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ROYAL COMMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS AND DOCKERS UNION
Commissioner: Mr Frank Costigan, Q.C.
Final Report
Volume 1
Pursuant to Resolution of the Senate of 22 October 1984-(l) Deemed to have been presented to the Senate, and publication authorized, on 1 November 1984,
and
(2) Ordered to be printed, on the authority of the President of the Senate, on 1 November 1984
Parliamentary Paper No. 284/1984
ROYAL COMMISSION ON the activities of the Federated Ship Painters and Dockers Union
FINAL REPORT, Volume 1
The Government of the Commonwealth of Australia
and
The Government of the State of Victoria
ROYAL COMMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS AND DOCKERS UNION
Commissioner: Mr Frank Costigan, Q.C.
Final Report
Volume 1
Ord ered to be printed by the Legislative Assembly Victoria 1982-84
No. 175
ISBN for set: 0 644 03746 6
ISBN for Final Report -Volume 1: 0 644 03747 4
Publisher's note: This publication has been reproduced in part from photocopies of the original documents. Any loss of definition in reproduction quality is regretted.
Printed by Authority by the Commonwealth Government Printer, Canberra 1984
26 October 1984
Your Excellency,
In accordance with Letters Patent dated 10 September 1980, I had the honour to present in March, July and December
1981, July 1982 and July 1983, Interim Reports of the Royal
Commission into the Federated Ship Painters and Dockers' Union.
I now have the honour to present to you my Final
Report of the Royal Commission and I return herewith my Letters Patent.
I have the honour to be sir,
Your Excellency's most obedient servant,
A- 1 f I --2
.-·
I
Costigan
Commissioner
His Excellency the Rt. Hon. Sir Ninian Stephen, A.K., G.C.M.G., G. C. V .0., K.B.E., Governor-General, Government House,
CANBERRA A.C. T. 2600
26 October 1984
Your Excellency,
In accordance with Letters Patent dated l October
1 980, I had the honour to present in March, July and December
1981, July 1982 and July l9tl3, Interim Reports of the Royal
Commission into the Federated Ship Painters and Dockers' Union .
I now have the honour to present to you my Final
Re port of the Royal Commission and I return herewith my Letters Patent.
I have the honour to be sir,
Your Excellency's most obedient servant,
FJ ank Costigan Commissioner
His Rear Admiral Sir Brian Murray,
K.c.M.G., A.O., Governor of Victoria, Government House, MELBOURNE Vic. 3000
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COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Queen of Australi a and Her o t her Realms and Territories , Head of the
Commonwealth:
TO FRANCIS XAVIER COSTIGAN,Q.C., LL.B.
GREETI NG:
WE DO by these Our Letters Patent issued in Our name by Our
Governor -Gene r al of the Commonwealth of Australia on the advice
of the Federal Executive Council and in pursuance of the
Co nstitution of the Commonwealth of Australia, the Royal
Commissions Act 1902 and other enabling powers, appoint you
t o be, on and from l October 1980, a Commissioner to inquire ,
f o r t he purpose of the exercise and performance of the powe r s
and functions of the Parliament and Government of the
Commonwealth , whether the Federated Ship Painters and Dock e r s
Unio n (hereinafter referred to as "the Union") or any of f ice r
o r member of the Union has engaged in illegal activities in
rela tion to Shipping engaged in trade and commerce between
Aus t ralia and places outside Australia or among the States o r
sh i p s o perated by, or on behalf of, the Commonwealth or in
relation to any naval establishment within the meaning of the Na v al Defence Act 1910:
AND, without restricting the scope of your inquiry, We direct
you, for the purposes of your inquiry, to give particular
attention to the following questions :
(a) whether any executive, administrative or other body
forming part of, or established by, the Union ha s
been used, or is being used, for the purposes of
/'7
F /
2.
illegal activities, other than activities involving only breaches of laws, whether of the Commonwealth
or a State, relating to trade unions;
(b) whether the Union or any of its officials ormembers
has been or is engaged in demanding or receiving
payments (other than payments of an ordinary
commercial nature or payments in accordance with an
industrial. award or agreement in respect of work actually performed or to be performed) from
employers or other persons in relation to ships
engaged in trade and commerce between Australia and
places outside Australia or among the States, in
relation to ships operated by, or on behalf of, the
Commonwealth or in relation to any naval
establishment within the meaning of the Naval
Defence Act 1910 and, if any such payments have
been made -(i) the persons by whom and to whom any such
payments have been made;
(ii) the reasons for, or the purpose of, any such
payments;
(iii) subsequent or proposed use or disposal
of any such payments;
(c) whether the Union or any officers or members of
the Union have engaged in illegal activities in
relation to the election or appointment of officers of the Union or the conduct or purported conduct
of the Union's affairs;
(d) if the Union or any officers or members of the
Union have engaged in activities of any of the kinds
y . / .. / 3
3.
referred to in this or the preceding paragraphs, wh e ther the e mployme nt conditions applying
t o the wor k o f ship painters and dockers have
contribute d to the de velopment of those activities : AN D We d irect you t o make such recommenda t ions arising out
o f your inqu iry as you think appropriate, including
recomme nd a tions r e g a rding the legislative or administrative
changes, i f any, that are necessary or desirable:
AND W e f urther direct that any finding that the Union or any
off ice r o r member o f t he Union has engaged in conduct
amou n ting to a crimina l offence be made only o n e v idence,
adm i s sibl e i n a Court o f Law, sufficient t o place the Union,
off icer or member on trial for that offence.
AN D W e further direct that, in making your recommendations,
you h a v e regard to t he announced intention of the Government
of t he Co mmonwealth t o introduce a s y stem of reporting of
d em ands for, and pay me nts of, monies following the report
of t h e Royal Commissi o n into Alleged Payments to Maritime
Un i o ns by the Honourable Mr Jristice Sweeney:
AND We declare that you are authorized to conduct your inquiry
into any matters under these Our Letters Patent in combination
with any inquiry into the same or related matters that you are
d ir e c ted or authorized to make by any Commission issued,
o r in pursuance of any order or appointment made, b y any of
Our Governors of the States:
AND W e require you as expeditiously as possible to make your
inquiry and -
.. I 4
By His
4.
(e) not later than 31 March 1981, to furnish
to Our Governor-General of the Commonwealth of
Australia an interim report of the results of
your inquiry; and
(f) not later than 30 September 1981, or such
later date as We may be pleased to fix, to
furnish to Our Governor-General of the
Commonwealth of Australia a report of the results
of your inquiry and your recommendations.
WITNESS His Excellency Sir Zelman Cowen, Knight of The Order of Australia, Knight Grand Cross of The Most Distinguished Order of Saint Michael and Saint George, Knight Grand Cross of The Royal Victorian Order,
Knight of The Most Venerable Order of the Hospital of Saint John of Jerusalem, one of Her Majesty's Counsel learned in the law , Governor General of the Commonwealth of Australia and Commander-in Chief of the Defence Force.
Dated this day of 1980.
Excellency's Command
M· n Trade and
R urces for and on behalf of the
Prime Minister
COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Queen of Australi a
and Her other Realms and Territories, Head of the Commonweal th:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B.
GREETING:
WHEREAS by Letters Patent issued in Our name by Our Go vernor-
General of the Commonwealth of Australia on 10 September 1980
We appointed you to be a Commissioner to inquire into and
report upon certain matters relating to the Federated Ship
Painters and Dockers Union and the officers and members of
that union:
AND WHEREAS by those Letters Patent We required you to
furnish to Our Governor-General of the Commonwealth of
Australia, not later than 30 September 1981 or such later date
as We may be pleased to fix, a report of the results of your
ro
inquiry and your recommendations:
NOW THEREFORE We Do, by these Our Letters Patent issued
in Our name by Our Administrator of the Government of the
Commonwealth of Australia on the advice of the Federal Execut ive
Council, fix 31 December 1982 as the date on or before which
We require you to furnish to Our Governor-General of the
Commonwealth of Australia a report of the results of your
inquiry and your recommendations.
By His Excellency's Command,
WITNESS His Excellency the Honourable Sir Stanley Charles Burbury, Knight Commander of The Royal Victorian Order,
Knight Commander of The Most Excellent Order of the British Empire, Knight of The Most Venerable Order of the Hospital of Saint John of Jerusalem, Administrator of the Government of the Commonwealth
of Australi-a.
Dated this twenty fifth day of June
/ft
./Admin
Minister of State for Industrial Relations for and on behalf of the Prime Minister
1981.
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COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Qu e en of
Australia and Her other Realms and Territories, Head
of the Commonwealth:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B.
GREETING:
WHEREAS by Letters Patent issued in Our name by Ou r
Governor-General of the Commonwealth of Australi a on
10 September 1980 We appointed you to be a Commiss i oner
to inquire into and report upon certain matters
relating to the Federated Ship Painters and Docke rs Union (qereinafter referred to as "the Union") and
the officers and members of that Union:
AND WHEREAS it is desirable that your inquiry
include certain matters that may not fall directly
within the matters to be inqui red into under t h e
Letters Patent issued on 10 September 1980 :
)
J I
NOW THEREFORE We do, by these Our Letters Patent
issued in Our name by Our Governor-General of the
Commonwealth of Australia on the advice of the Federal
Executive Council and in pursuance of the Constitution
of the Commonwealth of Australia, the Royal Commissions
Act 1902 and other enabling powers, vary the Letters
Patent issued on 10 September 1980 so as t o require
that, to the extent that you are not required to do so
by those Letters Patent, you inquire -(a) whether the Union or any officers or members
of the Union have engaged in illegal
activities, other than activities in relation to shipping or any naval establishment;
(b) whether any person, group of persons or body
established by, or associated with, the Union
or its members is engaged in illegal
activities; and (c) whether any person is using the Union or its
members for the purposes of illegal activities:
AND WE DECLARE that, for the purposes of these Our
Letters Patent, "illegal activities" means -(d) activities involving any breach of a law of
the Commonwealth or a Territory;
(e) activities in, or in relation to, trade and
commerce between Australia and places outside
Australia, among the States or between a State
and a Territory, being activities which are
contrary to a law of the Commonwealth, a State
or a Territory; and
\ /1 ' :/ I , I '
(f) activities that have the effect of, or are
directed to, impeding, preventing or defeating,
or that tend to impede, prevent or defeat, the
operation, implementation or enforcement of a
law of the Commonwealth or a Territory:
AND WE FURTHER DECLARE that, for the purposes of
the Letters Patent issued on 10 September 1980, without
limiting the meaning of the expression "illegal activity " ,
that expression includes any activity that is an illegal activity for the purposes of these Letters Patent:
AND WE FURTHER DECLARE that, for the purposes of
the Letters Patent issued on 10 September 1980 and of
these Letters Patent -(g) a reference to officers or members of the
Union includes a reference to persons purporting
to be officers or members of the Union; and
(h) a reference to illegal activities engaged in
by officers or members of the Union is a
reference to illegal activities engaged in by
officers or members of the Union, whether by themselves or in association with any other
person:
AND WE FURTHER DECLARE that the Letters Patent
issued on 10 September 1980 shall have effect as if the
words -AND We further direct that any finding that
the Union or any officer or member of the Union
has engaged in conduct amounting to a criminal
offence be made only on evidence, admissible in
a Court of Law, sufficient to place the Union,
officer or member on trial for that offence. 11 be omitted and the following words substituted -II
AND WE FURTHER DIRECT that a finding that the
Union or a person has engaged in conduct amounting
to a criminal offence be made only on evidence,
admissible in a Court of Law, sufficient to place
the Union or that person, as the case may be, on
trial for that offence. 11
WITNESS His Excellency the Right Honourable Sir Zelman Cowen, a member of Her Majesty's
By His Excellency's Command,
Most Honourable Privy Council, Knight of The Order of Australia, Knight Grand Cross of The Most Distinguished Order of Saint Michael and Saint George, Knight Grand Cross of The Royal Victorian Order, Knight of The M6st
Venerable Order of the Hospital of Saint John of Jerusalem, one of Her Majesty's Counsel learned in the law, Governor-General of the Commonwealth of Australia and Commander-in-Chief of the Defence Force.
day of 1982.
f)Pnme Minister
.
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COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Queen of
Australia and Her other Realms and Territories, Head
of the Commonwealth:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B.
GREETING:
WHEREAS by Letters Patent issued in Our name by Our
Go vernor-General of the Commonwealth of Australia on
10 September 1980 and 1 April 1982 We appointed you t o
b e a Commissioner to inquire into and report upon
certain matters relating to the Federated Ship Painters and Dockers· Union and the officers and members of tha t
Union:
AND WHEREAS it is desirable that new provision be
as to the time within which you are to furnish a repor t
of your inquiry and your recommendations:
NOW THEREFORE We do, by these Our Letters Patent issued
in Our name by Our Governor-General of the Commonwealth
2.
of Australia on the advice of the Federal Executive
Council and in pursuance of the Constitution of the
Commonwealth of Australia, the Royal Commissions Act 1902
and other enabling powers, declare that the Letters
Patent issued on 10 September 1980 (as varied by the
Letters Patent issued on 1 April 1982) shall have effect
as if for sub-paragraph (f) of the concluding paragraph
of the first-mentioned Letters Patent there were
substituted the following sub-paragraph: "(f) not later than -
(i) the expiration of the period of
6 months commencing on the day fixed
for the purpose of section 2 of the
National Crimes Commission Act 1982;
or
(ii) if the day so fixed is later than
1 July 1983 - 31 December 1983·,
to furnish to Our Governor-General of the
Commonwealth of Australia a report of the
results of your inquiry and your recommendations.".
WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy Council, Knight of the Order of Australia, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George,
Knight Grand Cross of the Royal Victorian Order, Knight Commander of The Most Excellent Order of the British
3.
Empire, Knight of the Most Venerable Order of the Hospital of Saint John of
Jerusalem, Governor-General of the Com mo nw ealth of Australi a and Commander-in-Chief of the Defence Force .
Dated this day o f
By His Excellency's Command
twenty fifth December
Governor-General
1982.
Minister of State for Trade and Resources for and on behalf of the
Prime Minister
COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Queen
of Australia and Her other Realms and Territories,
Head of the Commonwealth:
TO:
FRANCIS XAVIER COSTIGAN, Q.C., LL.B.
GREETING:
WHEREAS by Letters Patent issued in Our name by Our
Governor-General of the Commonwealth of Australia on
10 September 1980 We appointed you to be a
Commissioner to inquire into and report upon certain
matters relating to the Federated Ship Painters and
Dockers Union and the officers and members of that
Union:
AND WHEREAE those Letters Patent were varied by
Letters Patent issued on 1 April 1982 and
25 December 1982:
AND WHEREAS it is desirable that those Letters Patent
be further varied:
NOW THEREFORE We do, by these Our Letters Patent
issued in Our name by Our Governor-General of the
Co mmonwealth of Australia on the advice of the
Federal Executive Council and in pursuance of the
Constitution of the Commonwealth of Australia, the
Royal Commissions Act 1902 and other enabling powers,
declare that the Letters Patent issued on
10 September 1980 (as varied by the Letters Patent
issued on 1 April 1982 and 25 December 1982) shall
have effect as if, after sub-paragraph {f) of the
concluding paragraph of those Letters Patent, there
were added the following paragraph:
" AN D We further declare that the Commission established
by the se Our Letters Patent is a relevant Commi s sion
for the purposes of sections 4 and 5 of the Royal
Commissions Act 1902." WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy Council, Knight of the Order of Australia, Knight Grand Cross of The Most Distinguished Order of Saint Michael and Saint George,
Knight Grand Cross of The Royal Victorian Order, Knight Commander of The Most Excellent Order of the British Empire, Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, Governor General of the Commonwealth of Australia and Commander-in-Chief of the Defence Force. Dated this second day of February 1983 .
By His
Attorney-General L the Prime Minister
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COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God Queen of Aus t ral i a and Her other Realms and Territories, Head o f the Commonwealth:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B
GREET I NG:
WHEREAS by Letters Patent issued in Our name by Our
Governor-General of the Commonwealth of Australia on 1 0
September 1980 We appointed you to be a Commissioner to
inquire into and report upon certain matters relating to
the Federated Sh i p Painters and Dockers Union and the
officers and members of that Union :
AND WHEREAS those Letters Patent were varied by Letters
Patent issued on 25 June 1981, 1 April 1982, 25 December
1982 and 2 !ebruary 1983
AND WHEREAS it is desirable that further time be allowed
for the completion of your inquiry and the submission of
your report :
NOW THEREFORE We do, by these Our Letters Patent issued in
Our name by Our Governor-General of the Commonwealth of
Australia on the advice of the Federal Executive Council and in pursuance of the Consitution of the Commonwealth o :
2.
Australia, the Royal Commissions Act 1902 and other
enabling powers, vary the Letters Patent issued on 10
September 1980, as affected by the Letters Patent issued
on 25 June 1981, 1 April 1982, 25 December 1982 and 2
February 1983, so as to require that your report of the
results of your inquiry and your recommendations be furnished to Our Governor-General of the Commonwealth of
Australia not later than 30 June 1984.
WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy
Council, Knight of the Order of Australia, Knight Grand Cross of The Most Distinguished Order of Saint Michael and Saint George,
Knight Grand Cross of The Royal Victorian Order, Knight Commander of The Most Excellent Order of the British Empire,
Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, Governor-General of the Commonwealth of Australia .and
Commander-in-Chief of the Defence Force.
Dated this twenty first day of December 1983.
Governor-General
By His Excellency's Command,
W-1- Prime Minister
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COMMONWEALTH OF AUSTRALIA
ELIZABF.TH THE SECOND, by the Grace of God Queen o f Australia and Her other Realms and Territories, Head of the Commonwealth:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B
GREETING:
WHEREAS by Letters Patent issued in Our name by Our
Governor-General of the Commonwealth of Australi a
on 10 September 1980 We appointed you to be a
Commissioner to inquire into and report upon
certain matters relating to the Federated Ship Painters and Dockers Union and the officers and
members of that Union:
AND WHEREAS those Letters Patent were varied by
Letters Patent on 25 June 1981, 1 April 1982, 25
December 1982, 2 February 1983, and 15 December
1983:
AND WHEREAS it is desirable that further time be
allowed for the completion of your inquiry and the
submission of your report:
NOW THEREFORE We do, by these Our Letters Patent
issued in our name by Our Governor-General of the
Commonwealth of Australia on the advice of the
2.
Federal Executive Council and in pursuance of the
Constitution of the Commonwealth of Australia, the
Royal Commissions Act 1902 and other enabling
powers, vary the Letters Patent issued on 10
September 1980, as affected by the Letters Patent
issued on 25 June 1981, 1 April 1982, 25 December
1982, 2 February 1983 and 15 December 1983, so as
to require that your report of the results of your
inquiry and your recommendations be furnished to
Our Governor-General of the Commonwealth of
Australia not later than 30 September 1984.
WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy Council, Knight of the Order of Australia, Knight Grand Cross of The Most Distinguished Order of Saint Michael and Saint George, Knight Grand Cross o£
the Royal Victorian Order, Knight Commander of The Most Excellent Order of the British Empire, Knight of the Most Venerable Order of the Hospital
of Saint John of Jerusalem, Governor-General of the Commonwealth of Australia and Commander-in-Chief of the
Defence Force.
Date this twenty seventh day of June
By His Excellency's Command,
Prime Minister
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COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God Queen of Australia and Her other Realms and Territories, Head of the Commonwealth:
TO
FRANCIS XAVIER COSTIGAN, Q.C., LL.B.
GREETING:
WHEREAS by Letters Patent issued in Our name by Our
Governor-General of the Commonwealth of Australia
on 10 September 1980 We appointed you to be a
Commissioner to inquire into and report upon
certain matters relating to the Federated Ship Painters and Dockers Union and the officers and members of that Union:
AND WHEREAS those Letters Patent were varied by
Letters Patent on 25 June 1981, 1 April 1982, 25
December 1982, 2 February 1983, 15 December 1983
and 27 June 1984:
AND WHEREAS it is desirable that further time be
allowed for the completion of your inquiry and the
submission of your report:
NOW THEREFORE We do, by these Our Letters Patent
issued in Our name by Our Governor-General of the
Commonwealth of Australia on the advice of the
Federal Executive Council and in pursuance of the
Constitution of the Commonwealth of Australia, the
Royal Commissions Act 1902 and other enabling
powers, vary the Letters Patent issued on 10
September 1980, as affected by the Letters Patent
issued on 25 June 1981, 1 April 1982, 25 December
1982, 2 February 1983, 15 December 1983 and 27 June
1984 so as to require that your report of the
results of your inquiry and your recommendations be furnished to Our Governor-General of the
Commonwealth of Australia not later than 31 October
1984.
WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy Council, Knight of the Ordei of Australia, Knight Grand Cross of The Most Distiguished Order of Saint Michael and Saint George, Knight Grand Cross of
the Royal Victorian Order, Knight Commander of the Most Excellent Order of the British Empire, Governor-General of the Commonwealth of Australia.
Dated this of
Governor-General
By His Excellency's Command,
Prime Minister
CONSOLIDATED TERMS OF REFERENCE
(other than variations to reporting dates)
COMMONWEALTH OF AUSTRALIA
ELIZABETH THE SECOND, by the Grace of God, Queen of Australia
and Her other Realms and Territories,
Commonwealth:
Head of the
TO FRANCIS XAVIER COSTIGAN, Q.C., LL.B
GREETING:
WE DO by these Our Letters Patent issued in Our name
by Our Governor-General of the Commonwealth of
Australia on the advice of the Federal Executive
Council and in pursuance of the Constitution of the
Commonwealth of Australia, the Royal Commissions Act
1902 and other enabling powers, appoint you to be,
on and from l October 1980, a Commissioner to
inquire, for the purpose of the exercise and
performance of the powers and functions of the
Parliament and Government of the Commonwealth,
whether the Federated Ship Painters and Dockers
Union (hereinafter referred to as "the Union") or
any officer or member of the Union has engaged in
illegal activities in relation to Shipping engaged in trade and commerce between Australia and places
outside Australia or among the States or ships
operated by, or on behalf of, the Commonwealth or in
relation to any naval establishment within the
meaning of the Naval Defence Act 1910:
10.9.80
10.9.80
- 2 -
AND, without restricting the scope of your inquiry,
We direct you, for the purposes of your inquiry, to
give particular attention to the following questions: (a)
(b)
whether any executive, administrative or other
body forming part of, or established by, the
Union has been used, or is being used, for the
purposes of illegal activities, other than
activities involving only breaches of laws, whether of the Commonwealth or a State,
relating to trade unions; whether the Union or any of its officials or
members has been or is engaged in demanding or
receiving payments (other than payments of an
ordinary commercial nature or payments in
accordance with an indus tria 1 award or
agreement in respect of
performed or to be performed)
work actually
from employers
or other persons in relation to ships engaged
in trade and commerce between Australia and
places outside Australia or among the States,
in relation to ships operated by, or on behalf
of, the Commonwealth or in relation to any
naval establishment within the meaning of the
Naval Defence Act 1910 and, if any such
payments have been made -(i) the persons by whom and to whom any such
payments have been made;
( i i) the reasons for, or the purpose of, any
such payments;
10.9.80
10.9.80
Varied
1.4.82
1.4.82
(c)
(d)
- 3 -
(iii) the subsequent or proposed use or
disposal of any such payments ;
whether the Union or any offi cers or members
of the Union h ave engage d in illegal
activities in relat i on to t h e e l ect ion or
appointment of officer s o f t h e Uni o n or the
conduct or purported conduc t of t h e Union ' s
affairs; if the Union o r any o fficers or me mbers of the
Union have engaged i n activi ties o f a n y of the
kinds referred to i n this o r t he preceding
paragraphs,
applying to
whether t he e mp l oyment c onditions
the work of ship painters and
d o ckers have contributed to the deve lopme n t of
tho se activities :
NOW THEREFORE We do, by these Ou r Le tter Patent
issued in Our name by Our Go v e rnor-Gen eral of the
Commonwealth of Austral ia on t h e adv ic e of the
Fe deral Executive Council and in pursuance o f t h e
Co nstituti_ on of the Commonwealth of Australia, t h e
Royal Commissions Act 1902 and other enabling
powers, vary the Letters Pa t e n t issued o n 10
Se ptember 1980 so as to require that, to the e xt e nt
that you are not requ i red to do so by those Le tters
Patent, you inquire-(a) wh e ther the Un i on or any officers or member s
of the Union have engaged i n illegal
activities, other than activities in relat i on to shipping or any naval establishment ;
1. 4. 82
1. 4. 82
1. 4. 82
1.4.82
1. 4. 82
1.4.82
(b)
(c)
- 4 -
whether any person, group of persons or bod y
established by, or associated with, th e Uni on
or its members is engaged in i lleg a 1
activities; and whether any person is using the Union or i t s
members for the purposes of illegal acti vities:
AND WE DECLARE that, for the purposes of the s e Our
Letters Patent, "illegal activities" means-(d) activities involving any breach of a law of
the Commonwealth or a Territory;
(e)
(f)
activities in, or in relation to, tr ad e and
commerce between Australia and places outside
Australia, among the States or between a Sta t e
and a Territory, being activities wh i ch a re
contrary to a of the Commonwealth , a State
or a Territory; and
activ i ties that have the effect of , or are
directed to, impeding, preventi ng or
defeating, or that tend to impede, prevent or
defeat , the operation, implement at i o n or
enforcement of a law of the Commonwealth or a
Territory :
AND WE FURTHER DECLARE that , for purposes of the
Letters Patent issued on 10 September 1980, wi t h o ut
limiting the meaning of the express i on "i llegal
activity", that expression includes any acti vity
that is an illegal activity for the pur p oses of
these Letters Patent:
1.4.82
1.4.82
10.9.80
10.9.80
Varied
1.4.82
10.9.80
- 5 -
AND WE FURTHER DECLARE that, for the purposes of the
Letters Patent issued on 10 September 1980 and of
these Letters Patent -(g)
(h)
a reference to officers or members of the
Union includes
purporting to be
Union; and
a reference to persons
officers or members of the
a reference to illegal activities engaged in
by officers or members of the Union is a
reference to illegal activities engaged in by
officers or members of the Union, whether by
themselves or in association with any other
person:
AND We direct you to make such recommendations
arising out of your inquiry as you think
appropriate, including recommendations regarding the
legislative or administrative changes, if any, that are necessary or desirable:
AND We further direct that [any] finding that
the Union or [any officer or member of the Union] a
person has engaged in conduct amounting to a
criminal offence be made only on evidence,
admissible in a Court of Law, sufficient to place
the Union[, officer or member] or that person, as
the case may be, on trial for that offence.
AND We further direct that, in making your
recommend at ions, you have regard to the announced
intention of the Government of the Commonwealth to introduce a system of reporting of demands for, and
10.9.80
Varied
25.6.81
2 5. 12.82
21.12.83
27.6.84
20.9.84
Varied
2.2.83
- 6 -
payments of, monies following the report of the
Royal Commission into Alleged Payments to Maritime
Unions by the Honourable Mr Justice Sweeney:
AND We declare that you are authorized to conduct
your inquiry into any matters under these Our
Letters Patent in combination with any inquiry into the same or related matters that you , ar.e directed or.
authorized to make by any Commission issued, or in
pursuance of any order or appointment made, by any
of Our Governors of the States :
AND We require you as expeditiously as possible to
make your inquiry and -(e) not later than 31 March 1981, to furnish to
Our Governor-General of the Commonwealth of
Australia an interim report of the results of your inquiry; and
(f) not later than 30 September 1981, or such
later date as We may be pleased to fix , to
furnish to Our Governor-General of the
Commonwealth of Australia a report of the
results of your inquiry and your
recommendations.
AND We further declare that the Commission
established by these Our Letters Patent is a
relevant Commission for the purpose of
sections 4 and 5 of the Royal Commissions Act
1902.
T J trusty and vell-belo ved
XAVIER COSTIGAN, Q. C.,
ELIZAl!ETH THE SDXJND BY THE GRACE OF GOD UEEN OF AUSTRALIA AND HER OTHER REAil4S AND TERRITORIES QUEEN, HEAD OF THE COMHON'JEALTH .
IJHEREAS the Governor-General of the Commonwealth of Australia o n the advice o f the Federal Executive Council and pursuan t t o the Constitution of the Common .... eal th of Australia, the Royal Commissions Act 1902 and other enabling powers, has appoi nted you FRANCIS XAVIER COSTIGAN , Q. C., t o be a Commissioner t o inquire into , and report upon certain matters rel ati ng t o the Federated Ship Painters and Dockers Union and its officers and members
AND WHEREAS the Go vernor of the State of Victoria, in the Commonwealth of Australia, by and v i th the advice o f the Execu tive Council o f the said State, hath deemed it expedi ent that a Commission should f orthwith issue t o y ou i n the tel"'IIB set out below
NO\/ XN YE that We, repos i ng great trust and c onfidence i n your knowledge and ability, have constituted and appointed and by these presents do constitute and appoint y ou FRANCIS XAVIER COSTIGAN , Q. C., t o be Our Cou:missioner t o inquire whe t her the Federat ed Ship Painters and Dockers Union (hereinafter referred t o as ''the Union" ) or any officer or member of t he Un ion in the course of or i n relation t o the affairs of the Union , has eng&e'ed in any illegal a c tivi t i e s
( o ther than activities invo lving only breaches o f the law whether of the Commonveal th or a State relating t o trade uni ons)
AND, wi th t reatrictin& the s cope o f your i nquiry, we di rec t you, f or the purposes of your inquiry, t o gi ve particular
a ention t.he f ollowing questions:
(a)
(b)
whether any executive, adm.i.nistrative or o ther body f ormin& part of, o r established by, the Union has been used, or is
bei ng used , f o r the purposes or illegal a c tivit.ies , o ther than activities involving only breaches of laws , whether of the Commonwealth or a State , relating t o trade Wlions;
whether the Union or any of its officials or members has been or i s engaged in demanding or receiving payment (other than payments of an ordinary c ommercial nature or payments in accordance with an industrial award or agreement in respect of work actually performed or t o be performed) from
employers or other persona and, if any such payments have been made -( 1} the persons by whom and t o whom any such payments have been made;
(ii ) the reasons f or, or the purpo se of,
any such payments;
(iii) the subsequent or prop osed use or disposal of any such paymentsi
(c) whether the Onion or any officers or members of the Oni on have
engaged in illegal activities i n relation t o the election or appointmen t o f officers of the Onion or the conduct or purported conduct o f the Union's affairs;
(d) i f l.ht:! Uu1 vn or an,y o fficers o r members o f the Uni on hAve er'l88«8d
in a c tivities o f any of the kinds referred t o in this or the
preced.i08 paragraph, whe ther the employment c ondi tiona applying t o the work o f ship painters and dockers have c ontributed t o the development o f those activities:
AND WE direc t you to make such recommendations arising out of your inquiry as you think appropriate, inc luding recommendations regarding the legislative or administrative changes, if any, that are necessary or desirable:
!HD W .further direct that any finding that the Union or any officer or member of the Union has engaged in conduct amounting t o a criminal offence be made only on evidence, admissible in a Court of Law, sufficient t o place the Union, officer or member on trial for that offence:
AND WE .further direct that, in ma.ki.ng your recODIDendations, y ou have regard to the annoWlced intention of the GovenllD.ent of the Commonwealth to introduce a syetem of reporting of demands f or, and payments of, monies f ollowing the report of the Royal Com.isaion into Alleged Payments to Maritime Unions by the Honourable Mr. Justice Sweeney:
AND WE do by these presents give and grant unto you full power and authority to call before you such person or persons as y ou shall judp likely to afford you any information upon the subject of this Our Cou:mission, and t o inquire of and conceming the premises by all other lawful ways and means vhatsoever1
.AND WE declare that you are authorized to conduct your inquiry into the matters mentioned aforesaid Wlder these
our Letters Patent in combination with aoy inquiry into the matters that you are directed or authorized to make by any CollllLission or Coumissiona issued, or in purauance of aoy Order or appointment made, by the Gove:rnor-General of the Commonwealth of Australia or the Govemor of any State of the Commonwealth of Australia.
AND WE will and coamand that this Our COIIDission shall continue in full f orce and virtue and that you shall and ma,;y from time to time and at any place or places proceed in the execution thereof, and of every matter and thing therein contained although the same be not continued from time to time by adjolll.UIIlent:
AND WE require you as e:q>edi tiously aa possible to make your inquiry and -
(a)
(b)
n ot later than six months from the date hereof to turniah to Us under yrur band an interim report of the results of your inquiry; and
not later than twelve months from the date hereof or such later date as We may be pleaae4 to fix, t o report to Us under your hand &3id seal a report of the results of your inquiry and 7011r recommendations.
IN TESTIMONY WBERJX)F We have caused theee Our Letters to be made Patent and the seal of our said State t o be hereunto affixed.
By His hcellency 1 s CoDD8lld,
His Excellency the · Honourable Sir Henry Winneke, Knight Commander of the Mo et Diatinguiabed Order of St. Mi chael and Saint George, Knight Con:mander of the Royal Victorian Order, Officer of the Most Excellent Order of the llri tish .&pire, Knight of the Most Venerable
Order of the St. John of Jerusalem, One of Her Majesty⢠s Counsel Learned in the Law, Governor o f the State of Victoria and its Dependencies in the Commonwealth of Australia, etc ., etc., etc., at Melbourne this first day of October One thousand nine hundred and eighty
in the twenty-ninth year of Our reign.
Entered on record by me in the Register of Patents Beak No. 36 Page 366 on t he 1st
day of October One thousand nine hundred and eighty.
/
I f
"! · A ·
'1't> our Trusty and Well-beloved
GREETINGS:
ELIZABETH THE SECOND, BY 'l'HE Qt.ACE OF 000 (2UEEN rR AUSTRALIA MD HER OTHER REALMS AND TERRITORIES, HEN> OF TilE CXJIIMONWEALTH.
FRANCIS XAVIER OOSTIGA.N, Q.C.
WH.EREAS the Governor of the State of Victori a , in the Collaonvealth of AUstralia, by and vi.t:h the advice of the Executive
Council of the said State, i ssued to you on the 1st day of October 1980 a Cc::&lliseion to i nquire into and report upon
certain tMtters relati ng to the Federated Ships Painters and Dockers union or any officer or member of the union and
you were directed expeditiously as possible and not later than twelve months fraa the 1st day of October , 1980, to
report under your hand and seal a report of the results of your inquiry and your recoa.endations.
AND WHER.EAS it i s considered expedient to extend the latest date upon wh i ch you shall report aa aforesaid .
NOW KNOW '!E that We hereby extend the lateat date upon which you shall report as aforesaid to not later than the )let
day of oeceaber, 1982 .
IN TESTIMONY WHEREOF We have caused these OUr Letters to be aade Patent and the Seal of OUr State to be hereunto
affixed.
WI'mESS, His Excellency the Honourable Sir Henry
Winneke, tcnight commander of the Moat Distinguished Order
of Saint Michael and Saint George , Knight Coauu.nder of
the Royal Victorian Order, Officer of the Moat Excellent
Order of the British Fapire, Knight of the Most Venerable
Order of the Saint John of Jeruaalâ¢, ODe of Her
Majesty's Counsel Learned in the Lav, Governor of the
State of Victoria and its Dependencies in the
COIUK)nvealth of AUstrali a, etc. etc. etc. at Melbourne
thia thirtieth day of June one thousand nine hundred
and eighty-one in the thirtieth year of Our Reign ·
ENTERED on record by .e in the Reqiater of
Patents Book No . 37 Page 9 on the
thirtieth day of June one
Thousand Ni ne Hundred and Eighty-one â¢
. ..it..' "--
To · our Trusty and We 1 1 - be 1 overl
GREETINGS:
ELIZABET H THE SECONO, BY THE GRACE OF GOO QUEEN
OF AUSTRALI A ANO HER OTHER REALfo!S ANO TERRIT OR IE S ,
HEAO OF THE COMfoONWEALTH.
FRANCIS XAVIER COSTIGAN, Esquire, Q.C.
WHEREAS the Governor of the State of Victoria, in the Conmonwealth of Australia, by and with the advice of the
Execut i ve Council of the said State, issued to you on the ninth day of September, 1980 a CoiTI11issi on to i nquire i nt o and
report upon certain matters relating to the Federated Ship Painters and Dockers Union or any officer or member of the
Union and you were requ ired as exped it i au s 1 y as pass i b 1 e and not 1 ater than twe 1 ve months from the 1st day of October, 1980
or such later date as we may be pleased to fix to report under your hand and sea l a report of the results of your inquiry
and your recommendations.
AND WHEREAS a Coomission i s sued to you on 30 June, 1981 fixed the latest date upon which you shall report under your hand
and seal as aforesaid at the 31st day of December, 1982.
AND WHEREAS it is considered expedient to fix a later date upon which you shall report under you r hand and sea l as
aforesaid.
NOW KNOW YOU that We hereby fix the 31st day of December, 1983 as the latest date upon which you shall report under your
hand and seal as aforesaid.
IN TESTIMONY WHEREOF We have caused these Our Letters to be made Patent and the Seal of Our State to be hereunto affixed.
By His Exc ell ency's Command.
k
;f
/ ATTORNEY -GENERAL
WITNESS, His Excellency Sir Brian Stewart Murray,, Knight Conmander of
Our Host Distinguished Order of Saint Michael and Saint
George, Officer of th e Order of Austra l ia, Governor of the
State of Victor ia and it's Dependencies in the Conrnonwealth
of Australia, etc. etc. etc. at /l'lelbourne this NoJ£14.£."-JTJI
day of Oc.lo 8EC.. One thousand nine hundred and eighty-two and
in the thirty-first year of Our Reign.
ENTERED on Reco r d by me in the Register of Patents Book. No. 3 7
Page 142 on the 19 day of Octo ber One Thousand,
Nine Hundred and Eighty-two.
AND CABINET
THE SECON D, BY TNE GRACE OP GOO QU EEN
OF AN D HER OTHER REALM S TERR ITOR I ES,
HEAD OF THE
To ou r Trusty and Well-beloved
FR1tNCIS XAVIER Esquire, O· C.
GREET I NGS:
WHFR EA S t h e of the State of Victoria, in the COII!.eonvealth of Australia, by and vith the advi c e of the Executive
Council o f t h e s a i d State, i ssued to you on the 9th day of Septe111ber 1980 a Cc.Jnission to inquire i nto and report upon
certain matters relating to the Federated Ship Painters and Dockers Union or any officer or of the Union and you
r equi red as expeditiously as possible and not later than twelve months fro11 the 1st day o f October 1980 or such later d a te
a s ve may be pleased to fix to report under your hand and seal a report of the results of your inquiry and y our
r e cocnRndations.
AND WPEREA. S a Cc:.-.issio n issued to you on the 30th day of June 1981 fixed the latest date upon vhi c h yo u shall repor t u nder
your hand and s eal as afo resaid as the 31at day of Decel'tber 1982.
AND WHERF.J.. S an Order dated 6th October 1982 fixed the latest date upon which you shall report under your hand and s e al as
afores a id a s the 31st day of December 1983.
AND WHEREA S i t i s considered expedient to fix a later date upon vhich you shall report under your hand and s ea l a s
a f oresaid .
YOU that We hereby fix the 31st day of DeceMber 19£14 as the latest date upon vhich you shall report under your hand
and seal as aforesaid.
I N TESTIMONY WHEREDF We have caused these OUr Letters to be Nde Patent and the Seal of Our State to be hereunto a ffixe d â¢
WITN!SS, His EXcellency Rear Mllliral Si r Br i an Stewart Murray, Knioht
Ca.Nnder of Our Moat Distinquished Order of Sa in t Michael
and Saint George , Officer of the Order o f Australia, Kn ight
of the Moat venerable Order of Saint John o f Jerusalem,
Governor of the State of Victoria and its Dependencie s i n the
Ca.lhOnvealth of Auatralia, etc. etc. etc. at Melbourne this
M"'v day of thousand nine hundred a nd
i n the thirty-second year of Ou r Re i9n .
ATTORNEY-GENERAL !.lft'ZitED on Record by .. in Râ¢qiU:er of Pat.enta, Book No. 37
20th day of December One 'ftlouaâ¢nd,
SP.CRETARY 1 DZP 'ftt!ll'l' OP' '!'HE PRI'JtJER AND C""'NP!f
ROYAL COMMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS & DOCKERS UNION
FINAL REPORT
VOLUME 1
NOTE
Certain names of individuals and companies have been from this published Volume upon the advice of the Commonwealth and Victorian Directors of Public Prosecutions These deletions have been made to avoid prejudice to pendin and current prosecutions. As a result, blank spaces appear
in parts of the Volume.
CHAPTER
l.
2 .
3.
4 .
5.
6.
7.
8.
9.
10 .
References
VOLUME 1
Table of Contents
PAGE NO.
Introduction 1
Natural Justice 16
Mr Packer's Complaint 43
Administration of the Commission 66
Operational Overview 81
The Commission and the Courts 119
Previous Recommendations 135
Reference, Prosecutions & Results 163
Transfer to NCA 204
Summary of Current Recommendations 265
276
Introduction
filing system could sensibly cope with them, and they would be impossible to analyse without the use of modern
management systems. Accordingly, immediate steps were taken to make use of computer facilities under the control of the
Department of Administrative Services. In addition, it
became clear that special computer programmes would need to be written to enable the material to be accessed and
manipulated in a way which would assist in the answering of the questions which flowed from the Terms of Reference.
This was put in hand and computer consultants were engaged. They have continued to be engaged by the Commission since
that time. Senior Counsel assisting me, Hr Douglas Meagher, Q. C., provided detailed specifications to the consultants
setting out the precise needs of the Commission. The
development of the programmes continued throughout the life of the Commission and enhancements to the system occurred almust on a weekly basis.
1.005 The first four months of the Commission were
devoted exclusively to an examination of the Union, its
membership, criminal background and practices, and its
activities at the Williamstown Naval Dockyard. In March
1981, as I was required to under my Letters Patent, I
delivered Interim Report No. l. This was a confidential
report. For the reasons set out in it, I sought an
extension of my Commission until the end of 1982. That
request was granted. In the course of the Report I said,
11 It is clear that the task 'imposed on me is far more
formidable (and probably far more significant) than was
initially realized. 11 paragraph 1.13. Nothing which has
occurred since March 1981 has caused me to alter that view.
1.006 The work of the Commission continued and its
investigations expanded. Indeed, in July 1981 I delivered a second Interim Report to Government. This report likewise was confidential. I made some comments which reflected my state of thinking at that time and it is useful, I believe,
to refer to them again.
Volume l -2- Chapter l
Volume 1
Introduction
11 1.12 The Commission has concentrated
on Victoria. The criminal organisations found there have their operations outside that State and it may be that there are
no others operating interstate. Or it
may not. If there are similar criminal
organisations at work in other States
then the work of this Commission will
take a very long time. It will become
akin to a Crime Commission and less a
Royal Commission investigating one
particular Union. 1.13 This should not come as a
surprise. This Union has a positive
policy of recruiting hardened criminals, at least in Victoria. Such people
normally are unattractive to honest
people, including the many honest and
hard working trade unionists in this
country. But to this Union such
criminals are desirable. It is probably
in order to make use of their dubious 1 talents' . It certainly has as the consequence that any dishonest person requiring criminals to carry out his project has a 'central employment agency' at which he can recruit them. If one adds the facility offered by the Union to equip a criminal 'on the run' with a false identity and to find him work interstate whilst the 'heat 1 is on, one finds a sophisticated organisation posing as a Union but having as a major purpose an enterprise of a most evil kind. 1. 14 In order to concentrate on the more significant, the Commission has shortened the examination of lesser matters and has taken steps to place the completion of the investigation and prosecution of those matters in the hands of the appropriate police authorities. For example, the unemployment fraud described later in this report will not be the subject of further extensive examination by the Commission. It will make its data base available to the Australian Federal Police for its use in the detection of the fraud, and will stand aside to allow that Force to get on with the job of its prosecution. The most that the Commission will do in the future is to ensure the public revelation of the extent of the fraud in -3- Chapter 1
Introduction
anticipation that this will make it more difficult to be perpetrated in the
future. Likewise at the Williamstown
Naval Dockyard where the Naval Police
discovered a number of forged medical
certificates and Management consequently dismissed a number of painters and
dockers, the Commission will refrain from making further enquiry other than of the briefest kind. So too will the
Commission 'hand down' other areas of
detected crime once they have been
explored to a point that will enable the
traditional forms of police investigation to be undertaken."
(Interim Report No. 2, p. 8-9)
1.007 By the end of 1981 the investigations had
developed pace. Their extent was consistent with the views I expressed in both my earlier reports but had, in fact,
moved into the area of income tax evasion in a way not
anticipated in mid-1981. So serious was the situation that on 18 December 1981 I delivered Interim Report No. 3. This
was a public document.
1.008 When I delivered
Memorial Lecture I recounted the the 1983 Sir
circumstances John Barry
in which my
attention was first directed to this area.
appropriate to repeat what I then said.
.Volume 1
"It was in the early months of the
Commission that the extent of the task
became apparent. Perhaps the first
moment of real light occurred one morning at the Fitzroy Court. A witness was
giving evidence in relation to the
activities of a company said to be
engaged in ship repairing. Subsequent
investigations showed that not one dollar had ever been earned in that activity;
nonetheless it was full of interest,
involving classic racketeering and on any view right in the centre of my Terms of
Reference. The witness had some
documents, he said; not in court but
back at the office. Would he mind, I
politely asked him, if I adjourned for a
-4-
It i s
Chapter 1
Introduction
short time while he returned to his
office to collect them and bring them
back to the court. I offered him the
assistance of one of my solicitors and a
Federal Policeman. He could hardly
decline such an offer. The documents
were provided just before lunch. I
should tell you that prior to that
morning I had not seen of money
exceeding five thousand dollars or
thereabouts. Imagine my surprise to find in the files a cheque for one million,
five hundred thousand dollars. Two or
three minutes later I found an
application by an associated company to the Reserve Bank to bring into this
country from Lebanon, four million, five hundred thousand dollars. It didn't
really seem to fit in with ship
repairing. I decided to look more
carefully at this associated company. It had a bank account in a distant suburb in
another State. The bank vouchers were
subpoenaed. I found that in three months
some two hundred and fifty million
dollars passed through that account. It
was one of dozens of such accounts around Australia." 1.009 The prime purpose of Interim Report No. 3 was
to alert Government to the seriousness of the situation and to request an amendment to Section 16 of the Income Tax
Assessment Act allowing Taxation Office. This
amendments were passed
me access to records held by
recommendation was accepted to Section 16, though not
the and in
precisely the terms suggested.
l.OlO I made use of the access immediately it was
granted. As a result I delivered a Fourth Interim Report on
2 7 July 1982. It was in three volumes, but only Volume l
was made public. This was in accord with my
recommendation. Volume l dealt with a number of matters of which by far the most significant was Chapter 3 entitled
"Fraud on the Commonwealth Revenue". This chapter produced a good deal of public discussion, as well it might, because
it confirmed what was already outlined in the
McCabe-LaFranchi Report and disclosed a scandalous fraud.
Volume 1 -5- Chapter l
Introduction
An intriguing feature was the use of painters and dockers.
In Volume 2, which remains confidential, I dealt with
various areas of organised crime and in Chapter 10 I dealt
with the strategies needed to deal with this problem.
Chapter 10, suitably edited, was subsequently made public. In Volume l (paragraphs 3.133 and 3.134) I recommended the
establishment of a Task Force of lawyers (both Counsel and solicitors), Taxation investigators and Corporate Affairs investigators and others. The Government accepted the
thrust of the recommendation and chose to realise it by the
establishment of Special Prosecutors. Two were appointed: Mr Roger Gyles, Q.C. to deal with the bottom of the harbour
problems, and Mr Robert Redlich, a member of the Victorian Bar, to deal with other criminal matters arising out of the confidential report. Both these appointments were an
appropriate response to my recommendation.
l.Oll For the balance of 1982 and the first half of
1983 I concentrated the resources of the Commission on the
investigation of a major fraud based in Brisbane but with
implications throughout Australia and extending into
Singapore and Hong Kong. I reported on this matter in
Interim Report No. 5 which I delivered on 25 July 1983. By
the time of its delivery the major conspirators had been
charged with criminal offences and for this reason two
substantial volumes were not made public.
1.012 In April 1983 I conferred with the newly
elected Prime Minister, and briefed him as
investigations. It was
the Honourable R.J. Hawke, AC, MP , to the general nature of the
his desire that I should direct the
remaining months of my Commission into drug trafficking and the involvement of the members of the Union in that
enterprise. When I had camp leted the investigation which
formed the substance of Interim Report No. 5, I concentrated my attention on that area. That investigation has a long
way to go and should be taken up and camp leted by the
National Crime Authority.
Volume 1 -6- Chapter l
Introduction
1.013. report.
This report is properly described as a final
It is "final" in the sense that it is the last
report I shall submit. My interim reports contained "final" conclusions on the matters addressed by them. In preparing t his report, I read again the interim reports. There i s
nothing in them which I wish to vary. Investigations since
their delivery have confirmed the views expressed in them. As part of this "final" report I , incorporate the interim
reports, and they should be considered part of my "final"
conclusions on the matters investigated over the entire life of my Commission.
l. 014 For this reason, it is unnecessary to retrac e
matters set out in those earlier reports. In the fourth and
fifth reports, for example, I defined the operations of
criminal organisations. I did so for a purpose. It was t o
support a recommendation for the establishment of a crime
authority, resources. and for an upgrading of law enforcement
Since those reports I have seen a great deal
more evidence of criminal organisations at work. Some are examined in parts of this report, though in the main they
are the confidential volumes. The situation is as I
explained in those earlier reports, and remains as demanding of remedial action as I then recommended. Some remedial
action has been taken. A Crime Authority has been
established; there is a greater awareness of the need for
additional law enforcement resources, and steps to provide it are in train. No useful purpose is served by further
definition of the problem. A description of the several
criminal organisations may tittillate the public
imagination, but it would serve no other purpose if done for that alone.
l. 015 When the time came to prepare this report, I
gave consideration to its purpose. It is desirable I
explain my conclusion. My staff were attending to a number of matters, each being at a different stage of development.
Volume 1 -7- Chapter 1
Introduction
Had the termination of my Commission meant the cessation of
those investigations, it would have been necessary to report upon each so that it could be continued (to the extent
possible) by ordinary law enforcement agencies. Such a task would have been formidable and would have taken a great deal o f time. With the creation of the National Crime Authority , and its decision to investigate all matters referred by my Co mmission, a comprehensive report was no longer necessary. The task of identification of the matters was completed in July 1984 when they were defined and forwarded to the
National Crime Authority. Since such action would have been my recommendation in a final report, their disposal some
three and one half months before the end relieved me of that task.
1. 016 The result is that the purposes to be served
by this final report are restricted to relatively few. In
the case of some matters, the investigations have reached a point where I am able to draw conclusions and make
recommendations beyond merely referring the matters to the Crime Authority. As I had been deeply involved in
those matters, and as it would necessarily be many months
before the Members of the National Crime Authority could
attain the same degree of understanding, it is incumbent
upon me to report on those matters. They touch upon areas
in which I believe there is need for changes of laws, or
administrative action of a kind beyond that which is
normal. This report is limited to such matters, at least so
far as investigations are concerned.
