Sidebottom v Commissioner of Taxation
[2003] VSCA 2
•19 February 2003
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No.7634 of 1998
| RAYMOND LESLIE SIDEBOTTOM and ANOR. | Appellants |
| v. | |
| COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA | Respondent |
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JUDGES: | PHILLIPS and BATT, JJ.A. and O’BRYAN, A.J.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 6 February 2003 | |
DATE OF JUDGMENT: | 19 February 2003 | |
MEDIUM NEUTRAL CITATION: | [2003] VSCA 2 | |
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Customs and excise - Proceeding brought for offences and penalties - Brought according to civil practice and procedure – Pleadings and particulars exchanged – Whether witness statements can be ordered of the defendants before trial – Whether defendants entitled to stay silent as to evidence until close of plaintiff’s case at trial – Excise Act 1901 (Cth) ss.117, 119, 120, 136, 143.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr. B. Zichy-Woinarski Q.C. with Ms M. Lodge | Blake Dawson Waldron |
| For the Respondent | Mr. B.E. Walters SC with Mr. G. Livermore | Australian Government Solicitor |
PHILLIPS, J.A.:
On 20 October 1998 the Chief Executive Officer of Customs (who has since been replaced as a party by the Commissioner of Taxation) instituted a number of excise prosecutions by filing a writ in the Trial Division. There were five defendants: Australian Petroleum Supplies Pty. Ltd. and two other companies and, as well, the present appellants, Kelvin Ernest Sidebottom and Raymond Leslie Sidebottom who were directors of the three companies. Pleadings were duly delivered, particulars were exchanged and on 14 May 2002 the Listing Master ordered the plaintiff to file and serve witness statements in advance of the trial, but refused to make the like order against the defendants. The plaintiff appealed to a judge, the appeal was allowed and a like order for witness statements was then made against the defendants. That was on 12 June last. All five defendants sought leave to appeal and on 23 August that leave was refused to the three companies but granted to the two directors who now seek to have the order of 12 June set aside as against them. The trial is set to begin on 3 March next and the preparation of this judgment has been expedited in order to preserve that date, if possible.
Background facts
According to the pleadings, it is common ground that Australian Petroleum Supplies Pty. Ltd. was the distributor of petroleum products operating out of a depot in Numurkah. The second of the three companies operated tankers which were used to transport petroleum products and the third was the registered owner of the land on which the depot stood. It is alleged by the plaintiff that between July 1996 and January 1997 the defendants manufactured excisable goods in contravention of s.35 of the Excise Act 1901 (Cth), had in their possession excisable goods upon which excise duty had not been paid, in contravention of s.117(1) of the Act; evaded the payment of excise duty, in contravention of s.120(1)(iv) of the Act; moved, altered or interfered with goods which were the subject of control of customs, contrary to s.61 of the Act; and unlawfully conveyed excisable goods, in contravention of s.119(1). The Act provides that a person who contravenes any of ss.117(1), 119(1) or 120(1)(iv) is guilty of an offence punishable by a pecuniary penalty (ss.117(2), 119(2), 120(2) and 129) and, according to s.133, proceedings for the recovery of penalties are “excise prosecutions”. By the statement of claim, the plaintiff seeks declarations that the defendants committed each of the offences alleged, orders that the defendants be convicted of such offences, the imposition of fines or penalties and (under s.21B of the Crimes Act 1914 (Cth)) orders for reparation of the excise duty not paid, with interest.
The allegations made in the statement of claim involve some hundreds of occasions on which, it is said, diesel petroleum product was delivered into the depot in Numurkah and blended with other, cheaper petroleum products, some of which were excise free and some of which attracted much lower excise than diesel fuel. The resulting product, it is alleged, was sold as “diesel”. The plaintiff contends that, as each blending occurred, there was “manufacturing” for the purpose of the Excise Act and duty became payable; the blending was not licensed, and duty was not paid; and the blending was disguised by a range of measures. According to the plaintiff, each of the five defendants was involved in the foregoing, although the blending itself was to be inferred from a range of evidence, including the defendants’ stock records, transport records and banking records as well as documents passing between the defendants and their suppliers and customers. The total amount of duty said to have been evaded was about $6.5 million and, as ss.120(2)(b) and 129 provide for fines of up to two to five times the amount of duty evaded for some of the offences, the defendants are facing the possibility of fines of between $13 million and $32.5 million, which are very, very substantial sums indeed.
The proceedings brought by the Chief Executive Officer of Customs were commenced by the filing of a writ because of s.136 of the Excise Act, which reads:
"Every excise prosecution in a court ... may be commenced prosecuted and proceeded with in accordance with any rules of practice (if any) established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge.”
