Case: Australian Securities and Investments Commission v Flugge [2008] VSC 473
Outcome: considered
Later factual exemplars of the application of the discretion described by Megaw LJ in Jefferson Ltd v Bhetcha and of the guidelines set out by Wootten J in McMahon v Gould abound. The most recent of these appears to be a judgment delivered last month by Robson J of the Victorian Supreme Court in Australian Securities and Investments Commission v Flugge [2008] VSC 473. That case is noteworthy for a number of reasons. Firstly, it exemplifies that an exercise of the discretion in question in a civil proceeding may be sought even where related criminal proceedings have not been instituted but are instead "on the cards", i.e. a "reasonable possibility". Secondly, it contains a reflective discussion of whether the guidelines stated in McMahon v Gould should continue to be applied in light of later High Court authority. Thirdly, there is to be found in it consideration of observations made by Finkelstein J of this Court concerning the danger of a civil court's making declaratory judgments or granting injunctive relief if a matter is likely to end up before a criminal court. 26 In Australian Securities and Investments Commission v Flugge , Robson J felt constrained, as had others before him, to suggest that an appellate court may wish to reconsider McMahon v Gould . Insofar as McMahon v Gould recognises the existence of a power which a court has to control proceedings in a civil action by the granting of a stay of those proceedings where the interests of justice so require, I respectfully doubt whether there is any general need for a reconsideration of that case. It is important not to elevate particular factual circumstances calling or not calling for the exercise of that power into statements of principle. It seems to me that Wootten J was not endeavouring to do anything other than to set out guidelines. I do not approach this matter on the basis that the occasions for the exercise of the power are closed. What is required is a balancing of the interests of the applicant and respondent in a civil proceeding having regard to any statutory context relevant to that civil proceeding and to any impending or prospective criminal proceeding. A separate but not unrelated consideration is whether the civil proceeding or at least its then prosecution might be regarded as an abuse of the process of the court. Such considerations will especially loom where the applicant in a civil proceeding is an emanation of the Crown and seeks declaratory relief and the imposition of pecuniary penalties in circumstances where a respondent is or is in jeopardy of facing criminal proceedings in respect of substantially the same conduct. I note that such a prospect particularly influenced Robson J in his suggestion that McMahon v Gould may need to be reconsidered by an appellate court. 38 The present case is nothing like Australian Securities and Investments Commission v Flugge where a conclusion that criminal proceedings against the defendants was a reasonable possibility was readily open having regard to recommendations made in a the report of a recently completed Royal Commission. The audit report does not recommend that a criminal proceeding or even a civil penalty proceeding be instituted. 39 Taking into account all of the considerations which I have mentioned, and balancing all of the public interests at large, it seems to me that, as matters presently stand, the case for even a temporary stay of the proceeding is neither compelling nor even persuasive. That is not to say that the granting of a stay is a remedy forever foreclosed to Burnett Water. Circumstances may change in which case it is at liberty again to bring an application. 40 The application should be dismissed. In the event of that occurrence, the Conservation Council did not seek any order as to costs other than that they be costs in the proceedings. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 12 December 2008 Counsel for the Applicant: Mr McGrath Solicitor for the Applicant: Environmental Defenders Office Counsel for the Respondent: Mr Clothier Solicitor for the Respondent: Allens Arthur Robinson Solicitor for the Intervener: Australian Government Solicitor Date of Hearing: 5 December 2008 Date of Judgment: 12 December 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1900.html