New Zealand Law Commission
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When should a legislative provision be interpreted as removing the privilege?
371 THIS CHAPTER EXAMINES the reform issues arising from legislative powers which compel the supply of information and which do not expressly indicate whether the privilege against self-incrimination has been removed or preserved. We assess the various tests posed by courts in deciding whether the privilege has been indirectly removed. When legislation containing information-gathering powers does not expressly remove or limit the privilege, then no legislative protection in the form of an immunity is provided in place of the privilege. On occasion, the courts and prosecutors have offered to grant immunities to witnesses, in the absence of express authority to do so. We consider issues arising from this approach.
372 There are many statutory provisions which authorise designated people to compel information from others and which do not refer specifically to the privilege against self-incrimination. For example, they include the surrender of fraudulent conveyancing documents under ss 81–83 of the Land Transfer Act 1952 and the Securities Commission’s powers to summons individuals to produce information to it under s 18 of the Securities Act 1978. In order to illustrate how these provisions are framed and the issues they raise concerning the privilege, we briefly examine s 18 of the Securities Act.
373 Under Parts I and II of the Securities Act, the Securities Commission carries out investigations into insider trading and substantial security holder disclosure. The Act does not directly authorise the Securities Commission to ask for incriminating information, nor does it explicitly preclude this.
374 In Part I of the Act, one of the principal functions of the Securities Commission is to “keep under review practices relating to securities, and to comment thereon to any appropriate body” (s 10). As already noted, s 18 provides the Securities Commission with, among other things, power to summons witnesses to appear before it and produce books or papers within their possession. In addition, s 17 states that the Commission shall have all powers which are reasonably necessary or expedient to enable it to carry out its functions and duties. According to s 32, it is an offence to refuse or wilfully neglect to appear before the Commission, answer questions, or produce documents (etc) when summonsed to do so.
375 Part II of the Act contains limitations on the offer of securities to the public and, under s 67, the Registrar of Companies has powers to require people to produce documents for inspection. Under s 60(1)(a), a person commits an offence who “refuses or fails to produce for inspection any document when required to do so pursuant to section 67 ...”.
376 In discussion with the Law Commission, the Securities Commission has suggested that the privilege has no application to its investigative powers. This is essentially because it views proceedings under both parts of the Act as civil processes which may have penal consequences but no criminal liability (eg, the automatic disqualification of a Director if found liable for insider trading where the court can award penal compensation of up to three times the loss or gain traded). The Securities Commission does not have a prosecuting role, but is a public body receiving complaints concerning market-place irregularities. When a complaint involves criminal market-place activity, it will be sent to the police or the Commerce Commission.
377 On the other hand, we have seen that the privilege can apply in a broad range of contexts, civil and criminal. Conceivably, information disclosed to the Securities Commission could be passed on to other agencies for further investigation or proceedings. In addition, the Securities Commission can initiate proceedings in limited circumstances, and it is both investigator and judge in relation to the information it compels individuals to produce. There may well be good reasons why the privilege should be expressly limited or removed in the context of the Securities Commission’s investigations of complaints concerning securities. However, the Law Commission considers there are dangers in importing an essentially inquisitorial regime into the Securities Act, particularly when it is currently silent about limits on the use of any compelled disclosures made.
378 From time to time an individual called to give evidence before the Securities Commission claims the privilege against self-incrimination. The Commission has advised us that, generally, the matter is resolved to the satisfaction of the interested parties, by the Commission making confidentiality orders to protect the witness from liability in other contexts, under s 19(5) of the Securities Act. Such orders can include the hearing of the proceedings or any class of proceedings in private, prohibiting the publication or communication of information given to the Commission in connection with the inquiry, or prohibiting the giving of evidence involving the information.
379 There are limits on the extent to which confidentiality orders can effectively replace the privilege against self-incrimination. Section 19(6) expressly applies the Official Information Act 1982 to information which has been the subject of a subs (5) order. The rider contained in subs (6), that the inquiry or proceedings of the Commission must have concluded, does not prevent derivative use being made of the information disclosed, by some other Crown agency. In addition, it is within the Securities Commission’s discretion whether it makes one of the confidentiality orders in s 19(5).
