CATCHWORDS

INCOME TAX - JUDICIAL REVIEW - notice served on taxpayer under s 264 Income Tax Assessment Act 1936 (Cth) requiring taxpayer to give evidence to officers of the Australian Taxation Office concerning certain matters - taxpayer facing trial on criminal charges arising out of same matters - whether notice issued with an improper purpose - whether taxpayer entitled to refuse to answer questions on ground that answers may incriminate him in criminal proceedings - whether use of s 264 power can constitute contempt of court.

Crimes Act 1914 (Cth) - s 86A , s 86(1)(a)

Income Tax Assessment Act 1936 (Cth) - s 264

Taxation Administration Act 1953 - s 3C, s 3D, s 3E, s 8C, s 8D

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Financial Transactions Reports Act 1988

Stergis v Commissioner of Taxation [1989] 89 ATC 4442

Donovan v Commissioner of Taxation [1992] 92 ATC 4114

Pyneboard Pty Ltd v Trade Practices Commission & Anor (1982-83) 152 CLR 328

Minister for Immigration v Teoh (1995) 128 ALR 353

Victoria v Australian Building Construction Employees' and Builders' Labourers Federation  (1982) 152 CLR 25

Hammond v The Commonwealth of Australia & Ors (1982) 152 CLR 188

Hamilton v Oades (1988-1989) 166 CLR 486

Rank Film Distribution Limited v Video Information Centre [1982] AC 380 at 443

O'Reilly v The Commissioners of the State Bank of Victoria (1982-3) 153 CLR 1

Browne v Dunn (1894) 6R 67

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 1 NSWLR 1

Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336

Environmental Protection Authority v Caltex Refining Co Pty Ltd (1992-3) 178 CLR 477

Mortimer v Brown (1971) 122 CLR 493

Sorby v The Commonwealth (1983) 152 CLR 281

Commissioners of Customs and Excise v Harz [1967] 1 AC 760

Commissioners of Customs and Excise v Ingram [1948] 1 All ER 927

Mabo v The State of Queensland (No. 2) (1991-2) 175 CLR 1

Brambles Holdings Ltd v Trade Practices Commission (No.2) (1980) 44 FLR 182

Attorney-General v Times Newspapers Ltd [1974] AC 273

Commercial Bureau (Aust) Pty Ltd v Allen (1984) 1 FCR 202

Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349

DEPUTY COMMISSIONER OF TAXATION v HUGO JOHN DE VONK

No WAG 98 of 1995

FOSTER, HILL & LINDGREN JJ

SYDNEY (Heard in Perth)

4 DECEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA     )

                                      )

WESTERN AUSTRALIA DISTRICT REGISTRY        )  No WAG 98 of 1995

                                      )

GENERAL DIVISION                      )

                ON APPEAL FROM A SINGLE JUDGE

              OF THE FEDERAL COURT OF AUSTRALIA

                   BETWEEN:           DEPUTY COMMISSIONER OF TAXATION

                                           Appellant

                       AND:           HUGO JOHN DE VONK

                                           Respondent

JUDGES MAKING ORDER:    FOSTER, HILL & LINDGREN JJ

PLACE:    SYDNEY (Heard in Perth)

DATED:    4 DECEMBER 1995

                      MINUTES OF ORDER

THE COURT ORDERS THAT:

(1)       Appeal allowed in part.

(2)       Set aside the second order and declaration made by Carr J.

(3)       Liberty to apply on 48 hours notice to a judge of the Court should interrogation pursuant to the notice dated 1 November 1994 referred to in the first order and declaration of Carr J be commenced and objection taken to specific questions.

(4)       Cross-appeal dismissed.

(5)       There be no order as to costs.

Note:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA  )

                                   )

WESTERN AUSTRALIA DISTRICT REGISTRY   )    No. WAG 98 of 1995

                                   )

GENERAL DIVISION                   )

On Appeal from a Judgment of the Honourable Justice Carr

                      BETWEEN:  THE DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

                                                   Appellant

                          AND:  HUGO JOHN DE VONK

                                                  Respondent

CORAM:    FOSTER, HILL & LINDGREN JJ

DATE:     4 DECEMBER 1995

PLACE:    SYDNEY (HEARD IN PERTH)

                    REASONS FOR JUDGMENT

FOSTER J:    I have had the advantage of reading in draft form the judgment of Hill and Lindgren JJ.  I agree with their Honours' conclusion that the respondent is not entitled to refuse to answer questions that may be put to him by officers of the Australian Taxation Office pursuant to the notice served upon him under s 264 of the Income Tax Assessment Act 1936 (Cth) ("the Act") on the ground that his answers might tend to incriminate him.  I am satisfied that the privilege against self-incrimination has been abrogated by the combined operation of s 264 of the Act and ss 8C and 8D of the Taxation Administration Act 1953 ("the Administration Act"). 

          Hill J reached this conclusion in an earlier decision in Stergis v Commissioner of Taxation [1989] 89 ATC 4442, and I am, with respect, quite satisfied that his Honour's decision was correct.  I am similarly satisfied that Wilcox J correctly followed Stergis in Donovan v Commissioner of Taxation [1992] 92 ATC 4114.

          I agree that the removal of the words "just cause and excuse" from s 224 of the Act at the time of the enactment of the new ss 8C and 8D of the Administration Act, and the inclusion in those sections of the words "to the extent that the person is capable of complying with it" clearly exhibited the legislature's intention to abrogate the privilege against self-incrimination in relation to compliance with notices served pursuant to s 264.  The latter phrase has been most explicitly dealt with in the judgment of Mason ACJ, Wilson and Dawson JJ in Pyneboard Pty Ltd v Trade Practices Commission & Anor (1982-83) 152 CLR 328, a case concerning the construction of s 155(5) of the Trade Practices Act 1978, in which the question of the availability of the privilege also arose.  Their Honours said at 343:-

          "It is significant that sub-s.(5) makes it an offence for a person to refuse or fail to comply with a notice under sub-s.(1) `to the extent that the person is capable of complying with it' for these words in themselves are quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise."

          I am satisfied, as was Wilcox J in Donovan, that the same phrase was later incorporated into the new ss 8C and 8D with the intention that it should likewise abrogate the privilege as a defence to those sections.  Of course, the basic question still remains whether this intention has, as a matter of construction, been realised.

          It was unsuccessfully argued before Carr J, from whose decision this appeal has been brought, that in the context of ss 8C and 8D the phrase was not apt to exclude the privilege and that Stergis and Donovan had been incorrectly decided.

          It was submitted before this Court that these three first instance decisions should be overruled.  The same arguments were advanced that had been rejected by Carr J.  Stated summarily, these were that: (a) the words "to the extent that the person is capable of doing so" did not, as a matter of construction, exclude reliance upon self-incrimination, (b) in Stergis and Donovan reliance had erroneously been placed upon the explanatory memorandum circulated in relation to the proposed new sections 8C and 8D, (c) the defence of self-incrimination could only be abrogated by express words and (d) the observations in Pyneboard cited above were obiter and should not be followed outside the ambit of s 155 of the Trade Practices Act 1974.

          I am satisfied that Carr J was correct in rejecting these submissions and in following Stergis and Donovan.  His Honour dealt with the submissions (at 15) as follows:-

     "Mr Martella submitted that Stergis and Donovan were incorrectly decided.  He submitted that the words `to the extent that the person is capable of doing so' leave room for the assertion that a person is not capable of doing so because the answer to the questions may lead to self-incrimination.  The words `extent' and `capable' were, so it was submitted, words of degree.  I reject that submission for two reasons.  First, the word `capable' in this context must mean `having the ability, power or fitness for some ... activity' (the New Shorter Oxford English Dictionary) or `having the ability, strength' (the Macquarie Dictionary).  The fact that his answers may tend to incriminate him does not, in my view, render Mr De Vonk incapable of answering the questions.  Secondly the submission is squarely to the contrary of the passage from the judgment of Mason ACJ, Wilson and Dawson JJ. in Pyneboard at p.343 which I have set out above.

     Next Mr Martella criticised the resort by Hill J. in Stergis to extrinsic material, being the explanatory memorandum.  Hill J. simply referred to the explanatory memorandum in passing and my assessment of his Honour's conclusion is that it was not substantially based upon the content of that memorandum.  In any event such resort is permissible to confirm that a literal meaning was intended: s.15AB(1)(a) of the Acts Interpretation Act 1901 (Cth).  See also Pearce: `Statutory Interpretation in Australia (3 ed) para 3.18 and the cases there cited.

     Mr Martella submitted that the observations in Pyneboard were obiter dicta because the issue in that case was whether the privilege against being required to expose oneself to civil liability for penalties had been abrogated.  Exposure to self-incrimination was not in issue.  ...

          In any event it is not necessary for me to decide whether the passage at p.343 in Pyneboard forms part of the ratio of that case because, with the greatest respect, in my view it is quite clearly correct and I should follow it."

