Trade Practices Commission v. CC (New South Wales) P/L & Ors [1994] FCA 695

JUDGMENT NO. samo EPS IAL..

CATCHWORDS

TRADE PRACTICES - indemnity against legal proceedings given by Trade Practices Commission to applicant conditional upon full and frank statement being given - application for stay of proceedings to which applicant was respondent and judicial review of decision to commence those proceedings - whether indemnity invalidated by applicant's insistence upon representation by solicitor who also _ represented other respondents to those proceedings or by applicant failing to be full and frank in interview or by applicant's refusal to attend interview conducted by senior counsel retained by Commission.

CONTRACT - implied terms - whether implied term in indemnity that applicant not be represented by solicitor who also represented other interests.

LEGAL PRACTITIONERS - conflict of interest - need for informed consent.

TRADE PRACTICES ACT 1974 (Cth): 8.155. TRADE PRACTICES COMMISSION v NEW H PTY LIMITED & ORS AND PETER WOOLLARD v TRADE PRACTICE MMISSTON

Nos NG 574 of 1994 and NG 613 of 1994

HILL J SYDNEY 29 SEP 1994 28 SEPTEMBER 1994 FEDERAL COURT OF

AUSTRALIA PRINCIPAL

H COURT OF AU! A

wwe www

TH WALES T REGISTRY GENERAL DIVISION No NG 574 of 1994 TWEEN: TRADE PRACTICES COMMISSION Applicant

AND: cc S' WALES) PTY LIM

former] as CONC

CONSTRUC SW) PTY LIMI

First Respondent

PETER WOOLLARD Second Respondent

HOLLAND STOLTE PTY LIMITED Third Respondent

GRAHAM RONALD DUFF Fourth Respondent

TIPLEX CONSTRUC LIMITED

Fifth Respondent

S_PALMER Sixth Respondent

LEIGHTON CONTRACTORS PTY LIMITED

Seventh Respondent

LEONARD DIXON Eighth Respondent

THE AUSTRALIAN FEDERATION OF

CONSTRUCTION CONTRACTORS Ninth Respondent

RUSSE ORMAL RICHMOND Tenth Respondent

No NG 613 of 1994 BETWEEN: PETER WOOLLARD Applicant AND: TRADE PRAC S_ COMMIS Respondent CORAM: HILL J PLACE: SYDNEY

28 SEPTEMBER 1994

DERAL C F_ AUSTRALIA

S STRI Y¥

wwe weww

GENERAL DIVISION

No NG 574 of 1994

BETWEEN: TRADE PRACTIC @) SSION Applicant AND: CC. (NEW SOUTH WALES) PTY LIMITED fo know: as co ONS (NSW) P'

First Respondent

PETER WOOLLARD Second Respondent

HO OLTE PTY LIMIT Third Respondent

GRAHAM RONALD DUFF Fourth Respondent

MULTIPLEX C NS PTY LIMITED Fifth Respondent

GEOF THOMAS PALMER Sixth Respondent

LEIGHTON CONTRACTORS PTY LIMITED Seventh Respondent

LEONARD DIXON Eighth Respondent

THE AUSTRALIAN FEDERATION OF CONSTRUCTION C Ss

Ninth Respondent

R ie) L_RICHMON Tenth Respondent

o NG £1994

BETWEEN: PETER WOOLLARD Applicant

AND: TRADE PRACTICES COMMISSION

Respondent

HILL J SYDNEY 28 SEPTEMBER 1994

ee 0s oe

d:

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.

2.

Note:

In respect of the motion in proceedings number NG574 of

1994:

(a) the proceedings be stayed so far as they relate to the second respondent with liberty to apply upon 7 days' notice.

(b) the applicant pay the costs' of the second respondent.

The application in matter number NG613 of 1994 be

dismissed.

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASO GMENT

Before the Court 1s an application brought by Mr Peter Woollard ("Mr Woollard") against the Trade Practices Commission ("the Commission") grounded upon the provisions of the inistrative isions Judicia eview) Act (1977) (Cth) and a motion by Mr Woollard in proceedings brought by the Commission against CC (New South Wales) Pty Limited ("CC") & Ors to which proceedings Mr Woollard is a respondent founded upon Part IV of the Trade Practices Act 1974 (Cth) ("the Act"). In these Reasons the Part IV proceedings are referred

to as "the substantive proceedings".

By a statement of claim in the substantive proceedings the Commission alleges that CC engaged in conduct in breach, inter alia, of various paragraphs of s.45 of the Act alleging an arrangement or understanding between CC and other parties tendering for contracts that the successful tenderer would pay to unsuccessful tenderers an unsuccessful tenderers fee and in certain cases a fee to the Australian Federation of Construction Contractors. It is further alleged that Mr Woollard was, at relevant times, an employee of CC, being a director of that company, and as such entered into the alleged arrangements or understandings or attempted so to do.

