Environment Protection Authority v Caltex Refining Co Pty Ltd

[1992] HCATrans 352

~

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S74 of 1992

B e t w e e n -

ENVIRONMENT PROTECTION

AUTHORITY

Appellant

and

CALTEX REFINING CO PTY LIMITED

Respondent

MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 8 DECEMBER 1992, AT 10.24 AM

Copyright in the High Court of Australia

Environment 1 8/12/92

MR K. MASON, QC (Solicitor-General for the State of New

South Wales): If the Court pleases, I appear in

this matter with my learned friend, MR M.J. JOSEPH

for the appellant. (instructed by H.K. Roberts,

Crown Solicitor for New South Wales)

MR D.E. HORTON, QC: If Your Honours please, I appear with

MR J.T. GLEESON for Caltex. (instructed by

Middletons Moore & Bevins)

MASON CJ: Yes. Mr Solicitor.

MR MASON:  Your Honours, there has been given to the Court

just this morning, I believe, two bound blue

volumes of materials and if I may take the Court to

volume 2 firstly, to go straight to the statutory

background of the appeal.

Page 204 is the commencement of the

Clean Waters Act, which was the Act under which the

relevant prosecution was brought. The Court could

note section 4(1) at 204; in section 5 there are

definitions of "authorized officer", "licence" and

"pollute"; nothing particularly turning on those

definitions, but they are drawn to the Court's

attention, and at page 208 the central provision,

section 16 of the Clean Waters Act. Section 16(1)

provides that:

A person shall not pollute any waters.

There is an extended definition of pollution in

subsection (2); in subsection (3) there is an

alternative offence of causing waters to be

polluted, and in subsection (4) an offence of

permitting waters to be polluted. Subsection (6)

provides that:

Notwithstanding the foregoing provisions of

this section it shall not be an offence

arising under those provisions for a person to

pollute any waters if he holds a licence and

does not pollute the waters in contravention

of any of the conditions of the licence.

The earlier definition of "licence" referred

one to this other statute called the State

Pollution Control Commission Act. Subsection (7)

imposes penalties for contravention.

Your Honours, in the present form today there

have been some amendments of the Clean Waters Act

and offences in relation to this and other

environmental statutes are now dealt with in a

separate statute, the Environmental Offences and

Penalties Act, but the legislation before

Environment 2 8/12/92

Your Honours is the legislation at the time of the relevant charge and offence.

BRENNAN J:  Do these offences still exist?

MR MASON:  Yes, they do. The only difference is that a

breach of section 16 is no longer punishable as a

contravention of the Clean Waters Act. It is

punishable as a contravention of the the

Environmental Offences and Penalties Act, although

one refers back to section 16 to get the content of

the offence. So there is a minor amendment of

subsection (7) in the current form of section 16,
but as Your Honours have it is the form at the time

of the relevant proceedings.

MASON CJ:	The amendments do not bear on the importance of the question, questions which we are asked to
determine?
MR MASON:	No, they do not. Section 18 provides:

Notwithstanding any provision of section 16 or 17 where a person becomes the

occupier of any premises and immediately

before he became the occupier of the premises

the premises were occupied by a person who was

the holder of a licence, that firstmentioned

person is not guilty of an offence ..... if, had

he been the holder of the licence, he would

not have been guilty of the offence

and, in effect, it allows that person to get the

benefit of the existing licence upon its transfer.

Section 19, only tangential relevance, refers to an offence of installing:

apparatus, equipment or works for:

(i)     the discharge of pollutants ..... except in

accordance with a pollution control approval.

The Act to which I will next come has a system of

licences with respect, in effect, to activities,

and approvals with respect to construction of

polluting apparatus.

On page 211 is the commencement of Part 5, the

general section of the Clean Waters Act, and one
finds two sections, 28 and 29, that are fairly

central to the proceedings.

28. (1) The Commission may, by written

notice served on the occupier of any premises, require the occupier to furnish to it ..... such

information as to -

Environment 3 8/12/92

and various matters, (a), (b) and (c), particularly

(c). Subsection (2) provides a penalty for failure

to comply, and subsection (3) provides that:

Any information furnished or statement made to

the Commission ..... shall not, if the person
furnishing the information or making the

statement objected, at the time -

on the ground of incrimination -

be admissible -

in effect, for -

any prosecution.

Section 29, which is the section particularly

involved, provides that:

An authorised officer may

enter ..... premises ..... examine and inspect any

apparatus ..... take and remove samples -

et cetera. Subsection (2):

An authorised officer may, by notice in

writing, require -

(a) the occupier of any premises from which

pollutants are being or are usually discharged

into any waters to produce to that authorised

officer any reports, books, plans, maps or

documents relating to the discharge from the

premises of pollutants into the waters or

relating to any manufacturing, industrial or
trade process.

If one compares 28(l)(c) and 29(2)(a), there are two immediate points of distinction.

Section 29(2)(a) only applies with respect to

occupiers of premises:

from which pollutants are being or are

usually discharged -

and, secondly, 29(2)(a) fixes itself upon existing

documents:

reports, books, plans ..... relating to the

discharge -

whereas 28, in effect, entitles the Commission to

interrogate for fresh information.

Section 33 of the Clean Waters Act is on the

next page and provides that:

Environment 8/12/92

Proceedings for an offence against this

Act ..... may be taken before a Local

Court ..... or before the Court -

which is the Land and Environment Court -

in its summary jurisdiction.

And that is in fact what occurred.

33A provides the court with power to make:

Orders for restoration and compensation .....

in proceedings ..... for an offence against

this Act arising under section 16.

That can occur at the time of the conviction.

Section 34 provides a further cumulative remedy, referable to section 16 for remedying the

contravention. And section 35 provides that:

Nothing in this Act ..... affects any right that

a person may have under any rule of law -

with respect, in effect, to civil matters.

Your Honours, at page 217 commences the State

Pollution Control Commission Act 1970. Again, we

have endeavoured to create the Act in its relevant

form at the time of the alleged offences. Rather

confusingly this Act is now called the Pollution

Control Act, although it is the same Act. But as

at the key date, what you have before you is the

form of the legislation.

