidence, and it is not to be supposed that the legislature intended to omit all such cases from the scope of APRA's power of disqualification. Without attempting to define in an exhaustive and therefore exclusionary way the required Australian nexus, I am content to adopt as a sufficient nexus, one akin to that suggested by the respondents in para 3.24 of their submissions (set out at [57] above). Accordingly, I think it will suffice that: 1. the person has at some time made a decision or decisions or exercised some influence in relation to the carrying on of the Australian general insurance business of the foreign general insurer; and 2. there is at least some risk, even a remote one, that he or she will: (a) do so; and (b) be or act as someone referred to in s 24(1)(a), (b) or (c) in the future. The second criterion is necessary. It conforms to the protective purpose of ss 24(1) and 25A(1). Without it, disqualification could be used simply to punish. Indeed, as a matter of APRA's jurisdiction or power, the second criterion alone is probably all that is necessary. I have set out the evidence in relation to Applicant [X] and Applicant [Y] under the heading 'The Evidence Relating to Applicant [X] and Applicant [Y]' ([36]-[55]) above, and will not repeat it here. In my opinion, each satisfies both limbs of the low jurisdictional threshold. Each is, and has at material times been, a senior manager of [Z]; each has exercised some influence in relation to its Australian operation; and there is at least some risk that each will do so in the future. In relation to this last matter, it is noteworthy that neither Applicant [X] nor Applicant [Y] has proffered to APRA any form of undertaking with respect to the future, and the affidavit of each goes only to his present intention and circumstances of life. The applicants have not discharged the onus of establishing, as a matter of jurisdiction or power, that APRA will not be entitled to be satisfied that each first applicant is not a fit and proper person to be or to act as someone referred to in para 24(1)(a), (b) or (b) of the Act.' [Original emphasis]

THE APPEAL 31 There were two grounds of appeal concerned with the first question. The first challenged the primary judge's view that the power in s 25A extends to a person who has at some time made a decision or decisions or exercised some influence in relation to the carrying on of the Australian general insurance business of the foreign general insurer and there is at least some risk, even a remote one, that he or she will do so and be or act as someone referred to in section 24(1)(a), (b) or (c) in the future. 32 The second ground dealt with his Honours factual findings as to X and Y. 33 The arguments put forward by the appellants did not involve any Constitutional issue. They depended upon the proper construction of s 25A in the light of its purpose, the purpose of the Insurance Act as a whole and the necessary connection between the power and the conduct of the insurance business in Australia. 34 The arguments were put forward with care and clarity by counsel who appeared for the appellants. It is unnecessary to set them out in full. In the course of oral argument it became clear that, for the appellants to succeed, s 25A should be read as limited to persons in respect of whom there are reasonable grounds to believe they will hold one of the positions set out in s 24(1) in the future. 35 We cannot agree. The asserted construction is to read into the provision a species of jurisdictional fact not supported by the words of the section. The relevant connection with insurance business in Australia is provided by the positions in s 24. The power in s 25A, which carries with it the necessity to consider the questions involved concerning the deployment of such powers as APRA has under the Australian Prudential Regulation Authority Act 1998 (Cth) and otherwise, is not to be seen as inapplicable until some objective fact concerning the subject of the possible disqualification is proved. In Kamha v Australian Prudential Regulation Authority [2005] FCAFC 248 we dealt with the content of s 25A in the context of certain Constitutional questions that were argued. In this context we said the following at [50] to [56]: 'Mr Kamha says that a law conferring a power to disqualify persons with no present or future connection with the insurance industry could not be regarded as regulating, operating upon or affecting the insurance industry either directly or incidentally in any real or practical sense. He contends that, since the Insurance Act fails to prescribe any criteria for the determination of fitness and propriety within s 25A(1) and leaves the matter entirely to the discretion of APRA, the phrase 'a person' appearing in s 25A(1) must be read so as to require that there be a present or future connection between the person and the subject matter of insurance. Mr Kamha also argues that the object of the Insurance Act, namely, to protect the interests of policy holders, is not advanced in any relevant sense by conferring upon APRA a power to disqualify a person not presently in a s 24 position and who does not intend to be or is not likely to be in such a position in the future. He says that a law construed as conferring such a power could not be said to be capable of being reasonably considered to be appropriate and adapted to the achievement of the designated object of the Insurance Act