British American Tobacco Australia Services Ltd v Eubanks - [2004] NSWCA 158

No judgment structure available for this case.

Reported Decision:
60 NSWLR 483

Court of Appeal

CITATION: British American Tobacco Australia Services Limited v Sharon Y Eubanks for the United States of America; Nicholas Basil Cannar v Sharon Y Eubanks for the United States of America; British American Tobacco (Investments) Limited v Sharon Y Eubanks for the United States of America [2004] NSWCA 158

HEARING DATE(S): 30/03/04, 31/03/04, 01/04/04

JUDGMENT DATE:
18 May 2004

JUDGMENT OF: Spigelman CJ at 1; Handley JA at 213; Bryson JA at 214

DECISION: Leave to appeal granted on Grounds 1-3 of Cannar application. Appeal dismissed. Leave to appeal otherwise refused.

CATCHWORDS: EVIDENCE - evidence on commission - requests by foreign courts - meaning of "evidence" - whether evidence sought for purposes of US proceedings - weight to be given to terms of letters of request - Evidence on Commission Act 1995 s 33 - discretion to give effect to letters of request - breadth of inquiry - possible exposure to civil or criminal proceedings - privilege of witnesses - where use-immunity granted in jurisdiction of requesting court - Evidence on Commission Act 1995 s 34 - - - EVIDENCE - legal professional privilege - where documents in public domain - whether implied consent to disclosure by third party - where explicit consent to procedure whereby documents could become publicly available - Evidence Act 1995 s 122(4) - PRACTICE AND PROCEDURE - joinder of parties - where third party rights potentially affected by course of examination of witness - where third party able to protect itself by attending examination and seeking to be heard - no joinder required - Supreme Court Rules 1970 Pt 8 r 8(1)

LEGISLATION CITED: Evidence Act 1906 (WA) ss 115, 116, 117, 118, 118A
Evidence Act 1929 (SA) s 59F
Evidence Act 1939 (NT) Pt 6, Div 2
Evidence Act 1958 (Vic) Pt 1, Div 1C
Evidence Act 1971 (ACT) Pt 12B
Evidence Act 1977 (Qld) Pt 3, Div 3
Evidence Act 1995 ss 117, 118, 119, 122, 128, 134
Evidence (Evidence on Commission) Amendment Act 1988
Evidence on Commission Act 1995 ss 6, 12, 32, 33, 34
Evidence on Commission Act 2001 (Tas)
Evidence (Proceedings in Other Jurisdictions) Act 1975 (UK)
Foreign Tribunals Evidence Act 1856 19 and 20 Vic c113
Insolvency Act 1986 (UK) ss 230, 236
Supreme Court Act 1970 s 101
Supreme Court Rules 1970

CASES CITED: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225
Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327
British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197
Clyne v New South Wales Bar Association (1960) 104 CLR 186
Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49
First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154
Genira Trade & Finance Inc v CS First Boston and Standard Bank (London) Limited [2001] EWCA Civ 1733
Golden Eagle Refinery Co v Associated International Insurance Co (unreported, EWCA (Civ), Hirst and Buxton LJJ, Sir John Knox, 19 February 1998)
Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad (1999) 196 CLR 161
Gredd v Arpad Busson [2003] EWHC 3001
Kang v Kwan [2001] NSWSC 697
Kang v Kwan [2001] NSWSC 698
Kennedy v Wallace [2004] FCA 332
Marcel v Commissioner of Police of the Metropolis [1992] Ch 225
McCabe v British American Tobacco Australia (Services) Ltd [2002] VSC 73
Morris v Director of the Serious Fraud Office [1993] Ch 372
Morrison v Peacock (2000) 50 NSWLR 178
Morrison v Peacock (2002) 210 CLR 274
News Limited v Australian Rugby Football League (1996) 64 FCR 410
Radio Corporation of America v Rauland Corporation [1956] 1 QB 618
Re Murjani (a bankrupt) [1996] 1 All ER 65
Re Norway's Application (No 1) [1987] QB 433
Re Norway's Application (No 2) [1990] 1 AC 723
Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547
Sodden v Burns [1996] 3 All ER 967
State of Minnesota v Philip Morris Inc & Ors (Unreported, EWCA (Civ), Lord Woolf MR, Peter Gibson and Otton LJJ, 30 July 1997)
Telstra Corporation Limited v Australis Media Holdings (No 2) (1997) 41 NSWLR 346
United States of America v Philip Morris Inc [2003] All ER (D) 191
Victoria v Sutton (1998) 195 CLR 291

PARTIES :
British American Tobacco Australia Services Limited
Nicholas Basil Cannar
British American Tobacco (Investments) Limited
Sharon Y Eubanks for the United States of America

FILE NUMBER(S): CA 40799/03; CA 40969/03; CA 40953/03

COUNSEL: J Middleton QC / M Leeming (BATAS)
S J Gageler SC / K M Richardson (Nicholas Cannar)
T F Bathurst QC / G K J Rich / S M Nixon (BATCo)
A Sullivan QC / A Bell / K Morgan (Sharon Eubanks for the USA)

SOLICITORS: Corrs Chambers Westgarth (BATAS)
Gilbert & Tobin (Nicholas Cannar)
Baker & McKenzie (BATCo)
Ebsworth & Ebsworth (Sharon Eubanks for the USA)

LOWER COURTJURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): CL 13177/02

LOWER COURT
JUDICIAL OFFICER : Bell J

- 18 -

CA 40799/03
CA 40969/03
CA 40953/03

SPIGELMAN CJ
HANDLEY JA
BRYSON JA
Tuesday 18 May 2004

BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

Nicholas Basil CANNAR v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

FACTS

Nicholas Basil Cannar was for many years a senior solicitor in and subsequently head of the legal department of British American Tobacco (Investments) Limited (BATCo) in the United Kingdom. From March 1997 to September 1999 he was employed by British American Tobacco Australia Services Limited (BATAS) as its Director of Legal Services. The United States of America has instituted civil proceedings against a number of tobacco companies, including BATCo, alleging a conspiracy to deceive consumers into smoking. A United States District Court issued a letter of request for international judicial assistance to the Registrar of this Court, identifying certain matters in relation to which the person nominated by the United States (Sharon Y Eubanks, the Opponent) sought Mr Cannar’s testimony. James J ordered Mr Cannar’s evidence to be obtained in ex parte proceedings pursuant to s33 of the Evidence on Commission Act 1995. Mr Cannar sought to have the orders set aside. Bell J refused to do so. In the course of that application, Bell J rejected BATCo’s objection to certain evidence on the basis of a claim to legal professional privilege. Her Honour rejected BATAS’s application to be joined as a party. Mr Cannar, BATAS and BATCo each sought leave to appeal against Bell J’s decisions.

HELD
(per Spigelman CJ, Handley and Bryson JJA agreeing)

The Cannar Application
A
Whether an order should be made to compel a witness to attend for examination pursuant to the Evidence on Commission Act 1995 is a matter of substance affecting the civil rights of that witness. It is not a matter of practice and procedure, although leave to appeal is still required under s101(2)(r) of the Supreme Court Act 1970. Leave should be granted in certain respects. [13], [14]

B
The word “evidence” in the Evidence on Commission Act 1995 refers to material to prove or disprove facts rather than material which may lead to the discovery of evidence. The history of the Australian legislative scheme implementing the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters , as well as the desirability of the internationally uniform interpretation of a treaty of this character, indicates that the British case law from which this distinction is drawn should generally be followed in Australia. [33], [41], [42], [45]

Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad (1999) 196 CLR 161 applied. Gredd v Arpad Busson [2003] EWHC 3001 followed. Radio Corporation of America v Rauland Corporation [1956] 1 QB 618, Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, Application of Forsyth; Re Cordova Philips Roxane Laboratories Inc [1984] 2 NSWLR 327 referred to.

C
Although the terms of a letter of request are not conclusive, the letter of request issued in this case by the US District Court sought evidence for the purposes of the US proceedings within the meaning of the Act. [47], [51], [62], [63]

Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154, Gredd v Arpad Busson [2003] EWHC 3001 referred to.

D
It is not necessary for the Supreme Court to be satisfied that evidence sought in a letter of request is both admissible and to be admitted in the foreign proceedings before making an order pursuant to s 33. A general determination of apparent relevance of the evidence is all that is required. [70], [71], [74], [76]

Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 followed. First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154, Genira Trade & Finance Inc v CS First Boston and Standard Bank (London) Limited [2001] EWCA Civ 1733, Gredd v Arpad Busson [2003] EWHC 3001 discussed.

E
There was no error in Bell J’s exercise of the discretion to give effect to the letter of request. Bell J was entitled to hold that the order should not be refused because of the breadth of the inquiry. [94], [95]

United States of America v Philip Morris Inc [2003] All ER (D) 191 referred to.

F
Bell J was entitled to exercise the discretion notwithstanding the possibility of exposure to civil or criminal proceedings. Section 34 contains a comprehensive regime to protect the privilege of witnesses that is intended to operate in accordance with its terms. An order made under s 33 operates subject to the s 34 regime. There was no evidence of a real possibility of proceedings against Mr Cannar. Leave to appeal in this respect refused. [97], [98], [100], [110]

First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154 referred to.

G
Bell J committed no error of principle in rejecting the tender of certain evidence. Leave to appeal in this respect refused. [125]

The BATCo Application
H
Her Honour was correct to admit certain evidence to which a claim of legal professional privilege was made. Leave to appeal refused on two bases.

I
Even if the particular exhibits had not been tendered, there would have been no different result. [137]

J
Secondly, the fact that a claimant of client legal privilege under s122(4) of the Evidence Act 1995 does not want documents made public does not determine the issue of consent for the purposes of that subsection. In this case BATCo voluntarily entered into a consent judgment containing a procedure pursuant to which documents could become publicly available. It thereby gave its implied consent to disclosure of documents in accordance with that procedure if its objections, allowed by the procedure, did not prevail. [185], [186]

Telstra Corporation Limited v Australis Media Holdings (1997) 41 NSWLR 346 referred to.

The BATAS Application
K
There is no general rule requiring the joinder of a third party where a person is to be ordered to disclose confidential information or documents belonging to that third party. The terms of Pt 8 r 8 of the Supreme Court Rules 1970 must be applied. Bell J did not err in applying that rule. [199], [206], [210]

Victoria v Sutton (1998) 195 CLR 291, News Limited v Australian Rugby Football League (1996) 64 FCR 410 applied. Marcel v Commissioner of Police of the Metropolis [1992] Ch 225, Morris v Director of Serious Fraud Office [1993] Ch 372, Sodden v Burns [1996] 3 All ER 967 distinguished. Re Murjani (a bankrupt) [1996] 1 All ER 65 not followed.

ORDERS
Leave to appeal allowed on Grounds 1, 2 and 3 in the Cannar Application. Appeal dismissed. Leave to appeal otherwise refused. Claimant/Appellant to pay the Opponent/Respondent’s costs.
Leave to appeal refused in the BATCo and BATAS applications. Claimant to pay the Opponent’s costs in each case.

