Chapman v The Director of Public Prosecutions for Western Australia - [2009] WASCA 66

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: CHAPMAN -v- THE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA [2009] WASCA 66

CORAM: PULLIN JA

HEARD: 23 MARCH 2009

DELIVERED : 26 MARCH 2009

FILE NO/S: CACV 27 of 2009

BETWEEN: ANTONY ROY CHAPMAN
Appellant
AND
THE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA
Respondent

FILE NO/S :CACV 30 of 2009

BETWEEN :JOY ANNE REBECCA JOHNSTON
Appellant
AND
THE DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :TEMPLEMAN J
File No  :CPCA 168 of 2008

Catchwords:

Practice and procedure - Application for a stay or suspension of examination orders pending appeal

Privilege against self incrimination - Whether abrogated by statute - Criminal charges laid against appellant - Whether enforcement of examination order would interfere with administration of justice or amount to a contempt of court

Legislation:

Nil

Result:

Partial stay granted

Category: A

Representation:

CACV 27 of 2009

Counsel:

Appellant: Mr C P Stokes
Respondent: Mr M Seaman

Solicitors:

Appellant: Chris Stokes & Associates
Respondent: Director of Public Prosecutions (WA)

CACV 30 of 2009

Counsel:

Appellant: Mr A J Papamatheos
Respondent: Mr M Seaman

Solicitors:

Appellant: Maxim Litigation Consultants
Respondent: Director of Public Prosecutions (WA)

Case(s) referred to in judgment(s):

Commissioner of Taxation (Commonwealth) v De Vonk (1995) 61 FCR 564
Director of Public Prosecutions v Jo [2007] QCA 251; (2007) 176 A Crim R 17
Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308
Hammond v The Commonwealth of Australia (1982) 152 CLR 188
Re AWB Ltd; Australian Securities and Investments Commission v Flugge (2008) 252 ALR 566
Samuels v The State of Western Australia [2005] WASCA 193; (2005) WAR 473
Victoria v Australian Building Construction Employees & Builders Labourers Federation (1982) 152 CLR 25

