Case: Trade Practices Commission v Abbco Iceworks Pty Ltd [1994] FCA 1279 ; (1994) 52 FCR 96
Outcome: followed
After the defences were filed, two issues arose - whether penalty privilege or privilege against self incrimination would ordinarily relieve the directors from any obligation to provide further details of their defence and, secondly, assuming the privileges could be relied upon, whether the directors had waived, in whole or in part, their right to assert either privilege by filing detailed defences. Those applications were heard and determined by Finkelstein J: see ASIC No. 1 (2007) 164 FCR 32 at [1]. In those reasons for decision, Finkelstein J described the content of the defences filed by the directors and the position of MPG in the following terms (at [5]): When going into the detail they did in their respective defences the directors were mindful of penalty privilege. Each of their defences opens with a statement that the director "claims and reserves his right to claim penalty privilege in the proceeding." No such statement was made by MPG for it is accepted that a corporation cannot claim the benefit of penalty privilege (Trade Practices Commission v Abbco Iceworks Pty Ltd [1994] FCA 1279 ; (1994) 52 FCR 96) or self-incrimination privilege (see Environment Protection Authority v Caltex Refining Co Pty Ltd ... [1993] HCA 74 ; (1993) 178 CLR 477). That MPG cannot claim the benefit of either privilege may not be of much assistance to ASIC if it successfully attacks the company's defence. If MPG's defence is defective and it is required to provide further information, it may not be able to satisfy that requirement if the only source of its information is the director defendants and they are entitled to remain silent. (Emphasis added). 11 In January 2008, the defendants sought a stay of the claims made against MPG by ASIC pending the hearing and determination of the claims made against the directors or a stay of the claims made against MPG by ASIC until the Court has made findings of fact in relation to the claims against the directors but before final orders. The application was supported by an affidavit sworn by a Mr Babbage, a non-executive director of MPG. The application was refused: ASIC No. 2 . In considering the application for stay, a number of principles informed that decision: see ASIC No. 2 at [5] to [7]. They included: 1. The privilege against self-incrimination and penalty privilege apply to the directors but not MPG: ASIC No. 1 at [5] and ASIC No. 2 at [7]. 2. A corporate defendant (such as MPG) may be required to provide documents and information which may tend to incriminate its officers: Trade Practices Commission v Abbco Iceworks Pty Ltd [1994] FCA 1279 ; (1994) 52 FCR 96 at 116. 3. A corporate defendant cannot invoke privilege on the grounds that an order or requirement to produce documents or information might tend to incriminate a natural person, such as a director: Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3 ; (2002) 116 FCR 372 at [32] - [33] (per Lindgren J) and ASIC No. 1 at [5]. 4. A natural person cannot complain that a corporate defendant's compliance with an order or requirement to produce documents or information might tend to incriminate him or her: Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3 ; (2002) 116 FCR 372 at [32] - [33] (per Lindgren J) and ASIC No. 1 at [5]. 5. The relevant enquiry is whether an order directed to the corporate defendant will require that a natural person tend to incriminate himself or herself: Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3 ; (2002) 116 FCR 372 at [32] - [33] (per Lindgren J) and ASIC No. 1 at [5]. No submission has been made to that effect in this case. 6. A corporate defendant cannot refuse to comply with a direction for the filing of evidence on the basis that its evidence may incriminate other natural person defendants or expose them to a penalty: Chief Executive Officer of Customs v Camile Trading Pty Ltd [2004] NSWSC 1256 ; (2004) 58 ATR 163 at 170. However, a corporate defendant will not breach such a direction if it fails to file a statement or an affidavit from a witness where that witness claims privilege: ACCC v J McPhee &amp; Son (Australia) Pty Ltd (1997) 77 FCR 217 at 220 and ACCC v Eurong Beach Resort Ltd [2005] FCA 1134 at [10] , [12] and [13]. That is to say, compliance is not required " if the only source of the information is the director defendants and they are entitled to remain silent ": ASIC No. 1 at [5] (emphasis added). If the corporate defendant has other sources of information available from which it can comply with the direction, then it must do so.