Vasil v National Australia Bank Ltd

[1999] NSWCA 161

Reported Decision: 46 NSWLR 207
106 A Crim R 339

New South Wales

Court of Appeal

CITATION:	Vasil v National Australia Bank Limited [1999] NSWCA 161
FILE NUMBER(S):	CA 40416/98
HEARING DATE(S):	05/05/99
JUDGMENT DATE:	28 May 1999
PARTIES :	Stephen Vasil v National Australia Bank Limited
JUDGMENT OF:	Meagher JA at 1; Stein JA at 7; Fitzgerald JA at 11

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S) :	11324/98
LOWER COURT JUDICIAL OFFICER:	Dowd J

COUNSEL:	C Jordan (Solicitor)(Appellant) P L G Brereton SC (Respondent)
SOLICITORS:	Xenos Jordan (Appellant) Mallesons Stephen Jacques (Respondent)
CATCHWORDS:	PRIVILEGE against self-incrimination; order as to assets disclosure; Mareva injunction; Evidence Act s128; Reid v Howard (1995) 184 CLR 1.
CASES CITED:
DECISION:	Appeal allowed.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40416/98
CLD11324/98

MEAGHER JA
STEIN JA
FITZGERALD JA

Friday, 28 May 1999

Stephen VASIL v NATIONAL AUSTRALIA BANK LIMITED

JUDGMENT

1   MEAGHER JA: I have had the honour of reading in draft the judgment of Fitzgerald JA. However, I find myself unable to agree with it. 2   The respondent’s submission was that all relevant authorities made it clear that, in the case of a subpoena ducas tecum and in the case of a subpoena ad testificandum, in the case of an order to give discovery or an order granting leave to interrogate, the objection that the answers or the documents might incriminate the person required to answer questions or produce documents should be taken at the time when the information was required to be taken or the documents produced, not earlier. 3   The authorities on this point are quite clear, and are in the respondent’s favour. They are mentioned in Fitzgerald JA’s judgment. Moreover those authorities have been applied to the case of a Mareva injunction, as has been held in the further authorities referred to by his Honour. 4   Against this tide of authority, Fitzgerald JA relies on the High Court decision in Reid v Howard (1995) 184 CLR 1. That case has nothing to do with the present case. It is authority for the proposition that:

“The privilege against self incrimination may be abridged by statute or waived but, that aside, it has generally accepted that it is without “real exception””.

5   That is what the joint judgment of Toohey, Gaudron, McHugh and Gummow said (at 12). But this principle arises when the privilege is claimed, not earlier. In that case there was no doubt the recipient of the relevant order wished to claim the privilege. In the present case one does not know to what Mr Vasil wishes to object. 6   I would dismiss the appeal with costs. 7   STEIN JA: At first blush I was seduced by the respondent’s argument that the disclosure order made by Dowd J did not abrogate or modify the privilege against self incrimination, but left it intact. According to the respondent, the privilege is still available to the appellant to claim in an affidavit. 8   I accept, as Meagher JA makes plain in his judgment, that in the case of a subpoena, discovery or interrogatories, if the person concerned wishes to claim the privilege, he or she does so at the time when the documents are produced or the interrogatories are required to be answered. In this way the privilege is preserved. 9   But attention must be drawn to the terms of this ex parte disclosure order under challenge. It requires the appellant to deliver to the respondent bank, in care of its solicitors, an affidavit setting out all of the material referred to in paragraphs 2(a) to (d) inclusive of the order. When will the opportunity arise for the appellant to claim the privilege? It is not as if he can swear an affidavit disclosing the details required, place it in a sealed envelope, deliver it to the Judge and then claim the privilege. The terms of the disclosure order do not permit this. Nor do the terms of the order permit the appellant to answer it by delivering to the bank an affidavit stating no more than the privilege is claimed from providing the information set out in the order. That could very well be in breach of the order. 10   In my opinion the real effect of the discloser order is to abrogate the privilege against self incrimination. Accordingly, I agree with the reasons of Fitzgerald JA and his proposed orders. 11   FITZGERALD JA: On 27 May 1998, the respondent bank commenced an action against the appellant claiming damages for deceit in the Common Law Division. On the same day, it obtained ex parte (i) an interlocutory injunction restraining the appellant “… from removing… from the state of New South Wales, or selling, charging, mortgaging or otherwise dealing with or disposing of … all or any property, other than to meet his ordinary day to day living expenses and legal expenses not including $5000 …”, and (ii) the following order (the “disclosure order”):

“2. The [appellant] within 3 days of the giving to him of notice of these orders deliver or cause to be delivered to the [bank] … an affidavit sworn by him setting out, as at the date of service of these orders:

(a) The name and address of any bank, building society or other financial institution at which there is an account in his name or the names Samuel Tsitsos, Stephen Dinnas, Tom Kallas, Stephen Kokalas, Nicholas Costas, Jason Christos, Anthony Feros, Michael Savvas or George Panis or any other name used by him or in which he has an interest or under his control together with the name and number of such account and the balance therein;
(b) The name and address of any person or persons indebted to the [appellant] and the amount of debt or debts owed by such person or persons; and
(c) An itemised inventory of all property owned by the [appellant] or in which he has an interest or which is under his control …; and
(d) In respect of any property referred to above, whether it has been given as security for any debt and, if so, the nature of that security and the debt so secured.”