PULLIN JA: The appellants have made an urgent application for a stay of execution or a suspension order in relation to two examination orders made on 22 December 2008 by Templeman J pursuant to s 58(1) of the Criminal Property Confiscation Act 2000. Events have moved very quickly and it has been necessary to make a decision after brief consideration of the issues.
The application for suspension orders is made pursuant to the Civil Judgments Enforcement Act 2004 (WA) and the application for a stay of execution is made pursuant to r 43(2)(h) and r 3(1) ('interim order') of the Court of Appeal Rules. The suspension or stay is sought pending the hearing of an appeal commenced on 19 March 2009 against an order made by Templeman J on 18 March 2009 dismissing an application to stay the examination of the appellants.
If a stay or suspension order is granted, it would be in effect to grant the stay that Templeman J refused or one similar to it. The word 'judgment' in the Civil Judgments Enforcement Act is defined to mean 'a judgment or an order of the court that requires or has the effect of requiring a person … to do an act'. The order of Templeman J made on 18 March 2009 refusing to stay the examination order has the 'effect' of requiring the appellants to 'do an act', namely to attend the hearing and to be examined and answer questions. I am therefore satisfied that a suspension order or stay in that form may be ordered if the grounds for the order can be established.
Applying ordinary principles, the DPP is prima facie entitled to enforce the order pending the determination of the appeal. It is for the appellants seeking the stay to move the court to a favourable exercise of its discretion and the court will not grant a stay unless special circumstances are shown justifying the departure from the ordinary rule. A central issue is whether the stay is necessary to preserve the subject matter or integrity of the litigation and if that can be demonstrated then the stay will still be refused unless it can be established that the appeal has reasonable prospects of success or that the balance of convenience does not lie in favour of the applicant for the stay. See Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308.
The facts are as follows. On 10 December 2008, the appellants were arrested and charged with six charges of stealing as a public servant contrary to s 378(6) of the Criminal Code and they appeared on 11 December 2008 in the Perth Magistrates Court in relation to those charges. They were not required to enter a plea.
On 22 December 2008, the examination orders, and freezing orders concerning the appellants' property, were made. The orders were made ex parte. The examination order against each of the appellants required the appellant to attend before a registrar of the Supreme Court on a date and time to be fixed and submit to an examination by counsel about:
(a)the nature, location and source of [the appellants'] property;
(b)the nature, location and source of property that is not frozen, but is suspected on reasonable grounds of being confiscable;
(c)the wealth, liabilities, income and expenditure of [the appellants] who are both suspected on reasonable grounds of being involved or having been involved in the commission of a confiscation offence and
(d)the nature, location and source of any property tracking document.
On Wednesday 11 February 2009, the police served on the second appellant's solicitors statements of material facts relating to five charges pursuant to s 83(c) of the Criminal Code (public officer acting corruptly in performance or discharge of functions) and a prosecution notice relating to those five charges, along with a statement of material facts relating to six charges pursuant to s 563A(1)(a) of the Criminal Code (property laundering) and a prosecution notice relating to those six charges. As a result, there are six stealing as a servant charges, five corruption charges and six property laundering charges. A plea has not been taken in respect to any of the charges.
In February the male appellant was charged with a further three charges of corruption contrary to s 83(c) of the Criminal Code concerning three works of art. At some time in January 2009, the appellants discovered that the examination orders had been made.
On 6 and 11 March 2009, the appellants were served with notices to attend the examination pursuant to the examination order. The notice stated that the examination would be held on 19 March 2009 at 10 am.
An application was made by the appellants on 13 March 2009 before Templeman J to adjourn the examination order. This was dismissed. His Honour said:
That leads me to the question of whether the examination should be adjourned. It is true that under s 60(2) of the … Act a person examined may be represented by his or her legal representative. However, I have to have regard to the very limited rights that a person who is the subject of any examination order has in relation to objecting to questions in what is, Mr Seaman rightly says, purely an investigative procedure, the outcome of which cannot prejudice the subject of the examination in any criminal proceedings, having regard to s 61(7).
On 18 March 2009 the applicants made an application to Templeman J for a stay of the examination order. That was dismissed. The reasons for doing so are set out later in these reasons.
On 19 March 2009 the male appellant instituted an appeal against that order and appeared before me seeking the stay or suspension order referred to at the beginning of these reasons. The female appellant foreshadowed that she would also be appealing and also sought a stay or suspension order. That appeal was subsequently instituted on 24 March 2009. The applications came on for hearing before me at 9.30 am on 19 March 2009, a half hour before the examinations were to begin. The parties agreed to adjourn the examination until 11 am and the hearing before me continued until then or a little later. I had not had the opportunity to read the papers. The applications for a stay or suspension order were adjourned until 23 March 2009. The proposed examination of the appellant was adjourned until 26 March 2009. I heard detailed submissions from the parties on 23 March 2009.
At this stage it is necessary to refer by way of example, to the first of the statements of material facts relating to the first of the stealing charges. It reveals that the allegations made by the prosecution are as follows: The male appellant was a level 9 public servant employed by the Department of Industry and Resources. His duties included approving invoices forwarded by a company called Zernike Pty Ltd to be paid with funds from the department. The department is the government agency responsible for managing Technology Park, Bentley. This consists of various buildings housing research and development. Zernike Pty Ltd is a private company holding a contract to manage the resources of this Park for which it is paid a fee. The male appellant 'arranged for' accounts to be created within Zernike Pty Ltd's real estate trust account. The female appellant is the wife of the male appellant; she is a level 9 public servant employed by the Department of Planning and Infrastructure and has an interest in two companies, Gordian Holdings Pty Ltd and Metra Business Services Pty Ltd. Gordian was established in 2003 to purchase properties for the appellants. Invoices were presented by Gordian to Zernike Pty Ltd for payment.
In relation to the first charge, it is alleged that there were four invoices for amounts which differed but were between $50,000 and $100,000 in each case. The total amount of moneys requested as a result of these invoices was $300,318. I infer that the male appellant then authorised the payment of these invoices when presented by Zernike Pty Ltd to the department. I also infer because of the charge that it is alleged that Gordian Pty Ltd was not entitled to payment of these moneys. When the money was paid by the department to Zernike Pty Ltd, the moneys were then allegedly paid out of Zernike Pty Ltd's trust account by a director of Zernike Pty Ltd, a person called Jones, 'under the direction of' the male appellant and the moneys were then paid into various bank accounts, one being an account of Metra Business Services Pty Ltd, another to a credit card in the name of one of the appellants and three other amounts transferred to two different National Australia Bank accounts in the joint names of the appellants.
The statements of material facts referring to the five other stealing charges, the corruption charges and the money laundering charges, portray similar facts and all refer to either Gordian's account, the Metra account or the one or other of the bank accounts or credit card account referred to above.
To prove those charges it will therefore be necessary for the prosecution to establish that the moneys flowed from the department via Zernike's trust account into the Gordian account and into, alternatively, the accounts of the appellants or into the account of Metra. Counsel for the DPP agrees that the terms of the examination order permit him to ask questions of the appellants about the source of moneys appearing in those accounts.
