Reid v Howard

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S65 of 1994

B e t w e e n -
HUGH NAIRN REID
Appellant
and
STANLEY JOSEPH HOWARD & CAROLINE JANE HOWARD AS EXECUTORS OF THE ESTATE OF THE LATE JOCELYN JEAN RITCHIE
First Respondents
CAROLINE JANE HOWARD
Second Respondent
CRANWELL PTY LIMITED
Third Respondent
J.W. INVESTMENTS PTY LIMITED
Fourth Respondent
SUE TURNBULL & JESSIE EILEEN TURNBULL
Fifth Respondents

DEANE ACJ
TOOHEY J
GAUDRON J
McHUGH J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 16 AUGUST 1995, AT 10.21 AM

______________________

MR M.L.D. EINFELD, QC: May it please the Court, I appear with MR D.R. CAMPBELL for the appellant. (instructed by Hancock Alldis)

MR L.J.W. AITKEN: If it please the Court, I seek leave to intervene on behalf of the Attorney‑General for New South Wales or to be heard as amicus curiae with respect to the matters under appeal. (instructed by the Crown Solicitor for New South Wales)

DEANE ACJ: Yes, Mr Aitken, you have leave to intervene.

MR AITKEN: If the Court pleases. Your Honour, might I hand up a short outline of submissions which I had held back until leave was granted.

DEANE ACJ: Very well. While that is being done I note that I have a certificate from the Senior Registrar dated 24 July 1995 stating that she has received a letter dated 18 July 1995 from Messrs Mallesons Stephen Jaques, solicitors for the first, second, third and fourth respondents, advising that their clients have no interest in pursuing the orders of the Court of Appeal in this matter. The first, second, third and fourth respondents will submit to the orders of the Court in respect of this appeal save as to costs and would wish to be heard in relation to any application by the appellant for costs of the appeal or costs in the court below.

I also have a certificate from the Senior Registrar dated 24 July 1995 stating that she has received a letter dated 14 July 1995 from Messrs Dibbs

Crowther & Osborne, solicitors for the fifth respondents, advising that their clients do not wish to make any representations at the hearing of this appeal. The fifth respondents will abide by any order of the Court other than as to costs and would seek to be heard on any question of costs.

Yes, Mr Einfeld.

MR EINFELD: May it please the Court. Your Honours, the orders of the Court of Appeal had, as their effect, the imposition of the restriction upon the use in criminal proceedings of information provided in civil litigation over a claim to the appellant’s privilege against self‑incrimination. The orders were made in the absence of any participation in the proceedings of the Crown prosecution authorities or any other representative of the Crown.

The appellant submits that the orders should be set aside for three principal reasons. Firstly, the orders necessarily involve an impermissible attempt to impose upon those charged with the administration of the criminal justice constraints upon the use of evidence that might otherwise be used in the course of a criminal prosecution. Secondly, we will submit that the attempt of the Court of Appeal to substitute for the privilege conditions intended to remove the jeopardy faced by the appellant failed because such orders were manifestly incapable of providing to the privilege holder conditions for his protection equating those afforded him by the exercise of the privilege and because, absent such equivalent protection or perhaps even if equivalent protection could be afforded, the intended substitution is in truth, we will submit, an impermissible derogation from the right to exercise the privilege.

Finally, it is the appellant’s submission that the Supreme Court had no jurisdiction whether as was suggested under the provisions of section 23 of the New South Wales Supreme Court Act or in its inherent jurisdiction to make the orders. It may be convenient, your Honours, if I were to take your Honours ‑ ‑ ‑

GUMMOW J: Do you mean jurisdiction or power, Mr Einfeld?

MR EINFELD: Under section 23, no jurisdiction. In terms of what was suggested to be the availability of inherent jurisdiction, no power under that jurisdiction to make the orders.

GUMMOW J: Thank you.

MR EINFELD: Your Honours, the orders of the Court of Appeal are set out in the appeal book at page 85 and it may be of assistance if I briefly take you to them. Initially, Mr Justice Powell had made orders which are set out, but I do not need to go to them particularly, commencing at page 44 of the appeal book, but the orders the subject of the debate before the Court of Appeal and the subject of this appeal are set out commencing at page 85. Your Honours will know that these were proceedings by clients of my client, their accountant, for the taking of accounts and the like arising from allegations made in the civil proceedings that he had misappropriate funds and property entrusted to him.

The orders fashioned by Mr Justice Handley and made by the court were that the defendant, the appellant, swear an affidavit, in paragraph numbered (i), setting out all of his assets which he alone, or with others, owned or with respect to which he claimed to be beneficially entitled and the name or names of others with whom he held them if that so be. Secondly, any such asset or assets towards the acquisition, retention or maintenance of which or conduct of business with respect to which he had applied moneys entrusted to him by the plaintiffs or those whom they represented. And, significantly, in relation to each such assets, the amount of any moneys and the identity of any property entrusted to him by those entities. The orders set out on pages 86 and 87 reflect similar orders with respect to others of the plaintiffs.

There is a slight difference and I will come to it in a moment. It is perhaps doubtful that in proceedings of the kind these were there was, in any event, any power to make under the guise of Mareva orders or in aid of or in adjunct to Mareva orders the orders set out in (ii) because in essence they were requiring the defendant to give evidence, proof of which would have established the plaintiff’s case or may certainly be capable of establishing the plaintiff’s case in proceedings in which the plaintiff bore, of course, the onus of establishing the entrusting of those assets and any breach of fidiciary or other duties borne by the defendant.

Be that as it may order (iii) on page 87, your Honours, is a minor variant of the order made in the earlier case. In other words, it makes provision in respect of some specific funds which were, one assumes, said to be the subject of allegations as to the misappropriation by the defendant. Then their Honours made orders 3, 4 and 5 of a procedural kind and then in paragraph 6 at page 88 of the appeal book made orders which were, it seems, designed or intended by the Court of Appeal to afford to the appellant protection of a kind which obviated the need for him then to exercise the privilege in circumstances which, of course, we will come to shortly, the court having - at least in the principal judgment of Justice Handley - it would seem having taken the view that the court was empowered to make orders of a kind made by the House of Lords in Istel v Tully to which we will take your Honours shortly, considered that the concurrence of the Crown in the orders made as was required and seen as a critical element in the House of Lords decision was not necessary, but that in order to afford protection to the defendant to ensure that any information revealed in the affidavit not be used in criminal proceedings against him, made orders in (i) on page 88 that the solicitor for the plaintiff who was to take possession of the copy affidavits sign a notice so as to ensure that the undertakings of the court which follow were properly complied with. Just when and in what circumstances that notice was to be filed was not made clear.

At page 89 then I have set out the undertakings which the Court of Appeal required; namely: “a written undertaking to the Court signed by the solicitor” on behalf of the solicitors on the record, or the solicitors for the plaintiff, and they and their agents, and the like, would not disclose the copy affidavits, or any other copies or information therein, to any person other than one of their partners or clients, or other solicitors for the plaintiffs, nor would they part with possession of such documents:

whether pursuant to a subpoena, search warrant, or otherwise, except to their counsel, without the leave of a Judge of the Equity Division.

May I just interpolate ‑ I will come back to it later ‑ that one puzzles at the dilemma faced by the solicitor at whose office arrives a sergeant of police armed with a search warrant, and says, “I’m here to seize these documents”, and this injunction would constrain the solicitor from parting with the documents without first obtaining the leave of a judge of the Equity Division, depending, I suppose, on such mundane matters as the time of day at which the police officer arrivesd or whether the relevant solicitor was in the office at the time, all sorts of practical problems might arise.

DEANE ACJ: It is an undertaking, not an injunction.

MR EINFELD: I am sorry, your Honour is right; it is an undertaking, I appreciate that.

DEANE ACJ: Was the undertaking proffered, or was it simply stipulated?

MR EINFELD: No. It was stipulated, your Honour, as we understand it. I do not believe that the written undertakings have actually ever reached the court, by reason of this appeal having been brought. Be that as it may, as I say, I will return to it later, but the very notion comprised in the undertaking required poses a serious number of practical problems: what if the policeman sees the documents in the meantime, or opens the envelope whilst the solicitor is off obtaining leave, and so on.

In any event, there was then a similar undertaking, set out at (iii), designed to ensure that the plaintiffs, or the plaintiffs themselves, or the entities with which they are associated not disclose any information contained in the documents, and the very form of those undertakings poses a problem which we say is really insurmountable in the context of courts’ attempts to make such orders and fetter the kind of use that might be made of them by the criminal courts, and one wonders what might happen if the plaintiff, becoming so seized of such information, were in fact to telephone the police or prosecuting authorities, even anonymously, and discloses information which might come to be used, one would never ever know whether the undertaking had breached or the information, which might ultimately come to be used in a criminal prosecution, had emanated by reason of a breach of the undertaking.

TOOHEY J: Mr Einfeld, I take it at some stage you will identify for us with some precision the privilege against self-incrimination that is said to arise here.

MR EINFELD: Yes, your Honour.

TOOHEY J: I am not asking you to deal with it now, but as you reach it.

MR EINFELD: Yes, if your Honour pleases. Your Honours, may I then take your Honours to the principal judgment below to indicate the process by which the court below reached its conclusions. At pages 71 to 72 of the appeal book Justice Handley addressed a submission that was made on behalf of the respondents that, by reason of the fiduciary relationship between clients and accountant, the privilege was not available to the accountant, and his Honour, as had the trial judge, rejected those submissions. At page 72 at about point 55 on the page his Honour dealt briefly with the jurisdictional question, if I can call it that, recording that upon the grant of leave to appeal from the interlocutory order, the court granting leave had imposed various orders of a restricting kind by dint of either the inherent jurisdiction or section 23.

Then, at page 75 at point 45, his Honour returned to the question of jurisdiction and set out provisions of section 23 at the top of 76 and a passage from Riley McKay at 76, and then at about point 35 on page 76 he commences to deal with this question of the capacity of the court to make orders of the kind ultimately made and examines the various authorities to which we will return during the morning and then makes reference to various statutory provisions by which Parliament has abrogated or modified the right to the privilege at page 79 - I will return to that - and then makes reference to the decision of the House of Lords in AT&T Ltd v Tully at page 80.

And it is significant for present purposes, your Honours, to pause for a moment at page 81, where his Honour cites a passage from the speech of Lord Ackner in Istel Ltd v Tully, and at point 15 in particular, the passage from his Lordship’s speech:

I would allow this appeal on the ground that the courts are entitled to substitute some different protection in place of the privilege against self‑incrimination, providing that such protection can properly be considered as adequate.

Then reference is made to the fact the Crown authorities:

must unequivocally agree not to make use, directly or indirectly, or material.....It must remain entirely a matter for the discretion of the prosecuting authorities as to whether they are in a position to and are prepared to give an assurance. Without such an assurance the court would not be able to provide a substitute protection which was adequate”.

His Honour said:

I gladly follow so much of this decision as holds that “the courts are entitled to substitute some different protection in place of the privilege against self-incrimination, providing that such protection can properly be considered as adequate.”

Then his Honour proceeds:

However, and with very great respect, I am not persuaded that the effective exercise of this jurisdiction depends on the agreement of the prosecution authorities......On the contrary it appears to me that if the courts can make effective orders with the consent of the prosecution authorities which protect defendants against incrimination as a result of compulsory disclosures in civil proceedings, they must be entitled to make such orders without such consent.

Now, just pausing there, it is important to note in this case that not only did the prosecuting authorities not consent to the orders, they were not given notice of the proceedings. Apparently, they were not heard on the question and there was no participation from the Crown authorities in this process at all. What his Honour did was then to reason, as he commences to do at the top of page 82 - - -

GUMMOW J: If I can just interrupt you for a minute, Mr Einfeld?

MR EINFELD: Yes, certainly.

GUMMOW J: As you understand it, would his Honour’s reasoning deal with the position of federal prosecuting authorities?

MR EINFELD: No, it does not, and one of the matters we propose to raise is that very matter, and it does not - that is one of the problems. Indeed, in this very case, we even now face - although we have been convicted on some New South Wales judges -we even now face the possibility of Cheques Act offences and Tax Acts offences and Corporation Law offences if information, which we might be forced to reveal, may be seen in a particular light, and that is a very real problem.

