Frugtniet and Migration Agents Registration Authority (Migration)
[2015] AATA 554
•30 July 2015
Frugtniet and Migration Agents Registration Authority [2015] AATA 554 (30 July 2015)
Division GENERAL DIVISION
File Number 2014/5940
Re RUDY FRUGTNIET
APPLICANT
And MIGRATION AGENTS REGISTRATION AUTHORITY
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 30 July 2015
Place Melbourne
The Tribunal has decided:
1.On or before 11 September 2015, the applicant must give to the Tribunal and the respondent:
(a)any witness statement from any witnesses proposed to be called at the hearing;
(b)all reports, records and any other documents on which the applicant intends to rely at the hearing; and
(c) a Statement of Facts, Issues and Contentions; and
2.On or before 9 October 2015, the respondent must give to the Tribunal and the applicant:
(a)any witness statement from any witnesses proposed to be called at the hearing;
(b)all reports, records and any other documents on which the respondent intends to rely at the hearing; and
(c) a Statement of Facts, Issues and Contentions.
…[sgd] S A Forgie…….
Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – applicant’s objection to lodging statement of facts and contentions and evidentiary material before respondent – claim of penalty privilege – whether privilege extends to administrative proceedings – procedural rule confined to judicial proceedings – no statutory provision to contrary – consideration of material gathered by respondent using its investigative powers and otherwise and lodged as obliged to do – role of Tribunal – opportunity for each party to present its case – applicant to lodge Statement of Facts, Issues and Contentions and evidentiary material before respondent
LEGAL PRINCIPLES - penalty privilege - privilege against self-incrimination – corporations and individuals distinguished
LEGISLATION
Administrative Appeals Tribunal Act 1975; sections 18B, 33, 36, 36B, 37, 39
Corporations Act 2001; sections 180, 181, 183, 206A, 206F, 206G, 1317E, 1317G, 1043A
Crimes Act 1958 (Vic); sections 81, 82 and 191
Criminal Code Act 1995; section 137.1
Customs Act 1901; sections 254, 255
Evidence Act 2008 (Vic); section 187
Freedom of Information Act 1982
Migration Act 1958; sections 280, 286, 288, 288A, 289, 292, 295, 299, 300, 302, 303, 308, 309, 310, 311, 314
CASES
Australian Securities and Investments Commission v Plymin [2002] VSC 56; (2002) 4 VR 168
Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32
Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499; 140 ALR 681; 135 FLR 100
Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 43 ACSR 189; 77 ALJR 40
Environment Protection Authority v Caltex Refining Co Pty Ltd [1993] HCA 74; (1993) 178 CLR 477; 118 ALR 392; 82 LGERA 51Frugtniet v Australian Securities and Investments Commission VID177/2015
Frugtniet v Tax Practitioners Board VID707/2014
Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 196; 302 ALR 363; 87 ALJR 1082
Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority [2004] AATA 704; (2004) 82 ALD 163
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179; (1979) 2 ALD 634Re Frugtniet and Australian Securities Investments Commission [2015] AATA 128
Re Frugtniet and Tax Practitioners Board [2014] AATA 766
Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129; 209 ALR 271
Towie v Medical Practitioners Board of Victoria [2008] VSCA 157
Trade Practices Commission v Abbco Iceworks Pty Ltd [1994] FCA 1279; (1994) 52 FCR 96; 123 ALR 503REASONS FOR DECISION
Mr Rudy Frugtniet was first registered as a migration agent on 28 October 1986 under the Migration Act 1958 (Migration Act). Each year, the Migration Agents Registration Authority (MARA) renewed his registration on his application.[1] The period of Mr Frugtniet’s most recent registration was due to expire on 7 November 2014. On 6 November 2014, MARA cancelled Mr Frugtniet’s registration as a migration agent. It did so under s 303(1)(a) of the Migration Act on the basis it was satisfied of the matters specified in ss 303(1)(d), (f) and (h). Section 292 provides that an applicant, whose registration has been cancelled, must not be registered within five years of the cancellation.
[1] Mr Frugntiet’s application for renewal dated 6 November 2013 was taken to have been granted under s 300(5) of the Migration Act when MARA had neither made a decision on his application for renewal nor cancelled or suspended his registration within ten months beginning on the day after it expired.
Mr Frugtniet has applied to the Tribunal for review of MARA’s decision. On 14 January 2015, one of the Tribunal’s Conference Registrars issued directions to the parties. In so far as they related to Mr Frugtniet, paragraph 1 directed:
“On or before 31st March, 2015, the Applicant must give to the Tribunal and the Respondent:
(a)any witness statement from any witnesses proposed to be called at the hearing;
(b)all reports, records and any other documents on which the Applicant intends to rely at the hearing;
(c)a Statement of Facts, Issues and Contentions.”
The second paragraph of the directions required the same of MARA but by the later date of 24 April 2015.
Mr Frugtniet asked for further time within which to comply with the directions as he was pursuing a request he had made to the then Department of Immigration and Border Protection (DIBP) under the Freedom of Information Act 1982 (FOI Act) and awaiting outcomes of the appeals he had lodged against the decisions of differently constituted Tribunals but relevant to the issues to be decided in this case.[2] I listed the matter for a directions hearing on 4 June 2015 to gather further details. At that directions hearing, Mr Frugtniet indicated that he objected to providing a statement of his own evidence or statements of any other witnesses he might wish to call. The basis of his objection was that he might be prejudiced were he required to do so. In making his objection, he relied on the penalty privilege.
[2] Re Frugtniet and Tax Practitioners Board [2014] AATA 766; Senior Member Fice; affirmation of decision to cancel registration as a tax agent. The Federal Court appeal (Frugtniet v Tax Practitioners Board VID707/2014) was heard and judgment reserved by Jessup J on 25 May 2014. Re Frugtniet and Australian Securities and Investments Commission [2015] AATA 128; Senior Member Friedman; affirmation of a banning order. The Federal Court appeal (Frugtniet v Australian Securities and Investments Commission VID177/2015) is before Bromberg J and has not yet been scheduled for hearing.
