Federal Court of Australia

Hillier v Martin (No 10) [2022] FCA 166

ORDERS

THE COURT ORDERS THAT:

1.    The First Respondent’s claim of privilege against self-incrimination be dismissed.

2.    The Applicant’s application to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process is dismissed with no order as to costs.

3.    The Applicant’s application to appoint a receiver to the Second Respondent is dismissed with no order as to costs.

4.    On or before 9 March 2022, the First Respondent is to produce for inspection the Xero database, in its entirety, by way of electronic access to a read only version of the documents, such access is to be facilitated by the provision of log in access to software that facilitates readable access to the materials.

5.    The First Respondent pay the Applicant’s costs in relation to the privilege against self-incrimination application on a lump sum basis to be determined by a Registrar of the Court, unless agreed.

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

REASONS FOR JUDGMENT

ANDERSON J:

1    This matter has a long-drawn-out and tortured history, with 11 applications made to this Court.

2    On 6 August 2021, I heard an application brought by Ms Victoria Martin (the First Respondent) for leave to appeal from an interlocutory decision of Justice Charlesworth on a matter of practice and procedure in Martin v Hillier (No 2) [2021] FCA 958 (Hillier (No 2)). In Hillier (No 2), the First Respondent sought to avoid discovering a database (Xero database) which contained relevant financial records over the Nordburger business which is the subject of the substantive dispute. I dismissed the application and found that Justice Charlesworth’s Reasons made plain that the relevant discoverable document was the collection of financial data on the database and not the Xero software which enabled the underlying database to be accessed.

3    The First Respondent has now brought an interlocutory application seeking to claim privilege against self-incrimination over the same Xero database that was the subject of the previous applications.

4    The Applicant made an oral application that the First Respondent’s claim to privilege against self-incrimination be struck out as an abuse of process, alternatively, the Applicant made an oral application that the Second Respondent, as the sole trustee of the Nordburger Holdings Trust produce the Xero database and that a receiver be appointed to facilitate such production.

Background

5    On 24 February 2022, the parties appeared before me. During the hearing, counsel for the Applicant, Mr Whitington QC, put forward a compromise in order to resolve this dispute in a reasonable and efficient manner. I adjourned the hearing to 3 March 2022, to enable the parties to reach a sensible compromise. Unfortunately such a compromise was not reached.

6    By way of affidavit dated 1 March 2022, the solicitor for the Applicant, Mr Gene Sykes Bidstrup (Mr Bidstrup) deposed to the events that followed the 24 February 2022 hearing, which I outline below.

7    Shortly after the hearing on 24 February 2022, Mr Bidstrup sent an email to the First Respondents' solicitor Mr Stephen Williams (Mr Williams). In that email, Mr Bidstrup proffered two undertakings to the First Respondent in relation to the confidential affidavits and the Xero database (undertakings) which the Applicant says, if accepted, would have:

(a)    provided a practical resolution to the question of production whilst protecting the First Respondent's claim to privilege against self-incrimination;

(b)    allowed the Applicant access to the affidavit material before the Court for the purpose of enabling the Applicant to address the Court in a fair and informed way on the First Respondent’s claim to privilege against self-incrimination; and

(c)    allowed the parties to progress the matter to trial in a manner consistent with their obligations under s 37M and s 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act).

8    By letter dated 25 February 2022, Mr Bidstrup proffered the undertakings to Mr Williams for a second time and, having not heard from the First Respondent’s solicitors since the hearing, sought an urgent indication from Mr Williams as to whether the undertakings were accepted.

9    By letter dated 28 February 2022, from Mr Williams to Mr Bidstrup, Mr Williams expressly rejected the undertakings and offered no alternative proposal. Mr Williams indicated that the undertakings proffered were not accepted by the First Respondent on the basis that:

(a)    the Xero database is not essential to the Applicant's preparation for trial; and

(b)    the Xero database has no connection with the Applicant's case on liability.

10    At this point, I should note that both of the above assertions put forward by Mr Williams are plainly incorrect, are irrelevant to this application and are also in direct conflict with the findings that this Court has made on two prior occasions.

11    Firstly, Her Honour, Justice Charlesworth previously ruled that the documents and information contained in the Xero database are relevant to the Applicant's claim that he is entitled to a share of the profits of the alleged joint venture in Hillier v Martin (No 4) [2021] FCA 710 (Martin (No 4)) at [27]-[48].

12    Secondly, as noted above, I considered the question of leave to appeal against that finding in Martin (No 4) and the associated production order. In Hillier (No 2) I agreed with Justice Charlesworth's findings and dismissed the application for leave to appeal with costs.

13    On 3 March 2022, I heard the applications. Mr Whitington QC appeared with Ms Doyle for the Applicant and Mr Ower SC appeared on behalf of the First Respondent. At the commencement of the hearing the parties raised four matters for consideration, these were:

(a)    Whether the claim for privilege against self-incrimination should be upheld;

(b)    Whether the First Respondent’s claim for privilege against self-incrimination is an abuse of process;

(c)    If privilege against self-incrimination is upheld, how access should be determined without infringing the privilege; and

(d)    If privilege against self-incrimination is not upheld, whether a receiver should be appointed to the Second Respondent to facilitate production.

14    The First Respondent’s claim to resist the production of the Xero database must be rejected for the reasons given below. As a consequence, there is no utility in determining the Applicant’s application to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process. I will make orders that the Xero database be produced by the First Respondent. There is no reason to appoint a receiver to the Second Respondent to facilitate the production of the Xero database.

PriVilege Against self-incrimination

15    It is accepted at common law that privilege against self-incrimination entitles a person to refuse to answer any question, or produce any document, if the answer to the question or the production of a document would tend to incriminate that person: Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 335.

16    This proposition is well adopted and was recently cited by the Full Court in Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; 373 ALR 624; 140 ACSR 340, where their Honours, Moshinsky, Wheelahan and Abraham JJ, gave the following observations based on long-standing authority at [85] and [86]:

The privilege of an individual against self-incrimination is a deeply entrenched common law right not to answer questions or produce documents or things where there would be a tendency to expose the individual to a criminal charge: Griffin v Pantzer at [43] (Allsop J, citing: R v Associated Northern Collieries (1910) 11 CLR 738; Sorby; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 (Pyneboard); Reid v Howard (1995) 184 CLR 1; and Caltex) …

…

The privilege against self-incrimination protects an individual not only from self-incrimination directly under a compulsory process, but also from making a disclosure that may lead to incrimination or to the discovery of real evidence of an incriminating character: [Sorby v Commonwealth (1983) 152 CLR 281; 46 ALR 237; 57 ALJR 248] at CLR 310; ALR 259 per Mason, Wilson and Dawson JJ. Thus, the risk of exposure to criminal sanctions may be indirect: Reid v Howard at CLR 7; ALR 612 per Deane J.

17    A valid claim for the privilege against self-incrimination 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; [1978] 1 All ER 434 at 457; Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 392; [1981] 2 All ER 76; Sorby v Commonwealth (1983) 152 CLR 281 at 290; 46 ALR 237 at 242.

18    In Deputy Commissioner of Taxation v Shi [2021] HCA 22; 392 ALR 1 (Shi), Gordon J (with whom Kiefel CJ, Gageler and Gleeson JJ agreed) held that to make out a claim of privilege against self-incrimination, while a claimant does not need to reveal the alleged incriminatory material, they must make sufficient disclosure to make it reasonably apparent that the material is capable of being incriminating. Gordon J held at [30]:

What will be necessary to establish whether the information may tend to prove the commission of an offence will vary from case to case. The privilege may be claimed without requiring the person to explain fully how disclosure of the information would bring about the incriminating effect. To require the relevant person to go further would in at least some circumstances annihilate the protection that the section is designed to provide. However, the mere statement by the relevant person that they believe that disclosure of information will tend to incriminate them will rarely be sufficient to protect them from complying with the disclosure order, and it will not do so when other circumstances are such as to induce the court to believe that disclosure of that information will not really have that tendency.

19    Further, the claimant must demonstrate in any event that there is a real and appreciable risk of a prosecution; as Gordon J’s explained at [34]:

In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a ‘real and appreciable risk’ of prosecution if the relevant information is disclosed. The gist of the privilege is that disclosure of the information ‘would tend to expose the claimant to the apprehended consequence’. The ‘reasonable grounds’ enquiry requires the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person.

Consideration

20    I have considered the confidential affidavits of Ms Victoria Martin dated 28 January 2022 and Mr Stephen Williams dated 17 December 2021 (Confidential Affidavits). Having regard to the material within the Confidential Affidavits, I do not consider there to be a real and appreciable risk that disclosure of the Xero database would incriminate the First Respondent. I am also not satisfied that there is a likelihood or risk of steps being taken to prosecute the First Respondent. I am of this view for the reasons that follow:

(1)    The Confidential Affidavits, do not disclose any information which could reasonably lead to a “real and appreciable risk” of prosecution if the Xero database is disclosed to the Applicant. The Xero database merely contains financial records of the Nordburger business, none of which is incriminating on its face.

(2)    The First Respondent has not adduced any evidence of any related civil or criminal proceedings on foot or any evidence disclosing any contact from or interest of any relevant prosecutorial authority. There is no evidence that suggests that there is a possibility or likelihood of any prosecution.

(3)    The First Respondent has not, in my opinion, discharged the burden of proof that is required of her in order to enliven the privilege against self-incrimination in respect of the Xero database.

Disposition

21    For these reasons, the First Respondent’s claim to privilege against self-incrimination must be dismissed. I will order the First Respondent to discover the Xero database in its entirety, in an unredacted form.

22    The First Respondent will pay the costs of the application to claim privilege against self-incrimination in respect of the Xero database. The Applicant’s applications to strike out the First Respondent’s claim for privilege against self-incrimination as an abuse of process is dismissed with no order as to costs. The Applicant’s application to appoint a receiver to the Second Respondent is dismissed with no order as to costs.

Associate:

Dated:    3 March 2022