FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 2) [2023] FCA 1234

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ application for a stay be dismissed.

2.    Subject to further order, the reasons of the Court (save for paragraphs [1] to [7]) be suppressed on the Court file and not published to any person other than the parties and their legal representatives pending determination of the extant applications for confidentiality orders, any applications for confidentiality in respect of any part of the reasons, clarification of the applicants’ undertaking and costs.

3.    Subject to further order, paragraphs [1] to [7] of the reasons be suppressed on the Court file and not be published other than to the parties and their legal representatives until 25 October 2023.

4.    By 4pm, 24 October 2023, the parties are to inform the Associate to Cheeseman J whether any confidentiality application will be made in respect of paragraphs [1] to [7] of the reasons.

5.    Until further order, any person who accesses the reasons pursuant to Order 2 on behalf of the applicants, including any legal representative of the applicants, must not communicate, directly or through another person, with Dr Andrew Forrest AO or his legal representatives or any witness, lay or expert, involved in proceeding AM/663/2022 in the Magistrates Court of Western Australia.

6.    The proceeding be listed for case management to address the issues identified in Order 2 at 9.30am on 26 October 2023.

7.    The parties have liberty to apply.

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

REASONS FOR JUDGMENT

CHEESEMAN J:

INTRODUCTION

1    These reasons relate to an interlocutory application brought by the respondents, Meta Platforms, Inc. (formerly, Facebook Inc.) and Meta Platforms Ireland Limited (formerly, Facebook Ireland Limited), (together, Meta), to proceedings commenced by the Australian Competition and Consumer Commission (ACCC) and Rami Greiss, a delegate from the Australian Securities and Investments Commission (ASIC) (together, the Commission).

2    The central allegation of fact in the substantive proceeding is that since at least October 2017, Meta has, as a consequence of an advertising process with an automated self-service function, displayed advertisements on the Facebook platform targeted to Australian users featuring various public figures purportedly endorsing different investment schemes, typically involving trading in cryptocurrency (Celebrity Fake Endorsement Ads). The Celebrity Fake Endorsement Ads link to a landing page featuring a purported media article which includes references to a purported interview with the particular public figure who is said to use and/or endorse a cryptocurrency trading scheme utilising a particular trading platform. The landing page invites the user to sign up to that same trading scheme.

3    The Commission commenced the substantive proceedings against Meta on 18 March 2022, alleging contraventions of various provisions of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA) and, or alternatively, various provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). The provisions of the ACL that are alleged to have been contravened are ss 18, 29(1)(d), (e), (f) and (g), and 34. The provisions of the ASIC Act that are alleged to have been contravened are: ss 12DA(1), 12DB(1)(b), (c), (d) and (e), and 12DF(1). The Commission claims declaratory relief, pecuniary penalties, injunctive relief, an order for a compliance program, an adverse publicity order or an order for corrective advertising, and costs. The declaratory relief sought relates to conduct which is alleged to have occurred from October 2017.

4    The interlocutory application is for the proceedings to be stayed pending the final determination or disposal of the criminal proceeding commenced by Dr Andrew Forrest AO in the Magistrates Court of Western Australia against Meta Platforms or until further order of the Court. The Commission opposes the grant of a stay, submitting in essence that the application is premature at this stage and that other steps are available to mitigate any prejudice to Meta in the criminal proceeding.

5    Meta also seek various non-publication and non-access orders in relation to the Statement of Claim filed on 4 August 2022 (SOC), pending the final determination or disposal of the criminal proceeding. Meta relies on ss 37AF and 37AJ of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and rr 2.32(1)(b) and 2.32(3) of the Federal Court Rules 2011 (Cth). That application will be determined at the same time as the parties’ address on whether any part of these reasons should be temporarily suppressed while the criminal proceeding is pending, there being substantial overlap in the likely subject matter of the applications.

6    An earlier application for confidentiality and non-publication orders sought by Meta was decided in Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) [2022] FCA 1062 (ACCC v Meta (No 1)). Familiarity with the reasons in ACCC v Meta (No 1) is assumed for the purpose of these reasons.

7    For the reasons that follow, Meta’s application should be dismissed. The application is premature and fails to adequately allow for the protective mechanisms available to the Court to manage the competing prejudices in issue in relation to the two proceedings at this stage. I am not persuaded that the interests of justice require an immediate stay of all interlocutory steps. Active case management with an eye to ameliorating the risks identified by Meta on this application during the pendency of the criminal trial will enable the civil proceeding to continue to progress at this stage. In my view, this approach will serve the interests of justice by balancing the prejudice to the Commission that would otherwise be occasioned if there was an immediate stay of this proceeding, against the potential risk to Meta Platforms if protective orders are not in place in the civil proceeding to guard against prejudicing of Meta Platforms in its defence of the criminal proceeding.

BACKGROUND

The Civil Proceeding

8    The civil proceeding was preceded by an investigation by the ACCC which was on foot from at least July 2020. The investigation concerned potential contraventions of ss 18, 29(1)(e) and 29(1)(g) of the ACL arising by reason of the Celebrity Fake Endorsement Ads. The civil proceeding was commenced on 18 March 2022 and will not proceed to final hearing until late 2024 at the earliest.

9    In ACCC v Meta (No 1), Yates J gave an overview of the civil proceeding as follows:

5    Meta provides an online social network service (the Facebook service) which is accessible through the Facebook website and associated mobile applications (the Facebook platform). In Australia, approximately 18 million users access the Facebook service each month; 14 million users access the service each day.

6    The alleged contraventions are in respect of, or arise out of, the publication of “sponsored posts” (advertisements) on the Facebook platform relating to cryptocurrency investments. The advertisements, which are said to be targeted to Australian users of the Facebook service, involve “celebrity endorsement”, using well-known public figures. The Commission alleges that the advertisements contain words and images that represent that the public figures use or endorse the investment scheme being promoted. The Commission alleges that the promoted investment schemes are scams through which funds, paid by the investors, are misappropriated by those promoting the schemes. The Commission also alleges that the public figures, used for the “celebrity endorsement”, have not invested in or endorsed the schemes.

10    One of the public figures whose identity is used in the Celebrity Fake Endorsement Ads is Dr Forrest, the private prosecutor in the criminal proceeding.

11    The civil proceeding is directed to the protection of the public interest. The applicant regulators are collectively tasked with administrating laws directed to the attainment of public interest objectives including enhancing the public welfare through the promotion of competition and fair trading and providing protection for consumers, including consumers of financial services. The applicant regulators through this proceeding seek to protect the public from the risk of harm they allege to exist and to be ongoing as a result of Meta’s conduct. The applicant regulators maintain that the risk of harm to the public is aggravated by Meta’s decision to reduce the size of its workforce, thereby depleting its available resources to prevent the alleged harm continuing.

The Criminal Proceeding

12    The criminal proceeding was described by Yates J as follows:

11    Dr Forrest commenced the criminal proceeding against Meta Platforms, Inc. by filing a Prosecution Notice dated 31 January 2022. This was before the commencement of this proceeding.

12    The Prosecution Notice details three alleged offences under s 400.7(2) of the Criminal Code (being the Schedule to the Criminal Code Act 1995 (Cth)). The gravamen of these offences is dealing with property (here, a computer cluster) where there is a risk that the property will become an instrument of crime, in circumstances where the accused is reckless as to the fact of that risk. The offences are alleged to have been committed by Meta Platforms, Inc. in the period February to April 2019.

13    The trial of the criminal proceeding is anticipated to occur between around March to June 2024.

14    The investigation that gave rise to the civil proceeding preceded the institution of the criminal proceeding. The earliest compulsory request for information by notice under s 155 of the CCA (s 155 Notice) in evidence on this application was dated 31 July 2020. Further s 155 Notices followed during 2021. The last tranche of substantive responses from Meta Platforms appears to have been in March 2022, with two further documents produced on 20 July 2022, after the criminal proceeding had commenced.

Overlap in Factual Stratum

15    The parties agree that there is considerable overlap in the allegations made in the civil proceeding and in the criminal proceeding, with the allegations in the criminal proceeding being a subset of the subject matter and temporal period in the civil proceeding. In the criminal proceeding, the relevant person identified in the impugned advertisements is Dr Forrest (Forrest Fake Endorsement Ads) and the period is limited to February to April 2019, whereas in the civil proceeding Dr Forrest is but one of several persons identified in the Celebrity Fake Endorsement Ads and the relevant period spans from at least October 2017 and is ongoing. The accused in the criminal proceeding is Meta Platforms, whereas in the civil proceeding both Meta Platforms and Meta Platforms Ireland are respondents. The overlap between the two proceedings is addressed in more detail below.

EVIDENCE

Meta

16    The following affidavits and accompanying exhibits were relied on by Meta:

(1)    six affidavits of Mark James McCowan, solicitor on record for Meta and partner of the law firm Corrs Chambers Westgarth sworn respectively on 17 May 2022, 28 October 2022, 30 November 2022, 6 December 2022, 7 December 2022, 22 December 2022, and their accompanying exhibits; and

(2)    the affidavit of Stephanie Suzanne Brannen affirmed on 25 October 2022 and annexures SB-1 and SB-2.

