De Simone v Bevnol Constructions & Developments Pty Ltd [2009] VSCA 199

Court of Appeal (Vic)|2009-04-03|Before: NEAVE JA and WILLIAMS AJA

Seachange Management Pty Ltd v Bevnol Constructions & Developments Pty Ltd & Ors [2008] VCAT 2629

PRACTICE AND PROCEDURE - Application on Summons - Parties involved in proceeding in the VCAT involving (among other matters) a claim that the applicant had engaged in misleading and deceptive conduct - Applicant the subject of a police investigation involving allegations of obtaining a financial advantage by deception - Applicant sought stay of VCAT proceedings (so far as they related to him) on the basis that defending those proceedings might require him to waive his right to silence in any future criminal proceedings - Applicant also sought to have two questions of law referred to the Supreme Court under the Charter - Application refused by a Vice-Presidential Member of VCAT and applicant sought leave to appeal - Whether Judge erred in the exercise of his discretion regarding the stay application - Whether Judge erred in applying the Charter - Whether Judge erred in applying the principles in (1982) 7 ACLR 202 - , , , , , , - Application refused.

1 The applicant, Giuseppe De Simone, seeks leave to appeal from the decision of a Vice President of the Victorian Civil and Administrative Tribunal ('VCAT') refusing to grant a stay of a counterclaim made against him by Bevnol Constructions & Developments Pty Ltd ('Bevnol'), the respondent to this application.[1]

2 The background to the application is as follows. Seachange Management Pty Ltd ('Seachange'), a property developer, commenced VCAT proceedings against Bevnol, a building contractor, claiming damages, interest and costs for alleged breaches of contract arising out of the development of a retirement village in Ocean Grove.

3 Bevnol counterclaimed against Seachange, the applicant and the third and fourth respondents, alleging various breaches of contract.[2] The counterclaim also alleged that Seachange and the third respondent engaged in misleading and deceptive conduct contrary to s 9 of the Fair Trading Act 1999 ('Fair Trading Act'). In the alternative, it was alleged that the applicant, as a director of Seachange, was involved in misleading and deceptive conduct or aided, abetted, counselled or procured misleading or deceptive conduct, contrary to the Fair Trading Act. The respondent sought damages from the applicant under s 158 and/or s 159 of the Fair Trading Act.

4 In the VCAT proceedings the applicant sought a partial stay of the respondent's counterclaim, as it related to him, because he is currently the subject of a police investigation involving allegations of obtaining a financial advantage by deception, which were made against him by a director of the respondent. The police investigation and the respondent's counterclaim against the applicant arose out of the same facts.

5 In the proceedings below the parties agreed on certain facts relating to the police investigation. These were as follows:

Mr De Simone is the subject of a police investigation involving allegations of obtaining a financial advantage by deception. The investigation was instigated following a complaint made by a director of Bevnol in about March 2007.
The complaint concerned the circumstances in which financial assistance was sought or obtained in relation to the Seachange development and in particular [the forwarding of a letter relating to construction finance which was authorised by the fourth respondent and forwarded by Mr De Simone to Bevnol].
The police investigation has not been completed. When it is further advanced the last thing the investigating officer will do is to seek to complete a formal interview with Mr De Simone. If at that time Mr De Simone refuses to answer any question it is likely that he will be charged.
In respect of the investigation Mr De Simone has been advised not to answer any questions or provide any material to the police. Mr De Simone intends to follow that advice.
The probability that charges will be laid against Mr De Simone is high.
While criminal proceedings have not yet commenced it is more than likely they will be, but the time frame for the laying of charges and for the conduct of the prosecution is unknown.[3]

6 In essence, the applicant claimed that defending the counterclaim might require him to forego or waive his right to silence in relation to any subsequent criminal proceedings brought against him.

7 The applicant also sought to have two questions of law referred to the Supreme Court under s 33 of the Charter of Human Rights and Responsibilities Act 2006 ('the Charter').

(1) If, in a proceeding before a court or tribunal, a question of law arises that relates to the application of this Charter or a question arises with respect to the interpretation of a statutory provision in accordance with this Charter, that question may be referred to the Supreme Court if -

(a) a party has made an application for referral; and

(b) the court or tribunal considers that the question is appropriate for determination by the Supreme Court.

