Federal Court of Australia

Palmer v Australian Securities and Investments Commission [2025] FCAFC 151

ORDERS

THE COURT ORDERS THAT:

1.    The applicants be granted an extension of time within which to file and serve their application for leave to appeal.

2.    Leave to appeal be granted.

3.    The appeal be dismissed with costs, including the costs of and incidental to the extension of time and leave to appeal applications.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    The present applicants, Mr Clive Palmer and Palmer Leisure Coolum Pty Ltd (PLC), have applied for an extension of time seeking leave to appeal against the decision of the primary judge in which her Honour temporarily stayed their proceeding against the Australian Securities and Investments Commission and the Commonwealth Director of Public Prosecutions.

2    The proceeding below concerned a challenge to ASIC’s exercise of its coercive statutory power under s 19 of the Australian Securities and Investments Commission Act 2001 (Cth) concerning Mr Palmer who was required to attend a s 19 examination on 7 July 2016.

3    In the proceeding below, the applicants sought declarations and injunctive relief against ASIC and the CDPP relating to the alleged unlawfulness of the s 19 examination of Mr Palmer and the use or potential use of the resultant transcripts, including in relation to both actual and potential criminal or other proceedings against the applicants.

4    On the applications of both ASIC and the CDPP seeking a permanent stay of the proceeding, her Honour granted a temporary stay of the proceeding in order to prevent the fragmentation of Queensland criminal proceedings brought against both Mr Palmer and PLC.

5    The applicants have asserted before us that the primary judge’s grant of the stay involved essentially the following errors as set out in their proposed notice of appeal, which proposed grounds we have slightly re-ordered.

6    First, it is said that her Honour, in finding that it would be an abuse of process for this Court to deal with the alleged unlawfulness of the s 19 examination when that question might arise in the course of a subsequent evidentiary ruling in the criminal proceedings, misapprehended the concept of fragmentation (ground 1). The applicants have said that this ground gives rise to a significant issue concerning the application of the proper test of fragmentation of criminal proceedings as described in Sankey v Whitlam (1978) 142 CLR 1 at 25 and 26 per Gibbs ACJ.

7    Second, it is said that her Honour erroneously found that the proceeding before her and the criminal proceedings involved the same central issue, when the alleged unlawfulness of the s 19 examination arose in the context of distinct issues (ground 2).

8    Third, it is said that her Honour erred in finding that merely because the lawfulness of the s 19 examination could be challenged in the context of an evidentiary ruling in the criminal proceedings, it could not be pursued in the proceeding before her absent compelling reasons (ground 3).

9    Fourth, it is said that her Honour departed from the fundamental principle that parties are entitled to have their claims heard absent exceptional circumstances (ground 4). The applicants have said that this ground gives rise to a significant issue concerning the principle which permits the circumscribed occasion for departure from what was said to be the fundamental principle stated in Rochfort v John Fairfax and Sons Ltd [1972] 1 NSWLR 16 at 19 per Sugerman ACJ.

10    Fifth, it is said that her Honour erred in taking into account the perceived wealth and power of Mr Palmer in dealing with the stay applications brought by the respondents (ground 6).

11    Sixth, it is said that there was no rational basis for her Honour to order a temporary stay in the circumstances (ground 5). The applicants have said that this ground gives rise to a significant issue concerning the distinction in principle between considerations relevant to the grant of a temporary stay and considerations relevant to the grant of a permanent stay.

12    Now the applicants require an extension of time within which to file and serve their application for leave to appeal. But such an extension is not opposed and accordingly we will grant it.

13    In terms of justifying the grant of leave to appeal, the applicants have made a number of points.

14    It is said that the application of the principle stated in Sankey to cases such as the present where no direct attack is made on the rulings of a criminal trial court is of general importance. It is said that so too is whether it is appropriate to order a temporary stay in circumstances where an abuse of process based on the fragmentation of criminal proceedings is alleged.

15    Further, it is said that the primary judge’s decision deprived the applicants of their fundamental right to have their civil claim heard, and it is said that they will suffer substantial injustice if that decision is not reversed such that it is in the interests of justice for leave to be granted.

16    Contrastingly, ASIC and the CDPP say that leave to appeal should be refused as the applicants have not satisfied the well-known two-pronged test for the grant of leave. But if leave is granted, they say that the appeal should be dismissed.

17    Generally, ASIC and the CDPP say that the applicants’ present challenge forms part of a long history of collateral attacks brought by the applicants against criminal proceedings, presently in the Magistrates Court of Queensland, in which the applicants are charged with offences against the Corporations Act 2001 (Cth).

18    The CDPP and ASIC say that the challenge to the lawfulness of the s 19 examination of Mr Palmer conducted by ASIC and the challenge to the alleged use and disclosure of the transcript of that examination by ASIC and the CDPP can be raised in the criminal proceedings.

19    Further, they say that the relief sought by the applicants before the primary judge, if granted, would affect the conduct of the criminal proceedings, including in respect of matters as foundational as the formulation of the charges, evidence that could be adduced and the involvement of investigators and prosecutors in the prosecution.

20    For the reasons that follow, we will grant leave to appeal but dismiss the appeal.

21    We have granted leave to appeal because we consider that there are points of principle concerning the interface between the civil and criminal proceedings that have been raised which have sufficient significance such that we should determine them even if only to inject further clarity, assuming that to be absent which is, of course, contestable.

22    Further, although the two-pronged test set out in Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 at [26] per Dowsett, Foster and Yates JJ is usually the appropriate test to apply, that is not definitively so in all circumstances, particularly where as here one is not dealing with just a matter of practice or procedure. Further, the outcome of her Honour’s order granting a temporary stay does have significant consequences as to the forum in which the applicants can pursue their challenge as to the lawfulness of the s 19 examination and in that sense has finally determined the priority question between the parties as to where that issue should be addressed. It may be said that a prima facie case for the grant of leave can be made out where the effect of the interlocutory order is to determine an important issue in the proceeding, as is the case here (see Samsung at [33], citing Ex parte Bucknell (1936) 56 CLR 221 at 225 to 227).

23    As we have indicated, we will grant leave to appeal but it is convenient to continue to refer to the applicants as such given their status before us prior to these reasons being delivered. We should deal with one other preliminary matter.

24    Appropriately but nevertheless belatedly, the CDPP raised before us but not before the primary judge a jurisdictional argument to the effect that the primary judge did not have jurisdiction to entertain the proceeding before her either under s 39B(1A)(c) of the Judiciary Act 1903 (Cth) or under s 1337B(1) of the Corporations Act.

25    There are three short points to make here. First, this argument says nothing about our appellate jurisdiction to correct for error. Second, if we take the view, as we have, that the challenge to her Honour’s order for a temporary stay ought to be dismissed on its merits, we can so proceed without deciding the jurisdictional question (see Babet v Electoral Commissioner (2023) 300 FCR 81 at [58] to [74] per Besanko, Wheelahan and Stewart JJ). Third, and alternatively to the second point, if we need to decide the jurisdictional question, in our opinion the better view is that her Honour did have jurisdiction in relation to some aspects of the relief sought against ASIC itself. It is convenient to return to this issue at the end of our reasons after we have addressed the applicants’ arguments on their merits.

26    Before proceeding to directly address the grounds of appeal, it is necessary to say something concerning the nature of the applicants’ pleaded case below, the criminal proceedings on foot against the applicants and then the primary judge’s consideration of the issues raised before her.

The applicants’ pleaded case

27    The statement of claim set out allegations that provided direct links between the alleged unlawfulness asserted by the applicants concerning the examination under s 19 of the ASIC Act and its fruits and criminal proceedings against the applicants. It contained inter-alia the following allegations.

28    First, the parties were described in the following terms:

[3]    The First Respondent (ASIC):

…

(e)    caused the compulsory examinations pursuant to s19 of the ASIC Act pleaded in paragraph [102] below to occur;

(f)    caused the following prosecutions to be begun and/or carried on:

(i)    a complaint - general purpose - made, and summons dated 22 February 2018 commencing criminal proceedings in the Magistrates Court of Queensland at Brisbane against PLC, CDPP File No QC16100658 (PLC Complaint); and

(ii)    a complaint - general purpose - made, and summons dated 22 February 2018 commencing criminal proceedings in the Magistrates Court of Queensland at Brisbane against C Palmer, CDPP File No QC161006JBA (C Palmer Complaint), (collectively the Commonwealth Criminal Proceedings).

[4]    The Second Respondent (CDPP) is, and was at all times material to this proceeding:

(a)    the Director of Public Prosecutions (Director) appointed pursuant to subsection 5(1) of the Director of Public Prosecutions Act 1983 (Cth) (DPP Act); and

(b)    the officer who is conducting the Commonwealth Criminal Proceedings, on behalf of ASIC;

(c)    conducted assessments of the proposed charges from its Melbourne office in the State of Victoria, engaging counsel in Victoria.

29    Second, Part E described the asserted unlawfulness in the following terms:

E: The section 19 examination was unlawful

[95]    On 29 October 2015, purportedly pursuant to s13(1) of the ASIC Act, ASIC commenced an investigation of PLC and Mr Palmer in relation to suspected contraventions of, inter alia, s 631(1) of the Act.

…

[98]    On its proper construction, s49(1) of the ASIC Act requires that it appears to a relevant officer of ASIC, or objectively it should appear to such a relevant officer of ASIC, that a person may have committed an offence against the corporations legislation and ought to be prosecuted for the offence.

[99]    By no later than 7 October 2015, ASIC had obtained the evidence and formed the view, such that Mr Palmer was a person within the purview of s49(1) and, by virtue of the operation of s49(4), not able to be examined, …

[100]    By document dated 17 May 2016, ASIC purported to summons Mr Palmer to a compulsory interview.

…

[102]    On 7 July 2016, Mr Palmer was interviewed by representatives of ASIC as follows: …

[103]    The compulsory examination was not voluntary.

[104]    At the examination, Mr X claimed privilege on behalf of Mr Palmer and advised that Mr Palmer was there under compulsion.

[105]    Mr Palmer efficaciously claimed privilege against self-incrimination on 49 occasions during the interview.

[106]    In the premises of paragraphs [95] to [105] above:

(a)    the summons issued to Mr Palmer dated 17 May 2016 compelling him, pursuant to s 19 of the ASIC Act, to be subjected to examination under oath, and to provide reasonable assistance to ASIC in relation to its investigation, was unlawful and in contravention of s49(1) and (4) of the ASIC Act;

(b)    the examination of Mr Palmer purportedly pursuant to s 19 of the ASIC Act conducted by ASIC on 7 July 2016, was unlawful;

(c)    the transcripts of the compulsory examination of Mr Palmer under s 19 of the ASIC Act were unlawfully obtained;

(d)    any dissemination of the transcripts of the compulsory examination was therefore also unlawful.

30    Third, Part F described the consequences of the alleged unlawfulness in the following terms:

F: The use and dissemination of the transcript was unlawful

[107]    Pursuant to s68(2) and (3) and 76(1) of the ASIC Act:

(a)    information provided by a person examined by ASIC (and the fact of that person signing a record of examination) the person claims might tend to incriminate the person or make the person liable to a penalty is not admissible against that person in any subsequent criminal proceeding or proceeding for the imposition of a penalty;

(b)    any information, document or other thing derived or obtained as a direct or indirect consequence of the person examined providing that original information (or signing a record of examination) which the person claims might tend to incriminate the person or make the person liable to a penalty is not admissible against that person in any subsequent criminal proceeding or proceeding for the imposition of a penalty.

[108]    On a date the Applicants cannot presently particularise:

(a)    ASIC provided transcripts of a compulsory examination of Mr Palmer to the CDPP;

(b)    ASIC and/or the CDPP disseminated the transcripts within CDPP and to counsel retained by CDPP.

[109]    On a date prior to 22 February 2018, ASIC used the transcripts of a compulsory examination of Mr Palmer to formulate the PLC Complaint and the C Palmer Complaint, as follows …

[110]    The PLC Complaint was served on PLC on 2 March 2018.

[111]    The C Palmer Complaint was served on C Palmer on 2 March 2018.

[112]    On a date prior to 11 June 2018, ASIC used the transcripts of the compulsory examination of Mr Palmer to draft a summary of facts (SOF).

[113]    On 11 June 2018, the SOF was served on Alexander Law.

[114]    ASIC and CDPP were not authorised by the ASIC Act, or otherwise:

(a)    to use the transcripts of the compulsory examination of Mr Palmer to:

(i)    formulate the PLC Complaint and the C Palmer Complaint;

(ii)    draft the SOF;

(b)    adduce into evidence, and rely on in evidence, the SOF in any court; or

(c)    disseminate to third parties the transcripts of the compulsory examination.

[115]    In the premises:

(a)    providing the transcripts of the compulsory examination of Mr Palmer to the CDPP, was unlawful;

(b)    using the transcripts of the compulsory examination of Mr Palmer to formulate the PLC Complaint and the C Palmer Complaint, was unlawful;

(c)    using transcripts of the compulsory examination of Mr Palmer to draft the SOF, was unlawful;

(d)    preparing evidence for court proceedings, was unlawful.

31    Fourth, Part G linked the alleged unlawfulness to two well known criminal law principles in the following terms:

G: The compulsory examination breached a companion principle of criminal law

[116]    It is a fundamental principle of the accusatorial system of criminal justice that the onus of proof beyond reasonable doubt rests on the Crown (Fundamental Principle).

[117]    A companion rule to the Fundamental Principle is that an accused person cannot be required to testify to the commission of the offence charged (Companion Principle).

[118]    A further companion principle is, or ought to be held to be, that the decision to use compulsive investigative powers in relation to whether an offence has been committed, such as those in s19, or s49, of the ASIC Act, must be for the sole purpose of investigating whether such offence has been committed (and if it appears that it has, its prosecution) and not for any other or additional purpose or consideration (the Sole Purpose of Investigating an Offence Principle).

[119]    The Investigation had, as an additional purpose or consideration, ASIC assisting with the TPC Purpose, as alleged in section C.4 above.

[120]    In the premises:

(a)    the summons issued to Mr Palmer dated 17 May 2016 compelling him, pursuant to s 19 of the ASIC Act, to be subjected to examination under oath, and to provide reasonable assistance to ASIC in relation to its investigation, was unlawful;

(b)    the examination of Mr Palmer purportedly pursuant to s 19 of the ASIC Act conducted by ASIC on 7 July 2016, was unlawful;

(c)    the transcripts of the compulsory examination of Mr Palmer under s 19 of the ASIC Act were unlawfully obtained.

32    Fifth, both the statement of claim and the originating motion set out the relief claimed.

33    The paragraph A relief was in the following terms:

A    Declarations that:

(i)    The purported exercise by the First Respondent of the power contained in s 19 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) to compulsorily examine the Applicant on 7 July 2016 was unlawful;

(ii)    the summons issued to Mr Palmer dated 17 May 2016 compelling him, pursuant to s 19 of the ASIC Act, to be subjected to examination under oath, and to provide reasonable assistance to ASIC in relation to its investigation, was unlawful;

(iii)    the examination of Mr Palmer purportedly pursuant to s19 of the ASIC Act conducted by ASIC on 7 July 2016, was unlawful;

(iv)    the transcripts of compulsory examination of Mr Palmer under s19 of the ASIC Act were unlawfully obtained;

(v)    the transcript of the compulsory examination by ASIC, and which has been provided to the CDPP, may not be used for any purpose including:

(1)    formulating the charge;

(2)    preparing, relying on, or adducing into evidence, the summary of facts.

