FEDERAL COURT OF AUSTRALIA

Alfred v Walter Construction Group Ltd [2003] FCA 993

PRACTICE AND PROCEDURE – whether respondents excused from filing a defence by reason of privilege against self incrimination as to civil penalty

INDUSTRIAL RELATIONS – pleading defences in proceeding for breach of s 170NC where no penalty sought

WORDS AND PHRASES – ‘penalty’, ‘self incrimination’

Workplace Relations Act 1996 (Cth) ss 170NC, 170ND, 170NF

Australian Competition Consumer Commission v FFE Building Services Pty Ltd [2003] FCAFC 132 cited

Australian Securities & Investments Commission v Rich [2003] NSWSC 328;  45 ACSR 305; 21 ACLC 920 cited

Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681 distinguished

EL Bell Packaging Pty Ltd v Allied Seafoods Ltd (1990) 4 ACSR 85 discussed

Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 cited

R v Deputy Commissioner of Taxation;  Ex parte Briggs (1987) 13 FCR 389;  71 ALR 86 discussed

Rank Film Ltd v Video Information Centre (HL(E)) [1982] AC 380 cited

Re Intercontinental Development Corporation Pty Ltd (1975) 1 ACLR 253 applied

Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204 followed

Sorby v Commonwealth (1983) 152 CLR 281 cited

INSPECTOR GREGORY CHARLES ALFRED v WALTER CONSTRUCTION GROUP LIMITED (ACN 008 390 074), JOHN STORER, CONSTRUCTION, FORESTRY, MINING, AND ENERGY UNION OF AUSTRALIA, PETER ZABOYAK and DAVID KELLY

N 775 OF 2003

GYLES J

19 SEPTEMBER 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The notices of motion dated 29 August 2003 be dismissed.

2.         Costs of the motions be the applicant’s costs in the proceeding.

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

REASONS FOR JUDGMENT

1                     The relief sought in the amended application is as follows:

 ‘1.      A declaration that the first respondent contravened subsection 170NC(1) of the Workplace Relations Act 1996 (Act), as specified in the accompanying statement of claim.

2.         An Order pursuant to section 170NF of the Act imposing a penalty on the first respondent for and in respect of each such contravention of subsection 170NC(1) of the Act

3.         A declaration that the second respondent contravened subsection 170NC(1) of the Act, as specified in the accompanying statement of claim.

…

5.         A declaration that the third respondent contravened subsection 170NC(1) of the Act, as specified in the accompanying statement of claim.

6.         An Order pursuant to section 170NF of the Act imposing a penalty on the third respondent for and in respect of each such contravention of subsection 170NC(1) of the Act.

7.         A declaration that the fourth respondent contravened subsection 170NC(1) of the Act, as specified in the accompanying statement of claim.

…

9.         A declaration that the fifth respondent contravened subsection 170NC(1) of the Act, as specified in the accompanying statement of claim.

…

11.       An injunction pursuant to section 170NG of the Act requiring each of the respondents not to contravene subsection 170NC(1) of the Act.

12.       Such further or other Order or relief as the court thinks fit.

13.       An Order for costs.’

2                     The relief originally sought included:

 ‘4.      An Order pursuant to section 170NF of the Act imposing a penalty on the second respondent for and in respect of each such contravention of subsection 170NC(1) of the Act.

…

8.         An Order pursuant to section 170NF of the Act imposing a penalty on the fourth respondent for and in respect of each such contravention of subsection 170NC(1) of the Act.

…

10.       An Order pursuant to section 170NF of the Act imposing a penalty on the fifth respondent for and in respect of each such contravention of subsection 170NC(1) of the Act.’

