EVIDENCE - Evidence Act 1995 (NSW) - s 128 -whether under s 128(1), s 128 is to apply where objection is purported to be taken to evidence which has earlier been given
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EVIDENCE - Evidence Act 1995 (NSW) - s 128 -whether under s 128(1), s 128 is to apply where objection is purported to be taken to evidence which has earlier been given
HIS HONOUR: This judgment concerns an evidentiary question which arose during the hearing of the principal proceedings: Dr Leo Shanahan v Jatese Pty Ltd [2018] NSWSC 1088. Resolution of the issue warrants publication, separately, of reasons. Definitions in the principal judgment are used in this judgment.
After lunch on day five of the hearing of the proceedings, Mr Phillip Chynoweth gave the following evidence, without objection, under cross-examination by senior counsel for the minority:
Q. Go to the next sentence, "We need to agree that the majority shareholders, a fee for us to complete the plan." You understood that you were effectively working for the majority shareholders, didn't you?
A. I can't remember exactly what context that was, but I - I was talking as somebody who was organising a sale or a - a financial option for the company, and in my business, it was only proper that if you organised an arrangement or purchase that was going to shareholders, there - there was a fee, so that's what I think I meant.
Q. You didn't contemplate being paid anything by the minority shareholders, did you?
A. I - it would be - I can't remember, no.
Q. It's obvious from that sentence, isn't it?
A. Yeah.
Q. You contemplated only that it would be the majority shareholders paying you a fee, correct?
A. Yes, in that--
Q. That was because you understood yourselves, that is, you and Ms Teagan, to be acting consistently with what the majority shareholders wanted you to do as directors of Canberra Eye Hospital, correct?
A. No, it was more that it was highly unlikely that the minority shareholders would provide any money or any fee to us.
Q. You certainly hadn't asked them, had you?
A. No.
Q. Did you ask the majority to pay you some money?
A. No.
Q. Did they volunteer themselves to pay you some money?
A. Not associated with this.
Q. When did they offer you to pay you money?
A. It was towards the end of the first six months, and I mentioned to Iain that this was going a lot longer and much more complex than what I'd expected and I - because I'd moved to Sydney, I needed to be recompensed for travel and my costs.
Q. And your time as well and trouble.
A. Yes.
Q. How much did he pay you?
A. I can't remember exactly, but I think it was about - it was $20,000 over the course of 12 months.
Q. That was from Dr Dunlop to yourself, is that right?
A. No, I - it was basically paid from the Canberra Laser Surgery to me.
Q. You had negotiated that fee with Dr Dunlop personally, is that right?
A. I talked to - talked to Iain and then - Iain then talked to the other doctors.
Q. By that, you mean Dr Khannah and Dr Duncan, is that right?
A. Understand, yes.
Q. You regarded yourself as entitled to a payment from the majority doctors at that time, didn't you?
A. I - no. No. I - I - sorry, entitled is a difficult word. What I - I was looking for compensation for my time and effort.
Q. You never asked the minority, did you?
A. No.
Q. Only the majority. You never disclosed that in your affidavit, did you?
A. No.
This evidence revealed that Mr Chynoweth had asked for, and received, money from the majority in respect of services which he provided as a director of CEH, without the minority knowing about it. Under the Shareholders' Agreement, directors were not to be remunerated.
His evidence may tend to prove that he committed an offence against or arising under an Australian law, or is liable to a civil penalty.
Section 128 of the Evidence Act 1995 (NSW) (Evidence Act) (which is in Part 3.10) provides:
(1) This section applies if a witness objects to giving particular evidence, or evidence on a particular matter, on the ground that the evidence may tend to prove that the witness:
(a) has committed an offence against or arising under an Australian law or a law of a foreign country, or
(b) is liable to a civil penalty.
(2) The court must determine whether or not there are reasonable grounds for the objection.
(3) Subject to subsection (4), if the court determines that there are reasonable grounds for the objection, the court is not to require the witness to give the evidence, and is to inform the witness:
(a) that the witness need not give the evidence unless required by the court to do so under subsection (4), and
(b) that the court will give a certificate under this section if:
(i) the witness willingly gives the evidence without being required to do so under subsection (4), or
(ii) the witness gives the evidence after being required to do so under subsection (4), and
(c) of the effect of such a certificate.
(4) The court may require the witness to give the evidence if the court is satisfied that:
(a) the evidence does not tend to prove that the witness has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, and
(b) the interests of justice require that the witness give the evidence.
