Volume 2 Chapter 5.2 Appendix D

APPENDIX D – KATHERINE JACKSON’S SUBMISSIONS ABOUT THE HSU PROCEEDINGS

1.Katherine Jackson’s written submissions took two important related points. One very ambitious submission was that the matters dealt with by Tracey J should not be dealt with in this Report at all. The other was less ambitious: the Report should reject various submissions of counsel assisting that findings made or chains of reasoning enunciated by Tracey J should be adopted.

2.The points were raised as preliminary points. However, it is more convenient for them to be examined now, after the reader has gained familiarity with the earlier contents of this Chapter.

3.Katherine Jackson assigned seven reasons for her twin submissions.[1] It should be noted that if any one or more were sufficiently strong, it might be necessary to take a similar approach in relation to the findings of Jessup J against Craig Thomson in General Manager of the Fair Work Commission v Thomson (No 3).[2] That is because to some extent the Report treats the findings of Jessup J similarly to the way it treats those of Tracey J.

4.The first reason Katherine Jackson assigned to justify the conclusion that Tracey J’s findings should not be adopted is that it would be wrong, as a matter of principle, to do so. The relevant ‘principle’ had four aspects.

5.The first was that adverse findings against Katherine Jackson should only be made on the basis of evidence before the Commission, not on the basis of the findings of some other body.

6.The second was that ‘in normal circumstances, the findings of one tribunal are not admissible in evidence before another tribunal’. For this the rule in Hollington v F Hewthorn & Co Ltd[3]was cited.

7.The third arises out of counsel assisting’s contention that the evidence before the Commission is consistent with that received by Tracey J. That question is examined as a separate matter later. But Katherine Jackson submitted that if counsel assisting’s contention were correct, there was no need for the Report to adopt Tracey J’s findings. It could simply contain findings made on the basis of the evidence before the Commission.

8.The last aspect of ‘principle’ rested on the contention that to adopt Tracey J’s findings would be ‘fundamentally unfair’ to Katherine Jackson. A similar point is made in relation to others of the seven reasons. This is essentially a ‘rolled up plea’. If all, or a significant selection, of Katherine Jackson’s other arguments were valid, this conclusion might follow. But it has no independent status. Accordingly it is necessary to return to the first three aspects of ‘principle’.

9.The first aspect of ‘principle’ relied on must be rejected. It may be said, without prejudice to Katherine Jackson’s other submissions, that provided the Terms of Reference are adhered to, a Royal Commissionis unfettered in the modes by which it conducts its inquiry.[4] If the inquiry operates by recourse to testimony, the application of the principles underlying the rules of evidence will often enhance reliability and improve procedural fairness. Thus rules like the rule in Browne v Dunn,[5] the rule against double questions, and the rule against confusing questions improve the quality of the evidence and foster fairness to witnesses and persons affected.[6] The inquiry is not constrained, however, by the rules of evidence strictly so called, save for rules that have a higher status than mere rules of evidence (for example, legal professional privilege). Hence there is no objection to the Report of a Royal Commission relying, for example, on reports of other inquiries,[7] on government papers, on learned treatises or on the findings of a court.

10.The second aspect of ‘principle’ relied on concerned the rule in Hollington v F Hewthorn & Co Ltd.[8] Crudely stated, that rule prevents a judgment in one piece of litigation being received in another as evidence of the facts on which it is founded. Evidence lawyers have found that case to be endlessly fascinating ever since it was decided in 1943. But it is not a case which has enjoyed wide favour. It has been reversed by legislation to a greater or lesser degree in numerous jurisdictions of the common law world. It has received judicial criticism. Lord Diplock said it was ‘generally considered to have been wrongly decided’.[9] In several jurisdictions it has not been followed. Its boundaries are not clear.

11.It is therefore difficult to appeal to this unfavoured creature of the common law of evidence in order to persuade a body not bound by the law of evidence to adopt a particular course. The appeal is harder, because the justification for the rule in Hollington v F Hewthorn & Co Ltd is that to receive a judgment as evidence of the facts on which it is founded offends two rules of evidence – the rule against hearsay and the opinion rule. The appeal is harder still in view of the fact that since 1943a great many more exceptions to the hearsay rule have been created by the legislature, and the liberality of the opinion rule has increased.

12.It is sufficient for present purposes, however, to state that the authorities have held that the rule in Hollington v F Hewthorn & Co Ltd does not apply to bodies not bound by the rules of evidence.[10] That is justifiable in principle. The courts determine finally the rights of persons who are parties to litigation. A Royal Commission does not.[11] It is understandable that strict rules of evidence apply in litigation, because of the potentially damaging consequences of litigation to the parties. It is much less understandable that equivalent rules should apply in a Royal Commission, which cannot wreak these consequences.