34    The paragraphs B to D relief was in the following terms:

B    An order restraining ASIC and the CDPP from using, directly or indirectly, the transcripts of the compulsory examination of Mr Palmer purportedly under s 19 of the ASIC Act, including by restraining any person, whether within ASIC the CDPP or elsewhere, from having any further involvement in relation to any matter concerning the subject matter of the s19 notice.

C    An order requiring ASIC and the CDPP to file an affidavit deposing to whom the transcripts of the compulsory examination of Mr Palmer purportedly under s 19 of the ASIC Act were disseminated.

D    An order requiring ASIC and the CDPP to deliver up to the applicant all copies of the transcripts of the compulsory examination of Mr Palmer purportedly under s 19 of the ASIC Act.

35    Pausing at this point, it is well apparent that the proceeding below and the allegations made emerge from the investigation and prosecution of the applicants. Each section of the statement of claim builds on earlier allegations in the pleading, culminating in Parts F and G and then the prayer for relief. There is a close link between the nature of the allegations made and the extant criminal proceedings.

36    It is said that the examination of Mr Palmer was unlawful. And it is said that the transcripts of that examination were unlawfully obtained, and any dissemination of the transcripts was unlawful.

37    It is said that ASIC provided the transcripts to the CDPP which were used to formulate two criminal complaints, and then used to draft a summary of facts in connection with the criminal proceedings.

38    Before us, the applicants have maintained the position that the proceeding below was not about the criminal proceedings but about the lawfulness of the s 19 examination. But in our view this was not an accurate characterisation in the sense that the assertion as to the latter was being used as the foundation for challenging aspects of the former including the formulation of the criminal charges and the associated summary of facts. This is all well apparent from the pleaded allegations and the relief sought.

39    The applicants have also said that the proceeding below had no direct impact on the criminal proceedings. It was said that there was no order sought staying the criminal proceedings and no challenge to any ruling in the criminal proceedings. And it was said that as the proceeding below has no impact on the criminal proceedings, it can proceed in tandem.

40    But in our view such a perspective is too narrow. First, it reflects an incorrect view of the fragmentation question as we will discuss later. Second, the proceeding below does seek to challenge aspects of the prosecution including the formulation of the charges and the summary of facts. And it does seek to restrain any further use of the fruits of the s 19 examination in the criminal proceedings. Moreover, the fact that the relief sought is broader, and some of it is outside the ambit of the criminal proceedings, does not deny the application of the fragmentation principle but rather fortifies her Honour’s determination which was to grant a temporary stay rather than a permanent stay so that any residual questions and remedies could be dealt with later after the conclusion of the extant criminal proceedings.

41    It is appropriate at this point to identify more precisely the applicants’ argument concerning the unlawfulness of the exercise of the s 19 power.

The nature of the alleged unlawfulness

42    The applicants assert that the s 19 notice issued to Mr Palmer by ASIC was unlawful, being in contravention of s 49(1) and (4) of the ASIC Act.

43    Section 19 is in the following terms:

19    Notice requiring appearance for examination

(1)    This section applies where ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1.

(2)    ASIC may, by written notice in the prescribed form given to the person, require the person:

(a)    to give to ASIC all reasonable assistance in connection with the investigation; and

(b)    to appear before a specified member or staff member for examination on oath or affirmation and to answer questions.

(3)    …

44    Section 49 is in the following terms:

49    ASIC may cause prosecution to be begun

(1)     This section applies where:

(a)     as a result of an investigation; or

(b)     from a record of an examination;

conducted under this Part, it appears to ASIC that a person:

(c)     may have committed an offence against the corporations legislation; and

(d)     ought to be prosecuted for the offence.

(2)     ASIC may cause a prosecution of the person for the offence to be begun and carried on.

(3)     If:

(a)     ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a prosecution for the offence; or

(b)     the offence relates to matters being, or connected with, affairs of a body corporate, or to matters including such matters;

ASIC may, whether before or after a prosecution for the offence is begun, by writing given to the person, or to an eligible person in relation to the body, as the case may be, require the person or eligible person to give all reasonable assistance in connection with such a prosecution.

(3A)     An offence under subsection 63(3) relating to subsection (3) of this section is an offence of strict liability.

(4)     Subsection (3) does not apply in relation to:

(a)     the person referred to in subsection (1); or

(b)     a person who is or has been that person’s lawyer.

(5)    …

45    It would seem that the applicants’ point under s 49 is that Mr Palmer, at the time or prior to the exercise of power under s 19, was a person who fitted within the description of s 49(1). Accordingly, it seems to be said that he fell within s 49(4), and so s 49(3) could not be utilised by ASIC.

46    It then seems to be said, somehow, that necessarily implicitly, this all entailed that ASIC could not then exercise its power under s 19 concerning Mr Palmer if it appeared to ASIC that he met the description under s 49(1).

47    Now there are both legal and factual questions involved in such an argument.

48    The factual question involves an inquiry as to whether it so appeared to ASIC at the relevant time that Mr Palmer fitted the description in s 49(1), which inquiry seems to be quite fact intensive.

49    The legal question involves a consideration as to whether s 49 by necessary implication could limit ASIC’s exercise of power under s 19 even if Mr Palmer met the description under s 49(1) at the time ASIC exercised its s 19 power. The content of the obligation under s 49(3) is to be contrasted with the content of the obligation under s 19(2). Further, there are potentially different time-frame parameters for the exercise of power, and s 49(3) has a focus on “in connection with such a prosecution” as distinct from the investigative focus of s 19(2). Further, for s 49(3) and s 63(3), strict liability is imposed (s 49(3A)). Further, s 63 applies differently to s 19(2) (s 63(1)) as compared to s 49(3) (s 63(3)).

50    We do not need to trouble ourselves further on these questions. Moreover, no argument was put to the primary judge that she could or should deal with only the legal question. Further, the magistrate or judge dealing with the criminal proceedings is well able to deal with all legal and factual questions concerning the applicants’ s 49 argument. We should elaborate further on the criminal proceedings.

The criminal proceedings

51    A prosecution was commenced against PLC on 22 February 2018. The criminal complaint alleges that contrary to s 631(1) of the Corporations Act, PLC did not make an offer for securities in The President’s Club Ltd within two months of publicly proposing to make a takeover bid.

52    Section 631(1) provides:

Proposing or announcing a bid

(1)    A person contravenes this subsection if:

(a)    either alone or with other persons, the person publicly proposes to make a takeover bid for securities in a company; and

(b)    the person does not make offers for the securities under a takeover bid within 2 months after the proposal.

The terms and conditions of the bid must be the same as or not substantially less favourable than those in the public proposal.

53    A criminal complaint was also lodged against Mr Palmer on 22 February 2018. It alleges that Mr Palmer aided, abetted, counselled or procured PLC to commit the said offence.

54    The CDPP is prosecuting these complaints. As we have said, the applicants allege that ASIC and the CDPP wrongfully used the s 19 transcripts to formulate the criminal complaints, and to draft a summary of facts in those prosecutions.

55    As at the time of the hearing before us the prosecutions remained at the pre-committal stage, although we note that a committal hearing is scheduled for later this year.

56    Since the complaints were made in February 2018, the prosecutions have been mentioned in the Queensland Magistrates Court at least 36 times including administrative adjournments. Numerous applications have been made in the proceedings.

57    In addition to these two criminal proceedings, on 6 February 2020 a further proceeding was commenced by a complaint on ASIC’s behalf against Mr Palmer for offences under s 184(2)(a) of the Corporations Act and s 408C(1)(d) of the Criminal Code (Qld). This is an unrelated prosecution that remains at the pre-committal stage. We will put this to one side and simply refer to the other two complaints as the prosecutions or criminal proceedings.

58    Now as we have said, before the primary judge, ASIC and the CDPP each lodged an application seeking a permanent stay of the proceeding below, alternatively summary dismissal of the proceeding, on abuse of process grounds.

59    ASIC and the CDPP contended that the proceeding below was an abuse of process on the basis that it sought to fragment the criminal process and to have determined questions that can and should be determined in the criminal proceedings in relation to which the transcripts were allegedly used by ASIC and the CDPP.

60    It is convenient at this point to briefly address one other topic before addressing the primary judge’s consideration of the issues raised.

61    It is unclear as to how the fruits of Mr Palmer’s s 19 examination will be or could be used in the prosecutions.

62    It would seem that for anything but innocuous topics, Mr Palmer claimed the privilege against self-incrimination in relation to many of his answers during the s 19 examination. Accordingly, such answers could not be tendered as evidence against him in his prosecution (see s 68(3) and s 76(1)(a) of the ASIC Act).

63    But it would seem that derivative use could be and has been made of such answers in any event for the purposes of the prosecutions. The transcripts of the examination have been given by ASIC to the CDPP for the purposes of the prosecutions in terms of formulating the charges and preparing a summary of facts (see generally ss 17, 18, 27 and 127 of the ASIC Act and Johns v Australian Securities Commission (1993) 178 CLR 408 at 424 and 425 per Brennan J).

64    And it would seem arguable at least that further derivative use could be made in the prosecutions of information in the transcripts notwithstanding that they could not be directly tendered in a context where ss 68(3) and 76(1)(a) applied. There appears to be authority to this effect as Mr Paul Holdenson KC for ASIC pointed out and notwithstanding the principle of legality (see R v OC (2015) 90 NSWLR 134 at [97] to [124] per Bathurst CJ).

65    Further, if the transcripts were sought to be tendered in circumstances where there was no s 68(3) and s 76(1) question, then a Bunning v Cross (1978) 141 CLR 54 type question might arise even if the s 19 examination was unlawful and the transcripts so procured unlawfully obtained.

66    For completeness, we should also note that although the applicants have raised a s 49 point as we have identified, it is unclear to us whether in the prosecutions they may also challenge the derivative use of the transcripts containing answers otherwise covered by ss 68(3) and 76(1)(a), even if the s 19 examination was held to be lawful.

67    Anyway, the magistrate or judge dealing with the prosecutions is well able to deal with such questions.

68    It is now convenient to turn to the primary judge’s reasons.

The primary judge’s reasons

69    The primary judge recognised (at [46]) that the grant of a permanent stay to prevent an abuse of process has been said to involve “an ultimate decision that permitting a matter to go to trial and the rendering of a verdict following trial would be irreconcilable with the administration of justice” (GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 414 ALR 635 at [3] per Kiefel CJ, Gageler and Jagot JJ). The ultimate decision is one of “last resort”, only justifiable in an exceptional case.

70    Her Honour said (at [47]) that the plurality’s statements in GLJ needed to be understood in their context given that what was being considered was whether there should be a permanent stay of proceedings to vindicate a right in circumstances where the grant of a permanent stay would forever sterilise, as her Honour described it, the right said to have been infringed.

71    Her Honour said that cases where a stay is sought to avoid fragmentation of the criminal justice process are different. Cases involving fragmentation often involve an attempt to use the civil courts to obtain relief when the point that the accused seeks to agitate falls within the ambit of the criminal justice process and should be heard and determined by the criminal courts, whether immediately or at a subsequent stage of the process, for example, after committal or on appeal after conviction. As such, those cases do not involve any permanent sterilisation of asserted rights.

72    Her Honour pointed out (at [48]) that the varied circumstances in which use of a court’s processes will amount to an abuse do not lend themselves to exhaustive statement. But one class of case in which a stay, or another course not involving determining the case advanced, may be warranted is where proceeding to hear and determine the claim brought in civil jurisdiction would involve the fragmentation of criminal proceedings.

73    Gibbs ACJ in Sankey said at 26:

a court will be reluctant to make declarations in a matter which impinges directly upon the course of proceedings in a criminal matter. Once criminal proceedings have begun they should be allowed to follow their ordinary course unless it appears that for some special reason it is necessary in the interests of justice to make a declaratory order.

74    The principle was stated in Flanagan v Commissioner of the Australian Federal Police (1996) 60 FCR 149 at 187 per Beaumont, Ryan and Lindgren JJ as follows:

The principle is well-established that criminal proceedings should not be fragmented by other courts’ entertaining, except in exceptional or extraordinary circumstances, applications of various kinds by or against one or more of the participants in the criminal trial.

75    Flanagan concerned an application for judicial review of decisions to apply for, and issue, a telephone intercept warrant, the fruits of which, being records of telephone conversations, aided in the bringing of criminal proceedings.

76    Her Honour recognised (at [55]) that the undesirability of civil courts permitting their jurisdiction to be exercised so as to give rise to the fragmentation of criminal proceedings has been confirmed on many occasions. Further, her Honour noted (at [58]) that one of the vices of fragmentation is the potential for an accused to seek to raise the same point in multiple courts.

77    And her Honour referred (at [59]) to other reasons for “the basic rule of restraint” canvassed by Kirby P (in dissent in the result) in Cain v Glass (No 2) (1985) 3 NSWLR 230 at 235 as follows:

At the stage of committal, whether by declaration or otherwise, superior courts do well to limit their intervention to exceptional or special cases. This principle is well-established: [citations omitted] … It is important, therefore, to understand the rationale behind the rule of restraint. The reasons include: (1) the undesirability of discontinuity, disruption or delay in committal proceedings; (2) the superior knowledge of the committing magistrate concerning the whole facts and circumstances of the case under his consideration; (3) the undesirability of the beneficial remedies of declaration or the prerogative writs being misused to justify transfer to the superior courts of matters committed by law to the magistracy; (4) the cost, much of it borne by the public purse, of proliferating litigation, especially at an interlocutory stage, which diverts attention from the real substance of the accusations brought and concentrates instead upon peripheral and often procedural matters; (5) the undue advantage that may be given to rich and powerful defendants to interrupt and delay the operation of the criminal law in a way not so readily available to ordinary citizens; and (6) the power of the Attorney-General to present an ex officio indictment or to refuse to present an indictment, whatever the outcome of the committal proceedings.

(emphasis added by the primary judge)

78    Her Honour pointed out (at [63]) that Gibbs CJ returned to the subject in Clyne v Director of Public Prosecutions (Cth) (1984) 154 CLR 640, observing (at 643) that:

This Court has in a number of cases said that it is wrong that the ordinary course of proceedings in the criminal courts should be interrupted by applications for declarations as to questions that will or may arise in the criminal proceedings.

(citations omitted) (emphasis added by the primary judge)

79    So, as her Honour recognised, fragmentation is not only an issue in respect of questions that are already live in the criminal proceedings, or that are certain to arise. As Gibbs CJ stated, the question of fragmentation extends to questions that “may arise”.

80    Her Honour pointed out that other expressions have also been used to identify the nature of the necessary connection with criminal proceedings. Her Honour went on to discuss a number of authorities including the following.

