Frugtniet v Migration Agents Registration Authority

[2018] HCATrans 157

[2018] HCATrans 157

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M21 of 2018

B e t w e e n -

RUDY FRUGTNIET

Applicant

and

MIGRATION AGENTS REGISTRATION AUTHORITY

Respondent

Application for special leave to appeal

GAGELER J
NETTLE J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 17 AUGUST 2018, AT 10.46 AM

Copyright in the High Court of Australia

MR J.P. WHEELAHAN:   If it pleases the Court, I appear for the applicant in this matter, Mr Frugtniet.  (instructed by the applicant)

MR T.M. BEGBIE:   If the Court pleases, I appear with MR S.M. REBIKOFF, for the respondent in this matter.  (instructed by Australian Government Solicitor)

GAGELER J:   Mr Wheelahan.

MR WHEELAHAN:   This application raises an important question of law:  is the penalty privilege a substantive common law immunity that is generally available in non‑judicial proceedings?  The question is of public importance because of its general application.  There is a conflict of statements in this Court about that question and how to interpret the statement.  We are not prepared to hold that the privilege is inherently capable – inherently incapable I should say, of application to non‑judicial proceedings in Pyneboard.

Statements in Sorby support a conclusion that Pyneboard positively established the privileges inherently capable of application, albeit in the context of self‑incrimination.  Statements in Morris support a conclusion that the privilege is capable of application to disciplinary proceedings.  Statements in Daniels and Rich are to the opposite effect. 

This is a suitable case to resolve the question as it involves the application of the privilege in the context of a Tribunal proceeding.  The primary judge found that the directions of the Deputy President practically compelled the applicant to file witness statements, a statement of facts and contentions or risk not being able to rely on that evidence at the Tribunal. 

The primary judge found that the applicant was obliged to make these decisions before MARA identified and completed its case, possibly affecting MARA’s forensic decisions.  Does the principle underlying the penalty privilege, if it were applicable, was engaged?

If I can take your Honours please to page 200 of the court book, paragraph 76 at the beginning of that page, the top of the page.  Now, the Full Federal Court decided that the penalty privilege is a common law rule but not a substantive common law right which gives the word “substantive” a lot of work to do.  And at paragraph 76 at about line 4, the Full Federal Court reasoned that:

Daniels and Rich dictate that the necessary exercise of statutory construction was one of finding a basis for penalty privilege to apply to the AAT proceedings, not of finding the abrogation or curtailment of such a privilege that was otherwise applicable.

GAGELER J:   Do you say that is an incorrect statement of principle?

MR WHEELAHAN:   Yes.  Well, it all depends on whether the penalty privilege is a substantive common law rule, of course.  But it might not depend on whether the penalty privilege is a substantive common law rule because there is one view that common law rules, the penalty privilege applies. 

Another way to have approached this ‑ this is what MARA submitted below ‑ was that the more fundamental the right, the more clear the reasoning needs to be to abrogate it.  That is not what the court did.  They essentially, in my submission, invert the principle of legality.  So if you look at –

GAGELER J:   Well, that sentence, to which you are directing our attention, is a sentence about what the reasoning in Daniels and Rich requires.

MR WHEELAHAN:   Yes.  So, that is more a point about whether Daniels and Rich was ‑ the obiter in Daniels and Rich was of the same kind as described in Farah Constructions or not.  In relation to that point, I simply say that the primary judge reasoned it would be incorrect to read into the two brief lines at paragraph 31 of Daniels, more than was actually stated, that Morris was overruled and that the primary judge reasoned that Rich, at paragraph 24, may indicate no more than the plurality was not prepared to attribute to the privilege – to the privileges the same attributes as legal professional privilege.  So that is the point about Farah Constructions, whether the obiter in Rich and Daniels is of the kind so described in Farah Constructions. 

If you go down to paragraph 20 on page 200 there, paragraph 77 of the reasons, the Full Federal Court reason that:

In each setting where penalty privilege is claimed, the opening question is whether that privilege applies in the first place, not whether it has been abrogated. 

And if you go down to the last paragraph at line 40, at about 78, they state:

the reverse exercise is required to be carried out of ascertaining a proper basis for penalty privilege to apply at all.

