Re New World Alliance Pty Limited (Receiver and Manager Appointed) and Sycotex Pty Limited v Lutz Clemens Wolfgang Baseler; John Raymond Carlyle; Bruce Craig Munro and Wijeyanayagam Wijeyamohan [1993] FCA 569 (29 November 1993)

FEDERAL COURT OF AUSTRALIA

IN THE MATTER OF NEW WORLD ALLIANCE PTY LIMITED (Receiver and Manager
Appointed) and SYCOTEX PTY LIMITED v. LUTZ CLEMENS WOLFGANG BASELER; JOHN
RAYMOND CARLYLE; BRUCE CRAIG MUNRO and WIJEYANAYAGAM WIJEYAMOHAN
No. NG3227 of 1992
FED No. 859/93
Number of pages - 26
Practice and Procedure
(1993) 47 FCR 90

COURT

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

CATCHWORDS

Practice and Procedure - discovery of documents - privilege against self-incrimination - claim by respondents that certain documents should not be made available for inspection by applicant on the grounds that such a course might tend to subject the respondents to liability to a penalty - consideration of relevant principles and authorities - whether Court should be satisfied that claim for privilege made out - whether there was a real and appreciable risk of prosecution - whether possible to devise a course of action pursuant to which the documents could be made available for the applicant's inspection and, at the same time, the respondents' privilege preserved.

HEARING

SYDNEY, 11 October 1993
29:11:1993

Counsel for the Applicant: Mr D.J. Hammerschlag

Solicitors for the Applicant: Dunhill Madden Butler

Counsel for the First, Second Mr T.J. Hancock
and Fourth Respondents:

Solicitors for the First, Freehill Hollingdale and Page

Second and Fourth Respondents:

ORDER

The Court Orders that:-
1. Paragraphs 1, 2 and 3 of the applicant's notice of motion filed on 31 August 1993 be dismissed.
2. The applicant pay the first, third and fourth respondents' costs of those paragraphs of the notice of motion.
3. The documents produced to the Court by the first, second and fourth respondents for its inspection (which have been marked 1 for identification) be placed in a sealed envelope or package and delivered to the Registrar for safe keeping. The envelope or package is not to be opened except upon the order of a judge of the Court.
4. There be liberty to apply.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

SHEPPARD J This is an application for inspection of documents which have been discovered but in respect of which the first, second and fourth respondents have claimed privilege on the ground that the production of the documents in question may tend to subject them to liability for a penalty.

2. The proceedings are brought pursuant to s.592 of the Corporations Law. The relevant form of the section is that which was in force in 1991 when the transactions, the subject of the amended statement of claim in the proceedings, were entered into. Subsections 592(1) and (2) of the Law were then as follows:-

"592 (1) here:
(a) a company has incurred a debt;
(b) immediately before the time when the debt was incurred:
(i) there were reasonable grounds to expect that the company
will not be able to pay all its debts as and when they become
due; or
(ii) there were reasonable grounds to expect that, if the
company incurs the debt, it will not be able to pay all its
debts as and when they become due; and
(c) the company was, at the time when the debt was incurred, or
becomes at a later time, a company to which this section
applies;
any person who was a director of the company, or took part in
the management of the company, at the time when the debt was
incurred contravenes this subsection and the company and that
person or, if there are 2 or more such persons, those persons
are jointly and severally liable for the payment of the debt.
(2) In any proceedings against a person under subsection (1),
it is a defence if it is proved:
(a) that the debt was incurred without the person's express or
implied authority or consent; or
(b) that at the time when the debt was incurred, the person did
not have reasonable cause to expect:
(i) that the company would not be able to pay all its debts as
and when they became due; or
(ii) that, if the company incurred that debt, it would not be
able to pay all its debts as and when they became due."

3. Section 1311 of the Law provides that a person who does an act or thing that the person is forbidden to do by or under a provision of the Law, does not do an act or thing that the person is required or directed to do, or otherwise contravenes a provision of the Law, is guilty of an offence. It is common ground that these provisions make the conduct relied upon by Sycotex, if it is established, conduct which is an offence against the Law. Subject to s.1312, a person who is guilty of an offence against the Law is punishable, on conviction, by the penalty applicable to the offence. Section 1312 is not relevant for present purposes. Schedule 3 provides for penalties. The relevant provisions of it impose a penalty of $5,000 or imprisonment for one year or both for a breach of s.592.

4. Section 1315 of the Law provides that, in any proceedings for an offence against the Law, any information, charge, complaint or application may be laid or made by the Australian Securities Commission, a delegate of the Commission or another person authorised in writing by the Minister to institute the proceedings. A delegation or an authorisation may relate to all offences or to specified offences against the Law. Nothing in the section affects the operation of the Director of Public Prosecutions Act 1983. That Act is not relevant for present purposes; see ss. 6 and 9 of that Act and Regulation 3 of the Director of Public Prosecutions Regulations (SR 1984 No. 249 and SR 1992 No. 371). The position would be different if the offence in question were an indictable one.

5. Section 1316 provides that, despite anything in any other law, proceedings for an offence against the Law may be instituted within the period of five years after the act or omission alleged to constitute the offence or, with the Minister's consent, at any later time.

6. By its amended statement of claim, the applicant ("Sycotex") alleges that the first, second and third respondents were directors of a company, New World Alliance Pty. Limited ("New World"), and that the fourth respondent was that company's Secretary and a person who took part in its management. It is said that New World carried on the business of textile manufacturer, that a receiver and manager has been appointed in respect of its property and that it has ceased to carry on business and is unable to pay its debts. The receiver and manager was appointed on 30 October 1991 pursuant to an equitable charge granted to the Bank of New Zealand on 7 September 1984.

7. Pursuant to agreements for sale between Sycotex and New World, Sycotex sold undyed yarn to it, dyed the yarn at New World's request and delivered the dyed yarn to New World. The details of the sale agreements are particularised in Schedule 1 to the statement of claim. For present purposes, it is sufficient to note that each of the transactions occurred in the period, 8 July 1981 to 30 October 1991, i.e. the day of the appointment of the receiver and manager.

8. Paragraph 7 of the statement of claim alleges that, pursuant to agreements for the supply of dyeing services in respect of undyed yarn supplied to Sycotex by New World, Sycotex rendered the services and delivered the yarn to New World. The agreements pursuant to which this was done are detailed in Schedule 2 to the statement of claim. These agreements were made during the period 23 July to 30 October 1991. They are substantially more in number than those referred to in para. 6.

9. Paragraphs 8 and 9 of the statement of claim allege that it was a term of each of the agreements that New World would pay to Sycotex "the usual price and charge" for the goods and the services rendered. The amounts were to be paid to Sycotex on the date of delivery or alternatively on or before the expiry of terms specified in invoices. Paragraph 11 alleges that New World has failed to pay the debts owing by it to Sycotex. An amount of approximately $430,000 is involved.

