Plaintiff v Defendants

For the Ninth, Tenth, Eleventh and Thirteenth Defendants

1 Australian Property Custodian Holdings Limited (in liquidation) (receivers and managers appointed) (controllers appointed) (APCH), the plaintiff, makes claims against seven of its former directors and certain other parties, seeking to recover some $30m that was paid out of assets it held on trust as a fee to companies controlled by Mr Lewski, one of its directors. Recently, ASIC commenced civil penalty proceedings in the Federal Court of Australia against APCH (the plaintiff in the Supreme Court proceeding) and five of its directors: Messrs Lewski, Butler, Jaques, Clarke, and Dr Wooldridge (the first five defendants in the Supreme Court proceeding) (I will refer to these directors as the "Common Directors"), alleging that each of the Common Directors have breached their duties under the Corporations Act 2001 (the Act). ASIC's proceedings relate to the same transactions which are the subject of this Supreme Court proceeding.

2 The Common Directors seek a stay of the Supreme Court proceedings until the hearing and determination of the Federal Court proceedings, or (alternatively) that if a stay is not granted that the Common Directors be excused from filing a defence that raises positive allegations.

3 APCH concedes that if a stay is granted in favour of the Common Directors then the proceedings against the other defendants should also be stayed, as it would not be appropriate to hear the case against any of the defendants separately.

(a) Should a stay of the Supreme Court proceeding be granted, and (if so) on what grounds?

(b) If a stay is not granted, should the common defendants (and other defendants) be excused in limine from filing a defence to the extent that compliance with the Rules may have the tendency to expose them to civil penalty or criminal proceedings?

5 APCH is the responsible entity of the Prime Retirement and Aged Care Property Trust (the Prime Trust), a managed investment scheme subject to regulation under the Corporations Act 2001. The Prime Trust was constituted as a unit trust. APCH, as trustee of the Prime Trust, carried on business as the owner of certain retirement villages and operated a number of other properties and businesses. APCH carried on business in its own right as well as undertaking the operations and functions of the responsible entity of the Prime Trust.

6 At various times, Dr Wooldridge, Messrs Clarke, Lewski, Butler, Jaques, Powell, Hancy, and Rodaway (the first to eighth defendants respectively) were directors of APCH. Mr Lewski was the effective owner of APCH.

7 In 2006, the constitution of the Prime Trust was amended by the board of APCH to provide for the payment of a listing fee to APCH, in its personal capacity, if the units of the Prime Trust were listed on the ASX.[1] The listing fee was 2.5 per cent of the gross asset value of the fund at the time immediately before listing. The unit holders were not involved in, and did not approve of, the variation to the constitution of the Prime Trust.[2]

8 In August 2007, the units in the Prime Trust unit trust were listed on the ASX,[3] and APCH in its own right became entitled to (and was subsequently paid) a listing fee of some $33m out of the assets of the trust under the terms of the amendment to the constitution.

9 In essence, the Supreme Court proceedings and the civil penalty proceedings complain about the same transactions and conduct. In substance, they both complain about the amendment that was made to the constitution of the trust, which provided for the listing fee to be paid to APCH in its own capacity if the trust units were listed on the stock exchange, and (secondly) the payment of that fee of some $33m out of the trust assets to APCH when the trust units were subsequently listed.

10 Both proceedings allege that APCH breached its statutory duties under the Act in amending the trust to the detriment of the unit holders, and that relevant directors also breached their duties under the Act in effecting the amendment. Both proceedings also allege that APCH, inter alia, breached its statutory duties under the Act in paying itself the fee out of the assets of the trust and that the relevant directors breached their statutory duties in assisting in the payment.

11 In the case of the payment of the listing fee to APCH, both proceedings against the relevant directors rely on a breach of the same provision of the Act, s 601FD, which regulates the duties of officers of a responsible entity. In the case of the variation, the Supreme Court proceeding relies on a breach of s 610FC by the directors, whereas the civil penalty proceedings relies on a breach of s 601FD. The facts supporting each are in substance the same.

12 The proceedings part ways in that the Supreme Court proceedings seek to recover the listing fee of $33m, whereas the civil penalty proceedings seek pecuniary penalties and banning orders against the Common Directors.

13 The Supreme Court proceedings were commenced on 5 March 2012 by the liquidator in the name of APCH. The secured creditors of APCH claimed that the choses in action being pursued by the liquidator were subject to their charge over the assets and undertaking of APCH and thus rightly under the control of the receivers they had appointed under their securities. Justice Ferguson determined that the choses in action asserted by APCH in this proceeding constitute property of APCH charged in favour of the appointers of the receivers. Accordingly, following the delivery of judgment in that proceeding,[4] on 4 April 2012 the receivers assumed control of this proceeding.

14 On 3 August 2012, a statement of claim was filed and served in this proceeding by APCH seeking as against all 15 defendants an order for compensation pursuant to ss 1317H and 1317HA(1), (2), (3), (4) and/or 1325 of the Corporations Act 2001. In addition, the plaintiff also seeks against the:

(a) first to ninth defendants, damages, or (alternatively) payment of the sum of $32,939,947 (plus 10% on account of GST) (the Listing Fee), or (in the further alternative) equitable compensation.

(b) ninth to eleventh defendants, an order setting aside ab initio the Supplemental Deed of Variation (No. 7) of the Constitution dated 22 August 2006, an account of its respective dealings and transactions with regard to the Listing Fee, further or alternatively, an account of all profits made by the tenth and eleventh defendants from the receipt of any part the Listing Fee and further or alternatively, equitable compensation.

(c) twelfth to fifteenth defendants, further or alternatively, damages and or equitable compensation.

15 On 9 August 2012, Ferguson J made directions for the hearing of the applications by the defendants to be relieved of their obligation to file a defence to the statement of claim. Those applications were fixed for hearing on 14 September 2012. On 21 August 2012, ASIC commenced proceedings in the Federal Court of Australia against APCH (the plaintiff in the Supreme Court proceeding) and five of its directors: Messrs Lewski, Butler, Jaques, Clarke, and Dr Wooldridge (the first five defendants in the Supreme Court proceeding).

16 As a result of that proceeding being instituted in the Federal Court of Australia several applications have been made in the Supreme Court proceeding. By a summons dated 11 September 2012 the plaintiff, APCH, sought an order that the Supreme Court proceeding be transferred to the Federal Court of Australia pursuant to s 5(1)of the Jurisdictions of Courts (Cross-vesting) Act 1987, or s 1337H of the Corporations Act 2001.

17 On 21 September 2012, Mr Lewski applied in the Federal Court to have the civil penalty proceeding transferred to the Supreme Court. On 24 September 2012, Murphy J of the Federal Court of Australia refused the application and fixed the civil penalty proceedings for hearing on 1 May 2013 on an estimate of four weeks. APCH no longer pursues a transfer of the Supreme Court proceedings to the Federal Court.

18 In the proceedings before me, Mr Lewski took a leading role in making submissions. A great many of these were relied upon by the other defendants.

Part I - Application for stay of proceedings

19 The Court has inherent power to stay proceedings in the interests of justice (either on its own motion or on the motion of a party), which power is recognised in s 30 of the Supreme Court Act 1986 (Vic). The decision whether or not to grant a stay of proceedings is a matter of judicial discretion.[5]

20 In Rochfort, Sugerman ACJ recognised the "fundamental principle that a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court, subject only to an exercise of judicial discretion on proper grounds as part of the Court's inherent powers ...".[6] Sugerman ACJ also observed that "while stays could be granted in the interests of justice, restraint of the plaintiff's right was a grave matter requiring the existence of proper grounds."[7]

21 In Websyte, her Honour exhaustively and carefully reviews the relevant authorities since Rochfort. I respectfully refer to and adopt this review. With one exception, these authorities accept that the relevant guidelines applicable to a stay are those set out by Wooton J in McMahon v Gould, as follows:[8]

(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 at 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 at 905);

(d) Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 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 at 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 at 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 at 904). I return to this subject below;

(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 at 904-5);

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

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

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

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

(v) whether the defendant has already disclosed his defence to the allegations (Caesar v Somner at 932; Re Saltergate Insurance Co Ltd at 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 at 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, eg, setting down for trial, and then stayed (Beecee Group v Barton).

22 Consequent upon the High Court decision in Reid v Howard (No 2),[9] several cases raised the issue that where a defendant to a civil proceeding was also defending criminal proceedings the so called "right of silence" may not be given sufficient weight in the McMahon principles if a stay of the civil proceeding was sought by the defendant.[10] Recently, however, the Court of Appeal in De Simone v Bevnol Constructions and Developments Pty Ltd held that despite the view expressed since Reid (that too little weight is given to the practical as well as the legal prejudice to the accused and to the primacy of criminal proceedings in our justice system), the McMahon guidelines remain firmly established and have not been modified by an appellate court.[11]

23 In Trade World Enterprises Pty Ltd v Deputy Commissioner of Taxation (Cth), Chernov JA (with whom Nettle and Redlich JJA agreed) said:[12]

The principles applicable to the exercise of discretion on an application for adjournment or stay of civil proceedings, where it is said that there are pending against the defendant criminal charges that traverse essentially the same factual matters that arise in the civil proceeding, are conveniently set out in the decision of Young, C.J. in Philippine Airlines v. Goldair (Aust) Pty Ltd. Essentially, they require that such a claimant establish, at least, that real injustice would result if the civil proceedings were not stayed or adjourned until the determination of the criminal proceedings.

24 According to McMahon, the "overriding consideration" in deciding whether to exercise the inherent jurisdiction of the court to grant a stay of proceedings is always what "the interests of justice" require in the circumstances.[13]

25 APCH referred to many cases[14] that show that the mere existence of privilege, often referred to as the "right to silence", is not enough to warrant a stay.

