Big Un Limited (in liquidation) v Evertz

INTRODUCTION

1. This is an application by the fourth defendant, Andrew Corner, seeking dispensation from the requirement to take procedural steps in these proceedings, including to file and serve a commercial list response pursuant to paragraphs 10 and 11 of the Practice Note SC Eq 3 - Commercial List and Technology and Construction List and/or other defence pursuant to r 14.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR); plead matters specifically pursuant to paragraph 11 of the Practice Note and/or r 14.14 of the UCPR; provide particulars pursuant to paragraph 11 of the Practice Note and/or r 15.1 of the UCPR; serve evidence (other than expert evidence or evidence from persons other than Mr Corner); and provide disclosure (other than that of certain books and records) in the course of the proceedings.
2. The application by Mr Corner also sought a stay of these proceedings against him pending the final determination of criminal proceedings which have been brought against Mr Corner in the Local Court of New South Wales. Mr Corner no longer presses for such a stay.
3. The application arises in the context of proceedings which have been commenced by the plaintiff, Big Un Ltd (in liquidation) against three defendants, being Brandon Evertz (the first defendant), Sonia Thurston (the third defendant) and Mr Corner (the fourth defendant). The allegations against the defendants are set out in the commercial list statement filed 7 November 2023 (CLS), in which Big Un seeks damages against its former directors and officers for alleged breaches of the Corporations Act 2001 (Cth) in relation to various intercompany loans advanced by Big Un to its subsidiary, Big Review TV Ltd.
4. Mr Corner and Big Un have reached agreement on the terms of consent orders which deals with the application insofar as it affects the plaintiff, including that there be no order as to costs. Mr Evertz consents to the orders sought save insofar as they concern disclosure and costs. Ms Thurston opposes those orders in relation to disclosure and costs and otherwise neither consents to nor opposes the balance of the orders sought.

These proceedings

1. On 29 October 2021, these proceedings were commenced in the General List of the Equity Division of this court.
2. On 19 October 2023, these proceedings were transferred to the Commercial List.
3. On 7 November 2023, Big Un filed the CLS in these proceedings. The CLS is a long and detailed document, running to 70 pages.
4. In broad summary, Big Un alleges in the CLS that: 1. Big Un through its operating subsidiary, Big Review, operated a social media video review technology platform for the use of small to medium-sized enterprises; 2. Mr Evertz, Ms Thurston and Mr Corner were officers of both Big Un and Big Review at differing times across the period from May 2013 to August 2018 and owed duties to Big Un under s 180 of the Corporations Act to exercise their powers and discharge their duties with the care and diligence that a reasonable person would exercise in that position in those circumstances; 3. Mr Evertz, Ms Thurston and Mr Corner breached the duties that they each owed to Big Un by causing or permitting it to make intercompany loans to Big Review in the period from December 2014 to August 2018 totalling over $16.5 million; 4. Big Un is entitled to compensation under s 1317H of the Corporations Act from Mr Evertz, Ms Thurston and Mr Corner to the extent of the damage it suffered in that it would likely have recovered all or part of the intercompany loans, would not have made further intercompany loans, would not have lost the money lent to Big Review and would not have lost the value of the Big Un Group's business.
5. In particular as against Mr Corner, it is alleged in the CLS that: 1. between 10 December 2014 and 16 May 2016, he was a director of Big Un; 2. between about December 2014 and about August 2018, he was the chief financial officer of Big Un and the Big Un Group; and 3. between 10 December 2014 and August 2018 he was an "officer" of Big Un (within the definition of "officer" in s 9 of the Corporations Act) in that in his role as chief financial officer of Big Un he made, and participated in the making of, decisions that affected the whole or a substantial part of the business of the Big Un Group and had the capacity to significantly affect Big Un's financial standing.
6. The allegations in the CLS focus on the financial position and capacity of Big Un, and in particular mention that between January 2015 and May 2018 Mr Corner prepared or caused to be prepared and provided to each of Mr Evertz and Ms Thurston on a weekly basis reports titled "Hot Reports" which contained figures for customer numbers, subscription numbers and current cash (CLS [20]-[21]). The CLS also contains allegations that the Hot Reports were flawed (CLS [22]).
7. There is no cross-claim brought by either Mr Evertz or Ms Thurston against Mr Corner.

