Obeid & Ors v Lockley & Anor

[2018] HCATrans 239

[2018] HCATrans 239

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S126 of 2018

B e t w e e n -

EDWARD MOSES OBEID

First Applicant

MOSES EDWARD OBEID

Second Applicant

PAUL EDWARD OBEID

Third Applicant

EDWARD JOSEPH OBEID

Fourth Applicant

and

GRANT LOCKLEY

First Respondent

PAUL GRAINGER

Second Respondent

Application for special leave to appeal

BELL J
KEANE J
NETTLE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 16 NOVEMBER 2018, AT 10.19 AM

Copyright in the High Court of Australia

____________________

MR G.O’L. REYNOLDS, SC:   May it please the Court, in this matter I appear for the applicants with my learned friend, MR D.P. HUME.  (instructed by Deutsch Partners)

MR P.S. BRAHAM, SC:   If your Honours please, I appear for the first respondent with my learned friends, MR R.C. SCRUBY, SC and MR B.K. LIM.  (instructed by Henry William Lawyers)

MS E.A. CHEESEMAN, SC:   If it please the Court, I appear for the second respondent with my learned friend, MS S.A.C. PATTERSON.  (instructed by Crown Solicitor’s Office (NSW))

BELL J:   Yes.

MR REYNOLDS:   Your Honours, can I start with what, we submit, are the special leave points, that is, significant issues of law which may attract your Honours’ interest and attention.  The first, as your Honours will have seen from our submissions, is what is the appropriate mental element in relation to damage for the tort of misfeasance?  The two competing tests, as your Honours have seen, are, on the one hand, a recklessness test and, on the other, a test of foreseeability of harm.  There is a split in intermediate Courts of Appeal on that issue and, we submit, that is a significant question of law which warrants this Court’s attention.

The second issue which we have highlighted is that inevitably there will be an issue raised by way of notice of contention in this case ‑ I do not understand it to be disputed ‑ about what is the appropriate ambit or definition of the notion of “public office” or “public officer” within the meaning of this tort.  There is, as the Chief Justice noted below a difference of opinion between the approach taken in Victoria, which was what the primary judge followed, and the approach taken in the New South Wales Court of Appeal.  So, pausing there, we say there are two issues significant in their own right on which there are divergences in intermediate Courts of Appeal.

Now, I have gone through that fairly quickly and the reason is that my perception, rightly or wrongly, is that the gravamen of the case against me on leave is not so much that we do not have important questions of law but rather that there are other issues which make this case an inappropriate vehicle for leave.  Can I deal with those directly?

The three points which are raised against us in that regard really stem from the judgment of the Chief Justice, in particular at paragraph 152, and if I may trouble your Honours briefly to go to that passage and I am not – that paragraph.  I am not going to read it to your Honours but I will summarise the effect of it.  There are really three points that are found against my clients there which I need to address and to try and attempt to persuade your Honours that we have a sufficiently good case that your Honours would want to consider the issue.

Now, the first point that is made in the middle of that paragraph or towards the top actually of 152 is this, the Chief Justice says that my client’s case on causation was flawed and the reason is, he says, because the trial judge was correct to hold that the tendering of the redacted heads of agreement broke the chain of causation.

Now, we submit, that there is a very, with respect, clear problem with that assertion and, in short, it is that the primary judge did not make that finding and made findings which are wholly inconsistent with that.  Can I take your Honours in that regard to the primary judge at paragraph 281 where ‑ this is page 92 of the application book ‑ he concludes that:

There is no foundation for a conclusion that the newspaper, armed with the unredacted version, would have reported things any differently to the way that it did or that this was foreseeable.

It also said on the previous page at paragraph 275 that “There was nothing exceptional” in a suppression order being sought and granted.

Your Honours know that the primary judge held that there was nothing unlawful or tortious about the redaction or suppression and, when one puts those four factors together, we submit that it is very clear that the primary judge did not make the finding ascribed to him by the Chief Justice at paragraph 152.  He did not find a break of the chain of causation in the manner suggested or that there was in the manner suggested a novus actus.

