Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receiver Appointed) and Ors

[2013] HCATrans 216

[2013] HCATrans 216

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide   No A17 of 2013

B e t w e e n -

CLONE PTY LTD

Applicant

and

PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVER APPOINTED)

First Respondent

ALEXANDER FALCONER

Second Respondent

BRENTON SCOTT ROONEY

Third Respondent

FAIRTOWN HOLDINGS PTY LTD

Fourth Respondent

LIQUOR AND GAMBLING COMMISSIONER

Fifth Respondent

LICENSING COURT OF SOUTH AUSTRALIA

Sixth Respondent

GREGORY MICHAEL GRIFFIN

Seventh Respondent

DARREN JOHN CAHILL

Eighth Respondent

TIMOTHY BRIAN ALEXANDER MAY

Ninth Respondent

CHRISTOPHER STEPHEN McDERMOTT

Tenth Respondent

ATTORNEY‑GENERAL FOR THE STATE OF SOUTH AUSTRALIA

Eleventh Respondent

Application for special leave to appeal

FRENCH CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO ADELAIDE

ON WEDNESDAY, 11 SEPTEMBER 2013, AT 12.01 PM

Copyright in the High Court of Australia

MR B.C. ROBERTS:   If the Court pleases, I appear for the applicant.  (instructed by Finlaysons Lawyers)

MR R.J. WHITINGTON, QC:   May it please the Court, I appear with my learned friend, MR S.J. DOYLE, SC, for the 1st, 7th, 8th and 10th respondents.  (instructed by Griffins Lawyers)

MR M.G. HINTON, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear with my learned friend, MS A.D. DOECKE, for the 6th and 11th respondents.  (instructed by Crown Solicitor’s Office (SA))

MR ROBERTS:   The 2nd, 4th, 5th and 9th respondents have filed submitting appearances and there is an affidavit of service pertaining to the 3rd respondent.

FRENCH CJ:   Yes, I think I have a note of the submitting appearance for the 6th respondent.  Is that correct or not, or is somebody appearing for the 6th respondent?  It appears to be – yes, all right, Mr Roberts.

MR WHITINGTON:   Sorry, your Honour, at page 159 of the case book there is a submitting appearance.

FRENCH CJ:   For the 6th?  Yes, thank you.  Yes, Mr Roberts.

MR ROBERTS:   Your Honours, formally I need a short extension of time.

FRENCH CJ:   Is that opposed?

MR WHITINGTON:   That is not opposed.

FRENCH CJ:   Yes, you have the extension of time.

MR ROBERTS:   If the Court pleases.  In my submission, by three principal errors, which are independent but compounding, the Full Court judgment will have the effect of seriously undermining the principle of finality of justice.  The consequence is evident in the case at Bar in the following way.  First, a judgment perfected following a trial and appeal in 2006 is now under attack based upon fresh evidence alone or, alternatively, what is termed malpractice within the meaning of Commonwealth Bank v Quade, nowhere is a case advanced in the traditional formulation as one of fraud.  The effect of the Full Court judgment is that the respondents need only establish that it is in the interests of justice for the challenge to succeed.

Secondly, internal communications between the applicant’s legal team during the course of trial are able to be deployed on that application because disclosure on the taxation was held by the Full Court to give rise to an unlimited waiver of privilege for all purposes and not a limited waiver confined to the taxation of costs.  Thirdly, those internal communications are free to be deployed on the application to set aside the judgment without the need for release from the implied or Harman undertaking because the Full Court has held that it is not a collateral use to deploy documents obtained on a taxation of costs in an application brought whether in the same proceedings or by way of separate action to set aside the principal judgment.

In my respectful submission, the first question arising pertains to the power to set aside a perfected judgment following trial and appeal.  The Full Court has held, in my respectful submission, in error, that there was a general power under both the inherent jurisdiction and under the rules of court to set aside a perfected judgment which is fettered only by the requirement that the Court be satisfied that the justice of the case so requires.  That it is both the inherent jurisdiction and a rules based power is evident from the Full Court reasons at paragraph 20 in the application book at page 70.

