Kelly v Hilton [No 4]

[2023] WASC 282

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   KELLY -v- HILTON [No 4] [2023] WASC 282

CORAM:   STRK J

HEARD:   ON THE PAPERS

DELIVERED          :   27 JULY 2023

FILE NO/S:   CIV 2228 of 2020

BETWEEN:   ALLAN JOHN KELLY

First Plaintiff

ALLAN JOHN KELLY AS TRUSTEE FOR THE KELLY FAMILY TRUST

Second Plaintiff

XGS PTY LTD AS TRUSTEE FOR THE KELLY SUPERANNUATION FUND

Third Plaintiff

DEBNAL PTY LTD

Fourth Plaintiff

AND

JOHN CHARLES HILTON

Defendant

Catchwords:

Practice and procedure - Release from Harman obligation - Whether special circumstances justify the grant of leave

Legislation:

Nil

Result:

Application granted

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
Third Plaintiff	:	No appearance
Fourth Plaintiff	:	No appearance
Defendant	:	No appearance

Solicitors:

First Plaintiff	:	HHG Legal Group
Second Plaintiff	:	HHG Legal Group
Third Plaintiff	:	HHG Legal Group
Fourth Plaintiff	:	HHG Legal Group
Defendant	:	Bennett

Case(s) referred to in decision(s):

Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 273 CLR 235

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125

Home Office v Harman [1983] 1 AC 280; [1982] 1 All ER 532

Kelly v Hilton [No 2] [2022] WASC 374

Kelly v Hilton [No 3] [2023] WASC 235

Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149

Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67

Treasury Wine Estates Ltd v Maurice Blackburn Pty Ltd [2020] FCAFC 226; (2020) 282 FCR 95

Table of Contents

Introduction

Applicable principles

The claims made in this proceeding and context

Discovery

Subpoena to the ASX

Subpoena to ASIC

Purge application

The evidence

The submissions made on behalf of Mr Hilton in support of the second application

Disposition

Conclusion and orders

STRK J:

Introduction

1. These reasons concern the defendant's second application, referred to and described in Kelly v Hilton [No 3] [2023] WASC 235 [11], [12], [16], [17], [25], [27] ‑ [29] and [34]. These reasons should be read with the reasons for decision delivered on 29 June 2023 in Kelly v Hilton [No 3].  The terms there defined are used in their defined sense in these reasons.

2. The second application was filed on behalf of Mr Hilton on 21 December 2022, and the scope of relief sought was expanded by the amended minute of proposed orders filed on 22 May 2023.  By the second application, Mr Hilton seeks to be released from the obligation not to use documents produced in response to subpoenas issued in this proceeding, documents discovered by the plaintiffs in this proceeding, and documents filed in this proceeding by Mr Kelly, the first plaintiff, in support of the purge application, for a purpose other than in connection with this proceeding.  Mr Hilton seeks leave to use the documents in his foreshadowed contempt application against Mr Kelly.

3. The orders Mr Hilton seeks, as recorded in the amended minute of proposed orders filed on 22 May 2023, are as follows:

   1.The defendant, Mr Hilton be released from the obligation not to use the following documents produced in response to subpoenas issued in this action, and documents discovered by the plaintiffs in this action and documents filed by the first plaintiff in support of the first plaintiff's in the application for orders relating to the breach of implied undertaking dated 14 April 2023 (Purge Application) for a purpose other than in connection with this action, and leave be granted, for the purpose of use of those documents in contempt proceedings against the first plaintiff, Mr Kelly:

   1.1the plaintiffs' discovered documents listed in 'JCH-1' of the Affidavit of John Charles Hilton sworn on 21 December 2022 (Hilton Affidavit);

   1.2documents produced by the Australian Securities Exchange Ltd (ACN 000 943 377) in response to the subpoena issued to it dated 7 November 2022 in this action and as listed in 'JCH-2' of the Hilton Affidavit; and

   1.3documents to be produced by the Australian Securities and Investments Commission in response to the subpoena issued to it dated 14 November 2022 in this action.;

   1.4documents filed by the first plaintiff in support of the Purge Application, namely:

   1.4.1the first plaintiff's chamber summons dated 14 April 2023; and

   1.4.2the affidavit of Allan John Kelly sworn on 14 April 2023.

