Re Deputy Commissioner of Taxation (WA); Director of Public Prosecutions; the Chairman, National Crime Authority and Comptroller-General of Customs Ex Parte: Peter Briggs [1987] FCA 69 (6 March 1987)

FEDERAL COURT OF AUSTRALIA

Re: DEPUTY COMMISSIONER OF TAXATION (W.A.); DIRECTOR OF PUBLIC PROSECUTIONS;
THE CHAIRMAN, NATIONAL CRIME AUTHORITY and COMPTROLLER-GENERAL OF CUSTOMS
Ex parte: PETER BRIGGS
No. WA G14 of 1987
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.

CATCHWORDS

Practice and Procedure - discovery and interrogatories - proceedings for declaration that respondents breached secrecy provisions of statutes - privilege against self-incrimination - whether respondents should be excused, in limine, from discovery.

Income Tax Assessment Act 1936 (Cth.), s.16

Crimes Act 1914 (Cth.), s.70

Evidence Act 1906 (W.A.), s.11.

Federal Court Rules O.15 rr.1, 2, 3, 5, 8 and O.16 r.1

W.A. Pines Pty. Ltd. v. Bannerman (1980) 41 FLR 175

Barnard v. National Dock Labour Board (1953) 2 QB 18

Regina v. Secretary of State for the Home Department, Ex parte Herbage (No. 2) (1987) 2 WLR 226.

Redfern v. Redfern (1891) P 139

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

Lamb v. Munster (1882) 10 QBD 110.

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

Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs (1985) 57 ALR 751.

Naismith v. McGovern [1953] HCA 59; (1953) 90 CLR 336.

Refrigerated Express Lines (A/asia) Pty. Ltd. v. Australian Meat and Live-stock Corp. (1979) 42 FLR 204.

The King v. The Associated Northern Collieries [1910] HCA 61; (1910) 11 CLR 738.

Re Intercontinental Development Corporation Pty. Ltd. (1975) 1 ACLR 253.

Rank Film Distributors Ltd. v. Video Information Centre (1982) AC 380

Sankey v. Whitlam [1978] HCA 43; (1978) 142 CLR 1.

Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation (1978) AC 547.

Woods v. Smith (1976) WAR 13

HEARING

SYDNEY
6:3:1987

Counsel and Solicitors for prosecutor: H. McLernon instructed by Robinson Cox

Counsel and Solicitors for first and fourth respondents E.M. Hennan Q.C. with P. Macliver instructed by Australian Government Solicitor

Counsel and Solicitors for second respondent: M. Lee Q.C. with H. Seymour instructed by Director of Public Prosecutions

Council and Solicitors for third respondent: R.E. Birmingham instructed by Australian Government Solicitor

ORDER

The prosecutor's application for discovery and the prosecutor's application for leave to administer interrogatories be refused.

The prosecutor pay the respondents' costs of the applications.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

The prosecutor seeks orders first, that the respondents file and serve a list of documents in response to the prosecutor's notice of discovery, and, secondly, that the prosecutor have leave to administer interrogatories.

2. On 9 February 1987, Sheppard J. ordered that the respondents show cause why Writs of Prohibition and Mandamus and a Declaration should not be issued and made in respect of the conduct identified in and upon the grounds set out in the affidavit of the prosecutor sworn 29 January 1987. The conduct of the respondents was said to be the divulging, communicating and receiving of information respecting the affairs of a number of companies of which the prosecutor was a director and shareholder. The conduct was said to be in breach of the provisions of the Income Tax Assessment Act 1936. It was also alleged that such conduct was not authorised by the Income Tax Assessment Act or any other law of the Commonwealth and was in excess of statutory authority. It was further said that such conduct was an abuse of power, in bad faith and for a purpose not authorised by the legislation.

3. The prosecutor seeks a declaration that any divulging and communication of information respecting the affairs of the prosecutor or the affairs of any of the companies referred to by officers of the respondents was in breach of s.16(2) of the Income Tax Assessment Act and s.70 of the Crimes Act 1914; an order that any such information together with all copies, notes or other records derived therefrom be returned forthwith to the first respondent; an order prohibiting the second respondent and the third respondent from using or further using any such information, or any copy, note or other record derived therefrom; an order prohibiting the second respondent and the third respondent from taking any further step in relation to any prosecution of the prosecutor or the taking of any further step in relation to any investigation of the prosecutor by means of or reliance upon directly or indirectly any information communicated in breach of the provisions referred to; and such further orders as the Court sees fit.

