R v Ronen

[2004] NSWCCA 67

Reported Decision: 62 NSWLR 707

New South Wales

Court of Criminal Appeal

CITATION:	REGINA v RONEN & ORS [2004] NSWCCA 67
HEARING DATE(S):	11 March 2004
JUDGMENT DATE:	22 March 2004
JUDGMENT OF:	Spigelman CJ at 1; Mason P at 91; Kirby J at 116
DECISION:	Appeal dismissed
CATCHWORDS:	Whether the proper officer of a company can claim privilege against self-incrimination where a subpoena duces tecum is served on the corporation - meaning of "proper officer" - whether the "proper office" requires the express authority of the company to answer the subpoena - whether it is oppressive on the accused or an abuse of process for a corporation to comply with a subpoena where the accused is the sole director and secretary of the corporation - whether the accused is being asked to assist in the preparation of the Crown case - whether the process of gathering documents is an exercise of executive or judicial power.
LEGISLATION CITED:	Crimes Act 1914 Criminal Appeal Act 1912 Supreme Court Rules 1970
CASES CITED:	AG v North Metropolitan Tramways Co (1892) 3 Ch 70 Attorney General of Tuvalu v Philatelic Distribution Corp Ltd [1990] 2 All ER 216 Azzopardi v The Queen (2001) 205 CLR 50 Boilermakers Case (1956) 94 CLR 254 BPTC Limited (in liq) (1993) 29 NSWLR 713 Braswell v United States 487 US 99 (1988) Carter v Northmore Hale Davey & Leake (195) 183 CLR 121 Commercial Bank of Australia v Whinfield (120) CLR 225 Danieletto v Kherra (1995) 35 NSWLR 684 Dyers v The Queen (2002) 210 CLR 285 Eccles & Co v Louisville and Nashville Railway Company (1912) 1 KB 135 Environment Protection Authority v Caltex Refining Co Pty Limited (1999) 178 CLR 477 In re Grand Jury Subpoenas dated October 22 November 1991 and November 1 1991 959 F.2d 1158 (2d Cl C1992) In re Two Grand Jury Subpoenae Duces Tecum 769 F 2d 52 (1985) Klein v Bell (195) 2 DLR 513 MacDonald v Australian Securities Commission (No 2) (1994) 48 FCR 210 Mosser v PGH Ceramics [1964] 82 WN (Pt 1) (NSW) 147 Old Welshman's Reef Gold Mining Co v Welshman's Gold Mining Co (1884) 14 VLR 253 Penn-Texas Corporation v Mural Anstalt (1964) 2 QB 647 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 R v Scott (1990) 20 NSWLR 72 R v Soma (2003) 212 CLR 299 Re Lindsay Toole & Co (Wool) Pty Ltd (1966) 2 NSWLR 120 Registrar of the Supreme Court, Equity Dividion v McPherson [1980] 1 NSWLR 688 Rochfort v Trade Practices Commission (1982) 153 CLR 134 RPS v The Queen (2000) 199 CLR 620 Smith Kline & French Laboratoires Ltd v Inter-Continental Pharmaceutical (Australia) Pty Ltd (1969) 43 ALJR 308 South Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd (1984) 1 NSWLR 711 Tannetta Walker & Co v Newport Duck Co (1890) 6 TLR 326 The Lady Gwendolen (1965) P 294 The Queen v Davison (1954) 90 CLR 353 Trade Practices Commission v Arnotts Ltd (1990) ATPR 41-009 Two Grand Jury Subpoenae Duces Tecum 793 F 2d 69 (1986) United States v Barth 745 F 2d 184 United States v Kordel 397 US 1, 90 S.Ct 763 (1969) United States v Mosely 832 F. Supp. 56 (1993) United States v Stone 976 F.2d 909 (1992) cert. Denied, 507 US 1029 113 S.Ct 1843 123 L.Ed 2d 467 (1993) United States v White 322 US 694 (1944) Welsbach Incandescent Gas Lighting Wilson v Church (1878) Ch 555 Wilson v United States 221 US 361 (1911)
PARTIES :	Regina Ida Ronen Nitzan Ronen Izhar Ronen
FILE NUMBER(S):	CCA 60093/04; 60094/04; 60095/04
COUNSEL:	R Richter QC and N Rosenbaum (Ida Ronen) I Hill QC and E Power (Nitzan Ronen) R. Van de Wiel QC and P Jones (Izhar Ronen) D. Hammerschlag SC (Crown)
SOLICITORS:	Watsons Solicitors (Ida Ronen) Charlesworth Josem Partners (Nitzan Ronen) Woodhams O'Keefe (Izhar Ronen) P Musgrave (Crown) T Hartman (Companies)

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	70032/03; 70222/03; 70223/03
LOWER COURT JUDICIAL OFFICER :	Whealy J

- 24 -

60093/04
60094/04
60095/04

SPIGELMAN CJ
MASON P
KIRBY J

Monday 22 March 2004

REGINA v Ida RONEN

REGINA v Nitzan RONEN

REGINA v Izhar RONEN

FACTS
Each of the Appellants is charged with conspiring to defraud the Commonwealth of income tax between October 1991 and February 2001. The charges concern income derived from a number of companies, of which the Appellants (in various configurations) are the only directors and shareholders. At a preliminary hearing before Whealy J, Ms Lawler, the companies’ payroll clerk, gave evidence that, on the instructions of the Appellants, a number of employees were paid in cash for overtime and these payments were not recorded in the payroll. Miss Lawler indicated that old payroll records kept at the companies’ premises might assist in showing the frequency and extent of this practice. The Crown served four subpoenas on the companies, seeking the production of all payroll reports for the period October 1991 to February 2001. The subpoenas were each addressed to the “proper officer” of the companies involved. The Appellants sought to set aside the subpoenas on the basis that they were oppressive and an abuse of process because they required the accused, as the sole director and secretary of the company, and therefore its directing mind, to search for or direct others to search for and produce documents sought by the Crown to be used against the accused. Whealy J found against the Appellants.

HELD
A.
A subpoena addressed to “the proper officer” of a company is a subpoena to the company itself and the company must comply. [36], [95], [112], [116]

Rochfort v Trade Practices Commission (1982) 153 CLR 134 applied.
Re BPTC Ltd (1993) 29 NSWLR 713; Re Lindsay Toole & Co (Wool) Pty Ltd (1966) 2 NSWR 120 considered.

B.

The “proper officer” is the person or persons best able to obey a subpoena by ensuring the search for and retrieval of documents and answering questions, which may be asked on attendance at court. [36], [38]

C.

It is not necessary for the company to give anyone express authority to answer a subpoena. Such authority as is required is conferred as a matter of necessity on those persons in the company who can ensure that the company complies with its legal obligations. [77], [91], [116]

Rochfort v Trade Practices Commission (1982) 153 CLR 134 applied.

Eccles & Co v Louisville and Nashville Railway Company (1912) 1 KB 135 not followed.

D. (per Spigelman CJ)

A subpoena might be oppressive or an abuse of process if it required the accused to perform some act calculated to assist the preparation or presentation of the Crown case. [66], [67]

E.

Whealy J was entitled to conclude that each company can produce documents without an act on the part of an accused. [83], [84], [104], [116]

(per Mason P)

A subpoena is not an abuse of process if the Appellants need to appoint a proper officer to cause the subpoena to be answered. The corporations have independent duties to comply with the subpoenas and to identify an appropriate person to produce subpoenaed documents. [106], [109], [112]-[113]

F.