          I fully agree with his Honour.  Once it is accepted, as it must be, that despite the fundamental nature of the privilege against self-incrimination, it can, nevertheless, be excluded otherwise than by the use of express language, then the phrase "to the extent that the person is capable of doing so" achieves that result.  Resort to the explanatory memorandum which indicated the intention to exclude the privilege, is, in my view, unnecessary.  For the reasons given by Carr J and the reasons given in Stergis and Donovan the language chosen must be viewed as inconsistent with the availability of the privilege.  It does not matter whether the passage from Pyneboard is directly binding on this Court or is merely highly persuasive.  The language of the statute speaks for itself.

          The respondent also sought a reversal of his Honour's finding that it was not established on the facts that the notice served under s 264 was issued for an improper purpose.  Hill and Lindgren JJ agree with this finding.  I am also satisfied that there are no grounds on which to reverse his Honour's finding.  I do not wish to add to the reasons given by Hill and Lindgren JJ in this regard.

          It was also submitted before this Court, as before Carr J, that the provisions of Article 14(3)(g) of the International Covenant on Civil and Political Rights required that the phrase under consideration should be construed so as to accommodate the privilege against self-incrimination.  This Covenant was ratified by Australia on 13 November 1980 but has not been incorporated into Australian municipal law.  The respondent relied upon the decision of the High Court in Minister for Immigration v Teoh (1995) 128 ALR 353 for the proposition that the ratification of an international treaty is sufficient to found a legitimate expectation that a decision-maker will act in conformity with it.  I agree with Carr J and Hill and Lindgren JJ, for the reasons their Honours have given, that the provisions of the Covenant are not relevant to the question with which we are concerned in this case.

          I, therefore, agree that the cross-appeal should be dismissed.

          I turn, then, to the appeal.  The appellant challenges Carr J's decision that ss 8C and 8D of the Administration Act do not prevent a person from refusing to answer questions and provide information sought pursuant to a notice under s 264 of the Act, on the ground that a demand for compliance could amount to contempt of court.  His Honour reached this decision in the context of an admission by the appellant that the intended questioning of the respondent would cover factual areas which were germane to the criminal proceedings already brought against him in the Western Australian District Court.  The nature of these proceedings are set in the judgment of Hill and Lindgren JJ and I shall not further refer to them in these reasons.

          Hill and Lindgren JJ agree with Carr J.  I agree with their Honours' conclusions and with their reasons for reaching them.  However, as this involves disagreement with the decision of Wilcox J in this regard in Donovan, I wish to make some brief observations of my own.

          It is convenient to state some preliminary matters.  First, the inquisitorial and investigative powers provided for by s 264 of the Act are clearly given only for the purpose of obtaining information for the collection and protection of the revenue.  Indeed, it has been asserted on behalf of the appellant and accepted at first instance and in this Court, that the questioning of the respondent is intended only for these purposes.  The use of these investigative powers for the collateral purpose of obtaining evidence for use in a prosecution already launched, would be an improper purpose and one which would vitiate the use of the power.  It would not, in effect, be a use authorised by the Act.  Of course, a finding was made by Carr J and which should be upheld by this Court that no such improper purpose exists in the present case.

          The situation therefore exists that the appellant wishes to examine the respondent in circumstances where the respondent cannot claim the privilege against self-incrimination.  The examination is to take place in private and in the absence of any improper purpose on the part of the examiner.  It is submitted on behalf of the appellant that, in these circumstances, no question of contempt of the District Court prosecution proceedings can arise. 

          It must be noted, however, that neither in the proceedings before Carr J nor in the appeal before this Court, has the appellant been prepared to give an undertaking that the material it obtains in the investigation under s 264 of the Act will not be made available to the prosecution.  It is conceded that by virtue of statutory provisions which, for present purposes, need not be examined, the information could be forwarded to the prosecution irrespective of the absence of any intention for the time being to do so.  It was submitted, however, that any answers given by the respondent under the compulsion of s 264 could not find their way into evidence in the prosecution because they would not be "free and voluntary".  It was further submitted that, in any event, these considerations could have no bearing upon the construction of the statutory language which, by necessary implication, excludes reliance upon the doctrine of contempt of court. 

          It is necessary to consider the major authorities to which Wilcox J had regard in Donovan and which were considered by Carr J at first instance.  Before doing so, I find it convenient to observe that during the course of argument counsel for the appellant tended to equate abrogation of the privilege against self-incrimination with exclusion of the contempt of court doctrine.  He asserted that if the examinee were obliged to answer questions notwithstanding that the answers might incriminate him, then no contempt of court could arise from the putting of the questions, especially in circumstances where there was no ulterior purpose in the questioning.  If it was intended to put this as a universal proposition, it cannot be accepted. 

          The privilege against self-incrimination is a fundamental safeguard given by the common law to an individual and can only be taken from him by the manifestation in statute of a clear legislative intention to do so.  It is, nevertheless, personal to him.  The doctrine of contempt of court, however, focuses upon a court's right and, indeed, its obligation, to protect the integrity of its operations and to prevent interference with its administration of justice.  This may, of course, involve enforcing an individual's privilege against self-incrimination but it also encompasses a court taking other steps to ensure that its processes are not contaminated by unfairness.  It does not follow, even where there is a statutory abrogation of the privilege against self-incrimination, that a court is not necessarily concerned to exclude other elements of unfairness or prejudice which may operate to the disadvantage of an accused contrary to the spirit of the common law.

          It is clear from Victoria v Australian Building Construction Employees' and Builders' Labourers Federation  (1982) 152 CLR 25 that even in the absence of an intention to interfere with the course of justice, the establishment or continuation of an administrative inquiry will be a contempt if there is an actual interference with the administration of justice or "a real risk, as opposed to a remote possibility" of such an interference (see per Gibbs CJ at 56).

          The case of Hammond v The Commonwealth of Australia & Ors (1982) 152 CLR 188 is important for present purposes.  It concerned s 6 of the Royal Commissions Act 1902 (Cth) which made it an offence for a witness before a Commission to refuse to answer any question relevant to the inquiry which was put to him by any member of the Commission.  Section 6DD provided that any statement or disclosure made by such a witness in answer to such a question would not be admissible in evidence against him in any civil or criminal proceedings.  It may be observed, therefore, that such a witness was in a better position than the present appellant.  Although he was obliged by s 6 to answer questions, he was afforded a statutory safeguard against the use of his answers in other proceedings. In this case the appellant is provided with no such safeguard.

          Hammond was committed for trial in April 1982 on a charge of conspiring with others to commit an offence against a law of the Commonwealth.  In June 1982 he was called before a Royal Commission and asked questions about this conspiracy. It was held that, notwithstanding his answers would not be admissible in evidence against him, his examination before the Royal Commission would interfere with the due administration of justice.  It is necessary to set out two passages from judgments in the case which have since been considered.  The first is a passage from the judgment of Gibbs CJ (at 198):-

     "Once it is accepted that the plaintiff will be bound, on pain of punishment, to answer questions designed to establish that he is guilty of the offence with which he is charged, it seems to me inescapably to follow, in the circumstances of this case, that there is a real risk that the administration of justice will be interfered with.  It is clear that the questions will be put and pressed.  It is true that the examination will take place in private, and that the answers may not be used at the criminal trial.  Nevertheless, the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence, is very likely to prejudice him in his defence.  In the Builders Labourers' Case I expressed the opinion that, if during the course of a commission's inquiries into allegations that a person had been guilty of criminal conduct, a criminal prosecution was commenced against that person based on those allegations, the continuance of the inquiry would, generally speaking, amount to a contempt of court, and that the proper course would be to adjourn the inquiry until the disposal of the criminal proceedings.  Of course, the present inquiry is not simply into allegations against the plaintiff.  It is an inquiry into alleged malpractices in connexion with the export of beef that are said to have caused immense damage to the reputation of our meat industry.  It would be neither necessary nor right to adjourn this inquiry because a prosecution had been commenced against the plaintiff.  But the public interest can be met, and the interest of justice at the same time safeguarded, if the inquiry proceeds to its conclusions without further examination of the plaintiff.

          I would therefore restrain the defendants from examining or resuming the examination of the plaintiff under the Commissions until the determination of the trial."

          The second passage comes from the judgment of Deane J (at p 206-7):-

     "The mere fact that proceedings are pending in a court of law does not mean that any parallel or related administrative inquiry, conducted for proper administrative purposes, constitutes an interference with the due administration of justice in that court.  For example, the existence of civil proceedings, in respect of certain alleged actions, will not ordinarily preclude proper administrative inquiries as to whether penal proceedings should be instituted in respect of those alleged actions.  Thus, neither police inquiries nor committal proceedings constitute, in themselves, an improper interference with the proceedings of a court hearing a civil claim based on the subject matter of such inquiries.

