Saffron v Federal Commissioner of Taxation

[1992] FCA 568

Re: ABRAHAM GILBERT SAFFRON
And: COMMISSIONER OF TAXATION
Nos. N G2021-2026 of 1987
FED No. 568
Evidence
(1992) 92 ATC 4432

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Evidence - privilege against self-incrimination - indemnity against prosectuion under any law of Commonwealth given to witness - undertaking given by State Attorney-General to witness not to use evidence against her - ss.13 and 14 Criminal Procedure Act (1986) (N.S.W.) - whether witness at risk of prosecution by State of New South Wales.

HEARING

SYDNEY

#DATE 30:7:1992

Counsel and Solicitors for the applicant: Mr A. Sullivan QC and

Mr F. Carnovale instructed by Walker and Raphael

Counsel and Solicitors for the respondent: Mr G. Downes QC and

Mr S. Gibb instructed by Australian Government Solicitor

Counsel and Solicitor for the Witness X: Mr P. Pearsall instructed by

Ms B. Duchen

Appearing as Amicus Curiae: Mr Keith Mason QC,

Solicitor-General of New South Wales

ORDER

THE COURT ORDERS:

That X's claim of privilege in respect of the tender of her statement is rejected.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In these taxation appeals, a witness, (hereafter referred to as "X") has claimed the benefit of the privilege against self-incrimination in the following circumstances.

1. In 1974, and subsequently, the witness wrote up some books of account of businesses in which the Commissioner contends (but the taxpayer denies) the taxpayer had an interest. In September 1987, after the institution of these appeals, the taxpayer was tried in the District Court, and convicted, on a charge of conspiracy to defraud the Commonwealth. At the trial, X was called as a witness for the prosecution. At the time she was called, the Crown Prosecutor informed the Court that X "had been granted an indemnity" by the Commonwealth Director of Public Prosecutions. This was a reference to an instrument under the hands of Mr Temby, the Director of Public Prosecutions dated 25 September 1986 in the following terms:
   

"I, IAN DOUGLAS TEMBY, Director of Public Prosecutions, pursuant to sub-section 9(6) of the Director of Public Prosecutions Act 1983, hereby undertake that any answer given, or statement or disclosure made, by (X), or the fact that (X) discloses or produces a document or other thing, in proceedings against ABRAHAM GILBERT SAFFRON for offences against section 86(1)(e) of the Crimes Act 1914 and section 229 of the Income tax Assessment Act 1936 will not be used in evidence against (X)."

1. Prior to this, X had been given by Mr Robert Ryan, an investigator with the National Crimes Authority, a document dated 26 July 1985 as follows:
   

"I, ROBERT F. RYAN, an Investigator with the National Crimes Authority, Melbourne, intend to ask questions of (X) concerning her employment as a Book keeper for Apsley Investments P/L, I give the "undertaking" that what ever

(X) states during this interview concerning her employment will not be used in evidence against her."

1. On 15 May 1992, Mr Rozenes QC, now the Commonwealth Director of Public Prosecutions, executed an instrument under s.9(6D) of the Director of Public Prosecutions Act 1983 in which Mr Rozenes, as the Commonwealth Director of Public Prosecutions, undertook to X as follows:
   

"Pursuant to section 9(6D) of the Director of Public Prosecutions Act 1983, I, MICHAEL ROZENES QC, the Director of Public Prosecutions, hereby undertake that you will not be prosecuted, either summarily or on indictment, under any law of the Commonwealth, in respect of any act or omission that arose from or is related to your involvement in the taxation, financial or business affairs of ABRAHAM GILBERT SAFFRON or of any related person, company or business entity."

1. On 27 July 1992 the Commonwealth Deputy Director of Public Prosecutions wrote a letter to X in the following terms:
   

"It is the intention of the Director that the Undertaking given to you pursuant to section 9(6D) of the Director of Public Prosecutions Act 1983 dated 15 May 1992 is that you be indemnified from prosecution under any law of the Commonwealth in respect of any act or omission that arose from or was related to your involvement in the taxation, financial or business affairs of Abraham Gilbert Saffron or of any related person, company or business entity including James McCartney Anderson ('Anderson') and any company or business entity associated with Anderson; Apsley Investments Pty Ltd ('Apsley') and any person, company or business entity associated with Apsley and the businesses 'Carousel Cabaret', 'Venus Room', 'Gilligans', 'Showbiz', 'La Bastille' and 'Laramie' and any person, company or business entity related to these businesses."

1. It is accepted, on behalf of X, that she is now protected from prosecution by the Commonwealth.

2. However, it is her submission that she is still at risk of prosecution by the Crown in right of the State of New South Wales by reason of the matters dealt with in her statement dated 1 June 1992, which is now sought to be tendered on behalf of the Commissioner. It appears that this document was signed at the request of the Commissioner and is in the same terms, in all essential respects, as the evidence given by X at the criminal trial in 1987. Through her counsel, X has objected to the tender of the statement. It is submitted, on her behalf, that the privilege against self-incrimination protects her in this respect and further protects her from any direction by the Court that she give oral evidence, in chief or in cross-examination, on the matters dealt with in her statement.