An order to produce documents for the purpose of evidence, is an exercise of judicial, not executive, power. [87], [88], [89], [91], [116]

The Queen v Davison (1954) 90 CLR 353 followed.

ORDER
Appeals dismissed.

60093/04
60094/04
60095/04

SPIGELMAN CJ
MASON P
KIRBY J

Monday 22 March 2004

REGINA v Ida RONEN

REGINA v Nitzan RONEN

REGINA v Izhar RONEN

Judgment

1 SPIGELMAN CJ: This is an appeal under s5F of the Criminal Appeal Act 1912 from an interlocutory judgment of Whealy J. His Honour dismissed an application on the part of the Appellants which sought to set aside certain subpoenas that had been served on four corporations. Each of the Appellants is charged on an indictment with two offences of conspiracy: first, an alleged conspiracy to defraud the Commonwealth, namely the Commissioner of Taxation contrary to s86A of the Crimes Act 1914 (Cth); secondly, an alleged conspiracy to commit an offence against s29D of the Crimes Act 1914 (Cth), that is to defraud the Commonwealth, contrary to s86(2) of the Crimes Act 1914 (Cth).

2 The trial is to commence shortly. Whealy J has considered a number of pre-trial matters including the subpoena issue presently before this Court.

3 The nature of the Crown case was summarised in an interlocutory judgment of Whealy J, delivered on 3 February 2004 in the following terms:

“[6] In essence, the case involves an allegation of conspiracy to defraud the Commonwealth of income tax between 1991 and February 2001, involving income generated by four retail outlets associated with the accused. In one fashion or another, each of the accused were or are directors and shareholders of a number of companies involved in the retail and wholesale clothing industry. Dolina Enterprises, Dolina Fashion Group and a joint venture (all collectively known as ‘Dolina Australia’) were involved in the manufacture and sale of garment retailing through major outlets such as Coles/Myer, David Jones and Rockmans. These sales, in the main, did not involve cash sales.
[7] However, in addition to the sale at the major outlets, Nitzan and Izhar through their companies supplied garments to four smaller retail outlets. These were managed by their mother, the accused Mrs Ida Ronen. Those outlets retailed garments to the public generally. The retail outlets were Ronen Young Fashions at 216-224 Commonwealth Street, Surry Hills; Dolina on Fovo at 17-51 Foveaux Street, Surry Hills; Fashion Bargains at 1-15 Foveaux Street, Surry Hills; and Warehouse at 132-142 Epsom Road, Rosebery. The last three businesses returned their income for income tax purposes through On Fovo Pty Limited. The income of Ronen Young Fashions was returned in the tax return of Mrs Ida Ronen.
[8] As I understand the Crown case, it is said that customers of the four retail outlets paid for the garments by cheque, EFTPOS, credit or cash. The gravamen of the offence is that Mrs Ronen, on behalf of herself and her sons, skimmed from the takings most, if not all, of the cash and diverted it to other purposes. For example, it is alleged that at the time that the skim of cash takings was brought to a halt in February 2001, only 10 percent was being banked and the remaining 90 percent was distributed directly to the Ronens.
[9] There is no reason for me at this stage to detail the way the alleged skim took place. It is the Crown case, however, that it took place at Mrs Ronen’s own premises at Thornton Street, Darling Point, and that records were kept at her apartment showing the actual takings of each retail outlet. The reduced amount of cash, together with cheques, would then be sent to be deposited at the bank through employees of the Dolina Group. The amounts returned by On Fovo Pty Limited and Mrs Ronen represented only the moneys banked and not the larger amounts of cash skimmed and kept by or on behalf of each of the accused.”

4 The Appellants sought to set aside four subpoenas addressed as follows:

· Proper officer, Dolina Enterprises Pty Limited

· The Proper officer, Dolina Fashion Group Pty Limited

· Proper officer, Dolina Australia Pty Limited

· Proper officer, On Fovo Pty Limited.

5 The subpoenas were in identical form. With respect to each of the respective companies the subpoena sought production of:

“All payroll reports for the company … for the period October 1991 to February 2001 inclusive.”

Background to the Subpoenas

6 His Honour’s judgment of 3 February 2004 to which I have referred, was concerned with an application by the Crown, for a preliminary hearing so that the Crown could examine certain witnesses it proposed to call. One of those witnesses was a Ms Jennifer Lawler. The background to this application is set out by his Honour in the following passage from his judgment of 3 February:

“[11] … she is currently a payroll clerk employed by the Dolina Australia Group. She has been since February 1994 the Group’s payroll clerk. In addition, she has had the task of recording and paying expenses and making deposits on behalf of Ronen Young Fashions and On Fovo Pty Limited.
[12] In that capacity it appears she has received instructions and directions from Mrs Ida Ronen. These directions included, following receipt of cash from Mrs Ida Ronen, the writing of bank deposit slips in a National Australia Bank deposit book. Mrs Lawler’s duties also have included from time to time entering payments and deposits for these companies into a MYOB software package.
[13] Miss Lawler provided a statement to the ACC dated 13 March 2001. This forms part of the prosecution brief. No application was made for the cross-examination of Miss Lawler at the committal which took place in March 2003. She has been subpoenaed to give evidence in the trial and is plainly, from the Crown perspective, a material witness. Between September and November 2003 the Commonwealth Director of Public Prosecutions, whom I will refer to as the CDPP, has endeavoured to confer with Miss Lawler in relation to her statement and the evidence she is likely to give at the trial. The steps taken have not been successful in securing her attendance at conference.”

7 His Honour went on to give some further details of the refusal of Ms Lawler to attend for a conference with the Office of the Commonwealth Director of Public Prosecutions. In the event, his Honour granted the Crown’s application and Ms Lawler attended for a preliminary hearing.

8 In the judgment from which this appeal is brought, his Honour outlined the events that occurred as follows:

“[2] On 5 February 2004, Miss Lawler gave evidence that there were a number of employees of the Dolina Group of companies, On Fovo and Ronen Young Fashions who were, as she described it, on the payroll. Her evidence revealed that a number of these employees were, for several years from December 1994, paid in cash for overtime and that the payments were not recorded in the payroll. She said that she received instructions to do this from Nitzan, Izhar and Mrs Ida Ronen. The practice, however, ceased in 1998 when Mr Greyling became the chief financial officer of the group.
[3] Miss Lawler said that she would prepare lists of people who needed to be paid overtime. She would give the list to Mrs Ronen who, in turn, would provide her with the equivalent amount of cash. This happened, she said, on a weekly basis.
[4] Miss Lawler was asked whether there were records that would assist her in ascertaining the number of employees in the relevant category and the frequency with which the practice was followed. She said she thought there would be old payroll records which would show who was on the payroll at the time. The overtime records were not kept and did not find their way into the records of Dolina, Ronen Young and On Fovo Fashions.
[5] Miss Lawler also referred to the 1998 payroll records which, she thought, would have given details of the overtime payments made in the period after the cash payments for overtime ceased. She thought there were payroll records for the 1999 and 2000 years as well. They were, she said, kept at the Dolina premises ‘across the road in old records’.”

9 It was after this evidence that his Honour granted leave to the Crown to serve short notice of the four subpoenas which are the subject of these proceedings. His Honour summarised the Crown case in the following terms:

“[16] The Crown position both in relation to the evidence of Miss Lawler which I have identified and the payroll records themselves is that the material is said to be relevant to the offences charged in the indictment because it tends to show that the accused had access to large sums of cash, between 1994 and 1998, which they had been able to utilise, for example, in paying cash to employees for overtime. Although these details were not apparently included in the payroll records, the records since 1998 and a comparison of those records with earlier payroll records will help identify the workers in the relevant category and, in a general sense, the extent of overtime payments during the later period.”

