Re Commissioner of the Australian Federal Police v Kenneth James Mcmillan and Peter William Hardes [1987] FCA 1 (8 January 1987)

FEDERAL COURT OF AUSTRALIA

Re: THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
And: KENNETH JAMES McMILLAN and PETER WILLIAM HARDES
No. G82 of 1986
Evidence

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Burchett J.

CATCHWORDS

Evidence - Statutory Interpretation - Examination under S.243F of the Customs Act - Privilege against self-incrimination and applicable where statute impliedly excludes privilege - Legal professional privilege not excluded by s.243F - Applicability of to give evidence - Liability to penalty a civil liability - Court's discretion where defendant to be examined is also facing criminal charge.

Customs Act 1901, ss.243A - S

Federal Court of Australia Act 1976, s.58

Crimes Act 1900 (NSW), s.407

Evidence Act 1898 (NSW), s.11

The Queen v. Smithers; Ex parte McMillan [1982] HCA 76; (1982) 152 CLR 477

The Queen v. Scott (1856) 25 LJMC (N.S.) 128

Sorby v. The Commonwealth of Australia [1983] HCA 10; (1983) 152 CLR 281

Hammond v. The Commonwealth of Australia [1982] HCA 42; (1982) 152 CLR 188

Pyneboard Proprietary Limited v. Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328

Mortimer v. Brown [1970] HCA 4; (1970) 122 CLR 493

Controlled Consultants Proprietary Limited v. Commissioner for Corporate Affairs [1985] HCA 6; (1985) 156 CLR 385

Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52

Arno v. Forsyth (1986) 65 ALR 125

Rumping v. Director of Public Prosecutions (1964) AC 814

Gapes v. Commercial Bank of Australia Ltd. (1979) 38 FLR 431

Clyne v. Deputy Federal Commissioner of Taxation 1985 (2) ATC 4597

Re Clyne; Ex parte Deputy Commissioner of Taxation, unreported, Jackson J., 16 September 1986

Commissioner of the Australian Federal Police v. Ian Ormond Cox, unreported, Pincus J., 24 December 1986

HEARING

SYDNEY
8:1:1987

Counsel for the Applicant: Mr. B. Coles

Solicitors for the Applicant: Director of Public Prosecutions

Counsel for the First Defendant: Mr. T.F. Robertson

Solicitors for the First Defendant: Marsdens

Counsel for the Second Defendant: Mr. J.G. Spencer

Solicitors for the Second Defendant: Hilton & Associates

DECISION

Sections 243A to 243S of the Customs Act 1901 provide for remedies, of an unusual kind and of great severity, to curb the activities of drug traffickers. Jurisdiction is by s.243S conferred upon the Federal Court of Australia to hear and determine applications under these provisions.

2. The central provision is s.243B, the validity of which (as well as of s.243E) was upheld by the High Court in The Queen v. Smithers; Ex parte McMillan [1982] HCA 76; (1982) 152 CLR 477. Under that section, designated persons including the Commissioner of Police (an expression defined in s.4 as referring to the applicant) may institute a proceeding for an order that a person pay a pecuniary penalty to the Commonwealth in respect of certain narcotics dealings. By sub-s.(3), it is provided that the Court may order the payment of a penalty "whether or not (the defendant) has been convicted of an offence, or proceedings have been instituted in respect of any offence" committed in relation to the dealing or dealings which gave rise to the liability to the penalty. By sub-s.(2) the penalty is to be equal to the value, assessed in accordance with s.243C, of the benefits derived by the defendant from that dealing or those dealings. This provision was held to be mandatory in Commissioner of the Australian Federal Police v. Curran (1984) 3 FCR 240 at 250.

3. A particularly important section is s.243E, pursuant to which, where an application has been made for an order under s.243B, the applicant may seek ex parte an order directing the Official Trustee in Bankruptcy to take control of specified property or of all the property of the defendant. Where the evidence referred to in that section is adduced, the Court "shall make an order directing the Official Trustee to take control" of the specified property, or of all the property of the defendant. There is power for the Court to "make provision for meeting the reasonable living and business expenses of the defendant out of that property, or out of a specified part of that property". There is also power for the Court to refuse an order if the Commonwealth refuses or fails to give to the Court appropriate undertakings with respect to the payment of damages or costs.

