Aitken & Murphy
[2011] FamCA 785
•12 October 2011
FAMILY COURT OF AUSTRALIA
| AITKEN & MURPHY | [2011] FamCA 785 |
| FAMILY LAW - EVIDENCE – Where the applicant sought a certificate under s 128 of the Evidence Act 1995 (Cth) in respect of particular evidence in s 90SM proceedings – Whether s 128(1) and (2) were satisfied – Whether the applicant should be given a certificate under s 128 in respect of particular evidence sought to be provided in affidavits, financial statements and in oral evidence in the proceedings FAMILY LAW - DISCOVERY – Where the respondent argued that the applicant’s Initiating Application should be struck out for want of prosecution given a failure to comply with discovery procedures generally and pursuant to consent orders – Whether the applicant’s Initiating Application should be dismissed for want of prosecution FAMILY LAW - CERTIFICATE – Form of certificate given to the applicant attached |
| Crimes Act 1914 (Cth), s 6 Criminal Code 1995 (Cth), ss 11.1, 11.4, 11.5, 136, 137 Family Law Act 1975 (Cth), ss 4, 4AA, 79, 90SM Family Law Rules 2004 (Cth), rr 1.12, 2.02, 11.06, 12.02, 13.01, 13.04, 13.05, 13.07, 13.13, 13.22, 15.09 Evidence Act 1995 (Cth), s 128 Evidence Amendment Act 2008 (Cth), s 63 Income Tax Assessment Act 1997 (Cth), s 995-1 Taxation Administration Act 1953(Cth), ss 8A, 8C, 8D, 8K, 8L, 8N, 8Q, 8T, 8U |
| Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, discussed Atkinson & Atkinson (1997) FLC 92-728, discussed Briginshaw v Briginshaw (1938) 60 CLR 336, cited Ferrall & Blyton (2000) FLC 93-054, applied J v D & Ors (2006) FLC 93-280, discussed Sheikholeslami v Tolcher [2009] NSWSC 920, discussed Triplex Safety Glass Co Ltd v Lancegaye [1939] 2 KB 395, cited |
| APPLICANT: | Mr Aitken |
| RESPONDENT: | Mr Murphy |
| FILE NUMBER: | MLC | 11907 | of | 2010 |
| DATE DELIVERED: | 12 October 2011 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Young J |
| HEARING DATE: | 15 September 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Bartfeld QC |
| SOLICITOR FOR THE APPLICANT: | Kennedy Partners |
| COUNSEL FOR THE RESPONDENT: | Ms Smallwood |
| SOLICITOR FOR THE RESPONDENT: | T.J. Mulvany & Co |
ORDERS
IT IS ORDERED:
That in support of his Initiating Application filed 22 December 2010 the applicant file and serve an amended Financial Statement and affidavit fully detailing his financial circumstances, in accordance with rules 13.04 and 13.05 of the Family Law Rules 2004 (Cth), on or before 4.00pm Monday 7 November 2011.
That pursuant to s 128 of the Evidence Act 1995 (Cth) a certificate be given to the applicant in relation to the particular evidence given willingly by him in these s 90SM proceedings insofar as that evidence may tend to prove that the applicant has committed an offence under Division 2 of the Taxation Administration Act 1953 (Cth), s 6 of the Crimes Act 1914 (Cth) and ss 11.1, 11.4 or 11.5 of the Criminal Code1995 (Cth) and only as contained in:
(a)the amended Financial Statement and affidavit fully detailing the applicant’s financial circumstances referred to in paragraph 1 of these orders; and
(b)any further amended Financial Statement and affidavit of the applicant in these s 90SM proceedings.
That a sealed copy of the certificate pursuant to s 128 of the Evidence Act 1995 (Cth) remain on the court file.
That any amended Financial Statement or affidavit filed and served by the applicant in these s 90SM proceedings containing evidence the subject of the s 128 certificate have attached a sealed copy of the certificate.
That the respondent’s Application in a Case filed 26 May 2011 be otherwise dismissed.
That the applicant’s Response to an Application in a Case filed 24 June 2011 be otherwise dismissed.
That the parties costs of and incidental to the hearing of this application be reserved pending further submissions.
That the parties file and serve written submissions as to the basis and quantum of costs not to exceed five pages in length within seven (7) days.
That all extant applications be otherwise listed for case management and directions before Registrar Sikiotis on a date to be fixed.
IT IS CERTIFIED
That pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) this matter reasonably required the attendance of Senior Counsel for the applicant and Counsel for the respondent.
IT IS NOTED that publication of this judgment under the pseudonym Aitken & Murphy is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 11907 of 2010
| Mr Aitken |
Applicant
And
| Mr Murphy |
Respondent
REASONS FOR JUDGMENT
The applicant and respondent lived in a same sex relationship, on the applicant’s version from December 2004, and on the respondent’s version from July 2005, until January 2010 when their relationship broke down irretrievably and they have since that date lived separately and apart. The applicant is 28 and the respondent 31.
The applicant’s Initiating Application was filed 22 December 2010 and sought a final adjustment of property interests which was to be further particularised at a time when the respondent had provided full financial disclosure. Otherwise various interim injunctive orders were sought.
That Application was supported by an Affidavit and Financial Statement filed contemporaneously and I have read and considered the evidence in each of those documents as it is relevant to the interim proceedings now listed before me for hearing and determination.
The Response to the Affidavit was filed 30 March 2011 and the effective final order sought by the respondent was for each of the parties to retain for their sole use and benefit all real and personal property, assets and superannuation then held in their respective names and for each of them to be responsible for their personal liabilities.
In support of that Response an Affidavit and Financial Statement were contemporaneously filed by the respondent and again I have read and considered the evidence therein.
On 26 May 2011 the respondent filed an Application in a Case wherein he sought orders:
(a)that pursuant to s 106A of the Family Law Act 1975 (Cth) the Court appoint an officer of the Court to sign or execute a withdrawal of the caveat in the name of the applicant and then to do all such acts and things necessary to give validity and operation to the withdrawal of that caveat;
(b)that the Initiating Application be struck out;
(c)that the applicant pay the costs of and incidental to that interim Application.
In support of that Application the respondent filed and served and relies upon:
§his Affidavit filed 26 May 2011; and
§his further Affidavit filed 30 June 2011.
The applicant filed his Response to the interim orders sought on 24 June 2011 and in that document sought the following orders:
“1.That the Application in a Case filed 26 May 2011 on behalf of [Mr Murphy], the Respondent in the substantive proceedings (“the Respondent”) be dismissed.
2.That the Respondent pay the costs of the Applicant [Mr Aitken] of and incidental to the Application in a Case.
3.That the time for compliance by the Applicant with paragraph 5 of the Consent Orders made by this Honourable Court on 29 March 2011 be extended to a date 7 days following the issue by the Australian Taxation Office of amended assessments for the Applicant for the financial years ending 30 June 2005, 2006, 2007, 2008, 2009 and 2010.
4.That the Applicant have leave to file:
4.1An amended Financial Statement or Affidavit of Financial Circumstances.
4.2An affidavit in opposition to the Application in a Case.
5.That a Certificate be granted to the said [Mr Aitken] under the provisions of Section 128(3) of the Evidence Act (Cth) and that such Certificate cover:
5.1The documents filed by the Applicant in accordance with the leave granted under paragraph 4;
5.2Such affidavits of evidence in chief as may be filed by the Applicant or any witnesses on his behalf in the proceedings;
5.3Oral evidence given by the Applicant and any witnesses on his behalf in these proceedings.
6.Such further or other orders this Honourable Court deems fit.”
In support of those orders sought and primarily the Certificate requested pursuant to s 128(3) of the Evidence Act 1995 (Cth) the applicant relied upon:
§the Affidavit of his accountant, Ms C sworn and filed 11 August 2011; and
§his further Affidavits filed on 25 August 2011 and 24 June 2011.
I have carefully read and evaluated all of the affidavit evidence filed with the Court for the purposes of this interim hearing and determination.
In summary there are three interim issues that I am asked to determine on the basis of the evidence filed and the legal submissions of Mr Bartfeld QC for the applicant and Ms Smallwood of Counsel for the respondent. Those issues are:
1)the granting of the Certificate requested pursuant to s 128 of the Evidence Act 1995 (Cth);
2)the application to strike out the Initiating Application; and
3)consequential costs orders, if just.
These proceedings have had a number of interlocutory hearings which I have summarised.
On 29 March 2011 Registrar Lethbridge made orders by consent specifically providing for the filing of further court documents and as to discovery and disclosure. For that purpose a schedule of documents, statements and financial information were prepared and identified as Schedules “A” and “B” and they were annexed to the orders and were required to be discovered by 29 April 2011.
Additionally the Registrar made, by consent, an injunctive order in the following terms:
“That the Respondent be restrained from disposing of, dealing with or further encumbering:
3.1 [… D Street, Melbourne Suburb 1];
3.2 [… C Street, Sydney Suburb 1], New South Wales;
3.3without first giving the Applicant 28 days prior written notice by his solicitors of the proposed dealing and the Applicant provide withdrawals of caveat in relation to those properties within 7 days”.
At the making of those initial consent orders both parties were then represented by very experienced Junior Counsel and instructed by their present solicitors.
The matter was next listed before Registrar Lethbridge on 20 June 2011 at which time Ms Smallwood of Counsel represented the respondent and Mr Bartfeld of Senior Counsel then represented the applicant. On that occasion further procedural orders were pronounced, a Financial Conciliation Conference was fixed and all proceedings were adjourned to the Judicial Duty List before me for the hearing of the interim applications.
On 11 August 2011 the matter was before me and I made orders fixing the opposing interim applications as a one day interim defended hearing on 15 September 2011 and further directed the filing of written submissions, not to exceed ten pages in length. Subsequently the written legal submissions were filed by Mr Bartfeld QC on behalf of the applicant and Ms Smallwood for the respondent and I have read and considered those submissions which Counsel elaborated on in their oral argument before me in the hearing of the interim applications on 15 September 2011.
As to the factual background and evidence of each of the parties, in his Affidavit filed 24 June 2011 the applicant first dealt with the developing issues surrounding the provision of full and frank disclosure of all relevant financial documents and his application for the grant of a Certificate pursuant to s 128 of the Evidence Act 1995 (Cth).
In that Affidavit the Applicant deposed as follows:
“6.I am aware that I have an obligation to make a full and frank disclosure of all relevant financial matters in the proceedings current before this Honourable Court and, I wish to do that. Subject to the matters set out in paragraphs 7 – 13, I am willing to produce all documents and to give evidence in relation to all issues relevant to the matters for determination of the proceedings by the Court.