CA 40799/03
CA 40969/03
CA 40953/03

SPIGELMAN CJ
HANDLEY JA
BRYSON JA
Tuesday 18 May 2004

BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

Nicholas Basil CANNAR v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED v SHARON Y EUBANKS for the UNITED STATES OF AMERICA

Judgment

1 SPIGELMAN CJ: The Court has before it three applications for leave to appeal from interlocutory judgments of Bell J of this Court. The applications for leave were heard together with the submissions on each appeal, if leave were granted.

2 On 9 December 2002, James J made orders, ex parte, pursuant to s33 of the Evidence on Commission Act 1995 (NSW) (“the Act”), requiring that Nicholas Basil Cannar be examined in relation to certain matters identified in a Letter of Request for International Judicial Assistance (“the Letter of Request”) issued by the United States District Court for the District of Columbia (“US District Court”). The proceedings in that Court are entitled United States of America v Philip Morris Incorporated et al Civil Action No 99-CV-02496 (GK) (“the US proceedings”). The Opponent/Respondent, Sharon Eubanks, is the person nominated by the US District Court for purposes of the Letter of Request.

3 In the US proceedings a number of tobacco companies, and their representative organisations, including British American Tobacco (Investments) Limited, (“BATCo”) one of the Claimants in this Court, are defendants. They are civil proceedings instituted on behalf of the United States of America which allege a conspiracy by the defendants to deceive consumers into smoking. The relevant conduct is identified as follows in the Letter of Request:

“(1) fraudulently maintaining that there was an open question as to whether smoking causes disease, despite the fact that defendants knew otherwise;

(2) concealing and suppressing relevant research on the health consequences of smoking and funding biased or irrelevant research on the health consequences of smoking, while publicly claiming to do everything in their power, including fund independent research, in order to determine if smoking causes cancer or other diseases;

(3) deceiving consumers into becoming or staying addicted to cigarettes by claiming that nicotine is not addictive, despite the fact that defendants knew that nicotine is addictive;

(4) manipulating the design of cigarettes and the delivery of nicotine to smokers to maintain and enhance the addictiveness of cigarettes, while at the same time denying that they engaged in such manipulation;

(5) marketing and advertising ‘light’ and ‘ultra-light’ cigarettes as conferring health benefits over other cigarettes, despite their knowledge that no such health benefits existed; and

(6) marketing and advertising with the intent of addicting children into becoming lifetime smokers, while claiming that they did not market to children.”

4 The Letter of Request also outlines the nature of the involvement of Mr Cannar in the matters before the United States District Court, which assertions include the following:

“1. Mr Cannar is the former long-time Senior Solicitor and head of the legal department for BATCo in the United Kingdom. The United States alleges that Mr. Cannar’s responsibilities included devising and implementing document management policies for BATCo in the U.K., and also for the implementation of BATCo’s worldwide document management, retention and destruction policies. This included setting requirements of document retention and destruction for BATCo operating companies throughout the world. Employees of the various operating companies were required to follow these policies – including, among other things, to destroy documents in accordance with certain schedules. One such BATCo operating company was W.D. & H.O Wills (‘Wills’), at one time a wholly-owned BATCo subsidiary in Australia, later known as B.A.T. Australia Services Ltd. [‘BATAS’]. Mr. Cannar also had a responsibility for managing the flow of documents between BATCo and its United States affiliate, Brown & Williamson, and also the exchange of documents and information among BATCo’s various operating companies (including Wills), and Brown & Williamson.

2. Later, in the mid-1990’s, Mr. Cannar moved from BATCo in the U.K. to work full-time at Wills in Australia. He held several roles with Wills, and was, among other things, an attorney with responsibility for document management, retention, and destruction at Wills.

3. Plaintiff, the United States, alleges that in those capacities Mr. Cannar participated in the development and implementation of a document management policy, that resulted in the destruction of relevant documents, for the purpose of preventing the discovery of certain sensitive documents in litigation in the United States and otherwise …

…

4. The United States alleges that, among other things, Mr. Cannar participated in policies and practices that resulted in the destruction of relevant documents in the U.K. and elsewhere, including Australia. Furthermore, documents determined to have been destroyed by an Australian Court are relevant to the United States’ claims in its Amended Complaint in this action, and the document destruction policies and practices identified by the Australian court involved actions of BATCo employees and agents.

5. The United States has reason to believe that Mr. Cannar not only directed the destruction of responsive documents located within the U.K., but also the destruction of responsive documents in Australia and elsewhere.”

5 The Letter of Request went on to refer to certain documents concerning Mr Cannar’s activities which are the subject of the claim for legal professional privilege by BATCo in this case, to which further reference will be made below.

6 The three applications for leave before the Court raise quite distinctive issues. It is convenient to deal with detailed aspects of the evidence and her Honour’s findings in each relevant context.

7 Nothing turns on the changes to the form of the order in the course of the proceedings before the Court. At the time of these proceedings, the orders originally made by James J as subsequently amended are:

THE COURT ORDERS

Evidence on Commission Act

1.(a) That Nicholas Basil Cannar, who resides at 62 Cope Street, Lane Cove, NSW, 2066, attend the Supreme Court of New South Wales continuing thereafter at such place and time as the examiner may direct from day to day until complete, to be examined in relation to the topics of testimony listed on pages 12 to 16 of the Letter of Request for International Judicial Assistance issued by the United States District Court for the District of Columbia to the Registrar of the Supreme Court of New South Wales.

(b) Plaintiff to have liberty to apply on 2 days’ notice to allocate a date for hearing before the examiner.

2. That a judge of the Supreme Court be appointed examiner to administer the taking of an oath or affirmation and the conduct of the examination.

3. That the examination of Mr Cannar be video taped and transcribed, and that such video tapes and transcripts be signed and certified as correct and authenticated by the examiner and forwarded to the Sydney Registry of this Honourable Court by no later than a date to be determined by the Court.

4. That a certified copy of the transcript and video tapes be made available to Mr Anthony Highfield of Ebsworth & Ebsworth by no later than a date to be determined by the Court.

4(A). That the examination of Nicholas Cannar be conducted in camera.

4(B). That leave be granted to Nicholas Cannar to be represented at the examination by legal practitioners of the Supreme Court of New South Wales and legal practitioners of the United States of America.

4(C). That leave be granted to British American Tobacco (Investments) Limited to be represented at the examination by legal practitioners of the Supreme Court of New South Wales and legal practitioners of the United States of America.

Evidence on Commission Act

5(A). The plaintiff to keep the transcript of the examination and any video recording of the examination confidential and not make any use of the transcript or any video recording of the evidence of Nicholas Cannar other than to tender the same at trial.

5(B). A certified copy of the transcript and any video recording of the examination of Nicholas Cannar pursuant to the letter of request be provided to the solicitors for British American Tobacco (Investments) Limited by no later than one month after the date of the examination upon the solicitors undertaking to keep the transcript of the examination and any video recording of the examination confidential and not to make any use of the transcript or any video recording of the evidence of Nicholas Cannar until the same is tendered at trial.

6. Leave to the plaintiff to participate in the examination by United States Department of Justice Counsel and by legal practitioners of the Supreme Court of New South Wales.

7. Leave to the plaintiff to issue a Subpoena to Give Evidence addressed to Mr Cannar compelling his attendance at the examination.

8. A copy of this Order, the Amended Summons and the Affidavits of Anthony John Highfield sworn 22 November 2002 and 6 December 2002 be served on Mr Cannar on or before 4pm on 23 December 2002.”

8 The “topics of testimony” in the Letter of Request, about which Mr Cannar would be examined under the order, are:

“1. The creation of the document management policy:

1.1 Time of creation of the document management policy;

1.2 Individuals responsible for creation of the document management policy;

1.3 BATCo’s connection to the creation of the document management policy;

1.4 Brown & Williamson’s connection to the creation of the document management policy;

1.5 BAT’s connection to the creation of the document management policy;

1.6 Effect of prospective litigation on the creation of the document management policy;

1.7 Awareness of prospective litigation at the time of the creation of the document management policy;

1.8 BATCo litigation at the time of the creation of the document management policy;

1.9 Brown & Williamson litigation at the time of the creation of the document management policy;

1.10 BAT litigation at the time of the creation of the document management policy;

1.11 Purpose of the creation of the document management policy;

1.12 Individuals who were aware of the creation of the document management policy;

1.13 Individuals who were aware of the purpose of the document management policy;

2. The implementation of the document management policy:

2.1 Time of implementing the document management policy;

2.2 BAT entities that implemented the document management policy;

2.3 Individuals with responsibility for implementing the document management policy;

2.4 Effect of implementing the document management policy upon litigation;

2.5 Effect of implementing the document management policy upon prospective litigation;

2.6 Effect of implementing the document management policy upon record keeping at BATCo;

2.7 Effect of implementing the document management policy upon record keeping at Brown & Williamson;

2.8 Effect of implementing the document management policy upon record keeping at BAT;

2.9 Effect of implementing the document management policy upon the dissemination to the public of smoking and health related scientific reports;

2.10 Effect of implementing the document management policy upon the dissemination to the public of youth marketing information;

2.11 Effect of implementing the document management policy upon the dissemination to the public of information about the health effect of ‘low tar’ cigarettes;

2.12 Effect of implementing the document management policy upon the dissemination to the public of information on addiction;

2.13 What documents were destroyed;

2.14 Information contained in documents that were destroyed;

2.15 Ownership of destroyed documents;

2.16 Authors of destroyed documents;

2.17 Nature of destroyed documents;

2.18 Representations made in destroyed documents;

3. Rules and procedures set forth by document management policy

3.1 Documents subject to the document management policy;

3.2 Selection of documents to be destroyed;

3.3 Selection of documents to be saved;

3.4 Destruction of original documents;

3.5 Destruction of copies of documents;

3.6 Creation of a database or databases for sensitive documents;

3.7 Status of databases for sensitive documents;

3.8 Individuals’ access to sensitive documents;

3.9 BATCo’s access to sensitive documents;

3.10 Brown & Williamson’s access to sensitive documents;

3.11 BAT’s access to sensitive documents;

3.12 Changes to the document management policy;

3.13 Effect on BATCo;

3.14 Effect on Brown & Williamson;

3.15 Effect on BAT;

3.16 Treatment of subject matter under the document management policy;

16.1 Smoking and health;

16.2 Addiction;

16.3 Youth marketing;

16.4 Low tar;

4. Destruction of smoking and health documents that pertain to BATCo and Brown & Williamson’s litigation position in the United States;

4.1 Document destroyed in the U.K.;

4.2 Documents destroyed in the United States;

4.3 Documents destroyed in Australia;

4.4 Documents destroyed elsewhere;

5. Transportation, routing, storage, and warehousing of documents;

5.1 International warehousing of documents at law firms or in certain jurisdictions to shield document from discovery;

5.2 Creation, maintenance, and destruction of document databases or other electronic records;”

Mr Cannar’s Application

9 In the proceedings before Bell J, Mr Cannar sought to have the orders made by James J set aside. Her Honour refused to do so. In a separate judgment her Honour rejected the tender of certain evidence.

10 The Claimant seeks leave to appeal. However, there was a difference between the Claimant and the Opponent about the basis on which such leave was required. The Opponent asserted that the matter was interlocutory. The Claimant asserted that the matter involved a final order, but by reason of the fact that a civil right that was not capable of quantification was involved, leave was required because the amount involved could not be quantified as greater than $100,000. (See Supreme Court Act 1970 s101(2).) Mr S Gageler SC, who appeared for Mr Cannar, referred to Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 205. The Claimant invited the Court not to follow Clyne, but did not suggest that the case was distinguishable in any way.