4. It is in this setting that the section presently relevant, s.243F, provides:

"(1) Where the Court makes, or has made, an

order (in this section referred to as the
'original order') under sub-section 243E (1)
directing the Official Trustee to take
control of specified property, or all of the
property, of a person (in this section
referred to as the 'defendant'), the Court
may, at the time it makes the original order
or at any subsequent time, make such orders
in relation to that property as the Court
considers just and, without limiting the
power so conferred on the Court, the Court
may, at any time or from time to time, make
an order -

. . .

(d) directing the defendant to furnish to
the Official Trustee, within a time
specified in the order, a statement,
verified by the oath or affirmation of
the defendant, setting out such
particulars of the property of the
defendant as the Court deems proper;

(e) for the examination of the defendant or
another person before the Court or the
Registrar of the Court concerning the
nature and location of the property of
the defendant; or

. . .

(2) An application for an order under
sub-section (1) may be made -

(a) by the Official Trustee;

(b) by the Minister, the Commissioner of
Police or the Comptroller;

(c) by the defendant; or

(d) with the leave of the Court, by any
other person.

(3) Where the defendant or another person is
examined before the Court or the Registrar of
the Court in pursuance of an order under
sub-section (1), a statement or disclosure
made by him in answer to a question put to
him in the course of the examination is not
admissible against him in any civil or
criminal proceedings except -

(a) in a proceeding for giving false
testimony in the course of the
examination; or

(b) in a proceeding for the recovery of a
pecuniary penalty for the purpose only
of facilitating the assessment of the
amount of the pecuniary penalty."

5. In the present case, orders were made by Jackson J. under ss.243E and 243F directing the Official Trustee to take control of all of the property of the defendants (as they are called by s.243F(1) and Order 60 Rule 1 (3)), and for the examination of the defendants and other persons before the Court. The examinations have been commenced and in part completed before me. At this stage certain objections have been taken and foreshadowed, and it is necessary that I give rulings.

6. As has been indicated, s.243B contemplates that proceedings to enforce a pecuniary penalty may be instituted whether or not proceedings have been instituted in respect of any offence committed in relation to a relevant narcotics dealing. Prosecutions have, in the present case, been launched against the defendants, but a date has not yet been fixed for their trial. In that situation, the principal matter argued is whether objection can be taken to questions asked, upon examination of the defendants themselves, on the ground that the answers might incriminate them. It is submitted that s.243F(3) is insufficient to abrogate the common law protection against self-incrimination, both in principle (because the actual tender of incriminating answers is not the only way in which they could be used against a defendant) and upon the authority of Sorby v. The Commonwealth of Australia [1983] HCA 10; (1983) 152 CLR 281. Counsel for the defendants point out that evidence concerning the acquisition of assets might be utilised as circumstantial evidence in a prosecution relating to the alleged importation of narcotic goods. It is said that the Crown case, upon the committal proceedings against at any rate one of the defendants, was in part reliant upon circumstantial evidence of that kind, and upon inferences to be drawn from the alleged false explanations given by that defendant of his sudden acquisition of wealth.

7. The principle that a man must not be required to incriminate himself was described by Lord Campbell C.J., speaking also for Alderson B., Willes J. and Bramwell B., in The Queen v. Scott (1856) 25 LJMC (N.S.) 128 at 132 as "the great maxim of English law, 'Nemo tenetur seipsum accusare.'" However, he added:

"So, undoubtedly, says the common law of
England. But parliament may take away this
privilege, and enact that a party may be
bound to accuse himself, that is, that he
must answer questions by answering which he
may be criminated",

though Coleridge J., dissenting, at 135 described such a procedure as "this new and un-English mode", which he thought violated "a sacred principle of our law". Where the rule applies, it covers the case of evidence which may form part of a chain of circumstantial evidence implicating the witness in a crime: Ex parte P. re Hamilton (1957) 74 WN (NSW) 397; and see Sorby's case at 291-2.

8. It has been repeatedly held that, to use the language of Gibbs C.J. in Hammond v. The Commonwealth of Australia [1982] HCA 42; (1982) 152 CLR 188 at 197-198, "it would be necessary to find a clear expression of intention before one could conclude that the legislature intended to over-ride so important a privilege as that against self-incrimination."