7.On 29 March 2011 an order was made by Registrar Lethbridge which provided, inter alia, that on or by 29 April 2011 [Mr Murphy] and I exchange particular financial documents. Although I have made partial discovery I have not yet fully complied with that order as if I do, or swear and file affidavit material in relation to certain aspects of this matter, I have been advised that this may tend to prove that I have committed an offence against or arising under an Australian law or am liable to a civil penalty.
8.I have retained an accountant, [Ms C] of [Accounting Firm 1] to, on my instructions, make voluntary disclosure to the Australian Taxation Office on my behalf. That voluntary disclosure has been made and I am now awaiting amended tax assessments for the financial years ending 30 June 2005, 2006, 2007, 2008, 2009 and 2010. I anticipate receiving those amended assessments within 28 days.
9.I object to providing any additional documents as and by way of discovery or to giving any evidence in relation to this matter including a reply to the Application in a Case and in answer to the affidavit in support (save as referred to at paragraph 10 hereinunder) in the absence of a certificate being given by the Court.
10.I further object to answering [Mr Murphy’s] 26 May 2011 Affidavit in the absence of such Certificate save to say:
10.1I have provided [Mr Murphy] with the executed withdrawal of caveat in relation to the property known as and situate at [… D Street Melbourne Suburb 1];
10.2On 9 June 2011 I made partial discovery to [Mr Murphy] of the financial documents relevant to these proceedings.
11.I respectfully request that this Court grant me a Certificate under Section 128 of the Evidence Act 1995 (Cth).
12.Subject to such Certificate being granted I seek leave to file:
12.1An amended Financial Statement or Affidavit of Financial Circumstances in discharge of my obligations of disclosure;
12.2An affidavit in opposition to the Application in a Case and in response to the affidavits filed by [Mr Murphy] in relation to that application.
13.I further seek that such Certificate cover the evidence contained in the documents referred to in paragraph 12 together with the evidence of such other affidavits as I may swear in these proceedings, any witness affidavits filed on my behalf and any oral evidence given by me or such witnesses in the court of these proceedings insofar as such affidavit or oral evidence relates to the issues in respect of which the Certificate is sought”.
In the affidavit of Ms C, filed 11 August 2011, the applicant’s accountant (“the accountant”) it was deposed at paragraph 4 that:
“4. [Mr Aitken] informed me he had received income from additional services relating to his field of employment during the years spanning 2004 through to 2010. I informed [Mr Aitken] that the income received was in fact business income and was therefore assessable. I thereafter received from [Mr Aitken] instructions to amend all relevant income tax returns and to make voluntary disclosure of the additional income to the Australian Tax Office (“ATO”).”
Annexed to the affidavit are copies of the applicant’s 2009 and 2010 amended assessments and the notices of amended assessments issued by the ATO for 2009 and 2010. In addition the amended assessments for 2005 to 2008 are also annexed to the affidavit. The accountant deposed at paragraph 9 to 11 that the ATO refused to accept the 2005 to 2008 amended assessments and that an objection had been lodged in relation to that decision (although those amended assessments were later accepted). In addition, she further deposed at paragraphs 12 to 13 that:
“12.Further, on or about 15 June 2011 and having informed [Mr Aitken] of the income received (sic) was in fact a business income and was therefore assessable, I sought [Mr Aitken’s] instructions to make application for an ABN and to prepare all necessary Business Activity Statements (“BAS”) for the period 2004 to the period ending 31 March 2011 (“the BAS statements”). [Mr Aitken] provided me with all source documents and instructions necessary to enable me to make application for the ABN and to prepare the necessary BAS statements.
13.On or about 20 July 2011, I lodged on [Mr Aitken’s] behalf, the BAS statements. The BAS statements were processed by the ATO. The total outstanding on [Mr Aitken’s] client integrated account to the ATO for the period calculated to 31 March 2011 is $89,031.55. This amount comprises the outstanding GST liability of $55,872.00 and the general interest charges (GIC) of $33,159.55. At the time of processing by the ATO, it had not imposed late lodgement penalties. However, penalties may be charged at a later date.”
It is clear from the above that the applicant has, in addition to the personal income tax assessment amendments, significant business income tax related amendments. The accountant detailed the position of the applicant at paragraph 14 of her affidavit and deposed that:
“14.The ATO has the discretion to remit in full or part thereof the GIC. [Mr Aitken] is required to pay the full outstanding debt of $89,031.55 and then request a remission in full or in part of the GIC. The $89,031.55 is to be paid by 2 September 2011. Annexed hereto… is a client account statement dated 1 August 2011 summarising the amounts payable by [Mr Aitken] on the income tax account of $59,255.96 and the integrated client account of $89,031.55 being a total, as at this date, of $148,287.51.”
The applicant swore and filed a further Affidavit on 25 August 2011 and it was intended that this Affidavit update his purported continuing financial disclosure that had been required by earlier Court orders. In this Affidavit the applicant further deposed as follows:
“9.At the time of filing my June affidavit I had sought that the Section 128 Certificate cover the documents outlined at paragraph 8 herein. However, since the filing of my June affidavit [Ms C], on my instructions, has lodged amended tax returns on my behalf with the Australian Taxation Office (“ATO”) for the years ending 30 June 2005 through to 20 June 2010 and BAS statements for the period 2004 to 31 March 2011. Those amended returns have been accepted by the ATO which has issued amended assessments for the 2009 and 2010 years. [Ms C’s] affidavit annexes the amended assessments, and summarises the dealings with the ATO in relation to this matter on my behalf. I adopt [Ms C’s] affidavit and say that the contents therein are true and correct.
10.Since the filing of her affidavit [Ms C], on my behalf, has been notified by the ATO that it has allowed an extension of time for the amended returns for the years ending 30 June 2005 through to 30 June 2008. Amended assessments are to be issued in due course by the ATO. Annexed hereto and marked “LA1” is a copy of the letter dated 11 August 2011 from the ATO addressed to me care of [Ms C’s] office.
11.As at the date of swearing this affidavit, I am indebted to the ATO, as a result of the lodgement and acceptance of the amended assessments and the BAS statements, in the sum of $59,255.96 for tax for the 2009 and 2010 years, and $89,031.55 in relation to BAS. I anticipate that once the amended assessments for the 2005 to 2008 years referred to in paragraph 10 are issued by the ATO, I am likely to owe an additional amount of approximately $123,792.00 plus any interest charged to the ATO. I am currently making arrangements to borrow the $89,031.55 for the BAS and $59,255.96 for tax for the 2009 and 2010 years, in order to pay these liabilities as soon as possible. I have instructed [Ms C] to, on my behalf, negotiate with the ATO a payment plan for the tax payable for 2005 to 2008, once those amended assessments issue.
12.With the amended assessments having been accepted for the relevant years I no longer seek the Section 128 Certificate insofar as it relates to documents of a financial nature to be discovered by me. The documents are the source documents for the amended tax and BAS returns which have now been submitted to and accepted by the ATO. Contemporaneously with serving this affidavit upon the respondent’s solicitors I have instructed my solicitors, Kennedy Partners, to provide a copy of each and every document listed at paragraph 8 herein to the respondent’s solicitors as and by way of discovery.
13.I now seek that the Section 128 Certificate encompass and cover only the following:
13.1Any amended financial statement or affidavit of financial circumstances filed by me in discharge of my obligations of disclosure to this Honourable Court and in connection with these proceedings.
13.2Any affidavit in opposition to the Application in a Case and in response to the affidavits filed by [Mr Murphy] in relation to [Mr Murphy’s] application.
13.3The evidence in any such other affidavits as I may swear in these proceedings, any witness affidavits filed on my behalf or any oral evidence given to me or such witnesses in the course of these proceedings insofar as such affidavit or oral evidence relates to any matter which may tend to prove that I have committed an offence against or arising under any Australian law or I am liable to a civil penalty.
14.Unless the Certificate is granted I am concerned that any evidence which I may be required to give may provide evidence for my prosecution for an offence against a taxation law or an offence against:
14.1Section 6 of the Crimes Act 1914; or
14.2Section 11.1, 11.4 or 11.5 of the Criminal Code;
being an offence that relates to an offence against a taxation law. A convention will render me liable to a criminal penalty.”
Thus the updated evidence of the applicant was that he had lodged updated and amended taxation returns for the period from June 2005 through June 2010. The total of the amended taxation assessments and interest, costs and penalties thereon are yet to be finalised and will ultimately exceed the amount identified in paragraph 11 of the above Affidavit.
The applicant no longer seeks to argue for the extension of the protection offered by a s 128 Certificate to cover documents of a financial nature disclosed and discovered by him set out in paragraph 8 of the above Affidavit. Further his Senior Counsel conceded in his oral submissions that no such indemnity is sought for any witness who may file Affidavits or give evidence on the applicant’s behalf. In summary therefore the applicant seeks a Certificate to protect any evidence that he gives in these proceedings, whether on affidavit, in a financial statement, or orally, in giving evidence in chief, or under cross examination, or in re-examination. Significantly, however, the protection is sought “to cover the class of offences created to enforce taxation law” as set out in paragraph 14 of the applicant’s Affidavit above.
The second application before the court is the respondent’s Application to strike out the applicant’s Initiating Application, with costs. In support of that application the respondent has detailed in his Affidavit filed 30 June 2011 what is said to be the failure on behalf of the applicant to make proper discovery and disclosure and it is contended by the respondent that the breach is continuing. In this regard I have, in particular, read and considered paragraphs 7, 8, 12, 18, 19 and 20 of the respondent’s 30 June 2011 Affidavit.
A further issue raised by the respondent is the applicant’s inconsistent evidence particularly as to his financial circumstances given his initial affidavit evidence and the notation attached to the minutes of consent orders made 29 March 2011 that included a warranty given by the applicant that there had been no material change to his financial circumstances post separation.
In addition, Counsel for the respondent highlighted that it appeared that the applicant was, and may now be, in possession of an expensive motor vehicle allegedly registered in his name and of a value of approximately $180,000, although the vehicle is said by the applicant to be owned by the applicant’s flatmate (see letter of 27 May 2011 of the applicant’s lawyers, annexed as “JM1” to the respondent’s affidavit, filed 30 June 2011). The respondent asserted in paragraph 13 of his Affidavit that he personally witnessed the applicant driving that motor vehicle in Melbourne Suburb 1 and Melbourne Suburb 2 between 11 May and 13 May 2011. That observation is led by the respondent’s Counsel to support the conclusion that the applicant is very selective in his discovery and disclosure of his financial circumstances and his current domestic situation.
Further, the respondent in his 30 June 2011 affidavit highlighted potential payments from the applicant’s employer to the applicant in relation to a company, A Pty Ltd, which the respondent suggested the applicant has an interest in, and that the interest has not been disclosed in accordance with the 29 March 2011 consent orders. Finally, in submissions, Counsel for the respondent highlighted that the applicant may not have disclosed statements of all of his accounts held with the Bank of Cyprus.