It is common ground that there are no “rules of practice ... established by the Court for Crown suits in revenue matters”, and so the proceeding was instituted “in accordance with the usual practice and procedure of the Court in civil cases”. As already mentioned, pleadings were exchanged and, in time, further and better particulars. When the proceeding came before the Listing Master for directions on 14 May 2002, a number of interlocutory orders were made, including the order that the plaintiff file and serve on the defendants a statement of the evidence-in-chief which was to be adduced through each witness which the plaintiff intended to call at trial. The Master refused to make a similar order in respect of the defendants on the ground that excise prosecutions were akin to criminal proceedings and that in criminal proceedings an accused was not called upon to disclose his or her case until the close of the prosecution case.
From the order of the Master the Chief Executive Officer of Customs appealed to the judge in the Practice Court. The appeal was heard on 4 June last and on 12 June, allowing the appeal, his Honour ordered that by 31 October 2002 -
“... the Defendants file and serve on the Plaintiff a statement of the evidence in chief which subject to any contrary direction of the trial Judge will be adduced through each witness which they intend to call at trial ... . Without the leave of the trial Judge the Defendants may not lead evidence which is not contained in the statement of evidence of the witness from whom that evidence is sought to be led.”
In his reasons for judgment, his Honour said:-
"In my opinion these are not criminal proceedings and there can be no question of self-incrimination arising in the case ...
What is being sought is no more than witness statements. The order proposed by the plaintiff does not compel anyone to give evidence or produce documents but requires that if it is to be done, proper notice be given. In that way it may be contrasted with discovery where a coercive power to obtain documents is used.”
In view of the nature of the proceeding and its complexity his Honour considered that witness statements were an appropriate preliminary to the trial, if only for the purpose of identifying what facts among the many were in dispute.
In consequence of the orders made on 23 August last, we now have before us an appeal by the two directors, but not the three companies, against the order made by the judge on 12 June 2002 for the delivery of witness statements before trial. It may be that the obligation cast upon the defendants by the order under appeal is not very different from the obligation cast upon the corporate defendants if, as may be supposed, they will be relying upon evidence from their directors, including the present appellants. But I pass that by: no point was made of it during argument and its only relevance now is to emphasise that in putting their arguments against the orders made below, the appellants were resting on general principle rather than any specific evidence of particular prejudice.
Application for adjournment
When the appeal was called on for hearing, the appellants immediately applied for an adjournment, notwithstanding that the trial was fixed to commence on 3 March next. The application, which was opposed, was put on the ground that the High Court had now heard argument in Chief Executive Officer of Customs v. Labrador Liquor Wholesale Pty. Ltd. and that the judgment, when given, would be of significance to this present appeal. The appeal in Labrador was from the Court of Appeal in Queensland[1] which had held, despite earlier expressions of view elsewhere to the contrary, that the standard of proof in such excise prosecutions was beyond reasonable doubt[2]. We refused the application for an adjournment, having regard to a number of considerations.
[1][2001] Q.C.A. 280.
[2]Contrast Comptroller-General of Customs v. Jayakody (Supreme Court of Victoria, 9 November 1993, unreported) where Byrne, J. held, with reluctance, that he was driven to hold that the relevant standard of proof was not criminal but civil, albeit according to Briginshaw v. Briginshaw (1938) 60 C.L.R. 336.
First, we were not persuaded that a decision on the standard of proof would or could impinge directly on our consideration of this appeal. Secondly, the facts upon which the application was rested had been known for some time. The Queensland case was mentioned on the application for leave to appeal (on 23 August last) and argument in the High Court was heard on 11 December 2002, yet no application was made for adjournment until this appeal was called on for hearing on 6 February 2003 and then without prior notice either to the court or to the respondent. Thirdly, there was the proximity to the trial date of 3 March, a date which had been fixed for some time, some three weeks having been allocated for the trial. Indeed when leave to appeal was granted, it had been granted in terms designed to maintain the trial date if at all possible, and the appellants' last minute application to adjourn the hearing of the appeal was seen as inconsistent with that intent. In all the circumstances, we had no hesitation in dismissing the application for adjournment; and now, having heard argument on the appeal, I am clear that the appeal too should be dismissed.