The three February corruption charges against the male appellant relate to three artworks. The statements of material facts allege that the male appellant selected three artworks from an art gallery and directed that the invoice be sent to Zernike. The statement alleges that the male appellant then instructed Zernike to make payment and, I infer, authorised the payment for that artwork to be sent from the Department to Zernike. The Department never received the paintings.
The appellants say they have exercised their right to silence in relation to the criminal charges and claim privilege against self‑incrimination. They claim that the attempt to examine them will circumvent the right to silence and abrogate the privilege.
Relevant provisions of the Criminal Property Confiscation Act are as follows. Section 58(1) provides that the court 'may order a person to submit to an examination about any or all' of the matters referred to in the examination order. Section 61(1) provides that if the owner of frozen property who is to be examined in connection with the property under an examination order contravenes the order or the examiner's requirements under the order, then the owner commits an offence. Section 61(2) provides that a person convicted of an offence is liable to a fine of $100,000 or an amount equal to the value of the property whichever is greater or imprisonment for 5 years or both. Section 61(4) provides that a person who is examined under an examination order contravenes the order '… if … the person fails to disclose information'. Section 61(5) reads:
A person is not entitled to contravene an examination order or the examiners requirements under the order on the grounds that complying with the order -
(a)might incriminate the person or might render him or her liable to a penalty; or
(b)could result in the confiscation of property.
Section 61(7) states that:
A statement or disclosure made by a person in the course of complying with an examination order is admissible as evidence against the person
(a)in a proceeding against the person for an offence under this section;
(b)in any civil proceeding; and
(c)in any proceeding under this Act that could lead to the confiscation of property owned, effectively controlled or given away by the person, but only for the purpose of facilitating the identification of such property.
Section 108 reads:
For the purposes of s 61(7), the transcript of an examination of a person under an examination order is admissible in any proceedings under this Act or under any other law in force in Western Australia as evidence of a statement or disclosure made by the person in the course of complying with the examination order.
There is no dispute that the combined effect of these provisions and the examination order will oblige the appellants to answer questions and provide information within the terms of the examination order.
The appellants submit that s 61(7) states the three circumstances in which a statement or disclosure made in the course of complying with an examination order may be used but that the subsection does not state that they may not be used in criminal proceedings. The appellants also submit that s 108 would make admissible the transcript in criminal proceedings of the kind which have been brought against the appellants. The respondent disputes that view of the two sections. It is not necessary to say more about this debate at this stage about the merits of the appeal.
The circumstances here are similar to those in Hammond v The Commonwealth of Australia (1982) 152 CLR 188 where the High Court granted an injunction restraining the questioning of the plaintiff before a Royal Commission about matters touching and concerning a criminal charge which he faced. In that case the Royal Commissions Act 1902 (Cth) made it an offence for a witness to refuse to answer a question put by the Commission and another section provided that, save for some exceptions, the witness could not refuse to answer questions on the ground that he might incriminate himself.
Gibbs CJ said:
Once it is accepted that the plaintiff will be bound, on pain of punishment, to answer questions designed to establish that he is guilty of the offence with which he is charged, it seems to me inescapably to follow, in the circumstances of this case, that there is a real risk that the administration of justice will be interfered with. It is clear that the questions will be put and pressed. It is true that the examination will take place in private and that the answer may not be used at the criminal trial. Nevertheless, the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence is very likely to prejudice him in his defence (198).
Gibbs CJ went on to say that the continuance of the inquiry would 'amount to a contempt of court, and that the proper course would be to adjourn the inquiry until the disposal of the criminal proceedings'. Mason J agreed. Murphy J said that it was inconsistent with a constitutional right to trial by jury that the plaintiff be subjected to interrogation by the executive government or that his trial be prejudiced in any other manner. He took that view 'whether or not he has privilege against self‑incrimination' (201). Brennan J held that an accused person may 'not be deprived of his immunity from interrogation by the exercise of the prerogative power to appoint a Commission of Inquiry and Report' (203). Deane J held that:
It is fundamental to the administration of criminal justice that a person who is subject of pending criminal proceedings in a court of law should not be subjected to having his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial inquiry by an administrative tribunal with powers to compel the giving of evidence and the production of documents which largely correspond (and to some extend exceed) the powers of the criminal court. Such an extra curial inquisitorial investigation of the involvement of a person who has been committed for trial in the matters which form the basis of the criminal proceedings against him constitutes, in my view, an improper interference with the due administration of justice in the proceedings against him in the criminal court and contempt of court (206).
Another section of relevance in the Criminal Property Confiscation Act 2000 is s 104 which reads:
The fact that criminal proceedings under this Act or any other enactment have been instituted or have commenced is not a ground on which the court may stay proceedings under this Act that are not criminal proceedings.
A provision similar to this was referred to in circumstances where a stay was sought concerning applications for forfeiture under the Proceeds of Crime Act 2002 (Cth). In Director of Public Prosecutions v Jo [2007] QCA 251; (2007) 176 A Crim R 17, the Court of Appeal in Queensland held that a provision like that did not deprive a court of power to grant a stay where it is in the interests of justice to do so.
The onus is on the appellants to show that there is a real risk and not a remote possibility that justice will be interfered with: Hammond at 196. There is a real risk in this case. For example, if the appellants are obliged to state the source of moneys in the accounts referred to in the charges, then the answers may provide direct evidence of the flow of funds the prosecution will seek to prove in the criminal charges. Answers to questions about whether the appellants own or control the accounts or assets referred to in the charges may provide direct evidence of what the prosecution will seek to prove in the prosecutions. The situation is therefore the same as the situation in Hammond. In my view, the effect of the decision in Hammond's case and Jo's case and the cases referred to below is that:
(a)There is a common law privilege against self incrimination.
(b)The common law privilege above may be abrogated by legislation.
(c)Parliament has abrogated the common law privilege against self incrimination in this case by s 61.
(d)The case remains that, unless Parliament has expressly stated that what may otherwise amount to:
(i)a contempt of court; or
(ii)interference with the administration of justice
should not be regarded as such, then any threatened contempt of court or threatened interference may be restrained by either an injunction or a stay. Once criminal charges are pending before a court, that court or a court of appropriate jurisdiction has an obligation to protect the integrity of the proceedings and to prevent interference with the administration of justice: Commissioner of Taxation (Commonwealth) v De Vonk (1995) 61 FCR 564, 569 per Foster J; Victoria v Australian Building Construction Employees & Builders Labourers Federation (1982) 152 CLR 25, 53 ‑ 54.
(e)If a prosecutor seeks to interfere with the right of an accused person charged with criminal offences to exercise his right of silence, by seeking to compel that person, under threat of criminal penalty, to give up his right of silence, then such an attempt will amount to an improper interference with the due administration of justice in the criminal proceedings and will amount to a contempt of court.