11 The proposed grounds of appeal are:

“1. Her Honour erred in failing to find that the testimony sought in the Letter of Request was:

(a) not confined to evidence admissible and to be admitted at trial; and

(b) incapable of being so confined by reading down or severance.

Evidence on Commission Act

(a) in holding that it was sufficient to enliven the jurisdiction of the Court that the testimony sought be for use or possible use at trial;

(b) in failing to hold that it was necessary to enliven the jurisdiction of the Court that the testimony sought be confined in whole, or alternatively in dominant part, to evidence admissible and to be admitted at trial; and

(c) in failing to find that the testimony sought in the Letter of Request was not so confined.

(a) in failing to hold that s 33(1), alone or in combination with s 33(4), confines the scope of the order that can be made to one for obtaining evidence that is admissible and to be admitted at trial; and

(b) in failing to find that the order made by Justice James was not so confined.

4. Her Honour erred in the exercise of her discretion to exclude the affidavit of Mr. Kieve sworn 5 June 2003.

5. Her Honour erred in failing to exercise her discretion under s 33 of the Act to set aside the order made by Justice James on the ground that it is oppressive by reason of:

(a) the breadth and uncertainty of the testimony sought;

(b) the subject-matter of the testimony sought being conduct on the part of the appellant which, if proved, would constitute serious civil and criminal wrongs and expose the appellant to the real prospect of facing criminal, civil and disciplinary proceedings;

(c) the potential for public disclosure of the testimony before trial; and

(d) having regard to the evidence contained in the affidavit of Mr. Kieve sworn 5 June 2003, the circumstance that the appellant had been by ex parte order of United States Court in substance deprived of the right conferred by s 34(1) of the Act to assert the privilege against self-incrimination under the Fifth Amendment to the United States Constitution.”

12 For the reasons below, in my opinion leave to appeal on Grounds 4 and 5 should be refused. Leave to appeal on Grounds 1, 2 and 3 should be granted.

13 The nature of the lis between the parties is whether an ex parte order requiring Mr Cannar to attend for examination should be set aside. The Court was not provided with any definitive estimate of how long the examination was likely to take. However, in view of the scope and range of the issues raised in the United States proceedings and the significant role Mr Cannar played in the activities of BATCo, it is unlikely to be short. If there is an arguable basis for challenging the jurisdiction or power of this Court to make the order, then it is not desirable that any such challenge be left until the examination has been completed. Whether or not an order which requires Mr Cannar to attend should be made raises an issue of substance affecting his civil rights.

14 I reject the Opponent’s contention that an order of this character involves only a matter of practice and procedure. That may well be true with respect to the issue of a subpoena for attendance in court to give evidence in an Australian proceeding. It is not in my opinion, an accurate characterisation of proceedings which are directed only to the question of the taking of evidence and its subsequent transmission to a foreign court, under the Act. The Supreme Court of New South Wales must determine whether it is satisfied of the matters set out in s32 and, if so, whether an order should be made under s33 of the Act. I would not classify the order as interlocutory, but leave is in any event required under s101(2)(r) of the Supreme Court Act. On either basis, the matter is sufficiently final in the sense of having, of itself, a significant impact on Mr Cannar’s civil rights, that leave should be granted on Grounds 1-3.

The Statutory Provisions

15 The Claimant, Mr Cannar, challenges the jurisdiction, or alternatively the power, of the Court to make the order that he attend for examination. The principal basis for this challenge is the use of the word “evidence” in s32 of the Act (with respect to jurisdiction) and in s33 of the Act (with respect to power). These sections provide:

“32(1) The following provisions of this Part apply if an application is made to the Supreme Court for an order for evidence to be obtained in the State and the Court is satisfied:

(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal exercising jurisdiction in a place outside the State, and

(b) that the evidence to which the application relates is to be obtained or the purposes of proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated.

(2) This Part does not apply in respect of proceedings relating to the commission of an offence unless the requesting court is a court of a place in Australia or of New Zealand.

33(1) The Supreme Court has power, if an application is made under section 32, by order to make such provision for obtaining evidence in the State as may appear to the Court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made.

(2) An order under this section may require a specified person to take such steps as the Court may consider appropriate for that purpose.

(3) Without limiting the generality of subsections (1) and (2), an order under this section may, in particular, make provision as follows:

(a) for the examination of witnesses, either orally or in writing,

(b) for the production of documents,

(c) for the inspection, photographing, preservation, custody or detention of any property,

(d) for the taking of samples of any property and the carrying out of any experiments on or with any property,

(e) for the medical examination of any person,

(f) without limiting paragraph (e), for the taking and testing of samples of blood from any person.

(4) An order under this section is not to require any particular steps to be taken unless they are steps that can be required to be taken by way of obtaining evidence for the purposes of proceedings in the Supreme Court (whether or not proceedings of the same description as those to which the application for the order relates).

(5) Subsection (4) does not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath if this is asked for by the requesting court.

(6) An order under this section must not require a person:

(a) to state what documents relevant to the proceedings to which the application or the order relates are or have been in the person’s possession, custody or power, or

(b) to produce any documents other than particular documents specified in the order and appearing to the court making the order to be, or likely to be, in the person’s possession, custody or power.

(7) A person who, because of an order under this section, is required to attend at any place is entitled to similar conduct money and payment for expenses and loss of time on attendance as is a witness in proceedings before the Supreme Court.”

16 Sections 32 and 33 are found in Pt 4 of the Act which is entitled “Taking of evidence for foreign and Australian Courts”. This Part of the Act enacts as a law of New South Wales the provisions of The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters 847 UNTS 231. Indeed, as will appear, the implementation of this scheme on a uniform basis by almost all Australian States and Territories was a requirement for Australian signature of the Convention. Part 4 of the Act represents in New South Wales the culmination of a process of Commonwealth-State consultation on treaties.

17 The Convention was given the force of law in Australia by the mechanism of translating the treaty provisions into domestic law. Implementation was done by State legislation, as has occurred in the case of other treaties, e.g. the United Nations Convention on Contracts for the International Sale of Goods (1980) 1489 UNTS 3. There is no equivalent Commonwealth legislation. Save in South Australia which has adopted a similar scheme in different terms, all other States and Territories have, with minor variations, adopted a scheme in identical language to that found in Pt 4 of the Act. (See Pt 1, Div 1C of the Evidence Act 1958 (Vic); Div 3 of Pt 3 of the Evidence Act 1977 (Qld); ss115-118A of the Evidence Act 1906 (WA); Evidence on Commission Act 2001 (Tas); Pt 12B of the Evidence Act 1971 (ACT); Div 2 of Pt 6 of the Evidence Act 1939 (NT) and cf s59F of the Evidence Act 1929 (SA).)

18 Part 4 of the Act was originally introduced in New South Wales as Pts 7-9 of the Evidence Act 1898, by the Evidence (Evidence on Commission) Amendment Act 1988. Prior to that time the New South Wales provisions for the conduct of examinations following receipt of Letters of Request was found in the Foreign Tribunals Evidence Act 1856 19 and 20 Vic c113, as enacted by the UK Parliament, for the application of which provision was made in Pt 58 of the Supreme Court Rules 1970.

19 In the course of the Second Reading Speech for the Evidence (Evidence on Commission) Amendment Bill, the then Attorney General, Mr Dowd, said (New South Wales, Parliamentary Debates, Legislative Assembly, 30 August 1988, 784):

“The bill is based on model uniform legislation agreed to by the Standing Committee of Attorneys-General. Adoption of the model legislation by all jurisdictions will facilitate the Commonwealth’s ratification of the Hague convention on the taking of evidence abroad. The taking of evidence on commission is a procedure which allows testimony to be taken on oath in another jurisdiction, with the questions and answers being recorded in writing. The record of the testimony is then transmitted to the court in which the trial is being held and can be admitted in evidence.”

“Part 9, being proposed sections 77 to 82, provides machinery for the examination of witnesses in the State for the purpose of proceedings outside the State. The part is modelled on provisions proposed by the Commonwealth Secretariat, for adoption in Commonwealth jurisdictions, in connection with the Hague convention on the taking of evidence abroad. The Hague convention provides a procedure for the taking of evidence on commission in civil matters. The existing provisions of the Supreme Court rules which allow for the taking of evidence abroad or for the taking of evidence on commission for use in another country are insufficient to enable full compliance with the convention. Adoption of the model legislation by all States is a necessary prerequisite to allow the Commonwealth to accede to the Hague Convention. …

Proposed section 79 of the bill empowers the Supreme Court to make orders pursuant to an application by a court or tribunal outside the State for the taking of evidence for use in proceedings before the requesting court. The taking of evidence includes: examination of witnesses, production of documents, inspection of property, taking of samples, medical examinations, blood testing, and generally any order in accordance with the powers of the Supreme Court to make an order in its own proceedings. Proposed section 80 preserves the privileges that a witness has in relation to the giving of evidence, whether the privilege is one arising in similar proceedings in the State or in the place where the requesting court exercises jurisdiction.”

20 With minor verbal differences, the legislation now found in Pt 4 of the Act, which had its origins in the process identified by the Attorney, has followed the terminology of the legislation in the United Kingdom, the Evidence (Proceedings in Other Jurisdictions) Act 1975 (UK) (“the 1975 Act”). That Act was used as a model by the Commonwealth Secretariat and, again with minor variations, the draft legislation propounded by the Commonwealth Secretariat was adopted by the Standing Committee of Attorneys-General as uniform legislation in Australia. (See David McClean and Campbell McLachlan, The Hague Convention on the Taking of Evidence Abroad: Explanatory Documentation Prepared for Commonwealth Jurisdictions (1985) Commonwealth Secretariat, London esp 22-26.) All of the crucial words upon which the Claimant relies in the present case – particularly each of the references to “evidence” – are to be found in the UK Act, the Commonwealth Secretariat report and the uniform Australian scheme.

21 The authors of the Commonwealth Secretariat Report state that the word “evidence” is not a defined term in the Hague Convention, but refer to Article 3(e), (f) and (g) as “some guide to the meaning of ‘obtain evidence’”. Those paragraphs of Article 3 of the Convention are:

“Article 3

A Letter of Request shall specify -

(e) the names and addresses of the persons to be examined;

(f) the questions to be put to the persons to be examined or a statement of the subject matter about which they are to be examined;

(g) the documents or other property, real or personal, to be inspected.”

22 The authors of the Commonwealth Secretariat report go on to refer to the basic English authorities including Radio Corporation of America v Rauland Corporation [1956] 1 QB 618, decided under the previous legislation, and Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547, decided under the 1975 Act, as authority for the proposition that the cases “distinguished between the obtaining of evidence for use in a trial and the obtaining of evidence which might lead to the procurement of evidence”. (McClean and McLachlan at 4)

23 The importance of this distinction is emphasised by Article 23 of the Convention which states:

“A Contracting State may at the time of signature, ratification or accession, declare that it will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in common law countries.”

