Trade Practices Commission v Arnotts Ltd

[1989] FCA 365

Re: TRADE PRACTICES COMMISSION
And: ARNOTTS LIMITED; ARNOTT'S BISCUITS LIMITED; FLEDSPAC PTY LIMITED a nd THE
DICKENS CORPORATION PTY LIMITED
No. G1316 of 1988
FED No. 365
Evidence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

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

CATCHWORDS

Evidence - subpoena to produce documents - claim of privilege against self-incrimination - test to be applied.

HEARING

SYDNEY

#DATE 14:7:1989

Counsel and Solicitors Mr. J.P. Hamilton Q.C. and for Mattingly Pty. Ltd. Mr. S.P. Gullotta instructed by

Philip Parbury

Counsel and Solicitors Mr. C.A. Sweeney Q.C. and for the first and second Mr. P. Comans instructed by Respondents: Clayton Utz

ORDER

The claim of privilege made by Mattingly Pty. Ltd. in respect of the four documents identified in the reasons for judgment is upheld.

Costs reserved.

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

JUDGE1

The background to this claim is described in the reasons for judgment given on 7 July 1989 in Mattingly's application to set aside a subpoena. For the reasons there given, part of the subpoena was set aside. (Directions were also given with respect to the call for documents sought in para. 3 of the subpoena as amended. In accordance with those directions, Mr. Studley was called and examined. Nothing arises for decision in this connection at this stage.)

1. In respect of the call for the production of certain documents, Mattingly claims privilege against self-incrimination. The documents sought, in respect of which privilege is claimed, are described (in their extended form) in the subpoena as follows:
   

"1.(a) (a): all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal to market or launch for sale in Australia any variety of biscuit.

1.(a) (c) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any instruction received or given concerning any proposal to market or launch for sale in Australia any variety of biscuit.

1.(a) (d) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the date or dates for the estimated implementation of any proposal to market or launch for sale in Australia any variety of biscuit.

1.(a) (f) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the biscuit business of Nabisco Brands Pty. Limited (now known as Cereal Foods Pty. Limited). 1.(a) (g) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal to import biscuits for sale in Australia. 1.(a) (j) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal for the distribution of biscuits in Australia.

1.(a) (k) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal for the test marketing of any variety of biscuit anywhere in Australia.

1.(a) (l) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to instructions given or received (since 1 September 1988) to part with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the results of any test marketing of any biscuit anywhere in Australia.

1.(b) (a) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memoranda, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal to market or launch for sale in Australia any variety of biscuit.

1.(b) (c) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memoranda, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any instruction received or given concerning any proposal to market or launch for sale in Australia any variety of biscuit.

1.(b) (d) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the date or dates for the estimated implementation of any proposal to market or launch for sale in Australia any variety of biscuit.

1.(b) (f) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the biscuit business of Nabisco Brands Pty. Limited (now known as Cereal Foods Pty. Limited). 1.(b) (g) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal to import biscuits for sale in Australia. 1.(b) (j) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal for the distribution of biscuits in Australia.

1.(b) (k) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to any proposal for the test marketing of any variety of biscuit anywhere in Australia.

1.(b) (l) all notes of telephone conversations, memoranda, original or copy correspondence, minutes, file notes or other documents comprising, recording or referring to the parting with possession or control of any document being original or copy correspondence, brief, report, memorandum, survey, research, analysis, note, minute, graph, feasibility study or other document made, dated, sent or received in the period 1 January 1987 to date recording or referring to the results of any test marketing of any biscuit anywhere in Australia."

1. In support of its claim, Mattingly called Mr. Studley, who said that Mattingly had four documents which answered the description in the paragraphs of the subpoena set out above, but that he believed that the documents "could incriminate" the company. Mr. Studley also said that the earlier subpoena, referred to in the previous reasons, was served on Mattingly at about 4.30 p.m. on 30 May 1989, although he had "no inkling" that it was coming. Mr. Studley said that his concern, in claiming privilege on behalf of Mattingly, "relates to the manner in which documents left (the) company." According to his evidence, Mattingly had no basis for thinking that it had any entitlement to retain the documents.

2. In a related matter dealt with in reasons for judgment given this day, Mr. E.S.K. Doble, another director of Mattingly, also gave evidence on these matters. Over the objection of Mattingly, I allowed this evidence to be tendered by Arnotts in the present claim. Mr. Doble also said that he believed that the four documents already mentioned might incriminate. In cross-examination, Mr. Doble gave the following explanation of his beliefs:
   

"MR. SWEENEY: (senior counsel for Arnotts) Did you speak to any of the other directors of - I withdraw that. When the documents left Mattingly before the service of the subpoena, was it your belief that Mattingly was obliged to part with possession of those documents? --- Yes.

And was it your belief that Mattingly parted with possession of those documents only because it was obliged to do so? --- Yes.

And that it was obliged to do so because the owner of the documents called for them? --- Yes. And you - was it your belief that Mattingly had no other purpose or reason for parting with the documents? --- Yes.

And that was your personal belief as well as your belief about Mattingly's view, was it? --- Yes. So, so far as you, yourself, are concerned, at the time that Mattingly parted with the documents you believe that Mattingly had no option but to give up the documents? --- Correct.

And your belief is that Mattingly gave up the documents under compulsion? --- Correct.

You did not do it to avoid the process of the court, did you? --- Certainly not.

Nor so far as you know, did any other officer or servant of Mattingly? --- Correct.

There was absolutely no consciousness in your own mind about avoiding the process of the court? --- None whatsoever.

Or so far as you know, in the mind of any other Mattingly officer or servant? --- Correct. The parting with the documents therefore, so far as you are concerned, was an entirely innocent parting was not it? --- Absolutely.