     On the other hand, it is fundamental to the administration of criminal justice that a person who is the subject of pending criminal proceedings in a court of law should not be subjected to having his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial inquiry by an administrative tribunal with powers to compel the giving of evidence and the production of documents which largely correspond (and, to some extent, exceed) the powers of the criminal court.  Such an extra-curial inquisitorial investigation of the involvement of a person who has been committed for trial in the matters which form the basis of the criminal proceedings against him constitutes, in my view, an improper interference with the due administration of justice in the proceedings against him in the criminal court and contempt of court.

     ...

          It was submitted on behalf of the Commonwealth that it has not been shown that the inquiry by the Royal Commissions into the plaintiff's involvement in matters the subject of criminal proceedings involves any substantial risk of serious injustice or serious prejudice.  That submission struck me as unattractive at the time when it was made.  I have found that it deteriorates upon closer consideration.  The pending criminal proceedings against the plaintiff are brought by the Commonwealth.  The parallel inquisitorial inquiry into the subject matter of those proceedings is being conducted under the authority of the Commonwealth.  As I have said, the conduct of that inquisitorial inquiry is to no small extent following the general form of a criminal trial shorn of some of the privileges and safeguards which protect an accused in such a trial.  The plaintiff has been compelled to be sworn as a witness and has been subjected to questioning in the course of that inquiry.  Indeed, his refusal to answer questions has led to his being charged, on the information of an officer of the Australian Federal Police, with an offence under the Royal Commissions Act 1902 (Cth).  It is not, in my view, necessary to go beyond these things.  In themselves, they constitute injustice and prejudice to the plaintiff."

          It is to be noted that Deane J made these observations notwithstanding that the examination before the Royal Commission was to be conducted in private and in circumstances where the witness's answers could not be given in evidence in the criminal proceedings.  His Honour was obviously of the view that the "parallel inquisitorial inquiry", in which the witness was compelled to answer questions in relation to the same subject matter, constituted a sufficient interference with the administration of justice in the criminal proceedings to warrant restraint on the basis of contempt of court. 

          There was some debate before us as to whether his Honour had in mind that there could be, in some way, some positive effect, tangible or intangible, of the inquisitorial administrative procedures upon the accusatorial curial proceedings - indeed, the concept of "osmosis" was invoked.  I am confident, however, that his Honour was pointing to no more than what he considered to be the clear basic unfairness of requiring the accused, whilst subject to criminal charges, to be subjected to compulsory inquisition in relation to the very subject matter of the alleged offences.  This situation produced such prejudice to the accused as to constitute unacceptable interference in the administration of criminal justice.

          As pointed out by Carr J, the present case would seem to provide an even stronger example of such injustice insofar as the respondent is provided with no statutory safeguard in respect of his compulsory answers.  Why, then, should not the respondent receive the same protection as the witness in Hammond?  Wilcox J in Donovan held that an examinee answering questions pursuant to s 264 of the Act in circumstances where she was charged with offences in respect of the same subject matter, could not invoke the aid of the contempt of court doctrine.  His Honour was of the view that a later decision of the High Court in Hamilton v Oades (1988-1989) 166 CLR 486 which had considered Hammond, required this decision. 

          It is convenient, in the first instance, to set out the passage from the judgment of Wilcox J in Donovan (at 4120) in which his Honour deals with these questions:-

     "During the course of the argument, I felt that the applicant might be on firmer ground in relation to her contempt of court argument.  If they were to be applied to this case, the statements of principle of Gibbs CJ and Deane J in Hammond, both quoted above, would lead to the conclusion that the questioning of the applicant under s. 264 on matters directly touching the pending criminal proceedings would constitute a contempt of court, notwithstanding that the s. 264 interrogation is conducted in private.

          I leave aside the questions whether the principle was expressed too widely in Hammond, as to which see the comment of Dawson J in Hamilton v Oades at 509, and whether the statement of Gibbs CJ is to be read
as dependent on the intention lying behind the questions, as to which see Toohey J in the same case at 515-516.  These are matters for the High Court, not for me.  It is sufficient for me to say that, upon reflection, I believe that the contempt of court submission must share the fate of its predecessor.  It is now clear that the contempt of court doctrine is also subject to legislative intent.  The reasons which impel the conclusion that Parliament intended s. 264 to operate notwithstanding the possibility of self-incrimination apply equally to contempt of court.  If it is predictable that taxation investigations will often delve into areas of criminal conduct, it is equally predictable that, on some occasions, charges will already be pending against persons sought to be questioned.  The rationale of Hamilton v Oades applies to this case."

          It is this passage which currently stands as authority for the proposition that ss 8C and 8D of the Administration Act exclude from consideration the doctrine of contempt of court in relation to examination of persons pursuant to s 264 of the Act. 

          The next paragraph of his Honour's judgment makes it clear that, in his Honour's view, the Court can retain a measure of control over the course of questioning in order to ensure that the powers given by s 264 are not abused.  I take this as meaning that the Court, if its jurisdiction is properly invoked, can restrain the use of the power for an improper purpose, such as seeking to assist a prosecution rather than advance the interests of the revenue.  Such a use of the section would, of course, be ultra vires the Act and subject to restraint on that basis.  It would, as a matter of principle, have nothing to do with contempt of the court in which the prosecution was being brought.

          His Honour also made reference to the Court's power to exercise supervision in circumstances where an undertaking has been given on behalf of the questioning authority that it will not disclose to the prosecution any information obtained under the compulsory process.  As I have already pointed out, no such undertaking has been given in the present case.  Indeed, it has been sought and refused.

          The question, therefore, is whether this Court accepts or differs from the opinion of Wilcox J that the relevant wording excludes, as a matter of construction, the application of the contempt doctrine.  His Honour observed in the passage cited that it was "now clear that the contempt of court doctrine is also subject to legislative intent".  There can, of course, be no doubt that the legislature could exclude the doctrine by express words.  It has not done so in ss 8C and 8D.  The question is whether, as a matter of construction, such an exclusion must necessarily be implied?

          Indeed, in Hamilton, Mason CJ (at 495) said in relation to the implied abrogation of the privilege against self-incrimination:-

          "The privilege against self-incrimination can only be abrogated by the manifestation of a clear legislative intention.  The intention may none the less be demonstrated by reference to express words or necessary implication.  ...   But the privilege is not lightly abrogated, and the phrase `necessary implication' imports a high degree of certainty as to legislative intention."

          As already discussed, the concept of contempt of court embraces many fundamental considerations, of which protection from self-incrimination may be one.  In my view, an even higher degree of certainty as to legislative intention is necessary before any statutory wording can be held to exclude that doctrine.

          It is necessary, then, to consider Hamilton and its rationale in order to determine whether it requires the result attributed to it in Donovan. 

          In the first place, Hamilton involved the construction of s 541 of the Companies (New South Wales) Code.  The section is quite different from the sections under consideration in this case.  The effect of the relevant sub-sections is adequately set out in the headnote, which reads as follows:-

          "Section 541(3) of the Companies (New South Wales) Code empowered the Supreme Court to order that a director of a company be examined on any matters relating to the affairs of the company.  Sub-section (5) empowered the Court to give such directions as to the matters to be inquired into and as to the procedure to be followed as it thought fit.  Sub-section (12) provided that: `A person is not excused from answering a question put to him at an examination ... on the ground that the answer might tend to incriminate him, but, where the person claims, before answering the question, that the answer might tend to incriminate him, the answer is not admissible in evidence against him in criminal proceedings other than proceedings under this section or other proceedings in respect of the falsity of the answer.'  Sub-section (8) made it an offence to refuse or fail to answer a question."

          It is to be observed that the examination contemplated by the section is to be conducted by the Court and under its control and direction; the privilege against self-incrimination is expressly abrogated; the answering of questions is compulsory; and, subject to the appropriate claim being made, the answers are not admissible in criminal proceedings against the examinee.  The structure, operation and underlying purpose of the section are clearly different from the sections involved in the present case.

          In Hamilton an order had been made pursuant to s 541(3) for the examination in the Supreme Court of New South Wales of a company director in relation to the affairs of the company which had been placed in liquidation.  The director had been previously charged with a number of offences arising out of his association with the company.  When the examination commenced before a Deputy Registrar the director made application for a direction pursuant to s 541(5) that the examination be restricted to those matters which were not the subject of the pending criminal proceedings.  This direction was refused.  The refusal was upheld by a single judge but an appeal from that decision was allowed by the Court of Appeal which ordered that the director was "not to be compelled to answer any question the answers to which may tend to incriminate [him] in respect of any of the criminal charges ... and either (a) concern those facts which constitute the ingredients of the offences the subject of the said criminal charges; or (b) which would tend to disclose a defence to the said criminal charges" ((1987-1988) 13 ACLR 281-282).  The appeal to the High Court was allowed and the order of the Court of Appeal set aside.

