Corporate Affairs Commission (NSW) v Yuill

(1991) 172 CLR 319
(1991) 9 ACLC 843

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(Judgment by: Gaudron)

CORPORATE AFFAIRS COMMISSION OF NEW SOUTH WALES v BRIAN RICHARD YUILL AND ORS

Court:

Judges: Brennan
Dawson
Toohey

GaudronMcHugh JJ.

Other References:
F.C. 91/025

Judgment date: 27 June 1991

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Judgment by:
Gaudron

This is an appeal from a declaratory order of the New South Wales Court of Appeal to the effect that certain documents need not be produced in the course of a special investigation under Pt VII of the Companies (New South Wales) Code ("the Code") by reason of legal professional privilege.

Part VII of the Code provides for special investigations into the affairs of corporations when directed by the Minister, the Commonwealth Minister or the Ministerial Council in the public interest or in the national interest: s.291 of the Code. Special investigations may be conducted by the National Companies and Securities Commission ("the Commission") or by an inspector appointed by the Commission: s.292. The investigation involved in this appeal is one conducted by the appellant as inspector, the appellant having appointed a delegate for that purpose.

Section 295(1) of the Code empowers an inspector to require an officer of a corporation whose affairs are being investigated under Pt VII:

"(a) to produce ... such books ... relating to the affairs of the corporation as are in the custody or under the control of the officer;

...

(c) to appear before the inspector for examination on oath or affirmation and to answer questions put to him".

Section 5(1) of the Code defines "books" to include "any document".

Section 296(2) of the Code provides that "(a) person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under section 295." The present case arises out of the failure of the first respondent, an officer of a corporation whose affairs are being investigated under Pt VII, to comply with a requirement to produce documents which, although not the documents of the corporation under investigation, relate to its affairs. It is not in issue that legal professional privilege subsists in the first respondent with respect to those documents. Nor is it in issue that, unless that privilege is abrogated by the Code, it may be claimed in the course of an investigation under Pt VII.

This Court had not given its decision in Baker v. Campbell (1983) 153 CLR 52 when the Code was enacted in 1981. Until that decision it was generally thought that legal professional privilege could be claimed only in the course of judicial and quasi-judicial proceedings. See, for example, O'Reilly v. State Bank of Victoria Commissioners (1983) 153 CLR 1 . The appellant relies on that history as a matter bearing on the meaning and effect of the Code so far as it concerns legal professional privilege. It may be more accurate to say that it relies on that history as a matter bearing upon the approach that should be taken in ascertaining that meaning and effect. In any event, it was put that there should be imputed to the Parliament of New South Wales, when it enacted the Code in 1981, the belief that legal professional privilege could not be claimed in answer to a requirement of the nature of that laid down by s.295(1).

It is a well-understood rule of construction that a statute is not read as abrogating important common law rights, including legal professional privilege, save to the extent directed by express words or necessary implication. See Baker v. Campbell, especially at pp 90, 96-97, 104-105, 116 and 123. See also Potter v. Minahan (1908) 7 CLR 277 , at p 304; Ex parte Walsh and Johnson; In Re Yates (1925) 37 CLR 36 , at p 93; Sorby v. The Commonwealth (1983) 152 CLR 281 , at pp 289-290, 309 and 311; and Balog v. Independent Commission Against Corruption (1990) 169 CLR 625 , at pp 635-636. It was submitted on behalf of the appellant that, by reason of the belief which, in its submission, should be imputed to the Parliament in 1981, that rule should not be applied in the present case.

The rule that important common law rights are abrogated only by express words or necessary implication is one which can be applied only to provisions capable of abrogating those rights. Thus, it can be applied to a provision creating an obligation to provide information - at least if the obligation is expressed in general terms. However, this is not a case which is concerned with the meaning of words creating an obligation to provide information. Rather, it is concerned with the meaning of an exception or qualification to such an obligation. That exception or qualification is constituted by the words "reasonable excuse" in s.296(2), which words mark out the matters entitling an officer of a corporation to refuse to provide information required under s.295(1). The exercise in the present case is to ascertain the meaning of those words.