24 Article 23 makes a clear distinction between evidence and discovery. That is so for two reasons. Discovery by parties is not a procedure known in civil law countries at all. Indeed, in the parallel French text of the Hague Convention, the words “pre-trial discovery of documents” appear in Article 23 in English. The text refers to “une procédure connue dans les Etats du Common Law sous le nom de ‘pre-trial discovery of documents’.”

25 The second reason arises from the fact that Article 23, which was a text proposed at the Hague Conference by the United Kingdom, was directed in part to the wide ranging process of discovery, including compulsory questioning of non-parties, in United States civil procedure.

26 As one author has put it:

“… the controversy over discovery is not one pitting the common law against the civil law, but rather one pitting the United States of America against the rest of the world. England, for instance, including both the courts and Parliament, has been in the forefront of resistance to American-style discovery, which is in many ways quite different from discovery in England.”

International Litigation and the Quest for Reasonableness: Essays in Private International Law

Essays in International Litigation and the Conflict of Laws

Syracuse Journal of International Law and Commerce

27 Both the text of Article 23 and subsequent legislation, including s33(6) of the Act, refer only to “documents”. However, as has been pointed out, there is no logical basis for distinguishing between document discovery and oral examination before trial. (Lowenfeld at 183.) Similar observations appear in the authorities. (See Radio Corporation of America v Rauland Corporation [1956] 1 QB 618 at 645; Re Norway’s Application (No 2) [1990] 1 AC 723 at 781.)

28 The report of the Commonwealth Secretariat upon which the Australian uniform legislation is based confirms the origins of Article 23 in the difficulty posed by the width of American discovery practice. (McClean and McLachlan at 12-13.)

29 A number of features of the legislative scheme of significance for the present case arise in the text of the Convention.

30 First, the word “evidence” is found in the very title of the Convention and in Article 1 which states:

evidence

31 Furthermore, Article 1 goes on to say:

or contemplated

32 The words “or contemplated” are of significance. The Convention envisages that proceedings may not have actually been instituted at the time of the Letter of Request. This aspect of the Convention is reflected in s32(1)(b) of the Act, as quoted above, which requires the Supreme Court of New South Wales to be satisfied that the “evidence” is to be used for purposes of proceedings “which either have been instituted … or whose institution … is contemplated”.

33 One commentator has characterised the use of the word “evidence” in the Convention as a reference to “material to prove or disprove facts in issue” and distinguishes such from “material which may lead to the discovery of evidence”. (See Lawrence Collins, Essays in International Litigation and the Conflict of Laws, e.g. at 295 and 304.) The reference to facts being “in issue” may need to be qualified by reason of the reference in the Convention to proceedings that were merely “contemplated”. Otherwise this distinction is well made.

34 The distinction is based to a substantial extent on the English authorities including Radio Corporation of America esp at 643-644, where the relevant terminology was “testimony”. The distinction was adopted in Australia by Clarke J in Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327 at 330. This distinction has been applied by the House of Lords, in Rio Tinto v Westinghouse, to the Hague Convention as adopted in the 1975 Act, see e.g. at 634. (See also State of Minnesota v Philip Morris Inc & Ors (Unreported, EWCA (Civ), Lord Woolf MR, Peter Gibson and Otton LJJ, 30 July 1997, esp at 18, 20-21.)

35 Collins concludes at 309:

“… the Hague Evidence Convention was intended primarily to apply to ‘evidence’ in the sense of material required to prove or disprove allegations at trial. It was not intended to apply to discovery in the sense of the search for material which might lead to the discovery of admissible evidence.”

36 David McClean, the co-author of the Commonwealth Secretariat Report upon which the Australian legislation is based, has subsequently commented on the word “evidence” in the Convention in terms repeating the language of that report, but going further:

“No definition of this term is given, but some guide to the meaning of ‘obtain evidence’ is given in article 3(e), (f) and (g) which refer to witnesses, questions to be asked, and documents or property to be inspected. The preliminary draft of article 1 did in fact contain, in the English text only, an explanatory gloss to the word ‘evidence’ as ‘including the taking of statements of witnesses, parties or experts and the production or examination of documents or other objects or property’; its eventual omission was for reasons of style rather than of substance.”

International Co-operation in Civil and Criminal Matters

37 The Australian Declaration under Article 23 of the Convention stated: “Pursuant to Article 23, Australia will not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law Countries”. The British Declaration was somewhat more fulsome. It indicated that the Letters of Request which the United Kingdom would not execute would extend to such Requests which require a person:

“(a) to state what documents relevant to the proceedings to which the Letter of Request relates are, or have been, in his possession, custody or power; or

(b) to produce any documents other than particular documents specified in the Letter of Request as being documents appearing to the requested court to be, or to be likely to be, in his possession, custody or power.”

International Co-operation in Civil and Criminal Matters

38 It was the more elaborate British reservation, which, in implementation of the proposals contained in the report of the Commonwealth Secretariat, found its way in express terms into s33(6) of the Act. That section is directed to the “order” which the court would make, namely an order for evidence to be obtained under s32(1) and s33(1).

39 The history of s33(6) in the Convention provision for declarations relating to “pre-trial discovery” indicates that that subsection is concerned with pre-trial discovery as understood at common law. The terminology of “possession, custody or power” is a paraphrase of the test for pre-trial discovery. The combined effect of pars (a) and (b) of s33(6) is that an order for production of documents, for which s33(3)(b) makes express provision, is to be limited to “particular documents specified in the order”.

40 The authorities suggest that the approach expressly required with respect to documents applies to interrogatories and oral examination by force of s33(4) which provides that an order cannot require “steps” be taken unless they are “steps” that can be required in local proceedings “by way of obtaining evidence”. For present purposes I am content to proceed on that basis. What is proposed in the present case is an oral examination. That “step” would not, on the basis I have assumed, extend to obtaining information, as distinct from obtaining evidence for use at trial. (See First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154 at 1164. See also the judgment of Burnton J in Gredd v Arpad Busson [2003] EWHC 3001 at [27] points (3) and (4), quoted below.)

41 The history of the Australian scheme indicates that the British case law should generally be followed in Australia. The general principle that an international treaty of this character should be interpreted, where possible, in an internationally uniform way (see Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad (1999) 196 CLR 161 at [38], [138]) is reinforced in Australia by the adoption, in terms, of the 1975 English statute which had already been construed in Rio Tinto v Westinghouse.

42 Burnton J, in Gredd v Arpad Busson [2003] EWHC 3001 at [27], has summarised the English law in a manner that, in my opinion, should be adopted in Australia:

“(1) Comity requires this court to view a letter of request issued by a foreign court for the purpose of civil proceedings before it benevolently. It is our pleasure and duty to assist those courts and the parties to them in arriving at a fair and just determination of their civil litigation where we can properly do so.

(2) Nonetheless when an application for an order under the Act is disputed, the High Court must determine whether the order sought is one which it can or should properly make.

(3) The issue whether the order sought is for an illegitimate investigation rather than to obtain evidence to be adduced at trial is to be determined principally by reference to the terms of the letter of request and of the proposed order of this court. However, the court will consider the evidence before it as a whole.

(4) Particularly pertinent will be the stage at which the order is sought and the extent to which the party seeking the order is able to demonstrate that the information sought is relevant to issues in the foreign proceedings in the sense of being capable of being adduced at trial in support of those issues.

(5) The fact that testimony is sought as part of the discovery process in the United States proceedings is not of itself decisive. The fact that it is sought at the discovery stage is an indication that what is sought is discovery. However, the High Court has power to make an order for such testimony to be taken if it is limited to evidence to be adduced at trial. The court has a discretion to refuse to make an order at that stage even for such evidence to be taken on the grounds that it is premature, for example, and that the deposition of the proposed witness will be more efficiently and shortly taken, involving less inconvenience or intrusion into matters confidential to him or to other third parties, if it is taken at a later stage.

(6) Statements in a letter of request to the effect that evidence is sought for use at trial are relevant but not conclusive. The letter of request must be viewed as a whole.

(7) This court will take into account anything in the evidence before it that indicates that the party that obtained the order for the letter of request appreciated and took into account the differences between United States and English procedural rules.

(8) Similarly, the court will take into account evidence that the US judge appreciated and took into account those differences. In this connection, this court appreciates that orders for the issue of letters of request are normally made by the US judge without any real scrutiny. The order is normally made in the terms sought by the applicant without any (or any significant) amendment and without the judge being informed of the significant differences between US federal procedure and those of these courts.

(9) The fact that the evidence sought is described in wide or general terms is not inconsistent with its being sought for the trial. There will be occasions where the subject matter of the testimony sought is so extensive as to preclude specification. However, where that is the case, the court in the exercise of its discretion may refuse to make an order on the basis that it would be oppressive to the witness to require him to prepare himself to give evidence and to require him to give evidence without identification of the matters to be addressed. See State of Minnesota v. Philip Morris Incorporated & Ors., a decision of the Court of Appeal of 30th July 1997.

Westinghouse case [1978] AC 547

(11) Generally an order may be refused or set aside on the grounds that would lead this court to set aside a witness summons – oppression being one of those grounds.

(12) This court will not in general seek to determine whether evidence sought here will be admissible under the law of the foreign court. However, doubts as to admissibility may be taken into account. Issues of relevance will be addressed by this court, notwithstanding that relevance and admissibility may raise identical issues. An example of an enquiry into relevance by the English court is to be found at para.14 of the judgment of the Court of Appeal in the Genira Trade & Finance case and at p.1165 of the judgment the Vice-Chancellor in First American, in which he said:

‘In my opinion, therefore, an English court must look at the issue of the relevance of the requested testimony, if it is raised, in broad terms, leaving to the foreign court, in all but the clearest cases, the decision as to whether particular answers, or answers on particular topics, would constitute relevant admissible evidence.’

section 2(4)(a)

(14) Similar principles must apply where what is sought is a deposition without any written documents. The person conducting the examination of the witness, the witness himself, those representing him and those representing the parties to the foreign litigation must be able to ascertain the limits of proper questioning of the witness from the terms of the order itself.”

The Challenge to Jurisdiction and Power

43 Mr S Gageler SC made separate submissions on jurisdiction under s32 and power under s33. Although the submissions were separate, in substance, the points arising under each heading were similar. Mr Gageler submitted that the Letter of Request sought an examination of a character which went beyond obtaining “evidence” within the meaning of that word in both s32(1) and in s33(1).

44 The Claimant’s submissions in this respect were, essentially, twofold. First he submitted that the “evidence” to be taken was, or at least was not shown not to be, for the purposes of pre-trial discovery in accordance with United States practice which permits examination of witnesses at the discovery stage. Secondly, in part related to the first proposition, the Claimant submitted that in order to be “evidence” within the meaning of either s32 or s33, the process of collection had to be characterised as the obtaining of material that was admissible in and actually to be admitted in proceedings before the requesting court. The mere possibility of admission was not sufficient. The words “for the purposes of” in s32(1)(b) should be read as if they said “as the evidence in”. Similar effect should be given to the words “for obtaining evidence” in s33(1).

