Plaintiffs v Defendant

[2008] VSC 322

PRACTICE AND PROCEDURE - Search order - Anton Piller order - Privilege against self-incrimination - Whether valid privilege claim made - Whether privilege waived by permitting execution of search order - Privilege claimed after seizure but prior to disclosure of contents of seized items to the plaintiffs - Held: valid claim to privilege established - Held: no waiver of privilege established - Whether seized items should be returned to the defendant - Risk of destruction or concealment contrary to s 254 Crimes Act 1958 (Vic) - Order for return of seized items refused.

1 The proceeding concerns five letters which the plaintiffs allege were written by the defendant to numerous persons. The letters are unquestionably defamatory of the plaintiffs, and have been written with the obvious intention of causing them mental anguish and damaging their reputations. The letters include allegations of fraud, forgery, blackmail, murder and rape. All of the allegations are vehemently denied by the plaintiffs.

2 In Family Court proceedings between the defendant and her husband, a relative of each of the plaintiffs, the husband alleged in an affidavit sworn by him on 27 May 2008 that the first and second letters were sent by the defendant. In an affidavit sworn on 26 June 2008 in the Family Court proceedings, the defendant denied sending the two letters.

3 On 2 June 2008, the plaintiffs' solicitors wrote to the defendant and demanded an undertaking not to send any further letters containing allegations against them, seeking an apology and other matters. At this time, four of the five letters had been sent. The defendant did not respond.

5 On 4 July 2008, Ashley JA heard an ex parte application made by the plaintiffs for a search order under the provisions of Order 37B.[1] Ashley JA made the search order. The search order authorised a search party comprising an independent solicitor, two representatives of the plaintiffs' solicitors and an independent computer expert to enter the defendant's home and search for, and seize, drafts or copies of the letters, documents evidencing the persons to whom the letters were sent and any electronic data storage device capable of storing any version of the letters or documents relating to the letters.

6 The search order contains a number of provisions designed to preserve to the defendant the right to claim that production or disclosure of the documents or things, or information derived therefrom, may tend to incriminate her.

7 First, paragraphs 12 and 13 provided for a regime under which the defendant could claim the privilege against self-incrimination. Paragraph 12(c) of the search order provided that the defendant "may" gather together any things sought by the search order which she believed may tend to incriminate her and hand them to the independent solicitor. If the defendant availed herself of this opportunity, paragraph 13 of the search order provided that the independent solicitor must not inspect, or permit anyone else including the plaintiffs or their solicitors to inspect, anything handed to the independent solicitor in accordance with paragraph 12(c). In those circumstances, the independent solicitor was ordered to deliver such things to the Court at or prior to the return date of the search orders.

8 Second, paragraphs 20 and 21 of the search order provide another regime which provides protection to the defendant in the event that she wishes to claim that execution of the search order may tend to incriminate her. Under those paragraphs, the defendant is entitled to object, on the ground that they might tend to incriminate her, to the actions of the independent computer expert constituted by that expert: (1) searching any computer found at the premises; (2) copying any computer hard drive; (3) delivering a copy of any computer hard drive to the independent solicitor; or (4) making a report of her inspection of any computer hard drive and delivering that copy to the independent solicitor. If such objection is made, paragraph 21(c) of the search order provided that, if the plaintiffs contest the self-incrimination claim, the hard drives or computers should be delivered to the independent solicitor who should in turn deliver them to the Court.

9 Third, paragraphs 23 and 24 of the search order provide another regime designed to provide the defendant with an opportunity to claim that the operation of the search orders may tend to incriminate her. Paragraph 23 of the search orders provided that, subject to paragraph 24, the defendant must provide specified information to the plaintiff in writing concerning the letters and, thereafter, swear and serve an affidavit setting out that information. Paragraph 24 of the search orders gave the defendant an opportunity to object to complying with paragraph 23 on the ground that compliance may tend to incriminate her.

10 The search order was executed on the afternoon of 4 July 2008. The independent solicitor served the search order upon the defendant and explained its contents to her in general terms. The independent solicitor explained to the defendant that she was entitled to a more detailed explanation of the search order if she wished, that she could apply to the Court to have the search order discharged or that she could seek independent legal advice. The defendant informed the independent solicitor that she wished to seek independent legal advice. At this time, the defendant went back into her house and left the search party outside. About 25 minutes later, the independent solicitor received a telephone call from the defendant's solicitor. The defendant's solicitor asked for a detailed explanation as to what the search party was authorised to search for. The independent solicitor gave an explanation to the defendant's solicitor. The conversation then terminated. About 15 minutes later, the defendant's solicitor again telephoned the independent solicitor and informed her that the defendant intended to comply with the search order. The independent solicitor asked whether it was necessary to serve the defendant's solicitor with a copy of the search order and other Court documents that day. The defendant's solicitor responded that this would be unnecessary, as the defendant would bring the documents into her office when she attended on the following Monday.