12   The respondent’s summons on which those orders were made was returnable at 2pm on 29 May 1998. The appellant filed a motion, returnable at the same time, applying for the discharge of the disclosure order on the basis that it infringed his privilege against self-incrimination. 13   The present appeal is brought, by leave granted by a differently constituted Court, from an order made in the Common Law Division on 12 June 1998 dismissing the appellant’s motion, with costs. Although there is no formal appeal against the disclosure order, at its widest the appeal to this Court raises the issue whether the disclosure order was properly made. The appellant has not yet sworn the affidavit referred to in the disclosure order, which has been stayed pending the decision of this appeal. 14   The disclosure order was made on the basis of affidavits sworn on behalf of the bank, which expressly alleged that the appellant had committed and been charged with criminal offences. 15   Shortly stated, the bank’s allegations against the appellant were that he obtained fraudulent loans from the bank using false names and documentation. Broadly speaking, the appellant’s scheme, according to the bank, was to purchase property from himself, using different names, and “pay” himself with money lent by the bank in connection with the “purchases”. 16   The bank’s evidence included information from Detective Sergeant Wayne Gilbert of the Commercial Crime Unit of the NSW Police Service that when the appellant was arrested he was in possession of a number of documents in false names, and additional documents were obtained when the appellant’s vehicle, office and home were searched. Further, Detective Sergeant Gilbert had informed the bank that the appellant was separated from his wife and that their jointly owned home was for sale, that the appellant had “… transferred $90,000 offshore to Greece through the Commonwealth Bank of Australia” on 5 and 6 May 1998, and that he had funds in accounts with the Commonwealth Bank and Westpac. 17   Affidavits sworn by the appellant’s solicitors in support of his motion to discharge the disclosure order deposed to the actual charges against the appellant. The judge of the Common Law Division (who made the disclosure order and dismissed the appellant’s motion to discharge that order), noted that the charges against the appellant were “… proceeding before the local court in the normal way”, and that “[investigations were] continuing by officers of the [bank] and other banks against the [appellant], and that “[it] may well be that further charges will be laid.”. 18   In this Court, the bank’s primary argument sought to weave together two strands of authority. One proposition was that the source of a court’s power to grant a Mareva injunction against a defendant also empowers an order requiring the disclosure by a defendant of his assets. Jackson v Sterling Industries Ltd (1987) 162 CLR 612, 622 per Deane J, with whom Mason J, Wilson, Brennan and Dawson JJ agreed on this point. See also Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) NSWLR 155. The other set of propositions, based on a line of decisions which need not be discussed, were that (i) the privilege against self-incrimination may be waived; (ii) a subpoena to attend and give evidence or produce documents may be issued and an order for discovery or granting leave to interrogate may be made although the evidence, documents or answers to interrogatories might incriminate the person to whom the subpoena or order is directed; and (iii) objection on the basis of the privilege against self-incrimination must be taken at the time when the information or the documents are required to be produced. The integration of these principles led to the submission that an order requiring disclosure of assets may be made ancillary to a Mareva injunction notwithstanding that compliance with the order would incriminate the defendant to whom it is directed and that defendant can only avoid compliance with the order by sworn evidence which properly grounds a claim to the privilege against self-incrimination. Particular reliance was placed by the bank on statements two members of the English Court of Appeal in A J Bekhor & Co Ltd v Bilton. [1981] QB 923; 945-946 per Ackner LJ (obiter); 949 per Griffiths LJ. See also CBS United Kingdom Ltd v Lambert [1983] 1 Ch 37, 42G-43D, in which, however, the English Court of Appeal relied on a statutory provision (s31 of the Theft Act 1968) which excluded the privilege against self-incrimination in the circumstances of that case. 19 One other feature of that decision which should be noted is that, by majority (Ackner LJ and Stephenson LJ), the court set aside an order for disclosure. Ackner LJ considered that it was beyond jurisdiction because it was unnecessary to make such an order “in aid of” the Mareva injunction; his Lordship said: [1981] QB 923, 945.

“… it would … be quite wrong to seek to create new machinery which could have far-reaching and undesirable consequences and which are quite unnecessary for the proposed operation of the Mareva jurisdiction.”

Stephenson LJ also considered that the judge who had made the order had “exceeded his powers”. [1981] QB 923, 955.

