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Australian Securities and Investments Commission v Managed Investments Pty Ltd (No 8)

 

[2014] QSC 204

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

DELIVERED ON:

7 August 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

7 August 2014

JUDGE:

Douglas J

ORDER:

Rule against permitting the witness to be cross-examined by being shown his answer to a question in an examination of him pursuant to s 597 of the Corporations Act 2001 (Cth) where he had claimed privilege against self-incrimination in that examination.

CATCHWORDS:

EVIDENCE – WITNESSES – CROSS-EXAMINATION – AS TO CREDIT – ON FORMER STATEMENTS – UPON WHAT STATEMENTS – where a witness had previously been examined pursuant to s 597 of the Corporations Act – where counsel for the fourth defendant sought to put to the witness what was said to be a prior inconsistent statement made by him in the examination – where s 597(12) acts as an exception to the rule against self incrimination – where the exception is countered by s 597(12A) – whether allowing a procedure such as in R v Orton would amount to an indirect form of proof of the contents of the document – whether such a procedure is inconsistent with the preservation of privilege found in s 597(12A)

Evidence Act 1977 (Qld), s 18, s 19, s  21, s 101

Corporations Act 2001 (Cth), s 597, s 597(12), s 597(12A)

ASIC v Rich [2006] NSWSC 643; 201 FLR 207 followed

The Queen’s Case (1820) Brod & B 284; 129 ER 976; [1820] EngR 563 referred

R v Orton [1922] VLR 469; 28 ALR 193 referred

COUNSEL:

PJ Riordan SC with MT Brady and JP Moore for the plaintiff

PJ Davis QC with DS Piggott for the fourth defendant

R Jackson for the fifth defendant

C Withers for the sixth defendant

B O’Donnell QC with CK George for the seventh defendant

PA Freeburn QC for the eighth defendant

SOLICITORS:

Corrs Chambers Westgarth for the plaintiff

Tucker & Cowen Solicitors for the fourth defendant

Bartley Cohen Litigation Lawyers for the fifth defendant

Kennedys for the sixth defendant

DibbsBarker for the seventh defendant

James Conomos Lawyers for the eighth defendant

[1] Mr Davis QC is shortly to commence cross examining Mr Hutchings and has indicated very fairly that he wished, during the cross examination, to put to Mr Hutchings what is said to be a previous inconsistent statement made by him in an examination conducted apparently pursuant to s 597 of the Corporations Act 2001 (Cth). 

[2] The issue that it is said to be relevant to is a conversation deposed to by Mr Hutchings at paragraph 232 of his affidavit where he says that, on 20 December 2007, a date which is said to be significant having regard to the allegations against Mr King, he met with Mr White and Mr King on the Gold Coast for about five to 10 minutes.  During the course of that meeting he said Mr King said to him words to the effect that, "MFSL will provide a guarantee (as it had for the Living and Leisure investment) to PIF in relation to investments the subject of the RBS facility and the MYF restructure." 

[3] What he wishes to put to the witness, apparently, is that in the examination conducted under the Act he said something different.  The problem that then arises is that s 597(12) of the Act provides that a person is not excused from answering a question put to the person at an examination on the ground that the answer might tend to incriminate the person or make the person liable to a penalty. 

[4] That exception from the rule against self-incrimination is then countered by s 597(12A) which provides that where the person claims that the answer might tend to incriminate the person or make the person liable to a penalty, which I was told had happened in this case, and the answer might, in fact, tend to incriminate the person or make the person so liable, and no issue was raised as to whether that might be the case in respect to this particular answer, the answer is not admissible in evidence against the person in a criminal proceeding or a proceeding for the imposition of a penalty other than a proceeding under s 597 or any other proceeding in respect to the falsity of the answer.  These are proceedings for the imposition of a penalty.  Subject to s 597(12A), any written record of an examination so signed by a person or any transcript of it may be used in evidence in any legal proceedings against the person. 

[5] The procedure that Mr Davis proposes to adopt is to seek to avoid proof of the transcript of the previous examination of Mr Hutchings by, in effect, showing it to him and giving him time to examine its contents and then asking him whether, having examined the contents of the document, he stands by the evidence that he has given.  On the assumption that there might be some pulling back by the witness from the evidence he has given, he hopes not to be put in the position of seeking to prove the document. 