At page 220, section 4(1) provides, in effect,

State Pollution Control general responsibilities of the body then

for the paramouncy of the

constituted called the State Pollution Control

Commission. That body is constituted by section 6

of the Act Your Honours have before you and

section 11 at 232 sets out its general

responsibilities.

The point we wish to draw attention to by

referring to ll(a), (b), and (c) is to show that
the Commission's role is not simply confined to a

prosecutor's role, but one that looks at abatement

and, in effect, what one might call law reform,

because ll(c) gives an inquiring and reporting role

with respect to the effectiveness of matters and

section 12 provides:

The Commission may-

Environment 8/12/92

formulate and promote plans for the

prevention, control, abatement or mitigation

of the pollution of the environment -

carry out surveys, et cetera.

Section 15 follows this broader function by

giving the Commission a role to report on the

necessity for further legislation. On page 236 is

the commencement of Part IIIA dealing with licences

and approvals and section 17A empowers a person to:

apply to the Commission for a licence in

respect of any one or more of the following:

and Your Honours will see that it relates to clean

air, clean waters, drains under the

Clean Waters Act and:

scheduled premises within the meaning of the

Noise Control Act 1975.

17B provides that an application on the prescribed form, the relevant regulation is at page 284 later

in this book. 17D empowers the Commission to:

grant any application for a licence ..... either

subject to conditions or unconditionally; or

to refuse a licence, but it restricts its power to
refuse an application in subsection (2) by a

precondition of notice and hearing, in effect.

Subsection (3) enables the Commission to, in

effect, vary the licence conditions during the

currency of the licence and subsection (4)

stipulates the factors to which the Commission

shall have regard in varying those conditions and

in exercising its powers generally.

Subsection (6) provides that:

The refusal of an application, the

revocation or suspension of a licence, the revocation or variation of any condition -

has no effect until the appeal rights given
elsewhere in this Act have expired. Subsection (9)

provides that:

a person who, being the holder of a licence,

contravenes any condition of the licence is

guilty of an offense against this Act -

In this case, Caltex was prosecuted for breach of

section 16 of the Clean Waters Act, in other words, polluting or polluting beyond the conditions of the

Environment 6 8/12/92

licence, and pursuant to section 17D(9) of the

State Pollution Control Commission Act for breach

of licence conditions.

17E provides that the duration of a licence is

one year except with respect to certain short-term

licences.

Section 17H, at the bottom of page 240, was

not the form of the provision at the relevant time.

If Your Honours could perhaps make a cross note to page 269 for the new form of 17H, to which I will

come shortly. 17 I deal with "Pollution control

approvals", which, as I indicated earlier, is a
form of licence with respect to the construction of
apparatus that is capable of polluting, rather than

the activity of pollution itself.

On page 243 is the commencement of Division 3

of Part IIIA, dealing with appeal rights enabling,

in 17M, any applicant for a licence who is

aggrieved to apply to the Court, and 17M(3), in

effect, allows the Court to impose conditions over

the objection of the Commission.

Your Honours, as is noted on page 244, there

was a new Division 4 of Part IIIA inserted at the

relevant time, and I will come to that shortly if I

may. At page 251, section 24 gives the Commission

additional powers of entry and in 24(1A) additional

power by notice to require information to be
provided.

In the present case the notice was served under section 29 of the Clean Waters Act so

Your Honours will not be directly concerned with

these powers. Section 25 provides an obligation to

furnish information to the State Pollution Control

Commission. At page 269 is an amendment inserting

a new section 17H, which amendment had been made at

the relevant time.

The conditions of a licence may require the

holder of the licence to supply to the

Commission, when required by those conditions,

particulars certified by that holder (or by

another person approved by the Commission) as

correct and which relate -

(a) to the doing or completion of anything

required to be done by those conditionsi or

(b) to the operation or maintenance of
premises, plant or equipment to which the
licence relates.

Environment 7 8/12/92

(2) Without affecting the generality of

subsection (1), conditions of a licence may

require the supply of particulars derived from

monitoring -

(a) the operation of plant or equipment; or

(b) ambient conditions -

et cetera. At page 270, at the bottom of the page,

is the Division 4 of Part IIIA, which I mentioned

earlier had been inserted into that part at the

relevant time. Section 17 O enabled the Commission

by:

notice served on -

(a) an applicant for a licence; or

(b) an applicant for a pollution control

approval,

require the applicant to supply to the

Commission such information and such plans and

specifications as the Commission considers

necessary.

And 17P provides that:

A holder of a licence or a pollution control

approval who supplies particulars for the

purposes of a condition referred to in

section 17H -

mentioned earlier -

is guilty of the offence ..... if any of the

particulars is false or misleading.

Subsection (2) is important, although it in turn

was amended. In its form, at that stage, in 1987

it provided that:

Any particulars so supplied to the Commission

shall not, if the holder objects (when

supplying them) to doing so on the ground that

they might tend to incriminate the holder, be
admissible in evidence in any prosecution of
that holder for any offence, except an offence
created by subsection (1).

If Your Honours could perhaps make a cross note to page 282 to which I will come now, because at

page 282 is, at the bottom of the page, an

amendment to section 17P(2), the original of which

is at page 271, which deleted the original 17P(2)

and now provided that:

Environment 8 8/12/92

Any particulars so supplied to the

Commission are admissible in evidence in any

prosecution of that holder for any
offence ..... whether or not the particulars

might tend to incriminate that holder.

That Act, a portion of which is set out at

page 282, received assent on 27 November 1989 and

commenced on 30 November 1989 - see the Government

gazette No 116 of 29 November 1989, page 10,233.

Your Honours, at page 283 commence the State

Pollution Control Commission regulation - the
regulations made under the preceding Act -

Regulation 4 is the form of application for a

licence which I mentioned earlier. At page 294 is

the prescribed form of application, and I might
perhaps note, particularly at page 295 at the
bottom, one of the bits of information that the

applicant has to show is:

(2) Discharge to Waters Data

(a)(i) Pollutants are discharged or are likely

to be discharged to waters at the following

point or points -

et cetera. At page 299 is the prescribed form of

licence.