McHUGH J: All I was going to say, could the New South Wales civil court punish the Federal Director of Public Prosecutions for contempt for calling one of the plaintiffs as a witness in a federal prosecution in the Federal Court?

MR EINFELD: We would submit not. It is a very real problem. The Federal Director of Public Prosecutions will be discharging his statutory duties imposed upon him to call relevant witnesses in those proceedings, and if these plaintiffs become aware, as they will by dint of these undertakings, of the information in the affidavit, not only is there the risk, if not the likelihood, they will as witnesses sworn to tell the truth reveal that information in court, and there is a very real question as to their revelation of the material before proceedings commence.

McHUGH J: But what is the - - -

MR EINFELD: And, indeed, even that is not the problem, because the same problem arises in a New South Wales prosecution.

McHUGH J: I must say I have a much deeper problem about this. I just do not understand where the courts get the power to say, “Well, we are just going to take away this right you have. We are going to give you another right.” Does Lord Ackner or anybody else say where the courts get this power?

MR EINFELD: To the contrary, Lord Wilberforce had said in the Rank Film Case in 1982 that the civil courts do not have that power. Lord Ackner, in fact, acknowledges it but says this is a very special case because the Crown prosecution authorities have come along and consented to be bound or agreed not to use the information. One wonders in New South Wales, just whose consent is required. Is it the attorneys, or the Director of Public Prosecutions and what happens in any event if notice is given to the Director of Public Prosecutions, but a Crown prosecutor is seconded to commence the case due to illness of his colleague the day before and the information is not passed on. It has possible ramifications which,we will submit, just are insuperable.

McHUGH J: Anyway, it is cold comfort to the accused that the DPP has prosecuted for contempt while he is serving a sentence as a result.

MR EINFELD: He might even be in the next cell but it does not help him very much; exactly.

His Honour reasoned, as I said, at the top of page 82 or commences to reason that the teeth is given to this order or these orders by the availability of the use of the contempt power of a civil court with respect to any person. We note on the third line on page 82, “with knowledge of the injunction”, a problem in itself, we would submit, whereby they cause the order of the court to be thwarted. Then his Honour proceeds to deal with the question of the injunctive power or the contempt power and there is no need to deal with that for the moment. Then at page 83, point 25, his Honour reasoned:

With respect, I can discern no reason in principle why the prosecution authorities should be immune from proceedings for contempt of court -

the problem if they have that duty to do what this order seeks to restrain them from doing -

if they knowingly act to thwart or frustrate orders of a civil court and we were referred to no authority for that proposition. Moreover unless orders of a civil court are enforceable against the prosecution authorities on this basis I cannot see how their consent which is not embodied in an order made against them can make any difference.

With respect, that poses perhaps a supervening problem in this case:

Orders framed to prevent the prosecution authorities from obtaining the benefit of compulsory disclosures.....would not prevent them from taking independent action to secure evidence.

And so on, and then he made the orders.

Your Honours, may we turn to the first of our propositions which is that raised with me a moment ago by Justice McHugh and that is this question as to whether the civil court can make orders which have the effect of binding the criminal authorities from fulfilling their prosecutorial role and the criminal courts from fulfilling their function. Your Honours, it is our submission that the orders made below involve an impermissible intrusion into the criminal process, but if the orders are to be given any effect, your Honours, the orders are an attempt to fetter, firstly, the discretion of the prosecution authorities and, secondly, the capacity of the criminal court to determine what evidence will or will not be adduced or admitted into evidence in a particular case.

In our submission, it is necessary to recognise the problem created with respect not just to the information contained in the affidavits themselves but the derivative use that might be made of that information.

However well‑intentioned the civil court will be to assist the plaintiffs in what may be perceived to be a perfectly legitimate and proper course the real problem in a practical sense is not just with the contents of the affidavit but what use may be made of that to ascertain other facts which have the tendency to incriminate upon prosecution.

GUMMOW J: There is a threshold problem, though, in these Anton Pillar orders and Mareva injunctions though. The threshold problem is that privilege of the party who is required to make an affidavit disclosing these materials and unless that is dealt with by statute as it is some jurisdictions in some respects there is a problem.

MR EINFELD: Yes, that is why I paused when I went through the orders,

GUMMOW J: Yes, but it is of enormous day‑to‑day importance. I think all across this country courts are making these orders requiring pirate counterfeiters of video recordings and the rest of it to make affidavits saying where they got them from and that that is said to be something that could be done on imposition of a condition that the affidavit will only be used, et cetera, with leave of the court, full stop.

MR EINFELD: Yes. In Rank Films, the House of Lords said you cannot do it. In Istel v Tully, the Court said you could in this exceptional case.

GUMMOW J: The problem has changed, because in Rank they said, “Oh, well, these crimes are pretty petty”.

MR EINFELD: Yes, that is true in that particular case.

GUMMOW J: That has greatly changed now; there are very heavy sanctions against counterfeiting ‑ fines of many thousands of dollars and they are, in fact, prosecuted.

MR EINFELD: Of course, as your Honour knows, in England, the matter has been dealt with statutorily; here it has not been.

GUMMOW J: I think I am right in saying it has not been here.

MR EINFELD: That is right.

GUMMOW J: So, there is the threshold question here which is of enormous practical importance.

MR EINFELD: It is and one sees in the cases a recognition of the fact that the greater be the inequity, the heinous nature of the offence, the greater is the need for the exercise of the privilege to be sacrosanct. It is a very real problem. Unless the Parliament intervenes, the problem remains. The problem has been recognised in many cases but in one of the decisions we will just refer to briefly in passing, the decision of the Chief Judge in Equity, Justice Waddell in a case called BPA Industries which we will come back to, his Honour made a very loud, one would have thought, cri de coeur in the last sentence of his judgment, if I remember it rightly for parliamentary intervention, now slightly less than a decade or so ago, which has apparently fallen on the proverbial deaf ears. It is, therefore, essential, his Honour said in order to preserve a necessary remedy in the case of this kind that the provisions of the Supreme Court Act section 72 in the United Kingdom be adopted in New South Wales as soon as possible.

GUMMOW J: There is a judgment of Justice Wilcox which is often used in the Federal Court in the case of Warman 11 FCR, which is ‑ ‑ ‑

MR EINFELD: It is dealt with in a number of ‑ ‑ ‑

GUMMOW J: Yes, but it is used to get around the problem. I am not sure it does.

MR EINFELD: I do not think it does. We submit it will not.

GUMMOW J: That judgment is used in day-to-day reliance, I can assure you.

MR EINFELD: Both Justice Sheppard and Justice Ryan in the Federal Court, post‑Reid v Howard in the Court of Appeal of New South Wales, have declined to follow Reid v Howard and declined to make such orders after addressing the passages from Justice Wilcox’s decision that are usually cited. We will come to that in due course.

Your Honours, the analysis in the cases commences with Rank Film ‑ the passages are well known and they are cited later, but we should just take your Honours to the decision of the House of Lords. In Rank Film Distributors Ltd v Video Information Centre (1982) AC 380, allegations of infringement of copyright, the passages to which we wish to take your Honours commence at page 439 in the speech of Lord Templeman where, between G and H, his Lordship said:

The main question before this House is whether Mr Lee and Ms Gomberg can avail themselves of the privilege against self‑incrimination in order to deprive the appellants of an important part of the relief which they seek. It may seem to be a strange paradox that the worse, ie the more criminal, their activities can be made to appear, the less effective is the civil remedy that can be granted by that, prima facie, is what the privilege achieves. The orders under appeal are elaborate.
A summary of their effect is sufficient.

I will not take you to all of them, your Honours, but at A they
included:

Injunctions from making or dealing with illicit copies.....An injunction restraining the respondents from warning third parties.....An order relating to the identity of those concerned.....An order

“that the defendants....forthwith disclose.....the names and addresses of all persons firms or companies known to them to whom.....they have supplied the illicit copy films.....who have supplied or offered to supply -

the films and the like, or who have offered to supply them to them. And in (5):

An order:

“that.....within 4 days -

they make

an affidavit setting forth the information which they are required to give pursuant to the foregoing part -

attaching all -

labels books -

etcetera, the very information which one would have thought might incriminate them but prove the plaintiff’s case or tend to prove the plaintiff’s case.

TOOHEY J: Mr Einfeld, is it the Mareva nature of the orders that you say gives rise to the problem here.

MR EINFELD: Not necessarily, no.

TOOHEY J: Take an ordinary situation: let us go back to square one where the beneficiary sues the trustee, the solicitor and accountant, whoever it might be, for money alleged to have been dealt with in breach of trust, and in the course of that litigation discovery is sought, interrogatories are administered. What is the position regarding self-incrimination in that context?

MR EINFELD: It is well established that the fiduciary is able to avail himself of the self-incrimination privilege. As I as say, it has been dealt with in the Bishopsgate Case. It is addressed by Justice Handley below. I will come back to that in due course. But the problem, as we say, is one that cannot be solved otherwise than by statutory intervention. It will always be there. It is a major problem. It is recognised in the cases as a major problem. It works as an inevitable unfairness on the plaintiffs. It is a case of balancing the public interests that we have seen in other cases but arises in a self-incrimination context. Again recognised certainly in respect of legal professional privilege in this case, recently in Carter’s case, but also in Sorby and the other cases which address squarely the privilege of self‑incrimination.

TOOHEY J: Well, your argument - - -

MR EINFELD: The answer is, your Honour - - -

TOOHEY J: Sorry, go ahead.

MR EINFELD: The answer is that in answering such interrogatories the interrogated party must answer the questions, save that where the answers may intend to incriminate, he is entitled to exercise his right to the privilege.

TOOHEY J: So your argument is that the privilege extends throughout the entire course of the litigation; it is only the particular nature of the orders in this case that have brought the matter before the Court, but the principles, I take it, you would say are the same, where self‑incrimination is relied on at any stage in the litigation.

MR EINFELD: Yes, that is so.

TOOHEY J: Yes, I understand now.

MR EINFELD: Well now then ‑ ‑ ‑

DEANE ACJ: Do you not need to distinguish a little more precisely between your arguments based at jurisdiction or power and your arguments based upon wrong exercise of jurisdiction or power?

MR EINFELD: Yes, they are quite separate arguments.

DEANE ACJ: Yes. If, for example, the court possesses power or jurisdiction to make these orders, the fact that it wrongly overrides the privilege against incrimination will not, one would anticipate, be a matter of jurisdiction or power; it will be a matter of an obviously mistaken exercise of them. When the court purports to direct that plaintiffs give undertakings, as distinct from basing the exercise of jurisdiction upon undertakings, one moves into a different area which is one of jurisdiction or power. Well now, at present I am a bit confused as to precisely which area the arguments go to.

MR EINFELD: As your Honour please. I was dealing presently with the question of, as it is put in the cases, whether the civil court has power to make orders which purport to bind the criminal courts. The distinction is, in this case, that the actual orders of the court on their face do not purport to do that but they have the effect of achieving that and, to that extent, with respect, your Honour ‑ ‑ ‑

DEANE ACJ: It does get confused because you are saying they are proceeding on the basis that the effect of what they are doing would be this, whereas that no only would not be the effect, it is beyond their jurisdiction to make it the effect.

MR EINFELD: I am jumping ahead a little, but the Court of Appeal appears to have thought that it had power to make, or jurisdiction to make, these orders under section 23 of the Supreme Court Act. It would be our submission that in order to derogate from or abrogate the privilege, consistently with authority in this Court and elsewhere, that can only be done by statute by express statutory language or necessary implication, clear parliamentary intention. One just cannot find it in a section like section 23; to the contrary, it is expressed in the widest possible terms.

DEANE ACJ: Yes, I follow. One problem we have in this case, and it is our problem and not your problem, is that in the absence of any submissions on the part of the respondent, if you are entitled to succeed there is a lot to be said for the approach that we should determine the case on the narrowest basis possible rather than getting involved in the questions of great general importance to which Justice Gummow referred, for example.

MR EINFELD: We accept that, your Honour. That is a problem.

DEANE ACJ: But, as I said, it is really our problem and not yours.