The Criminal proceedings

1. On about 21 April 2023, Mr Corner was served with a Court Attendance Notice by the Australian Securities and Investments Commission (ASIC) commencing a criminal prosecution against him in the Local Court (Criminal proceedings).
2. In the Criminal proceedings, it is alleged that Mr Corner engaged in prohibited conduct by a person in possession of inside information in breach of ss 1043A(1) and 1311(1) of the Corporations Act as follows: 1. between 13 September 2017 and 2 November 2017, by procuring Dream Investment Nominees Pty Ltd to dispose of 1,131,015 ordinary shares in Big Un whilst being in possession of inside information about Big Un (Sequence 1); and 2. between 3 October 2017 and 10 November 2017, by procuring Cloudy Moon Pty Ltd to dispose of 640,102 ordinary shares in Big Un whilst being in possession of inside information about Big Un (Sequence 2).
3. In essence, the offence in s 1043A of the Corporations Act prohibits a person who possesses "inside information", and who knows or ought reasonably to know that the matters which comprise the definition of "inside information" in s 1042A(1) are satisfied in relation to that information, from engaging in specified conduct, including acquiring or disposing of financial products or procuring another person to do so. The maximum penalty for the contravention of s 1043A is 10 years imprisonment, a fine in the order of $1.4 million and/or three times the value of the proceeds derived from the commission of the offence.
4. The statement of facts dated 21 April 2023 which is relied upon by the Commonwealth Director of Public Prosecutions (DPP) in the prosecution against Mr Corner in the Criminal proceedings are contained in a confidential document which was provided to me for the purposes of this application. I was informed that Mr Corner provided the statement of facts to the other parties in these proceedings on terms that they each provide a confidentiality undertaking in relation to it, which they did. In an endeavour to preserve the confidentiality of the statement of facts, I will only refer to the factual detail in the Criminal proceedings in the most general way.
5. I am satisfied that the facts which are relied upon by the DPP in the Criminal proceedings as detailed in the statement of facts canvass events in the period from 2013 to 2018 concerning Mr Corner's involvement in the business of Big Un and Big Review as chief financial officer and director such that there is a general overlap of the factual matters which are relevant to the Criminal proceedings and these proceedings. I am also satisfied that there is a specific overlap of particular matters which are outlined in the statement of facts which are relevant to the Criminal proceedings and these proceedings, not only by reference to the period covered but also due to the alleged business and financial states of Big Un and Big Review, as well particular documents, including financial statements, sponsorship agreements and the "Hot Reports".
6. In essence, the events covered by the statement of facts are broad, both in terms of time and nature.
7. Mr Corner asserts and intends to continue to assert his right to silence and privilege against self-incrimination. Mr Corner has not yet been required to enter a formal plea in the Criminal proceedings.
8. On 13 June 2023, Mr Corner appeared via his lawyer in the Local Court in the Criminal proceedings.
9. On 25 July 2023, the Criminal proceedings were adjourned to 8 August 2023 for brief of service.
10. On 8 August 2023, the Criminal proceedings were listed for mention in the Local Court, at which time they were adjourned to 19 September 2023.
11. On 19 September 2023, the Local Court adjourned the Criminal proceedings to 14 November 2023.
12. On 14 November 2023, the Criminal proceedings were adjourned to 13 February 2024 for subpoenas to be issued.
13. On 13 February 2023, the Criminal proceedings were listed for mention in the Local Court, at which time they were adjourned to 9 April 2024 for further case conferencing.
14. On 9 April 2024, the Criminal proceedings were listed for mention in the Local Court, at which they were listed for a further case conference on 14 May 2024 and adjourned until 28 May 2024.
15. It is estimated by Mr Corner's criminal lawyers, Nyman Gibson Miralis, that the trial of the Criminal proceedings will likely take place in the second half of 2025 in the District Court of New South Wales, with an estimate duration of six to eight weeks.

Notices to produce

1. On 20 May 2024, the respective solicitors acting for each of Mr Evertz and Ms Thurston each served a notice to produce under r 21.10 of the UCPR on the solicitor acting for Mr Corner requiring the production of the statement of facts and any documents attached or referred to in the statement of facts.
2. On 24 May 2024, the solicitor for Mr Corner sent a letter to the solicitors for each of Mr Evertz and Ms Thurston offering to provide the statement of facts on terms that it be kept confidential and contesting the entitlement of Mr Evertz and Ms Thurston to any documents attached or referred to in the statement of facts.
3. On 27 May 2024, the solicitors acting for each of Mr Evertz and Ms Thurston agreed for present purposes not to press for production of any documents attached or referred to in the statement of facts as sought in the notices to produce, but reserved their rights in respect of that category. The statement of facts was then provided to Mr Evertz and Ms Thurston under an agreed confidentiality regime.

Proposed orders by consent

1. As I have already mentioned, Big Un and Mr Corner have reached agreement on a form of consent orders for disposing of the application made by Mr Corner. These proposed consent orders dated 13 June 2024 are as follows: 1. Order that the fourth defendant, Andrew Scott Corner, be relieved of the requirements of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and Practice Note SC EQ Commercial List and Technology and Construction List (Practice Note) to: a. file and serve any commercial list response or other defence to the plaintiff's commercial list statement filed on 7 November 2023 pursuant to paragraphs 10 and 11 of the Practice Note and/or rule 14.3 of the UCPR; b. plead matters specifically pursuant to paragraph 11 of the Practice Note and/or rule 14.14 of the UCPR; c. provide particulars pursuant to paragraph 11 of the Practice Note and/or rule 15.1 of the UCPR; d. serve any evidence (other than expert evidence or evidence from persons other than the fourth defendant); and e. provide any disclosure except the books of the plaintiff or Big Review TV Ltd. 2. The fourth defendant is granted liberty to make any application: a. to be relieved from any requirement to serve expert evidence, or lay evidence from persons other than the fourth defendant, after the plaintiff has served any evidence on which it wishes to rely; and b. concerning the trial of this proceeding. 3. The Notice of Motion filed on 18 April 2024 is dismissed insofar as it concerns the plaintiff with no order as to costs.
2. Big Un did not appear at the hearing of the application so did not seek to be heard in relation to any orders I might make which are not precisely as it has agreed with Mr Corner.