10. Paragraph 13 of the statement of claim alleges that New World was insolvent as at 5 July 1991 and continued to be insolvent at all material times subsequent thereto. Paragraph 14 alleges that, immediately before the debts were incurred, the respondents had reasonable grounds to expect that New World would not be able to pay all its debts as and when they became due, or alternatively, that the respondents had reasonable grounds to expect that, if New World incurred the debts or any of them, it would not be able to pay all its debts as and when they became due.

11. Paragraph 15 of the statement of claim alleges that, in the circumstances, each of the respondents was jointly and severally liable for payment of the debts to Sycotex pursuant to s.592 of the Law. Paragraphs 16 and 17 allege that each of the first, second and third respondents, in consequence of their being directors of New World during the relevant period, owed a duty to Sycotex to have regard to the interests of Sycotex as a creditor. They were obliged to take all steps necessary to ensure that New World incurred no further liabilities to its creditors and to cause New World to cease trading. A breach of that duty is alleged in para.18 and loss and damage in para. 19.

12. The defence of the four respondents raises a number of matters not all of which are relevant for present purposes. It is enough to say that the essential allegations made against the four respondents are either denied or not admitted.

13. The matter here in question concerns the first, second and fourth respondents, but not the third.

14. On 15 February 1993 the first respondent filed his list of documents. The list was in a usual form. It was verified and was also the subject of a certificate by a solicitor who certified that, according to her instructions, the list and the statements in it were correct. Paragraph 2 of the list said that the documents enumerated in Part 2 of Schedule 1 were privileged from production on the grounds either that they were properly made the subject of a claim for legal professional privilege or that they might tend to subject the first respondent to liability to a penalty. The documents in respect of which this latter head of privilege was claimed were the documents numbered 2 to 13 inclusive in Part 2 of Schedule 1 of the list. The documents are specified with particularity. A copy of the description of them in the list is appended as part of a schedule to these reasons for judgment.

15. The second respondent's lists of documents was filed on 17 February 1993. It was in a similar form to the list filed by the first respondent. The document in respect of which privilege from inspection was claimed on the ground that it might tend to subject the second respondent to liability to a penalty was a memorandum said to be to "P. Hoobin, A. Strange, B. Munro, M. Lapworth, G. Thorn from J Carlyle, re New World Alliance, dated 20 June 1991; 2 pages."

16. The fourth respondent's list of documents was filed on 15 February 1993. It too was in a similar form. It claimed privilege from inspection on the grounds that production of the documents might tend to subject the fourth respondent to liability to a penalty, the documents being those numbered 3 to 13 inclusive in the second part of the first schedule. The relevant part of the list has also been set out in the schedule to these reasons for judgment.

17. This application was made by notice of motion filed on 31 August 1993 over six months after the lists were filed. No matter connected with this apparent delay was relied upon by any of the respondents. The notice of motion seeks inspection of the documents in respect of which the first, second and fourth respondents have claimed privilege from inspection on the ground that the production of the documents might tend to subject them to liability to a penalty.

18. The notice of motion of 31 August 1993 was supported by an affidavit of the same date sworn by Ms. M.J. Rankin, a solicitor in the employ of the solicitors for Sycotex. Her affidavit deals with a number of matters, but it is not necessary to refer to the detail of it for the purposes of deciding this application other than to mention that she has said without objection that she is not aware of any criminal proceedings on foot or foreshadowed against the respondents in relation to insolvent trading by New World or otherwise.

19. Counsel for Sycotex asked me to inspect the documents for the purpose of determining this application. At first I declined to do so but, having reflected on the matter after I reserved my decision, I decided that I should inspect them and I have done so.

20. The material which it is necessary to consider in order to determine the outcome of this application thus consists of the legislation, the amended statement of claim, the form of the three lists, the documents themselves and Ms. Rankin's affidavit. There is no other material relevant to the claim which the respondents have made. No criminal proceedings have been instituted, and there is no evidence, other than that of Ms. Rankin, whether it is likely or unlikely that any such proceedings will be commenced.

21. There was no issue between the parties about the existence of the privilege nor concerning the fact that an order for discovery was made notwithstanding the criminal liability for which ss.592 and 1311 of the Law provide. In passing, it may be noted that s.1316A of the Law provides that, in a Corporations Law criminal proceeding, a body corporate is not entitled to refuse or fail to comply with a requirement to answer a question or give information, to produce a book or any other thing or to do any other act whatever, on the ground that the answer or information, production of the book or other thing, or doing that other act, as the case may be, may tend to incriminate the body corporate or make the body corporate liable to a penalty. The provision applies whether or not the body corporate is a defendant in such a proceeding or in any other proceeding.

22. It was agreed that the appropriate course was that which had been followed, namely, for the respondents to file lists of documents and object to the production of those of them which they claimed would, if produced, tend to expose them to the imposition of penalties. The procedure followed is in accordance with the judgment of Deane J (when a judge of this Court) in Refrigerated Express Lines (A/Asia) Pty. Limited v. Australian Meat and Live-Stock Corporation (1979) 42 FLR 204. His Honour said (at 207-8):-

"It is a well-established principle that a defendant in
proceedings which are solely for the recovery of a pecuniary
penalty should not be ordered to disclose information or
produce documents which may assist in establishing his
liability to the penalty (see, generally, per Isaacs J in R. v.
Associated Northern Collieries [1910] HCA 61; (1910) 11 CLR 738, at pp.741-748;
Naismith v. McGovern [1953] HCA 59; (1953) 90 CLR 336, at pp 341-342 and
Martin v. Treacher (1886) 16 QBD 507). Even where, as in the
present case, the proceedings are not for recovery of a penalty
but to prevent and redress civil injury, a party to litigation
ought not to be compelled to provide information or produce
documents for inspection by the other party if the result
thereof will be to provide evidence against him which may be
used to establish his liability to a penalty in other
proceedings (Mayor of the County Borough of Derby v. Derbyshire
County Council (1897) AC 550, at p 552.
In the former case, that is to say in a mere action for a
penalty, a court should, in the absence of statutory provision
to the contrary, refuse to make any order at all against the
defendant for discovery or production of documents or provision
of information for the reason that the whole and avowed object
of the proceedings being the imposition and the recovery of a
penalty, an order for the production of documents or provision
of information against the defendant can, so far as the
prosecutor of the action is concerned, properly have no other
intended consequence (see R. v. Associated Northern Collieries
(1910) 11 CLR, at p 742). This is a broad and unqualified rule
whose origins are apparently to be found in a reluctance on the
part of the Court of Chancery to lend the aid of its discovery
proceedings to the common informer (see Mexborough (Earl of)
Whitwood Urban District Council (1897) 2 QB 111, at p.115 and
Heimann v. Commonwealth [1935] HCA 73; (1935) 54 CLR 126, at p 130.
In the latter case, that is in a case such as the present where
the proceedings are not for the recovery of a penalty, there is
no general rule precluding the making of an order for discovery
or interrogatories and there will ordinarily be no proper
ground for objecting to an order for production of documents or
provision of information being made. The party against whom
such an order is made is left to object to producing particular
documents or providing particular information on the ground
that such production or provision may tend to expose him to a
penalty (see Mayor of the County Borough of Derby v. Derbyshire
County Council (1897) AC, at p 553.)"