The Commission

17    The Commission relied upon the three affidavits of Kevin James John Love, solicitor on record for the applicants and partner of the law firm Johnson Winter Slattery, affirmed on 18 November 2022, 7 December 2022 and 8 December 2022 (Love 3) and their accompanying exhibits and annexures 1 to 6 of the Commission’s reply submissions dated 12 December 2022.

18    Objections as to relevance were taken to three of the McCowan affidavits and to the Love affidavits, which in the main responded to the three McCowan affidavits. The parties adopted the sensible course of agreeing to these affidavits being provisionally admitted subject to relevance. In broad compass, conscious of the extant applications for confidentiality, the affidavits were concerned with evidence of communications between the Commission and the prosecutor’s representatives. Following the development of the argument on the application, I am satisfied that the evidence is relevant and should be admitted on this application. Meta also objected to a discrete paragraph of Love 3 on the basis that it contains opinion. I allowed the paragraph on the basis that I would treat it as a submission.

19    There was no cross-examination.

APPLICABLE PRINCIPLES

20    The authorities relevant to the grant of a stay of a civil proceeding in the face of an associated criminal proceeding were comprehensively reviewed and the applicable principles summarised by Moshinsky J in Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2019] FCA 964; 138 ACSR 42 (ASIC v ANZ) at [50] to [63], and repeated in Impiombato v BHP Group Limited [2020] FCA 350; 143 ACSR 301 at [121] to [136]. The principles were adopted and applied in 5 Boroughs NY Pty Ltd v State of Victoria (No 3) [2023] VSC 22 at [55] (Dixon J) and quoted with apparent approval on appeal: State of Victoria v 5 Boroughs NY Pty Ltd [2023] VSCA 101 (5 Boroughs Appeal) at [13] (Beach, Forrest and Hargrave JJA).

21    The parties were given opportunity to, and did, provide additional written submissions in relation to the decision in 5 Boroughs Appeal. Broadly, the parties accepted that the decision in 5 Boroughs Appeal affirmed the articulation of the applicable principles governing the stay of a civil proceeding pending a criminal proceeding relating to the same or similar subject matter by Moshinsky J in ASIC v ANZ, repeated in Impiombato. Meta sought to distinguish the application of these principles in 5 Boroughs as turning on the “particular, and unusual, facts” of that case whereas the Commission submits that there were significant parallels in both principle and application with these proceedings. I will return to the parties’ respective submissions based on the decision in the 5 Boroughs Appeal when considering whether it is in the interests of justice to stay the civil proceeding.

22    The Court has a wide power to stay a proceeding in the interests of justice. It is an incident of the Court’s power to control its own proceedings and finds its statutory support in s 23 of the FCA Act: ASIC v ANZ at [50]. The discretion to grant a stay is a wide one and the matters that might individually, or in combination, be relevant to the exercise of discretion are not rigid or closed: ASIC v ANZ at [63]; Impiombato at [135]. 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. The question for the Court is whether the interests of justice require a stay: Commissioner of the Australian Federal Police v Zhao [2015] HCA 5; 255 CLR 46 at [36]; Impiombato at [125]. In considering what the interests of justice require, the Court must weigh the risk of real prejudice to the accused against the prejudice that a stay of the civil proceeding would occasion: Zhao at [47], [50]; Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission [2016] FCAFC 97; 242 FCR 153 (CFMEU v ACCC) at [22] (Dowsett, Tracey and Bromberg JJ). I note that the Court of Appeal in 5 Boroughs Appeal was invited not to follow CFMEU v ACCC on this point but declined to do so on the basis that there was no reason to doubt the correctness of the Full Court’s decision: at [70]. If the applicant for the stay establishes relevant prejudice as a matter of fact, then it is necessary for the Court to weigh the competing prejudices: 5 Boroughs Appeal at [70].

23    Noting that the factors identified in the authorities are not a prescriptive or an exhaustive statement of all potential considerations, or the weight to be attached to them, and drawing particularly on the summary given by Moshinsky J in ASIC v ANZ at [53] to [63] and repeated in Impiombato at [125] to [135], the relevant applicable principles which I adopt and apply are as follows:

(1)    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;

(2)    each case must be judged on its own merits — whether prejudice is such as to render a criminal trial unfair is a question of fact that must be evaluated with care in the particular circumstance of each case;

(3)    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 of the criminal proceeding such that the interests of justice require the civil proceeding to be stayed until conclusion of the criminal proceeding, or further order;

(4)    in evaluating as a matter of fact whether the risk of prejudice is real, the following factors, when present, maybe relevant:

(a)    prejudice to the accused’s right to silence or privilege against self-incrimination;

(b)    the possibility of publicity that might reach and influence jurors;

(c)    an applicant for a stay may not need to identify the specific matters of prejudice before the Court contemplates staying a proceeding; and

(d)    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) that may ameliorate prejudice, subject to the possibility that such orders may be inadequate to protect an accused’s rights;

(5)    relevant prejudice may arise even where there is not a strict correlation between the identity of the applicant for the stay and that of the criminal accused — an example being where the criminal accused is a material witness in, but not a party to, the civil proceeding;

(6)    in an appropriate case, the proceeding may be allowed to proceed to a certain stage, for example, being set down for trial, and then stayed pending determination of the criminal proceeding; and

(7)    if granted, a stay should operate only for the minimum period required in the interests of justice.

24    I acknowledge the continuing relevance of the guidelines described by Wootten J in McMahon v Gould (1982) 7 ACLR 202 at 206-207, approved by the Full Court in CFMEU v ACCC at [26], but note that, as Moshinsky J observed, while these guidelines may still offer some assistance, they need to be read in light of the subsequent cases: ASIC v ANZ at [51].

OUTLINE OF THE PARTIES’ RESPECTIVE POSITIONS

25    The application for a stay was vigorously contested. The parties filed successive waves of submissions which served to expose that the controversy was narrower in compass than had been originally canvassed between them.

26    Meta seeks a stay on the basis there is a risk of prejudice to Meta Platforms in the conduct of the criminal proceeding. Meta Platforms submits on what it describes as a “one time basis” to jurisdiction for the criminal proceeding. The criminal proceeding is anticipated to be listed for trial between about March and June 2024. The issue as to whether the criminal proceeding will be heard summarily (without a jury) has not been resolved. For that reason the issue of potential prejudice occasioned by the jury being exposed to publicity about the civil proceeding, while not at the forefront of Meta’s application, is live.

27    A large part of Meta’s submissions were predicated on the assumption that unless stayed at this time, the civil proceeding would necessarily progress to final hearing, with defences and evidence being filed in the interim. On this basis, Meta submits that filing a defence and serving affidavits would prejudice Meta Platforms’ conduct of the criminal proceeding in circumstances where the factual substratum of the criminal proceeding is wholly contained in that of this proceeding. Meta’s primary approach was, at least initially, somewhat inflexible — Meta did not grapple with the potential for close case management to be effective in assuaging the concerns they raise in relation to the risk of prejudice to Meta Platforms in its defence of the criminal proceeding.

28    Meta’s application is principally informed by the submission that for the Court to permit the civil proceeding to continue would be to undermine the fundamental principle of accusatorial justice. Meta submits that Meta Platforms would have to make an “invidious choice” between undertaking an active defence of this proceeding and enjoying its right to silence in the criminal proceeding: see ASIC v ANZ, [72]. Meta submits that what is at risk is that Meta Platforms will be deprived of “fundamental rights inherent in the accusatorial system of criminal justice” including, “the right to put the prosecution to proof”, “the right not to be required to give notice of the accused’s defence to the criminal proceedings before the close of the prosecution case” and “the right to have the opportunity to assess the strength of the prosecution evidence led at trial before electing whether to mount a defence (and, if so, on what basis)”. In support of this statement of “fundamental rights”, Meta relies on X7 v Australian Crime Commission [2013] HCA 29; 248 CLR 92 at [57] to [59] French CJ and Crennan J, [101] to [105] Hayne and Bell JJ, Kiefel J agreeing at [157]. Meta observe that unlike the privilege against self-incrimination, these rights are available to a corporate accused.

29    Meta has led evidence of its intention, but for the existence of the criminal proceeding, to run a positive defence, by which it will lead evidence going to, at least, the following matters:

(1)    whether and the extent to which Meta Platforms had knowledge of:

(a)    various matters alleged in the SOC concerning Celebrity Fake Endorsement Ads shown on the Facebook service in the period from at least September 2017; and

(b)    specific Celebrity Fake Endorsement Ads shown on the Facebook service;

(2)    the nature of Celebrity Fake Endorsement Ads shown on the Facebook service and the methodologies used by bad actors who submit such ads to seek to circumvent Meta Platforms’ review and enforcement processes;

(3)    the viability of certain “Reasonable Safeguards”, which the applicants allege:

(a)    were within Meta Platforms’ power or technological capabilities; and

(b)    would have prevented or significantly reduced the prevalence of Celebrity Fake Endorsement Ads being shown on the Facebook service;

(4)    Meta Platforms’ approach to reviewing ads submitted to the Facebook service, including the efficacy of the relevant processes in detecting Celebrity Fake Endorsement Ads;

(5)    Meta Platforms’ approach to enforcement in response to breaches of its advertising policies;

(6)    Meta Platforms’ investigation of new or alternative integrity measures to combat Celebrity Fake Endorsement Ads; and

(7)    guidance and training given to human reviewers of advertisements submitted to the Facebook service.