So that is the first difficulty which I have, which I have attempted to address directly.  The second problem I have with paragraph 152 is the point that is made by the Chief Justice right at the top of the paragraph where he says that:

The primary judge was correct in concluding that reputational harm caused in this fashion ‑

I underline the words “in this fashion”:

was not reasonably foreseeable ‑

Now, the words “in this fashion” pick up the words in the previous paragraph at the bottom “in this manner” – that is, caused in the particular way which is set out in paragraph 151.  What we submit the Chief Justice is clearly saying there is that reputational harm caused in this particular way – that is, by publication of a redacted version with a later suppression order – was not reasonably foreseeable.

Our respectful submission in relation to that is that that reasoning is flawed and it is flawed again, I submit, with respect, in a fairly fundamental way and that is that it is based on the notion that the precise trail, as it were, of causation must be foreseeable, rather than the kind of harm, which here is reputational harm, is foreseeable.

We have referred in our submissions to the case law that is against that proposition and I respectfully submit that that is a well‑established proposition and that the reasoning of the Chief Justice runs counter to that.

KEANE J:   But the point the Chief Justice is making is that, even on the test for the mental element that you propound, reasonable foreseeability of reputational harm, you have current findings of fact against you.  So the question of law that you want this Court to determine just does not arise on the facts.

MR REYNOLDS:   The problem is twofold.  The first is, when the Chief Justice does address it, he addresses it on the wrong test.  That is the first point.  The second point is, your Honours cannot point and my friends cannot point to any section of this judgment where there is a detailed review or even a partial review of the case which we have mounted on why reputational harm was reasonably foreseeable.

All you get is this, again with respect, one‑liner, which is repeated again at paragraph 203 – that is, not reasonably foreseeable in this fashion.  Even the primary judge, when he dealt with it, we get another what I will call, with respect, one‑liner.  This is paragraph 338, where it says in the last sentence:

It is also difficult to see what damage could have reasonably been foreseen.

That is it.  We have put a very extensive submission in our written submissions ‑ paragraphs 23 to 31.

BELL J:   An extensive submission that invites this Court to overcome concurrent findings below in the event you are to succeed on the mental element.

MR REYNOLDS:   With respect, my client’s position is wholly contrary to what your Honour has just put to me.  The reason is that the Chief Justice’s consideration cannot come within the doctrine of concurrent finding of fact because his Honour posits a test which is (a) wrong and (b) different from that which was applied by the primary judge.  And if I can add a final point to that ‑ ‑ ‑

BELL J:   What is the first part, the test wrongly posed?

MR REYNOLDS:   Yes, because again, if we go back to basics, on foreseeability, the question is not, could the defendants have foreseen this particular train of harm leading to that damage.  That is not the law.

BELL J:   So, that is the construction you place on paragraphs 151 and 152.

MR REYNOLDS:   I submit, it is a compelling construction ‑ ‑ ‑

BELL J:   Yes.

MR REYNOLDS:   ‑ ‑ ‑ and certainly an arguable one and certainly arguable enough for your Honours ‑ ‑ ‑

KEANE J:   Why is it not simply his Honour’s response to the case that was actually made by your side?

MR REYNOLDS:   Well, the other difficulty, your Honour, is that there just is not any examination of how this case works about whether it is reasonably foreseeable.  You just get these two one‑liners ‑ as I am submitting I hope, with respect ‑ which do not go into any detail at all, do not deal with the case and one is clearly on a wrong test, the other is just not reasonably foreseeable.  Well, your Honours, we submit, this was not only an arguable case on reasonable foreseeability but quite a compelling one.  I have only got a limited amount of ‑ ‑ ‑

KEANE J:   Well, maybe not so compelling.  I mean, your case is that the officers video a contract, your client is then cross‑examined in ICAC on a redacted version of a contract, somehow that is said to have caused reputational harm because the cross‑examination is reported and your case was that it was the redacted version or it was the fact that the cross‑examination was on the redacted version rather than the full version that caused the harm.  Now, why would it be reasonably foreseeable by the officers doing the videoing that your client would suffer harm by being cross‑examined on the contract, whether redacted or not but particularly if it were to be redacted?