[6] The procedure is described, for example, by Austin J in ASIC v Rich [2006] NSWSC 643 at paragraph [2] and his Honour points out that it is well known as the R v Orton ([1922] VLR 469; 28 ALR 193) procedure and, from my recollection, developed following the decision in Queen Caroline’s case ((1820) Brod & Bing 284; 129 ER 976), discussed in an illuminating article by Mr M H McHugh QC, as his Honour then was, in the Australian Bar Review in 1985; (see Cross-examination on Documents (1985) 1 Aust Bar Rev 51, 52). 

[7] Austin J in that case considered whether that procedure should be adopted, however, and formed the view at paragraph [37] that allowing that procedure was tantamount to a loose and indirect form of proof of the contents of the document, inconsistent with the preservation of the privilege set out in s 597(12A) of the Corporations Act

[8] In seeking to distinguish that decision Mr Davis pointed out that this was not a case where his client was seeking to establish evidence against Mr Hutchings in these proceedings for the imposition of a penalty, but to establish, in effect, that his evidence was unreliable in respect of an allegation that he has made against his client. 

[9] That distinction does not strike me as being particularly significant here.  If I were to allow the procedure, it seems to me that the answer that Mr Hutchings may give would similarly be one inconsistent with the preservation of the privilege against exposure to a penalty required by s 597(12A).  I toyed with the idea whether the answer was admissible in evidence in the case pleaded against him by ASIC if it was elicited in this fashion, and it seems to me that it would be in any event.  Certainly ASIC has indicated that it would seek to rely upon the evidence, if it were admitted, in its case against Mr Hutchings. 

[10] If I were to conclude that the evidence was admissible in spite of s 597(12A) it would then be a question whether I should allow the question in any event pursuant to the procedure set out in ss 18, 19, 21 and 101 of the Evidence Act 1977 (Qld).  The Queensland Act is significant in that, where a previous inconsistent statement is sought to be proved and if not distinctly admitted is proved by the means provided by s 101, the evidence is then admissible as evidence of any fact stated therein of which direct oral evidence by the person would be admissible; see s 101(1).  So it would not be admissible simply as to the credit of the witness as would have been the case at common law but as to the truth of its contents. 

[11] The effect of that is mollified to some extent by the discretion to disallow improper questions under s 21 which extends to oppressive questions by the definition in s 21(4), where s 21(3) makes it clear that the matters the court must take into account pursuant to s 21(2) are not exclusive and the discretion to disallow questions extends beyond those considerations in s 21(2) to improper questions.  Such a question as is proposed in this case may arguably be oppressive because of its potential effect in undermining the protection afforded by s 597(12A). 

[12] It seems to me that, following the decision of Austin J in ASIC v Rich, I should conclude that this particular procedure would amount to a loose and indirect form of proof of the contents of the document sought to be used to contradict Mr Hutchings which makes it not admissible in evidence against him.  In other words s 597(12A) applies to prohibit the question.  

[13] Were I to possess a discretion under s 21, despite having reached that conclusion, it was urged on me that the possible exercise of the discretion was evenly balanced because it was sought to be used, in effect, not against Mr Hutchings but to buttress Mr King's own evidence.  His evidence is not particularly inconsistent with the allegation made in paragraph 232 except in respect of the date of the conversation which Mr King could not recall, although he did recall, in effect, evidence to the effect that funds from PIF had been used in some form to assist with the payment of the moneys made through MFSA.  My main concern is, however, not so much that such a discretion should come into play in this situation.  Nor am I convinced that the discretion that might arise under s 21 is particularly heavily weighted one way or the other. 

[14] I am more concerned that, to allow the questioning to be conducted in that fashion, would be, as Austin J said, an indirect way of avoiding the effect of s 597(12A), and of avoiding the significant consequences attaching to requiring persons to answer questions in such inquiries where otherwise the privilege against self incrimination would apply.  Accordingly I propose to rule against the procedure suggested by Mr Davis.

