Attorney-General (Cth) v Legal Research Pty Ltd [1992] QSC 69

TRANSCRIPT OF .. PROCEEDINGS State Reporting Bureau, 4th F1oor, The Law Courts, George Street, BRISBANE, 0. 4000 Tel. (07) 227.4360 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WILLIAMS J No 286 of 1992 THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA and LEGAL RESEARCH PTY LTD trading as MODERN ENGLISH LANGUAGE COLLEGE OF AUSTRALIA BRISBANE .. DATE 19/ ,3/92 JUDGMENT 1 REVISED cOP'iE~E7J'' c Cocrt f"/epcrtin::; Burea:J i L~~::d!.~l_!_22-__j Plaintiff Defendant -- 1 of 17 -- 190392 JUDGMENT HIS HONOUR: I have prepared reasons for judgment which I publish. There will be judgment for the plaintiff in the action 10 against the defendant and I will make an order that the 10 defendant within 14 days after serving upon it of the order comply with the requirement of a notice pursuant to s 5 subs 1 of the Overseas Students Refunds Act 1990 dated 31 January 1992 and signed by John Muir. 20 20 I further will order that the defendant pay the plaintiff's costs of and incidental to the action including this application to be taxed. 30 30 40 40 I .,I Ii 50 50 60 2 -- 2 of 17 -- IN THE SUPREME COURT OF QUEENSLAND No. 286 of 1992 Before Mr. Justice G.N. Williams BETWEEN: THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA Plaintiff ·LEGAL RESEARCH PTY. LTD. trading as MODERN ENGLISH LANGUAGE COLLEGE OF AUSTRALIA Defendant JUDGMENT - G.N. WILLIAMS J. Delivered the day of March, 1992. CATCHWORDS: Injunction -·mandatory- in aid of enforcement of criminal law- s. 5 Overseas Students (Refunds) Act 1990 · (Commonwealth) considered - statutory obligation to provide information goes beyond mere breach of criminal law - Gouriet v. Union of Post Office Workers (1978) A.C. 435 considered and applied - two previous convictions for offence of failing to provide information - injunction requiring giving of information granted. Counsel: Solicitors: Mr. P. Hack for Plaintiff. Mr. R. Chesterman Q.C. and G.C. Martin for Defendant. Australian Government Solicitor for Plaintiff. Francis & McGregor for Defendant. Hearing date: 6th March, 1992 -- 3 of 17 -- IN THE SUPREME COURT OF QUEENSLAND No. 286 ·of 1992 BETWEEN: THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA Plaintiff LEGAL RESEARCH PTY. LTD. trading as MODERN ENGLISH LANGUAGE COLLEGE OF AUSTRALIA Defendant JUDGMENT - G.N. WILLIAMS J. Delivered the day of March, 1992. Notwithstanding that it had been convicted and fined on two previous occasions for failing to comply with notices issued pursuant to s. 5 of the Overseas Students (Refunds) Act i990, the defendant again failed to comply with such a notice dated 31st January, 1992 and served on 4th February, 1992. In consequence, the Attorney-General of the Commonwealth, has applied for a final order, relying on 0. 57 r. 2 of the Rules of the Supreme Court, that the defendant, within 14 days after service upon it of the order, comply with the requirements of a notice pursuant to s. 5(1) of the Overseas Students (Refunds) Act 1990 dated 31st January, 1992 and signed by John Muir. Effectively the plaintiff is seeking a mandatory injunction forcing the defendant to comply with the provisions of a statute with respect to which there is provision for a pecuniary penalty on breach. The application is resisted primarily on the basis that in accordance with the principle reaffirmed by the House of Lords in Gouriet v. The -- 4 of 17 -- 2 Attorney-General (1978) A.C. 435, this is not an appropriate case in which to "enforce compliance with the criminal law" by granting an injunction in the exercise of the court's equitable jurisdiction. The plaintiff filed affidavits in support of the motion, but the defendant sought to contend that some of the material therein was inadmissible. With a view to enabling the court to make a determination on the merits without deciding the questions of ·admissibility, the parties agreed upon a statement of facts for the purposes of the application; that document was marked ex. 2. As the argument developed it became obvious that the opposing parties were essentially contending for a different construction of or scope of operation for the statute. In order to answer the ultimate question, namely whether or not injunctive relief should be granted, it is necessary to determine the purpose or object of the Act, and in particular s. 5 thereof. That in my view called into play ss. 15AA and 15AB of the Acts Interpretation Act 1901 (Commonwealth). The "Explanatory Memorandum" circulated by the relevant Minister with respect to the Act was marked ex. 3, and the Minister's second reading speech was ex. "A3" to the affidavit of E.L. Fisher. Before the relevance of the particular facts of this case can be appreciated it is necessary, in my view, to have regard to the provisions of the statute and its underlying purpose or object. The following background information is taken from the extrinsic material to which I have referred. The purpose of the legislation is to facilitate the refunding of payments made by overseas students unable to -- 5 of 17 -- 3 