The privilege against exposure to penalty
No doubt mindful of the need to demonstrate error below if the appellants were to succeed in overturning what was, in essence, an exercise of discretion, the appellants set out to demonstrate that, contrary to the opinion expressed by the judge in his reasons, the present proceedings were properly characterised as "criminal " and that accordingly the appellants were entitled to the privilege against self-incrimination or against exposure to penalty, notwithstanding the effect of s.136. As authority to the contrary, his Honour had referred to the decision of Byrne, J. in Comptroller-General of Customs v. Jayakody (Supreme Court of Victoria, 9 November 1993, unreported), but that, the appellants submitted, was to misunderstand what his Honour had said there. To my mind, it is unnecessary for us to go to Jayakody, for that was in any event a decision on the standard of proof which must now await the opinion of the High Court in the Labrador case.
Jayakody apart, appellants’ counsel spent a good deal of time seeking to establish that these proceedings were "of a criminal or at the very least of a quasi-criminal nature”. Mr. Woinarski took us in particular to the language of the statute and to the relief being sought by the plaintiff against the defendants. Now, whatever may have been said of proceedings to recover penalties in other contexts, in this case the relevant wording of the statute does appear to bespeak criminality. Thus, for example, ss.117, 119 and 120 refer to the relevant breach of the statute as an “offence”, such offence as having been “committed”, and the person in breach as “guilty of an offence” and “punishable upon conviction”; and in this connection counsel referred also to ss.35, 61, 128, 129, 133, 134, 136 and 137 of the Excise Act and to ss.4H and 16 of the Crimes Act. Here could be seen, he submitted, the language of crime and punishment, which is in turn emphasised when attention is given to the relief which is being sought against the defendants. The plaintiff seeks against the defendants declarations of guilt of the offences alleged, the recovery of penalties (surely by way of punishment) and orders for reparation, orders which themselves are sought under provisions of Crimes Act. As counsel pointed out in passing, citing Witham v. Holloway[3], it is not necessarily determinative that the proceedings are brought by way of civil process. To put it shortly, they may be both criminal in nature and civil in form and whether the proceedings themselves are then to be called "criminal" or only "quasi-criminal" (or, which is much the same, "of a penal nature") may well depend upon the purpose for which the question is asked.[4]
[3](1995) 183 C.L.R 525 at 534.
[4]See and compare Perkins v. County Court of Victoria (2000) 2 V.R. 246 where a proceeding in the Trial Division for judicial review of a conviction in the County Court was held to be a "criminal proceeding" within the meaning of Supreme Court Act 1986 s.24, which deals with costs.
Obviously enough the proceeding which was commenced in this instance was instituted in order to establish the defendants' guilt of the offences alleged and for the recovery of pecuniary penalties as a result, although equally obviously the proceeding itself is civil in form as expressly authorised (if not indeed directed for all practical purposes) by s.136 of the Excise Act. So much is not in dispute and in the end whether it is correct to characterise the proceeding, once instituted, as itself a "criminal proceeding" despite its form or because of its form as no more than a "proceeding of a penal nature" does not seem to me to matter. Like proceedings for offences and penalties under the Income Tax and Social Services Assessment Act 1936-1951 were described as "of a penal nature" in Naismith v. McGovern[5]. In that case the Court had to consider s.237 of the Assessment Act (a section in like terms to s.136 of the Excise Act) and Williams, Webb, Kitto and Taylor, JJ. said[6]:-
"We are here primarily concerned with the sections in Part VII [of the Assessment Act] relating to the procedure laid down for the recovery of pecuniary penalties for offences and not with the nature of the offences themselves .... The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature[7]. It is clear that the actual procedure by which an order for the recovery of a penalty is obtained in this Court is, in the absence of a special order, the civil procedure of this Court. This is expressly provided for by s.237 of the Assessment Act.”
The difference in characterisation is then probably no more than a difference in emphasis: is the predominant feature the underlying offence relied upon (which is criminal) or the procedure by which guilt is to be established and penalty imposed (which is civil)? In my opinion it makes no difference here because in Naismith, in proceedings which were merely "of a penal nature" the Court appeared to recognise the very privilege to which Mr. Woinarski referred so often in argument: the privilege against self-incrimination or (as it was in Naismith) against exposure to penalty.[8]
[5](1953) 90 C.L.R. 336.
[6]At 341.
[7]My emphasis.
[8]As to which see now Daniels Corporation International Pty. Ltd. v. A.C.C.C.(2002) 77 A.L.J.R. 40 at [31].
In Naismith it was discovery that was at issue. Action had been commenced by the Commissioner of Taxation against the taxpayer for declarations that the taxpayer had been guilty of an offence under the Income Tax and Social Services Contribution Assessment Act in understating his income and making a false return. The Commissioner also sought an order for the payment of penalties. The defendant taxpayer served notice on the Commissioner requiring him to make discovery and, when the Commissioner declined to comply, the defendant sought an order for compliance from the Supreme Court of Queensland. The summons was dismissed by a judge who held that the proceedings were criminal proceedings and that therefore discovery could not be ordered. An appeal by the defendant was allowed by the High Court and the plaintiff was ordered to make discovery.
