Pendergast & Pendergast
[2019] FamCA 136
•13 March 2019
FAMILY COURT OF AUSTRALIA
| PENDERGAST & PENDERGAST AND ORS | [2019] FamCA 136 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Where an order was made by consent that the husband provide specific financial disclosure – Where the husband seeks a certificate under s 128 of the Evidence Act 1995 (Cth) in relation to evidence in chief – Where a certificate should not issue in respect of evidence in chief unless the witness is compelled to give that evidence – Where s 128 is triggered by an objection – Where the husband deposes that he apprehends that without a certificate he would be subject to criminal penalties arising from past corporate related activities if he complies with the order made – Where the Court is satisfied that the evidence required by the order may prove that the husband has engaged in culpable conduct – Where the Court is satisfied that there are reasonable grounds for the husband to object to give that evidence – Where it is found that the husband is not required to comply with the order – Where the Court will give a certificate under s 128 if the husband nevertheless agrees to give the evidence. |
| Bankruptcy Act 1966 (Cth) ss 152, 263, 263A, 264, 264D, 265, 266, 267, 267G, 268 Corporations Act 2001 (Cth) ss 180, 181, 184, 429, 438B, 590, 1314 Crimes Act 1914 (Cth) ss 174, 176A Evidence Act 1995 (Cth) s 128 Family Law Act 1975 (Cth) ss 71, 71A, 72, 74, 75, 77, 77A, 79, 79A, 117 |
| Construction, Forestry, Mining and Energy Union (CFMEU) v Australian Building and Construction Commissioner (2018) 351 ALR 168; [2018] FCAFC 4 Cornwell v The Queen (2007) 231 CLR 260; [2007] HCA 12 Ferrall v Blyton; Attorney-General of the Commonwealth (Intervener) (2000) FLC 93-054; [2000] FamCA 1442 Field & Kingston [2018] FamCAFC 145 Song v Ying (2010) 273 ALR 213; [2010] NSWCA 237 Sorby v Commonwealth (1983) 152 CLR 281; [1983] HCA 10 |
| APPLICANT: | Mr Pendergast |
| FIRST RESPONDENT: | Ms Pendergast |
SECOND RESPONDENT: | Company B Pty Ltd |
THIRD RESPONDENT: | Mr C |
| FILE NUMBER: | PAC | 2706 | of | 2018 |
| DATE DELIVERED: | 13 March 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 22 November 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Todd |
| SOLICITOR FOR THE APPLICANT: | Ivy Law Group |
| COUNSEL FOR THE RESPONDENT: | No appearance |
| SOLICITOR FOR THE RESPONDENT: | U Lawyers |
| COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: | Mr Bagnell |
| SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: | Yeldham Price O’Brien Lusk Lawyers |
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pendergast & Pendergast and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC2706 of 2018
| Mr Pendergast |
Applicant
And
| Ms Pendergast |
Respondent
And
Company B Pty Ltd
Second Respondent
And
Mr C
Third Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for a certificate under s 128 of the Evidence Act1995 (Cth) (“the Evidence Act”) for the evidence in chief of Mr Pendergast (“the husband”) in financial proceedings he commenced against Ms Pendergast (“the wife”) and others.
The substantive proceedings are property proceedings between the husband and the wife. There are several interlocutory proceedings, including a claim by the husband for spousal maintenance. As a preliminary matter, however, the husband seeks to set aside a Financial Agreement into which he and the wife entered on 21 September 2012. He also seeks a declaration that the orders made in the Federal Court of Australia amending provisions of the Financial Agreement in terms agreed between the husband, the wife and the husband’s trustee in bankruptcy on 1 April 2014, were void ab initio. The husband has joined the second and third respondents to the proceedings by a claim for negligence and loss arising from their legal representation of him in respect of the Financial Agreement and during subsequent proceedings.
Applications
It is in that context that the husband seeks by way of interlocutory order in his Amended Initiating Application filed on 17 July 2018:
…
(3)That pursuant to s.128 of the Evidence Act 1995 (Cth) Certificates be granted to the Husband in respect of evidence to be relied upon in support of this application.