undertake or complete courses of study in Australia. Prior to August 1989 the practice had developed whereby prospective overseas students (particularly from Asian countries) paid monies to Australian institutions in advance of receiving a visa to study in Australia. As a result of government decisions taken in August 1989 tighter entry and stay provisions were implemented; a consequence was that many potential students who had pre-paid for study·were not able to proceed with their plans to study in Australia. Such students understandably wanted refunds of the monies paid. Because of financial difficulties faced by a number of institutions the Government decided "to ensure that all outstanding refunds owed at 30th June, 1990 be discharged either by negot.iating loans to institutions equivalent to the amount of outstanding refunds owed by institutions or by direct payment to unsuccessful applicants in re.turn for an assignment .to the Commonwealth of their debt against the institution". In the latter case it was proposed the Commonwealth would take recovery action against the institution. The legislation was designed to facilitate the implementation of that government decision. The Government further proposed that refunds, whether financed by way of a loan to an institution or otherwise, would be paid direct to eligible claimants by the Commonwealth. When one looks specifically at the Act it is noted that the preamble provides that it is an "Act to facilitate the refunding of payments made by overseas students unable to undertake or complete courses of study in Australia, and for other purposes". Sections 3 and 4 are concerned with defining various concepts, -- 6 of 17 -- 4 including an "educational institution", for purposes of the legislation. Section 5, with which this application is primarily concerned, confers a power on the Secretary of the relevant Department to obtain information from an educational institution with respect to overseas students; I set out the relevant part later. Sections 6, 7 and 8 are directed to overcoming the problem of establishing the identity of assignors (being overseas students resident in foreign countries) for purposes of· proceedings taken by the Commonwealth for the recovery of an assigned debt. Section 9 defines and expands responsibility for an offence against s. 5; it should be noted that s. 5 creates the only substantive offences against the Act. The other provisions of the legislation are not relevant for present purposes. The relevant part of s. 5 provides as follows: "(1) The Secretary of the Department, or an officer of the Department authorised in writing by the Secretary to issue notices under this section, may, by a notice in writing, require an educational institution, or an agent of an educational institution, to supply, within fourteen days or such longer period specified in the notice: (a) the particulars of overseas students who are, or have been, enrolled at the institution, or from whom the institution has received money; or (b) the originals or certified copies ofspecified documents or records relating to such students or to any persons acting on behalf of such students; to the extent that the particulars, documents or other records are in the possession or control of the institution or agent. (2) An educational institution, or an agent of an educational institution, that receives such a notice and fails to comply with it is guilty of an offence. -- 7 of 17 -- 5 Penalty: $3,000.00 ( 3) An educational institution, or an agent of an educational institution, that, in purported compliance with such a notice, knowinglyfurnishes information that is false or misleadingin a material particular is guilty of an offence. Penalty: Imprisonment for 12 months." It can readily be seen that the legislation does not create any statutory cause of action for the recovery of an assigned debt; undoubtedly the Commonwealth would rely on the common law to establish its right as assignee to the chose in action. Section 5 is obviously designed to facilitate the necessary steps to be taken by the Commonwealth to ensure that overseas students entitled to a ref1,md actually receive the money. The information which is the subject of s. 5 would facilitate both the assignment of the debt from the overseas student to the Commonwealth (names, amount of money etc. ) , and the conduct of the subsequent litigation in which the Commonwealth sought to recover the debt from the educational institution. I now turn to the agreed facts of this case. At all material times the defendant carried on the business of English language tuition under the registered business name of Modern English Language College of Australia. It was accredited by the Department of Employment, Education and Training as an English Language Intensive Courses for Overseas Students institution on 23rd November, 1988. The Department has paid an amount approximating $1 . 