1.017 There is a further purpose of lesser moment .
Any person commissioned to discharge a public duty is
obliged, at the end, to give an account. In some cases this
may be satisfied by little more than a report on the
administration. public interest In my case,
in the work
however, there has been much
I the
manner in which it has been done. have been doing, and
This added a further
Volume 1 -8- Chapter 1
Introduction
r equirement. It is necessary to record how the work wa s
done in my Commission so that all may know and may discuss
i t s ramifications.
l . 018 With these two purposes in mind, this report
has been prepared and is submitted. Although the principles applicable to what s hould or should not be included are
s i mp ly stated, it has not been an easy task to distinguish
between those investigations ready for report and those not.
1 . 0 19 There are a number of investigations omitted
f r om this report which, to many, may seem a curious
omission. One example is that which commenced with the
mu cder of Ian Revell Carroll at a Mount Martha house on 3
January 1983. Inspection of the house where his body wa s
found revealed a cache of weapons greater than ever found
before in Victoria. It included high powered rifles,
machine guns, police radio scanners, balaclavas, bank bags, security officers' uniforms, a surveillance van, safes,
telephone codes, cash and documentation - the paraphenalia of "professional" robbers. Carroll had been a member of the Federated Ships Painters and Dockers Union; indeed he
s erved on its executive and at one time claimed to be branch secretary. The man suspected of his murder is recorded as a me mber of the Queensland branch of the Union. Following his
death, whilst the police searched for his murderer, my staff commenced an investigation of his financial affairs and
t hose of his associates. It revealed a group of violent
criminals operating along the eastern seaboard and engaged in all manner of crimes. They range from taxation fraud,
insolvency fraud, robberies, drug importation and
distribution, to violence and murder. From an analysis of
some 1,500 pages a draft of 284 pages was prepared for this
report I gave attention to whether it would fulfil any
proper purpose to deliver it to Government. Each chapter
within the volume contained recommendations as to remedial action; yet on close analysis all recommendations were for
Volume 1 -9- Chapter 1
Introduction
further and continuous investigation. In my view, it was
properly the task of the National Crime Authority to pursue or supervise the pursuit of those matters. That end would
be achieved by delivery of the draft volume directly to the
Authority, and this I have done. There are a number of
other investigations where my decision has been to follow a similar course, though in their case no draft was prepared
for the report.
1.020 My report is in excess of 2,000 pages. It is
divided into eleven volumes and a number of appendices. I
recommend that six volumes (6-ll) be not published. In many ways, it is regrettable such a recommendation is made. They deal with a number of matters which have been the subject of public debate; some contain the
supporting recommendations for changes factual of laws.
background In both
cases, there is an interest in publication. However, there is an even stronger competing interest. Some matters in
those volumes relate to current investigations of great
importance which, if publication occurred, would be gravely prejudiced. Others deal with people now charged with
serious criminal offences. This is the more frequent reason for non-publication.
1.021 At the time of delivery of the fourth interim
report, I formed the view that it was undesirable that the
law enforcement process should await a formal report to
Government. That is why I requested support of the kind
later given by the Special Prosecutors. The result was that as my investigations proceeded many
initiated. This was much in the public
prosecutions were interest. However
it has had the consequence, such is the time taken for
prosecutions to proceed through the Courts, that at the time of submitting this report those prosecutions are still in
progress. Even though my reports are written not for the
purpose of publicly demonstrating the criminality of the accused but rather to achieve legislative or administrative
Volume 1 -10- Chapter l
Introduction
change, there is little that can be done to disguise those
involved so that they would not be recognised on
publication. Thus the publication of the parts of this
report dealing with those people would interfere with t he
judicial process. I have some doubts whether juries would
be so influenced as to render the trials unfair; but my
reservations are of little account when there exis ts t he
s trong expressions of opinion by members of the High Cour t
in Hammond -v- Commonwealth (1982) 42 ALR 327, and in other recent decisions such as News Ltd -v- NCSC (1984) 5 2 ALR
4 17. These decisions compel the recommendation I make t hat certain of the volumes be not published, at least until t he
criminal proceedings have come to an end. f e ar, some years hence. That will be, I
1.022 I will
Volume l contains
Commission over its
summarise the structure of the Report . an overview of the o perations of t he
life. I also address such ma tters as
natural justice and the transfer
Authority. Volume 2 sets out the
employed by the Commission. The
to the National Crime
investigatory techniques manner in which the
Co mmission has done its work is a matter of l egitimate
public debate and such debate will be uninformed unles s
t hose techniques are explained . Volume 3 is concerned with the Union. Volume 4 deals with SP bookmaking. Volume 5
deals with an aspect of the drug trade.
1.023 It is my recommendation that these five
v olumes be made public.
1.024 In relation to Volumes 6 to ll, it is my
recommendation they remain confidential. The reasons vary with each volume. In some
o n trial. In other cases
cases it is because persons are
it is because the volume deals
with highly sensitive, current investigations which could be impeded, if not destroyed, by disclosure. Volume 6 deals
with uonald Lockyer and his associate David McCarthy. To
Volume 1 -ll- Chapter 1
Introduction
publish this problem may prejudice the trial of current
charges laid against Lockyer. Volume 7 deals with a highly sensitive current drug investigation. It should under no circumstances be published as it would gravely prejudice that investigation. Volume 8 deals with the activities of several Melbourne men who are committed for trial. Volumes 9, 10 and ll are very substantial. They deal, in fact, with
some of the activities of Ian Beames, Brian Ray, Phillip
Carver and a number of their associates all of whom have
been charged with and several of whom are committed for
trial on serious criminal charges. I am compelled to
recommend that they not be published. In addition the
further investigation of some of the matters would be
prejudiced by publication though this is not so in respect
of all of the matters. Ultimately, when all investigations are completed and all charges disposed, the public interest may require their publication. These volumes, as it
happens, include reports on investigations in to the rna t ters disclosed by Mr Packer in his statement of 28 September
1984. My personal preference was to answer his allegations publicly, but I could do so only by the fullest account of
each matter. I am prohibited from publishing such an
account for the reasons I have given. There are
considerations affecting people other than merely Mr. Packer which produce that result.
l. 025 It is therefore my strong recommendation that
Volumes l to 5 of this Report be published, but that Volumes
6 to ll be kept confidential.
l. 026 Within a few weeks of the Commission starting
in October 1980 it grew to a size of about 25. It gradually
increased over the next three years to between 50 and 60.
Towards the end of 1983 the Government approved of a
doubling of the staff and further investment in equipment. For most of its life Mr George Hutton was its Secretary. He has now moved from the Public Service to the private
Volume l -12- Chapter l
Introduction
sector. Unused as I was to the ways of the Public Service,
I was heavily dependent upon the administrative skills of
the Secretary and his guidance and advice. He gave full
measure and I am deeply grateful. When he retired his place was taken by Mr Roger Webb. Though he was with the
Commission for only three months, that period was not easy
as he assisted in the transition to the National Crime
Authority and the preparation of the Final Report as well as his normal administrative duties. His work was of a very
high standard and his assistance and advice was invaluable. It would be invidious for me to select names from the rest
of the staff. I have nothing but praise for their devotion
and hard work. A spirit of involvement and goodwill
towards the work of the Commission was present throughout its life. Those who came to the Commission in its last
months fitted into the community quickly. The Public
Service is often the subject of criticism or the butt of
jokes in the community. It is proper I should record that I
was well served by their dedication and efficiency. I
believe my Secretary, Ms Donna-Maria Clay, deserves a
special mention. Without her ability cheerfully to maintain some kind of order in my office the job could not have been
done. That she is staying on with the National Crime
Authority will be very much to its benefit.
1.027 I have been well served by Counsel and
solicitors attached to the Commission. Mr Douglas Meagher, Q.C., has been a source of enormous assistance. His advice, which I have frequently sought, has been wise. His energy
and direction of the investigations has been of the highest quality . He was primarily responsible for the development of the systems and techniques used by the Commission. Not
only the Commission, but also the Australian community
should be forever grateful for his work. He was very ably
assisted by Rex Wild, who was Counsel throughout the life of the Commission, and Lex Lasry who was Counsel for the last
fifteen months. Both of these men gave of their all at a
Volume 1 -13- Chapter 1
Introduction
high level. I am grateful indeed to them. The solicitors,
seconded from the Attorney-General's Department and from the Victorian thanks. Law Department, deserve my appreciation and
They worked long hours and beyond the call of duty.
1.028 I wish to record my appreciation of the great
help given by other Departments of State. The Australian
Federal Police and the Victorian Police seconded men from their Forces on a full-time basis. Their work was
invaluable. Each Force provided a senior liaison officer; from time to time such officers were replaced whilst on
vacation or on other duties but substantially Detective
Chief Inspector Frank Green of the Victoria Police and
Detective Chief Inspector Mike Phelan of the Australian
Federal Police occupied these positions. I cannot speak too highly of the work they did. The Taxation Office and the
Customs Service responded to every request in an efficient and speedy manner. In addition, the Customs Service
seconded to the Commission a full-time officer. His work
was invaluable. Regular conferences at the Commission
included representatives of the Taxation Office, the Special Prosecutors' offices, Customs Service, Victorian and Federal Police, and the Australian Bureau of Criminal Intelligence. Their presence was essential and valuable.
1.029 Although on occasions I worked closely with
other Government departments, I had a special relationship with the Department of Prime Hinister and Cabinet,
Department of Administrative Services, Department of the Special Minister of State and the Attorney-General 1 s
Department of the Commonwealth and with the Premier's
Department, the Attorney-General's Department and the
Corporate Affairs Office of Victoria. I am grateful for
their ready, willing and competent assistance. In Interim Report No. 4 I was critical of the performance of the
Commonwealth Crown Solicitor's Office. It is fair to
record, as indicated in Chapter 6 of this volume, that I
Volume 1 -14- Chapter 1
Introduction
have on many occasions used the services of the Australian Government Solicitor (as he is now known) in a series of
c ourt appearances. On every occasion the performance of his
officers was of the highest professional standard and I was ver y grateful for their care and attention.
l. UJO As appears in Chapter 4 of this volume, I
visited Hong Kong on one occasion and Singapore on two
occasions. In Hong Kong I received great assistance from
the Royal Hong Kong Police Force, the Independent Commission Against Corruption, the Corporate Affairs Office and the
Official Receiver's Office. In Singapore the
Atto rney-General's Office, the Singapore Police and the
Corporate Affairs Office were of great assistance. For this I was truly grateful. It is of great importance in the
a reas of criminality which I was investigating, and which
t he National Crime Authority will be investigating, that
these contacts be maintained and developed.
1.031 Finally, I should record the united efforts of
the staff in the compilation of this Final Report. It has
been a massive and demanding task. Long hours have been
wo rked including Saturdays and Sundays. It will be apparent
I could not have written this Report on my own. To have
done so would have involved an extension of at least another six months. Thankfully that was not necessary. However,
notwithstanding this great assistance, I have read and
e d ited every section of the Report. I take sole
responsibility for what appears in it.
Volume l -15- Chapter 1
CHAPTER 2 - NATURAL JUSTICE
2 .001
"A good parson once said, that where
mystery begins, religion ends. Cannot I
say, as truly at least, of human laws,
that where mystery begins, justice ends?" A Vindication of Natural Society Edmund Burke
rna de against
c ha 11 eng e it ;
A right to counsel; a right to know the case
you; a right to know the evidence and to
a right to an opportunity to persuade; a
right to be informed of the reasons for a decision:
are the rights allowed where natura 1 justice is given. these
2.002 rights, with my several
From time to time I was urged to allow these
to afford this "natural justice". Dissatisfaction failure to accede to the extent demanded
suits in the Federal Court of Australia.
led to
I have
reported upon them elsewhere. All failed.
2.003 Amongst those concerned with the liberty of
the subject the concept of natural justice is valued highly, and at times raised on a pedesta 1. It imposes a high
standard of conduct on those who seek to interfere with the
person, property or rights of others. Thus it is a
preserver of liberty and a protector of the citizen from
imposition. It curtails the State especially; for usually it is only the State which has the overt power and authority
to attack liberties and property. With the growth of
statutory bodies and their power to confer licences allowing otherwise prohibited conduct to occur, there has been an
e x tension of the strictures of natural justice. Likewise,
where private institutions are given power and authority to grant or refuse a licence or to remove a right, the law has
again required natura 1 just ice to be done.
Volume l -16- Chapter 2
Natural Justice
2.004 just ice not
The law
because requires compliance with of the i nherent worthiness
na tura 1
of the
concept, high sounding though it may be, but because it is
seeking to preserve the independence and freedom of the
individual citizen . The fundamental premise is that a
citizen is free to do as he chooses save as the law
proscribes . This is the major tenet of democracy and
distinguishes it from other systems of government . It
certainly distinguishes the free man from the slave . In the
latter case, all that is permitted is that which the master
allows . Putting aside restraints of law, there is n o
freedom to do as you will.
2 . 005 of ways .
the most
A restriction on freedom may arise in
It may be through action of Government . observable form because Governments
a number
This is
act in
accordance with proclaimed laws and regulations. The a ction is over t because there is no need for secrecy. It is not
the only way freedom may be restricted if not destroyed. It
can happen in private business , under civil law, wher e
restrictions on freedom of action are constantly being
imposed, that this is as observable but only in recent times has it led to concern. Another way in which freedom can be
affected , often disastrously, is by those who are willing to b rea k the law : the c r imina 1 s .
2 . 006 The reaction of the State to these several
forms of oppression has been different. In respect of the
State seeking to oppress, there have been important
changes . The most fundamental was some centuries ago when, at the cost of a crowned head, it was accepted that the law
applied to all, including the State. In more recent times
additional measures have been introduced . The requirement of natural ju stice is but one; the righ t of access to
information under freedom of information legislation is
another; as is the rig ht to challenge· administrative
Volume 1 -17- Chapter 2
Natural Justice
decisions; and the provision of an Ombudsman. All of these innovations seek to achieve one end - the preservation of
liberty.
2.007 In the commercial world similar steps have
been taken. Laws now proscribe certain forms of contract.
They allow the setting aside of onerous provisions. They
provide, in legislation such as the Trade Practices Act,
means by which private citizens or the State may prevent the absolu te domination by aggressive men of business. There has been, as evidenced by the passage of this legislation, a
rea 1 i sa t ion t ha t , in the activities of law fu 1 bu sines s ,
situations may be created where there is as much oppression of the individual's liberty as there may ever be by
author ities exercising powers of the State.
2 .008 respect of
individual
In similar fashion, laws have been enacted in
trade liberty unions, where was thought
a
to
similar threat to
be emerging. Thus
unionists now have granted to them various means of recourse to the Courts to safeguard their liberties within the trade u nion movement. It may be expected that this will attract
more a ttention as union power becomes more dominant.
2 .009 The State has also acted in respect of the
criminal. It has pro-vided laws proscribing conduct and has es tablished law enforcement agencies to monitor and to ta k e a ction against criminals who seek to interfere with the
liberties of others. There is a recognition that this
cannot be left to the individual citizen. He has not the
resources to investigate and initiate action. Thus it is
accepted by the State, and expected by the citizens, that it will act to preserve their liberties when they are
threatened by people who defy or ignore the law and seek to
impose upon citizens without lawful authority.
Volume 1 -18- Chapt "' 2
Natura 1 Justice
2 .010 To preserve the integrity of the person and
the 1 i bertie s of citizens from the ravages of the crimina 1
the State must exercise powers which interfere with the
person and liberties of the transgressor. This produces a
conflict, well recognised in the debate that has occurred in the past two years on the establishment of the National
Crime Authority. It is importan·t to note, however, that the
ultimate objective is the same no matter which form of
transgression (by the State, private business, unions or the criminal) is considered. The object is to preserve civil
liberties. At times this laudable object has been
overlooked.
2 .Oll the powers There has been remarkable of the State to interfere
success in chaining in the life of the
citiz en. It has had and is still receiving intensive
atten tion from influential parts of the intellectual
community . There is a healthy wariness of official power
a nd authority; a constant challenge to its action; and
constant debate about the wisdom of its decisions. Likewise in other areas of overt power and authority. There is
noth ing like same alertness and concern about the
illega l oppression of civil liberties by criminals and their organisat i ons.
2 .012 In western democracies in general, and in
Aus tralia in particular, the major oppressor of civil rights
and liberties is the criminal. He injures the person,
steal s the property and invades the privacy of the innocent without remorse or compunction. He affords no warning,
gives no opportunity to be persuaded otherwise and does his bes t to ensure there is no sanction.
2 .013 If the crimina 1 in genera 1 is an oppressor,
To all the the criminal organisation is a tyrant. attributes mentioned is added a remorseless over the honest and law abiding and treating
Volume 1 -19-
rna rch trampling
them with
Chapter 2
Natural Justice
contempt. It comprises people motivated by profit,
contemptuous of the law, careless about their victims,
ruthless in their determination and remorseless in their
endeavours. They profit on the immature, the gullible, the naive. They are unscrupulous in their endeavours to avoid a pprehension. They have the wealth and intelligence to make
unlikely any recourse by their victims or the State. The
result is a tyrannous domination.
2.014 The victims, and other citizens, look to the
State for protection, and for redress when injured. They
receive scant attention. It is demanded they take steps to
protect themselves. Should they be victim, it is required
that they subject themselves to the ordea 1 of the witness
box where often they are mocked and scorned with little
protection offered by the Court. Only in recent times has
provision been made to compensate them for their losses and that compensation is of meagre proportions. They are given no assistance or encouragement to pursue their rights to
compensation at law. They are not fed information gleaned by law enforcement investigators even though it may be vital to their success.
2.015 On the other hand, the oppressor is given
every advantage. with the result
confident they
The resources of law enforcement are sma 11 that wi 11 eight
escape out of ten
detect ion. offenders Those may
who
be are
detected are given every protect ion. The investigators are subjected to every form of restriction that the human mind
can devise short of absolute prohibition. The offender is
given the protection of the general civil rights and
liberties in full measure. He is equipped, often at State
expense, with lawyers and allowed the benefit of all
reasonable doubts and the advantages of every procedure. Not for him, if he does not wish, the trauma and uncertainty
of the witness box. The victim may be as inarticulate, and
as nervous, as the accused; but to the witness box
Volume l -20- Chapter 2
he must march where he is
whilst the accused sits back, such ordea 1 need befa 11 him.
Natural Justice
to suffer intense questioning safe in the knowledge that no
2 . 016 The bala nce could not without some difficulty
be tilt e d further i n favour of the criminal. La w
enforcement a g encies are subjected to constant cr it ica 1
examina tion. They are mocked, scorned and ridiculed. The
cr i mi na l is given every means of attack. The rate of
unso l ved crimes climbs dramatically with situations arising where c i tizens neglect to report thefts, housebreakings,
even personal assaults, out of a feeling of helplessness.
2 . 017 The only source of vocal complaint about this
sta te of affa irs is the Police Force. Its spokesmen
con stant l y draw attention to i t and call for redress. They
ask f or the a dditional powers and resources they require.
Th ei r cry is treated with suspicion. There is an inference
t ha t their demands are for malevolent purposes; that they
s eek the powers for their own self aggrandisement, so they
may a dopt an authoritaria n position in the community. I do
no t think this is the reason for their cry. They are the
ones constantly in touch with the many victims. They
observe f irst hand the appalling consequences for people
i nnocent of any wrongdoing and who are often victim as a
rna tter of chance rather than deliberation. The attending
police officer sees for himself an utter contempt for civil r ights that far exceeds, in its incidence and effect, any
off i cial or government contravention that has yet occurred in Australia. Yet the understandable cry of the policeman
goes unheard. Those not in contact with the victims but who s i t in councils proclaiming concern at civil liberties never
mention the greatest oppression of all.
Volume 1 -21- Chapter 2
Natural Justice
2 . 018 The plight of the victims did strike a
responsive chord in one a rea. In recent times women have
resolved to correct the imbalance between the sexes o f
previous times. Her complaint policeman and
One such imbalance was the victim of rape.
was treated with suspicion by both the
the law. Having suffered the dreadful
degra dation of her person - an intrusion of civil rig hts and
liberties of the most violent nature- she was required to g ive evidence on at least two occasions and suffer the
invasion of privacy of the most personal kind. Being so
well organised to achieve other correct ions the women's
g roups were well placed to demand this be corrected. And so
it wa s. But the imbalance extends far beyond sexua 1 cases.
2 .019 The law enforcement procedures in this country
a re quite inadequate to deal with the intelligent and
determined crimina 1. The stat is tics of those apprehended bear it out. Most are first offenders -amateurs caught, no doubt, because of their lack of experience. Many are of low
intellect and poor circumstance. They have neither the
intelligence to understand how they may exploit their rights to defeat law enforcement nor the money to pa y for others
better informed to assist them. Few intelligent and
experienced criminals grace the gaols. The justification for such a system is often found in the saying that it is
better nine guilty men go free than one innocent man be
convicted. The nine guilty men being allowed to go free
will include the intelligent resourceful criminal rathe r than the unintelligent amateur.
2.020 The reason for this state of affairs lies in
the ultimate objective being forgotten. The enforcement of law is ultimately concerned with the preservation of the
liberty of citizens. It is understandable, perhaps, that in a criminal trial this is forgotten. Such a trial appears to
be concerned with destroying the liberty of a citizen, the
accused. Since he is the focal point, and the concern
Volume l -22- Chapter 2
Natural Justice
dwells upon him and what it is said he did, it is overlooked
that if he was the culprit he was the oppressor, not the
o ppressed. It was he who took upon himself, without lawful
pow er or a uthority, the unjustifiable interference with th e
civil liberties of an innocent and law abiding citizen. The purpose of the trial is to redress the balance, to put rig h t
wha t has been done wrong. The · investigation that preced e d
t he trial is designed to inform the State of the facts so
t ha t the wrong that was done to the victim may b e
redressed. The punishment that is visited upon the
conv icted is on account of the wrong that has been done,
usu a l l y to a fellow citizen and not to the State.
2 .021 Hence the police investigation and resulting
tr ia l are fundamentally concerned with the preservation o f liberty, not its destruction. Undoubtedly there is a
serious conflict because a system which necessarily al l ows the liberties of a citizen to be infringed does give rise t o
a potential for abuse. There must be available a checking
of the process to ensure that it is not abused. But, in the
imposition of such checks and balances, sight must not be
lost of the principal and fundamental ob j ective, namely t o
pr eserve the civil liberties of l aw abiding cit i zens fr om
destruction by those contemptuous of the law. Restriction s imposed on the system of administration of justice must b e
c a refully constructed so that the ultimate objective remain s
a ttainable.
2 .0 22 A basic requirement in the administration o f
ju stice is the a cq u is it ion of information. Without
information about abuse the State cannot take action to
redress it. When those sensitive to civil liberties
con s idered the remed i es to be a l lowed against the State,
th ey quickly a pprec ia ted that a right to information wa s
e ssential. Without information the rights conferred were
empty of substance. Hence the Freedom of Information
legislation. The position is no different in the
Volume l -23- Chapter 2
Natural Justice
enforcement of criminal law except that the information is held not by the State but by private individuals. Without
information, the whole apparatus of law enforcement fails.
2.023 Where it is alleged a person has offended
against the law and transgressed another's person or liberty it is important that certain protections be available to
ensure that the charge is warranted. It is equally
important, where the charge is warranted, that there be a
means by which it can be established. The freedom of nine
guilty men to avoid the imprisonment of an innocent man may appeal to the sentimental; but the preferable result would see the conviction of at least eight of the nine with the
innocent remaining free. from the liberty of a
The community derives no pleasure criminal to impose himself on it
without fear of the consequences.
2.024 The gathering of information must involve an
invasion of privacy. Where a citizen seeks to keep
information secret, its gathering invades not only his
privacy but also his freedom to keep it secret (which is a
different and greater invasion). If he must personally
disgorge that which he knows he is subjected to an
imposition on his freedom to do what he will with his
person. Just as some governments and public servants
dislike the interference they may see in Freedom of
Information rights, so too does the private citizen. Yet
without that interference the State cannot enforce its
laws; and if it cannot, the civil liberties of law abiding
citizens, flagrantly transgressed as they may have been, are left unprotected against future transgress ion, and are not remedied by any punishment visited upon the transgressor.
2.025 The operation of a Commission of Inquiry is
directly concerned with gathering information, since that is its prime task. Perforce it must intrude on privacy and
compel the disclosure of what some seek to keep secret. It
Volume 1 -24- Chapter 2
Natural Justice
transgresses privacy and to the extent described in the last pa ragraph it restricts liberties. Looked at from the
perspective of the subject of its enquiries, it is a
transgressor of liberties. Where, such as in my instance
and that of many other recent inquiries, it is concerned
with criminal activities, from the perspective of others it is concerned with upholding civ.il liberties because by its enquiries it will allow redress of grave transgressions. It does this by gathering information and informing those
charged with the duty of correcting the abuse.
2 .026 As I mentioned earlier, those believed to have
transgressed have a right to
liberties . It is not absolute.
protection of their civil
If they have infringed the
liberties of others the State is entitled to infringe their
rights so as to redress the situation and hopefully prevent its recurrence. Thus there is no principle that they are
entitled to every remedy or device which would permit the
checking of the law enforcement process. They are entitled to some rights but only such as are consistent with the
successful application of the law. If rights and privileges ar e granted of such an order as to prevent law enforcement
being effective, then the transgressors are placed outside th e law, and become tyrants. If they are contemptuous of
the law, the tyranny will not be benevolent.
2 . 02 7 The time and place for concern for the c i vi 1
rights of those allegedly offending the law is at the point
where they are at risk of losing their rights. The basic
and mos t important rights are those relating to liberty of
the person and possession of property. There are, of
course, many other rights but they are of lesser
significance and their protection is not as important as is that of liberty and property.
Volume l -25- Chapter 2
Natural Justice
2.028 The law identifies the means by which the
State may interfere with liberty and property. Generally it is in judicial proceedings though many forms of
administrative action may now allow it. The procedures are well established and that is the time when the principles of natural justice should be applied . At that point they may
be given effect without causing an imbalance between the
grant of rights to the alleged transgressor and the redress of the damaged rights of the victim.
2.029 Prior to effecting redress much work needs to
be done in gathering information. Natural justice does not have a role to play; it is to have its effect and to impart
its fairness at a later time. The subject of the
investigation is certainly entitled to justice but only in moderate measure at the proper time. The community is
entitled to its measure of justice which would be denied if
attention is paid only to the interests of the alleged
offender.
2.030 There is a need for rules regulating the
manner of investigation. These are designed not to
frustrate the investigative process because its success is vital to the protection of the civil liberties of the
law-abiding community. Rather they are to ensure that the
means selected impose least intrusion upon civil liberties . But this cannot be carried so far as to prevent the
investigation as that would frustrate the overall protection being sought.
2.031 Hence there are regulations
search of premises, requiring deposition requisite state of mind, and a pprova 1 of a
search occurs without regard collected may still be used
to propriety though the
governing the on oath of the
ju s t i c e . Wh e r e
the information searcher may be
punished. This is because the law is as concerned with the
intrusion on civil liberties demonstrated by the evidence,
Volume 1 -26- Chapter 2
Natural Justice
a l beit illegally collected, as it is with the transgression
of the searcher. A wrong committed by another does not
excuse the first wrong. Both should be punished. In the
United States for many years a different view prevailed,
allowing the principal wrongdoer to escape where the
in vestigator erred; but that is now changing as the
importance of the ultimate objective is given greater weight.
2 .032 r equested In
daily the to
conduct of my
authorise the
Commission process by
I was
which
i n f ormation may be gathered; that is the issue of summons.
This always intruded on privacy. My approval was sought,
not merely to do that, but also to discover that which many
preferred to keep secret . From the very beginning I was
compelled to grapple with the balance that had to be struck b etween the intrusion on civil rights of the subject of the
investigation and the correction of his intrusions on the
c ivil rights of others .
2.033 On one view, if natural justice applied at
this point, I was obliged to permit representation, advise of the evidence, allow argument and deliver my reasons. I
took the view that this was neither necessary nor
desirable . It was not necessary because the right to
privacy was not absolute; it had to give way in favour of
those charged with enforcement of the law. It could not
stand in their path; for without information the law could
not be enforced. My task and duty was limited to ensuring
that the request for access was born out of proper motives. The subject would have his opportunity at a later time, at a
time when his liberty or
immediately at risk .
property was directly and
2 .034 Nor was it desirable that I permit the subject
to know what was being gathered and the opportunity to seek t o prevent it . I was dealing with people many of whom were
willing to take any steps, legal or illegal, to prevent the
Volume 1 -27- Chapter 2
Natural Justice
gathering of the information. reached, or the direction I
Knowledge of the stage I ha d
was travel ling, would be of
assistance to them in preventing my success. This was no
empty fear. Later I report upon a blatant removal of
documents out of my jurisdiction for the purpose of
preventing me studying them. To facilitate those endeavours would be to permit those responsible for blatant
transgression of the civil rights of fellow citizens to
escape the consequences.
2.035 When my enquiries moved from the issue of
summonses to their return, I did allow a witness to be
represented. I did this so that the witness could seek
advice on his position in answering questions. Generally I did not allow the representative of a witness to be present
when other witnesses were examined; nor did I allow all
information I witness. Nor,
had gathered at the end,
to be made
did I allow
available to any
submissions to be
made on behalf of any person or institution. There were
some exceptions to this which I report upon shortly.
2.036 My reason for not allowing the effective
implementation of the principles of natural justice was that in almost every case the result of my deliberations was the
referral of the matter to ordinary law enforcement
agencies. Once in their hands, and following their
initiating process, the full requirements of natural justice would be met. In none of the matters did I expect that an
opportunity would not be presented at some point, albeit
long after I had completed my part of the task. It was
therefore unnecessary to give an opportunity; and it was
inimical to the success of the investigation both as done by me and as to be done by the law enforcement agency to which
I intended to report the matter.
Volume 1 -28- Chapter 2
Natural Justice
2 .037 My adoption of this approach gains support
from the words of the Chief Justice of the High Court in
Chu rch of Scientology Inc & Anor -v- Woodward & Ors (1982)
43 ALR 587 at 594-5, where he said:
Volume l
"It is obvious that intelligence which
falls far short of establishing that a
person is a risk · to security may
nevertheless be relevant to security. A scrap of information which, in itself,
may seem to have no bearing on security
rna y, when put together with other
information, assume a vital
significance. An officer seeking
intelligence will not always start with a hot trail but may need to begin by
collecting information in the hope that
it may ultimately prove to be of
importance. The necessary concession
that ASIO is entitled to make initial
inqu 1r1es reveals the difficulty in the
suggested construction. It is impossible to suggest any rational test by which one could determine the point of time at
which one should ask the question whether the inquiri es so far made have
established that the intelligence is
relevant to security. Today's
intelligence may seem to establish that a suspected person is a loyal citizen;
further information obtained tomorrow may show that he is engaged in espionage or
subversion. There is nothing in the Act
of 1979 that leads to the unlikely
conclusion that ASIO must cease to obtain intelligence about a particular person
unless its initial investigations are
successfu 1· in establishing that he is a
security risk. Moreover, intelligence
gathered in the honest belief, or in the
hope, that it will be relevant to
security may, in the light of further
information, prove to be valueless.
Finally, it should be remembered that it
may be relevant to security to establish
that a particular person is not a
security risk."
-29- Chapter 2
Natural Justice
In that case the Court was concerned with a
submission that it had the power to declare that the
activities of ASIO in collecting intelligence about an
organisation were unlawful; and an injunction was sought to prevent them continuing. The Court, with the dissent of the Chief Justice, held that ASIO was subject to judicial
review. However, notwithstanding the departure of the other four Judges from the Chief Justice on this issue, there was
considerable unanimity as to the proper collection of
information by ASIO. Mr Justice Mason, at page 602, said:
Volume 1
" ..⢠it would be absurd to suppose that
Parliament intended by s 17(l)(a) to
confine ASIO to the obtaining of
intelligence which on ultimate analysis in the light of a 11 established facts,
whether known to ASIO or not, related to a
person who is a security risk. In the very
nature of things a security intelligence
organization from time-to-time receives information, not always reliable, tending to suggest that an individual is a
security risk. The information has to be
checked out and followed up. This may,
and probably will, involve the obtaining of intelligence relating to the alleged
suspect. The end result of the inquiries
may establish to the satisfaction of ASIO or even objectively, that the suspect is
not and never was a security risk. But
this does not mean that the intelligence
which ASIO obtained was not relevant to
security. Intelligence is relevant to
security if it establishes or tends to
establish that a person suspected of being a security risk is, or is not such a
risk. Moreover, it may well be that
intelligence is relevant to security, so
long as it is obtained for the purpose of
determining whether a person alleged or
thought to be a security risk, is such a
risk. Despite this, in some cases it may
be possible to infer from the character
and reputation of the Plaintiff that ASIO could have no information in its
possession suggesting that he is a
security risk or that if it has, that
information could not be credible, simply because the suggestion that the particular plaintiff is a security risk must be
regarded as fanciful."
-30- Chapter 2
Natural Justice
Mr Justice Brennan at page 614 noted that:
" ... it may be necessary to evaluate rumour
or suspicion as well as proof. It may be
reasonable, even necessary, to determine the gravity of a risk by intuition, rather
than by deduction."
2 . 0 38 This view was later supported by the views
expressed by the High Court in News Ltd. -v- N.C.S.C. (1984)
52 A.L.R. 417. In that case the NCSC was conducting a n
i nvestigation employing powers not unlike mine, with a
s i milar exclusion of News Ltd. from the enquiry except when its witnesses were giving evidence; and a denial to News
Ltd. of access to information it had gathered. The Chief
Justice of the High Court said at page 429:
Volume 1
"The Fu 11 Court of the Federa 1 Court
accepted that the Commission might, as a
result of its hearing, make a report
adverse to the respondents and placed
considerable weight on that circumstance in reaching its conclusion that the course proposed by the Commission did not satisfy the demands of natura 1 just ice. Although, as I ha ve indicated, I do not agree that
the publication of adverse findings,
conclusions or evidence after a hearing
such as the present is normally, and
without more, one of the functions of the
Commission, that does not, in my op1n1on, make a critical difference to the result.
Let it be a ·ssumed that as a result of the
hearing the reputation of the respondents may in some way be affected. The question
would then be what natural justice
requires when a hearing, publicly
announced but held in private, is held
only for the purpose of investigation, the hearing being one in the course of which
no issue can be determined, and as a
result of which no right, interest or
legitimate expectation can be affected, although the reputation of the respondents may be damaged. That question has to be
answered in the light of a statutory
framework which expressly recognizes the need for expedition and gives the
-31- Chapter 2
page 439:
2.039
Natural Justice
Commission power to decide who may attend and who may intervene at the hearing. If
the Commission were to accord to a 11 the
persons whose reputation might possibly be affected by the hearing a right to
cross-examine the witnesses and call
evidence as though they were in a court of
law, the hearing might become so
protracted as to render it practically
futile. In these circumstances, with all
respect, I find it quite impossible to say
that the rules of natural justice require
the Commission to proceed as though it
were conducting tria 1. It seems to me in
no way unfair that, at a hearing of the
kind which I have described, the
respondents should not be entitled to
cross-examine such witnesses as the
Commission may call, or to call evidence
of their own. If proceedings are
subsequently brought in the Supreme Court against the respondents, they will, of
course, be able to test by
cross-examination the evidence adduced, and to call evidence themselves.
Mason, Wilson and Dawson JJ said at
"In our op1n1on the Commission will comply with the statutory mandate to observe the rules of natural justice in the present
case if it proceeds to allow each witness
who is called to give evidence to the
legally represented, with freedom for that representative to participate in the
examination of the witness, and for the
provision of a transcript of his
evidence. The conduct of an investigation in such a manner is fair and nothing more
is required."
In the News Ltd. -v- NCSC case there was
discussion about allowing representation and argument at a point where the NCSC was proposing to make a final judgment on the merits and to publish that judgment. The High Court
questioned whether publication would be allowed. That is not a consideration affecting me as I clearly have no power to publish my report. Indeed, to the extent that I gather
Volume 1 -32- Chapter 2
Natural Justice
evidence of crimina 1 activity, that evidence is provided to law enforcement agencies and the only publication is that
found in the initiation and conduct of proceedings in Court.
2 . 040 I do report to Government. This report does
contain a number of accounts concerned with the conduct of a number of people. The report · is made for the purpose of
informing Government of the magnitude of the problem and
certa in difficulties perceived in the enforcement of law. It is not made for the purpose of depriving those named of
their liberty or possessions.
2 .041 It may well be that my actions will have an
adverse effect upon reputation. That cannot be avoided. It is accepted that the administration of justice would be
frus trated if citizens, believing a situation existed, could not report without first permitting the accused a right of
audi ence and hearing submissions. Even the law of libel and defama tion excludes from its operation a bona fide report in su ch circumstances. Again the explanation in principle is
no t difficult to find. Such a report may initiate
redressive action but it does not preclude at a later time
full measure of fairness being extended to the accused.
Tha t an opportunity will be given later is sufficient to
en s u r e ju s t i c e .
2.042 The course I have taken I believe to be
correct in principle. It was also the only practical way.
To allow full representation as if it were a committal for
trial , or the trial itself, would have taken a great deal of
time. Not only would I have not advanced in my
investigations to the extent I did but it would have given
countless opportunities to those anxious to avoid their
crimina 1 activities being exposed to disrupt the
investigations by fruitless, but time consuming,
applications to the Courts.
Volume 1 -33- Chapter 2
Natural Justice
2.043 I ha ve reported elsewhere on the time occu p i e d
in answering a pplicat i ons to the Federal Court . It wa s
fortuna te that only the Federa 1 Court had jurisdic tion . In
one cas e that has come to my a ttention, being a n instanc e
where a State Ombudsman has jurisdiction, an investiga tion over two years was punctuated by no fewer tha n 1 80
complaints to the Ombudsman . Every complaint was found "not p r o ven", this be i n g the farthest the Ombudsman cou ld proceed
in sayin g it had no foundation . Th e disruptive effect o f
cons t a nt investiga tion of the investigators and the
prejudice to the outcome needs hardly be state d and no doubt wa s the prime objective of the subjec t s of the
inves t i ga tions.
2 .044 The preserva t ion of civil liberties requ i res
a s much attention when the trespassers are criminals a s when
it is the Sta te . Whilst the investigators of the Sta te
requi r e regulation they should not accept nor should the r e
be i mposed such restriction s or means of redress that in the
han d s o f the unscrupulou s the investigations may be
f r us tra ted. It should be born e in mind that the a mateur
crimina l, the criminal of low intellect or scarce· reserve s of wea lth, takes no adva n tage of the protective measures.
In my ca se, I wa s not subje ct to cha llenge in the Courts by
the Union or its members , notwithstanding their
dissa ti s f a ction with the prog ress of my enquiries . I wa s
taken to Court, as is almost always the case, by the wealthy
a nd i ntelligent; by t he type of person wh o is potent i ally
the g rea test threat to c ivil liberties o f the citizen. Such
a person is no strang e r to the legal system nor is he shy of
e mploying the very best tha t money can command to erect a
formi dable barrier aga inst investigation .
2 . 0 4 5 My e x perience is no different from that of law
e n f orcement a g encies. It simply reflects the power o f
wea lth and privilege . Such people have enoug h advantag e
wi thout placing more in t heir hands.
Volume 1 -34- Chapt er 2
Natural Justice
2.046 I mentioned earlier that there were some
exceptions. In one case I came to the conclusion that no
harm would be caused by informing the subjects of the
investigation of the evidence and that I would be assisted
by submissions. The matter was of small compass. I took
submission s and they were helpful. In this case I adopted
this course not so much out of a belief that natural justice
compelled me to do so but rather out of my conviction that
it would be of assistance to me.
2 . 047 The other case was the representation of the
Union, both the Federal body and the Victorian branch. They were represented separately. Their counsel attended
substantial parts of the public sittings of the Commission. Since my inquiry was directed at the Union, I initially
believed I would be assisted by the representation. I was
anxious to determine whether a case could be made that the
union was powerless to prevent the intrusion of criminals in to the controlling executives and whether there was a body of men within the Union anxious to expel them or to diminish thei r influence.
2.048 In the first few months I believed I would
receiv e this a ssistance. It then became apparent that those instructing the representatives of the Union wished their representatives to protect the individual unionists who appea red as as much as they did the name of the
Union itself. This was the situation for as long as Mr
Galbally appeared for the Union. When his retainer finished and Mr Spenc e r appeared for the Federal Union the attitude
changed. However this coincided with the death of Mr
Nichol l s and a resolution of the Victorian Branch accepted
at a meeting at the Council Club Hotel. The resolution
called on all members to refuse to "cooperate" with my
enquiries. This was interpreted by all unionists thereafter called before me as an instruction to not answer questions.
Volume 1 -35- Chapter 2
Natural Justice
It was upheld by unionists in every State notwithstanding tha t it was merely the Victorian Branch which purported to
pas s it.
2 .049 I gave the Union and its members many months
to reconsider this position. a ttention of the Union's
On many occasions I drew the
Counsel, Mr Spencer, and the
a ttention of the Victorian Branch's Counsel, Mr McDermott,
t o the result of adopting that position: it was that I was
compelled to draw my conclusions unassisted by evidence from t he Union. It also meant that the Union was publicly
d emonstrating to me, and to the country, the policy of
n on-cooperation with lawful authority in the examination of crimina l matters. Despite many opportunities to meet this conclu sion, to reconsider after the heat generated by Mr.
Nicholls' death had vanished, the whole Union steadfastly
maintained its position.
2 .050 Finally, after some executive members of the
Victorian Branch had been dealt with by the Courts for their refusal to comply with the law, and had been punished, I
a gain called some unionists who, so it appeared, had
threatened another non-unionist who was before me as a
witness. The executive members were asked for their
e x planation; they responded in a contemptuous manner for
which they were later punished in the Courts. Once a gain,
Mr. Ga lba lly' s hand was observed as being present; and by
the submissions he made to the Court on the occasion of
their tria 1 for their contempt of me he took advantage of
the privilege given to legal representatives in Court to
utter slanderous and contemptuous remarks directed at me and the counsel assisting me. It i s plain enough that the
Union, at least in the Victorian Branch, was either
counselled or incited by Mr Ga lba lly in its attitude of
non-cooperation directed at me, or was at least assisted by him. However that may be, the Federal Union and the
Volume 1 -36- Chapter 2
Natural Justice
Victorian had separate counselling from other lawyers
and notwithstanding the common sense and sound advice I
believe those other lawyers gave, chose to adopt the
at titude they did.
2 .051 In the absence of evidence from the Union, and
in face of the contemptuous attitude it was displaying, I
saw no benefit to be derived from submissions on its
behalf. For there to be effective submissions it would have been necessary to reveal a great deal of information given
confidentially by witnesses who professed a fear for their lives if
evidenc e their before identity became
me to justify
known . There
those fears. was ample
Neither the
Federal Branch nor the executive of the State Branch was
making any attempt to stand apart from the well-known
criminals who held significant office or had substantial
influence on the Union's deliberations. I did not believe
it would serve any useful purpose to reveal to the Counsel
appearing for the Union the vast amount of confidential
information when I would be compelled to request assurance he did not reveal it to his client. Indeed, no useful
purpose could be served unless and until the Union released its members from the direction not to cooperate.
2 .05 2 In all of these circumstances I made it clear
to the Counsel appearing for the Union that I would not take
submissions from him. I did so on many occasions and on
each occasion drew his attention to the major obstacle, the Union resolution and its effect. Notwithstanding this,
there was no variation to the resolution nor any withdrawal.
2.053 A final consideration was a relatively early
decision on my part that de-registration was not an
appropriate answer to the problem of a Union dominated by
criminals . I have explained my rea sons for that in Volume
3. Once I had come to that conclusion, the continued
existence of the Union was no longer in issue; but that was
Volume 1 -37- Chapter 2
Natura 1 Just ice
not a matter to concern the Union as much as the particular
office holders. Thus on a major matter of concern I did not
require argument to persuade me that the existence of the
Union should not be terminated.
2.054 There was one rna tter of industria 1 concern,
that being the extortion practised on the wharves at Port
Adela ide. It was suggested that an answer may lie in the
permanent employment of the painters and dockers. This was a matter on which I expected the Union to have a legitimate
view and I was anxious to hear it. Mr Spencer, on behalf of
the Union, was invited to make submissions to me provided I had the benefit of evidence from Union members in Adela ide
on this important matter. No such evidence was offered.
2.055 I did allow some cross-examination of
witnesses by the Union representatives since this was
helpful to me in extracting all the information relating to certain topics. Generally, however, the representation of the Union was not helpful either to it or to me. I absolve
completely the excellent service which Mr Spencer and his instructing solicitor, and Mr. McDermott and his instructing solicitor, sought to give the Union both federally and in
Victoria. It was not their fault that the Union took the
course it did and refused to accept their advice about a
different course.
2.056 There were a number of occasions when I
promised to allow an opportunity to Counsel appearing for witnesses to recall their witnesses or to call other
witnesses or to cross-examine certain other witnesses. My illness, the difficulties in transition, and the pressures of time have prevented me from honouring those
undertakings. From a personal viewpoint I am sorry this has occurred. However, in every case they will have, at
committal proceedings and at trials, the opportunity to
conduct that examination. It is all that is normally
Volume 1 -38- Chapter 2
Natura 1 Justice
provided to an accused. I see no reason why a
opportuni ty is required merely because there is a
Commission.
third Roya 1
2 . 057 There is a final consideration which affected
me greatly in respect of individuals of whom I suspected
criminal behaviour. As I have explained, I had little
hesitation in employing the compulsive powers granted to me in order to collect information which otherwise would not be procurable, or if there are other means, they were not
economica 1. The collection of this information was an
essential element in achieving effective law enforcement.
2 .058 However, often I reached a further stage of
the investigation where the information had been procured and I had formed a strong suspicion that criminal offences
had been committed. At this point, the question arose as to what I should do. There were two paths I could follow. One
was to act like a Court and allow the matters to be put to
the subject of the investigation, and hear his answer. The
other was to place the matter in the hands of law
enforcement agencies and permit them to follow their normal course . I chose the second course.
2.05 9 It was tempting to adopt the first course. I
have been engaged in the law for many years, and am very
familiar with the operation of the judicial system. The
concept of acting like a Judge, allowing Counsel assisting me to act like a prosecutor, and permitting the "defence" to
act as they would in a Court, was professionally
attractive. However, there were inherent difficulties in the application of this style of proceeding.
2.060 Before matters are prosecuted in a Court, the
accused is usually apprehended and questioned. He is
normally given the opportunity to answer the allegations made . This is a basic and fundamental principle of
Volume 1 -39- Chapter 2
Natural Justice
fai rness. If it is left until the criminal court
proceedings are initiated, an innocent man would be put to a g rea t deal of expense and anxiety in circumstances where he
ha d a straightforward explanation. Now, it was open to me
to afford the same right. After a 11, I was in a posit ion to
compel the a ccused to enter the witness box and answer
questions. Plainly I could offer that without compulsion. But i f I did, and if the accused was not innocent, then the
a nswers he gave me from the witness box would not be capable
of being used against him in criminal proceedings. Thus
whi lst the course would serve well the interests of a man
ultima tely found innocent of the matters, it would not serve t h e interests of the community should he be guilty. The
o pportunity presented to law enforcement agencies of
q u e st i oning the suspect and employing his answers against
h i m would be lost.
2 .06 1 A second aspect of this which weighed heavily
wi th me concerned the rights of the guilty man . If
q u e stioned by normal law enforcement agencies, he had the
r i g ht to refuse to answer questions and remain silent. Such
a rig ht did not exist before me. Whilst I am adamant that
s u c h a right ought not to stand in the way of the collection
of information revealing criminal activities, once that
ma terial is collected and serious consideration is being
g i ven to the initiation of the criminal process, I am not
per suaded the subject of the proceedings should be compelled to g ive evidence. This would lead, if nowhere else, to his
de f ences being explored and brought to the attention of the a uthorities well before the trial commenced. One day the
la w may countenance such a development, as it has already in r e s pect of alibis. But it has not yet reached that stage,
a nd I was not prepared to employ my powers as Royal
Commissioner to achieve it. Of course , had a charge been
la id, the law as propounded by the High Court in Hamidan -v
Woodward clearly denies me the use of those powers.
Volume 1 -40- Chapter 2
Natural Justice
2 .062 An alternative course was to request the
questioning of the accused by law enforcement agencies and then conduct a proceeding like a hearing at which the
al legations were put and argued. Any "confession" could
have been adduced at these proceedings. However, this is to equa te the Royal Commission with a committal. Whilst from time to time it was suggested to me that I should determine
ma tters as if I were a Magistrate presiding at Committal
proceedings, the fact was that I was not endowed with
committal powers. I could not commit any person to trial;
I could not grant bail; I was not empowered to determine
guilt or innocence; nor did I have any authority to make a
judicial pronouncement that a prima facie case had been
established. A Royal Commission is simply a fact gathering a uthority , and its powers are limited to transmitting those
f a cts to Government or Governmental agencies . Indeed, I did
no t even have power to initiate a prosecution. All I could
do, a nd have done, is recommend action by those who are
e mpowered to discharge such tasks.
is a mistake to equate a 2 .063 with It
judie ia l off ice, or even with
Royal Commission law enforcement
a gencies .
a bsence ·of
An examination of powers granted to it reveal the
any appropriate powers for either function.
Where such powers are granted, there is also imposed a wide
range of duties evolved over many years. Just as it is a
mistake to assume the Royal Commission is endowed with such powers, so it is a mistake to assume that duties appended to
those powers are also imposed upon a Royal Commission.
Those duties are incidents of the powers; without the
powers there are no such duties.
2.064 The result of these considerations was a firm
belief on my part that I
provide natural justice in to be put and argued by
was not subject to any duty to
the form of allowing allegations the person accused. I took my
investigations to a point where reasonable, indeed firm,
Volume 1 -41- Chapter 2
Natural Justice
suspicion arose that criminal activity had occurred. I then referred the rna tters to ordinary law enforcement agencies for the apprehension and questioning of the accused, the
preparation of briefs for prosecution, and the initiation of
the judicia 1 process. Whilst my office offered assistance t o those agenices, the powers of my office were not employed
aga inst the accused once referra 1 had occurred. At that
point it was a matter to be completed in the normal manner.
To ensure as fair a trial as possible, I eschewed any public
decla ration that the matter had resulted from my work for
f ea r that it may adversely affect a jury.
2 .065 I believe this course to have been proper, and
to b e one which accommodated with fair balance the competing i nt e rests of the accused, the victim and the interests of
th e public.
Volume 1 -42- Chapter 2
CHAPTER 3 - MR PACKER'S COMPLAINT
3.001 On 28 September 1984, merely four weeks before
I submitted this final report, Mr Kerry Packer issued a
public statement complaining about his treatment by, and of his sufferings as a result of the activities of, my
Commission. By that date the greater part of the drafting
o f my report had been completed. In particular, the
drafting of the previous chapter dealing with natural
justice was finished, as was the whole of Volume 2 dealing
with investigatory techniques. A close examination of those writings, together with my account of the history of the
transition to the National Crime Authority, would reveal my answer to his criticisms. However since his statement
received wide publicity, it is desirable that I answer those aspects of it dealing with concepts of natural justice in a s ection of my report devoted solely to that task.