and, accordingly, is not a law which has a sufficient connection to insurance so as to be within the relevant power of the federal parliament. Everything necessary to the exercise of a power is included in the grant of the power. The power to regulate a particular area, such as insurance, includes a power to make laws that prohibit or prevent persons from engaging in activities in that area. A law will not be beyond power merely because it casts a wide net or sets up a barrier against a possibility rather than a probability (Baxter v Ah Way (1909) 8 CLR 626 at 637 and Herald & Weekly Times Limited v The Commonwealth (1966) 115 CLR 418 at 436). The power under s 51(xiv) of the Constitution, to make laws with respect to insurance includes, for example, power to prescribe conditions upon which any person, natural or artificial, may carry on an insurance business of any kind. It includes power to require such persons to be registered, to provide security for the due performance of their obligations, to insure persons and to maintain funds to answer those obligations (Insurance Commissioner v Associated Dominion Assurance Pty Ltd (1953) 89 CLR 78 at 87). The power to legislate with respect to insurance will support a law prohibiting a person who is not a fit and proper person from holding a senior management position with an insurer. The validity of such a law does not depend upon that person's present or future subjective intention. The power would clearly support a law prohibiting a person who is not a fit and proper person to hold a position, from holding that position, regardless of whether the person presently holds such a position or has any present intention to hold such a position in the future. It is sufficient to bring a law within the insurance power that the law prohibits a person from holding a senior management position with an insurer, irrespective of the characteristics of the person so prohibited. The validity of a provision such as s 25A does not depend upon whether a person disqualified has acted in a s 24 position in the past or whether the person intends to act in a s 24 position in the future.' 36 Though what we said (in particular at [54]) was directed at the content of the insurance power, it is also descriptive of s 25A. The scope of s 25A is not dependent upon some criterion of factual connection between the subject of the power and the insurance industry in Australia. That connection is provided by s 24(1). The exercise of the power in s 25A will have a protective effect on policy holders by preventing the person in question from holding a position with a relevant connection with the Australian insurance industry. To the extent that APRA seeks to exercise the power in s 25A in a way apparently unconnected with any likely protection to policy holders, that may be a factor in any consideration of the validity of the exercise of the power. Such a factor may support an argument that the power was exercised capriciously or arbitrarily or in a way that no reasonable person would contemplate as proper. However, we see no basis for concluding that the power in s 25A cannot be engaged unless and until there are reasonable grounds to believe that the subject person will hold one of the positions in the future. 37 On that basis, it is unnecessary for us to deal with the second ground of the appeal. To a degree the primary judge went further than he needed to in dealing with the issue before him. That was because of the arguments propounded by the parties before him. The arguments placed before us included the proposition advanced by APRA that there was no relevant connection required to engage s 25A. For the reasons we have given we think that argument is correct. 38 We conclude that the primary judge gave the correct answer to the first question.

THE ROYAL COMMISSIONS ACT 39 The appellants contend that the use made in the Show Cause Letters by Mr Godfrey and the threatened use by APRA of evidence given by X and Y to the P Royal Commission would involve a contravention of ss 6DD and 6M of the Royal Commissions Act. In their present form, ss 6DD and 6M provide as follows: '6DD (1) The following are not admissible in evidence against a natural person in any civil or criminal proceedings in any court of the Commonwealth, of a State or of a Territory: (a) a statement or disclosure made by the person in the course of giving evidence before a Commission; (b) the production of a document or other thing by the person pursuant to a summons, requirement or notice under section 2. (2) Subsection (1) does not apply to the admissibility of evidence in proceedings for an offence against this Act. 6M Any person who uses, causes or inflicts, any violence, punishment, damage, loss, or disadvantage to any person for or on account of: (a) the person having appeared as a witness before any Royal Commission; or (b) any evidence given by him or her before any Royal Commission; or (c) the person having produced a document or thing pursuant to a summons, requirement or notice under section 2;

