Law Institute of Victoria v Irving

[1989] HCATrans 246

-~

~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M37 of 1989

B e t w e e n -

THE LAW INSTITUTE OF VICTORIA

Applicant

and

DOROTHEA GENEE IRVING,

MARGARET FERME, JANICE

ANGA ZANDAS, SUELLEN

IRVING, D.G. LIMITED and

H.K.N. LIMITED

Respondents

Application for special leave

to appeal

Law

BRENNAN J

DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 13 OCTOBER 1989, AT 11.42 PM

Copyright in the High Court of Australia

MlT7 /1 /SH 1 13/10/89

MR K.M. HAYNE, QC: If the Court pleases, I appear 1vith

my learned friend, MR G.M. RANDALL, on behalf of

the applicant Law Institute. (instructed by

Maddock Lonie & Chisholm)

MR D. GRAHAM, QC:  May it please the Court, I appear with

my learned friend, MR R.L. BERGLUND, for the

respondents to this application. (instructed by

Corrs Pavey Whiting & Byrne)

BRENNAN J:	Mr Hayne.
MR HAYNE:	If the Court pleases. Your Honours, it is

submitted that in this matter there are two questions

that are raised: first, the effect of a statutory

secrecy provision on a party's obligation to produce

documents discoverable in a civil action; second,

the application of the principles of public interest

immunity to the production of documents in the course

of discovery in a civil action. Might I treat those

two questions in that order and, first, deal with

the secrecy provision question.

It is submitted that the question can be put

in this way:  can a party to civil litigation require

production of documents discovered by the opposite

party notwithstanding that a statute makes it an

offence for the officers of the party giving

discovery to communicate the information disclosed

in those documents to any other person.

Your Honours would have seen that the provision in

question in this matter is section 77 of the LEGAL

PROFESSION PRACTICE ACT of Victoria, the provision which is set out in full in the judgments of the

Full Court at pages 73 and 74 of the application

book and it is particularly subsection (2) at
page 74, line 14 and following of the application

book.

BRENNAN J: Is it right to say that this was an application

for discovery not for production?

MR HAYNE:  Your Honour, it concerned production, not discovery,

of documents.

BRENNAN J: That is right.

MR HAYNE:  Production on discovery though. The documents had

been disclosed in the affidavit of documents; objection

had been taken to their production; the issue was

should they then be produced, the documents having

been discovered.

Your Honours, of course, are aware that the

LEGAL PROFESSION PRACTICE ACT requires solicitors

conducting a trust account to appoint auditors. The

MlT7/2/SH	2	13/10/89
Law

Act also permits the Institute to appoint inspectors

to examine solicitors' accounts and Your Honours will see from section 77(1), at page 73 of the application

book, that the Act forbids auditors or inspectors

from revealing information discovered in the course

of their examination of those accounts or, I

interpolate, the other documents to which they

have statutory access under the Act, to any person

except to the council of the Institute.

Subsection (2) forbids the council - that is the council of the corporate body Law Institute - and:

its officers to connnunicate to any person

any information disclosed in -

a report made by the auditor or inspector -

except in the performance of his duty -

that is to say, the officer or council members -

duty or -

and there are other provisions providing for the
information to be made available to the Attorney-General
or to prosecuting authorities, provisions which we
submit may be entirely set to one side in the context

of the present matter.

Your Honours, there are broadly similar

provisions in the legal practitioners' legislation

in each State and territory. In some of that

legislation there is specific provision which permits

connnunications of information obtained in the course

of audit or inspection.	The expression is "in or
for the purposes of proceedings in a court".	The
ACT, the Northern - - -

DAWSON J:	Is production to the court or to the other side?
MR HAYNE:	Your Honour, in the other legislation of which I
speak it would be production at all but in this
case we are concerned here, we would submit, with
production to the other side.  We are not concerned
with the connnonly occurring problem of production to the court as, for example, on subpoena.

DAWSON J: This is not a subpoena, is it?

MR HAYNE: Just so, Your Honour, and the point that arises

here is production to the opposite party.

I should say to Your Honours, however, that

legislation of a kind found in 77(2) is found in

other States; Queensland and South Australia adopting

this formula of no production except in the course of

performance of duty of the officer concerned.

MlT7/3/PLC	3	13/10/89
Law

We would submit that the section raises the

questions of whether production to the opposite
party in the course of discovery is a communication
to a person by the council or its officers of
information disclosed in the report and, obviously,

we would submit, it is, but whether the communication

is a communication otherwise than in the performance

of duty by the council or its officers.

