Melbourne Steamship Co Ltd v Moorehead [1912] HCA 69; (1912) 15 CLR 333 (21 October 1912)

HIGH COURT OF AUSTRALIA

The Melbourne Steamship Company Limited Defendants, Appellants; and Moorehead Informant, Respondent.

H C of A

On appeal from a Court of Petty Sessions of Victoria.

21 October 1912

Griffith C.J., Barton and Isaacs JJ.

Mitchell K.C. and McArthur, for the appellants.

Starke, for the respondent.

McArthur, in reply.

C.J. Griffith read the following judgment:—

October 21

Griffith C.J.

This is an appeal from a conviction by a Police Magistrate upon a charge of failing to answer certain questions put to the appellants by the Comptroller-General of Customs, and purporting to be asked under the provisions of sec. 15B of the Australian Industries Preservation Act. Two objections are taken:—

The nature and object of the powers conferred by sec. 15B were the subject of full discussion in the case of Appleton v. Moorehead[1]. The cases in which they may be exercised are two— (1) if the Comptroller-General believes that an offence has been committed, and (2) if a complaint in writing has been made to him that an offence has been committed. The questions are to be put to persons whom the Comptroller-General believes to be capable of giving information as to the "alleged" offence, i.e. the offence which he believes to have been committed or of which complaint has been made to him. The object of the inquiry is to ascertain whether the belief or complaint is well founded. The only result that can follow from it is a prosccution, which must be instituted by the Attorney-General or some person authorized by him (sec. 14).

In my opinion, when the Attorney-General has formally instituted a prosecution in this Court in respect of an alleged offence, the power as well as the purpose of sec. 15B is exhausted so far as regards the persons whom the Attorney-General alleges to have committed the offence for which he prosecutes, whether they are made parties to the suit or not. From that time the matter becomes subject to the judicial power, or, to adapt a familiar phrase, transit in litem pendentem. The section cannot, therefore as contended by Mr. Starke, be used for the purpose of collecting evidence in a pending suit. It is true that the words "if the Comptroller believes" may be literally capable of including cases where he bases his belief on the fact that the Attorney-General has brought a suit, but they are so inapt to express that meaning that such a construction should be rejected.

The relevant facts of the present case are that on 4th June 1910 an action was commenced at the suit of the Crown against several defendants, not including the appellants, for penalties under the Act. The subject matter of Appleton's Case[2] was certain questions which had been put to him for the purposes of that action before its commencement. By the statement of claim in the action it was alleged (paragraph 46) that the defendants were on 1st January 1907 members of a combination between themselves and the appellants and others in relation to trade and commerce in coal among the States with intent to restrain trade to the detriment of the public. That action was set down for trial on 17th February 1911, and the hearing had before 16th March been fixed for 10th April.

The questions in respect of which the appellants have been convicted were put by the Comptroller-General on 16th March. The first of them inquired whether the appellants had since October 1906 been a party to or shared in the benefits of any agreement arrangement or understanding between all or any of the persons and firms who were defendants to the action (other than those charged as accessories only) in relation to the sale supply and carriage of coal to the States other than New South Wales.

This question was clearly relevant to the allegation contained in paragraph 46 of the statement of claim; and the Comptroller-General was, therefore, for the reasons which I have given, not entitled to ask it at that stage so far as it referred to that matter.

In answer to this, it is said by the respondent that the statement of claim also contained an allegation that the defendants (not mentioning the appellants and the others) had between 24th September 1906 and 30th January 1907 made a contract relating to the same subject matter and with a like intent, and that the question might have been put with the object of discovering whether the appellants were parties to that contract, which, it is suggested, may have been quite different from and unconnected with the combination alleged in paragraph 46, so that the Attorney-General might be able to take proceedings against the appellants in respect of it, either by a fresh suit or by adding them as defendants to the existing suit. The point is a purely technical point of pleading, and I cannot refrain from expressing my surprise that it should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings, and a fortiori not in criminal proceedings.

I am sometimes inclined to think that in some parts—not all—of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken.