MR EINFELD: One of the reasons why I was perhaps intending to go to the cases a little bit more fully than I might otherwise have done is because of the absence of the respondents here, but not all the orders in the case have been framed the same way. These orders were fashioned deliberately to avoid, it would seem, the problems created by some of the other cases and that consideration itself leads to the confusion or the potential for confusion which your Honour raises with me. There is on the one hand a distinct jurisdictional question, on the other hand a question of exercise of the power, and in some measure they tend to overlap, particularly where one comes to this question of whether or not the civil court has power to make an order which has the effect, although not in terms addressed to the question of binding prosecutorial authorities or the criminal courts. Your Honours, at page 441E of the report Lord Templeton says:

However, it is only too clear (and I deliberately use the language of reluctance) that supply of the information and production of the documents sought would tend to expose the respondents to a charge of conspiracy to defraud.

This after referring to the statutory intervention of Parliament in some respects, particularly in relation to copyright.

GUMMOW J: You mean Lord Wilberforce.

MR EINFELD: I am sorry, I said Lord Templeton. My apologies. Lord Wilberforce, thank you. At page 442E in a now oft‑quoted passage Lord Wilberforce said:

In the most recent case, Riddick v Thames Board Mills Ltd, Lord Denning M.R. used the words “for any ulterior or alien purpose.” But it has never been held that these expressions, however wide, extend to criminal proceedings: if they did there would be no need for privilege. Mr. Nicholls was therefore obliged to suggest that even granting these, the courts had power positively to decide in a particular case, as the counterpart of the obligation to disclose, that any matter which is compulsorily disclosed as the result of the court’s process should be inadmissible in evidence. But I cannot accept that a civil court has any power to decide in a manner which would bind a criminal court that evidence of any kind is admissible or inadmissible in that court. Certainly a criminal court always has a discretion to exclude evidence improperly obtained if to admit it would unfairly prejudice a defendant. But to substitute for a privilege -

and that is the word used later by Lord Ackner and now by Justice Handley:

But to substitute for a privilege a dependence on the court’s discretion would substantially be to the defendant’s detriment. That the civil court has not the power to declare evidence inadmissible is strikingly shown by section 31 of the Theft Act 1968 which contains an express provision by which a person is obliged to answer questions put in proceedings for the recovery of property and to comply with orders made in such proceedings and which states that no statement or admission so made shall be admissible in evidence against the person concerned in proceedings for an offence under the Act.

Now, just pausing there, your Honours, just to hark back to it, his Lordship says:

to substitute for a privilege a dependence on the court’s discretion would substantially be to the defendant’s detriment.

That passage, we interpolate in passing, is at the heart of the second principal submission we make which is that to substitute, or attempt to substitute for the exercise of the privilege, conditions designed to achieve the equivalent protection but which, in truth, depend upon the exercise of the court’s discretion is, in fact, a derogation from the privilege itself and is impermissible without statutory intervention, we will come to submit, but I will just pause to draw attention to that sentence in that context. At 443, at the top of the page:

The appellants’ submission amounts to a request to the courts by judicial decision, to extend this statutory provision to civil proceedings generally, or at least to these proceedings. But this, in my opinion, the courts cannot do.

Reference is then made to Riddick again, and at C:

There are some further points on this aspect of the case. First, I do not think that adequate protection can be given by extracting from the plaintiffs, as a term of being granted an Anton Piller order -

we would interpolate again, or orders of this kind -

an undertaking not to use the information obtained in criminal proceedings. Even if such an undertaking were binding (see to the contrary Triplex) the protection is only partial, viz against prosecution by the plaintiff himself. Moreover, whatever direct use may or may not be made of information given, or material disclosed, under the compulsory process of the court, it must not be overlooked that, quite apart from that, its provision or disclosure may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character. In the present case, this cannot be discounted as unlikely: it is not only a possible but probably the intended result.

And then his Lordship dealt with possibilities that had been suggested of having proceedings conducted in camera and that such procedure, his Honour said, would be totally alien to the procedures of public hearing of issues, et cetera. And then reference made to procedural considerations. I think, whilst we would be pleased for your Honours to read them, there is no need for me to do so now. Lord Fraser dealt with the matter in question at page 446D:

At one stage, the argument seemed to depend on the possibility that the court which ordered the discovery might place an express restriction on the use of any information disclosed. In my opinion, any argument on that basis must be rejected. A restriction by the court making the court would, no doubt, be effective to bind the party who obtained the order, but it can hardly be suggested that it would be effective to prevent a prosecutor in the public interest from using, or an English criminal court (a fortiori a Scottish criminal court if a conspiracy were prosecuted in Scotland) -

and we interpolate federal proceedings here -

from admitting the information in evidence at a trial. All evidence which is relevant is prima facie admissible in a criminal trial, although the trial judge has a discretion to exclude evidence which, though admissible, has been obtained by unfair means.....But it is obvious that a person who has to rely on an exercise of judicial discretion is in a less secure position than one who, by relying on the privilege, can avoid providing the information in the first place.

MR EINFELD: Then reference is made at page 447 in the last paragraph on the page:

if the incriminating information given on the discovery or in answer to interrogatories were disclosed subsequently in open court in the civil action, it might be heard and might then be used in a criminal prosecution against the defendant.

His Lordship touches upon a very important question. Once this information is disclosed by sworn affidavit and revealed to the plaintiffs, what are the plaintiffs expected to do with it? Presumably they are expected to make use of it for the purpose of achieving success in their litigation. Such proceeding by way of cross-examination or more particularly by dint of the information gleaned, further investigation or production of documents or subpoenaing of documents from third parties perhaps, banks, others, tendered in open court necessarily puts the same information either directly contained in the affidavit or derived therefrom into the open arena.

How is any member of the public or any policeman or anyone else sitting in court bound by the undertakings given by the plaintiffs in this case? So the problem has its own inherent difficulties.

McHUGH J: There is a problem about bringing the administration of justice into this disrepute as well because the investigators, by independent means, may come on the same evidence. They get the evidence quite independently of the court proceedings. The person in the position of the accused then thinks that there has been some breach of the undertakings ‑ ‑ ‑

MR EINFELD: How does he ever tell?

McHUGH J: You cannot tell. The whole administration ‑ ‑ ‑

MR EINFELD: In some states in the United States, your Honour, I recall there being a legislative injunction upon the prosecuting authority where orders of this kind have been made to discharge an onus of establishing that the information came from other sources rather than the affidavit. There is no such legislation here, of course, but obviously the problem is a real problem. It has been recognised. In that context, if it is of any assistance, we can give the Courts a reference to a decision of the United States Supreme Court in a case known as Kastigar v United States (1972) 406 USR 441 which deals with the problem.

Your Honours, the position, therefore, as stated by Lord Fraser and by Lord Wilberforce remained the law until the matter returned in AT&T Istel Limited v Tully (1993) AC 45, as far as the House of Lord dealt with the case, and we need to go to it. In the Court of Appeal reliance had been placed upon Rank Film and the orders sought were rejected by the Court of Appeal as unsustainable for the reasons adumbrated in Rank Film. The different view taken in the speeches of their Lordships in Istel v Tully was explained by the “exceptional fact”, as it was described, that the service of England had notified its acceptance of the orders proposed and consent not to produce any information derived as a result of them.

Lord Templeman addressed the question firstly at page 50 briefly, at the paragraph commencing just below E:

As a general rule a plaintiff is entitled to disclosure and discovery of all dealings and documents relevant to the plaintiff’s claim and the defendant is entitled to the like relief from the plaintiff relevant to the defence. In the present case disclosure by Mr and Mrs Tully of their dealings and documents with the affairs and money of Abbey and its subsidiaries will enable the plaintiffs to complete their investigation and to trace the fate of moneys paid by Wessex and moneys which were received or ought to have been received by Abbey and to recover such moneys.....All the allegations made by the plaintiffs are denied.....if there has been no fraud, the disclosure by Mr and Mrs Tully of their dealings and correspondence will not cause any harm.

And over the page, at 51 just below C, the line commencing, “agreed with Wright J.” ‑

Mr Tully is in effect saying that if he discloses his dealings with his assets or the moneys of Wessex and Abbey and if he furnishes copies of the documents relating to those dealings he will be providing evidence which may assist the police to prosecute him for the crime of embezzlement. As is always the case with the privilege against self‑incrimination, the greater the fraud or other wrongdoing of the person claiming the privilege, the greater, it is said, is his need for protection. The plaintiffs, not finding this submission very attractive, now appeal.

His Lordship returns to the theme at page 53 where, after dealing with factual matters, at B ‑ perhaps I should read from the top of the page. Lord Mustill had said in Reg v Director of Serious Fraud Office:

“the desire to minimise the risk that an accused will be convicted on the strength of an untrue extra‑judicial confession, to which the law gives effect by refusing to admit confessions in evidence except upon proof that they are ‘voluntary’.”
This is a powerful reason for the existence of the privilege against self‑incrimination in certain circumstances. Indeed, in my opinion, the privilege can only be justified on two grounds, first that it discourages the ill‑treatment of a suspect and secondly that it discourages the production of dubious confessions. Neither of these considerations applies to the present appeal. It is difficult to see any reason why in civil proceedings the privilege against self‑incrimination should be exercisable so as to enable a litigant to refuse relevant and even vital documents which are in his possession or power and which speak for themselves. And it is fanciful to suggest that an order on Mr Tully to say whether he has received Abbey’s money and if so what has happened to that money could result in his ill‑treatment or in a dubious confession. I regard the privilege against self‑incrimination exercisable in civil proceedings as an archaic and unjustifiable survival from the past when the court directs the production of relevant documents and requires the defendant to specify his dealings with the plaintiff’s property or money.

Having have read that passage, as it were, against myself, Lord Templeman went on at page 54B to say:

In the present case the proceedings do not fall within section 31 of the Act of 1968 and the criminal charges to which Mr Tully may be exposed do not fall within that Act. But in considering the privilege against self‑incrimination it is difficult to see any logical distinction between an order for discovery and disclosure where the defendant has stolen the plaintiff’s property and an order for discovery and disclosure where the plaintiff is seeking damages for fraud in dealings by the defendant with the property or moneys of the plaintiff.

His Honour then went on to deal with section 72 of the United Kingdom Act by which the privilege had been removed in the cases identified, and then at 55F his Lordship said:

Having regard to the fact that Parliament has not abolished the privilege against self-incrimination Mr Tully would be entitled to rely on that privilege if but only if and so far as compliance with the order of Mr Justice Buckley would provide evidence against him in a criminal trial.

Et cetera. Usual tests - I do not need to trouble your Honour with those. Deals with the decision In re O, at the top of page 56. Perhaps if I just read at the foot of page 55:

In In re O (Restraint Order: Disclosure of Assets) (1991) 2 QB 520 the Court of Appeal affirmed the making of a disclosure order to which the privilege against self-incrimination applied but attached to the order a direction in the form utilised by Mr Justice Buckley -

in the instant case before the House of Lords.

In In re O the Crown Prosecution Service was a party to the proceedings and consented to the order. Mr Justice Wright struck out paragraphs 18 and 19 of the order of Mr Justice Buckley despite paragraph 33 because “the Crown Prosecution Service are not a party, and no order I make is capable of binding it.” The Court of Appeal agreed (1992) QB 315. Lord Donaldson of Lymington M R considered In re O and the decision of this House in Attorney General v Times Newspapers Ltd ‑ ‑ ‑

GUMMOW J: Mr Einfeld, is there anything in any of these speeches which founds the result on any particular principle, as distinct from expediency in the particular case? Which principle could be extrapolated and used somewhere else?

MR EINFELD: The principle is that the civil courts do not have power to bind the criminal courts, but apart from that, no. There is certainly no principle which can be extracted from the cases which would suggest to the contrary, that is that the civil court will have such power or that any such order will be effective. I just wanted to emphasise in particular the very sentence at E, following the citation of the passage of Lord Donaldson’s judgment:

I agree that the Crown Prosecution Service cannot be bound against their wishes.

Now that is the very sentence that underlies the attempt by the Court of Appeal below to circumvent this problem, because the Crown Prosecution Service was not consulted - the Crown Prosecution authorities in New South Wales were not consulted - as to the making of these orders, which the Court of Appeal was moved to impose, or conditions which it was moved to impose. So that Lord Templeman, for one, considered that absent that consent there was no way in which the orders could be given any practical effect.