THE SUBMISSIONS OF THE PARTIES – THE APPLICANT
Senior Counsel for the applicant submitted that s 90SM, in providing for the alteration of property interests on the breakdown of a de facto relationship, should be interpreted and applied in the same manner as s 79 of the Act for the alteration of property interests with respect to the property of parties to a marriage. It was submitted accordingly that the full and frank disclosure required in s 79 proceedings, as stated by the Full Court in Hickey & Hickey & the Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at 78,386, paragraph 40, was equally applicable to s 90SM proceedings. The Full Court in that decision stated:
“40. Section 79, unlike s 78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s 79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and TatevTate (2000) FLC 93-047.”
Senior Counsel continued and argued that the underlying policy of the Family Law Act 1975 (Cth) (“the Act”) in relation to property division is that any division must be just and equitable. He submitted that in property proceedings the court exercises a very broad discretion and must therefore be provided with all of the relevant material upon which that discretion is to be exercised, hence the requirement for full and frank disclosure. It was submitted that consequently the applicant in the proceedings is not a “volunteer” in the sense that he cannot be selective in the evidence he provides to the court and therefore his disclosure must include the “problems that arise under the taxation law”.
As referred to above in paragraph 25 Senior Counsel for the applicant conceded the point made by counsel for the respondent that the Certificate sought by him could not, as sought in paragraph 13.3 of the applicant’s Affidavit, filed 25 August 2011, cover evidence given by any person in the proceedings other than the applicant. The Certificate was only sought in relation to the applicant and the evidence that he would give to the Court in respect of the matters set out in paragraph 13 and 14 of his affidavit. It was acknowledged that the Certificate sought no longer applied to documents of a financial nature that the applicant had already disclosed. Senior Counsel stated that his client was not seeking a Certificate to avoid or evade any tax obligations and that the concern related to any investigations that may have or could be commenced in relation to offences associated with dishonesty or other related criminal or civil penalties arising in relation to taxation and that in such circumstances the applicant was entitled to a certificate given that the proceedings compelled him to give evidence to the court.
The applicant’s Senior Counsel submitted that since the decision of J v D & Ors (2006) FLC 93-280, s 128 of the Evidence Act 1995 (Cth) had been amended and the section should be liberally interpreted due to the nature of the amendments. It was submitted that the main difference was in subsection (5) where it was stated “the court must cause” which mandated the provision of a certificate in circumstances where a witness willingly gives the evidence or is required by the court to give the evidence. However, the applicant’s Counsel could not locate any cases decided after the amendments to s 128 other than Song v Ying [2010] NSWCA 237 and Sheikholeslami v Tolcher [2009] NSWSC 920, and he argued that those cases should be treated with caution given their criticism of the decision of the Full Court in Ferrall & Blyton (2000) FLC 93-054 and consequently J v D (supra). It was argued that Ferrall (supra) was binding on the Family Court at first instance and it was highlighted that in both Ferrall and J v D the party opposing the issue of the certificate were the third parties that had gained financial advantage as a result of a spouse party’s attempt to put assets outside the jurisdiction of the Family Court.
It was submitted that there was a distinction between the issue of s 128 certificates in family law and criminal matters given the different nature of the compulsion to give evidence in the respective proceedings and that in considering authorities on s 128 that distinction must be considered. In that regard the applicant’s counsel argued that in Ferrall the Full Court, as an intermediate appellate court, made apparent the practice and procedure for the issue of certificates in proceedings in the Family Court.
In response to paragraphs 7 and 8 of the outline of the respondent’s Counsel, that contended that the particular evidence or evidence on a particular matter had to be particularised, the applicant submitted that the onus on him had been discharged by the provision of evidence in the form of the accountant’s affidavit and the applicant’s subsequent affidavit detailing that matters sought to be covered by the certificate, if it were granted. It was argued that the applicant was entitled to seek an order for the just and equitable adjustment of property between the parties under s 90SM and that as there had been no valuation of real estate or the respondent’s business, the final orders sought by the applicant as to a property adjustment could not be further particularised with finality. If the applicant were not provided with a certificate it was said that it would be difficult for him to file further affidavits in the proceedings that did not object to providing evidence in relation to a number of matters relevant to his financial circumstances.
In response to paragraph 16 of the respondent’s case outline, it was submitted that it was unknown whether an investigation resulting in a charge and prosecution were likely to result from the amended assessments and BAS statements and, in response to the submission that there was no real risk to the applicant, it was argued that there is a distinction between an understatement of income and dishonesty related offences under taxation law. It was reiterated that the applicant was not seeking a certificate to avoid disclosing information that had already been disclosed to the ATO or as an immunity from prosecution, but to prevent the evidence surrounding the circumstances related to those disclosures that may be tendered in these proceedings in affidavit and oral form by the applicant from being later used to prosecute criminal and civil penalties under taxation law. On this basis it was argued that the decision of Saffron v Federal Commissioner of Taxation (1992) 109 ALR 695 could be distinguished.
It was also submitted that it was not correct to say that the applicant was seeking the certificate for his own benefit but as a consequence of the s 90SM proceedings that he was entitled to bring for an alteration of property interests between the parties. The institution of those proceedings and the rules relating to discovery and disclosure in the Family Court required that the applicant make full and frank disclosure of his financial circumstances and hence it was in the interests of justice that a certificate issue. Finally, Senior Counsel reiterated that disclosure would be substantially more onerous on the applicant without a certificate
It was further submitted that all documents required to be disclosed had been disclosed and in relation to the summary dismissal sought by the respondent, it was argued that there was no material to support that order and that it would be unusual for it to be granted in such proceedings.
In reply Senior Counsel argued that by inserting “or evidence on a particular matter” into s 128(1) it was clear that the subsection was more “affidavit friendly” and that the simplification of s 128(3), and particularly s 128(3)(b), made the provision more open to affidavit evidence in circumstances where the evidence was provided willingly or on direction from a court and that in both circumstances it was clear that the certificate should issue given that the evidence in this matter was compelled by the operation of Hickey (supra) and Rule 13.01 of the Family Law Rules 2004 (Cth) (“the Rules”).
It was submitted that the tension between the Full Court of the Family Court in Ferrall and the decisions of the New South Wales Court of Appeal required consideration but ultimately Ferrall was binding. Finally it was submitted that there was no significant difference between the prior s 128 to the current s 128 but that s 128(3) and (5) were now broader and clearer in scope, and that nothing in the amendments to the section precluded its application to affidavit evidence.
THE SUBMISSIONS OF THE PARTIES – THE RESPONDENT
Counsel for the respondent claimed there was not full disclosure of various matters. She argued that the lack of compliance with disclosure was apparent as the documents and information provided to the accountant in relation to the applicant’s business income were not provided to the respondent’s solicitors.
In addition, Counsel for the respondent highlighted a concern that all of the Bank of Cyprus account statements were not provided in discovery as the statements detailed in paragraph 8 of the Affidavit of the applicant, filed 25 August 2011, did not include a substantial transaction known to the respondent, namely the transfer of a sum of $50,000 to the applicant from the respondent on 15 August 2008 as a result of pre-nuptial arrangement. It was submitted that from the statements relating to the Bank of Cyprus accounts it was evident that internal bank transfers had occurred suggesting the existence of another account held with that bank by the applicant not yet discovered in accordance with Schedule B of the consent orders of 29 March 2011. It was also submitted from the statements in was clear that on 24 December 2010 there was a credit into the applicant’s account of $14,064 as a “deposit repayment” from the trust account of the applicant’s employer. It was submitted that this indicated ongoing non-disclosure on the part of the applicant in the s 90SM proceedings.
It was argued by Counsel for the respondent that a certificate, if required, could be granted at a later date after the applicant had made the relevant disclosures in affidavit or oral form, and that all that was required was an objection prior to providing the evidence, in order for a certificate to issue under s 128(4), (5) and (6). In that regard it was argued that the applicant had not objected to giving evidence, or identified the particular evidence that was the subject of an objection, and therefore the requirements in s 128(1) and (2) had not been fulfilled and the court could not consider the application of s 128 or the provision of a certificate in the circumstances.
It was further put by Counsel for the respondent that the applicant had brought the proceedings under s 90SM and had stated that the final orders sought as to the alteration of the property of the parties would be particularised after the respondent had provided full discovery. It was contended that the respondent had provided full discovery and yet the applicant had still not particularised the final orders sought and that consequently the respondent was not aware of the case that was to be met.
The respondent’s Counsel sought to distinguish the decision in J v D as in that decision it was put that the affidavit sought to be filed would be self-regulating in the sense provided in r 15.09(1) of the Rules and the matters the subject of the certificate were known, whereas in the matter before the court it was argued that the Court was not aware of what evidence the certificate sought to cover, and that in such circumstances a “blanket” certificate should not issue.
The strike out application filed by the respondent in his Application in a Case of 26 May 2011 was supported by the affidavits of the respondent filed 23 May 2011 and 30 June 2011. It was argued that the strike out application was brought in circumstances where the applicant’s bona fides in bringing the application for a s128 certificate were very questionable given his failure to comply with the relevant provisions of the consent order as to discovery and disclosure relating to his Initiating Application, and in relation to the withdrawal of a caveat over a property held by the respondent. Counsel pointed to paragraph 5 of the respondent’s affidavit filed 30 June 2011 (that quotes a letter from the applicant’s solicitors dated 27 May 2001, annexed as “JM1” to that affidavit) that stated:
“We had hoped by this stage to have provided you with our client’s discovered documents… For reasons that will become apparent later, our client has not been in a position to provide us with a number of the documents to be discovered as they are currently with his accountant for tax purposes. We are awaiting receipt of the documents from out client’s accountant and also receipt of our client’s up to date tax returns. It is most likely that the documents will not be to hand for some 2-3 weeks.”
That letter annexed to the respondent’s affidavit also attached the withdrawal of caveat over the D Street property held by the respondent that had been executed by the applicant on 19 May 2011.
It was argued by counsel for the respondent that his solicitors should have received a copy of the document sent to the applicant’s accountant pursuant to the consent orders of 29 March 2011. It was highlighted that it was only in the applicant’s response, filed 24 June 2011, to the respondent’s Application in a Case and strike out application, that the applicant sought the certificate and objected to disclosure. The documents objected to being discovered by the applicant in his Response of 24 June 2011 had subsequently been provided to the respondent’s lawyers and a certificate was no longer sought in that regard. It was argued that documents relating to the applicant’s employment and a ring, referred to in paragraph 10 of the written submissions, had not been discovered or disclosed by the applicant.