GAGELER J:   If you look at paragraph 20, it begins with the words:

While it is not strictly necessary to decide –

those words are uttered in an interlocutory appeal.  Why is this case, at this stage, an appropriate vehicle for the question of principle dealt with in paragraph 20 to be considered by this Court?

MR ROBERTS:   Four reasons, in my respectful submission.  The first is while the decision is only obiter, that is, because of the error in relation to the Harman undertaking.  If there was not an error in relation to the Harman undertaking, it would have been necessary for the Full Court to consider the nature of the substantive proceedings and that was why it was necessary for his Honour the primary judge Justice Kourakis to consider the nature of those proceedings.

Secondly, it is – notwithstanding that it is obiter, nonetheless a considered decision of the Full Court following extensive argument.  Thirdly, the substantive proceeding will be proceeding before this same Full Court, and while it is expressed as being only obiter at this point, for practical purposes it will mean that this trial will now proceed where the only delimiting factor is a question of the interests of justice.  It means that there will be a substantive rehearing of the action which, in my respectful submission, is inimical to the principle of finality of justice. 

Fourthly, and finally, while the Solicitor‑General poses the proposition that the matter is one of general importance, the issue can be dealt with at a later stage in the proceeding.  Of course, there can be no assurance that this trial will ultimately sound in an appeal to this Court at the conclusion of this hearing and in the intervening period there is a considered judgment of the Full Court which, in my respectful submission, is contrary to principle and will have long lasting effects upon at least justice in the State of South Australia.

GAGELER J:   The highest you can put it is considered dicta of the Full Court, is it not?

MR ROBERTS:   Yes, that is so but, in my respectful submission, it is dicta that will govern the future course of this proceeding in a very material way.  Might I address why it is that, in my respectful submission, this is relevantly error?  Short of impeachment on the ground of fraud, when an appeal has been finally disposed of by order duly entered and perfected, a State court and this State court has no inherent power to reopen the case on an application made after perfection of the judgment.  That has been authoritatively determined, amongst other cases, by Justice Aickin’s decision in Gamser v Nominal Defendant and for that purpose his Honour was following the decision of Justice Menzies and Chief Justice Barwick in Bailey v Marinoff.

In respect of the rules based power, the Full Court held that it was a proper exercise of the rule making power because it was in aid of the inherent jurisdiction which compounds the error regarding the existence of the inherent jurisdiction.  That error in reasoning, in my submission, is apparent from paragraph 69 of the reasons of the Full Court at the application book page 81.  The principal qualification to the general principle of finality is provided by the appellate system.  This Court made that proposition very clear, in my submission, in Burrell v The Queen ‑ ‑ ‑

FRENCH CJ:   I do not know that you would need to labour the point of the importance of the question relating to the power of the Court to overturn a perfected judgment.  The question really is – the critical question, in this case, is whether this is – the interlocutory stage is an appropriate vehicle for a grant special leave in relation to that point.  Now, I think you have said pretty well everything that could be said on that issue, have you not?

MR ROBERTS:   I have.

FRENCH CJ:   So the other questions then which – there are questions relating to the implied undertaking and there are questions relating to legal profession privilege.  So far as the questions relating to legal professional privilege are concerned and its waiver, what do you say in answer to the respondent’s contentions that these – looking at paragraph 7, I think, of the submissions of the first and various following respondents ‑ really root the findings in the facts of the particular case or the circumstance of the particular case.  What is the general point of principle against that contention?

MR ROBERTS:   The principal question, in my respectful submission, relates to the issue of limited waiver, particularly limited waiver where the disclosure is made to the very party against whom there will subsequently be a claim of privilege.  That arises in the context of the taxation of costs.  It is in the line of authorities commencing with Goldman v Hesper and followed in Bourns v Raychem a recognition that even a voluntary disclosure of documents in a taxation will not prevent a reassertion of the claim of privilege against the very party to whom the documents have been disclosed in a subsequent context.