I gave Mr Frugtniet an opportunity to develop his objection in writing and he did so later the same day. MARA declined to make any submissions in response. I have decided that Mr Frugtniet is, subject only to a variation in the dates to reflect the passage of time, required to comply with the directions issued by the Conference Registrar.
MR FRUGTNIET’S SUBMISSIONS
Mr Frugtniet submitted that the penalty privilege extends to disciplinary proceedings i.e. proceedings in which a disqualification, banning order or licence suspension or cancellation, however described, are sanctions that may be imposed. Therefore, the usual order made in the Tribunal that an applicant for review lodge witness statements and give them to the other party or parties is inappropriate. Mr Frugtniet relied on the cases of Australian Securities and Investments Commission v Plymin[3] (Plymin) and Australian Securities and Investments Commission v Mining Projects Group Ltd[4] (Mining Projects Group) as well as the cases to which they referred. He referred to the case of Rich v Australian Securities and Investments Commission,[5] (Rich) which, he submitted, “… espoused the potential impact upon disqualification orders, banning orders and oral examination being proceedings that expose a person to penalty which would provide for the penalty privilege being applied.”
[3] [2002] VSC 56; (2002) 4 VR 168; Mandie J
[4] [2007] FCA 1620; (2007) 164 FCR 32; Finkelstein J
[5] [2004] HCA 42; (2004) 220 CLR 129; 209 ALR 271; Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; Kirby J dissenting
Mr Frugtniet particularly relied on a judgment of the Victorian Court of Appeal in Towie v Medical Practitioners Board of Victoria[6] (Towie) and, in particular, the following passage:
“… But it will not ordinarily be appropriate that directions be given which require the applicant for review to provide an outline of argument, or any other written material, which contains a positive assertion or denial of facts or requires an election by the applicant as to whether he or she intends to go into evidence or requires any proposed evidence the applicant intends to call to be the subject of a witness statement which must be produced and served on the other side, before the case advanced against the applicant has been completed.”[7]
[6] [2008] VSCA 157; Redlich and Weinberg JJA and Mandie AJA; Judgment delivered by Mandie J
[7] [2008] VSCA 157 at [9]
LEGISLATIVE FRAMEWORK
Part 3 of the Migration Act regulates migration agents and immigration assistance. In general terms, a person who is not a registered migration agent must not give immigration assistance.[8] Individuals may be registered as migration agents in accordance with Part 3.[9] An individual may apply to MARA to be registered as a migration agent by following the procedures set out in ss 288 and 288A. Sections 289 to 295 set out the circumstances in which MARA must, and must not, register an individual as a migration agent. Generally, registration continues for 12 months after registration[10] and the migration agent must apply for renewal before it expires.[11] Provision is made in s 302 for automatic deregistration if a migration agent asks MARA to remove his or her name from the Register of Migration Agents or if he or she dies.
[8] Migration Act; s 280(1)
[9] Migration Act; s 286
[10] Migration Act; s 299
[11] Migration Act; s 300(1)
Provision is also made for MARA to cancel or suspend a migration agent’s registration or to caution him or her in the circumstances set out in s 303(1).[12] They occur:
[12] Migration Act; s 303(1)(a), (b) and (c)
“if it becomes satisfied that:
(d)the agent’s application for registration was known by the agent to be false or misleading in a material particular; or
(e)the agent becomes bankrupt; or
(f)the agent is not a person of integrity or is otherwise not a fit and proper person to give immigration assistance; or
(g)an individual related by employment to the agent is not a person of integrity; or
(h)the agent has not complied with the Code of Conduct prescribed under section 314.
Note:The Authority is required to caution a registered migration agent or cancel or suspend a registered migration agent’s registration in certain circumstances: see Division 3AA.
Note 2:If the Authority is considering making a decision under this section, it must invite the registered migration agent to make a submission: see sections 309 and 310.”[13]
[13] Migration Act; s 303(1)
Section 314(1) of the Migration Act provides that the regulations may prescribe a Code of Conduct for migration agents. That is the Code of Conduct to which reference is made in s 303(1)(h). Section 314(2) provides that “A registered migration agent must conduct himself or herself in accordance with the prescribed Code of Conduct.”
Section 308 gives MARA power to require a registered migration agent:
“(a) to make a statutory declaration in answer to questions in writing by the Authority; or
(b)to appear before an individual or individuals specified by the Authority and to answer questions; or
(c)to provide the Authority with specified documents or records relevant to the agent’s continued registration.”
A registered migration agent is not excused from complying with MARA’s requirements on the ground that the information or the provision of the document might tend to incriminate him or her.[14] The consequences of that are modified by s 308(4):
“However:
(a)any information or document provided in response to a requirement under subsection (1); and
(b)any information or thing (including any document) obtained as a direct or indirect result of information or a document provided in response to a requirement under subsection (1);
is not admissible in evidence against the registered migration agent in any criminal proceedings (except proceedings for an offence against section 137.1 or 137.2 of the Criminal Code that relates to this Act or the regulations).”[15]
[14] Migration Act; s 308(3)
[15] Sections 137.1 of the Criminal Code Act 1995 (Criminal Code) provides that a person is guilty of an offence if, in general terms, he or she provides information to a Commonwealth entity, to a person exercising powers or performing functions under or in connection with a law of the Commonwealth or in compliance, or purported compliance with such a law of the Commonwealth knowing that it is false or misleading. A similar offence is provided for under s 137.2 in relation to the provision of documents that are false or misleading. In either case, no offence will have been committed if the information or document is not false in a material particular: Criminal Code; ss 137.1(2) and (3) and 137.2(2).