9 The two questions of law ('the Charter questions') that the applicant sought to have referred to the Supreme Court were:

Does s 24 of the Charter (the right to a fair hearing) affect the exercise of the discretion of [VCAT] in considering whether to order a stay of a civil proceeding where the applicant is also the subject of probable criminal charges?
Under ss 80, 97 and 98(3) of the VCAT Act and s 41 of the Supreme Court Act 1986, construed in accordance with s 32 of the Charter (the interpretative obligation), what is the appropriate test to be applied in considering whether to grant a stay of a civil proceeding in circumstances where the applicant is also the subject of probable criminal charges?[4]

10 The learned Vice President refused the stay application and declined to refer the Charter questions to the Supreme Court. He also held that:

• s 38 of the Charter did not apply to VCAT in the exercise of its power to grant a stay, because it was acting in a judicial capacity, rather than in an administrative capacity;[5]

• the guidelines set out by Wootten J in McMahon v Gould[6] applied in deciding whether to grant a stay of civil proceedings where criminal proceedings were on foot or threatened;[7]

• ss 6(2), 32(1), 24 and 25 of the Charter did not require reformulation of the McMahon guidelines; and

• having regard to the principles in McMahon, it was not in the interests of justice to grant the stay sought by the applicant.[8]

11 The applicant now seeks leave to appeal against the orders made by the learned Vice President. If leave to appeal is granted, the applicant will seek orders staying the operation of relevant paragraphs of the counterclaim, until the police complaint lodged by Louis Allain and/or a representative of Bevnol is finally determined. Alternatively he will seek an order that the application for a stay be remitted to VCAT, with a direction as to the law to be applied.

12 The principles governing the grant of leave under s 148(1) of the VCAT Act are well-established. In Secretary to the Department of Premier and Cabinet v Hulls,[9] Phillips JA summarised the principles as follows:

[w]hen leave is sought to appeal under s 148, it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible. [10]

It will be noted that the order refusing a stay was an interlocutory order.

13 The applicant's proposed grounds of appeal raise questions of law about the exercise of his Honour's discretion to refuse the stay application. It is therefore necessary to consider whether there is a 'real or significant argument' that the Vice President erred, and whether allowing the error to go uncorrected would result in substantial injustice. We consider each of the applicant's proposed grounds of appeal in turn.

14 Proposed ground 1 claims that the learned judge erred in law in the application of s 33 of the Charter in the exercise of his discretion as to the grant of a stay. Under s 33(2)(a), the tribunal would have been prevented from considering the stay application once the referral had been made because the questions asked of the Supreme Court would have been relevant to the determination of the stay application.

15 The judge said that he was not persuaded that it was appropriate to refer the questions to the Supreme Court because:

[t]he issues raised by the questions were fully ventilated in the proceedings as was the application of the relevant principles to the facts of this matter. In my view the most expeditious course is to determine the application. Any party aggrieved by the decision may exercise their appeal rights and the issues sought to be determined by the referral application may be determined in that context.[11]

16 The applicant submitted that the judge should have decided whether it was appropriate to refer the Charter questions to the Supreme Court ('the referral question'), before hearing the submissions and evidence on the merits of the stay application. He contended that his Honour had in effect decided that an issue of interpretation arising under the Charter should first be decided by VCAT and not referred to the Supreme Court.

17 Counsel for the respondent submitted that on 10 July 2008, at the first hearing of the stay application, his Honour sought guidance from the parties as to whether the referral question raised should be treated as a discrete issue from the substantive merits of the stay application, and should be referred to the Supreme Court under s 33 of the Charter. The applicant did not make any submissions on this issue, and at a hearing on 24 July 2008, counsel for the applicant did not object to the procedure proposed by his Honour. A submission in reply filed on behalf of the applicant on 23 September 2008 stated:

[t]his Submission excludes any discussion of the request for referral to the Supreme Court...It is limited to a consolidation of [the] Submissions previously made on the substantive merits of the stay in... light of the Charter and a response to aspects of Bevnol's Submissions in opposition to the stay.

