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[2003] NSWSC 916
procedural. Plaintiff required to give the answer(s) despite their incriminatory tendency; court ordered issuance of a s.128(7) protective certificate in Form 1 (to be attached to a transcript);...
During cross-examination in a dispute about whether a restaurant was run as a partnership, the plaintiff refused to answer a question under s.128 of the Evidence Act because the answer might show he was involved in false tax returns. The judge found there were reasonable grounds for the objection, but concluded the s.128(5) criteria were satisfied because the evidence related to an Australian taxation offence, was central to resolving the dispute and to the plaintiff's credit, and no greater public harm would result. The court ordered the plaintiff to answer and issued a protective certificate under s.128(7), after which cross-examination continued.
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1,643 words · generated 26/07/2026
In cross-examination in an Equity Division proceeding concerned with whether a restaurant was carried on as a partnership, the defendant's counsel asked the plaintiff about a document the plaintiff had identified as having been given to an accountant for the preparation of the defendant's income tax return [1]. Counsel for the plaintiff objected under s.128 of the Evidence Act 1995 on the ground that the answer might tend to prove the plaintiff had committed a taxation offence, effectively that he had participated in procuring false material for tax returns [1]. After taking instructions during cross-examination, Barrett J applied the statutory two-stage procedure in s.128. He found there were reasonable grounds for the objection because Commonwealth taxation and criminal law made the alleged conduct at least prima facie unlawful [3-4]. The judge then examined the three matters set out in s.128(5): whether the evidence may tend to prove an Australian offence; whether it tended to prove a foreign offence; and whether the interests of justice required the witness give the evidence. The court concluded all three were satisfied, principally because the financial and taxation records were central to resolving the partnership dispute and the plaintiff's credit was in issue [5-9]. No countervailing 'greater evil' was shown, and because the court was empowered to grant a protective certificate under s.128(7) that would protect the witness from use of the evidence in later proceedings in New South Wales (except for falsity), the judge required the witness to answer and ordered that a Form 1 certificate be issued attached to the transcript [11-13]. Cross-examination was to continue [13].
1 cited instrument linked from this judgment.
The decision turns directly on the statutory structure of s.128 of the Evidence Act 1995 and the judge's assessment of the 'interests of justice' component of s.128(5)(c).
Step 1, reasonable grounds: s.128(2) requires the court to first determine whether there are reasonable grounds for the objection. Barrett J examined Commonwealth law, notably s.8C of the Taxation Administration Act 1953 (offence to not give information as required) and the Criminal Code provisions treating attempts, aiding and abetting and conspiracy as equivalent offences, and concluded the plaintiff's conduct could, at a prima facie level, be contrary to those provisions; accordingly reasonable grounds existed for the objection [3-4].
Step 2, s.128(5) triage: if reasonable grounds exist, s.128(5) directs the court to consider three matters. Barrett J answered them as follows:
Step 3, exercise of discretion and protective certificate: having found s.128(5) satisfied, Barrett J considered whether he should exercise the discretion not to require the evidence. He concluded that the only reason to refuse in those circumstances would be some greater evil beyond exposure to incrimination or penalty. But s.128(6)-(7) contemplates that where evidence is required, a protective certificate will be issued, and therefore the risk of incrimination in New South Wales proceedings is removed. No other greater evil appeared. Consequently he exercised his discretion to require the evidence and to issue the certificate in Form 1, attaching a transcript as per practice [11-13].
In short, the evidence was central to resolving the dispute and the statutory protection meant compelling the evidence would not unfairly expose the witness in the NSW context, so the balance of the 'interests of justice' favoured requiring the answer.
Before this ruling, the statutory framework for compelled answers with protection under s.128 was already established. The judge relied on existing authorities for interpreting 'interests of justice' (Versace v Monte and In the Marriage of Atkinson) and appellate guidance on the ambit of the interests enquiry (Cureton v Blackshaw and R v Collisson).
This decision applies those authorities to a partnership/taxation context and exemplifies the approach: 'interests of justice' is primarily about achieving a just and informed determination of the current litigation, particularly where evidence is central to issues and the witness's credit is contested [7-9]. It emphasises that the availability of a protective certificate (s.128(7)) neutralises the risk of incrimination as a ground for refusing to require evidence, leaving only other, clearly identified public-policy harms capable of tipping the balance against compelling answers [11]. Practitioners should therefore expect courts to require incriminating evidence where it is central to resolving civil disputes, unless some significant countervailing harm exists.
"I record therefore that I am satisfied that there are reasonable grounds for the objection taken under s.128(1) of the Evidence Act." [4]
"Such guidance as there is in the case law ... the interests of justice are to be approached by reference to the proper and just determination of the current proceedings." [7]
"The ways in which receipts and revenues ... will be very material to and are likely to play a significant part in the fully informed and just determination of the controversy between the parties." [9]
"The outcome, therefore, is that the plaintiff will be required to give the evidence ... and a certificate under s.128(7) will be given to him..." [12]
This decision is directly relevant where:
Practitioners should expect courts to compel answers where the information has a direct and substantial bearing on the outcome of the litigation and the protective certificate is available to mitigate the witness's risk.