The appellants argue that these principles should be extended beyond the situation where criminal proceedings are actually on foot. They first refer to Director of Public Prosecutions (Commonwealth) v Jo. In that case, there was no criminal charge on foot, but there was a threatened and specifically foreshadowed criminal charge. In those circumstances, the appellant sought to examine the respondents. The court there held that a court retains an inherent power to stay proceedings where the interests of justice require it. Wilson J said, [22]:
The inherent jurisdiction of the courts to preserve the privilege against self‑incrimination cannot remain paramount in the face of a clear legislative intent to abrogate that privilege by requiring persons such as Mr and Mrs Jo to answer questions at an examination conducted under the Act. But that point has not yet been reached, and the stay application was designed (at least in part) to stop it being reached. In that context, the court clearly has inherent power to uphold the privilege by granting a stay.
The other two members of the Queensland Court of Appeal agreed. The appellants submit that this must mean that the court has power to prevent an abuse of 'potential' proceedings as well as an abuse of actual proceedings.
Secondly, the appellants extend this submission by contending that a court has a power to grant an injunction or order of stay, in order to prevent an abuse of potential proceedings in circumstances where the potential proceedings have not even been identified or foreshadowed. The appellants argue this proposition based on the decision of Robson J in Re AWB Ltd; Australian Securities and Investments Commission v Flugge (2008) 252 ALR 566. Robson J said, [49]:
The protection which the privilege against self incrimination confers extends not only to the risk of incrimination by direct evidence, but also to incrimination by indirect or 'derivative' evidence.
It is not necessary to consider the first submission based on Jo's case because there is no foreshadowed other charge.
I am not prepared to accept the second submission based on Flugge's case because it suggests that a mere possibility, even a remote possibility, of a charge is sufficient to justify an injunction or a stay. That is contrary to Gibbs J's statement in Hammond's case at 196 that:
the plaintiff must establish that there is a real risk, as opposed to a remote possibility, that justice will be interfered with if the commission proceeds in accordance with its present intention. The tendency of the proposed actions to interfere with the course of justice must be a practical reality - a theoretical tendency is not enough.