18 At the hearing on 26 September 2008, his Honour confirmed that he would consider the referral question at the same time as the merits of the stay application, without objection from the applicant.

19 Arguably the applicant's failure to object to the approach taken by the Vice President precludes him from contending that his Honour erred by failing to refer the Charter questions to the Supreme Court under s 33. In any event, we do not consider that it is arguable that his Honour erred in declining to exercise his discretion to refer the Charter question to the Supreme Court.

20 The applicant must show that there is a real argument that in exercising that discretion the judge acted on wrong principle, took account of irrelevant considerations, failed to take account of relevant considerations, or was mistaken as to the facts.[12]

21 Clearly it would have been inappropriate for VCAT to determine that in all cases where a Charter issue arises the matter should first be determined by VCAT. However, contrary to the applicant's submission, that is not what his Honour decided.

22 His Honour declined to refer the matter to the Supreme Court because he considered that the Charter did not affect the principles which should be applied in determining whether a stay should be granted. His Honour was entitled to consider the merits of the stay application in deciding whether it was appropriate to refer the matter to the Supreme Court.

23 Referral of the Charter questions would have fragmented the VCAT proceedings, delayed resolution of the stay application and may have resulted in the parties incurring unnecessary costs.[13] The approach taken by his Honour did not prevent the applicant seeking leave to appeal against his Honour's order to decline the stay. We therefore do not consider that the applicant has any real argument that that his Honour erred in law in the exercise of his discretion by failing to refer the Charter questions to the Supreme Court.

24 Under proposed ground 2 the applicant alleges that the learned judge erred in law in the application of ss 24, 25 and 32 of the Charter.

25 Section 32 of the Charter provides that, so far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights.

26 Section 24 of the Charter provides that a person charged with a criminal offence or a party to a civil proceeding has a right to have the charge or proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.

27 Section 25(1) of the Charter provides that a person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law.

28 Section 25(2) sets out a number of minimum guarantees which apply to a person charged with a criminal offence, including the right 'not to be compelled to testify against himself or to confess guilt'.[14]

29 Proposed ground 3 is that 'the learned judge erred in law by applying the principles in McMahon v Gould which is no longer good law in this State'.

30 This Court has previously held that the principles in McMahon govern the grant of a stay in circumstances where there are anticipated or actual criminal proceedings related to the civil proceedings against the applicant.[15] The McMahon guidelines are as follows:

(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16, 19);

(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid);

(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with (Jefferson v Bhetcha [1979] 1 WLR 898, 905);

(d) Neither an accused (ibid) nor the Crown (Rochford v John Fairfax & Sons Ltd, 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;

(e) The court's task is one of 'the balancing of justice between the parties' (Jefferson Ltd v Bhetcha at 904, taking account of all relevant factors (ibid, 905));

(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibid, 905);

(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding (ibid, 904)...

(h) However, the so-called 'right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (ibid, 904-5);

(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings (ibid, 905);

(j) In this regard factors which may be relevant include:

(i) the possibility of publicity that might reach and influence jurors in the civil [sic][16] proceedings (ibid, 905);

(ii) the proximity of the criminal hearing (ibid, 905);

(iii) the possibility of miscarriage of justice e.g. by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses (ibid, 905);

(iv) the burden on the defendant of preparing for both sets of proceedings concurrently (Beecee Group v Barton (1980) 5 ACLR 33);

(v) whether the defendant has already disclosed his defence to the allegations (Caesar v Somner [1980] 2 NSWLR 929, 932; Re Saltergate Insurance Co Ltd (1980) 4 ACLR 733, 736);

(vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him (cf Re Saltergate Insurance Co Ltd, 735-6);

(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff;

(l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, e.g., setting down for trial, and then stayed. (Beecee Group v Barton).[17]

31 The overriding principle is that the interests of justice govern the decision whether to grant or refuse a stay of civil proceedings, in circumstances where there are threatened or actual related criminal proceedings against a party.

32 Proposed ground 5 is that 'the learned judge erred in law in the application of ss 4 and 38 of the Charter'.

33 Because all of these proposed grounds of appeal relate to the meaning or application of the Charter, we consider them together.