45 The Opponent did not submit that the Act would enable evidence to be obtained by way of pre-trial discovery in the manner permitted in the United States. As noted above in my consideration of the history of the legislative scheme, this was an important aspect of the reservation permitted by Article 23 of the Hague Convention, a reservation which was adopted in Australia and reflected in the express terms of s33(6). The 1975 English Act upon which our Act is based had already been construed in the Rio Tinto v Westinghouse litigation to exclude such use of the Letter of Request procedure. It was against this background that the identical terminology of the English Act was adopted for purposes of the Australian uniform scheme in 1988. Further, as noted above, the English authorities suggest that the same principle must apply to discovery by way of interrogatories and oral examination, presumably by force of s33(4).

The Factual Issue

46 Before Bell J, this aspect of the Claimant’s submissions failed on the facts. Her Honour expressly found that “the Letter of Request seeks that evidence be obtained for the purposes of the US proceedings” (par [168]). In this finding her Honour applied the precise terminology to the matter about which she had to be “satisfied” by s32(1)(b). She referred to a range of facts upon which she based the conclusion, including the terms of the Letter of Request, the report of a Special Master and a Memorandum Opinion by the judge in the US proceedings. Her Honour also referred to a letter written by the Opponent in which she gave an undertaking that Mr Cannar’s evidence would not be used for any purpose “until the transcript of testimony is tendered into evidence at the trial in the US proceedings”. (Blue AB Vol 8, 1827, emphasis added.) Her Honour said she gave weight to this letter:

“For the purpose of deciding whether I am satisfied that the letter of request seeks an order for evidence to be obtained for the purposes of the US proceedings, and that it does not require steps to be taken by way of obtaining evidence for the purposes of the proceeding that are not steps that may be required to be taken for the purposes of proceedings in this Court.” (at [168])

47 Her Honour was plainly right to so decide. No other conclusion of fact was reasonably open on the evidence before the Court. That evidence was overwhelming. It encompassed each of the propositions enunciated by Burnton J in Gredd v Arpad Busson in points (3)-(8) quoted in par [42] above.

48 The Letter of Request stated as its final recital:

to provide certain evidence relating to those matters.

49 After setting out the allegations contained in the United States proceeding which relate to the conduct of Mr Cannar, the Letter of Request concluded in its operative paragraph as follows:

for the purpose of the giving of his evidence in the proceedings

50 The terms of the request are, in my opinion, quite unambiguous relating, as they do, to the giving of “his evidence in the proceedings”.

51 The terms of a Letter of Request are not conclusive. Different views have been expressed as to the weight to be given to those terms. Such differences are unlikely to be of practical significance as all the cases indicate that it is appropriate for the Court to look behind the request to ascertain the actual purpose for which the evidence is required. (See Rio Tinto v Westinghouse per Lord Wilberforce at 610, Viscount Dilhorne at 624, Lord Diplock at 634 and Lord Fraser at 643; Application of Forsyth at 333 per Clarke J; First American Corporation v Sheikh Zayed Al-Nahyan at 1166 per Sir Richard Scott VC; Gredd v Arpad Busson, quoted at [42] above, points (3), (6), (7) and (8).)

52 In the present case, the background documentation strongly supports the conclusion suggested by the terms of the request itself.

53 Prior to granting the motion for the issue of a Letter of Request, Judge Kessler handed down a Memorandum Opinion, in which she referred to her adoption of the relevant recommendations of a Special Master appointed for the purpose by the Court. In this Memorandum Opinion Judge Kessler expressly stated: “[T]he letter of request seeks trial testimony.” (Blue AB Vol 2, 429H)

54 The submissions made to the US District Court by the Opponent made the position quite clear. Those submissions were, in substance, accepted by the Special Master and Judge Kessler, albeit noting that, ultimately, determination of what evidence would be permitted to be taken in New South Wales was a matter for this Court. In its supporting documentation for the issue of the Letter of Request, the Opponent stated:

to obtain evidence

for use at trial,

it does not seek Mr. Cannar’s deposition as evidence in the nature of pre-trial discovery, but rather as evidence in the nature of proof to be used at trial.

The United States has carefully crafted the proposed Letter of Request to address specific issues for trial.

the information

is

precisely targeted to obtain testimony

for use at trial

55 BATCo, in its submissions to the Special Master in reply to these submissions, sought to characterise the application as, in substance, an application for pre-trial discovery after the time for such discovery had passed in accordance with the orders of the Court that had been in force. That this was so is itself an indication that the purpose of the evidence was for trial, as Burnton J recognised in Gredd v Arpad Busson, quoted in par [42] above, points (4)-(5).

56 The Plaintiff in the United States proceeding, the Opponent in the present proceedings, replied:

“BATCo fails to appreciate the fundamental difference between the nature of discovery in Australia and the United States, specifically, that Australian law parallels England’s prohibition on the taking of oral testimony as part of discovery. Had the United States’ Letter of Request sought discovery, the Letter of Request would not be given effect in Australia. This is hardly a semantic distinction, but a core concept in the taking of evidence overseas.” (Blue AB Vol 2, 496)

57 The reply submission went on, under the heading: “The testimony sought through the Letter of Request is not discovery”, to outline the Australian legal position and concluded:

testimony for trial

Such testimony is not intended to be

indeed, cannot be under Australian law, discovery

58 The Special Master’s report included the following express references to the purpose of the examination of Mr Cannar:

· “Plaintiff argues that the Hague Convention … dictates that a Letter of Request is the appropriate vehicle for obtaining evidence from each of these deponents in the nature of proof to be used at trial.” (Blue AB Vol 2, 435O-R) [Emphasis added]

· “BATCo opposes each of Plaintiffs’ Motions, arguing that the Motions are an untimely request for fact discovery, made on the eve of the close of fact witness discovery … Essentially, BATCo argues, Plaintiff is seeking fact witness discovery past the cutoff date for such discovery.” (Blue AB Vol 2, 436C and R)

· “In its Reply, Plaintiff contends that both English and Australian law recognise the distinction between discovery and the request to seek testimony for trial … Because Plaintiff ‘has no power to compel the appearance of [the proposed deponents] at trial … [its] sole opportunity to procure … testimony for trial is under Letter of Request.” (Blue AB Vol 2, 438O-H) [Emphasis added]

59 In his report the Special Master noted:

· “BATCo’s argument rests on the fact that Plaintiff has delayed in seeking discovery, and because of that delay Plaintiff should not be permitted to take the testimony it seeks. Plaintiff counters this argument by asserting that it seeks to preserve testimony for trial and is not attempting to take a deposition for factual, pre-trial discovery.” (Blue AB Vol 2, 441R-442C)

60 He also said:

“The Special Master disagrees with BATCo’s assertions relating to the timing of Plaintiff’s Motions. In fact, one commentator has noted that in drafting a Letter of Request, “the drafter should clearly state that the evidence sought in the letter of request is intended for use at trial in the underlying case … One way to convince the foreign court that the testimony is not for discovery purposes is for the requesting court to note ‘that the discovery cut-off date in the underlying case is passed’ … Therefore, it does not appear that Plaintiff’s Motions are untimely and, in fact, arguably are timed appropriately from the perspective of the enforcing court.” (Blue AB Vol 2, 442D-N)

61 Mr Gageler SC made reference to a number of cases in which express undertakings had been made by counsel appearing in British courts with respect to the use to be made of the evidence, to the effect that it would be used at trial. He sought to draw an invidious comparison between those undertakings and what was said to be the absence of an equivalent undertaking in the present case. These authorities are not relevant to the factual issue that had to be determined by her Honour.

62 The terms of the Letter of Request are, in my opinion, unambiguous. The background documentation indicates clearly that the United States Court was well aware of the Australian legal position and framed its Letter of Request accordingly. There is no evidentiary basis for the submission that the evidence was sought for an impermissible purpose. Her Honour’s conclusion to the contrary was correct.

63 In any event, the issue was put beyond doubt by Order 5(A) of this Court which required the Opponent not to “make any use of the transcript or any video recording of the evidence of Nicholas Cannar other than to tender the same at trial”.

The Construction Issue

64 The second way in which the Claimant put the case in this regard was based on a proposition that the word “evidence” meant testimony which was both admissible in the foreign proceedings and was actually to be admitted in those proceedings.

65 The first thing to say about this submission was that there was no basis for any conclusion other than that the questions to be asked would be both admissible and admitted in the proceedings. It may be, as often happens, that one party would not seek to tender the whole of the evidence. In that case it would be available to be tendered by another party. That appears to be contemplated in Golden Eagle Refinery Co v Associated International Insurance Co (unreported, EWCA (Civ), Hirst and Buxton LJJ, Sir John Knox, 19 February 1998 at 17). In that case the evidence was available to be tendered by the other party because the orders provided for the testimony, once taken, to be transmitted to the requesting Californian court. In this case, it will be available to be tendered because of the operation of Order 5(B).

66 In any event, I am of the view that the construction for which the Claimant contended is not the correct interpretation of the word “evidence” where appearing in s32 and s33 of the Act.

67 The Act implements the Convention and adopts it as Australian law. In doing so it uses words that appear in the Convention. There is a presumption that when an Australian Parliament uses words from a treaty, that it intends those words to bear the meaning they have in the treaty. That process may invoke reference to the Vienna Convention on the Law of Treaties (1969) 1155 UNTS 311 and requires the context, object and purpose of the treaty to be taken into account. (See Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 esp at 240, 252-254, 277, 294; Morrison v Peacock (2000) 50 NSWLR 178 at [12]-[20]; Morrison v Peacock (2002) 210 CLR 274 at [15]-[16].)

68 Article 1 of the Hague Convention provides for Letter of Request and states:

“A Letter shall not be used to obtain evidence which is not intended for use in judicial proceedings, commenced or contemplated”.

69 The terminology of “use”, is not as confined as the Claimant’s contention that the evidence must actually be admitted in the foreign proceedings.

70 The Act, like the Hague Convention, which it implements and adopts as a matter of Australian law, is intended to apply to a wide range of nations with quite different practices with respect to the gathering and admissibility of evidence. It would unduly lengthen the course of proceedings in Australia if it was necessary to prove the foreign law of evidence as a fact with respect to the admissibility of the question and answer in the foreign jurisdiction. This is meant to be a practical scheme of international co-operation.

71 Considerations of relevance no doubt arise in all systems and can be expected to be determined in a generally similar manner in different kinds of legal systems. It is not, however, desirable that the proceedings in Australia should determine actual relevance or admissibility in the particular proceedings in the requesting State. A general determination of apparent relevance is all that is required.

72 As Lord Keith said in Rio Tinto v Westinghouse at 654:

“In the face of a statement in letters rogatory that a certain person is a necessary witness for the applicant, I am of opinion that the court of request should not be astute to examine the issues in the action and the circumstances of the case with excessive particularity for the purpose of determining in advance whether the evidence of that person will be relevant and admissible. That is essentially a matter for the requesting court.”

Genira Trade & Finance Inc v CS First Boston and Standard Bank (London) Limited

73 To the same effect are the observations of Sir Richard Scott VC in First American Corporation v Sheikh Zayed Al-Nahyan at 1165:

“The question as to what evidence would, and what evidence would not, be relevant to an issue in the foreign action is primarily a matter for the foreign court …

In my opinion, therefore, an English court must look at the issue of relevance of the requested testimony, if it is raised, in broad terms, leaving to the foreign court, in all but the clearest cases, the decision as to whether particular answers, or answers on particular topics, would constitute relevant admissible evidence.”

