Hillier v Martin (No 10)

Case [2022] FCA 166

FEDERAL COURT OF AUSTRALIA

Hillier v Martin (No 10) [2022] FCA 166

File number(s): SAD 113 of 2020
Judgment of: ANDERSON J
Date of judgment: 3 March 2022
Catchwords: PRIVILEGE – claim by the First Respondent to the substantive proceeding, objecting to or seeking dispensation from compliance with discovery obligations due to privilege against self-incrimination – where confidential affidavits sworn setting out objections to production of documents – whether a real and appreciable risk of prosecution – where there is no real and appreciable risk of prosecution – privilege against self-incrimination not made out
Legislation: Federal Court of Australia Act 1976 (Cth)
Cases cited:

Deputy Commissioner of Taxation v Shi [2021] HCA 22; 392 ALR 1

Hillier v Martin (No 4) [2021] FCA 710

Martin v Hillier (No 2) [2021] FCA 958

Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; 373 ALR 624; 140 ACSR 340

Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328

Rank Film Distributors Ltd v Video Information Centre [1982] AC 380

Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547

Sorby v Commonwealth (1983) 152 CLR 281
Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 22
Date of hearing: 3 March 2022
Counsel for the Applicant: Mr R Whitington QC with Ms H Doyle
Solicitor for the Applicant: Sykes Bidstrup
Counsel for the First Respondent: Mr S Ower SC
Solicitor for the First Respondent: Norman Waterhouse
Counsel for the Second Respondent: The Second Respondent did not appear

 

ORDERS

SAD 113 of 2020
BETWEEN:

JAMES HILLIER

Applicant
AND:

VICTORIA MARTIN

First Respondent

NORDBURGER OPERATIONS PTY LTD
Second Respondent

ERIK VARI PTY LTD
Third Respondent

ORDER MADE BY:

ANDERSON J

DATE OF ORDER:

3 MARCH 2022

THE COURT ORDERS THAT:

1.The First Respondent’s claim of privilege against self-incrimination be dismissed.

2.The Applicant’s application to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process is dismissed with no order as to costs.

3.The Applicant’s application to appoint a receiver to the Second Respondent is dismissed with no order as to costs.

4.On or before 9 March 2022, the First Respondent is to produce for inspection the Xero database, in its entirety, by way of electronic access to a read only version of the documents, such access is to be facilitated by the provision of log in access to software that facilitates readable access to the materials.

5.The First Respondent pay the Applicant’s costs in relation to the privilege against self-incrimination application on a lump sum basis to be determined by a Registrar of the Court, unless agreed.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

ANDERSON J:

  1. This matter has a long-drawn-out and tortured history, with 11 applications made to this Court.

  2. On 6 August 2021, I heard an application brought by Ms Victoria Martin (the First…

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Details
AGLC
Hillier v Martin (No 10) [2022] FCA 166
Case
[2022] FCA 166
Decision Date

CaseChat Overview and Summary

The matter of Hillier v Martin (No 10) involved the Applicant seeking to compel the First Respondent to produce the Xero database and for a receiver to be appointed to facilitate such production, while the First Respondent claimed privilege against self-incrimination. The case was heard in the Federal Court of Australia, where the Applicant sought to strike out the First Respondent's claim to privilege as an abuse of process. The First Respondent had provided confidential affidavits in support of her claim of privilege against self-incrimination. The central legal issues before the court were whether the First Respondent had demonstrated a real and appreciable risk of prosecution if the Xero database was disclosed, and if the privilege against self-incrimination could be invoked in this instance.

The court examined the confidential affidavits provided by the First Respondent and concluded that there was no real and appreciable risk of prosecution if the Xero database was disclosed. The court found that the financial records contained in the database were not inherently incriminating, and there was no evidence of related civil or criminal proceedings, nor any indication of interest from prosecutorial authorities. The court emphasised that the burden of proof lay with the First Respondent to establish the likelihood of prosecution, which she had failed to do. Consequently, the court dismissed the First Respondent's claim to privilege against self-incrimination. Additionally, the court rejected the Applicant's applications to strike out the claim as an abuse of process and to appoint a receiver to the Second Respondent.

In summary, the court ruled that the First Respondent's claim of privilege against self-incrimination was dismissed, and ordered the production of the Xero database by the First Respondent. The Applicant's applications to strike out the claim as an abuse of process and to appoint a receiver were also dismissed. The First Respondent was ordered to pay the Applicant's costs relating to the privilege application. The specific orders included the production of the Xero database by 9 March 2022 and the determination of costs by a Registrar of the Court unless otherwise agreed.

Orders

Orders of the court

1. The First Respondent’s claim of privilege against self-incrimination be dismissed.

2. The Applicant’s application to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process is dismissed with no order as to costs.