Perhaps I should refer your Honours to the passage at B at the top of page 57:

In view of that letter it is clear that the Crown Prosecution Service do not seek to employ any of the material disclosed by Mr Tully in compliance with the order of Mr Justice Buckley, but of course the Crown Prosecution Service can use any material which the Crown Prosecution Service have already obtained -

et cetera.

GUMMOW J: Is the Crown Prosecution Service statutorily based?

MR EINFELD: I believe so, your Honour, yes that is right. May I just say, in answer to something your Honour the presiding judge put to me earlier, that narrow ground may be enough, we would submit, to dispose of the orders below, because if the statements in the House of Lords in Istel Ltd v Tully, as they qualified those preceding them in Rank Film be correct, then the absence of the consent of the Crown Prosecution authorities in New South Wales in this case invalidates the making of the orders.

DEANE ACJ: A fortiori, as Justice McHugh put to you, the Commonwealth prosecutes itself.

MR EINFELD: Indeed. Lord Griffiths regarded, at page 57, the privilege against self‑incrimination is in need of radical reappraisal but said that:

It is, however, deeply embedded in English law and can only be removed or moderated by Parliament. As the speeches of your Lordships show Parliament has in recent years made many inroads into the privilege in a number of statutes.

And, we observe, as they have in New South Wales and other States of the Commonwealth here:

In civil actions, as this appeal demonstrates, the privilege can be claimed to thwart the claims of victims of fraud. I can for myself see no argument in favour of the privilege against producing a document ‑

et cetera. However, having said that, his Lordship proceeds at page 58 to express at line B considerable doubts about the wisdom of the order proposed:

Criminal financial fraud on a vast scale has emerged as threat to the financial health of the community. Those who commit these crimes must be pursued most vigorously under the criminal law; if they are allowed to get away with it others will take encouragement to follow their example. Your Lordships accept that a civil court should never make an order that will inhibit the processes of the criminal law ‑

and one assumes by its terms or its effect ‑

but regard the letter written by a Principal Officer in the Crown Prosecution Service as a sufficient assurance that the prosecution will be placed at no disadvantage if pursuant to the order of the court the defendants produce a number of incriminating documents that cannot be used in a prosecution.

In the next paragraph, his Lordship makes the important point, we would submit, and it is difficult to know just whose consent will be adequate and he addresses the question of problems of how police are bound and the Director of Public Prosecutions or the Director of the Serious Fraud Office might be an appropriate person if his consent is required. He says at F:

It is only in such circumstances that I would feel assured that the matter had received consideration at the highest level and that there was no risk that the criminal law would be impeded.

Lord Ackner then cites the judgment of Lord Donaldson in the Court of Appeal at page 59 where his Lordship had said at C:

It is accepted that no civil court ‑

and then refers to Lord Wilberforce’s words ‑

‘has any power to decide in a manner which would bind a criminal court that evidence of any kind is admissible or inadmissible in that court’ ‑

Your Honours, that embargo is expressed in terms of power rather than exercise of power and perhaps it is just one of those areas that, in one sense does involve power and another sense, where the order in terms does not contain an express prohibition but has an implicit one that we may spill into the area of exercise of power.

Lord Ackner at line G queries, perhaps, the last step in the reasoning of Lord Donaldson but that does not impact upon the earlier propositions expressed in the Court of Appeal.

Your Honours, the passages to which Mr Justice Handley came more directly commence at page 62 of the report at point 5 and 6 where his Lordship said:

I, of course, accept that if the privilege against self-incrimination is to be abolished or abridged, then this must be by Parliament, as has occurred in a number of statutes.

It deals with passages from Cross and Rank Films if I can be permitted to pass to the next page at C, in support of a submission about putting steps:

“in train a process which may lead to incrimination” the defendants rely on the observations of Lord Wilberforce in the Rank Film case when considering the adequacy of the protection of the undertaking which was there sought to be imposed as a term of the grant of an Anton Piller order. To my mind it is clear from the terms of the third paragraph of the Crown Prosecution Service’s letter, that it is accepted that the order restricts them, in any prosecution which they decide to initiate, to utilising material already obtained or other material obtained independently of that disclosed in the High Court civil proceedings.

As I mentioned earlier, that only masks an enormous practical problem. How does the accused at his trial know whether the information has come from those other sources or from the disclosed material? Next paragraph:

I should perhaps add for completeness sake that it was urged upon your Lordships that there was always a possibility of leak -

I do no need to proceed with that. Next paragraph:

For the above reasons and those contained in the speech of my noble and learned friend, Lord Templeman, which I have had the privilege of reading in draft, I would allow this appeal on the ground that the courts are entitled to substitute some different protection in place of the privilege against self-incrimination -

we would submit that ought not be the law here -

providing that such protection can properly be considered as adequate protection.

Our submission is it is unlikely that it can ever be but it certainly was not in this case:

I would reject the submission made to the Court of Appeal that so long as the terms of paragraph 33 had been brought to the notice of the prosecution authorities they would be unable to adduce in a criminal court evidence disclosed in compliance with the order.

We observe that was not even done here:

Not only must the prosecuting authorities have notice of the propose order but they must unequivocally agree not to make use, directly or indirectly, of material divulges as a result of compliance with the order. It must remain entirely a matter for the discretion of the prosecuting authorities as to whether they are in a position to and are prepared to give an assurance. Without such an assurance the court would not be able to provide a substitute protection which was adequate.

I will come to that again when I come to the second principal submission, because there have been suggestions - in a different context reference is made to the proposition by his Honour Justice Toohey in Carter that what perhaps might be thought in this context to suggest that if, as the Court of Appeal did here, an attempt can be made to fashion orders which do not, if is said, derogate from the right but rather remove the factual circumstances which expose the defendant to the risk of incrimination then the privilege for invoking - I am sorry, the occasion for the invoking of the privilege then disappears. It will be our submission, inter alia, by reason of the very sentiments there expressed that that just cannot be done. It probably cannot even be done - - -

TOOHEY J: The order in this case does not in terms bind the Crown, does it?

MR EINFELD: No. That imposes a greater problem, not a lesser problem.

TOOHEY J: Surely that may be the case. What the judgment does suggest is that for the Crown to rely upon the material that is disclosed pursuant to the order might expose someone to contempt proceedings.

MR EINFELD: Yes. Who, we do not know.

TOOHEY J: No. I am just wondering whether in one sense we have been brought into the matter a little earlier than is necessary. I understand the force of your argument but in terms the order does not bind the Crown. You would argue nevertheless that it constitutes an attack on the privilege against self‑incrimination.

MR EINFELD: Undoubtedly, and when your Honour says too early, until what point in time does one wait? But for this very hearing, this very appeal, by now the plaintiffs would have become possessed of the information and all of the risks that are addressed in even just the decisions that we have dealt with so far become real from that moment on. I will try not to be too long with this. Then Lord Lowry dealt with the problem at page 67D and E, the line commencing with the reference to “Ex parte Smith”:

Lord Templeman has given examples of Parliament’s encroachments on the principle (sometimes involving a measure of protection for the person compelled to make disclosure, and sometimes not) and Lord Ackner, quoting a passage from Cross on Evidence, has reminded your Lordships that the principle is not immutable. What one needs to recognise, as my noble and learned friends have done, is that the privilege against self‑incrimination must prevail, unless it has been modified or abrogated by statute.

Then at page 69, the very top of the page, having made reference to Lord Donaldson’s judgment in the Court of Appeal:

I respectfully agree, but I think that the Crown Prosecution Service letter has made all the difference.

That is agreeing with the proposition that the privilege must be given effect to. I will not read the next part. Then may I come to the passage commencing at paragraph E:

In agreement with the Court of Appeal, I do not consider that the order in this case leaves room for the extension to persons who are not parties of the doctrine expounded in Attorney‑General v Times Newspapers Ltd. I also consider that In re O. was a correct decision.....
It should, I think, be emphasised that the present decision of your Lordships does not represent a breakthrough in relation to the principle against self‑incrimination; it is a decision on its own facts in the light of that principle. Therefore, if reform of that principle was, as I believe, desirable before this decision, it is still needed in several respects which have already been recognised, such as the present inadequacy of section 31 of the Theft Act 1968, the illogicality of protecting pre‑existing documents, the inconsistency between statutes which do and statutes which do not offer protection when material has to be disclosed and the uncertainty as to making use of material discovered by following up admissions which cannot themselves be adduced in evidence. The critical importance of the Crown Prosecution Service letter has highlighted another point. Without having enough knowledge to judge its magnitude, I can foresee a real problem for the Director of Public Prosecutions and her ancillary services if they are to be expected to join in applications or to provide undertakings or letters for the purpose of facilitating parties in complex civil proceedings who will naturally be anxious to achieve the maximum disclosure by their opponents. Numerous requests for this purpose could impose an intolerable burden and not all of those requests would admit of a ready answer, having regard to the Director of Public Prosecution’s duty to prosecute and to make use of the most cogent evidence, particularly in a very serious case of great notoriety. Here again, it seems to me that there is not only an opportunity but a necessity for Parliament to give the problem its urgent attention.

With great respect the observations there made are, we would submit, self-evident.

Your Honours, Istel v Tully was followed, at least in time, by a decision of the Court of Appeal in In re Arrows Ltd (No. 4) (1994) Ch 452. I do not need to read, you will be relieved to know, very much of it. That was a case in which a director of the Serious Fraud Office was required to give an undertaking not to use transcripts obtained during bankruptcy proceedings. Lord Justice Dillon dealt with the matter at page 462G where he said:

Given, therefore, that the transcripts of Mr. Naviede’s examination under section 236 of the affirmations he made are admissible evidence against him in the criminal proceedings now pending against him, I find it surprising that the Chancery Division should be invited to restrict the use of that evidence in the criminal court. The starting point.....is.....Rank Film -

a judgement of Lord Wilberforce. The top of page 463:

A fortiori the civil court has no power to decide to what extent evidence which would be by statute admissible in criminal proceedings should be allowed to be used.
In reliance on that principle this court in A.T. & T. Istel Ltd. v Tully refused to included a Mareva injunction against the defendants which provided for disclosure a condition that no disclosure made in compliance with the order should be used as evidence in the prosecution of any offence alleged to have been committed by the person required to make the disclosure. The actual decision of the court in A.T & T. Istel Ltd. v Tully was overruled by the House of Lords but that was only on the very special ground that the Crown Prosecution Service had, by a letter before the hearing in this court, intimated that they had no objection to the proposed condition in the circumstances of that particular case. Lord Templeman said on this topic, “I agree that the Crown Prosecution Service cannot be bound against their wishes.”

Reference is then made again to Rank Film and to other decisions and at line F:

But no such general provision has yet been enacted by Parliament, and no one has suggested that there is a power in the civil courts to imply or impose a provision -

I note “imply” in the sense that this order was conditioned on undertakings of the kind we have looked at -

such as that in section 31 so as to fetter the use in the criminal courts of evidence given in civil proceedings where section 31 or a comparable limited statutory provision does not apply.
I cannot see, therefore, any basis on which the judge could have imposed the restrictions in section 2(8) of the Criminal Justice Act 1987 on the use by the Serious Fraud Office of the transcripts of Mr. Naviede’s examination and affirmations supplied to them by the liquidators. Moreover, I do not see how the judge could have had power to exact undertakings from the Director of the Serious Fraud Office in order to achieve a condition which he had no power to impose.

TOOHEY J: Could I just ask you this: why are you placing so much emphasis on the position of the Crown when the order itself does not purport to bind the Crown. I would have assumed that your argument was that if there is a privilege against self-incrimination and the privilege is invoked then that is the end of the matter.

MR EINFELD: Yes.

TOOHEY J: Even as between plaintiff and defendant, is your argument one that there is no way in which the Court can mould an order so as to ensure that information is made available to the plaintiff and to no one else.

MR EINFELD: Yes, certainly. In our written outline we have made reference to the fact that even in the case of a private prosecution, the same problem arises.

GUMMOW J: But did not - as Justice Toohey points out, is not this the way the case was put in the Court of Appeal really? I am looking at page 70, line 40.

MR EINFELD: When your Honour says, “put” in the Court of Appeal it was decided in the Court of Appeal.

GUMMOW J: It is said to have been put in the Court of Appeal. The principal challenge was based not on the direct use of the affidavits as evidence inter se, as it were, but on the indirect use the prosecution might make.

MR EINFELD: Yes.

GUMMOW J: It somehow got off onto that track.