3 .002 I do not attempt in this chapter to deal with
all aspects of Mr Packer's statement. Where he has dealt
with factual matters that are the subject of this report, I
have extracted the relevant passages of his statement and commented upon them in the appropriate chapters. Nor do I
deal here with the inference that could arise from the
public statement that I have acted in collusion with the
Fairfax Press to denigrate Mr Packer so that it could
achieve some commercial advantage. That is dealt with in
Chapter 6 of this volume. In this chapter I deal with the
natural justice argument alone.
3.003 In the public statement Mr Packer complained
that I had acted "grossly unjustly and improperly", and
denied him "the most basic civil liberties any Australian should be entitled to expect". He identified himself as the
Volume 1 -43- Chapter 3
Mr Packer's Complaint
person whose code name in articles published by the National Times was 11 Goanna' 1 , and said it was common knowledge he was that person. He complained that I had omitted to declare
publicly that the article in the National Times was a
11 j ournalistic fraud11 ; and that although I did take action
in respect of another matter to be published in that
newspaper, I took no action in respect of Goanna. This, he
said, was an
a result, he
had suffered.
11 implicit endorsement11 of its publication. As .. said his reputation was damaged and his family This had started, he claimed, with the public examination of him before my Commission, and culminated in
the publication of the National Times. He denied each of
the allegations he was able to identify in the article.
Further, he claimed the making of the allegations was
reckless or deliberately false - that is malicious.
3.004 In developing the matter Mr Packer complained
that he had been denied representation before the Commission as witnesses affecting him were called, despite his anxiety to be present. He had not been directly challenged on the
matters in the witness box or otherwise. The hearings, he
complained, were secret. He had been denied access to
transcript of those witnesses and knew not what they had
said. This he likened to the Star Chamber or the practices
of the KGB trials conducted in the Soviet Union. In a
supplementary document he relied upon the Salmon Royal
Commission Report, and what he perceived were six 11 cardinal principles 11 for the conduct of a Royal Commission, and
asserted that I had not complied with them. He set them out.
3.005 The complaints of Mr Packer were made
vehemently. He sought, so he said, no greater or lesser
rights than a 11 house burglar11 ⢠But he did want those rights
in full measure. He believed he had been denied them.
Volume 1 -44- Chapter 3
Mr Packer's Complaint
3 .006 These are serious allegations. There was
c onsiderable pressure applied on me by the media to make an immediate response. Had it not been that my report was
rap idly approaching finality, I would have responded other than in this report. However, since the report already
deal t with many of the complaints, it was more appropriate
fo r there to be a measured answer, not one produced in the
heat o f the attack. For this reason I have not concerned
my sel f to answer until now.
3 . 0 07 It was highly regrettable that a copy of the
ma tters referred by me to the Attorney General, who
forwarded them to the National Crime Authority, should have f ound their way into the National Times. At the time of
their preparation and delivery, I took steps to ensure that t h e security of the document was classified highly, and I
mys elf delivered the original to the personal representative of t h e Attorney-General. It was not my intention that it
should be published; to the contrary I sought to ensure it
would not be published. Having made enquiries of my staff, I am satisfied that its publication was not as a result of
a ction taken by any of them. Information has come to my
a ttention that the source was at another place. I have been
told by the person responsible for that other place that it
wo uld have been impossible for it to have been released from
t here. I have no power to investigate the matter further.
3 .008 I
merely because
regard the publication as of the inevitable harm
regrettable not to Hr Packer's
r e putation by a means other t h an that which is proper. That
is, of course, a very serious matter. Throughout my
Commission, but especially in the last two years, I have
endeavoured to ensure that where wrongdoings are alleged, they are dealt with by ordinary process of the Courts of
Law. So successful has this been that the prosecutions and
civil actions resulting from my work have not been publicly
Volume 1 -45- Chapter 3
Mr Packer's Complaint
identified. In the past twelve months there have been many false allegations that no court proceedings ever resul t from my work. It has been tempting to publish the very
considerable list of such matters in an answer to those
critics, fashion I
but I
have have refrained from endeavoured to ensure doing so.
that a trial
In this
of the
accused takes place without there being any suggestion that the accused is a criminal identified by me. Naturally, I
wished the same to apply without favour to all such people I
i dentified. If there were to be proceedings taken against
Mr Packer, I would and do have precisely the same view of
the proper approach . I had not wished to see him labelled
as a product of my enquiries.
3 .00 9 An equal consideration, however, for my
seeking to maintain a high level of security on the matters referred to the Crime Authority was the prejudice likely to be done to the investigations should they be publicly
revealed. Of course, since I was disposing of the
i nvestigations by transferring them to the Crime Authority, this consideration was one of more direct concern to it than to me. Nevertheless, I was concerned as a citizen that the
t ransfer should be effected in such a manner that those
i nve stigations proceeded without interruption. A glance at the contents of the chapter dealing with the transition, and t h e correspondence between myself and others, will indicate
t he depth of my concern. I certainly did not wish to see
the investigations destroyed by the public revelation of the progress that had been made, and the comcomitant warning to
those who were the subject of investigations.
3.010 There were a number of people subject to those
i nvestigations who I feared, if they knew the extent, would
seek to frustrate them. Mr Packer is one such person. In
t he course of my investigations I am satisfied he caused
documents to be removed from the jurisdiction so as to deny
Volume 1 - 46- Chapter 3
Mr Packer's Complaint
t h em to me. I report upon that matter in detail in Volume
9 · I intended not to give him any further opportunity to
take such action by keeping from him the extent of my
i nvestigations. His suggestion that in such circumstances I
wou ld countenance the public revelation of my investigations int o h i m, thus equipping him with the latest information on
p r ogress, is not acceptable.
3 . 0 11 Likewise it is nonsense to suggest, as he
does, that in the formulation of matters for investigation by the National Crime Authority I would act maliciously, or with a reckless indifference for the facts. Nothing would
be gained by such a course, other than the destruction of my own reputation in the eyes of those on the new Authority.
As they examined the material they would quickly ascertain
i ts defects, and reject it. This would result in other
r e ferrals being regarded with disapproval and readily put
as ide too. There is no advantage to me in taking such a
c ourse. Indeed, the preparation of the material was an
arduous and time consuming task. I certainly would not have wasted the energies of myself or my staff on matters of no
concern. Mr Packer's allegation is baseless, and foolish, for it merely compels me to make these observations, which
wi ll do him no good.
3. 012 I turn away from the intemperate observations
o f Mr Packer to th-e matters which are of greater concern
a nd, I suspect, are the least understood in the community.
Th ese are the criticisms founded upon the alleged denial of
civil rights .
3 .013 The progress
affected Mr Packer (and he o f enquiry nor the major
following segments:
Volume l
of my Inquiry, so far as it
was by no means the only subject
one), may be divided into the
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Mr Packer's Complaint
1. Public examination of Mr Packer's
associates in which they declared
they delivered cash to him or his
chauffeur ,
2. Federal Court proceedings brought by Mr Packer to stop my enquiries.
3. Public and private examination of Mr
Packer.
4. Private examination
affecting Mr Packer. of witnesses
5. Preparation and delivery of
summaries of relevant criminal
activities to the Attorney-General, and their delivery to the National
Crime Authority, identifying Mr
Packer as the subject of current
investigations. 6. Preparation and delivery of this
report containing sections
describing the status of
investigations into matters touching upon Mr Packer, and recommending
further investigations by various law enforcement agencies.
I will deal with each stage in turn, giving consideration to the complaints by Mr Packer of the asserted lack of civil
rights.
l. Public Examination of Associates
3.014 This occurred in September and October 1983 in
Brisbane. The associates were represented, and once Mr
Packer's name was mentioned, his representatives were
present too. The transcript was available, and was taken by them.
3.015 The ''naming" of Mr Packer was not by Counsel
assisting me putting the name to the associates, but was by
the witnesses identifying the person to whom they delivered
Volume 1 -48- Chapter 3
Mr Packer's Complaint
s ubstantial sums of cash which I was investigating.
evidence, for they
It was not hearsay. It
The
had witnesses were giving direct de livered the cash themselves. was
admissible in any Court. It was the undisputed truth.
3 . 0 16 Accordingly, the ''naming" of Mr Packer was by
properly admissible evidence, and was a legitimate step in my enquiries. Immediately the naming occurred I gave the
opportun ity to Mr Packer's representatives (who were
p r esent) to proffer an explanation so that if there was an
i nnocent account, it could be revealed without delay. They
d e clared that there was an innocent account, and as soon as
Mr Packer returned from overseas, it would be given.
Arrangements were made for this to be done.
3.Ul7 There is no room for legitimate complaint in
t h ese arrangements. Many witnesses have been called before my Commission and have explained matters which, if left
unexplained, could give rise to suspicion of wrongdoing. I a m not conscious of any case where a legitimate explanation has been given, and harm to reputation has been suffered.
Had Mr Packer delivered his explanation immediately, and had it been acceptable as an innocent explanation both by me and the public, he would have suffered no harm.
2. Federal Court Proceedings
3 . 018 h e would do,
wh o initiated
fold all of
Instead of doing what his Counsel had promised he attempted to stop my enquiries. It was he
the Federal Court action, drawing into the
the associates who I had been examining. By
this action, which he chose to take without any
encouragement from me, he accentuated the difficulties he was in. He was entitled to take such a step. But having
exercised the right, he cannot complain if the result
adversely affected his position. It certainly did.
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Mr Packer's Complaint
(a) By seeking to stop my enquiries
before giving his explanation, he
allowed the inference to arise that
his explanation was not one of
innocence. The explanation later
given was that he had simply
borrowed the money. That had
already been said by one of his
associates. His unwillingness to
enter the witness box and confirm
it, but instead to engage in costly
Court proceedings had the effect of heightening my suspicions that the explanation was not true. No doubt
many in the community shared my
suspicion, and his reputation
suffered accordingly. (b) By taking the proceedings he delayed the giving of the explanation, and
permitted speculation to arise as to what he would say. This, again, no
doubt affected his reputation and he has only himself to blame.
(c) In the proceedings he challenged my
bona fides in pursuing an
explanation. I was engaged on a
drug enquiry, but had taken
considerable care not to mention
that fact. I had two reasons. One
was to ensure that reputations were not harmed without cause. The other was to maintain the security of
those investigations. But by
challenging my bona fides, he
compelled disclosure of the nature of the investigations. Even then, I
took great care to maintain
confidentiality. The solicitor to
the Commission on mt instructions
wrote to Mr Packer s solicitors.
The letter was marked 'confidential' and set out the basis for the
enquiry which I was making. I took
this course as I was determined that
no disclosure of these matters would be forced on me in the Federal Court
proceedings and also to let him know as a matter of fairness. To my
horror, in open court, Counsel for
Brian Ray read the letter in full
and thus announced the nature of the enquiry to the world. I had no part
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Mr Packer's Complaint
in that; I did not seek it to be
done; I did my best to avoid it.
There is little doubt that its
revelation has harmed Mr Packer's
reputation; but the responsibility lies other than on my shoulders. (d) The final matter was one entirely
attributable to Mr Packer 1 s own
Counsel. He chose to make the
baseless allegation in the Federal Court that I or my staff had
wrongfully intercepted a telex
passing between Australia and Hong Kong . The telex had in fact been
handed to my staff by a solicitor in
Hong Kong who had acted as agent for
Mr Packer's own solicitors. The
allegation was humiliatingly
withdrawn. It had wide publicity.
Its irresponsible making reflected no credit on Mr Packer, and revealed he was prepared to say anything to
denigrate my Commission. I expect
this caused further loss of
reputation.
3 . 0 19 I make each of these points to emphasise that
these problems were all of Mr Packer's own making, not
mine. By taking such action, and conducting it in such a
manner, he merely drew greater attention to his difficulties with me. I had not sought to do this, and played no part in
i t other than that insisted upon by Mr Packer or his legal
advisers.
3 .020 The Federal Court proceedings were
unsuccessful and as a result, arrangements were made for his appe a rance before me. They had, however, one adverse
result. By bringing them Mr Packer had imposed substantial delay on my enquiries preventing me from calling him prior to Christmas 1983. In the result, I was compelled to call
h im in February 1984. At this time the Federal Government, be ing concerned to establish the Crime Authority, had
i mp osed time limitations on the completion of these
enquiries. By the terms of a letter I wrote at about this
Volume 1 -51- Chapter 3
Mr Packer's Complaint
time, it will be seen that I was worried that this would
p r e clude the proper completion of my enqu1r1es into Mr
Packer. The delay was entirely attributable to Mr Packer's a ction in the Federal Court.
3. Public Examination of Mr Packer
3.021 The public examination of Mr Packer took place
a t Hawthorn, Melbourne. He was represented. Again, being
sensitive to damage that may have been occasioned to his
reputation by matters being put whilst their development was s till in its infancy, most of the examination of Mr Packer
was done privately. The only part done publicly was that
r e lating to the cash payments of which his associates had
s poken the previous year. All other matters, including a
d rug matter, were done in private. Mr Packer and his legal
advisers made no objection to this course being followed. There was no legitimate objection.
3 .022 In his statement Mr Packer complains of the
s uffering of his family arising "for nearly a year". I have
little doubt that the explanations he gave in the public
sittings did allow speculation to arise in the public's mind as to their truthfulness. The explanations were
e x traordinary, and defied rational belief. But those
e xplanations were his own. They were not put by leading
questions or suggestion. Indeed, he was handled in a most
gentle manner, and merely asked to say what he wished about v a rious matters. The failure to advance acceptable
explanations was entirely due to their lack and in no ·way
attributable to the manner in which the proceedings were
conducted.
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Mr Packer's Complaint
4. Subsequent Private Hearings
3 · 0 23 Immediately after Mr Packer's examination, I
conducted private examinations of his lawyers concerning the removal of a file from their offices to Singapore and Hong
Kong . Mr Packer, of course, is fully aware of what took
place in those hearings. I report upon them in Volume 9.
As I have said in that volume, I conclude that the removal
of the file was deliberate, and was for the purpose of
frus trating my enquiries and was at the specific
ins tructions of Mr Packer. Thus I was dealing with a person
(Mr Packer) who, in my concluded view, was seeking to
frus trate the enquiries. I drew the further conclusion that he may take steps in further enquiries to frustrate those as we ll. Naturally I determined to inhibit his ability to do
so.
3 . 024 The enquiries into Packer-related matters
quickly expanded, taking into their breadth a number of
c omplex land transactions, and the death of Mr Coote.
These, and other matters, are reported upon in detail in
Vo lumes 9, 10 and 11. A perusal of those matters quickly
r evea ls their great ambit. Any one of them warrants a major
inquiry. None of them has been finally completed. All
require further investigation. Upon completion I expect
t here to be proceedings in the Courts for some or all of the
persons involved.
3 . 025 Mr Packer, through his lawyers, often sought
l eave to attend at the hearings during which witnesses were examined about these matters. He was consistently refused by me . Many of the matters were sensitive, with witnesses
e ither exhibiting fear, or expressing fear that their
e vidence may become known. Any person with experience in
t he conduct of such investigations well knows that
persuading witnesses to give evidence in the presence of
Volume 1 -53- Chapter 3
Mr Packer's Complaint
those who may be affected adversely is extremely difficult. The presence of Mr Packer or his associates would have led
to extraordinary difficulties in the successful pursuit of my enquiries. This is quite apart from the conclusion I
r e ached that I had good reason to fear he would seek to
i mp ede my progress by the removal of documents and so on.
3 .026 I fell ill immediately after Easter 1984, and
was hospitalised. I remained in hospital until the
beg inning of June. on 30 June 1984.
My investigatory function came to an end
Thus the number of witnesses examined
dur ing this time was, in any event, minimal. They would
have been fewer still had Mr Packer been present, and if he
had the opportunity to slow down the proceedings further by extensive cross-examination and submissions. Most of the investigatory work consisted of the systematic examination of vast numbers of documents relating to Packer which
v a rious witnesses had produced.
3.027 Mr Packer has drawn the analogy with the
common burglar, and sought the same rights as he receives.
The police investigate burglaries without there being
present the suspected thief or his lawyers. They question
witnesses and gather evidence free of such monitoring. They may seek some explanation from the suspect, and, at that
t i me only, he may have present his lawyer. Mr Packer
received precisely the same rights; he was treated in the
same fashion as the common burglar. By seeking to be
present during the investigation, he sought greater rights. I refused them. He is in no different position to anyone
else in the community, at least so far as I am concerned.
5 . Summaries of Relevant Criminal Activities
3.028 The catalyst for Mr Packer's complaint was the
revelation in the National Times that he had been the
subject of a summary of criminal activity prepared by me for
Volume 1 -54- Chapter 3
Mr Packer's Complaint
transmission ultimately to understand the complaint, he the Crime Authority. suggests that before
As I
he was
included in such a summary, there should have been a hearing at which the matters were put to him, that I should have
listened to submissions, and ruled upon the matter in the
same fashion as a court of law. It is difficult to believe
that any rational person would suggest such a course; but, since he proclaims it so loudly, it is desirable that I deal
with it.
3.U29 It is to be born in mind that Mr Packer is no
different in this regard from anyone else. His argument
mu s t mean that every person the subject of the 42 summaries
should first have been given a hearing. There are vast
numbers of people involved. The process would have taken
many months - time which was not available. Still, if that
is a correct appreciation of the law, then the lack of time
is a matter of no moment. If there is insufficient time,
the summaries would not be submitted, and that would be the end of the matter.
3.030 The proclamation of the National Crime
Authority Act in June 1984 allowed the Government to proceed with its plan to put the Authority in place of my Commission so that the work of my Commission could continue once I had
finished. Accordingly, towards the end of June the Prime
Minister requested that I prepare the material for the Crime Authority to take over 11 the investigations".
3.031 I have analysed the National Crime Authority
Act in the chapter dealing with the transition. I will not
repeat it all here. It is sufficient to note that under its
provisions, and under the provisions of the Royal
Commissions Act, I could pass material to the Crime
Authority only if it was conducting matters to which the material related.
Volume 1 -55-
an investigation into In July the Crime
Chapter 3
Mr Packer's Complaint
Authority was conducting no investigations. It had to find a starting point. Nor could I properly permit it to look at
my investigations, for transmission of information was
specifically regulated by the statutory provisions. There had to be compliance with those provisions; and they
required the Authority to be conducting an investigation before transmission occurred.
3. 032 The answer to the impasse lay in me advising
the Attorney-General of the nature of the investigations, and he referring those investigations to the Authority. It would then be able to consider whether it should conduct an investigation into those matters. Once it decided to do so, I was entitled to transmit information to it.
3.033 The Crime Authority is not entitled to conduct
any investigation it likes. It must fall within the
criteria provided by its Act. Yet only my staff and I knew
sufficient of the investigations to say whether the criteria were satisfied - or at least to advance arguments explaining why they were satisfied. Accordingly, on receipt of the
Prime Minister's request, my staff prepared, and I accepted, the summaries of relevant criminal activities prepared in the terms of the criteria of the Act.
3.034 Thus, in the drafting of those summaries, the
language of the National Crime Authority Act was employed. It was not language of my choosing. This is important to
appreciate. The Act speaks of there being "allegations" or "suspicions" that relevant criminal activities ·have taken place or are taking place. That is the issue addressed by
the summaries; not conclusions that they have occurred.
Volume 1 -56- Chapter 3
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3.035 Being satisfied by mere allegation or
s u sp icion, the summaries encompass all possible enquiries on which I hold material. It will be appreciated that
investigations may be at varying stages. Some may be just
aris ing, where there is no more than a vague suspicion.
Othe rs may be well advanced, and may be approaching a stage where firm allegations by way of criminal charges may be
made . The summaries encompass matters which are at
differing stages, and this applies as much to the
Packer-related matters as it does to others. Therefore it
is wrong to assume, as Mr Packer has done, that the
summaries reflect final conclusions. They do not.
3.036 The
Au t hority because
investigation by vas t number have
summaries were forwarded to the Crime
they related to matters which need further it. Not all matters were sent there. A
been sent to various law enforcement
agencies over the past four years. These are the more
advanced matters. Many never grace a formal report such as this. A number of the matters in the summaries will not be
found in this report. This is because there is no purpose
in reporting upon them. There is no change of law required, nor any special administrative measures. Thus it is an
error to believe that merely because matters are found in
the s ummaries, I have reached conclusions and am reporting upon them. I am reporting on a number of the Packer-related
matters, but by no means all of them.
3.037 Since the matters being transferred to the
Cri me Authority require further investigation, it would be ini mical to the success of the investigation if the subject of i t was warned, and told what was known. There is no
principle of natural justice which requires such warning. Inde ed, the High Court has determined the matter in the
cont r ary fashion, as appears in the previous chapter. Mr
Packer has no proper cause for complaint that he was not
Volume 1 -57- Chapter 3
Mr Packer's Complaint
allowed to argue against referral. Quite apart from
disclosing the investigator's hand, plainly there would be nothing he could say which would prevent a referral taking place.
3 .038 It is wrong and unjust that the summaries of
relevant criminal activities should be published in the
newspapers as if they were concluded opinions of the
subjects of the investigations. As I have explained, that
was not sought by me, nor approved. It having occurred, it
raises in sharp contrast a major difficulty in the operation of the Crime Authority. Such summaries are to be submitted to the Inter-Governmental Committee. This will mean their distribution to eight Governments, and their law enforcement agencies. Despite the precautions taken, my summaries found
their way to the Press with only one Government involved.
It seems inevitable that such a system will not be able to
impose certain security on the transmission of such
matters. This may well be a serious obstacle to the
effective operations of the Crime Authority.
3.039 Thus I reject Mr Packer's complaint that he
was not given a hearing prior to the summaries being
prepared and delivered. The second aspect of this part o f
his complaint was that I failed to do anything about the
publication although I did act in respect of another
publication coded "Flesh". The omission, says Mr Packer, constitutes an endorsement of the publication of Goanna.
3.040 observation It is a
Mr Packer pity that
did not take
before the making time to
such read an the
reasons I advanced for making the order in respect of
"Flesh". I will set those reasons out in this chapter
shortly. Before doing so, however, it is necessary to
provide some account of the events.
Volume 1 -58- Chapter 3
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3. 041 As soon as the material was published in the
Na tional Times, discussion took place as to what could be
d o ne in law. The summaries, technically, were no longer
mine but belong ed to the Attorney-General and the Crime
Authority. I was merely the source. Their publication did
no t affect my future investigations but theirs . After all,
b y delivery of the summaries I was disposing of much of
t hose investigations .
3.042 In
cir cumscribed in these circumstances, my powers. A close
I was
examination heavily of the
Roya l Commissions Act revealed that there were only c e rtain c i rcums tances permitting an order prohibiting publication.
As I exp l a ined in my ruling, had my powers been wider, I
wo uld have prohibited all of them. But my powers were not
of that width. I was supported in this view by the opinion
o f the Solicitor-General. I exercised my powers to the
f ull, which was merely in respect of one matter, ''Flesh". My
reasons were:
Volume l
In early July this year at the request of
the Prime Minister I had put together a
number of summaries of investigations
which were the concern of my Commission. Part of the task was to ascertain those
investigations which met the criteria of the National Crime Authority Act . Their number was originally 40 but was shortly increased to 42. It was not possible under the Royal
Commissions Act, in particular Section 6P(2A), to communicate information or
furnish evidence, documents or things to the National Crime Authority until such time as that Authority was conducting an appropriate investigation . I sought the assistance of the Commonwealth
Attorney-General who in turn obtained the opinion of Sir Maurice Byers Q.C., the
immediate past Solicitor-General. Sir Maurice advised that I could refer these
4 2 summaries to the Attorney-General who could, if he wished, pass them on to the
National Crime Authority.
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Mr Packer's Complaint
I did so. The Attorney referred them to
the National Crime Authority.
Thus there came into existence and into
the hands of the National Crime Authority a document which has been constantly and inaccurately referred to as "the 42
References". They were not references; they were summaries for the assistance
and consideration of the National Crime Authority. So they have been treated by
it and by me.
I have set out this history briefly so
that the action I propose to take can be
understood.
Last Friday the National Times Newspaper published what it said were extracts,
with alterations, of some of those 42
summaries. More are promised in
succeeding weeks.
Let me say at the outset that no
concession is made that the National
Times does have a true copy of the
document. If it does have such copy then
it was obtained surreptitiously, without authority, and probably illegally. I do
not know what material it has or how it
got it.
If the National Times does have a copy of
the document and proposes to publish its contents, it is a matter of concern to
me. It can only harm the successful
outcome of the investigations.
I have given consideration to whether I
am empowered to prohibit further
disclosure. I have sought and received
advice from the Attorney-General, the
Solicitor-General and the Australian
Government Solicitor.
If I was satisfied that I had the power
to do so, I would direct that no
publication of the matter contained in
the document be permitted. The only
possible power is that found in Section
6D of the Royal Commissions Act.
Sub-section 3 of that Section reads as
follows:
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(3) The Commission may direct that -(a) any evidence given before
it;
(b) the contents of any
document, or a description of any thing, produced
before, or delivered to,
the Commission; or
(c) any information that might
enable a person who has
given evidence before the Commission to be
identified,
shall not be published, or shall not
be published except in such manner, and to such persons, as the
Commission specifies.
The power can be exercised only in the
circumstances there prescribed. A power to prevent publication of material is an interference with the freedom of speech. It should be construed strictly.
I have considered whether the 42
summaries or any of them fall within the
provisions of Section 6D. I find only
one such summary. It is that numbered
0008 and bearing the coded title
"Flesh". For that to be made
public would be a ser1ous detriment to
continued investigation and may result in physical harm to a person or persons. It
falls within Section 6D. My restrictive interpretation of the
power given by Section 6D has been
supported by advice given by the
Solicitor-General, who, I understand,
sees difficulties in a wider
interpretation.
Times was
by the
that I
today.
The Editor of the National
yesterday afternoon advised Solicitor for the Commission
proposed to prohibit publication
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Mr Packer's Complaint
If the National Times is in possession of a copy of the whole document, I trust it
will bear in mind that there are
occasions when the public interest is not well served by publication of material
which should remain confidential, as was intended.
For these reasons I give the following
direction:
"Pursuant to Section 6D of the Royal Commissions Act 1902 I direct that
the contents of the part of the
document described above, being that part identified by the number 0008
and code name 11 Flesh11 not be
published. 11
3. 043 The National Crime Authority, which was also
very concerned, had its own powers. In the opinion of the
Solicitor-General, it could have issued a wide order
prohibiting publication of all of the material. But the
Commissioners took a different view. They concluded that the power to prohibit related only to matters adduced at
hearings of the Authority, and despite the
Solicitor-General 1 s view to the contrary, they took the
narrower view and decided they did not have power to make
such an order. They pressed for an injunction to be sought
by the Attorney-General. As I understand it, he took the
view that if they would not make the order, he should not
seek an injunction.
3.044 I mention these matters to disclose the
serious consideration that was given to the matter at a time when Mr Packer claims I was giving "implicit endorsement" of
the publication. Nothing could have been further from the truth. As for public disassociation, which Mr Packer also suggests I should have done, this was a difficult question; in my considered view the best I could do consistent with
honesty was neither to affirm nor deny the accuracy of the
publication. It is to be remembered that at that time there
Volume 1 -62- Chapter 3
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wa s nothing in the publication which identified any
i ndividual, and particularly, nothing which identified Mr Pa cker. I took no step which would allow the verification
o f the source, nor the identification of the person
invol ved. In the end, it was Mr Packer who made the public
adm ission, just as it was he who previously disclosed the
nature of my investigations into him.
3 . 045 To suggest, in these circumstances, that I am
acting in a fashion similar to Senator Joseph McCarthy (now decea sed) of the United States is patently ridiculous. At
no time have I publicised Mr Packer's name, or suggested
tha t he be dealt with by public denigration in preference to t he ordinary course of the law. I still do not do so. To
t he extent that he warrants investigation, I recommend it be done; to the extent he warrants prosecution, I urge that it
be done.
6. Final Report
3. 046 The last matter requiring consideration is his
complaint that I am writing a final report which he
a nticipates will deal harshly with him, and that I have not
proffered him any opportunity to explain matters away. This position is the closest analogy to that dealt with by the
Salmon Royal Commission Report.
3.047 There are many different types of Royal
Commissions. Some are requested to investigate calamities a nd provide a report detailing publicly those responsible.
Other Commissions are not expected to go so far. There have been many Royal Commissions in Australia where criminal matters have been investigated. The Commission is not
expected, nor empowered, to ascertain the guilt or
innocence, but rather to determine who should be prosecuted a nd how. There are often ancillary duties whereby the
Volume 1 -63- Chapter 3
Mr Packer's Complaint
nature of the criminal operations is publicised so that the community is better informed. In the past, in the discharge of this function, Commissions have often given detailed
accounts of many criminals, or persons suspected of b eing criminals. It is rare, in Australia, for more than a few to
be represented before the Commission and to make submiss ions on those so identified, although it does happen.
3.048 frequently In the
identified course of my Commission I have
people suspected of criminal
activity. Their names and details of their activities h ave been despatched to police forces and they have been
prosecuted. They have received natural justice by the
provision of committal proceedings and by the operations of t he criminal courts. That is sufficient.
3.049 There have been occasions when I have reported
upon major criminal activities. My fifth report was o ne
such report. The offenders have been committed for tri a l.
They know full details of the charges and the evidence.
This was achieved by the ordinary processes of the criminal law. I did not seek to discharge that task myself.
3.050 In my current report I deal with ma ny
individuals. None of them have received the rights tha t Mr
Packer seeks for himself. It would be a task of impossible
length. Most of them are presently committed for trial, or
awaiting committal, having been charged. They will receive justice at that point. They are included in the various
chapters of this report as an account of their activities is necessary to sustain my various recommendations.
3.051 Matters touching upon Mr Packer occur in three
principal volumes, in other volumes. there be a further
Volume 1
and to a lesser degree i n some chap ters
In one volume my recommmendation i s t hat murder investigation followed by an
-64- Chapter 3
Mr Packer's Complaint
Inquest. Mr Packer may attend that if he wishes, and he
will there learn all he wishes to know. In another volume I
recommend the matter being placed in the hands of the
Director of Public Prosecutions. Should he decide to take civil or criminal proceedngs, and should they involve Mr
Packer, he will receive his full measure of rights. The
remainder are subject to recommendations that there be
investigations conducted by certain law enforcement
agencies. Should these result in civil or criminal
proceedings, again he will receive his full rights. At no
point have I recommended that his liberty be restricted,
that his property be forfeited, that his name be publicly
denigrated. Nor have I recommended that these volumes be
p ublished, other than by transmission to the Governments
concerned.
3. 052 In these circumstances, I do not believe the
Salmon rules are appropriate for the circumstances affecting Mr Packer. In truth, he seeks more rights than those to
which the ordinary citizen is entitled, and I see no reason
why his request should be granted. He has not been denied
any basic civil liberties, and I see no reason to suppose he
will be denied them in the future.
Volume 1 -65- Chapter 3
CHAPTER 4 - ADMINISTRATION OF THE COMMISSION
'The horror of that moment,' the King
went on, 'I shall never, never forget! 1
'You will, though, 1 the Queen said, 'if
you don't make a memorandum of it.'
(Lewis Carroll, Through the Looking-Glass)
4.001 There is a popular picture of the Australian
Public Service, or any Public Service for that matter, being bogged down by paperwork. There are applications to be
made, forms to be completed, letters to be written,
submissions to be prepared, decisions to be communicated. And there are the ubiquitous memoranda.
4.002 All of this is daunting to the public
generally and no less so to a new Royal Commissioner
unfamiliar with the ways of the Public Service. Within a
finite, and usually short, time limit in which to report
there is not room for a Commissioner to attend both to the
subject matter of his inquiry and to the myriad of Public
Service requirements which need to be processed to establish proper financial, personnel, administrative and operational management. For him to try to do so will result in neither
being done properly.
4.003 The Commonwealth Letters Patent which
appointed me Commissioner on l October 1980 required me to present an interim report on later chan 31 March 1981 and the results of my inquiry,
later than 30 September 1981.
the results of my inquiry not
to present a further report on
with my re·commendations, not
Volume l -66- Chapter 4
Administration of the Commission
4. 004 To achieve such a requirement one must, as I
did, rely heavily on two things: first, a Commission
Secretary of the highest order, and secondly the
establishment and maintenance of good working relationships with the Department of State which is responsible for the
servicing of Royal Commissions.
4.005 The importance of a capable and efficient
Secretary cannot be overstated. Not only is he responsible for the overall management of the Commission but he is in
many respects the linch-pin of the organisation, both
internally and with the Public Service generally. Ideally he should be a public servant of some years' standing,
should be drawn from what is now the Senior Executive
Service, should have a sound background in both management and policy advising (though not necessarily related to the subject area of the Commission), and should be able to bring to a Commission a high degree of Public Service
professionalism. I was fortunate to have the services of
such a person in Mr G. Hutton. He commenced with the
Commission on 31 October 1980 and remained with it until 3
August 1984 when he resigned from the Public Service.
4.006 Under the Administrative Arrangements Order
the responsibility for the servicing of Royal Commissions is given to the Department of the Special Minister of State
(SMOS). Prior to that Department's creation in March 1983 responsibility rested with the Department of Administrative Services (DAS). There is within SMOS, and DAS before it, an expertise which has been acquired over some years of
servicing of Inquiries. More importantly, SMOS is the
conduit between the Commission and the Government, including the Public Service generally: and recognition of that
conduit is a critical factor for the overall successful
administration of any Inquiry.
Volume 1 -67- . Chapter 4
Administration of the Commission
4.007 Therefore it is essential to have a very close
working relationship with the servicing Department. For my Commission that was made a little difficult because of its
geographic isolation from the SMOS Central Office. But
there were regular vis its to Melbourne by SMOS (and DAS)
officers and by Commission staff to Canberra. And there was almost daily telephone contact between the two. That close contact is essential: otherwise there is a danger of an
Inquiry drifting too far from the machinery of government of which it is, necessarily, a part, though an independant part .
4.008 A capable Secretary and close relations with
the servicing Department, coupled with the expertise which resides in that Department, removed from my shoulders the
worry of my negotiating the labyrinthine Public Service
processes. Nevertheless those various processes have to be observed and involve the kind of paperwork I referred to at
the start of this chapter. I should like to pay tribute to
the Canberra Central Office of SMOS, and before it DAS, for the way in which they have handled, with sympathy and speed, the very many requests which the Commission has placed
before them over the years.
4.009 From 1980 to 1983 the location of the
Commission in Melbourne did not present major servicing
difficulties because DAS, then the servicing Department, has regional offices in each State and meeting the Commission's needs was mainly a matter of central office/regional office liaison. When the servicing responsibility passed to SMOS
(which does not have regional offices) · it was decided to
continue the past arrangements of DAS in Melbourne providing personnel and financial services under delegation from
SMOS. Because that provides a drain on DAS resources and
because of the difficulties of maintaining proper channels of responsibility I can understand why that arrangement is to be phased out progressively on cessation of my
Volume 1 -68- Chapter 4
Administration of the Commission
Commission. I should like to place on record, however, my
appreciation to the officers of DAS in Melbourne for the
services they have provided over the years.
4 . 010 The Commission was also assisted by other
Commonwealth agencies, notably the Commonwealth Court Reporting Service. Officers from that Service attended and transcribed all 447 hearings I held in all States and in the
Au s tralia n Capital Territory involving 1054 witnesses and 20260 pages of transcript. I am particularly grateful for
t he services they provided so willingly and cheerfully.
4 .011 Officers of the Department of Housing and
Construction and the DAS Property Division have also
provided assistance, especially in the relocation of the Commission to its present premises a move which was
undertaken only on the specific understanding between the Prime Minister and me that the new premises, involving as
they did a substantial outlay in fit-out costs, would
ultimately be taken over by the (then proposed) National
Crimes Commission. That has been the case.
Staffing
4.012 At the commencement of my Commission on 1
October 1980 the staff comprised Ms M Newport, interim
Secretary, Mr D. Meagher (now of Queen's Counsel), Mr R.
Wild of the Melbourne Bar, Mr J. Buxton an officer seconded from the Attorney-General's Department, and a handful of support staff. It soon became apparent that a second
legally qualified officer was needed and in November 1980 Mr B. Harkin of the then Deputy Crown Solicitor's Office in
Victoria mentioned took Mr
up G.
duty with the
Hutton commenced
Commission on 31 October 1980.
Volume 1 -69-
Commission. As as Secretary I
to
have the
Chapter 4
Administration of the Commission
4.013 In those early months, and especially given
the need for an interim report by 31 March 1981, the
workload of the Commission was enormous. By January of that year, only four months after I had commenced, the staff
numbered 31 - much greater, I believe, than many Inquiries
now reach during their lifetime. It was indicative,
however, of the resources which ultimately would be needed to make investigative inroads into the type of criminal
activities which, even at that time, had come to light.
4.014 By a process of evolution, especially
involving the development of analytical techniques described elsewhere in the Report, the staff of the Commission grew to a peak of 103 in July 1984. The investigation of links
between painters and dockers and the tax avoidance industry, which occupied the Commission during the second half of
1982, added greatly to an already heavy workload. In
October 1982 the staff numbered 64 and in the following
month two more legally qualified advisers were engaged.
4.015 the
Towards the end of 1982, in the context of
dovetailing of my organisation with the then
Government's proposed National Crimes Commission, the size and structure of the organisation was reviewed and a
proposal put to DAS in January 1983. The main features were the formation of a cell of Collators, the expansion of the
Analysts cell and an upgrading of the ADP area. In May
1983, Mr L. Lasry of the Melbourne Bar was appointed as an
additional counsel to assist me.
4.016 Broadly, that is the organisation which
existed at the end of my Commission. As at 1 September 1984
it numbered 102 people who, by general categorisation, were broken into:
Volume 1 -70- Chapter 4
Administration of the Commission
40 Operations (including 5 qualified legal officers) 32 ADP
16 Registry 10 Administration
plus, of course, the Commission Secretary, three counse l assisting and officers seconded from other agencies.
4.017 It must be said that the staff of the
Commission, both present and past, whether permanent public servants or temporary, have provided that dedication ,
application, support, assistance, knowledge and
professionalism which is demanded of public servants in this country. Without staff of that calibre my task would have
been almost impossible.
4.018 I should mention that throughout my Commission
many temporary staff were engaged, mainly because public servants are simply not available for
permanent long-term a difficult release from their home departments. This is task for administrators who are trying to meet the pressing demands of an Inquiry constrained by tight deadlines. Often
little is known of a person's background; there may be few,
if any, references; judgements about suitability must often be made on first impressions; and problems abound in quickly assimilating a large number of people from diverse
backgrounds into a public service working environment .
Apart from a few instances, however, the people who have
worked in the Commission over the years both permanent
public servants and temporary staff - have welded themselve s into a team which has provided me with unqualified support in the discharge of my task. In itself that is tribute to
the Administration of the Commission, particularly in recent times when staff concerns about their prospective movement to the National Crime Authority gave rise to a certain
degree of industrial unrest.
Volume 1 -71- Chapter 4
Administration of the Commission
Ac commodation
4.019 My Commission commenced its operations at
premises at 14 0 Bourke Street - above a picture theatre! It
soon became clear, however, that the number of staff would ve r y quickly outgrow that office space and in March 1981 the Commission moved to premises at 636 St Kilda Road. Because of the nature of matters under investigation it was
nece s sary to provide an appropriate level of security for
both staff and documents on the premises.
4. 020 Lack of office space again became a pressing
problem in 1983 and an additional half floor was leased at
St. Kilda in May of that year. However, considerably more
space was required; but clearly another move would only be economical if in the long term the premises so acquired or
leased could be internally structured and secured to enable the then proposed National Crimes Commission to take over the premises on cessation of my Commission. It was with
t hat in mind, and on a clear understanding of such with the
Prime Minister, that the Commission moved to its present
p r e mises . That move took place in November 1983 although it wa s a further six months before the fit-out work on the
Commis s ion's entire premises was completed.
4.02 1 Therefore it is worth mentioning that the
overal l cost of the Commission in 1983-84 contains this item of extraordinary expenditure. It is a cost which the
t a xpayer will not have to bear in the establishment of the
Nat i onal Crime Authority (apart from whatever modifications t o the premises it needs to make itself).
4 . 022 Similarly, all furniture, fittings and other
assets will be passed from my Commission to the NCA at no
cost to the Authority. Principal amongst these is the
hardware of the extensive computer installations which have
Volume 1 -72- Chapter 4
Administration of the Commission
b e en acquired over time. In the normal course the
De partment of the Special Minister of State - which has had
to justify those acquisitions to both the Government and the Parliament - would have expected their return so that they
c ould be re-allocated to new Inquiries as they arise and so
lessen the costs of those Inquiries. That will not now be
t he case and I expect that SMOS will in future need to seek
funds for comparable equipment as each new Inquiry is
established.
Finance
4 .023
$1,153,343 in 1982-83 and
Expenditure on the Commission amounted to
1980-81, $2,358,130 in 1981-82, $2,963,805 in $5,956,723 in 1983-84; the last amount
includes, as I have indicated, an extraordinary item of
$940,860 being expenditure incurred in the fit-out of the
Commission's current premises. An amount of $1,468,000 is included in the appropriations for 1984-85. Further details of each year's expenditure are set out in Annex 1.
4 .024 Some people have sought
identifiable costs of the Commission with to compare the
a notional concept to do so. Is it o f benefits obtained. It is specious possible to quantify the gain to Revenue the bottom-of-the-harbour tax avoidance
from disclosure of scheme? Is it
possible to measure in money terms the benef"it which might accrue from the 600 prosecutions which the Special
Prosecutor Mr Redlich says he has launched as a result of my investigations? Much of the benefit lies merely in the
disclosure of criminal organisations and their activities: and that is a benefit to society as a whole which cannot be
quantified.
Volume 1 -73- Chapter 4
Administration of the Commission
4.025 With the exception of salary costs and items
met by Departments other than SMOS (such as property costs) the Commission has operated under a one-line vote. Officers of the Commission do not exercise any financial delegations and there are arrangements between the Commission, SMOS and DAS Melbourne for payment of accounts.
4.026 There has also been consultation between SMOS
and the Commission about forward estimates and much reliance has been placed upon SMOS
budgetary needs throughout Department of Finance.
to negotiate the Commission's each financial year with the
4.027 It is in the nature of any Royal Commission
that many of its expenditures are not entirely predictable. For example, it was necessary for me to hold 150 hearings
interstate and staff of the Commission and seconded officers undertook many interstate visits for the purposes of
investigations. Each visit is a costly exercise and the
expenditure cannot be foreseen with accuracy.
4.028 It does appear, however, that improvements
could be made in three areas. Firstly, a Commission
Secretary should be equipped with an appropriate financial information and management plan. Despite the sophisticated computer facilities at my Commission 1 s disposal it was not until the closing months of my Commission that an internal
financial information plan was developed. I understand that most new Inquiries are provided with some form of personal computer capacity and it would seem to be a relatively easy task to provide each with a financial management plan
package, whether it is developed in-house or is commercially available.
Volume l -74- Chapter 4
Administration of the Commission
4.029 Secondly, ideally Commission Secretaries
should have some knowledge of financial management and
particularly government financing. I recognise, however, that this cannot always be achieved and in that case it is
essential to have on a Commission's staff someone drawn from t he finance area of a Department who has a sound background in government financing. This is particularly important once the staff size of a Commission reaches more than, say,
25.
4. 030 Thirdly, and as something of an overlay, SMOS
should continue to develop, whether on personal computer or mainframe, its own estimates and financial information and management plans for all Inquiries. In the final analysis
it is that Department which must negotiate with the
De partment of Finance, and its Minister with Government, for scarce money resources and it is inhibited in doing so by
not having a detailed financial information system for each Inquiry it services.
Overseas Visits
4.031 During the course of my the need
arose on three occasions for me to travel overseas to pursue my inquiries. The dates and reasons for these visits and
the personnel who accompanied me are listed below. During each of these visits I took the opportunity to discuss with
members of governments and senior officers of regulatory agencies a number of broad issues pertinent to the conduct
of my inquiries, and to the recommendations for legal and
administrative action that I have made.
Hong Kong (22-29 May, 1982) Documents received from Ward Knight and Dunn Pty Ltd
revealed connections between that company and Hong Kong banks, companies and individuals. Accompanied by Messrs
Volume 1 -75- Chapter 4
Administration of the Commission
Hutton, Meagher and Buxton, and the Victorian Chief
Commissioner of Police, Mr S.I. Miller, I travelled to Hong Kong to consult with Hong Kong Government authorities,
notably the Independent Commission Against Corruption.
Singapore (30 November - 5 December 1982) Investigation of the Hamidan scheme indicated significant financial movements between Australia and Singapore and Hong Kong. I travelled to Singapore, accompanied by Messrs
Hutton, Wild and Harkin and Chief Inspector Green of the
Victoria Police, to gain access to records that would
further my inquiries. I returned direct to Perth for a
hearing connected with the purpose of my visit. Messrs Wild and Harkin also travelled to Hong Kong in the course of this visit. They returned to Australia on 6 December.
Singapore and Hong Kong (26 - 31 October 1983) On this visit I was accompanied by Messrs Hutton, Lasry and
McDonell of my office, and Chief Inspector Green of the
Victoria Police. The purpose of the visit was to conduct
interviews and to access documents relating to certain
Singapore and Hong Kong companies and to liaise with
relevant Singapore authorities. In the course of the visit it became desirable to investigate certain matters in Hong Kong. Accordingly, three members of the party returned to Australia via Hong Kong. Mr Hutton and I returned direct to Australia from Singapore.
Other Administrative Matters
4.032 At Annex 2 are statistics of the hearings I
have conducted, witnesses heard, exhibits presented, and transcript. Details of witnesses, their legal
representatives and exhibits are contained in Appendices 1-A, 1-B and 1-C, respectively, for public hearings, and in Appendices 1-D, .1-E and 1-F, respectively, for confidential hearings.
Volume 1 -76- Chapter 4
Administration of the Commission
4.033 At Annex 3 is a list of reports I have
presented to government, and other publications.
Volume l -77- Chapter 4
Administration of the Commission
EXPENDITURE
ITEM APPROPRIATIO
1980-81 1981-82 1982-83 1983-84 l984-85(a
Comm i ssioner ' s
Fees and 195,615 377,782 388,149 374,398 129 ,oo
Expenses
Staff Expenses 30,356 61,254 135,545 85,085 7 ,oo
Office 292, 239 686,264 708,773 1,665,458 508,00
Expenses
Consultants 2 ,825 4,481 3,235
Witness' 4, 277 9,402 15,587 24 ,907 2 ,001
Expenses
Instruc ting 7,869 25,709 38,992
Solicitor s
Counse l Fe es 146,579 360,253 481,936 755,008 221,00
and Expenses
Union Co unsel 127,357 50,716 103,563 95,123 1, 00
Salarie s & Allowances 292,970 681,866 981,252 1,335,925 480,00
Overt ime 41,791 5,00
Property Costs 33,738 70,499 106,420 1,480,676 115,00
Furniture 19,518 29,904 353 98,352
TOTAL $1,153,343 $2,358,130 $2,963,805 $5,956,723 $1,468,00
( a) Subject to revision on expiration of the Commission. Volume 1 -78- Chapter 4
ANNEX 2
STATISTICS OF HEARINGS, TRANSCRIPT, WITNESSES & EXHIBITS
AS AT 12 OCTOBER 1984
PUBLIC HEARINGS:
CONF IDENTIAL HEARINGS:
NUMBER OF TRANSCRIPT PAGES:
NUMBER OF WITNESSES:
De tails of Hearings
VICTORIA
NEW SOUTH WALES
QUEEN SLAND
SOUTH AUSTRALIA
WESTERN AUSTRALIA
Public Hearings Confidential Hearings
Public Hearings Confidential Hearings Public Hearings Confidential Hearings
Public Hearings Confidential Hearings
Public Hearings Confidential Hearings
AUSTRALIAN CAPITAL TERRITORY
TAS MANIA
TOTAL PUBLIC HEARINGS
Public Hearings Confidential Hearings
Public Hearings Confidential Hearings
TOTAL CONFIDENTIAL HEARINGS
TOTAL HEARINGS
169
278
447
Volume 1 -79-
169
278
20,260
1,054
101 190
31 38
17 18
8
3
10 24
0
4
2
1
Chapter 4
ANNEX 3
REPORTS AND OTHER PUBLICATIONS
Interim Reports
Interim Report No 1 (Delivered on 30 March
Interim Report No 2 (29 July 1981)
Interim Report No 3 (18 December 1981)
Interim Report No 4 (27 J uly 1982 )
Interim Report No 5 ( 25 July 1983)
Other publications
Research Staff:
D.R. Meagher.
Volume 1
On the membership, control and criminal background of the Union and its members . (Confidential)
On Macbell Minerals, SP Bookmaking, Unemployment Fraud and the use of false names by Union members. (Confidential)
On recommended changes to the law regarding access to taxation records. (AGPS Canberra, 1982)
Vol 1. On taxation fraud and
criminality within the Union. (AGPS Canberra, 1982) Vol 2. On organised crime
suppression.
and its
(Confidential, with the exception of an edited version of Chapter 10, which was presented to the Senate on 7 September
1982) Vol 3. On the activities of a number
of Commission targets. (Confidential)
Vol 1. Discussion of the Crime
Commission proposal. Outline of Report. (AGPS Canberra, 1983) Vol 2. An abridgement of Volume 3. (Confidential) · Vol 3. On the Hamidan fraud.
(Confidential)
Discussion Paper: Media Bias and the
Victorian Branch, AGPS Canberra, 1982 Organised Crime, AGPS Canberra, 1983
-80- Chapter 4
CHAPTER 5 - OPERATIONAL OVERVIEW
INTRODUCTION
5 . 001 The purpose of this chapter is to give a
scope of the operations of my
year life. It demonstrates how
general picture of the
Commission over its four ''one thing logistical leads to another".
analysis specifying It is not intended to be a
the number of days in
hearings, documents tendered and the like. can be obtained elsewhere in this Report. Those details Nor will it be
concerned with the investigatory techniques developed during the course of the Commission. Those are the subject of
comprehensive discussion in Volume 2. At the commencement of my term there was a choice of about twenty areas from
which to select subjects for intensive investigation. With hindsight, it is apparent that some of· them would have led
the Commission to the same point. But ·at the time they
appeared very different.
5.002 By my appointment, I was directed to enquire
whether the Union or any officer or member (or person
purporting to be a member) or their associates has engaged in illegal activities. It became a primary task of the
Co mmission to ascertain the identity of those persons. In earlier Reports I had set out the manner in which that task
was to be accomplished. It was a task that required
considerable application of time, resources and analytical techniques.