MR REYNOLDS:   Well, your Honour, because your Honour is introducing there in that formulation the very wrong test which we, with respect, submit the Chief Justice embraced; that is, your Honour is saying, well, hang on, look at all these things that happened.  That little bit was not reasonably foreseeable.  The correct test is to say, looked at, at the point when they did this wicked thing of grabbing or videoing these documents, knowing they were outside the warrant, is whether reputational harm ‑ consequential on that videoing which is then given to ICAC ‑ whether reputational harm is reasonably foreseeable.

Now, we say we are going to put a case, if leave is granted, on recklessness on that.  If you have a situation where you have officers who know ICAC’s functions about corruption and the exposure of it and the public hearings that happen, they are here executing a warrant to garner documents connected with a current ICAC corruption investigation.  The warrant relates to a corruption allegation against Mr Obeid and his family.  They must know that whatever matter that they are seizing or videoing may be used to investigate or expose corruption by members of that family.  Remembering also that at the time this all happens ‑ ‑ ‑

KEANE J:   But it is only going to cause reputational harm if it does expose corruption.

MR REYNOLDS:   Well, your Honour, it all depends.

KEANE J:   If it just shows that he is a party to a contract that is perfectly innocent, there is no prospect of that.

MR REYNOLDS:   I am sorry, your Honour, no, not only if it exposes corruption.  This material, if it is deployed in any way, is capable of affecting reputation regardless of whether it exposes corruption because what lies at the heart of this – and they had the two documents that showed it – is that Mr Obeid – this is a heads of agreement – his family acquired a one‑third interest under that agreement in Australian Water Holdings.  The other agreement shows that there is a proposal that the State Government enter into a billion dollar contract with Australian Water Holdings and this is a man of whom it is notorious that allegations have been made against him of corruption that he looks after the financial interests of his family rather than the interests of the State of New South Wales.

Obviously, all of this can lead to agitation of the issue about whether or not his involvement or his family’s involvement in acquiring those shares was done corruptly.  The investigators say, as your Honours will have seen, interesting, why would they have this?  And neither of them gave evidence – and remember are talking again, with respect, about foreseeability ‑ the question of what was actually foreseen by them would be important on reasonable foreseeability.

So, in short – and I am sorry to take time going into that – we submit there is a good case, not just on reasonable foreseeability, but on recklessness, and not only a good case on reasonable foreseeability, but one which my learned friends cannot point to has even been examined.  I ask rhetorically where in this application book is there an examination of it?

BELL J:   I do not think we are here to answer questions.

MR REYNOLDS:   No, I am not asking your Honour a question.

BELL J:   Yes, well, I think you had a second aspect.

MR REYNOLDS:   Well, I have just dealt with the second aspect of the Chief Justice’s reasoning at ‑ ‑ ‑

BELL J:   I am sorry, you are still then on your first point, are you, Mr Reynolds, as opposed to the question of the appropriate ambit of ‑ ‑ ‑

MR REYNOLDS:   The first point was on novus actus; the second point was wrong test on foreseeability.  The third ‑ ‑ ‑

BELL J:   I am sorry, I noted you were announcing that there were two special leave questions.  The first was the appropriate test and the second the appropriate ambit of being a public officer.

MR REYNOLDS:   Yes.

BELL J:   Now, are you still on your first point?

MR REYNOLDS:   No, your Honour, I tried to explain that I only dealt with both of those issues briefly.  What I have been dealing with after about the end of the second minute is the issue of whether this is an appropriate vehicle by dealing with the, albeit less interesting, alternative findings by the Court of Appeal at paragraph 152.  I have attempted to deal with two of those.

BELL J:   And that has been focused on why it is an, in your submission, inappropriate vehicle to deal with your first point.

MR REYNOLDS:   First two, yes.  And these are not reasons why your Honours should not grant leave because there are real problems with these three points here in paragraph 152.  Now, I have dealt with two.  First is novus actus.  The second is the test of reasonable foreseeability.