34 In the VCAT proceedings the applicant submitted that McMahon required modification in light of ss 24 and 25 of the Charter. He claimed that a stay was required because the VCAT proceedings would prejudice his right under s 24 to have the charge determined by a competent, independent and impartial court after a fair and public hearing, and his right to a fair criminal trial under s 25, including the right to silence recognised by s 25(2)(j).

35 His Honour said that the Charter was relevant to VCAT in three ways:

• s 38(1) of the Charter makes it unlawful for a public authority to act incompatibly with human rights, or in making a decision, to fail to give proper consideration to a relevant human right;

• all statutory provisions must be interpreted in a way that is compatible with human rights (s 32(1)); and

• under s 6(2)(b) of the Charter, its provisions apply to courts and tribunals to the extent that they have functions under Part 2 and Division 3 of Part 3.

36 His Honour said that s 38 of the Charter did not apply to the hearing of a stay application. Although VCAT was a 'functional public authority' under s 4(1)(b) of the Charter, s 4(1)(j) provided that a 'court or tribunal' was not a public authority 'except when it [was] acting in an administrative capacity'. His Honour held that VCAT was exercising judicial power and was therefore not 'acting in an administrative capacity' within the meaning of s 4(1)(j). In reaching that conclusion, his Honour said that:

[t]he substantive proceedings relate to an inter parties dispute about the existence of legal rights and obligations and the application of those rights and obligations to facts as determined by the Tribunal. The determination of such a dispute involves the exercise of judicial power. An application to stay part of such a proceeding similarly involves the exercise of judicial power. In determining such an application the Tribunal is not 'acting in an administrative capacity' within the meaning of s 4(1)(j).[18]

37 In our opinion, it is not reasonably arguable that his Honour erred in holding that VCAT was not constrained by s 38, in deciding whether or not to grant the stay sought by the applicant.

38 His Honour then considered the effect of the interpretive obligation in s 32. VCAT's powers to stay proceedings are based on a combination of various provisions in the VCAT Act, including s 80(1) (power to give directions and do 'whatever is necessary for the... fair hearing and determination of a proceeding'); s 97 (duty to act fairly) and s 98(3) (power of VCAT to regulate its procedure). [19]

39 His Honour rejected the claim that these provisions had to be reinterpreted in light of ss 24 and 25 of the Charter. In relation to s 24(1) of the Charter his Honour noted that the provision applied to both civil and criminal proceedings and said that:

[i]n relation to the fairness of the civil proceeding I am not persuaded that s 24(1) of the Charter adds anything, given that the VCAT Act already requires that the Tribunal act fairly and that it is bound by the rules of natural justice. Implicit in the notion of a fair hearing is that fairness extends to all parties. Such a concept is inherent in the balancing exercise reflected in the McMahon v Gould guidelines.[20]

40 He also held that s 25 of the Charter (the minimum guarantees applicable to a person charged with a criminal offence) did not require greater weight to be given to the applicant's right of silence than the weight given to the right of silence under the McMahon guidelines, because s 25 applied only where a person had been charged with a criminal offence and the applicant had not been formally charged.[21]

41 In relation to s 6(2)(b) of the Charter, the learned Vice President simply said that the provision did not add anything further to the issues he had discussed in relation to ss 24 and 25.

42 At the hearing of the application for leave to appeal, the applicant submitted that his Honour had wrongly disregarded the effect of the civil hearing on his right to silence in criminal proceedings. He contended that because the VCAT fair procedure provisions apply only to civil proceedings in VCAT, they must be read subject to the fair trial requirements applicable to a person who may become a defendant in criminal proceedings.

43 He also submitted that his Honour had incorrectly held that the word 'charged' should be confined to situations where a formal charge had been laid. In support of that submission he referred to case law indicating that under Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, the right to a fair trial and other rights relevant to fair criminal processes apply before a person has been formally charged.[22] We note that if the applicant now sought a stay in VCAT, that application would have to be considered in light of the fact that since the earlier VCAT hearing he has been charged with eight criminal offences.