Penalty: $1,000, or imprisonment for 1 year.' 40 Although the second preliminary question referred to s 6DD as well as to s 6M, the primary judge understood the appellants not to press for a positive answer to the question on the basis of contravention of s 6DD. Indeed, his Honour considered that it would have been hopeless to contend that APRA or Mr Godfrey, had contravened s 6DD. As his Honour observed, s 6DD is not susceptible of being contravened by anyone: it neither prohibits nor compels, but merely makes certain things inadmissible in evidence. 41 The question of what consequences would flow if the second preliminary question were answered yes has not been the subject of argument. The appeal has been conducted on the basis that the use referred to in the second question is the use made of the evidence in the Show Cause Letters and the use that would be made of the evidence in disqualifying X and Y on the basis indicated in the Show Cause Letters. 42 The appellants submit that the effect of s 6M is to provide a protection so that people can and will give evidence before Royal Commissions freely and unconcerned that the words they utter may be used as a sword to harm them, and that APRA and Mr Godfrey have done and are threatening to do just that. They say that the evidence given by X and Y cannot be used against them in the way that is threatened by APRA and Mr Godfrey. They say that, in effect, the words that were used by X and Y before the P Royal Commission are to be used against them to disadvantage them and that that is prohibited by s 6M. 43 The primary judge referred to submissions made by APRA and Mr Godfrey concerning the possible effect of s 6DD on the construction of s 6M. The argument was that, if the Parliament had intended to prevent a regulator from using evidence given before a Royal Commission in the way in which APRA has used it, the prohibition would be found in s 6DD. His Honour did not accept that contention, but regarded s 6DD as being neutral in relation to the question of construction of s 6M. 44 The primary judge considered that the phrase 'any evidence given by him or her before any Royal Commission' in s 6M(b) signified the act of giving evidence on a particular subject matter and not the underlying facts of which evidence was given. His Honour distinguished that from 'having appeared as a witness before any Royal Commission', as referred to in s 6M(a). Thus, a third party might not object generally to a person's having appeared as a witness and testified, yet might object to that person's having testified on a particular subject matter. His Honour concluded that s 6M(b) is to be read as if it said 'the persons having given evidence on any particular matter before any Royal Commission'. 45 The legislative history of s 6M may be of assistance as to its proper construction. Section 6M probably finds its origin in the Witness (Public Inquiries) Protection Act 1892 (UK). Section 2 of that Act provided as follows: 'Every person who commits any of the following acts, that is to say, who threatens, or in any way punishes, damnifies, or injures, or attempts to injure any person for having given evidence upon any inquiry, or on account of the evidence which he has given upon any such inquiry, shall, unless such evidence was given in bad faith, be guilty of a misdemeanor.' That provision is expressly confined to inquiries as distinct from judicial proceedings, where Courts have inherent power to deal with contempt. The provision was enacted to provide a more convenient machinery for punishing persons for contempt of an enquiry (see Attorney-General v Butterworth [1963] 1 QB 696 at 720). 46 When the Royal Commissions Act was first enacted, no provision similar to s 6M was included. Under s 3 of the Royal Commission Act, a Royal Commissioner was authorised to administer an oath to any person appearing as a witness before the commission. Section 5 imposed a penalty for failing without reasonable excuse to attend a commission or to produce documents when summoned to do so. Under s 6, a person appearing as a witness who refused to be sworn or to answer any question put to him was to be liable to a penalty. Under s 7(2) every witness summoned to attend or appearing before a commission was to have the same protection and be subject to the same liabilities in any civil or criminal proceeding, as a witness in any case tried in the High Court or in the Supreme Court of a State. 47 In 1908, the Federal Parliament enacted the Excise Procedure Act 1907 (Cth) ('the 1907 Act'), in order to lay down a procedure on applications for a declaration under the Excise Tariff 1906. By s 7(b) of the 1907 Act, the President of the Commonwealth Court of Conciliation and Arbitration was given power to summon any person as a witness and to compel the production before the President of books, documents and things and to take evidence on oath or affirmation. Penalties were imposed by s 9 for disobeying a summons to appear, refusing to be sworn as a witness or refusing to answer any question. 48 Sections 10 and 11 provided as follows: '10. No person shall use, cause, inflict, or procure any violence, punishment, damage, loss, or disadvantage to any person for or on account of his having appeared as a witness on any application, or for or on account of any evidence given by him on any application. Penalty: Fifty pounds. 