          It is necessary to consider the individual judgments in the High Court in order to arrive at a conclusion as to whether they have any bearing upon the question in this case.

          Mason CJ said of the order of the Court of Appeal (at 492) that its substantial effect was "that the respondent need not answer questions the answers to which may tend to incriminate him in relation to the offences charged and that the examination for practical purposes is stayed pending the determination of the charges".

          His Honour went on to indicate that the Court of Appeal had not made the order on the basis that there had been any abuse of the process through the use of the proceedings for an improper purpose, but had granted relief on the basis of its "inherent power to control its own proceedings, with the object of avoiding the risk of injustice being caused by such proceedings".

          His Honour then went on to consider what was "the risk of injustice" with which the Court of Appeal was concerned.  It is, in my view, apparent from his Honour's consideration of this question that he was concerned to demonstrate that the abrogation of the privilege against self-incrimination operated to deny to the examinee not only the right to withhold answers which might directly incriminate him "out of his own mouth", but also to withhold material of a "derivative" kind which "may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character" (per Lord Wilberforce, Rank Film Distribution Limited v Video Information Centre [1982] AC 380 at 443).  Once the privilege was abrogated by s 541(12), the director could not refuse to answer questions which might produce answers of the latter type.  Consequently, it did not lie within the inherent power of the Supreme Court to make an order which would contradict the power given by the statute.

          I am satisfied that his Honour was not directing his attention to any wider question, such as whether the section, as a matter of construction, excluded from consideration any operation to be accorded the doctrine of contempt of court.  It must also be borne in mind that the section in question empowered an examination of a person where it relevantly appeared that he "may have been, guilty of fraud, negligence, default, breach of trust, breach of duty or other misconduct in relation to that corporation" (s 541(2)(a)).  Further, subject to the rights given by sub-s (12), the examinee could be ordered to sign a written record or transcript of his evidence which might later be used in evidence against him in any legal proceedings (sub-ss (13) and (14)).  One of the purposes of the compulsory examination, clearly enough, was the acquisition of information from a person with a view to using that information for the purpose of his prosecution for offences arising out of his association with the company.  In these circumstances, the right to claim the privilege against self-incrimination would defeat one of the statute's major purposes.  The Court's inherent right to control its process could not operate, in effect, to restore the privilege which the statute had abrogated.

          Notwithstanding these considerations Mason CJ did foresee some scope for the Court's inherent powers.  He said (at 498-499):-

     "The court retains its power to give directions and to restrain questions in cases where the examination is being conducted for an improper purpose or constitutes an abuse of process: s. 541(5).  Thus if a liquidator were to conduct an examination directed to compel the examinee to disclose defences or to give pre-trial discovery, or to establish guilt, this examination may be restrained as an abuse of process: Hugh J. Roberts (1970) 91 W.N. (N.S.W.), at p. 541; Huston v. Costigan (1982) 45 A.L.R. 599, at p. 563; Re Gordon (1988) 18 F.C.R. 366.  But this is not the present case.

          Again, the inherent powers of the court are retained and the duty of the court to ensure the proper administration of justice may require that orders be made of types other than those which restore the privilege against self-incrimination or which serve to defeat the purposes of the section.  For example, an examination may need to be held in private, or the publication of names or evidence restricted: Huston v. Costigan.  Or it may be that the court in conducting the examination may feel it necessary, in accordance with the statutory purpose, not to permit a particular question to be asked which would prejudice the examinee's fair trial: Mortimer v. Brown (1970) 122 C.L.R., at pp. 502-503; Barton v. Official Receiver (1977) 13 A.L.R. 238, at pp. 289-290.  But the types of questions which may warrant such a course should not be predicted by a court in advance of their being asked: Barton, at p. 290.  None of these situations encompasses the present case because the orders the subject of this appeal are not orders of the kind permissible under the section."

          Although the first paragraph of this quotation appears to relate to the concept of abuse of process or unauthorised or impermissible use of the section, the second paragraph, in my view, certainly imports considerations that relate to the concept of contempt of court.  In other words, the Chief Justice found room, even in the application of the stringent provisions of s 541, for the potential application of the rules of contempt.  It certainly does not appear that he regarded the section as impliedly excluding them.

          Deane and Gaudron JJ in a joint dissenting judgment would have upheld the orders made by the Court of Appeal.  In their view the express abrogation of the privilege against self-incrimination effected by the section did not operate to prevent the making of the orders appealed against.  This was because, in their Honour's view, "the injustice occasioned when an examination will involve matters the subject of pending criminal charges is not only that the examination arises out of or will disclose the commission of an offence, but that the examination will impose an unfair burden upon the examinee in defending the pending charges" (at 503).  Their Honours clearly recognised that the section did not operate to exclude by implication these considerations which are germane to the concept of contempt of court.  I do not understand this portion of their judgment to be in conflict with the portion cited from the judgment of the Chief Justice.

          Dawson J in his judgment (at 508-509) appears to suggest that the passage cited above from the judgment of Gibbs CJ in Hammond may, as a result of the urgency of that decision, have been expressed too widely.  However, I do not read anything in Dawson J's judgment to suggest that he was considering questions that fell outside the scope of the privilege against self-incrimination.

          Again, in my view, the judgment of Toohey J illustrates that his Honour was directing his attention to the question whether the orders of the Court of Appeal could stand in the face of the clear abrogation by the statute of privilege against self-incrimination.  His Honour was of the opinion that they could not.  Questions could be asked of the examinee which bore directly or indirectly upon the offences with which he was charged.  Even so, his Honour was of the view that questions could be vitiated by "oppression or injustice" and that "[c]learly, a question designed to elicit a direct admission of guilt would fall into this category" (at 515).  In his view, Hammond should be given a narrow interpretation to the effect that only questions designed to establish that the examinee is guilty of the offence charged, can lead to a real risk of interference with the administration of justice.

          His Honour held, consistently with the other judgments of the Court, that "in the face of a clear statutory abrogation of a privilege against self-incrimination, it is asking too much of the inherent jurisdiction of the Court to treat it as justifying a power to reject a question in examination merely because the answer may tend to incriminate the person being examined" (at 516).  However, his Honour said (at 517) "[a]s it happens, somewhat paradoxically, questions the answers to which would tend to disclose a defence to pending criminal charges are questions which might well fall within this area of discretion [to exclude the question].  But it is not on the ground of self-incrimination, as suggested by the order of the Court of Appeal.  It is because the disclosure may be unfair to the person being examined; equally, it may have no relevance to the area of inquiry."

          These passages indicate to me that his Honour was principally concerned with the question of self-incrimination.  However, he foresaw the situation that even where the privilege had been abrogated, other grounds could exist of a discretionary kind based upon concepts of fairness and justice, whereby particular questions might be disallowed.  There is certainly nothing in his Honour's judgment which suggests to me that where the privilege against self-incrimination has been abrogated by statute, it necessarily follows that, in circumstances where there are parallel criminal proceedings, considerations relating to contempt of those proceedings are also necessarily excluded.

          A consideration of the judgments in Hamilton therefore satisfies me that the case is not authority for any proposition that the doctrine of contempt of court cannot coexist with the abrogation of the privilege against self-incrimination.  In particular, it provides no rationale whereby the provisions of ss 8C and 8D of the Administration Act must necessarily be taken, as a matter of construction, to have excluded those considerations.  Accordingly, I must respectfully disagree with the opinion of Wilcox J in Donovan and agree with the opinions expressed by Carr J at first instance and by Hill and Lindgren JJ in this appeal. 

          The respondent is entitled to rely upon the doctrine of contempt of court in the projected examination of him under s 264, even though he is not entitled to rely on the privilege against self-incrimination.  As has been noted, it has been stated on behalf of the appellant that should this Court come to this conclusion he would not seek to examine the respondent during the pendency of the criminal proceedings.  There is, accordingly, no reason for the making of any coercive orders.  Indeed, none are sought.  The making of an appropriate declaratory order is not without difficulty and is also, in my view, unnecessary.  I agree, for the reasons given by Hill and Lindgren JJ, that the second order and declaration made by Carr J should be set aside and that no declaration should be made by this Court.  To this extent the appeal should be allowed.

          I agree with the orders proposed by Hill and Lindgren JJ.

            I certify that this and the preceding twenty five (25) pages are a true copy of the reasons for judgment herein of the Honourable Justice M. L. Foster.