The application is not opposed. The wife neither consents to nor opposes the application. The second and third respondents consent to the application.
The Evidence of the Parties
The husband relied on:
·affidavit of the husband filed 15 June 2018; and
·affidavit of the husband filed 16 July 2018.
Background Facts
The proceedings arise from a remarkable set of facts but the detail will not aid the dealing with the present issue. The relevant chronology is as follows.
The husband and wife were married in 1986 and they separated on a final basis in 2016. . They have one child, Ms D, who was born in 1991 and lives with her mother.
Neither the husband nor the wife have repartnered.
Each of the husband and wife suffers from poor health.
The parties had some assets at the commencement of the marriage and they built up assets of significant value during the marriage.
It is the husband’s evidence that at the height of its success in 2001, a company he started, Company E Pty Ltd, turned over $23 million with operations in 65 countries and employed 100 people worldwide. He says that from 2005 to 2008 the annual sales fell from $24 million to $8 million due to intellectual property theft.
In April 2010 Company E Pty Ltd went into administration with claimed debts totalling $5.5 million, including about $4 million claimed by the Australian Taxation Office.
In 2011 a Court gave judgment against one of the husband’s companies, Company F Pty Ltd, in favour of a business associate of the husband in the sum of $2,008,574 plus costs.
On 21 September 2012 the husband and the wife executed a Financial Agreement. It is the husband’s contention that the effect of the agreement was that net matrimonial assets worth $12,806,849 were divided to the effect that he was left owing $9,167,052 while the wife was left with net assets of $19,248,095. The arithmetic does not follow but that is his evidence.
The husband was made bankrupt by a sequestration order made on 1 March 2013 by the Federal Magistrates Court.
The husband’s Statement of Affairs showed secured creditors at $3,554,301, including the wife at $2,762,191 and unsecured creditors at $6,152,895, making a total deficiency of $9,707,196.
The trustee of the husband’s bankrupt estate commenced negotiations with the wife to recover assets from her to meet the deficiency in the estate. On 17 December 2013 the trustee instituted proceedings against the wife in the Federal Court of Australia.
In 2014 orders were made by the Federal Court of Australia, by consent, in the following terms:
1.There be judgment against the first respondent in favour of the applicants in the amount of $2,025,000.00 (the “judgment sum”).
2.No interest is to accrue on the judgment sum for a period of three (3) months. Thereafter, interest will run on the judgment sum at a rate which is 1% above the prime rate set by the Reserve Bank of Australia.
3.The applicants will, upon payment of the full judgment sum, provide withdrawals of all caveats lodged by them in respect of all properties of which the first respondent is a registered proprietor.
4.Pursuant to the provisions of s 90KA(1)(a) of the Family Law Act 1975 (Cth) (“the FLA”), items 4 and 5 of the assets in Schedule B, item 1 of the liabilities listed therein, and item 13 of Schedule C to the Financial Agreement under s 90C of the FLA between the first and second respondents dated 21 September 2012 be set aside.
5.Pursuant to s 79 of the FLA, upon full payment of the judgment sum to the applicants, the second respondent and the applicants do all acts and things and execute all documents necessary to transfer to the first respondent absolutely and beneficially, the whole of the second respondent’s right title and interest in the property comprising Lots [G and H] in Deposited Plan …65, Lots [J, K, L and M] in Deposited Plan …28, [Lot N] in Deposited Plan …95, [Lot O] in DP …98 and [Lot P] in DP …99. The first respondent is to prepare the transfer and pay any fees associated with the transfer.
6.There be no order as to costs as between the applicants and the first respondent.
7.The applicants have leave to discontinue the whole of the proceedings against the second respondent and there be no order as to costs as between the applicants and the second respondent.
8.Subject to Orders 1 to 6 above, the application by the applicants against the first respondent otherwise be dismissed.
9.Leave be granted to [Mr C] of [Company B], who has been retained by the second respondent, [Mr Pendergast], to file in Court a Notice of Appearance on behalf of [Mr Pendergast].
