Lusty (Examiner) v DER22

Statutory framework 4 Section 7 of the ACC Act establishes the Commission. One of the Commission's key functions is "to undertake special ACC investigations", those being investigations related to "federally relevant crime that the Board [of the Commission] has authorised to occur": s 7A(c) of the ACC Act and the definition of "special ACC investigation" in s 4(1) of the ACC Act. 5 Section 24A(1) of the ACC Act provides that "[a]n examiner may conduct an examination for the purposes of a special ACC operation/investigation." 6 Section 28(1)(a) of the ACC Act relevantly provides that "[a]n examiner may summon a person to appear before an examiner at an examination to…", inter alia, "give evidence." 7 Section 34A(a)(ii) of the ACC Act relevantly provides that "[a] person is in contempt of the ACC if he or she...", inter alia, "when appearing as a witness at an examination before an examiner … refuses or fails to answer a question that he or she is required to answer by the examiner": s 34A(a)(ii) of the ACC Act. 8 Section 34B(1) of the ACC Act relevantly provides that "[i]f an examiner is of the opinion that, during an examination before the examiner, a person is in contempt of the ACC, the examiner may apply to … the Federal Court … [or] the Supreme Court of the State or Territory in which the examination to which the contempt relates is being conducted.": s 34B(1)(a) and (b) of the ACC Act. 9 Section 34B(5) of the ACC Act relevantly provides that if, after considering certain specified matters, including evidence and statements by both the ACC and the person subject of the application, the Court to which the application was made finds that the person was in contempt of the Commission, the Court "may deal with the person as if the acts or omissions involved constituted a contempt of that Court". 10 Section 31 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides as follows: 31 Contempt of Court (1) Subject to any other Act, the Court has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court. (2) The jurisdiction of the Court to punish a contempt of the Court committed in the face or hearing of the Court may be exercised by the Court as constituted at the time of the contempt. 11 The High Court of Australia's power to punish for contempt is to be found in s 24 of the Judiciary Act 1903 (Cth), which provides that: 24 Contempt The High Court shall have the same power to punish contempts of its power and authority as is possessed at the commencement of this Act by the Supreme Court of Judicature in England. 12 Section 31 of the FCA Act does not create an offence of contempt, but rather defines or describes an attribute of judicial power of the Commonwealth vested in the federal courts under the Constitution: Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd (2002) 121 FCR 24; [2002] FCA 949 at [2]. It may be noted in this context that s 30 of the ACC Act creates an indictable offence of failing to answer a question in the examination. The respondent has not been charged with that offence.

Relevant facts 13 The following outline of the relevant facts relating to the respondent's contempt is largely based on the mostly uncontested evidence adduced by the applicant. The respondent gave some brief evidence concerning the circumstances of his contempt. I will deal with the respondent's evidence separately later in these reasons. 14 On [redacted] 2022, the applicant issued a summons to the respondent pursuant to s 28 of the ACC Act. The summons was stated to be for the purposes of a "special ACC investigation" being undertaken by the ACC, pursuant to the Special Australian Criminal Intelligence Commission Investigation Determination (Targeting Criminal Wealth) 2020. 15 The summons required the respondent to appear before an examiner at an examination, at a specified place and time, to give evidence in relation to certain specified matters. Those specified matters included: dealing with money or other property, especially large amounts of cash that were the proceeds or instruments of crime, especially drug trafficking; tax evasion; the use of encrypted communication devices and platforms to facilitate such activities; the ongoing involvement of members and associates of a certain named organisation in such activities; the identities of other persons involved in such activities, including persons located overseas; and the nature and extent of the involvement of those persons. 16 The respondent attended the examination at the specified place and time, though it appears that he was about an hour and a half late. He attended alone and was not legally represented at the time. 17 At the commencement of the examination, the applicant gave the respondent a lengthy explanation of the nature of the examination. The respondent took an oath, and counsel assisting the applicant asked the respondent his name and address. The respondent answered those questions, but in response to the next fairly benign question, the respondent said that he would not be answering any further questions. He declined to explain why he was adopting that position. The applicant explained to the respondent that the consequence of him refusing to answer questions was that he would be committing a contempt and that, in those circumstances, the Commission would commence proceedings against him. The respondent said "okay". 