20   In some of the English decisions in particular, an order for disclosure of assets is referred to as an order for discovery. However, as A J Bekhor v Bilton [1981] QB 923. points out, an order for disclosure of assets does not provide for discovery in the orthodox sense in which provision is made for discovery by rules of court. The source of the court’s power to make an order for disclosure of assets ancillary to a Mareva injunction is the same power as that which permits Mareva injunctions to be granted. In this Court, the material statutory power is s23 of the Supreme Court Act, 1970. It will be necessary to come back to this. 21   Orders for disclosure have also been made in other contexts; for example, in conjunction with Anton Piller orders Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. in copyright infringement proceedings, See e.g., Rank Film Distributors Ltd v Video Information Centre [1982] AC 380; Warman vInternational Ltd v Envirotech Australia Pty Ltd (1986) 11 FCR 478; Crest Homes PLC v Marks [1987] 1 AC 829. and in aid of a restraint order pursuant to s 77 of the Criminal Justice Act 1988 (UK). In re O (Restraint Order) [1991] 2 QB 520. The necessity to give effect to the privilege against self-incrimination has been consistently recognised, although there have been differences of opinion concerning the circumstances in which, and the manner in which, that should be done. Doubtless, there are, or at least will be, other circumstances in which orders for disclosure are made in aid of a power of the Court to grant other relief. 22 The bank’s argument was to the effect that the principles and practices which have been developed in relation to subpoenae and orders for discovery and interrogatories should be imported into these other contexts, and, in particular, should be applied in relation to orders for disclosure of assets made ancillary to Mareva injunctions. However, the unqualified adoption of such an approach would fail to give effect to the fundamental importance of the privilege against self-incrimination and the breadth of its operation, as explained by the High Court in Reid v Howard (1995) 184 CLR 1., which is discussed below. 23 The principles and practices which apply to orders for discovery and interrogation and to subpoenae are not seen to offend the privilege against self-incrimination even if a sworn claim to privilege might be able to be used against the person making the claim in civil and perhaps criminal proceedings; e.g., to suppose an adverse inference associated with that person’s failure to give evidence concerning the matter in relation to which privilege is claimed. Whatever the foundation for those principles and practices, (e.g., whether they are to be explained by reference to the construction of the powers to require discovery and interrogatories and to issue subpoenae or by implying an unstable qualification permitting the privilege against self-incrimination to be claimed into orders for discovery and interrogatories and subpoenas and/or the material rules of court), there is no obvious justification for a similar unexpressed qualification to be extended by analogy to orders for disclosure of assets in aid of Mareva injunctions. At least when there is no evidence of criminal behaviour by the person against whom an order for disclosure of assets is made, there might at first glance seem to be little objection to an order for disclosure of assets which makes no reference to the privilege against self-incrimination. However, especially in an era on which a significant number of people either cannot afford, or for some other reason do not seek, legal representation, an order which on its face is wide enough to encompass a self-incriminating disclosure should not be made. 24 In my opinion, the correct course for a court asked to make an order for disclosure in aid of a Mareva injunction is to mould any appropriate order by reference to the nature and source of the power being exercised, the nature and content of the privilege against self-incrimination, and the factual circumstances. I am further of opinion that a defendant against whom an order of disclosure of assets has been made whose privilege against self-incrimination will be infringed by compliance with the order according to its terms is entitled to have the order set aside. Crest Homes PLC v Marks [1987] 1 AC 829, 855; cf Australian Competition and Consumer Commission v McPhee & Son (Australia) Pty Ltd & Ors (1997) 147 ALR 601. In considering these matters, it is necessary to remember that the privilege protects not only information which is directly self-incriminatory but also information which might indicate a line of inquiry which might produce incriminatory information. Sorby v the Commonwealth (19830 152 CLR 281, 291-292. 25 Two aspects of what has been said require further discussion. One matter concerns whether a defendant who applies to have an order for disclosure of assets set aside on the basis of the privilege against self-incrimination must always support that claim by sworn evidence claiming privilege. The other is whether an order for disclosure of assets should be made, and, if so, whether it is proper that it be made ex parte, when the material before a judge who is asked for such an order reveals that compliance with the order will require a defendant to incriminate himself or herself. 26 In Reid v Howard, (1995) 184 CLR 1 Hodgson J granted a Mareva injunction against Reid and appointed a receiver of some of his assets on 24 March 1993. On 25 March, following service on Reid, those orders were continued and the receivership was extended to the whole of his property. Hodgson J also made an order in aid of the Mareva injunction which required Reid on or before 30 March “subject to any claim for privilege against self-incrimination” to serve an affidavit on the plaintiffs in the action setting out the assets which he owned or which were directly or indirectly under his control, with particulars of their acquisition. A copy of Reid’s signed statement which had been given to police was also required to be produced to the plaintiffs in that proceeding, No.1885 of 1993. Other plaintiffs then commenced another proceeding against Reid, No.1923 of 1993. 27 Reid did not comply with the order for disclosure of his assets and did not file and serve an affidavit claiming privilege against self-incrimination. Motions seeking orders that he be dealt with for his alleged contempt were filed in both actions and came on for hearing before Powell J on 1 and 2 April. Reid relied on an affidavit sworn on 31 March in which he claimed to be excused from complying with the order for disclosure of his assets on the ground that compliance would tend to incriminate him. 28 On 6 April 1993, Powell J overruled the claim for privilege on the ground that, having regard to the disclosure in his signed statement given to police, the jeopardy in which Reid stood would not be any greater if he were obliged to file and serve an affidavit of assets as ordered by Hodgson J. Powell J made orders in both proceedings for the taking of accounts before the Master, and ordered that, within 14 days or any further time allowed by the Court of Appeal, Reid file and serve affidavits identifying which assets had been acquired, retained or maintained with money belonging to the respective plaintiffs, the amounts so applied, and the whereabouts of evidence of title. 29 On 13 May 1993, this Court granted Reid leave to appeal against the orders for the filing and service of the affidavit of assets, and, on 29 July 1993, varied the orders made by Powell J by substituting for each order for the filing and service of affidavits of assets the following orders:

1885 of 1993

“(3) Without prejudice to the preceding order, order that on or before 4pm on 20 May the defendant do make and swear to the best of his knowledge, skill and ability a full and sufficient affidavit setting out:


(i) all the assets to which he, whether alone or together with any other person or persons, is, or claims to be beneficially entitled, and, in the case of assets to which he is, or claims to be jointly entitled, the name, or names, of the other person or persons, so entitled and the shares in which the asset, or assets is, or are, so held;

(ii) any such asset, or assets, towards the acquisition, retention or maintenance of which, or towards the conduct of any business, or other, operations in, or upon, which, he has applied any moneys, or property, entrusted to him by
(a) the said deceased;
(b) the said Caroline Jane Howard;
(c) the said Cranwell Pty Ltd;
(d) the said JW Investments Pty Ltd
and, in relation to each such asset the amount of any moneys, and the identity of any property, entrusted to him by the said persons and companies respectively so applied by him, and the location of any certificate of title, or other evidence of title, relating to the same.”


1923 of 1993

“(3) Without prejudice to the preceding order, order that on or before 4pm on 20 May the defendant do make and swear to the best of his knowledge and skill and ability a full and sufficient affidavit setting out:


(i) all the assets to which he, whether alone or jointly with any other person, or persons, is, or claims to be, beneficially entitled, and, in the case of assets to which he is, or claims to be, jointly entitled, the name, or names of the other person, or persons, so entitled, and the shares in which the asset, or assets, is, or are, so held:

(ii) any such asset, or assets, towards the acquisition, retention or maintenance of which, or towards the conduct of any business or other, operations in, or upon, which he has applied any moneys, or property entrusted to him by:

(a) the said Sue Turnbull
(b) the same Jessie Eileen Turnbull;

and in relation to each such asset, the amount of any moneys, and the identity of any property, entrusted to him by the said persons respectively so applied by him, and the location of any certificate of title, or other evidence of title, relating to the same;
(iii) unless the same otherwise be disclosed in the said affidavit:
(a) the number and name of any account, or accounts, with any bank, or any like financial institution to the credit of which:

(I) cheque bearing date 22 January 1993 drawn in favour of H N Reid trust Account on the sum of $60,000; and

(II) cheque bearing date 25 January 1993 drawn in favour of H N Reid Trust Account in the sum of $40,000;
were, or was, paid, and the name or names of any such bank or other like financial institution and the branch or braches of the same where such payment was made;

(b) the name, or names, of any person, or persons, to whom the said cheque were endorsed, or otherwise negotiated, and the time or times at which the same was, or were, so endorsed, or otherwise negotiated, and lodge the original and two copies in a sealed envelope with the Registrar of this Court.” (1993) 31 NSWLR, 298 at 310, 311.

30   Those orders for the variations of each Order 3 which had been made by Powell J on 6 April 1993 were respectively numbered 1 and 2 in the orders of this Court. Paragraphs 5, 6 and 7 of the orders of this Court were as follows:

“5. If no application for special leave to appeal to the High Court is filed within the twenty-one days, or if the result of any proceedings in the High Court is that orders 1 and 2 herein remain in force, the Registrar shall appoint a time for the solicitors for the parties to attend before him when the envelopes shall be opened by the Registrar in the presence of such solicitors and the originals and copies of the affidavits shall then be dealt with in accordance with order 6 herein.

6. On or before the time filed for such appointment the solicitors for the plaintiffs in each proceeding in the Equity Division shall file with the Registrar and service on the appellant’s solicitors:


(i) a notice signed by the solicitor on the record nominating the partner and the employed solicitor in the firm who will take and retain possession of the copy affidavits and be responsible for ensuring that the undertakings in the to the Court hereinafter referred to are properly complied with.