9. In Sorby's case (supra) the High Court held that legislation providing for Royal Commissions could not be construed as abrogating the privilege merely because it contained a provision rendering inadmissible in evidence in a prosecution an answer given before the Royal Commissioner, a view foreshadowed by Gibbs C.J. in Hammond's case at 198 and supported by Lord Wilberforce's remarks in Rank Film Distributors Ltd. v. Video Information Centre (1982) AC 380 at 443: see Sorby's case at 294-5, per Gibbs C.J., and at 310-1 per Mason, Wilson and Dawson JJ. The joint judgment of Mason, Wilson and Dawson JJ. at 309 contains the following:

"The privilege against self-incrimination is
deeply ingrained in the common law. The
principle is that a statute will not be
construed to take away a common law right,
including the privilege against
self-incrimination, unless a legislative
intent to do so clearly emerges, whether by
express words or necessary implication:
Pearce, Statutory Interpretation in
Australia, 2nd ed. (1981), pars. 113-116;
Pyneboard (Pyneboard Proprietary Limited v.
Trade Practices Commission [1983] HCA 9; (1983) 152 CLR
328); Crafter v. Kelly (1941) SASR 237,
at p 242.

Mortimer v. Brown [1970] HCA 4; (1970) 122 CLR 493
furnishes a compelling illustration of a
statute which abrogates the privilege by
necessary implication. There it was held
that s. 250 of The Companies Act of 1961 (Q.)
excluded the privilege in the public
examination by a judge of directors of a
company involved in voluntary liquidation."

At 310 the joint judgment continues:

"Here the State Act makes provision for Royal
Commissions generally, without regard to the
character of the terms of reference as
expressed in the relevant letters patent.
Accordingly, it is of no moment that the
Commissioner is by his letters patent
required to inquire whether persons
associated with Terrence John Clarke
contravened laws of the Commonwealth and
Queensland and to establish the identity of
those persons. Nor does it matter that the
offences suspected are drug offences, the
Commission of which is difficult to discover
and establish. The point is that we are
seeking to discover whether or not there is
an intention in the statute to abrogate the
common law privilege and that the statute is
directed to Commissions generally, whether
concerned with contraventions of the law or
not."

10. Sorby's case is strongly relied upon by the defendants, but it is to be noted that in the passage lastly cited from the joint judgment the character of the statute there in question plays a significant part in the reasoning, and considerations peculiar to provisions dealing with drug offences are put to one side on the basis of the generality of the statute. The passage is open to the view that such considerations might lead to a very different result in the case of statutory provisions directed specifically to the problems of drug offences which, as is pointed out, may be "difficult to discover and establish".

11. After referring to s.14(2) of the Queensland Act there under examination, the section protecting a witness from the tender of his answers in subsequent criminal proceedings, and pointing out that this section "does not provide a protection to the witness which is co-extensive with the protection given to him by the privilege", since once the information is obtained proof may ensue otherwise than by tender of the admission, the joint judgment continues:

"Nevertheless, the presence of s.14(2) then
provokes the question: What purpose is the
sub-section intended to serve if it is not to
protect the witness from the consequences of
abrogation of the privilege? When a
legislature abrogates the privilege against
self-incrimination it often gives
compensatory protection to the witness by
providing, as s.14(2) does, that an answer
shall not be admissible in civil and criminal
proceedings other than in proceedings for
contempt or for an offence under the Act. . . .
If, therefore, the sub-section had stood
alone in the context of an Act which imposed
an obligation on a witness to answer all
relevant questions, there might well be
substance in the submission that its
presence was consistent only with a
legislative intention to abrogate the
privilege. However, the sub-section does not
stand alone in the State Act. The context
furnishes provisions in s.10(4) and
s. 14(1)(ii) which protect a witness in
respect both of a refusal to answer questions
and to produce documents if he has a
reasonable excuse. There is no sufficient
indication in the Act that a witness is not
entitled to that protection if the reason for
his refusal is a well-grounded claim to the
privilege against self-incrimination."

12. Counsel sought to make use of this passage by referring to s.58 of the Federal Court of Australia Act 1976 as (in his submission) the source of the obligation of a witness examined under s.243F(1)(e) of the Customs Act "not, without reasonable excuse . . . (to) refuse or fail to answer a question that he is required by the Court to answer". But this is to miss the point of the passage. It is not because the witness's obligation in fact allowed for a reasonable excuse that the joint judgment found the presence of a provision such as s.14(2) (or in the present case s.243F(3)) exiguous, but because the context of the Act under examination included a subsection making such an allowance. There is no similar context in ss.243A to 243S of the Customs Act. Those provisions leave unanswered the question provoked by s.243F(3). To assume the draftsman intended it to be answered by reference to a section in a different Act would be to draw rather too long a bow. Nor would the availability of a reasonable excuse under s.58 (if applicable), as a ground for refusing to answer, in itself import the privilege against self-incrimination: Controlled Consultants Proprietary Limited v. Commissioner for Corporate Affairs [1985] HCA 6; (1985) 156 CLR 385 at 392, 396.