MR EINFELD: That is true, but the answer is that the point is as good qua the plaintiff as it is qua any outsider including the prosecution authorities.

GUMMOW J: I am wondering why you are on track two not as well as track one?

TOOHEY J: You see, some of these cases you have referred us to are cases in which the order in terms purports to bind or extract an undertaking from the Crown but that is not the case here. I appreciate your argument that the Crown may be in contempt if it attempts to rely upon the material and the consequences that has, but essentially, is not your argument simply that the privilege having been invoked in civil proceedings, it must be given full effect to and the court cannot undermine the privilege by some sort of substitutionary order that it might make.

MR EINFELD: With respect, your Honour is correct.

McHUGH J: Well, I understand how you put it, but is not there a question of definition involved here? It is a question as to how you define the privilege. It seems to me that if you look particularly at Lord Lowry’s speech in Istel, he redefined the privilege by saying, it is a privilege “against exposing oneself to a reasonable risk of prosecution” at page 68 of his speech. So the concentration is not on the fundamental dignity of the human being being required to do something adverse to his interests or incriminate himself or an invasion of his or her privacy, but it is a privilege against exposing oneself to the reasonable risk of prosecution.

Then if you say, “Well, we can avoid the reasonable risk of prosecution by some means or other, then we can do what we want to. So we can make any order we like as long as that won’t expose you to a reasonable risk of prosecution.” Now, that is the way, it seems to me, that - or seems to me that underlies Istel’s Case. And, therefore, the orders that the Court of Appeal made and the purpose of them do have meaning and it is something I think, at least for my part - - -

MR EINFELD: I am sorry, “Do have”?

McHUGH J: They have meaning or relevance and you have got to, for my part anyway, address that issue.

DEANE ACJ: If I might interpose. That is made even clearer by Lord Ackner at page 63F, and when one takes into account that Lord Goff agreed with Lord Ackner, it is the effect of the decision itself.

MR EINFELD: Yes.

DEANE ACJ:

the courts are entitled to substitute some different protection in place of privilege against self-incrimination, providing that such protection can properly be considered as adequate - - -

MR EINFELD: There is no doubt about that. There is no doubt that is what underlies the reasoning in that decision. I will come to the submissions. What I was going to do, your Honours, what I was proposing to do - - -

McHUGH J: What I was putting to you - I am sorry, you finish.

MR EINFELD: I am sorry. You would have to answer Justice Toohey, Justice Gummow, Justice McHugh and now Justice Deane.

DEANE ACJ: No, you do not have to. I was just pointing an additional reference to what Justice McHugh had put to you.

MR EINFELD: Yes. Your Honour, there is no doubt that is what underlies the reasoning of Istel v Tully, we accept that. What I was doing was taking your Honours through the relevant cases both in England and here, and then going to deal with some of the matters that I actually will come to deal with when we go through the cases, including the problems Justice McHugh raised, but we do propose to submit to the Court that the real nub of the problem is twofold, particularly the real nub of the problem with that very passage that your Honour has just drawn my attention to, is twofold.

The first is that, in reality, even if one can fashion some perfect order so as to give equivalent protection to the defendant, or the potential accused, that he would achieve by exercise of the privilege that, we would say, is in truth a derogation of the right to exercise the privilege. I need to come back to that to make that proposition good. But the second limb of the problem, and perhaps the more pertinent one, is that it is impossible to fashion a perfect protection,and Lord Ackner acknowledges that very fact in the passages following the one your Honour read to me, by saying that without the guarantee by the prosecution that any such information would be used, you will never achieve that equivalent degree of protection.

We would say, even with the prosecution’s guarantee, the potential accused can still never have the same protection. So that although what was purportedly done by these orders, and by Justice Handley’s orders, was to attempt to remove, as it were, the substratum, the circumstances for the invocation of the privilege thereby removing the problem, the court cannot do it effectively. This has got nothing to do with the question of trying to fetter the - I am sorry, your Honour.

McHUGH J: This raises the question of jurisdiction and power, does it not, and how you define the privilege may on the one hand indicate that the courts have no jurisdiction to do anything in relation to the privilege;on the other hand it may be simply a question of power to take steps which could reasonably avoid a reasonable risk of prosecution. The reason I put it to you is, what is the privilege? Is it an incident of the presumption of innocence; is it an incident of the right to privacy; is it a fundamental human right, or is it simply, as Lord Lowry said, a privilege against exposing yourself to the reasonable risk of prosecution? Now, if it is the latter, you are in a very different area, it seems to me.

MR EINFELD: The courts in this country have expressed the privilege not in terms, as Lord Lowry does, but what I wanted to submit to your Honours was that it is not clear, we would submit, that the terminology used by Lord Lowry is intended as a definition of the privilege against self‑incrimination, from the very terms of the passage in which it appears. The nature of the privilege has been addressed in Sorby and Hammond and the other cases which I was going to come to in due course ‑ I do not want to get too distracted from my path ‑ ‑ ‑

McHUGH J: No, you deal with it, but it is a matter that is exercising my mind.

MR EINFELD: Certainly, your Honour. The privilege as it has been held in this Court is against the requirement to give evidence of matters not which may avoid a prosecution but may, within the ambit of any prosecution, have a tendency to incriminate. In other words, the question in reality is not one of avoiding prosecution at all, but to protect against the use of information in any prosecution which may eventuate. Now, we have ourselves expressed the privilege as an incident of the right to silence. As your Honours know, the privilege has been described in numerous cases in this Court as being a fundamental common law right, exorcisable only at the instance of Parliament. There is a suggestion in some of the cases, particularly by the President of the New South Wales Court of Appeal, that the right to this privilege and legal professional privilege is a fundamental human right. The Chief Justice in Carter expressed a different view but, in our submission, it is not necessary in this case to ‑ ‑ ‑

McHUGH J: That was legal professional privilege?

MR EINFELD: That was legal professional privilege, certainly, I am sorry, yes. It is not necessary in this case to resolve the question of whether the privilege against self‑incrimination is a fundamental common law right or a human right derived by reference to international convention or otherwise at all because, as a fundamental common law right a person giving evidence, let us say, in civil proceedings has a right to decline to answer a question whether or not there is on foot, that is in train, an existing prosecution, the answer to which may be used as part of a chain of evidence which may incriminate him upon that existing, pending, or future prosecution.

So, what I was seeking to say to your Honour was that although Lord Lowry does use that expression, we would submit that in the passage it is used it does not purport to be definitional. It is perhaps descriptive and it may indeed be loose, certainly in terms of the way the privilege has been expressed in Australia.

In a case such as the present, where a defendant is required to give evidence which may have a tendency to incriminate him, whether in a prosecution at the suit of the Crown law authorities of the State or the federal Crown prosecution authorities or at the suit of the plaintiffs individually on some private prosecution, really does not matter. I return to confess my sins that the reason we have concentrated in particular on this aspect of the problem rather than on the more general, stems partly from some observations made at the time of the leave application in this case, that this particularly was a critical question in which the Court might be interested, not that ought to have any persuasive powers at this stage but has led me to deal with it in extenso, I suppose.

It, more than any other, highlights the problem. Your Honour Justice Toohey is right to say to me that whereas in some of the other cases express reference is made in the orders to the criminal authorities and this one does not, but it is obvious that the reasoning of the court in imposing these orders was to fetter the use that might be made of the disclosed information or information derived therefrom by the prosecuting authorities in New South Wales . His Honour said not by extracting consent of those prosecuting authorities as was required in Istel v Tully because it does not seem to me that if you can do it with the consent it matters really whether you get the consent or not, but by use of the coercive contempt power ‑ which as I will come to develop very quickly in a few minutes ‑ we would submit, is a complete misconception because the purported use of the contempt power has all of its own problems.

TOOHEY J: The emphasis on those matters seem to me to detract from the more fundamental proposition that if the privilege is there and it is not to be undermined.

MR EINFELD: Yes.

TOOHEY J: I do not want to put your argument for you, but I would have thought that that really was the fundamental argument that you were addressing to us.

MR EINFELD: As your Honour please. The instance of the Crown authorities is but one instance of the fundamental problem and it is a fundamental problem that, in the broad, was addressed by Justice Gummow earlier, which is inherent in all of these orders.

GUMMOW J: The fundamental problem brings back the definition as has been put to you. On this question of definition of the privilege, are you going to take us to what Lord Mustill said in the Serious Fraud Office Case just before or just after Istel v Tully?

MR EINFELD: I am sorry, your Honour.

GUMMOW J: It seems to be on your list. It is (1993) AC 30. His Lordship seems to say there are six species of privilege. I am wondering how that squares with the Australian cases?

MR EINFELD: We will do that, your Honour. I am not trying to avoid that proposition. Can I do it ‑ ‑ ‑

GUMMOW J: No, but it is in that setting that Istel v Tully is then decided. That is what I have in mind.

MR EINFELD: Yes, your Honour. It is not quite right, your Honour, that Lord Mustill identified six types of privilege. This is the point I was making earlier. His Lordship is identifying six varieties of the right to silence, only one of which may be the privilege against self‑incrimination. The passage is dealt with in Istel v Tully at page 51 and Reg v Director of Serious Fraud Office, Ex p. Smith (1993) AC 1 and the particular passage extracted in the speech of Lord Templeman commencing at page 30 ‑ ‑ ‑

GUMMOW J: You will notice that in Istel v Tully at the top of 52, Lord Templeman says, between A and B:

This appeal is concerned with the second right to silence ‑

MR EINFELD: Yes. It is plainly not the first in the present context and we would submit it is the second which is consistent with the description that has been afforded the privilege in the decisions in this Court in Hammond and Sorby.

Your Honours, we would submit that the second of the categories of Lord Mustill, an immunity “from being compelled on pain of punishment to answer questions the answers to which may incriminate them” - none of the other six variants would apply to the facts of the present case. In Sorby v The Commonwealth 152 CLR 281, this Court addressed the question of the privilege against self-incrimination and at 294 in the judgment of the Chief Justice reference is made to the passage from Lord Wilberforce’s speech in Rank Film and then his Honour proceeded:

In the absence of binding authority the matter must be approached from the standpoint of principle. If a witness is compelled to answer questions which may show that he has committed a crime with which he may be charged, his answers may place him in real and appreciable danger of conviction, notwithstanding that the answers themselves may not be given in evidence. The traditional objection that exists to allowing the executive to compel a man to convict himself out of his own mouth applies even when the words of the witness may not be used as an admission. It is a cardinal principle of our system of justice that the Crown must prove the guilt of an accused person, and the protection which that principle affords to the liberty of the individual will be weakened if power exists to compel a suspected person to confess his guilt. Moreover the existence of such a power tends to lead to abuse and to “the concomitant moral deterioration in methods of obtaining evidence and in the general administration of justice”:

McHUGH J: That suggests that the rationale of the privilege is that a person suspected of crime cannot be used as an objection for the extraction of evidence and therefore the rationale of the principle is really matters of human dignity and self-respect, and that it tends to be absolute.

MR EINFELD: Yes. When his Honour says in the preceding sentence:

If a witness is compelled to answer questions which may show that he has committed a crime with which he may be charged -

in principle, there is no reason why that would not equally apply to circumstances in which, of course, the witness had already been charged but not yet prosecuted. So, Lord Lowry’s reference to protection from prosecution ought not be read, in our submission, as a literal suggestion that it is the prosecution to the avoidance of which the privilege is necessarily directed. His Honour went on:

It is true that in some cases the legislature may consider that it can only achieve the intended purpose of the statute by limited or abrogating the privilege against self-incrimination, but, as I have said, if the legislature intends to render the privilege unavailable it must manifest clearly its intention to do so. To provide that the answers may not be used in evidence is not to reveal clearly an intention the privilege should be unavailable, although, if the legislature did intend to remove the privilege, it might, in fairness, at the same time prevent the use in criminal proceedings of statements which otherwise would have been privileged.

Your Honours, at page 309 in the joint judgment of Justices Mason, Wilson and Dawson, under the heading, “The Privilege against Self‑incrimination under the State Act” is the well-known passage commencing at about point 2 or 3:

We reject the submission that the privilege is merely a rule of evidence applicable in judicial proceedings and that it cannot be claimed in an executive inquiry. We adhere to the conclusion we expressed in Pyneboard that the privilege against self-incrimination is inherently capable of applying in non-judicial proceedings.
The privilege against self-incrimination is deeply ingrained in the common law. The principle is that a statute will not be construed to take away a common law right, including the privilege against self-incrimination, unless a legislative intent to do so clearly emerges, whether by express words or necessary implication.