Counsel submitted that her client had a right to know the case to be answered and that the applicant had failed to properly prosecute his claim and had failed to comply with the procedure of the court. Accordingly, it was submitted that the Initiating Application, and by inference the Response seeking a certificate, had no credit and constituted an abuse of process, particularly given the alleged false statements in the applicant’s affidavits as to his financial need, and that consequently the applicant’s Initiating Application ought be struck out with leave to reissue.
It was contended that the certificate was sought by the applicant to cover the dishonesty surrounding the procurement of the additional income and business income obtained by the applicant and that this was contrary to the applicant’s statement to the ATO in which he asserted that he was unaware that the income was business income. She argued that in granting a certificate the court may then be in the invidious position of being aware of the applicant’s deceptive conduct in relation to the ATO without being in a position to highlight that conduct and that in such circumstances a certificate should not be granted. In furtherance of this argument Counsel referred to paragraph 16 of her outline that stated:
“If, however, the applicant has lied to the ATO, and continues to do so, in reference to his taxation amendments, then the provision of a certificate, to avoid prosecution, offends every principle of public policy underpinning s 128. The granting of a certificate is done in order to enable the Court to fully appraise itself of all relevant matters, in circumstances where the obtaining of relevant evidence would otherwise be compromised by a witness’ reluctance to tell the truth.”
It was submitted that the purpose of a certificate in this matter was to enable the applicant to avoid prosecution as opposed to allowing the court to be fully appraised of all relevant matters in the proceedings. It was further argued that to allow persons to benefit from their criminal activities offended the underlying policy of the section and that in the matter before the court it was not known whether the evidence of the applicant could be of relevance or benefit to the court in the s 90SM proceedings.
Counsel stressed that in Sheikholeslami v Tolcher at paragraph 12 the decision of Cornwell v The Queen (2007) 231 CLR 260 was discussed and paragraph 111 of that decision was highlighted. It was submitted by Counsel in accordance with Cornwell (supra) that s 128(1) had not changed in its form and she argued that as the applicant in this matter was eager to provide the evidence in order to prove contribution, and therefore the majority’s observations in obiter were applicable. In was argued that Rein J in Sheikholeslami (supra) at paragraph 13, suggested that the reasoning of the majority in Cornwell strongly suggested that the reasoning in Ferrall was unsound and that it remained:
“doubtful as to whether s 128 was intended to protect plaintiffs or defendants who positively wish to assert facts in their oral evidence in chief, or a fortiori in affidavits which would incriminate them”.
Counsel argued that although it was not settled, it was now clear that the decision in Ferrall was unsound. Furthermore, it was submitted that Ferrall is not binding as the Full Court discussion of the s 128 certificate constituted obiter.
It was reiterated that the three preconditions under s 128(1) and (2) were not satisfied to the reasonable standard discussed in Briginshaw v Briginshaw (1938) 60 CLR 336 and that therefore the Court should not issue a certificate under s 128. Counsel relied upon the decision in Saffron (supra) and argued that in the matter before the Court the applicant could not establish that there was an increased risk, or reasonable apprehension of an increased risk of prosecution, given that he had already disclosed the relevant information to the ATO. It was emphasised that the evidence objected to by the applicant was not particularised, that he had not objected in the manner anticipated by the Act as he was eager to give evidence and had commenced the proceedings under s 90SM by way of Initiating Application, and that it was inconsistent for the applicant to argue that he was compelled to make disclosure in circumstances where he had not complied with consent orders or requests for discovery or disclosure made by the respondent. Interestingly Counsel submitted that perjury arising prior to or after the issue of any certificate was exempt from protection and she argued that in J v D and Ferrall the conduct the subject of the certificate was known and the certificate issued in circumstances where the other party to the relationship would be disadvantaged if the evidence the subject of the certificate were not provided to the Court.
DISCLOSURE AND THE CERTIFICATE
Section 90SM of the Act provides for the alteration of property interests in the event of a breakdown of a de facto relationship. It is accepted that the parties were in a de facto relationship within the meaning of s 4AA of the Act and that there was a breakdown, within the meaning stated in s 4, in relation to that relationship in January 2010. Accordingly, as s 90SM is enlivened, it is relevant to record that subsection 90SM(3) states that a court must not make an order under s 90SM unless it is satisfied that in all the circumstances it is just and equitable to make the order.
I agree with the submission of Senior Counsel, referring to Hickey & Hickey and the requirement and obligation on the parties in s 79 property proceedings to make full and frank disclosure of that party’s financial circumstances and all relevant matters. I agree that once the court has jurisdiction to hear s 90SM property proceedings on the breakdown of a de facto relationship as defined in the Act those proceedings import the same requirement for full and frank disclosure as s 79 proceedings. It follows that in the s 90SM property proceedings between applicant and respondent, the applicant is required to make full and frank disclosure of his financial circumstances and all relevant matters.
Disclosure in proceedings is addressed in Chapter 13 of the Rules. There is a general duty of disclosure in r 13.01 to the court and to the other party to provide full and frank disclosure of “all information relevant to the case, in a timely manner”.
Rule 13.04 more particularly requires a party to a financial case make full and frank disclosure of that party’s financial circumstances, including (as of particular relevance to the matter before the court) the following:
“(a) the party’s earnings, including income that is paid or assigned to another party, person or legal entity;
. . .
(d) any income earned by a legal entity fully or partially owned or controlled by a party, including income that is paid or assigned to any other party, person or legal entity;
(e) the party’s other financial resources;
. . .
(h) liabilities and contingent liabilities.”
Similarly, r 13.07 states that the duty of disclosure applies to each document that is or has been in the possession or under the control of the party disclosing the document and that is relevant to an issue in the case. Pursuant to r 13.13 a party can claim privilege from producing a document and another party may challenge the claimed privilege. Additionally a party may seek an order pursuant to r 13.22 for specific disclosure.
In the matter before the Court the orders made by consent on 29 March 2011 provided for the exchange of documents pursuant to r 12.02, by 29 April 2011, including a copy of the party’s three most recent taxation returns and assessments and, in relation to a person or entity, any business activity statement for the 12 months ending immediately before the first court date, within the meaning of r 13.04. The consent orders also required the applicant to provide to the respondent the documents listed in Schedule B to the orders by 12 April 2011. Those documents included bank statements from the Bank of Cyprus and CBA accounts held by the applicant, documents evidencing payments from the applicant’s employer constituting non-salary payments, and documents relevant to the entity A Pty Ltd. A notation to the consent orders stated that “the Applicant saying he has no interest in [A Pty Ltd], and that it is a contractor to [the applicant’s employer] only”.
In the applicant’s affidavit filed 25 August 2011 at paragraph 12 he deposed that “[c]ontemporaneously with serving this affidavit upon the respondent’s solicitors I have instructed my solicitors, Kennedy Partners, to provide a copy of each and every document listed at paragraph 8 herein to the respondent’s solicitors as and by way of discovery”. The documents listed in paragraph 8 refer to:
§CBA account for the period 1 June 2004 to 31 July 2011; and
§Bank of Cyprus account “history enquiry” from 30 September 2004 to 10 June 2010, renewal related statements and notices from 17 February 2010 to 24 December 2010 and statements of account from 31 March 2010 to 30 June 2011, related to the account ending “010” (at 8.2 to 8.4); and
§Income tax returns from 2005 to 2010 and notices of assessment for the years 2008 to 2010; and
§A letter from the applicant’s employer to the applicant dated 2 June 2011; and
§A letter from an entity named M Pty Ltd to the applicant dated 18 August 2011 and a service agreement between that entity and the applicant that is undated.
None of the documents listed in paragraph 8 included the BAS statements referred to in paragraph 12 of the accountant’s affidavit for the period 2004 to 31 March 2011 (inclusive) and in the applicant’s affidavit at paragraphs 9 and 11 for that period.
Additionally, it is apparent that the documents referred to in paragraph 8 above, refer to the account held by the applicant with the Bank of Cyprus ending “100” as referred to in the annexure “JM4” to the affidavit of the respondent filed 30 June 2011. In that letter from the applicant’s solicitors to the respondent’s solicitors of 9 June 2011 at paragraph 1.5 a number of documents are disclosed and at 1.5.5 there is a reference to the Bank of Cyprus Account ending “100” and the disclosure of renewal/reminder statements dated 30 June 2009. It is not clear from that correspondence whether the applicant made disclosure of the bank statements relating to that account as required by the consent orders of 29 March 2011 which stipulated that the statements from 30 June 2004 to date be provided.
In the letter to the ATO dated 15 June 2011 annexed to the accountant’s affidavit “EC-7” it is stated that the applicant:
“…failed to declare income received from additional services relating to his field of employment. During recent discussions with our office, [the applicant] has been made aware that the income received was in fact business income and therefore assessable.”
The BAS statements lodged on behalf of the applicant on or about 20 July 2011, per paragraph 13 of the accountant’s affidavit, are not annexed to her affidavit or those of the applicant, although in “EC-2” and “EC-3” the amended assessments for the years 2009, 2010 are annexed, but the outstanding amended assessments for the years 2005 to 2008 have not been annexed. The business income is described as income derived from a “[designing] service” and in the letters to the ATO annexed to the accountant’s affidavit in “EC-1”, “EC-2” and “EC-5” a net business income of $52 356 for 2005, $161 585 for 2006, $63 432 for 2007, $29 982 for 2008, $93 676 for 2009 and $81 774 for 2010 is stated. This business income is related to an ABN now held in the applicant’s name detailed in annexure “EC-8” to the accountant’s affidavit.
It is clear that pursuant to rr 13.04 and 12.04(f) that the BAS statements relating to the applicant’s business income are required to be disclosed in these proceedings pursuant to the Rules and the consent order of 29 March 2011. The amended assessments that issue for 2005 to 2008 from the ATO will also be required to be disclosed under r 13.04(1)(a) and (h). Finally, any further statements relating to the Bank of Cyprus accounts ending “010” and “100” that have not been disclosed pursuant to the consent orders of 29 March 2011 must be disclosed by the applicant to the respondent.
It may well be the case that some of the documents not disclosed may relate to the applicant’s objection and the certificate sought, but that has not been made apparent in submissions, other than in relation to the amended BAS statements.
The certificate sought by the applicant as outlined in paragraph 13 of his Affidavit, filed 25 August 2011, even taking to account the concessions made by Senior Counsel to exclude the certificate’s application to “witness affidavits filed on [the applicant’s] behalf” and “oral evidence given… [by] witnesses in the course of these proceedings insofar as such affidavit or oral evidence relates to any matter which may tend to prove that I have committed an offence against or arising under any Australian law or… civil penalty”, is quite broad. Although, paragraph 14 qualifies the Certificate by a reference to the applicant’s concern that the evidence required to be given by the applicant may provide evidence for his prosecution for an offence against “taxation law” or under s 6 of the Crimes Act 1914 (Cth) and ss 11.1, 11.4, 11.5 of the Criminal Code 1995 (Cth) “being an offence that relates to an offence against a taxation law”.