Deane J's decision has been consistently applied by judges of this Court; see, for example, R. v. Deputy Commissioner of Taxation; Ex parte Briggs (1987) 13 FCR 389 (Beaumont J), Master Builders Association of New South Wales v. Plumbers and Gasfitters Employees' Union of Australia (1987) 14 FCR 479 (Gray J), and Concrete Constructions Pty. Limited v. Plumbers and Gasfitters Employees' Union (1987) 15 FCR 31 (Wilcox J)

23. It is important, when considering the authorities in this area, to keep in mind the distinction drawn by Deane J. Many of the authorities concern the question whether discovery should be ordered at all; those authorities are not directly relevant to the present problem although some do bear on it.

24. There are three questions which arise for decision in the present case. The first is whether I should be satisfied that the evidence relied upon by the respondents and the surrounding circumstances are such as to warrant the conclusion that the documents in question may, if produced, tend to incriminate the respondents. If that question is answered in the affirmative, the next question is whether there is a real and appreciable risk of a prosecution being instituted. The third question is whether, assuming both the first and second questions are answered in the affirmative, there is available a middle course pursuant to which the documents can be made available for the applicant's inspection and, at the same time, no prosecutor will be able to use the documents in any prosecution.

25. The first of these questions, i.e. the degree of satisfaction which a court needs to have about the matter, has been the subject of a number of authorities in different contexts. Sometimes the problem arises in the run of the evidence of a witness who declines to answer a question on the ground that the answer may tend to incriminate him. In other circumstances the problem may arise in relation to interrogatories where the party answering them makes a similar claim. A third class of case is illustrated by the present where objection is taken to the other party to the litigation inspecting documents produced on discovery. A similar problem may arise in relation to the inspection of documents produced pursuant to a subpoena or notice to produce. The principles which apply are the same in each of these cases. Those principles were referred to by Bowen CJ in Eq (as the previous Chief Justice of this Court then was) in Re Intercontinental Development Corporation Pty. Limited (1975) 1 ACLR 253. His Honour said (at 259):-

"Before turning to the particular questions, it is convenient
to refer to the law relating to this head of privilege. There
seems to be no doubt that a witness being examined under s.249
(of the Companies Act 1961 (NSW)) is entitled in a proper case
to take the objection that his answer may incriminate him. The
question is as to when this objection may properly be taken.
The position appears to be that a witness is entitled to refuse
to answer a question on the ground that the answer may
incriminate him, if the answer may tend to expose the witness,
or the husband or wife of the witness, to a criminal charge or
penalty or forfeiture. (See R. v. Boyes (1861), 1 B and S 311; [1861] EngR 626;
121 ER 730; Ex parte Reynolds (1882), 20 Ch D 294; Lamb v.
Munster (1882), 10 QBD 110; Triplex Safety Glass Co. Ltd. v.
Lancegaye Safety Glass (1934) Ltd., (1939) 2 All ER 613;
Mortimer v. Brown [1970] HCA 4; (1970), 122 CLR 493 at p 495; (1972) ALR 723;
Re John Pringle (1934), 34 SR (NSW) 508 at p 512; Ex parte P.;
Re Hamilton (1957), 74 WN (NSW) 397 at p 399). The bare oath of
the witness that he is endangered is not to be regarded as
necessarily conclusive of the matter. It is for the court to
consider from the circumstances of the case, and the nature of
the evidence the witness is called upon to give, whether there
is reasonable ground to apprehend danger of prosecution or
forfeiture if the witness is compelled to answer. The danger
must be 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 proceedings will, in fact, be taken.
Two other comments may be made, namely, 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
to a witness, (see Osborn v. London Dock Co. [1855] EngR 162; (1855), 10 Ex
698); 156 ER 620. Once the court is of the view that the
witness is in danger, some latitude will be allowed to the
witness in judging for himself the effect of any particular
question (see Boyes' Case, supra, at p.330)."

26. In the Hamilton case, referred to by his Honour, Maguire J of the Supreme Court of New South Wales said (74 WN (NSW) at 399-400):

"An examination of these authorities (a reference to a number
of authorities mentioned by his Honour) and others discloses
that the following matters have been established by the various
cases: (1) a witness desirous of claiming the privilege of
silence must first be sworn; (2) the witness must claim the
privilege in answer to a specific question put to him; (3) the
witness must decline to answer the question, stating the ground
in question, namely, that to answer might incriminate him; (4)
there is no strict rule as to the form of words which must be
used by a witness to express his opinion as to whether or not
the answer would incriminate him; (5) the judge (or magistrate)
is then to decide whether or not the witness is entitled to the
privilege; (6) the bare oath of the witness that he is
endangered by being compelled to answer is not be be considered
as necessarily conclusive of the matter; (7) the court must see
from the circumstances of the case and the nature of the
evidence that the witness is called to give that there is
reasonable ground to apprehend danger to the witness from his
being compelled to answer; (8) the danger must be real and
appreciable and not of an imaginary and unsubstantial
character: a remote and naked possibility, out of the ordinary
course of the law and such as no reasonable man would be
affected by, should not be suffered to obstruct the
administration of justice; (9) the privilege of silence is not
destroyed and a witness will not be compelled to answer a
question directed to proving his commission of a criminal act
merely on the ground that, in the particular circumstances of
the case and on a balance of probabilities, it is unlikely that
he will be prosecuted. As a general rule it is true to say that
any admission of a criminal offence, of which the witness has
not hitherto been convicted, must 'tend to criminate him'
within the meaning of the rule (per Du Parcq LJ delivering the
judgment of the Court of Appeal in the Triplex Safety Glass
Ltd. (1939) 2 All ER, 613, at p.620; (10) a question which at
first sight might appear a very innocent one might, by
affording a link in the chain of evidence, become a means of
bringing home an offence to the witness; (11) if the fact of
the witness being in danger is once made to appear, great
latitude should be allowed to him in judging for himself of the
effect of any particular question (per Cockburn CJ in Boyes'
Case (1861) 1 B and S, at p.330; 121 ER, at p.738; (12) the
privilege does not continue to operate where there is a
statutory limitation of time for launching a prosecution and
this period of time has expired. (Roberts v. Allatt (1828) Moo
and M 192; 173 ER 1128; Attorney-General v. Cunard Steamship
Co. (1887) 4 TLR 177; (13) the function of the judge (or
magistrate) is to decide whether the proposed question has
really a tendency to criminate the witness or may fairly be
considered, under the circumstances of the case, as having that
tendency; (14) the claim to privilege is not to be disallowed
merely because the judge (or magistrate) might think that those
persons who might, in normal circumstances, be expected to
prosecute were likely to be soft-hearted or that a jury would
be indulgent. (Triplex Safety Glass Co. Ltd. Case (1939) 2 All
ER, at p.618)."