In the result it 1s claimed, inter alia, by the Commission

that a pecuniary penalty should be levied against both CC and

Mr Woollard.

The question of unsuccessful tenderers fees was investigated by the Royal Commission into Productivity in the Building Industry in New South Wales. Mr Woollard provided two statements to that Commission relating to that matter and

gave evidence from 11-14 June 1991.

Subsequently, on 19 May 1993, the Commission gave notice to Mr Woollard under s.155 of the Act requiring him to appear before it and give oral evidence about matters which might contravene ss.45 or 52 of the Act and requiring him to

produce certain documents.

Mr Woollard, on this occasion, as had been the case before the Royal Commission, was represented by Corrs Chambers Westgarth ("Corrs") who were, and had been, at all relevant times, also the solicitors for CC. On behalf of Mr Woollard, Corrs raised the question of legal representation; particularly Mr Woollard's right to be represented at the 8.155 examination by senior and junior counsel. The Commission asserted that no right to representation existed but accepted (presumably as a matter of grace) a limited right for Mr Woollard to be accompanied by one legal representative (cf Constantine v Trade Practices Commission (1994) 120 ALR

341 at 350. It subsequently agreed to make a exception to

what it described as its "policy" to allow Mr Woollard to be represented not only by a solicitor from Corrs but by counsel

(albeit only one counsel). The examination was subsequently

held.

On 10 March 1994 the Commission requested Mr Woollard to attend an interview to assist it in its inquiries into possible contraventions of the Act. The letter, dated 10

March 1994 said, in part:

"The Commission is requesting that Mr

Woollard, amongst others, gives consideration to providing that assistance. The Commission in the first

instance would request that Mr Woollard provides a statement concerning his

knowledge of the agreements on unsuccessful tender fees and special fees involving the Haymarket project. The

Commission recognises that in providing assistance Mr Woollard may be concerned about exposing himself to possible court proceedings by the Commission. In that respect the Commission 1s prepared to provide Mr Woollard with an assurance that, subject to his full and = frank cooperation with the Commission, including if necessary assisting it 1n any legal proceedings which might ensue, the Commission will not take any legal proceedings against him in relation to this matter."

A draft undertaking proposed by the Commission accompanied the letter. There followed further correspondence and ultimately Corrs wrote to the Commission indicating that Mr Woollard was disposed to accept its offer. The Commission,

by letter of 8 June 1994, then nominated 29 June 1994 as the

date of the proposed interview. In part the letter read as

follows:

"As indicated in its letter of 10 March 1994, the Commission is offering Mr Woollard an indemnity in the terms attached to that letter and subject to the conditions described in the indemnity itself. Mr Woollard's attendance at the interview on 29 June will indicate his acceptance of those conditions.

In the interests of time and accuracy, I propose' that the interview be tape recorded. ... The information obtained from Mr Woollard at the 29 June interview, the information provided by him at _ the section 155 hearing, together with any material available in the public domain will be used to prepare a draft statement. A draft statement will be available for discussion in early July."

On 29 June 1994 Mr Woollard attended at the offices of the Commission represented by a Mr McCann of Corrs and Mr Reynolds of counsel. At that meeting a redrafted form of indemnity was presented and discussion took place about it. Amendments of a relatively minor nature were proposed and agreed to. The interview was then set to commence. It was taped and the indemnity, as agreed to in the prior discussions, was incorporated in the record of that interview.

The indemnity is in the following terms:

"(1) This undertaking is provided by the Trade Practices Commission to Peter Woollard subject to the condition that Peter Woollard will, if requested to do so, provide the Trade Practices Commission with a_ signed

(2)

statement containing a full and frank account of his knowledge to the best of his recollection of the true facts surrounding discussions and arrangements in or about September and/or October 1988 between building companies and the Australian Federation of Construction Contractors in relation to special fees and/or unsuccessful tender fees. In respect of the preparation and lodgement of tenders for the construction of the building known as Commonwealth Officers (sic) Haymarket, Sydney, and will if requested to do so will give evidence as to the facts in court.

Subject to satisfaction of the conditions outlined above the fTfrade Practices Commission hereby undertakes that it will not at any time take or cause to be taken any legal proceedings under the Trade Practices Act 1974 against Peter Woollard in respect of any involvement by him during the period I January 1988 to the date hereof in any conduct concerning discussions and arrangements in or about September and/or October 1988 between building companies and the Australian Federation of Construction Contractors in relation to special fees and/or unsuccessful tender fees, in respect of the preparation and

lodgement of tenders for the construction of the building known as Commonwealth Officers (sic),

Haymarket, Sydney, nor will the Trade Practices Commission make use of the information or any part thereof provided by Peter Woollard in accordance with the conditions in paragraph (1) in any other legal proceedings by the Commission against Peter Woollard."

