Federal Court of Australia

Australian Aged Dental Care Pty Ltd v Australian Dental Association (New South Wales Branch) Ltd [2021] FCA 1514

ORDERS

THE COURT ORDERS THAT:

1.    On condition that the applicant notify the respondent in writing within 48 hours of the applicant becoming aware of any directions or timetabling made in the subject criminal proceedings, the present proceeding be stayed until further order of the Court.

2.    The parties have liberty to apply on the giving of 72 hours’ notice.

3.    The costs of and incidental to the interlocutory application filed on 29 October 2021 be the respondent’s costs in the cause.

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

REASONS FOR JUDGMENT

(Revised from transcript)

GRIFFITHS J:

1    The applicant in the substantive proceedings has filed an interlocutory application on 29 October 2021. The applicant seeks a stay of those proceedings based upon there being on foot criminal proceedings, not against the applicant itself but rather against members of a family (the Olivier family) who are related to the applicant.

2    The application is opposed by the respondent.

3    For the following reasons, the stay will be granted.

Summary of background facts

4    The applicant commenced the substantive proceedings on 11 February 2020. It claimed that it was entitled to relief arising from alleged misleading or deceptive conduct by the respondent between February and May 2014, at which time the applicant was providing mobile dental services to school children. An amended statement of claim was filed on 17 April 2020 (ASOC). The respondent filed a defence on 3 July 2020 (D).

5    The ASOC relates to events in April to May 2014 ([22]–[30] of the ASOC). The alleged contravening conduct by the respondent (who is the peak body representing the dental profession in New South Wales) comprises:

(a)    alleged statements by Phillip Breen (the Advisory Service Manager of the respondent) to the principals of Narromine High School and Denison College, variously referring to concerns about dental vans, including as to excess or harmful radiation, administration issues, ethics and use of the Child Dental Benefit Scheme (CDBS) by mobile dental service providers not being appropriate (ASOC [21]–[22]; cf D [21]–[22]);

(b)    communication to NSW Health as to concerns about service delivery to school children by private mobile dental providers, referring to the potential for informed consent requirements to be misunderstood or overlooked and parental or carer ability to ensure that services best utilised the child’s Medicare benefit, as well as a view about best practice dentistry (ASOC [25]; cf D [25]); and

(c)    communication to the NSW Primary Principals’ Association, referring to some mobile dental services not being delivered in exact accordance with its accepted best practice model and the respondent’s responsibility to ensure that schools made an informed choice (ASOC [27]; cf D [27]).

6    Mr Jeremias Olivier built mobile dental clinics and established the applicant company in about 2010 to conduct business using such clinics to provide dental services onsite at aged care nursing homes. From about 2013 the business changed so that these services were provided to school children.

7    Ms Johanna Olivier is married to Jeremias Olivier and they have two daughters, Venessa and Michelle Olivier. According to ASIC records, Jeremias Olivier was a director of the applicant in the period from 3 November 2010 to 15 December 2015. Those records also indicate that Ms Venessa Olivier is the only member of the Olivier family who is currently a director of the applicant, having been appointed on 3 November 2010. Ms Michelle Olivier was a director of the applicant from 9 January 2014 to 15 December 2015. As at 10 November 2021, Ms Venessa Olivier is recorded as company secretary, a position she has held since 3 November 2010. The applicant emphasised that the ASOC alleges that the respondent engaged in misleading conduct by representing that the applicant had “questionable ethics” and that the applicant was “using the CDBS scheme inappropriately” (that scheme being the CDBS under the Dental Benefits Act 2008 (Cth)). The applicant asserts that these representations are false.

8    Noting that each of the Court Attendance Notices (CANs) issued to the Oliviers are substantially the same, it is apt to set out the terms of the alleged offence in the CANs with reference to Ms Vanessa Olivier. Under the heading “Details of Offence Sequence 1”, the first offence is alleged to be as follows:

Description of Offence: Obtain a financial advantage by deception

Time & Date of Offence: between 19 July 2013 and 19 December 2014

Place of Offence: Castle Hill in the state of New South Wales

Short Particulars: VENESSA OLIVIER did commit an offence with JEREMIAS CORNELIUS OLIVIER, JOHANNA CATHERINA OLIVIER, MICHELLE OLIVIER and unknown others, namely, by a deception, dishonestly obtain a financial advantage from the Commonwealth by obtaining payments of Medicare benefits to which they were not entitled.

9    Under the heading “Details of Offence Sequence 2”, the second offence is alleged to be as follows:

Description of Offence: Obtain a financial advantage by deception

Time & Date of Offence: between 18 July 2013 and 19 December 2014

Place of Offence: Castle Hill in the state of New South Wales

Short Particulars: VENESSA OLIVIER did with JEREMIAS CORNELIUS OLIVIER, JOHANNA CATHERINA OLIVIER, MICHELLE OLIVIER and unknown others, attempt to, by a deception, dishonestly obtain a financial advantage from the Commonwealth by obtaining payments of Medicare benefits to which they were not entitled.

10    The draft summary of facts provided by the Commonwealth Director of Public Prosecutions (CDPP) elaborates on those charges. It is alleged that each of the Oliviers held senior positions in the applicant and were managers. The alleged events occurred between July 2013 and December 2014 and it is alleged that each of the four Olivier family members carried out an agreement to dishonestly obtain a financial advantage from Medicare. The CDPP alleges that the Oliviers submitted claims for rebates under the Medicare Rebate Scheme which were not eligible for payment. The claims relate to dental radiology services. The payments are alleged to have been made to the applicant’s bank accounts of which the Oliviers are alleged, variously, to be signatories.

11    It is also relevant to provide a chronology of procedural steps in the proceeding, dating from 18 November 2020, which is a central basis for the respondent’s opposition to the stay:

    18 November 2020: By consent, the Court ordered that each party give discovery of documents within agreed categories.

    5 February 2021: The applicant confirmed receipt of documents produced by the respondent on discovery and proposed an extension of time for its own discovery until 22 February 2021.

    8 February 2021: The Court made orders by consent to that effect.

    26 February 2021: The applicant indicated that it would provide partial discovery on 1 March 2021 and proposed a further extension for the balance of discovery until 26 March 2021.

    1 March 2021: Orders to that effect were made by consent.

    22 March 2021 – 1 April 2021: The applicant provided documents on discovery, which included a letter dated 23 April 2015 from the applicant’s solicitors to a Senior Investigator in the Serious Non-Compliance Unit NSW of the Department of Human Services (DHS) seeking to resolve Medicare’s concerns about claims made by the applicant under the “Chronic Disease Dental Scheme” and CDBS. They included an email exchange on 24 and 28 September 2015 between the Senior Investigator and Ms Venessa Olivier, in which the Senior Investigator stated that he was “obliged to investigate allegations that are made against [a related company of the applicant]” and outline some “more recent allegations”.

    30 April 2021: The applicant foreshadowed that it would seek further categories of discovery and noted that the respondents had not yet indicated whether it proposed to seek further discovery. The Court ordered by consent that a case management hearing listed for 4 May 2021 be vacated because the parties were liaising as to the adequacy of discovery and need for further discovery.

    25 May 2021: The respondent sought confirmation that the applicant had no further documents within various categories and indicated that it proposed to seek “discovery of all documents constituting or evidencing communications between” the applicant or persons on its behalf and DHS staff “relating to an investigation referred to in” some of the discovered documents, including in particular documents constituting or evidencing allegations made or concerns expressed by Medicare concerning the applicant, the search warrant referred to in one of the discovered documents, and documents constituting or evidencing any responses to concerns expressed by either Medicare or DHS.