10.Leave be granted to the first respondent to file in Court a Written Submission in aid of the parties’ application that the Court make orders by consent.
THE COURT NOTES THAT:
11.The applicants, in their capacity as trustees of the estate of [Mr Pendergast], support the submissions made on behalf of the first respondent.
12.The whole of the proceedings have been settled upon the terms set out in Heads of Agreement, a true copy of which is annexed hereto and marked with the letter “A”.
13.The applicants read the affidavit of [Mr Q] sworn on 13 December 2013 and tender Exhibit “AA–1” to the said affidavit, which exhibit will be admitted and marked as “Exhibit AA-1”.
On 3 March 2016 the husband was discharged from bankruptcy.
On 15 June 2018 the husband commenced these proceedings in this Court at Parramatta. The husband sought interlocutory orders in his Initiating Application including the application currently before this Court.
On 21 September 2018 interlocutory orders were made by the Honourable Justice Foster, by consent in the following terms:
1.That these proceedings be transferred to the Sydney Registry of the Family Court of Australia and to be listed for further case management of this matter.
2.That the Applicant Husband file and serve submissions in support of the application for a s 128 Evidence Act (Cth) Certificate within 21 days.
3.That the First Respondent neither consents nor opposes the application by the Applicant Husband for a s 128 Evidence Act (Cth) Certificate.
4.That within seven (7) days of the determination of s 128 Evidence Act (Cth) the Applicant Husband will file and serve all affidavit, applications and material in support of his spouse maintenance application and interim costs application filed on 17 July 2018.
5.That thereafter the First Respondent Wife will file and serve all affidavit, response and material in response to the spouse maintenance application and interim costs application within 28 days.
6.That the First Respondent file and serve written submissions on the issue of their contention that the Family Court of Australia has no jurisdiction to set aside the Binding Financial Agreement or hear any application in relation to Spouse Maintenance and interim costs within 28 days of any determination of the s 128 certificate.
7.That the Applicant Husband and Second Respondent file and serve any response to the First Respondent’s submissions in relation to the issue of jurisdiction within 21 days after receiving submissions in order 6.
8.The Applicant Husband file and serve a statement of claim, pleading and particularising the material facts on which he relies in his claim against the Second Respondent, on or before 26 September 2018.
9.The Second Respondent’s Application in a Case dated 30 August 2018 be adjourned pending the determination of any strike-out or other application by the First Respondent.
10.The Second Respondent be relieved from filing and serving any Response or Defence pending the determination of its Application in a Case.
IT IS FURTHER ORDERED THAT
11.The solicitor for the Applicant husband is to forward an electronic typescript of the document marked “A” as amended to the Court within two business days.
12.These proceedings are listed before the Honourable Justice Loughnan for hearing case management at 10.00am on Tuesday, 30 October 2018.
On 30 October 2018 orders were made for the husband’s application for a certificate to be heard on 22 November 2018. On 22 November 2018 the husband and the second and third respondents were represented but there was no appearance for the wife and she was excused. The husband’s counsel relied on written submissions and spoke to them. At the conclusion of oral submissions judgment was reserved and the parties were excused on delivery of judgment.
The Legislation
Section 128 of the Evidence Act provides:
128 Privilege in respect of self‑incrimination in other proceedings
(1) This section applies if a witness objects to giving particular evidence, or evidence on a particular matter, on the ground that the evidence may tend to prove that the witness:
(a) has committed an offence against or arising under an Australian law or a law of a foreign country; or
(b) is liable to a civil penalty.
(2) The court must determine whether or not there are reasonable grounds for the objection.
(3) Subject to subsection (4), if the court determines that there are reasonable grounds for the objection, the court is not to require the witness to give the evidence, and is to inform the witness:
(a) that the witness need not give the evidence unless required by the court to do so under subsection (4); and
(b) that the court will give a certificate under this section if:
(i) the witness willingly gives the evidence without being required to do so under subsection (4); or
(ii) the witness gives the evidence after being required to do so under subsection (4); and
(c) of the effect of such a certificate.
