Martin v Hillier

Grounds for leave to appeal and documents relied upon 7 In support of her application, the applicant reads the affidavit of Stefanie Magliani, sworn 9 March 2022 ("Magliani affidavit"). Exhibit SM-1 to that affidavit are Anderson J's reasons delivered 3 March 2022. 8 The proposed notice of appeal, upon which the applicant relies should leave to appeal be granted, contains 11 grounds and is exhibit SM-2 to the Magliani affidavit. When the matter was called on, the applicant informed the Court that the applicant pressed only grounds 8, 9 and 10 of the proposed notice of appeal: Transcript dated 15 March 2022, p 2, lines 29 - 31. 9 In opposition to the application for leave to appeal the respondent to this application ("respondent"), who is the applicant in the main proceedings, also relied on the Magliani affidavit.

History 10 The issue of production of the Xero database has an extensive history in the main proceedings. That history is irrelevant to my consideration of the merits of the application for leave to appeal against the interlocutory orders of Anderson J made 3 March 2022, however it is relevant to orders that may be made for the production of the Xero database. 11 Charlesworth J has primary conduct of the main proceedings. 12 On 25 June 2021, her Honour made orders for production of the Xero database and published reasons: Hillier v Martin (No 4) [2021] FCA 710 ("Hillier (No 4)"). Her Honour held that the Xero database constituted a single "document" and was both relevant and subject to production: Hillier (No 4) [31], [41], [63]. Her Honour made orders requiring the applicant in these proceedings (ie the respondent in the main proceedings) to produce the Xero database to the applicant in the main proceedings by granting "read only access" to it. That access was to be by way of log in details and password. 13 An application by the applicant in these proceedings for leave to appeal against her Honour's decision in Hillier (No 4) was heard by Anderson J on 6 August 2021 and dismissed on 12 August 2021: Martin v Hillier (No 2) [2021) FCA 958. 14 On 27 August 2021, the applicant resisted production of the Xero database by claiming legal professional privilege. On 28 September 2021, Charlesworth J noted that the applicant in these proceedings had not complied with her Honour's orders made on 25 June 2021 for production of the Xero database and that time for compliance with that order had been extended to 27 August 2021. 15 On 8 September 2021, the applicant in these proceedings again resisted production of the Xero database, this time claiming privilege against self-incrimination. In support of that claim, her solicitor, Stephen Bradley Williams ("Mr Williams"), affirmed an affidavit on 8 September 2021 ("11th Williams affidavit") deposing to the applicant's claim for the privilege. 16 At a hearing on 28 September 2021, before Charlesworth J, her Honour ordered that the applicant in these proceedings remove and redact the material, the subject of legal professional privilege from the Xero database, and then return it in redacted form, so as to make the material not the subject of a claim for legal professional privilege available to the applicant in the main proceedings. 17 At the same hearing, her Honour ruled that the material filed by the applicant in support of her claim for privilege against self-incrimination as a basis to resist the production of the Xero database, was insufficient: Transcript dated 28 September 2021, p 109, line 21 - p 110, line 29. 18 On 8 October 2021, the applicant in these proceedings filed an interlocutory application in which she sought an order that the order for the production of the Xero database be stayed pending resolution of her claim for privilege against self-incrimination ("8 October interlocutory application"). That same day, Mr Williams affirmed a further affidavit ("12th Williams affidavit") in which he deposed as to further material to, in his words, "... substantiate and particularise the grounds upon which (the applicant) claims the privilege against self-incrimination and upon which she therefore declines to produce the Xero document ...": 12th Williams affidavit [6]. 19 In the 12th Williams affidavit, Mr Williams deposes to his instructions that the applicant has a "real apprehension" that providing access to the Xero database exposes her to risk of incrimination: 12th Williams affidavit [7], He continues at [9] by deposing as to the basis upon which he regarded his instructions as true. 20 On 11 October 2021, at a case management hearing before Charlesworth J, the applicant, as first respondent in the main proceedings, by her Counsel, confirmed to her Honour that the only issue that remained in relation to the production of the Xero database was the privilege against self-incrimination: Transcript dated 11 October 2021, p 14, line 6. 21 A further affidavit affirmed by Mr Williams on 17 December 2021 ("13th Williams affidavit"), but with paragraphs [9]-[13] redacted, was filed in support of the 8 October interlocutory application. I was provided with an unredacted copy of the 13th Williams affidavit prior to the argument on 15 March 2022. 22 On 14 January 2022, the applicant affirmed and filed an affidavit in support of her claim for privilege against self-incrimination. On 28 January 2022, she affirmed and filed a further affidavit which she also claimed to be confidential in support of her claim for privilege against self-incrimination. As I understand the position, the applicant in the main proceedings has not seen the affidavit affirmed on 28 January 2022, however I note that Anderson J was provided with the affidavit when considering the 8 October interlocutory application. I have also seen it as a part of considering this application for leave to appeal.