3                     The applicant claims to be an inspector duly appointed pursuant to s 84(2)(a) of the Workplace Relations Act 1996 (Cth) (‘the Act’).  The first respondent, Walter Construction Group Limited (‘Walter Construction’), is alleged to be the principal contractor in a joint venture with another party for the construction of a sewage treatment plant near Wollongong in New South Wales.  The second respondent, John Storer, is alleged to have been employed by Walter Construction as a construction manager, to perform work in connection with the sewerage project.  The third respondent, Construction, Forestry, Mining and Energy Union of Australia (‘CFMEU’), is alleged to be a registered association of employees and a party to, and bound by, the Mobile Crane Hiring Award 2002, being an award made by the Australian Industrial Relations Commission pursuant to Pt VI of the Act.  The fourth and fifth respondents, Peter Zaboyak and David Kelly, are alleged to have been officers, employees or agents of the third respondent.  It is alleged that D & D Services & Crane Hire Pty Limited (‘D & D’) carried on business providing mobile crane and labour hire services, employed persons in connection with that business and was bound by the Federal Mobile Crane Award.   It is alleged that D & D was engaged in providing services to Walter Constructions and various subcontractors in connection with the sewerage project.

4                     The substance of the amended statement of claim is that Walter Construction, by the actions of its officers, including the second respondent and the CFMEU, by its officers or agents, including the fourth and fifth respondents, each applied pressure upon D & D contrary to s 170NC(1) of the Act on various occasions.

5                     This is the hearing of motions on behalf of the second, third, fourth and fifth respondents that they not be required to plead a defence at all (in the case of the second, fourth and fifth respondents) and as to part of the further amended statement of claim (in the case of the CFMEU).  I shall continue to refer to the parties to the motions according to their designation in the principal proceeding.  The basis for these motions is the principle that a party to litigation ought not to be compelled to provide information or produce documents if the result would be to provide evidence against that person which may be used to establish liability to a penalty.  This is founded upon the circumstance that s 170NC(1) of the Act is a penalty provision by reason of s 170ND, and although a contravention of a penalty provision is not an offence, the Court may make an order imposing a pecuniary penalty on a person who contravenes such a provision (s 170NF).

6                     It is submitted on behalf of the respondents that the fact that the proceedings as presently constituted do not include a claim for a penalty does not preclude an application to amend to include such a claim in the future.  It is also submitted that there is nothing to prevent the applicant or some other inspector, or, for example, D & D, from commencing a future proceeding against the individual respondents for a penalty under the Act, based upon the same facts, including any admissions obtained in the current proceeding (s 170NF(7)).

7                     There is no possibility that the present proceedings will be amended to permit a claim to be made for a penalty against any of the individuals concerned.  A conscious and deliberate decision on the part of the applicant to omit the claims for penalty once the implications for the conduct of the case of those claims was raised on behalf of the respondents is recorded on the transcript, and is reflected in the subsequent amendments to the application and statement of claim.  The absence of any claim for a penalty has been relied upon by the applicant in argument on these motions.  The Court would not permit this applicant to approbate and reprobate by seeking to amend hereafter.  There is no possibility that the present applicant could bring a further separate proceeding for a penalty based upon the same facts, as any such proceeding would be met with an unanswerable Anshun estoppel.  It would be an abuse of process for another inspector, or person responsible for enforcement of the Act in the same interest as the applicant, to bring another proceeding for a penalty based upon the same facts as this proceeding and any such proceeding would be dismissed or permanently stayed.  However, there does remain the possibility that D & D (and perhaps others) could bring penalty proceedings based upon the same facts as are alleged in this proceeding.  A faint suggestion was made that an estoppel may operate to prevent that occurring, but I can see no basis for that certain enough to rule out such a proceeding.  The practical question, therefore, is in what way could a defence in this proceeding be utilised to the disadvantage of the individual respondents in those other conceivable proceedings? 

8                     Any admissions or statements in a pleading in this proceeding could not be utilised as admissions, or otherwise tendered, in those other proceedings.  They have effect only in this proceeding.  It is submitted on behalf of the applicant that, in any event, an unverified defence cannot amount to an admission (Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 86).  In this connection, counsel for the applicant properly drew my attention to a decision of the Full Court of the Supreme Court of Western Australia in Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681, particularly at 697, where it was said that in the case of a proceeding for a penalty, if a defendant admits the allegations in a statement of claim that would be a waiver of the privilege against self-exposure to a penalty.  That passage should be read in the sense that there would be a waiver for the purposes of the instant proceedings.  Even if that is correct, this is not such a case. 