(4) The court may require the witness to give the evidence if the court is satisfied that:
(a) the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country; and
(b) the interests of justice require that the witness give the evidence.
(5) If the witness either willingly gives the evidence without being required to do so under subsection (4), or gives it after being required to do so under that subsection, the court must cause the witness to be given a certificate under this section in respect of the evidence.
(6) The court is also to cause a witness to be given a certificate under this section if:
(a) the objection has been overruled; and
(b) after the evidence has been given, the court finds that there were reasonable grounds for the objection.
(7) In any proceeding in an Australian court:
(a) evidence given by a person in respect of which a certificate under this section has been given; and
(b) evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence;
cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.
(8) Subsection (7) has effect despite any challenge, review, quashing or calling into question on any ground of the decision to give, or the validity of, the certificate concerned.
(9) If a defendant in a criminal proceeding for an offence is given a certificate under this section, subsection (7) does not apply in a proceeding that is a retrial of the defendant for the same offence or a trial of the defendant for an offence arising out of the same facts that gave rise to that offence.
(10) In a criminal proceeding, this section does not apply in relation to the giving of evidence by a defendant, being evidence that the defendant:
(a) did an act the doing of which is a fact in issue; or
(b) had a state of mind the existence of which is a fact in issue.
(11) A reference in this section to doing an act includes a reference to failing to act.
(12) If a person has been given a certificate under a prescribed State or Territory provision in respect of evidence given by the person in a proceeding in a State or Territory court, the certificate has the same effect, in a proceeding to which this subsection applies, as if it had been given under this section.
(13) The following are prescribed State or Territory provisions for the purposes of subsection (12):
(a) section 128 of the Evidence Act 1995 of New South Wales;
(b) a provision of a law of a State or Territory declared by the regulations to be a prescribed State or Territory provision for the purposes of subsection (12).
(14) Subsection (12) applies to:
(a) a proceeding in relation to which this Act applies because of section 4; and
(b) a proceeding for an offence against a law of the Commonwealth or for the recovery of a civil penalty under a law of the Commonwealth, other than a proceeding referred to in paragraph (a).
Note 1: Bodies corporate cannot claim this privilege: see section 187.
Note 2:Clause 3 of Part 2 of the Dictionary sets out what is a civil penalty.
Note 4:Subsections (8) and (9) were inserted as a response to the decision of the High Court of Australia in Cornwell v The Queen [2007] HCA 12 (22 March 2007).
On 7 August 2018 the decision of the Full Court of this Court in Field & Kingston [2018] FamCAFC 145 (“Field & Kingston”) was published. In Field & Kingston the Full Court determined an appeal against the dismissal of an application that a certificate be granted to a party pursuant to s 128 of the Evidence Act for the proposed evidence in chief of that party. In summary, and after considering various authorities, the Full Court determined that a certificate will not normally be available in respect of the evidence in chief of a party as there is usually no requirement or compulsion to give the evidence in question. The Court found that without a requirement or compulsion there can be no valid objection to giving the evidence. It is an objection that triggers s 128 of the Evidence Act.
It was argued before the Full Court that the obligations in family law proceedings of full disclosure, and the rules of court reinforcing and reiterating those obligations, constituted a level of compulsion that could support a valid objection against self-incrimination. That argument was rejected by the Full Court.
The Full Court referred to a decision in Ferrall v Blyton; Attorney-General of the Commonwealth (Intervener) (2000) FLC 93-054 (“Ferrall v Blyton”) in which an earlier Full Court had approved of the granting of a certificate under s 128 for the evidence in chief of a party. The later Full Court held that the earlier decision was incorrect and should no longer be followed. It also noted that the question of “compulsion” to give the evidence in question had not been raised in argument and had not been considered by the earlier Full Court. As was noted by the Full Court in Field & Kingston, in Construction, Forestry, Mining and Energy Union (CFMEU) v Australian Building and Construction Commissioner (2018) 351 ALR 168, the Full Court of the Federal Court of Australia formed a similar view about the conclusion reached in Ferrall v Blyton.
