Australian Securities & Investment Commission v Fortescue Metals Group Ltd [No 4] [2009] FCA 434

FEDERAL COURT OF AUSTRALIA

Australian Securities & Investment Commission v Fortescue Metals Group Ltd [No 4] [2009] FCA 434

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION v FORTESCUE METALS GROUP LTD and JOHN ANDREW HENRY FORREST

WAD 55 of 2006

GILMOUR J

1 MAY 2009

PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WAD 55 of 2006

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

Plaintiff

AND: FORTESCUE METALS GROUP LTD (ACN 002 594 872)

First Defendant

JOHN ANDREW HENRY FORREST

Second Defendant

JUDGE: GILMOUR J

DATE: 1 MAY 2009

PLACE: PERTH

RULING AS TO WITHDRAWAL OF TENDER OF TRANSCRIPT OF SECTION 19

STATEMENT OF SECOND DEFENDANT 1 The plaintiff (ASIC) gave the second defendant a notice under s 79 of the Australian Securities and Investment Commission Act 2001 (Cth) ("the Act")of its intention to tender under s 76(1) of the Act a statement made at his examination pursuant to the provisions of s 19 of the Act. Section 76(1) provides that: (1) A statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding unless: (a) because of subsection 68(3), the statement is not admissible in evidence against the person in the proceeding; or (b) the statement is not relevant to the proceeding and the person objects to the admission of evidence of the statement; or (c) the statement is qualified or explained by some other statement made at the examination, evidence of the other statement is not tendered in the proceeding and the person objects to the admission of evidence of the first-mentioned statement; or (d) the statement discloses matter in respect of which the person could claim legal professional privilege in the proceeding if this subsection did not apply in relation to the statement, and the person objects to the admission of evidence of the statement. 2 The tender was opposed on various grounds. Following argument, I ruled on 29 April 2009 that the transcript of the second defendant's statement was admissible subject to certain matters being satisfied. 3 On 24 April 2009 the second defendant, after the oral hearing in relation to the admissibility of the transcript, raised a fresh objection. He contended that in reliance upon s 76(1)(c) of the Act, there were other statements made at his examination which qualified or explained the statement tendered by the plaintiff. The issue of the tender of the statement was then adjourned to enable ASIC to consider those other statements which were said to qualify or explain the statement ASIC sought to tender. 4 On 28 April 2009, senior counsel for ASIC sought to withdraw the tender both, he said, as a matter of convenience in not having to determine the argument further together with ASIC's position which, upon review, disclosed that it had already adduced sufficient evidence to establish the elements of its case against the second defendant. It is unnecessary for me to explore the reasons given. 5 The withdrawal of the tender was opposed by the second defendant who submits that as ASIC had already tendered the statements, the only question which remainedoutstanding is whether there is contextual material to be tendered which will qualify or explain the tendered statements. 6 The tender was made as part of ASIC's case. In my opinion, ASIC cannot, in these circumstances, be forced to proceed with its tender. The transcript has not yet been received into evidence. Indeed the tender is the subject of a qualified objection by reference to s 76(1)(c). ASIC does not propose to tender those other parts of the transcript said by the second defendant to qualify or explain the statement originally sought to be tendered by ASIC. In those circumstances by the very provision of s 76(1)(c) the statement first sought to be tendered by ASIC is inadmissible. 7 I was not taken to any authority by any of the parties as to the basis upon which the withdrawal of a tender in these circumstances may be refused and the tendering party compelled to tender the statement. In the ordinary course where there is an objection to a tender it is open to the tendering party to withdraw the tender. I see no difference in this case and indeed that position is reinforced by the provisions of s 76(1)(c). 8 I would not compel ASIC to proceed with its tender. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate: Dated: 1 May 2009

Counsel for the Plaintiff: Mr N J Young QC with Mr J A Thomson and Mr D J Crennan

Solicitor for the Plaintiff: Mallesons Stephen Jaques

Counsel for the First Defendant: Mr J Karkar QC with Mr B Dharmanada and Mr R J Price

Solicitor for the First Defendant: Clayton Utz

Counsel for the Second Defendant: Mr A Myers QC with Mr M Thangaraj

Solicitor for the Second Defendant: Jackson McDonald

Date of Hearing: 22 April 2009

Date of Judgment: 1 May 2009