AMP General Insurance Ltd v Prasad

~23/03/99 4 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1443/99 AMP GENERAL INSURANCE LTD v SONYA VINITA PRASAD & 1 ORS

HIS HONOUR: 1 These proceedings were commenced by notice of motion filed on 19 February 1999 claiming relief by way of Mareva injunction against the first defendant who was or had been an employee of the plaintiff and her fiance, the second defendant. The allegation was that the first defendant, whilst an employee of the plaintiff, had misappropriated funds of the plaintiff in sums which might total as much as $600,000. Relief by way of Mareva injunction freezing the assets of the defendants was granted, initially on an ex parte basis on 18 February 1999 before the commencement of the proceedings, and has since been continued. At the same time it was ordered that the defendants inform the plaintiff in writing of their assets inside or outside Australia and this has since been done in the form of affidavits which have been filed. 2 However, a further order was sought and was made by Hodgson CJ in Eq on 8 March 1999. Those orders were as follows:

"1 Orders made by Windeyer J on 22 February 1999 that each of the First Defendant and the Second Defendant file and serve affidavits by 4.00 p.m. on 25 February 1999 outlining their best knowledge, information and belief the facts [sic] relating to the cashing of the cheques contained in the schedule to the Notice of Motion dated 22 February 1999 and the current whereabouts of the proceeds of those cheques and of any property derived directly or indirectly from such proceeds be varied so as to require the bringing of such affidavits to Court at 10.00 a.m. on 19 March 1999. 2 Costs to be costs in the cause. 3 Proceedings be relisted before the Duty Judge at 10.00 a.m. on 19 March 1999. The Court notes: 1 The Court notes that it is intended that on 19 March 1999, the deponents will be present and that objection against self-incrimination will be taken in relation to the affidavits referred to in Order 1 above, whereupon the Court will consider whether the Defendants be given a certificate under section 128 of the NSW Evidence Act (1995) in respect of the evidence given in the affidavits."

His Honour in making orders in that form adopted the course that had previously been followed in this Court by Young J in HPM Industries Pty Limited v Graham 17 July 1996, unreported and by myself in National Australia Bank Limited v Rusu 6 April 1998, unreported. The defendants now move upon a notice of motion filed in Court on 19 March 1999 for the revocation of the orders made by Hodgson CJ in Eq. 3 The foundation on which the application is made is that there is now a criminal prosecution commenced and pending against the first defendant. It is said, furthermore, that the existence of that prosecution increases the likelihood of the prosecution of the second defendant, but it is principally upon the actual existence of a criminal prosecution against the first defendant that the defendants rely in bringing this motion. They draw attention to the fact that there was no prosecution pending when Young J followed the course that his Honour did in the HPM Industries case. It is, as they concede is apparent, that a criminal prosecution had already been brought against one of the defendants in the Rusu case decided by me, and that I had nonetheless made orders of the type under question in that case. Mr Simpson, of counsel for the defendants, points to the basic nature of the rule against self incrimination and says that, once a criminal prosecution is actually on foot, this should preclude compulsory revelations. As far as the protection afforded by s 128 of the Evidence Act 1995 is concerned, he does not, I think, say that that is totally illusory. But he points to the fact that the evidence will be necessarily put into the hands of the very organisation that has complained to the police, leading to the prosecution. He also points to the fact that documents can accidentally be transmitted or come into the hands of people they are not intended for, and he points to the difficulty which he says that the accused person will be under of demonstrating that it is through the information coming into the hands of the prosecuting authority that some step that has been taken by that authority or some advantage gained by it in the conduct of the prosecution. 4 There is some substance, particularly in this last point. However, without derogating in any way from the importance of the basic rule against self-incrimination, it does seem to me that the circumstances are very remote whereby the accused person may be disadvantaged in this case. First, either somebody must act totally improperly and convey the material which will be produced pursuant to the order to the prosecuting authority, or it must by some possible but quite strange accident fall into its hands. It must participate in using it improperly, and the use must be such that it is unable to be demonstrated by the accused. While it is conceivable that this last problem may arise, there will be other circumstances in which improper use is made where that use can be demonstrated. It is only therefore in my view, as I have said, a very remote chance that harm may be done. 5 I am asked to revoke the Chief Judge's order. The applicant for revocation bears the burden of showing that it should be revoked. I can see no reason sufficient for revoking it. In one sense it was not necessary for me to see the material available at the time the Chief Judge made the order, but as it is a case which involves the liberty of the subject, I have asked that that material be laid before me and I have considered it before coming to my decision on the motion. It does seem to me upon viewing that evidence that there is a strong prima facie case that funds were taken by the first defendant which the plaintiff in these proceedings is now seeking to recover. Against the very remote possibility of any harm coming to the defendants in any untoward way, I must balance the plaintiff's rights - if the case of misappropriation be ultimately proved - to attempt to find and trace the funds before the trail becomes cold. It certainly will have become cold if it cannot be pursued until after the termination of criminal proceedings at first instance, and perhaps upon appeal. 6 In all the circumstances, I decline to revoke the orders made by the Chief Judge and I shall proceed to fix a time at which the relevant affidavits ought be brought into court so that they may be dealt with under s 128 of the Evidence Act 1995, as envisaged by the Chief Judge. I note that in HPM Industries Pty Ltd (No 2), 28 August 1996, Young J changed his view as to the appropriateness of affidavits as ordered in his first judgment, rather than oral examination. In my view, his Honour's earlier view did not need revision in this way. In this case, the Chief Judge has ordered affidavits and there has been no suggestion that his Honour's order ought be varied in this regard. I propose to add a direction that the prosecuting authority be informed so that, if it desires, it may appear at that time and ask that the affidavits not be read. There was some suggestion on the defendants' behalf during address that this appeared to show some preference for the interests of the prosecution over those of the accused. I do not believe that is so. It does give the prosecution the opportunity to object to the course, but if the prosecution does so and its objection is upheld, then the accused's rights, to any extent they are trenched upon by the making of this order, will be completely restored to it by the destruction of the affidavits, so that they are not then in any way disadvantaged. This appears to me to hold an even balance between the parties to the criminal prosecution and not in any way to favour either of them so far as those proceedings are concerned. LATER: 7 Having said what I have said, there is one regard in which the Chief Judge's order calls for variation. That relates to the inclusion in the order of the words "the facts relating to the cashing of the cheques contained in the schedule to the Notice of Motion". Those words are very wide and I believe somewhat uncertain. It seems to me undesirable that there should be words as wide and uncertain as that in an order of this nature. Upon this being drawn to attention, the plaintiff indicated that it would be satisfied if those words were removed from the order in relation to its future operation and has maintained that attitude. In light of that concession, I propose to vary the orders by the removal of those words. 8 The question of costs has been argued before me. What was principally sought by the defendants was the revocation of the Chief Judge's orders and in that they have failed. There has been some modification of the orders but that modification was consented to by the plaintiff. The obtaining of that modification in those circumstances is not sufficient to justify departure from the usual rule that costs follow the event. Mr Simpson, of counsel for the defendants, has pressed upon me the nature of the matter and the impecuniosity of the defendants to justify departure from the usual rule, but I do not think it appropriate that it be departed from. The order for costs that I propose to make therefore is that the defendants be ordered to pay the plaintiff's costs of the motion.

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