Gredd v Arpad Busson

74 Furthermore, the exclusionary rules of evidence, particularly in common law jurisdictions, are of great significance and vary considerably from one such jurisdiction to another. Some such rules involve discretionary considerations which give rise to factual issues that require evidence that may not be available in Australia. It is not practical that such issues should be resolved here. The scheme of international co-operation would be undermined by the need to determine factual issues which are best determined by the court of the requesting State.

75 Similar considerations apply to the taking of evidence under Pt 4 of the Act for other Australian courts. When implementing the Hague Convention the uniform scheme used in Australia adopted the same terminology for the scheme applicable between Australian courts and with those of New Zealand. Indeed, the scheme goes further in this respect as s32(2) enables such Letters of Request made by an Australian or New Zealand court to extend to criminal proceedings. In such cases differences about principles of admissibility and exclusion may not be as wide ranging as they are with respect to foreign jurisdictions. Nevertheless, they do exist, notably in Australia between those States that have adopted the Evidence Act and those which have not. Again it seems to be desirable that questions of admissibility be left to the jurisdiction in which the proceedings are conducted.

76 A further reason for rejecting the construction propounded by the Claimant is that it is contradicted by such textual indications as exist in the legislative scheme.

77 In s32(1)(b) the formulation of what it is that the court must be satisfied about is expressed in terms that “the evidence … is to be obtained for the purposes of proceedings”. The terminology of “purposes” is general and is not readily read down in the manner propounded by the Claimant, i.e. to be equivalent to “as the evidence in” the proceedings.

78 Furthermore, s32(1)(b) itself identifies as a possibility the obtaining of “evidence” not only for proceedings that have already been instituted, but also for proceedings “whose institution … is contemplated”. That terminology contradicts any suggestion that a trial with finally defined issues is imminent.

79 Part 2 of the Act makes provision for examination of witnesses abroad for purposes of a trial in New South Wales including, in s6(1)(c), provision for the issue of a Letter of Request to judicial authorities of a foreign country “to take the evidence of a person”. The word “evidence” is used in the same sense throughout the Act. However, with respect to a request by a New South Wales court to a foreign court, it is expressly contemplated that the “evidence” so garnered may not be used in evidence in New South Wales.

80 Section 12 provides relevantly:

“12(2) The court before which the proceeding takes place may … permit a party to the proceeding to tender as evidence in the proceeding:

(a) a person’s evidence taken in an examination held as a result of the order under section 6 …

(3) A person’s evidence so tendered is not admissible if:

(a) it appears to the court’s satisfaction at the hearing of the subsequent proceeding that the person is in Australia and is able to attend the hearing, or

(b) the evidence would not have been admissible had it been adduced at the hearing of the subsequent proceeding.”

81 The legislative scheme clearly regards the questions of admissibility of evidence taken in a foreign court, pursuant to a Letter of Request issued by a New South Wales court, as a matter for the New South Wales court. The use of the word “may” in s12(2) suggests that a discretion exists to admit the evidence. Furthermore, it is expressly provided that where a witness is in fact present in the jurisdiction at the relevant time, the evidence is not admissible. Finally, s12(3)(b) expressly contemplates that determination of admissibility is for the New South Wales court. The word “evidence” in s6(1)(c) is not used in the sense of evidence both admissible and to be admitted in a New South Wales court. There is no reason to believe that the word “evidence” is used in a different sense in s32 or s33.

82 This conclusion is reinforced by other textual indications. Paragraphs (c) (d) and (f) of s33(3) as set out above, contemplate an order under the section may be made for the “inspection … of property”, “the taking of samples of any property”, “the carrying out of any experiments on or with any property”, “the medical examination of any person” and “the taking and testing of samples of blood”. Whether or not any such inspection, sample, experiment or examination will lead to the obtaining of admissible evidence is not necessarily known at the time of the making of the order. Whether the evidence is admissible, and to be admitted, may very well depend on the results of an inspection, sample, experiment or examination. The force of this textual indication is somewhat weakened by the fact that Article 1 of the Hague Convention authorises a Letter of Request to encompass not only a request “to obtain evidence”, but also a request “to perform some other judicial act”.

83 In my opinion, the construction contended for by the Claimant is unsustainable. Accordingly, the order made by James J as amended did ‘give effect’ to the request within the meaning of s33(1). On this alternative basis, the appeal should be dismissed.

84 For the above reasons Grounds 1, 2 and 3 in the Notice of Appeal should be dismissed.

The Exercise of the Discretion by Bell J

[98] BATCo pointed to the production of exhibits ‘3’ to ‘7’ to the plaintiffs in the Minnesota proceedings as taking place only as the result of orders made by the Minnesota District Court and then only after it had exercised its rights of appeal. It was BATCo’s submission that the subsequent placement of the documents into the Minnesota Depository, where they are available for inspection by members of the public, was under compulsion of the orders made by Chief Judge Cohen.

Telstra v Australis Media

[100] In Mr Sullivan’s submission the substance of the evidence has been disclosed with the implied consent of BATCo. He relied on the terms of the consent judgment entered in the Minnesota proceedings. For its part BATCo emphasised that it was not a signatory to the settlement agreement and that exhibits ‘3’ to ‘7’ had only become available for inspection by the public as a result of Chief Judge Cohen’s orders.

[101] The proceedings were settled as against all the defendants including BATCo by the entry of the consent judgment. While BATCo was not a ‘settling defendant’ it seems to me that it must be taken to have consented to the proceeding against it being resolved by the entry of the consent judgment. The consent judgment made provision for the Minnesota Depository to be open to the public for a period of years and for the public to be given access to all non-privileged documents contained in it including those documents described in Part VII A. Significantly, the consent judgment contemplated that documents over which one or more of the defendants had claimed privilege, but which claim had not been upheld, might become available for inspection by the public should the plaintiffs make application within the period specified and the Minnesota District Court give its approval. Exhibits ‘3’ to ‘7’ to the letter of request were documents within this latter category.

[102] BATCo resisted the grant of approval to the public release of documents over which it had unsuccessfully claimed privilege in the Minnesota proceedings and it exhausted its rights of appeal in this respect. Nonetheless I considered that there was force to Mr Sullivan’s submission that having consented to the entry of judgment BATCo must be taken to have consented to a regime that made provision for documents over which it had unsuccessfully claimed privilege to become available for public inspection in the event that the Minnesota District Court granted its approval pursuant to cl VIIC of the consent judgment.

Evidence Act.”

150 Her Honour then turned to BATCo’s claim with respect to paragraphs in a judgment in the Supreme Court of Victoria, McCabe v British American Tobacco Services Ltd [2002] VSC 73, which disclose the contents of the Foyle Memorandum. That was Exhibit No 2. No appeal is brought from her Honour’s decision in that respect.

151 The Court of Appeal of the Supreme Court of Victoria has held that publication on the Internet, without consent, even in circumstances where documents were generally available, does not amount to a waiver of privilege at common law (see British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197).

152 In a joint judgment, Phillips, Batt and Buchanan JJA said at [192]:

“Despite the misfortune for the Defendant that the contents of some of these documents have now been published to the world at large by means of the internet and the international media, it should be declared, we think, that privilege in relation to such documents, if otherwise properly claimed, has not been waived either expressly or by implication …”

153 The position under the Evidence Act is not, of course, necessarily the same as the position at common law. Furthermore, it does not appear that the Victorian Court had the same detailed information that is now available to this Court as to the precise steps that occurred prior to the documents becoming publicly available in the United States, pursuant to orders of a Minnesota Court, before they were made generally available, including on the Internet.

The Statutory Scheme

154 The relevant statutory provisions in the Evidence Act 1995 are as follows:

“118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication made between the client and a lawyer; or

(b) a confidential communication made between 2 or more lawyers acting for the client; or

(c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer;

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential document (whether delivered or not) that was prepared;

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.”

155 Section 117 provides the following relevant definitions:

“’confidential communication’ means a communication made in such circumstances that, when it was made:

(a) the person who made it; or

(b) the person to whom it was made;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;

‘confidential document’ means a document prepared in such circumstances that, when it was prepared:

(a) the person who prepared it; or

(b) the person for whom it was prepared;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.”

156 Section 122 provides:

“122 Loss of client legal privilege: consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made:

(a) in the course of making a confidential communication or preparing a confidential document; or

(b) as a result of duress or deception; or

(c) under compulsion of law; or

(d) if the client or party is a body established by, or a person holding office under, an Australian law – to the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held.

(3) Subsection (2) does not apply to a disclosure by a person who was, at the time, an employee or agent of a client or party or of a lawyer unless the employee or agent was authorised to make the disclosure.

(4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than:

(a) a lawyer acting for the client or party; or

(b) if the client or party is a body established by, or a person holding an office under, an Australian law – the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held.

(5) Subsections (2) and (4) do not apply to:

(a) a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or

(b) a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to a proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

…”

157 Furthermore, s134 provides that evidence that must not be adduced is inadmissible.

158 In the present case, none of the elements contained in either s118 and s119 – neither the client, nor the lawyer, nor the confidential communication – have any nexus with Australia. This issue was recently discussed by Gyles J in Kennedy v Wallace [2004] FCA 332, where his Honour expressed the view that extending privilege to a communication with a foreign lawyer was not consistent with the rationale for legal professional privilege. I note, in this respect, that for the purposes of the Evidence Act, the word “lawyer” is defined in Schedule 1 of the Act to mean a barrister or solicitor.

159 Even if not entitled to privilege, such communications may, however, be entitled to protection in accordance with the general law on protection of confidence. It is arguable that this is the relevant body of law to apply to disclosure of confidential communications with a foreign lawyer. The incidents of such protection are not the same as those which attend a claim of privilege. However, it is not necessary to further consider this matter, as the Opponent placed no reliance upon this aspect of the case.

160 The principal issue raised by BATCo is that her Honour’s discretion miscarried because her Honour erred in applying s122(4), a subsection which has no application to a disclosure by BATCo. The relevant subsection was, BATCo submitted, s122(2) and BATCo had not lost the privilege as it had produced the documents by compulsion of law, within s122(2)(c). Alternatively, BATCo submitted, if s122(4) were applicable, disclosure had not occurred “with the express or implied consent” of BATCo. By Notice of Contention the Opponent seeks to uphold her Honour’s ruling on the basis that in the circumstances reliance on the privileged evidence did not involve its “disclosure” contrary to s118 or s119. As will become clear, the refusal of leave to appeal against her Honour’s conclusions in respect of the application of s122 means that there is no need to deal with the matter raised by way of Notice of Contention.

161 It is necessary to outline how Exhibits 3-7 became publicly available.

Prior Disclosure

162 The Attorney-General of Minnesota instituted proceedings against a number of tobacco companies, including BATCo, to recover costs incurred by the State in the provision of healthcare to persons suffering from smoking-related conditions. The proceedings were conducted in a State court, the Ramsey County District Court, Minnesota. Discovery occurred, including the provision of a list of documents for which privilege was claimed. BATCo created a privilege log listing 47,510 documents, including Exhibits 3-7.

163 Exhibits 3-7 are generally available on the Internet on a website known as “Tobacco Documents Online” ( Bell J found that the evidence did not establish how the documents were published on the Internet, but held the BATCo did not do so (pars [46], [99]).