With that legislative background, may I go to

the appeal book and may I ask Your Honours to take
out from, I think, the beginning of volume 1 of the
blue papers there is a chronology that has been
prepared. If I may with that go to the appeal

book to look at the relevant facts. At page 50 and

will see at page 50 near the top, it is provided

following is the licence for the year in question

held by Caltex issued under Part IIIA of the State

the currency of the licence for one year; in fact,

it says one year and a day, but there is no problem

about that:

The above person is hereby licensed under

the provisions of the State Pollution Control

Commission Act subject to any conditions

endorsed hereon.

Then there are pages of conditions. At page 56 are the relevant conditions. Just to see how page 56

fits in, if Your Honours look at page 55 for a

second Your Honours will see that at line 10 those

are additional conditions relating to an -

authorised point of discharge : 275 M S.W. -

Environment 8/12/92

et cetera.	At page 56, which is the relevant
conditions:

Location of authorised point of discharge:

THROUGH A SUBMERGED OCEAN OUTFALL AT YENA GAP

KURNELL.

The relevant conditions are:

1. The volume of wastes discharged shall not

exceed 16,500 kilolitres per day.

2. The wastes shall not:

(d) contain more than 15 milligrams per litre

of grease and oil.

(g) contain more than 5 milligrams per litre
of phenolic compounds.

3.         The following monitoring shall be carried

out:

(d) grease and oil (milligrams per litre)

determined daily

(g) phenolic compound (milligrams per litre) determined weekly

5.         The results of the monitoring required in

Conditions 3 and 4 above shall be

presented graphically and summarized in a

statistical form, and shall be furnished

to the Commission with the application

for renewal of the licence.

6          The Commission's Principal

Engineer-Water, Senior Engineer-Water

Investigations or after-hours complaints

service, shall be notified within 24

hours of any occurrence which causes or

is likely to cause the final effluent to

contain more than 15 milligrams per litre
of grease and oil.

MASON CJ: Is it 34 or 24 hours?

MR MASON:  It is not clear in my copy; I will have it

checked, Your Honour.

MASON CJ: It appears as 34 in the appeal book.

MR MASON:	Yes, it does appear to be 34; it is strange, yes.
BRENNAN J:	The balance of it does not appear at all with

any clarity, so perhaps you could have a copy made

in a clear form and provide it.

Environment 10 8/12/92

MR MASON:  I am sorry; I will have a copy in clear form of

page 56.

That is the licence, with respect, to water.

If you see at page 58, the licence goes on to deal

with noise and other aspects.

Going back to the chronology, Your Honours

BRENNAN J: Before you pass from that, do you link those

conditions with section 17H?

MR MASON:  In part, but not exclusively, yes. The one that

would be directly linked with 17H is condition 5, I

think. 17H is at page 269 of volume 2 - no, I am

sorry, it goes broader than that; they are linked

with 17H, but not exclusively so.

Looking at the chronology, Your Honours, the alleged discharges occur in December 1989 and

January 1990 during the currency of the licence,

and then, as a result of those alleged discharges,

11 summonses issued, and they are set out at

pages 30 to 40. The procedure of the Land and

Environment Court is that a summons will only issue

upon the judge being satisfied that a prima facie

case has been established and permitting the issue

of the summons. Anyway, there are 11 summonses;

they relate either to breach of section 16(1) of the Clean Waters Act or to a breach of 17D(9) of the State Pollution Control Commission Act, which

is the one that deals with breach of conditions,

although the conditions that are involved differ

perhaps from day to day.

The first two relate to the 7 December and the

170(9) breach at page 31 is as to the - line 20 -

the quantity of phenolic compounds. The one at 32

and 33 deal with 10 December; section 16(1), breach

of pollution and a 17D(9) breach of conditions,

this time relating to grease and oil waste.

Page 34 is the 21 December section 16(1),

pollution, and pages 35 and 36, the same date

17D(9). The one at page 35 deals with phenolic

compounds and the one at 36 deals with the volume

of wastes discharged.

Page 37, 18 January, section 16, straight pollution. Page 38, 16(1), straight pollution on

13 January. Page 39, 13 January 17D(9), grease and

oil, and the last one on page 40 is a breach of

conditions, this time relating to phenolic

compounds.

With reference to those charges under

section 16(1), I would remind Your Honours that it

Environment 11 8/12/92

would be a defence if the pollution alleged is in

accordance with the condition of the licence. So,

the licence conditions come into play with respect to that prosecution as well as with respect to the

one which specifically focuses on breach of

condition.

TOOHEY J: Is it the situation, Mr Solicitor, that in some cases there is a pair of prosecutions relating to

the same day - - -

MR MASON:	Yes.
TOOHEY J:	- - - and in other cases a prosecution only under

one or other of the Acts?

MR MASON:  Yes. Your Honours, at page 1 of the yellow

appeal book is the notice issued pursuant to

section 29(2)(a) of the Clean Waters Act which was

conceded to be issued for the sole purpose of the

pending prosecution which recites that Caltex is
the holder of the relevant licence and occupier and

calls upon Caltex to produce to the authorized

officer the documents referred to at lines 20 and

following.

Your Honours will see that they are documents

in existence, at least some of them, documents the

subject of the licence conditions. That notice was

served the following day. At page 4 of the appeal

book is the notice of motion that was filed by

Caltex seeking declaratory relief challenging the

section 29 notice. Page 3 of the appeal book is a

notice to produce that was served under the

relevant rules of the court calling for production,

in effect, for the same documents. This notice, as the court held, has a dual function. It operates as an old fashioned notice to produce, as a pre-

requisite to giving secondary evidence, but it also

operates as a form of subpoena, if valid, of

course.

With that factual material, as the chronology

notes, Mr Justice Stein, on 20 May 1991 gave

judgment in favour of the State Pollution Control

Commission, as it was then known. The matter was

taken on appeal by a form of case stated. The

relevant questions are at page 24 - I am sorry, the

document called "Questions for Determination",

which is, in effect, the case stated, are at

page 24, 29. The Court of Criminal Appeal gave

judgment, in effect, for Caltex on some of the

issues and did not decide others.

The only other factual matter that I draw

Your Honours' attention is at page 226 of the

yellow book. The State Pollution Control

Environment 12 8/12/92

Commission was abolished by statute and its powers were transferred to a body called the Environment

Protection Authority, which was given a statutory

right to continue all pending proceedings. That is

why it is the EPA that is the appellant in these

proceedings.

