That is so even if the Legal Services Commissioner purports to compel the information, for in the case of investigations of non-client complaints, the client’s or former client’s privilege trumps the Commissioner’s powers of compulsion.  If you have already disclosed privileged communications, assuming that the Commissioner had the power to compel you to do so, you should be aware that the disclosed communications may well still be privileged notwithstanding the disclosure to the Commissioner, and so unable to be used against you in a disciplinary prosecution arising from the investigation, and you should probably advise your client or former client.

Until recently, the Commissioner took the view that legal professional privilege was impliedly abrogated in the case of non-client complaints by necessary intendment of the Legal Profession Act, 2004.  Not so.  The reasons why follow below.  These propositions are good law in VCAT’s Legal Practice List, at least.

Remember that it is still the common law which regulates legal professional privilege for the purposes of Legal Services Commissioner investigations and (except to the extent that it adopts the Evidence Act, 2008 in any particular proceding) in VCAT’s Legal Practice List.

When a client lodges a disciplinary complaint against a lawyer, she is deemed to have waived legal professional privilege to the extent necessary to allow the lawyer to respond to the complaint: s. 4.2.15, Legal Profession Act, 2004.  When someone other than the client is the complainant, the client’s privilege is unaffected. Section 4.4.16, which refers to complaints by clients and non-clients alike, says only that a solicitor may not decline to answer questions posed by the Legal Services Commissioner in disciplinary investigations on the basis of any duty of confidence.  The lawyer’s duty of confidence is different from the circumstances in which legal professional privilege arises.  It is more extensive: everything that is privileged is confidential in the sense relevant for the law of privilege, but not everything that is confidential is privileged; not by any means.

Given the different and precise treatment afforded to all complaints (including non-client complaints) on the one hand, and only complaints by clients on the other, any argument that the Act necessarily evinces an intention on the part of parliament to abrogate legal professional privilege in the case of a non-client complaint has a difficult path.

Any privilege which exists is, axiomatically, the client’s rather than the solicitor’s: Spalding v Radio Canberra Pty Ltd (2009) 166 ACTR 14 at 17.  But that does not mean that the solicitor may not assert the privilege in objecting to answering a question the answer to which would disclose privileged information.  In fact, lawyers have an obligation, even after the termination of their retainer,  to assert and protect the client’s privilege: Re Stanhill Consolidated Ltd [1967] VR 749 at 752; c.f. Legal Services Board v Garde-Wilson [2007] VCAT 1406 at [89].

Because only the client can waive privilege, any disclosure by a former solicitor in response to a purported compulsion by the Legal Services Commissioner without the consent of the client will not amount to waiver. That is because only the client can waive the privilege, and a former solicitor has no authority to waive the former client’s privilege on the former client’s behalf.  It is not the case that once a privileged communication has been let out of the bag, it is too late to put it back in. No less an authority than the Privy Council said exactly this: ‘The cat is still a cat. It can be put back in the bag.’ B v Auckland District Law Society [2003] UKPC 38 at [69]. Even where evidence of privileged communications has been erroneously allowed into evidence, through no fault of the privilege holder, and then referred to in publicly available written reasons in a case of great public interest (Rolah McCabe’s negligence claim against manufacturers of her cigarettes), the Court of Appeal has made orders requiring the cat to be put back into the bag to the extent possible by ordering all copies of them to be returned to the privilege holder, and a retrial conducted without reference to the privileged communications. See British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 at [192].

There is a case which suggests that an old Western Australian statute dissimilar to the Legal Profession Act, 2004 impliedly abrogated legal professional privilege by necessary intendment: Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217, albeit not in the context of non-client complaints, or even disciplinary complaints. But the Privy Council’s decision in B’s Case, above, does not seem to have been brought to the Court’s attention.  I blogged about the Privy Council decision here.  When I last looked, that decision had never been cited in Australia, and it is, as far as I know, relatively unknown in Australia, avid readers of this blog apart.

Other cases in other contexts tend to support the sanctity of the privilege in controversies originated by non-clients:

(a) where a non-client seeks a wasted costs order against his adversary’s lawyer, he must make out his case without recourse to privileged communications to which the respondent lawyer was party: UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd [2004] VSC 105, per Justice Habersberger at [45]ff, and the authorities there referred to;

(b) beneficiaries have standing to lodge costs disputes (a form of civil complaint) in respect of executors’ lawyers, but in Sinni v Esposito [2009] VCAT 135, VCAT’s Senior Member Howell held that the respondent solicitor was not entitled to give evidence of communications protected by client legal privilege in the absence of a waiver by the privilege holder.

