Case: Evans v Wainter Pty Limited [2005] FCAFC 114 ; (2005) 145 FCR 176
Outcome: discussed
private examination of persons pursuant to Div 2 of Pt 3 of the ASIC Act in aid of an investigation by ASIC pursuant to Div 1 of Pt 3 has a different history, role and purpose from examinations pursuant to Div 1 of Pt 5.9 of the Corporations Act . The latter are a long standing feature of insolvency administration, the history, nature and purpose of which have been analysed in many cases most recently by Lander J in Evans v Wainter Pty Limited [2005] FCAFC 114 ; (2005) 145 FCR 176 and French J in Highstoke Pty Ltd v Hayes Knight GTO Pty Ltd [2007] FCA 13 and need not be repeated. Counsel for Macquarie also put a variation upon those themes. Reliance was placed upon some statements made by Lander J in Evans 145 FCR at 216 217 to erect a mandatory consideration, namely, that ASIC identify what was described as the 'net' benefit to a corporation of the proposed examinations, thus involving a calculus of benefits and detriments leading to a net benefit. The analysis by Lander J in the passage referred to above is, no doubt, valuable. It is not, however, a statute. It does not set out to lay down mandatory considerations for ASIC to consider before granting authorisation. It provides guidance as to what would be an abuse of process or an improper purpose. The statement that ASIC was only entitled to authorise a person who was an eligible applicant if that person's purpose in seeking an examination summons is for the benefit of the corporation, its contributories or its creditors must be understood in that context, ie, the purpose should not be a collateral purpose. There is no suggestion of any collateral purpose in the present case. Furthermore, Lander J does not hold that it is mandatory for ASIC to expressly weigh up all potential benefits and detriments to find a 'net' benefit before granting authorisation. The argument is an attempt to incorporate mandatory provisions into an unconstrained statutory discretion. The Administrators did not receive prior notice of the intention to make the decision in question and, if they were entitled to natural justice or procedural fairness, it would follow that the decision was invalid by reason of that failure. It is convenient to deal with the argument that the statute impliedly required natural justice be accorded to the Administrators prior to considering the argument that the dealings between ASIC and the Administrators led to a legitimate expectation on the part of the Administrators that natural justice would be accorded to them. Counsel for the Administrators was unable to refer to any like case in which the point has been taken. Even more striking is that the point does not appear to have been taken in relation to the issue of a summons for examination, a decision with direct and immediate impact upon the examinee which has often been challenged. In my opinion, the argument does not withstand analysis, although it has some initial attraction. It is also submitted that the common law right to maintain silence will be encroached upon. It is not clear to me that the so called common law right to silence is a right or interest in the sense outlined in Annetts v McCann [1990] HCA 57 ; 170 CLR 596 . The only authority that was cited to support that proposition, apart from the reference in the passage from the reasons of Dawson J in Johns v Australian Securities Commission 178 CLR at 437, was that of Branson J in Re Cortaus Ltd (in liq); Sheahan v Joye (No 2) (1996) 20 ACSR 576 at 578. That was an examination of the balance of convenience on an application for a contested adjournment and did not involve the present issue. There is merit in the submission by counsel for ASIC that it is hardly correct to say that an officer of a company that is in external administration has any right to silence concerning the affairs of the company. On the contrary, the officer is bound by statute, when called upon, to provide information. That has been the case for a very long time ( Rees v Kratzmann [1965] HCA 49 ; 114 CLR 63; Evans v Wainter 145 FCR per Lander J at [44] [82]; per French J in Highstoke Pty Ltd v Hayes Knight GTO Pty Ltd [2007] FCA 13 at [46] [78]).