Before cancelling a registered migration agent’s registration, MARA must follow the procedure in s 309(2) to inform him or her that it is considering making such a decision and the reasons for it and to invite him or her to make a submission on the matter. The reference to a “submission” is a reference to a statutory declaration or a written argument.[16] If MARA issues an invitation under s 309 but does not receive a submission, it may decide the matter on the information before it.[17] When it has received a submission, MARA may either decide the matter or first give the registered migration agent an opportunity to appear before it before deciding the matter.[18]
[16] Migration Act; s 309(3)
[17] Migration Act; s 310(2)
[18] Migration Act; s 310(3)
Finally, I note that s 311 provides that:
“The Migration Agents Registration Authority, in considering a registration application or a possible disciplinary action under section 303:
(a)is not bound by technicalities, legal forms or rules of evidence; and
(b)must act according to substantial justice and the merits of the case.”
CONSIDERATION
I note that, before making its decision, MARA informed Mr Frugtniet that it was considering cancellation of his registration as it was required to do under s 309.[19] Mr Frugtniet responded to its invitation under s 309 to make submissions.[20] His response was in addition to, he said, the submissions he had made on 10 January 2014 in response to a request made on 13 December 2013 by MARA under s 308 for certain information.[21] That information had related to proceedings in the Tribunal reviewing a decision by the Tax Practitioners Board on 16 January 2013 to cancel his registration as a tax practitioner. Mr Frugtniet had responded to the request on 10 January 2014.[22] Later, MARA required Mr Frugtniet to give it his client file for each of the clients it listed in an Attachment to its letter dated 5 September 2014.[23] The clients were described as clients he had assisted to lodge a visa application requiring a skills assessment. MARA required Mr Frugtniet to include in each file a copy of the relevant skills assessment application and any work references submitted in support of the application. Various correspondence ensued between Mr Frugtniet and MARA regarding its request under s 308.[24]
[19] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act) (T documents); T20 at 325
[20] T documents; T21 at 328-335
[21] T documents; T16 at 229-230
[22] T documents; T17 at 231-237
[23] T documents; T20 at 325-327
[24] T documents; T22 and T23 at 336-346
In Attachment A to these reasons, I have summarised the cases to which Mr Frugtniet referred at some length in order to reveal the context in which the principles he has relied upon were formulated. It is seen from their context that, apart from Towie, each is concerned with proceedings in a court in which a regulatory body seeks the imposition of a penalty upon the defendant or defendants. They are not concerned with the imposition of a penalty in administrative proceedings such as those in this Tribunal. It is important, therefore, to look carefully at the principles that have been established in relation to civil penalty provisions, disqualification decisions, penalty privilege and the privilege against self-incrimination before considering the application of those principles to the present case.
Disqualification decisions
Decisions of the sort that MARA may make under s 303 may be described as “disqualification decisions” or “disqualification orders”. That was the description adopted in the majority judgment of the High Court in Rich in considering a disqualification order made under s 206A(2) of the Corporations Act 2001 (Corporations Act). The consequence of such an order was that, unless given permission under ss 206F(5) or 206G, the person against whom it was made ceased to be a director, alternate director or secretary of a company. It would be an order that would protect the public but it would also penalise the person against whom it was made. To say that it had both those characters does not deny that it carried both of those characters, the majority said.[25] The person not only forfeited the relevant office but was forbidden from holding such an office for the duration of the disqualification. Their Honours said:
“… Those consequences, whether taken separately or in combination, when inflicted on account of a defendant’s wrongdoing, are penalties. That the penalty is not exacted in the form of a money payment does not deny that conclusion. As the authorities referred to earlier in these reasons reveal, equity’s concern with penalties was never confined to pecuniary penalties. If exposure to loss of office or exposure to dismissal from a police force … is exposure to penalty, exposure to a disqualification order is exposure to a penalty.”[26]
[25] [2004] HCA 42; (2004) 220 CLR 129; (2004) 209 ALR 271 at [35]; 146; 282
[26] [2004] HCA 42; (2004) 220 CLR 129; (2004) 209 ALR 271 at [37]; 147; 282
An order of MARA cancelling or suspending a registered migration agent’s registration under the Migration Act is in no different position. It is the imposition of a penalty even though a purpose of its imposition would have been to protect the public.