18 The applicant then asked the respondent if he wanted a short break to think about the stance that he had taken. The respondent said that he would like to take a break and indicated that he would speak to his lawyer. There was then a 15-minute adjournment of the examination. After the break, the respondent produced some documents in answer to the summons. He also indicated that he had spoken to his lawyer, that his position had not changed, and that he was going to refuse to answer any more questions. 19 The applicant explained to the respondent why he had been summonsed and asked the respondent whether there was anything that could be said that would change the respondent's mind. The respondent replied "no." The applicant then said that he would "go through the process" and ask the respondent some questions, which he proceeded to do. The respondent refused to answer each of those questions. 20 The statement of charge identifies six specific questions that the respondent was asked. Those questions, omitting the name of the specific motorcycle club that the respondent was said to be associated with, were as follows: Are you a member of the [named] Motorcycle Club? Are members of the [named] Motorcycle Club involved in drug trafficking? Are members of the [named] Motorcycle Club involved in dealing with proceeds of crime, including cash derived from drug trafficking? Do members of the [named] Motorcycle Club use encrypted communications devices to communicate about illegal activities, including drug trafficking? What types of illegal activities is the [named] Motorcycle Club involved in? Has someone else from the [named] Motorcycle Club directed you to not answer questions at this examination? 21 The applicant made it clear to the respondent in respect of each of those questions that the applicant considered the questions to be highly relevant to the Commission's special investigation and that he, the applicant, required the respondent to answer the questions. The respondent refused to answer each question. He declined to explain why he had refused to answer those questions and confirmed that he had taken the opportunity to speak with his lawyer and understood the consequences of his actions. The examination was thereafter adjourned to a date to be fixed. 22 On 4 August 2022, the applicant's solicitor wrote to the respondent and his then-lawyer and invited the respondent to purge his contempt by answering the six relevant questions. The applicant's solicitor did not receive any reply to that letter prior to the commencement of this proceeding. 23 This proceeding was commenced on 23 September 2022. At a case management hearing on 3 November 2022, the matter was set down for hearing on 2 February 2023. There was no indication, or at least no firm indication, at that stage that the respondent proposed to plead guilty. It is common ground that the respondent advised the Commission, through his new solicitor, that he intended to plead guilty to the contempt charge on 28 November 2022. 24 On 19 December 2022, the respondent's new - and current - solicitor, who did not represent the respondent at the time of the examination, advised the applicant's solicitor that the respondent wished to purge his contempt. The applicant then directed that the examination of the respondent was to resume on 20 January 2023, that being the earliest available and suitable date for the Commission. 25 At the resumed examination on 20 January 2023, the respondent took an oath and provided answers to each of the six questions he had previously refused to answer. He denied that anyone had directed him not to answer those questions. The respondent also answered a series of additional questions that were put to him by the applicant. He also produced his mobile phone in response to a request to do so pursuant to s 28(4) of the ACC Act. The examination was again adjourned to a date to be fixed. 26 Evidence adduced in the present proceeding on the applicant's behalf indicated that the evidence that the respondent freely gave during the second examination on 20 January 2023 was relevant to the Commission's special investigation. The applicant maintained, however, that the fact that he had effectively been compelled to bring this proceeding to secure the respondent's compliance with the summons, and the delay occasioned by that process, had caused disruption and inconvenience to the Commission, including requiring it to expend significant human and financial resources that could have otherwise been utilised to perform other important functions. 27 As will be explained in more detail later, despite the respondent's plea of guilty and the fact that he has purged his contempt, there remains no credible or plausible explanation for the respondent's initial refusal to answer the applicant's questions at the first examination.