11. No employer shall dismiss any employee from his employment on account of the employee having appeared as a witness, or for or on account of any evidence given by him on any application, or on account of any award or declaration made in respect of any application. Penalty: Fifty pounds' 49 In his speech on the second reading of the Bill for the 1907 Act in the House of Representatives, the Attorney-General said: 'Section 10 provides for the protection of witnesses, making it an offence to use, cause, inflict or procure under (sic) violence, punishment, damage, loss or disadvantage to anyone for having appeared as a witness. No employer may dismiss an employé because he has appeared as a witness, and no employé shall cease to work in the service of an employer because of evidence given by him. …' [emphasis added] 50 Sections 10 and 11 of the Excise Procedure Act appear to have been the immediate precursors of ss 6M and 6N of the Royal Commissions Act. By the Royal Commissions Act 1912 (Cth) ('the 1912 Act'), more than 20 new sections were inserted in the Royal Commission Act, including ss 6DD, 6M and 6N. The amendments were proposed because the Royal Commissions Act 1902 was considered to be ineffective. 51 A Commission under the Royal Commissions Act had been issued to enquire into matters in connection with the sugar industry. In the course of the enquiry certain witnesses were summoned in Sydney but did not attend. On one occasion, they attended but declined to answer questions as requested. Subsequently they were summoned to attend, and did not do so. In consequence of the refusal, proceedings were instituted. In the course of those proceedings, the defendants contended, on some twenty grounds, that a witness ought not to be expected to attend before the Commission. 52 Those grounds were characterised by the Attorney-General in his speech on the second reading of the Bill for the 1912 Act, as 'of very grave importance'. The Attorney-General said: 'The inquiry is into the conditions of the industry, and of those persons who participate in any way in the distribution of the bounty. Surely a matter of first importance to the community. Yet for nine weeks, the Commission of inquiry issued by the Crown in this matter of great and vital public interest has been flouted and defied, and the powers of the Commonwealth are found to be utterly futile, either to compel the attendance of a witness, or to make him answer a single question. Such a state of things is intolerable. I submit that a great principle is here involved. The community must be supreme. No individual, or set of individuals, can be permitted to put themselves above the law. Whether the law is good or bad is, so far as this principle is concerned, not material. Witnesses must attend; they must answer questions.' 53 The 1912 Act was assented to on 19 August 1912. Sections 6DD, 6M and 6N were enacted in the following terms: '6DD A statement or disclosure made by any witness in answer to any question put to him by a Royal Commission or any of the Commissioners shall not (except in proceedings for an offence against this Act) be admissible in evidence against him in any civil or criminal proceedings in any Commonwealth or State Court or any Court of any Territory of the Commonwealth. 6M Any person who uses, causes, inflicts, or procures, any violence, punishment, damage, loss, or disadvantage to any person for or on account of his having appeared as a witness before any Royal Commission, or for or on account of any evidence given by him before any Royal Commission, shall be guilty of an indictable offence.

Penalty: Five hundred pounds, or imprisonment for one year. 6N. (1.) Any employer who dismisses any employee from his employment, or prejudices any employee in his employment, for or on account of the employee having appeared as a witness before a Royal Commission, or for or on account of the employee having given evidence before a Royal Commission, shall be guilty of an indictable offence.

Penalty: five hundred pounds, or imprisonment for one year. (2.) In any proceeding for any offence against this section it shall lie upon the employer to prove that any employee shown to have been dismissed or prejudiced in his employment was so dismissed or prejudiced for some reason other than the reasons mentioned in sub-section (1.) of this section.' [Emphasis added] 54 After turning to the legislation which was being introduced as a remedy for the then present state of things, the Attorney-General said: 'I come now to the real gist of the measure, which is the creation of the machinery necessary to make the inquiry effective. To this end two things are clearly necessary: one, to compel the attendance of witnesses; two, to insure that they shall answer questions. ...' 55 For reasons that are not apparent, while ss 6M and 6N are clearly modelled on ss 10 and 11 of the Excise Procedure Act 1907, the structure of s 6N was different from the structure of s 11 whereas the structure of s 6M was the same as the structure of s 10. That is to say, in ss 10 and 11 there was a prohibition on conduct involving a witness 'for or on account of any evidence given by him'. Section 6M adopted the same phrase. However, s 6N varied the phrase to read 'for or on account of the employee having given evidence'. 56 When he came to consider the clauses which became s 6DD and 6M and 6N, the Attorney-General said: '… Another provision which I propose to insert in this Bill is that no evidence given by a witness before a Royal Commission shall render him liable in subsequent civil or criminal proceedings. That, I take it, will put a witness before a Royal Commission in exactly the position he would occupy if he were before the Bankruptcy Court. … A further provision in this Bill is that any person who injures, or causes a witness to be injured, because of his having appeared before a Royal Commission shall be liable to a penalty of Ł500, or imprisonment for one year. An employer who dismisses an employé on account of his having appeared as a witness before a Commission - and the onus of proof is thrown upon the employer - will be liable to a penalty of Ł500, or imprisonment for one year. …' It may be observed that the Attorney's focus was not upon the consequences of 'evidence given' or of 'having given evidence'. No explanation was provided as to the circumstances in which clause 6DD came to be inserted into the Bill in between clauses 6D and 6E. Plainly, it was included after the Bill had already been formulated, given its numbering. 57 In 2001, amendments were made to the Royal Commissions Act by the Royal Commissions and Other Legislation Amendment Act 2001 (Cth) ('the 2001 Act'). Section 6M was repealed and a new section substituted. Section 6N(1) was amended. Section 6DD was repealed and a new section substituted. As amended, ss 6DD and 6M now provide as indicated above and s 6N(1) provides as follows: '6N(1)Dismissal by employers of witness Any employer who dismisses any employee from his or her employment, or prejudices any employee in his or her employment, for or on account of the employee having: (a) appeared as a witness before a Royal Commission; or (b) given evidence before a Royal Commission; or (c) produced a document or thing pursuant to a summons, requirement or notice under section 2;

Penalty: $1,000, or imprisonment for 1 year.' 58 A new s 2(3A) was also inserted into the Royal Commissions Act by the 2001 Act, empowering a Commission to require a person upon whom a written notice was served to produce a document or thing specified in the notice to a person, and at the time and place, specified in the notice, rather than to a Commissioner at a formal hearing. Section 6A of the Royal Commissions Act, which provided that a person may not refuse or fail to answer a question or produce a document or thing pursuant to a summons on the ground that it might tend to incriminate him or her, was amplified to ensure that it also applied to the production of documents or things pursuant to a notice under the new s 2(3A) as well. 59 In relation to, inter alia, the new s 6A, a Supplementary Explanatory Memorandum was tabled in the Senate on 27 September 2001. The Supplementary Explanatory Memorandum included an observation upon the new s 6A and new s 6DD in the following terms:- 'The new section [s 6A] does not compel persons to provide such information where proceedings in respect of the penalty in question are on foot. This offers some protection against the potentially adverse consequences of providing such information. The "use immunity" provision in section 6DD offers further protection by preventing the admission of certain information in criminal or civil proceedings, which would include civil penalty proceedings. … At present, section 6DD provides that a statement or disclosure made by a witness in the course of giving evidence is not admissible against that witness in any civil or criminal proceedings (except proceedings for an offence against the Act). This provision offers some protection to witnesses who are compelled to provide information which might tend to incriminate them in the course of giving evidence before a Commission. The item repeals and replaces section 6DD to provide that evidence of the fact that a person has produced a document or thing to a Royal Commission, whether pursuant to a summons, notice or a requirement imposed during the course of a hearing, is also inadmissible against that person in any civil or criminal proceedings.' [Emphasis added] 60 In relation to the new s 6M and the new s 6N(1), the Supplementary Explanatory Memorandum included the following:- 'This item … repeals and replaces 6M so that it is an offence to injure a person on account of that person producing documents or things pursuant to a notice under new subsection 2(3A), as well as on account of that person having appeared as a witness or on account of any evidence given by that person. The penalty in section 6M will remain the same. … This item … repeals and replaces 6N of the Act so that it is also an offence for an employer to dismiss or prejudice an employee on account of the employee having producing (sic) documents or things pursuant to a notice under new subsection 2(3A), as well as on account of the employee having appeared as a witness or having given evidence. The penalty in section 6N will remain the same.' [Emphasis added] 61 Thus, the production of documents was addressed by the 2001 Act. However, the differences in structure of ss 6M and 6N(1) were preserved. That is to say, the whole of s 6N(1) utilises the active voice, having broken down the proscribed reasons into three paragraphs. The preamble utilises a gerund, which governs the past participle of three different verbs, namely, 'appeared', 'given' and 'produced'. On the other hand, s 6M, while it breaks down the proscribed reasons into three paragraphs, utilises the passive voice in paragraph s 6M(b) and the active voice and gerund structure in paragraphs (a) and (c), that is used in s 6N. 62 Both s 6M and s 6N are directed to the same object. That object is to criminalise conduct directed towards harming a person 'for or on account of' that person's having done something in relation to a Royal Commission. Section 6N, of course, applies only where the person is an employee of the person who causes the harm, being harm limited to that arising out of the relationship of employer and employee. 63 The prohibited conduct under s 6M and under s 6N will be punishable if it is engaged in for one of three reasons. In the case of s 6M the reasons are: (a) for or on account of the person having appeared as a witness before any Royal Commission; (b) for or on account of any evidence given by him or her before any Royal Commission; (c) for or on account of the person having produced a document or thing pursuant to a summons requirement or notice under s 2. Under s 6N(1) the reasons are: (a) for or on account of the employee having appeared as a witness before a Royal Commission; (b) for or on account of the employee having given evidence before a Royal Commission; (c) for or on account of the employee having produced a document or thing pursuant to a summons, requirement or notice under s 2. 64 The question now raised is concerned with the meaning to be given to the emphasised words of paragraph 6M(b). Notwithstanding the change from the structure of s 11 of the 1907 Act when enacting s 6N, it is difficult to see any rationale for attributing different meanings to the reasons for conduct that is proscribed. 65 In order to conform with s 6N, the relevant reason in s 6M would be formulated as follows: 'for or on account of the person having given evidence before a Royal Commission.' The primary judge construed the paragraph as follows: 'for or on account of the person having given evidence on any particular matter before any Royal Commission.' 66 APRA and Mr Godfrey would do slightly less violence to the paragraph and would construe it as follows: 'for or on account of any evidence having been given by him or her before any Royal Commission.' [emphasis added] An advantage of the construction advanced by APRA and Mr Godfrey is that it preserves the passive voice in paragraph 6M(b), whereas the construction adopted by the primary judge converts paragraph (b) into the active voice, conformably with s 6N. 67 The preamble of s 6M utilises three verbs, each with five objects. As originally enacted, it used a fourth verb, namely, 'procures'. The omission of that verb does not appear to be presently relevant. The preamble has syntactical difficulties. Some of the five objects do not sit happily with one or other of the verbs. 68 Thus, it is not idiomatic to speak of a person inflicting damage, loss or disadvantage to any person. One might speak of a person inflicting punishment to any person. Further, one might say that a person 'uses violence to any person' but one would not say, idiomatically, that a person 'uses damage, loss or disadvantage to any person'. On the other hand, one might idiomatically say that a person 'causes violence, punishment, damage, loss or disadvantage to any person'. 69 No defences have been filed in the proceeding. However, APRA and Mr Godfrey appear to have accepted, for the purposes of the proceedings, that writing a letter such as the Show Cause Letters, and taking steps under s 25A(1) of the Insurance Act on the basis outlined in the Show Cause Letters, is capable of constituting conduct within the preamble of s 6M, as pleaded. The dispute concerns the extent to which the engaging in of that conduct is for the reason referred to in paragraph 6M(b), namely, for or on account of any evidence given by X or Y before the P Royal Commission. 70 Taken literally, the X Show Cause Letter might be regarded as offending s 6M. That is to say, paragraph 9 says 'Your conduct as set out above is evidence that you are not a fit and proper person to be or to act as the holder of a senior insurance role'. The greater part of the conduct that is set out is conduct consisting of telling the Royal Commission something, stating something to the Royal Commission, giving oral evidence to the Royal Commission and agreeing with counsel assisting the Royal Commission. If the X Show Cause Letter, properly construed, is an indication that action is being taken or contemplated because X did those things before the Royal Commission, one could conclude that APRA or Mr Godfrey is causing damage, loss or disadvantage to X for or on account of the evidence given by X before the Royal Commission. 71 However, the X Show Cause Letter should not be so construed. Paragraph 5 of Attachment B to that letter begins with the preamble that 'Evidence provided to the P Royal Commission demonstrates the following'. The introductory words to the various paragraphs that follow that preamble do no more than repeat the source of information from which Mr Godfrey, as the author of Attachment B, has concluded that certain conduct was engaged in by X. 72 Paragraph 9 of Attachment B is not a statement that the conduct of X, in telling the Royal Commission about the transaction with P, is evidence that X is not a fit and proper person. Paragraph 9 is a statement that the involvement of X in relation to the transaction is evidence that he is not a fit and proper person. The evidence given to the P Royal Commission is no more than the source of Mr Godfrey's knowledge of X's involvement in the transaction. 73 The appellants accept that the evidence given to the P Royal Commission by X and Y may be considered by APRA to undertake such investigations as it is empowered to do, but say that the actual words of X and Y spoken to the P Royal Commission cannot be used to their disadvantage. Such a construction, they say, would enable evidence given in a Royal Commission to be available for authorities to use subsequently in appropriate ways, whilst providing the necessary and proper protection to witnesses to enable the intended purpose of s 6M to be achieved, namely, to ensure that the witnesses will give evidence truthfully without fear of reprisal. 74 The primary judge construed s 6M(b) as being concerned with causing violence, punishment, damage, loss or disadvantage for or on account of a person's having given evidence on a particular topic. His Honour considered that the expression 'any evidence given by him or her before any Royal Commission' signifies, not the underlying facts of which evidence was given, but the act of giving evidence on a particular subject matter. That is distinct from 'having appeared as a witness before any Royal Commission' as referred to in paragraph 6M(a). That construction would render paragraph 6M(b) consistent with paragraph 6M(a) and 6M(c). It would be odd if authorities or regulators could rely on pre-existing documents or things produced by a person to a Royal Commission, as a basis for administrative decision making, yet could not rely on pre-existing facts and events of which the person testified before the Royal Commission, for the same purpose. 75 Section 6DD is part of the scheme inserted by the 1912 Act. Section 6DD protects a witness from the consequences of giving evidence, to the extent that a statement or disclosure made in the course of giving evidence is not admissible against that person in any civil or criminal proceeding in any court of the Commonwealth, of a State, or of a Territory. However, there is no protection equivalent to s 6DD in relation to administrative decision making. There is nothing that expressly prohibits a statement or a disclosure made by a person in the course of giving evidence before a Royal Commission to be taken into account as an admission, for the purposes of making an administrative decision, such as a disqualification under s 25A(1) of the Insurance Act. That distinction flavours the extent of the operation of s 6M. That is to say, it indicates that s 6M is directed to protecting a witness from detriment by reason of having given evidence about particular matters but is not intended to protect a witness from detriment by reason of the witness having admitted the pre-existing facts by giving such evidence. 76 The X Show Cause Letter and Attachment B thereto indicate that Mr Godfrey proposes to recommend to the appropriate delegate of APRA that X be disqualified pursuant to s 25A. He does not propose to do that by reason of the fact that X gave particular evidence before the Royal Commission; rather, he proposes to do so because of the facts about which X gave evidence to the Royal Commission. It may be that the only evidence that Mr Godfrey has of those facts is the evidence given by X before the Royal Commission. However, having regard to that evidence, in concluding that the facts have been established, is not doing something for or on account of any evidence given by X before the Royal Commission. If Mr Godfrey is causing damage, loss or disadvantage to X, it is for or on account of the facts, evidence of which was given by X before the Royal Commission, not for or on account of X's evidence. 77 It follows that, if Mr Godfrey or APRA can be said to cause damage, loss or disadvantage to X or Y by sending the Show Cause Letters, inviting them to make submissions as to why APRA should not make a decision to disqualify them under s 25A(1), or by making such a decision, on the basis described in the Show Cause Letters, they are not doing so for or on account of evidence given by X or Y before the Royal Commission within s 6M(b). That is to say, there would be no contravention of that provision. The primary judge did not err in concluding that the second preliminary question should be answered 'no'. 78 As indicated above, even if the answer to the question were yes, that would not necessarily be an end of the matter, depending upon the intendment of the second question. The exposure of APRA, or a delegate of APRA, to a penalty for a contravention of s 6M would not necessarily prevent APRA or its delegate from being satisfied, on the basis of, inter alia, evidence given by X or Y at the P Royal Commission, that he was not a fit and proper person to be, or act as, someone referred to in s 24(1) of the Insurance Act. However, that question does not arise. Not do we need to consider the questions (which were not debated) as to the proper construction of the powers of APRA, the inter-relationship of the two Acts and the relevant sections of the Criminal Code Act 1995 (Cth), including the place of any defences to alleged breaches of s 6M founded on a statutory authority or bona fide exercise of public powers. 79 The answer given to the second preliminary question by the primary judge was correct. Insofar as the appeals relate to that answer, the appeals should be dismissed.

CONCLUSION 80 Both appeals should be dismissed with costs. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Emmett, Allsop and Graham.

Associate: Dated: 22 March 2006 Counsel for the Appellants: Mr P Greenwood SC with Ms D Hogan-Doran Solicitor for the Appellants: Minter Ellison Counsel for the Respondent: Mr J Stevenson SC with Ms Allars and Mr G Pulsford Solicitor for the Respondent: Sparke Helmore Date of Hearing: 2 March 2006 Date of Judgment: 22 March 2006