LEGAL PRINCIPLES

1. The privilege against self-incrimination is a long-established common law right of a person to refuse to answer any question or produce any document or thing which may tend to incriminate them: Sorby v Commonwealth (1983) 152 CLR 281, Gibbs CJ at 288-9 and Mason, Wilson and Dawson JJ at 309.
2. In Reid v Howard (1995) 184 CLR 1, Toohey, Gaudron, McHugh and Gummow JJ at 11-12 expressed the privilege against self-incrimination in this way (citations omitted): The privilege, which has been described as a "fundamental … bulwark of liberty", is not simply a rule of evidence, but a basic and substantive common law right. It developed after the abolition of the Star Chamber by the Long Parliament in 1641, and, by 1737, it was said that "there [was] no rule more established in equity". More recently, the privilege has been described as "deeply ingrained in the common law". It operates so that a person cannot be compelled "to answer any question, or to produce any document or thing, if to do so 'may tend to bring him into the peril and possibility of being convicted as a criminal'".
3. The purpose and bounds of the privilege against self-incrimination, as well as the degree of caution that a court should exercise in the face of its assertion, are described in MacDonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612, by Mason P (with whom Giles JA agreed) at [64] and [66]-[67] in these terms: [64] The privilege serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it (Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 559[31], Rich at 142[24]). But this does not define the scope of the privilege. The related privilege touching the criminal law is one of self-incrimination (emphasis added). The nub of the privilege is that the State should not be able to compel a defendant to provide proof against him or herself (Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 532; Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 129). The privilege extends to protect against compelled disclosure of evidence or documents that would increase the tendency of exposure to penalty (Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 612F per Lord Wilberforce). … [66] A defendant is entitled to be protected against both direct and indirect self-incrimination. Accordingly, the privilege also protects against the compelled disclosure of information that "may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character" (per Lord Wilberforce in Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 443, cited by Gibbs CJ in Sorby v The Commonwealth (1983) 152 CLR 281 at 294. See also Sorby at 310 per Mason, Wilson and Dawson JJ; Reid v Howard (1995) 184 CLR 1 at 6-7 per Deane J.). [67] The need for a privilege claim to be bona fide and reasonable is well established (see generally Heydon J D, Cross on Evidence 6th Aust ed, Butterworths, Sydney, 2000 at [25100]). But courts err on the side of caution lest an apparently innocuous disclosure has unforeseen adverse consequences (see generally Re New World Alliance Pty Ltd (Receiver and Manager Appointed); Syncotex Pty Ltd v Baseler (1993) 47 FCR 90 at 96-7 per Sheppard J).
4. A useful summary of the privilege against self-incrimination and the penalty privilege is contained in the judgment of Finkelstein J in Australian Securities and Investments Commission v Mining Projects Group Ltd (2007) 164 FCR 32; [2007] FCA 1620 at [7], which states: By way of introduction, it is necessary to say a word or two about each privilege. Each privilege operates to excuse a person from being compelled to answer any question or produce any document if doing so would have the tendency in one case to expose that person either directly or indirectly to a criminal charge and in the other to a penalty. Though often said to be analogous and based on the same rationale, the privileges are quite distinct. The privilege against self-incrimination is a "fundamental … bulwark of liberty" (Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 340) that "protects personal freedom, privacy and human dignity" (Caltex Refining 178 CLR at 500) and is "deeply ingrained in the common law" (Sorby v Commonwealth (1983) 152 CLR 281 at 309). It applies in curial proceedings, including procedures related to curial proceedings, and non-curial proceedings: Pyneboard 152 CLR at 340-341; Sorby 152 CLR 281 at 309. By contrast, the penalty privilege is different in several fundamental respects. The penalty privilege is not a substantive rule of law: Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 142, 179. It is merely a procedural rule that applies in curial proceedings to require the plaintiff to prove his case without any assistance from the defendant: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 559.
5. There is a line of authorities concerning the circumstances in which a party might be wholly relieved from participating in the court processes in civil proceedings, such as by giving discovery (disclosure as it is now termed in this court) or information (such as might be contained in defences, particulars, interrogatories and evidence), on the basis of protecting the privilege against self-incrimination.
6. Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204 involved proceedings against six corporate respondents for contraventions of the Trade Practices Act 1974 (Cth). The respondents sought an order excusing them in limine from giving discovery or answering interrogatories on the basis that the alleged contraventions would render them liable to a penalty brought by the Minister or the Trade Practices Commission. Deane J refused to make the order sought on the basis that the proceedings were not for the recovery of a penalty and did not involve any allegation of criminal conduct against the respondents.
7. In doing so, by reference to the previous authorities, Deane J at 207-208 described the general rule in the following terms (footnotes omitted): It is a well-established principle that a defendant in proceedings which are solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents which may assist in establishing his liability to the penalty (see, generally, per Isaacs J. in R. v. Associated Northern Collieries; Naismith v. McGovern and Martin v. Treacher). Even where, as in the present case, the proceedings are not for recovery of a penalty but to prevent and redress civil injury, a party to litigation ought not to be compelled to provide information or produce documents for inspection by the other party 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 (Mayor of the County Borough of Derby v. Derbyshire County Council).