With that, Your Honours, may I go to our

outline of written submissions.

We seek to raise three broad contentions in

the appeal. The first is that the privilege against

self incrimination is not available to corporations

that are required by otherwise valid process to

produce documents in their possession, custody or

control for the purpose of litigation. The second

is raised at page 13, the submission that if a

corporation is entitled to the privilege then it is
not available in relation to what are called
"required records", an American doctrine that I do
not believe has been discussed or applied in this

country at this stage.

The third proposition at page 16 and following

is that the notice under section 29 was valid.	The
Court of Criminal Appeal held that section 29 of

the Clean Waters Act, by implication, excluded the
privilege. That holding is the subject of a notice
of contentions that my friend will be raising, but
the Court went on to hold that the notice was

unavailable in its present context; that is, where

it was being used solely for the purpose of having

documents produced for prosecution use.

Your Honours, in our submissions relating to

the broad principle as to whether corporations have

the privilege, and we do seek to confine the
context to one involving documents, we submit that

there are various grounds of principle which

support the absence of the privilege. The first is

that the privilege is historically and essentially

a fundamental human right which protects privacy

and, as such, is inapt for corporations.

Your Honours, I will not be reading all of the

passages in the works that are cited in the

submissions, particularly where there is just a

dictum here and there. The Australian Law Reform
Commission work on Evidence that is cited towards

the bottom of the page is reproduced in the

materials volume 1 at page 1. Again I will not

take you to it but Your Honours wish to note the

cross reference. Your Honours, as we submit at the

bottom of the page, the right is treated as a human

right related to testifying in the International

Covenant on Civil and Political Rights, and that document is at page 319 at the back of the second

Environment 13 8/12/92

blue book. It is a schedule to the Human Rights

and Equal Opportunity Act and the relevant article

of the covenant is at the bottom of page 319, where

it says that:

In the determination of any criminal charge

against him ..... everyone shall be entitled

to -

the following minimum guarantees and full

equality -

(g) Not to be compelled to testify against

himself or to confess guilt.

In the Canadian charter the embodiment of the

traditional privilege has also been interpreted as

relating to testimonial self-incrimination,

obviously by human agents.

BRENNAN J:  Why do you say it protects privacy? Why do you

put that limiting phrase into your argument?

MR MASON:  In one sense it is not very felicitous because it

really is a way of stating the conclusion. Its

operation creates negatively a sphere of privacy by enabling the person to say, "Well, I may or may not

have this information but I am not telling you;

particularly I am not telling you on oath in order

to incriminate myself".

So it is saying, in a sense, that if a

prosecution is brought against a person that person

cannot be the agent through which the court finds

material as to his or her guilt, and although it is

speaking in terms of a method of evidence it

creates a sphere of privacy in that limited way.

BRENNAN J: Is this the argument: that because the privilege

confers the benefit of the kind that you have

described here on natural persons, it is a

privilege which cannot apply to unnatural persons?

MR MASON: Obviously, it is one of a number of strands. The

Court, as we would submit, has a choice in determining whether this privilege should apply to

corporations. It is not bound by precedent, I

mean, by having a choice. In the exercise of that

decision it is relevant to look at the historical

development of the privilege and also the functions which it, historically, has served. The historical

development relates, it appears, to revulsion
against the ex officio oath that was part of the

means of evidence gathering developed by the Star

Chamber Court. So, it commenced as a common law

reaction against the Star Chamber processes.

Environment 14 8/12/92

It is true that there was another strand.

Equity refused to lend its aid by processes of discovery and interrogatories to common informers

who were seeking to recover penalties. Your Honour

Justice Deane discussed this in the REL case, but

this Court in Pyneboard v Trade Practices

Commission, (1982) 152 CLR 328 at 337, in the

judgment of three of the Justices of the Court,

said that, in effect, the equitable revulsion

against lending its aid to common informers was not

so much a separate strand but really an adoption by
equity of the common law principle which had been

adopted, and at 337 point 4:

Accordingly, the construction of s 155 is

to be approached on the footing that the

privilege of refusing to answer questions or

provide information on the ground that the

answers or the information might tend to

expose the party to the imposition of a civil

penalty is (a) not confined in its application

to discovery and interrogatories; (b)

available at common law as well as in equity;

and (c) distinct from, though often associated

in discussion with, the privilege against

exposure.

At about point 3 on that page, after some

historical discussion, Your Honours

Justices Mason, Wilson and Dawson said:

The better view is that equity looked to the

existing model of the common law and applied

the rule which it had established.

So, we would submit that the historical review in

Pyneboard suggests that there is not a separate strand corning through equity; that there is a single strand and in the materials that the

respondent has put forward, there is a lot of

historical material about the common law's attitude

to the ex officio oath as being the historical

source of the privilege.

Of course, the notion that corporations could

be liable for a crime was really one of very late

development in the common law. It was only really

in the 19th century that the courts initially by

looking at criminal libel hesitatingly came to

accept that corporations could be liable for

penalties as such.

Your Honours, at page 2 in the middle of the

page there is a reference to Ms McNicol's recent
work on the Law of Privilege, and I am sorry we did
not reproduce the pages there referred to, but

there is a collection of authorities and articles

Environment 15 8/12/92

referring to the functions and the history of the

privilege in that recent work. Your Honours, as we

point out in paragraph 2, again just drawing on the

Law Reform Commission's summary, one should not

confine oneself to the historical justification,

but the other justifications do not point

immediately to saying that corporations would

qualify. Other justifications for the privilege

have been said to be that they encourage persons to

give evidence. It avoids undue hardship and

perjured testimony and it avoids suspect evidence.

Recently, the House of Lords in the passage in the speech of Lord Templeman that is set out there, the view is expressed that the only justifications

are:

ttfirst that it discourages the ill-treatment

of a suspect and secondly that it discourages

the production of dubious confessions.tt

Your Honours, we submit in paragraph 3 that these

justifications have no application to corporations

being required to produce documents. Corporations cannot give evidence as a witness - and I will not

take Your Honour to those authorities.