10 On the evidence before Whealy J the accused Izhar Ronen is the sole director and company secretary of Dolina Enterprises Pty Limited; the accused Nitzan Ronen is the sole director and company secretary of Dolina Fashion Group Pty Limited; the accused Ida Ronen is the sole director and company secretary of On Fovo Pty Limited; and the accused Nitzan and Izhar Ronen are the only directors of Dolina Australia Pty Limited, with Nitzan Ronen the secretary of that company.

11 Although the evidence as to corporate authority was limited, Whealy J proceeded on the basis (at [28]) that the submissions made to him by Mr R Richter QC (at [27]) were correct, namely that: “no other person had been authorised to speak on behalf of, or to authorise another to speak on behalf of, the recipients of the subpoenas”, other that the secretary and director of the respective corporations, each of whom is an accused.

12 In this regard his Honour made the following pertinent findings:

“[48] … this is not a case where the Court is bound to infer that there is no one in the employ of the subpoenaed companies who could not either locate or subsequently bring the documents to the Court. The position is quite to the contrary. The evidence of Ms Lawler shows that she was responsible, at least during certain periods, for the holding of the payroll records and that she knows where they are presently located.
[49] In general terms, the companies have been identified as having a reasonably considerable number of employees from time to time; and there has been identified, in addition, the existence, from time to time, of a financial controller for the Dolina group. There is ample evidence available from which the Court may infer that the company, throughout the range of its employees, has the ability to locate and produce the relevant documents in response to the subpoena. The response, however, will be a response by the company itself and the company, as I have explained, cannot claim privilege against self-incrimination for itself. Nor can it, for the reasons I have explained, claim privilege on behalf of the accused. It is not a matter for Mrs Ronen or her sons to give instructions or to issue an authorization. It is a matter for each company to fulfil its obligations in relation to the relevant subpoena.
[50] In my opinion, the issue and the call upon the subpoenas do not infringe the fundamental principles which underpin the conduct of a trial conducted according to the adversary system. I am also satisfied that the circumstances which have led to the issue of the subpoena, and to the present debate before the Court, do not amount to an abuse of process of the Court.”

13 The companies have appeared and have been separately represented.

14 Mr Terrence George Hartman swore an affidavit in which he deposes that he received instructions from Mr Christopher Watson to act on behalf of each of the four corporations served with subpoenas. Mr Watson is the solicitor for Ida Ronen. He swore an affidavit before Whealy J on behalf of his client and also as an agent representing both Nitzan Ronen and Izhar Ronen in respect to the subpoenas. Nothing appears as to the authority of Mr Watson to give instructions on behalf of the corporations. The following exchange of correspondence occurred.

15 On 27 February 2004, Mr Hartman wrote to Mr Watson, who had purported to instruct him on behalf of the companies, in the following terms:

“To enable me to comply with the subpoenae [sic] on behalf of each of the above companies please identify ‘proper officer’ in each instance and a telephone number at which I may reach such officer or alternatively identify and provide me with a phone number of a person authorised by each company to provide me and the Court with the documents referred to in a schedule to each of the four subpoenae [sic].”

16 Mr Watson replied to this letter in the following terms:

“In response to your letter of 27 February 2004, in each instance the proper officer is one of the accused in the current trial namely Ida, Nitzan and Izhar Ronen. No other proper officer has been appointed. The subpoenas are currently the subject of appeal.”

17 On 2 March 2004, Mr Hartman sent two facsimiles each of them addressed to: “The Secretary Dolina Group of Companies”.

18 In the first fax he referred to his exchange of correspondence with Mr Watson and then repeated the question he had asked of Mr Watson to the addressee.

19 In the second fax he sought more elaborate information in the following terms:

“When responding, could you please identify for each of the four named companies any person:
(a) who makes or participates in making decisions that affect the whole or a substantial part of the business of the corporation; or
(b) who has the capacity to affect significantly the corporation’s financial standing;
(c) in accordance with those instructions or wishes the director or directors of the company are accustomed to act.”

He noted that if there was no secretary of the “Dolina Group of Companies”, the letter should be treated as a request to the secretary of each of the four companies.

20 On 2 March 2004 Mr Watson purported to respond to the first fax on behalf of each of the four companies. He identified the secretary of each company and added:

“They are the Accused in the current trial, and they instruct that they are the only persons authorised to search for and to produce documents on behalf of the company. They also instruct that they decline to do so as the subpoenas are currently the subject of appeal.”

21 In response to the second fax of 2 March, Mr Watson wrote:

“The person who fits the description of “proper officer” in the case of each company is the company Secretary whose name and contact details I have supplied. The only people who could meet the criteria raised in your questions (a) (b) and (c) are the Accused themselves.”

Mr Watson also affirmed that there was no such person as Secretary to the Dolina Group of Companies.

22 The evidence from Mr Hartman was placed before his Honour Justice Whealy, who dealt with the submissions on behalf of the companies in a further judgment of 4 March 2003.

23 In his further judgment his Honour said:

“[20] I remain quite unconvinced that the companies can fulfil their obligations under the subpoenas only by recourse to the specific directions or instructions of the accused. There is nothing in the material contained in Mr Hartman’s affidavit which causes me to review the conclusion I reached in this regard in paragraphs 43 to 45, and paragraphs 48 to 50 of the earlier decision.
[21] Indeed the material placed before me today, particularly the correspondence contained in Mr Hartman’s affidavit which I have set out in some detail, appears to me to be, if I may say so, rather contrived. These are the letters from the companies’ solicitor making solemn enquiry of the solicitor for the accused. These are equally solemn. The correspondence gives every appearance of having been carefully settled by senior counsel. But no useful information is in fact provided. Rather the material does not advance the matter beyond the propositions urged by Mr Richter QC in support of the accused’s endeavours to set aside the subpoenas. The material has, it seems to me to have been carefully prepared to reflect those propositions and to set them out in more solemn form. In my view the correspondence does not compel a different conclusion, either in fact or in law, to that contained in my earlier decision.
[22] There are many lawful obligations placed on corporations by statute and regulations in this State. Corporations need to comply with those obligations on a day to day or regular basis. I do not consider that, in general terms there is an inability to act in fulfillment of obligations imposed on corporations of that general kind, unless there is action or instruction by the ‘controlling mind’ of the company, or executive action by the company secretary.
[23] Be that as it may, in the present matter there is no justifiable warrant to suggest that the companies can comply with the subpoenas only as a result of actions taken by each of the accused. Indeed the clear inference is, as I stated in my earlier decision, very much to the contrary.”

