McCloy v The Honourable Megan Latham

HIS HONOUR: The plaintiff (Mr McCloy) is the subject of an inquiry conducted by the second defendant (the Commission) under the provisions of the Independent Commission Against Corruption Act 1988 (NSW) (the ICAC Act). The inquiry was conducted by the first defendant (the Commissioner). The Commissioner has not reported.

In these proceedings, Mr McCloy seeks in substance orders that the Commissioner be recused from hearing further and reporting on the inquiry insofar as it concerns him. He relies on the well-known principles relating to reasonable apprehension of bias. That reasonable apprehension is said, in the further amended summons filed in court by leave today, to arise from a number of activities undertaken by the Commissioner both before and during the hearing, and from things arising in the conduct of the hearing itself. It is Mr McCloy's case that it is the cumulative effect of those matters that gives rise to the reasonable apprehension of bias.

Chronologically, the starting point of the complaints made by Mr McCloy relates to what is called conduct by the Commissioner prior to the commencement of the relevant inquiry (which I should have said is known as Operation Spicer). The first matter relied upon is a speech that the Commissioner gave to members of the New South Wales Bar Association on 24 February 2014.

It does not appear to be contentious that the Commissioner made a number of comments as to what she saw as the enjoyability of conducting inquisitorial litigation, and as to the way in which examination of witnesses in public inquiries could be undertaken. The Commissioner also referred to counsel assisting as being "part of a team", and noted that counsel representing particular witnesses had a more difficult and limited role.

That is said to give rise to certain inferences that the hypothetical fair-minded observer might draw, as set out in para 5 of the further amended summons. I shall set out para 5;

Paragraph 6 then moves to evidence given by the Commissioner during a public hearing of a committee of the Parliament of this state, the Committee on the Independent Commission Against Corruption. In the course of that hearing, the Commissioner was questioned on a number of matters, including the comments that she had made in her speech to members of the Bar Association. She was questioned in particular about those aspects of that speech of which Mr McCloy now complains. For reasons that will become apparent, I do not propose to set out in detail the way in which she responded.

The words that the Commissioner used, in her evidence to the Committee, are said to give rise to inferences of the following nature, as set out in para 8;

Paragraphs 8A and 8B relate to a report prepared by the Inspector of the Commission, and to the Commissioner’s response to that report. It is not necessary to elaborate on those matters.

Paragraph 8C of the further amended summons seeks to summarise the effect, from Mr McCloy's perspective, of the speech that the Commissioner gave to members of the Bar Association, her evidence to the parliamentary committee relating to that speech, and her response to the Inspector's report. Again, in my view, para 8C sets out inferences that the hypothetical fair-minded observer might (reasonably) draw, although (unlike paras 5 and 8, those "apprehensions" are not described as "inferences"). I set out para 8C.

This debate has arisen in respect of the tender, through an affidavit sworn by Mr McCloy's solicitor, of the report of the Parliamentary Committee. That report appears to contain a transcript of the evidence that the Commissioner gave, including of course those parts on which Mr McCloy now seeks to rely. The Attorney-General, who is the third defendant and who has appeared to act as a contradictor (the Commissioner and the Commission having submitted) opposes the tender of that material. In essence, the submission for the Attorney-General is that its tender and reception into evidence would infringe the privileges of the Parliament of this State.

The debate proceeded by reference to s 16 of the Parliamentary Privileges Act 1987 (Cth). Of course, that Act cannot apply of its own force. It deals with the privileges of the Parliament of the Commonwealth of Australia. However, both Mr Faulkner of Senior Counsel, who appeared with Ms Gall of Counsel with the plaintiff, and Mr N J Williams of Senior Counsel, who appeared with Mr Kremer and Mr Hume of Counsel for the Attorney General, submitted that s 16 was declaratory of the position under the general law, and that represented the position as to the privileges of the Parliament of this State.

I set out s 16:

It will be seen that the report of the Parliamentary committee is in principle admissible in evidence, by virtue of subs (4). Mr Williams did not submit otherwise. The real question relates to subs (3). In other words, the question is, is the evidence tendered merely to prove what the Commissioner said to the Committee, or is it being tendered for a purpose prohibited by subs (3)?

Although the debate proceeded on the agreed position that the principles declared by s 16 of the Parliamentary Privileges Act apply under the general law in this State, it is I think desirable that I should express my agreement with that position. The Privy Council considered the matter in Prebble v Television New Zealand Ltd [1995] 1 AC 321. At 333, Lord Browne-Wilkinson (who gave the advice that their Lordships would tender to Her Majesty) referred to the Parliamentary Privileges Act, and to the amendment of it following the decision of the Supreme Court of this State in R v Murphy (1986) 64 ALR 498.