At the highest, these considerations would

only applied to interrogatories. It has not been

suggested otherwise than in Canada, as we

understand it, that one can perhaps slice the

privilege so as to set discovery on the one hand,

and interrogatories on the other, but there is, we

submit, a rational basis for doing so in that,

particularly against companies, the documents, in

effect, speak for themselves. One is not requiring

a person to create evidence; one is merely

requiring a person to produce documents that are in

existence that certainly may reveal evidence.

We submit that documents - paragraph 4 - are

significantly different in that they speak for

themselves, which means that they are reliable,

they cannot be ill-treated, like a personal witness, and do not attract the traditional

concerns of the fundamental right. May I take

Your Honour to the three short passages referred to

there: Grant v Downes, 135 CLR 674 at page 686.

This was, of course, in the context of a discussion

about legal professional privilege in the joint

judgment of Justices Stephen, Mason and Murphy. At

the bottom of 685 Your Honours noted that:

In the Birmingham Case Hamilton LJ directed

attention to some of these considerations as

they relate to claims of privilege made by

corporations for their records and

Environment 16 8/12/92

correspondence. From his Lordship's

observations two points of importance emerge:

(1) that the privilege does little, if

anything, to promote full and frank disclosure

or truthfulness; (2) that the day-to-day records of a corporation which come into existence in the ordinary course of its

business may lend themselves to a claim of

privilege if the purposive element of a

submission to a solicitor is too easily

satisfied, thereby excluding effectively the

documents from production and inspection or at

least subjecting the other party to the

disadvantage of surprise when they are used.

To these criticisms others may be added. There is, we should have thought, much to be

said for the view that the existence of the

privilege makes it more difficult for the

opposing party to test the veracity of the

party claiming privilege by removing from the

area of documents available for inspection

documents which may be inconsistent to that

case. To this extent the privilege is an

impediment, not an inducement, to frank

testimony, and it detracts from the fairness

of the trial by denying a party access to
relevant documents or at least subjecting him

to surprise.

These difficulties are magnified in cases

when privilege is claimed by a corporation,

whether it be a statutory authority or a

company, because the corporation conducts its

business through servants, brings into
existence voluminous records and institutes
systematic standing procedures calling for the

preparation of reports and other documents

which may serve a variety of purposes,

included in which is the submission of

documents to a solicitor for the purpose of

obtaining legal advice, or for use in existing

or anticipated litigation.

With the advent of large corporations,

documents necessarily proliferate; the

knowledge of servants of the corporation is,

in legal theory, the knowledge of the

corporation itself but will only become so in

fact when communicated to that corporation.

In Yuill's case, 172 CLR 319 at 326, Your Honour

Justice Brennan was speaking near the top of the

page about oral evidence and the protection

afforded to oral evidence by a provision relating

to legal professional privilege, and Your Honour

said:

Environment 17 8/12/92

The protection accorded to oral evidence by

s299(2)(d) is probably to be explained by the

legislature's unwillingness to compel a person

to furnish out of his own mouth evidence which

might be used against him on a criminal trial

even though the compulsory disclosure of
privileged communications might lead to the
discovery of other admissible evidence. That
consideration does not inhibit the compulsory

production of books which might be used in

evidence, for books are real evidence which

speak for themselves unlike oral evidence

which comes into existence only in response to

an exercise of investigative power.

In the recent House of Lords decision of Istel Ltd

v Tully, (1992) 3 WLR 344 at 349 at the bottom of

the page, in a speech of Lord Templeman:

This is a powerful reason for the existence of the privilege against

self-incrimination in certain circumstances.

Indeed, in my opinion, the privilege can only

be justified on two grounds -

and I read that passage before.

Neither of these considerations applies to the present appeal. It is difficult to see any

reason why in civil proceedings the privilege

against self-incrimination should be

exercisable so as to enable a litigant to

refuse relevant and even vital documents which

are in his possession or power and which speak

for themselves.

Your Honours, the next strand of reasoning which is

summarized by the heading that the absence of the

privilege with respect to corporations is

inherently necessary to enable the due enforcement

of the law is, of course, a proposition that needs to be put in its particular context. It is not

suggested that prosecutions would necessarily fail,

but the submission is that prosecutions against

companies are different in nature, that the essence

of corporate crime is distinguishable from that

with respect to private crime.

The difference applies in a number of areas.

Unlike individual suspects, corporations cannot be

questioned, so at the investigatory stage a high

degree of authority is required before a

representative can make an admission binding on a

corporation. That extract from Professor Fisse's

"Howard's Criminal Law" is at page 118 of the

materials book that we have provided.

Envirorunent 18 8/12/92

The crimes with which corporations are usually

prosecuted involve complex documentary material.

Your Honours, there are three sets of academic

writings that discuss the case below, and we have

reproduced them in volume 1 of the materials book. They are an article by a Mr Ross Ramsay set out at page 25; a case note by Ms Magner at page 19, and an extract from Ms McNicol's book on the "Law of

Privilege" set out at page 183. At pages 34 and 35

of volume 1 of the materials book is an extract

from Mr Ramsay's Law Journal article, and we would

respectfully submit that the proposition is an

appropriate one. At the bottom of page 34 where he

said:

In many cases, the impediments to law

enforcement presented by the privilege become

more marked where the conduct is that of a

corporation. The scope and complexity of

corporate conduct is such that it is often the case that a determination of illegal behaviour

can only be made upon examination of the

documents and records of the relevant

corporation. In addition, unlike conventional

crime which usually has an identifiable

victim, the victim of illegal behaviour by a corporation is often a more amorphous entity

such as a market. This places greater

pressure on law enforcers to obtain evidence

from the corporations themselves.

Your Honours, the distinction between

corporate crime and other criminal offences was

discussed in a recent report to the Federal

Parliament that commences at page 64 of the

materials book. This is a joint statutory

committee on corporations and securities, a body

Australian
that has a role conferred by the reference to the relevant section of the Australian

Securities Act. Your Honours, the committee made

recommendations which have been passed into law

this year, which were addressing two matters, the

derivative use immunity and the question of whether

corporations should qualify for the privilege in

any event. Your Honours, there is a review of the

privilege in its operation under the Companies Code

and Corporations Law in the United Kingdom and the

United States, page 80 and following, and a

reference to various submissions made about the

difficulties created, to prosecutors, it must be

frankly acknowledged, with respect to the use

immunity provisions under the legislation.

