Sage v CFS22

BROMWICH J: 1 These are reasons for the delayed sentence of imprisonment imposed upon the respondent for contempt of the Australian Crime Commission. By force of statute and also by regulation, the Commission is also known interchangeably as the Australian Criminal Intelligence Commission. The respondent's contempt, which he admits, comprises refusing to answer two questions on two separate examination days as to the identity of certain persons who were involved with him in the commission of a serious criminal offence. He gave evidence as to what he had done while refusing to identify [REDACTED] other participants, as well as giving other evidence. 2 The applicant, Mr Geoffrey Sage, is an Examiner appointed under s 46B of the Australian Crime Commission Act 2002 (Cth). On 7 March 2022, Mr Sage issued a summons to the respondent under s 28(1) of the Act. The summons required the respondent to appear at an examination on [REDACTED]. The summons was served on the respondent in person on[REDACTED]. Among the documents annexed to the summons were explanatory notes, which informed the respondent that he could consult a lawyer, and advised that he must answer any questions as required by the examiner, together with warnings about criminal offences and contempt for not complying with such requirements. 3 The respondent attended the examination on [REDACTED] and again on [REDACTED]. He was represented by counsel, who also appears for him in this proceeding. I have considered all of the transcript of the examination on both days, and read closely the particular pages and passages relied upon by the parties. In short, the respondent answered [REDACTED] other questions [REDACTED] on the first day, and [REDACTED] on the second day, [REDACTED]. On both days he refused to identify the other persons involved in the criminal offence for which he was sentenced to a lengthy term of imprisonment. He expressed fears for his and his family's safety and was not satisfied that the Commission could or would take sufficient steps to protect him and his family. 4 The fears the respondent expressed in this matter, while not specific in referring to any direct threat having been made, were not generalised either, as Mr Sage contends. It was made clear enough during the examination that the unnamed persons involved in the previous criminal offending were the direct or indirect source of the fears he held. The fears expressed were not inherently implausible, especially given some aspects of what took place between the two examination days, which is not necessary or desirable to spell out. This goes some way to mitigate the seriousness of the non-compliance. 5 The following general summary of what took place at the examination on the two days suffices for present purposes: (a) the respondent took an affirmation; (b) after introductory and explanatory matters over several pages, he answered all questions asked of him on a range of topics [REDACTED], including lower level criminal activity on his part; (c) there was then a lunch break, after which the respondent was asked about his involvement in [REDACTED] offences, to which he answered in relation to his conduct and referred to other persons, without naming them, and to being charged with a [REDACTED] offence; (d) he was then asked about prior activities of the same kind, and again described what he had done, without identifying other persons he dealt with, unless he was unable to do so due to the passage of time or like reasons; (e) the questioning turned to specific transactions and he was told names would be needed, which he refused to supply, asserting that if he said something and it came out, "I'm dead" and like fears; (f) he was asked if anyone had specifically made threats against him, and said "No, not - I've never given anyone up, so I've got no need to"; (g) a debate then ensued about the Commission's secrecy, but the respondent said that he had been in gaol because he did not give anyone up, and if he put a name out there, that would get him shot or stabbed, and he also did not want to put his family in