Corporate Affairs Commission (NSW) v Yuill
(1991) 172 CLR 319(1991) 9 ACLC 843
(Judgment by: McHugh JJ.)
CORPORATE AFFAIRS COMMISSION OF NEW SOUTH WALES v BRIAN RICHARD YUILL AND ORS
Court:
Judges:
Brennan
Dawson
Toohey
Gaudron
McHugh JJ.
Other References:
F.C. 91/025
Judgment date: 27 June 1991
Judgment by:
McHugh JJ.
In my opinion this appeal should be dismissed. The facts and statutory provisions are set out in other judgments.
The essential question in the appeal is whether, when the Companies (New South Wales) Code ("the Code") is read as a whole, the words "reasonable excuse" in s.296(2) authorise a person to "refuse or fail to comply with a requirement made under section 295" on the ground that compliance with the requirement would involve a breach of legal professional privilege.
This Court has held that the right to claim legal professional privilege is not confined to judicial or quasi-judicial proceedings: Baker v. Campbell (1983) 153 CLR 52 . Absent a contrary legislative indication, legal professional privilege is a lawful excuse for refusing to comply with any form of compulsory legal process. Legal professional privilege, therefore, is a "reasonable excuse" for refusing to answer a requirement under s.295 unless, by express words or necessary implication, the Code excludes the privilege from the protection conferred by the words "reasonable excuse": cf. Baker v. Campbell, at pp 96-97, 104, 116, 123. The privilege is not excluded expressly. But the appellant asserts that it is excluded by necessary implication. Two matters are relied on in support of this proposition.
First, it is contended that, since Baker v. Campbell was not decided until after the enactment of the Code, the Code was passed on the assumption that legal professional privilege was not an answer to a requirement made under s.295. Accordingly, so it is contended, Parliament did not intend the words "reasonable excuse" to cover a claim of legal professional privilege.
The notion of legislative intention in the context of statutory interpretation has been said to be "somewhat of a fiction": Mills v. Meeking (1990) 169 CLR 214 , per Dawson J. at p 234. Nevertheless, as Lord Radcliffe pointed out in Attorney-General for Canada v. Hallet and Carey Ltd. [1952] AC 427 , at p 449: "the paramount rule remains that every statute is to be expounded according to its manifest or expressed intention". As this statement implies, the intention of Parliament is not the collective, psychological state of mind of the individual members of Parliament; it is the intention which is inferred from the terms of the enactment. In Black-Clawson Ltd. v. Papierwerke AG. [1975] AC 591 , Lord Diplock pointed out (at p 638):
"The acceptance of the rule of law as a constitutional principle requires that a citizen, before committing himself to any course of action, should be able to know in advance what are the legal consequences that will flow from it. Where those consequences are regulated by a statute the source of that knowledge is what the statute says. In construing it the court must give effect to what the words of the statute would be reasonably understood to mean by those whose conduct it regulates. That any or all of the individual members of the two Houses of the Parliament that passed it may have thought the words bore a different meaning cannot affect the matter. Parliament, under our constitution, is sovereign only in respect of what it expresses by the words used in the legislation it has passed." (my emphasis)
The first step in the process of statutory construction is the ascertainment of the ordinary grammatical meaning of the legislative provision in question. However, ascertaining the ordinary grammatical meaning of a legislative provision is only the first step in the process of statutory construction, for the object of that process is to ascertain the meaning which Parliament intended. The grammatical meaning of a provision is not always the meaning which Parliament intended the statute to have. For the purpose of ascertaining the statutory or legal meaning of an enactment, it is necessary to take into account various rules of construction which Parliament is presumed to have intended to be used to ascertain the meaning of its legislation. The application of these rules often results in the statutory or legal meaning being different from the grammatical meaning of an enactment. Thus, it is a rule of construction that the purpose of the legislation must be taken into account in determining the statutory meaning of one of its provisions. The application of this rule may have the effect of modifying the grammatical meaning of the provision. Likewise, it is a rule of construction that, in the absence of a clear contrary indication, legislation is not to be interpreted as abolishing basic common law rights and privileges. The application of this rule may require the reading down of the literal meaning of general words in an enactment.
Rules of construction, however, are only guides to the statutory or legal meaning which Parliament intended an enactment to have. As Lord Reid pointed out in Maunsell v. Olins [1975] AC 373 , at p 382:
"rules of construction ... are not rules in the ordinary sense of having some binding force. They are our servants, not our masters. They are aids to construction, presumptions or pointers. Not infrequently one 'rule' points in one direction, another in a different direction. In each case we must look at all relevant circumstances and decide as a matter of judgment what weight to attach to any particular 'rule'."
