Australian Securities and Investments Commission v Plymin

[2002] VSC 56

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7748 of 2000

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
PLYMIN AND ORS	Defendant

---

JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	22 February 2002
DATE OF JUDGMENT:	22 February 2002
CASE MAY BE CITED AS:	ASIC v Plymin and Ors
MEDIUM NEUTRAL CITATION:	[2002] VSC 56

---

Practice and Procedure – proceeding for pecuniary penalty order – privilege against exposure to a penalty – whether defendants should be required to disclose evidence (other than their own evidence) prior to closure of plaintiff’s case

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	N.J. Young QC with P. Crutchfield	ASIC
For the First Defendant	R. Saunders	Maddock Lonie & Chisholm
For the Second Defendant	M. Wyles	Tress Cocks & Maddox
For the Third Defendant	L. Glick SC	Clayton Utz

HIS HONOUR:

1. The plaintiff seeks an order that the defendants file and serve all affidavits upon which they wish to rely in this proceeding by any persons other than the defendants themselves.  Alternatively I think it is implicit in their submissions that statements of evidence might be provided rather than affidavits, but nothing turns on that.

1. It is accepted that the defendants are not required to provide affidavits themselves (or statements of their evidence), as that would infringe the privilege against exposure to a penalty.  The first question which arises is whether the privilege against exposure to a penalty extends to evidence which the defendants may wish to call from persons other than themselves, including experts.

1. The defendants accept that it would be appropriate that they provide affidavits or statements of evidence upon which they might wish to rely in the proceeding after the close of the plaintiff's case - if they so wish - but say that the privilege against exposure to a penalty protects them from being required by the court to provide any of such evidence before the closure of the plaintiff's case.

1. It is common ground, I think, in the light of the submissions that have been made, that the scope of the privilege against exposure to a penalty is no narrower than the scope of the privilege against self-incrimination.  In Reid v Howard[1] in the reasons of Toohey, Gaudron, McHugh and Gummow JJ, the following passage appears, in relation to the privilege against self-incrimination:

"The privilege, which has been described as a 'fundamental'... 'bulwark of liberty' is not simply a rule of evidence but a basic and substantive common law right.  It developed after the abolition of the Star Chamber by the Long Parliament in 1641, and, by 1737, it was said that there was no rule more established in equity.  More recently, the privilege has been described as 'deeply ingrained in the common law'.  It operates so that a person cannot be compelled to answer any question or to produce any document or thing, if to do so may tend to bring him into the peril and possibility of being convicted as a criminal'". 

[1](1995) 184 CLR p.1, at p.11.

1. The privilege against exposure to a penalty is and ought to be considered in the same light.  It is not simply a rule of evidence but a basic and substantive common law right.

1. At pp.6 and 7 in the same case in the judgment of Deane J, His Honour refers to the fact that the protection extends not only to the risk of incrimination by direct evidence, but also to incrimination by indirect or derivative evidence; that is, evidence obtained by using the disclosed material as a basis of investigation, and he refers to what was said by Lord Wilberforce in Rank Film Distributors Ltd v Video Information Centre[2] and by Gibbs CJ in Sorby v The Commonwealth[3], and also to what was said by Mason, Wilson and Dawson JJ in the same case: 

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

[2](1982) AC 380 and 443.

[3](1983) 152 CLR 281 at 294-5.

1. I think there is an appropriate phrase which was used by Burchett J in Trade Practices Commission v Abbco Iceworks Pty Ltd[4] namely that the privilege is-

"a right to decline to be themselves the authors of their own destruction by producing the evidence."

[4](1994) 52 FCR 96 at p.116.

1. I suppose the question in this case is whether placing a compulsory requirement on defendants to file evidence other than their own evidence (before closure of the plaintiff's case) falls within that principle.  It appears that there is no authority one way or the other.  Mr Young referred to two decisions which he said were consistent with the proposition that the privilege did not extend that far but they do not in my view assist him.  Those decisions were Australian Competition and Consumer Commission v J. McPhee & Son (Australia) Pty Ltd[5] a decision of Heerey J, and Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd[6] a decision of Sackville J.

   [5](1997) 148 ALR p.601.

   [6](1999) 163 ALR 465.

1. In the latter case at p.469, Sackville J said:

"The privilege against self-incrimination protects the witness not only from incriminating himself or herself under compulsory process, but also from being required to make a disclosure which may lead to incrimination or to the discovery of real evidence of an incriminatory character" –

referring to Sorby v The Commonwealth and he continued:

"The privilege against self incrimination and the privilege against exposure to a penalty are reflections of the one fundamental principle, namely, that those who allege the commission of a crime or the incurring of a penalty should prove it themselves and not be able to compel the accused or the respondent to provide proof against himself or herself...There is therefore no reason to think the scope of the privilege against exposure to a penalty is any narrower than that of the privilege against self-incrimination." 

1. In my opinion the privilege so described extends to protect the defendants from being required to provide evidence by way of other witnesses, including expert witnesses.  The principle expressed in the decisions to which I have referred I think clearly applies to that category of evidence.  Otherwise the defendants might indeed be required (in principle at least) to be the authors of their own destruction by producing such evidence at this stage.  At least they might expose themselves to that potentiality either directly or derivatively by putting the plaintiff in the position of being able to carry out further investigations on the basis of the evidence which they were required to produce.

1. The hazard which the defendants could face was illustrated by what was submitted by Mr Wyles: for example, the defendants might decide not to call or rely upon evidence of which they had already given the details and yet, as a result of the compulsory process of the court, had put the plaintiff in a position to decide to call that evidence itself.

1. In relation to the opinion of experts, the hazards of the contrary view were again illustrated in argument.  I accept the submission that experts, for their evidence to be admissible, are required to state the facts and assumptions upon which their opinions are based in an explicit fashion and that might well disclose the factual defences which were intended to be taken by the defendants or at least lead to an investigative chain of assistance to proof of the plaintiff's case. 

1. Even if I am wrong about the scope of the privilege, a consideration of the hazards which the defendants face as a result of being required to provide such evidence at this stage is sufficient to persuade me in my discretion to refuse to make the order which is sought.  It may be that that leads to inconvenience and disadvantages from a forensic point of view and it might make it harder for the court or the plaintiff to cope with the case but so be it. 

1. In due course the defendants may have to decide whether to call any and what witnesses and the plaintiff will then have the opportunity to consider that evidence if it is called and to cross-examine upon it. 

1. A further matter was put by the plaintiff - that the Corporations Act s. 317L had the effect of empowering the court to make the order which the plaintiff seeks.  That section provides that the court must apply the rules of evidence and procedure for civil matters when hearing proceedings for a declaration of contravention or a pecuniary penalty order.  The short answer to that argument I think is: this privilege is not a matter of evidence and procedure.  I have already referred to the passage in Reid v Howard which is strongly to the contrary.  If parliament intended to override a substantive common law right it would have done so expressly.  I do not think that section gives the court power to do that which it has not the power to do at common law. 

1. For those reasons the plaintiff's application for this order is refused.  I am prepared to and will make an order that the defendants file and serve all affidavits in the case of lay witnesses and statements of evidence in the case of experts, upon which they intend to rely immediately at the close of the plaintiff's case.