Holihan v Amcor Limited
[2011] VSCA 225
•5 August 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2011 0111
| CRAIG ANTHONY HOLIHAN | First Applicant |
| and | |
| ACB AUSTRALIA PTY LTD (ACN 104 489 670) | Second Applicant |
| and | |
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (formerly ACHILLA PTY LTD (ACN 104 489 581) | Third applicant |
| v | |
| AMCOR LIMITED (ACN 000 017 372) | First Respondent |
| and | |
| ACN002693843 (ACN 002 693 843) | Second Respondent |
| and | |
| AMCOR PACKAGING (AUSTRALIA) PTY LTD (ACN 004 275 165) | Third Respondent |
| and | |
| SPECIALTY PACKAGING GROUP PTY LTD (formerly SERVICE CONTAINERS PTY LTD) (ACN 005 319 666) | Fourth Respondent |
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| JUDGES | WARREN CJ, BUCHANAN and TATE JJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 29 July 2011 |
| DATE OF ORDERS | 29 July 2011 |
| REASONS FOR JUDGMENT | 5 August 2011 |
| MEDIUM NEUTRAL CITATION | [2011] VSCA 225 |
| JUDGMENT APPEALED FROM | Amcor Ltd v Barnes [2011] VSC 341 |
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APPEAL – Procedure – Leave to appeal – Interlocutory order – Whether judge erred in applying wrong standard of proof in relation to fraud/crime exception to client legal privilege – Whether judge had jurisdiction to hear and determine appeal from associate justice – Granting leave would discourage trial judges from referring out questions in appropriate cases – Fragmentation of the trial was undesirable – Evidence Act 2008, s 125 – Application refused.
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| Appearances: | Counsel | Solicitors |
| For the Applicants | Mr P J Riordan SC with Mr S J Maiden | Mills Oakley Lawyers |
| For the Respondents | Mr J W K Burnside QC with Ms L H Kirwan | Corrs Chambers Westgarth |
WARREN CJ:
I have had the benefit of reading the draft judgment of Tate JA and agree with her Honour’s reasons.
BUCHANAN JA:
I agree with Tate JA.
TATE JA:
On 26 and 27 July 2011 Kyrou J declared, inter alia, that certain documents were not privileged, by virtue of the fraud/crime exception under s 125 of the Evidence Act 2008 (‘the Act’).[1] As the orders made were interlocutory, leave was required before an appeal could be heard.[2] On 29 July 2011, this Court heard the application for leave to appeal against the orders made by Kyrou J. At the end of the hearing, the Court pronounced orders refusing leave to appeal, with costs, and indicated that its reasons would be published as soon as practicable.
[1]Amcor Ltd v Barnes [2011] VSC 341.
[2]Supreme Court Act 1986, s 17A(4)(b).
The documents in issue had been produced by Mr David Roe, in response to a subpoena. Mr Roe is the former solicitor to Craig Anthony Holihan, ACB Australia Pty Ltd (ACN 104 489 670), and Australian Corrugated Box Co Pty Ltd (formerly Achilla Pty Ltd) (ACN 104 489 581), who are the applicants in this proceeding. The applicants are the second, third and fourth defendants in a trial brought by Amcor Limited (ACN 000 017 372), ACN002693843 Box Pty Ltd (ACN 002 693 843), Amcor Packaging (Australia) Pty Ltd (ACN 004 275 165) and Speciality Packaging Group Pty Ltd (formerly Service Containers Pty Ltd) (ACN 005 319 666) (‘the Amcor parties’), who are the respondents to this application.
The trial, which was not yet finished at the time of the hearing of the
application for leave to appeal, had already occupied over 31 days before Vickery J. This Court was told that final addresses had been completed but that Vickery J had allowed for the prospect that, if leave to appeal were refused, the Amcor parties would be permitted to apply to re-open their case and make application to have the documents admitted into evidence. This might give rise to a request for witnesses to be recalled for further cross-examination. It was common ground between the parties that the documents in issue would be important at least to questions of credit.
Mr Roe had objected to producing a number of documents in response to the subpoena, relying on a claim of client legal privilege. Vickery J referred the question of the objection to production to Randall AsJ who upheld the claims for client legal privilege. The Amcor parties appealed to Kyrou J. By that stage the categories in dispute had been reduced to three, namely: (1) Disputed Quadpak Documents; (2) Disputed Restructure Documents; and (3) Disputed Service Containers Documents. Kyrou J allowed the appeal against the orders of Randall AsJ and declared that the Disputed Quadpak Documents and the Disputed Restructure Documents were not privileged by reason of s 125 of the Act.
Section 125 of the Act creates an exception to client legal privilege where, relevantly, the contents of a document were prepared by a lawyer in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty. The applicants, relying on the approach adopted in Niemann v Electronic Industries Ltd,[3] contended that there was a sufficient doubt to justify a grant of leave by reason of an error committed by Kyrou J in the standard of proof he applied in determining whether the requirements of s 125(1) were satisfied.
[3][1978] VR 431, 441-2.
Section 125 relevantly provides:
(1)This Division does not prevent the adducing of evidence of –
a communication made or the contents of a document prepared by a client or lawyer (or both), or a party who is not represented in the proceeding by a lawyer, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty; …
(2)For the purposes of this section, if the commission of the fraud, offence or act, or the abuse of power, is a fact in issue and there are reasonable grounds for finding that –
(a)the fraud, offence or act … was committed; and
(b)a communication was made or document prepared in furtherance of the commission of the fraud, offence or act …
the court may find that the communication was so made or the document so prepared.
The applicants submitted that Kyrou J fell into error when, contrary to the intention of s 125, he applied a prima facie test in concluding that the Disputed Quadpak Documents and the Disputed Restructure Documents were not privileged by reason of s 125(1), despite finding that the commission of the fraud, offence or act that exposed a person to a civil penalty was not a fact in issue. His Honour said:[4]
Where … the commission of a fraud, offence or act is not a fact in issue in a proceeding, a document will not be privileged under s 125(1) if the party that alleges that the document is not privileged satisfies the Court that there is a prima facie case that a fraud, offence or act has been committed and that the document was prepared in furtherance of that fraud, offence or act.
[4]Amcor Ltd v Barnes [2011] VSC 341, [68].
The applicants submitted that s 125 contemplates that different standards will be applied in determining whether communications that might otherwise attract client legal privilege fail to do so because they were prepared by a lawyer in furtherance of the commission of a fraud, offence, or act that renders a person liable to a civil liability, depending upon whether or not the commission of the fraud, offence or act that exposes the person to a civil penalty is a fact in issue in the trial or not. If it is a fact in issue, the test to be applied in determining if the requirements of s 125(1) are satisfied is the ‘reasonable grounds’ test. It was submitted that, if it is not a fact in issue, the application of s 125(1) depends upon the court being satisfied of the relevant facts on the balance of probabilities, in accordance with s 142 of the Act which relevantly provides:
(1)Except as otherwise provided by this Act, in any proceeding the court is to find that the facts necessary for deciding –
(a)a question whether evidence should be admitted or not admitted, whether in the exercise of a discretion or not; or
(b)any other question arising under this Act –
have been proved if it is satisfied that they have been proved on the balance of probabilities.
The applicants relied on the commentary in Cross on Evidence as supporting the view that two different standards were intended:
Section 125 widens the exception compared to that recognised by the general law by the inclusion of references to ‘civil penalty’. Section 125(1) is different from the common law. At common law, it was not necessary to establish fraud or the like. It was enough if there were prima facie evidence or reasonable grounds … The ALRC did not explain why the change was made … But the common law test is retained in s 125(2) for the special case where the commission of a fraud or the like is a fact in issue.
The position was somewhat complicated by the fact that the applicants had urged Kyrou J to adopt a prima facie test which may have indicated that they accepted that the commission of the fraud, offence or act was a fact in issue.[5]
[5]Holihan Parties’ Summary of Legal Principles dated 18 July 2011, [2] and see Amcor Parties’ Outline of Submissions on an Appeal from Randall AsJ re Roe Subpoena, dated 18 July 2011, [30].
It was argued on the application for leave to appeal that not only was his Honour plainly wrong in the approach he adopted but that a refusal of leave would cause substantial injustice in that, if the wrong were not now corrected, privilege would be lost and might never be able to be revived, even if the applicants were unsuccessful at trial but ultimately successful on appeal.