            Associate:

            Date:   4 DECEMBER 1995

IN THE FEDERAL COURT OF AUSTRALIA     )

                                      )

WESTERN AUSTRALIA DISTRICT REGISTRY   )  No WAG 98 of 1995

                                      )

GENERAL DIVISION                      )

                ON APPEAL FROM A SINGLE JUDGE

              OF THE FEDERAL COURT OF AUSTRALIA

              BETWEEN:      DEPUTY COMMISSIONER OF TAXATION

                             Appellant

                  AND:      HUGO JOHN DE VONK

                             Respondent

CORAM:    FOSTER, HILL & LINDGREN JJ

PLACE:    SYDNEY (Heard in Perth)

DATED:    4 DECEMBER 1995

                    REASONS FOR JUDGMENT

HILL & LINDGREN JJ:

          The appellant, the Deputy Commissioner of Taxation, appeals against the judgment of a judge of this Court to the extent that it was decided that a proposed interrogation by officers of the Australian Taxation Office of the respondent, Mr de Vonk, pursuant to s264 of the Income Tax Assessment Act 1936 (Cth) ("the Act"), could be in contempt of the District Court of Western Australia before whom a prosecution of Mr de Vonk is pending.  Mr de Vonk cross-appeals against the judgment to the extent to which it was held that Mr de Vonk was not entitled to refuse to answer questions put to him on the grounds that his answers to those questions might tend to incriminate him.  He also claims that the decision of the Deputy Commissioner to interrogate him was an abuse of power and should be set aside.

          On 15 February 1994 Mr de Vonk was charged along with five others with three offences.  The first offence with which he was charged was conspiracy to defraud the Commonwealth, contrary to s86A of the Crimes Act 1914 (Cth).  The second and third counts alleged conspiracy to commit an offence against a law of the Commonwealth, namely the Financial Transactions Reports Act 1988, contrary to s86(1)(a) of the Commonwealth Crimes Act.  It seems that Mr de Vonk and four others were partners in a partnership known as the Sunset Gold Mining Syndicate.  The first of the three charges alleges a dishonest representation to the Australian Taxation Office, that the income of that partnership was exempt income.

          Three days after the indictment, Mr de Vonk was served with a notice under s264 of the Act requiring him to attend and give evidence concerning his income or assessment and that of the partnership for the period 1 July 1989 to 30 June 1993.  Subsequently Mr de Vonk offered, through his solicitors, to answer any questions which the officers may wish to put to him once the matter of the criminal charges pending in the District Court in Perth had been finalised.  That offer, repeated during the course of the hearing was, however, rejected.

          Mr de Vonk sought judicial review of the decision to issue the notice under s264, pursuant to the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth).  In
support of this application for review a number of matters were raised.  Of these, three only remain, being matters the subject of the appeal and cross-appeal.

          The first of these matters was disposed of quite briefly in the judgment appealed against.  His Honour was not prepared to find, having regard to all the circumstances, that the notice under s264 was issued with an improper purpose.  As to the second of the matters the (subject of the cross-appeal) his Honour held, following two earlier single judge decisions of this Court in Stergis v Commissioner of Taxation (1989) 89 ATC 4442 (Hill J) and Donovan v Commissioner of Taxation (1992) 92 ATC 4114 (Wilcox J) that the common law privilege against self-incrimination had been abrogated, either expressly or by necessary implication.  As to the third matter (the subject of the appeal), his Honour was of the view that to permit questions to be put covering the same area as that potentially to be traversed in the criminal trial might constitute an interference with the administration of justice and amount to contempt.  Because no questions had as yet been put to Mr de Vonk his Honour declared that the conduct of an interrogation prior to the hearing might, depending upon the specific questions asked and all other relevant circumstances, constitute a contempt of the court before which such charges were to be heard and that accordingly the decision to ask such questions was not authorised by s264 of the Act.  In so holding his Honour expressed the view that the legislature had not expressly or by necessary implication legislated so as to permit questions to be asked where in the circumstances the asking of such questions might constitute a contempt of court.

WAS THERE AN IMPROPER PURPOSE?

          Section 264 of the Act is in the following terms, so far as is relevant:

          "1.  The Commissioner may by notice in writing require any person, whether a taxpayer or not, including an officer employed in or in connection with any department of a Government or by any public authority -

              (a)  to furnish him with such information as he may require; and

              (b)  to attend and give evidence before him or before any officer authorised by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto.

          2.   The Commissioner may require the information or evidence to be given on oath and either verbally or in writing, and for that purpose he or the officers so authorised by him may administer an oath.

          3.   ..."

          Section 264, unlike its companion section s263, does not expressly qualify the power conferred upon the Commissioner as being exercisable only for the purposes of the Act.  None the less it may readily be accepted that where a coercive power such as s264 has been conferred, that power may only be exercised bona fide for the purpose for which it was conferred (cf O'Reilly v The Commissioners of the State Bank of Victoria (1982-3) 153 CLR 1 at 48).

          If nothing else appeared but that a notice given under s264 was issued three days after criminal charges had been brought in circumstances where the charges were tax-related, it might readily be inferred that a purpose of the issuing of the notice was to aid the Commissioner in obtaining further evidence in support of the criminal charges.  It may be noted that while ss3C and 3D of the Taxation Administration Act (1953) (Cth) would prohibit disclosure to a prosecutor or a court in most circumstances, s3E would permit the disclosure of information obtained, inter alia, by the exercise of powers under s264 of the Act to a law enforcement agency where there had been what the legislation refers to as a "serious offence".  Further, voluntary communication of the information to a court is not prohibited if the prosecution is a "tax-related offence".  Suffice it to say, having regard to the provisions of s3E of that Act, that while any offence triable on indictment is a "serious offence", only the first of the charges, that is to say that related to s86A of the Crimes Act, would be a "tax-related offence".

          Affidavit evidence was, however, filed on behalf of the Commissioner from a Mr Ross, an Audit Manager in the Australian Taxation Office at whose instance the notice under s264 had been issued.  In his affidavit he said, among other things, that he had approved the issue of the notice:

          "... for the purposes of the Act and not for the purpose of gathering evidence for use in the criminal proceedings pending against the Applicant".

In a second affidavit this statement was substantially repeated in the following paragraph:

          "The Applicant is still required to attend and give evidence for the purpose of determining the assessable income of the Applicant and the Sunset Gold Mining Syndicate for the purpose of the Income Tax Assessment Act 1936 and not for the purpose of gathering evidence for use in the criminal proceedings pending against the Applicant."

          Mr Ross was not cross-examined.  In these circumstances the learned trial judge was not prepared to find that the notice was issued with an improper purpose.  This was so notwithstanding other evidence which suggested that the audit of the income tax affairs of the partnership had been completed.

          It may be noted that the evidence of Mr Ross was expressed in terms which, while negating the suggestion that the sole purpose of issuing the notice was to obtain evidence in connection with the criminal proceedings, may be thought to have left open the question whether that may nevertheless have been one of the purposes.  It would suffice to invalidate the notice if one of the purposes for which it was issued was an improper purpose provided that such purpose was a not insignificant purpose.

          In our view, however, it would be conducive of injustice for such an inference to be drawn adverse to Mr Ross in a circumstance where he has not been cross-examined and where the inference has not been put to him.  This is no more than a matter of fundamental fairness.  If it is intended to suggest something which is directly or by inference contrary to a witness's testimony or which has not been covered by that testimony, then an opportunity must be given to the witness to meet the case which is proposed to be raised so that the witness has an opportunity to explain or destroy that case: Browne v Dunn (1894) 6R 67 and see the discussion of the rule in the judgment of Hunt J in Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 1 NSWLR 1 and in that of Kirby P (with whom Mahoney and Clarke JJA agreed) in Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 (CA).

          In these circumstances his Honour correctly refused  to find that the notice issued under s264 was issued for an improper purpose.

THE PRIVILEGE AGAINST SELF-INCRIMINATION

          It is the genius of the common law that it gave rise to judge-made rules protecting the citizen in response to perceived abuses of fundamental rights and freedoms.  One such rule was the right of the individual to remain silent in circumstances where his or her testimony might tend to incriminate.  As McHugh J points out in Environmental Protection Authority v Caltex Refining Co Pty Ltd (1992-3) 178 CLR 477, the so-called privilege against self-incrimination arose in the seventeenth century as a result of dissatisfaction with the practices of the Council of Star Chamber and the Court of High Commission (see at 543-4).  Certainly by the end of the reign of Charles II it was accepted that an accused person might refuse to answer a question which might tend to incriminate him.

          Those critical of the modern ability of the common law to protect the rights of individuals who seek now to espouse the entrenchment of a Bill of Rights into the Constitution, point to the concomitant and alleged weakness of the common law, namely, that it is, subject to any rights which may be found expressly or by implication in a written constitution, subject to the overriding supremacy of Parliament.  Thus it remains open at any time for Parliament to legislate common law rights out of existence.

          While it is accepted that fundamental common law rights may be abrogated by Parliament, the courts will not lightly presume that Parliament intended so to do.

