Griffin v Pantzer
[2004] HCATrans 310
[2004] HCATrans 310
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S183 of 2004
B e t w e e n -
DAVID JAMES GRIFFIN
Applicant
and
WARREN PANTZER AS TRUSTEE OF THE ESTATE OF DAVID JAMES GRIFFIN
Respondent
Application for special leave to appeal
McHUGH J
GUMMOW J
KIRBY J
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON TUESDAY, 17 AUGUST 2004, AT 3.01 PM
Copyright in the High Court of Australia
MR A.W. STREET, SC: May it please the Court, I appear with my learned friend, MR G.D. WENDLER, for the applicant. (instructed by North & Badgery)
MR B.A.J. COLES, QC: If your Honours please, I appear with MS M.A.C. PAINTER for the respondent. (instructed by Peter Kemp Solicitors)
McHUGH J: Yes, Mr Street.
MR STREET: Your Honours, there are, in substance, two issues that arise in relation to these proceedings. The first is one concerning opposed questions at an examination under section 81 and the second relates to select documents that were the finding of a privilege against self‑incrimination and ‑ ‑ ‑
GUMMOW J: What is the section 81 point again?
MR STREET: The section 81 point arises in relation to proposed questions that are sought to be asked. Those questions your Honours will find ‑ ‑ ‑
GUMMOW J: Wait a minute. Section 81 is governed by section 81(11AA), is it not?
MR STREET: It is, your Honour, and I will come to address (11AA) if I may in due course, but I was seeking to identify the substance. If I can deal with ‑ ‑ ‑
GUMMOW J: I think the substance is subsection (11AA). Anyhow, what is the other point?
MR STREET: The other point, your Honour, relates to the production of documents, being select documents that were the subject of a finding that they were protected by the common law privilege of self‑incrimination if it was not abrogated by statute. There are, in substance, four reasons why we say ‑ ‑ ‑
GUMMOW J: What is the statutory source of the production?
MR STREET: The statutory source is sought to be sustained, first of all, under section 77 and then it is sought to be also supported under sections 129 and 130.
GUMMOW J: Yes.
MR STREET: In substance, there is a leap in the construction of section 81 which is sought to be supported by the construction adopted under section 77, but I will come to that if I may. Your Honours, if I can deal first with the questions sought to be the subject of examination. Those questions, your Honours will see, are set out in page 5 of the application book in paragraph 9. Your Honours will see the questions that are sought to be asked in paragraphs (a) to (d). Each are questions patently which would give rise to a real likelihood, not a mere risk, of incrimination.
The subject matter of the proceedings that are referred to in question (d) was itself the subject of a finding that it related to the documents that were the subject of the claim for privilege against production and relevantly your Honours find that at page 7 in paragraph 14 is the link which was also the subject of an observation by the Full Court in ‑ ‑ ‑
KIRBY J: What has happened to the criminal proceedings commenced against your client?
MR STREET: There has been an indictment presented. The criminal proceedings are fixed for hearing, I think in November/December this year.
KIRBY J: What, is there a stay of the operation of the Full Court’s ‑ ‑ ‑
MR STREET: There is, and in that stay their Honours identified the questions involved in these proceedings as being ones of general public importance on the face of the issues we seek to agitate today. Your Honours, what I sought to do in relation to section 81 is identify the subject matter of those questions. Each of the four questions sought to be asked unless an injunction is granted goes directly to the heart of matter that would give rise, we say, to a likelihood of self‑incrimination.
Your Honours, when one comes to the error made by the Court of Appeal, we say that the errors made in relation to all statutory provisions were fourfold. First, failing to find that the legislature had not, in fact, addressed attention to the fundamental right, we say the material does not support such an attention being given. Secondly, by failing to hold that the legislature had not consciously decided to abrogate the right. When one comes to the provision your Honour Justice Gummow raised, we say that the intention one might find is a restriction, but certainly not an intention to abrogate, and I will come back to that.
Fourthly, your Honours, we say that the Full Court and the court below failed to apply a test of determining whether one could sustain a necessary implication in relation to the respective provisions to abrogate. When one looks at that question of whether there was, by necessary implication, an abrogation, we say that each of the provisions were meaningful and had operation. They do not meet the test which we respectfully submit should have been applied to determine whether, by necessary implication, this fundamental right was abrogated.
Your Honours, if I can turn to the material consequence of the examination first of all, your Honours will have had some statutory material handed up and your Honours will see from section 255 in that statutory material that the transcript is made admissible by section 255 in any proceedings and if one then goes to section 81(17), one finds that the notes that have been produced as a result of this examination are, in substance, available to anyone who pays the fee. In other words, the transcript in respect of this compulsory extraction of answers to questions here threatened to be asked are ones that are made available at large. There is no derivative use protection at all found in section 81 or elsewhere in the statute.
KIRBY J: Your theory of the interaction of the criminal law, the Crimes Act, and the Bankruptcy Act is that the public concerns of the criminal law are going to hold up or can hold up indefinitely the operation of the Bankruptcy Act. That seems inherently unlikely.