26 Mr Lewski accepts that prima facie APCH is entitled to have its action tried in the ordinary course of procedure and business of the Court. Also, as the authorities establish, it is a grave matter to interfere with this entitlement by a stay, which requires justification on proper grounds. The burden is on Mr Lewski to show that it is just and convenient that APCH's ordinary rights should be interfered with.

27 Mr Lewski relies on several grounds which he says does justifies a stay of APCH's proceedings.

Mr Lewski's concern that ASIC may take criminal proceedings against him

28 Mr Lewski says that he is concerned that ASIC may take criminal proceedings against him for, amongst other things, breach of statutory duties owed to APCH.

29 Mr Lewski concedes that he has not sworn an affidavit in support of this concern or his application generally. Rather, his solicitor Samuel Maxwell Bond has affirmed an affidavit. Mr Bond affirms that Mr Lewski has informed him that he has elected not to depose to matters himself because he wishes to take all possible steps to maintain his privilege against self-incrimination and penalty privilege. Mr Bond says that Mr Lewski has informed him that he does not want to expose himself to potential cross-examination on the contents of an affidavit he might swear which may lead to an allegation that he has waived such a right.

30 Mr Bond produces the s 19 notice given by ASIC to Mr Lewski and refers to his subsequent examination by ASIC that occurred on 16, 17, 18 and 24 July 2012. Mr Bond refers to a direction issued by ASIC to both himself and Mr Lewski that they not disclose the questions put or answers given in the examination process or discloses the documents put to them. Mr Bond refers to the statement of claim filed by APCH on 3 August 2012. Mr Lewski directed my attention to the allegation by APCH that Mr Lewski is also alleged to have contravened statutory duties "pursuant to ss 108, 181, 182, 183 and 601FD of the Act." Mr Bond says that the particular sections of the Corporations Act there referred to (and specifically 83(e)) are precisely the sections in relation to which ASIC has been conducting its investigations as described in the s 19 notice.

31 Mr Bond says that by letter dated 9 August 2012, he enquired of Ms Klemis of ASIC as to the intentions of ASIC in prosecuting Mr Lewski in respect of civil and penalty provisions or criminal charges. Mr Lewski took me to ASIC's response of 10 August 2012, where ASIC said:

Your letter requests that ASIC advise your client whether ASIC currently holds an intention to pursue prosecutions against him in relation to either civil penalty proceedings and/or criminal proceedings.

ASIC's current investigation, as described in the notice served on your client pursuant to section 19 of the ASIC Act, is currently ongoing and no decision has been made by ASIC regarding what, if any, action should be taken.

32 After reading that extract from the letter, Mr Bick QC, senior counsel for Mr Lewski made the statement, without any further explanation or elaboration, that it is Mr Lewski's concern that ASIC may take criminal proceedings against him for "perhaps, amongst other things, breach of statutory duties owed by him to [APCH]."

33 In response, APCH says that soon after the letter from ASIC to Mr Lewski of 10 August 2012, ASIC commenced the civil penalty proceedings. APCH says that there is no evidence of a publicly declared criminal investigation. It says that the failure by ASIC to say that there will be no criminal charges simply does not permit the drawing of the inference which Mr Lewski is attempting to draw.

34 In my opinion, there is merit in APCH's submission. ASIC's institution of civil penalty proceedings does not foreclose criminal proceedings. In fact, the Act contemplates that criminal proceedings may be taken and make provision for the staying of the civil proceedings if the issues overlap. I do not consider ASIC's statement that ASIC had made no decision by 10 August 2012 that it is still contemplating criminal proceedings. Unlike in Re AWB, where I found that criminal proceedings "were on the cards", in this case there is no evidence to support Mr Lewski's concerns other than the fact that the possibility does exist that criminal proceedings might be taken. In Re AWB I considered that "on the cards" meant a reasonable possibility. I do not consider that Mr Lewski has established that there is a reasonable possibility of criminal proceedings being laid against him.

35 Mr Lewski says that APCH will not be prejudiced if the proceeding is stayed. Mr Lewski says that no procedural step has been taken (so the receivers cannot say they stand to lose months or years of wasted effort).

36 APCH says that there is a real potential for such prejudice. APCH says that just as in Silbermann v CGU Insurance Ltd,[15] the longer the proceeding is delayed, the greater the potential detriment to APCH in pursuing its remedies against the defendants.

37 APCH relies on evidence of Paul Cowling, the solicitor for APCH, in his affidavit of 11 September 2012. Mr Cowling swears that he has been informed by Ms Nina Merlino, a solicitor that has the carriage of this proceeding under Mr Cowling's supervision, that an insurance policy in favour of APCH exists that appears to respond to the claims made against the directors in both the Supreme Court and Federal Court proceedings. He says that it appears that the limit of cover under the policy period of 13 July 2006 to 13 July 2007 is $5m per any one loss and in the aggregate. Mr Cowling says that he is informed by Ms Merlino and believes that it appears that there is no sub-limit under the policy for defence costs.

38 Mr Cowling says that the risk of the insurance proceeds being exhausted prior to judgment being obtained in this proceeding is greater if there is a stay of the proceeding until the conclusion of the civil penalty proceeding.

39 In addition, Mr Cowling says that he has been informed by Ms Merlino and believes that, in the public examination conducted by the receivers, Mr Lewski gave evidence that the listing fee payment of approximately $30m made by APCH to entities Mr Lewski controls was paid to Lewski family trusts, and that it is not yet clear what those trusts have done with the entirety of that money. APCH says that it may be necessary for APCH to seek to trace and follow the millions of dollars of investor funds that have passed through the hands of Mr Lewski and his related entities. The longer the trial of this proceeding is delayed, the harder that tracing might be. Potentially, creditors of APCH could be irretrievably prejudiced by the delay.

40 APCH is a defendant in the Federal Court proceeding. APCH says that the issue of whether the directors breached their duties to APCH in relation to the payment of the listing fee arises in both the Federal Court proceeding and this proceeding. APCH says that if that issue is determined in favour of the directors in the Federal Court proceeding, an issue estoppel may arise as between APCH and the directors. In other words, APCH, as party to the Federal Court proceeding, may well be bound by the resolution of that issue. If that is so, the receivers could not then raise the same issue against in the present proceeding against the directors.

41 APCH says that it is doubtful whether the receivers have the ability to participate in the Federal Court proceeding on behalf of APCH to ensure that the issue is resolved in favour of APCH. There is no chose in action being asserted by APCH in that proceeding. Accordingly, APCH says that it will be the liquidators, rather than the receivers, who will assume control of the Federal Court proceeding on behalf of APCH. However, APCH contends that the liquidators of APCH will not have sufficient funds to conduct the Federal Court proceeding on behalf of APCH.

42 APCH argues that if the Supreme Court proceeding is stayed until the conclusion of the Federal Court proceeding, then Supreme Court proceeding may not come on for trial until sometime in 2014, depending on any appeal by the defendants in the Federal Court proceeding. APCH says that the delay in APCH obtaining judgment against the defendants in the Supreme Court proceeding increases the prospect that the assets of the defendants will be dissipated in the meantime.

43 In reply, Mr Lewski (through counsel's submissions) contends that there is no evidence of any prejudice that would be occasioned by the stay of the Supreme Court proceeding until the civil penalty proceedings are heard and determined. He refers to Mr Cowling's evidence and says there is no evidence in support of the fear Mr Cowling expresses.

44 In my opinion, APCH would be prejudiced by a delay. The evidence put forward by Mr Cowling was not contested by Mr Lewski. It appears, therefore, that there is a distinct possibility that the money paid to APCH may be dissipated.

45 Mr Lewski says that there is even a benefit to APCH in a delay, as APCH stands to gain (by s 1317F of the Act) from any findings that might be made in the civil penalty proceedings. Mr Lewski says that if the Court finds that Mr Lewski contravened any of the duties set out in s 601FD of the Act, as is alleged (at paragraph 83 (e) of the statement of claim and paragraphs 28 and 44 of the civil penalty statement of claim) then the Court "must make a declaration of contravention" (per s 1317E(1)(a) and (g) of the Act) in the civil penalty proceeding.

46 APCH says that s 1317E is irrelevant both in this proceeding generally, and on the question whether the present proceeding should be stayed.

47 APCH says that the reference to "the Court" is a reference to the Federal Court, not this Court. APCH says that s 1317E does not apply to this proceeding, because APCH has no standing to seek a declaration under that section. Only ASIC can seek a s 1317E declaration. APCH says that the section is inapplicable in a proceeding for compensation brought by someone other than ASIC.[16] Accordingly, s 1317E is irrelevant both in this proceeding generally, and on the question whether the present proceeding should be stayed. I accept this submission.

If stay not granted, would the proceedings be delayed in any event?

48 Mr Lewski also contends that if a stay is not granted, then the Supreme Court proceedings will be very little advanced as it is likely the Court will only require the defendants to file a limited defence and give limited discovery until the civil penalty proceedings are heard and determined. In other words, if a stay is not granted APCH will not gain much in terms of the advancement of the proceeding.

49 Mr Lewski contends that the claims in the civil penalty proceedings involve alleged dishonesty that expose him to criminal sanction under s 184 of the Act, for example.