   2.Costs of this application be costs in the cause of the contempt proceedings.

4. A memorandum pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 59 r 9 was filed with the second application. The memorandum reveals that before the second application was made, there had been proper conferral as between the parties, the result of which was that the plaintiffs neither consented to nor opposed the second application, subject to the disposition of the first application and the plaintiffs' inspection of any documents produced by the Australian Securities and Investments Commission (ASIC). Following the determination of the first application and inspection, the plaintiffs' position remained that they neither consent to nor oppose the second application, as was confirmed in a communication to the court received on 20 July 2023.

5. While the plaintiffs neither consent to nor oppose the second application, leave of the court is required and is properly sought by Mr Hilton by an application made in this proceeding.

6. For the reasons set out below, I am satisfied that special circumstances have been demonstrated which provide a sufficient basis to release Mr Hilton from his obligation not to use the documents described at 1.1 to 1.4 of the amended minute (reproduced at [3] above), for a purpose other than in connection with this proceeding, and to grant Mr Hilton leave to use the documents in the prosecution of the foreshadowed contempt application.

Applicable principles

1. As was noted in Kelly v Hilton [No 2] [2022] WASC 374 at [5], the principles to be applied in determining Mr Hilton's second application were recently restated by the Court of Appeal in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 [69] ‑ [76]. I adopt the same as if set out here in full, and I apply them in the determination of the second application.

The claims made in this proceeding and context

1. I repeat here [9] ‑ [17] of Kelly v Hilton [No 3], where I described the second application in context, noting that it is one of several inter‑related applications to be determined.  By way of context, I also note as follows.

Discovery

1. By affidavits filed on 31 May 2022 and 27 July 2022, the plaintiffs and the defendant gave their respective discovery by reference to the categories of documents set out in the schedules to orders made on 6 April 2022.

2. By the second application, Mr Hilton seeks to be relieved of his obligation not to use certain documents discovered by the plaintiffs for a purpose other than in connection with this proceeding, particularly those listed in the attachment marked 'JCH‑1' to Mr Hilton's affidavit deposed on 21 December 2022 in support of the second application.

3. In attachment 'JCH‑1', Mr Hilton described 32 documents in a way that could not readily be cross‑referenced to the plaintiffs' discovery as verified by Mr Kelly in his affidavit sworn on 26 May 2022 and filed on 31 May 2022.  The court understands that all but one of the documents described in 'JCH‑1' are documents discovered by the plaintiffs falling within the scope of category 5, item 5.9 of the list verified by Mr Kelly on 26 May 2022, which item Mr Kelly described as 'Bundle of correspondence with ASX (Various)'.  The other document is a document discovered by the plaintiffs falling within the scope of category 5, item 5.7 of the list verified by Mr Kelly on 26 May 2022, which item Mr Kelly described as 'Bundle of 2 items - communications with R Stranger (Various)'.

Subpoena to the ASX

1. At the request of Mr Hilton, on 7 November 2022 the court issued to the Proper Officer, Australian Securities Exchange Ltd (ASX), a subpoena to produce documents which was returnable on 29 November 2022.  The documents to be produced by the ASX pursuant to the subpoena were:

   Documents recording any complaints or statements made by Mr Allan John Kelly regarding Riversgold Limited (ACN 617 614 598) or Mr John Charles Hilton on or after 1 June 2019.

2. By the second application, Mr Hilton seeks to be relieved of his obligation not to use the documents produced by the ASX in response to the subpoena, which documents are listed in the attachment marked 'JCH‑2' to Mr Hilton's affidavit deposed on 21 December 2022 in support of the second application.

Subpoena to ASIC

1. For the reasons set out in Kelly v Hilton [No 3], ASIC was ordered to produce to the court the documents described in the subpoena issued to the Proper Officer, Legal Division, ASIC, by this court on 14 November 2022 at the request of Mr Hilton.

2. The documents produced by ASIC pursuant to the subpoena were:

   Documents recording any complaints or statements made by Mr Allan John Kelly regarding Riversgold Limited (ACN 617 614 598) or Mr John Charles Hilton on or after 1 June 2019.

