High Court hears foreign insurance executives' case.

Evidence given at a royal commission should not be used by regulatory authorities to take subsequent action, the High Court of Australia has been told. Two foreign insurance executives, known only as X and Y due to a suppression order, have argued their case before the court against Australian Prudential Regulation Authority (APRA) disqualifications.

APRA issued notices in February 2005 asking X and Y to show cause why they should not be disqualified from holding senior insurance roles in Australia after evidence they gave during the HIH Royal Commission on insurer Z's dealings with HIH. David Jackson, QC, X and Y's counsel, said relying on evidence his clients gave at the commission to disqualify them was “a disadvantage” that breached section 6M of the Royal Commissions Act (RCA). “You do not immunise yourself ... [but] in seeking to have you prevented or disqualified from acting as an officer of an [insurer], APRA cannot rely on... the evidence you actually gave,” he said.

But High Court Justice Michael Kirby said a royal commission's aim was to find the truth and it would be “surprising” if evidence were unavailable afterwards. “The whole purpose of the RCA is to get the facts out. It would then be a self-wounding operation to interpret this provision to prevent those facts being available for any legal effect they might have.”

Federal Solicitor-General David Bennett, QC, APRA's counsel, said the Act was “poorly drafted” and the word disadvantage should not have a broad meaning. It will be several months before the High Court delivers a judgement.