When considering your obligation not to deliver up privileged documents, or otherwise divulge the contents of privileged communications, you should be aware of the scope of the advice limb of the privilege insofar as it relates to solicitor-client communications.  All those communications which are part of “… the continuum of communication and meetings between the solicitor and client ..” (Balabel v Air India [1988] 1 Ch 317 at 330 per Taylor LJ) should properly be construed as “… professional discourse in a professional capacity, with reference to transactions covered by a retainer to provide legal advice [and therefore] will be regarded as prima facie for the purpose of giving or receiving advice” (Wenkart v Australian Federal Police unreported, Federal Court of Australia, 11 November 1996, per Branson J). See generally AWB Limited v Cole [2006] FCA 571 at [85] – [100].

If you are unable to answer the complaint because of legal professional privilege, that might well be a reason for insisting on the summary dismissal of the dispute; depending on the circumstances, it might be intolerably oppressive to have to answer the allegations without recourse to your instructions.  Of course sometimes that will not be the case.  If a non-client accuses you of doing something that you did not do, the question of privilege may be irrelevant: you just deny the conduct.  On the other hand, it may be that your instructions provide powerful circumstantial evidence that it is inherently unlikely that you would have done what you did: for example, you might have advised your client of the forensic undesirability of exactly the course of conduct it is alleged you engaged in, or something your client said might suggest that it was in fact the client who engaged in the relevant conduct rather than you.  In the absence of that evidence, you might be faced with a clash of oral evidence between two individuals of approximately equal credibility, and the unavailability of the circumstantial evidence might make the investigation oppressive.

The legal regulator received nearly 180 complaints about one of New Zealand’s big three firms, in relation to one series of bloodstock partnerships promoted by the firm, which went spectacularly bad (I remember a high flying New Zealander I bumped into on a beach in Samoa chewing my ear off about the affair upon learning that I was a solicitor; to read more see Anthony Molloy QC‘s Thirty Pieces of Silver).  The regulator exercised powers under s. 101(3) of the Law Practitioners Act 1982 (NZ), which said it:

‘(d) May require the production for inspection by the District Council or committee or any person so employed by it of any books, documents, papers, accounts, or records that are in the possession or under the control of the person complained against or, as the case may require, his employer and that relate to the subject-matter of the inquiry.

(e) May require the person complained against and, if the case so requires, his employer to give all information in relation to any such books, documents, papers, accounts, or records that may be reasonably necessary for the purposes of the inquiry.’

The Privy Council said there was no balancing exercise between a lawyer’s right to defend himself and the public policy which informs the privilege.  The boundaries of legal professional privilege are already the result of a balancing of competing public interests.  It is fundamental to the administration of justice generally that clients be entitled to be candid with their lawyers.  If it were known that lawyer-client confidence was subject to any investigation into the lawyers’ conduct, the necessary confidence would be diminished.  The Act did not expressly abrogate the privilege, and it was not the case that, logically, there was no way the Act could work without reference to privileged documents.

Furthermore, the court held that when the firm had earlier provided papers to the regulator in response to an invitation to do so voluntarily, that was not the end of the story, as it would have been had the law been so simple as that once the cat is out of the bag, it cannot be put back in.  The Privy Council said:

’66.  The Court of Appeal rejected the Society’s contention that privilege could not be waived for a limited purpose and continue to be maintained as an objection to any wider use. The Society renewed its argument before the Board. Privilege, the Society submitted, is merely a right to resist compulsory disclosure. Once disclosure has occurred, it is no longer a question of privilege. Ex hypothesi a right to resist disclosure cannot be invoked against the person to whom disclosure has already been made. If he is to be restrained from making use of the information, it must be on the ground that the information is confidential. But the equitable right to the protection of confidential information may be outweighed by a countervailing public interest in having the information made available. In the present case the Judge held that the public interest would have prevailed over the firm’s rights to preserve confidentiality.

67. Their Lordships agree that privilege is a right to resist the compulsory disclosure of information. It has been so characterised in numerous authorities. It is sufficient to cite a passage from the judgment of Hoffmann J in Black & Decker Inc v Flymo [1991] 1 WLR 753, 755:

“It is not possible to assert a right to refuse to disclose in respect of a document which has already been disclosed. Once the document has passed into the hands of the other party the question is no longer one of privilege but of admissibility.”

68.  The Society’s argument, put colloquially, is that privilege entitles one to refuse to let the cat out of the bag; once it is out of the bag, however, privilege cannot help to put it back. Their Lordships observe that this arises from the nature of privilege; it has nothing to do with waiver. It does not follow that privilege is waived generally because a privileged document has been disclosed for a limited purpose only: see British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113: Bourns v Raychem Corporation [1999] 3 All ER 154. The question is not whether privilege has been waived, but whether it has been lost. It would be unfortunate if it were. It must often be in the interests of the administration of justice that a partial or limited waiver of privilege should be made by a party who would not contemplate anything which might cause privilege to be lost, and it would be most undesirable if the law could not accommodate it.