3. On 7 July 2023, the affidavit of Andrew James Filing, a law graduate employed by Bennett, was filed on behalf of Mr Hilton in support of the second application.  Mr Filing lists the documents produced by ASIC pursuant to subpoena in the attachment to his affidavit marked 'AJF‑1'.

4. By the second application, Mr Hilton seeks to be relieved of his obligation not to use the documents produced by ASIC in response to the subpoena for a purpose other than in connection with this proceeding.

Purge application

1. On 14 April 2023, the purge application was filed on behalf of Mr Kelly.

2. As noted above, the second application also concerns the chamber summons dated 14 April 2023 by which the purge application was made; and the affidavit sworn by Mr Kelly on 14 April 2023 in support of the same.

3. That is, by the second application, Mr Hilton seeks to be relieved of his obligation not to use the chamber summons and Mr Kelly's supporting affidavit for a purpose other than in connection with this proceeding.

The evidence

1. In support of the second application, Mr Hilton relies upon his affidavit sworn on 21 December 2022, which was made in support of the second application and for the purposes of the foreshadowed contempt application.

2. At par 4 of his affidavit, Mr Hilton describes the documents falling within the ambit of the second application (now supplemented by the list attached to the affidavit of Mr Filing and marked 'AJF‑1').

3. At pars 5 and 6 of his affidavit, Mr Hilton describes documents produced on his behalf to the plaintiffs' representatives pursuant to the RSC O 26 r 8(2). At pars 7 ‑ 9, Mr Hilton describes the discovery orders made in this proceeding on 6 April 2022 and the steps he took to provide discovery in this proceeding.

4. At pars 10 and 11 of his affidavit, Mr Hilton deposes to the basis for his belief that documents discovered by him in this proceeding were used by Mr Kelly for purposes beyond this proceeding.  In this regard, various correspondence as between Bennett (on behalf of Mr Hilton) and HHG Legal Group (on behalf of the plaintiffs) is attached to Mr Hilton's affidavit and marked 'JCH‑5 to 'JCH‑15'.

5. At pars 12 ‑ 16 of his affidavit, Mr Hilton explains why he presses the second application, which paragraphs are reproduced below:

   Reason for request for leave

   12.The purpose for which I seek to be released from the Harman undertaking is to initiate and prosecute a notice of motion for contempt against Mr Kelly in the current proceedings.

   13.Without waiver of legal professional privileged (sic), I am informed by my solicitors and verily believe to be true that and while the application I intend to make against Mr Kelly for punishment for contempt of Court will be made in these proceedings, as a matter of law, the notice of motion for contempt is treated as if it is a separate and distinct proceeding.

   14.Out of an abundance of caution, I make the application for leave to use documents discovered by the plaintiffs in this action and produced in response to subpoenas so that notice of motion for contempt is not itself in breach of the Harman undertaking in so far as it seeks to rely on documents discovered by Mr Kelly or produced in response to subpoenas.

   15.The reason my application for leave to use documents produced in response to subpoenas also includes documents expected to be produced by ASIC is because:

   15.1Mr Kelly stated in correspondence to the ASX and Mr Richard Stanger that he has made a complaint to ASIC about me (for example see pages 80, 118, 120, 125 and 146 of this affidavit);

   15.2it is more efficient and cost effective to include the documents to be produced by ASIC as part of this application to avoid another applications on the same topic.

   16.On the basis of the matters deposed to and referred to herein, I believe the (sic) that Mr Kelly has caused documents discovered by me in these proceedings:

   16.1to be used for collateral or ulterior purposes; and/or

   16.2to be used to interfere with the proper administration of justice in that discovered documents were provided to a regulatory body for it to investigate claims and make referrals for legal action against me and/or others which would have the effect of placing pressure on me in regards to these proceedings.

The submissions made on behalf of Mr Hilton in support of the second application

1. While the ambit of the second application was broadened by the amended minute filed on behalf of Mr Hilton on 22 May 2023, by correspondence to the court filed on 7 July 2023, Mr Hilton's representatives confirmed that no supplementary submissions would be filed and Mr Hilton relies upon the submissions filed on 12 January 2023 in support of the second application.