4 million to 300 overseas students who had enrolled with the defendant and has obtained assignments from them. The Department alleges that those students have been unable to obtain a refund from the -- 8 of 17 -- 6 defendant. Since May 1990 the Department has been seeking information from the defendant pursuant to s. 5 of the Act. Initially that information was sought informally by correspondence but formal notices pursuant to s. 5 ( 1) were served on the defendant on 17th July, 1991, 18th September, 1991 and 14th November, 1991. Then the further notice referred to in the notice of motion was served on the defendant's solicitor on 4th February, 1992 pursuant to an undertaking to accept service. With respect to the notice dated 17th July, 1991 the defendant was convicted on 9th September, 1991 of ·an offence against s. 5(2) of the Act and fined $2,000.00; in addition it was ordered to pay costs totalling $3,908.75. The fine and cqsts have been paid. Then on 8th November, 1991 the defendant pleaded guilty to a further offencie under s. 5(2) of the Act in respect of the notice of 18th September, 1991. On that occasion it was fined $2,500.00 and ordered to pay costs of $48.75. The fine and costs have been paid. The recovery action by the Commonwealth against the .. defendant has not yet been commenced though, as noted, assignments have been received from some 300 students. Mr. Chesterman Q.C. for the defendant submits that in the circumstances the appropriate course for the Commonwealth to take is to commence the common law action and then by virtue of the discovery procedure obtain the information it requires. In my view the discovery procedure would not satisfy the Commonwealth's statutory right to obtain relevant information at this stage. To facilitate the recovery proceedings the Commonwealth has a -- 9 of 17 -- 7 statutory right to obtain information relating to those 300 students, including the defendant's "re·cords relating to such students". Obtaining that information prior to commencing the proceeding would facilitate the Commonwealth's pleading and enable it at the outset to provide all relevant particulars relating to the claims with respect to those 300 students. But that is not the end of the matter. The notice in question requires the defendant to provide the information with respect to "each overseas student" who was enrolled at the college at the relevant time. That information may facilitate the refund and recovery procedure with respect to students other than the 300 with whom the Commonwealth has already entered into an assignment arrangement. Particulars relating to such other students could not be obtained on discovery in an action commenced with respect to the 300 assignors; such would not be relevant to an issue in those proceedings. It was not disputed that the defendant was an "educational institution" for purposes of s. 5. The relevant determination was made by the Minister's delegate on 29th May, 1991. In the correspondence between the Department and the defendant the latter did not dispute that it was in possession of information of the type referred to in the notices. With respect to one of the notices it sought an extension of time to comply with the request on the ground that it would take some time to collect the necessary information. In that exchange of correspondence the defendant sought to raise as an issue the question of its future accreditation as an educational institution for overseas students, but that is irrelevant for -- 10 of 17 -- 8 present purposes. In an affidavit by one of its directors, J.N. Poteri, the defendant admitted that it had received certain pre-paid enrolment fees and living expenses from students who are citizens of the People's Republic of China who were unable to participate in the course because of the changes in government policy referred to above. The affidavit asserts that the defendant "has always been prepared to provide the services for which the students in question have paid". The affidavit then contains argumentative material dealing with the decision of the government; in the circumstances I do not regard that as relevant to the issue for my determination. Finally, the affidavit states that the defendant. has been, and is still prepared to make refunds to the students in question "on a case by case basis in accordance with the provisions of the Enrolment Form signed by each of the students". It asserts that some $35,000.00 has been refunded in that way to date. But such matters, in my view, are not relevant for present purposes. Nothing contained in the affidavit constitutes, in my view, a defence or justification for failing to comply with a notice validly issued pursuant to s. 5 of the Act. The real question for my determination is, as indicated above, whether or not it is appropriate to grant injunctive relief to enforce the statutory obligation on the defendant. There is no doubt that in an appropriate case the court, exercising its civil (equitable) jurisdiction, may grant an injunction as an aid to the enforcement of the criminal law, but the exercise of such jurisdiction has frequently been described as "exceptional". The relevant principle was recently restated -- 11 of 17 -- 9 by the House of Lords in