Australia: Document Destruction – A New Criminal Offence

The introduction of the Crimes (Document Destruction) Act 2006 (Vic) (Act) will impact everyone that does business in Victoria.

The new legislation follows the widely publicised, Victorian Court of Appeal decision in British American Tobacco Australia Services Ltd v Cowell (Representing the Estate of McCabe (deceased)) (2002) 7 VR 524 (the BATA decision) and amends the Crimes Act 1958 (Vic).

From 1 September 2006 it will be a criminal offence to destroy documents or other things of any kind that are or are reasonably likely to be used as evidence in legal proceedings that have commenced, or ‘may’ be commenced in the future. This is very broad. The new offence applies to all types of documents whether paper, electronic or image. This includes emails, sound recordings, DVD’s and other data recordings.

Section 254 is as follows:

254. Destruction of evidence

(1) A person who –

• knows that a document or other thing of any kind is, or is reasonably likely to be, required in evidence in a legal proceeding; and
• either –

• destroys or conceals it or renders it illegible, undecipherable or incapable of identification; or
• expressly, tacitly or impliedly authorises or permits another person to destroy or conceal it or render it illegible, undecipherable or incapable of identification and that other person does so; and

• acts as described in paragraph (b) with the intention of preventing it from being used in evidence in a legal proceeding –
  is guilty of an indictable offence and liable to level 6 imprisonment (5 years maximum) or a level 6 fine or both.
  Note 1: ‘Document’ is defined in section 38 of the Interpretation of Legislation Act 1984.
  Note 2: The maximum fine that may be imposed on a body corporate found guilty of an offence against this section is 3000 penalty units: see Sentencing Act 1991 s 113D.

(2) This section applies with respect to a legal proceeding, whether the proceeding is one that is in progress or is to be, or may be, commenced in the future.

In Victoria, before the amendments and the BATA decision, it was generally understood that criminal charges would not arise from document destruction unless the documents were destroyed after legal proceedings commenced and amounted to an attempt to pervert the course of justice or contempt. This is no longer the case.

Individuals or companies may be found guilty of an indictable offence. A company may be guilty as a result of the activity of its officers or associates. A conviction will arise if a court is satisfied that a person (company or individual) knows that a document or other thing is, or is reasonably likely to be, required in evidence in legal proceedings and that person:

Destroys or conceals or renders that document or other thing illegible, undecipherable or incapable of identification; or

Expressly, tacitly or impliedly authorises or permits any other person to perform such an act.

To prove an offence it will be necessary to establish that the person acted with the intent of preventing the document or other thing from being used in legal proceedings that are in progress or may be commenced at a later time. If a party is found guilty of this offence the maximum penalty is imprisonment for 5 years or a fine of up to $62,886 for individuals or a fine of up to $314,430 for companies.

A company may be prosecuted irrespective of whether proceedings are commenced against the individual officers or associates that destroyed the documents. If an associate or officer of a company contravenes the Act, the company is also taken to have contravened the Act. An ‘associate’ is an employee or agent of a company.

An officer or associate will be found to have the necessary intention to destroy documents in contravention of the Act if it can be established that there were direct authorisation or a corporate culture that directed, encouraged, tolerated or permitted the destruction to occur. This can be established by demonstrating that there was a general attitude, course of conduct or practice existing within the company towards destruction of documents.

If a company can show that it exercised due diligence to prevent any negligent or wilful destruction of documents from occurring it may be able to defend a charge of document destruction. To do this a company must prove that: >The culture of the company does not promote, authorise, tolerate or encourage the destruction of documents that may be used in legal proceedings; and >The company has a policy that clearly demonstrates compliance with a document retention and destruction program and enforces that policy.

There is no doubt that documents must not be destroyed when litigation is underway, or possible or likely. Whether litigation is possible or likely depends on the facts of each circumstance. Although there have been some recent suggestions that the courts are moving towards a standard of ‘anticipated’ legal proceedings there is currently no established legal criteria to guide companies on the circumstances that make litigation ‘reasonably likely’. In some circumstances documents should be kept indefinitely.

The Act does not clarify matters.

It is very important for companies to implement and enforce an appropriate compliance program to prevent the destruction of documents in contravention of the Act. The following steps may assist a company to comply with the Act:

• Immediate review of all current document retention policies to ensure they are compliant with the new legislation.
• Implement a compliance and training program that is clearly directed at the conduct the Act seeks to prohibit.
• Implement a clear company policy that documents are only destroyed where it is legally permitted and where legal advice has been sought when doubt exists.
• Ensure that the administration and enforcement of the compliance program is overseen and regularly monitored by senior management and the board of directors.

Any decision to keep or destroy documents and other things should be considered very carefully. For further information, please contact Michele Kramer in the first instance.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.