Reference is made, inter alia, to a decision of this Court in Pyneboard Pty Ltd v Trade Practices Commission and there are, of course, in Pyneboard the well-known passages to similar effect.

Your Honours, in our submission, the privilege against self‑incrimination sought to be exercised by our client was a privilege against compulsion to provide answers in a prosecution, commenced or not commenced does not matter, but which would themselves provide the Crown with incriminating evidence out of my client’s mouth, but also have the capacity to lead to a train of inquiry which could provide such evidence. Your Honours, if one will, as an adjunct to the right to silence, to the proposition that one cannot be convicted out of one’s own mouth, cannot be compelled to be convicted out of one’s own mouth, the privilege against self‑incrimination is but one ingredient. Indeed, Lord Mustill identified a number of such incidents of the right to silence of which this is one.

Your Honours, may I then seek to just return to our excurses through the cases. In In re Arrows Ltd (No 4) (1993) Ch 452, and in this decision of the Court of Appeal Lord Justice Dillon dealt with the matter at the foot of page 462G. There are just a couple of quick passages in this decision to which I wish to refer your Honours. I said at the top of page 463, the passage:

A fortiori the civil court has no power to decide to what extent evidence which would be by statute admissible in criminal proceedings should be allowed to be used.

And then he dealt with Tully, both in the Court of Appeal and in the House of Lords, and at F:

But no such general provision has yet been enacted by Parliament, and no one has suggested that there is power in the civil courts to imply or impose a provision -

It was in that context that I drew attention to the fact that the reference to there being no power in the civil courts to imply or impose a provision brings to account the fact that these orders, although not be express term, addressed to the prosecution authorities or to have effect in the criminal courts, nonetheless may be thought to imply an attempt to procure the effect of such condition had it been expressly imposed, and his Lordship said, mid-way between G and H on page 463:

Moreover, I do not see how the judge could have had power to exact undertakings from the Director of the Serious Fraud Office -

Your Honours, the final case to which we wish to draw attention of the United Kingdom authorities is the recent unreported decision of the Court of Appeal in Johnston & Others v United Norwest Co‑Operatives Ltd, copies of which your Honours have been provided. The decision of the Court of Appeal of 11 February 1994 is yet unreported and in which civil proceedings there was a claim by the plaintiffs of fraud against an ex‑employee and Lord Justice Dillon addressed the question at page 5 commencing at about point 8 where his Honour turned to the question of whether the appellants were entitled to rely on the privilege against self‑incrimination in attempting to avoid having to swear affidavits disclosing not dissimilar matters to those required by the present orders under appeal. He said:

There have been many cases recently in which the Courts have held that particular statutory provisions authorising the questioning of people by Department of Trade Inspectors, Office‑holders under the Insolvency Act and others have impliedly deprived the persons being questioned of the traditional right to refuse to answer questions on the ground of self‑incrimination. But the present case is not in that field at all; the order made by the Deputy Judge was not made under any such statutory provision.

Over the page:

Where there is no such statutory provision, the traditional view has until recently been that the Court has a duty to give effect to any person’s long‑recognised right to refuse to answer questions if his answer might tend to incriminate him. That is well‑illustrated by the case of Rank Film Ltd v Video Information Centre. The claim to the privilege was upheld in that case although it appeared to be entirely without merit; indeed it was so without merit that Parliament changed the law by s 72 of the Supreme Court Act 1981 to make an exception to the privilege which covers cases such as Rank Film Distributors Ltd - but does not apply in the present case.
Another instance where the Court recently upheld the privilege in the absence of a statute abrogating it is Bishopsgate Investment Management Ltd v Maxwell in so far as that case was concerned with interrogatories put to the defendant in ordinary civil litigation, as opposed to questioning by office holders under the Insolvency Act 1986. The parts of the judgments concerned with the interrogatories were approved by Lord Lowry in AT -

I think there is a line missing, but it is a reference to Istel v Tully.

TOOHEY J: Mr Einfeld, what follows on that page and perhaps on the next page is really a summary of all the authorities that you have taken us to.

MR EINFELD: Yes.

TOOHEY J: What principle do you extract from this decision?

MR EINFELD: Your Honour, it is a confirmation that Istel v Tully thought by the court below to in effect be the source of power to make or indicating a source of power to make the orders made by the Court of Appeal truly ought be seen on its own facts. As Lord Justice Dillon said at page 9 at about point 8 on the page:

I regard it as particularly significant that in Istel v Tully Lord Lowry and Lord Ackner regarded the assurance given by the prosecuting authority as crucial.

Of course so did Lord Templeman:

As Lord Ackner said.....“without such an assurance the court would not be able to provide a substitute protection which was adequate” -

which is the important point for our purposes.

TOOHEY J: But on your argument it would not matter whether the assurance was given or not.

MR EINFELD: That is so. Our principal argument is it would not matter. Alternatively, we say that if we are wrong about that then this is the position. Your Honours, I will not dally longer than to draw your Honours’ attention to the passage in the judgment of Lord Justice Hobhouse who was in the majority at page 23 where his Lordship at point 5 identified three fundamental points which in his judgment ought be made in the context of rejecting the making of orders of a similar kind to here to be derived from the cases. I am about point 7 on the page:

In our system of law, the civil courts, save for the procedure of judicial review and special jurisdictions, have no power to fetter the powers of the criminal courts or to control directly or indirectly their proceedings. A civil court does not have the power to direct that certain evidence be inadmissible in criminal proceedings.

I interpolate, be they at the suit of the New South Wales prosecution service or the federal DPP or any private prosecutor, be it the plaintiff or anyone else who happens to come by information from this witness’ affidavit, that is, other clients of the accountant whose moneys may have been entrusted to the accountant. So it does not even necessarily in terms of private prosecutors confine itself to the plaintiff. His Lordship identified:

Secondly, discretionary powers possessed by prosecuting authorities or criminal courts do not suffice to displace the privilege.

And the next paragraph:

Thirdly, the special procedure provisions.....ultimately depend upon the assessment by a Circuit Judge whether -

various statutory provisions not in place in New South Wales, but the next two passages are apposite:

The decision of the Circuit Judge has to be based upon the circumstances which exist at the time he has to make his decision and has to take into account matters beyond the origin of the material. A civil court cannot either as a matter of law or fact prejudge that decision which will fall to be made at a later date, on criteria with which the civil court is not concerned, and upon facts which cannot be known to the civil court and in circumstances which lie in the future.

TOOHEY J: Is that not a reference to the exercise of statutory power?

MR EINFELD: Yes, but it is by analogy, your Honour. The problem in this case is that come the trial of any criminal prosecution there are discretions to be exercised by the criminal court judge as to what evidence will or will not be admitted. At the moment that remains the case, as it must always be, then the privilege holder does not have the same protection he does by the exercise of the privilege which requires him to say nothing. The moment he said anything ultimately the use that may be made of that disclosure or material derived from it rests upon inter alia the discretion of the trial judge at criminal trial and that is the reason why the court, with respect, can never fashion an order designed to achieve the equivalent of protection of the accused if he becomes charged or the defendant in a civil litigation because the court can never fetter the discretion of the criminal trial judge and that means the accused can never have the same degree of protection as he has when he is sued in the civil proceedings by the exercise of his privilege against self‑incrimination.

Your Honours, I wish merely to give your Honours, three quick references to New South Wales authority and authority in the Federal Court to effect other than that of the Court of Appeal below. In BPA Industries Ltd v Black (1987) 11 NSWLR 609, the decision to which I made reference earlier of the Chief Judge in Equity Justice Waddell in the New South Wales Supreme Court which, of course, pre-dated the decision in Istel v Tully, his Honour applied the passages from the judgment of Rank Film in the speeches of Lord Wilberforce to which I have already drawn your Honours attention. At page 611B:

It is clear that the claim to exercise the privilege provided by law against self-incrimination is made in circumstances in which giving the information would tend to expose the defendants to a charge of conspiracy to defraud or of an offence under the Crimes Act.....The claim could not be disregarded upon the ground that the possible prosecution in respect of which the privilege is invoked is not shown to be likely or that it concerns an offence of a trivial nature. Prima facie the claim should be upheld.

It is submitted for the plaintiff that an undertaking of the kind mentioned would afford sufficient protection to the defendants or, alternatively, that the defendants should be required to file the affidavits in court and that the court might then release them in confidence to the plaintiffs’ legal advisers and conduct part of the hearing in camera so as to ensure that the information did not escape to the detriment of the defendants.

Then reference to the passages in Rank Film and reference then to the amending act of section 72F and then at 612B:

There is no reported decision cited to me, or of which I am aware, of the Federal Court which considers whether or not such an undertaking affords a defendant sufficient protection as a substitute for his privilege not to incriminate himself.

He makes reference to a decision of Polygram Records, a decision of Justice Spender in the Federal Court and then:

In Warman, Wilcox J considered the privilege against self‑incrimination in a copyright case in which Anton Piller orders had been made, but did not have to decide the point here in question because he held that disclosure of the material would not suggest the commission of any criminal offence.

The terms of his Honour’s reasons indicate to me that he was somewhat sceptical that it would be proper to substitute ‑ ‑ ‑

GUMMOW J: I am not sure that is a fair summary of the judgment actually.

MR EINFELD: I am sorry, your Honour?

GUMMOW J: I am not sure that is a fair summary of his Honour’s judgment.

MR EINFELD: I think it is correct to say that ‑ I will perhaps come to Warman, but be that as it may Mr Justice Waddell considered that Mr Justice Wilcox was:

sceptical that it would be proper to substitute an undertaking or procedural safeguards for the privilege against self‑incrimination.

Then reference is made to the New Zealand case of Busby v Thorn EMI Video Programmes Ltd, in which the majority actually did made orders, or hold that it was appropriate to make orders purportedly in substitution for the privilege. I had not intended to take your Honours separately to the New Zealand case because the relevant extracts from the judgment are set out in this case:

The question becomes whether the New Zealand courts can supply something more ‑

said Justice Cooke ‑

or whether any advance must be left entirely to the legislature, as it was by the House of Lords in England and as we are urged to do by the appellants here. In this connection there are differences between the United Kingdom and the New Zealand legal systems. One is that the administration of the civil and the criminal law is rather more unified here, with appeals from the High Court in civil cases and from that court and District Courts in criminal cases tried on indictment all being dealt with in practice by substantially the same court. There are not the separate Divisions of the court of Appeal that exist in England. A second difference, probably more important, is that a rather wider judicial control over criminal trials is recognised in this country. It is seen as part of the inherent jurisdiction of the court to prevent abuse of process by the avoidance of unfairness. A third difference, equally important with the second, is that as Mr Gazley forcefully reminded us the field of evidence is one in which this court has been especially ready to adapt the law to meet modern conditions.

And we observe that, whereas there has been a tendency to regard rather more as a rule of evidence than as a fundamental common law right, a privilege against self‑incrimination, that is not the case in Australia. Justice Waddell went on to say:

It is, I think, important to appreciate that the decision in this case was made by a court which was in a position to lay down a rule dealing with the consequences in a criminal trial of requiring a defendant in civil proceedings to give self incriminating information pursuant to an Anton Piller order.
Bisson J also concluded that the giving of an undertaking was sufficient protection to a defendant, but he would have added a condition to the making of the order that any documents or information obtained should not be admissible in evidence against the defendant in any prosecution (other than for perjury or contempt of court) relating to the illicit goods.....
Somers J, who was in the minority, took the view that to require information to be given which was self‑incriminating upon such an undertaking or such a condition would be to “pass beyond that which is truly adjudicatory to that which is truly legislative” (at 329). He said:

“... I am of opinion that it is for Parliament to decide whether persons in the situation of the instant appellants should be compellable to answer questions when the answers may tend to incrimination ‑

et cetera. Now, at 613, then having referred to a decision of Justice Bowen, then the Chief Judge in Equity in Re Intercontinental Development as inviting the suggestion that a hearing in camera might help to solve the problem, his Honour considered that that was inadequate, and that no reason had been shown why the reasoning in Rank ought not be followed.