The expression "reasonable excuse" is not defined in the Code. However, in its immediate context and as a matter of ordinary language, it is quite wide enough to cover any matter which the law acknowledges by way of answer, defence, justification or excuse for refusing or failing to provide information pursuant to a requirement of the type laid down by s.295(1). And, as a matter of ordinary grammar and by reason of the nature of proscriptive provisions, the expression has an ambulatory operation so that it refers to such answer, defence, justification or excuse acknowledged by the law as at the time of the refusal or failure in question. Legal professional privilege is, of its nature, such a matter. And, by reason of the grammar and the proscriptive nature of s.296(2), it is of no significance that it might have been thought, when the Code was enacted, that it could be claimed only in judicial and quasi-judicial proceedings.

The ascertainment of the meaning of words according to ordinary usage does not necessarily determine their true meaning. It may be that the words have been used in some technical sense; it may be that their ordinary meaning is cut down, modified, qualified or extended by the terms of some other provision in the instrument; or, it may be that the words must be construed as cut down, modified, qualified or extended by reason of the need to reconcile them with some other provision. And, quite apart from those matters, there are other circumstances in which a court will depart from the ordinary meaning of words. Those circumstances are limited and, in the main, are confined to those involving the use of general language which, because of its breadth, might result in unforeseen consequences. The rules which permit of that approach are well settled and are often stated in terms of a presumption that the legislature did not intend to effect a particular consequence. See Bropho v. Western Australia (1990) 171 CLR 1 , at pp 18-19, and the examples there given. The rule that general words are not read as abrogating important common law rights save to the extent required by express words or necessary implication is such a rule.

Although resort is often had to the "intention of the legislature" in formulating rules of construction and in construing statutory provisions, that intention has aptly been described as "somewhat of a fiction": Mills v. Meeking (1990) 169 CLR 214 , per Dawson J. at p 234. And, with equal aptness, the expression "the intention of the legislature" has been described, at least in its popular usage, as a "very slippery phrase, which ... may signify anything from intention embodied in positive enactment to speculative opinion as to what the Legislature probably would have meant, although there has been an omission to enact it": Salomon v. Salomon and Co. [1897] AC 22 , per Lord Watson at p 38. The difficulty inherent in the notion of "the intention of the legislature" dictates that, save where there are settled rules or where there is some feature of the legislation requiring otherwise, the legislature should be taken to have said what it meant and to have meant what it said. Or, more accurately in terms of legal principle, the words of the statute should be taken to bear their natural and ordinary meaning. And that is the fundamental rule, often said to be the golden rule of statutory interpretation, namely, that "the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument": Grey v. Pearson (1857) 6 HLC 60 , per Lord Wensleydale at pp 105-106. And that rule is dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.

It follows from what has been said that the "intention of the legislature" to be inferred from the general belief in 1981 that legal professional privilege could not be claimed in answer to a requirement of the nature of that laid down by s.295(1) cannot, of itself, displace the ordinary meaning of the words "reasonable excuse" in s.296(2). The words have no technical meaning: there is no settled rule which might affect their ordinary meaning. Accordingly, they can be given some other meaning only if some feature of the Code so requires. In that case, the "belief" or the "intention" of the legislature may serve to provide an indication of or to confirm some other meaning which, because it reconciles the words "reasonable excuse" with that feature, is their true meaning.

The appellant invokes two features of the Code in support of its argument. The first is that the Code, in s.299(2)(d) and in s.308, expressly confers or confirms certain benefits associated with legal professional privilege. According to the argument, those provisions are unnecessary if legal professional privilege can be the subject of an independent claim in the course of an investigation under Pt VII. The second feature upon which the appellant relies is the purpose of a Pt VII special investigation.

Paragraph (d) of s.299(2) provides that "(e)vidence of a statement made ... at an examination" which discloses "matter in respect of which a claim of legal professional privilege could be made ... if the provisions of this Division (sic) did not apply in relation to that evidence" is not admissible in subsequent proceedings if objection is taken in those later proceedings. Section 308 makes special provision with respect to legal practitioners as follows:

"Where in the exercise of his powers under section 295 an inspector requires a duly qualified legal practitioner to disclose a privileged communication made by or on behalf of or to that legal practitioner in his capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with a requirement, he shall, if he knows the name and address of the person to whom or by or on behalf of whom the communication was made, forthwith furnish that name and address in writing to the inspector."