    26 May 2021:     The applicant responded to the respondent’s letter dated 25 May 2021 and proposed a timetable for further categories of discovery and the filing and service of the applicants lay and expert evidence, together with a proposed mediation.

    27 May 2021: By consent the Court made that timetable.

    28 May 2021: The respondent served its proposed further categories of discovery.

    8 June 2021: The applicant served its own proposed further categories, which included documents “recording or referring to … any communication between [the respondent] and … [DHS] (also known as Medicare) … concerning” the applicant, “any concerns regarding [the applicant] providing dental services using mobile dental clinics in NSW” or “the use of mobile dental clinics in NSW”.

    18 June 2021: The respondent indicated that it would not object to production of the documents provided that the applicant agreed to produce the documents sought by it. No response has been received to that letter.

    1 July 2021: The applicant wrote to the respondent stating that four identified persons had been served with criminal proceedings in “late 2020”. The subject of the proceedings was identified as “whether the individuals carried out an agreement to dishonestly obtain a financial advantage from Medicare by obtaining payments of Medicare benefits to which they were not entitled” and that a brief of evidence had been served by the Crown. The letter claimed that there was a “significant factual overlap between the Criminal Proceedings and these civil proceedings” and proposed that the civil proceedings be stayed until the criminal proceedings were finalised.

    6 and 7 July 2021: The respondent sought information as to when the applicant first became aware that the criminal proceedings were in prospect, precisely when they had been instituted and when the Crown’s brief of evidence had been served, together with other information requests.

    22 July 2020: The applicant responded by saying that an unfiled CAN was served on two of the accused on or about 29 December 2020 (i.e. before the discovery correspondence and orders outlined above). The applicant provided copies of the CANs for the accused, but not the Crown brief of evidence because it was said to be subject to an implied undertaking.

    29 July 2021: The respondent sought further information regarding the criminal proceedings.

    9 August 2021: The applicant provided further details of the charges.

    19 August 2021: The respondent informed the applicant that it was not satisfied that a stay had been justified.

    1 November 2021: The applicant filed the interlocutory application seeking a stay.

The applicant’s submissions in support of a stay

12    The applicant acknowledged that it is unusual for an applicant to seek a stay, because typically it is the respondent who is the moving party for such relief. Moreover, it also acknowledged that it was relevant that the applicant itself was not directly involved in the criminal proceedings, which proceedings involve directors and employee-managers of the applicant.

13    After referring to Commissioner of Australian Federal Police v Zhao [2015] HCA 5; 255 CLR 46 at [42] ff, the applicant said that its submissions in support of the stay were “somewhat circumscribed” because of the risk of prejudice if it elaborated upon particulars of the cross-over between the civil and criminal proceedings. It said that it was reluctant to anticipate, disclose or jeopardise any of the Oliviers’ criminal defences.

14    The applicant submitted that there was no doubt that it would be put in the criminal proceedings that one or more of the Oliviers were the directing minds of the applicant and it was likely that one or more of the Oliviers could be primary witnesses for the applicant in the present proceeding. The applicant submitted that, in assessing prejudice, no relevant distinction could be drawn between it and the Oliviers. It submitted that, through the Oliviers as witnesses, it would need to address the respondent’s claims that it acted with “questionable ethics” and misused the CDBS scheme. It said that it was “inevitable that matters raised in the criminal prosecution must be traversed in [the Oliviers’] evidence”. The applicant added that, in giving such evidence, forensic decisions would have to be made in the present proceeding knowing that any evidence given by the Oliviers might and probably will be used in the criminal prosecution and that the substantive privilege against self-incrimination would be undermined by the need to prove the falsity of the respondent’s representations.

15    The applicant also submitted that it was probable that the Oliviers would need separate legal representation in the criminal proceedings, with the consequence that five different sets of lawyers would need to settle any affidavit evidence in the civil proceeding, which would involve very significant costs.