MR STREET: Not at all, your Honour. There is a vast sphere of area that can be properly the subject of examination and exercise of the powers by the trustee and, indeed, we say it is patent that there are many powers that the trustee can exercise in relation both to the applicant and in relation to third parties, many questions that could be asked referable to section 81, but not questions that go over a hurdle that would tend to incriminate. These questions carry a likelihood of incrimination ‑ ‑ ‑
GUMMOW J: What do you say about subsection (11AA), Mr Street?
MR STREET: What we say is the language there where it uses the words “merely” and “might” is language which arises no higher than a limited restriction on the privilege, not an abrogation, and that is supported, if your Honours please ‑ ‑ ‑
GUMMOW J: What does that mean? What do you mean?
MR STREET: Well, if I can explain. The restriction, your Honour, is one where if it is manifest, as it is, we respectfully submit, with these questions, that the question would give rise to a likelihood of self‑incrimination. That, in our respectful submission, has not been abrogated by this provision and we say to the contrary the provision actually recognises the continued existence of it by the language it has used. Can I take your Honours to page 84 of the application book.
GUMMOW J: What does the explanatory material show in relation to the insertion of this in 1990?
MR STREET: An intention rising no higher than to restrict, not an intention to abrogate, and your Honours will see that at ‑ ‑ ‑
GUMMOW J: Where does Justice Allsop deal with this?
MR STREET: His Honour does not deal with the argument in any detail. His Honour does not deal with the examination, we say, in a way which recognises this. If one goes to page 84, at line 12, your Honour will see the reference to “the common law privilege . . . is restricted”, not abrogated, restricted. That language of restriction is repeated at line 19. It is repeated at line 35. To find an intention to abrogate, in light of that restriction, in our respectful submission, flies contrary to applying the principles ‑ ‑ ‑
McHUGH J: But what can the words “might tend to incriminate” mean, other than the privilege is being abolished?
MR STREET: Your Honours, there we say it does not amount to that. What it addresses ‑ ‑ ‑
McHUGH J: Well, it says so in terms. Is your argument that they did not say “would tend”?
MR STREET: Your Honour, the absence of the reference to “would tend” is a matter of significance and one has in there ‑ ‑ ‑
GUMMOW J: “Might” helps you, does it not?
MR STREET: Well, your Honours, in our respectful submission, the use of the words “merely because to do so might tend” is a lower restriction. It is a curtailment. Can I just give your Honours an example of the difference between exceptions and conditions and regulations. Your Honours would be familiar with the decision in Carson v John Fairfax where ‑ ‑ ‑
GUMMOW J: Is the privilege couched in the language of “would” or “might”?
MR STREET: “Would”, your Honours. That is what his Honour Justice Allsop says and “would”, in our respectful submission, is not the language found here. One can well understand why the legislature would limit the restriction.
McHUGH J: Well, his Honour might have said that, but I appeared in plenty of criminal cases and other cases where judges and magistrates spoke about a tendency to criminate. I have never heard ‑ ‑ ‑
GUMMOW J: It would weaken the privilege, would it not, if it was “would”?
MR STREET: Your Honours, in our respectful submission, when one is seeking to divine what the legislative intention was to abrogate a fundamental right, one must look at the provision, first of all with the presumption that there was no intention to abrogate except unless an intention clearly emerges. The intention here is not to abrogate. It is to restrict. In terms of its application, the restriction plainly anticipates a position where a peripheral question with little ‑ ‑ ‑
McHUGH J: Subsection (11) says a person must answer all questions that are put to him, and you look at Mortimer v Brown and you will see what this Court thought of the section in those terms, and it is reinforced with (11AA) which says:
Subject to any contrary direction by the Court, the Registrar or the magistrate, the relevant person is not excused from answering a question merely because to do so might tend to incriminate the relevant person.
MR STREET: Your Honour, the submission we put is that it is an assessment of the likelihood of incrimination. The questions that are the subject of the injunction in this case plainly are likely to incriminate. We say that offends the principle and that all one finds in (11AA) is a restriction, not an abrogation.
GUMMOW J: Well, the alternative construction is that it is a removal subject to the possibility of a contrary direction.
MR STREET: No, your Honours, we would respectfully submit it would be one which, to the extent that there is an intention disclosed and apparent ‑ ‑ ‑
GUMMOW J: How does your contrary direction then work?
MR STREET: Your Honour, the ability of the court to assess whether the question is likely to give rise to incrimination is one which, going back to the questions one finds on page 5, is manifest in questions of that kind. Where there are questions that are of a peripheral nature, no doubt they can be addressed.
KIRBY J: Why cannot your client put your eggs in that particular basket, that is to say, throw yourself onto the contrary direction of the court or the registrar or the magistrate?
MR STREET: Because, your Honour, once one finds that the privilege has been abrogated, one will undoubtedly be required to answer and compelled to answer and compelled to answer ‑ ‑ ‑
KIRBY J: Yes, but Parliament must have meant something by permitting that to be done and, presumably, is drawing some sort of distinction between questions that might tend to incriminate, perhaps of a minor character, and those which go to the very heart of the criminal prosecution, possible prosecution.