TOOHEY J: But the undertakings in Busby were undertakings given by the plaintiff, were they not?

MR EINFELD: Yes.

TOOHEY J: Well, how does that advance the matter one way or another?

MR EINFELD: I do not invoke Busby, your Honour. We would submit the orders by the majority - the reasoning of the majority in Busby is unsound. We submit that it certainly does not apply in Australia where the effect of the majority decisions would be to permit a judge in what is truly civil litigation to make some order, having the effect of binding the criminal process, and whether or not it might have been possible in England ‑ ‑ ‑

TOOHEY J: Well, I do not really want to take up time on this, but it was an undertaking given by the plaintiff; the order did not seek to bind the Crown.

MR EINFELD: No, no, I understand that, your Honour, but Justice Bisson, who was in the majority, suggested that there ought be an express order directed specifically to the use it could be made in criminal proceedings - again, the orders did not purport on their face to bind the Crown. The fact that the undertakings were given by the plaintiff does not make any difference because there is still the risk of the information being used.

TOOHEY J: I understand that, that is why it did not seem to me that the case really was of much assistance, one way or another.

MR EINFELD: Your Honour, I have only taken your Honours to it because I have no opponents, in strict terms, here and it is some authority that suggests that undertakings offered by plaintiffs on the making of such orders have been accepted. It is the only authority of which we are aware, other than Istel Ltd v Tully and the decision of the Court of Appeal where it has been considered that the court had adequate power to do so. Your Honours, since the decision of the Court of Appeal the matter has arisen for attention in two decisions in the Federal Court ‑ ‑ ‑

DEANE ACJ: Well, you refer to those in paragraph 22 ‑ ‑ ‑

MR EINFELD: Of the written outline?

DEANE ACJ: Yes. Unless there is something in particular ‑ ‑ ‑

MR EINFELD: There is not.

DEANE ACJ:- - - I think we have got them then. We will look at them.

MR EINFELD: As your Honour please.

GUMMOW J: What do you say about the passage in Warman starting at 489 in 11 FCR at about point 8, “However, the desirability”?

MR EINFELD: I am sorry, your Honour, I do not have the report with me, but it is referred to in Justice Ryan’s decision. Your Honour said at 489?

GUMMOW J: Yes.

MR EINFELD: I am sorry to have to ask, but if your Honour could tell me how the passage begins?

GUMMOW J: It does not matter, Mr Einfeld.

MR EINFELD: No, I am sorry, your Honour, I am happy to deal with it, but I just do not have the report with me.

GUMMOW J: I will not hold things up. It is just his Honour seems to take quite a different view of what the privilege is - what the rationale of the privilege is. Unless we get that sorted out, it seems to me we cannot progress beyond step one. Do not take up time now, Mr Einfeld.

MR EINFELD: I am sorry, your Honour. I am just having trouble picking up the passage that your Honour was referring to but can I come back to it if I may?

GUMMOW J: It is generally regarded as a very important decision in this field, that is why I keep referring to it.

MR EINFELD: Yes. I am sorry, your Honour, we just do not have it with us at the moment. I will return to it if I may. Your Honours, that being the state of the authorities, as we have said, Justice Handley below sought to overcome the problems by resort to the sanction proffered by the civil court in its exercise of the contempt power either against the plaintiffs or perhaps against the prosecuting authorities. Difficult problems are, of course, presented with respect to any attempt to exercise the contempt power of the civil court with respect to any federal authorities into whose hands the information might come, a realistic prospect in this case, because some of the funds were, it might be argued by prosecution authorities, upon revelation of information of the kind sought in such an affidavit channelled through companies, the information with respect to which may tend to incriminate the appellant with respect to Corporations Law offences or Taxation offences.

Apart altogether from those is the problem as to how one attaches by contempt the relevant prosecuting authority. Who is the prosecutor who is brought to account by contempt proceedings? Is it the DPP himself against whom one would have to have evidence of personal knowledge of the Director of Public Prosecutions? Is it some instructing attorney? Is it the Crown Prosecutor who presents the indictment? There are all sorts of difficulties which present themselves about the use of the civil contempt power as a means of sanctioning any misuse of the material divulged by the affidavit or derived therefrom.

Your Honours, the next problem, of course, is that the whole concept of using the contempt power as a substitute for the privilege against self‑incrimination is, we would say with very great respect, totally misconceived. The contempt power would ordinarily only be exercisable after the evidence has been adduced after the conviction, if it be such, of the accused. According to Justice Handley, the sanction of the civil court could be brought against the prosecutor using the information by which time, of course, it is all too late. The privilege against selfincrimination designed to avoid the use of incriminating answers has been substituted by a completely ineffective purported use of civil court power in a manner that just will not assist the accused one little bit. It does not protect the accused from the use of the disclosed material.

Your Honours, not only is there the problem of the fact that the revelation of the act of contempt would ordinarily only come about much too late, that is, after the trial is over, but what happens if during the course of a trial it becomes apparent that the Crown is about to tender evidence directly or indirectly derived from the defendant’s affidavit? What does the defendant then do? How does the accused on his trial then protect himself? Does he ask for an adjournment to go back to the civil court to commence proceedings for contempt against the Crown Prosecutor in the midst of a criminal trial with a jury empanelled, or does he ask the criminal court judge to exercise his discretion to admit the evidence on the ground that a civil court judge has not made an order preventing the use of the material in the civil court, but has made an order that the defendant file an affidavit on condition that undertaking be given by the plaintiff from which, to the eye of the civil court judge ‑ and it could be from a magistrate through to a District or County Court to a Supreme Court judge ‑ where the Supreme Court judge then has to divine, by reference to the terms of the orders, perhaps with or without evidence, the justice of admitting the evidence or not?

It is an impossible position but most importantly, not only is it incapable of affording any realistic protection, but it by no means can possibly amount to a protection equivalent to that provided by the exercise of the privilege.

Your Honours, for those reasons we submit that qua the criminal problem, the attempt to prevent the use in criminal proceedings in a prosecution of that material, in addition to all of that, is the basic problem to which Justice Toohey adverted earlier and that is that in the civil proceedings themselves the defendant in this case has been compelled to give evidence which, as I said earlier, would inevitably carry the risk of its use in open court by the plaintiffs in the same civil proceedings and once that happens it is, to employ the vernacular, as it were, open slather.

Your Honours, I have largely canvassed during the course of argument what I described in opening as the second fundamental proposition, so I will not need to spend more than a minute or two on it. It was that the substitution for the exercise of the privilege by creating circumstances designed to remove the need for that exercise effects, in truth, a derogation from the right. It really is a short proposition. In attempting to accommodate the competing interests of a plaintiff in the civil action on the one hand with the rights attaching to the privilege on the other, the Court of Appeal has firstly expressed a recognition of the full effect of the privilege; secondly, fashioned an order which in express terms was designed to substitute for the privilege and then said, “Well, so protected, now no occasion arises to involve the invocation of the privilege”.

In our submission, a question arises as to whether this approach logically and legally is untenable. If one assumes that one can fashion orders which are capable of affording equivalent protection, then the court, in our submission, cannot and certainly ought not on the one hand profess a recognition of the sanctity of the privilege, as this Court has done in Sorby and Pyneboard and elsewhere, yet at the same time introduce a mechanism which completely takes away a party’s right to the privilege.

DEANE ACJ: Really it comes back to the first argument, does it not? I mean, take, for example, a case where you have not got problems of a federation. If the Crown were plaintiff and proffered an immunity or an undertaking to provide immunity against prosecution, would you say that the court could not say, “Well, that’s good enough”?

MR EINFELD: If it is a total immunity from prosecution with respect to all wide matters then there is no - we would accept that there is no risk of self‑incrimination.

DEANE ACJ: Well, once you accept that the next step is it would certainly be open to the equity courts to frame an order which said, “We will make these orders for disclosure but only on the condition that the Crown proffers an unconditional undertaking to a provide complete immunity.” In other words, all I am suggesting to you is unless you can go so far as to say that orders within jurisdiction which do provide complete protection will not be affected, you really come back to all the problems about the orders in this case, I would have thought.

MR EINFELD: Yes, your Honour. The corollary of that, and it is really the second limb of the proposition, is that short of that situation what the Court is then doing in the name of substituting for the privilege a protection is necessarily giving something less and once that happens it is in truth a derogation from the right in the guise of devising circumstances which will remove the need for the exercise of the privilege. And once you get to that point it can and ought only be done by Parliament.

McHUGH J: Is my recollection right that both the federal and State DPP Acts contain provisions that the Director of Prosecutions cannot give immunity, only the Attorney?

MR EINFELD: The Attorney-General, that is correct. I can give your Honours a reference to those sections if your Honour would just excuse me.
It is section 9 of the Commonwealth Director of Public Prosecutions Act 1983 and section 19 of Director of Public Prosecutions Act 1986 of New South Wales. And the power is vested in the Attorney in New South Wales under sections 13 and 14 of the Criminal Procedure Act 1986. And that was one of the problems ‑ ‑ ‑

GAUDRON J: Is it correct to say, Mr Einfeld, that once a total immunity is given, there is no risk of incrimination, or is it rather that, in practice, people waive the privilege for the benefits of the immunity?

MR EINFELD: Certainly as a matter of practice, the latter is correct. The difficulty I had in responding to his Honour the presiding judge and to your Honour’s question is that one would have to have an indemnity or immunity in sufficiently wide terms, and the problem is to give you the adequate transactional ‑ ‑ ‑

GAUDRON J: To give you the equivalent protection.

McHUGH J:Yes, I must say when you answered Justice Deane, I had a query, because I would have thought that absent a pardon by the Crown, it is not sufficient, because there would be no reason to stop a private person - even if the Crown gave the undertaking in the equity court, a private person could prosecute, so you would have to have a pardon, I think. I am not sure about that.

MR EINFELD: I think in Gannon’s Case in New South Wales, the decision of the Court of Appeal, that point is made, if I remember rightly, by the President, that only a pardon would suffice, but the hesitation I had in answering Justice Deane’s question is that one would really have to have an immunity in sufficiently wide terms to prevent any risk of prosecution., and that is really the matter that Justice Gaudron takes up with me, and I was assuming in answering that one could have an immunity so widely expressed. The problem is that once you get back to use immunities, the problem remains for all purposes.

DEANE ACJ: It might be a difficult question too in that a private person might have standing to bring committal proceedings but no standing to present an indictment after committal. It is a more difficult question than I thought when I asked it.

MR EINFELD: It is, perhaps, more complicated even still because one knows that, on occasions, private prosecutions are, as it were, taken over by Crown authorities whether or not a private prosecutor might be entitled to pursue the prosecution to its end and then the problem arises ‑ ‑ ‑

DEANE ACJ: But my last wish was to delay you, Mr Einfeld. I was trying to head off you at the pass.

MR EINFELD: Yes. We made the point that, without question, these orders go nowhere near providing adequate protection but it is difficult to fashion, perhaps absent a pardon or absent an extraordinarily wide transaction on immunity, a circumstance in which one can truly remove all the circumstances and once you get to that point, the court is purporting to derogate or abrogate the sacrosanct common law right to the privilege which only the Parliament can do. We have given reference in our written outline ‑ I do not need to take your Honours to the passages ‑ to those parts of the judgments in Sorby to which I have taken your Honours and to Pyneboard, paragraph 6, which deal with that proposition and also in paragraph 10 to the passages in Grant v Downs and in Carter, both dealing with legal professional privilege, but also in Istel v Tully itself in a passage I read to your Honours earlier in a speech, I think, of Lord Ackner at page 62 to the same effect.

Your Honours, that leaves me now with the jurisdictional question which can be dealt with quite quickly.

TOOHEY J: Why is it a question of jurisdiction? The jurisdiction of the Court is to deal with the subject matter before it, which is a civil action between plaintiff and defendant and the Court has, in the disposition of its jurisdiction, all the express, incidental, implied, necessary powers. It is a question of power, is it not? Even then, it is hardly a question of power in the sense that you argue that there is a principle of the common law which is entrenched and to say that the Court has incidental powers, hardly overrides such an entrenched principle of the common law.

MR EINFELD: Your Honour, if it be correct that the true analysis of what has happened here or in the other cases is an abrogation of or derogation from the right, and if it be correct, as this Court has said, that that can only be done by Parliament, then the question is: where is the statutory provision which can be the source of the power to undertake that derogation?