In Construction, Forestry, Mining and Energy Union (CFMEU) v Australian Building and Construction Commissioner (2018) 351 ALR 168 Bromwich J, with whom Kenny and Tracey JJ agreed, discussed, among other authorities, the decision of Song v Ying (2010) 273 ALR 213 (“Song v Ying”) at 186 as follows:
Song
[55] In Song, the New South Wales Court of Appeal dismissed an appeal from a civil trial judge in equity, who had refused an application to grant a s 128 certificate to a plaintiff for the purposes of giving particular evidence in chief. Hodgson JA (with whom Giles and Basten JJA agreed), prior to considering Ferrall and Cornwell in some detail, observed at [20]:
Plainly, in my opinion, if a witness gives evidence in chief because actually compelled to do so (by subpoena and threat of imprisonment), or because of the availability of such compulsion if he or she does not do so, there is no reason why that witness may not object to giving evidence in chief on the ground that that evidence may tend to incriminate. The question in my opinion is not whether the evidence is given in chief or in cross-examination, but rather whether an objection under s 128 is limited to an objection to giving evidence which the witness would otherwise be compellable to give.
[56] At [22], Hodgson JA agreed with the reasoning in Ferrall to the effect that the availability of s 128 was not confined to questions in cross-examination. However, his Honour considered the reasons of the Full Court of the Family Court to be flawed because they did not “advert at all to the question of whether the witness was otherwise compellable to give the evidence objected to”. That observation is undoubtedly correct and that criticism should be adopted. His Honour then quoted Cornwell from [106] to [113], made some further contextual comments and said the following:
24It is true that in par [112] the High Court focused on the distinction between examination in chief and cross-examination; but that was in a context of evidence being given by a party to the case, namely the accused. When a witness is a party to the case, giving evidence in chief pursuant to questions asked by the witness’ own counsel, there would rarely, if ever, be a question that the evidence in chief is given under compulsion or because of liability to compulsion. I do not understand the High Court’s reasons to be authority for restricting s 128 to cross-examination.
25In circumstances where there is conflict between a decision of the Full Court of the Family Court and dicta (albeit tentative dicta) of the High Court, I think it is appropriate for this Court simply to reach its own view, while paying regard to relevant persuasive authority.
26In my opinion, it is appropriate to construe s 128 against a background of the common law, where privilege against self-incrimination was relevantly a privilege against being compelled to give evidence that might tend to incriminate; and also against a statutory framework in which witnesses are generally compellable to give evidence. A party giving evidence in chief, in response to questions from that party’s own legal representative, is not generally giving evidence which that party is, in any real sense, compellable to give: unless called by another party and asked questions in chief by that other party, a party’s evidence in chief is given entirely at the choice of that party and is not evidence that the party is compellable to give at the instance of anyone else. It is true that a party’s legal representative can ask questions in chief without specific instructions to ask them; but if the party instructed the representative to withdraw such a question, there would in my opinion be no possibility of the witness being compelled to answer the question, at least unless it was pressed by another party or the judge, in which case no doubt s 128 could apply.
27In all cases apart from a party giving evidence in chief or re-examination in response to questions from the party’s own legal representative, witnesses are compellable to give evidence either at the instance of the party calling them, or the party directing questions in cross-examination, or the judge (if the judge asks questions). It is compellability of this nature that gives sense to the word “objects” in s 128(1) and makes sense of the word “require” in s 128(4). In my opinion, such motivation as a defendant may have to give evidence to avoid having a judgment entered against him or her does not amount to relevant compellability.
28In my opinion, having regard to the wording of s 128 and the scope of the common law privilege which it displaced, it is not the case that a party to proceedings who is also a witness, giving evidence in chief in response to questions from the party’s own legal representative, and who wishes to give that evidence but is not willing to do so except under the protection of a s 128 certificate, “objects” to giving that evidence within the meaning of s 128(1). This is not because the witness subjectively wishes to give the evidence, but rather because there is no element of compulsion or potential compulsion which makes the expression “objects” apposite.
