Chief Executive Officer of Customs v Evenfont

[2007] NSWSC 431

CITATION:	Chief Executive Officer of Customs v Evenfont [2007] NSWSC 431
HEARING DATE(S):	30/4/07
JUDGMENT DATE :	2 May 2007
JUDGMENT OF:	Bell J at 1
DECISION:	Make orders in conformity with prayer one of the third and fourth defendants’ motion.
CATCHWORDS:	Excise prosecution - direction for filing witness statements - priviledge against self-exposure to a penalty
LEGISLATION CITED:	Excise Act 1901 (Cth)
CASES CITED:	Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465 Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132; 130 FCR 37 Australian Competition and Consumer Commission v J McPhee & Sons (Australia) Pty Ltd (1997) 77 FCR 217 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681 Chief Executive Officer of Customs v Afiouny [2004] NSWSC 79 Chief Executive Officer of Customs v Camile Trading Pty Ltd [2004] NSWSC 1256 CEO of Customs v Camile Trading Pty Limited [2006] NSWSC 1401 Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; 216 CLR 161 Commissioner of Taxation v Price [2006] QCA 108; [2006] 2 Qd R 316 Rich v Australian Securities Investments Commission [204] HCA 42; 220 CLR 129 Rich v Australian Securities and Investments Commission [2003] NSWCA 342; 183 FLR 361 Sidebottom v The Federal Commissioner of Taxation [2003] VSCA 2; 6 VR 302
PARTIES:	Chief Executive Officer of Customs (Plaintiff) Evenfont Pty Ltd (First Defendant) Truegain Pty Ltd (Second Defendant) Robert Lenard Pullinger (Third Defendant) Paul Andrew Lucas (Fourth Defendant)
FILE NUMBER(S):	SC 20013/99
COUNSEL:	Mr Burbidge QC / Mr R Wilson (Plaintiff) Mr D. Robinson SC / Mr J. Horowitz (1st - 4th Defendants)
SOLICITORS:	Austrailan Government Solicitor (Plaintiff) Horowitz & Bilinsky Solicitors (1st - 4th Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BELL J

Wednesday 2 May 2007

20013/99 Chief Executive Officer of Customs v Evenfont Pty Ltd

JUDGMENT

1 BELL J: By notice of motion filed on 20 April the third and fourth defendants (the personal defendants) claim an order excluding them from the operation of any order or direction requiring them to file any affidavits on which they propose to rely.

2 The proceedings were commenced by statement of claim which was filed on 20 January 1999. An amended statement of claim was filed on 17 March 1999. The matter was fixed for trial on Monday 30 April 2007 with an estimate of six weeks.

3 The proceedings are an “excise prosecution” by which the plaintiff charges the four defendants with (i) the evasion of excise duty payable in respect of certain petroleum products; (ii) knowingly making false statements to Customs’ officers; (iii) the movement of excisable goods subject to the control of Customs without authority. Each offence is contrary to a provision of the Excise Act 1901 (Cth) (the Act).

4 The first defendant, Evenfont Pty Ltd (Evenfont), is a company which is alleged to have carried on the business of manufacturing petroleum products from its premises at Seven Hills and, as from August 1996, also at premises at Rutherford and to have held an excise manufacturers licence under the Act in respect of each premises.

5 The second defendant, Truegain Pty Ltd (Truegain), is the ultimate holding company of Evenfont and holds all the issued shares of Evenfont.

6 It is alleged that between 18 June 1992 and 17 March 1999 the third defendant, Robert Lenard Pullinger, and the fourth defendant, Paul Andrew Lucas, were the directors of and former shareholders in Evenfont and, together with a company Glowbye Pty Ltd, were at all material times the directors of and shareholders in Truegain.

7 IThe plaintiff pleads that the personal defendants at all material times managed the activities of Evenfont and Truegain and that whatever was done by Evenfont and Truegain was done by the personal defendants on behalf of Evenfont and Truegain or under the direction and control of the personal defendants.

8 The personal defendants, or one of them, are alleged to have compiled and signed each entry for home consumption that is referred to in the amended statement of claim, or to have given directions for the compiling and endorsement of each such entry. The plaintiff pleads that the personal defendants were aware of the existence of false particulars in each of the entries.

9 Section 136 of the Act provides:

136 Prosecution in accordance with practice rules
Every Excise prosecution in a court referred to in subsection 134(1) may be commenced and prosecuted and proceeded with in accordance with any rules of practice (if any) established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge.