30    Meta’s starting position is that if the proceeding is not stayed, then Meta would be required to file a defence, put on evidence on issues going to liability which are also in issue in the criminal proceeding, give discovery, and participate in the trial of the present proceeding.

31    Meta submits that Meta Platforms is prejudiced in the criminal proceeding by reason of the following factors:

(1)    The forensic advantage accruing to the prosecutor derived from direct or derivative use of information and or evidence gleaned from Meta’s conduct of its defence of civil proceeding;

(2)    The forensic disadvantage to Meta Platforms arising from:

(a)    being “locked in” to a version of events in the civil proceeding from which it cannot credibly depart at the trial of the criminal proceeding, or otherwise being constrained in its conduct of the criminal proceeding by reason of its conduct of civil proceeding;

(b)    being put to the choice between defending civil proceeding and taking steps, including for example, advancing a positive defence, which are inconsistent with its rights in the criminal proceeding;

(c)    being put to the choice between making admissions in the civil proceeding or enduring the costs associated with a comprehensive discovery exercise; and

(d)    the risk of jury prejudice as a result of publicity relating to evidence adduced in the civil proceeding.

32    Meta submits that the “invidious choice” with which Meta Platforms is confronted is particularly acute in this case because in the civil proceeding Meta bears the evidentiary burden of establishing that the impugned representations were not misleading by virtue of ss 29(1)(e) and (f) and 29(2) of the ACL and so is compelled to mount a positive defence on this issue in this proceeding. In the context of the concurrency of the two proceedings, Meta submits that the practical effect is to place a positive burden of proof on Meta Platforms as the (otherwise) criminal accused.

33    In response, the Commission submits that the stay application is premature at this stage because the Court has tools at its disposal by which this proceeding may be progressed in a way that adequately manages the risk of prejudice to Meta Platforms in the criminal proceeding and appropriately balances the prejudice that would be occasioned by halting the progress of the civil proceeding. The Commission submits that the Court may make any orders it considers to be necessary to prevent the use or derivative use in the criminal proceeding of material filed and/or served by Meta in this proceeding: s 37AF of the FCA Act and r 2.32(3)(b) of the Rules. The Commission confirms that they would consent to such orders. The Commission submits that taking this course will not unduly burden the principle of open justice in the interlocutory phase of this case and in circumstances where the orders would only be in place until the determination of the criminal proceeding, which is expected to be prior to the likely hearing of the civil proceeding.

34    The Commission emphasises that the present civil proceeding has the additional dimension of being directed to protection of the public and that this is significant when weighing the inevitable prejudice that will be occasioned by delaying the proceedings. The public interest arises from the alleged ongoing harm which is the subject of this proceeding as set out at paragraph 11 above. The Commission also submits that it would not only be prejudiced by delay and the usual deterioration of the quality of available evidence over time but that this prejudice would be aggravated by Meta’s planned restructuring and lay-off of over 10% of its workforce. Meta disputes the characterisation of the public interest, submitting that despite injunctions being sought by the Commission, there is nothing to suggest that the injunctions would be effective in preventing any of the incidents of scamming targeted by the Commission. Meta further submits that any adverse effect on the public interest as a result of a temporary stay is offset by the “recognised deterrent purpose” of the criminal proceeding, which will tend to protect the public interest to the extent that Meta by its own conduct has not already done so.

35    In response to Meta’s principal submission — that to permit the civil proceeding to continue would undermine the fundamental principle of accusatorial justice — the Commission submits that the principle will not be undermined if Meta is required to serve their defences, file evidence and continue with certain other interlocutory steps, under cover of protective orders. The Commission submits that in order to suggest the risk of prejudice is such as to require a stay in the interests of justice Meta has had to project well into the future — to the time that evidence will be given in open Court — but by then any criminal trial may well be over. The Commission further submits that Meta’s submissions based on the principles which flow from the accusatorial system of justice are overstated and fail to appropriately take into account the limits to those principles. The Commission submits that the authorities upon which Meta rely, including X7, in support of their contentions are far removed from the circumstances of this case. The authorities cited by Meta in the main involve compulsory examinations and the unlawful dissemination of the transcripts of such examinations to prosecuting authorities.

36    By way of contrast, the Commission submits that in the present proceeding: (a) no individual is at risk of prosecution; (b) no compulsory examination of any employee of Meta has taken, or will take, place; (c) there is no suggestion that any transcript of an examination or material filed in the civil proceeding will end up in the hands of the private prosecutor in the criminal proceeding; and (d) Meta Platforms has not remained silent because it has already provided a large amount of information to the ACCC in response to s 155 Notices, including responses provided after the criminal proceeding commenced.

37    The Commission submits that because Meta Platforms has already given substantial responses to the s 155 Notices, it has effectively already committed itself to a version of events from which it cannot credibly depart at the criminal trial. For this reason, the Commission submits that the purported harm that Meta contends will arise if this proceeding is not stayed will not arise because Meta Platforms has already been obliged to commit itself to a version of events.

38    The s 155 Notices are not limited to document production but extend to supplying information in response to targeted requests for information. The information provided under cover of the s 155 Notices relates to both Meta Platforms and Meta Platforms Ireland on subject matter that is relevant to both the civil and criminal proceedings. As noted above, the s 155 Notices and responses thereto span the period before and after commencement of the criminal proceeding.

39    I interpolate to note that as a corporation, Meta Platforms cannot avail itself of the privilege against self-incrimination or exposure to a penalty. Further, the information provided by it in response to the s 155 Notice is not rendered inadmissible in evidence against it in any criminal proceeding under s 155(7): cf information provided in response to a s 155 Notice by an individual which is not admissible in a criminal proceeding against that individual subject to certain exceptions. The Commission notes that in the present circumstances where the criminal proceeding is brought as a private prosecution, the CCA does not authorise disclosure of protected information in the form of the s 155 Notice responses, to the prosecution: 155(12).

40    The Commission submits that it is relevant when assessing the competing prejudices for the purpose of this stay application and the utility of possible protective orders to take into account that Meta Platforms has already committed to a version of events in its responses to the s 155 Notices. The Commission submits in the whole of the circumstances the appropriate course is for the Court to make interim protective orders to avoid the dissemination of material garnered in the civil proceeding that is potentially prejudicial to Meta Platforms in the criminal proceeding while permitting the civil proceeding to advance, at least at this stage. The Commission submits that it would be appropriate for the Court to order that any particulars be requested by Meta and given by the Commission, and if that process gives rise to an application for interim confidentiality orders, then such an application can be determined when it arises. The Commission submits that Meta’s defence(s) should be served but not filed, and interim suppression orders should be made to limit access to the defence(s) prior to finalisation of the criminal proceeding. The Commission further submits that depending on the view that is taken in relation to the service of defence(s), the Court could progress to hearing any application for particular discovery to be given before the close of pleadings, such discovery to be confined as the Court thinks fit following determination of any application for discovery, if contested. The Commission acknowledges that the availability of interim suppression or non-publication orders must be considered at each stage and the making of any such orders must necessarily weighed against the interest in open justice. The Commission submits that to adopt a cautious incremental course in this way would be consistent with the overarching purpose of s 37M of the FCA Act.

41    Meta disputes that Meta Platforms’ responses to the s 155 Notices commit it to a version of events. Meta submits that the responses to the s 155 Notices were in response to compulsory notices and that through its responses to these notices, Meta Platforms did not advance a positive case and nothing in the information supplied indicates the positive case that Meta may wish to run in the criminal proceeding. Meta submits that Meta Platforms’ responses to the s 155 Notices are materially different in terms of pinning Meta’s colours to the mast to conducting a positive defence of the civil proceeding. Meta submits that there is nothing in the s 155 responses to questions put by the ACCC that would lock Meta in in the way that a positive defence would. Meta asserts that there are statutory preclusions on the use of the s 155 Notice material provided by Meta Platforms in the relevant criminal proceeding, which are stronger than that which may be provided by any suppression or non-publication orders.