MR STREET: Your Honour, to the extent that one has, in looking at this question, a divining of intention by the legislature, there are two different competing public interests. Certain there is the public interest in the proper administration and investigation of the bankrupt’s affairs, but there is a competing public interest which has not been weighed by the Full Court and that is the public interest in the proper administration of the criminal justice system. It is that administration of the criminal justice system that is, in essence, the overarching foundation for the continued fundamental right in respect of the privilege against self‑incrimination. That is not weighed ‑ ‑ ‑
McHUGH J: But you have to face up to the language of (11AA). Supposing your client is in the witness box and he is asked, “Have you received $10 million?” Now, does he have to answer that question?
MR STREET: Your Honour, the $10 million is identified in the material as arising from the fraud.
McHUGH J: I know, but it does not incriminate him as such, but it might tend to incriminate him. Now, does he have to answer that question?
MR STREET: No, your Honour. We would have said that question, in light of the material that is available, would tend to incriminate because one has the material here that the $10 million relates to the subject matter of the equity proceedings in respect of which the allegations were fraudulent obtaining of cheques. Now, your Honours, in relation to the question of section 81, there is a second issue that we seek to raise and that arises under section 128. We say that section 128 applies to the examination.
Your Honours, there is a section that I did not give your Honours that your Honours would have seen though at page 79 of the application book, section 306A. At line 50, subsection (3) which seeks to say that a person attending an examination “has the same protection . . . as a witness in proceedings in the High Court”. We say that, of itself, incorporates and recognises that section 81 would apply irrespective of the argument about proceedings. To the extent relevant we say that the Evidence Act must apply to a section 81 examination which takes place in the Federal Court otherwise it would not have the stamp of judicial character which would be necessary to vest that jurisdiction in the Federal Court. Your Honours, there is a third issue ‑ ‑ ‑
McHUGH J: This issue only arises if the Full Court erred in concluding that sections 77 and 81 abrogated the privilege against self‑incrimination, does it not?
MR STREET: No, your Honour, not at all. It arises in any event. So that we seek, in that regard, the benefit of section 128 as to apply in such an examination. Your Honour, in relation to the issue of proceedings I have sought to identify that, in our respectful submission, it is one where it must have that judicial character and stamp in order for it to be capable of being vested in the Federal Court.
Your Honours, can I move to the question which is the third issue, that is, the production of documents and the construction of section 77. In relation to the construction of section 77 we obviously maintain the position that there is no express intention identified. One then looks at section 77 to see whether or not there is any history that Parliament directed its attention to abrogate the privilege. There is no such history that is available in respect of section 77.
KIRBY J: You do have 81(11AA).
MR STREET: Which was introduced in 1990, your Honour. So one starts off with a history ‑ ‑ ‑
KIRBY J: That does tend to suggest that when Parliament wants to deal with this matter it can and does do so.
MR STREET: And it suggests even higher that when it does seek to do so, as it did in the explanatory memorandum, it states what its intention is and there it was an intention to restrict. Turning to section 77, there is no such patent history to suggest an intention. The language does not support an abrogation. The provision itself is not unqualified. It opens – and your Honours will have seen the section at page 36, if it is convenient, in the application book. There is both a subjective discretion which can be exercised to avoid production of the documents and an objective discretion. There is the excuse by the trustee.
Your Honours will have seen that the range of matter that the trustee can take into account is much broader than the interests of the applicant. Indeed, the interests of the applicant and any preservation of privilege against self‑incrimination is no part of the duties ‑ ‑ ‑
GUMMOW J: Now, just slow down for a minute, Mr Street. How does section 77 acquire its implementation? In other words, suppose the bankrupt does not forthwith give to the trustee all books, what happens then?
MR STREET: Well, your Honour, in relation to a position where it is said to be that there are documents that fall within the privilege, the bankrupt is entitled to seek to have that determined and agitated whether it is the subject of ‑ ‑ ‑
GUMMOW J: Well, I am worried about what the trustee does. What does the trustee do?
McHUGH J: He gets a warrant, does he not?
MR STREET: And in that regard, in relation to the warrant, we would have said again documents that are shown to fall into the category ‑ ‑ ‑
GUMMOW J: What section does he get the warrant under?
MR STREET: Under sections 129 and 130, your Honour.
KIRBY J: Is your reading of section 77 that where it says “A bankrupt shall, unless excused by the trustee”, that that is to be read as “And the trustee shall excuse where it might tend to incriminate”?
MR STREET: No, your Honour. What I was seeking to say is the section is not absolute in its terms. Just on the face of it it does not compel production. It provides two criteria to qualify the obligation to produce. The first criterion is a criterion of a subjective nature to the trustee, his discretion. That discretion is not one which must be exercised by any factor in the interests of the bankrupt.
Indeed, that was an area where the Full Court departed from the reasoning of Justice Emmett. Where Justice Emmett had, in fact, indicated that the trustee could only take into account certain matters, the Full Court took a different line and that the trustee could only deal with the documents in a particular way. Again, the Full Court took a different line.
KIRBY J: In other words, trustee‑like obligations.
MR STREET: Yes, and, indeed, the trustee is required to act in accordance with the interests of the creditors and in accordance with their direction. So the creditors can direct questions, no doubt with a real interest in doing so. There is no interest to preserve the privilege in that regard.