In their joint judgment, after observing that s.237 directed that the recovery of a penalty was to be by civil procedure unless otherwise ordered and that discovery and the administration of interrogatories were both part of the ordinary civil procedure of a court[9], Williams, Webb, Kitto and Taylor, JJ. remarked that historically a court of equity (the more common source of an order for discovery) would not make an order for discovery or for the administration of interrogatories “in favour of the prosecutor .... where the proceeding was of such a nature that it might result in a penalty or forfeiture”[10]. On the assumption that these principles were applicable, their Honours accepted that the plaintiff could not obtain an order for discovery or for interrogatories against the defendant but held that there was no such impediment to an order for discovery against the plaintiff. It is the former not the latter that is important here, for the immunity of the defendant rested surely in the privilege against exposure to penalty: see for instance R. v. Associated Northern Collieries[11] where Isaacs, J. canvassed the liability of a defendant to an order for discovery or interrogatories in a proceeding brought for alleged offences and for penalties under the Australian Industries Preservation Act 1906-1910 (Cth).
[9]As to which see also Judiciary Act 1903 (Cth) s.64.
[10]90 C.L.R. at 341.
[11](1910) 11 C.L.R.738.
The appellants’ contention was that in the Excise Act Parliament had deliberately used the language of a criminal proceeding and that "in the absence of any clear intention by the Parliament that the normal and ordinary meaning associated with the words used was not intended, this Court should hold there has been no interference with the ordinary and fundamental rights associated with a criminal proceeding: see Potter v. Minahan[12] and Daniels Corporation International Pty. Ltd. v. A.C.C.C.[13]". Section 136 (the argument ran) should not in itself be taken to be a contrary intention: Sorby v. Commonwealth[14] and Bridal Fashions Pty. Ltd. v. Comptroller-General of Customs[15]. Section 136 authorised the recovery of penalties for offences by way of civil procedure and, while no objection was taken (counsel said) to the commencement of this proceeding by writ and the exchange of pleadings and particulars, the prosecution of the civil suit necessarily gave rise to the exercise of discretion from time to time and such exercise of discretion (as in this instance) must always have regard to the underlying nature of the proceedings as criminal. I think that such an interpretation of s.136 can be accepted readily enough, particularly in the light of what was said by the High Court in Naismith about the provision which was under consideration there and which was so similar to s.136. But what follows? It was common ground, I think, that the privilege against self-incrimination or exposure to penalty is not prejudiced by s.136[16] - and so much seems to be fairly well-established. But, as the argument developed, it turned out that that was not the primary concern of the appellants[17].
[12](1908) 7 C.L.R. 277.
[13](2002) 77 A.L.J.R. 40 at [11], [39], [90] and [134].
[14](1983) 152 C.L.R. 281 at 309.
[15](1996) 17 W.A.R. 499 at 504, 508, 510.
[16]Or indeed by s.143(2), according to Bridal Fashions.
[17]Reliance upon the privilege was dubbed by Mr. Woinarski "the fall back position".
The right to say nothing more yet
It will be recalled that the ground upon which the Listing Master refused to order the defendants to deliver witness statements before trial was not the privilege against self-incrimination but, as appellants counsel put it to us, "the principle that in a criminal prosecution the defendant is not required to expose his hand before the Crown has completed its evidence". It was this, said Mr. Woinarski, that the defendants had urged before the judge and it was by reference to this that his Honour should have dismissed the plaintiff's appeal from the Master's order, thereby confirming her refusal to order the defendants to deliver witness statements at this stage. The submission of the appellants was that, the proceedings being criminal or at least quasi-criminal in nature, they were entitled to the benefit of staying silent as to evidence, at least for the time being. Of course, if the appellants are correct in their submission, the distinction drawn on the application for leave to appeal between the corporate defendants and the individual defendants may be difficult to maintain to the extent that that turned on the unavailability to a corporate defendant of the privilege against self-incrimination or exposure to penalty[18]; but that is of no direct concern to us now. As I see it, the difficulties with the argument lie elsewhere.
[18]As to the first, see Environment Protection Authority v. Caltex Refining Co. Pty. Ltd. (1993) 178 C.L.R. 477 and as to the second, Bridal Fashions at 505-10 and Daniels Corporation at [31].