5.003 I found quickly that many of the Union members
had assumed names; in some cases they were of deceased Union members. Thus although I received evidence that there were
some 1600-1700 members of the Union as at October 1980, an
Volume 1 -81- 5
Operational Overview
examination of t h e records of t h e branches revealed many
mo re names on the register. My preliminary analyses showed
in excess of 2,200 men in the branch records and a separate
examination of employment records showed 2,093 names although many of the names in the two separate listings were not common. It followed that the task of identifying those
in respect of whom I was enquiring was difficult and
I am quite certain that I time-cons uming.
identified all the members of the Union. To do
have not
so would
have been quite impossible. Nevertheless, it has been
necessary to remain aware of the task, critical as. it is to
my terms of reference. It followed that some allocation of
resources has had to be set aside on a semi-permanent basis
o n this issue.
5.004 My earliest operational target was the
Wi lliamstown Naval Dockyard. I was anxious to become a s
we ll- informed as possible about the employment of painters
and dockers at that establishment. I found many matters to
be critical of, and I set out some of those criticisms, in
my first Interim Report. I have since received in evidence
assurances from the present management of the Dockyard (as at mid-1983, in any event) that those problems have now to a large e xtent disappeared and the relevant procedures have been streamlined. For that reason I have made no further
recommendations in respect of the methods of employment of Union members at Williamstown.
5. 005 By the time of the first Interim Report I had
obtained a glimpse of the work confronting me.
Ma rch 1981 : -
I said in
Volume 1
"It is clear that the task imposed on me
is far more formidable (and probably far
more than was initially
realized. ' (Interim Report No. 1, p. 10)
-82- Chapter 5
Operational Overview
What I was to become aware of was the strength of
organised crime throughout the country and the manner in
which its participants interlocked and inter-reacted at
every level.
5.006 By July 1981, when I submitted my second
Interim Report, the magnitude of the task facing me and my
staff had been reinforced. By then I had little doubt of a
"large criminal organisation" availing itself of the Union for the supply of labour for its criminal activities. I
anticipated there might be more than one such organisation and my next task was to identify the organisation(s). I had
until then concentrated my operations in Victoria. It was likely there would be other such criminal organisations that is, those utilising the 11 services11 of the Union or its
members - in other States. I said in my Report:-
"If there are similar criminal
organisations at work in other States
then the work of this Commission will
take a very long time. It will become
akin to a Crime Commission and less a
Royal Commission investigating one
particular Union." (Interim Report No.2, p. 8)
5.007 It is trite comment, but the work of my
Commission has taken a "very long time11 and has, according
to ministerial statements and public and media opinion,
become "akin to a Crime Commission". This was not something that I consciously set out to achieve. It happened because
of the connections and associations which were discovered as I probed beneath the surface. I was astonished, and have
continued to be so over the years, by the intricacy of the
pattern of connections by which members of the criminal
underworld operate in this country. Moreover, the manner in which the traditional blue collar criminal has become
Volume 1 -83- Chapter 5
Operational Overview
a ssociated with the white collar criminals has given great
impe tus to my investigations. It was because of the use by
"executive" criminals of the Union services that I was able t o investigate criminal activities of a kind far more
s ophisticated than those in which the lower level members of
t he "organisation" would normally become involved.
5.008 I was determined I should not waste money and
resources on an investigation into street level crime which could adequately be dealt with by police forces. I was told
repeatedly by police officers with whom I came into regular contact that they could only police at "ankle" or "shin"
level; they rarely got to the "knee" level. Clearly enough, this meant they investigated, arrested and prosecuted (as a g eneral rule) the underlings. My aim was to concern myself
with major targets albeit ones in respect of whom my
interest was justified by my terms of reference.
5.009 Thus, by way of example, when substantial
s ocial security frauds were uncovered by Australian Federal
Police - operating with the assistance of my Commission - I encouraged the continuing investigation of those frauds but did not supervise it. The employment and union records
obtained by me, and the computer data resulting from its
collation and analysis by my staff, became available to the Social Security Department operating in conjunction with the police. I was able to divest myself of close interest in
the matter. Likewise, in respect of the
Police at Williamstown Naval Dockyard certificates used by Union members I
discovery by Naval of false medical
was happy for the
police to investigate the matter and prosecute the same to
successful conclusions; and they did. I said at the time:-
Volume 1
" ..⢠the Commission (will) 'hand down'
other areas of detected crime once they
have been explored to a point that will
enable the traditional forms of police
investigation to be undertaken . " (Interim Report No. 2, p. 9)
-84- Chapter 5
Operational Overview
I have observed· that direction throughout the period of my Commission and, thereby, have divested myself of the less
significant operations allowing concentration on what have appeared to be matters of greater moment.
5.010 But these "significant matters" did not merely
fall into my inv estigatory lap. Rather, their existence
became known associations. through a series of unimaginably odd
I will deal with some of those in the
remainder of this chapter.
MACBELL MINERALS
S.Oll In the middle of 1976 an undertaker Giuseppe
Giannarelli, called a meeting at which painters and dockers, Johanson and Lennon, and an estate agent Campbell attended. The purpose of the meeting was to form a company to operate
the business of lagging ships' pipes. Those present at the
meeting agreed to such an enterprise and a company known as Macbell Minerals Pty Ltd was selected as the corporate
entity to undertake the same. That company had been
operated by Campbell previously but had fallen into disuse. It was agreed that these four men together with a man Bone,
who was an ex-prison officer, would each have a 20% interest in the business. Johanson and Lennon were to provide
expertise in lagging, Giannarelli and Campbell were to
provide financial support and Bone was to provide some other unidentified support. Later it appeared that another man, Durston, also was to have a role with the company. In due
course, I inspected a business card showing him to be the
executive director of the company. Campbell sought to
minimise the relationship between Durston and Macbell. He claimed Durston was no more than a "liaison officer" between the company and the Union. As Durston was a land developer
with no other connection known at that time to the Union
this seemed surprising.
Volume 1 -85- Chapter 5
Operational Overview
5.012 It was an odd group of men. A funeral
director who often drank a t the same hotel as the executive
of the Union; an estate agent and justice of the peace; a
land developer who was in prison in the early days of the
company's new business; two painters and dockers, one of
whom was based entirely in New South Wales; an ex-prison
officer. In the circumstances suggested by that peculiar
association of men I determined it was necessary to
investigate more fully the nature of the business activities of each of these men and of the company Hacbell .
5.013 In due course Campbell, who was the secretary
of the company, was called to produce the company books. At first he claimed they had been destroyed but after a visit
to his office by members of my staff in his company they
were f ound. An examination revealed that the company,
contrary to what was said to prospective employers of their lagging skills, had neve r done any work at all. The books
contained only expenditure, never income. Some capital had been supplied by Giannarelli but most of it came from a
generous branch of the Commercial Bank of Australia. The
closer inspection of the affairs of the directors suggested by all these matters has dominated the Commission's
activities for the past four years. Each man in turn has
led to many other associated criminal organisations and
ac t ivities. In this sense, the company Hacbell was at the
hub of the wheel representing all my varied investigations.
5.014 Examination of the company 1 s accounts showed
it was paying money to a man called
had at different times assumed the name of
Under the latter name he had practised a fraud
on land purchasers in the Ballarat area. He was convicted
of fraud charges following a lengthy trial in Sydney and was imprisoned in New South Wales in 1981. He has since been
Volume 1 -86- Chapter 5
Operational Overview
released. The land in question had been bought from or in
conjunction with corporate dealings
had complicated
in New South Wales which during the
course of his trial necessitated the calling of evidence by
connection between the Mac bell Group, The and then
became of considerable importance in my investigation. It was the connection with this group that lead to the tax
avoidance industry and the 11 bottom of the harbourâ¢â¢ companies which were to figure so prominently in my work in the middle years of the Commission.
5.015 I s hould indicate that I conducted very
detailed examinations into the affairs of Giannarelli,
and the other men. As far as Giannarelli was
concerned bank records were obtained. Subsequently
Giannarelli and his brothers appeared before the Commission and because of evidence given were referred to the
Attorney-General for the State of Victoria. Subsequently they were prosecuted for perjury, convicted and sentenced to periods of imprisonment. On appeal to the High Court, those convictions years to
examination
were set aside. Those proceedings took three
be resolved, effectively preventing further
of the Giannarellis. It was discovered on
examination of the banking records of members of the
Giannarelli family there were a number of accounts in false names conducted with the knowledge and apparent approval of the family 1 s banker. This was a tactic which I found time
and time again when obtaining banking records. It reflected no credit on the banking system in Australia.
5.016 The man had been convicted in 1976 on
a charge of false imprisonment. Not only was
Volume 1 -87- Chapter 5
Operational Overview
he a direct or of Macbell Minerals but of a further company
A very
detailed investigation of his activities was conducted. An
ana l ys i s was p repared which dealt in minute detail with his
business and personal activities. This analysis comprises f ive volumes and approx imately one thousand pages of text.
He has been committed for trial on some charges arising from
tho se investigations and accordingly I will not detail
further those matters .
5.017 I turn next to the company
because its activities in
1978 and 1979 were crucial to my developing interest in tax
e v a sion, was another of Campbell 1 s disused
companies which was resurrected. In this case, the purpose wa s f or tax evasion. Its "executive" included Campbell ,
and Johanson; again, an odd mix of differing levels of expertise. Amongst the papers obtained
from Campbell was found an application to the Reserve Bank o f Australia to bring into this country the sum $4.25M.
Th e application said that it was to be a "loan" secured by
certain properties. One of those properties did not exist
and in respect of the other the current owners knew nothing of the proposed sale. The application was false. Yet the
source of the funds was real enough - it was a man
from Lebanon, This man was said to be representing
oil sheiks from that country and was offering multi-million dollar loans at 9% per annum interest for periods up to 15
years. To obtain these loans it was necessary to lodge
"up-front" fees of $10,000 and travel with that sum to
Beirut. A number of Australian businessmen (not only the
group) made the trip. No loans ever came
through and many "deposits" were lost. It transpired that
was at the time wanted in West Germany on charges of
Volume 1 -88- Chapter 5
Operational Overview
f raud arising 6ut of similar activities . He apparently
appointed age nts in Sydney to act for him in connection with the se various loans.
5. 0 18 was one of the other
applicants for funds and $20,000 was " invested" with i n ant i cipation of loans which were never forthcoming ( i n
his case it is unlikely that he suffered personally as the
mon ies came from a company which controlled
and milked, and which subsequently went into liquidation). The company which acted as agent for was
Among its directorate and executive were included men with convictions for forgery and indecent exposure. One o f t hem was deeply involved in pornography and vice and was
a s s ociated with a drug trafficker. The l atter , who must
r emain unidentified because of outstanding drug trials,
s ought professional and financial advi ce from the same in 1978 and again in 1979. I was to discover much
l a ter in my enquiries an association of this group with an
Australian man The latter was involved
with the Meinerhagen gang in Germany. Last year he was
e x t radited from South Australia to serve a seven year term
of imprisonment on drug charges in Canada. I am remi nded of
the "internationality" of many of our leading criminals, as I '1\rrite this.
5 .019 The most important discovery about
, however, was its bank accounts. In the space of a
f e w weeks in 1979 over $9M passed through it. It was a $2
company. directors. Mi nerals
Campbell, Further itself was
Johanson and
investigations paying small revealed amounts
were the
that Hacbell of
Campbell, when asked who was,
money to
said he was
a carpenter from Mornington. In fact he was the same
No satisfactory explanation was ever given for
these small payments.
Volume 1 -89- Chapter 5
Operational Overview
5.020 The $9M passed through or from an account at
Bl acktown, New South Wales. When examined, that account and
others showed a small suburban bank handling hundreds o f
millions of dollars. The firm orchestrating this money
movement was Thus I had arrived at the settlement room
of one of the "bottom of the harbour" taxation schemes.
5 . 021 From this point the situation became rather
more complex. After much prevarication by and
(the man had by this time retired from the company and
was never called as a witness) the records of were
f ound. The records themselves were enormous in quantity and
even at this stage I have not been able to fully examine
t h em . They detailed much of the taxation fraud which had
been undertaken by and identified clients and others
a lso involved in the fraudulent activities.
5.022 had been involved in other
companies of doubtful reputation. had been concerned with In the early 1970's he
and in 1975 was a
director of He had left that company in
1977 to take up a directorship in
had been with in
the early 1970's. This followed convictions in Hobart in
1968 for false pretences. He later worked with
and was closely associated with in
1975-76. He became a barrister in New South Wales during
t his period although he never formally practiced as such.
I n applying for admission to practice as a barrister in the
New South Wales Supreme Court he failed to disc lose his
prior convictions from Tasmania. He joined at
in 1977 and they subsequently, with
formed had in the mid-1970's been a
director of at the time that
Volume 1 -90- Chapter 5
Operational Overview
company crashed. · He was later ordered to pay $100,000 to
cre ditors in respect of the failure of the company. The man
was also involved in the promotion and execution o f the tax schemes.
Section 16
5.023 So, by October 1981, I was aware of the
connection between the group and the
per s onnel. It became apparent that I had been introduced to
a massive tax avoidance industry. I might say that I was
a wa re that during that same period an investigation was
being conducted by Inspectors appointed by the Government of the State of Victoria pursuant to the provisions of the
Unif orm Companies Act 1961 (Vic). This investigation was c onducted by Messrs McCabe and LaFranchi and was in respect o f the group of companies which were involved in tax schemes p r omoted by Brian Maher and his associates. I became aware,
informally, that members of the Union had participated as dummy directors in the companies involved in those schemes.
However, the members of the Union involved appeared to be
d i fferent to the ones I was investigating with
Un fortunately, I was not able at that time to avail myself
of all the information garnered by those inspectors because t heir report was not tabled by the Victorian Government
until well into 1982. I was aware that the inspectors had
some difficulty in pursuing their enquiries because of the problems associated with Section 16 of the Commonwealth
Income Tax Assessment Act. I was shortly to be confronted
by the same difficulty myself. Because of that difficulty I
made recommendations in Interim Report No. 3. I detailed my observations to that stage involving the participation of painters and dockers in schemes. I said:-
Volume 1 -91- Chapter 5
Operational Overview
" ... the Commission is in possession of
comprehensive evidence that significant members of the Union have found themselves appointed directors of companies with
'paper' assets amounting to tens of
millions of dollars. Their use of false
names and false addresses seems to have
been effective in hiding their identity
from the authorities and thus achieving
the object of the scheme' . 11
(Interim Report No. 3, p. 11)
5. 024 I went on in that Report to indicate that my
continuing investigations were frustrated by an inability to obtain access to Taxation records and to results of
investigations carried out to that time by officers of the
Tax Department. I cast the situation in the following
terms:-
Volume 1
"The situation has now been reached by
the Commission in this area of its
investigation where firstly access is
essential to the records of the
Commissioner of Taxation and secondly
there is a need for the closest
co-operation between this Commission and the Taxation Office in the furtherance of its investigation. The Commission
requires the active assistance of
Taxation Investigation Officers. I
require access to taxation records.
Joint action of this kind is as necessary
in this area as it has proved to be where
the Commonwealth and the States have set up joint task forces to investigate
criminal organisations whose activities cross State borders. Provided there is
this joint co-operation, there is good
reason for believing that the
Commonwealth will be able to take
concerted action in this area of tax
avoidance with the countless financial benefits not only in respect of past
schemes but also in the deterrence of
future frauds. 11
(Interim Report No. 3, p. 16)
-92- Chapter 5
5.025 The Government was
recommendation, Section 16 of the subsequently - and have continued appropriate records when necessary.
Operational Overview
prepared to accept my
Act was amended and I was
so to be - able to obtain
5.026 Lest it be thought that all of my
i nvestigative resources were involved in this area of tax
a voidance let me record some other matters which were then t h e subject of active operations.
DEAD MEN
5.027 In the March 1981 Interim Report, reference
was made to the apparent provision of false identities by
Union branches for their members. To that stage the major
enquiries had involved the branch of the Union in Victoria. A comparison of the membership records of the Union in that State with those at the Williamstown Naval Dockyard
indicated that in eight separate instances men who had died were subsequently transferred from Victoria to other
branches of the Union in Australia. Death certificates for those men were obtained. Confirmation was thereby
established of death, presuming the death certificate itself was legitimate and that it referred to the person correctly identified as the deceased in that certificate. Thus, it
was improbable that the Union's records indicating the man was alive and transferring his membership were accurate. I was interested to establish the basis of these "transfers". It was not until April of 1981 - despite my earlier interest
in the phenomonen - that I was able to identify one of these
"dead men" working in another State using the identity
assigned to him.
Volume 1 -93- Chapter 5
Operational Overview
John Knight
5.028 The man identified was "Allan Bees". This man
was said to be working in Sydney in November 1980 where he
suffered an injury for which he claimed workers'
compensation. This was notwithstanding that "Allan Bees" had died in Melbourne in December 1979. Not only had he
died but Jack Nicholls, the former secretary of the Union, had attended his funeral and delivered the eulogy. As Bees' transfer had been arranged through the Victorian Branch of the Union it seemed certain it had been done fraudulently
for the purposes of providing Knight with a false identity.
5.029 A subpoena was served on the man masquerading
as "Allan Bees" in Sydney to appear on 11 May 1981. He did
not attend in answer to the subpoena and it was necessary to
issue a warrant for his arrest. He was examined as to his
correct identity and promptly agreed that his correct name was "John Andrews". He said the name Bees was one provided
to him by someone in the Victorian Branch of the Union but
failed, or refused, to identify that person.
5.030 The interest in this man was that he had used
the nom-de-plume. In due course it was ascertained that his correct name was John Knight. Under that name he was then
required in Victoria to serve sentences totalling in exces s of four years and in respect of which warrants for his
apprehension had been issued. He had also absconded from
bail in London where he had been charged with larceny. He
was facing two separate theft
activities in New South Wales in
was treated reasonably leniently
charges 1980. by the
arising out of
In due course, he
New South Wales
courts in respect of those charges
offences were not alleged). He was
(before whom his prior charged with perjury as
a result of his evidence before me and in 1983 was sentenced
to two months imprisonment. I understand that extradition proceedings in respect of the outstanding Victorian warrants
Volume 1 -94- Chapter 5
Operational Overview
are presently extant. He has absconded once again, this
time in New South Wales (where he was allowed bail
notwithstanding his history) thus avoiding the extradition.
5.031 It became clear during the course of examining
Knight's bank accounts that he had a close association with Leo McDonald the welfare officer with the Victorian Branch of t he Union. I will refer to that association below.
Tony Bissett
5 . 032 The case of Anthony Michael Bissett was of
greater Union significance as it involved Union branches i n other States which must have been privy to the false
i dentity created in Victoria. In respect of the Knight
ma t t er there was no evidence which implicated the Ne w South
Wa l e s Branch in the deception being practised.
5 . 033 As I have reported in my Interim Report No. 4
when dealing with "the facilities offered by the Union",
Bi s sett was the son of Douglas Sproule the vigilance officer of the Victorian Branch. Late in 1978 Bissett was charged
wi th theft and drink driving offences and was due to appear
in court in January 1979. He was then employed as a painter
& docker at the Williamstown Naval Dockyard.
5 .034 Apparently Bissett did not wish to appear in
c ourt in January. A man Rhodes who was a member of the
Union had died in September 1978. Despite his "death", on
25 January 1979 he was granted an open transfer of his union
:nembership by the Victorian Branch. Bissett took up that
t ransfer and thereafter removed himself interstate to Port Kembla, Queensland, Newcastle and eventually Sydney. By a clo s e investigation of records of Union employers in those var i ous centres I was able to follow the movements of
Bissett around Australia. I have commented previously on t he methods of "breaking aliases". It is not uncommon for
Volume 1 -95- Chapter 5
Operational Overview
men when using aliases still to use their correct dates of
birth (or at least birthdays) together with names of various
Of their families. By a detailed analysis using the computer facilities I was able to identify Bissett's
movements and the various aliases assumed;
5.035 Subsequently he was located in Tasmania and
appeared as as witness in June 1981, both in Hobart and
Melbourne. He would not admit the identity of the member of
the Union Executive ill Melbourne who had facilitated his change of name. He did agree that it was either Jack
Nicholls, the secretary, or Doug Sproule the vigilance
officer. He admitted using the different names during his
movements around Australia.
5.036 His presence in Hobart was brought to the
attention of the Victorian police authorities and he was extradited to Victoria to face the charges which had been
pending since January 1979. He was thus unable to avoid the
consequences of that previous criminal conduct.
Guido Spiller
5.037 A. separate fraud using false names (but not
involving ”dead men”) was exposed in hearings in June 1981. This involved one man making two separate claims for
compensation against different employers but covering overlapping periods of employment. The man involved was
Guido Spiller. He used the assumed names of John Joseph Spiller and Peter John Wilson when m8king workers.'
compensation claims in the period 1976-1980. I have
referred to this matter in a previous Report (as I have with
the matters of Knight and Bissett) and will not repeat the details here.
Volume 1 -96— Chapter 5
Operationaeverview
Phillip Scott
5.038 There was one other assumed identity which
caused me some difficulty during 1981. This was in respect
of a man Phillip Scott. I was aware of a1 member of the
Executive of the Victorian Branch of the Union by that name. I was also made aware of another man using the same
name and date of 'birtll but who 'was clearly not identical with him. During the course of 1981 a substantial effort
was made to identify this man. Eventually, as the result of
the work done by my staff, I was able to identify him as
Frank Kinsella. Kinsella was wanted for attempted murder in Brisbane; He had absconded from bail in 1975 and had
transferred a Union membership of a man called ”Johnson” from: Queensland to ‘Victoria. Since 1975 he had lived in
Victoria under various aliases and had worked from time to time as a member of the Union. He was working as a member
of the Unidn in November 1981 when served with a subpoena to appear. He gave a false name and he failed to answer
questions. As a result of information given by my
Commission to the Queensland police, extradition proceedings
took place shortly thereafter.
5.039 I was unable to ascertain the precise nature
of the association between Scott and Kinsella. Scott was to claim, informally, (he never -gave evidence) that Kinsella
must have adepted his identity by 'Etealiné” it. Nor has Kinsella given any explanation as to the source of his
identity. He refused to give evidence on any occasion on which he has been called. Both men have subsequently been
fined for failing to answer questions pursuant to the provisions of the Royal Commission Act.
Volume 1 -97- I Chapter 5
Operational Overview
5. 040 The point, again, of this operation was to
ascertain the basis on which false identities were being
provided. That is, was it purely with a view to shielding
them from apprehension by the authorities? Were any "fees"
payable for this particular service?
5. 041 There was another remarkable coincidence, if
that is what it was, in relation to the man Kinsella. Under
the name of Phillip Scott he was
the director of Macbell
in conjunction with
one of the dummy Johanson,
directors
the tax
for the bottom of the harbour companies used in
avoidance schemes. On the other hand, the "real''
Phillip Scott figured prominently in my investigations into
the SP bookmaking area. I also record that Kinsella was
acquitted on his trial in Brisbane some time during 1982 and
thereafter returned to Victoria. It was not until May 1983
that he was called back to appear before the Commission
(whereupon he again failed to answer questions). He has
since figured prominently in other investigations in respect
of which criminal charges have been laid against his
ass ociates.
SP Bookmaking
5.042 I have referred to the identification of the
dead man "Bees" as Knight. When analysing Knight 1 s bank
accounts I found that $38,000 passed through his accounts in
eleven months up to May 1981. He claimed the source of
these funds to be gambling winnings. I ascertained that
amounts in excess of $5,000 were paid from accounts
conducted by Leo McDonald in Melbourne. I conducted a
examination of McDonald 1 s banking and discovered that an
amount of $5,200 had been paid to him by a bank cheque from
the ANZ Bank Malvern. Separately, he had received a cheque
in excess of $2,000 from an account conducted by the defacto
Volume 1 -98- Chapter - 5
Operational Overview
wife of Charles Wootton. I was unable to establish the
basis for these payments save that in both cases they
appeared to involve gambling activities.
5.043 The account at Malvern was identified as being
that of Patricia Lorraine Fox. Her husband is Donald Andrew Fox who is and was known to be a very heavy gambler. An
analysis of her account showed that in the three years up to
April 1980 an amount just under $2M was deposited to it.
5.044 This amount seemed to be unusual for an
unemployed housewife. As a result I caused to be carried
out a fairly extensive analysis of her banking
arrangements. In the course of that it appeared that many
transactions had been conducted between the operator of the Fox account (who it subsequently appeared was the husband Donald) and a company Ecrip Pty Ltd. This company was
identified as the corporate entity pursuant to which Harold Price operated his Australia-wide SP bookmaking activities.
5.045 A preliminary inspection of the banking
records of Ecrip and Price indicated a huge money flow from the early 1970's onwards. As it became apparent that a
number of his customers were painters and dockers or
associates I resolved to carry out a long term investigation into Price's activities. This was to culminate in November 1983 with Price's appearance in Melbourne. He did not give evidence on that occasion in the circumstances which are set
out in more detail in Volume 4 of this Report. My
investigations into that volume and I
except that they
SP bookmaking generally are covered in
propose to say little else about them
assumed a fairly low profile in my
investigations on a day-to-day basis. large amount of analytical work has
Nevertheless, a very been done which is
demonstrated by the matters set out in the detailed volume. It will be apparent that Price was not the only major target
Volume l -99- Chapter 5
Operational Overview
of that operation. Certainly the painter & docker Scott -
who was identified as a medium level SP bookmaker - also
figured prominently in that part of my work.
Tax Evasion
5.046 With access to taxation documents - following
the amendment to Section 16 of the Income Tax Assessment Act and with a clarification of
reference enlarging the area
my
of
Commonwealth criminality terms to
of
be
investigated - I continued my investigations into that area in early 1982. It was then, for the first time, that
Federal Court proceedings were taken against me in respect of my terms of reference with a view to stopping the tax
investigations. I selected an example of a particular set
of company transactions to investigate thoroughly. It
involved the J.S . Heap group. Proceedings were taken in the Federal Court to prevent me
They were defeated both at
conducting this first instance and examination. on appeal.
They delayed the course of my work, however, for some little time.
5.047 This tax investigation became a headspinning
exercise. Just as had taken me to that
company in turn took me to
This company was another one
operated by Johanson, this time with a Selwyn Wallace both operating under false names. painter & docker and criminal. Johanson was well known as a
Wallace was a man who had
served a period of imprisonment for a
the 1930's, although he had been out
mid-1950's. He had been involved
murder committed in of prison since the
in other criminal
activities since his release prior to coming to my notice.
It appeared that these two men had set up as a vehicle
for delivering companies directly to the "bottom of the
Volume 1 -100- Chapter 5
Operational Overview
As the registered officer of was a flat in
Yarra11 was more apposite.
5 . 048 The company
investigations during 1982. promoters of the 11 harbour themselves of the services
the expresssion 11 bottom of the
was to figure in much of my
It appeared that many of the
schemes 11 were anxious to avail
so expertly provided by Johanson
and his friends. They were to figure in companies 11 treated 11 by and and a Queensland accountant
It was the connection with the latter that
was to the starting point for another major
investigation towards the end of 1982.
5.049 But that is jumping ahead. Throughout the
first half of 1982 the major thrust of my investigations was into the tax evasion area. With access to taxation records
I was able to ascertain the difficulties which had been
encountered in attacking the basis of the tax avoidance
industry.
5.050 McCabe and LaFranchi had been critical of the
lack of assistance given to them by the Tax Department. was able to obtain copies of legal advice given to
Commissioner of Taxation during the period from
I
the the
mid-1970 1 s onwards.· It was apparent from that advice that
action could have been taken to expose a particular tax
promoter, in particular Brian Maher. Nevertheless, because of what I found to be the gross inefficiency of the Perth
office of the Commonwealth Deputy Crown Solicitor no
proceedings were taken. My investigation into those matters formed a substantial part of volume one of my Fourth Interim Report. It is hardly necessary to repeat those matters here save to indicate the time taken operationally in
ascertaining the facts.
Volume 1 -101- Chapter 5
Operational Overview
5.051 The major thrust of the Fourth Interim Report
was that there be appointed a "task force" (by whatever name called) whose function would be to prosecute the promoters of what I regarded as fraudulent tax evasion schemes. That
force would also be charged with the responsibility of at
least coordinating the recovery outstanding tax. My view was, and it existed at all relevant times
by civil proceedings of
still is, that the law as
was sufficient for the
purpose of both criminal and civil proceedings. recommend retrospective legislation.
5.052 The result of that Report was
I did not
that the
Government accepted my recommendations and created the
office of Special Prosecutor. It thereafter appointed Mr R. V. Gyles QC of the New South Wales Bar and Mr Robert
Redlich of the Victorian Bar as Special Prosecutors pursuant to the new Act. Mr Gyles' brief was to:-
5.053 accorded
" .â¢. assume overall responsibility for the handling of the prosecutions for the
alleged taxation frauds referred to as
"bottom-of-the-harbour" schemes and for. coordinating the recovery by civil
remedies under existing law of the amounts thereby lost to the Commonwealth â¢.. "
(Special Prosecutors Office, Report by R.D. Gyles QC, 30th June 1983)
I was delighted by this initiative as with my recommendation and took from
responsibility of further investigating this area.
it
me the
I have
subsequently liaised with Mr Gyles on a regular basis.
There has been a complete exchange of relevant information in respect to matters coming under his charter. It was not
necessary for me to actively pursue this particular area
after mid-1982.
Vo l ume .1 -102- Chapter 5
Operational Overview
5.054 Of course, at the same time the appointment of
Mr Redlich facilitated the handover of other areas which
were then the subject of continuing investigations by me. I do not intend to detail those matters here as they are the
subject of discussion in other parts of this Report and, in
particular, in chapter seven of this volume.
Station Hotel
5.055 Notwithstanding
investigating the tax area
my major
during 1982 involvement there were with
other
continuing enquiries. One of these which was relatively low key was into the Station Hotel. Following the publication of media articles in February 1982, Loris Cooper, the owner of this hotel, appeared to give evidence. Those matters are
referred to in my Fourth Interim Report. I do not propose
to canvas them again save to say that there appeared to have
been gross intimidation of Mrs. Cooper both before and after she gave evidence before the Commission.
5.056 Whatever the merits of the matter were - and I
was unable fully to investigate the painter & docker point of view because of the refusal to give evidence - there were
a number of disturbing features in relation to this matter
which I listed in my previous report:-
11 Firstly there would seem to be an
assumption by the painters and dockers
that they were entitled to act without
regard to the law. Secondly that
assumption would seem to be based on the
ability of the painters and dockers to
rely on the fact that other citizens would not report their activites to the police
because it was well-known that the
painters and dockers were a group of whom ordinary people should be terrified.
Thirdly there was the reality of violence as demonstrated in the hotel. Fourthly
there was the threat of additional
violence of a major kind. Fifthly there
was the imposition on the hotel of an
illegal activity.''
Volume 1
(Interim Report No. 4, Vol 1, p. 107)
-103- Chapter 5
Operational Overview
I was unimpressed with the attitude of the Union. This was
an area, like many others, where I would have been much
assisted by evidence from Union members.
Further Taxation Fraud
5.057 During the year
and men)
I became aware of another
dockers. This fraud was fraud involving perpetrated by painters a man (or collecting unclaimed group
certificates from employers of painter and docker labour and then submitting those to the Taxation Department as his
own. By this means, he was able to obtain refunds for
himself in respect of a number of different men. This
matter became the subject of a full investigation by members of the Australian Federal Police with whom officers of my Commission cooperated. In particular, access was granted to our database and a coordinated approach to the matter was
achieved.
5.058 In due course, Special Prosecutor Redlich took
over the conduct of this matter and Peter Wilfred · King was charged with offences. He was convicted at the Melbourne
Magistrates Court in December 1983 and sentenced to a term of imprisonment. This is an example of an operational area
where the contribution required of me after initital
identification of the offence became minimal although
there was a continuing liaison and,
coordinating role involved.
5.059 In January 1982, whilst
activities of the men associated with
to some extent,
investigating the I obtained
access to some interesting banking records. This was part
of a complicated investigatory process during which I sought to identify the directors of by their correct names.
Volume l -104- Chapter 5
Operational Overview
This I was able to do. But as with other operationa l areas ,
it in turn widened the scope of my enquiries. I became
(subsequently
Special Prosecutor Gy l es) This was a so-called
a ware of the tax evasion promoter t o be the subject of charges by
and of a company
" merchant banker" (this appellage was so often u s ed by
companies involved in tax evasion as me aningless) the major r ole of which
provision of "finance" for the
to render the title
appeared to be the
round-robin banking
transactions which were part and parcel of tax evasion
settlements. Having obtained certain of that company's
records and formed a certai n view of its activities I have
referred it to the appropriate bodies for conti nuing
investigation . Personnel o f had played , and were
then playing, a major role in the project wh i ch was
as at the time of my initial interest in it being promote d
a round the country.
5 . 060 An accountant
Brisbane contact of the men.
was identified as a was promoting
various tax schemes to client s. I sought banking documents which were produced from a Brisbane branch of the Co mmercial
Bank of Australia. I was intrigued that a $2 c omp any
( ) the directors of which were , I
d i scovered, the men (under their correct names) was to
be involved in oil drilling and was to borrow overseas from Singapore - and from a leading overseas bank - many mill i ons o f dollars supposedly for such oil drilling . The sum of
$400 million was mentioned. It was not merely of interest
to me but of concern as it seemed there might be
international monetary repercussi ons with a transaction of this size . But why was it these men who were known to me
merely as tax company directors - of no particular business expertise - were to be the directors of this company?
Volume 1 -105- Chapter 5
Operational Overview
5.061 I was not able to develop my interest in this
particular matter at that time. I became aware shortly
after my public exposure of the directorate in February 1982 that the men were summarily "dismissed". I had
expected that the professional people who were apparently behind the company would then work within the law. Such was not the case. By July 1982 I had completed the major
Interim Report to Government dealing with the tax avoidance industry and many other matters. By September 1982 I was
able to look again at Hamidan. I was not impressed with
what I found.
5.062 into this
activities.
During the next
company played a A total of 56
six months, major role the investigation in my operational
were called, 2,300
pages 42,000
witnesses
of transcript recorded, 450 exhibits tendered pages of documents examined. (During tha t
and same
period, incidentally, I took evidence from another 130
witnesses and received tens of thousands of pages of
documents relating to other matters of on-going concern. The desirability of my maintaining the impetus . of other
investigations necessarily curtailed the time available to devote to the investigation of the oil drilling company.)
5.063 During the period of the operation I liaised
closely with the Queensland Fraud Squad, the Special
Prosecutor's Office conducted by Mr Redlich, the Tax Office and other Government Agencies. Charges were laid by the
Queensland Police against the principals. Subsequently charges were laid against various men in Perth. The
Queensland charges resulted in committal for trial of four men on charges of Fraud; committals in Western Australia in respect of charges laid by the Special Prosecutor - but now supervised by the DPP 1 s Office - have
Queensland trials are expected to take
1985 ..
Volume l -106-
not concluded. place sometime The in
Chapter 5
Operational Overview
I submitted Interim Report No. 5 in July 5.064 1983. It contained a complete history of this matter (in
and a shorter sanatized summary of 126
Any reader seeking further details of
Volume 3 therefore) pages (in Volume 2). my investigation should seek access to such documents from
Government. The recommendations I made were many. They
concluded with a recommendation that the Report have a wide circulation agencies. occurred.
5.065
within Government Unfortunately, tha't and among does not
law enforcement seem to have
I should state that in the course of this
matter interviews were conducted by my staff with resident s of Singapore and Hong Kong and assistance sought from
Government agencies in those countries. With members of my staff, I visited Singapore for four days in December 1982
for the purpose of establishing liaison with those
agencies. Separately, a team visited in March
1983 in an endeavour to complete the .. es. I again
record my gratitude to the Attorney General of Singapore and to the Singapore Police for the assistance and co-operation shown to me and my staff. I also thank the High Commission
representatives in Singapore who facilitated that visit. Two members of my staff also visited Hong Kong for one day
in December 1982 and I note my appreciation to the member s
of the Royal Hong Police who assisted them with their
enquiries and provided information.
5.066 Notwithstanding the commitment of time and
resources to the Hamidan investigations other matters were proceeding apace. I had had the assistance since 1 October
1980 of two counsel, Mr Douglas Meagher QC and Mr Rex Wild. By Easter 1983 it was obvious because of the workload
already carried by those men and the need to give some
attention to 11 fresh 11 targets as they arose week by week
Volume 1 -107- Chapter 5
Operational Overview
- that further counsel was required. In May of that year Mr
Lex Lasry was appointed as a further counsel assisting . I
have described separately the role undertaken by counsel in my Commission. It is only necessary to say here that t h e
operational demands of the Commission have certainly
justified the briefing of three counsel.
Carroll
5.067 On 3 January 1983 Ian Carroll was shot dead.
He had been a member of the Victorian Branch of t h e Union
a nd of its executive from 1974-78. He had last worked as a
painter and docker in 1976. In 1974, for some very short
time, he was acting secretary. Police since his death have been seeking to interview one Russell Cox, a criminal and
escapee who at various times has been "number one" on the
"most wanted lise'.
5.068 into whom
There
the are is
I have conducted an exhaustive investigation
activities of Carroll and his associates (most of alive and of great current operational interest) . little point in identifying those associates in
of my report. A summary of their activities
appears as Volume 6. I say summary - an analysis has been
conducted of the affairs of these people. That analysis is
exhaustive and is the result of many hours of labour by
members of my staff and in particular of senior assisting
counsel. It contains, approximately 1165 pages and results from consideration of the evidence of 38 witnesses, 395
exhibits and 33053 pages of documents. The analysis has
been made available to appropriate bodies to assist in the continuing policing of various areas of criminality. There is no doubt that the former associates and friends of
Carroll will continue to create work for those entru sted
with the enforcement of the criminal laws in Australia .
this part
Volume 1 -108- Chapter 5
Operational Overview
5.069 I should indicate that the Carroll
investigation and the extended links wh ich have b een
e s tablished have led the Commission to a wide v a riety of
other criminal activities and, in some cases, organisations or networks. These have been both in and without Victoria . A solicitor used by Carroll in Melbourne has b een
investigated, in conjunction with the Victorian Police Fraud Squad; that man has been referred to the Special Prosecutor
a nd I understand that charges have now been laid.
5 .lJ70 Furthermore, it was as a result of t he
e x tended links with the Carroll Group that I visited
Queensland in early 1984 and received information which l ed to my investigation into drug dealers residing in the No osa a r e a of that State. I will refer again to those matters
below. As to other associates I refer to the matte r s
contained in volume six.
Lockyer
5.071
"It is only by not paying one 1 s bills
that one can hope to live in the memory
of commercial class." Oscar Wilde, Phrases & Philosophies For the use of the Young
Another matter arose in the summer holiday
period of 1982/83 which was
investigations. By this time, commenced operation. In the
a rranged for a warrant to be
to lead to a new range of
Special Prosecutor Gyles h ad course of his work he had
executed in respect of the
Lockyer. Lockyer in his leading tax evader, Donald activities had used a variety of "dummy'' directors and had acted as a sub-promoter for Hamidan.
Volume 1 -109- Chapter 5
Operational Overview
5.072 I obtained documents from Lockyer's Melbourne
office and evidence was given by members of his staff. I
discovered he was bankrupt and had committed numerous
offences against the Bankruptcy Act in different States of Australia. His wife, Suzi Lockyer, was living in
California. Between them they had assets of some
substance. A estimate of $12M has been made. I liaised
very closely with the two Special Prosecutors, Messrs Gyles and Redlich. The latter initiated civil proceedings against Lockyer and his wife
issued against both of
obtained. Prosecutions
consequent to taxation assessments them. "Mareva" injunctions were were launched by Mr Redlich for
Bankruptcy Act offences. Lockyer was He has since been charged by Mr
conspiring to defraud the revenue
convicted and gaoled. Gyles 1 office with
of the Commonwealth.
Those matters remain incomplete. I made available documents obtained by me from Lockyer's offices in various States to the Special Prosecutors. I have encouraged their continuing and separate investigations and proceedings, not that much encouragement was needed.
5.073 I believe that the particular "joint"
operation involving Lockyer has been an illustration of a very successful undertaking by the investigatory body - with a selective and proper use of its powers liaising with
prosecutorial and civil recovery agencies. The action taken by Mr Redlich 1 s group was speedy, efficient and effective
for the purpose. Other targets suggested themselves during the course of my investigation into Lockyer's affairs and I will refer to them below. Once again, the networks extended into other areas.
The Fight Against Organised Crime
5.074 Insofar as it has had some effect on
operational matters I repeat here that I and my senior
counsel had a considerable involvement at different times
Volume 1 -110- Chapter 5
Operational Overview
during 1983 in proposals relating to a national crime
agency. The Liberal Government had enacted its National
Crime Commission Act at the end of 1982 but this h a d no t
been proclaimed by the time of the March 1983 election and
the change of Government. After the election, . considerable discussion ensued as to the direction which crime prevention should take in this country. Douglas Meagher presente d a
series of papers to the 53rd ANZAAS Congress held in Pe r t h
in May 1983. Those papers were entitled ORGANISED CRIME. I chaired the session at which they were presented. Both of
us were invited subsequently to attend and speak a t the
seminar convened by the Federal Government in Canberra i n July 1983. Volume one of my fifth Interim Report which was delivered in the same month was, in part, directed again t o
the issues involved at that seminar. A considerable amou n t of time was taken in the middle of the year in responding to
these issues which were of some moment.
5.075 I had, of course, already dealt with the
problems, as I saw them, in the fight against crime in
Interim Report No. 4 delivered in the previous year . As I
have said elsewhere in this Report, I believe t h e ma j or
impetus for the previous Government's legislation for a
Crimes Commission had come from that Report and the work of my Commission.
5 . 076 There were to be much greater demand s on my
time and that of my senior staff at the end of 1983 and i n to
the new year. This followed the reference by the Senate of
the pending legislation introducing the National Crimes Authority to the Standing Committee of the Senate o n
Constitutional and Legal Affairs. I will not repeat a
description of the work undertaken save to indicate that it was time consuming and,
of the operations of my the personalities in
to some degree at least, disruptive Commission. I turn, now, to one of
respect of whom enquiries and
operations were able to proceed during 1983.
Volume 1 -111- ·chapter 5
Operational Overview
Ian Beames
5 . 077 As an offshot of my collation of material in
r espect of Lockyer I was directed to the activities of a
Queens land accountant Ian Be ames. This man already had a
criminal history following his involvement in what might be termed white collar crime . At the time I commenced my
investigation into his activities he was still in prison. I knew already something of him. He had been Brian Maher's
"representative" in Singapore in 1978 and in that capacity, had been involved in dealings with the Nugan Hand
organisation.
5.078 Beames gave evidence in regard to a company P .
& S. Meats Pty Ltd. This company, despite its name, had
nothing to do with the butchery trade. Its major activity
was in the field of tax minimisation through film schemes. The dir ectors of this company were Beames, Lockyer (at one
stage) and a man called Brian Ray. A great deal of money
passed through the accounts of this company despite the fact that it was of no substance .
5 . 079 My enquiries took me to a man called McCarthy
who was a financial adviser employed by Lockyer. He had
formerly been employed as a manager with the Comalco House branch of the Bank of New South Wales in Brisbane. He was
dismissed from the Bank for misconduct having allowed the bank to become a creditor of the Lockyer group of companies to the extent of $2M . He was dismissed in December 1980 and
thereafter sought and obtained employment with Lockyer. He was examined in a public session of the Commission in June
1983. His activities and the evidence given by him have
been referred by me to the Queensland Police Fraud Squad for its attention.
Volume 1 -112- Chapter 5
Operational Overview
Kerry Packer
5.080 From other information I had received, but
which it is not appropriate to detail here, I was anxious to
pursue the financial arrangements of P. & S. Meats. I
discovered that in February 1980 cash payments totalling $225,u00 were made by this company to Kerry Packer. I
received conflicting evidence in relation to Mr Packer's involvement with the company P. & S. Meats. Those matters are developed more fully in a separate volume of this
Report. All I need say here is that depending on which view
is accepted, Mr Packer was either a financier/investor or an investor in the film schemes promoted by P. & S. Meats. A
matter of separate interest is that Mr had borrowed the
sum of $925,000 from a company Progress Credits in Singapore at the end of 1979. This money was brought into Australia
pursuant to Reserve Bank approval. $800,000 of the amount received was invested, in a manner contrary to the advice
given to the Reserve Bank, in P. & S. Meats. I was anxious
to probe the film scheme. Because of my previous experience with the p·ersonnel involved in the Hamidan exercise I was
sceptical as to the legitimacy of this scheme. I was also
anxious to establish precisely what happened to what
otherwise appeared to be unexplained cash payments. There was a further cash payment of $120,000 from the accounts of P. & S. Meats later in 1980 in respect of which no
explanation has ever been received by me despite earnest enquiry. stated he had no knowledge of it although his
signature was on the cheque.
The Death of Coote
5.081 As part of my investigation into the
connection between Ray and Packer I was informed that these men had dealt in a number of joint land transactions in
Queensland. One of these was at Victoria Point. In the
course of looking at that development I became aware that
Volume 1 -113- ·chapter 5
Operational Overview
the manager of the branch of the Bank of New South Wales at
Capalaba had resigned and subsequently become employed by Brian Ray. This man was Ian Coote. This had a familiar
ring to it. Mr Coote's branch of the Bank was involved,
prior to his resignation, in lending money to purchasers of land at Victoria Point. The circumstances of those loans
were suspicious and, once again, they are dealt with at some length in the separate volume dealing with those matters.
5.082 wounds. suicide.
Mr Coote died on 16 December 1982 of gunshot
The view at the time was that he had committed
I am satisfied that it was murder. My views and
recommendations are set out in the separate volume.
5.083 The investigation into these matters was, from
time to time, interrupted by Federal Court proceedings taken by various of the parties involved. However, as at December 1983 all court proceedings were abandoned. I was therefore able to continue my investigations until 30 June 1984 when,
in keeping with my agreement with Government, I suspended operations. There are matters still to be investigated in
this area. They are of considerable importance.
SP Bookmaking
5.084 In Spring 1983 preparations were made for
public hearings . in respect of the SP bookmakers Price and Scott. The purpose of those hearings was to indicate the
level of income of these men and to expose those activities to public gaze. As it turned out, Price was not able to be
identified by name as he had been apprehended conducting an SP operation when served with his subpoena to attend before the Commission. As it was then thought that he would be
prosecuted and before the courts in a relatively short time I deemed it appropriate not to have his name released. It
Volume 1 -114- Chapter 5
Operational Overview
is now nearly a year since that time and he has only jus t
been served with his proceedings (and that because of the
efforts of members of my staff). As it is unlikely that
Price will be appearing before a jury I see little harm in
now identifying him.
5.085 quantified because of
During the course the loss in revenue
the operations of
of those hearings, c ounsel sustained by Governmen t s SP bookmakers.
related to the particular man appearing then, it
that, if these figures were extrapolated, the loss indeed. My intention was to concentrate the
Although was clear
was great minds of
Governments and the community on this problem. It was
important, as I saw it, for the community to decide its
attitude to the SP industry generally.
5.086 At the same time, evidence was also called
from a number of bank officers. This evidence aga i n
confirmed the indifference some officers maintained towards community standards and laws when looking to the interests of their customers. Very little regard appears to be paid
to the legitimacy of customers' operations; rather, it is a
question of whether the client has the dollars or the
11 associations 11 to justify his being given a favoure d
position by the banker.
5.087 Evidenc-e was also called in respect of a
11 pricing service11 operated by Ray Michael in New South Wale s and also interstate. The evidence was that Michael, a t
various times, supplied both Price and Scott (amongst a
great many others) with pricing information. This was vital to their business - without it an SP cannot operate. In the
course of those investigations I received information which led to the view that Michael may have been 11 nobbled11 in
respect of the evidence that he was to give. He had
received a visit from a number of painters and dockers
whilst his evidence was part-heard. The painters and
Volume 1 -115- Chapter 5
Operational Overview
dockers involved were called but, as did Mr Michael
eventually, referred to
prosecutions
they refused to answer
the Attorney-General followed. I refer to
questions. and in
They were due course
those matters elsewhere
in this Report. A considerable part of my time was taken up
these allegations which seemed to be
application to the role that a Royal
in investigating crucial in their
Commissioner plays.
S.A. Union Extortion
5.088 During the term of my Commission I had
received allegations of demands made by members of the South Australian branch of the Union against ship owners. I first took evidence of them, in confidential session, in Adelaide in 1981. Those allegations were very carefully investigated by members of my staff and, under their general direction, members of the Australian Federal Police based in South
Australia. This matter is the subject of a separate chapter in my Report. Those allegations were the basis of a week's
public hearings in Adelaide in October 1983. I returned to
Adelaide in April of this year to conclude those hearings. It was necessary to hear submissions from counsel assisting me and counsel instructed by the Union in respect of the
matters raised. I deal with these matters in chapter 2 of
volume 3 of this Report.
Drug Trafficking
5.089 In considering this operational report it will
be noted that there is no reference in it to drug offences.
It should not be thought, however, that this indicates I
have not in the course of my investigations been
interested in this area of criminality; quite the However, it is a sensitive area and one in which I have had
to exercise care in preparing this Report. In particular, I was anxious:-
Volume 1 -116- Chapter 5
5.090
Operational Overview
(a) Not to associate unfairly any person
with the trade in drugs;
(b) not to interfere with any current
operation mounted by law enforcement bodies;
(c) not to identify any drug offender
currently awaiting trial.
These restrictions have meant that it is
virtually impossible, in a public sense, to describe my
investigations. I can say that throughout the last two
years, I have been monitoring various drug offenders and
operations which have been run by different 11 task forces". Information has been transmitted to and from appropriate police and other forces. In this way, some loosely
coordinated role has been achieved. When I have been able
to obtain usefu l information following banking and/or other documentary records to make that available. A number
the acquisition of I have been anxious
of arrests and
prosecutions have resulted from information obtained,
analysed and disseminated by my Commission. Where possible, I have referred to those in Chapter 7 of this Volume.
5.091 In appropriate cases I have encouraged joint
action by those entrusted with drug enforcement and those with the responsibility for collecting revenue. Although Section 16 prevents investigators from distributing
information gleaned from tax offenders (who are also drug dealers) nothing in the law prevents the police officer from informing the Tax investigator of his suspicions as to the
undeclared income of the dealer. Thus, it may be that
although the dealer is able to escape the heavy penalties
imposed by the criminal law he may still fall foul of the
revenue law - which in turn, in some cases, may provide
penal sanctions for the particular misbehaviour. This is an area which should be explored by the authorities and is the subject of recommendations in volume 5 of my Report.
Volume 1 -117- Chapter 5
Operational Overview
5.092 There were a number of extant investigations
into drug related matters of criminality being investigated by me as at 30 June 1984. In respect of these matters
analyses had either been completed or were well advanced. Those matters have been made the subject of proposed
references to trust that
investigations.
Other Matters
the National Crimes Authority. the Authority will proceed
I sincerely
with those
5.093 In preparing this overview, I have not sought
to specify every "target" identified and/ or pursued by my Commission in the last four years. Instead, I have sought
to highlight the major ones and to demonstrate how each
developed from another. I have no doubt that if the
outstanding investigations are continued they will in turn lead to other and, quite possibly, bigger targets. Although I have specified what I have called "major" areas of
criminality in this chapter there are others of some
substance with which I have been concerned. These cannot be identified at this time in a public document. They must
remain for the time being the subject of confidentiality as between Government, the National Crime Authority and my Commission.
