Federal Court of Australia

Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 4 – examination orders) [2021] FCA 1237

ORDERS

THE COURT ORDERS THAT:

1.    A direction be made pursuant to s 23CQ(1) of the Federal Court of Australia Act 1976 (Cth) that the following persons appear for examination before the Court, on a date to be fixed, in relation to the topics identified in the annexure to the interlocutory application filed by the Fourth Accused, Deutsche Bank Aktiengesellschaft, dated 1 October 2021:

(a)    Ms Zoe Lonard;

(b)    Mr Jack Ducommun;

(c)    Mr Dean Cohen; and

(d)    Mr Robert Ghali.

2.    A direction be made that Mr Michael Taylor appear for examination before the Court, on a date to be fixed, in relation to the topics identified in the document referred to in order 1.

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

REASONS FOR JUDGMENT

WIGNEY J:

1    On 15 December 2020, the accused in this matter were committed for trial in this Court in respect of various offences against the Competition and Consumer Act 2010 (Cth). The committal proceedings, which were conducted in the Local Court of New South Wales by virtue of s 68 of the Judiciary Act 1903 (Cth), were long, drawn-out and unsatisfactory in certain respects. In the course of the committal proceedings, orders were made pursuant to s 82 of the Criminal Procedure Act 1986 (NSW) that some prosecution witnesses and some officers of the Australian Competition and Consumer Commission (ACCC) who had been involved in the investigation attend the committal proceedings to give oral evidence. A number of the accused have now applied for a direction pursuant to s 23CQ of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that four other officers of the ACCC, along with one of the ACCC officers who gave oral evidence at the committal hearing, appear for examination before the Court in respect of certain identified topics on a date to be fixed. The prosecutor, the Commonwealth Director of Public Prosecutions, does not oppose that course.

2    For the brief reasons that follow, the direction pursuant to s 23CQ of the FCA Act sought by the accused should be made.

3    Section 23CQ of the FCA Act provides as follows:

(1)    After the indictment is filed in the Court, the Court may direct a person to appear for examination before the Court or a Judge, the Chief Executive Officer, a Registrar, a District Registrar or a Deputy District Registrar of the Court if:

(a)    a party applies for the direction; and

(b)    the prosecutor has disclosed that the prosecutor proposes to call the person as a witness at a trial on the indictment; and

(c)    if the indictment was filed in the Court as a result of proceedings in which the accused was committed for trial—the person was not examined in those proceedings; and

(d)    the applicant satisfies the Court that it would be contrary to the interests of justice to proceed to trial without the person being examined.

(2)    The Court may make such orders as it thinks appropriate in the circumstances to give effect to a direction under subsection (1).

(3)    A direction under subsection (1) may permit either or both of the parties to examine the person named in the direction.

(4)    For the purposes of paragraph (1)(d), the absence of committal proceedings does not, of itself, mean it will be contrary to the interests of justice to proceed to trial without the person being examined.

4    It is readily apparent that the purpose of s 23CQ of the FCA Act is to essentially replicate the procedure followed in state trial courts of permitting the accused to cross-examine prosecution witnesses – usually those who for some reason were not examined at the committal stage – on a voir dire in the absence of the jury. That procedure, generally referred to as a “Basha inquiry”, after the decision in R v Basha (1989) 39 A Crim R 337 in which the procedure was first discussed at length at an appellate level, is considered to be an exercise of the inherent or implied power that a court has to control its own processes and avoid a miscarriage of justice.

5    The primary applicant for the directions in this matter is the fourth accused, Deutsche Bank Aktiengesellschaft. The other accused who have filed interlocutory applications seeking effectively the same relief are the first accused, Citigroup Global Markets Australia Pty Ltd, the fifth accused, Mr Michael Ormaechea, the sixth accused, Mr Michael Richardson, the seventh accused, Australia and New Zealand Banking Group Limited (ANZ) and the eighth accused, Mr Richard Moscati.

6    Deutsche Bank filed a detailed affidavit, affirmed by one of its solicitors, which explained the basis of its application. Affidavit evidence in support of the application has also been filed by Mr Moscati. Deutsche Bank also filed detailed and helpful written submissions in support of its application. Those submissions were adopted and in some cases supplemented by written submissions filed by the other accused who joined in the application.

7    It is unnecessary for me to refer at length to the evidence or submissions relied on by the accused in support of this application. It suffices to say that, having read the evidence and submissions, I am satisfied that the evidence establishes that the four requirements or pre-conditions in s 23CQ(1) of the FCA Act have been made out in respect of the four ACCC officers who did not give oral evidence at the committal hearing, namely Ms Zoe Lonard, Mr Jack Ducommun, Mr Dean Cohen and Mr Robert Ghali. Specifically, I am satisfied that: first, various of the accused have applied for a direction that those officers appear for examination before the Court; second, the prosecutor has now disclosed that those officers will be called as witnesses at the trial on indictment in this Court; third, the indictment was filed in this Court as a result of proceedings in which the accused were committed for trial, though the four officers in question were not examined in those committal proceedings; and fourth, it would be contrary to the interests of justice to proceed to trial without those four officers being examined.