I am not sure that even as a technical point of pleading the point taken is a good one, but I am relieved from the necessity of deciding it. When the questions were put to the appellants, they, through their solicitors, intimated to the Crown Solicitor that they objected to answer them, giving as a reason for the objection that the representative of the Crown Solicitor had told them that the questions were put in connection with the action then pending, and for the purpose of obtaining information for the use of the Crown in the action. They said that they were advised by Counsel that the Comptroller-General in putting the questions for that purpose was exceeding his power, and that in accordance with that advice the appellants would refuse to answer. In replying to this communication no suggestion was made that the questions were put for any other purpose, or were relevant to any other matter. The conversation with the Crown Solicitor's representative was admitted.

An analogy—incomplete, of course, as all analogies must be—is afforded by the rules observed by Courts in granting a new trial for the erroneous rejection of evidence. If evidence tendered is objected to, and the only ground urged in support of it is invalid, and the evidence is consequently rejected, the party who tendered it cannot afterwards obtain a new trial on the ground that it was admissible on some other ground not stated.

The principle of the rule is that the action of the Court was right when taken. In the same way, I think that the action of a person interrogated under sec. 15B in refusing to answer a question avowedly put for a purpose which is unauthorized is right when taken. The same result is arrived at by applying the rule that a person who does or omits to do an act under an honest and reasonable though mistaken belief in the existence of any state of things is not criminally responsible for the act or omission to any greater extent than if the real state of things had been such as he believed to exist. In the present case it is apparent that the appellants honestly believed on reasonable grounds that the respondent demanded the answers for the purposes of the pending action, which he was not entitled to do.

Further, when a public officer is entrusted with a power to be used for a particular purpose and avowedly seeks to use it for another and unauthorized purpose, the persons against whom it is sought to be so used may object to its exercise. It is ordinarily difficult to establish such an excuse, but in this case the difficulty does not arise. Such an attempted use of a power is sometimes called an abuse of the power—in civil cases it is called a fraud on the power—I use both terms in the technical, and not in any invidious, sense, because in this case the unqualified nature of the power was honestly believed to exist. But that makes no difference in the result.

Moreover, I am disposed to think that when a question demanding a categorical answer is put under sec. 15B, being so framed as to include matters concerning which the questioner is not entitled, as well as matters concerning which he is entitled, to ask, the person to whom the question is put may refuse to answer it in that form, and that it is for the questioner, and not for the person questioned, to modify it so as to confine it within permitted limits.

I am therefore of opinion that under the circumstances the appellants were justified in their refusal to answer.

As to the second point raised on the appeal I have felt a good deal of difficulty.

The words of sec. 15B are "may by writing under his hand require any person whom he believes to be capable of giving any information ... to answer questions." The term "answer questions" is defined to mean that the person on whom the obligation of answering is cast shall answer to the best of his knowledge, information and belief.

By the Acts Interpretation Act, sec. 22, unless the contrary intention appears, the word "person" when used in a Statute includes a body corporate. Sec. 3 of the Act under consideration contains a similar provision. One cannot help thinking, a priori, that the object of sec. 15B was, as pointed out in Appleton v. Moorehead[3], to discover facts from the examination of individuals, just as examining justices discover facts from the examination of witnesses. The Justices Act of Victoria (No. 1105) provides, by sec. 20, that a summons to a person to attend before justices as a witness shall be directed to any person who appears "likely to be able to give material evidence." Similar provisions are contained in the Justices Acts of the other States. They do not, of course, apply to corporations. Sec. 15C deals specifically with the production of documents belonging to corporations, although the "person" mentioned in sec. 15B may also be required to produce documents. A fair inference is that sec. 15B was not intended to apply to corporations quoad hoc. And, if not quoad hoc, why at all? Again, knowledge, information and belief cannot, except in a technical sense, be imputed to a body corporate. It is true that under the old Chancery practice a corporation made defendant to a bill was required to make answer to the plaintiff's interrogatories under its corporate seal to the best of its knowledge, information and belief. But that requirement was for the purposes of pleading, and not of evidence. A corporation cannot, of course, be a witness.