(ii) a written undertaking to the Court signed by the solicitor on the record on behalf of such solicitors undertaking that they, by themselves their servants and agents will not disclose those copy affidavits or any further copy thereof or the information therein to any person other than the nominated partner and employed solicitor, their counsel and their clients, or the nominated partner and employed solicitor for the plaintiffs in other proceedings or their counsel and that they will not part with possession of such copy affidavits or any further copy thereof, whether pursuant to a subpoena, search warrant or otherwise, except to their counsel, without the leave of a judge of the Equity Division.

(iii) a written undertaking to the Court signed by each plaintiff who is a natural person, and executed under the common seal of each corporate plaintiff, that he, she, or it, by himself, herself and their respective servants and agents will not disclose any information contained in those copy affidavits or any further copy thereof to any person other than the nominated partner and employed solicitor for the other plaintiffs or their counsel without the leave of a judge of the equity Division.

7. If order 5 takes effect:


(i) the Registrar shall mark the original affidavits confidential and deliver them to the Principal registrar of the Equity Division who shall retain them in safe custody. Such affidavits shall not be disclosed to any person or produced in answer to any subpoena without the leave of a judge of that Division.

(ii) the Registrar shall deliver copies of the affidavits sworn in each proceeding to the nominated partner or employed solicitor for the plaintiffs in that proceeding who is present at the appointment.” (1993) 31 NSWLR, 298 at 312.

31   The orders made by this Court in Reid v Howard (1995) 184 CLR 1 were obviously more qualified than the disclosure order made in the Common Law Division in the present proceeding. The High Court allowed Reid’s appeal and set aside this Court’s orders and, in lieu thereof, dismissed the applications of the plaintiffs in each matter “insofar as they concern orders for disclosure” and ordered that envelopes containing affidavits and copy affidavits by Reid be returned to him or his solicitors for their destruction. 32 In the majority judgment in Reid v Howard, (1995)184 CLR 1, per Toohey, Gaudron, McHugh and Gummow JJ. it was emphasised that the privilege against incrimination “is not simply a rule of evidence, but a basic and substantive common law right (1995)184 CLR 1,11., which “… operates so that a person cannot be compelled ‘to answer any question, or to produce any document or thing, if to do so “may bring him into the peril and possibility of being convicted as a criminal”’”. (1995)184 CLR 1, 12, citing the passage from the judgment of Gibbs CJ in Sorby v Commonwealth (1983) 152 CLR 281 at 288,in which his Honour quoted from Lamb v Nunster (1882) 10 QBD 110 at 111. Later, their Honours said: (1995)184 CLR 1, 12.

“The privilege against self-incrimination may be abridged by statute or waived but, that aside, it has generally been accepted that it is without ‘real exception’.” (1995)184 CLR 1, 12, citing Triplex Safety Glass Co v Lancegye Safety Glass (1934) LTD (1939) 2 KB 395 at 403.

33 Later again, their Honours said: (1995)184 CLR 1, 14.

“In a series of recent English decisions … unsuccessful submissions have been made by reference to the 19th century decisions in support of exceptions, ranging from a broad discretionary exception to one in civil proceedings brought to recover money or property entrusted to a fiduciary. …in our view, those submissions were rightly rejected.

There is simply no scope for exception to the privilege, other than by statute. At common law, it is necessarily of general application - a universal right which, as Murphy J pointed out in Pyneboard Pty Ltd v Trade Practices Commission , (1983) 152 CLR 328 at 346. protects the innocent and the guilty. There is no basis for excepting any class or category or person whether by reference to legal status, legal relationship or, even, the offence in which he or she might be incriminated because, as already indicated, its purpose is the completely general purpose of protecting against ‘the peril and possibility of being convicted as a criminal.’ Lamb v Nunster [1882] 10 QBD 110 at 111. For the same reason, there can be no exception in civil proceedings, whether generally or of one kind or another. …”

34   After reference to difficulties which had been seen to arise from the privilege and criticisms of it, their Honours’ judgment continued:

“The protection intended by the orders of the Court of Appeal is more limited than that afforded by the privilege. In particular, the orders do not operate, of their own force, to prevent the material disclosed in the affidavits from being used as the basis for investigation which might, in turn, provide evidence to support criminal charges - a possibility against which the privilege protects. Sorby v The Commonwealth (1983) 152 CLR 281 at 291-292. However, it is clear that the Court of Appeal intended to provide protection against evidentiary use of the material in subsequent criminal proceedings. And it thought that this could be achieved by requiring undertakings from the [plaintiffs’] solicitors and by tying the hands of prosecution authorities.

…the Court of Appeal considered that its orders would preclude prosecution authorities, who were not parties to the proceedings, from using the material in subsequent criminal proceedings even if they did not acquiesce in that course. That was so, in the view of the Court, because injunctions may, in certain circumstances, ‘become indirectly enforceable against third parties’ Reid v Howard (1993) 31 NSWLR 298 at 308. and prosecution authorities are not ‘immune from proceedings for contempt of court if they knowingly act to thwart or frustrate orders of a civil court’. Reid v Howard (1993) 31 NSWLR 298 at 309. Reference was made to Attorney General v Times Newspapers Ltd (1992) 1 AC 191. as support for this view. … it is not necessary to deal with this issue as, in our view, the Court of Appeal had no power to make the orders it did.”