8    It is unnecessary for me to say anything further about the first two requirements. As for the third requirement, I am satisfied by the evidence that the accused who have applied for the direction have provided a reasonable explanation for why the four ACCC officers in question were not the subject of applications pursuant to s 82 of the Criminal Procedure Act and were therefore not examined at the committal hearing. In short, that circumstance was largely a product of inadequate or late disclosure of certain material by the prosecutor and the unsatisfactory manner in which the committal proceedings were conducted generally. The prejudice to the accused which resulted from inadequate or late disclosure appears to have been conceded by the prosecutor at the committal stage. That concession was reflected in the fact that, prior to the conclusion of the committal proceedings, the accused were advised by the prosecutor that once the accused were committed for trial in this Court, the prosecutor would not oppose a direction being given by the Court under s 23CQ of the FCA Act in essentially the same terms as the direction now sought. It would appear that that concession was made so as to bring the committal proceedings to an end and thereby avoid the further delay and disruption which would have inevitably resulted had the accused applied for further witness examinations at the committal stage. That is what the accused would have almost certainly done but for the prosecutor’s indication at the time that there would be no opposition to the course now proposed.

9    As for the fourth requirement, I am satisfied that the accused who applied for the direction have demonstrated that they have a legitimate forensic purpose for examining the four officers in question in respect of the topics identified in the annexures to the interlocutory applications. Those topics, in broad terms, concern an aspect of the ACCC’s investigation and compilation of the brief of evidence against the accused, in particular the manner and circumstances in which the officers in question drafted and edited witness statements from critical prosecution witnesses who have received indemnities from prosecution. The evidence demonstrates why, in the particular circumstances of this case, the evidence of the witnesses in respect of those topics may be of considerable importance to the issues that may arise at the trial or in pre-trial applications.

10    The accused have also demonstrated that there is a serious risk that the trial may be unfair if they are not permitted to examine the officers in respect of the identified issues prior to the commencement of the jury trial. The accused should be given a fair opportunity to examine the officers in respect of the identified topics and related issues in the absence of the jury and before the commencement of the trial, essentially as a means of securing effective and fair prosecutorial disclosure. It would be unfair, in the particular and somewhat unique circumstances of this case, to expect or require the accused to explore the identified topics with the witnesses for the first time in the presence of the jury.

11    I am also satisfied that the topics upon which the officers will be examined are appropriately discrete and limited, that the examinations can be conducted efficiently and effectively within a confined period, and that there will be accordingly no interruption or delay to the anticipated commencement of the trial before the jury in May next year.

12    The fifth ACCC officer who the accused wish to examine is Mr Michael Taylor. Mr Taylor was examined during the committal proceedings. It follows that, strictly speaking, the accused are unable to satisfy the requirement in s 23CQ(1)(c) of the FCA Act in respect of Mr Taylor. I am nevertheless satisfied that the Court can and should make a direction in the nature of a s 23CQ direction in the case of Mr Taylor. That is so for a number of reasons.

13    First, I am satisfied that, like state supreme courts, this Court, as a superior court of record, has the implied power to avoid any risk of an unfair trial by, amongst other things, conducting a so-called Basha inquiry; that is, permitting certain prosecution witnesses to be examined before the Court prior to the commencement of the trial and in the absence of the jury, irrespective of the specific terms of s 23CQ of the FCA Act. While the need to make such an order has not previously arisen in this Court, the Court has the power to make such an order pursuant to the general power in s 23 of the FCA Act to make “orders of such kinds, including interlocutory orders … as the Court thinks appropriate” in matters which are otherwise within its jurisdiction: see also r 1.32 of the Federal Court Rules 2011 (Cth).

14    Even in the absence of that express power, the Court could in any event make such an order as part of its implied or incidental power to prevent abuse or frustration of its processes in relation to matters coming within its jurisdiction: Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623 (Deane J); see also 616 (Mason CJ), 618 (Wilson and Dawson JJ) and 620-621 (Brennan J). Such a power is “an inherent common law power of a superior court of law; it is a power that does not derive from statute but is intrinsic to the nature and structure of the court itself”: Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; [2018] HCA 53 at [256] (Edelman J). If the Court has the power to stay proceedings if the trial would otherwise be unfair, as it unquestionably does, it must also have the power to make orders which would prevent the risk of unfairness in the first place.