Gouriet v. Union of Post Office Workers (1978) A.C. 435; it is sufficient to cite one passage from the reasons of Lord Wilberforce at 481 : "This is a right, of comparatively modern use, of the Attorney-General to invoke the assistance of civil courts in aid of the criminal law. It is an exceptional power confined, in practice, to cases where an offence is frequently repeated in disregard of a, usually, inadequate penalty - see Attorney- General v. Harris (1961) 1 Q.B. 74; or to cases of emergency - see Attorney-General v. Chaudry (1971) 1 W.L.R. 1614. It is· one not without its difficulties and these may call for consideration in the future. If Parliament has imposed a sanction (e.g. a fine of £1.00), without an increase in severity for repeated offences, it may seem wrong that the courts - civil courts - should think fit, by granting injunctions, breaches of which may attract unlimited sanctions, including imprisonment, to do what Parliament has not done. Moreover where Parliament has (as here in the Post Office Act 1953) provided for trial of offences by indictment before a jury, it may·seem wrong that the courts, applying a civil standard of proof, should in effect convict a subject without the prescribed trial. What would happen if, after punishment for contempt, the same man were to be prosecuted in a criminal . court? That Lord Eldon L.C.. was much oppressed by these difficulties as shown by the discussions in Attorney-General v. Cleaver (1811) 18 Ves. Jun. 210. These and other examples which can be given show that this jurisdiction - though proved useful on occasions - is one of great delicacy and is one to be used with caution." The court in Harris was concerned with defendants who had in breach of the applicable legislation sold flowers from stalls near the entrance to a cemetery in Manchester on almost every Sunday from 1955 to 1958. The man had been convicted and fined in respect of breaches thereby committed of the Manchester Police Regulation Act 1844 on 142 occasions; his wife had been similarly convicted on 95 occasions. Despite that, both continued to commit similar breaches by continuing to sell flowers at that -- 12 of 17 -- 1 0 place. The Court of Appeal held that persistent and deliberate flouting of the law was in itself a grave and serious injury to the public which warranted the grant of an injunction where the monetary penalties imposed by the statute were ineffective to secure compliance with the law. The decision also recognised the special position of the Attorney-General in such proceedings, a consideration confirmed by the Court of Appeal in the recently unreported decision NMRCA (Old) Ltd. v. Andrew Ap. 83 of 1991, judgment delivered 3rd March, 1992. The general reluctance of courts to resort to an injunction to enforce the criminal law was seen in the judgments of the members of the High Court in Ramsay v. Aberfoyle Manufacturing Company {Australia) Proprietary Limited (1935) 54 C.L.R. 230, but there at least Latham C.J. considered that the relevant building by-law comprised a code of remedies for its enforcement. It was acknowledged by both counsel during argument here that the modern tendency (since Gouriet at least) has been to grant injunct~ons in aid of town planning laws. In Attorney-General (Old) (Ex Rel. Kerr) v. T. (1983) 46 A.L.R. 275 Gibbs C.J. was concerned with a situation where an injunction was sought to restrain the threatened commission of an alleged criminal offence. At 277 he said: "While there is no doubt that in appropriate cases the law will grant an injunction to restrain a breach of the criminal law, that is 'an exceptional power confined, in practice, to cases where an offence is frequently repeated in disregard of a, usually, inadequate penalty . . or to cases of emergency'." He was there citing with approval the passage from the judgment of -- 13 of 17 -- 11 Lord Wilberforce referred to above. To similar effect is a passage in the judgment of Mason J. in The Commonwealth of Australia v. John Fairfax & Sons Ltd. (1980) 147 C.L.R. 39 at 49-50. After referring to Gouriet, particularly the quoted passage from the judgment of Lord Wilberforce, His Honour went on to add: "It may be that in some circumstances a statutory provision which prohibits and penalises the disclosure of confidential government information or official secrets will be enforceable by injunction. This is more likely to be the case when it appears that the statute, in addition to creating a criminal offence, is designed to provide a civil remedy to protect the governmen:t's rights to confidential information." There can be no doubt that the current trend in Australia is to apply the Gouriet when considering applications of this kind. Where there is some exceptional feature, such as for example the frequent commission of an offence in disregard of an inadequate penalty, the court may in the exercise of its discretion grant an injunction to enforce the law. There is one feature of this case which distinguishes it from leading cases in which the relevant principle has been considered. Most of the