11 The defendant then let the search party into her home and co-operated with the search party in identifying her computers and other electronic data storage devices. No complaint is made about the execution of the search order.

12 At no time during the course of the execution of the search order, did the defendant seek to avail herself of the opportunities provided for in the search order to claim that information derived from that execution may tend to incriminate her. In particular, the defendant did not gather together any things which she believed may tend to incriminate her and hand those things to the independent solicitor in accordance with paragraph 12(c) of the search order. Nor did the defendant object to the independent computer expert taking copies of the hard drives of two computers.

13 During the course of the search, the independent computer expert took digital copies of two computer hard drives and took possession of some CDs and floppy disks. I will call these the "seized items". The seized items were taken by the independent solicitor and stored by her until she provided them to the independent computer expert, to enable the independent computer expert to search them and provide a report of that search.

14 At no time have the plaintiffs or their legal advisers been informed of the information contained in the seized items or in the independent computer expert's report. This information remains confidential from them. However, it is known to the independent solicitor and the independent computer expert.

15 On the day following the execution of the search order, 5 July 2008, a private investigator engaged by the plaintiffs observed the defendant place a number of plastic rubbish bags into a public rubbish bin in Malvern. These bags were retrieved, and amongst other things, appear to contain letters or copy letters which have been torn up into small pieces and which may have been printed with the same ink which was used in the preparation of some of the letters allegedly sent by the defendant.

16 The search order was made returnable on 18 July 2008. It was adjourned on two occasions until 31 July 2008. The stated purpose of the adjournments was to enable the independent computer expert to complete her report.

17 Also on 18 July 2008, the solicitors for the defendant wrote to the solicitors for the plaintiffs and stated, pursuant to paragraph 24(c) of the search order, that the defendant objected to compliance with paragraph 23 of the search order on the ground that to do so may tend to incriminate her. The objection was stated to extend all to the information required under paragraph 23.

18 On 30 July 2008, the independent computer expert provided her report to the independent solicitor. On 31 July 2008 the independent solicitor filed her report. That report refers to the independent computer expert's report as an attachment. However, having regard to the claims made by the defendant that all information concerning the letters may tend to incriminate her, the independent solicitor retained the independent computer expert's report in her possession. A copy of it has since been provided to the Court.

19 At the hearing on 31 July 2008, the defendant gave notice to the plaintiffs that, in addition to seeking to avoid compliance with paragraph 23 of the search order on the ground of possible self-incrimination, the defendant also wished to contend that neither the plaintiffs nor their solicitors should be permitted to inspect the seized items or the independent computer expert's report. The defendant sought an order for delivery-up to her solicitors of the seized items and the independent computer expert's report. Directions were made for the defendant to file any affidavit material upon which she wished to rely in support of her contentions. As a result, the existence of the defendant's affidavit in the Family Court proceeding, in which she denies sending the first two letters, was deposed to.

20 In these circumstances, it was submitted on behalf of the defendant that the orders which she seeks should be made because disclosure of the information contained in the seized items and the independent computer expert's report, and as required by paragraph 23 of the search orders, may tend to incriminate her. In this regard, it was submitted that the information may tend to expose the defendant to prosecution for two indictable offences. First, for perjury in contravention of s 314 of the Crimes Act 1958 (Vic). Second, for stalking under s 21A of that Act.

21 The plaintiffs oppose the orders sought by the defendant. It is submitted on behalf of the plaintiffs that the application by the defendant for delivery-up of the seized items and the independent computer expert's report could not be maintained because the defendant had waived her right to claim the privilege against self-incrimination in respect of any information deriving from the execution of the search orders. In the alternative, it was submitted that the evidence did not disclose a sufficient risk that the information might tend to incriminate the defendant. It was submitted that the defendant's applications should be refused and that she should be required to comply with paragraph 23 of the search orders. Finally, it was submitted on behalf of the plaintiffs that, in any event, the Court should not order delivery-up of the seized items and the independent computer expert's report to the defendant or her solicitors because there is a real risk that the defendant will destroy the seized items and the report.