The matter of the indemnity being agreed the interview commenced and continued until lunchtime. After lunch a representative of the Commission stated that it was thought that Mr Woollard was not being full and frank and there was no point in continuing with the interview. Mr Reynolds asked in what respect Mr Woollard had not been full and frank. Mr Quinane, an officer of the Commission, made reference to evidence obtained through interviewing personnel engaged with or connected to Holland Stolte Pty Limited and Multiplex Constructions Pty Limited, but refused to be specific. The interview then concluded. I interpolate by saying that in the present proceedings nothing was heard

further about the alleged evidence which Mr Quinane referred

to.

In early August 1994 Mr McCann was advised by the Commission that it wished to resume the interview. In 50 doing it presumably did not believe that Mr Woollard's

evidence was really lacking in frankness or was then, at

least, prepared to overlook any such lapse. The Commission nominated 22 August 1994 for this purpose. The renewed interview was, however, cancelled by the Commission. On the

evening of 22 August 1994 Mr McCann rang Ms Painter, an officer of the Commission, and was advised that the Commission had a serious problem with Mr McCann continuing to represent both Mr Woollard and CC. Ms Painter said words to the effect

that the undertaking would not be given if Mr Woollard

continued to retain Mr McCann. The fact that it already had been appears to have escaped her. The interview was to take

place before Mr Philip Clay, counsel assisting the Commission.

On 23 August 1994 Mr McCann wrote to the Commission referring to the question of conflict and noting that it had been recognised and "dealt with appropriately". The letter stated that Mr Woollard had reconfirmed his instructions to Corrs and would attend an interview. The letter read, inter

alia, as follows:

"... Mr Woollard:

(1) will, if requested to do so, provide the Commission with a signed statement containing a full and frank account of his knowledge to the best of his recollection of the true facts Surrounding discussions and arrangements 1n or about September and/or October, 1988 between building companies and the Australian Federation of Construction Contractors in relation to special fees and/or unsuccessful fees in respect of the preparation and

lodgement of tenders for the construction of the building known as Commonwealth Offices, Haymarket, Sydney;

(2) will, if requested to do so, give evidence as to the facts in Court."

As has already been noted Mr McCann had acted for Mr Woollard and CC in respect of the Royal Commission. Corrs did not, however, in respect of the Royal Commission, render

accounts to Mr Woollard, the accounts were rendered directly

to CC. In addition to the correspondence to which I have referred, the matter of the conflict which he was in had been raised with him by Mr Quinane in at least two conversations, one in February and the other in March. On each occasion Mr McCann had indicated to Mr Quinane that Corrs were looking

into the question of conflict.

Mr McCann clearly perceived at all times that acting at the same time for CC, which was a likely defendant in Part IV proceedings to be taken by the Commission, and also for Mr Woollard in seeking to take advantage of the indemnity

offered by the Commission in exchange for a full and frank

disclosure, involved a possibility of conflict. In his own words "it was impossible for us to act". He perceived the conflict to be real and diametric. However, he saw the

question of conflict as a matter for the clients provided he

gave full disclosure to them.

In due course a document was signed by Mr Woollard. Although not in evidence, it would seem that a similar document was signed by CC. The document signed by Mr Woollard

was in the following form:

"TO: Concrete Constructions Group Pty Limited ...

AND TO: Corrs Chambers Westgarth

I hereby acknowledge your advice to me of today's date as follows:

- 10 -

that my intended evidence to the Trade Practices Commission by reason of the intended indemnity, subject to my giving full and frank evidence, will not expose me to a civil or criminal prosection (sic);

that my evidence before the Trade Practices Commission may however lead to, or be a link in the chain, for a prosecution of Concrete Constructions;

that Concrete Constructions has to date provided full indemnities to myself and will continue to do so upon the clear understanding that the evidence given by me before any Trade Practices Commission inquiry will not materially depart from the evidence already provided to Corrs Chambers Westgarth and/or produced as part of Royal Commission Into Productivity In the Building Industry statements and/or as part of any other Committee of inquiry where Corrs Chambers

Westgarth has represented my interest. I hereby waive confidence or

privilege of communications to Corrs Chambers Westgarth to the extent of Corrs Chambers Westgarth's retainer with each other representative of Concrete Constructions and Concrete Constructions itself.

I further acknowledge:

5.1 that Corrs Chambers Westgarth

are retained by Concrete Constructions generally and separately by former and current officers and employees of

Concrete Constructions.

5.2 that a conflict may arise and I hereby authorise Corrs Chambers Westgarth to continue to act for each and/or any of the other officers and employees of Concrete Constructions.

- l1ll1-

5.3 that if a conflict of interest does arise Corrs Chambers Westgarth may, at Concrete Constructions's (sic) direction and in its absolute discretion, cease acting for any or all former and current employees of Concrete Constructions. If such an event occurs the above Paragraphs will apply to our continuing retainer so that Corrs Chambers Westgarth shall not be prevented from utilising confidential or privilege communications, acting for former and current employees of Concrete Constructions and that no objection shall be taken to Corrs Chambers Westgarth's continued involvement because of a real or apparent conflict.

5.4 that in the course of obtaining instructions Corrs Chambers Westgarth may become privy to confidential information which Corrs Chambers Westgarth shall communicate to other clients in discharging our duty as solicitor to them.

5.5 that I have been given' the Opportunity to seek independent legal advice and that notwithstanding that opportunity I wish to be represented by Corrs Chambers Westgarth.

DATED: 30th March, 1994",

Mr McCann did not disclose to the Commission the way

he had sought to resolve the conflict question.

Mr Woollard in due course attended, together with Mr McCann and Mr Reynolds, an interview on 25 August scheduled to take place in the chambers of Mr Sweeney QC. On arrival Ms

Painter handed Mr McCann a letter in the following terms:

"I note your advice that Mr Woollard has reconfirmed your instructions to continue to act for him upon resumption of the interview. I also note that you continue to act for a company (Concretes) that may well be a respondent in proceedings which may be brought by my client in relation to the matter.

As you will be aware, it is a condition of the proposed undertaking to be given to Mr Woollard that he provide a full and frank statement of his knowledge of the matter. Accordingly, it will be necessary for certain questions to be put and material to be shown him which may form part of my client's case. It will also be necessary to proof Mr Woollard with respect to the evidence he may give in court concerning these matters in accordance with the terms of the proposed indemnity. I consider that it will not be possible for a statement as contemplated in the proposed indemnity to be provided by Mr Woollard in the presence of a solicitor acting for Concretes, given the need for frankness and the fact that privileged and confidential material needs to be discussed.

Accordingly, my client requires that Mr Woollard attend the interview represented by solicitors who do not act for any of the potential respondent parties to the

contemplated proceedings. Mr Woollard, may, of course, be represented by another solicitor of his choice or be unrepresented.

My client regards any insistence upon your presence as amounting to a refusal to provide a full and frank account of the matters as it prevents my client from obtaining such a statement.

In the event Mr Woollard insists that you represent him whilst the statement is being obtained or a proof is being taken off his evidence, this conduct will be regarded as a failure to comply with the terms of the proposed indemnity, the indemnity will no longer be available and the interview will not proceed. In that event it is also possible that Mr Woollard will be joined as a respondent to any proceedings which might be brought by my client."

Mr Woollard and his advisers then adjourned to discuss the letter. They sought further time to consider the question of representation which was agreed upon. On the next

day Mr McCann faxed a reply which, omitting formal parts, read

as follows:

"In order to obtain the benefit of the undertaking given by Mr Quinane on behalf of the TPC on 29 June, Mr Woollard is under no obligation to submit to interrogation by one of Her Majesty's Counsel in a taped interview. His obligation will be fully satisfied if upon request he provides a signed statement containing 'a full and frank account of his knowledge to the best of his recollection of the true facts surrounding the discussions' referred to in paragraph (1) of the transcript of 29 June and if upon request he gives 'evidence as to the facts' in Court.

The procedure adopted during yesterday's hearing and the contents of your letter are intimidatory, harassing and, moreover, a breach of the terms of te agreement made on 29 June between Mr McCann on behalf of Mr Woollard and Mr Quinane on behalf of the TPC.

Our client remains prepared to honour his part of the agreement by both providing a signed statement (if so requested) and by

- 14 -

giving evidence as to the relevant facts in Court (if so requested). However, our client denies your client's entitlement to submit him to a taped interrogation by Queen's Counsel or anyone else.

Your letter amounts to a threat to breach an express negative stipulation contained in the agreement of 29 June. The threatened breach is to take legal proceedings against Mr Woollard despite

his clearly stated and reiterated willingness to comply with his part of the agreement.

What we have said above makes it unnecessary for us to traverse in detail the other contentions contained in your letter under reply. However, we reserve our client's rights in relation to each of the other matters raised by you in that letter.

Please confirm by 2.00 pm on 30 August, 1994 that your client will not bring proceedings (as specified in the undertaking) against Mr Woollard provided that Mr Woollard:

(a) if requested by the TPC, provides to the TPC a signed statement concerning the matters specified in the undertaking; and

(b) if requested by the TPC, gives evidence in Court as to the facts specified in the undertaking.

Our client expressly reserves his rights in relation to your tJletter and, in particular, his rights to claim injunctive

relief in respect of your client's breach of the agreement of 29 June."

