Privilege against self-incrimination of the director invoked to resist production of documents

Privilege against self-incrimination of the director invoked to resist production of documents

By Drazen Kozaric, Special Counsel on 08/07/2022[SOURCE]

In Scottish Pacific Business Finance Pty Ltd v Qaqour, in the matter of Penny World Pty Ltd (receivers and managers appointed) (No 2) [2022] FCA 779, the plaintiff sought an order requiring Wizly Pty Ltd, the second defendant, to file an affidavit addressing transactions not included in the first defendant’s (who was the sole director and member of the second defendant during the relevant period) affidavit, in accordance with Court Orders made on 17 June 2022 (“the Order”).

The Order had the following terms:

  1. “Pursuant to s 23 of the FCAA and r 7.33 FCR, an information eliciting order be made against the second defendant in the form set out in Annexure B hereto with respect to any transfers or withdrawal of funds since 29 March 2022 from a bank account in the name of the second defendant with BSB 062 145 and account number 10394007.
  2. Annexure B to the orders included, inter alia, the following instruction to the company’s officer:  “If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions”.

The first defendant opposed the application on the basis that the Order required him to produce information over which he was claiming privilege against self-incrimination. The first defendant’s solicitor filed an affidavit identifying correspondences between the plaintiff and the first defendant, which included allegations of fraud against the first defendant. She further referred to various sections of the Crimes Act 1900 (NSW), which may apply to the alleged fraudulent conduct of the first defendant. She also submitted that the first defendant was the sole director and member of the second defendant and responsible for all bank withdrawals during the relevant period.

The Court considered whether the Order in respect to the second defendant can be complied with without exposing the first defendant to the risk of self-incrimination. It held that it was not satisfied, and evidence was not sufficient to establish, that only the first defendant could provide the required information. This is because the evidence did not exclude a possibility that someone else on behalf of the second defendant could swear an affidavit (i.e. a bank officer, a receiver, an agent, a lawyer, accountant etc), in accordance with Annexure B to the Order. Accordingly, the second defendant was ordered to provide the missing information required by the Order.

Take away: The privilege does not apply to companies’ documents. To oppose an application for production of the companies’ documents or information, former officers of the companies will need to prove, in addition to incriminatory nature of the documents, that they are the only ones who could provide the required documents or information.

This publication is provided for information purposes only and is not (and should not be relied upon as) legal advice. Each individual circumstances differ. Please contact us if we may help you with your circumstances.

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