The other criterion is an objective criterion “prevented by illness or other sufficient cause”. “Other sufficient cause” was held to be of a physical nature. That does not sit comfortably with section 77(1)(d). At (1)(d) he is present at a meeting. When one tries to apply ‑ ‑ ‑
KIRBY J: Who said it was of a physical nature?
MR STREET: The Full Court confined other sufficient cause to being of a physical prevention. We say, in our respectful submission, it is not of that nature. It is one which would embrace a situation such as the present where there is said to be a privilege against self‑incrimination in respect of select documents and here, those select documents were the subject, ultimately, of evidence establishing the privilege. So, your Honours, we say that there is no express intention ‑ ‑ ‑
KIRBY J: How did they get “physical” into that very wide phrase?
MR STREET: By use of the term “prevention by illness” and a ejusdem generis construction is, in substance, what has occurred.
McHUGH J: There is nothing to stop the trustee getting an order under sections 129 or 130. Privilege against self‑incrimination has nothing to do with that. It is an order to seize the property.
MR STREET: Your Honour, to the extent relevant, we respectfully submit that where there is, as in this case, a select number of documents said to be the subject of the privilege, one then has to look again in respect of 129 and 130, was there an intention to abrogate the privilege in executing such a warrant.
McHUGH J: But it has nothing to do with it. You cannot claim privilege in respect of a warrant. If there is a crime committed and the police go in with a search warrant, they just seize whatever is relevant. You cannot say the police cannot take the documents away on the ground of self‑incrimination.
MR STREET: Your Honour, I notice the time. Am I permitted to respond to what your Honour said?
McHUGH J: Yes.
MR STREET: Your Honour, in that regard ‑ ‑ ‑
McHUGH J: Have you an answer?
MR STREET: Yes, your Honour. It is not a police warrant that is sought to be executed. We are sought to be required to produce under section 77 and then asked questions of a kind which could incriminate.
GUMMOW J: When they ask questions, that is a different question.
McHUGH J: That is a different matter.
MR STREET: If the Court pleases.
McHUGH J: Yes, Mr Coles.
MR COLES: May it please the Court. Dealing with section 81, your Honours will notice that 81(11AA) upon which reliance is placed is preceded by section 81(11). Section 81(11) in terms requires the bankrupt to answer all questions. There is no qualification on that. The obligation is to answer all questions. The function then of 81(11AA) is really, as Justice Allsop’s judgment recognised, in effect, a concession which authorised the registrar or magistrate or person presiding at the examination to militate the severity of the obligation to answer all questions by being able to make a direction to the contrary.
GUMMOW J: What is the process for any curial challenge to a ruling not to exercise that exculpatory power?
MR COLES: As I understand it, your Honours, a review of a registrar’s decision in relation to a question will lie to a judge of the court.
GUMMOW J: Yes.
KIRBY J: Your theory of (11AA) then is one that the Parliament has preserved, to some extent.
MR COLES: It is a concession to the examinee.
KIRBY J: You say it is a concession, but that suggests that by the other provisions of the section it has not abolished it, unless it is reimporting it in.
MR COLES: If it is understood in the way I have suggested it can be understood, that is to say, it militates the potential severity which might arise in a particular case so far as being obliged under section 11 to answer all questions ‑ ‑ ‑
KIRBY J: It is a very oppressive potential, is it not?
MR COLES: It has oppressive ‑ ‑ ‑
KIRBY J: A person is facing a serious criminal trial and, in defence of property, which is what bankruptcy is about, it is really forcing people, out of their own mouths, to condemn themselves, which is something that the law, our law and human rights law, stands firmly against.
MR COLES: Unless abrogated or curtailed by clear or manifest expression ‑ ‑ ‑
KIRBY J: Very clearly. This Court has had a series – there is a series of recent cases, the latest was Rich, but there have been a series of cases in this Court – Esso, I think was one. They have all said ‑ ‑ ‑
MR COLES: A large number of cases. There is no contest in the present application about the general principle with which the Court has ‑ ‑ ‑
KIRBY J: I realise that, but I am thinking we must be consistent.
MR COLES: Well, the consistency lies in the ‑ ‑ ‑
KIRBY J: I mean, there were arguments in those trade practices cases that the thing did not really work unless people had to deliver the documents and yet this Court said in the case of corporations, no, it has to be done very, very clearly.
MR COLES: This Court has said on a number of occasions that one of the matters you take into account is the practicability of giving effect to the legislation as a whole and, indeed, Justice Allsop thought that important here because he said the ‑ ‑ ‑
KIRBY J: No, that was the argument that was put to us in the Trade Practices Case ‑ ‑ ‑
MR COLES: Not quite, with respect, your Honour.
KIRBY J: ‑ ‑ ‑ that the system would not work if you did not have to produce the documents the Trade Practices Act – and the Court’s opinion in that case has been criticised in the academic literature exactly on that point, but here we are told the Bankruptcy Act will not work without this. It did not worry us in the Trade Practices Act. Why should it worry us here? It is property, property against crime.
