Commonwealth Bank of Australia v Quade

[1991] HCATrans 227

~ ~ -~,,. ,:- . ;;,.

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S58 of 1991

B e t w e e n -

COMMONWEALTH BANK OF AUSTRALIA

Appellant

and

THOMAS QUADE, MARY QUADE, SHAWN THOMAS QUADE and GERARD WILLIAM QUADE

Respondents

MASON CJ
DEANE J
DAWSON J
TOOHEY J

GAUDRON J

Quade(2) 1 28/8/91

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 28 AUGUST 1991, AT 10.17 AM

Copyright in the High Court of Australia

MR D.M.J. BENNETT, QC:  May it please the Court, I appear

with my learned friend, MR G.O'L. REYNOLDS, for the

appellant. (instructed by L.E. Taylor, Chief

Solicitor to the Commonwealth Bank)

MR M.L.D. EINFELD, QC:  May it please the Court, I appear

with my learned friend, MR J.K. CHIPPINDALL, for

the respondent. (instructed by Ferrier &

Associates)

MASON CJ: Yes, Mr Einfeld. Mr Bennett.

MR BENNETT:  Your Honours, I hand up an outline of

submissions.

MASON CJ: Yes, Mr Bennett.

MR BENNETT:  If the Court pleases. Your Honours, we have

suggested in a joint note to the Registrar that it

might be convenient - - -

MASON CJ:  We have seen the note.

MR BENNETT:  Yes. Your Honours, the issue of law in this

case is a very short, simple issue which has not

directly been decided, although we submit it was

covered by general authority. The problem is a

very simple and frequently occurring one. After

judgment it is ascertained that documents that

should have been discovered by the successful party

were not discovered for one reason or another. The

question is, what test does one apply as to the

relationship between the discovery of those

documents and the result, in order to justify a new

trial.

The test the Full Court applied was that a new

trial must be ordered if the undiscovered material

might have affected the result.

the test is that of Orr v Holmes and Wollongong Our submission is very simple. We say, first,	Council, which says that it must be almost certain
that the opposite result would have been reached.
Secondly, if the Court is against us on that, we
draw analogies from the fraud and perjury test.
The fraud and perjury test is that the fraud or
perjury, or whatever it is, must have caused, ie,
on the balance of probabilities but presumably on
the Bringinshaw test, the verdict. The verdict
must be obtained by fraud. In other words, a
straight balancing test. Would it, or would it
not, have altered the result?
What has happened here is that the Full Court has not merely sought to apply a different rule to
a new category of case but has applied a rule

Quade(2) 28/8/91

stricter against the party who has obtained the

verdict than is applied in the case of fraud and

perjury. Our primary position is that the

Wollongong Council test is the appropriate one

unless one falls within the fraud or perjury
exception. If the Court is against us on that, we
put a number of possible intermediate positions.

Ultimately, we would accept the fraud or perjury

test. But what the Full Court has done is apply a

test which, in our respectful submission, simply

cannot be right.

May I show Your Honours the passages in the

judgment of Mr Justice Burchett with which

Mr Justice Neaves concurred. In volume V of the

appeal book, there are three very short sentences

which demonstrate the test being applied. The

first is at page 1555 at line 4 where His Honour

says:

Had the evidence been considered free of any a

priori presumption of the unlikelihood of the

bank officers mis-stating the position,

Mr Quade's evidence, supported as it was by a

number of relatively independent witnesses,

might have carried the day.

I will not stop at the moment, beyond

observing that the issue this seems to go to here

is an issue of credibility. What happened was

there was a disputed conversation between bank

officers and the respondent, at which things were

said about foreign currency loans. There were, of

course, different versions of the conversation.

They differed largely in degree but to some extent

there were substantial differences.	And His Honour
accepted the evidence of the bank officers.	What

is said is, had there been an ability to cross-

examine the bank officers on some general documents

which said some general things, it might be that

they would not have been as strong in their

assertions. That is the first reference.

The second reference is at page 1566 where His Honour deals with the second aspect, which is

how it might have affected a determination of the

issues. His Honour says, at line 5:

Most importantly, that material cuts away the

foundation of a major part of the trial

judge's reasoning in rejecting the evidence of

Mr Quade and his neighbours.

That is what I just took Your Honours to.

Quade(2) 28/8/91

But it also suggests that further aspects of the appellants' case might have been elaborated with success -

and it is the word "might" which repeats the error

to which we have referred at 1555.

We have submissions which, if we were to come

to that part of the case, would deal with the other
matters on that page and I will not address those.

But the importance, for present purposes, is the

word "might" .

The third passage is at page 1571. At line 21

His Honour says:

In my opinion, in such a case, -

that is where there has been a default by one

side -

the principle on which the general rule is

really founded - "interest reipublicae ut sit

finis litium" - must be modified by its

collision with the equally important principle

that a party should not be permitted to mock

the orders of the court, which would surely be

mocked if the opponent could -

and that is the third place the test is
adumbrated -

be deprived permanently of a fair prospect of

success -

so "could be deprived of a fair prospect of

success" -

by a party's failure to comply with the

obligation of an order so important in the

conduct of litigation as an order for

discovery.

His Honour goes on, incidentally, to refer to

Totterdell v Nelson, which was a case where the ull

FCourt held that there was another limitation on

Orr v Holmes and Wollongong Corporation v Cowan, that being a limitation which applied where the

case concerned the public interest, but it does not

arise in this case; but the court said that in

such a case one applied a different rule.

MASON CJ: Just before you leave that page, Mr Bennett, and

it is not pertinent to the point you are now

dealing with, is that a correct statement of the

approach to the reception of fresh evidence in

Quade(2) 4 28/8/91

England? I am referring to the statement that

commences at line 10 on page 1573.

MR BENNETT:  No, Your Honour. As we see it, the cases

really seem to follow the same sort of approach in

England and Australia. It is summarized in the
judgment of Mr Justice Dixon, as he then was, in

Orr v Holmes which I will be taking Your Honours to

as the first case I go to. But we would not accept

that proposition at line 10; it does not seem to

accord with the way the case is look at it.

But, of course, what His Honour is talking

about there is a different principle and that is

the principle on which fresh evidence - I am sorry,

I withdraw that.	We would not accept what
His Honour says.

I have not taken Your Honours to what

Mr Justice Einfeld said. Although His Honour did

not put it as clearly, he seems to have applied the

same test. There are two passages, one is

at page 1593 at line 4, where His Honour says:

If nothing else, the absence of the 'G'

documents at the trial -

"G" stands for general. It was intended to

indicate documents which did not come from any file

associated with the particular case but were culled

from various general files around Australia -

appears to have robbed the appellants of the

opportunity to cross examine bank officers
about all these matters and more, backed as

the cross examiner would have been by

materials which essentially represented

admissions of matters which at the actual

trial had had to be largely the subject of

speculation, implication and inference. They

also deprived the appellants of what would

have been a powerful criticism of the bank's

reluctance to admit its failures in this

regard and to call evidence on these subjects

at the trial. It is difficult to overstate

the forensic and evidentiary effects of this

change of atmosphere -

although His Honour does not say what that effect

is. At pages 1608 to 1609 he says, at line 11:

I think that the correct conclusion is that

the documents appear to create an atmosphere

or aura of promotion which did not draw

distinctions between what advice should be

given where the proposed borrowers were

sophisticated entrepreneurs and what should be

Quade(2) 28/8/91

told to inexperienced dabblers in this type of

commerce. These appellants, quite

dissimilarly to the borrowers in David

Securities, were the victims of this

unselective approach. The appellants' failure

to raise at trial the issue of external

advice, monitoring and management does not

assist the respondent as they did not have the

documents on which these arguments could

evidentially have been based. Presumably if

they had been available, the appellants would

have pleaded this contention as well.

That rather suggests that one should discover on a

non-issue so that the plaintiff has the opportunity

to amend to plead that issue. Then His Honour goes

on:

Although the result of such an undertaking

seems to me clear, and so long after these

catastrophic events for the appellants, this

Court should be hesitant in providing a

prescription for further delay, we are
apparently bound not to speculate what the

fate of this argument would have been. That rather suggests that His Honour takes the view

he is bound not to ask the causation question

between the non-discovery and the result at the

trial.

In my view, it certainly provides a cogent reason for a new trial at which the documents

would all be available for testing and

consideration alongside the rest of the

evidence.

Then he says the possibility of reversing the trial

result, he was not asked to do it, so he is not

going to. So His Honour does not state the test in

the same form as the judgment which represents the

majority judgment.
I should say one other thing before I leave
the judgments.	Mr Justice Neaves dealt with this

only at page 1548 in one short paragraph and His

Honour there said:

The appellants, however, also seek a new

trial based on additional documentary material

which was not produced by the respondent -

et cetera.

I have had the advantage of reading and

considering what has been written by

Mr Justice Burchett on this aspect of the

Quade(2) 6 28/8/91

matter. I am persuaded, though not without

considerable hesitation, that the additional

material is such as to warrant the granting of

a new trial.

He does not give reasons, but appears to adopt the reasoning of Mr Justice Burchett.

Now, the primary submission we make - and this is paragraph 4 on the first page of my

submissions - is that the appropriate test is that

relating to discovery of fresh evidence, which is
really, of course, what this is. There are two

cases in this Court in which a general test is laid

down. In each case principally by

Mr Justice Dixon. It is interesting to note that

he, in the second case, slightly expands the

meaning of some of the matters he put in the first

case, so they make a useful pair of cases to

examine the rule.

I can take Your Honours first to Orr v Holmes,

76 CLR 632, and I will need to spend a little

longer on these two cases than on the others.

DEANE J: Mr Bennett, did anybody suggest in this case that

the appropriate thing to do was to set the judgment

aside and send it back to the primary judge so he

could decide whether the new material might have

affected or would have affected his decision?

MR BENNETT:  No, Your Honour, it was dealt with as something

raised on appeal.

DEANE J:  And on the basis that if the court thought it

might or would have, it then goes back and you

start all over again.

MR BENNETT:  Yes. One of the unfortunate features of the

way it was argued, Your Honour, is this - and I do

not want to get into the facts - - -

DEANE J: But that is in the context where there is a judge

who could look at this material and say whether it

would have affected him, or not.

MR BENNETT: Precisely, Your Honour. That would have been a

much more satisfactory way of doing it and also

that would have had the advantage that both parties

could have put on some evidence which neither party

did in the Full Court in relation to, on our side,

the circumstances of non-discovery and, on the

other side, the way in which they say it would have

affected the case, but neither side did that and

both sides simply made general statements from the

bar table.

Quade(2) 7 28/8/91

DEANE J: There would obviously be some cases where the

judge, having reached the view, should not deal

with it again but I would have thought that would

be rather extreme and rare.

MR BENNETT: There was always a little bit of a problem, I

suppose, a theoretical rather than a real problem,
of a judge who is functus officio having to

re-examine what he would have done in certain

situations, but that may be only a theoretical

problem and not a practical problem. As a

practical matter, if the parties had suggested it,

it would have been a more sensible and more

appropriate course, but they did not and the matter

proceeded on the other basis.

Your Honours, this was a lottery case and the

further evidence, one would have thought, was

fairly strong because it went to the question of

whether a particular ticket could have been issued

before a particular date and that would
substantially affected the plaintiff's version

about the agreement to share in the proceeds.

The Chief Justice, Mr Justice Latham, at

page 635, simply said at the very bottom of the

page:

Further, before a new trial is granted on the

ground of discovery of fresh evidence it must

be shown at least that the evidence to be

admitted is "of such importance as very

probably to influence the decision".

Mr Justice Dixon put it very much more highly

than that. The key passage is at page 642 - and I

will take Your Honours back to a qualification on

an earlier page - but at page 642 point 7

His Honour, said this, after setting out many of

the cases:

No doubt some of the foregoing expressions are

susceptible of a weaker application than

others of them. But the evident purpose of

all of them is to ensure that new trials will

not be granted because of fresh evidence
unless it places such a different complexion
upon the case that a reversal of the former

result ought certainly to ensure. The fact

which the new evidence tends to prove, if it

does not itself form part of the issue, must

be well nigh decisive of the state of facts

upon which the issue depends. The evidence
must be so persuasive of the existence of the

fact it tends to prove that a finding to the

contrary, if it had been given, would, upon

Quade(2) 8 28/8/91

the materials before the court, appear to have

been improbable if not unreasonable.

Now, if I can just go back to the

qualification, on which much emphasis was placed.

At page 640 point 7, His Honour introduced that

passage in this way:

If a trial has been regularly conducted -

and I will come back to those words -

and the party against whom the verdict has

passed cannot complain -

and there is then a list of matters -

that evidence has been wrongly received or

rejected or that there has been a misdirection

or that he has not been fully heard or has

been taken by surprise or that the result is

not warranted by the evidence, the successful

party is not to be deprived of the verdict he

has obtained except to fulfil an imperative

demand of justice. The discovery of fresh

evidence makes no such demand upon justice

unless it is almost certain ..... an opposite

result -

et cetera. And there is reference to the new

trials as an enormous evil in themselves, and a

string of cases which stress the importance of the

interest reipublicae rule.

Now, the problem, of course, concerns the

meaning of the words "if a trial has been regularly

conducted" and what was said here was that, "Well,

if a party is made default in relation to

discovery, the trial has not been regularly

conducted."

In my submission, the words do not bear that

construction: first, because of what I am about to

take Your Honours to in His Honour's judgment in

the next case, in Wollongong Corporation; but,

secondly, because of the word "trial" which rather

suggests that one is not talking about pre-trial
matters; and, thirdly, because the types of

matters which the courts have considered in the

past as falling within this rule have been cases

where there is fraud, perjury clearly proved,

allegations of some sort of misconduct by counsel

or the jury or perhaps by the judge; matters of

that sort.

There is nothing suggesting that the words are

wide enough to cover default in discovery and, as

Quade(2) 9 28/8/91

we submit, the words are inappropriate for that

sort of meaning.