2. On behalf of Mr Hilton, it is submitted that the court can be satisfied that special circumstances are evident in the circumstances deposed to by Mr Hilton, which Mr Hilton says are sufficient to warrant the grant of relief.  The court's attention has been drawn to the following.

3. First, that the plaintiffs neither consent to nor oppose the second application.

4. Secondly, to Mr Hilton's contention that there is evidence that Mr Kelly used documents and information from documents discovered by Mr Hilton for purposes other than for which the documents were provided to him.  In this regard, on behalf of Mr Hilton it is submitted that the evidence establishes that:

   (a)there has been an admission by Mr Kelly that he provided a screenshot of the first page of a document discovered by Mr Hilton in this proceeding (being a draft Binding Term Sheet between Riversgold Ltd, Cambodia Gold Pty Ltd and Granite Gold Pty Ltd, with the defendant's document identification number HIL.001.002.2870) to Mr Heng Pheng;[1]

   (b)there has been an admission by Mr Kelly that he provided a screenshot of a document produced by Mr Hilton in response to a request for documents made pursuant to the RSC O 26 r 8(2) by the plaintiffs in this proceeding[2] (being a letter from the Ministry of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017) to Mr Heng Pheng.[3]  Counsel for Mr Hilton notes that the document was also subsequently discovered by Mr Hilton with document identification number HIL.010.001.0127;

   (c)there has been an admission by Mr Kelly that he provided a screenshot of the first page of a document discovered by Mr Hilton in this proceeding (being a draft Binding Term Sheet between Riversgold Ltd, Cambodia Gold Pty Ltd and Granite Gold Pty Ltd, with the defendant's document identification number HIL.001.002.2870) to Mr Jay Klopper;[4]

   (d)there has been an admission by Mr Kelly that he provided a screenshot of a document produced by Mr Hilton in response to a request for documents made pursuant to the RSC O 26 r 8(2) by the plaintiffs in this proceeding (being a letter from the Ministry of Mines and Energy to Cambodia Gold Pty Ltd dated 4 April 2017) to Mr Jay Klopper;[5]

   (e)Mr Kelly wrote to the ASX by letter dated 26 September 2022 and stated 'Further to my previous correspondence to ASX (and ASIC), I advise that, as a result of the discovery process relating to current legal proceedings between myself and John Hilton of Greenwich Equities, I have become aware of further material information previously withheld by Mr Hilton relevant …', and provided the ASX with documents and information from documents discovered documents by Mr Hilton as part of a wide ranging complaint against Mr Hilton including allegations of a conspiracy to exert 'significant influence over the current and previous Board members of Riversgold, at shareholders expense' and a 'multimillion dollar fraud';[6] and

   (f)Bennett (on behalf of Mr Hilton) raised the unauthorised use of Mr Hilton's documents with HHG Legal Group (on behalf of Mr Kelly) and there has been a failure on the part of Mr Kelly to fully disclose and explain his conduct.[7]

   [1] Affidavit of JC Hilton sworn 21 December 2022 pars 10 and 11.5, JCH-9.

   [2] Affidavit of JC Hilton sworn 21 December 2022 pars 5 and 6, JCH-3 and JCH-4.

   [3] Affidavit of JC Hilton sworn 21 December 2022 par 11.5, JCH-9.

   [4] Affidavit of JC Hilton sworn 21 December 2022 par 11.5, JCH-9.

   [5] Affidavit of JC Hilton sworn 21 December 2022 par 11.5, JCH-9.

   [6] Affidavit of JC Hilton sworn 21 December 2022 par 11.6, JCH-10.

   [7] Affidavit of JC Hilton sworn 21 December 2022 pars 11.1 ‑ 11.6, JCH-5 - JCH-10.

5. Thirdly, that Mr Hilton intends to initiate and prosecute the foreshadowed contempt application.

6. Fourthly, that Mr Hilton says that the documents the subject of the second application are required and necessary for the prosecution of the foreshadowed contempt application.

7. Fifthly, when given the opportunity to provide full disclosure and explain the unauthorised use of Mr Hilton's discovered documents for purposes other than which the documents were disclosed, Mr Hilton says that Mr Kelly failed to do so.

8. Sixthly, Mr Hilton says that there is a public interest in ensuring Mr Kelly is made accountable for his conduct.  If the second application is not successful, Mr Hilton will be prevented from prosecuting the foreshadowed contempt application.

9. Seventhly, Mr Hilton notes that the plaintiffs have not raised any concerns regarding the content of the documents the subject of the second application, such as commercial sensitivity, dissemination of personal data, or otherwise.

10. Finally, Mr Hilton notes that he proposes to file the notice of motion for contempt against Mr Kelly in this proceeding and as such, there is commonality between the parties.

Disposition

1. Where one party to litigation is compelled, by reason of a rule or specific order of the court or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use the documents or information for any purpose other than that for which they are given, unless they are received into evidence.[8]  This is an obligation of substantive law, which applies to a range of material.[9]  This obligation is frequently described as 'the Harman undertaking' or 'the Harman obligation'.[10]

   [8] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [69].

   [9] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [70], citing Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [106] ‑ [108] and Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149 [25].

   [10] Referencing the House of Lords decision of Home Office v Harman [1983] 1 AC 280; [1982] 1 All ER 532.

2. The second application assumes that the Harman obligation extends to the documents described at 1.1 to 1.4 of the amended minute filed on behalf of Mr Hilton on 22 May 2023.

1. As to the documents described at 1.1 to 1.3 and 1.4.2 of the amended minute, it is well accepted that discovered documents, documents produced on subpoena and unread affidavits fall within the ambit of the Harman obligation.[11]

   [11] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [69], citing Hearne v Street [96].  See also Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 273 CLR 235 [49], as to affidavits not deployed in open court.

2. In contrast, the chamber summons filed on behalf of Mr Kelly by which the purge application is made (and described at 1.4.1 of the amended minute) is not a document produced by Mr Kelly by compulsion. That said, it is not a document that the public may access as of right pursuant to the RSC O 67B r 6, and it incorporates a schedule which describes documents and information said to have been obtained in this proceeding and disclosed or made available by Mr Kelly. Given the nature of the information incorporated in the schedule to the chamber summons, and given that on filing it did not become a public document, I too proceed on the basis that the court's leave is required before that chamber summons may be used by Mr Hilton for a purpose other than for which it was filed.[12]

   [12] See Treasury Wine Estates Ltd v Maurice Blackburn Pty Ltd [2020] FCAFC 226; (2020) 282 FCR 95 [88] ‑ [89] concerning whether the obligation applied to information derived from a document subject to the obligation in the context of a pleading filed in the Federal Court of Australia, which upon filing became a public document.

3. Turning then to whether the second application ought be granted, I have weighed in the balance the evidence of Mr Hilton (summarised at [21] to [25] above), and the submissions made on Mr Hilton's behalf in support of the application (summarised at [27] to [35] above).

4. In circumstances where:

   (a)there appear to be no factors which count against leave being granted;

   (b)Mr Hilton intends to initiate and prosecute a notice of motion for contempt against Mr Kelly;

   (c)the documents identified are required and necessary for the prosecution of the notice of motion for contempt against Mr Kelly, and therefore reasonably required for the purpose of doing justice between the parties in that application; and

   (d)leave has been sought to use the documents in the foreshadowed contempt application only, and not at large,

   I am satisfied that special circumstances for the grant of leave have been made out. 

5. Given there will be a hearing of the foreshadowed contempt application and the purge application, it is not appropriate that I express concluded views as to whether Mr Kelly indeed used documents and information from documents discovered by Mr Hilton for purposes other than which the documents were provided to him (as alleged by Mr Hilton).  While I have weighed in the balance the evidence of Mr Hilton and the submissions made on his behalf, I make no findings for the purposes of the pending applications.

Conclusion and orders

1. For these reasons, I accept the essentially uncontradicted position of Mr Hilton.  That is, the proposed use of the documents described at 1.1 ‑ 1.4 of the amended minute by Mr Hilton in the foreshadowed contempt application is necessary to his prosecution of that application and would likely contribute to achieving justice between the parties in that application.  There is a public interest in ensuring that all relevant material is before the court in the foreshadowed contempt application to enable the court to discharge its function.  Consequently, I will make orders as promoted on behalf of Mr Hilton in his amended application filed on 22 May 2023.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

LP

Associate to the Honourable Justice Strk

27 JULY 2023