69.  The Society argued that, once the documents were produced to Mr Ennor, they ceased to be privileged. Their Lordships consider that this is playing with words. It confuses the nature of the documents with the rights to which the arrangements with Mr Ennor gave rise. The documents are privileged because they were created for the purpose of giving or receiving legal advice. If they are not produced voluntarily, production cannot be compelled. If they are produced voluntarily, the right to withhold production no longer attaches to them. In that sense the privilege may be said to be lost. But they are the same documents, and it is not inappropriate to describe them as privileged. Their inherent characteristics are the same. The policy which protected them from unauthorised disclosure is the same. The cat is still a cat. It can be put back in the bag.’

But the Law Society had the documents, and the solicitors wanted them back.  How to achieve it?  The Privy Council provides the answer.  To understand, it is necessary to know that the earlier voluntary provision of the documents which became controversial had been upon terms, namely:

‘on the express basis that, in doing so, privilege is not waived, and that the documents will not be further copied by [the QC whom the legal regulator appointed to investigate the complaints]‘.

The Court said:

’70.  There is another confusion also. The appellants want to recover the documents because they are privileged. But they do not rely on privilege to found their cause of action. A party who has parted with possession of documents may have a right to recover possession on any one of a number of grounds. He may reclaim them because they belong to him; or because he has a contractual right to recover them; or because they are confidential; or because he has parted with them for a limited purpose and equity will not permit the recipient to retain them once that purpose is fulfilled. In the present case the documents are both privileged and confidential, but the appellants do not rely on privilege or confidentiality to found their claim to recover them. They rely on the terms of the arrangements under which they were supplied and the limited purpose for which they permitted use to be made of them. Their case is that there is no legal basis on which the Society can retain and make use of the documents free from the limitations which Mr Lusk imposed and Mr Ennor accepted.

71.  The fact that the claim to recover the documents is made on equitable grounds does not mean that it must yield to an overriding countervailing public interest. The documents are both confidential and privileged. Whether a claim to the return of such documents is based on a common law right or an equitable one, the policy considerations which give rise to the privilege preclude the Court from conducting a balancing exercise. A lawyer must be able to give his client an unqualified assurance, not only that what passes between them shall never be revealed without his consent in any circumstances, but that should he consent in future to disclosure for a limited purpose those limits will be respected: see Goddard v Nationwide Building Society [1987] 1 QB 670, per Nourse LJ at p 685.’

The Society undertook not to provide the proof of evidence to the complainant, and reassured him that the legal professional privilege he enjoyed over it would be unaffected by his providing it to the Society.  Justice Toohey commented at 110 ‘Arguably, the Society should not have given the undertaking in carrying out its function of inquiring into the complaint made against Mr Goldberg.’

The Society did not follow its usual course of requiring a written response to the complaint.  It based its decision on the proof of evidence, but did not provide it or its contents, or even a summary, to the complainant.  It dismissed the complaint by the following letter:

‘I refer to previous correspondence and advise that the investigation of this complaint has been completed and the Society’s Complaints Committee has resolved to dismiss it on the grounds that it does not involve a question of professional misconduct or unsatisfactory professional conduct.

The reasons for this decision are as follows:-

1. As the matter is now presented the Committee was not satisfied that there was any evidence of professional misconduct or unsatisfactory professional conduct.

2. The complainant should pursue his own remedies as his solicitors have indicated.’

The plurality (Justices Deane, Dawson and Gaudron) commented at 90:

‘In circumstances where the summons and supporting affidavit, of which copies had been delivered to the Law Society, alleged a failure by Mr Goldberg to account for over $100,100 paid to him (through his wife as agent) as a solicitor on account of legal costs, it is difficult to understand what was meant by the assertion, in the above letter, that the complaint “does not involve a question of professional misconduct or unsatisfactory professional conduct”. Nor is it apparent what was meant by the statement that the Committee was not satisfied that there was any evidence of professional misconduct or unsatisfactory professional conduct “(a)s the matter is now presented”. Be that as it may, it is clear that the letter from the Law Society was intended to be seen, and was seen by the solicitors for Mr Ng, as a rejection of the complaint of misconduct against Mr Goldberg and as a denial, at least at that stage, of any entitlement by Mr Ng to payment from the Solicitors’ Fidelity Fund.’

Justice Toohey commented at 110:

‘The letter did not elaborate on the first reason.  Arguably, the Society did not afford natural justice to Mr Ng in dismissing the complaint without informing him of the material provided by Mr Goldberg and of the part (if any) it played in that dismissal. But these are not the questions raised by this appeal.’

Original post: I acted for a fellow whom the Law Institute as delegate of the Legal Services Board was purporting to investigate, and noticed for the first time what a rich repository of crimes is the Legal Profession Act, 2004. Two are punishable by imprisonment of up to 5 years or more: s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and s. 5.5.15 (interfering with property to defeat a receivership of a law practice). A third, s. 2.2.2(1) (unqualified practice) is punishable by up to 2 years’ imprisonment respectively. Eight are punishable by fines of up to about $27,000, about 25 by fines of up to about $13,500, about 57 by fines of up to about $7,000, and another 14 by fines of between up to about $500 and about $2,500. That’s over 100 crimes.  As far as I know, the only conviction is likely to have been under s. 3.3.21.