380 In New Zealand, the leading case on how to determine whether a particular statutory power implicitly removes or preserves the privilege is Taylor v New Zealand Poultry Board  1 NZLR 394. Cooke J said:
[I]f a Court is not satisfied that a statutory power of questioning was meant to exclude the privilege, it is in accordance with the spirit of the common law to allow the privilege. (402)
381 However, Cooke J envisaged that the privilege could be removed by statutory language which did not expressly refer to the privilege. In considering the Poultry Board Regulations 1980, he drew a distinction between “the realm of actual invasion of physical liberty” and the realm of economic regulation. He also commented:
[I]t may well be that one of the prime purposes of a power given by or under statute to question about business or fiscal matters will be frustrated if privilege can be invoked against it. In the end the true intent of the particular authorising statute must prevail. Only where it is not reasonably discoverable can there be a presumption in favour of the right to silence. Marketing schemes, introduced largely to protect and at the wish of primary producers, have long been a feature of the New Zealand economy. As Jeffries J said, policing is needed to make them work. Considerable bureaucratic powers are a necessary consequence – however distasteful to those who in principle would prefer free enterprise. (402)
382 The court in Taylor sought to strike a balance between those instances when the privilege should prevail and those when its application would unduly frustrate the objectives of the particular statute being considered. In the particular case, the majority held that the function of the Poultry Board included promoting and organising the poultry industry, for which purposes extensive powers were necessarily given under s 12 of the Poultry Board Act 1980:
The policy of the Act is thus to allow the industry something approaching plenary powers of self-government. It would be a mistake to see this case as an issue between the central Government and an individual citizen. And it would be quite wrong for this Court to approach the interpretation of the Poultry Board Act with any sense of hostility to the power to ask reasonable questions. (402)
383 McMullin J (dissenting) considered various examples of legislation which expressly removes the privilege, before focusing on the Poultry Board Act and Regulations. In finding that the privilege had not been removed impliedly, he said:
Nowhere in the Act itself is there any indication of a legislative intention to require, under pain of prosecution for default, the supply of information by any person with reference to the ownership, source or destination of eggs or poultry.. . .
While recognising that there are two sides to the argument, I have no confidence that in enacting s 24(1)(n) and (o) Parliament intended to provide the bureaucracy with the power to make punishable with a fine of $2000 the mere failure of a producer or retailer of eggs to supply information as to the source of eggs in his possession.
. . .
I would conclude by observing that in the Seventh Report of the Public Administrative Law Reform Committee, “Statutory Powers of Entry”, 1983, the Committee stressed that the relationship between the privilege of self-incrimination and an official’s power to ask questions should be clarified in respect of each statutory power, and emphasised the need to retain it. (408–409)
384 The Commission has reservations about whether the approach adopted by the majority in Taylor (ie, of removing the privilege when it is said to frustrate the objectives of the provision) gives sufficient weight to the privilege.
385 It is unclear what constitutes clear language removing the privilege, given that something less than an express removal or even a reference to the privilege is required. Furthermore, the reference to the privilege subverting the intent behind a statute is arguably open to almost universal application. On this basis, whenever there is a statutory power to request information, the privilege should be taken as removed because its invocation may undermine the underlying objective of the power – namely, to discover the truth.
386 In addition, the distinction between physical compulsion and economic regulation can be taken too far. When the person being questioned is likely to be under suspicion, the investigation of all offences, whether under the Crimes Act or some other Act, is inherently coercive, in the sense that the very purpose of the questioning is to obtain incriminating admissions. Prosecution and punishment are potential outcomes for both Crimes Act and other offences. These contentions find some support in the comments of Lord Browne-Wilkinson:
We all know the rules of statutory construction which require penal and taxation provisions to be strictly construed so as to protect the physical liberty and property of the individual ... but although the presumption is well established in those cases, we seem on occasion to have lost sight of the fact that the rules applicable to penal, taxing and confiscatory legislation are only instances of a more general rule. Maxwell on Statutes states the following proposition: “Statutes which encroach upon the rights of the subject, whether as regards person or property, are subject to a strict construction in the same way as penal Acts”.