TAXATION LAW OFFENCES
Section 6 of the Crimes Act 1914 (Cth) states:
“Any person who receives or assists another person, who is, to his or her knowledge, guilty of any offence against a law of the Commonwealth, in order to enable him or her to escape punishment or to dispose of the proceeds of the offence shall be guilty of an offence.”
Sections 11.1, 11.4 and 11.5 of the Criminal Code Act 1995 (Cth) relate to an “attempt”, “incitement” or “conspiracy” to commit a criminal offence.
In addition to the above offences senior counsel in his written submission referred to the definition of a “prescribed taxation offence” and “taxation offence” under s 8A of the Taxation Administration Act 1953 (Cth). That section details the interpretation of terms under that Act. A taxation offence is defined as meaning:
“(a) an offence against a taxation law; or
(b) an offence against:
(i) section 6 of the Crimes Act 1914; or
(ii) section 11.1, 11.4 or 11.5 of the Criminal Code;
being an offence that relates to an offence against a taxation law.”
Senior Counsel for the applicant submitted that “taxation law” has the meaning given by the Income Tax Assessment Act 1997 (Cth) in vol 8 in the definitions to the Act at s 995-1.
The offences under the Taxation Administration Act 1953 (Cth) are set out in Division 2 and include two subdivisions, based on the seriousness of the offence and the imputed intention of the accused.
Subdivision A is concerned with offences that relate to a failure to comply with taxation requirements, including s 8C that details what will constitute an offence of failing to comply with certain requirements under taxation law.
Subdivision B relates to offences regarding statements, records and certain other acts and includes offences under ss 8K, 8L, 8N, 8Q, 8T and 8U which are concerned with false, misleading, reckless and intentionally incorrect record keeping and statements.
In addition to the definitions of a “prescribed taxation offence” and “taxation offence” referred to by Counsel for the applicant, s 8A details a “prescribed offence” as an offence against ss 8C, 8D(1) or (2), 8N, 8Q or Division 136 and 137 of the Criminal Code 1995 (Cth) in relation to taxation law or an “attempt” to commit any of those offences within the meaning of s 11.1 of the Criminal Code 1995 (Cth). Part 7.4, Division 136 and 137 of the Criminal Code 1995 (Cth) relate to offences involving false and misleading statements and information provided to Commonwealth entities in relation to certain matters.
SECTION 128 OF THE EVIDENCE ACT
Section 128 was amended by s 63 of the Evidence Amendment Act 2008 (Cth) (Act No. 135 of 2008) that omitted the previous s 128 and substituted the current version as in force from 4 December 2009.
Subsection 128(7) remains in the same form in the current s 128 but s 128(1) to (6) prior to the 2008 amendments stated:
“(1) This section applies if a witness objects to giving particular evidence on the ground that the evidence may tend to prove that the witness:
(a) has committed an offence against or arising under an Australian law or a law of a foreign country; or
(b) is liable to a civil penalty.
(2) Subject to subsection (5), if the court finds that there are reasonable grounds for the objection, the court is not to require the witness to give that particular evidence, and is to inform the witness:
(a) that he or she need not give the evidence; and
(b)that, if he or she gives the evidence, the court will give a certificate under this section; and
(c) of the effect of such a certificate.
(3) If the witness gives the evidence, the court is to cause the witness to be given a certificate under this section in respect of the evidence.
(4) The court is also to cause a witness to be given a certificate under this section if:
(a) the objection has been overruled; and
(b) after the evidence has been given, the court finds that there were reasonable grounds for the objection.
(5) If the court is satisfied that:
(a) the evidence concerned may tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law; and
(b) the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and
(c) the interests of justice require that the witness give the evidence;
the court may require the witness to give the evidence.
(6) If the court so requires, it is to cause the witness to be given a certificate under this section in respect of the evidence.”
As is clear above, the previous s 128(2) related to circumstances where, subject to s 128(5), the court found that there were reasonable grounds for the objection and informed the witness that she/he need not give the evidence, but that in the event that the witness did give the evidence willingly a certificate would be granted. Section 128(3) allowed for the provision of such a certificate where a witness voluntarily gave evidence.
Similarly, the previous s 128(4) stipulated that the court grant a certificate in circumstances where an objection was overruled and evidence was given by the witness, in circumstances where the court, after hearing the evidence, then found that there were reasonable grounds for the objection.
Comparatively, section 128(5) permitted the court to compel a witness to answer if the evidence tended to prove that the witness had committed an offence under Australian law, and did not tend to prove that the witness had committed an offence under the law of a foreign country, and the interests of justice required that the evidence be given. The certificate provided by s 128(6) related to this scenario and required the court to give the witness a certificate where the witness was required by the court to give the evidence.
Briefly the effect of the amendments were to:
§Insert into subsection 128(1) “, or evidence on a particular matter,”
§Insert a new subsection 128(2) to require the court to determine whether or not reasonable grounds for objection existed prior to the operation of subsections 128(3) to (6);
§Substitute the previous subsection 128(2) with subsection 128(3);
§Substitute the previous subsection 128(5) with subsection 128(4) but remove s 128(5)(a);
§Substitute the previous subsection 128(6) with s 128(4);
§Substitute the previous subsections 128(3) and (6) with the amalgamated version in subsection 128(5).
The relevant subsections of s 128 of the Evidence Act 1995 (Cth) now provide that:
(1) This section applies if a witness objects to giving particular evidence, or evidence on a particular matter, on the ground that the evidence may tend to prove that the witness:
(a) has committed an offence against or arising under an Australian law or a law of a foreign country; or
(b) is liable to a civil penalty.
(2) The court must determine whether or not there are reasonable grounds for the objection.
(3) If the court determines that there are reasonable grounds for the objection, the court is to inform the witness:
(a) that the witness need not give the evidence unless required by the court to do so under subsection (4); and
(b) that the court will give a certificate under this section if:
(i) the witness willingly gives the evidence without being required to do so under subsection (4); or
(ii) the witness gives the evidence after being required to do so under subsection (4); and
(c) of the effect of such a certificate.
(4) The court may require the witness to give the evidence if the court is satisfied that:
(a) the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and
(b) the interests of justice require that the witness give the evidence.
(5) If the witness either willingly gives the evidence without being required to do so under subsection (4), or gives it after being required to do so under that subsection, the court must cause the witness to be given a certificate under this section in respect of the evidence.
(6) The court is also to cause a witness to be given a certificate under this section if:
(a) the objection has been overruled; and
(b) after the evidence has been given, the court finds that there were reasonable grounds for the objection.
(7) In any proceeding in an Australian court:
(a) evidence given by a person in respect of which a certificate under this section has been given; and
(b) evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence;
cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.”
Section 128 as amended provides in s 128(1) and (2) where a “witness” objects to giving particular evidence or evidence on a particular matter on the ground that it may tend to prove that the witness has committed an offence arising under Australia law or the law of a foreign country or is liable to a civil penalty, the court must determine whether or not there are reasonable grounds for that objection.
Section 128(3) provides for circumstances where, as in the earlier s 128(2), the court finds that there are reasonable grounds, then the court is to inform the witness that subject to the operation of s 128(4) that the witness need not give the evidence and that if the evidence is willingly given (or required to be given by operation of s 128(4)) a certificate will be given to the witness with the effect provided in s 128(7).
Section 128(4) provides for circumstances where, as in the earlier s 128(5), the court may compel a witness to give the evidence if the court is satisfied that the evidence does not tend to prove that the witness has committed an offence or is liable to a civil penalty under the law of a foreign country and the interests of justice requires that the evidence be given. The amended s 128(4) effectively removes subsection 128(5)(a) so that, subject to s 128(1) and (2), a witness can only be required to give evidence in circumstances where the court is satisfied that the evidence does not tend to prove that the witness has committed an offence or will be liable to a civil penalty under the law of a foreign country and the interests of justice require the witness to give the evidence.
Section 128(5) directs that the court must provide a certificate in relation to the evidence where a witness voluntarily gives the evidence, or is required by the court to give the evidence under s 128(4). This provides for the respective scenarios set out in s 128(3) and s 128(4).
Section 128(6) allows for the provision of a certificate in proceedings where in giving oral evidence an objection is overruled and after the evidence is given the court finds that there were reasonable grounds for the objection. This is the prior s 128(4) in the same form.
Section 128(7) states, as the previous s 128(7) did, that “[i]n any proceeding in an Australian court… evidence given by a person in respect of which a certificate… has been given; and… evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence; cannot be used against the person”.
The protection provided by s 128 is a broad protection and consequently it is important to identify and circumscribe the particular evidence or evidence of a particular matter in s 128(1) to which the certificate attaches.
The cases referred to by Senior Counsel and Counsel, with the exception of Song v Ying (supra), were decided before the amendments to s 128 came into force on 4 December 2009. I agree with Senior Counsel insofar as the amendments to s 128 have clarified the section. The most significant difference is the removal of the earlier s 128(5)(a) from the current s 128(4), but due to the operation of s 128(1) and (2) that is not significant as the court must be satisfied that the particular evidence or evidence on a particular matter that the witness objects to giving may tend to prove that the witness has committed an offence under Australian law or the law of a foreign country or is liable to a civil penalty and determine whether or not there are reasonable grounds for the objection. Therefore the requirements of the earlier s 128(5)(a) must already be satisfied under the current s 128(1) and (2) prior to the operation of the current s 128(4). Consequently, the authorities decided prior to the commencement of the current s 128 on 4 December 2009 remain valid and of assistance.
AUTHORITIES ON SECTION 128
As identified by counsel for the parties there is a significant tension between the decisions of the New South Wales Court of Appeal in Song v Ying and Sheikholeslami v Tolcher and the decision of the Full Court of the Family Court in Ferrall & Blyton that was later followed in J v D. The decision of Ferrall was decided in 2000, J v D was decided in 2006, the High Court decision of Cornwell v The Queen was then decided in 2007. Sheikholeslami was decided in 2009, with Song v Ying handed down in 2010. The decision of Saffron that is relied on by counsel for the respondent was decided in 1992 by Beaumont J of the Federal Court.
In Senior Counsel’s submissions it was mentioned that notation 4 to the section indicated that the amendments to s 128(8) and (9) were made in response to the High Court decision of Cornwell. That notation stated:
“Note 4: Subsections (8) and (9) were inserted as a response to the decision of the High Court of Australia in Cornwell v The Queen [2007] HCA 12 (22 March 2007).”