[57] There is some additional support for the conclusions reached by Hodgson JA to be derived from the primary judge in Ying v Song [2009] NSWSC 1344. Ward J, as the Chief Judge in Equity then was, helpfully observed:
42Under the common law, a person who, without objection, gave self-incriminating evidence was not protected from the use of that evidence in subsequent proceedings, whereas a person who, after objection, was wrongly compelled to give self-incriminating evidence was protected from the use of that evidence in subsequent proceedings. As noted by Gleeson CJ and Heydon J during argument in Cornwell, the construction for which the defendants contend in this case would effect a radical alteration of the common law in circumstances where such a change has been contemplated in none of the relevant law reform reports leading to the enactment and amendment of the uniform evidence laws …
GLEESON CJ: You may be right about that, but if you are right it means, does it not, that this legislation had a very far-reaching purpose and made a very far-reaching change to the law. It conferred upon people a right to give evidence to their own advantage of criminal conduct in which they had engaged and immunised them against the consequences of that.
MR GAME: Yes, it did that because it put all parties in the same positions as witnesses and the only stopgap was section 128(8). Yes, that is the effect of this legislation —
HEYDON J: There is not a word to that effect in the two Law Reform Commission reports.
Discussion
Thus the authorities are against granting a certificate in respect of the evidence in chief of a party unless the party is compelled to give that evidence. The decision of an earlier Full Court of this Court in Ferrall v Blyton is no longer good law.
Section 128 is triggered by an objection. A valid objection can only be made where there is a compulsion to provide evidence which may tend to incriminate the person compelled. The bare requirement of full and frank disclosure in family law proceedings is not sufficient compulsion to trigger a valid objection. It is submitted on behalf of the husband that the orders of 21 September 2018 compel him to provide evidence which may tend to incriminate and give him a proper basis for objecting to give that evidence without the protection of a certificate.
It is notable that the orders of 21 September 2018 were made with the husband’s consent.
Given that the orders of 21 September 2018 were made at the husband’s request, the words of Gleeson CJ from Cornwell v The Queen (2007) 231 CLR 260 as recorded in Construction, Forestry, Mining and Energy Union (CFMEU) v Australian Building and Construction Commissioner (2018) 351 ALR 168 are apposite. The husband has conferred on himself the right to give evidence to his own advantage of his criminal conduct and seeks to immunise himself against the consequences of that conduct.
There is no question in my mind that the orders of 21 September 2018 compel the husband to provide evidence. The terms of the orders reveal that the Court was alive to the husband’s claim for a certificate under s 128. There is no challenge to the order of 21 September 2018 and, in any event, being the order of a Superior Court of Record, the order stands unless varied or set aside. To repeat the words of Hodgson JA in Song v Ying at 221:
[26]…A party giving evidence-in-chief, in response to questions from that party’s own legal representative, is not generally giving evidence which that party is, in any real sense, compellable to give: unless called by another party and asked questions in chief by that other party, a party’s evidence-in-chief is given entirely at the choice of that party and is not evidence that the party is compellable to give at the instance of anyone else. It is true that a party’s legal representative can ask questions in chief without specific instructions to ask them; but if the party instructed the representative to withdraw such a question, there would in my opinion be no possibility of the witness being compelled to answer the question, at least unless it was pressed by another party or the judge, in which case no doubt s 128 could apply.
(emphasis added)
The question becomes – does the husband have reasonable grounds for an objection?
The order in question is order 4 of 21 September 2018 which provides as follows:
4.That within seven (7) days of the determination of s 128 Evidence Act (Cth) the Applicant Husband will file and serve all affidavit, applications and material in support of his spouse maintenance application and interim costs application filed on 17 July 2018.
At paragraph 5 of his affidavit filed 16 July 2018 the husband says that the s 128 certificate he seeks “will cover” the evidence contained in an Amended Financial Statement and an affidavit in support of his Application. Both these documents are yet to be filed. The husband continues at paragraph 5 of his affidavit:
I further note that such a Certificate will cover the evidence contained in the documents referred to…together with the evidence of such other affidavits I have sworn or as I may swear in these proceedings. This includes any witness affidavits filed on my behalf and any oral evidence given by me or such witnesses in the court of these proceedings, insofar as such affidavit of [sic] oral evidence relates to the issues in which the Certificate is sought.
