FEDERAL COURT OF AUSTRALIA

EVIDENCE – Discovery – Legal professional privilege – Whether obtaining search warrant for purposes of pending prosecution was a valid exercise of Commonwealth authority’s investigatory power – Whether legal advice from the Director of Public Prosecutions to a Commonwealth Authority in respect of the search warrant was a deliberate abuse of statutory power

CRIMINAL LAW AND PROCEDURE – Consideration of when an investigation into alleged offences is complete – Whether the Commission’s investigation and investigatory power came to an end upon the laying of charges under Health Insurance Commission Act 1973 (Cth)

STATUTES – Interpretation – Director of Public Prosecutions Act 1983 (Cth) – Whether the giving of legal advice by DPP to Commonwealth authority or agency where it is not a party to a proceeding is ultra vires the powers of the DPP

WORDS AND PHRASES: ‘investigation’– ‘in connection with’

Director of Public Prosecutions Act 1983 (Cth) ss 6 and 9

Health Insurance Commission Act 1973 (Cth) Part IID, ss 8L and 8Y

Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 500 – applied

Morris v Director of the Serious Fraud Office [1993] Ch 372 – considered

James v Robinson (1963) 109 CLR 593 – cited

Smith v Director of Serious Fraud Office [1992] 3 All ER 456 – cited

Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 – distinguished

Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 - cited

Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 – cited

Brambles Holdings Ltd v Trade Practices Commission (1980) 32 ALR 328 - cited

Grollo v Bates [1994] 53 FCR 218 – considered

Grofam Pty Limited v Australia and New Zealand Banking Group Limited (1993) 45 FCR 445 – considered

Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 – applied

Grofam Pty Ltd v Australia and New Zealand Banking Group Limited (1993) 43 FCR 408 – considered

HEALTH INSURANCE COMMISSION AND ROY LLEWELLYN CORBETT V JACK FREEMAN AND ANOR

VG 689 OF 1996

JUDGES: VON DOUSSA, CARR AND MERKEL JJ

PLACE: MELBOURNE

DATE: 23 OCTOBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	No VG 689 of 1996

APPLICATION FOR LEAVE TO APPEAL FROM A DECISION OF

A JUDGE OF THE FEDERAL COURT

BETWEEN:	Health Insurance Commission and Roy Llewellyn Corbett apPlicants
AND:	Jack Freeman First Respondent David Harper McLennan Second Respondent
JUDGES:	VON DOUSSA, CARR AND MERKEL jj
DATE OF ORDER:	23 October 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The time within which an application for leave to appeal against the interlocutory judgment and orders made by Finkelstein J on 26 August 1997 may be made, be extended to 5 September 1997.

2. The applicants be granted leave to appeal against the interlocutory judgment and orders.

3. The appeal be allowed.

4. The interlocutory orders made by Finkelstein J be set aside.

5. The motion by the first respondent commenced by notice dated 7 May 1997 be dismissed with costs.

6. The applicants’ taxed costs of and incidental to the application for leave to appeal and of the appeal be paid by the first respondent.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	No. vg 689 of 1997

On appeal from a judge of the Federal Court of Australia

BETWEEN:

Health Insurance Commission and

Roy Llewellyn Corbett

Applicants

AND:

Jack Freeman

First Respondent

David Harper McLennan

Second Respondent

JUDGES:	VON DOUSSA, CARR AND MERKEL jj
DATE:	23 October 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

CARR J:

I have had the advantage of reading in draft the reasons for judgment prepared by Merkel J. I agree with those reasons and with the orders which he proposes.

I certify that this page is a true copy of the Reasons for Judgment of Justice Carr.

Associate:

Dated: 23 October 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 689 of 1997

BETWEEN:

health insurance commission

and roy llewellyn corbett

Applicant

AND:

jack freeman

First Respondent

david harper mclennan

Second Respondent

JUDGES:	VON DOUSSA, CARR AND MERKEL JJ
DATE:	23 october 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

VON DOUSSA J: I agree with the reasons of judgment prepared by Merkel J, and with the orders proposed by him.

I certify that is a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa

Associate:

Dated:

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	No. vg 689 of 1997

application for leave to appeal from a decision of

A JUDGE OF THE FEDERAL COURT

BETWEEN:

Health Insurance Commission and

Roy Llewellyn Corbett

Applicants

AND:

Jack Freeman

First Respondent

David Harper McLennan

Second Respondent

JUDGEs:	VON DOUSSA, CARR AND MERKEL jj
DATE:	23 october 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

MERKEL J

Introduction

The applicants for leave to appeal, the Health Insurance Commission (“the Commission”) and Roy Llewellyn Corbett (“Corbett”), a senior investigations officer of the Commission, have applied for an extension of time within which to apply for leave to appeal and for leave to appeal against an interlocutory order made by a Judge of the Court on 26 August 1997. The decision of the learned primary judge is now reported at (1997) 78 FCR 91.

The order was made pursuant to an application of Dr Jack Freeman (“Freeman”), the respondent to the application for leave to appeal, for the inspection of certain documents which were the subject of a claim of legal professional privilege by the Commission and Corbett. The application for an extension of time was filed on 4 September 1997, two days outside the time prescribed for an application for leave to appeal under O 52, r 10(2)(b).

The Court directed that argument proceed on the issues which would be raised by the appeal if leave to appeal were granted. It was indicated that a decision on the applications before the Court would be made after the Court had the benefit of the submissions of the parties on the substantive issues.

It was common ground before the learned primary judge that the relevant documents came into existence for the sole purpose of recording legal advice provided by Michael Hannan (“Hannan”), a legal practitioner employed by the Commonwealth Director of Public Prosecutions (“the DPP”), to Corbett as an officer of the Commission. However, his Honour ordered that the documents be produced for inspection as he came to the conclusion, on a prima facie basis, that they were not privileged, as they had come into existence in furtherance of a deliberate abuse of statutory power on the part of Corbett acting on behalf of the Commission.

The order for inspection was made in a proceeding by Freeman against the respondents seeking to set aside a search warrant on the ground, inter alia, that it was applied for and obtained by Corbett under s 8Y(1) of the Health Insurance Commission Act 1973 (Cth) (“the Health Insurance Commission Act”) for an improper purpose. The abuse of statutory power referred to by his Honour related to Corbett’s conduct of applying for and obtaining the issue of the search warrant by the third respondent, who is a magistrate.

Background

The following summary of the background facts is taken mainly from the reasons of the primary judge. These facts are not in dispute.

Freeman is a medical practitioner. As a result of certain search warrants which were issued under the Crimes Act 1958 (Vic), members of the Victoria Police seized 168 blank, but signed, medicare assignment forms. On 27 October 1994, after it appeared to the police officers that the medicare forms could constitute evidence of offences by Freeman under the Health Insurance Act 1973 (Cth) (“the Health Insurance Act”), they informed officers of the Commission about the seizure. On 28 October 1994, after considering the seized forms and certain other evidence provided by the police officers to the Commission, the Commission’s Acting Manager of Investigations requested an authorisation by the Managing Director of the Commission for the exercise of investigative powers under Part IID of the Health Insurance Commission Act. The request was for an “ongoing investigation” into what was described as suspected multiple offences by Freeman “against s 128A and/or s 128B” of the Health Insurance Act and possible offences under s 86(1)(a) of the Crimes Act 1914 (Cth).

On 2 November 1994, an authorisation was issued pursuant to s 8L(1) of the Health Insurance Commission Act authorising the exercise of powers under Part IID of the Health Insurance Commission Act “…in connection with an investigation into the possible commission of relevant offences (within the meaning of the Act) by Dr Jack Freeman.”