danger; (h) Mr Sage insisted upon an answer providing a name, and the respondent was then given a chance to speak to his counsel, with the examination adjourning for some 20 minutes; (i) upon resumption, the respondent was given a warning about it being both an offence punishable by up to five years' imprisonment, and a contempt which could result in him being held in prison indefinitely if he failed or refused to answer a question; (j) the respondent said that he would like to be able to answer, but could not because of the ease of it becoming known that he had supplied information, and he did not want to put himself or his family in that position; (k) he further said that if he went to gaol over refusing to answer, that painted a picture that he had not said anything, and again said he would not identify the person who was the subject of the question relating to the first contempt charge; (l) he further said that he understood he would go to gaol, and he had answered every other question put to him, but he was not going to name anyone, which was repeated in response to several further questions, and in particular to the question the subject of the second contempt charge. 6 Counsel for the respondent on both examination days made serious attempts to resolve the impasse, characterising the respondent as having a genuine fear in relation to the provision of the identification information sought, mainly because of the risk of it leading to him being identified as the only possible source of that information provided if it was deployed in some way, in context directly or indirectly to the persons in question. 7 Mr Sage explained the operation of s 34A of the Act, as required before a contempt proceeding under that section could be brought, and on both days adjourned the examination to give the respondent time to take further advice from counsel and to consider his position. It is clear that counsel advised the respondent of the consequences of not answering the two questions. It is equally clear that the respondent was more concerned about the consequences of answering the questions, than the consequences of not doing so. 8 On 29 June 2022, as foreshadowed, this proceeding for contempt under s 34B and s 34C of the Act was commenced by Mr Sage, by an originating application and statement of charge. 9 On 26 July 2022, Mr Sage's solicitors wrote to the respondent, inviting him to purge his contempt. He did not respond to that letter and has never given any indication of an intention to purge his contempt, either to the Commission or to this Court. In the circumstances, I am satisfied that the contempt will not be purged without coercion, but equally that coercion without meaningful mitigation of the risk feared to flow from capitulation is not likely to work. 10 On 1 August 2022, the respondent's solicitors advised the Commissioner and the Court by email that he accepted that on [REDACTED] he did refuse to answer questions which the examiner required him to answer, in substance indicating that he would plead guilty to two charges of contempt. 11 On 24 August 2022, at the commencement of the hearing of the originating application and statement of charge, the respondent was provided with a copy of the statement of charge, given an opportunity to read it, directed to its contents as to the two questions, and he entered pleas of guilty to contempt, by reason of refusing to answer those two questions. 12 The contempt hearing was conducted by the reading of affidavits, the tendering of documents, and the making of submissions both orally and in writing. The respondent gave brief oral evidence as to his personal circumstances, which was not challenged and which I accept. There was no oral evidence from anyone else. 13 There is no dispute between the parties that in all the circumstances the respondent must be sentenced to a period of imprisonment. The only live issues for determination are whether that sentence should be for a fixed duration (and if so, for how long), for an indeterminate period, or whether it should be immediately suspended as the respondent seeks.

