Responding to Courts and regulators: claiming privilege against self-incrimination

By Tim Jones, Luke Furness and Adam Rose
16 Sep 2021
The High Court provides a useful reminder on what to prove, how to prove it, and what protection you receive when claiming privilege against self-incrimination.

In US television dramas, it's "pleading the Fifth". In Australia, privilege against self-incrimination entitles a person to refuse to answer questions or provide documents if it would tend to incriminate that person. With regulators seeking greater penalties and increased numbers of prosecutions, it's more important than ever to know what the privilege is and how to claim it. In Deputy Commissioner of Taxation v Shi [2021] HCA 22, the High Court reminds us how to do both.

Eight quick facts about the privilege against self-incrimination

  1. It has ancient roots, but is often modified or codified into law (eg. section 128 of the Evidence Act 1995 (Cth)) so you should always know which particular test applies.
  2. In Australia, it is available to people, not corporations. The basic position is that a corporation cannot resist disclosure on grounds it would tend to incriminate others such as directors.
  3. It is privilege against self-incrimination. You generally cannot resist disclosure that would tend to incriminate others.
  4. It can apply to non-Court venues such as Commissions of Inquiry. Whether it does depends on the enabling legislation. It can be excluded by clear words.
  5. The test takes a number of formulations, but is about whether there is a real and reasonable risk of future prosecution or penalty if the person discloses the information or documents.
  6. The test is not whether disclosure would be a smoking gun or dramatic confession of criminality, it is enough to show that disclosure would be a "link in the chain" or "set in train a process" that may lead to incrimination.
  7. The onus is on the person claiming the privilege to make out the factual basis for it. This is one of the most important practice points. There can be good grounds for the privilege, but where the evidence for it is insufficient or defective, the privilege claim fails.
  8. The privilege may provide protection against incrimination under foreign laws, but the person claiming privilege must clearly provide the content of those laws.

What do you need to prove to claim self-incrimination successfully?

Shi's case was about freezing orders sought by the ATO and section 128A of the Evidence Act 1995 Cth). However, the Court noted at that the language of that section was "in large part, the language of the common law" which makes the case helpful to anyone grappling with the privilege. Here are the steps that the Court discussed:

1. The person claiming privilege prepares documents to support the claim

The person must:

  • disclose so much of the information required to be disclosed to which no objection is taken;
  • prepare an affidavit containing so much of the information required to be disclosed to which objection is taken (the privilege affidavit) and deliver it to the court in a sealed envelope; and
  • file and serve on each other party a separate affidavit setting out the basis of the objection.

2. The Court will determine whether there are "reasonable grounds" for the objection

"Reasonable grounds" is an objective test of whether there is a "real and appreciable risk" of prosecution if the relevant information is disclosed. The question is whether information may "tend to prove" the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. That means where there is "a link in the chain of evidence" that becomes "a means of bringing home an offence". Every fact in support of the claim should be in the affidavit.

3. Despite being reasonable grounds, the Court may still order disclosure if it's "in the interests of justice"

If there are reasonable grounds for the objection the Court must not require the information contained in the privilege affidavit to be disclosed and must return it.

However, the Court may still order disclosure of the whole or part of the privilege affidavit if:

  • The information tends to prove the committing of an offence or liability for civil penalty under an Australian law,
  • The information does not tend to prove the committing of an offence or liability for civil penalty under a foreign law; and
  • The interests of justice require the information to be disclosed. This is a balancing of factors test taking into account:
    • the nature of the information,
    • the likelihood of an offence being prosecuted; and
    • any resulting unfairness to a party.

The Court found that Mr Shi had shown the information would tend to prove offences under Australian law, but he did not lead any evidence in respect of any foreign law.

The Court also found that the "interests of justice" test was passed. It said it was irrelevant and "unhelpful" to consider whether the relevant authorities had alternative means of gathering the same evidence to prosecute Mr Shi. Interestingly though, the Court said that the availability of other evidence may support disclosure.

4. If the Court orders disclosure despite reasonable grounds, it can still take steps to protect the person

The Court flagged three important protections against use of Mr Shi's information in a future prosecution:

  • A Court certificate prohibiting any information disclosed (or obtained as a result of the disclosure) being used in any Australian Court.
  • A Court non-publication order - and the Court remitted the matter back to the lower Court to decide if one should be granted.
  • The implied undertaking (known as the Harman undertaking) prohibiting the use of material disclosed except for the purposes of the proceedings. The Court set out in some detail how this undertaking would bind the ATO.

Three takeaways for claiming self-incrimination

  1. It's essential to prepare accurate, comprehensive privilege affidavits from the start. Oral submissions and supplementary evidence may not succeed.
  2. Courts will rarely assume the content of any foreign laws. You must point to what foreign law may apply and what offence or class of offences under that law might be relevant. It's important to have comprehensive evidence of foreign legislation and case law from reliable sources and with certified translations.
  3. While Courts always prefer "open justice", there are valuable mechanisms to protect sensitive or privileged information, even where it's disclosed for the purposes of the proceedings.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.