It is clear that, save to the extent that provision is made with respect to the waiver of legal professional privilege, s.308 is not necessary if that privilege can be the subject of an independent claim. See, as to the waiver of privilege, Re Stanhill Consolidated Ltd. (1967) VR 749. It is not clear that no useful purpose attends s.299(2)(d). It may be that that paragraph usefully operates where privileged matter is disclosed in consequence of a ruling by an inspector, after objection, that privilege does not attach. However, the presence of ss.299(2)(d) and 308 does prompt curiosity. That curiosity is, to a considerable extent, satisfied by the history to which the appellant points and from which it might reasonably be inferred that the Parliament of New South Wales, when it enacted the Code, intended to provide a measure of protection which it believed would not otherwise be available. To the extent that the intention of the Parliament is relevant, that explanation does not import an intention to abrogate legal professional privilege. On the contrary, it imports an intention to confer at least some of the benefits associated with it.

Even if one treats the presence of ss.299(2)(d) and 308 as inexplicable, they do not require the words "reasonable excuse" to be read down. Those provisions do not expressly cut down, qualify or modify the ordinary meaning of those words. In this respect they are to be contrasted with s.296(7) which, to the extent of a requirement to answer questions, expressly abrogates the privilege against incrimination by providing that "(a)n officer is not excused from answering a question ... on the ground that the answer might tend to incriminate him". The express abrogation of the privilege to the extent specified in that sub-section precludes any implication of its abrogation to some greater extent. The decision in Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs (1985) 156 CLR 385 provides no basis for holding otherwise. The Securities Industry (Victoria) Code considered in that case allowed, in s.8(6)(a)(ii), that a person could be required "to make a statement providing (an) explanation ... as to any matter relating to the compilation of the books or as to any matter to which the books relate" and also expressly provided, in s.10(5), that a person could not claim the privilege against incrimination as an excuse for not making that statement. It is but a short step to say that, if an explanation as to the compilation or the contents of books cannot attract a claim of privilege, that privilege is also excluded with respect to their production. Part VII of the Code contains no provision which is truly comparable with s.8(6)(a)(ii) of the Securities Industry (Victoria) Code.

Neither s.299(2)(d) nor s.308 detracts in any way from the terms of or impairs the operation of s.296(2) unless, for some reason, they are treated as exhaustive of the benefits available to a person otherwise entitled to claim legal professional privilege. The only matter which might found an argument that those provisions should be treated as exhaustive of the benefits available to a person otherwise entitled to claim legal professional privilege is the reference in s.299(2)(d) suggesting that "a claim of legal professional privilege could be made ... if the provisions of this Division (sic) did not apply". The use of those words is curious, particularly in light of the general understanding in 1981 that legal professional privilege could be claimed only in judicial and quasi-judicial proceedings. Even so, the words cannot be used to justify an approach that would treat those provisions as exhaustive. As earlier mentioned, s.296(7) abrogates the privilege against self-incrimination, but only to the extent involved in "answering a question put ... by an inspector". If ss.299(2)(d) and 308 were to be treated as exhaustive, they would, by their silence, effect an abrogation of legal professional privilege with respect to the production of documents and the answering of questions, whilst s.296(7), by reason that it abrogates the privilege against incrimination in terms, effects an abrogation of that privilege only to the extent involved in answering questions.

Of course, no incongruity is involved if s.299(2)(d) is treated as exhaustive of the benefits associated with legal professional privilege in its application to an oral examination under s.295(1). This was the approach adopted by Handley J.A. in the Court of Appeal. There are two difficulties with that approach. First, although similar provision is made in s.299(2)(a) with respect to the inadmissibility of incriminating answers in subsequent proceedings, the privilege against incrimination is, to the extent therein specified, expressly abrogated by s.296(7). That express abrogation tells against the limited evidentiary provisions in s.299(2)(a) and (d) performing any greater function than is indicated by their terms. Secondly, to the extent that the general understanding as to the availability in 1981 of legal professional privilege provides a basis for discerning any relevant legislative intent, that understanding suggests an intention to confer benefits, not to abrogate the privilege. Indeed, it is somewhat odd to ascribe to the legislature an intention to abrogate (whether wholly or partly) a privilege which, on the premise attending the appellant's argument, it thought need not be abrogated. There is no acceptable basis for treating s.299(2)(d) as exhaustive even in the limited area of answering questions put by an inspector. Accordingly, it cannot be used to limit the ordinary meaning of the words "reasonable excuse".