44 The applicant also submitted that the McMahon principles should be reconsidered because there had been judicial criticism about whether they give sufficient weight to the protection of defendants in criminal proceedings, referring to Re AWB Limited[23]. In Re AWB Ltd, although Robson J considered himself bound to follow the McMahon principles, he went on to say:

[n]evertheless, I wish to add my voice to those at first instance suggesting that an appellate court may wish to reconsider McMahon. In particular, an appellate court may consider that the right of silence should not only be recognised but protected by the courts by preventing a defendant from being effectively compelled to waive his right of silence and thereby help those who seek to prove an offence by requiring him to defend civil actions relating to the same or similar conduct the subject of existing or potential criminal proceedings before those civil proceedings are completed. Compelling the defendant to defend civil proceedings, particularly those which impose a penalty, may assist the Crown in its prosecution by putting the Crown onto a train of inquiry or enable it to adjust its case to meet the anticipated defence in advance. It might be thought that such a circumstance denies the defendant his or her basic common law right to have the Crown establish its case against him or her without any assistance from the defendant.[24]

45 The applicant referred to guideline (j)(ii) of the McMahon principles, and said that the civil proceedings in VCAT gave an incentive to the Victoria Police to delay charging the applicant because his previous disclosures [in the course of the VCAT proceedings] were said to have been 'quite helpful'[25] to the police.

46 He also submitted that guideline (j)(iii) required modification because advance disclosure of material revealed in a civil proceeding could affect the fairness of criminal trials, by giving the prosecuting authorities a forensic advantage.

47 In relation to proposed ground 5, the applicant submitted that in deciding whether to grant a stay, VCAT was required by s 6(2)(b) of the Charter to exercise its functions consistently with Part 2 of the Charter. He contended that ss 24 and 25 of the Charter must therefore necessarily modify the McMahon principles.

48 Counsel for the respondent submitted that the protections provided by s 24 of the Charter relating to the provision of a fair hearing, and s 25 of the Charter relating to the fair conduct of criminal proceedings, were simply a codification of the rights which already exist under the common law and which are recognised in the guidelines themselves.

49 As the Vice President recognised in his reasons, s 6(2)(b) of the Charter may be relevant to VCAT's functions in granting a stay.

50 Difficulties arise in reconciling s4 (1)(j), which excludes courts acting in a judicial capacity from the definition of public authorities, and s 6(2)(b) which says that the Charter applies to courts and tribunals to the extent that they have functions under Part 2 and Division 3 of Part 3. In R v Williams,[26] King J said that it was unnecessary to decide how those provisions related to each other but that

when a court is determining what would constitute a fair hearing in respect of a criminal trial it would be difficult to imagine that the rights referred to as minimum guarantees in criminal proceedings [in s 25 of the Charter] would not form, in addition to any common law and other statutory requirements, the basis of what constitutes a fair hearing.[27]

51 In Kortel v Mirik and Mirik,[28] Bell J acknowledged the difficulty of reconciling s 4(1)(j) and s 6(2)(b) of the Charter. He said that the question arose whether s 6(2)(b), together with ss 8 and 24(1), put 'a positive obligation on the court to ensure a fair hearing' and that the resolution of that question turned on the proper construction of the expression to the extent that courts and tribunals have functions under Part 2 and Division 3 of Part 3, considered in the context of the objects and the scheme of the Charter as a whole'.[29]

52 In RJE v Secretary to the Department of Justice,[30] Nettle JA interpreted legislation by reference to the interpretive obligation in Division 3 of Part 3. Given that s 6(2)(b) refers to both the interpretive functions of courts and tribunals in Part 3, Division 3, and to their functions under Part 2, it appears that that s 6(2)(b) implicitly reads down s 4 (1)(j), so that Part 2 applies directly to courts and tribunals. It follows that ss 24 and 25 apply directly to courts and tribunals, when they exercise their functions.

53 We doubt whether s 24 of the Charter requires modification of the McMahon principles, which emphasise the protection of the accused's right of silence in criminal proceedings and attempt to balance it against the rights of the parties in civil proceedings. Nevertheless we consider that the applicant has a real argument that the McMahon principles should be modified in light of ss 24 and 25 of the Charter.

