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DFC of T v DE VONK

Judges: Foster J

Hill J
Lindgren J

Court:
Full Federal Court

Judgment date: Judgment delivered 4 December 1995

Hill & Lindgren JJ

The appellant, the Deputy Commissioner of Taxation, appeals against the judgment of a judge of this Court to the extent that it was decided that a proposed interrogation by officers of the Australian Taxation Office of the respondent, Mr de Vonk, pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (``the Act''), could be in contempt of the District Court of Western Australia before whom a prosecution of Mr de Vonk is pending. Mr de Vonk cross-appeals against the judgment to the extent to which it was held that Mr de Vonk was not entitled to refuse to answer questions put to him on the grounds that his answers to those questions might tend to incriminate him. He also claims that the decision of the Deputy Commissioner to interrogate him was an abuse of power and should be set aside.

On 15 February 1994 Mr de Vonk was charged along with five others with three offences. The first offence with which he was charged was conspiracy to defraud the Commonwealth, contrary to s 86A of the Crimes Act 1914 (Cth). The second and third counts alleged conspiracy to commit an offence against a law of the Commonwealth, namely the Financial Transactions Reports Act 1988, contrary to s 86(1)(a) of the Commonwealth Crimes Act . It seems that Mr de Vonk and four others were partners in a partnership known as the Sunset Gold Mining Syndicate. The first of the three charges alleges a dishonest representation to the Australian Taxation Office, that the income of that partnership was exempt income.

Three days after the indictment, Mr de Vonk was served with a notice under s 264 of the Act requiring him to attend and give evidence concerning his income or assessment and that of the partnership for the period 1 July 1989 to 30 June 1993. Subsequently Mr de Vonk offered, through his solicitors, to answer any questions which the officers may wish to put to him once the matter of the criminal charges pending in the District Court in Perth had been finalised. That offer, repeated during the course of the hearing was, however, rejected.

Mr de Vonk sought judicial review of the decision to issue the notice under s 264, pursuant to the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth). In support of this application for review a number of matters were raised. Of these, three only remain, being matters the subject of the appeal and cross-appeal.

The first of these matters was disposed of quite briefly in the judgment appealed against. His Honour was not prepared to find, having regard to all the circumstances, that the notice under s 264 was issued with an improper purpose. As to the second of the matters (the subject of the cross-appeal) his Honour held, following two earlier single judge decisions of this Court in Stergis v FC of T 89 ATC 4442 (Hill J) and Donovan v FC of T 92 ATC 4114 (Wilcox J) that the common law privilege against self-incrimination had been abrogated, either expressly or by necessary implication. As to the third matter (the subject of the appeal), his Honour was of the view that to permit questions to be put covering the same area as that potentially to be traversed in the criminal trial might constitute an interference with the administration of justice and amount to contempt. Because no questions had as yet been put to Mr de Vonk his Honour declared that the conduct of an interrogation prior to the hearing might, depending upon the specific questions asked and all other relevant circumstances, constitute a contempt of the court before which such charges were to be heard and that accordingly the decision to ask such questions was not authorised by s 264 of the Act. In so holding his Honour expressed the view that the legislature had not expressly or by necessary implication legislated so as to permit questions to be asked where in the circumstances the asking of such questions might constitute a contempt of court.

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Was there an improper purpose?

Section 264 of the Act is in the following terms, so far as is relevant:

``(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority -

  • (a) to furnish him with such information as he may require; and
  • (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto.

(2) The Commissioner may require the information or evidence to be given on oath and either verbally or in writing, and for that purpose he or the officers so authorized by him may administer an oath.

(3) ...''

Section 264, unlike its companion section 263, does not expressly qualify the power conferred upon the Commissioner as being exercisable only for the purposes of the Act. None the less it may readily be accepted that where a coercive power such as s 264 has been conferred, that power may only be exercised bona fide for the purpose for which it was conferred (cf
O'Reilly & Ors v Commissioners of the State Bank of Victoria & Ors 83 ATC 4156 at 4162; (1982-1983) 153 CLR 1 at 48 ).