          The principles to be applied have been enunciated in a series of decisions in the High Court commencing with Mortimer v Brown (1971) 122 CLR 493 and concluding with Hamilton v Oades (1989) 166 CLR 486.  In the last of those cases Mason CJ (at 495) said:

          "The privilege against self-incrimination can only be abrogated by the manifestation of a clear legislative intention.  The intention may none the less be demonstrated by reference to express words or necessary implication. ... But the privilege is not lightly abrogated, and the phrase `necessary implication' imports a high degree of certainty as to legislative intention."

          Although in Hamilton v Oades Deane and Gaudron JJ dissented in the result, their dissent was not a dissent from the statement of principle as expressed by Mason CJ in that case.  Their Honours, in their joint judgment (at 500-501), express the principle in the following terms:

          "The rules of statutory construction require a clear expression of legislative intent before a provision will be held effective to abrogate or limit a privilege as fundamental as the privilege against self-incrimination...  In the present case that intent is made manifest by the words of s.541(12). ... An intent to abrogate or limit the privilege may also be made manifest by the purpose of the provision in question and the public interest which it is intended to serve ...".

          The language of s541(12) of the Companies (New South Wales) Code considered in Hamilton v Oades admitted of no argument so far as the privilege against self-incrimination was concerned.  The legislative intent was unequivocal.  Sub-section (12) provided:

          "A person is not excused from answering a question put to him at an examination held pursuant to an order made under sub-section (3) on the ground that the answer might tend to incriminate him ...".

          In Mortimer v Brown there was no explicit statutory abrogation of the privilege.  Section 250 of the Companies Act 1961 (Q.) required an examinee to "answer all such questions as the Court puts or allows to be put to him".  The High Court held unanimously, by reference to the character and purpose of the provision, that the privilege against self-incrimination had been abrogated.  It was in the public interest and in furtherance of the honest conduct of the affairs of companies that those concerned with such affairs be compellable to answer questions.  So too in the context of bankruptcy the privilege gave way to the requirement that the bankrupt make a full disclosure of his affairs, cf In re Atherton [1912] 2 KB 251 and In re Paget [1927] 2 Ch 85.  However, the fact that the legislation renders a statement made under coercive power inadmissible will not of itself suffice to reveal an intention to abrogate the privilege if the context otherwise does not require that result: Sorby v The Commonwealth (1983) 152 CLR 281.

          Some assistance is given in the joint judgment of Mason ACJ, Wilson and Dawson JJ in Pyneboard Pty Ltd v Trade Practices Commission (1982-83) 152 CLR 328 at 341 in determining whether the privilege is impliedly excluded.  Thus their Honours said:

          "The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification.  This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation.  In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings."

          In Pyneboard the issue was whether a corporation or person served with a notice under s155 of the Trade Practices
Act 1974 (Cth) might refuse to answer questions relying  upon the privilege against exposure to a civil liability to penalties.  Section 155(5) was in the following terms:

          "A person shall not -

          (a)  refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it; ...".

          Sub-section (7) of the same section referred directly to self-incrimination but in circumstances where the privilege referred to was concerned with incrimination in criminal proceedings rather than exposure to a civil liability.  The provisions of sub-sec(5) were said by Mason ACJ, Wilson and Dawson JJ to be significant as being:

          "... quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise."

Their Honours continued (at 343):

          "Moreover, it is apparent that the purpose of conferring the power and imposing the obligation is to enable the Commission to ascertain whether any contravention of the Act has taken place, or is taking place, and to make the information furnished, the documents produced and the evidence given admissible in proceedings in respect of contravention of the Act, a purpose which would be defeated if privilege were available.  As in Mortimer ... the comment may be made that the provision is valueless if the obligation to comply is subject to privilege.  Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Pt IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions.  The consequence would be that the provisions of Pt IV could not be enforced by successful proceedings for a civil penalty under s.76(1)."

          There is much to be said for the view that the context of a coercive power to require the answer to questions in a revenue statute would ordinarily abrogate the privilege against self-incrimination, even without the use of language expressly stating that the privilege has been abrogated.  This appears to have been the view adopted in the United Kingdom, cf Commissioners of Customs and Excise v Harz [1967] 1 AC 760, a case concerning s20(3) of the Finance Act 1946 (UK) and its successor, s24(6) of the Purchase Tax Act 1963 (UK), which conferred investigative powers upon the Commissioners of Customs and Excise with respect to goods subject to purchase tax, see too Commissioners of Customs and Excise v Ingram [1948] 1 All ER 927 (CA) also in the context of s20(3) of the Finance Act 1946.  In the latter case, in a passage to which Hill J referred in Stergis, Lord Goddard said (at 929):

          "The very object of the Finance Act, 1946, in the sections which relate to this matter, is to give to the Crown the power of investigating a person's accounts and so forth to see whether he is defrauding the Revenue by not paying that which he ought to pay.  To my mind, no new principle here is introduced into the law.  It is said that this is compelling a man to incriminate himself or putting an onus on a man to show that he has not been committing an offence, but, it is quite a commonplace of legislation designed to protect the revenue of the Crown, as it is realised that all the information must generally be within the knowledge of the taxpayer or the subject, to put an onus on him or to oblige him to do certain things which may have the effect of incriminating him ... It is said that when a man is called on under s.20 to produce his documents, his books, invoices or accounts, or whatever they may be, he is entitled to take objection and say: `I will not produce this one or that one because it may incriminate me.'  It seems to me that that would be stultifying the whole purpose of the section, and the claim for privilege, which, as between subject and subject in an action, may be made, has no application to this class of discovery or production."

          It may be noted at this point that it has now been established as the law in Australia that the privilege against self-incrimination is not confined to judicial proceedings.  Rather, it has been held to apply to administrative proceedings so as to afford a defence to the failure to answer questions, unless otherwise statutorily abrogated: Pyneboard at 341 and Sorby at 309.

          As Hill J pointed out in Stergis, prior to 1984 the sanction for a failure to answer a question put under s264(1) was to be found in s224 of the Act which was in the following terms:

          "Any person who refuses or neglects to duly attend and give evidence when required by the Commissioner or any officer duly authorized by him, or to truly and fully answer any questions put to him by, or to produce any book or paper required of him by the Commissioner or any such officer, shall, unless just cause or excuse for the refusal or neglect is shown by him, be guilty of an offence."

          No doubt the availability of a defence of "just cause or excuse" left a serious argument to be made that the privilege against self-incrimination had not been abrogated, notwithstanding the context of the legislation.

          Section 224 was repealed in 1984 and replaced by the present provisions of ss8C and 8D of the Taxation Administration Act.  It suffices here to set out only the terms of s8C.  Section 8D is, so far as is presently relevant, to similar effect.  Section 8C provides as follows:

          "A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:

          (a)  to furnish a return or any information to the Commissioner or another person;

          (aa)[inserted by Act No 97 of 1988] to give information to the Commissioner in the manner in which it is required under a taxation law to be given;

          (b)  to lodge an instrument with the Commissioner or another person for assessment;

          (c)  to cause an instrument to be duly stamped;

          (d)  to notify the Commissioner or another person of a matter or thing;

          (e)  to produce a book, paper, record or other document to the Commissioner or another person; or

          (f)  to attend before the Commissioner or another person;

          to the extent that the person is capable of doing so is guilty of an offence."

          As Wilcox J points out in Donovan, ss8C and 8D were inserted shortly after the judgment of the High Court in Pyneboard.  As his Honour suggests, it is quite likely that the drafter of the amendment regarded Pyneboard as authority for the proposition that the words "to the extent that the person is capable of complying with it" evidenced the intention to exclude the privilege against self-incrimination.  Certainly the change of formulation from "just cause and excuse" to "capable" would seem to have been deliberate and to reveal an intention on the part of Parliament to exclude as a defence, inter alia, the privilege against self-incrimination.

          In these circumstances we are of the view expressed in Stergis that the context of the legislation combined with the terms of ss8C and 8D lead to the conclusion that the privilege has been abrogated.  Clearly it is of the utmost importance that a taxpayer disclose to the Commissioner all sources of income.  Failure so to do would constitute an offence.  If the argument were to prevail that the privilege against self-incrimination was intended to be retained in tax matters, it would be impossible for the Commissioner to interrogate a taxpayer about sources of income since any
question put on that subject might tend to incriminate the taxpayer by showing that the taxpayer had not complied with the initial obligation to return all sources of income.  Such an argument would totally stultify the collection of income tax.  It is convenient to repeat what Hill J said in Stergis on this matter (at 4454):

          "Against this argument could be put the context in which sec.264 appears in the Act.  The Commissioner of Taxation is obliged by the Act to cause assessments to be made of the taxable income and the tax payable by all taxpayers and, if necessary, to take steps to recover that tax.  To protect the revenue the legislature has provided for a number of offences including the making of false statements, the irregular keeping of records and the like.  For the purposes of the Act the Commissioner is given full and free access to all buildings, places, books, documents and other papers under sec.263, and is empowered to obtain information or evidence under sec.264.  Material which a taxpayer has in his possession and in respect of which the Commissioner may require access under sec.263 may reveal to the Commissioner the participation of a taxpayer in an offence against the general law or it may reveal that the taxpayer has not kept proper records in accordance with sec.262A(1) or that an income tax offence or offence under some other law administered by the Commissioner has been committed.  Similarly, information or evidence which a taxpayer or other person may be required to furnish or give under sec.264 may tend to incriminate the person required to furnish such information or give such evidence in the same ways.  The legislative policy of giving wide power to the Commissioner and those authorised by him under sec.263 and 264, the subject of comment in O'Reilly & Ors v. Commrs of the State Bank of Victoria & Ors 82 ATC 4671; 83 ATC 4156; (1982-1983) 153 C.L.R. 1 and F.C. of T. v. ANZ Banking Group Ltd. (Smorgon's case) 77 ATC 4522; 79 ATC 4039; (1977-1979) 143 C.L.R. 499; Smorgon & Ors v. F.C. of T. & Ors 76 ATC 4364; (1976) 134 C.L.R. 475 and Southwestern Indemnities Ltd. v. Bank of N.S.W. and F.C. of T. 73 ATC 4171; (1973) 129 C.L.R. 512, would be frustrated if the privilege were found not to be abrogated."