The first difficulty is to establish the principle relied upon. Mr. Walters, in a carefully constructed argument, contended that, whether or not it had ever been so, it was not nowadays the case, even when a person was on trial before a jury, that the accused was entitled to remain altogether silent as to the defence case until the close of the Crown case. Some statement of the defence was commonly required once the trial had been opened and, of course, there were specific matters, such as alibi, of which even more notice was required. Mr. Woinarski’s answer was that these were but particular exceptions by statute to a general rule permitting the accused to stay silent until all evidence against him or her had been put before the Court, and perhaps that is so. But there is still difficulty for the appellants in that these excise prosecutions are not being prosecuted as a criminal trial because s.136 provides to the contrary and the question must therefore be how far, if at all, the prescription made by s.136 admits of the principle upon which the appellants seek to rely, a principle drawn from the conduct of criminal trials properly so-called (whether or not prosecuted summarily).
To support the existence of a general principle having wider application than at criminal trials only, counsel for the appellants relied upon May v. O’Sullivan[19] and Wilson v. Kuhl[20], but both these cases concerned the making of a "no case" submission and the proper test to be applied at that stage of the trial. Contrary to the submission made to us, neither supports what was called “the fundamental principle” that a defendant ought not to be required to make any answer to the charges laid until after the Crown case is known, that is to say, when all the admissible evidence is before the Court. That may reflect the norm in a criminal prosecution but this is not a criminal prosecution. No doubt this is a proceeding to establish the defendants' guilt of offences and to recover from them penalties by way of punishment, but it is to be commenced and conducted "in accordance with the usual practice and procedure in civil cases" as directed, in effect, by s.136. Mr. Woinarski sought to restrict the operation of that section to the commencement of the proceeding, but that cannot be justified; and the conclusion that the privilege against self-incrimination is not prejudiced by s.136 does not point either way, if only because (as the appellants themselves submitted) that privilege "applies in both civil and criminal cases and is available both at law and in equity", to use the words adopted in Bridal Fashions[21].
[19](1955) 92 C.L.R. 654 at 658.
[20][1979] V.R. 315 at 318.
[21]17 W.A.R. at 504.
On the face of it, s.136 permits the commencement of these excise prosecutions by writ on the civil side and at least authorises their prosecution accordingly. The ordering of witness statements before trial is nowadays a common enough part of the "usual practice and procedure in civil cases", although it remains a matter of discretion in most cases. Here, it was a matter of discretion (as the appellants themselves urged) and the judge considered that there were good grounds for exercising the discretion against the defendants. He thought it appropriate to order the defendants to deliver witness statements before trial if only to identify from among the great mass of detail relied upon by the plaintiff what facts were in dispute and what were not. Ordinarily such an exercise of discretion in a matter of practice or procedure could not be overturned on appeal. His Honour’s statement along the way that “these are not criminal proceedings" was not in itself incorrect if his Honour meant no more than that this was not a criminal trial, or that the proceedings, though "of a penal nature", were civil in form. After all, according to the High Court[22], the most that can be said in such cases is that the proceedings are “of a penal nature” (and see the various authorities to which reference was made immediately before that statement of conclusion in Naismith[23]). His Honour’s statement that there “can be no question of self-incrimination arising in the case” may be explained by what was next said: that what was being sought was no more than witness statements, an order for which did not place any compulsion upon the defendants. Moreover, if, as we were told by appellants' counsel, the defendants did not rely upon the privilege in argument before the judge (as it emerged during argument before us that the appellants were not relying directly upon the privilege on appeal), his Honour’s passing reference to self-incrimination (even if taken to embrace the privilege against exposure to penalty) cannot have been significant. It said nothing of the so-called principle relied upon by the appellants, that they could not be required to identify their evidence before the trial, or indeed before the close of the plaintiff’s case.
[22]Naismith 90 C.L.R. at 341.
[23]Robertson’s Civil Proceedings by and against the Crown at 174, Attorney-General v. Freer (1822) 11 Price 183 at 197, 147 E.R. 441 at 446 per Graham, B., R. v. McStay (1945) 7 A.T.D. 527 at 553 per Williams, J., McGovern v. Hillman Tobacco Pty. Ltd. (1949) 4 A.I.T.R. 272 and Jackson v. Butterworth [1946] V.L.R. 330, Jackson v. Gromann [1948] V.L.R. 408 at 411 per Fullagar, J.