Both before and after the authorisation, officers of the Commission and of the Victoria Police acted in conjunction in relation to the alleged offences against the Health Insurance Act. In due course, Freeman was charged with 519 offences. The charges related to common law offences, offences against the Crimes Act 1958 (Vic), the Drugs Poisons and Controlled Substances Regulations 1995 (Vic) and the Health Insurance Act. The charges in relation to the Health Insurance Act were in respect of alleged contraventions of s 127(1)(a) (150 charges), s 127(1)(b) (150 charges) and s 128B (163 charges). The informant, a State police officer, brought the charges in relation to the alleged contraventions of the Health Insurance Act pursuant to s 13 of the Crimes Act 1914 (Cth).

Proceedings for the committal of Freeman for trial on the 519 charges were commenced in the Magistrates’ Court at Melbourne.

During the committal proceedings the informant sought to rely on the 168 medicare forms which had been seized by a member of the Victoria Police when executing a search warrant under s 465 of the Crimes Act 1958 (Vic). The medicare forms were an important part of the evidence required to establish the alleged contraventions of ss 127 and 128B of the Health Insurance Act.

Freeman objected to the tender of the forms on the basis that the seizure had been unlawful. He contended that a search warrant could not validly issue under s 465 of the Crimes Act 1958 (Vic) to obtain evidence to establish a breach of Commonwealth law. The magistrate presiding over the committal proceedings accepted this submission and held that the warrant was invalid. The magistrate ordered the return of the seized medicare forms to Freeman, but granted a stay of 14 days to enable the Director of Public Prosecutions (Vic) to appeal against her order. The primary judge observed that the magistrate’s order to return the medicare forms may have been beyond power as the magistrate was not sitting in a judicial capacity and there was no properly constituted civil action in which such an order could be made. However, the point is not relevant to the issues in the present proceeding.

Officers of the Commission became concerned that the return of the forms to Freeman would result in the loss of important evidence which was required for the prosecution of Freeman for contraventions of the Health Insurance Act. Corbett was requested to issue a search warrant under the Health Insurance Commission Act to seize the forms “from the Victoria Police at Flemington so the charges could proceed”. In due course Corbett received advice from Hannan who he described as “the Commission’s regular legal adviser on matters relating to investigations and prosecutions”. Hannan initially advised proceeding under s 8P of the Health Insurance Commission Act. Corbett followed that course and a member of the Victoria Police who had possession of the medicare forms handed them to Corbett.

Hannan then began to have doubts about the correctness of using a notice under s 8P as the means of taking possession of the medicare forms. On 11 November 1996, he advised Corbett of his doubts, and recommended that the medicare forms should be returned to the Victoria Police as soon as possible. This was done. The next morning Corbett conferred with Hannan. Hannan drafted an application for the issue of a search warrant under s 8Y(1) of the Health Insurance Commission Act and also drafted a search warrant. On 12 November 1996, Corbett made application to the third respondent who issued a search warrant in the form drafted by Hannan. It is this warrant which the applicant now seeks to have declared invalid, void and of no effect. The warrant was then executed by Corbett at the Flemington Police Station. Corbett again took possession of the medicare forms.

The application by Corbett for the search warrant stated that:

“The search warrant is sought in connection with an investigation that the Commission is conducting in the performance of its functions and in respect of which the Managing Director of the Commission, acting under Section 8L(1) of the Act, has authorised the powers under Part IID of the Act to be exercised…”.

The application outlined the matters leading up to the application, including the order made by the magistrate for the 168 forms to be returned to Freeman.

The undisputed evidence before the primary judge was that the search warrant was obtained by Corbett, as an officer of the Commission, for the purpose of ensuring that the forms would be available for use in the prosecution of Freeman for the contraventions of the Health Insurance Act with which he had been charged.

On learning of these events, Freeman commenced a proceeding in the Court under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) claiming that the search warrant was invalid on a number of separate grounds. The only ground relevant for present purposes is that the search warrant was obtained for an improper purpose. The primary judge summarised the two improper purposes relied upon as follows:

“The first is that the search warrant was issued so that the medicare forms could be retained to assist the Director of Public Prosecutions (Vic) in proceedings against the applicant. The second, which is related to the first, is that the search warrant was issued to circumvent the order made by the Magistrate to return the medicare forms to the applicant so that the Victorian Police retain access to them. Each purpose is said to be improper because it is not a purpose for which a search warrant can be obtained under s 8Y of the Health Insurance Commission Act.”

Routine directions for the preparation of the case for trial required Corbett and the Commission to give discovery. In their List of Documents they asserted a claim for legal professional privilege in respect of documents that recorded legal advice, relating to the issue of the search warrant, given to them by Hannan. Freeman accepts that ordinarily those documents would be privileged. However, he contends that because the search warrant was obtained for improper purposes, any document which records advice in furtherance of such purposes cannot be privileged.

Freeman’s proceeding was fixed for trial before the primary Judge on 30 July 1997. The parties filed and served their affidavit evidence and outlines of their submissions prior to the hearing. Freeman issued a Notice of Motion dated 6 May 1997 seeking an order that the documents recording the communications (for which privilege had been claimed) between Hannan and the Commission or Corbett be produced for inspection.

The primary judge dealt with the motion on the basis of the affidavits that had been filed by the parties on the substantive application. His Honour found, on a prima facie basis, that:

· on the evidence before him, the investigation had concluded with the bringing of charges for offences under the Health Insurance Act;

· as there was no longer an investigation on foot, it was not a legitimate use of s 8Y of the Health Insurance Commission Act for Corbett to purport to use the Commission’s investigative power to obtain the issue of a search warrant for the purpose of seizing evidential material;

· Corbett was cognisant of those matters;

· accordingly, a sufficient case of deliberate abuse of statutory power had been made out in accordance with the requirements stated in Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 500 and Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501.

His Honour ordered that the Commission and Corbett serve on Freeman a copy of each of the documents in respect of which legal professional privilege was claimed. The Commission and Corbett have applied for leave to appeal from his Honour’s orders and if leave is granted, for orders that the appeal be allowed, the decision of his Honour be set aside and that Freeman’s notice of motion for inspection of documents be dismissed with costs.

In order to appreciate the issues arising on the application it is first necessary to consider the relevant provisions of the Health Insurance Commission Act.

The Health Insurance Commission Act

The power pursuant to which the search warrant was issued arises under the Health Insurance Commission Act. That Act, by s 4, establishes the Commission which is given a number of specific functions under Parts IIA, IIAA, IIAB and IIAC. Part IIB confers additional functions including such functions in relation to health insurance and other matters relating to health as are prescribed (s 8E). The relevant prescribed functions are found in the Health Insurance Commission Regulations (Cth) (“the Regulations”). In particular, reg 3(2) provides:

“For the purposes of subsection 8E (1) of the Act, the following functions are prescribed:

(a) to devise and implement measures intended:

(i) ...

(ii)...

(iii) to prevent, or facilitate the detection of, activities related to claims for payment, or the receipt, of medicare benefits that may constitute an offence under the Health Insurance Act or the Crimes Act 1914.

(b) ...

(i) an act done by a person in relation to a claim for payment, or the receipt, of medicare benefits may constitute an offence under the Health Insurance Act or the Crimes Act 1914; or

(ii) a person may have committed an offence against [particular subsections] of the Health Insurance Act;

and, where an investigation discloses that there is sufficient evidence to warrant a prosecution, to refer the case investigated and the information obtained in the course of the investigation to the Australian Federal Police or the Director of Public Prosecutions.”