Barrett J expressly anchored his approach to earlier authorities (Versace, Atkinson, Cureton, Collisson and Lewis v Nortex), treating them as guiding how to construe 'interests of justice' and the role of evidence centrality and reliability in the decision under s.128 (paras 7-10). The judgment is itself procedural and concise; it applies established principles rather than creating novel doctrinal shifts. Later decisions considering s.128 will look to this ruling as an instance where courts compel incriminating evidence when it is central to the proceedings and no countervailing public-policy harm is shown, reinforcing the default posture that s.128 protection is not a licence to withhold material evidence that is crucial to the just determination of the case.
Overall, Kang-Kem v Paine provides a clear procedural application of s.128: where incriminatory evidence is material and central to civil proceedings, and no substantial countervailing harm exists, courts will require answers and issue protective certificates to secure the just determination of the litigation [4, 7-13].
CITATION : Kang-Kem v Paine [2003] NSWSC 916 HEARING DATE(S) : 08/10/03, 09/10/03 JUDGMENT DATE : 9 October 2003 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Witness required to give evidence. Section 128 certificate given.
CATCHWORDS : EVIDENCE - witness objects to giving evidence on ground of tendency to incriminate him - whether reasonable grounds for objection - whether criteria in s.128(5) satisfied - requirements of "interests of justice" considered - central role of evidence in determining parties' dispute LEGISLATION CITED : Evidence Act 1995, s.128 In the Marriage of Atkinson (1997) 136 FLR 347 Cureton v Blackshaw Services Pty Ltd [2002] NSWCA 187 CASES CITED : Lewis v Nortex Pty Ltd [2002] NSWSC 1192 R v Collisson [2003] NSWCCA 212 Versace v Monte [2001] FCA 1572 PARTIES : Kem Weichoreak Kang-Kem - Plaintiff Marilyn Jean Paine - Defendant FILE NUMBER(S) : SC 4091/03 COUNSEL : Mr J.T. Johnson - Plaintiff Mr J.E. Thomson - Defendant SOLICITORS : Harris Wheeler - Plaintiff Sparke Helmore - Defendant
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
4091/03 - KEM WEICHOREAK KANG-KEM v MARILYN JEAN PAINE & ANOR
1 In the course of cross-examining the plaintiff yesterday afternoon, Mr Thomson, counsel for the defendant, asked him a question about a document he identified as having been sent or given by him to an accountant for the purpose of preparation of the defendant's income tax tax return by the accountant. Objection was taken by Mr Johnson, counsel for the plaintiff, by reference to s.128 of the Evidence Act 1995, that is, on the ground that the answer might tend to prove that the witness had committed an offence under an Australian law. The apprehended offence consists, in substance, of attempting or conspiring to procure the inclusion of false information in a tax return knowing it to be false, or perhaps aiding and abetting such conduct. 2 Mr Johnson sought and, with the concurrence of Mr Thomson, I granted leave to take instructions from his client in the midst of cross-examination as to whether he wished to maintain the objection that had been taken on his behalf. The objection is maintained and I must therefore follow the procedure laid down by s.128 of the Evidence Act. 3 The first task is that imposed by s.128(2), that is, to decide whether there are reasonable ground for the objection. That entails a brief consideration of the provisions of Commonwealth law. It is sufficient, for present purposes, to refer first to s.8C(1) of the Taxation Administration Act 1953 (Cth) which makes it an offence, among other things, not to give information to the Commissioner of Taxation in the manner in which it is required under a taxation law to be given. Section 8C(2) says that an offence under s.8C(1) is an offence of absolute liability so that under s.6.2 of the Criminal Code a defence of mistake is not available. Reference should also be made to Pt 2.4, Div 11 of the Criminal Code which makes an attempt to commit an offence the equivalent of the offence itself and deals in like manner with aiding and abetting, incitement (or, as the Code puts it, "urging") and conspiracy. 4 It seems to me that the conduct of the plaintiff is, at a prima facie level, at least capable of being regarded as contrary to these legislative provisions. I record therefore that I am satisfied that there are reasonable grounds for the objection taken under s.128(1) of the Evidence Act. I must therefore continue in one of two ways. I must proceed under s.128(2), unless I am satisfied as to all three matters specified in s.128(5), in which event I have a discretion to proceed in the way that s.128(5) specifies. 5 The first matter to which s.128(5) directs attention is whether the evidence concerned may tend to prove that the witness has committed an offence against or arising under or is liable to a civil penalty under an Australian law. Having regard to the provisions of Commonwealth taxation law to which I have referred, I am satisfied that that question must be answered in the affirmative as regards the particular evidence sought to be adduced from the plaintiff. 6 The second question posed by s.128(5) is whether 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. Since we are here dealing with actions which may have assisted or constituted fraud or evasion as against the Commonwealth revenue authority, I am satisfied that the evidence in question does not have this tendency. 