81    In Hausfeld v Commissioner of Police [2018] NSWSC 1540, Fagan J referred (at [21]) to the “determination of issues which bear upon the conduct of criminal proceedings”. In that case the plaintiff sought a declaration that a search of his premises, and the seizure of items from the premises, was not lawful due to a defect affecting the issue of the warrant. He sought an order quashing or declaring the warrant to be invalid and an order for the delivery up of items that were seized. He also sought an injunction to restrain police from acting on or taking any further step in relation to the material seized. The defendants sought that the summons be dismissed as an abuse of process, the ground being that permitting the summons to be litigated would fragment the criminal proceedings, in which the plaintiff had been indicted on charges that were based on the evidence seized under the impugned warrant. Fagan J considered that the challenge could be mounted in the criminal court and dismissed the summons.

82    Her Honour said (at [64]) that the fact that the issue in question could be raised in the course of the criminal proceedings, and an answer obtained in that forum, often features prominently in reasons explaining why a civil court has declined to address the question posed in the separate civil proceedings.

83    Her Honour said (at [65]) that the capacity of the criminal court to address the asserted issue, even at a later stage of proceedings, for example, after committal for trial, is an important consideration in determining whether exceptional circumstances exist, warranting the exercise of jurisdiction.

84    Now as the primary judge recognised (at [66]), many of the authorities involve what might be described as direct, albeit collateral attacks on rulings in criminal proceedings, or on the continued progress of the prosecution in its entirety, in the sense that in a civil proceeding orders are sought that directly challenge a ruling made in the criminal proceeding or seek to stay the prosecution.

85    Nevertheless, as her Honour recognised (at [67]), not all cases in which civil courts have declined to exercise jurisdiction on grounds of fragmentation involve that kind of direct, but collateral, attack.

86    Her Honour made reference (at [67] to [70]) to Bell v The Queen (2020) 286 A Crim R 501, which was a case where the accused appealed against a ruling of a District Court judge dismissing his application for a permanent stay on the basis of the alleged misuse of powers by the Independent Commissioner Against Corruption. Separately, the Commissioner sought declaratory relief on matters concerning the Commissioner’s powers and in relation to the impugned actions. Kourakis CJ, Peek and Blue JJ upheld the District Court judge’s dismissal of the stay application, but declined to make the declarations sought by the Commissioner. Their Honours observed that “civil courts exercise great caution before hearing and determining civil proceedings that raise common issues that are to be determined in criminal proceedings” (at [407]). Their Honours acknowledged that the declarations sought by the Commissioner “would not directly interfere in the criminal proceeding”, but would address issues that “are very closely aligned (if not identical) to those arising for decision in the criminal proceeding” (at [416]). Further, another reason for caution is that the precise formulation of declarations may have unforeseen consequences in the criminal proceeding. Their Honours deferred addressing the application for declaratory relief until after the final determination of the criminal proceedings. So, the stay was temporary, not permanent.

87    The primary judge (at [71]) also discussed Gamage v Riashi [2023] NSWSC 390. The plaintiff had been charged with 13 offences arising out of an investigation undertaken by the Independent Commission Against Corruption. The hearing of the charges had not yet commenced at the time the plaintiff brought proceedings seeking to obtain a copy of the application for a warrant, as he wished to mount an argument that the telephone recording of him said to be authorised by the warrant was improperly obtained and could not be used in the impending criminal proceedings. Chen J dismissed the application. He said (at [30(1)]):

In my view, the plaintiff's summons should be dismissed. That is because:

(1)    First, the avoidance of fragmenting the criminal process, and the fact that the challenge that the plaintiff seeks to make in connection with the warrant can be pursued in, and decided by, the Local Court are decisive considerations against granting the plaintiff the relief sought.

88    So, that was a case in which the fragmentation principle was applied to dismiss a civil proceeding which did not have an immediate and direct effect on criminal proceedings.

89    Her Honour said (at [74]) that whether or not any particular case is exceptional, so as to warrant hearing and granting relief in an application brought separately and outside the criminal justice process, will depend on the facts of the case.

90    Further, the primary judge made reference (at [75]) to Hutson v Australian Securities and Investments Commission [2023] QCA 167 at [47] per Mullins P and said that Hutson is also instructive in stressing the importance of focusing on, and determining, the threshold question of whether the court should even proceed to consider the merits of an application for declaratory relief. The potential for the matters in issue to be raised before the criminal court, and for any adverse pre-trial rulings to be appealed within the criminal justice system, were identified as powerful factors tending against permitting fragmentation by considering the issue in question when advanced in separate declaratory relief proceedings. Further, in considering where the interests of justice lie, consideration is given to the practical and not just strictly legal consequences of the civil court’s decision on the criminal proceedings.

91    Further, the primary judge noted (at [76] and [77]) authorities to the effect that the applicant’s capacity to agitate a point in any appeal against conviction is important in determining that a case may not be exceptional so as to warrant fragmentation of the trial process, once set in motion. Moreover, there may be potential events during a criminal trial which may mean the questions raised would not need to be answered, and, in any event, could be addressed on appeal from any conviction.

92    Further, her Honour referred (at [77]) to Phong v Attorney-General of the Commonwealth of Australia (2001) 114 FCR 75. In that case, the trial judge in the criminal proceeding was fully seized of the issues that the accused sought to raise in the Federal Court, including, relevantly, a claim for an order permanently restraining the respondents from proceeding upon an indictment. It was held that even if the Court had jurisdiction, it should decline to exercise jurisdiction and grant judicial review, to avoid unnecessary and undesirable fragmentation of the criminal process.

93    Further, her Honour referred (at [77]) to Palmer v Magistrates Court of Queensland [2024] QCA 8 where Dalton JA said (at [5]) that “[t]here was no reason demonstrated why such points of legal argument or defence as the appellants wished to raise could not be determined in the criminal courts in the ordinary way”.

94    Further, her Honour said (at [79]) that where an application raises complaints about matters that may never transpire, that tells against there being exceptional circumstances warranting exercise of jurisdiction in a way that fragments the criminal process.

95    Her Honour said (at [80]) that the principle against fragmentation clearly encompasses issues concerning procedural or evidentiary matters, but it is not confined to procedural or evidentiary matters. So, for example, in Alqudsi v Commonwealth of Australia (2015) 327 ALR 1 French CJ applied (at [21] and [22]) the principle against fragmentation to a situation where there was a constitutional challenge to legislation.

96    Further, as her Honour recognised (at [89]), where an application is made to stay or summarily dismiss a proceeding, it is necessary to consider the implications of making, or declining to make, the orders sought. And her Honour said that in the case before her, those matters arise for consideration in relation to the prosecution and the capacity of the parties to argue, and the criminal courts to determine, the question of the illegality of the s 19 examination of Mr Palmer, and the capacity of the applicants to raise the question of the illegality of the s 19 examination of Mr Palmer in subsequent civil proceedings.

97    Further, her Honour said (at [91] to [93]) that issue estoppel can not only arise where the court’s orders are in the form of declarations, but also where a matter of fact or law has been determined in the course of determining an issue where relief such as declaratory relief is refused. And in determining the impact of issue estoppel, it is necessary to focus on the issues of fact or law that were necessarily resolved as a step in reaching the ultimate determination, including where the determination is constituted by a dismissal.

98    But as her Honour said (at [94]), when regard is to be had to the future conduct of criminal proceedings, account must be taken of the fact that the criminal law does not recognise issue estoppel, as that doctrine has developed in civil cases; see Rogers v The Queen (1994) 181 CLR 251 at 275 to 280 per Deane and Gaudron JJ.

99    Now after addressing the relevant authorities and identifying the parties’ arguments before her, her Honour went on to apply the principles that she had identified.

100    Her Honour first considered (at [146] to [152]) an argument put by the CDPP that the proceeding before her should be permanently stayed on the basis that there was a multiplicity in proceedings or a “re-litigation” that constituted an abuse of process. But her Honour did not accept that ground (at [153]). This ground has not been re-agitated before us, there having been no proposed notice of contention sought to be relied on. We need say nothing further about that aspect.

101    Her Honour then turned to consider whether there was an abuse of process based upon the fragmentation ground (at [154] et seq). And in this respect her Honour first addressed a threshold question being whether or not the proceeding before her involved any fragmentation at all (at [156]).

102    As her Honour noted (at [157]), the applicants contended that the civil proceeding they had initiated did not involve fragmentation at all. ASIC and the CDPP said it did. The difference between the parties arose from the narrower view of fragmentation taken by the applicants. The applicants contended that, in order to give rise to concerns associated with fragmentation, the civil proceeding must have a direct impact on the criminal proceedings. The applicants contended that the relief they sought in the proceeding did not have a direct effect, or, as they would have it, any effect at all, on the criminal proceedings and therefore could not be said to involve fragmentation.

103    The primary judge did not accept the applicants’ contention for the following reasons.

104    Her Honour said (at [160]) that the nomenclature of “fragmentation”, or the other terms used, such as “disruption” or “dislocation”, must not be allowed to obscure the underlying policy concerns that the High Court, and intermediate courts of appeal, have identified as standing behind the restraint shown by civil courts when it comes to proceedings that intersect with criminal proceedings.

105    Those concerns include the undesirability of disruption or delay to criminal processes, the superior knowledge of the judge or magistrate seized of the criminal proceedings in respect of the facts and circumstances underlying the criminal case, the public cost of proliferating litigation and, according to the primary judge, the undue advantage that may be afforded to rich and powerful defendants to delay and interrupt the operation of the criminal law.

106    Her Honour said (at [161]) that all of the applicants’ previous challenges to the prosecution have involved frontal assaults on the applicants’ prosecution. Not only was the Magistrates Court of Queensland a party to all of the previous challenges other than the first challenge, but orders were sought to stop the criminal proceedings in their tracks, in particular, orders staying the prosecution and/or restraining the Magistrates Court, the CDPP and ASIC from proceeding with the prosecution.

107    As such, the applications brought by the CDPP and ASIC seeking to dispose of those proceedings clearly called for consideration of the authorities on fragmentation.

108    Her Honour said (at [162]) that the current proceeding stands apart from the blueprint of the applicants’ former frontal assaults on the criminal proceedings. The Magistrates Court of Queensland is not a party to this proceeding. The relief sought in the present proceeding does not include orders staying the prosecution.

109    Her Honour recognised (at [163]) that most of the cases where the principles concerning fragmentation are discussed involve what the primary judge referred to as direct, collateral attacks. Such attacks have commonly taken the form of a civil application seeking orders staying a prosecution, enjoining the criminal court or the prosecution from taking certain steps, and seeking judicial review of decisions made by the judicial officer conducting the committal or trial. The orders sought in such cases would, if made, have a direct and immediate effect on the criminal proceedings.

110    But her Honour said (at [164]) that civil proceedings can intersect with criminal proceedings in a variety of ways. Not all involve the direct impact on criminal proceedings that the applicants contended must be present in order for a civil case to give rise to concerns about fragmentation.

111    Her Honour said (at [166]) that the question, then, is what is the nature of the intersection, if any, between the present civil proceeding and the prosecution?

112    Her Honour said (at [167] and [168]) that the applicants focused on the relief sought in in the present proceeding, but the relief sought cannot be considered in a vacuum. Rather, it must be considered in light of the pleading of the matters said to warrant that relief. The relief sought must also be considered from a practical standpoint, addressing the realities of how this matter proceeding to trial and judgment may affect the prosecution.

113    When the statement of claim is read from start to finish, and the relief sought is evaluated in that context, it is clear that the applicants seek relief that has a close nexus with the prosecution.

114    They seek declarations regarding the unlawfulness of the s 19 examination and the transcripts being unlawfully obtained. The relief sought also includes a declaration that the transcripts may not be used for “any purpose” including formulating the charge, which is the very subject of the prosecution, or the summary of facts in those criminal proceedings.

115    Her Honour said (at [169]) that even if a declaration in those terms would also operate in relation to any future and different criminal charges, it is clear from the statement of claim that the charge and the summary of facts referred to in the relief sought are those presently pleaded in the statement of claim. Those paragraphs of the statement of claim set out the use of the transcripts culminating in the laying of the charges that constitute the prosecution, and the summary of facts in that prosecution.

116    Her Honour said that there is an air of unreality in the applicants’ submissions that the present claim has no sufficient point of intersection with the prosecution so as to bring the fragmentation principle into focus. The present proceeding seeks to impugn, as “unlawful”, steps that constitute foundations of the prosecution.

117    The primary judge did not accept that the principles concerning fragmentation have no application simply because the relief that touches on the criminal proceedings has been framed so that the nexus with the criminal proceedings is indirect and has been pursued in a court of federal jurisdiction.

118    Her Honour said (at [170]) that the relief sought also includes mandatory and prohibitive injunctions seeking to restrain any future use of the transcripts and to require ASIC and the CDPP to deliver up the transcripts and detail, on oath, to whom they have been provided. Her Honour said that again, there is an air of unreality in the suggestion that orders of this kind would have no impact on the prosecution, in circumstances where it is a key part of the applicants’ case in this proceeding that the transcripts of the s 19 examination were unlawfully used by ASIC and the CDPP to formulate the two complaints that initiated the prosecution, and were unlawfully used to draft the summary of facts deployed in the prosecution.

119    Her Honour said (at [171]) that the nexus between the civil and criminal proceedings must be assessed in a practical manner. The suggestion that the present proceeding could be run to trial and judgment with no impact on the prosecution has an air of unreality about it. Even if one adopts a more technical approach and considers the impact of this proceeding being run to trial and judgment by reference to the applicable legal doctrines, it is clear that running the present proceeding to trial and judgment would not, as the applicants contended, have no impact on the criminal proceedings.

120    Her Honour noted (at [172]) that the parties agreed that, if this proceeding were run to trial and judgment, and if one was to conclude that the s 19 examination was unlawful, neither the CDPP nor ASIC to the extent it has a role in the prosecution would contend in the prosecution that the s 19 examination was lawful.

121    She noted that whilst ASIC and the CDPP accepted they would be precluded from mounting such an argument on abuse of process grounds, the applicants considered they would be so constrained as a matter of convention.

122    Conversely, and as the primary judge noted (at [173]), if this matter were run to trial and judgment, and if one was to conclude that the s 19 examination was lawful, ASIC and the CDPP accepted there would not be an absolute bar on the applicants contending in the prosecution that the s 19 examination was unlawful. ASIC said that there is a possibility, which ASIC described as theoretical, that the applicants could be permitted to mount such an argument in the prosecution, but that that possibility would only arise if there were some prospect that questions of evidence or the higher standard of proof in criminal proceedings might justify that inconsistency in result. The applicants contended that there would be no constraint at all.

123    As her Honour said (at [174]), it was not necessary for her to reach a concluded view on the extent to which an adverse decision in the present proceeding on the issue of the legality of the s 19 examination would constrain the applicants in the future conduct of the prosecution. Nevertheless, she said that the fact that the parties have disagreed, as they have, on this point reinforces the intersection between the present civil and criminal proceedings. In her view, the fact, and nature, of the disagreement between the parties illustrates that having this proceeding run to trial gives rise to the clear potential for additional issues to arise in the criminal proceedings concerning the impact of an adverse ruling in this Court.

124    Her Honour said (at [175]) that the authorities on fragmentation make it clear that where a point can be raised in extant criminal proceedings, absent exceptional circumstances that warrant determining the point in the separate civil proceedings, it should be raised in the criminal court, and not by way of a separate civil proceeding.