Volume l -ll8- Chapter 5
CHAPTER 6 - THE COMMISSION AND THE COURTS
I NTRODUCTION
6.001 court
My intention
proceedings which in this chapter is to detail the
have been bought against the
Commission during the last four years. Those proceedings -with one exception in the Federal Court - have sought to
challenge my investigations into particular subject matters. There have been various writs, summonses, notices, hearings and appeals taken by different parties but in each and every case they were to no avail in law. Each one of those
proceedings has resulted in a dismissal of the challenge to the Commission 1 s work. Nevertheless, they have been
effective in delaying my progress; in no case fatally to the operation but in some cases investigations incomplete. the length to which parties
in such a way as to leave some
Because it is important to see
will go in expense of both time
and money in seeking to prevent a close enquiry into their
affairs, I will summarise these court proceedings in the
course of this chapter.
6.002 These proceedings may be regarded, and I do so
regard them, as the legitimate expression of a citizen 1 s
right to challenge the activities that are perceived to
affect his interest adversely. I have no quarrel with this
legitimate and open conflict.
6.003 In each case where attempts have been made to
halt my investigation by the issue of proceedings I have
been represented efficiently by Australian Government solicitors or the Victorian Crown Solicitor, who in turn
have instructed .able counsel. That representation has in every case been successful. I acknowledge the service
Volume 1 -119- Chapter 6
The Commission and the Courts
provided in these matters through the offices of the Sydney, Perth and Melbourne Deputy Crown Solicitors (as the offices were then described) and the Victorian Crown Solicitor. I will summarise the three major actions in which I was
involved. In each case I indicate the general area of my
sought to be stopped by those investigation proceedings. which did not matters too.
Giannarelli
6.004
which was
There were other interlocatory proceedings proceed to full hearings. I will note those
In June and July of 1981 I issued subpoenas to
the managers of various branches of the National Bank of
Australasia Ltd. (as it was then known) to produce records
relating to Giuseppe Giannarelli and other members of his family. On 28th July 1982 an Order Nisi was sought on
behalf of the family before Mr. Justice Crockett, of the
Supreme Court of Victoria. An order was made that I show
cause why I should not be prohibited from enquiring into the banking activities of the applicants. The Order Nisi was
returnable on 31st July 1981.
6.005 Guiseppe Giannarelli stated in the affidavit
in support of his application for the Order Nisi that he had
had 11
nothing to do with the Federated Ship Painters and
Dockers Union11 ⢠The State Crown Solicitors Office in
Melbourne undertook the defence of this matter. It was
sought to set aside the affidavit on the basis that it was
misleading. There was an abundance of evidence linking
Giannarelli directly with the Union . The matter came on for preliminary argument on 31st July when Crockett J. indicated it was apparent on the material there had been a lack of
candour on the part of Giannarelli. The matter was
adjourned for a substantive hearing to 3rd August 1981 when
Volume 1 -120- Chapter 6
The Commission and the Courts
Giannarelli withdrew the application. The delay to my
investigations caused by the issue of these proceedings was thus short.
Ross and Heap
6.006 By the end of 1981 I had commenced
investigating what were later shown to be "bottom of t he
harbour" tax avoidance schemes. In the course of those
investigations it was my intention to examine certain
transactions involving the J.S. Heap group of companies. In October and November 1981 subpoenas were issued requiring Mr. Heap to attend to give evidence and produce documents . During the course of his evidence Heap indicated that he had
relied heavily on the advice of his accountant Ross . Ross
then appeared to give evidence. A statement was made by
senior counsel assisting me that he was considering making submissions that Heap had been involved in a conspiracy, the effect of which was to breach Section 67 of the Companies
Act. This statement was made on 17th February 1982. On the
following day a submission was made on behalf of Ross and
Heap that such an enquiry would be beyond the terms of
reference . I rejected those submissions in a ruling made in
March 1982.
6.007 Thereup9n Ross and Heap sought under the
Administrative Decisions (Judicial Review) Act 1977 a review of that "ruling" and of my decision to summons and question various witnesses in relation to their affairs. They sought interlocutory injunctions to restrain me from proceeding.
The application for interloctury relief was dismissed in the Federal Court on 19th April 1982 by Ellicot J.. (This
matter has been reported as Ross -v- Costigan [1982] 41 ALR 319). The parties appealed that decision to the Full
Federal Court. That appeal was dismissed on 12th May 1982. (The appeal was reported as Ross -v- Costigan [No. 2] [1982] 41 ALR 337). Subsequently a notice of motion was filed on
Volume 1 -121- Chapter 6
The Commission and the Courts
30th July 1982 seeking special leave to appeal to the High
Court from the judgment of the Full Court. No further
action however was taken by the applicants.
6.008 The effect of the action taken by the parties
was to delay my investigation of their affairs from March
1982 until July of that year. By then I had submitted my
Fourth Interim Report which concluded my substantive
investigations into the tax fraud matters. The
investigation into the particular matter involving Heap and Ross was therefore not completed. As it was, however,
merely representative of a huge number of similar
transactions - as I was later to become aware - the delay
was not fatal to my investigations.
Faint
6.009 On 16th September 1982 Lloyd Errol Faint
appeared in sittings of the Commission held in Brisbane. It was intended to examine him in relation to various matters including Faint 1 s involvement in tax schemes which., in turn, were thought to involve members of the Union. A claim was
made on his behalf that he be entitled to refuse to answer
on the basis of the privilege against self-incrimination. I delivered a written ruling pursuant to which I ordered the witness to answer certain questions. On 26th October 1982 a writ was issued in the High Court by Faint seeking
declarations that I had no power to compel him to answer
questions because of the privilege against
self-incrimination and further that the questions were
outside my terms of reference. On 3rd November 1982 I
undertook not to require Faint to answer any questions until such time as pending criminal proceedings involving matters of similar compass had been finally disposed of. Those
proceedings are still pending and as a result my undertaking
Volume l -122- Chapter 6
The Commission and the Courts
still stands. Faint's claims for declarations reillain in
abeyance and will be rendered abortive on return of my
letters patent.
Boyden
6.010 On 21st October 1982 John Arthur Pridea u x
Boyden gave evidence before me in sittings in Melbourne.
This evidence related to his involvement in the Hami dan
matter and his employment
evidence was part-heard and by the company Transia.
adjourned to 26th October His to
Perth. On the latter day Boyden objected to answer further questions on the grounds that those answers might
incriminate him. I directed him to answer but adjourned t he further hearing of his evidence for 7 days to enable him t o
take whatever action he might be advised.
6 .Oll On 29th October Boyden sought from the Federal
Court in New South Wales an order for review of those
decisions. That application was heard ex-parte in t he
Federal Court by Mr. Justice Lockhart on 2nd November 1 982 and an interim injunction was obtained requiring Boyden to comply with his
restraining me from subpoena until 5th
November. On the adjourned date the court was advised t hat
I would not require Boyden to comply with the subpoena until 17th December 1982. . In early December Boyden was charged with various offences by the Queensland Fraud Squad. The
Federal Court proceedings came on before Lockhart J. on 17th December when I undertook not to require Boyden to a nswer
any questions or produce documents until the charges pending against him had been disposed of or other order made. Those charges remain pending. Boyden has since been committed f o r trial in Brisbane but the trial is not expected to take
place until l9b5. There has
and fatal delay in completing obviously been a substantial examination of Boyden. This
however was not caused by the Federal Court proceedings but
Volume 1 -123- Chapter 6
The Commission and the Courts
by the issue of criminal charges against Boyden in early
December 1982. I would have, in any event, ceased to allow
Boyden to be examined once charges had been laid.
Huston
6.012 Huston was a Brisbane accountant who was
examined in relation to his association with the company
Hamidan and the directorate thereof. He gave evidence in
Melbourne and Brisbane on various dates in October, 1982, concluding on 14th October. On 15th October 1982 he was
arrested by the Queensland Fraud Squad and charged with
various offences involving the matters that I was then
investigating. Following discussions between his solicitors and counsel and the solicitor instructing the Commission I undertook on 22nd November 1982 not to take any evidence
from Huston in relation to the charges being faced.
6.013 On 26th November 1982 the solicitors for
Huston requested an undertaking that I refrain from calling evidence from other witnesses involved in the Hamidan matter in any manner which might prejudice the hearing of the
criminal charges. On 29th November I indicated I would take no steps which would prejudice the fair hearing of charges against Huston but I did propose to take evidence from other witnesses on a number of matters, some of which related to
Hamidan. I indicated that that evidence would be taken in
private sittings of the Commission.
6.014 On 6th December 1982 hearings of the
Commission resumed in Perth. On 8th December 1982 Huston lodged in the Federal Court an application for an order to
review my ruling that I would be proceeding with the
hearings. In particular it was sought to restrain me from
which might have the effect of
guilty of any offence for which he
An interim order in those terms was
receiving any evidence proving that Huston was already stood charged.
Volume 1 -124- Chapter 6
The Commission and the Courts
made by Mr. Justice Toohey operative until 4.30 pm on 9t h
December. The matter came on before His Honour on the
following day. By then I had given an undertaking that it
was my intention to hear the relevant evidence i n
confidence. The court accepted this undertaking, argument to the contrary from Huston's counsel,
application was accordingly resolved. (This matter reported as Huston -v- Costigan [1982] 45 ALR 559)
despite and t he
has been
Peter Lloyd
6.015 Peter Lloyd was subpoenaed to appear to give
evidence and to produce documents. He appeared during
hearings in Perth on 26th-27th October 1982 but failed t o
produce all the documents in his possession as required.
Lloyd was a solicitor in practice in the firm of Dwyer &
Thomas in Perth. He was to be examined about the part
p layed by his firm in the affairs of Hamidan and others.
6.016 On lOth December 1982 Lloyd made application
under the Administrative Decisions (Judicial Review) Act 1977 for a review of my decision to require him to give
evidence and produce documents. That application was based on legal and professional privilege and the alleged
irrelevance of the evidence required. At a preliminary
directions hearing on 20th December dates were set for
mutual discovery, the filing of affidavits and the hearing proper. The order requiring discovery was subsequently
vacated and contested questions relating to discovery we r e litigated on 11th February 1983. The substantive
application was set down for hearing on 2nd March . l983.
6.017 In response to an affidavit filed by the
solicitor to the Commission on 7th February 1983 Lloyd file d a notice
affidavit of motion proposing that the Commissions' s
be struck out. This notice of motion wa s
dismissed by Mr. Justice Toohey in the Federal Court on 23rd February 1983.
Volume 1 -125- Chapter 6
The Commission and the Courts
6.018 On 12th April 1983 Lloyd was advised by the
solicitors acting on my behalf of a desire to have the final
hearing dates fixed. On 15th April 1983 a notice of appeal
was lodged in respect of the decision by Mr. Justice Toohey to dismiss the notice of motion. On 21st April 1983 Lloyd
gave notice of his intention to file a written submission in support of the appeal. The appeal was heard on 4th May 1983
by the Full Court of the Federal Court and was dismissed by
a judgment of 9th May 1983.
6. 019 On lOth May 1983 Lloyd requested a statement
under Section 13 (l) of the A.D.J.R. Act. I sought a date
for hearing on the issue of discovery and the substantive
matters. On 20th May such an application was made and the
final hearing was fixed for 14th July 1983. On 26th June
Lloyd applied to vacate the given hearing date and to set another date for argument on the question of
interrogatories. This interlocutory application was
dismissed by a judgment of Mr. Justice Toohey on 6th July
1983 (reported in a note at (1984) 50 ALR 665 at 681).
6.020 The substantive matters were heard on 14th and
15th July 1983 by Mr. Justice Toohey in the Federal Court.
(Lloyd -v- Costigan [1983] 48 ALR 241). Lloyd's application against me was dismissed, he appealed against this decision and the appeal was heard on ll th October 1983. On the
following day the appeal was dismissed. (The appeal was
reported as Lloyd -v- Costigan [1984] 53 ALR 402). On 26th
October 1983 I caused Lloyd to be advised that, in view of
the fact that charges had since been laid against him, the
Commission would not require his attendance until those
proceedings were concluded. As at the date of writing my
Report I understand that those proceedings are still
pending. The effect of Lloyd 1 s activities in the Federal
Court were such as to prevent his examination being
concluded at any time between October 1982 and October 1983
Volume 1 -126- Chapter 6
The Commission and the Courts
when he had exhausted the appeal process (save for the High
Court). The effective delay was of 12 month's duration
prior to becoming aware that proceedings had been issued
against him, thus negating the original subpoena.
Ray, Packer and Ors
6.021 On 4th and 5th October 1983 Brian Ray, James
Baker, Ian Beames and other witnesses gave evidence
concerning business dealings involving Kerry Packer. On 6th October 1983 Hr. A.B. Shand QC sought leave to appear on
behalf of Mr. Ray. the end of the proceedings on that
day Mr. Shand made a statement on behalf of Mr. Packer
indicating that . Packer was willing to assist me in my
enquiries and would appear without summons if required when he returned from overseas in approximately 14 days.
Subpoenas were issued for hearings to be held on 2nd
November 1983. These required the attendance of Messrs.
Baker, Ray and Beames. Subpoenas were also directed to Mr. Packer and Ian Harper a partner in the firm of Allen Allen &
Hemsley solicitors who had been acting for Mr. Packer.
6.022 On 18th October 1983 Allen Allen & Hemsley
wrote to the Commission confirming they would accept service of the summons which had been issued in respect of Mr.
Packer. They the relevance of a line of questioning
which involved the transactions of Mr. Ray and Mr. Packer. On 26th October 1983 they advised they would seek judicial
review of any decision of mine if "questions (were) put to
him (Mr. Packer) when he appears before the Commission .. that are regarded by those advising him as irrelevant." By
letter dated 27th October 1983 the solicitors were advised that my enquiries were broad ones relating to various
banking transactions and were not to be regarded as making allegations against any particular person.
Volume 1 -127- Chapter 6
The Commission and the Courts
6.023 By 1st November 1983 it appeared that the
letter dated 27th October written at my direction to the
solicitors had not been received by them. On that date they
wrote advising that their client Packer was aggrieved by the decision requiring him to appear and produce documents.
They therefore sought a statement pursuant to Section 13 of the Administration Decisions Judicial Review Act 1977
setting out the findings I had made and the basis on which
the subpoenas had been issued. A similar "application" was received from Mr. Ray's solicitors on the same day.
6.024 On 2nd November 1983 Mr. Hughes QC appeared
for Mr. Packer. An opportunity was
proceedings pursuant to Section 13 of
Decisions Judicial Review Act seeking
sought to issue
the Administrative the reasons and
material facts upon which the subpoenas had been issued. I adjourned sine die to consider the submissions put by
counsel. On 4th December I gave my ruling in relation to
these submissions. I refused to furnish a statement
requested under Section 13. I indicated that if proceedings the matter I would make a were issued in respect of "statement of fact" available in a sealed envelope to the
Federal Court.
6.025 On 7th November seven applications were filed
in the Federal Court of Australia (New South Wales Registry) for orders to review pursuant to the ADJR Act. The
applicants were Packer, Ray, Beames, Baker, Harper,
McWilliam and Jones. The latter three were partners in the firm of Allen Allen & Hemsley. The applicants sought orders for a statement pursuant to Section 13. The proceedings
commenced before Mr. Justice Morling on 8th November 1983. The judgment dismissing the applications was delivered on
16th November 1983. (See Harper -v- Costigan [1983] 50 ALR 665). The applicants thereupon appealed to the Full Court of the Federal Court. A hearing date for the appeal was fixed
Volume 1 -128- Chapter 6
The Commission and the Courts
as a matter of urgency for December but the appeals were
subsequently discontinued by the appellants.
6.026 I cannot leave this pa rticular topic without
referring to the further incident which occurred in December 1983 which was in my view an attempt to bring influence to
bear upon my investigations. I dealt with this matter in a
public session of the Commission on 21st December 1983. The following is portion of the statement I made on that day.
It speaks for itself:-" i·.y attention has been drawn to a question asked of the Queensland Premier and the
answer given, in the Parliament of
Queensland last Thursday and Friday, 15
and 16 December. For the sake of complete
accuracy I have arranged for copies of
each to be procured.
The Question was:
11
(1) Is he (that is the Premier) aware
that allegations have been made by Mr
Frank Costigan in recent Federal Court
proceedings in Sydney that the Comalco
House Branch of the Bank of New South
Wales (now Westpac) was used in 1980 and
1981 by the Painters 1 and Dockers 1 Union
to finance drug transactions in the State? (2) Has he made any enquiries regarding
these allegations and if so, what was the
result of such enquiries? 11 The Answer given by the Premier was:
"I am aware of these allegations and have
made inquiries of the Police Deparment.
Tne Queensland Police have no knowledge of any painter and docker involvement in drug trafficking in this State, nor do the
Queensland Police have any knowledge or information which would suggest that the Comalco House Branch of the then Bank of
New South Wales was used to finance drug
trafficking in this State. The Queensland Police have co-operated extensively with the Costigan Royal Commission. At no
time, however, have these allegations or matters relating to them been raised with
Volume l -129- Chapter 6
Volume 1
The Commission and the Courts
the Queensland Police.
concerned that the serious
concerning our State would be their first being raised
Queensland Police.
I am most
allegations made without with the
I do not wish to add to the public
controversy concerning several public
figures currently in dispute with Mr
Costigan, but I am concerned that
allegations which on their face appear to be without basis would be made by Mr
Costigan, particularly when they are
calculated to cause serious damage to the reputations of such public figures. 11 In the course of the answer the Premier
refers to 11 several public figures 11 ⢠He
does not specify who they may be, but I
assume he speaks of Messrs Packer, Ray and their associates, all of whom are
witnesses currently before this Commission and who may be, at least in some cases,
regarded as 11 public figures 11 ⢠I assume
further that the 11allegations 11 to which
the Premier refers is an understanding, on his part, that my investigations which led to the calling of those witnesses were
directed at exploring the avenues by which major drug importations are being financed.
The history of the matter is of short
compass. Whilst the object of the
investigation was to determine the
financing of the drug transactions, the
staff of the Commission went to some pains to conceal that purpose in the questioning of witnesses. This was achieved by
exploring cash transactions of a
substantial character at the relevant
branches of the Bank of New South Wales,
by seeking explanations for them and then checking those explanations. No
11 allegations 11 were put, for the Commission was investigating, not putting a case.
The situation was reached where certain
large payments of cash were found to have
been made at the request of Mr Ray.
Counsel sought an explanation for those
payments and found that the cash had been
paid to Mr Packer, and that there were two
quite different reasons given for it. Mr
-130- Chapter 6
The Commission and the Courts
Packer's version is now sought. It may
be, or it may not be, that the payments
are related to drug transactions: that
remains to be seen.
In the normal course, the purpose of the
enquiry would not have been publicly
revealed. Mr Ray's counsel made a private enquiry of the purpose from Mr Meagher QC, and was told privately. Then Mr Packer's
solicitors, in writing, sought the same
information. They were referred to Mr
Ray's counsel, but not being satisfied
with that, they demanded an explanation in writing. With reluctance, borne out of a
desire to maintain a low level of
publicity until the explanations had been given and examined, but not out of any
desire to deny knowledge of the nature of
the enquiry to the witnesses, a letter was forwarded to Mr Packer's solicitors
explaining the purpose.
Subsequently, Mr Packer, Mr Ray and a
number of other witnesses took proceedings in the Federal Court, attempting to compel me to explain not only the purpose of the
enquiry, but also to reveal all of the
information on which it was based. I was
not prepared to do that, for reasons I
have already given, and the Federal Court refused to intervene . In the course of
those proceedings, the Commission's letter to Mr Packer 1 s solicitors was exhibited.
It was unnecessary for it to be publicised in those proceedings, it being available for the Judge and all parties to read.
Indeed, throughout those proceedings,
although the letter was averted to
frequently, its contents were not read
until Mr Ray's counsel addressed the
Court. Even in his case, it was not read
until the second day. By tha t t i me all
present in the Court well k new its
contents. Notwithstanding that, Mr Ray 1 s counsel insisted on reading it aloud so
that it may then be publicised, as it
was. I had no part of this, and, indeed,
had indicated my desire that it not be
made public ⢠The Premier is in error in
suggesting that I have made public
allegations in the Federal Court.
Further, he is in error in suggesting I
have made "allegations", whether public or otherwise. The letter indicates the
Volume 1 -131- Cnapter 6
6.027
The Commission and the Courts
purpose of the investigations. So far as
Messrs Packer, Ray and the other witnesses in that group are concerned, it makes no
allegations and I make none: I merely
seek explanations .... The Premier has not
written or spoken to me about these
matters. If his concern is not abated by
my remarks today, and he seeks further
information, then I would be happy to
explain to him, confidentially, for fear
of prejudicing my investigation, the basis of my enquiries. These are not matters
for public debate, nor are they matters
where I expect to be subjected to
uninformed comment in Parliament by the
holder of the highest political office in that state." (Transcript, p. 17672a-17675)
By the time the Federal Court proceedings had
concluded the Christmas period had arrived. I was unable to plan any further hearings in relation to this matter until
the new year.
Report I was
For reasons which appear elsewhere in this unable to call Mr. Packer for further
examination prior to the conclusions of my operational phase at the end of June 1984. The proceedings taken on behalf of
Mr. Packer and his associates had the effect of delaying the possibility of further hearings for some months.
6.028 On 28 September 1984, Mr. Packer issued a
press statement. In it,
said to be circulating
involvement in criminal
he canvassed various matters then publicly regarding his alleged activities. The contents of that
statement are discussed earlier in this volume.
course of it, he made the following statements:
"The allegations published about me in a
recent edition of the National Times are,
without exception, completely false. Their publication has been but another step in a
malicious and disgusting campaign of
vilification by my commercial rivals. In
In the
Volume 1 -132- Chapter 6
The Commission and the Courts
developing these allegations the Royal
Commission into the Ship Painters and
Dockers Union has conducted itself grossly unjustly and improperly ... . . . These innuendos and allegations
emanating from the inquiries of the Royal
Commission have caused immense suffering on the part of my wife and children for nearly
a year. They have been fuelled by what I
believe has been malicious rumour and
innuendo in newspapers controlled by
commercial rivals of mine, John Fairfax and Sons Limited â¢â¢ o
.â¢. Far from there being any particular
closeness between my company and the
solicitor (who also had a substantial
shareholding in the listed company) there were serious disagreements about the
conduct of the company 1 s business 0 There
was a well publicised takeover bid in which Consolidated Press and the solicitor's
interest were on opposing sides. Whatever the Royal Commission 1 s relations with the National Times may be, it is clear that its
staff does not read its sister publication, the Financial Review."
The clear implication of these allegations is that I was
involved, in some clandestine way, with business rivals of Mr. Packer in a scheme to discredit him. I reject the
suggestion as absurd. I instance the suggestion as another attempt, on the face of it, to influence the manner in which
I conduct my Commission; in particular, to influence the
contents of my Final Report and recommendations.
The Result
6.029 Thus, the defences of the major actions have
been completely successful. Those who represented me are to be congratulated on the manner in which they conducted the proceedings. There has been in each case a vindication of
my stance, and an endorsement of my interpretation of the
terms of reference. But a price has been paid. Inevitably
Volume l -133- Chapter 6
The Commission and the Courts
there have long delays in matters being finally
resolved (in each of the three major matters appeals were
issued). Ultimately, it was good tactics for the various
litigants to test my rulings. In one case I was unable to
recall the principal witness as by the time he had exhausted the appeal process he had been charged with offences arising out of the matters I was investigating.
Volume 1 -134- Chapter 6
CHAPTER 7 - PREVIOUS RECOMMENDATIONS
7.001
"Say not the struggle nought a va i leth, The labour and the wounds are vain, The enemy faints not, nor faileth, And as things have been, they
⢠II
rema 1n.
A.H. Clough, Say not the Struggle Nought Availeth
In the course of earlier reports I made a
number of formal recommendations fo r legislative, executive and other action. In this Report I have made a number of
further recommendations, which are collected for ease of
reference in Chapter 9 of this volume. As some of these n ew
matters are extensions of previous proposals, it is us efu l
to set out in this chapter those early recommendations,
together with, where appropriate, some note of the known
response thereto. For the sake of clarity I have set out
the recommendations in bold type and underlined.
7.002 My first two interim re por ts delivered in
March and June of 1981 made no specific recommendati o n s
requiring legislative action . The reports did con tain
information relating to the state of my investigations a n d , together with discussions which took place with ministerial and departmental officers, presumably provided the ba sis for the extension of my term from the original 30 September 1981
until 31 December 1982 ; of course, that date was
subsequently extended until 31 October 1984. Add it ionally, from time to time informal recommendations have been ma d e which need not be the subject of discussion here. They wer e on day-to-day matters relating to administrative a nd
operational control. Naturally some of them were of g reat importance, particularly those dealing with the a cquisiti on and development of the computer facilities.
Volume l -135- Chapter 7
Previous Recommendations
INTERIM REPORT NO. 3
7.U03 By December 1981 I had commenced
investigations into the "bottom of the harbour" area. I wa s frustrate d i n my a tte mp t t o obtain i nformation from the
Taxation Office because of the provis i ons of s e ction 16 o f
the Income Tax Assessment Act. I detailed the stage which
my investigation had then reached in submitting Iterim
Report no. 3 in which I made the following recommendations:-
This was problem.
"That Section 16 of the Income Tax
Assessment Act be amended as follows:
That sub-section ( l ) be amended bl
inserting after the word "State":
tne words 'not oeing a Eerson
aEEointea to tne Rol':ai
Commissions ct.'
(b) That Section 16 (4) of the Income
Tax Assessment Act be amended bl
to it an additiona
a
I
suo-c ause {j) as foiiows:
(j) any Eerson to whom a Commission
has been issued by the
Governor-General Eursuant to the Royal Commissions Act where the terms of Reference in
sEecific terms to tnis Act . " (Interim Report No.J, p. 17)
limited amendment to deal with the particular noted that a consequent amendment would be
required to the
adding the words:-terms of my Commonwealth Commission b y
Volume l
"or has engaged in illegal activities in
relation to the Income Tax Assessment
ct.
(ibid)
-136- Chapter 7
Previous Recommendations
7.004 The Government of the day met the substance of
my recommendations. The terms of my Commission were
enlarged as from 1 April 1982. The definition of "illegal
activities" contained in the amended terms was considerably wide r than it had been. Clearly included within the
definition was involvement in tax frauds and the like.
7.005 I had recommended that all Royal Commissions
get access to tax documents. The actual amendment to the
Income Tax Assessment Act, which was to operate from 2 June 19H2, and to
Royal
restricted access to tax
the Stewart Commission. Commissions would get
documents to my Commission It envisaged that further the same access if a
"declaration" was made under the appropriate sub-section. The amended section use" that could be
severely restricted "the made of the information
communication obtained. It
could not, for example, be pas sed on to any person outs ide
the Commission save in limited circumstances. Despite these restrictions it was nonetheless a valuable response to my recommendation and greatly investigation which was to
successful conclusion of some subject of my next report.
INTERIM REPORT NO. 4
assisted in the continuing
lead, in due course, to the
of the matters which were the
7.006 In Interim Report No. 4, which was submitted
in July 1982, I referred to the use to which I had been able
to put the amendments made to section 16 as a result of my
previous recommendations. I also pointed out in Chapter 2 of Volume 1 of that report the limitations which I saw t o
the effective use of the new power. I set these out in some
detail to indicate the basis for the further recommendations which I regarded as desirable. The recommendations were in the following terms:-
Volume 1 -137- Chapter 7
Volume l
Previous Recommendations
l. That Section 16 be amended so as to
allow the Australian Taxation Office to brief the Treasurer and the
Attorney-General fully, and in such detail as may taxpayers,
and by them to
the Taxation Office. This mat be
readily achieved by the relea of
sub-section SA of Section 6, and
the addition of each Minister to the of authorised of
1n â¢
2. 16 be amended to
3. That all law enforcement agencies be
allowed access to information in
possession of the Australian
Taxation Office for the purposes of criminal investigation.
4.
This may be effected by the addition of Chief Commissioners of Police of each police force and the
Commissioners of Corporate Affairs in each State to list of authorised
recieients in sub-section 4 of
16.
That a taxpayer be entitled to
access to information he has
conveyed
to the Australian Taxation
This may be effected by the addition of taxpayers to the list of
authorised recipients in sub-section 4 of 16.
5. That information supplied by a
taxeayer to the Australian Taxation Off1ce be available on subroena
issued by ant Court in Austral1a on
it being re evant to any civil or
criminal proceeding before the
Court.
-138- Chapter 7
Previous Recommendations
This would require the repeal of
sub-section 3 of Section 16, and the addition of Courts of law to the
list of authorised recipients in
sub-section 4 of Section 16.
(Interim. Report No. 4, Vol l, p. 6 - 8)
As I understand the position, the basic thrust of these
recommendations has not been accepted by Government or, for that matter, the Taxation Office. As I said in my earlier
report it was no secret that the Taxation Office rejected my recommendations and resisted them. It was clear that the
subsequent and wider proposals received the same response. Nonetheless I commend them to Government
consideration.
for further
7.007 The same report had dealt with my findings in
respect of tax fraud. For reasons which I discussed in that
report I recommended that there be a task force with the
responsibility of enforcing the laws relating to the
perpetration of the tax frauds. I recommended that this
force have the responsibility of issuing civil where appropriate in respect of tax frauds.
recommendation was in the following terms : -
proceedings The precise
Volume l
{b) It is my recommendation that a Task
Force be formed consisting of
counsel, solicitors, investigators and administrative staff to act on
behalf of the Commonwealth and the
several States in the criminal and
civil actions available to punish
those who have perpetrated the
fraud, and to recover the revenue
ost. (Interim Report No. 4, Vol l, p. 8)
-139- Chapter 7
Previous Recommendations
The response by Government p as s legislation creating
Prosecutors and thereafter to
to this recommendation was to
the Office of the Special
appoint Mr R.V. Gyles Q.C. as
a Prosecutor
and prosecuting the
collecting the taxes. with STRATEGIES
with the responsibility for targetting perpetrators of the tax fraud and
Also in my Interim Report I dealt
Volume 2) for the fight against (see I organised crime. recommended although this was n o t
formulated in precise terms - that there be a "Commission"
with the responsibility throughout Australia for such a
fight. I recommended that body have a "prosecuting arm"
although preferrably slightly distanced therefrom. The Special Prosecutor legislation also was a response, as I
understand it, to that recommendation. The appointment of Mr Robert Redlich of the Victorian Bar as Special Prosecutor to prosecute matters arising from my investigations other than bottom of the harbour matters was consistent with that understanding. It is probably appropriate to say here that
the legislation introduced by the Federal Government in 1982 for a National Crimes Commission was also in response to the matters set
STRA:'EGIES. out in my reports and,
Although the legislation in particular, the
for the National
Crimes Commission was not entirely consistent with my
suggestions, nevertheless it was a positive response. The subsequent history of that legislation and the replacement of the Commission by the National Crime Authority have been examined in other reports and documents. those matters here.
7.008 In Interim Report No . 4
I will not repeat
I also made a
recommendation that a Royal Commissioner have power to issue a search warrant. The recommendation was as follows:-
Volume 1 -140- Chapter 7
Previous Recommendations
(c) It is my recommendation that a Royal
Commissioner should have the power to 1ssue a search warrant where he
bel1eves on reasonable grounds that a person has documents relevant to
the terms of reference of the
Comm1ss1on and there 1s a reasonable l1kel1hood of the destruction of the documents. There are cases where
the mt:;re service of a subpoena to
produce documents will, if the
person has something to conceal
result in the destruction and
non-production of the documents.
The subpoena in fact acts as a
warn1ng to such a person of the Comm1ssion's interest. I would
expect that such a power would be
exercised onlB on rare occasions,
but 1t should e there.
(Interim Report No. 4, Vol l, p. 8-9)
By the Royal Commissions Amendment Act 1982, which was
proclaimed to come into operation on l February 1983, the
Royal Commissions Act was amended to provide, pursuant to section 4 thereof, for search warrants. Hy recommendation had been that the Royal Commissioner be entitled to issue
the warrant. The response of Government was to make
available a process whereby the Commissioner could apply to a Judge of a prescribed court for the issue of such a
warrant on establishing appropriate grounds. procedure meant there would inevitably be obtaining a warrant, nevertheless it was
Although this some del ay in
regarded as a
favourable response to the recommendation. I have applied, through Counsel, on six occasions since the introduction of the legislation for the issue of warrants. In each c ase,
the application was granted and a total of eight warrants
issued. It has proved a valuable adjunct to the power o f a
Royal Commissioner.
Volume l -141- Chapter 7
Previous Recommendations
7 In the same report I made recommendations
relating to compulsion of witnesses . were in t he fo l l owing terms.
The recommendations
Compulsion of Witnesses
The Royal Commissions Act has quite
inadequate powers and penalties to enforce the attendance of witnesses and the
Victorian
Evidence Act in contrast provides
efficient and speedy methods. It; is my strong recommendation that the
Royal Commissions Act be amended to
provide procedures and remedies similar to those in the Evidence Act. Recourse to
the Federal Court would be appropriate. (Interim Report No. 4, Vol 1, p. 9)
The Royal Commissions Amendment Act 1982 amended the
dealing with the appearance of witnesses both to
g ive evidence and to produce documents. It included
a ppropriate penalties for failure to comply with the
subpoenaes.
INTERIM REPORT NO. 5
7.010 My Fifth Interim report was submitted to
Government in July 1983. It was the result of a lengthy
investigation into various volumes. detailed
officers. Volume analysis
the c ompany Hamidan The Report consisted Pty. of
Ltd. three
two parts, contained a
and its
separate full and 3 , in of the activities of the company,
the justification for recommendations,
It consisted of
and 450
being the
pages. recommendations themselves. Volume 2 of the Report was a shorter version, being a
summary of the same matters with the name of the company and
of the principal officers involved disg uised. The purpose of _his 11 sanitized11 version was to enable it to be
published. My own view was that Volume 3 could have been
Volume 1 · -142- Chapter 7
Previous Recommendations
published but I was conscious that differing views were held as t o the effect that publication might have on the
subsequent trial of the various offenders who were named. Volume l of the Report also contained a copy of the
recommendations, but stated baldly without any attempted j ustification of them.
7 . Ull The recommendations relating to the Hamidan
matter consisted of some 13 pages. I have had a little
response from Government Departments in respect of some of them. As at June of this year I was unsure as to t he
precise state of the recommendations and the progress of t he Government's reponse. I was concerned to include in my
final report a summary of my previous recommendations ,
setting out the action taken by Government to date. I had
not heard formally from Government in relation to these
matters although a statement had been made by the
Commonwealth Attorney-General in relation to them. He said:-
7.012
"The Government is examining the
recommendations that are summarised in volume l. Relevant Commonwealth
Departments, in consultation with the
states and the Northern Territory where necessary, will complete their studies of the report and make recommendations as to action on it within three months. If the
Government decides that legislative
action will be necessary, it will provide information· as to the reasons drawing on relevant information that has been
provided by the Royal Commission."
(Commonwealth Parliamentary Debates, Senate, 12th October 1983, 1470)
As I had not heard in respect of a number o f
those matters contained in Interim Report No. 5, I caused a
letter to be written by the Secretary of the Commission t o
the Secretary of the Department of Prime
Cabinet. This letter was dated l June 1984
parts omitted, read as follows.
Volume 1 -143-
Minister and and, formal
Chapter 7
7.013
Previous Recommendations
"The Royal Commissioner, Mr. Frank Costigan, will shor tly be compiling his
final report. Over the three and a half years of
the Commission 1 s life there has been a
number of interim reports containing
r e c ommendations to Government on various matt e r s that have arisen from the
Commission's investigations.
For the purpose of the final report,
it would be of great assistance to have
details of action taken by the Government in to the recommendations
containe in the earlier reports.
I would be grateful if you could
meet this refuest. An early response
would be greaty appreciat ed."
A reply was rece ived to that letter on 2 July
1984 from the first assis t ant secretary, Justice Division . This letter read as follows:-
Volume 1
"Your memorandum of l June 1984 sought
details of action taken by the Government to the recommendations 1.n containe in
Commission on the Activities of Federated the reports of the Royal
Ship Painters and Dockers Union.
In broad terms, those reports revealed
considerable deficiencies in the
machinery of government and the
administration of legislation, althoufth many of these matters were not t e
subject of specific recommendations by the Commission. Both this Government and its predecessor took well-publicised
action to deal with the major
administrative and letal problems
identified by the Commiss on, including the amendment of leg1.slation, the
a ointment of S ecial Prosecutors and
t e es ta s o y to
deal with complex,
organised crime.
-144- Chapter 7
Previous Recommendations
In addition, the Commission made a number of more specific recommendations. The
examination of these has
involved between
Ministers and departments, some of is and
Cabinet Any
provided to the Commission about these
matters should properly
endorsement and approval from who ultimately have the responsibility for action taken by the Government in
response to the Commission's findings.
For this reason, should it be wished to
obtain details of the action taken on the more specific recommendations made by the Commission, it would be for the
request to be addressed to the Prime
Minister by the Royal Commissioner. In
that event, of the
and
recommendations in respect of which
information is sought and a more specific indication of the proposed use of the
information would assist consideration of the request."
There was no further correspondence in respect of this
matter. Set out below are the recommendations in respect of the Fifth Interim Report with, where appropriate, my
c omments.
Recommendations From Interim Report No. 5
7.014
Volume 1
4.02 heading .
Prosecutions
-145- Chapter 7
Volume l
Previous Recommendations
Squad, the National Companies &
Securities Commission, the Special
Prosecutor and Corporate Affairs Offices throughout Australia. A larpe number of Reserve Bank offences, Taxat1on offences, Bankruptcy offences , Corporate Affairs breaches and criminal offences have been
identified. In most cases, I am informed
by the responsible agencies, charges will be preferred. It is likely that at least
15 men will face criminal charges. The
actual charges laid will depend, in the
exercise of a proper prosecutorial
discretion in each case\ on a proper use
of the resources avai able to prepare
briefs and to have matters
liste in an orderly fashion in the
different jurisdictions. 4.03 I need make no specific
recommendations as to prosecutions to be laid as, if I may so with respect,
these matters areeing catered for
in the course of liaison with
the Spec1al Prosecutor and the other
bodies. Indeed, one of the very
satisfying aspects of my Commission has been the close association which has
develo ed with law enforcement
of t e Comissions Act. I have
communicate information in my possession relating to an offence, or possible
offenced to aG,propriate authorities on an almost a1ly as1s.
4.04
T e conspiracy y
the Queens land
is a duplication of effort
time in overlapping areas. competition for access to the
documentary ev1dence held by th1s
Commission. In proposals for the
establishiiient of a ommonwealth Director of Cr1m1nal Prosecutions, I recommend
special attention be given to the role of
-146- Chapter 7
Previous Recommendations
coordination with State agencies. In
should be given
involved. This will, no doubt, depend
upon the level of cooperation that can be negotiated with the States, probably on a case-to-case basis. However, I believe
it will be an important function of the
Director to obtain, with appropriate
assistance, a proper degree of
cooperation.
Prosecutions are proceeding in Queens land where, following committal proceedings, four men will face trial. I
understand that proceedings are on foot in Western Australia in respect of various men identified as participating
generally in this scheme. These proceedings have been
subject to various interlocutory matters which have delayed the conclusion of committals. I understand that these
prosecutions are being conducted by the Office of the
Director of Public Prosecutions which has taken them over from Special Prosecutor Redlich. The only other matter I
would draw attention to under this heading is to the civil
recovery aspect of the . work of the Director of Public
Prosecutions. I
recommendations in Director should have recovery of civil
believe, consistently with
the Fourth Interim report, that
the capacity to take proceedings debts due to the Commonwealth.
my
the for The
structure of the Act as at present operating is such as to
severely limit his · right to take such action. It is
presently dependant upon the institution of a prosecution and the publishing of an appropriate instrument by the
Attorney-General dealing with the particular matter or a class of matters. This is clearly unsatisfactory. There
will be many cases, as there already have been, where the
Director needs to take civil action prior to being in a
position to initiate his criminal prosecution. The Act
should be amended to take account of this need. The work
done by Special Prosecutors Redlich and Gyles
demonstrates the justification for it. amply
Volume 1 -147- Chapter 7
7.015
Volume 1
Previous Recommendations
Exchange Controls
4. OS Under this heading I recommend
as follows:-(1.) A notice be issued by the Treasurer
to Section 39B (2) of the
ankinf Act adding Sinfapore to the schedu e of countries n respect of
which taxation clearances are
required.
Regulations be made under the
Banking (Forei\n Exchange)
Regulations prescri ing a form in
respect of applications to the
Reserve Bank for attroval of
agreements with non-resents. The form should make provision for the
information required
the Bank. T at information shoul
be verified in writing by the
applicant and, in the case of a
company, by an officer personal ly
responsible for its truth. The form
should contain a warning that
provision of incorrect information to the Bank is punishable by severe
penalty. The Regulations should
provide that no overseas agreement will be unless a written
document em the terms of that
agreement execute by the is
submitted, prior to any liabilities being incurred by the parties . This
agreement, of course, should be
stated to be subject to the Reserve
Bank approval.
(3.) The a licant should state in his
form whether he and or the company
borrowing the money is related in
any way to the offshore He
should state w ether
shares in the offs ore are
in an[ way beneficially hel on his
behal in a trust or nominee
situat1on.
-148- Chapter 7
Previous Recommendations
(4.)The· Reserve Bank should record in a central registry system the names of all overseas lenders, as well as the
Australian borrowers. When an
a*plication is lodged,
c ecks of previous applications respect of the same parties should
be made to similar
(5.) To facilitate the setting up of a
central registry, the Reserve Bank should install a computer system.
There should be access to the
central registry through the
computer from each of the branches
of the bank throughout Australia. All applications made to the Reserve Bank which are regarded as suspect
should be immediately referred to
the Office and, if
appropriate, to the Federal Police for further investigation. I recommend a minimum holding period from lodgement of an application
until approval for 7 days; no
application should beod ed between th and th June in any year.
These requirements were significantly affected by the
Government's abolition of restrictions on money flows out of the country.
7.016
Volume 1
Tax Controls
4.06 I recommend as follows:-
(1.) Where a scheme is being promoted
which is claimed to have, as any
part of its attraction, tax
advantages for the investor or
contributor then the following
provisions should apply:-
-149- Chapter 7
Volume 1
Previous Recommendations
(a) The promoter shall obtain from
the National Companies &
Securities Commission a
certificate which certifies
that the method of marketing
the scheme, in the form
submitted to the Commission
satisfies the requirements of the Companies Act and the
Securities Industries Act in
all States in of which
promotion is to ta e place.
(b) The promoter shall obtain from
the Commissioner of Taxation a certificate stating that -I Notice of the scheme has
been given to the Taxation
II Such notice was given on
or before the 31st day of
May in the financial year
in respect of which any
deduction is to be claimed. III Copy of the NCSC
certificate {together with all of the material relied
upon to obtain the same)
has been provided to the
Taxation Office. IV That it is likely that a
deduction will be granted in respect of the proposed scheme if it is
implemented strictly in
accordance with the
proposals put forward.
imited offer or otherwise and provide to every such person: I Copies of the material
submitted to NCSC and the
of Taxation.
II Copies of the certificates
obtained from those
bodies.
-150- Chapter 7
Volume 1
Previous Recommendations
ill The claim for the deduction by the taxpayer shall not be allowed unless. I The abovementioned requirements have been met. II The taxpayer states in his claim for the deduction that, 1n respect of his own participation, the proposals for the scheme and the promotion of it have been carried out by the promoter. The promoter, or any person with whom he is associated in the promotion of the scheme, shall not accept any funds from the investor unless copies of the materials set out in sub-paragraah (c) hereof have been provi ed to the investor prior to such receipt. Breaches of these provisions shall render:-I II III Any agreement entered into in ressect of a scheme null an void. The *romoters liable to refun in full any monies paid pursuant to such an agreement, together with interest at a rate of 5'%. greater than the bank rate arevailinf at the date of eposit o the monies. The promoter liable to heavy financial penalties and moderately severe gaol sentences. -151- Chapter 7
Previous Recommendations
(4.) Consideration should be given to the licensing of promoters of tax
schemes. Any such licensing should only be held b r1vate individuals
w o are Aust:ra ian nationals and or
residents. The class of people
eligible should be restricted to
persons with appropriate
qualifications and oi: good
reputation. (5.) Section 16 of the Income Tax
Assessment Act should be further
amended to allow notice to be given
by the Taxation Commissioner to an! appropr1ate law enforcement body o ant activities sustected to be
il egal of which theommissioner or his officers become aware during the course of his normal duties.
There has been no consultation between my Commission and the Taxation Office or any other Government Department in
respect of those recommendations. I am not aware of any
step taken to implement any of them. I have had some
contact with the National Companies and Securities
Commission in respect of my recommendations generally. Its officers understood sub-paragraph 3 to require the NCSC to become an arm of the Taxation Office. This was not in my
contemplation as I explained to senior officers of the
NCSC. I was pleased to read in the media in early September
1984 the decision of the Ministerial Council to include
details of tax correspondence or rulings in any prospectus issued by a company where tax benefits were claimed. I was
disappointed to find, when conducting those discussions, that the office of the NCSC had not had made available to it
a full edition of Interim Report No. 5. It meant that it
had considered my reports completely in isolation to the
Volume 1 -152- Chapter 7
Previous Recommendations
case history which had justified the recommendations in the first place . I might say that this situation was not
limited to the NCSC. In no case did it appear that any body
that was required to consider my recommendations had had
made available to it the full text of the report on which
they were based. This totally ignored the final
recommendation in that report (see below).
7.017
Volume 1
Corporation Controls
4.07 I recommend:-
(1.) ___
Affairs records on a national basis
(a) m TCJ (d)
should be implemented as a matter of uryency. The system adopted should al owfor access to the following
information:-Name of company officers. Address of comeany officers. Address of offices.
Listing of al companies with which a person is associated in any way.
Notice should be given to the
Corporate Affairs Commission by all company officers of all offices held by them in all companies, and all
companies in which they are
beneficially entitled to some or all of the issued shares. The names of shareholders of
comtanies should at all times be
adv sed to the Corporate Affairs
Office. This list should be
maintained up-to-date. Any change of shareholding should be notified within 14 days. Any later attempt
to notify a chanae of shareholding
should be reJected save on
to the court. The
register should show whether the
shares are held on a beneficial or
nominee basis. In the event that
they are held on a basis
-153- Chapter 7
(a)
(b)
Volume 1
Previous Recommendations
then the name of beneficial
shareholder should also be advised to the Corporate Affairs Office. I£ not so advised then that
shareholdin9 should not be
recognised 1n law for any purpose.
Each officer of a company be
required by law to provide a written statement contain1nf the information set out below. Th s form should be
signed personally and witnessed. It should be witnessed by the rerson
responsible for o the
document at the o flee of the
Corporate Affairs Commission. That person should also be identified in any document lodged. If the
document is lodged personallt by an officer then it should be w tnessed
bt an officer of the Corporate
Commission at the time of
lodgement. The statement should
contain, inter alia, the following
details:-The full name
that Eerson.
currently being used
The name under which the person was 'born.
The date and Elace of birth.
Any other name used between the date of birth and the date of the
statement.
Whether the person is or has been a
taxEayer and, if aEErotriate-(1) The name under w lch he lodged
--- his last return.
{II) The Elace of
\III) The taxation num er allocated --- to hilri.
His current address and any address used bt him as his ErinciEal Elace
of bus ness or residence during the
Erevious 5 years.
-154- Chapter 7
Previous Recommendations
In this area I did h a ve useful discussions with the
Commissioner of Corporate Affairs in Victoria and the
Attorney-General for the State of Victoria and officers of Corporate Affairs. 1 also discussed the matters with
officers of the NCSC. I understand that some of the
recommendations I have made are to be incorporated into a
new computerised system to be established. According to
media ceports in early September 1984 , the "disclosure"
provisions recommended by me in paragraph 3 above have been accepted by the Ministerial Council. Nevertheless, I have been gratified at the response by the State authorities. I
have had no contact with offices of Corporate Affairs of
other States. Presumably the Commonwealth Government has brought these matters to the attention of other States.
7.018
Volume 1
Banking Controls
4.08 I recommend:-(1.) Each person applying to open a bank
account be required by law to
provide a written statement
the information set out
below. his form should be
personally and wi tnessed by theank officer opening the account. The
statement should contain, inter
alia, the following details:-The full name currently being
used by that person.
The name under which the person was born.
The date and place of birth.
Any other name used between the date of birth and the date of
the statement. (e) Whether the person
been a taxpayer
-155-
is or has
and, if
Chapter 7
Volume 1
Previous Recommendations
(I) The name under which he
lodged his last return. (II) The place of
TII!)The taxation num er allocated to him.
(2.) The legislation should provide
aplropriate penalties for making a fa se statement. Banks tend to
require proof of incorporation of
companies before opening accounts. The law should demand they obtain
such lroof. The statement of
persona particulars should be
supplied by all pro}:osed for the account. I a ban er fails
to obtain the a ro riate statements
ou d e su Ject to severe
prov1.s1.on should also apply to the
use of accounts in business names or 1.n the names of trusts.
(3 In conjunction with
legislation dealing financial institutions - as atpropriate
Governmen s.
(2), similar
with all
be negotiated · with State
Every applicant to a bank or other
financial institution seeking the remission of funds overseas should be identified on a record to be kelt
of that transaction. This shou a
then be forwarded to the Reserve
Bank to be included on a
computerised record of all overseas transact1.ons.
Banking records, including all
vouchers, should be retained by the banks for a minimum period of seven
years. In the event originals of
such documents are released to a
customer, then colies of any such
documents includ ng endorsements
appear1.ng thereon should be made and likewise retained.
-156- Chapter 7
Previous Recommendations
I have received no response from Government to these
proposals. I am aware that similar proposals have been made by Mr Justice Stewart and by Special Prosecutor Robert
Redlich when reporting to Government. I am also aware, from media reports, that the banks are opposed to the
provisions. They are par ticularly opposed to being given
any role whereby they are to "police'' the activities of
their customers. There is much evidence which supports the recommendations I have made both in Interim Report No. 5 and in other reports submitted by me and, in particular, this
Report. In fact, I have repeated the recommendations as to
banking controls in Volume 4 of this Report. I have
mentioned other instances of facilitating fraud through
banks. I believe that these controls should be implemented.
7.019
Mining Permits
4.09 I recommend:-
(l.)Commonwealth and State petroleum exploration legislation be amended to provide that no agreement between
affectinf an interest in a
permit (includ an>; personal
convenant thereun er) 1S of ana
affect until an
registration of t at agreement
pursuant to the legislation. The
right of a prospective party to claim dama es· a a1nst the existin er:nitee
- w ere t at part¥ s e au t as e
to the non-reg1stration of the
interest - should be preserved. (2.) It be compulsory for an existing
permitee to advise the Minister of
any agreement entered into which will affect the interests in the l?ermit.
Failure to so advise the M1nister
within an appropriate time ¥eriod
should result in the loss o the
permit by the permitee.