All of the offences punishable only by fines are summary offences: 600 penalty units (a fine of about $68,000) and imprisonment for up to 5 years being the level of seriousness which brings offences into the indictable category: see s. 112 read with s. 109 of the Sentencing Act, 1991.  So s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and 5.5.15 (interfering with property to defeat a receivership of a law practice) appear to be the only indictable offences created by the Act.  They may be prosecuted at any time, while all those punishable by fines, and unqualified practice, are summary offences which may generally be prosecuted only within 12 months after the allegedly criminal conduct occurred, by virtue of s. 26(4) of the Magistrates’ Court Act.  Do not allow an investigator under the Legal Profession Act, 2004 to investigate a summary offence if the conduct allegedly occurred more than a year beforehand!  (Whether the Legal Services Commissioner may entertain a disciplinary complaint more than a year after the relevant conduct is a more difficult question. See this post.)

I really wonder about the social utility of having all those crimes there. More and more crimes are created, and no less criminal activity is achieved.  Furthermore, no one (including some of the regulators, I suspect) knows that at least some of them are there, they have no dissuasive effect, and no one ever gets prosecuted.  One of the more interesting musings about the law I have read was Lord Justice Mummery’s address to the 24th Symposium of Economic Crime at Jesus College.  He pointed out that in the previous quarter century, Britain had created 3,000 new crimes, without achieving any greater lawfulness. Au contraire, he seems to have suggested. There are crimes which are routinely identified and not prosecuted (unqualified practice being an excellent example, which is usually dealt with instead by an application for an injunction to restrain it).  Regulators have unfettered prosecutorial discretion: the courts will not entertain a suit to restrain a prosecutor from prosecuting a crime on the basis that the prosecutor has been inconsistent or selective in prosecuting the putative claimant compared with others.  But there comes a point where the informed bystander will legitimately think that the regulatory prosecutor, having stood by having detected crimes and repeatedly done nothing about them, is just throwing the book at the person who does get prosecuted as a means of persecuting the individual for other characteristics disliked by the prosecutor. Whatever the law may say on the subject, the bloke who’s singled out for prosecution while everyone else gets away with it with impunity legitimately feels hard done by. It looks unfair, and diminishes confidence in the system of criminal justice, as does having a whole lot of criminal offences which everyone knows are never going to be prosecuted. This is not a reflection on the matter in which I acted, incidentally, but a broader rumination prompted by it in the context of Lord Justice Mummery’s comments.

First, the High Court has recently considered the need for speed in criminal proceedings, and were not nearly as excited about it as in commercial litigation. This time, they rolled the court below for saying that enough delay was enough and staying a criminal prosecution that had hung around for too long, resulting in the loss of exculpatory evidence.  The decision in R v Edwards [2009] HCA 20 might have application by analogy in disciplinary cases. It is blogged about at Quis Custodiet Ipsos Custodes, and there is a short note in the latest Law Institute Journal.

Secondly, delay by the Legal Services Commissioner has had a consequence in a serious disciplinary prosecution.  Parliament requires the Bureau de Spank to conduct their investigations ‘as expeditiously as possible’, and to give the complainant progress reports at least 6 monthly: s. 4.4.12, Legal Profession Act, 2004.  If the Commissioner complies with these injunctions, the degree of expedition which is possible is not always great.  In fact, sometimes the rate at which investigations progress is astonishing.  So glacial can progress be that the possibility that climate change sceptics might actually have some kernel of truth buried away beneath all of their hot air (-not) begins to nag at you.  There is a letter in the latest Law Institute Journal complaining about the Commissioner’s April 2009 response to a solicitor’s September 2008 letter (August 2009, p. 10).

An unexplained period of apparent inactivity of 18 months was taken into account in favour of the lawyer prosecuted for misconduct in Legal Services Commissioner v ER [2009] VCAT 1445.  This is a factor which might be brought to bear in many a plea in a disciplinary prosecution.  What Judge Ross’s tribunal said on this issue is:

‘Delay
74 Mr [R] contends that the determination of this matter has been delayed as a consequence of the Applicant’s inaction.  In particular the Respondent refers to the delay from 18 April 2007 and until 29 September 2008.

75 The reference to 18 April 2007 arises because this is the date on which Mr [R]’s lawyers sent a letter to the Commissioner setting out a range of matters which the Commissioner was asked to take into account in deciding what action, if any, should be taken under s 151 of the 1996 Act (the Nicholson’s letter).  Section 151 deals with what happens after an investigation into a complaint is completed.  Subsection 151(2) provides, relevantly, that an RPA must bring a charge to the Tribunal against the legal practitioner the subject of the investigation if satisfied that there is a reasonable likelihood that the Tribunal would find the practitioner guilty of misconduct.

