Penrith Rugby League Club Ltd v Brown

[2004] NSWSC 1182

CITATION:	Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182
HEARING DATE(S):	11/11/04
JUDGMENT DATE:	7 December 2004
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
DECISION:	Balance of proceedings dismissed with costs.
CATCHWORDS:	EVIDENCE [23]- Amending Bill before Parliament- Inadmissible as to meaning of current legislation. EVIDENCE [65]- Privilege- Communications within Department. PROCEDURE [429]- Discovery- Notice to party to produce documents- What specificity required- Supreme Court Rules Pt 23(2).
LEGISLATION CITED:	Evidence Act 1995, s 130 Supreme Court Rules Pt 23(2)
CASES CITED:	Alister v The Queen (1984) 151 CLR 404 Commonwealth v Northern Land Council (1993) 176 CLR 604 Conway v Rimmer [1968] AC 910 Khanna v Lovell White Durant [1995] 1 WLR 121 Kursell v Timber Operators & Contractors Ltd [1927] 1 KB 298 Papadopoulos v Goodwin [1982] 1 NSWLR 413 Re Arthur Stanley Smith (1996) 86 A Crim R 308 Sankey v Whitlam (1978) 142 CLR 1
PARTIES :	Penrith Rugby League Club Ltd (P1) Penrith District Rugby League Football Club Ltd (P2) Kenneth Maxwell Brown (D1) Ian Douglas Temby (D2) Roger Maxwell Cowan (D3)
FILE NUMBER(S):	SC 4553/04
COUNSEL:	B A Coles QC and T Lynch (P) P Singleton and Ms D Robinson (D1 & 2)
SOLICITORS:	Back Schwartz Vaughan (P) I V Knight, Crown Solicitor, (D1 & 2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 7 December 2004

4553/04 – PENRITH RUGBY LEAGUE CLUB LTD v BROWN

JUDGMENT

1 HIS HONOUR: The background to this litigation is that the plaintiffs conduct a registered club in the Penrith area. The defendants say that various allegations have been received which they consider justify them in holding an inquiry pursuant to s 41X of the Registered Clubs Act 1976 in respect of the plaintiffs' Club. By its amended summons the plaintiffs seek a declaration that, on a true construction of that Act, the defendants are not empowered to arrange for the holding of an inquiry, except upon receiving an allegation about corrupt or improper conduct in relation to a registered club and that in fact they have not received any such allegation.

2 Other aspects of this matter came on before Hamilton J in October and were finally considered. On 11 November 2004, I was asked to deal with the remaining matters which I have summarised above. On that occasion Mr B A Coles QC and Mr T Lynch appeared for the plaintiffs, and Mr P Singleton and Ms D Robinson appeared for the defendants. I dismissed the additional claims with costs and indicated that I would give my reasons in due course. These reasons fulfil that promise.

3 The case ran before me as a series of procedural battles most of which the plaintiffs lost. It is necessary to recreate in these reasons the course of the proceedings and to note my decision at each stage, and then give the reasons for that decision.

4 The first matter to consider is the notice to produce issued by the plaintiffs to the defendants. Essentially the contents call for production of:

"1. The document or documents being the allegation or allegations about corrupt or other improper conduct in relation to the Penrith Rugby League Club Ltd in respect of which you arranged for the holding of an inquiry to be presided over by Ian Douglas Temby.
2. If the allegation or allegations in 1 above were not made in writing, the document or documents wherein that allegation was or those allegations were recorded."

5 Part 23 r2 of the Supreme Court Rules provides in subrule (1):

"A party (party A) may by notice served on another party (party B) require party B to produce for inspection of party A:
(a) any document (other than a privileged document) referred to in any originating process, pleading, affidavit or witness statement filed or served by party B,
(b) any other specific document (other than a privileged document) clearly identified in the notice, relevant to a fact in issue."

Subrule (2) limits the request to 50 documents.

6 The first matter on which I was asked to make a decision was whether to accept tender of a bill to amend the Registered Clubs Act to take out part of s 41X. The tender was opposed. I do not see how one can use the fact that Parliament is currently considering the repeal of legislation to show that the legislation properly construed means what those seeking its emendation fear it means. In any event, the tender would be irrelevant to my consideration of the present problem. Accordingly I rejected the tender.

7 The second matter argued deals with the proper construction of Part 23 r2 of the Supreme Court Rules. It will be noted that there was no document alleged to be referred to in originating process, pleading, affidavit or witness statement. One must accordingly look for a request to produce any other specific document. The fact that "other" is used gives an ejusdem generis flavour to a specific document. In 2(1)(a) one knows exactly which document needs to be produced. One would expect, accordingly, that the same would apply to a request under (b). The authors of the Supreme Court Practice in note [23.2.2] come to the same conclusion using the reasoning that the underlying intention of the Rules is that parties are not to be subjected to any kind of general discovery obligation unless there is an order of the Court so that rule 2 must be construed accordingly.

8 The words "clearly identified", or their equivalent in s 88 of the Conveyancing Act "clearly indicate", mean that there must be something more than a matter which can be ascertained by the ordinary processes of construction and employing extrinsic evidence; there must be a pointing out in a manner that is distinct and free from confusion; see eg Papadopoulos v Goodwin [1982] 1 NSWLR 413.

9 The word "specific" conjures up the idea of something which is identified and not merely identifiable; see per Sargant LJ in Kursell v Timber Operators & Contractors Ltd [1927] 1 KB 298, 313, 314.

10 There was some debate before me as to the origin of Part 23 r2. In particular I am indebted to Ms Robinson of counsel for her research which, as not infrequently happens with research projects, turned out not to produce much by way of answer. Mr Coles QC said that anecdotal evidence is that M H McLelland CJ in Eq suggested the present rule. There is also a lot to be said for the proposition that the remarks of Nicholls VC in Khanna v Lovell White Durant [1995] 1 WLR 121 at 126 that the then informal practice in the Commercial Court and Chancery Division in England of allowing specified documents to be produced in advance of the trial, was an impetus for our rule. In commenting on cases like Khanna Professor Zuckerman in his Civil Procedure (Lexis Nexis, UK, 2003) [14.93] notes that it is significant that the procedure relates to specific documents because this will mean that the conduct money payable will be minimal.

11 Mr Coles says that all that a person seeking to take advantage of the rule needs to do is to give a sufficient description to enable the person served to perform the obligation to produce the document. In view of what I have said above, I would not endorse this submission.

12 There was then a debate as to whether, in the light of other evidence, the defendants were being asked to produce more than 50 documents. Mr Coles pointed out that merely because there appeared to be a large number of lever arch files in court, each looking as if they contained more than 50 sheets of paper, did not necessarily mean there were 50 documents. Mr Singleton said that he had more than 50 documents which fell within the description. Mr Coles said that that fact had not been established and that it was up to the defendants to establish it. I think Mr Coles is correct, but it did not really matter in the instant case because of my other rulings.

13 Before passing from this topic I should note that Mr Coles correctly submitted that there were two requirements in Part 23 r2; one is the identification of the document, and the other is that the document must be relevant to a fact in issue. He says there is no further requirement such as the requirement of the document being sought for a legitimate forensic purpose. As a general statement, this must be correct though the tests of "relevant to a fact in issue" and "legitimate forensic purpose" to some extent overlap.

14 The fourth matter was whether the proper procedure had been adopted. Originally the plaintiffs had issued a subpoena and then informally by letter, turned the subpoena into a notice to produce. Mr Coles said that Mr Singleton should move to set it aside, Mr Singleton said that as there was no actual notice he could not move to set it aside. However, eventually it was agreed that under Part 23 r4 the Court of its own motion could vary an obligation under rule 2, and that the defendants did not wish to put any procedural problems in the way of the Court exercising that jurisdiction.

15 The fifth matter is that Mr Coles then applied to vary the obligations arising under rule 2 by amending the notice to include documents described or identified in the plaintiffs' letter to the defendants of 17 October 2004. There were some clearly identified documents which Mr Loewenthal's affidavit in these proceedings identified. In particular, what was sought was a report from Mr Gardener.

16 Apart from the report of Mr Gardener, Mr Singleton said that this was not an indication of a specific document. Mr Coles said that it would be sufficient if the evidence was that the defendant had said to the plaintiff "I have a box of documents corresponding with this description" or "I have in my tea chest 6 copies of my title documents to Blackacre", a notice to produce could say "Produce the documents in the box" or "Produce the documents in the tea chest". Mr Singleton denied that proposition, submitting one cannot merely mention a category of documents, one has to refer to the specific documents.

17 In asking for an expanded version of his demand, Mr Coles made the point that as Mr Loewenthal had now identified the documents being in several lever arch files and one further document from Mr Gardener, it could not be said that the documents were not specific documents. They had actually been identified in an affidavit of the other side within the meaning of the rule. This argument must be correct with respect to Mr Gardener's report. However, the documents in the lever arch files would, to my mind, bear no difference to reference to documents in a box about which I have already commented.

18 I upheld Mr Singleton's submission.

19 The next application was for production of Mr Gardener's report.

20 The production of this document was objected to on two grounds: (1) that it was privileged; and (2) that it was an abuse of process to ask for it under the Rule. I upheld the claim of privilege for reasons I will shortly relate, and so it was not necessary to deal with the question of abuse of process. I would note, however, that the ground of abuse of process would, on my first thoughts, have stood a better than even chance of being established.

21 So far as privilege is concerned, Mr Singleton read an affidavit of Darrell Loewenthal who said that the Director General of the Department of Gaming and Racing objected to producing any documentation unless and until a legitimate forensic purpose was demonstrated. He said that one of the documents caught by the terms of the proposed call was a 35 page report to the Director General prepared by Albert Gardener. Mr Loewenthal said that that document related to the official duties of the Director General and that its disclosure would be contrary to the public interest as it was important to the proper and efficient discharge of the Director General's duties that he be able to receive confidential advice and information from the Department in respect of sensitive matters. Furthermore, the report discloses the use and identities of confidential sources of information.