35 After holding that neither the jurisdiction conferred by s23 of the Supreme Court Act 1970 nor the Supreme Court’s inherent jurisdiction is “… at large”, (1995)184 CLR 1, 16. their Honours went on to say: (1995)184 CLR 1, 16-17.

“…what considerations are to be taken into account by a judge of the Equity Division in deciding, pursuant to orders 6 and 7 [of the orders made by this Court], whether or not to grant leave to the [plaintiffs’] solicitors to disclose the information contained in the affidavits? If there is to be no disclosure, are proceedings to be conducted behind closed doors even though such a course is allowed only in exceptional cases where that is necessary in the interests of justice? Scott v Scott (1937) AC 417 at 439, cited with approval in Russell v Russell (1976) 134 CLR 495 at 520. See also Raybos Australia Pty Ltd v Jones (1985) 2 NSWLR 47, per Kirby P, for a discussion of the history and principles relating to the open administration of justice in courts. These considerations lead to the conclusion not merely that the privilege is not to be modified or abrogated in favour of some different protection by judicial decision, but that its modification or the substitution of some different protection can effectively be achieved only by legislation.

… Quite apart from the difficulties which the orders of the Supreme Court present for the administration of justice, … it is inimical to the administration of justice for a civil court to compel self-incriminatory disclosures, while fashioning orders to prevent the use of the information thus obtained in a court vested with criminal jurisdiction with respect to the matters disclosed. Nor is justice served by the ad hoc modification or abrogation of a right of general application, particularly not one as fundamental as the privilege against self-incrimination.”

36 In the same case, Deane J said: (1995) 184 CLR 1 at 5.

““The privilege against self-incrimination is deeply ingrained in the common law”” Sorby v The Commonwealth (1983) 152 CLR 281 at 309, per Mason, Wilson and Dawson JJ. . It reflects “a cardinal principle” Sorby v The Commonwealth (1983) 152 CLR 281 at 294, per Gibbs CJ. which lies at the heart of the administration of the criminal law in this country. It can be, and has increasingly been, overridden or modified by the legislature. It can be waived by the person entitled to claim it. Otherwise, it is unqualified. In particular, it should not be modified by judicially devised exceptions or qualifications. Unless it appears that the assertion of potential incrimination is unsustainable, a claim to the benefit of the privilege cannot, in the absence of statutory warrant, properly be disregarded or overridden by the courts.”

37 Later, Deane J said: 184 CLR 1 at 6-8.

“The detailed regime which the Court of Appeal substituted for the order of Powell J reflects an attempt to avoid or diminish the danger that disclosure of the relevant matters by the appellant would expose him to criminal prosecution and conviction. Upon analysis, however, the ordered disclosure of those matters even under that regime represents a significant overriding of the appellant's privilege against self-incrimination regardless of whether the fact of involuntary disclosure and the matters disclosed would themselves be admissible against the appellant in any subsequent criminal proceedings. I turn to explain why that is so.

The protection which the privilege against self- incrimination confers extends not only to the risk of incrimination by direct evidence (ie evidence of the fact of disclosure and of the material disclosed) but also to incrimination by indirect or “derivative” evidence (ie “evidence obtained by using” the disclosed material “as a basis of investigation” Sorby v The Commonwealth (1983) 152 CLR 281 at 312, per Murphy J ). As Lord Wilberforce pointed out in Rank Film Ltd v Video Information Centre [1982] AC 380 at 443. :

“... 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 ... The party from whom disclosure is asked is entitled, on established law, to be protected from these consequences.”

That point was also made by Gibbs CJ in Sorby v The Commonwealth (1983) 152 CLR 281 at 294-295. in words with which I agree:

“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 ... It is true that in some cases the legislature may consider that it can only achieve the intended purpose of the statute by limiting 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.”
And by Mason, Wilson and Dawson JJ in the same case: Sorby (1983) 152 CLR 281 at 310. And see also Lord Eldon in Paxton v Douglas (1812) 19 Ves Jun 225 at 228 [34 ER 502 at 503].

“... the privilege protects the witness not only from incriminating himself directly under a compulsory process, but also from making a disclosure which may lead to incrimination or to the discovery of real evidence of an incriminating character”.