The prescribed functions plainly empower the Commission to investigate whether a person has committed an offence under ss 127 and 128B of the Health Insurance Act.

Part IID of the Act gives the Commission investigative powers including the power to require a person to give information or produce a document (s 8P). Powers in relation to search and seizure are conferred under ss 8U and 8V. These investigative powers are subject to conditions prescribed in s 8L, which provides:

“(1) The Managing Director may, by instrument in writing, authorise the powers under this Part to be exercised in connection with an investigation that the Commission is conducting in the performance of its functions.

(2) Powers under this Part must not be exercised unless they are exercised in connection with an investigation for which such an authorisation is in force.”

Of particular significance in the present case is the requirement in s 8L(2) that powers under Part IID only be exercised “in connection with an investigation that the Commission is conducting in the performance of its functions”. Plainly, the powers under Part IID can only be exercised in connection with an investigation the Commission is conducting at the time when the powers are exercised.

Although the Act does not define an “investigation”, it is clear that taken in its context the word bears its ordinary meaning, being the act or process of searching or inquiring in order to ascertain facts: the Macquarie Dictionary. An investigative power conferred in general terms is not to be narrowly confined: see Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 47 FLR 163 at 173 and National Crime Authority v A1 (1997) 75 FCR 274 at 284-287 and MF1 v National Crime Authority (1991) 33 FCR 449 at 459-460, 471.

The words “in connection with” have been accepted as capable of describing a spectrum of relationships between things, one of which is bound up with or involved in another: see Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 288. However, as was pointed out by Sackville J in Taciak v Commissioner of Australian Federal Police (1995) 59 FCR 285 at 295, the question that remains in a particular case is what kind of relationship will suffice to establish the connection contemplated by the statute. That requires a “value judgment about the range of the statute”: see Pozzolanic at 289.

Section 8Y(1) provides for a Magistrate to issue a search warrant where an authorised officer of the Commission suspects on reasonable grounds that there may be on or in any premises “particular evidential material”. “Evidential material” is defined in s 3 as meaning “a thing relevant to a relevant offence”. A “relevant offence” is defined in s 3A which provides in sub-section (1) that for the purposes of the exercise of power under s 8Y, a relevant offence includes an offence against the Health Insurance Act. It is not in issue in the present case that the seized forms were capable of constituting evidential material in relation to relevant offences, being contraventions of ss 127 and 128B, for the purposes of s 8Y of the Health Insurance Commission Act.

Section 8Y carefully circumscribes the power of a Magistrate to issue a search warrant under the section. By reason of s 8L(2), a search warrant under s 8Y can only be issued when the exercise of power under s 8Y is in connection with an investigation for which an authorisation is in force under s 8L(1). That requirement is a condition precedent to the valid exercise of power under s 8Y: see George v Rockett (1990) 170 CLR 104 at 110-111.

The Primary Judge’s Reasoning

The reasoning of the primary Judge for making the order for production may be summarised as follows:

1. It is well established as a principle of public policy that confidential communications between the solicitor and the solicitor’s client shall not be subject to production: Bullivant v The Attorney-General for Victoria [1901] AC 196 at 200-201 per Halsbury LC and Grant v Downs (1976) 135 CLR 674 at 685 per Stephen, Mason and Murphy JJ.

2. One well known exception when legal professional privilege will not apply is where the communication sought to be protected was made in furtherance of an illegal object: R v Bell; Ex parte Lees (1980) 146 CLR 141 at 145. In Kearney (supra) the High Court held that the exception was not confined to crime or fraud but included a communication made in furtherance of an abuse of statutory power.

3. The exception provided for in Kearney only applies where there is a deliberate abuse of statutory power: see Kearney at 515 per Gibbs CJ, at 516-517 per Mason and Brennan JJ and 525 per Wilson J. Consequently, an inadvertent abuse of statutory power, such as one caused by a genuine but mistaken view of the scope of the power, would not fall within the exception.

4. To establish that a case falls within the exception, it is not necessary to establish that there was a deliberate abuse of statutory power, as that is usually the substantive issue for subsequent determination after the production of the privileged communications. The requisite standard of proof is not met by a bona fide or tenable allegation of fraud or of deliberate abuse of statutory power, there “must be something to give colour to the charge” or “some prima facie evidence that it has some foundation in fact”: see O’Rourke v Darbishire [1920] AC 581 at 604 per Viscount Finlay; Butler v Board of Trade [1971] 1 Ch 680 at 689 per Goff J; Kearney at 516, 517, 525 and 527 and Propend Finance Pty Ltd at 521-522, 546-547, 556 and 591-592.

5. If a Part IID power, including the power to obtain or issue a search warrant under s 8Y, is used for a purpose other than the investigation being conducted by the Commission, the power will have been used for an ulterior object and will constitute an improper exercise of that power: see Arthur Yates & Company Pty Ltd v The Vegetable Seeds Committee (1946) 72 CLR 37 at 67-69 and at 82-84; Sydney Municipal Corporation v Campbell [1925] AC 338 at 343 and Brownells Limited v Ironmongers’ Wages Board (1950) 81 CLR 108 at 120. Whether the power has been used for an ulterior object is a question of fact: see Reid v Sinderberry; Reid v McGrath (1944) 68 CLR 504 at 514.

6. The evidence did not establish that any officer of the Commission took any step in the investigation after the charges had been laid and there was nothing to indicate that the Commission understood or believed that any further investigatory work was to be undertaken. Further, no officer of the Commission, including Corbett, gave evidence in chief to the effect that the investigation was current when the search warrant was obtained. Corbett exhibited the information relied upon by him before the Magistrate to obtain the warrant, which stated that the warrant was being obtained in connection with the investigation. However, Corbett’s failure to give evidence in chief about the state of the investigation at that time could be taken into account in more readily drawing the inference, which was open in any event, that no investigation was then being conducted by the Commission: see Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419.

7. Accordingly, on a prima facie basis, no investigation was being conducted by the Commission when the search warrant was issued and consequently, it had been sufficiently established that the search warrant was obtained otherwise than in the proper exercise of the power conferred by s 8Y and that was a fact of which Corbett must have been aware.

8. The use of s 8Y to obtain a search warrant merely for the purpose of seizing evidential material for use in the State prosecution, which must have been known by Corbett, is sufficient to establish a prima facie case of deliberate abuse of power.

The primary judge approached the question of whether the investigation the subject of the authorisation under s 8L was no longer being conducted by the Commission when the search warrant was issued, as a question of fact. His Honour determined that question adversely to the Commission and Corbett on the basis that, as a matter of fact, the investigation ceased to be conducted by the Commission after the laying of charges against Freeman in respect of the relevant offences under the Health Insurance Act. A critical question is whether his Honour was wrong in so determining the matter.

The Submissions of the Parties

Senior counsel for the Commission and Corbett appeared to concede (in my view, correctly) that no error was made by his Honour in his enunciation of the legal principles. Rather, criticism was made of his Honour’s approach to the determination of the factual issues.

The main contention on behalf of the Commission and Corbett was that his Honour erred in concluding that the documents the subject of the search warrant were not required in connection with the investigation being conducted by the Commission in relation to Freeman. It was contended that although an investigation may lie dormant from time to time, there was no basis in the present case for concluding that the investigation had not been reactivated by the requirement to preserve the 168 medicare forms which, without the intervention of the Commission, would be likely to be lost for the purposes of Freeman’s prosecution. In substance, it was contended that the investigative process in relation to Freeman was ongoing and could only come to an end upon some formal act of termination by the Commission (which did not occur) or upon Freeman’s conviction or acquittal in respect of the relevant offences.