In support of the exercise of the discretion below, Mr. Walters relied upon the decision of Drummond J. in A.C.C.C. v. Pioneer Concrete (Qld) Pty. Ltd.[24]. That was a case in which the A.C.C.C. was seeking a civil penalty and injunctive relief under the Trade Practices Act 1974 (Cth), proceedings which, as I apprehend it, turned upon ss.76 and 77 of that Act, not s.79. (The distinction is important because proceedings under the former do not involve criminal offences: that is made plain by express provision in s.78 and the contrast afforded by s.79.) Drummond J. ordered an exchange of affidavits before trial on the undertaking of the plaintiff that the affidavits provided by the defendants would not be tendered against them in response to any submission that there was no case to answer. By that means, his Honour sought to avoid prejudice to the position of the defendants, whilst achieving appropriate case management before trial. Drummond J. referred to the earlier decision of Morling J. in Trade Practices Commission v. Tepeda Pty. Ltd.[25] in which a like course had been followed.
[24]Federal Court, 15 December 1995, unreported.
[25]Federal Court, 11 December 1992, unreported.
Mr. Walters submitted that the same course should be followed here, although he did point out that, because of the express provision found in the Excise Act to the effect that averments constitute evidence, it was difficult to see how a "no case" submission could succeed (assuming, of course, that the facts averred were sufficient to justify any necessary inference, whether of intention or otherwise). If it mattered, he said, he had offered below (and offered again) a like undertaking to that exacted in Pioneer Concrete and he emphasised to us that he was not seeking the witness statements in order to augment the plaintiff's own case but, he hoped, in order to avoid surprise and a consequent need for adjournment. Moreover, he submitted, the defendants could scarcely be prejudiced by an order to deliver witness statements at this stage, for not only were they not compelled to go into evidence if they chose not to (as the judge himself had pointed out in the judgment under appeal), but they were by now, through the pleadings, the particulars provided and the comprehensive witness statements made available by the plaintiff pursuant to the order of the Listing Master, in possession of the plaintiff’s case. If a comparison were needed, they were in much the same position as if, facing a full-scale criminal trial by jury, they had earlier been provided with the “hand-up brief”.
Very properly Mr. Walters referred the court to two other cases in the Federal Court in which an order for witness statements had been refused: A.C.C.C. v. J. McPhee & Son (Australia) Pty. Ltd.[26] and A.C.C.C. v. Amcor Printing Papers Group Ltd.[27] In McPhee, Heerey, J. rescinded directions previously given for the filing and serving of witness statements by five respondents, who were natural persons, in a proceeding for pecuniary penalties brought by the A.C.C.C. under Part IV of the Trade Practices Act. Relying upon what had been said by Deane J. (when a judge of the Federal Court) in Refrigerated Express Lines (Australasia) Pty. Ltd. v. Australian Meat and Live-stock Corporation[28] Heerey, J. held that the filing and service of witness statements “would amount to provision of information by them”[29] and so should not be ordered. As his Honour saw it, the provision of such statements “would be analogous to answers to interrogatories or the production of documents on discovery”[30] which, according to Deane J., were not to be ordered in proceedings for the recovery of penalties by reason of “well established principle”. But in Refrigerated Express Lines Deane J. was disposing of a case involving discovery and interrogatories and as I read the reasons for judgment his Honour was relying upon, but not extending, the principle that in proceedings to recover penalties discovery and interrogatories will not be ordered.
[26](1997) 77 F.C.R. 217.
[27](1999) 163 A.L.R. 465.
[28](1979) 42 F.L.R. 204 at 207-8.
[29]77 F.C.R at 218.
[30]77 F.C.R at 220.
That point can be made in more than one way. First, in referring to the “well established principle”[31] which was at stake, his Honour cited in support of it R. v. Associated Northern Collieries[32], Naismith v. McGovern[33] and Martin v. Treacher[34]. All three were cases involving either discovery or interrogatories or both. Secondly, Deane J. was concerned whether the “well established principle” affecting discovery and interrogatories extended to the proceedings before him, which were “not for recovery of a penalty but to prevent and redress civil injury", and his Honour said not, or at least not to the same extent. In an action for recovery of penalties, defendants were commonly “excused, in limine, from giving discovery of documents and from answering interrogatories”, but in an action which was not for the recovery of penalties but merely to prevent and redress civil injury, the defendant was not compelled “to provide information or produce documents for inspection by the other party if [and only if] the result thereof will be to provide evidence against him which may be used to establish his liability to a penalty in other proceedings”. In other words, in the former case, prejudice was assumed if an order was made either for discovery or interrogatories, whereas in the latter case the defendant had to establish the prejudice. In the latter case, there was no general rule excusing the defendant from an order for discovery or interrogatories in limine and the question of privilege against self-incrimination or exposure to penalty was to be raised by taking objection to the production of documents or to the answering of the interrogatories. That was the context in which the provision of information was referred to: it was not, as I read his Honour’s reasons for judgment, any extension of principle beyond discovery and interrogatories.
