Citation: Regina v Ronen & Ors [2004] NSWCCA 67
Court: NSW Court of Criminal Appeal
Date: 22 March 2004
Judge(s): Spigelman CJ, Mason P, Kirby J
Background
Three accused were each charged with conspiring to defraud the Commonwealth of income tax over approximately a decade. Each was a director and shareholder of various companies operating in the retail and wholesale clothing industry. The Crown alleged that company employees were paid cash for overtime, with those payments deliberately kept off the payroll records.
A payroll clerk gave evidence at a preliminary hearing that old payroll records held at the companies' premises might confirm the frequency and scale of this practice. The Crown served subpoenas on four companies seeking production of all payroll reports for the relevant period. Each subpoena was addressed to the "proper officer" of the relevant company.
The accused applied to set aside the subpoenas. They argued the subpoenas were oppressive and an abuse of process because, as the sole directors and secretaries of the companies, they were effectively being compelled to assist in building the Crown's case against themselves. Whealy J rejected that application, and the accused appealed to the Court of Criminal Appeal.
Legal Issues
- Whether a subpoena addressed to the "proper officer" of a company is properly addressed to the company itself, so that the company must comply
- Who qualifies as the "proper officer" of a company for the purpose of answering a subpoena
- Whether a company must receive express authority from its board before a proper officer can answer a subpoena
- Whether compliance with a subpoena is oppressive or an abuse of process where the accused is the sole director and secretary of the company, such that the accused would be required to search for, or direct others to search for, the documents
- Whether an order to produce documents for use in evidence is an exercise of executive or judicial power
Decision
The subpoena addresses the company, not any individual officer. The Court unanimously confirmed that a subpoena addressed to the "proper officer" of a company is in substance a subpoena to the company itself. A corporation can only act through human agents, and the "proper officer" formulation simply identifies the mechanism through which the company discharges its own legal obligation to comply. Rochfort v Trade Practices Commission (1982) 153 CLR 134 was applied.
The "proper officer" is whoever is best placed to comply. The Court held that the proper officer is the person best able to locate and retrieve the relevant documents and, if required, answer questions in court. No express authorisation by the company is needed. The authority to act as proper officer arises as a matter of necessity from the company's obligation to comply with its legal duties. The English authority in Eccles & Co v Louisville and Nashville Railway Company [1912] 1 KB 135, which suggested express authority was required, was not followed.
Compliance by the company is not oppressive. Whealy J was entitled to find that each company could produce the documents without requiring any incriminating act by an accused. Mason P reasoned that the corporations held independent duties to comply and to identify an appropriate person to produce the documents. If no existing officer could do so without risk of self-incrimination, the company remained obliged to take steps to appoint a proper officer who had no such exposure, or to appoint a receiver. The accused could not use their personal privilege to deny the company's separate legal obligation.
The process is an exercise of judicial, not executive, power. Following The Queen v Davison (1954) 90 CLR 353, the Court confirmed that an order to produce documents for evidentiary purposes is an exercise of judicial power. This characterisation was relevant to the constitutional framing of the arguments raised by the appellants, all of which the Court rejected.
Orders Made
- The appeals were dismissed.
Key Takeaways
- A subpoena addressed to the "proper officer" of a corporation operates as a subpoena on the corporation itself, and the corporation bears an independent obligation to comply.
- The "proper officer" is the person best placed to locate the relevant documents and attend court. No express board resolution or grant of authority is required to clothe that person with authority to act.
- A corporation cannot rely on the personal privilege against self-incrimination of its directors or officers as a basis for non-compliance. The privilege is personal; it belongs to the individual, not the corporate entity.
- Where no existing officer can answer a subpoena without risk of self-incrimination, the burden falls on the corporation to identify or appoint a suitable person, including, if necessary, someone with no prior connection to the company.
- In dismissing the appeals, the Court of Criminal Appeal confirmed that ordering production of documents for evidentiary purposes is an exercise of judicial power, not executive power.
Legislation and Cases Referenced
Legislation:
- Crimes Act 1914 (Cth), ss 29D, 86(2), 86A
- Criminal Appeal Act 1912 (NSW), s 5F
- Supreme Court Rules 1970 (NSW)
Key Cases:
- Rochfort v Trade Practices Commission (1982) 153 CLR 134
- The Queen v Davison (1954) 90 CLR 353
- Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477
- Re BPTC Limited (in liq) (1993) 29 NSWLR 713
- Re Lindsay Toole & Co (Wool) Pty Ltd (1966) 2 NSWLR 120
- Penn-Texas Corporation v Murat Anstalt [1964] 2 QB 647
- Eccles & Co v Louisville and Nashville Railway Company [1912] 1 KB 135 (not followed)
- Braswell v United States 487 US 99 (1988)
- United States v Kordel 397 US 1 (1969)
- Wilson v United States 221 US 361 (1911)
- MacDonald v Australian Securities Commission (No 2) (1994) 48 FCR 210
- Commercial Bank of Australia v Whinfield (1920) VLR 225
- Old Welshman's Reef Gold Mining Co v Welshman's Gold Mining Co (1888) 14 VLR 253