42    In reply, Meta appeared to accept that there is no reason why they should further delay in requesting any particulars they require of the SOC but resisted being required to serve defences and submitted that to order discovery before the close of pleadings would not be in accordance with s 37M of the FCA Act. Meta contends that the only reason discovery is being sought in advance of the close of pleadings is because of the stay application. Meta submits that to order discovery now may result in inefficiency, including a potential for further discovery to be required after the pleadings close by reference to the issues in dispute which only crystallise at that time. Meta also submits that in the circumstances of this case, the responses to s 155 Notices and compulsory production of documents will make it difficult in any event for the Commission to obtain orders for expansive discovery on the part of the respondents. Meta submits that there would be a real question as to whether discovery is necessary given that Meta has produced a substantial number of documents and responses to the s 155 Notices. Meta submits that if faced with a discovery application at this time, Meta Platforms will be faced with another "invidious choice" between making admissions in this proceeding in order to limit discovery at this stage or being forced into an expensive and time-consuming discovery process in advance of filing a defence. Meta says that such a process is at risk of ultimately having to be repeated.

43    In relation to the possibility of the Court making protective orders, Meta submits that such orders will be inadequate to protect Meta Platforms against the risk of prejudice to its rights as an accused. Meta submits that the principle of open justice will still ordinarily require reporting to be allowed and that this will necessarily limit the adequacy of any protective orders. Again, Meta’s focus is principally directed to the final hearing. The weight of considerations of open justice in an interlocutory context, where the suppression or non-publication is on an interim basis, may be significantly reduced, depending on the nature of the interlocutory application at hand.

44    Meta submits that the fact that Meta Platforms has been compelled to provide some information pursuant to s 155 Notices does not detract from its entitlement to keep its defence secret until the close of the prosecution case.

45    It became apparent over the course of the oral hearing that a specific concern of Meta’s in relation to the efficacy of any protective orders that may be made was as to any interaction and transmission of information between the Commission and the prosecution team in the criminal proceeding. Meta was concerned about the potential for information derived from Meta Platforms in this proceeding to flow from the Commission, directly or indirectly, to the prosecution team. Meta pointed to the fact that as a result of this application, they had become aware that a lay witness intended to be called by, and an expert witness engaged by, the prosecution in the criminal proceeding had also been approached by the Commission as potential witnesses to be called in this proceeding. Meta submits that the potential overlap in the witnesses to be called in the two proceedings results in a potential for transmission of information, including through inadvertence, between the Commission and the prosecution. Meta submits that this demonstrates that the risk of prejudice is real and that prejudice may manifest while the proceedings continued concurrently in ways which are subtle and which Meta is ill-placed to detect.

46    In response, the Commission led additional evidence detailing what had occurred in relation to the lay witness and the expert and that the Commission had terminated its dealings with each of them. Meta did not suggest that there had been any actual flow of information that was inappropriate. Meta did not contend that any information obtained by the ACCC pursuant to the s 155 Notices had been provided to the prosecution. The Commission led additional evidence from Mr Love in respect of the expert witness, Mr Love deposes that:

(1)    the expert witness was engaged on 23 September 2021 by way of a written retainer;

(2)    in a conference on that same day with the expert, no information or documents obtained by the ACCC pursuant to the s 155 Notices, nor any other document, was provided to the expert and to the extent that questions that were put to the expert which conveyed such information, that information was in the public domain;

(3)    the ACCC’s retainer with the expert was then terminated on 25 November 2022; and

(4)    the contract was formally terminated because the expert’s services were not being used, there was no intention or plan on the part of the ACCC to further engage with the expert, and formally terminating the contract would prevent Meta from relying on the existence of an ongoing retainer as a factor in favour on their stay application.

47    Meta notes that the expert’s engagement was terminated on the same day Meta’s legal representatives wrote to the Commission’s legal representative seeking disclosures of communications with the expert. Meta submits that prior to termination of the expert’s retainer in the civil proceeding, the expert had been questioned on issues which had not been the subject of consideration by the prosecution. In response, the Commission demonstrated by reference to documents from the prosecution that contrary to Meta’s submissions, the prosecution team was in fact alive to the issue discussed and in addition, there was at the relevant time, information in the public domain relating to the issue.

48    In respect of the lay witness, Mr Love deposes that:

(1)    the lay witness came to the attention of the Commission after her story was featured in a news article and was first approached on 21 June 2021;

(2)    the Commission and their legal representatives had worked with the lay witness to prepare the witness’ draft affidavit, including via a conference call on 20 August 2021. No draft affidavit has been provided or shown to the lay witness;

(3)    no information obtained by the ACCC pursuant to the s 155 Notices was disclosed to the lay witness; and

(4)    the Commission instructed their solicitors not to continue taking any steps with the lay witness in relation to calling that person as a potential witness while the criminal proceeding remains on foot.

49    To guard against the risk of the inadvertent disclosure of information in this proceeding to the prosecution, the Commission gave an undertaking that those of the Commission’s staff and the Commission’s legal representatives who are part of the team with the day-to-day conduct of this proceeding will not engage in communications with Dr Forrest or his representatives while the criminal proceeding is on foot. In response to the Commission’s undertaking, Meta submits that any orders short of a temporary stay should be predicated upon the regulators giving an undertaking, or failing that, being directed, not to communicate whether directly or through their solicitors or counsel with Dr Forrest or his representatives or any witness or expert engaged to assist or give evidence in the criminal proceeding.

50    Finally, Meta submits that in the event that the Court is not minded to grant a stay at this time, then the Court should proceed with caution and make orders in small incremental steps in the proceeding, such as orders for the making of any requests for, and the supply of, further and better particulars of the existing pleadings and that appropriate interim suppression orders should be made at the end of each stage. Against this eventuality, Meta reserved their right to renew the stay application at a future time.

CONSIDERATION

51    For the reasons that follow, in my view, Meta’s application should be dismissed. I am not persuaded that the interests of justice require that the proceedings should be immediately stayed such that no further steps may be taken until the conclusion of the criminal proceeding.

Extent of Overlap between the proceedings

52    In assessing whether the continuation of the civil proceeding poses a risk of prejudice in the concurrent criminal proceeding, it is necessary to consider the degree of overlap in the subject matter between the two proceedings. The degree of overlap is also relevant to the assessment of the efficacy of any protective orders that the Court may make in lieu of granting a stay as a means of managing the risk of prejudice to the criminal accused.

53    As mentioned above, the central allegations in both proceedings are that [REDACTED]. The civil proceeding covers a longer span of time, a greater number and diversity of Fake Celebratory Endorsement Ads and a range of public figures whose identities were allegedly misused than the criminal proceeding. The factual circumstances underlying the alleged offences in the criminal proceeding are wholly subsumed within this proceeding.

54    There is also substantial commonality in terms of the background against which the disputed facts will be assessed in each proceeding. [REDACTED].

55    Meta submits that it is inevitable that Meta Platform’s defence, evidence and information arising in this proceeding will be potentially relevant to prove the charges in the criminal proceeding. The Commission is correct to acknowledge that there is a substantial overlap between the two proceedings. The overlap may be illustrated as follows.

56    First, in the criminal proceeding, the prosecutor must prove beyond reasonable doubt that the Meta Platforms [REDACTED]. Similarly, in this proceeding, the technological background is pleaded at SOC [8] to [9] and technical matters relating to the uploading, screening, approving, targeting and delivery of Celebrity Fake Endorsement Ads are pleaded as material facts: SOC [11] to [42].

57    Secondly, in the criminal proceeding, the prosecutor must prove beyond reasonable doubt that [REDACTED]. Similarly, in this proceeding, [REDACTED].

58    Thirdly, in the criminal proceeding, the prosecutor must prove beyond reasonable doubt that, [REDACTED]. Similarly, in this proceeding, Meta Platforms’ awareness of the risks alleged in respect of the Celebrity Fake Endorsement Ads is in issue. Moreover, a key plank of the Commission’s case is that Meta Platforms failed to employ “Reasonable Safeguards” or give warnings. These allegations are in turn based on allegations as to the steps allegedly taken by Meta Platforms (SOC [37] to [47]), representations allegedly made by Meta Platforms (SOC [48] to [50], [80] to [81]), Meta Platforms’ alleged failure to prevent Celebrity Fake Endorsement Ads (SOC [82] to [108]) and to give warnings (SOC [109] to [110]). [REDACTED].

59    Fourthly, the prosecutor in the criminal proceeding [REDACTED].

60    [REDACTED]. Evidence Meta Platforms may wish to lead in response to the allegations in this proceeding, concerning its awareness of the risk posed by Celebrity Fake Endorsement Ads and its alleged failure to take the allegedly available “reasonable safeguards”, would also tend to reveal matters of [REDACTED].

Potential Prejudice to Meta

61    Against this considerable factual overlap, Meta submits that as a criminal accused, Meta Platforms should not be required to provide any assistance to the prosecutor in the criminal proceeding in proving the elements of the offence. So much may be accepted as consistent with the accusatory principle by which the prosecution bears the burden of proving its case beyond reasonable doubt. Meta further submits that Meta Platforms faces an invidious choice between deciding whether to prejudice its rights as an accused in the criminal proceeding or compromising the manner in which it defends the civil proceedings.

