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Migration Agents Registration Authority v Frugtniet [ 2018] FCAFC 5  (30 January 2018)

Last Updated: 30 January 2018

FEDERAL COURT OF AUSTRALIA

Migration Agents Registration Authority v Frugtniet  [2018] FCAFC 5 

ORDERS

THE COURT ORDERS THAT:

1. Leave be refused to the appellant to rely on proposed ground 3 of its notice of appeal.
2. Leave be refused to the respondent to rely on his further amended notice of contention.
3. The appeal be allowed with costs.
4. The orders of the primary judge be set aside.
5. The respondent’s appeal from the decision of the Administrative Appeals Tribunal be dismissed with costs.

REASONS FOR JUDGMENT

THE COURT:

1. This is an appeal by the Migration Agents Registration Authority (MARA) from orders made by a judge of this Court, which set aside a decision of a Deputy President of the Administrative Appeals Tribunal (AAT) with costs and remitted the matter to be heard by a differently constituted Tribunal. The Deputy President had affirmed a decision of MARA to cancel the registration of the respondent, Mr Rudy Frugtniet, as a migration agent.
2. Three decisions of the AAT are relevant:

(1) The first decision was that of an AAT conference registrar, in making procedural directions for the parties to prepare the matter for hearing, including the direction that Mr Frugtniet give to the AAT and to MARA:

(a) witness statements from any witnesses he proposed to call at the hearing;
(b) all reports, records and other documents upon which he intended to rely at the hearing; and
(c) a statement of facts, issues and contentions.

(2) The second decision was that of the Deputy President in respect of an objection raised by Mr Frugtniet to providing, in accordance with the AAT conference registrar’s procedural directions, a statement of his own evidence or of any other witnesses he might wish to call, based upon an assertion of privilege against exposure to a penalty (penalty privilege). The Deputy President gave detailed reasons for finding that penalty privilege did not apply to the AAT’s processes in the absence of statutory provision to that effect, and made procedural directions in the same terms as those made by the AAT conference registrar, varied only as to the dates for compliance.
(3) The third decision was that of the Deputy President, affirming the decision of MARA to cancel Mr Frugtniet’s registration as a migration agent.

3. Following an appeal from the AAT by Mr Frugtniet, the primary judge overturned the Deputy President’s final decision upon the basis that penalty privilege was available to Mr Frugtniet in the Tribunal proceedings. Her Honour found that the possibility of a different outcome, had the penalty privilege claim been upheld, could not be excluded.
4. In this appeal, MARA’s principal assertion is that the primary judge erred in concluding that penalty privilege applied to Mr Frugtniet’s proceedings before the AAT. To this end, it is submitted by MARA that High Court authority dictates that penalty privilege is not a substantive rule of law and does not apply outside curial processes in the absence of statutory provision to that effect. In response, Mr Frugtniet defends the primary judge’s conclusions. In the alternative, Mr Frugtniet asserts, by way of a further amended notice of contention, that the primary judge’s decision to set aside the Deputy President’s decision to affirm the cancellation of his registration should be upheld on grounds other than those relied upon by her Honour. MARA’s alternative grounds of appeal only need to be considered if the challenge to the application of penalty privilege to the AAT’s processes fails, or if Mr Frugtniet’s further amended notice of contention is upheld.
5. For the reasons that follow:

(1) MARA’s primary ground of appeal should succeed and the application to review the (third) decision of the Deputy President should be dismissed.
(2) Mr Frugtniet’s further amended notice of contention should not be entertained, on the basis that it relies upon matters that were not raised squarely or at all before the primary judge.
(3) The remaining grounds of appeal advanced by MARA do not need to be considered.

The question to be determined

6. The question of the availability to Mr Frugtniet of penalty privilege in his AAT proceedings arises in the context of several decisions of the High Court that were construed and applied differently by the Tribunal and the primary judge. Relevantly, the AAT followed statements of the High Court in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543 and Rich v Australian Securities and Investments Commission [2004] HCA 42; 220 CLR 129, to the effect that penalty privilege is not a substantive rule of law and does not apply outside judicial proceedings. In determining Mr Frugtniet’s appeal from the AAT, the primary judge rejected this approach. Her Honour concluded that the correct position was reflected in Sorby v Commonwealth [1983] HCA 10; 152 CLR 281, Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; 152 CLR 328 and Police Service Board v Morris [1985] HCA 9; 156 CLR 397, and had not been altered by the High Court’s later observations in Daniels and Rich. Accordingly, her Honour found that penalty privilege was available in the AAT proceedings.
7. The outcome of this appeal largely turns on the interpretation of the above High Court authority, as applied to the question of the availability to Mr Frugtniet of penalty privilege in his merits review proceedings before the AAT. While this Court has been invited by MARA to determine the wider question of whether penalty privilege applies at all outside purely judicial proceedings, as a pathway to determining whether the primary judge had erred, it is best that this appeal is not determined on any basis wider than it needs to be. That limited approach avoids traversing decisions of non-federal intermediate appeal courts dealing with this issue in the context of non-federal tribunals, which have a very different legislative and constitutional context and may have a judicial character of a kind that cannot exist in the federal arena. It also avoids traversing, at least directly, other federal non-judicial arrangements, such as the Fair Work Commission, which are quite different in nature, operation and legislation. This Court does not need to go beyond determining the application of penalty privilege to these particular AAT proceedings and, accordingly, should not do so.

High Court authority on penalty privilege

8. The state of High Court authority relevant, or arguably relevant, to the application of penalty privilege involves only a handful of key decisions. However, there is a degree of complexity in interpreting those decisions to discern the final resting place as to the scope of the availability of penalty privilege outside a purely curial setting. As observed below, each decision arose in a particular statutory and factual context and certain of the propositions that are central to this case were, in some instances, expressly or impliedly assumed in order to focus on the live issue at hand. Furthermore, other propositions are the subject of obiter dicta only, calling for the resolution of potentially inconsistent observations of the High Court, including as to the meaning of its own prior decisions.
9. As to assumptions made in the course of High Court decisions, it is well-established that a proposition of law that is incorporated into reasoning by an assumption as to its correctness is not thereby made binding by that Court, even if it forms part of the ratio decidendi: CSR Limited v Eddy [2005] HCA 64; 226 CLR 1 at [13]. As to comments made in the course of High Court decisions, this Court is required to follow “seriously considered dicta”, at least when uttered by a majority of the High Court, following Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [158] and [178].
10. It follows that an assessment may be required as to whether the burden of a comment made by the High Court falls within the ambit of being “seriously considered dicta”. In this case, a central collateral issue concerns the effect to be given to a comment made by the High Court about the meaning of prior decisions of that Court, differently constituted. Even if such a comment cannot be regarded as “seriously considered dicta” so as to fall directly within Farah, the safest and soundest approach is to take it at face value and endeavour to give effect to it. That approach reflects the principled reality that the High Court must always be the final arbiter of what the High Court meant in earlier decisions, perhaps especially in relation to the meaning of principles to be derived from earlier decisions required to be applied later in a different factual and statutory context.

Pyneboard Pty Ltd v Trade Practices Commission

11. The analysis commences with Pyneboard. In that case, the Trade Practices Commission had issued a notice requiring the production of documents under s 155(1) of the then Trade Practices Act 1974 (Cth) (TPA). The corresponding body is now the Australian Competition and Consumer Commission (ACCC), and the corresponding provision is now s 155(1) of the Competition and Consumer Act 2010 (Cth) (CCA). Relevantly, s 155(7) of the TPA provided that a person was not excused from complying with a requirement to furnish information or produce a document on the ground that to do so might tend to incriminate him or her. That is, the privilege against self-incrimination in relation to criminal offences was expressly excluded as a valid reason for non-compliance with a notice issued under s 155(1). However, the provision was silent on exposure to a non-criminal penalty (an omission that was later rectified, as reflected in s 155(7) of the CCA). The question considered by the High Court was whether s 155, despite the limited scope of s 155(7), should be construed as also excluding exposure to a non-criminal penalty as a valid excuse for non-compliance.
12. The High Court in Pyneboard decided that s 155(7) should be interpreted to mean that the risk of exposure to a non-criminal penalty was not a lawful excuse for non-compliance with a s 155 notice, aligning penalty privilege with the privilege against self-incrimination for the purposes of that provision. In reaching that conclusion, the plurality (Mason ACJ, Wilson and Dawson JJ) observed as follows:

(1) the privilege against exposure to punishment (by conviction for a crime), to a penalty, to forfeiture or to “ecclesiastical censure” are “four different aspects or grounds of privilege”: at 336.8;
(2) the construction of s 155 was to be approached “on the footing that the privilege of refusing to answer questions or provide information on the ground that the answers or the information might tend to expose the party to the imposition of a civil penalty is ... distinct from, though often associated in discussion with, the privilege against exposure to conviction for a crime”: at 337.5;
(3) after considering a range of authority in support of and opposing the proposition that “the privilege against exposure to a penalty is confined in its application to testimonial disclosures in judicial proceedings and is inherently incapable of application in non-judicial proceedings”, including opposing views in prior authority, such as those of intermediate appeal courts, overseas courts, and the High Court, their Honours were “not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings”: at 337.6 to 341.5;
(4) the issue of the availability of penalty privilege in that case was to be decided by reference to the statute itself, bearing in mind the general principle that a statute will not be construed to take away a common law right without clear legislative intent, whether express or by necessary implication: at 341.6;
(5) penalty privilege “will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification”: at 341.7;
(6) following consideration of authority dealing with public examinations under company legislation and laws pertaining to breath analysis of motor vehicle drivers, the proper construction of s 155 was that penalty privilege did not exist or apply in relation to a notice under that section; to find otherwise would be contrary to the overall purpose of the power bestowed: at 342-3;
(7) while this interpretation, “strictly speaking”, made the first part of s 155(7) redundant to the extent that it provided for abrogation of the privilege against exposure to criminal punishment, the inclusion of that provision was explicable by the desirability of spelling out, in the balance of the section, the use to which such material could be put (the details of which do not presently require elaboration): at 344.

13. It is important to have regard to the context for the plurality’s observation in Pyneboard that it was not prepared to find that penalty privilege was inherently incapable of application in non-judicial proceedings. Relevantly, that observation was expressed in the context of reasoning that neither penalty privilege nor the privilege against exposure to criminal punishment applied in the particular, non-curial setting that was under consideration. That conclusion was formed upon the basis of an implicit assumption that the two privileges were relevantly indistinguishable. There was no final determination to that effect, because no such conclusion was necessary in light of the finding that neither privilege applied, one as a matter of express statutory provision, and the other as a matter of statutory construction. However, that approach created a latent problem as to what effect this would have on the different common law right of legal professional privilege. That latent problem came to be addressed much later by the High Court in Daniels, finding, as will be seen, fundamental flaws in the reasoning of the majority of the judgments in Pyneboard.
14. Only Murphy J in Pyneboard, at 346.3, reached a concluded view that the two privileges were relevantly different, and that there was no reason for recognising the application of penalty privilege outside judicial proceedings. That was the view that re-emerged much later as a majority conclusion, albeit obiter, in Daniels. The above reasoning in Pyneboard was held to be wrong in Daniels, insofar as the application of Pyneboard reasoning would have supported the overriding of legal professional privilege for the purposes of s 155 of the TPA. Daniels is discussed in more detail below. Cases that followed Pyneboard must therefore be approached with caution, at least as to reasoning, if not as to the result.
15. The view of the plurality in Pyneboard is not expressed in terms of considering the abrogation by statute of a privilege that was otherwise accepted as existing and therefore applying. Rather, the plurality’s language reflects consideration of whether, if accepted as existing, any such privilege would be excluded or inapplicable as a matter of statutory construction. This approach avoided the need to determine whether such a privilege would otherwise exist in a non-curial setting, before any court proceedings had been commenced by the Commission. Thus it may be seen that the double negative in Pyneboard reproduced at [12(3)] above – “not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings” (emphasis added) – can be read as not necessarily meaning that penalty privilege does apply outside judicial proceedings, but, rather, that it is capable of doing so if the legislative setting permits that conclusion to be reached. As will be seen, that is the way in which the double negative was read by the majority in Daniels, but is not the way in which it was read in the intervening case of Morris. An important issue requiring resolution is whether the view taken in Morris can stand after Daniels. If the double negative is understood in the way that Daniels indicates, Pyneboard is not, in its own terms, authority for the proposition that penalty privilege necessarily does or does not apply to non-judicial proceedings. Rather, the determination of the application of penalty privilege will turn on the particular facts and legislative context in question.

Sorby v Commonwealth

16. The next key High Court case relevant to this topic was Sorby. In that case, a Royal Commissioner had been appointed by letters patent under the Royal Commissions Act 1902 (Cth) and under the Commissions of Inquiry Act of 1950 (Qld). Two persons were called before the Royal Commissioner and were required by him to answer certain questions, despite their claim that their answers might incriminate them. The issue of penalty privilege did not arise. The plurality in Sorby said at 309-310 (footnotes omitted):

The Privilege against Self-incrimination under the State Act
We reject the submission that the privilege is merely a rule of evidence applicable in judicial proceedings and that it cannot be claimed in an executive inquiry. We adhere to the conclusion we expressed in Pyneboard that the privilege against self-incrimination is inherently capable of applying in non-judicial proceedings. ...
The privilege against self-incrimination is deeply ingrained in the common law. The principle is that a statute will not be construed to take away a common law right, including the privilege against self-incrimination, unless a legislative intent to do so clearly emerges, whether by express words or necessary implication ...
... In Pyneboard we concluded that it is less difficult to show that the privilege has been impliedly abrogated in the ordinary case where a statute imposes an obligation to answer questions otherwise than on oath, provide information or produce documents in the course of an administrative investigation than in the case of an examination on oath before a judicial officer whether or not an object of that examination is a preliminary to committal for trial or summary prosecution. As we there said, in deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve ...

17. The judgments in Sorby did not address penalty privilege. It was not an issue in that case. The sole claim made and adjudicated upon was one of privilege against self-incrimination. It follows that Sorby may only be regarded as authority for the proposition that penalty privilege is capable of applying outside a curial setting if it is assumed, or determined, that it is relevantly indistinguishable from the privilege against self-incrimination.
18. In Sorby, it was determined that the Royal Commissions Act impliedly abrogated the common law right of privilege against self-incrimination. That abrogation was derived in part from s 14(2) of that Act, which protected self-incriminating answers given by a witness from being admitted in evidence in subsequent civil or criminal proceedings (except for contempt or giving false evidence). By contrast, the Commissions of Inquiry Act was found not to abrogate the privilege against self-incrimination. Given that the question of penalty privilege was not before the High Court in Sorby, any reliance upon that case to determine the scope of that privilege is inherently problematic. Yet Sorby has been treated as being authority on the application of penalty privilege to non-judicial proceedings, as discussed below.

Police Service Board v Morris

19. The next High Court case in time that is relevant to the scope of penalty privilege was Morris, which was decided almost two years after Pyneboard and Sorby. In Morris, two Victorian police officers were under investigation for disciplinary offences. The relevant police disciplinary regulation provided that “no member of the [Victoria Police] Force shall ... disobey ... any lawful order written or otherwise”. The two officers were ordered by an Inspector to answer questions asked during the course of the disciplinary investigation. Both refused to do so. The judgment of Murphy J at 407 provides an important detail relevant to the distinction between the two privileges:

Here, the two members who refused to answer the questions put to them did so on the basis that they might be charged with disciplinary matters if they answered. At no point did they suggest any fear of criminal prosecution and the interviewer said repeatedly that the questions did not relate to criminal matters but only to matters of a disciplinary nature. ...
Despite the serious nature of some of the penalties, the offences are not criminal. They amount only to breaches of a disciplinary code, dealt with administratively and not judicially ...

20. The two officers were subsequently subjected to disciplinary charges based on their refusal to obey the order. Those disciplinary charges were heard by a disciplinary board, which had a power, inter alia, to reprimand, impose a financial penalty, reduce the officer’s rank, or dismiss the officer from the force. The disciplinary charges were found proved. The finding that the disciplinary charges were proved was upheld on merits review by the Police Service Board.
21. Judicial review in the Supreme Court of Victoria resulted in the decisions of the Police Service Board in Morris being set aside upon the ground that penalty privilege had applied to relieve the officers of the obligation to obey the order to answer questions in the investigation, a result that was upheld by majority in the Victorian Court of Appeal. In turn, that result was overturned following an appeal to the High Court by the Police Service Board and the Inspector who had ordered the answers to be given by the two police officers. By majority, the High Court found that the police officers had not been entitled, on the ground of penalty privilege, to refuse to answer the disciplinary investigation questions when ordered to do so.
22. Gibbs CJ in Morris, at 402.7, after acknowledging that the only peril faced by the two officers was in relation to disciplinary offences, described the substantial questions that fell for determination as “whether the rule of the common law that a party is not bound to answer any question which might tend to expose him to the risk of a criminal conviction or the imposition of a penalty is capable of application to a case such as the present and if so whether it has been excluded by the Act or regulations”. After noting the range of sanctions available to be imposed, his Honour at 403 noted the distinction between the circumstances that might give rise to a claim of privilege against self-incrimination and those that might give rise to a claim of penalty privilege, and said (footnotes omitted):

There is an obvious distinction between criminal offences and breaches of discipline and it is necessary to insist upon that distinction for some purposes ... Nevertheless, although the penalties provided by s. 88 are disciplinary penalties, they are nonetheless penalties, and it is old law, confirmed by modern authority, that a person cannot be compelled to answer a question whenever the answer would tend to expose him to "any kind of punishment" - "anything in the nature of a penalty" ... Moreover, it is now accepted that the privilege is capable of application in non-judicial proceedings: Pyneboard Pty. Ltd. v. Trade Practices Commission [footnote reference to page 340]; Sorby v. The Commonwealth [footnote reference to page 309].

23. Gibbs CJ effectively assumed that because the consequences of being compelled to answer a question (and thereby giving rise to a claim of either privilege) may be relevantly indistinguishable, the two privileges themselves must also be relevantly indistinguishable. This led to the compendious reference in the last sentence of the passage quoted above to “the privilege”, being a single or combined privilege. However, that implicit assumption of relevant similarity between the two privileges is distinct from any similarity between the circumstances in which they may arise, or any similarity in the consequences which they may be used to avoid. The interpretation that an assumption of similarity between the privileges was made by Gibbs CJ because of similarity of the circumstances in which they may arise, or in the consequences which they are relied upon to avoid, is aided by considering the passages from Pyneboard and Sorby referred to in the passage reproduced above, which were said to constitute acceptance of “the privilege” being capable of application in non-judicial proceedings.
24. The passage from Pyneboard at 340, cited in the footnote to the above passage from the judgment of Gibbs CJ in Morris, was part of a discussion by the plurality of the competing views in prior authority about whether or not penalty privilege should be confined to judicial proceedings. That discussion led, in Pyneboard at 341, to the plurality’s arguably inconclusive double negative statement that they were not prepared to find that penalty privilege was inherently incapable of application in non-judicial proceedings. The passage from Sorby at 309, cited in the footnote to the above passage quoted from the judgment of Gibbs CJ in Morris, is reproduced at [16] above, and refers only to privilege against self-incrimination.
25. Thus, Gibbs CJ’s decision in Morris, by referring to “the privilege”, reflects an implicit assumption that the privilege against self-incrimination and penalty privilege were relevantly indistinguishable for the purposes of deciding that case, an assumption that is not binding on this Court: Eddy at [13]. Having effectively made the assumption that what was under consideration amounted to a single or combined privilege, Gibbs CJ at 403.9 stated that it was “right to start with the assumption that the rule which confers the privilege is capable of applying to a statutory provision which requires members of the police force to answer questions tending to show the commission by them of disciplinary offences”.
26. At 404.7 in Morris, Gibbs CJ found that the character of the police regulation, which was primarily designed to compel obedience to an order rather than to answering questions, indicated both that the application of “the privilege” would be inappropriate and that the obligation to obey an order was not intended to be subject to any unexpressed qualification.
27. Murphy J, in Morris at 406.8, adhered to the position his Honour had previously expressed in Pyneboard that the privilege against self-incrimination did not extend to self-exposure to non-criminal processes, and that penalty privilege did not apply outside judicial proceedings. His Honour therefore concluded that there was no available privilege for the two officers to rely upon, rather than it being excluded by the regulation. His Honour maintained a distinction between the two privileges and thus dissented as to the reasoning, rather than as to the result.
28. Wilson and Dawson JJ, in Morris at 407-8, adopted the articulation of the issue before the High Court by Gibbs CJ as concerning a rule of the common law that encompassed both the privilege against self-incrimination and penalty privilege, also referring to them as “the privilege” and thus compendiously as a single or combined privilege. Their Honours therefore also implicitly assumed that the two privileges were relevantly indistinguishable, which, again, is an assumption that is not binding on this Court. Their Honours at 408.3 and 410.3, found that, while this single or combined privilege was inherently capable of applying to a statutory provision requiring members of the police force to obey an order to answer questions that tended to show the commission of disciplinary offences, the breadth of the police disciplinary regulation compelling obedience was such as to admit no such qualification. Their Honours stated at 410.6:

The legislature must have intended that any cause for suspicion touching a member's performance of his duties could be the subject of interrogation by a superior officer and that the member would be obliged to answer the questions put to him whether or not those answers would tend to incriminate him. With all respect to those who take a different view, we would have thought that the efficiency of the force demands this and the loyalty promised by every member when he takes the oath prescribed by the Act reinforces it.

29. Brennan J in Morris took much the same approach as Gibbs CJ and Wilson and Dawson JJ insofar as his Honour referred to “the privilege” without distinguishing between the two privileges. His Honour effectively made the same non-binding assumption that the two privileges were relevantly indistinguishable, before deciding that this compendious single or combined privilege did not apply. His Honour said at 411 (footnotes omitted):

In Pyneboard Pty. Ltd. v. Trade Practices Commission and in Sorby v. The Commonwealth a majority of the Court held that the privilege against self-incrimination is capable of applying to non-judicial proceedings and of qualifying an obligation to answer questions asked outside judicial proceedings in exercise of a statutory power. Whether an obligation arising under a particular statute is qualified by the privilege depends on the intention of the legislature - an intention that is likely to be uncertainly perceived if the statute does not make an express provision. This is such a case. I agree that the factors referred to by the Chief Justice tend to show that reg. 95A(7) of the Police Regulations 1957 (Vic.) intends to exclude the privilege and to leave without qualification the obligation cast on a subordinate police officer to obey an order by a superior officer to answer a question asked of the subordinate as to his activities whilst on duty.

30. Thus it may be seen that the approach taken by the majority in Morris, in each of the three judgments apart from Murphy J, was one that did not give rise to any need to distinguish between the privilege against self-incrimination and penalty privilege, an approach that departed in that respect from Pyneboard, in which the difference was carefully considered because it had to be, albeit that the decision in Pyneboard then aligned the two privileges for the purposes of the result. The two privileges were treated in Morris as being essentially the same for the purposes of that case, “the privilege” applying unless the legislative context produced a different conclusion. The reasoning in the majority judgments simply did not allow “the privilege” to apply at all in the context of that particular regulatory regime. Because of the implicit assumption that was made in Morris, which is non-binding following Eddy, Morris cannot be regarded as binding authority for the proposition that the privilege against self-incrimination and penalty privilege in law have the same ambit or application. Morris is, at most, authority for the ratio proposition that penalty privilege is capable of applying to a non-curial process, if the terms of the statute in question permit that conclusion to be reached.
31. The penalty privilege asserted in Morris was a reasonably close analogue of the privilege against self-incrimination, involving a claim of the right to remain silent instead of answering questions that could assist in establishing a case against the interviewee, which is quite different from the situation in this case. The differences in the factual framework alone are reason for caution in applying Morris to any substantially different basis or circumstances for asserting the protection of penalty privilege, including, in particular, where a different legislative regime applies.
32. The later decisions of the High Court of Daniels and Rich, which are discussed below, go further in casting doubt on the correctness of the implicit assumption in Morris that penalty privilege is akin to the privilege against self-incrimination, and is capable of applying to a non-curial proceeding unless statutory construction leads to a different conclusion. While the view taken in Pyneboard has been accepted to the extent that penalty privilege, like the privilege against self-incrimination, was considered to be a common law right, both Daniels and Rich contain clear indications, albeit obiter, that the scope for the application of the two privileges, and their essential nature, is not the same.

Daniels Corporation International Pty Ltd v ACCC

33. Almost 18 years after Morris, and almost 20 years after Pyneboard and Sorby, the High Court in Daniels revisited the operation of s 155 of the TPA, but in relation to the operation of legal professional privilege to excuse compliance with a notice issued under that provision. Critical to that decision was the status of the privilege as a fundamental common law right, subject to the principle that statutory provisions were not to be construed as abrogating such a right in the absence of clear words or necessary implication to that effect: see Daniels at [9]-[11]. What is required is a strong or clear implication of abrogation if clear words are absent.
34. The joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Daniels considered the conclusions reached in Pyneboard, ultimately finding that the approach previously taken should not be applied to questions of legal professional privilege claimed in respect of a notice under s 155 of the TPA (now the CCA). That is the ratio decidendi of the decision. However, in reaching that conclusion, their Honours said at [15] that the double negative statement in Pyneboard – “not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings” – did not amount to a holding that penalty privilege is available in non-judicial proceedings. The conclusion that their Honours reached is independently available from a plain reading of the words used in Pyneboard in their context. That interpretation supports the conclusion reached below in our reasons that the application of penalty privilege to non-curial proceedings must be arrived at by a process of statutory construction that results in the privilege applying in a particular context, not a process of statutory exclusion or abrogation of a privilege that is otherwise present.
35. The lack of soundness in the approach taken in Pyneboard, as opposed to the conclusion reached, is reinforced by consideration of the basis upon which the reasoning in Pyneboard was rejected in Daniels. The joint judgment in Daniels makes it clear that fundamental common law rights are not to be excluded by mere implication, which gives effect to the rule in Potter v Minahan [1908] HCA 63; 7 CLR 277 at 304 that “[i]t is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness”. Their Honours considered that Brennan J in Pyneboard had failed to give effect to that rule by allowing penalty privilege to be excluded by mere implication: see Daniels at [11], [16] and [25].
36. The joint judgment in Daniels also considered that, in concentrating on s 155(1) of the TPA, Mason ACJ, Wilson and Dawson JJ failed to have regard both to the scope of the provision and to s 155(2), which permitted what would otherwise be a trespass by authorising entry to premises to inspect documents: see Daniels at [6], [26]-[27]. Their Honours considered that the approach of Mason ACJ, Wilson and Dawson JJ (which was also the approach of Brennan J) of treating the exclusion of the privilege against self-incrimination by s 155(7) of the TPA as otiose was contrary to the general rule that statutory provisions are to be construed by giving effect to their express terms unless that would result in some absurdity; indeed, no absurdity was involved in construing s 155(1) and (2) in accordance with the rule in Potter v Minahan: see Daniels at [28].
37. The combination of the above problems identified in Daniels led to the conclusion of the majority at [29] that the approach in Pyneboard should not be followed for the purpose of determining whether compliance with a s 155 notice could be resisted upon the ground of legal professional privilege. If the reasoning in Pyneboard could not be relied upon for determining whether legal professional privilege applied in relation to the same statutory provision, it is difficult to see how Pyneboard can be relied upon for determining whether penalty privilege applies in a different context. After Daniels, essentially all that is left of Pyneboard in relation to penalty privilege is the result. That conclusion is supported by the alternative explanation that was given in Daniels for the result in Pyneboard.
38. The joint judgment in Daniels observed at [30] that, while the conclusion reached in Pyneboard could be supported because it avoided the absurdity that would result if, in respect of s 155 of the TPA, a person would be able to claim penalty privilege but not the privilege against self-incrimination, a more secure basis for the outcome arrived at was to be found in the nature of penalty privilege. In particular, their Honours observed in part of [31] (footnotes omitted):

Today the privilege against exposure to penalties serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it. However, there seems little, if any, reason why that privilege should be recognised outside judicial proceedings. Certainly, no decision of this Court says it should be so recognised, much less that it is a substantive rule of law.

39. The statement in the passage quoted above, to the effect that no decision of the High Court suggests that penalty privilege is a substantive rule of law, at least has the effect of reading down the passages from Morris above, in which all three judgments comprising the majority referred, without distinction, to the privilege against self-incrimination and penalty privilege as being rules of the common law. Thus, while penalty privilege and the privilege against self-incrimination are both rules of the common law, penalty privilege is not a substantive rule of law. By contrast, the privilege against self-incrimination and legal professional privilege, which are of the same character, are not “merely” substantive rules of law, but, rather, are important common law immunities that are not to be construed as having been abrogated in the absence of clear words or a necessary implication to that effect: Daniels at [11].

Rich v Australian Securities and Investments Commission

40. In Rich, the High Court held that a person facing civil penalty proceedings for alleged wrongdoing in relation to the running of a corporation was entitled to rely upon penalty privilege to avoid being forced to participate in discovery in proceedings brought by the Australian Securities and Investments Commission (ASIC) in the Supreme Court of New South Wales. It was therefore necessarily a case about penalty privilege in a curial setting. In a joint judgment, five justices at [24] restated the dicta in Daniels to the effect that, while those alleging criminality or other illegality should prove it, that did not mean that penalty privilege was a substantive rule of law having application beyond judicial proceedings. The context for that restatement was the observation made earlier in Daniels that penalty privilege had a curial origin in the rules of equity relating to discovery and interrogatories – that is, compulsory court procedures for the provision of documents and the answering of questions in aid of the opposing party’s case, which, it had long been held, should not be ordered when the proceedings were of a nature that might result in a penalty or forfeiture being imposed by a court.
41. It may be observed that these aspects of compulsory self-exposure to at least the risk of penalty or forfeiture, as considered in Rich, reflect a very different category of obligation than procedures which facilitate the efficient running of non-curial proceedings by requiring the parties to disclose, in advance of a hearing, the evidence and case that they propose to rely upon. Critically, those procedures do not otherwise require any particular disclosure to be made of a kind that a party would not seek to advance, albeit restricting later reliance upon other material without permission. Such procedural orders may be seen more as an issue of timing than as a displacement of any obligation, even in a non-curial setting, on a party alleging criminality or other illegality to prove it.
42. The joint judgment in Rich at [25] also confirmed that the relevant approach in considering the availability of penalty privilege is not one of determining whether there has been a statutory abrogation of a privilege that is otherwise accepted as applicable. Rather, the question is whether such a privilege is engaged in the first place. Thus, the first question posed in Rich was whether the proceedings in which the privilege was asserted exposed the appellants to penalties or forfeitures being imposed by a court, a question that required a focus on the relief that was being sought against the person making the penalty privilege claim: Rich at [25], [31]. That question was answered in the affirmative in Rich at [36]-[37], on the basis that the appellants were undoubtedly facing exposure to court-ordered disqualification from continuing to be directors or secretaries of a company, along with very substantial pecuniary penalties, if the case brought by ASIC succeeded. While that outcome would have a protective effect for the public insofar as it would put the appellants in a position that they could not act in the same capacity for the duration of any such disqualification, it was also found to be a penalty because of the impact of that consequence upon the defendants, with ramifications for them going beyond that case.
43. Having found that the proceeding exposed the appellants to the risk of court-ordered penalty or forfeiture, the High Court held that the proper course was for the Supreme Court of New South Wales to have refused ASIC’s application for an order for discovery.
44. Although Kirby J was in dissent in Rich, his Honour provided a pithy statement of principle which aligns with the majority view on the nature and scope of penalty privilege (footnotes omitted):
    128. Legislatures and privilege modification: Thirdly, I accept that there are arguments of principle that support an insistence, where privileges are abolished or modified, that the Parliament responsible for doing so should normally assume clear accountability to the electors for that action. I gave effect to that principle in Daniels and have done so in other cases.
    129. However, the privileges involved in Daniels were those against self-incrimination and suggested derogations of legal professional privilege. Those privileges are different from the penalty privilege invoked in this case. Compared to the penalty privilege, each of those privileges has a longer history in the law. Each is more fundamental to its operation. Each is reflected in universal principles of human rights. The penalty privilege is not. The penalty privilege is of a lower order of priority. It has a more recent and specialised origin and purpose in our law. It should not be blown into an importance that contradicts or diminishes the operation of the Act and the achievement of its purposes.