DEANE ACJ: But take the extreme case. Say the Court here had said, “We think the common law principle against self-incrimination is a lot of rubbish and, therefore, we’re going to make these orders even though there’ll be no protection whatsoever”. It would not be a matter of jurisdiction or power. It would be a matter that had just gone terribly wrong, although it may be that, as a matter of power, in terms of saying against the plaintiff not, “Provided you give this undertaking, but in the circumstances in which you haven’t proffered it, we order that you give it”, but if we reach that stage, it is a long long way down the track.

MR EINFELD: Yes.

TOOHEY J: I mean, Carter provides you with really the answer, does it not, in the sense that the majority said, “Look, here’s a principle of the common law which should not be derogated from, and to the extent that any authority holds to the contrary, then that authority is wrong”. The court did not spend its time talking about jurisdictional power.

MR EINFELD: I was going to say, your Honour, it is by no means necessary to go to that point for the purpose of resolving this case, I accept that.

TOOHEY J: Well, is it necessary to go to it at all?

MR EINFELD: Perhaps not, your Honour. I do not wish unnecessarily either to take time or to get into an argument about the ambit of section 23 or its effect, but to the extent that the court sought to find a source of power in section 23, we say, as we have done in our written outline ‑ ‑ ‑

GUMMOW J: Well, that is your point, is not it? Section 23, you say, is not sufficient to overthrow this right, and you have said that before, I think, earlier this morning.

MR EINFELD: I opened by saying that was one of the propositions.

GUMMOW J: Yes.

MR EINFELD: I perhaps do not need to develop it any further, if your Honours please. The only other matter then with which I needed to deal was to answer your Honour Justice Gummow’s invitation to consider the remarks of Justice Wilcox at page 489 in the Warman decision. We would submit that whereas it - - -

GUMMOW J: His Honour seems to say that the privilege against self-incrimination really only becomes important at the time when someone asks the question in the course of a prosecution.

MR EINFELD: Yes.

GUMMOW J: But that may not be right. That is all I wanted to say.

MR EINFELD: Yes, I understand it, your Honour. With respect, I am not at all sure that is what his Honour is really saying. If it is what he is saying it certainly cannot be right, with respect, having regard to a categorisation of the - - -

GUMMOW J: Secondly, he seems to have relied upon the New Zealand case.

MR EINFELD: Yes, that is so. For the reasons we have already espoused and long covered we would say that that reason is not sound.

GUMMOW J: Yes, yes.

MR EINFELD: May it please the Court.

DEANE ACJ: Thank you, Mr Einfeld. Mr Aitken, how long do you think you will need for your submission?

MR AITKEN: Not more than 20 minutes, your Honour, subject to questions, of course.

DEANE ACJ: Well, we will see whether you can fulfil that promise.

MR AITKEN: Thank you, your Honour. Your Honour, might I hand up relevant copies of sections 13 and 14 of the Criminal Procedure Act New South Wales to which I wish to refer and, in fact, begin from that piece of legislation. I apologise; I should have handed it up before.

DEANE ACJ: We will just take a moment to look at your written submissions, Mr Aitken, if you would like to sit down.

MR AITKEN: Thank you, your Honours. I do not intend to rehearse all the decisions to which my learned friend Mr Einfeld has taken you. It is quite clear, we would submit, that there is in the absence of any consent an agreement by the Crown in right of the State of New South Wales to an immunity being conferred with respect to the privilege which has been overridden but the Crown itself cannot be bound and those cases I think have already been canvassed in great detail.

It is our submission, your Honours, that because the legislation lays down a very detailed way in which indemnities and undertakings, both transactional and as to use immunity, can be granted by the Attorney‑General exercising a power of the Crown which has long been exercised by Crown officers, that that provides a very clear indication that in this particular case the civil court, with respect, has overreached itself in purporting to bind Crown authorities without being in a position to take into account any of the relevant provisions and policy matters which are obviously brought to bear when discussing this question.

His Honour Justice McHugh raised the question of whether or not anything short of a pardon would be sufficient. It would appear by reference to sections 13 and 14 of the relevant Criminal Procedure Act 1986 that a complete indemnity may be given pursuant to section 13 and that undertakings may be given with respect to section 14 which would then prevent pursuant to subsection 14(2) the answers which are given which may, one presumes, be self‑incriminatory being used and admissible:

against the person in any civil or criminal proceedings other than -

and this is an important point, with respect, we would ask the Court to note -

proceedings in respect of the falsity of evidence given by the person.

Now, without needing to canvass whether it is possible for the Crown itself to be held in contempt of the order of the civil court, we would submit that the order which is made in the absence of the Crown lacks the various protections which are built into the legislation and which are there for the protection of the public policy involved in the grant of any immunity. The various considerations are set out and I refer to them in paragraph 3 of my submissions.

In addition, of course, the problem arises in the sense that if an affidavit is sworn pursuant to the sort of undertaking which is contemplated in this case, then of course there is no possibility of the falsity of that affidavit coming to the attention of any of the relevant authorities which, it would seem, if one looks at section 14(2)(b) and then the proviso underneath is one of the principal bases upon which an undertaking may be given to provide use immunity for a particular statement.

The question has been touched on in a case which was on the list of authorities which I hope reached your Honours in Saffron v Federal Commissioner of Taxation (1992) 109 ALR 695 a decision of Justice Beaumont which I hope is reported in the Federal Court Reports. I only have the Australian Law Report with me.

If I can take your Honours to pages 698 and 699 your Honours will see at about line 20 on page 698 a discussion of the effect of an undertaking as to a particular use immunity being given by the Crown and a reference to various New Zealand decisions. At the top of page 699 at lines 1 to 5 adverts to the possibility of the Crown going back on the indemnity, as it were, or the undertaking and his Honour says:

in the hypothetical circumstance that the Crown.....were now to prosecute X for an offence.....a permanent stay of the prosecution would be granted on the basis of a lack of fairness in the sense described by Mason CJ and Dawson, Toohey and McHugh JJ in Williams v Spautz.

His Honour then goes on to discuss the use immunity provisions and helpfully refers to the second reading speech of the Attorney-General, Mr Sheahan when introducing the legislation on page 700 of the judgment and your Honours will see the quotation there from that speech where clauses 13 and 14 provide a code , so it is said, although the Crown may not wish that to be taken as a definitive statement:

and is extended to prohibit all prosecutions by any person. At present indemnities are rarely given. That is a power that should be exercised with extreme caution, and only when it is in the public interest to do so. The interest of the prosecution in securing a conviction is only one of the matters that should be considered and, therefore, the power is to reside in the Attorney-General.

We would respectfully submit that the way that case was decided, and also the references by the Attorney when introducing the legislation into the New South Wales Parliament provide a very clear indication, if any were needed, that whether or not power exists to bind the Crown by virtue of an order, it ought not to be exercised in any event unless the Crown has actually appeared and has been heard as to whether or not such a derivative use immunity should be granted. And, on that basis, we would say that the orders made below were made improperly in the broad sense of that word, without meaning to argue whether or not it goes to the power of the court to make the order or the jurisdiction of the court to do so. So, if your Honours accept that proposition, then we would submit that in this case, whatever else may be said, the court has gone beyond its remit.

I should also address the statement which was made by his Honour Mr Justice Handley in the Court of Appeal. He seemed to suggest that Attorney‑General v Times Newspapers would of itself have provided a reason for the Crown being bound but, with respect to his Honour, when one looks closely at AT & T Istel Ltd and Another v Tully and Others, particularly at Lord Ackner at page 59 and Lord Templeman at page 56, one sees that the Attorney‑General v Times Newspaper is specifically referred to with respect to the way in which the Crown might be bound because of the particular notice which was given, and both their Lordships are quick to point out that the reasoning in the Times Newspaper is wide for the facts of the particular case and therefore does not really need to be looked at in the context of this particular order in which the Crown has not joined.

We would respectfully submit that, in relying on the broad proposition cited in Attorney-General v Times Newspapers Ltd, without adverting to those particular qualifications which their Lordships themselves drew with respect to the width of it, that his Honour, in writing the principal

judgment, fell into error with respect to the way in which the Crown may be held liable, notwithstanding that it was not actually present at the hearing. So, unless I can assist the Court further, those would be the submissions we would put.

DEANE ACJ: Thank you, Mr Aitken. Mr Einfeld, in the event that you were to succeed in the appeal, what would you wish to say about costs? As you are aware, the respondents have indicated that their lack of participation does not extend to any question or any order of costs against them.

MR EINFELD: Your Honour, we would submit that we ought have the costs of the proceedings below, both at first instance and on appeal, and the costs of the leave application, at the least, because through all those stages there was vigorous participation by the respondents in the proceedings.

DEANE ACJ: Well except, when you take the proceedings at first instance and when you look at your client’s answer in the affidavit and the annexed notice, it would not follow that someone who has been asked to account and responds by saying what your client says in the annexed statement, “and therefore I ask not to be forced to account on the basis that it might incriminate me”, would get his costs of those proceedings.

MR AITKEN: I see the force of what your Honour puts.

DEANE ACJ: Perhaps this is an immaterial matter, but where would Suitors’ Fund mesh into this case beyond the proceedings at first instance? Is it still called Suitor’s Fund?

MR EINFELD: Suitor’s Fund Act, yes, your Honour. The difficulty is actually posed by virtue of the fact that the orders, the subject of appeal, were not initially made by the judge at first instance but by the Court of Appeal.

GUMMOW J: The Court of Appeal varied order 3 of Mr Justice Powell’s order, but his Honour made other orders, as well, which have never been disturbed.

MR EINFELD: No, that is right.

GUMMOW J: You seek to disserve just order 3, do you, of the primary judge’s orders?

MR EINFELD: Yes.

GAUDRON J: Mr Einfeld, could I put it to you quite baldly: I am inclined to think this is a case in which costs simply should not follow the event.

MR EINFELD: Your Honour, in terms of the proceedings in the Court of Appeal and the leave application, we would submit, they ought.

GAUDRON J: But why? It is, after all, a case that has been fought for the protection of your client that does not challenge the existence of rights on the part of the respondents but just says they are defeated in the circumstances.

MR EINFELD: Not quite, your Honour. Certainly at the Court of Appeal stage there was contest as to the capacity of the court to make the orders. There are other grounds but, in particular, the orders were made by the Court of Appeal over submissions by our client, contested by the other side, that leave was opposed and in the ordinary course, with respect, there would be no reason why orders would not be made as to the costs following the event with respect to the costs, taking his Honour Justice Deane’s point, of the Court of Appeal and the leave application and this appeal.

The fact that the respondents no longer have an interest post the grant of leave to appear and oppose the order sought on appeal ought not be a ground for depriving the appellant if he is successful with his costs.

DEANE ACJ: It is a consideration, when one reaches this Court, as to whether any order for costs should be made.

MR EINFELD: Yes.

DEANE ACJ: Your strongest position is in relation to what the costs in the Court of Appeal are.

MR EINFELD: Yes.

DEANE ACJ: But perhaps the best that can be done, unless Mr Aitken is prepared to volunteer that the State will pay the costs of the respondents in the event that the appellants succeed, and I pause hopefully.

MR AITKEN: Well, your Honour, I was not sure whether I was granted leave to appear as a party or amicus. If I am appearing as amicus curiae, I do not think the question of costs arises, does it?

DEANE ACJ: No. We gave you leave to intervene for the Attorney‑General quite carefully.

MR AITKEN: You gave me leave to intervene with all the - I will have to get some instructions about whether we are in a position to do that, your Honours.

DEANE ACJ: Well, I think what we will do is, if the appeal happens to succeed, we will then address the question of costs subject only to this. If that happened, Mr Einfeld, and we felt that the order for costs at first instance should stand and there be no order for costs in this Court, we would not feel required to hear you on those particular matters.

MR AITKEN: May it please your Honour. We will certainly - - -

DEANE ACJ: Which means if you need to say anything further at this stage you may do so.

MR AITKEN: No, if the Court pleases.

DEANE ACJ: The Court is indebted to counsel and will reserve its decision in this matter. The Court will now adjourn until 10.l5 am tomorrow morning.

AT 12.58 PM THE MATTER WAS ADJOURNED

[1995] HCATrans 221

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