Senior counsel for the Commission and Corbett further contended that the retention of the forms for the purpose of enabling their tender at the committal hearing and their subsequent use in the prosecution of the relevant offences under the Health Insurance Act, was properly to be categorised as a step in connection with the investigation and, in any event, could not be said to be an improper purpose.

Criticism was also made of his Honour’s reliance on Corbett’s failure to give evidence as to the state of the investigation. It was contended that Corbett had given that evidence by exhibiting the information relied upon before the Magistrate in which Corbett deposed to the fact that the warrant “is sought in connection with an investigation that the Commission is conducting in the performance of its functions”. Accordingly, so it was said, it was unfair for his Honour to have rejected that “evidence” without Corbett having had the issue of the non-existence, at that time of the investigation put to him in cross-examination: see Browne v Dunn (1893) 6 R 67.

Senior counsel for Freeman contended that his Honour did not err in law or in fact. It was first contended that there had never been an investigation by the Commission; the only investigation conducted was that of the Victoria Police. It is appropriate to say at the outset that I am satisfied that the primary judge was correct in his conclusion that an investigation was conducted by the Commission as from late October or in early November 1994. In my view, the fact that the investigation arose out of and was conducted in conjunction with the investigation of Freeman by the Victoria Police does not have the consequence that there was never an investigation by the Commission.

In any event, it was said that on the evidence it was open to his Honour to form the prima facie view that if there was a Commission investigation, no further steps had been taken in respect of that investigation since the filing of charges which, as a matter of fact, had brought to an end any investigation by the Commission. In the circumstances it was contended that it was open to his Honour to infer, as he did, that in the absence of any evidence as to any subsequent investigatory step after the bringing of charges, the investigation had come to an end.

It was said that his Honour’s reliance on the Jones v Dunkel principle, in the manner discussed in Commercial Union Assurance Company, was clearly correct. Ultimately, it was contended that his Honour’s strong findings against the Commission and Corbett clearly satisfied the requirement of a prima facie case of deliberate abuse of statutory power as enunciated in Kearney with the consequence that his Honour did not err in ordering production.

It was also submitted by senior counsel for Freeman that the Court ought to refuse leave to appeal in any event as the application was out of time, there was no final determination of any issue that affected the substantive rights of the Commission or Corbett, his Honour’s decision was not wrong and no substantial injustice would result if leave were refused: see Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397.

Did the Primary Judge Err?

The central issue for determination on Freeman’s motion was whether the investigation came to an end after the bringing of the charges against Freeman. It is clear on the evidence that after the bringing of the charges no further investigatory steps were taken by officers of the Commission until the order of the Magistrate was made to return the 168 forms to Freeman. However, that is not determinative of the issue. The real questions are whether, in the context of the relevant statutory scheme, the obtaining of a search warrant and the seizure of the forms pursuant to it to ensure the retention of the 168 forms for the purpose of Freeman’s prosecution:

· was an exercise of the Commission’s investigatory power under Part IID of the Health Insurance Commission Act; and

· was an exercise of that power in connection with the Commission’s investigation of Freeman pursuant to the authority issued under s 8L(1) of that Act.

In the first instance, the issue of whether an investigation under Part IID of the Health Insurance Commission Act was at an end when charges were brought in respect of the relevant offences being investigated, involves consideration of the relevant statutory provisions. As pointed out above, in a case such as the present, the determination of whether an act is in connection with an investigation requires a “value judgment about the range of the statute”.

The relevant provisions in the Health Insurance Commission Act do not provide expressly for the investigatory power under s 8Y to seize evidential material to be at an end after the laying of charges. The Act is silent on that issue. The wide definition of evidential material in s 3, being “a thing relevant to a relevant offence”, clearly implies that such material remains relevant at least until a conviction or acquittal in respect of the relevant offence. As was pointed out by Sir Donald Nicholls V-C in Morris v Director of the Serious Fraud Office [1993] Ch 372 at 381, compulsory investigative powers exist to facilitate the discharge by a statutory authority of its statutory investigative functions and are exercisable only for that purpose. However, his Lordship also pointed out that information (and I would add material) obtained in the exercise of those powers may be used for purposes reasonably incidental thereto and such other purposes as are authorised by the statute. Clearly, retention and use of the forms seized in the present case for the purposes of a prosecution lies at the heart of the purpose of the investigatory power.

Further, there is nothing in the nature of a criminal investigation as such that suggests that it ceases upon charges being brought. It could be expected to be common place, both before and after the laying of charges, that matters arise which require further investigation. For example, it could transpire in the course of a committal hearing that exculpatory evidence is given which suggests an innocent explanation for the conduct of the accused. It would be within the scope of an investigatory power for the investigatory agency to carry out further investigations in order to determine whether the evidence is properly to be regarded as exculpatory.

The paradigm of material relevant to an offence would be material relied upon as evidence establishing or tending to establish the commission of that offence. The signed but uncompleted medicare assignment forms appear to fall within that category.

Accordingly, examining the matter with reference only to the language of the Act and without the assistance of authority, it seems to me that a search warrant issued, after charges are laid, for the purpose of preserving evidential material in respect of relevant offences the subject of investigation could not be said to be a warrant issued otherwise than in connection with the investigation. The fact that the evidential material is being preserved for the purposes of a pending prosecution in respect of the relevant offences does not alter that conclusion.

The question that remains to be determined is whether the investigation was being conducted by the Commission in the performance of its functions (see s 8L(1)). It was contended on behalf of Freeman that:

· the Commission’s investigatory powers were circumscribed by s 8L(1) which required that the investigation must be conducted in pursuance of the Commission’s functions under the Act;

· the relevant function for the purposes of the present case was the general investigatory function provided for under reg 3(2)(c) of the Regulations;

· reg 3(2)(c) provides that where an investigation discloses there is sufficient evidence to warrant a prosecution, the Commission may refer the case investigated and the information obtained in the course of the investigation to the Australian Federal Police or the DPP.

Accordingly, so it was said, reg 3(2)(c) discloses a clear statutory intention that the Commission’s investigation is at an end upon a referral of the matter for charges to be laid.

There is some force in the submission that the Commission’s investigatory function is at an end after a referral under reg 3(2)(c). The regulation implies that the Commission’s investigatory process is at an end upon a referral which would occur before any charges are brought. If further investigatory steps are required they may be taken by the Australian Federal Police. In that regard s 13 of the DPP Act specifically empowers the DPP to seek investigatory assistance from the Australian Federal Police when the DPP is considering instituting, taking over or carrying on a prosecution under federal law or has instituted, taken over or is carrying on such a prosecution. However, it is unnecessary to decide this point in the present case because as yet, there has been no referral by the Commission under reg 3(2)(c) or otherwise. For reasons peculiar to this case, the Health Insurance Act prosecution was instituted and has to date been conducted by an officer of the Victoria police in conjunction with the prosecution of the State charges. The prosecution is at the committal stage. It remains to be determined whether Freeman will be committed to trial by the Magistrate in respect of the offences with which he has been charged under the Health Insurance Act. In the event that Freeman is not committed to trial, nothing in the Health Insurance Commission Act would appear to prevent the Commission from seeking to investigate the matter further and to do so at least to the stage where the matter might be referred to the Australian Federal Police or the DPP under reg 3(2)(c). Even if Freeman is committed for trial, the DPP may still take over the prosecution of the charges under the Health Insurance Act: see ss 9(3) and 9(5) of the Director of Public Prosecutions Act 1983 (Cth) (“the DPP Act”). Whilst those steps remain theoretical possibilities, the investigatory function under reg 3(2)(c) would appear to continue at least until a referral has occurred or the possibility of such a referral no longer exists.