Reconciling Pyneboard, Sorby, Morris, Daniels and Rich

45. The dilemma facing the High Court in Pyneboard was the express exclusion under s 155 of the TPA of the privilege against self-incrimination, and silence within the legislation as to penalty privilege. The solution arrived at in Pyneboard was to align the two privileges, and then to find that the latter had also been excluded, but arguably only by implication, or at least by a less stringent application of the rule in Potter v Minahan than was indicated as being required in Daniels. The key problem with that approach, as identified in Daniels, was a failure to have regard to several fundamental principles of statutory construction, reiterated many times since in key cases such as Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 and the many cases that have followed that seminal decision. Those were principles of:

(1) considering legislation as a whole for a harmonious interpretation;
(2) endeavouring to give effect to all parts of legislation unless that produces absurdity,
as well as giving effect to the presumption that Parliament did not intend to abrogate fundamental rights, freedoms and immunities in the absence of express language or necessary implication to that effect.

46. In substance, the majority of the High Court in Daniels assessed the majority in Pyneboard as having lost sight of the above principles in an endeavour to avoid the absurd outcome whereby the privilege against self-incrimination would be excluded under the provision, while the penalty privilege would not. The majority in Daniels reasoned that the proper basis for the desirable conclusion that neither privilege applied was not to align the two privileges in the first place, but instead to have regard to their fundamental differences, emphasising that the privilege against self-incrimination was properly to be regarded as a more significant right of broader application than penalty privilege.
47. On that approach, the legislature in enacting s 155 of the TPA had been entirely rational and consistent. Given that the privilege against self-incrimination would otherwise apply as a fundamental common law right, privilege or immunity, being more than a mere rule of substantive law, Parliament had expressly excluded its operation under the provision. However, there was no need for Parliament to expressly exclude penalty privilege, given that it would not apply in such a non-curial setting unless expressly provided for under the legislation. That reflected the status of penalty privilege as a lesser rule of practice in litigation, which had evolved into a common law right from its curial origins in equity, but had not attained the status of a substantive rule of law.
48. Morris did not pose the same problems of statutory construction as Pyneboard because there was no express exclusion of any privilege, let alone the express exclusion of one privilege but not the other. However, the majority in Morris relied upon a particular understanding of the reasoning in Pyneboard as to the capacity of penalty privilege to apply outside a curial setting that is no longer tenable following Daniels. In Morris, Gibbs CJ and Wilson and Dawson JJ, but not Brennan J, also relied upon Sorby to support that proposition, despite Sorby not involving any consideration of penalty privilege. The end result in Morris was a ratio finding that penalty privilege was excluded by the police disciplinary regulation in question. At least implicitly, that also entailed an obiter finding that the privilege against self-incrimination also did not apply.
49. The observations made in Daniels in the course of reading down and limiting the application of Pyneboard, and the passage from [31] reproduced above, are not merely comments that can be disregarded. They fit the description from Farah of being “seriously considered dicta” of a majority of the High Court. As noted above at [10], however, even if the Farah description was not met, real weight must be given to the observation on the basis that the High Court must be accepted as the principal arbiter of what the High Court meant in prior cases, even where it was differently constituted. This Court is not at liberty to disregard such comments unless, perhaps, they can be viewed as merely raising an issue, or expressing a preliminary or tentative view, while deliberately avoiding the expression of a concluded view, as sometimes happens: see, for example, Cornwell v The Queen [2007] HCA 12; 231 CLR 260 at [113]. Even in those circumstances, such a comment will be, at least, highly influential and generally only open to being distinguished due to a sufficiently different factual or legislative situation, rather than being disregarded or otherwise not given weight. The analysis of Pyneboard in Daniels, and the clear views expressed on the absence of scope for penalty privilege ordinarily to be recognised to apply to non-curial proceedings, was of a very different character to the express statement in Cornwell that it was neither necessary nor desirable to decide an issue that had not been raised in the Court below or in the High Court.
50. The reasoning in Daniels would have produced the same outcome as was arrived at in Morris, but without leading to the obiter exclusion of the privilege against self-incrimination in the construction of the relevant regulation. The lesser penalty privilege, which had been claimed in Morris, would never have applied because of the absence of any provision in the regulation for its application in a purely disciplinary setting. The greater privilege against self-incrimination, which had not been claimed in Morris, would probably not have been excluded in a process of statutory construction, in accordance with the stricter application of the rule in Potter v Minahan that has been dominant in the cases decided after Pyneboard, Sorby and Morris of Re Bolton; Ex parte Beane [1987] HCA 12; 162 CLR 514, Bropho v Western Australia [1990] HCA 24; 171 CLR 1, Coco v The Queen [1994] HCA 15; 179 CLR 427 and Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; 188 CLR 501: see Daniels at [11]. So construed, the objective of the regulation as facilitative of ordinary police disciplinary processes would be preserved without any derogation from the more fundamental right of the privilege against self-incrimination.
51. Morris reasoning must now give way to Daniels and Rich reasoning. Morris must now be confined to its particular facts and legislative context. The two privileges, by reason of their very different origins, are relevantly distinguishable. The privilege against self-incrimination applies in all settings in which it properly arises, unless excluded in accordance with the principle of legality by application of the rule in Potter v Minahan, expressed in its modern form in Daniels at [11]. Penalty privilege ordinarily applies only in a curial setting to protect a party from having to assist in the process of seeking to have a penalty imposed upon them, but may be found to have a broader application as a matter of statutory construction, including by reference to curial features of an otherwise non-curial setting.
52. The passage from Daniels set out at [38] above effectively determines the meaning that can be given to Pyneboard and Sorby for the purposes of this case. In particular, it is not open to regard Pyneboard as continuing to be authority, if it ever truly was, for the proposition that the starting point is that penalty privilege is capable of applying in a non-curial setting, subject only to statutory interpretation leading to its non-application or abrogation. Following Daniels, if penalty privilege is to apply in a non-curial setting, it must be found to do so from the language of the provisions in question. Such a finding must be found in the face of the view of a majority of the High Court in Daniels doubting that penalty privilege ordinarily applies in a non-curial setting at all. Daniels must be regarded as a seminal decision of the High Court, the correctness of which has never been doubted. Its clear terms are “seriously considered dicta” which are therefore binding on this Court. Even if regarded as no more than comments made, they cannot lightly be put to one side. This Court must endeavour to give effect to them.
53. In particular, Daniels makes it reasonably clear that penalty privilege is not even a substantive rule of law of a kind that must be found not to apply or be abrogated in a non-curial setting, but, rather, a protection that must have a foundation for applying in the first place as a matter of statutory construction. In this case, that requires consideration of the relevant provisions of the Migration Act 1958 (Cth) and the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act).
54. The task of implying that penalty privilege does apply in a non-curial setting may not face as high a hurdle, derived from the rule in Potter v Minahan, of concluding that privilege against self-incrimination does not apply. But there must be some basis to be found in the language of the statute for penalty privilege to apply to a non-curial proceeding or setting.

Before the AAT

55. The Deputy President considered herself bound by the principles in Daniels and Rich, finding that, unless Parliament had provided to the contrary, penalty privilege would not apply to the AAT proceedings because they were administrative and not judicial. She accepted, following the reasoning in Rich, that MARA’s cancellation decision was a penalty, even though its purpose might be seen to be protective of the public. That conclusion was also accepted by the primary judge and will be assumed to be correct for the purposes of this appeal.
56. The Deputy President considered the authorities relied upon by Mr Frugtniet of Towie v Medical Practitioners Board of Victoria [2008] VSCA 157; 29 VAR 252, Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; 164 FCR 32 and Australian Securities and Investments Commission v Plymin [2002] VSC 56; 4 VR 168 in some detail. Plymin was disposed of on the basis that the finding in that case that penalty privilege was a substantive common law right was inconsistent with Daniels. Mining Projects Group was considered to be consistent with Daniels, but was concerned only with proceedings in a court. Towie was not followed because it relied, in part, upon Plymin, without reference to Daniels or Rich, and made no reference to penalty privilege only being a procedural rule that did not apply outside judicial proceedings, as was said by the Deputy President to have been decided by Daniels. In substance, the Deputy President relied upon what had been said in Daniels and Rich about penalty privilege not being a substantive right ordinarily applicable outside judicial proceedings. It then became a matter of statutory interpretation as to whether any different conclusion should be reached.
57. In considering whether the Parliament had provided that penalty privilege should apply, the Deputy President concluded that nothing in Part 3 of the Migration Act altered the essential role of the AAT in reviewing any decision in any jurisdiction, citing Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 636. To the contrary, she observed that the AAT proceeded upon the basis that the determination of applications for merits review were to be conducted in an open fashion, with all parties being required to provide all of the material in support of the outcome they seek before a hearing takes place. This view by the Deputy President of the essentially non-adversarial and non-curial nature of AAT proceedings accords with the reasons for judgment of Flick and Rangiah JJ in Sun v Minister for Immigration and Border Protection [2016] FCAFC 52; 243 FCR 20 at [75]- [78].
58. The Deputy President set out the relevant provisions of the Migration Act, noting that Mr Frugtniet had participated in MARA’s decision-making process, which had entailed the exercise of powers given to MARA to require migration agents to give information and the obligation on MARA to invite submissions from a registered migration agent whose registration was being considered for cancellation. That process, it was observed, assisted in ensuring that not only MARA but also the AAT had as much information as possible regarding the issues that were to be decided. All of the material arising out of the process that had taken place up to MARA’s decision was already before the AAT prior to the issue of penalty privilege being raised (noting that in this appeal, Mr Frugtniet contended that several additional documents were only provided later). To illustrate the point being made by the Deputy President, it is instructive to reproduce ss 308-310 of the Migration Act as follows:

308 Requiring registered migration agents to give information
(1) The Migration Agents Registration Authority may require a registered migration agent:

(a) to make a statutory declaration in answer to questions in writing by the Authority; or
(b) to appear before an individual or individuals specified by the Authority and to answer questions; or
(c) to provide the Authority with specified documents or records relevant to the agent’s continued registration.

(2) If a registered migration agent appears before one individual to answer questions, that individual must record the questions and answers and give the record to the Authority.
(2A) If a registered migration agent appears before 2 or more individuals to answer questions, one of them must record the questions and answers and give the record to the Authority.
(3) A registered migration agent is not excused from giving information or providing a document on the ground that the information or provision of the document may tend to incriminate the person.
(4) However:

(a) any information or document provided in response to a requirement under subsection (1); and
(b) any information or thing (including any document) obtained as a direct or indirect result of information or a document provided in response to a requirement under subsection (1);

is not admissible in evidence against the registered migration agent in any criminal proceedings (except proceedings for an offence against section 137.1 or 137.2 of the Criminal Code that relates to this Act or the regulations).
309 Persons may make submissions
(1) If the Migration Agents Registration Authority is considering refusing a registration application, it must inform the applicant of that fact and the reasons for it and invite the applicant to make a further submission in support of his or her application.
(2) If the Migration Agents Registration Authority is considering making a decision under section 303 to cancel or suspend a registered migration agent’s registration, or to caution such an agent, it must inform the agent of that fact and the reasons for it and invite the agent to make a submission on the matter.
(3) In this section:
submission means:

(a) a statutory declaration; or
(b) a written argument.

310 Persons may appear before Migration Agents Registration Authority
(1) This section applies where the Migration Agents Registration Authority has invited a submission on a matter under section 309.
(2) If the Migration Agents Registration Authority does not receive a submission, it may decide the matter on the information before it.
(3) If the Migration Agents Registration Authority receives a submission, it may:

(a) decide the matter; or
(b) give the person who made the submission the opportunity to appear before it and then decide the matter.

59. It may be seen that s 308(3) clearly abrogates the privilege against self-incrimination, but there is no provision for penalty privilege to apply. That distinction is of fundamental importance to the outcome of this appeal.
60. The Deputy President concluded that when regard was had to the role of the AAT and to the particular provisions of the Migration Act relating to MARA’s powers, there was nothing in the legislative scheme to suggest that Parliament intended to set aside the principles stated in Daniels and Rich. She therefore concluded that penalty privilege had no place in the proceedings before the AAT and that Mr Frugtniet could not rely on penalty privilege.
61. The Deputy President then considered whether Mr Frugtniet should be required to lodge any witness statements and material upon which he wished to rely, citing the wide power of the AAT under s 33(1)(a) of the AAT Act to determine its own procedures. She observed that MARA had already complied with s 37 of the AAT Act by lodging a statement of reasons and a copy of every other document or part of a document in its possession or control that was relevant to the AAT review. Accordingly, she was satisfied that Mr Frugtniet was in a position to know the material upon which MARA relied, the view that it had taken of that material, and the reasons it had for reaching its decision to cancel his registration as a migration agent. She noted that Mr Frugtniet could choose not to provide any further information or material and to put his case on the basis of the documents lodged with the AAT by MARA. However, if he wished to rely on other information or material, he had to comply with directions to provide that to MARA and the AAT.

