Re An Application Under S 73 of the Civil Law (Wrongs) Act 2002 (ACT) [No 2]
[2011] ACTSC 26
•24 February 2011
RE AN APPLICATION UNDER S 73 OF THE CIVIL LAW (WRONGS) ACT 2002 (ACT) [NO 2]
[2011] ACTSC 26 (24 February 2011)
PRACTICE AND PROCEDURE – Disclosure of documents – Statutory provision permitting withholding of documents if found suspected – documents to be produced at hearing – power to withhold access by other party – power to make such an order – to whom order should be made – Civil Law (Wrongs) Act 2002 (ACT), s 73.
Civil Procedure Act 2005 (NSW), s 56
Civil Law (Wrongs) Act 2002 (ACT), ss 51(5), 73
Court Procedures Act 2004 (ACT)
Supreme Court Act 1933 (ACT)
Court Procedures Rules 2006 (ACT), rr 6, 21, 1241, 1401, 1616
In the Matter of an Application Pursuant to s 73 of the Civil Law (Wrongs) Act 2002 (2006) 203 FLR 154
Markus v Provincial Insurance Co Ltd (1983) 25 NSWCCR 1
Halpin v Lumley General Insurance Ltd (2009) 261 ALR 741
Kon v AMP Life Ltd [2006] NSWSC 957
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Griffin v Sogelease Australia Ltd (2003) 57 NSWLR 257
Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436
P and W v Manny & Anor [2010] ACTSC 50
No. SC 710 of 2006
Judge: Refshauge J
Supreme Court of the ACT
Date: 24 February 2011
IN THE SUPREME COURT OF THE )
) No. SC 710 of 2006
AUSTRALIAN CAPITAL TERRITORY )
RE AN APPLICATION UNDER S 73 OF THE CIVIL LAW (WRONGS) ACT 2002 (ACT) [NO 2]
ORDER
Judge: Refshauge J
Date: 24 February 2011
Place: Canberra
THE COURT ORDERS THAT:
Any application that the Applicant, Insurance Australia Ltd, may be advised to make in respect of the withholding, in proceedings No SC 362 of 2007 between Peter Incandela, Plaintiff, and Bozo Bobanovic, Defendant, of any material, obtained during the currency of these proceedings and produced on subpoena, annexed or exhibited to any affidavit filed in these proceedings or otherwise tendered to the court, be made in those proceedings and be made in the first instance to the Master.
The Applicant have leave to approach the List Clerk to obtain a date for any such application.
On 19 September 2006, on the application of Insurance Australia Ltd (the Applicant), Connolly J made orders under s 73 of the Civil Law (Wrongs) Act 2002 (ACT) and delivered reasons for doing so on 21 September 2006: In the Matter of an Application Pursuant to s 73 of the Civil Law (Wrongs) Act 2002 (2006) 203 FLR 154; [2006] ACTSC 93.
That section, which appears in Pt 5.4, provides:
73 Nondisclosure of documents etc – suspected fraud
(1)If a respondent has reasonable grounds to suspect a claimant of fraud, the respondent may apply to the court for approval to withhold from disclosure under this chapter documents or information that –
(a)would alert the claimant to the suspicion; or
(b)could help further the fraud.
(2)The application may be made without notice to the claimant.
(3)If the court gives approval on application under subsection (1), the respondent may withhold from disclosure the documents or information in accordance with the approval.
This is in the context of a regime under Pt 5.8 (part of Ch 5 which, of course, includes Pt 5.4) for what his Honour described as “full and frank disclosure by both a claimant and a respondent”: In the Matter of an Application Pursuant to s 73 of the Civil Law (Wrongs) Act 2002 (2006) 203 FLR 154 (at 155; [2]).
His Honour made the following orders:
1.An order directing everyone except Court staff, the Applicant, the legal representatives of the Applicant, and the servants or agents of the Applicant, to remain outside the courtroom until further order.
2.An order forbidding the publication of the evidence, the name of the Applicant, and any part of the proceedings that would tend to identify the subject matter of the proceedings or the identity of the persons concerned by the proceedings, except to the Applicant, including the legal representatives of the Applicant, the servants or agents of the Applicant, until further order.
3.That the Applicant, having reasonable grounds to suspect [the Claimant] of fraud in respect of claim [the number of which was set out] relating to an alleged accident [the date and place of which was specified] be granted an order pursuant to section 73(1) of the Civil Law (Wrongs) Act 2002 to approve withholding from disclosure to the Claimant or his legal representatives any documents or information in the Applicant’s possession that:
(a) would alert the Claimant to that suspicion; or
(b) would help further the suspected fraud.
4.The application be stood over for mention at 9.30 am on Thursday 14 December 2006.
The last order was made, as his Honour articulated it, “to determine whether the non-disclosure order should remain in place”: In the Matter of an Application Pursuant to s 73 of the Civil Law (Wrongs) Act 2002 (2006) (at 157; [14]).
On the next return date, the court was again closed and the order was continued and this process of court supervision in closed court and regular review, which seems to me to be entirely appropriate, continued. His Honour’s untimely death meant that the file fell to me to supervise, and I have done so on a number of occasions since then. That has included the granting of leave to the Applicant to issue various subpoenae and, when documents are produced in response, the granting to the Applicant of leave to inspect the documents as well as considering the material produced. On each occasion the matter has been in court, the court has been closed in terms similar to the order made by Connolly J.
When the application was originally made, the Claimant had made a claim for damages on the Applicant by completing and lodging with the Applicant a “Personal Injury Claim Notification”, being the notice required under s 51(5) of the Civil Law (Wrongs) Act 2002 (ACT).
In 2007, the Claimant commenced proceedings in this court seeking damages for the personal injuries he suffered in the alleged collision. That proceeding has now been listed for hearing.
As a result, the Applicant now needs to consider how the material obtained in these proceedings is to be dealt with in relation to those other proceedings (the personal injuries proceedings).
In particular, the Applicant wishes to seek, in the personal injuries proceedings, an order or direction that the material that has been produced in these proceedings, or some of it, may be withheld from the Claimant until after he has given his evidence in chief, a direction in which the court exercises what has become known as “the Markus discretion”. So-called after the exercise of a discretion in Markus v Provincial Insurance Co Ltd (1983) 25 NSWCCR 1, (Markus) this is a term, it has been suggested, that should be used with care: Halpin v Lumley General Insurance Ltd (2009) 261 ALR 741, (Halpin) per Sackville AJA (at 759; [77]).
In Markus, the plaintiffs sought inspection of a number of documents, loss assessor’s reports, in respect of which the defendant insurer claimed privilege. A basis on which production was resisted was that the material contained in the reports was such that it did not advance the plaintiff’s case but which would, if the plaintiffs were not genuine, put them on notice of some allegedly suspicious circumstances and enable them to tailor or endeavour to tailor their evidence to meet the circumstances.
Clarke J found, by inspection of the documents, that this basis was made out and declined to order the production of the documents.
As discussed in Halpin, this general approach has been applied in a number of other cases in New South Wales. Most of those cases dealt with the circumstances where a party was granted or denied access to documents discovered by a party or produced on subpoena. In Halpin, however, the issue was whether the evidence of the defendant, ordered to be adduced on affidavits to be filed before the hearing, could be withheld on the basis that it would not advance the plaintiff’s case and would tend to tempt the plaintiffs to tailor their evidence or at least consider doing so. See Kon v AMP Life Ltd [2006] NSWSC 957 (at [10], [11]).
The primary judge had made such an order and the order was not disturbed on appeal. Much of the case was taken up with an assessment of whether the court had power to make such an order, particularly in the context of the “overriding purpose” of “facilitat[ing] the just, quick and cheap resolution of the real issues in the proceedings” to be found in s 56 of the Civil Procedure Act 2005 (NSW), as well as the nature of the power and the occasion of its exercise.
Having carefully considered the reasoning in Halpin, I consider that there is power in this court to make such orders. In the ACT, neither the Court Procedures Act 2004 (ACT) nor the Supreme Court Act 1933 (ACT) contains a provision such as the overriding purpose to be found in the NSW Act.
Such a provision is found in r 21 of the Court Procedures Rules 2006 (ACT) (the Rules). That rule, however, puts the just resolution of disputes as a separate item, thus, perhaps, emphasising the tension that is created by that objective with timely disposition and affordable cost of the proceedings. Thus, the rule relevantly provides:
21(1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense.
(2)Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving –
(a)the just resolution of the real issues in the proceedings; and
(b)the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
(3)The parties to a civil proceeding must help the court to achieve the objectives.
(4)The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.
Example for r (4)
The court may dismiss a proceeding or make a costs order if a plaintiff fails to proceed as required by the rules in ch 2 or an order of the court.
The High Court, however, noted in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (at 213; [98]) per Gummow, Hayne, Crennan, Kiefel and Bell JJ:
Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a ‘just resolution’ is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account.
In any event, it is to be noted also that r 6 of the Rules permits the court to dispense with the application of a provision of the rules. Of course, it would be expected that such dispensation would be for good cause and the discretion exercised judicially, but if the interests of justice were overwhelming or perhaps even very significant, then a timely disposal at an affordable cost may not be given the weight that otherwise might be deserved. In any event, it was not suggested in Halpin that orders of the kind there envisaged were inconsistent with the overriding purpose in the NSW Act.
The court has quite sufficient power to make such orders as are here sought. Rule 1401 gives the court very wide powers of direction. It relevantly provides:
1401(1) The court may, at any stage of a proceeding, give any direction about the conduct of the proceeding it considers appropriate, even though the directions may be inconsistent with another provision of these rules.
(2)The court may give a direction about the conduct of the proceeding on application by a party or on its own initiative.
(3)In deciding whether to give a direction under this rule, the interests of justice are paramount.
Subrule 1401(4) lists specific directions that, without limiting sub-rule 1401(1), the court may do, the last of which is “(t) give any other direction the court considers appropriate”. Again, this is a wide power. It is, of course, unlikely to be construed as being so wide as to permit the court to abrogate substantive rights, such as client legal privilege or the privilege against self-incrimination: Griffin v Sogelease Australia Ltd (2003) 57 NSWLR 257 (at 264; [26]); Ross v Internet Wines Pty Ltd (2004) 60 NSWLR 436 (at 444; [83]).
Accordingly, I am of the opinion that an order of the kind sought by the Applicant is within the power of this court to make and can be made in appropriate circumstances.
Such an order, of course, has to be made in the personal injuries proceedings and on notice to the Claimant. It cannot be made ex parte (unless, perhaps, the Claimant refuses to participate in the application having been given due notice), even though, as it was put in Halpin, the Claimant will be “under a ‘considerable disadvantage’ ... [being] unaware of the nature and extent of the ... evidence sought to be withheld by the insurer” (at 756-7; [62]).
As Basten JA noted (at 745; [9]), this disadvantage flows through to any appeal:
The Applicants did not know (and do not know) precisely what material was not being disclosed. Not only does their ignorance prevent them demonstrating why the result itself may demonstrate an error of principle, but, because the maintenance of confidentiality limited the explanation which could be given by the primary judge in rejecting their arguments, they are given only limited assistance by the reasons.
These problems are, of course, to be encountered first in the hearing of the application. As Clarke J said (at 3; [6]) in Markus:
The plaintiffs have been hampered in seeking to answer the submission by the inability to inspect the documents before making their submissions. It accordingly falls on me to endeavour to ensure that I exercise a discretion ... fairly in favour of one or other of the parties.
That, however, does not mean the application cannot be brought and brought on notice to the Claimant. In my view it can and, to some extent, the very existence of s 73 of the Civil Law (Wrongs) Act 2002 (ACT) shows a legislative intention that appropriate non-disclosure in the interests of preventing fraudulent claims is permissible.
The question I then have to decide is to what judicial officer the application should be made? The personal injuries proceedings have been listed for hearing. A judicial officer has been allocated to hear it. That allocation, however, is not and should not be “cast in stone”. This court does not have a “docket system” such as operates in the Federal Court of Australia (other than for major matters: “Case Management of More Complex Civil Matters”; Practice Direction No 3 of 2009), so a judicial officer does not have a special responsibility for a particular case. On the other hand, the Master does preside over the majority of personal injuries cases.
The judicial officer who hears this application will have to become familiar with the material that has been produced on subpoena and otherwise (for instance, medical reports). That will take some time as there is a large amount of such material. I have become somewhat familiar with that material.
It also means that the judicial officer will have access to material that is likely to be prejudicial to the Claimant. Some of that material may never be tendered in the personal injury proceedings. Judicial officers are, of course, regularly exposed to material which they have to disregard and put out of their minds when deciding cases.
It seems, also that the NSW experience is that the trial judge has heard these applications. That certainly appears to have occurred in Halpin and a number of cases there cited.
In addition, it is now generally regarded as appropriate in this court that when a matter has been listed for hearing, the judicial officer before whom the matter is to be heard should desirably hear and determine all interlocutory applications relating to it unless there is a special reason not to do so.
Initially, Ms B Heath, who appeared for the Applicant, referred to the Applicant seeking relief from r 1241 of the Rules. That rule, however, only deals with service of expert reports. The material with which the present proceedings have been concerned ranges more widely, including such reports but also including material produced on subpoena since 2006 and the original material assembled by the Applicant in the course of its investigation of the Claimant’s claim leading them to the suspicion which led to the Applicant seeking the original orders. It seems to me that all that material may be subject of the application and that it be withheld until after the Claimant has given his evidence in chief.
On 1 September 2010, I gave the Applicant leave to use the documents which had been produced under subpoena in the personal injuries proceedings, a necessary first step (because of the obligation not to use those documents other than for the purposes of the instant proceedings: P and W v Manny & Anor [2010] ACTSC 50 (at [24])). The only remaining question, then, is to whom the application foreshadowed by the Applicant should be made.
I note that the personal injuries proceedings have been listed for hearing before the Master. Accordingly, I will direct the Applicant to make any application it may be advised to make for the withholding of evidence until the conclusion of the Claimant’s evidence in chief in the personal injuries proceedings to be made to the Master. The Claimant may, of course, wish to ask the Master not to hear it because of the access his Honour will then have to potentially prejudicial material. That is a matter for the Claimant and for the Master.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 24 February 2011
Counsel for the Applicant: Ms B Heath (1 September 2010)
Mr J E Solomon (8 December 2010, 2 February 2011)
Solicitor for the Applicant: Moray & Agnew
Date of hearing: 1 September, 8 December 2010, 2 February 2011
Date of judgment: 24 February 2011
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