If one goes to Wollongong Corporation v Cowan,

93 CLR 435, His Honour at page 444, at point 3,

says this:

The law which governs the grant of new

trials on the ground of the discovery of fresh

evidence is not in doubt. It has been

discussed in this Court in different aspects

recently on three occasions.

And Orr v Holmes and two other cases are referred

to.

If cases are put aside where a trial has

miscarried through misdirection, misreception
of evidence, wrongful rejection of evidence or
other error and if cases of surprise,

malpractice or fraud are put on one side, it

is essential to give effect to the rule -

et cetera. We respectfully submit that is intended to be a different formulation of the list appearing

in Orr v Holmes at page 640. It is put in

different terms but the words "if a trial has been

regularly conducted", we respectfully submit,

correspond with the words "surprise, malpractice or

fraud"; and if one does that, the lists more or

less correspond. That is, of course, something

short of the material which ought to have been

discovered.

TOOHEY J: But you appear to be suggesting, Mr Bennett, that

the only categories which arise for consideration

are those referred to in the two cases you have

mentioned but that may be simply because the

question of failure to give adequate discovery

simply had not arisen.

MR BENNETT:  I fully accept that possibility and my argument accommodates it. I start with the proposition that

the general rule is that laid down in these cases and the starting point is that is the rule unless

the Court is going to - as the Full Court has

done - make a new law on it.

TOOHEY J: Well, when you say it is the rule, true enough it

is the rule which has been applied in cases where

the fresh evidence has not been evidence arising

from any action on the part of the other party. Is

not that the difficulty - if that is not putting it

too high - that you have to meet, that these cases

really do not touch the question at issue in this

appeal.

Quade(2) 10 28/8/91

MR BENNETT:  We say, Your Honour, that the existing rules

deal with it sufficiently. If one has, on the one

hand, a case of deliberate and fraudulent

concealment and discovery of a most vital document

- suppose a person is suing a person who is dead,

or the estate of a person who has died, on a deed

and he fails to discover what the executor does not

know, a second deed which rescinds the first deed

and deliberately fails to discover that document -

there one would have an extreme case of virtual

fraud and the fraud rule would not doubt apply to

it and be sufficient to deal with it.

On the other hand, if you have a case where

the non-discovery merely goes to a peripheral issue

and is accidental, one would have thought that the

interest reipublicae principle that says finality

of litigation is important would say, "Unless you

can really show that this, fairly definitely, would

have changed the result we ought not to allow new

trials on that basis because we are going to simply

have too many applications for new trials".

So, in a sense, the two existing rules

accommodate it but as I conceded in opening, if the

Court is against me on that, the fall-back position

is that whatever intermediate rule one applies it is something short of what was applied against us

here which was a rule stricter against us than the

case of fraud or perjury.

I should perhaps just mention the case of

Commissioner of Government Train & Omnibus

Services (NSW) v Vickery, (1952) 85 CLR 635, which

His Honour refers to at page 444.

Now, that was a case where there was a motor

accident. The plaintiff claimed virtually complete

loss of his eye sight and recovered very

substantial damages against the Commissioner of

Government Train Services.	The fresh evidence was
that at some period between the accident and the

trial he had been working in a hotel, which no

doubt he would have had some difficulty in doing

with his eye sight impaired as badly as he said at

the trial it was, and the Court simply applied the

Orr v Holmes test and said, "Well it is not clear enough, it is not definite enough and the rule is

very strict and you cannot get a new trial."

But, what is interesting about the case for present purposes is this, that that evidence really

would have gone to a major concealment by the

plaintiff. It was not a default in complying with an order for the court of discovery; it was not in

that procedural category, but it was a pretty clear

case of some sort of concealment or misleading of

Quade(2) 11 28/9/91

the court by the plaintiff, if the evidence was

there, and yet is was insufficient. The court

said, "You apply the Orr v Holmes test." And the

reason one has to be so strict about it is that, in

a sense, most losing parties in litigation, say

that they lost because of some serious default by

the other party, usually perjury. To take the

extreme case, if one has a case where the evidence
is black and white; the plaintiff says black and
the defendant says white, if the judge believes the

defendant, the plaintiff cannot seek a new trial

and put on an affidavit saying black again, and

say, "Well, on my affidavit the defendant perjured

himself." Clearly one cannot do it as easily as

that.

So, in a sense, in every case of this sort,

there is some sort of allegation of default or

misconduct on the other side, but the rule says one

has to go further. And the cases have laid down

two categories: the Wollongong Corporation category

and the fraud or perjury category. I turn to the

cases on that second category because that is, in a
sense, the furthest the courts have gone and it

represents the other side of the picture, which the

Court must look at in deciding how to resolve the

present novel question.

It must be borne in mind - and this is

paragraph 7 of my submissions - that the cases are

not completely clear on this and one of the reasons

they are not completely clear is that there are a

number of quite separate questions. There is what

constitutes fraud, where the word "fraud" is used,

but leaving that question aside for the moment,

there are two questions which really have to be

fairly rigidly separated.

One is: what degree of proof is necessary to

establish the fraud or perjury one alleges; and the other is: what is the causative relationship which

needs to be established between that fraud or

perjury and the adverse result at the trial?

Unfortunately, very few of the cases make that

distinction as clear as they should. They use

phrases like "verdict obtained by fraud", which

rolls up (b) and (c), and what we submit about

those cases is that the phrase "verdict obtained by

fraud" includes within it an element of causation

and it is not a verdict obtained by fraud unless

one establishes causation. So one has to be a

little careful about what some of the cases say in

relation to fraud and perjury.

There is another minor issue which emerges in

one of the cases, which is that one is not looking

at the probability at a new trial; one is looking

Quade(2) 12 28/8/91

at the probability at the old trial. And there is

a homely example given in one of the cases which

makes that very clear. It says, suppose the

plaintiff sues on a deed which the defendant

alleges is a forgery and the plaintiff calls a

witness and succeeds, the witness to the deed. And

suppose subsequently that witness, having recanted

of his error, writes a letter or swears an

affidavit while overseas saying, "I committed

perjury; I never witnessed the deed".

Stopping there, one clearly has a very strong case for establishing perjury in a new trial. The

example continues, assume the defendant agrees to

return to England to face his trial and an English

police officer is sent to bring him back to

England, but the ship is lost on the way back to England with all hands. The result then is that

the document being inadmissible, the confession

being inadmissible under rules of evidence at the

time, there is no way in which the defendant is

going to be able to establish the truth at the new

trial.

The court says that is still a case for a new

trial because the issue is not whether the new

evidence at a new trial would produce a different

result or be admissible. The issue is whether, had

it been available at the old trial it would have

done, and the confession is sufficient to get you

your new trial. So one has to be a little careful

about the exact nature of the test one is applying.

Having said that, may I, as quickly as I am

able, just take Your Honours through the major

cases. The earliest one is one which - -

DEANE J:  Mr Bennett, you seem to be assuming that there is

a test.

MR BENNETT: Yes.

DEANE J: Why is not the test simply: do the interests of

justice require that there be a new trial? Say,

for example, it emerged that one party had

kidnapped a witness on the other side and locked

him up in a room to stop him coming to court and

giving evidence. Can it really be suggested that

one sits down and says, "Oh, there is a formalized

test laid down and we can't order a new trial

unless it appears that the verdict must have been

different or unless it appears that the verdict

probably would have been different"? Does not one

simply say, "We look at the conduct, we look at the

facts, and we look at the effect it might have had

and, having done all those things, we decide

whether there should be a new trial or not"?

Quade(2) 13 28/8/91

MR BENNETT:  Your Honour, it is the last phrase where I

respectfully take issue with Your Honour's example.

In a case as extreme as that one, of course, would

obviously satisfy the first leg of the test. But

one could imagine cases where that would not be so. Suppose there were three witnesses to the document,

two of them being persons of the highest

professional repute who could not be challenged,

let us take a bishop and a judge, and the third is

the man who you lock up.

DEANE J:  Who is going to say the bishop and the judge were

lying?

MR BENNETT:  No, who is going to support them?

DEANE J: Going to support them.

MR BENNETT:  And the other side says, "You locked up that

witness". And the plaintiff says, "But it would

not have affected the result. Look, I had a bishop

and a judge as well."

DEANE J: But that begs the question. I mean, the real

question is, say one party locks up the witness of
the other party to stop him getting to court, and

the appellate court looks at it and says, "If that

party had got to court his evidence might have

affected the result.", can it really be suggested

that a court then says, "Ha, locking up the witness

is not good enough if it only might have affected

the result." You have to say it would have

affected the result, or that it - - -

MR BENNETT: Well, Your Honour, even if one said that which,

in my respectful submission, would go much further

than the courts have gone in relation to fraud or

perjury and matters of that sort, that would still
be a matter of weighing a number of factors,

including the degree of heinousness of the conduct

and the likely result. That is not what was done
here.	What was done here was to say, "We have a

default, a breach of the court's solemn order about

discovery. A party in default in that situation -

once we have that, we say if there is any way it

could have affected the result that is the end of

it."

Your Honour, what has been done here goes a

long way beyond it. Your Honour's example,

certainly, is a reason why the Court might not say

that Wollongong Council v Cowan is an absolute test

in all circumstances, and that there are no other

exceptions to it. It may be, indeed, that that
exception is another one that falls within "if the

trial has been regularly conducted". But we would submit even there, it must be an essential element

Quade(2) 14 28/8/91

of the applicant's case to show that the conduct

would have affected the result at the trial.

MASON CJ:  Mr Bennett, is it not true to say that in the

fraud cases the test, if you like to call it a test

in inverted commas, suggested by Justice Deane, has

been applied, that is, is it in the interests of

justice that there should be a new trial,

particularly in a case where the evidence does not establish that the judgment was obtained by fraud, in which event the verdict would be set aside and a

new trial ordered, but where the evidence, if

believed, would establish that the judgment was

obtained by fraud,then, is it in the interests of

justice that there should be a new trial?

MR BENNETT:  Your Honour, we would say two things to that:

first, the reference is to the interests of
justice, really the reason for the rule rather than

a statement of the rule itself; secondly, that in

so far as the cases talk about judgment obtained by

fraud, they are assuming that one proves on some

standard, whether it is Briginshaw or balance of

probabilities, that the result was affected by the

fraud; and in that sense they are laying down the

test.

It is really the distinction between (b) and

(c), between proving the fraud and proving the

causation but one still has to - one thing the

cases make absolutely clear is that causation is an

element. The only thing is some of them do it by

using the phrase "obtained by" and some of them use

it by stating it as a separate requirement.

Because one can multiply examples of cases where

there has been fraud or perjury on an irrelevant

issue and that simply is insufficient.

GAUDRON J: While you are interrupted, Mr Bennett, could I

ask you this: why does not one simply say there

was a failure in the court processes or procedures.

rejected? It is the same as though evidence had wrongly been

MR BENNETT: Because, Your Honour, that elevates a failure

to give discovery on what might be an immaterial

issue to - - -

GAUDRON J: Well, if it is an immaterial issue you do not

get a new trial because there is a defect in the

procedures that could not possibly affect the

result?

MR BENNETT:  Your Honour, it still elevates it over fraud or

perjury.

Quade(2) 15 28/8/91

GAUDRON J:  Of course it does but so do the rules elevate

the wrongful rejection of evidence above fraud or

perjury on your argument.

MR BENNETT:  Your Honour, those rules are developed in a

rather different context.

GAUDRON J:  They are developed in the context of a blemish

in the court process.

MR BENNETT:	Your Honour, we would submit that none of the cases have drawn that analogy.	None of the cases
which have referred to - - -

GAUDRON J:  None of the cases have drawn any analogy because

there has been no case on the point.

MR BENNETT: There is one I am about to take Your Honours to

which is partially on it but, no, Your Honour,

there has been no direct case which has discussed
the issue about discovery. But we submit that is

simply because it has been assumed that the general

rule would apply. Either it is sufficiently

serious - - -

GAUDRON J: But one general rule is if there is a blemish in

the trial process that might have affected the

result there is a new trial.

MR BENNETT:	Your Honour, in my respectful submission, that rule has never been extended beyond errors of law
by the judge.

GAUDRON J: It is not a question - yes.

MR BENNETT: Wrongful rejection of evidence is an error of

law by the judge and there are exceptions, of

course, and there are special rules for misconduct.

But if one looks at the misconduct cases, they

apply a lower test.	The only case where the higher
test is applied is error of law by the judge itself
as to which the law has a different history.	And

the phrase "blemish in the trial", in my respectful

submission, is really in a sense inappropriate for

error of law by a judge. It is a different

category and it is not applied to other blemishes

in the trial which arise from the default of a

party.

TOOHEY J: There is another aspect, perhaps, of this,

Mr Bennett, that the cases that deal with fresh

evidence in the fraud and perjury cases always have

underlying them the difficulty that it may be that

the so-called fresh evidence may not be accepted

and that is why the formulations are generally
hedged with statements like "if believed" and so

on. But you do not have that difficulty here

Quade(2) 16 28/8/91

because the documents in question come from the

other party. There is no argument about their

existence. And it may be that for that reason the

matter has to be approached rather differently;

perhaps along the lines suggested by

Justice Gaudron. It is a matter of whether the

judicial process has misfired in some way.

MR BENNETT:	The cases on fraud and perjury make it clear that one must still have causation and that mere
fraud or perjury is insufficient - I will take you
to one of those cases - so that the cases that
focus on the issue to which Your Honour refers are
the cases looking at the first issue. They still
all recognize that causation is an essential
element.