8. But, after reviewing the longstanding authorities, Deane J at 209 also expressed the view that there was no general rule in civil proceedings (not being those for the recovery of a penalty) to relieve a party from the obligations of discovery or interrogatories and no proper basis for objecting to the production of documents or the provision of information in such a case, but objections could be taken to the production of specific documents or answering of specific questions. Deane J concluded at 210-211 (footnotes omitted): These strongly worded statements plainly establish the general rule that a party to proceedings which are for civil redress and not for a penalty ought not ordinarily be excused, in limine, from giving discovery or answering interrogatories but should be left to object to producing particular documents or answering particular questions on the ground that such production or answer might tend to expose him to liability to a penalty (see also Egg and Egg Pulp Marketing Board v. K. H. Korp Tocumal Trading Co. Pty. Ltd; Castlemaine Perkins Ltd. v. Queen Street Hotels Pty. Ltd. (No. 2)). That general approach is not however, as a matter of law, necessarily appropriate to all circumstances (see per Lindley L.J. in Martin v. Treacher; R. v. Associated Northern Collieries). If circumstances arose where the only means of protecting the right against self-incrimination and self-penalization were to excuse a party in limine from discovery or interrogatories, such circumstances should, in my view, be seen as exceptional and as justifying a departure from the general rule. In particular, if it appeared to the court that the making of an affidavit of discovery as distinct from producing the documents referred to in such an affidavit would tend to expose a party to a penalty, any order for discovery should be adjusted to the extent necessary to preclude that tendency. It is, perhaps, conceivable that circumstances could arise where the mere making of an order for interrogatories might have a similar tendency. The cases where the making of an order for discovery or interrogatories will, in itself, involve exposing a party to self-incrimination or self-penalization must, however, be rare indeed in view of the fact that the party will remain entitled to refuse to answer questions asked or produce documents discovered if the answers or production might tend to incriminate him or expose him to a penalty.
9. Importantly, as this passage from Refrigerated Express demonstrates, the general rule does not apply in the exceptional case where the only means of protecting the right against self-incrimination is to depart from the general rule, such as where a person may incriminate themselves by the mere giving of discovery or answering of interrogatories. Deane J expanded on this aspect at 212, saying: … In my view, the only circumstances which would warrant a departure in the present case from the ordinary approach that a party should be left to object to production of particular documents or to answering particular interrogatories would be that it appeared that the actual discovery, as distinct from production for inspection, of documents or the actual order for interrogatories would tend to expose the party ordered to make discovery or answer interrogatories to liability to a penalty.
10. In Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328, Mason ACJ, Wilson and Dawson JJ at 335-336 stated the position in relation to discovery and referred to Refrigerated Express in the following way (footnotes omitted): It is well settled that "a party cannot be compelled to discover that which, if answered, would tend to subject him to any punishment, penalty, forfeiture, or ecclesiastical censure" to use the words of Bowen L.J. in Redfern v. Redfern. See also Martin v. Treacher; Earl of Mexborough v. Whitwood Urban District Council; R. v. Associated Northern Collieries. Indeed, in a civil action brought merely to establish a forfeiture or enforce a penalty the rule is that neither discovery nor interrogatories will be allowed (In re A Debtor; Associated Northern Collieries). See generally the discussion by Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v. Australian Meat and Live-stock Corp. There his Honour drew a distinction between discovery in a mere action for a penalty and discovery in an action which was not for a penalty the result of which might be used to establish a party's liability to a penalty in other proceedings. In the first situation, the court should, in the absence of statutory provision to the contrary, refuse to make any order for discovery, production of documents or the provision of information for the reason that an intended consequence of the discovery, production of documents or provision of information is the imposition of the penalty, this being the object of the action. His Honour described this as "a broad and unqualified rule whose origins are apparently to be found in a reluctance on the part of the Court of Chancery to lend the aid of its discovery proceedings to the common informer" (see [Mexborough] and Heimann v. Commonwealth). To these authorities there should be added a reference to the statement of Lord James of Hereford in National Association of Operative Plasterers v. Smithies, that courts of equity were averse to actions for penalties and forfeitures being brought and would not assist them. But in the second situation the order will be made and the party against whom the order is made may object to the production of particular documents or to the provision of particular information on the ground that it may tend to expose him to a penalty.
11. EL Bell Packaging Pty Ltd v Allied Seafoods Ltd (1990) 4 ACSR 85 is an instance of the exceptional case described by Deane J in Refrigerated Express. Civil proceedings were brought in the County Court of Victoria by the plaintiff company under s 556 of the Companies (Vic) Code against two directors for debts incurred by the company in which a notice of discovery was served on those directors. The directors objected to the notice of discovery on the basis of their privilege against self-incrimination. The judge of the County Court dismissed the notice of discovery on the basis that the proceedings were for the recovery of a penalty and the production of documents would tend to incriminate the directors.
12. The Victorian Court of Appeal (Young CJ, Murphy and Vincent JJ) dismissed the appeal, writing separate judgments. Young CJ at 86 outlined the basis for the exceptional case, finding that under the statute precisely the same facts if established would expose a defendant to both civil and criminal liability. After citing the general rule and the exceptions to it explained in Refrigerated Express at 90-91, Murphy J at 91-92 referred to the decision in R v DCT; Ex Parte Briggs (1987) 71 ALR 86 where Beaumont J at 89 concluded that: … discovery should not be ordered because it may expose the respondents to the penalties of a crime.