13. The decision cited by the joint judgment in Sorby's case as affording an illustration of a statute which abrogates the privilege by necessary implication, Mortimer v. Brown, concerned an examination of directors of a company in voluntary liquidation under a section in the Queensland companies legislation. The section provided for answers to be given to such questions "as the Court thinks fit", and for the preparation of notes of the examination which might "thereafter be used in evidence in any legal proceedings" against the examinee. Kitto J. at 496 said:

"But however this may be, on the question that
is now before us the circumstance which I
find compelling is that the evident purpose
of the section, primarily even if not wholly,
is to enable a suggestion of fraud or
concealment of a material fact to be fully
investigated by means of the public
examination of certain classes of persons.
Such a question in its nature must frequently
involve consideration of evidence tending to
incriminate individuals. To read down the
wide terms of the section so as to allow a
danger of self-incrimination as a valid
ground for refusing to answer a question
would render the provision relatively
valueless in the very cases which call most
loudly for investigation. By providing in
sub-s.(7)(c) that notes of a person's
examination may thereafter be used in
evidence in any legal proceedings against
him, the section shows that the possibility
of self-incrimination is contemplated as
being inherent in the kind of examination
that is authorized."

The relevance of this reasoning to the interpretation of s.243F needs no emphasis. Walsh J. at 499 referred to "the idea underlying those decisions (that is, the decisions concerning examinations of bankrupts), namely, that the purpose of the bankruptcy statute was to secure a full disclosure of facts in the interests of the public". (Other statements of high authority to similar effect will be found in Ex parte Schofield, In re Firth (1877) 6 Ch D 230 at 233; and Rees v. Kratzmann [1965] HCA 49; (1965) 114 CLR 63 at 79-80.) At 502 Walsh J. said:

"Indeed, in many cases, the possibility or
even the certainty that an answer would
incriminate the person being examined would
not itself provide a sufficient reason for
disallowing the question, since questions
will normally be directed to the
investigation of all the relevant facts in
order that it may be ascertained whether or
not there has been fraud or concealment of
material facts. I think it is the intention
disclosed by the section that any questions
which will be of real assistance towards the
fulfilment of that purpose should be
answered."

The applicant contends in the present case that similarly s.243F evinces an intention, in the context of ss.243B and 243E, that any questions which will be of real assistance in ascertaining the nature and location of the property of a defendant should be answered. The defendants submit that the authority of Mortimer v. Brown was weakened by Mitcham v. O'Toole [1977] HCA 41; (1977) 137 CLR 150 in which the High Court refused special leave to appeal from a decision of the Full Court of the Supreme Court of Victoria, O'Toole v. Mitcham (1977) 2 ACLR 471. However the reference to Mortimer v. Brown in Sorby's case, which I have quoted, lends no support to this suggestion.

14. The reasoning in Mortimer v. Brown was discussed at some length, and applied, in the joint judgment of Mason A.C.J., Wilson and Dawson JJ. in Pyneboard Pty. Ltd. v. Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328 at 342-3, where reference was also made to King v. McLellan (1974) VR 773, a decision applying similar reasoning to legislation requiring the furnishing by a driver of a motor car of a sample of his breath for analysis. At 341 the joint judgment states:

"In deciding whether a statute impliedly
excludes the privilege much depends on the
language and character of the provision and
the purpose which it is designed to achieve.
The privilege will be impliedly excluded if
the obligation to answer, provide information
or produce documents is expressed in general
terms and it appears from the character and
purpose of the provision that the obligation
was not intended to be subject to any
qualification. This is so when the object of
imposing the obligation is to ensure the full
investigation in the public interest of
matters involving the possible commission of
offences which lie peculiarly within the
knowledge of persons who cannot reasonably be
expected to make their knowledge available
otherwise than under a statutory obligation.
In such cases it will be so, notwithstanding
that the answers given may be used in
subsequent legal proceedings."

