Penalties privilege and the corporate interrogee

Graymarshall Pty Ltd v Department of Environment, Climate Change & Water [2010] NSWLEC 54 is a decision of NSW’s Land and Environment Court about the application of the privilege against penalties (related to, but separate from, the privilege against self-incrimination). A regulator issued a notice compelling the production of information to a company. The statute provided that the privilege against self-incrimination was not a good answer to refusing to comply with the notice. It also said that there was a presumption that a contravention of the Act by the company was a contravention by the directors.  There are similarities between this legislative scheme and the Legal Profession Act, 2004‘s scheme for the investigation by the Legal Services Commissioner of incorporated practitioners.  Justice Pepper said:

  • the penalties privilege is impliedly abrogated if its brother the penalty against self-incrimination is expressly abrogated: Pyneboard Proprietary Limited v Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328 at 345, The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commissioner [2002] HCA 49; (2002) 213 CLR 543 at [30];
  • the uncontroversial proposition that the penalties privilege is unavailable to corporations holds true even in the face of a provision such as the one in this statute which gives rise to a presumption that a breach by the company is a breach by the directors;
  • if there are no directors or other proper officers of the company who may respond to a subpoena addressed to its proper officer to produce documents and give evidence without ‘risking testimonial self-incrimination’, then the company must appoint a receiver or other proper officer for the purposes of responding to the subpoena: R v Ronen; (2004) 62 NSWLR 707 at [43] -[44]; and
  • though there is a conflict of authority, with no decision binding on her Honour in relation to whether the penalties privilege extends beyond ‘judicial proceedings’, the penalties privilege did not apply at the investigative pre-proceedings stage reached in this case.

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