3. The Applicant’s application to appoint a receiver to the Second Respondent is dismissed with no order as to costs.

4. On or before 9 March 2022, the First Respondent is to produce for inspection the Xero database, in its entirety, by way of electronic access to a read only version of the documents, such access is to be facilitated by the provision of log in access to software that facilitates readable access to the materials.

5. The First Respondent pay the Applicant’s costs in relation to the privilege against self-incrimination application on a lump sum basis to be determined by a Registrar of the Court, unless agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The Applicant made an oral application that the First Respondent’s claim to privilege against self-incrimination be struck out as an abuse of process, alternatively, the Applicant made an oral application that the Second Respondent, as the sole trustee of the Nordburger Holdings Trust produce the Xero database and that a receiver be appointed to facilitate such production.BACKGROUND On 24 February 2022, the parties appeared before me. During the hearing, counsel for the Applicant, Mr Whitington QC, put forward a compromise in order to resolve this dispute in a reasonable and efficient manner. I adjourned the hearing to 3 March 2022, to enable the parties to reach a sensible compromise. Unfortunately such a compromise was not reached. By way of affidavit dated 1 March 2022, the solicitor for the Applicant, Mr Gene Sykes Bidstrup (Mr Bidstrup) deposed to the events that followed the 24 February 2022 hearing, which I outline below. Shortly after the hearing on 24 February 2022, Mr Bidstrup sent an email to the First Respondents' solicitor Mr Stephen Williams (Mr Williams). In that email, Mr Bidstrup proffered two undertakings to the First Respondent in relation to the confidential affidavits and the Xero database (undertakings) which the Applicant says, if accepted, would have:(a)provided a practical resolution to the question of production whilst protecting the First Respondent's claim to privilege against self-incrimination;(b)allowed the Applicant access to the affidavit material before the Court for the purpose of enabling the Applicant to address the Court in a fair and informed way on the First Respondent’s claim to privilege against self-incrimination; and(c)allowed the parties to progress the matter to trial in a manner consistent with their obligations under s 37M and s 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act). By letter dated 25 February 2022, Mr Bidstrup proffered the undertakings to Mr Williams for a second time and, having not heard from the First Respondent’s solicitors since the hearing, sought an urgent indication from Mr Williams as to whether the undertakings were accepted. By letter dated 28 February 2022, from Mr Williams to Mr Bidstrup, Mr Williams expressly rejected the undertakings and offered no alternative proposal. Mr Williams indicated that the undertakings proffered were not accepted by the First Respondent on the basis that:(a)the Xero database is not essential to the Applicant's preparation for trial; and(b)the Xero database has no connection with the Applicant's case on liability. At this point, I should note that both of the above assertions put forward by Mr Williams are plainly incorrect, are irrelevant to this application and are also in direct conflict with the findings that this Court has made on two prior occasions. Firstly, Her Honour, Justice Charlesworth previously ruled that the documents and information contained in the Xero database are relevant to the Applicant's claim that he is entitled to a share of the profits of the alleged joint venture in Hillier v Martin (No 4) [2021] FCA 710 (Martin (No 4)) at [27]-[48].

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Further, the claimant must demonstrate in any event that there is a real and appreciable risk of a prosecution; as Gordon J’s explained at [34]:In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a ‘real and appreciable risk’ of prosecution if the relevant information is disclosed. The gist of the privilege is that disclosure of the information ‘would tend to expose the claimant to the apprehended consequence’. The ‘reasonable grounds’ enquiry requires the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person.CONSIDERATION I have considered the confidential affidavits of Ms Victoria Martin dated 28 January 2022 and Mr Stephen Williams dated 17 December 2021 (Confidential Affidavits). Having regard to the material within the Confidential Affidavits, I do not consider there to be a real and appreciable risk that disclosure of the Xero database would incriminate the First Respondent. I am also not satisfied that there is a likelihood or risk of steps being taken to prosecute the First Respondent. I am of this view for the reasons that follow:(1)The Confidential Affidavits, do not disclose any information which could reasonably lead to a “real and appreciable risk” of prosecution if the Xero database is disclosed to the Applicant. The Xero database merely contains financial records of the Nordburger business, none of which is incriminating on its face. (2)The First Respondent has not adduced any evidence of any related civil or criminal proceedings on foot or any evidence disclosing any contact from or interest of any relevant prosecutorial authority. There is no evidence that suggests that there is a possibility or likelihood of any prosecution.(3)The First Respondent has not, in my opinion, discharged the burden of proof that is required of her in order to enliven the privilege against self-incrimination in respect of the Xero database.DISPOSITION For these reasons, the First Respondent’s claim to privilege against self-incrimination must be dismissed. I will order the First Respondent to discover the Xero database in its entirety, in an unredacted form. The First Respondent will pay the costs of the application to claim privilege against self-incrimination in respect of the Xero database. The Applicant’s applications to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process is dismissed with no order as to costs. The Applicant’s application to appoint a receiver to the Second Respondent is dismissed with no order as to costs.