50 APCH says that this submissions is based, at least in part, on false premises. While the claims are certainly serious, they are not allegations of dishonesty. APCH says that directors can, and frequently do, act in breach of their statutory and equitable duties without acting dishonestly. APCH contends that the test of whether a director has breached his duty (under s 181 of the Act) to act "in good faith in the best interest of the corporation" and "for a proper purpose" is objective.[17] Dishonesty is not a necessary condition. Similarly, the test of whether a director has improperly used his or her position to gain an advantage for himself or someone else is objective.[18] APCH, in my opinion correctly, submits that an allegation of breach of those sections does not amount to an allegation of dishonesty. Section 184, which contains criminal offences and plainly does incorporate dishonesty, is not alleged in the Supreme Court proceeding and otherwise dishonesty is not alleged against the defendants in the Supreme Court proceedings.

51 The consequences for the defendants of the ASIC proceeding are less severe than if they were being criminally prosecuted. APCH says that this is a relevant factor to consider.

52 Mr Lewski says that as matters currently stand and notwithstanding the similarities in the two proceedings, Mr Lewski will be exposed to the burden of conducting defences in two separate proceedings in two separate Courts with two separate timetables. He says that to require him to do so would expose him to significant costs in time, money, and personal anxiety.

53 APCH responds saying that there is no evidence in support of that proposition. APCH says that nothing in the affidavit sworn by Mr Lewski's solicitor, Mr Bond, on 23 August 2012 speaks of Mr Lewski's anxieties about time, costs, and personal issues, apart from his desire to assert his penalty privilege.

54 APCH says that there is no mention of Mr Lewski's resources to fund the defence of two separate proceedings. APCH argues that that is hardly surprising. APCH says that this proceeding concerns the uncontentious fact that entities closely associated with and controlled by Mr Lewski received $30m of investor funds, in return for which investors received nothing. APCH say that the present case is therefore an even stronger one than Gallaher v Collins, in which Hargrave J held:[19]

Thirdly it was submitted on behalf of the plaintiff that I should infer that it would place strain upon the time and resources of the plaintiff if he is forced to deal with both the civil and criminal proceedings. There was no evidence of this, apart from the general statement of concern in the affidavit sworn by Ms Hua. In my view, this factor is not of any weight in this case.

55 APCH argues that here there is no evidence at all from any defendant of any strain upon any their resources if they are required to deal with both this proceeding and the ASIC proceeding.

56 I accept that a failure to stay this proceeding may impose an additional burden on Mr Lewski to deal with both proceedings, but I am not satisfied that any financial strain would be imposed on Mr Lewski.

57 Mr Lewski says that, importantly, the integrity of the administration of justice is threatened by such a course being allowed to continue ,as the possibility of inconsistent judgments would exist.

This proceeding for benefit of the secured appointor

58 Mr Lewski contends that ASIC prosecutes civil penalty proceedings in accordance with objectives stated in s 1 of the Australian Securities and Investments Act 2001 (Cth). Mr Lewski says that those objectives are directed towards a public benefit and public policy concerns (for example, to ensure confidence in the financial system).

59 Mr Lewski says that (in contrast) the receivers directing the Supreme Court proceeding have one master - the secured appointer. He argues that the fact that receivers who are given control of proceedings (such as in the instant case) also owe duties to the Court and that ancillary benefits may be returned to the general body of creditors does not alter the fact that the civil penalty proceeding is necessarily made in service to a public interest and the Supreme Court proceeding is not.

60 APCH disputes that contention. APCH says that the receivers are appointed as the agent of APCH, not of the secured creditors. APCH says that it is not even correct to suggest that only the secured creditors will benefit from compensation proceedings such as this brought in the name of APCH. All creditors stand to benefit, potentially from the recovery of millions of dollars wrongly paid away to director-related entities. The total quantum of unsecured claims will thereby be reduced. That increases the chance of unsecured creditors obtaining a higher dividend than they otherwise would.

61 In my opinion, Mr Lewski's submissions on this issue have little weight when considering where the interests of justice lie.

62 Mr Lewski claims that if this proceeding is not stayed, then he risks having his entitlement to claim privileges against self-incrimination and exposure to a penalty impinged upon.

63 APCH argue that it is likely that the common defendants have already disclosed their defences to ASIC. APCH says that the common director defendants each gave evidence of having been examined by ASIC in relation to the matters the subject of this proceeding and the ASIC proceeding. APCH says that their defences to the allegations, if any, are likely to have been disclosed in those examinations. APCH says that the fact that the transcripts themselves are not admissible in evidence against the examinees does not detract from the likely fact that ASIC already knows what the defendants' responses to the allegations are.

64 APCH says that Mr Lewski has not explained how a failure to stay the proceeding "risks having his entitlement to claim privileges against self-incrimination and exposure to a penalty impinged on". APCH says that the proceeding can certainly continue without any impact on Mr Lewski's ability to make any legitimate claim for privilege.

65 APCH says that as to Mr Lewski's desire to protect his "right to silence", the cases (cited above) show that this is not sufficient to warrant a stay, nor could there be any sensible suggestion here that an early disclosure of Mr Lewski's defence (if there is one) might lead to witnesses in the ASIC proceeding fabricating their evidence.

66 APCH says that if an occasion does arise in the management of this proceeding where Mr Lewski contends that his privilege against self-incrimination is being threatened, he can make an appropriate application. APCH argues that protections can be afforded as need be.

67 APCH says that, as the cases have recognised, orders for confidentiality in civil proceeding and undertakings by the plaintiff not to disclose material to prosecuting authorities offer a measure of protection against the use of material disclosed in the civil proceedings in criminal proceedings.[20] APCH says that, if need be, APCH offers such undertakings here. Moreover, if necessary, the Court could make the same order as that proposed by French J in WA v Bond Corporation Holdings Ltd (No 2)[21] - namely, that defences be disclosed only to counsel in the first instance.

68 Dr Wooldridge seeks a stay and relies on Mr Lewski's submissions. In addition, Dr Wooldridge says that unless there is a stay, there is a risk of inconsistent findings, wasted costs, and inefficient use of judicial resources.

69 Dr Wooldridge says that APCH relies on these arguments when seeking to transfer the Supreme Court proceedings to the Federal Court to be heard with the civil penalty proceedings.

70 I accept that there is a risk of inconsistent findings and that is a matter that I will take into account. I do not accept that waste or inefficient use of judicial resources have any material weight.

71 Dr Wooldridge says that ASIC's claim in the civil penalty proceeding does raise an allegation of dishonesty. Dr Wooldridge says I should take this into account when assessing the likelihood of criminal proceedings being pursued.

72 Dr Wooldridge says that rather than being of prejudice to APCH, a delay may be of benefit as APCH would be able to rely on s 1317F of the Act, which provides that a declaration of contravention is conclusive evidence of the matters referred to in s 1317E(2), which includes the person that contravened the provision and the conduct that constituted the contravention.

73 Dr Wooldridge contends that the existence of professional adviser parties create difficulties for Dr Wooldridge. He says that there is a real possibility that he will want to bring claims for contribution or apportionment. Dr Wooldridge says that taking such steps would require him to take steps beyond what he would be required to do when facing a civil penalty proceeding.

Submissions of Messrs Clarke, Butler, Jaques, and the other defendants

74 Messrs Clarke, Butler and Jaques adopt the submissions of Mr Lewski and Dr Wooldridge The other defendants contend that if a stay is granted to any other defendant that they also seek a stay.

75 I am not satisfied that Mr Lewski and the other defendants seeking a stay of this proceeding have satisfied the burden imposed on them that it is just and convenient that APCH's right to a civil proceeding should be interfered with. In my view, for the reasons explored above, the defendants have not satisfied me that the overriding consideration of the interests of justice require a stay.

Part II - Applications to be relieved of obligation to file and serve defences

76 On 9 August 2012, Ferguson J ordered that the proceedings be continued as if commenced by writ and made orders for any of the defendants to seek to be relieved of the obligation to file and serve a defence.

77 Dr Wooldridge, Messrs Clarke, Lewski, Butler, Jaques, (the Common Directors); Mr Powell, Kidder Williams Limited and David Williams (the Kidder Williams parties); and Daytree Pty Ltd, Carey Bay Pty Ltd, and Australian Property Administrators (the Lewski companies) seek an order that the requirements of Supreme Court Rules 2005 rr 13.07, 13.10 and 13.12 be dispensed with to the extent that compliance with those rules may have the tendency to expose him directly or indirectly to civil penalty or criminal proceedings in respect of the subject matter of the proceeding.

78 Mr Lewski also seeks an order that liberty be reserved to Mr Lewski to file an amended defence, pleading any additional facts not already traversed in the pleadings after the plaintiff has closed its case.

13.07 Matter which must be pleaded

(1) A party shall in any pleading subsequent to a statement of claim plead specifically any fact or matter which -

(a) the party alleges makes any claim or defence of the opposite party not maintainable; or

(b) if not pleaded specifically, might take the opposite party by surprise; or

(c) raises questions of fact not arising out of the preceding pleading.

(2) In a proceeding for the recovery of land -

constitute a statement of claim, the statement of claim shall describe the land so that it is physically identifiable;

(b) the defendant shall plead specifically every ground of defence on which he relies and a plea that he is in possession of the land by himself or herself or his tenant is not sufficient.

(3) A claim for exemplary damages shall be specifically pleaded with the facts on which the party pleading relies.

13.10 Particulars of pleading

(1) Every pleading shall contain the necessary particulars of any fact or matter pleaded.

(2) Without limiting paragraph (1), particulars shall be given if they are necessary -

(a) to enable the opposite party to plead; or

(b) to define the questions for trial; or

(c) to avoid surprise at trial.

(3) Without limiting paragraph (1), every pleading shall contain particulars of any -

(a) misrepresentation, fraud, breach of trust, wilful default or undue influence; or

(b) disorder or disability of the mind, malice, fraudulent intention or other condition of the mind, including knowledge or notice -

which is alleged.