MR COLES: The important question is to identify the discrete topics with which those respective pieces of legislation are concerned. It is, perhaps, as a matter of construction of the Bankruptcy Act, easier to come to a conclusion as to the centrality, for example, of the document producing obligation to the centrality of the operation of the Bankruptcy Act than it was, perhaps, to come to the parallel conclusion in relation to the ‑ ‑ ‑
KIRBY J: Except for this, that here they are up on the hill in Canberra and they are going away making these Acts and they are not remembering that in the States they are administering the general criminal law protecting people’s fundamental rights.
MR COLES: Again, we emphasise in further and partial answer to your Honour’s general question the overriding importance of viewing the matter as eventually a process of statutory construction in accordance with the dictates of this Court to that end, that is to say one must look at context in its wider sense, including the purpose and including the history of the relevant provisions. It is there that we say that Justice Allsop, having surveyed that history and having identified that purpose ‑ ‑ ‑
KIRBY J: Mr Coles, I agree Justice Allsop has written a very persuasive opinion, but the question is: is this sufficiently important for the High Court of Australia to look at the matter? That is the issue as far as I am concerned and in answering that question I will seek to be consistent with the way this Court, in a series of cases, has said you have to be very, very clear to take away the privilege against ‑ ‑ ‑
MR COLES: Again, I emphasise there is no contest about that general principle ‑ ‑ ‑
KIRBY J: That is just a cunning half agreement on your part. You are saying, “I wouldn’t dare to challenge the fundamental rule. It just doesn’t apply here”. Well, that is the issue.
MR COLES: It is a question of the particular statute and the real issue for the applicant ‑ ‑ ‑
KIRBY J: This would affect a lot of people because many bankrupts, shall we say, are not entirely pure as the driven snow. Many of them have a criminal involvement, or some of them have some criminal involvement in their activities leading to their bankruptcy. So this is not a rare problem. This is quite a common problem.
MR COLES: May we adopt that as further partial answer to your Honour’s question. The Bankruptcy Act, of course, has been on the statute books in its present and former forms with substantially similar provisions for a long time and this is, so far as we can tell, the first occasion that it has ever occurred to anybody, no doubt with the inspiration afforded by the ‑ ‑ ‑
KIRBY J: Well, they have been inspired by the recent cases in this Court, most recently Rich.
MR COLES: That does not suggest that the Bankruptcy Act itself does not have its own history.
KIRBY J: Penalty privilege.
MR COLES: And it is a deep and pervasive one where ‑ ‑ ‑
GUMMOW J: No, but the history was at a time before the utilisation of the privilege in non‑curial ‑ ‑ ‑
MR COLES: In non‑testimonial – when the privilege was – I concede that. It was when it was a non‑testimonial privilege. I accept that.
GUMMOW J: That is right. That seems to have been appreciated in 1990 when subsection (11AA) ‑ ‑ ‑
MR COLES: Yes. That would depend on your Honours accepting the general provision that (11AA) was intended, as much as anything else, to be palliative of the examinee’s condition.
GUMMOW J: Yes.
MR COLES: If, for example, he had a criminal trial tomorrow and the jury were about to go out, then you could imagine the registrar would probably intercept the relevant question.
KIRBY J: That can be turned against you in that it indicates that the Bankruptcy Act was drawn, in a sense, upon a premise which greater enlightenment has shown is not a correct premise and, therefore, that the Parliament has not deliberately turned its attention to the abolition of the privilege.
MR COLES: The issue is often, in our respectful submission, whether it can be seen on a construction of the Act whether the Parliament has actually turned its attention to something.
KIRBY J: I agree with that.
MR COLES: It is our general submission that a survey of the provisions of the Act as a whole produce that conclusion.
KIRBY J: Your starting point is the fundamental starting point of the court’s duty is to give effect to a valid law of the Federal Parliament. That is the fundamental duty because that is a constitutional duty and if the valid law of the Federal Parliament is clear and it has abrogated the common law, so what. There is no ‑ ‑ ‑
MR COLES: We say your Honours have already explicated and laid down in the clearest of terms the relevant principle.
KIRBY J: Yes, but it is one thing to lay it down in terms. It is another thing to make sure those terms are obeyed.
MR COLES: And our criticism, if I can put it neutrally, of the applicant’s leave application is really that it does not identify any answer to the ‑ ‑ ‑
GUMMOW J: It does not seem to face up to the scope of the privilege at common law anyway, if one looks at the orders sought at 107. It is all about documents, is it not? A lot of it is.
MR COLES: We would simply say the concerns about – the legislature has built in to section 81, through (11AA), a mechanism for – it commences, of course, with the registrar, but there is built in a mechanism for the registrar to make a contrary direction and there is authority in the Federal Court that deals with the circumstances which enliven that discretion. Justice Allsop did not, I think, at page 89 of his judgment – indeed, he noticed that it was not – at paragraph 190 he recorded:
The amended application and the appeal do not call upon the Court to lay down rules in advance for the guidance of the Registrar –
on that topic ‑ ‑ ‑
GUMMOW J: How could you?
MR COLES: You could not, precisely.
GUMMOW J: But what do you say about section 130 which seems to have a view taken of it by your opponent which then finds its way into these grounds of appeal?