The Decision of Whealy J

24 His Honour rejected the Appellants’ case in the following passage:

“[43] … Where a subpoena duces tecum is served on a corporation, it is a subpoena to the corporation itself. The reference to ‘proper officer’ in the subpoena does not in any way detract from the proposition that it is to the company itself that the subpoena is addressed. It is not addressed to any particular individual in the company, whether that individual be an ‘officer’ or not. The subpoena assumes the company has the described documents in its possession. If that be the case, there is an obligation on the company, subject to the usual protections, to produce the documents to the Court. The obligation however is on the company, not on any individual.
[44] The form of the subpoena recognises that the company itself may or will have to select an employee or agent to give evidence and produce the documents. It is a matter for the company to choose that person. The company cannot defeat the purpose of the subpoena, that is the production of the documents it has in its possession, by appointing as the person to produce the documents a director of the company accused of a criminal offence who may be implicated by the production of the documents. Nor can it defeat the purpose of the subpoena by refusing to appoint any person to answer the subpoena.
[45] I repeat that the subpoena is addressed to the company. If the company has the documents, as the subpoena assumes, they must be produced to the Court …”

25 His Honour concluded:

“[46] It is a corollary to the propositions I have enunciated that the absence of authority from the employer to bring the documents to court and to produce them is not a material circumstance when the Court’s order requires them to be brought and produced.”

26 His Honour’s findings of fact at pars [48]-[49], which I have set out in par [12] above, reinforced in par [20] of his further judgment, set out in par [23] above, proved to be the basis on which he dismissed the Appellants’ motion.

27 The principal findings appear to me to be:

(i) No person other than one of the accused had been authorised to speak on behalf of any of the corporations.

(ii) Ms Lawler, as payroll clerk, had been responsible for holding the payroll records and she knew where they were located.

(iii) Alternatively, the person designated as financial controller and/or some other of the employees, could locate and produce the documents.

(iv) Notwithstanding (i), by reason of (ii) and (iii), none of the corporations had to rely on any of the accused for directions or instructions to respond to the subpoenas.

The Issues in the Appeal

28 There are three grounds of appeal. Whealy J has certified each of them as proper for determination on appeal by this Court. The three grounds are as follows:

“1. That once an indictment has been filed and a plea of not guilty made by an Accused who is the sole director and secretary of a body corporate, it is oppressive and/or an abuse of process to issue and serve a subpoena duces tecum addressed to ‘the proper officer’ or ‘proper officer’ or such corporation when the accused is the only directing mind of the corporation, being the sole director and secretary thereof, and is thereby required to search for, or direct or allow others to search for, and produce documents sought by the Crown to be used against such Accused;
2. That the Learned Trial Judge, exercising powers in federal jurisdiction, erred in upholding the validity and enforceability of a subpoena duces tecum address to ‘the proper officer’ or ‘proper officer’ of such corporation when the accused is the sole director and secretary thereof and has not authorized any employee of the corporation to search for and produce documents not otherwise in the possession, custody or control of such employee; the principal of the separation of powers being thereby infringed because the Learned Trial Judge thereby applied the judicial power of the Commonwealth in aid of the Crown’s executive function of investigation;
3. That the Learned Trial Judge erred in failing to look past the corporate veil in the circumstances that the Accused is the sole director and secretary of the corporation and that the subpoena was therefore in reality a means of compelling the accused to search for and produce documents sought by the Crown to be used against such Accused and thus constituted an oppression or abuse of process.”

The Proper Officer

29 Each of the subpoenas was addressed to the “proper officer” of the corporation. This does not, however, change the character of the subpoena. It remains a subpoena addressed to a separate legal personality, i.e. the corporate entity. Each of the parties appearing before this Court accepted, as they had before Whealy J, that each subpoena was addressed to the company.

30 This Court’s power to issue subpoenas, now found or at least confirmed (see Danieletto v Kherra (1995) 35 NSWLR 684 at 686 per Bryson J) in Pt 37 r2 of the Supreme Court Rules, authorises a subpoena for production in the prescribed form. Part 37 r1 defines subpoena for production relevantly as: “an order in writing … where the person named is a corporation, requiring the corporation to produce a document or thing for the purpose of evidence”.

31 The prescribed form that was used in this case was Form 46. That is the form for a subpoena to a natural person. The commencing words of such a subpoena are:

“The court orders that you shall attend and produce this subpoena and the documents and things described in the Schedule …”

32 Form 46A, which is a subpoena to a corporation, has a different form. Its opening words are:

“The court orders that ‘the corporation’ shall produce this subpoena and the documents and things described in the Schedule by causing its proper officer to attend and produce them.”

33 However, as noted above, nothing was said to turn on the form actually used in the present case. The conduct of the case proceeded on the basis that each of the subpoenas was addressed to the company for production by its proper officer.

34 The terminology of “proper officer” has been adopted by the courts whenever a company is required to do something through a human agent, e.g. discover documents, answer interrogatories, or respond to a subpoena. The concept recognises the fact that an artificial legal personality such as a corporation can act only by human agents and those human agents require authorisation to so act on behalf of the corporation.

35 As Lord Denning MR said in Penn-Texas Corporation v Murat Anstalt (1964) 2 QB 647 at 663, in a passage referred to with approval in Rochfort v Trade Practices Commission (1982) 153 CLR 134 at 146 per Mason J:

“It is no good serving a subpoena duces tecum on any of the officers or servants of the company: for each of them can say that he has no authority from the company to produce them and that would be the end of any proceedings against him … the only thing to do is to serve a subpoena duces tecum on the company itself, requiring it, by its proper officer, to give evidence and produce the documents … [I]t seems to me to be the only way in which a company can be compelled to produce documents which are in its possession or custody. The command or requirement on the company is comparable to an order on a company, by its proper officer, to file an affidavit of documents or to answer interrogatories. The officer answering must make inquiries of the other officers as to the documents and must then produce them on behalf of the company.”

36 The case law on discovery, interrogatories, subpoenas and statutory notices to produce appear to coincide in concluding that the “proper officer” is the person who is in, or able to be placed in, the best position to obey the order of the court or statutory requirement. A number of propositions emerge from this body of case law:

· A particular officer may be specified in advance by the person requesting the information, but need not be. (BPTC Ltd (In liq) (1993) 29 NSWLR 713 at 719; Mosser v PGH Ceramics [1964] 82 WN (Pt 1) (NSW) 147 at 149.)

· It is not necessary to use the formulation “by its proper officer”, a document addressed to the company is enforceable. (See Mosser v PGH Ceramics supra; MacDonald v Australian Securities Commission (No 2) (1994) 48 FCR 210 at 218-220; Trade Practices Commission v Arnotts Ltd (No 5) (1990) ATPR 41-010 at 51,207-51,208.)

· A subpoena addressed to “the proper officer” of a company may not be technically correct, but it should be read, as in this case, as addressed to the company “by its proper officer”. (Cf Re BPTC Ltd supra at 719 D-E; Re Lindsay Toole & Co (Wool) Pty Ltd (1966) 2 NSWR 120 at 122.)

· Where a person is named but is no longer available to the company, it is the duty of the company to identify another officer. (Old Welshman’s Reef Gold Mining Co v Welshman’s Gold Mining Co (1888) 14 VLR 253 at 254.)

· An “officer”, including a “proper officer”, need not be an employee of the company. (R v Scott (1990) 20 NSWLR 72 at 79.)

· A person appointed by the company must have a level of seniority that enables all requisite inquiries to be made. (Commercial Bank of Australia vWhinfield (1920) VLR 225.)

· Often the company secretary is the best person to be named or appointed by the company, but any other person may be named or appointed if that person can more effectively supply the information. (Tannetta Walker & Co v Newport Duck Co (1890) 6 TLR 326; Welsbach Incandescent Gas Lighting Co v New Sunlight Incandescent Co (1900) 2 Ch 1 at 12, AG v North Metropolitan Tramways Co (1892) 3 Ch 70 at 74.

· There may be more than one proper officer, each responding to different requests. (Wilson v Church (1878) 9 Ch 555 at 557.)