4. On 24 February 1987, on the return of the order to show cause, I ordered that the prosecutor file points of claim. By his points of claim, the prosecutor alleges that in his capacity as a taxpayer and as a shareholder of a number of private and public companies, he has supplied to the first respondent information regarding the tax affairs of the prosecutor and of those companies; that in May 1984 the prosecutor was arrested on conspiracy charges under s.86 of the Crimes Act; that the arrest was effected by the Federal Police acting upon instructions from the office of the Special Prosecutor and that the responsibility for such prosecution was later assumed by the second respondent; that on dates which are not known to the prosecutor but prior to the date of his arrest, officers responsible to the first respondent communicated information to the Special Prosecutor and thereafter communicated information to the second respondent in breach of the secrecy provisions contained in s.16 of the Income Tax Assessment Act and in breach of the secrecy provisions contained in s.70 of the Crimes Act; that on 14 November 1985 the prosecutor was arrested by officers of the West Australian Police Force on stealing charges; that on dates not known to the prosecutor but prior to his arrest officers responsible to the first respondent communicated information to officers of the National Crime Authority who in turn communicated that information to officers of the West Australian Police Force; that the communication of that information was in breach of s.16 of the Income Tax Assessment Act and s.70 of the Crimes Act; that in August 1986, the prosecutor was acquitted by direction on the stealing charges; that on dates which are not known to the prosecutor officers responsible to the first respondent communicated information in relation to certain matters described as "the Brolga Bathurst and Cliffminex matters" to officers responsible to the third respondent who in turn communicated the information to officers of the Australian Federal Police in breach of Section 16 of the Income Tax Assessment Act and s.70 of the Crimes Act; that on dates which are not known to the prosecutor but in or prior to October 1985 officers responsible to the first respondent communicated information in relation to certain matters described as "the Customs Duty Matters" to officers responsible to the third respondent who in turn communicated the information to officers responsible to the fourth respondent in breach of s.16 of the Income Tax Assessment Act and s.70 of the Crimes Act.

5. In his affidavit sworn on 29 January 1987, the prosecutor said that he is "currently facing the following criminal procedures in relation to the laws of the Commonwealth and of the State of Western Australia:

(a) an indictment filed at the District Court of
Western Australia alleging conspiracy to defraud
and conspiracy to prevent the operation of the
ITAA (hereinafter referred to as 'the conspiracy
charges');

(b) a further indictment in the said District Court
alleging two offences of stealing money the
property of Forsayth No Liability; (hereinafter
referred to as 'the stealing charges').

(c) an investigation by the Third Respondent into my
affairs as they relate to Brolga Expoloration
NL, Bathurst Nominees Pty. Ltd. and Cliffminex
NL (hereinafter referred to as 'the Brolga
Bathurst and Cliffminex matters'; and

(d) an investigation by the Fourth Respondent into
my affairs relating to the importation of
vintage motor vehicles by Essex Securities Pty.
Ltd. a company of which I was and am now a
director (hereinafter referred to as 'the
customs matters')."

6. The prosecutor has recently sought leave to amend the application to seek certain other relief. The application for amendment is opposed by the respondents on what are asserted to be substantial grounds and has not yet been dealt with. I will deal with the present applications on the pleadings as they now stand.

7. On 27 February 1987, after hearing argument, I ordered that the applications for discovery and interrogatories be refused with costs. I then indicated tht I would publish reasons for my decision at a later date. Those reasons are as follows.

8. I will deal first with the application for discovery. By Ord.15 rule 1, after a directions hearing pursuant to Ord.10, a party may, unless the Court otherwise orders, by notice of discovery, require any other party to give discovery of documents. By Ord.15 rule 2 a party required to give discovery shall do so within such time, not being less than 14 days after service of the notice of discovery on him, as may be specified in the notice of discovery. A party shall, subject to rule 3, give discovery by filing and serving on the party giving the notice of discovery (a) a list of documents relating to any matter in question; and (b) an affidavit verifying the list. By Ord.15 rule 5, the Court may, in any stage of the proceedings, order any party to give discovery in accordance with rule 2.

