British American Tobacco Australia Limited v Gordon

[2008] VSC 148

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

No. 5617 of 2007

BRITISH AMERICAN TOBACCO AUSTRALIA LIMITED (ACN 000 151 100)	Plaintiff
v
PETER GORDON & ORS	Defendants

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 May 2008
DATE OF RULING:	2 May 2008
CASE MAY BE CITED AS:	British American Tobacco Aust Ltd v Gordon
MEDIUM NEUTRAL CITATION:	[2008] VSC 148

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PRACTICE AND PROCEDURE – whether information to be used in one proceeding may be used in another proceeding to be heard with the first proceeding – whether relevant to an issue joined by the party in the other proceeding

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APPEARANCES:	Counsel	Solicitors
For British American Tobacco Australia Limited (BATAL)	Mr MN Connock SC and Mr J Graham	Baker & McKenzie
For Roxanne Joy Cowell	Mr C Horan and Ms S Burchell	Arnold Bloch Leibler
For Peter Gordon and Slater & Gordon	Mr BF Quinn	Monahan + Rowell
For British American Tobacco Australia Services Limited (BATAS) (by leave)	Mr MF Wheelahan SC and Mr M O’Meara	Corrs Chambers Westgarth

HIS HONOUR:

1. Before the court are two applications brought in this proceeding by summonses filed on 23 April 2008, one on behalf of the firstnamed defendant, Peter Gordon, and the secondnamed defendant, Slater & Gordon Limited (“the lawyer defendants”), the other on behalf of Roxanne Joy Cowell, the representative of the estate of the late Mrs McCabe.  Each seeks relief from a restraint imposed by court order or undertaking respectively as to the use which the defendant may make of what has been called in these proceedings the BATAL only information. 

1. What is sought is that these defendants who are also defendants to a proceeding brought by BATAS, number 5618 of 2007, might be permitted to use the BATAL only information for the purposes of conducting their defences in the BATAS proceeding.

1. BATAL resists the applications first on the basis that they represent an unacceptable change in the position long adopted by the defendants that they did not wish to use the BATAL only information for any purpose.  Similar relief with respect to this information was sought in the defendants’ summons filed on 30 May 2007 but it was not pursued, apparently on the basis that the parties hoped to achieve agreement.

1. The 2007 summons however continued with respect to the use of BATAS only information in the BATAL proceeding, and ultimately to the Court of Appeal where on 14 December 2007 it was determined that an order permitting this use was appropriate.[1]

   [1]Cowell v British American Tobacco Australia Services Limited [2007] VSCA 301.

1. Throughout this proceeding and until very recently, counsel on behalf of the defendants repeatedly told the court that they sought to make no use of the BATAL only information in the BATAS proceeding.  Now it seems this has changed.  Counsel on behalf of the estate bravely sought to provide some credible reason for this, but none of them seems to me to be compelling.  The position as I see it is simply that the lawyers for the estate have changed their minds.  Having now had to address in a little detail their client’s defence to the claims made against it in the BATAS proceeding, they have decided to include an allegation that BATAS was not only itself guilty of the iniquity which is said removes confidentiality and privilege attaching to the information, but also that it conspired with BATAL to engage in this iniquity.  It is now thought desirable to use the BATAL only information to support this allegation.

1. It is not for me at this stage to express any view about the prospects of this allegation, nor as to the utility of the BATAL only information for this purpose, and I do not do so.  It was not suggested that I should reject as fanciful either proposition.  This is not a case where a party seeks to go behind or re-argue a point previously determined.  In the circumstances I see my duty as obliging me to entertain these applications and I will do so.

1. The second position taken on behalf of BATAL is that the applications should be refused on the merits.  This must address the difficulty that a similar order with respect to the BATAS information has already been made.  This order was made largely on the basis that to shut out a party from using against BATAS material which was available to be deployed at trial against BATAL would be unreasonable.  It may be significant in the present case that BATAS itself offered no argument against the proposed course.  Nor, other than to assert its rights as to confidentiality and privilege, did BATAL seek to demonstrate any prejudice which might be caused by the orders which are now sought.  I will therefore make the orders sought by the estate.

1. The position adopted on behalf of the lawyer defendants is not quite the same.  Counsel on their behalf put at the forefront of his argument that his clients, unlike the estate, do not assert iniquity in their defence to the BATAS claim.  Their case is that, at the time they received the BATAS only information, the lawyers believed on reasonable grounds that no confidence or privilege reposed in it.  This belief is said to have been based upon the matters which are set out in paragraph 27(b)-(d) of the defence.  Having in this way disavowed any attempt to seek to prove the fact of the iniquity of BATAS, counsel rather disingenuously said that, if the estate established iniquity, this would be of assistance for his client.  I say nothing further about this.  At this stage I approach the defence and the submissions on their face.

1. The result of all of this is that it has not been demonstrated on behalf of the lawyer defendants that there is any good reason for them to be relieved of the restraints imposed upon their use of the BATAL only information.  It was not said that any of the facts relied upon as founding the belief depended upon its availability.  In short, counsel for the lawyer defendants submitted simply that it would be impractical to restrain them from using the BATAL only information when it was available for use by others in this litigation.  To leave the restraint in place would be to further complicate unnecessarily an already complicated trial.

1. I am left then in the position that the lawyer defendants do not wish to use the BATAL only material, material which they obtained prima facie in improper circumstances.  In these circumstances I decline to remove them from the restraint which presently has been imposed upon them.

1. The consequence of that will be that the summons on behalf of the estate is successful, and the summons on behalf of the lawyer defendants I will dismiss.

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