The Commission responded the same day forwarding its response by facsimile transmission to Mr Reynolds' chambers

where it was not seen by him until late on the evening of

Sunday, 28 August 1994. The response was in the following

terms:

"I refer to the above matter and to your advice of even date. I would note firstly that under the arrangements agreed with Mr Woollard, he is required to provide a signed statement containing a full and frank account of his knowledge of the matter. To enable such a statement to be obtained, my client's representatives must be able to put matters to Mr Woollard, and test the responses given by Mr Woollard, without representatives of other potential respondents being present during' the discussion.

It is not for Mr Woollard to elect who takes that statement or who puts to him the various relevant matters his statement

is required to address. It is also not for him to decide whether the statement given be recorded for subsequent

transcription (so that it can be singed) by handwritten notes, tape recording or any other available and practical means.

The means by which Mr Woollard's statement is taken is not the issue here, although you seek to make it so. The issue, which you chose not to address in your letter under reply, 1s whether Mr Woollard is Prepared to give the requisite statement, other than in the presence of the solicitor and/or Counsel for one of the potential respondents.

As the record shows, his was the issue that lead to the discontinuance of Thursday's meeting; the discontinuance had nothing to do with the means by which the statement was taken which, I note, was the means used in previous meetings.

Your allegations of intimidation and harassment are ill founded and offensive. Mr Woollard has now on two occasions refused to provide a statement as requested by my client. On the first occasion (29 June 1994) Mr Woollard refused to provide full and frank answers

to questions thus requiring the interview to be terminated. On the second occasion (22 August 1994) Mr Woollard refused to provide a statement without having the solicitor and counsel for another potential respondent present, ie he insisted on circumstances that made it impossible to properly take that statement. He has accordingly failed to provide the statement as requested and is thus in breach of the agreement reached.

My client, reserving its rights in respect of previous failures, 1s prepared to offer Mr Woollard one final opportunity to honour his part of the agreed arrangements. He is accordingly requested to attend Mr Sweeney QC's chambers at 2.00 pm on Monday 29 August 1994 to provide the requisite statement. As previously advised, he may be assisted by legal advisers provided they are not associated with any of the potential respondent parties. If he fails to attend and honour the arrangements at that time, he will be considered to have again failed to provide a requested statement. In those circumstances no indemnity will be furnished and Mr Woollard will be liable to be joined as a respondent to any proceedings my client may bring should available evidence so warrant.

Would you please let me know by return, and in any event by 10:00 am Monday 29 August 1990 (sic) whether Mr Woollard is prepared to make himself available for such interview without being accompanied by a solicitor or Counsel associated with potential respondents to the matter."

The substantive proceedings were commenced by the filing of an application and statement of claim in this Court on Tuesday 30 August 1994. It is against this background that

Mr Woollard's application and motion fall to be considered.

The eedings w before the Court

By his application Mr Woollard seeks judicial review of the Commission's decision to commence the substantive proceedings against Mr Woollard. By the motion in the substantive proceedings, Mr Woollard seeks an order that the substantive proceedings be stayed and that the Commission be restrained in effect from proceeding further against Mr

Woollard.

Mr McCann foreshadowed the present proceedings to the Commission in a letter dated 8 September 1994. The Commission responded the next day in what, if I might say so, was a somewhat high-handed way requiring that action be taken immediately and asserting that it was already too late in any event for that to happen. This attitude precipitated counsel for Mr Woollard applying to the Duty Judge to have the application and motion determined as a matter of urgency. When the matter came on, counsel for the Commission was insistent that urgency prevailed. It was said the matter would take three hours. In truth the hearing has spread over many more hours than that and over a number of days. On the face of it it is difficult to see why such great urgency was required, accepting of course that the outcome of Mr Woollard's application and motion would play some part in directions that might be made in the substantive proceedings

in the meantime. There are other matters before the Court

with at least the same, if not greater, urgency which are not given priority. To say, as counsel said, that urgency was required because of the public interest in that allegations of abuse of power were made against the Commission, rather suggest the Commission's real view to be that matters in which it is a party be given priority over matters involving other

litigants, no matter how urgent such other matters might be.

In support of his case counsel for Mr Woollard, not surprisingly, relied upon the indemnity agreement. In response, senior counsel advanced five matters which, it was submitted, operated to invalidate the indemnity which the Commission had given Mr Woollard. These matters were particularised by counsel, in response to an invitation from

the bench, in the following terms:

1. By insisting upon appearing to be proofed with a solicitor acting for CC, Mr Woollard breached an implied term of the undertaking agreement, that term being that he would make himself available to enable the preparation of a full and frank statement in circumstances where he was not represented by a solicitor for a party against whom it was likely that the Commissioner would take proceedings.

