[Home] [Databases] [WorldLII] [Search] [Feedback] New Zealand Law Commission

[Database Search] [Name Search] [Previous] [Next] [Download] [Help]

• New Zealand
• Other Jurisdictions
• Arguments For And Against The Privilege’s Application Overseas
• Conclusions

11 Incrimination Under Foreign Law

NEW ZEALAND

247 LEGISLATIVE PROCEDURES provide for the taking of evidence overseas for a New Zealand court or in New Zealand on behalf of a foreign court: see, for example, Part IV Evidence Amendment (No 2) Act 1980; ss 48–48F Evidence Act 1908; ss 12, 18 and 31–33 Mutual Assistance in Criminal Matters Act 1992. In each of these, the privilege is expressly preserved, but it is not clear whether the privilege extends to incrimination occurring in the foreign country. Section 48D, for example, says that a person has “the same right to refuse to answer any question, . . . on the ground of privilege . . . as if the proceedings were pending in the High Court”. Subsection (2) provides that no person shall be compelled to produce any document that he or she could not be compelled to produce if the proceedings were pending in the High Court.

248 As has already been noted in chapter 1, the New Zealand Court of Appeal has recently considered the application of the privilege against self-incrimination when liability arises overseas: see Controller and Auditor-General v Sir Ronald Davison [1996] 2 NZLR 278.[53] That case involved proceedings for judicial review, in which the plaintiffs asked that the Commission of Inquiry’s ruling be set aside. The ruling required them to give evidence before the Commission of Inquiry into the Cook Islands Tax Commission of Inquiry (otherwise known as the Winebox Inquiry). The plaintiffs argued (among other things) that the Cook Islands secrecy legislation enabled them to invoke the privilege, preserved by s 6 of the Commissions of Inquiry Act 1908 (NZ). Section 6 provides:

Every witness giving evidence, and every counsel or agent or other person appearing before the Commission, shall have the same privileges and immunities as witnesses and counsel in Courts of law.

249 Section 227(3) of the Cook Islands International Companies Act 1981–2 states that any person who divulges any information about the membership, ownership, officers, affairs (etc) of an international or foreign company registered under the Act commits an offence against the Act. Sections 340–347 of the Cook Islands Act 1915 provide a procedure for extradition from New Zealand to the Cook Islands.

250 Four out of the five Court of Appeal judges held that the privilege could not be claimed in the particular case. The judges reached this conclusion by two different avenues. Cooke P, supported by Henry J and Thomas J, held that the privilege does not extend to liability arising overseas. Richardson J, supported by Henry J and Thomas J, said that the privilege was inapplicable in the case because there was no existing criminal liability, only a risk of prosecution in the Cook Islands for testifying before the Commission of Inquiry.

OTHER JURISDICTIONS

251 Overseas authorities are divided on the question of whether the privilege can be claimed for liability occurring under a foreign jurisdiction’s law. There have been conflicting authorities in England (eg, United States v McRae (1868) LR 3 Ch Court of Appeal 79, for, and King of the Two Sicilies v Willcox (1851) 1 Sim NS 301, 61 ER 116, against). In Davison, McKay J for the minority followed McRae, in which Lord Chelmsford allowed the defendant’s objection to answer interrogatories on the basis that his answers could lead to forfeiture of his property in the United States (347). McKay J distinguished King of the Two Sicilies, suggesting that the privilege was not extended in that case because the court did not have the law of Sicily before it (344). In the present case, the Cook Islands statutes were before the Court of Appeal. More recent English case law, such as Arab Monetary Fund v Hashim [1989] 1 WLR 565, denies the extension of the privilege. However, this reflects s 14(1)(a) of the Civil Evidence Act 1968 (UK), which confines the privilege to “criminal offences under the law of any part of the United Kingdom and penalties provided for by such law”. In Davison, Thomas J said that because s 14(1)(a) has overturned McRae, the persuasiveness of that case has been weakened (350).

