Leigh-Mardon Pty Ltd v Titan Corp Ltd

[1996] FCA 482

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY  No VG 346 of 1993

GENERAL DIVISION

B E T W E E N :

LEIGH-MARDON PTY LTD
  Applicant

A N D :

TITAN CORPORATION LTD AND OTHERS
  Respondents

COURT:         NORTHROP J

PLACE:          MELBOURNE

DATE:             6 JUNE 1996

REASONS FOR JUDGMENT

A number of matters are before the Court in a proceeding which already has dragged on far too long, and in which a certain degree of momentum has now developed to enable the matter to be ready for trial in the not too far distant future.  In this regard, the parties are now, if I may say so, co-operating much more than they have in the early stages of this proceeding with the result that the task of the Court has been made easier and again, if I can say so, the task of the parties will be assisted when it comes to trial.  In particular, I would like to express my appreciation to those involved in the matters before me on this occasion for the way in which, over a number of days it must be said, they have been able to refine the issues which I must decide and present submissions in a form which can be understood fairly clearly and be determined without having to reserve
the matter to consider in great detail an amorphous mass of material which happens so often.  At an earlier stage I did indicate that for the purposes of assisting the parties to prepare for trial, I did propose, if possible, to make rulings on the matters before the Court and give very brief reasons for so doing, but that if any party desired to seek leave to appeal, I would be prepared to give more detailed reasons for the orders I will make.  That proposition still applies.

In summary, the matters before the Court take various forms.  The respondents had obtained discovery from the applicants.  The applicants had discovered certain documents including eight witness statements but claimed privilege for the non-production of those documents.  The fact that they were discovered suggests that they are relevant to issues between the parties.  Privilege was raised on the basis of legal professional privilege but those matters have been resolved as between the parties.  I am not too sure just what way that is going, it does not really affect me at the moment.  Also there is a subpoena issued on behalf of the respondents to the solicitor for the applicant for the production of those documents.  Questions of public interest immunity arise in relation to those.  That is an issue which the Court must determine.

In addition, the respondents have served a subpoena on Detective Sergeant Brouwer of the Victorian Police to produce documents - in fact, two subpoenas have been issued; one dated 10 April and one dated 14 May.  There is a motion by Detective Sergeant Brouwer to have the subpoena set aside on traditional grounds, and the Court, at an earlier stage, made orders that certain parts of the subpoena were too wide, but adopting the blue pencil rule indicated that the other parts were not too wide but were still
subject to the objection in relation to public interest immunity.  That issue has been raised by way of objection to the production of the documents.  The subpoena, dated 10 April, directed to Detective Sergeant Brouwer, required the production of the documents set out in the schedule, and I will read those parts of paragraph 1 (a), (b), (c) but leave out the reference to the additional persons, which part was dealt with by the earlier order:-

"1.All:

(a)       written statements;

(b)       notes or records of interview;

(c)audio or video tape recordings of the making of such statements or interviews and any transcription of such audio or video tape recordings (paragraph 1(a), (b) and (c) hereafter collectively called "the Statements");

obtained or taken, as the case may be, by the Victoria Police from each and every person named in the attached Schedule being persons referred to in paragraphs 12A 2 to 12A 21 of the Second Further Amended Statement of Claim ("the named persons")."

Paragraph 2 and the relevant part of paragraph 3 are:-

"2.All documents, including letters, diary notes, memoranda, audio or video tape recordings or other form of electronic recording medium and the like passing between the Victoria Police and Maddock Lonie & Chisholm or Leigh-Mardon Pty Ltd regarding the provision by the Victoria Police to Maddock Lonie & Chisholm or Leigh-Mardon Pty Ltd of the Statements.

3.For the period 1 January 1993 to the present, all documents, including letters, diary notes, memoranda, audio tapes or other forms of electronic recording medium and the like which relate to or record all conversations, meetings and interviews (whether formal or informal) between officers and members of the Victoria Police and the named persons ...".

The named persons are those set out by name in the schedule to the subpoena.
           The second subpoena, dated 14 May, is directed to Detective Sergeant Brouwer.  It lists a large number of former clients of the respondent group of companies, described as "former clients" and requires the production of :-

"All:

(a)computer tapes from the Pertec and Nixdorf computer systems previously owned or operated by the Keydata group of companies ("computer tapes");

(b)hard copies made or obtained by the Victoria Police of the computer tapes;

(c)summaries and analyses of uplifts allegedly effected by the Keydata group of companies to the charges rendered by them to the former clients made or obtained by the Victoria Police and derived from the computer tapes;

(d)all of the documents referred to in paragraphs 1, 3, 4 and 5 of Schedule 2 of the List of Documents sworn on 14 November 1994 by the State Rail Authority of NSW in this proceeding, a copy of which is attached to this subpoena for production."

The subpoena directed to the solicitor for the applicant is dated 10 April 1996.  It is in a similar form, but not so extensive, as the first subpoena directed to Detective Sergeant Brouwer.

Before proceeding further, it is important to note that there are unusual features in this case in that the action brought by the applicant arises out of a sale of a business being conducted by the Keydata group of companies.  Claims are made that the activities being conducted by Keydata involved over charging to their clients in relation to services provided with the result that the amount paid by the applicant was greatly in excess of the true value of the business sold.  The activities engaged in by the Keydata group have attracted the attention of the Victoria Police which has for about three years now been
conducting an investigation into the possible criminal activities of unnamed persons in relation to the same series of activities.  In the result, the respondents have none of the official documents, including electronic documents, which normally would have been used in its business activities.  Those documents have been given to the applicants under the terms of the sale of the business.  Some of those documents have been seized, or are in possession of, the Victoria Police.  To that extent, the respondents are at somewhat of a disadvantage in preparing their defence to the action brought against it in the civil proceedings.  This is by way of background information only.

As far as the claim for public interest immunity is concerned, the Court has had advantage of very full written submissions and very helpful oral submissions.  Public interest immunity arises in cases of this kind from a conflict between two public policy matters.  The policy of ensuring that in litigation, the parties are able to present their case to the Court in the most efficient way, in the most practical way, and for that purpose to have the advantage of reference to all relevant documentation and oral evidence.  The conflicting policy arises from the fact that in some cases it is in the public interest that some matters should not be disclosed because of the adverse effect disclosure could have on the public interest generally.  In many cases it is for the Court to adopt a balancing exercise to determine between these two conflicting policies.  The authorities also show that the claim for the immunity, even though it might be taken by the Court itself, in most cases is taken by a party or by a third party and the authorities show that there are different types of immunity and different ways of establishing the claim for the immunity.  A broad distinction has been drawn in the past between immunity from a class of documents and immunity from a particular document said to be the "content" approach. 
In the present case, the immunity claimed on behalf of the Detective Sergeant Brouwer seems to have vacillated to some extent between the class immunity and the content immunity, but from the submissions made and from the evidence before the Court, it seems clear to me that there is no basis for class immunity.  The immunity, if it arises, must depend upon the content of the documents, and I use the word documents to include electronic material.

In these circumstances, the authorities show that it is important that the claim for immunity must be made by a person with sufficient authority to make the claim and who has a knowledge of the contents of the documents to enable that person to make the claim based on the immunity and to explain the method by which the public interest will suffer if the immunity is not granted.  In the present case, initially, the affidavits filed on behalf of the claim for immunity were not sufficient to establish that case.  The matter was adjourned to enable further affidavits to be given and eventually the final affidavits were only filed this morning.  Counsel for the respondents have made a very strong attack on the adequacy of those affidavits as being sufficient for the purposes of establishing the immunity.  In addition a confidential affidavit has been filed in support of the claim for immunity but parts of that affidavit have been placed before the Court from which has been excluded those parts which are said to be confidential and should not be disclosed.  At the same time, counsel for Detective Sergeant Brouwer has urged the Court, if in doubt, to look at the whole of the contents of the confidential affidavit and, if necessary, at the documents themselves to determine the matter.  There appears to be no doubt that the Court has that power, but it is a power of last resort.  In the present case, the Court
does not consider it necessary to look at the whole of the confidential affidavit nor at the documents themselves.

On all the material before the Court, the Court tends to the view that there has not been sufficient affidavit material before the Court to establish the claim for the immunity.  Difficulties arise from the fact that there may well be a large number of documents involved in this case, and senior officers in the police force have sworn affidavits of having read the documents, but there is still not, in my opinion, a sufficient tie between their opinions and their knowledge of the case to establish the immunity.  In this regard the affidavit of Detective Sergeant Brouwer, in my opinion, is not by a person of sufficient seniority to take the matter much further.  He is the officer in charge of the investigations undertaken by the Victoria Police over the last few years.  To a large extent he is very much involved in all those activities, and it is hard to believe that he is not, to some extent, personally involved.  This also highlights the fact of the need for a senior person in authority to make the final decision.  But in any event, even if otherwise the claim could be established by the affidavits, on balance of conflicting principles, I would find in favour generally of the respondent.

This is a case where the inquiries have been going on for a lengthy period.  This is a case where the names of the persons who have made witness statements are known or disclosed.  This is a case where a number of witness statements are now in the possession of one of the parties.  It is a case of what might be described white collar crime.  There is no suggestion of any violence or threats to life, or matters of that kind.  It is a case where the parties as between themselves have admitted, I should say the applicant has
admitted, that the witness statements obtained by it are relevant documents.  In my opinion there is no doubt that the other witness statements are relevant. 

This, if necessary, goes to the question of the forensic need for the production of the documents;  the legitimate forensic purpose.  This is not a case of what has been described as the typical informer case, and the need to keep confidential the name of the informer for the protection of that person.  In addition, this is a case where as far as the applicant was concerned, names of possible witnesses were given by the police to the solicitors for the applicant, so that they could contact the witnesses who had been warned that they need not say anything, but could decide for themselves what they did do. 

Having regard to all these factors, in my opinion, this is a case where, on balance, the immunity should not be allowed except in the areas which have been agreed to by the parties.

In the result, as far as paragraph 1 of the subpoena to Detective Sergeant Brouwer is concerned, the subpoena of 10 April, the objection to production based upon the immunity is rejected.  Paragraph 2 is no longer being pursued.  Paragraph 3 relates to the primary documents used in the preparation of the witness statements recording conversations, meetings and interviews between officers of the police and the named persons regarding the investigation by the Victoria Police of the allegations of overcharging referred to in the particulars of the further amended statement of claim.  In my opinion, they came within the same general principles as the final witness statements, and the objection to production of those documents is overruled.

As far as the subpoena dated 14 May is concerned, paragraphs (a) and (b), as I understand it, can be resolved as between Detective Sergeant Brouwer and the respondents.  The arrangement is subject to the provision of paying the cost of producing what is being sought.  If need be I will make orders in relation to that after hearing parties on the form of any order.  Paragraph (c) is no longer in issue.

As far as the subpoena to Mr Henry, the solicitor for the applicant, is concerned, and the question of the production of the eight witness statements, the question of the legal professional privilege having been resolved between the parties, the issue relates only to the public interest immunity.  From what has been said already, in my opinion, that claim cannot be allowed in this case.  So, the effect of what has been said is that in substance the objections taken on behalf of Detective Sergeant Brouwer are overruled except to the extent mentioned.  Orders will be made for the production of the documents other than those which have been specifically dealt with. 

Accordingly, the following orders in substance should be made with respect to the other two subpoenas:

1.Dealing first with the subpoena, dated 10 April 1996, directed to Detective Sergeant Arthur K. Brouwer the objection to production, insofar as it applies to paragraphs 1 in relation to named persons and paragraph 3 in respect of named persons is not allowed.  There will be a stay of seven days.

2.Insofar as the subpoena directed to Detective Sergeant Arthur K. Brouwer, dated 14 May 1996, is concerned the objection to production insofar as it relies or relates to paragraphs (a), (b) and (d) the objection is disallowed on condition that the respondent pays the reasonable costs of Detective Sergeant Arthur K. Brouwer in copying the documents referred to in paragraphs (a), (b) and (d).  There will be a stay of 7 days.

This is one of those difficult cases where the general rules as to costs of the person subpoenaed, have no general application.  Although there have been opposing arguments there have not been opposing parties to litigation in this Court.  Normally a person who is required to produce documents pursuant to a subpoena is entitled to the costs of getting those documents to the Court, but when objection is taken to the production the position is not so clear.  It might succeed in part or might fail but in any event on the facts of this case both in relation to the motion brought with respect to the subpoenas and on general argument it seems to me the only fair way of dealing with it is to make no order as to costs one way or the other.

I reserve costs as between the parties to the action.

Orders made accordingly.

I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment of The Honourable Justice R.M. Northrop.

Associate:

Date:

ATTACHMENT

Counsel for the Applicant:  Mr G.A.A. Nettle QC
  Mr N. Lucarelli

Solicitors for the Applicant:                  Maddock Lonie & Chisholm

Counsel for the Respondents:    Mrs R. Weinberg QC
  Mr M. Robins

Solicitors for the Respondents:  Jerrard & Stuk

Counsel for Det. Sgt. Bouwer:  Mr P.G. Nash QC

Solicitors for Det. Sgt. Bouwer: Australian Government Solicitor

Date of Hearing:  6 June 1996