2. That Mr Woollard had in any event failed in his obligation to give a full and frank statement in that

what he told the Commission in the interview of 29 June

- 19 -

1994 was incorrect, not frank but evasive and prevaricating. 3. That Mr Woollard breached the undertaking by refusing to

accede to a request by the Commission to attend and be interviewed by senior counsel retained by the Commission.

4. So far as the proceeding under the Administrative Decisions (Judicial Review) Act is concerned, the

decision to commence proceedings against Mr Woollard was not a decision of an administrative nature subject to review under that Act.

5. That Mr Woollard breached an express term of the undertaking. Precisely what express term was referred to or how this particular ground added to the particulars supplied of other grounds was not expressed nor was the ground argued separately. Accordingly I put it to one

side.

There was no dispute between the parties that the undertaking recorded in the transcript of the meeting of 29 June 1994 constituted a binding agreement between the parties. It was further accepted that unless Mr Woollard was in breach of that undertaking, the Court had jurisdiction to grant a stay of proceedings against Mr Woollard: cf Walton v Gardiner (1992-93) 177 CLR 378 at 392; Saffron v Federal Commissioner of Taxation (1992) 109 ALR 695 at 699 per Beaumont J. It was not suggested otherwise that it would be inappropriate to

exercise that jurisdiction in the present case.

I shall deal with each of the matters raised by

senior counsel for the Commission in the order set out above.

Breach of an implied term

The circumstances in which a term may be implied in a contract are now well delineated: B.P. Refinery

West td. v President, Councillors and Ratepayers of Shire of Hastings (1977) 52 ALJR 20, as approved by the High Court in Codelfa Construction Proprietary Limited

v State Rail Authority of New South Wales (1981-82) 149 CLR 337 at 347. As summarised by the Privy Council in BP (at 26),

the conditions necessary for the implication of a term are as

follows:

"(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that it 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."

In written submissions the Commission put its case differently from that originally particularised. It was said, first, that there was an implied term that Mr Woollard make himself available at the reasonable request of the Commission for proofing in order to enable the Commission's legal

advisers to prepare a full and frank witness statement for

- 21 -

him. It was then said that it was accepted, although not part of the Commission's case, that it should be concluded that there was an implied term that Mr Woollard be entitled to have present with him at the interviews necessary to proof him, a solicitor to advise and assist him. If such a right existed, it was said, Mr Woollard bore a burden to persuade the Court

that the right to have legal representation was:

",.. @ right to be represented by a solicitor who was paid by and acting for a proposed respondent and who had a contractual obligation to report events to @ proposed respondent in circumstances where such a report might adversely affect Woollard's financial position by jeopardising his costs indemnity agreement and by a solicitor with whom he had made an arrangement which might operate to his financial detriment if he gave evidence which varied from the version of events which he had given to the solicitor."

It was said that the burden had not been discharged

in the present case.

Counsel for Mr Woollard denied that it was necessary to imply such a term to give business efficacy to the arrangement or that such a term was reasonable and equitable. The argument in substance was that the undertaking did no more than envisage a request by the Commission to Mr Woollard to provide a signed statement, the provision of a signed statement (full and frank), a requisition to give evidence and

the giving of evidence in court. So it was said that however

desirable the implied term suggested by the Commission might

be, it was not an essential sine qua non of the arrangement.

It was said also that the implied term contradicted the express term, although with respect to the suggestion I do

not see how that can be the case.

It is permissible in determining whether or not a term should be implied in an agreement to look at the surrounding circumstances. It is difficult to construe the undertaking as if Mr Woollard could prepare a statement without reference at all to the Commission and sign it and then assert that the obligations under the agreement had been complied with. In my mind it is implicit in the arrangement that the statement which Mr Woollard is required to sign is one prepared after interview between the Commission and Mr Woollard. That this is so becomes obvious enough when the context of the undertaking is examined. The undertaking was given in the context of an interview that was to take place for the purpose of determining what the statement was that Mr Woollard could give. It is difficult to put out of one's mind as well the reality of the situation that someone must prepare the statement and given that the statement was ultimately likely to be used to assist the Commission in presenting evidence, that the Commission would be the appropriate party

to prepare it and accordingly proof Mr Woollard.

Given the background in which the undertaking was given, I have no doubt that it is necessary to imply some term to give the undertaking business efficacy. All that 1s necessary, 1n my view, is a term to the effect that Mr Woollard would do all things reasonably necessary to enable a statement to be prepared by the Commission for him to sign. Such an implied term (somewhat wider perhaps than that suggested by the Commission) clearly included the Commission

proofing Mr Woollard to prepare the statement.

I have little doubt also that it was implicit in the arrangement that Mr Woollard would be entitled to representation of his choice should he choose to be

represented while being questioned.

