Case: Ricegrowers Co-operative Mills Ltd v Bannerman [1981] FCA 211 ; (1981) 38 ALR 535
Outcome: followed
parties referred to decisions of Full Courts of this Court on the construction of paragraph (f). The first of those decisions was Ricegrowers Co-operative Mills Ltd v Bannerman [1981] FCA 211 ; (1981) 38 ALR 535. In that case the Trade Practices Commission had issued a notice under s 155 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act ") requiring the appellant to furnish the Commission with certain information and to produce certain documents. Ricegrowers sought the provision of a statement of reasons for the decision to issue the notice under s 155. The Full Court held that paragraph (f) operated to render decisions, made under s 155 of the Trade Practices Act , to issue notices which required provision of information and the production of documents as decisions to which s 13 of the ADJR Act did not apply. Although all members of the Full Court were agreed as to the outcome of the appeal, they differed as to the construction of paragraph (f). In their joint judgment Bowen CJ and Franki J said (at 540-1) that: "In our opinion the basic limits in para (f) are to be found in the opening words which provide that decisions in connection with the institution of proceedings in a civil court or in connection with the conduct of proceedings in a civil court are outside s 13. We are only concerned with decisions in connection with the institution of proceedings in decisions that relate to the bringing of such proceedings or that may result in the bringing of such proceedings ... Paragraph (f) concludes with the words "in particular" indicating that the following four classes of decisions are encompassed by the broad opening words. The first and fourth sub-paragraphs are again of a broad and relevant nature. We read para (f)(iv) as excluding from s 13 decisions in connection with the investigation of persons for contravention of enactments and decisions under enactments requiring the production of documents and the giving of information. It would be difficult to find words which more clearly exclude from s 13 of the [ADJR] Act a decision to issue a notice under s 155 of the Trade Practices Act ." The other member of the Court, Northrop J, found it difficult to see how a decision to serve a notice under s 155 of the Trade Practices Act , which had been taken at a time when the Trade Practices Commission had formed no opinion as to whether to institute proceedings in a civil court or bring proceedings for the recovery of pecuniary penalties, could come within the opening provisions of paragraph (f). His Honour was, however, persuaded that sub-paragraph (f)(iv) operated of its own force to exclude decisions made under s 155 of the Trade Practices Act even when civil proceedings had not been instituted and there existed no certainty or probability that such proceedings would be instituted (at 547-8). The second case was Murphy v KRM Holdings Pty Ltd [1985] FCA 495 ; (1985) 8 FCR 349 in which a Full Court held that paragraph (f) did not apply to a decision to seize imported goods under s 203(2) of the Customs Act 1901 (Cth) ("the Customs Act "). Fox J (at 351) held that the provisions of sub-paragraphs (i) to (iv) had to be read subject to the opening words of the paragraph and that a decision to seize goods was not a decision in connection with the institution or conduct of civil proceedings or a decision related to, or one which might result in, the bringing of civil proceedings for the recovery of penalties. Pincus J (at 354) adopted a similar approach to the construction of para (f). His Honour said: "The second question in the case is whether the decisions fall within sub-par (f) and in particular within the opening expressions: "Decisions in connection with the institution or conduct of proceedings in a civil court, including decisions that relate to, or may result in, the bringing of such proceedings for the recovery of pecuniary penalties arising from contraventions of enactments...." The decisions to seize do not fit the general description of being "in connection with" the institution or conduct of any proceedings; the real argument was that they are caught by the more particular description after the word "including". Counsel for the appellants submitted that decisions to seize "may result in" the bringing of proceedings for recovery of the penalties set out in s 234(2). The words "result in" connote causation. To come within the expressions relied on, it must appear that the decisions to seize may cause the bringing of the proceedings mentioned. While it has to be conceded that the decisions to seize may form part of a causal chain which leads on to the institution of proceedings for penalties, one would not speak of the decisions to seize as in themselves bringing about that consequence." Beaumont J agreed with the reasons of Fox J and Pincus J. No mention was made, in any of the judgments, of the earlier Ricegrowers decision. In Telstra Corporation Limited v Australian Competition and Consumer Commission (No 2) [2007] FCA 493 ; 240 ALR 135 Bennett J was called on to determine whether the Australian Competition and Consumer Commission ("the ACCC") was required, by s 13 of the ADJR Act, to provide reasons for its decision to issue a competition notice to Telstra under s 151AKA of the Trade Practices Act . The purpose of such a notice was to give the recipient a warning that it was engaging in proscribed anti-competitive conduct. If the recipient of the notice, despite the warning, continued to engage in the conduct certain consequences might follow. These included the institution of a proceeding by the ACCC for recovery of a pecuniary penalty, actions for damages by third parties who had suffered loss or damage by reason of the anti-competitive conduct and other compensatory orders. Having referred to Ricegrowers and Murphy her Honour said (at 184) that: "There may be no correlative decision by the [ACCC] to institute pecuniary penalty proceedings ... following the issue of a Part A competition notice. Further, third parties will not necessarily issue proceedings to recover damages pursuant to ... the Act. Certainty of legal proceedings, however, is not necessary for a decision to fall within the broad terms of para (f) of Sch 2. Decisions which "relate to, or may result" in the bringing of proceedings in a civil court for the recovery of pecuniary penalties expressly are included in para (f) of Sch 2 to the ADJR Act. The issue of a Part A competition notice is a prerequisite to the bringing of proceedings in this Court for the recovery of pecuniary penalties for a contravention of the competition rule ... . The scheme of the Act expressly contemplates that such proceedings may result from the decision by the [ACCC] to issue a Part A competition notice. Were it not for the fact that such proceedings may result, the desired incentive for the carrier to cease the allegedly anti-competitive conduct would diminish significantly. Indeed, Telstra relies upon that very consequence of the decision in its submissions as to the requirements of common law procedural fairness. The [ACCC's] decision to issue the Competition Notice was a decision