10 Section 144 of the Act provides that in any excise prosecution the averment of the prosecutor or plaintiff contained in the originating process shall be prima facie evidence of the matter or matters averred. This provision does not apply to any fault element of an offence.

11 The onus is upon the plaintiff to prove the charges in the amended statement of claim beyond reasonable doubt: Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; 216 CLR 161.

12 In support of the relief claimed in their motion the personal defendants relied on the affidavit of their solicitor, Claudius Bilinsky, which was sworn on 20 April 2007.

13 The plaintiff relied on the affidavits of Peter James Swinton, sworn 20 April (paragraphs 5 and 22-26 were not read) and 30 April 2007.

14 Evenfont and the third defendant, Robert Pullinger, were defendants in a related set of proceedings, involving the plaintiff and Camile Trading Pty Limited (the Camile proceedings), which were commenced in 1997. The two proceedings travelled together over the course of directions hearings.

15 On 6 August 1999 the proceedings were transferred to the Differential Case Management list pursuant to Practice Note 88.

16 On 13 June 2000 directions were given, including that the defendants file and serve all affidavits to be relied upon at the trial, on or before 15 December 2000.

17 Subsequently, the plaintiff requested time in which to file its evidence. Thereafter there were delays associated with certain procedural challenges made in the Camile proceedings. There were further delays associated with the parties’ agreement to await the outcome of the High Court’s decision in Labrador Liquor, which was delivered on 5 September 2003.

18 The plaintiff filed 16 affidavits prior to 18 September 2002, together with an affidavit from M R Gibb and a supplementary affidavit from a further witness, Mr Small, on 11 December 2003.

19 On 7 November 2003 the Court ordered, “the defendants have until 2 January 2004 to file their affidavits; the plaintiff has until 16 January to file affidavits in reply”.

20 On 6 February 2004 certain of the defendants in the Camile proceedings filed a notice of motion claiming orders, including that the proceedings be transferred to the Criminal Division and that they have leave to withdraw their verified defences and to file unverified defences in lieu thereof. The motion came on before Dunford J, who delivered judgment on 21 December 2004: Chief Executive Officer of Customs v Camile Trading Pty Ltd [2004] NSWSC 1256. The orders that his Honour made on that occasion included directions which excluded the personal defendants from any requirement to file affidavits or witness statements before the final hearing.

21 The plaintiff was represented in the Camile proceedings by Mr Hastings QC and Mr Wilson. Mr Hastings QC and Mr Wilson were also appearing for the plaintiff in the present proceedings.

22 On 3 February 2005 Mr Bilinsky, the solicitor acting for all defendants, informed the Court that his clients would be, “in a position to file affidavits by 15 April”. By consent, orders were made including, “the defendants file and serve any affidavits upon which they wish to rely by 15 April 2005”.

23 On 18 April 2005 Mr Bilinsky sought further time to file affidavits to allow him to inspect documents produced in answer to notices to produce.

24 On 24 May 2005 Mr Bilinsky sought a further three weeks in which to file the defendants’ affidavit.

25 On 10 June 2005 these proceedings and the Camile proceedings were jointly mentioned and, on this occasion, Mr Bilinsky sought further time to file affidavits “four weeks for the usual witnesses, 8-12 weeks for experts”. Hoeben J directed the parties to produce a timetable for affidavits to the Registrar on 14 June and stood both matters back into the Registrar’s list.

26 On 14 June 2005 Mr Swinton spoke with Mr Bilinksy. Mr Bilinsky stated he had not been able to obtain instructions about a timetable for the affidavits and offered to mention the matter on that day and to obtain an order, at least, to file his clients’ defences.

27 Mr Bilinsky wrote to Mr Swinton on 14 June 2005 informing him of the directions given by Registrar Howe on that day. In that letter he said:

In relation to the 1999 proceedings, the corporate defendants must file their defences by 28 June 2005 and the matter was stood over to 5 July 2005 for further mention.

28 On 12 August 2005 Hislop J listed the Camile proceedings and the present proceedings for trial. No affidavits had been filed on behalf of the defendants. No application was made that they be required to do so. It appears that the Camile proceedings were listed to commence on 24 April: CEO of Customs v Camile Trading Pty Limited [2006] NSWSC 1401. These proceedings were listed to commence on 5 June 2005.