Volume 1 -157- · Chapter 7
Previous Recommendations
(3.) Consideration be given to a proposal
that where it is intended to attract
investment from the public in a
perm1.t area any agreement in respect of the same which is intended to be
the basis of such investment should
be registered with the Mines
Department
person shall offer for sale or
asslfnment any interest or
sub- nterest in a permit unless an
between the permitee and
t e proposed vendor or rromoter of
the sale had been odged and
with the Mines Derartment
an a certificate of the Min1.ster as
to such registration is produced to
any such interested purchaser or
contributor prior to any such sale or ass1.gnment.
(5.)This Report be brought to the attention of the appropriate
Commonwealth and Western Australian State Ministers responsible for
petroleum and oil exploration.
I have had no reponse from Government in respect of these
recommendations.
7.020
Volume 1
Overseas Arrangements
4.10 I recommend:-Consideration should be given to treating 11 loans 11 made in the tax haven countries to
Australian residents as direct income unless a certificate
under Section 14C of the Tax
Administration Act has issued in respect of that transaction.
-158- Chapter 7
Previous Recommendations
(2.) Section 14D of the Tax Administration Act should be amended to include as a
ground on which the issue of a
cert1ficate should be refused, the
likelihood that creditors of" the
applicant in Australia will be
preJudiced by the issue of the
cert1ficate. (3.) Consultations take place with
Volume 1
foreitn with a view to
facil tat ng the admissibility of
evidence in Australia of banking and other financial transactions
offshore. Within Australia, there
should be provision for the
admissab1lity in civil and criminal sroceedings of such financial
ocumentary evidence from overseas provided the same bears a bankers
cert1f1cate as to its authenticitl
and a certificate from the loca
Australian representative in the
question as to the
pro uct1on o t e ocuments to 1t or
safe carriage.
(S . )The Australian Government should negotiate with as many countries as possible, particularly those in the Pacif1c r e 1on, the access to bankin
recor s 1n t ose countr es.
-159- ·chapter 7
Previous Recommendations
I regarded these recommendations as particularly important. I have had no discussions from Government as to them. I am
aware that officers attached to the Special Prosecutor
Redlich travelled to Singapore and Hong Kong to obtain
evidence in respect of the criminal activities referred to in Interim Report No. 5. They were able to obtain
documents, and other evidence, in their visit to Hong Kong. They were not so able in Singapore. Urgent arrangements
must be made with these and other countries to facilitate
the acceptibility of foreign banking records as evidence before the Australian courts. The United States Courts have apparently taken the view that the national interest in
investigating crime justifies overriding secrecy laws of other countries in some circumstances:-
Volume 1
"As Investigations of white-collar crime lead increasingly to banks and companies abroad, US courts are concluding the need for information over-rides other
countries' secrecy laws. A subpoena, US judges ruled recently, is
sometimes enough to force release of
sensitive bank and corporate documents offshore, if the subpoena is served on US soil. In the past, US prosecutors could obtain such records only through diplomatic
procedures, in part because judges have been reluctant to override the laws of
foreign lands by enforcing subpoenaes. US Authorities say the trend gives them
new and effective tools for cracking
cases involving drugs, money laundering and tax evasion, but many investors and
corporations which operate offshore fear it may lead to investigations into
offshore records. It also threatens countries which
become business havens because of secrecy laws ...
have their
In addition to the courts,
Government is moving to
offshore bank secrecy."
the US
penetrate
(Financial Review, 27th July 1984)
-160- Chapter 7
Previous Recommendations
I commend these views to Government. The current difficulty
in presenting admissible evidence to the Western Australian courts in prosecutions being conducted by the D.P . P. provide ample demonstration of the need for international liaison in this area.
7.021 In this
a Memorandum and
area , reference can usefully be made to paper prepared by the Commonwealth
Secretariat for Ministers at its documents were
presentation to the Commonwealth Law
meeting in Sri Lanka in February 1983. The
entitled Mutual Assistance in Criminal
Matters: A Commonwealth Pers pective. In discussing the
possible options for the development of mutual assistance in criminal matters within the Commonwealth part i cular
attention was give in the papers to the special problems
involved in the investigation and prosecution of commercial crime. This approach has been adopte d because of the
complex issues which can often arise i n this area and the
fact that commercial crime increasingly has an international dimension. Greater efforts should be made t o obtain better international cooperation in this field . I urge that the
level of Australian participation in and support of this
part of the programme of the Commonwealth Secretariat be
enhanced.
7.022
Volume 1
Conclusions
4.11 I recommend that this Report
have a wide referral within Government
and, in particular, that it be referred
to law enforcement agencies - both State and Federal throughout Australia for
1nformation purposes.
- 161- Chapter 7
Previous Recommendations
None of the representatives of Government agencies with whom
I have spoken had had access to volumes 2 or 3 of my
Report. I presume the basis on which Government did not
publish those volumes was that such publication may have
affected the subsequent prosecution of the offenders
referred to therein. That should not have effected the
proposed distribution there should be a
I suggested. It
wide distribution was of
my view that
the reports
throughout Australia, not just to Government departments, but to the community generally. It was for the Government
to decide whether that was appropriate. I recommend it be
done.
Volume 1 -162- Chapter 7
CHAPTER 8 - REFERENCES, PROSECUTIONS & RESULTS
11 We are better able to
neighbours than ourselves, actions than our own. 11
study our
and their
Aristotle, Nicomachean Ethics
8.001 There has been criticism of Royal Commissions
that prosecutions and convictions
investigations. Thus Commissions are have not
administered followed to act
only on 11
admissible11 evidence; that is, evidence admissible in a court of law on the trial of a particular offender.
This misinterprets the nature of the investigative role of the Commission. The very fact that it obtains evidence from offenders, by way of oral testimony or documents extracted by coercive powers, demonstrates - given the anathema with which any attempt to erode the concept of "no
self-incrimination" is regarded the futility of this
stance. Evidence taken from offenders The Royal Commission Act makes this
is not admissible. clear; so does the
Vic tor ian Evidence Act; "evidence" is obtained so
of
does the High Court. Whatever
criminal activity must still
remain the subject of critical prosecutorial examination to ensure it is sufficient to justify putting a person on
trial. As a matter of principle, I have adopted the
practice of referring matters to other bodies for the final investigative process leading to the arrest, charge and
prosecution.
Volume 1 -163- . Chapter 8
References
8.002 I have referred to my recommendations for a
" task force" to prosecute the perpetrators of the "bottom of
the harbour" schemes and for "a prosecuting arm" to assist
(Crime) Commissions. As a response to those
recommendations, the Special Prosecutors Act was enacted and Messrs Gyles and Redlich were appointed to prosecute tax and other matters identified by my Commission's work. Mr
Redlich was later given the additional responsibility of prosecuting matters referred by the Stewart Commission. I will later refer to some matters prosecuted by the offices of the Special Prosecutors on my referral.
8.003 Another initiative emerged f rom my work. From
the time my investigations commenced I received information of many criminal activities. Some required investigation to establish whether they fe 11 within my terms of reference. Occasionally, they did not. Again, on many occasions there were matters which fell within my terms but which were
better investigated by other bodies; in some cases, by a
coordinated group using the computer facilities of the
Commission. It was necessary to obtain some executive
imprimatur for this modus operandi . In many cases the
matters were of insufficient importance to justify formal reports. To obviate this problem, an amendment to the Royal Commissions Act was enacted in the form of Section 6 P which came into operation on 1 February 1983 (it was subsequently amended to take into account the introduction of the
Volume 1 -164- Chapter 8
References
National Crime Authority). This Section provided:-
"Where, in the course of inquiring into a
matter, a Commission obtains information that relates , or that may relate, to the
commission of an offence, or evidence of the commission of an offence, against a
law of the Commonwealth, of a State or of
a Territory, the Commission may, if in
the opinion of the Commission it is
appropriate so to do, communicate the
information or furnish the evidence, as the case may be, to -
(a) the Attorney-General
Commonwealth, of a State Northern Territory;
of the
or of the
(b) the National Crimes Commission
established by the National Crimes Commission Act 1982;
(c) a Special Prosecutor appointed under the Special Prosecutors Act 1982;
(d) the Commissioner of
Federal Police of
Force of a State or
Territory; or
the Australian of the Police
of the Northern
(e) the authority or person responsible
for the administration or
enforcement of that law."
I exercised the discretion liberally. It provided the
legislative power enabling much of the cooperative work
undertaken in the latter half of my term.
8.004 The deliberate dissemination of information
in accordance with provisions approval of Government. The
of the Act, met with
Attorney-General made the the
f ollowing remarks during a Parliamentary speech in October
1983.
Volume 1
"The Costigan Commission is investigating organised criminal activities on a very broad front. On last count - depending
-165- · chapter 8
on how one defines them - it had between
a dozen and 20 major separate
investigations proceeding, all of them linked in some way to the original
painters and dockers reference, but in
some cases the link is pretty marginal.
But clearly they are a wide-ranging set
of investigations. The Costisan
Commission, secondly, is
reports to government, most recently last week, one volume of which was tabled but
accompanied by massive and detailed
evidence of very far reaching and
alarming criminal fraud in one State.
The Costigan Commission is generating
prosecutions . Six people have already
been charged in relation to the
particular matter in respect of which the report was produced to government last
week, and many others are being
prosecuted as a result of the efforts of
Special prosecutors Gyles and Redlich, whose task has been to implement the
recommendations and the prosecutorial implications of the Costigan Commission Inquiry. The Costigan Commission is
SUQplying further information to law
enforcement and other agencies around the country which has been and continues to
be enormously helpful in tightening up
the systems as they are operating and the
procedures as they are applying, in
removing loopholes and avoiding future problems with the criminal law.
(Commonwealth Parliamentary Debates, Senate, 18th October 1983, p. 1650)
References
Cost Effectiveness
8.005
"We do what we can, and then make a
theory to prove our peformance the best."
Emerson, Journals (1834)
One of the other areas where a justification
for Royal Commissions is sometimes sought is in the area of
cost effectiveness. Why this should be so is puzzling.
That the suppress ion of crime, or the attempt, should be
measured in money terms is doubtful. It is difficult
Volume 1 -166- Chapter a ·
References
to measure the work of a Commission by reference to balance sheet considerations. In earlier reports I referred to some areas of criminal activity which were suppressed by my
investigations; some examples were fraud on the Social
Security system, workers' compensation fraud and
"ghosting". Attempts were made to quantify the savings
generated.
8. 006 In the course of the preparation of my fifth
Interim Report, I indicated the savings to t he community b y the attack on the tax industry. Even this enquiry was
complicated and imprecise. There had been attacks by others besides my Commission - for example, Government legislation and the McCabe-LaFranchi investigation. Moreover, how
should one measure the financial savings resulting from the suppression of such schemes. The gain may be measured in
hundreds of millions of dollars per annum.
8.007 With some
Commissioner of Taxation issued as a result
hesitation, to advise me
of information
I
of
requested the
tax assessments provided by the
Commission. He supplied those details. They were minimum figures, and did not include cases which were still under
investigation and for which no assessment had issued, or
cases where
investigations the and Department had
the information already provided
Commission material; served to supplement
the latter category would
or confirm
include a
commenced by the
existing number of
bottom of the harbour schemes considered by Special
Prosecutor, Roger Gyles QC.
Volume 1 -167- · chapter 8
References
8.008 The figures were illuminating. The number o f
taxpayers satisfying the minimum test referred to above i n respect of whom assessments had issued (to July 1983) as a
direct result of the Commission's activities was 676; the
amount of tax assessed (including additional tax) was
$25,009,302.00.
8. 009 To place this figure in perspective, the cost
of the Commission was approximately $12 , 000,000.
8.010 The gross tax recoveries have increased
significantly during the ensuing 15 months. I note the
recent report of Special Prosecutor Gyles,
" ... working in tandem with .. the Taxation
Office has identified 6206 companies
involved in bottom of the harbour
schemes. The crackdown has netted the
Government $333M ... about $257M remains to be collected."
(Sydney Morning Herald 15th August 1984)
It was reported the Special Prosecutor expected to charge 150 of "the major promoters" before he stepped down in
September 1984. Further in his report to the
Attorney-General for the year ended 30 June 1984 Special
Prosecutor Gyles stated:-
Volume 1
" ... To the end of the current year 3171
profiles of persons and entities
involved in company stripping other than simply as principals of companies
stripped had been compiled. They
participated in the company stripping industry in various ways.
-168- Chapter 8
After the initial collation
approximately 150 of the persons were
identified as high priority targets.
That number has since increased
significantly. In the meantime the
Australian Taxation Office estimate of the number of companies stripped has
been increased by more than 50% the
latest estimate is over 6, 000 compared
with the original estimate of something over 4,000 . 11
(Annual Report (1984) p.2)
References
Bottom of the Harbour
8.0ll In his first annual report, for the period 22
September 1982 to 30 June 1983, Mr Gyles set out the sources of his information. It included the Australian Taxation
Office, Police Forces, the McCabe and LaFranchi Report,
Corporate Affairs Commissions, the National Companies and Securities Commission and my Commission. Of my Commission he said:-"The continuing enqu1r1es of the Royal
Commissioner have spanned the activities of several promoters and a great volume
of documentary material and other
information has been made available to
me. My office has computer terminal
access to portion of the Commission data base. There is active liaison with the
Royal Commissioner and his staff."
(Annual Report [1983], p. 4)
8. 012 Under the heading of Operational Progress, Mr
Gyles dealt with the institution of proceedings to the date of his report:-
Volume 1
"Following advice from counsel retained prior to my appointment, a prosecution
was initiated in Western Australia by a
police officer attached to my office
-169- ' Chapter 8
There since
against Brian James Maher and Lloyd Errol Faint of Queensland and William Henry
Tolhurst of Western Australia. The
charges, under s. 86 [l](e) of the
Commonwealth Crimes Act, 1914, relate to an alleged conspiracy to defraud the
Commonwealth during 1973 in relation to several companies including Stirling
Court [1973] Pty Ltd. This was the Perth
case identified by the Costigan Royal
Commission. Members of the task force
did the further work which was advised by counsel to be necessary for prosecution. The three defendants were arrested on
29th October 1982 by members of the task
force ... This case is not sufficient on
its own to represent the alleged
activities of Maher and his associates, accordingly teams within my office are
currently examining a range of additional matters involving those persons".
(Annual Report [1983] p. 8)
References
have been many developments in
the presentation of the report. these prosecutions They are matters on
which Mr. Gyles has reported directly to Government.
8. 013 Mr Gyles made some general comments in his
first report dealing with the new role of the Special
Prosecutor (since subsumed by the office of the Director of Public Prosecutions). He said:-
Volume 1
"My appointment was due to the exposure
of failure by the authorities to deal
with what appeared to be a serious fraud
on the revenue for many years - leading
to public perception of gross
incompetence, if not worse.
Hitherto the usual reaction to such
situations in Australia has been to
appoint a Royal Commission. In the case
of my appointment, of course, the facts
were disclosed by a Royal Commission.
-170- Chapter 8
8.014 said:
Volume 1
References
Where such an operative event prima facie involves criminal activity, it will often be ·preferable to concentrate on rigorous investigation with a view to prosecution,
rather than have an administrative
enquiry - which is the nature of a Royal
Commission, whether headed by a Judge or not. The Special Prosecutors Act thus
provides a further option in dealing with cases involving investigations of
corruption or gross incompetence amongst high politicians or administrators. In those cases I believe that the departures from normal tradition which the office
involves are justified. It follows, of
course, that the use of the office should
be sparing.
(Annual Report [1983] p. 11)
Mr Gyles, in his second report in June 1984,
"The Commissioner of Taxation has
estimated that commission earned by the promoters and their associates in
relation to current year profit
companies was in the vicinity of $150
million. If the stripping of
undistributed profits, trust stripping, purported "Curran" and "Westraders"
schemes, and various other tax avoidance schemes were taken into account, the
figure would be very much higher. The
revenue foregone runs into billions of
dollars. Tax avoidance and evasion of this kind
in such volume is extraordinary in
absolute terms but almost incredible in relative terms having regard to the
small Australian economy. It has
recently been reported that the largest United States revenue fraud case ever
brought is being heard it involved
$US48 million. The two committals
currently being heard involve revenue loss of well over $200 million.
-171- Chapter 8
When sums such as these are involved,
special and extraordinary measures are called for. The fact that these may
cause administrative disruption and the expenditure of significant sums of money should be no barrier to effective
action. If there had been an adequate
administrative, judical, and political response in the first place the
situation would never have arisen. Even on the narrowest view of cost benefit,
the expenditure would be justified.
When the wider ramifications for the
effective and efficient conduct of tax
administration are taken into account, the cost will be recovered many times
over. The gross excesses of the tax
avoidance industry in the 1970's should never have occurred and should never be repeated. It is simply not good enough
to fail to cleanse the Augean (sic)
stables because the task is too dirty
and difficult ....
It will be apparent from the foregoing
that whilst I anticipate that a number
of other persons will be charged before the expiration of my term of office
there will be a number of investigations which will not have reached that point.
Furthermore, even in cases which are
before the courts, follow-up
investigations will be necessary. The
magnitude of the task has proved to be
beyond the resources available within the time given to me. I estimate that a
further 12 months beyond September will be necessary in order to adequately
investigate what I have called the inner circle of promoters and their principal associates. By that time, all
appro2riate charges against this group shoula be laid. That will then leave
the litigation to run its course."
(Annual Report [1984] p. 9-10)
References
8. 015 In a schedule Mr Gyles listed 16 7 matters in
various stages of prosecution. That list represents
prosecution of 32 major promoters and other functionaries involved in "Bottom of the Harbour Schemes".
Volume 1 -172- Chapter 8
References
The credit for those promotions rest with Mr Gyles. But in
the exposure of the schemes, much credit must go to Messrs
McCabe and LaFranchi with their successful investigation of the Maher group. There is little doubt the matters would
not have proceeded to prosecution, however, without the
publicity and pressure which followed my report on the same matters. Mr Gyles indicated that some 127 charges, pursuant to the Crimes (Taxation Offences) Act have or will be laid
against a further 27 individuals. been taken out in respect of four
Warrants of arrest have other offenders. In
addition there is a great number of cases involving other
defendants still being investigated by his office.
Other Tax Offenders
8.016 I have provided the Commissioner of Taxation
with much information relating to tax evaders other than
those involved in schemes investigated by Special Prosecutor Gyles. This has been directly responsible for assessments of many millions of dollars. These evaders come from
various walks of life including painters and dockers, the
professions, undertakers and S.P. bookmakers. With S.P.
bookmakers my operations have been particularly successful. In one case an assessment of some $2.4 million was levied.
The secrecy provisions of the taxation legislation renders it impossible to report the actual benefit to the community recovered taxation. of dollars.
Volume 1
I can say it amounts to many millions
-173- Chapter 8
References
Redlich Prosecutions
8.017 In the report of Special Prosecutor Redlich of
7 September 1984 were listed prosecutions. Of those matters
referred by my Commission he said:-
Volume 1
"The work of the Costigan Royal
Commission has been of inestimable
public benefit. It has generated a
public awareness about the type of
criminal activities which threaten our society, and provided the momentum and foundation for the creation of an
effective National Crimes Authority. The terms of my initial appointment to
deal with matters from this Commission have been fully described in Chapter 3
of my 1982-83 Annual Report. I was
required to institute and carry on
prosecutions with respect to "alleged illegal activities" . identified by the
Costigan Royal Commission and to take, co-ordinate or supervise the taking of
civil remedies on behalf of the
Commonwealth and its authorities in
respect to such illegal activities.
Pursuant to my brief from the Victorian Government I was also required to advise the Victorian Director of Public
Prosecutions and the Attorney-General in respect to Victorian offences identified by the Costigan Royal Commission.
There has been close consultation with the Royal Commission about the
disposition of the activities described in the Royal Commissioner's first four
Interim Reports to Government. The
Royal Commissioner and I agreed upon how these matters should be dealt with. The
Attorney-General was consulted and
concurred in the course proposed.
I reported to Parliament in 1982-83
that, inclusive of Interim Report No. 4, the Royal Commissioner had informed the Government about 52 areas of illegal
activity, but that the Royal
-174- Chapter 8
Commissioner's reports were only
designed to inform the Government as to the state of his investigations,
(paragraphs 3.7 and 3.21 of 1982-83
Report). The Royal Commissioner had not in the main made "findings" upon which
prosecutions could be based.
Volume 1
Prosecutions will flow from two of those matters and civil remedies will be
exercised in respect to another four
(paragraphs 3.22 of 1982-83 Report).
Bearing in mind the purposes for which
the first four Interim Reports were
provided to Government by the Royal
Commission, this result should not be
surprising. As previously adumbrated (paragraph 3.23 of 1982-83 Report), the matters referred to me by the Royal Commission
subsequent to Interim Report No.4, wili all lead to prosecution. Since my
1982-83 Report, the Royal Commissioner has referred a further 7 matters to me,
bringing the total number of matters
referred to mx office since Interim
Report No.4 to 18. All of these matters
are based on "hard facts" and have, or
should, lead to the institution of
prosecutions and in most cases the
taking of civil proceedings.
Over 600 charges have been 12 different areas
activities. Other charges be laid. Prosecutions
successfully completed in areas.
laid covering of illegal
are likely to
have been
6 of those
Summarh of the more significant matters from t e Costigan Royal Commission
The following is a summary of the
illegal activities referred to my office by the Royal Commission which has
required my detailed consideration. I have, for convenience, included those
operational matters adverted to in my
1982-83 Annual Report which have been
further developed since that time.
-175-
References
·chapter 8
(a)
(b)
Volume 1
Bankrupt accountant with large
liability operating companies tax
No tax returns lodged for many years
In my 1982-83 Annual Report I referred
to an accountant who, despite his
bankruptcy£ had been able to control the affairs o many hundreds of companies,
deal in very large sums of money and pay
little or no income tax. A large income
tax assessment involving many millions of dollars was levied against this
person, and subsequently judgement was obtained in the amount of the debt.
Execution in respect to that judgement has been an extremely difficult and
complex matter, as the bankrupt's
affairs are inextricably bound up in the affairs of many corporate entities which he controlled, or which were controlled on his behalf by persons who acted
solely at his direction. The manner in
which this person was able to manipulate the affairs of companies has been drawn to the attention of the Corporate
Affairs Office.
I mus t express grave concern at the ease
with which this person was able to abuse the corporate privilege and ensure that the benefits attaching to the concept of limited liability were utilised at all
times. If companies with minimum (i.e.
$2.) subscription requirements are to
remain acceptable, then the responsible authorities must more carefully monitor those who choose to abuse the privilege of incorporation and defraud creditors who will ultimately have little or no
recourse for recovery.
This person, associated with the
bankrupt referred to in the preceding
paragraph, has been assessed as owing
approximately $A3 . 5m. Judgement had
been obtained for approximately $Al. 3m. Judgement for the balance of that debt
References
-176- Chapter 8
has now been obtained and execution
proceedings have progressed at a swift
pace in the course of the past year.
Approximately $Al. 5m has been recovered from this person, who is still refusing
to re-enter the country for fear of her
arrest by prosecution authorities as a consequence of her past activities. It
is expected that the balance of the
properties rema1n1ng for sale will
result in the further recovery of
approximately $Alm.
( c) The backdating of family trusts to evade
tax
Volume 1
In my 1982-83 Annual Report I described a scheme involving fraudulently
backdated trust deeds to facilitate tax evas1on tor some 250 separate
participants. A task force under my
supervision and comprising Federal
Police and Taxation officers, have now completed their investigations and laid charges. The promoters of the scheme,
including a chartered accountant and tax consultant and employee accountants, have been charged with a conspiracy to
defraud the Commissioner of Taxation. One of the conspirators has already
pleaded guilty while committal
proceedings are underway against the
other conspirators. The substantial
amounts of taxation evaded and the
penalties imposed by the Taxation
Department have now been paid by the
participants involved. At the direction of my office, funds
controlled by the principal promoter and his family were garnisheed under the
provisions of the Income Tax Assessment Act. This promoter is facing a number
or- criminal charges arising out of his participation in this and other schemes, but he has taken a number of legal steps
to try and thwart the Commissioner of
Taxation from recovering the income tax due. The Full Court of the Supreme
Court of Queens land has held that the
Commissioner of Taxation is entitled to require the promoter's solicitor to pay funds held in the Solicitor's trust
account on behalf of his client to the
-177-
References
Chapter 8
(d)
Commissi oner of Taxation, pursuant to
the p r ov1s1ons of s.218 of the Act,
notwit hstanding that those funds are
held on a ccoun t of that client for
payment of prospective legal costs. The High Cour t of Australia held that the
Comm i ssioner of Taxation is entitled to a reasonable time in which to issue an
assessment to the promoter and that if
that person has conducted his or her
affairs in a complicated manner, the
length of time to which the Commissioner is entitled to determine that issue is
likely to be greater. The decision in
each case represents a significant step forward for the Commissioner in dealing with persons who participate in criminal activities and then attempt to rely upon procedural issues to defeat the
Commissioner's attempts to collect
income tax owed by those persons. Each
Court refused to accept that the
promoter and his family were acting in
good faith and denied them relief on the
various issues.
Bankrupt solicitor conducting tax
A former Queensland solicitor and
undischarged bankrupt has been
investigated for his participation in a substantial tax evasion sheme. A large number of charges under the Bankruptcy Act 1966 have been laid ar1s1ng from
activity whilst an undischarged
bankrupt. The charges are to be heard
in August.
(e) Telecom technician aiding SP bookmaker o
Prosecution completed Operation Zebra, a Victorian Police task force , prepared a brief to prosecute a
telecom technician for his involvement in the provision of an illegal telephone service to an SoPo operator. He was
convicted of the appropriate offence
under the Telecommunications Act and
sentenc ed to four months 1 imprisonment. He subsequently appealed against the
severity of the sentence to the County
Court o The appeal was dismissed . The
Judge stated in the course of the appeal
References
Volume 1 -178- Chapter 8
that the appellant, who had a number of
serious prior convictions, should not
have been employed in such a position.
(f) Contempt of and refusal to answer
at the Royal
Volume 1
A number of members of the Federated
Ship Painters and Dockers refused
to give sworn evidence before the Royal Commission in compliance with a
resolution carried at a stop work
meeting on 1 July 1981, not to
co-operate with the Royal Commission. Substantive and conspiracy charges were laid and returnable at the Melbourne
Magistrates' Court in December 1983, but were eventually adjourned until April 1984. The conspiracy charge was, on my
recommendation, withdrawn before the charges were heard. Three of the
defendants were required to re-appear before the Commission and refused to
answer questions in relation to another matter. They were subsequently charged with contempt of the Royal Commission in relation to their conduct on this second
occasion. All proceedings commenced in the Melbourne Magistrates' Court on 21st May. On that day an application was
made to the Magistrate to stay the
proceedings on the grounds that an abuse of process was involved. The Magistrate refused the application but permitted the Defendants time to apply to the
Supreme Court for a writ of Prohibition seeking a stay. The matter came on
before Gobbo J. on 23rd May and
concluded on 24th May when Gobbo J.
refused the application. The abuse of
process claimed by the Defendants
related to the refusal by the Director
of Public Prosecutions to grant the
Defendants an indemnity in respect to
the conspiracy charge which had been
withdrawn. It was said by the
Defendants that they would be prejudiced in the conduct of their defence of the
substantive charges if they were not
granted an indemnity. In refusing their application, Gobbo J. observed that a
stay could not be secured merely because the ferson charged might incriminate
himse f on some other charge when giving
-179-
References
·Chapter 8
sworn evidence in answer to the charge
he was facing. His Honour held that the
time to ascertain an abuse of process is
when, and only when, the second matter
(the conspiracy) is proceeded with. The matter was then referred back to the
Magistrate and the hearing continued .
Proceedings are now part heard, the
Magistrate having ruled on the Sth June 1984 that there was a case to answer on
each charge.
(g) Commercial fraud by merchant bank
Included among the discrete matters
referred to the Office of the Special
Prosecutor, were those which could be
grouped under the nomenclature of
commercial fraud by a merchant bank.
are under
consideration and have now been
inherited by the Director of Public
Prosecutions. Some of the matters which are currently under investigation
include a scheme to evade tax by
allegedly trading in Commodity Futures Contracts together with a further scheme which made use of multiple bank accounts in false names in order to conceal or
launder large sums of money. In many
cases breaches of. the Bankint (Foreign Exchange) may ave been
committed.
Under my supervision a task force was
formed comprising personnel from my
office, the Australian Federal Police
and the Australian Tax Office. In
addition, close liaison was maintained with staff of the New South Wales
Corporate Affairs Office. The Reserve Bank of Australia provided assistance as required. Search warrants were recently
executed in New South Wales and the
material is now under analysis. (h) Fraudulent exploration scheme
In my 1982-83 Annual Report (paragraphs 3.14 at pp 18-20) I dealt with this
investigation in some detail. The
investigation has been completed; 220 Commonwealth offences have been
identified, 80 charges having been laid
References
Volume 1 -180- Chapter 8
Volume 1
against 9 defendants; 4 being chartered accountants and one a financier. Three
committal proceedings have been set down for hearing at the Perth Magistrates'
Court in July of this year with an
anticipated duration of ten weeks . A
large number of overseas witnesses will be required to attend.
In investigating this exploration
scheme, the Royal Commission focused on the apparent fraud perpetrated on those members of the public who invested in
this scheme. The task force under my
management comprising Federal Police, Legal Officers and counsel directed
attention to breaches of Commonwealth law.
A senior legal officer and two officers of the Federal Police spent
approximately six weeks in Hong Kong and Singa pore obtaining evidence relevent to the Commonwealth offences, and the
offences committed in the State of
Queens land.
Pursuant to a Letter of Request the Hong Kong Supreme Court permitted the
examination of some 12 witnesses,
including solicitors and representatives from different financial institutions in Hong By contrast, the Singaporean
authorit1.es refused to give effect to a
Letter of Request which issued from the Perth Magistrates' Court in that access to records of Singaporean financial
institutions was not permitted. The Letter of Request did, however,
enable my officers to obtain
non-financial evidence. Four solicitors and five other witnesses were examined in a Singaporean subordinate Court.
Statements were taken from other
witnesses.
In other parts of this report I
considered specific problems that arisen during the course of
investigation of this scheme.
This particular criminal enterprise important implications for law
-181-
have have the
has
References
chapter 8
enforcement throughout the Commonwealth, which I have considered in some detail
in Chapters 3 and 6. The uncovering of
this illegal scheme and the preparation of prosecutions against those who
promoted it, have occupied the attention of the Royal Commission, this office and members of the Federal Police for a very
lengthy period. Because of the
ingenuity of the promoters and the
complexity of the scheme, protracted
investigation and analysis was required to prepare these matters for
prosecution. None of the prosecutions in relation to this scheme will be
short. I anticipate that the best part
of a year will be taken by our Superior
Courts in dealing with trials arising
our of these prosecutions.
Unfortunately this type of criminal
enterprise, so enervating of law
enforcement and the legal system, is
becoming all too common. Careful
consideration must now be given as to
how law enforcement agencies and our
legal system can best cope with this
sinister challenge.
References
(j) Prosecution pending for kidnapping
(k)
Volume 1
Committal proceedings have been
completed and the defendant is presently awaiting trial on two counts of
kidnapping. Other activities of the
Defendants are still under
consideration. The defendant was
identified by the Costigan Royal
Commission as connected with 18 separate criminal activities spanning the last 14 years and was the subject of an inquiry
by the Australian Taxation Office,
resulting in the issue of assessments to this person. Taxation returns had been
lodged by this person for a number of
years showing "nil" income, and
asssessments were issued pursuant to
s.l67 of the Income Tax Assessment Act. Recovery action will be pursued by the
Director of Legal Services.
Assessment and
-182- Chapter 8
The affairs of an alleged importer of
drugs was referred to me by the Costigan Royal Commission. This person had only one legitimate source of income which he disclosed for taxation purposes.
However, over a few short years he had
accumulated substantial land holdings, as well as substantial personal
property, which were held under at least five aliases and his own name in two
states. At the time the matter was
referred to me, fears were held that
this person might be about to sell or
encumber his assets and leave Australia with the proceeds. At my request tax
assessments were raised. A member of my staff and an investigation officer from the Australian Taxation Office attended Royal Commission hearings at the
invitation of the Royal Commission.
Armed with material obtained from
witnesses before the Royal Commission, and with the assistance of the Deputy
Commonwealth Crown Solicitor's Office, application was made for, and an
interlocutory injunction obtained,
restraining the person from dealing with his assets. was later
obtained for approx1mately $600,000 in favour of the Deputy Commissioner of
Taxation and steps are in train to
realise assets to satisfy the
judgement. This entire exercise was
completed in less than four weeks. The
criminal investigation has continued without disruption.
(1) Bankru t solicitor in com
Volume 1
activities.
A former solicitor, whilst bankrupt,
engaged in company stripping activities on a large scale from wnicb he earned
substantial fees. After tracing the
flow of funds it was established that he
avoided his own taxation problems by not lodging returns, and concealing his
assets by the use of several aliases.
Assessments totalling approximatley $500,000 have been issued to this person and recovery action is being pursued.
-183-
References
Chapter 8
(m)
(n)
(o)
Prosecution pursuant and recovery action
A company associated with persons
connected with criminal activity
referred to me by the Costigan Royal
Commision went into litluidation, owing approximately $50,00 to the
Commissioner of Taxation for unpaid
group tax ins ta lmen t deduct ions. At my
investigation the Deputy Commission
(sic) of Taxation is cons1.dering action against the directors and the public
officer, pursuant to s. 252 (L)(j) of the
Income Tax Assessment Act, including
action for the recovery of the tax
instalment deductions made from
employees' wages.
excess of $Aim ra1.sed. Tax evasion promoter. Assessment in
My advice was sought by the Deputy
Commissioner of Taxation in respect of an alleged conspiracy to defraud the
Commissioner arising from a tax evasion scheme. As a resul.t of my advice the
major promoter of this scheme has now
received assessments totalling
approximately $Aim and I have passed the conspiracy allegation to the Director of Public Prosecutions for his
consideration.
Solicitors' fees off-shore. Assessment to be raised
Members of a firm of solicitors
intimately involved in a fraudulent
exploration scheme arranged for fees to be concealed in an off-shore trust. My
off1.ce has co-ord1.nated the act1.vities of the Tax Office and I anticipate the
raising of assessments against these
individuals.
(p) False interest payments and investment
cla1.m. Assessments to be raised.
Certain investors in a fraudulent
exploration scheme, with the assistance of their solicitors, not only sought to
obtain large claims for deductions by
References
Volume 1 -184- Chapter 8
(q)
Volume 1
reason of their investment in the
scheme, but also intended to make false
for remittance of interest
payments upon bogus loans obtained from overseas. Interest payments were made to assignees from the purported lender. The assignees were the trustees of
trusts established overseas for the
investors' benefit. My office has
passed relevant information to the
Australian Taxation Office for
appropriate action. The Director of
Public Prosecutions would exercise a
number of civil remedies in this area
were he given the ability to do so.
Concealment of assets in web of trusts
and Assessments to be
An accountant, while bankrupt, arranged for the establishment of a large network of overseas companies as part of a
fraudulent exploration scheme . He made many overseas trips and concealed his
own interest behind a network of
and trusts. Staff from my
have been close contact with
investigators from the Australian
Taxation Office in an attempt to unravel the web of companies and trusts and the
flow of funds. My office has
co-ordinated the investigat ions of the Australian Taxation Office with
investigations by the Federal .Police. This person has many beneficial
interests which, almost without
exception, are concealed by the use of
companies. The directors of those
companies are his nominees, and the
shareholders hold their shares in trust for him. Efforts have been made, not
only to assist the Australian Taxation Office with raising assessments in
accordance with his true income, but
also to locate assets and trace the
beneficial ownership of assets with a
view to the ultimate recovery of tax
assessed. This has been no easy task.
It should now be completed by the
Director of Public Prosecutions .
-185-
References
Chapter 8
(r)
(s)
Commercial fraud
ssessments 1n excess o
Investigation of a taxpayer's affairs
revealed a liability to the Australian
Taxation Office in excess of $Alm. The
income was acquired by means of a number of commercial frauds, including sending companies to the bottom of the harbour, the acquisition of companies and
subsequent syphoning off of company
funds, insider trading on various stock exchanges, and the use of mining losses
to convert otherwise profitable
companies into loss companies.
Investigations are continuing into
possible Corporate, Reserve Bank, Crimes Act and Income Tax Assessment Act
offences.
Laundering of income. Investigation
cont1nu1ng.
The investigation of a merchant bank
disclosed a number of individuals
laundering income through the operat1on of false bank accounts. Close liaison
was maintained with the Australian
Taxation Office to enable it to issue
amended assessments against the
taxpayers in question.
(t) Investigation of a tax avoidance
promoter. Assessments contemplated.
The affairs of a tax avoidance promoter came to the attention of this office,
revealing that the promoter was involved in a number of tax avoidance schemes
associated with at least 20 companies
promoting fraudulent schemes. Numerous overseas transactions involving the
promoter and/or one of his associated
companies are currently being
investigated. Crimes Act, Banking
(Foreign Exchange) Regulations and
Income Tax Assessment Act offences are being considered. A substantial
taxation assessment is likely to be
raised against the promoter in the near
future by the Commissioner of Taxation.
References
Volume 1 -186- Chapter 8
(u) Corporate commercial frauds, money
laundering.
As a result of an investigation
conducted by the Australian Federal
Police, the affairs of a group of
companies controlled by three
individuals have been referred to this
office. The individuals concerned have sought to defraud the Commonwealth of
revenue by means of
and the o
misleading tax
returns. The investigations are
continuing into a possible Crimes Act, Banking (Foreign Exchange) Regulations and Income Tax Assessment Act offences.
(v) Defrauding of clients by a solicitor.
(w)
Volume 1
Prosecution under way.
This office and the Victorian Police
Fraud Squad have examined a number of
transactions involving the affairs of a Victorian solicitor, whose practising certificate was cancelled by the Law
Institute of Victoria. Following an
investigation, 29 charges have been laid against the solicitor, including false accounting, obtaining financial
advantage by forgery,
uttering and theft. The matter is still
awaiting committal and trial.
Sales tax scheme involving sale of
merchandise at artifically low market value. Board of review
current. In my 1982-83 Annual Report I outlined
the activities or a group of car
retailers who were involved in a scheme to evade sales tax. The principals in
this particular scheme took out
insurance against any possible sales tax liability, by employing "bottom of the harbour" techniques to strip the
companies concerned. Following the
assessment of sales tax with penalties by the Commission of Taxation, the
principals lodged Notices of Objection against each of the assessments and the Commissioner is now awaiting the outcome
-187-
References
Chapter 8
(x)
of some "representative cases",
involving similar schemes, to be heard
before the Taxation Board of Review.
In the meantime a task force is
continuing to collect and examine the
mass of evidence relating to the
implementation of this particular type of scheme with a view of instituting
proceedings for any offence which may
have been committed under Sales Tax Law, Crimes Act 1914 and other Commonwealth legislation. Social security frauds. Prosecutions
under way.
In my 1982-83 Annual Report I reported
on investigations carried out by the
Department of Social Security and the
Royal Commission into a number of Social Security frauds by members of the
Federated Ship Painters and Dockers
Union. Of the 122 files referred to
this office for further investigation
and prosecution, 65 matters were not
proceeded with for policy reasons, or
because the amounts owing to the
Department of Social Security were
insubstantial and therefore could not
justify the cost of civil recovery
proceedings. The remaining 57 files
have been referred to the Federal Police in four capital cities for prosecution. To date, two offenders have been
convicted, another twe 1 ve have been
charged and are awaiting trial, and the
balance are still under investigation.
(y) Sickness and unemployment benefits under
alias $64,700 over paid. A member of the Federated Ship Painters and Dockers Union was in receipt of
soc1al security benefits from mid 1975 until his arrest in September 1983.
During the period from mid 1976 until
his arrest, he also claimed, inter alia, sickness benefits, unemployment benefits and other pens1ons under
eight false names. T is enabled h1m to
defraud the Department of Social
Security of $64,694.47 in respect to 221
References
Volume 1 -188- Chapter 8
separate offences. He forged and
uttered at least 33 income tax returns
claiming entitlement to the refund of
group tax deductions in respect to certificates which were e1ther
unclaimed, or falsely obtained, relating to work carried out by persons puporting to be members of the Federated Ship
Painters and Dockers Union. As a
consequence of this activity, the person concerned was able to fraudulently
obtain the sum of $4,655.65 from the
Taxation Office. Charged with 293
separate offences, the person was
sentenced to imprisonment for four
years, with a minimum of two and a half
years to be served. He was also ordered
to make reparation to the Commonwealth of Australia in the amounts above
mentioned.
(z) S.P. bookmaker equipment supplied by
Ielecom employee.
During the course of a raid on premises
belonging to a particular S.P.
bookmaker, Victorian Police discovered that sophisticated electronic equipment had been installed by the bookmaker to
facilitate the conduct of his business. The distributor of this equipment was
interviewed and admitted supplying, but not installing the equipment. He was an
employee of Telecom who, from time to
time, supplied Telecom with electronic equipment.
The distributor of the equipment
admitted supplying electronic equipment to a person he later discovered to be an
S.P. bookmaker. Investigation is
continuing into these matters.
References
8. 018 Some of those matters bear further comment.
The bankrupt accountant referred to in paragraph (a) had
judgment entered against him by the Commissioner of Taxation for $5,530,812.28 on 8 September 1983. To date recovery
proceedings have approximately $400,000. Further
assessments exceeding $500,000 have been issued against a
Volume 1 -189- . chapter 8
References
number of his companies.
8.019 The members of the Federated Ship Painters and
Dockers ' Union referred to in paragraph (f) were convicted of all charges and fined. Those convicted of contempt were fined the maximum penalty.
8 . 020 The fraudulent exploration scheme referred to
in paragraph (h) is a prime example of the type of
commerc i al crime that has become common in our community. I add my support to Mr Redlich's comment that:-
"Unfortunately this type of criminal
enterprise, so enervating of law
enforcement and the legal system is
becoming all too common. Careful
consideration must now be given as to
how law enforcement agencies and our
legal system can best cope with this
sinister challenge."
8.021 The person charged with kidnapping and other
offences referred to by Mr Redlich in paragraph (j), has
been referred to and investigated by the Australian Taxation Office. His current tax liability amounts to approximately $190,000.
Other Prosecutions
8.022 It was my policy to disseminate information
where it assisted in the detection of offenders. This
resulted in numerous prosecutions. Many have not been
finalized and so the defendants cannot be identified. Some of the bodies that have initiated legal proceedings or
commenced investigations are:-
Volume 1 -190- Chapter 8
References
Attorney Generals' Department of Victoria Australian Federal Police Australian Taxation Office Commissioner of Corporate Affairs,
(New South Wales) Commissioner of Corporate Affairs, (Queensland) Commissioner of Corporate Affairs, (Victoria) Commissioner of Corporate Affairs,
(Western Australia) National Companies and Securities Commission Police Forces (Various) Australia Public Service Reserve Bank of Australia
Department of Social Security
Various joint task forces involving Australian Federal
Police, State Police Forces and other specialists have been assisted. Amongst the more significant proceedings
finalised are:-Francis Kinsella
8 . 023 He had failed to appear in Brisbane in July
1974 to answer charges of possession of stolen property and attempted murder. In November 1981, as a result of Federal and State Police enquiries and following identification of him using a false name, he was extradited to Queensland to
answer those charges.
Naval Dockyard Fraud
8.024 Painters
Eighteen and Dockers members of
Union were the Federated Ship
convicted in 1981 in
relation to forging and uttering Medical Certificates.
John Allan Wallace
8.025 Commission Detected as being
by in
Federal Police attached possession of heroin. to
He
my was
convicted and imprisoned. Subsequently he was convicted of
Volume 1 -191- Chapter 8
References
a major drug trafficking offence and was imprisoned for six years.
Peter Wilfred King
8. 026 The offender was a Ship Painter and Docker
involved in frauds on the Australia Taxation Office with i n preparation of some forty fraudulent returns. He was
inves t igated by the Federal Police regarding frauds in
claiming unemployment and sickness benefits under seven false names. Approximately $64,000 was defrauded from the Department of Social Security and some $4,500 from the
Australian Taxation Office. He is referred to in paragraph (y) of Redlich's Report. He was charged with some 290
offences under the Crimes Act 1914. Two charges related to the theft of telephones and another to unlawful possession of a firearm . He pleaded guilty to all charges, was
imprisoned for four years and ordered to r e pay the stolen
moneys.
Donald Brooks Lockyer
8.027 In August 1983 he was convicted of offences
under the Bankruptcy Act a nd he was imprisoned for six
months. In October 1984 he was convicted of further
offences and sentenced to 18 months imprisonment. He is
awaiting trial on charges of conspiring to defraud the
Commonwealth.
Russell Charles Meldrum
8.028 He came to notice as a result of enquir ies in
S.P. bookmaking operations in Vic t ori a. He was c onvicted of breaching the Telecommunications Act and sentenced to four months imprisonment.
Volume 1 -192- Chapter 8
References
Outstanding Matters
8.029 Other substantial matters where investigations
are proceeding and/or charges laid but have not been
finalised include those summarised hereafter.
Australian Federal Police
8.030 Warrants issued with respect to forging and
uttering false passports. under the Passports Act,
rna tters invo 1 ving $3 00, 000)
Investigations regarding offences Social Security Act (some 100
Bankruptcy Act, Crimes Act and
Taxation, Reserve currently underway. Bank and Companies Legislation are
The Federal Police were also involved
in various joint task forces investigating matters relating to drugs, currency offences and pornography. There are many investigations being carried out by this identified by my Commission. I have
information to the Australian Taxation
force on matters recently Office, provided
which is
working with this force, about major frauds by painters and dockers employed by a Sydney ship repair firm. These
investigations involve "ghosting". The revenue has been defrauded of at least $36,000. The same group are involved in Social Security and Workers Compensation fraud. One
recent referral to this force deserves special mention. It
involves the activities of the bankrupt accountant referred to in Paragraph (a) - of Special Prosecutor Redlich's report. I have recommended the bankrupt and a dismissed bank manager and other associates be investigated with respect to
possible offences arising out of their loan raising
activities and offences under the Bankruptcy Act and Crimes Act.
Volume 1 -193- · chapter 8
References
Commissions of Corporate Affairs (Various States)
8.031 Numerous matters have been referred. The
investigations are assisted by the Federal and State Police Forces. In New South Wales, at least three corporate
structures are being investigated as well as many
individuals. In Queensland, the operation of a large oil
exploration scheme and other companies used in illegal tax avoidance schemes are under investigation. The Western
Australian and Victorian Corporate Affairs Offices are
investigating the affairs of companies involved in illegal tax avoidance schemes. Many charges have been and will be
laid. The investigators are looking at company, crimes and security legislation offences. Numerous individuals have and will be charged with conspiracy. The National Companies has been assisted in its and Securities Commission investigations by my officers. I have recommended that the Commissioner of Corporate Affairs in Queensland investigate with a view to charging certain offenders with breaches of
the Companies Code in relation to:-(a) the control and management by the
accountant of companies in Queensland
whilst a bankrupt;
(b) the transfer of a debt of $1.9 million
from Company "A" to Company "B" in
circumstances where it would be
reasonably known that Company "B" would not be able to meet the debt, the result
being that the bank then employing the
dismissed bank manager was likely to be
defrauded, and
Volume 1 -194- Chapter 8
References
Joint Task
8.032 been of
Information collected by assistance to Federal/State my Commission has
Police task forces.
Such a "task force" in Queens land charged ten people with
drug-related offences.
State Police Forces
8.033 Assistance was provided to various state
,:>alice forces in addition to specific matters that are
referred for investigation and prosecution. In Queens land, four men are awaiting trial on charges of conspiracy to
defraud the public with respect to an oil and gas
exploration venture. A major SP bookmaker was arrested and is now awaiting trial in Queensland. Three Queenslanders were arrested and convicted on charges of selling dangerous drugs and have been imprisoned. I referred to the
Queensland Police, the accountant and his associates
mentioned in the previous paragraphs. they be investigated with a view to:-I have recommended
(a) charging them with appropriate offences
as a result of their share trading
activities which resulted in substantial loss to the then Bank of New South Wales
and a Brisbane sharebroking firm;
Volume 1 -195- .Chapter 8
(b) laying charges as a result of false
statements made in relation to the
granting of a bank loan of $15,000 said
falsely to be for home improvements; and (c) laying charges as a result of the
discharge of loans amounting to
$17 5, 000. The discharge of these loans
was made in order to release shares held
by the lenders as security, free from
further encumberance.
References
The Queensland Police are to investigate the dismissed bank manager following my referral. He allowed his employer bank
to be defrauded of a sum in excess of $100,000.
8.034 I have assisted the Victorian Police in a
variety of investigations into such matters as fraud on a
I
building society, murder, drug offences and SP operations. In respect of SP operations I have provided the Police with information, and material obtained by analysis and
processing of documents collected during my investigations. As a result two ex-bank managers have been charged with
criminal offences and two men have been charged with
kidnapping. One has also been charged with sixteen counts o f theft and common assault. I have passed on information
relating to an ex-bankrupt/ex-solicitor who was subsequently charged with twenty-nine offences including forgeries, utterings, obtaining property and financial advantage by deception, false accounting, theft and procuring the
execution of a valuable security.
Volume 1 -196- Chapter 8
References
Other Referrals
8. 035 In the course of my enquiries, I have come
into possession of information that referred to various
professional bodies, Registrars and employers. Some of the more significant matters are:-
Volume 1
Attorney-General's Department (New South Wales):
Keith Knight:
As a result of certain false statements
contained in his application for
admission as a barrister, details of
which I reported to the Attorney-General, this man's name was removed (by order of
the Supreme Court) from the barristers
roll. In August 1984, a fellow
practitioner who supported Knight's
application in circumstances which
suggested he may have been a party to a
deception was also reported but it was
determined that no action be taken to
charge him for mis-conduct.
A business man involved in illegal tax
schemes and massive frauds upon the
revenue has also been referred regarding his position as a Justice of the Peace .
-197- . Chapter 8
References
Banks
This matter has not yet been determined.
Attorney-General's Department (Victoria): Guy Keith Campbell:
Following an investigation of his affairs by me be was referred regarding his
position as a Justice of the Peace. His
commission was withdrawn.
Thomas Buckingham:
His commission as a Justice of the Peace
was withdrawn with respect to malpractice in the execution of his duties.
Australian Society of Accountants: Keith Knight was referred to the New
South Wales branch following my
investigation of his affairs and the
failed merchant bank group of Ward Knight and Dunn Pty Ltd. In December 1982, he
voluntarily withdrew from his membership of the Society and no longer practices as an accountant.