125    Her Honour said (at [176]) that it was common ground that a challenge may be made in the prosecution at the committal or trial stage to the admissibility of evidence, premised on the s 19 examination being unlawful.

126    It was also accepted that the question of the lawfulness of the s 19 examination may arise if an application were made in the District Court of Queensland (post-committal) to have the prosecution stayed on the basis that the s 19 examination was unlawful, although the applicants contended such an application would be unlikely to arise in that way, or to exclude evidence.

127    As such, her Honour said that this is a case where the central point regarding the legality of the s 19 examination could be raised within the criminal jurisdiction.

128    Her Honour said (at [177]) that it follows that the central question raised by the applicants in the present proceedings, namely, whether the s 19 examination of Mr Palmer was lawful, is a question that will or may arise in the criminal proceedings.

129    Whilst it is not necessary, in order for fragmentation concerns to arise, that the questions will definitely or inevitably arise in the criminal proceedings, the primary judge noted that the applicants did not suggest that the question of the illegality of the s 19 examination would not arise in the criminal proceedings.

130    For completeness, her Honour noted (at [178]) that she did not accept the suggestion of the applicants that the principal question raised for determination in this proceeding would be fundamentally different from the question as it may arise in the criminal proceedings because the issue there would concern the admissibility of evidence. In either case, the same point would arise: was the s 19 examination unlawful?

131    Her Honour said (at [179]) that given that the issue regarding the legality of the s 19 examination can be determined in the criminal courts, the authorities emphasise that, absent exceptional circumstances, the accused should pursue the relevant issue through the criminal courts, rather than civil courts weighing in with declaratory or other relief.

132    Applied to the present case, her Honour said (at [180]) that this means that because the applicants can pursue the question of the legality of the s 19 examination in the criminal proceedings, they should do so unless there are compelling reasons that would justify the question being determined in the civil jurisdiction.

133    Her Honour went on to discuss whether there were such compelling reasons but concluded that there were not (at [181] et seq).

134    Her Honour pointed out (at [183]) that the applicants stressed that Mr Palmer is entitled to have his view, being that the s 19 examination was unlawful, vindicated and for the applicants to have the benefit of relief which ensures that the transcripts of that examination cannot be used adversely to their interests in the future.

135    Her Honour said that whilst the applicants identified other causes of action that might theoretically be mounted, one of which is statute barred, there is no suggestion that anyone is actually pursuing or preparing to pursue any other adverse action in which the transcripts may be used. The impugned s 19 examination took place in July 2016.

136    The only material identified by the applicants as suggesting there was any inkling that potential causes of action were to be pursued against them mostly pre-dated ASIC in fact taking action, and otherwise involved claims and proceedings which have concluded.

137    We would note here that the applicants before us did not take issue with these last observations.

138    The primary judge accepted (at [184]) that the relief sought by the applicants goes beyond the relief that might be afforded by the criminal courts in the context of the prosecution, either in the committal or trial phase. Depending on how the issue were to arise in the criminal courts, the relief may be constituted by an interlocutory decision on the admissibility of evidence. The applicants would not then have the benefit of a general and final declaration that the s 19 examination was unlawful, assuming success on that point. Her Honour said that this suggests that the present proceeding does have some potential utility to the applicants, whilst recognising that the interests of justice are not confined to the interests of the litigants themselves.

139    It seemed to the primary judge (at [185]) that the proceeding did have potential utility to the applicants even though, if the proceeding went to trial, there would be a serious question as to whether the Court would grant declaratory relief in the general terms sought given that there is no present indication that there is a real prospect of the transcripts being put to any use that is adverse to the interests of the applicants. Her Honour said that it must be apparent that the declaration will be productive of foreseeable consequences for the parties, whereas relief will not be granted if the question is hypothetical, in the sense that it is claimed in relation to circumstances that have not occurred, and may never happen.

140    Her Honour then went on to consider (at [186]) the question of whether the applicants’ interests would be adversely affected by a permanent stay, or summary dismissal, of the proceeding. Her Honour recited that the parties agreed that, were the present proceedings to be permanently stayed or summarily dismissed by reason of concerns regarding fragmentation, the applicants would be able to run the illegality point in the criminal proceedings. The parties were, however, at odds regarding whether a permanent stay or summary dismissal would prejudice the applicants’ ability to raise the illegality issue in subsequent civil proceedings. Before her Honour, the applicants contended that there would be a res judicata that would preclude future civil proceedings on this issue. The applicants said that the prospect of further civil proceedings arises given the constraints on the nature of the relief that the criminal courts may order and the potential for the s 19 transcripts to be used in the future, in ways adverse to the applicants.

141    In the primary judge’s view (at [187]), the wider ambit of the present proceeding and the possibility that future civil proceedings may be met with a res judicata argument suggested that the interests of justice were best served by a temporary, rather than a permanent, stay or dismissal of the proceeding.

142    On 8 October 2024 her Honour made orders in the following terms:

1.    The proceeding be stayed pending the hearing and final determination, including any appeals, of the criminal prosecutions brought against the Applicants by complaints dated 22 February 2018 (CDPP File Nos. QC16100658 and QC16100658A), or until further order.

2.    The parties inform the Court as soon as possible of the determination of the proceedings referred to in paragraph 1.

3.    The proceeding be listed for a case management hearing within 14 days of the determination of the proceedings referred to in paragraph 1.

4.    There be liberty to apply on three days’ notice.

143    We will return to her Honour’s consideration (at [187] to [194]) of this temporary stay question later.

144    It is appropriate to now address the specific appeal grounds which we have slightly re-ordered.

Did her Honour misapprehend the core concept of “fragmentation”? (ground 1)

145    The applicants say that her Honour misapprehended the core concept of “fragmentation”, which is that fragmentation involves civil proceedings challenging discrete evidentiary and/or procedural rulings by a criminal court, which challenge fragments the criminal proceedings.

146    They say that this central error was disclosed in her Honour’s reasoning (at [164]) that:

What the cases expose, however, is that civil proceedings can intersect with criminal proceedings in a variety of ways. Not all involve the direct impact on criminal proceedings that the Palmer parties contended must be present in order for a civil case to give rise to concerns about fragmentation.

147    It was said that her Honour in engaging in such reasoning relied on Bell, Gamage and Hausfeld, but did not consider relevant statements from Sankey, Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120 and R v Rolfe (2021) 273 CLR 413.

148    The applicants say that Bell, Gamage and Hausfeld do not detract from the definition of fragmentation that the applicants advance.

149    In relation to Bell, the applicants said that although the Court stated (at [416]) that “the Commissioner does not seek to interfere in the criminal proceeding and granting the declarations sought…would not directly interfere in the criminal proceeding”, when viewed in context, the Commissioner sought in a civil proceeding to challenge a discrete procedural ruling by the criminal trial court, which was considered to be “fragmentation” in Sankey.

150    Further, the applicants say that Gamage and Hausfeld both concerned challenges brought in civil proceedings to warrants for the purpose of objecting to the use of evidence proposed to be used in pending criminal proceedings.

151    But the applicants say that unlike those cases, here the applicants seek separate and distinct relief by their civil proceeding that, as a separate proceeding, could not be said to give rise to any fragmentation of the criminal proceedings as that concept is properly understood.

152    Further, the applicants say that their definition of fragmentation is consistent with the endorsement by Gibbs ACJ in Sankey of the reasoning of Jacobs P in Shapowloff v Dunn [1973] 2 NSWLR 468 at 470 that the relevant reluctance is in respect of “…declarations in a matter which impinges directly upon the course of proceedings in a criminal matter.”

153    Further, the applicants say that their reading of Gibbs ACJ’s reasoning is consistent with the other members of the Court.

154    Stephen J expressed his conclusion that declaratory relief should be granted by reference to the fact that it was “no mere question of the admissibility of evidence in any ordinary sense” that was in issue, and Aickin J generally agreed with Stephen J. Further, it was said that this passage of Stephen J was adopted by all members of the Court in Gedeon.

155    Further, the applicants say that any broader statement of principle adopted in Clyne, Frugtniet v State of Victoria (1997) 148 ALR 320 and Pan Laboratories Pty Ltd v Commonwealth of Australia (1999) 73 ALJR 464, all involve cases that predate Gedeon, Alqudsi and Obeid v The Queen (2016) 329 ALR 372.

156    Further, it was said that Clyne and Pan Laboratories each concerned attempts to injunct the progress of a criminal proceeding. Frugtniet concerned a collateral application for a stay of a criminal proceeding. Obeid was an application for a stay pending a special leave application concerning an interlocutory ruling in a criminal proceeding. And Alqudsi concerned the removal of a portion of a criminal proceeding into the High Court.

157    The applicants do not deny that such scenarios fall within the ambit of the fragmentation principle stated in Sankey. But they say that these cases are what the primary judge referred to (at [66]) as “direct, collateral attacks … on the continued progress of the prosecution in its entirety”.

158    Further, the applicants say that Bell is explicable by reference to the applicants’ understanding of Sankey.

159    Further, the applicants say that Flanagan did not consider the ambit of the rule against fragmentation stated in Sankey, but rather whether the exception to that rule applied.

Analysis

160    In our view, the applicants’ statement of the relevant principle is too narrow and their analysis of the relevant authorities is problematic and distorted by their incorrect focus. The primary judge rejected a narrow expression of the principle, and in our view her Honour was right to do so.

161    There are a number of points to be made concerning Gibbs ACJ’s observations in Sankey. But before proceeding further, it is necessary to set out a more extensive extract of his reasons (at 25 and 26) where he said the following:

In any case in which a declaration can be and is sought on a question of evidence or procedure, the circumstances must be most exceptional to warrant the grant of relief. The power to make declaratory orders has proved to be a valuable addition to the armoury of the law. The procedure involved is simple and free from technicalities; properly used in an appropriate case the use of the power enables the salient issue to be determined with the least possible delay and expense. But the procedure is open to abuse, particularly in criminal cases, and if wrongly used can cause the very evils it is designed to avoid. Applications for declarations as to the admissibility of evidence may in some cases be made by an accused person for purposes of delay, or by a prosecutor to impose an additional burden on the accused, but even when such an application is made without any improper motive it is likely to be dilatory in effect, to fragment the proceedings and to detract from the efficiency of the criminal process. I am not intending to criticize those concerned with the conduct of Bourke v. Hamilton (23), or to show any disrespect for the careful judgments delivered in that matter — indeed I have derived much assistance from them — when I say that that case provides an example of the way in which criminal proceedings may be needlessly protracted if they are interrupted by an application for a declaration — in the end the declaration sought was refused but the proceedings had been delayed for the space of almost a year. The present case itself is another regrettable example of the delay that can be caused by departures from the normal course of procedure. For these reasons I would respectfully endorse the observations of Jacobs P. (as he then was) in Shapowloff v. Dunn (24), that a court will be reluctant to make declarations in a matter which impinges directly upon the course of proceedings in a criminal matter. Once criminal proceedings have begun they should be allowed to follow their ordinary course unless it appears that for some special reason it is necessary in the interests of justice to make a declaratory order. Although these remarks may be no more than mere “administrative cautions” (cf. Ibeneweka v. Egbuna (25) I nevertheless consider that if a judge failed to give proper weight to these matters it could not be said that he had properly exercised his discretion.

162    First, it would seem that Gibbs ACJ was the first to use the verbial form of “fragmentation” in his phrase “to fragment the proceedings”.

163    Second, he was not purporting to be exhaustive of the circumstances as to when impermissible fragmentation could be involved.

164    Third, phraseology such as “caused by departures from the normal course of procedure”, that is, the way things are happening in the criminal process, indicate a degree of flexibility.

165    Fourth, his response to what Jacobs P said in Shapowloff and Gibbs ACJ’s encapsulation that “a court will be reluctant to make declarations in a matter which impinges directly upon the course of proceedings in a criminal matter”, is not a statement that direct impingement is a necessary condition in all cases. Indeed, Gibbs ACJ’s next statement that “[o]nce criminal proceedings have begun they should be allowed to follow their ordinary course unless it appears that for some special reason it is necessary in the interests of justice to make a declaration order” indicates that he was not taking a narrow or tight view.

166    Moreover, Jacobs P in Shapowloff at 470 was also not purporting to be exhaustive. And his statement concerning direct impingement also follows the more flexible statement that:

Not only should I express the reluctance of the Court of Appeal to deal with this matter rather than to remit it in the ordinary way, but I should also express the reluctance of the court to take a step by way of any form of relief, including declaration, when there are current proceedings before a magistrates, in which the point may be raised, and in which the point of law may be litigated on appeal, either to the District Court in its Criminal Jurisdiction or to the Supreme Court, by way of an order in the nature of a prohibition.

167    Further, in Sankey at 80, Stephens J (Aickin J agreeing) more flexibly expressed himself:

It being a matter of discretion, this Court should, in the particular circumstances of this case, grant such declaratory relief as the parties are entitled to. In many like cases an exercise of discretion in the contrary sense may be called for so as to avoid interference with the due and orderly administration of the law and with the proper exercise by magistrates of their functions in committal proceedings. The past history of this case, to which sufficient reference has already been made, is such that these considerations, often proper to be taken into account and which may even prove decisive, are here of little if any weight.

168    Mason J at 82 also expressed himself flexibly.

169    We agree with the respondents that Gibbs ACJ was not seeking to mark the boundaries of the fragmentation principle. His Honour was simply explaining the principle as it applied to the facts before the Court.

170    Importantly, his Honour went on to explain (at 26) the perils of criminal proceedings being “interrupted by an application for a declaration” and that a court “will be reluctant to make declarations in a matter which impinges directly upon the course of proceedings in a criminal matter”.

171    Further, in Sankey, no other judge limited the fragmentation principle by reference to questions of evidence or procedure.

172    Indeed, it is clear that Gibbs ACJ was expressing no narrow view. In Clyne at 643, Gibbs CJ said:

This Court has in a number of cases said that it is wrong that the ordinary course of proceedings in the criminal courts should be interrupted by applications for declarations as to questions that will or may arise in the criminal proceedings.

173    So, he expressed himself flexibly and on the basis inter-alia of Sankey. He referred to “questions that will or may arise” rather than “would arise”. And he did not use the language of direct impingement.

174    Further, Gedeon has taken no narrow view of Sankey. At [23] it was said:

With respect to the exercise of the power to make the declaratory orders now sought by the applicants, authority in this Court affirms an important general principle. This is that power to make declaratory orders should be exercised sparingly where the declaration would touch the conduct of criminal proceedings. The fragmentation of the criminal process is to be actively discouraged. In any event, a declaration may be of limited utility where founded, as would be the case here, on facts admitted only for the purposes of the satellite litigation.

175    The phraseology used was very general. There was no necessary requirement for direct impingement. The expression used was “touch the conduct of criminal proceedings”.

176    In Gedeon, and as the respondents rightly point out, the High Court affirmed the general principle that the power to make declaratory orders should be exercised sparingly where the declaration would touch the conduct of criminal proceedings. Relevantly, the Court went on to quote the passage from Sankey in which Gibbs ACJ endorsed the observations of Jacobs P in Shapowloff, referred to above. The Court did not refer to Gibbs ACJ’s narrower statement with respect to questions of evidence and procedure.