3. On the other hand, on behalf of the Commissioner, it is contended that the privilege is not available in the circumstances of the present case.

4. Since X was called to give evidence, an undertaking has been signed by the State Attorney-General. That undertaking, which is dated 25 July 1992, is as follows:
   

"WHEREAS proceedings are before the Federal Court of Australia and the Administrative Appeals Tribunal in respect of a review of the Commissioner of Taxation's assessment of the Income Tax payable by Abraham Gilbert Saffron and payable by Apsley Investments Pty. Ltd. AND WHEREAS (X) is required as a witness in the aforesaid proceedings to adduce all the facts to her knowledge at the hearing of the aforesaid proceedings;

AND WHEREAS in order to adduce such facts (X) may render herself liable to prosecution for an offence under the laws of New South Wales;

AND WHEREAS I, John Planta HANNAFORD, Her Majesty's Attorney General for the State of New South Wales, am satisfied that for the effective hearing of the aforesaid proceedings and for the due administration of justice, it is necessary to have resort to the evidence of (X) and for that purpose (X) should be indemnified as hereinafter appears; Now therefore I, the said John Planta HANNAFORD, DO HEREBY UNDERTAKE that any answer given, or statement or disclosure made, or the fact that (X) discloses or produces a document or other thing, in the proceedings abovementioned will not be used in evidence against (X);

PROVIDED that (X) gives her active co-operation including the giving of evidence truthfully and frankly and without embellishment and withholding nothing of relevance in the proceedings aforementioned in which she is required to give evidence in relation thereto."

1. The Solicitor-General for the State of New South Wales appeared in this application and informed the Court that the undertaking, is regarded as, binding on the Attorney-General in honour.

2. In considering whether the privilege against self-incrimination is available, the question, which is for the Court to determine, is whether the apprehended danger of prosecution is "real and appreciable, and not of an imaginary or insubstantial character" per Bowen C.J. in Eq. in In re Intercontinental Development Corporation Pty Limited (1975) 1 ACLR 253 at 259. See also In re Westinghouse Electric Corporation Uranium Contract (1978) AC 547 at 581.

3. On behalf of X, it is claimed that the tender of the statement and the giving of oral evidence in that connection may incriminate her directly or "may lead to incrimination or the discovery of real evidence of an incriminating character" (see Sorby v The Commonwealth (1983) 152 CLR 281 at 310).

4. I am prepared to assume in favour of X, without deciding, that apart from the effect, if any, of the undertaking given by the State Attorney-General, the privilege would have been available by reason of evidence being sought to be led with respect to the procedures followed by X in the keeping of the books.

5. However, in my opinion, by reason of the giving of that undertaking, X no longer needs the protection of the privilege and for that reason alone, in my view, the privilege is no longer available. To borrow the language of Julius Stone in his work "Evidence, Its History and Policies" (edited by Andrew Wells) (at p 570) - "the privilege ceases if the danger ceases." (See also the observations of Gibbs C.J. in Sorby's case at page 290; and see BTR Engineering (Australia) Limited v Patterson (1990) 20 NSWLR 724 per Giles J at page 730).

6. In R v Georgiadis (1984) VR 1030, Ormiston J said (at 1037):
   

"As pointed out in a recent learned article...by A.T.H. Smith, Immunity From Prosecution, (1983) Cambridge Law Journal 298 at 300, 'none of the standard texts and treatises on constitutional law or criminal law even mention it (the immunity from prosecution).' And he stated his conclusion at 316: 'As a matter of law, none of the devices at present employed is legally wholly efficacious and only the Queen's pardon if it were ever to be resurrected would act to prevent the state from going back on its word. However, the courts have an inherent power to stay oppressive or vexatious prosecutions....' What Mr Smith said in that article was written before the two decisions in R v Milnes and Green and R v. McDonald. Milnes' case confirmed his view as to informal pardons....Moreover, the Privy Council (in McDonald (1983) NZLR 252) has recently expressed an opinion in relation to a not dissimilar immunity from prosecution given by the New Zealand Solicitor-General. In so doing, Lord Diplock for the Board quoted with approval from the judgment from the New Zealand Court of Appeal consisting of Sir Clifford Richmond, President, Mr Justice Woodhouse and Mr Justice Quilliam, as follows, (1983) NZLR at 255: 'It is in our view immaterial whether such an undertaking is one which is as a matter of law strictly binding on the Crown. We say that because it is quite unthinkable that such an undertaking would not be honoured and in reality the importance of such undertaking in relation to the evidence given by an accomplice lies in the practical effect which it will have both in protecting that accomplice and in bringing about a state of mind on his part wherein so far as possible he is removed from the fear of consequences of giving evidence incriminating himself and knows that he has nothing to gain by giving false evidence.'" (Emphasis added)