62    The starting proposition is that in the criminal proceeding, every element of the offence is in issue and must be the subject of evidence and submission by the prosecutor and may be the subject of evidence and submission by Meta Platforms. Meta notes that the prosecutor’s case against Meta Platforms does not contain evidence from any current or former employee and does not include documentary evidence in the form of internal documents of Meta Platforms. Meta says that it may readily be concluded that disclosure of Meta Platforms’ defence and evidence in this proceeding may arm the prosecutor with information which he does not currently have and to which he would not otherwise be privy or entitled. Meta further submits that if Meta Platforms’ defence was available to the prosecutor, it would:

(1)    identify areas of which the prosecutor was not aware and in relation to which he could make further inquiries;

(2)    signal the strengths and weaknesses of the evidence available to Meta Platforms in its defence of the criminal proceeding; and

(3)    identify the lay and expert evidence available to Meta Platforms and on which it is likely (if it goes into evidence) to rely upon in the criminal proceeding.

63    Meta raise the potential for jury prejudice as a further risk weighing in favour of a temporary stay, on the basis that there is a risk that evidence adduced in the civil proceeding will receive publicity and come to the attention of potential jurors and preclude a fair trial in the criminal proceeding. Although it is unknown whether Meta will press for a jury trial in the criminal proceedings, I indicated at the hearing that I will proceed on the assumption, in Meta’s favour, that there will be a jury.

64    I am not persuaded by Meta’s submissions that the civil proceeding should be stayed in the interests of justice for two principal reasons.

65    First, they are premised on an assumption that there is a real risk that the prosecutor will obtain access to the product of any further interlocutory processes in this proceeding, including having access to Meta’s defence(s). As explained below, appropriate protective orders are capable of nullifying that premise, particularly in circumstances where the product of the further interlocutory processes envisaged is not in the nature of compulsory testimony by the criminal accused, and to the extent that, for example, Meta’s defence(s) may include admissions, those admissions may be conditionally made, as well as being subject to protective orders. Similarly, the second “invidious choice” that Meta identifies in relation to being put to a choice between “an expensive and time-consuming discovery process and a likely second discovery process at a later date” or notifying the Commission of any admissions it might wish to make in its defence is arguably capable of being managed by appropriate case management orders. It is inappropriate to draw the conclusion that Meta contends for in the absence of a concrete application for discovery if and when any such an application is made. The availability of discovery may well be curtailed by the investigative process that preceded the institution of the civil proceeding. Alternatively, specific targeted discovery may be justified, before or after close of pleadings. To seek to draw a conclusion at this stage, in the absence of a concrete proposal, is speculative.

66    Relatedly, even assuming that the criminal proceeding will be a jury trial, it is unclear how the proposed interlocutory steps of filing a defence, resolving requests for better particulars and/or undertaking discovery could result in jury prejudice when supplemented by protective orders of the kind contemplated.

67    Secondly, I am not persuaded that the presumptive prejudice which Meta submits Meta Platforms will suffer in the criminal proceeding is such that the interests of justice require an immediate stay of the civil proceeding. My reasons for reaching that conclusion follow but at the outset it bears emphasis that the issue on this application is whether the interests of justice dictate that this proceeding be immediately stayed. That requires the competing prejudices attendant on the decision of whether or not to stay the civil proceeding to be weighed. The assessment of whether the prejudice to the accused is such as to give rise to a real risk that the criminal proceeding will be unfair is a fact intensive and fact dependent question which must be evaluated in all the circumstances of the particular case.

68    Here, the critical issue as to the interests of justice falls to be determined at a particular point in time. The application has been brought at a relatively early stage of the civil proceeding, well in advance of the time for filing and service of evidence and in advance of the proceeding being set down for final hearing, and in circumstances where the Court may make protective orders and the Commission has undertaken to appropriately quarantine those working on the civil proceeding. To refuse the stay at this stage to permit some further interlocutory steps to be taken does not preclude Meta from bringing a fresh application at an appropriate time.

Potential risk of information in the civil proceeding being provided to the prosecution

69    Meta points to the risk that information obtained from Meta Platforms may flow directly or indirectly from the Commission to the prosecutor as a potential infringement of the accusatory principle. Meta accepts that there is nothing improper in information flowing in the opposite direction — by the Commission obtaining information from the prosecutor for use in the civil proceedings.

70    Meta did not suggest that there would be deliberate provision of information by the Commission to the prosecutor but said such information could be disclosed inadvertently given the insidious nature of the risk.

71    Meta also relies on what was said by Hayne J in Lee v NSW Crime Commission [2013] HCA 39; 251 CLR 196 (Lee 1) at [81]:

81.     No doubt, it is important to notice that an examination under s 31D(1) was to be conducted before the Supreme Court or an officer of the Court prescribed by rules of court. It is to be assumed that the Court or its officer would act to prevent oppression of the person being examined and would act to prevent misuse or abuse of the process of examination, whether by limiting or precluding publication of what transpires at the examination, or otherwise. But if the trial of the person being examined is pending, the Court (or the officer of the Court) cannot know, and cannot predict, what might harm the defence of that person at trial. Those matters are unknown to, and unknowable by, the Court (or its officer) for the simple reason that the Court (or its officer) does not know, and cannot be told, what are or will be the accused's instructions to his or her lawyers at trial.

72    The context in which Hayne J made these remarks was in respect of an examination conducted before the Supreme Court or officer of the Court where it was submitted that the Court or its officer would be able to act to prevent misuse or abuse of the process of examination. By contrast in this proceeding, it is unclear how prejudice might arise in respect of Meta engaging with the request for particulars and discovery processes where such materials are not usually available to non-parties and appropriate confidentiality orders can be made, if necessary to supplement the Harman undertaking, to ensure that the product of these processes are not published or disclosed to the prosecution in the criminal proceedings. As to service of defence(s) which it is anticipated will include a positive defence, the proposal from the Commission is that Meta’s defence(s) should be served, not filed, and be subject to suppression and non-publication orders, as well as access restrictions in accordance with the Commission’s undertaking, which is addressed below.

73    I accept Meta’s submission that the overlap of lay and expert witnesses between the two proceedings may give rise to a risk of information in this proceeding flowing to the criminal prosecution, directly or indirectly, and possibly unintentionally, via the witnesses in their interactions with the respective legal teams. I am satisfied on the basis of the evidence led by the Commission that the risk of this occurring came to light sufficiently early to nip that potential in the bud. The Commission has demonstrated that the interactions with the two overlapping witnesses has not at this stage resulted in disclosure of material that was not otherwise publicly available or of which the prosecution was not aware. [REDACTED].

74    When I raised with senior counsel for the Commission the potential for inadvertent transmission of information from the civil proceeding to the prosecutor, the Commission’s response was that they will submit to orders requiring them to quarantine personnel working on the civil proceeding from any communications with the prosecutor or his representatives during the period while the criminal proceeding remains on foot. Mr Love deposed to the Commission’s agreement to quarantining its solicitors and staff in this way.

75    The steps taken by the Commission to jettison the overlapping witnesses until the conclusion of the criminal proceeding and the undertaking given by the Commission to quarantine their team from contact with Dr Forrest’s prosecution team sufficiently addresses this risk of direct and indirect or inadvertent leakage from the civil proceeding to the criminal proceeding going forward. To the extent that Meta sought to distinguish the decision in 5 Boroughs on the basis that unlike in 5 Boroughs here the risk of derivative use has been established, I am satisfied that the risk has been addressed such that this is not a basis on which to distinguish 5 Boroughs.

76    I expect that the Commission in its dealing with any potential witness, lay or expert, in the civil proceeding will confirm at the earliest opportunity that the potential witness is not involved in the criminal proceeding. The undertaking should also be expanded to make clear that information obtained in the civil proceeding will not be used in any way to assist the prosecutor. That is to say that the Commission should expressly acknowledge that the effect of the quarantine is to prohibit any direct or derivative use of the information obtained in the civil proceeding in the criminal proceeding. Finally, the undertaking given by the Commission should be expanded to make this aspect explicit. In addition, it should be made plain that the undertaking is also given by ASIC, as well as the ACCC, and that ASIC has in place corresponding quarantine arrangements as those put in place by the ACCC. I am not otherwise inclined to implement the broader restraint that Meta seeks to impose. I am satisfied that the restraint imposed by the undertaking offered by the Commission, clarified in the way I have noted, is sufficient. As to the mechanics of how individuals within the Commission and their legal team commit to being bound by the undertaking, that is a matter in respect of which the parties can confer and submit short minutes.

77    The prospect of orders being made to prevent disclosure should not lightly be discounted, although the position can never be the subject of an ironclad guarantee because of the spectre of inadvertent disclosure. However, where protective orders are directed and confined to the pre-trial period of the civil proceeding the risk may be managed in such a way that the interests of justice will not require the civil proceeding to be stayed. In this regard, I note that inherent in the Commission’s primary stance — that the stay application is premature — is an acknowledgement that if contrary to expectation the criminal proceeding has not been determined prior to the civil proceeding being set down for hearing the issue of a stay will likely be revisited. The Commission is not seeking protective orders, such as closing the Court to the public in the final hearing and / or suppressing media coverage of the hearing or suppressing the Court’s reasons for final judgment. Meta’s submission that Zhao stands for the proposition “enabling concurrent civil and criminal proceedings to be prosecuted does not qualify as a proper reason for departing from the principle of open justice” is not to the point.

78    The circumstances of the present application are markedly different to those in Ransley v Commissioner of Taxation [2016] FCA 778 (Jagot J). In that case, the accused was an individual facing committal proceedings, protected by the privilege against self-incrimination. The Commissioner of Taxation sought to resist a stay application in circumstances where there was a question as to whether the witness would qualify for the grant of a s 128 certificate under the Evidence Act 1995 (Cth) and the Commissioner had declined to undertake not to cross-examine the witness on the subject matter relevant to the criminal charges. The protective regime advanced by the Commissioner centred on the civil tax appeal being heard while the criminal proceeding was pending on the basis that the Court would make orders to close the Court and for non-publication and suppression. The prejudice that decisively weighed in favour of the grant of a stay was rooted in both the value of protecting the witness’ rights, including the privilege against self-incrimination, and of ensuring open justice. The prejudice that weighed against the grant of a stay was that occasioned by delay. However, the issue of delay of the civil proceeding was offset to a significant extent by the Commissioner’s ability to recover the amount alleged to be owing in any event.

79    The protective orders contemplated in this application are directed to balancing the competing prejudices by enabling the civil proceeding to progress under close case management if, and until such time as, the balance shifts to favour a stay in the interests of justice. It is consistent with the approach in Impiombato and 5 Boroughs, upheld on appeal.

80    The potential for the protective orders to be made which would facilitate the civil proceeding progressing, at least, to the stage where Meta serve their defence(s) without constraining Meta Platforms’ forensic choices in the criminal proceeding may be illustrated by the approach taken by the primary judge in 5 Boroughs and approved by the Victorian Court of Appeal. Having considered the bases on which Meta maintains that 5 Boroughs is relevantly distinguishable, I do not agree. While there are points of distinction between the present circumstances and those which pertained in 5 Boroughs, those distinctions do not detract from the availability of a protective regime being put in place in a civil proceeding in the interlocutory phase as a means of appropriately managing the competing prejudices that arise in the context of a stay application in a way that does not offend the principle that the accused can not be compelled to assist the prosecution.

81    In 5 Boroughs, the State, the applicant for the stay, was required to provide its proposed defence on terms providing for a confidentiality regime, and thereafter contemplated that any application for suppression and non-publication orders could be determined at that time by reference to the proposed defence that had been provided to the plaintiff on confidential terms. The confidentiality orders made by the primary judge prohibited the disclosure of the proposed defence, save to certain specified individuals. Those individuals were not permitted to disclose or use, in any manner, the information the subject of the confidentiality regime presently in place. The orders extended to a prohibition on derivative use. As the Court of Appeal noted, in addition to the confidentiality regime, restricted access arrangements and prohibition on derivative use, it would be open to the defendant to stipulate that a proposed defence providing that some admission made in it is only made for the purpose of the civil proceeding and in order to save time or expense.

82    The Court of Appeal found that the primary judge’s decision to refuse a stay in 5 Boroughs was plainly correct: [60]. The Court of Appeal further observed that the orders made by the primary judge were made in furtherance of the companion principle (at [71]):

71.      … They were specifically designed to prohibit any information produced by the first defendant from being provided to the prosecution in the criminal proceedings against the State. Thus there was no disregarding or overriding of the principle that an accused cannot be compelled to assist the prosecution in the discharge of its burden of proof. Moreover, Reid involved an order to make an affidavit which might directly incriminate the accountant in any criminal proceedings. Here, a proposed unverified defence is all that has been presently ordered.

83    In Impiombato, Moshinsky J resolved that it was not necessary for the purposes of the stay application to decide whether BHP Ltd should be required to file a defence in the civil proceeding and whether any such order should be tailored to the circumstances of that case (for example, relieving BHP Ltd of the requirement to fully respond to certain allegations): [148]. That was in circumstances where BHP Ltd had led evidence as to the difficulties of preparing a defence without assistance from certain individuals who were named as defendants in the criminal proceeding, and who enjoyed the privilege against self-incrimination. What is relevant for present purposes is that the potential for protective orders to be made at a future time was acknowledged.

84    In the circumstances of this case, it may similarly be possible to craft protective orders at an appropriate time which do not derogate from the companion principle, and which facilitate the continued joint progression of the two proceedings if and until such time as the risk of prejudice to Meta Platforms in the criminal proceeding outweighs the prejudice to the Commission in staying the civil proceeding. At this time, I am not satisfied that the interests of justice fulcrum favours an immediate stay due to the potential leakage of information from the civil proceeding. The civil proceeding is capable of being progressed at this time in a way that will not prejudice the conduct of defence of the criminal proceeding.

85    In terms of next steps, the starting point will likely be requests for and responses to particulars if that stage has not been completed. Thereafter, the matter may progress to either discovery before the close of pleading (whether by agreement or on application) or alternatively, to case management orders for the preparation of defence(s) to be served pursuant to a confidentiality regime tailored to the circumstances of the civil proceeding.

86    As the argument unfolded there was some equivocation by the parties in relation to whether the next appropriate step would be to timetable the close of pleadings under the cover of protective orders. Ultimately, Meta settled on the position that, in the event that a stay was not granted, the appropriate way forward was to proceed to timetable the close of pleadings, including making provision for the filing of a reply, protected by non-publication and suppression orders to protect Meta Platforms’ interests in the criminal proceeding “to the greatest extent possible” and to protect material which may otherwise cause prejudice if disclosed. The Commission indicated that they would consent to such orders where necessary. It was common ground that refusal of the stay would not prejudice Meta’s entitlement to renew their application for a stay at a later time. On this basis, it appears that there is some potential that the parties may reach agreement on future timetabling orders to progress the proceeding. The issue of the appropriate case management orders that should be made to take the matter forward are within the province of the docket judge. It is not necessary to determine next steps for the purpose of this application.

Presumptive prejudice – forensic disadvantage

87    Meta submits that separate from any advantage gained by the prosecutor actually gleaned from the civil proceeding, Meta will be subject to “presumptive” prejudice if they are required to file a defence in the civil proceeding.

88    Meta submits that “(f)orensic disadvantage to an accused, and consequent forensic advantage to a prosecutor, thus flows by reason of the risk that a criminal accused can become “locked in” to a version of events from which they cannot credibly depart at the trial of the criminal proceeding, or otherwise be constrained in their conduct of the criminal proceeding by reason of their conduct of civil proceedings. Such prejudice would necessarily arise where, as would be the case if no temporary stay were granted here, in advancing a positive defence or in filing or adducing evidence in a civil proceeding a criminal accused sets out its answer to allegations which are also at the heart of the Criminal Proceeding.”

89    Meta relies on X7 at [124] and Strickland v Director of Public Prosecutions (Commonwealth) [2018] HCA 53; 266 CLR 325 at [75] to [77] (Kiefel CJ, Bell and Nettle JJ) to ground their argument about presumptive prejudice which is said to arise from Meta Platforms committing to a version of events and thereby constraining its forensic choices in the criminal proceedings.

90    Meta submits that:

“This Court must, instead, approach this case on the basis of the explicit and binding acceptance by the High Court that a criminal accused suffers a forensic disadvantage even where material it has been required to produce in advance of a criminal trial is kept secret, and even where that material cannot be used directly or indirectly for investigating or prosecuting the matters charged. Whilst that authority may be uncomfortable for the Applicants in circumstances in which they commenced this proceeding knowing what was alleged in the criminal proceeding, there is no principled basis upon which this Court could decline to apply it.”

91    I do not accept that submission. The authorities on which Meta relies turned on the circumstance of a criminal accused being subject to compulsory examination after charge. The decisions did not concern an application to stay a civil proceeding in the face of an overlapping criminal proceeding. The “explicit and binding acceptance” by the High Court was in respect of compelled testimony. The procedural steps contemplated in this proceeding, under cover of protective orders, do not arise in the context of compulsory testimony.

92    In X7 at [124] to [125], Hayne and Bell JJ (with whom Kiefel J agreed) said:

124.    Even if the answers given at a compulsory examination are kept secret, and therefore cannot be used directly or indirectly by those responsible for investigating and prosecuting the matters charged, the requirement to give answers, after being charged, would fundamentally alter the accusatorial judicial process that begins with the laying of a charge and culminates in the accusatorial (and adversarial) trial in the courtroom. No longer could the accused person decide the course which he or she should adopt at trial, in answer to the charge, according only to the strength of the prosecution’s case as revealed by the material provided by the prosecution before trial, or to the strength of the evidence led by the prosecution at the trial. The accused person would have to decide the course to be followed in light of that material and in light of any self-incriminatory answers which he or she had been compelled to give at an examination conducted after the charge was laid. That is, the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given at the examination. The accused person is thus prejudiced in his or her defence of the charge that has been laid by being required to answer questions about the subject matter of the pending charge.

125.    As has been explained, if an alteration of that kind is to be made to the criminal justice system by statute, it must be made clearly by express words or by necessary intendment. If the relevant statute does not provide clearly for an alteration of that kind, compelling answers to questions about the subject matter of the pending charge would be a contempt.

93    X7 was not a case involving an application to stay a civil proceeding. X7 concerned whether the Australian Crime Commission Act 2000 (Cth) authorised an examiner to require a person charged with a Commonwealth indictable offence to answer questions in a compulsory examination about the subject matter of the charged offence. The High Court held by majority that it did not (Hayne and Bell JJ, Kiefel J agreeing).

94    Meta submits that the passage at [124] of X7 was affirmed and / or adopted in Lee 1 by French CJ at [54], Kiefel J at [163], Hayne J at [79] to [83] and Bell J at [264]. Kiefel J, Hayne J and Bell J were in the minority and therefore their reasons do not form part of the ratio decidendi. In any event, Lee 1 was again a case which concerned the interpretation of a statute and the scope of powers granted to require a person to attend a compulsory examination. Lee 1 did not concern a stay application.

95    Meta also submits that the passage at [124] of X7 was then affirmed at [41] of Lee v The Queen [2014] HCA 20; 253 CLR 455 (Lee 2) which I extract below:

41.     Basten JA, with whom the other members of the Court of Criminal Appeal agreed, did recognise that the second appellant's evidence before the Commission could be used to forewarn the prosecution witness Pak and to permit clarification of his evidence. It could also be used indirectly, to aid the prosecutor's preparation for the cross-examination of the second appellant, in the event that he gave evidence. In this regard, it will be recalled that the second appellant's solicitor gave evidence before the Court of Criminal Appeal that the prosecution's possession of the second appellant's evidence foreclosed that possibility. An accused person may be prejudiced in his or her defence because he or she can no longer determine the course to take at trial according only to the strength of the prosecution case [X7 v Australian Crime Commission [2013] HCA 29; (2013) 248 CLR 92 at 142-143 [124], 146 [136]]. ...

(emphasis added and footnote incorporated)

96    When read in the context of the entire paragraph, it is clear that the Court was addressing a situation where evidence given at the compulsory examination could be used directly or indirectly by the prosecution to assist with the criminal proceedings. Indeed, the appellant’s solicitor gave evidence that the prosecution’s possession of the second appellant’s evidence foreclosed the possibility that the second appellant would give evidence at trial. The statement relied upon by Meta, and emphasised in the above extract, is conditional and must be read in context. In Lee 2 the situation was one of real forensic disadvantage suffered by an individual protected by the privilege against self-incrimination who had been compelled to give evidence before the Commission, a record of which had been provided to the prosecution, and as a result, he had concluded that his opportunity to give evidence in his criminal trial was foreclosed to him. In those circumstances the Court’s reference to X7 as support for the proposition that an accused person may be prejudiced in his or her defence because he or she can no longer determine the course to take at trial according only to the strength of the prosecution case does not support Meta’s contentions as to the breadth of the proposition for which it contends is supported by the reference to X7 at [124].

97    The passage of X7 upon which Meta relies was distinguished in 5 Boroughs Appeal for reasons that are apt to the present application (at [66]):

66.     As the judge, however, observed, X7 was not a case involving an application to stay a civil proceeding. X7 concerned the interpretation of statutory provisions permitting an examination of a person facing pending charges, in circumstances where such an examination had the capacity to constrain forensic choices that might subsequently be made by the accused. The present case is different. First, no examination of an accused person is going to take place — all that is contemplated is the filing and serving of a proposed defence, under a confidentiality regime. Secondly, in the absence of more specific evidence than that relied upon by the first defendant in support of its application for a stay, it is not readily apparent how the filing of a proposed defence might relevantly constrain forensic choices which might subsequently be made in criminal proceedings. One can easily envisage a proposed defence providing that some admission made in it is only made for the purpose of the civil proceeding and in order to save time or expense.

98    Notwithstanding the submission advanced by Meta that on this application they have supplied specific evidence which illustrates how filing their defence(s) may limit Meta Platforms’ forensic choice in the criminal proceeding, in my view, these observations resonate with the present circumstances. As the Commission have noted no examination of an accused person has or will take place. If Meta is required to provide their defence(s), it would be open to them to qualify any admissions they may make in the civil proceeding with a view to narrowing the issues in dispute and streamlining interlocutory steps, including the scope of any discovery, as well as confining the evidence led from witnesses, lay and expert. During the period while the criminal proceeding is on foot, a confidentiality regime may be put in place, which along with the quarantine arrangements would serve to protect Meta Platforms’ freedom of forensic choice in the criminal proceeding. Further, Meta may apply for an order that they be relieved from the parts of the claim against them until after conclusion of the criminal proceeding.

99    Meta also relies on Strickland at [75] to [77] (Kiefel CJ, Bell and Nettle JJ):

75.    The Court of Appeal were not correct, however, in rejecting the primary judge's conclusion that the prosecution derived a forensic advantage from the examinations. If nothing else, the prosecution derived the forensic advantage, which the examinations were expressly calculated to achieve, of compelling the appellants to answer questions that they had lawfully declined to answer and thereby locking the appellants into a version of events from which they could not credibly depart at trial. For the same reason, the primary judge was right to hold that, with the exception perhaps of Galloway, the appellants suffered a forensic disadvantage as the result of the examinations. They suffered the forensic disadvantage of being locked into a version of events from which they could not credibly depart at trial.

76.    As Hayne and Bell JJ observed (66) [(66) - (2013) 248 CLR 92 at 142-143 [124] (Kiefel J agreeing at 152 [157]). This reasoning was adopted by this Court in Lee v The Queen (2014) 253 CLR 455 at 466-467 [32]. See also Lee [No 1] (2013) 251 CLR 196 at 236 [79] per Hayne J; at 261 [159] per Kiefel J; at 292-293 [264]-[265] per Bell J.)] in X7 (No 1) in relation to an unlawful compulsory examination conducted post charge, even if the answers given at a compulsory examination are kept secret, and so cannot be used directly or indirectly by those responsible for investigating and prosecuting the matters charged, the requirement to give answers after being charged fundamentally alters the accusatorial judicial process that begins with the laying of a charge and culminates in the accusatorial and adversarial trial in the courtroom. The examinee can no longer decide the course which he or she should adopt at trial according only to the strength of the prosecution's case as revealed by the material provided by the prosecution before trial or to the strength of the evidence led by the prosecution at trial:

“The accused person would have to decide the course to be followed in light of that material and in light of any self-incriminatory answers which he or she had been compelled to give at an examination conducted after the charge was laid. That is, the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given at the examination. The accused person is thus prejudiced in his or her defence of the charge that has been laid by being required to answer questions about the subject matter of the pending charge.”

77.    Similar considerations apply where, as here, a person is unlawfully subjected to a pre-charge compulsory examination conducted for the extraneous, unlawful purpose of assisting the AFP to compel the person to give answers to questions about offences of which he or she is suspected and in respect of which he or she has declined to be interviewed. Even if the answers given at such a compulsory examination are kept secret, the unlawful requirement to give answers in respect of an offence of which a person is suspected, or in relation to which he or she is a person of interest, fundamentally alters the accusatorial process for the investigation, prosecution and trial of that offence by unlawfully compelling the person to provide the prosecution with information.

(footnote incorporated)

100    Meta cites Strickland as expressly affirming the passage from the reasons of Hayne and Bell JJ in X7 at [124]. Meta also submits that other than Gageler J at [140], the X7 forensic choice principle was not qualified or disapproved.

101    Strickland must be read in its context. I do not accept that it is authority for the broad proposition for which Meta contends, namely that “presumptive prejudice” arising from a theoretical constraining of an accused’s choice compels the grant of a stay of civil proceedings. The observations of Gageler J, albeit in dissent, in Strickland at [142] emphasise that even in the context of compulsory examination of an accused, “not every deprivation of a forensic choice which would otherwise be available to a criminal defendant from whom testimony has been involuntarily extracted is properly to be characterised as giving rise to substantial unfairness” for the purpose of determining whether a criminal proceeding should be stayed. The conduct of a compulsory examination may have different consequences depending on its nature and extent and depending on the nature of the application before the Court. In the present case, Strickland does not determine whether the requirement to serve a defence in civil proceedings with the benefit of protective orders would necessarily prejudice the accused so as to necessitate a stay in the interests of justice of a civil proceeding, such as this. Meta’s submission directed to the inadequacy of protective orders to safeguard the rights of the accused does not distinguish between protective orders proposed for the cautious progression of this proceeding on the basis that there may come a time when it is necessary to stay the proceeding and the wholesale continuance of the civil proceeding to finality.

102    Strickland involved circumstances of gross impropriety in which the Australian Crime Commission had conducted compulsory examinations of a number of individuals at risk of criminal prosecution where:

(1)    AFP officers watched the examinations without disclosing their presence to the individuals: Strickland at [50];

(2)    the examination transcripts and other documentary material was illegally provided to prosecutors and an unaccountable number of AFP officers who were witnesses in or involved with the criminal prosecutions, making it impossible to identify the persons to whom the material had been disseminated: Strickland at [80]; and

(3)    the examinations had been conducted in respect of subject matter in respect of which the individuals had exercised their right to decline a cautioned police interview and thereby had been conducted for the very purpose of achieving a forensic advantage for the prosecution in foreseen future crimination prosecutions: Strickland at [62].

103    I accept the submission advanced on behalf of the Commission that neither Keane J nor Edelman J (who together with Kiefel CJ, Bell and Nettle JJ formed the majority in Strickland) expressly approved the relevant passage in X7. Keane J and Edelman J, each writing separately, agreed with the orders of the plurality on the basis that to do otherwise would bring the administration of justice into disrepute, regardless of whether the appellants had endured a forensic disadvantage.

104    In respect of X7, Lee 1, Lee 2 and Strickland, Meta submits that:

That these cases derive from a different factual context does not diminish the force, or the binding precedent, of the principle which was expressly stated in X7 at [124] and adopted at [157] and repeatedly affirmed thereafter.

105    One of the difficulties with this submission is that the principle derived from X7 at [124] is not as broad as Meta contends. Contrary to the way in which Meta’s submissions were framed, Meta is in fact seeking to extend the principle expressed in X7 beyond its original context. It is because Meta seeks to extend the principle in X7 that attention must be focussed on whether the present legal and factual context warrants the extension of the conclusion reached in X7. That was recognised in 5 Boroughs as discussed above. In addition, I do not accept Meta’s submission that the forensic choice principle in X7 has been “repeatedly affirmed thereafter”. The Commission submits that subsequent authority in the High Court does not been conclusively establish that presumptive prejudice by constraint of forensic choice, as first held in X7, enjoys majority support in the subsequent decisions of the High Court. I recognise the force of the Commission’s submission, however given that this is not a case involving compulsory examination and is directed to an interim stay of a civil proceeding it is not necessary to reach a concluded view on this issue.

106    The Commission submits that there has not been a case where a stay has been granted on the sole basis of presumptive prejudice. Meta countered relying on Ortensio Lucciano (a pseudonym) v R [2021] VSCA 12; 287 A Crim R 529 (McLeish, Niall and Forrest JJA) and ASIC v ANZ.

107    In Oretensio the civil trial had concluded before the criminal trial proceeded. A stay application was dismissed by the trial judge and after a conviction recorded, the conviction was vacated on the basis of a substantial miscarriage of justice, which was conceded by the DPP. As noted by the Court, Ortensio raised a novel question of whether, where the civil proceeding about the very subject matter of the criminal trial having been heard and determined, the risk of prejudice has come to pass, such that the criminal trial was so unfair that there has been a substantial miscarriage of justice: at [25]. There are two points of note. First, as noted by the Court, there was no challenge to the trial judge’s disposition of the stay application: at [22]. Secondly, the facts of Ortensio are far removed from this proceeding. Accordingly, the Court’s treatment of the presumptive prejudice principle from X7 (at [27] to 29]) must be understood in the relevant context, namely where the entirety of evidence and discovery in the civil proceedings had concluded with the result that those framing the indictment could do so with the benefit of the applicant’s evidence: at [28]. Further, beyond presumptive prejudice, the Court held that there was actual prejudice, where the transcript of the civil trial had been used in preparing for the criminal trial and the particular evidence that the applicant had given in the civil proceeding had been deployed against him in the criminal trial: at [31]. I do not accept that the determination of the stay application in Ortensio is relevantly analogous to circumstances of the present application.

108    In ASIC v ANZ, Moshinsky J granted a temporary stay to ANZ where two witnesses (Messrs Moscati and Needham) who were likely to be important if not crucial to ANZ’s defence of the civil proceedings were willing to assist ANZ, but not until the conclusion of the overlapping criminal proceedings in which they stood accused. Accordingly, ANZ was placed in the position of either having to conduct its defence without their assistance or make a decision to compel them to give evidence at trial, and thereby cause prejudice in the criminal proceedings. The stay granted in ASIC v ANZ was on the basis that the bank had established that there was a real risk of prejudice to ANZ in the criminal proceeding, in that ANZ would need to choose between:

(1)    conducting its defence without the assistance of the relevant witnesses — effectively defending the proceeding with “one arm behind its back”: at [71]; or

(2)    compelling the relevant witnesses to give evidence at the hearing of the civil proceeding which would likely result in disclosure of evidence to be given in ANZ’s defence of the criminal proceedings and thus deprive ANZ of rights arising from the accusatorial process applying to criminal trials, in circumstances where the relevant witnesses' evidence in chief and cross-examination would involve a wide range of matters that would be dealt with in the criminal proceedings: at [76] to [78].

109    In the latter scenario, while ANZ would have the benefit of the witnesses’ evidence at trial, it would not have the benefit of their assistance before trial: at [80].

110    I accept the Commission’s submission that ASIC v ANZ case does not stand for the proposition that a stay should be granted where there is solely presumptive prejudice as opposed to actual prejudice arising from disclosure.

111    Counsel for the Commission submits that Lee 2 involved an underlying assumption that protective orders would be sufficient to enable a criminal trial to proceed and that assumption means that it cannot have been accepted that what Hayne and Bell JJ in X7 carried the day. I understand this submission to mean that the ‘presumptive prejudice’ as described by Hayne and Bell JJ in X7, arising by mere reason of having given an account may, but without more is insufficient to automatically, alter the accusatorial principle of the criminal justice system. Counsel for the Commission submits that the footnote to the last sentence of paragraph 32 of Lee 2 which included, inter alia, a reference to X7 at [124], cites [124] as support for the proposition so cited and read in context does not stand as approval of the broader propositions contained in paragraph [124] of X7. I accept that submission.

Potential prejudice occasioned if civil proceeding is stayed

112    Where prejudice has been established by a party seeking a stay, that prejudice must be weighed against the corresponding prejudice that would be suffered if a stay were to be imposed: 5 Boroughs Appeal at [70] citing Zhao. The starting position for any civil proceeding is that the plaintiff is entitled to prosecute their action. It is a grave matter to interfere with this entitlement by staying the proceedings. The defendant is not entitled as of right to have a civil proceeding stayed because of a pending criminal proceeding. The onus is on the defendant in the civil proceeding to demonstrate that such interference is just and convenient: CFMEU v ACCC at [26].

113    I accept that the applicant regulators bring the civil proceeding in the public interest. By this proceeding the applicant regulators seek relief to restrain the alleged ongoing conduct by the defendants which is asserted to have caused harm to members of the public. The proceeding as a civil penalty proceeding also serves the public interest by reason of its deterrent objective and effect. Contrary to Meta’s submission, the fact that criminal proceedings also serve a deterrent purpose does not detract from this proposition. [REDACTED].

114    The Commission submits that the longer the delay, the more harm to the public is likely by reason of the conduct. Meta reply by asserting that it forms no part of the Commission’s case that bad actors could or should have been eliminated from the Facebook service. Further, that the injunctive relief sought by the Commission does not go so far. That may be so, but it misses the point. The Commission contends that Meta could and should have done more to address the situation. The suite of injunctive relief sought by the Commission is informed by that contention. Meta may be correct in that the civil proceeding may not eliminate the threat but that is not to say that if the regulators succeed in the civil proceeding they will not obtain relief that materially reduces or curtails the harm. To keep the civil proceeding advancing while the criminal proceeding is pending, until such time as the interests of justice shift to dictate that the civil proceeding be stayed, will truncate the period after the conclusion of the criminal proceeding when the civil proceeding will likely be listed for hearing. In balancing the competing prejudices, these are matters to which I afford significant weight.

115    In addition, to this added dimension of prejudice if the proceeding is stayed, the well-established prejudice associated with delay are also present, including the inevitable deterioration of the quality and availability of evidence, as observed by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 at 551.

Conclusion – the application must be dismissed

116    In weighing the competing prejudices, I am not satisfied that the interests of justice at this time require an immediate stay of all interlocutory steps in the civil proceeding.

117    In the circumstances of this case, the matters raised by Meta can be managed in the course of case managing the proceeding. The determination of what interlocutory steps should be ordered, and the appropriate form of such orders, should not be determined by reference to broad generalities, but should be considered in the context of the specific timetabling steps that are advanced by the parties and the specific terms of the protective orders contemplated. These are matters which it is not necessary to decide on this application. It is sufficient that I am satisfied that there are other steps that may be taken in the proceeding under cover of relevant protective measures without undermining Meta Platforms’ fundamental rights in the criminal proceeding. Those steps may include the supply of particulars, provision of defence(s), perhaps on terms as dispensation from the requirement for a full response, and or discovery in some form.

CONCLUSION

118    For these reasons, the application to stay the proceeding must be dismissed. It will be necessary to hear from the parties in respect of the extant issues relating to confidentiality, any issues of confidentiality arising in respect of these reasons, clarification of the applicants’ undertaking and as to costs. I will make mechanical orders to facilitate this occurring.

Associate:

Dated:    23 October 2023