The respondent’s submissions summarised

16    The respondent submitted that the applicant’s conduct was an important consideration in determining whether to stay a civil proceeding which the applicant itself had instigated. It emphasised that, despite being aware of the criminal proceeding since December 2020, the applicant failed to inform the respondent of this fact and took numerous procedural steps in the present proceeding, as outlined in the chronology above. Those steps included producing documents, including those relating to Medicare and DHS investigations, and proposing further discovery. The respondent submitted that the applicant’s conduct was all directed towards preparing the applicant’s civil case for final hearing, all of which is inconsistent with its application to now stay the proceedings.

17    The respondent further submitted that the applicant’s production of documents on discovery and proposal to serve lay evidence after it had produced documents as to the investigations and the respondent’s request for further discovery on these matters, is directly inconsistent with maintaining a right to silence for the purpose of the criminal proceedings. The respondent submitted that the applicant’s consent to an order requiring it to file and serve its lay evidence constituted an abandonment of any concern about prejudice from preparing, filing and serving such evidence.

18    The respondent submitted that the applicant’s reliance on Zhao was misplaced because the circumstances here were different.

19    The respondent challenged the applicant’s claim that it would need to rely on evidence from the Oliviers to address the propositions which arise in the civil proceeding that the applicant acted with questionable ethics and misused the CDBS scheme. The respondent submitted that such matters would be covered in business records of the applicant’s policies and procedures and that the applicant had no “forensic imperative to call the [Oliviers] as witnesses”.

20    Finally, the respondent submitted that it would suffer clear prejudice if the present proceedings were stayed in circumstances where it has incurred costs of approximately $44,000 in the period since the applicant first became aware of the criminal proceedings. The applicant said that it was “distinctly unfair” for it to have the civil proceedings “hanging over its head” for an indefinite period and that one of its central witnesses is 67 years old and is now retired.

Consideration and determination

21    The relevant principles guiding the exercise of the Court’s discretion to grant a stay in circumstances where there are related civil and criminal proceeding are helpfully summarised by Moshinsky J in Australian Securities and Investments Commission v Australian and New Zealand Banking Group Ltd [2019] FCA 964; 138 ACSR 42 (ANZ) at [50]-[63]. Despite their length, those passages should be set out in full:

50    The Court has a wide jurisdiction to stay proceedings in the interests of justice: Obeid v Commissioner of Taxation [2017] FCA 1135 (Obeid) at [2] per Pagone J (and cases there cited); Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562 (Websyte) at [53] per Dodds-Streeton J. The Court’s power to grant a stay is an incident of its general power to control its own proceedings for which s 23 of the Federal Court of Australia Act provides statutory support.

51    The appropriate approach in considering whether to grant a stay in the interests of justice has been considered in a number of recent decisions, including by the High Court of Australia in Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46 (Zhao) and by the Full Court of this Court in Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission (2016) 242 FCR 153 (CFMEU v ACCC). Recent first instance decisions concerning applications for a stay of a civil proceeding pending a criminal proceeding include: Ransley v Commissioner of Taxation [2016] FCA 778 (Ransley); Obeid; Re Plutus Payroll Australia Pty Ltd [2017] NSWSC 1854 (Re Plutus Payroll); and McLachlan v Browne (No 9) [2019] NSWSC 10 (McLachlan v Browne). Although reference is often made in this context to the guidelines set out by Wootten J in McMahon v Gould (1982) 7 ACLR 202 at 206-207, it is important to recognise that these are merely guidelines. While they may still offer some assistance, the guidelines need to be read in light of the subsequent cases.

52    Based on the authorities identified above, the applicable principles may be summarised as follows.

53    First, courts have the power to control their proceedings and to order a stay in an appropriate case; it will be appropriate to do so where the interests of justice require such an order: Zhao at [36] per French CJ, Hayne, Kiefel, Bell and Keane JJ; CFMEU v ACCC at [22] per Dowsett, Tracey and Bromberg JJ.

54    Secondly, a plaintiff is prima facie entitled to have his, her or its civil action tried in the ordinary course and a stay therefore requires justification on proper grounds (with the applicant for a stay bearing the burden of demonstrating proper grounds): see Zhao at [39]; McMahon v Gould at 206.

55    Thirdly, a court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending; a stay of the civil proceeding may be warranted if it is apparent that the accused is at risk of prejudice in the conduct of his, her or its defence in the criminal trial: see Zhao (2015) 255 CLR 46 at [35]; CFMEU v ACCC at [22]; see also Corporations Act, s 1331. The risk of prejudice must be real: see CFMEU v ACCC at [22]; Ransley at [22] per Jagot J. As to possible prejudice to an accused, the following have been recognised as relevant factors:

(a)    prejudice to the accused’s right to silence or privilege against self-incrimination: see Zhao at [42]-[47]; CFMEU v ACCC at [23]; Ransley at [24]-[30]; Obeid at [4]; and

(b)    the possibility of publicity that might reach and influence jurors: see CFMEU v ACCC at [44]-[46].

56    It may not be necessary for the applicant for the stay to state the specific matters of prejudice before a stay could be contemplated. As the High Court said in Zhao at [43], “to require the second respondent to do so would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid”.

57    A number of recent decisions have emphasised that the possibility of protective orders being made (such as an order made under s 128 of the Evidence Act 1995 (Cth) or a non-publication or suppression order) is not an adequate protection against the risk of prejudice to the accused: see Zhao at [44]-[46]; CFMEU v ACCC at [24]-[25]; Ransley at [29]-[30]; Re Plutus Payroll at [38] and [42] per Brereton J; Websyte at [121].

58    Fourthly, relevant prejudice to a party in the civil proceeding may arise from the existence of the criminal proceeding even in circumstances where there is not a strict identity between the applicant for the stay of the civil proceeding and the criminal accused: see Ransley at [15]; Obeid at [7]; Re Plutus Payroll at [33], [39], [41]-[43]. There may, for example, be relevant prejudice where the criminal accused, although not a party to the civil proceeding, would be a lay witness in that proceeding. In such circumstances, the criminal accused’s invocation of the privilege against self-incrimination and the right to silence may deprive a party to the civil proceeding of assistance or evidence that is critical or very important to its claim or defence.

59    Fifthly, prejudice to an accused who is not a party to the civil proceeding, or against whom relevant allegations are not made in the civil proceeding, may be a relevant consideration: see CFMEU v ACCC at [28]-[49] (although this argument failed on the facts in that case). There was a difference between the parties to the present case on this point. In oral submissions, ASIC submitted that the focus (in an application for a stay of a civil proceeding pending a criminal proceeding) is on the parties to the civil proceeding and whether the existence of the criminal proceeding gives rise to a risk of prejudice to a party; prejudice to a person who is not a party to the civil proceeding is not a relevant consideration. ASIC did not submit that prejudice to a non-party is completely irrelevant; however, on ASIC’s submission, prejudice to a non-party is only relevant to the extent that it impacts on the party to the civil proceeding in a relevant way. In support of these submissions, ASIC relied on Obeid at [2], [4], [6], [7]; McMahon v Gould at 206 (paragraphs (e) and (h)); Zhao at [19], [35], [37], [42], [48]; Ransley at [10], [15]; and Re Plutus Payroll at [33], [37], [41]-[43].

60    However, as pointed out by ANZ in its reply submissions, the cases relied upon by ASIC leave open the possibility that prejudice to an accused who is not a party to the civil proceeding may itself be a relevant consideration. In Obeid, Pagone J expressly refrained from deciding the point: at [7] (“Counsel for the applicants had also submitted … that relevant prejudice might also be caused to each of Messrs Obeid in their criminal trial if they were compelled to give evidence in the tax proceedings, but in the circumstances it is unnecessary to express a concluded view about whether that is the correct way to identify the relevant prejudice …”). In Ransley, Jagot J referred, not only to the risk of prejudice to the party to the proceeding, but also to the risk of prejudice to the accused (who was not a party to the civil proceeding): at [20] (“… I do not consider the existence of these powers [to make a non-publication or suppression order, etc.] to outweigh the potential prejudice to which the applicant will be exposed if forced to trial in the appeal without Mr Ransley’s evidence or to which Mr Ransley will be exposed if he is compelled by the applicant to give evidence in the appeal …” (emphasis added)). Indeed, the subsequent paragraphs of the judgment in Ransley focus on the position of the accused (as distinct from the party to the proceeding): see [21]-[30]. In Re Plutus Payroll, Brereton J referred, not only to the risk of prejudice to the party to the civil proceeding, but also to the risk of prejudice to the accused: at [43] (“… it seems to me that to require Synep to defend the winding up proceedings at this stage would require it to do so in circumstances where either it would be deprived of the most important source of evidence that might be adduced in its defence, or Messrs Onley and Cranston would have to forgo their right to silence in the criminal proceedings” (emphasis added)). Thus, in both Ransley and Re Plutus Payroll, the Court gave separate consideration to the risk of prejudice to a criminal accused who was not a party to the civil proceeding. In relation to Zhao, the passages relied on by ASIC reflect the particular circumstances of that case rather than supporting the general principle contended for by ASIC. In relation to McMahon v Gould, as noted above, the guidelines set out by Wootten J are just that: guidelines. Further, in CFMEU v ACCC, the Full Court considered whether there was a risk of prejudice to the individuals who were the subject of criminal charges in circumstances where the application for the stay of the civil proceeding was made by the union in respect of the claims against the union (the claims against the individuals in the civil proceeding having already been stayed): see [28]-[49]. In light of the approach taken by the Full Court in CFMEU v ACCC, and having regard to the other authorities discussed above, I consider that prejudice to an accused who is not a party to a civil proceeding may be a relevant consideration in considering whether or not to grant a stay of a civil proceeding. However, as discussed later in these reasons, acceptance of this proposition is not necessary for the disposition of the present application.

61    Sixthly, the risk of prejudice identified by an applicant for a stay must be weighed against the prejudice that a stay of the civil proceeding would occasion: see Zhao at [47], [50]; CFMEU v ACCC at [22].

62.    Seventhly, the principles relevant to the exercise of the discretion to grant a stay are not different in the case of a proceeding brought by a regulator, from those that apply in the case of a proceeding brought by a private plaintiff: CFMEU v ACCC at [60]-[62].

63.    Eighthly, each case must be judged on its own merits; the matters that might individually, or in combination, be relevant to the exercise of the discretion are not rigid or closed; the factors identified in the authorities are not a prescriptive or an exhaustive statement of all of the considerations, or the weight to be attached to them: see Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union [2016] FCA 504 at [51] per Middleton J (application for leave to appeal dismissed: CFMEU v ACCC).

22    Although each case necessarily turns upon its own facts, it is appropriate to say something more about the Full Court’s decision in Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission [2016] FCAFC 97; 242 FCR 153 (CFMEU v ACCC) (which Moshinsky J referred to in ANZ). In CFMEU v ACCC, the ACCC commenced pecuniary penalty proceedings against the CFMEU as well as two individuals who were associated with that body. Subsequently, criminal proceedings were commenced against the two individuals on charges of blackmail. The pecuniary penalty proceedings were stayed in relation to those individuals, but the primary judge refused to stay the proceeding against the CFMEU.

23    The Full Court refused leave to appeal from the primary judge’s decision. The Court held that, in order to establish potential prejudice warranting the grant of a stay of the civil proceeding, there must be an evidential basis for thinking that it is likely that the person would give evidence in the civil proceeding if there was no risk of prejudicing the criminal proceeding. The Full Court reasoned that there was no basis for thinking that the two individuals were likely to give evidence in the pecuniary penalty proceeding, with the consequence that the approach taken in Zhao was distinguishable.