22 The privilege against self-incrimination has been described as a "fundamental ... bulwark of liberty".[2] The privilege is not a mere rule of evidence. It is "a basic and substantive common law right".[3] The privilege may be abrogated by statute or waived "but, that aside, it has generally been accepted that it is without 'real exception'".[4]

23 The mere assertion of the privilege against self-incrimination is not conclusive.[5] In order to sustain the privilege, it must be apparent to the Court from the circumstances of the case that there are grounds to "apprehend danger" to the person claiming the privilege, and those grounds "must be reasonable, rather than fanciful".[6] Put another way, there "must be a real and appreciable risk of criminal proceedings" before the privilege can be invoked.[7] It is enough that such a risk arises indirectly from disclosure of the information which the person claiming the privilege wishes to withhold.[8] An indirect risk will arise where it appears that disclosure of the information sought to be withheld will or might expose the person claiming the privilege "to greater jeopardy than would otherwise be the case".[9]

24 It is clear that the privilege against self-incrimination may be waived expressly.[10] However, although there are statements that the privilege may be the subject of implied waiver,[11] these statements have been doubted.[12] As will appear, it is unnecessary to determine whether, or to what extent, the privilege against self-incrimination can be the subject of implied waiver.

25 The parties accepted that, if the privilege against self-incrimination is capable of implied waiver, the relevant principle to apply is that stated by the High Court in Mann v Carnell.[13] In that case Gleeson CJ, Gaudron, Gummow and Callinan JJ stated the common law principles applicable to waiver of legal professional privilege in the following terms:

Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege ...

Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is 'imputed by operation of law'. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege ... What brings about the waiver is the inconsistency, which the courts, when necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large."[14]

III IS THERE A REAL AND APPRECIABLE RISK OF CRIMINAL

26 In my view, the facts as they are presently known to the plaintiffs may be enough to justify an inference, on the balance of probabilities, that the defendant is the author of the letters and that she sent them. In these circumstances, disclosure of the information which is contained in or may be derived from the seized items, from the independent computer expert's report or from compliance by the defendant with paragraph 23 of the search orders, gives rise to a real and appreciable risk of prosecution for perjury in respect of the affidavit sworn by her in the Family Court. I reject the submission made on behalf of the plaintiffs that, because this risk already exists, the privilege against self-incrimination is not open in the circumstances of the case. That submission is obviously inconsistent with statements in Reid v Howard that the privilege remains open where an increased risk will or may arise from disclosure of the information which the person claiming the privilege wishes to withhold.[15]

27 In these circumstances, it is unnecessary to decide whether disclosure of the information will or may expose the defendant to an increased risk of prosecution for the offence of stalking under s 21A of the Crimes Act. However, in my view, the defendant is entitled to claim the privilege against self-incrimination in respect of that possibility also. The sending of the five letters may be capable of constituting a "course of conduct" with the intention of causing "mental harm" to the plaintiffs or one or more of them, in contravention of s 21A(1) of that Act.

28 Further, in this regard, the existence of a risk of prosecution can be seen as real, and not fanciful, in circumstances where, as I was informed by both counsel, one of the plaintiffs has already reported the matter to the police. The fact that the police have determined that, on the present information, they will take no steps is not to the point. The fact that the matter was referred by one of the plaintiffs to the police demonstrates that, if the information is provided to the plaintiffs, there is a real risk that they will either seek leave to refer the information to the police, notwithstanding that it was obtained under compulsory process for the purposes of this proceeding, or will seek to tender the information in evidence at the trial of the proceeding in open court. In either case, the risk to the defendant of a prosecution against her will or may be increased.

29 The question remains whether, prior to the privilege being claimed, it was the subject of an express or implied waiver.

30 It was submitted on behalf of the plaintiffs that the defendant expressly waived the privilege for all purposes connected with the search orders. It was submitted that the express waiver arose from the "culmination" of the following matters:

(1) Prior to execution of the search orders, the independent solicitor explained the terms of the search order to both the defendant and to her solicitor;

(2) Following these explanations, the defendant obtained advice from her solicitor on the telephone;

(3) After the defendant had obtained that advice, her solicitor informed the independent solicitor supervising the execution of the search orders that the defendant intended to comply with the search order;

(4) The search then proceeded and the defendant co-operated with the search party in locating the listed items referred to in the search order;

(5) The defendant did not claim the privilege against self-incrimination during the course of execution of the search order, either under paragraphs 12 and 13, under paragraphs 20 and 21 or at all.

31 I do not accept that these matters, taken singly or in combination, constituted an express waiver by the defendant of her right to claim the privilege against self-incrimination in respect of further disclosure of the information contained in the seized items or which may be contained in the independent computer expert's report. I accept that the defendant and her solicitor, by their conduct, expressly waived the defendant's right to object to the seized items being taken into the custody of the independent solicitor, and also to the independent computer expert preparing a report based upon the information contained in or to be derived from the seized items. However, that waiver did not extend to the further right of the defendant to claim that the operation of paragraphs 23 and 24 of the search order may tend to incriminate her.

32 Furthermore, prior to the plaintiffs or their legal advisers being informed of the information contained in the seized items or in the independent computer expert's report, the defendant objected to the provision of the information or the report to them. Accordingly, the information and the contents of the report remain confidential from the plaintiffs and their legal advisers.