37 The concept of “proper officer” is not a term of art. The term is not directed only to the identification within the company of a single person who is in some sense the custodian of the records. In any hierarchy there may be more than one person who has the relevant degree of control to command the search for and retrieval of the documents sought.

38 The “proper officer” is a person who, directly or indirectly, can ensure the requisite search and retrieval is done and can answer the questions, albeit limited, which may be asked on attendance at court.

39 Form 46A, to which I have referred above, in contrast with Form 46 directed to natural persons, provides in clauses 1 and 2, respectively (emphasis added):

“(1) ‘the corporation’ shall produce this subpoena and the documents and things described in the schedule by causing its proper officer to attend and produce them .
(2) the officer who is to attend shall make enquiries for the purpose of answering, and, on attending , shall answer, such questions the court requires him to answer concerning the possession or custody of those documents and things.”

40 The subpoena is addressed to the corporation and the corporation must comply. The corporation must cause proper inquiries and searches to be made in accordance with whatever internal practices and procedures it chooses to adopt. The “proper officer” is the human agent who can attend and, if necessary, testify to the process of search and production.

Submissions on the Appeal

41 Mr R Richter QC, appearing for Ms Ida Ronen made the principal submissions which, with some additions, were adopted by the other Appellants and by the companies which intervened by leave.

42 The Appellants submit that the proposition accepted by his Honour - that no person had been authorised to speak on behalf of a company – must lead to the conclusion that there was no person, other than the accused, who could be directed by the Court to make inquiries, search for and, if any are found, produce documents pursuant to the subpoena.

43 The Appellants submit that, other than each accused, there were no other directors, secretaries or persons who made decisions or participated in the control and/or decision-making processes of the companies or who were in a position to speak with authority on behalf of or to confer authority to speak, or act on behalf of the corporate entity. The subpoenas were, in substance, directed to each accused personally. In the context of a criminal trial, the Appellants submit, an accused cannot be compelled to act in his or her capacity as a director and proceed to locate and produce documents or to authorise others to do so.

44 Subpoenas which require the active participation of an accused person in the process of gathering evidence for use by the Crown in a trial are, it is submitted, oppressive. This was not, it was submitted, a direct application of the privilege against self-incrimination. That would, however, be the consequence if the subpoena required the accused to perform any act, whether searching for or producing documents himself or herself, or even authorising an employee to do so.

45 The Appellants pose the rhetorical question: How is “the company” to comply with the subpoena? Who, other than the accused, can nominate a “proper officer” and direct compliance? The documents, being those of the company, can only be produced if found by some person who must be selected by the company to give evidence and produce the document. The decision of Whealy J, it was submitted, has the effect of saying that each accused, as the directing mind of the company, cannot refuse to select or authorise a person to carry out the necessary searches for and production of documents.

46 To summarise the principal thrust of the Appellants’ submissions: the service of a subpoena after an indictment has been presented in a criminal trial which requires an accused to do something is oppressive.

47 The Crown submits that the subpoenas in the present case were each addressed only to the corporation. It submits that no subpoena requires an accused to do anything. Alternatively, it submits that even if an accused were to act on behalf of the corporate entity, either directly or indirectly, complying with the subpoenas did not involve any derogation of a privilege to which the accused was entitled.

48 If any accused performs an act relating to the subpoena, that would not be, the Crown submits, an “incident” of the subpoena. It is an “incident” of the fact that the accused chose to conduct business and take up office in a corporate entity. The subpoena does not require any accused to do anything.

49 The Crown further submits that the privilege cannot be relied upon as a ground to set a subpoena aside. A subpoena has the effect that documents are produced to the Court. No question of incrimination arises by the act of production. Upon an application for access, however, such an issue may be raised. The issue would not arise here because corporations do not themselves have a privilege.

50 In reply to this submission, the Appellants contend that the act of production to the Court, assuming that that was based on some earlier act by one of the accused, constitutes sufficient oppression.

Precedent

51 The Court was not referred to any authority in which this issue has been considered. However, the issue has arisen in the United States, albeit in the particular constitutional context of the Fifth Amendment.

52 In American law, the Fifth Amendment protection against self-incrimination does not extend to corporations. This has also been the law in Australian since the High Court decision in Environment Protection Authority v Caltex Refining Co Pty Limited (1993) 178 CLR 477. The Supreme Court of the United States has also decided that a corporate officer cannot resist a subpoena for corporate records by invoking his personal privilege.

53 In Braswell v United States 487 US 99 (1988) Chief Justice Rehnquist, delivering the opinion of the Court, said at 109-110:

“… The court has consistently recognised that the custodian of corporate or entity records holds those documents in a representative rather than a personal capacity. Artificial agents such as corporations may act only through their agents … and a custodian’s assumption of his representative capacity leads to certain obligations, including the duty to produce corporate records on proper demand by the government. Under those circumstances the custodian’s act of production is not deemed a personal act, but rather an act of the corporation. Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation – which of course possesses no such privilege.”

54 The Chief Justice quoted with approval the following passage from an earlier judgment of the Court in United States v White 322 US 694 (1944) at 699:

“But individuals, when acting as representatives of a collective group, cannot be said to be exercising their personal rights and duties nor to be entitled to their purely personal privileges. Rather they assume the rights, duties and privileges of the artificial entity or association of which they are agents or officers and they are bound by its obligations. In their official capacity, therefore, they have no privilege against self-incrimination. Any official records and documents of the organisation that are held by them in a representative rather than in a personal capacity cannot be the subject of a personal privilege against self-incrimination even though production of the papers may tend to incriminate them personally.”

55 In a further passage, quoted with approval in the joint judgment of Deane, Dawson and Gaudron JJ dissenting in Environment Protection Authority v Caltex Refining supra at 529-530, Chief Justice Rehnquist said at 115:

“We note further that recognising a Fifth Amendment privilege on behalf of the records custodians of collective entities would have a detrimental impact on the government’s efforts to prosecute ‘white collar crime’, one of the most serious problems confronting law enforcement authorities. ‘The greater proportion of evidence of wrong-doing by an organisation or its representatives is usually found in the official records and documents of that organisations. With a cloak of the privilege to be thrown around these impersonal records and documents effective enforcement of many federal and state laws would be impossible’ White 322 US at 700”.

56 The Chief Justice went on to say at 116:

“If custodians could assert a privilege, authorities would be stymied not only in their enforcement efforts against those individuals but also in their prosecutions of organisations. In Bellis v The United States 417 US 85 at 90, the court observed: ‘in view of the inescapable fact that an artificial entity can only act to produce its records through its individual officers or agents, recognition of the individual’s claim of privilege with respect to the financial records of the organisation would substantially undermine the unchallenged rule that the organisation itself is not entitled to claim any Fifth Amendment privilege and largely frustrate legitimate governmental regulation of such organisations’.”

57 In Environment Protection Authority v Caltex Refining at 542 McHugh J referred to the result in Braswell without disapproval.

58 The majority judgment in Braswell considered what implications, if any, would flow from the fact that an individual entitled to claim privilege did in fact produce records as the custodian for the company. The Court had said at 118:

“For example in a criminal prosecution against the custodian, the government may not introduce into evidence before the jury the fact that the subpoena as served upon and the corporations documents were delivered by one particular individual, the custodian. The government has the right, however, to use the corporations act of production against the custodian. … If the defendant held a prominent position within a corporation that produced the records, the jury may, just as it would had someone else produce the documents, reasonably infer that he had possession of the documents or knowledge of their contents. Because the jury is not told that the defendant produced the records, any nexus between the defendant and the documents results solely from the corporations act of production and other evidence in the case.”