15. The approach to the construction of a statute, in order to determine whether it impliedly excludes the privilege, which was adopted in the Pyneboard case, has been re-affirmed in two recent decisions of the High Court: Controlled Consultants Proprietary Limited v. Commissioner for Corporate Affairs [1985] HCA 6; (1985) 156 CLR 385; and Police Service Board v. Morris [1985] HCA 9; (1985) 156 CLR 397. In the former case at 396 Brennan J. said:

"The application of the privilege in
investigations carried out under statutory
powers must now be taken to depend upon
legislative intention as derived from the
statute, the privilege being held to apply
unless the statute impliedly excludes it.
The nature of the statutory power, the
prescribed manner of its exercise and the
purpose which its exercise is designed to
achieve are the available, if uncertain,
guides as to legislative intention in the
absence of express provisions."

16. I turn to the construction of s. 243F in the light of these authorities. Sub-section (1) of the section provides for the making of "such orders in relation to that property as the Court considers just and, without limiting the power so conferred on the Court, (it provides) the Court may, at any time or from time to time, make an order . . . (e) for the examination of the defendant or another person before the Court or the Registrar of the Court (the reprint of the Customs Act as at 1 April 1985 has the word "Registry", but that is an error) concerning the nature and location of the property of the defendant." Sub-section (3) provides that a statement or disclosure is not admissible except in a proceeding for giving false testimony in the course of the examination, or in a proceeding for the recovery of a pecuniary penalty for the purpose only of facilitating the assessment of its amount. Sub-section (4) expands the reference to the Registrar of the Court to include a Deputy Registrar, a District Registrar and a Deputy District Registrar. It seems to me that these provisions carry the necessary implication that each of the persons mentioned is empowered to conduct the examination pursuant to the order just as the Court is empowered to direct the furnishing of information pursuant to s.243F(1)(d). That paragraph enables the Court to direct a defendant to furnish a statement setting out particulars of his property. It will be noted that there is no provision conferring any immunity in respect of the tender of such a statement in any proceeding, whether civil or criminal.

17. It will be apparent that, in contrast to the provisions the subject of Sorby's case, these provisions do expressly contemplate the admissibility of statements, in answer to questions put in the course of the examination, which expose the defendant to penalty. For under s.243B(2) an ingredient of the penalty is the value of the benefits derived by the defendant, and the pecuniary penalty is equal to that value as assessed by the Court. An answer going to this assessment is expressly made admissible in a proceeding for recovery of a penalty. While it is true that the privilege against self-incrimination may be distinguished from the privilege against self-exposure to a penalty (see the Pyneboard case at 335-7), the privileges are closely related, and have frequently been subsumed under a single statement. In Police Service Board v. Morris, for example, at 404 Gibbs C.J. referred to "the privilege against giving answers which might tend to incriminate or expose to penalty". It seems to me that the demonstrable intention of the legislature to abrogate the privilege in relation to exposure to penalty is consistent with an intention to abrogate also the cognate privilege in respect of incrimination.

18. The requirement in s.243F(1)(d), a provision closely associated with para.(e), relates to "such particulars of the property of the defendant as the Court deems proper". This is language strictly comparable to the language interpreted by the High Court in Mortimer v. Brown as abrogating the privilege in the context of an enquiry in the public interest into the affairs of a company in liquidation, and in Commissioner of the Australian Federal Police v. Cox (Pincus J., unreported, 24/12/86) para.(d) was given the same effect. Similar language has been relied on in some of the bankruptcy cases; it is sufficient for present purposes to refer to the recent decision Re Clyne; Ex parte Deputy Commissioner of Taxation (unreported, Jackson J., 16 September 1986) where at p 16 it is stated:

"Putting to one side for a moment the
provisions of s.306A(3) of the Act, it is
clear that the public examination of
bankrupts under the enactments in bankruptcy
has long been an instance where, without
there being any reference to the exclusion of
the privilege against self-incrimination (the
emphasis is in the original), a statutory
duty of the bankrupt to answer 'all such
questions as the Court may put or allow to be
put to him' has been held to carry with it an
exclusion of the privilege against
self-incrimination."

It cannot be suggested that the provisions with which I am concerned evince any less determination on the part of the Parliament to insist upon the relevant facts being brought to light.