29 The Camile proceedings were heard over a number of days, concluding on 3 August 2006. Judgment was delivered on 19 December 2006.

30 The trial of the present proceedings was vacated because the Camile proceedings were still on foot.

31 On 4 July 2006 the present hearing date was fixed. On that occasion no application was made by the plaintiff that the defendants be required to file any affidavits on which they proposed to rely.

32 The first and second defendants (the corporate defendants) filed a defence to the further amended statement of claim on 24 March 2006. No defence has been filed by the personal defendants. The personal defendants do not seek to be excused from the requirement that they file a defence. Mr Robinson SC, who with Mr Horowitz appears on the defendants’ behalf, said that their defence could be filed by Wednesday 3 May.

33 In the Camile proceedings no affidavits were filed on behalf of the defendants before the hearing commenced. After the plaintiff closed its case affidavits were sworn and served by Robert Pullinger, Paul Lucas who were both personal defendants and Professor Batts.

34 On 26 February 2007 the plaintiff applied to vacate the date fixed for the trial. The basis of the application was the prospect that Mr Hastings QC would not be available to appear in the matter. He put the application in this way:

The normal reaction of course is that there are plenty of counsel around who can be retained in the time available in order to prepare for the matter. The particular issue which complicates this situation is the fact that the defendants have ignored effectively previous orders made for filing affidavits upon which they wish to rely. And have also made a general plea in their defence. This was the same approach which was taken in Camile in the face of similar orders. What happened then was at the conclusion of the plaintiff’s case evidence was then offered by way of affidavit initially and then of course by evidence in chief and cross-examination without any previous notice to the plaintiff, and there are all sorts of legal issues which stem from the High Court decision in Labrador and obligations of the defendants in these matters, particularly personal defendants. In the circumstances it was not in a position to take any steps about that situation, but what it does mean is that we anticipate similar issues will occur in this matter. So presumably at the end of our case the defendant will produce some affidavits for the first time telling us what issues and what facts are to be relied upon. The complication then is there is a great advantage in me having heard the evidence in the related proceedings which dealt with some of the aspects of the manufacturing processes of Evenfont, being able to absorb the issues which are produced at short notice in order to deal with them on the run so to speak (T 26/02/07 2.39-58).
…
The corporate defendants do not share the same privilege against self-incrimination. And I think we’ve been told that part of the explanation for the inactivity is that the principal witnesses for the corporate defendants would be the personal defendants. I think that’s backed us into a corner from which we can’t escape (T5.16-22).

35 The application to adjourn the hearing date was opposed by the defendants. It was not granted.

36 On the plaintiff’s application, the proceedings were listed for mention on 18 April. Mr Burbidge QC, who with Mr Wilson now appears on the plaintiff’s behalf, was given leave to file in court a notice of motion claiming orders that summary judgment be entered against the defendants, in the alternative, that summary judgment be entered against the corporate defendants. In the course of short submissions that were made on that day Mr Burbidge QC referred to the defendants’ failure to file evidence in accordance with the earlier directions of the Court. Mr Robinson SC foreshadowed filing the present motion. There was no opportunity to list either motion for hearing prior to the date fixed for the trial. The plaintiff’s motion was stood over for hearing to 30 April and the defendants were given leave to file a motion returnable on that date. At the commencement of proceedings on 30 April the parties were agreed that it was convenient to deal with the personal defendants’ motion first, since its outcome may have some impact on the stance taken by the plaintiff with respect to his motion.

37 The directions earlier made in the proceedings for the filing and service of affidavits have not been complied with. Mr Bilinsky states that after the delivery of Dunford J’s judgment on the motion in the Camile proceedings until the time of the unsuccessful adjournment application in February of this year he had not received any request from the plaintiff’s solicitors that the personal defendants file any affidavits in the proceedings. He says that no expert evidence has been served on the plaintiff’s behalf.

38 Before turning to the way the parties put their cases it is convenient to refer to Dunford J’s decision in the Camile proceedings.

39 Dunford J held that by virtue of s 136 of the Act the proceedings were properly subject to the civil rules of practice and procedure. His Honour expressed his agreement with the judgment of McDougall J in Chief Executive Officer of Customs v Afiouny [2004] NSWSC 79 in this respect.

40 His Honour observed that the provision of witness statements and affidavits is a discretionary matter for the Court (which at the time was the subject of Practice Note 120). His Honour discussed the privilege against self-incrimination and self-exposure to penalties, in the context of the claims made against the personal defendants. He referred to the decision of the Full Court of the Federal Court in Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132; 130 FCR 37, noting that the Court had followed the decision of Sackville J in Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465 in preference to a later decision of the Victorian Court of Appeal in Sidebottom v The Federal Commissioner of Taxation [2003] VSCA 2; 6 VR 302. His Honour also referred to the decision of the High Court in Rich v Australian Securities Investments Commission [204] HCA 42; 220 CLR 129, noting that the Court held an order for disqualification from acting as a director constituted proceedings for a penalty with the consequence that the respondent could not be ordered to give discovery by reason of his privilege. His Honour also noted that it had been conceded by the Australian Securities and Investment Commission in the proceedings that if the respondent was not liable to give discovery he was not liable to be ordered to file affidavits in advance of the hearing.

41 Dunford J expressed his agreement (subject to one reservation) with the decision of the Full Court of the Supreme Court of Western Australia in Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681. In that case the Court held that any privilege does not extend to relieving a personal defendant to an excise prosecution from filing a defence. Dunford J’s reservation related to a case in which the pleading of a positive exculpatory case may open up a fresh field of enquiry for the plaintiff (at [32]). In this respect his Honour said (at [36]):

It is unnecessary to consider in this case what the position might be if an individual defendant in a case such as the present wished to raise a “positive” defence by way of confession and avoidance seeking to raise new and different facts. It may be that in such a case, the rules would be dispensed with to the extent of permitting the individual defendant to file an unverified defence, but I express no concluded view on this issue.

42 Dunford J was satisfied that the verified defence should remain on the file and that the proceedings should remain in the ordinary general list of the Common Law Division, subject to differential case management in accordance with Practice Note 120. His Honour varied an earlier order for the filing of affidavits so as to exclude the personal defendants from its operation. Although the third defendant, Mr Pullinger, had not been a party to the motion, the orders made by Dunford J exempted him as a personal defendant from any earlier direction requiring him to file affidavits or provide witness statements prior to the final hearing in the Camile proceedings.

43 Mr Burbidge submits that the personal defendants should not be relieved of the obligation of filing and serving any affidavit evidence upon which they propose to rely prior to the trial. The plaintiff anticipates that the defendants may call evidence, including expert evidence, directed to the composition and characteristics of petroleum products formed at varying temperatures. Such evidence, were it to amount to a defence or partial defence, would necessitate investigation by the plaintiff including by obtaining expert advice, and may necessitate a case in reply. This raises the significant possibility of the trial being interrupted.

44 In Mr Burbidge’s submission, to the extent that Dunford J is to be taken to have found that a personal defendant in an excise prosecution should not be required to file affidavits or witness statements in advance of the hearing because of the privilege against self-exposure to a penalty, his Honour erred. Mr Burbidge submits that the principles are correctly stated in the decisions of the Full Court of the Supreme Court of Western Australia in Bridal Fashions Pty Ltd and the Victorian Court of Appeal in Sidebottom. He submitted that the principles explained by the High Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 require that this Court at first instance follow the decisions of intermediate State appellate courts dealing with the same legislative scheme.

45 In Mr Burbidge’s submission no assistance is to be gained from the decision of the High Court in Rich v Australian Securities and Investments Commission [2004] HCA 42 since the Court was not concerned with the requirement for the filing and service of witness statements and affidavits. In his submission the principles remain as stated in Sidebottom.

46 Bridal Fashions was concerned with the impact, if any, of the privilege against self-exposure to a penalty on the requirement of the rules that a defendant file a defence.

47 Sidebottom was an appeal from a direction made by a judge that personal defendants to an excise prosecution file and serve witness statements prior to the trial. Phillips JA (with whom O’Bryan AJA agreed) noted that s 136 of the Act permits the commencement of excise prosecutions by writ on the civil side and authorises their prosecution accordingly. His Honour observed that directions for the filing of witness statements before trial are nowadays a common part of the usual practice and procedure of the court in civil cases. His Honour referred to two decisions of the Federal Court in which orders for witness statements had been refused (Australian Competition and Consumer Commission v J McPhee & Sons (Australia) Pty Ltd (1997) 77 FCR 217) and Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465). In the latter case Sackville J observed that an order for the filing of witness statements, while not amounting to compulsion to provide information, had the effect of leaving a defendant with little choice but to do so if he wished to avoid adverse forensic consequences. Phillips JA was critical of this reasoning, observing that the adverse forensic consequence (and corresponding forensic advantage to the plaintiff) was the product of the defendant’s decision to give evidence. His Honour considered the absence of coercion attending to an order for the delivery of witness statements before trial to be critical. He said this (314):