33 As appears above, the law attaches great significance to the right to claim the privilege against self-incrimination. Furthermore, the obvious intent of the search order is to protect the defendant's right to claim the privilege, by providing a series of opportunities for her to do so. In these circumstances, the waiver which has occurred should be limited to that which has in fact taken place, and not to further disclosure of the information contained in or derived from the seized items. For the reasons stated above, such a further disclosure would or may expose the defendant to an increased risk of criminal prosecution.

34 It was further submitted on behalf of the plaintiffs that, in any event, the Court should find that the privilege has been impliedly waived. Reliance was placed upon the abovementioned conduct of the plaintiffs and their solicitors, combined with the failure of the defendant to raise the privilege as an objection to providing information until 18 July 2008. Assuming, but not deciding, that the privilege can be the subject of implied waiver, I do not accept that there has been any implied waiver. As appears above, the information contained in or which may be derived from the seized items has not been disclosed to the plaintiffs or their legal advisers. In these circumstances, there is nothing inconsistent in the defendant seeking to maintain the confidentiality of the information from them. The search order contains a number of opportunities to claim the privilege against self-incrimination. Waiver of one opportunity should not be seen as a waiver of all opportunities, unless the position is reached where the conduct of the defendant is inconsistent with her maintaining the confidentiality of the information arising from the search orders. That stage has not been reached.

V SHOULD THE COURT ORDER RETURN OF THE SEIZED ITEMS AND THE

35 It was submitted on behalf of the defendant that, having raised a valid objection to further disclosure on the ground of the privilege, the Court should make orders for the delivery-up, destruction and/or return of the seized items, any document or thing containing or evidencing the information contained in the seized items and all drafts and copies of the independent computer expert's report.

36 It was submitted on behalf of the plaintiffs that no good reason has been shown as to why orders to this effect should be made. Reliance was placed upon the fact that the seized items were lawfully obtained. Further, having regard to the actions of the defendant on the day following execution of the search order, it was submitted that there is a real risk that the defendant will act so as to destroy the seized items, any information derived therefrom and all copies of the independent computer expert's report if these were returned to her or her solicitors. Reference was made to s 254 of the Crimes Act, which makes it an indictable offence for a person who knows that a document or thing of any kind is or is reasonably likely to be required in evidence in a legal proceeding to destroy or conceal that document or thing or to render it illegible, undecipherable or incapable of identification.

37 I will not make the order sought by the defendant. Taking the evidence as a whole, I infer that the risk identified by counsel for the plaintiffs is real and not insubstantial. In these circumstances, having regard to the provisions of s 254 of the Crimes Act, the evidence which was lawfully obtained from the execution of the search order should be preserved in a manner designed to ensure its confidentiality unless the Court otherwise orders.

38 In order to prevent the independent solicitor and the independent computer expert being inconvenienced any further, or being placed under onerous obligations of confidentiality, I will order that the seized items, any document or thing containing or evidencing the information contained in the seized items and all drafts and copies of the independent computer expert's report be delivered by the independent solicitor and the independent computer expert to the Court. The Court will then hold that material in a sealed container which is not to be opened unless the Court so orders.

39 The effect of my determination of the issues raised for adjudication is that the defendant has made a valid objection, on the ground of her privilege against self-incrimination, to disclosure to the plaintiffs of any information contained in or derived from the seized items. In these circumstances, the search order has no further work to do. I will hear the parties as to the precise form of orders and as to the costs of the application for, and consequent upon the making of, the search order.

40 For the reasons stated, I will make orders requiring the independent solicitor and the independent computer expert to deliver-up to the Court the seized items, any document or thing containing or evidencing the information contained in the seized items and all drafts and copies of the independent computer expert's report. I will hear the parties as to the precise form of orders.

[1] Supreme Court (General Civil Procedure) Rules 2005.

[2] Pynboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328, 340.

[3] Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 11.

[4] Ibid, 12 per Toohey, Gaudron, McHugh and Gummow JJ, 5 per Deane J.

[5] Jackson v Gamble [1983] VicRp 51; [1983] VR 552, 555-6.

[6] Sociedad Nacional de Combustiveis de Angola U.E. & Lundqvist [1991] 2 QB 310, 324-5.

[7] Registrar v Craven (1994) 126 ALR 668, 685.

[8] Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 6-7 per Deane J, 10 per Toohey, Gaudron, McHugh and Gummow JJ.

[11] For example Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412, 423-4 per Kirby JA (as he then was).

[12] For example Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 65 ACSR 264, [18]-[24] per Finkelstein J.

[13] [1999] HCA 66; (1999) 201 CLR 1.

[14] Ibid, [28]-[29] (citations omitted).

[15] Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 6-7 and 10.