Reference may also be made to the judgment of Foster J in Metroplaza Pty. Limited v. Girvan NSW Pty. Limited (1992) 37 FCR 91 at 91-2.

27. I have taken these various principles into account. Counsel for the applicant relied strongly on the fact that there was no material before me except the bare bones of the claims made in the various lists. I see the force of that submission, but there are further matters to be taken into account. Firstly, an infringement of s.592 involves the infringer in criminal conduct which may attract a penalty of up to 12 months imprisonment. So the very same matters as will be relied upon by the applicant to found civil liability will, at the same time, tend to establish criminal liability. Secondly, the lists of documents of each of the respondents are specific. Documents have been listed by description and are clearly identifiable by that description. No objection to the production of large numbers of documents has been taken and the discovery of unprivileged documents, particularly by the first and fourth respondents, has been, comparatively speaking, extensive. That circumstance suggests that a degree of care was taken by those responsible for the preparation of the lists not to take objection unless there were proper grounds for doing so. Thirdly, with some reluctance, I decided that I would, as counsel for the applicant had invited me to do, inspect the documents myself. Having done so, I am persuaded that the claim has been made out. In saying what I have, I am not to be taken as expressing any view as to the significance which the documents have. All I indicate is that, on their face, there is nothing to suggest that the claim which has been made has been made irresponsibly or without some proper foundation.

28. There is then the question of the likelihood or otherwise of prosecution. An initial matter concerns the test which should be applied. This has been stated in different ways in a variety of authorities. I propose to apply the test referred to by Bowen CJ in Eq and Maguire J in the cases earlier cited, namely: will there be a real and appreciable risk of prosecution if the documents are produced for the applicant's inspection?

29. The provisions of s.592 of the Law have a substantial public importance. They are intended to discourage directors of insolvent companies from continuing to trade and thus, on behalf of their companies, incurring liabilities which the companies cannot expect to meet. The seriousness of conduct of this kind is emphasised in the legislation by the imposition of criminal, as well as civil, liability upon directors and the provision of a penalty which can involve imprisonment for up to 12 months. Until this case is tried, it may not be possible for a prosecuting authority to determine whether the facts of it warrant criminal prosecution or not. Indeed, until the case is tried, no prosecuting authority may know of it. But so long as the limitation period of five years continues to run, it cannot be gainsaid that there is a real and appreciable risk of prosecution. That period will not expire until October 1996. Even then, a prosecution may still be instituted at a later time with the Minister's consent; see s.1316.

30. In the circumstances I do not regard the risk of prosecution as remote or unlikely; in the words of the authorities, it is real and appreciable.

31. Foreseeing that this might be my view, counsel for the applicant suggested a course of action which was designed to maintain the respondents' privilege and, at the same time, give to the applicant and its legal advisers a qualified right to inspect the documents. The suggestion was that I should order that they be produced to the applicant's solicitors upon their undertaking to the Court not to divulge their contents to any person other than counsel without further order of the Court. Through its counsel the applicant also offered an undertaking to the Court not to permit the documents to be used for the purposes of any prosecution which might subsequently eventuate.

32. These submissions necessitate reference to some further authority. I shall commence with Rank Film Distributors Limited v. Video Information Centre (1982) AC 380. That case did not involve a claim for privilege such as has been made here, but was concerned with a requirement of an Anton Piller order (Anton Piller KG v. Manufacturing Processes Limited (1976) Ch 55) that the defendants give discovery of relevant documents and answer interrogatories relating to the supply and sale of infringing copies of copyright material. It was held that the defendants were entitled to rely on the privilege against self-incrimination by discovery or by answering interrogatories. If they complied with orders of that nature, there was a real and appreciable risk of criminal proceedings for conspiracy to defraud being taken against them. It is to be observed that conspiracy was the crime which concerned the House of Lords. The view was expressed that the mere fact that discovery might result in a defendant being prosecuted for breaches of s.21 of the Copyright Act 1956 (UK) was not a sufficient risk of itself to enable the privilege to be relied upon.

33. In the course of his speech, Lord Wilberforce said (at 439) that the main question was whether the defendants could avail themselves of the privilege against self-incrimination in order to deprive the plaintiffs of an important part of the relief which they sought. His Lordship added that it might seem to be a strange paradox that the more criminal the defendants' activities could be made to appear, the less effective was the civil remedy that could be granted but that was "what the privilege achieves."

34. Later his Lordship said (at 441) that s.21 of the Copyright Act created summary offences under a number of headings, some of which would have potential applicability to the defendants. For a first offence a maximum fine of 50 pounds was applicable however many infringing articles were involved. Although conspiracy to commit a breach of s.21 was itself a crime, no greater punishment could be imposed for such a conspiracy than for the substantive offence under s.21. But in addition to that kind of conspiracy, there was conspiracy to defraud. His Lordship said (at 441) that a substantial argument could be raised that the offences under the Copyright Act should not be taken into account in connection with a claim for privilege. He said that he would be reluctant to hold that in civil proceedings for infringement, the defendants could claim privilege against discovery on the ground that those same acts established a possible liability for "a petty offence". But he continued (at 441-2):-