In the present case, the appellant relies on the rule of construction that, in determining the meaning of an enactment, it is permissible to take into account the state of the existing law at the time when the enactment was passed: Black-Clawson Ltd., at p 637, and cf. at p 614. The appellant then says that, at the time when the Code was passed, the accepted opinion of well-informed lawyers was that a claim of legal professional privilege was confined to judicial and quasi-judicial proceedings: Minter v. Priest [1930] AC 558 , at pp 581-583; Parry-Jones v. Law Society (1969) 1 Ch 1 , at p 9; Brayley v. Wilton (1976) 2 NSWLR 495 , at p 497. Consequently, so the appellant contends, it should be inferred that Parliament did not intend legal professional privilege to be a "reasonable excuse" within the meaning of s.296 because proceedings under Pt VII of the Code were not judicial or quasi-judicial proceedings. Moreover, the appellant asserts that the provisions of ss.299(2)(d) and 308 are explicable only on the basis that Parliament assumed and intended that legal professional privilege was not a "reasonable excuse", within the meaning of s.296.
But accepting that the Code is to be construed on the basis that Parliament assumed that legal professional privilege was not an answer to a requirement made under s.295, it does not follow that Parliament intended legal professional privilege to be outside the protection conferred by s.296 if that assumption should prove to be wrong. The expression "reasonable excuse" has an ambulatory operation. Absent a contrary indication from other provisions of the Code, the intention of Parliament, therefore, was that the words "reasonable excuse" should include any current legal right to resist the compulsory production of documents or answering of questions. Since Baker v. Campbell, legal professional privilege has been recognised as such a right. Exercise of the privilege is a "reasonable excuse", therefore, unless the provisions of the Code indicate the contrary. Hence, the assumption that legal professional privilege was not a "reasonable excuse" within the meaning of s.296, at the time of its enactment, is not itself a ground for holding that Parliament intended that legal professional privilege could not be a "reasonable excuse".
The second contention of the appellant is that, having regard to the purpose of Pt VII, the language of s.295, reinforced by the provisions of ss.299(2)(d) and 308, evinces a legislative intention to exclude legal professional privilege from the scope of the expression "reasonable excuse" for failing to comply with s.295.
In determining the question arising from this contention, three rules of construction are of importance, but two rules point in one direction and the other rule in the opposite direction. One rule is that enacted in s.5A of the Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code ("the Interpretation Code") which provides that "a construction that would promote the purpose or object underlying the relevant Act ... shall be preferred to a construction that would not promote that purpose or object". Another is the rule that a statute will not be construed to abolish a fundamental common law right unless the legislative intention to do so emerges clearly by either express words or necessary intendment: Sorby v. The Commonwealth (1983) 152 CLR 281 , at pp 289, 309, 311; Baker v. Campbell, at pp 96-97, 104, 116, 123. The third is the rule that a common law privilege will be impliedly abrogated by an obligation, expressed in general terms, to answer questions or produce documents if the character and purpose of the provision indicate that the obligation is not intended to be subject to any qualification: Pyneboard Pty. Ltd. v. Trade Practices Commission (1983) 152 CLR 328 , at p 341.
The right to refuse to disclose communications and materials passing between a legal adviser and client for the purposes of advice or use in existing or anticipated litigation is a fundamental common law right: Baker v. Campbell. An intention to abolish the privilege will not be assumed and will not be inferred "from indirect references, uncertain inferences or equivocal considerations": The Commissioner of Police v. Tanos (1958) 98 CLR 383 , at p 396. Nor is such an intention to be inferred from the application of the expressio unius principle: cf. Annetts v. McCann (1990) 65 ALJR 167 , at p 168; 97 ALR 177 , at pp 178-179. This right can be taken away only by express words or necessary implication. The general words of s.295 are not themselves sufficient to abolish the privilege any more than the general words of s.10 of the Crimes Act 1914 (Cth) were sufficient to abolish the privilege in Baker v. Campbell. Nor are the references to the privilege in ss.299(2)(d) and 308, when read with s.295, sufficient to indicate an intention to exclude the privilege. The words of s.299(2)(d) - "matter in respect of which a claim of legal professional privilege could be made by the person in the proceedings if the provisions of this Division (sic) did not apply in relation to that evidence" - do not unequivocally indicate that Parliament intended the privilege not to be a "reasonable excuse" for the purpose of s.296.
They are explicable on the basis that the Parliament assumed that the privilege did not apply in Pt VII proceedings and that once privileged matter was disclosed it would thereafter be admissible in any legal proceedings. Section 299(2)(d) shows only an intention to protect the privilege, not an intention to exclude it from the protection conferred by s.296(2). Of course, s.299(2)(d) is unnecessary if the privilege can be claimed in answer to a requirement made under s.295. But that is because Parliament assumed that legal professional privilege did not apply in Pt VII proceedings; s.299(2)(d) gives no guidance as to what the intention of Parliament was if the privilege should be held to be available in those proceedings. Likewise, the terms of s.308 do not unequivocally indicate that the Parliament intended to exclude legal professional privilege as a "reasonable excuse" within the meaning of s.296(2). That section is also explicable on the basis that the privilege was assumed to be inapplicable in Pt VII proceedings. Even then s.308 seeks to protect the position of the legal practitioner by entitling him or her to refuse to comply with the requirement unless authorised by the person entitled to claim the privilege.