13. Murphy J at 93 concluded that the actual knowledge of the directors of the company's solvency at the time of incurring the debt was equally as important for a prosecutor or a plaintiff to establish, holding: If this is so, it was submitted that the mere revelation on oath of a director's possession of documents or even of his non-possession of documents would be relevant to assist the proof of the criminal offence created by the section. In my opinion this is probably so. The present case is, I believe, the very type of case contemplated to be exceptional by Deane J in his judgment referred to earlier. Having to discover documents on affidavit, and then to object to production is calculated to have several consequences. It could establish that the deponent had the means of actual knowledge of the state of the company's affairs at the relevant time. It could also assist to establish a negligent absence of actual knowledge, by the omissions from the documents scheduled of material with which a competent or diligent director ought to have made himself familiar or should at some time have had in his possession. All details of actual knowledge or absence of knowledge would go to assist in the establishment of the offence, which the plaintiff must prove on the balance of probabilities before it can succeed in the action. By an order for discovery the defendant is required to stated [sic] on affidavit all documents which are or have been in his possession custody or power relevant to the issues identifying the same. In the present case, I think that it is quite clear on the face of things that the mere making of such an affidavit of documents would go to assist in the proof of a criminal offence, for the only relevant documents would be those going to prove or disprove such an offence on the balance of probabilities.
14. Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 concerned the application of the general rules outlined in Refrigerated Express in the context of proceedings which had been brought for copyright and trademark infringement where two of the respondents had already had their documents seized by the Australian Federal Police. Those respondents argued that the privilege against self-incrimination applied to relieve them of discovery obligations because the allegations in the civil proceedings could support liability for criminal offences under the Copyright Act 1968 (Cth) and the Trade Marks Act 1995 (Cth). Lindgren J considered Refrigerated Express and Pyneboard and the other cases which had analysed them, finding at [69] that the exposition given by Deane J in Refrigerated Express "has been accepted in all cases as correct and as providing sound guidance", and summarising the position at [67] as follows: Although the course of authority since Refrigerated Express is not all one way, there has been a strong disposition in a proceeding not itself concerned with the imposition of a penalty for an offence or a civil penalty, in favour of ordering discovery, reserving the issue of self-incrimination to the stage of production for inspection, and also reserving liberty to apply in relation to the degree of specificity with which a document is to be described in the individual's list of documents.
15. In Microsoft, Lindgren J at [70] said that he was not persuaded that the provision of the verified list of documents would tend to incriminate the respondents or that the case fell within the "rare exception allowed for by Deane J in Refrigerated Express". Lindgren J at [72] opined that the "rare exception" would apply in particular circumstances, saying: It should not be thought that the rare exception referred to by Deane J in Refrigerated Express could never have work to do. It would be applicable, for example: • where an otherwise discoverable document had been stolen and disclosure of the fact that it was in the possession, custody or power of the discovering party might tend to incriminate that party; • where statute made disclosure of the existence of an otherwise discoverable document an offence or the subject of the imposition of a civil penalty; • where statute made disclosure of a certain fact an offence or the subject of the imposition of a civil penalty, and any description of an otherwise discoverable document would necessarily amount to disclosure of that fact; or • where any description of an otherwise discoverable document might tend to incriminate the discovering party or render that party liable to imposition of a civil penalty in respect of other conduct or circumstances.
16. In the matter of Kala Capital Pty Ltd (No 2) [2012] NSWSC 1293, Brereton J dealt with an objection to an order for the production of documents on the basis that it would require the applicant to incriminate himself. At [13] Brereton J stated that the rule that courts will not make an order for discovery in proceedings for a penalty is distinct from the rule which allows a claim for privilege against self-incrimination in response to a subpoena, an order for production or an order to answer interrogatories. Citing the decision of the Court of Appeal of this court in Vasil v National Australia Bank Ltd (1999) 46 NSWLR 207; [1999] NSWSC 161, Brereton J concluded at [16] that the circumstance that an order for production might require the production of documents that would have a tendency to incriminate does not render that order invalid or liable be set aside but enables the recipient to take objection to production of the documents at the time of production.
17. In Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (No 3) (2018) 128 ACSR 625; [2018] FCA 1107, Moshinsky J at [97] recited the general rule described in Refrigerated Express as follows: As a general rule, in the absence of exceptional circumstances, a party to non-penalty civil proceedings is not to be excused in limine from giving discovery, but should instead be left to object to producing particular documents on the grounds that such production might tend to expose him or her to criminal liability or a civil penalty: Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat and Live-stock Corporation (1979) 42 FLR 204 at 208, 210-211; QC Resource Investments Pty Ltd (In Liq) v Mulligan [2016] FCA 813 at [19].
18. In Sadie Ville, Moshinsky J at [99] reminds that a valid claim for protection of the privilege against self-incrimination requires the person asserting it to prove that the act of providing information or documents would give rise to a "real and appreciable" risk of prosecution, citing Sorby at 290 and Microsoft at [40] amongst others.