[31]42 F.L.R. at 207.
[32](1910) 11 C.L.R. 738 at 741-748 per Isaacs J.
[33](1953) 90 C.L.R. 336 at 341-2.
[34](1886) 16 Q.B.D. 507.
In the later case of Amcor, another action to recover a pecuniary penalty under s.76 of the Trade Practices Act, the A.C.C.C. was again seeking orders that the respondents file statements of evidence before trial. While the corporate respondents raised no objection to this, those defendants who were natural persons opposed any such filing in advance of the hearing. They were prepared, they said, to file statements of evidence when they opened their respective cases at trial, but they contended that they should not be required to do so any earlier. This submission was upheld by Sackville J., who followed the like decision in McPhee. As described in his Honour's reasons for judgment, counsel for the A.C.C.C. had argued that the orders sought could be justified “because they did not oblige the respondents to give evidence or to provide information on affidavit”, but merely required them to file witness statements if they elected to give evidence. In his Honour’s view, the circumstances were such “as to belie the beguilingly simple way in which [counsel] presented the so-called 'election' facing the individual respondents”. Sackville J. said:-
“On the analysis in McPhee, it is enough to infringe the relevant privilege if the effect of the orders is to require a respondent who intends to give evidence to file a statement of evidence in advance of the hearing, in circumstances where access to the statement would confer a forensic advantage on the party seeking orders imposing penalties.”[35]
A little later in the judgment, the judge said:-
"In my opinion, if the orders sought by the ACCC were made, the 'election' facing the individual respondents would neither be unconstrained nor free. The individual respondents would not be compelled by an order of the court to make statements or provide information that would expose them to a penalty. ... But if they wished to avoid adverse forensic consequences in the penalty proceedings, they would have little choice but to file statements of evidence.”[36]
With great respect, those “adverse forensic consequences”, and correspondingly the “forensic advantage” supposedly given to the A.C.C.C., are merely the result of any defendant's choosing to give evidence. There is a question of timing, of course (that is to say, whether the defendant should be freed of the need to disclose the evidence before the commencement of the trial, or more particularly before the close of the plaintiff’s case) but the exposure to penalty, if such it be, comes about by the giving of the evidence, not the timing of its disclosure. Further, I agree with counsel's submission in Amcor that, because there is lacking the coercion involved in discovery and interrogatories, the cases in which such orders are refused on the ground that the proceeding is brought to recover penalties are simply not relevant when the order sought is for no more than the delivery of witness statements before trial.
[35]Emphasis added.
[36]Emphasis added.
For these reasons, I would accept Mr. Walter’s submission that the decisions in both McPhee and in Amcor should be distinguished or, if they cannot be distinguished, not followed in this instance[37]. It is true that in both there was no underlying complaint about the commission of a criminal offence: as already mentioned, the proceedings were not brought as a result of any offence such as is mentioned in s.79 of the Trade Practices Act. There may then have been a question, in both cases, whether the privilege against exposure to penalty was available simply because of the nature of the proceedings (which seems to have been assumed) or whether it could be relied upon only on sufficient proof of the risk involved (the difference identified in Refrigerated Express Lines). However that may be, I am not persuaded by the appellants, who seized upon both McPhee and Amcor to support their own submissions, that either decision does anything to advance the cause of the appellants here.
[37]To the extent that McPhee and Amcor were followed and applied by a judge in the Trial Division in A.S.I.C. v. Plymin (2002) 4 V.R. 168 in refusing to order defendants to file and serve affidavits of evidence before trial, the decision, if not distinguishable, must now be doubted; but if and in so far as the decision rested independently on the exercise of discretion, that is another matter which does not presently call for consideration.
