FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v Amcor Printing Papers Group Ltd [1999] FCA 672 PRACTICE AND PROCEDURE – proceedings seeking orders that respondents pay pecuniary penalty - whether witness statements by individual respondents should be provided before trial – privilege against exposure to a penalty Trade Practices Act 1974 (Cth), ss 45(2), 76 Evidence Act 1995 (Cth), s 128 Federal Court Rules, O 10, r 1 Australian Competition and Consumer Commission v Pioneer Concrete (Queensland) Ltd, unreported, Federal Court, 15 December 1995, not followed Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328, followed Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd, (1997) 77 FCR 217, applied Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-stock Corporation (1979) 42 FLR 204, followed Reid v Howard (1995) 184 CLR 1, referred to The King v Associated Northern Collieries (1910) 11 CLR 738, cited Jones v Dunkel (1959) 101 CLR 298, cited Weissensteiner v The Queen (1993) 178 CLR 217, cited Sorby v The Commonwealth (1983) 152 CLR 281, referred to Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96, followed AUSTRALIAN COMPETITION & CONSUMER COMMISSION v AMCOR PRINTING PAPERS GROUP LIMITED & ORS NG 1245 of 1998 JUDGE: SACKVILLE J PLACE: SYDNEY DATE: 19 MAY 1999 IN THE FEDERAL COURT OF AUSTRALIA NG 1245 of 1998 NEW SOUTH WALES DISTRICT REGISTRY BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AMCOR PRINTING PAPERS GROUP LIMITED First Respondent VISY PAPER PTY LTD Second Respondent ANTHONY NOTT Third Respondent WILLIAM GUTHRIDGE Fourth Respondent DAVID ROACH Fifth Respondent JUDGE: SACKVILLE J DATE: 19 MAY 1999 PLACE: SYDNEY THE COURT ORDERS THAT: 1. The applicant's motion filed on 14 May 1999 be dismissed. 2. The applicant pay the costs of the third and fifth respondents. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NG 1245 of 1998 NEW SOUTH WALES DISTRICT REGISTRY BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AMCOR PRINTING PAPERS GROUP LIMITED First Respondent VISY PAPER PTY LTD Second Respondent ANTHONY NOTT Third Respondent WILLIAM GUTHRIDGE Fourth Respondent DAVID ROACH Fifth Respondent JUDGE: SACKVILLE J DATE: 19 MAY 1999 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 The applicant ("ACCC") has instituted proceedings alleging, inter alia, that the corporate respondents ("Visy" and "Amcor") made an arrangement that contained an exclusionary provision, in contravention of s 45(2)(a)(i) of the Trade Practices Act 1974 (Cth) ("TP Act"). The ACCC has joined as respondents three individuals, of whom two are officers of Amcor and one is an officer of Visy. 2 The ACCC alleges that the individual respondents were knowingly concerned in, or party to the contraventions of the TP Act by the corporate respondents. The relief sought against the individual respondents includes an order that each of them pay a pecuniary penalty, as provided for in s 76 of the TP Act. 3 The ACCC has filed a motion seeking orders requiring both the corporate and individual respondents, subject to certain undertakings by the ACCC, to file and serve their statements of evidence prior to trial. The form of order sought is as follows: "Upon the Applicant undertaking with respect to each Respondent not to make any use of that Respondent's statements of evidence or proposed evidence in dealing with any 'no case' submission that that Respondent may make at the close of the Applicant's case against it or him, and which the Court is prepared to entertain and upon the Applicant further undertaking with respect to each Respondent not to make any use of that Respondent's statements of evidence or proposed evidence in the Applicant's case against the Respondent, if that Respondent does not go into evidence: (a) subject to [any further direction], the Applicant and Respondents shall adduce the evidence in chief of all the witnesses upon whom each intends to rely at the trial by written statement filed and served in accordance with paragraphs 5-7 as appropriate; and (b) subject to any ruling [as to oral evidence] given in accordance with paragraph 10 of these orders, any witness statements filed and served shall, upon the witness being called, be verified on oath by such witness as his or her evidence in chief." The subsequent paragraphs in the proposed orders provide for the statements of evidence to be filed and served well in advance of the trial. 4 The corporate respondents raise no objection to the orders sought by the ACCC. The individual respondents, however, oppose the making of orders requiring them to file their own statements of evidence in advance of the hearing. They are prepared to file statements of evidence when they open their respective cases at the trial, but contend that they should not be required to do so any earlier. 