15    Second, Mr Taylor was examined at the committal in circumstances where it appears that there had not been complete or satisfactory compliance with the prosecutor’s duty of disclosure. Some important material was only disclosed to the accused after Mr Taylor’s examination was complete. Further potentially relevant documents were only obtained by the accused after the committal proceedings had been concluded when privilege claims in respect of some documents were successfully challenged in this Court: see Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd [2021] FCA 511 (White J). I am, in the circumstances, satisfied that the accused were not in a position to fully or properly examine Mr Taylor at the committal stage and that the accused have provided a reasonable explanation for why they should be given a further opportunity to examine him in the absence of the jury and before the commencement of the trial.

16    Third, for essentially the same reasons as those given earlier in respect of the four ACCC witnesses who were not examined at the committal hearing, the accused have demonstrated a legitimate forensic purpose for further questioning Mr Taylor in light of the material since disclosed by the prosecutor. The accused have also demonstrated that there is a serious risk that the trial may be unfair if they are not permitted to conduct a further examination of Mr Taylor in the absence of the jury and in advance of the trial. I again consider that it would be unfair to expect or require the accused to examine Mr Taylor further about his involvement or role in drafting and editing key witness statements, in light of the material disclosed or discovered following the evidence he gave in the committal proceedings, for the first time before the jury at the trial proper.

17    In considering whether the direction sought by the accused should be made I have, of course, also taken into account the fact that the direction is not opposed by the prosecutor. The position taken by the prosecutor in respect of this application was, in all the circumstances, entirely appropriate and commendable.

18    The parties also sensibly agreed that the interlocutory applications could be considered on the papers without the need for an oral hearing, unless the Court considered that there was a need for such a hearing. Given the unchallenged evidence, the detailed written submissions and the prosecutor’s consent to the course proposed, the applications were decided on the papers.

19    It should also be noted that the interlocutory application filed by Mr Moscati indicated that Mr Moscati sought to examine one of the witnesses, Mr Ghali, in respect of an additional topic to the topics identified in the interlocutory applications filed by the other accused. That topic was “any interaction between the [ACCC] and the Australian Securities and Investments Commission, including in relation to the documents that were the subject of the hearings in these proceedings on 27 May 2021 and 1 June 2021”. ANZ has also foreshadowed that it may seek leave to examine a witness or witnesses in respect of that topic.

20    The hearings referred to in that suggested topic involved a challenge by ANZ to legal professional privilege and without prejudice privilege claims that had been made in respect of certain documents which would otherwise have been required to be produced by the ACCC and the Australian Securities and Investments Commission (ASIC) in answer to subpoenas served on them by ANZ. That issue has now been determined: Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd (No 3 – privilege claims) [2021] FCA 1208. The without prejudice privilege claims were not upheld, though it is unlikely that ANZ, or any of the other accused, will have had an opportunity to thoroughly inspect the documents in question at this point in time.

21    The appropriate course in those circumstances is, at least at this stage, not to include the suggested topic relating to interactions between the ACCC and ASIC in the s 23CQ directions, but grant leave to the parties, in particular to Mr Moscati and ANZ, to apply to the Court to include that topic in the topics for examination, should they choose to do so, once they have had the opportunity to inspect the documents over which privilege had previously been claimed. The topics for examination will, in any event, be open to be revisited depending on further developments in the matter.

22    I should make two brief concluding observations.

23    First, the fact that the Court has considered it appropriate to make a direction under s 23CQ(1) of the FCA Act in this case should not be treated as a precedent or any indication that such directions will be made routinely or as a matter of course where an indictment is filed in this Court as a result of proceedings in which the accused were committed for trial. The circumstances of this case are somewhat unique. Each case must be considered on its own facts.

24    Second, the facts and circumstances of this case perhaps demonstrate the inappropriateness and inutility of complex federal prosecutions being subject to committal processes in state magistrates courts which are plainly not fit for purpose in respect of such cases. There is nothing in the FCA Act which requires that an indictment only be filed in this Court following committal proceedings. Nor is the holding of committal proceedings a necessary prerequisite to a trial on indictment: R v Butler (1991) 24 NSWLR 66 at 68. It is, of course, true that powerful statements have been made in the past in relation to the importance of committal proceedings in ensuring a fair trial: see for example Barton v The Queen (1980) 147 CLR 75. Those statements, however, were generally made in circumstances where extensive committal proceedings were the norm and the courts in which the trials were to be conducted either did not possess, or did not routinely exercise, or have the capacity to exercise, the extensive case management and pre-trial processes available in this Court in respect of trials by indictment. Those pre-trial processes include, but are certainly not limited to, s 23CQ of the FCA Act. There is nothing to stop a prosecutor from filing an indictment directly in this Court in circumstances where the Court has the capability and powers to efficiently and effectively case manage the matter and achieve all of the outcomes that could possibly be achieved in state-based committal proceedings.

25    Orders will be made in accordance with those sought in the interlocutory application filed by Deutsche Bank.

Associate:

Dated:    12 October 2021

SCHEDULE OF PARTIES