The Full Court held that production of documents

in the course of the discovery process is in
accordance with the performance of the duties of
the council or its officers. The court's holding

to that effect is at page 76 of the application

book at lines 8 to 12. The court held further

that disclosure to the opposite party,or disclosure,

for the court simply did not advert to the nature of
the disclosure - it said that disclosure was not
disclosure to any person. That appears at page 78

to page 79, particularly at page 79 in the first

two lines on that page. Lastly, the Full Court

held that the prohibition in section 77(2) was not

a prohibition that applies to the institute.

That is at page 79 of the application book at line 7.

BRENNAN J:  Does CANADIAN PACIFIC TOBACCO CO present an obstacle

to your argument?

MR HAYNE:	No, Your Honour, and I was about to turn to just
that area.  We would submit that the Court -
this Court that is to say - has not considered
the effect of statutory secrecy provisions on the question of production of documents in the course
of discovery.  The Court, as Your Honour points out,
has considered the equivalent provision of section 16
of the INCOME TAX ASSESSMENT ACT on two occasions,
CANADIAN PACTIFIC TOBACCO CO and also in the MOBIL
OIL (AUSTRALIA) case, 113 CLR 475. But in each of those cases the question was one of whether an
officer of the Taxation Department could give evidence
in a proceeding; in the CANADIAN PACIFIC case give
evidence in a proceeding in the original jurisdiction
of this Court; in the MOBIL OIL case, give evidence
in a proceedings in the Taxation Board of Review. But we would submit that this Court has not
considered the application of section 16 of the
INCOME TAX ACT in relation to the question of
discovery.

The Full Court of the Federal Court has

considered recently the question of the

application of section 16 of the INCOME TAX

ACT in connection with discovery and it did it

in the NESTLE case which is referred to in the

judgment of the Full Court which is the subject of

this present application, the Full Court in this

case relying considerably upon the judgment of the

Full Court of the Federal 'Court in the NESTLE

case, the relevant passages of which are set out

MlT7/4/PLC	4	13/10/89
Law

in the Full Court judgment at pages 77 to 78 of
the application book and I shall not stay to

read them to Your Honours, Your Honours will

have read them already.

BRENNAN J:  Mr Hayne, why is it that the Law Institute,

which is the competent party in litigation of

this kind, is not under a duty to perform the

usual functions of discovery in an application

or in an action of the kind with which we are

here concerned?

MR HAYNE:	There is no doubt, Your Honour, that it is bound
to perform the usual functions of discovery
which are to discover on oath what documents it
has in its possession and to say whether it objects
to production of any of them. There is no doubt
that its duty extends to the making of the affidavit of documents and the revelation of the existence or non-existence of documents but we would submit, with respect, that the question of whether its
duty extends to production of the documents is not answered by simply saying that it has a duty
to perform its duty.  We would submit that the
question thus put is begged if one asserts that there is a duty to produce for the question is . '
is there a duty to produce.

DAWSON J: It is always circular, is it not?

MR HAYNE: Just so.

DAWSON J:  I mean, you would concede, I suppose, that these
documents should be produced apart from the objection
which you say you validly raise.

MR HAYNE: Just so, Your Honour. There is a duty to make

discovery of them.

DAWSON J: And if the objection is based upon the existence or

non-existence of a duty, you do not get any where

by ~ircular- - -

MR HAYNE: Just so, Your Honour, but the reasoning that has

been adopted by the Full Court, and we would say,

also in the NESTLE case in the Federal Court, is

just that circularity of reasoning. It has a

delightful symmetry but the symmetry comes from

circularity.

BRENNAN J: Well, there is no doubt that a circle is inherently

symmetrical.

MR P-~YNE:  That is so, Your Honour.

BRENNAN J: The problem seems to me to be to say, "Well, there is

a duty to give discovery but not a duty to produce

that which is discovered. Why is it that if there

MlT7/5/PLC	5	13/10/89
Law

be any duty at all arising from the function of

the Law Institute in litigation of the present

kind it is not a duty to conform to the ordinary

role of a litigant"?

MR HAYNE:  We do not put it differently, Your Honour. We

do not say that it is not bound to perform to
the ordinary role of the litigant which is to make

discovery of its documents.

BRENNAN J: Quite.

MR HAYNE:	And to state whether it objects to its production.
BRENNAN J:	But your reliance on section 77 excludes from

the notion of the Law Institute's duty the duty

of production.

