Thursday, 14 February 2008

Document destruction in Victoria.

The impact of destroying documents
The Victorian Crimes (Document Destruction) Act 2006 (the Document Destruction Act) was passed into law in Victoria in 2006. Together with the Evidence (Document Unavailability) Act 2006 (the Document Unavailability Act), these pieces of legislation amend the Victorian Crimes Act 1958 and Evidence Act 1958, correspondingly. They where issued in response to concerns raised by the Report on Document Destruction and Civil Litigation in Victoria, by Professor Peter Sallmann. It is imperative that all companies comprehend their responsibility in respect of how they store or destroy any documents. This incorporates email and other electronic files.

The Document Destruction Act establishes additional criminal penalties and the Document Unavailability Act sets up new civil consequences. The Document Destruction Act affects acts carried out in Victoria such as those by companies resident (or engaging in business) within Victoria. The Document Unavailability Act pertains to civil proceedings initiated within Victoria.

The Document Destruction Act introduced s254 into the Crimes Act 1958 (Vic) creating a new offence of destruction of evidence by an individual or a body corporate. The result is that an individual shall be guilty of an indictable offence if they:

  • know that a document or other thing of any kind is, or is likely to be, required in evidence in a legal proceeding; and
  • destroy it, or expressly or impliedly authorise or permit another person to destroy it, and that person does so; and
  • do so with the intention of preventing it from being used in evidence.
The maximum penalty under the Document Destruction Act for an individual is five years' imprisonment and a fine of over $62,000. A body corporate may be fined over $300,000.

Criminal penalties
The Document Destruction Act creates a criminal offences associated with the destruction of documents. If is possible and plausible for a document to be called by any ongoing or possible future legal proceedings, the destruction or concealment of the document will leave the person and one who has authorised or permitted them open to being prosecuted for the purpose of preventing the documents from being used in a legal proceeding. This is the offence of document destruction. When a document shall be "reasonably likely to be required" is not defined. As such, all documents that could be requested in any existing or possible future disagreement must be preserved. This includes emails. To prove authorisation or permission from a company, s254 requires that proof is supplied demonstrating that the board of directors, an officer, or a director supplied that authorisation or permission. Otherwise, a corporate culture that directed, encouraged, tolerated or led to the destruction taking place may be used as evidence.

Both individuals and companies can be prosecuted. In the case of a company, the conduct, knowledge and intention of officers or directors of the company are routinely ascribed to the company. The Document Destruction Act has established a "corporate culture" test for gauging an individual’s intention to prevent a document from being admitted into evidence. A limited defence of "due diligence" is available if the company can demonstrate good corporate governance and document handling practices.

Civil consequences
The Document Unavailability Act covers the case of documents being "unavailable" in civil proceedings and permits the court to "reverse" the consequence of the unavailability of the documents.

"Unavailability" is defined widely to denote a document that was formerly in the control of a company or individual which consequently has been destroyed or otherwise rendered unavailable. The Document Unavailability Act does not “mind” with how the document was destroyed, but is simply concerned with whether the document is available.

Under the new legislation, if a document is not available in a proceeding, and the court is of the view that the unavailability is likely to cause unfairness to a party, then the court will have the power to make any rulings or orders to ensure fairness to all parties, having regard to the circumstances in which the document became unavailable and its impact on the proceeding. The types of orders include:
  • drawing an adverse inference from a document not being unavailable,
  • presuming the fact that would have been proven by the document is true (without evidence to the contrary) even though the document is not available,
  • rejecting the admission of documents where their trustworthiness has been tainted by another document not being available, and
  • reversing the burden of proof in relation to the issue that the missing document concerns.
Legal proceedings that “may be” commenced
The Acts apply to legal proceedings that are in progress or are to be, or may be, commenced in the future. It is uncertain how remote a time this would cover. It would be necessary to extend document retention to cover all periods of limitation, including discretionary extensions.

Corporate culture
The Act has introduced the definition of “corporate culture”. The features detailed in the Act relating to the establishment and a determination of whether an acceptable corporate culture subsisted includes:
  • whether authority to commit the new offence or an offence of a similar character had been given by the officer of a body corporate; and
  • whether the associate has a reasonable belief or expectation that an officer of the body corporate would have authorised or permitted the relevant conduct being carried out with the relevant intention.
The Act states that the corporate culture encompassed by it shall “include situations where corporate policies and processes provide implied authorisation or permission”.

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