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Business and Economics, Monash University
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Mroczkowski, Primrose --- "Contempt of Court and the Commissioner's Investigative Powers under Section 264 - Merely a Timing Issue?" [2000] JlATax 28; (2000) 3(6) Journal of Australian Taxation 392


CONTEMPT OF COURT AND THE COMMISSIONER'S

INVESTIGATIVE POWERS UNDER SECTION 264 – MERELY A TIMING ISSUE?

By Primrose Mroczkowski[*]

The Commissioner's investigative power contained within s 264 of the ITAA36 has often been the subject of debate and litigation on account of its apparent breadth. Case law has established that there are limitations on the exercise of this power. One such limitation is the potential applicability of the doctrine of contempt of court in particular circumstances. Where there are legal proceedings afoot, there is authority for the proposition that a "parallel (s 264) inquiry" into the very issues in respect of which the legal proceedings are pending exposes the Commissioner to the risk of a finding that he is in contempt of court. This article examines the scope of the doctrine of contempt of court and explores its potential effect on the way in which the Commissioner may choose to "time" the service of a s 264 notice.

1. INTRODUCTION

"When civil or criminal proceedings are on foot, can a parallel inquisitorial enquiry constitute contempt of court?"

This was the question considered by Heerey J in Watson v FC of T[1] ("Watson"), where judicial and administrative proceedings were pending in respect of a particular issue, and the "parallel inquisitorial enquiry"[2] proposed to be conducted on the same matter was pursuant to an exercise of the Federal Commissioner of Taxation's ("Commissioner") powers to obtain information conferred by s 264 of the Income Tax Assessment Act 1936 (Cth) ("ITAA36").

Much litigation and debate[3] has surrounded the scope of the extraordinarily wide access and investigative powers of the Commissioner contained in s 263 and s 264 of the ITAA36.[4] The decision in Watson raises another issue among the smorgasbord of issues that have arisen for judicial consideration. This issue concerns the extent to which, on a proper construction of the terms of s 264, the Commissioner is empowered to investigate a particular matter that is also the subject of, or related to a matter that is the subject of, pending judicial proceedings. In Watson, it was held that the examination that was to be conducted pursuant to the s 264 power would amount, in the circumstances of that case, to an interference with the due administration of justice and, thus, constitute a contempt of court.

The doctrine of contempt of court essentially encompasses conduct that interferes with the rule of law. The principles embodied in the law of contempt of court are therefore concerned with the protection of the effective administration of justice. Conduct that amounts to contempt of court can assume many different forms, leading one commentator to characterise the doctrine as "the Proteus of the legal world".[5] The area of the law of contempt of court that is relevant for the purposes of the analysis in this article is that which imposes restrictions on the exercise of a general power of investigation,[6] such as the power conferred by s 264. In particular, where the subject matter of an enquiry conducted pursuant to some general power of investigation is also the subject of pending judicial proceedings, there is authority for the view that the law of contempt of court may operate as a constraint on the investigation. That is, there may be circumstances where the pursuit of such a parallel enquiry amounts to an interference with the due administration of justice in the court hearing the proceedings and, thus, the conduct of the enquiry constitutes a contempt of court.

In respect of the operation of s 264, the general principle is that the powers conferred by that section cannot be construed as authorising conduct that is in contempt of court. Where the Commissioner uses or proposes to use a s 264 enquiry to traverse matters germane to pending legal proceedings, exposure to liability for contempt of court is therefore an issue. As the analysis in this article will suggest, although there is a developing body of case law on the issue of the applicability of the doctrine with respect to an exercise of the powers in s 264, the scope of the law governing contempt of court in this context is, in many respects, still obscure.

The purpose of this article, therefore, is to examine the operation of the contempt of court doctrine as a restriction upon the powers contained in s 264, to consider the elements of this species of contempt and to explore the limits of this qualification on s 264. For example, in what circumstances will the Commissioner be able to employ the powers contained in s 264 to inquire into a matter the subject of pending judicial proceedings, without being in contempt of court?

2. LEGAL PRINCIPLES

It is relevant to briefly consider some of the established legal principles in respect of the nature and the operation of s 264. In contrast to the powers granted by s 263,[7] s 264 empowers the Commissioner to require a person to furnish him with information; to attend and give evidence; to produce documents; or to give information on oath, either verbally or in writing.[8]

In particular, s 264 provides that:

(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 Govern-ment or by any public authority:
(2) The Commissioner may require the informa-tion or evidence to be given on oath or affirmation and either verbally or in writing, and for that purpose he or the other officers so authorized by him may administer an oath or affirmation.

The courts have taken a broad view of the scope and the operation of s 264. Case law indicates that the Commissioner has been permitted to rely on the s 264 power in a diverse range of circumstances.[9] A s 264 notice can be served irrespective of whether a notice of assessment has been issued to the recipient;[10] and there is no precondition that a formal issue or dispute of fact must exist between a taxpayer and the Commissioner before the s 264 power can be invoked.[11] The power in s 264 can, in fact, be used as a means to "fish" for information. The Commissioner is empowered to make preliminary enquiries without necessarily having a specific subject matter in mind.[12]

Although the terms of s 264(1)(a) do not contain any express qualifications, the courts have recognised an implicit and an obvious proviso to the power contained in s 264.[13] It has been held that, as the section was enacted for the purposes of enabling the Commissioner to perform his functions under the Act, the power conferred by it "must be circumscribed by reference to this purpose".[14] The word "information" in s 264(1)(a), for example, has been construed to mean information required for the purposes of the Act.[15]

Although the terms of s 264 do not impose any duty on the recipient of the notice to comply, or contain any sanctions for non-compliance, there is nevertheless a statutory duty to comply with a s 264 notice.[16] A failure to comply would constitute an offence under the Taxation Administration Act 1953 (Cth) ("TAA").[17] The recipient could also be compelled by a court to comply.[18] A significant feature of the operation of the power contained in s 264 is that the privilege against self-incrimination[19] has been abrogated in respect of a s 264 enquiry.[20] A person who is required to furnish information or to answer questions pursuant to a notice under s 264 is therefore not entitled to refuse to furnish that information or to answer questions on the basis of this common law principle.[21]

In contrast to the position with the privilege against self-incrimination, the operation of the power contained in s 264 is subject to the principles of legal professional privilege.[22] Therefore, where the information sought is protected by this privilege, a notice under s 264 cannot compel its production. However, the fact that a notice requires information, which might be subject to a valid claim for legal professional privilege, does not invalidate the notice.[23]

3. CONTEMPT OF COURT[24]

3.1 Introduction

Although the doctrine of contempt of court is of ancient origin, its fundamental importance is enduring, as it continues to play a significant role in the protection of the due administration of justice.[25]

As stated above, contempt of court is conduct that interferes with the effective administration of justice.[26] The law of contempt of court, therefore, comprises a body of legal principles and procedures judicially created to prevent such interference.

In the recent case of Re Colina; Ex parte Torney[27] ("Re Colina"), Hayne J held that, "the cardinal feature of the power to punish for contempt ... [is] that it is an exercise of judicial power by the courts, to protect the due administration of justice." That is, the power in a court to prosecute for contempt of court is an inherent power or can be characterised as an integral aspect of a court's judicial power.[28] In contrast to the United Kingdom where legislation[29] has been introduced to govern at least part of this branch of law, in Australia, the law of contempt of court is essentially still governed by the common law.[30]

In the leading case of Attorney-General v Times Newspapers Ltd,[31] Lord Morris of Borth-Y-Gest, explained the need for this branch of law when he held that:

In an ordered community courts are established for the pacific settlement of disputes and for the maintenance of law and order. In the general interests of the community it is imperative that the authority of the courts should not be imperilled and that recourse to them should not be subject to unjustifiable interference. When such unjustifiable interference is suppressed it is not because those charged with the responsibilities of administering justice are concerned for their own dignity: it is because the very structure of ordered life is at risk if the recognised courts of the land are so flouted that their authority wanes and is supplanted.[32]

In simple terms, therefore, the law of contempt of court is the mechanism by which the effective administration of the law is protected and upheld. In the same case, Lord Diplock enunciated the requirements of the due administration of justice:[33]

The due administration of justice requires first that all citizens should have unhindered access to the constitutionally established courts of criminal or civil jurisdiction for the determination of disputes as to their legal rights and liabilities: secondly, that they should be able to rely upon obtaining in the courts the arbitrament of a tribunal which is free from bias against any party and whose decision will be based upon those facts only that have been proved in evidence adduced before it in accordance with the procedure adopted in courts of law; and thirdly that, once the dispute has been submitted to a court of law, they should be able to rely upon there being no usurpation by any other person of the function of that court to decide it according to law.[34]

His Lordship then stated that:

[C]onduct which is calculated to prejudice any of these three requirements or to undermine the public confidence that they will be observed is contempt of court.[35]

That is, the due administration of the law is protected from interference when the rights or the elementary requirements enunciated by Lord Diplock are protected. Further, his Lordship's statement also suggests that the authority of the rule of law must not only be protected from unjustifiable interference, it must also be seen to be so protected.[36] This means that not only is it important for a court to punish conduct that actually interferes with the course of justice, there must also be a sanction in circumstances where the conduct results in a risk of such interference. This proposition is reflected in the development of the case law on the test of liability for contempt of court. In the leading High Court decision in Victoria v Builders Labourers' Federation[37] ("BLF"), Gibbs CJ explained that, to maintain an action for contempt of court in respect of the particular form of interference with the due course of justice in that case, there had to be:

... an actual interference with the administration of justice, or "a real risk, as opposed to a remote possibility" that justice will be interfered with: cf Attorney-General v Times Newspapers Ltd (1974) AC at p 299. The essence of this kind of contempt is a "real and definite tendency to prejudice or embarrass pending proceedings": John Fairfax & Sons Pty Ltd v McRae [1955] HCA 12; (1955) 93 CLR 351, at p 372.[38]

In the same case, Mason J's test for contempt of court was that the offending conduct had to be characterised as causing a "substantial risk of serious injustice" to the due administration of the law.[39]

The test of liability for contempt of court, therefore, is often not that the alleged contemptuous conduct has caused actual interference with the due administration of justice, but that the conduct has a tendency to interfere or to prejudice the due course of justice. In particular, the degree of risk of interference that is required is a "real risk".[40]

Although contempt of court is in essence, an offence,[41] a notable peculiarity associated with it is the summary process by which it is prosecuted.[42] This has been a heavily debated aspect of the law of contempt of court, as the trial of a criminal offence otherwise than by a jury is regarded as somewhat of an anomaly. A significant consequence of prosecution by summary process, for example, is that it results in the bypassing of "the traditional safeguards of criminal proceedings".[43] It is perhaps not surprising that the courts take the view that the inherent power to punish for contempt should be exercised "sparingly, and only when necessity demands".[44] This judicial conservatism has, arguably, also manifested itself in the development of the concept of "technical contempt" which, in essence, is conduct that falls within the definition of contempt of court but is nevertheless not regarded by the court as conduct deserving of punishment in the particular circumstances of the case.[45] Another reason for the development of the concept of technical contempt may be the fact that the sanctions for contempt of court can be severe.[46]

3.2 Civil and Criminal Contempt

The traditional classification[47] of contempt of court is that it is either civil contempt or criminal contempt.[48] In Times Newspapers, Lord Diplock distinguished between these two types of contempt:

'Contempt of court' is a generic term descriptive of conduct in relation to particular proceedings in a court of law which tends to undermine that sys-tem or to inhibit citizens from availing themselves of it for the settlement of their disputes. Contempt of court may thus take many forms.
One may leave aside for the purposes of the present appeal the mere disobedience by a party to civil action of a specific order of the court made on him in that action. This is classified as a 'civil contempt'. ...
All other contempts of course are classified as 'criminal contempts', whether the particular proceedings to which the conduct of the contemnor relates are themselves criminal proceedings or are civil litigation between individual citizens. This is because it is the public interest in the due administration of justice, civil as well as criminal, in the established courts of law that it is sought to protect by making those who commit criminal contempts of court subject to summary punishment. To constitute a con-tempt of court that attracts the summary remedy, the conduct complained of must relate to some specific case in which litigation in a court of law is actually proceeding or is known to be immi-nent.[49]

It is generally accepted that civil contempt comprises non-compliance with court orders or undertakings in the course of civil litigation,[50] whilst all other forms of contempt are criminal contempts. Criminal contempt is often classified into contempt by publication,[51] contempt committed in facie curiae[52] and a miscellaneous category comprising a collection of different types of interference with the due administration of justice.[53] Although there are many species of criminal contempt of court, they all have the characteristic attribute of being conduct which interferes with the due administration of justice either in a particular case or as part of a continuing process. As this article considers the applicability of the law of contempt of court in respect of a s 264 enquiry, the focus of the analysis will be in respect of criminal contempt of court.

3.3 Test of Liability for Contempt

The elements that have to be proved before a court punishes for the offence of criminal contempt differ from case to case, depending upon the particular species or nature of the contempt of court alleged.[54]

For example, in respect of contempt from publications interfering with the due course of justice in particular legal proceedings, publication of the prejudicial material is obviously an element of the actus reus;[55] as is the requirement that there must be legal proceedings pending at the time of the offending publication. In contrast, in respect of contempt from publications which "scandalise" the court, that is, publications which interfere with the due course of justice as a continuing process, there is no timing issue. This type of contempt can be committed regardless of whether there are particular proceedings pending.