Close

Editorial Notes

  • Published Case Name:

    Australian Securities and Investments Commission v Managed Investments Pty Ltd & Ors (No 8)

  • Shortened Case Name:

    Australian Securities and Investments Commission v Managed Investments Pty Ltd (No 8)

  • MNC:

    [2014] QSC 204

  • Court:

    QSC

  • Judge(s):

    Douglas J

  • Date:

    07 Aug 2014

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2012] QSC 59 21 Feb 2012 Objection by the seventh defendant to the use of an affidavit annexing affidavits from other proceedings overruled: Fryberg J.
Primary Judgment [2012] QSC 72 16 Mar 2012 Plaintiff's application for leave to proceed against the first defendant (a company in liquidation) granted: Fryberg J.
Primary Judgment [2012] QSC 74 28 Mar 2012 Certain paragraphs of defences struck out and directions made that fourth, fifth, sixth, seventh and eighth defendants to comply with UCPR pleading regime: Fryberg J.
Primary Judgment [2013] QSC 15 29 Jan 2013 Plaintiff's application for summary judgment against the first defendant refused; fifth defendant's application seeking to restrain plaintiff from obtaining summary judgment against first defendant refused: Fryberg J.
Primary Judgment [2013] QSC 280 17 Oct 2013 Declaration that notices to the fourth to eighth defendants given by the plaintiff pursuant to s 79(1) of the Australian Securities and Investments Commission Act (Cth) are invalid: Douglas J.
Primary Judgment [2013] QSC 313 11 Nov 2013 Applications to stay trial until determination of New Zealand prosecutions refused: Fryberg J.
Primary Judgment [2013] QSC 355 28 Nov 2013 Direction made that a witness answer a question: Douglas J.
Primary Judgment [2014] QSC 72 [2015] 2 Qd R 32 22 Apr 2014 Determination as to the use to which an affidavit may be put without the deponent being cross-examined in relation to it: Douglas J.
Primary Judgment [2014] QSC 204 07 Aug 2014 Determination made that witness not permitted to be cross-examined by being shown his answer to a question in an examination of him pursuant to s 597 of the Corporations Act 2001 (Cth) where he had claimed privilege against self-incrimination in that examination: Douglas J.
Primary Judgment [2016] QSC 109 23 May 2016 Primary judgment: defendants' found to have contravened ss 601FC and 601FD of the Corporations Act 2001 (Cth): Douglas J.
Primary Judgment [2017] QSC 96 26 May 2017 Declaratory relief ordered; fourth, fifth, sixth, seventh and eighth defendants ordered to pay pecuniary penalties and compensation; fourth, fifth, sixth, seventh and eighth defendants disqualified from managing any corporation; costs orders made against fourth, fifth, sixth, seventh and eighth defendants: Douglas J.
Notice of Appeal Filed File Number: Appeals 6281/17; 6289/17; 6306/17; 6319/17; 6320/17 23 Jun 2017 Appeals from [2016] QSC 109 and [2017] QSC 96.
Appeal Determined (QCA) [2012] QCA 301 [2013] 2 Qd R 401 02 Nov 2012 Appeal from [2012] QSC 74 allowed; each of the fourth, fifth, sixth, seventh and eighth defendants to be partly excused from compliance with the UCPR pleading regime: Holmes and White JJA and McMurdo J.
Appeal Determined (QCA) [2013] QCA 88 19 Apr 2013 Application by Australian Securities and Investments Commission to vary costs order in [2012] QCA 301 refused: Holmes and White JJA and McMurdo J.
Appeal Determined (QCA) [2013] QCA 357 03 Dec 2013 Appeal from [2013] QSC 313 (refusal of application to stay proceedings) dismissed: Muir and Gotterson JJA and Applegarth J.
Appeal Determined (QCA) [2018] QCA 352 18 Dec 2018 Appeals from [2016] QSC 109 and [2017] QSC 96. All appeals (and cross-appeals by ASIC) dismissed save for Appeal 6320/17 whereby appealed allowed in part with respect to the conclusion that Mr King was an officer and therefore Mr King's appeal allowed to the extent that he contravened the duties prescribed by s 601FD of the Corporations Act 2001 (Cth): Morrison and McMurdo JJA and Applegarth J.
Appeal Determined (QCA) [2019] QCA 121 18 Jun 2019 Form of order and costs of [2018] QCA 352: Morrison and McMurdo JJA and Applegarth J.
Special Leave Granted (HCA) [2019] HCATrans 104 17 May 2019 Special leave application instituted by Australian Securities and Investments Commission against Mr King (Appeal 6320/17) granted: Bell and Keane JJ
HCA Transcript [2019] HCATrans 195 09 Oct 2019 Transcript of hearing before High Court of Australia; Australian Securities and Investments Commission's application to add a further ground to the application for special leave: special leave granted; Mr King's application for special leave to cross-appeal refused: Kiefel CJ, Gageler, Keane, Nettle and Gordon JJ.

Appeal Status

{solid} Appeal Determined (QCA) {hollow} Special Leave Granted (HCA)