The Reasons of Anderson J dated 3 March 2022 23 His Honour set out a brief history of this matter since 6 August 2021 and his involvement in it: Reasons [2]-[4], noting that on 6 August 2021 he heard an application brought by the applicant in these proceedings for leave to appeal from the interlocutory decision of Charlesworth J, in Martin v Hillier (No 2), in which she sought to avoid discovering the Xero database which contained relevant financial records over the Nordberg business. That is the same Xero database which was the subject of his Honour's judgment delivered 3 March 2022 and the subject of this application for leave to appeal. 24 His Honour summarised the background to the application before him: Reasons [5]-[14]. 25 After setting out the background, his Honour set out the relevant principles which apply to a claim for privilege against self-incrimination: Reasons [15]-[19], referring to Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328, 335; Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; 373 ALR 624 at [85], [86] (Moshinsky, Wheelahan and Abraham JJ); Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, 574; Rank Film Distributors Ltd v Video Information Centre [1982] AC 380, 392; Sorby v Commonwealth (1983) 152 CLR 281, 290 and Deputy Commissioner of Taxation v Shi [2021] HCA 22; 392 ALR 1 per Gordon J at [30], [34]. 26 Having considered the applicant's confidential affidavit affirmed 28 January 2022, the 13th Williams affidavit, and applying the principles which he had previously identified, his Honour did not consider there to be a real and appreciable risk that disclosure of the Xero database would incriminate the applicant. His Honour was also not satisfied that there is a likelihood or risk of steps being taken to prosecute her: Reasons [20]. 27 In forming that view, his Honour identified three reasons: Reasons [20]: (a) First, the confidential affidavits do not disclose any information which could reasonably lead to a "real and appreciable risk" of prosecution if the Xero database is disclosed to the applicant. The Xero database merely contains financial records of the Nordburger business, none of which is incriminating on its face; (b) Second, the applicant has not adduced any evidence of any related civil or criminal proceedings on foot, or any evidence disclosing any contact from or interest of any relevant prosecutorial authority. There is no evidence that suggests that there is a possibility or likelihood of any prosecution; and (c) Third, the applicant had not discharged the burden of proof that is required of her in order to enliven the privilege against self-incrimination in respect of the Xero database.

The grounds relied upon for leave to appeal 28 As noted above, the applicant relies on grounds 8, 9 and 10 of the proposed notice of appeal which is exhibit SM-2 to the Magliani affidavit. Those grounds are as follows: 8. His Honour erred in the importance he apparently attached to his finding that the applicant failed to adduce any evidence of any related civil or criminal proceedings and that there is no evidence of a "possibility or likelihood" of prosecution in that such a finding evidences as is (sic) a misapplication of the authorities and leads to the decision being made on an erroneous basis (Judgement para [20]). 9. His Honour erred in failing to expressly determine that there is not a "real and appreciable risk" of prosecution. 10. His Honour erred in his determination that there was not a real and appreciable risk of prosecution and a genuine apprehension on the part of the applicant of such risk.

The applicant's submissions 29 The applicant submits that reading paragraph 20 of his Honour's reasons as a whole, his Honour concluded there had not been a discharge of the burden of proof on two bases. The first being that the disclosure of the information would not give rise to a "real and appreciable risk of prosecution" because it was not incriminating on its face. The second being there was "no real and appreciable risk of prosecution" because there was no evidence before the Court that suggests there is a possibility or a likelihood of any prosecution. The applicant submits that both of those conclusions are subject to sufficient doubt as to warrant there being a grant of leave to appeal: Transcript dated 15 March 2022, p 5, lines 4 - 16.

