Entitment to privilege
81 This should be considered in the light of the procedure in Bax Global (Australia) Pty Ltd v Evans.
82 The privilege against self-incrimination is "a basic and substantive common law right" (Reid v Howard (1995) 184 CLR 1 at 11). Otherwise than by statute, it is not open to exception in civil proceedings and in particular is not subject to over-riding orders by which incriminatory disclosure may be made but the information disclosed can not be used in criminal proceedings against the disclosing party (ibid at 14-17).
83 However, a claim to privilege can impede protection and enforcement of the opposite party's civil rights, and can sometimes hinder the disclosing party in presenting his own case. Section 128 of the Evidence Act endeavours to balance the fundamental common law right with other demands of justice.
84 Section 128 applies if a witness objects to giving particular evidence on the ground of privilege (s 128(1)). If the court finds there are reasonable grounds for the objection, it is not to require that the evidence be given and is to inform the witness that he need not give the evidence but that if he does so a certificate will be given under the section (s 128(2)). If the witness gives the evidence, the court is to cause the giving of a certificate (s 128(3)), the effect of which is that the evidence and information obtained as a direct or indirect consequence of the witness giving the evidence can not be used against him (s 128(7)). As well, however, where the court is satisfied that the evidence may tend to prove the commission of an offence against Australian law but does not tend to prove the commission of an offence against a foreign law, and that the interests of justice require that the witness give the evidence, the court may require that the witness give the evidence (s 128(5)) and is to cause the giving of a certificate (s 128(6)).
85 As recounted in Bax Global (Australia) Pty Ltd v Evans, the procedure there considered was developed with a view to making disclosure orders as part of Mareva relief but subject to a s 128 certificate. The objective was that a plaintiff's civil rights could be protected and enforced consistently with recognition of the disclosing party's privilege and preservation from adverse consequences of incriminatory disclosure.
86 The procedure was described by Austin J -
"[40] … When an application for a disclosure order is made, as an order ancillary to Mareva orders which the Court has decided to make, the Court must first consider whether disclosure is necessary or appropriate to promote the purposes for which the Mareva relief is to be granted. The matters relevant to the Court's discretion to initiate a disclosure process include the breadth or specificity of the disclosure which is sought, the availability of alternatives such as discovery and interrogatories, the existence of other proceedings (especially criminal proceedings) relating to the same subject matter, and (whether there are concurrent criminal proceedings or not) the likelihood that the disclosure order may be open to objection on the ground of the privilege against self-incrimination. The mere existence of concurrent criminal proceedings does not ipso facto prevent a disclosure order from being made, as is shown by Vasil , National Australia Bank Ltd v Rusu and AMP General Insurance Ltd v Prasad . It may still be appropriate to initiate the disclosure process, allowing the disclosing party to make submissions about self-incrimination after the affidavit has been brought into court and inspected by the judge. However, where specific disclosure is sought of facts which go to the heart of the matters to be proved at the criminal trial, the better course may be for the Court either to stay the application for disclosure or even to deny the motion.
[41] If the Court decides to initiate the disclosure process, the procedure which it chooses is likely to depend on whether, on the one hand, an objection to disclosure based on the privilege against self-incrimination has been taken or is a real possibility, or on the other hand the disclosure order is unlikely in the circumstances to raise any question about self-incrimination. In the latter case, it is enough simply to express the order to be subject to any claim of privilege against self-incrimination, as Hodgson J did initially in Reid v Howard. In the former case, it is more appropriate to use the fuller procedure which I shall describe.
[42] The Court initiates the disclosure procedure by making an order that a disclosure affidavit be prepared and delivered to the judge's associate in a sealed envelope, together with directions that the affidavit not be filed or served on any other party, and that the further hearing be notified to the Director of Public Prosecutions. At that hearing the judge opens the envelope and inspects the affidavit. Any affidavit or oral evidence to support the witness' objection is then adduced, and submissions are heard as to whether for the purposes of s 128(2) there are reasonable grounds for the objection, even though at that stage the plaintiff's counsel has not had access to the affidavit which is the subject of the objection. The judge then rules on that question.
[43] If the decision is that there are no reasonable grounds for the objection, the witness' obligation to comply with the disclosure order remains and must be satisfied. If there are reasonable grounds for the objection, then the Court gives the witness the warning required by s 128(2). If the witness chooses to give the evidence after hearing the warning, the Court directs that copies of the affidavit be provided to the legal representatives of the other parties, but that the contents not be disclosed to any other person. The affidavit is formally read and objections to admissibility are taken in the normal way. If there is a risk that this process will disclose the contents of the affidavit to persons other than the deponent and the legal representatives of the parties, it may be necessary for the court to be closed during this process. Once the affidavit has been read, the s 128 certificate is given and attached to it.
[44] If the witness elects not to give the evidence, then the Court hears any further submissions as to whether it should require the witness to give the evidence under s 128(5), and makes a determination accordingly. If the Court decides to require the witness to give the evidence, then it follows the procedure for the reading of the affidavit as outlined above. If the Court decides not to require the witness to give the evidence, the judge directs that all copies of the affidavit be returned to the witness' legal representative and authorises their destruction.
[45] Where evidence is given to which a certificate applies, the witness is protected by s 128(7) and there is a risk to the prosecuting authorities that their evidence in the criminal proceedings may be corrupted by knowledge of the witness' civil evidence. For at least that reason, steps should be taken to limit the use and dissemination of the protected evidence. In the HPM Industries case, Young J agreed that the appropriate procedure was to permit only the plaintiff's lawyers to see the information, subject to conditions set by the Court. As I have mentioned, there may on occasions be a special risk of prejudice to the witness even though a certificate is given, also justifying orders restricting the inspection of the evidence.
[46] The procedure which I have described involves the Court inspecting the affidavit before deciding whether the contents of the affidavit must be given in evidence. It also involves the legal representatives of other parties having access to the affidavit, although only after the deponent has decided to give the evidence or the Court has decided to require that the evidence be given. In my opinion this procedure is appropriate, and some such course is necessary, in order to comply with s 128, even in light of Reid v Howard and Vasil ."
87 His Honour recognised differing views on whether the maker of the disclosure affidavit was a witness for the purposes of s 128(1), or whether it was necessary that the deponent give oral evidence: he preferred (at [36]) the view of Hamilton J in AMP General Insurance Ltd v Prasad [1999] NSWSC 349 to that of Young J (as Young CJ in Eq then was) in HPM Industries Pty Ltd v Graham (17 July 1996, unreported), and thought making the affidavit sufficient.
88 One matter evident in the procedure as described is that there will be some kind of preliminary assessment of "the likelihood that the disclosure order may be open to objection on the ground of the privilege against self-incrimination", see paras [40]-[41] in his Honour's description of the procedure. It is not entirely clear, but it seems that an overwhelming case of privilege could lead to refusal to make the disclosure order, presumably on the basis that a s 128(5) determination that the evidence should be given but with a certificate is unlikely; alternatively, a weak case of privilege could be left for a later claim, presumably on the basis that the disclosing party is unlikely to persist in or make a claim to privilege. No doubt subject to that, his Honour discussed when the decision to cause the issue of a certificate was made, and preferred (at [37]) the approach of Hamilton J in National Australia Bank Ltd v Rusu (6 April 1998, unreported) whereby there was an open mind until the disclosure affidavit was brought into court and inspected, as to both "whether there were reasonable grounds for the objection with respect to the privilege, and … whether to require under s 128(5) that the evidence be given subject to a certificate".
89 There can be no doubt that the appellant claimed privilege on 20 August 2003. So far as the respondents submitted that it was apparent from the orders made by Austin J that privilege had not been claimed, because by the proviso to order 3 and the procedure of order 4 his Honour left for the future a claim to privilege, the orders are explained by his Honour's adoption of the Bax Global (Australia) Pty Ltd v Evans procedure. So far as the respondents submitted that the appellant had not claimed privilege because he had not filed a notice of motion and affidavit in conformity with order 4, that is beside the point.