(4) The pleading of a party who claims damages for bodily injury shall state -

(a) particulars, with dates and amounts, of all earnings lost in consequence of the injury complained of;

(b) particulars of any loss of earning capacity resulting from the injury;

(c) the date of the party's birth;

(d) the name and address of each of the party's employers commencing from the day being 12 months before the party sustained the injury, the time of commencement and the duration of each employment and the total net amount, after deduction of tax, that was earned in each employment.

(5) In a proceeding for libel the indorsement of claim on the writ or, if that indorsement does not constitute a statement of claim, the statement of claim shall state sufficient particulars to identify the publication in respect of which the proceeding is commenced.

(6) Particulars of debt, damages or expenses which exceed three folios shall be set out in a separate document referred to in the pleading and the pleading shall state whether the document has already been served and, if so, when, or is to be served with the pleading.

13.12 Admission and denials

(1) Except as provided in paragraph (4), every allegation of fact in any pleading shall be taken to be admitted unless it is denied specifically or by necessary implication or is stated to be not admitted in the pleading of the opposite party, or unless a joinder of issue under Rule 13.13 operates as a denial of it, and a general denial of the allegations, or a general statement that they are not admitted, shall not be sufficient.

* * * * *

(3) Where the party pleading intends to prove facts which are different to those pleaded by the opposite party, it shall not be sufficient for the party merely to deny or not to admit the facts so pleaded, but the party shall plead the facts the party intends to prove.

(4) Any allegation that a party has suffered damage and any allegation as to the amount of damages shall be taken to be denied unless specifically admitted.

Legal principles relating to penalty privilege and the filing of a defence

80 The common law privilege against exposure to penalty is based on "the deep-seated belief that those who allege the commission of a crime should prove it themselves and should not be able to compel the accused to provide proof against himself."[22]

81 The common law privilege against exposure to penalty may be successfully invoked in both penalty proceedings and other proceedings where a penalty is not sought but may otherwise expose a party to penalty in other proceedings that are on foot or anticipated.

82 In Mayor of the County Borough of Derby v Derbyshire County Council,[23] the House of Lords dealt with an application for discovery in civil proceedings that were alleged to be penal. Lord Herschell (with whom Lords Watson, Shand, and Davey agreed) recognised "...the doctrine that the Court will not allow a party to insist upon a discovery of facts where that discovery may subject the party to a penalty even in some other proceedings."[24] Lord Herschell said that in penal proceedings there could "from its nature [be] no discovery at all."[25] As to non penal proceedings, Lord Herschell said:[26]

If it could be shown that discovery sought here was of facts, the disclosure of which might subject to the penalty provided for in the latter part of the section, no doubt there would be foundation for saying that such discovery ought not to be enforced by the Court; but no such question arise here. It has not been shewn that any questions are sought to be asked which would assist in establishing that the appellant in some future proceeding under the latter part of the section could be liable to a penalty.

83 Isaacs J in R v Associated Northern Collieries and Ors discussed how the privilege could be availed of in a penalty proceeding and a non penalty proceeding, where he said:[27]

There is an inherent distinction between a civil action to prevent or redress a civil injury on the one hand, and a civil action to recover a penalty on the other. In the latter case the whole and avowed object of the proceedings is the infliction of the penalty, and the discovery sought of documents relevant to the claim can therefore have no other intended consequence. It does not require in such a case the oath of the defendant to establish the fact that the production of the documents would tend to penalize him. The Court can see the effect of discovery from the nature of the proceeding. In the former case there is no such necessary consequence, and whether the objectionable tendency exists or not has to be otherwise ascertained, and claiming immunity upon oath in the course of making discovery is the most usual, but not the only other means of establishing it.

84 Isaacs J's observations were examined and amplified by Deane J in Refrigerated Express Lines (A'asia) Pty Ltd v Australian Meat and Livestock Corp.[28] In that case, the applicant had instituted proceedings against six corporate respondents alleging contraventions of the provisions of Part IV of the Trade Practices Act 1974 (restrictive trade practices). The applicants sought only civil relief. The respondents argued, and Deane J agreed, that the applicant was seeking to establish that the respondents had contravened the provisions of Part IV and such conduct would make them liable for the imposition of a penalty pursuant to s 76 of the Act if proceedings were taken by the relevant Minister or the Trade Practices Commission.

85 The respondents sought an order that they should be excused in limine from discovery, the production of documents, and answering interrogatories. Justice Deane refused the application in the terms it was sought, but held that the respondents would be entitled to object to producing particular documents or answering particular interrogatories on the grounds of the privilege against exposure to penalty.

86 Justice Deane recognised the principle that in a penalty proceeding a defendant should not be required to disclose information or produce documents that may assist in establishing his liability to penalty. His Honour also said that that principle may apply even where the proceedings were not penalty proceedings but other proceedings. Justice Deane said:[29]

It is a well-established principle that a defendant in proceedings which are solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents which may assist in establishing his liability to the penalty.... Even where, as in the present case, the proceedings are not for recovery of a penalty but to prevent and redress civil injury, a party to litigation ought not to be compelled to provide information or produce documents for inspection by the other party if the result thereof will be to provide evidence against him which may be used to establish his liability to a penalty in other proceedings....

In the former case, that is to say in a mere action for a penalty, a court should, in the absence of statutory provision to the contrary, refuse to make any order at all against the defendant for discovery or production of documents or provision of information for the reason that the whole and avowed object of the proceedings being the imposition and the recovery of a penalty, an order for the production of documents or provision of information against the defendant can, so far as the prosecutor of the action is concerned, properly have no other intended consequence.... This is a broad and unqualified rule whose origins are apparently to be found in a reluctance on the part of the Court of Chancery to lend the aid of its discovery proceedings to the common informer....

In the latter case, that is in a case such as the present where the proceedings are not for the recovery of a penalty, there is no general rule precluding the making of an order for discovery or interrogatories and there will ordinarily be no proper ground for objecting to an order for production of documents or provision of information being made. The party against whom such an order is made is left to object to producing particular documents or providing particular information on the ground that such production or provision may tend to expose him to a penalty....

87 Justice Deane held that it was only in exceptional circumstances in proceedings for civil redress, where no penalty was sought, would a party be excused in limine from giving discovery or answering interrogatories. After considering English authorities, his Honour said:[30]

These strongly worded statements plainly establish the general rule that a party to proceedings which are for civil redress and not for a penalty ought not ordinarily be excused, in limine, from giving discovery or answering interrogatories but should be left to object to producing particular documents or answering particular questions on the ground that such production or answer might tend to expose him to liability to a penalty...

That general approach is not however, as a matter of law, necessarily appropriate to all circumstances... If circumstances arose where the only means of protecting the right against self-incrimination and self-penalization were to excuse a party in limine from discovery or interrogatories, such circumstances should, in my view, be seen as exceptional and as justifying a departure from the general rule. In particular, if it appeared to the court that the making of an affidavit of discovery as distinct from producing the documents referred to in such an affidavit would tend to expose a party to a penalty, any order for discovery should be adjusted to the extent necessary to preclude that tendency. It is, perhaps, conceivable that circumstances could arise where the mere making of an order for interrogatories might have a similar tendency. The cases where the making of an order for discovery or interrogatories will, in itself, involve exposing a party to self-incrimination or self-penalization must, however, be rare indeed in view of the fact that the party will remain entitled to refuse to answer questions asked or produce documents discovered if the answers or production might tend to incriminate him or expose him to a penalty.

88 As can be seen, Deane J did not qualify the right of a defendant to a civil proceeding exercising the privilege against exposure to penalty; rather, his Honour said that - save for exceptional circumstances - that right would not excuse a party in limine from obligations of discovery or answering interrogatories, but instead the defendant was entitled to exercise the privilege in answering particular questions or producing particular documents.

89 The distinction drawn by Deane J in the exercise of the privilege in a penalty proceedings and a proceeding not for a penalty (but which might used to establish a penalty in other proceedings) was confirmed by the High Court in Pyneboard Pty Ltd v Trade Practice Commissioner and Anor.[31] Their Honours said:[32]

Indeed, in a civil action brought merely to establish a forfeiture or enforce a penalty the rule is that neither discovery nor interrogatories will be allowed (In re A Debtor (1910) 2 KB 59, at p 66; Associated Northern Collieries (1910) 11 CLR, at p 747). See generally the discussion by Deane J. in Refrigerated Express Lines (A'asia) Pty. Ltd. v. Australian Meat and Live-stock Corp. (1979) 42 FLR 204. There his Honour drew a distinction between discovery in a mere action for a penalty and discovery in an action which was not for a penalty the result of which might be used to establish a party's liability to a penalty in other proceedings (1979) 42 FLR, at pp 207-208 . In the first situation, the court should, in the absence of statutory provision to the contrary, refuse to make any order for discovery, production of documents or the provision of information for the reason that an intended consequence of the discovery, production of documents or provision of information is the imposition of the penalty, this being the object of the action. His Honour described this as "a broad and unqualified rule whose origins are apparently to be found in a reluctance on the part of the Court of Chancery to lend the aid of its discovery proceedings to the common informer (see Mexborough) and Heimann v. Commonwealth [1935] HCA 73; (1935) 54 CLR 126, at p 130 " (1979) 42 FLR, at p 208 ). To these authorities there should be added a reference to the statement of Lord James of Hereford in National Association of Operative Plasteres v. Smithies (1906) AC 434, at pp 437-438 , that courts of equity were averse to actions for penalties and forfeitures being brought and would not assist them. But in the second situation the order will be made and the party against whom the order is made may object to the production of particular documents or to the provision of particular information on the ground that it may tend to expose him to a penalty.