Now, the primary judge took the opposite approach, reasoning it was a consequence of the principle of legality that one starts with the presumption that the privilege is not to be affected rather than looking for an implied qualification of an otherwise freely interpreted statute.  And the primary judge reasoned that there was nothing in the AAT Act or the Migration Act expressly, or by necessary implication, manifesting a clear intention to abrogate or curtail the penalty privilege at the AAT.  The primary judge found that the AAT powers analogous to curial powers were indicative of the availability of the penalty privilege.

GAGELER J:   There is a manifestation of the intention to exclude the privilege against self‑incrimination, is there?

MR WHEELAHAN:   There is.  And section 60(3) preserves the protections that a witness that will be called before the AAT, they have the same protections that they would have in this Court.  Rather than assuming that the penalty privilege can apply and asking has it been abrogated or curtailed by express words or necessary implication with irresistible clearness, the Full Federal Court discerned the application of the penalty privilege from the three features described at paragraph 77 on the bottom of page 200. 

GAGELER J:   Yes.

MR WHEELAHAN:   So, if I can just take you over the page there at 201, line 10, the Full Federal Court reason:

The protection afforded by the privilege is from being compelled, directly or indirectly, to assist the party seeking a penalty to succeed in achieving that objective by furnishing relevant information.  It is not a protection from disclosing evidence that is intended to be relied upon, as a matter of the efficient administration of a non‑adversarial, non‑curial tribunal.

This restrictive approach to the application of penalty privilege, at least in a federal context, does not necessarily mean that legislation cannot be construed as having the effect that penalty privilege is available in the absence of one or more of the features listed above.  However, the absence of those features in a particular instance does mean that it is inherently less likely that penalty privilege applies.  That is especially so where there is also an absence of reasonably clear language to that effect or a strong basis for an implication, akin to clear language, that penalty privilege applies.

Now, the applicant’s submission is that this effectively turns the principle of legality on its head.  Rather than asking is the penalty privilege ‑ or presuming the penalty privilege is there and asking has it been taken away, one asks has the penalty privilege been put there by legislature.  And contrary to the decision of the Full Federal Court, there are considered statements of High Court authority that support the application of the penalty privilege outside a curial setting.

If I could take your Honours to – you will see just while we are on page 200, at paragraph 78, the Full Federal Court assert that:

With respect, the primary judge’s reliance on Morris in particular was misplaced.  The decision in Morris that penalty privilege was capable of applying to non‑curial proceedings for the purposes of deciding whether that privilege had been excluded by the regulations under consideration, proceeded upon the basis of an implied, non‑binding assumption that the two privileges were relatively indistinguishable.

If you go to ‑ ‑ ‑

NETTLE J:   Just before you do, assuming all that in your favour as it were, what do you say about paragraphs 83 and 84 of the judgment?

MR WHEELAHAN:   In terms of this not ‑ ‑ ‑

NETTLE J:   Just that.

MR WHEELAHAN:   ‑ ‑ ‑ giving Mr Frugtniet any advantage.

NETTLE J:   Well, assuming that there were a privilege against self‑exposure to penalty, what seems to be said here is that the orders were made and did not breach it.  It was up to Mr Frugtniet whether he put a witness statement in or whether he did not.

MR WHEELAHAN:   Well, the answer to that, your Honour, I think lies in Justice Finkelstein’s remarks in Mining Projects v ASIC.  In terms of – well the primary judge’s reason was that there was a practical compulsion to file any statement that the applicant wished to rely upon because if he did not file a statement – well, he ran the risk – if he did file a…..he ran the risk that his application might be struck out under 42A.

NETTLE J:   Right.

MR WHEELAHAN:   If he did not file a statement, he may not be able to rely upon it at the Tribunal and that would weaken his position at the Tribunal.  So there was an effective compulsion.  So my answer to that proposition is that there was a practical compulsion to file a…..to file a statement and any documents.  And, in effect, it is Hobson’s choice.  It is an invidious choice.  You run the risk of not being able to run your case at all or not being able to rely on the evidence.  So that is the answer to that objection.

If I can take your Honours to page 181, line 20, the Full Court reason Morris proceeded on an implied non‑binding assumption of similarity between the privileges.  The fourth ground of appeal in Morris was that the relevant questioning did not fall within the principle that a person cannot be compelled to discover that, which if answered, would tend to subject him to any form of punishment, penalty, forfeiture or ecclesiastical censure.  So the ground was framed around the statement of Lord Justice Bowen in Redfern v Redfern and the appeal dealt with these aspects of the privilege. 