387 Murphy J adopted a different approach from Cooke J in his minority judgment in Pyneboard Pty Ltd v Trade Practices Commission and Another (1982) 45 ALJ 609, 622. Unlike Cooke J in Taylor, Murphy J said that there should be a presumption against removing fundamental common law human rights, such as the privilege, unless that intent is conveyed in “unmistakable language”. The reasoning behind Murphy J’s approach is that the privilege against self-incrimination is not simply any common law rule which the legislature can remove whenever and to whatever extent it chooses, without first balancing competing interests.
388 Murphy J’s position can be supported in New Zealand by reference to the requirements in ss 5 and 6 of the New Zealand Bill of Rights Act 1990. As already discussed in chapter 5, s 6 says that wherever a provision can be given a meaning consistent with the Act, that meaning should be preferred, and s 5 provides that limits on the rights and freedoms in the Act must be prescribed by law. This legislation was enacted some time after the judgment in Taylor was delivered.
389 There is also support, in the American case law, for the idea that encroachments on the privilege should be as small as possible. In Central Hudson Gas & Electric Corp v New York Public Service Commission 447 US 557, 566 (1980), the court held that the infringement must be closely tailored to serve an important interest ie, a substantial interest is advanced and must not be more extensive than is required to serve that interest.
390 The relationship between the privilege against self-incrimination and an official’s power to ask questions requires clarification in respect of each statutory power: see the discussion in chapter 12 concerning what factors should be taken into account to determine whether the privilege should be removed in a particular context. The Commission welcomes submissions from those with experience in the area. In relation to existing provisions, it prefers the interpretation that a provision should only be taken as removing or restricting the privilege when the provision does so by explicit reference to the privilege in clear and unmistakable language.
391 A further difficulty in interpreting information-gathering provisions which do not refer to the privilege as nevertheless removing the privilege is the absence of any statutory protection in the privilege’s place. Because the privilege is not referred to in the information-gathering power, when the courts interpret the power as implicitly removing the privilege, there is no legislative protection in the privilege’s stead. In practice, immunities from prosecution are sometimes granted by the courts and prosecutors in these circumstances, in return for self-incriminating disclosures. However, as the following discussion illustrates, such immunities are unlikely to be commensurate with the protection the privilege provides.
392 In Busby v Thorn EMI Video Programmes Ltd  1 NZLR 461, the Court of Appeal held that if a defendant is required under an Anton Piller order to provide information which might include evidence of criminal offences, it should be on the condition that it will not be used to prosecute that defendant. As a consequence, the court said that the plaintiffs should be required to give an undertaking that the information would not be made available to the police for any purpose. The court sought to remove the real risk of prosecution arising from disclosure as a condition for negating the witness’s privilege.
393 In A T & T Istel Ltd v Tully  AC 45, the House of Lords ordered compliance with a Mareva injunction requiring disclosure of documents relating to the defendant’s dealings with the plaintiff’s money, despite the defendant’s claim of privilege. It found that there was unlikely to be a real risk of self-incrimination to the defendants in criminal proceedings as a result of disclosure, because para 33 of the disclosure order provided:
No disclosure made in compliance with [the order] shall be used as evidence in the prosecution of the offence alleged to have been committed by the person required to make that disclosure or by any spouse of that person. (55)
394 Additionally, a letter provided by the Crown Prosecution Service indicated that no use would be made of any disclosure in any subsequent criminal proceedings. This included a use fruits immunity. Their Lordships said that it was for Parliament to remove the privilege and provide protection to witnesses in its place.
395 When the courts order the giving of evidence and provide an immunity in the absence of legislative authority to do so, there is no clear statement of the scope of the remaining privilege, if any, and of the immunity provided in the privilege’s place. A process is lacking to ensure that adequate and consistent protection, in the form of an immunity, is provided.