5 The order sought by the ACCC is derived from the terms of orders made by Drummond J in Australian Competition and Consumer Commission v Pioneer Concrete (Queensland) Ltd (unreported, 15 December 1995). There his Honour directed that evidence of certain key meetings should be given orally by witnesses on both sides. He then dealt with the procedure to be followed in relation to other factual issues: "There are, however, a range of other issues which do not depend on the resolution of conflicting testimony of the participants in meetings and conversations. I see no reason with respect to these other issues to depart from the Court's usual practice of requiring the parties to adduce all their evidence-in-chief in written form, save only for the qualification I have referred to that arises from the penal nature of the proceedings and the need, as I see it, not to deprive a respondent of an opportunity that might otherwise be open to that respondent of persuading the Court to entertain a 'no case' submission at the close of the applicant's case. If the applicant is prepared to undertake with respect to each respondent not to make any use of that respondent's evidence in dealing with any 'no case' submission that that respondent may make at the close of the applicant's case against it or him and which the Court in its discretion is prepared to entertain, in addition to what the applicant is prepared to offer with respect to each respondent in the way of undertaking not to make any use of that respondent's affidavits of evidence in the applicant's case against the respondent, if that respondent does not go into evidence, I will make [a direction that the applicant and respondents adduce evidence in chief of all witnesses by affidavit.]" 6 The issue presented by the motion is whether the individual respondents, if they propose to give evidence, should be directed to file and serve statements prior to the commencement of the trial, subject to the undertakings proffered by the ACCC. There is no doubt that the Court has power to make the directions sought by the ACCC. The Federal Court Rules ("FCR"), O 10, r 1 provide that the Court shall give such directions with respect to the conduct of the proceeding as it thinks proper. The Court's powers include making orders with respect to the filing of affidavits, the mode of giving evidence in chief and the filing and exchange of signed statements of evidence: FCR, O 10, r 1(2)(a)(xi), (xiv) and (xvii). 7 The individual respondents rely on the privilege of refusing to provide information that would tend to subject a person to any penalty. In Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328, it was held (at 337, per Mason ACJ, Wilson and Dawson JJ) 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 (a) not confined in its application to discovery and interrogatories; (b) available at common law as well as in equity; and (c) distinct from, though often associated in discussion with, the privilege against exposure to conviction for a crime." 8 One difficulty facing the ACCC is that precisely the question posed by the motion was decided adversely to it in Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (1997) 77 FCR 217 (Heerey J). His Honour acknowledged (at 218) that the general practice in the Court is to require parties to file and serve witness statements or affidavits prior to trial. However, he declined to take the approach that had been adopted in Pioneer Concrete and, accordingly, rescinded orders that had been made for the filing and serving of witness statements in advance of the hearing. 9 Heerey J relied on the well-known observations of Deane J in Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-stock Corporation (1979) 42 FLR 204. That was a case involving alleged contraventions of Part IV of the TP Act, but only injunctive relief was sought against the respondent. The issue was whether the Court should make an order for discovery or interrogatories. Deane J drew an important distinction (at 207-208): "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. 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 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. 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. 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". (Citations omitted.) These observations were cited with approval by the joint judgment of the High Court in Pyneboard, at 336. 10 Heerey J in McPhee considered that, having regard to the fact that the proceedings were for the recovery of pecuniary penalties, orders for the filing and service of witness statements by the individual respondents would amount to "provision of information" by them and would contravene the principles laid down in Refrigerated Express. 11 In his judgment, Heerey J pointed out (at 219) that Drummond J in Pioneer Concrete had not been referred either to Refrigerated Express or to the decision of the High Court in Reid v Howard (1995) 184 CLR 1. In the latter case, the High Court confirmed the absolute nature of the privilege against self-incrimination and warned against the "ad hoc modification or abrogation of a right of general application" (at 17). Heerey J expressed the view (at 220) that it would be contrary to the strong statements in Reid to make an order for the production of witness statements by individual respondents against whom the ACCC sought an order for the payment of pecuniary penalties. 