What the Full Court has found, in my respectful submission, in error, at paragraphs 98 to 100 is because the disclosure was not compelled by operation of the rules or by the master’s order regarding inspection, it was a voluntary disclosure and, therefore, limited waiver would not apply, but that is to ignore the recognition and to improperly or inappropriately, in my submission, distinguish the decision in Bourns where it was expressly recognised that the disclosure made by the claimant for taxation was following the request by the other party and not at a stage where compulsion had been reached.

FRENCH CJ:   Are you talking here about an issue of principle or about its application in a particular set of circumstances?

MR ROBERTS:   It is an application of principle – or question of principle, in my submission.  The question of principle is the extent to which limited waiver qualifies express waiver and does so in connection with a disclosure, not to a third party, which was what was considered in Mann v Carnell and in Goldberg but a disclosure to the very party against whom there will be a subsequent reassertion of the claim of privilege.  Taxation of costs, in my respectful submission, is a paradigm example of that because it is through the process of taxation that the party in the adversarial position receives access to documents which of their very nature are confidential and which of their very nature are likely to be highly sensitive.

If that gives rise to an unqualified waiver of privilege rather than a limited waiver of privilege, it advances the very vice that, in my submission, is evident in this case where the recipient of the documents is able to then seek to deploy them to undermine the original judgment.  In my respectful submission, that is a question of principle and the question of principle emerges relevantly from the analysis of Justice McHugh in dissent in Mann v Carnell where on Justice McHugh’s analysis there could not relevantly be a limited waiver of privilege where the recipient of the document was the very party against whom the privilege would subsequently be reasserted.

The third and separate point, in my submission, arises out of the implied undertaking.  The question of principle that emerges is whether for the purpose of assessing whether it is a collateral use, one undertakes an evaluative assessment which, in my submission, is the approach called for under Hearne v Street or, as the Full Court seems to postulate, that it is not a collateral use if the documents are to be deployed in the very same litigation without more.  While in many authorities there are shorthand references to it being a collateral use because it is a use outside of the litigation that is not the delimiting feature.  The delimiting feature, in my submission, is whether the documents are being deployed for a use collateral to that for which they were provided.

In a case of a taxation of costs, again one has the paradigm example of production of documents given for a specific purpose and the capacity to utilise those documents for other purposes back in the litigation proper including, as in this case, to set aside the original judgment.  In my submission, it is indicating very starkly the distinction between, on the one hand, the nature of the use and that for which it was provided and, on the other hand, why it is that use in the litigation is not of itself a proper use in conformity with the implied undertaking.

It is that error, in my submission, where the Court has here at paragraph 108 regarded that a use within the litigation in which it was disclosed means it is not a collateral use that has rendered the analysis by the Full Court as to the power to set aside judgment the question of obiter dicta that your Honour Justice Gageler has raised with me.  If the Court was not to take that approach to the question of implied undertaking but rather to construe the implied undertaking in accordance with an evaluative assessment as to whether the documents are being utilised for the purpose for which they are disclosed, it then becomes the necessity to consider the test to be applied and the nature of the proceedings in which the documents are sought to then be deployed.

GAGELER J:   If you were to spell out in express terms the scope of the implied undertaking on which these documents were made available, what were the terms of that undertaking?

MR ROBERTS:   The documents were here disclosed for the purpose and the sole purpose of deployment within the taxation of costs.  It is a collateral purpose to receive documents in a taxation of costs and then seek to deploy them to set aside a judgment in the original proceedings or by way of a separate action.  For that purpose, the decision of the United Kingdom Court of Appeal in Bourns v Raychem recognised that it was relevantly a disclosure of documents to which the Harman undertaking would attach.  That, of course, was then followed by the High Court in Hearne v Street where there was an express citing with approval of the decision in Bourns v Raychem.

The analysis by way of evaluative assessment as to whether it would be a collateral use to deploy documents outside of the taxation purpose was one that was considered by the primary judge Justice Kourakis where his Honour undertakes what, in my respectful submission, is the assessment as to whether there is a sufficiently close connection between the circumstances of the disclosure of the document and the identity of the purpose.  Your Honours will see that analysis particularly at paragraphs 180 to 184.