The appellants are required to file and serve witness statements only if they choose to give or adduce evidence and then only in respect of evidence that they choose to lead. The order is concerned rather with the timing of the disclosure of that evidence than with its provision. Cases on the making of orders for discovery or the administering of interrogatories are not to the point: it seems to be well established that in a proceeding such as the present, in which the plaintiff is seeking to establish guilt of offences and to recover penalties by way of punishment, orders will not be made for discovery or interrogatories because of the nature of the proceeding itself and without the need for any further or specific proof of prejudice. It is a different matter when an order is sought for delivery of witness statements before trial and, despite the appellants' submission to the contrary, I see real no support for the proposition that defendants in an excise prosecution for the recovery of penalties are entitled to resist such an order on the ground that they cannot be compelled, as a matter of principle, to disclose their evidence before trial, or indeed before the plaintiff's case has been closed - at least in this instance where pleadings have closed, further and better particulars have been provided and the plaintiff's witness statements were delivered to all defendants some time ago.

48 In Sidebottom Phillips JA observed that the appellants had chosen to rest their case on general principle and that the Court had not been required to consider the position that might arise if evidence had been led to establish some specific risk to a party. Mr Burbidge QC pointed to the absence of evidence of specific risk to either of the personal defendants in the present proceedings.

49 The Full Court of the Federal Court considered Amcor and Sidebottom in FFE Building Services. The proceedings in that case were brought by the Australian Competition and Consumer Commission (the Commission) for the recovery of pecuniary penalties pursuant to s 76 of the Trade Practices Act 1974 (Cth) against four corporations and seven personal respondents. The Commission requested that the Court make orders for the filing and service of statements of evidence of all proposed witnesses on whom the personal respondents proposed to rely. It proffered an undertaking, through its counsel, that, if statements were provided by the personal respondents, the statements would not be tendered in the Commission’s case in chief, nor used to support an argument that a particular personal respondent had a case to answer. Two respondents opposed the making of such an order, contending that to do so would be inconsistent with their right to refuse to provide information that might tend to expose them to a penalty. Each offered to consent to a direction that he provide statements of evidence within a short period after the Commission’s case against him closed.

50 The Court (Emmett, Hely and Jacobson JJ) discussed the general principles relating to the privilege against self-incrimination, noting that it protects an individual from making a disclosure that may lead to incrimination or to the discovery of real evidence of an incriminating nature (at 40 [12]). The Court went on to say (at 40 [14]):

[14] By requiring an individual respondent, prior to the closure of an applicant's case, to file statements of evidence proposed to be given by witnesses to be called by that respondent, such a respondent would be exposed to the risk that indirect or derivative evidence, being evidence obtained by using the material disclosed in the statement as a basis of investigation, could be tendered against the respondent. The provisional disclosure of information may set in train a process that may lead to the imposition of a penalty or may lead to the discovery of real evidence in support of the imposition of a penalty. [Citations omitted]

51 In FFE Building Services the Commission submitted that it was highly desirable that the Full Federal Court follow the decision of the Victorian Court of Appeal in Sidebottom, citing the principles enunciated by the High Court in Marlborough Gold Mines Ltd. The Court considered that the question was one relating to the general law and did not concern the construction of a statue. It identified the question as being the content of the privilege against being required to furnish information that might tend to result in the imposition of a penalty. The Court noted that the decision in Sidebottom was inconsistent with the approach which had been taken by a number of judges at first instance in proceedings under the Trade Practices Act (TPA) and the Corporations Law. It also noted the remarks of Austin J in Australian Securities and Investments Commission v Rich (2003) 45 ACSR 305 at [69], doubting the correctness of Sidebottom and describing the reasoning of Sackville J in Amcor as compelling. The Court determined not to follow Sidebottom. The Court said (at 44 - 45):

