CATCHWORDS Practice - Evidence - Subpoena duces tecum to corporation in action to recover a penalty ~ Whether subpoena should be set aside - Whether privilege against self incrimination exists. TRADE, PRACTICES COMMISSION v. 2.N.T. MANAGEMENT PTY. LIMITED & ORS. No. G.44 of 1978 Franki J. 1 March 1984 Sydney IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION Between: TRADE PRACTICES COMMISSION -and- T.N.T. MANAGEMENT PTY. LIMITED BRAMBLES HOLDINGS LIMITED MAYNE NICKLESS LIMITED YOUNGS TRANSPORT PTY. LIMITED ANSETT TRANSPORT INDUSTRIES (OPERATIONS) PTY. LIMITED EXPRESS FREIGHT PTY. LIM 2 ASSOCIATED STEAMSHIPS PTY LIMITED IPEC HOLDINGS LIMITED INTERSTATE PARCEL EXPRESS CO. PTY. LIMITED ORDERS JUDGE: Franki J. DATE OF ORDERS: WHERE MADE: Sydney THE COURT ORDERS THAT: 1. Each subpoena be set aside. 2. The plaintiff pay the costs applications. ) ) ) No. G.44 of 1978 Plaintiff First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant Sixth Defendant Seventh Defendant Eighth Defendant Ninth Defendant 1 March 1984 and 8 March 1984 each defendant in these CATCHWORDS Practice - Evidence - Subpoena duces tecum to corporation in action to recover a penalty - Whether subpoena should be set aside - Whether privilege against self incrimination exists. TRADE PRACTICES COMMISSION v. T.N.T. MANAGEMENT PTY. LIMITED & ORS. No. G.44 of 1978 Franki Jd. 1 March 1984 Sydney IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISTON ) Between: TRADE PRACTICES COMMISSION -and- T.N.T. MANAGEMENT PTY. LIMITED BRAMBLES HOLDINGS LIMITED MAYNE NICKLESS LIMITED YOUNGS TRANSPORT PTY. LIMITED ANSETT TRANSPORT INDUSTRIES (QPERATIONS) PTY. LIMITED EXPRESS FREIGHT PTY. LIMITED ASSOCIATED STEAMSHIPS PTY. LIMITED IPEC HOLDINGS LIMITED INTERSTATE PARCEL EAPRESS CO. PTY. LIMITED No. G.44 of 1978 Plaintiff First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant Sixth Defendant Seventh Defendant Eighth Defendant Ninth Defendant ORDERS JUDGE: Franki J. DATE OF ORDERS: 1 March 1984 and 8 March 1984 WHERE MADE: Sydney THE COURT ORDERS THAT: 1, Each subooena be set aside. 2. The plaintiff pay the costs of each defsndant in these applications. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY } No. G.44 of 1978 GENERAL DIVISION ) Between: TRADE PRACTICES COMMISSION Plaintiff -and- T.N.T. MANAGEMENT PLY. LIMITED BRAMBLES HOLDINGS LIMITED MAYNE NICKLESS LIMITED YOUNGS TRANSPORT PTY, LIMITED ANSETT TRANSPORT INDUSTRIES (OPERATIONS) PTY. LIMITED EXPRESS FREIGHT PTY. LIMITED ASSOCIATED STEAMSHIPS PTY. LIMITED IPEC HOLDINGS LIMITED INTERSTATE PARCEL EXPRESS CO. PTY. LIMITED 1 March 1984 First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant Sixth Defendant Seventh Defendant Eighth Defendant Ninth Defendant REASONS FOR JUDGMENT FRANKT J. Almost at the conclusion of the case for the Trade Practices Commission, defendant, a subpcena duces tecum was served on each with the "éxception of defendant served by the fourth defendant. Each required the its proper officer to produce certain documents. Bach of the defendants so served then made application that the subpoena served on it be set aside. With the consent of all the parties I commenced to hear all these applications together but, because of difficulties which arose, I subsequently separated the hearings but 1t is convenient to deal with all applications in this judgment. Senior counsel for the Commission outlined the reasons for the issue of the subpoenas at 9015-9016. I proceed to an examination of whether or not a subpoena duces tecum may be issued against a defendant in an action for a penalty where the purpose of the issue of the subpoena must be to assist the plaintiff in its action. Counsel for the second defendant submitted that the issue of the subpoena was improver (9196) and its use constituted a serious impropriety in the conduct of the case (9279). So far this case has been noteworthy for the determination with which it has been fought by the defendants. This is clearly evident from the number of interlocutory applications and appeals which have been made. I consider that it was not reprehensible to issue these subpoenas so as to raise the question of whether they had to be anstwered and, if so, how. Until they were issued the case had proceeded upon the basis that discovery could not be obtained nor answers to interrogatories compelled from a person against whom proceedings for a penalty had been brought. Indeed this was common ground in an action by the second defendant against the Commission and its Chairman in which I delivered judament on 27 October 1980 ((1980) A.T.P.R. 40-179). On 6 September 1983, in an unreported judgment in relation to earlier subpoenas which had been issued to the defendants in this case, I referred to Pyneboard Ptv. Ltd. v. Trade Practices Commission (1983) 57 A.L.d.R. 236 at p.238 where Mason A.C.J., Wilson and Dawson Jd., ina joint judgment, said they were "... content to assume, without deciding, that the privilege against exposure to ... a civil penalty is available to a corporation in Australia". I said that I intended to proceed upon the basis that this privilege against exposure toa civil penalty is available to a corporation. Davies J. in Trade Practices Commission v. George Weston Foods Ltd. (1979) A.T.P.R. 40-114 considered the question of whether the defendant, in an action for a penalty for a contravention of 5.45 of the Act, should be ordered to give discovery or to answer questions by way of interrogation. His Honour decided that the ordinary rules of discovery and interrogation did not apply because it was improper to call upon the defendant to disclose facts which make it liable to payment of a pecuniary penalty. Although his Honour used the word "improper", I doubt that his Honour was saying that there was anything reprehensible in the Commission seeking discovery and answers to interrogatories. At least in the subject proceedings the likelihood of an appeal by one party or another 1s real and it is not unreasonable for all parties to keep the possibility of appeal under consideration. In Pyneboard Pty. Ltd. v. Trade Practices Commission, supra, Mason A.C.d., Wilson and Dawson JJ. at p.238 had referred to the decision of the English Court of Appeal in Triplex Safety Glass Co. Ltd. v. Lancegave Safety Glass (1934) Ltd. [1939] 2 K.B. 395 and said: "The English Court of Appeal has held that the privilege of refusing to answer a question on the ground that the answer may tend to incriminate is available to corporations". Their Honours had referred to the position in America and to the position in relation to the Fifth Amendment to the Constitution. Brennan J. at p.248 said it was unnecessary to consider the question of whether the privilege against self-incrimination applied to corporations. Murphy J. likewise did not have to decide the question although he expressed the view that the history and reasons for privilege did not justify its extension to artificial persons such as corporations but accepted that a different view had been taken in Triplex Safety Glass Co. Ltd. v. Lanceqaye Safety Glass (1934) Ltd., supra. His Honour also referred to the decision of the House of Lords in Rio Tinto Zinc Corvoration v. Westinghouse Electric Corporation £19781 A.C. 547, a decision in which Triplex Safety Glass Co. Ltd. v. Lancegave Safety Glass (1934) Ltd. had been applied. In an interlocutory appeal in this case which was ultimately determined by the High Court, Rochfort v. Trade Practices Commission (1983) 57 A.L.J.R. 31 at p.36, Mason J. said: "However, in England it has been affirmatively decided that the privilege is available to corporations (Triplex Safety Glass Co. Ltd. v. Lanceagaye Safety Glass (1934) Ltd. £19393 2 K.B. 395; Rio Tinto Zinc Corporation) ..." Sitting as a single Judge of the Federal Court, [I consider that I am bound by the cases of Triplex Safety Glass and Rio Tinto Zinc Corporation. Senior counsel for the Commission said at the commencement of my hearing these applications (9175) that, when each subpoena was served, the Commission sent a covering letter which informed the defendant that, if the defendant intended to argue that it should be relieved from answering the subpoena on the ground that it was incriminating, the Commission would be prepared to argue the point without requiring the production of the relevant documents at that stage. The Commission also said that it was not seeking any documents to which professional privilege applied or any documents which had been discovered by the Commission, Senior counsel for the Commission submitted (9181) that "the existence of privilege against selif-incrimination could never bea ground for setting aside a subpoena, for the very reason it is only when the privilege 15 invoked and the court rules on it that the question arises". He also said he would accept such a claim without proof if made by counsel and that any such claim could be made while reserving the right to argue that it was not necessary. Senior counsel for the Commission also said that it would accept what might be called a "notional" claim for privilege which did not involve a defendant exposing itself to any comment for making the claim (9246). Counsel for certain of the defendants took what might be described as a reserved position that, if they had to answer the subpoenas, they would make a claim for privilege, whilst counsel for certain other defendants refused to make such a claim saying that it was not necessary (9182, 9198). All the subpoenas were, in general, ina similar form. They sought to require the defendants to produce to the Court a great number of documents, all of which presumably were thought by the Commission to be documents relevant to prove its case. A number of questions received some consideration, particularly in relation to Mayne Nickless, which ultimately do not require any detailed consideration by me, for examvole, whether, if the subpoena was properly issued and had to be answered, it was oppressive in one way or another. Counsel for the second defendant summarised his argument as: "It is a deeply entrenched rule that' the courts will not lend the aid of their processes for discovery or production of documents in proceedings for a penalty. This rule is sevarate and distinct from, although historically related to, the existence of the privilege against exposure to a penalty." I agree with the first sentence of this argument but not with the second sentence. I consider that there is binding authority, at least in the absence of waiver, for the view that the Court will not lend aid of its process for discovery or production of documents in proceedings for a penalty, but that this rule rests on the existence of privilege against exposure to a penalty. A case where the whole action is one for a penalty must be distinguished from a case where the question of a penalty does not arise directly in the action. This question was dealt with by Deane J. in Refrigerated Express Lines (A/asia) Ptv. Ltd. v. Australian Meat and Live-stock Corporation (1979) 42 F.L.R. 204. In that case the applicant sought injunctive relief and damages based on alleged contravention of the provisions of Part IV of the Trade Practices Act 1974 but 1t was not a claim for a penalty. -Deane J. distinguished the two categories and said at p.207: applicant sought penalties "Tt 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 (see , generally, per Isaacs J. in R v. Associated Northern Collieries (1910) 11 C.L.R. 738, at pp.741-748, Naismith v. McGovern (1953) 90 C.L.R. 336, at pp.341-342 and Martin v. Treacher (1886) 16 0.B.D. 507)." After distinguishing that category of cases to prevent and redress civil injury, his Honour said at p.208: "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 (emphasis added) 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 1s concerned, properly have no other intended consequence {see R. Vv. Associated Northern Collieries (1910) 12 C.L.R. at p.742). 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 (see Mexborough (Farl of) vy. Whitwood Urban District Council £18971 2 Q9.B. 111, at p.115 and Heimann v. Commonwealth (1935) 54 C.L.R. 126, at p.130)." In R. v. Associated Northern Collieries, supra, from that where the proceedings were not for the recovery of a penalty but the against various defendants in a civil action under ss. 4 and 6 of the Australian Industries Preservation Act 1906, No. 9. Isaacs J., as he then was, drew the distinction between a civil action to prevent or redress a civil wrong or redress a civil injury on the one hand and a civil action to recover a penalty on the other. At p.742 his Honour said: "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." At p.747 his Honour referred to Martin v. Treacher (1886) 16 Q.B.D. 507 at p.513 and Mexborough v. Whitwood Urban District Council (£18971 2 Q0.B. i111, at p.121 and said that the proper course was "to stop the matter in limine". At p.745 his Honour, after making reference to an American case, said: "The case is an illustration of the rule that, at whatever stage it appears to the Court the discovery may expose the defendant to penalties, no order will be made." As a single Judge it may be sufficient to do no more than refer to the words which I have quoted in the judgment of Deane J. which were quoted and accepted without qualification by Mason A.C.J., Wilson and Dawson JJ. in Pyneboard Pty. Ltd. v. Trade Practices Commission (1983) 57 A.L.d.R. at p.238 to reach the conclusion that there is no difference between the principles 10. applying to an order for discovery, production of documents or the provision of information in a case in which a penalty 1s sought. However, I have dealt more fully with the various submissions because of the detailed aqrguments presented to me and because of . the general history of appeals in this case. Senior counsel for the Commission also submitted that I was not concerned with pre-trial proceedings but with a subpoena issued during the conduct of the case and that the Commission wished to test the question of whether privilege applied to a corporation. None of these cases dealt with the possible effect of waiver. The category of cases where the object of the action is to impose and recover a penalty ona defendant is to be distinguished from cases such as Triplex Safety Glass Co. Ltd. v. Lancegqaye Safety Glass (1934) Ltd., supra, and Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation, supra, cases very relevant to the question of whether privilege against selif- uncrimination extends to a corporation. Senior counsel for the Commission sought to distinguish an application for discovery or to answer interrogatories from the issue of a subpoena. In my opinion I can see no difference in principle. 