"However, it is only too clear (and I deliberately use the
language of reluctance) that supply of the information and
production of the documents sought would tend to expose the
respondents to a charge of conspiracy to defraud. In the very
nature of this activity, a number of persons are certain to be
involved in it - in printing the master tapes, copying from the
master tapes, seeking and accepting orders, and distributing
the illicit copies. A charge of conspiracy to defraud, so far
from being, as it sometimes is, a contrived addition to other
charges, is here an appropriate and exact description of what
is being done.
....................................................
Mr. Nicholls, for the appellants (the plaintiffs), courageously
attempted to suggest an escape route on the following lines.
The courts, he submitted, must in all cases try to reconcile
protection of a defendant from possible self-incrimination with
doing justice to a plaintiff. Whatever may have been the
position when the privilege was first worked out by the judges,
modern procedure is now more flexible, and makes it possible to
do justice without denying protection. It is all the more
necessary to find a flexible approach, because so many actions
which formerly involved civil liability only are now, by modern
trends in legislation, made criminal offences. Thus many
ordinary cases of 'passing off' are now offences under the
Trade Descriptions Act 1968. If full scope is given to the
privilege against self-incrimination, potential plaintiffs, in
this area of industrial property, will fail to get a remedy in
the civil courts. Mr. Nicholls was at pains to make clear that
he was not, in these submissions, attempting to negate or
undermine the privilege against self-incrimination. This has
been too long established in our law as a basic liberty of the
subject - in other countries it has constitutional status - to
be denied. It has received modern recognition in section 14 of
the Civil Evidence Act 1968 and in this House.
It is certainly correct to say, that existing law and practice
to some extent prevent matter disclosed on discovery in civil
proceedings from being used to the prejudice of the disclosing
party. The protection is described with different words: the
matter must not be used for an 'improper' purpose: Alterskye v.
Scott (1948) 1 All ER 469, or a 'collateral object' (Bray on
Discovery, 1st ed. (1885), p.238) or, most strongly, 'otherwise
than in the action in which they are disclosed': Distillers Co.
(Biochemicals) Ltd. v. Times Newspapers Ltd. (1975) QB 613,
621, per Talbot J."

35. Later his Lordship said (at 443):-

"There are some further points on this aspect of the case.
First, I do not think that adequate protection can be given by
extracting from the plaintiffs, as a term of being granted an
Anton Piller order, an undertaking not to use the information
obtained in criminal proceedings. Even if such an undertaking
were binding (see to the contrary Triplex Safety Glass Co. Ltd.
v. Lancegaye Safety Glass (1934) Ltd. (1939) 2 KB 395) the
protection is only partial, viz. against prosecution by the
plaintiff himself. Moreover, whatever direct use may or may not
be made of information given, or material disclosed, under the
compulsory process of the court, it must not be overlooked
that, quite apart from that, its provision or disclosure may
set in train a process which may lead to incrimination or may
lead to the discovery of real evidence of an incriminating
character. In the present case, this cannot be discounted as
unlikely: it is not only a possible but probably the intended
result. The party from whom disclosure is asked is entitled, on
established law, to be protected from these consequences.
Secondly, and this was very much an argument of last resort,
Mr. Nicholls suggested that protection could be given by a
hearing, wholly or in part, in camera. But such procedure is
totally alien, except in the most exceptional cases, to our
procedure and I do not think that so wide an extension of it as
the submission involves ought to be contemplated."

36. Lord Diplock agreed (at 444) with Lord Wilberforce. Lord Fraser's judgment (at 444 et seq) is to the same effect. Lord Russell and Lord Roskill agreed (at 448) with both Lord Wilberforce and Lord Fraser.

37. In Warman Industrial Limited v. Envirotech Australia Pty. Limited, (1986) 11 FCR 478 Wilcox J, having referred to the Rank case, said (at 489):-

"The application to the present case of these authorities (his
Honour referred to a number of authorities including Rank) is
not an easy matter. On the one hand, the rule against
self-incrimination is firmly fixed in our law and not properly to be
circumvented by too restricted an application of the test of
reasonable prospect of a prosecution being launched. And
although, according to Lord Denning, the courts will look with
greater scepticism at a claim for privilege made by a party
than one made by a witness, it is clear that, once it appears
that there is a real prospect of criminal proceedings, the
court will not compel self-incrimination even by a party. On
the other hand, the upholding of a claim for privilege in a
civil case may have a drastic effect upon the ability of a
party to obtain a redress to which he or she is entitled at
law. The dilemma becomes particularly acute in a case where the
method primarily contemplated for protection of individual
rights conferred by a statute is by a civil action, the
effectiveness of which may be threatened by concern about
self-incrimination for offences inserted in the Act merely as
ancillary enforcement provisions. The Copyright Act is such a
case. It would be curious if such a statute was rendered less
effective to safeguard the rights of the individual by reason
of the fact that Parliament had thought those rights to be
sufficiently valuable as also to warrant vindication under the
criminal law.
A possible partial solution of the dilemma is that adopted in
Rank Film: to exclude from the principle about
self-incrimination offences which may be categorised as 'petty' or
as merely ancillary to civil liability. However, in a legal
system which, in the absence of special statutory provision to
the contrary, maintains an absolute right to silence in respect
of even the most trivial offences, there are conceptual
difficulties in modifying the traditional rule upon this basis.
Moreover, there are practical difficulties in that exclusions
will have to be established on a case to case basis. Not until
a decision is made - probably at an appellate level - will it
be known whether the rule is excluded in respect of a
particular offence. If the right to maintain silence is to be
overriden in particular cases because of the desirability of
making available material evidence to an affected party,
perhaps the courts should overtly adopt a balancing process;
discarding an absolute privilege against self-incrimination and
substituting a discretionary judgment wherein the nature and
degree of the risk of self-incrimination and the seriousness of
the possible offence are to be weighed against the importance
of the evidentiary material in the instant case."

38. I respectfully agree with what Wilcox J has said. But this is not an occasion on which it is useful or relevant to consider discarding the absolute privilege which presently exists. The rule concerning it is entrenched and ought not be modified by a judge sitting at first instance. In any event, the possible penalty for a breach of s.592 being imprisonment, there is no basis for categorising the offence as trivial.

39. Wilcox J went on to refer to some further authorities and said (at 490-1) that one possibility might be to restrict access to the documents to persons who are prepared to give undertakings as to confidentiality and to receive the documents, and any evidence in relation thereto, in closed court.

40. His Honour did not develop this matter further. He did not need to. The Warman case was not one involving a claim for privilege from inspection of specific documents. It was a case where a subpoena had been issued for the production of documents. Wilcox J concluded that he had power to require the documents to be produced to the Court for his inspection. This course was adopted and his Honour concluded that the claim for privilege should not be upheld. In the result, after his Honour had permitted inspection of the documents by counsel for the applicants, an admission was made. None of the material, the subject of the subpoena, was further used in the hearing; see at 491.

41. Prior to the decision in Warman, the New Zealand Court of Appeal had considered the matter in Busby v. Thorn EMI Video Programmes Ltd. (1984) 1 NZLR 461. The matter which concerned the Court was the form of an Anton Piller order. All three judges thought that compliance with orders requiring the immediate discovery and inspection of documents and the administering of interrogatories designed to ascertain the names of others infringing the copyright of the plaintiffs, exposed the defendants to a real risk of prosecution for conspiracy to defraud. Cooke J (as he then was) and Bisson J concluded that, if a defendant was required to provide information or documents which might include evidence of criminal offences, it should be on condition that they were not used for the purpose of prosecuting him. They said that, to achieve a just solution to the problem raised by the case, the "Judge-made" practice as to evidence that would be received in a criminal trial should be modified to enable information to be obtained while preserving the Judge-made privilege that a person was not obliged to give answers which would tend to incriminate him (see at 474). A ruling was made that, in a case such as the one before the Court, documents and answers properly compelled under an Anton Piller order would not be admissible in criminal proceedings for an offence related to the intellectual property which was the subject matter of the action. To ensure the observance of this rule the plaintiffs were required to undertake that they would not, either directly or indirectly, use any document which was a subject of the order, or any information obtained which was a subject of the order, or any information obtained from it, for the purpose of any criminal prosecution of the defendant, nor make the same available to the police for any purpose.