24    Their Honours said at [36]-[38] (emphasis in original):

36    In the absence of that evidence there was no basis for concluding that an invidious choice was actually faced by Setka and Reardon. We would accept that the wish or need to defend or protect a financial interest (as in Zhao) is not essential, and that an invidious choice may be founded upon a person’s desire to clear his or her name and assist the organisation in which he or she is a senior official (as was here contended). However, the mere possibility that Setka and Reardon might desire to clear their names or assist the CFMEU does not establish that they are confronted by an invidious choice. Setka and Reardon may have no wish or desire to give evidence in the s 45D proceeding. For instance, they may have no basis for thinking that their evidence could be of assistance either to themselves or to the CFMEU.

37    The issue may be expressed thus: does it suffice to establish an “invidious choice” that Setka and Reardon might give evidence in the civil proceeding? Or, is it necessary that there be an evidential basis for thinking that it is likely that they would give evidence in that proceeding were it not for the potential of prejudicing the criminal proceeding? Inherent in the applicants’ position is that the former question should be answered “yes”. It is evident from what is said above that we disagree.

38    The High Court in Zhao evidently considered that the evidentiary burden upon an applicant to establish the existence of an invidious choice was not onerous. But that burden was not discharged in this case. Instead, the applicants’ submission impermissibly assumed the existence of the invidious choice for which they contended. They have not established that doubt attends the primary judge’s approach sufficient to warrant reconsideration by a Full Court.

25    The Full Court rejected the CFMEU’s submission that because of the overlap in timing between the civil and criminal proceedings, there would be prejudice to the two individuals in that their involvement in the civil proceeding could prejudicially impact upon their capacity to prepare for their defence in the criminal proceeding. The Full Court observed at [42] that this contention may have been more persuasive if there was a basis for finding that the two individuals would be burdened by a significant involvement in the civil proceeding, but the evidence before the primary judge did not indicate that the two individuals would be involved in the civil proceeding either as witnesses or as instructors.

26    The Full Court noted at [59]:

We would agree with the applicants that, in the sense we have explained it, the primacy of a criminal proceeding needs to be taken into account in the balancing process. In other words, the risk of prejudice to the fair and efficient conduct of the criminal proceeding should be given especial significance. But the difficulty for the applicants in this case is that a risk of that kind was not established. It was therefore not necessary for the primary judge to enter into an assessment of the importance to be given to such a consideration in the balancing process.

27    Applying the relevant principles to the circumstances here, I consider that, for the following reasons, the stay should be granted. First, in contrast with the position in CFMEU v ACCC, I find that it is likely that one or more of the Oliviers will be primary witnesses for the applicant in the present proceedings. They are the “directing mind” of the applicant (which is also known as Australian Mental Dental Care). During the relevant period Jeremias Olivier was the Chief Executive Officer of the company and was present at its headquarters nearly every day. He regularly had meetings with Johanna, Michelle and Venessa. His daughters were managers at the company and his wife was in charge of accounts and processing Medicare claims. Michelle Olivier was a manager with responsibility for calling staff in the mobile dental vans to encourage them to work faster and meet targets. She and her sister, Venessa, shared a HICAPS terminal, which they used to submit claims to Medicare. Venessa was the Department Manager for Quality and Procedures. All of those matters are raised in the draft summary of facts provided by the CDPP.

28    I do not accept the respondent’s submission that the issues concerning the applicant’s “questionable ethics” and alleged misuse of the CDBS scheme could adequately be addressed by the applicant’s business records and without calling one or more of the accused as witnesses. Given the senior management positions held by the relevant Olivier family members, they are likely to be required to be called as witnesses in the civil proceeding to establish the falsity of the relevant representations, as set out in the ASOC, including the alleged representation that the applicant’s use of the CDBS was not appropriate.