          Senior counsel for Mr de Vonk sought to rely upon the provisions of Article 14(3)(g) of the International Covenant on Civil and Political Rights ratified by Australia on 13 November 1980.  That article, which has not yet been incorporated in any legislation and so is not part of the municipal law, provides relevantly:

          "3.  In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality:

          ...

          (g)  Not to be compelled to testify against himself or to confess guilt."

          While not part of municipal law there is no doubt that Australia's treaty obligations are a significant influence on the development of the common law: cf Environmental Protection Authority v Caltex Refining Co Pty Ltd (supra at 499 per Mason CJ and Toohey J); Mabo v The State of Queensland (No. 2) (1991-2) 175 CLR 1 at 41-3 per Brennan J.  Further it is clear as the High Court has now held in Minister for Immigration v Teoh (1995) 128 ALR 353 that the ratification of an international treaty will found a legitimate expectation that a decision-maker will act in conformity with it.

          In our opinion, however, the argument is of no assistance to Mr de Vonk.  As a matter of construction, the treaty is concerned not with the right to refuse to answer questions posed in an administrative inquiry but, as it says, with the question of the determination of a criminal charge.  The article may have relevance to the question whether a court would receive in evidence answers to questions put to Mr de Vonk in an investigation held under s264, but it has no relevance to his right to refuse to answer questions properly put to him under s264 on the ground that the answers might tend to incriminate him.

          For these reasons we are of the view that the cross-appeal must fail.

CONTEMPT OF COURT?

          It was conceded on behalf of the Deputy Commissioner that the officers who were to conduct the inquiry under s264 proposed to inquire into matters that would bear upon the three offences with which Mr de Vonk had been charged and would cover the factual circumstances the subject of the criminal charges.  Put in another way, it was conceded that the facts relevant to be inquired into in the s264 interrogation were significantly the same as and overlapped the facts relevant to the offences charged.  In the result it was conceded that there was a risk that the answers which Mr de Vonk would give would tend to incriminate him and in so doing could interfere with the course of justice.  However, it was submitted for the Deputy Commissioner that to the extent that the question of contempt of court went beyond self-incrimination, ss8C and 8D of the Tax Administration Act operated to abrogate the common law rights, just as the privilege against self-incrimination was likewise abrogated by those sections.

          The submissions on either side gave rise to some ambiguity.  As we understood them, the submissions made on behalf of the Deputy Commissioner sought to equate the question of contempt of court with the question of self-incrimination, giving rise to a submission that if ss8C and 8D operated to abrogate the privilege against self-incrimination then it should not matter whether the questions were put prior to a charge being laid or subsequently.  Reliance was placed in support of this submission upon the decision in Hammond v Oades as being authority for the proposition that if self-incrimination were abrogated that abrogation went as much to a time prior to the laying of charges as to a time after charges were laid.  Counsel for the respondent, on the other hand, put his submissions on the basis that the pursuit of an administrative inquiry while court proceedings were pending posed a real risk of the interference with the administration of justice and were for that reason in contempt of court.  On this view the question of self-incrimination was irrelevant to the issue to be determined.

          While the question of self-incrimination is not irrelevant to the question whether a s264 inquiry would be in contempt of the District Court of Western Australia, it seems to us that the issue ranges more widely than the issue of self-incrimination.

          Unless Parliament has acted to authorise an investigation in contempt of court (an authorisation not lightly to be inferred), it must be conceded that the coercive power of investigation conferred by s264 could, in a particular case, be exercised in a way which would constitute a contempt.  The question would, however, not ordinarily be likely to arise.  If the power to interrogate under s264 were exercised for a purpose of interfering with the administration of justice in a court, then no doubt the exercise of the power would be in contempt of that court.  But so to use the power would be an abuse of the power which could be set aside.  To conduct an investigation for a purpose of interfering with the administration of justice would not be a bona fide exercise of the power under s264 at all.

          Nevertheless, circumstances could arise where, the power not being intended to be exercised for the purpose of interfering with the administration of justice, the asking of questions might nevertheless bring about a substantial risk of serious injustice.

          We should say at the outset that one of the difficulties of the appeal stems from the fact that the issue is raised in the context of administrative review of the decision to conduct an examination under s264, rather than by reference to particular questions sought to be asked in the course of that examination.  Indeed the Deputy Commissioner, through his counsel, refused to outline the questions intended to be posed.  To a large extent this makes the issues in the appeal hypothetical.  No doubt it is for this reason that counsel for the Deputy Commissioner made the concession to which reference has already been made.  It also complicates the framing of declaratory relief in the event that a case of contempt can be made out.

          In Victoria v Australian Building Construction Employees and Builders Labourers' Federation (1981-1982) 152 CLR 25 it was held that unless expressly authorised by statute the conduct of a commission of inquiry otherwise lawfully appointed could be a contempt of court, at least to the extent that it created a risk of, or involved a tendency to interfere with, the administration of justice.  The Court, however, was divided on the question whether in the circumstances it had been shown that the conduct of the Royal Commission into the Building Industry did tend to interfere with the course of justice, the majority holding that there had been no interference and the minority being of the view that a case of interference had not been made out.  The case is, however, authority for the proposition that the question to be addressed where contempt is raised is whether there is a substantial risk of serious injustice: per Mason J at 99.  In that case the subject matter of the inquiry covered the same ground as proceedings that had been commenced in the Federal Court, albeit the inquiry was not an inquiry into the matters that fell for decision in the Federal Court.  Gibbs CJ put the question by reference to a "real risk" when his Honour said (at 56):

          "There is a contempt of court of the kind relevant to the present case only when there is an actual interference with the administration of justice, or `a real risk, as opposed to a remote possibility' that justice will be interfered with...  The essence of this kind of contempt is a `real and definite tendency to prejudice or embarrass pending proceedings'...".

          His Honour, in the same passage, spoke of the need to reconcile in that case the conflicting principles of the public administration of justice on the one hand, and the protection of freedom of speech on the other.  It was pointed
out that actual intention or purpose to interfere with proceedings, while relevant, will never be decisive.

          It is clear enough that the putting of questions in an examination under s264 might, in a particular case, constitute a contempt of court notwithstanding that the answers might not in any way tend to incriminate the person to whom the questions are addressed.  For example, questions could be put under s264 which touched upon areas the subject of civil proceedings which would not violate the privilege against self-incrimination but could represent a substantial interference with the civil proceedings.  Thus in Brambles Holdings Ltd v Trade Practices Commission (No.2) (1980) 44 FLR 182, Franki J held that the issue of a notice pursuant to s155 of the Trade Practices Act 1974 (Cth) where proceedings were pending in this Court to which the Trade Practices Commission was a party, constituted a contempt of court.  It may, of course, also be noted that his Honour also held that there was no power to issue the notice for the collateral purpose of obtaining evidence in such proceedings.

          In the course of his judgment Franki J cited the comments of Lord Diplock in Attorney-General v Times Newspapers Ltd [1974] AC 273 at 309 to the effect that litigants should be able to rely upon there being no usurpation by any other person of the function of a court to
decide cases in accordance with law once the dispute has been submitted to a court of law.

          In the context of taxation, Northrop J in Commercial Bureau (Aust) Pty Ltd v Allen (1984) 1 FCR 202 and Saunders v Federal Commissioner of Taxation (1988) 88 ATC 4349 was prepared to contemplate that the exercise of powers pursuant to s263 of the Act to gain access to premises could, in an appropriate case, constitute contempt of court.  However, the circumstances did not, in that case, give rise to a contempt of court.