252 The United States appears to extend the privilege to incrimination under foreign law (eg, see Murphy v Waterfront Commission of New York Harbour 378 US 52 (1964)). However, as that case dealt with interstate rather than inter-country relations, it may not settle the question (Davison, Cooke P, 294 and Thomas J, 351). Certainly, Ciardiello says that the question remains open.[54]

253 The Australian decisions also leave the issue open (eg, see Jackson v Gamble [1983] VR 552 and Commissioner of Australian Federal Police v Cox (1989) 87 ALR 163). However, the Evidence Act 1995 (Aust) expressly preserves the privilege in relation to liability to prosecution arising overseas (s 128(1)(a)).

254 When a claim of privilege is upheld, based on criminal liability arising overseas, s 128(2) and (5) of the Australian Act does not authorise the giving of a certificate of immunity, but the witness will be excused from giving the evidence (subs (4)). Incrimination under foreign law is outside the scope of the certification process because any immunity provided would be unenforceable in a foreign jurisdiction. In contrast with the Australian approach, the Canada Evidence Act 1985 abrogates the privilege and, as a consequence, no protection from incrimination under foreign law can be provided via the statutory immunity contained in s 5(2).

ARGUMENTS FOR AND AGAINST THE PRIVILEGE’S APPLICATION OVERSEAS

255 We now consider whether in New Zealand the privilege should extend to liability arising overseas or whether legislation should preclude this. The judges’ decisions in Davison contain the main arguments for and against applying the privilege to liability occurring overseas. We briefly consider these, some additional arguments, and the justifications for s 14(1)(a) of the Civil Evidence Act (UK) in which the privilege was removed for liability arising overseas.

Relevance of the interests the privilege protects

256 In Davison, Thomas J reasoned that the privilege should not extend to liability arising overseas because the rationales behind the privilege are “less prevalent or pronounced” when the risk of liability arises overseas (352). It is true that in most cases the risk of prosecution or civil penalty imposed overseas will not be as imminent or likely as liability arising in the country in which the information has been compelled. In order for a person to be incriminated overseas, the foreign authorities must become aware of the disclosures made to officials of another State, often in a completely different context from that with which the foreign jurisdiction may be concerned. Cooke P recognised that the risk might have been more significant in the case before him if the Commissioner had sought to compel the plaintiffs to make disclosures in the Cook Islands rather than in New Zealand (294). However, it is doubtful, or at least uncertain, whether such a demand for information could have predominated over the Cook Islands secrecy laws: see Cooke P’s discussion of United States v First National Bank of Chicago 669 F 2d 341 (1983), where he said:

It is said that where two states have jurisdiction each is required by international law to consider, in good faith, moderating the exercise of its enforcement jurisdiction, in the light of a list of factors derived from the Restatement. (293)

257 At least one of the interests the privilege protects, discussed in chapter 2, is relevant in the same way as if the risk of liability arises in the country in which questions are asked. For example, the invasion of privacy and integrity of the human personality occurs at the point when disclosures are made and will be felt regardless of where liability arises. Nevertheless, we suggest that the other interests the privilege protects are less persuasive when the risk of liability arises overseas. This is because the officials compelling self-incriminating disclosures in New Zealand will not usually be representatives of the foreign State under which liability arises. Put another way, the New Zealand officials will not necessarily have any stake in incriminating the witness.

Sovereignty issues

258 Cooke P and Henry J said that when the privilege applies, it is absolute and allows of no discretionary relaxation (at least under common law):

Therefore, if the privilege applied to prevent prosecution for a breach of the Cook Islands secrecy law: it follows that the foreign State legislation which is arguably infringed would be given full recognition and therefore paramountcy over the wider interests directly relevant to the administration of justice in New Zealand.

(Henry J, 349: see also Cooke P’s comments at 293 citing the Canadian case, Spencer v The Queen [1985] 2 CTC 310).

259 McKay J, on the other hand, contended that the privilege is not an absolute one, in that the prosecution or penalty feared must be reasonably likely to eventuate (344). Nevertheless, the requirement that there must be a “real risk” of self-incrimination is not particularly stringent, as Shaw LJ recognises in Rio Tinto Zinc Corporation Ltd v Westinghouse Electric Corporation Ltd [1978] AC 547, 581:

so long as the risk of self-incrimination is real in the sense that what is a potential danger may reasonably be regarded as one which may become actual . . .

In any case, the privilege is absolute in the sense that, once it applies, it cannot under common law be qualified by any competing principle (eg, territorial sovereignty).

260 Related to Cooke P’s and Henry J’s objection that foreign State legislation should not be given paramountcy over the administration of justice in New Zealand, is the difficulty that, if disclosures are made in New Zealand in return for a guarantee of immunity from use, the guarantee is not enforceable in the foreign jurisdiction where the risk of incrimination arises.

Practical difficulties

261 Aside from difficulties surrounding enforcement and the competing interests of two jurisdictions, courts are likely to experience practical difficulties in determining whether the risk presented by liability arising overseas is “real and appreciable”. In Davison, the Court of Appeal had the provisions of the Cook Islands legislation before it. However, in many cases, the laws and attitudes of the foreign jurisdiction will not be so accessible; although this risk can be overstated as communication technology advances.

262 The difficulties of determining whether claims based on liability arising overseas are legitimate are perhaps most debilitating when enforcement officers and officials, as distinct from courts, seek to make such a determination on the spot.

263 Section 14(1)(a) of the Civil Evidence Act 1968 (UK) which rules out the application of the privilege to foreign incrimination appears to have been enacted mainly to address practical difficulties. Section 14(1)(a) confines the privilege to “criminal offences under the law of any part of the United Kingdom and penalties provided for by such law”.

264 Section 14(1)(a) was enacted in the wake of the Law Reform Committee’s Report on Privilege in Civil Proceedings, 16th Report (Cmnd 3472, London, 1967), presented by the Lord Chancellor. The Committee envisaged that the judiciary would retain a discretion to apply the privilege, and no mention is made of officials dealing with claims of privilege. The Committee said:

The problem presents difficulties since, although an English judge is qualified to decide forthwith whether a witness’s objection to answering a question on the grounds that it might incriminate him under the law of any part of the United Kingdom is bona fide and realistic or not, it may well be difficult for him to reach such a decision where questions of the criminal law of foreign states are concerned. On the whole, we think that no absolute privilege should be given against self-incrimination under foreign law. The matter is best left to the general discretion of the judge in the particular circumstances in which the claim arises. (7)

265 At first sight, the option of the courts having a discretion to determine whether to uphold a claim of privilege when the risk occurs overseas may seem an attractive option. It allows the degree of knowledge and risk of self-incrimination to be assessed by the judge in the particular case and also allows sovereignty issues to be taken into account. However, we suggest that such an approach would create an unacceptable tension between expediency and the privilege, because currently, if the privilege applies, it applies absolutely. In other words, the privilege is an explicit censure against compelled self-incrimination in specifically pre-determined situations of need.

266 These issues are not easy to resolve. We therefore express only a tentative view in favour of removing any opportunity for the privilege to apply to liability arising overseas, and we seek specific submissions on the issues canvassed in this chapter.

CONCLUSIONS

• In several jurisdictions, the question whether the privilege extends to the risk of liability occurring overseas, has been unsettled for some time.
• Recently, a majority of the New Zealand Court of Appeal has held that the privilege does not extend extraterritorially: see Controller and Auditor-General v Sir Ronald Davison [1996] 2 NZLR 278. This decision was upheld by the Privy Council.
• Although the interests that the privilege protects apply in some cases when the risk of liability occurs overseas (eg, protection from an invasion of privacy), in most cases the risk will be less pronounced. This is because the officials compelling self-incriminating disclosures in New Zealand will not usually be representatives of the foreign State under which liability arises.
• Once a claim of privilege is held to be legitimate in a particular situation, it cannot be limited or negated by any competing privilege, such as territorial sovereignty. This means that when the privilege is upheld to protect against liability arising overseas, that definable but often fairly remote risk will prevail over what may in some cases be more pressing public interest reasons for compelling disclosure in New Zealand.
• If a claim of privilege for liability arising overseas is upheld in New Zealand, any immunity granted is not enforceable overseas, because this would deny the sovereignty of the foreign State.
• It is difficult for New Zealand courts and, in particular, New Zealand officials, to assess claims of privilege when the asserted liability arises overseas.
• The Commission expresses a tentative preference for removing the privilege for liability arising overseas, and seeks submissions on this difficult issue.