8.036 The activities of bank officers and their part
in the furtherance of a range of
from tax avoidance, illegal
matters. officers
bookmaking were serious against some of the
employers and police forces.
illegal activities ranging company dealings to SP
Action has been taken
involved by both their
Banks showed a similiar
complacency in regard to their staffs' activities as did
some bank officers towards the illegal activities of their customers. The banks that took remedial action as a result
of my investigations, were:-(i) National Australia Bank
Volume 1
Enquiries revealed breaches of banking regulations. These involved false
-198- Chapter 8
References
bank · accounts. Disciplinary action has been taken against at least three senior
officers. State Savings Bank of Victoria As a result of Commission enquiries a
bank manager was demoted, removed from
his branch and denied the right for
promotion of some two years. He elected
to resign shortly thereafter. Some
$70-80,000 is still owed to the bank as a
result of his illegal dealings. Supreme
Court action to recover $65,000 from a
notorious SP bookmaker has commenced. A bank accountant was initially demoted
following illegal activities identified by my enquiries. Subsequently it was
discovered he had given himself a
personal loan in a false name. No
payments were made. He was dismissed and charged with and convicted of theft by
deception. Westpac Banking Corporation
As a result of my investigations three
bank managers from the CBA bank had
disciplinary action taken against them. A Melbourne bank manager was dismissed because of his illegal dealings with a
corporate criminal who has also been
charged with various offences including kidnapping and assault. A loss of some
hundreds of thousands of dollars was
caused to the bank by his illegal
actions. The Manager has been charged by the Victorian Police with twelve charges of false accounting. Two New South Wales bank manag·ers faced disciplinary action
as a result of my investigations. One
was dismissed and the other demoted.
BARRISTERS BOARD OF WESTERN AUSTRALIA
Abraham Bereave
8.037 Following referral Bereave was investigated
and convicted of two counts of unprofessional conduct. The Supreme Court subsequently ordered he be struck off the roll of practitioners. His appeal was dismissed. He has sought leave to appeal to the High Court.
Volume 1 -199- · Chapter 8
References
LAW INSTITUTE OF VICTORIA
Galbally & O'Bryan
8. 038 Evidence was given by Mr Frank Galbally, a
principal in this firm, that monies held under the name of
" subsidiary account" appeared to consist of monies held on behalf of clients but not placed in his trust account. This
procedure did not appear to comply with the requirements of t h e Legal Profession Practice Act and the Rules made under
it. The matter was investigated by the Law Institute of
Victori a. It found that any breaches of that Act had
resulted directly from incorrect advice and supervision b y the firm's auditor. The auditor was reported to the
Australian Society of Accountants. As a result of the funds not being placed according to the Act the Solicitors
Guarantee Fund suffered a loss of income. The firm was
required to pay a sum of $8,378 to the fund representing
l ost interest. In view of the circumstances in which the
"subsidiary account" came into being no action was taken
against Mr Galbally or the firm of Galbally and O'Bryan.
Public Service Board (Commonwealth)
8.039 As a result of matters reported in Interim
Report No. 4, involving mainly illegal tax schemes, three
members of the Attorney-General's Department Perth, were charged under the Police Service Act. One member, Mr
Bercove, was subsequently dismissed and two others were
disciplined.
Volume 1 -200- Chapter 8
References
PROSECUTIONS ARISING FROM CONDUCT DURING COURSE OF THE COMMISSION'S HEARINGS
8.040 By reason
course of the Commission matters for prosecution.
of conduct occurring during the
hearings, I referred a number of
The following were convicted:-
(i) John Andrews
Convicted in September 1983, by the
District Court (New South Wales) on three charges of giving fal s e testimony. He
was placed on bond in the sum of $1,000
to be on good behaviour for three years
on two charges and on the third charge
was sentenced to two months imprisonment.
(ii) The Giannarelli Br others
Volume 1
As a result of evidence these four
brothers gave before me in October 1981, relating to their banking arrangements, they were subsequently sent for trial on charges of perj ury.
In March 1983, Emilio, Giovanni and Mario Giannarelli were convicted. Giovanni and Mario Giannarelli we r e both sentenced to two years imprisonment. Emilio was
placed on a good behaviour bond for five
years in the sum of $2,000. An appeal to
the Full Supreme Court of Victoria was
dismissed in April 1983 as to both
conviction and sen tence. In June 1983
Guiseppe Giannarelli was convicted of
perjury sentenced to fifteen months
imprisonment.
Mario and Giovanni Giannarelli
successfully L:ppealed to the High Court . Subsequently Emilio and Guiseppe
Giannarelli appealed to the Full Court of the Court of Victoria; their
were quashed and their
sentences set aside on the ground of
inconsistency of the common law of
perjury with the relating to
perjury in the Royal Commissions Act. As they had all served imprisonment,_ it was resolved not to prosecute the
Commonwealth offence .
-201- · Chapter 8
These men had all deliberately lied on
oath but escaped conviction on technical grounds. I recommend that the Royal
Commissions Act be amended so as not to
exclude the application of State laws
to perjury where a joint
CommissLon is being conducted.
Moreover I recommend that the provisions of the Royal Commissions Act be amended
so as to delete the requirement that the
false answer be shown to be "material" to the Inquiry. A great deal of time and
money can be spent, particularly in a
complicated investigation, in
establishing this matter when in truth
the only question is whether a witness
has chosen to lie on oath. I note that
in most jurisdictions "materiality" was removed as a requirement many years ago, and for good reason.
References
Roy Holman
8.041 Holman was convicted and fined in March 1982
in the Supreme Court of Victoria on two charges of refusing to answer questions before the Commission in breach of the Victorian Evidence Act.
Dennis Lowe
8.042 Lowe was convicted and fined in March 1982, in
the Supreme Court of Victoria on two charges of refusing to a nswer questions before the Commission contrary to the
provisions of the Victorian Evidence Act.
Executive Members of the Victorian Branch of the Ships
Painters and Dockers Union
8 . 043 On 2nd August 1984, Phillip John Scott,
Douglas Maxwell Sproule, Robert John Dix, Guido Spiller, Roy Leslie Holman and Paul John Burns, Executives of the
Victorian Branch of the Union and Francis Kinsella, a former
Volume 1 -202- Chapter 8
References
member, were convicted and fined for refusing to answer
questions as directed by the Commission. Scott and McDonald were convicted of contempt and fined on charges.
8. 044 There are five witnesses who have yet to be
dealt with on charges of perjury anq giving false testimony and two others who have been charged with refusing to answer questions. Two accountants are under investigation with respect to charges of giving false testimony.
Volume 1 -203- Chapter 8
CHAPTER 9 - TRANSFER TO NCA
Introduction
This chapter deals with the transition of the work of my Commission to the National Crime Authority. In
recent weeks there has been presented to the Parliament
copies of the correspondence between myself and Government relating to this matter. In the course of this chapter I
refer to that correspondence. I need to do so in order to
put into context recommendations which dppear towards the end of it.
Despite the frank and robust differences of
view expressed in this correspondence I have never had any doubt that Government was anxious to maintain the attack on organised crime. The Commission has had great support from b o th Prime Ministers for which I wish to record my
appreciation.
History
9.001 Report.
On 27 July 1982 I delivered my Fourth Interim
In it I described the operations of criminal
organisations in Australia. I gave an account of the extent to which many investigations had progressed. I isolated and defined the objective which the good Government of Australia required to be attained, namely the suppression of criminal organisations. I described what was r8quired to achieve
this objective, stating the systems needed, the
qualifications of the persons who should be employed, and the manner in which the job should be done.
Volume 1 -204- Chapter 9
Transfer to NCA
9.002 ·shortly prior to the delivery of the Fourth
Interim Report I had written to the then Prime Minister, the Right Honourable Malcolm Fraser. I had previously held
informal discussions with the Hinister for Administrative Services, the Honourable Kevin Newman, which had resulted in a letter of 6 May 1982. I had drawn attention to the
magnitude Commission allowed.
of the problem
completing its I had said:
and task the impossibility within the time
''I am aware that the Government is
considerinft the formation of a "Crime
Commission'. Indeed as I indicated to
you it was my intention as part of a
final report to discuss the alternative
methods available to Government to deal on a permanent basis with the kinds of
problems uncovered by this Commission. Such a report may well be pre-empted by
Government decision but I would not
expect such a decision to be made
quickly: a very considerable
investigation of various alternatives will no doubt have to be made before the
form of any such permanent structure is
determined.
In the meantime this Commission has a
job, and I believe a very imp or tan t job
to do. It will not be done quickly, but
will be done thoroughly. It will not be
completed when I return my letters
patent, for crime is an on-going activity and the directions of my investigation
will have ·to be pursued by someone or
some body when I have finished. But when
I am to finish depends on the view
Government takes as to its future role in
and attitude towards the attack on
organised crime. My feeling at the moment is that this
Commission requires a significant
extension of time ... "
(Letter from the Commissioner to The Han. Kevin Newman 6 Hay 1982)
of my
then
Volume l -205- Chapter 9
Transfer to NCA
9 . 003 I n my letter of 29 June 1982 to the Prime
Minister I referred him to this letter of 6 May and
requested an extension in the order of 2 to 3 years. No
immediate response was received.
9 . 004 The delivery of my Fourth Interim Report
fo llowing this request gave greater impetus for the creation of a Crime Commission. Most of the recommendations in the
Fourth Report were accep ted and implemented. The implicit recommendation that a Crime Commission was required was also a ccepte d. However, in all the discussions at that time and
t h e r eafter, even following the change of Government, the
r esponse to requests of the most fundamental character, such
as t he grant of an extension, was always long in coming.
Indeed I had received no official response to my letter of
29 June 1982 by October of that year, and the eventual
exte ns ion was not granted until a tew days before my
Commission e xpired. This made the task of budgeting for the
f uture very difficult a n d created great uncertainty amongst the staff, many of whom were not members of the Public
Service and had no security of tenure.
9 .005 By October 1982 the Government's intention to
es tablish a Crime Commission became known. I was required
to budget for the forthcoming year. I had been informed it
wa s intended the new Commission would take over the basic
structure, premis es and equipment of my Commission. If that was to be the case then, in budgeting, it was sensible to
pr ovide for the expansion of the staff, equipment and
techniques in anticipation of the new Commission adopting t hem. On 4 October 1982 I wrote to the Prime Minis ter
info rming him of my intention and pointing out t hat if this
was not acceptable my proposed budget should be rejected and I should commence winding down my staff and operations.
Volume 1
" ... The Commission now
guidance as to its future
this is an urgent need.
-206-
needs some
planning and
Chapter 9
Transfer to NCA
Its future planning is clearly affected
by the nature and timing of any decision
about a future National Crime Commission or other permanent structure. As I
understand current Government thinking, it is proposed that when a new body is
set up it will take over the basic
structure, premises and equipment of my Commission. If this understanding is in
beneral terms correct then it would be a
comparatively easy matter for me, after a suitable period of overlap, to hand over my investigations to that new body.
l4y immediate problem is that the extent
of my present investigations requires
expansion of staff, equipment and new
premises. My present premises are
with documents and people;
as desks are vacated for a short period
they are immediately occupied. This is
highly inefficient. Massive new loads of documents are expected shortly; they are extremely important and require detailed analysis.
The staff of the Commission have prepared a fresh budget for the financial year
ending 30 June 1983. It is proposed to
be handed to the Department of
Administrative Services this week. It is based on the assumption that the new
National Crime Commission will be taking over at the appropriate time. That is
the only reasonable assumption on which it could be drawn. If I did not make that assumption the
budget would need to be prepared on the
basis of a · winding down of the Commission about March next year with a view to
final report by the end of June. Such a
basis would prevent me from budgeting for the facilities and staff which I need
properly to continue my work. Moreover
there would not be the ability to
maintain my investigations in areas which my successor would expect to see
investigated when he took over my job.
Volume 1 -207- Chapter 9
9 .006
Transfer to NCA
I therefore ask for approval in principle to the basis on which I have prepared the
budget. If that basis cannot be approved at this stage it will be necessary for me
to commence the winding down and
disbandment of the current organisation with the result that any new structure
would be gravely impeded in its
commencement.
This letter is written on the basis that
the Commission's term has been extended to 30 June . (I note that the Victorian
Government has extended my term to 31
December.) Whether this is a realistic
date having regard to the extent of my
investigations depends on the speed with which a new viable structure is available to take over my work. I do not
underestimate the difficulties this will pose." (Letter Commissioner to the Prime Minister 4 October, 1982)
Within 24 hours of despatch of that letter the Acting Attorney-General, The Honourable Neil Brown, said I s hould proceed to budget on that understanding. I did so
and a budget was prepared which envisaged an expanded
Commission, occupying larger premises, designed for the
permanent home of the Crime Commission. The budget was
submitted for approval and accepted.
9 .007 On 25 October 1982, after the budget had been
approved, the Prime Minister replied to my letter noting my intentions and acknowledging that a transition from my
Commission to the new Commission was envisaged. It also
noted that the new Commission may be located in Canberra, which possibility precluded development of the premises in Me lbourne. Otherwise my Commission was to continue with the
development of techniques on the basis that its expertise
would pass to the new Commission.
Volume l -208- Chapter 9
9.008
Transfer to NCA
11 As the Acting Attorney-General has
discussed with you the Commonwealth for its part has agreed to extend your
Commission to l July 1983 on the
assumption tha t the National Crimes
Commissio n will be available to commence operations early in 1983. The Government recognises the need to allow for an
orderly transition between your
Commission and the new body. It would,
if necessary, consider extending your
Commission beyond l July 1983 to ensure
that this occurs. You have indicated an urgent need for
some guidance for the Commission's future planning. While the Commonwealth does
not seek to direct the Commission as to
how it should carry out its functions, it
sees certain areas of priority for action by the Commission in the remainder of its
term â¢..
I am asking the Acting Attorney-General to speak further with you and with Mr.
Cain, in relation to the future
activities of the Royal Commission and
the transition to the National Crime
Commission.
I note that you have prepared a fresh
budget for the remainder of this year
envisaging the expansion of staff and
equipment and new premises. The Minister for Administrative Services will be
considering these estimates and the best way of meeting your needs during this
period. This needs to be in the context
that the National Crime Commission may be located i-n Canberra rather than in
Melbourne."
(Letter Prime Minister to the Commissioner 25 October 1982)
The suggestion that the new Commission would b e s eated in Canberra made nonsense of the budget, by now
a pproved , in which premises were to be developed in
Melbourne . It alsd made difficult to justify the employment and training of staff recruited in Melbourne. It was not a
sensible location, for in Canberra it would be far removed
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from the geographical location of the operations of criminal organisations. It left me in a quandary as to what I should
do , since I had no wish to expend the public purse on a
false basis. On 4 November 1982 I again wrote to the Prime
Minister pointing out the difficulty created by the
possibility that the location may be in Canberra and seeking advice as to what should be done. I received an
acknowledgement of the letter, but no clarification.
Volume 1
''I think I should say at the outset that
I find the contents of (the Prime
Minister's letter of 25 October) very
d isturbing.
When I wrote to you on 4 October I
indicated · the urgent need for some
guidance as to the Commission's future
planning and advised you that unless
otherwise advised I propose to prepare a budget for the rest of the life of the
Commission on the basis that the expanded staff numbers, new premises and
additional equipment, could form the
basis of a proposed National Crime
Commission.
Within 24 hours I was advised by the
Acting Attorney-General that I should
proceed on the basis set out in that
letter. As a result a budget has been
prepared and delivered. Inspection of
new premises has been undertaken and
recommendations made and a new staff
proposal has been prepared.
I am now advised that the location of the
National Crime Commission may be Canberra.
Such a proposition completely destroys the basis on which I wrote my letter of 4
October and on which I have taken the
steps outlined earlier in this letter.
Let me explain this statement.
l. It has been contemplated in all my
discussions with the Government and particularly with the
Attorney-General, Senator Durack, that when a Crimes Commission was
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established my Commission would need a further six months. This would be
made up of three months handover period and three months for
preparation of a final report. Such
a handover assumed that the great
bulk of the staff presently working with the Royal Commission would
change over to the Crimes
Commission. They would maintain for the benefit of the Crimes Commission their expertise and their very
extensive range of personal contacts with law enforcement agencies
developed slowly over the last two
years. The new members of the
Crimes Commission would then be able to take over a continuing and
experienced staff and operation
already occupying suitable premises.
2. However if the Crime Commission is
to be based in Canberra, the
scenario changes. It is extremely
unlikely that any of the existing
staff would move to Canberra or
leave Melbourne. A completely new operation would have to be set up
and new premises acquired.
3. In those circumstances talk of a
relatively simple handover in three months is no longer appropriate.
Indeed I have grave doubts whether
my position as Royal Commissioner
for both the Commonwealth and the
Victorian Governments would fit
easily into the far more massive
operation which would then be
required.
4. Moreover since I wrote to you on 4
October your Government has
announced its decision to proceed
with the establishment of a National Crime Commission independently of the States, though hopefully with
their support and cooperation. Let me make it clear that I make no
comment on that decision. It is the
decision for Government to make, but it may in due course be a matter on
which I would need to take advice
from your Government and the
Victorian Government whether I
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could, acting under letters patent
from both Governments, actively
assist the operation of such a
Commission unless both Governments consent. I think it is appropriate
for me to say having regard to
experience I have gained and the
insight I have acquired in the last
two years that I would regard it as
a disaster for the Crime Commission to be located in Canberra. Such a
decision would make it difficult to persuade the appropriate people to staff and lead it, but far more
important is the undoubted fact that organised crime is not based in
Canberra. It operates in Melbourne and Sydney and the other large
seaboard cities of the country and
investigation into and an attack on it must be located in a place where
instant response can be organised
and access to information, both
documentary and personal, is easy.
In the result I am left in the same
dilemma that I raised in my letter
of 4 October. If I am to act on the
basis that I am to conclude my work
by 30 June 1983 and a Crime
Commission is not going to be
located in Melbourne it would be
impossible for me to justify the
considerable expense of new staff, new equipment and new premises.
Current predictions are that such
new premises would not be available before March 1983. It would be
unconscionable to contemplate such expenditure for an occupation of
approximately 3 months. In any
event the Commission would not be
expanding on that assumption but
contracting. I must therefore ask you as a matter
of urgency to advise me on the
assumption on which I am to plan the
remaining life of the Commission ... "
(Letter Commissioner to the Prime Minister 4th November, 1982)
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9.009 The Government had announced the intention to
establish a Crime Commission. A Bill was introduced into
the Federal Parliament on 21 October 1982. In the second
reading speech the Acting Attorney-General drew attention to the part of my Fourth Interim Report in which I described
the requirments for a successful Crime Commission.
"Several recent Royal Commissions have demonstrated that they are able to uncover and bring to public notice instances of
wrong-doing not detected by ordinary law enforcement agencies. These include the Costigan Royal Commission into the
Activites of the Fede rated Ship Painters and Dockers Union, which attributes its
success in this regard to first, its power
as a Royal Commission to require by
subpoena the production of documents and the attendance of persons for examination - this power is not of course possessed by
the police; secondly, its access to
equipment and expertise to enable
sophisticated intelligence gathering and analysis; and, thirdly, the use of
personnel with high intellectual capacity and special training.
(Acting Attorney-General Hansard 21 October 1982)
9 .010 In the context of the correspondence then
passing between me and the Government it was clear that the adoption of my staff, premises and techniques were seen as desirable and, subject to resolution of the debate as to the site of the new Commission, it was to be done.
9.011 The Bill steadily moved through Parliament.
During its course an amendment was made by which the
privilege against self-incrimination was to be allowed to witnesses and was to extend to their personal documents.
This raised difficulties as to my disposal of evidence, more particularly documents, which I had seized in circumstances in which the privilege did not apply. Now believing that
all were agreed that the new Commission should have access to everything I held, on 25 November 1982 I wrote to the
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Acting Prime Minister, drawing his
difficulty I would encounter in handing attention to the
those documents to
the new Commission in the absence of any statutory authority o r requirement to do so. It would allow the new Commission
to gain from me what it was precluded from obtaining
itself. There seemed some difficulty with certain advisers in the Government in grappling with this problem and that
difficulty continued to mark the dealings between me and
those advisers, even following the change of Government in 1983. In my letter of 25 November 1982 I said:
Volume l
"In my letter of 4 November I raised a
number of matters which related to the
ease of handover of my work to a National
Crime Commission. One further problem
has arisen which I have discussed with
Mr. Brown and Mr. Newman. That problem
arises from the so-called Spender
amendment to the National Crime
Commission Bill which enables a witness to claim self-incrimination in relation to documents. You will understand having regard to the way in which my Commission
had been conducted that I would regard
such a restriction on the National Crime Commission 1 s powers as very limiting .
indeed. Once again, of course, this is a
matter for Government policy. It does
however have a concern in relation to the easy handover of my work. If that
amendment had not been passed I would not have seen very much difficulty in handing over to the National Crime Commission the documentation which I currently hold.
However if a National Crime Commission is precluded from acquiring documents which may tend to incriminate a witness, then I
do not know how I could properly hand
over to such a Commission documents in
respect of which such a claim for
privilege might be taken. It would be
quite wrong for me to give to a National
Crime Commission through a back door
documents which it could not acquire
itself because of the amendment. This is
a very serious problem which would
require a good deal of thoupht if the
amendment remains in the Bill.'
(Letter Commissioner to Acting Prime Minister 25 November, 1982)
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9.012 The Bill was passed but before proclamation
there was a change of Government. I immediately wrote to
the new Prime Minister, the Honourable R.J. Hawke, A.C.,
M.P., seeking advice as to the future of the Crime
Commission. I drew attention to the emasculation of the
powers of the Crime Commission. I pointed out that if the
new Government proceeded with the existing Act, and if it
wished there to be a transfer from my Commission to it, a
three month period of co-existence between the new body and mine was necessary for investigations interruption and for the transfer to
to
be continue without effective. My
letter was dated 15 March 1983. In it I said:
Volume 1
11 What is required for the efficient and
necessary continuation of the
investigations of this Commission is that there should be a body in existence (at
least three months prior to my demise)
vested with the appropriate powers
enabled to maintain, without
interruption, my work. If the Government proposes to review in
depth the National Crimes Commission Act (and I do not for a moment suggest it
should not adopt this course) such review will obviously take a good deal of time,
perhaps beyond the end of this year. If
such reconsideration does not eliminate the Spender amendment and eliminate legal professional privilege, then a new Crimes Commission will not be able to take over
my work efficiently.
If it is the Government's desire that my
current investigations are to continue, a serious question arises as to how this is
to be achieved. One answer would be to
request me to continue my work beyond the end of this year. Whether such a request
should be made depends on the answers to
the matters raised in the preceding
paragraphs. 11
(Letter Commissioner to Prime Minister 15 March 1983)
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9.013 At this time the Report of the Royal
Commission of Inquiry into Drug Trafficking was submitted. It drew attention to the need for a Crime Commission and it
identified a number of deficiences in the unproclaimed Act in addition to those which I had identified. I pressed the
Government to give the matter further consideration. I was met with the answer that the immediate proclamation of the Act was envisaged and an invitation to accept the position of Chairman, or at least as one of the Commissioners, if not
Chairman. This was put during meetings I had with the new
Attorney-General, Senator Evans. In a letter of 25 March
1983 from me to the Prime Minister I reported upon those
discussions and my answer:
Volume l
"In my recent letter to you dated 15
March I indicated various questions which needed to be considered in terms of my
Commission and which could be a useful
basis of discussion.
I had such a discussion with the
Attorney-General last Monday. I have
since had two telephone discussions with Hr. Andrew Menzies, Deputy Secretary of the Attorney-General's Department, the · most recent of which was yesterday
afternoon. I am extremely disturbed by the
implications of those discussions. At the meeting with the Attorney-General it became clear that rather than contemplating an indepth consideration of
the Crimes Commiss ion Act, it wa s
intended with considerable expedition to proceed with the proclamation of the
existing Act. I was asked whether I
would be prepared to take on the job of
Commissioner. I said I was not. I will
return to the reasons for my attitude a
little later.
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Yesterday I was informed by Mr. Menzies
that the new suggestion was that the
Commission be set up with Sir Edward
Williams as Chairman, myself as number
two member, and Professor Ronald
Sackville as the third member. I
explained to Mr. Menzies that I had
already informed Sir Edward Williams that I was not prepared to accept a position
as a member of the Commission which was
in my view not able to do the job
effectively. Yesterday I sent to you a draft copy of
lectures prepared by Mr. Douglas Meagher Q. C. on the problems of organised crime
and the appropriate methods to deal with it. These illuminating papers outline
the many and varied matters which need
thorough and lengthy consideration before a final decision as to a permanent
structure is made. Although prepared
without access to the Report of Mr.
Justice Stewart and without knowledge of its contents that Report is in
substantial agreement as to the
deficiencies of the current proposals. The present Crime Commission Act is the
product of hasty consideration. It would be a great tragedy for this country if
the opportunity now presented to your
Government to consider these matters in depth with an input from a wide range of
interests in the community was not taken.
Volume 1
May I therefore urge you not to proclaim
this Act in haste. In its present form
it will not achieve the purpose for which it was intended. On a personal note let me refer to the
offer made to me to head the Commission.
I explained to the Attorney that I was
not prepared to accept this position.
The fact is that my present job has been
extraordinarly demanding and has had
considerable effects on my personal
life. My first preference is to return
to practice at the Bar from which I have
already been absent for 2 1/2 years. To
be absent for a further 2-4 years would
make more difficult that return. The
Attorney then suggested I would be
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assured of a Federal Judicial
appointment. This is an outrageous
suggestion. Quite apart from the fact
that I do not presently have judicial
ambitions having rejected offers in the past, it is quite wrong to regard
appointments to the Bench as a convenient method of solving other problems. One
such unfortunate appointment has already been made. But more significantly any
person holding the position of Chairman of a Crimes Commission must do so
completely independent of any hope or
promise which may be based on his
performance in his job. It was put to me on the basis that I
would have to accept a much lower
salary. Even if I was offered the
position of Crime Commissioner of a
properly set up Commission on a
barrister's fee level I would have to
consider seriously whether I would wish to accept the position. The level of
salary is not a major factor. I would
not be prepared to lend my name to the
present Commission because I am convinced it cannot do the job it is supposed to
do."
(Letter Commissioner to Prime Minister 25 March 1983)
9.014 At this time my senior assisting counsel had
been invited to deliver papers at the ANZAAS Conference in Perth. I urged him to take the opportunity to do so
believing that the new Government as much as the old desired public debate on the proper response to the problem of
organised crime. The papers were delivered to the Prime
Minister before they were published and every indication was given that publication of such matters was desired.
Officers of the Department of the Special Minister of State attended their delivery and there was much public debate
stimulated by them. Amongst other things those papers
debated the proper role for a Crime Commission, and the
powers that were required for it to do its job effectively.
A copy of those papers is to be found in Appendix 1-G. This
led to acceptance that there should be more intensive
consideration given to the nature of the Crime Commission.
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There had been no ·opportunity for those groups concerned with civil liberties to voice their opinion; nor for others in the community to have their say. Though my views
differed markedly from many of these groups, I was firmly of the opinion that debate was required. To that point the
debate had been marked by a most inadequate understanding of the issues involved. The response was a National Crime
Seminar held in the Senate Chamber at the end of July 1983.
I attended, together with my senior assisting counsel, and participated in the debate. Opportunity was given and taken for all manner of views to be expressed. Both I and my
senior assisting counsel made it clear that neither of us
was available for appointment to the new Authority no matter what shape it may take.
9.015 At this time I delivered my Fifth Interim
Report. I took the opportunity to express further views on
matters relating to the proposed National Crime Commission. Those views were published just prior to the Crime Seminar taking place and provided a further contribution to the
debate.
9.016 In the meantime the work of my Commission was
continuing. On 25 April 1983 the Prime Minister, the
Special Minister of State and the Attorney-General attended at my Commission 1 s premises where they were given a short
briefing of some two bours' duration by my senior assisting counsel on the operations of the Commission. This briefing was directed at the operations, as distinct from the
operational techniques, which required much longer to
impart. At the close of that briefing there was further
discussion between the Prime Minister and me as to the
location of the new Crime Commission, the Prime Minister
agreeing it should not be located in Canberra. The Prime
Minister made clear the Government's resolve for there to be a Crime Commission, and again publicly affirmed that
intention at the Seminar in the Senate Chamber in July. He
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reques t ed that the work of my Commission should focus upon
drug trafficking , and should proceed unt il the new Crime
Commi s sion was establi shed.
9.017 With these clear declarations by the
Go vernment, planning and operations within my Commission
were conducted on the basis that they would be taken over by the new Authority. Thus money was expended on the
deve lopment of computer systems, and operations were
unde rtaken, which otherwise would not have been. For
example, money was expended on the development of computer app l i cations with an eye to the future. Major operations
were undertaken which on any rational assessment were
unlikely to be completed during the life of my Commission; but i n respect of which it was confidently felt the new
Authority would see through to completion. Further it was anticipated that no matter how large an office might be
es t a blished in Melbourne, another office would be required in Sydney. The most likely candidate for that office was
t hat of the Stewart Commission. Accordingly it was invited to come on to the same data base as that of the Commission
and to adopt its systems. The junior staff of that
Co mmi s sion attended at my premises and were trained in the
computer systems. By that time the Stewart Commission was enquiring into Nugan Hand, and the use of the data base was
val uable because some of the Nugan Hand material I had
collected on one of my visits to the Colony of Hong Kong had
b e e n placed upon it.
9 .018 By August 1 983 the Government announced it
intended to enact new legislation creating a new body to be known as the National Crime Authority which was to commence operations on 1 January 1984. Hy Commission was due to
expire on 31 December 1983. This did not provide for the
necessary overlap if my systems and operations were to be
transferred to it effectively. On 10 August 1983 I wrote to
t h e Prime Minister drawing attention to the discrepancy in
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dates and seeking guidance. I pointed out that if there
were no handover I would need time to write a report which
would take some 3 months. Thus my investigations would
cease at the end of September. There would be a hiatus;
momentum would be lost and no effective transition would occur. In the letter I said:
Volume 1
11 As the life of this Commission will
terminate on 31 December this year it is
necessary that I should raise with you
certain matters on which I need advice
from Government so that future planning for the Commission can be done. The announced policy of Government is
that a National Crimes Commission is to
be established to commence operation on l January 1984. It is stated that this
body will take over my current
investigations, staff and premises.
Although a good deal of work, planning
and training will be needed, this
handover can be achieved if the new body
has adequate powers to continue my
investigations including access to Income Tax records.
However I cannot overlook the possibility that as a result of discussions at the
recent National Crime Seminar there may be a different kind of body set up in
collaboration with State Governments. It is of course for Government to decide
the power and structure of any permanent body set up to deal with the problems of
organised crime. !:!X concern is to see
that the over of my
investigations is done in a way which
reflects the nature of this new
organisation. For this reason the course I follow in
the last three months of the Commission
will be determined absolutely by the
decision to be taken by Government. Let
me explain by way of illustration.
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Scenario 1
The Government decides to set up a
National Crimes Commission based in
Melbourne with appropriate powers
including access to tax records. In this
case the new body would take over current investigations, staff and premises. A
period of training for new persons coming in would be needed. This would require a
minimum of two months, preferably three. During the last 6-8 weeks I would be
primarly concerned with the preparation of my final report. The handover though
difficult could be done efficiently. Scenario 2
The Government decides to set up a
National Intelligence Agency along the lines of the Victorian proposal. Such an agency would not have the powers to
continue my work. My task would then be
to finalise my Commission in the
traditional manner, return documents, cease the calling of evidence and prepare a final report. A very real question of
principle would arise as to what should
be done about documents acquired by me
pursuant to Royal Commission powers which could not be acquired by the new body
without these powers; also what would be done about the database I have
developed. Since the drive behind the
Victorian proposal reflects a reluctance to interfere with traditional liberties I w6uld have to take into account these
matters in deciding my attitude. The last three months of my Commission
would be devoted to these tasks. What
would happen to my staff depends on the
nature and location of the new body. If
it is not to be in Melbourne then any
useful relationship between it and my
Commission will be enormously difficult.
I mention these matters so that it can be
appreciated last three
entirely decision as
that my ability to plan the
months of my Commission is
dependent upon Government
to the form of the new body.
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Unless that decision is made at the
latest by the end of September I face an
almost impossible task of closing down this operation in any efficient and
sensible fashion.
All of the investigations currently being pursued by my staff have drug
implications. It is not possible for
those investigations to be completed by 31 December 1983 ...
Accordingly at the end of December I will have many very large uncompleted
investigations. The question arises as to what I should do with them. If there
is to be no body with the coercive power
to compel the production of banking and
legal records, no access to taxation
records and no ability to examine
witnesses, then there is no point in
handing the matters to someone else.
They will not be able to pursue the
investigations. They will be powerless to do so.
If there is a body with the necessary
powers then I may hand the matters over
to the great benefit of the community. Thus the nature of my final report
depends upon the existence or otherwise of a suitably empowered Authority to
continue the investigations. If it
exists my report will be comparatively
short recording the transfer. If it does
not exist my report will still be short,
for there will be little point in doing
more than indicating, as I have several
times, the nature and extent of organised crime."
(Letter Commissioner to Prime Minister 10 August, 1983)
I wrote again to the Prime Minister on 17
October 1983 about other matters. I received a response
from the Prime Minister on 26 October 1983. So far as it
related to the matter which is the subject of this Chapter
he said:
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"Following the Crime Commission
conference in July the Commonwealth and the States have been discussing the form of a possible National Crime Authority. A proposal developed in these disussions
is now under consideration by Governments. My Government's intention, subject to
Caucus approval on 1 November is to
introduce as soon as possible in November legislation for a National Crime
Authority with the aim of final passage
in the present Budget Sittings. The
Authority will have as its primary
function the conduct of investigations into suspected criminal activities
pursuant to references given by
Governments with the intention amongst other objectives of assembling evidence for the purpose of prosecutions and will have appropriate coercive powers as
necessary to pursue such references.
The Government recognises that while it would prefer the new Authority to be
established and in a position to take
over from your Commission on 1 January
1984, time will probably not permit the
formal establishment of the Authority
until 1 March and its full operational
effectiveness until some little time
after that. Bearing in mind the need for
an 11 overlap 11 transitional period during which your Commission can impart its
expertise and transfer its staff and
material to the new body, the Government accordingly has in mind, subject to your agreement and to further review if
circumstances make this appropriate,
extending your Commission to 30 April
1984.
The Government is proceeding in this
respect on the assumption that the
Commission will have completed its
essential work on that part of its
reference which directly concerns the
Ship Painters and Dockers Union by the
end of this year and that it will have
furnished its final report to Governments not later than the end of February 1984.
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We would envisage the transition process as commencing informally from the
beginning of January and formally from
the establishment of the new Authority on 1 March. During the whole of the period
between 1 January and 30 April the
Government would want your Commission to concentrate its primary attention on the process of communicating its expertise, transferring personnel and material to
the new Authority, making arrangements for on-going enquiries, and generally
assisting the Authority to take over its
role. While this is a broad outline of the
Government's wishes there will obviously be a need for discussion on details and I
have asked the Attorney-General and the Special Minister of State to arrange a
meeting with you to discuss in more
detail the proposed arrangements once the legislation has been introduced into the Parliament. In particular there will
need to be discussions on the passing on
of the criminal intelligence which the
Commission has assembled, conservation of the techniques and the expertise
developed and the arrangements for
handling outstanding enquiries."
(Letter Prime Minister to Commissioner 26 October 1983)
9. 020 The course proposed by this letter departed
radically from that suggested earlier, and raised
difficulties. I believed it impossible to submit a final
report, together with the return of my letters patent, and then continue as if I were still in office. The period
allowed for the transition was far shorter than that which I had previously advised was necessary. I did not regard my
earlier advice as being in error, and subsequent events have not shown it to be so. Accordingly I responded to the Prime
Minister's letter on 2 November 1983:
Volume 1 -225- Chapter 9
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"I would be less than frank if I did not
indicate to you my view that (your
letter) does not seem to meet the
problems outlined in my letter of 10
August which came at the end of a series
of letters commencing on 29 June 1982. In my letter of 10 August I indicated I
needed a minimum of two months,
preferably three, to train a new
Commission and hand over the documents
and the database. After that was done I
needed a minimum of---o::1f weeks to make a
final report. That is a total of five
months. Those estimates were based on
the assumption that the new Commission
would have like powers and at ieast as
wide a range of enquiries as my own
Commission.
At the moment apart from perusal of
repo:ts in the media I am ignorant of the
prec1se range of powers and functions of the new Commission. However, if what I
read is correct it seems clear that its
powers will be significantly more limited than mine; and the ambit of its
investigations would depend upon those which are referred by Government. Indeed it may have no areas to investigate until
such reference is made.
The result is that I cannot simply hand
over the database I have assembled to a
new body. For example the taxation
records I have collected have not been
collected pursuant to a Court order, and unless and until the new Commission
obtains a Court order and there is an
amendment to Section 16 of the Income Tax Amendment Act I am required by law to
return the records to the Australian
Taxation Office. The taxation records
held by me are very considerable. To
extract them, remove the data collated
from them from the computer system and
physically return the material will take some time.
The removal of the taxation records is
the least of the problems. If the new
Commission cannot compel evidence when such evidence incriminates, if it is
restricted by being denied access to
documents that incriminate and if it is
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limited in the matters it may
investigate, then I should not hand over
material gathered which would lie outside its authority. A great deal of the
material I hold is in this category. It
will be necessary to consider each item
and make a rational a decision as I can;
this will probably entail allowing
submissions to be made by the parties who have supplied such material. My earlier estimates of the time required for
handover made no allowance for these
procedures. I estimate that this process may take some two months after the new
Commission has had some matters referred to it (so that material relevant to its
investigations may be determined). My current investigations cover all
States and range over many areas of
criminal activity. Ideally I should be
able to act on the basis that all these
matters will be taken over by the new
Commission. Perhaps there will be
objections from some States as to the
referral of some of these matters. They
will need to know the full extent of my
investigations before they can decide
this matter. These questions are
unlikely to be decided quickly; but I
will have to make my decisions on the
basis of what has been referred at the
beginning of the handover period. The
schedule you outline in your letter
suggests the whole of the period l
January to 30 April 1984 be concerned
with handover and training. If I assume
that on l January there is a referral of
matters to be investigated by the new
body, this will still be quite
insufficient time to attend to the
matters I have described above, let alone address the very considerable task of
training the new officers. January is a
holiday period. It may be that the newly
appointed officers will take up their
positions and attend from ·that day on but I would think it unlikely. It is
certainly not something I would ask of my staff who have worked hard and long
during this year. At best matters would
get under way in the third week of
January. At the other e nd of your period
Volume 1 -227- Chapter . 9
Volume 1
falls Easter. The
period thus shrinks adequate to attend
suggest .
apparent to three.
to the
Transfer to NCA
four month It is not
matters you
So far as the final report is concerned
it is not possible to attend to matters
of the complexity I have described above, and at the same time to write a final
report. Previously I had assumed that
the new body would take possession of all of my material. I had also assumed it
would follow through my many uncompleted investigations. It seems that it will do
neither of these things. In those circumstances I must write a
very different final report to that which I comtemplated in my earlier discussions with you. It must be written prior to
the return of the documentary material
for it is on that material that it will
be based. It will be, in these
circumstances, a massive task for I must
now write a report on incomplete
investigations, whereas previously I
expected to say no more than that those
investigations were in train and would be completed by the new Commission. Writing a report of a completed investigation is
difficult enough (witness Hamidan). To write it of incomplete investigations is very much more difficult. That task
cannot be done whilst also being engaged in training a new Commission and
determining the fate of the mass of
documentary material I have collected.
Moreover there is the problem of the
present investigations. When I saw you
in April this year you indicated your
wish, with which I concurred, that the
Commission should concentrate on Painter and Docker activity with particular
reference to drugs. That is the course I
have followed. It was necessary for me
to complete some current matters. That
has taken some time. In the case of
Hamidan it required a very large report. In other cases it has required the
briefing of other agencies to take on the partly completed investigations in order to finish them.
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The drug investigations are now
progressing very well. However as you
will understand the techniques used by
the Commission which have to date been
very effective involve a wide-ranging
enquiry circumscribing the main target area so as to understand it completely.
As the investigations proceed increasing obstructions are being and will be
encountered. This is to be expected.
What cannot be expected is that they will be quickly overcome. Even with the
powers of a Royal Commission it is still
very time consuming.
The new Commission cannot usefully be
given these investigations for it is to
be denied the powers needed to do them.
I cannot complete them within the time
you allow. On the other hand at this
moment they are at a critical point and
it would be contrary to the public
interest to stop. That is likely to
remain the case for the next few months.
It is only those who have experienced
investigations such as these who fully
appreciate the time they take and the
necessity for persistence. Those who are the targets have much to lose and a great
deal of money to employ in their
defence. I find it difficult to believe
that you would wish this fight to be
abandoned at this point; but if that is
the decision of the Government, so be it.
For these reasons I expressed the opinion that the time-table you give in your
letter is not only unworkable but
contrary to the public interest. If I
act on the reporting date you suggest
then I should immediately stop all
investigations and start writing. In
that manner I may get the report in by
the end of February, though it will
necessarily be far from complete and
therefore not satisfactory. It is not
likely such a report will serve many
useful purposes in the Government of our country. In that period I could not
allow any time for training the new
Commission or determining what should be handed over.
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At the time of submitting my final report
I must return my letters patent. At that
stage I become functus officio. If that
happens at the end of February then I
will not have given any attention to the
return of the documents. Certainly I
will not then be in a position (by reason
of the absence of power) to make the
appropriate directions. There will be no time for training the new staff.
The situation is not of my making. I
have repeatedly requested over the past 18 months some finality on the future of
the Commission and have asked for it in
adequate time to allow me to do my job
properly. Neither Government has ever
attended to that task with sufficient
appreciation of the lead time required
and this is no exception.
I do not think a sensible decision can be
made as to the date of termination of
this Commission until the new legislation is passed. Having regard to the
expressed intention to have it passed by the end of the budget session, I think I
should · for the time being request a
further extension until June 30 next year on the basis that final consideration can be given to the matter when the
legislation is passed and the new body is .
set up. In many ways I make this request
with a heavy heart. I have now been
doing this job for over three years. I
am anxious to return to private life and
to practise at the Bar but I cannot in
conscious cease the work I am doing
except on a proper basis."
(Letter Commissioner to Prime Minister 2 November, 1983)
On 8 November 1983 the Prime Minister responded to
my letter indicating its contents were being given serious
consideration:
Volume 1
"In the light of your comments the
Government is considering further the
question of the timing of the termination of your Commission.
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In th⬠meantime it is a ppa r e nt that there
is a number of legislative and
administrative issues concerning handover arrangements to the proposed Na t ional
Crime Authority and the disposition o f
material gathered by you r Commission
which need to be addressed without delay .
I suggest that consideration of these
matters would be facilitated if officers of my Department, the Attorney-General ' s Department and the Department of the
Special Minister of State could have
detailed discussion as soon as possible with you or your o fficers. Th ose
discussions could if necessary be
followed by discussions at Ministerial level. (Letter Prime Minister to Commissioner 8 November, 1983)
The discussions took with senior
departmental officers in Melbourne place shor tly a f terwards .
Various ways and means of overcoming the problems I had
raised in my letter about the transfer of records were
discussed. I insisted t hat any arrangements be strictly in accordance with law, and that they did not flout any
principle of law. I advised that the simpl est and most
efficient means would be by a direction by Parliament
reflected in the National Crime Authority Bill that all of my database be transferred to the National Crime Authority.
Such a statutory direction would remove from me any
discretion in the matter and would make the transfer of the material immediately achievable.
9.023 By this time new legislation establ i shing the
National Crime Authority had b een p rese nted to Parl iament. It was again announced t h a t it was intend e d it should take
over my offices, staff , procedur e s and database . On 13
October 1983 I deliver ed the S i r John Barry Memorial Lecture in which I referred to the sys tem r equired for a success fu l
Crime Authority. In his second reading speech i n troducing
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the National Crime Authority Bill to the Senate on 10
November 1983 the Attorney-General referred to this lecture emphasing that the techniques I had spoken about were those required by the new Authority:
Volume 1
11 The Government believes that the
proposed Authority will meet the major
objectives and concerns that have emerged during the public debate on the Crimes
Commission issue over the last six
months, viz:
The need to avoid the fragmentation of
effort in the previous series of ad hoc
Royal Commissions, and to ensure
co-ordination and continuity in the fight against organised crime; the need to
maintain intact the resources, and
expertise of the Costigan Royal
Commission on the Activities of the
Federated Ship Painters and Dockers Union, and to ensure the continuation of its work; the need to take account of
the many fears and concerns expressed
about a permanent criminal investigation body with unlimited terms of reference
and uncontrolled investigative powers; and the need to secure the active
involvement and co-operation of the
States. The question that is most
frequently asked in relation to the
proposal is why is there a need for a new
body and how will its operation differ
from police investigations as they are
now conducted.
Police investigations are concerned
essentially with particular offences
known or reasonably believed to have been committed, with the starting point
usually being the complaint of a victim
or discovery by the police of the results of a crime. By and large, the police
forces of Australia do an excellent job
and there is no question of the Crime
Authority supplanting those organisations .
However, it is of the nature of organised
and sophisticated crime that particular manifestations of that crime
particularly in the areas of drug
importation, corporate fraud and tax
evasion - may not come to the attention
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of the police forces. Activities of this
kind may be so intricately interwoven,
may involve so many jurisdictions and may be so well camouflaged under apparently legitimate ways of doing business that
they may well not cause any one police
force to take notice.
The Costigan Royal Commission has shown that, by following a series of financial
leads in a determined exploratory
fashion, widespread and serious
conspiracies can be uncovered. The
techniques involved, and the need for
them to be deployed by a National
Authority specially designed for the
purpose, have been clearly described by Mr Costigan in a passage of his Sir John
Barry Memorial Lecture delivered on 13
October 1983."
(Senate, Hansard, 10 November 1983, 2492)
Thereafter the Attorney-General referred to a lengthy extract in which I described the requirements for an effective investigation of organised crime, and the manner in which it should be carried out. The second reading
speech left no doubt as to the intentions of the
Government. They received the enthusiastic support of all parties in Parliament, the consequential debate not being directed at this objective but rather as to whether it was
being effectively achieved. Seven days later, again in the Senate, the Attorney-General acknowledged the time it would take to effect a _proper transition. The Opposition had
proposed that the Bill be referred to a Senate Committee to investigate its adequacy, and the Government opposed it. The Attorney-General argued against delay. He said:
Volume 1
"There are problems with further delay in this respect. There are two parts to the
argument. The first part is that we are
unlikely to do much better than the model we have presently reached. The second
part of the argument is that there are
difficulties with further delay in this matter. Let it be appreciated that it is
not a matter of delay in this respect
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merely for one or two months. There is
and will be a very substantial transition period involved, once the legislation is in place, before the new Authority can be effectively on foot, and before the
Costigan Royal Commission on the
Activities of the Federated Ship Painters and Dockers Union can be asked properly
to terminate its formal existence. At
the moment we have assessed that
transition period as taking necessarily something like 4-5 months from the
enactment of this legislation, which we hope will occur some time later this
month or early December . Accordingly, we have indicated to Mr Costigan the current timetable we would be working on; that
is, the enactment of this legislation
either later this month or early
December, the formal creation of the new Authority on 1 March next year, and a
transition period extending both before and after that formal creation for a
couple of months either side, running to a proposed termination date of around 30 April . It may well be that that has to
be further extended because of the
enormous logistic difficulties associated with gearing up the new organisation and putting existing enquiries on the new
footing that they have to be put on in
order to satisfy the terms of this new
legislation. To delay any possible passage of
legislation, as is proposed, until the
end of May or early June - that is, the
end of the autumn session next year
will result in a slippage in this
timetable where the new Authority will
not be able to be put on foot. We cannot
ask people to gear up for something which has no legislative existence or authority behind it. The new Authority will not be
able to be put on foot until well into
the latter part of next year, and
probably not until the end of next year,
applying the sorts of rules of thumb I
have just indicated. We are buying, by
this particular exercise, not just a
month or twos' delay but a very
substantial delay in the effective
establishment of the proposed new
Authority. I do not believe that delay
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can · be justified given the enormous
processes of consultation that have
produced the particular model that is now before us and given also the difficulties and, let us acknowledge it , the dangers
associated with continuing on a de facto Crime Commission basis through the
Costigan Commission."
(Senate, Hansard, 2733-2734) 17 November, 1983,
It will be observed that the Attorney-General acknowledged the difficulties of transition and the requirement of a four or five months period.
9.025 On 17 November 1983 the Senate referred the
Bill to a Senate Committee to investigate the powers granted by it and to report by 30 April 1984. This decision
rendered abortive the discussions between myself and the Government as to my future programme. On 24 November 1983 I wrote to the Acting Prime Minister seeking a longer extension than I had previously sought. I referred to the
discussions with the senior department officers and also to a meeting I had with the Victorian Premier and the Federal
and Victorian Attorneys-General on 12 November 1983. I
reported:
Volume 1
"On Saturday 12 November I met with the
Victorian Premier and the Federal and
Victorian . Attorneys-General. At that
meeting I expressed the view that the
timetable suggested in an earler letter dated 26 October was too tight to be
workable. There were basically two
reasons for this.
Firstly there were some matters which I
could not easily hand over and which I
would need to finish myself. I referred
by way of example to the problem of
extortion in the Port of Adelaide which, to my surprise, has now raised a very
important question of whether there
should be permancy of employment for
painters and dockers. Before the Sweeney Commission the Union had argued
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strenuously against this concept; it has now told me it would like the matter
raised for serious debate. I expect this
question, which was not alive when I last
wrote to the Prime Minister, would add at least a month to my work.
Secondly one of the most important
activities associated with the handover is the training of the new Commissioners and new staff both in the content of the
investigations and in the techniques and systems developed over the last three
years. This of course can be done only
after appointments have been made by the Governments concerned. I think it is not
realistic to believe that this can be
done in the two months originally
suggested.
My discussions with Mr Cain and Senator Evans were based on the belief that the
National Crime Authority Bill would be
passed by the Parliament within a
fortnight. Although I expressed the view that I should request an extension of my
term beyond that which has been currently indicated, it appeared sensible to defer any such decision for a few weeks until
the final content of the legislation was known and so it was agreed.
It is now apparent from events in the
Senate last week that there will be no
Authority set up until at the earliest in
May 1984; a fortiori there wi 11 be no
appointments made and no references to
the new Authority until after that date.
As you know, as did the previous
Government, the uncertainty surrounding the life of the Commission has made
forward planning extremely difficult; by way of example last year my term which
was due to expire on 31 December was not
extended until 25 December. Such
uncertainty is very disruptive to the
work of the Commission and harmful to the morale of the staff. Moreover I am
increasing resistance to my
even with the powers
granted to me under the Royal Commissions Act there is growing tendency to impede
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my work by lengthy court
which I have no doubt are
outlast my term .
proceedings inte nded to
In all the circumstances I feel the
public interest and the demands of my
work require me to request that my
Commission be extended to 31 December
1984.
Unless such an extension is granted it
will not be possible to maintain the
thrust of my investigations or to hand
them over to a new Crime Authority in an
efficient and sensible manner. 11 (Letter Commissioner to Acting Prime Minister 17 November, 1983)
The Victorian Government responded by
accepting my suggestion and extending my term to the end of 1984. The Federal Government did not. By a letter dated 16
December 1983 the Prime Minister wrote:
Volume 1
11 As you will be well aware our position
remains one of concern about the
appropriateness of a public Royal
Commission Inquiry s o far as the ongoing
investigation of organised crime is
concerned; we remain committed to the
establishment as soon as possible of a
National Crime Authority to take over on a continuing basis those of your
investigations which bear upon organised crime more generally than just in
connection with the Federated Ship
Painters and Dockers Union. Although the Senate Committee of Inquiry has injected a degree of uncertainty we
still anticipate being able to legislate to create the new Authority with a
structure and powers not markedly
different from those proposed in the
National Crime Authority Bill 1983 by
June next. Certainly we would wish you
to plan your own activities on the
assumption that such a body will be in
existence by the end of June.