Submissions of Mr Corner

1. At the hearing, Mr Afshar and Mr Pokoney appeared as counsel for Mr Corner, instructed by KB Legals.
2. In summary, the submissions of Mr Corner were to the following effect: 1. Mr Corner asserts his fundamental right to silence and the privilege against self-incrimination in circumstances where criminal charges have been made against him in the Criminal proceedings. The prejudice that Mr Corner would suffer if he is required to disclose information or documents in these proceedings is obvious. 2. There is both a general and specific overlap of the events which are the subject of these proceedings and the Criminal proceedings as illustrated by matters such as the coincidence of the time periods of those events, the subject of the financial performance of Big Un and Big Review, the sponsorship agreements and Mr Corner's alleged involvement in and knowledge of the Hot Reports, financial models, reports, statements and other financial information of Big Un. The Criminal proceedings are not just concerned with events in September to November 2017, but concern events well beyond those dates, both before and after. There does not have to be exact coincidence of the events, but in this case the overlap is substantial. 3. The application of the principle expressed in MacDonald is apt in this case - Mr Corner is to be protected from both direct and indirect self-incrimination, which is the compelled disclosure of information and documents which may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character. 4. This case falls within the exception to the general rule espoused in Refrigerated Express, and is equivalent to the nature of the circumstances in Bell Packaging, where there was coincidence in the elements in the civil proceedings and the criminal offences. 5. This application is not premature. There is no reasonable way for Mr Corner to respond to the allegations made against him in these proceedings or participate in the various court processes such as filing a response, giving particulars, serving evidence or giving disclosure without also revealing the state of his knowledge as to the financial performance of Big Un across the overlapping time periods. Specifically, Mr Corner cannot respond to alleged facts before, during or after the overlapping time periods because anything that he might reveal as to his knowledge outside the period of the alleged offences would also reveal his state of knowledge within it. 6. Any admission, denial, statement in evidence or disclosure made by Mr Corner in respect of the allegations in these proceedings would shed light upon Mr Corner's state of knowledge of the financial performance of Big Un and would therefore jeopardise him in the Criminal proceedings. The mere fact that Mr Corner might produce a particular document in response to a request for disclosure which turns on the documents in his possession and control puts him at risk given that the charges in the Criminal proceedings focus on the information he possessed at relevant times, not only his knowledge of it. Producing a document in response to a notice to produce requiring documents within Mr Corner's possession carries the same risk. 7. The relief sought in the application would mitigate against the prejudice that Mr Corner would suffer in a manner which would not prevent the advancement of these proceedings otherwise. Mr Evertz and Ms Thurston do not make any allegations against Mr Corner. Many of the documents which might be sought by Mr Evertz and Ms Thurston in disclosure from Mr Corner are available in any event from Big Un because it possesses its own books and records as well as the books and records of Big Review. 8. The orders proposed by Mr Corner provide a regime which carves out those documents that form part of the books and records of Big Un or Big Review which are not otherwise in their possession, custody or control or that of their liquidators. The orders do not foreclose the making of applications by Mr Evertz and Ms Thurston to identify specific documents for which they seek production from Mr Corner, which can then be adjudicated upon with all the protections around how, in those very specific circumstances, Mr Corner's position could be protected. 9. The regime proposed by Mr Evertz and Ms Thurston means Mr Corner would need to make an application to protect his privilege against self-incrimination every time he receives a notice to produce, which may be on multiple occasions. This is an impractical and costly outcome.