[29] While there would be no direct compulsion on Fodera and Bell to file statements pursuant to the directions sought by the Commission, the practical consequence of the direction may be that they will be compelled to file statements in order to preserve the option to which they are entitled, to decide after the Commission's case is closed, to go into evidence. If they are compelled either to file statements before the commencement of the trial or to be precluded from going into evidence, there is a practical compulsion imposed on them, in order to preserve the option that the law gives to them, to file statements. That is inconsistent with the privilege.
[30] We agree with the observations of Sackville J, quoted above, that the 'election' which individual respondents face as a result of an order for the provision of witnesses' statements is neither unconstrained nor free and the 'choice' with which a respondent is confronted may be more apparent than real.
…
[33] However, it may readily be inferred that such forensic advantage may accrue to the Commission if only because the Commission sees its interests, as the party seeking a penalty, as being furthered by an obligation to provide the statements. Pre-trial disclosure of the evidence to be called by an individual respondent may assist the Commission to improve its case against that respondent, albeit leave of the Court would be required if the Commission sought to expand its case in chief as a result of “leads” obtained from the statements. The undertakings proffered by the Commission would not preclude the Commission from seeking leave. Whether leave would be granted is a different question. But the possibility that it might be granted indicates that the respondent is at risk of exposing himself to a penalty by reason of the provision of information in advance of the trial. It is not a matter of mistrusting the Commission or the Court. Circumstances might arise where it would be proper to permit such evidence to be adduced by the Commission notwithstanding that it was obtained as a result of “leads” obtained from the statements. As Deane J said in Reid v Howard it is obvious that a person who has to rely on a refusal to exercise a judicial discretion is in a less secure position than one who, by relying on the privilege, can avoid providing the information in the first place.

52 The High Court in Rich held that a disqualification order under the Corporations Act is a proceeding for the imposition of a penalty and, accordingly, that the proper course was that an order for discovery should not have been made. In the joint reasons it is noted that the only question argued before the Court was whether an order for discovery should have been made. Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said at 364 [4]:

The questions agitated in the courts below about the order requiring the appellants to file their affidavit evidence, before the commencement of the trial, were not argued in this Court. The Commission accepted that if discovery should not have been ordered, the order requiring the appellants to file and serve affidavits should not have been made.

53 In the Court of Appeal in Rich v Australian Securities and Investments Commission [2003] NSWCA 342; 183 FLR 361 Spigelman CJ referred to the respondent’s notice of contention, which raised the orders concerning witness statements. His Honour commented on the conflicting decisions of intermediate courts of appeal in Sidebottom and FFE Building Services, observing, “that issue should be regarded as open in this Court”.

54 McColl JA in Rich discussed the notice of contention at 435-436 [389]-[392]. Her Honour said at [391]-[392]:

[391] ASIC relied upon Sidebottom before Austin J. His Honour was of the view that if it was necessary to decide the point, Sackville J's reasoning in Amcor was compelling. He found it unnecessary, however, to decide between the two approaches in Sidebottom and Amcor because of his view that the present case was not a case for the imposition of a penalty.

[392] I, too, find the reasoning of Sackville J in Amcor Printing Papers and the Full Federal Court's decision in ACCC v FFE Building Services Ltd compelling.

55 In Mr Burbidge’s submission Sidebottom is a decision concerned with the Act, absent a proper basis for the exercise of discretion in favour of the personal defendants, the Court should follow it and direct that they comply with the earlier directions for filing witness statements. This would enable the efficient conduct of the proceedings in accordance with the UCPR.

56 Mr Burbidge made the formal submission that the principle relied upon by the defendants is not available to them in the present proceedings because it has been abrogated by sections 136, 143 and 144 of the Act, which provide that defendants are compellable to give evidence, that excise prosecutions shall be conducted according to civil procedures, and that the plaintiff may establish a prima facie case by averment.

57 Mr Robinson submitted that the inference to be drawn from Mr Bilinsky’s affidavit is that the parties were agreed on the approach to the trial and that there was no reason why the Court would permit the plaintiff at this late stage to act inconsistently with the agreed approach. The approach reflected the parties’ acceptance of the judgment of Dunford J as governing the procedures that were to be followed in the present proceedings as well as the Camile proceedings. If the Court were to permit reconsideration of the procedures to be adopted for this trial, Mr Robinson submitted that the decision of Dunford J should be followed for reasons of comity and because it was plainly correct.