(5) If the witness either willingly gives the evidence without being required to do so under subsection (4), or gives it after being required to do so under that subsection, the court must cause the witness to be given a certificate under this section in respect of the evidence.
(6) The court is also to cause a witness to be given a certificate under this section if:
(a) the objection has been overruled, and
(b) after the evidence has been given, the court finds that there were
reasonable grounds for the objection.
(7) In any proceeding in a NSW court or before any person or body authorised by a law of this State, or by consent of parties, to hear, receive and examine evidence:
(a) evidence given by a person in respect of which a certificate under this section has been given, and
(b) evidence of any information, document or thing obtained as a direct or indirect consequence of the person having given evidence,
cannot be used against the person. However, this does not apply to a criminal proceeding in respect of the falsity of the evidence.
(8) Subsection (7) has effect despite any challenge, review, quashing or calling into question on any ground of the decision to give, or the validity of, the certificate concerned.
(9) If a defendant in a criminal proceeding for an offence is given a certificate under this section, subsection (7) does not apply in a proceeding that is a retrial of the defendant for the same offence or a trial of the defendant for an offence arising out of the same facts that gave rise to that offence.
(10) In a criminal proceeding, this section does not apply in relation to the by a defendant, being evidence that the defendant:
(a) did an act the doing of which is a fact in issue, or
(b) had a state of mind the existence of which is a fact in issue.
(11) A reference in this section to doing an act includes a reference to failing to act.
(12) If a person has been given a certificate under a prescribed State or
Territory provision in respect of evidence given by a person in a proceeding in a State or Territory court, the certificate has the same effect, in a proceeding to which this subsection applies, as if it had been given under this section.
(13) For the purposes of subsection (12), a prescribed State or Territory
provision is a provision of a law of a State or Territory declared by the regulations to be a prescribed State or Territory provision for the purposes of that subsection.
(14) Subsection (12) applies to a proceeding in relation to which this Act applies because of section 4, other than a proceeding for an offence against a law of the Commonwealth or for the recovery of a civil penalty under a law of the Commonwealth.
Section 132 of the Evidence Act (which is also in Part 3.10) provides:
If it appears to the court that a witness or a party may have grounds for making an application or objection under a provision of this Part, the court must satisfy itself (if there is a jury, in the absence of the jury) that the witness or party is aware of the effect of that provision.
The fact that he had asked for money and had been paid was not disclosed in the affidavit evidence, including that of Mr Chynoweth himself. Indeed, my perception was that his evidence about the payments came as somewhat of a surprise to both sets of counsel.
Mr Chynoweth's testimony was completed at the end of day five. After the adjournment, it occurred to me that Mr Chynoweth may have had grounds for making an application or objection under a provision of Part 3.10 with respect to his evidence about the payments. The next morning, I drew to the attention of counsel that the evidence may tend to prove that he had committed an offence under an Australian law, or is liable to a civil penalty. I raised the question of whether, in the circumstances, the Court could or should give him a certificate under s 128(5) of the Evidence Act.
No doubt flowing from the disclosure of the payments, documentary evidence was later elicited by notices to produce and oral evidence elicited from the majority under cross-examination (after objection and the provision of certificates) which revealed that Mr Chynoweth or his company had received payments totalling not less than $84,000 (that is significantly more than the $20,000 to which he referred).
Objection on Mr Chynoweth's behalf to the evidence already given by him was then sought to be made and a certificate applied for. The Court had the benefit of submissions from the parties on the subject. I gave Mr Chynoweth, represented by separate counsel, the opportunity to be heard.
The question is whether s 128(1) has the effect that s 128 applies if a witness objects to 'giving' particular evidence, or evidence on a particular matter after the evidence has been given.
For the reasons which follow, the answer is no. The plain meaning of the text and the structure of s 128 do not accommodate another answer.
The section operates as a whole and congruently in the following sequential way.
The first step is that the witness takes objection on the grounds that the evidence may tend to prove the commission of an offence or exposure to a civil penalty (s 128(1)).
Next, the court must determine whether there are reasonable grounds for the objection (s 128(2)).
If the court rules that there are reasonable grounds, the court is not to require the witness to give the evidence and the witness is to be informed that the witness need not give it unless required by the court under subsection (4), and that the court will give a certificate (the effect of which the court must explain) if the witness either gives the evidence willingly, without being required to do so, or after being required to give it under subsection (4).
At this point, the witness has the election to give the evidence willingly or to decline to do so. If the witness is prepared to give the evidence willingly, a certificate is given (128(5)).