MR COLES: Sections 129 and 130, we respectfully think have to be taken together for the – our submission really is to encapsulate what has already been put that a warrant may issue and it is no answer to the obligation to obey the warrant or the consequences of committal that may ensue that the subject matter of ‑ ‑ ‑
McHUGH J: The execution of the warrant does not require anybody to incriminate himself. The relevant officer just goes in and seizes the documents or property, as the case may be.
MR COLES: Justice Allsop laid some emphasis, and he did so, in our respectful submission, with authoritative encouragement from the United States Supreme Court that one real difference between the issue that you have, for example, under section 155 of the Trade Practices Act and the Bankruptcy Act is, of course, the vesting of the property, all of the property, of the debtor in the trustee, including, of course, necessarily his books and records. It is a little difficult to say that you can withhold against the person entitled at law.
McHUGH J: What about section 77? It is another question as to whether or not you can require under that provision the bankrupt to give to the trustee documents that might tend to incriminate him.
MR COLES: Can I say really six things about that. One, again, as with the other section, the obligation under section 77(1) on the bankrupt’s part is to:
(a) forthwith after becoming a bankrupt, give to the trustee:
(i) all books –
So the legislature intended that all books would be delivered and necessarily any reasonable overview of the Bankruptcy Act must assume that the legislature had in mind that the bankrupt might have been committing frauds or other improprieties and nevertheless it said all books.
McHUGH J: Well, you really have to rely on what Justice Kitto and Justice Walsh said in Mortimer v Brown about section 250 of the Companies Act.
MR COLES: Which I do, and, in our respectful submission, subsequent authorities have not in closely related contexts shown any real doubt about that proposition.
McHUGH J: One of my losses as a young barrister arguing that.
MR COLES: The second point – I said there were a number, your Honours – I would add to the emphatic adjective “all” in section 77 there is the use of the same expression in section 129. Secondly, we would say the use of the word “prevent” or “unless prevented”, that is to say the qualification that appears in section 77, limits seemingly ‑ ‑ ‑
GUMMOW J: Section 77 is a duty of imperfect obligation. Where is the Austinian enforcement of 77?
MR COLES: In 129 and 130.
GUMMOW J: That would seem to be so. Is there any self‑help available to the trustee?
MR COLES: I think in 265, too, I think, your Honour, from memory, and I suppose, your Honour, in the common law or the common law action of specific restitution or the…..of delivery up of property, perhaps.
McHUGH J: Detinue.
MR COLES: Yes, detinue. The next point I ‑ ‑ ‑
McHUGH J: Is there any provision making it an offence to refuse to deliver documents?
MR COLES: Yes, that is in section 265, your Honours.
McHUGH J: It used to be. It still is, is it?
MR COLES: In that section, your Honour, it is not seemingly in terms a defence that one had just excuse based upon a supposed privilege against self‑incrimination.
KIRBY J: It does seem a rather narrow view of “or other sufficient cause” to restrict it to physical.
MR COLES: If that were all that were involved, your Honour, I would wholly agree, but the point is that it is not “other sufficient cause” that are the words that are in contention. It is the word “prevented”. It is based upon the word “prevented” that the courts below came to the conclusion, or acknowledged really the pre‑existing conclusion that it was prevented by means of physical interception or temporary or indefinite incapacity rather than by legal ‑ ‑ ‑
KIRBY J: Well, why is not a person prevented by the rule that protects the person against having to give guilt out of his or her own mouth?
MR COLES: You can waiver a privilege. You do not have to insist upon it.
KIRBY J: You can, but unless you waive it you are prevented.
MR COLES: No, in my respectful submission, you are not prevented ‑ ‑ ‑
KIRBY J: It seems a rather narrow – I can understand the argument, but it seems a bit ‑ ‑ ‑
MR COLES: One is not prevented by privilege from – in the same sense one is prevented by an illness, for example, from producing a document.
KIRBY J: You say that if it had been intended to incorporate the doctrine it would have just been excused by the trustee or by other sufficient cause?
MR COLES: No, the section would have said “A person shall not, without reasonable cause” and then you might be able to argue that reasonable cause was the existence of a privilege. But it speaks of prevention.
GUMMOW J: What is the factual situation here? Where are these documents?
MR COLES: I think they are in my learned friend’s instructing solicitor’s office in carefully marked envelopes pursuant to some undertakings that he will, depending on the outcome of this afternoon’s application, produce to the trustee.
KIRBY J: It is a serious intrusion of federal law into the operation of criminal law in the State and into the basic doctrines of our criminal law and into international human rights doctrine. It is an offensive type of provision.
MR COLES: The English Court of Appeal has taken a different view, in our respectful submission, even as recently as the last month or so. I will just give your Honours some references ‑ ‑ ‑
GUMMOW J: Just before we go to that. There is no prosecution yet under 265?
MR COLES: No.
KIRBY J: There is prosecution of the criminal charges.
MR COLES: I cannot tell you. I do not know what the charges are, but I am happy to accept my learned friend’s observation that they relate to matters referred to.
GUMMOW J: I am just trying to isolate the time at which this complaint of privilege would arise. So it could arise conceivably on the prosecution under 265, I suppose, but that has not happened.
MR COLES: I suppose, your Honour, conceivably. I said there were a number ‑ ‑ ‑
KIRBY J: We were told the indictment has been found.