177    Further, in Rolfe a broad formulation was used. At [32] it was said:

This Court has emphasised on many occasions how rare it is to make orders which would have the effect of fragmenting the ordinary course of criminal proceedings. The reasons why it is highly undesirable to do so are obvious. They include delay and its effects.

178    Further, the word or concept “fragmentation” is itself an umbrella term or characterisation rather than a formal test as such.

179    Further, as the respondents point out, cases such as Frugtniet, Pan Laboratories and Alqudsi were not confined to a challenge to a discrete evidentiary or procedural ruling by the relevant criminal court.

180    Further, the observations of Gageler J (as he then was) in Obeid point against any narrow focus. His Honour said (at [15]):

There is a longstanding and general reluctance on the part of this Court in point of policy to make orders which would have the effect of fragmenting a criminal process which has already been set in train. The generality of that reluctance is sufficiently illustrated by the decision and reasoning of the Full Court in the course of refusing special leave to appeal from interlocutory decisions in criminal proceedings in Yates v Wilson and in R v Elliott, and by the much more recent decision of French CJ in Alqudsi v Commonwealth (Matter No S119/2015), which concerned applications for both removal to, and remitter from, this Court in circumstances where an accused in pending criminal proceedings sought to challenge the validity of legislation creating the offence with which the accused was charged.

181    There are several observations to make. The first sentence is not consistent with the applicants’ narrow focus. The start of the second sentence viz “[t]he generality of that reluctance…” is also not consistent with the applicants’ narrow focus. Moreover, the cases cited are given only as illustrations and in any event go beyond just challenges to procedural or evidentiary rulings of a criminal court. Each aspect of Gageler J’s observations is against the applicants’ narrow focus. Moreover, Obeid both post-dates and can be taken to be quite consistent with Sankey, Clyne and Gedeon and how they should be understood and applied.

182    None of these High Court authorities including the single justice decisions, which have significant persuasive value to say the least, have endorsed the narrow definition of the fragmentation principle for which the applicants contend. Now true it is that some cases do address the narrower focus; see for example the scenario dealt with by Dawson J in Re Rozenes (1994) 120 ALR 193 at 195. But to point out that some cases on their facts deal with the narrower focus does not entail that the boundaries and content of the principle itself is so limited.

183    Further, intermediate appellate courts have not taken Sankey to impose a narrow test. Numerous intermediate appellate courts have also considered and applied the principle in ways which make it clear that it is not confined in this way.

184    So, for example, in Chief Executive Officer of Customs v Jiang (2001) 111 FCR 395, O’Loughlin, North and Weinberg JJ said “[t]he High Court has repeatedly stressed the need for civil courts to avoid becoming involved in aspects of the criminal justice system including, in particular, the committal process” (at [7]). They also noted “the importance of avoiding discontinuity, disruption and delay in the well-established procedures of the criminal law” (at [8]). None of this is supportive of any narrow view of Sankey.

185    Further, they went on to say at [12]:

The civil courts also appreciate the need to ensure that the work of the criminal courts is not frustrated by such applications, particularly those which are quite unmeritorious and designed to achieve little more than delay. Most complaints regarding decisions taken in the context of the criminal justice process can adequately be addressed by the criminal courts. Civil courts generally deny judicial review of such decisions on discretionary grounds.

186    None of this is consistent with the applicants’ narrow focus on the formulation used by Gibbs ACJ in Sankey. And the views of an eminent criminal law jurist such as Weinberg J are highly persuasive in treating fragmentation as more of an umbrella concept in covering different possibilities of impingement on the criminal process or criminal proceedings.

187    It is not necessary that direct impingement be shown. And it is not necessary that the fragmentation be shown to challenge evidentiary or procedural rulings in the criminal proceeding.

188    In Flanagan, which was favourably discussed by McHugh J in Ousley v The Queen (1997) 192 CLR 69 at 101, 104 and 105, the applicants, who were due to stand trial, commenced proceedings in the Federal Court in which they challenged the lawfulness of telecommunication interception warrants, including on the basis of that the application for the warrants was made for an improper purpose. The applicants sought declaratory and injunctive relief, and damages for alleged misfeasance in public office relating to the AFP members who applied for the warrants.

189    Beaumont, Ryan and Lindgren JJ observed that where a claim for discretionary relief involved “pure questions of law, emerging from a context of undisputed facts” and was “brought forward at an appropriate time”, it may fall within the exception to the fragmentation principle (at 188). Conversely, a claim “based substantially on contentious matters of fact, including questions of mixed fact and law” does not (at 188). Applying those principles, the Court proceeded to determine discrete questions of law, based on uncontentious facts but declined to decide whether the application for the warrant was vitiated by an improper purpose or a failure to disclose material matters (at 188, 202 and 213). That was because those claims raised “questions entirely within the jurisdiction of the [criminal court]” and that “[w]e do not, and should not, express a view on those questions” (204; see also 217 and 218).

190    Further, because the claim for damages for the tort of misfeasance in public office, which was brought as of right, was “inextricably bound up with the issues of improper purpose and non-disclosure”, the Court concluded that the resolution of those claims should not be embarked upon until after the completion of the criminal proceeding (at 219 and 220).

191    In Bell, it was explained (at [407]) that “civil courts exercise great caution before hearing and determining civil proceedings that raise common issues that are to be determined in criminal proceedings”. And their Honours said (at [416]) that whilst granting the declarations sought by the Commissioner would not directly interfere in the criminal proceedings, they “would address issues that are very closely aligned (if not identical) to those arising for decision in the criminal proceedings”. And in those circumstances, it was in the interests of justice for the Court to defer making any declarations until after the final determination of the criminal proceedings (at [419]).

192    In our view the primary judge correctly observed (at [164]) that the authorities demonstrate that civil proceedings can intersect with criminal proceedings in a variety of ways, including where they raise common issues.

193    Now the applicants say that the relief sought in the proceeding below was separate and distinct from matters raised in the criminal proceedings and, therefore, no issue of fragmentation of the criminal proceedings arises. But we agree with the respondents that the relief sought by the applicants cannot be considered in a vacuum, but must be viewed in light of the pleading of the matters said to warrant that relief. As the respondents correctly contend, one should look to the substance rather than the form of the relief in determining whether a civil proceeding may engage the principle against fragmentation.

194    It is clear from the extracts of the statement of claim that we have set out earlier that the current proceedings emerge from the investigation and prosecution of the applicants. As we have set out, Part F focuses entirely on allegations regarding the use and disclosure of the transcript of the s 19 examination for the purpose of commencing the prosecutions, including formulating the charges and preparing a summary of facts. And those pleaded facts are the foundation for the relief sought, which has a close nexus with the criminal proceedings, which relief includes a declaration that the s 19 examination was unlawful, a matter which, it was common ground, may be raised by the applicants in objecting to the admissibility of evidence in the criminal proceedings.

195    As we have set out, and as the respondents correctly point out, the relief sought by the applicants includes orders that would obviously affect the conduct of the criminal proceedings, including the charges formulated, the summary of facts and other matters involving the further use of the transcripts. Indeed, the applicants have gone so far as to seek an order restraining investigators and prosecutors from having any further involvement in the criminal proceedings. Paragraph B of the prayer for relief provides:

An order restraining ASIC and the CDPP from using, directly or indirectly, the transcripts of the compulsory examination of Mr Palmer purportedly under s 19 of the ASIC Act, including by restraining any person, whether within ASIC the CDPP or elsewhere, from having any further involvement in relation to any matter concerning the subject matter of the s19 notice.

196    In those circumstances, and as the primary judge rightly observed, there is “an air of unreality in the Palmer parties’ submissions that the present claim has no sufficient point of intersection with [the prosecutions] so as to bring the fragmentation principle into focus” ([169]) or that “orders of this kind would have no impact on [the prosecutions]” ([170]). Indeed, as we have just indicated, some of the relief sought might have the tendency to derail the prosecutions at least temporarily.

197    The primary judge was right to conclude that the principle against fragmentation was therefore engaged. Her Honour’s conclusion is well justified. To use the terminology of some of the cases that we have referred to, the question of the lawfulness of the s 19 examination “will or may arise” (Clyne at 643 per Gibbs CJ) in the criminal proceedings. And the criminal court could determine that question (Flanagan at 204). Further, the relief, if granted, would “touch” the conduct of the criminal proceedings (Gedeon at [23]).

198    Moreover, the lawfulness of the s 19 examination was not a discrete question of law based on uncontentious facts. Rather, as the primary judge correctly observed (at [196]), “the proceeding involves a long and complex factual narrative” going back many years and that it “would be unsafe to assume that there would not be substantial contested factual issues requiring resolution in the course of the trial”.

199    Ground 1 is not made out.

Do the primary proceeding and the criminal proceedings involve the same “central issue”? (ground 2)

200    The applicants say that the primary judge (at [176] to [178]) mischaracterised the primary proceeding and the criminal proceedings as involving the same “central issue” of the lawfulness of the s 19 examination.

201    The applicants say that that is an error in the characterisation of the nature of the respective points that arise in the primary proceeding and (potentially) the criminal proceedings. It is said that the overwhelming likelihood is that any point about s 19 would arise in that proceeding only by way of an evidentiary objection.

202    The applicants say that illegality would not be the central issue, but only an issue limited to whether particular evidence could be admitted in order to prove a fact in dispute at the criminal trial. And even then, it would only be a potential basis on which that evidence might be excluded.

203    The applicants say that the primary judge was right to speak (at [176]) of a potential evidentiary objection as being premised on the unlawfulness of the s 19 examination, because that is just one integer of such an objection. The magistrate or trial judge would exercise a Bunning v Cross type discretionary power weighing the competing interests of obtaining evidence for the enforcement of the criminal law on the one hand, and avoiding unfairness to a criminal defendant on the other. So, by definition, in the exercise of the Bunning v Cross discretion, illegality could never be “the central issue”.

204    The applicants say that this was a misconception permeating her Honour’s reasons.

205    The applicants say that the relief sought in the proceeding below is not articulated in terms of any question that could arise before the magistrate or trial judge in the criminal proceedings.

206    It is said that the applicants do not seek declarations that evidence drawn from the s 19 examination is inadmissible, nor that the prosecutions be stayed, because of the unlawfulness of the examination. The applicants say that that species of clear, collateral attack is the typical case of fragmentation found in the authorities.

207    The applicants say that the relief sought in the proceeding below is not directed towards the conduct by the magistrate or trial judge of the criminal proceeding. Nor is it of a kind that could be granted in the criminal proceedings.

208    Similarly, the applicants say that neither the respondents nor the primary judge sought to grapple with what the nature of any determination in the criminal proceedings would be and the circumstances in which it would have any finality between the parties.

209    Further, the applicants say that even if the facts alleged in the statement of claim have a close nexus with the criminal proceedings, this does not meet the description by Gibbs ACJ of an impermissible direct impingement by one proceeding on the other (Sankey at 26). And the applicants say that the cases of indirect impact do not establish any precedent for mere factual overlap between proceedings justifying the application of the fragmentation rule.

210    Further, the applicants say that even if the relief sought by the applicants includes orders that would affect the conduct of the criminal proceedings, including a declaration that charges cannot be formulated, and the summary of facts cannot be prepared, relied upon or adduced into evidence, by reference to the s 19 transcript, such relief is only a specific manifestation of generally framed relief in the proceeding below in the form of a declaration that is directed towards and would have the effect that an unlawfully obtained transcript could not be used for any purpose.

Analysis

211    Clearly, the primary judge held, in our view correctly, that the lawfulness of the s 19 examination was a central issue in the civil proceeding before her. As she said (at [177]):

It follows that the central question raised by the Palmer parties in the present proceedings — whether the s 19 examination of Mr Palmer was lawful — is a question that “will or may arise” in the criminal proceedings: Clyne at 643 (Gibbs CJ). While it is not necessary, in order for fragmentation concerns to arise, that the questions will definitely or inevitably arise in the criminal proceedings, I note that the Palmer parties did not suggest that the question of the illegality of the s 19 examination would not arise in the criminal proceedings.

212    Now she went on to say (at [178] and [179]):

For completeness, I note that I do not accept the suggestion of the Palmer parties that the principal question raised for determination in this proceeding would be fundamentally different from the question as it may arise in the criminal proceedings because the issue there would concern the admissibility of evidence. In either case, the same central point would arise: was the s 19 examination unlawful?

Given that the central issue regarding the legality of the s 19 examination can be determined in the criminal courts, the authorities referred to above — including Cain at 245 (Priestley JA); Jiang at [12] (O'Loughlin, North and Weinberg JJ) and Hausfeld at [24] (Fagan J) — emphasise that, absent exceptional circumstances, the accused should pursue the relevant issue through the criminal courts, rather than civil courts weighing in with declaratory or other relief.

213    But she was not there saying that a central issue in the criminal proceedings was the lawfulness of the s 19 examination. What she was saying was that the same point would arise in the criminal proceeding, being the “central point” or the “central issue” of the civil proceeding. The adjective “central” was only characterising the issue in the civil proceeding, albeit perhaps that there was some infelicity of expression, rather than characterising the issue in the criminal proceedings.

214    Now clearly, and as the respondents correctly contend, there is no question that the lawfulness of the s 19 examination is the central issue in the proceeding below. And as they point out, that issue may also arise as the premise for an objection to the admissibility of evidence in, or an application for a stay of, the prosecutions.

215    Further, we agree with the respondents that it is of no moment that the issue of lawfulness of the s 19 examination would arise in a different context as between the criminal and civil proceedings. The primary judge was correct in finding that the question in the different proceedings was the same: was the s 19 examination unlawful? That was so regardless of whether it was asked as part of an objection to the admissibility of evidence or some other derivative use in the criminal proceedings or an application for declaratory relief in the civil proceeding.

216    Further, it is incorrect to assert that the relief sought in the proceeding below is not articulated in terms of any question that could arise in the criminal proceedings. But in any event that perspective is too narrow. It is important to look at the substantive effect of the relief sought in the civil proceeding rather than its mere form in considering the fragmentation question.

217    As Latham CJ said in Crouch v Commonwealth of Australia (1948) 77 CLR 339 at 348:

As a general rule the Court would not make a declaration so as, in effect (though not in form), to intercept proceedings in a criminal court by passing upon the validity of a statute or regulation with an offence against which an accused person was charged. If the accused relied upon the invalidity of an enactment he could raise his contention as a defence in the criminal proceedings.

(our emphasis)

218    It is convenient here to make a few other points.

219    There is little doubt that in the criminal proceedings the applicants can fully argue out the point as to the unlawfulness of the s 19 examination and to obtain any relief that is appropriate preventing further use of the fruits of the s 19 examination in the criminal proceedings, whether on any admissibility questions or otherwise. Indeed, if it is appropriate, relief could be obtained concerning preventing any derivative use more generally and the return of the transcripts.

220    Contrastingly, there are various difficulties if this Court was now to decide the lawfulness of the s 19 examination. Let us address the two possibilities.

