Crime and Misconduct Commission, Re [2008] QSC 33 [2008] 2 Qd R 244

1 SUPREME COURT OF QUEENSLAND CITATION: Re Crime and Misconduct Comission [2008] QSC 33 PARTIES: CRIME AND MISCONDUCT COMMISSION (applicant) FILE NO: SC No 1739 of 2008 DIVISION: Trial PROCEEDING: Ex parte application ORIGINATING COURT: Supreme Court DELIVERED ON: 28 February 2008 DELIVERED AT: Brisbane HEARING DATE: 28 February 2008 JUDGE: Fryberg J ORDER: 1) Pursuant to section 76 of the Service and Execution of Process Act (Cth) 1992, leave is given to serve a subpoena, namely a Notice to Produce issued under section 74A of the Crime and Misconduct Act 2001, on the 19th day of February 2008, requiring Prestige Income Tax Pty Ltd of Shop 18B, Mt Druitt Road Old, Mt Druitt, in the State of New South Wales, to produce to the Crime and Misconduct Commission (“the CMC”) specified documents and things by the 31 st day of March 2008, outside of the State of Queensland and in the State of New South Wales; SUBJECT TO THE FOLLOWING CONDITIONS:- (i) That the said Notice to Produce may not be served after Friday the 7th day of March 2008; and (ii) That no document produced to the CMC pursuant to the notice be opened or read by the CMC or any officer or agent of the CMC until seven days after the CMC has notified Errol Peter Pavy and Cheryl Leanne Pavy in writing that it has such documents and proposes to read them unless an application is made by either person under section 195B of the Crime and Misconduct Act with in seven days of service of the notification. And further, that if any such application is made no such document be opened or read until the determination of the application. -- 1 of 11 -- 2 ORDER 1 10 20 30 40 50 60 CATCHWORDS: Constitutional law – Non-judicial organs of government – The Crown – Royal Commissions, Boards of Inquiry and like investigations – Power to summon witnesses – Evidence – Privilege – Opportunity to claim privilege – Notice to person affected Crime and Misconduct Act 2001 Service and Execution of Process Act 1992 (Cth) s76, s79 SOLICITORS: Applicant: M O’Connor -- 2 of 11 -- 3 ORDER 1 10 20 30 40 50 60 SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION FRYBERG J No 1739 of 2008 CRIME AND MISCONDUCT COMMISSION Applicant BRISBANE ..DATE 28/02/2008 ORDER -- 3 of 11 -- 4 ORDER 1 10 20 30 40 50 60 HIS HONOUR: This is an application by the Crime and Misconduct Commission continued in existence under s 220 of the Crime and Misconduct Act 2001 for leave to serve a subpoena in New South Wales. The subpoena is a subpoena to produce documents to the Commission. Subpoena is the word which is used in the Service and Execution of Process Act, the Act under which the present application is made, although the actual document is a notice to produce, issued under s 74A of the Crime and Misconduct Act 2001, by the chairperson of the Commission. The evidence before me satisfies me that the relevant notice has been validly issued and I am also satisfied that it is a subpoena within the meaning of the Service and Execution of Process Act. It is worded in rather wide terms but the evidence shows that the person to whom it is directed, a proprietary limited company carrying on an accountancy business relating to tax, is aware of it and of today's application. On the face of the application, it is proposed that the leave be subject to a condition that the notice to produce may not be served after the 7th of March 2008 and doubtless that condition is in order to ensure that the time limits prescribed by the Service and Execution of Process Act are complied with and that a reasonable time is provided for compliance with the subpoena after it is served. The requirement under the notice is to produce the documents required by the 31st of March. -- 4 of 11 -- 5 ORDER 1 10 20 30 40 50 60 The grant of leave may be made subject to conditions pursuant to s 79(3)(a) of the Service and Execution of Process Act. It is unfortunate that the application before me is being heard ex parte. The company to whom the notice is directed apparently has no interest in resisting it. However, it is not the person who is the subject of the investigation being conducted by the Commission. Those persons are the clients of the accountancy company and it is shown by the evidence to have acted as accountant and tax agent for the persons under investigation. Whether it continues to act for them is unclear. The notice which has been issued is one which under s 74A may be issued for a confiscation related investigation. That is an investigation which the Commission is conducting for the Criminal Proceeds Confiscation Act 2002. Such an investigation is shown to be underway. Section 74A provides that a person served with a notice must produce the documents, unless the person has a reasonable excuse. There is every reason to suppose in the present case that the company proposes to produce the documents. The matter would therefore have seemed straightforward but for some of the provisions of subdivision 2 of division 3 of Part 1 of Chapter 3 of the Crime and Misconduct Act. Chapter 3 is concerned with the powers of the Commission, and Part 1 with particular powers to acquire information or attendance. -- 5 of 11 -- 6 ORDER 1 10 20 30 40 50 60 Part 1 is divided over a number of topics and not all are presently material. However, division 1 deals with particular powers in relation to units of public administration and is subdivided into subdivisions dealing respectively with crime investigations and misconduct investigations. Division 2 is concerned with notices to produce or discover and is the division in which s 74A is to be found. Its subdivisions deal respectively with crime investigations and witness protection functions, confiscation related investigations and misconduct investigations. Each subdivision contains a section conferring a power on the chairperson of the Commission to give a notice to produce or discover information in connection with the particular type of investigation involved. Division 3 of the Part deals with procedures on a claim of privilege and again is subdivided in relation to crime investigations, confiscation related investigations and misconduct investigations. There is not a total symmetry between these various parallel provisions but they are certainly comparable in a number of ways. Each of section 76, 78A and 79 specifies when the relevant subdivision 1, 1A or 2 applies. Section 78A, that which is relevant to the present investigation, provides that the subdivision applies if a person claims privilege under section 74A in relation to a document or thing. There is no -- 6 of 11 -- 28022008 T(2)07/JIR(BNE) M/T BRIS5 (Fryberg J) 7 ORDER 1 10 20 30 40 50 60 specification in