For the sake of completeness, further mention should be made of s.299(2)(a) and (d). As earlier indicated, those paragraphs enable a "statement" containing incriminating matter or matter involving legal professional privilege to be kept out of evidence in subsequent proceedings. No like provision is made with respect to books. Some attempt was made in argument to suggest, by reference to s.307(1)(d), that that omission was the result of a legislative intention that documentary evidence should always be admissible in subsequent proceedings. Paragraph (d) of s.307(1) provides that the Commission may "permit the use of ... books (of which an inspector has taken possession) for the purposes of legal proceedings instituted as a result of the investigation". However, s.307(1)(d) cannot assist in the present exercise, for its meaning and effect necessarily depend on the meaning and effect of s.296(2) and (7): to the extent that books contain privileged matter, they will come into the possession of an inspector only if the relevant privilege has been abrogated by the Code (which, so far as legal professional privilege is concerned, is the question to be decided by this appeal) or abandoned.

It is necessary to consider whether the purpose of a special investigation under Pt VII limits the ordinary meaning of the words "reasonable excuse" in s.296(2).

The "purposive approach" to construction is now often required by statute. That approach is directed with respect to the Code by s.5A of the Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code. See also s.33 of the Interpretation Act 1987 (N.S.W.) which directs that a construction "that would promote the purpose or object underlying the Act" is to be preferred to one "that would not promote that purpose or object". There is no difficulty in applying a direction to that effect if a choice has to be made between different meanings that are fairly open. The circumstances, if any, in which it may be applied to deprive unambiguous words of their ordinary and grammatical meaning must be extremely rare: a direction to that effect is not authority for distilling the purpose or object of an Act in isolation from its terms or divorced from the means which the legislature has selected for its attainment.

The "purposive approach", at least in its common statutory formulation, is concerned with the purpose or object of a statute, not with the purpose or object of some particular provision or part thereof. Even so, it is not unreasonable to ascribe a purpose or object to a special investigation under Pt VII. That course was taken in relation to an examination under s.250 of The Companies Act 1961 (Q.) in Mortimer v. Brown (1970) 122 CLR 493 , where it was said by Kitto J. (at p 496) that its "evident purpose" was "to enable a suggestion of fraud or concealment of a material fact to be fully investigated by means of the public examination of certain classes of persons". His Honour added that "(t)o read down the wide terms of the section so as to allow a danger of self-incrimination as a valid ground for refusing to answer a question would render the provision relatively valueless in the very cases which call most loudly for investigation." See also per Barwick C.J. at p 495, and per Walsh J. at p 498. And the same approach was taken by Mason C.J. and by Dawson J. with respect to s.541 of the Code in Hamilton v. Oades (1989) 166 CLR 486 , at pp 496-497 and 508 respectively.

There is no difficulty in ascribing to a special investigation under Pt VII of the Code the general purpose of enabling the investigation of companies whose affairs have been so conducted as to attract the concern of the Minister, the Commonwealth Minister or the Ministerial Council. And there is no difficulty in saying that, to the extent that fraud, dishonesty or even incompetence remains unrevealed, that purpose is not achieved. Although it is possible to ascribe that general purpose to an investigation under Pt VII, it is more accurate to identify the purpose as that of investigating the affairs of a corporation to which Pt VII applies by the means specified in that Part. And the means specified allow that information may be withheld on the ground of "reasonable excuse". The Companies and Securities (Interpretation and Miscellaneous Provisions) (New South Wales) Code provides no authority for an approach which would allow the means selected by the Parliament to be extended or supplemented because, in the view of a court, the general purpose of investigation would thereby be more easily or better achieved. That is what is involved in the argument that the words "reasonable excuse" should be read, contrary to their natural and ordinary meaning, as not including an established claim of legal professional privilege.

The appeal should be dismissed.