Submissions of Mr Evertz and Ms Thurston

1. Ms Holmes and Mr Murray appeared as counsel for Ms Thurston, instructed by Polczynski Robinson. Mr Rogers appeared as counsel for Mr Evertz, instructed by Christopher Farah.
2. Mr Evertz expressly adopted the submissions of Ms Thurston and only made short additional submissions.
3. In summary, the submissions of Ms Thurston were to the following effect: 1. The general rule from Refrigerated Express (as confirmed in Pyneboard and Sadie Ville) should apply so that Mr Corner as a party to non-penalty civil proceedings should not be excused in limine from giving discovery but should instead be left to object to producing particular documents on the grounds that such production might tend to expose him to criminal liability. For this case to fall with the exceptional case, I would need to be satisfied that the only means of protecting the right against self-incrimination is to relieve Mr Corner from the obligation to give discovery in limine. The principle as described in Microsoft should also be applied, which is the strong disposition in favour of ordering discovery, reserving the issue of self-incrimination to the stage of production for inspection and also reserving liberty to apply in relation to the degree of specificity with which a document is to be described in Mr Corner's list of documents. 2. The form of the exception to the general principle in Refrigerated Express grants dispensation where the only means of protecting the privilege against self-incrimination is to excuse the party from discovery or interrogatories. The cases where the making of an order for discovery or interrogatories will in itself expose a party to self-incrimination must be rare in view of the fact that the party will remain entitled to refuse to answer questions asked or produce documents discovered if the answers or production might tend to incriminate him or expose him to a penalty. 3. The rare and exceptional circumstances in Bell Packaging were the complete overlap between what facts would be established in the civil proceedings and what facts had to be established in the criminal proceedings. Further, Bell Packaging was a case where there had been an order for discovery so it was known what the categories of documents would be to which the order would apply. 4. A valid claim for self-incrimination can only be made out if Mr Corner can establish that the act of providing information or documents would give rise to a real and appreciable risk of prosecution, applying Sadie Ville. 5. The application by Mr Corner is one for broad relief and is premature at this stage of the proceedings. The order seeking dispensation from disclosure is an upfront, blanket order relieving Mr Corner from providing any disclosure in the proceedings, which would include discovery or notices to produce irrespective of the materiality or forensic utility of the documents, and such a broad order, made at this stage, would be divorced of context. Any application made by Mr Corner to be relieved of the obligation to provide disclosure should instead be made and dealt with at an appropriate time in the proceedings. 6. The appropriate time in the proceedings for the making of an order relieving Mr Corner of the obligation to provide disclosure would be if and when disclosure is sought and then in the context of a specific form of disclosure. At that point Mr Corner could apply to be relieved from the obligation for the discovery sought or seek orders in relation to the degree of specificity with which a document is to be described in Mr Corner's list of documents. This is the approach suggested in Microsoft. 7. Alternatively, at the stage of a call for production for inspection, Mr Corner can object to the production of particular documents on the basis that those documents would give rise to a real and appreciable risk of self-incrimination, as suggested in Pyneboard, Sadie Ville and Refrigerated Express. 8. On either alternative, in taking the approach suggested the court would have the benefit of considered evidence and submissions about the forensic utility of the respective documents and the countervailing risk of prejudice to Mr Corner of discovery of those documents. 9. Mr Corner does not provide evidence which addresses specifically why a potential obligation to disclose documents pursuant to the ordinary compulsory processes of the court in the future would be contrary to his right to silence and privilege against self-incrimination or would otherwise prejudice his position as a criminal defendant. The issue of prejudice to Mr Corner should only be addressed once a specific prejudice arising from the prospect of discovery of documents is identified rather than at the abstract level advanced by Mr Corner at this point. 10. There is not complete overlap between the pleaded allegations in these proceedings and the allegations in the Criminal proceedings. As is apparent from the CLS, these proceedings concern a claim by Big Un for compensation in respect of various intercompany loans advanced by Big Un to Big Review, including in the period prior to October 2015 to the period following 7 March 2018. The allegations in the Criminal proceedings concern the possession of inside information about the financial performance of Big Un and the purported commission of offences between September 2017 and November 2017. Only four of the intercompany loans which are the subject of the CLS were advanced in that period. 11. The specifics of the alleged "inside information" are not disclosed by Mr Corner except to the extent it concerns the financial performance of Big Un. It follows that documents that evidence Mr Corner's knowledge of matters other than the matters pertaining to the purported "inside information" will not undermine Mr Corner's right to silence or privilege against self-incrimination. Examples of issues in dispute in these proceedings which would not prejudice Mr Corner in the Criminal proceedings include the following: 1. The willingness or unwillingness of First Class Funds Management Pty Ltd to keep extending finance to Big Review in and following March 2018 and the knowledge of the directors as to that matter (dealt with in the CLS and the amended commercial list response of Ms Thurston) are matters in respect of which Mr Corner's communications with representatives of First Class and internal communications with the other defendants about discussions with First Class would be relevant to the reasonableness of the defendants' belief that First Class would extend financial accommodation to Big Review. 2. The reliability of the Hot Reports that Mr Corner prepared between January 2015 and May 2018 in light of the pleaded flaws with the Hot Reports as stated in the CLS. Mr Corner's personal documents that shed light on the manner in which he prepared the Hot Reports would inform the pleaded allegations regarding the flaws in the Hot Reports and the reasonableness of Ms Thurston's reliance on them. 3. Documents post-dating November 2017 will not necessarily disclose Mr Corner's state of knowledge of the "inside information" prior to November 2017. 1. Mr Corner has not and could not establish that all the documents in respect of which disclosure might be sought at some point in the future, whether by discovery or production pursuant to notices to produce, in these proceedings are documents that would give rise to a real and appreciable risk of prosecution. 2. The issue of balancing the potential prejudice to Mr Corner from an obligation to disclose certain documents or kinds of documents against the forensic utility and materiality of those documents is best undertaken once the documents at issue are identified. 3. Ms Thurston has rights which should be protected. There will likely be documents for which Ms Thurston would seek production from Mr Corner that are relevant to her defence, because it is said in the CLS that Ms Thurston should have or did receive information from Mr Corner, and should have analysed it in a different way than she did. 4. Mr Corner's proposed carveout of the "books and records" of Big Un and Big Review from the disposition of discovery is likely to be conducive to unnecessary disputes in the future regarding whether or not a given document forms part of the books and records of Big Un and Big Review. Documents in Mr Corner's possession, custody or power will either be relevant to an issue in dispute or will not be so, regardless of their characterisation as being the books and records of Big Un and Big Review. 5. The Practice Note does not apply in its terms to notices to produce issued under rr 21.10 or 34.1 of the UCPR, which parties are entitled to issue as of right subject to compliance with the basal requirements under those rules. 6. In terms of practicalities and cost, the regime proposed by Mr Corner means that Mr Evertz and Ms Thurston would need to make an application - or potentially multiple applications - to seek documents. Whichever regime is selected, the court is going to have to be involved in adjudicating on the application, perhaps on multiple occasions, but no reasonable conclusion could be reached at the present time about how many such applications would need to be made. But the parties are well represented, can be relied upon to make sensible common-sense decisions to an extent and capable of reaching agreement without needing to trouble the court, as occurred in relation to the notices to produce seeking the statement of facts.
4. The additional submissions made by Mr Evertz were to the following effect: 1. The cases which are the subject of debate in these proceedings are ones where either a notice requiring general discovery has been given or there has been discovery either by way of categories or general discovery, both of which circumstances are one step before that currently in these proceedings. There is no identified disclosure obligation to which objection is taken by Mr Corner so the question is whether any conceivable form of disclosure would put Mr Corner at risk of self-incrimination - not merely if Mr Corner responded and claimed privilege by reference to identified documents, but if he responded at all 2. No doubt there will be categories of documents which do not put Mr Corner in an invidious position, most obviously those documents which postdate the allegations. Many of the documents that postdate the allegations in the Criminal proceedings will be incriminatory, if at all, because of their contents rather than because of the fact of them. In that way Mr Corner could object to production in the ordinary way. 3. Mr Corner concedes that the overlap of facts between these proceedings and the Criminal proceedings is not complete. The allegations in these proceedings are that the business model of Big Un was so defective that the business should have ceased by at least October 2015 and just not run at all, and it was negligent and in breach of duty for the directors of Big Un to permit it to continue to operate. The significance of the allegations is that it is really the entirety of the business model, the advice given in relation to it and the plans of Big Un in every respect which are potentially in issue and raised by way of the CLS and the commercial list responses in the entire period from at least October 2015 to August 2018. This should be contrasted with the statement of facts.

