Randwick City Council v Athens (No. 4)

[2004] NSWLEC 115

Land and Environment Court

of New South Wales

CITATION:

Randwick City Council v Athens and Anor (No. 4) [2004] NSWLEC 115

PARTIES:

APPLICANT
Randwick City Council

FIRST RESPONDENT
Peta Athens

SECOND RESPONDENT
Athens Holdings Pty Limited (ACN 001 166 552)

FILE NUMBER(S):

40097 of 2000

CORAM:

Cowdroy J

KEY ISSUES:

Contempt :- validity of subpoena addressed to a corporation

LEGISLATION CITED:

CASES CITED:

Environment Protection Authority v Caltex Refining Co. Pty. Limited [1992-1993] 178 CLR 477;
Hafele Australia Pty Limited and Anor v Maggbury Pty Limited and Anor [2000] QCA 397 ;
Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254;
R v Cornelius (1744) 2 Strange 1210 [93 ER 1133];
Salomon (Pauper) v A Salomon & Co Ltd [1897] AC 22;
Trade Practices Commission v Abbco Ice Works Pty Limited and Ors (1994) 52 FCR 96

DATES OF HEARING:

11/03/2004; 25/03/2004

DATE OF JUDGMENT:

03/30/2004

LEGAL REPRESENTATIVES:

APPLICANT
Mr A. Thompson (Barrister)

SOLICITORS
Bowen & Gerathy

RESPONDENT
Mr S. Levitt (Solicitor)

SOLICITORS
Levitt Robinson Solicitors and Associates

JUDGMENT:

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

40097 of 2000

Cowdroy J

30 March 2004

Randwick City Council

Applicant
v

Peta Athens

First Respondent

Athens Holding Pty Limited (ACN 001 166 552)

Second Respondent

Judgment No. 4 – Validity of subpoena

1 The alleged contemnors have moved the Court by motion dated 3 March 2004 to set aside two subpoenas issued on 19 February 2004 requiring them to produce documents relating to the operations of the business of the second alleged contemnor.

2 In its written submissions dated 17 March 2004 the applicant conceded that the grounds relied upon for setting aside the subpoena addressed to the first alleged contemnor are valid and that it did not oppose the setting aside of that subpoena. Accordingly on 25 March 2004 the Court set aside such subpoena. The remaining issue relates to the validity of the subpoena addressed to the second alleged contemnor, being a company of which the first contemnor is sole director and shareholder.

3 The second alleged contemnor’s motion is founded upon the principle that accused persons cannot be required to produce documents which would or might tend to incriminate them of the offence charged as held in R v Cornelius (1744) 2 Strange 1210 [93 ER 1133]. The submission is made that although the second alleged contemnor is a corporation having only one director, the production of documents by the company would be tantamount to the production of documents by an individual, namely the first alleged contemnor.

4 The principle referred to in R v Cornelius was considered by the High Court of Australia in Environment Protection Authority v Caltex Refining Co. Pty. Limited [1992-1993] 178 CLR 477. The High Court per Mason CJ and Toohey J stated at p 502:-

In conformity with that principle, the privilege against self-incrimination protects an accused person who is required by process of law to produce documents which tend to implicate that person in the commission of the offence charged. The privilege likewise protects a person from producing in other proceedings, including civil proceedings, documents which might tend to incriminate that person. In its application to the production of documents, the operation of the privilege is more far reaching in the protection which it gives than in its application to oral evidence. It is one thing to protect a person from testifying to guilt; it is quite another thing to protect a person from the production of documents already in existence which constitute evidence of guilt, especially documents which are in the nature of real evidence. Indeed, the protection afforded by the privilege is now so far reaching that it has been described as protection against being compelled to say anything which "may tend to bring him into the peril and possibility of being convicted as a criminal" [5] or as protection "against exposure to conviction for a crime" [6]. That is because the privilege protects a person from discovering or revealing information which may lead to the discovery of admissible evidence of guilt not in his or her possession or power [7].
[5] Lamb v Munster (1882), 10 QBD 110, at p 111, per Field J.
[6] Pyneboard Pty Ltd v Trade Practices Commission (1983), 152 CLR, at p 336,
per Mason ACJ, Wilson and Dawson JJ.
[7] Hamilton v Oades (1989), 166 CLR 486, at pp 503, 508.

5 The above principle protects individuals where production of documents may incriminate them. However the High Court made it plain that such principle did not extend to corporations. At p 507-508 Mason CJ and Toohey J said:-

Ultimately, it is clear that the rationales for the availability of the privilege against self-incrimination to natural persons, both historical and modern, do not support the extension of the privilege to artificial legal entities such as corporations. The privilege in its modern form is in the nature of a human right, designed to protect individuals from oppressive methods of obtaining evidence of their guilt for use against them. In respect of natural persons, a fair state-individual balance requires such protection; however, in respect of corporations, the privilege is not required to maintain an appropriate state-individual balance. Nor is the privilege so fundamental that the denial of its availability to corporations in relation to the production of documents would undermine the foundations of our accusatorial system of criminal justice.

6 Critical to the High Court’s determination is the fact that a corporation is a creature of statute. A corporation so created becomes a separate legal entity which is distinct from its directors: Salomon (Pauper) v A Salomon & Co Ltd [1897] AC 22. Only in rare circumstances may the corporate veil be lifted: see Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254.

7 The second alleged contemnor relies upon the decision of the Queensland Court of Appeal in Hafele Australia Pty Limited and Anor v Maggbury Pty Limited and Anor [2000] QCA 397 in support of its submission that the principle referred to by the High Court should not apply to corporations having a sole director. However there is nothing in this decision which supports such submission. To the contrary, the Queensland Court of Appeal adopted and followed Caltex. Other decisions have also followed Caltex. See for example Trade Practices Commission v Abbco Ice Works Pty Limited and Ors (1994) 52 FCR 96.

8 Although the Corporations Law now permits sole director companies, this fact of itself does not lead to an alteration in the application of the principle determined in Caltex. It is the fact of incorporation, rather than the number of directors which justifies the distinction drawn by the High Court relating self incrimination of an individual compared to that of a corporation. A person who operates his or her business by means of a company must accept the consequences which flow from such choice. The application of the principle in Caltex to a corporation is but one example of the consequences of incorporation.

9 For the above reasons the motion to set aside the subpoena addressed to the second alleged contemnor fails.

Orders

10 The Court makes the following orders:

1. The Notice of Motion dated 3 March 2004 in relation to the subpoena addressed to the second alleged contemnor is dismissed;

2. Costs reserved;

3. The documents referred to in the subpoena are to be produced to the Registrar on Tuesday 6 April 2004.