22 Mr Coles sought to cross examine this gentleman. Mr Singleton objected on the basis that it was contrary to all authority to allow such cross examination and Mr Coles acknowledged that he had no right to cross examine, without leave, which leave I declined as I could not see any especial reason for granting it.

23 The debate then revolved around s 130 of the Evidence Act 1995.

24 Section 130(1) of that Act provides:

"If the public interest in admitting into evidence information or a document that relates to matters of State is outweighed by the public interest in preserving secrecy of confidentiality in relation to the information or document, the court may direct that the information or document not be adduced as evidence."

Sub-sections (4) and (5) list the matters which a court must consider when making such decision. Although s 130 does not in its terms apply to the present case, it should be applied by analogy. It was argued on this basis.

25 Mr Coles put:

"As with many things relating to privilege of various kinds in the Evidence Act, there is a balancing exercise as the Act really embodies a disposition towards that part of the public interest which is concerned with there being available to a court the tools for the resolution of issues in dispute, that is to say, that part of the public interest is matched and weighed against the other party's public interest, which includes such matters of confidentiality, legal professional privilege, privilege against self incrimination and matters of State."

Later he said:

"In our submission, there is a predisposition towards its admissibility."

26 Mr Coles put that the present problem was not one involving the proper functioning of government of a State in any real sense. These are not matters of communing between Ministers of State or members of the Cabinet. All that happens in the instant case is that it is said that the internal communing of servants of the Crown is protected by public interest immunity which cannot be right. If it were, one could never subpoena a State department for anything.

27 Mr Singleton argues for a different approach. He says that I need to weigh two competing public interests and there are three discrete steps involved in doing that. First, one has to analyse what is the purpose for which production is sought and how available is the document, if produced, going to be for the purpose of the litigation. If the document might resolve the case one way or the other, it may have a high purpose. Secondly, the Court has to assess whether there is a valid claim of public interest or immunity. As to this, there are various different levels of power and public interest immunity claims. The protection of informers is at the top and around about as powerful are Cabinet minutes and national security and submarine plans. There then exists a scale of different communications descending to, as Lord Reid put it in Conway v Rimmer [1968] AC 910 at 939-940, "A routine report by a relatively junior officer". The third stage is that the Court must balance those two interests. However, until the plaintiff demonstrates how useful the document is going to be in his case, he has great difficulty in persuading the Court that his side of the scale is heavier than that of the Crown. He put that this is the method of looking at the question which was advocated in the judgment of Gibbs J in Alister v The Queen (1984) 151 CLR 404 at 412. See also Sankey v Whitlam (1978) 142 CLR 1.

28 I agree with Mr Singleton's submission as to the method of approach. The importance of the document to the case in the present matter is a rather bizarre question. If Mr Gardener's report is produced, it may show that there are in fact a number of persons who have made allegations which are the proper subject of an inquiry in which event the plaintiffs' case will totally collapse. On the other hand, if the document shows no such allegations, then it will not assist the plaintiffs overmuch because the mere fact that one document does not include allegations does not necessarily allow the Court to make the inference that no other document includes such allegations. Accordingly, the forensic purpose of the document is of relatively small value.

29 On the other hand, the protection of informers and confidential information rates fairly highly; see eg Re Arthur Stanley Smith (1996) 86 A Crim R 308, 311.

30 I have, as Mr Singleton requested, borne in mind what six Justices of the High Court said in Commonwealth v Northern Land Council (1993) 176 CLR 604 at 616-7. I have assessed the competing claims and I agree that in view of the weakness of the plaintiffs' interest as against the strength of the Crown's interest, I should uphold the claim of privilege.

31 Mr Coles then said that it should be possible to mask out of the document the pieces which were privileged leaving the masked document to be inspected by himself, his junior and his solicitor on the basis of the usual undertaking. Mr Singleton said that it would not matter whether the document was masked or unmasked, because if a masked document was given to Mr Coles, all he would have in evidence was a document, parts of which were masked, and he would not be able to say that the masked parts did not contain allegations so that the document as masked would be of no forensic value. I agree.

32 Mr Coles then asked for an adjournment of the matter so that he could put his case another way. This was opposed by Mr Singleton and I could see no reason to grant the application, the matter having been fully argued. I noted that my view was that my rulings had meant that the additional paragraphs of the summons could not be made out, and accordingly I should dismiss all the claims other than those dealt with by Hamilton J earlier. Mr Coles asked me to note that he was not to be taken to agree that the dismissal of the claims was a dismissal on the merits; indeed, he argued it was quite the opposite. I noted that submission without comment: I had previously noted Mr Singleton's submission to the opposite effect. It was for these reasons I made the order I did on 11 November 2004.

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Last Modified: 12/15/2004