59 To this passage the Court appended footnote 11 which said in part:

“We leave open the question whether the agency rationale supports compelling a custodian to produce corporate records when the custodian is able to establish, by showing for example, that he is the sole employee and officer of the corporation, that the jury would inevitably conclude that he produced the records.”

60 After Braswell it was argued in subsequent cases, based on footnote 11, that there was an exception in the case of a corporation with a sole owner, director, officer and employee. That argument was rejected by the Second Circuit in In re Grand Jury Subpoenas dated October 22, 1991 and November 1, 1991 959 F.2d 1158 (2d CI C1992); by the Fourth Circuit in United States v Stone 976 F.2d 909 (1992) cert. denied, 507 US 1029 113 S.Ct 1843 123 L.Ed 2d 467 (1993); and by the New York District Court in United States v Mosely 832 F. Supp. 56 (1993).

61 In United States v Stone supra, the United States Court of Appeal’s Fourth Circuit rejected the submission in part on the following basis at [4]:

“Ashford is a one man operation; however, it is still a corporation, a State law regulated entity that has a separate legal existence from Wujkowski shielding him from its liability. The business could have been formed as an unincorporated sole proprietorship and production of its business records protected by the privilege against self-incrimination … Wujkowski chose the corporate form and gained its attendant benefits, and we hold, in accordance with a decision of sister circuits, that he cannot now disregard the corporate form to shield his business records from production.”

62 The reasoning in United States v Stone was applied in a New York District Court in Moseley supra which involved the case of a sole owner, director, officer and employee of the company served with subpoena. The Court adopted the reasoning in Stone and held at [59]:

“Allowing Moseley to successfully resist the IRS summons based solely on his status as sole owner director officer and employee of MCI would be tantamount to allowing Moseley to conduct business in the corporate form only when it was advantageous to do so. As custodian of MCI, Moseley is being summoned to perform a corporate act.”

63 A similar result to Braswell is suggested in obiter dicta of Rand J in the Supreme Court of Canada in Klein v Bell (1955) 2 DLR 513 at 523-524 where, on the basis that a corporation may be entitled to claim the privilege, production might incriminate the officer in whose custody the company’s documents were kept:

“But the claim may be that the document may tend to incriminate the officer personally. In such a case I can see no sound reason for conceding it when the matter is one of authentication only and he is no more intimately associated with the corporation than as an officer, custodian or recorder of its proceedings, actions or transactions. He may be involved in some of the latter, but to admit the privilege would be to enable the corporation to prevent production on an examination by maintaining him as custodian. His custody is the possession of the company and no inference can be drawn against him from either fact: and if he choses or is chosen to continue as custodian, he must submit to its incidental consequence.”

64 The reference “no more intimately associated” leaves open the position of a one person company.

Oppression and/or Abuse of Process

65 The Appellants’ submissions seek to characterise the companies involved in this case as if they were “one person companies” of the kind considered in the US authorities. For reasons which will appear, I do not accept that characterisation.

66 There is much to be said for the proposition that if the subpoenas do in fact require the accused to perform some act, then the subpoenas should be set aside as oppressive and/or an abuse of process.

67 The High Court has recently emphasised the accusatorial nature of a criminal trial, in which the prosecution bears the onus of proving the guilt of an accused beyond reasonable doubt and in which the prosecution must put its case fully and fairly before the accused is called on. (See RPS v The Queen (2000) 199 CLR 620 at [22]; Azzopardi v The Queen (2001) 205 CLR 50 at [34] [38] [190] [193]-[194]; Dyers v The Queen (2002) 210 CLR 285 at [9] [53] [60]; R v Soma (2003) 212 CLR 299 at [27].) This fundamental characteristic of a criminal trial does, I am inclined to believe, suggest that, absent statutory authority, a court should not make any order which has the effect that an accused against whom an indictment has been presented must do something calculated to assist the preparation or presentation of the Crown case. However, on the facts, it is not necessary to express a concluded view on this matter.

68 In none of the four corporations is any person other than an accused either a director or secretary. The Appellants seek to characterise each accused as “the controlling mind” of the respective corporations. That terminology may be appropriate, albeit not exclusively so, when determining whether the knowledge or conduct of a person is to be characterised as the knowledge or conduct of the company. It is not particularly helpful, let alone determinative, when considering whether a company can respond to a subpoena without the involvement of the sole director or secretary.

69 Willmer LJ said, using an example adapted to the facts of the case before the Court in The Lady Gwendolen [1965] P 294 at 343-344:

“Where … a company has a separate traffic department, which assumes responsibility for running a company’s ships, I see no good reason why the head of that department, even though not himself a director, should not be regarded as someone whose action is the very action of the company itself, so far as concerns anything to do with the company’s ships.”

70 Such considerations also apply when identifying – whether in advance by the requisitioner or by the responding corporation – the person best able to supply the information.

71 As Jessel MR said in Wilson v Church supra at 557, with respect to then current procedure:

“It is for the Court to decide which member is to be interrogated, and if you shew reasons why one member can give the information and not another, or why one member can give information on one set of questions, and another member on another set of questions, the Court can direct which member or members shall be examined to give information.”

72 Similarly, North J said in Attorney General v North Metropolitan Tramways Co supra at 74:

“… they are entitled to have information from such persons as can best give it with respect to the matters which are the proper subject for the interrogatories.”

73 Further, Webster MR (later Lord Alverstone) said in Welsbach Incandescent Gas Lighting supra at 8, quoted with approval in Smith Kline & French Laboratories Ltd v Inter-Continental Pharmaceutical (Australia) Pty Ltd (1969) 43 ALJR 308 at 310:

“When an order is made upon a company to answer interrogatories, some officer of the company has to answer them, and the Court unquestionably has a discretion to say who shall make the answer, and in the exercise of that discretion the Court would, in my opinion, choose that officer who of his own knowledge knew most about the matters as to which the company is being interrogated.”

In Welsbach , Rigby LJ said at 12-13:

“But it is said, you are always entitled to interrogate the person who knows about the matters in question. Within proper limits, that is no doubt the right principle. If, for instance, you are inquiring about the details of a manufacturing purpose, it would be idle to say you should go to the secretary of a company who probably would not know one process from another in the manufacturory, when there may be an important officer or manager of the manufacturory who could give you reasonable and plain answers.”

(See also per Collins LJ at 14.)

74 On the evidence in the present proceedings, Ms Lawler as payroll clerk, or alternatively the chief financial controller, would appear, by reason of their positions in the context of a substantial commercial enterprise, to necessarily have authority “so far as concerns anything to do with the company’s” payroll records, to use the formulation from The Lady Gwendolen.

75 It may be that such records are not in their personal possession or control for purposes of a subpoena addressed to either personally. However, it does appear that either or both has sufficient control as one, but not necessarily the only, human agent of the company able to conduct the search and either become the, or instruct a, proper officer to attend at court.

76 That such records are not in the immediate physical custody of either for any reason, including the fact that they are stored away as of historical interest only, does not affect the position.

77 Nor is this implicit authority affected by the absence of authority, to use the terminology of the submission upon which Whealy J proceeded, “to speak on behalf of the recipients of the subpoenas”. It is not necessary, whenever a subpoena is issued, for a company to give anyone express authority to answer the subpoena. The company is obliged to answer the subpoena. If a director or other person cannot or will not act, the company must still comply. Even in the absence of implicit authority the obligation upon the company to comply with the subpoena confers such authority as is required, as a matter of necessity, on those persons in the company who can ensure compliance.