Your Honours, the earliest case, and really

the only one which in a sense is a discovery case,

although it is not discussed in that way,

is Boswell v Coaks, which is only reported in two

places, one is in the reports, but the report I

have given Your Honours is in a note to the Law

Times Report of Birch v Birch, LXXXVI 365 at the

bottom of the page. The case which is the near

discovery one is the one which this refers to,

which I will take Your Honours to in a moment. At page 366, in the second column, at about the sixth

line His Lordship - this is the Earl of

Selbourne delivering the decision of the House

of Lords:

I will not lay stress upon its being a

judgment of this House in the present case,

because I think it right to assume that, if a

judgment of the Court of Chancery ... is in a

proper way proved at the hearing of the cause

to have been obtained by fraud -

so again, that is the test

it is one which the court can remedy. I say

that, not by any means dissenting from the

spirit of the observations made in

Flower v Lloyd ... by that great judge

James, L.J. and concurred in by Thesiger, L.J.

that the court ought to be even more than

usually cautious how it attends to all sorts

of reasons which may be brought forward,

plausible upon the face of them, for

disturbing such a solemn judgment, having

regard to the enormous mischief of unsettling

the principle on which the doctrine of

res judicata is established.

Now, that case to which His Lordship refers,

Flower v Lloyd, (1878) 10 Ch D 327, is the case

Quade(2) 17 28/8/91

that I described as being, in a sense, a discovery
case. It was a case where there was an expert

appointed by the court to inspect some dyes in a

patent case and it was then shown that certain dyes

had been concealed from him after the verdict and
what was said was, this party failed to disclose to

the court expert, had deliberately concealed from

the court expert, certain dyes, and the statement

at page 330 point 7 explains that:

The Defendants admitted that at the time

of the inspection they had a number of stones

other than the twenty-seven which was shewn to

Mr Imray, and that shortly before his visit

such stones were removed from the portion of
the premises where his inspection took place;

but they denied that any fraud was intended -

Now the argument put by Mr Kay, QC, at page 331 has

a haunting resemblance to what is said by the

Full Court here. He said:

Where any fraud or surprise upon the

Court is proved, the Court will set aside a

decree and remit the parties to their rights.

A fraud of this kind is committed when a

person whose duty it is to put proper

materials before the Court does not do so.

And then the argument against that is:

The Court will not set aside a decree and

remit parties to their rights merely because

there has been a suppression of something

which had better have been disclosed, unless

the fact suppressed is of vital importance -

Now Lord Justice Baggallay then says at page 332 -

he goes into the facts and so on - but he says

three things that are relevant. In the second

paragraph, he says at the beginning of it: It only remains for us to say

that ..... the charges of fraud made by the

Plaintiffs against the Defendants have not

been substantiated; that the orders

given ..... for the removal of the
stones ..... were not given for the purpose of

concealing -

So it is an accidental non-discovery, if one likes.

Then, on the next page, page 333 at line 5:

that if every stone which had been removed had

been produced to Mr Imray and examined by him ..... though his report might have been

Quade(2) 18 28/8/91

varied in terms it could not with propriety

have been to any other effect in substance -

So he applies some sort of test based on causation.

Lord Justice James, with whom Lord Justice Thesiger

agreed, put a very much stricter approach and he

said:

We have thought it right and due to the

Defendants to go through the

allegations ..... But we must not forget that

there is a very grave general question of far

more importance than the question between the

parties to these suits.

And this is the passage approved by the

House of Lords in the case I have just taken

Your Honours to.

Assuming all the alleged falsehood and fraud

to have been substantiated, is such a suit as
the present sustainable? That question would

require very grave consideration indeed before

it is answered in the affirmative.

That is a suit to set aside on the basis of

effectively non-discovery.

Where is litigation to end if a judgment

obtained in an action fought out adversely

between two litigants sui juris and at arm's

length could be set aside by a fresh action on
the ground that perjury had been committed in

the first action, or that false answers had

been given to interrogatories, or a misleading

production of documents, or of a machine, or
of a process had been given? There are
hundreds of actions tried every year in which

the evidence is irreconcilably conflicting,

and must be on one side or other wilfully and

corruptly perjured. In this case, if the

Plaintiffs had sustained on this appeal the

judgment in their favour, the present

Defendants, in their turn, might bring a fresh

action to set that judgment aside on the

ground of perjury -

et cetera.

the parties might go on alternately ad

infinitum.

And he says that it is very difficult.

GAUDRON J: There is, however, another difference in this

case, is there not? It is an appeal brought within

time.

Quade(2) 19 28/8/91

MR BENNETT:	Yes.
GAUDRON J:	Was not an application to set aside; not in

form, at any rate, an application to set aside the

verdict.

MR BENNETT:  No, Your Honour, but in relation to appeals

brought within time where what is alleged is

discovery of fresh evidence, those are the cases

where the Wollongong Corporation test has simply

been applied. The authorities make it clear, as I

understand it, that one is entitled to set aside a

judgment for fraud either by appeal or by a fresh

action. While there are minor procedural
differences there is no difference, we would

submit, in the rule to be applied.

GAUDRON J: Public interest considerations, so far as they

underpin the rules on which you rely, are really

quite different in relation to a verdict which has

stood for some time, for example, and a verdict
which has been made the subject of an appeal within

the times limited for appeal.

MR BENNETT:  Your Honour, some of them are, some of the are

not. The public interest considerations that there

should not be a fresh trial and further actions

where matters have been decided remains. The

public interest that a judgment which has stood for
some time should continue to stand is, of course,
only present in the one, not the other. But the

cases have not laid down a different test for fraud

in those cases; they have simply said that there

were two alternative procedures: if you are within

time, you appeal or have a new action; if you are

not within time, you have a new action.

Indeed, many of the cases are applications to

strike out the new action and the Court there has

the further complication of saying, "Are the facts

alleged sufficient to justify it?".

Birch v Birch, (1902) P 130. There are only

two matters I want to remind Your Honours of in

this case. It is a decision of the Court of

Appeal. At page 137, the judgment of Lord Justice Cozens-Hardy, with which Lord Justice Stirling agreed, he says, at point 6

of the page:

This is not an appeal by the plaintiff from

that judgment, or an application for a new

trial. The present action is an independent

proceeding to set aside that judgment on the

ground that it was obtained by fraud.

Quade(2) 20 28/8/91

That is the distinction Your Honour Justice Gaudron

put to me.

I do not doubt that such an action may be

maintained, at least when the judgment has

been procured by the fraud of a party -

so, I stress those words "procured by the fraud of

a party". On the next page he refers, just above

the middle of the page against the words "the

former judgment" in the margin, to:

a new discovery of something material to

disturb the former judgment -

and there must be -

a reasonable possibility of the alleged fraud

being established -

and then -

A mere general allegation of fraud, without

particulars, cannot avail.

Then, further down, he says:

As to paragraph 6, this allegation does not seem to me to be directly material to the

judgment. It only goes to the credit of two

of the witnesses who were examined and cross-

examined -

which is, of course, one of the bases here -

It would be highly dangerous to allow a solemn judgment to be set aside on the ground of

alleged perjury by witnesses dealing with a

collateral point, more especially when the

alleged perjury is ..... denied.

The only other matter in that case, and I

simply refer Your Honours to this, is that, at

page 136, Lord Justice Vaughan Williams gives the

example of the shipwrecked perjurer which I took

Your Honours to earlier. So it is a distinction

between the first trial and the second trial.

May I jump now to the cases, as it were, at

the end of the line? There are a number of very

recent cases in which the courts have very firmly

said that in perjury cases one must prove

causation. If I can start at the bottom of the

list on page 3. It is a decision of the Full Court

of Queensland in Boughen v Abel, (1987) 1 Qd R 138.

This is, like many of the cases, a strike-out

application in relation to the new trial. So one

Quade(2) 21 28/8/91

is looking at the statement of claim the plaintiff

files seeking to set aside the judgment for fraud

and saying, "Is that sufficient?". At page 146,

Mr Justice Moynihan says, at line 5:

A completed judgment may be impeached by

a fresh action on the ground that the judgment

is tainted by fraud. The fresh action will

however be regarded as an abuse of the process

of the court unless the plaintiff can

establish that he has reasonable prospects of

success based on facts discovered since the

judgment he seeks to impeach. In such a

circumstance considerations of upholding the

finality of judgments which underlie the

outcome of cases such as Port of Melbourne

Authority v Anshun Pty Ltd are not impeached.

Rather fresh facts are brought forward as

founding the intervention of the court. The

litigation is now not appellate in nature or a

rehearing on the old material. It does not involve a decision contrary to any previous

decision. What must be shown is something

material to disturb (if proved) the earlier

judgment and newly discovered by the

plaintiff.

Mr Justice Connolly, with whom

Mr Justice Vasta agreed, set out a number of

passages on page 140 in which he again referred to

the importance of establishing causation. He

refers to McHarg v Woods Radio, which I will be

taking Your Honours to, Boswell v Coaks, and Birch

v Birch, that:

the plaintiff must produce evidence of

facts ..... which raise a reasonable probability

of the action succeeding.

Wentworth v Rogers (No 5) is one of the clearest

discussions of the conflicting authorities. It is

a decision of the Court of Appeal of New South

Wales reported in (1986) 6 NSWLR 534. This, again,

is an appeal from a striking out of a statement of

claim. At page 538 in paragraph D, the President,

Mr Justice Kirby, says:

It is useful to state a number of principles

which are established by law and which govern

proceedings of the kind which the appellant

wishes to bring.

This judgment was concurred in by Mr Justice Hope

and Mr Justice Samuels without further comment. It

says:

Quade(2) 22 28/8/91

First, the essence of the action is

fraud. As in all actions based on fraud,

particulars of the fraud claimed must be

exactly given and the allegations must be

established by the strict proof -

and:

Secondly, it must be ..... a new discovery

of something -

and:

Thirdly, mere suspicion of fraud, raised

by fresh facts later discovered, will not be

sufficient.

At the top of page 539:

The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will

succeed. This rule is founded squarely in the

public interest -

and then:

Fourthly, although perjury by the

successful party ..... may, if later discovered,

warrant the setting aside of a

judgment ..... the mere allegation, or even the

proof, of perjury will not normally be

sufficient ..... The other requirements must be

fulfilled.

Then, there are some other requirements which I

will not take Your Honours to.

There is a decision of Mr Justice Merling

which puts it directly and finds, in fact, on the

where there is a full hearing of the second issue of causation. This is one of the few cases	action - a decision in the second action. It
appears in (1986) 12 FCR 14. It was part of the
AMIEU litigation - AMIEU v Mudginberri Station, and
at pages 18 to 19 His Honour sets out the principle in a form which we respectfully adopt. His Honour
says this:

Counsel for the applicants argue that if

it is shown that false or fraudulent evidence

was tendered to the Court and that the Court

took it into account in reaching its decision,

it is not to the point that there was other

evidence before the Court which justified the

making of the orders.	I do not think this
submission is correct.

Quade(2) 23 28/8/91

In other words, just stopping there, what is said

is, there was fraudulent evidence, the court took

it into account but the court could have reached

the same result on other evidence. He says:

Support ..... is said to be found in Hip Foong

~ng-

which I will take Your Honours to -

I can find nothing in the lastmentioned

case ..... The first two cases were appeals from

decisions granting ..... and rejecting new

trials.

He refers to a passage from Hip Foong Hong which is

often taken out of context, as this Court said in

McDonald, that:

A judgment that is tainted and affected by

fraudulent conduct is tainted throughout, and

the whole must fail ..... That statement was

made in the context of the facts of the case

and the issue which fell to be decided.

He refers to the facts and then:

Plainly the fraudulent suppression of the

documents, if established, might have affected

the whole of the trial judge's decision.

Jonesco ..... was a case in which the fraud, if

established, would have affected the

credibility of the whole of the successful

party's case. Neither case bears any

resemblance to the present. Total rejection

of Pendarvis' alleged false or fraudulent

evidence would not cause any change to be made

in the orders made in the injunction

proceedings.

So he seems to apply a straight causation

And he refers to the desirability of the end to test: would it or would it not cause a change? litigation. Now, this Court dealt with the fraud

exception in the leading case of McDonald v

McDonald, 113 CLR 529. The first passage is at

page 533 in the judgment of Sir Garfield Barwick.

His Honour says, having referred to fraud, surprise

and subornation, just beneath His Honour's name in

the right hand margin, at point 2:

Nor, in my opinion, does that circumstance

lessen in any respect the stringency of any of
the rules which apply to the grant of a new

trial upon the ground of the discovery of

fresh evidence. The fresh evidence, though it

suggests fraud, surprise or subornation of

Quade(2) 24 28/8/91

witnesses, must yet fully satisfy all the

criteria laid down with respect to fresh

evidence warranting a new trial although it

may be that, in some cases, the tendency of

the evidence to show fraud may make it more

likely to be conclusive.

That is a recognition of what Your Honour

Justice Deane put to me earlier, about the example

of locking up a witness. If a party goes to the

extreme length of locking up a witness, it is

fairly likely that a court is going to be able to

conclude, without much difficulty, that the

evidence of that witness was at least regarded by

that party as crucial, and therefore that it is
crucial. But it still has to be established; it

simply goes to the probability of it.

In my opinion, it would be a misreading of

Lord Buckmaster's speech in Hip Foong Hong v

H. Neotia & Co (2) to conclude otherwise.

But if the fresh evidence does not

satisfy all these requirements so that a new

trial could not be ordered on the basis of the

discovery of fresh evidence, but does tend to

establish that the verdict was obtained by

fraud -

and we stress those words. That implies causation,

"the verdict was obtained by fraud" -

or by surprise or that there has been

subornation of witnesses, the Court may grant

a new trial upon a motion therefor, though a

separate proceeding is clearly the preferable

course, if the Court itself, on a trial of

such issues, finds the fact of the fraud, the

surprise or the subornation of witnesses, as

the case may be, to be proved to its

reasonable satisfaction ..... It is not

necessary in that event that the evidence of

the fraud, the surprise or the subornation,
though it should be "fresh", should be

evidence which would be admissible on the

issues between the parties in the action; or

that it should be found to be probably

conclusive of those issues. The Court's

conclusion upon the fresh evidence before it

that the verdict was obtained by fraud ..... is

sufficient to justify -

so the causation comes in the requirement that it

be obtained by fraud.	Then it goes on to the
general matters:

Quade(2) 25 28/8/91

Whether or not the Court does so must finally

depend on the Court's view as to whether or

not the interests of justice, either

particularly in relation to the parties or

generally in relation to the administration of

justice, require such a course.