Penalty privilege and privilege against self-incrimination
A concise summary of the foundations of the two privileges is found in the judgment of Nettle J in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd[27] (CFMEU). He noted that it is a fundamental principle of the criminal justice system that the onus of proof beyond reasonable doubt rests on the Crown. Its companion rule is that an accused cannot be required to assist in proof of the offence charged. They are conceived, his Honour said, as expressions of the basic accusatorial nature of the criminal justice system.[28]
[27] [2015] HCA 21; French CJ, Kiefel, Bell, Gageler, Keane and Nettle JJ
[28] [2015] HCA 21 at [61]
In the course of reaching that conclusion in CFMEU, Nettle J referred to the historical foundations of the penalty privilege and the privilege against self-incrimination. Citing the observations of Mason CJ and Toohey J in Environment Protection Authority v Caltex Refining Co Pty Ltd[29] (Caltex), his Honour observed that:
“… they are grounded in the 17th century reaction to the excesses of the ecclesiastical courts and Star Chamber and embody the notion that the liberty of the individual will be weakened if the power exists to compel a suspected person to confess to his or her guilt … In essence, they represent a balance struck between the power of the state to prosecute an individual for an offence and the position of the individual who stands charged …”[30]
[29] [1993] HCA 74; (1993) 178 CLR 477; 118 ALR 392; 82 LGERA 51; Mason CJ, Brennan, Toohey and McHugh JJ; Deane, Dawson and Gaudron JJ dissenting at 496-498; 403-404; 61-62
[30] [2015] HCA 21 at [62] (citations omitted)
A. Privilege against self-incrimination
The privilege against self-incrimination is a personal right applying in all courts, tribunals and enquiries[31] and in all proceedings whether civil or criminal.[32] As Kiefel J said in Lee v New South Wales Crime Commission (Lee):
“… Although supporting the fundamental principle and the system of criminal justice, it is a basic and substantive common law right of the person … It is the privilege of any witness in any proceedings to refuse to answer an incriminating question. It must be claimed by the witness when the question is first put to him or her whilst in the witness box. The privilege attaches to the answer which is sought. Because it is a privilege of the person, it may be waived. It has been said that, generally speaking, the privilege may be abridged by statute …”[33]
[31] Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 196; 302 ALR 363;87 ALJR 1082; French CJ, Crennan, Gageler and Keane JJ; Kiefel and Bell JJ dissenting at [182]; 268 per Kiefel J
[32] [2013] HCA 39; (2013) 251 CLR 196; 302 ALR 363 at [184]; 268; 418-419; 1127 per Kiefel J
[33] [2013] HCA 39; (2013) 251 CLR 196; 302 ALR 363 at [184]; 268; 419; 1128
The balance between the power of the state to prosecute a corporation for an offence and the position of the corporation charged do not lead to the same outcome. In so far as civil proceedings against a corporation are concerned:
“… Civil proceedings directed against corporations ought not to be conceived of as so much trenching on the liberty of the subject that they call for the untrammelled application of the fundamental principle and the companion rule. …”[34]
The balance between the interests of a corporation and the administration of justice would be inappropriately weighted in favour of the corporation were it able to claim privilege against self-incrimination. As Mason CJ and Toohey J said in Caltex, “… In general, a corporation is usually in a stronger position vis-à-vis the state than is the individual …”.[35] From a practical point of view:
“… the availability of the privilege to corporations has a disproportionate and adverse impact in restricting the documentary evidence which may be produced to the court in a prosecution of a corporation for a criminal offence. In the case of corporations, their books and documents constitute the best evidence of their business transactions and activities. It makes no sense at all to make the privilege available to a corporation in respect of those books and documents when officers of the corporation are bound to testify against the corporation unless they are able to claim the privilege personally. Oral evidence given by an officer of a corporation is that of the witness, not that of the corporation …”[36]
[34] CFMEU [2015] HCA 21 at [69]
[35] [1993] HCA 74; (1993) 178 CLR 477; 118 ALR 392; 82 LGERA 51 at 500; 406; 64
[36] [1993] HCA 74; (1993) 178 CLR 477; 118 ALR 392; 82 LGERA 51 at 504; 409; 66 per Mason CJ and Toohey J (citation omitted)
B.Penalty privilege
The “… privilege against exposure to penalties …”, the High Court said in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission[37] (Daniels), “… serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it. …” It is a procedural rule that applies to require the plaintiff to prove his case without any assistance from the defendant.[38]
[37] [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 43 ACSR 189; 77 ALJR 40 at [31]; 559; 570; 198; 47; Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ (citation omitted)
[38] Mining Projects Group [2007] FCA 1620 at [7] citing Daniels [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 43 ACSR 189; 77 ALJR 40 at [31]; 559; 570; 198; 47
Unlike the privilege against self-incrimination, though, it is not a substantive rule of law. That means that it does not apply to proceedings other than those conducted by a court. As the High Court said in Daniels:
“… [T]here seems little, if any, reason why that privilege should be recognised outside judicial proceedings. Certainly, no decision of this court says it should be so recognised, much less that it is a substantive rule of law. Further, it should now be accepted that, as the privilege against self-incrimination is not available to corporations, … the privilege against exposure to penalties is, similarly, not available to them. …”[39]
[39] [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 43 ACSR 189; 77 ALJR 40 at [31]; 559; 570; 198; 47 (citations omitted) and see also Rich [2004] HCA 42; (2004) 220 CLR 129; (2004) 209 ALR 271 at [24]; 142; 278-279 per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ
The principles and the authorities cited by Mr Frugtniet
Both the Mining Projects Group case and Plymin are cases in which ASIC has instituted proceedings in a court seeking declarations of contravention and orders imposing a penalty or penalties on the respondents. Plymin was decided before the High Court delivered its judgment in Daniels. Its reasoning is inconsistent with that in Daniels and cannot stand now that the High Court has expressly stated a contrary position. Finkelstein J decided that Mining Projects Group case after Daniels. That is among the cases to which his Honour referred and I respectfully suggest that his judgment is consistent with the principles stated in Daniels.
That brings me to the Court of Appeal’s judgment in Towie. It did not decide the issues before it on the basis of the application or otherwise of the penalty privilege but on its interpretation of the order made in VCAT. Its observations regarding the application of the penalty privilege were not relevant to the basis on which it decided the case and were obiter dicta. Despite that, the comments of the Court of Appeal would normally be persuasive but I respectfully suggest that they are not in this case. They are not for two reasons. First, they are based on the principles stated in Plymin without any reference to the intervening judgments of the High Court in Daniels and Rich. In particular, the Court of Appeal made no reference to the principles stated in Daniels that the penalty privilege is not a substantive law but a procedural rule that has no application in any proceedings other than judicial proceedings. It made no reference to the fact that the proceedings in VCAT were proceedings in an administrative tribunal.
My second reason is based on the Court of Appeal’s reliance on the judgment of Finkelstein J in the Mining Projects Group case. As the Court of Appeal noted, Finkelstein J observed that, in the case before him, the penalty privilege would operate to prevent an order being made for the provision of witness statements. The respondent should not be required to plead a positive case until the plaintiff’s case was concluded. What the Court of Appeal did not note was that it was concerned with the application of the penalty privilege in proceedings in an administrative tribunal and not its application in proceedings in a court.