No real and appreciable risk of prosecution 30 Mr Ower QC referred to a number of authorities, with which I deal with below, but in the course of his submissions, confirmed that the applicant did not take issue with Anderson J's first reason in [20] set out above, that is: The Confidential Affidavits, do not disclose any information which could reasonably lead to a "real and appreciable risk" of prosecution if the Xero database is disclosed to the Applicant. The Xero database merely contains financial records of the Nordburger business, none of which is incriminating on its face. 31 When developing his first point, Mr Ower QC referred to Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 392 ALR 1, and the judgment of Gordon J at [24] where her Honour, when referring to s 128A of the Evidence Act 1995 (Cth) (which deals with self-incrimination privilege in the context of compulsory disclosure of information in connection with a freezing or search order), said: 24. The language used in s 128A is, in large part, the language of the common law. This is not to say that the construction of s 128A may not develop over time. Section 128A is not frozen by reference to the common law. But the central idea captured in s 128A of the Evidence Act - that individuals should not be compelled to incriminate themselves - is for present purposes sufficiently expressed in Rio Tinto Zinc Corporation v Westinghouse Electric Corporation and later authorities. (Footnotes omitted) 32 Her Honour continued at [30] and [34] of her Honour's reasons: 30. What will be necessary to establish whether the information may tend to prove the commission of an offence will vary from case to case. The privilege may be claimed without requiring the person to explain fully how disclosure of the information would bring about the incriminating effect. To require the relevant person to go further would in at least some circumstances annihilate the protection that the section is designed to provide. However, the mere statement by the relevant person that they believe that disclosure of information will tend to incriminate them will rarely be sufficient to protect them from complying with the disclosure order, and it will not do so when other circumstances are such as to induce the court to believe that disclosure of that information will not really have that tendency. (Footnotes omitted) 34. In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a "real and appreciable risk" of prosecution if the relevant information is disclosed. The gist of the privilege is that disclosure of the information "would tend to expose the claimant to the apprehended consequence". The "reasonable grounds" inquiry requires the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person. (Footnotes omitted. Emphasis in original) 33 Next, the applicant referred to Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, 574; 1 All ER 434, and the judgment of Lord Denning: There is the further point; once it appears that a witness is at risk, then "great latitude should be allowed to him in judging for himself the effect of any particular question": see Reg. v. Boyes (1861) 1 B. & S. 311, 330. It may only be one link in the chain, or only corroborative of existing material, but still he is not bound to answer if he believes on reasonable grounds that it could be used against him. It is not necessary for him to show that proceedings are likely to be taken against him, or would probably be taken against him. It may be improbable that they will be taken, but nevertheless, if there is some risk of their being taken-a real and appreciable risk-as distinct from a remote or insubstantial risk, then he should not be made to answer or to disclose the documents. The applicant submits that Anderson J did not conclude that the material did not give rise to a potential contravention of the law. Rather, his Honour concluded in the circumstances, first that the material itself was not incriminating on its face, and second, that the applicant had not satisfied the requirement for there to be evidence of related civil or criminal proceedings on foot. In so doing, the applicant submits that his Honour has erred in requiring too high a threshold in relation to the question of the risk of prosecution in that he did not apply the statements of Lord Denning in Rio Tinto.