I do not think I need to take Your Honours to the

other judgments in that case. The case, in my

respectful submission, clearly shows that one has

to establish causation as one of the matters.

I will not spend time on the three middle

cases. McHarg v Woods Radio is another case of an

action to set aside. Cabassi v Vila is merely some

dicta of the Court which certainly recognize that

causation is an element. Hip Foong Hong is the
case which does not refer to causation and which

the later cases say really should not be

misconstrued and read in that way. I will show

Your Honours the passage. It is reported in

(1918) AC 888, and the passage which is said to be

misunderstood both by this Court and by

Mr Justice Merling is the passage on the very last

page of the report, page 894. At about point 3 in

the advice of the judicial committee this passage

appears against the words "present application" in

the left-hand margin:

In all applications for a new trial the

fundamental ground must be that there has been

a miscarriage of justice.

That puts it, we would respectfully submit, rather

more generally than the other cases have done.

If no charge of fraud or surprise is brought

forward, it is not sufficient to show that

there was further evidence that could have

been adduced to support the claim of the

losing parties; the applicant must go further

and show that the evidence was of such a

character that it would, so far as can be

foreseen, have formed a determining factor in
the result.

So causation is an element. He does not put it as

highly as this Court subsequently put it in

Wollongong Corporation, or in Holmes.

Such considerations do not apply to questions of surprise and still less to questions of

fraud. A judgment that is tainted and

affected by fraudulent conduct is tainted

throughout, and the whole must fail; but in

the present case their Lordships are unable to

say that such a case has been established.

Quade(2) 26 28/8/91

What this Court in McDonald v McDonald and

Mr Justice Morling said, is that you really have to

read the words "tainted and affected" as meaning

"caused by". In other words, the result is caused

by it. It is not tainted and affected if it is

merely on an issue which did not cause or affect

the result, and that is the passage which is said
to be taken out of context. The case, of course,

was one where it was very clear that the result was

affected.

Now, the conclusion on those cases then, in

paragraph 9 of my submissions, is that these cases

suggest that there is a necessity to establish

causation in the fraud and perjury cases, and one

does not get there by merely showing that it might

have affected the result.

The next section is simply the question of

what the Court should do faced with that collection

of authority. What the decision of the Full Court

does is to say that, in a case of defective

discovery, if it might have affected the result

that is sufficient.

One must bear in mind that discovery, while a

very important obligation and while an obligation,

a breach of which can give rise to serious

consequences, is nevertheless something which can

vary in its significance. Without wishing to

canvass the issues in this case and go into matters

which are not involved, one can well imagine, in

many cases where one has large corporations

litigating and where documents which are required

to be produced are not documents which are going to

be in the file related to the matter, that there

are going to be great difficulties with discovery.

This case provides a good example. Normally a

party gives discovery by getting out its file in

relation to the subject-matter; it certainly

should inquire further and consider whether other

matters are relevant and discover those matters.

But where one has a case like this where the

general considerations arising in a particular
matter may be scattered throughout a large

organization, it is obvious - again, without going

into the facts here - that there can be great

difficulties, and obviously have been:
difficulties in locating documents, difficulties in

determining relevance and matters of that sort.

Here, there were - if this decision stands,

certainly so far as my client is concerned, every

foreign currency loan case in which it has

succeeded would need to be retried. The file of

"G" documents has obviously grown as further

Quade(2) 27 28/8/91

discoveries have been made and as more actions have

been tried, and that was the problem in this case.

This is not a case, I should say, in which no

documents in that category were discovered. There

were some discovered and there were some discovered

at the end of the trial. The question is, which

this Court will not hopefully be going into today,

the extent to which those documents were matters

which would be likely to have affected the result.

TOOHEY J: 

Mr Bennett, while I share your hope that we are

not drawn into these other documents, it may be
necessary though to make the point, if it is a

valid one, that these statements by
Mr Justice Burchett really have to be taken in

context. After all, the documents, as I read the

judgment, were thought to be relevant as bearing

upon a question of credit as between one of the

plaintiffs and some of the Bank officers. In that

sort of situation it may be difficult to postulate

the test any higher than might have carried the day

because the point that is being made is that armed

with those documents the plaintiff's counsel could

have cross-examined the bank officers and their

statements might have been less likely to have been

believed by reason of the existence of those

documents.  Now, I wonder is His Honour saying

anything more than that.  Is he really seeking to

lay down some general test or is he simply dealing
with the matter in the context of the facts?

MR BENNETT: 

Your Honour, in our respectful submission, he

is laying down the test and that becomes apparent
from some of the documents His Honour refers to.

Let us give this illustration and, really, it is

perhaps to my learned friend to go into it too much

when the understanding is that we are not going to

unless we have to. But may I just point this out:

what is said is some of these documents,

particularly the 1982 documents, say things like

"We ought to aggressively market foreign currency

loans", and that had that been put to the Bank

officers who said, "In accordance with our normal

practice we did not aggressively market, we simply

explained certain matters", they would have been

less likely to be believed. But, of course, the

documents are not one-sided. If one goes, for

example, to page 1563 of the judgment, Your Honours

see the statement at line 10, in one of the later

documents and, actually, a document much closer in

time to what actually occurred:

F/C Loans and simulated loans should not be aggressively marketed. Rather they should

be used to meet the genuine needs of

customers/non-customers -

Quade(2) 28 28/8/91

and so on. What is said about that is that - we

are hoist either way. If the document says they

should be aggressively market that means our

witnesses should not be believed when they say they

did not. If the document says they should not be

aggressively marketed that shows we were doing

something wrong in allowing them to take it out at

all and we are, sort of, charged both ways.

TOOHEY J:  I see that difficulty but is His Honour saying

anything more than in the circumstances of this

case, where the plaintiffs' cause of action

depended almost entirely upon a conversation which
one of the plaintiffs had with bank officers, the

documents not discovered but bearing upon the

Bank's practices might have led to a different view

by the trial judge of the credibility of the

witnesses and therefore have affected a result?

MR BENNETT:  Your Honour, he must be saying that because of the passage I just took Your Honour to.

TOOHEY J: But is he saying any more than that?

MR BENNETT:  Your Honour, that is laying down a test. That

is saying: having said, "Here is a document

internal to someone in the top saying, 'We ought to

be aggressively marketing these'" - none of these

are directions to the relevant officers, I should

say, or circular instructions, they are discussions

between high officers of the Bank about what ought

to happen in the future, policy documents. But one

finds documents saying, "We ought to aggressively

market loans". Therefore the judge says, "If

that's shown to this officer he might have said,

'Well, maybe I was doing that', but, of course, one

has to weigh against that that there is a more

recent document saying it shouldn't be aggressively

marketed. "

So, what it comes down to is the judge is say,

"Well, it may have affected the result if used
forensically in a particular way".	And if that is

all he is saying it is establishing, we would

respectfully submit, a very low level of test.

But there is another problem there and that is that in so far as the document goes solely to

credit it is not discoverable. That is Thorpe v

the Chief Constable, (1989) 1 WLR 665 - I will not

take Your Honours to it.

TOOHEY J: But that is not the question here, is it? It is

not suggested that the documents were not

discoverable?

Quade(2) 29 28/8/91

MR BENNETT:  We do not admit that every one of the documents

was clearly discoverable. That admission is not

made. What we say is we discovered a number of

documents, some of which clearly were, some of

which may not have been discoverable;	we produced
them all and then the result followed.	But in so

far as the court relies on credit as a matter, that

simply does not make the document discoverable.

DEANE J: But the emphasis is on "solely to credit", is it

not? I mean, there is plenty of authority for the

proposition that if a document opens up a line of

inquiry or leads to a possible source of evidence,

and so on, which means that when a document goes to

credit in relation to the very transactions or kind
of transactions that are involved, it is not going
to be non-discoverable on the basis that it goes to
credit. All you can get it non-discoverable on is

the basis, it goes to credit and is otherwise

completely irrelevant.	You could not say that of
any of these documents.

MR BENNETT:  No. Your Honour, certainly - but what is said

against us is: here is a document which may be

relevant on issue X. It would not have had much

effect on issue X, but it would also have enabled

cross-examination as to credit to take place which

might have made a difference. Now, that is, we

would respectfully submit, not an appropriate way

to apply any test, to say, "Although it is not

discoverable for that purpose, because it is

discoverable for another purpose but could have

been used for that purpose, which might have

affected the result, we get there".	Your Honour,
that is a long way short of it.

As I say, if I were, at this stage of the

case, going through the documents, I would
obviously make submissions and my friend would no

doubt make contrary submissions, as to their

extreme relevance or irrelevance. But we simply

point out that the test being applied is clearly a

"might have affected" test. It is said three times

in the judgment - the three passages I have taken

Your Honours to; and, it must be the test being applied when one looks at passages like 1563.

Justice Einfeld, of course, puts it on another

basis.	He says it would have entitled the
applicant to amend.	He would have seen that on

discovery and realized he had another cause of

action, which is, we would submit, clearly not an

appropriate basis.

Now, I have referred at the end of my

submissions to a number of possible fall-back

positions. If the Court takes the view that a rule

Quade(2) 30 28/8/91

should be laid down, or a set of guiding principles

laid down, in relation to what is to occur where

there has been non-discovery, we have suggested a

number of ways it can be put. In doing this, one

must bear in mind the range of different situations

in which defective discovery occurs.

There is, at the one extreme, the

non-discovery of the rescinding deed, where one is

suing on the deed. That is the extreme at one end.

At the other end, one has documents which, in a

large organization, are simply missed and might

have only the most peripheral relevance, although

technically be discoverable.	And one has
situations in between.	And any rule which is being

laid down, particularly one which is related to

questions of justice, has to take that into

account.

One of the problems in this case is that the

court was not really able to go into the various questions. Because the matter was dealt with on appeal rather than by a fresh hearing, which would

clearly have been more appropriate, no one really

had the opportunity to start calling evidence about

why discovery took place in a particular way or how

the documents were missed or how serious the

omission was. Matters of that sort were simply

dealt with in a very general way, by some

statements from the bar table - which I am not

going to repeat - and by assumptions.

In a sense, each party is at fault for what

occurred. We took the view, no doubt, that the

test was the Wollongong Corporation v Cowan test

and argued the case on that basis, in which

questions of degree of fault might have been

irrelevant. My learned friend's clients took the

other position. If the Court takes some

intermediate position which involves that being

looked at, that would obviously involve some sort

of fresh evidence.

I have given on page 4 a number of

intermediate possibilities. One is to say, you

apply Wollongong Corporation to accidental non-
discovery and the fraud test to deliberate non-

discovery, which seems to be the approach the court

took in Boswell v Coaks, where it seems to have

been the suggestion, although the judgment is not

as clear as it might be.

Secondly, one might say, in either or both

sets of circumstances, that if the Court considers

that on balance the result would have been

affected. I have referred to a case which I do not

want to take Your Honours to in detail but I will

Quade(2) 31 28/8/91

just take Your Honours to one sentence of, the case

of David Securities v Commonwealth Bank

of Australia. That was decided before this case

and it is reported in - - -

MASON J: We have 93 ALR 271, Mr Bennett,

MR BENNETT:	The passage in that, Your Honour, is at page - I will come back to it when my learned junior has
found the page, Your Honour, in the Australian Law
Reports.

There is a very short passage in that case

where they, in effect, apply an on balance test.

That is, of course, the same as the test applied in the fraud cases, and that is a second approach.

A third approach is to say "Well, it is

ultimately a question of miscarriage of justice;

it is ultimately a question of balancing, and one

balances the degree of the culpability of the party who failed to give full discovery and the extent of the possibility the result would have been

different and one weighs the two." If one is very

strong the other can be weaker. If one has

something as extreme as locking up a witness you do

not need all that much satisfaction as to a

different result. If you have the accidental

omission of a document on discovery you would want

to be pretty certain the result would have been

different. One weighs the two rather in the way

that in setting aside a default judgment one weighs

defence on the merits and explanation for the

delay. One can be weaker if the other is stronger.

The passage is at 93 ALR page 293. It is at

page 23 in the Federal Court Reports. It is just

one short paragraph at line 10, where Their Honours

say:

(For the sake of completeness, we note

that, at the commencement of argument on the

appeal, senior counsel for the appellants

sought to tender certain documents produced by

the bank. It appeared that the documents were
arguably relevant but, because discovery had

proceeded in an informal way, the documents

had not been discovered. The bank did not

oppose the reception of the documents into
evidence for the purposes of the appeal.
Although the trial judge did not have them, we

are not persuaded that these documents, of

themselves, or taken in conjunction with the

evidence before His Honour, establish that the

bank should be held liable for the losses

suffered by the appellants.)

Quade(2) 32 28/8/91

So the test they seemed to have applied,

admittedly in a case where discovery was informal,
was whether the documents established that the

result would have been a different result. In

other words, it was the second of the three

intermediate tests.

We have asked that the Court in delivering

judgment on the points of law which have been

argued, and this is an application to the Court by

consent, although, of course, it is a matter for
the Court, deliver judgment and then list the

matter for mention for argument as to the further

conduct of the appeal. That will enable

submissions to be made at that time as to what

ought to occur as to whether there should be a

remission or whether the Court can deal with the
matter. It would depend, of course, on what
decision the Court came to. If Your Honours are
not prepared to indicate that that is the

appropriate course, it would be necessary for me to

address Your Honours on the various orders which
would have to be made on various possibilities, but

it appeared to us that it would be - - -

MASON CJ:  It is an acceptable course as far as the Court is

concerned, Mr Bennett.

MR BENNETT:  I am indebted to Your Honour for that.