Application of the principles to the Tribunal
I am bound by the principles established by the High Court in Daniels and subsequently repeated in Rich. Therefore, unless Parliament has provided to the contrary, the penalty privilege will not apply to proceedings in the Tribunal as they are administrative, and not judicial, proceedings. When I look at the Migration Act, it seems to me that Parliament has not provided to the contrary.
Nothing in Part 3 of the Migration Act alters the essential role of the Tribunal in reviewing any decision in any jurisdiction. That role was explained by a former President of the Tribunal, Brennan J, in 1979 and his explanation remains equally applicable today. His Honour gave that explanation in Re Drake and Minister for Immigration and Ethnic Affairs(No 2)[40] (Drake) when reviewing a decision made in the exercise of discretionary powers given to the Minister under ss 12 and 13 of the Migration Act to order a person’s deportation in certain circumstances. Referring to earlier proceedings heard by the Full Court of the Federal Court involving the same applicant, Brennan J noted:
“ The Tribunal’s function, when it undertakes a review of a Minister’s decision to deport, is to form its own judgment of what is the correct or preferable decision in the circumstances of the particular case as revealed in the material before the Tribunal (Drake’s case, supra, [(1979) 2 ALD 60; 24 ALR 577] at 589). …”[41]
As I explained in Re De Brett Investments Pty Ltd and Australian Fisheries Management Authority:[42]
“… The Tribunal may conclude that there is only one decision that is correct on the facts it has found on the evidence and according to the law that it must apply. It then makes its decision accordingly. In other circumstances, it may conclude that more than one decision may correctly be made. If that is so, the role of the Tribunal is to determine which decision is the preferable decision and so the correct and preferable decision.”[43]
[40] [1979] AATA 179; (1979) 2 ALD 634
[41] [1979] AATA 179; (1979) 2 ALD 634 at 636
[42] [2004] AATA 704; (2004) 82 ALD 163
[43] [2004] AATA 704; (2004) 82 ALD 163 at [121]; 194
The Tribunal’s role means that, unless Parliament has provided to the contrary, neither the person whose application or request led to the decision’s being made and nor the decision-maker is bound by the grounds on which the decision was sought or made. The Tribunal is not bound to decide the case on one or other of the grounds put forward by the parties for its duty is to reach the correct or preferable decision. Again subject to any legislative provision to the contrary and, in rare instances, the circumstances of a particular case, the Tribunal proceeds on the basis that it will not decide any application by stealth or entrapment. All parties are, subject only to exceptions not relevant in this case, required to put their whole case, including all of their written evidentiary material and at least an outline of any oral evidence and legal arguments on the table before an application is heard on its merits.
The powers given to MARA to require migration agents to give information and giving them an opportunity to make submissions assist in ensuring that, not only MARA, but also the Tribunal have as much information as possible regarding the issues they must decide. Parliament has increased the scope of the information that would normally be available because it has expressly provided that a registered migration agent is not excused from giving information or providing a document by claiming the privilege against self-incrimination. While s 308(4) ensures that a registered migration agent has the practical protection that the privilege would provide in so far as criminal proceedings are concerned, its effect is that he or she does not have that protection in so far as MARA’s powers to gather information under s 308 are concerned. It also follows that MARA is entitled to rely on that information in coming to its decision under Division 4 of Part 3 of the Migration Act. As MARA is, in the absence of any direction to the contrary given by the President under s 18B of the AAT Act, obliged under s 37(1) of that Act to give the Tribunal a copy of every document that is in its possession or under its control that is relevant to the review of the decision, it follows that the Tribunal will have access to that information.
When regard is had to the role of the Tribunal and to the particular provisions of the Migration Act relating to MARA’s powers regarding the continuing registration of a migration agent, it follows that there is nothing in the scheme of decision-making and review that suggests that Parliament had in mind to set aside the principles established by the High Court in Daniels and Rich. Therefore, the penalty privilege has no place in these proceedings and Mr Frugtniet may not rely on it to refuse to answer questions or provide information whether in oral, documentary or other form.
The order in which the parties should be required to lodge statements etc.
My conclusion regarding the inapplicability of the penalty privilege in these proceedings is only one aspect of my consideration of the question whether Mr Frugtniet should be required to lodge any witness statements and material on which he wishes to rely and his Statement of Facts, Issues and Contentions before MARA does so. The other aspect lies in the AAT Act. Section 33(1)(a) of the AAT Act provides that “the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal”. In setting that procedure, consideration has to be given to s 39(1). Subject to certain qualifications that do not apply in this case:[44]
“… the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents.”
[44] Two qualifications are found in ss 36 and 36B which apply when the Attorney-General or a State Attorney-General has issued a public interest certificate that disclosure of information concerning a specified matter or the disclosure of any matter contained in a document would be contrary to the public interest. There is no such certificate in this case. A third qualification arises if a confidentiality order has been made under s 35 of the AAT Act. None has been made in this case. As the case is heard in the Tribunal’s General Division, the qualifications provided for in s 39(2) do not apply.
In this case, MARA has lodged the T documents as required by s 37 of the AAT Act. That provision requires it to lodge not only a statement of reasons but a copy of every other document, or part of a document, that is in its possession or under its control and relevant to the Tribunal’s review of the decision. The T documents lodged by MARA contain, excluding attachments, a 25 page statement of reasons together with evidentiary material. That evidentiary material includes Mr Frugtniet’s own statements and the documentary evidence he gave to MARA as well as other documents that MARA has gathered. In gathering that information, MARA has used its powers under s 308 of the Migration Act. It has also advised Mr Frugtniet that it was considering cancellation of his registration and the reasons for its doing so and invited him to make submissions on that matter.