MR HAYNE: Just so, Your Honour.

BRENNAN J:  And the question is why is it that you exclude

that from the nature of the Law Institute's duty, defining that duty by a reference to the function

that the law Institute performs in defending actions

of the present kind?

MR HAYNE:	Because, Your Honours, we say the evident statutory
intent of section 77 is that these documents are
not to be produced to any person.

BRENNAN J: Perhaps we are going in anti-clockwise direction

around the circle, but why is that not simply

accepted from the section 77?

MR HAYNE:	Your Honour, my answer is that - unsatisfactory answer simply, it is not. Your Honour is right,
we then have come the full cirle.  We would submit,
however, that the reasoning that is displayed in
the Full Court's judgment and, we would say in the NESTLE case, has that circular aspect
giving, we would say, insufficient attention to the
evident statutory purpose expressed in section 77
and we would draw a sharp distinction between
the production that may occur to a court in answer to a subpoena, :for there is no doubt that the
Institute's duty goes so far as to obey the orders
of a court - of course it does - but relevantly speaking, the only direction of the court
contained in its rules as triggered by the notice
of discovery is,"Discover on oath and say whether
you object to production." Your Honours, the point has been made. It does not improve or diminish by mere repetition.

Might I turn away from the first point which

is the application of the - might I just say one

other - - -

MlT7/6/PLC	6	13/10/89
Law

DAWSON J: It really comes down to this, does it not,

Mr Hayne, putting it in colloquial language:

subsection (2) says you shall not produce

documents unless you have to. And there is

nothing in the rules relating to discovery
or production which says you have to in all

circumstances.

MR HAYNE: Just so.

DAWSON J: And therefore you say, "Well, then, the

section does apply in that situation."

MR HAYNE: Just so, Your Honour. It is as simple and as

narrow a point as that. Might I just say

something about the generality of the application

of that point. I have referred to the INCOME

TAX ACT provision, I need not dilate on that

point. Secrecy provisions of this kind are

found in very many kinds of legislation. The kinds of secrecy provision do differ from Act

to Act but provisions of a kind generally similar
to this are to be found in areas as diverse as

the Connnonwealth LIFE INSURANCE ACT, the Victorian

REAL ESTATE AGENTS ACT, the point is one that

affects a great number of statutory bodies.

BRENNAN J: What if an order for production on discovery

is made by a court albeit made inconsistently

with the argument that you would advance, what

then is the duty of the Law Institute?

MR HAYNE:	The duty is to obey the law including the
directions given it by the court, Your Honour,
in all circumstances.  We do not say that it
stands above or apart from the law but the question of whether the court ought, in a
particular case, mEke that order may turn on
questions of the kind that are raised by the
second aspect or the second question which we
question, that is, the application of public seek to agitate. Might I turn to that second interest innnunity considerations?

We would submit that the question that

arises under this aspect of the matter can be

put in this way:  is a claim for public interest

innnunity which was held by the Full Court to be a

claim open to the Institute - I refer to page 81 -

necessarily defeated - and I emphasize the word

"necessarily" - by the fact that the documents

have a sufficient connection with the subject-matter

of the litigation to warrant their discovery.

Put more broadly, the question, we would say, is how should a court balance the interest of a civil

litigant seeking discovery.

MlT7 /7 1 PLC	7	13/10/89
Law

DAWSON J: Just remind me, would you, Mr Hayne, what the

principle is? It is anything that will assist

your case or detract from the case of the other

side?

MR HAYNE:	Or lead to a train of inquiry which would advance
the plaintiff's own case or damage that of the defendant.
DAWSON J:	Thank you.
MR HAYNE:	The customary formulation is the PERUVIAN GUANO case formula, a case which one can never ever forget with a name like that, referred to by
Mr Justice Menzies in MULLEY V MANIFOLD, but
it is leave to a train of inquiry which is
sometimes described as adjectival relevance
rather than substantive relevance.

Now, Your Honours, the Full Court in this

case did not inspect the documents in respect

of which the claim for public interest immunity

was made and thus the Full Court made no

assessment of the importance of the particular

documents in this case to the plaintiff's particular

case. The Full Court concluded, we would say,

that it was enough to show that the documents

had been discovered and had, as I have described

it, that adjectival relevance referred to in the

PERUVIAN GUANO case.