9                     Counsel for the respondents submit that this case is squarely within the principles outlined by Deane J in Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat & Live-stock Corporation (1979) 42 FLR 204, particularly at 208, 211-212.  That case was rather like the present in that the whole basis of the action for injunctive relief and damages was alleged contravention and involvement in contravention of the provisions of Pt IV of the Trade Practices Act 1974 (Cth) which, if established, would tend to render the respondents liable to penalty at the suit of the Minister or the then Trade Practices Commission.  The question was whether discovery and interrogatories should be ordered.  Deane J took the view that in a mere action for a penalty the Court should, in the absence of statutory provision to the contrary, refuse to make any order at all against the defendant for discovery or production of documents or provision of information, for the reason that, the whole and avowed object of the proceedings being the imposition and recovery of a penalty, an order for production of documents or provision of information against the defendant can, so far as the prosecutor of the action is concerned, properly have no other intended consequence.  However, Deane J held that where the proceedings are not for the recovery of a penalty, there is no general rule precluding the making of an order for discovery or interrogatories, and there will ordinarily be no proper ground for objecting to such an order.  The party against whom such an order is made is left to object to producing particular documents or providing particular information on the ground that such production or provision may tend to expose him to a penalty.  It was argued in that case that, because of the potential liability for penalty at the suit of the Minister or the Trade Practices Commission, the ordinary approach should not be followed and the respondents should be granted the general immunity from discovery of documents or answering interrogatories to which they would be entitled in proceedings for a penalty.  His Honour rejected that argument.  The only exception would be in the unusual situation that the making of the order, as contrasted with the actual discovery, would expose the party to liability to a penalty.  His Honour added that the potential liability to a penalty at the suit of another would come into play in providing a lighter onus in persuading the Court that particular documents or interrogatories might tend to exposure to a penalty than would otherwise be the case. 

10                  Those statements, of course, must be understood in the context of a application for discovery and interrogatories rather than the filing of a defence.  Indeed, counsel were not able to refer me to any case which expressly dealt with the question of pleadings, apart from Bridal Fashions.  This points up the novelty of this application.  Apart from the ordinary criminal law, which provides a myriad of examples of potential criminal liability for facts which may be proved in civil actions, the Trade Practices Act 1974 (Cth), the Corporations Act 2001 (Cth)¸ the Workplace Relations Act 1996 (Cth), the Customs Act 1901 (Cth), and income tax legislation have provisions which may result in co-ordinate civil and criminal liability or co-ordinate penal and non-penal relief, often with generous standing provisions.  It is striking that the issue has not arisen before.

11                  Counsel for the respondents have stressed the obligations upon respondents in relation to the drafting of defences which arise from the Rules of this Court, which envisage, it is submitted, more than bare denials, thus opening the way for pleading of positive defences, explanations and the like which will provide information which may then be a springboard for use by others.  The submission is also made that if a respondent admits an allegation, then although that may not bind the respondent in other proceedings, it may encourage another party to bring other proceedings on the basis that the same admission is likely to be made.  It was submitted that express or implied undertakings as to limited use have not been regarded as enough to warrant interference with the privilege, which is a basic common law privilege which cannot be cut down by judicial discretion. 

12                  Counsel for the applicant submitted that there must be a limit to the extent to which the conduct of an appropriate civil proceeding should be affected by the shadow of other proceedings which might be theoretically open.  He pointed out that third parties can always sit in court and observe and later make use of what occurs.  He submitted that there was no real and appreciable risk that any of the respondents would be subject to a proceeding for the imposition of a penalty by reason of filing a defence in this proceeding or that a defence could be used against a respondent in another proceeding in any relevant incriminatory fashion.

13                  The cases which deal with proceedings for penalties can be put to one side.  Those cases have recently been reviewed by the Full Court in Australian Competition & Consumer Commission v FFE Building Services Pty Ltd [2003] FCAFC 132.  The authorities in relation to proceedings which are not for a penalty have recently been reviewed by Austin J of the New South Wales Supreme Court in Australian Securities & Investments Commission v Rich [2003] NSWSC 328;  45 ACSR 305.  This relieves me of the necessity of any comprehensive review of the authorities.  I should mention a couple of additional authorities. 