As to the issue of mens rea, it has been held that the requirements as to the alleged contemnor's mens rea "can vary greatly",[56] and there have been conflicting views on what the requirements are. In Attorney-General v Newspaper Publishing, Sir John Donaldson MR acknowledged that, "[m]ens rea in the law of contempt is something of a minefield" on account of the law of contempt being "wholly the creature of the common law".[57] Often, the issue is whether the intention to interfere with the course of justice is a requisite element of the offence.[58] In Attorney-General v Butterworth[59], Lord Denning MR held that such an intention is usually required and therefore, as a general rule, contempt requires a guilty intent. In contrast, Donovan LJ in the same case, held that if an act is clearly and of itself calculated to interfere with the administration of justice, no further evidence of intent is required.[60] That is, beyond establishing that an alleged contemnor intended to do the act which amounted to the contempt of court, there is no requirement that there was an intention to interfere with the course of justice. It seems that the preferred view in Australia is that expressed by Donovan LJ.[61]

4. CONTEMPT OF COURT AND THE EXERCISE OF A POWER OF INVESTIGATION

4.1 Royal Commissions

The doctrine of contempt of court as a constraint on the exercise of some form of power of investigation was the subject of consideration by the High Court as far back as 1904, in the context of royal commissions of enquiry.

In Clough v Leahy,[62] the High Court examined the Crown's common law right to appoint a commission of mere enquiry.[63] Griffith CJ,[64] after considering the issue of the validity of royal commissions in general, posed the question:

What objection can be offered then, to the present Commission? There is one objection which probably would be a good one if it could be sustained. Any interference with the course of the administration of justice is a contempt of Court, and is unlawful. If, therefore, any person, purporting to act under the authority of a Royal Commission, were to do an act amounting to an interference with the course of justice, he could not claim any protection on the plea that he was acting for the Crown.[65]

Clough v Leahy established the principle that a commission of enquiry could be validly instituted and conducted to inquire into and report upon the question whether criminal offences have been committed.[66] This principle was subsequently affirmed by the Full High Court in McGuinness v Attorney-General (Vic)[67] ("McGuiness"). Significantly, in McGuiness, Latham CJ added to the observations of Griffith CJ by furnishing the following example:

[i]f ... a prosecution for an offence were taking place, the establishment of a Royal Commission to enquire into the same subject matter would almost certainly be held to be an interference with the course of justice and consequently to constitute a contempt of court.[68]

Therefore, the law of contempt of court could be regarded as a constraint on the matters which a royal commission could be directed to enquire. Significantly, one circumstance where there is possible exposure to liability for contempt of court is generally where a commission of enquiry investigates, or is established to investigate, a matter that is also the very subject of pending criminal proceedings.[69] The essence of the nature of the contempt of court in such a case was considered by the High Court in the leading case of Hammond v The Commonwealth[70] ("Hammond") which was decided shortly after the landmark decision in BLF, referred to earlier in this article, was handed down.

In Hammond, two Royal Commissions had been established to inquire into alleged malpractices in the handling of meat for human consumption. Hammond was charged under s 86(1)(a) of the Crimes Act 1914 (Cth) with conspiracy in relation to these practices. When called before the Royal Commission, Hammond sought an injunction restraining the Royal Commission, pending determination of his trial, from further examining him in respect of matters concerning the charges against him. He also sought an injunction restraining the Royal Commission from further inquiring into or reporting on matters touching and concerning the charge, pending the disposal of the criminal charges. He alleged that his examination before the Royal Commission and the making of a report by the Royal Commission would constitute a contempt of the County Court before which the criminal proceedings against him were pending.

All members of the High Court granted the injunction to restrain further examination of Hammond until the determination of his trial, on the basis that there was a real risk as that the administration of justice will be interfered with if the examination were to continue. However, by a majority,[71] the Court denied granting the injunction which sought to restrain the Royal Commissioner from making his report.[72]

Gibbs CJ[73] reiterated his test for contempt of court which he had set out in BLF and held that:

To succeed in obtaining an injunction on that ground, the plaintiff must establish that there is a real risk, as opposed to a remote possibility, that justice will be interfered with if the Commission proceeds in accordance with its present intention. The tendency of the proposed actions to interfere with the course of justice must be a practical reality - a theoretical tendency is not enough.[74]

Applying his test to the facts, Gibbs CJ found that in the circumstances of the case, if the examination of Hammond were to proceed before the Commission, there would be a real risk that the due administration of justice will be interfered with. This was because the evidence required by the Commission from Hammond related to the alleged conspiracy upon which he had been committed for trial. His Honour concluded that:

Once it is accepted that the plaintiff will be bound, on pain of punishment, to answer questions designed to establish that he is guilty of the offence with which he is charged, it seems to me inescapably to follow, in the circumstances of this case, that there is a real risk that the administration of justice will be interfered with. It is clear that the questions will be put and pressed. It is true that the examination will take place in private, and that the answers may not be used at the criminal trial. Nevertheless, the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence, is very like-ly to prejudice him in his defence.[75]

In respect of the second injunction which sought to restrain the Commission from inquiring into and reporting on matters touching and concerning the charge against the plaintiff, Gibbs CJ was not satisfied that there would be a real risk that the report will interfere with the administration of justice. There was, according to his Honour,[76] "a mere speculative possibility that anything in his [the Commissioner's] report will affect the plaintiff's trial."

Brennan J (as he was then) expressed a similar sentiment to Gibbs CJ on the issue of the examination of Hammond when his Honour explained:

It is sufficient for present purposes to appreciate that it is a principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged.[77]

Deane J considered the issue from the viewpoint of the protection of one of the requirements of the due administration of the law:

[I]t is fundamental to the administration of criminal justice that a person who is the subject of pending criminal proceedings in a court of law should not be subjected to having his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial enquiry by an administrative tribunal with powers to compel the giving of evidence and the production of documents which largely correspond (and, to some extent, exceed) the powers of the criminal court. Such an extracurial inquisitorial investigation of the involvement of a person who has been committed for trial in the matters which form the basis of the criminal proceedings against him constitutes, in my view, an improper interference with the due administration of justice in the proceedings against him in the criminal court and contempt of court.[78]

Deane J also added another dimension to the issue when his Honour indicated that the injustice and prejudice involved in the compulsory examination of an accused under such circumstances was sufficient reason to conclude that the examination should not be allowed to proceed:

It was submitted on behalf of the Common-wealth that it has not been shown that the enquiry by the Royal Commissions into the plaintiff's involvement in matters the subject of criminal proceedings involves any substantial risk of serious injustice or serious prejudice. That submission struck me as unattractive at the time when it was made. I have found that it deteriorates upon closer consideration. The pending criminal proceedings against the plaintiff are brought by the Commonwealth. The parallel inquisitorial enquiry into the subject matter of those proceedings is being conducted under the authority of the Commonwealth. As I have said, the conduct of that inquisitorial enquiry is to no small extent following the general form of a criminal trial shorn of some of the privileges and safeguards which protect an accused in such a trial. The plaintiff has been compelled to be sworn as a witness and has been subjected to questioning in the course of that enquiry. Indeed, his refusal to answer questions has led to his being charged, on the information of an officer of the Australian Federal Police, with an offence under the Royal Commissions Act 1902 (Cth). It is not, in my view, necessary to go beyond these things. In themselves, they constitute injustice and prejudice to the plaintiff.[79]

All the justices agreed with the order proposed by Gibbs CJ, which was that the Commission be restrained from further examining Hammond pending determination of his trial. Because the enquiry involved an examination into issues of great public importance and issues going beyond those concerning Hammond, it was not simply a matter of adjourning the enquiry.[80]

Significantly, in Hammond, the High Court came to its decision notwithstanding that the compulsory examination would have been conducted in private and in circumstances where there were statutory safeguards protecting the information from being admissible in any civil or criminal proceedings.[81]

4.2 Statutory Powers of Investigation

The doctrine of contempt of court has also been applicable in respect of the exercise of statutory powers of investigation, other than those conferred by s 264.

An early, notable decision is Huddart, Parker and Co Pty Ltd. v Moorehead and Appleton v. Moorehead[82] ("Appleton").

Appleton involved the provisions of s 15B of the Australian Industries Preservation Act 1906[83]. The section empowered the Comptroller-General of Customs to require persons to furnish information and to produce documents in circumstances where the Comptroller-General either had reason to believe that an offence had been committed against the said Act, or a complaint in writing had been made to the Comptroller-General. In the case, recipients of s 15B notices refused to comply with the requirements of the notices. No judicial proceedings were pending at the time the notices were served. It was argued that the section was invalid and unconstitutional because the power in s 15B in effect, authorized "compulsory discovery in aid of criminal proceedings for offences"[84] and this was inconsistent with the right to trial by jury conferred by the Constitution. It was further argued that exercising the powers in s 15B amounted to a purported exercise of judicial power, inconsistent with s 71 of the Constitution. The High Court rejected all these arguments and was unanimous in holding that s 15B was valid and intra vires.

Although the decision in Appleton was essentially concerned with the nature and the objects of the powers contained in s 15B, some of the comments of O'Connor J in the case are worth noting. Having concluded that the exercise of the powers in s 15B did not amount to an exercise of judicial power or an exercise of power in aid of judicial proceedings, his Honour then held that it did not follow that the section empowered the Comptroller-General to act in aid of pending judicial proceedings. According to O'Connor J:

When a Judge orders the examination of a witness by commission the evidence is taken on behalf of the Court by its representative, under its order, in a cause pending, and is clearly part of the procedure in that cause. When the Comptroller makes his requirement under 15B there can be no proceeding pending in a Court. He is not empowered to use the section with reference to an offence when once it has been brought with-in the cognizance of the Court. The power to prevent any such interference by the Executive with a case pending before the ordinary tribunals is undoubtedly vested in the Court by the Constitution. I take it therefore as clear that, at the stage when the Comptroller-General is authorized to apply the provisions of the section, the suspected or alleged offence is no more within the cognizance of a Court than if it were under preliminary consideration by the Police Depart-ment.[85]

Arguably, O'Connor J's comments above could be interpreted to the effect that the powers in s 15B were qualified by the doctrine of contempt of court. In particular, it could be argued that O'Connor J in substance, alluded to the second and third requirements of the due administration of justice stated by Lord Diplock in Times Newspapers, namely, that a citizen "should be able to rely upon obtaining in the courts the arbitrament of a tribunal which is free from bias against any party and whose decision will be based upon those facts only that have been proved in evidence adduced before it in accordance with the procedure adopted in courts of law" and that, "once the dispute has been submitted to a court of law, [a citizen] ... should be able to rely upon there being no usurpation by any other person of the function of that court to decide it according to law." That is, once the rules and procedures of a court have been activated, the power contained in a provision such as s 15B cannot be used to interfere with those procedures.

The High Court had occasion to consider the scope of the powers in s 15B again, some four years after Appleton, in the case of Melbourne Steamship Co Ltd v Moorehead[86] ("Melbourne Steamship"). In this instance, judicial proceedings were in fact, pending. In Melbourne Steamship, the power in s 15B was used to request information from the Melbourne Steamship Co Ltd. The information sought related to matters relevant to legal proceedings that had been commenced against some other party for alleged offences under the Australian Industries Preservation Act 1906-1909.

Applying the principle enunciated in Appleton, the High Court held that the Comptroller-General was not empowered to use s 15B under the circumstances. Griffith CJ held that:

In my opinion, when the Attorney-General has formally instituted a prosecution in this Court in respect of an alleged offence, the power as well as the purpose of s 15B is exhausted so far as regards the persons whom the Attorney-General alleges to have committed the offence for which he prosecutes, whether they are made parties to the suit or not. From that time the matter becomes subject to the judicial power, or, to adapt a familiar phrase, transit in litem penden-tem. The section cannot, therefore, ... be used for the purpose of collecting evidence in a pending suit.[87]

In the same case, Barton J also endorsed this principle:

If s 15B were read as an interference with judicial proceedings, it would be an exercise by the legislature of a power vested by the Constitution in the judiciary. It cannot, therefore, be so read if it is, as without doubt it is, open to an interpretation consistent with the Constitution. Such interpretation removes it altogether from the area of judicial proceedings. It cannot therefore be used as an aid to such proceedings, and it follows that such a use of it as was admitted by Mr Sharwood on behalf of the Crown Solicitor, was unauthorized by law, and that the defendant was not bound to answer questions administered under cover of the section in an enquiry in aid of pending judicial proceedings. When the point has been reached at which the Crown institutes such proceedings in respect of the subject matter of the questions, there is no right in the Comptroller-General to institute such an enquiry. That subject matter has passed into the hands of the Courts alone.[88]

Again, although neither Griffith CJ nor Barton J made express reference to the doctrine of contempt of court, it could be argued that their Honours were, in effect, alluding to that doctrine in the above passages.[89]

The principle in Melbourne Steamship and Appleton was applied notably, in the Federal Court case of Brambles Holdings Ltd v Trade Practices Commission and Another[90] ("Brambles Holdings"), where a different statutory power was involved. In contrast, the pending judicial proceedings in this case were civil in nature.

Brambles Holdings involved the power of investigation contained in s 155 of the Trade Practices Act 1974 (Cth) ("TPA"). That section, in substance, empowered a member of the Trade Practices Commission ("the Commission") to require a person to furnish information or produce documents to the Commission, or to appear and give evidence before the Commission. In the case, the Commission used the powers to serve a notice on a company requiring the provision of information on matters relevant to certain proceedings which had been commenced by the Commission against that company and a number of others. The proceedings were for the recovery of penalties and for injunctions arising out of alleged contraventions of s 45 of the TPA. Pursuant to the rules of these proceedings, the Commission did not have a right to discovery or answers to interrogatories. The s 155 notice was served about the time when the proceedings were thought to be ready for trial. It was established that many of the matters upon which information was sought under the notice involved allegations which the Commission had to prove to succeed in its legal action against the company.