78 It could not be suggested that an employee who is able to ensure that the company comply with its legal obligations would breach any duty to his or her employer by so acting. The issue that arises is not one of authority, as the Appellants contend, but of capacity. The suggestion by the majority in Eccles & Co v Louisville and Nashville Railway Company (1912) 1 KB 135 at 145, 147-148 and cf 151-152, that an employee who has control of documents requires authority from his employer to produce them, has not been followed in Australia. (See Rochfort v Trade Practices Commission esp at 139, 144, 150, 151; South Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd (1984) 1 NSWLR 711 at 714.)

79 Whether the position is different in a one person company need not be decided. In such a case it may be necessary for the Court to appoint a receiver for the specific purpose.

80 As Mason J said in Rochfort supra at 147:

“The subpoena, which has the effect of a court order, requires the person to whom it is addressed to produce the documents which it describes. It assumes that he has the ability or capacity to produce them. At times this idea has been expressed by saying that the person served is bound to produce any document which is in his or her possession, custody or control. But these statements should not be allowed to obscure the true effect of a subpoena – it binds a person who can produce the documents to do so.”

81 In Rochfort, one of the issues considered was whether an employee was excused from producing a document when he held no authority to do so. Mason J said at 144:

“To my mind the absence of authority from the employer to bring the documents to court and to produce them is not a material circumstance when the court’s order requires them to be brought and produced.”

82 Mason J concluded at 144.10:

“There is accordingly, every reason for thinking that the court can compel a person to produce documents which he is physically able to produce.”

83 So, in this case, on his Honour’s findings of fact, each company is “physically able to produce” the documents and can do so without any act by an accused.

84 In my opinion, it was open for his Honour to conclude that each company can produce the documents and that it could do so without any act on the part of an accused. This is a finding of fact with which this Court should not interfere.

Judicial Power

85 A submission was put that the Court’s order was directed to an investigatory purpose. Without reference to any authority, this was said to be an exercise of the executive power which, as it was put, “contravenes the essential separation of powers embodied in Chapter III of The Constitution”. Whealy J was exercising federal jurisdiction.

86 The existence of the records sought by subpoena was revealed in the course of the preliminary hearing of Ms Lawler to which I have referred. The Crown was seeking to establish the evidence she could give.

87 His Honour referred to the proposition that the payroll records could show that each accused had access to substantial amounts of cash. Such evidence could be admissible to prove the Crown case. It is a common incident of judicial proceedings that documents are sought for the purpose of evidence. Ordering the production of documents is an exercise of judicial power.

88 In The Queen v Davison (1954) 90 CLR 353, Dixon CJ and McTiernan J referred at 369.1 to the “double aspect which some acts or functions may bear”. Their Honours said at 368.8:

“But to say that a thing may be done in the course of the exercise of judicial power is not to say that it may not be done without the exercise of judicial power. The legislature may commit some functions to courts falling within Chapter III although much the same function may be performed administratively.”

(See also Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151; Boilermakers Case (1956) 94 CLR 254 at 278.)

89 In some contexts the process of gathering documents may be characterised as “investigatory”. Obviously such a process may occur in the exercise of the executive power. However, the same kind of process may also be conducted in the exercise of judicial power. That is what was happening here.

Conclusion

90 The appeals should be dismissed.

91 MASON P: The judgment of the Chief Justice that I have had the advantage of reading sets out the facts and issues relevant to this appeal. Subject to the following, I agree with the Chief Justice.

92 To direct a subpoena for production to an agent such as an employee is fraught with danger. The agent may not have the particular documents in his or her control or custody. And even if the party subpoenaed is the custodian of the documents, his or her existing authority may not be such as to permit production without violating a duty to the principal (Rochfort v Trade Practices Commission (1982) 153 CLR 134 at 138-140, 143-144, 148, 151).

93 These problems are avoided by directing the subpoena to the principal in circumstances where the documents are within the power of the principal to produce and/or in the principal’s possession. This is why it is now beyond doubt that a subpoena for production may issue to a corporation for production of the corporation’s books and records (Rochfort at 146, 151). The obligation requires the corporation to cause its “proper officer” to attend and produce the documents (ibid. See Form 46A to Supreme Court Rules, “Subpoena to a Corporation for Production and for its proper officer to answer”).

94 This was not the precise form of the subpoenas issued in the present case, but the Court was informed by all parties that no objection is taken on that account. The case was fought below and in this Court on the basis that the subpoenas are addressed to the corporations. Doubtless fresh subpoenas could issue if any point were to be taken.

95 A subpoena addressed to a corporation requiring it to cause its “proper officer” to produce its records is, from start to finish, an obligation laid upon the corporation. For proven breach the corporation may be punished for contempt. So too may any person found to be a proper officer to cause the subpoena to be answered who wrongfully neglects to do so (Attorney General of Tuvalu v Philatelic Distribution Corp Ltd [1990] 2 All ER 216 at 223-4. See also Supreme Court Rules Part 42 r7).

96 United States law is to similar effect (see generally 81 Am Jur 2d (“Witnesses”) at §19). The leading authority is Wilson v United States 221 US 361 (1911) where the Supreme Court said (at 374) that “there would seem to be no reason why the subpoena duces tecum should not be directed to the corporation itself. Corporate existence implies accountability to legal process”. In Wilson, a subpoena was directed to a telegraph company, without mention of any individual or officer, and it was held that the officer of the corporation having in his possession the books of the corporation described in the subpoena must produce them, or be held in contempt; and the fact that the subpoena was not directed to the officer personally, but merely to the corporation, was no defence. (See also Wigmore on Evidence (McNaughten rev) at §2200 (vii)).

97 In the present case, the corporations have no privilege against self-incrimination (Environmental Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477). Nor can they invoke such privilege on behalf of another. And no claim has been made or evidence led to suggest that any or every proper officer would make a testimonial self-incrimination by collecting and producing the documents and/or informing the court about searches and enquiries made.

98 If the formal call on the subpoenas has taken place then, depending on proof of the requisite facts, it is open to the Crown to proceed to the enforcement stage against the companies and/or recalcitrant proper officers.

99 The Appellants are shareholders and officers of the corporations and they are on trial for serious offences. Accordingly, they have standing to move to set aside the subpoenas (cf Supreme Court Rules Pt 37 r 8) and to invoke s5F of the Criminal Appeal Act1912. Their submission is that the subpoenas are oppressive to them. Exactly why this is said to be the case was explored at the hearing in this Court. It is not because production of the documents by the companies would involve self-incrimination by them. That is because the companies are separate legal entities and the privilege against self-incrimination applies only to the production of documents by the person who would be imperilled (Carter v Northmore Hale Davey & Leake (1995) 183 CLR 121 at 139-140).

100 Nor, with one qualification, is it suggested that the Appellants themselves have to take any positive steps to ensure compliance with the subpoenas. The Crown does not suggest that the Appellants are the only “proper officers” of their respective companies.

101 The qualification, that lies at the heart of the Appellants’ argument, is that the Appellants submit that the subpoenas cannot be addressed or answered unless and until they (as the present directing minds of their respective companies) appoint someone to assume that role.

102 The Appellants submit that it would be oppressive to them to allow the subpoenas to stand. The submission was put in various ways that, on closer examination, amount to attempts by the Appellants to invoke a personal privilege against self-incrimination in a context where no such incrimination is involved.