If it had been intended that sec. 15B should apply to corporations, one might have expected that it would have contained a provision that the answer should be made under the corporate seal, or by some member or officer appointed by the corporation for the purpose of making answer, according to the practice of this Court as well as the High Court of Justice in England and the Australian Supreme Courts with regard to discovery, and that the answer so given should be admissible against the corporation.

I do not think that either the old practice of the Court of Chancery and of the Australian Courts which have not adopted the Judicature Acts, or the practice of those Courts which have adopted them, can be regarded as incorporated by implication in sec. 15B.

Reference was made to the provision in sec. 15B (4) that the answer of a "person" to questions shall not be admissible in evidence against him except in proceedings for an offence under the Act, from which it may be inferred that it was intended that it should be used in such proceedings. I agree, but I do not think that this provision carries the argument any further. The provision is by way of protection only, and is equally valuable and applicable whether "person" includes corporations or not.

For these reasons, I have come to the conclusion that a contrary intention appears, and that in sec. 15B the word "person" does not include corporations.

On both grounds I think that the appeal must be allowed.

Barton J.

I am of opinion that the view expressed by O'Connor J. in Appleton v. Moorehead[4] is the correct one. Broadly on the ground he states there, 15b was held to be within the constitutional powers of the Commonwealth. If sec. 15B were read as an interference with judicial proceedings, it would be an exercise by the legislature of a power vested by the Constitution in the judiciary. It cannot, therefore, be so read if it is, as without doubt it is, open to an interpretation consistent with the Constitution. Such interpretation removes it altogether from the area of judicial proceedings. It cannot therefore be used as an aid to such proceedings, and it follows that such a use of it as was admitted by Mr. Sharwood on behalf of the Crown Solicitor, was unauthorized by law, and that the defendant was not bound to answer questions administered under cover of the section in an inquiry in aid of pending judicial proceedings. When the point has been reached at which the Crown institutes such proceedings in respect of the subject matter of the questions, there is no right in the Comptroller-General to institute such an inquiry. That subject matter has passed into the hands of the Courts alone. But it is said that the questions might have been put in an effort to discover whether the appellants were parties to some contract or combination charged in the information in the prosecution proceeding against others, as a foundation for proceedings against the appellants themselves. That might possibly have been so but for the evidence, which is that the questions were put in aid of the then pending proceedings. In face of that evidence, it is useless to speculate on what might have been. When the appellants refused to answer they were justified by law, and that is sufficient for the purposes of this case.

On the second point I am of opinion that the very marked difference in expression between secs. 15B and 15C evinces an intention that in the first of these two sections the word "person" is not to include corporations. The reason for that difference exists in the fact that sec. 15B is intended for the eliciting of evidence similar to that of a witness in a forensic investigation although the proceeding is not a judicial one. A corporation cannot give evidence as a witness any more than it can make an affidavit. I think the distinction between a corporation and a person in this regard was intended to be expressed in the terms of these two sections.

I am therefore of opinion that the appeal succeeds on both grounds.

Isaacs J. read the following judgment:—

In my opinion this order to review should be discharged with costs on the ground that the company was bound by law to answer every question fully; and that it had no legal justification for refusing. In Appleton v. Moorehead[5], I said of the procedure under sec. 15B "It is mere investigation with a view to inform the mind of the Executive whether the law has or has not been observed, and, if not, whether the nature of the contravention is such as to merit further action."

This quotation involving the disclosure of full particulars states the two material directions in which the discovery authorized by the section may assist the Executive: (1) Whether any and what contravention of the anti-trust provisions of the Act has taken place; and (2) whether, assuming a contravention, a given person should be proceeded against for his share in it.

These two matters are separate, and it is important to observe that whenever the Executive is in doubt as to either, the section gives the means of informing its mind. If, however, the Executive is already so far satisfied as to both, that legal proceedings have been instituted, or as the case may be, consented to by the Attorney-General against the given person in respect of a given contravention then, as regards that person in relation to that offence, the object of the section is exhausted, and has no operation, because the limits of the power have been reached.