54 However, even if his Honour erred in holding that ss 24 and 25 did not require modification of the principles in McMahon, we do not consider that allowing the error to go uncorrected would cause substantial injustice on the facts of this case. VCAT has already made orders prohibiting the disclosure of the contents of the applicant's affidavit of 1 July 2008 to any person not involved in the VCAT proceedings. Although there was dispute between the applicant and respondent as to whether any undertaking had previously been made as to the confidentiality of affidavits filed with VCAT in the future, the respondent's counsel made an undertaking at the hearing of the application that Bevnol would not disclose the contents of any documents filed with VCAT for the purpose of the civil proceedings, to any persons apart from its legal advisers.

55 Since the hearing of this application we have been advised that there is a dispute between the parties as to the precise scope of the undertaking. It is however common ground between the parties that the respondent has undertaken not to voluntarily disclose any documents to be filed in the civil proceedings to the police.

56 Further, the matter has been somewhat overtaken by events. The applicant has now been charged as anticipated. It is open to him to make a fresh stay application in these altered circumstances, bearing in mind that the judge reached his conclusion in part on the basis that s 25 of the Charter did not apply to persons who were only under investigation. His Honour did not exercise his discretion in the circumstances which now prevail and there would be no utility in the Court considering the challenge the applicant presently seeks to ventilate on appeal.

57 Having regard to all these circumstances, we do not consider that leave to appeal should be granted on the basis of proposed grounds 2, 3 or 5.

the learned judge erred in law in the application of the principles in McMahon v Gould to the factual circumstances of this case in the light of the decision in Re AWB Limited ... .

59 His Honour rejected the applicant's submission that defending Bevnol's counterclaim would affect his right of silence in subsequent criminal proceedings. His Honour referred to the remarks of Hayne J in Australian Securities Commission v Kavanagh[31] that:

[f]or the reasons I have given earlier, the statement that the respondents would, in practical terms, forfeit their right not to reveal their defences, is a statement that is unsustainably broad. The respondents have already stated the grounds of their defence in the civil proceedings; if committed for trial it may be expected that they will have to file other material revealing their defence to the criminal charges. What underlies the proposition is that the respondents do not wish to have to choose whether to expose themselves to examination and cross-examination in the civil proceedings before the criminal trial begins. As Wootten J said in McMahon v Gould... there are:

... advantages which the 'right of silence' gives to an accused, but they cannot reasonably be regarded as part of the reason why the right exists. In exercising its discretion to stay civil proceedings the court need not be concerned to preserve these advantages. It should be concerned to avoid the causing of unjust prejudice by the continuance of the civil proceedings, not to preserve the tactical status quo in the criminal proceedings whether it be just or unjust. (Emphasis added).[32]

60 His Honour also referred to the statement by Megaw LJ in Jefferson Limited v Bhetcha[33] that:

There is, I say again, in my judgment, no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under [order] 14, or in the pleading of his defence, or by way of discovery or otherwise, what his defence is or may be, in whole or in part, with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceeding. The protection which is at present given to one facing a criminal charge - the so-called 'right of silence' - does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings.[34]

61 His Honour cited the decision of Young CJ in Philippine Airlines v Goldair (Aust) Pty Ltd,[35] stating that the Chief Justice had held that:

it would need a very strong case indeed before the court should intervene solely on the [basis of the right of silence] to stay civil proceedings pending determination of criminal proceedings.[36]

62 His Honour noted that he had previously made an order in the following terms:

Pursuant to s 101(3)(b) of the Victorian Civil & Administrative Tribunal Act 1998 the Tribunal orders that:

1.1 no party to these proceedings (or their legal advisors) is to disclose the contents of Mr De Simone's affidavit of 1 July 2008 to any person; and

1.2 a party may disclose the contents of Mr De Simone's affidavit of 1 July 2008 to their legal advisors.[37]

63 His Honour then reviewed the McMahon guidelines (j)(i) to (j)(vi) and concluded that they did not favour the grant of a stay in the circumstances of this case.

64 The applicant submits that 'the decision to refuse a stay if allowed to stand will cause irreparable harm to [his] rights to a fair trial in criminal proceedings which are likely to be incepted against [him]'.