within the terms of para (f) to Sch 2 of the ADJR Act. It follows that the [ACCC] was not obliged by s 13(1) of the ADJR Act to furnish Telstra with a statement of reasons for its decision to issue that notice." Although her Honour was principally concerned with the nexus between a decision to issue a competition notice and proceedings which might be brought seeking the imposition of a pecuniary penalty it is to be noted that she was also satisfied that the necessary connection existed between the decision and third party proceedings which might be commenced to recover damages. Uninstructed by authority I would be disposed to hold, as Northrop J did in Ricegrowers , that the sub-paragraphs of paragraph (f) each provide for stand alone exemptions from the operation of s 13 of the ADJR Act. I am, however, bound by the majority decision in Ricegrowers and the decision in Murphy , to construe sub-paragraphs (iii) and (iv) within "the basic limits" imposed by the opening words of paragraph (f). This means that it is necessary to determine whether a decision to issue a warrant under s 130 of the Bankruptcy Act , which authorises the entry onto premises for the purpose of searching for and taking possession of property including documents, can be said to be a decision in connection with the institution or conduct of civil proceedings or a decision that relates to, or may result in, the bringing of civil proceedings for the recovery of pecuniary penalties for contravention of statutory provisions. A decision to issue a warrant permitting the search for and seizure of property (including books of a bankrupt) would not necessarily lead to the institution of civil proceedings against the bankrupt or anybody else. A decision as to whether or not such proceedings should be commenced would depend, in large part, on what was found when the seized property was examined. Nonetheless, Ricegrowers would support the conclusion that the decision to issue the warrant was covered by sub-paragraph (iii) and, possibly, sub-paragraph (iv). I say "possibly" because decisions in connection with the issue of search warrants are specifically dealt with in sub-paragraph (iii) and, although, in a loose sense, it may be said that search warrants can be used to require the production of documents, the language of sub-paragraph (iv) would, more naturally, apply to decisions to issue notices of the kind contemplated by s 155 of the Trade Practices Act and other equivalent provisions. Such notices do not authorise entry to premises for the purposes of searching for and seizing property. In Ricegrowers the majority held that paragraph (f) (iv), when read subject to the opening words of the paragraph, clearly excluded decisions to issue notices under s 155 of the Trade Practices Act from the reach of s 13 of the ADJR Act. This was so despite the fact that, at the time at which the decision to issue the notice was made, no decision had been taken as to whether civil proceedings should be instituted against the company to which the notice was directed or any other person. It is implicit in the majority judgment that it was sufficient that the notice was issued in the course of an investigation which might have led to the commencement of civil proceedings under the Trade Practices Act . The possibility was enough to bring the decision within the controlling words at the commencement of the paragraph. A decision to issue a notice which requires the production of documents and the provision of information is a step in an investigatory process which may or may not lead to the commencement of curial proceedings. The documents provided might provide evidence which might be deployed against a person in civil proceedings; on the other hand, they may prove to be of no relevance or even to be exculpatory in nature. Their significance, if any, will only be known once the notice has been executed and the documents have been examined by the authority which has issued the notice. An application under s 130 of the Bankruptcy Act can only be made if the trustee has reasonable grounds for suspecting that there exists (presumably undisclosed) property of the bankrupt, property that may be connected with or related to the bankrupt's examinable affairs or books which are relevant to those affairs. The grounds must be disclosed, on affidavit, to the Judge to whom application for the issuing of a warrant is made. They may nor may not prove to be well-founded. If property is seized, pursuant to a warrant, issued under s 130 , and it is alleged that the property is property of the bankrupt, the trustee will be entitled, under s 129 of the Bankruptcy Act , to assert an entitlement to possession of the property. If that claim is contested the trustee will be able to seek Court orders to enforce possession: see s 129(2). Paragraph (f) contemplates that decisions "in connection with the issue of search warrants" and decisions "requiring the production of documents" may be decisions in connection with the institution or conduct of proceedings in a civil court. The necessary nexus between the decision to authorise the seizure of property or documents and the institution of civil proceedings may exist where no antecedent decision has been made to commence such proceedings. No such decision may ever be made. Had the reasoning which was adopted by Pincus J (with whom Beaumont J agreed) in Murphy been applied in Ricegrowers it would have compelled a finding that a decision to issue a notice under s 155 of the Trade Practices Act was not a decision to which paragraph (f) applied. Pincus J held that, as a matter of construction, a decision to seize goods was not sufficiently connected with the institution or conduct of civil proceedings and could not, without more, result in the commencement of proceedings for a civil penalty. His Honour was influenced by the ordinary use of language. He did not consider that a decision to seize goods could be said to have occurred in connection with the institution or conduct of any proceedings. Furthermore, such decisions would not "in themselves" necessarily lead to the institution of proceedings for penalties. I do not consider that I am bound to apply Murphy . It appears that the Court in Murphy was not referred to Ricegrowers. In my view there is no relevant distinction to be drawn between a decision to issue a notice, under s 155 of the Trade Practices Act which requires the production of documents and a decision to issue a warrant under s 130 of the Bankruptcy Act which authorises the seizure of property (including documents). Both are decisions taken in order to facilitate an investigative process which has the potential to lead to the commencement of civil proceedings but which may not, necessarily, have that outcome. The same may be said of decisions to seize property, made under the Customs Act . Accordingly, in my opinion, the decision of Middleton J to issue the warrant was a decision to which paragraph (f) and, particularly, sub-paragraph (iii) applied. That being so the decision was not a decision to which s 13 of the ADJR Act applied. His Honour was not, therefore, obliged to provide reasons for his decision to issue the warrant upon receipt of the applicant's request.