Your Honour, the other matter which I simply remind

Your Honours of is this: that this was a case which was ultimately decided on the basis that there was

a full disclosure of the risk to the relevant

applicants and the documents which are subsequently

discovered are very much background documents and

it is in that context that the decisions were made,

but again I do not propose to address Your Honours

on the documents. It is not necessary for purpose

of the general legal submissions, But I say that

for the purpose of rebutting the suggestion that

this is merely a specific decision on a particular
overall circumstance.	We submit that

His Honour Mr Justice Burchett did lay down a test,

three times in his judgment, and that that test is,

on any view of it, an inappropriate test to be

applied. May it please the Court.

MASON CJ: Yes, thank you, Mr Bennett. Yes, Mr Einfeld.

MR EINFELD:  Yes, may it please the Court. May we hand up

nine copies of our written outline, Your Honours.

MASON CJ: Thank you.

MR EINFELD:  And can I make two apologies: firstly, I note

that in the course of the document are some

handwritten alterations that were in fact retyped,

Quade(2) 33 28/8/91

but for some reason the document that has found its

way into the copies that were handed up still has

the handwritten alterations and I apologize for

that.

MASON CJ: Yes, Mr Einfeld.

MR EINFELD:  If it please the Court. Your Honours, there

are two preliminary matters, I suppose, that arise

from the written outline following what my learned

friend has just said. The first is that, as

Your Honours will see, we have proceeded on the

footing that there is no dispute but that all of

the documents obtained by the respondents after

judgment were in fact discoverable. That so much

is recorded by His Honour Mr Justice Burchett in

his judgment at page 1567 of the appeal book and we
have not understood the contrary. At line 1,

His Honour records that:

It was not disputed that the bank had failed

in its duty to make proper discovery,

fulfillment of which would have involved the

disclosure of these documents -

being the subject so-called "G" documents.

The second matter is that we have also asked

the Court to take into account the fact that no
evidence was put on at the appeal before the

Full Court by way of explanation of the failure on

the Bank's part to make discovery. Now,

Your Honours, we have invited this Court to draw

conclusions, or at least - -· -

MASON CJ:  Why should we make findings when they have not

been made by the Court of Appeal?

MR EINFELD: Well, Your Honour, we do not ask the Court to

find as a positive fact that, for example, the

documents were not discovered because of some Bank
officer's deliberate decision not to do so.	What

we ask the Court to infer is that at the very

least, absent any explanation, the inference at the

least available is that they were not discovered by

virtue of a careless absence of consideration of

the relevant discoverable material.

Now, Your Honours, in our submission, it would have been appropriate had there been some

explanation that the failure to discover these

documents was merely, as it were, accidental or

something of the kind, one would have expected to

have it before the Full Court and it was never

before the Full Court.

Quade(2) 34 28/8/91

Your Honours, we raise that matter only to

this extent because it really illustrates the

proposition that one cannot apply, as has been
suggested, simply, as it were, an Orr v Holmes test

across the board. What we have sought to indicate

is that in circumstances where the question, for

example, of how it was that documents came not to

be discovered when they plainly ought to have been,

one simply cannot say the application for the new

trial must then demonstrate that the result would
have been different.

His Honour Mr Justice Deane suggested that

there may be a fallacy in asking the very question
why need there be any definitive test in such a

case as this and, indeed, I think Mr Justice Toohey

suggested that, on one view, Mr Justice Burchett

had never purported to lay down one. Your Honours,

we would, with respect, in one sense, embrace both

of those considerations. It is our submission that

in a case such as this which is not typical of the

fresh evidence cases exemplified by Orr v Holmes,

or Cowan's case, or Vickery, or the others, that it

is not simply possible to lay down, as it were, a

definitive test that applies across the board and

caught up with that - - -

DAWSON J: Are you really saying anything more than that

this was not a regularly conducted trial and that

takes it outside?

MR EINFELD: Certainly we make that submission, Your Honour.

In the broad term, we say - - -

DAWSON J:  In other words, you are saying it really is not a

fresh evidence case.

MR EINFELD:	It is a case of fresh evidence but to which the ordinary Orr v Holmes principles do not apply for a number of reasons. The first is, for public policy
reasons because there is a conflicting public
policy consideration here that was not present in any of the other cases, namely, compliance with court procedures, pre-trial requirements, court orders and the like. Secondly, because the trial process failed and, therefore, the process was
irregular in the sense Your Honour is indicating,
and thirdly -

TOOHEY J:  I think you ought to be - I am sorry, just finish

what you are saying.

MR EINFELD: Thirdly, because of the overriding

consideration, that even in Orr v Holmes, and in

Mccann v Parsons, for example, this Court indicated

that the overriding test must always be the need to

do justice between the parties.

Quade(2) 35 28/8/91

DAWSON J:  The justice here is that your client says, "Well,

I was entitled to a fair trial. I didn't get it.

A fair trial isn't confined to what happens in the court room in a civil trial. It goes beyond that

and I just didn't get one".

MR EINFELD:  Yes. We go - as it were, our high point

is that because we did not get a fair trial, one

applies, if one is to apply any kind of test at

all, the same kind of consideration as this Court

did in Stead v State Government Insurance

Commission which, true it was, a natural justice

case. None the less, the Court came to the view

that where a party is denied a fair trial, the

appropriate course is to send the matter back for a

new trial unless it can be shown that had the

appropriate procedures been followed, a different

result would not have ensued.

DAWSON J: But, you take an analogy with the criminal law.

If the Crown does not produce to the defence a statement of a witness who exists and the trial

proceeds on the basis that he does, well then that

is not a fair trial. If it is a miscarriage of

justice there will be a new trial.

MR EINFELD: Yes, Your Honour.

TOOHEY J: Could I just say this to you, Mr Einfeld, apropos

the discussion that has taken place. I can see the

force of the submission that a failure to give

adequate discovery might fall into quite a

different category from traditional fresh evidence

cases. At the same time, I think one has to be a

bit careful, because discovery has become something

of a nightmare in the conduct of litigation and,

indeed, courts more and more are reluctant to order

further and better discovery simply because, in

commercial cases of some magnitude, the process can

be endless.	So that the mere failure to give
discovery of documents, of itself, might not	necessarily abort the regular process of the
courts.

MR EINFELD: If it were an irrelevant document - - -

TOOHEY J: Well, if it were irrelevant it would not be

discoverable.

MR EINFELD:  Or if it were marginally relevant or

peripherally.

TOOHEY J:	Or marginally, yes.
MR EINFELD:	Your Honour, it is just in that kind of case

that the courts have come to emphasize the need for

care and greater scrutiny in the giving of

Quade(2) 36 28/8/91

discovery. Of course, we accept entirely what

Your Honour says, but the need for greater care
than may hitherto have been the case, and certainly

may have been the case in other types of cases,

where one is dealing with complex commercial

litigation, is all the more so because, today, with
the complexity of corporate litigation, cases

involving corporate crime and the like, which can

only be expected to have an even wider impact on

the court system, the trial system cannot
successfully operate unless parties and the court
expect, and are entitled to expect, that those who

are preparing, for example, documents of discovery,

verified and certified lists of documents, do so

with care and accuracy. Otherwise, the cases have

said, and the sentiment has been reinforced in
recent times in some cases we just want to go to

shortly, the system cannot successfully resolve

litigation between the parties.

Whilst one is always cognizant of the fact

that, particularly in cases such as this, there is

an abundance of documentation, so does the burden increase on those who proffer it on behalf of one

party or the other, in terms of verified discovery
procedures, to ensure that their discovery is

accurate and adequate.

Your Honour, that, I suppose, in one sense,

may be said to be mere words. In this case, for

example, what were omitted were not mere peripheral

documents but documents which were central, not

only to this case, but to the range or series of

foreign currency type cases which have

proliferated, as my learned friend was suggesting,

in recent years. This is a case in which the

documents that were omitted during the discovery

process went not just to matters of cross-

examination of witnesses. May I take the example

I think Your Honour was discussing with my learned

friend.

The trial judge found that he ought prefer the

evidence of Bank witnesses as to the nature of

representations made, as was suggested by the

applicant, the safety of borrowing in a foreign

currency, the lack of volatility of the foreign

currency. His Honour found that there was no

reason for those Bank officers to be, as it were,

promoting to this borrower the taking out by him

from the Bank of a foreign currency loan.

Now, instead one finds that in the documents

not discovered prior to the judgment but only

after, as His Honour Mr Justice Burchett records,

one finds a series of documents which say firstly

the Bank ought embark upon an active marketing

Quade(2) 37 28/8/91

policy of just these loans to small businessmen,

not only because we want to corner part of the

market, but because banks generally have liquidity

problems in terms of their onshore borrowings;

there are tax advantages from borrowing offshore

and the like.

It is not just a question of putting such a

document to a comparatively junior bank officer, a

branch officer, for example, and asking him some

questions about it. The documents are admissible

as business records and they stand - one might well

ask questions; one might be required to ask

questions - but the documents stand themselves as

evidence of the fact that the Bank was actively

marketing these kinds of loans to these kinds of

customers.

DAWSON J:  And it is accepted that that is evidence which is

relevant in its own right, is it?

MR EINFELD:  It must be, with respect. And more to the

point, there is an abundance of Bank

documentation -

DEANE J: But where does all this lead? I mean, you have

agreed we should consider what the test is.

Justice Toohey has asked you a question aimed at

elucidating whether one has a general test for any

case of non-discovery, and now you are taking us

right into the facts which, on the agreement

between counsel, Mr Bennett has carefully avoided

doing. As I understand your agreement, we are

concerned to identify whether there is a general

appropriate test or whether there is not.

MR EINFELD: With respect, to take Your Honour's point, what I was about to conclude that part of my argument by

saying was - and again, merely by way of

illustration of the general point I was attempting

to make - was that some of the documents, for

example, contrary to what His Honour found at the
end of the day, that the Bank officers would have

no motive to make certain representations as to the

safety of foreign currency borrowing and the like,
that the documents are replete with references to
the fact that the Bank was aware that Australian

dollar foreign currency exchange rates, for

example, were highly volatile.

Now, my point in going to those matters is

that this is illustrative of the kind of case where
important or central documents are omitted. That

may have to be treated quite differently from the case where peripheral documents may not have been

omitted. One does not doubt that if all that has

happened is that there is some general residual or

Quade(2) 38 28/8/91

peripheral documents that have been omitted in a

process of discovery, as may happen from time to

time, that the demands of justice do not require a

new trial.

But where one gets beyond that, and where one

gets beyond it in a circumstance where the reason that the documents are not in evidence is because

one of the parties has failed to produce a document
which is, on its face, adverse to it - maybe there

are other documents that have not been produced

that are favourable to it - but where a party fails

to produce as he is required by court order or

court rules to produce documents which are adverse

to it which might affect the result in terms, (a)

of its use during the course of the trial itself;
or (b), perhaps even more importantly, by depriving
a party of the opportunity to pursue the train of

inquiry that that document might otherwise have led

him to embark upon, then the circumstance must be,

in our respectful submission, that with a failure

of that part of the trial process, the applicant

for new trial ought have his fair trial unless the

respondent to the application, the successful
party, can establish it would have made no

difference.

DEANE J:  Is the position this: we start on the assumption

which has been found in your favour that there is

an unexplained failure to produce on discovery

relevant documents which might have affected the
result?

MR EINFELD:	Yes, Your Honour.
DEANE J:	Now, the query is whether on the basis of that

position with no more the court should have ordered

a new trial. If it should not, what other

questions should it have directed its mind to? If

it should, well then, obviously that suffices. I

would have thought at the next stage there could be

a question, if it is going to quash the decision

below, what is the correct method of proceeding

from there? Does it simply say, "Start again", or

does it say, "Well, there is the trial judge who

heard all the evidence, who knows everything, let us send it back to him and say whether there is a

real prospect that it would affect the result"?

MR EINFELD: Yes, Your Honour.

DEANE J: But we are not concerned with that second thing at

this stage, as I gather it.

MR EINFELD:  No, that is so, although could I just proffer -

because Your Honour invited my learned friend to

comment upon that last matter that Your Honour

Quade(2) 39 28/8/91

raised, we would see there as being some difficulty

in remitting the matter to the trial judge. The

problem is that the trial judge makes an assessment

of the witnesses with all of the usual advantages and then a very long time afterwards is asked t'o,

as it were, reassess the position assuming you had

had the following documents. One would be entitled

to regard that as being a fairly awkward task, with

respect.

DEANE J:  I see the force of that.

MR EINFELD:  So that there is a difficult about that. I do

not want to say any more about it at this stage but

there is just a difficulty about that.

DEANE J:  But it may be that the difficulty of that could be

influenced by whether or not one thought that the

appropriate procedure in a case such as this was to

apply to the trial judge as soon as the position

becomes clear which is a long time ago.

MR EINFELD:  Yes, save that in this case, Your Honour, there

were other grounds of appeal before the Full Court documents were produced which, I think as I recall
so that there was on foot an appeal before the Full

it, was after the appeal commenced. This was out

of his grounds of appeal. I may stand to be

corrected on that but certainly there was a full

appeal on other matters.

Now, Your Honours, we respectfully submit that

if it is not appropriate to adopt, in such a case

as this on the assumptions to which His Honour

Mr Justice Deane just referred, to apply the kind

of test that we are suggesting that the matter

ought go back unless the other party demonstrates

that the documents would have made no difference,

there having been an absence of a fair trial then, we respectfully submit, the appropriate measure of	consideration was that indicated by the members of	the Full Court that it is enough if the
unsuccessful party were deprived of a fair prospect of success at the trial, or if the documents might
have made a sufficient difference to the trial
judge.

One of the problems you see, Your Honours,

arising from an absence of compliance with the

pre-trial procedures, particularly discovery and
particularly documents of this kind - is the matter
adverted to, I think by Mr Justice Einfeld who

suggested that one does not know that the whole

atmosphere of the trial may have been completely

different - instead of there being one or two

documents, none pre-dating in any particular

Quade(2) 40 28/8/91

relevant way the commencement of the relationship

between these parties, one cannot really

hypothesize as to the extent to which these

documents may have led to others, may have led, for

example, to interrogatories being administered

which would have eked out evidence or material able

to be tendered against the Bank from more senior

officers than those whom the Bank chose to call at

the trial. In that kind of circumstance, in our submission, one cannot simply apply Orr v Holmes type tests.