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Against this background the Government would wish you to focus your activity in
the next few months upon:
(a) Concluding those investigations
necessary to produce a report upon
a nd recommendations relating to the Federated Ship Painters and Dockers Union which report we would like to
recei ve on or before 30 April, 1984;
and
(b) preparing for the transition to the
new arrangements by compiling in a
form appropriate for references to
the proposed new National Crime
Authority such other material
relating to organised crime as you
feel requires further investigation. In effect the report referred to in (a)
would be your final report except insofar as it is necessary for you to report on
the trans i tional arrangements referred to in (b).
We would propose on this basis that your
term be extended - on the same terms and
conditions as to fees, staffing and such
like as are currently applicable - to 30
June 1984.
It is of course appreciated that some
further period may be necessary to ensure that the transition proceeds smoothly in terms of the recruitment and training of
personnel, the packaging of appropriate references and the transfer of formal
legal authority, and we will be happy to
discuss this aspect further with you when the legislative situation becomes clearer after the Senate Committee reports. We believe however that your own planning
should proceed on the assumption that the work of your Commission will, for all
purposes other than the bringing to
fruition of transitional arrangements, have concluded by 30 June .''
(Letter Prime Hinister to Commissioner 16 December 1983)
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9.027 Before responding to the Prime Minister's
letter, other events occurred which increased the workload of my staff. The Chairman and Vice-Chairman of the Senate
Committee discussed with my senior assisting counsel in
December 1983 whether he would be willing to identify the
major issues that arose in respect of the National Crime
Authority Bill. He agreed to do so, and in a remarkably short time prepared an extensive document identifying those issues. It is to be found in Appendix 1-H. It was
delivered to the Senate Committee prior to Christmas. At
that time it was indicated by the Chairman and Vice-Chairman that the Senate Committee would be anxious to view the
operational system would be seeking
and techniques of the Commission and
evidence from myself and my assisting
counsel. A letter requesting that assistance was received on 31 January 1984. On 2 February 1984 I wrote to the
Acting Prime Minister and the Premier of Victoria reporting on the request of the Senate Committee and stating that I
proposed to accede to the request unless there was some
objection. No objection was received. At the end of
January the briefing of the members of the Senate Committee in the operational procedures of the Commission was
undertaken by my senior assisting counsel occurred over a number of days. Later both he and I gave evidence to the
Senate Committee.
9.028 On 3 February 1984 I responded to the Prime
Minister's letter of 16 December, indicating it was not
possible to provide the report requested by 30 April.
Although the response is lengthy, I set it out as without it
a disjointed view may be formed of matters consequent upon it:
Volume l
"In previous correspondence and in
interim reports I have explained the serious situation in respect of
activities of organised crime
Australia. In making such reports I not been alone. From the personal
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my
very the in
have
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conversations I have had with the Prime
Minister and indeed from the public
statements of the Government it has been clear to me that my description of the
situation has been accepted by both your Government and the Victorian Government and for that matter is accepted by all
poli tical parties.
The investigations of the Commission as you know are not of minor character.
They are extraordinarily complex
requiring the examination of hundreds of thousa nds of documents and taking a
lengthy time to complete. Following the
Prime Minister's briefing by the
Commission on 25 April 1983 and his
desire that the Commission concentrate on drug trafficking, those investigations have been direc t ed at what is perhaps the
most difficult area of all, the
investigation of the financing of major drug importations and distributions in
Australia. It was not possible to
commence such investigations immediately after 25 April for there were at that
time i ncomplete investigations which I finalised and reported upon in
September. Thus the Commission's
investigations into the areas requested by the Prime Minister are only a few
months old. I am sure the Government did
not expect results within so short a
time; but in any event they have not
been attainable as yet.
The result is that the Commission is
presently involved in major
investigations into the financing of drug trafficking . Vast quantities of
financial documents have been seized and are being examined . That will not be
completed for some time yet. It is to be
followed by detailed analysis and the
examination of witnesses. The work if it is to be done at all will take many
months. The staff of the Commission are
presently fully engaged upon it, subject to matters which are related hereafter.
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There · can be no doubt that this work is
valuable and that it is in the interests
in the public health that it continue.
It is for that reason that I recommended,
and the Federal Government accepted, that there be a Crimes Authority.
Unfortunately such an Authority has not yet come into being. I am constrained to
say that the model proposed by the
present Bill before Parliament,
consideration of which has now been
referred to the Senate Committee, will not have the powers or
capability to continue the work being
done by my staff. In those circumstances even in the event of the Senate Committee approving the Bill in its present form an
Authority capable of continuing this work will not come into being. Thus I am
confronted with a situation not of my
making where I have embarked upon lengthy investigations in which no end is in
sight and no relief is at hand.
In addition to the weight of the
investigations I and my staff have taken on a further burden. Your Government has made plain the intention that the new
Crime Authority bereft of adequate powers and capabilities as it may be will take
over my staff and systems by installing
me in my new premises and authorising the employment at this late hour of
additional staff. I have assumed,
correctly I believe, that I am to train
the new staff so that when the new
Authority comes into being it will have
on hand a trained staff at least at lower
levels. I have accordingly seen to the
training of · the new staff. At some cost
to current investigations a five week
training course for approximately 20
people is being conducted and will be
completed towards the end of this month. As you would expect this does involve the time and attention of some of the leading members of staff and has a limiting
effect on their output of work on
investigations.
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Further, I and my senior counsel have
been called upon by the Senate Committee to explain i n detail the methods and
t echniques developed by the Commission that has been and is being done. It is
time consuming, par ticularly given the
wide nature of the e nquiries of that
Committee and their inability to attend a ll a t the same time (requiring
repetition of b r iefing ses sions which are in t h ems e lve s lengthy and arduous). Once again the investigative work of the
Commis sion is int err up t ed and delayed.
Nevertheless it is in the public interest t hat it be done .
In these circumstances I have found it
difficult to find the means by which I
may meet the request to complete
investigations and produce a report on
the Ship Painters and Dockers Union by 30 April . The report requested would
necessarily be a final report. That
would mean that in the space of three
months (less excluding Easter) I am
e xpected to complete investigations into the distribution of drugs by members of
this Union and write a report. It is
quite impossible. The Union in
Queensland has been the subject of
investigations in this area by both the
Australian Federal Police and the
Queensland Police for the past four years without reaching into the financial
areas. I am a relative "newcomer". Even
given the powers I have I cannot hope to
penetrate the organisation in that State alone in the time allowed. Much less is
it possible to penetrate the organisation in Victoria or New South Wales,
notwithstanding that in Victoria my
Commission has been exam1n1ng the
situation for some months longer than it
has in Queensland. (Both areas are
closely related.) Indeed if I was to write a report and
submit it by the time requested it would
be necessary for me to terminate now all
investigations and confine my report to a statement of the precise position these investigations have reached at this point in time. That would have the effect of
destroying the investigations and the
momentum they have gained. It would
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produce a report without fresh
recommendations for none of the
investigations has reached a point where the need for changes in law or policy has
become apparent. My recommendations
would simply tra verse the same ground as that which would be found in my previous
reports namely that Australia requires a Crimes Authority properly empowered to continue this work on a permanent basis.
Nor is it possible for me to suggest that
30 June would be a more satisfactory
date. If I assume that the new Crimes
Authority is established by June 1984 and that appointments as Commissioners and Counsel are made by early June 1984, then the balance of June will be spent in the
brief ing of those appointees in respect
of current operations (assuming that the new Authority is able to take on those
investigations an a s sumption which
cannot be made under the present
provisions of the Bill). More time would be required to train people at that level
in ·our operational techniques for there are very few people available who have
any experience remotely approaching that necessary to continue those techniques. June would be a very busy month. In fact
neither of those objectives would be
achieved in it. Much less would I have
time to write a report. Nor would I have
time to attend to the necessary work to
return documents and close the Commission. As I have explained previously it takes a
considerable time to brief and train
replacements for myself and my senior
counsel. Once that training is completed and the new Commissioners and Counsel
have taken control, then I will be in a
position and will have the time to write
a report likely to be of some use to the
Government. Until that time is reached
it is beyond my capability (or for that
matter the capability of any other man). In these circumstances I reluctantly
advise that I am quite unable to provide
your Government with a report by the end
of April. For as long as I am
Commissioner the investigations, being of such great importance to the public
health, will continue without abatement. Hopefully before my Commission expires
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there will come into being a Crimes
Authority endowed with powers and
capabilities sufficient to enable my
investigations to be continued by it." (Letter Commissioner to Prime Minister 3 February, 1984)
9.029 The Prime Minister responded to this letter on
27 February 1984. It is to be remembered I had made it
plain, both publicly and privately, that I would not accept a position on the new Authority. My senior assisting
counsel had also announced he would not accept any
position. Thus there had to be a change of personnel at the
very top of the Authority. The transition, in these circumstances, necessarily involved considerable briefing and training. On 27 February 1984 the Prime
Minister responded to my letter:
Volume 1
"I am sorry however to read that you
believe that you are unable to comply
with my request to provide my Government with a report upon and recommendations
relating to the Federated Ship Painters and Dockers Union by 30 April 1984.
While my Government wholeheartedly
recognises the value and effectiveness of your Commission I think that I should
emphasise our determination to establish a National Crime Authority with a
legislative charter more appropriate to the needs of a ongoing organised crime
fighting body and to have the necessary
legislation in place by June next. As
soon as possible thereafter we want the
Authority operating and in a position to take over from your Commission.
It was because of this firm objective
that I asked you to provide by 30 April a
report and recommendations on the matter central to your Inquiry, namely the
Federated Ship Painters and Dockers Union.
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My Government fully appreciates that a
report submitted by that date may not
canvass all aspects of the affairs of
that Union and its members and those
associated with it as fully and in as
much depth as, given unlimited time, you would wish. But of course no Royal
Commission has unlimited time and in
determining the scope and depth of its
report or reports every Royal Commission must have regard to the time available to
it.
In fact your Commission has been in
operation for over 3 years and 4 months
and we believe that it is not
unreasonable to request that within the next 2 months - or at the very latest by
June 1984 we receive from you a report
stating such findings as you have been
able during the period of your
appointment to reach, and such
recommendations as you are able at this
stage to make concerning the Union itself. My Government well appreciates that, at the time of the transition to the
National Crime Authority, you will be
conducting a number of ongoing enquiries and that arrangements will need to be
made with the Authority for the
continuance of those enquiries. You can be assured that you will be consulted
about this as matters develop, and that
my Government will cooperate fully in
ensuring the continuation of those
enquiries.
Volume 1
Certainly it is also appreciated that if
any situation arises in the context of
some area of ongoing investigation where important documentary or oral evidence will be irretrievably lost unless
particular steps are taken, then those
steps should be taken. Having regard to all these matters I must therefore repeat my request that you aim to produce the final report on the Union
itself - if not the activities of all its
members and associates - by 30 April 1984 and that you continue to prepare for
transition to the new Authority by 30
June 1984.
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9.030
Volume l
We look forward
immensely fruitful Commission on the
cooperation."
Transfer to NCA
to concluding the
work of your
basis of amicable
(Letter Prime Minister to Commissioner 27 February, 1984)
I replied to this letter on 5 March 1984:
"I am sure you will understand that I did
not lightly decline the request contained in your letter of 16 December 1983. I
believe that is apparent from my letter
of 3 February.
I think that before I respond to your
recent request I should advise you
briefly of some current investigations. Since the delivery of Interim Report No. 5 I have been concentrating on drug
trafficking and the Union. In doing so I
have applied the same techniques that I
have used in previous areas and on which
I have reported. Those investigations
have proved illuminating. In close
cooperation with the Queensland Police who have done a great deal of work in
this area, many painters and dockers have been identified and their systems of ·
importation and distribution are becoming much clearer. Indeed only last week
arrests were made and more are expected
shortly. These investigations range
beyond Queensland, of course, and go into New South Wales and Victoria. At the
same time I have been pursuing enquiries into the financing of these dealings. It
is in this context I have been looking at
major cash transactions in Brisbane,
Sydney and overseas, involving among
others Mr. Kerry Packer. I have taken
evidence from Mr. Packer both publicly
and in confidential session. His
explanations are quite unsatisfactory, but investigations are not complete and it would be unfair both to him and the
public if these investigations were not completed.
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As you · know from previous correspondence I am anxious both that the new Crime
Authority commence operation as soon as possible and that I hand over to it in an
efficient manner the investigations I am now conducting. Your Government's
determination to establish this body is welcome to me and in the public
interest. My concern is there may be a
lack of continuity in the
investigations. There were some matters arising out of this which I should refer
to: l. The last paragraph of the first page
of your letter seems to infer that I
have been deficient in not supplying reports to Governments. I have
already delivered five Interim
Reports over the last three years
and four months (the most recent of
which was July 1983) each of which
as might be expected dealt with the
Union in one way or another. A
Final Report on the Union would need to deal with the full ambit of my
Commission's work and thus would
truly be a final report. However it
is unlikely to cover new ground so
far as the Union is concerned
although new criminal activities may be described.
Volume l
2. On delivering such a report I would
return my letters patent. There is
authority derivable from my letters patents (Commonwealth or a fortiori Victorian) which would allow me to
remain in office for the purpose of
transition. I can act under the
letters patent only for the purposes of investigation and report. Once
this is done my office is at an end.
3. When I commence to prepare my final
report the full resources of the
Commission would be directed to that task and to the disposal of the
material I have acquired. I would
be compelled to conduct a hearing of the Commission. At that hearing I
would inform all parties that there would be no further evidence. I
would then take submissions as to
documents. My investigations would
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cease at that time. They would be
recommenced at the earliest many
months later and then only if the
new Authority had the powers and
decided to do so. Even if it did
the break in investigations is
likely to be fatal to their success
particularly the current drug
investigations. 4. The only basis on which an efficient
transition can take place is for me
to continue my investigations until the Crime Authority is up and
running. It would then take them
over. I would at that stage write a
comparatively short report. I would not be making findings about current investigations; that would be for
the Crime Authority. If I put in a
Final Report prior to that time any
finding I make would be based on
evidence which is not complete,
which has not been tested by other
parties and which has not been
assisted by submissions from those persons.
I have thought it desirable to mention
these matters so that you and your
Government can understand clearly the
necessary consequences of your request . . Those consequences would be inconsistent with and disastrous to your Government 1 s oft expressed desire to attack
sophisticated crime. This may have not
been made clear in my last letter.''
(Letter Commissioner to Prime Minister 5th March 1984)
9.031 The Senate Committee reported to the Senate
shortly after 30 April 1984, and the National Crime
Authority Bill was debated in Parliament in late May and
early June 1984. It was finally passed after many
amendments. In the course of that debate it was again made
plain that the new National Crime Authority was intended to take over my investigations and to adopt my operational
techniques. Indeed there was considerable discussion of
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t hose techniques· during the debate. It is to be remembered t hat t h e members of the Senate Committee had been fully
briefed upon them, and the Bill was passed by the Senate on
t he understanding that those were to be the techniques
employed by the new Authority.
9.032 On 21 June 1984 I received a further letter
from t he Prime Minister. He noted the passage of the
legisl a tion and the intention that the new Authority would be established on l July:
Volume l
''As agreed with you it is intended that
the Royal Commission continue its
investigations until the establishment of the NCA on l July. During the month of
July the Commission will work together
with the NCA passing on to it information about material held by your Commission a nd techniques employed by you. During
August and September your final report to the Government will be prepared with the r eport being presented to the
Governor-General by 30 September.
I am advised that your Commonwealth
letters patent will need to run to the
date by which your final report is to be
presented. To this end the Government is extending the reporting date of your
Royal Commission to 30 September 1984. Action is in h a nd to obtain formal
approval to this extension from the
Federal Executive Council.
As indicated · by the above arrangements, one of the major objectives in
establishing the NCA is for the Authority to preserve the records and techniques of your Royal Commission and to ensure the
con tinua tion of its work. In particular
it is intended that the first references
f or investigation to the NCA should
cover, inter alia, relevant outstanding matters arising from your enquiries.
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To this end I should be grateful if you
could, as a matter of urgency, give
consideration to what matters are now
In accordance with your
Commission s previous practice, it would be appreciated if those matters which you consider to be amenable to ordinary
police methods could be referred directly to the relevant police forces. As to any
matters then outstanding I should be glad if you would supply information to the
Government in sufficient detail to enable appropriate draft references to be
prepared to be put to the
Inter-Governmental Committee.
References to the Authority are required by the NCA Act to include:
A description of the general nature or the circumstances or allegations constituting the relevant criminal activity; A statement that the relevant
offence is or the relevant offences are or include an offence or
offences against a law of the
Commonwealth, State or Territory but without needing to specify the
particular offence or offences; and the purpose of the investigation.
In preparing the material for Government as to possible references it would be
appreciated if you would address these
matters and in addition supply any other material appropriate to be put to the
Inter-Governmental Committee when it
considers the proposed reference. It
would facilitate the transition between your Commission and the Authority's
investigations if the information
supplied by you on these outstanding
matters could be received a s a matter of
urgency but at the very latest by 13 July.
I should like to place on record again
the Government 1 s gratitude for your work as Royal Commissioner. I should also
like to offer my condolences on your
recent illness. It is of course
unfortunate that it has cut s hort the
time remaining for your enquiries. I
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also appreciate the onerous nature of the task of finalising your work over the
coming months. Nevertheless it is of
p aramount importance that the significant work initiated by your Commission should be continued by the NCA. Your
cooperation in ensuring its smooth
transition to the NCA will be of the
utmost importance in achieving this
obj e ctive. 1
(Letter Prime Minister to Commissioner 2 1 June 1984)
9.033 As I have reported elsewhere, I had been
hospitalised a week after Easter and had remained in
hospital for some weeks. The operations of the Commission
were naturally affected adversely by my lack of attendance . I returned to the Commission at the beginning of June, but
was s till recuperating from my illness.
9.034 The new proposal was one which imposed a
I was to considerable workload upon me and my staff. examine my current operations to determine whether they came within the National Crime Authority Act and was to do so
withi n two weeks. This task was made more difficult by the
unavailabili ty of a copy of the Act until the beginning of
J uly . I was to train the new Commissioners, and the heads
of t he ir operations, in the investigative techniques and
b r ief them on complex operations within the space of one
month. At the date · of receipt of the Prime Minister's
letter I did not know who the new Commissioners would be.
Nevertheless both I and my staff set about doing what we
could to facilitate the establishment of the new Authority. My senior assisting counsel in the absence of a copy of the
Act (he had a copy of Bill but it had been substantially
amended) prepared a list of current operations using his
i mag ination as to the likely criteria. When it became known that Mr. Justice Stewart had been appointed as Chairman that l ist, t ogether with some notes on each of the operations,
wa s forwarded to him.
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9.035 By 22 June 1984, on which day its first
meeting occurred, there had been established Crime Authority Steering Committee, comprising myself, the Secretart of the Department of
Minister of State, Mr A.D. McGaurr and Mr
the National the Chairman, the Special Menzies. The
formation of this committee had been forecast in a letter to me of 13 June 1984 from Mr McGaurr. At that time it was not
proposed I should be on the Committee. There was also to be
established a task force comprising representatives of my Commission as well as from many other departments and from the Stewart Royal Commission. Nevertheless it was
recognised that one of the major objectives of the Authority was to maintain intact the resources and expertise of my
Commission and to ensure the continuation of its work. The shortness of time was also appreciated by Mr. McGaurr:
"Legislation to establish the NCA has
been passed by the Parliament. The
Government has, on several occasions,
stated that it is its firm intention to
have the Authority established by 1 July.
The Government has also stated that one
of the major objectives of the NCA is to
maintain intact the resources and
expertise of your Royal Commission and to ensure the continuation of its work.
Accordingly the Government has as you
know agreed that the month of July will
be a transition period during which your Commission will hand over to the NCA.
As you will no doubt appreciate the task
of establishing the Authority is
considerable and the timing is likely to
prove very tight indeed."
(Letter Mr McGaurr to Commissioner 13 June 1984)
I raised with Government the question whether, if the
Authority was taking over operations, it would not be
desirable that I joined the steering committee. This was
accepted and, by the first meeting on 22 June, 1984,
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I had become a member. During the meeting I emphasised the
necessity for the earliest possible appointment of members so that the limited briefing period of July could be fully
utilized. I raised the need for the appointment of counsel
to conduct the investigations, and drew particular attention to the special skills required at that level. The minutes
included the following warning:
9.036
"Mr Costigan pointed to the urgent need to take
decisions of the
and make necessary clear impact on
appointments because the handover/briefing
programme he had in mind. He was particularly
concerned over the need to put draft references
together in line with the Commonwealth
Government's request, in addition to handing over and writing his report in the period remaining
available to him."
(Minute Steering Committee 22 June 1984)
Subsequently a copy of the Act came to hand.
It was subjected to analysis by my senior assisting counsel to determine the criteria to be satisfied in order for a
matter to constitute a relevant criminal activity within its meaning. A copy of the analysis was forwarded to the newly
appointed Chairman. A further analysis was made to
determine the materi-al required to be placed before the
Inter-Governmental Committee when it considered a proposed An analysis of the Act revealed it was difficult
to meet the several objectives of the Act. On the one hand
the Act required there be no public disclosure likely to
harm reputation. A copy of the reference was to accompany
every summons issued by the Authority. Accordingly if a
reference identified any person by name, there would be a
real likelihood of the reputation of the person so named
Volume l -253- Chapter 9
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being harmed by the mere issue of summonses. Yet not to
name a person in a reference effectively precluded the grant
of a narrow reference. An examination of the debate in
Parliament indicated it was Parliament's wish that
references be of narrow compass and be subject to the
approval of the Inter-Governmental Committee. The purpose was to restrict the operations of the NCA. My senior
assisting counsel and I found it impossible to draft a
narrow reference without identifying by name the people
suspected of the criminal activity. The omission of their names produced a reference of extraordinary width.
9.037 The analysis identifying these problems was
forwarded to the Chairman of the new Authority who in turn
made it available to the advisors of the Attorney-General. They resulted in a meeting taking place between Mr. Andrew Me nzies, then consultant to the Attorney-General, and my
a ssisting counsel and myself. In the course of that meeting
discussion took place as to how the reference could be
drafted. It resulted in it being agreed that my staff would
produce the material identifying the relevant criminal
activities leaving it to a draftsman in the
Attorney-General's Department to resolve the problem
relating to the drafting of a reference.
9.038 In those circumstances counsel assisting me
examined the operations of the Commission for the purpose of identifying "relevant criminal activities" which satisfied the criteria of the Act. The Act was "offence specific",
whereas the operations of my Commission had been "person specific". Thus it was necessary to view the operations in
an entirely different light from that which was the normal practice in the Commission. I explain further the
difficulties of doing this in Volume 2 of this Report . It
took a considerable effort on the part of my assisting
counsel to convert the description of operations into that required by the Act. It was far from a simple task . Not
Volume 1 -254- Chapter 9
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only was there a drafting difficulty; there was also the
problem of ensuring that in a real sense the criteria of the
Act could be satisfied. I was not prepared, nor were
Co unsel p r e pared, to pay mere lip service to that criteria.
I n the end, by a date close to 13 July, the task was
fin i s hed. Some 40 relevant criminal activities were
described. Subsequently and not surprisingly, a further 2 relev a nt criminal a ctivities were identified and described.
9.039 Having produced the material it was necessary
t o d e termine the means authorised by law by which I could
t ransmit the material to the National Crime Authority.
Section 6 P(2A) of the Royal Commissions Act provides that I may transmit information to the NCA only where it relates
11 to a n investigation being conducted'' by it. The NCA was
not conducting any investigation. Accordingly I could not p r o pe rly f orm the opinion that it was. Thus that provision
d i d not permit me to make the transmission requested by the
Pri me Hinister, nor was I assisted by section 56 of the
Na tional Crime Authority Act which had been inserted in
response to my specific request that there be a direction by Parlia ment that my database be made available to the Crime Au t hority.
it did not
Comm i s sion.
t o the NCA
ma terials.
Section 56 was of no use in this situation for
have effect until the termination of my Royal
Even then, it does no more than give a power
to take possession of documents and other
9 . 040 In this situation I requested advice be sought
f rom Sir Maurice Byers Q. C., the former Solicitor-General who was instructed to provide an opinion as to the proper
course o f action to follow. He confirmed my view that
sect i on 6P ( 2A ) did not permit the direct transfer of the
inf or mation; and that section 56 of the National Crime
Au t hority Act was of no value in this transitional period.
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He expressed the opinion that I could rely upon a provision
in section 6P(l) of the Royal Commissions Act by which I
could forward the summaries of the relevant criminal
activities to the Attorney-General even though it was only for the purpose of the Attorney-General forwarding it to the NCA. I had my reservations as to the propriety of that
course; but, upon Sir Maurice Byers advising that he saw
nothing improper in it being done, on 17 July 1984 I handed
the material to the Attorney-General and I understand he
immediately passed it on to the National Crime Authority.
9.041 In a letter dated 18 July 1984 signed by the
Chairman of the National Crime Authority I was informed the Authority had resolved that the material in the matters
forwarded through the Attorney-General was regarded by it as relating to relevant criminal activities, and it resolved to investigate them pursuant to section ll(l)(b) of the
National Crime Authority Act. A copy of the resolution was set out in the letter and was in these terms:
"The Authority resolved that in order
that the Authority might investigate
matters relating to relevant criminal
activities arising out of the material
forwarded to the Authority by the
Commonwealth Attorney-General on the 17 July 1984 Mr. F.X. Costigan Q.C. be
requested to make available to the
Authority for this purpose all documents and other materials that relate to the
Inquiry conducted by him as Royal
Commissioner and that are in his
possession or under his control as Royal Commissioner."
(Resolution Steering Committee 18 July 1984)
9.042 Some of the matters described in the Memoranda
of Relevant Criminal Activities were included only by reason of the operation of section 4(2) of the National Crime
Authority Act. That provision could operate only upon the
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Authority forming the relevant suspicion. My senior
assisting counsel later drew the attention of one of the
members of the Authority to the failure of the resolution to record that the relevant susp1c1on had been formed.
Following that, by a letter dated 23 July 1984 signed by the Chairman of the Authority, I was informed of a subsequent
motion at another meeting of the Authority which was in the following terms:
9.043
11 0n the motion of the Chairman the
Authority resolved that ar1s1ng out of
the material mentioned in paragraph 2 of the Minutes of the Inaugural Meeting of
the Authority, in addition to the matter mentioned in paragraphs 3 and 4 of the
said Minutes, the Authority, pursuant to Section 4(2) of the Act suspects that
offences which are not relevant offences as defined in Section 4(1), may be
directly or indirectly connected with or may be part of a course of activity
involving the commission of a relevant
offence so defined." (Letter Chairman NCA to Commissioner 23 July 1984)
By Section 6P(2A) of the Royal Commissions
Act , where I had obtained information, taken evidence or
r eceived a document that in my opinion related to an
investigation being conducted by the NCA, I might, if in my op inion it were appropriate to do so, communicate the
information to the NCA. In determining whether I should
form the requisite opinions, I took the view that I should
accept the resolutions of the NCA on their face and not
enquire further. Given those resolutions, and understanding as I did that they referred to the 40 matters which, at that
stage, had been forwarded to the NCA, I formed the opinion
that all of the information I held, comprising oral evidence documents and records on computer tape, did relate to
investigations now being conducted by the NCA and it was
appropriate to communicate the information to it. Thus I
authorised the Commissioners of the NCA in their capacity as
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Commissioners to access the database and to inspect the
f iles of the Commission.
9 . 044 It will be observed that this was not achieved
by 13 July 1984 as the Prime Minister had requested.
However it was achieved in the shortest possible time,
having regard to the strictures of law and the extent of the
work involved .
9 . 045 At this point it is appropriate I deal with
the ultimate consequences of the delivery of the relevant criminal activities memoranda. In the issue of the National Ti me s of 14-28 September 1984, and in subsequent issues,
extracts from the memoranda were published with the names of the i ndividuals veiled, but the activities described in such a ma nner as to allow easy recognition of the individuals,
immediately by those concerned, and ultimately by the
public. The memoranda had fallen into the hands of the
Na t i onal Times by an unauthorised disclosure. I do not
believe it was released from the Commission premises, nor by a ny of the Commission staff. A police investigation has yet t o establish how the disclosure occurred.
9. 046 As I have recorded earlier, the task imposed
by the Prime Minister was to facilitate the transfer of the
current investigations to the new Authority. Up until the
passage of the National Crime Authority Act, I had expected to eff ect the transition with a minimum of fuss. I had
ask e d for a statutory direction that my data base be
transferred, and for substantial time for oral briefings of the new staff. Had it been done in this fashion, the
me moranda of relevant criminal activities would not have
been pre pared. Indeed, little more would have been in
writing than the list of 29 matters forwarded directly to
t he Chairman of the Authority upon his appointment. Even
wit h in my Commission there was no document reducing the
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investigations into the terms found in the memoranda later published in the National Times.
9.047 However, disastrous though the experience has
been, it does have the benefit of drawing attention to a
major defect in the scheme of the National Crime Authority Act. It is a defect which, despite lengthy debate, has yet
to be fully recognised.
9.048 All other agencies engaged in law enforcement
commence their investigations without the necessity of first justifying in writing the reason for the investigation.
There is no legal requirement. If there is an operational
requirement, it is usually met by an oral briefing. The
explanation is simple enough. At the commencement of an
investigation very little is known. What is known is
usually mere suspicion. To demand
develop an exposition as to why
investigation at such an early time
that he is
the investigator is initiating an
to compe 1 him to
record his suspicions and construct an elaborate edifice on what may ultimately prove to be an unsound foundation. If
such a case is made in writing, the resulting document
attracts a status far above that intended and what is no
more than suspicion may be converted into concluded views. There is little doubt that was the fate of the memoranda I
transmitted to the Attorney-General. It is a course to be
avoided no matter wha·t the cost may be. I add that there is
little point in railing against the media should it happen
upon such writings and publish them; it is a fact of life
in Australia, and in all other free countries, that there is
a free Press which will publish such matters without regard
for the consequences.
9. 049 The National Crime Authority Act imposes the
task of reducing suspicion and allegation to writing by
law. The Authority is limited to investigating matters
defined as "relevant criminal activities". The definition
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is based upon "circumstances implying" or "any allegations" that offences characterised by the relevant criteria have been committed. An "allegation" is not a conclusion; a
"circumstance implying" is not the same as a circumstance
compelling a conclusion. The degree of satisfaction is
deliberately low, and encompasses matters which, on
investigation, may fail to establish that a relevant offence has been committed. This is understandable. After all, the Authority is required to investigate. If the answer is
known at the commencement, no investigation is necessary.
9.050 Having been compelled to allow as the basis
circumstances uncertain in their inference, and allegations the veracity of which has yet to be tested, the Act provides
that the coercive powers will be granted only upon the
Inter-Governmental Committee being satisfied it is proper so to grant. One aspect of satisfaction is that ordinary
police methods will not suffice. All governments in
Australia at Federal and State levels are invited to
participate. "circumstances" writing and
participants.
It follows, necessarily,
and the "allegations" will be
submitted for consideration
Thus there will come into being
that the
reduced to
· to the
documents
which record, in a formal and no doubt compelling manner,
matters of which the factual basis has yet to be examined ,
let alone tested. These documents will be sent to all of
these governments. Their security cannot be guaranteed. I believed I had ensured security with the passage being
merely from me to the Attorney-General, and then to the
National Crime Authority. Yet it was breached. How much
greater the probability of this where distribution is so
much wider.
9.051 distribution. The problem is not merely that of wide
If a reference is granted, there is a
mandatory requirement imposed by sections l3(2)(a) and
l4(2)(a) that the document containing the reference
Volume l · -260- Chapter 9
"describe the allegations". general nature of the
Thus these untested
Transfer to NCA
circumstances or and inconclusive
circumstances, or possible unfounded allegations, are to be recorded in the reference itself. By section 28(3) a copy
of the document is to be attached to every summons issued.
Th us the document is to be published.
9.052 There will be those who may attach
significance to the words "general nature" found in those
subsections imposing the requirement that the circumstances and allegations be described. I find little comfort in
their inclusion. If the purpose of the requirement is to be
met there must be sufficient particularity given to ensure the "circumstances" and "allegations" are indentifiable and do point to a criminal activity. Thus the requirement
imposes disclosure of matters asserting crimes when, after investigation, it may be found the basis is false. There
will be those who will seize upon these documents, publish them, and allow, perhaps by innuendo, perhaps by blatant
assertion, the identification of those involved in the
criminal activity to become known. The mere service of the summons, calling for production (perhaps) of documents
relating to an individual named within it, will give rise to t he supposition that the named person is the culprit.
9.053 The memoranda of relevant criminal activities
prepared and delive1:ed by my Commission were the result of intensive and deliberate attention to the requirements of the Act in describing relevant criminal activities. They
went no further than was believed necessary, having given
the Act due and proper study. Others will provide the same
degree of particularity, and will act on the same, or
lesser, material (I say lesser since in my case many were
the result of investigations I had conducted). Their
release in tne community will do great harm to individuals as has the release of mine. Yet this Act, born out of an
honest but misguided attempt to protect reputation, by this
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measure has allowed the worst possible situation to arise by which reputations may be destroyed without justification. Had the statutory requirements been otherwise the adverse and unjust consequences which have befallen a number of
people could have been avoided.
9. 054 I recommend that the strategy of the National
Crime Authority Act be changed so as to do away with the
requirement for a reference, and so remove any requirement that at the commencement of an investigation there be
recorded the circumstances implying offences, or allegations of offences. Other techniques for the control of the
Authority are required.
9.055 The transmission of the relevant criminal
activities in documentary form was not the only problem in the transition. Another was the lack of time to conduct
proper briefings. Much has already been debated on this in the national Parliament, and the correspondence between me and others concerning it has been published. It is
unnecessary to add to what I said in that correspondence. I
merely record that operational briefings did not take place, although in the last days of the Commission, whilst this
report was being printed, copied and bound, my senior
instructing counsel was able to give a little time to this
matter.
9.056 As I look back on the last four months of my
Commission, it is plain that it was never feasible to
commence a new Authority as mine ended, and expect it to
continue the operations without there being a substantial hiatus. The methods of operations, the systems, and the
philosophy of the work done by my Commission was far too
removed from the experience of those newly appointed for it to have been reasonable to expect there would be a rapid
assimilation of those matters by them.
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9.057 This had been demonstrated earlier, when Mr
Robert Redlich was appointed as Special Prosecutor at my instigation for the purpose of prosecuting and taking civil actions as matters were investigated by my Commission. It
was some months before he gained a full appreciation of the techniques being employed and the objectives being sought. Those months were marked with misunderstandings on both his and my parts; but within twelve months a much better
understanding, and cooperation, was achieved.
9.058 replaced
Mr Redlich,
by Mr Temby
and Mr Gyles Q.C., were then
Q.C., as Director of Public
Prosecutions. Once again the same problem arose. He,
together with a number of other significant people, lacking any knowledge of the objectives being sought and the means adopted to achieve them, interpreted the role of the
Commission in terms of a police force. He joined others in
the erroneous assumption that the material on which the
Commission acted was 11 inadmissible11 , or to cite a later
description, was 11anecdotal 11 ⢠In fact the material on which I acted could not be of greater substance. It lacked free
admissions of guilt, but otherwise was readily admissible in Courts of law (as many cases have established), and was in
no manner 11anecdotal11 ). Yet such comments were made by Mr
Temby QC and others, notwithstanding their unfamiliarity
with the matters.
9.059 Precisely the same situation arose with the
commencement of duties by the new Commissioners of the Crime Authority. It was only towards the end of the last four
months any real appreciation was formed of the philosophy and techniques developed in my Commission. By this time, of course, the operations of the Commission had been suspended.
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9.060 In this sense, the transition failed. I hope
t hat the techniques will not be lost, and some appreciation
of their value will be gained. The result of the
d iff iculties in transition has been a report of far greater d imensions than I had hoped would be the case. I have
reported at length on the philosophy and techniques. I
deliver with this volume many other volumes detailing the
ext e nt a number of operations have reached, so that they may be continued in the future. In themselves they represent
t he product of that philosophy and those techniques. For
t hat reason I have recommended they remain confidential, at l east until the investigations and legal proceedings which
a re proposed in them have been concluded.
Volume l -264- Chapter 9
CHAPTER 10 - SUMMARY OF RECOMMENDATIONS
Introduction
10.001 I have consolidated in this chapter the
recommendations appearing in the several volumes of my report.
10.002 The recommendations summarised in this chapter
should not be read in isolation from the volume of the report
i n which they are primarily found. This did occur in respect
of the Fifth Interim Report, and led to a number of
misinterpretations which would not have occurred had the
critics known the circumstances in which the recommendations had been made. This should not be allowed to occur.
10.003 Insofar as the confidential volumes are
concerned, my recommendation that they be kept confidential does not mean that I counsel their concealment from those whose advice or action is required to implement the recommendations within them. The relevant confidential volume should be made
available to such people.
10.004 For convenience I have summarised the
recommendations under the headings of the volumes in which they are to be found.
Volume 1 -265- Chapter 10
Recommendations
Volume l - THE WORK OF THE COMMISSION
Perjury
10 .005 I recommend that the provisions of the Royal
Commissions Act 1902-1984 be amended so as to delete the
requirement that the false answer be shown to be "material 11 to the Inquiry.
10 . 006 I recommend that the Royal Commissions Act
1902-1984 be amended so as not to exclude the application of
State laws relating to perjury where a joint Commission is
being conducted.
National Crime Authority
10 . 007 I recommend that the requirement of a reference
being granted by the Inter-Governmental Committee, and its
a ttachment to every summons issued by the Authority, be
repealed, and that there be no control of the Authority based
u pon o r the compilation of "circumstances . implying"
or "allegations" of criminal offences at a time when an inquiry is commencing.
Volume 2 - INVESTIGATORY TECHNIQUES
Systems
10 .008 I recommend that the computer sys terns comprising
the computer tapes, manuals and volume two of this report be
made available to all law enforcement agencies for their use as
they see fit. In particular, I recommend they be provided to
the Victorian Police Force, especially the Bureau of Criminal Intelligence, and other law
sys tems being
Volume l
the Victorian Commissioner of Corporate Affairs enforcement agencies in Victoria. Upon those converted to a fourth generation language, I
-266- Chapter 10
Recommendations
recommend that the Commonwealth of Australia make them freely available to all State police forces and other law enforcement agencies.
10.009 I recommend that the data base (excluding
material derived from taxation records) be made available to the Australian Federal Police and the Victorian Police Force, and to the Victorian Commissioner of Corporate Affairs.
10.010 I recommend that there be a study made of the
appropriate guidelines to be issued to all law enforcement
agencies in respect of the selection of targets for proactive law enforcement, and that upon such guidelines being
determined, they be issued as guidelines by the Ministers
responsible for Police in both the Commonwealth and the State of Victoria for the guidance of their respective police forces.
Civil Proceedings by the Director of Public Prosecutions
10 .Oll I recommend that the Director of Public
Prosecutions be empowered to initiate civil actions on behalf of the Government (Commonwealth) irrespective of the stage
reached in criminal prosecutions.
Volume 3 - THE UNION
10.012 I recommend that there be enacted by agreement
between the Commonwealth and the States laws similar in nature and to the same effect as have been enacted in the United
States of America in the Labor-Management Reporting and
Disclosing Act of 1959, and that otherwise the commission of
extortionate practices by members of trade unions not be the
subject of the ordinary crime of extortion.
10.013 I recommend that the Commonwealth and the States
enact laws prohibiting a person holding office in a union for a period of five years following conviction for an indictable
Volume 1 -267- Chapter 10
Recommendations
offe nce. Such laws should imitate the existi ng provis ions
prohibiting like persons holding office in companies.
10.014 I recommend that there be enacted by agreement
between the Commonwealth and.the States laws similar in nature a nd to the s ame effect as have been enacted in the United
S tat es of Ame rica in the Racketeer and Influenced and Corrupt Organisations Statute.
10 . 015 I recommend the establishment at each port or in
the case o f s mall ports, for each group of ports, of a Port
Security Authority , to act as an intelli gence gathering and
dissem ina tio n agency. Detailed recommendations as to the
func tio ns a nd operations of this Authority are to be found in
Chap t er 5 o f Volume 3 .
Volume 4 - SP BOOKMAKING
10.016 I recommend that the Lotteries Gaming and Betting
Ac t 1966 (Vic) be amended so as to include an offence of
"possess i o n of instruments of betting", and that the powers of arres t be clarified.
10 . 0 17 I recommend that the penalty for i l legal
bookmaki ng be increased so as to provide a fine of $25,000 on a
f irs t offence; $100,000 maximum and $25,000 minimum on a
second c onviction; and $250,000 maximum and $50,000 minimum or three year s ' imprisonment on a third or subsequent conviction.
10.018 I recommend that the Lotteries Gaming and Betting
Ac t 1966 (Vic) be amended so as to make it an offence to give a
fal se na me and address when questioned by the police in respect of illegal g ambling.
10 .019 I recommend that the Lotteries Gaming and Betting
Act 1966 (Vic) be amended so as to render it an offence to
Volume 1 -268- Chapter 10
Recommendations
place a bet with illegal bookmakers, and that the penalty for
doing so be a fine of $25,000.
10.020 I recommend that on conviction of the offence of
illegal bookmaking, the offender be liable to turnover tax (in addition to any other penalty imposed) computed, in the absence of evidence to the contrary, on presumption that the amount of turnover found on che day of the offence was the average daily
turnover for each racing day of the preceding year.
10.021 I recommend that the State of Victoria establish
a small office charged with the responsibility of recovering
turnover tax from those convicted of illegal bookmaking, and that such office work in close association with the members of the Victorian Police charged with enforcement of the gaming laws. I further recommend that the Australian Taxation Office allocate investigators to assist with this office, its function being to recover income tax.
10.022 State
I recommend
Governments to that the there be a reference by
National Crime Authority
investigate illegal bookmaking throughout Australia.
10.023 I recommend that in addition to
all
to
the
investigations of the National Crime Authority the Australian Bureau of Criminal _Intelligence coordinate the gathering of intelligence throughout Australia on the operations of illegal bookmaking and race fixing.
10.024 I recommend that Telecom grant access to law
enforcement agencies to the SCRP machine facility.
Volume 5 - THE DRUG TRADE
10.025 I recommend the establishment of a Taxation
Investigation Tribunal. Details as to its functions and powers are to be found in Volume 5.
Volume 1 -269- Chapter 10
Recommendations
10.026 I recommend the establishment of a Taxation
Iuves tigation Officer. Details as to his functions and powers are to be found in Volume 5.
10.027 I recommend that the drug activities of Barry
be the subject of investigation Crime Authority, and that the
Richard Bull and his associates co- ordinated by the National Authority be granted a reference to conduct its own
investigations. In the event of my recommendation as to a
Taxation Investigation Tribunal being accepted, I recommend that Bull a nd his associates be investigated by that tribunal.
10.028 I recommend that the activities of the solicitor
Robert Cartwright (of the
Queensland) be referred to
appropriate action.
firm Power and Cartwright, Noosa, the Queensland Law Society for
Volume 6 - LOCKYER & McCARTHY and another (name suppressed as
person is awaiting
trial)
10 . 029 I recommend further investigations and the
initiation of criminal proceedings as set out in sub-paragraphs l-3 of paragraph 7.005 of Part l; and sub-paragraphs l-3 of
paragraph 13.011 of Part 2.
10 . 030 I recommend that the office of Justice of the
Peace held by the person the subject of Volume 6B in New South
Wales be terminated.
10.031 I recommend that the activities and affairs of
the persons the subject of Volume 6B be closely monitored by
all relevant law enforcement National Crime Authority, the and Federal Police forces,
Australian enforcement Customs Service,
agencies, and in particular the
Australian Taxation Office, State Corporate Affairs Offices, the Bankruptcy Offices and law
agencies in the United States.
Volume l -270- Chapter 10
Recommendations
10.030 I recommend that the Crimes Act of the
Commonwealth and the State of Victoria be amended to render it an offence to fail to report knowledge or information of
criminal offences where the offence is one punishable by
imprisonment for a period of not less than three years.
10 .031 I recommend that the structure, organisation and
methods of Bankruptcy and Corporate Affairs offices be reviewed t o provide proper equipment and facilities (including the
based information storage/ development of r e trieval/analysis a computer
system) for satisfactorily enforcing the
provisions of their respective Acts.
10 .032 I recommend that the Bankruptcy Act be amended:
Volume l
(a) to provide specifically that the
Official Trustee may investigate
trusts, companies, businesses,
partnerships and other entities
suspected of being financially
associated with the Bankrupt or any
member of his family;
(b) to rectify the apparent anomaly
appearing in Section 269(b) by making it an offence to carry on business in
thebankrupt's own name without
disclosing to the person with whom he deals that he is an undischarf.ed
bankrupt. I recommend the words 'in
his own or" be added after the word
first appearing;
(c) to render it an offence to fail to
disclose to the Registrar in
Bankruptcy or the Official Trustee
all banks, building societies, credit unions, credit and other accounts in any name used by, on behalf or for
the benefit of the bankrupt.
(d) to require the bankrupt to
the Official Trustee
statements of all deposits drawings from such accounts.
-271-
supply to quarterly into and
Chapter 10
Recommendations
Volume 7 - SOME DRUG CONNECTIONS
10 . 033 I recommend a Royal Commission into the
matte rs which are the subject of Volume 7.
Volume 8 - (Name suppressed as person is awaiting trial)
10.034 I recommend that the Building Societies Act
1976 (Vic) be amended:
Volume l
(a) to repeal Section 110;
(b) to widen the definition of director
so that it is in the same terms as
that found in section 5(1) of the
Companies Code; (c) to amend section 24 by insertion of
the word 11alone11 after the words 11board of directors 11 ; (d) to add prov1s1ons disqualifying
certain persons from participating in the management of building societies on grounds similar to those
disqualifying persons from
participating in the management of
companies;
(e) to add provisions by which a Court
may prohibit persons from engaging in the management of building societies.
(f) to add provisions similar to those in
the Securities Industra Act requiring any person who wishe to manage a
building society to be first licensed as a fit and proper person to do so;
(g) to allow the Court to appoint a
Receiver of a building society on the application of the Registrar; (h) to impose upon officers of a building
society the same duties backed by
similar penalties to those found in
sections 228-230 of the Companies
Code.
- 272- Chapter 10
Recommendations
(i) to extend the provisions of section
908 so as to require a bond of
indemnity from officers of building societies in amounts between $500,000 and $1 million, depending upon the
cash flow of the particular society. (j) to amend section 101 so as to relieve
building societies of penalty in the event of default, but to inflict the
penalty on those responsible for its
management.
(k) to extend the provisions so as to
empower the Registrar with access to financial records of the society and of banks and other persons with whom the society deals in like manner to
the powers granted to investigators of the Commissioner of Corporate
Affairs.
(1) to empower the Registrar
hearings, administer the conduct investigations
mal-administration of a
society is suspected.
to conduct oath, and
where
building
10.035 I recommend that the investigative staff of
the office of the Commissioner of Corporate Affairs be
available to the Registrar of Building Societies to assist in the conduct of investigations.
10.036 I recommend that Section 9 of the Bail Act
1977 be amended so that sub-section 2 provides:
Volume 1
"where a surety desires to use real estate
of which he or she is the registered
proprietor as valuable security in any
application for bail of an accused person before the release of the accused person
the following must be provided to the
court by the surety -(a) The certificate of title for the
property which is to be used as the
security or a certificate from the
office of the Registrar of Titles
-273- Chapter 10
Recommendations
attesting to the proprietorship of
the surety;
(b) where any mortgage or other
encumbrance exists over the property, a document from ·the mortgagee or
other person entitled to the ):>enefit of such encumbrance, caveat or
otherwise, describing the nature of the encumbrance and the effect if any on the value of the property;
(c) a document containing a sworn
valuation by an accredited real
estate valuer as at the date on which
the application for bail is made.
Volume 9 - ACTIVITIES OF RAY/PACKER
10 .03 7 I recommend that the matters described in
chapters 2 to 5 be referred to the Director of Public
Prosecutions (Commonwealth) for completion of the
investigation and the initiation of criminal proceedings.
10.038 I recommend the establishment of a joint task
for ce comprising police officers of the Australian Federal Police , the New South Wales Police and the Queensland Police
supported by officers of the Australian Taxation Office and the Corporate Affairs Commission of New South Wales and the Co r porate Affairs Office of Queensland, to investigate the
matters described in chapters 6 to 10.
10 . 03 9 I recommend that the Commonwealth of Australia
advise the New South Wales Government of my recommendation tha t the criminal charges on which Phillip Kingston Carver presently awaits trial should be discontinued.
10 . 040 I recommend that all of these investigations
be under the supervision of the National Crime Authority and that consideration be given to the grant of a reference to
a llow their proper completion.
Volume l -274- Chapter 10
l.ecoJDJDendations
Volume 10 - DEATH OF COOTE
10.041 I recommend that the joint task force referred
to in paragraph 10.026 investigate the circumstances of the death of Ian Percival Coote to prepare evidence to be led at an Inquest into that death, and to explore the other matters referred to in Volume 10.
10.042 I recommend that the selection of the joint
task force recommended in paragraphs 10.026 and 10.029 be in accord with the criteria recommended in paragraph 15.006 of Volume 10.
10.043 I recommend that the Commonwealth of Australia
tranmit to the Government of Queensland Volume 10 of this
Report, and my recommendations that there be an Inquest into the death of Ian Percival Coote.
Volume 11 - HASHISH OIL
10.044 investigate Report.
Volume 1
I recommend that the Australian Federal Police
the matters contained in Volume ll of this
-275- Chapter 10
REFERENCES FOR VOLUME 1
Cos tigan, F .X. (1984) " Organised Crime in a Free Society" in Current Affairs Bulkletin Vol. 60 No. 9 February 1984.
Aus tralia
Redl ich, Robert F. (Special Prosecutor). (1983) Annual Report of the Special Prosecutor 1982-83 (Canberra, AGPS)
(1984)
Annua l Report of the Special Prosecutor 1983-84 (Canberra, AGPS)
Gyles, Q.C . , R.V. (Special Prosecutor). (1983) Report to the Attorney-General for the Year Ended 30 June 1984 (Canberra, AGPS)
--- . (1984)
Report to the Attorney-General for the Year Ended 30 June 1984 (Canberra, AGPS)
International
Commo nwe alth Secretariat. (1983) "M utual Assistance in Criminal Matters : A Commonwealth Perspective" (Paper prepared for Commonwealth Law Ministers' Mee ting , Sri Lanka, February 1983)
Periodicals
Fi nanc i a l Review (Sydney)
Sydney Morning Herald (Sydney)
Volume 1 -276- References