90 In One.Tel (in liq) v Rich,[33] the question arose whether the privilege excused Rich from filing a witness statement prior to trial in civil proceedings where Rich claimed that by doing so he would be exposed to penalty.

91 One.Tel had commenced proceedings against Rich and others (former directors of One.Tel) seeking compensation under s 1317H of the Corporations Act 2001. To obtain compensation under s 1317H of the Act, the plaintiff was required to prove that the defendants had contravened a civil penalty provision in relation to One.Tel. ASIC had instituted separate civil penalty proceedings against Rich arising out of the same conduct alleged by the liquidator, in which ASIC sought a declaration of contravention of the Act, pecuniary penalties, and disqualification orders.

92 Rich challenged an order previously made in the proceeding that he file his evidence prior to trial. Justice Bergin found that One.Tel would be required to prove the same facts that ASIC would be required to prove to obtain the penalties that ASIC sought. Justice Bergin vacated the order that Rich file his evidence before trial. Her Honour said the order to do so offended the principle expounded by Deane J in Refrigerated Express.

93 Pascoe and Anor v Divisional Security Group Pty Ltd and Ors[34] squarely addressed the issue of a defendant seeking to avoid filing a defence in accordance with the Rules as it may expose him to a civil penalty in other proceedings. The decision also examined the correctness of the decision in One.Tel.

94 In Pascoe, the first plaintiff (the liquidator of the second plaintiff) sought from directors of the second plaintiff company compensation under the Corporations Act for permitting the company to trade whilst insolvent. The liquidator also sought leave to amend his claim to allege a contravention of a civil penalty provision, viz. s 588G(2), although the liquidator did not seek a civil penalty. Relying on One.Tel, the defendants submitted that they should not be compelled to file verified or certified defences, or to provide discovery, or to serve affidavits in advance of the close of the plaintiffs' case.

95 Justice White accepted that, in limited circumstances, the defendants might be able to avail themselves of the privilege when pleading their defences. His Honour held that the relevant principles to apply to the application before him were those laid down by Deane J in Refrigerated Express, and that (unless there were exceptional circumstances) where the proceedings were for civil redress not involving a penalty the general rule was that a party ought not be excused in limine from giving discovery or answering interrogatories; rather, a party should be left to object to producing particular documents or answering particular interrogatories on the grounds that such production or answer might tend to expose him to liability or penalty.

96 Justice White said that unless One.Tel was an exceptional case of the kind alluded to by Deane J in Refrigerated Express, the orders made in One.Tel would be inconsistent with Refrigerated Express and Rich v ASIC. Justice White held that One.Tel was in fact an exceptional case, as there was already an ASIC civil penalty proceeding on foot. This ASIC civil penalty proceeding raised the same allegations as those in the compensation proceeding, the proceeding in which Rich sought to assert the privilege against exposure to penalty.

97 Justice White found that there no exceptional circumstances in the case before him. There was no ASIC proceeding on foot or foreshadowed, and so the general principles laid down by Deane J applied. Consistently with those principles, his Honour said that the defendant in the proceeding before him may be entitled to object to answering particular questions on the grounds that answers may expose him to a civil penalty. His Honour added that the defendants may be entitled to object to producing particular documents for inspection on the same grounds, "provided in each case, that he swears to a belief that to answer the questions, or to produce the documents, would tend to expose him to that jeopardy, and the Court is satisfied the objection is well taken."[35] But White J held that the defendants were not entitled to an order in limine from excusing them from giving discovery and answering interrogatories.

98 Justice White dealt with filing a defence. In applying the Refrigerated Express principles to the issue of whether a defendant should file a defence to the civil claim, White J said:[3]

The same principles determine the question whether the third defendant should not be required to file and serve a defence, or alternatively, should not be required to file and serve a verified defence, or a defence certified by his solicitor. Admissions in a defence would not tend to expose the third defendant to liability for a civil penalty. The purpose of pleadings is to define the issues for the trial. Whilst a defendant who makes any allegations of fact in the defence is required to depose that he or she believes the allegations to be true, a defendant is not required to depose that he or she believes allegations of fact in the statement of claim, which are admitted, to be true: [Uniform Civil Procedure Rules], r 12.23(3).

The filing of an unverified defence is unlikely to create a risk of exposure to a civil penalty (Laws v Australian Broadcasting Tribunal), although it is possible to conceive of circumstances where unverified allegations of fact in a defence may lead to a train of enquiry by ASIC which could have that tendency (Chief Executive Officer of Customs v Camile Trading Pty Ltd). It may be that the pleading of verified allegations of fact or verified non-admissions could have a tendency to expose the third defendant to liability for a civil penalty. However, the third defendant is not to be excused in limine from filing a verified and certified pleading.

As the proceedings are not proceedings for the imposition of a penalty, it was necessary for the third defendant to depose on affidavit that the verification of the defence could tend to prove that he was liable to a civil penalty, and for the Court to be satisfied that there were reasonable grounds for that belief. No affidavit was relied upon on this application.

99 As White J said, the defendant in a non penalty proceeding is not to be excused in limine from filing a verified and certified pleading. On the other hand, White J did accept that pleading unverified allegations of fact could have a tendency to expose the defendant to liability for a civil penalty. His Honour thus implicitly accepts that, if a defendant had reasonable grounds, he can rely on the penalty privilege to avoid pleadings that may expose him to civil penalty or may lead to a train of inquiry that could have that tendency.

100 The issue of filing a defence where a defendant sought to rely on the privilege against exposure to penalty was further examined in ASIC v Mining Projects Group Ltd and Ors.[37] In that case, ASIC sought pecuniary penalties and disqualification against directors. Each defendant filed a defence that ASIC claimed was deficient, and ASIC sought orders that the defendants provide further and better particulars of their defence. The defendants denied the defences were deficient, but said they could not be compelled to provide any further information because of penalty privilege or the privilege against self-incrimination.

101 Justice Finkelstein held that the penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. His Honour said that "[t]o the extent that the pleading rules purport to impose such an obligation they must give way to the privilege."[38]

102 Justice Finkelstein said that if, as in the case before him, the defendant to a civil penalty action wished to raise a positive case, then the view he favoured was that the defendant should be entitled to rely on the privilege until the plaintiff's case was concluded. If he then wished to run a positive case, he could deliver an amended defence that would outline his case.[39]

103 A day before the Mining Projects decision was delivered, the Court of Appeal of New South Wales handed down its decision in McDonald v ASIC,[40] which came to effectively the same conclusion as Finkelstein J. In McDonald, ASIC had brought civil penalty proceedings against the defendants. A defendant had sought an order that he not be required to deliver a defence to ASIC's statement of claim. President Mason (with whom Giles JA agreed) said that the defendant should not be compelled to include in his defence any information that may have the tendency to expose him directly or indirectly to the penalties being sought by ASIC and the Rules ought to be departed from no more than is necessary to give effect to the privilege.

The pleading mechanism I have suggested would require the claimant to invoke from the outset any relevant defence or statutory ground of dispensation; and it would require him to identify any parts of ASIC's own allegations intended to be relied upon in that regard. There would also be a framework that defines the legal issues throughout the trial against which rulings as to admissibility could be made (at least in some circumstances). If and to the extent that the claimant exercised his right to plead and particularise in the manner indicated and not to waive his privilege by venturing further, there will still be the likelihood of ASIC's evidentiary case being split more than it otherwise might be, but at least this consequence would be reduced to a minimum.

105 The practical effect of pleading a defence that seeks to rely on the penalty privilege was considered in ASIC v Managed Investments (No 3).[42] ASIC claimed the defendants had contravened the Corporations Act 2001 and sought orders for civil penalties. One of the defendants pleaded in his defence that he neither admitted or denied an ASIC allegation.

106 After referring to the passage in Managed Investments where Finkelstein J said "... penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege", Fryberg J went on to say:[43]

The words emphasised in that passage are words of limitation. They demonstrate the continued general applicability of the rules of pleading in penalty cases. Penalty privilege affords relief from the rules only if the rules would override the privilege. In any given case it is necessary to identify the relevant rules and determine what those rules require the responding pleader to do in respect of the particular allegation made against him; and to determine the extent to which that requirement is inconsistent with the privilege.

107 Justice Fryberg confirmed that a valid penalty privilege claim needed to be bona fide and reasonable, citing MacDonald at [67]. Justice Fryberg held that the penalty privilege entitled the defendant who believed an allegation was true to neither admit or deny them under the rules. His Honour said in that case the defendant may waive his privilege and admit them or he may refuse to plead to the allegations relying on this privilege.

108 On the other hand, if the defendant believed the allegation was not true or might not be true, he was obliged to plead a denial or not admit the allegation. Justice Fryberg said that in that case he could see no way in which a bona fide and reasonable claim for privilege could be supported. His Honour said that "[n]either a denial nor a non-admission could conceivably propel ASIC on a chain of inquiry to aid in proof of the allegations" pleaded in the plea under consideration.[44] His Honour said that in that case there was no scope for the privilege to operate.[45]

109 In this Court, Ferguson J addressed the sufficiency of a non responsive defence to claims alleging serious criminal conduct in CC Containers v Lee (No 2).[46] The defendants to civil proceedings were accused of regular and systemic fraud. No civil penalty or criminal proceedings were on foot. Nevertheless, Ferguson J held that there existed a real and appreciable risk of criminal prosecution should the matters alleged be proven. Her Honour held that the privileges against self incrimination and penalty privilege could be claimed. The defendants had filed defences that were not responsive to the allegations against them. The plaintiffs sought to strike out those defences. That application was dismissed.