Compliance by the appellant with the order of disclosure under the Court of Appeal’s regime would involve disclosure of potentially incriminating material to an officer of the State (ie the Registrar in Equity) and to solicitors representing clients who are involved in litigation against the appellant in which they claim to have been defrauded by him. In turn, the solicitors would be free to make the disclosed material available to those clients and their counsel. The disclosed material could be used as a basis of investigation by the clients and their legal representatives. Indirect or derivative evidence discovered through those investigations could constitute the basis of public findings in the civil proceedings to the effect that the appellant was guilty of specific acts of misappropriation of trust moneys. Such indirect or derivative evidence could be made available to prosecution authorities and could be used either in the prosecution of the appellant for such specific offences or as a basis for further investigation. In that regard, the prosecution authorities would be neither obliged to desist, nor justified in desisting, from the duties of their office in order to import to the orders made by the court an effectiveness which they do not of themselves possess. If the disclosed material itself innocently came within the possession of the prosecution authorities (eg by being received in the mail from an unidentified source), those authorities would be entitled to proceed to investigate any specific offences which that material disclosed and to seek admissible evidence of their commission since the Court of Appeal’s orders should not, in my view, be construed as containing an unexpressed injunction or order restraining prosecution authorities from making such subsequent use of the material.

The position is even clearer if one takes account of the fact that all the restrictions upon use of the disclosed material under the Court of Appeal's regime are liable to be rendered nugatory by the leave of a judge of the Equity Division of the Supreme Court. With such leave, the disclosed material could be made directly available to prosecution authorities. Again, even accepting that, putting to one side questions of invalidity under the Constitution, the orders of the Court of Appeal would, while they stand, be effective to prevent as a matter of law or excuse as a matter of comity disclosure pursuant to a search warrant or a subpoena without the leave of a judge of the Equity Division of the Supreme Court, the disclosed material would be completely vulnerable to such disclosure if such leave were obtained. One can only speculate about whether such a judge would see herself or himself as justified in withholding evidence of guilt of criminal offences from the Supreme Court constituted by another judge (with or without a jury) or from another court which sought production of that evidence for the purposes of criminal proceedings brought in relation to those criminal offences. In any event, to adjust a comment of Lord Fraser of Tullybelton in Rank Film Ltd v Video Information Centre [1982] AC 380 at 446. to fit the present case, “it is obvious that a person who has to rely on” a refusal to exercise a 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”.

If the privilege against self-incrimination were susceptible of being overridden by the courts in the interests of justice in the circumstances of a particular case, it would be arguable that the orders made by the Court of Appeal were justified, notwithstanding the deficiencies of the regime which they established. As has been seen, however, the privilege is not subject to judge-made exceptions or qualifications and, in the absence of statutory authority, cannot properly be disregarded or overridden by the courts either to meet the exigencies of hard cases or at all. There has been no suggestion of any applicable statutory provision overriding or qualifying the appellant’s privilege against self-incrimination in the present case. Accordingly, the orders of the Court of Appeal cannot be sustained.

I agree with the orders proposed by Toohey, Gaudron, McHugh and Gummow JJ.”