However I do not think it is possible to go further than this. In particular it can not be an implied term of the undertaking that Mr Woollard be entitled to be represented only by solicitor or counsel of his choice, not being a solicitor or counsel who might represent some other party ina conflicting interest. The implied term must ultimately sit with the express term. The express term requires no more than that Mr Woollard's statement be full and frank. There is no reason to believe that the identity of Mr Woollard's legal representation would bring about the result that a statement

ultimately prepared would not be full and frank.

- 24 -

In my view, the Commission fails in its first submission. I should say also that to the extent that it 18 not part of the Commission's case that there be an implied term that Mr Woollard be entitled to have present with him a solicitor to advise and assist him, then there is nothing in the term which the Commission now seeks to imply which in any way has been breached. The only term then left, namely that Mr Woollard make himself available at the reasonable request of the Commission for proofing in order to enable the Commission's legal advisers to prepare a full and frank witness statement, is not shown to be breached by virtue of the fact that Mr Woollard has chosen to employ a legal adviser

whose identity is unsatisfactory to the Commission.

I should however say something about Mr McCann's position because it is bound to arise sooner or later. While the Commission may have no right to cancel the indemnity on the basis that Mr McCann acts both for Mr Woollard and CC, Mr McCann's position, in my view, is, on the evidence before the Court, quite untenable. There is, as Mr McCann recognised, a significant possibility of conflict. The conflict is so acute that mere disclosure to the parties of the conflict and authorisation that the conflict continue even where the parties are given the opportunity to seek independent legal advise on the question of authorisation, can not solve the problem. Mere consent of the parties to the continuation of a

conflict is not enough. There must be informed consent in the

real sense of those words: cf Commonwealth Bank of Australia v Smith (1991) 42 FCR 390. That 1s not the case here. Whatever

may be the situation where different persons in one firm act for clients of competing interest (the so-called Chinese-Walls case) it is obvious that a solicitor can not place himself in a position where he or she has a duty to parties with conflicting interests where one party is under financial duress to accede to that course and no independent legal advice is obtained from an adviser fully informed of all the

material facts and circumstances of the case.

In Smith (at 393) a full court, constituted by

Davies, Sheppard and Gummow JJ commented at 393:

"(We pause to say that various courts in a number of jurisdictions have decried the practice of the one solicitor acting for both vendor and purchaser... It is an undesirable practice and it ought not to be permitted. )"

Their Honours remarks are, clearly, even more pertinent in the circumstances of the present case where the conflict is more critical and acute. The present is clearly a case where Mr McCann, to use the language of Lord Cozens-—Hardy MR in Moody v Cox [1917] 2 Ch 71 at 81, should have said: "I

cannot accept this business."

rd@_in j view fail ive a ful

frank statement

As a threshold matter, counsel for Mr Woollard submitted that Mr Woollard's only obligation was to provide a signed statement at the request of the Commission which signed statement was full and frank. From that submission it presumably must follow that no matter how many untrue or unfrank comments Mr Woollard were to make in a conference with

the Commission, the undertaking would still stand.

The submission ignores the term which I have held should be implied into the agreement between Mr Woollard and the Commission to do all things reasonably necessary to enable a statement to be prepared. If Mr Woollard in a conference with the Commission for the preparation of that statement provided information which was untrue for the purpose of a statement being prepared which thus would be untrue, in my view, he would be in breach of the terms of the undertaking. I turn, therefore, to consider whether in the interview Mr Woollard was untruthful in relation to matters the subject of

the Commission's undertaking.

The passage relied upon by counsel for' the

Commission appears in the following exchange which took place

between Mr Quinane and Mr Woollard.

"Quinane: So in respect of the propositions that I've been putting you don't subscribe to the view that these tenderers meetings

were conducted under the pre-disposition, if you like, that tenders would be adding automatically whatever was agreed at those meetings?

Woollard: From my own personal experience I would not have thought that they would all add on that figure.

Quinane: That's not the question I put to you. You

don't subscribe to the view that attendance at those meetings by tenderers was acceptance of the fact that they were automatically going to add on the level of fee that was agreed at the meeting?

Woollard: No, certainly not."

It is necessary to understand that exchange in the context of the "propositions" that Mr Quinane had been putting to Mr Woollard. After an interchange between Mr Quinane and Mr Reynolds about Mr Quinane's authority to give the undertaking and the impact of legal professional privilege on the indemnity, Mr Woollard was taken to the transcript of proceedings conducted by the Commission pursuant to s.155 of the Act. He was then asked some general questions unrelated to particular projects about the funding by CC of unsuccessful tenderer fees. The questions were neither limited in time nor limited to particular projects. A specific question was then asked by reference to the "Haymarket project" and the interview moved to what Mr Quinane referred to as "standard practice in the industry for many, many years" and reference was made to a suggestion said by Mr Quinane to have been given

to the Commission by an industry participant that the practice

of tenderer's meetings agreeing quantums of special fee and/or quantums of unsuccessful tender fee had been in the industry for many, many years. Mr Woollard disagreed with that proposition but conceded that there had been a practice in the

industry for many, many years which was a world wide practice.