110 Justice Ferguson held that the defendants ought not to be forced to elect now whether they wish to plead a positive case. Her Honour held that the decision as to whether they should be permitted to do so after the plaintiff has presented its case would be a matter for the trial judge.[47]

111 The risk to the defendants was of serious criminal charges under the Crimes Act 1958. The privilege sought to be maintained was the privilege against self-incrimination. Such a privilege is not one that can be done away with by Rules of Court. The defendants had not sought to be excused from filing a defence in limine. Rather, they had filed a defence and then raised the privilege against self-incrimination.

112 APCH contend that if Mr Lewski and other defendants are entitled to be excused from filing a defence in accordance with the Rules of Court by reason of the privilege against exposure to penalty, then their privilege may be adequately protected by the Court ordering that they file a defence in accordance with the rules subject to a confidentiality order. APCH rely on Bond, where French J so ordered. Bond was a civil action arising out of the failure of Rothwells. The State of Western Australia brought proceedings against Lawrence Connell and others alleging it was misled and deceived. Connell and others were facing criminal charges arising out of the failure of Rothwells. Justice French said:[48]

For, in any event, I am not persuaded that it has been demonstrated that as a general proposition the filing of pleadings or answers to requests for particulars would necessarily seriously compromise the right to silence in the criminal proceedings. The risk of such compromise can be dealt with pro tem by the use of confidentiality orders on a case by case basis. I anticipate, for example, that defences to the cross-claims may be filed on the basis that initially they are to be disclosed only to counsel for the parties until the question whether a continuing confidentiality order is necessary can be resolved.

...

I am of the view that Connell, KMG Hungerfords and Lucas should be required to plead to the cross-claims against them, but that such pleadings may be protected by confidentiality orders limiting access to them to counsel for a time sufficient to enable consideration of whether such orders should be extended until after the hearing and determination of the criminal proceedings. The provision of particulars subject to judgments about the resources burden imposed by them can be made subject to the same constraints.

113 Justice French did not refer to Refrigerated Express, and his Honour's decision was made before the other judgments that have since dealt with this issue. APCH was unable to refer to any other decision where it was held that the privilege against exposure to penalty could observed by requiring a full defence to be delivered but protected by confidentiality orders.

114 Even if such confidentiality orders were to be made, there remains the question of how APCH would deal with the confidential defence in the filing of its witness statements. It is not beyond the realm of possibility that in putting on evidence in response to the confidential defence, APCH may put ASIC or some other entity on to a chain of inquiry that may assist ASIC in its civil penalty proceedings. In my opinion, in this case, the imposing of a confidentiality order would not properly recognise the common law right that Mr Lewski and others have in the privilege from being compelled to provide proof against himself in a penalty proceeding.

115 The authorities I have discussed above establish certain principles. The relevant principles appear to be as follows:

(a) In the case of self-incrimination privilege, the defendant must establish that the provision of information or the production of documents in the civil case leads to a real and appreciable risk of a criminal prosecution before the privilege can be invoked.[49]

(b) In an action to recover a penalty it is not necessary for a defendant to establish that there is a risk the defendant will be subjected to a penalty by providing information to the plaintiff. The plaintiff is seeking the information for that very purpose.

(c) In civil actions, where no claim for penalty is made, the defendant must show that providing the information requested would tend to subject him to a penalty in separate proceedings before he can rely on the privilege.[50]

(d) The privilege against exposure to penalty is a common law right of privilege that may be availed of as of right and is enforced and protected by the Court.

(e) The privilege against the exposure to penalty may be relied on by a defendant to a civil procedure in which a penalty is not sought ("the non penalty civil proceeding").[51]

(f) The privilege against the exposure to penalty extends to the obligation upon a defendant to plead, give discovery and answer interrogatories in the non penalty civil proceeding.[52]

(g) As a general rule, the privilege does not entitle a defendant to a non penalty civil proceeding to obtain an order in limine excusing him or her from giving discovery or answering interrogatories.

(h) In exceptional circumstances, a defendant may be entitled to such orders in limine.

(i) By extension, in exceptional circumstances, a defendant may be entitled to orders in limine that he may deliver a defence that departs from the Rules of Court only insofar as to protect his privilege against exposure to penalty.

(j) Exceptional circumstances may exist where the defendant to the civil proceeding is also the subject of separate civil penalty proceedings alleging the same or similar conduct. [53]

(k) Where a defendant seeks to take the privilege against exposure to penalty in a defence, the proper course is to plead accordingly and - if challenged - the defendant will be required to justify that the privilege is taken in good faith and on reasonable grounds for the privilege to stand.

116 As discussed above, there is a clear line of authority regarding the protection of the privilege from exposure to penalty. As a general rule, a defendant in a penalty proceeding is entitled to be excused in limine from giving discovery or answering questions in penalty proceedings. In other civil proceedings, the privilege may not be invoked in limine but requires the defendant to exercise the privilege - where it is available - on a particular interrogatory question or production of a particular document.

117 Although the authorities regarding pleading a defence are not as extensive as those on discovery and interrogatories, the position is treated consistently. The authorities establish that in civil penalty proceedings the defendant is not excused from filing a defence. He is, however, excused , in limine from complying with the rules relating to the content of the defence, but only to the extent that the rules would override the privilege. This requires a plea by plea examination of the requirements of the rules and their interaction with content of the privilege. The rationale for being excused in limine is that the purpose of the proceeding is to impose a penalty.

118 The position with pleading of a defence in a non penalty proceeding differs from a penalty proceeding, in that the onus is on the defendant in the non penalty proceeding to establish that he has a bona fide and reasonable basis for exercising the privilege when pleading his defence. Unlike in a penalty proceeding, the defendant is not entitled in limine to file a defence relying on the privilege. If the defendant in a non penalty proceeding is able to establish a bona fide and reasonable basis for exercising the privilege then the defendant may take the same approach to pleading his defence as that taken by a defendant in a penalty proceeding.

119 In my view, as a general rule, the proper course to be adopted is that where a defendant in the non penalty proceeding believes he has good grounds to rely on the privilege in pleading his defence, then he should plead according to the rules, but taking the privilege where appropriate. If the pleadings in that form are then challenged by the plaintiff, then the proper course is for the defence and its justification in taking the privilege to be ruled on by the Court with the defendant bearing the onus of establishing a bona fide and reasonable basis for taking the privilege.

120 Where, as here, the common defendants will be pleading to accusations that effectively mirror those made in the concurrent civil penalty proceedings, the circumstances are exceptional and the existence of the civil penalty proceedings establishes that taking the privilege would be bona fide and reasonable.

121 In those circumstances it is appropriate to rule in advance that the common defendants are entitled to exercise the privilege when pleading their defence.

122 In my opinion, the common defendants have shown that providing the information requested would tend to subject him to a penalty as the civil penalty proceedings rely on the same conduct alleged against the defendants in this proceeding. I accept that each of the common defendants has a bona fide and reasonable claim to the privilege against exposure to penalty in this proceeding. The proceeding raises the same conduct that it the subject of the civil penalty proceeding in the Federal Court of Australia.

123 In accordance with the privilege, the common defendants in the civil penalty proceeding have been excused from filing a defence to ASIC's claims in the recognised form. The common law privilege against being compelled to provide proof against himself would be undermined if the common defendants were required to plead to the same allegations in this non penalty proceeding.

124 In my opinion, the common defendants have also shown that there is a real and appreciable risk of criminal prosecutions as the civil penalty proceedings allege concerning the impugned transactions undertaken by the common defendants may also constitute criminal offences. For example, in the civil penalty proceeding the Common Directors are alleged to have breached s 209(2) of the Act by being involved in a contravention of s 208 that relates to the alleged payment of the listing fee. Under s 209(3), a person commits an offence if such involvement is dishonest.

125 Mr Lewski also seeks an order that liberty be reserved for him to file an amended defence, pleading any additional facts not already traversed in the pleadings after the plaintiff has closed its case. In my view, such a decision should be left to the trial judge in view of the uncertainty as to how things will stand at the conclusion of the plaintiff's case.

126 Accordingly I propose to order as follows. On the summonses of the Common Directors, I order, rule and direct as follows:

(a) that the application to stay the proceedings is dismissed;

(b) that the defendants file their defence within 21 days of the date hereof;

(c) that the requirements of the Supreme Court Rules 13.07, 13.10 and 13.12 be dispensed with to the extent that compliance with these Rules may have a tendency to expose the common defendants directly or indirectly to civil penalty or criminal proceedings in respect of the subject matter of this proceeding, and that in providing their defence they are relieved from the obligation to comply with the said Rules to the extent claimed until further order.

127 On the balance of the applications, I dismiss the applications for a stay.

128 I direct that the defendants file and serve their defences within 21 days.

The applications of the Mr Powell, Kidder Williams Ltd and David Williams (6, 12 and 14 defendants)

129 These defendants are described as the Kidder Williams parties. They do not have any applications before the Court. They do not oppose a stay if granted. It has not been granted.

130 The Kidder Williams parties submit that if an order was made as sought by the Common Directors in relations to their defences, they would be put in a difficult position. They submit that they may have to defend and raise contribution proceedings brought by the common director defendants without having the benefit of seeing any of the detail of those claims made or defences to their contribution claims.

131 The Kidder Williams parties submit that if the Court does not grant a stay but is minded to make some form of case management orders concerning the future conduct of the proceeding (whether it be in relation to defences, discovery or other such matters), the orders that are made as against the defendants should be uniform.

132 As indicated, I do propose to make a ruling that the common director defendants may rely on their privilege against exposure to penalty in pleading their defence. I am satisfied that they do have a bona fide and reasonable ground for relying on the privilege. No such application has been made by the Kidder Williams parties. I clearly have the case management power to make the orders sought.