DAWSON J: Is the discovery an admission that that

test is satisfied in relation - - -

MR HAYNE:	It would have to be so, yes, Your Honour, that
it has that adjectival relevance. But Your Honours
will recall, of course, that when this Court has
examined as it has the application of public
interest inm.mity in the, we would submit, significantly
different area ot subpoenas issued to produce
documents to the eourt in the course of criminal
proceedings, and I refer to SANKEY V WHITLAM
and ALISTER's case,  the Court has there spoken
of the balancing process that must be involved between the two competing public interests; the public interest in due administration of justice, the public interest of the kind asserted as
grounding immunity.

We would say that the question that is

raised now by the Full Court's judgment is how

should a court proceed to deal with a public

interest immunity claim in this context of

discovery of documents, whereas Justice Dawson
puts to me there is, in effect, the admission
by the party seeking to promote the claim that

the document has or the documents have the relevant

adjectival relevance to the issues before the Court.

MlT7/8/PLC	8	13/10/89
Law

We would say that it is not enough for the Court

to say that mere adjectival relevance, of itself,

necessarily defeats the claim and we would point

and say that the Full Court was in error in its

reasoning when, in effect, that is what it did

in connection with the public interest immunity

claim.

I have said to Your Honours that the

Court has examined these matters in the context

of subpoenas in criminal matters in the cases

I have mentioned. Of course, the parallels are there and are close but might I say to Your Honours

that the significant different we would point to

is a difference between production to the court

and production to the opposite party, albeit

production to an opposite party bound about by
those limitations on the use to which documents
discovered may be put. We would say that there is

a significant difference especially in the light of

the evident statutory purpose reflected in
section 77.

Your Honours will be aware that the House of Lords has examined these questions in the context

of discovery as opposed to subpoena cases on a

number of occasions relatively recently: SCIENCE

RESEARCH COUNCIL V NASSI in 1980; BURMAH OIL

and BANK OF ENGLAND, (1980) AC 1090 and AIR CANADA V

SECRETARY OF STATE FOR TRADE, (1983) 2 AC 394.

BRENNAN J:  Is there anything in any of those cases which we

should have regard to in this case, Mr Hayne?

MR HAYNE:	There is nothing that bears directly on the
submissions that I would make to Your Honours
about these matters.  I would say only that the
House has considered the matters.  The House has
affirmed the desirability of a balancing process. On occasions, the House, albeit by a majority,
has itself examined documents in respect of which
a claim has been made.  I should also say to Your Honours that
Chief Justice Mason, sitting as a single Justice
of the Court, did consider a question in connection with discovery and inspection in AUSTRALIAN NATIONAL
AIRLINES COMMISSION V THE COMMONWEALTH, 132 CLR
582, that being the case of a TAA aircraft that
collided with a Canadian Pacific aircraft on the
runway at Mascot, I think it now must be quite some
years ago, and the question was ought the cockpit voice recorder be produced for inspection by the opposite party, the public interest immunity claim being that there would be industrial turmoil of a kind not seen then, if it were.

BRENNAN J: And that claim failed, did it not?

MlT7/9/PLC	9	13/10/89
Law

MR HAYNE:	His Honour first inspected - he heard the tape
himself and then held the public interest immunity claim was not made out and I think only selected parts, being the relevant parts of the cockpit voice recorder, tape or transcript, were made
available to the party who sought its production.

BRENNAN J: And, of course, that is a critical consideration:

what protection can be given in an order for

production to safeguard the public interest which

is to be served.

MR HAYNE: Just so, Your Honour.

BRENNAN J:  And in this case the proposal is that the names

of clients and their transactions should be

obliterated.

MR HAYNE:	Your Honours, the Full Court, yes, has treated it as a case involving only protection of informants.
We would say that is an error.  We would say that
the immunity claim that was sought to be raised
was a much broader one and that the court could
not and ought not to have.concluded that it was
enough to white out the relevant names without
having performed the balancing task, the necessary precursor to which was inspection of the documents.

Your Honours, those are the two issues that

arise. We would submit special leave should be

granted. If the Court pleases.

BRENNAN J: Yes, Mr Graham?

MR GRAHAM:  If the Court pleases. May I take one moment to

remind the Court that the applicant here seeks

special leave to appeal to challenge an interlocutory

order which was made by His Honour Mr Justice Marks

in the exercise of his judicial discretion.	As
this Court has stated on many occasions,
interlocutory appeals are to be strenuously
discouraged.

DAWSON J: This type of question would only ever arise at an

interlocutory stage.