Relevant Principles 28 There is ample authority, both in this Court and other superior courts, for the proposition that contempt of investigative bodies such as the Commission which arises from a refusal to answer questions as required in an examination is a serious contempt which generally warrants condign punishment. That is because "[t]he effectiveness of the administration of justice depends upon compliance by witnesses with the legal obligation to answer relevant questions", including those asked by an authority which Parliament has empowered to compel answers: see Von Doussa v Owens (No 3) (1982) 31 SASR 116 at 117 (King CJ, with whom Zelling and Wells JJ agreed); see also Hannaford v HH (2010) 205 A Crim R 366; [2010] FCA 1214 at [57]. 29 A conviction of contempt of the sort in question in this case is criminal in nature and the general principles applicable to sentencing for a crime generally apply. In Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 313-314, Kirby P said as follows: A conviction of contempt of Court is a conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the Courts according to law. Thus, in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way: see Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 741. 30 While coercion is sometimes said to be a purpose of punishment for contempt, that is generally not so where, as here, the contemnor has purged his or her contempt: see Anderson v XLVII [2015] FCA 19 at [49(5)] and [50]; DTO21 v Australian Crime Commission [2022] FCAFC 190 at [16] and the cases there cited. 31 The considerations which are generally considered to be relevant to determining the appropriate punishment for contempt include: the seriousness of the contempt proved; whether the contemnor was aware of the consequences of the act giving rise to the contempt; the actual consequences of the contempt; the reason for the contempt; whether there has been any apology or public expression of contrition; the character and antecedents of the contemnor; general and specific deterrence; and denunciation of the contempt. This list of considerations is by no means exhaustive: Hannaford v HH (No 2) [2012] FCA 560 at [73]; Anderson v BYF19 [2019] FCA 1959 at [45]. 32 In more general terms, it is usually necessary to consider the facts and circumstances relevant to the objective seriousness of the contempt in question, as well as the contemnor's subjective circumstances, including his or her background and personal circumstances, antecedents, attitude to the contempt and capacity to meet any pecuniary punishment. 33 The object of deterrence, both specific and general, is a particularly significant consideration in imposing a sentence for a contempt that involves the refusal to answer questions when required to do so: Wood v Galea (1995) 79 A Crim R 567 at 571; Von Doussa at 118 34 There is no prescribed or maximum penalty for a contempt of this nature. The provisions of the Crimes Act 1914 (Cth) relevant to the sentencing of federal offenders do not apply as if contempt was an offence, or otherwise by force of law: see Sage v CFS22 [2022] FCA 1023 at [20]. The range of penalties for contempt generally include imprisonment, a fine, sequestration of assets and a conditional suspension of any term of imprisonment: see Hughes v Australian Competition and Consumer Commission (2004) 247 FCR 277; [2004] FCAFC 319 at [55].

The respondent's evidence 35 The respondent gave some brief oral evidence concerning the circumstances of his contempt. He was cross-examined on behalf of the applicant.