Environment 19 8/12/92

The recommendation at page 93, paragraph 4.5,

records that:

It has been argued earlier in this report that

corporate crime is distinctive as a result of

both the legal position of the corporation and the nature of the crime itself. Companies are

artificial legal entities occupying a

privileged position in that all companies are

protected by limited liability and public

companies may seek investment from the public.

They are creations of the Parliament and the

conditions under which they are created and

the rules governing their operations are

determined by the Parliament.

And there is a reference to accountability.

Paragraph 4.8, a statement about the nature of corporate crime and its distinctions from ordinary

crime and the recommendations are at pages 96

and 97.

Your Honours, these recommendations were

enacted by the Corporations Legislation (Evidence)

Amendment Act, which is to be found in volume 2 of the materials book, at page 303. At page 305 there is an amendment to section 68 of the Australian

Securities Commission Act. That, in fact, is set

out at page 107 of the materials book. At page 306

there is an amendment to 597 of the Corporations

Law, and that is set out at page 105 of the

materials book, and at the bottom of 306 there is a

new section 1316A:

In a Corporations Law criminal proceeding, a

body corporate is not entitled to refuse or

fail to comply with a requirement:

(a) To answer a question or give information;

or

(b) to produce a book or any other thing; or

(c) to do any other act whatever;

on the ground that the answer or information,

production of the book or other

thing ..... might tend:

(d) to incriminate the body ..... or

(e) to make the body liable to a penalty.

And "' Corporations Law criminal proceeding'" is

defined. It relates, of course, to company law
offences. It does not purport to be a general

abrogation of the privilege.

Environment 8/12/92

The relevant parliamentary debates are set out

at page 9 of the materials book. That is back in

volume 1, and the key reference is at page 12 in

the second reading speech, where, about half-way

down the left-hand column, reference is made to the

parliamentary joint committee and its

recommendations; and about a third of the way down

the right-hand column on page 12, the statement is

made that:

The removal of the right to claim the

privilege against self-incrimination from bodies corporate in the legislation is to

overcome the uncertainty resulting from the

decision of the High Court of Australia in

Pyneboard Pty Ltd v Trade Practices assumed, but not decided, that the common law

privilege ..... applied to corporations.

Of course, with the exception of Mr Justice Murphy.

And there was an endorsement by the Government of the view of the committee. At page 14 there is a relevant part of the debate where the Opposition

endorsement of that part of the report was also

contained.

Your Honours, I had jumped away from

paragraph 6 of the outline of our submissions on
page 3, dealing with the distinction between

corporate crime and other criminal offences, and we

would invite particular attention to the works of

Professors Fisse and Ashworth that are referred to there and that are reproduced in the materials

books. I will not take the Court through them but

the relevant chapter of Professor Fisse's work

starts at page 118 of the material books, and the

relevant extract from Professor Ashworth's

Principles of Criminal Law is at page 109, and each

of them stressed the difference of corporate crime

with respect to a wide range of factors.

I would specifically refer the Court to the

passage at pages 121 and 122 in Professor Fisse's

work, where he deals with the nature of "corporate

crime", differences with respect to investigation,

with respect to defence of prosecutions and the

notion of "collective blameworthiness" at page 122,

as evidenced by the Mount Erebus disaster and the

crimes involving sinking of ships. The fault may

not be attributable to any one person in the

organization, it is not a vicarious liability, it

is a fault that results in an inappropriate system

brought about by the way the company carries on its

affairs.

Environment 21 8/12/92

Your Honours, the fourth strand of reasoning

which we would invite the Court to apply is that

the notion of incorporation itself is a privilege,

and that imports a limited accountability.	Of
course, one can debate as to how far the

accountability goes, but there are, necessarily,

distinctions between companies and people.

This notion of a privilege conferred by the

State was one of the bases upon which the American

courts developed the principle that the Fifth

Amendment did not apply to corporate bodies.

Now, with respect, we do not wish to press

this too far, and indeed the American Supreme Court

jettisoned this reason when they extended the gap

in the Fifth Amendment coverage beyond corporate

bodies to partnerships and large associations.

Now, in our submission, the line should be drawn

hard and fast between corporate bodies and non-

corporate bodies, and therefore it is appropriate,

we would submit, to have some regard to that

earlier rationale evidenced in the American cases.

The fifth reason we would advance for the

holding which we seek to have the Court make is

that it reduces the prospect of hardship to company

executives and facilitates truthful and accurate

evidence. The privilege is not available for the

protection of others and yet it would seem the

reason, if not the sole reason upon which the

privilege was given to corporations in the first

place in the English cases.

So if a senior officer, if a managing director

can be compelled to give evidence against his or

her corporation, why should not the documents of

the corporation be available for that purpose.

They are likely to be the better evidence for one

thing. Access to that material is also likely to

remove the pressure, what is referred to as the

trilema of pressure put upon the managing director

or other senior executive, to risk contempt, giving

truthful evidence to the prejudice of future

employment prospects, or perjury, so the

Canadian Supreme Court, in the passage that is

referred to near the bottom of page 5 stated the

proposition that:

"If the corporation is compellable at trial

through its officers it is difficult to

rationalize the purpose of conferring on the

corporation a protection on discovery" -

Your Honours, the notion of truth being a

cornerstone of justice, I was reminded last week

there was a passage in Bunning v Cross from, I

Environment 22 8/12/92

think, a judgment of Lord Justice Knight-Bruce, I

will have the reference obtained. Of course it is

always stated that while truth is an important

benefit, it is not the sole function of the

judicial system to preserve. But nevertheless,
here, if truth can be protected without affecting

detrimentally other appropriate legal interests,

then we would submit that the choice should be made

in favour of corporations not having the privilege.

The sixth strand of reasoning at page 6 of the

outline is the submission that business documents

are really analogous to real evidence. It has been

held in a number of decisions, here and elsewhere

and they are collected in paragraph 12 that the

privilege does not apply to real evidence such as

samples of blood, or breath or the like. It is related to testimonial matters. We, of course,

rely upon that in the context of showing that it

really is directed at personal, private rights.