Subsection 128(8) reinforced that s 128(7) has effect despite “any challenge, review, quashing or calling into question any ground of the decision to give, or the validity of, the certificate” that is issued under that subsection. Subsection 128(9) relates to the operation of s 128(7) in the context of a certificate granted to a defendant in criminal proceedings where there is a retrial or a trial for an offence arising out of the same facts that gave rise to the offence the subject of the initial criminal proceedings in which the witness was given a s 128 certificate.
Accordingly, those subsections are not relevant to the matter currently before the Court. However, it is important to observe that certain subsections of s 128 are directed specifically to defendants in criminal proceedings (see s 128(9) and (10)). It follows that in considering the authorities relating to s 128, the nature of the proceeding and whether it is a civil or criminal proceeding may be relevant to the manner in which s 128 is applied, particularly in view of how evidence is put before the court in different proceedings.
In Cornwell v The Queen the High Court discussed s 128 in the context of an accused in criminal proceedings. The appellant challenged his conviction on a retrial. In the first trial, in examination-in-chief, the appellant declined to answer a question on the ground that it might incriminate him and was directed to answer the question and other questions involving the same subject matter. The court indicated a willingness to grant the appellant a certificate under the then s 128(6) in relation to that evidence. The jury in the first trial could not reach a unanimous verdict and the appellant was retried. In the retrial evidence given by the accused in the first trial that was covered by the s 128 certificate was admitted in the proceedings under the then s 128(8), on the ground that it was relevant to a fact in issue. After the retrial had commenced the first trial judge issued the s 128 certificate in respect of the evidence provided on objection in the first trial.
The New South Wales Court of Criminal Appeal allowed the appeal, set aside the conviction and ordered a retrial. The High Court discussed s 128 in the context of the Crown’s appeal against the decision of the Court of Criminal Appeal to set aside the conviction and the ground of appeal that contended that the Court erred in failing to allow the Crown to appeal against the grant of the certificate under s 128 of the Evidence Act 1995 (Cth).
In Cornwell the construction and interpretation of the then s 128(7) and 128(8) in issue in relation to the grounds of appeal advanced. Subsections 128(1) and (5) were discussed in relation to the question of whether the accused “objected” to giving the evidence at the first trial. This discussion arose on the basis that, prior to the commencement of the first trial Counsel for the accused made a submission that the trial Judge’s construction of the meaning of s 128(8) and the expression “fact in issue” would affect counsel’s opening address to the jury and would determine whether the accused gave evidence. The trial Judge made it apparent that he would not give any guidance on whether or not he would grant a certificate to the accused until he was asked a question and objected to answering it. Counsel for the accused then foreshadowed that his client would object to a question put in the course of examination-in-chief.
The majority of the High Court, per Gleeson CJ, Gummow, Heydon and Crennan JJ, questioned whether the accused “objected” in the relevant sense to the question asked in examination-in-chief as:
“[The appellant] evidently wanted to give some evidence about the… conversations. He could only be sure of giving it in the way he would have liked if he gave it in chief; if he took the risk of leaving its reception to chance of particular questions in cross-examination, he ran the risk of not being able to give it, or not in the way perceived to be most favourable to his interests. Hence his claim of privilege was arguably not a means by which he “objected”, but was an attempt to ensure that s 128 protected him from some potentially adverse consequences of evidence which he did not “object” to giving, but strongly wanted to give.”
This was the context in which the plurality reasoned in paragraphs 111 to 112 (as relied on by counsel for the respondent) that:
“This characterisation raises a question whether s 128(1), and hence s 128 as a whole, applies where a witness sets out to adduce in chief evidence revealing the commission of criminal offences other than the one charged. A criminal defendant might wish to present an alibi, the full details of which would reveal the commission of another crime. A civil defendant might wish to prove the extent of past earnings, being earnings derived from criminal conduct. This raises a question whether witnesses who are eager to reveal some criminal conduct in chief, because it is thought the sting will be removed under sympathetic handling from their own counsel or for some other reason, are to be treated in the same way as witnesses who, after objection based on genuine reluctance, give evidence in cross-examination about some crime connected with the facts about which evidence is given in chief.
The view that the accused’s claim of privilege in all the circumstances answered the requirements of s 128(1) has difficulties. It strains the word “objects” in s 128(1). It also strains the word “require” in s 128(5) – for how can it be said that a defendant-witness is being “required” to give some evidence when his counsel has laid the ground for manoeuvres to ensure that the defendant-witness’s desire to give the evidence is fulfilled? And it does not fit well with the history of s 128(8)...”
Section 128(4) as now enacted, replaced the previous s 128(5) and as discussed above removed s 128(5)(a), and is the section discussed in the second paragraph above in connection with the word “require”. The reasoning in obiter above is framed within criminal proceedings in the context of the oral evidence given in those proceedings by the accused where the accused is required to give the evidence. It is apparent that the reasoning of the majority identified circumstances where the protection of s 128 is sought in order to make disclosures that may be incriminating in a manner that is artificial and forensically advantageous to an accused or defendant.
In Ferrall & Blyton the husband was granted a s 128 certificate in respect of evidence contained within three affidavits. The affidavits contained a number of admissions in relation to the husband’s financial circumstances. He deposed that he had, in previously sworn affidavits, incorrectly denied the wife’s assertion that a share issue from two companies in which the husband had held more than a 51 per cent interest were concluded in an attempt to reduce the wife’s equity in those companies. He also deposed that he had incorrectly denied the wife’s assertion that he had effective ownership and control over a group of companies and stated that he and his accountant had conspired in an attempt to defeat the wife’s claims under the Act.
The husband further stated that he had anticipated, by arrangement, that he would recover ownership and control from his accountant once the family law proceedings were concluded, however, it appeared that the accountant had appointed his family members to positions of control in the companies and when the husband raised concerns “it became apparent that [the accountant] wanted to retain some of the husband’s interests” as ‘compensation’. The husband’s evidence in relation to the arrangement arose in circumstances where he had discovered that his accountant was offering to sell one of the companies and he sought the s 128 certificate and injunctive relief to prevent the sale of an asset (the company) that should have been part of the pool in the s 79 proceedings before the court. The wife did not oppose the husband’s applications and consented to the relief sought by the husband, subject to costs.
On appeal the applicants (the accountant and his family members appointed to positions of control in the companies) argued that the certificate should not have been granted as the witness did not “object” within the meaning of s 128(1). The respondents submitted that there was nothing to suggest that s 128 was intended to operate only in relation to cross examination and that the section clearly extended to evidence in chief that a witness would otherwise give except for a concern that it would be incriminating.
The respondents relied on the earlier decision of Atkinson & Atkinson (1997) FLC 92-728. In that decision Lindenmayer J at 83,816 to 83,819 outlined the privilege against self incrimination and s 128 of the Evidence Act 1995 (Cth) in the context of s 79 proceedings. His Honour reasoned that:
“In his judgment…his Honour…identified two reasons why, in proceedings under s 79 of the Act a knowledge by the Court of a party’s income, and the sources of it, is essential. The first was the necessity for the Court, in exercising its discretion under s 79 (because of s 79(4)(e)) to make findings about the relevant matters referred to in s 75(2), which include, in paragraph (b) thereof, “the income, property and financial resources of each of the parties”… The second was that a party’s means of income production, if it be a business, may itself be an asset of significant value, and in order to do justice between the parties in proceedings under s 79 the Court must have knowledge of all property of the parties, or either of them and of its value.
. . .
The importance of the provision by parties to proceedings under s 79 of full and accurate information as to their financial circumstances (including income and its sources) is reflected in the specific provisions of the Rules of Court (Order 17 in particular) and in the line of authorities referred to by his Honour in his interlocutory judgment… to the effect that parties to such proceedings have a clear legal obligation to make a full and frank disclosure of those matters.”
In discussing the s 128 certificate the Full Court in Ferrall at 87,883, paragraphs 89 and 90, per Nicholson CJ, Lindenmayer and Kay JJ concluded that:
“… it would be unrealistic to limit the availability of a certificate to a situation where a witness is asked a particular question in cross-examination. We think the availability of a certificate clearly applies to evidence given in chief, otherwise an inappropriate forensic advantage would rest with the other party who would be in a position to prevent the question of an objection arising by simply not seeking to cross-examine.
In the particular circumstances of the Family Court of Australia, evidence in chief is normally given by affidavit. We think that in the circumstances of the present case, the witness was objecting, in the sense required by s 128, by indicating that he would not file the affidavit unless a certificate was given. We see the situation as no different from that which would have been the case if he had been sworn in and asked to answer questions concerning the manner in evidence in chief, and had objected to doing so without the issue of such a certificate.”
The above reasoning on the previous s 128 in Ferrall has been the subject of criticism in decisions of the New South Wales Court of Appeal and Supreme Court. Counsel in particular referred to the decisions of Sheikholeslami v Tolcher and Song v Ying.
In Sheikholeslami v Tolcher, decided prior to the amendments, Rein J discussed s 87 of the Civil Procedure Act 2005 (NSW) that related to protection against self-incrimination in relation to interlocutory matters, and s 128, in circumstances where a certificate was sought by a plaintiff under either section in relation to the evidence in chief sought to be filed by way of an affidavit. The plaintiff in Sheikholeslami sought the certificate in circumstances where she was concerned that the evidence provided to the court in relation to the purchase of property may have breached the Foreign Acquisitions and Takeovers Act 1975 (Cth) as the purchase occurred without the approval of the relevant authority.
Rein J discussed Ferrall and observed that in the Equity Division of the Supreme Court evidence in chief, as in the Family Court, is generally provided by way of affidavit. His Honour discussed other authorities in relation s 128 and affidavit evidence and commented that the observations of the majority in Cornwell suggested that the reasoning in Ferrall was unsound and that it remained “doubtful as to whether s 128 was intended to protect plaintiffs or defendants who positively wish to assert facts in their oral evidence in chief or a fortiori in affidavits which would incriminate them”.
However, Rein J tentatively stated that he would have followed Ferrall and granted a certificate under s 128 but for the reliance placed upon s 87. His Honour came to this conclusion after acknowledging the requirement that first instance Judges are bound by decisions of intermediate courts except where the interpretation is plainly wrong. In addition Rein J stated that in the matter before the court there was an absence of submissions opposing the certificate and observed that Ferrall had been applied in Ollis v Melissari [2005] NSWSC 1016 and Chao v Chao [2008] NSWSC 584, but not in Meiko Australia Pacific Pty Ltd v Hinchcliffe [2009] NSWSC 354 (although in that case the s 128 certificate was sought retrospectively for affidavits already filed and served in proceedings).