396 Paragraph 9 of the Solicitor-General’s Prosecution Guidelines (as at 9 March 1992) contains limitations on prosecutors offering witnesses written undertakings to stay proceedings if the person is prosecuted for nominated offences. Under the Guidelines, the only person authorised to give an immunity is the Solicitor-General. The Prosecution Guidelines contain a number of prerequisites for granting an immunity (eg, that all avenues of gaining sufficient evidence to prosecute, other than relying upon the evidence to be given under immunity, have been exhausted). Paragraph 9.6 says that immunities are given reluctantly and only as a last resort in cases where it would not otherwise be possible to prosecute a defendant for a serious offence.
397 The Crown Law Office has advised the Commission that witness immunities from prosecution are infrequently granted and never when a witness has already declined to answer questions on the basis of the privilege. Instead, the witness will through counsel outline the evidence he or she can give, and then a decision is made about whether that witness will be granted an immunity.
398 There is no consistent pattern in the giving of prosecutorial immunities by other prosecution agencies. The status of the privilege varies, as do attitudes towards immunities (ie, to whether and when they should be granted, and whether a particular process should be followed). Immunities are most likely to be given when the witness is a comparatively minor offender or is an offender on the fringe of criminal activity. Sometimes immunity from prosecution is given when there is little possibility of a conviction against the person being obtained. However, on a number of occasions, the seriousness of the offending has meant that the immunity could not be given and the evidence could not be obtained.
399 The Inland Revenue Department has indicated that “it is most unlikely that a guarantee would ever be given, but if the question did arise, the form of the guarantee would be decided at the time”. Similarly, New Zealand Customs does not issue immunities from prosecution.
400 Reliance on prosecutorial goodwill alone, when legislation does not expressly provide an immunity for self-incriminating disclosures, is problematic. In high profile cases, or if there is a great deal of money at stake, the prosecution is unlikely to agree to issuing a guarantee of immunity from prosecution. In less serious cases, the prosecution might conceivably refuse to issue a guarantee if it is convinced of the person’s guilt but needs the additional evidence disclosed in the civil proceedings to mount a successful prosecution. The prosecution is also less likely to issue guarantees when criminal proceedings are actually running concurrently with civil proceedings, or are at least in contemplation (Cotton, 135).
401 Australian courts have the power to stay criminal proceedings on the ground that prosecution constitutes an abuse of process. Corns suggests that this may be an effective way of enforcing prosecution indemnities. In the New Zealand context, in R v McDonald  NZLR 252, 253, the Privy Council recognised that the giving of an undertaking to stay proceedings is within the proper scope of the Solicitor-General’s powers. The right to a fair trial in s 25(a) of the Bill of Rights Act might also be an avenue through which to prevent prosecutions being brought in breach of a prosecutorial immunity; although we are not aware of any such cases. Conceivably, a defendant could argue that there has been an abuse of process when a prior undertaking to stay the proceedings has not been honoured.
402 If a witness gives false information in exchange for an immunity, Corns suggests that he or she will be in breach of an implied condition of the immunity – that the person will provide truthful evidence. Therefore, the Crown might be entitled to prosecute the person and use the previously indemnified evidence against him or her. However, the position is not entirely clear.
403 There are also limits on the extent to which prosecutorial immunities, short of transactional immunities constituting guarantees not to prosecute or to stay, can be effective in protecting suppliers of information from prosecution, for as Freckleton observes:
[I]t would be extraordinary if prosecutors or police, once put on notice of criminality by information compulsorily extracted, could not contrive to come by the same or equally damning material by their own investigations. Given that the value of such protection for witnesses is so low, the utility of the Act’s self-incrimination provisions must be doubted in the real world of criminal complicity.
404 In a recent appeal from the Supreme Court of New South Wales, the High Court of Australia in Reid v Howard (1995) 184 CLR 1, held that the privilege is not to be modified or abrogated in favour of some different protection by judicial decision. Any such modification or substitution can effectively be achieved only by legislation. Justice cannot be served by the ad hoc modification of a right of general application, particularly one as fundamental as the privilege against self-incrimination.
405 The Commission concludes that immunities granted by the courts or prosecutors on an ad hoc, discretionary basis, when information-gathering provisions do not refer specifically to the privilege, are unsatisfactory substitutes for the privilege or for legislatively mandated immunities.