133 Under the Civil Procedure Act 2010, the overarching purpose of that Act and the Rules of Court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. The Court is given extensive powers in ss 47, 48 and 49 of the Civil Procedure Act 2010 to achieve that end.

134 Bearing these obligations in mind, I consider that the appropriate course is to rule that Kidder Williams parties should continue to observe the Rules of Court. If, in observing any particular obligation, the Kidder Williams parties perceive that compliance with the Rules would impose an injustice upon them, then they may make such application to the Court as they think fit to seek to remedy the position.

135 Accordingly, I propose to make no orders in relation to the Kidder Williams parties at this stage, save to reserve liberty to apply.

Applications of Messrs Hancy and Rodaway (seventh and eighth defendants)

136 The defendants have issued no summons. They sought a stay if stays were granted to other defendants.

137 As to their defences, their position is governed by the general rule. It is not appropriate to rule in advance of their plea that they would or would not be justified in being excused from observing the Rules. As indicated, that task should be done after the defendants plead; where, if the privilege is sought to be taken but challenged by the plaintiff, the defendants would be obliged to establish on proper evidence that the privilege was taken bona fide and on reasonable grounds. The same procedure should apply if the defendants wish to rely on the privilege of self-incrimination.

The applications of Daytree Pty ltd, Carey Bay Pty Ltd, Australian Property Administrators Pty Ltd and Kidder Communities Pty Ltd (ninth, tenth, eleventh, and thirteenth defendants)

138 In respect of the thirteenth defendant, no summons was filed. The thirteenth defendant adopts the same position to the other parties that are not parties to the ASIC proceedings. Its position is that if a stay is granted, one also be granted to Kidder Communities Pty Ltd.

139 The ninth, tenth, and eleventh defendants are known as the Lewski Companies. Mr Andrew Joseph, the solicitor for the Lewski companies, has deposed that Mr Lewski has been the a director and the company secretary of Daytree Pty Ltd since November 1991 and the sole director since 13 November 2008. Mr Joseph says that Wickgold Investments Pty Ltd is the sole shareholder in Daytree Pty Ltd. Mr Lewski has been the sole director since 15 February 2010. Prior to that, Mr Joseph says that Mr Lewski's mother and father were additional directors. Mrs Lewski died this year and Mr Lewski senior is approximately 100 years of age and has not taken an active role in Daytree for many years.

140 Mr Joseph says that Mr Lewski has been the sole director and secretary of Carey Bay Pty Ltd since June 1997. Wickgold Investments Pty Ltd is the sole shareholder.

141 Mr Joseph says that Mr Lewski has been the sole secretary and director of Australian Property Administrators Pty Ltd since February 1995. Wickgold Investments Pty Ltd is the sole shareholder.

142 Mr Joseph says that in taking instructions on behalf of the defendants, he takes them from Mr Lewski as the sole director and person in effective control of each of the defendants.

143 The Lewski Companies filed written submissions. They submit that in the statement of claim the companies are each alleged to have had the knowledge of Mr Lewski by reason of the fact that at all material times he was the sole director of each company. Allegations are made against each company for being a knowing accessory to the breaches alleged against Mr Lewski, and/or being in knowing receipt of property described as Prime Trust Property.

144 The Lewski companies accept that a claim for privilege against self-incrimination is not available to a corporation.[54] Further, the Lewski Companies accept that a corporation cannot ordinarily claim privilege on the ground that complying with a particular step in litigation might tend to incriminate another person.[55]

145 In this application, the Lewski Companies do not seek to assert privilege in their own right. Rather, they submit that in the circumstances - having regard to both the structure of the Lewski Companies and the manner in which the case is pleaded against Mr Lewski and the Lewski Companies - requiring the Lewski Companies to file defences compliant with the ordinary rules of pleading would necessarily undermine the claims for privilege against exposure to penalty and self-incrimination asserted by Mr Lewski.

146 The companies submit that relatively few cases have addressed the issue of the impact of a claim for penalty privilege or privilege against self-incrimination on sole director companies, where little distinction can be drawn between the corporation and the individual. They accept that no cases have conclusively decided that a company cannot seek to be relieved from various litigation requirements where compliance with those requirements would necessarily undermine the privilege claimed by a sole director.

147 In Microsoft Corporations v CX Computer Pty Ltd,[56] the applicants alleged that defendants had infringed copyright and trademarks of the applicants. The applicants sought discovery. Two of the respondents, Natcomp (a corporation) and Grassia (an individual), applied to set aside a notice to produce issued by the applicants and to be relieved from making discovery on the ground that to comply with the notice and to make discovery would tend to incriminate Grassia.

148 Justice Lindgren found that the conduct relied on by the applicants (both copyright and trademark infringement) would also establish the commission of offences by Natcomp and Grassia under the Copyright Act and the Trade Mark Act.

149 Justice Lindgren noted that, as a body corporate, Natcomp was not entitled to refuse to comply with the requirement to produce a document or do any other act on the ground that the doing of the act might tend to incriminate the body corporate or make the body corporate liable to a penalty.[57] His Honour also noted that Natcomp could not assert the privilege against self-incrimination on the ground that that the giving of discovery or compliance with such a notice tends to incriminate another person (such as Grassia). Nor, his Honour said, could Grassia complain about the giving of discovery or responding to a notice to produce by Natcomp on the ground that he might tend to be incriminated as a result, because this was not self-incrimination.

150 Thus the issue before his Honour, insofar as it related to Natcomp, was whether the giving of discovery and compliance with the notice to produce by Natcomp would require that Grassia tend to incriminate himself.

151 Justice Lindgren held that under the Federal Court Rules a member of Natcomp could give discovery and comply with the notice. His Honour held that he was not satisfied that it was impossible or impracticable for Natcomp's list of documents to be verified by an individual other than Grassia or to respond to the notice to produce. His Honour said:[58]

In my opinion, on the evidence before me, Grassia's privilege against self-incrimination does not relieve Natcomp from giving discovery or complying with the notice to produce served on it. It is a sufficient basis for this conclusion that for the reasons mentioned above, I am not satisfied that Natcomp's doing so will require Grassia to engage in self-incriminatory conduct of any kind.

152 As to the notice to produce, Lindgren J found that the AFP already had the documents the subject of the notice to produce. His Honour found that the privilege did not operate where the production of the documents would not further imperil Natcomp and Grassia.

153 Justice Lindgren finally turned to the obligation on Grassia. After a thorough review of the cases decided after Refrigerated Express, his Honour concluded that principles expounded by Deane J in Refrigerated Express should be applied to Grassia and that Grassia's circumstances did not fall within the rare exception where a defendant could be excused in limine from giving discovery.

154 The Lewski Companies submit that it is implicit in Lindgren J's reasons that, had Grassia been the only shareholder available to produce the relevant documents and swear the affidavit of documents, his Honour may have found that the corporation (Natcomp) was not obliged to comply with the discovery and production requirements.[59] His Honour did, however, note that Natcomp may well be obliged to take other steps to make discovery, for instance, through the appointment of another individual with the capacity to swear the relevant affidavit.[60]

155 Consistently with his consideration of Refrigerated Express and the obligation on Grassia to give discovery, it seems that his Honour may have ruled that Grassia could object to production of inspection if he was the only person under the Rules who could have performed these obligations for the company but could not object to giving discovery in limine.

156 The Lewski Companies also rely on R v Ronen and Ors,[61] where the New South Wales Court of Criminal Appeal (Spigelman CJ, Mason P, Kirby J) dealt with objections to compliance with subpoenas to produce payroll records, addressed to the "proper officer" of a number of corporations. The sole director and secretary of each of the companies claimed privilege against self-incrimination as they had each been charged with tax offences and, accordingly, sought that the subpoenas be set aside on the basis that they were oppressive.

157 In upholding the first instance decision of Whealy J that the corporation was not excused from complying with the subpoena, the Court of Criminal Appeal emphasised that all that the subpoena required was that a proper officer of the corporation produce the required documents. It did not strictly necessitate the involvement of the directors. It was concluded that, as the companies had a payroll clerk who was in charge of the relevant documents and who had the capacity to secure the company's compliance with the subpoena, the corporation could comply without impinging on the directors' claim for privilege.

158 The Court made no express findings as to what might have occurred had no such officer been available, but Spigelman CJ made the following observations:[62]

There is much to be said for the proposition that if the subpoenas do in fact require the accused to perform some act, then the subpoenas should be set aside as oppressive and/or an abuse of process.

Whether the position is different in a one-person company need not be decided. In such a case it may be necessary for the court to appoint a receiver for this specific purpose.

159 If it were to be shown to be the case (and it has not been thus far) that there is no-one with custody or possession of the records who could lawfully answer the call of the subpoena on the corporations' behalf without risk of testimonial self-incrimination, then the corporations must still take steps to comply. This many mean the appointment of a receiver. Or it may mean that a "proper officer" with nothing to fear by way of self-incrimination has to be appointed.

160 The issue remains open as to what is to occur when the sole director is the only appropriate person to secure the company's compliance.

161 Microsoft and Ronen can, and should, be distinguished from the instant case on a number of levels. First, both cases were concerned with the production of documents (via discovery, subpoenas, or notices to produce) rather than the filing of pleadings. Secondly, each case involved corporations which had at least one other member, employee, or officer who was not asserting privilege and who had the ability to appropriately achieve compliance on behalf of the corporation.

162 The suggestion noted in both Microsoft and Ronen, that compliance may be achieved by appointing another member of the company or "proper officer", cannot reasonably apply in this case. In Ronen, in concluding that the payroll clerk could respond to the subpoenas on the companies' behalf, the Court concerned itself heavily with the concept of capacity and referred to a consideration of "the person best able to supply the information".[64]

163 What is required of a company in filing a defence is markedly different from that which is required of the company in producing and verifying documents in its possession. Further, the steps required of a sole director of a company in filing a defence cannot be fairly or reasonably assigned to another individual who does not have the requisite knowledge to provide full and proper instructions.