Franki J followed the principle established in both Melbourne Steamship and Appleton held that the service of the notice in the particular circumstances of the case was beyond the power vested by the provisions of s 155.[91]

His Honour also concluded that the service of the notice amounted to a contempt of court[92] and that there was no right to obtain discovery or require answers to interrogatories in the particular proceedings. It was evident from the facts that "the service of the notice was for the purpose of obtaining information from the applicant which could not be obtained by a process in the court".[93]

His Honour held that it was the function of the court to determine issues according to the law and the evidence presented to it and "not to proceed in an inquisitorial manner to endeavour itself to ascertain the truth."[94] After considering the leading authorities of Attorney-General v Leveller Magazine Ltd[95] and Times Newspapers[96] on the meaning of contempt, Franki J concluded that:

... the issue of the notice in this case was a clear interference with the ordinary course of justice. It was a clear attempt to procure an advantage by threatening a party with criminal proceedings if it did not do something which the law did not require it to do.[97]

Franki J also held that it was not necessary to establish mens rea in respect of this contempt.[98] In so concluding, Franki J followed the approach of Donovan LJ in Attorney-General v Butterworth.[99]

It is evident from the facts in Brambles Holdings that the relevant statutory power had been exercised ostensibly for the purpose of obtaining a form of discovery in the pending civil proceedings. In effect, the statutory power had been used "as an aid"[100] to the legal proceedings or "for the purpose of collecting evidence in a pending suit".[101] Again, reference could be made to the elementary requirements of the due administration of justice stated by Lord Diplock in Times Newspapers. The conclusion that the conduct in Brambles Holdings amounted to a contempt of court is arguably, consistent with the view that the second and third requirements stated by his Lordship have been prejudiced. Once a matter has been submitted to the jurisdiction of a court, the litigants should be able to rely on the matter being determined in accordance with, inter alia, the rules and procedures of that court.[102] The attempt, through the use of the powers in s 155, to nevertheless obtain a form of discovery, when the device was not otherwise available in the pending legal proceedings, contravened the proper judicial procedure in the legal action and amounted to conduct that undermined the authority of the law. It was in fact acknowledged by Franki J that the conduct in the case had gone beyond creating a "real risk" of interference with the due administration of justice.[103] Further, his Honour concluded that the conduct could not be characterised as merely a "technical contempt".[104] This was notwithstanding that the evidence established that the Commission had acted in good faith and had lacked the intent to commit an act in contempt of court.[105]

The above cases therefore demonstrate the proposition that the doctrine of contempt of court can operate as a constraint on the exercise of an investigative power.

In Hammond, the form of interference or the issue of the risk of interference with the due course of justice arose on account of the possible prejudice to the accused being compulsorily examined on matters pertaining to the criminal charges pending against him/her. In addition, it also appears that it is a long established principle[106] that the "Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged."

In both Melbourne Steamship and Brambles Holdings, the issue of interference arose because the investigative powers had been used as an aid to pending legal action. It could be argued that, particularly in the cases of Hammond and Brambles Holdings, the circumstances of the exercise of the relevant investigative powers imposed a form of improper pressure upon a party to the pending legal proceedings, and created the risk of inhibiting the party from properly defending or settling the proceedings. Such conduct would be in breach of the requirements of the due administration of justice stated by Lord Diplock in Times Newspapers. As the analysis below will illustrate, this form of interference with the due administration of justice has arisen for judicial consideration in respect of the exercise of the s 264 powers.

5. CONTEMPT OF COURT AND THE EXERCISE OF THE S 264 POWER

As discussed above, the s 264 power is subject to unexpressed conditions - it has to be exercised in good faith and for the purposes of the ITAA36. Where there is a valid exercise of the power contained in s 264, the law of contempt of court could still apply as a limitation on the exercise.[107] This has been affirmed by the Full Federal Court in De Vonk.[108]

Prior to the decision in De Vonk, there was in fact, some authority for the view that the doctrine of contempt of court had been excluded in respect of the operation of s 264. This authority was the decision of Wilcox J in Donovan v FC of T[109] ("Donovan"). Relying upon a High Court case, Hamilton v Oades,[110] Wilcox J held in Donovan that, where the privilege against self-incrimination has been abrogated by statute, as it has been in the case of s 264, it followed that considerations relating to contempt of court were also necessarily excluded. The Commissioner in De Vonk had sought to rely on the decision in Hamilton v Oades to justify his contention that the doctrine of contempt of court in respect of a s 264 enquiry had been abrogated.

In Donovan,[111] the taxpayer, who had been charged with certain offences under the Cash Transaction Reports Act 1988 (Cth), was interviewed in accordance with a s 264 notice. The notice had been served in the course of an investigation into the affairs of a company by whom the taxpayer was employed. During the examination, the taxpayer objected to a number of questions on the ground that the answers might incriminate her. The s 264 enquiry also covered issues germane to the charges pending against her. The taxpayer sought judicial review of the decision to issue the notice arguing that the privilege against self-incrimination had not been abrogated in respect of the operation of s 264 and further, that the power conferred by 264 did not authorise action constituting a contempt of court. To persist in her examination, she argued, would amount to a contempt of court.

Wilcox J dismissed the taxpayer's application. His Honour rejected the taxpayer's argument that the privilege against self-incrimination had not been abrogated in respect of an enquiry under s 264, having considered the established authorities.[112] His Honour also concluded that the doctrine of contempt of court had been excluded in respect of a s 264 enquiry:

I leave aside the questions whether the principle was expressed too widely in Hammond, as to which see the comment of Dawson J in Hamilton v Oades at 509, and whether the statement of Gibbs CJ is to be read as dependent on the intention lying behind the questions, as to which see Toohey J in the same case at 515-516. These are matters for the High Court, not for me. It is sufficient for me to say that, upon reflection, I believe that the contempt of court submission must share the fate of its predecessor. It is now clear that the contempt of court doctrine is also subject to legislative intent. The reasons which impel the conclusion that Parliament intended s.264 to operate notwithstanding the possibility of self-incrimination apply equally to contempt of court. 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.[113]

Hamilton v Oades involved the power contained in s 541 of the Companies (New South Wales) Code,[114] the substance of which is in fact, rather different to the power granted in s 264.[115] Pursuant to s 541(3), there was express abrogation of the privilege against self-incrimination in respect of a s 541 enquiry. The High Court decision in the case held in effect, that the effective operation of s 541 required exclusion of the doctrine of contempt of court as well.

In essence, the provisions of s 541 empowered the Supreme Court of New South Wales to order the compulsory examination of a company director on matters relating to a company. Further, the powers granted in that section enabled the Supreme Court to make orders in respect of both the procedure and the information sought in the examination.

In Hamilton v Oades, an order had been made pursuant to s 541(3) for the examination in the Supreme Court of a company director in relation to the affairs of a company which had been placed in liquidation. The director had previously been charged with a number of offences arising out of his association with the company. When the examination commenced before a Deputy Registrar, the director made an application for a direction that the examination be restricted to those matters which were not the subject of the pending criminal proceedings against him.

This direction was refused and a single judge upheld the refusal. On appeal, the Court of Appeal unanimously[116] allowed the appeal and the examination was stayed pending determination of the charges. By a majority,[117] the appeal to the High Court was allowed. That is, the director could be examined on matters which were nevertheless the subject of the pending criminal proceedings against him. The essence of the reasoning of the majority justices was that, to give effective operation to the provisions of s 541, the decision of the Court of Appeal could not be upheld.

The decision in Hamilton v Oades was considered both at the Federal Courts[118] and the Full Federal Court level in De Vonk. At both levels, it was held that the decision in Hamilton v Oades did not require the result attributed to it by Wilcox J in Donovan. At the Full Federal Court, Foster,[119] Hill and Lindgren JJ[120] held that the principal issue addressed in Hamilton v Oades had been the privilege against self-incrimination. Their Honours rejected the argument that the decision could be interpreted as authority for the proposition that the doctrine of contempt of court had to be excluded where there was abrogation of the privilege against self-incrimination. Accordingly, the principle established in Donovan was not followed by the Full Federal Court in De Vonk and the decision of Wilcox J cannot be regarded as good law.

In De Vonk, the taxpayer had sought administrative review of a decision to issue him with a s 264 notice served 3 days after criminal charges for offences in relation to tax matters had been laid against him. He had been charged by the National Crime Authority with serious offences under the TAA. The charges related to distributions of income to the taxpayer from a partnership, of which he was a partner, for particular income years.[121] The s 264 notice required attendance to answer questions regarding his income and that of the partnership for the same period. It was conceded by the Commissioner of Taxation that the proposed interrogation under s 264 covered factual circumstances germane to the criminal proceedings already afoot against the taxpayer. In his application for review, the taxpayer argued, inter alia, that he was entitled to rely upon the privilege against self-incrimination in respect of the s 264 enquiry; and that any questions relating to the subject matter of the criminal charges laid against him would constitute an improper interference with the due administration of justice and amount to a contempt of court.

Both at first instance and at the Full Federal Court level, the taxpayer's argument in respect of the privilege against self-incrimination was rejected. On the issue of contempt of court, Carr J, at first instance, held that while the operation of s 264 was indeed subject to that doctrine, there was however, an absence of clear evidence that the questions proposed to be asked would amount to a contempt of court. It was nevertheless held that objection could be taken if impermissible questions were asked.

In his appeal to the Full Federal Court, the Commissioner argued, in essence, that the abrogation of the privilege against self-incrimination could be equated with the exclusion of the doctrine of contempt of court in respect of a s 264 enquiry, relying, as already stated above, on the decision in Hamilton v Oades for this proposition. The taxpayer cross-appealed and argued, inter alia, that the decision to interrogate him was an abuse of power.

The Full Federal Court unanimously held that the taxpayer could rely upon the doctrine of contempt of court.

Firstly, on the question of purpose, the Full Federal Court found that, given the proximity in time between the laying of the charges and the issue of the s 264 notice, "it [could have been] ... readily 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".[122] However, the Court was persuaded by the evidence of a tax officer[123], which indicated that the notice was issued for the purposes of the ITAA36 and not for the purpose of gathering evidence for use in the criminal proceedings pending against the taxpayer.[124] Accordingly, it was concluded that there was no improper purpose involved in the issue of the notice.[125]

Hill and Lindgren JJ, in their joint judgement, distinguished between an exercise of the s 264 power for the purposes of interfering with the administration of justice in a court and an exercise where there was no such improper purpose. In respect of the former, their Honours held that the exercise of the power would be in contempt of court, and further held that "[b]ut 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 s264 at all.”[126] Where the power in s 264 is exercised with no improper purposes involved, Hill and Lindgren JJ held that it was still possible that the powers may be exercised in contempt of court. Their Honours held that:

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. ... [C]ircumstances 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.[127]

On the issue of the applicability of the doctrine of contempt of court in the context of the

exercise of the s 264 powers, the Full Federal Court held that while the doctrine could be expressly excluded by the legislature, there had been no such abrogation in respect of s 264, a statutory power expressed in general terms.[128] It was held that there was nothing in the language or the context of the provisions contained in s 264 of the ITAA36 and ss 8C and 8D of the TAA which led to the inference that Parliament had intended such an abrogation.[129] Further, abrogation of the privilege against self-incrimination could not be equated with exclusion of the contempt of court doctrine. It was held that the two concepts were distinct even if there was some overlap. Foster J held that:

It does not follow, even where there is statutory abrogation of the privilege against self-incrimination, that a court is not necessarily concerned to exclude other elements of unfairness or prejudice which may operate to the disadvantage of an accused contrary to the spirit of the common law.[130]

Foster J also held that there would be injustice to the taxpayer of the kind referred to by Deane J in Hammond if the taxpayer were to be interrogated under s 264 on matters relating to the pending criminal charges. His Honour took the view that the accused in Hammond was in a "better position than the present appellant" because of the statutory safeguards available to him.[131]

A notable aspect of this case is the fact that the issue of contempt of court had been 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. Not only had the s 264 interrogation not commenced, the Deputy Commissioner had in fact, refused to outline the questions intended to be posed during the examination. Accordingly, it was acknowledged that framing the appropriate relief was difficult.[132] However, the Commissioner had indicated that he would not seek to examine the taxpayer during the pendency of the criminal proceedings should the court come to the conclusion that the taxpayer could rely on the doctrine of contempt of court. The Full Federal Court therefore ordered that liberty be granted to apply to a judge of the Federal Court on 48 hours notice should the interrogation be commenced and objection taken to specific questions.

Based upon the Full Federal Court decision in De Vonk, it is therefore settled law that the doctrine of contempt of court is a constraint on the exercise of the power in s 264. Heerey J in Watson has affirmed this principle. In contrast to De Vonk, where the accused was the subject of the compulsory examination, in Watson, the recipient of the s 264 notice was a witness in the pending proceedings. A s 264 notice had been served on a person, "M", who was a witness both in Administrative Appeals Tribunal ("AAT") proceedings commenced by the taxpayer and in criminal proceedings instituted against the taxpayer. M was an employee of the taxpayer's company. Following a tax audit in 1997, amended assessments were issued both to the taxpayer and her company for the years of income 1993 to 1996. It was alleged that there had been understatements of the company's income for the 1993 and 1994 income years. Objections by both the taxpayer and the company having been disallowed, both commenced proceedings seeking review by the AAT, under the Administrative Appeals Tribunal Act 1975 (Cth), of the Commissioner's disallowance of the objections. The taxpayer was also charged under s 29D of the Crimes Act 1914 (Cth) with conspiracy to defraud the Commonwealth through false representations as to the company's income. Pursuant to the AAT proceedings, witness statements were required. To this end, the Commissioner issued a s 264 notice to M to attend and give evidence on the taxation affairs of the company. The taxpayer sought an application for an order to review under the Administrative Decisions (Judicial Review) Act 1977 (Cth)[133] ("ADJR Act") and for an order under s 39B of the Judiciary Act 1903 (Cth). One of the grounds argued was that the notice was in contempt of both the AAT and the court hearing the criminal proceedings.[134]

Heerey J held that there was no contempt of the AAT proceedings,[135] but the same could not be held in respect of the criminal proceedings. Applying the principles established in McGuiness and in De Vonk, Heerey J held that, in the particular circumstances of the case, the exercise of the s 264 powers would amount to contempt of the court hearing the criminal proceedings against the taxpayer. His Honour held that the case was "on all fours with De Vonk",[136] save for the fact that the recipient of the s 264 notice in this case was a witness rather than the defendant in the criminal proceedings.

This difference was to account for his Honour's consideration of the concept of "usurpation". Because the recipient of the notice was merely a witness, Heerey J considered the contempt of court issue from the aspect of usurpation of the function of a court. His Honour referred to the passage from Lord Diplock's speech in Times Newspapers where his Lordship held that:

... once the dispute has been submitted to a court of law [citizens] should be able to rely upon there being no usurpation by any other person of the function of that Court to decide it according to the law. [137]

Heerey J concluded that in the circumstances of the case, the s 264 examination of M would amount to a usurpation of the Court's function in the conduct of the criminal proceedings against the taxpayer:

The concept of usurpation is applicable when, as in the present case, there is a parallel inquisitorial enquiry into matters of central importance in the criminal proceeding. In such circumstances, the applicant does not have to go any further in order to satisfy the test of a real risk of interference with the administration of justice in pending proceedings. There is no evidence before me as to what Mrs Mackey [M] said in her statement or at the committal proceedings. I do not need to, and should not, speculate as to what she might be asked at a s 264 examination and whether that might be contradictory or additional to her earlier evidence and what effect her answers might have on the evidence she would give at the trial and whether that effect would help or harm the applicant's case. However, the observation can be made that should the s 264 examination of Mrs Mackey proceed the applicant would be in a worse position than Mr De Vonk. If the examination proceeded (although, as mentioned above, it seems that was not going to happen anyway) at least he could object to particular questions and apply to the Court under the liberty reserved. By contrast, the applicant would not be present at any s 264 examination of Mrs Mackey and would not know what she was being asked. The suggestion, advanced in written submissions on behalf of the Commissioner, that the applicant would be provided with a transcript of Mrs Mackey's examination, is hardly an adequate solution.[138]

Heerey J held that the appropriate relief was to grant an injunction restraining the Commissioner from acting on or giving further effect to the s 264 notice until the determination of the criminal proceedings against the taxpayer.

6. INTERFERENCE WITH THE DUE ADMINISTRATION OF JUSTICE IN PARTICULAR CRIMINAL PROCEEDINGS

6.1 General Principle

The cases of De Vonk and Watson establish a set of legal principles in respect of the applicability of a particular species of criminal contempt of court. Specifically, where there are criminal proceedings pending against a taxpayer, the use of the power in s 264 to conduct an enquiry into the very matters which are germane to those pending criminal proceedings may result in the finding by a court that there is interference with the due administration of justice in the court hearing the criminal proceedings. Where the risk of interference can be characterised as a "real risk" rather than merely a "remote possibility", the conduct of the s 264 enquiry can amount to a contempt of court.

6.2 Elements of the Offence

To maintain an action for contempt of court of the kind referred to in these decisions, it must be established that the s 264 interrogation has a tendency to prejudice the pending legal proceedings. Actual prejudice to the criminal trial[139] is not an essential element of the offence. A risk of prejudice is sufficient. In De Vonk, Hill and Lindgren JJ (jointly), referred to the circumstance of "the asking of questions [which] might ... bring about a substantial risk of serious injustice."[140] In Watson, Heerey J referred to the "real risk of interference"[141] with the due administration of justice with the conduct of a s 264 enquiry. The test of liability, therefore, is not unlike that enunciated by Gibbs CJ in both BLF and Hammond. That is, there must be a real risk or a substantial risk of interference with the due course of justice in the court hearing the criminal proceedings to sustain an action for contempt of court with the conduct of a s 264 enquiry.

The time at which the risk to the due administration of justice is assessed is at the time of the proposed interrogation, and not after the event. A finding that the enquiry would create a real risk of interference would then enable the Commissioner to adjourn the enquiry. This is consistent with the principle that there should not only be a sanction for conduct that actually interferes with the due course of justice, the law should also deter conduct that creates a risk of such interference. Perhaps in most cases involving s 264, the issue of exposure to liability for contempt of court will be raised at the time it was raised in the case of De Vonk. That is at the time judicial review of the decision to issue the s 264 notice is sought and when the enquiry has not yet commenced.

Another element of this species of contempt of court is the timing issue. Criminal proceedings must be pending for there to be contempt of court of the kind considered in De Vonk and Watson, as the interference is with the due administration of justice in the particular criminal proceedings. There is, therefore, a point in time, after the criminal trial is over, from which the law of contempt of court will cease to operate and the Commissioner is then able to conduct the s 264 enquiry if he was prevented from doing so during the trial. It appears that the legal proceedings have to be pending, rather than be merely contemplated, for the doctrine to operate.[142]

As to the requisite mens rea in respect of this species of contempt of court, the general principle is that an intention to prejudice legal proceedings by the exercise of the s 264 powers is not required. In De Vonk, at first instance, Carr J stated that "[a]n intention to interfere with the course of justice or to prejudice the prosecution or defence in a pending trial is not necessary to constitute the contempt".[143] Also, in Watson, Heerey J held that the fact that the s 264 interrogation was proposed under the circumstances of the case was sufficient to sustain the action for contempt.[144] The cases, however, do suggest that, although intention in itself is not decisive, the intent or purpose behind a s 264 interrogation would nevertheless be a relevant consideration, with its importance varying according to the particular circumstances of a case. The issue may be particularly relevant, for example, to the question of penalties.[145]

6.3 The Scope of the Limitation

The essence of the species of contempt of court in the cases of Hammond, De Vonk and Watson is interference with the due administration of justice in the fair hearing of a criminal trial. The interference arises from the prejudice to the accused of being compulsorily examined on matters pertaining to the criminal charges pending against him/her, or the prejudice to the accused of having a witness in the criminal proceedings being compulsorily examined on those matters. What is the scope of this limitation on the powers in s 264?

The test of liability for contempt of court is significant in this respect. As there has to be a real or substantial risk of interference with the due administration of justice, one question is, for this test to be satisfied, how close do the issues have to be or how much of an overlap must there be between the issues that will arise for consideration in the court hearing the criminal proceedings and those that will be the subject of the s 264 enquiry?

As a general proposition, where it is apparent that the parallel enquiry is likely to consider or receive evidence that relates to the guilt or innocence of the accused, as was the case in De Vonk and in particular, Hammond, then a court is very likely to find that there is interference with the due administration of justice or a real risk of such interference, if the enquiry were to proceed. In such a case, it could be argued that there is a compelling argument that the conduct of the enquiry creates a risk of prejudice, at the very least, to the third of Lord Diplock's list of requirements of the due course of justice stated by his Honour in Times Newspapers. That is, there is a risk of usurpation of the function of the criminal court in the pending criminal proceedings. In Hammond, for example, Gibbs CJ found that the examination of Hammond would have required him to "answer questions designed to establish that he is guilty of the offence with which he is charged".[146] In the same case, Deane J also referred to the conduct of the enquiry as being "to no small extent following the general form of a criminal trial shorn of some of the privileges and safeguards which protect an accused in such a trial."[147] In the cases of Hammond, De Vonk and Watson, there was significant overlap between the matters that were proposed to be examined and the matters to be decided in the criminal trial.

Carr J in De Vonk, at first instance, considered the question of the degree of overlap required:

It does not necessarily follow from the above reasoning that all of the questions which the Commissioner wishes to ask Mr De Vonk will be impermissible merely because they may elicit information germane to the criminal charges against him. Each question or series of questions will need to be assessed to ascertain whether it is likely to require the giving of an answer or answers which constitute a real risk to the fairness and integrity of the hearing of the criminal charges against Mr De Vonk. If so, the asking of the questions or series of questions will be impermissible as constituting an interference with the administration of justice and hence amounting to contempt of Court.[148]

That is, the mere fact that an intended s 264 examination of an accused taxpayer is to cover factual areas germane to pending criminal proceedings against that taxpayer does not necessarily require the conclusion that there is interference or the risk of interference with the administration of justice through the conduct of that parallel enquiry. To maintain the action for contempt of court, there is still the requirement that the enquiry is of such a nature that there is a "real risk to the fairness and integrity" of the hearing of the pending criminal proceedings. Put simply, there are circumstances where the Commissioner is able to use the powers under s 264 to conduct a parallel enquiry into matters which are the subject of pending criminal proceedings. It may depend partly upon how stringent a court is going to apply the test of liability for contempt of court. There is, obviously, a special vigilance when it is criminal proceedings which are at risk of interference, the liberty of the accused is at stake, in addition to the wider community interest in ensuring that only the guilty are convicted. Further, the person who is to be examined may have some bearing on the issue. Heerey J, in the passage of his Honour's judgement in Watson, made the point that an accused is in a better position than a witness, to object to certain questions or to apply to a court if exception is taken to the questions asked in a s 254 examination. Further, it may also be a question of not only the degree of overlap, but also the nature of the overlap in the issues.

Carr J's suggestion that "each question or series of questions will need to be assessed" raises practical issues. One practical problem was illustrated in De Vonk itself. In that case, although the Commissioner had a draft list of questions for Mr De Vonk, the Commissioner was not prepared to supply the list to Mr De Vonk's legal advisers. The Commissioner's reasons were varied and included his concern that the prior release of a draft set of questions might have an impact on the candour of the person being examined, that the list was incomplete and not exhaustive and that the Commissioner did not wish to be constrained by the questions that he could ask. Apart from the problem of the likely reluctance of the Commissioner to provide the questions in advance, it could be argued that even if the Commissioner were willing to so supply a list, it does not necessarily follow that there will be agreement between the Commissioner and the taxpayer as to which particular questions are not prejudicial to the taxpayer's right to a fair hearing of the criminal proceedings.

Another issue that is relevant to the question of the scope of the contempt of court limitation on s 264, is that of timing. For there to be contempt of court in these cases, the requirement is that there must be criminal proceedings "pending" at the time of the s 264 enquiry. In the United Kingdom, under the common law in respect of publications interfering with the due course of justice in particular legal proceedings, the contempt of court principles are applicable if the legal proceedings are merely "imminent".[149] As stated earlier, in Australia, there is authority for the proposition that where proceedings are merely "contemplated", this is not sufficient. Apart from the issue of whether there is any difference between proceedings which are "imminent" and those that are merely "contemplated", it remains to be seen whether the position in the United Kingdom has any application in Australia. If there can be contempt of court from the conduct of a s 264 enquiry when criminal proceedings are merely imminent, the scope of the doctrine would potentially be broader.

7. INTERFERENCE WITH THE DUE ADMINISTRATION OF JUSTICE IN PARTICULAR CIVIL PROCEEDINGS

7.1 Civil Proceedings

It would appear that the reported decisions on s 264 have only involved pending criminal proceedings. If the pending legal proceedings are civil in nature, what is the test for actionable contempt?

In Hammond, Deane J made a brief reference to the issue of contempt of court when the pending proceedings are civil in nature. His Honour suggested that there was not necessarily a "blanket prohibition" on the conduct of a parallel enquiry merely because there are legal proceedings pending. In the relevant passage, his Honour pointed out that:

The mere fact that proceedings are pending in a court of law does not mean that any parallel or related administrative enquiry, conducted for proper administrative purposes, constitutes an interference with the due administration of justice in that court. For example, the existence of civil proceedings, in respect of certain alleged actions, will not ordinarily preclude proper administrative inquiries as to whether penal proceedings should be instituted in respect of those alleged actions. Thus, neither police inquiries nor committal proceedings constitute, in themselves, an improper interference with the proceedings of a court hearing a civil claim based on the subject matter of such inquiries.[150]

It could be argued that Deane J's specific reference to civil proceedings in the above passage suggests that it may generally be more difficult to maintain an action for contempt of court where the pending proceedings are not criminal in nature.

One example of a case where a "proper administrative enquiry" was held to be valid notwithstanding that the subject matter of the investigation was also the subject of civil proceedings is Pioneer Concrete.[151]

Pioneer Concrete involved s 155 of the TPA, which was considered earlier in the case of Brambles Holdings. The issue before the High Court in Pioneer Concrete was whether the powers conferred by s 155 empowered the TPC to require the furnishing of information relating to conduct which was the very subject of pending civil proceedings. In Pioneer Concrete, the TPC itself was not a party to those civil proceedings.

In that case, civil proceedings had been instituted in the Federal Court by R against 5 other companies for alleged contraventions of s 45 of the TPA[152] ("the Ro-Mix proceedings"). The alleged contraventions involved arrangements which, inter alia, had the effect of lessening competition in the pre-mixed concrete market. R sought injunctions and damages. A year and a half after these proceedings were instituted, 2 of the 5 companies ("the appellants") against whom the proceedings had been instituted were served with notices under s 155 TPA by the TPC. Each notice asserted that the TPC had reason to believe that the appellants were capable of furnishing information and producing documents relating to matters that constituted or might constitute contraventions of s 45; that is, the very conduct that was the subject of the action against the appellants by R. The TPC was aware of the Ro-Mix proceedings, but it was not suggested that the TPC was attempting to use the power conferred by s 155 "as an aid to, or for the purposes of, the Ro-Mix proceedings."[153] The appellants argued that the service of the notices was beyond power.

At first instance,[154] it was held by Lockhart J that the TPC lacked the power to issue the notices and that service of the notices constituted a contempt of court. The Full Federal Court's reversal of this finding was unanimously upheld by the High Court.

The High Court held that although the operation of s 155 was subject to the doctrine of contempt of court,[155] it had not been established in the case that the issue of the s 155 notices constituted an interference with the legal proceedings amounting to contempt of court Gibbs CJ held that, "not every investigation into facts which are the subject of pending proceedings constitutes a contempt of court".[156] The High Court examined the question by considering a number of issues.[157]

One issue was the intention or purpose motivating the exercise of the s 155 power. It was found that the Commission sought the information for legitimate purposes, consistent with the performance of its functions under the TPA, and not for the purpose of assisting the parties in the Ro-Mix proceedings.[158] Mason J was of the view that:

there is no reason to suppose that the Commission seeks information for other than a legitimate reason, that is, to perform its functions under the Act. The very existence of the Ro-Mix proceedings poses the question whether there has been a contravention of the Act. It is a question which the Commission has a statutory obligation to investigate. The issue of a s 155 notice is an obvious mode of investigating the matter. There is no evidence to support an inference that the Com-mission in issuing the notices is concerned to assist the parties in the Ro-Mix proceedings, rather than to investigate for itself the question whether there has been a contravention of the Act.[159]

Gibbs CJ also considered the question of purpose and held that if the powers in s 155 were used for the purposes of securing an advantage for a party to the proceedings, there would be a contempt of court:

No doubt it is right to say that the power conferred by the section might in some case be used so as improperly to interfere with judicial proceedings. I incline to think that if the power were used to assist a party in proceedings already pending, in a way that would give such a party advantages which the rules of procedure would otherwise deny him, there would be a contempt of court. ... In the present case it was not shown that the person who gave the notice had any intention to interfere with the course of justice, or that there was a real risk that the exercise of the powers under s 155 would in the circumstances have that effect.[160]

Another issue that was significant was the fact that the TPC was not itself a party to the pending legal proceedings. It was held by Gibbs CJ that:

There is nothing in the words of s 155 them-selves that suggests that the power which that section confers comes to an end once proceedings have been begun by some person unconnected with the Commission, even if in those proceedings there is a claim for damages caused by the conduct, or for an injunction to restrain the conduct, which constitutes the contravention or suspected contravention in relation to which a notice is sought to be given. In the nature of things, there is no reason why the power given to the Commission should be affected by actions taken by persons over whom it has no influence or control. If the power were denied to the Commission simply because someone else had commenced proceedings in respect of a matter sought to be inquired into, the proper exercise of the Commission's functions might easily be frustrated).[161]

The appellants had argued, inter alia, that the applicant in the pending civil proceedings could conceivably obtain from the TPC, information furnished to the TPC in compliance with the s 155 notices, and this information could be used in evidence against the person who was compelled to furnish that information, in circumstances where it might not have been possible for the applicant to obtain that information by way of interrogatories or discovery in the proceedings. However, Mason J held that this possibility did not vitiate the exercise of the power, nor did it lead to the conclusion that the exercise amounted to a contempt of court. His Honour indicated that:

It may be that the plaintiffs in the Ro-Mix proceedings will subpoena such answers as may be given in response to the notices and tender them in But I cannot see how this use of the material demonstrates that the issue and service of the notices is for a purpose foreign to the Commission's functions, is otherwise beyond power, or is a contempt.[162]

Gibbs CJ also dealt with this argument by stating that:

Certainly it would seem an abuse of the power given by s 155 for the Commission to use material obtained under that section for a collateral or ulterior purpose (cf Home Office v Harman (1983) AC 280, at pp 299-300, 302) as by voluntarily communicating it to a litigant in proceedings to which the Commission was not a party. It is possible that such a litigant might learn, from sources other than the Commission, that the Commission had the material and might then issue a subpoena duces tecum to the Com-mission, but the speculative possibility that some such thing may occur is not enough to justify the Court holding that the exercise of the power under s 155 is a contempt.[163]

Because there was no finding of contempt of court in Pioneer Concrete, it could be argued that the elements of the offence of contempt of court in instances where civil proceedings are pending are not completely clear. Nevertheless, the decision in Pioneer Concrete could perhaps be relied upon as a guide to the relevant issues that a court may consider when examining the applicability of the doctrine of contempt of court to an exercise of the s 264 power where the pending proceedings are civil rather than criminal in nature. The relevant issues considered by the High Court in Pioneer Concrete were purpose and the proposed use by the TPC of the information obtained.

7.2 Use of the Information

In Pioneer Concrete, it was argued that one of the parties to the pending litigation could conceivably obtain from the TPC, information furnished to the TPC in compliance with the s 155 notices, and that this information could be used in evidence against the person who was compelled to furnish that information. Although it was held by the High Court in that case that this argument was not sufficient to justify a finding of contempt of court, it could be argued that such an argument would also have little weight if applied to the case where a parallel enquiry is conducted pursuant to the power in s 264. Specifically, if the Commissioner of Taxation uses the power, in s 264 to enquire into a matter the subject of pending civil proceedings between two litigants, neither of whom is the Commissioner of Taxation, it could not necessarily be argued that there is a risk of disclosure of the information by the Commissioner to one of the parties to the litigation. This is because the ITAA36 contains a number of provisions that impose secrecy obligations on tax officers.[164] These provisions would prohibit disclosure of the information unless, for example, it is for the purposes of the ITAA36.

7.3 Purpose

The question of purpose was another issue considered in Pioneer Concrete. In the case, it was found that the Commission exercised the power in s 155 for legitimate purposes. The purpose motivating an enquiry has, in fact, been a relevant consideration in many of the cases already discussed earlier in this article. To this extent, Pioneer Concrete does not establish any new principles. For example, in Clough v Leahy, Griffith CJ referred to this issue when his Honour remarked that.

I do not think it is any part of our duty to suggest a case in which the Government might issue a Commission having for its obvious purpose interference with the course of justice. It is inconceivable; but, if it did occur, it would be sufficient to say that the Crown had been wrong-ly advised, and had no power to do it.[165]

In BLF, Gibbs CJ distinguished between the case of a commission of inquiry established with the "purpose of interference with the course of justice",[166] and the case where a commission was not established with any such intention. In respect of the former, his Honour held that the Crown would be exceeding its powers and the very issue of the commission would be ultra vires or invalid. In De Vonk, the same distinction was referred to by Hill and Lindgren JJ.[167]

The decision in Pioneer Concrete on the question of purpose therefore affirms the already established principle that, in circumstances where it can be established that the institution of an enquiry, pursuant to s 264, for example, is motivated primarily by the intent to interfere with the course of justice, inconceivable as it may be, it is likely that a court will conclude that the conduct of the enquiry is in contempt of court, in addition perhaps to the finding that the exercise is beyond power.[168]

The scope of the doctrine of contempt of court as a constraint on the exercise of the power in s 264, in circumstances where the enquiry is into matters that are the subject of pending civil proceedings, is therefore not clear.

8. CONCLUSION

It is evident from the case law that, in effect, there is not a general prohibition on the use of the powers in s 264 merely on account of the fact that the matters proposed to be examined pursuant to the s 264 enquiry are germane to issues the subject of pending civil or criminal proceedings. That is, it is possible for the Commissioner to utilise the s 264 power without being in contempt of court, notwithstanding that the issues traversed or proposed to be traversed in a s 264 enquiry are similar to those which are the subject of pending legal proceedings.

The central issue is the extent of the risk of interference with the due course of justice in the court hearing the legal proceedings, from the conduct of the s 264 enquiry. In considering the question of whether there is contempt of court in a given case, a court will need to take into account the competing interests of, on the one hand, the need to protect the fairness and integrity of legal proceedings, and on the other, the need to ensure both the proper collection of revenue and the proper administration of the tax system. There is a compelling argument that a court is more likely to give precedence to the former interest in cases where the pending proceedings are criminal in nature. It is not unreasonable to assert that where the pending proceedings are criminal rather than civil, a court will be stringent in its application of the test for actionable contempt. The test of liability for contempt of court where the pending legal proceedings are civil in nature remains unclear. Whether the risk of interference is such that a finding of contempt of court is justified in a particular case must, in the final analysis, depend upon the facts and circumstances of the case. It has been said that "[t]he concept of the risk of prejudice is sufficiently flexible to include any potentially real interference with a fair trial no matter how novel the interference is."[169] The lack of a precedent in respect of a particular circumstance obviously, does not mean that there can be no finding of contempt of court.

From a planning viewpoint, it is worth noting that the case law suggests that the effect of a finding of contempt of court in these s 264 cases is often that the Commissioner is compelled to defer the s 264 enquiry until the pending legal proceedings are completed. Therefore, in making his decision on the question of whether to issue a s 264 notice, the Commissioner may have to consider a timing issue; whether it may be more prudent to defer the issue of the notice until after pending legal proceedings are completed, to avoid the risk of unnecessary litigation as a result of the taxpayer raising the argument of contempt of court. Alternatively, and this is arguably a somewhat controversial alternative, to the extent that it is within his power to do so, the Commissioner may consider an attempt to defer the laying of criminal charges against a taxpayer[170] until he has had the opportunity to subject the taxpayer to a s 264 enquiry.

Primrose Mroczkowski is an Assistant Lecturer in the Department of Business Law and Taxation, Faculty of Business and Economics, Monash University. She has completed a Master of Taxation Laws, in addition to holding Bachelor of Law and Bachelor of Economics degrees. This article was produced during the period of her Research Semester which was awarded to her for Semester 2, 2000.


[*] The author gratefully acknowledges and thanks the following persons for their invaluable comments on this article: Vince Morabito, Senior Lecturer, Department of Business Law and Taxation, Monash University; Nicholas Mroczkowski, Lecturer, Department of Accounting & Finance, Monash University and Associate Professor Stephen Barkoczy, Department of Business Law and Taxation, Monash University. The author is responsible for any errors and omissions contained in this article.

[1] 99 ATC 5313, 5319.

[2] Hammond v The Commonwealth (1982) 152 CLR 188, 206 (per Deane J).

[3] See, for example, FC of T & Ors v ANZ Banking Group Ltd: Smorgon & Ors v FC of T & Ors 79 ATC 4039 ("Smorgon's Case"); Geosam Investments Pty Ltd & Ors v ANZ Banking Group Ltd & Ors 79 ATC 4418 ("Geosam Investments"); O'Reilly & Ors v Commissioners of the State Bank of Victoria & Ors 83 ATC 4156 ("O'Reilly"); FC of T & Ors v Citibank Ltd 89 ATC 4268 ("Citibank"); Allen Allen & Hemsley v DFC of T & Ors 89 ATC 4294; Perron Investments Pty Ltd & Ors v DFC of T 89 ATC 5038 ("Perron Investments"). More recent cases include Deloitte Touche Tohmatsu & Ors v DFC of T 98 ATC 5192 ("Deloittes"); May v DFC of T 99 ATC 4587; FC of T v Coombes (No 2) 99 ATC 4634; Industrial Equity Limited & Anor v DFC of T & Ors 90 ATC 5008 ("Industrial Equity"). For a useful discussion on the development of the law in this area, see R Woellner, S Barkoczy and S Murphy, 2000 Australian Taxation Law (10th ed, 1999) 115-116. See also P McSweeney, "Sections 263 & 264 of the ITAA: Another Missed Opportunity for Reform" (1996) 8(1) CCH Journal of Australian Tax 38.

[4] In addition, the Commissioner has a common law right to request information. The Commissioner has published guidelines (Access and Information Gathering Manual) for officers of the Australian Taxation Office in respect of the exercise of the Commissioner's statutory information-gathering powers. The guidelines state that when gathering information, consideration should first be given to whether "it is possible and practical to gather the information using a less formal approach ... If a person is likely to respond to a less formal request for information, you should use this approach" (Ch 2, section 2.2.1, Access and Information Gathering Manual, "Alternatives to Issuing a Notice"). See, for example, Deloittes 98 ATC 5192, 5197, where some reference is made to the Manual.

[5] J Moskovitz, "Contempt of Injunctions, Civil and Criminal" (1943) 43 Col LR 780. Proteus, according to Greek mythology, was a "minor sea god who had the power of prophecy but who would assume different shapes to avoid answering questions": The Australian Oxford Dictionary (1999). The passage in the abovementioned article by Moskovitz which refers to Proteus has been referred to in Borrie & Lowe, The Law of Contempt (3rd ed, 1996) 2 ("Borrie & Lowe"), and this latter reference has in turn, been referred to in Attorney-General v Newspaper Publishing Plc [1988] Ch 333, 361-362 (per Sir John Donaldson MR).

[6] The power may be statutory or otherwise. For example, a royal commission may be established pursuant to an exercise of the executive prerogative power, or pursuant to legislation (as was the case in Lockwood v The Commonwealth [1954] HCA 31; (1954) 90 CLR 177).

[7] In particular, s 263(1) of the ITAA36 provides that: "The Commissioner, or any officer authorized by him in that behalf, shall at all times have full and free access to all buildings, places, books, documents and other papers for any of the purposes of this Act, and for that purpose may make extracts from or copies of any such books, documents or papers." An expansive interpretation has been taken of this sub-section: see O'Reilly 83 ATC 4156. The Commissioner is at liberty to require the production of documents or the attendance of persons pursuant to s 264 without first exhausting his right of access pursuant to s 263: Smorgon's Case 79 ATC 4039.

[8] The Commissioner also has the power to request information or documents relevant to the assessment of a taxpayer where there is reason to believe that this information is held outside Australia. Pursuant to s 264A of the ITAA36, the Commissioner can issue an "offshore information notice" requesting information or documents.

[9] For example, see Industrial Equity 90 ATC 5008; Smorgon's Case 79 ATC 4039; May v DFC of T 99 ATC 4587; FC of T v Coombes (No 2) 99 ATC 4634.

[10] In Industrial Equity 90 ATC 5008, the s 264 notice was issued post-assessment. As to the issue of what is an assessment, see FC of T v Ryan 2000 ATC 4079; S Barkoczy, "The Nature of An Income Tax Assessment" [1999] JlATax 4; (1999) 2(1) Journal of Australian Taxation 36; E Iachelini and S Barkoczy, "Ryan's case: A Lesson in Literal Interpretation" (2000) CCH Tax Week.

[11] Smorgon's Case 79 ATC 4039. There is also no precondition that the requirements of natural justice have to be complied with before the issue and service of a s 264 notice: Sixth Ravini Pty Ltd v DC of T; Eighth Oupan Pty Ltd v DC of T 85 ATC 4307.

[12] For example, May v DFC of T 99 ATC 4587 and Deloittes 98 ATC 5192. In Smorgon's Case 79 ATC 4039, 4053, Mason J held that: "[t]he strong reasons which inhibit the use of curial processes for the purposes of a 'fishing expedition' have no application to the administrative process of assessing a taxpayer to income tax. It is the function of the Commissioner to ascertain the taxpayer's taxable income. To ascertain this he may need to make wide-ranging inquiries, and to make them long before any issue of fact arises between him and the taxpayer. Such an issue will in general, if not always, only arise after the process of assessment has been completed. It is to the process of investigation before assessment that sec 264 is principally, if not exclusively, directed."

[13] In contrast, the provisions in s 264(1)(b) do contain a qualification. The sub-section provides that the Commissioner may require a person to attend and give evidence before him or may require the production of "all books, documents and other papers whatever in his [being the recipient of the notice] custody or under his control". However, the section provides that the power to compel evidence is limited to evidence concerning the income or assessment of the recipient of the notice or that of some other person; and the power to require production is confined to documentary records "relating thereto". The power to compel production is nevertheless very broad as the judicial view is that there is no requirement that the Commissioner can only obtain books or documents under s 264(1)(b) if he knows that they provide evidence on a particular matter. The Commissioner can request production even if he has no knowledge of what those books or documents may reveal, provided they relate to a taxpayer's income or assessment. Arguably, the obligation imposed upon a recipient of a notice requiring production of documents has the potential of being onerous. See, for example, Smorgon's Case 79 ATC 4039; Dunkel v DFC of T 91 ATC 4142; FC of T & Anor v Industrial Equity Ltd & Anor, 2000 ATC 4197; Grant & Ors v DFC of T [2000] FCA 1383 (29 Sept 2000); Taxation Ruling IT 2072. The power to obtain documents (pursuant to s 264(1)(b)) is independent of the power to obtain information (pursuant to s264(1)(a)): May v DFC of T 99 ATC 4587. Where a notice requires both the production of documents and the attendance and giving of evidence, one requirement may be severed from the other: Elliott & Ors v DEC of T 90 ATC 4937.

[14] Smorgon's Case 79 ATC 4039, 4052 (per Mason J). See also Industrial Equity 90 ATC 5008; Deloittes 98 ATC 5192; Perron Investments 89 ATC 5038; Geosam Investments 79 ATC 4418; DFC of T v De Vonk 95 ATC 4820 ("De Vonk"). For a discussion on the issue of exercising a power for the purposes of an enactment, see Clarke v DFC of T 89 ATC 4521 (per Spender J). In contrast, s 263(1) contains the words "for any of the purposes of this Act". For a legislative history of this phrase, see O'Reilly 83 ATC 4156, and Citibank 89 ATC 4268.

[15] See, for example, Perron Investments 89 ATC 5038 and Elliot 90 ATC 4937.

[16] Taxation Administration Act 1953 (Cth) ("TAA"), ss 8C, 8D, 8K, 8N and 8P. The term "taxation law" in ss 8C and 8D is defined in TAA, s 2 to include "any other Act of which the Commissioner has the general administration (for example, the ITAA36). The courts have implied into the section a "reasonable time" for compliance: Ganke v DFC of T (No 1) 75 ATC 4097; Holmes & Ors v DFC of T 88 ATC 4906; Perron Investments 89 ATC 5038. See also D Cannings, "Judging the Time for Compliance with a Sec 264 Notice" (1990) 2(2) CCH Journal of Australian Taxation 4. It appears that the statutory duty to comply with a s 264 notice may override a contractual duty not to produce the information sought under the notice: Smorgon's Case 79 ATC 4039.

[17] A failure or refusal to furnish information or attend before the Commissioner or an officer, "to the extent that the person is capable of doing so", is an offence under TAA, s 8C. It is not necessary for the Commissioner to prove that the required information did in fact exist for a successful prosecution under s 8C: Walsh v FC of T 81 ATC 4693. When attending before the Commissioner or an officer, a refusal or failure to answer a question or produce a book or document "to the extent that the person is capable of doing so" is also an offence under TAA, s 8D.

[18] TAA, s 8G. It appears that in exceptional circumstances, injunctive relief may also be available to compel compliance, notwithstanding that it is not the remedy for non-compliance provided in the ITAA36: Attorney-General & Anor v Thomas 83 ATC 4071.

[19] The rule that a person is not obliged to answer self-incriminating questions applies to administrative enquiries, in addition to judicial proceedings: see, generally, Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; Sorby v The Commonwealth [1983] HCA 10; (1983) 152 CLR 281; Mortimer v Brown [1970] HCA 4; (1970) 122 CLR 493; Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs [1985] HCA 6; (1985) 156 CLR 385; Police Service Board v Morris [1985] HCA 9; (1985) 156 CLR 397.

[20] De Vonk 95 ATC 4820; Donovan v DFC of T 92 ATC 4114 ("Donovan"); Stergis & Ors v FC of T & Anor 89 ATC 444. In Hamilton v Oades [1989] HCA 21; (1989) 166 CLR 486, 495, Mason CJ held that: "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." Sections 8C and 8D of the TAA supersede s 224 of ITAA36 which contained the words "just cause and excuse". These words were replaced with the words, "to the extent that the person is capable of complying with it" in ss 8C and 8D. It is accepted that these latter words are taken to show that legislature intended that the privilege against self-incrimination be abrogated.

[21] In De Vonk 95 ATC 4820, 4835, Hill & Lindgren JJ (jointly) identified the following rationale for their conclusion that Parliament intended the abrogation of such a fundamental principle: "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."

[22] O'Reilly 83 ATC 4156; Perron Investments 89 ATC 5038; Deloittes 98 ATC 5192; FC of T v Coombes (No 2) 99 ATC 4634. Following the High Court decision in Esso Australia Resources Ltd v FC of T 2000 ATC 4042, the common law test for determining whether documents are subject to legal professional privilege is the "dominant purpose test" and not the long-standing "sole purpose test" formulated in Grant v Downs [1976] HCA 63; (1976) 135 CLR 674. See A Palmer, "Legal Professional Privilege - The Demise of the Sole Purpose Test" (2000) 4(3) Law Institute Journal 50; R Woellner, "Esso Resources Case and Client Legal privilege" (2000) 8 CCH Tax Week.

[23] Perron Investments 89 ATC 5038.

[24] "Contemptus curiae" was referred to by Glanvill, an English legal historian writing about 1187, apparently referring to a failure by a litigant to appear before the court: see Arlidge, Eady & Smith, Arlidge, Eady & Smith on Contempt (2nd ed, 1999) Ch 1. See generally Borrie & Lowe, above n 5; and CJ Miller, Contempt of Court (2000).

[25] Borrie & Lowe, above n 5, 8, cite FA Mann (1979) 95 LQR 348 who wrote: "However, uncertain its definition and scope may be in some respects contempt of court is undoubtedly one of the great contributions the common law has made to the civilised behaviour of a large part of the world ...".

[26] At common law, only two species of contempt is recognised: contempt of court and contempt of parliament. It has been acknowledged that the term "contempt of court" is, in fact, misleading or is a misnomer. In Attorney-General v Times Newspapers Ltd [1974] AC 273, 322 ("Times Newspapers") (per Lord Cross of Chelsea), it was held that: "'Contempt of court' means an interference with the administration of justice and it is unfortunate that the offence should continue to continue to be known by a name which suggests to the modern mind that its essence is a supposed affront to the dignity of the court. ... Yet the due administration of justice is something which all citizens, ... should be anxious to safeguard." In Attorney-General v Leveller Magazine Ltd [1979] AC 440, 449 (per Diplock Lord) it was held that: "although criminal contempts of court may take a variety of forms they all share a common characteristic: they involve an interference with the due administration of justice, either in a particular case or more generally as a continuing process. It is justice itself that is flouted by contempt of court, not the individual court or judge who is attempting to administer it." See also Jennison v Baker [1972] 2 QB 52, 61; Lewis v Ogden [1984] HCA 26; (1984) 153 CLR 682, 693; Attorney-General (NSW) v Willesee [1980] 2 NSWLR 143, 161. In the United Kingdom, a committee ("the Phillimore Committee"), established in June 1971 under the chairmanship of Lord Justice Phillimore to consider whether any changes should be made to the law of contempt, addressed the question of terminology but was unable to suggest an alternative term.

[27] (1999) 166 ALR 545, 579.

[28] R v Almon [1765] EngR 25; (1765) Wilm 243, 254. Also, R v Kirby; Ex parte Boilermakers' Society of Australia [1956] HCA 10; (1956) 94 CLR 254; Attorney-General v British Broadcasting Corporation [1981] AC 303; K Mason, "The Inherent Jurisdiction of the Court" (1983) 57 Australian Law Journal 449. Superior courts of record have more extensive contempt powers than inferior courts of record, the position being broadly that superior courts can punish contempts whether committed in or outside the court whereas inferior courts can only punish contempts committed "in the face of the court". The power to punish for contempt in the face of the court is an incident of the inherent jurisdiction of all superior and inferior courts of record: R v Metal trades Employers' Association; Ex parte Amalgamated Engineering Union [1951] HCA 3; (1951) 82 CLR 208, 241-243 (per Latham CJ). The phrase "in the face of the court" is explained later in this article. See also, for example, Re Colina (1999) 166 ALR 545, 579 (per Haynes J) and Forbes, ex-parte Bevan [1972] HCA 34; (1972) 127 CLR 1, 7, where Menzies J held that: "'[i]nherent jurisdiction' is the power which a Court has simply because it is a court of particular description. Thus the Courts of Common Law without the aid of any authorising provision had inherent jurisdiction to prevent abuse of their process and to punish for contempt."

[29] The Contempt of Court Act 1981. The Phillimore Committee produced its Report (Report of the Committee on Contempt of Court (1974) Cmnd 5794) in December 1974, making a number of important recommendations for change. The Contempt of Court Act 1981 which came into effect in August 1981 sought to put into effect the bulk of the Phillimore Committtee's recommendations. The legislation is not, however, a comprehensive restatement of the law of contempt. Large areas of the law of contempt remain untouched by the legislation: see, generally, Arlidge, Eady & Smith, above n 24. The enactment of the Contempt of Court Act 1981 was in fact, prompted by the decision of the European Court of Human Rights in Sunday Times v United Kingdom [1979] ECHR 1; (1979) 2 EHRR 245, which had held that the United Kingdom was in breach of Art 10 of the European Convention (Convention for the Protection of Human Rights and Fundamental Freedoms, Rome (November 4, 1959); TS 71 (1953); Cmd 8969) as a result of the House of Lord's decision in Times Newspapers [1974] AC 273.

[30] Proposals for reform were suggested by the Australian Law Reform Commission, Contempt, Report No 35 (1987).

[31] [1974] AC 273. It was in this case that the House of Lords considered for the first time, the contempt of court doctrine in some depth.

[32] Ibid 302.

[33] Ibid 314, where Lord Simon of Glaisdale concurred with this view.

[34] Ibid 309.

[35] Ibid.

[36] In Times Newspapers, ibid, Lord Diplock held that: "[t]he mischief against which the summary remedy for contempt of court is directed is not merely that justice will not be done but it will not be manifestly seen to be done. Contempt of court is punishable because it undermines the confidence not only of the parties to the particular litigation but also of the public as potential suitors in the due administration of justice by the established courts of law."

[37] [1982] HCA 31; (1982) 152 CLR 25.

[38] Ibid 56. In BLF, a joint Royal Commission had been established to inquire into the alleged illegal activities of a particular trade union. Shortly after its establishment, Federal Court de-registration proceedings in respect of the same union were instituted. Although there was some common ground, the Royal Commission and the de-registration proceedings essentially involved inquiries into different matters. It was argued, inter alia, that continuance of the Royal Commission would constitute a contempt of court as the enquiry would result in a degree of pre-trial publicity through its reporting, and this publicity could influence witnesses in the court proceedings and, albeit subconsciously, the judges as well. By a majority, the High Court rejected this argument and held that there was no contempt of the Federal Court proceedings with the continuance of the enquiry.

[39] Ibid 99. Hill and Lindgren JJ in their joint judgement in De Vonk 95 ATC 4820, 4837, refer with approval to this test and the test formulated by Gibb CJ's in the same case.

[40] The test of contempt of court established by the House of Lords in Times Newspapers [1974] AC 273, 298-299 (per Lord Reid) is whether there is "a real risk as opposed to a remote possibility" that there is interference with the due administration of justice. In the same case, Lord Morris of Borth-Y-Gest (303) held that: "[a] court will therefore only find "contempt" where the risk of prejudice is serious or real or substantial."

[41] Attorney-General v Butterworth [1963] 1 QB 696, 722 (per Lord Denning MR); Balogh v Crown Court at St Albans [1974] 3 All ER 283, 289 (per Lord Denning MR); Ahnee v Director of Public Prosecutions [1999] UKPC 11; [1999] 2 WLR 1305, 1314.

[42] There are in fact, many characteristics that distinguish it from ordinary crimes, so much so that criminal contempt of court has been characterised as an offence sui generis: Re Colina (1999) 166 ALR 545, 550 (per Kirby J).

[43] Arlidge Eady & Smith, above n 24, para 2-26. See generally Re Colina, ibid 548. Lindley LJ in O'Shea v O'Shea and Parnell [1890] UKLawRpPro 11; (1890) 15 PD 59, 64 held that it is "the only offence that I know of, which is punishable at common law by summary process." It has however, been accepted that the special nature of the doctrine of contempt of court has necessitated the summary procedure. The rationale for the summary jurisdiction has been the subject of consideration in many decisions: for example, in Attorney-General v Sport Newspapers Ltd [1991] 1 WLR 1194, 1225, Hodgson J held that, "It seems to me that the principle underlying the arrogation to themselves by the judges of a right to deprive a person of the right he would otherwise have to trial by jury and, by way of summary procedure, punish him, lies in the need for them to have available machinery by which, speedily and effectively, they can protect the proceedings over which they have control."

[44] Re Colina (1999) 166 ALR 545, 548 (per Gleeson CJ and Gummow J jointly). In Keeley v Brooking (1979) 143 CLR 162, 174 (per Stephen J), it was held that "[t]he summary procedure for contempt not only should be employed most sparingly but should rarely be resorted to except in those exceptional circumstances where the conduct is such that 'it cannot wait to be punished' because it is 'urgent and imperative to act immediately' to preserve the integrity of 'a trial in progress or about to start'".

[45] Times Newspapers [1974] AC 273, 312 (per Lord Diplock). See for example, BLF [1982] HCA 31; (1982) 152 CLR 25, 169 and 175 (per Brennan J).

[46] They include a term of imprisonment or a fine. There is theoretically, at common law, no limit either to the length of the term of imprisonment or the amount of the fine: Re Colina (1999) 166 ALR 545. The power to imprison is obviously a major sanction and is only invoked in the most serious cases.

[47] Rationale for the distinction: see for example, McHugh J in Witham v Holloway (1995) 183 CLR 525, 539.

[48] Sometimes respectively, referred to as contempt by disobedience and contempt by interference. The distinction has been blurred by cases that have recognised a species of civil contempt which "savours of criminality": Wellesley v The Duke of Beaufort [1831] EngR 809; (1831) 2 Russ & M 639, 677 (see Borrie & Lowe, above n 5, 3). The distinction has also been the subject of criticism: see, for example, Re Colina (1999) 166 ALR 545, 565; Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15; Witham v Holloway, ibid. The Phillimore Committee, above n 29, para 176, recommended that the distinction be abolished.

[49] [1974] AC 273, 307-308.

[50] Civil contempt is the sanction against a person who refuses to comply with the order of a properly constituted court. Although it is the individual litigant that is afforded protection in the case of civil contempt, there is nevertheless "an element of public policy in punishing civil contempt, since the administration of justice would be undermined if the order of any court of law could be disregarded with impunity." (per Lord Diplock in Times Newspapers, ibid 308).

[51] Publications which interfere with the due course of justice in particular legal proceedings or publications which interfere with the course of justice as a continuing process: for example. The St James's Evening Post Case (Roach v Garvan) (1742) 2 Atk 469; 26 ER 683; Attorney-General v Sport Newspapers Ltd [1991] 1 WLR 1194; James v Robinson [1963] HCA 32; (1963) 109 CLR 593. Contempt by publication is a controversial and major aspect of the law of contempt as its principles, in effect, restrict what may be "published", and therefore restrict the freedom of speech: for example, see Borrie & Lowe, above n 5, Chs 3 to 10. With respect to publications which interfere with the due course of justice in particular legal proceedings. this type of conduct is often referred to as "trial by media": for example, Attorney-General (NSW) v John Fairfax & Sons Ltd [1980] 1 NSWLR 362, 370-371; Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15. The risk of interference with the due course of justice from such publications arises because inter alia, there is a danger that issues to be determined may be prejudged in the public mind and that the capacity of witnesses and jurors to address the issues properly raised for determination could be compromised. A judgement that has had profound influence on the law of contempt of court in respect of publications is that of Jordan CJ in Ex parte Bread Manufacturers Ltd; Re Truth and Sportsman Ltd [1937] NSWStRp 22; (1937) 37 SR (NSW) 242, 249-250. In respect of publications which interfere with the course of justice as a continuing process, there are 2 types: those which scandalise the court: for example, R v Dunbabin; Ex parte Williams [1935] HCA 34; (1935) 53 CLR 434; Gallagher v Durack [1983] HCA 2; (1983) 152 CLR 238; Re Colina (1999) 166 ALR 545; and those which reveal the deliberations of the jurors in arriving at their verdict.

[52] That is, "in the face of the court", as opposed to contempt committed "ex facie curiae" (committed outside the court). Contempt in the face of the court is generally taken to mean conduct which interferes, disrupts or obstructs the trial process itself; and such contempt can only occur when the court is in session. Conduct within this category is varied and has included assaulting or threatening persons in court, insulting the judge (R v Hill [1986] Crim LR 457) and disrupting court proceedings by invading the court room and conducting a group protest (Morris v Crown Office [1970] 2 QB 114). Other examples include Registrar, Court of Appeal v Collins [1982] 1 NSWLR 682; Fraser v R [1984] 3 NSWLR 212; European Asian Bank AG v Wentworth (1986) 5 NSWLR 445; Re Goldman [1968] 3 NSWR 325. See Australian Law Reform Commission, Improper Behaviour in Court, Research Paper No 2, 48; Australian Law Reform Commission, Contempt: Disruption, Disobedience and Deliberate Interference, Discussion Paper No 27; and Australian Law Reform Commission, above n 30, paras 69-143.

[53] Conduct in this category includes interference with persons having duties to discharge in a court of justice, interference with parties to an action and abuse of a court's processes. See generally Borrie & Lowe, above n 5, Ch 11.

[54] It appears that the standard of proof is the criminal standard of proof as all proceedings for contempt, whether civil or criminal contempt, must be seen as criminal in nature: Attorney-General v Newspaper Publishing Plc [1988] Ch 333; Witham v Holloway (1995) 183 CLR 525.

[55] See, for example, Attorney-General v Mundey [1972] 2 NSWLR 887; James v Robinson [1963] HCA 32; (1963) 109 CLR 593.

[56] Re Colina (1999) 166 ALR 545, 579 (per Hayne J).

[57] [1988] Ch 333.

[58] John Fairfax & Sons Pty Ltd v McRae [1955] HCA 12; (1955) 93 CLR 351, 371 (per Dixon CJ, Fullagar, Kitto and Taylor JJ).

[59] [1963] 1 QB 696, 722.

[60] Ibid 726.

[61] Brambles Holdings Ltd v Trade Practices Commission and Another [1926] VicLawRp 47; (1980) 32 ALR 328; Supreme Court Registrar, Equity Division v McPherson [1980] 1 NSWLR 688, 700 (per Moffitt P and Hope JA).

[62] [1904] HCA 38; (1904) 2 CLR 139.

[63] Johns Waygood Ltd v Utah Australia Ltd [1963] VicRp 11; [1963] VR 70, 72-73; Ex parte Walker [1924] NSWStRp 1; (1924) 24 SR (NSW) 604.

[64] With whom Barton and O'Connor JJ concurred.

[65] [1904] HCA 38; (1904) 2 CLR 139, 160-161. Stephen J in BLF [1982] HCA 31; (1982) 152 CLR 25, 69, held that, "[a]s a matter of principle there would seem to be no reason why what occurs in the course of proceedings in public of a commission should be inherently incapable of giving rise to a contempt of court; Mr Justice Inglis Clark, in his Studies in Australian Constitutional Law, expressly recognizes at pp 230-231 that there may be circumstances in which the investigations of a commission of enquiry will be in contempt of court. Such a commission is, after all, no more than a process of executive enquiry and unless constitutionally valid statutory authority for what is complained of as contempt can be made out, the process would seem to have no claim to special exemption from the general law of the land."

[66] An adverse finding by a royal commission does not amount in law to a conviction of a criminal offence: BLF [1982] HCA 31; (1982) 152 CLR 25. It is possible to be in contempt of royal commissions. However, as the common law only recognises contempt of court and contempt of a parliament, the power to punish for contempt of a royal commission is entirely statutory. See E Campbell, "Contempt of Royal Commissions" in Contemporary Legal Issues No 3 (1984) Faculty of Law, Monash University.

[67] (1940) 63 CLR 81, 83-84, 88-91, 93-102 and 105-106. In McGuinness, a Commission had been appointed to inquire into and report on the question whether certain criminal offences had been committed, in particular, the enquiry was into allegations of attempted bribery involving members of the Victorian Parliament. Somewhat inconsistent authority to the principle in Clough v Leahy is arguably, to be found in Lockwood v The Commonwealth [1954] HCA 31; (1954) 90 CLR 177, 185. Fullagar J, in the course of disposing of an ex parte application, held that, no question of contempt of court could arise in the circumstances of the case since the Royal Commission in question had been authorised by statute. His Honour held, "[n]o court could hold, in any circumstances which I find it possible to envisage, that what is expressly authorized by or under a statute is a contempt, and it is a rule of the common law that the common law itself gives way to statute law." However, this statement has to be interpreted in its context: BLF [1982] HCA 31; (1982) 152 CLR 25, 54 and 72 (per Gibbs CJ and Stephen J respectively); Pioneer Concrete (Vic) Pty Ltd r Trade Practices Commission ("Pioneer Concrete") [1982] HCA 65; (1982) 152 CLR 460, 473 (per Mason J); Watson 99 ATC 5313, 5319 (per Heerey J).

[68] (1940) 63 CLR 81, 85. This passage cited with approval by Heerey J in Watson 99 ATC 5313, 5319.

[69] This proposition also applies where the pending proceedings are civil in nature: E Campbell, above n 66, 6.

[70] (1982) 152 CLR 188.

[71] Gibbs CJ, Mason, Murphy and Brennan JJ (Deane J dissenting).

[72] (1982) 152 CLR 188, 199 (per Gibbs CJ, with whom Mason J agreed): "There is no suggestion that the Commissioner will report directly on the question whether the plaintiff is guilty of the offence charged. It is a mere speculative possibility that anything in his report will affect the plaintiff's trial."

[73] With whom Mason, Murphy and Brennan JJ agreed.

[74] Ibid 198.

[75] Ibid 198.

[76] Ibid 199.

[77] Ibid 202-203.

[78] Ibid 206

[79] Ibid 207.

[80] Ibid 198 (per Gibbs CJ): "In the Builders Labourers' Case I expressed the opinion that, if during the course of a commission's inquiries into allegations that a person had been guilty of criminal conduct, a criminal prosecution was commenced against that person based on those allegations, the continuance of the enquiry would, generally speaking, amount to a contempt of court, and that the proper course would be to adjourn the enquiry until the disposal of the criminal proceedings. Of course, the present enquiry is not simply into allegations against the plaintiff. It is an enquiry into alleged malpractices in connexion with the export of beef that are said to have caused immense damage to the reputation of our meat industry. It would be neither necessary nor right to adjourn this enquiry because a prosecution had been commenced against the plaintiff. But the public interest can be met, and the interest of justice at the same time safeguarded, if the enquiry proceeds to its conclusions without further examination of the plaintiff. I would therefore restrain the defendant from examining or resuming the examination of the plaintiff under the Commissions until the determination of the trial."

[81] A witness appearing before the Commission was subject to the obligation imposed by s 6 of the Royal Commissions Act 1902 (Cth) which made it an offence for a person appearing before a Royal Commission to refuse to answer questions. The provisions of s 6DD of the same Act provided that a statement or disclosure in answer to such a question was not admissible in any civil or criminal proceeding.

[82] [1909] HCA 36; (1908) 8 CLR 330.

[83] As amended by Act No 5 of 1908, being the Australian Industries Preservation Act 1907. Section 15B(1) provided that: "If the Comptroller-General believes that an offence has been committed against this Part of this Act, or if a complaint has been made in writing to the Comptroller-General that an offence has been committed against this Part of this Act and the Comptroller-General believes that the offence has been committed, he may by writing under his hand require any person whom he believes to be capable of giving any information in relation to the alleged offence to answer questions and to produce documents to him or to some person named by him in relation to the alleged offence."

[84] [1909] HCA 36; (1908) 8 CLR 330, 354 (per Griffith CJ).

[85] Ibid 379-380.

[86] [1912] HCA 69; (1912) 15 CLR 333.

[87] Ibid 341.

[88] Ibid 346.

[89] It has in fact been held by the High Court that their Honours were referring to contempt of court: Pioneer Concrete [1982] HCA 65; (1982) 152 CLR 460, 466-467 (per Gibbs CJ) and 475 (per Murphy J).

[90] [1926] VicLawRp 47; (1980) 32 ALR 328.

[91] Ibid 335.

[92] Ibid 339-341.

[93] Ibid 338.

[94] Ibid.

[95] [1979] AC 440, 449.

[96] [1974] AC 273, 322.

[97] Ibid 340.

[98] Ibid.

[99] [1963] 1 QB 696.

[100] Melbourne Steamship [1912] HCA 69; (1912) 15 CLR 333, 346 (per Barton J).

[101] Ibid 341(per Griffith CJ).

[102] The argument of counsel for Brambles Holdings was in fact, along these lines: [1926] VicLawRp 47; (1980) 32 ALR 328, 338. See, for example, C Cairns, Australian Civil Procedure (3rd ed, 1992).

[103] [1926] VicLawRp 47; (1980) 32 ALR 328, 341-342. The Commission was ordered to pay the company its costs of the motion as between solicitor and client.

[104] Ibid 341.

[105] The evidence of the Chairman of the Trade Practices Commission, a Mr Bannerman, was that he had issued the s 155 notice upon the suggestion and advice of a senior counsel. At the time he issued the notice, Mr Bannerman believed that he had the power to do so and that it was appropriate to issue it. He was aware that the questions asked in the notice were relevant to the issues in the pending proceedings against the taxpayer, that the answers were to be used in evidence and that the dominant purpose for the notice was to gather this information. Although Mr Bannerman had some doubts about the power to use s 155 in the course of Court proceedings, he took the view that senior counsel's advice should be relied upon.

[106] Hammond (1982) 152 CLR 188, 202-203 (per Brennan J).

[107] In De Vonk 95 ATC 4820, 4839, Hill and Lindgren JJ (jointly) suggest that a failure on the part of the Commissioner to take account of the possibility of contempt of court from the conduct of a s 264 enquiry could also invalidate a s 264 notice.