Ironically, the assumption of Parliament that the privilege did not apply in Pt VII proceedings negates the inference which might otherwise be drawn from the terms of ss.299(2)(d) and 308. If Baker v. Campbell had been decided before the enactment of the Code, those two provisions would have given rise to the inference that Pt VII intended to abolish the privilege as a "reasonable excuse" for failing to comply with a s.295 requirement.
The general words of s.295 and the references to legal professional privilege in ss.299 and 308, however, are equivocal on the issue whether Parliament intended to abolish legal professional privilege as an excuse for failing to comply with s.295. Consequently, they do not compel the inference that Parliament intended to withdraw that privilege from the ambit of the words "reasonable excuse" in s.296(2). But the appellant says that s.295 is capable of that construction and that the Code is to be interpreted in accordance with the rule laid down by the Interpretation Code that "a construction that would promote the purpose or object underlying" the Code is to be preferred "to a construction that would not promote that purpose or object". One of the objects of the Code is to investigate the affairs of corporations for the purpose of determining whether the Commission should institute criminal or civil proceedings. Clearly that object is promoted by the Commission having available all relevant evidence including evidence of communications and documents passing between a legal practitioner and client. However, the appellant's argument on this point cannot succeed unless the words of s.296(2) - not s.295 - are capable of a construction that legal professional privilege is excluded from the ambit of the words "reasonable excuse" in that sub-section. Whether that is so depends on the answer to the question whether Pt VII of the Code, read as a whole, unequivocally indicates an intention to exclude the privilege from the defence given by s.296(2). Consequently, the rule of construction embodied in s.5A of the Interpretation Code does not assist the appellant. The success of the appellant's case depends on whether the general words of s.295 together with the purposes of the Code evince a manifestly plain intention to exclude legal professional privilege from the scope of s.296(2).
In Pyneboard Pty. Ltd. v. Trade Practices Commission, this Court considered whether s.155 of the Trade Practices Act 1974 (Cth) intended to abolish the right to refuse to answer questions if they expose the person questioned to a civil penalty. By majority, the Court held that it did. In the course of doing so, Mason A.C.J., Wilson and Dawson JJ. said (at p 341):
"it is necessary to bear in mind the general principle that a statute will not be construed to take away a common law right unless the legislative intent to do so clearly emerges, whether by express words or by necessary implication: Pearce, Statutory Interpretation in Australia, 2nd ed. (1981) pars. 113-116; cf. Mitcham v. O'Toole ((1977) 137 CLR 150 ).
In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation."
This statement was intended as a general rule of construction for determining whether a statute had impliedly abrogated a common law right or privilege. It was deduced from decisions such as Mortimer v. Brown (1970) 122 CLR 493 and King v. McLellan (1974) VR 773. It is applicable to the present case. Section 296(2) makes it clear that the general power conferred by s.295 was intended to be subject to the qualification that a requirement under that section need not be complied with if there was a "reasonable excuse" available. Unlike s.155 of the Trade Practices Act, therefore, the general terms of s.295 show no implied intention to abolish all relevant common law rights and privileges. To the contrary, the terms of s.296(7) expressly abolishing the common law right to refuse to incriminate oneself, and the terms of s.296(2) allowing a person with a "reasonable excuse" to refuse or fail to comply with a requirement made under s.295 show conclusively that s.295 has no such implied intention. Because of the presence of s.296(2) and (7), the general purpose and character of Pt VII do not assist the appellant's claim.
Conclusion
At the time of enactment of the Code, Parliament assumed that legal professional privilege was applicable only in judicial and quasi-judicial proceedings. Acting on that assumption, it took steps to protect a legal practitioner asked to reveal matters protected by the privilege; it also took steps to protect the use of information disclosed in breach of that privilege. At the same time, Parliament permitted a person to refuse to comply with a requirement under s.295 if that person had a reasonable excuse for doing so. Except for self-incrimination (s.296(7)), the expression "reasonable excuse" was intended to include any general common law right or privilege to refuse to answer questions or produce documents. Legal professional privilege has now been held to be such a right or privilege. The fact that Parliament assumed that that privilege was not a general common law privilege, available outside judicial or quasi-judicial proceedings, does not mean that Parliament intended legal professional privilege to be outside the protection conferred by the words "reasonable excuse" if, contrary to its belief or assumption, the privilege was otherwise held to be available in Pt VII proceedings. Moreover, because of the qualification contained in s.296(2) and the terms of s.296(7), the character and purpose of Pt VII provide no ground for inferring that Parliament intended to exclude legal professional privilege as a "reasonable excuse" for not complying with a requirement made under s.295.
The appeal should be dismissed with costs.