But for present purposes, if it does not apply

to real evidence, are not books and records,

particularly the sort that we are involved with in

a case such as this, directly analogous to real

evidence and they were described as such in some of

those passages that were read earlier. We submit

that this is also reflected in the business

record's provisions of the Evidence Act which, when

first passed, people saw in terms of an exception

to the hearsay rule, but what the provisions really

do is allow the documents to be themselves the

evidence, to speak for themselves, in some cases

with the need to call the maker, but in other cases

without.

We submit that this proposition that documents

of businesses are analogous to real evidence has a

dual consequence and the reasons are set out at the

bottom of page 6.	The Magner case note that is
referred to there is at page 23 of the material

books and the second consequence really relates to

the way, if the privilege is upheld, the principle

should be stated. I will be taking the Court

shortly to the American decision of Braswell

v United States in the United States, where the

testimonial nature of the privilege where

applicable is emphasized.

BRENNAN J:	Mr Solicitor, I do not quite understand this. If you were conducting this prosecution and you had
in your hand a piece of paper which contained what
appeared to be a reading of milligrams per litre of grease and oil taken at half-hourly intervals on the relevant dates, what would you do with it?

Environment 23 8/12/92

MR MASON: This is the document that is at page 60 of the

book? Oh, I am sorry, you are asking, if we got

the documents we are now trying to get.

BRENNAN J: Yes.

MR MASON:  Yes, I am sorry.

BRENNAN J:  You had a piece of paper and it had a list of readings on it, what would you do with it? You

would have to establish its authenticity, would you

not?

MR MASON:  Yes - well, that is if you were going to tender

it to speak for itself, and that would be where the

act of production itself would have a testimonial

consequence, to use the American terminology. It

is by the very answering of the subpoena that you

are saying, these documents I produce are mine or

are from my custody. Where privilege is available,

for example with a private litigant, and that

situation is raised, the prosecutor gives an

indemnity with respect to the testimonial

consequences of production, but gets access to the
documents seeking to prove their authenticity,

dehors the act of production. But, to focus on the

question you have put, if the privilege does not

apply and they are produced in answer to a
subpoena, then it would follow that the act of

production would not only arm the prosecutor with the documents, but provide a means of proving the

authenticity of the documents.

But in addition, access to the documents would be a means whereby if their authenticity could be

established elsewhere by calling a managing

director or some human agent of the corporation,

then the prosecutor could put the documents into

evidence in that way.

BRENNAN J:  Of course, but the point I was seeking to discuss with you is whether it is right to say that

documents speak for themselves.

MR MASON:  The documents do, although their production may

tell you a bit more.

DAWSON J: What would you say, that these are admissions

once you show that they are produced by the

defendant?

MR MASON:  In so far as there is a testimonial - to use

Wigrnore's language - a testimonial aspect of

production, yes. So, I suppose, to that extent, if

their authenticity is in issue they need something

else before they can - if they go in to evidence

they will speak for themselves.

Environment 24 8/12/92

BRENNAN J:  The only relevance of the document is as an

admission on the part of the defendant, is it not?

MR MASON:  Yes, although the admission as to their

authenticity that would flow from production would

be perhaps an extra. They still operate as an

admission if they can be authenticated by some

other means, and will speak for themselves in that

sense. If they get into evidence they will speak

for themselves. How they get into evidence may

well depend upon their authenticity being proved by

oral evidence, by the admission from the act of

answering the subpoena, if that is available, or if

the point is not taken.

DAWSON J:	They may be business records as well.
MR MASON:	Or they may be business records as well.
McHUGH J:	Mr Solicitor, if you had sent a sergeant of police into the premises with a search warrant and
he got hold of these books and taken them away, you would have had to prove the books. But have any of
the cases ever sought to explain why you can seize
documents such as these under a search warrant but
you cannot be required to produce them under a subpoena duces tecum, or a statutory authority to
produce them?
MR MASON:	I am not aware directly. There has been some

of a charge puts to an end an otherwise apparently available administrative seizure provision. Not a search warrant one but in the English case of the	recent discussion as to whether the mere bringing about whether the mere charge puts an end to the
administrative function. But I am not aware of any
explanation for the distinction. Of course, the
privilege against self-incrimination goes a lot
further than arming the defendant with an answer to a subpoena issued in the course of a criminal
trial.

McHUGH J:  I know. But it always seemed to me strange that

police executing a search warrant could seize

documents and yet a subpoena duces tecum issued by,

say, the supreme court, could be met with the

answer that "I do not have to produce the

document".

MR MASON:  I am not sure. Perhaps I will try and find

whether there are cases that look at whether there

is any bar on a search warrant after a charge has

been laid. I do not think there is.

McHUGH J: In practice, I do not think there is.

Environment 25 8/12/92

MR MASON:  Your Honours, the seventh strand is at page 7

which is the material I have taken you to about the

recent statutory abrogation of the privilege,
albeit in a particular context, although one of

some significance relating to corporate crime

itself and a clear adoption by the Federal

Parliament of the principle that within that area there should be no self-incrimination for corporations because they are different.

DEANE J:  How does that work in the most common type of

company case, that is, the very small private

company. Can the managing director say, "I am the

only person with that information and if I answer

the questions I will incriminate myself"?

MR MASON: This is if a subpoena is addressed to the company

by its proper officer?

DEANE J: Yes, and the only person who could answer and

provide the information is X, the managing

director, a sole shareholder. Can he say, "If I

provide that I am not only going to incriminate the

company, I am going to incriminate myself and

therefore the company will not provide it"?

MR MASON:  Yes, that is the very issue discussed in

Braswell's case to which I will take Your Honour.

DEANE J:	Come to it in your own time.
MR MASON:	The American law at least has developed a notion

that a neutral proper officer will be permitted by

the court. The corporation must produce the record

and the prosecutor cannot insist upon a proper

officer who would incriminate himself. But the

other point - - -

DEANE J:  What I had in mind was the Commonwealth Act that

you have referred us to - how does that apply in

the case of the single man company where, as is

normally the case, incrimination of the company

will also involve incrimination of himself?