103 In one sense, the oppression submission is premature. It makes assumptions about things that the Appellants might have to do for them to escape punishment consequent upon the corporations’ disobedience of the subpoena.

104 The submission is also hypothetical and speculative because it hints that the Appellants are the sole “proper officers” of the companies. The evidence and the findings of Whealy J are to the contrary.

105 The submission is also misconceived, because it ignores the punitive/enforcement options available to be taken against the companies themselves (Supreme Court Rules, Part 42 r 7(3), Part 55 r 13(2)). These do not impinge upon the Appellants (beyond the fact that the companies are being compelled to assist the administration of justice – something of which the Appellants have no right to complain).

106 The Appellants respond that the subpoenas indirectly command them to take steps to ensure compliance, thereby aiding the Crown in their own prosecution. This too is misconceived. The Appellants accept that they have no right to take positive steps, including the giving of instructions to company employees, to frustrate or impede compliance with the subpoenas (cf Registrar of the Supreme Court, Equity Division v McPherson [1980] 1 NSWLR 688). What if the Appellants did nothing? If this caused the corporations to disobey the subpoenas, so be it. If it exposed the corporations to punishment and/or enforcement proceedings, so be it. This is no more than the consequence of the corporations being legal entities separate from the Appellants. If, and it is a big if, the Appellants need to appoint a “proper officer” to cause the subpoenas to be answered (whether or not documents are available to be produced), and if the Appellants choose not to do so in consequence of which the corporations disobey the subpoena, so be it. The subpoenas are not an abuse of process on this account.

107 I recognise that one of the options for punishment in relation to a corporation’s failure to answer a subpoena is the taking of action against officers of the corporation (Supreme Court Rules, Part 42 r 7(2)(d)). But that is only one of several options and it is inconceivable that it would be exercised as against an officer who had a lawful excuse for inaction (see Attorney General of Tuvalu v Philatelic Distribution Corp Ltd at 223-4). This circumstance therefore provides no basis for setting the subpoenas aside.

108 I am not implying that the Appellants have a lawful excuse for inaction in their capacities as officers of the corporations . As indicated, this question does not arise at the present stage. But, for reasons that follow, I do not think that it ever will.

109 Let it be assumed (contrary to the findings of Whealy J) that the Appellants were the only “proper officers” of their respective corporations in relation to the documents sought to be produced to the court. It does not follow that the issue of the subpoenas was oppressive as regards the Appellants. On the assumption made, the Appellants are presented with the option of appointing a proper officer to cause the subpoena to be answered. This step would involve no incriminatory admission. Nor, in my view would it involve a step that impinged upon the Appellants’ right to put the Crown to proof of guilt without requiring them to assist in the process. It stems from their antecedent relationship with corporations that, in all probability, they brought into being. It is an aspect of their continuing duties as officers of the corporations (if they choose to remain such) to ensure that the corporations obey corporate legal obligations. If those duties are burdensome or inappropriate, the respondents can step aside from a managerial role. It is not oppressive to offer them this choice, or some milder choice such as the appointment of a “proper officer” (if there is presently no such officer who does not fear self-incrimination).

110 In Braswell v United States 487 US 99 (1988) it was held that the President and sole shareholder of corporations was properly found guilty of contempt for refusing to produce books and records of the corporations pursuant to federal grand jury subpoena. The Supreme Court held that it was not to the point that the President/shareholder feared self-incrimination. Rehnquist CJ, delivering the opinion of the Court, said (at 109-110, 117-118):

From Wilson forward, the Court has consistently recognized that the custodian … of corporate or entity records holds those documents in a representative rather than a personal capacity. Artificial entities such as corporations may act only through their agents, and a custodian’s assumption of his representative capacity leads to certain obligations, including the duty to produce corporate records on proper demand by the Government. Under those circumstances, the custodian’s act of production is not deemed a personal act, but rather an act of the corporation. Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation—which of course possesses no such privilege.
….
Although a corporate custodian is not entitled to resist a subpoena on the ground that his act of production will be personally incriminating, we do think certain consequences flow from the fact that the custodian’s act of production is one in his representative rather than personal capacity. Because the custodian acts as a representative, the act is deemed one of the corporation and not the individual. Therefore, the Government concedes, as it must, that it may make no evidentiary use of the “individual act” against the individual. For example, in a criminal prosecution against the custodian, the Government may not introduce into evidence before the jury the fact that the subpoena was served upon and the corporation’s documents were delivered by one particular individual, the custodian. The Government has the right, however, to use the corporation’s act of production against the custodian. The Government may offer testimony – for example, from the process server who delivered the subpoena and from the individual who received the records – establishing that the corporation produced the records subpoenaed. The jury may draw from the corporation’s act of production the conclusion that the records in question are authentic corporate records, which the corporation possessed, and which it produced in response to the subpoena. And if the defendant held a prominent position within the corporation that produced the records, the jury may, just as it would had someone else produced the documents, reasonably infer that he had possession of the documents or knowledge of their contents. Because the jury is not told that the defendant produced the records, any nexus between the defendant and the documents results solely from the corporation’s act of production and other evidence in the case.

111 In my opinion, the same principles apply under Australian law (see Environment Planning Authority v Caltex Refining Co Pty Ltd at 542).

112 The command of the subpoenas is addressed to the corporations. As legal entities they have independent duties to comply. “Corporate existence implies legal accountability” (Wilson at 374). If it were shown to be the case (and it has not been thus far) that there is no-one with custody or possession of the records who could lawfully answer the call of the subpoena on the corporations’ behalf without risk of testimonial self-incrimination, then the corporations must still take steps to comply. This may mean the appointment of a receiver. Or it may mean that a “proper officer” with nothing to fear by way of self-incrimination has to be appointed (cf United States v Barth 745 F 2d 184, 189 (2d Cir, 1984) cert denied 470 US 1004; In re Two Grand Jury Subpoenae Duces Tecum 769 F 2d 52 (1985); Two Grand Jury Subpoenae Duces Tecum 793 F 2d 69, 74 (2d Cir, 1986; Braswell at 116)).

113 For reasons already given, it is not to the point for the Appellants to say that they are the present directing minds of the various corporations and that they personally would have to set in train the steps to “outsource” the performance of the duty falling on the corporations. To adapt the language of Judge Lumbard speaking for the Court in Two Grand Jury Subpoenae Ducas Tecum 793 F 2d 69, 74:

It is the duty of the [companies] , not the [Supreme Court] or the [prosecution] , to identify an appropriate custodian to produce subpoenaed documents. If no one may act as custodian without incriminating himself or herself, the firm is required to produce the subpoenaed records by supplying a new agent who has had no previous connection with the firm.

114 At the end of the day, the oppression argument is an attempt by the Appellants to frustrate the subpoenas by suggesting that they trench upon the Appellants’ rights. This is to shift the proper focus of inquiry. The corporations are not free to select an individual to be their proper officer “… who because he fears self-incrimination may thus secure for the corporation the benefits of a privilege it does not have. Such a result would effectively permit the corporation to assert on its own behalf the personal privilege of its individual agents” (United States v Kordel 397 US 1, 8 (1969)).

115 The appeals should be dismissed.

116 KIRBY J: I agree, for the reasons given by Spigelman CJ and Mason P, that there is neither oppression nor an abuse of process arising from the subpoenas. The appeals should be dismissed.

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Last Modified: 10/24/2005