No evidence of a "possibility or likelihood" of prosecution 34 The failure to adduce evidence of related civil and criminal proceedings on foot is the second ground relied upon by the applicant. The applicant submits that Anderson J erred in that at [34] in Shi, Gordon J was not restating the propositions by Lord Denning that arose in Rio Tinto but was otherwise endorsing those propositions. 35 On that basis, the applicant submits that taking grounds 1 and 2 together, his Honour erred in requiring too high a threshold in relation to the risk of prosecution by requiring evidence that there is a possibility or likelihood of a prosecution: Reasons [20(2)]. 36 To make good that submission, Mr Ower QC refers to Deloitte Touche Tohmatsu (A Firm) v Sadie Ville Pty Ltd (As Trustee for Sadie Ville Superannuation Fund) [2020] FCAFC 23; (2020) 144 ACSR 1 and a statement in the judgment of Wigney J at [68] when referring to the judgment of Moshinsky J in Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 3) [2018] FCA 1107; (2018) 357 ALR 695 at [110] where his Honour said: … like the primary judge (Sadie Ville v DTT (No. 3) at [110]) I consider that the prospect of any prosecution of the uninvolved partners simply on the basis that, by reason of their partnership with Mr Saayman and any involved partners, they are somehow jointly liable for their offences, is theoretical rather than real. I do not consider that there is a real or appreciable risk of the uninvolved partners being prosecuted for any of the relevant offences on that basis. Indeed, the suggestion that uninvolved partners who had nothing whatsoever to do with the relevant engagements, or even knew anything about them, faced any risk of being prosecuted for a serious offence, such as the offence created by s 1041E and s 1311 of the Corporations Act, which carries a potential penalty of imprisonment, simply on the basis that they were partners of those who carried out the allegedly criminal acts, borders on being fanciful. The primary judge was correct in finding that if there was any risk, it was at best theoretical rather than real. 37 The applicant submits that in accordance with Lord Denning's statement in Rio Tinto, set out above, the circumstances in which the Court would determine that there was no risk of prosecution, are circumstances in which there is literally no knowledge or no involvement in any of the criminal offences and there is no requirement of showing that there is no prosecutorial authority being required to consider the matter. 38 On that basis, and given the confidential affidavit material filed by the applicant and Mr Williams, the applicant submits that the test as to whether the privilege is available is satisfied, and that in not being so satisfied, Anderson J erred in not giving effect to what is a low threshold.

Legal principles - leave to appeal 39 The legal principles that apply to the granting of leave to appeal against an interlocutory decision are not in doubt. In Ensham Resources Pty Limited v Aioi Insurance Company Limited [2012] FCAFC 191, (2012) 209 FCR 1, 11 [58], Lander and Jagot JJ, after referring to Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, said: The circumstances in which leave to appeal could be granted from an interlocutory decision are well-known:. Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (Décor). The applicant must establish that the decision at first instance is attended with sufficient doubt to warrant it being reconsidered by the Full Court and that substantial injustice would result if leave were refused supposing the decision at first instance to be wrong. Both limbs must be satisfied.

Consideration 40 The first point the applicant makes is that his Honour did not conclude that the material did not give rise to potential contravention of the law, but concluded the material itself was not incriminating on its face. With respect to that submission, that is contrary to what Anderson J says in [20(1)]. It is apparent that in that paragraph of his reasons, his Honour is applying [34] of Gordon J's judgment in Shi, that is to say, his Honour has found that the confidential affidavits do not disclose any information which could reasonably lead to a "real and appreciable risk of prosecution" if the relevant information is disclosed. So much so is evident from the fact that the Xero database, which is the document to be disclosed, contains financial records, none of which are incriminating on their face itself. As I have noted, that conclusion as to no incriminatory material, was accepted by the applicant. 41 That being the case, the question then became whether there was any evidence of any related civil or criminal proceedings on foot which may or might give rise to the possibility or likelihood of prosecution, notwithstanding that the confidential affidavits do not disclose any information which could reasonably lead to a "real and appreciable risk of prosecution". His Honour found that there was no evidence that suggests such a possibility or likelihood of any prosecution. In so doing, his Honour did not consider the Xero database alone, but in view of his finding of no 'real and appreciable risk of prosecution' on the documents themselves, his Honour was considering whether there was any other evidence that might give rise to the possibility and likelihood of prosecution. As is apparent, his Honour found there was none.

Conclusion 42 The applicant has not established that the decision at first instance is attended with sufficient doubt to warrant it being considered by the Full Court. Although, undoubtedly, questions of privilege against self-incrimination are important matters, on the material provided to Anderson J and to the Court on this application, production of the Xero database to the applicant in the main proceedings, which is the subject of this application, would not, in my view, give rise to a substantial injustice. 43 It is for these reasons that the application for leave to appeal is dismissed. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan.