Federal Court of Australia

Australian Building and Construction Commissioner v O’Halloran [2020] FCA 1291

ORDERS

THE COURT ORDERS THAT:

1.    If at the conclusion of the applicant’s case the individual respondents (or any of them) elect to waive the privilege against self-exposure to a penalty and advance a positive defence, those respondents are at liberty to file and serve any amended defences, affidavits and any outline of submissions immediately following the close of the applicant’s case or otherwise in accordance with orders of the Court.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

COLLIER J:

1    On the second day of the trial in this case I made an order in the following form:

1.    If at the conclusion of the applicant’s case the individual respondents (or any of them) elect to waive the privilege against self-exposure to a penalty and advance a positive defence, those respondents are at liberty to file and serve any amended defences, affidavits and any outline of submissions immediately following the close of the applicant’s case or otherwise in accordance with orders of the Court.

2    I informed the parties that I would publish reasons for this order. These are those reasons.

Background

3    In his originating application filed on 28 March 2019 the applicant Australian Building and Construction Commissioner (ABCC) sought declarations and penalties against the respondents referable to alleged unlawful industrial action, contravening (inter alia) ss 46 and 52 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) and ss 417, 355, 348 and 500 of the Fair Work Act 2009 (Cth) (FW Act).

4    In their defence filed on 29 May 2019 to these proceedings, the 1st, 2nd, and 4th to 28th respondents, who are natural persons (Individual Respondents), claimed and reserved their right to claim the privilege against self-exposure to civil penalties, and deny each allegation of the ABCC. I note in passing that the third respondent (the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia) has made various admissions in that defence.

5    The Union filed an outline of submissions dated 28 February 2020. However in his outline of submissions filed on 28 February 2020 the second respondent, Mr Andrew Blakeley, stated that he claimed the privilege against self-exposure to penalty and therefore did not propose to file any submissions prior to the applicant closing his case. For the same reason, no form of submissions have been filed by the other Individual Respondents.

6    All parties were represented at the first day of the trial. Mr Murdoch QC and Mr Smith represented the ABCC. Mr Massy acted for the Union and all Individual Respondents except Mr Blakeley. Mr Reitano acted for Mr Blakeley.

7    At the commencement of the hearing it became apparent that the ABCC anticipated objecting to any questions in cross-examination posed by either Counsel for the Individual Respondents which introduced material going beyond a response to the case pleaded by the ABCC. Mr Murdoch QC and Mr Smith for the ABCC submitted that any such questions were irrelevant to matters currently in issue in the proceeding, and should not be permitted by the Court.

8    Further, it was clear that the ABCC anticipated opposing the raising of any positive defence which, in his submission, ought to have been pleaded by the Individual Respondents prior to the ABCC opening his case.

9    No interlocutory application came before the Court. Rather, after questions of Counsel it became clear that the parties sought competing case management orders referable to the filing by the Individual Respondents of an amended defence following the close of the ABCC’s case.

10    Written submissions in support of the position adopted by the ABCC were then emailed to the Court and the respondents. Mr Smith for the ABCC addressed the Court in relation to this issue, relying on these written submissions, and made oral submissions. Mr Massy and Mr Reitano made oral submissions.

11    During his oral submissions Mr Smith also referred to an affidavit of Patrick Turner dated 1 September 2020, filed shortly before the commencement of the hearing, which described and annexed correspondence between the parties concerning the conduct of the matter. Mr Turner is employed by Maurice Blackburn lawyers, the legal representatives of the 1st and 4th-28th respondents and the Union. Annexed to that affidavit was a letter dated 27 August 2020 from Maurice Blackburn to the lawyers for the ABCC. Paragraph 14 of the letter stated:

14.    To avoid an arid dispute about whether the views of Mason P in MacDonald are apposite to matters of this kind, the first and fourth to twenty-eight to [sic] respondents place the applicant on notice that if they waive the privilege against self-exposure to a penalty, they intend to rely on the facts alleged in [2], [3], [4], [11], [22] and [31] of the statement of claim, s 19 (2) of the Fair Work Act 2009 (Cth) and s 7 (2)(a) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth). The first and fourth to twenty-eighth respondents reserve the right to advance in their case additional material in support of their defence, the details whereof will be disclosed by amending the defence after the close of the applicant’s case.

12    In summary, the ABCC submitted that:

    The Individual Respondents had not pleaded to the allegations in the ABCC’s statement of claim, based on their claims of privilege against self-exposure to penalty. The ABCC conceded that the Individual Respondents were entitled to take that approach.

    The proceedings were civil proceedings.

    The penalty privilege is a rule of practice, not a substantive rule of law.

    The parties were bound by the Federal Court Rules 2011 in conducting the proceedings unless there was a basis in law for the abrogation of those rules. Where the privilege against self-exposure to penalty is claimed, the rules will only be modified to the extent required to allow a person to legitimately engage the privilege. They will not be modified beyond that. The Individual Respondents did not need to plead to the ABCC’s case – they were entitled to put the ABCC to proof without filing a pleading.

    The privilege against self-exposure to a penalty did not apply to facts which did not expose a person to a penalty, such as available positive defences.

    The privilege is against self-exposure to penalty – not a privilege in respect of things that would not expose a person to a penalty. It could not be a blanket claim on the part of the Individual Respondents that because they were potentially subject to a penalty, they need not plead.

    The privilege rule applied unless there were statutory provisions to the contrary. The Federal Court Rules and the provisions of Part VB of the Federal Court of Australia Act 1976 (Cth) were such provisions to the contrary.

    The observations of the High Court of Australia in Commonwealth v Director of the Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the Agreed Penalties case) at [53] that civil penalty proceedings are civil proceedings, and the respondent is “denied most of the procedural protections of an accused in criminal proceedings”, indicate that earlier statements of legal principle such as those in Australian Securities and Investments Commission v Mining Projects Group Ltd (2007) 164 FCR 32 (ASIC v Mining Projects) need to be treated with caution.

    Adams v Director, Fair Work Building Industry Inspectorate (2017) 258 FCR 257 at [104] is authority from the Full Court that the penalty privilege applies only to those matters which inculpate a respondent, and not to those matters which exculpate a respondent.

    The distinction between pleading to the ABCC’s case, and pleading a positive defence, was highlighted in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2005) ALR 247 at [17] where Gyles J observed that a respondent to a penalty proceeding could not be forced to make an admission, however the respondent was not relieved of a duty to plead, the issue would arise in a case where a personal respondent proposed to rely on a positive defence, and the respondent must advise the applicant and the Court of any positive defence so the trial could be properly prepared and conducted.

    The appropriate means of notifying the applicant of a positive defence were explained by the Full Court in Adams where at [105] the Court referred to the appellants seeking to “advance a ‘positive’ defence which, according to the decision in Macdonald, should have been pleaded.” Although obiter, the observations of the Full Court are highly persuasive.

    The analysis of the Full Court in Adams relies on the ratio of the decision of the Court of Appeal of New South Wales in MacDonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612 where at [74] Mason P suggested a pleading mechanism which would require the claimant to invoke from the outset any relevant defence or statutory ground of dispensation, and identify any parts of the regulator’s own allegations intended to be relied upon in that regard.

    To the extent that the Individual Respondents wished to run a case in respect of the statutory exceptions (for example in s 7(2) of the BCIIP Act or s 19(2) of the FW Act), or a positive defence, those matters ought be pleaded before the ABCC opened his case, as they are exculpatory matters. As this did not occur, questions about matters outside of the ABCC’s pleaded case were objectionable on the basis of relevance.

13    The ABCC sought orders in the following terms:

1.    To the extent that the Respondents intend to rely upon a statutory defence or ground of dispensation, such statutory defence or ground of dispensation is to be pleaded in full in an Amended Defence filed prior to the beginning of the Applicant’s case.

2.    The Respondents otherwise have leave to seek to file an Amended Defence at the close of the Applicant’s case.

14    Mr Massy and Mr Reitano made separate submissions on behalf of the Individual Respondents. However in summary they submitted as follows:

    The position advanced by the ABCC involved a fundamental misapprehension of what the Full Court was dealing with in Adams, and what the Court of Appeal of New South Wales said in MacDonald.

    No distinction has historically been drawn between the notions of exculpatory or inculpatory information in such cases.

    Provisions in the Federal Court Rules and the Federal Court Act are not inconsistent with claims of privilege against self-exposure to penalties.

    The dichotomy drawn by the ABCC between inculpatory pleas and exculpatory pleas is a false frame of reference.

    The leading Federal Court authority on point is the decision of Finkelstein J in ASIC v Mining Projects, in particular at [13] of the decision.

    Nothing said by the High Court in the Agreed Penalties case bears on the question of privilege which can be asserted by the Individual Respondents and what flows from the exercise of the privilege.

    The issue decided by the Full Court in Adams was not the same as that decided by Finkelstein J in ASIC v Mining Projects. In particular at the conclusion of the case in Adams the then-respondent ran a positive case without delivery of an amended defence setting out that positive case.

    When evidence is given by the witnesses for the ABCC, the respondents are entitled to ask questions which are relevant to the case even though an amended defence has not yet been pleaded. There cannot be a legitimate objection to questions on the basis that an amended defence is not yet pleaded.

    The Full Court in Adams expressly embraced the notion that the respondent there would be entitled to amend its defence after closure of the applicant’s case.

    The decision of Finkelstein J in ASIC v Mining Projects has been followed in numerous Federal Court decisions, none of which have qualified the right of a respondent to subsequently plead an amended defence in terms claimed by the ABCC.

    If a respondent who wishes to run a positive case is required to plead its case, that can be accommodated whilst maintaining the privilege. What should occur is that the respondent should be entitled to rely on the privilege until the applicant’s case is concluded. If, at that point, the respondent decides to run a positive case, it can deliver an amended defence

    To the extent that there is any conflict between MacDonald and ASIC v Mining Projects, the Court should prefer the reasoning in ASIC v Mining Projects.

Consideration

15    Notwithstanding the persuasive submissions of Mr Smith for the ABCC, in my view the law as presented by Mr Massy and Mr Reitano for the Individual Respondents is correct. I have formed this view for the following reasons.

16    It is uncontroversial that civil penalty proceedings brought in respect of contraventions of provisions of such statutes as the FW Act and the BCIIP Act are civil proceedings, notwithstanding that the proceedings have a quasi-criminal quality: see comments of Isaacs J in R v Associated Northern Collieries [1910] HCA 61; (1910) 11 CLR 738 at 742, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition & Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466 at 477-479 [19]-[29], the Agreed Penalties Case at [53]. This is reinforced in respect of these Acts by s 551 of the FW Act and s 86 of the BCCIP Act, which require the court to apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention, or proposed contravention, of a civil remedy provision.

17    Part 16 of the Federal Court Rules concerns pleadings in this Court. In particular, Division 16.3 makes provision for the progress of pleadings, including the timing of the filing of a defence. These Rules reflect orthodox principles referable to pleadings, including that pleadings define a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it and define the issues for decision: Dare v Pulham (1982) 148 CLR 658 at 664, Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279.

18    At the same time, the ABCC does not dispute that the Individual Respondents are entitled to claim privilege against self-exposure to penalties. Indeed, that this is the law is clear: see for example Mason ACJ, and Wilson and Dawson JJ in Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 337; and Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Rich v Australian Securities and Investments Commission [2004] HCA 42; 220 CLR 129 at [39]. This privilege extends to the provision of any information which might tend to expose the party to the imposition of a civil penalty. As Deane J explained in Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Livestock Corporation (1979) 42 FLR 204 at 207-208:

It is a well-established principle that a defendant in proceedings which are solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents which may assist in establishing his liability to the penalty (see, generally, per Isaacs J. in R. v. Associated Northern Collieries; Naismith v. McGovern and Martin v. Treacher). Even where, as in the present case, the proceedings are not for recovery of a penalty but to prevent and redress civil injury, a party to litigation ought not to be compelled to provide information or produce documents for inspection by the other party if the result thereof will be to provide evidence against him which may be used to establish his liability to a penalty in other proceedings (Mayor of the County Borough of Derby v. Derbyshire County Council).

In the former case, that is to say in a mere action for a penalty, a court should, in the absence of statutory provision to the contrary, refuse to make any order at all against the defendant for discovery or production of documents or provision of information for the reason that the whole and avowed object of the proceedings being the imposition and the recovery of a penalty, an order for the production of documents or provision of information against the defendant can, so far as the prosecutor of the action is concerned, properly have no other intended consequence (see R. v. Associated Northern Collieries). This is a broad and unqualified rule whose origins are apparently to be found in a reluctance on the part of the Court of Chancery to lend the aid of its discovery proceedings to the common informer (see Mexborough (Earl of) v. Whitwood Urban District Council and Heimann v. Commonwealth).

(footnotes omitted)

19    The privilege extends, for example, to information sought by discovery applications and interrogatories (see discussion in Pyneboard at 337), witness statements (Australian Competition and Consumer Commission v J Mcphee & Son (Australia) Pty Ltd (No 2) [1997] FCA 1013, 77 FCR 217, Australian Competition & Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132, (2003) 130 FCR 37), and production of documents by subpoena (Brennan J in Environment Protection Authority v Caltex Refining Co Pty Ltd [1993] HCA 74; (1993) 178 CLR 477 at [24]).

20    In Pyneboard the majority observed that the privilege against self-incrimination stood apart from other forms of privilege, being

…too fundamental a bulwark of liberty to be categorized simply as a rule of evidence applicable to judicial and quasi-judicial proceedings. (at 340)

21    Their Honours also observed:

In the consideration of that question it is necessary to bear in mind the general principle that a statute will not be construed to take away a common law right unless the legislative intend to do so clearly emerges, whether by express words or by necessary implication….

In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. 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.

(at 341)

22    However doubt was cast on the status of the privilege in The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, [2002] HCA 49 at 559 [31] where the majority observed that no decision of the High Court stated that the privilege against exposure to penalties was a substantive rule of law. Similarly in Rich the majority noted:

…As was further pointed out in the joint reasons in Daniels Corporation, the privilege against exposure to penalty now serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it. That is not to say that the privileges against exposure to penalties or exposure to forfeitures are substantive rules of law, like legal professional privilege, having application beyond judicial proceedings.

(at 142 [24])

(footnotes omitted)

23    I also note that in Rich, Kirby J opined that the penalty privilege was of a lower order of priority in law than the privilege against self-incrimination and legal professional privilege (at 179 [129]).

24    That the Individual Respondents are entitled to plead an amended defence after the close of the ABCC’s case does not appear to be disputed by the ABCC. The key issue in dispute is whether the Individual Respondents are entitled to plead an amended defence, relying on positive defences not previously pleaded, after the close of the ABCC’s case. This in turn affects the content of questions which can properly be put during cross-examination by the respondents to witnesses called by the ABCC.

ASIC v Mining Projects

25    The leading authority for the position advanced by the Individual Respondents is clearly ASIC v Mining Projects. In that case the plaintiff Australian Securities and Investments Commission (ASIC) sought various forms of relief in respect of alleged contraventions of the Corporations Act 2001 (Cth) against a corporation and two of its directors. Procedural disputes arose in respect of the pleadings and discovery.

26    In relation to the pleading dispute in that case, ASIC delivered a detailed statement of claim and the defendants each filed defences. ASIC contended that the defences were deficient in several respects and sought orders for the provision of further and better particulars.

27    In their defences the directors opened with a statement that they claimed and reserved their right to claim penalty privilege in the proceeding. They admitted certain facts, denied some facts, admitted other facts but asserted other facts which could answer them; and set up a positive case in answer to the various claims set up. Justice Finkelstein observed that although the directors had provided considerable detail, including particulars of many of the allegations, no part of the defence amounted to an allegation of the truth of the facts therein. Rather, the statements in the defence were only to be treated as statements outlining the case which each director wished to raise for resolution by the Court.

28    The directors submitted that if their pleadings were deficient they could not be compelled to provide further information because of penalty privilege or the privilege against self-incrimination.

29    His Honour found that, in view of the claims made by ASIC, each privilege was engaged. After observing that penalty privilege was claimed in the context of a civil action, his Honour observed at [11] that the circumstances in which penalty privilege may be claimed were not settled. At [12] his Honour continued:

That the rule has a wider application than merely preventing a plaintiff from obtaining discovery or interrogatories reflects the broad object of penalty privilege. In Daniels Corporation [2002] HCA 49; 213 CLR 543, 559 Gleeson CJ, Gaudron, Gummow and Hayne JJ said that penalty privilege "serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it." That is, the plaintiff must prove his case without any assistance from the defendant: Abbco Iceworks [1994] FCA 1279; 52 FCR 96, 129; Rich [2004] HCA 42; 220 CLR 129, 142. So it has been held that although in a civil action a defendant is required to deliver a defence he cannot be compelled to make any admissions in relation to the matters alleged against him. That is, penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege: Hadgkiss v Construction, Forestry, Mining and Energy Union [2005] FCA 1453; (2005) 146 IR 106, 111-112; A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; (2005) 226 ALR 247, 251.

(emphasis added)

30    In addition to commenting in respect of the operation of the penalty privilege, his Honour continued in respect of positive defences as follows:

13. There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff’s case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say.

(emphasis added)

31    At [16] after examining Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499 his Honour continued:

…both penalty privilege and self-incrimination privilege protect not only against the risk of exposure to penalty or incrimination by direct evidence but also by indirect or derivative evidence. Disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry. A defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence: Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 6-7. If a defendant is required to plead a positive case there is a risk of that happening: Chief Executive Officer of Customs v Camile Pty Ltd [2004] NSWSC 1256; (2004) 58 ATR 163, 169.

(emphasis added)

32    His Honour then said:

17. In any event even if, contrary to my view, Bridal Fashions stands for the proposition that a positive defence can never incriminate a defendant or expose him to a penalty, it says nothing about when the defence must be delivered. On my alternative approach a defendant can rely on the privilege up to the point he decides to go into evidence. It is only at that moment, if the defendant elects to run a positive case, that he must give up the privilege and file a defence that outlines the case he intends to run.

(emphasis added)

Subsequent Federal Court authorities following ASIC v Mining Projects

33    As Mr Reitano correctly submitted, the principles articulated by his Honour have been adopted in applied in numerous decisions of the Federal Court of Australia.

34    Justice Katzmann in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 2) [2020] FCA 348 said at [16]:

16. The Federal Court Rules 2011 (Cth) (FCR) require that a party pleading to an allegation of fact in another party’s pleading must specifically admit or deny every allegation of fact in the pleading and provide that allegations that are not specifically denied are taken to be admitted (r 16.07). They also relevantly require that, in a defence, a party expressly plead a matter of fact or law that raises an issue not arising out of the earlier pleading or, if not expressly pleaded, might take another party by surprise if pleaded later (r 16.08). The effect of raising the penalty privilege in their defence was that Mr Elvin and Mr Puerto were relieved of the need to comply with the pleading rules if those rules would override the privilege: A & L Silvestri Pty Ltd (ACN 052 514 799) v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; 226 ALR 247 (Gyles J). Once the moving party’s case concludes and the other party chooses to run a positive case, however, an amended defence should be filed outlining that case: Australian Securities and Investments Commission v Mining Projects Group Limited [2007] FCA 1620; (2007) 164 FCR 32 at [17] (Finkelstein J). Of course, it is open to a respondent at any time to waive the privilege.

35    Justice Lee in Singh v Fair Work Ombudsman [2019] FCA 664 said at [7]:

7. More relevantly, assuming as I must that the privilege claim is maintained by Mr and Mrs Singh, there is still an issue of prematurity. In this likely scenario, Mr and Mrs Singh will choose (or, to use his Honour’s word, “elect”) not to file affidavit evidence, a substantive amended defence nor submissions. At the close of the FWO’s case in chief at the hearing, an application can then be made by Mr and Mrs Singh to the primary judge for leave for such documents which are then proposed to be relied upon to be filed. Given the existence of the privilege (and notwithstanding his Honour’s orders), it could not be suggested that Mr and Mrs Singh were required to have filed and served these materials in a civil penalty case any earlier: see Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32 at 37-38 [13].

36    Justice Moshinsky in Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 3) [2018] FCA 1107 observed:

93. The privilege against self-incrimination and the privilege against exposure to penalties are distinct (see Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32 (Mining Projects) at [7]), although they are often said to be based upon the same rationale and to have developed into their modern form by analogy and upon the same principles: see Caltex at 504-505, 518-521; Abbco at 117-118, 121, 129; Mining Projects at [7]. The privilege against self-incrimination is a substantive common law right: Reid v Howard at 11; X7 v Australian Crime Commission [2013] HCA 29; (2013) 248 CLR 92 at [104]. The privilege against exposure to penalties serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at [31]; Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129 at [24].

94. The privileges are personal in nature. In its modern form, the privilege against self-incrimination is “in the nature of a human right, designed to protect individuals from oppressive methods of obtaining evidence of their guilt for use against them” (Caltex at 508; see also at 498-499, 545-546) and to maintain a fair state-individual balance (Caltex at 499). The penalty privilege is based on substantially the same rationale: Abbco at 129.

95. In light of their nature and purpose, both privileges are available only to natural persons and not to artificial legal entities such as corporations: Caltex (in relation to the privilege against self-incrimination); Abbco (in relation to the privilege against exposure to penalties); see also Evidence Act 1995 (Cth), s 187.

96. Subject to a possible exception in relation to spouses, one person cannot claim the privilege against self-incrimination on the ground that the answering of a question or the giving of discovery would tend to incriminate another: Rochfort at 145, 150; Caltex at 549; Cross on Evidence at [25075]. Only the person who is exposed to the risk of prosecution or the imposition of a penalty can invoke the privileges.

97. As a general rule, in the absence of exceptional circumstances, a party to non-penalty civil proceedings is not to be excused in limine from giving discovery, but should instead be left to object to producing particular documents on the grounds that such production might tend to expose him or her to criminal liability or a civil penalty: Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat and Live-stock Corporation (1979) 42 FLR 204 at 208, 210-211; QC Resource Investments Pty Ltd (In Liq) v Mulligan [2016] FCA 813 at [19].

98. The gist of the privileges is that the giving of answers or the production of documents would tend to expose the claimant to the apprehended consequence: Cross on Evidence at [25100].

99. In the context of the privilege against self-incrimination, a valid claim for the privilege can be made out if the claimant can establish that the act of providing information or documents would give rise to a “real and appreciable” risk of prosecution: Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 574; Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 392; Sorby v Commonwealth [1983] HCA 10; (1983) 152 CLR 281 (Sorby) at 290; Microsoft at [40]. By parity of reasoning, a valid claim for the privilege against exposure to penalties can be made out if the claimant can establish that providing the information or documents would give rise to a “real and appreciable” risk of institution of proceedings for a civil penalty. I note that in Mining Projects, Finkelstein J stated at [10] that in civil actions where no claim for a penalty is made, the defendant must show that providing the information requested “would tend to subject him to a penalty” in separate proceedings, before he or she can rely on the privilege. I do not consider this formulation to be substantively different.

100. There can be no real and appreciable risk of prosecution or exposure to a penalty where the limitation period for the commencement of such a proceeding has expired: see Sorby at 290.

101. The privilege against self-incrimination has been held to not be available where it is clear that the taking of the step in question will not add to the individual’s jeopardy: Microsoft at [41] and cases there cited.

102. In some cases, the pleading itself has provided a basis upon which to infer that the act of providing information or documents would give rise to a real and appreciable risk of criminal prosecution: see, eg, CC Containers Pty Ltd v Lee (No 2) [2012] VSC 149 at [18]; see also Re New World Alliance Pty Ltd (Receiver and Manager Appointed); Sycotex Pty Ltd v Baseler (1993) 47 FCR 90 at 98; Mining Projects at [9].

37    Justice Rangiah in Fair Work Ombudsman v Hu [2017] FCA 1081 said :

12. Modern pleading rules require parties to expose their case for trial and, so, are contrary to a claim for penalty privilege: Anderson v ASIC at [27], [32]-[36]; ASIC v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32 at [12]. Procedural rules yield to rights conferred by the law of privilege unless there is clear statutory authority to the contrary: McDonald v ASIC [2007] NSWCA 304; (2007) 73 NSWLR 612 at [39]; Anderson v ASIC at [20].

13. Accordingly, penalty privilege operates to relieve a respondent from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege: ASIC v Mining Projects Group Ltd at [12].

38    Justice Kenny in Frugtniet v Migration Agents Registration Authority [2017] FCA 537 noted:

163. In ASIC v Mining Projects Group [2007] FCA 1620; 164 FCR 32, which involved a civil proceeding to recover a pecuniary penalty, Finkelstein J held (at [12]) that the “penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege”. His Honour noted (at [13]) that if this were to create a practical problem, it too might be resolved:

There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff’s case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say.

39    None of these cases take issue with the reasoning of Finkelstein J in the manner submitted in the case before me by the ABCC – rather, so far as material to the case before me, they adopted his Honour’s reasoning.

Adams and MacDonald

40    The ABCC relied heavily on the decision of the Full Court in Adams in support of his submissions in the present case.

41    At first instance in the case the Director of the Fair Work Building Industry Inspectorate sought declarations that each of the employees (except two) had contravened s 417(1) and s 421(1) of the FW Act by engaging in industrial action. The primary Judge noted that in the conduct of the proceeding to hearing, each of those employees against whom the Director sought relief claimed a penalty privilege, and, subject to very limited admissions, denied allegations made by the Director. At the hearing, the Director adduced evidence from various witnesses, and contended that this evidence proved that each of the employees engaged in unauthorised industrial action for the purposes of the FW Act, and that there was no relevant defence to the proceeding so that the contraventions had been established.

42    His Honour noted that none of the employees chose to go into evidence following the closure of the Director’s case, but rather submitted that the contraventions alleged against them had not been proven. His Honour continued:

12. In particular, the respondents contend that:

•    for the purposes of the s 421(1) contravention proceeding, the final FWC order is defective for enforcement purposes, especially because there is no evidence that each of subparas (a), (b) and (c) of [5.1] of the order, requiring its service, have been satisfied; and further, that the proceeding cannot succeed because it has not been proved that the respondents had knowledge either of the order (or its substance) or the consequences of noncompliance with the order, each of which they contend needs to be proved before contravention can be found against them;

•    the action alleged against them does not constitute “industrial action”, as the action alleged does not have the requisite “industrial character”;

•    further, on the evidence, for the purposes of the FW Act and the final FWC order, Crown, the employer of the respondents, authorised or agreed to the relevant actions; and

•    in any event, the evidentiary case advanced by the Director was insufficient to prove, and the documentary materials referred to above do not adequately prove, the case against them.

43    His Honour said:

15. In these circumstances, the questions that require resolution in this proceeding may be stated as follows:

(1) As to the s 417(1) contravention proceeding:

(a) Has the Director proved that each of the respondents, on 28 February 2013, engaged in “industrial action”, as defined by the FW Act?

(b) If so, did their employer, Crown, authorise or agree to their actions?

(2) In relation to the s 421(1) contravention proceeding:

(a) Has the Director proved that each of the respondents, on 28 February 2013, engaged in “industrial action” for the purposes of the final FWC order?

(b) If so, did their employer, Crown, authorise or agree to their actions?

(c) If not, has the Director proved, as alleged, that the final FWC order was served in accordance with [5] of the order?

(d) If not, is the failure to prove service in accordance with [5] of the order fatal to the maintenance of the s 421(1) contravention proceeding?

(e) If not, is the Director required to prove that each of the respondents had knowledge of the final FWC order, or its substance, and the consequences of noncompliance with it, in order to succeed on the s 421(1) contravention proceeding?

(f) If so, has the Director proved such knowledge on the part of each of the respondents?

44    His Honour then proceeded to consider each of those issues, and concluded that each of the relevant employees had contravened s 417(1) but not s 421(1) of the FW Act.

45    The employees appealed on grounds being:

1. The learned Judge erred at paragraphs [50]-[56] in construing section 19(2)(a) of the [Fair Work Act] as placing a burden upon a [appellant] employee to establish that an employer had provided authorisation or agreement.

2. The learned Judge erred at paragraphs [16]-[56] by failing to give individual consideration to what the admissible evidence for the section 417(1) contravention was as against each of the 74 individual [appellants].

3. The learned Judge erred in finding that [Fair Work] had proven each individual [appellant] had contravened section 417(1) of the [Fair Work Act] in circumstances where there was insufficient admissible evidence to do so.

4. In the alternative, if the Full Court is satisfied that there was sufficient evidence to conclude that any of the appellants did attend a political rally on 28 February 2013, the learned Judge erred at paragraph [35] in concluding that attending a political rally that did not concern issues between an employer and employees would constitute "industrial action" within the meaning of section 19 of the [Fair Work Act].

46    In respect of the conduct of the proceedings the Full Court observed:

43. It is fair to observe that the appellants made little attempt, before or at the trial, to identify their respective defences. They seem to have believed that the so-called “penalty privilege” excused them from compliance with the pleading rules of this Court, and that they might simply raise issues at trial which Fair Work was then obliged to prove or disprove. In the past there may have been pecuniary penalty proceedings in which such an approach was permitted. However one wonders about its appropriateness in view of the decision of the High Court in The Commonwealth v Director of Fair Work Building Industrial Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [53].

44. On appeal the appellants again took a very liberal approach to the issues. Indeed, even in submissions in reply, senior counsel seemed to consider that he was at liberty to pursue new grounds of appeal. He was invited to apply for an appropriate amendment to the notice of appeal, but he did not accept that invitation. Fair Work seems to have taken an indulgent approach to such conduct.

47    The Full Court gave detailed consideration to the construction of ss 417 and 19 of the FW Act, and materially at [98] noted the assertion of the employees that the primary Judge had erroneously placed a burden on them to establish authorization or agreement. At [99] the Full Court noted that the Director had pleaded that the industrial action was not authorized or agreed to by the employer, and to that plea the employees had pleaded that they claimed penalty privilege and did not admit it. Their Honours noted that the Federal Court Rules require respondents to specifically admit or deny every allegation of act in an applicant’s pleading, and at [100] that as a general proposition the privilege against self-exposure to a penalty could not be abrogated by a rule or order of Court. Their Honours then at [101] noted the decision in Police Service Board v Morris [1985] HCA 9; (1985) 156 CLR 397, where the High Court found that the relevant legislation and regulations evinced an intention that the privilege be abrogated. At [102] their Honours continued:

102. The relevant regulation related only to disobeying a lawful order. Much that was said about the special position of the police force would equally apply to the judicial system. Following the adoption of Pt VB of the Federal Court Act, one might well argue that facilitation of the just resolution of disputes may necessitate a rule which compels the advance identification of any defence, to that extent abrogating the right to decline to expose oneself to a penalty. Indeed, the Court of Appeal of New South Wales has said as much in MacDonald v Australian Securities and Investments Commission [2007] NSWCA 304; (2007) 73 NSWLR 612. In that case, after an examination of the cases, Mason P said at [71]-[74]:

71 In my opinion, these principles mean that the claimant should not be compelled to include in his Defence any information that may have the tendency to expose him directly or indirectly to the penalties being sought by ASIC.

72 To draw the line conceptually at this point will not relieve the claimant from compliance with UCPR rr 14.14 and 15.1 so far as disclosing in his pleading his intention to invoke the statutory defences or any other “positive” defence, regardless of where the onus lies in establishing that defence. Not every form of affirmative defence has the requisite tendency. I see nothing wrong with a pleading in the following form:

If, which is denied, the matters alleged in para X constitute a contravention of sY of the Corporations Law, the defendant says that the matters alleged by ASIC also establish that the claimant relied upon information or professional or expert advice (etc) / acted honestly (etc). The defendant reserves the right to advance in his case additional material in support of his defence, the details whereof will be disclosed by amending this paragraph after the close of ASIC’s case.

See also Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 at 86, Bridal Fashions at 117.

73 In the Matter of Water Wheel Mills Pty Ltd (Victorian Supreme Court, Mandie J, 22 June 2001, unreported) involved a civil penalty claim under the Corporations Law. Mandie J declined to order a defence to be filed going beyond one indicating the matters admitted, denied or not admitted. His Honour was not persuaded to follow Bridal Fashions. He considered that any meaningful pleading of affirmative allegations by way of defence might expose the defendants to a civil penalty or put the plaintiff upon notice of a train of enquiry which might expose the defendants to a civil penalty.

74 I respectfully disagree. In my view, the Rules ought to be departed from no more than is necessary to give effect to the privilege. The pleading mechanism I have suggested would require the claimant to invoke from the outset any relevant defence or statutory ground of dispensation; and it would require him to identify any parts of ASIC’s own allegations intended to be relied upon in that regard. There would also be a framework that defines the legal issues throughout the trial against which rulings as to admissibility could be made (at least in some circumstances). If and to the extent that the claimant exercised his right to plead and particularise in the manner indicated and not to waive his privilege by venturing further, there will still be the likelihood of ASIC’s evidentiary case being split more than it otherwise might be, but at least this consequence would be reduced to a minimum.

48    Their Honours continued:

104. To the extent that the decision relies upon New South Wales legislation and rules, there appears to be little difference between the position in that State and that which prevails in this Court. It is important to note that at [72], Mason P made it clear that when he spoke of a “defence”, he included statutory defences and any other “positive” defence, regardless of where the onus might be in establishing that defence. Much of his Honour’s reasoning seems to have been based on the simple proposition that pleading the facts necessary to establish a defence (or raise it) will not necessarily amount to exposure to the risk of incurring a penalty.

105. We have little doubt that for the appellants to rely upon alleged authorization or agreement, is to advance a “positive” defence which, according to the decision in MacDonald, should have been pleaded. We would say the same about a claim of illness, that a particular appellant was unable to access the site or that such an employee was “off”, if that term meant anything more than that he was engaging in industrial action. However it is not necessary for us to decide this matter. Fair Work seems to have been content to conduct the case on the basis that the appellants were not obliged to plead these matters. Rather, it asserted that the appellants had not satisfied evidential burdens concerning them.

49    In this context it is also helpful to examine more closely the decision in MacDonald.

50    In MacDonald, ASIC had commenced civil proceedings against a number of natural persons and trading corporations seeking (inter alia) declarations of contraventions of the Corporations Law and the Corporations Act 2001 (Cth), and pecuniary penalties pursuant to s 1317G of the Corporations Act 2001. In the Court of Appeal the question at issue was the Court’s power to order the filing of a defence that was pleaded and particularised in accordance with the Uniform Civil Procedure Rules 2005.

51    The majority judgment was delivered by Mason P (Giles JA agreeing).

52    At first instance the claimant contended that to require him to file any defence would contravene the privilege available to natural defendants in civil penalty proceedings.

53    As Mason P explained:

41….The proposition was advanced in absolute terms: no Defence should be ordered to be filed, now or at any stage of the proceedings.

54    The primary Judge ordered the defendants to file and serve unverified defences. The claimant sought leave to challenge those orders, and the Court of Appeal heard full argument as on an appeal. During the course of the appeal the claimant withdrew the absolute proposition advanced below, accepting that the claimant could be required at that stage of the proceedings to file a defence indicating the extent to which ASIC’s allegations were admitted, denied or not admitted. Mason P observed at [45] that this concession was properly made.

55    Mason P observed:

48 A defendant may in a pleading deny or not admit particular allegations, or plead limitation or other statutory defences, without in any way self-incriminating or exposing him or herself to a civil penalty. A defendant may choose to admit particular allegations, thereby shortening the trial and/or reducing the risk of an adverse costs order.

56    At [53] Mason P noted the direction then sought by the claimant, namely:

…that the requirements of Rule 14.14 and Rule 15.1 of UCPR be dispensed with; that his Defence be limited to identifying which paragraphs of the Further Amended Statement of Claim are admitted, not admitted and denied respectively; and that liberty be reserved to him to file an Amended Defence, pleading any additional facts not already traversed in the pleadings, after ASIC has closed its case.

57    His Honour did not accept that the claimant’s privilege went so far as to require such a blanket dispensation from the rules of pleading. Given the terms of s1317L of the Corporations Act, his Honour considered (at [54]) that dispensation should only go so far as is necessary to serve the privilege and the interests it protected. Section 1317L provides:

Civil evidence and procedure rules for declarations of contravention and civil penalty orders

The Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for:

(a) a declaration of contravention; or

(b) a pecuniary penalty order.

58    Mason P observed that the primary Judge had followed the decision of the Full Court of the Supreme Court of Western Australia in Bridal Fashions, where the Full Court found that in the context of civil penalty proceedings under the Customs Act 1901 (Cth) that the privilege against self-exposure to a penalty was available to natural defendants, it had not been abrogated by the Customs Act, but nonetheless the privilege had no practical application in the pleading of a defence to a statement of claim in a Customs prosecution.

59    Mason P referred to Silvestri at 251 [17] where Gyles J had said:

A personal respondent to a penalty proceeding is entitled to put the applicant to proof of its case. Such a respondent cannot be forced to make an admission and no solicitor acting for that person can be held responsible for not ensuring that a party plead in a way which goes further than this. In other words, such a respondent can decline to admit matters alleged against it. To the extent that the rules of pleading require to be modified to enable this to take place, that will be done. There is no occasion, however, for relieving respondents of a duty to plead. Even in a criminal trial, a defendant pleads guilty or not guilty. The issue would arise in a case where a personal respondent proposes to rely upon a positive defence. Penalty proceeding or not, means must be found to advise the applicant and the court of any positive defence so that the trial can be properly prepared and conducted. It is at that point that there may be a debate as to the appropriate course, which may involve a closer examination of the decisions in Bridal Fashions and Hadgkiss. That has not yet arisen here. Directions can be sought if and when it does.

60    At [59] Mason P noted that ASIC had submitted there should be no relaxation of the pleading rules. Further:

59…To require a full pleading does not require the defendant to assist ASIC in its claim for penalties, it merely ensures that the defendant gives timely notice of any positive case he proposes to advance whether by reliance upon evidence tendered by the plaintiff, cross-examination of the plaintiff’s witnesses, or (in due course) tendering evidence of his own. Without full pleadings the trial may be prolonged because the defendant could scarcely complain that ASIC was splitting its case if it tendered in reply evidence responsive to material first foreshadowed and revealed in the defence case.

61    At [66] Mason P noted that a defendant is entitled to be protected against both direct and indirect self-incrimination – accordingly the privilege also protects against the compelled disclosure of information that may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character. After examining relevant authorities his Honour concluded:

71 In my opinion, these principles mean that the claimant should not be compelled to include in his Defence any information that may have the tendency to expose him directly or indirectly to the penalties being sought by ASIC.

62    His Honour then continued with the observations cited by the Full Court in Adams, granted leave, and allowed the appeal in part.

63    The reasons of Spigelman CJ in MacDonald departed from those of Mason P and Giles JA. At [10] his Honour noted that an issue to be determined was whether the penalty privilege was engaged by reason of the requirement to identify matters set out in r 14.14(2) and r 15.1 of the Uniform Civil Procedure Rules. Rule 14.14(2) provides:

(2) In a defence or subsequent pleading, a party must plead specifically any matter--

(a) that, if not pleaded specifically, may take the opposite party by surprise, or

(b) that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

(c) that raises matters of fact not arising out of the preceding pleading.

64    Rule 15.1 provides:

(1) Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet.

65    His Honour noted that the test was whether there was a likelihood, or a non-fanciful risk that, either directly or derivatively, compliance could assist the regulator establish any part of its case which could result in the imposition of a penalty.

66    In particular I note the concluding observations of his Honour following his Honour’s examination of Bridal Fashions:

27 The Respondent submitted that the reasons of Young CJ in Eq should be understood as an application of part of the reasoning of the Full Court. In that case the Full Court was concerned with s255 of the Customs Act 1901 (Cth), which provided that averments in an information had to be treated as prima facie evidence of the matters averred. The Court said at 516 to 517:

“In practice, however, the practical effect of s255(1) is that a defendant will ordinarily be required to raise an affirmative allegation in its defence. With pleading the facts and circumstances of an affirmative case the defendant will not be able to tender positive exculpatory evidence ... The defendant could readily plead an affirmative case by averring, for example: ‘if (which is denied or not admitted) the alleged fact was as pleaded in para X of the Statement of Claim, the defendant says ...’ Should the defendant plead an affirmative case on this basis it would not thereby incriminate itself. On the contrary, the purpose of the affirmative case would be to set up a defence against the case brought against him by the prosecution.”

28. In my opinion this passage in the joint judgment does not cover the circumstances of the present case. The requirements of r 14.14(2) and r 15.1(1) do not permit the Appellant only to plead in the manner set out by the Full Court. These rules require the Appellant to make positive assertions of fact, and to provide particulars thereof, going well beyond simply an acceptance that: if, which is denied or not admitted, the facts and matters in the Statement of Claim should be accepted, etc. Indeed this is the very purpose of r 14.14(2)(a) and (c).

29. Mason P is of the view that a pleading and particulars should be ordered which identifies allegations in the Statement of Claim which, if established, would be relied upon by the Appellant in its case under one of the exculpatory provisions. His Honour sets out a form of pleading at [72] which is directed to s189 but can be adapted to other exculpatory provisions. Like the formulation from Bridal Fashions this suggested pleading refers only to matters alleged in the Statement of Claim.

30. On this basis r 14.14(2)(c) referring to facts not alleged in the pleading has no application. Similarly, I do not see how the obligation to give particulars “necessary to enable (ASIC) to identify the [Appellant’s] case” within s15.1(1) would apply. The scope of the pleading envisaged by Mason P appears to me to be confined to the “surprise” factor in r 14.14(2)(a).

31. As presently advised, I do not see that there would be any practical significance to such a pleading. Notwithstanding the fact that the Court has, unusually, made orders with respect to case management of a trial, they remain interlocutory directions and can be amended by the judge managing the case or conducting the trial. If a matter of practical significance emerges this issue can be re-agitated.

67    In relation to these authorities I make the following observations.

68    First, the comments of the Full Court in Adams were clearly obiter. The Full Court noted that they were not required to decide the relevant point.

69    Second, the comments of the Full Court in Adams were made in circumstances where, at the closure of the Director’s case, no amended defence was filed by the employees, but nonetheless the employees identified for consideration such issues as specific authorization by the employer, and the primary Judge went on to decide those new issues without amendment to the pleadings. This approach was the subject of specific criticism by the Full Court, in particular the “liberal” approach by Counsel for the employees to issues in the proceedings outside the pleadings and the indulgence granted by the Director to the employees in respect of their conduct of the case. In this respect the issues before the Court in that case were quite different from those before Finkelstein J in ASIC v Mining Projects, or currently before me. To that extent I do not consider that Adams is authority for the proposition advanced by the ABCC in the case before me.

70    Third, the decision of Finkelstein J in ASIC v Mining Project was not cited by the Full Court in Adams notwithstanding that it appears (from subsequent citations in the Federal Court, other jurisdictions, and such learned texts as Heydon J D, Cross on Evidence (12th ed, LexisNexis Butterworths, 2020 at [25125]) to be the leading authority in respect of the proper approach by a defendant in filing any positive defence at the closure of the plaintiff’s case in civil penalty proceedings. The fact that it was not identified as a relevant authority in Adams is perhaps not surprising in circumstances where the issue the subject of decision in ASIC v Mining Project had not arisen in the primary proceedings in Adams or indeed in the grounds of appeal before the Full Court in Adams.

71    Fourth, the High Court in the Agreed Penalties Case at [53] observed as follows:

Civil penalty proceedings are civil proceedings and therefore an adversarial contest in which the issues and scope of possible relief are largely framed and limited as the parties may choose, the standard of proof is upon the balance of probabilities and the respondent is denied most of the procedural protections of an accused in criminal proceedings.

(footnote omitted)

72    This observation is certainly correct, and uncontroversial. I am unable to identify any way in which it can be seen to undermine a claim to the privilege against self-exposure to penalty in civil penalty proceedings. The fact that the approach to agreement on penalties in civil proceedings may, following the Agreed Penalties Case, have departed from the approach in criminal proceedings, is in my view irrelevant. The privilege against self-exposure to penalty stands on its own, as a legal principle of long standing. As Burchett J observed in a five-member Full Court in Trade Practices Commission v Abbco Ice Works Pty Limited [1994] FCA 1279; (1994) 52 FCR 96:

17. The accuracy, as a matter of history, of the view accepted by McHugh J that the privilege against self-exposure to a penalty "was not invented by the Court of Chancery", its origin being in the common law, was strongly attacked at the hearing before us, with a wealth of citation of ancient authority. However, the point does not seem to me to be significant. Even if the privilege was in fact invented by the Court of Chancery, or if its origin is uncertain, it is plain from the citation which McHugh J makes from a judgment of Lord Hardwicke, and other judgments of that eminent Lord Chancellor are to like effect, that the development of the privilege into its mature form proceeded upon precisely the same principles as the development of the privilege against self-incrimination. The two marched in step and, as I shall show, were often, perhaps usually, treated as one. To the extent that an aversion to actions by common informers may have contributed to the growth of the equitable doctrine, leading Courts of Chancery to restrict discovery proceedings, it should be said that this is hardly a basis upon which a modern court would ground a refusal to countenance assisting an action brought to recover a penalty imposed by the Parliament in the pursuit of national economic policies of high importance - particularly where such an action may only be maintained by the Minister or the Trade Practices Commission.

73    Fifth, I am not persuaded that either the Federal Court Rules or Part VB of the Federal Court Act abrogate the privilege against self-exposure to penalty in civil penalty proceedings.

74    The Federal Court Rules and Part VB are provisions of general application to all civil litigation in the Federal Court of Australia.

75    The Federal Court Rules were enacted pursuant to s 59 of the Federal Court Act which relevantly provides in s 59(1) that:

(1) The Judges of the Court or a majority of them may make Rules of Court, not inconsistent with this Act, making provision for or in relation to the practice and procedure to be followed in the Court (including the practice and procedure to be followed in Registries of the Court) and for or in relation to all matters and things incidental to any such practice or procedure, or necessary or convenient to be prescribed for the conduct of any business of the Court.

76    The Explanatory Statement noted that the Federal Court Rules:

.. set out the practice and procedure requirements to be adopted by litigants and their legal representatives in all phases and for all types of proceedings in the Court and therefore provide the machinery for court processes. Although the new Rules are written in more modern and simpler language than the former Rules, the new Rules (like the former Rules) are based on long-existing and well-understood procedures for legal proceedings.

The new Rules do not substantially alter existing practice and procedure but rather explain it in a way that it can be more easily followed and applied. They do contain a number of new provisions and some innovative and streamlined procedural approaches. All provisions have been developed with ease of understanding in mind and so that, individually and collectively, the new Rules speak for themselves

77    Further, I note that Part VB was inserted into the Federal Court Act by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth), the General Outline of which is described by the Explanatory Memorandum to the relevant Bill in the following terms:

This Bill amends the Federal Court of Australia Act 1976 to strengthen and clarify the case management powers of the Federal Court to ensure more efficient civil litigation. It also streamlines the appeals pathways for civil proceedings, and clarifies the powers of judicial officers of the federal courts, particularly the heads of each federal court.

A key objective of the reforms is to bring about a cultural change in the conduct of litigation so that, at the same time as resolving disputes justly, the following considerations are at the forefront:

•    focussing the Court, parties and their lawyers’ attention on resolving disputes as quickly and cheaply as possible

•    reducing the costs of litigation

•    allocating resources in proportion to the complexity of the issues in dispute

•    avoiding unnecessary delays, and

•    management of the Court’s judicial and administrative resources as efficiently as possible.

78    Having regard to the objectives of the Federal Court Rules 2011 and Part VB as articulated in relevant explanatory documentation, it cannot be said that the intent of Parliament in enacting them was to abrogate such a long-standing rule as the privilege against self-exposure.

79    In this respect the general provisions of the Federal Court Rules and Part VB can in no way be compared with, for example, the regulations the subject of consideration by the High Court in Police Service Board v Morris, where the High Court found that application of the privilege would be inappropriate, and therefore the privilege was abrogated.

80    Sixth, there is no authority, in this Court or elsewhere, which supports the proposition that a respondent to civil penalty proceedings is entirely relieved of the obligation to file a defence to those proceedings. Indeed, this obligation was recognised by Finkelstein J in ASIC v Mining Projects at [13]. The respondent’s defence as filed in answer to the statement of claim may simply be a denial of the allegations in the statement of claim, as has occurred in the proceedings before me.

81    Seventh, and notwithstanding the findings of the Court of Appeal in MacDonald, there is extensive authority (which I have endeavoured to set out in this judgment) that a respondent to civil penalty proceedings is neither obliged prior to the closure of the applicant’s case to plead any positive defence it subsequently intends to run, nor is barred from so pleading after the closure of the applicant’s case. As Finkelstein J pointed out in ASIC v Mining Projects, disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry, a defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence, and if a defendant is required to plead a positive case there is a risk of that happening (see also Dunford J in Chief Executive Officer of Customs v Camile Trading Pty Ltd [2004] NSWSC 1256 at [32]).

82    To the extent that the decision of the Court of Appeal of New South Wales in MacDonald is authority to the contrary on this point, I respectfully decline to follow it.

83    Finally, I refer again to the decisions in this Court since ASIC v Mining Projects which have followed that case. In my view it is appropriate that I follow and apply the reasoning of Finkelstein J in that case, as well as the reasoning in those subsequent decisions.

84    It also follows that any questions put by Counsel for the Individual Respondents in cross-examination of witnesses called by the ABCC need not be referable only to the case as currently pleaded.

Associate:

Dated:    7 September 2020

SCHEDULE OF PARTIES