14                  The first is R v Deputy Commissioner of Taxation;  Ex parte Briggs (1987) 13 FCR 389;  71 ALR 86.  That was an unusual case.  The proceeding was for prerogative writs and a declaration arising out of what was alleged to be the unlawful divulging of information respecting the affairs of a number of companies of which the prosecutor was a director and shareholder, inter alia, to prosecuting authorities, in breach of (inter alia) s 16(2) of the Income Tax Assessment Act 1936 (Cth) and s 70 of the Crimes Act 1914 (Cth), leading to the prosecutor facing criminal procedures of various kinds.  The prosecutor sought general or, alternatively, particular discovery against the respondents, namely, the Comptroller General of Customs, the Director of Public Prosecutions and the Chairman, National Crime Authority.  It was held that to order discovery would be to compel the respondents to identify documents which may lead indirectly to their incrimination in relation to the very breaches of law which were alleged.  The second is EL Bell Packaging Pty Ltd v Allied Seafoods Ltd (1990) 4 ACSR 85.  The action was brought pursuant to the then s 556 of the Companies (Vic) Code against two directors of the company for debts incurred by the company.  A notice for discovery was served on the defendants, to which they objected.  The notice for discovery was dismissed by an order made in the County Court, as it was held that the proceedings were directed to the recovery of a penalty.  On appeal in the Victorian Court of Appeal, it was held that the action to recover the debt was not an action for a penalty but that, because of the state of the authorities in relation to s 556, the mere making of an affidavit of documents would go to assist in the proof of the criminal offence constituted by a breach of s 556, so that the only means of protecting the right against self incrimination was to excuse the party completely from discovery (see Murphy J at 92-93).  Neither decision is closely in point in relation to the present issue.

15                  The question to be decided here is similar to that which arises whenever a claim is made that answering a question or giving information may incriminate a party.  An illuminating passage dealing with this question appears in the judgment of Bowen CJ in Eq in Re Intercontinental Development Corporation Pty Ltd (1975) 1 ACLR 253 at 259:

 ‘The bare oath of the witness that he is endangered is not to be regarded as necessarily conclusive of the matter.  It is for the court to consider from the circumstances of the case, and the nature of the evidence the witness is called upon to give, whether there is reasonable ground to apprehend danger of prosecution or forfeiture if the witness is compelled to answer.  The danger must be real and appreciable, and not of an imaginary or insubstantial character.  If there is a risk, the court does not generally go into the question of whether it is probable or not that proceedings will, in fact, be taken.

Two other comments may be made, namely, that a question which at first sight may appear innocent may, by affording a link in the chain of events, become a means of bringing home an offence to a witness, (See Osborn v London Dock Co (1855), 10 Ex 698);  156 ER 620.  Once the court is of the view that the witness is in danger, some latitude will be allowed to the witness in judging for himself the effect of any particular question …’

That is consistent with the approach in Sorby v Commonwealth (1983) 152 CLR 281 per Gibbs CJ at 290-292 and Mason, Wilson and Dawson JJ at 310, and Rank Film Ltd v Video Information Centre (HL(E)) [1982] AC 380. 

16                  Approached in this way, I cannot discern any real and appreciable danger that what may be said in a defence in this proceeding could incriminate these respondents so as to entirely relieve any of them of the obligation of filing any defence.  It could not be used directly.  The possibility of indirect use which has been suggested is speculative and entirely hypothetical.  The separate point about encouragement of another to bring a proceeding is both insubstantial and collateral.  It does not lead to incrimination.

17                  The separate argument that the CFMEU should be excused in part from filing a defence because its defence may incriminate other respondents is unsound in principle and I reject it.

18                  Counsel for the applicant submitted that any residual risk could be dealt with by allowing a defence to be filed with all just exceptions.  This is too vague.  If any respondent wishes to put forward a particular and discernable basis for the existence of a real and appreciable risk of incrimination by any actual proposed defence, application can be made at that stage.  This accords with the general approach referred to by Deane J in Refrigerated Express.

19                  The motions are refused.  Costs should be the applicant’s costs in the proceeding.

Associate:

Dated:              19 September 2003