In view of these matters, I am satisfied that Mr Frugtniet is in a position to know the material on which MARA relies, the view it has taken of that material and the reasons it has for reaching its decision to cancel his registration. This does not appear to be a case in which the investigation that MARA has undertaken appears on its face to be cursory or inadequate. That is not to say that there is not more material to be obtained or that its decision is correct. What it is to say is that MARA appears to have investigated the matter as thoroughly as it can using the powers it has under the Migration Act. If there is further relevant material to be found, it is logical to think that Mr Frugtniet is in a better position than MARA to be able to identify it even if it is not in his immediate possession or control. As for the contentions he makes, Mr Frugtniet is yet to put his view of the facts and the law whether in response to MARA’s reasons for decision or generally.
These are not adversarial proceedings. Any directions that I give are directed to ensuring that all of the relevant material and arguments are on the table and known both to Mr Frugtniet and MARA. That will assist any settlement negotiations that may occur between the parties or with the aid of the Tribunal under the AAT Act. Where he and MARA do not reach any agreement, it is important that each has all relevant material before the Tribunal commences any hearing to review the merits of the decision. Unlike a court where pleadings are lodged and burdens of proof must be satisfied, a matter such as this will not be decided in the Tribunal on the basis that a party has not satisfied a burden of proof. It will be decided by reference to what decision is correct in law and, if more than one decision meets that description, by reference to which of those decisions is preferable. Mr Frugtniet may, of course, choose not to provide any further information or material and put his case on the basis of the material in the T documents. If he wishes to rely on other information or material, I have decided that, with appropriate adjustments to the dates, he must comply with the directions that have already been issued. He must do so before MARA is required to lodge further material for it has already provided the information and material that it has.
AUTHORITIES ON WHICH MR FRUGTNIET RELIES
I will begin with the case of Towie, with which Mr Frugtniet began his submissions, and then examine it in the wider context of civil penalties, disciplinary proceedings and merits review of administrative decisions.
Towie v Medical Practitioners’ Board of Victoria
The Medical Practitioners Board of Victoria (MP Board) had found Dr Towie to have engaged in unprofessional conduct not of a serious nature within the meaning of paragraphs (a) and (b) of the definition of “unprofessional conduct” within the meaning of s 3(1) of the Medical Practice Act 1994. The MP Board reprimanded Dr Towie but he applied to the Victorian Civil and Administrative Tribunal (VCAT) for review of its decision. In the course of the preliminary proceedings, VCAT ordered that the MP Board lodge documents under s 49 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act). Those documents must include a statement of reasons and a copy of every other document in the decision-maker’s possession that the decision-maker considers is relevant to the review of the decision.[45] Within 14 days of their lodgement and service, VCAT ordered Dr Towie to file witness statements and any further documents upon which he intended to rely. Within a further period of 28 days, the MP Board was to do the same. VCAT’s leave would be required to introduce material at the hearing that had not been lodged and served in accordance with the directions.
[45] VCAT Act; s 49(1). Section 49(1) equates with s 37(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act).
Even though he had indicated to the MP Board that he would be calling himself as a witness, Dr Towie advised its solicitors that he did not regard himself as a witness and declined to lodge a statement. The procedural history is reasonably lengthy but, in summary, Dr Towie refused to lodge a witness statement and VCAT struck out his application under s 78 of the VCAT Act on the basis that he had unnecessarily disadvantaged the MP Board by failing to comply with VCAT’s direction.
On appeal from that order, the Court of Appeal noted that the directions that had been made in the matter were standard or common directions made by VCAT in such matters. The propriety of its having done so was not in issue but, the Court said:
“ Nevertheless, in circumstances where the alleged breach of those directions in main part gave rise to the order now appealed against, we should indicate that, in our view, the usual directions given at VCAT, would not generally be appropriate where an applicant seeks to review disciplinary proceedings and is a person who is or may be exposed to a penalty. A party may, in such cases, be required to file written grounds and an outline of argument which identifies in broad terms what is in issue on the application for review. But it will not ordinarily be appropriate that directions be given which require the applicant for review to provide an outline of argument, or any other written material, which contains a positive assertion or denial of facts or requires an election by the applicant as to whether he or she intends to go into evidence or requires any proposed evidence the applicant intends to call to be the subject of a witness statement which must be produced and served on the other side, before the case advanced against the applicant has been completed.”[46] (underlining added)
I have already set out the underlined passage in summarising Mr Frugtniet’s submissions but I have placed it in its context.
[46] [2008] VSCA 157 at [9]
Australian Securities and Investments Commission v Mining Projects Group Ltd
The Court of Appeal went on to two other cases to which he referred. The first was Mining Projects Group decided by Finkelstein J in the Federal Court. The Australian Securities and Investments Commission (ASIC) alleged that the Mining Projects Group Limited (MPG) and two of its directors had contravened the Corporations Act and sought various forms of relief. In particular, ASIC alleged that, in breach of ss 180 and 181 of the Corporations Act, the directors of the defendant company had knowingly procured the company’s breach of s 1041H when it made misleading public announcements. Those announcements had, it was alleged, overstated the potential of certain mineral deposits. The directors were also alleged to have engaged in insider trading contrary to s 1043A and improperly using company information contrary to s 183.
Although the detail does not appear in the judgment, s 1317E(1) provided that, if a Court were satisfied that a person had contravened one of the provisions it listed, it had to make a declaration of contravention. Sections 180(1), 181(1) and 183(1) were listed. Although it has since been amended, s 1317G continues to be drafted in similar terms. Section 1317G(1) provided that a Court might order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if two criteria were met. The first was that a declaration of contravention had been made. The second related to the characteristics of the contravention. It had to have either materially prejudiced the interests of the corporation or scheme or its members, materially prejudiced the corporation’s ability to pay its creditors or have been serious. Once imposed, the penalty was a civil debt payable to ASIC on the Commonwealth’s behalf and was taken to be a judgment debt.[47]
[47] Corporations Act; s 1317G(2)
A declaration of contravention under s 1317E also entitled ASIC to ask the Court to disqualify a person from managing corporations for a period considered appropriate by the Court. Provided the Court took into account relevant circumstances specified in s 206C(2) and was satisfied that the disqualification was justified, it could make the order of disqualification under s 206C(1).