13.The third aspect of ‘principle’ appealed to by Katherine Jackson is that so far as the evidence before the Royal Commission is identical with that considered by Tracey J, there was no need to adopt his findings: the Royal Commission could rely on the evidence before it. In very large measure the findings in the Report are based on an examination of the evidence which is independent of Tracey J’s findings even though they end up as having the same effect. But it would be foolish to avert attention from the labours of a distinguished Federal Court judge. The findings which flowed from those labours are not binding on this Commission and they have not been treated as binding. If TraceyJ’s conclusions differed from what independent analysis of the evidence, or different evidence, would suggest is appropriate, they would be departed from. But it would not be sensible to ignore the value of their role as confirming other analysis or as establishing particular conclusions independently of other analysis.

14.The second reason why Katherine Jackson submits that the Report should not deal with the matters examined by Tracey J concerns the ‘highly unusual manner in which the trial proceeded before Tracey J’. The features relied on were as follows. Katherine Jackson did not appear at the trial. ‘As a bankrupt, she had no standing to do so.’[12] The evidence led by the HSU was not challenged either by contradictory evidence or by cross-examination. No submissions on behalf of Katherine Jackson were advanced.

15.A short answer to these arguments is that Katherine Jackson is the authoress of her own misfortunes in this respect.

16.A longer answer is that Katherine Jackson’s arguments are seriously misleading, both in fact and law.

17.There is a judgment of Tracey J’s dealing with Katherine Jackson’s bankruptcy.[13] It reveals the following history. After many adjournments, the trial was fixed to begin on 29 June 2015. On that day counsel for Katherine Jackson advised the Court that on 25 June 2015 she had filed a debtor’s petition for bankruptcy under s 55 of the Bankruptcy Act 1966 (Cth). Paul Leroy was appointed trustee of her estate. Counsel for the HSU had no notice of the bankruptcy. He requested an adjournment. Section 58(3) provides:

Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

(a)to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or

(b)except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

18.In due course counsel for the HSU applied for leave to take a fresh step in the proceedings against Katherine Jackson pursuant to s 58(3)(b). That application was served on Katherine Jackson. When the application was heard, the trustee in bankruptcy appeared. Katherine Jackson did not. The reasons why Tracey J granted the HSU the leave it desired were put thus:[14]

Many complex issues are raised in the present proceedings. The trustee has candidly advised the Court that he lacks the resources to deal with such complex claims were they to be advanced by the Union as a creditor in Ms Jackson’s bankrupt estate and the Union then sought to prove those claims. The trustee has not opposed the application.

It seems to me that, given the fact that the trial has been fixed for hearing and all necessary preparations made for that hearing, and having regard to the complexity of the issues involved, it is preferable that the Court resolve those issues rather than that they fall for determination by an under-resourced trustee in the course of his dealing with Ms Jackson’s estate. There is no suggestion that the Union is seeking to gain some advantage over Ms Jackson’s other creditors.

19.The consequence of Katherine Jackson’s petition was that, by operation of s 58(1)(a) of the Bankruptcy Act, she lacked standing to defend.[15] There is uncertainty as to whether claims for compensation arising from contravention of the Corporations Act 2001 (Cth), s 1317H, and similar enactments, on which the Health Services Union was relying, were claims in respect of a provable debt. To the extent that they were not, Katherine Jackson may have had standing to appear. Even to the extent that they were, it was open to Katherine Jackson to seek leave to appear.[16] But Katherine Jackson did not seek leave to appear. Nor did the trustee. In short, Katherine Jackson did not seek to rely on any standing to appear which she may have had or may have been able to obtain.

20.So far as Katherine Jackson’s submissions suggest that there was no material contradicting the HSU’s claims, they are wrong. Before her bankruptcy, Katherine Jackson had filed an unusually detailed defence. Omitting formal parts, it comprised 28 closely-typed pages. It set her position out comprehensively. It was incomparably more useful than most defences prepared by trained lawyers. It will have alerted TraceyJ to what Katherine Jackson’s approach was to every allegation against her. She also filed a very detailed affidavit, on which Tracey J relied.[17] Its main part was 150 pages in length, with a further 35 pages referring to numerous documents. And the HSU relied heavily on a mass of documentary evidence, which speaks for itself, one way or the other.

21.Finally, so far as Katherine Jackson complains about incompleteness in the evidence before Tracey J, an enormous amount of testimonial evidence from her and other witnesses, and an enormous amount of documentary evidence, has been tendered to the Commission. That material includes two long witness statements by her and much transcript evidence for the five days she spent in the witness box (18-19 June 2014, 30 July 2014 and 28-29 August 2014). If Katherine Jackson had thought there was some gap in it capable of being filled, she could have taken advantage of the opportunity given by Practice Direction 10 to bring forward evidence concerning the matters dealt with in counsel assisting’s written submissions in chief, including the findings of Tracey J. For those submissions made plain the extent of counsel assisting’s invitation for Tracey J’s findings to be taken up. She did not act on that opportunity.