7 -- In Cavendish v. Cavendish [192617 P. 10, Lord Merrivale ll. considered the case where a subpoena duces tecum had been served on a husband respondent in a petition for divorce requiring him to produce certain documents. In that case the only issue was one of adultery and it was held that the subpoena must be discharged on the ground that an order for discovery could not be made against a party to the divorce proceedings where it was sought for no other purpose than to prove that party guilty of adultery. The decision in this case was based upon the reasoning in Redfern v. Redfern £1891] P. 139 where an application for discovery was refused. It was held that a party ina petition for divorce, where the only issue was that of adultery, may not be called upon by compulsory process to provide evidence in support of the charge in that case by giving discovery. In Nast v. Nast and Walker £19721] 2 W.L.R. 901, Redfern v. Redfern, suvra, was held to be no longer the law in England. This was upon the basis that then discovery and interrogatories could be obtained in such an action. Wigmore on Evidence, McNaughton Revision, Vol. VIII, para. 2264, deals with the question of production of documents and expresses the view that production of documents in response to a subpoena may be-refused under the protection of privilege. Senior counsel for the Commission referred toR. v. 12. Adams £19651 V.R. 563, a decision of the Full Court of the Supreme Court of Victoria, in which it was held that an accused person who had elected to give evidence may be compelled to produce relevant documents which are in his possession and his control. In my opinion the judgment in that case rested upon the statutory provisions in 3.399 of the Crimes Act 1958 (Vic.) which contained a provision that a person charged with a criminal offence who had chosen to enter a witness box and give evidence may be asked any question in cross-examination notwithstanding that it would tend to incriminate him as to the offence charged. It may be that Adams' Case, in the light of s.399, is some authority for the proposition that, once a defendant in criminal proceedings chooses to give oral evidence, he is required to produce documents which are in his custody and under his control. I note that at p.565 O'Bryan J., with whom Hudson and Adam JJ. a agreed, said: "Where notice to produce has been given and the defendant is not a witness the proper course is for the prosecution to give secondary evidence of a document of which notice has been given and which is not produced." O'Bryan J. referred to the case of Trust Houses Ltd. v. Postlethwaite (1944) 109 J.P. 12. In that case, in a joint judgment, Viscount Caldecote C.J., Humphreys and Birkett Ju. considered the question of whether a defendant in a criminal action could be compelled by a court against his own wish to 13. produce a document. The Court said that the defendant could not be called upon to "make any admission or any statement or to produce any document which, in his opinion, may tend to incriminate him". No distinction was drawn between the production of a document and any other evidence sought froma defendant. I made it clear during the hearing of these applications and I reiterate that I was not and am not considering the question of the position if a witness has chosen to enter the witness box and give evidence. That may or may not arise for consideration later in this case. Ido not think it is necessary to deal at length with the question of waiver. The only waiver alleged was by the third defendant. It was argued that the tender of exhibits 28, 29 and 30 constituted a waiver of privilege. Senior counsel for the Commission had referred me to Great Atlantic Insurance Co. v. Home Insurance Co. £19811 2 All E.R. 485, a case relating to discovery, where two paragraphs of a document had been read to the Court by a party and that party was held to have waived any legal professional privilege in relation to the whole of that document. Exhibits 28, 29 and 30 are letters from Tradestock Pty. Ltd. to the third defendant. The subpoena which was issued was of such a general nature that, whether or not the tender of exhibits 28, 29 and 30 could support some limited form of waiver, I think that it could net support a claim that all privilege had 14. been waived. Senior counsel for the Commission said that, if I held that a partial waiver was not sufficient to destroy all privilege in relation to the production of documents, he would not ask me to attempt to dissect out what part of the subpoena might have to be answered because of the act of waiver (9293, 9296). I express no view on whether or not exhibits 28, 29 and 30 could constitute any partial waiver of privilege against exposure to a penalty. In the circumstances I order that each subpoena be set aside. JI will allow submissions to be made concerning costs. | I certify that this andthe Hurtrew CI a yreceding pages are a true copy of the Reasons for Judgment nerein of his Konour Mx. Justice Franky. | CC. SS Associate Dated: |} Mavch i984,