ASIC delivered a detailed statement of claim and each defendant lodged a defence but, given that no part of them amounts to an allegation of the truth of the facts stated in them, Finkelstein J said that they were to be treated only as statements outlining the case each director wished to raise for resolution by the court.[48] Each of the directors opened his defence with a statement that he “… claims and reserves his right to claim penalty privilege in the proceeding.” Citing the case of Trade Practices Commission v Abbco Iceworks Pty Ltd,[49] Finkelstein J said that, as a corporation, MPG could not claim the benefit of that privilege. Nor could it claim the privilege against self-incrimination. He cited Caltex in support of that proposition.[50] The issue was whether either the penalty privilege or the privilege against self-incrimination relieved the directors from an obligation to give further details in their defences. If they were relieved, a further issue was whether they had, by filing detailed defences waived, in whole or in part, their right to assert either privilege.
[48] [2007] FCA 1620 at [4]
[49] [2007] FCA 1620 at [5] citing [1994] FCA 1279; (1994) 52 FCR 96; 123 ALR 503 at per Burchett J with whom Black CJ, Davies, Sheppard and Gummow JJ agreed
[50] The same outcome is now entrenched in legislation: Evidence Act 2008 (Vic); s 187
Finkelstein J began by describing the similarities between the two privileges:
“… Each privilege operates to excuse a person from being compelled to answer any question or produce any document if doing so would have the tendency in one case to expose that person either directly or indirectly to a criminal charge and in the other to a penalty. …”[51]
Later, his Honour noted that:
“… [B]oth penalty privilege and self-incrimination privilege protect not only against the risk of exposure to penalty or incrimination by direct evidence but also by indirect or derivative evidence. Disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry. A defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence … If a defendant is required to plead a positive case there is a real risk of that happening …”[52]
[51] [2007] FCA 1620 at [7]
[52] [2007] FCA 1620 at [16] (citations omitted)
There are differences between the two privileges. The privilege against self-incrimination is a rule of law applying in both curial and non-curial proceedings. Penalty privilege is not a rule of law but:
“… is merely a procedural rule that applies in curial proceedings to require the plaintiff to prove his case without any assistance from the defendant …”[53]
[53] [2007] FCA 1620 at [7]
In the case before him, Finkelstein J found both privileges were engaged. In the case of the privilege against self-incrimination, it was engaged because the directors could establish that the provision of information or the production of documents in the civil case led to a real and appreciable risk of a criminal prosecution.[54] ASIC had alleged that the directors had engaged in insider trading and had breached their directors’ duties. That raised the possibility of their being charged with obtaining property by deception, obtaining financial advantage and fraudulently inducing persons to invest money contrary to ss 81, 82 and 191 of the Crimes Act 1958 (Vic).
[54] [2007] FCA 1620 at [9]
The manner in which penalty privilege can be claimed depends on the type of proceeding in which the claim is made, Finkelstein J said. He distinguished two types of proceeding:
(1)Civil action to prevent or redress a civil injury
“… In civil actions where no claim for a penalty is made the defendant must show that providing the information requested would tend to subject him to a penalty in separate proceedings before he can rely on the privilege.”[55]
(2)Civil action to recover penalty
“… In an action to recover a penalty it is not necessary for the defendant to establish that there is a risk he will be subjected to a penalty by providing information to the plaintiff. The plaintiff is seeking the information for that very purpose. It does not matter that in the proceeding the plaintiff also claims other relief. …”[56]
[55] [2007] FCA 1620 at [10]
[56] [2007] FCA 1620 at [10]
If the penalty privilege applies, it will prevent a plaintiff from obtaining an order for discovery of documents or for the administration of interrogatories, from obtaining an order for the provision of witness statements or for the production of documents and, in general terms, will prevent a plaintiff from obtaining any information that will assist in establishing the defendant’s liability to a penalty.[57] The rationale for these outcomes lies in the fact that:
“… penalty privilege ‘serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it.’ That is, the plaintiff must prove his case without any assistance from the defendant … So it has been held that although in a civil action a defendant is required to deliver a defence he cannot be compelled to make any admissions in relation to the matters alleged against him. That is, penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege …”[58]
[57] [2007] FCA 1620 at [11]
[58] [2007] FCA 1620 at [12] (citations omitted)
The application of the general principles may be modified by the particular legislative context underpinning the civil penalty provisions. For all practical purposes, particular legislative provisions may require a defendant in a civil action to recover a penalty, to run a positive case rather than simply deny the facts alleged by the plaintiff. In this context, Finkelstein J referred to a judgment of the Full Court of the Supreme Court of Western Australia in Bridal Fashions Pty Ltd v Comptroller-General of Customs[59] (Bridal Fashions). The Full Court held that s 254 of the Customs Act 1901 (Customs Act) which renders, in certain circumstances, a defendant in a customs prosecution competent and compellable to give evidence did not abrogate the penalty privilege. Ordinarily, the Full Court observed:
“… a defendant when filing a defence to a statement of claim is required to admit or deny the allegations in the statement of claim, or put the plaintiff to the proof of the allegations in the statement of claim, or put the plaintiff to the proof of the allegations therein (without admitting or denying them) or plead a confession and avoidance. …”[60]
[59] (1996) 17 WAR 499;140 ALR 681; 135 FLR 100; Malcolm CJ, Ipp and Owen JJ
[60] (1996) 17 WAR 499;140 ALR 681; 135 FLR 100 at 516; 696; 116
Section 255(1) provides that an averment by the prosecution or plaintiff in the statement of claim was prima facie evidence of the matters so averred. Evidence might be given in support or rebuttal of any matter averred and would be considered on its merits. The “… creditability and probative value of such evidence shall be neither increased nor diminished by reason of this section” s 255.[61] The options available to a defendant in pleading a defence in court proceedings for the imposition of a penalty were canvassed by the Full Court:
“ It would be open to the defendant, if it chose, to admit, in its defence, the allegations in the statement of claim. An admission in those terms would constitute a waiver of the privilege against self-exposure to a penalty or self-incrimination.