38   While Reid had sworn an affidavit claiming to be excused from obeying the order for disclosure of his assets on the ground that compliance would tend to incriminate him prior to the orders made by Powell J and this Court, he of course had not done so prior to the initial order for an affidavit of assets “subject to any claim for privilege against self-incrimination” which had earlier been made ex parte by Hodgson J. There is nothing in the judgments in Reid v Howard 184 CLR 1. which indicates that High Court’s decision was dependent on the circumstance that Reid had sworn the affidavit referred to and that, had he not done so, the orders which were set aside would have been correctly made; for example, that such orders would have been permissible if they had been made ex parte. The entire tenor of the judgments seems to me to be to the contrary, and, as I understand the position, the practice in the Equity Division, in which Mareva injunctions are most commonly granted in this Court, proceeds on that footing and involves orders which are based on s128 of the Evidence Act, which is referred to below. 39   If the decision in Reid v Howard 184 CLR 1. did depend upon Reid’s affidavit claiming privilege against self-incrimination notwithstanding that the High Court did not say so, it would not follow that the disclosure order against the present appellant was correctly made without resort to s128 of the Evidence Act. 40   The material before the judge who made the disclosure order and refused to order its discharge put beyond doubt that the appellant was being prosecuted for the conduct alleged against him by the bank, and the application which was made for the disclosure order to be discharged made it plain that the appellant objected to complying with the disclosure order, and claimed and did not waive his privilege against self-incrimination, although he did not swear that that was so by affidavit or otherwise. If the lack of sworn evidence was the only proper basis for refusal of the application for the discharge of the disclosure order, the appellant was at least entitled to a variation of the disclosure order which expressly permitted him to swear an affidavit claiming privilege against self-incrimination in lieu of the disclosure of assets. 41   The appellant’s objection was, of course, not merely to making an affidavit of assets but to delivering it to the bank, which was what he was required to do by the disclosure order. In my opinion, whatever view is taken of the significance to the decision in Reid v Howard (1995) 184 CLR 1.of the fact that Reid had filed an affidavit claiming privilege, the disclosure order completely overrode the appellant’s privilege against self-incrimination, and cannot be reconciled with the reasoning in Reid v Howard. 184 CLR 1. I consider that, in that matter, the High Court ruled that neither s23 of the Supreme Court Act nor the Court’s inherent jurisdiction enables the Court to make any order which is inconsistent with the privilege against self-incrimination, and that the disclosure order merits that description. 42   I am therefore of opinion that the disclosure order in the present proceeding cannot be upheld unless there is some statutory basis for it which did not exist at the time when Reid v Howard (9195) 184 CLR 1. was decided. 43 Prior to the High Court handing down its decision in Reid v Howard (1995)184 CLR 1. on 6 December 1995, the NSW Parliament enacted the Evidence Act of that year. The bank’s alternative argument, is that s 128 of the Evidence Act effects a modification of the common law privilege against self-incrimination. Accepting that that is so, it is manifest that the disclosure order does not give effect to s 128 and cannot be permitted to stand in its present form. 44   Although the judge of the Common Law Division who made the disclosure order referred to both Reid v Howard (1995)184 CLR 1. and s 128 of the Evidence Act, the Bank did not seek to support the disclosure order by reference to his Honour’s reasons. Nor did it refer to judgments which reveal the Equity Division’s current practice in this area or the basis for that practice. See, for example, HPM Industries Pty Ltd v Graham EQD 2728/1996, unreported judgments dated 17 July and 27 August 1996 (Young J); National Australia Bank Ltd v Rusu EQD 4371/96, unreported judgments dated 6 August and 7 May 1996 (Hamilton J); AMP General Insurance Ltd v Prasad [1999] NSWSC 252; [1999] NSWSC 349; unreported judgments dated 23 March 1999 and 17 April 1999 (Hamilton J). 45 Shortly stated, the Equity Division makes ex parte orders which require an affidavit of assets and that, after the affidavit of assets is sworn but before it is filed, it be brought into Court and notice of the hearing at which that is to occur be given to the Director of Public Prosecutions; if an objection based on the privilege against self-incrimination is taken when the affidavit of assets is brought into court, the parties and the Director of Public Prosecutions are heard on whether a certificate should be granted under s 128 of the Evidence Act and, presumably, any other questions arising under that section. The basic approach taken is that, if a certificate is given, the affidavit may be used in the civil proceeding and the deponent is protected by subs128(9), and, if the certificate is refused, an order is made for the surrender and destruction of all copies of the affidavit. 46   It is unnecessary to discuss the Equity Division practice on this occasion, and I do not do so for three reasons. First, the orders made in the Equity Division are significantly different from the disclosure order. Second, s128 of the Evidence Act might not only have directly altered the law with respect to the privilege against self-incrimination in relation to witnesses, it might also have “derivatively” altered the law with respect to that privilege in relation to parties. See Aktins v Abigroup Ltd (1998) 43 NSWLR 539; Sevic v Roarty (1998) 44 NSWLR 287; Esso Australia Resources Ltd v FCT (1998) 159 ALR 664; special leave granted by High Court on 21 May 1999. Third, this case was not fully argued in this Court. However, it is not clear to me that the Equity Division practice does not encounter some of the objections referred to by the majority decision in Reid v Howard: 184 CLR, 16-17.

“…what considerations are to be taken into account by a judge of the Equity Division in deciding, pursuant to orders 6 and 7 [of the orders made by this Court], whether or not to grant leave to the [plaintiffs] solicitors to disclose the information contained in the affidavits? If there is to be no disclosure, are proceedings to be conducted behind closed doors even though such a course is allowed only in exceptional cases where that is necessary in the interests of justice? Scott v Scott (1937) AC 417 at 439, cited with approval in Russell v Russell (1976) 134 CLR 495 at 520. See also Raybos Australia Pty Ltd v Jones (1985) 2 NSWLR 47, per Kirby P, for a discussion of the history and principles relating to the open administration of justice in courts.
These considerations lead to the conclusion not merely that the privilege is not to be modified or abrogated in favour of some different protection by judicial decision, but that its modification or the substitution of some different protection can effectively be achieved only by legislation.

… Quite apart from the difficulties which the orders of the Supreme Court present for the administration of justice, … it is inimical to the administration of justice for a civil court to compel self-incriminatory disclosures, while fashioning orders to prevent the use of the information thus obtained in a court vested with criminal jurisdiction with respect to the matters disclosed. Nor is justice served by the ad hoc modification or abrogation of a right of general application, particularly not one as fundamental as the privilege against self-incrimination.”

I add only that it also seems to me inimical to the administration of justice for orders to be made ex parte when it is unnecessary to do so.

47   In the circumstances, including the limited argument addressed to this Court, I consider that the Court should decide no more than that the disclosure order is inconsistent with the appellant’s privilege against self-incrimination and should be discharged. 48   The appeal should therefore be allowed with costs and the disclosure order and the associated order for the appellant to pay the bank’s costs of the motion to discharge the disclosure order should be set aside. The bank should pay the appellant’s costs of the motion to discharge the disclosure order. The bank is, of course, free to make such further applications as it chooses in the Common Law Division.