42. In Warman, Wilcox J did not need to reach a conclusion on whether the course adopted by the New Zealand Court of Appeal in Busby was an appropriate one.

43. The decision in Busby was considered by Waddell CJ in Eq in BPA Industries Limited v. Black (1987) 11 NSWLR 609. Prior to that decision, the matter was probably also considered by Spender J in Polygram Records Pty. Limited v. Monash (Australia) Pty. Limited (1985) 10 FCR 332, although the report of the case does not disclose that it was. Polygram was an application for an Anton Piller order. The application was made ex parte and the case was reported principally because it decided that this Court, which at that stage did not have original jurisdiction in copyright, had power to grant relief in the form of an Anton Piller injunction. One of the undertakings which the applicants for the order were obliged to give was an undertaking to the Court that they would not proffer to the police for the purpose of any criminal prosecution of the respondents, any document or thing which was the subject of the order or any information obtained from the performance of the order or from any answers by the respondents given pursuant to the orders (see at 335).

44. In BPA Industries, Waddell CJ in Eq considered both Rank and Busby and referred, as well, to Polygram and Warman. In referring to Busby, he quoted (at 612) the following passage from the judgment of Cooke J ((1984) 1 NZLR at 471):-

"The question becomes whether the New Zealand Courts can supply
something more, or whether any advance must be left entirely to
the legislature, as it was by the House of Lords in England and
as we are urged to do by the appellants here. In this
connection there are differences between the United Kingdom and
the New Zealand legal systems. One is that the administration
of the civil and the criminal law is rather more unified here,
with appeals from the High Court in civil cases and from that
Court and District Courts in criminal cases tried on indictment
all being dealt with in practice by substantially the same
Court. There are not the separate Divisions of the Court of
Appeal that exist in England. A second difference, probably
more important, is that a rather wider judicial control over
criminal trials is recognised in this country. It is seen as
part of the inherent jurisdiction of the Court to prevent abuse
of process by the avoidance of unfairness. A third difference,
equally important with the second, is that as Mr. Gazley
forcefully reminded us the field of evidence is one in which
this Court has been especially ready to adapt the law to meet
modern conditions."

45. In BPA Industries Waddell CJ in Eq said (at 612) that he thought it important to appreciate that the decision in Busby was made by a court which was in a position to lay down a rule dealing with the consequences in a criminal trial of requiring a defendant in civil proceedings to give self-incriminating information pursuant to an Anton Piller order. His Honour also referred to what Bisson J had said (at 487), namely, that, although the giving of an undertaking was sufficient protection to a defendant, he would have added a condition to the making of the order that any documents or information obtained should not be admitted in evidence against the defendant in any prosecution (other than for perjury or contempt of court) relating to the illicit goods. Waddell CJ in Eq observed (at 613) that there was, "of course, no way in which such an order could validly be made" by the Supreme Court of New South Wales. In passing, it should be said that in many cases it will not be a sufficient protection to make an order of the kind contemplated by Bisson J, assuming one could be made, because the order will not protect the person producing the documents or answering a question against the use of the documents for the purpose of following up a chain of inquiry which may lead to the obtaining of evidence otherwise with the consequence that the documents or answer will not need to be tendered against the accused person.

46. Waddell CJ in Eq also referred (at 613) to the dissenting judgment of Somers J in Busby. I refer generally to what Somers J said but do not find it necessary to analyse his decision in detail.

47. Waddell CJ in Eq concluded (at 613) that, in his opinion, Busby did not support the submissions made for the plaintiff in the BPA case but should be regarded as based upon circumstances of the New Zealand legal system which were not to be found in that of New South Wales.

48. I agree with Waddell CJ in Eq that the New Zealand solution to the problem has difficulties for the Australian context. The position is even more difficult in relation to this Court which does not, generally speaking, exercise criminal jurisdiction, than it would be for the Supreme Court of New South Wales. No prosecution for a breach of s.592 of the Law could be instituted in the Federal Court.

49. If the documents are produced for the applicant's inspection, one of three things may happen. The documents may be thought to be of no particular relevance or significance and will not be used or sought to be used; if that occurs, there is no problem. Secondly, the documents may be thought to be directly relevant to the issues in question and probative of the applicant's case. In that event, the applicant will tender them and they will be admissible. It would be possible for the Court to order that the documents remain a confidential exhibit and, to the extent that it needed to refer to them in its reasons for judgment, give those reasons separately in a confidential section of the judgment.

50. The third possibility is that the documents may not themselves be of direct relevance or use but may alert the applicant and its advisers to a chain or line of inquiry which would eventually expose the respondents to criminal prosecution. Thus the documents themselves would not be used in evidence, but would open up an investigation which might result in prosecution and conviction.

51. It is unnecessary to discuss the consequences of the first possibility. The consequences which may arise as a result of the second and third possibilities raise matters of difficulty. I question whether an exercise of the Court's discretion under s.50 of the Federal Court of Australia Act 1976 or otherwise, which might result in incriminating documents or answers being used in a confidential hearing, would be a proper exercise of it. It is well established that there is no confidence in an iniquity; Gartside v. Outram (1856) 26 LJ Ch 113 and Allied Mills Industries Pty. Limited v. Trade Practices Commission (No. 1) [1981] FCA 11; (1981) 55 FLR 125 and cases there cited. It is plainly iniquitous, in the sense of the rule, for a party to engage in criminal conduct. I shall say more of this after I have considered some further authorities.

52. Since Rank, Busby and Warman, there have been further decisions. I propose to refer to two of them. The first is AT and T Istel Limited v. Tully (1993) 1 AC 45. In proceedings against two of the defendants for damages for fraud and breach of trust, the plaintiffs obtained an order ex parte from Buckley J requiring the defendants to disclose information relating to dealings with certain assets and to produce copies of documents in respect of such dealings. The order prohibited the use of the material so disclosed in the prosecution of either defendant. On the application of the defendants, Wright J set aside the order insofar as it related to such disclosure on the ground that it infringed their privilege against self-incrimination. The Crown Prosecution Service were informed of the order made by Wright J and were told that the plaintiffs intended to appeal. They were asked whether they wished to intervene or make representations in the appeal. They stated that they did not intend to intervene or be heard and that, since the paragraph applied only to disclosure by the defendants in compliance with the order, it would not prevent them from using any material which they had already obtained or which they might obtain independently. The House of Lords held, amongst other things, that although the privilege against self-incrimination subsisted and could only be removed or altered by Parliament, there was no reason to allow a defendant in civil proceedings to rely on it, thus depriving a plaintiff of his rights, where the defendant's own protection was adequately secured by other means. Reference was made to the Rank case and to Reg. v. Director of Serious Fraud Office, Ex parte Smith (1993) 1 AC 27.