90 The appellant did not on 20 August 2003 support by evidence his claim to privilege. His affidavits of 22 August 2003 and 27 August 2003 were assertions, and hardly evidence. Evidence is not a necessity. Depending on the circumstances, tendency to expose to self-incrimination may be obvious or sufficiently discernible. As was said by Clarke JA in Accident Insurance Mutual Holding Ltd v McFadden (1993) 31 NSWLR 412 at 430 -
"Whether the answer may tend to incriminate the witness is a point which the court will determine, under all the circumstances of the case, as soon as the protection is claimed. It will do so without requiring the witness fully to explain how the effect would be produced, for if this were necessary, the protection which the rule is designed to afford to the witness would at once be annihilated: Taylor, (at 1247). However, the mere statement by a witness that he believes the answer will tend to incriminate him will not suffice to protect him from answering when the other circumstances of the case are such as to induce the judge to believe that the answer would not really have that tendency (at 1247-1248):
' ... In all cases of this kind the court must see, from the surrounding circumstances, and the nature of the evidence which the witness is called to give, that reasonable grounds exist for apprehending danger to the witness from his being compelled to answer. When, however, the fact of such danger is once made to appear, considerable latitude should be allowed to the witness in judging for himself of the effect of any particular question; for it is obvious that a question, though at first sight apparently innocent, may, by affording a link in a chain of evidence, become the means of bringing home an offence to the party answering. On the whole, as Lord Hardwicke once observed, 'these objections to answering should be held to very strict rules'. Vaillant v Dodemead , 2 Atk 524'."
91 The parties put submissions on whether Austin J had held that the appellant was entitled to claim privilege. The respondents referred again to the orders leaving a claim to privilege for the future. The appellant submitted in substance that his Honour's reasons implicitly accepted that privilege was there to be claimed. He said that his Honour had commented that the respondents claimed that the appellant "took monies from a bank account"; that adopting the Bax Global (Australia) Pty Ltd v Evans procedure presupposed self-incrimination and was designed to provide the protection of s 128 of the Evidence Act; that in the reasons of 27 August 2003 his Honour observed that if the Bax Global (Australia) Pty Ltd v Evans procedure were incorrect he would "be forcing [the appellant] to go down a path, even the first step of which would be in violation of his privilege"; and that his Honour specifically found as to staying order 5 that there was "nothing put before me today [which] suggests that there is any claim for privilege with respect to the preparation of accounts for the period up to 30 June 2002".
92 In the light of his explanation of the procedure in Bax Global (Australia) Pty Ltd v Evans, I consider that Austin J did not hold that the appellant was entitled to claim privilege. He clearly enough made the preliminary assessment that the disclosure order might be open to objection on the ground of privilege, and so decided "to initiate the disclosure process" (Bax Global (Australia) Pty Ltd v Evans at [41]). Consistently with his preference for the approach of Hamilton J in National Australia Bank Ltd v Rusu, he must have left for inspection of the appellant's affidavit whether there were reasonable grounds for the objection, and so left any decision as to entitlement to privilege until that time.
93 The respondents' submissions were in aid of the further submission that unless Austin J held that the appellant was entitled to claim privilege, his Honour's orders were not open to challenge. It was said that until it was found that compliance would tend to expose the appellant to self-incrimination the orders could be made and had to be complied with. The respondents accepted that if the judge found that whatever was in the disclosure affidavit would infringe the appellant's privilege, the order for delivery of the affidavit should not be made, and presumably they would take the same attitude to the order for passing accounts. But according to the submission, the time for claiming privilege and determination of entitlement to privilege was otherwise when the disclosure affidavit was "inspected" by the judge at the hearing appointed following its delivery to the judge's associate, and until that time the orders were good.
94 I do not think that is so, and in my opinion whether Austin J held that the appellant was entitled to claim privilege was a false issue in the appeal. There were three alternatives: that his Honour held that the appellant was not entitled to privilege; that he did not hold one way or the other; and that he held that the appellant was entitled to privilege. The first alternative can be put aside. The appellant had claimed privilege. Even if the second alternative were the case, an order should not have been made compliance with which would infringe the appellant's privilege if he was entitled to it. Determination of entitlement had to precede compliance, not follow it. If the procedure in Bax Global (Australia) Pty Ltd v Evans could compel infringement prior to determination of entitlement, that in itself made the procedure erroneous and made the orders following the procedure open to challenge.