MR MASON:  I think the answer must be that the documents,

when available, can then be used, obviously unless there is an abuse of process in the subpoena. But

that is the same, with respect, with any subpoena

situation. You can call almost your nearest and

dearest to give evidence against you; you may

subpoena a third party to produce your

incriminating documents - - -

DEANE J: Yes, but we are dealing with pending criminal

proceedings.

Environment 26 8/12/92

MR MASON: Well, the question of whether they are pending or

not may bear possibly in a particular case upon the fairness of the issue of the process, although I do

not concede that, but - - -

DEANE J: But we are dealing with production of

incriminating material.

MR MASON:  As such, the mere fact that there is - you are

asking me to assume there might be pending

proceedings against the managing director and the

company?

DEANE J: Well, not necessarily. Just go back to the

provision of incriminating information. As I say,

I have got the Commonwealth Act in mind, and I was

just asking you how you say that would work in the

case of the one man company where the company is

required to respond but the only person who can respond would incriminate himself by responding.

MR MASON:  Well, if one can perhaps test it by assuming that

the company and its managing director are jointly

charged with some corporations offence and a

subpoena issued to the company -

DEANE J: Take it back before any charge.

MR MASON:  My submission is that in answering that subpoena,

even if it was answered by the managing director,

he or she would not be making a testimonial

admission about the documents because the only

agency that that person would have would be as

proper officer for the company and, if the company

does not have the privilege, which we now know

because of federal law, in that context, then the

documents would be available - it could not be

resisted if they are in the possession or custody

of the company and I suppose the question would

then be: what if the prosecutor sought to tender

them against both defendants?	I think I would have
to say that, as a matter of general principle, that

would be open; whether it could be controlled in a

particular case I do not know.

DAWSON J:  You do not restrict your submissions to

documentary evidence, do you?

MR MASON:	I do, Your Honour.
DAWSON J:	Why?
MR MASON:	It may be that my submissions will support, if

they do, a broader proposition, but one can draw a

distinction between producing documentary material

which is in existence and, for example, answering

interrogatories. In the Triplex case, which in

Environment 27 8/12/92

effect started it all for English law, it was an

interrogatory case. Canadian cases have

subsequently said that there is, in principle, a

distinction between interrogatories and discovery

and that documents are like - - -

DAWSON J:	What is the distinction?
MR MASON:	Well, that the documents are real evidence. In a

corporate situation documents can serve a dual

purpose, but one purpose they can serve is actually

showing the transactions within the corporate

structure.

DAWSON J:  Much the same reasoning would apply to

non-artificial persons, would it not?

MR MASON:  Yes, that may be right.

DAWSON J: And yet, existing law is clearly that a person

cannot be compelled to incriminate himself either

by producing a document or testimonial himself.

MR MASON:  I would argue that if - - -

DAWSON J: Is that the law?

MR MASON:  Yes, but if the law is properly understood as

relating to the testimonial consequences of

production, then an individual, upon being granted

an immunity from that consequence, could be

required to produce the documents. That certainly
is the American law, where the Fifth Amendment
applies definitely to individuals but,
nevertheless, because of the analysis about the
testimonial consequences, they can be required to
produce the documents, assuming the prosecution,

when they have them, can then authenticate them or

make use of them by some other means.

Your Honours, at page 8 and following, we seek

to address the arguments that are advanced in the

cases and in our learned friend's submissions as to

why the privilege should extend to corporations.

At page 11 of the Caltex's written submissions they

produced. It was the officer who was resisting.

So they are two of the early cases which later

on are regarded as being a long stream of

persuasive, indeed even illustrious, I think,

authority to justify what is now an abolition of

the privilege for partners, for trustees, for

one-man companies. So Your Honours would need to

look very cautiously, we would suggest, at the

American cases before adopting my friend's

submission that they are any proper basis for a

similar conclusion in this country.

And if I may say so, with all respect to

His Honour Mr Justice Murphy in the past of this

Court, in none of the cases in which His Honour

embraced the American theory did he analyse in any

way any of these cases. Perhaps he did, but it

does not appear in his judgments. And the two

lines, indeed only a line and a half by

Lord Denning, which is referred to in our paper,

Environment 89 8/12/92

when having a year or two before embraced the

principle with everybody else that corporations had

as much rights as individuals, then said

corporations have no rights of immunity in the

United States and they have none in this country.

But there is not so much as a scratch of a pen as

appears from the reports to suggest that

Lord Denning ever read, let alone analysed, the US cases.

So we would submit that the submission made by

my friend is a dangerous one. He recoils, of

course, and rightly so, from embracing the whole of

the American development because he asked

Your Honours to adopt part of it but not the whole of it, to adopt the origins of it, but to eschew the inevitable consequences.

And maybe he will persuade Your Honours to

adopt that course, but we would press upon

Your Honours that even that is a danger that my

friend is suggesting we should risk, because who is

to know what lower courts will do with a judgment

that adopts my friend's submission 15, 20 or 30

years from now. It might develop, .just as it has

in America, into what we would suggest is something

which can only be described as somewhat grotesque.

The other extraordinary thing about

Hale v Henkel is that while denying Fifth Amendment

privilege to corporations, the judges in that court

enthusiastically pressed Fourth Amendment privilege

upon the corporation; that is an immunity from

search and seizure, and they said, in order to show
the reason behind that, that they did that because

corporations were a mere conglomeration of

individuals and had those rights, and as we have

said in our note, there is no way, we would

suggest, in which you can find a rational basis for

the distinction drawn between the Fifth and Fourth

Amendment in Hale v Henkel; they simply cannot

stand together.

And indeed, Mr Justice Harlan, who was one of the judges in Hale v Henkel, a few years earlier

when he was in the circuit court for the District

of California, I think, had with all the judges

said that the Fourteenth Amendment applies to

corporations and that amendment prohibits the

States absolutely abrogating any of the common law

Environment 90 8/12/92

privileges or immunities of citizens. And yet he

felt able, when he was on the supreme court, to

decide Hale v Henkel as he did.

MASON CJ:  We will adjourn and resume at 10.15 am tomorrow.

AT 4.13 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 9 DECEMBER 1992

Environment 91 8/12/92