          In Donovan it was argued before Wilcox J that once criminal proceedings had commenced, the use of s264 in circumstances where the answer might tend to incriminate the person charged with the offence would be a contempt of court.  In other words, the issue was put to his Honour on the basis that the relevant contempt was to be found within (and it would seem solely within) the potentiality for self-incrimination.  His Honour was of the view that the issue was to be resolved by reference to the legislative intent.  So much may be accepted.  His Honour, however, then concluded that the reasons which impelled him to the conclusion that Parliament intended s264 to operate, notwithstanding the possibility of self-incrimination, applied equally to contempt of court.  His Honour said:

          "If it is predictable that taxation investigations will often delve into areas of criminal conduct, it is equally predictable that, on some occasions, charges will already be pending against persons sought to be questioned.  The rationale of Hamilton v Oades applies to this case."

          Thus it is necessary to consider Hamilton v Oades more carefully to determine whether that case extended beyond the question of self-incrimination.

          As already noted Hamilton v Oades concerned the conduct of an examination under s541(3) of the Companies (New South Wales) Code in circumstances where Mr Oades had already been charged with an offence.  Mr Oades sought a direction from the Registrar that the examination be restricted to matters not the subject of the pending criminal proceedings against him.  That direction was refused.  The Court of Appeal held that during the pendency of the charges Mr Oades was not to be compelled to answer any questions which might tend to incriminate him and concerning facts which constituted the ingredients of the offences or which tended to disclose a defence to the charges.  By majority the appeal was allowed and the orders of the Court of Appeal set aside.  In the result the Registrar's refusal to direct that Mr Oades' examination be restricted to matters not the subject of the pending criminal proceedings was confirmed.

          The headnote to the case in the Commonwealth Law Reports would suggest that the author of the headnote saw the case as one restricted to the question of self-incrimination.  That is because the substantial effect of the order made by the Court of Appeal was concerned with the issue of self-incrimination: cf per Mason CJ at 492.  Nevertheless it would seem from the report of argument that the question of contempt of court was the subject of argument and consideration, separate from the issue of self-incrimination.  Although Mason CJ referred both to self-incrimination and to interference in the administration of criminal justice (at 494), his Honour's subsequent discussion (at 495 et seq) appears restricted to the question of self-incrimination.  Thus (at 498) his Honour referred with approval to the comments of Pincus J in Re Gordon (1988) 18 FCR 366 at 372 as to the absence of any statutory distinction in the relevant legislation between self-incrimination prior to the instigation of criminal proceedings and self-incrimination after future proceedings had been commenced, as if this was the real issue between the parties.

          Likewise, Dawson J appears to have restricted his consideration (so far as the issue of contempt was concerned) to the question of self-incrimination.  His Honour (at 508) said:

          "In the context of a public examination, the time at which charges, if any, are
laid with often be adventitious.  Moreover, having regard to the protection given against the answer being used, the effect of being required to answer a question after criminal proceedings have begun does not necessarily carry consequences which are more adverse than if the question is asked at an earlier time.  In any event, the purpose of the section remains the same whether charges have been laid or not.  The concern for an individual is not, beyond the safeguard provided, to prevail over the public need to be informed about misconduct in relation to the affairs of a company under examination."

          Toohey J, on the other hand, while likewise of the view that there could be no essential difference between the abrogation of self-incrimination prior to proceedings being commenced and self-incrimination after proceedings had been commenced, appears to have considered the matter more broadly (at 514 ff).

          Deane and Gaudron JJ dissented in the result.  However, their Honours did so on an issue of the power of the Court to control and supervise its proceedings under s541(12) or under the inherent power of the Court to prevent injustice.  It is in that context that their Honours said (at 502):

          "The public examination on oath or affirmation of a person charged with an indictable offence on matters with which the charge is concerned will ordinarily be viewed as seriously and unfairly burdensome, prejudicial or damaging if for no reason other than that it will ordinarily be viewed as constituting a real risk to the fairness and integrity of the trial of that charge.  That is so whether or not the examination involves questions the answers to which have a tendency to incriminate.  If the answers have a tendency to incriminate, an even greater risk is constituted by the public claiming of the privilege against self-incrimination."

          On the whole we think the case should be taken as concerned only with the privilege of self-incrimination.  If however the case were to stand for a broader proposition, namely that in the context of the legislation there under consideration the legislature had authorised the asking of questions which, while not giving rise to the possibility of self-incrimination, might nevertheless constitute a contempt of court, this broader proposition can be supported by the express reference in the legislation to "self incrimination".   That reference carries with it, as the various judgments of the High Court demonstrate, the consequence that no distinction was to be recognised between the case where the questions were put before a charge had been laid and a case where the questions were put afterwards.  So it may be concluded that the legislature intended to abrogate the common law doctrine of contempt of court, since questions asked after charge would otherwise have constituted such a contempt.

          The question that arises in the present case is thus whether there is anything in the context of s264 of the Act or in the language of ss8C and 8D of the Taxation Administration Act or both, which leads to the conclusion that Parliament intended that the power to interrogate under s264 could be used in circumstances where so to do might tend to constitute a real risk of interference with the administration of justice.

          The considerations which, without more, might have suggested that the privilege of self-incrimination could not apply in the context of income tax are not present, at least in as acute a form, in the context of contempt of court.  The evident purpose of ensuring a proper disclosure of income by taxpayers would not be frustrated if the power of investigation were curtailed in circumstances where litigation had been commenced and the power of interrogation might interfere with the administration of justice.  Thus the only question seems to be whether the express requirement that questions be answered to the extent of the capability of the answerer should be taken as necessarily requiring questions to be answered irrespective of the impact upon the administration of justice.

          As we have already indicated the result in Hamilton v Oades may well have been influenced by the reference to self incrimination contained in the legislation there under consideration.  There is no such express provision in the Income Tax Assessment Act or the Taxation Administration Act.  On the whole we think that the legislature should not be taken in s264 of the Act and ss8C and 8D of the Taxation Administration Act to have authorised the compulsory interrogation of persons in circumstances where so to do might constitute an interference with the administration of justice, civil or criminal.  The decision to refuse to answer a question on the grounds of self-incrimination is a matter for the person to whom the question is put.  It remains within the capability of that person to answer.  Contempt of court is not a matter for the parties to litigation, or for that matter any person not a party; it is a matter under the sole control of the Court itself.  If it is a contempt of court to require a person under compulsion to answer a question that person could not excuse the contempt.  If Parliament intends to interfere with the administration of justice it should express that intention clearly or unambiguously. 

          Even if s264 of the Act required questions to be answered, notwithstanding that so to do would otherwise constitute a contempt of court, it would not follow that the fact that questions so asked might tend to interfere with the administration of justice would be an irrelevant consideration in the Commissioner's deciding whether to interrogate or to put particular questions.  Even were contempt not to excuse the failure to answer questions put under s264 of the Act, failure to take into account the possibility that a compulsory interrogation might interfere with the course of justice could invalidate the giving of a notice under s264 or the exercise of power under it.  In such circumstances there is much to be said for the approach adopted by Wilcox J of requiring the conduct of the interrogation to be deferred pending the conclusion of the criminal proceedings.

          We are, however, of the same view as the learned trial judge, namely, that circumstances might arise where questions were put to Mr de Vonk which might constitute a real, or substantial risk of interference with the course of justice.  The abstract nature of this conclusion inevitably raises difficulty in the framing of appropriate relief.  If a declaration had to be formulated to give effect to the foregoing reasons, it could only be one to the general effect that the conduct of an interrogation prior to the hearing of the criminal charges and covering the same factual circumstances as those covered by the criminal charges could constitute a contempt of the court before which such charges are to be heard.  A declaration in such terms being hypothetical and "advisory" and relating to a procedural question, should not be made.  For the same reason, the second order and declaration made by Carr J should be set aside.  His Honour's reasons and our own foregoing reasons speak for themselves.

          In the circumstances we are of the view that the following orders should be made:

(1)  Appeal allowed in part.

(2)  Set aside the second order and declaration made by Carr J.

(3)  Liberty to apply on 48 hours notice to a judge of the Court should interrogation pursuant to the notice dated 1 November 1994 referred to in the first Order and declaration of Carr J be commenced and objection taken to specific questions.

(4)  Cross-appeal dismissed.

          As the parties have reached an agreement on the question of costs we would make no order as to costs.

          We have had the advantage of reading in draft the Reasons for Judgment of Foster J.  We agree with the substance of those Reasons.

I certify that this and the

preceding thirty-two (32) pages

are a true copy of the Reasons

for Judgment herein of their Honours

Hill and Lindgren JJ.

Associate:

Date:  4 December 1995

Counsel and Solicitors       W Martin QC with L Price

for Appellant:               instructed by the Australian Government Solicitor

Counsel and Solicitors       N Hasluck QC and S Martella

for Respondent:              instructed by Martella & Company

Date of Hearing:             19 October 1995

Date Judgment Delivered:          4 December 1995