Your Honours, it is our submission that the

inapplicability of those kinds of tests is itself a

product of public policy considerations. In

Commissioner of Government Train and Omnibus

Services (NSW) v Vickery, to which my learned

friend took Your Honours, it is made clear enough,

if it is not otherwise, with respect, that the
fresh evidence principles are founded largely on

policy and in particular in the interests of

finality of litigation. Without taking

Your Honours to it, so much is made clear by the

passage at page 646 of the judgment where the Full

Court says just that:

settled rule, founded largely on policy,

against lightly disturbing verdicts because of

the discovery of further information.

Now, Your Honours, here there exists a

tension, as we describe it, with other public

policy considerations. Firstly is that to which

Mr Justice Burchett adverted and that was the

public policy of the court ensuring compliance with

its orders. There was, in this case, an order for

discovery and, as we have said, an unexplained

explanation as to non-compliance with it.

Secondly, and perhaps quite separately, is the public policy in ascertaining the truth, so that

the dispute between the parties can be properly

determined by the Court and justice done between

them. Now, may I just take Your Honours very

briefly to two passages in the English cases,

Riddick v Thames Board Mills Ltd, (1977) 1 QB 881

and then to Home Office v Harman. In Riddick -

both of these were defamation cases and both, in

measure, dealt with questions of use of documents

following discovery, but relevantly to the public
policy considerations, can I refer Your Honours

firstly to page 895 of the report of Riddick in the

judgment of Lord Denning where at about point 4

His Honour makes reference to particular documents

being disclosed in one action, the question being

the entitlement of the parties to use them for

Quade(2) 41 28/8/91

later proceedings and whether that amounted to an

abuse or contempt, and then at letter E:

Discovery of documents is a most valuable aid in the doing of justice. The court orders

the parties to a suit - both of them - to

disclose on oath all documents in their

possession or power relating to the matters in

issue in the action. Many litigants feel that

this is unfair. I have often known a party -

faced with such an order - saying to his

solicitor: "Need I disclose this document to

the other side? It will damage our case

greatly if they get to know it." The

solicitor's answer is, and must be: "Yes, you must disclose it, however much it damages your

case." Again I have known a party to say to

his solicitor:  "But these are my own

confidential papers - my own personal diary -

our own inter-departmental memoranda. Must I

disclose them?"	The answer of the solicitor
again is "Yes.	You must disclose them.

Confidential information has no privilege from

disclosure."

MASON CJ: Well, that does not seem to be particularly

illuminating, Mr Einfeld.

MR EINFELD:  No, the next sentence, Your Honour.

The reason for compelling discovery of

documents in this way lies in the public

interest in discovering the truth so that

justice may be done between the parties. That

public interest is to be put into the scales

against the public interest -

relevant in that case -

in preserving privacy and protecting

confidential information.

The balance comes down in the ordinary way in

favour of the public interest of discovering

the truth, i.e., in making full disclosure.

And then he goes on:

And in Home Office v Harman there is a reflection

of similar observation. I will not read much of

it, Your Honours. It is, with respect, fairly

clear.

MASON CJ: Well, does it say any more than was said in

Riddick?

MR EINFELD:  No, Your Honour.

Quade(2) 42 28/8/91

MASON CJ: Well, is it necessary to read it then?

MR EINFELD: Perhaps not, Your Honour. Perhaps if I could

just read, Your Honour, two sentences in the speech

of Lord Scarman in Home Office v Harman,

(1983) 1 AC 280, where at 315 about point 8

His Lordship says:

We would not underrate the importance in

our adversarial system of full discovery of

documents. It prevents surprise, encourages

settlement, and narrows issues. Equally, one

must recognize the invasion of privacy which

it entails.

And he goes on. Now what I wanted to add to what I

had said earlier deriving from that passage,

Your Honour, is that one of the considerations

which ought not perhaps be overlooked in a case

such as this, is that discovery of these documents

prior to trial may well, one can only surmise I

suppose, have had an impact on the settlement

prospects of the litigation. Now again, in the

context of suggesting that the trial process

failed, or the pre-trial process failed, that is

not a matter, with respect, which can entirely be

put to one side.

May we just then take Your Honours briefly to

a judgment of Your Honour the Chief Justice in

Australian National Airlines v Commonwealth of

Australia which, so far as we are aware, is

reported only in (1975) 6 ALR 433. Again, a short
passage, but one that demonstrates the public
policy considerations which inure from the

fulfilment of a party's obligations upon discovery.

At page 443, at line 22, His Honour said:

I had two principal considerations in mind.

conception of the administration of justice The first is that it is central to our	that documents relevant and material to the
issues arising in litigation should not be withheld from the parties and that each party
enjoys as an incident of his right to a fair
trial the right to present as part of his case all the relevant and material evidence which supports or tends to support that case. The existence of Crown privilege as an
acknowledged exception should not be seen as a
reason for diminishing the force or the
importance of this conception of the
administration of justice -

And if I could commence at the next paragraph:

Quade(2) 43 28/8/91

The second consideration, closely

connected with the first, is the need to

maintain public confidence in the

administration of justice. The withholding

from parties of relevant and material

documents, unless justified by the strongest

considerations of public interest, is apt to
undermine public confidence in the judicial

process.

Your Honours, what we say is that there is

obviously the competing public policy consideration

of finality of litigation, and that cannot be

gainsaid,but it has to be weighed against, if it is

not indeed predicated upon, the public interest and
the public policy of requiring compliance with the

Court's procedures and orders, the need for pre-

trial discovery of a fulsome kind so far as

concerns important documentation so that the truth

is the matter that can be eked out from the

adversarial contest between the parties and the

perception which gives rise to a possible
undermining of public confidence in the judicial
process if disputes are determined otherwise than
on the basis of a fair production of documents by

both parties.

We have given Your Honours some references,

and I do not propose to take you to them in detail,

in paragraph 8 of our outline, to the

responsibility of parties in giving discovery in

particular in complex commercial cases. May I just

draw Your Honours' attention particularly to a

passage in the judgment of the Master of the Rolls

in the decision of Davies v Eli Lilly & Co (C.A.J,

(1987) 1 WLR 428 at page 431. What is there said

may be thought to be merely a reflection of trite

or obvious principle but, with respect, it brings

into focus the problem that respondents such as

those in the present proceedings below would

otherwise face. In the last paragraph at about

point 8, His Lordship said:  Let me emphasize that the plaintiffs'

right to discovery of all relevant documents,

saving all just exceptions, is not in issue.

This right is peculiar to the common law

jurisdictions. In plain language, litigation

in this country is conducted "cards face up on

the table".

Some people might regard this as incomprehensible

and ask "why" et cetera -

The answer, of course, is that litigation is

not a war or even a game. It is designed to

do real justice between opposing parties and,

Quade(2) 44 28/8/91

if the court does not have all the relevant information, it cannot achieve this object.

There have to be safeguards in relation to

confidentiality and so on.

That, with respect, is another, perhaps,

reflection of the same public policy consideration

that requires this Court, in our respectful

submission, to look with a particular view to cases

like Orr v Holmes and Wollongong Corporation v

Cowan. They do, as has already been suggested,

involve a quite different factual matrix, factual
context, than the present cases. Unlike the Orr v

Holmes context, this is not a case where evidence

through no fault of either party, through entire

accident or perhaps through impossibility, was not

available, absent the exercise of due diligence,

during the course of the trial, so that, as it

were, when the matter comes to appeal or for the

application of a new trial to be considered, it can

be said that there has been a failing of the court

process by reason of the conduct of one of the two

parties.

That, of itself, marks this case out, and this

kind of case out, as much different from the Orr v

Holmes category of cases.

The other consideration which, as I have said

earlier, suggests that the stringent rule for which

my learned friend contends, that one has to have a

circumstance of almost certain reversal of the

result below before one in a case such as this

could send the matter back for trial, is that even

in the cases to which my learned friend adverted there are exceptional circumstances or provision

for which, and in which, the so-called rules are

said not to operate.

One has been already adverted to, and that is

the suggestion that where the trial was not

conducted regularly then the ordinary principles

would not apply. My learned friend suggests that

the word "trial" ought be confined to the period of time between the commencement of opening addresses, I suppose, and the conclusion of final addresses.

In our respectful submission, particularly with the advent of complex commercial cases over the last

20 or 30 years and the prospect of their becoming

even more prevalent, even if that were thought to

be the restriction placed upon the words of not today regard the expression in the same way.

In our respectful submission, one would have to

regard irregularity of the trial as of sufficient

ambit to embrace the necessary pretrial procedures

Quade(2) 45 28/8/91

which, after all, are designed to enhance the

speedy resolution of the matter in dispute.

Secondly, can I just take Your Honours briefly

back to Orr v Holmes, 76 CLR 632, and, in
particular, to the passage read by my learned

friend from the judgment of the Chief Justice, and

just remind Your Honours that at 635 at about

point 9, the Chief Justice apparently did not

regard the test as quite as stringent as did

Mr Justice Dixon. In the last paragraph:

Further, before a new trial is granted on

the ground of discovery of fresh evidence it

must be shown at least that the evidence to be

admitted is "of such importance as very

probably to influence the decision".

With respect, it is our submission, that falls

short of a suggestion that a probable influence

upon the decision - - -

MASON CJ:	What page was that and whereabouts on the page?
MR EINFELD:	I am sorry, page 635 of the report at point 9,

Your Honour, the last paragraph.

MR EINFELD:  Mr Justice Dixon had suggested, at page 642,

that the applicant would have to establish, after

passing the due diligence limb of the test, as it

were, that the new evidence would be:

well nigh decisive of the state of facts -

or that -

it places such a different complexion upon the

case that a reversal of the former result

ought certainly to ensue.

We submit that Mr Justice Latham is embracing a

slightly lesser test than that.

We also point out that His Honour

Mr Justice Dixon, at page 645 at about point 5

concludes that:

the failure to discover the evidence must be

laid at the defendants' door -

and that is a consequence of the expression of a

view, at about point 2 on the page, that -

the failure to call the evidence ..... is

plainly due to an inadequate preparation of

the defendants' case.

Quade(2) 46 28/8/91

That is inherent, naturally enough, in the general

run of fresh evidence cases, but the point is that

it highlights the distinction between that kind of

application of fresh evidence principle and the
circumstances of the present case where the failure

to ascertain the evidence was of no fault on the

part of the - - -

MASON CJ: Well, having dealt with the distinction,

Mr Einfeld, what argument do you have to support the test, as it was applied by the Full Court of the Federal Court, that is, that the evidence might

well influence the result, affect the result; or a

test like, in the interests of justice, having

regard to the circumstances, a new trial ought to

be ordered?

MR EINFELD: 

Your Honour, can I just preface my answer to

that question by observing also that not only are
the pre-eminent requirements of doing justice

between the parties adverted to in Orr v Holmes and

Wollongong v Cowan themselves, but that in Mccann v

Parsons, in a passage that we have given a

reference to, this Court has said that the fresh

evidence rules are not inflexible and must

themselves bow to the overriding demands of

justice.

In our submission, well within the ambit of

that injunction, the failure of a party to provide, in compliance with requirements, relevant documents

in a manner which, of itself, we submit, deprives

the other party of the advantages of the trial

process, the ordinary trial process, and thus

constitutes a denial of a fair trial.

Secondly, in that circumstance, it is our

submission that, there being a denial of a fair
trial, the upper limit of the test, as it were, if

I can answer Your Honour's question that way, is

that stated in Stead v The State Government

Insurance Commission, to which I will just briefly

take Your Honours, if I may, in 161 CLR 141.

That was a natural justice case in which the

trial judge had, during the course of submissions,

as it were, stopped counsel from making submissions

about the acceptability of the evidence of a

medical practitioner, on the basis that His Honour

did not propose to accept that evidence, and then
the trial judge, in fact, in his judgment, did so,

without an opportunity being afforded to counsel to

address.

Relevant for present purposes, in our submission, is the passage at page 145 where -

accepting as I do the expression of a view is

Quade(2) 47 28/8/91

delivered in the context of a denial of natural
justice case - at about point 6, the Court says:

Where, however, the denial of natural justice affects the entitlement of a party to

make submissions on an issue of fact,

especially -

I am sorry, can I go back to the previous

paragraph, at about point 4.

For this reason not every departure from

the rules of natural justice at a trial will

entitle the aggrieved party to a new trial.

By way of illustration, if all that happened

at a trial was that a party was denied the

opportunity of making submissions on a

question of law, when, in the opinion of the

appellate court, the question of law must
clearly be answered unfavourably to the

aggrieved party, it would be futile to order a

new trial.

Where, however, the denial of natural justice affects the entitlement of a party to

make submissions on an issue of fact,

especially when the issue is whether the

evidence of a particular witness should be

accepted, it is more difficult for a court of

appeal to conclude that compliance with the

requirements of natural justice could have

made no difference.

Now, that is a reference back to what is described

as the general principle at the first paragraph on

the page where the general principle applicable was

approved as that being stated by the English Court

of Appeal in Jones v National Coal Board in these

terms:

"There is one thing to which everyone in

this country is entitled, and that is a fair

trial at which he can put his case properly

before the judge .... No cause is lost until

the judge has found it so; and he cannot find
it without a fair trial, nor can we affirm

it."

And then, again:

That general principle is, however, subject to an important qualification which Bollen J

plainly had in mind in identifying the

practical question as being: Would further

information possibly have made any difference?

Quade(2) 48 28/8/91

Your Honours, we are very cognizant of the

quite different circumstances which were being

addressed in that case. None the less we would say

that here too have the respondents to this appeal

been deprived of a fair trial. Where there has

been a miscarriage of justice or where we would say

in an a priori situation the fair trial has been

denied the unsuccessful party by conduct of the

successful party then the question that ought be

asked is "Can one conclude that had the denial of

the fair trial or the circumstances giving rise to
it not been present, would there have been, in that

case, any different result?"

TOOHEY J: Mr Einfeld, could I just make sure I understand

the proposition, because it seems to be quite

different to the one enunciated by

Mr Justice Burchett.

MR EINFELD: That is so, Your Honour.

TOOHEY J:	You appear to be saying that as a general proposition where there has been a failure by one
party to litigation to give adequate discovery the
judgment obtained by that party will be set aside
unless that party can demonstrate to the court that
the discovery of those documents would have made no difference to the result; is that the way you are
putting it?
MR EINFELD:	Your Honour, that is what we say is the highest

at which one could put the test.	We do say that on
the - - -

TOOHEY J: Well, it is pretty high, is it not?

MR EINFELD:  It is pretty high. What we do say is that the

problem with it is that one cannot enunciate it as

a broad test for all purposes of non-discovery, and

that is the problem. One would have to apply that

as the upper parameter before one were able to say,

regard to the particular content of the particular	"Well, on the facts of this particular case, having
documents, the breach of procedure was so serious
that such a requirement ought be imposed." We come
down from that to the test propounded by Mr Justice Burchett which is that it is enough if there were a
denial of a fair prospect of success or if the
documents, on a fair reading of them, might well
have deprived the other party of his fair trial.

TOOHEY J: Well, is Justice Burchett's test a fallback

position for you?

MR EINFELD: Yes, Your Honour.

Quade(2) 49 28/8/91

GAUDRON J: For my part, I must say I do not see that there

is any real difference between those two tests.

MR EINFELD: In essence, it is a question, I suppose, of

onus. If there is a sufficiently clear denial of a

fair trial by failure of the trial process, then it

becomes incumbent upon the party at fault, on the

assumptions I have made, to demonstrate that his

default did not contribute to the ultimate result.

TOOHEY J:  But that is not the way you put it before. The

way you put it before was to say that where there

has been a failure by one party to give adequate

discovery then the judgment obtained by that party

will be set aside unless that party can demonstrate

that the result would not otherwise have been

different. You write into that now the sort of

notion of fair trial, but your proposition earlier

on was in quite absolute terms, was it not?

MR EINFELD:  Always assuming, Your Honour, that one first

establishes the denial of the fair trial. But what

we say is that the denial of the fair trial emerges

from the failure of the process. That must depend,

I accept, upon the degree of importance and

significance of the documents.

TOOHEY J: All right, so it is not the mere failure to give

discovery - - -

MR EINFELD:  Not of itself, no.

TOOHEY J: Well then, what is it?

MR EINFELD:  What Your Honour is inviting me to do is to

suggest a broad test that will encompass all cases

of non-discovery. It is my submission there is not

such a test.

TOOHEY J:  I thought that is what we were here for today. I

can understand if you were content with

Justice Burchett's test, but - - -

MR EINFELD:  We are. We are content with it, Your Honour.

Certainly we are content with it. When Your Honour

says, "What we are here for today", the way that

came out is this: the suggestion has been - and,

indeed, my friend has submitted - that the test

stated in Orr v Holmes is the appropriate test to

cover this kind of case, namely, that we have to

demonstrate a virtual certainty of a reversal of

the trial had these documents been produced.

It is our submission that that is a quite

inappropriate test for a case of this kind. It is

inappropriate, (a), because of the exceptions or

indications given in the judgments in those cases

Quade(2) 50 28/8/91

themselves, or in Holmes, that it is not an

inflexible rule, that it does not apply where the

trial is irregular and the like, but it is also
inappropriate because this is not a fresh evidence
case proper in the sense that the fresh evidence
was not left out by inadvertence through nobody's

fault, but was left out as a result of the fault of

one party.

TOOHEY J: Well, you may well be right in that, thus far,

but it still leaves open the question of what test

it is that you are asking us to apply.

MR EINFELD:  Yes. What we say is that in that circumstance

there are a range of possibilities, the extreme

point of which is that which I have indicated,

namely that where, if one likes, critical documents

are omitted, documents which are manifestly
discoverable in which a ready perusal of the

material would determine - would have had a serious

impact, or a real impact, on the conduct of the

trial, then in that kind of case it is sufficient

to apply the test propounded by

Mr Justice Burchett, if it be a test. It may be,

in a given case, that one goes further dependent

upon the documents and determines that the matter

ought go back for trial unless it could be shown

that the discovery would have made no difference.

I understand the dilemma, Your Honour, but with respect, the only way of it being resolved, in

our submission, is that the examination of the

documentary material would, as has been suggested,

be remitted - as we understand it has been
suggested - perhaps, to the Full Court. We submit,

that the court would firstly determine that an Orr

v Holmes test strictly described is not applicable

to this kind of fact circumstance.

Secondly, we submit, that

Mr Justice Burchett's formula, if I can use that	perhaps neutral expression, is appropriate to	describe a case where there is a demonstrable
indication that relevant documents, not discovered
without explanation, may have impacted upon the conduct of the trial and thus the result of the
trial.

DEANE J:  What do you mean, Mr Einfeld, by
"Mr Justice Burchett's formula"?

MR EINFELD:  One of two. I should have perhaps said

"formulae". One of two: that expressed at

page 1571 of the appeal book, which was the fair

prospect of success at the trial.

DEANE J: Fair prospect.

Quade(2) 51 28/8/91

MR EINFELD:  And the other, the earlier two passages, 1555

and	1556, suggesting that the documents might have
had	an impact on the result, or might have affected
the	result.

DEANE J:  I know your putting it that way conforms to with

what I suggested to you earlier, but is that fair

to what Mr Justice Burchett has done, in that if

you look at from page 1571 to 1573, his test was

not a formula at all. His test is the general test

of the interests of justice for which he refers,

among other things, to Mccann v Parsons, and in

applying that test he uses, as a basic factor, the

fact that here, in his view, there would have been

a fair prospect of success, or your client has lost

a fair prospect of success by reason of the failure

to comply with the obligation to discover.

MR EINFELD: Yes, Your Honour. I was accepting one of three

suggested references at which the so-called test

was expressed. As I said when I rose - - -

DEANE J: But may it not be completely unwise for an

appellate court to lay down any formula that says,

for example, "In any case of unexplained non-

discovery there should be a new trial if there

would have been a fair prospect of success"? I

mean, one needs to take into account that it may be

years after the event.

MR EINFELD: Certainly.

DEANE J:  The chances of a new trial might be affected by

death. You just cannot lay down - - -

MR EINFELD:	I accept that, Your Honour. Ultimately, the question has to be the need to do justice between
the parties. It has to be. And we have embraced
that concept in our submissions. That is what the
ultimate question is. That is why I indicated, in
will govern all cases of non-discovery. answer to Mr Justice Toohey, that in a sense it is futile to search for some ready expression that

GAUDRON J: Except that, all the debate today, and the words

used by Mr Justice Burchett really do have the ring

of a translation into a civil context of the words

of the common criminal appeal provisions where a

new trial is ordered, unless there was no

substantial miscarriage of justice which has been

interpreted as saying that there was one if the

accused was deprived of a prospect of acquittal

that was fairly open. And the language really does

seem to meld in very closely with those ideas.

MR EINFELD:  It does. Your Honour, in a sense it is also

idle to hypothesize the range of circumstances in a

Quade(2) 52 28/8/91

criminal trial where an appellate court might find

a miscarriage of justice in that sense. But here,

in the civil context, we have sought to emphasize
that the public policy considerations in favour of
granting a new trial in cases such as this are

greater than the principle of finality - the public

policy of finality. In that context it may be that

there is some overlapping of consideration where

one has an increasing propensity to complex cases

of this kind or commercial cases of large scale so

that the Court ought provide an indication that the

processes are not to be regarded as an unnecessary
burden that can be treated in anyway lightly or

anything of that kind but that the whole process of

resolving such litigation can only depend upon

parties to the proceedings complying with their

obligations and, in that circumstance, to ensure

that the parties do obtain a fair trial.

If the process breaks down due to the fault of

one party then, as we proffer, the overriding

consideration must be one of justice which, on the

facts of this case, I suppose, can only be

ultimately ascertained by a weighing up process of

the documentation and the facts of the case and the

evidence and the like - which we are not asking the

Court to embark on today at all.

Ultimately, it is our submission that you

almost do - well, you do get to the point where

justice will be served by the matter going back for

trial if there is a realistic prospect that the

innocent party - if I can call it that - may have

not had his fair trial; may have been deprived of

material which he ought to have had which could

have been tendered, a basis for cross-examination

and, perhaps even more importantly, opened up a

train of enquiry even before the hearing proper

began.

Your Honour, in that kind of case one really

does have a compelling need to balance the need for

finality on the one hand with the need for

exploration of the true facts on the other and the balancing factor, unlike the fresh evidence cases,

is that the process has been undermined in such a

case by the conduct of the successful party.

In that case, one can perhaps proffer the view

that whilst the demands of justice need to be met, in such a case they are best met on balance by, if

anyone is to be disadvantaged in the process of

examination of what ought happen, it is the party

whose fault brought about the problem.

I mean, my learned friend submitted that one

really ought not regard with disfavour the conduct

Quade(2) 53 28/8/91

of a large corporation who volunteers documents

after judgment as if that is some militating factor

or some ameliorating consideration without regard

to the fact that the rules of court and the court's

orders were just not satisfied, and without

explanation.

Your Honours, I did want, just finally, to

respond briefly to some of the matters my friend

had indicated as underlying his submissions with

respect to the fraud cases that he had looked at.

MASON CJ: Yes. Mr Einfeld, how long do you think it would

take you to do that?

MR EINFELD: About a quarter of an hour to 20 minutes

probably, Your Honour.

MASON CJ: Well, we will adjourn at this stage and resume at

2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.18 PM:

MASON CJ: Yes, Mr Einfeld.

MR EINFELD:  Your Honours, I just wish to take a moment, if

I may, to draw to Your Honours' attention a couple

of matters concerning one or two of the cases in
the batch of those described as relevant to matters

of fraud and perjury by my learned friend.

In our submission, the answer really lies in

the construction to be placed on the passage in

McDonald v McDonald, which my friend read.

McDonald v McDonald is reported in 113 CLR 529 and

my learned friend took Your Honours to a passage in

the judgment in particular of the Chief Justice at
page 533. Now, in our submission, a reading of the
fuller passage, or the passage read in its context,
indicates that it really is not authority for the

proposition contended for. The Chief Justice, at

page 532, commences at about point 7 with an

outline, or an indication, of the application of

the ordinary rules applicable to fresh evidence

applications, albeit to facts which were said to

give rise to a fraud. At point 7, or 8:

The discovery subsequent to verdict of admissible credible evidence, which could not

Quade(2) 54 28/8/91

have been sooner discovered by the exercise of
reasonable diligence in the circumstances, and

which is of such probative value and

significance that, taken with the evidence already given at the trial, it will in all

probability be decisive of the issues between

the parties in a sense opposite to that of the

verdict, is a ground for the granting of a new

trial -

that is the Orr v Holmes type test. Then, over the

page, at 533:

In that event, the circumstances that the fresh evidence may tend to support the

conclusion that the verdict was obtained by

fraud, or by surprise, or by subornation of

witnesses will not prevent the grant of a new

trial on the ground of the discovery of fresh

evidence, or require the Court to satisfy

itself of the fraud, surprise or subornation of witnesses as the case may be. Nor, in my opinion, does that circumstance lessen in any

respect the stringency of any of the rules.

Thus far, His Honour is saying the ordinary

fresh evidence rules may apply as much to an
allegation of mistrial by reason of witnesses being

suborned, or fraud or for any other reason.	Then
at about point 3 on page 533:

The fresh evidence, though it suggests fraud,

surprise or subornation of witnesses, must yet

fully satisfy all the criteria laid down with

respect to fresh evidence warranting a new

trial although it may be that, in some cases,

the tendency of the evidence to show fraud may

make it more likely to be conclusive.

Then in the next paragraph:

But if the fresh evidence does not

satisfy all these requirements so that a new

trial could not be ordered on the basis of the

discovery of fresh evidence -

that is, in accordance with the ordinary tests -

but does tend to establish that the verdict

was obtained by fraud or by surprise or that

there has been subornation of witnesses, the

Court may grant a new trial upon a motion

therefor -

or through separate proceedings -

Quade(2) 55 28/8/91

if the Court itself, on a trial of such

issues, finds the fact of the fraud, the
surprise or the subornation ..... to be proved

to its reasonable satisfaction.

In other words, even if one falls short of the

fresh evidence requirements, one could still grant

a new trial for fraud.

It is not necessary in that event that the

evidence of the fraud, the surprise or the

subornation, though it should be "fresh",

should be evidence which would be admissible

on the issues between the parties in the

action; or that it should be found to be

probably conclusive of those issues.

It is true, as my friend pointed out, reference is

made to the result being obtained by fraud, but in

its context what the Chief Justice, we would

respectfully submit, was doing, was to contrast the circumstance in which the obtaining of the judgment

by fraud could be made apparent in accordance with

ordinary fresh evidence principles on the one hand;

and secondly, on the other hand, contrasting the

situation where the fresh evidence tests themselves

might not be fully satisfied. In the latter case
one would still have the new trial without the need

to establish that there would probably have been an

opposite result.

Now, what the case is authority for, in our

respectful submission, is no more than that in the

case where fraud is to be found, in such a case

there is no need to satisfy the ordinary rules of

the standard fresh evidence tests. In our

submission, the next sentence makes that apparent,

at point 8:

The Court's conclusion upon the fresh evidence

before it that the verdict was obtained by

fraud -

et cetera -

is sufficient to justify setting aside the

verdict and ordering a new trial.

In other words, without more. So that true it is

that in this, as in the other cases, reference is

made to the verdict being obtained by fraud, but in

its context the passage means no more than that,

were there is fraud, one does not have to satisfy

the usual requirement of establishing the opposite

result had the fraud not been present.

Quade(2) 56 28/8/91

Now, Your Honours, really that is the gist or the thrust of all of the fraud cases to which my

friend went. The possible exception is that of

Flower v Lloyd and if I could just take

Your Honours back to that very briefly.