section 78A of how privilege may be claimed although one circumstance in which it may be claimed is evidently envisaged by section 78C. Parallel provisions exist in each of subdivisions 1 and 2. An oddity is that although s 78A refers to a person claiming privilege under s 74A, there is no provision in s 74A for such a claim to be made. The only reference in that section to privilege is in sub-s (6) which provides: "A person who fails to comply with the notice does not commit an offence if the document or thing is subject to privilege". It appears from a note to that section that this is what parliamentary counsel had in mind in drafting s 78A. Section 78B provides that the commission officer, a term defined very widely in Schedule 2 to the Act, must consider the claim for privilege and may withdraw the requirement in relation to which the claim is made or may advise the person that the person may apply to or be required to attend before the Supreme Court to establish the claim under s 195B. Under that section either the chairman or the person making the claim for privilege may apply to a Supreme Court judge to decide whether the claim is established and, if established, whether it is to be upheld. "Privilege" is defined in the Act in the present context to mean in relation to a document, legal professional privilege, -- 7 of 11 -- 28022008 T(2)07/JIR(BNE) M/T BRIS5 (Fryberg J) 8 ORDER 1 10 20 30 40 50 60 public interest immunity, Parliamentary privilege or self- incrimination privilege and to include a claim on the ground of confidentiality. "Confidentiality" is also given a definition which rather limits the natural width of the word. It means a ground recognised at law that giving an answer or disclosing a communication or document would be a breach of an oath taken or statutory or commercial obligation or restriction to maintain secrecy. There is nothing in s 78A or s 78B or their analogues in other subdivisions which suggests that only the person to whom a notice is given may claim privilege in relation to documents required to be produced under the notice. There is no reason in principle to restrict the section in that way and my attention has not been drawn to any provision of the Act which implies or suggests that any such restriction was intended by the Parliament. It therefore seems to me that it would be open to the persons under investigation to raise a claim for privilege if one were thought to exist. The problem that arises is that nothing in the statutory mechanism seems to specify explicitly that such persons should be given an opportunity to raise a claim for privilege if they wish to. I said earlier that it was unfortunate that this matter proceeded ex parte. That has meant that I have not had the benefit of a full hearing or of a hearing of full argument on -- 8 of 11 -- 28022008 T(2)08-09/LM(BNE) M/T BRIS05 (Fryberg J) 9 ORDER 1 10 20 30 40 50 60 both sides in relation to the question of notice to such persons. I see nothing which would require notice of the issue of the subpoena to be given to those persons, nor anything which would require them to receive notice prior to compliance with the subpoena. However, it is clear that s 78B does contemplate the preservation of privilege as defined in the Act. In my judgment it is implied by that section that before the Commission reads or examines documents produced pursuant to a notice, any person known to have a possible claim for privilege in respect of the documents should be given notice of the Commission's intention to read the documents and the opportunity to bring proceedings under s 195B as contemplated by s 78B. Unless such a provision be implied in the section the protection given by the Act as a matter of clear public policy would be severely undermined. There are analogous provisions in the other subdivisions of Division 3 and there is nothing in those contexts to suggest a different result. My attention has been drawn to s 84 and the fact that a notice may provide that it is a confidential document and disclosure would then not be permitted. It is sufficient to leave the position in relation to a notice which had any such statement -- 9 of 11 -- 28022008 T(2)08-09/LM(BNE) M/T BRIS05 (Fryberg J) 10 ORDER 1 10 20 30 40 50 60 in it to the time when such a notice must be considered. The present notice does not have any such provision. I afforded the solicitor for the Commission the opportunity to consider these matters and to take instructions and he kindly did so. He has informed me that he is instructed that the Commission has taken the position that it is not obliged to give any notice to the persons under investigation or, for that matter, to anyone else who might have privilege in the documents, of its intention to scrutinise whatever is produced in response to the subpoena. It seems to me that that is not an attitude which is consonant with the terms of the Act. However I do not have any procedure under the Act directly before me. I do, however, have the Service and Execution of Process Act before me and under it the power, which is very widely expressed, to impose conditions. It seems to me that if I impose a condition that the Commission give notice to the persons under investigation, after the documents are delivered to it that it has those documents and that it intends to read them, stating when it intends to do so and informing those persons of their rights pursuant to s 195B, and does so a sufficient time before it examines the documents, that such a condition would ensure that the Court is not associated with a course of conduct which, in my judgment, is not appropriate, indeed which would -- 10 of 11 -- 28022008 T(2)08-09/LM(BNE) M/T BRIS05 (Fryberg J) 11 ORDER 1 10 20 30 40 50 60 result in non-compliance with the implied term of the Act to which I have referred. I therefore propose to impose such a condition. The imposition of such a condition will have the further advantage that it will create an order which is capable of being the subject of an appeal in a way which merely giving reasons for my view would not do. The wording I propose, Mr O'Connor, is this, and I put it for your comment, that no document produced to the CMC pursuant to the notice be opened or read by the CMC or any officer or agent of the CMC until seven days after the CMC has notified Errol Peter Pavy and Cheryl Leanne Pavy in writing that it has such documents and proposes to read them unless an application is made by either person under section 195B of the Crime and Misconduct Act within seven days of service of the notification. And further, that if any such application is made no such document be opened or read until the determination of the application. ... ----- -- 11 of 11 --