Case: Gangemi v Australian Securities and Investments Commission [2003] FCA 494 ; (2003) 129 FCR 284
Outcome: considered
In Stockbridge v Ogilvie (1993) 43 FCR 244 examinees sought judicial review of a direction given by an inspector appointed by the Australian Securities Commission to exclude their lawyer. French J appeared to assume (at 254), without debate, that the right created by s 23(1) was conferred on the examinee's lawyer although it may be admitted that this is far from clear. In Macquarie Advisory Group Pty Ltd (rec apptd) v Australian Securities and Investments Commission (1999) 33 ACSR 106 at 108 [6] the parties, and Byrne J, assumed that the right was conferred on the examinee. In Gangemi v Australian Securities and Investments Commission [2003] FCA 494 ; (2003) 129 FCR 284 at 297 [38] French J assumed without discussion that the right was conferred on the examinee. 44 Bell requires the conclusion, with which I agree, that the right is at least conferred on the examinee's lawyer. It is an open question whether the right is also conferred on the examinee. The right referred to by Burchett J in Bell as the right to have the lawyer's right enforced does not appear, with respect, to have a textual foundation. The right assumed to be vested in the examinee in Gangemi and Re Macquarie Advisory Group was the right in s 23(1) itself rather than the right adverted to by Burchett J. 45 Only one judge (Sheppard J) has considered the matter in any detail. The statements by French J in Stockbridge and Gangemi do not appear to me to be intended to be taken as considered statements on the question and the statement by Byrne J is certainly not. 54 The opinion which matters is that of the inspector. The only issue for the Court is whether that opinion is held on reasonable grounds and in good faith. Once that threshold is passed, the fact that the Court might not have made the direction itself is of no moment because the state of satisfaction which expands the operation of s 22(1) into the domain of s 23(1) is that of the inspector and not that of the Court: cf. Gangemi v Australian Securities and Investments Commission [2003] FCA 494 ; (2003) 129 FCR 284 at 297 [39] per French J; Stockbridge v Ogilvie (1993) 43 FCR 244 at 255 per French J. 65 For completeness, it is to be noted that ASIC had a similar inference drawn against it for failing to put on evidence as to the decision-making process in Bell 32 FCR 517 at 525 per Lockhart J, 531 per Sheppard J and, arguably, at 533 per Burchett J. Further, such evidence was put before the Court in Macquarie Advisory Group Pty Ltd v Australian Securities and Investments Commission (1999) 33 ACSR 106 at 108 [8] per Byrne J and in Gangemi v Australian Securities and Investments Commission [2003] FCA 494 ; (2003) 129 FCR 284 at 290-291 [19] - [20] per French J. Whilst it is true that in both Gangemi and Stockbridge that the reasons of the inspectors were before the Court it is also true that those reasons were delivered contemporaneously with the direction. The significance of such evidence in the present case was obvious, therefore, not only because the Applicants explicitly signalled their intention to doubt the usefulness of the statement of reasons of 22 October 2008 but also from the course of authorities dealing with s 22(1). 71 That approach may, of course, require that confidential evidence be given about the relevant concerns in this Court. This was expressly contemplated in Bell by Lockhart J (at 32 FCR 521) and Sheppard J (at 32 FCR 532) both of whom indicated that the processes of the Court could be adapted to deal with the exigencies obtaining in such a state of affairs. Consistent with that observation French J received a confidential affidavit in Gangemi (at 129 FCR 290 [20]). 78 The question of whether the power in s 22(1) attracts a procedural fairness obligation has received little consideration. Sheppard J in Bell (32 FCR 516 at 532) thought that such an obligation did exist. Neither Lockhart nor Burchett JJ considered the issue. None of the decisions in Re Macquarie Advisory Group Ltd (33 ACSR 106), Stockbridge (43 FCR 244) or Gangemi (129 FCR 284) deals with the question.