164 In Mining Projects, Finkelstein J considered directors' claims for privilege in response to a request for further and better particulars of the defences filed by them. Although, again, the Court was not required to determine the issue, Finkelstein J noted in relation to the relevant corporation:[65]

If MPG's defence is defective and it is required to provide further information, it may not be able to satisfy that requirement if the only source of its information is the director defendants and they are entitled to remain silent.

165 In my opinion, the principles are clear. Mr Lewski is entitled to rely on the privilege against exposure to penalty. It is unnecessary for me to decide whether he has established real and appreciable risk of a prosecution being instituted. The knowledge alleged against the companies is the knowledge of Mr Lewski. I accept that the appointment of a receiver would not be an appropriate step. Meaningful instructions can only be obtained from Mr Lewski.

166 Accordingly, I conclude that the Lewski Companies are entitled to the same ruling as the Common Directors in relation to their defence.

167 I rule that the Lewski Companies are relieved from their obligations to file defences in compliance with the Supreme Court Rules 13.07, 13.10 and 13.12 to the extent that such compliance may require Mr Lewski to tend to incriminate himself or expose himself to penalty.

168 The defendant has not filed a summons. It proposes to follow the course adopted by the seventh and eighth defendants, Messrs Hancy and Rideaway.

170 On the summons of the Common Directors, I order, rule and direct as follows:

(a) that the applications to stay the proceedings are dismissed;

(b) that the requirements of the Supreme Court Rules 13.07, 13.10 and 13.12 be dispensed with to the extent that compliance with these Rules may have a tendency to expose the first, second, third, fourth, and fifth defendants (the Common Defendants) directly or indirectly to civil penalty or criminal proceedings in respect of the subject matter of this proceeding, and that in providing his defence the defendant is relieved from the obligation to comply with the said Rules to the extent claimed until further order.

(c) that the ninth, tenth, and eleventh defendants (the Lewski Companies) are relieved from their obligations to file defences in compliance with the Supreme Court Rules 13.07, 13.10 and 13.12 to the extent that such compliance may require Mr Lewski to tend to incriminate himself or expose himself to penalty

(d) that all defendants to these proceedings file their defence within 21 days of the date hereof

I certify that this and the 47 preceding pages are a true copy of the reasons for Judgment of Robson J of the Supreme Court of Victoria delivered on 4 December 2012.

[1] APCH, 'Statement of Claim' in APCH Limited (rec and mgr apptd) (in liq) (cust apptd) v Wooldridge and Ors, S CI 2012 1199, 3 August 2012, [33].

[4] Australian Property Custodian Holdings Ltd v Capital Finance Australia Ltd & Ors [2012] VSC 124.

[5] Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 (Rochfort), 19 and 21 (Sugerman ACJ, Holmes and Mason JJA agreeing); cited with approval in Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562 (Websyte), [53] (Dodds-Streeton J).

[6] Rochfort [1972] 1 NSWLR 16, 19.

[7] Websyte [2012] FCA 562, [57].

[8] (1982) 7 ACLR 202 (McMahon), 207.

[9] [1995] HCA 40; (1995) 184 CLR 1 (Reid).

[10] I canvass these cases in Re AWB Ltd (No 1) [2008] VSC 473; (2008) 21 VR 252 (Re AWB), [30] et seq.

[11] [2010] VSCA 231 (De Simone), [9] (Redlich, Mandie and Hansen JJA).

[12] [2006] VSCA 191, [19] (citations omitted).

[13] Rochfort [1972] 1 NSWLR 16, 19 (Sugerman ACJ); quoted in McMahon (1982) 7 ACLR 202, 205 and in Re AWB [2008] VSC 473; (2008) 21 VR 252, [29].

[14] Jefferson Limited v Bhetcha [1979] 1 WLR 898, 904-905 (Megaw LJ) (with apparent approval by the Victorian Court of Appeal in De Simone [2010] VSCA 231, [60]); Cameron Unit Services Pty ltd v Kevin R Whelpton Associates (Australia) Pty Ltd [1984] FCA 406; (1984) 4 FCR 428, 434 (Wilcox J); Philippine Airlines v Goldair (Aust) Pty Ltd [1990] VicRp 34; [1990] VR 385, 390 (Young CJ); ASIC v Kavanagh (1993) 12 ACSR 69, 76-77 (Hayne J); Gallaher v Collins [2006] VSC 139, [29] (Hargrave J); CBA v May [2007] NSWSC 490, [13] (Einstein J).

[15] [2003] NSWSC 1127; (2003) 48 ACSR 231.

[16] APCH cited as authority for this proposition One.Tel Ltd v Rich [2005] NSWSC 226; (2005) 190 FLR 443, [67]-[70], which was followed in Pascoe v Divisional Security Group Pty Ltd [2007] NSWSC 211; (2007) 209 FLR 197, [13]-[17]; Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158, [44] and Primary Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158, [6]. See also Foyster v Foyster Holdings Pty Ltd [2002] NSWSC 768, [9] (Barrett J).

[17] See, eg, ASIC v Adler [2002] NSWSC 171; (2002) 168 FLR 253, [738]-[740].

[18] R v Byrnes [1995] HCA 1; (1995) 183 CLR 501, 514-15.

[19] [2006] VSC 139, [34].

[20] See, eg, De Simone v Bevnol Constructions & Developments Pty Ltd [2009] VSCA 199; (2009) 25 VR 237, [54], [55].

[21] (1992) 37 FCR 150 (Bond).

[22] Environment Protection Authority v Caltex Refinery Co Pty Ltd [1993] HCA 74; (1993) 178 CLR 477 (Caltex), 532; quoted with approval in Trade Practices Commission v Abbco Iceworks Pty Limited and Ors [1994] FCA 1279; (1994) 52 FCR 96 (Abbco Iceworks), 129 (Burchett J); in turn cited with approval in Rich and Anor v ASIC [2004] HCA 42; (2004) 220 CLR 129, 142 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) (Rich v ASIC).

[23] [1897] AC 550.

[27] [1910] HCA 61; (1910) 11 CLR 738 ,742-43.

[28] (1979) 42 FLR 204 (Refrigerated Express), 207-208.

[29] Ibid, 207-208 (citations omitted).

[30] Ibid, 210-211 (citations omitted).

[31] [1983] HCA 9; (1983) 152 CLR 328 (Pyneboard), 336 (Mason ACJ, Wilson and Dawson JJ).

[33] [2005] NSWSC 226; (2005) 190 FLR 443 (One.Tel).

[34] [2007] NSWSC 211; (2007) 209 FLR 197 (Pascoe).

[35] Pascoe [2007] NSWSC 211; (2007) 209 FLR 197, [33].

36 Pascoe [2007] NSWSC 211; (2007) 209 FLR 197, [34]-[36] (citations partially omitted).

[37] [2007] FCA 1620; (2007) 164 FCR 32 (Mining Projects).

[38] Mining Projects [2007] FCA 1620; (2007) 164 FCR 32, [12].

[39] Mining Projects [2007] FCA 1620; (2007) 164 FCR 32, [13].

[40] [2007] NSWCA 304; (2007) 73 NSWLR 612 (McDonald).

[42] (2012) 88 ACSR 139 (Managed Investments).

[43] Managed Investments (2012) 88 ACSR 139, [16].

[44] Managed Investments (2012) 88 ACSR 139, [24].

[45] Managed Investments (2012) 88 ACSR 139, [25].

[46] [2012] VSC 149 (CC Containers).

[47] CC Containers [2012] VSC 149, [20].

[48] Bond (1992) 37 FCR 150, 175.

[49] Mining Projects [2007] FCA 1620; (2007) 164 FCR 32, [9].

[51] Refrigerated Express (1979) FLR 204.

[52] Refrigerated Express (1979) FLR 204; McDonald [2007] NSWCA 304; (2007) 73 NSWLR 612.

[53] Pascoe [2007] NSWSC 211; (2007) 209 FLR 197.

[54] Evidence Act 2008 (Vic) s 187; Caltex [1993] HCA 74; (1993) 178 CLR 477; Abbco Iceworks (1994) 52 FCR.

[55] Rochfort v Trade Practices Commission [1982] HCA 66; (1982) 153 CLR 134, 145 (Mason J, Wilson J agreeing), 150 (Murphy J); Caltex [1993] HCA 74; (1993) 178 CLR 477, 549 (McHugh J); Bond v Tuohy (1995) 56 FCR 92, 99-100 (Ryan J) (as cited in Microsoft Corporations v CX Computer Pty Ltd [2002] FCA 3; (2002) 116 FCR 372, [32]); see Abbco Iceworks [1994] FCA 1279; (1994) 52 FCR 96, 116 (Burchett J).

[56] [2002] FCA 3; (2002) 116 FCR 372 (Microsoft).

[57] Microsoft [2002] FCA 3; (2002) 116 FCR 372, [31].

[58] Microsoft [2002] FCA 3; (2002) 116 FCR 372, [37].

[59] This interpretation of Lindgren J's judgment is supported by the reasons in Smith and Anor v ACN 090444518 Pty Ltd and Ors [2007] FMCA 263; (2007) 208 FLR 455, [34].

[60] Microsoft [2002] FCA 3; (2002) 116 FCR 372, [35].

[61] [2004] NSWCCA 67; (2005) 62 NSWLR 707 (Ronen).

[65] Mining Projects [2007] FCA 1620; (2007) 164 FCR 32, [5].