76 The Respondent says that during the period of about 18 months from 18 April 2007 until 29 September 2008 neither he nor his solicitor heard from Professional Standards or the Applicant.  It is submitted that this delay remains unexplained and inexplicable.

77 The Commissioner’s written submissions of 13 May 2009 address the issue of delay and assert that the bulk of the delay in this matter has been caused by Mr [R] raising unmeritorious arguments in his defence which have necessitated investigation and consideration by the Commissioner.

78 We accept that a number of the propositions advanced on Mr [R]’s behalf in the Nicholson’s letter of 18 April 2007, lacked merit.  We also accept that the matters raised would have necessitated investigation and consideration by the Commissioner.  But while these matters could reasonably be expected to take some time, perhaps a period of up to six months, we are not persuaded that VCAT Reference No. they adequately explain the delay of about 18 months between 18 April 2007 and 29 September 2008.

79 It follows that the Applicant has been responsible for a delay of 12 months in having these matters determined.  The fact that the Respondent’s actions may have contributed to an additional delay (ie. over and above this 12 months) is not to the point.  The Respondent only relies on the delay occasioned by the Commissioner’s inaction.

80 The 12-month delay attributable to the Commissioner is a mitigating factor [footnote: R v Kane [1974] VR 759 at 767; see generally Fox, RG, ‘Criminal Delay as Abuse of Process’ (1990) 16 Monash University Law Review 64] and we have taken it into account in determining an appropriate penalty.’

Outside litigation, however, the main source of powers to compel the production of documents and the disclosure of information is statute, and the main repository of them mandarins.  When a mandarin (disguised say as a Commissioner, or an Inspector) obtains information by compulsion, there is an important limit on what the mandarin may do with it.  The important limit is that the information may only be used for the purpose the power of compulsion was bestowed.  This is a proposition which I vaguely knew I had read somewhere, but which has several times eluded me when I tried to look it up.  But now it’s back in my quiver, courtesy of Apache Northwest Pty Ltd v Agostini [2009] FCA 534.  The relevant High Court authority is Johns v Australian Securities Commission (1993) 178 CLR 384; [1993] HCA 56, which is posted about separately here.

Sometimes, as in Apache, the purpose for which the power may be exercised is stated in the provision providing for the power.  Other times it has to be discerned by a reading of the provision in its statutory context.  In Apache, the specific provision was rather unhelpfully general, however, stating that the power could only be used for the purposes of the Act in which it was found.  You can kind of hear the despondency in Justice McKerracher’s voice when he noted that the Act had no purposes provision.

Apache arose out of WA’s equivalent of our Longford incident: a gas plant operated by Apache exploded and Westralians had cold showers for a long time afterwards. The Varanus Island gas plant was one bit of engineering, but different bits of it were regulated by different statutes, depending on whether they were in State or Commonwealth waters, for example. State petroleum inspectors swooped in from mid-2008 and scooped up documents under s. 63 of the Petroleum Pipelines Act, 1969 (WA).  The inspectors held the office of Inspector personally.

This year, the Commonwealth and WA governments jointly set up an inquiry into various aspects of upstream petroleum operations (including Varanus Island, the main focus of the inquiry). Two panel members who possessed no powers of compulsion were appointed. Without Apache’s consent, the State of WA (presumably having been reported to appropriately by the inspectors) provided to the panel members the documents Apache had produced under the inspectors’ compulsion.

Justice McKerracher held that was illegal because some of the State’s purposes in doing so were alien to the purposes for which the inspectors had compelled the documents, even though most of the purposes for collection and the purposes of the enquiry to which they were donated were common.  The State’s purpose was to assist the joint State / Commonwealth inquiry, but its terms of reference included matters which had nothing to do with the Petroleum Pipelines Act, 1969, or the Varanus Island explosion (such as the cyclone emergencies which affected two ships involved in upstream petroleum supply 6 months later). At [120], his Honour said:

‘it is not to the point that you can find some of the purposes of the 1969 State Act reflected in the proposed work of the Panel. Once it was clear that the Panel intended to carry out functions which go beyond the purposes of the 1969 State Act, it cannot be said that the release is for the purposes of the 1969 State Act.’

His Honour continued:

’121.  In the terms of the 2009 Inquiry, it is clear that there is no expressed limitation to the 1969 State Act. Nor would that be expected. Clearly the Commonwealth and national interests were of very real importance. The Commonwealth was paying for it. As to its subject matter, the nature of the inquiry is to review regulations for all ‘upstream operations’. There is a reference to licences (ie plural) rather than the Apache licence PL 12 which applied under the 1969 State Act. The reference to the vessels could only be referable to an inquiry into the regulation for all ‘upstream operations’ in the terms of reference as distinct from matters pertaining to the 1969 State Act.

122.  The 2009 Inquiry is legitimately a joint inquiry looking at all of the upstream petroleum operations regardless of which legislation applies. But necessarily that takes it outside the scope of the 1969 State Act.

123.  Apache argue that the question is not, as framed by the respondents, that if you had an inquiry under the 1969 State Act limited to its purposes, could you rule out questions about another part of the pipeline or another licence on the grounds of relevance? The answer to that may well be no. However, in this situation the starting point is that the 2009 Inquiry is on its face much broader. It is not limited to matters governed by or the purposes of the 1969 State Act. The answer to the question which is posed by the parties cannot be determined by use of the converse approach, that is, by identifying matters in the 2009 Inquiry which are relevant to the 1969 State Act so as to establish that the disclosure is necessarily for the purposes of the 1969 State Act. Once you have an inquiry which is a review of regulation for all upstream operations including other licences and vessels, it is an inquiry necessarily beyond the purposes of the 1969 State Act. 

124.  The State point to the fact that the s 63 information could be obtained in other ways as Apache were under an obligation after the Varanus Island Incident to give the Director General of the State Department a written report giving ‘full information on the accident’: see regs 23 and 24 of the 1970 State Regulations. The Minister could also require the licensee to submit ‘such reports on the operation of the pipeline as the Minister may direct under the Act’: see reg 25 of the 1970 State Regulations. Licence conditions can and do require the production of documents to the Minister. As such, directions, regulations and licence conditions can and do give the State Minister the right to directly obtain from the licensee documents which may be required under s 63 of the 1969 State Act. In that statutory context the State argues that there is no basis for implying in the 1969 State Act any restriction on the provision of documents obtained under s 63 of that Act to the State Minister or his Department

125.  It may well be that the s 63 information could have been obtained for the benefit of the 2009 Inquiry through other legitimate means just as the s 63 information itself was originally acquired on a legitimate basis. However, the fact that the s 63 information was lawfully acquired and can be conveniently and pragmatically conveyed to the 2009 Inquiry is not an answer to the question posed by the parties which is whether the release of the information to the 2009 Inquiry was, at the time it was released, for the purposes of the 1969 State Act and the Regulations.’

48.  The sole issue is whether the release of the s 63 information to the Panel is for the purposes of the 1969 State Act or Regulations. The reason this issue is central to Apaches’ complaint is because of the statement of principle articulated in Johns v Australian Securities Commission [1993] HCA 56; (1993) 178 CLR 408 at 424.

49.  It is desirable, in my view, to focus, as did senior counsel for Apache, on the facts of Johns’ case as those facts do provide at least an indication, as to circumstances in which the principle established in Johns’ case may fall for consideration. The facts in Johns were that in September 1990 the Government of Victoria appointed a Royal Commission to inquire into the affairs of the Tricontinental group of companies of which Mr Johns was, for each such company, the Managing Director. At the same time the Attorney General for Victoria gave a ministerial direction to the National Companies and Securities Commission (NCSC) to arrange for an investigation into the affairs of Tricontinental by the same Royal Commissioners. On the same day, the NCSC appointed the Royal Commissioners as inspectors to carry out the investigation. However, before the Royal Commissioners embarked on their hearing, the functions of the NCSC devolved to the Australian Securities Commission (ASC). In February of the following year, the ASC delegated to Ms Megay its powers and functions under Pt 3 of the Act pursuant to which Mr Johns was given a notice to appear for examination before Ms Megay in relation to the investigation of the activities of the Tricontinental group. Under compulsion he appeared before her on a number of occasions and answered questions. Transcripts of the hearings were then given to the Royal Commission. Ms Megay also gave written permission for the Royal Commission to use the transcripts in a public hearing. When copies of those transcripts were tendered in evidence at the public hearing, the Royal Commission made copies available to the media. In the following year, Mr Johns brought a proceeding in this Court for review of the decision of the ASC which resulted in the handing over of the transcripts to the Royal Commission and for orders against media bodies restraining further publication of them. That application was dismissed. The decision to dismiss was subsequently affirmed on appeal by a majority of a Full Court of this Court. Special leave was given to appeal to the High Court on the validity of the decision by Ms Megay to release the transcripts to the Royal Commission in circumstances which allowed the information to be published generally.

50.  Brennan J (at 423-425), as his Honour then was and with whom Dawson J (at 435), Gaudron J (at 458) and McHugh J (at 467) relevantly agreed, observed:

Information is intangible. Once obtained, it can be disseminated or used without being impaired, though dissemination or use may reduce its value or the desire of those who do not have it to obtain it. Once disseminated, it can be disseminated more widely. A person to whom information is disclosed in response to an exercise of statutory power is thus in a position to disseminate or to use it in ways which are alien to the purpose for which the power was conferred. But when a power to require disclosure of information is conferred for a particular purpose, the extent of dissemination or use of the information disclosed must itself be limited by the purpose for which the power was conferred. In other words, the purpose for which a power to require disclosure of information is conferred limits the purpose for which the information disclosed can lawfully be disseminated or used. In Marcel v Commissioner of Police of the Metropolis [[1992] Ch. 225, at p 234. The Vice-Chancellor’s view in this respect was affirmed on appeal: see [1992] Ch., esp. at pp. 261, 262.] Sir Nicolas Browne-Wilkinson V-C said, in reference to a statutory power conferred on police to seize documents:

“Powers conferred for one purpose cannot lawfully be used for other purposes without giving rise to an abuse of power. Hence, in the absence of express provision, the Act cannot be taken to have authorized the use and disclosure of seized documents for purposes other than police purposes.”

And in Morris v Director of the Serious Fraud Office [[1993] Ch. 372, at p. 381], Sir Donald Nicholls V-C said in reference to information acquired by exercise of statutory powers:

“The compulsory powers of investigation exist to facilitate the discharge by the SFO of its statutory investigative functions. The powers conferred by s 2 are exercisable only for the purposes of an investigation under s 1. When information is obtained in exercise of those powers the SFO may use the information for those purposes and purposes reasonably incidental thereto and such other purposes as may be authorized by statute, but not otherwise. Compulsory powers are not to be regarded as encroaching more upon the rights of individuals than is fairly and reasonably necessary to achieve the purpose for which the powers were created. That is to be taken as the intention of Parliament, unless the contrary is clearly apparent.”

A statute which confers a power to obtain information for a purpose defines, expressly or impliedly, the purpose for which the information when obtained can be used or disclosed. The statute imposes on the person who obtains information in exercise of the power a duty not to disclose the information obtained except for that purpose. If it were otherwise, the definition of the particular purpose would impose no limit on the use or disclosure of the information. The person obtaining information in exercise of such a statutory power must therefore treat the information obtained as confidential whether or not the information is otherwise of a confidential nature. Where and so far as a duty of non-disclosure or non-use is imposed by the statute, the duty is closely analogous to a duty imposed by equity on a person who receives information of a confidential nature in circumstances importing a duty of confidence.

A person who obtains information in exercise of the powers conferred by s 19 of the Act comes under a statutory duty of confidence with respect to the information thus obtained. It is therefore important to ascertain the purposes for which such information can be legitimately used or disclosed. In the first place, the power conferred by s 19 of the Act to require a person to appear for examination and to answer questions is conferred for the purpose of obtaining “information relevant to a matter that [the ASC] is investigating, or is to investigate, under Division 1″ of Pt 3 of the Act. So the information acquired by conducting a s 19 examination may be used for the purposes of such an investigation. In addition, s 127(3) authorizes disclosure of otherwise confidential information by, inter alia, the members and staff members of the ASC for the purposes of performing the official functions of the person making the disclosure. As investigations are but some of the functions of the ASC (most of which are prescribed by Pt 2 of the Act) the Act contemplates that information acquired on examinations under s 19 may be used and disclosed for the purpose of the performance or exercise of any of the functions of the ASC Then, certain purposes other than the performance of the functions of the ASC are approved by sub-ss (2) and (4) of s 127. Information obtained in exercise of the powers conferred by s 19 may therefore be used or disclosed for the purpose of the performance of any of the functions of the ASC and for any of the purposes mentioned in sub-ss (2) and (4) of s 127. But for no other purpose.

The purposes for which information may legitimately be used or disclosed are one thing; the means by which information is used or disclosed are another. Section 127 of the Act relates to purposes; s 25(3) relates to means. The two provisions must be read together. Section 25(3) cannot be read as conferring a broad discretionary power to disseminate information obtained in exercise of powers conferred by s 19 [I am, with respect, unable to accept a view of s 25(3) as broad as that embraced by the Full Court of the Supreme Court of Western Australia in interpreting s 298(8) of the Companies (Western Australia) Code in Wardley Australia Ltd. v. Attorney-General (W.A.) (1991), 5 W.A.R 453, at p. 468.]. The power conferred by s 25(3) must be exercised consistently with the provisions of s 127 so that the giving to a person of “a copy of a written record of the examination … together with a copy of any related book” under s 25(3) is authorized only if it be for a purpose consistent with s 127. Section 25(3) can be read as authorizing the ASC to give copies of a transcript to another person in cases in which the disclosure of the information contained therein is authorized by s 127(2), (3) or (4). Or s 127(2), (3) or (4) can be read as themselves authorizing the employment of appropriate means (including the giving of transcripts) by which to disclose the information that can legitimately be disclosed in accordance with those sub-sections. It matters not whether those provisions be read in one way or the other. The extent of the authority to give a transcript is the same: it is a limited authority. (emphasis added)

51. The language of Brennan J is deliberate. His Honour describes dissemination of information ‘in ways which are alien to the purpose for which the power was conferred’. His Honour stresses that when a power to require a disclosure of information is conferred for a particular purpose, the extent of dissemination or use of the information disclosed must itself be limited by the purpose for which the power was conferred. (emphasis added) In Katsuno v The Queen [1999] HCA 50; (1999) 199 CLR 40 (at [24]) the High Court approved of Brennan J’s analysis in Johns [1993] HCA 56; 178 CLR 408 (at 424). It held that the practice of the Chief Commissioner of supplying details or information obtained as a result of inquiries made pursuant to s 21(3) of the Juries Act to a prosecutor (as happened in that case), or to anyone else other than the Sheriff prior to the delivery of a copy of the panel in open court was unlawful and, if necessary, its continuance could be restrained by injunction: see also Gleeson CJ at [2], McHugh J at [54] and Kirby J at [110].’

‘Yep, sorry, I didn’t respond.  I was, like, really stressed at the time and had quite a lot of work on.  It’s not professional misconduct, it’s only unsatisfactory professional conduct. I’ll pay the $1,000 fine. Can we agree on a reasonable sum for costs?’

It is a sensisble strategy if it’s true, and a doubtful strategy if it’s bollocks.  But then if it’s bollocks, it’s hard to know what is a sensible strategy.  Up in New South Wales, though, they attack the validity of the notice, contending that there can be no punishment for failing to comply with a notice which is invalid.  The barrister did not get very far in NSW Bar Association v Howen [2003] NSWADT 117 (indeed it is likely he travelled backwards), but I kind of dig his misguided chutzpah.  That was an attack on a notice under s. 152 of the Legal Profession Act, 1987 (NSW).  It was a bit different from the old Victorian s. 149.  (In NSW, see now s. 660 of the Legal Profession Act, 2004 (NSW).) The Tribunal did say at [11] that:

‘a notice calling upon a person to respond, in circumstances where a failure to respond may have adverse legal consequences to the person, must be expressed with sufficient clarity to enable the recipient to comprehend what is required of him.’

Actually, it’s coming back to me: a spunky barrister just starting out in her career took on the might of the State in a recent Victorian disciplinary prosecution, and contested the validity of the s. 4.4.11 notice.  Her argument was that the Bureau de Spanque did not have jurisdiction to investigate the solicitor’s conduct because the complaint was about what he did qua migration agent, the sole Bureau responsible for whom was the Bureau MARAis.  It was a nicely put together argument, but ultimately it failed  on the construction of the interrelationship of the Migration Act, 1958 and the Legal Profession Act, 2004 adopted by Deputy President Ross. Legal Services Commissioner v Jonathan W [2009] VCAT 318 is an interesting and important decision for other reasons.  I keep meaning to finish my post about it.  Remind me.

’7 No doubt part of the problem for the LIV is the patently broad description adopted by the Commissioner to describe the documents sought in the exercise of his statutory power. A failure by a recipient to comply with a notice under s 264 carries with it a substantial jeopardy of sanction. The law has long been established that the Commissioner may use his statutory powers of investigation to undertake what are frequently described as “fishing” enquiries. The existence of the power, and its breadth extending to fishing enquiries, does not absolve the Commissioner from an obligation to exercise the powers wisely and responsibly. The description adopted by the Commissioner for the first category of documents is broad and of its nature potentially cast upon the recipient of the Notice a burden which is disproportionate to the likely benefit to the Commissioner by the LIV’s compliance. The two affidavits filed by Mr Cheetham on behalf of the Commissioner make no attempt to indicate that the information sought by the first category could not be obtained from other sources. Mr Cheetham’s first affidavit does little to “assist” the Court in the task of having to balance competing policies beyond expressing his view that the documents sought “are likely to make a unique contribution to the audit” into [the business and financial affairs of the solicitor in whom the Commissioner was interested]; no explanation of that assertion is given. His second affidavit goes little further by saying that he had reviewed the information in the Commissioner’s audit files and on the basis of his review of the list of documents provided by the LIV had formed an opinion that it was “distinctly possible” that the information contained in the documents held by the LIV might be of some assistance in the audit. No further assistance was given to the Court by Mr Cheetham or by submissions for the Commissioner and no attempt was made to explain why it was a responsible exercise of statutory power by the Commissioner to cast upon another regulatory authority a burden to provide documents by reference to such broad descriptions in the exercise of a statutory power which carried with it potential sanction upon the other regulatory authority for failure to comply. A consequence of a broad description by the Commissioner is inevitably that he will be requiring more than is likely to be of assistance to his investigation, that he will put a burden upon independent regulators which might not be justifiable as a matter of proper administration, and which may unnecessarily expose other regulators to the risk of sanction.

8 In any event, whatever my misgivings about the Commissioner’s exercise of statutory power in the way in which it has occurred, no objection to the Notice was made by the LIV on the grounds of invalidity or excess of power.’