MR GRAHAM: With respect, Your Honour is probably right but

it is still a matter to bear in mind when one comes

to the question of whether this is an appropriate

case for these issues to be ventilated and that is

a matter which I will come to later.

We would also seek to remind the Court that interlocutory appeals have the capacity, as this

proceeding demonstrates, to cause considerable

delay and we would note that we are approaching

today the anniversary of the day when Mr Justice Marks

made the order which has precipitated today's

application. So we have been held back in the pursuit

of claims which date back for more than 10 years by

MlT7/10/PLC	10	13/10/89
Law

nearly 12 months by this dispute and it is a

matter, naturally enough, of concern to the
respondents that they are disabled from pursuing

their claim by reason of the points of principle

which the Law Institute wishes to ventilate in

this case.

May I go to the points that my learned

friend raises in reverse order from that which

he adopted, going to the public interest immunity

point first? We would submit that the Supreme

Court of Victoria has not decided the issue in

the case which is important for the Law Institute

in a fashion which is adverse to the position of

the Law Institute. The case we would have

accepted raises a point of importance to the

Institute concerning the scope or availability of

public interest immunity in respect of documents

coming into existence in the course of the

statutory provisions of the LEGAL PROFESSION

PRACTICE ACT. That has never been in dispute and

the Full Court accepted that some such immunity

did exist, and it said as much at page 82 of the application book. The order of Mr Justice Marks was moulded in a fashion which recognized the

existence of a right in the Institute to claim

public interest immunity in respect of documents

which would disclose the identity of persons

providing information. That would be a point of

importance but there is nothing that this Court,

with respect, could add to what the Full Court has said in that regard by a full hearing, the point would be vindicated if special leave were

refused and an expression of agreement were given

to what the Full Court said on that general point.

Now, the second point which we desire to

make on this aspect, if the Court pleases, is that

the case is not an appropriate vehicle for the

purpose of enabling this Court to consider the

issue which is claimed to be important. We would

wish to hand to the Court a document which is

derived from material in the application book.

What this document records is the descriptions of the documents in dispute adopted by the Full Court as set out at pages 71 to 72 of the application:_

book together with the dates of the documents as

indicated in part 2 of the affidavit of discovery

and it can be seen that none of the documents came

into existence at a date later than 1986.

Now, according to the material before the

Supreme Court of Victoria, particularly the affidavit of Mr Glennnen, which is to be found towards the end of the application book, the system of basing the Law Institute's process of

policing solicitors' trust accounts using exclusively

information provided by informants was not adopted

MlT7/ll/PLC	11
Law

by the Institute until 1987. That becomes

apparent from Mr Glennen's affidavit, particularly
the passages that are reproduced at pages 126 to

129. So that on the face of things, although the

claim the Institute wishes to ventilate may be
well founded, this case, in our submission, does
not raise the issue.

Further, the authorities in this branch

of the law, we submit, indicate that if a claim

for privilege is to be sustained it is necessary

that there be an affidavit by a deponent who has

himself read the documents and formed a view about

their nature and contents. There was not such an

affidavit in this case.

Next, we say the case is an inappropriate

one for this Court to deal with as the vehicle for

resolving the issues said to be important because

simply by looking at the descriptions of the

documents in the list, it is by far from apparent

that the documents themselves would have attracted

privilege of the kind claimed in any event.

BRENNAN J:	We need not trouble you further, Mr Graham.
MR GRAHAM:	The Court does not wish to hear me on section 77?
BRENNAN J:	No.

MR GRAHAM: If the Court pleases.

BRENNAN J:	Mr Hayne, have you anything to say in reply?
MR HAYNE:	No, if Your Honours please.

BRENNAN J: Although we have heard the interesting argument

advanced by Mr Hayne in this matter, having read

the judgments in the court below, the Court is
not satisfied that there is sufficient doubt

attendant upon the result which was arrived at

case. Accordingly, special leave will be refused. to justify the grant of special leave in this

MR GRAHAM:  I would ask for an order that the applicant

pay the costs of the respondents of this application.

BRENNAN J:	Mr Hayne?
MR HAYNE:	There is nothing I can say, Your Honour.
BRENNAN J:	It will be refused with costs.

MR GRAHAM: If the Court pleases.

MR HAYNE: If the Court pleases.

AT 12.14 PM THE MATTER WAS ADJOURNED SINE DIE

MlT7/12/PLC	12	13/10/89
Law