If nothing else appeared but that a notice given under s 264 was issued three days after criminal charges had been brought in circumstances where the charges were tax- related, it might readily be inferred that a purpose of the issuing of the notice was to aid the Commissioner in obtaining further evidence in support of the criminal charges. It may be noted that while ss 3C and 3D of the Taxation Administration Act 1953 (Cth) would prohibit disclosure to a prosecutor or a court in most circumstances, s 3E would permit the disclosure of information obtained, inter alia , by the exercise of powers under s 264 of the Act to a law enforcement agency where there had been what the legislation refers to as a ``serious offence''. Further, voluntary communication of the information to a court is not prohibited if the prosecution is a ``tax-related offence''. Suffice it to say, having regard to the provisions of s 3E of that Act, that while any offence triable on indictment is a ``serious offence'', only the first of the charges, that is to say that related to s 86A of the Crimes Act , would be a ``tax-related offence''.

Affidavit evidence was, however, filed on behalf of the Commissioner from a Mr Ross, an Audit Manager in the Australian Taxation Office at whose instance the notice under s 264 had been issued. In his affidavit he said, among other things, that he had approved the issue of the notice:

``... for the purposes of the Act and not for the purpose of gathering evidence for use in the criminal proceedings pending against the Applicant.''

In a second affidavit this statement was substantially repeated in the following paragraph:

``The Applicant is still required to attend and give evidence for the purpose of determining the assessable income of the Applicant and the Sunset Gold Mining Syndicate for the purpose of the Income Tax Assessment Act 1936 and not for the purpose of gathering evidence for use in the criminal proceedings pending against the Applicant.''

Mr Ross was not cross-examined. In these circumstances the learned trial judge was not prepared to find that the notice was issued with an improper purpose. This was so notwithstanding other evidence which suggested that the audit of the income tax affairs of the partnership had been completed.

It may be noted that the evidence of Mr Ross was expressed in terms which, while negating the suggestion that the sole purpose of issuing the notice was to obtain evidence in connection with the criminal proceedings, may be thought to have left open the question whether that may nevertheless have been one of the purposes. It would suffice to invalidate the notice if one of the purposes for which it was issued was an improper purpose provided that such purpose was a not insignificant purpose.

In our view, however, it would be conducive of injustice for such an inference to be drawn adverse to Mr Ross in a circumstance where he has not been cross-examined and where the

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inference has not been put to him. This is no more than a matter of fundamental fairness. If it is intended to suggest something which is directly or by inference contrary to a witness's testimony or which has not been covered by that testimony, then an opportunity must be given to the witness to meet the case which is proposed to be raised so that the witness has an opportunity to explain or destroy that case:
Browne v Dunn (1894) 6R 67 and see the discussion of the rule in the judgment of Hunt J in
Allied Pastoral Holdings Pty Ltd v FC of T 83 ATC 4015 ; (1983) 1 NSWLR 1 and in that of Kirby P (with whom Mahoney and Clarke JJA agreed) in
Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 (CA).

In these circumstances his Honour correctly refused to find that the notice issued under s 264 was issued for an improper purpose.

The privilege against self-incrimination

It is the genius of the common law that it gave rise to judge-made rules protecting the citizen in response to perceived abuses of fundamental rights and freedoms. One such rule was the right of the individual to remain silent in circumstances where his or her testimony might tend to incriminate. As McHugh J points out in
Environmental Protection Authority v Caltex Refining Co Pty Ltd (1992-1993) 178 CLR 477 , the so-called privilege against self- incrimination arose in the seventeenth century as a result of dissatisfaction with the practices of the Council of Star Chamber and the Court of High Commission (see at 543-544). Certainly by the end of the reign of Charles II it was accepted that an accused person might refuse to answer a question which might tend to incriminate him.

Those critical of the modern ability of the common law to protect the rights of individuals who seek now to espouse the entrenchment of a Bill of Rights into the Constitution, point to the concomitant and alleged weakness of the common law, namely, that it is, subject to any rights which may be found expressly or by implication in a written constitution, subject to the overriding supremacy of Parliament. Thus it remains open at any time for Parliament to legislate common law rights out of existence.

While it is accepted that fundamental common law rights may be abrogated by Parliament, the courts will not lightly presume that Parliament intended so to do.

The principles to be applied have been enunciated in a series of decisions in the High Court commencing with
Mortimer v Brown (1971) 122 CLR 493 and concluding with
Hamilton v Oades (1989) 166 CLR 486 . In the last of those cases Mason CJ (at 495) said:

``The privilege against self-incrimination can only be abrogated by the manifestation of a clear legislative intention. The intention may none the less be demonstrated by reference to express words or necessary implication.... But the privilege is not lightly abrogated, and the phrase `necessary implication' imports a high degree of certainty as to legislative intention.''