221    One possibility is that this Court might decide that the s 19 examination was unlawful. Now issue estoppel would not apply in the criminal proceedings (Rogers). But the CDPP says that it could not and would not re-agitate the point in the criminal proceedings because it would be an abuse of process. But contrastingly, the applicants say that the CDPP could re-agitate the issue. But in any event the applicants say that if the CDPP did not, the CDPP could still push for the relevant fruits of the examination to be admitted under a Bunning v Cross type discretion even if the s 19 examination was unlawful.

222    The other possibility is that this Court might decide that the s 19 examination was lawful. But if that be so, both the CDPP and the applicants seem to agree that in any event the applicants would nevertheless be free to re-agitate the point in the criminal proceedings.

223    Clearly, under either possibility there would be an undesirable outcome in terms of potential duplication and inconsistency.

224    It is convenient to make one other point here. In terms of any threatened use of the fruits of the s 19 examination, there is only the extant criminal proceedings where there has been any actual or threatened use. There is no other actual or threatened civil or criminal proceedings against the applicants where it is suggested that there would or could be such use of the fruits. And it is significant in this context that the s 19 examination occurred on 7 July 2016. It would seem unlikely, after all these years, that apart from the extant criminal proceedings, there will be other proceedings, civil or criminal, where such threatened use may occur. Of course that does not mean that the applicants are not entitled to seek a vindication of their broader rights. But they can do so in any event and at the appropriate time being after the finalisation of the criminal proceedings, given that her Honour only ordered a temporary stay.

225    Ground 2 is not made out.

Is it only questions going to evidentiary/procedural rulings that must, subject to exceptional circumstances, be raised in the criminal court? (ground 3)

226    Her Honour stated (at [175]) that:

The authorities on fragmentation make it clear that where a point can be raised in extant criminal proceedings, absent exceptional circumstances that warrant determining the point in the separate civil proceedings, it should be raised in the criminal court, and not by way of a separate civil proceeding.

[original emphasis; citations omitted]

227    And her Honour stated (at [180]) that because the applicants:

can pursue the question of the legality of the s 19 examination in the criminal proceedings, they should do so unless there are compelling reasons that would justify the question being determined in the civil jurisdiction.

(emphasis in original)

228    The applicants take issue with what they say are two overbroad and incorrect statements of applicable legal tests by the primary judge. And the applicants say that the natural meaning of [175] and [180] reflect her Honour’s erroneous conclusions.

229    The applicants say that the primary judge erred in holding (at [180]) that merely because the applicants can pursue the legality of the s 19 examination in the criminal proceedings, they should be foreclosed from seeking the relief they seek in this Court “unless there are compelling reasons that would justify the question being determined in the civil jurisdiction”.

230    But the applicants say that this is not what the authorities establish.

231    Her Honour referred in this regard to Hausfeld, Cain, Jiang, Phong and Palmer. The applicants made the following points as to the context of these cases.

232    Hausfeld involved fragmentation because the civil proceeding sought to deal with a discrete evidentiary or procedural ruling in a pending criminal proceeding.

233    In Cain, the appellants sought declaratory relief from the NSW Supreme Court to the effect that the magistrate who had conducted their committal had erroneously upheld a public interest immunity claim over documents identifying witnesses the appellants wished to call in their defence.

234    In Phong, the essence of the relief sought was an injunction (claim 10) seeking to halt the appellant’s prosecution. The appellant essentially sought an order in the nature of a permanent stay from the Federal Court when the criminal trial court had “ample powers” to provide the relevant relief. Beaumont J said (at [53]):

It follows, in my view, that at trial, the County Court will have the power, in any appropriate circumstance, to grant a permanent stay of a prosecution. Such a stay would be the practical equivalent of the injunction sought in Claim 10. That being so, there is no need for, or utility in, this Court granting judicial review in response to Claim 10, when the existence of the ample powers of the County Court to prevent unfairness and injustice are taken into account.

235    In Palmer, the applicants essentially sought declarations that, inter-alia, the prosecution was an abuse of process or bad in law and ought to be stayed.

236    The applicants say that what these authorities establish is nothing more than that questions going directly to the conduct of a criminal proceeding are, ordinarily, to be raised in those criminal proceedings and not in a collateral civil proceeding in another court. The applicants say that that is nothing more than a restatement of what the applicants assert to be the key principle in Sankey.

237    But the applicants say that that principle does not bear on the present case.

238    The applicants say that the primary judge correctly accepted (at [184]) that “the relief sought by the Palmer parties goes beyond the relief that might be afforded by the criminal courts … either in the committal or trial phase”. Indeed, her Honour accepted (at [184] and [185]) that the primary proceeding had “potential utility to the Palmer parties” beyond the confines of the criminal proceeding by way of a “general and final declaration that the s 19 examination was unlawful”.

239    So, the applicants say that they should not in those circumstances be required to show any “exceptional circumstances” in order to obtain relief.

240    Further, the applicants say that no attempt is made to reconcile the inconsistency of the primary judge’s reasoning with the decision in Mudginberri Station Pty Ltd v Australasia Meat Industries Employees’ Union (1986) 12 FCR 10 at 13. We will deal with that assertion under ground 4.

Analysis

241    Now as the respondents point out, her Honour found that the principle against fragmentation was enlivened not merely because the legality of the s 19 examination could be raised in the criminal proceedings but also because the relief sought by the applicants would affect the conduct of the criminal proceedings.

242    That is a standard application of the principle against fragmentation as explained in the High Court cases discussed above, and applied in cases such as Flanagan, Bell and Hutson, each of which was considered by the primary judge.

243    The applicants have complained about her Honour’s use of phrases such as “exceptional circumstances” and “compelling reasons”, but it is not appropriate to parse each and every phrase used by her Honour, particularly when it is clear that she carefully considered and applied the relevant authorities.

244    We have no difficulty with her Honour’s reference to compelling reasons but perhaps, on one connotation of the phrase, “exceptional circumstances” is too strong.

245    But howsoever one views her Honour’s form of expression, her Honour correctly identified the fragmentation principle and correctly identified that the proceeding below involved fragmentation. And that being the foundation and as her Honour correctly concluded, there was no compelling reason shown why the criminal proceedings should be allowed to be fragmented.

246    Further, the fact that the relief sought in this proceeding goes beyond what could be granted in the criminal proceedings does not take this matter outside the reach of the principle against fragmentation.

247    Further, as the respondents point out, it was in recognition of the fact that the relief sought went beyond what could be granted in the criminal proceedings that the primary judge ordered a temporary, rather than permanent, stay, which we will address later under ground 5.

248    For present purposes it is sufficient to observe that a temporary stay does not foreclose the applicants from seeking relief in these proceedings. Rather, it simply defers their ability to do so. Further, they can also apply to lift the stay in the civil proceeding if there is a change in circumstances warranting that course.

249    Ground 3 is not made out.

The correct starting point — an entitlement to have the civil claim heard (ground 4)

250    The applicants say that her Honour’s statement (at [180]), which we have set out earlier, inverts the principle stated in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 at 19 per Sugerman ACJ, which is that a moving party has a right to have a claim, regularly commenced in a court of competent jurisdiction, heard and determined other than in exceptional circumstances.

251    The applicants say that it is not permissible to ask whether there is within a civil proceeding some question that could be raised in the criminal proceedings (here, the legality of the s 19 examination) and, if so, conclude that the civil proceeding must be stayed “unless there are compelling reasons that would justify the question being determined in the civil jurisdiction”.

252    The applicants say that this is putting the issue the wrong way around.

253    The applicants pray in aid what was said by Moshinsky J in Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd (2019) 138 ACSR 42 at [54] that a plaintiff is prima facie entitled to have his civil action tried in the ordinary course and so a stay requires justification on proper grounds. The applicants also refer to what was said in Mudginberri Station at 13 that this is so “[e]ven in the context of a pending criminal proceeding involving substantially similar issues”.

254    The applicants say that it is the staying of a civil action on the apprehension of fragmentation (if it be that) of criminal proceedings that is the exceptional course of action.

Analysis

255    We agree with the respondents that the primary judge expressly considered that principle, as discussed in Rochfort. Her Honour was also cognisant that a court is ordinarily very reluctant to prevent a party from prosecuting a case regularly commenced within the court’s jurisdiction. The primary judge did not invert the principle. Rather her Honour properly reconciled it with the principle against fragmentation.

256    Further, as the respondents point out, the principle stated in Rochfort is not an absolute rule.

257    As Sugerman ACJ explained (at 19), the principle is “subject only to an exercise of judicial discretion on proper grounds as part of the court’s inherent powers”. So, he did not question the inherent or implied jurisdiction of a court to grant a stay of proceedings in the interests of justice.

258    Further, every case in which a civil proceeding has been stayed because it would fragment a criminal proceeding is an acknowledgement that those circumstances fall within an exception to the so-called “fundamental principle”.

259    Further, in our view, Mudginberri Station says little of relevance on the fragmentation question given that it was dealing with a scenario concerning two civil cases and whether one should be adjourned pending the disposition of the other. In obiter, the Court said (at 13):

Even in the context of a pending criminal proceeding involving substantially similar issues, upon an application for an adjournment to accord priority to that criminal proceeding, “The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with”: see Cameron’s Unit Services Pty Ltd v Kevin R Whelpton Associates (Aust) Pty Ltd (1984) 4 FCR 428 at 431. As the Court of Appeal division of the Supreme Court of New South Wales (Sugerman ACJ, Holmes and Mason JJA) made clear in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16, that is not a light burden.

260    But even that observation is not directly addressing the fragmentation scenario where an accused in actual or potential criminal proceedings has brought a civil suit to address an issue that could be addressed in the criminal proceedings.

261    What their Honours were there commenting on was the type of scenario dealt with by Moshinsky J in ASIC v ANZ, where the plaintiff in the civil suit, who is sought to be restrained, is not the accused or related to the accused or a defendant in actual or pending criminal proceedings.

262    It is in that context where courts have made observations of the type made in Mudginberri Station or as Moshinsky J said in ASIC v ANZ (at [54] and [55]):

… [A] plaintiff is prima facie entitled to have his, her or its civil action tried in the ordinary course and a stay therefore requires justification on proper grounds (with the applicant for a stay bearing the burden of demonstrating proper grounds): see Zhao at [39]; McMahon v Gould at 206.

… [A] court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending; a stay of the civil proceeding may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his, her or its defence in the criminal trial: see Zhao at [35]; CFMEU v ACCC at [22]; see also s 1331 of the Corporations Act. The risk of prejudice must be real: see CFMEU v ACCC at [22]; Ransley at [22] per Jagot J. As to possible prejudice to an accused, the following have been recognised as relevant factors:

(a)    prejudice to the accused’s right to silence or privilege against self-incrimination: see Zhao at [42]–[47]; CFMEU v ACCC at [23]; Ransley at [24]–[30]; Obeid at [4]; and

(b)    the possibility of publicity that might reach and influence jurors: see CFMEU v ACCC at [44]–[46].

263    But clearly that is all where the accused has not launched the civil suit. Rather, it is the accused or, say, an employer of the accused that is seeking to stay the civil suit. Indeed, the accused may not even be a party to the civil proceeding. But if he was, he would be in the position of the defendant seeking the stay of the civil case because of actual or potential prejudice to him in the criminal proceedings.

264    Ground 4 is not made out. We will now deal with ground 6 before returning to ground 5.

Policy concern with wealthy or powerful defendants — whether it bears on the application of the rule against fragmentation (ground 6)

265    The applicants have complained about what they say were gratuitous and irrelevant direct and indirect references by the primary judge to Mr Palmer’s status.

266    They say that her Honour (at [1]) commenced her reasons by noting that that Mr Palmer “needs little introduction”. They say that thereafter, significant to her Honour’s reasoning in support of there being fragmentation in this case, was what she said (at [160]):

The nomenclature of “fragmentation” (or the other terms used, such as “disruption” or “dislocation”) must not be allowed to obscure the underlying policy concerns that the High Court, and intermediate courts of appeal, have identified as standing behind the restraint shown by civil courts when it comes to proceedings that intersect with criminal proceedings. Those concerns, as canvassed by Kirby P (as his Honour then was) in Cain (at 235) and summarised above, include the undesirability of disruption or delay to criminal processes; the superior knowledge of the judge or magistrate seized of the criminal proceedings in respect of the facts and circumstances underlying the criminal case; the public cost of proliferating litigation; and the undue advantage that may be afforded to rich and powerful defendants to delay and interrupt the operation of the criminal law. See also Bou-Simon at [55] and [59] (Black CJ, Tamberlin and Katz JJ) and Jiang at [6]–[7] (O’Loughlin, North and Weinberg JJ) …

267    Further, the applicants say that her Honour’s reasoning discloses an erroneous slippage between, on the one hand, the content of the fragmentation principle as properly formulated and, on the other hand, the policy concern behind that principle.

268    The applicants say that Cain and Jiang make the distinction between principle and policy clear.

269    In Cain, Kirby P said (at 235) that:

there is a basic rule of restraint. At the stage of committal…superior courts do well to limit their intervention to exceptional or special cases… It is important … to understand the rationale behind the rule of restraint. The reasons include … (5) the undue advantage that may be given to rich and powerful defendants to interrupt and delay the operation of the criminal law in a way not so readily available to ordinary citizens.

270    In Jiang, O’Loughlin, North and Weinberg JJ said (at [6]) that:

[t]hose responsible for law enforcement in this country have for many years argued that steps should be taken to prevent individuals with the means to do so from fragmenting the criminal justice process.

271    The applicants say that the primary judge’s concern that the doctrinal concept of fragmentation not “obscure” a policy concern about wealthy litigants must mean that her Honour took her assessment that Mr Palmer was “rich and powerful” into account in deciding whether there was in fact any fragmentation.

272    But the applicants say that the distinction between the content of the fragmentation principle and its rationale is drawn for good reason. They say that it could not be right that a court could determine whether a particular civil proceeding should be stayed by reference to the wealth or power of the particular criminal defendant involved. To do so would be to accept that ceteris paribus a wealthier defendant had less recourse to the “fundamental right” stated in Rochfort to have a claim heard and determined.

273    Further, the applicants say that her Honour (at [59]) added emphasis to a quotation from Cain to single out just two of six policy justifications for the rule against fragmentation listed by Kirby P, which two singled out were, first, the undesirability of disruption or delay in committal proceedings and, second, the undue advantage that may be given to rich and powerful defendants to interrupt and delay the operation of the criminal law.

274    They say that the primary judge can be taken to indicate that these justifications were relevant to and potentially decisive of the proceeding before her. The applicants pose the question: why else would her Honour draw attention to them?

Analysis

275    We agree with the respondents that the primary judge’s opening observation that Mr Palmer “needs little introduction” falls well short of the primary judge considering that her perception of Mr Palmer as “rich and powerful” was significantly relevant to the disposition of the respondents’ stay application(s).

276    Now it is true that her Honour (at [59]) referred to and emboldened the fifth factor referred to by Kirby P in Cain at 235. And it is also true that her Honour (at [160]) picked out four of the six factors referred to by Kirby P, one of the four being the fifth factor referred to by Kirby P referring to the “undue advantage that may be given to rich and powerful defendants…”.

277    For our part, and with respect, we would not have identified such a factor, as Kirby P did, or emphasised it, as the primary judge did.