The third is the Coulton v Holcombe, as I will call it, which, in short, is that the case put by me in the Court of Appeal against Mr Lockley and Mr Grainger on causation was:  it is agreed open on the pleading.  But the reasoning of the Court of Appeal is really threefold.  It is that that case was narrowed by statements made by counsel for Mr Obeid at the trial – that is, put in a narrower way than I put it to the Court of Appeal.

Secondly, a possible prejudice to Mr Lockley and Mr Grainger cannot be discounted; therefore, my clients are not permitted to put that case.  Our responses to that are, first of all, it is impossible to suggest – impossible to suggest – that Mr Grainger suffered possible prejudice.  His counsel has never, ever asserted that and, in particular, never asserted that his client, contrary to what the Chief Justice says at paragraph 152, would have given evidence.  And the simple reason for that is that the whole case that was mounted by Mr Grainger from the get‑go at the trial was medical evidence showing that he was too unfit to be giving evidence. 

Now, finally, at tab 4 in the materials you have in the white folder – and I have not got time to go through this ‑ ‑ ‑

NETTLE J:   Could you just tell me, if you were permitted to do it, what possible difference would it make whether it were redacted or unredacted if it was published?

MR REYNOLDS:   Well, we say that is the whole point:  it would not make any difference.

NETTLE J:   Make no difference?

MR REYNOLDS:   No.

NETTLE J:   That is the reason my brother Keane gives, is it?  Unless there be corruption, there is no damage to reputation.

MR REYNOLDS:   With respect, your Honour, all I need to establish is that what is published damages reputation.

NETTLE J:   What is the point?  Publishing a contract does not damage anybody’s reputation.

MR REYNOLDS:   No, no.  But once a contract of that kind is published to ICAC in relation to Mr Obeid, that then raises the likelihood of investigation and exposure of any corruption in relation to that and I have explained why that is, that that is likely.

NETTLE J:   But that is not damage to reputation; that is damage as a consequence of being found out for being corrupt.

MR REYNOLDS:   Well, your Honour, that damage is reputation.

NETTLE J:   I see.

MR REYNOLDS:   Very obviously, material disseminated about anyone which talks about corruption does exactly that.

BELL J:   The light has been on for some time, Mr Reynolds.

MR REYNOLDS:   I think I have about two more minutes.  That deals with Mr Grainger, so there is no case at all on prejudice for Mr Grainger at all.  So far as Mr Lockley is concerned, the suggestion that he might have conducted the trial differently, we submit is also barely arguable.  And the reason is that these passages – your Honours have copies of them, but I do not have time to go through them – are referred to by the Court of Appeal by Justice Leeming at paragraphs 216 and 217, and also by the Chief Justice at paragraph 140.  These passages only relate to the case against Mr Ipp.  They do not relate at all to the case against my client.

Finally, I do not have time to go through it, but we submit that there was not any difference of substance between the case put on reputational damage at the trial and the one put to the Court of Appeal.  The case was trimmed of various matters and also put, we submit, perhaps more clearly, but we submit it was not materially different.

Could I deal – I see the light is on, may I have just perhaps one more minute, your Honour, I am sorry.  As to causation, we do not have a finding in our favour on the final step of that but the final step on causation is that the cross‑examination of Moses Obeid on the heads of agreement was reported in the Sydney Morning Herald on the following day, that is agreed, and second of all, that that article caused reputational damage to the four members of the Obeid family.  That is a very easy proposition to establish.

May I conclude by saying this?  We have got first of all at least two important legal points.  Second of all, on those three issues I have raised we

have got sufficient doubt at least to warrant a grant of leave; indeed, we submit that the reasoning is wrong.  And may I finally mention the issue of a declaration which was not dealt with by the Court of Appeal and we submit that that is also an additional reason why leave should be granted.  If the Court pleases, those are my submissions.

BELL J:   Yes, thank you.  We do not need to hear from you, Mr Braham or Ms Cheeseman. 

In light of the concurrent factual findings, the application is not a suitable vehicle in which to consider the questions of principle that are said to arise.  Special leave is refused with costs.

AT 10.41 AM THE MATTER WAS CONCLUDED