If the witness is not prepared to give the evidence willingly, the court may require the witness to give it if it is satisfied that the evidence does not tend to prove that the witness has committed an offence or is liable to a civil penalty and the interests of justice require the witness to give the evidence. If the court requires the witness to give evidence, a certificate is given (s 128(5)).
If the court has overruled the objection, but after the evidence has been given the court finds that there were reasonable grounds for the objection, a certificate is to be given (s 128(6)).
It is plain that the objection must and can only be taken before the evidence is given.
First, s 128(1) is in the present tense. Section 128 applies only if a witness objects to giving evidence, not to objecting to evidence that has been given.
Second, the objection is taken in relation to particular evidence or evidence on a particular matter. If the objection is taken after the evidence is given, it can only relate to particular evidence. That evidence will then be known. The provision for the objection to be to evidence on a particular matter caters for the fact that the exact scope of the evidence will not yet be known. This is a further indication that the objection must be before the evidence is given.
Third, s 128(2) requires the court to rule on the objection. The remainder of s 128 operates depending on that ruling. If there are no reasonable grounds for the objection, the matter ends there and the witness can be required to give the evidence subject to a certificate later being given under s 128(6) if, after the evidence, the Court considers there were reasonable grounds for the objection.
Fourth, if there are reasonable grounds, the witness gets an option to give the evidence willingly under the protection of a certificate. No option can be exercised as to willingness once the evidence is given. If the witness is unwilling, the court may require the witness to give the evidence if the requirements of s 128(4) are met.
Fifth, s 128(6) operates where there has been an objection which has been overruled and where, after the evidence has been given, the court finds that there were reasonable grounds for the objection.
Finally, s 128(3) has no work to do once the evidence is given because the court will no longer be in a position to require the witness to give it.
In Meiko Australian Pacific Pty Ltd v Adam Samuel Hinchcliff [2009] NSWSC 354, Einstein J reached the same conclusion as I have. At [183]-[186], his Honour said:
[183] Section 128 does not contemplate that a certificate might issue in respect of evidence already given save where the evidence is given over an objection by the witness to giving evidence.
[184] The terms of section 128 clearly contemplate that a certificate, if granted, is granted prior to the giving of evidence not to evidence which has already been given, particularly where no objection was taken.
[185] To the extent that a certificate can be issued after the giving of evidence, this may occur where the court has ruled but not granted a certificate: Cornwell v R [2006] NSWCCA 116 at [87]-[94]. The certificate in that proceeding concerned answers concerning specific matters, in cross-examination.
[186] A retroactive application of s 128 is unwieldy and is not contemplated by that section. It also undermines the purpose of the section, which is to prevent witnesses from being coerced into giving evidence which tends to incriminate them. Once the evidence has been given, it cannot be said that the witness has been compelled.
However, a different conclusion was reached by the Full Court of the Family Court of Australia in LGM v CAM (2011) 46 Fam LR 118 (LGM). A brief exposition of the relevant factual circumstances in LGM is appropriate.
A judge of the Family Court (O'Ryan J) had made orders on 28 November 2007, in property proceedings, that the wife (W) be restrained from withdrawing or disbursing any monies from any bank account except for expenses in the ordinary course of business or for ordinary living expenses. At the conclusion of the hearing of the property proceedings, the husband (H) brought contempt proceedings against W based on alleged breaches of the orders which were said to have been admitted by her in her evidence in the property proceedings.
W was found by a different judge of that Court (Barry J) to have contravened the orders and she was sentenced to imprisonment. The contravention found was that W had written out cheques against her superannuation account. There was a dispute about whether she had dated the cheques, and whether the dates were written approximately at the time of their presentation. Her position was that she had not dated the cheques and had entered into the transactions prior to the date of the orders, and the cheques had been banked by someone else.
The evidence upon which the conviction was based included evidence of W given under cross-examination by counsel on behalf of H during the property proceedings on 20 March 2008 and 29 April 2008. The judgment records that on both of these occasions the cross-examination of W spanned a number of days over periods of months. It also records that she was in prison on both of these occasions.
After extensive cross-examination, it was ultimately put to her that the withdrawals had been directed by her in the full knowledge that the transactions were in breach of the Court's orders. Counsel for another party raised with the trial judge whether W needed 'a warning'.
O'Ryan J then said 'I've decided simply to give you the warning, that you're not bound to answer any questions that may incriminate you, that is to say that may, for example, lead to proceedings against you for breach of those orders.'
After further cross-examination, the same counsel suggested to the trial judge that W again be warned, and counsel for H agreed that W should be warned and he would not object to a certificate being granted. Counsel for H submitted that the certificate be limited to questions asked that day and that it should not apply retrospectively to questions asked of W prior to that day. His Honour apparently accepted this submission.