Before the primary judge

62. The primary judge reasoned to the opposite conclusion to that reached by the Deputy President on the application of penalty privilege to AAT proceedings.
63. Consistently with the Deputy President, her Honour found that the cancellation of Mr Frugtniet’s registration was in the nature of exposure to a penalty, by analogy with exposure to loss of office, exposure to dismissal or exposure to a disqualification order, citing Rich at [37]. As already noted, that conclusion will be assumed to be correct.
64. However, in contrast to the conclusion reached by the Deputy President, the primary judge held that the law, following Morris, Pyneboard and Sorby, was that penalty privilege was capable of applying in non-judicial proceedings, such as those in the AAT. Her Honour reasoned that the statement in Daniels at [31], reproduced above at [38], which was to the effect that there was little, if any, reason why penalty privilege should be recognised outside judicial proceedings and that no decision of the High Court had said it should be so recognised, was obiter dictum, and that it would not be correct to view those sentences as overturning Morris in finding that penalty privilege was capable of applying to non-judicial proceedings. Similarly, Rich at [24] was read down by her Honour to indicate no more than that the High Court was not prepared to give penalty privilege the same attributes as legal professional privilege.
65. The correctness of the primary judge’s conclusions depends upon the observations in Daniels at [31] and Rich at [24] falling short of being “seriously considered dicta”, such that they may be disregarded, especially in confronting the important distinction between penalty privilege and the privilege against self-incrimination. If those conclusions as to the nature of the observations in Daniels and Rich are not correct, the reasoning of the primary judge cannot readily be upheld by reference to other intermediate appeal court decisions.
66. The primary judge observed that the High Court has since considered penalty privilege and related privileges in judicial proceedings, but has not addressed its application in non-judicial proceedings, citing Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; 256 CLR 375, and cases considered in Boral, none of which touched on this question and none of which detracted from the conclusion that the law with respect to penalty privilege was as set out in Morris, which was said to be that penalty privilege is capable of applying to non-curial proceedings.
67. The primary judge considered a series of decisions of this Court, which her Honour accepted mostly concerned the application of penalty privilege in judicial proceedings. One exception was Griffin v Pantzer [2004] FCAFC 113; 137 FCR 209, which concerned the existence of privilege against self-incrimination in a bankruptcy examination under s 81 of the Bankruptcy Act 1966 (Cth). Particular reliance was placed by her Honour on the following paragraphs from the judgment of Allsop J (as his Honour then was, with whom Ryan and Heerey JJ agreed) at [43]-[46] (underlining added by her Honour):
    43. The privilege not to answer questions or produce documents which have a tendency to expose the person to a criminal charge, or a penalty or to forfeiture has been recognised by the High Court as a deeply rooted principle of the general law: R v Associated Northern Collieries at 748; Sorby at 294, 309, 311; Pyneboard at 340, 341, 347; and Reid v Howard at 11-12, which can now be expressed also in terms of a human right: Environment Protection Authority v Caltex Refining Co Pty Ltd at 498.
    44. The consequence of the recognition by the High Court that the privilege is one deeply rooted in the law as a fundamental right is that it is not merely a rule of evidence available in judicial proceedings, it is available generally, even in a non-curial context, as the foundation of an entitlement not to answer a question or produce a document: Pyneboard at 340-341; Sorby at 309; and Police Service Board v Morris [1985] HCA 9; (1985) 156 CLR 397.
    45. Prior to Pyneboard, it had been generally expressed that the privilege was inherently incapable of application in non-judicial proceedings. In this form, it was seen as a testimonial privilege. That was the view of Wigmore, Wigmore on Evidence at [2263], of the United States Supreme Court: see, for example, Re Harris [1911] USSC 83; 221 US 274 (1911), and of the Full Courts of New South Wales and Victoria: see the cases cited in Pyneboard at 337-338; and see generally Phipson on Evidence pp 198-203. There was, however, a contrary line of authority: see the discussion in Pyneboard at 337-340.
    46. It is presumed that Parliament does not intend to interfere with fundamental principles or rights including entrenched general law rights, such as the privilege against self-incrimination, without expressing its intention clearly, whether by express words or necessary implication: Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277 at 304; Sorby at 294-295, 309-310; Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52 at 96-97, 116, 123, 132; Re Bolton; Ex parte Beane [1987] HCA 12; (1987) 162 CLR 514; Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at 598; Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1; Coco v The Queen [1994] HCA 15; (1994) 179 CLR 427 at 437; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; Daniels at [11], [43], [88]-[94] and [132]-[134]; and Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at [30].
68. The above paragraphs from Griffin v Pantzer were said by the primary judge to identify penalty privilege as a principle of the general law, not confined to a court setting, with a presumption raised by the principle of legality against its statutory abrogation in the absence of express words or necessary implication. With great respect to her Honour, it is difficult to see how that interpretation of the passages reproduced above was able to be reached with such certainty. The first passage underlined above does refer to penalty privilege, but that does not change the fact that the decision was concerned with the privilege against self-incrimination, and not penalty privilege. The possible conflation of the two privileges in that passage cannot change the ratio of the decision. Moreover, there was no reasoning aligning the two privileges, because none was required.
69. The passing reference in Griffin v Pantzer to penalty privilege was made in the course of deciding that the privilege against self-incrimination was not available as a matter of statutory construction. By parity of reasoning, no lesser privilege, such as penalty privilege, would have been available either, had that been relied upon, which it apparently was not. Moreover, if the reference to a “deeply rooted principle of the general law” is intended to suggest that penalty privilege, like the privilege against self-incrimination, is not just a substantive rule of law but an important and fundamental common law immunity, which it may be doubted that Allsop J was intending to convey, that is contrary to Daniels and Rich, which must prevail.
70. The reference to “privilege” in Griffin v Pantzer at [44] is, in context, a reference only to the privilege against self-incrimination, notwithstanding the wider passing reference in [43] to the penalty privilege. The preceding paragraphs from [27] to [42] in Griffin v Pantzer were all dealing with the privilege against self-incrimination, not penalty privilege and, even then, in the context of testimonial privilege. In any event, even if the comment was to be regarded as a reference also to penalty privilege, it must only be an obiter comment, which does not have the status of the obiter comments in Daniels and Rich to the contrary.
71. Griffin v Pantzer was regarded by the primary judge as stating the law in a manner consonant with other intermediate appeal courts, with particular reliance on the decision of the New South Wales Court of Appeal in Valantine v Technical and Further Education Commission [2007] NSWCA 208; 166 IR 459 and the Victorian Court of Appeal in Towie, as applied in MH6 v Mental Health Review Board [2009] VSCA 184; 25 VR 382. However, those cases dealt with State tribunals and legislation, contexts which do not safely translate to a federal context. It is neither necessary nor desirable to comment upon the correctness or otherwise of those decisions.
72. Based on the primary judge’s treatment of the privilege against self-incrimination and penalty privilege as relevantly equivalent, in line with the implied assumption made in Morris, her Honour regarded the statutory construction exercise as requiring a basis for abrogation or curtailment of penalty privilege, not its application. Her Honour set out the principles and leading authorities dealing with the abrogation of fundamental rights before turning to the AAT Act and Migration Act. The correctness of those principles and authorities is not in doubt when the question of abrogation of such a right properly arises. Her Honour did not find anything in the relevant provisions of either Act that operated to abrogate the penalty privilege that was already found to otherwise exist and apply. The primary judge did not carry out any statutory construction exercise to derive positively the application of penalty privilege to Mr Frugtniet’s AAT proceedings.

The grounds of appeal

73. This Court gave MARA leave, without objection, to rely upon an amended notice of appeal in respect of grounds 1, 2 and 4. Mr Frugtniet took objection to ground 3. The four grounds are as follows:
    1. The learned primary judge erred by holding that the privilege against exposure to penalties applies outside of the context of judicial proceedings.

Particulars
The learned primary judge ought to have held that the privilege against exposure to penalties is not a substantive rule of law having application outside of the context of judicial proceedings.

2. The learned primary judge erred by holding that the privilege against exposure to penalties applied to the proceedings before the Administrative Appeals Tribunal (the Tribunal).

Particulars
The learned primary judge ought to have held that, having regard to the nature of the privilege and the jurisdiction exercised by the Tribunal, the privilege against exposure to penalties did not apply to the proceedings before the Tribunal.

3. The learned primary judge erred by holding that, even if the privilege against exposure to penalties applied to the proceedings before the Tribunal, the Tribunal should not have made the orders that it did for conduct of the proceedings.

Particulars
The learned primary judge ought to have held that, even if the privilege against exposure to penalties applied to the proceedings before the Tribunal, the orders made by the Tribunal were not inconsistent with the privilege because they did not compel the Respondent to file any evidence or make positive assertions or denials in relation to his case if he did not wish to do so.

4. The learned primary judge erred by holding that the failure of the Tribunal to apply the privilege against exposure to penalties in making orders for the conduct of the proceedings could have made a difference to the outcome of the Tribunal's review.

Particulars
The learned primary judge ought to have held that, in light of the fact that by the time the Tribunal delivered its ruling on the application of the privilege, both parties had already filed their statements of facts, issues and contentions, and the Appellant had filed a hearing certificate indicating that it did not intend to call any witnesses at the hearing, the Tribunal's failure to give effect to the privilege could not have made a difference to the outcome of the review.

74. As can be seen, proposed ground 3 asserts that even if penalty privilege applied to the AAT proceedings, the orders made by the Deputy President were not inconsistent with the privilege because they did not compel Mr Frugtniet to file any evidence or make any positive assertion or denials in relation to his case. In light of the reasons below for upholding ground 2, ground 3 is hypothetical, and it is therefore not appropriate to grant leave to rely upon it, on the basis that an appeal ground should not be upheld if it is predicated on a circumstance that has been found not to exist. For the same reason, ground 4 does not need to be considered. Moreover, ground 1 is wider than the present case, raising the broader question of penalty privilege applying beyond judicial proceedings generally. For the reasons set out at [7] above, it is neither necessary nor desirable to traverse that broader question in this appeal. This appeal can be determined by reference to ground 2 alone, which focuses on the decision that was made by the primary judge only in relation to the AAT proceedings.
75. With the resolution of the appeal confined to ground 2, an application by MARA to adduce additional evidence of what took place before the AAT should be refused on the basis that the material is not necessary to determine the appeal. Nor is that evidence necessary for the purpose of determining whether to grant Mr Frugtniet leave to rely on his further amended notice of contention, which is addressed below.

Consideration of appeal ground 2

76. The central question in this appeal is whether the primary judge erred in concluding that penalty privilege applied to AAT proceedings in the same manner as the privilege against self-incrimination, so as to require abrogation before Mr Frugtniet could be made the subject of procedural orders to provide any witness statement that he wished to rely upon at the hearing. In substance, that question turns on whether her Honour was entitled not to apply the obiter comments by the High Court in Daniels and Rich and instead rely upon Pyneboard, Sorby and Morris. For the reasons that follow, based upon the analysis of those cases above, her Honour was, with respect, not so entitled. Daniels and Rich dictate that the necessary exercise of statutory construction was one of finding a basis for penalty privilege to apply to the AAT proceedings, not of finding the abrogation or curtailment of such a privilege that was otherwise applicable.
77. Following Sorby, the starting point for the privilege against self-incrimination is that it exists and applies unless abrogated. However, that is not the starting point for penalty privilege, which is not, following Daniels and Rich, a substantive rule of law, let alone an important and fundamental common law immunity, having, as it does, a very different origin and history. In each setting where penalty privilege is claimed, the opening question is whether that privilege applies in the first place, not whether it has been abrogated. This emphasises the critical importance of considering carefully the statutory provisions in question, as well as the particular proceedings, the relief sought and the particular adverse consequences faced by the person claiming the benefit of penalty privilege.
78. With respect, the primary judge’s reliance on Morris in particular was misplaced. The decision in Morris that penalty privilege was capable of applying to non-curial proceedings, for the purposes of deciding whether that privilege had been excluded by the regulations under consideration, proceeded upon the basis of an implied, non-binding assumption that the two privileges were relevantly indistinguishable. The decisions in Daniels and Rich mean that this assumption cannot be maintained, let alone relied upon to support the finding that penalty privilege applies unless abrogated or curtailed by express words or necessary intendment. Rather, the reverse exercise is required to be carried out of ascertaining a proper basis for penalty privilege to apply at all.
79. It follows from the analysis of Daniels and Rich above that for penalty privilege to apply as a matter of course, three factors will ordinarily be present, at least in a federal context:

(1) penalty privilege is claimed in curial proceedings;
(2) the proceedings expose the claimant to penalties or forfeitures; and
(3) penalty privilege is claimed as protection from compulsory disclosure of information, where requiring that disclosure would represent a departure from the principle that those who allege the commission of a crime or imposition of a penalty should prove it and should not be able to compel the defendant to provide proof against him or herself.