53. As numbers of judges who have dealt with this problem have stressed, the privilege is an important protection to persons accused of crime or to persons who may be accused of it. The privilege is an aspect of the right to silence. Its existence in this particular area of the law is, inferentially, preserved by the Corporations Law because, as mentioned, in s.1316A it is expressly provided that a corporation, but not a natural person, has no privilege against self-incrimination.

54. In the course of his judgment in Istel Lord Templeman said (at 55):-

"Having regard to the fact that Parliament has not abolished
the privilege against self-incrimination Mr. Tully would be
entitled to rely on that privilege if but only if and so far as
compliance with the order of Buckley J would provide evidence
against him in a criminal trial. There is no reason why the
privilege should be blatantly exploited to deprive the
plaintiffs of their civil rights and remedies if the privilege
is not necessary to protect Mr. Tully. In order to make the
exercise of the privilege unnecessary in the present case
Buckley J included in his order the following paragraph: ..."

His Lordship then referred to the terms of the order which provided that no disclosure made by the defendants was to be used as evidence in the prosecution of an offence alleged to have been committed by the person required to make the disclosure.

55. His Lordship went on (at 55) to refer to the decision of the Court of Appeal in England in In re O. (Restraint Order: Disclosure of Assets) (1991) 2 QB 520. He continued (at 56):-

"I agree that the Crown Prosecution Service cannot be bound
against their wishes. I also agree with the Court of Appeal in
In re O. that the Crown Prosecution Service can be bound if
they consent to be bound."

56. His Lordship referred to the correspondence with the Crown Prosecution Service and to the letter written by it. He concluded (at 57):-

"In view of that letter it is clear that the Crown Prosecution
Service do not seek to employ any of the material disclosed by
Mr. Tully in compliance with the order of Buckley J but of
course the Crown Prosecution Service can use any material which
the Crown Prosecution Service have already obtained and any
other material which they obtain 'independently' of the present
proceedings. On behalf of Mr. Tully it was argued that the
disclosures made by Mr. Tully in compliance with the order of
Buckley J might be 'leaked' to the Crown Prosecution Service or
might suggest to the Crown Prosecution Service new lines of
inquiry. It was also suggested that a policeman attending court
at the trial of the present proceedings might take note of
evidence based on the disclosures and use that evidence. My
Lords, in view of the terms of the letter from the Crown
Prosecution Service I am satisfied that the Crown Prosecution
Service cannot profit from any disclosures in the present
proceedings. They can only rely on evidence obtained
independently of these proceedings."

57. Lord Ackner (at 63), having referred to the Rank case, considered that the defendants were sufficiently safeguarded He expressed his agreement (at 58) with Lord Lowry and (at 63) with Lord Templeman. He also said (at 63-4):-

"... I would allow this appeal on the ground that the courts
are entitled to substitute some different protection in place
of the privilege against self-incrimination, providing that
such protection can properly be considered as adequate
protection. I would reject the submission made to the Court of
Appeal that so long as the terms of paragraph 33 had been
brought to the notice of the prosecution authorities they would
be unable to adduce in a criminal court evidence disclosed in
compliance with the order. Not only must the prosecuting
authorities have notice of the proposed order but they must
unequivocally agree not to make use, directly or indirectly, of
material divulged as a result of compliance with the order. It
must remain entirely a matter for the discretion of the
prosecuting authorities as to whether they are in a position to
and are prepared to give an assurance. Without such an
assurance the court would not be able to provide a substitute
protection which was adequate."

58. Amongst other things, Lord Lowry said (at 69):-

"It should, I think, be emphasised that the present decision of
your Lordships does not represent a breakthrough in relation to
the principle against self-incrimination; it is a decision on
its own facts in the light of that principle."

59. Lord Goff agreed (at 64) with Lord Ackner. Lord Griffiths dissented (at 57-58).

60. The last case to which I refer is Reid v. Howard (Supreme Court of New South Wales, Court of Appeal, 29 July 1993, unreported). The principal judgment was delivered by Handley JA. His Honour said (at 1) that the appellant, who had practiced as a chartered accountant for a number of years, may have misappropriated sums in excess of $2 million from the various respondents. The respondents commenced proceedings to protect their right to trace the misappropriated funds into the appellant's assets. An order was made for the service by the appellant of an affidavit of assets. The affidavit was not filed. Instead, the appellant claimed privilege against self-incrimination. The respondents began proceedings for contempt.

61. On legal advice the appellant had signed a statement which had been given to the police in which he said that, from the middle of 1987 onwards, he had misappropriated funds entrusted to him by the respondents. Powell J at first instance overruled the claim of privilege. He held that, having regard to the disclosure in his signed statement given to the police, the jeopardy in which the appellant stood would not be any greater if he were obliged to file affidavits of assets. Handley JA held (at 5) that the appellant's submission that the orders requiring him to file and serve affidavits of assets would expose him to greater jeopardy should be upheld.

62. Handley JA went on to consider a further matter. The Court that granted leave to appeal against Powell J's order considered that the inherent jurisdiction or s.23 of the Supreme Court Act 1970 (NSW) might enable orders to be made which protected the defendant against the risk of self-incrimination but enabled the appellants' civil rights to be enforced prior to the completion of criminal proceedings.

63. Leave to appeal was granted subject to a number of conditions and orders. It is unnecessary to refer to the majority of these. It is enough to say that the appellant was ordered to swear "proper affidavits in accordance with such orders (i.e. the orders of Powell J) to the best of his knowledge, skill and ability and lodge the affidavits and two copies of each in a sealed envelope with the Registrar of this Court." There were then provisions dealing with the position which would arise in the event that the appeal was allowed or dismissed or if there were an application for special leave to appeal to the High Court. In the event that the respondents were ultimately successful, the Registrar was directed to deliver copies of the affidavits sworn in each proceeding to the nominated partner or employed solicitor for the respondents. The critical order was as follows:-

"The solicitors for the opponents (to the applications for
relief to appeal, i.e. the respondents) in each proceeding and
any person to whom disclosure is made in accordance with this
order are hereby restrained from disclosing by themselves,
their servants or agents those copy affidavits or any further
copy thereof or the information therein to any person other
than the nominated partner and employed solicitor, their
counsel and their clients, or the nominated partner and
employed solicitor for the other opponents or their counsel,
from making any further copy thereof, and from parting with
possession of such copy affidavits or any further copy thereof
whether pursuant to a subpoena, search warrant or otherwise
except to their counsel, without the leave of a Judge of the
Equity Division."