9. The prosecutor seeks general discovery. Alternatively, if an order for general discovery is refused, he seeks an order for particular discovery (see Ord.15 rule 8). Specifically, he seeks production of all documents referring to or evidencing the delivery of information with respect to the matters referred to in paras. (a), (b), (c) and (d) of his affidavit set out above.

10. The application for discovery was resisted on a number of grounds. Since I have come to the conclusion that discovery should not be ordered because it may expose the respondents to the penalties of a crime, it is unnecessary to deal with the other grounds of objection. However, it should be noted that the principal proceedings are by way of a prerogative writ and it may be that this requires the application of a different approach than in the case of ordinary civil proceedings (see W.A. Pines Pty. Ltd. v. Bannerman (1980) 41 FLR 175 per Brennan J. at p 181; Barnard v. National Dock Labour Board (1953) 2 QB 18 at p 43; cf. Regina v. Secretary of State for the Home Department, Ex parte Herbage (No.2) (1987) 2 WLR 226 at pp 231, 232 and 236). I will not pursue the point here as I am prepared to assume, for the purposes of the argument, that the ordinary rules relating to discovery are applicable.

11. It should also be mentioned that in the course of argument, reference was made to the onus of proof in the applications. It was suggested that if the application were made under Ord.15 rule 1, the onus was on the respondents to demonstrate why such an order should not be made. On the other hand, rule 5 of Ord.15 appears to cast the burden upon the party applying for discovery. Since I have come to the conclusion that the respondents' claim for privilege against self-incrimination should be upheld, it is not necessary for me to express any view on these matters. I am prepared to assume, for the purposes of the argument, that all other things being equal, it would be appropriate to order discovery.

12. It is well settled that "a party cannot be compelled to discover that which, if answered, would tend to subject him to any punishment, penalty, forfeiture, or ecclesiastical censure" (see per Bowen L.J. in Redfern v. Redfern (1891) P 139 at p 147; Pyneboard Proprietary Limited v. Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328 at pp 335-6). Thus, a person may refuse to answer any question or to produce any document or thing if to do so "may tend to bring him into the peril and possibility of being convicted as a criminal" (see Lamb v. Munster (1882) 10 QBD 110 at p 111; Sorby v. The Commonwealth [1983] HCA 10; (1983) 152 CLR 281 at p 288). The privilege against self-incrimination not only protects a person against a requirement that he produce an incriminating document. The privilege also protects him against a requirement that he "identify incriminating documents or reveal their whereabouts or explain their contents in an incriminating fashion" (see Controlled Consultants Pty. Ltd. v. Commissioner for Corporate Affairs (1985) 57 ALR 751 at p 756). In a civil action brought merely to establish a forfeiture or enforce a penalty the rule is that neither discovery nor interrogatories will be allowed (see Pyneboard, supra; Naismith v. McGovern [1953] HCA 59; (1953) 90 CLR 336 at pp 341-2; and see generally the discussion by Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v. Australian Meat and Live-stock Corp. (1979) 42 FLR 204).

13. In The King v. The Associated Northern Collieries [1910] HCA 61; (1910) 11 CLR 738, in a passage frequently cited in the present context, Isaacs J. said (at pp 742-3):

"The test whether an order for discovery can be
made is whether the Court can see that the
discovery may expose the party to a penalty or
not. Very often that depends upon whether the
action itself is a penal proceeding. It does
not rest upon the fact that it is a civil
action. An action is none the less civil merely
because it is penal...

There is an inherent distinction between a civil
action to prevent or redress a civil injury on
the one hand, and a civil action to recover a
penalty on the other. In the latter case the
whole and avowed object of the proceedings is
the infliction of the penalty, and the discovery
sought of documents relevant to the claim can
therefore have no other intended consequence.
It does not require in such a case the oath of
the defendant to establish the fact that the
production of the documents would tend to
penalize him. The Court can see the effect of
discovery from the nature of the proceeding. In
the former case there is no such necessary
consequence, and whether the objectionable
tendency exists or not has to be otherwise
ascertained, and claiming immunity upon oath in
the course of making discovery is the most
usual, but not the only other means of
establishing it."