In this context the question in its reference to "these tenderers meetings" appears to have been or could be understood as being a reference to meetings which Mr Quinane

had suggested had been held over many, many years.

The subject matter of the undertaking, on the other hand, was arrangements said to have occurred between September and October 1988 in respect of the Haymarket project. In this context, therefore, it is hard to see how the answer can be

said to be a breach of the undertaking.

Counsel for the Commission before me cross-examined Mr Woollard by reference to passages from the transcript of Mr Woollard's evidence before the Royal Commission, some extracts of which were tendered. In one page of the transcript of the Commission's proceedings Mr Woollard had said that he would expect that a successful tenderer would include in a tender an allowance for the unsuccessful tenderers' fees as part of the cost of the project. Incidentally an earlier question on the page suggested that Mr Woollard may have been of the view that

there were tenderers who did not include the unsuccessful

- 29 -

tender fee in their price consistent with his answer to the

Commission. On another page Mr Woollard was asked:

"Although nothing is said, you understand that each of the tenderers who enters into the agreement will, in fact, include an allowance for the unsuccessful tenderers' fees in its tender?"

Answer: "I would say so, yes."

It is not clear at all whether this last question had any relationship to the period referred to in the indemnity or what the agreement was in respect of which Mr

Woollard was being questioned.

In written submissions counsel for the Commission submitted that certain answers given by Mr Woollard in cross-— examination were inconsistent with the answers he gave at the Royal Commission. Whether that was or was not the case is not a matter which I propose to determine because it throws no light on the question whether Mr Woollard was frank in the answers he gave to Mr Quinane at the interview. One of the problems with the cross-examination as with the question asked by Mr Quinane is that questions were unlimited as to time and related not, or not only, to the period covered by the undertaking. Further, the questions asked of Mr Woollard in cross-examination related to cases where Mr Woollard had

himself made agreements about unsuccessful tender fees,

whereas the questioning in the Royal Commission was not always

so limited.

Ultimately the onus, at least in a tactical sense, must lie upon the Commission to show that Mr Woollard breached the undertaking as a result of which he 1s no longer entitled to the indemnity. In my view the Commission has not succeeded

in discharging that onus.

I should remark that senior counsel for the Commission in written submissions made reference to the fact that in evidence before me Mr Woollard had, on the advice of his counsel, refused to answer certain questions on the grounds that the answers might tend to incriminate him. Just what I was supposed to do with this information is difficuit to say. It can hardly be thought that senior counsel for the Commission would be submitting that because a person objected to answering a question on the ground of privilege against

self-incrimination, that an inference should be drawn.

The second ground is accordingly not made out.

8 o the Commissioner' est to attend an be interviewed by senior counsel

This matter can be dealt with quite shortly. The submission was not put with great force and correctly so. The

so-called refusal occurred after the meeting at which Mr

Woollard had been told the indemnity did not exist unless he was represented by some other' solicitor. There was no obligation on Mr Woollard to attend Mr Sweeney's chambers and give evidence without the representation of his choice. In these circumstances it can not be said that Mr Woollard was in

breach of the undertaking.

The challenge to jurisdiction under the Administrative Recisions (Judicial Review) Act

I need not decide this matter since I am of the view, having rejected the earlier submissions of the Commission, that the matter is an appropriate one in which a stay should be given with liberty to apply in the event that Mr Woollard does, in the future, breach the undertaking. I would propose accordingly to dismiss the application brought by Mr Woollard under the provisions of the Administrative Decisions (Judicial Reyjew) Act, declining to make an order under that Act as a matter of discretion. I should say that, as presently advised, I see no reason why a decision to institute prosecution by the Commission would not be a

decision to which the provisions of the Administrative Decisions (Judicial Review) Act apply.

I would make the following orders.

1. In respect of the motion I would stay the proceedings

number NG547 of 1994, so far as they relate to the claims

against Mr Woollard generally, but wath liberty to

restore the motion on 7 days' notice.

2. I would dismiss Mr Woollard's application number NG613 of 1994 and in respect of that application make no order as

to costs.

3. In respect of the motion I would direct the Commission to

pay Mr Woollard's costs.

I certify that this and the preceding thirty-one (31) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Hill.

Associate: —)

a

Date: 28 September 1994

Counsel and Solicitors CA Sweeney QC with CC Hodgekiss

for Applicant: and PR Clay instructed by Australian Government Solicitor

Counsel and Solicitors TE Hughes OC with GO Reynolds

for Respondent: instructed by Corrs Chambers Westgarth

Dates of Hearing: 16, 26 & 28 September 1994

Date Judgment Delivered: 28 September 1994