1. I agree, with respect, with Ormiston J.

2. In my opinion, in the hypothetical circumstance that the Crown in the right of the State of New South Wales were now to prosecute X for an offence in relation to the keeping of the books mentioned in her statement, a permanent stay of the prosecution would be granted on the basis of a lack of fairness in the sense described by Mason C.J. and Dawson, Toohey and McHugh JJ. in Williams v Spautz, High Court of Australia, 27 July 1992 at pp 6-7.

3. It follows, in my view, that there is not any real or appreciable danger of a State prosecution by reason of the tender of the statement.

4. Further, there is no reason to suppose, at this stage at least, that her oral evidence would travel beyond the matters dealt with in the statement. If it becomes necessary to do so, this aspect can be reviewed during the course of the giving of her evidence.

5. I would add that, as matters now stand, there is no real or appreciable danger, in my view, of any indirect or derivative use of the evidence in X's statement in the sense explained by Gibbs C.J. in Sorby's case at 293-4.

6. It is true that the undertaking given by the State Attorney-General is expressed to be conditional in certain respects but nothing appears to turn on this for present purposes.

7. Reference was made in the course of argument to the provisions of ss. 13 and 14 of The Criminal Procedure Act (1986) N.S.W. Part IV of that Act, deals with "Indemnities and Undertakings".

8. Section 13 provides for an indemnity as follows:
   "13(1) The Attorney-General may, if of the opinion that
   

it is appropriate to do so, grant a person an indemnity from prosecution (whether on indictment or summarily) -

(a) for a specified offence; or

(b) in respect of specified acts or omissions.

(2) If the Attorney-General grants such an indemnity, no proceedings may thereafter be instituted or continued against the person in respect of the offence or the acts or omissions.

(3) Such an indemnity may be granted conditionally or unconditionally.

(4) Such an indemnity may not be granted in respect of a summary offence that is not a prescribed summary offence, unless the Attorney-General has consulted the Minister administering the enactment or instrument under which the offence is created."

1. Undertakings are dealt with by s.14 as follows:
   "14.(1) The Attorney-General May, if of the opinion that
   

it is appropriate to do so, give to a person an undertaking that -

(a) an answer that is given, or a statement or disclosure that is made, by the person in the course of giving evidence in specified proceedings; or

(b) the fact that the person discloses or produces a document or other thing in specified proceedings, being proceedings for an offence against a law of the State (whether an indictable offence or a summary offence), will not be used in evidence against the person.

(2) If the Attorney-General gives such an undertaking -

(a) an answer that is given, or a statement or disclosure that is made, by the person in the course of giving evidence in the specified proceedings; or

(b) the fact that the person discloses or produces a document or other thing in the specified proceedings, is not admissible in evidence against the person in any civil or criminal proceedings, other than proceedings in respect of the falsity of evidence given by the person.

(3) Such an undertaking may be given conditionally or unconditionally.

(4) Such an undertaking may not be given in respect of a summary offence that is not a prescribed summary offence, unless the Attorney-General has consulted the Minister administering the enactment or instrument under which the offence is created."

1. In introducing the legislation the Attorney-General said, (New South Wales Parliamentary debates, Legislative Assembly, 1 December 1986, at 7343):
   

"One power the Attorney-General presently exercises and which is not given to the director (of Public Prosecutions) is the power to indemnify a person against prosecution for a specified offence, or in relation to specified acts, or omissions, committed by the person. At present, the Attorney-General can give an undertaking not to prosecute a person where, for example, that person is willing to give evidence against some other person. By clauses 13 and 14 of the Criminal Procedure Bill, the power to grant an indemnity is now codified, 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. The director can, however, request that the Attorney-General exercise this power." (Emphasis added)

1. Without deciding the point, it may be accepted, as is submitted on behalf of X, that ss. 13 and 14 do constitute a code of the field they seek to cover (cf. Winterton, "Parliament, the Executive and the Governor-General" at pp 113-115). But, in my view, this does not assist X here. As I have said, the subject undertaking is binding in honour only and I have proceeded on that footing alone to conclude that the privilege is not needed to protect X. That is, even if the prerogative has merged, so far as it goes, in ss.13 and 14 of the Criminal Procedure Act, it does not follow that, in an area not covered by those provisions (and that particular point is common ground) it is not open to the Attorney to bind himself in honour not to use the evidence in question.

2. Other arguments, including waiver, were relied on by the Commissioner, but it is not necessary to deal with them.

3. Accordingly, I reject X's claim of privilege in respect of the tender of the statement.