278    Further, the applicants’ suggestion that the primary judge erroneously slipped between “the content of the fragmentation principle … and the policy concern behind that principle” (original emphasis) is not completely devoid of merit in the sense that it could only be a policy rationale rather than a factor to be applied against Mr Palmer in the application of the fragmentation principle, and it would seem that her Honour was unclear as to how she was using the point.

279    But at the end of the day none of this, including her Honour’s references on this aspect and the applicants’ criticisms, seem to go anywhere.

280    We are not able to conclude that any of this amounted to an operative error in terms of either her Honour’s evaluative exercise in terms of determining not to grant a permanent stay or her Honour’s discretionary exercise in terms of granting a temporary stay.

281    Generally, her Honour arrived at the conclusion that the proceedings would involve fragmentation as a result of a careful analysis of how the two proceedings intersected with one another. The reference to Mr Palmer’s status was nothing more than a speck of superfluity on an otherwise detailed and careful analysis of all issues.

282    Ground 6 is not made out.

Was there a proper basis for a temporary stay? (ground 5)

283    It is appropriate for us to begin with her Honour’s consideration before addressing the applicants’ arguments.

284    Her Honour considered (at [187]) that a temporary stay, until the conclusion of the prosecution, and any appeals, would ensure that the interests of the applicants were not compromised by a permanent stay or summary dismissal whilst also preventing any disruption or fragmentation of the criminal proceedings. In the circumstances of the case, her Honour considered that it was not necessary to order a permanent stay in order to avoid the Court’s procedures being abused.

285    Her Honour considered (at [188]) that a temporary stay would also be subject to further order of the Court. This meant that if it should transpire that action that was adverse to the applicants was being taken that in some way uses the transcripts of the s 19 examination, the applicants would be able to apply to the Court to lift the stay.

286    Her Honour did not accept (at [188]) the applicants’ submission that a temporary stay would require the ongoing supervision of this Court. She said that it is not uncommon for civil proceedings to be temporarily stayed whilst related criminal proceedings against the same defendant are on foot.

287    The primary judge did not accept (at [189]) the applicants’ submission that a temporary stay would be inappropriate as the applicants may be left in limbo if the CDPP were not to present the indictment for trial following committal. Her Honour considered that if the CDPP did not present the indictment following committal, the applicants would not be left in limbo; rather, they could apply for the temporary stay to be lifted. In any event, in Queensland there are legislated timeframes for presenting an indictment following a committal, so it is unlikely that the prosecution would be left in limbo. Her Honour said that whilst it is not generally desirable for a case to remain on the Court’s docket unresolved for a substantial period of time, there are occasions in which a temporary stay, which may be prolonged, is appropriate. This was one such case.

288    Her Honour said (at [190]) that both ASIC and the CDPP sought a permanent stay of this proceeding. But she noted that the CDPP accepted that a temporary stay until the conclusion of the prosecution would address her concerns. Further, she noted that ASIC ultimately did not disavow the appropriateness of a temporary stay, were its preference for a permanent stay to be rejected. But the applicants contended that the applications had to be determined on an all or nothing basis. They said that either there was fragmentation warranting a permanent stay or there was not.

289    Her Honour noted (at [191]) that the CDPP and ASIC brought their applications for a permanent stay, inter-alia, under s 23 of the Federal Court of Australia Act 1976 (Cth). This is a power to make such orders as the Court thinks “appropriate” (s 23). It is not a power confined to the making of a permanent stay.

290    Further, her Honour noted (at [193]) that the power of the Court to order a temporary stay is an aspect of its general power to control its own proceedings. And her Honour said that ASIC’s and the CDPP’s applications were framed so as to invoke the Court’s broad powers, which extend to the making of orders temporarily staying a proceeding.

291    The primary judge considered (at [194]) that it was open to the Court to order a temporary stay. And her Honour determined that it was the appropriate outcome in the circumstances.

292    For the foregoing reasons, her Honour considered that a temporary stay was warranted in the interests of justice.

293    Let us then turn to the applicants’ position who have contended that there was no rational or juridical basis for the grant of a temporary stay.

294    The applicants say that a permanent stay is granted because the litigation of the proceedings in question would be an abuse of process. But they say that a temporary stay, on the other hand, assumes the opposite of the underlying proceedings, that is, they are fit to be litigated, but for other reasons continued litigation must await the occurrence of another event.

295    Now the primary judge referred to recent examples of civil proceedings which were temporarily stayed while related criminal proceedings went forward. But the applicants say that each of those cases concerned a stay to ensure a defendant to a civil proceeding was not prejudiced in their defence of a simultaneous and overlapping criminal proceeding. They cannot and do not assist. No part of the proceedings the subject of the temporary stays were of their nature an abuse of process.

296    The applicants say that the primary basis on which the primary proceeding was said to be an abuse of process, and the only basis on which the primary judge granted the temporary stay below, was that the primary proceeding would cause the fragmentation of the criminal proceedings. That was in essence because the question of the lawfulness of the s 19 examination raised in the primary proceeding was a question that will or may arise in the criminal proceedings.

297    The applicants say that if the basic vice with the primary proceeding is that it raises a legal point that may also arise in the criminal proceedings, it is not clear why that vice would be cured by the resolution of the criminal proceedings.

298    The applicants say that if evidentiary objections premised on the illegality of the s 19 examination were to be decided against the applicants in the criminal proceedings, would it not be a collateral attack on that ruling in the same sense to then proceed to agitate the s 19 point in this Court?

299    Indeed that kind of collateral attack on a ruling already made in a criminal trial is the typical case of fragmentation.

300    The applicants say that the primary judge’s preference for the grant of a temporary stay was not the correct approach and finds no support in any decision relied on by her Honour.

301    The applicants say that her Honour’s approach was not consistent with the course adopted in cases such as Flanagan and Bell.

Analysis

302    Clearly, there was a rational basis for her Honour’s grant of a temporary stay.

303    First, it was within the relief claimed by the CDPP and ASIC at first instance.

304    Second, her Honour under s 23 of the FCA Act and rule 1.32 of the Federal Court Rules 2011 (Cth) had the power to grant a temporary stay; see her discussion at [191] to [194].

305    Third, the grant of a temporary stay is not out of the ordinary where it is said that it is not desirable for civil proceedings to continue whilst criminal proceedings are on foot.

306    Fourth, in Flanagan, the claim for damages for misfeasance in public office was postponed to a later occasion (see 218 to 220). There was no permanent stay of that claim. The Full Court permitted the claim to proceed to trial subsequent to the criminal proceeding.

307    Further, in Bell, there was postponement. The Court deferred the making of certain declarations in the civil proceeding until after the final conclusion of the criminal proceeding. The Court said (at [416] to [419]:

In the present case, the Commissioner does not seek to interfere in the criminal proceeding and granting the declarations sought (to the extent otherwise appropriate) would not directly interfere in the criminal proceeding. However, the declarations sought would address issues that are very closely aligned (if not identical) to those arising for decision in the criminal proceeding. Although the declarations would not be directly binding on the parties to the criminal proceeding (in the sense that an issue estoppel would arise), insofar as they decided issues of law, they would represent an authoritative decision of this Court binding on the District Court under the doctrine of binding precedent.

The precise formulation of the declarations might have presently unforeseen consequences in the criminal proceeding. In general, an important factor weighing against the exercise of the discretion is that it is preferable that issues arising in the criminal proceeding be determined in the context of the criminal proceeding without the superadded complication of this Court making declarations in the civil proceeding. The same restraint would be called for if it were Mr Bell who were seeking declarations to the opposite effect to those sought by the Commissioner.

The position may or may not have been different if there had been no appeal or reservation of questions in the criminal proceeding. However, given the existence of those appellate proceedings in respect of the criminal proceeding, and this Court's determination of them, the prejudice to the Commissioner if declarations are not granted at this stage in the civil proceeding is substantially lessened due to the doctrine of binding precedent referred to above.

In all of the circumstances, it is in the interests of justice for this Court to exercise caution to avoid the risk of unforeseen consequences of the making of declarations and defer making any declarations until after the final determination of the criminal proceeding against Mr Bell.

308    Fifth, as the primary judge recognised, it was to the advantage of the applicants to grant only a temporary stay rather than a permanent stay. As her Honour said (at [186] and [187]:

That, then, links to the question of whether the Palmer parties' interests would be adversely affected by a permanent stay, or summary dismissal, of the proceeding. The parties agreed that, were the present proceedings to be permanently stayed or summarily dismissed by reason of concerns regarding fragmentation, the Palmer parties would be able to run the illegality point in the criminal proceedings. The parties were, however, at odds regarding whether a permanent stay or summary dismissal would prejudice the Palmer parties' ability to raise the illegality issue in subsequent civil proceedings; the Palmer parties contended that there would be a res judicata that would preclude future civil proceedings on this issue. The prospect of further civil proceedings arises given the constraints on the nature of the relief that the criminal courts may order — most likely an interlocutory decision on the admissibility of evidence — and the potential for the s 19 transcripts to be used in the future, in ways adverse to the Palmer parties.

In my view, the wider ambit of the present proceeding, and the possibility that future civil proceedings may be met with a res judicata argument, suggests that the interests of justice are best served by a temporary, rather than a permanent, stay or dismissal of the proceeding. A temporary stay, until the conclusion of the PLC Prosecution, and any appeals, will ensure that the interests of the Palmer parties are not compromised by a permanent stay (or summary dismissal) while also preventing any disruption or fragmentation of the criminal proceedings. In the circumstances of this case, it is not necessary to order a permanent stay in order to avoid this Court's procedures being abused.

309    Further, as the respondents correctly point out, this ground relies on the false premises that the proceedings before the primary judge were either an abuse of process, which may only be addressed by way of a permanent stay, or not an abuse of process, in which case there is no basis for ordering a stay of any kind.

310    There is no reason why the primary judge was constrained by that binary analysis.

311    We agree with the respondents that the primary judge was correct to conclude that it would be an abuse of the Court’s processes to allow the proceedings to continue at this point because to do so would fragment the criminal proceedings and there were no compelling reasons to permit that course. That is a well-established category of abuse of process.

312    The issue her Honour had to then confront was the relief that should be ordered in those circumstances.

313    Having regard to the breadth of the relief sought by the applicants and the possibility that future civil proceedings may be met with a res judicata argument if the proceeding below was permanently stayed, it was open to the primary judge to find that the interests of justice were best served by a temporary stay. This was the better option than the last resort of a permanent stay.

314    The granting of a temporary stay addressed the vice that the proceedings before the primary judge effected a fragmentation of the criminal proceedings. It did so by ensuring the criminal proceedings could continue without interference or intrusion by the civil proceeding. The vice of fragmentation would self-evidently dissipate once the criminal proceeding had concluded.

315    The applicants suggest that re-enlivening these proceedings at that point would involve a collateral attack on rulings made in the criminal proceedings. Whether that is so may depend on how the criminal proceedings and these proceedings evolved. But that possibility is beside the point. That is because the principle against fragmentation gives precedence to issues being determined in extant criminal proceedings.

316    Once that principle was enlivened and no compelling reasons existed for fragmenting the criminal proceeding, the primary judge was right to stay the proceedings and it was open to her Honour to do that on a temporary basis.

317    Ground 5 is not made out.

General — the nature of the task

318    It has not been necessary for us to dwell on the nature of the task before her Honour. It may be accepted that in considering whether to grant a permanent stay her Honour was engaged in an evaluative exercise for which there was only one correct answer (GLJ). But as to her Honour’s decision to grant a temporary stay, there are three ways to look at it. Given that the grant of the temporary stay implicitly involved the refusal of a permanent stay, the first way to look at it is the same way as just discussed. The second way to look at it is to consider it as a discretionary judgment to be assessed as a House v The King type situation. The third way to look at it involves a bifurcation. That part of the decision to refuse a permanent stay could be seen as an evaluative task with only one correct answer. The latter part of the decision to grant a temporary stay could be seen as a discretionary judgment. But such a bifurcation is not a clean split where the decision to refuse a permanent stay is informed and influenced by the fact that a temporary stay is the preferable solution. Where that is so, it would seem preferable to treat all aspects of the decision as involving the one evaluative task refusing the permanent stay. Indeed, the parties before us treated her Honour’s decision in that fashion. The applicants said under ground 5 that it was an error in refusing the permanent stay to have opted for the temporary stay. It was said that her Honour only had the binary choice of either granting the permanent stay or refusing the permanent stay, nothing more.

319    In the circumstances of this case, we are content to treat all aspects of her Honour’s reasons in the same fashion as the parties have done, that is, as involving the one overall evaluative task for which there was only one correct answer. Moreover, there was no separate attack on the grant of the temporary stay outside the argument that it should not have been used as a circumstance relevant to justifying the refusal of the permanent stay.

320    But in any event, nothing may turn on any of this given that we have found no operative error on the part of the primary judge under any of the grounds of appeal.

321    In summary, and as is apparent, we have rejected all of the grounds of appeal advanced. So, we would dismiss the appeal on its merits. And that being the case, it is unnecessary to resolve the jurisdictional issue raised by the CDPP that we have identified at the outset of these reasons (see Babet at [58] to [74]). But if we did need to resolve the jurisdictional question, in our opinion the better view is that her Honour did have jurisdiction as to some aspects of the relief sought in the proceeding below. And it is to that question that we now turn.

Jurisdiction

322    Before the primary judge, the applicants submitted that the Court had jurisdiction to hear the matter pursuant to s 39B(1A)(c) of the Judiciary Act. ASIC submitted that the Court had jurisdiction, but said that it was under s 1337B(1) of the Corporations Act, rather than s 39B(1A)(c). The CDPP did not address the point before her Honour.

323    But the CDPP now contends before us that the better view is that neither s 39B(1A)(c) nor s 1337B(1) confer jurisdiction on the Federal Court in respect of the proceeding brought by the applicants below. In order to address this question, it is necessary to set out some of the relevant statutory provisions.

324    Section 1337A provides:

1337A    Operation of Division

(1)    This Division deals with:

(a)    the jurisdiction of courts in respect of civil matters arising under the Corporations legislation; and

(b)    the jurisdiction of courts in respect of matters arising under the Administrative Decisions (Judicial Review) Act 1977 involving or related to decisions made under the Corporations legislation by Commonwealth authorities and officers of the Commonwealth; and

(c)    the jurisdiction of courts in civil matters in respect of decisions made by officers of the Commonwealth to prosecute persons for offences against the Corporations legislation and related criminal justice process decisions.

(2)    This Division operates to the exclusion of:

(a)    the Jurisdiction of Courts (Cross-vesting) Act 1987; and

(b)    section 39B of the Judiciary Act 1903.

(3)    This Division does not limit the operation of the provisions of the Judiciary Act 1903 other than section 39B.

(4)    Without limiting subsection (3), this Division does not limit the operation of subsection 39(2) of the Judiciary Act 1903 in relation to civil matters arising under the Corporations legislation.

(5)    Nothing in this Division affects any other jurisdiction of any court.

325    Sections 1337B(1) and (6) provide:

(1)    Jurisdiction is conferred on the Federal Court of Australia with respect to civil matters arising under the Corporations legislation.

…

(6)    This section has effect subject to section 1337D.