During the contempt proceedings, counsel for H said that to his recollection the granting of a s 128 certificate occurred in mid or late May, in response to which, Barry J observed that the evidence being relied on pre-dated the granting of the certificate. No further consideration to this issue was given in exchange between counsel and his Honour or in his Honour's judgment.
The appeal papers before the Full Court apparently did not include the relevant certificate.
The unfairness to which W was exposed is manifest.
In overturning W's conviction, the Full Court relevantly said of s 128 of the Evidence Act at [155]-[162]:
[155] It is obvious from the transcript that at this time O'Ryan J knew that the contempt and/or contravention applications were in the wings because he referred to those proceedings.
[156] His Honour granted the wife a certificate but, on the application of the husband's counsel restricted its operation to prospective evidence, leaving the evidence that the wife had given on the previous occasions unprotected. His Honour did not explain to the wife the effect of the certificate given nor that had he limited its scope.
[157] We are of the view that his Honour failed to afford the wife the protection provided by s 128 by not giving her the opportunity of raising her privilege when the questions were first asked in March 2008.
[158] It was open to his Honour at any time to grant a certificate notwithstanding that the evidence had already been given. Section 128(6) makes that clear:
(6) The court is also to cause a witness to be given a certificate under this section if:
(a) the objection has been overruled; and
(b) after the evidence has been given, the court finds that there were reasonable grounds for the objection.
[159] Section 128 is protective in its operation. It seems to us that answers may at the time of being given appear innocuous but later, in the context of other evidence or answers, take on another complexion that require a warning to be given and a certificate considered. To interpret the section in a way so as to limit the power to grant a certificate only to the point in time at which the condemning evidence is given would be to rob the section of its intent.
[160] The very answers in relation to which we believe a warning should have been given formed the basis of the applications for contempt and contravention heard by Barry J.
[161] His Honour Barry J was clearly concerned as to whether the wife had been warned as the passages extracted from the transcript of proceedings before him indicate. He derived little assistance from counsel in alleviating his concern. It seems that both his Honour and counsel considered the fact that the certificate eventually given postdated the evidence precluded further consideration of the matter.
[162] It was open to his Honour Barry J to exclude the evidence given by the wife under compulsion of cross-examination because she had not been informed or properly informed of her privilege against self-incrimination.
I am mindful that the Full Court is an intermediate Court of Appeal and that, unless I consider it to be plainly wrong, I should follow it. In my respectful opinion, the Full Court was plainly wrong that it was open to his Honour at any time to grant a certificate notwithstanding that the evidence had already been given.
Such circumstances may have the effect that the evidence elicited may not be permitted to be used, but not by dint of issue of a certificate.
I agree with the Full Court that the trial judge had failed to afford W the protection provided by not giving her the opportunity of raising her privilege when the questions were first asked in March 2008.
However, s 128(6) which the Court said made it clear that it was open to his Honour at any time to grant a certificate, in fact, makes the opposite clear.
The sequence contemplated in s 128(6) is that there has been an objection, the objection has been overruled, the evidence has then been given and the court then finds that there were reasonable grounds for the objection after all. In other words, if after the evidence is given, it becomes apparent from that evidence that the objection which was overruled should have been upheld, a certificate is given. The operation of the section is predicated on the fact that the evidence, once given, reveals that an earlier objection taken and overruled should have been upheld. It is protection against an incorrect ruling, not against no ruling. That is the mischief which s 128(6) seeks to avoid.
As the High Court said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.
It may be accepted that s 128 is protective in its operation, but that operation is to be determined in accordance with the text of the section.
I observe that in Lewis Securities Ltd (in liq) (2017) 120 ACSR 327 Rein J took, after expressing reservations about it, the approach taken in LGM. His Honour's judgment does not indicate that he was referred to Meiko.
Mr Chynoweth is not entitled to a certificate under s 128 of the Evidence Act. [1]
[3]
Endnote
The same issue as is dealt with in this judgment arose with respect to certain evidence given by Dr
Kannah T276 - 278, 287, 306 - 307. The Court declines to furnish a certificate to him for the same
reasons.
[4]
Amendments
19 July 2018 - Paragraph 23 amended
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Decision last updated: 19 July 2018
Parties
Applicant/Plaintiff:
Dr Leo Shanahan
Respondent/Defendant:
Jatese Pty Ltd: In Re Chynoweth and section 128 of the Evidence Act 1995