Contents

Chapter 9
The penalty privilege

9.1In our Issues Paper, we asked whether pecuniary penalty statutes should recognise a privilege against compelled self-exposure to a pecuniary penalty. In this Report, we refer to this privilege as the “penalty privilege”.

9.2Before the Evidence Act 2006, the penalty privilege was recognised in New Zealand at common law. It gave protection against answering questions or providing information in a way that might expose oneself to a non-criminal penalty. The penalty privilege had been recognised by the Court of Appeal as giving potential protection to defendants in pecuniary penalty cases.160 As discussed in the Issues Paper, there is a strong argument that the Evidence Act 2006 abrogated the privilege, as it was not provided for in the new statute. At best, there is considerable lack of clarity as to whether it still exists.
9.3None of the existing pecuniary penalty statutes provide for the privilege. However, the Commerce Act 1986 does provide some degree of protection against self-exposure to a pecuniary penalty. It states:161
106 Proceedings privileged
(5) A statement made by a person in answer to a question put by or before the Commission shall not in criminal proceedings or in proceedings for pecuniary penalties [of this Act], be admissible against that person.
9.4To that extent at least, the Act gives the same protection to those pursued for pecuniary penalties as it does to those pursued for criminal offences.162
9.5Other pecuniary penalty regimes deal with the question in variety of ways. Some are silent on the matter. Some state that penalty proceedings are “civil” proceedings to which the “usual” rules of evidence apply.163 Some give statutory recognition to the privilege against self-incrimination but remain silent on the penalty privilege. For example, section 133 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (relating to on-site inspections) states that a person is not required to answer a question if the answer would or could incriminate the person.
9.6It should be noted that every pecuniary penalty regime introduced before the enactment of the Evidence Act 2006 was conceived in an environment where the penalty privilege existed at common law.164 None of those regimes, except the Commerce Act, modified or excluded the application of that common law privilege, although there is no policy material indicating whether or not that was a conscious choice.
160Port Nelson Ltd v Commerce Commission [1994] 3 NZLR 435 (CA). The case involved a pecuniary penalty proceeding under s 80 of the Commerce Act 1986. The Court of Appeal recognised the existence of the privilege but found that it was not a ground for limiting its power to order the advance exchange of briefs of evidence. See also Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 (HCA).
161See also Takeovers Act 1993, s 33C:
(1) A self-incriminating statement made orally by a person summoned under section 31N (whether or not the statement is recorded in writing) in the course of answering any question before, or providing any information or document to, the Panel, or a member, officer, or employee of the Panel,—
(a) … is not admissible in—

(i) criminal proceedings against that person; or

(ii) proceedings under this Act, the Securities Act 1978, or the Securities Markets Act 1988 for a pecuniary penalty order against that person …

162In contrast, the Act removes the privilege against self-incrimination in relation to information provided under the Act, or on appearing before the Commerce Commission, but is silent on the penalty privilege in that respect. See s 106(4):
A person shall not be excused from complying with any requirement to furnish information, produce documents, or give evidence under this Act, or, on appearing before the Commission, from answering any question or producing any document, on the ground that to do so might tend to incriminate that person.
See also the Takeovers Act 1993, s 33B:
No person is excused from answering any question or providing any information or document under this Act on the ground that to do so would or might incriminate or tend to incriminate that person.
163See for example the Takeovers Act 1993, s 43B; the Unsolicited Electronic Messages Act 2007, s 49; and the Financial Markets Conduct Act, s 509.
164Those regimes are the Dairy Industry Restructuring Act 2001; Hazardous Substances and New Organisms Act 1996; Overseas Investment Act 2005; Securities Act 1978; Securities Markets Act 1988; Takeovers Act 1993; Telecommunications Act 2001; and Telecommunications (Interception Capability and Security) Act 2013.