80. The categories of obligation protected by penalty privilege in such a context are not closed and are not necessarily confined to discovery or interrogatories. Penalty privilege may, in some circumstances, extend to an obligation to provide a statement beyond one sought to be relied upon, or to file a defence in judicial proceedings, which could then expose a party to a penalty: see Mining Projects Group at [11]-[13]; cf Towie at [12]. The protection afforded by the privilege is from being compelled, directly or indirectly, to assist the party seeking a penalty to succeed in achieving that objective by furnishing relevant information. It is not a protection from disclosing evidence that is intended to be relied upon, as a matter of the efficient administration of a non-adversarial, non-curial tribunal.
81. This restrictive approach to the application of penalty privilege, at least in a federal context, does not necessarily mean that legislation cannot be construed as having the effect that penalty privilege is available in the absence of one or more of the features listed above. However, the absence of those features in a particular instance does mean that it is inherently less likely that penalty privilege applies. That is especially so where there is also an absence of reasonably clear language to that effect or a strong basis for an implication, akin to clear language, that penalty privilege applies.
82. In the present case, there is nothing in either the relevant provisions of the Migration Act or of the AAT Act that suggests, let alone compels, the conclusion that penalty privilege applied to Mr Frugtniet’s proceedings before the AAT. It is not to the point that, as submitted on behalf of Mr Frugtniet, ss 61(2) and 62(4) of the AAT Act expressly preserve the availability of the privilege against self-incrimination to a person summonsed and to any witness. That submission elides the differences in application between the privilege against self-incrimination and penalty privilege, as articulated in Daniels and Rich. Similarly, it cannot be accepted, as was further submitted, that one would expect to find a section like s 105 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) if the legislature had intended to abrogate penalty privilege. Adhering to the position expressed in Daniels and Rich, there must have been a statutory basis for penalty privilege to apply to the AAT proceedings; there simply can be no question of its abrogation where it is not applicable. It follows that in the absence of a statutory basis, penalty privilege did not apply to those proceedings.
83. In any event, it may be observed that if, contrary to the conclusion that has been reached, penalty privilege did apply to the AAT proceedings in this case, its application would not have been triggered by the AAT’s procedural orders to which Mr Frugtniet objected. Those orders did not in any way seek to compel him to give evidence or call any evidence, and rather sought to require him to provide a copy of such evidence as he might seek to rely upon prior to the AAT hearing. That order was made in a context in which the material relied upon by MARA had already been filed and served (even if a limited number of further documents did emerge later). The procedural orders could not be equated to discovery or, indeed, to any other kind of compulsory disclosure of information, because they did not compel him to disclose anything for the purpose of it being available to be used against him.
84. The orders made by the Deputy President went no further than imposing a timetable for the filing of evidence to facilitate an efficient AAT hearing, in circumstances in which MARA’s evidence was already complete, subject only to any reply evidence in response to something that Mr Frugtniet might, perhaps unexpectedly, rely upon. The practical alternative might have been for the Deputy President to allow Mr Frugtniet to present his case without prior notice, and then allow MARA such additional time as it reasonably needed to meet anything unexpected. Indeed, Mr Frugtniet could have decided to withhold his statement until the hearing and then seek to rely upon it, taking the risk that this would not be permitted to take place, an approach that was contemplated in Towie at [12]. However, such an approach would not have bestowed any real advantage upon Mr Frugtniet, nor any real protection. To the contrary, it was not in his interests for there to be further delay if he had a prospect of overturning MARA’s cancellation decision. It was a matter for him as to what steps he took to persuade the AAT to reach a different outcome. However, it was not open to him to do that by a process of ambush, or by forcing an inefficient approach to the conduct of the AAT’s hearing, contrary to its statutory mandate, by claiming penalty privilege.
85. The Deputy President did not err in the approach she took. Respectfully, the primary judge erred in finding to the contrary.
86. It follows that appeal ground 2 must succeed. As noted above, MARA’s remaining grounds 1 and 4 do not need to be considered further.

Mr Frugtniet’s further amended notice of contention

87. The further amended notice of contention asserts the following:
    1. Even if the learned primary judge erred in holding the penalty privilege applied to administrative proceedings outside judicial proceedings before the tribunal the substantive common law right of the privilege against self-incrimination applied.

Particulars
The orders for the conduct of the proceedings exposed the Respondent to the possibility and peril of being convicted as:

1. an aider and abettor of Ritesh Bastola in dishonestly influencing a Commonwealth public official in providing a false document to the Trade Recognition Authority contrary to sections 135.7 and 11.2 of the Commonwealth Criminal Code 1995 (Cth): FC [23] - [26], [56], [57], [63], [199]; and
2. a principal in knowingly providing false information to a Commonwealth entity namely the Migration Agents Registration Authority contrary to section 136.1 and 137.1 of the Commonwealth Criminal Code 1995: FC [32] - [39], [45] – [52].

2. The conduct of the proceeding before the tribunal breached the hearing rule.

Particulars
The Respondent was denied natural justice by being:

1. required to present his case first: FC [39], [198]; b) denied the opportunity to cross-examine Ritesh Bastola: FC [136], [137], [196]; and c) the tribunal failing to advise him he could object to giving evidence and exercise the privilege against self incrimination.
2. denied the opportunity to cross-examine Ritesh Bastola: FC [136], [137], [196]; and

100. the tribunal failing to advise him he could object to giving evidence and exercise the privilege against self incrimination.

3. The learned primary judge erred in finding the Tribunal directed the Respondent file a statement of facts issues and contentions of 30 July 2015, and ought to have found that the direction was made on 14 January 2015.

88 None of the arguments arising from the further amended notice of contention were advanced either before the AAT or before the primary judge. As noted in Coshott v Burke [2017] FCAFC 230, delivered ex tempore and published after the decision in this case was reserved:

2. The jurisdiction being exercised by the Court at present is appellate, not original. As a matter of general principle, it is a perversion of an exercise of appellate jurisdiction to seek to convert a court of appeal into a court of original jurisdiction, see Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7, and notably and, recently, Coshott v Crouch [2017] FCAFC 135 at [51] - [54].
3. Of course, there may be cases where the interests of justice require, exceptionally, that a court exercising appellate jurisdiction nonetheless permit a point not taken below to be raised on appeal. Even so, the application of that particular exception is necessarily informed by procedural fairness questions, particularly if there is the prospect of evidentiary unfairness to a respondent party. That does not delimit the question of prejudice which might flow to a respondent in respect of any such permission, but it is a noteworthy and relevant example insofar as a number of the appeal grounds are concerned.

89 It has not been explained why none of the points sought to be advanced by way of the further amended notice of contention were raised either before the AAT or before the primary judge. Each of those points requires factual or legal analysis that is of a trial, rather than appellate, nature. The very fact that MARA sought to rely upon additional evidence to meet the further amended notice of contention indicates that at least some of these points might have been able to be met by MARA either before the Tribunal or before the primary judge. It has not been shown that the interests of justice require the grant of leave for Mr Frugtniet to rely on any of the points he now seeks to raise. It follows that Mr Frugtniet should not be given leave to rely upon his further amended notice of contention.

Conclusion

90. The appeal must be allowed with costs, the orders of the primary judge must be set aside and the original appeal from the AAT’s decision must be dismissed with costs.

Associate:

Dated: 30 January 2018