Evidence concerning the contempt 36 The respondent's evidence was, in summary, that officers of the Commission initially attempted to serve him at a worksite where he generally worked. He was not at the worksite at that time and the Commission's officers gave the summons to one of his apprentices. The officers then followed the apprentice back to the respondent's home. The point of that evidence appeared to be to somehow cast aspersions on the manner in which the summons was served. There was, however, ultimately no dispute that the respondent was served with the summons on the day in question. Moreover, as the respondent effectively conceded in cross-examination, a Commission officer had contacted him earlier that day in an attempt to arrange a more discrete and cooperative way in which to serve the summons. The respondent apparently declined, in emphatic and not complimentary terms, to participate in any such arrangement. In all the circumstances, I doubt that much turns on the means by which the respondent was served. 37 After being served with the summons, the respondent took steps to seek legal advice. He spoke on the telephone with a lawyer who was based in Queensland. It may be inferred that the lawyer gave the respondent some legal advice about his obligations in respect of the summons, though the respondent did not disclose the content of that advice. It would appear, however, that the respondent expected the lawyer to attend and appear for him at the examination. 38 The examination was to take place at a courthouse in a regional area of New South Wales. There were hints in the submissions made on the respondent's behalf that the location of the examination was a matter of some significance. The suggestion appeared to be that the secrecy of the examination would not be able to be secured or preserved. Nothing in the respondent's evidence, however, suggested that the location of the examination was a particularly material issue for him. 39 The respondent agreed that he refused to answer the relevant questions put to him at the examination. When asked by his counsel to explain why he refused to answer those questions, his evidence was that his lawyer did not turn up on the day of the examination and that he panicked when he was asked the questions. He said that it took him some time to realise that that was the wrong decision. 40 I found the respondent's explanation of his actions at the initial examination to be somewhat unpersuasive and lacking in credibility. The transcript of the examination was in evidence. There is no hint in the transcript of any panic on the part of the respondent. Rather, the available inference from what was said during the examination is that the respondent had predetermined not to answer any substantive question that was put to him by the examiner. That does not appear to have been a spur of the moment decision brought on by panic. And while it may be accepted that the respondent's lawyer did not attend the examination and that that may have been a matter of some concern to him, the respondent was nonetheless given an opportunity to speak with his lawyer over the telephone during the course of the examination. 41 The advice that the lawyer gave the respondent during the telephone call made during the adjournment of the examination is again not known. Whatever it was, it obviously did not change the respondent's stance. The examiner also fairly and clearly explained to the respondent what would or may occur if he were to maintain his stance in relation to the questioning. That explanation also did not alter his stance. 42 It was submitted on the respondent's behalf that the fact that the respondent produced documents in answer to the summons demonstrated that the respondent did not attend the examination with any pre-determined mindset not to assist the Commission in any way. It may be accepted that the respondent did produce some documents in answer to the summons and that, to that extent at least, he cooperated with the summons. The precise nature and significance of the documents that the respondent produced, however, is not known. More significantly, the fact that the respondent produced documents does not materially detract from the otherwise compelling inference that the respondent had a predetermined and ultimately unwavering determination not to answer any substantive questions during the first examination. 43 There were hints in the submissions made on the respondent's behalf that the respondent's decision not to answer questions may have had something to do with the fact that the respondent feared for his safety. The difficulty, however, is that that was not the respondent's evidence. Nor, as explained earlier, did the respondent suggest to the applicant during the examination that he had any specific fears for his safety. 44 The respondent maintained his intransigence by refusing to answer the questions for a fairly significant period of time. Eventually, however, he decided to purge his contempt and answer the questions. That occurred after he sought and received legal advice from a different lawyer, being the solicitor who currently acts for him. 45 While the respondent had not previously apologised for his conduct at the first examination, he did so in his evidence before the Court. I consider that his apology was genuine and not contrived.

The respondent's subjective circumstances 46 The respondent is [redacted] years old. He is married to his long-term partner with whom he has [redacted] young children. [Redacted]. He has full-time employment in a position of responsibility and has an apprentice. He owns a house, which is subject to a mortgage. He currently resides [redacted]. That is because [redacted]. The respondent also cares for his mother, [redacted]. 47 The respondent candidly admitted that he was previously an active member of the motorcycle club which appeared to be the focus of the examiner's questions. He is apparently regarded as a life member of that club on account of him having been a member for over 10 years. He says, however, that he is no longer an active member with the club or involved with any of its business. [Redacted].