The legislative framework 14 The Commission is established by s 7 of the Act. It has a wide range of functions set out in s 7A including the obtaining, use and dissemination of criminal information and intelligence, and conducting special operations. The performance of its functions includes examinations conducted by examiners. 15 Examinations are a key part of the Commission's functions, enabling it to obtain information that would not otherwise be available or only be able to be obtained after lengthy and detailed investigations, assisting in understanding how serious and organised crime operates, and helping to produce intelligence information to use and to disseminate to law enforcement agencies: see p.28 of the Explanatory Memorandum to the Law Enforcement Legislation Amendment (Powers) Bill 2015 (Cth). 16 A person may be compelled by summons to attend an examination, and at the examination that person may be compelled to be sworn or take an affirmation and to answer questions and to produce documents or other things. The consequences for non-compliance with the obligation to attend an examination, to be sworn or take an affirmation, to answer questions, or to produce documents or other things; or for giving false or misleading evidence or obstructing or hindering the Commission or an examiner (including in relation to an examination), may be prosecution for an indictable offence provided for by ss 30(1), 30(2), 33 and 35 of the Act. 17 A more timely and responsive remedy for enforcing and promoting compliance with examination requirements, especially when the need for such compliance is ongoing, is a proceeding such as this for contempt of the Commission provided for by s 34A of the Act. Such contempt proceedings may concern some of the same conduct that is criminalised, namely of failure to attend an examination, of refusing or failing to be sworn or take an affirmation and of failing or refusing to answer questions or produce documents or other things. 18 Section 34B bestows jurisdiction on this Court and on the State and Territory Supreme Courts to hear a contempt application, subject to preconditions being met as to the witness being informed of the proposed application and the application being accompanied by a certificate stating the grounds and evidence. 19 For the purposes of determining whether a person is in contempt of the Commission contrary to s 34A of the Act, Chapter 2 of the Criminal Code (Cth) applies as if such a contempt was an offence and references to criminal responsibility were references to a person being responsible for such a contempt: s 34B(6). Chapter 2 of the Criminal Code contains the general principles of criminal responsibility, including in particular the conventional legal standard of proof of beyond reasonable doubt: s 13.2. This mirrors the common law obligation to prove an alleged contempt beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 per Brennan, Deane, Toohey and Gaudron JJ at 534.5 and per McHugh J at 535.5. While s 34B(6) has the effect of imposing criminal law requirements as to what must be proven to establish contempt, it does not dispense with the real distinction between contempt proceedings, even when essentially criminal in nature, and ordinary criminal proceedings. Even a proceeding what was historically regarded as a criminal contempt is not a criminal proceeding: see Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90 per Besanko, Wigney and Bromwich JJ at [24]-[25]. 20 Importantly, there is no equivalent provision to s 34B(6) creating a like regime for the imposition of sanctions for contempt as there are for sentencing, imprisonment and release of federal criminal offenders in Part 1B of the Crimes Act 1914 (Cth). While Part 1B may be used as a convenient general guide or checklist for the imposition of sanctions for contempt, especially for conduct that is complete rather than ongoing, it does not apply as if contempt was an offence and does not otherwise apply by force of law: see by analogy Australian Securities and Investments Commission v Whitebox Trading Pty Ltd [2017] FCAFC 100; 251 FCR 448 per Allsop CJ, Middleton and Bromwich JJ. It follows that the statutory restrictions and obligations in Part 1B do not apply to this proceeding. 21 The remedy of commencing a contempt proceeding is generally going to be more appropriate when compliance with the obligation of attendance at an examination, or with requirements to be sworn or take an affirmation, or to answer questions or produce documents or other things, is still sought, such that coercion to comply is the most important objective, rather than punishment and related objectives such as for a criminal offence. This contempt proceeding has as its main objective a remedial or coercive effect, primarily to compel obedience, rather than to punish for disobedience, with contemnors like the respondent at least in theory being in a position to "carry the keys of their prison in their own pockets": see Kazal at [22(1)], citing Witham v Holloway at 532, in turn quoting from the United States case of In re Nevill (1902) 117 Fed Rep 448 at 461. That is so even though the historical distinction between civil contempt and criminal contempt was found in Witham v Holloway to be largely illusory and unsatisfactory. The Commission generally just wants compliance to be compelled, not the examinee to be punished except to secure that outcome.

Sentencing principles for contempt of the Commission 22 The range of penalties available to punish for contempt include prison, including for an indefinite period of time, a fine, sequestration of assets, or a suspended sentence: Australian Competition and Consumer Commission v Info4pc.com Pty Ltd (2002) 121 FCR 24 per RD Nicholson J at [138], endorsed by French, Emmett and Dowsett JJ in Hughes v Australian Competition and Consumer Commission [2004] FCAFC 319; (2016) 247 FCR 277 at [55]. In some cases of contempt involving failure or refusal to comply with the requirements of Commission examinations, there may be little alternative but to impose a sentence of imprisonment, with the only real debate being whether the sentence should be indefinite or for a fixed term, and perhaps what other provision should be made. In other cases, the competing considerations may be more finely balanced. This is such a case. 23 There are a number of decisions of this Court in recent years that have comprehensively considered the purposes and the penalties that may be appropriate for examination-related contempt of the Commission and like law enforcement bodies with coercive powers, such as royal commissions, drawing upon contempt of court cases as well. In Australian Crime Commission v DTO21 [2022] FCA 288, Thawley J succinctly summarised the burden of a number of decisions of this and other courts: [29] The effectiveness of the administration of justice depends upon compliance by witnesses with the legal obligation to answer relevant questions in proceedings, whether those proceedings are in a court of law or before some other tribunal or authority which Parliament has empowered to compel answers: Von Doussa v Owens (No 3) (1982) 31 SASR 116 at 117-8 (King CJ, Zelling and Wells JJ agreeing), referred to by White J in the present context in Anderson v DKH18 [2018] FCA 1571 at [24]. [30] The statutory scheme recognises that answers are sought by the ACIC in the public interest, for the protection of the community, and in circumstances where prompt answers are often highly desirable. The scheme has, as a principal object, the introduction of "a compelling incentive for an unco-operative witness to co-operate in a timely way, by providing the information sought while it remains useful for the ACC's purposes": Hannaford v HH [2010] FCA 1214; (2010) 205 A Crim R 366 at [57]-[59] (Dodds-Streeton J); Anderson v DKH18 [2018] FCA 1571 at [26]-[28]. [31] In Anderson v XLVII [2015] FCA 19; (2015) 319 ALR 139 at [49], White J observed that "[a] principal purpose of the enactment of ss 34A-34F was to provide the ACC with a means of dealing with uncooperative witnesses which was quicker than the conventional prosecution process". His Honour referred to the explanatory memorandum for the Crimes Legislation Amendment (Serious and Organised Crime) Act (No 2) 2010 (Cth) in which the Minister said: Allowing an examiner to refer a person to a Court to be dealt with for contempt will provide a swift mechanism for dealing with uncooperative witnesses as contempt proceedings bring with them the threat of immediate detention. It is anticipated that the new contempt provisions will motivate an uncooperative witness to reconsider his or her position and comply with the requirements of an examination, and avoid the immediate threat of detention. [32] His Honour then stated at [49(2)]: The purposes of punishment for a contempt constituted by a refusal to answer questions in a Court or Commission of Enquiry are said to be retribution for the contempt, coercion of the person into answering the question, and the deterrence of others: Wood v Galea (1995) 79 A Crim R 567 at 571; Von Doussa v Owens (No 3) (1982) 31 SASR 116 at 118; Hannaford v HH [2010] FCA 1214, (2010) 205 A Crim R 366 at [39]; [33] In Wood v Staunton (No 5) (1996) 86 A Crim R 183 at 185, Dunford J identified considerations relevant to sentencing for criminal contempt as including: (1) the seriousness of the contempt proved; (2) whether the contemnor was aware of the consequences to himself of what he did; (3) the actual consequences of the contempt on the relevant trial or inquiry; (4) whether the contempt was committed in the context of serious crime; (5) the reason for the contempt; (6) whether the contemnor has received any benefit by indicating an intention to give evidence; (7) whether there has been any apology or public expression of contrition; (8) the character and antecedents of the contemnor; (9) general and personal deterrence; and (10) denunciation of the contempt. 24 Each of the above list of considerations from Wood v Staunton (No 5) (1996) 86 A Crim R 183 was addressed by the parties, as summarised below. 25 A further material consideration is whether the contemnor has been given an opportunity to purge the contempt, and if so, whether that has taken place. The need for the coercive effect of a sentence is greater if that opportunity has been given and not acted upon, and it may add weight to the need for or value of an indeterminate sentence. As Thawley J pointed out in DTO21 at [37]: It has been observed that, because of the importance of the element of coercion, an order for imprisonment for an indefinite period will often be appropriate: Wood v Galea (1995) 79 A Crim R 567 at 573; Von Doussa v Owens (No 3); Hannaford v HH at [60]-[63]; Royal Commissioner v Staunton (unreported, Supreme Court of New South Wales, Dunford J, 8 June 1995) at [26]-[27]; XLVII at [49(4)]; CRA20 at [34]. Indeterminate detention is inappropriate if the person has purged his or her contempt or if it is no longer necessary to obtain answers to the questions giving rise to the contempt: Wood v Galea at 573; XLVII at [49(5)]. 26 It is worth noting that a generalised fear based on unfounded claims is ordinarily given less weight when considering the reasons of contempt. In DTO21 at [62] Thawley J makes the following observation: The respondent's fear was expressed in general terms. There is no evidence of any specific threat and the evidence does not enable any reliable assessment of whether the fear is well founded. The examination was held in private and only ACIC staff were present. There are, of course, risks which are inherent in being involved in criminal activity of the type being investigated: CRA20 at [46]; BYF19 at [63]. This factor is not ordinarily given significant weight where the fear is disputed and the evidence does not enable a reliable assessment of whether the fear is well founded: R v Drever [2010] SASCFC 27 at [24] ; Corruption and Crime Commission v Allbeury(No 2) [2011] WASC 26; (2011) 205 A Crim R 386 at [42] -[43] ; Hannaford v HH (No 2) [2012] FCA 560; (2012) 203 FCR 501 at [33] ; BYF19 at [58]-[61]; GPY18 at [31]; CRA20 at [45].

Consideration of the competing arguments 27 It is convenient to address the competing arguments by reference to list of 10 considerations from Wood v Staunton (No 5) reproduced above, given that the competing submissions were framed in that way, supplemented with the issue of purging contempt.

The seriousness of the contempt and the reasons for it 28 Mr Sage points to the terms of the special operation to which the examination was directed and broadly describes what took place at the examination on both days, including in particular the two questions that the respondent refused to answer. He characterises the two contempt charges as deliberate, repeated and serious, taking place in the context of an investigation to gather information and intelligence on criminal wealth activity that may be connected to offences that involve violence, extortion, or serious drug offences. 29 Mr Sage relies upon the observation made by Abraham J in Lusty v CRA20 [2020] FCA 1737 at [41] to the effect that such refusal undercuts the effectiveness of the legislative scheme that authorises compulsory examinations, and that the Commission would be hamstrung if all witnesses adopted the approach of the respondent, including in aid of investigations of which the examination was a part being of significant importance to the community, including the serious impact of [REDACTED], with deterrence playing a prominent role. 30 Mr Sage characterises the reasons given as being no more than generalised fears that should be afforded little weight. As foreshadowed above, I am unable to accept that is a fair or sufficient characterisation of the reasons given by the respondent. While he did not have clear and specific knowledge of what might happen to him or a member of his family, he gave a clear enough indication of what might reasonably take place and who would have an interest in carrying this out. That does not of itself excuse the contempt, but it has a material bearing on the likely effectiveness of coercion and the utility of an indefinite sentence. 31 The respondent otherwise counters with the observation that the issue of [REDACTED] was not central to this particular inquiry, as opposed to monetary proceeds, although [REDACTED] offences are identified. I am unable to accept the burden of this argument once regard is had to the intelligence function of the Commission and its role in better understanding the nature of criminal activity taking place, and the participants. This can be used to inform ongoing and future investigations, and not be confined to the past. 32 The respondent nonetheless helpfully points out that the burden of the questions that were not answered concerned the [REDACTED] offence that took place in [REDACTED], such that the respondent was summonsed [REDACTED] later. The identity information was therefore only sought after [REDACTED] delay. While the delay did not of itself render the information sought irrelevant, delay remains a relevant consideration, citing Anderson v BYFl9 [2019] FCA 1959 per Abraham J at [68] and at [83]-[85] in which the result was a sentence of eight months, suspended after serving four months upon the basis of being of good behaviour. 33 The respondent submits that while the refusal to answer the questions was admitted to be a contempt of the Commission, it was not motivated by deliberate disrespect. He had not refused to cooperate in any blanket way, with the contempt being limited to two questions with legitimate, if not legally acceptable, reasons being given after careful consideration of his position and the dangers he genuinely held. Those fears had been consistently held at the time of his criminal proceedings and repeatedly before the Commission. Those fears were not feigned or without substance. I accept those submissions. 34 The respondent relies upon contempt of court authority suggesting moderation of penalty where the reason for refusing to answer is fear for the safety of the witness or the witness' family, citing Principal Registrar of Supreme Court of NSW v Tran [2006] NSWSC 1183 per Buddin J at [36] and R v Razzak [2006] NSWSC 1366 per Johnson J at [64]-[65]. I would not read those cases as standing for such a blanket proposition, but a genuine and reasonable fear held by an examinee is necessarily to be taken into account in assessing the likelihood of a sentence having a practical coercive effect.

Whether the respondent was aware of the consequences of refusing to answer the questions 35 There is no dispute that the respondent was aware of the consequences of refusing to answer. It is perhaps a measure of the fears that he held that he was fully aware of the risk of imprisonment, but this did not cause him to change his stance. From his perspective, the disadvantages of compliance outweighed those of non-compliance, a familiar dilemma for someone in this position.