Now, the appellant’s outline of argument in the case referred to the privilege against self‑incrimination, perhaps infelicitously as having no relevance to questions from superiors touching on police misconduct for the purpose of disciplining the force.  The reference to privilege against self‑incrimination appears to be shorthand for the principle articulated in Redfern.  Now, the respondents in that case – these are recorded in the reasons of – sorry, the judgment at 399 in the argument.  The respondents argue that the sanctions to which the respondents were liable were no less punishments and penalties because their source or purpose was disciplinary in nature or civil and not criminal in nature.  That is recorded in the reasons at 399.

Now, contrary to what the Full Court found, Chief Justice Gibbs made an assumption that the privileges were distinct.  He made an assumption of difference.  Now, if you read the passage that is extracted at paragraph 20 of the Full Federal Court judgment there – sorry, paragraph 22, line 20:

There is an obvious distinction between criminal offences and breaches of discipline and it is necessary to insist upon that distinction for some purposes ‑

Now, all the texts and cases cited to support that proposition cut off by the ellipsis at line 20, Phillips and Arnold, Greenleaf and Bray, support an interpretation that the Chief Justice carefully distinguished the different contexts in which the privilege could arise and the different consequences they could avoid.  The statement that is extracted over the page at line 20, paragraph 25:

It is right to start with the assumption that the rule which confers the privilege is capable of applying to a statutory provision which requires members of the police force to answer questions tending to show the commission by them of disciplinary offences.

In context, is equally capable of being interpreted as a reference to the penalty privilege, not a single combined privilege.  The allegations against these officers were that they were on a tour of duty and they did not answer their radio for four hours and did not fill out their running sheets.  It was an issue in the hearing that no one knew whether they were out committing indictable offences or doing something else, whether the privilege against self‑incrimination applied.  But, my submission is that there is strong support to be found in Morris that the penalty privilege is inherently capable of applying in an administrative context.

The Full Federal Court found against it.  At the very least this is an important point that requires final determination by this Court.  Moreover, there is persuasive authority that it is difficult to distinguish the rationales for the penalty privilege from the privilege against self‑incrimination, the statement of Justice McHugh in Caltex and also the statement of Justice Burchett in Trade Practice Commission v Abbco Iceworks.  Justice Burchett’s reasoned at page 129:

the privilege against self‑incrimination –

and the penalty privilege:

are both reflections of the one fundamental principle.

A “deep‑seated belief that those who allege” the incurring of a penalty “should prove it themselves and should not be able to compel” a defendant “to provide proof against himself”. 

Recent scholarships suggest the penalty privilege has a history as long as the privilege against self‑incrimination.  You will recall the Full Federal Court adopt Justice Kirby’s pithy statement of principle in Kirby – sorry, Justice Kirby’s pithy statement of principle in Rich v ASIC, where his Honour reasoned that in dissent that it had a lesser history and it was not reflected in fundamental principles of human rights.

My submission is that the penalty privilege is equally capable of preserving human dignity and is equally fundamental to the law’s operation.  The penalty privilege developed by way of analogy with the privilege against self‑incrimination and an analysis of the penalty privilege shows that, despite its origins, there are good reasons why it could be regarded as a substantive rule of law.  This Court is invited to settle that important question.

Just for the sake of completeness, your Honours, I would just like to correct a misleading typographical error in the special leave application, at

paragraph 4, page 208.  The word “penalty” should not appear before the word “privilege” in the quote from Pyneboard there.

GAGELER J:   Thank you, Mr Wheelahan.  We do not need to hear from you, Mr Begbie.

In our opinion the present case is an inappropriate vehicle to consider any general issue of principle concerning the application of penalty privilege in non‑curial proceedings.  We consider that the outcome of the present case would be unlikely to be found to be different on appeal.  In those circumstances special leave to appeal is refused.

Do you ask for costs?

MR BEGBIE:   We do, your Honour.

GAGELER J:   Do you have anything to say?

MR WHEELAHAN:   No.

GAGELER J:   Special leave to appeal is refused with costs.

The Court will now adjourn to 9.00 am on Tuesday, 4 September in Darwin.

AT 11.07 AM THE MATTER WAS CONCLUDED