Most Read Contributor in New Zealand, September 2016
Most specialist regulators have broad powers to compel
attendance at interviews and the production of documents. But there
are limits to when and how such orders can be issued.
A recent judgment from Australia sheds some light on
this issue, while also confirming how difficult it is to mount a
legal challenge against the exercise of these powers by a
The facts of A v Independent Commission Against Corruption
 NSWCA 414 are a little unclear as the judgment is
subject to broad suppression orders. It appears that the ICAC
issued a summons to A Co to appear and produce documents. The
request related to the content of an email account and electronic
calendar operated by or on behalf of a political journalist who had
some connection with A Co. The notice made no reference to the
nature of the allegation or complaint which was being investigated
by ICAC, or the purpose for which the documents were sought.
A Co mounted a broad ranging attack on the notice, arguing that
it was invalid because it was unrelated to an existing allegation
or complaint. Various administrative law challenges were also
brought against the decision to issue the notice.
A Co succeeded in establishing that, although the ICAC Act did
not specifically require that a notice must relate to the purposes
of an investigation, this requirement should be read into the Act
because the power to compel the production of documents was
incidental to the power to investigate.
However the Court found that investigative relevance was an
extended concept and that it was not "self-evident" that
the very broad request which ICAC had issued was not for the
purposes of an investigation. It therefore ruled that the notice
was valid. It also rejected the administrative law arguments.
Take-outs for the New Zealand context
So what does this decision mean for the person facing an onerous
request for documentation from a New Zealand regulator?
Firstly, legal challenges will be hard to maintain. This is
reinforced in the case of the FMA because, under section 57 of the
Financial Markets Authority Act 2011, a notice must be complied
with pending legal challenge to its validity unless the applicant
succeeds in getting interim orders. Section 57 supplements the High
Court's normal grounds for interim orders with some additional
requirements of which applicants will need to satisfy the
Secondly, the courts will be loath to second guess a claim by a
regulator that documents are needed for the purposes of an
"[T]he evaluation of probabilities concerning
the usefulness of the information is, within limits, for the
investigator, and certainly not for the persons from whom
disclosure is sought".
It is a broader test of relevance than applies in court
Thirdly, and more helpfully, the Court has confirmed that the
"reasonable grounds" for the non-compliance defence can
be based not only on legal constraints (such as legal privilege and
the privilege against self-incrimination), but can also include
physical and practical difficulties in complying with the
Finally, ICAC came in for some criticism for failing to engage.
The Court noted that litigation might not have been necessary had
ICAC taken advantage of the "ample opportunity" it had to
acknowledge and accommodate the legitimate concerns of the
applicant but that it had instead "preferred the course of
avoiding practical engagement".
That accords with our view, that sensible engagement with the
regulator is usually the best way to resolve unduly onerous
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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