By reason of s 255(1) it would not be open to the defendant simply to put the plaintiff to the proof of the allegations in the statement of claim, as a defence drawn in such terms would not enable the defendant to lead any evidence whatever in order to negate the impact of the operation of s 255(1). Thus a plea that the defendant neither admits nor denies the allegations in the statement of claim would be an exercise in futility. Accordingly, there is no need, in practice, to consider the application of the privilege against self-exposure to a penalty or self-incrimination to a plea of this kind.
It would be open to a defendant to plead a denial to the allegations made in the statement of claim. The defendant would then be entitled to lead oral evidence in an attempt to refute the prima facie effect of s 255(1). Such a denial could not be categorised as an act of self-incrimination on the part of the defendant.
In practice, however, the practical effect of s 255(1) is that a defendant will ordinarily be required to raise an affirmative allegation in its defence. Without pleading the facts and circumstances of an affirmative case a defendant will not be able to tender positive exculpatory evidence … A defendant could readily plead an affirmative case by averring, for example: ‘If (which is denied or not admitted) the alleged fact was as pleaded in par X of the statement of claim, the defendant says …’. Should the defendant plead an affirmative case on the basis that it would not thereby incriminate itself. On the contrary, the purpose of the affirmative case would be to set up a defence against the case brought against it by the prosecution.
To summarise, a pleading in the defence that the defendant does not admit an allegation, and puts the plaintiff to the proof thereof would not prevent the operation of s 255(1). It would not be an appropriate plea. Should the defendant admit an allegation in the statement of claim, it would thereby waive the privilege against self-incrimination. If the defendant were to deny an allegation in the defence it would not incriminate itself. Should the defendant set up an affirmative case in the form suggested it would not incriminate itself. In the circumstances, the privilege has no practical application in the pleading of a defence to the statement of claim in a Customs prosecution. Accordingly, the privilege against self-exposure to a penalty or self-incrimination does not preclude the appellant or the second respondent from pleading in the ordinary way to the allegations in the statement of claim.”[62]
[61] Customs Act; s 255(3)
[62] (1996) 17 WAR 499;140 ALR 681; 135 FLR 100 at 516-517; 697; 117-118
In Mining Projects Group, Finkelstein J summarised the point made by the Full Court in Bridal Fashions:
“ Properly understood, the point made by the Full Court is a narrow one. In a Customs Act case neither penalty privilege not self-incrimination privilege is of any use to a defendant because, if either privilege is claimed and no positive case is run, the defendant will suffer an adverse judgment. For that reason, a positive plea could not be incriminating; it could only be exculpatory.”[63]
[63] [2007] FCA 1620; (2007) 164 FCR 32 at [15]; 38
Australian Securities and Investments Commission v Plymin
In Plymin, ASIC alleged that the defendants were company directors of a company engaged in insolvent trading. It claimed pecuniary penalties under the Corporations Law. ASIC accepted that the directors should not be required to provide affidavits or statements of the evidence on which they wished to rely before the close of its case. The witnesses whom they wished to call, ASIC submitted, were in a different position. Mr Plymin and other defendants should be required to lodge and serve affidavits or statements from those other persons and upon which they wished to rely before ASIC closed its case. The defendants accepted that they should provide affidavits but only after the plaintiff had presented its case. The penalty privilege protected them from being required to do so at an earlier time.
Mandie J decided that the scope of the penalty privilege is no narrower than the privilege against self-incrimination and the two should be considered in the same light. The penalty privilege “… is not simply a rule of evidence but a basic and substantive common law right.”[64] His Honour considered that:
“… the privilege so described extends to protect the defendants from being required to provide evidence by way of other witnesses, including expert witnesses. The principle expressed in the decisions to which I have referred I think clearly applies to that category of evidence. Otherwise the defendants might indeed be required (in principle at least) to be the authors of their own destruction by producing evidence at this stage. At least they might expose themselves to the potentiality either directly or derivatively by putting the plaintiff in the position of being able to carry out further investigations on the basis of the evidence which they were required to produce.”[65]
[64] [2002] VSC 56; (2002) 4 VR 168 at [5]; 169
[65] [2002] VSC 56; (2002) 4 VR 168 at [10]; 170
Mandie J pointed out hazards that would be faced by the defendants were they required to lodge their affidavit evidence before the plaintiff had closed its case:
“… [T]he defendants might decide not to call or rely upon evidence of which they had already given the details and yet, as a result of the compulsory process of the court, had put the plaintiff in a position to decide to call that evidence itself.
In relation to the opinion of experts, the hazards of the contrary view were again illustrated in argument. I accept the submission that experts, for their evidence to be admissible, are required to state the facts and assumptions upon which their opinions are based in an explicit fashion and that might well disclose the factual defences which were intended to be taken by the defendants or at least lead to an investigative chain of assistance to proof of the plaintiff’s case.”[66]
[66] [2002] VSC 56; (2002) 4 VR 168 at [11]-[12]; 170
I certify that the fifty four preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ………[sgd].....................................................
Associate
Date of Directions Hearing 4 June 2015
Date of Decision 30 July 2015
Self-represented Applicant Mr R Frugtniet
Solicitor for the Respondent Mr N Rogers
Australian Government Solicitor
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