19. Furthermore it seems to me that there is a measure of inherent protection for the defendant in the terms of the provision. Questions which may be asked are circumscribed by the requirement that they be "concerning the nature and location of the property of the defendant". He is not to be questioned at large. He also receives the protection, so far as it goes, of sub-s. (3) which, in the context, suggests an advertence by Parliament to the problem. At the same time, it is to be expected that his answers may quite probably be tendered in the proceedings for a penalty, and they may very well disclose matters relevant to any circumstantial evidence which may be relied on in a subsequent prosecution. These are consequences Parliament must have appreciated.

20. The cases to which I have referred make it clear that the privilege may be abrogated without express words; it is a question of construction of the particular legislation. The present is a very different statutory context from that involved in Sorby's case. Legislation providing for the setting up of Royal Commissions gains no colour by reference to any particular kind of inquiry, since it must embrace any inquiry. The character and purposes of the inquiry to which s.243F relates do give colour to its language and provide a setting for its construction. The very subject of the inquiry (the property of the defendant) is likely, according to the allegations which found it, to be or to include the proceeds of crime. The inquiry forms part of an attack by Parliament upon drug trafficking, an attack which in other respects sets aside common law rights. There is, for example, the provision for ex parte orders, and that without any discretion in the Court, or at any rate any express discretion, to decline to make them, directing the Official Trustee, in certain circumstances, to take control of all of the property of a defendant. Such an inroad upon the fundamental rights of a citizen clearly shows that these measures relate to a topic seen by Parliament as of over-riding importance.

21. In my view the character of the provision in question and the purpose which it is designed to achieve do indicate that the privilege is abrogated, not only in respect of questions which may expose the defendant to penalty, but also in respect of questions the answers to which may incriminate him.

22. Some brief argument was addressed to me as to whether legal professional privilege could apply in respect of questions which may be addressed to a witness, to be examined, who acted as solicitor for one of the defendants. There is no question raising this issue presently before me. It does not seem to me that any of the considerations to which I have referred, in the context of s. 243F(1)(e), provides any reason to think that the legislature intended to modify the common law principles in respect of legal professional privilege. What Deane J. said of s. 10 of the Crimes Act 1914 in Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52 at 117-8 applies, mutatis mutandis, to the provisions I have to consider. He said:

"As can be seen, s. 10 contains no express
reference to communications between a person
and his legal advisers. It neither expressly
includes them in, nor expressly excludes them
from, the things to which it refers. There
is nothing in either s. 10 or in any other
provision of the Act which indicates either
that the Parliament directed its attention to
the particular matter of modifying or
destroying the confidentiality of relevant
communications between a person and his legal
advisers or that there existed a legislative
intention to modify the common law principle
that the confidentiality of such
communications should be preserved. In
accordance with the ordinary principles of
construction, the section should be construed
as not including, in the things which it
authorizes to be inspected or seized,
documents whose confidentiality would be
protected in the courts of the land by the
doctrine of legal professional privilege."

As Dawson J. said in the same case at 132:

"(T)he doctrine of legal professional
privilege is, in the absence of some
legislative provision restricting its
application, applicable to all forms of
compulsory disclosure of evidence."

Wilson J. at 97 agreed with the reasons of Dawson J. See also per Murphy J. at 90.

23. In Arno v. Forsyth (1986) 65 ALR 125 at 135 Lockhart J. referred to Baker v. Campbell as having established that the doctrine of legal professional privilege "is not merely a rule of evidence, but is part of the Federal common law attaching to Federal statutory powers of search and seizure unless excluded expressly or by necessary implication". It seems to me that it is equally part of the Federal common law attaching to Federal statutory powers of inquiry by examination.

24. It was then submitted that there is a privilege, which would be applicable upon an examination of a defendant's spouse, in respect of any communication made by the defendant to his spouse. Counsel for the defendants accepted, on the authority of Rumping v. Director of Public Prosecutions (1964) AC 814, that there is neither a rule of the common law nor a requirement of public policy which precludes the reception in evidence of communications between spouses. But it was submitted that s.79 of the Judiciary Act 1903 makes applicable to the present examination the provisions of s. 11 of the Evidence Act 1898 (NSW). Sub-section (1) of that section provides as follows:

"A husband shall be competent but not
compellable to disclose communications made
between him and his wife during the marriage
and a wife shall be competent but not
compellable to disclose communications made
between her and her husband during the
marriage."