reported cases have been concerned with a situation where the criminal conduct sought to be restrained was constituted by a positive unlawful act which the evidence suggested was likely to be repeated. But that is not the case here. The offence created by s. 5(2) is a failure to do a positive act (provide information) as required by the statute. In such a situation the penalty merely punishes for a past failure to comply with the law; it does not enforce compliance -- 14 of 17 -- 12 with the continuing obligation to do the positive act required by the terms of the statute. In such a case the grant of an injunction is not an additional penalty aiding in the enforcement of the criminal law; it is rather a means of enforcing the statutory obligation to do the particular act. The evidence here supports the conclusion that despite two previous convictions involving the payment of fines and costs, the defendant (probably because the fines and costs involved are trifling compared with the economic advantage of failing to comply with the statutory obligation) has made a decision to continue to refuse ·to comply with the statutory obligation to provide the information demanded. Looked at in that light granting the injunction sought would not amount to using an injunction to prohibit conduct merely because it was criminal, nor would it amount to. adding a discretionary . penalty to the criminal penalty imposed by the statute (cf. per Lord Fraser of Tullybelton in Gouriet at 521). Putting it that way also demonstrates that the penalty provided for by this statute is wholly inadequate to secure compliance with the statutory requirement that information be furnished~ The only comparable case referred to me in which consideration was given to the granting of an injunction to enforce compliance with a statute by doing acts including providing information was the decision of Derrington J. in Attorney-General of The Commonwealth v. Thomas (1983) 67 F.L.R. 174. In that case the defendant had been served with notices under s. 264 of the Income Tax Assessment Act requiring him to attend and produce documents at the Australian Taxation Office. -- 15 of 17 -- 13 He had failed to do so on several occasions as required. On a number of occasions he had been penalised in the .Magistrates Court with respect to those breaches, but on each occasion the penalty had been "inadequate" notwithstanding it had been accompanied by an order that he comply with the statutory provisions. It was in those circumstances that the Attorney- General sought an injunction requiring the defendant to attend and produce documents as required by the statute. His Honour reached the conclusion that the defendant was "wilfully flouting the law and is contemptuous of the penalties". After citing the reasoning of Mason J. in Fairfax in which Gouriet was approved, Derrington J. concluded that the case before him came "within that exceptional class of case referred to in the passage cited". Notwithstanding some doubts which he then expressed, based on the consideration that the legislation there in question descended into particularity with respect to the orders that may.be made by the Magistrate when a breach was proved, he concluded that it was appropriate in all the circumstances to grant the injunction sought. That decision supports the proposition that, where the injunction will not merely restrain the commission of a pure criminal offence but will enforce compliance with a statute requiring the doing of a positive act, the court will more readily conclude that the legislature did not intend that the only remedy for breach should be the penalty fixed by the statute. In a sense it can be said that the granting of an injunction in such circumstances is the only means which exists for achieving the object of the statute, namely the provision of -- 16 of 17 -- 1 4 information in the public interest. In certain circumstances public monies may be expended in making refunds to overseas students and it is in the public interest that an institution in the position of the defendant ought not profit at public expense. Insofar as Gouriet suggest that something more than mere infringement of the law is required before an injunction would issue, I am of the view that such requirement is met here; this case involves the enforcement of the obligation imposed in the public interest to comply in a positive way with the terms of a statute. It follows that I have come to the conclusion that this case is "exceptional" within the Gouriet principle, and that it is appropriate to grant an injunction as sought. There will therefore be judgment for the plaintiff in the action against the defendant, and I will make an order that the defendant, within fourteen days after service upon it of the order, comply with the requirements of a notice pursuant to s. 5(1) of the Overseas Students (Refunds) Act 1990 dated 31st January, 1992 and signed by John Muir. I further order that the defendant pay the plaintiff's costs of and incidental to the action, including this application, to be taxed. -- 17 of 17 --