The appropriate punishment 48 The contempt committed by the respondent by his refusal to answer questions when required to do so by the applicant was and is undoubtedly very serious. 49 It remains unclear why he refused to answer the questions. He declined, during the examination, to explain why he was refusing to answer questions. He also failed to give any plausible or credible explanation for his actions in his evidence before the Court. As has already been noted, the available inference in all the circumstances is that the respondent's refusal to answer questions was planned and pre-meditated. It was also deliberate and contumacious. The respondent had access to legal advice and was fairly warned of the consequences of his actions. He nonetheless persisted in his refusal to answer the relevant questions. 50 For the reasons given earlier, a person's refusal to answer questions put to him or her by an examiner at a Commission examination constitutes an inherently serious contempt. A refusal of a person who is lawfully obliged to answer questions put by a Commission examiner has the effect of frustrating and stymying the Commission's lawful processes and significantly undermines the important function that Parliament has bestowed upon the Commission. Such conduct undoubtedly warrants a condign punishment. Were it otherwise, examinees might consider it open to them to thumb their nose at an examiner's questions with impunity, or without any significant repercussions. Deterrence is plainly a particularly important consideration when penalising such a contempt. 51 The seriousness of the respondent's conduct has, however, been significantly mitigated by his early plea of guilty and, perhaps more significantly, by the purging of his contempt. 52 As already explained, the respondent attended a second examination, apparently having received legal advice from his new solicitor, and freely answered the six questions he had previously refused to answer. He also answered further questions put to him by the examiner. It is common ground that the information belatedly provided by the respondent was and is useful to the Commission. While there was some evidence that the delay occasioned by the respondent's actions somewhat hindered the Commission's investigation, I am not persuaded that the hindrance was particularly significant in all the circumstances. 53 The respondent's personal circumstances, as described earlier, also compel some leniency. As indicated, the appellant is a relatively young man. While he has a few minor convictions, mostly for driving offences, he has not previously been found to be in contempt and has not previously engaged in any conduct of the sort for which he is now to be punished. He has a responsible job, a young family and cares for [redacted]. I am satisfied that his family would suffer significant hardship if he were to be incarcerated. 54 I have considered the penalties that have been imposed by the Court for contempts of a similar nature to this contempt. Those cases provide some guidance. Many of them, however, involved cases where the contemnor had not purged his or her contempt, or involved different facts and circumstances, or concerned contemnors who had subjective circumstances which differed in material respects from the respondent's circumstances. Each case must be considered on its own facts and circumstances. 55 The one case that involved fairly comparable facts and circumstances is XLVII. In that case, a contemnor who had initially refused to answer questions at a Commission examination subsequently purged his contempt within a fairly short space of time. White J imprisoned the contemnor for four months, but wholly suspended that sentence on the condition that the contemnor be of good behaviour for 15 months. 56 In my view, a similar sentence or punishment is appropriate in this matter. A sentence of imprisonment is appropriate given the objective seriousness of the contempt in question. I am not satisfied that the imposition of a fine, or an order akin to a good behaviour bond, or any other form of entirely non-custodial punishment, would adequately achieve the important punitive and deterrent objects of a penalty for a contempt of this nature. 57 In my view, having regard to all of the facts and circumstances, including the respondent's personal circumstances, a sentence of four months' imprisonment is warranted. The respondent should, however, be in no doubt whatsoever that, had he not pleaded guilty and purged his contempt, the sentence of imprisonment that I would have imposed would have been significantly longer. 58 While a term of imprisonment of four months is warranted, I am persuaded in all the circumstances that it is appropriate to wholly suspend the respondent's imprisonment on the condition that he be of good behaviour. A suspended sentence is appropriate because the respondent pleaded guilty and purged his contempt at a relative early stage. He thereby demonstrated his willingness to facilitate the course of justice. I am also persuaded that the respondent's subjective circumstances compel a degree of leniency in the sentence. 59 While the suspension of a sentence of imprisonment involves a degree of leniency, as White J pointed out in XLVII, a suspended sentence is nonetheless a real punishment: XLVII at [61] and the cases there cited. There is also no doubt that the Court has the power to impose a suspended sentence when imposing a penalty for a contempt of the sort in question in this case: XLVII at [60] and the cases there cited. 60 I accordingly convict the respondent of contempt of the Commission and sentence him to imprisonment for four months. That sentence of imprisonment is to be wholly suspended subject to the following conditions: first, that he be of good behaviour for a period of 12 months, commencing on 2 February 2023; second, that he notify the applicant within seven days of any change from his current residential address; and third, that he appear in this Court if called upon to do so, should it be alleged that he has breached any condition of the suspension. The respondent must also pay the costs of and incidental to this application. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney.