~ yi CATCHWORDS Practice and Procedure - industrial law - discovery - civil proceeding for a penalty - privilege against production of documents on the ground of self-exposure to a penalty - waiver. Conelliation and Arbitration Act 1904. s. 119. Federa] Court Pules Order 15 Rule 2(2) Refrascugte d Express Lines (A/fasia) Pty. Ltd. v Australian "vet 3 ae, ~Auseraiial ana lve -Sicehk Cozporacisu (1979) 42 F.L.R. 204. The King vy Associated Morthern Collierievs (1910) 11 C.L.R. 738. . udneg 2, ere V Te bie Fe iN A trene No. V. 22 of 1984 Gray ¢. 26 June 1984 Melbourne. IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. V 22 of 1984 ) ) INDUSTRIAL DIVISION BETWEEN: RODNEY BIRRELL Applicant AND: AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondent JUDGE: Gray J. DATE: 26th June 1984 ° REASONS FOR JUDGMENT By his Application, dated 12th April 1984, the Applicant seeks the following relief: l. The imposition of a penalty upon the Respondent for a breach or non-observance of the Airline Pilots' (TAA) Agreement, 1981. 2. An order that the Respondent pay to the Applicant the amount of salary to which the Applicant is entitled and which is found by the Court not to have been paid to him by the Respondent. 3. A declaration that the Applicant's employment with the Respondent was not terminated in accordance with the Airline Pilot's (TAA) Agreement, 1981 on 9 or 10 May 1983 or at any other time. 4. A declaration that the Applicant has been continuously since 9 May 1983 and remains in the employ of the Respondent. The first directions hearing in the proceeding was on 27th April 1984. On that occasion, the Respondent was represented by counsel and solicitor. Before the matter was called on, either counsel or the solicitor for the Respondent handed to the solicitor for the Applicant a document entitled in the proceeding and headed "Proposed Orders and Directions". The document set out orders and directions which, apparently, the Respondent proposed should be made and given in the proceeding. After some proposed directions concerning pleadings, the document contained the following: "4. Mutual discovery on or before Friday 25th May, 1984. 5. Any Interrogatories shall be filed and served on or before 8th June 1984 and Answers thereto shall be filed and served on or before Friday 15th June 1984." After discussions between the representatives of the parties, amendments were made to some of the dates referred to in the proposed orders and directions. These amendments were made on the document itself by handwritten deletions and additions. When this was done, the document was handed to Northrop J., who conducted the directions hearing. The orders and directions contained in the document so amended were made by consent of the parties. In the orders and directions so made, the date by which mutual discovery was to take place was lst June 1984. The Respondent did not, either on or before lst June 1984 or thereafter, make compliance with Order 15 Rule 2(2) of the Federal Court Rules, by giving a list of documents relating to any matter in question in the proceeding together with an affidavit verifying the list. In consequence, the Applicant filed a Notice of Motion dated 7th June 1984, giving notice that he intended to move for the following orders: l. That there be judgment for the Applicant. 2. In the alternative, that the Respondent do - (a) on or before 15 June 1984 file and serve on the Applicant a list of documents in its possession or power relating to this Application, and an affidavit verifying that list; (b) on or before 22 June 1984 produce for the inspection of the Applicant or his solicitor such documents as are specified in a notice served on behalf of the Applicant on or before 20 June 1984. This Notice of Motion came on before me on 13th June 1984. ~ The basis of the Respondent's refusal to give discovery of documents was that the proceeding involves a claim for a penalty pursuant to Section 119 of the Conciliation and Arbitration Act 1904, and that it is inappropriate in such a proceeding for the Court to order the Respondent to discover documents which might tend to expose it to such a penalty. It is well established that a proceeding pursuant to Section 119 of the Conciliation and Arbitration Act 1904 is a civil proceeding for the recovery of a penalty: Gapes v Commercial Bank of Australia Ltd. (1979) 38 F.L.R. 431. The Applicant concedes, and it is well established, that in civil proceedings for the recovery of a penalty, the Court will not normally order a respondent to make discovery of documents, on the ground that to do so may be to compel such a respondent to expose itself to the penalty concerned. See The King v Associated Northern Collieries (1910) 11 C.L.R. 738, at pages 742-3, and Naismith v McGovern (1953) 90 C.L.R. 336, at pages 341-2. This principle has been applied by Keely J. to proceedings relying on Section 119: Harris v Ansett Transport Industries (Operations) Pty. Ltd. (unreported, 23rd June 1978, at page 7). It extends to a refusal to allow interrogation: Martin v Treacher (1886) 16 Q.B.D. 507, and to a refusal to compel the production on subpoena of documents by a party against whom a penalty is sought: Trade Practices Commission v T.N.T. Management Pty. Ltd. (1984) A.T.P.R. 40 — 446. In ordinary civil proceedings, not involving a claim for a penalty, a party obliged to give discovery is entitled to claim privilege in respect of documents the production of which would involve self-incrimination or the risk of exposure to a penalty. The claim to privilege is made in the Affidavit of the party making discovery. It is normally necessary to set out the documents in the possession or power of the party, and to specify those in respect of which the privilege is claimed. Where the subject matter of the action is itself a claim for a penalty, a respondent is not required to provide a list of documents, or to distinguish those production of which is resisted on the ground that they tend to expose the party to the penalty from those which would otherwise be produced. A respondent in such a proceeding is absolved from making the claim to pravilege in an affidavit; the Court assumes in favour of such a respondent that the production of documents relating to the subject matter of the proceeding would tend to expose the respondent to the penalty sought. The distinction between these two classes of cases is explained by Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v Australian Meat and Live-Stock Corporation (1979) 42 F.L.R. 204, at pages 207-8, where His Honour said: "It is a well-established principle that a defendant in proceedings which are solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents which may assist in establishing his liability to the penalty (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 ». Treacher [(1886) 16 Q.B.D. 507]). Even where, as in the present case, the proceedings are not for recovery of a penalty but to prevent and redress civil injury, a party to litigation litigation ought not to be compelled to provide information or produce documents for inspection by the other party if the result thereof will be to provide evidence against him which may be used to establish his liability to a penalty in other proceedings (Mayor of the County Borough of Derby v. Derbyshire County Council [L1897] A.c. 550, at p. 552]). In the former case, that is to say in a mere action for a penalty, a court should, in the absence of statutory provision to the contrary, refuse to make any order at all against the defendant for discovery or production of documents or provision of information for the reason that the whole and avowed object of the proceedings being the imposition and the recovery of a penalty, an order for the production of documents or provision of information against the defendant can, so far as the prosecutor of the action is concerned, properly have no other intended consequence (see R. v. Associated Northern Collieries [(1910) 11 C.L.R. at p. 7T42]). This 1s 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 (Earl of) v. Whitwood Urban District Council TTis97] 27 Q.B. Ili, at p. 2115] and Heimann v. Commonwealth [(1935) 54 C.L.R. 126, at p- 130]). In the latter case, that is in a case such as the present where the proceedings are not for the recovery of a penalty, there is no general rule precluding the making of an order for discovery or interrogatories and there will ordinarily be no proper ground for objecting to an order for production of documents or provision of information being made. The party against whom such an order is made is left to object to producing particular documents or providing particular information on the ground that such production or provision may tend to expose him to a penalty (see Mayor of the County Borough of Derby v. Derbyshire County Council [[I897] A.C., at p- 553])." Dr. Jessup, who moved the Court on behalf of the Applicant, contended that there are two circumstances which take this case outside the normal proceeding for a penalty. Firstly, he said, relief other than a penalty is claimed, and the Respondent should be compelled to make discovery of documents in relation to the issues involved in the other claims for relief. Secondly, Dr: Jessup argued that, by proposing and consenting to the orders and directions made on 27th April 1984, the Respondent waived its right to claim privilege against the production of documents which might tend to subject it to the penalty. The primary contention was that the Respondent should be debarred from claiming the privilege in respect of any document. In the alternative, Dr. Jessup sought to place the Respondent in the position of a defendant in ordinary litigation, i.e. to compel it to list its documents and to specify those in respect of which privilege was claimed and the grounds of privilege. The first argument for the Applicant was based upon the passage in The King v Associated Northern Collieries (1910) 11 C.L.R. 738, at pages 742-3, where Isaacs J. said: "There is an inherent distinction between a civil action to prevent or redress a civil injury on the one hand, and a civil action to recover a penalty on the other. In the latter case the whole and avowed object of the proceedings is the infliction of the penalty, and the discovery sought of documents relevant to the claim can therefore have no other intended consequence. It does not require in such a case the oath of the defendant to establish the fact that the production of the documents would tend to penalize him. The Court can see the effect of discovery from the nature of the proceeding. In the former case there is no such necessary consequence, and whether the objectionable tendency exists or not has to be otherwise ascertained, and claiming immunity upon oath in the course of making discovery is the most usual, but not the only other means of establishing it." Dr. Jessup emphasized the reference in this passage to "the whole...object of the proceeding". Drawing attention to paragraphs 2, 3 and 4 of the Application, Dr. Jessup argued that -8- the accrued jurisdiction of the Court is invoked by claims for relief separate and distinct from the claim for a penaity, and that these claims could be the subject of orders of the Court even if the case was not an appropriate one for a penalty. An examination of the authorities, however, indicates that no distinction is drawn between proceedings in which the claim for a penalty 1s only one of a number of claims, and those in which it is the only claim made. I do not think that Isaacs J. was intending to draw such a distinction in the passage quoted above. His Honour's remarks were rather directed to an examination of the objec of the proceedings, for the purpose of drawing a distinction between proceedings in which a penalty is claimed and those in which there is no claim for a penalty but merely a raising of issues an adverse finding on which might lead to a clain for a penalty in separate proceedings. In that sense, the present proceeding is a proceeding in which "the whole...object" is the infliction of a penalty. In addition, the distinction which Dr. Jessup sought to make would force a respondent in a case such as the present to examine each document, not only for the purpose of determining whether its production might tend to subject it to a penalty, but also for the purpose of determining whether it related to the claim for a penalty or to one of the other claims. Where the claims based on the accrued jurisdiction are based on "common transactions and facts" (per Mason, Murphy, Brennan and Deane JJ. in Fencott v. Muller (1983) 46 A.L.R. 41, at p. 67) this would be an exceedingly difficult task. In my view, it is one which the law does not require the Respondent to perform. On the subject of waiver, Dr. Jessup relied upon the decision of the Court of Appeal in Great Atlantic Insurance Co. v Home Insurance Co. [1981] 1 W.L.R. 529. In that case, the Court held that the disclosure by a party to litigation of part of a document, with the remainder of the docuument being sealed up for the purpose of claiming legal professional privilege with respect to it, constituted a waiver of privilege as to the whole document. Reference was also made to Butler v Board of Trade [1971] Ch. 680, in which the unauthorised disclosure of a document, in breach of confidence, was held to be sufficient to destroy legal professional privilege. It goes without saying that neither of these cases is in point. In the present case there has not been any disclosure of any of the contents of any document; nor 1s this case concerned with the privilege as between a client and his oc her legal advisers. Mr. Ginnane, who appeared for the Respondent, argued that the privilege claimed in the present case is incapable of waiver. He relied heavily upon a passage in the joint judgment of Mason A.C.J., Wilson and Dawson JJ. in Pyneboard Pty. Ltd. v Trade Practices Commission (1983) 45 A.L.R. 609 at page 613, where their Honours cited with approval part of the passage from the judgment of Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v Australian Meat and Livestock Corporation which is set out above. Mr. Ginnane also placed reliance upon the decision of the High - 10 - Court of Australia in Sorby v Commonwealth of Australia (1983) 46 A.L.R. 237. Judgment in that case was delivered on the same day as that in the Pyneboard case, and the Court was constituted by the same Justices in each case. Mr. Ginnane stressed the passages which emphasized the fundamental importance of the privilege against self-incrimination, and the lengths to which legislation must go in order to oust it. This put the privilege, he said in the category of a right which could only be taken away by the Parliament. There are clear indications in the Pyneboard case that the privilege of refusing to answer questions or provide information on the ground that the answers or the information might tend to expose the party to the imposition of a civil penalty is distinct from the privilege against exposure to conviction for a crime. See the judgment of the majority at page 614, the judgment of Murphy J. at page 621 and the judgment of Brennan J. at pages 624-5. Whatever might be the situation with respect to the privilege against disclosing information which would tend to subject the person disclosing it to a conviction for a criminal offence, the privilege against self-exposure to a penalty does not seem to be regarded with the same seriousness. A conviction for a criminal offence may result in loss of liberty; it is difficult to imagine a claim for a penalty having this result. In Blunt v Park Lane Hotel Ltd. [1942] 2 K.B. 252, the Court of Appeal ignored the technical possibility of an ecclesiastical penalty and compelled answers to interrogatories -ill- directed to establishing whether adultery had taken place. In the context of Section 119 of the Conciliation and Arbitration Act 1904, which is directed towards the enforcement of awards which are made for the benefit of the public, the privilege which a party has of refusing to disclose information which might show a breach of award cannot be elevated to the status of a right which only the Parliament can revoke. In any event, it is well established that the privilege against self-incrimination itself can be waived by a person otherwise entitled to claim it. Wigmore on Evidence (McNaughton Revision, 1961) in paragraph 2275 said: "It has never been dovbted that the privilege against self-incrimination, like all privileges, is waivable. There ar2 two possible ways of waiving: (a) By contract or other binding pledge before trial, or (b) by voluntarily testifying in the case." It can hardly be doubted that, if a respondent to a claim made under Section 119 of the Conciliation and Arbitration Act 1904 chooses to enter the witness box in the course of the trial of the matter, that person could be cross~examined and required to answer questions the answers to which may tend to subject him or her to the penalty claimed; the privilege would be taken to have been waived. Similarly, if such a respondent were to bind himself or herself before such a claim is brought or during the interlocutory stages of a proceeding upon it, to supply information without claiming the privilege, the privilege would be lost. See Pa - 12 - East-India Company v Atkyns (1719) 1 Com. 346, at page 352. Further in the paragraph cited above, Wigmore said: "A bare contract to waive the privilege will not be enforced specifically. Rather, it will be enforced, where possible, by indirect sanctions similar to those (short of arrest and contempt) available