65 He contends that the disclosure of material for the purposes of defending the VCAT proceedings could result in information becoming known to the police which would be used against him in the criminal proceedings, despite the undertaking given by the respondent's counsel. He contends that the conduct of the VCAT proceedings could enable Victoria Police to find 'needles in the haystack' of materials already in possession of Victoria Police, which would assist in his prosecution. He also submits that the transcript of civil proceedings could suggest lines of cross examination by the Crown in criminal proceedings, which would prejudice his ability to defend himself against these criminal charges.

66 The respondent submits that even if the stay is not granted:

[t]he appellant's concern can only relate to evidentiary material given by him either orally or in affidavit form (the Police, having executed the subpoena have in their possession all of the relevant material). Such matters are protected by the operation of s 105(2) of the VCAT Act. Further, as the appellant is well aware, having made applications to the Tribunal, the Tribunal is entitled to suppress the content of any document provided to it and accordingly, the appellant will be entitled to seek and possibly obtain suppression orders from the Tribunal regarding any document which he proposes to file.

67 Similar submissions were made in the VCAT proceedings and considered by the Vice President. His Honour correctly addressed the arguments made by Mr De Simone relating to forensic disadvantage, having regard to the remarks of Hayne J in the passage cited above. We do not consider that there is any real argument that his Honour erred in undertaking the balancing process contemplated by McMahon.

68 Nor do we consider that refusal of leave would cause substantial injustice to the applicant. As we have said, orders have already been made preventing the disclosure of contents of the applicant's affidavit of 1 July 2008 to any person other than their legal advisers. The applicant can apply for similar orders in the future, if necessary. The undertakings given by the respondent in relation to future affidavit material will also give some protection to the applicant. He may also apply again for a suppression order or a stay in light of the fact that he has now been charged with criminal offences.

69 For these reasons we would refuse the application for leave to appeal.

[1] The application is made under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act').

[2] The third respondent was Paul Marc Custodians Pty Ltd and the fourth respondent was Martin Jurblum, a director of Paul Marc Custodians Pty Ltd.

[6] (1982) 7 ACLR 202 ('McMahon').

[10] Ibid 337 [16] (Tadgell and Batt JJA agreeing).

[13] Cf by analogy the approach taken in relation to previous provisions allowing reference of matters from the Magistrates' Court to the Full Court: Collins v Black [1995] VicRp 26; [1995] 1 VR 409, 411 (Brooking J), 419 (JD Phillips and Hansen JJ); and from a Trial Division judge to the Full Court: Hodgson v State of Victoria & Ors [1995] VicRp 56; [1995] 2 VR 292, 298 (Tadgell J).

[15] Trade World Enterprises Pty Ltd v DCT [2006] VSCA 191; (2006) 64 ATR 316, [12] (Chernov JA, with whom Nettle and Redlich JJA agreed). See also Philippine Airlines v Goldair (Aust) Pty Ltd [1990] VicRp 34; [1990] VR 385 (Young CJ) ('Philippine Airlines') and Re AWB Ltd [2008] VSC 473; (2008) 252 ALR 566 (Robson J).

[16] This reference should be to criminal proceedings.

[17] McMahon (1982) ACLR 202, 206-207.

[18] Reasons [51] (citations omitted).

[19] Dowie v Northey & Anor [2000] VCAT 823 (30 April 2003).

[20] Reasons [68] (citations omitted).

[21] We note that, although the applicant had not been charged at the time of the hearing of the present application, he was charged shortly thereafter. A total of eight charges have been laid against the applicant, including one count of obtaining a financial advantage by deception and two counts of knowingly giving false evidence in the VCAT proceedings commenced by Bevnol.

[22] See generally Ben Emmerson QC, Professor Andrew Ashworth and Alison Macdonald, Human Rights and Criminal Justice (2nd Ed, 2007) 231.

[24] Ibid, 591 (citation omitted). See also_Yuill v Spedley Securities Ltd (in liq)_ (1992) 8 ACSR 272 (Kirby P) and Niven v SS [2006] NSWCA 338 (Beazley JA).

[25] This comment was made by Peter Lustig in an affidavit sworn by him on 30 June 2008. Mr Lustig is or was the solicitor representing Seachange in the VCAT proceeding.

Human Rights and Responsibilities Act 2006

Fair Trading Act 1999

Civil and Administrative Tribunal Act 1998

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