I apply the law so interpreted to the facts of this case. And in the first place, I leave out of consideration, the question of Mr. Sharwood's conversation with Mr. Fookes, in order to see how the matter stands independently. Paragraphs 41 to 45 inclusive of the statement of claim charged against certain persons other than the present appellants the alleged offences of an illegal contract, and an illegal combination based on the contract; and I can see no reason whatever to doubt the right of the Comptroller-General to inquire as to the company also. Otherwise every time a new offender is believed to be discovered, all existing proceedings against persons said to be connected with his alleged offence must be discontinued and then commenced de novo. Form and not substance would be worshipped and the sacrifice would be heavy.

Paragraph 46 alleged an offence in which it was said the present appellants participated, but only other persons were charged, and not the appellants. It is obvious the Attorney-General is not bound to arraign every person who in some minor degree becomes implicated in the offence.

Sec. 14 was passed so that the law officer of the Crown should exercise some discretion. The facts, so far as known to him, may in a particular instance lead him to think the interests of justice do not demand the prosecution of a given participant in the contravention. It depends on the nature, extent, and duration, of that person's participation. But if after the Attorney-General has instituted proceedings against those whom he considers real offenders, the Comptroller-General has subsequently good reason to believe the case may be more serious as against a party omitted, there is no reason, so far as I can see, to exclude the operation of the section, for the purpose of obtaining definite and reliable information as to that person. In that view paragraph 46 presents no obstacle whatever to the Comptroller-General's questions.

If it does, the Crown is placed in this situation: it must in every case where a party is implicated, include him from the first in the proceedings lest he should prove to be more deeply involved than at first appears, or it must afterwards discontinue all the existing proceedings, then inquire under sec. 15B and then re-institute the action, or else allow a possible offender against the law to escape through the secrecy of his own actions.

That Parliament ever contemplated this seems to me incredible. The Crown has, however, pressed the position further than I have indicated. Its full contention has been that the words of the section are unlimited and unqualified, and that so long as the Comptroller-General believes the offence has been committed, he may act whether the offence in relation to the given person is under prosecution or not. I disagree with that contention, not on the ground that it is an interference with judicial power, but on a wholly different ground.

Indeed, I see no foundation for the suggestion that this particular statutory procedure is ever an exercise of judicial power, or that Parliament is incompetent to authorize its use whether legal proceedings have been instituted or not. The institution of process cannot change the nature of the procedure under the section; that which it is to-day, it remains to-morrow. Discovery of facts may be attached also to judicial procedure, and so made part of it, but it is not an exclusive or even an inherent attribute of that procedure. The Customs Act 1901 (secs. 4, 38, 214 and 215) affords instances of executive power of this nature. The common law Courts did not possess the power to grant discovery in England until 1854. Some Courts do not possess it now. The jurisdiction was assumed in Chancery because of the inability of the common law and some other Courts to grant it. And it is important to observe that if the proceeding to obtain information be treated as necessarily judicial after the institution of the action in which the information might be utilized, and notwithstanding the person interrogated is no party to the action, it cannot consistently be regarded as otherwise than judicial where it is pursued with a view to ascertain any necessary circumstances in contemplation of an action, and equally with a view to use it in that action when instituted, and particularly if the action is contemplated against the person interrogated. This is apparent from the fact that in Chancery, a bill of discovery might be filed before the party commenced his action at law, and either to ascertain what form of action to bring, or the proper person to sue, and for other purposes: See Bray on Discovery, pp. 612-613. So that the previous institution of an action is no test. If it were, then, as judicial power applies equally to any class of litigation, an expectant defendant acting on the principle affirmed in the Sugar Commission Case, might forestall the Government, by suing for a declaration, and, by thus converting the section into a judicial instrument, deprive the Crown of its real and probably its only means of ascertaining the truth, and vindicating the law. So I put aside the suggestion of judicial action.