In the more recent decision of the New South Wales Court of Appeal in Song v Ying, Hodgson JA (Giles and Basten JJA agreeing) discussed s 128 of the Evidence Act 1995 (NSW) that substantially replicates the current form of s 128 of the Evidence Act 1995 (Cth) (see Song v Ying at paragraph 4). In that decision the appellant sought a certificate under s 128 on the basis that evidence to be given in the proceedings relating to the effect of loans and directorships that were concluded to create the impression that the respondent had greater assets and business interests in Australia that he actually did for the purposes of the respondent’s application for permanent residency, may incriminate him. The certificate was sought by the appellant on the basis that he had signed a statutory declaration in relation to the respondent’s exaggerated assets and business interests in Australia.
Hodgson JA observed that in Cornwell and Ferrall the focus of the Court’s discussion was on whether a s 128 certificate is restricted to questions in cross examination. His Honour stated that in his opinion that was not the issue. Hodgson JA was of the view that the question was whether an objection under s 128 is limited in scope to an objection to giving evidence which the witness would otherwise be compellable to give. In discussing the reasoning in Ferrall at paragraphs 89 to 90 his Honour stated at paragraph 22 that:
“While I agree with the view that the availability of s 128 is not limited to questions in cross-examination, in my opinion these reasons are flawed in that they do not advert at all to the question of whether the witness was otherwise compellable to give the evidence objected to.”
In relation to the reasoning in Cornwell at paragraphs 111 to 112, his Honour reasoned:
“It is true that… the High Court focussed on the distinction between examination in chief and cross-examination; but that was in a context of evidence being given by a party to the case, namely the accused. When a witness is a party to the case, giving evidence in chief pursuant to questions asked by the witness’s own counsel, there would rarely if ever be a question that the evidence in chief is given under compulsion or because of liability to compulsion. I do not understand the High Court’s reasons to be authority for restricting s 128 to cross-examination.”
At paragraphs 26 to 28 his Honour concluded that:
“In my opinion, it is appropriate to construe s 128 against a background of the common law, where privilege against self-incrimination was relevantly a privilege against being compelled to give evidence that might tend to incriminate; and also against a statutory framework in which witnesses are generally compellable to give evidence. A party giving evidence in chief, in response to questions from that party’s own legal representative, is not generally giving evidence which that party is, in any real sense, compellable to give: unless called by another party and asked questions in chief by that other party, a party’s evidence in chief is given entirely at the choice of that party and is not evidence that the party is compellable to give at the instance of anyone else….
In all cases apart from a party giving evidence in chief or re-examination in response to questions from the party’s own legal representative, witnesses are compellable to give evidence either at the instance of the party calling them, or the party directing questions in cross-examination, or the judge (if the judge asks questions). It is compellability of this nature that gives sense to the word “objects” in s 128(1) and makes sense of the word “require” in s 128(4)…
In my opinion, having regard to the wording of s 128 and the scope of the common law privilege which it displaced, it is not the case that a party to proceedings who is also a witness, giving evidence in chief in response to questions from the party’s own legal representative, and who wishes to give that evidence but is not willing to do so except under the protection of a s 128 certificate, “objects” to giving that evidence within the meaning of s 128(1). This is not because the witness subjectively wishes to give the evidence, but rather because there is no element of compulsion or potential compulsion which makes the expression “objects” apposite.” (my emphasis)
Hodgson JA emphasised the fact that generally a party giving evidence in chief would not be giving evidence that the party is compelled to give in the proceedings as each party determines the evidence put before the Court in support of their claim or defence and that unless the question is put by the judge or the other party in cross examination it is unlikely that the party giving evidence in chief will be compelled by a question put by their Counsel, in order for the party that is the witness to “object” to giving the particular evidence, or the evidence on a particular matter, within the meaning of s 128(1).
DISCUSSION OF SECTION 128 AND FINANCIAL PROCEEDINGS
I accept that this court is bound to follow the decision in Ferrall, however, I agree with the conclusions of Hodgson JA in Song v Ying in relation to the reasoning of the majority in Cornwell and the availability of s 128 to evidence other than that given in cross-examination. In this respect his Honour agreed with the view of the Full Court in Ferrall that s 128 is not limited to questions in cross-examination.
In my view, the reasoning in Song v Ying clarifies the application of Ferrall and Cornwell in view of the discussion of both authorities in the various decisions of the New South Wales Supreme Court. It follows that the reasoning in Song v Ying is to be preferred to that of Sheikholeslami v Tolcher. Further, I observe that in the recent Full Court decision of LGM & CAM [2011] FamCAFC 195, delivered after the hearing of this matter, the reasoning of Hodgson JA in Song v Ying set out above at paragraph 112 was discussed favourably by the Full Court (constituted by Coleman, Ainslie-Wallace and Crisford JJ) in the context of s 128 and evidence given by a party to the proceedings in cross-examination.
In my opinion, as submitted by Senior Counsel for the applicant, in proceedings under s 79 or s 90SM, by virtue of s 79(2) and s 90SM(3) the court must not make an order as to the division or alteration of property between the parties unless it is just and equitable to do so and consequently a requirement is imposed, according to the decision in Hickey, that the court consider the whole of the property of the parties. It follows that due to s 79(2) and s 90SM(3) there is an obligation on the parties to make full and frank disclosure of their financial circumstances in accordance with rr 12.02, 13.04 and 13.05, in such proceedings. Additionally, the Act specifically provides in s 79A(1)(a) and s 90SN(1)(a) that an order of the court under s 79 or s 90SM may be varied, set aside or substituted where there has been a miscarriage of justice by reason of “fraud, duress, suppression of evidence (including failure to disclose relevant evidence), the giving of false evidence or any other circumstance” in the property settlement proceedings, and this further supports this conclusion in relation to the requirement on parties to make full and frank disclosure.
In my view the requirement imposed on the Family Court under s 79(2) and s 90SM(3) in Parts VIII and VIIIAB of the Act differs to the obligations on parties in other civil proceedings in the State Courts (for example, proceedings in the Equity Division of the Supreme Court of New South Wales as identified in Sheikholeslami) where the pleadings and evidence in affidavit form put before the court by a party in chief is determined by that party. In my opinion this distinction is particularly apparent given that the Family Court is no longer a court of pleadings as identified by Cronin J in Pencious v Pencious [2010] FamCA 605 at paragraph 3.
Another example of this distinction in the context of a s 128 claim of privilege in other civil proceedings is evident in the decision of ASIC v Mining Projects Group Ltd & Ors (2007) 65 ACSR 264 in the Federal Court. In that decision an interlocutory dispute arose in relation to pleadings and discovery in civil penalty proceedings commenced by ASIC against two directors of a minerals exploration company. The directors filed defences in response to ASIC’s claim and ASIC sought orders for further and better particulars in relation to the defences filed. The directors argued that the privilege against self incrimination relieved them of their obligation to provide further and better particulars. In dismissing ASIC’s application Finkelstein J at paragraphs 7 to 9 stated that:
“The privilege against self-incrimination is a “fundamental … bulwark of liberty” (Pyneboard Pty Ltd v Trade Practices Commission) that “protects personal freedom, privacy and human dignity” (Caltex Refining) and is “deeply ingrained in the common law”: Sorby v Commonwealth. It applies in curial proceedings, including procedures related to curial proceedings, and non-curial proceedings: Pyneboard; Sorby.
. . .
In the case of self-incrimination privilege the defendant must establish that the provision of information or the production of documents in the civil case leads to a real and appreciable risk of a criminal prosecution before the privilege can be invoked: Rio Tinto Zinc Corp v Westinghouse Electric Corp; Rank Film Distributors Ltd v Video Information Centre; Sorby…”(citations omitted)
In the matter before the Court the parties agreed to orders made by consent on 29 April 2011 that provided for discovery and disclosure prior to the first court date in accordance with r 12.02. Schedules A and B to those consent orders provided for the discovery of specific documents. Those orders, pursuant to r 12.02, required the applicant to provide to the respondent his three most recent tax returns and assessments and any business activity statements for the twelve months prior to the first court date. In addition Schedule B to the consent orders required the applicant to disclose to the respondent tax returns for the years 2004 to date, in addition to other documents there set out.
In addition, the applicant in filing an Initiating Application that sought the alteration of property interests of the parties pursuant to s 90SM was required to file a Financial Statement in support of that Application pursuant to r 2.02, item 3(b), as evidence in chief. Financial Statements filed in family law proceedings detail each party’s income and financial circumstances and are required to be sworn or affirmed as affidavits that include a mandatory statement as follows:
“(a) I have read Rule 13.04 and I am aware that by law I have an obligation to make a full and frank disclosure of my financial circumstances to the Court and each other party. In particular, I have disclosed in this document or in an affidavit filed by me or on my behalf under Rule 13.05(2), all matters I am required to disclose under Rule 13.04.
(b) The information in the financial statement and any attachments to it which are within my personal knowledge are true. Where I have given an estimate in this financial statement, it is based on my knowledge and is given in good faith. All other information given in this financial statement and any attachments is true to the best of my knowledge, information and belief.
(c) I have no income, property or financial resources other than as set out in this document or any affidavit filed by me under Rule 13.05(2).”
The above statement requires parties to swear or affirm that a Financial Statement filed discloses all matters required to be disclosed under r 13.04, or in the alternative pursuant to (a) disclose in the Financial Statement, or in an affidavit filed by that party, all matters required to be disclosed under r 13.04.
It follows that in the matter before me, in view of the reasoning of Hodgson JA in Song v Ying, and the decision in Ferrall and earlier in Atkinson, the applicant is, in my view, compelled to give the particular evidence or evidence of a particular matter, that he objects to giving in the s 90SM proceedings commenced by him in his Initiating Application. The applicant was required to file a Financial Statement in support of his Initiating Application in accordance with r 2.02, item 3(b), as evidence in chief disclosing all matters required to be disclosed under r 13.04.
The fact that the applicant did not initially file a Financial Statement that complied with r 13.04 should not preclude him from now filing an amended Financial Statement and affidavit fully detailing his financial circumstances given that this course of action will assist the court in determining whether the final orders made between the parties under s 90SM are just and equitable in all the circumstances pursuant to s 90SM(3).
The particular evidence or evidence of a particular matter that the applicant objects to giving is evidence that relates to the circumstances surrounding the additional income earned by him as now detailed in his amended taxation returns and BAS statements filed with the ATO. I conclude pursuant s 128(1) that the applicant has objected to giving particular evidence as set out in paragraph 13 of his affidavit, filed 15 August 2011, and that the certificate sought only applies to the evidence given by the applicant given the concessions made by his Senior Counsel. Accordingly the applicant seeks a s 128 certificate in relation to:
§evidence given in chief by him in “any amended financial statement or affidavit of financial circumstances” in the discharge of his obligations of disclosure in the s 90SM proceedings; and
§“any affidavit in opposition to the Application in the Case and in response to the affidavits filed by [the respondent] in relation to [the respondent’s] application”; and
§any evidence in “any such other affidavits as I may swear in these proceedings… or any oral evidence given… insofar as such affidavits or oral evidence relates to any matter which may tend to prove that I have committed an offence… or am liable to civil penalty”;
on the ground that, as set out in paragraph 14 of his affidavit, the evidence that the applicant is required to give in the s 90SM proceedings may tend to prove that he has committed an offence against “taxation law”, s 6 of the Crimes Act 1914 (Cth), and ss 11.1,11.4, 11.5 of the Criminal Code 1995 (Cth).