And the same is true, so far as your knowledge goes of the state of mind of every other Mattingly officer or servant? --- Correct.

So that you are satisfied are not you, that so far as your own conduct is concerned, you did not do anything wrong? --- Absolutely.

And you are satisfied that so far as the conduct of other Mattingly officers or servants is concerned, they did not do anything wrong either? --- Correct. Well then, you have no fear that you have committed a criminal act, have you? --- Consciously, no. Mr Doble, as you sit in the witness box you are totally convinced that all relevant acts of yours were completely innocent, are not you? --- I am, yes. And you do not believe that anything you have done was of a criminal character? --- No.

And you do not believe that anything that any other Mattingly officer or servant did was of a criminal character, do you? --- No.

And you do not believe, do you, that these four documents that we have been talking about demonstrate that you have done anything criminal? --- It depends on the law.

You do not believe - I am asking you about your beliefs - - -? --- I do not believe this, no. You do not believe the documents reflect adversely in any way upon you, do you? --- No.

Or for that matter upon any other officer or servant of Mattingly? --- No."

1. On behalf of Mattingly, it is claimed that production of the four documents may incriminate directly or "may lead to incrimination, or to the discovery of real evidence of an incriminating character." (See Sorby v. The Commonwealth (1983) 152 CLR 281 at p 310.) It is said, on behalf of Mattingly, that there is a real risk of its conviction for contempt of court by virtue of the production of the four documents because they might form a link in a chain of events from which the inference is open that Mattingly assisted in the removal of other documents from the jurisdiction so as to avoid their production on a subpoena and thus, it might be said, Mattingly unlawfully interfered with the course of justice in the sense explained in Lane v. Registrar of the Supreme Court of New South Wales (1981) 35 ALR 322 at pp 331-2.

2. It is well established that it is for the person claiming the privilege "to assert it and to identify its precise basis. The gist of the privilege is that the claimant reasonably apprehends danger as a result of giving answers or of producing documents" (see Cross on Evidence, Third Australian Edition at p 621). But as Cross says (at p 622):
   

"The witness's mere statement that an answer might have this effect is not sufficient, although it is on oath and even if there is not doubt concerning his bona fides. The court must see from the circumstances of the case, and from the nature of the evidence which the witness is called to give, that there is reasonable ground to apprehend danger to him from his answer. The judge must come to the conclusion that such danger is real and appreciable with reference to the ordinary operation of law in the ordinary course of things, not a danger of an imaginary and unsubstantial character, having reference to some extraordinary and barely possible contingency so improbable that no reasonable man would suffer it to influence his conduct."

1. In Re Westinghouse Electric Corporation Uranium Contract (1978) AC 547, Shaw L.J. (at p 581) said that the precise measure or degree of the risk to the witness is "something which the court is not called upon to assess so long as there is a degree of risk which cannot be dismissed as tenuous or illusory or so improbable as to be virtually without substance. The question is, whether there is a recognisable risk?" Shaw L.J. cites Lord Truro L.C. in Short v. Mercier, 3 Mac & G (at p 205):
   

"Now, a defendant, in order to entitle himself to protection, is not bound to show to what extent the discovery sought may affect him, for to do that he might oftentimes of necessity deprive himself of the benefit he is seeking; but it will satisfy the rule if he states circumstances, consistent on the face of them with the existence of the peril alleged, and which also render it extremely probable."

1. In United States v. Weisman 111 F 2d 260 (2d Cir 1940), Learned Hand J. said (at P 262):
   

"Obviously a witness may not be compelled to do more than show that the answer is likely to be dangerous to him, else he will be forced to disclose those very facts which the privilege protects. Logically, indeed, he is boxed in a paradox, for he must prove the criminatory character of what it is his privilege to suppress just because it is criminatory. The only practicable solution is to be content with the door's being set a little ajar, and while at times this no doubt partially destroys the privilege, and at times it permits the suppression of competent evidence, nothing better is available. All this has been long understood, but it is not so clear to what facts the privilege extends. Does it protect more than those which 'tend' to prove a crime? Does it also cover those which can only be clues to the discovery of other facts which in turn so 'tend'? The doctrine of Counselman v. Hitchcock, . . . goes as far as the second; though we need not say how far it has been affected by later decisions . . . All crimes are composed of definite elements, and nobody supposes that the privilege is confined to answers which directly admit one of these; it covers also such as logically, though mediately, lead to any of them; such as are rungs of the rational ladder by which they may be reached. A witness would, for example, be privileged from answering whether he left his home with a burglar's jimmy in his pocket, though that is no part of the crime of burglary." (Emphasis added)

1. These last observations are in point here. It is apparent that the production of the documents will lead to the provision of evidence that Mattingly parted with the possession of the documents in circumstances which may indicate that a contempt of court was committed.

2. It is true that, in cross-examination, both Mr. Studley and Mr. Doble asserted that, in their view, Mattingly's conduct was innocent. But such assertions cannot conclude the inquiry any more than an assertion of incrimination by a witness. The present question is not whether Mr. Studley or Mr. Doble or Mattingly believe Mattingly is innocent. 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" (see Bowen C.J. in Eq. in Re Intercontinental Development Corp. Pty. Ltd. (1975) 1 ALCR 253 at p 259).

3. In my opinion, when the whole of the evidence is taken into account, it is possible that the four documents could become a means of bringing home an offence to Mattingly (see R. v. Deputy Commissioner of Taxation ex parte Briggs (1987) 13 FCR 389 at p 393 and the cases there cited). The apprehended danger of prosecution is, in my view, sufficiently substantial to justify the claim of privilege.

4. I make the following orders:
   

1. The claim of privilege made by Mattingly Pty. Ltd. in

respect of the four documents identified in the reasons

for judgment is upheld.

2. Costs reserved.