The actual consequences of the contempt on the special operation to which the examination related 36 The examination the respondent was required to attend was in relation to a special operation into criminal wealth, concerning such activities as money laundering, tax evasion, dishonesty and fraud offences and like areas of concern, as well as related or connected offences. The Board of the Commission, which includes the heads of all Australian Police Forces and the heads of other major law enforcement agencies, determined that this special operation was in the public interest, so the examination must be regarded as part of a serious and substantial law enforcement exercise. That said, the actual questions were not on their face of that degree of moment, addressed to relatively low level and localised conduct from some years ago. 37 If the respondent is not prepared to name the other participants, it is obvious that he will not be willing to be a witness against them. No sensible prosecutor could easily reach the conclusion that there were reasonable prospects of conviction of those individuals when such testimony would be indispensable. I therefore infer that the identification information sought is directed to the criminal intelligence function of the Commission, rather than its capacity to make any meaningful contribution to the possible prosecution of a [REDACTED] offence. Refusal to provide the information sought must therefore be regarded as being of some moment in the advancement of that intelligence objective. This largely meets the respondent's argument that the answers sought could not be said to be central to the inquiry being conducted. It is not surprising that the evidence Mr Sage relies upon does not spell out the significance of the information sought, or the specific use to which it might be put. But there is ample scope for some reassurance being given to the respondent as to the proposed limits on the use of the information so as to address his concerns and mitigate or even eliminate the risks that he fears.

Whether the contempt was committed in the context of serious crime 38 It is not in contest that the contempt was committed in the context of serious crime.

Whether the respondent has received any benefit by indicating an intention to give evidence 39 It is common ground that this has no bearing in this case.

Whether there has been any apology or public expression of contrition 40 I accept the respondent's submission that he was apologetic for not, from his stance, being able to answer. I also accept that he readily acknowledged that he was in contempt and was resigned to the consequences that might flow from that. That said, I also find that this, and the fact of the guilty plea can only be given limited weight in all the circumstances.

The character and antecedents of the respondent 41 There is no doubt that the respondent has a substantial, if not extensive, criminal history, with no prior history of contempt or like criminal offences. However, I also accept that he is making earnest endeavours to leave his criminal past behind him, run a legitimate business, have and maintain stable and supportive family life, and become a contributing member of society. I take into account a letter from [REDACTED] that reinforces that conclusion.

General and personal deterrence 42 It is common ground that general and specific deterrence is a factor, although there is nothing to indicate that the current contempt was otherwise than arising from a unique set of historical circumstances so that specific deterrence is not significant.

Denunciation of the contempt 43 It is common ground that this feature needs to be taken into account.

Purging of contempt 44 There is no doubt that the respondent has had ample opportunities to purge his contempt. Despite indications that this might occur, it has not in the absence of any coercion.

Conclusion 45 After hearing and observing the respondent's evidence, in the context of the documentary evidence that is before me, and having the benefit of considering written and oral submissions addressed above and beyond that, and considering the authorities to which I was taken and beyond that, I am satisfied that his fears were genuine and rational, but were most acute when he was in prison, [REDACTED]. I am satisfied that the respondent is likely to be amenable to purging his contempt with a reasonable measure of coercion in the right context and with the right measures being taken to protect him. I am not satisfied that it is in the interests of justice to go further than that and impose an indefinite sentence. 46 I have determined that it is necessary and appropriate in all the circumstances to impose a relatively short sentence of imprisonment upon the respondent, upon the basis that I am satisfied that if he does not succumb within that period, he will be unlikely to do so in a longer period or even an indefinite period. I also consider that the sentence should not commence until he has served the balance of his non-parole period [REDACTED], and should instead commence after he has had an opportunity to address the contempt while he is not in custody, so as to avoid that being necessary. [REDACTED], prison will be at its most effective when it is a threat to descend upon him if he does not change his mind. That said, the Commission will probably also need to compromise in order to get what it wants. 47 The foregoing are my reasons for making a declaration of contempt, orders for the respondent to serve a sentence of imprisonment for eight months to commence after the conclusion of his non-parole period and to be released after four months on condition that he be of good behaviour, and ancillary orders providing for the Commission and the respondent to find a mutually satisfactory way of him in substance purging the contempt. If that does not take place, the coercive effect of imprisonment will apply for a relatively confined period. I consider that this approach properly balances the competing considerations. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.