[108] Ibid. There is an equivalent principle in respect of s 263: Commercial Bureau (Aust) Pty Ltd v Allen; Ex parte FC of T 84 ATC 4198.

[109] 92 ATC 4114.

[110] [1989] HCA 21; (1989) 166 CLR 486.

[111] 92 ATC 4114.

[112] Ibid 4120. Wilcox J acknowledged the force of the argument that Parliament might have chosen clearer words to convey its intention to abrogate the privilege against self-incrimination in ss 8C and 8D of the TAA. However, his Honour did not doubt the correctness of Hill J's conclusion in Stergis 89 ATC 444, and respectfully adopted it.

[113] Ibid.

[114] Section 541 provides that: "(1) In this section, a reference, in relation to a corporation, to a prescribed person, shall be construed as a reference to an official manager, liquidator or provisional liquidator of the corporation or to any other person authorized by the Commission to make applications under this section or to make an application under this section in relation to that corporation. (2) Where it appears to the Commission or to a prescribed person that - (a) a person who has taken part or been concerned in the promotion, formation, management, administration or winding up of, or has otherwise taken part or been concerned in affairs of, a corporation has been, or may have been, guilty of fraud, negligence, default, breach of trust, breach of duty or other misconduct in relation to that corporation; or (b) a person may be capable of giving information in relation to the promotion, formation, management, administration or winding up of, or otherwise in relation to affairs of, a corporation, the Commission or prescribed person may apply to the Court for an order under this section in relation to the person. (3) Where an application is made under sub-section (2) in relation to a person, the Court may, if it thinks fit, order that the person attend before the Court on a day and at a time to be fixed by the Court to be examined on oath or affirmation on any matters relating to the promotion, formation, management, administration or winding up of, or otherwise relating to affairs of, the corporation concerned. (4) An examination under this section shall be held in public except to such extent (if any) as the Court considers that, by reason of special circumstances, it is desirable to hold the examination in private. (5) The Court, on making an order for an examination, or at any later time, on the application of any person concerned, may give such directions as to the matters to be inquired into, and, subject to sub-section (4), as to the procedure to be followed (including, in the case of an examination in private, directions as to the persons who may be present), as it thinks fit. ... (8) A person attending before the Court for examination pursuant to an order made under sub-section (3) shall not refuse or fail to answer a question that he is directed by the Court to answer. Penalty: $10,000 or imprisonment for 2 years, or both. ... (12) 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 but, where the person claims, before answering the question, that the answer might tend to incriminate him, the answer is not admissible in evidence against him in criminal proceedings other than proceedings under this section or other proceedings in respect of the falsity of the answer. (13) The Court may order the questions put to a person and the answers given by him at an examination under this section to be recorded in writing and may require him to sign that written record. (14) Subject to sub-section (12), any written record of an examination so signed by a person, or any transcript of an examination of a person that is authenticated as provided by the rules, may be used in evidence in any legal proceedings against the person. ... (17) The Court may, if it thinks fit, adjourn the examination from time to time. ..."

[115] De Vonk 95 ATC 4820, 4827 (per Foster J): "It is to be observed that the examination contemplated by the section is to be conducted by the Court and under its control and direction; the privilege against self-incrimination is expressly abrogated; the answering of questions is compulsory; and, subject to the appropriate claim being made, the answers are not admissible in criminal proceedings against the examinee. The structure, operation and underlying purpose of the section are clearly different from the sections involved in the present case."

[116] Mahoney, Priestley, Clarke JJA.

[117] Mason CJ, Dawson, Toohey JJ (Deane and Gaudron JJ jointly dissenting).

[118] De Vonk 95 ATC 4538 (per Can J).

[119] Ibid 4829 (per Foster J): "A consideration of the judgements in Hamilton v Oades therefore satisfies me that the case is not authority for any proposition that the doctrine of contempt of court cannot coexist with the abrogation of the privilege against self-incrimination. In particular, it provides no rationale whereby the provisions of ss 8C and 8D of the Administration Act must necessarily be taken, as a matter of construction, to have excluded those considerations. Accordingly, I must respectfully disagree with the opinion of Wilcox J in Donovan and agree with the opinions expressed by Carr J at first instance and by Hill and Lindgren JJ in this appeal. ... The respondent is entitled to rely upon the doctrine of contempt of court in the projected examination of him under s 264, even though he is not entitled to rely on the privilege against self-incrimination."

[120] Ibid 4839 (per Hill and Lindgren JJ jointly): "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 s264 of the Act and ss8C and 8D of the Taxation Administration Act to have authorised the compulsory interrogation of persons in circumstances where to do so 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 unambiguous."

[121] One of the three offences with which De Vonk was charged alleged a dishonest representation to the Australian Taxation Office that the income of the partnership was exempt income.

[122] 95 ATC 4820, 4831 (per Hill and Lindgren jointly).

[123] Mr Ross, an Audit Manager, at whose instance the s 264 notice had been issued. In his affidavit, Mr Ross said, inter alia, that he had approved 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".

[124] 95 ATC 4820, 4831. Although Hill & Lindgren JJ (jointly) noted that "the evidence of Mr Ross the tax officer at whose instance the s 264 notice had been issued] 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".

[125] Ibid. Hill & Lindgren JJ (jointly) held that the notice would have been invalid "if one of the purposes for which it was issued was an improper purpose provided that such purpose was a not insignificant purpose." However, because Mr Ross was not cross-examined on this point, and the inference had not been put to him, "in our view, however, it would be conducive of injustice for such an inference to be drawn adverse to Mr Ross".

[126] Ibid 4836.

[127] Ibid.

[128] See also Pioneer Concrete [1982] HCA 65; (1982) 152 CLR 460, 473 (per Mason J).

[129] 95 ATC 4820, 4839 (per Hill and Lindgren JJ).

[130] Ibid 4824 (per Foster J).

[131] Ibid 4826: "As pointed out by Carr J, the present case would seem to provide an even stronger example of such injustice insofar as the respondent is provided with no statutory safeguard in respect of his compulsory answers. Why, then, should not the respondent receive the same protection as the witness in Hammond?"

[132] Ibid 4830 (per Foster J): "The making of an appropriate declaratory order is not without difficulty ... ". Hill and Lindgren JJ also held that it was not appropriate to make a declaration in hypothetical and advisory terms (4839).

[133] The taxpayer argued that the decision to give the notice was not authorised by s 264(1)(b) of the ITAA36 (ADJR Act s 5(2)(d)) and/or involved an improper exercise of the power so conferred (ADJR Act s 5(1)(e)).

[134] Other grounds were that the notice was prima facie, invalid and the notice did not concern any person's "income or assessment".

[135] 99 ATC 5313, 5317-5319. The issue of contempt of administrative proceedings is beyond the scope of this article.

[136] Ibid 5322.

[137] [1974] AC 273.

[138] 99 ATC 5313, 5322.

[139] If trial is in fact prejudiced, the accused could have his conviction quashed: R v Taylor (1993) 98 Cr App Rep 361). One would expect that it is immaterial whether the tendency of the interrogation is adverse or favourable to the accused. For example, in respect of contempt from publication, it has been held that, "[t]he tendency of the publication must be judged as at the time of publication and is not determined by the fact that for some reason no harm has resulted from the publication.": R v Pacini [1956] VicLawRp 40; [1956] VLR 544, 547 (per Lowe J).

[140] 95 ATC 4820, 4836.

[141] 99 ATC 5313, 5323.

[142] See, for example, James v Robinson [1963] HCA 32; (1963) 109 CLR 593. The proceedings cannot be merely "contemplated": Saunders v FC of T 88 ATC 4349. In the United Kingdom, in relation to publications which interfere with the due administration of justice in particular legal proceedings, the question of when proceedings begin for the purposes of this species of contempt of court is a controversial aspect of the timing issue. The common law position there seems to be that the law of contempt applies when proceedings are pending. and almost certainly too, when they can be characterised as "imminent": see for example, Times Newspapers [1974] AC 273 (per Lord Diplock); R v Parke [1903] UKLawRpKQB 151; [1903] 2 KB 432, 437 (per Wills J); R v Daily Mirror; ex parte Smith [1927] 1 KB 845, 851 (per Lord Hewart CJ).

[143] 95 ATC 4538, 4548. See also BLF [1982] HCA 31; (1982) 152 CLR 25, 56 (per Gibbs CJ): "The question whether there is an actual intention or purpose to interfere with proceedings is always relevant but never decisive ...." In this respect therefore, the position on mens rea is consistent with the view of Donovan LJ in Attorney-General v Butterworth, [1963] 1 QB 696. See also Brambles Holdings [1926] VicLawRp 47; (1980) 32 ALR 328.

[144] 99 ATC 5313, 5322.

[145] The presence of such an intention to interfere with the due course of justice may be viewed as an aggravating factor: [1956] VicLawRp 40; [1956] VLR 544.

[146] (1982) 152 CLR 188.

[147] Ibid 207.

[148] 95 ATC 4538, 4549. The Full Federal Court does not appear to have canvassed this issue.

[149] 95 ATC 4538, 4548.

[150] 150 (1982) 152 CLR 188, 206.

[151] [1982] HCA 65; (1982) 152 CLR 460.

[152] Contravention of s 45 led to exposure to penalties but not criminal proceedings: TPA, ss 76 and 78.

[153] [1982] HCA 65; (1982) 152 CLR 460, 470 (per Mason J).

[154] [1981] FCA 119; 36 ALR 151.

[155] [1982] HCA 65; (1982) 152 CLR 460, 468, Gibbs CJ held that: "[n]o doubt it is right to say that the power conferred by the section might in some case be used so as improperly to interfere with judicial proceedings. I incline to think that if the power were used to assist a party in proceedings already pending, in a way that would give such a party advantages which the rules of procedure would otherwise deny him, there would be a contempt of court." Mason J (474) also held that, "[s]ection 155, cast as it is in general terms, does not address itself to the question of contempt of court. It should therefore be read as not authorizing any action on the part of the Commission which would amount to a contempt."

[156] Ibid.

[157] Only 2 justices, Gibbs CJ and Mason J, considered the question of contempt of court with any detail.

[158] [1982] HCA 65; (1982) 152 CLR 460, 474 (per Mason J): "... there is no reason to suppose that the Commission seeks information for other than a legitimate reason, that is, to perform its functions under the Act. The very existence of the Ro-Mix proceedings poses the question whether there has been a contravention of the Act. It is a question which the Commission has a statutory obligation to investigate. The issue of a s 155 notice is an obvious mode of investigating the matter. There is no evidence to support an inference that the Commission in issuing the notices is concerned to assist the parties in the Ro-Mix proceedings, rather than to investigate for itself the question whether there has been a contravention of the Act." Gibbs CJ also held that if the powers in s 155 were used to secure an advantage for a party to the proceedings, there would be a contempt of court. His Honour (468) held that, "[n]o doubt it is right to say that the power conferred by the section might in some case be used so as improperly to interfere with judicial proceedings. I incline to think that if the power were used to assist a party in proceedings already pending, in a way that would give such a party advantages which the rules of procedure would otherwise deny him, there would be a contempt of court. ... In the present case it was not shown that the person who gave the notice had any intention to interfere with the course of justice, or that there was a real risk that the exercise of the powers under s 155 would in the circumstances have that effect."

[159] [1982] HCA 65; (1982) 152 CLR 460, 474.

[160] Ibid 468.

[161] Ibid 465.

[162] Ibid 474 (per Mason J).

[163] Ibid 468.

[164] For example, TAA, s 3C imposes secrecy obligations on past and present tax officers in respect of information acquired under or for the purposes of the TAA. The equivalent section in the ITAA36 is s 16. In simple terms, the effect of s 3C is that a past or present "officer" is prohibited from directly or indirectly recording or disclosing information concerning the affairs of a person unless it is for the purposes of the TAA or it is otherwise in the course of the performance of the duties of the officer. The information referred to is information "disclosed or obtained under or for the purposes of" the TAA and acquired by the person by reason of the person's appointment or employment by the Commonwealth or by reason of the delegation of powers by the Commissioner: s 3C(2). The maximum penalty for a breach of s 3C(2) is a $10,000 fine and/or two years' imprisonment. The effect of the provisions in TAA were in fact, considered in De Vonk 95 ATC 4820.

[165] [1904] HCA 38; (1904) 2 CLR 139, 161-162.

[166] [1982] HCA 31; (1982) 152 CLR 25, 54.

[167] 95 ATC 4820, 4836.

[168] In a somewhat circular argument, it could also be argued that the exercise is beyond power because the exercise amounts to a contempt of court. In Pioneer Concrete [1982] HCA 65; (1982) 152 CLR 460, 473, Mason J considered this very issue of the relationship between purpose and contempt of court in the context of s 155 TPA. Having concluded that s 155 was subject to the doctrine of contempt of court, his Honour held that, "[w]hether this leads to the conclusion that any action by the Commission which amounts to a contempt would necessarily stand outside the power which the section confers is a larger and more difficult question." His Honour then held that it was preferable to interpret s 155 as "conferring power on the Commission to act in accordance with its terms, but subject to the law of contempt, so that action taken under the section is subject to the exercise by the Federal Court of its contempt powers." Mason J held that this was "a more sensible construction of the sub-section, one which avoids locating the ambit of the power at the point, not readily identifiable, where contempt begins. There are advantages in keeping questions of power and contempt separate."

[169] In the introductory remarks to the 1996 edition of Borrie and Lowe, above n 5, it was acknowledged that "[t]he concept of the risk of prejudice is sufficiently flexible to include any potentially real interference with a fair trial no matter how novel the interference is."

[170] The premise being that: the charges relate to the tax affairs of the taxpayer; the Commissioner wishes to conduct a s 264 enquiry for the purposes of the ITAA36; and that there may be an overlap in the issues proposed to be examined pursuant to the s 264 enquiry and those matters which would be the subject of the criminal charges.


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