58 The plaintiff does not accept that the parties were agreed on an approach to the conduct of the trial. Mr Swinton the solicitor with the carriage of this matter and the Camile proceedings on the plaintiff’s behalf says that he was not in court when the defendants in the Camile proceedings disclosed “their intended course of action” before Kirby J and that he had not been instructed by the plaintiff nor did he instruct any person in that case that the defendants need not file evidence until after the close of the plaintiff’s case. Be that as it may, the Camile proceedings were conducted on the basis that the personal defendants were not required to file affidavits or witness statements prior to the close of the plaintiff’s case. When these proceedings were before the Court in February of this year Mr Hastings, appearing on the plaintiff’s behalf, accepted that the same course would be followed at the trial of these proceedings.

59 Mr Burbidge placed emphasis on s 144 of the Act (and the cognate provision of the Customs Act) which permit the plaintiff to aver matters in the originating process. The averment is prima facie evidence of the matter averred. In Mr Burbidge’s submission this is a feature of Excise (and Customs) prosecutions which distinguishes them from proceedings under the TPA or the Corporations Act for the recovery of civil penalties. It may explain why in the latter types of proceedings the Federal Court has adopted a different approach to that applied by the Victorian Court with respect to an excise prosecution. It is difficult to conceive of a case in which a successful no case submission could be made where the plaintiff has the benefit of averments in his statement of claim. Requiring a defendant who intends to go into evidence to file affidavits before trial does not deprive him of the forensic advantage of holding back from disclosure of his case in the hope of a successful no case application.

60 The Court in FFE Building Services approached the consideration of forensic disadvantage to a defendant in proceedings to recover a civil penalty by reference to matters including the derivative use of information disclosed in witness statements. It is against this risk that Mr Robinson SC submits the personal defendants have an entitlement to protection.

61 It seems to me that the decisions in Sidebottom and FFE Building Services cannot be reconciled on the basis that they relate to different legislative schemes. There are inconsistent decisions of intermediate appellate courts on the question of whether directions requiring a defendant to file witness statements before the close of the plaintiff’s case are inconsistent with maintenance of the privilege against self-exposure to penalty.

62 Dunford J followed the reasoning in FFE Building Services in preference to the decision in Sidebottom.

63 The Court of Appeal of Queensland dealt with an appeal from a number of convictions for offences contrary to the Act in Commissioner of Taxation v Price [2006] QCA 108; [2006] 2 Qd R 316. The appellant unsuccessfully sought to contend that the procedure at trial had been fundamentally unfair. Keane JA (the other members of the Court concurring) cited Dunford J’s judgment with approval, observing (at 329 [40.46]):

Whether or not the appellant is able to establish a miscarriage of justice by reason of the failure by the prosecution to seek directions to preserve his right to silence and his privilege against exposing himself to penalties, is a matter to which I shall return. It is sufficient for present purposes to say that it is simply wrong to contend that either s 136 of the Act or the UCPR operate inevitably to deny a defendant the benefit of these common law rights and privileges.

64 If it were necessary for me to decide I would follow the decision of the Full Federal Court in FFE Building Services, because it has commanded the support of judges of this Court; it is consistent with the reasoning of the Court of Appeal in Queensland and because I respectfully agree with the views expressed by Austin J and McColl JA that the reasoning is compelling. However, I do not consider that the determination of the present motion requires the resolution of the conflict. This is because directions for the conduct of trials made pursuant to the UCPR involve the exercise of discretion. The directions made for the defendants to file affidavits were not complied and the proceedings were set down for trial without that non-compliance being the subject of complaint.

65 After Dunford J’s determination in the Camile proceedings, the plaintiff appears to have proceeded upon an acceptance that the Court would not compel the personal defendants to file their evidence. The difficulties that this course may occasion were relied on by the plaintiff in support of the application to vacate the trial date. No application of the present character was made at that time. Any order made now requiring the defendants to file any evidence upon which they propose to rely will necessitate delay in the commencement of the trial. I am conscious that the trial is likely to be attended by some delay in any event since the plaintiff will need time to consider any evidence which the defendants choose to serve at the close of his case. Nonetheless the matter has been fixed for trial for many months. The defendants have proceeded on the understanding that no orders would be made requiring the personal defendants to file their evidence prior to the close of the prosecution case.

66 In my opinion, in light of the history of these proceedings, the proper course is for the trial to commence without further delay. I do not propose to require the third or fourth defendants to file any evidence upon which they propose to rely before the close of the prosecution case.

67 For these reasons I make orders in conformity with prayer one of the third and fourth defendants’ motion.

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