64. Handley JA said (at 9) that the orders and conditions were made in order to secure prompt compliance with the orders for the filing and service of affidavits of assets, and, at the same time, to protect the appellant from their disclosure and to preserve the utility of the appeal. He went on to consider s.23 of the Supreme Court Act and a number of authorities including the Rank case and the Busby case. Reference was then made to the decision of Wilcox J in Warman and to another decision of his, Concrete Constructions Pty. Limited v. Plumbers and Gasfitters Employees' Union (supra) where Wilcox J said (15 FCR at 48-49) that it was always open to a Court to impose conditions upon access which will preclude the use of information in criminal proceedings. What Wilcox J said was obiter. As authority for the proposition he enunciated, he referred to Busby, but he did not refer to BPA Industries.

65. Reference was then made by Handley JA to the Istel case and to some decisions of courts in the United States. Eventually his Honour referred to the passage earlier quoted from the judgment of Lord Ackner in Istel (see at 63-4) where his Lordship, amongst other things, said that it was in the public interest that the Court should remedy the injustice occasioned by the inability of the plaintiff in civil proceedings to obtain access to relevant documents if this could be achieved while ensuring that the defendant should not be subject to an order, compliance with which might tend to incriminate him. With this statement Handley JA agreed, but he disagreed with what Lord Ackner had said about the need for prosecuting authorities to have notice of the order and for them "unequivocally" to agree not to make use, directly or indirectly, of material divulged as a result of compliance with the order. Handley JA did not agree with this part of what Lord Ackner had said because he was not persuaded that the effective exercise of the jurisdiction depended on the agreement of the prosecuting authorities. Later his Honour said (at 17) that he could discern no reason in principle why the prosecution authorities should be immune from proceedings for contempt of court if they knowingly acted to thwart or frustrate orders of a civil court. He concluded (at 18) that any action by the prosecution authorities to obtain the possession of the sealed envelope would be contempt.

66. With respect, I have no problem with the proposition that, if a superior court of record makes an order, persons not party to it, whether the Crown or not, will, provided they have notice of its terms, be in contempt of court if they do something which tends to thwart or frustrate it. But the essential question which one must answer before that conclusion becomes relevant is whether the Court should make an order of this kind at all. I have earlier touched on this question when mentioning the exercise of the Court's discretion under s.50 of the Federal Court of Australia Act.

67. I do not question the Court's jurisdiction or power to make such an order. To me the matter is one concerning the proper exercise of a discretion. The privilege against self-incrimination is entrenched in our law. It is true that it is judge-made law, not statutory law. But until the principle is modified to allow for the qualification of it which is necessary if orders of the kind made by the Court of Appeal in Reid are to be made, it does not seem to me to be a proper exercise of discretion to take that course. Certainly, I do not think that it is an appropriate course for a judge sitting at first instance to take. If the law relating to the privilege against self-incrimination is to be altered, it needs to be altered by a consensus of at least three judges constituting an intermediate court of appeal.

68. The other side of the coin is the position of the prosecutor. I have referred to the fact that there can be no confidence in an iniquity. This is another circumstance to be taken into account in determining whether the discretion should be exercised. I emphasise that once the discretion is exercised, it will follow that the Court's order will stand and the prosecuting authority seeking to obtain access to the documents may be at risk as to contempt. But should the Court in the proper exercise of its discretion inflict on a prosecuting authority against its will, or without knowing what its attitude is, a situation in which it will be effectively denied access to documents (eg by the execution of a search warrant) which could be of critical importance for the prosecution? I think that this is what troubled Lord Ackner in Istel and accounts for what he said about the matter. Having reflected on the question, my own respectful opinion is that what Lord Ackner said is to be preferred to what was said by Handley JA and agreed in by the two other members of the Court of Appeal who constituted the Court in the Reid case.

69. I do not consider it appropriate, therefore, to make an order of the kind that was made in Reid.

70. Is it then appropriate to follow the course adopted by Spender J in Polygram? The undertaking there required the applicant for relief from proffering to the police for the purpose of any criminal prosecution of the respondents any document or thing which was the subject of the Anton Piller order made in that case. A matter which should be noted is that, in my own experience, it has not become the general practice of the Court to include such a requirement in Anton Piller orders which it makes. I acknowledge that one can only speak of one's own experience. Certainly I have not followed that course myself and I have not observed it having been followed on the occasions upon which cases in which Anton Piller orders made by other judges have come to me at later stages of their development. My experience has been that the Rank case has been accepted as a proper guide so that the problem has not arisen.

71. Cases such as the present concern a tension between two public interests. These are the public interest in persons being able properly to prosecute civil claims and, for this purpose, to have available all relevant evidence, and the public interest in persons who are, or who may be, accused of crime, as an element of their right to silence, being entitled to claim privilege from answering questions or producing documents which may tend to incriminate them. It is apparent from decisions of courts in England, New Zealand and this country that many judges are unhappy about the continued existence of the privilege at least in its present unqualified form. This has led them to seek ways around it; ways that are said not to circumscribe it or cut it down, but which are thought to reconcile the tension between the two public interests which are in play. But, so it seems to me, the various solutions encounter difficulty because they tend to impinge upon other public interests such as the public interest in judicial proceedings being heard in public and the public interest in members of the community being able to discharge, in an unfettered way, their public duty to inform law enforcement agencies of criminal conduct and to give them unrestricted assistance in order that the criminal law may be properly administered and enforced.

72. In my opinion, so long as the law remains as it is, the privilege against self-incrimination must be upheld in the sense that it must be given its full effect. Otherwise, situations will arise in which documents tendered or answers given in public proceedings which provide evidence of criminal conduct will not be permitted to be used in criminal proceedings. This is something which many members of the public may find difficult to understand; it will have the tendency to bring the law into disrepute.

73. If the law in relation to the privilege against self-incrimination is to be changed or substantially modified, either Parliament or the courts at the appellate level will need to grasp the nettle and do what is necessary rather than taking the present course of devising ad hoc solutions which are intended to achieve some sort of satisfactory compromise in a given case.

74. It follows that, in my view, there is no available middle course pursuant to which the documents may be produced for inspection by the applicant and its legal advisers, whether in confidence or otherwise, and at the same time, the privilege against self-incrimination is preserved.

75. In the result, I decline to make any order which will enable the applicant and its legal advisers to gain access to the documents. The applicant must pay the respondent's costs of so much of the notice of motion as was concerned with that question. However, in order that the documents may be preserved, I propose to direct that they be placed in a sealed envelope and given to the Registrar for safe-keeping. The envelope is not to be opened except upon the order of a judge of this Court. There will be liberty to apply.