164 Exhibits 3-7 were placed in a publicly accessible register, called the Minnesota Depository and became publicly available as a result of orders made in the Minnesota proceedings, to which I will refer below.

165 Her Honour noted that Exhibits 3-7 are also publicly available in the Clerk of Court’s office of the US District Court by reason of the motion for the issue of the Letter of Request, presently under consideration (pars [47] and [87]).

166 The exhibits were itemised in a list in the course of discovery in the US proceedings, i.e. the proceedings in which the Letter of Request was issued. They were produced by the Opponent in the proceedings, not by BATCo (Blue AB Vol 3, 616F-I).

167 In the evidence before Bell J, Exhibits 1-12 were compendiously described in an affidavit filed on the part of the Opponent as being documents that:

· “have been discovered or filed in the United States proceedings;

…

· are publicly available; or

· are a matter of public record.” (Blue AB Vol 8, 1822Q-T)

168 BATCo maintains its claim to privilege in the US proceedings (Blue AB Vol 3, 616M-J). The affidavit filed on behalf of BATCo in this Court identifies how each document became publicly available in the Minnesota proceedings (Blue AB Vol 3, 630-632). All documents are said to have been placed in the Minnesota Depository. Her Honour made no finding as to precisely how the Opponent came into possession of Exhibits 3-7. However, the exhibits were available to the Opponent by reason of their public availability.

169 Exhibits 3-7 came to be publicly available in the Minnesota Depository in three different ways. First, Exhibits 4 and 5, secondly, Exhibits 3 and 6 and thirdly, Exhibit 7.

170 As to Exhibits 4 and 5:

· BATCo’s privilege claim was challenged in the Minnesota Proceedings on the basis of what was described in the law applicable to those proceedings as the “crime/fraud exception”.

· The District Court of Minnesota found, prima facie, that the crime/fraud exception had been made out and referred the privilege claims to a Special Master.

· BATCo appealed that decision unsuccessfully.

· On the recommendation of the Special Master, the trial judge ordered that BATCo produce about 2000 documents including Exhibits 4 and 5.

· Appeals to the Minnesota Court of Appeals, the Minnesota Supreme Court and the US Supreme Court were unsuccessful.

171 As to Exhibits 3, 6 and 7:

· The trial judge in the Minnesota proceeding ordered BATCo to ensure the appearance of two former BATCo scientists for deposition.

· The trial judge found that BATCo was in breach of the order and by what was called an “Order Imposing Sanctions” required BATCo to produce any privileged documents which referred to the two employees or were authorised or received by or copied to either of them. Exhibits 3, 6 and 7 were of that character.

· BATCo unsuccessfully sought to restrain enforcement of the order in the Minnesota Court of Appeals and the Minnesota Supreme Court.

172 Additionally, as to Exhibit 7:

· During the course of the hearing, Exhibit 7 was tendered in evidence.

173 After a few months of hearing, the proceedings were settled. BATCo was not a party to the settlement agreement. However, the consent judgment of the Minnesota District Court, into which BATCo freely entered, contained obligations on all defendants, including BATCo. That judgment also subjected BATCo to the risk that documents for which it had claimed privilege would become publicly available.

174 Under the consent judgment all non-privileged documents were to be placed in a document depository to which the public would have access, i.e. the Minnesota Depository. The pre-existing court order, referred to as a “protective order”, which had hitherto prevented public access to discovered documents, was to be varied in accordance with a procedure under which BATCo was entitled to oppose any application that the protective orders be dissolved. Such an application was made. BATCo unsuccessfully opposed the application with respect to Exhibits 3-6. It failed in an appeal from that decision to the Minnesota Court of Appeals and to the Supreme Court of Minnesota. That challenge concerned Exhibits 3-6 only, because Exhibit 7 had been tendered in the proceedings and was, therefore, already a public document.

175 By the steps set out above, Exhibits 3-7 became publicly available in the Minnesota Depository and have come to be widely disseminated.

176 In summary, the relevant circumstances are:

(i) The Opponent who seeks to conduct an examination of a witness for purposes of the US proceedings has copies of the documents said to be privileged.

(ii) That possession is lawful and is not based on the inadvertence, oversight or error of any person.

(iii) Those documents have already been employed by the Opponent in an interlocutory application in the US proceedings.

· being tendered in Court (Exhibit 7).

· a ruling that they were not entitled to privilege on the basis of the “crime/fraud” exception (Exhibits 4 and 5).

· a court order imposed by way of sanction (Exhibits 3, 6 and 7).

Was the Privilege Lost?

177 The submissions in this Court primarily focused on the interrelationship between subss (2) and (4) of s122 of the Evidence Act. Mr T Bathurst QC, who appeared for BATCo, submitted that her Honour erred in concluding, at par [103] of her judgment (as quoted above), that the exhibits had been disclosed with the implied consent of BATCo within the meaning of s122(4). He submitted that the only relevant subsection was s122(2).

178 Mr Bathurst relied on the analysis of McLelland CJ in Eq in Telstra Corporation Limited v Australis Media Holdings (No 2) (1997) 41 NSWLR 346 at 350-351, in which his Honour concluded that subs (2) applied to disclosure by a client or party, being the person entitled to the benefit of the privilege, whereas subs (4) applied, and applied only, to disclosure by a person other than the client or party. He submitted that the only relevant disclosure in the present case was that by BATCo and, accordingly, that her Honour erred in concluding that s122(4) was applicable.

179 The basic assumption of BATCo’s submission was that it was BATCo which made documents available to the public at the Minnesota Depository. In my opinion this assumption is wrong. BATCo made documents available to the Minnesota Depository. Persons at the Depository made documents available to the public.

180 Mr T Bathurst QC submitted that the Minnesota Depository was an “agent” of the defendants in the Minnesota proceedings, including therefore of BATCo. There is no evidence to support that contention. The order of the Minnesota Court provided that the Settling Defendants would pay the expenses of the Depository for a period and that thereafter documents would be transferred to the Minnesota State Archives, (Blue AB Vol 4, 927P). BATCo is not a “Settling Defendant”. What role if any BATCo played in funding the Minnesota Depository does not appear. Furthermore, the consent judgment made provision for the plaintiffs in that case to apply to the court with respect to documents such as Exhibits 3-7 to make them available to the public (Blue AB Vol 4, 927F-I). The Court later ordered that the documents, the subject of the application, “shall be made available to the public at the Minnesota Depository” (Blue AB Vol 5, 1144O, 1145E, 1145T), save for trial exhibits, such as Exhibit 7, which the order recounted, “have been released to the public by the Court” (Blue AB Vol 5, 1145O).

181 BATCo documents were also kept at a Depository at Guildford in the United Kingdom which is referred to in the consent judgment as a Depository ‘maintained and operated’ by BATCo (Blue AB Vol 4, 927K). The Minnesota Depository is not so described. Her Honour’s findings clearly distinguish between the two depositories. Guildford is a location where “BATCo provide[s] public access to the documents”. However, Minnesota is a location where “BATCo … [is] required to place documents” (pars [65] and [66]). This differentiation adopts the precise language of the affidavit filed by the Claimant (see Blue AB Vol 3, 626N and 626T).

182 Bell J, after referring to Telstra v Australis Media Holdings, was invited to find that there was no evidence of disclosure by a person other than BATCo and that, therefore, s122(2) applied. Her Honour did not so find. In this she was correct. There was no evidence to support the Claimant’s submission that BATCo acted through the Minnesota Depository. On the contrary, the evidence entitled her Honour to act on the basis that the Minnesota Depository was a separate person and, accordingly, that s122(4) applied.

183 Of course, the first disclosure to the Minnesota Court, whether by the finding that Exhibits 4 and 5 were not entitled to privilege or by the holding that Exhibits 3, 6 and 7 should be disclosed as a sanction, was by BATCo. However, that was not the only disclosure for purposes of s122.

184 Bell J referred in par [103], quoted above, to disclosure by the persons administering the Minnesota Depository. Such disclosure is governed by s122(4). That the persons conducting the Depository would not have had access to the documents but for a prior disclosure by compulsion of law by BATCo does not detract from the proposition that this Court is not concerned with a disclosure by BATCo. The issue is whether BATCo had impliedly consented to disclosure by the Minnesota Depository.

185 In par [102] of her judgment, also quoted above, her Honour said that such consent can be inferred from the fact that BATCo voluntarily entered into a consent judgment which contained a regime pursuant to which all the documents could become publicly available in the Minnesota registry. The fact that BATCo exercised the right, conferred by that very regime, to object to the documents so becoming available, did not constitute an absence of consent within the meaning of s122(4). Nor did its prior objection to documents on the privilege log being disclosed to the Plaintiffs.

186 That BATCo did not want the documents to be made public does not determine the issue of consent. By undertaking obligations and acquiring rights under the consent judgment, BATCo gave implied consent to the disclosure of any document which may find its way to the Minnesota Depository in accordance with the procedures established by the consent judgment. BATCo preserved rights to object to disclosure in accordance with the procedure to which it consented. It must be taken to consent to disclosure if its objections did not prevail. That eventuality was plainly encompassed within the scope of its express consent to the consent judgment. As such it constitutes an implied consent under s122(4).

187 In my opinion, her Honour was correct to so hold. Leave to appeal should be refused for this alternative reason.

The BATAS Application

188 British American Tobacco Australia Services Limited (“BATAS”), formerly known as WD & HO Wills (Australia) Limited, was the Australian affiliate of BATCo. The witness, Mr Cannar, was first employed by BATCo in the United Kingdom and from 1 March 1997 until September 1999 was employed by BATAS as its Director of Legal Services.

189 BATAS sought to be joined as a party in the proceedings before Bell J. Alternatively, it sought to be heard amicus curiae. The basis for its application was that it asserted an interest by reason of a right to confidentiality and legal professional privilege in information known by its former legal officer. Furthermore, it wished to challenge the jurisdiction of the Court to make an order on a basis that was not proposed to be advanced on the part of Mr Cannar.

190 Her Honour noted the interest BATAS may have in the course of the examination of Mr Cannar, in terminology relied upon by Mr J Middleton QC, who appeared for BATAS as follows:

“It is reasonable to assume that if the applicant is examined upon the topics specified in the letter of request the answers to some questions asked of him will disclose the contents of communications in respect of which BATAS claims privilege.” (par [12])

191 Her Honour concluded:

Evidence Act

192 The decision made by her Honour was a discretionary decision on a matter of practice and procedure, with which this Court is reluctant to interfere. In my opinion, no good reason has been advanced to do so. Her Honour committed no error of principle in the exercise of her discretion.

193 BATAS relied on Pt 8 r 8(1)(a) of the Supreme Court Rules asserting that it “ought to have been joined as a party”.

194 Her Honour referred to the judgment of McHugh J in Victoria v Sutton (1998) 195 CLR 291 at [77]-[78] which, counsel for BATAS accepted, set out the applicable test including the following:

“… it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order.”

195 Her Honour rejected the submission that BATAS satisfied this test at par [15] of her judgment, quoted in par [191] above.

