AUSTRALIAN COMPETITION & CONSUMER COMMISSION v FFE BUILDING SERVICES LTD

AUSTRALIAN COMPETITION & CONSUMER COMMISSION v FFE BUILDING SERVICES LTD - [2003] FCAFC 132 - FCAFC 2003 case summary — Zoe

[9]

the Court may order the person to pay to the Commonwealth such pecuniary penalty … as the Court determines to be appropriate …. 77 (1) The Commission may institute a proceeding in the Court for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in s 76.' 5 Sections 76 and 77 are contained in Pt VI of the Act, which is entitled 'Enforcement and Remedies'. Part VI is to be contrasted with Pt VC of the Act, which is entitled 'Offences' and which creates a variety of criminal offences. The contraventions alleged by the Commission do not constitute criminal offences. 6 The Commission was directed by a judge of the Court to file and serve statements of evidence of all its proposed witnesses. It was accepted by all parties that it would be appropriate for the Court to make a similar direction in respect of the witnesses proposed to be called on behalf of the corporate respondents. However, the Commission also requested the Court to make similar orders in relation to the individual respondents. The Commission proffered an undertaking, through its counsel, that, if statements were provided by the individual respondents, the statements would not be tendered in the Commission's case in chief nor used to support an argument that a particular individual respondent had a case to answer. 7 The course proposed by the Commission was opposed by Fodera and Bell who contended that, to require them to serve statements in advance of the hearing, would be inconsistent with their right to refuse to provide information that might tend to expose them to a penalty. Each of Fodera and Bell, however, offered to consent to a direction that he provide statements of evidence within a relatively short period, such as 48 hours, after the Commission's case against him closed. 8 The Commission accepted that the individual respondents have a right to remain silent, even though the proceeding is a civil action and not a prosecution for a criminal offence. The Commission accepted, therefore, that the individual respondents should not be compelled to provide information that might tend to expose them to a penalty. However, the Commission says that the proposed direction does not contravene this principle because the question of whether or not the individual respondents decide to give evidence is for them to determine. The only effect of the direction to provide statements would be that the Commission would have advance notice of the evidence likely to be given on behalf of the individual respondents. 9 The primary judge declined to adopt the course proposed by the Commission and indicated that, at that stage, he did not propose to direct service of statements of the evidence proposed to be led on behalf of Fodera and Bell. However, his Honour indicated that the parties should conduct themselves on the assumption that, at trial, his Honour would make a direction for the provision of witness statements by Fodera and Bell within a very short period, possibly as short as 24 hours, after the close of the Commission's case. 10 In his reasons for taking that course, the primary judge referred to a conflict in the authorities between decisions of this Court, on the one hand, and a decision of the Court of Appeal of Victoria, on the other hand: see Australian Competition & Consumer Commission v FFE Building Services Ltd [2003] FCA 157. The conflict concerns the extent to which a direction of the kind sought by the Commission would have the effect of contravening the principle that an individual should not be compelled to furnish information that might tend to expose that individual to a penalty. Because of that conflict, Hely J granted leave to the Commission to appeal from the refusal of the primary judge to give the direction sought by the Commission. 11 The appeal was listed for hearing with some urgency in order to ensure that there be no delay in the preparation of the proceeding for hearing. The issue on appeal is whether an individual respondent in a proceeding for recovery of a penalty under s 76(1) of the Act can be directed to file and serve statements of the evidence proposed to be given by his proposed witnesses prior to the close of the appellant's case.

[10]

GENERAL PRINCIPLES 12 The privilege against self-incrimination protects an individual from making a disclosure that may lead to incrimination or to the discovery of real evidence of an incriminating nature: Sorby v Commonwealth of Australia (1983) 152 CLR 281 at 310. Further, a respondent in a proceeding that is solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents that may assist in establishing his or her liability to the penalty: Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Livestock Corporation (1979) 42 FLR 208; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 336. 13 The privilege of refusing to answer questions or provide information on the ground that the answers or the information might tend to expose the party to the imposition of a pecuniary penalty:

is not confined to discovery and interrogatories;
is available at common law;
is distinct from the privilege against exposure to conviction for a crime (Pyneboard (at 337)). The rationale for the privilege is that an applicant must prove its own case and should not get any assistance from the respondent in proving its case: Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 129; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 192 ALR 561 at 570, at [31]. The privilege can only be abrogated by statute: Reid v Howard (1995) 184 CLR 1. As the privilege is not subject to judge-made exceptions or qualifications, it cannot be abridged or undermined in consequence of a Court accepting undertakings proffered by the applicant designed to avoid or diminish the danger that provision of the information would expose the respondent to a penalty. 14 By requiring an individual respondent, prior to the closure of an applicant's case, to file statements of evidence proposed to be given by witnesses to be called by that respondent, such a respondent would be exposed to the risk that indirect or derivative evidence, being evidence obtained by using the material disclosed in the statement as a basis of investigation, could be tendered against the respondent. The provisional disclosure of information may set in train a process that may lead to the imposition of a penalty or may lead to the discovery of real evidence in support of the imposition of a penalty: Reid v Howard (at 6).

[11]

THE DECISION OF SACKVILLE J IN AMCOR 15 In Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465 ('Amcor'), the issue before Sackville J was identical to that raised on this appeal. Sackville J reviewed all of the authorities on the question and concluded (at 469, at [16]) that there is 'no reason to think that the scope of the privilege against exposure to a penalty is any narrower than that of the privilege against self-incrimination'. That view was not challenged by the Commission in the present case. 16 However, Sackville J also concluded that to require individual respondents to file statements before the commencement of the trial, was not consistent with the rationale underlying the privilege against exposure to penalties. His Honour therefore refused an application by the Commission for orders that witness statements be filed in advance of the trial. 17 Sackville J's reasoning for refusing the Commission's application included the following (at 469-470, at [17], [19]): 'The orders sought by the [Commission] would require the individual respondents to file their statements of evidence in advance of the trial on pain of foregoing the opportunity of giving evidence at the trial and of placing themselves at risk that the court would draw adverse inferences against them. Moreover, at least in this case, they would run the risk that their statements of evidence would provide the [Commission] with "leads" that would result in other evidence adverse to them being adduced in the very proceeding in which penalties are sought. … In my opinion, if the orders sought by the [Commission] 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. In this sense, the case is different from an order requiring the production of documents or the filing of an affidavit disclosing specific information. But if they wish to avoid adverse forensic consequences in the penalty proceedings, they would have little choice but to file statements of evidence. By taking that course they would expose themselves, to the risk that their own words would materially assist the [Commission] to make out the case against them. To require the individual respondents to make this invidious choice is not, in my opinion, consistent with the rationale underlying the privilege against exposure to penalties.' (Original emphasis).

[14]

THE DECISION OF THE PRIMARY JUDGE 21 The primary judge in the present proceeding expressed a personal preference for the view of Phillips JA in Sidebottom to that expressed by Sackville J in Amcor. Like Phillips JA, the primary judge considered that there was a fundamental distinction between a situation in which a person is required to produce documents and provide information, on the one hand, and a situation in which the person is left entitled to remain silent and uncooperative but is directed that, if he or she wishes to provide information, that must be done in a particular way or by a particular date. His Honour considered that, while the former requirement destroyed the right of silence, the latter requirement merely regulated the manner of breaking the silence that the person had the option to maintain. 22 His Honour considered that, since the statements from Fedora and Bell would not be required until after the Commission had filed and served all of its statements of evidence and completed its discovery of documents, the Commission's 'cards would all be on the table'. His Honour considered that, because it would not be proper for the Commission to use the individual respondents witness statements as a source of new 'leads', giving rise to further evidence in chief, there would be no adverse forensic consequences for Fodera and Bell in providing their statements in advance of the trial and prior to the closure of the Commission's case. His Honour concluded that the dispute was only about timing and that the arguments of Fodera and Bell were based on mistrust of the Commission, in relation to the use that would be made of the statements, and the Court, in relation to enforcement of the relevant limitations on such use. 23 Nevertheless, his Honour considered that it was important for there to be consistency of approach within the Federal Court in relation to matters of practice and procedure. His Honour considered, therefore, that it was undesirable for the course to be followed in preparation for trial of a matter should vary, in any significant way, as between one judge and another. His Honour, therefore, in refusing the Commission's application, followed the decision of Sackville J in Amcor.

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