Templeman J's reasons for refusing to stay the examination order

Templeman J delivered reasons ex tempore. He held that he was functus officio because he had dismissed the application for an adjournment. He also held that if he was not functus officio, the application for a temporary stay would be dismissed as s 61(7) of the Act afforded the appellant's protection. His Honour's view was that the evidence given by the appellants in an examination could not be used in a criminal prosecution. Further, his Honour concluded that the questions to be asked of the appellants during the examination would not be asked to determine the circumstances of the alleged offences. This seems to be a reference to counsel for the respondent's submission that he could not ask the appellants 'Why did you put the money in there?', 'Did you steal that money?'
The appellants have impliedly foreshadowed grounds of appeal to the effect that Templeman J erred in law in concluding:
(a)that he was functus officio;
(b)that s 61(7) of the Act affords the appellants protection against the use of the answers or information given during the examination in the criminal proceedings, and
(c)that the questions which may be asked during the examination would not require answers to questions which would provide direct evidence of matters which would have to be proved by the prosecution in the presentation of the criminal charges.
In my opinion, each of those foreshadowed grounds has a reasonable prospect of success as that expression is understood and explained in Samuels v The State of Western Australia [2005] WASCA 193; (2005) WAR 473.

Conclusion

I acknowledge that without more, the respondent has a litigant's ordinary entitlement to enforce the examination orders. I am nevertheless satisfied that there exist in this case special circumstances justifying the departure from the ordinary rule. It is obvious that if stays or suspension orders are not ordered, the appeal will be rendered nugatory. For reasons given under the previous heading, it is my opinion that the appeals have a reasonable prospect of success.
As to the balance of convenience, the position is as follows. The respondent should be entitled to conduct its examination to ask questions to identify assets which are the subject of the freezing order and which are not the subject of any of the criminal charges against the appellants. On the other hand, the appellants are entitled to a stay which will maintain the real effect of their right to silence in relation to the criminal charges that they face. This takes into account the interests of both parties.
The balance of convenience therefore favours a partial stay of the examination orders insofar as they authorise any questions concerning the accounts or the bank accounts of Gordian Pty Ltd, Metra Business Services Pty Ltd, the two National Australia Bank accounts in the names of the appellants, the credit card in the name of the female appellant, or concerning the three artworks, all of which are referred to in the statements of material facts concerning the charges against the appellants. For the reasons given below, the examination orders should also be stayed insofar as they seek to compel the appellants to provide information about the 'source' of any property. The word 'source' should be defined to refer to the source of the property and the corresponding payment or transfer of such property from some other location.
At one stage of my deliberations, I contemplated an order of the kind that was made in Hammond's case, which was to restrain any examination in relation to matters 'touching and concerning' the criminal charges. That may have been appropriate in Hammond's case, because the only questions still to be asked were questions about the criminal charge. In this case, an order of that kind would give rise to likely disputation between the parties about whether a question would have to be answered. It would expose the appellants to the possibility of criminal prosecution if they refused to answer questions which they considered, but which did not, in fact, touch and concern the criminal charges. For that reason, I have decided that the stay foreshadowed above should be ordered because it has much less scope for ambiguity. I will hear the parties as to the precise form of the stay.