22.It should also be noted that relatively little testimonial evidence appears to have been tendered to Tracey J. The principal function of the affidavit evidence seems to have been to annex or exhibit documents.

23.Katherine Jackson’s third reason for contending that the Report should not deal with matters before Tracey J was that the vast bulk of the evidence before the Commission was not before Tracey J, and some of it contradicted what was before him. She coupled this with a stress on the submission that she had been prejudiced because most documentary material either had been deliberately destroyed by her opponents, as she alleged, or had simply been lost. She gave as instances some BCOM minutes, an exercise book recording NHDA transactions, and primary documents underlying credit card transactions. She complained that Tracey J relied on the absence of evidence without fully taking into account the prejudicial consequences to her of its absence. She also submitted that evidence before the Commission supporting the conclusion that a resolution as passed by BCOM establishing the NHDA account and authorising Katherine Jackson to operate it was not before Tracey J. This led him to doubt that it had been passed.

24.There is no doubt that in some measure the evidence before the Commission differed from that before Tracey J. But the findings of Tracey J are not being relied on blindly in the Report. Whether they are accepted depends on a review of all the evidence before the Commission. Further, the Report rests on a full awareness of the problems caused by the destruction or loss of the documents. So far as the 2004 Resolution is concerned, Katherine Jackson’s submissions create a false issue. Whether it was passed or not, both Tracey J in his reasons for judgment[18] and counsel assisting in their submissions[19] operate on the assumption that it was passed. The same is true of the Report.[20] Accordingly, that example of prejudice supposedly ignored by Tracey J falls flat.

25.Katherine Jackson’s fourth reason is that Tracey J’s orders are under appeal.

26.An important reason why the Interim Report did not deal with the matters which were the subject of the HSU Proceedings before Tracey J is that to have done so might have had had a tendency to interfere with the administration of justice by prejudicing the civil proceedings.[21] Where criminal cases are tried by jury, the public investigation conducted by a Royal Commission and the published parts of its Report may influence unduly the approach of the trier of fact – the jury. That is not a problem with the judge in civil proceedings. Judges, particularly in superior courts of record like the Federal Court of Australia, are made of quite stern stuff. Nor is the problem one of contempt of court. It may be, and often will be, a contempt of court to make findings about conduct which is the subject of pending criminal proceedings before those criminal proceedings have ended. However, a Royal Commission may carry out investigations and make findings about issues which arise in pending civil proceedings not involving jury trials provided that the conduct of the Royal Commission is not prejudicial to them. By ‘prejudice’ is meant ‘a substantial risk of serious injustice’.[22] The following examples of prejudice have been given by Gibbs CJ:[23]

Conducting the inquiry in public in such a way as “to deter witnesses from coming forward to give evidence” in the civil proceedings, or behaving in such a way as to “influence the evidence that the witnesses will give”.

An example given by Mason J was conduct by the Commission putting pressure on a party to compromise or abandon its case.[24] It is not enough to establish prejudice that there is a risk of inconsistent findings.

27.However, the risk of prejudicing the trial of civil proceedings, which can be a real risk, is one thing. The risk of prejudicing the present appeal is quite another. Katherine Jackson’s submissions point to no actual risk. The evidence is complete. New evidence is hardly ever received on appeals. The risks referred to by Gibbs CJ and Mason J do not exist in relation to the appeal.

28.Katherine Jackson’s fifth reason is that it would be otiose for the Report to include reliance on Tracey J’s findings. She contended that she has suffered enough from exposing the wrongs of Michael Williamson and Craig Thomson. Her career is ruined. Her health is affected. She is an undischarged bankrupt. She is unemployable. She may be prosecuted. Hence she submitted that there is no point in adopting Tracey J’s adverse findings.

29.Words are cheap. The cheapest words are words of pity. But Katherine Jackson’s plight is undoubtedly sad. Yet her arguments prove too much. They are arguments for not dealing with her in the Report at all. But the HSU and her behaviour in relation to it are central to the Terms of Reference. The Report must deal with it. In doing so, to take account of Tracey J’s findings in the way the Report does is sensible.

30.Katherine Jackson’s sixth reason boils down to a claim that it was right for the Interim Report not to deal with the allegations against her because of the impending proceedings before Tracey J, and that it remains right. That is a non sequitur. The circumstances that made it right not to deal with those allegations last year no longer exist, because the proceedings before Tracey J are over. Accordingly there is no reason not to deal the allegations this year. Katherine Jackson contended that there is a risk of inconsistent findings as between Tracey J’s reasons for judgment and the Report. In litigation that consideration matters. It does not matter, however, if there are differences between a judge’s conclusions and the conclusions of a Royal Commission Report. In any event, there are no inconsistencies in this instance.