7 The final question under s.128(5) is whether the interests of justice require that the plaintiff give this evidence. Such guidance as there is in the case law as to that aspect of the enquiry suggests that, in the first instance at least, the interests of justice are to be approached by reference to the proper and just determination of the current proceedings. That seems to me to be the basis on which Tamberlin J proceeded in Versace v Monte [2001] FCA 1572 at paragraph 11. The approach of the Full Family Court in In the Marriage of Atkinson (1997) 136 FLR 347 was the same. The court there emphasised the importance of the provision by parties to matrimonial property settlement disputes of full and accurate information about their financial circumstances. The court therefore entertained "not the slightest doubt" that the interests of justice demanded that the husband give the evidence that he objected to giving about his income sources, which it appeared may have involved illegal gambling. 8 I also have guidance from the Court of Appeal and the Court of Criminal Appeal on the ambit of s.128(5)(c) and the considerations relevant to a decision as to where the interests of justice lie. The cases to which I refer are Cureton v Blackshaw Services Pty Ltd [2002] NSWCA 187 and R v Collisson [2003] NSWCCA 212. In the former, Sheller JA, with whom Meagher and Beazley JJA agreed, observed that in this particular context the interests of justice should be construed broadly and encompass, in a particular case, questions going to the credit of the particular witness. In the Collisson case, the Court of Criminal Appeal held that the reliability of the particular evidence was a factor going to a proper determination of where the interests of justice lay. It was decided that the trial judge had properly declined to regard s.128(5)(c) as satisfied where the evidence, being evidence of an accomplice, was inherently unreliable. It might be said by similar reasoning that the greater the tendency of the evidence to play a significant part in the reaching of a proper decision, the more its reception is required in the furtherance of the interests of justice. 9 The present dispute has, as its centre, the question whether the plaintiff and the defendant carried on the restaurant business in partnership or whether, as the defendant contends, she was the sole proprietor. The ways in which receipts and revenues from the business were dealt with in books of account and in taxation returns will be very material to and are likely to play a significant part in the fully informed and just determination of the controversy between the parties. Applying the words in the Atkinson case, I would say that the interests of justice, as they apply in this case, demand that the plaintiff give the evidence he objects to giving about the conveying of instructions to the accountant about income from the business. In addition, it has been clearly indicated already that the plaintiff's credit will be put in issue. Any part he may have played in promoting the filing of false taxation returns will be material to that. Bearing in mind what was said by the Court of Appeal in the Cureton case, this is another factor pointing towards a positive decision in relation to s.128(5)(c). 10 In summary, I am satisfied that the conditions in s.128(5) are fulfilled. That being so, the opening words of s.128(2) have the result that, of the two paths resulting from the bifurcation referred to by Hamilton J in Lewis v Nortex Pty Ltd [2002] NSWSC 1192, the path I must follow is that laid down by s.128(5), so that I must consider whether to exercise the discretion conferred by that section. 11 Given the positive conclusion already reached under s.128(5)(c) as to the requirements of justice, any decision to exercise the s.128(5) discretion against requiring the witness to give the answer would, it seems to me, have to proceed from some clearly seen concern that a greater evil of some kind would result from the giving of the evidence. Since exercise of the discretion in favour of the adducing of the evidence must, by s.128(6), be accompanied by a protective certificate, the possibility of exposure of the witness to incrimination or penalty must be disregarded in the search for any such greater evil and, since no other evil has been suggested or is apparent, I conclude that there is none. 12 The outcome, therefore, is that the plaintiff will be required to give the evidence in question, notwithstanding its tendency to incriminate him or to expose him to a penalty, and a certificate under s.128(7) will be given to him in respect of the evidence so that, at least so far as the law of New South Wales is concerned, that evidence cannot be used against him in any Australian court, except in a criminal proceeding in respect of alleged falsity of the evidence itself. 13 The certificate will be in Form 1 in the schedule to the Evidence Regulation 1995 and, as contemplated by that form, will have attached to it a copy of the relevant transcript. Because the decision of the court to give the certificate has now been pronounced, cross-examination of the plaintiff will continue and the actual issue of the certificate will be dealt with when the transcript becomes available at its conclusion. 14 There were indications yesterday that the same issue might arise in relation to the other aspects of the plaintiff's evidence. That has been confirmed this morning. The appropriate course will be for the objection to be taken by reference to s.128 on each occasion and for me to indicate, after submissions if necessary, whether this present ruling also applies in relation to that new objection. I shall proceed on that basis.
Last Modified: 10/17/2003 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.
Kang-Kem
Paine
Plaintiff required to give the answer(s) despite their incriminatory tendency; court ordered issuance of a s.128(7) protective certificate in Form 1 (to be attached to a transcript); cross-examination to continue (paras 11-13).