326    Section 1337B thus has effect subject to s 1337D. Section 1337D relevantly provides:

(1)    …

(2)    Subject to subsection (3), at any time when:

(a)    a prosecution for an offence against the Corporations legislation is before a State or Territory court; or

…

the following apply:

(c)    neither the Federal Court nor the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction with respect to any matter in which the person who is or was the defendant in the prosecution seeks a writ of mandamus or prohibition or an injunction against an officer or officers of the Commonwealth in relation to a related criminal justice process decision;

(d)    jurisdiction with respect to any such matter is conferred on the Supreme Court of the State or Territory in which the prosecution or appeal is before a court.

    …

(5)    Subsections (1), (2), (3) and (4) have effect despite anything in this Act or in any other law. In particular:

(a)    neither this Act, nor any other law, has the effect of giving the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) jurisdiction contrary to subsection (1) or (2); and

(b)    neither section 9 of the Administrative Decisions (Judicial Review) Act 1977, nor any other law, has the effect of removing from a State or Territory Supreme Court the jurisdiction given to that Court by subsection (1) or (2).

(6)    In this section:

…

related criminal justice process decision, in relation to an offence, means a decision (other than a decision to prosecute) made in the criminal justice process in relation to the offence, including:

(a)    a decision in connection with the investigation, committal for trial or prosecution of the defendant; and

(b)    a decision in connection with the appointment of investigators or inspectors for the purposes of such an investigation; and

(c)    a decision in connection with the issue of a warrant, including a search warrant or a seizure warrant; and

(d)    a decision requiring the production of documents, the giving of information or the summoning of persons as witnesses; and

(e)    a decision in connection with an appeal arising out of the prosecution.

327    “Corporations legislation” is defined to include, relevantly, the Corporations Act and the ASIC Act (s 9). “Civil matter” is defined to mean a matter other than a criminal matter (s 9). “Criminal matter” is not defined.

328    Now the CDPP says that these provisions invoke the ordinary concept of a “matter” as being the subject matter for determination in a legal proceeding rather than the legal proceeding itself. And the CDPP says that in this case the “matter” is the justiciable controversy about the lawfulness of an examination conducted under s 19 of the ASIC Act, having regard inter alia to the meaning and application of ss 19 and 49 of the ASIC Act. Accordingly, the proceeding brought by the applicants is a civil matter arising under the Corporations legislation, as referred to in s 1337B(1). But by virtue of s 1337A(2), any jurisdiction otherwise conferred by s 39B(1A)(c) is excluded.

329    The CDPP then says that the matter before the primary judge came within s 1337D(2) and so the Court’s jurisdiction was completely excluded. The CDPP says that so much can be seen by taking the relevant parts of that sub-section in turn.

330    It is said that s 1337D(2)(a) is satisfied by the prosecution of the applicants before the Magistrates Court of Queensland for offences against the Corporations Act: see the definition of “court” in s 58AA(1).

331    And it is said that s 1337D(2)(c) is satisfied because the proceeding before the primary judge involves a matter in which the applicants, who are the defendants in the prosecution, seek an injunction against an officer or officers of the Commonwealth in relation to a related criminal justice process decision. As to the different aspects of this requirement, the following points were made.

332    It is said that the relief sought in at least paragraphs B, C and D of the prayer for relief are, in substance and effect, injunctive. And it is said that that relief is sought against an officer or officers of the Commonwealth, being officers of the first and second respondent.

333    Further, it is said that on the case pleaded by the applicants, such relief against those officers is “in relation to” a related criminal justice process decision. So, it is alleged that ASIC issued a summons to Mr Palmer under s 19 of the ASIC Act, ASIC purported to exercise that power by compulsorily examining him, ASIC provided the transcripts of that examination to the CDPP, the transcripts were used in formulating the charges, the transcripts were used by ASIC to draft a summary of facts for the prosecution, and the transcripts were used to prepare evidence for the prosecution.

334    The CDPP says that such pleaded decisions come within at least paragraphs (a) and (d) of the definition of “related criminal justice process decision” as they are alleged to have been made in the criminal justice process in relation to the offences for which the applicants are now being prosecuted.

335    Further, it is said that in this context the phrase “in relation to” is one of wide import. As such, it requires no more than a relationship between the two subject-matters which it connects, being the nature of the relief sought by the applicants and the related criminal justice process decisions which the applicants plead. In this regard it is said that the phrase “in relation to” can encompass direct and indirect connections. And it is said that one subject matter can “relate to” another one even though the first subject matter also relates to other things.

336    Further, it is said that the better view on the plain language of the provisions is that this Court did not have jurisdiction in the “matter” in that it did not have jurisdiction with respect to the whole of the justiciable controversy regarding the lawfulness of the s 19 examination.

337    But in our view there is a question, which appears to be unresolved, as to whether a provision such as s 1337D(2) operates to take away jurisdiction with respect to only those parts of the matter in which the applicants seek relief of the kind identified in the provision.

338    In McCarthy v Commissioner of Taxation (2013) 249 FCR 140, Robertson J in dealing with a statutory analogue said (at [62] to [66]):

There are two competing constructions of s 39B(1C): a broader construction which emphasises the words “with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought” and a more limited construction which emphasises the words “in relation to a related criminal justice process decision”. In Pratten v Director of Public Prosecutions (Cth), the court seems to have favoured the latter view: see the judgment at [123]-[124], [141] and [215]. I was told however by counsel before me who appeared for the plaintiff in that case that those matters were not argued in the Supreme Court in that case.

The more limited construction is consistent with the purpose of the provision which was identified in the Second Reading Speech as being to avoid the use of unmeritorious delaying tactics in the criminal justice process, by removing the “collateral access of defendants to federal administrative law procedures and remedies”. Similarly, the Explanatory Memorandum said that s 39B(1C) provided that the Federal Court did not have jurisdiction to hear an application made by the defendant under s 39B(1) in relation to a decision made in the criminal justice process in relation to that offence and that the Supreme Court in which the prosecution was being heard was given jurisdiction with respect to such applications for injunctions and writs of prohibition and mandamus against a Commonwealth officer in relation to those decisions. Put differently, except in cases where the proceedings in the Federal Court consisted only of claims relevant to the criminal proceedings, the broader construction would confer on the court hearing the criminal proceedings exclusive jurisdiction with respect to issues having no bearing on the criminal proceedings.

The difficulty, in my opinion, does not stem from the phrase “in relation to” having, as it does, a content largely dependent on context: see R v Khazaal (2012) 246 CLR 601 at [31] per French CJ and the cases there cited. Rather, the difficulty arises from the coincidence in language between the grant of jurisdiction effected by s 39B(1) and the removal of jurisdiction effected by s 39B(1C). Section 39B(1C) seems to have been drafted on the basis that the relevant proceedings in the Federal Court would consist only of claims relevant to the criminal proceedings. I accept that the jurisdiction of the Federal Court may be defined by reference to part of a matter (see Abebe v Commonwealth (1999) 197 CLR 510 at [26], [226] and [281]) but the question remains whether that is the effect of the words used in s 39B(1C).

A further aid to construction is that a grant of jurisdiction is not to be read by making implications or imposing limitations which are not found in the express words (Owners of Shin Kobe Maru v Empire Shipping Company Inc (1994) 181 CLR 404 at 421), while, conversely, laws excluding jurisdiction are construed narrowly: see M Leeming, Authority to Decide (2012) at p 132 and the cases there cited in footnote 55.

In my opinion, although it is unnecessary for me to decide the point in light of the conclusions I have come to above, bearing in mind the mischief to which the provision is directed, the inconvenient and apparently unintended consequences of the broader construction and the principle referred to in the immediately preceding paragraph, the better construction is that s 39B(1C) operates to take away jurisdiction from this Court only in respect to the part or parts of the matter in which the defendant seeks the prescribed relief in relation to the criminal justice process decision and that this is to be tested by the effect of the relief claimed, if it were granted, on the criminal proceedings.

339    Contrastingly, in Huynh v Commonwealth of Australia [2025] FCA 531, Bromwich J in dealing with a statutory analogue said (at [24] to [29]):

In an application of the principles enunciated in Jiang, Robertson J in McCarthy v Commissioner of Taxation [2013] FCA 715; 249 FCR 140 at [39] held that the Federal Court has no jurisdiction in respect of at least the parts of the application before his Honour which impugned the validity of the search warrants and sought the return of material seized under those warrants or the destruction of that material. In relation to the balance of the claims, his Honour did not expressly decide whether the carve out in 39B(1C) would apply to deprive this Court of jurisdiction, on the basis that even if the Court continued to have jurisdiction to hear and determine them, it would be inappropriate to do so: McCarthy at [50]-[51]. However, his Honour made the following comments in obiter at [66] …

…

The substance of the applicant’s case on jurisdiction seems to be that he is not challenging the seizure, sharing and retention of the Seized Items to impede the prosecution against him, but rather to prevent the AFP and/or the Department from retaining them for a purpose collateral to that criminal proceeding. In that context, he contends that s 39B(1C) of the Judiciary Act and also s 9A(1) of the ADJR Act considered below, should be interpreted so as not to exclude this Court’s jurisdiction in the particular circumstances of this case.

That argument should be rejected because I am unable to accept that the statutory construction task in this case should be conducted in that way. More generally, legislation may be enacted deliberately to cover a wider field, or a narrower field, than the circumstances that motivated its enactment. It may also go further than intended or fail in an aspiration to go as far as intended. Either way, extrinsic material cannot be used to change the meaning of what has been legislated, as opposed to a more limited role in assisting to ascertain what that meaning is …

The carve out provisions in the Judiciary Act and the ADJR Act are broad in their expression, and in particular are overtly wider in scope than the specific object sought to be achieved, as identified in the extrinsic material, of avoiding fracturing of the criminal process and delay. The definition of “related criminal justice process decision” captures a wide range of decisions made in the criminal justice process. That cannot be regarded as other than deliberate. As such, although the Legislature’s decision to insert the carve out provisions was evidently informed by concerns about fragmentation and delay in the criminal justice process, the final form of the legislation went much further than solely addressing that concern. Extrinsic material cannot be used to change the meaning of the legislation by creating an additional requirement that does not arise from the words used.

This broad view of the operation of the carve out provisions, despite the more limited ambit of the objectives and concerns expressed in the extrinsic material, is consistent with the observations of the Full Court in Jiang at [14]-[15], reproduced above.

340    Here this may bear upon whether some parts of the purely declaratory relief sought by the applicants were within the jurisdiction of the Court, and also the relief sought against ASIC which is not an “officer of the Commonwealth”.

341    Now the applicants say that this Court has jurisdiction to grant the declaration sought in paragraph A of the prayer for relief pursuant to s 21 of the FCA Act, which provides as follows:

Declarations of right

(1)    The Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

(2)    A suit is not open to objection on the ground that a declaratory order only is sought.

342    The applicants say that the existence of this jurisdiction in respect of certain of the relief sought is dispositive adversely to the point raised.

343    So, the applicants say that once that point is arrived at, it is neither necessary nor desirable to determine any contentious issues of jurisdiction for part of the relief sought. The applicants say that where there is a factual basis asserted, founding a claim for certain relief, that is within the jurisdiction of the Federal Court, then there is a justiciable controversy regularly engaged. And they say that this is unaltered by whether any additional relief sought relying on some or all of that factual basis may be asserted to be outside jurisdiction.

344    But in our view s 21 does not itself confer jurisdiction on the Court to grant the declaratory relief sought. That provision confers on the Court a power to make binding declarations of right “in civil proceedings in relation to a matter in which [the Court] has original jurisdiction”. So, the provision confers a power which may be exercised only if the Court otherwise has jurisdiction.

345    Further, the applicants say that this Court has original jurisdiction by reason of s 39B(1A)(c).

346    The applicants say that s 1337A(2)(b) provides that the relevant Division including s 1337D operates to the exclusion of s 39B of the Judiciary Act, but only to the extent that s 1337D is engaged. But that is not so. Even if s 1337D was not engaged, s 39B is still excluded as s 1337A(2)(b) makes plain.

347    Further, the applicants say that the relief sought in paragraph A of the prayer for relief by way of declaration is not, in terms, caught by the exclusion in s 1337D(2), regardless of whether the remainder of the relief sought in paragraphs B, C and D are precluded.

348    Moreover, as to the relief sought against ASIC itself, ASIC is of course not an “officer of the Commonwealth”.

349    The applicants say that where the relevant relief captured by s 1337D(2) is limited to “a writ of mandamus or prohibition or an injunction”, s 1337D(2) does not curtail this Court’s jurisdiction to grant declaratory relief in the terms sought in paragraph A or against an entity that is not an “officer of the Commonwealth”.

350    And they say that jurisdiction to decide the declaratory relief is sufficient for the Court to be seized of the matter.

351    But the CDPP does not agree that s 1337D(2) operates only so as to exclude jurisdiction to grant certain forms of relief, leaving it free to determine claims for declaratory relief relating to the same matter.

352    The CDPP says that the focus of the inquiry is on whether the Court has jurisdiction in the “matter”, not on whether discrete claims for relief falling within the scope of that matter would themselves, in isolation, fall within the Court’s jurisdiction. Section 1337D(2) states that the Federal Court does not have jurisdiction “with respect to any matter”. The CDPP says that jurisdiction is excluded with respect to the “matter”, which is not limited as to the forms of relief that may be granted. It is said that there is a single “matter” here, being the controversy concerning the lawfulness of the s 19 examination. Moreover, the CDPP would appear to also say that any claim against ASIC itself, although not an officer of the Commonwealth, is also part of that “matter”.

353    The CDPP says that the Court either does or does not have jurisdiction with respect to that “matter”. And the CDPP says that the better view on the plain language of s 1337D(2) is that the Federal Court does not have jurisdiction in that “matter”.

354    But in our view, and notwithstanding the usual width given to the concept of “matter” and also the phrase “in relation to” as pointed out by the CDPP, we are inclined to prefer the approach of Robertson J in McCarthy, if we had to decide the point, for the following reasons.

355    First, his analysis is consistent with the principle that laws excluding jurisdiction should be construed narrowly.

356    Second, the breadth of the relief sought goes beyond the criminal proceedings and applies to any use of the fruits of the s 19 examination in any context including future civil proceedings or any other possible use of the s 19 transcripts.

357    Third, relief is sought against ASIC itself which is not an officer of the Commonwealth.

358    Fourth, as the applicants have pointed out, declaratory relief is also sought, although in our view this is not such a strong point in the applicants’ favour on the jurisdictional point save as against ASIC itself.

359    For these reasons there is force in Robertson J’s analysis, but there is much to be said on either side. Fortunately, we do not need to decide the point. But if we had to we would prefer Robertson J’s analysis to the extent of saying that the primary judge had jurisdiction to grant some of the relief claimed by the applicants against ASIC itself such as a declaration tailored to the s 19 unlawfulness question only or to orders precluding the use of the transcripts outside the extant or other criminal proceedings, say, use in future civil proceedings.

Conclusion

360    For the foregoing reasons, we will grant the extension of time sought by the applicants and grant leave to appeal, but we will dismiss the appeal. We see no good reason why costs should not follow the event.

Associate:

Dated:    24 October 2025