to punish civil litigants who refuse to comply with orders to make discovery - e.g., dismissal of the action." in Trade Practices Commission v T.N.T. Management Pty. Ltd. (1984) A.T.P.R. 40-446, at pp. 45,121-45,122, Franki J. dealt with the question whether, by tendering certain specified documents, a respondent in proceedings for a penalty had waived its privilege and rendered itself liable to produce other documents on subpoena. His Honour held that there was no waiver of privilege with respect to undisclosed documents. Although His Honour does not appear to have been asked to decide the point, there 1s no suggestion in that judgment that the privilege against self-exposure to a penalty was incapable of waiver. I conclude, therefore, that if the Respondent in the present case bound itself not to claim the privilege against the production of documents on the ground of self-exposure to a penalty, it should be compelled to make such discovery. It is necessary to determine the effect of the orders and directions made by consent on 27th April 1984. That the consent of each party to these orders and directions constituted a contract cannot be doubted. There was involved the agreement that each party would submit to the orders -13- and directions proposed and would consent to them being made and given by the Court. Consideration lay in the promise of each party to be bound. The Respondent did not place before me any evidence which suggested mistake or inadvertence on its part or the part of its legal advisers, or any other element which might lead to the conclusion that no contract existed. It is my view that the Respondent must be bound by the contract which it has made. It is then necessary to construe the terms of the contract. For this purpose, the contract must be looked at objectively, and regard must be had to the circumstances in which it was made. In the context of a proceeding in which a claim for a penalty is involved, agreement for mutual discovery must at least be construed as a promise on the part of the Respondent trat it would not seek to have the proceeding treated as falling within that class of cases in which the Court declines to order discovery at all. In other words, the Respondent agreed to put itself in the position of a litigant in a normal case, being required to list documents and to make an Affidavit verifying the list. As I have said above, that promise is binding. On the other hand, it does not seem to me that a contract of the kind which I have found to exist could properly be construed as involving the waiver of the privilege altogether. When a party to litigation consents to an order for discovery, that party is not normally taken to have waived any privilege - 14 - which might attach to any document; part of the process of discovery is the claim of any privilege in an affidavit. For instance, the Respondent could not be regarded as having waived its right to claim privilege in respect of communications between itself and its legal advisers for the purpose of the litigation itself, merely by consenting to an order for discovery. In my view, it could not be considered to have waived any privilege attaching to any particular document on the ground that the disclosure of such document might tend to expose it to the penalty sought. Mr. Ginnane argued that waiver could only be by irrevocable step inconsistent with the presence of the privilege. Without deciding whether such a step is necessary for a waiver, I am of the view that entry into a binding contract of the kind which I have held to exist constitutes such an irrevocable step to the extent specified above. There can be no doubt that an act performed without any intention of waiving a privilege may be effective to waive the privilege. See Great Atlantic Insurance Co. v Home Insurance Co. and Butler v Board of Trade, both cited above. Mr. Ginnane also relied upon Navair Pty. Ltd. v Transport Workers' Union of Australia (1981) 52 F.L.R. 177. In that case, Evatt J. refused to compel a respondent to answer interrogatories on the ground that the answers to the interrogatories might tend to subject that respondent to a - 15 - penalty. Mr. Ginnane drew attention to the fact that directions had been given in that case which included a time-table for the administering of interrogatories and the answering thereof, although he conceded that it did not appear from the report whether such order had been by consent (see page 179). An examination of the judgment in the Navair case makes it clear that there was not involved in the proceeding itself any claim for a penalty. The relief sought was injunctions and damages, in reliance upon Section 45D of the Trade Practices Act 1974. Objection was taken to answering the interrogatories on the ground that separate proceedings might be instituted for recovery of a pecuniary penalty under Section 76 of the Trade Practices Act 1974. This objection was taken in an affidavit answering the specific interrogatories. The case was, therefore, one which fell outside the special class of proceedings in which cleims for penalties are @girectly involved. Acting on the conclusion I have reached, I propose to order that the Respondent comply with Order 15 Rule 2(2) of the Federal Court Rules by filing and serving on the Applicant a list of documents verified by affidavit. The Respondent remains at liberty to claim any privilege open to it in respect of any specific document. If necessary, the Court can resolve the question whether privilege is properly claimed in respect of any specific document. I will hear the parties on the question of a revised time-table for directions. > ttn ny ee St~ ob amperes - 16 - TT stars. SS LS = oe I ceitify that this and the Is | preceding prges are a true copy of the 1 Fiasons for Judzment herein of the U Toxonrable Mr. Fusnoe GRAY - | «a th Assoisrs Wople-IE ~ t CCEA ST TLS Te AAA Soe