The true ground is that, reading sec. 15B with the rest of the Act, I gather the limit of the power to be where the matter has reached the stage when the Crown has definitely arraigned before a Court a particular person on a particular charge. As to him, in relation to that charge, the language of the power is, on the face of it, then inapplicable. This is greatly aided by the fact that complaint in writing mentioned in the section would include a complaint by a person injured civilly by some alleged contravention and desirous of suing for treble damages under sec. 11, but debarred from instituting proceedings by sec. 14 (2) until he receives the written consent of the Attorney-General. In that case the power would be clearly exhausted when the consent is given, but not till then; and by parity of reasoning, a similar result flows from the institution of a prosecution which must be by the Crown itself: See sec. 14 (1). In that case the prosecution against the party mentioned for the contravention mentioned is the limit of the power.

But if the limit of the power be as stated, it is obvious the Crown's right cannot validly be rejected at an earlier period, and before that limit is reached. Neither by express words nor by necessary implication is the authority so explicitly given further restrained. I do not see how it is open to this Court to insert limitations which Parliament has excluded; limitations which affect discretion only, and really open up an inquiry as to the motive of the Crown in putting in force an acknowledged power with which it has been entrusted for the public welfare. I do not think that what was so candidly said by the Crown Solicitor's representative is in any way material to the Comptroller-General's power. I see nothing in the Act indicating the intention of Parliament—for that, to my mind, is the real question, as personally, I see no shred of reason to doubt its competency—to render the exercise of the statutory authority unlawful merely because the information when obtained was to be utilized so as to comply with the defendants' demands for particulars. Quite consistently with that the appellants might after discovery be added with any necessary or desired amendments. True, the Crown might have discontinued all its proceedings up to date, and paid the costs, then put its questions to this company, examined its documents, and then could have re-started the cumbersome litigation, re-incurred the huge expense on both sides, and it would then have been free from this objection. I cannot read into the Act any such necessity, but if the appellants' present contention be correct, the Crown would be forced to pursue this devious, burdensome, harassing and wasteful course, or risk the loss of information necessary for the purposes of justice, and the protection of the public in respect of perhaps the prime necessaries of life.

Authorities are numerous that motive in such a case is immaterial no matter what person is exercising a right. More particularly must this be so in the case of the Crown, entrusted with the means which Parliament has thought necessary to maintain the due observance of its legislation. I do not think it is competent to a Court to inquire into the motives of the Executive in such a case unless the Statute so declares. That is for another Department of Government. It is not difficult to see, if such an issue can be raised, to what lengths it may be carried. Nor can the difficulty be overcome by using the word "purpose," because it is really not purpose but "motive" which is challenged. The distinction between the two is clear. The purpose of an act is the effect it is intended to have when done, which in this case is simply to elicit information. That is a perfectly lawful purpose. What is alleged on the strength of the conversation between Mr. Sharwood and Mr. Fookes is merely the motive actuating the Crown in attaining the desired and lawful purpose. The authorities are familiar and clear that where a legal right exists, motive is immaterial. In Ex parte Wilbran; In re Wilbran[6] it was said that "Courts of justice had no concern with the motives of parties who asserted a legal right." The Privy Council adopted this in King v. Henderson[7]. In Grenville v. College of Physicians[8], Holt C.J., speaking of a man's justification for arresting another, said: "It is not what he declares, but the authority which he has is his justification." This was approved by Lawrence J. in Crowther v. Ramsbottom[9]. Lord Kenyon C.J. in the same case said[10]:—"I never understood that a man was obliged to justify a distress for the cause which he happened to assign at the time it was made. If he can show that he had a legal justification for what he did, that is sufficient." Now the Comptroller-General's belief at a time when such belief is contemplated by the Act is the only legal justification stated by the legislature as necessary; and as that admittedly existed in the present case, it seems to me that is sufficient; and to require more is practically to legislate not to interpret. I therefore see no reason for absolving the appellant company from answering.

A subsidiary question is raised on behalf of the appellants as to whether sec. 15B applies to a corporation at all. The Act itself, sec. 3, says that unless the contrary intention appears "person" includes "corporation." The Acts Interpretation Act 1901, secs. 22 and 23, makes a general enactment to the same effect. It therefore lies on a person in the position of the appellants to show the contrary intention. See per Privy Council in Union Steamship Co. of New Zealand v. Melbourne Harbour Trust Commissioners[11]. Learned counsel for the company endeavoured to show contrary intention by saying, first, that a company cannot naturally answer questions or produce documents, and that sec. 15C recognized this and made special provision for individuals to perform such acts.