CONSIDERATION

1. In the face of Mr Corner's assertion of his privilege against self-incrimination in the context of Criminal proceedings which have been brought against him, I need to heed the warnings given in MacDonald to be cautious not to set in train a process which may lead to his incrimination and cause what might appear to be an innocuous disclosure to have adverse consequences for him in those Criminal proceedings. The serious and longstanding role in our society performed by the right to claim privilege against self-incrimination in protecting personal liberty, freedom, privacy and human dignity demands that I exercise this caution. Mr Corner has asserted his right to claim the privilege against self-incrimination and I must recognise the fundamental protection that the law gives him when doing so - the "fundamental … bulwark of liberty" as described in Pyneboard and Reid.
2. While I recognise that Mr Evertz and Ms Thurston have rights which should be protected, this factor has less weight than the potential prejudice of the self-incrimination risks faced by Mr Corner, particularly in circumstances where the claims are brought by Big Un against Mr Evertz, Ms Thurston and Mr Corner and there is no cross-claim between them. Mr Evertz and Ms Thurston should primarily be looking to Big Un to provide the disclosure of relevant documents which they seek, particularly when the liquidators of Big Un would be expected to possess all the books and records of Big Un and Big Review.
3. The distinguishing features of this case are that Mr Corner has been charged with criminal offences in the Criminal proceedings relating to Mr Corner's possession of "inside information", in circumstances where the events in question (as described in the statement of facts) overlap in a general and specific way with the relevant events in these proceedings. As I have already found, there is a general overlap of the relevant events in these proceedings and the Criminal proceedings covering the period from 2013 to 2018 concerning Mr Corner's involvement in the business of Big Un and Big Review as chief financial officer and director. There is significant common breadth in the factual content behind the allegations in both proceedings. The specific overlap in these proceedings and the Criminal proceedings is provided by the matters concerning the business and financial state of Big Un and Big Review and the common financial documents to which reference is made.
4. In my view, this case comes within the "rare exception" as described in Refrigerated Express and confirmed in Pyneboard. That being so, Mr Corner should be relieved in limine of all of the requirements upon him imposed by the court processes to give a response or defence, plead specific matters, provide particulars, serve evidence and give disclosure. I believe that the present circumstances meet the description in Microsoft of instances in which the "rare exception" has work to do, being "where any description of an otherwise discoverable document might tend to incriminate the discovering party".
5. The circumstances of a "rare exception" do not require a complete overlap in the events or allegations made in these proceedings and the Criminal proceedings. Bell Packaging just happens to be a case of the application of the exception which involved complete overlap. The circumstances in which a case might fall within the "rare exception" are not closed. It is sufficient for there to be an overlap of such significance that there is a real and material risk to the maintenance of the privilege against self-incrimination. For the reasons I have stated above in relation to the general and specific overlap of the relevant events in these proceedings and the Criminal proceedings, I am satisfied that this case comes within the "rare exception".
6. The "real and appreciable risk of prosecution" as discussed in Sadie Ville has already arrived for Mr Corner - he is now a criminal defendant in the Criminal proceedings. It is not to the point to ask whether Mr Corner's act of disclosing documents or providing information would give rise to a real and appreciable risk of criminal prosecution. Having already been the subject of an ongoing criminal prosecution, there is very real potential that Mr Corner, if asked to produce a document or provide information, will face greater jeopardy in the Criminal proceedings.
7. In none of the authorities on which Mr Evertz and Ms Thurston rely was there an existing criminal prosecution running at the same time as the civil proceedings involving overlapping events and allegations against the same defendant. There is a material difference between the circumstances faced by Mr Corner, where the threat to his liberty is clear and present, and the circumstances in Refrigerated Express, Pyneboard, Bell Packaging, Microsoft and Sadie Ville.
8. Contrary to the submissions made by Ms Thurston and supported by Mr Evertz, the application made by Mr Corner is not premature or too broad. The Criminal proceedings are being faced by him now. The Criminal proceedings allege matters going to the information Mr Corner possessed and his state of knowledge. I agree with Mr Corner's submissions that there is no reasonable way for him to respond to the allegations made against him in these proceedings or participate in the various court processes without also revealing the state of his knowledge as to the financial performance of Big Un across the overlapping time periods. I also agree with Mr Corner that he cannot respond to alleged facts before, during or after the overlapping time periods because anything that he might reveal as to his knowledge outside the period of the alleged offences would also reveal his state of knowledge within it. A request for documents in these proceedings which post-dates the allegations in the Criminal proceedings may cause as much risk to Mr Corner as a request for documents within the time period of those allegations.
9. The essential problem for Mr Corner is how he could respond to the request for a specific document or category of documents without putting himself at risk in the Criminal proceedings. He would either be admitting that he had such documents or denying that he had such documents. Both answers would shed light on the state of the information he admits that he possessed and the state of his knowledge in the relevant period, each of which are at issue in the Criminal proceedings. Once Mr Corner's position is seen in this light, it does appear to be a case in which any form of disclosure by him would risk self-incrimination.
10. Exactly the same issues arise for me in deciding this application at the present time as they would for another judge of this court if the application was postponed to a future time when the specific documents or categories of documents sought by Mr Evertz and Ms Thurston from Mr Corner become known.
11. In my view, if Mr Corner was to produce one or more documents in response to a specific or general request for disclosure (whether by individual document or by category), he runs the very real risk of jeopardising his right to assert his privilege against self-incrimination in responding to that request, such that he would be exposed to criminal liability in the Criminal proceedings.
12. Applying the exception to the general rule in Refrigerated Express, I consider that the only means by which Mr Corner's privilege against self-incrimination can be protected is to excuse him from the procedural steps as sought by him, subject to a grant of liberty to Mr Evertz and Ms Thurston to enable each of them to apply for disclosure by Mr Corner of a specific document or thing which is identified and relevant to a fact in issue. I also consider that the liberty provided to Mr Evertz and Ms Thurston should not cover documents which they should otherwise seek from Big Un.
13. I recognise that in accordance with the orders I propose to make it may be necessary for further applications to be considered by the court at a future time in which Mr Evertz and Ms Thurston seek the production of specific documents from Mr Corner. If Mr Evertz and Ms Thurston first obtain disclosure from Big Un, the need for further documents to be sought from Mr Corner should be limited. In that way, by determining the application in the manner that I have, by recognising the present risk to Mr Corner's invocation of the privilege to self-incrimination from procedural steps in these proceedings, the time and cost that might be taken from those steps will be contained. This will particularly be so if the parties conduct themselves with common sense, as I was assured that they would.

ORDERS

1. For the reasons stated above, I propose to make the following orders: 1. Order that the fourth defendant, Andrew Scott Corner, be relieved of the requirements of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and Practice Note SC Eq 3 Commercial List and Technology and Construction List (Practice Note) to: 1. file and serve any commercial list response or other defence to the plaintiff's commercial list statement filed 7 November 2023 pursuant to paragraphs 10 and 11 of the Practice Note and/or r 14.3 of the UCPR; 2. plead matters specifically pursuant to paragraph 11 of the Practice Note and/or r 14.14 of the UCPR; 3. provide particulars pursuant to paragraph 11 of the Practice Note and/or r 15.1 of the UCPR; 4. serve any evidence (other than expert evidence or evidence from persons other than the fourth defendant); and 5. provide any disclosure except the books of the plaintiff or Big Review Pty Ltd, which are not otherwise in the possession, custody or control of the plaintiff or Big Review TV Pty Ltd or their liquidators. 1. The fourth defendant is granted liberty to make any application: 1. to be relieved from any requirement to serve expert evidence, or lay evidence from persons other than the fourth defendant, after the plaintiff has served any evidence on which it wishes to rely; and 2. concerning the trial of this proceeding. 1. The first and third defendants have liberty to apply on 3 days' notice for disclosure from the fourth defendant of any specific document or thing that is clearly identified in the notice and is relevant to a fact in issue, provided that such documents are not the books or records of the plaintiff or Big Review TV Ltd and otherwise not in the possession, custody or control of the plaintiff or Big Review Pty Ltd or their liquidators. 2. The notice of motion filed 18 April 2024 is otherwise dismissed insofar as it concerns the plaintiff with no order as to costs. 3. The notice of motion filed 18 April 2024 is otherwise dismissed insofar as it concerns the first defendant and the third defendant. 4. The issue of costs as between the fourth defendant, and the first defendant and the third defendant, is reserved to be dealt with by McGrath J in chambers on the papers.

Amendments 20 August 2024 - Case name amended - addition: "(No 2)" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 August 2024