Accordingly, prima facie, there is nothing about the nature of an investigation under Part IID of the Health Insurance Commission Act or in the operation of any of the relevant statutory provisions that compels the conclusion in the present case that the investigation was complete and at an end when the charges were brought, or that the obtaining of a search warrant and the seizure of documents pursuant to it after the charges were brought, are not in connection with an investigation under Part IID.

One problem in the present case appears to have been an unwarranted assumption made by the parties in their submissions to the primary Judge that there has been a use of federal power to secure evidence to assist a “State prosecution”. Although the prosecution of the relevant offences is by a State police officer in a State Court, it is a prosecution of an offence under federal law, which is specifically brought under the authority of s 13 of the Crimes Act 1914 (Cth). Judicial power is attracted in relation to a matter when charges are laid: see James v Robinson (1963) 109 CLR 593 at 606. The committal proceeding is the first step in the curial process: see R v Murphy (1985) 158 CLR 596 at 616. Federal jurisdiction in the matter the subject of the prosecution is conferred on the State Court in respect of the trial of summary and indictable offences and examination and commitment for trial on indictment under s 68(2) of the Judiciary Act 1903 (Cth). Accordingly, the prosecution involves the exercise of federal jurisdiction in the State Court. There is nothing in the Health Insurance Commission Act that suggests that the exercise of investigative power for the purposes of assisting such a prosecution is an improper purpose, provided that the required statutory conditions have been fulfilled.

For the above reasons in my view his Honour erred in concluding that, as a matter of fact, the search warrant was not obtained in connection with an investigation being conducted by the Commission in respect of Freeman. Although the investigation had lain dormant after the bringing of the charges, in my view that investigation was re-activated by the requirement to secure the 168 medicare forms. I infer, at least on a prima facie basis, that the steps taken to do so were intended to be taken in connection with the ongoing investigation of Freeman by the Commission. Further, even if reg 3(2)(c) operated in the manner contended by Freeman with the consequence that the investigatory power might properly be regarded as being at an end, at the latest, when charges are brought in respect of the offences referred to in reg 3(2)(c), there is no evidence that Corbett or Hannan was aware of, or even considered the existence of such a limitation on the Commission’s investigatory powers. Accordingly, the prima facie requirement for some evidence of a deliberate abuse of power is absent.

For the above reasons the primary basis upon which the order for production was made by his Honour has been shown, as a matter of fact, to be wrong on the basis of the evidence before the Court at that time. On that evidence the requisite prima facie case of a deliberate abuse of statutory power had not been made out. It may well be that further evidence emerges that changes that situation but that is not relevant at this stage.

However, the conclusions I have reached do not finally resolve the issues raised by the application for production. I have proceeded thus far by having regard to the facts in the context of the relevant statutory provisions, but without reference to authority in relation to the effect of the bringing of charges on a compulsive statutory investigatory power conferred in general terms in respect of the subject matter of the charges. Unfortunately, this aspect of the matter received little attention in the parties’ submissions before his Honour and on the application for leave to appeal but is obviously relevant to the proper construction of s 8Y(1) and to the determination of the ambit of the Commission’s investigatory power, particularly under reg 3(2)(c).

The courts have considered the effect of the bringing of charges on a statutory investigatory power in at least two inter-related contexts. The first relates to whether, as a matter of construction, a compulsive investigatory power conferred in wide terms should be narrowly confined to terminate upon the bringing of charges on the basis that such a power is not intended to be conferred for the purpose of gathering evidence for use in a current criminal proceeding. The second relates to whether the use of administrative power after charges are brought is calculated to interfere with the exercise of judicial power.

Subject to any question arising as a result of the separation of powers under the Commonwealth Constitution, the trend of recent authority has been not to regard or interpret general investigative powers conferred by statute as being terminated upon the bringing of charges: see Smith v Director of Serious Fraud Office [1992] 3 All ER 456 at 474-475 per Lord Mustill (with whom the other members of the House of Lords agreed); Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 per Mason CJ and Toohey J at 506-507, Brennan J at 516-517 and McHugh J at 557-558. However, a contrary view was expressed by the minority in that case (Deane, Dawson and Gaudron JJ) who, in discussing this issue at 535-537, stated that they would require clear language or a clear implication before construing a statutory power “as empowering a prosecutor to obtain compulsorily from the defendant, after a prosecution has been commenced, the evidence which it requires to discharge the onus of proof upon it to prove its own case”.

However, EPA v Caltex concerned State investigatory power conferred under State legislation. As a result of the doctrine of the separation of powers under the Constitution, an investigative power conferred in general terms under federal legislation has, as a matter of construction, been treated as exhausted and at an end upon the bringing of charges in respect of the matter being investigated: see Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 379-380 and Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333. See also Brambles Holdings Ltd v Trade Practices Commission (1980) 32 ALR 328 at 332-335 per Franki J. However, there is a real issue as to whether such a principle applies to a power to require production of documents to preserve evidential material. In EPA v Caltex, which concerned a notice to produce documents served under s 29(2)(a) of the Clear Water Act 1970 (NSW), Brennan J (at 516-517) explained the issue arising in that context as follows:

“One further argument against the enforcement of the s.29(2)(a) notice should be mentioned. When an investigative power to require the giving of information is conferred by statute, the power will ordinarily be construed as exhausted when criminal proceedings to which the information relates have been commenced and are pending. That is because the power is understood to be conferred for the purpose of the performance of the administrative function of determining whether proceedings should be instituted. The reason why a restrictive construction is given to a statute creating such a power is, in my opinion, that a power to compel a person (whether natural or corporate) to give testimony of facts relating to an offence with which that person stands charged is wholly inconsistent with an accused’s right of silence at the pending trial. The statute is read down to protect the right of silence. But that reason has little cogency if it be applied to a statutory power to require the production of documents which speak for themselves and which, if the statutory power were exhausted, could be searched for and seized under a warrant. As s.29(2)(a) relates only to the production of documents, there is no occasion to import the principle in cases such as Melbourne Steamship and Hammond which restrict the exercise of a power to require information so that an accused is under no obligation to state facts relevant to the issues to be tried.” (Footnotes omitted)

His Honour then observed at 517-518:

“A final question relating to the s.29(2)(a) notice should be considered. Was the use of the notice an abuse of the process of the Land and Environment Court? There is no abuse of a court’s process in a party’s taking advantage of a legitimate means of obtaining evidence to be used in pending litigation. If the documents to be produced pursuant to the notice had been seized under a search warrant, it could not be suggested that the use of the search warrant was an abuse of process. Nor can the service of the notice under s.29(2)(a) be so described.”

The question of the ambit and scope of the investigatory power under Part IID of Health Insurance Commission Act, and in particular s 8Y(1), is ultimately a question of construction which involves careful consideration of the relevant statutory provisions (including ss 8L(2), 8Y(1) and reg 3(2)(c)), the Huddart Parker line of authority and the conflict between the approach of Brennan CJ and the minority in EPA v Caltex. It is unnecessary to resolve these issues of construction on the present application. If, as a matter of construction, the power under s 8Y(1) is found to have been exhausted upon the bringing of charges on the basis of the Huddart Parker line of authority, then the absence of power to issue the warrant will invalidate it. No question of abuse of power, let alone deliberate abuse of power, needs to arise. In any event, even if abuse of power is pursued, as I have already observed, the requisite prima facie case of deliberate abuse of power has not been made out on the evidence before the primary Judge, even if the construction question were resolved adversely against the Commission and Corbett.