Conclusions
In conclusion, it seems to me that the reasons given by his Honour to justify the exercise of discretion necessary to support the ordering of witness statements in this instance were sufficient. Despite the reference to these not being “criminal proceedings” and there being “no question of self-incrimination arising in the case”, I am not persuaded of material error below. Importantly, the ordering of witness statements does not involve compulsion: no one is compelled to put forward witness statements if he or she chooses not to go into evidence, with the result that the privilege against exposure to penalty is not at issue. The appellants are required to file and serve witness statements only if they choose to give or adduce evidence and then only in respect of evidence that they choose to lead. The order is concerned rather with the timing of the disclosure of that evidence than with its provision. Cases on the making of orders for discovery or the administering of interrogatories are not to the point: it seems to be well established that in a proceeding such as the present, in which the plaintiff is seeking to establish guilt of offences and to recover penalties by way of punishment, orders will not be made for discovery or interrogatories because of the nature of the proceeding itself and without the need for any further or specific proof of prejudice. It is a different matter when an order is sought for delivery of witness statements before trial and, despite the appellants' submission to the contrary, I see real no support for the proposition that defendants in an excise prosecution for the recovery of penalties are entitled to resist such an order on the ground that they cannot be compelled, as a matter of principle, to
disclose their evidence before trial, or indeed before the plaintiff's case has been closed - at least in this instance where pleadings have closed, further and better particulars have been provided and the plaintiff's witness statements were delivered to all defendants some time ago. In argument Mr. Woinarski attempted to make something of the plaintiff's purportedly "reserving the right" to augment the evidence in the statements already delivered, but Mr. Walters assured us that that was only for the purpose of proving certain business records should it not be common ground that that is what they are. Indeed that emphasises the right that always remains in any of the parties to the proceeding to seek leave of the trial judge to adduce evidence notwithstanding that it is not included in a witness statement delivered before trial; and the order made 12 June 2002 so states.
Perhaps I should emphasise that, because the appellants rested their case on general principle, we are not considering the position that might arise if evidence were to be led, say on affidavit, to establish some specific risk to a party or the witness. One might well ask why a party would seek to lead prejudicial evidence in the proceeding against him or her, but I suppose that a difficulty might emerge if it was the party's witness who was concerned about incrimination in other proceedings. In A.S.I.C. v. A.B.C. Fund Managers[38] a party was excused by a judge in the Trial Division from providing affidavits from others in advance of trial, but there was affidavit evidence to establish the risk of incrimination and so that decision does not call for consideration now[39].
[38][2001] V.S.C. 92
[39]See and compare A.S.I.C. v. Plymin as mentioned in footnote 36 above.
It is for the reasons I have given that I would dismiss this appeal. That is subject, however, to the following. If application is made in that behalf I would vary the order made in the Trial Division on 12 June 2002 in order to fix a time for the defendants to deliver their witness statements with a view to preserving if possible the trial date of 3 March next. I would also discharge the stay granted by the Court of Appeal on 23 August 2002.
BATT, J.A.:
I agree with Phillips, J.A., but state in my own words the position in essence as I see it.
It may be assumed, solely for the sake of considering the appellants’ first argument, that an excise prosecution commenced by writ is a criminal proceeding and also that, subject to any modifications made by statute[40], the accused in a criminal trial cannot be required to make any answer to the charges until the close of the Crown case. But the conclusion contended for by the appellants (namely, that the order for witness statements is invalid) does not follow. For s.136 relevantly authorises an excise prosecution to be prosecuted and proceeded with “in accordance with the usual practice and procedure of the Court in civil cases”; and the pre-trial filing and service of statements of all witnesses to be called, or the ordering that that be done, is part of that practice and procedure. The section gives the order statutory authority. Moreover, since the section makes it clear that it is civil practice and procedure which applies[41], the (assumed) freedom from answering until the close of the Crown case in a criminal trial, whether that freedom be characterised as a fundamental principle or otherwise, cannot be determinative.[42] Secondly, to turn to the appellants’ “fall back” argument, no question arises of the infringement or abrogation of the privilege against self-incrimination or that against self-exposure to penalties (which apply in both civil and criminal proceedings), because, unlike an order for discovery or for the answering of interrogatories, the order for witness statements does not compel the disclosure of any information. The appellants retain a choice whether to give (or adduce) evidence or not and their decision on that question is simply one of many forensic decisions to be made by them in the proceeding, albeit an important one. It is true that, unless the leave of the trial judge is obtained, the order does accelerate the time for making the decision
and notifying the respondent of it, if affirmative. But that is not to infringe any privilege. Finally, even if the absence of a ground of appeal challenging the primary judge’s exercise of discretion were overlooked, such a challenge would fail: his Honour’s discretionary decision was sound, despite the two observations discussed and explained by Phillips, J.A. which, even if erroneous, disclose no material error.
O'BRYAN, A.J.A.:
[40]Of which, it might be contended, s.144 as to averments would be one, reliance being placed on Gallagher v. Cendak [1988] V.R. 731 at 744.
[41]Naismith v. McGovern (1953) 90 C.L.R. 336 at 341.
[42]Compare Philippine Airlines v. Goldair (Aust.) Pty. Ltd. [1990] V.R. 385 at 388 and 390.
I have read in draft the judgment of Phillips, J.A. and I agree for the reasons he has given that the appeal should be dismissed.
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