196 It was submitted on behalf of BATAS that Pt 8 r 8(1)(a) applied on the basis of the reasoning of McHugh J, set out above, by reason of the fact that it was the “almost inevitable consequence of the orders” that the questioning of Mr Cannar would concern matters confidential and privileged to BATAS. However, the pertinent part of the order that the court made simply required Mr Cannar to attend for examination in relation to the topics listed in the Letter of Request. This order did not “affect”, even at the level of an arguable possibility, BATAS, in any relevant sense.

197 BATAS had no right that was affected by the order under the Act that Mr Cannar be examined nor, accordingly, by Mr Cannar’s application that the order be set aside. Any effect on BATAS would occur, if at all, in the course of the examination. As Mr A Sullivan QC, who appeared for the Opponent, submitted, its interests were adequately protected by the Opponent’s concurrence to BATAS attending the examination.

198 Within the considerable range of the examination, some questions may be such as to impinge upon BATAS’ legal professional privilege and/or confidential information. However, no such question has been asked or answered. The fact that it is likely or even, as Mr Middleton QC submitted “almost inevitable”, that there will be such a question, does not mean that the actual order made has the requisite effect. BATAS is in no different position from numerous other persons whose officers are called to give evidence in proceedings concerning third parties. As her Honour envisaged, BATAS can protect itself by attending the examination and seeking to be heard if its interests are affected. The Opponent consented to such participation.

199 The test propounded by the Full Federal Court in News Limited v Australian Rugby Football League (1996) 64 FCR 410, quoted with approval by McHugh J in Victoria v Sutton at [78] refers to an order “which directly affects a third person’s rights”. The “effect” here, such as it is, is anything but “direct”. An order for examination of a witness does not affect such right, if any, as BATAS has to assert a privilege or maintain a confidence.

200 BATAS invoked a line of authority including Marcel v Commissioner of Police of the Metropolis [1992] Ch 225; Morris v Director of the Serious Fraud Office [1993] Ch 372; Sodden v Burns [1996] 3 All ER 967 and Re Murjani (a bankrupt) [1996] 1 All ER 65 for what was described as a “general rule” in Murjani at 77, per Lightman J as follows:

“Undoubtedly the general rule requires in cases such as the present, where a person is to be ordered to disclose confidential information or documents belonging to a third party, the joinder of that third party.”

201 One question is what Lightman J meant by “in cases such as the present”. The cases to which he referred, albeit perhaps not Murjani itself where, in the event, joinder was not ordered, were all cases in which an order did in fact “directly affect” the rights of the third person. The test set out in News Limited v Australian Rugby Football League was satisfied.

202 In Marcel a party in civil proceedings sought production by subpoena of documents seized by police in a criminal investigation. The Court of Appeal held that the police could answer the subpoena:

“… subject to the true owner having the right to challenge the subpoena, or the production of the documents, on any of the grounds on which a subpoena can be challenged.” (at 257)

203 In Morris and Soden this reasoning was applied to an application by liquidators under s236 of the Insolvency Act 1986 (UK) for production of documents by, respectively, the Serious Fraud Office and the Department of Trade and Industry, of documents obtained in the execution of a statutory power of investigation. In Morris, after referring to Marcel, Sir Donald Nicholls VC said:

“In both cases, those from whom the documents were seized, or the true owners of the documents, are in general entitled to an opportunity to present to the court any ground of objection they may have to the production of the documents.” (at 384)

204 His Lordship went on, at 385, to conclude that in “the normal course” a third party who does not consent to the disclosure should be joined as a respondent to the application under s230 of the Insolvency Act. This passage was referred to with approval in Soden at 981 and is the basis of the “general rule” referred to in Murjani.

205 Morris and Soden concerned, and concerned only, property in the form of documents of a person that had been seized by governmental investigators. No other person’s rights or interests were involved. The owner of the documents could not be described as a “third party” at all. The governmental authority that had seized the documents had no relevant interest to protect. Furthermore, joinder was the only means of enabling the owner to challenge production on an application under the statutory provision under consideration.

206 In the present case, Mr Cannar has interests which are directly affected. Furthermore, Bell J made provision for BATAS to attend and to intervene if its interests are affected. No more is required. There is, in my opinion, no “general rule” of the character referred to in the English authorities in this State. What is required is to apply the terms of Pt 8 r 8. This is what Bell J did. Her Honour’s decision was a discretionary one and no error of principle has been identified.

207 BATAS alternatively relied upon Pt 8 r 8(1)(b) on grounds which it also advanced as the basis of its application to be heard amicus curiae. That subrule concerns joinder of a party “necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon”. I can see no such “necessity” or justification for an amicus role.

208 The basis of this submission was that BATAS wished to raise an issue of jurisdiction under s32(2) of the Evidence on Commission Act 1995. As Bell J noted, Mr Cannar, who was the subject of the order to attend for examination, raised a number of jurisdictional issues. However, Mr Cannar did not raise the particular jurisdictional argument which BATAS sought to advance.

209 There is a circularity in BATAS’ reliance on Pt 8 r 8(1)(b). The jurisdictional issue which it wishes to raise is not a “matter in dispute” within that rule and, it appears, will not be in dispute unless BATAS is admitted as a party. That is, in my opinion, a complete answer to the reliance on this rule. It is also a relevant matter to be taken into account in the amicus curiae application.

210 In my opinion, it was relevant to the exercise of the discretion for Bell J to note that the person directly affected by the order, i.e. Mr Cannar, was not seeking to raise the jurisdictional point. It was also relevant to note that BATAS could protect itself by attending at the examination. There was no indication that her Honour’s exercise of her discretion, either under the rule or with reference to the amicus curiae application, involved any error of principle.

211 In my opinion leave to appeal should be refused with costs.

Orders

212 The orders I propose are as follows:

1 Leave to appeal refused.

1 Leave to appeal on Grounds 1, 2 and 3 granted.

2 Leave to appeal on Grounds 4 and 5 refused.

3 Appeal dismissed.

213 HANDLEY JA: I agree with Spigelman CJ.

214 BRYSON JA: I agree with Spigelman CJ.

**********

Last Modified: 05/19/2004

Citations

British American Tobacco Australia Services Ltd v Eubanks [2004] NSWCA 158

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CITATION:	British American Tobacco Australia Services Limited v Sharon Y Eubanks for the United States of America; Nicholas Basil Cannar v Sharon Y Eubanks for the United States of America; British American Tobacco (Investments) Limited v Sharon Y Eubanks for the United States of America [2004] NSWCA 158
HEARING DATE(S):	30/03/04, 31/03/04, 01/04/04
JUDGMENT DATE:	18 May 2004
JUDGMENT OF:	Spigelman CJ at 1; Handley JA at 213; Bryson JA at 214
DECISION:	Leave to appeal granted on Grounds 1-3 of Cannar application. Appeal dismissed. Leave to appeal otherwise refused.
CATCHWORDS:	EVIDENCE - evidence on commission - requests by foreign courts - meaning of "evidence" - whether evidence sought for purposes of US proceedings - weight to be given to terms of letters of request - Evidence on Commission Act 1995 s 33 - discretion to give effect to letters of request - breadth of inquiry - possible exposure to civil or criminal proceedings - privilege of witnesses - where use-immunity granted in jurisdiction of requesting court - Evidence on Commission Act 1995 s 34 - - - EVIDENCE - legal professional privilege - where documents in public domain - whether implied consent to disclosure by third party - where explicit consent to procedure whereby documents could become publicly available - Evidence Act 1995 s 122(4) - PRACTICE AND PROCEDURE - joinder of parties - where third party rights potentially affected by course of examination of witness - where third party able to protect itself by attending examination and seeking to be heard - no joinder required - Supreme Court Rules 1970 Pt 8 r 8(1)
LEGISLATION CITED:	Evidence Act 1906 (WA) ss 115, 116, 117, 118, 118A Evidence Act 1929 (SA) s 59F Evidence Act 1939 (NT) Pt 6, Div 2 Evidence Act 1958 (Vic) Pt 1, Div 1C Evidence Act 1971 (ACT) Pt 12B Evidence Act 1977 (Qld) Pt 3, Div 3 Evidence Act 1995 ss 117, 118, 119, 122, 128, 134 Evidence (Evidence on Commission) Amendment Act 1988 Evidence on Commission Act 1995 ss 6, 12, 32, 33, 34 Evidence on Commission Act 2001 (Tas) Evidence (Proceedings in Other Jurisdictions) Act 1975 (UK) Foreign Tribunals Evidence Act 1856 19 and 20 Vic c113 Insolvency Act 1986 (UK) ss 230, 236 Supreme Court Act 1970 s 101 Supreme Court Rules 1970
CASES CITED:	Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc [1984] 2 NSWLR 327 British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 Clyne v New South Wales Bar Association (1960) 104 CLR 186 Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 First American Corporation v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154 Genira Trade & Finance Inc v CS First Boston and Standard Bank (London) Limited [2001] EWCA Civ 1733 Golden Eagle Refinery Co v Associated International Insurance Co (unreported, EWCA (Civ), Hirst and Buxton LJJ, Sir John Knox, 19 February 1998) Great China Metal Industries Co Limited v Malaysian International Shipping Corporation Berhad (1999) 196 CLR 161 Gredd v Arpad Busson [2003] EWHC 3001 Kang v Kwan [2001] NSWSC 697 Kang v Kwan [2001] NSWSC 698 Kennedy v Wallace [2004] FCA 332 Marcel v Commissioner of Police of the Metropolis [1992] Ch 225 McCabe v British American Tobacco Australia (Services) Ltd [2002] VSC 73 Morris v Director of the Serious Fraud Office [1993] Ch 372 Morrison v Peacock (2000) 50 NSWLR 178 Morrison v Peacock (2002) 210 CLR 274 News Limited v Australian Rugby Football League (1996) 64 FCR 410 Radio Corporation of America v Rauland Corporation [1956] 1 QB 618 Re Murjani (a bankrupt) [1996] 1 All ER 65 Re Norway's Application (No 1) [1987] QB 433 Re Norway's Application (No 2) [1990] 1 AC 723 Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 Sodden v Burns [1996] 3 All ER 967 State of Minnesota v Philip Morris Inc & Ors (Unreported, EWCA (Civ), Lord Woolf MR, Peter Gibson and Otton LJJ, 30 July 1997) Telstra Corporation Limited v Australis Media Holdings (No 2) (1997) 41 NSWLR 346 United States of America v Philip Morris Inc [2003] All ER (D) 191 Victoria v Sutton (1998) 195 CLR 291
PARTIES :	British American Tobacco Australia Services Limited Nicholas Basil Cannar British American Tobacco (Investments) Limited Sharon Y Eubanks for the United States of America
FILE NUMBER(S):	CA 40799/03; CA 40969/03; CA 40953/03
COUNSEL:	J Middleton QC / M Leeming (BATAS) S J Gageler SC / K M Richardson (Nicholas Cannar) T F Bathurst QC / G K J Rich / S M Nixon (BATCo) A Sullivan QC / A Bell / K Morgan (Sharon Eubanks for the USA)
SOLICITORS:	Corrs Chambers Westgarth (BATAS) Gilbert & Tobin (Nicholas Cannar) Baker & McKenzie (BATCo) Ebsworth & Ebsworth (Sharon Eubanks for the USA)

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	CL 13177/02
LOWER COURT JUDICIAL OFFICER :	Bell J