In my respectful submission, his Honour’s analysis at paragraph 184 ‑ you will see it at page 56 of the application book ‑ is particularly pertinent where his Honour addresses the policy implications of producing sensitive documents on a taxation of costs and then being susceptible to those documents being deployed against you in an application to set aside the underlying judgment.  Of course ‑ ‑ ‑

FRENCH CJ:   You characterised, I think, the nature of the judgment as evaluative, is that right?

MR ROBERTS:   Yes.

FRENCH CJ:   So that means there is a – the question of whether or not a proposed use is collateral is one which rather depends upon the particular circumstances and there is perhaps a multifactorial sort of based evaluation to determine whether proposed use is collateral.  I am just wondering whether what you are talking about is really so much an issue of principle as an issue of differing views as to characterisation of a proposed use as collateral in particular circumstances.

MR ROBERTS:   In my submission, it is a broader question of principle that emerges from paragraph 36 of my learned friend’s outline.  My learned friends put the proposition that, in effect, it can never be a collateral use to deploy the documents in the same litigation.

FRENCH CJ:   Did the Full Court find that?

MR ROBERTS:   In my submission, that is the effect of the Full Court judgment at paragraph 108 to regard the use in the litigation as not being a collateral use.  In my respectful submission, what the Full Court ‑ ‑ ‑

FRENCH CJ:   Yes.  Well, you disagree that in the litigation, even if it is in the same proceedings?

MR ROBERTS:   The mere fact that it is a use in the same proceedings ‑ ‑ ‑

FRENCH CJ:   There were two proceedings here, were there not, there was one which was fresh and one which was in the proceedings themselves?

MR ROBERTS:   That is so and, in my submission, the same principle applies here whether it is the interlocutory application in the same proceeding or the fresh action.  The reason is these documents were disclosed for a purpose of taxation and that is the outer limit of the use.

FRENCH CJ:   So the same sort of limitation would apply in relation to production of documents for interlocutory – purposes of an interlocutory injunction, say?

MR ROBERTS:   As Justice Kourakis observes at, I think, paragraph 183, there will ordinarily be a consistency of purpose, or to put it another way, it will not be a collateral use to deploy the documents within the same action in the ordinary run of case.  In the ordinary run of case, a document disclosed for the purpose of an injunction will have a sufficient nexus to the underlying matters in issue to not render it collateral.

FRENCH CJ:   Does that not raise the question, this is a rather unusual conjunction of circumstances and there is an evaluation made, you can debate the evaluation, but the real question is does it raise a matter of general principle in relation to the implied undertaking or just a matter of particular application?

MR ROBERTS:   In my submission, the former because it is essential to understand what the test is as to whether it is a collateral use and, in my submission, the test ought to be made clear as being that in the Hearne v Street formulation and not one that presupposes a satisfaction of that test in

circumstances where it is merely by virtue of it being within the same action.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Roberts.   We will not need to trouble the respondents.

This application for special leave arises out of an interlocutory proceeding concerning release from an implied undertaking relating to the use of documents produced by one party to another for the purposes of litigation.  It also involves a question whether legal professional privilege in respect of certain documents had been waived.  In the course of determining the application, collateral consideration was given by the primary judge and by the Full Court to the powers of the Supreme Court of South Australia to overturn a perfected judgment or order. 

This application for special leave, arising as it does out of interlocutory proceedings, does not, in our opinion, constitute a suitable vehicle for the agitation of that collateral question.  Nor is there any other question raised on the application which would warrant the grant of special leave. 

The issue of the implied undertaking in relation to documents produced for the purposes of litigation and what constitutes collateral use of such documents is a question the resolution of which, in this case, turned upon a particular set of circumstances not giving rise to any general question of principle.  The question of the powers of the Supreme Court of South Australia to overturn perfected judgments must await a suitable vehicle for proper consideration.  Special leave will be refused with costs.

The Court will now adjourn to reconstitute.

AT 12.25 PM THE MATTER WAS CONCLUDED