It is also unnecessary to consider the associated issue of interference with the judicial power: see Brambles Holdings Ltd at 338-341, Deputy Commissioner of Taxation v De Vonk (1995) 133 ALR 303 at 325-326, and Grollo v Bates [1994] 53 FCR 218 at 242-243 per Einfeld J and the cases there discussed. That issue, although raised obliquely by the improper purpose argument, was not the subject of submission. Further, it runs into the same difficulty that arose in EPA v Caltex as the search warrant power appears to be analogous to the power of the Magistrates’ Court to issue a witness summons, in respect of the relevant documents, under s 43 of the Magistrates’ Court Act 1989 (Vic) to which resort has not been made; cf Marcel v Commissioner of Police [1992] Ch 225. Thus, the element of obtaining an advantage which could not be obtained by the court’s processes may be absent: cf Brambles at 338.

For the above reasons I am satisfied that the primary judge has erred in fact and in law in ordering production of the privileged documents on the grounds set forth in his Honour’s reasons for judgment.

The Director of Public Prosecutions Act 1983 (Cth)

Freeman also contended before the primary Judge that irrespective of the abuse of power issue, no privilege existed in any event because in the present case the giving of legal advice by the DPP, or any legal officer in the employ of the DPP on his behalf, was ultra vires the powers of the DPP under the DPP Act. It was said to be ultra vires on the basis that s 9(11) of the DPP Act operates to limit the power of the DPP to giving legal advice to an authority of the Commonwealth only where it is a party to a proceeding as set out in the sub-section. It was then said that as the giving of the advice in the present case was to the Commission and Corbett when neither was a party to any relevant proceeding, the giving of the advice was beyond power and therefore not protected by legal professional privilege.

The Commission and Corbett contended that the giving of legal advice in connection with an investigation by a Commonwealth agency or authority of suspected offences under federal law was a power of the DPP and his legal officers which was incidental and conducive to the functions conferred on the DPP pursuant to the DPP Act. It was said to be both a necessary incident of and conducive to the exercise of those functions for the DPP to receive instructions from time to time and give legal advice to federal investigative agencies in respect of offences under federal legislation which might be prosecuted or taken over by the DPP, irrespective of whether charges have already been brought. It was also said that in any event, in accordance with the decision of the Full Court in Grofam Pty Limited v Australia and New Zealand Banking Group Limited (1993) 45 FCR 445 at 456, if the client (ie the authority or its officer) receiving the legal advice genuinely believed that the legal officer of the DPP giving advice was entitled to do so, then irrespective of whether the officer was acting ultra vires, the advice was still protected by legal professional privilege.

Although I have concluded that Freeman has failed on the abuse of power point, if his contentions in respect of the DPP Act are correct and those of the Commission and Corbett are rejected, Freeman may be entitled to the order for production made by the primary judge on the ground that the relevant documents are not protected by legal professional privilege.

Section 5 of the DPP Act establishes the Office of the DPP which consists of the DPP and members of the staff of the Office who are under the control of the DPP. It is clear from the structure of the DPP Act that the DPP’s authority and conduct are confined to the functions and powers set out in the Act.

Section 6(1) of the DPP Act provides for the functions of the DPP to include the institution and carrying on of prosecutions of offences against Commonwealth law: see s 6(1)(a), (b), (c), (d) and (e). Section 6(2) provides that in addition to the functions in s 6(1) the functions of the DPP include functions conferred on the DPP under any other Commonwealth law. As stated above, it is a function of the DPP and of the Australian Federal Police to receive a referral from the Commission of cases investigated by the Commission where there is sufficient evidence to warrant a prosecution pursuant to 8E of the Health Insurance Commission Act and reg 3(2)(c) of the Regulations. Section 6(1)(n) provides for it to be a function of the DPP:

“to do anything incidental or conducive to the performance of any of the functions referred to in paragraphs (a) to (m) and in subsection (2).”

It is to be observed that the use of the word “conducive” (meaning contributive or helpful: see the Macquarie Dictionary) gives the sub-section great amplitude.

The operation of s 6(1)(n) was considered in the Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 at 593-597. In that case, the Court of Appeal was required to determine whether bringing contempt proceedings was a function or power which was incidental to the performance of the DPP’s function of instituting and carrying on proceedings in respect of certain offences. The Court (at 597) considered that s 6(1)(n) contained a special power, rather than a function, to do what was incidental to the functions conferred under other sub-sections and in doing so, extended the scope of the power the DPP otherwise had. The Court said:

“It is of the essence of an incidental power - whether implied or expressly conferred – that it extends the scope of the power to which it is incidental.”

Applying similar reasoning it would seem to be incidental or conducive to the DPP’s function of prosecuting, carrying on or taking over proceedings, including considering prosecuting, carrying on or taking over proceedings, to give legal advice to any Commonwealth authorities or agencies involved in the investigation of matters which are likely to be the subject of such proceedings, irrespective of whether the proceedings are prospective, imminent or actual. The reasoning applies with particular force to a matter being investigated by the Commission under reg 3(2)(c). For example, it would clearly be “conducive” to the better fulfilment of the prosecutorial functions of the DPP, for advice to be given to an investigative agency to ensure evidential material being gathered by it for the purpose of a prosecution which is intended to be carried on by the DPP, is being gathered lawfully.

It is difficult to conceive of any reason why parliament would intend the power of the DPP to give legal advice to an authority of the Commonwealth only to arise when the authority is a party to a proceeding. Heerey J considered this question in Grofam Pty Ltd v Australia and New Zealand Banking Group Limited (1993) 43 FCR 408. His Honour, in considering advice given by the DPP about possible criminal liability, said at 413 that it was incidental or conducive to the performance of the DPP’s function to institute proceedings for offences under federal law:

“…for the DPP to give the advice sought by the AFP and ATO since they were engaged in an investigation of a kind which was necessary, or at least likely to be of assistance, for any such future proceedings.”

However, it is important to note that the power to give legal advice in any particular case only arises under s 6(1)(n) when the advice is incidental or conducive to a function of the DPP. In order to determine whether that criterion is met in a particular case it will usually be necessary for some consideration to be given to the facts of the case.

Notwithstanding the generality of s 6(1)(n), reliance is placed by Freeman on s 9 of the DPP Act which specifically sets out the general powers of the DPP in relation to the prosecution and carrying on of proceedings. In the Australian Broadcasting Corporation case the Court (at 594) said of s 9 generally:

“In our view the proper construction of the Act is that s 9 deals expressly with powers in so far as it has been deemed necessary or advisable to particularise further some of the matters described as functions in s 6 but that it otherwise assumes, correctly, that the appropriate powers are vested in the Director by virtue of the functions conferred upon him.”

The Court did not appear to consider s 9(11) which was enacted by Act No 88 of 1986. The sub-section provides:

“Where an authority of the Commonwealth is a party to a proceeding in respect of a matter:

(a) that has arisen out of or is connected with the performance of any of the functions of the Director; or

(b) that may result in the performance by the Director of such a function;

the Director, or a person who is entitled to represent the Director in proceedings referred to in sub-section 15(1), may act as counsel or solicitor for that authority.”

