Hancock v Rinehart

[2016] NSWSC 116

Supreme Court

New South Wales

Medium Neutral Citation:	Hancock v Rinehart [2016] NSWSC 116
Hearing dates:	Tuesday, 16 February 2016
Date of orders:	16 February 2016
Decision date:	16 February 2016
Jurisdiction:	Equity
Before:	Brereton J
Decision:	Application for stay pending appeal refused. Short stay granted to permit application for stay to be made to Court of Appeal.
Catchwords:	PROCEDURE – Judgments and orders – order made granting stay pending appeal – where leave to appeal sought – where failure to grant stay would render appeal nugatory – where prospects of ultimate success in disturbing discretionary aspect of judgment appear remote – where stay will delay completion of part-heard application for enforcement of principal judgment.
Cases Cited:	Hancock v Rinehart (Privilege) [2016] NSWSC 12 House v The King (1936) 55 CLR 499 Welker v Rinehart (No 2) [2011] NSWSC 1238 Westminster Airways Limited v Kuwait Oil Company Limited [1951] 1KB 134 at 146
Category:	Procedural and other rulings
Parties:	John Langley Hancock (first plaintiff) Bianca Hope Rinehart (second plaintiff) Gina Hope Rinehart (first defendant)
Representation:	Counsel: CH Withers w AM Hochroth and PA Meagher (plaintiffs) B McClintock SC w SA Lawrence and R Mansted (first defendant)   Solicitors: Yeldham Price O’Brien Lusk (plaintiffs) Speedy and Stracey (first defendant)
File Number(s):	2011/285907

Judgment (EX TEMPORE)

1. HIS HONOUR: On 2 February 2016, I gave judgment rejecting Mrs Rinehart's claim of privilege in respect of certain documents and granting Bianca access to them. [1] At that time, I stayed the operation of the order to 5pm on Friday, 5 February 2016. That stay was extended, first, to 8 February 2016, and then further extended to today. In the meantime, Mrs Rinehart has filed, in the Court of Appeal on 16 February 2016, a summons seeking leave to appeal from that decision, which is returnable before the Court of Appeal for directions on 4 April 2016. By the application presently before the court, she seeks a continuation of the stay pending the hearing and determination of the judgment of the Court of Appeal.

   1. Hancock v Rinehart (Privilege) [2016] NSWSC 12

2. As I indicated at a much earlier stage of these proceedings, in Welker v Rinehart(No 2) [2011] NSWSC 1238 (at [57]):

The Court of Appeal encourages trial judges to determine stay applications pending the determination of an appeal…whether the trial judge grants a short stay only until the matter can be brought to the Court of Appeal for consideration by a judge of appeal, or a stay pending the determination of the appellate proceedings but subject to such order as the appellate Court may make, usually depends on the view of the Court at first instance as to the prospects of the appeal. Even where the primary judge very much doubts that there is an arguable case of error, a prospective appellant will often be afforded a short stay to enable the matter to be agitated in the Court of Appeal, at least if refusal of a stay in the meantime might render an appeal nugatory. But when the primary judge thinks it is reasonably clear that there is an arguable appeal, the primary judge should endeavour so far as practicable to relieve the Court of Appeal of having to determine the matter.

3. It is clear that if a stay is not granted the appeal will be practically rendered nugatory. If a stay is not granted, Bianca will have access to the documents, and the protection of any privilege that might attach to them will for all practical purposes be lost. It will not be able to be recovered or reinstated by any subsequent order that might be made following a successful appeal. Thus, I am satisfied that failing to grant a stay would render the appeal nugatory.

4. The more difficult issue is the arguability of any appeal or, including the application for leave to appeal, and in particular the prospects of Mrs Rinehart ultimately securing an outcome different from that which prevailed as a result of the first instance judgment. I am content to accept, without deciding that, on what has been referred to in argument as the question of principle – whether it is permissible for a person claiming legal professional privilege to sustain the claim by adducing no testimonial evidence of the purpose for and circumstance in which the documents were created, but merely asking the court to inspect the documents for the purpose of ruling on that claim – there is at least an arguable case for leave to appeal. That is because first, the question is one of principle; secondly, its resolution in this case has practically finally determined the first defendant's claim of privilege; and thirdly, although the question does not appear to have been closely analysed in other judgments, there is at least a basis for saying that different results have been reached in other cases such as to make desirable, clarification of the position by an intermediate Court of Appeal.

5. However, the difficulty that the first defendant encounters is that, as I see it, the judgment had a dual ratio, success on the question of principle will not produce a different ultimate outcome for the first defendant unless she can also disturb the second element of the dual ratio, which was that the course proposed by the first defendant of the court examining the documents and then ruling on the question of privilege essentially on that basis only, was not only impermissible as a matter of principle, but also unsatisfactory as a matter of discretion. That dual rationale is reflected, for example, in the first sentence of paragraph [34] of the judgment, in the last sentence of paragraph [35(2)], and in paragraph [36], which is expressed in the language of discretion, referring to it being “contrary to justice” to uphold the claim solely on the basis proposed by the first defendant – a conclusion which relates back to the discretionary considerations referred to in paragraph [18]. That considerations of discretion were operative is also apparent from the reference in paragraph [31] to the proposition, which appears not to have been disputed in any decision, that a party is not entitled to insist on the court inspecting the documents, it being a matter for the discretion of the judge who will only do so if there is good reason – for which the authority of Westminster Airways Limited v Kuwait Oil Company Limited [1951] 1KB 134 at 146 was, amongst others, cited.

6. Accordingly, it seems to me that ultimately the first defendant would have to establish not only that the judgment was wrong on the question of principle but also that the second rationale involved discretionary error of the type referred to in House v The King (1936) 55 CLR 499. I do not think that the first defendant has, at least so far, undertaken that task or pointed to any matters that would demonstrate such an error, save for an argument that the exercise of the discretion has in some way been affected by the alleged error of principle. But it seems to me that regardless of the question of principle, the discretionary consideration referred to in the judgment would have produced the same outcome. In circumstances where continuation of the stay will delay the completion of the part-heard hearing of the plaintiffs’ motions in the nature of enforcement of the principal judgment, and the ultimate prospects of a different outcome appear remote, a stay pending determination of the application for leave to appeal should be refused.

7. All that said, Mr McClintock has developed a respectable argument – albeit one that for the reasons I have just outlined, I think is wrong – that the judgment did not involve an exercise of discretion, and was decided solely on the question of principle. For that reason, I should not be the final arbiter of what the judgment holds and whether there is an arguable case for leave to appeal. The case falls within the first of the categories I referred to in Welker v Rinehart, and is one in which, while dismissing the application for a stay pending appeal, I should grant an interim stay for a short time in order to enable the first defendant to make a stay application to the Court of Appeal.

Orders

8. The Court orders that:

1. the first defendant’s application for a further extension of the stay of order (1) made on 2 February 2016, continued on 5 February and 8 February 2016, pending determination of her application for leave to appeal be dismissed;

2. the first defendant pay the plaintiffs’ costs of the application for a stay.

3. order (1) made on 2 February be stayed until and including 7 March 2016, or such further time as the Court of Appeal may on application order;

4. orders (2) to (5) made on 2 February 2016 be suspended until further order;

5. the proceedings be adjourned to 17 March 2016 at 9.30am before me for further directions.

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Endnote