29    Secondly, on 28 May 2021, the respondent included among its proposed further categories for discovery and documents relating to the investigation into the applicant carried out by Medicare or the DHS (Medicare Category). I accept the applicant’s submission that the Medicare Category captured all documents within the applicant’s possession which go to the investigation, which investigation then led to the criminal proceedings. I also accept the applicant’s submission that the accused persons may be required in the present proceedings to give evidence to explain the documents discovered during the investigation.

30    Thirdly, although not themselves a party to the present proceedings, I consider that each of the accused Olivier family members would be at risk of prejudice in the conduct of their defence in the criminal proceedings if the civil proceedings are not stayed. It is important to note that it is alleged in the criminal proceedings that the four accused engaged in a joint enterprise and acted under an agreement to obtain, dishonestly, a financial advantage from Medicare. The criminal proceedings are listed for hearing tomorrow on 30 November 2021, when it is expected that the accused will plead to the charges. However, I was told from the Bar table during the course of today’s hearing that that hearing in the criminal proceedings may need to be adjourned to February 2022 because of the recent production of a database of material.

31    I accept that it may not be until sometime in 2023 that the prosecution will be heard. It is probable that the civil proceeding will have been heard and determined by then (assuming they are not stayed). I find that the risk of prejudice to the persons accused is real, with particular reference to their right to silence or privilege against self-incrimination if they give evidence in the present proceedings. That risk of prejudice is not entirely avoided by the possibility of protective orders (see Zhao at [44]-[46]; CFMEU v ACCC at [24]-[25]).

32    Fourthly, I find that there is a sufficient overlap in the subject matter of the two proceedings, relating as they both do to claims of misuse of the CDBS scheme.

33    Fifthly, I accept that it is relevant to note that none of the accused persons is a party to the present proceeding. That does not mean, however, that the risk of prejudice to those accused persons is not itself a relevant consideration.

34    Sixthly, I accept that the risk to be weighed against the prejudice to the accused is the prejudice to the respondent if the present proceedings are stayed. I do not doubt the validity of the matters of prejudice raised by Mr Herzfeld SC (who appeared for the respondent with Mr Farinha) and which are summarised at [20] above. I consider, however, that those matters are significantly outweighed by other considerations which favour a stay.

35    Finally, I address the respondent’s contention that the many procedural steps taken by the applicant in the proceedings to date, knowing that the criminal proceedings were on foot, amounted to an abandonment of any concerns relating to the implications of the criminal prosecutions. There has been delay in bringing this interlocutory application, noting that it was put from the Bar table that the applicant only first appreciated the significance of the overlap of the civil and criminal proceedings in late May 2021, in the context of the parties’ discussions about further categories of discovery. I note that the applicant first raised the issue of a stay in a letter to the respondent, which is dated 1 July 2021, and there then occurred a series of discussions between the parties in order for the respondent to be able to obtain sufficient information for it to finalise its position regarding the proposed stay.

36    The applicant’s conduct in progressing the proceeding and its delay in filing the interlocutory application is regrettable, but it does not constitute an abandonment of its concerns relating to the overlap between the criminal and civil proceedings. Those matters, however, are relevant to costs.

Conclusion

37    For all these reasons, the present proceeding will be stayed. The parties will have liberty to apply to have the matter relisted on the giving of 72 hours’ notice if any relevant events occur which indicate that a stay is no longer required. I will impose a condition on the stay that the applicant notify the respondent within 48 hours of it becoming aware of any development concerning directions or timetabling in the criminal proceedings.

38    Having regard to the applicant’s conduct giving rise to the matters of prejudice quite properly raised by the respondent and the delay on the part of the applicant in bringing this application, which I have referred to above, I will order that the costs of and incidental to the interlocutory application be the respondent’s costs in the cause.

Associate:

Dated:    1 December 2021