As the Full Court identified in Field & Kingston, it is the Court’s task to assess whether “from the circumstances of the case and the nature of the evidence which the witness is called to give, that there is reasonable ground to apprehend danger to the witness from his being compelled to answer” (Sorby v Commonwealth (1983) 152 CLR 281 at 289 per Gibbs CJ).
Some evidence in relation to spouse maintenance and interim costs is set out in the husband’s affidavit of 16 July 2018. The draft certificate sought by the husband is annexure MrP1 to that affidavit. It refers to evidence in “these proceedings, brought pursuant to” a number of sections of the Family Law Act 1975 (Cth) (“the Act”) including, with potential relevance to spouse maintenance and interim costs, ss 71-77A, 79, 79A and 117.
At paragraph 20 of his affidavit the husband identifies that the evidence he seeks to give under the protection of a s 128 Certificate, includes:
a.Additional evidence in relation to real property assets held during the marriage;
b.Additional evidence in relation to valuation of real property assets held during the marriage;
c.Evidence in relation to the Binding Financial Agreement entered into between [Ms Pendergast] and I and the reasons for entering into this Agreement;
d.Evidence in relation to dealing with the Trustee in Bankruptcy and disclosures made to the Trustee;
e.Evidence as to advice received and instructions given to legal practitioners acting for [Ms Pendergast] and me;
f.Evidence of conversations between [Ms Pendergast] and I in relation to our financial affairs;
g.Evidence of conversations, correspondence and communications between [Ms Pendergast] and I and [Company R] (a company I refer to at length to in my affidavit, particularly at paragraphs 76, 118 to 138) in relation to the management of various corporate entities [Ms Pendergast] and I were associated with (and in [Ms Pendergast’s] case, still is to date, in part) and my Bankruptcy proceedings;
h.Evidence of communication from [Company R] to [Ms Pendergast] and me in relation to our financial affairs;
i.Evidence of communication, correspondence and conversations between [Ms Pendergast] and I relating to the lawyer now acting for [Ms Pendergast], [Mr S] of [U Lawyers] (“[Mr S]”) (and who from about 2008 onwards acted as lawyer at different times for my former companies such as [Company F Pty Ltd] and [Company E Ltd]) and between myself and [Ms Pendergast] and [Mr S];
j.Evidence of communication, correspondence and conversations between [Ms Pendergast]; myself; [Mr S] and [Company R], and
k.Evidence of communication, correspondence and conversations between [Ms Pendergast]; myself; [Mr S] and my former solicitor [Mr C].
On the face of it, there seems no necessary connection between any of those categories of evidence and proceedings for spousal maintenance or interim costs. However, the husband contends that the evidence referred to at paragraph 20 of his affidavit will be necessary for the Court to make just and equitable findings in the matter. Although the tasks in relation to spousal maintenance and interim costs do not necessarily require just and equitable findings, it is possible to make orders for interim costs pursuant to s 79, where that section is available, and that section does require a just and equitable outcome.
As to self-incrimination, the husband deposes that he apprehends that without the benefit of a certificate under s 128 he will be, and/or will potentially be, subject to criminal penalties arising from some of his past corporate related activities and actions and his dealings with his bankruptcy trustee, the Federal Court of Australia and the Australian Taxation Office.
In relation to his past corporate related decisions and actions the husband apprehends that he may be subject to civil and/or criminal penalties inter alia under ss 180(3), 181, 184, 429, 438B, 590 and 1314 of the Corporations Act 2001 (Cth) (“the Corporations Act”) and ss 174 and 176A of the Crimes Act 1914 (Cth). It is not apparent why the husband refers to s 180(3) of the Corporations Act. Similarly, the husband may have intended the reference to ss 174 and 176A of the Crimes Act 1914 (Cth) to be a reference to the Crimes Act 1900 (NSW). Even then it would appear that those references could only be relevant to conduct prior to 2009.