GUMMOW J: The solicitor is not the bankrupt under 77.
MR COLES: Other sections require ‑ ‑ ‑
GUMMOW J: What is the section that bites on the solicitor?
MR COLES: It is probably 77A or 77C, I think. Your Honours will see these set out on page 37 in Justice Allsop’s judgment. All of the provisions are – a trustee may require, in effect, any person to produce specified books if they are in that person’s possession. Section 77C authorises the Official Receiver by notice again, to any person, to require the person to attend before him and, coming down to (b)(ii), to “produce all books”.
GUMMOW J: But the solicitor is not a party to this litigation.
MR COLES: No, he is not. He is any person. To answer your Honour’s question, he is any person to whom a requirement of the ‑ ‑ ‑
GUMMOW J: He is not asserting any right or immunity at all.
MR COLES: He is not. He does not have to.
KIRBY J: Do you agree with Mr Street’s statement that the stay ordered by the Full Court was on the basis of public interest of the issue in the proceedings?
MR COLES: I accept that it was consensual, as I understand it, your Honour. I think it was out of deference to the appropriateness of this Court’s having the opportunity ‑ ‑ ‑
KIRBY J: This is the court that administers the Bankruptcy Act and they think there is a matter of public interest and importance.
MR COLES: As I understand it, our consent to the stay was based upon the perception that it was proper that this Court should not be rushed in its – I am sorry, in fact, I am told we probably opposed the stay, in effect, your Honour. So, indeed, I subtract from what I – paragraph 5 of the judgment records that Ms Painter, who appeared, did not dispute in any substantive way that the subject matter of the appeal would at least be in part destroyed. I am not disagreeing with your Honour in substance.
KIRBY J: I repeat, I think Justice Allsop has written a very convincing judgment, but you cannot dispute that this is a matter of general importance for the Act, that the Act was written when a different understanding existed about the privilege ‑ ‑ ‑
MR COLES: I accepted that, yes.
KIRBY J: ‑ ‑ ‑ that it affects potentially very large numbers of people and it affects them particularly because bankruptcy and criminal law quite often overlap and intersect, that the privilege is extremely important. It is recognised in our law and in international law and, most importantly, that this Court has in a series of about six cases upheld it and demanded great clarity on the part of the Parliament. Now, they are very strong reasons for special leave.
GUMMOW J: Now, the privilege was well known by 1990, was it not?
MR COLES: It was, yes. Many of the cases which fall into the category your Honour has described were known or had been decided by this Court before then.
KIRBY J: I am still agonising over one of them where I gave priority to the privilege over what one could say. As you are saying in this case, the Act does not really work unless you take it to have overridden the privilege.
MR COLES: That really is a textual and purposive analysis of the ‑ ‑ ‑
KIRBY J: And to be consistent, the Court cannot just be nice to corporations who demand the privilege. It has to be consistent in the way it upholds the privilege.
MR COLES: The trustee, of course, is a natural person and he does this on behalf of all creditors and, indeed, not simply on behalf of creditors, corporate or otherwise, but on behalf of the entire public who are said on high authority to have an interest in the due examination of the affairs of a bankrupt.
GUMMOW J: What is the nature of the proceeding before Justice Emmett? We do not have the initiating process.
MR COLES: No.
GUMMOW J: It says:
The Bankrupt has now commenced a proceeding seeking declarations and injunctions ‑ ‑ ‑
MR COLES: Yes, my learned friend has really described it as injunction proceedings.
GUMMOW J:
relating to his obligations to produce documents –
That is just not right. It is the solicitor’s obligation under 77, is it not?
MR COLES: No. At an earlier time and by arrangements the documents were placed by the bankrupt, as I understand it, in his solicitor’s custody, as it were, on his behalf ‑ ‑ ‑
GUMMOW J: As a stakeholder of some sort.
MR COLES: ‑ ‑ ‑ I expect, your Honour, as part of an undertaking that they would be kept safe pending the proceedings. That is as I understand it, your Honour, and Mr Street seems to confirm that. Your Honours, if your Honours were minded to grant special leave, although we have, of course, at this stage before the Court no formal application for expedition, we would wish to bring to your Honours’ attention the fact that this matter is perceived as of some importance by the Insolvency Trustee Service of Australia and, no doubt, has ramifications, implications and immediate operational consequences on other administrations that are pending throughout the nation at the time. I do not stress that as a reason for overemphasising the importance of the case, but the pendency of your Honours’ consideration of the matter will undoubtedly have an impact ‑ ‑ ‑
KIRBY J: We are very helpful when things are really urgent.
MR COLES: In other words, your Honour, it would be helpful if your Honours could appoint a relatively prompt ‑ ‑ ‑
KIRBY J: You could not have a more helpful Court than we are, in that respect.
MR COLES: I have no further submissions. I see the time, your Honours, has expired.
McHUGH J: Yes, Mr Street.
MR STREET: If the Court pleases. Your Honours, in answer to the question your Honour Justice Kirby asked about what did the Full Court say, in paragraph 6 of the judgment in the material I handed up to your Honours, they identified the submission made by me that there are matters of public importance and that was a proposition that they expressly indicated that they accepted. Your Honours, so far as the question of the English ‑ ‑ ‑
KIRBY J: It is really a trifle. We have to judge that. They were merely protecting the utility of the proceedings.