But to begin with, sec. 15C makes no provision whatever as to answering questions; so that, if the argument is good, there is no power to make a corporation answer questions at all, either by itself or through the medium of an individual. Next, sec. 15C is not confined to individuals, but expressly recognizes and enforces the duty of the corporation to produce its books; though there is added the power to compel specific individuals under a personal sanction to perform the required duty. The inclusion of individuals in sec. 15C was probably to meet possible difficulties that have on occasions arisen, as for instance, in Crowther v. Appleby[12], where directors refused to allow their secretary to produce the company's books to an arbitrator; the latest English example being Eccles & Co. v. Louisville and Nashville Railroad Co.[13] where the Court of Appeal were divided as to the duty of a clerk in the employ of a firm to produce before a Commissioner under letters rogatory certain documents belonging to and in the possession of his employers.

I see no indication of "contrary intention" so as to take a corporation out of sec. 15B if, according to ordinary legal notions, it primarily falls within the terms of that section. An illustration of contrary intention is found in Hawke v. E. Hulton & Co. Ltd.[14], where it was held that a corporation could not be convicted under the Lotteries Act as a rogue and vagabond. But a corporation can do many things which at first sight appear much more difficult to fasten on a corporate body than permitting the inspection of documents or their answering questions, which may be done in writing: Chuter v. Freeth & Pocock Ltd.[15] is a very strong illustration both for the actual point decided and the principles stated by Lord Alverstone C.J.

The cases cited during the argument—Ranger v. Great Western Railway Co.[16], Dyke v. Stephens[17], Wilson v. Church[18]—establish the ordinary liability and of course the recognized capacity of a corporation to answer and to produce documents. Naturally this has to be done by means of individuals competent to perform the necessary physical acts, call those individuals agents or representatives or what you please. But as shown by the case of Welsbach Incandescent Gas Lighting Co. v. New Sunlight Incandescent Co.[19], and particularly by the judgment of Collins L.J., the answer so given is the answer of the company and not of the individual who gives it. Indeed, as Rigby L.J., points out (pp. 11-12) under the former practice when an officer was joined as a defendant with the company for the purpose of discovery, and when both he and the company had to answer separately his answer could not be read as evidence against his co-defendant, the corporation. Very recently the principle under discussion has been applied in America in Wilson v. United States[20]; Dreier v. United States[21]. In the first case the appellant who was president of a corporation refused to permit inspection by a grand jury of books of the corporation in his possession. A subpœna had been issued directed to the corporation only, requiring it to produce the books. Service was made upon Wilson and others, he attended and declined to produce and was orally presented by the grand jury to the Court for contempt and the Court committed him. One objection raised before the Supreme Court on Appeal from a refusal to discharge him on habeas corpus, was, that the subpoena, without mention of any individual or officer, simply directed a corporation which could not give oral testimony to produce books. On the point now under consideration the Court said[22]:—"Where the documents of a corporation are sought the practice has been to subpoena the officer who has them in his custody. But there would seem to be no reason why the subpœena duces tecum should not be directed to the corporation itself. Corporate existence implies amenability to legal process. The corporation may be sued; it may be compelled by mandamus, and restrained by injunction, directed to it. Possessing the privileges of a legal entity, and having records, books and papers, it is under a duty to produce them when they may properly be required in the administration of justice."

The personal responsibility of Wilson was affirmed, and the reasons found at p. 377 of the report are not material in the present case, but are closely connected with the subject.

For these reasons, I think the company contravened the law by refusing to comply with the Comptroller-General's requirements, and that the decision of the Police Magistrate should be upheld.

Appeal allowed. Conviction quashed with £10 10s. costs. Respondent to pay costs of the appeal.

Solicitors, for the appellants, Hedderwick, Fookes & Alston.

Solicitor, for the respondent, C. Powers, Crown Solicitor for the Commonwealth.