Although in Hamilton v Oades Deane and Gaudron JJ dissented in the result, their dissent was not a dissent from the statement of principle as expressed by Mason CJ in that case. Their Honours, in their joint judgment (at 500-501), express the principle in the following terms:

``The rules of statutory construction require a clear expression of legislative intent before a provision will be held effective to abrogate or limit a privilege as fundamental as the privilege against self-incrimination... In the present case that intent is made manifest by the words of s. 541(12).... An intent to abrogate or limit the privilege may also be made manifest by the purpose of the provision in question and the public interest which it is intended to serve...''

The language of s 541(12) of the Companies (New South Wales) Code considered in Hamilton v Oades admitted of no argument so far as the privilege against self-incrimination was concerned. The legislative intent was unequivocal. Sub-section (12) provided:

``A person is not excused from answering a question put to him at an examination held pursuant to an order made under sub-section (3) on the ground that the answer might tend to incriminate him...''

In Mortimer v Brown there was no explicit statutory abrogation of the privilege. Section 250 of the Companies Act 1961 (Q.) required an examinee to ``answer all such questions as the Court puts or allows to be put to him''. The High Court held unanimously, by reference to the character and purpose of the provision, that the privilege against self-incrimination had been abrogated. It was in the public interest and

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in furtherance of the honest conduct of the affairs of companies that those concerned with such affairs be compellable to answer questions. So too in the context of bankruptcy the privilege gave way to the requirement that the bankrupt make a full disclosure of his affairs, cf
In re Atherton [ 1912] 2 KB 251 and
In re Paget [ 1927] 2 Ch 85 . However, the fact that the legislation renders a statement made under coercive power inadmissible will not of itself suffice to reveal an intention to abrogate the privilege if the context otherwise does not require that result:
Sorby v The Commonwealth (1983) 152 CLR 281 .

Some assistance is given in the joint judgment of Mason ACJ, Wilson and Dawson JJ in
Pyneboard Pty Ltd v Trade Practices Commission (1982-1983) 152 CLR 328 at 341 in determining whether the privilege is impliedly excluded. Thus their Honours said:

``The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings.''

In Pyneboard the issue was whether a corporation or person served with a notice under s 155 of the Trade Practices Act 1974 (Cth) might refuse to answer questions relying upon the privilege against exposure to a civil liability to penalties. Section 155(5) was in the following terms:

``A person shall not -

  • (a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it;...''

Sub-section (7) of the same section referred directly to self-incrimination but in circumstances where the privilege referred to was concerned with incrimination in criminal proceedings rather than exposure to a civil liability. The provisions of sub-sec (5) were said by Mason ACJ, Wilson and Dawson JJ to be significant as being:

``... quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise.''

Their Honours continued (at 343):

``Moreover, it is apparent that the purpose of conferring the power and imposing the obligation is to enable the Commission to ascertain whether any contravention of the Act has taken place, or is taking place, and to make the information furnished, the documents produced and the evidence given admissible in proceedings in respect of contravention of the Act, a purpose which would be defeated if privilege were available. As in Mortimer ... the comment may be made that the provision is valueless if the obligation to comply is subject to privilege. Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Pt IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions. The consequence would be that the provisions of Pt IV could not be enforced by successful proceedings for a civil penalty under s. 76(1).''

There is much to be said for the view that the context of a coercive power to require the answer to questions in a revenue statute would ordinarily abrogate the privilege against self- incrimination, even without the use of language expressly stating that the privilege has been abrogated. This appears to have been the view adopted in the United Kingdom, cf
Commissioners of Customs and Excise v Harz [ 1967] 1 AC 760 , a case concerning s 20(3) of the Finance Act 1946 (UK) and its successor, s 24(6) of the Purchase Tax Act 1963 (UK), which conferred investigative powers upon the Commissioners of Customs and Excise with respect to goods subject to purchase tax, see too
Commissioners of Customs and Excise v Ingram [ 1948] 1 All ER 927 (CA) also in the context of s 20(3) of the Finance Act 1946. In the latter case, in a passage to which Hill J referred in Stergis , Lord Goddard said (at 929):