MR STREET: Quite, your Honours. So far as the English cases that were referred to by my learned friend, the 1985 Insolvency Act in England has derivative use provisions. There are no derivative use provisions in the present case to protect or maintain the privilege against self‑incrimination. The consequence of the examination, which is the first subject matter, and questions that are sought to be asked go to the very heart of the potential criminal proceedings.
Your Honour Justice Gummow identified the orders at 107. There are three different subject matters of orders that are sought to be made the subject of special leave and, in answer to your Honour’s question, there had been a substantive application in which declarations were sought and injunctions and they reflect the orders that we are finally seeking, but if your Honours go to the material at page 107 ‑ ‑ ‑
GUMMOW J: I would never make a declaration in terms of 2(b), Mr Street, were I still on the Federal Court, “a claim of privilege against self‑incrimination in respect of the documents”.
MR STREET: Your Honour, to the extent that there may be matters of language, I guess at the time ‑ ‑ ‑
GUMMOW J: It is not a matter of language.
MR STREET: Your Honour, at the time that was formulated a judgment had just been delivered and the demand had been made for delivery of the documents. But, your Honours, can I just identify, paragraphs (a) to (c) on 107 to 108 relate to the documents and the issues raised under section 77 in substance. The examination issue, of itself, that is, (11AA), is raised by paragraph (d) and then (e) raises – there is a power under subsection (1)(b) to acquire production of documents. It is not in the same terms as (11AA). We say it plainly provides no power to compel production. It is not expressed to do so and it could not meet the relevant test in respect of plain and unambiguous language. On page 108 ‑ ‑ ‑
GUMMOW J: Wait a minute, 81(1B) is talking about a summons to produce, is it not?
MR STREET: Yes, it is, your Honour.
GUMMOW J: Yes, that is right.
MR STREET: But again, your Honour, in contradistinction ‑ ‑ ‑
GUMMOW J: Just slow down, Mr Street. You cannot get away with saying 40 minutes worth in 20 minutes by talking twice as fast, as far as I am concerned.
MR STREET: I apologise, your Honour.
GUMMOW J: Now, 81(1B) says:
A summons . . . may require the person to produce at the examination books . . . that:
(a) are in the possession –
Now, do you say the privilege applies at that stage?
MR STREET: Yes, your Honour, and we say that there is no ‑ ‑ ‑
GUMMOW J: Before anything is done with them?
MR STREET: In relation to that, we say ‑ ‑ ‑
GUMMOW J: Before any questions are asked in relation to them?
MR STREET: Your Honour, in relation to the questions that can be asked, they are questions that might be peripheral, ones which are unlikely to give rise to self‑incrimination. What we say that has been addressed by section 81(11AA) is only a likelihood that raises no higher than “might”.
McHUGH J: In Pyneboard section 155 of the Trade Practices Act was in exactly the same terms, “might”, and the statement of principle by the Court was in terms of “might”.
MR STREET: But not, your Honour, with the word “merely”. “Merely” here, “merely might”, and “merely” in that regard is supported by an explanatory memorandum that says restriction. Your Honour, the intention to abrogate or curtail. No intention to abrogate. It might be an intention to curtail. It is an intention in that regard that does not rise ‑ ‑ ‑
GUMMOW J: It says “merely because might”.
MR STREET: And the “merely” is not in the statute that your Honour Justice McHugh referred to. The other question is at 108, your Honours, that I ‑ ‑ ‑
GUMMOW J: But “might” was and the debate was about “might” and “would”. You will not get away from us by slipping and sliding around, Mr Street.
MR STREET: Your Honour, we respectfully submit that relevantly “would” has not been the subject of abrogation. It has been the subject of restriction and to the extent relevant, (11AA) recognises that. Your Honours, the other questions that we sought to identify in (f) and (g) on page 108 are the section 128 issues and again, we maintain that by reason of both the proper construction of proceedings in the Evidence Act and the reference to section 306A that such proceedings are ones which that statute would apply to and it is of importance in relation to those examinations given the questions that will be asked.
Your Honours, the potential remedy of saying, well, an objection can be taken at the time of asking the questions was the very type of vice touched upon in Hamilton v Oades ‑ ‑ ‑
GUMMOW J: What did Justice Allsop say about the relationship between the Evidence Act and the Bankruptcy Act ‑ ‑ ‑
MR STREET: His Honour found that, in essence, the examinations were not proceedings within the meaning of the Evidence Act and for the reasons that I have sought to put before, we say that must be right. If your Honours please. If I could add one matter, your Honours, the physical capacity was referred to at page 87.
McHUGH J: Yes, the Court will adjourn for a short time.
AT 3.48 PM SHORT ADJOURNMENT
UPON RESUMING AT 3.55 PM:
McHUGH J: The majority of the Court is of the opinion that there is no reason to doubt the correctness of the judgment of the Full Court in this matter. Accordingly, special leave to appeal is refused with costs.
AT 3.55 PM THE MATTER WAS CONCLUDED
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