25. I did not understand counsel for the applicant to contest these propositions, though he reserved his position as regards any particular question which he might ask in examination of the defendant's wife. Clearly, many questions could be asked which would not raise any problem of the application of s. 11.

26. But in the course of his reply Mr. Robertson raised also the question whether s. 407 of the Crimes Act 1900 (NSW) applied. The opening paragraphs of that quite lengthy section read:

"Every party to a civil proceeding, inquiry in
which evidence is or may be given, or
arbitration, and the husband or wife of such
party, shall be competent to give evidence in
such proceeding, inquiry, or arbitration.

Every accused person in a criminal
proceeding, and the husband or wife of such
person, shall be competent, but, save as
hereinafter provided, not compellable, to
give evidence in such proceeding in every
Court . . . ."

27. Counsel's submission was that the proceeding under s.243F is a "criminal proceeding" within the meaning of the second paragraph of s.407, not a "civil proceeding" nor an "inquiry" within the meaning of the first paragraph, and accordingly, on the basis that this section also is made applicable by s.79 of the Judiciary Act, that the spouse of a defendant is not compellable to give evidence. He relied on the proposition contained in the judgment of Deane J. in Gapes v. Commercial Bank of Australia Ltd. (1979) 38 FLR 431 at 458, supported by a number of other authorities, that:

"In the absence of express statutory
direction, the question whether proceedings
for a statutory penalty are criminal in
character can be assimilated to the question
whether the act or acts in respect of which
the proceedings are brought constitute a
criminal offence. . . . The answer to both
questions must be determined by reference to
the legislative intent appearing from the
provisions of the relevant statute."

28. The argument asserted, as its foundation, that the circumstances raising a liability to a penalty under s.243B necessarily involve an offence. But although this will, perhaps, generally be so, the terms of s.243A(3) make it clear that a particular defendant may not be guilty of any offence: The Queen v. Smithers; Ex parte McMillan [1982] HCA 76; (1982) 152 CLR 477 at 486. In any case, counsel's argument cannot be accepted, having regard to the clear statement in the joint judgment of the High Court in McMillan's case at 487 to the effect that the sections with which I am concerned relate to "the imposition of a civil liability for pecuniary penalties", and that a proceeding under s.243B is "a civil action for penalties". See also s.243B(4) and (5), and cf. Naismith v. McGovern [1953] HCA 59; (1953) 90 CLR 336; Bainbridge-Hawker v. The Minister of State for Trade and Customs for the Commonwealth of Australia [1957] HCA 56; (1958) 99 CLR 521.

29. Had I been of a different opinion, I should still have regarded it as premature to rule in favour of Mr. Robertson's contention since s.407 would not preclude the wife being called to give evidence though, in a criminal proceeding, she could, in the witness box, refuse to give evidence: Demirok v. The Queen [1977] HCA 21; (1977) 137 CLR 20 at 27.

30. The final point raised on behalf of the defendants was whether I have a discretion to adjourn the examination of a particular witness pending the forthcoming trial. I am clearly of opinion that the Court does have such a discretion, and that in the exercise of it the Court should be careful to ensure that the examination, in the particular circumstances in which it is held, is not oppressive to a defendant facing serious criminal charges. Of course, circumstances may readily be imagined where it might appear that a failure to proceed promptly with an examination could jeopardise the objectives of the legislation by facilitating evasion. But it has not been suggested that anything of that kind is involved in this matter. Although s.243B(3) appears to contemplate the possibility of more or less contemporaneous proceedings of a criminal nature and for a penalty, in any particular case, especially one involving an examination of a defendant himself under s.243F(1)(e), consideration should be given to the question whether there is risk of infringing the principle stated by Deane J. in Hammond v. The Commonwealth [1982] HCA 42; (1982) 152 CLR 188 at 206, and the Court should be ready, where appropriate, to exercise the discretion to which Morling J. referred in Clyne v. Deputy Federal Commissioner of Taxation 1985 (2) ATC 4597 at 4601 (see also Re Clyne (supra, at pp 8-9)). However, I have not before me any specific application for the exercise of my discretion at this stage.

31. In accordance with these reasons, I over-rule the general objection to any questions being asked of the defendants the answers to which may incriminate them, I rule that I shall allow any proper objection based on legal professional privilege or on s.11 of the Evidence Act 1898 (NSW), and I over-rule the general objection to the examination of the wife of a defendant. I shall hear counsel as to whether a date should now be fixed for the resumption of the examination.