Under s 128(2) I am required to determine whether there are reasonable grounds for the applicant’s objection. In the decision of J v D the husband sought a s 128 certificate and I applied the above reasoning in Ferrall at paragraph 48. The reasoning in J v D is relevant to the matter before the court as the current form of s 128(1) (and s 128(2)) as amended by the 2008 Act is central to this matter as Counsel for the respondent contends that the requirements of those subsections are not met and therefore a s 128 certificate cannot be issued to the applicant. In relation to the application of the previous subsection 128(1), in J v D at paragraphs 53 to 54, I stated that:
“Section 128 applies only if a witness objects to giving particular evidence on the ground that such evidence may tend to prove that the witness has committed an offence against or arising under an Australian law (or law of a foreign country) or is otherwise liable to a civil penalty. Under sub-section (2) thereof and subject to sub-section (5) if I were to find that there are reasonable grounds for such objection then the husband would not be required to give evidence which might be self incriminating and would be entitled to claim and utilise the certification process. What I have examined is therefore if there is evidence which would tend to implicate the husband in a commission of an offence. I am mindful that, as under the common law, evidence may tend to prove that a witness has committed an offence if such evidence were to:
“Set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character.” (Rank Film Ltd v Video Information Centre (1982) AC 380 at 443, per Lord Wilberforce and as quoted with approval by Gibbs CJ in Sorby v Commonwealth (1983) 152 CLR 281 at 294.”
In relation to s 128(2) Counsel for the respondent contended that there is no real risk of prosecution posed to the applicant, and hence no reasonable grounds established, in view of the fact that the amended assessments and BAS statements had already been filed with the ATO, unless of course the applicant had intentionally and incorrectly stated to the ATO that he was unaware of the additional income and business income when that was indeed not the case.
I am not persuaded that there is no real risk to the applicant in the manner discussed in Saffron v Federal Commissioner of Taxation. Further, in relation to the applicant’s bona fides in bringing the application for a certificate, even in view of his limited compliance with the consent orders of 29 March 2011, the court must be cautious in concluding that a claim of privilege is not made bona fide. As stated by Kirby J in Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 421 to 422:
“The test traditionally applied is whether the person claiming the privilege genuinely and reasonably apprehends a danger from being compelled to
answer the question objected to: R v Boyes (1861) 1 B & S 310; 121 ER 730.. . .
Where a question arises as to whether the claimed privilege is not
claimed bona fide or whether the danger apprehended is without substance,
it is clear law that “great latitude should be allowed to [the witness] in
judging for himself the effect of any particular question”: see R v Boyes
(at 311; 730)…However, the court must also protect the privilege and ensure that it is not abused (see Triplex Safety Glass Co Ltd v Lancegaye [1939] 2 KB 395 at 403).
In my opinion, based on the offences detailed at paragraphs 67 to 74 above, in addition to the evidence provided in the accountant’s affidavit as to the substantial business income received by the applicant in the relevant years, in the context of the selective disclosure of material relating to the Bank of Cyprus accounts, the material relating to the applicant’s employer R Pty Ltd, the entity known as A Pty Ltd, documents relating to the applicant’s involvement with M Pty Ltd, and the curious reference in paragraph 14 of the applicant’s affidavit of 25 August 2011 deposing that “[a] convention will render me liable to a criminal penalty”, the applicant has reasonable grounds for the objection on the basis that the particular evidence surrounding the circumstances in which he obtained the additional income disclosed in the amended tax returns and BAS statements may tend to prove the commission of a criminal offence or offences arising under Division 2 of the Taxation Administration Act 1953 (Cth), s 6 of the Crimes Act 1914 (Cth) or ss 11.1,11.4 or 11.5 of the Criminal Code 1995 (Cth).
In accordance with the provisions of s 128(3), as I have concluded that there are reasonable grounds for the applicant’s objection, pursuant to s 128(3)(a) I find that the applicant need not give the evidence at this stage unless required to do so under s 128(4) and, pursuant to s 128(3)(b)(i) if he willingly gives the particular evidence objected to without being required to under s 128(4) in:
(a)an amended Financial Statement and affidavit fully detailing his financial circumstances in accordance with rr 13.04 and 13.05 of the Rules; and
(b)in any further amended Financial Statement or affidavits of the applicant in these s 90SM proceedings;
the Court will grant a s 128 Certificate in respect of that evidence.
However, pursuant to s 128(3)(c) the certificate provided to the applicant under s 128 will only relate to the particular evidence in his amended financial statements and his affidavits given in these s 90SM proceedings that would tend to prove that he has committed an offence under Division 2 of the Taxation Administration Act 1953 (Cth), s 6 of the Crimes Act1914 (Cth) or ss 11.1, 11.4 or 11.5 of the Criminal Code1995 (Cth). Any such evidence given by the applicant, and evidence of any information, document or thing obtained as a direct or indirect consequence of the applicant having given such evidence in these proceedings, cannot be used against the applicant, except in relation to criminal proceedings in relation to the falsity of the applicant’s evidence given under the certificate.
It is unnecessary to now extend the coverage of the s 128 certificate to oral evidence given by the applicant in these s 90SM proceedings as he has the right to claim privilege under s 128 at the time he gives oral evidence in relation to questions posed to him in examination-in-chief, cross examination and re-examination at the trial of these proceedings. It is likely, based on these reasons, that such a claim would be granted.
THE RESPONDENT’S APPLICATION TO STRIKE OUT
Under r 11.06 the Court can dismiss an application for want of prosecution. Rule 11.06 states that:
(1) If a party has not taken a step in a case for one year, the court may:
(a) dismiss all or part of the case; or
(b) order an act to be done within a fixed time, in default of which the party’s application will be dismissed.
(2) The court must not make an order under subrule (1) unless, at least 14 days before making the order, the court has given the parties written notice of the date and time when it will consider whether to make the order.
(3) If:
(a) an application is dismissed under subrule (1);
(b) a party is ordered to pay the costs of another party; and
(c) before the costs are paid, the party ordered to pay them starts another application on the same or substantially the same grounds;
the other party may apply for the case to be stayed until the costs are paid.
There are circumstances in which the court would apply r 1.12 and dispense with r 11.06 where there were circumstances that strongly warranted that course.
In the matter before the court disclosure and discovery by the applicant generally, and pursuant to the consent orders of 29 March 2011, has not been timely. In view of the applicant’s response to the respondent’s Application in a Case that significant lack of compliance with the requirement of timely discovery and disclosure in accordance with the Rules and consent orders of March were in some respects related to the filing of the amended tax returns and BAS statements and application for a s 128 certificate.
In my opinion the applicant’s lack of timely discovery and disclosure in the circumstances do not support the dismissal of his Initiating Application for want of prosecution. However, it is apparent that the respondent, as a result of the applicant’s request for a s 128 certificate, and consequential lack of timely discovery and disclosure, has been put to additional expense in that his solicitors have sought particular disclosure by the applicant in correspondence between the parties.
If the delay in discovery and disclosure by the applicant had only been in relation to the s 128 certificate I would not comment further, however, I highlight in particular the letter of the applicant’s solicitors dated 27 May 2011 annexed to the respondent’s affidavit filed 30 June 2011 where it is apparent that it was only at that time that the respondent was advised that the caveat held by the applicant over the property at D Street, Melbourne Suburb 1 was withdrawn on 19 May 2011. It is apparent that the respondent filed his Application in a Case on 26 May 2011, one day prior to receiving that letter from the applicant’s solicitors with evidence that the applicant had withdrawn the caveat.
Another letter from 18 May 2011 written by the respondent’s solicitors and annexed to the respondent’s affidavit of 26 May 2011 indicated that as at that date the caveat had not been withdrawn. This delay by the applicant was contrary to the consent orders of 29 March 2011 that provided that the applicant would remove that caveat over the D Street property, in addition to a caveat held by the applicant over another property, within seven days (by the 5 April 2011). The fact that the caveat was only withdrawn by the applicant over a month later on 19 May 2011 raises a level of concern in relation to the applicant’s timely compliance with the consent orders.
In view of the above, and my discussion at paragraphs 58 to 64, I would emphasise that the applicant must make any further discovery and disclosure that has not already occurred pursuant to the 29 March 2011 consent orders within a reasonable time, in view of the grant of the s 128 certificate to the applicant.
COSTS
I record that the applicant in his Response to the Application in a Case has sought that the respondent pay the costs of and incidental to the application and that the respondent in his Application in a Case has sought that the applicant pay the costs of and incidental to the application.
As to costs I reserve to the parties the right to lodge written submissions as to the issue of what is a just costs order and as to the payment and quantum of costs within seven (7) days but such submissions are not to exceed five pages in length.
CERTIFICATE
The form of certificate given to the applicant under s 128 of the Evidence Act1995 (Cth) is as follows:
FAMILY LAW ACT 1975
FAMILY COURT OF AUSTRALIA
FILE NUMBER: MLC 11907 of 2010
AT MELBOURNE
BETWEEN:
[MR AITKEN]
(Applicant)
and
[MR MURPHY]
(Respondent)
BEFORE THE HONOURABLE JUSTICE YOUNG
THE 12TH DAY OF OCTOBER 2011
CERTIFICATE PURSUANT TO SECTION 128 OF THE EVIDENCE ACT1995 (CTH)
This Court certifies under section 128 of the Evidence Act1995 (Cth) that [MR AITKEN] is to be given a certificate in respect of the particular evidence given by him willingly in these proceedings, brought pursuant to section 90SM of the Family Law Act1975 (Cth), insofar as that evidence may tend to prove that he has committed an offence under Division 2 of the Taxation Administration Act1953 (Cth), s 6 of the Crimes Act 1914 (Cth) and ss 11.1, 11.4 or 11.5 of the Criminal Code1995 (Cth) and only as contained in:
(a)the amended Financial Statement and affidavit fully detailing the applicant’s financial circumstances referred to in order 1 of the Orders of 12 October 2011; and
(b)any further amended Financial Statement and affidavit of the applicant in the s 90SM proceedings.
BY THE COURT
JUDGE
I certify that the preceding One Hundred and Forty
(140) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered on 12 October 2011.
Associate: ……………………………………………………………
Date: …………………………………………………………………
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