Flower v Lloyd, (1878) 10 Ch D 327, was the case in

which the dyes or stones were in part measure
withheld from the inspection of the expert who was

seeking to examine them.

We say about the case two things. Firstly,

that the remarks of Lord Justice James, to which my
friend adverted, as to the reservation the court
ought have in overturning or setting aside a

decision duly taken, is made in a context in which,

as appears from the principal judgment of

Lord Justice Baggallay at page 332, the court found

that there was in fact no evidence of fraud or

untoward conduct on the part of the party providing

the notional discovery, or provision of the dyes.

And it is clear from the second paragraph on

page 332 that the court took a strong view that the

evidence just simply did not measure up to and

establish any standard of satisfying the court that

there had been any inappropriate conduct.

Having said that, Lord Justice James then, at

333 and the following page, made the remarks to

which my learned friend adverted, in effect

suggesting that the court would be slow indeed to

put to one side what are said to be the evils which

may arise from opening such new sources of

legislation; in other words, invoking in very

strong terms, finality doctrines.

We would respectfully submit that it could not be today suggested, having regard, for example, to

the views of this Court in McDonald and other

cases, that there would be the slightest hesitation

in a court today reopening a case where fraud had

been found to have affected the decision at first

instance.

So whereas Lord Justice James does suggest, at

334, at about point 3, that:

Perjuries, falsehoods, frauds, when detected

must be punished -

but the court must not forget the finality

principles and would be loath to open again such a

trial, we suggest, with respect, that in the

context of much more recent authority, not too

great weight can be placed upon that expression of

view.

Quade(2) 57 28/8/91

Your Honours, we would conclude our

submissions this way: the appellant contends here

for an application of Orr v Holmes principle. We

have submitted that that is inappropriate in a case

such as this for public policy reasons and because

of the two reservations expressed in the cases

themselves: one, that the doctrine only applies to

a trial regularly conducted which we have already

addressed; secondly, it is always subject to the
overriding precepts of justice.

In our submission, Your Honours, the judges of the Full Court took the correct approach. They

balanced the various interests of the parties, took

into account the nature of the documents - which

Your Honours have not at this juncture had the

opportunity of considering in any detail - but

having embarked upon that exercise exercised a

discretion to order a new trial in order to do

justice between the parties.

If there is to be any test to be discerned or

defined in a case of non-discovery, we would

respectfully submit in the broad sense it can be no

more than that strict Orr v Holmes doctrine does

not apply where non-discovery takes place as a

result of a fault of one of the parties - the
successful party - and that in such a case the
court has to undertake a balancing exercise and

exercise its discretion, having regard to the

impact which it perceives the documents would have

had upon the process and the trial in order to determine whether there ought be as new trial.

If one attempts to define or refine the

principle by reference to any narrower set of facts

such as the ones we proffer and submit are

applicable here, namely, that there is unexplained

non-compliance, that the documents are critical and

the like, one really does run into the problem that
there are so many permutations and combinations

that it is almost, we would submit respectfully,

impossible to lay down a hard and fast rule for each kind of category of case, whereas here the

Full Court found, as we submit they did, that the

documents would have had a significant impact on

the conduct of a trial - as Mr Justice Einfeld put

it, on the atmosphere of the trial - and perhaps,

particularly, as to the ways in which the

applicants in the proceedings below - the

respondents here - would have otherwise been able

to conduct the case had the material been provided

when it should have been, is also a most material

consideration.

My friend's submission that what His Honour was attempting to do was simply to suggest that the

Quade(2) 58 28/8/91

party ought discover material and if that gives
rise to a new or additional cause of action or

particular of negligence or misleading conduct one

simply amends to allege it is, with respect, a
misconception of what was said. What His Honour

was saying was that documents ought to have been

discovered; had they been discovered, having

regard to their nature, they most probably would

have led to additional and emerging considerations

which could then be taken into account in the

overall presentation of the case.

Now, if that in fact involved an amendment to

the pleadings then so be it. There is no

suggestion that the documents in question were not at the same time immediately relevant and material to matters in issue on the pleadings themselves

because, when one goes to the pleadings in this

case, Your Honours will see the matters to which I made reference earlier: volatility of the dollar,
more particularly safety in borrowing foreign

currency, unlikelihood of significant fluctuations

and the like, are all opened by the pleadings.

The documents are material to those. They

ought to have been discovered and Their Honours

took the view that had that happened there may well

have been a different result in the outcome. In

our submission, no error can be discerned in that

analysis. It is the exercise, if one likes, of

balance or discretionary assessment of the weight

of the material and its impact upon the trial as it

would have taken place, and that is a most

appropriate procedure, in our respectful
submission, having regard to the fact that the
strict rules will not apply because of the failure
of the pre-trial process and the importance of that

process to the conduct of litigation such as this.

May it please t~e Court.

MASON CJ: Thank you, Mr Einfeld. Yes, Mr Bennett.
MR BENNETT:	In relation to the remarks of the Full Court at

page 1567 about discoverability, the only

qualification to the concession about
discoverability is the one I referred to in-chief

which is that in so far as any of the documents

went only to credit, that is insufficient.

My learned friend referred to Jones v Dunkel.

We would submit that rather ignores the

inappropriateness of dealing with issues of fact

before the Full Court and the way in which this was

dealt with. It rather supports my submission that

the appropriate way for it to have been dealt with,

although neither party asked for it, was for the

matter to be dealt with by the trial judge.

Quade(2) 59 28/8/91

My learned friend submitted thirdly that the

Court did not lay down any test. In my respectful

submission it is quite clear that the three

passages I referred to all lay down a test and lay

down the same test. It must be described, in my

respectful submission, as a test and, if my

submissions are correct, it is an inappropriate test, and that really is the beginning and end.

My friend says it is not appropriate to lay down a test if the law be, in accordance with my fall-back position, that the Court must weigh the

seriousness of the non-discovery, the importance of

the documents, the relevance to the result and all

those matters, and it is overall a weighing test.

That is still a test, and that is not the test

which was applied.

Your Honour Justice Dawson, in discussion with

my learned friend, suggested that his case might

simply be that his client had not received a fair

trial. The phrase "fair trial" carries within it,

in my respectful submission, in the context of this

case the element of causation which, we say, is the

issue. One still has to decide what degree of

causation stops it being a fair trial. If there

was no possible effect on the result, then however

wrong what occurred was, it did not detract from a

fair trial. If it necessarily affected the result,

clearly there was not a fair trial. The problem we

have to decide is what is the test for causation.

DAWSON J: Justice Gaudron suggested one, that he lost a

fair chance of success.

MR EINFELD:  That is very close to what the Full Court has

said and, in my respectful submission, that is an

easier test to satisfy than the test in the case of

fraud and perjury. It is a test which has only

been applied in two areas: one is in the criminal

area where clearly there were other considerations

and where, in any event, the Court has more

recently in Hickelberg and Gallagher applied a

slightly different test, but one can understand

where the liberty of the subject is involved that

is a very proper test. It is different in civil

cases. Secondly, the - - -

DEANE J:  Mr Bennett, has that fraud and perjury test, in

the way you put it, ever been insisted on in a case

where there was admitted fraud or perjury as

distinct where the question was whether, where
there was an issue of fraud and perjury, the person

who had obtained the verdict should be required to

litigate again?

MR BENNETT: Yes. Your Honour, the - - -

Quade(2) 60 28/8/91

DEANE J: It is possibly an unfair question. If you or

Mr Reynolds think of a case after we finish,

perhaps you might let us know.

MR BENNETT:  The closest to it might be Mudginberri. That

is not a case of admitted perjury but it is a case

where His Honour dealt with the matter on the

assumption that perjury was established and he said

for these reasons it does not matter if it was

because it would not have affected the result.

That is perhaps the strongest example I can give

Your Honour. I cannot think of any of the cases

that I have dealt with where - - -

DEANE J: Except that really would not be because if there

was an issue of perjury then you can well

understand a judge saying, "Since it's not apparent

that it would have affected the result, I don't think the successful party should be subject to

fighting that issue".

R BENNETT:  But as a logical matter, Your Honour, it is hard

to see why a person who admits something should be

in a worse position than the person who declines to

admit it, notwithstanding overwhelming evidence to

the contrary.

DEANE J: Except, in terms of the administration of justice, it is one thing to say that a person who has failed

in a trial where there was admitted perjury by the
other side should not be able to have the

opportunity of a new trial. It is another thing to

say that a person who has obtained a verdict should

be subjected to relitigation simply because a

contested issue of perjury arises.

MR BENNETT:  Your Honour, what the cases have rather said is

not that it depends on admission, but that it

depends on a very strong case - and there are

various terms used to describe the strength of the

case - in relation to the fraud or perjury, and

ultimately while one can understand, from the point

of view of public perception, a difficulty in

saying the defendant subsequently admitted that he

lied, yet the verdict stood. On the other hand,

from the point of view of legal analysis and the

approach which would be taken by the appellate

court, there should be no difference between that,
except on degree of certainty in a case where it is

virtually certain from the fresh evidence that

there has been perjury. For example, if there is a
tape recording of a conversation which is

discovered which the parties could not have found with reasonable diligence, or a film or something

like that.	One could imagine cases where there is
virtual certainty.	And it would seem surprising if

in such a case the guilty party by refusing to

Quade(2) 61 28/8/91

admit what must be obvious to everyone, and by

repeating, if one likes, his perjury, he is in a

better position than if he does not.

No case that I am aware of draws a distinction

between admitted perjury and perjury which is

established on the requisite test.

MR BENNETT:  Then my friend gave the example, before he was

stopped, about the reference in the documents to

the Bank actively marketing, and the suggestion

that that necessarily involved a fact in issue
rather than credit. I am not going to go into the

facts either, and my friend did not, but simply to

show that to every answer there is an equal and

opposite argument may I simply say this: that we

would have submitted, on the facts of this case,

nothing could be less relevant than whether the

Bank was aggressively marketing. What was relevant

was whether these particular officers aggressively

marketed to these particular customers, and that

was the issue to which - it was only an issue of

credit. But, Your Honours, I do not want to go

into that. My friend raised it and I answer it,

but I do not want to say more about it. It does

not arise at this stage.

In relation to the competing policies, I agree

that - we fully concede it is a matter of competing
policies. There is the interest reipublicae

principle and the general principle that misconduct

ought not to prevail. But in the balance of those
competing policies must be added the fact to which

Your Honour Justice Toohey referred, which is the

great difficulties associated with discovery in a great deal of modern litigation and the fact that

however much cases have said, and correctly said,

that it is an important obligation, to be taken

seriously, and so on, it is something which very

often goes wrong and which, in cases of this
complexity, can rarely be perfect. And in looking

at overall policy, that is a matter which must be

taken into account, quite independently of the

facts of the particular case.

My friend went to Orr's case and referred to the passage in the judgment of the Chief Justice.

We say three things about that passage. First, His

Honour used the words "at least", so he was not

laying down a firm test. Secondly, he used the

words "very probably", which is quite a high test

anyway. Thirdly, and most importantly, it is the

judgment of Mr Justice Dixon, as he then was, which

was accepted by the whole of the Court in

Wollongong Council, and which has been regarded as

the locus classicus for future cases. So the fact

that, on one view of it, Sir John Latham may have

Quade(2) 62 28/8/91

laid down a slightly lower test really cannot help

my friend.

In relation to Stead's case, that was a

natural justice case, and the fact is that rightly

or wrongly the authorities have treated what one

might call default or misconduct by a party as

being in a different category to default of some

kind by the judge, the jury or the judicial system.

Now, one can understand that in a common law system

which is based on the adversary approach to

litigation. One can understand taking one view in

relation to a party who breaks one of the rules or

goes too far as parties perhaps are wont to do, but

taking another view in relation to a situation

where the system itself has failed, where the judge

has got something wrong or the jury has done

something it should not do.

That may be the historical reason. Whether

that is valid or not today perhaps does not matter.

The fact is that different tests have been laid

down in that area and no case has suggested

applying the test laid down to judicial error to

cases of misconduct by a party.

In relation to McDonald, we were at issue on page 533, and in my respectful submission the

phrase "obtained by fraud" does import causation.

My friend says it does not, and we are at issue.

In relation to Flower's case, may I just

remind Your Honours of one additional passagewhich

perhaps explains the narrow approach taken by the
presiding judge, Lord Justice Baggallay, where at

page 334, he expresses reservations about the very

broad view taken by Lord Justice James and says,

well really, if there is fraud we may have to do

something else. But he says, in putting down the

more lenient test in relation to fraud, going more

my friend's way, he says this at page 334, the last

half dozen lines of the judgment: 

I desire to reserve for myself an opportunity of fully considering the question how, having regard to general principles and authority, it

will be proper to deal with cases, if and when

any such shall arise, in which it shall be

clearly proved that a judgment has been

obtained by the fraud of one of the parties,

which judgment, but for such fraud -

applying a test which this Court has not totally
adopted in relation to causation -

would have been in favour of the other party.

Quade(2) 63 28/8/91

What is significant is that there is, even there, a

causation element laid down.

May I say this in conclusion: the case does

involve a conflict between principles but the

principle of interest reipublicae in this case is

as high as it could ever be. Because if the

Full Court has laid down the correct test, if the

test is to be that where there has been defective

discovery if that might have affected the result

there must be a new trial. If that is to be the
test the volume of new trials, quite apart from the

foreign currency loan area where in itself the

results are substantial, quite apart from that area

the number of new trials and the prospect of
litigation not being final is a very real and very
serious one. In my respectful submission, whatever

test the Court ultimately decides is appropriate,

it must be one which is higher than that test.	May
it please the Court.

MASON CJ: Thank you, Mr Bennett. The Court will consider

its decision in this matter and will adjourn until

9.30 am tomorrow.

AT 2.48 PM THE MATTER WAS ADJOURNED SINE DIE

Quade(2) 64 28/8/91