14. In considering a claim of privilege on the ground of self-incrimination, the court must be satisfied that the apprehended danger of prosecution is "real and appreciable, and not of an imaginary or insubstantial character. If there is a risk, the court does not generally go into the question of whether it is probable or not that the proceedings will, in fact, be taken." (Per Bowen C.J. in Eq. in Re Intercontinental Development Corporation Pty. Ltd. (1975) 1 ACLR 253 at p 259). Further, it is well settled in this area that a question which at first sight may appear innocent may, by affording a link in the chain of events, become a means of bringing home an offence (see per Bowen C.J. in Eq., supra; Rank Film Distributors Ltd. v. Video Information Centre (1982) AC 380 at p 443; Sorby, supra, at p 291; Cross on Evidence, 3rd Aust. ed. at p 621). As Mason, Wilson and Dawson JJ. said in Sorby, supra (at p.310):

"....the privilege protects the witness not only
from incriminating himself directly under a
compulsory process, but also from making a
disclosure which may lead to incrimination or to
the discovery of real evidence of an
incriminating character..."

15. It is true that the general rule in civil proceedings where no penalty is sought is that a party ought not to be excused, in limine, from giving discovery on the ground that production might tend to expose him to a penalty. However, as Deane J. observed in Refrigerated Express Lines, supra (at p.211):

"If circumstances arose where the only means of
protecting the right against self-incrimination
and self-penalization were to excuse a party in
limine from discovery or interrogatories, such
circumstances should, in my view, be seen as
exceptional and as justifying a departure from
the general rule. In particular, if it appeared
to the court that the making of an affidavit of
discovery as distinct from producing the
documents referred to in such an affidavit would
tend to expose a party to a penalty, any order
for discovery should be adjusted to the extent
necessary to preclude that tendency. It is,
perhaps, conceivable that circumstances could
arise where the mere making of an order for
interrogatories might have a similar tendency.
The cases where the making of an order for
discovery or interrogatories will, in itself,
involve exposing a party to self-incrimination
or self-penalization must, however, be rare
indeed in view of the fact that the party will
remain entitled to refuse to answer questions
asked or produce documents discovered if the
answers or production might tend to incriminate
him or expose him to a penalty."

16. In my opinion, the present case falls within the exceptional class mentioned by Deane J. Although these are not proceedings to enforce a penalty, they are analogous to such proceedings. The prosecutor seeks a declaration that the statutory provisions in question have been contravened. Thus the main issue in the principal proceedings is whether any such contravention occurred. There may be a real question whether this is an appropriate use of the declaratory procedure (see Sankey v. Whitlam [1978] HCA 43; (1978) 142 CLR 1 per Gibbs ACJ. at pp 20-26). It is not now necessary to resolve this and the related question of the standing of the prosecutor to sue. I am prepared to assume, for present purposes, that the prosecutor has at least an arguable claim to the relief he now seeks. But the making of that assumption is necessarily fatal to his claim for discovery, whether general or special: for to order discovery here is to compel the respondents to identify documents which may lead indirectly to their incrimination. As Lord Wilberforce observed in Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation (1978) AC 547 (at p 612:

"....the tendency to expose to a penalty would be
increased if the documents in question were to
be validated and connected with the R.T.Z.
companies by sworn evidence, as opposed to
being, as they are now, pieces of paper found in
a file."

17. Although relief other than the claim for a declaration is sought in the principal proceedings, it could not be suggested that the other claims for relief raise issues which are independent of the issues raised by the declaration sought. It follows that it is not appropriate that discovery should be ordered on some limited basis in aid of the other claims for relief (see The King v. Associated Northern Collieries, supra, at p 748).

18. A passing reference was made in the course of the argument to the possibility that immunity from prosecution should be granted to the respondents with a view to modifying any claim for privilege. The argument was not developed and I do not propose to deal with it save to observe that although there is a power conferred by s.11 of the Evidence Act 1906 (W.A.) to grant a certificate in certain cases (see Woods v. Smith (1976) WAR 13) the exercise of the power is discretionary and there are doubts as to the operation of such certification procedures in the Commonwealth context (see the Interim Report of the Australian Law Reform Commission on Evidence, Report No. 26 at pp.260-264).

19. For these reasons, I refuse to order discovery.

20. I turn next to the application for leave to administer interrogatories. By Ord.16 rule 1(1), the court is given a clear discretion to order interrogatories. Interrogatories are, of course, a branch of the law of discovery. Again, the privilege against self-incrimination is available to the respondents. For the reasons I have given in refusing to order discovery, leave to administer interrogatories is also refused.