It is argued by senior counsel on behalf of Freeman that the specificity of the sub-section is such that it sets out, exhaustively, the circumstances in which the DPP may act as counsel or solicitor for an authority and contains an implied prohibition on the DPP acting as counsel or a solicitor for an authority in any other circumstances. In particular, it is said that unless the authority is a party to a proceeding in respect of a matter as set out in the sub-section there is no power in the DPP, or a person who is entitled to represent the DPP, to act as counsel or solicitor for that authority. Reliance is placed in support of that submission on the decision of the Full Court in Grofam, on appeal from Heerey J. After considering the relevant statutory provisions and concluding that, as a matter of substance, ss 6(1)(n) and 9(11) are both empowering provisions in Grofam, the Court said at 452:

“Having regard to the functions of the DPP, it would be usual and expected for legal advice to be given in aid of those functions to an authority of the Commonwealth, notwithstanding that the authority was not a party to proceedings in the circumstances specified in s 9(11). Sections 6(1)(n) and 9(11) are on their face repugnant and the rule that the special power prevails may well apply. This is not a matter, however, upon which we are required to express a final view, because of the decision which we have reached on this motion for leave. However, if the learned trial judge was correct in his view that s 9(11) was inserted for more abundant caution and is not to be construed so as to prevent the general provisions of s 6(1)(n) being called in aid to empower the giving of legal advice in respect of the DPP’s other function then, assuming par (n) is an empowering provision, it may be that this matter is not properly resolved solely as a matter of statutory construction.”

After referring to the facts of Grofam and in particular to the fact that at the time legal advice was given there was no proceeding to which the Australian Tax Office was a party, the Court said at 453:

“As we cannot identify any function of the DPP to which the giving of legal advice in such circumstances would be incidental we doubt whether the DPP has any power, even assuming that s 6(1)(n) is an express incidental provision, to give legal advice to the ATO in any of the circumstances just described. Because of this difficulty we preferred to refuse leave on the basis of our determination of the second issue raised on this application, namely, whether, assuming that there is no power in the DPP to give legal advice in the circumstances here, legal professional privilege attaches to the legal advice and communications in question.”

Their Honours did not find it necessary to decide the question of power as, even assuming there was no power in the DPP to give legal advice where there was no proceeding, legal professional privilege was found to exist. The Court arrived at that conclusion on the ground that the authorities in question, being the Australian Tax Office and the Australian Federal Police, had approached the DPP in the course of an established practice and in circumstances where the Court inferred that the relevant agencies had the belief that the DPP was entitled to give that advice. Accordingly, as a matter of policy, the privilege was upheld: see Grofam at 455-456.

Heerey J at first instance approached the apparent repugnance between s 6(1)(n) and s 9(11) somewhat differently. His Honour said at 413:

“I am satisfied that up until the issue of the warrant (and thereafter) the ATO and the AFP were in substance in the position of clients of the DPP. They were seeking the DPP’s legal advice as to matters arising in the investigation of possible criminal offences. Acceptance of the applicants’ argument to the contrary would mean that the AFP and ATO would in this investigative phase be confined to such legal advice as they had in-house, or could be obtained from the private legal profession, because Parliament had intended to prohibit them from seeking advice from the very body which Parliament itself has established as the independent and expert authority for prosecution of breaches of the criminal laws of the Commonwealth. I would not impute such an unlikely intention to Parliament unless clear language in the statute compelled that conclusion. Such is not the case.”

In Grofam, Heerey J and the Full Court did not appear to have been referred to the Explanatory Memorandum for the amending Bill and, as a consequence, no reference was made to the circumstances in which s 9(11) was introduced into the Act. However, in the present matter senior counsel for the Commission and Corbett relied upon the Explanatory Memorandum for the Director of Public Prosecutions Amendment Bill 1986 which amended s 9, in particular, by introducing s 9(11). The amendment was explained as follows:

“This clause amends section 9 of the Principal Act and provides that the Director (or any person entitled to represent the Director) may act as counsel or solicitor for an authority of the Commonwealth where that authority is a party to a proceeding in respect of a matter –

(a) that has arisen out of or is connected with the performance of any of the functions of the Director; or

(b) that may result in the performance by the Director of such a function.

The purpose of the amendment is to enable the Director to act on behalf of persons who may be the subject of civil proceedings in the circumstances described. An example of such a situation is where the issue of a search warrant has been challenged and the relevant informant is the subject of civil proceedings.”

The Explanatory Memorandum, to which reference may be made under s 15AB(2)(e) of the Acts Interpretation Act 1901 (Cth), is significant. Plainly, the purpose of the amendment was to put beyond doubt the standing of the DPP to act as solicitor or counsel for an authority or an informant in a court proceeding in the circumstances set out. It did not appear to be concerned with the associated subject of legal advice as such. In my view, for the reasons already expressed, prior to the enactment of s 9(11) the DPP, and legally qualified persons in the Office of the DPP were empowered under the incidental power in s 6(1)(n) to give legal advice sought by Commonwealth authorities or agencies engaged in the investigation of offences against Commonwealth laws for which the DPP would or might (as a real rather than theoretical possibility) in due course bear responsibility for prosecuting.

The Explanatory Memorandum makes it clear that the enactment of s 9(11) was not intended in any way to cut down, interfere with or otherwise limit that power. The sub-section was introduced solely for the purpose of enabling the DPP to act on behalf of authorities, agencies or relevant individuals in civil proceedings and appeared not to be intended to limit the DPP’s powers to give advice in respect of the conduct of prospective or actual criminal proceedings. It was clearly the intention of the legislature that there be no repugnance between ss 6(1)(n) and 9(11). Indeed, when the purpose of the amendment is explained in the manner set out above and regard is had to ss 6(1)(fa), (g) and (h) which relate to functions of the DPP in relation to civil proceedings, it seems that s 6(1)(n) would be intended to operate in conjunction with s 9(11) to ensure that legal advice could be given to an authority both before or after it became a party to a proceeding. In my view, the various provisions of ss 6 and 9 can work quite harmoniously if s 6(1)(n) is seen to be conferring a power, additional to those conferred elsewhere, which is incidental or conducive to the functions of the DPP: see ABC at 594.

For the above reasons, with one qualification, I am in general agreement with the views expressed by Heerey J in Grofam in relation to the DPP’s powers to give legal advice to a Commonwealth agency or authority as the DPP’s client and do not share the doubt expressed on that issue by the Full Court in Grofam and also by the primary judge in the present matter.

The qualification is that in any particular case, the function to which the legal advice is incidental or conducive must be identified. Contrary to the view held within the DPP’s office, the DPP is not empowered under the DPP Act to give legal advice, if and when sought, to any Commonwealth authority merely because it is investigating the possible commission of offences under Commonwealth law. Before the pre-condition in s 6(1)(n) is met there must be some nexus between the investigation being conducted by the authority and a statutory function of the DPP. The nexus must be something more than a mere theoretical possibility that the DPP might institute, carry on or take over a prosecution at some future date. The facts of the particular case or the nature of the alleged offence must, at the very least, establish that the possibility of the DPP becoming involved in a prosecutorial function is a real one. A course of conduct of past referrals of similar matters to the DPP or evidence of an intention to refer the particular matter to the DPP for prosecution may suffice. Ultimately, each case will depend on its own facts.

The requirement of a nexus gives rise to a particular difficulty in the present case. There is no evidence that the DPP had any role or was expected to have any role in the future conduct of Freeman’s prosecution. Whilst it is possible that at some time in the future the DPP might exercise his power to take over the prosecution under ss 9(3) or 9(5) of the DPP Act, or that the Commission might refer the matter to the DPP under reg 3(2)(c), such steps were little more than a theoretical possibility when Corbett sought legal advice from Hannan. On the evidence before his Honour, the prosecution of the relevant offences was by a State police officer and, whilst conducted with the assistance of the Commission, the prosecution had not involved the DPP nor were there any circumstances suggesting any future involvement of the DPP in the performance of any of the functions set out in ss 6(1) or (2) of the DPP Act.