The husband asserts that the maximum penalty for some of those offences is 10 years imprisonment.
In relation to his dealings with his bankruptcy trustee the husband apprehends that he may be subject to criminal penalties under Part XIV of the Bankruptcy Act1966 (Cth) generally and that he may be subject to specific penalties inter alia, under ss 152, 263, 263A, 264, 264D, 265, 266, 267, 267G and 268 of the Bankruptcy Act 1966 (Cth). Section 264 was repealed in 2000 and it is not clear what was intended by the reference to that section by the husband.
The husband asserts that the maximum penalty for some of those offences is 13 years imprisonment.
In relation to his dealings in the Federal Court of Australia the husband apprehends that he may be subject to criminal penalties inter alia under s 35 of the Crimes Act 1914 (Cth).
The husband asserts that the maximum penalty under that section is five years imprisonment.
In relation to his dealings with the Australian Taxation Office the husband apprehends that he may be subject to criminal penalties inter alia, under ss 134 1(1), 134(2)(1) and 135(4)(3) of the Criminal Code 1995 (Cth). Presumably they should be references to mean s 134.1(1), s 134.2(1) and s 135.4(3) of the Criminal Code 1995 (Cth).
The husband asserts that the maximum penalty for some of those offences is 10 years imprisonment.
In relation to his dealings with the Australian Taxation Office the husband apprehends that he may be subject to criminal penalties under Part 3 Division 2 of the Taxation Administration Act 1953 (Cth).
The husband asserts that the maximum penalty for some of those offences is two years imprisonment.
It would defeat the protections afforded against self-incrimination if the person objecting was required, in aid of the objection, to give the evidence that could incriminate him or her. I am left with only the husband’s representations about some of the background facts. Of course the husband is in an ideal position to know whether he has done something that, for example, would represent a breach of the obligations that fell to him as a result of his bankruptcy. He would know, for example, if he had:
(a)failed to give assistance in the administration of his bankrupt estate;
(b)concealed property with intent to defraud a creditor;
(c)sworn false affidavits in his bankruptcy;
(d)prevaricated or was evasive in a public examination;
(e)failed to disclose relevant property;
(f)disposed of or charged relevant property;
(g)gave a false declaration; and/or
(h)was evasive in giving evidence in his bankruptcy.
These are not matters asserted against him in these proceedings by another party, they are his own representations.
As to the circumstances of the case, the husband’s description of the import of the Financial Agreement entered into by him and the wife in 2012 is at least suggestive of an attempt to defeat creditors. That suggestion is reinforced by the changes subsequently made to that Financial Agreement, by agreement, in proceedings instituted by the Trustee in Bankruptcy before the Federal Court of Australia. The position is less clear about the prejudice the husband might face under the corporations law or the commonwealth criminal law, because there is little relevant detail in the evidence provided by the husband to date. But again, it is significant that the husband apprehends that his conduct would or might fall within the penalty provisions of that law. Again, these matters are not simply alleged against him, they apparently arise from his own knowledge.
I am satisfied that there is a real and appreciable risk that the evidence required by order 4 made on 21 September 2018 may tend to prove that the husband has engaged in culpable conduct. Therefore, I am satisfied that there are reasonable grounds for the husband to object to give that evidence. The husband is therefore not required to comply with that order.
Section 128(3) of the Evidence Act requires that the husband be provided with the following information:
(a)the husband need not give the evidence required of him by order 4 made on 21 September 2018;
(b)the Court will give a certificate under s 128 if the husband nevertheless willingly gives the evidence;
(c)the effect of the certificate is that:
(i)in any proceeding in an Australian court:
(a)evidence given by a person in respect of which a certificate under s 128 has been given; and
(b)evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence;
cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.
(ii)paragraph (i) has effect despite any challenge, review, quashing or calling into question on any ground of the decision to give, or the validity of, the certificate concerned.
The matter will be listed on a date notified to the parties for publication of these reasons and making consequential orders.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 13 March 2019.
Associate:
Date: 13 March 2019
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