12 In the present case, the ACCC seeks to overcome McPhee by arguing that the issue is not one of exposure to a penalty, but simply a matter of the individual respondents electing whether or not to give evidence. Mr Kerr, who appeared for the ACCC, pointed out that in Reid v Howard the High Court had set aside orders which required an accountant, against whom allegations of misappropriation had been made, to disclose information about certain assets, subject to conditions designed to protect him from the risk of prosecution. Mr Kerr said that the orders sought in this case were different, because they did not oblige the respondents to give evidence or to provide information on affidavit. Their effect was merely that, if the respondents elected to give evidence, they had to file witness statements in advance of the hearing. They were not compelled to provide any information that would or might expose them to the imposition of a penalty. 13 The analysis in McPhee proceeds on the basis that the "whole and avowed object" of proceedings in which a statutory authority seeks an order for payment of a pecuniary penalty is to inflict a penalty on the respondents: see The King v Associated Northern Collieries (1910) 11 CLR 738, at 742, per Isaacs J. The judgment in McPhee accepts that the intended consequence of orders of the kind sought by the ACCC must be to make easier its task of establishing the factual foundation for the imposition of penalties on the individual respondents. Mr Kerr frankly conceded that this was the object of the orders in the present case. On the analysis in McPhee, it is enough to infringe the relevant privilege if the effect of the orders is to require a respondent who intends to give evidence to file a statement of evidence in advance of the hearing, in circumstances where access to the statement would confer a forensic advantage on the party seeking orders imposing penalties. 14 It may be that this analysis should be qualified so that it does not apply in cases where the respondent has a genuinely free and untrammelled choice as to whether or not to file a statement of evidence pursuant to orders requiring any such statement to be filed in advance of the trial. Whether there are likely to be such cases is not something I need consider. In my opinion, whatever might be the position in other cases, the circumstances of the present case are such as to belie the beguilingly simple way in which Mr Kerr presented the so-called "election" facing the individual respondents. 15 The ACCC's own submissions in support of its motion assert that, should the individual respondents "choose" not to give evidence, the Court would be entitled to (and presumably would be asked by the ACCC to) draw "appropriate inferences": Jones v Dunkel (1959) 101 CLR 298; cf Weissensteiner v The Queen (1993) 178 CLR 217, at 229. And of course the very point of the proposed orders is that a respondent who does not file his statement of evidence in timely fashion will not be entitled to give oral evidence at the trial. It is also to be borne in mind that the effect of the order sought by the ACCC would be to require the individual respondents to decide whether to file statements of evidence before the ACCC establishes by evidence that there is a case for each of them to answer. 16 The privilege against self-incrimination protects a witness not only from incriminating himself or herself under compulsory process, but also from being required to make a disclosure which may lead to incrimination or to the discovery of real evidence of an incriminatory character: Sorby v The Commonwealth (1983) 152 CLR 281, at 310. The privilege against self-incrimination and the privilege against exposure to a penalty are reflections of the one fundamental principle, namely that those who allege the commission of a crime or the incurring of a penalty should prove it themselves and not be able to compel the accused or the respondent to provide proof against himself or herself: Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96, at 129, per Burchett J (with whom Black CJ and Davies J agreed). There is therefore no reason to think that the scope of the privilege against exposure to a penalty is any narrower than that of the privilege against self-incrimination. 17 The orders sought by the ACCC would require the individual respondents to file their statements of evidence in advance of the trial on pain of foregoing the opportunity of giving evidence at the trial and of placing themselves at risk that the Court would draw adverse inferences against them. Moreover, at least in this case, they would run the risk that their statements of evidence would provide the ACCC with "leads" that would result in other evidence adverse to them being adduced in the very proceedings in which penalties are sought. 