The view, within the DPP’s Office, that the DPP has power to give legal advice was explained in an affidavit sworn by Mr Pedley (“Pedley”), a Deputy Director in the Office of the DPP, as follows:

“The DPP does not have an investigatory function. Commonwealth Departments and Agencies have been advised that the DPP is available to provide legal advice to investigators investigating criminal offences. It is a regular and consistent practice of the DPP to do so. Particularly in large and complex criminal investigations it is common for the DPP to give legal advice to investigators on request at an early stage of the investigation. Investigators from Commonwealth Departments and Agencies have been encouraged by the DPP to consult the DPP for the purpose of obtaining legal advice before applying for a search warrant or other compulsory power in the course of a criminal investigation. Commonwealth Departments and Agencies have also been advised by the DPP that the DPP is able to provide legal advice if needed where a Department/Agency is conducting an investigation for the purpose of supporting civil or administrative proceedings if it is possible that criminal charges may be laid.

The view taken by the former Director of Public Prosecutions, Michael Rozenes QC, and accepted within the office, is that paragraph 6(1)(n) of the Act enables the DPP to give legal advice to a Commonwealth authority on issues arising in the investigation of an alleged criminal offence. The former Director was aware of the more limited view of the DPP’s function/powers expressed by the Full court of this Honourable Court in Grofam Pty Ltd and Others v Australia and New Zealand Banking Group Ltd and Others (1993) 45 FCR 445 in forming that view.”

For the reasons set out above, the view taken by the DPP and his Office does not accord with the requirement in s 6(1)(n) that there be a nexus between the legal advice and a function of the DPP under the DPP Act. As the present case demonstrates, there may be many cases involving breaches of Commonwealth law where the prosecution is not instituted or intended to be instituted or taken over by the DPP. In such cases the mere fact that a Commonwealth authority is investigating breaches of Commonwealth law is insufficient to entitle the DPP to give legal advice to that authority. It is relevant to observe that the limitations imposed by the Act upon the powers of the DPP arise from the carefully defined functions and powers of the DPP which were clearly designed to ensure the independent status of the DPP and his or her Office. In general, Commonwealth authorities are entitled to seek legal advice in-house, from the Australian Government Solicitor, from the private profession and, if the nexus required by s 6(1)(n) is satisfied, from the DPP.

If it is regarded as desirable that the DPP have a general entitlement to give legal advice to Commonwealth authorities investigating the commission of offences under Commonwealth law, then that is a matter for Parliament. It is sufficient for present purposes to say that the DPP Act does not confer such a power on the DPP.

Accordingly, on the evidence before the primary judge, I am satisfied that the requirement of a nexus as outlined above was not met and that the DPP was acting ultra vires in giving the legal advice given by Hannan to Corbett.

However, that conclusion does not resolve the issue. The evidence in the present case establishes that legal advice was sought by Corbett from the DPP in much the same circumstances as legal advice was sought by officers of the Australian Tax Office from the DPP in Grofam. It is unnecessary to set out the affidavit material in full, but the affidavit sworn to by Pedley discloses that it is a regular and consistent practice of the DPP to be available to Commonwealth Departments and Agencies to provide legal advice to investigators investigating criminal offences. Pedley also deposed to the fact that the DPP at the time was of the view that notwithstanding the decision of the Full Court in Grofam, s 6(1)(n) enabled the DPP to give legal advice in those circumstances. It was in accordance with that practice that the legal advice in question was given. Corbett, who received the legal advice, gave evidence as to the manner in which he sought legal advice from the DPP. The advice was sought by Corbett in the usual and ordinary course after being advised by the Commission’s Victorian Manager to do so. Hannan was stated by Corbett to be “the Commission’s regular legal adviser on matters relating to investigations and prosecutions”. There is no suggestion in the evidence that Corbett was of the view that there may have been any problem whatsoever with the power of the DPP to give that advice in the present case. The list of documents relied upon discloses that the communications in question occurred in the normal course of Corbett seeking legal advice and Hannan giving it. Hannan and Corbett were not cross-examined on their evidence.

In such circumstances it seems to me that irrespective of the views held within the DPP’s office, there is no basis for concluding that Corbett or any other responsible officer of the Commission was aware of the doubt raised by the Full Court in Grofam concerning the power of the DPP to give legal advice. The facts of the present case are indistinguishable from those in Grofam where (at 45 FCR at 456) the Court held that it was reasonable to infer that the relevant agencies held the belief that the DPP was entitled to give the legal advice given in that case. I have no hesitation in drawing the same inference in the present case.

Accordingly, in my view the challenge to legal professional privilege claimed by the Commission and Corbett on the ultra vires ground fails for the same reason for which it failed before the Full Court in Grofam.

The primary judge dealt with this issue briefly at the conclusion of his reasons for judgment. However, in view of the conclusion at which his Honour had arrived on the abuse of power issue, it was unnecessary for him to consider the correctness of the decision of Heerey J in Grofam. His Honour not only shared the doubts of the Full Court in Grofam but also expressed some doubt as to how a Commonwealth agency can claim, on behalf of the Commonwealth, that it was unaware of the lack of power of the DPP, as ultimately the privilege was that of the Commonwealth. In my view, the policy enunciated by the Full Court in Grofam was based upon whether the client entitled to claim privilege (being the relevant authority or its officer, in this case the Commission and Corbett), genuinely believed the DPP had an entitlement to give legal advice, rather than on any legal analysis of whether that agency was acting on behalf of the Commonwealth.

Conclusion

The Commission and Corbett have demonstrated that his Honour erred in finding that there was a prima facie case of deliberate abuse of statutory power. In these circumstances and in the light of my conclusions on the “ultra vires” issue, it must follow that the orders for production of the privileged documents were incorrectly made. Legal professional privilege is a substantive and fundamental right. In the present case I am satisfied that an order removing the privilege has been wrongly made. A substantial injustice would be suffered by the Commission and Corbett in the present case if they were ordered by a court to disclose privileged communications when they were under no legal obligation to do so. I am also satisfied that the present case involves important issues of principle which are appropriate for consideration by an appellate court. That is particularly so in relation to the issue of the power of the DPP to give legal advice which has now been clarified. In all the circumstances, it is my view that it is appropriate to grant leave to appeal and to allow the appeal, set aside the order of the primary judge and in lieu thereof make an order that the Freeman’s motion for production of privileged documents be dismissed with costs. The Commission and Corbett are entitled to their taxed costs of the application for leave to appeal and of the appeal.

It was submitted that the application for leave to appeal was out of time although it was conceded by senior counsel for Freeman that it was only out of time by two days and that no prejudice could be said to have been suffered. Having regard to the conclusions I have reached on the substantive matters, it seems to me that it is appropriate to grant the Commission and Corbett leave to appeal out of time.

I certify that this and the preceding twenty-nine (29) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices von Doussa, Carr and Merkel

Associate:

Dated:

Counsel for the Applicant:	Mr R Brett QC and Mr H Aizen

Solicitor for the Applicant:	Valos Black & Associates

Counsel for the Respondent:	Mr G T Pagone QC and Mr P J Hanks

Solicitor for the Respondent:	Australian Government Solicitor

Date of Hearing:	15 July 1998

Date of Judgment:	23 October 1998

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