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``The very object of the Finance Act , 1946, in the sections which relate to this matter, is to give to the Crown the power of investigating a person's accounts and so forth to see whether he is defrauding the Revenue by not paying that which he ought to pay. To my mind, no new principle here is introduced into the law. It is said that this is compelling a man to incriminate himself or putting an onus on a man to show that he has not been committing an offence, but, it is quite a commonplace of legislation designed to protect the revenue of the Crown, as it is realised that all the information must generally be within the knowledge of the taxpayer or the subject, to put an onus on him or to oblige him to do certain things which may have the effect of incriminating him... It is said that when a man is called on under s. 20 to produce his documents, his books, invoices or accounts, or whatever they may be, he is entitled to take objection and say: `I will not produce this one or that one because it may incriminate me.' It seems to me that that would be stultifying the whole purpose of the section, and the claim for privilege, which, as between subject and subject in an action, may be made, has no application to this class of discovery or production.''

It may be noted at this point that it has now been established as the law in Australia that the privilege against self-incrimination is not confined to judicial proceedings. Rather, it has been held to apply to administrative proceedings so as to afford a defence to the failure to answer questions, unless otherwise statutorily abrogated: Pyneboard at 341 and Sorby at 309.

As Hill J pointed out in Stergis , prior to 1984 the sanction for a failure to answer a question put under s 264(1) was to be found in s 224 of the Act which was in the following terms:

``Any person who refuses or neglects to duly attend and give evidence when required by the Commissioner or any officer duly authorized by him, or to truly and fully answer any questions put to him by, or to produce any book or paper required of him by the Commissioner or any such officer, shall, unless just cause or excuse for the refusal or neglect is shown by him, be guilty of an offence.''

No doubt the availability of a defence of ``just cause or excuse'' left a serious argument to be made that the privilege against self- incrimination had not been abrogated, notwithstanding the context of the legislation.

Section 224 was repealed in 1984 and replaced by the present provisions of ss 8C and 8D of the Taxation Administration Act . It suffices here to set out only the terms of s 8C. Section 8D is, so far as is presently relevant, to similar effect. Section 8C provides as follows:

``A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:

  • (a) to furnish a return or any information to the Commissioner or another person;
  • (aa) [ inserted by Act No 97 of 1988] to give information to the Commissioner in the manner in which it is required under a taxation law to be given;
  • (b) to lodge an instrument with the Commissioner or another person for assessment;
  • (c) to cause an instrument to be duly stamped;
  • (d) to notify the Commissioner or another person of a matter or thing;
  • (e) to produce a book, paper, record or other document to the Commissioner or another person; or
  • (f) to attend before the Commissioner or another person;

to the extent that the person is capable of doing so is guilty of an offence.''

As Wilcox J points out in Donovan , ss 8C and 8D were inserted shortly after the judgment of the High Court in Pyneboard . As his Honour suggests, it is quite likely that the drafter of the amendment regarded Pyneboard as authority for the proposition that the words ``to the extent that the person is capable of complying with it'' evidenced the intention to exclude the privilege against self-incrimination. Certainly the change of formulation from ``just cause and excuse'' to ``capable'' would seem to have been deliberate and to reveal an intention on the part of Parliament to exclude as a defence, inter alia , the privilege against self-incrimination.

In these circumstances we are of the view expressed in Stergis that the context of the legislation combined with the terms of ss 8C and 8D lead to the conclusion that the privilege

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has been abrogated. Clearly it is of the utmost importance that a taxpayer disclose to the Commissioner all sources of income. Failure so to do would constitute an offence. If the argument were to prevail that the privilege against self-incrimination was intended to be retained in tax matters, it would be impossible for the Commissioner to interrogate a taxpayer about sources of income since any question put on that subject might tend to incriminate the taxpayer by showing that the taxpayer had not complied with the initial obligation to return all sources of income. Such an argument would totally stultify the collection of income tax. It is convenient to repeat what Hill J said in Stergis on this matter (at 4454):

``Against this argument could be put the context in which sec. 264 appears in the Act. The Commissioner of Taxation is obliged by the Act to cause assessments to be made of the taxable income and the tax payable by all taxpayers and, if necessary, to take steps to recover that tax. To protect the revenue the legislature has provided for a number of offences including the making of false statements, the irregular keeping of records and the like. For the purposes of the Act the Commissioner is given full and free access to all buildings, places, books, documents and other papers under sec. 263, and is empowered to obtain information or evidence under sec. 264. Material which a taxpayer has in his possession and in respect of which the Commissioner may require access under sec. 263 may reveal to the Commissioner the participation of a taxpayer in an offence against the general law or it may reveal that the taxpayer has not kept proper records in accordance with sec. 262A(1) or that an income tax offence or offence under some other law administered by the Commissioner has been committed. Similarly, information or evidence which a taxpayer or other person may be required to furnish or give under sec. 264 may tend to incriminate the person required to furnish such information or give such evidence in the same ways. The legislative policy of giving wide power to the Commissioner and those authorised by him under sec. 263 and 264, the subject of comment in O'Reilly & Ors v. Commrs of the State Bank of Victoria & Ors 82 ATC 4671; 83 ATC 4156; (1982-1983) 153 C.L.R. 1 and F.C. of T. v. ANZ Banking Group Ltd. (Smorgon's case) 77 ATC 4522; 79 ATC 4039; (1977-1979) 143 C.L.R. 499; Smorgon & Ors v. F.C. of T. & Ors 76 ATC 4364; (1976) 134 C.L.R. 475 and Southwestern Indemnities Ltd. v. Bank of N.S.W. and F.C. of T. 73 ATC 4171; (1973) 129 C.L.R. 512, would be frustrated if the privilege were found not to be abrogated.''

Senior counsel for Mr de Vonk sought to rely upon the provisions of Article 14(3)(g) of the International Covenant on Civil and Political Rights ratified by Australia on 13 November 1980. That article, which has not yet been incorporated in any legislation and so is not part of the municipal law, provides relevantly:

``3. In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality:

  • ...
  • (g) Not to be compelled to testify against himself or to confess guilt.''

While not part of municipal law there is no doubt that Australia's treaty obligations are a significant influence on the development of the common law: cf Environmental Protection Authority v Caltex Refining Co Pty Ltd (supra at 499 per Mason CJ and Toohey J);
Mabo v The State of Queensland (No. 2) (1991-1992) 175 CLR 1 at 41-43 per Brennan J. Further it is clear as the High Court has now held in Minister for Immigration v Teoh (1995) 128 ALR 353 that the ratification of an international treaty will found a legitimate expectation that a decision-maker will act in conformity with it.

In our opinion, however, the argument is of no assistance to Mr de Vonk. As a matter of construction, the treaty is concerned not with the right to refuse to answer questions posed in an administrative inquiry but, as it says, with the question of the determination of a criminal charge. The article may have relevance to the question whether a court would receive in evidence answers to questions put to Mr de Vonk in an investigation held under s 264, but it has no relevance to his right to refuse to answer questions properly put to him under s 264 on the ground that the answers might tend to incriminate him.

For these reasons we are of the view that the cross-appeal must fail.

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Contempt of court?

It was conceded on behalf of the Deputy Commissioner that the officers who were to conduct the inquiry under s 264 proposed to inquire into matters that would bear upon the three offences with which Mr de Vonk had been charged and would cover the factual circumstances the subject of the criminal charges. Put in another way, it was conceded that the facts relevant to be inquired into in the s 264 interrogation were significantly the same as and overlapped the facts relevant to the offences charged. In the result it was conceded that there was a risk that the answers which Mr de Vonk would give would tend to incriminate him and in so doing could interfere with the course of justice. However, it was submitted for the Deputy Commissioner that to the extent that the question of contempt of court went beyond self-incrimination, ss 8C and 8D of the Tax Administration Act operated to abrogate the common law rights, just as the privilege against self-incrimination was likewise abrogated by those sections.

The submissions on either side gave rise to some ambiguity. As we understood them, the submissions made on behalf of the Deputy Commissioner sought to equate the question of contempt of court with the question of self- incrimination, giving rise to a submission that if ss 8C and 8D operated to abrogate the privilege against self-incrimination then it should not matter whether the questions were put prior to a charge being laid or subsequently. Reliance was placed in support of this submission upon the decision in Hammond v Oades as being authority for the proposition that if self- incrimination were abrogated that abrogation went as much to a time prior to the laying of charges as to a time after charges were laid. Counsel for the respondent, on the other hand, put his submissions on the basis that the pursuit of an administrative inquiry while court proceedings were pending posed a real risk of the interference with the administration of justice and were for that reason in contempt of court. On this view the question of self- incrimination was irrelevant to the issue to be determined.

While the question of self-incrimination is not irrelevant to the question whether a s 264 inquiry would be in contempt of the District Court of Western Australia, it seems to us that the issue ranges more widely than the issue of self-incrimination.

Unless Parliament has acted to authorise an investigation in contempt of court (an authorisation not lightly to be inferred), it must be conceded that the coercive power of investigation conferred by s 264 could, in a particular case, be exercised in a way which would constitute a contempt. The question would, however, not ordinarily be likely to arise. If the power to interrogate under s 264 were exercised for a purpose of interfering with the administration of justice in a court, then no doubt the exercise of the power would be in contempt of that court. But so to use the power would be an abuse of the power which could be set aside. To conduct an investigation for a purpose of interfering with the administration of justice would not be a bona fide exercise of the power under s 264 at all.

Nevertheless, circumstances could arise where, the power not being intended to be exercised for the purpose of interfering with the administration of justice, the asking of questions might nevertheless bring about a substantial risk of serious injustice.

We should say at the outset that one of the difficulties of the appeal stems from the fact that the issue is raised in the context of administrative review of the decision to conduct an examination under s 264, rather than by reference to particular questions sought to be asked in the course of that examination. Indeed the Deputy Commissioner, through his counsel, refused to outline the questions intended to be posed. To a large extent this makes the issues in the appeal hypothetical. No doubt it is for this reason that counsel for the Deputy Commissioner made the concession to which reference has already been made. It also complicates the framing of declaratory relief in the event that a case of contempt can be made out.

In
Victoria v Australian Building Construction Employees and Builders Labourers' Federation (1981-1982) 152 CLR 25 it was held that unless expressly authorised by statute the conduct of a commission of inquiry otherwise lawfully appointed could be a contempt of court, at least to the extent that it created a risk of, or involved a tendency to interfere with, the administration of justice. The Court, however, was divided on the question whether in the circumstances it had been shown

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that the conduct of the Royal Commission into the Building Industry did tend to interfere with the course of justice, the majority holding that there had been no interference and the minority being of the view that a case of interference had not been made out. The case is, however, authority for the proposition that the question to be addressed where contempt is raised is whether there is a substantial risk of serious injustice: per Mason J at 99. In that case the subject matter of the inquiry covered the same ground as proceedings that had been commenced in the Federal Court, albeit the inquiry was not an inquiry into the matters that fell for decision in the Federal Court. Gibbs CJ put the question by reference to a ``real risk'' when his Honour said (at 56):

``There is a contempt of court of the kind relevant to the present case only when there is an actual interference with the administration of justice, or `a real risk, as opposed to a remote possibility' that justice will be interfered with... The essence of this kind of contempt is a `real and definite tendency to prejudice or embarrass pending proceedings'...''

His Honour, in the same passage, spoke of the need to reconcile in that case the conflicting principles of the public administration of justice on the one hand, and the protection of freedom of speech on the other. It was pointed out that actual intention or purpose to interfere with proceedings, while relevant, will never be decisive.

It is clear enough that the putting of questions in an examination under s 264 might, in a particular case, constitute a contempt of court notwithstanding that the answers might not in any way tend to incriminate the person to whom the questions are addressed. For example, questions could be put under s 264 which touched upon areas the subject of civil proceedings which would not violate the privilege against self-incrimination but could represent a substantial interference with the civil proceedings. Thus in
Brambles Holdings Ltd v Trade Practices Commission (No. 2) (1980) 44 FLR 182 , Franki J held that the issue of a notice pursuant to s 155 of the Trade Practices Act 1974 (Cth) where proceedings were pending in this Court to which the Trade Practices Commission was a party, constituted a contempt of court. It may, of course, also be noted that his Honour also held that there was no power to issue the notice for the collateral purpose of obtaining evidence in such proceedings.

In the course of his judgment Franki J cited the comments of Lord Diplock in
Attorney- General v Times Newspapers Ltd [ 1974] AC 273 at 309 to the effect that litigants should be able to rely upon there being no usurpation by any other person of the function of a court to decide cases in accordance with law once the dispute has been submitted to a court of law.

In the context of taxation, Northrop J in
Commercial Bureau (Aust) Pty Ltd v Allen & Ors; Ex parte FC of T 84 ATC 4198 ; (1984) 1 FCR 202 and Saunders v FC of T 88 ATC 4349 was prepared to contemplate that the exercise of powers pursuant to s 263 of the Act to gain access to premises could, in an appropriate case, constitute contempt of court. However, the circumstances did not, in that case, give rise to a contempt of court.

In Donovan it was argued before Wilcox J that once criminal proceedings had commenced, the use of s 264 in circumstances where the answer might tend to incriminate the person charged with the offence would be a contempt of court. In other words, the issue was put to his Honour on the basis that the relevant contempt was to be found within (and it would seem solely within) the potentiality for self- incrimination. His Honour was of the view that the issue was to be resolved by reference to the legislative intent. So much may be accepted. His Honour, however, then concluded that the reasons which impelled him to the conclusion that Parliament intended s 264 to operate, notwithstanding the possibility of self- incrimination, applied equally to contempt of court. His Honour said:

``If it is predictable that taxation investigations will often delve into areas of criminal conduct, it is equally predictable that, on some occasions, charges will already be pending against persons sought to be questioned. The rationale of Hamilton v Oades applies to this case.''

Thus it is necessary to consider Hamilton v Oades more carefully to determine whether that case extended beyond the question of self- incrimination.

As already noted Hamilton v Oades concerned the conduct of an examination under s 541(3) of the Companies (New South Wales)

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Code in circumstances where Mr Oades had already been charged with an offence. Mr Oades sought a direction from the Registrar that the examination be restricted to matters not the subject of the pending criminal proceedings against him. That direction was refused. The Court of Appeal held that during the pendency of the charges Mr Oades was not to be compelled to answer any questions which might tend to incriminate him and concerning facts which constituted the ingredients of the offences or which tended to disclose a defence to the charges. By majority the appeal was allowed and the orders of the Court of Appeal set aside. In the result the Registrar's refusal to direct that Mr Oades' examination be restricted to matters not the subject of the pending criminal proceedings was confirmed.

The headnote to the case in the Commonwealth Law Reports would suggest that the author of the headnote saw the case as one restricted to the question of self- incrimination. That is because the substantial effect of the order made by the Court of Appeal was concerned with the issue of self- incrimination: cf per Mason CJ at 492. Nevertheless it would seem from the report of argument that the question of contempt of court was the subject of argument and consideration, separate from the issue of self-incrimination. Although Mason CJ referred both to self- incrimination and to interference in the administration of criminal justice (at 494), his Honour's subsequent discussion (at 495 et seq) appears restricted to the question of self- incrimination. Thus (at 498) his Honour referred with approval to the comments of Pincus J in
Re Gordon (1988) 18 FCR 366 at 372 as to the absence of any statutory distinction in the relevant legislation between self-incrimination prior to the instigation of criminal proceedings and self-incrimination after future proceedings had been commenced, as if this was the real issue between the parties.

Likewise, Dawson J appears to have restricted his consideration (so far as the issue of contempt was concerned) to the question of self-incrimination. His Honour (at 508) said:

``In the context of a public examination, the time at which charges, if any, are laid will often be merely adventitious. Moreover, having regard to the protection given against the answer being used, the effect of being required to answer a question after criminal proceedings have begun does not necessarily carry consequences which are more adverse than if the question is asked at an earlier time. In any event, the purpose of the section remains the same whether charges have been laid or not. The concern for an individual is not, beyond the safeguard provided, to prevail over the public need to be informed about misconduct in relation to the affairs of a company under examination.''

Toohey J, on the other hand, while likewise of the view that there could be no essential difference between the abrogation of self- incrimination prior to proceedings being commenced and self-incrimination after proceedings had been commenced, appears to have considered the matter more broadly (at 514 ff).

Deane and Gaudron JJ dissented in the result. However, their Honours did so on an issue of the power of the Court to control and supervise its proceedings under s 541(12) or under the inherent power of the Court to prevent injustice. It is in that context that their Honours said (at 502):

``The public examination on oath or affirmation of a person charged with an indictable offence on matters with which the charge is concerned will ordinarily be viewed as seriously and unfairly burdensome, prejudicial or damaging if for no reason other than that it will ordinarily be viewed as constituting a real risk to the fairness and integrity of the trial of that charge. That is so whether or not the examination involves questions the answers to which have a tendency to incriminate. If the answers have a tendency to incriminate, an even greater risk is constituted by the public claiming of the privilege against self- incrimination.''

On the whole we think the case should be taken as concerned only with the privilege of self-incrimination. If however the case were to stand for a broader proposition, namely that in the context of the legislation there under consideration the legislature had authorised the asking of questions which, while not giving rise to the possibility of self-incrimination, might nevertheless constitute a contempt of court, this broader proposition can be supported by the express reference in the legislation to ``self incrimination''. That reference carries with it, as the various judgments of the High Court

ATC 4839

demonstrate, the consequence that no distinction was to be recognised between the case where the questions were put before a charge had been laid and a case where the questions were put afterwards. So it may be concluded that the legislature intended to abrogate the common law doctrine of contempt of court, since questions asked after charge would otherwise have constituted such a contempt.