His Lordship referred to s 16(3) and said that it "declares what had previously been regarded as the effect of article 9 of the Bill of Rights 1689 and... contains what, in the opinion of their Lordships, is the true principle to be applied". In the next paragraph, his Lordship noted that Article 9 of the Bill of Rights applied not only in the United Kingdom but also "throughout the Commonwealth".

At 334, his Lordship described what he called "the basic concept underlying Article 9" in the following words:

Carruthers J reached a similar view R v Jackson [1987] 8 NSWLR 116 at 121.

As I have said, the question is one as to the use to be made of the material if it is admitted into evidence. Beaumont J considered a very similar question in Amann Aviation Pty Ltd v Commonwealth of Australia (1988) 19 FCR 223. His Honour set out s 16(3) of the Parliamentary Privileges Act at 228. He traced its legislative history at 228-230. At 230-231, his Honour dealt with the question before him, which as I have said is very similar to the one with which I am now concerned.

At 230, Beaumont J noted that before the enactment of s 16, the record of what was said in parliament could be used "for the limited, but non-contentious, purpose of proving that a member of parliament was present in the house on a particular day". He said that this was "still a legitimate approach".

I might add that it is also clear that what was said in parliament, either by a member or by a witness to a parliamentary committee, may be given in evidence for the purpose of proving no more than that the words in question were said on the day and at the time indicated by the official record.

However, Beaumont J said at 230-231, where the use of the material was contentious because it might be sought to be used to impugn the conduct of a member, then "it is almost inevitable that the tender of Hansard would lead to an examination of the circumstances in which the senator came to make the statement and… this would further lead to an attempt to assess the credibility of this evidence, and to compare it with other evidence already given".

That use, his Honour said at 231, "cannot be reconciled with the complete freedom of speech envisaged by the Bill of Rights and the [Parliamentary Privileges] Act".

In my view, although the situation could perhaps be approached by admitting the material into evidence for the sole purpose of proving what the Commissioner said, and making an order under s 136 of the Evidence Act 1995 (NSW) accordingly, that would not address the problem which is raised by the Attorney-General's objection. The problem is, that regardless of the use limited by such a ruling, the argument that is sought to be advanced must be the argument referred to in the relevant paragraphs of the further amended summons to which I have referred.

As I have noted, the specific argument sought to be raised is that the words used could reasonably lead to the inferences set out in para 8 of the further amended summons. Although the language of reasonable apprehension rather than reasonable inference is used in para 8C, in my view exactly the same situation applies under that paragraph also.

When one views the material in that way, it seems to me that a tender for the limited purpose of proving what the Commissioner said in Parliament could have no relevance other than the use sought to be made of it as articulated by the further amended summons. If it is not to be tendered for that purpose then it is irrelevant and should not be admitted. If it is to be tendered to support the argument advanced by those paragraphs of the further amended summons, then it seems to me to be directly inconsistent with the principles stated in s 16(3) of the Parliamentary Privileges Act; I repeat, not in its capacity as an enactment directly regulating the conduct of these proceedings, but in its capacity as declaratory of the general law applicable in this State and to proceedings in the Parliament of this State.

Specifically, even if one were to eschew reliance on paras (a) and (b) of subs (3) (and I am by no means sure that the use sought to be made of the material could be said to be consistent with those paragraphs), the very way that the challenge is formulated, in those paragraphs of the further amended summons to which I have referred, makes it obvious that the material will be relied upon for the purpose of inviting the drawing of inferences or conclusions wholly or partly arising from what the Commissioner said to the Parliamentary Committee. In my view, that is a use directly prohibited by the principle declared by s 16(3)(c).

I accept, as Mr Faulkner submitted, that the Court is not being asked to infer, and to find on the balance of probabilities, that the Commissioner did have the motives or intentions ascribed to her in those paragraphs of the further amended summons. If that were not the case, it would not have been necessary for these reasons to be so lengthy.

However, when it is said that the test to be applied is that of the hypothetical objective bystander, the question must necessarily involve a consideration of what that bystander could reasonably make of the material in question. Thus, in essence, the Court is being asked to determine that the bystander could reasonably infer, from what the Commissioner said (and for that matter, what she did not say), that the suspicions that the reasonable bystander might apprehend were real and not just entirely hypothetical.

In short, even though the issue of apprehension of bias does not require the Court to proceed to the stage of inference leading to a finding on the balance of probabilities, nonetheless, as I see it, the process of argument foreshadowed does invite the drawing of an inference as to what might be made of the Commissioner’s state of mind or motives, based on the material in question.

For those reasons, I reject the tender of the report.