Further alleged errors were relied on by the applicants. These included the claim that Kyrou J had no jurisdiction in the matter because an appeal from the determination of an associate judge to whom a matter has been referred in the course of a trial ought to be to the Court of Appeal and not to a judge of the trial division of the Supreme Court. It was argued that the jurisdiction of Randall AsJ here derived solely from the referral made by Vickery J in the context of an ongoing trial because an associate judge otherwise has no jurisdiction to make any order at the trial of a proceeding: r 77.02(1)(b) of the Supreme Court (General Civil Procedure) Rules 2005. An appeal from an associate judge in respect of a matter not within his authority save for a referral lies to the Court of Appeal pursuant to r 77.07. It was also alleged that Kyrou J erred in concluding that the meaning of the expression ‘fraud’ in s 125 does not require an element of actual dishonesty and applied to equitable fraud falling short of actual dishonesty. Furthermore, it was submitted that there was sufficient doubt about the finding of Kyrou J that legal advice given with respect to subsequent concealment of a fraud amounted to steps taken ‘in furtherance of’ the fraud.
The applicants claimed that substantial injustice would follow unless leave was granted because the applicants could not afford a retrial if they were forced to wait for an appeal from a judgment following the completed trial in order to have these errors corrected.
It must always be remembered that a grant of leave to appeal lies within the discretion of this Court. As Phillips JA said in Secretary to the Department of Premier and Cabinet v Hulls:[6]
I simply observe that, although in argument what was said in Niemann was referred to as laying down ‘principles’ or ‘rules’, that is not so. What was said should be taken to do no more than provide guidelines: cf Norbis v Norbis (1986) 161 CLR 513. The discretion to grant leave, which is conferred by the statute in untrammelled terms, cannot be fettered, and should not be fettered, by judicial decision. From time to time a case will arise in which any preconceived guidelines will be found not wholly sufficient. In the end, whether leave is granted or not must always depend upon the justice of the case, as it appears to the court from whom leave is sought.
[6][1999] 3 VR 331, 335 (with whose judgment Tadgell and Batt JJA agreed) (emphasis added).
In my opinion, there are many discretionary considerations that favour a refusal of leave to appeal in the circumstances of this case. One of those considerations is the need to avoid fragmentation of the trial. To grant leave now would have the undesirable consequence of interrupting the ordinary course of proceedings. While the trial is almost finished, a grant of leave would artificially interrupt the process by which Vickery J would make orders and give reasons in the trial. His Honour could not do so because, if the appeal was unsuccessful, the Amcor parties might seek to rely upon the documents in issue to reopen their case and to recall witnesses for further cross-examination. In those circumstances, Vickery J would need to commence a ‘second stage’ of the trial, some period of time after the first, with the previous momentum of the trial left in abeyance.
More importantly, Vickery J referred out the question of privilege to an associate judge to avoid being ‘contaminated’ by the content of the documents if the claim for privilege had succeeded. Had he chosen not to refer out the question, his determination would have been one of many rulings in the trial and it is well understood that an application for leave to appeal from a ruling during the course of a trial would have had negligible prospects of success. It ought make no difference that Vickery J chose to refer out the question rather than deal with it himself. The referral to an Associate Judge was clearly appropriate, most especially so given the issue to be dealt with on the referral. The referral was made at the express request of the applicants.
More generally, as the respondent submitted, granting leave to appeal from interlocutory rulings made by associate judges on a referral from a trial judge during the course of a trial would be contrary to the objective of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute in civil proceedings.[7] Those objectives are more likely to be impaired if the ruling has already been the subject of an appeal to another judge in the trial division. To readily grant leave to appeal may discourage trial judges from quite properly choosing to refer out issues to be determined by an associate judge where that would achieve case management efficiencies or, as in the circumstances of this case, the referral is informed by the point of principle of avoiding contamination for the trial in the event that the claim of privilege were to be upheld.
[7]This is consistent with ss 7, 8 and 9 of the Civil Procedure Act 2010.
It is these considerations that inform the court’s discretion in refusing the application for leave to appeal from the orders made by Kyrou J. In arriving at this conclusion it is unnecessary to decide whether there is sufficient doubt in relation to any of the errors alleged by the applicants. The questions raised, including the appropriate standard of proof to be used in applying s 125(1) and the question of jurisdiction, must await determination on another day.
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