The question that arises in the present case is thus whether there is anything in the context of s 264 of the Act or in the language of ss 8C and 8D of the Taxation Administration Act or both, which leads to the conclusion that Parliament intended that the power to interrogate under s 264 could be used in circumstances where so to do might tend to constitute a real risk of interference with the administration of justice.

The considerations which, without more, might have suggested that the privilege of self- incrimination could not apply in the context of income tax are not present, at least in as acute a form, in the context of contempt of court. The evident purpose of ensuring a proper disclosure of income by taxpayers would not be frustrated if the power of investigation were curtailed in circumstances where litigation had been commenced and the power of interrogation might interfere with the administration of justice. Thus the only question seems to be whether the express requirement that questions be answered to the extent of the capability of the answerer should be taken as necessarily requiring questions to be answered irrespective of the impact upon the administration of justice.

As we have already indicated the result in Hamilton v Oades may well have been influenced by the reference to self incrimination contained in the legislation there under consideration. There is no such express provision in the Income Tax Assessment Act or the Taxation Administration Act . On the whole we think that the legislature should not be taken in s 264 of the Act and ss 8C and 8D of the Taxation Administration Act to have authorised the compulsory interrogation of persons in circumstances where so to do might constitute an interference with the administration of justice, civil or criminal. The decision to refuse to answer a question on the grounds of self- incrimination is a matter for the person to whom the question is put. It remains within the capability of that person to answer. Contempt of court is not a matter for the parties to litigation, or for that matter any person not a party; it is a matter under the sole control of the Court itself. If it is a contempt of court to require a person under compulsion to answer a question that person could not excuse the contempt. If Parliament intends to interfere with the administration of justice it should express that intention clearly or unambiguously.

Even if s 264 of the Act required questions to be answered, notwithstanding that so to do would otherwise constitute a contempt of court, it would not follow that the fact that questions so asked might tend to interfere with the administration of justice would be an irrelevant consideration in the Commissioner's deciding whether to interrogate or to put particular questions. Even were contempt not to excuse the failure to answer questions put under s 264 of the Act, failure to take into account the possibility that a compulsory interrogation might interfere with the course of justice could invalidate the giving of a notice under s 264 or the exercise of power under it. In such circumstances there is much to be said for the approach adopted by Wilcox J of requiring the conduct of the interrogation to be deferred pending the conclusion of the criminal proceedings.

We are, however, of the same view as the learned trial judge, namely, that circumstances might arise where questions were put to Mr de Vonk which might constitute a real, or substantial risk of interference with the course of justice. The abstract nature of this conclusion inevitably raises difficulty in the framing of appropriate relief. If a declaration had to be formulated to give effect to the foregoing reasons, it could only be one to the general effect that the conduct of an interrogation prior to the hearing of the criminal charges and covering the same factual circumstances as those covered by the criminal charges could constitute a contempt of the court before which such charges are to be heard. A declaration in such terms being hypothetical and ``advisory'' and relating to a procedural question, should not be made. For the same reason, the second order and declaration made by Carr J should be set aside. His Honour's reasons and our own foregoing reasons speak for themselves.

ATC 4840

In the circumstances we are of the view that the following orders should be made:

  • (1) Appeal allowed in part.
  • (2) Set aside the second order and declaration made by Carr J.
  • (3) Liberty to apply on 48 hours notice to a judge of the Court should interrogation pursuant to the notice dated 1 November 1994 referred to in the first Order and declaration of Carr J be commenced and objection taken to specific questions.
  • (4) Cross-appeal dismissed.

As the parties have reached an agreement on the question of costs we would make no order as to costs.

We have had the advantage of reading in draft the Reasons for Judgment of Foster J. We agree with the substance of those Reasons.

THE COURT ORDERS THAT:

(1) Appeal allowed in part.

(2) Set aside the second order and declaration made by Carr J.

(3) Liberty to apply on 48 hours notice to a judge of the Court should interrogation pursuant to the notice dated 1 November 1994 referred to in the first order and declaration of Carr J be commenced and objection taken to specific questions.

(4) Cross-appeal dismissed.

(5) There be no order as to costs.


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