18 The latter point can be illustrated by reference to the fifth respondent ("Mr Roach"). The ACCC alleges that Mr Roach knew that Amcor and Visy desired to achieve certain objectives that were consistent with a contravention of a s 45(2) of the TP Act. The ACCC, as its statement of claim makes clear, intends to invite the Court to draw inferences adverse to Mr Roach from certain events and circumstances, such as the role performed by him as State Sales Manager of Amcor. What if Mr Roach files a statement explaining his duties in detail, in order to rebut the inference that he knew of the alleged aspirations of Amcor and Visy? In these circumstances, would there not be a "real and appreciable danger" that the proffered explanation will provide or lead to other evidence upon which the ACCC might wish to rely in the proceedings against him (see Cross on Evidence (Aust ed), par 25105)? Mr Kerr did not dispute that this was so and, indeed, confirmed that the point of the orders sought by the ACCC was to secure to it a forensic advantage in the proceedings. 19 In my opinion, if the orders sought by the ACCC were made, the "election" facing the individual respondents would neither be unconstrained nor free. The individual respondents would not be compelled by an order of the Court to make statements or provide information that would expose them to a penalty. In this sense, the case is different from an order requiring the production of documents or the filing of an affidavit disclosing specific information. But if they wished to avoid adverse forensic consequences in the penalty proceedings, they would have little choice but to file statements of evidence. By taking that course they would expose themselves, to the risk that their own words would materially assist the ACCC to make out the case against them. To require the individual respondents to make this invidious choice is not, in my opinion, consistent with the rationale underlying the privilege against exposure to penalties. This is sufficient to warrant dismissal of the ACCC's motion. 20 If, contrary to my views, the issue is one to be determined in the exercise of the Court's discretion, I would not be prepared to make the orders sought by the ACCC. In my opinion, it would be unfair, in the circumstances of the present case, to require the individual respondents to file statements of evidence in advance of the trial. As I have said, the ACCC alleges that each of the individual respondents was knowingly involved in a contravention by one of the corporate respondents. Having regard to the fact that the ACCC seeks substantial pecuniary penalties against each of them, I think that they should have the opportunity not only of examining, but testing the evidence against them, before having to decide whether or not to give evidence. 21 For reasons I have explained, there is a real risk that, if the individual respondents file statements explaining the extent of their knowledge of their participation in relevant events, the ACCC is likely to be able to bolster the case against them. In saying this, I have not overlooked the terms of the proffered undertakings. In practice, while accepting that the undertakings will be complied with, it would be virtually impossible (as Mr Kerr acknowledged) for the statements not to have some impact upon the conduct of the ACCC's case. In my view, there is no convincing reason why the ACCC should have such a forensic advantage in a case in which, after all, it seeks to recover penalties against individual respondents for alleged contraventions of Commonwealth law. 22 The only disadvantage to the ACCC in the course that I think should be followed, is that the cross-examiner will not have the respondents' statements of evidence in advance of the opening of their respective cases. Each individual respondent is content to provide a written statement of evidence on the opening of his case, should he decide to give evidence. If any individual respondent does give evidence, the ACCC of course will be entitled to cross-examine him and, if appropriate, to tender evidence in reply. Since the statements of evidence to be relied on by Amcor and Visy are to be filed before the hearing and since they are to provide discovery (the privilege against exposure to a penalty not applying to a corporation: TPC v Abbco), any disadvantage to the ACCC is very likely to be minimal. Should the statements of any of the individual respondents raise important matters that could not reasonably have been anticipated by the ACCC, an appropriate application could be made and would be dealt with on its merits. 23 I should add that no party suggested that the principles governing the present application are directly affected by s 128 of the Evidence Act 1995 (Cth). Section 128 applies if a witness objects to giving particular evidence on the ground that the evidence may tend to prove that the witness is liable to a civil penalty or has committed an offence. 24 It follows from what I have said that the motion should be dismissed. The ACCC should pay the costs of the third and fifth respondents. Since the second respondent played no active part in the argument there should be no other order for costs in respect of the motion. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 19 May 1999 Counsel for the Applicant: Mr V F Kerr Solicitor for the Applicant: Australian Government Solicitor Counsel for the Third and Fifth Respondents: Mr A I Tonking Solicitor for the Third and Fifth Respondents: Arthur Robinson & Hedderwicks Solicitor for the Fourth Respondent: Minter Ellison Date of Hearing: 19 May 1999 Date of Judgment: 19 May 1999