SA Govt Financing Authority v Bank New Zealand & BT Aust (HK) Ltd No. Scciv-99-1428

SOUTH AUSTRALIAN GOVERNMENT FINANCING AUTHORITY
v
BANK OF NEW ZEALAND and BT AUSTRALIA (HK) LTD
[2002] SASC 49
Full Court Nyland J, Martin and Gray JJ
APPLICATION FOR A STAY

Nyland J For the reasons given by Gray J, I joined in the order of the court made on 13 February 2002 whereby the application was dismissed.
Martin J For the reasons given by Gray J, I agree that the application should be dismissed.
Gray J This litigation involves a claim by the South Australian Government Financing Authority (“SAFA”) against the Bank of New Zealand (“BNZ”) with respect to the terms of a bond issue. At one time BT Financial Group Limited and BT Australia HK Ltd (collectively referred to as “BT”) were defendants in the action. SAFA has discontinued proceedings against BT.
On 21 September 2001 BNZ sought an order for disclosure and production of witness statements against BT. Those statements included three statements from an intended witness Ian Fraser Bell. At this time BT were not parties. SAFA proposed to call Mr Bell at the trial of the proceedings.
There had been discovery and production by SAFA of Mr Bell’s earlier statements. Legal professional privilege had been waived with respect to those statements. BT claimed legal professional privilege with respect to the later witness statements (“the later witness statements”). It was acknowledged that BT had released the later witness statements to SAFA. It was said that common interest privilege arose between BT and SAFA.
It was submitted that as a result there had been a partial disclosure of the intended evidence of Mr Bell. It is unclear whether the later witness statements formed part of the one proof of Mr Bell or whether they were associated documents touching the one subject matter. BT’s conduct in disclosing to SAFA with knowledge of the earlier disclosure by SAFA and its purpose was said to create an unfairness. It was said that the unfairness was sufficient to lead to an implied or imputed waiver privilege.
This litigation relates to events which occurred during the mid 1980s. A trial date was fixed in September 2001. The trial is to commence on 4 March 2002. Subject to this outstanding interlocutory issue both parties are ready for trial.
On 18 January 2002 Debelle J held that there had been an implied or imputed waiver of privilege with respect to the later witness statements and ordered production[1]. SAFA sought leave to appeal. Debelle J refused leave on 29 January 2002[2].
[1] Judgment No. [2002] SASC 10
[2] Judgment No. [2002] SASC 22
SAFA then sought leave to appeal from this court. BT was granted leave to be joined as an applicant. On 7 February 2002 this court refused leave to appeal. SAFA then indicated that it intended to seek special leave to appeal to the High Court. SAFA has sought an order staying the order for production made by Debelle J pending the hearing of its application for special leave. It should be observed that BT has not sought a stay, nor indicated an intention to seek special leave.
In Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No. 1)[3] Brennan J said:
“A stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal.”
[3] (1986) 161 CLR 681 at 684
In Re Duke Group Ltd (In Liq); Gerah Imports Pty Ltd v The Duke Group Ltd (in liq)[4] Dawson J considered an application for a stay to prevent a Company Act examination obliging an examinee to answer questions and produce documents from proceeding. At first instance the judge dismissed an application to set aside the order for the examination but ordered a stay pending an appeal against his decision. The appeal with respect to the examination order was dismissed. The intermediate court by a majority declined to grant a stay[5].
[4] (1994) 68 ALJR 196
[5] Gerah Imports v The Duke Group Ltd (In Liq) (1994) 173 LSJS 177 at 178-9
In declining to grant a stay, Dawson J said:
“The inherent jurisdiction of this court to order a stay of proceedings pending the determination of an application for special leave is well established. It is an extraordinary jurisdiction which will only be exercised in exceptional circumstances.
Exceptional circumstances may arise where the subject matter of the proposed appeal will be lost without a stay, with the result that the application for special leave and any subsequent appeal will be nugatory. Clearly, in the present case, the subject matter of the litigation - the immunity of the applicants from examination and from the production of documents concerning the matters in contention - will have disappeared before the application for special leave is heard if the application for a stay is refused. Having regard to the date of the proposed examinations, in the absence of a stay the questions will have been asked and answered and the documents produced before the application for special leave is heard.
Notwithstanding this circumstance, the jurisdiction to grant a stay is discretionary and other matters are relevant to the exercise of the discretion.
Importantly, the applicant must establish a substantial prospect that special leave to appeal will be granted. It is, I think, the prospect of success in that application which is significant, although, of course, the prospect of ultimate success in any appeal (if leave is granted) is an important element to be taken into account by the court in deciding whether or not to grant special leave.
In addition, there are other matters to be taken into consideration in the exercise of the discretion to grant a stay. The failure, if any, of the applicants to pursue such avenues as are available in the court below for obtaining a stay is of significance. Any loss which may be caused to interested parties by the granting of a stay must be taken into account. And the balance of convenience is always something to be considered.”[6]
[6]These principles have been applied in many subsequent decisions including Bryant v Commonwealth Bank (1996) 70 ALJR 306, Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd & Ors (1996) 70 ALJR 603, Edelsten v Ward (No 2) (1988) 63 ALJR 346 and Roddan v Director of Public Prosecutions (1996) 70 ALJR 537.
The test identified in Burgundy Royale and the Duke Group is also the test to be applied by an intermediate court of appeal when a stay is sought pending special leave - The Duke Group Ltd (In Liq) v Pilmer & Ors[7], Re Southern Equities Corporation Ltd (In Liq); Bond & Caboche v England[8] and Hamersley Iron Pty Ltd v Lovell (No 2)[9].
[7] (1999) SASC 373, Doyle CJ
[8] (1977) SASC 644, Lander J
[9] (1998) 20 WAR 79
The reluctance of appellate courts to intervene in interlocutory proceedings is well established.[10] It is only in the exceptional case that the High Court would grant special leave to appeal with respect to an interlocutory order.[11] This court should not readily grant a stay of an order for production which would inevitably lead to the trial being delayed.
[10] Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd (1988) 165 CLR 452
[11] Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd (1988) 165 CLR 452
A stay would delay substantial commercial litigation from being resolved. The rescheduling of the trial would be necessary. The matter could be delayed for many months and possibly longer. There is a public interest in the early conclusion of this litigation.[12]
[12] See Ampolex at 607, 608.
However if a stay is not ordered it is plain that any appellate process will be rendered nugatory. Once the statements are produced any privilege will be lost.
The interlocutory proceedings in this matter raised an issue of implied or imputed waiver. The legal principles applicable were discussed in Attorney-General (NT) v Maurice[13]. More recently in Mann v Carnell[14], Gleeson CJ, Gummow, Gaudron and Callinan JJ in their joint judgment confirmed these principles. Debelle J found that unfairness to the defendant would arise if production was not ordered. That unfairness arose in part from the conduct of BT. The issue for this court is the application of those principles to the particular facts of this matter.
[13] (1986) 161 CLR 475
[14] (1999) 201 CLR 1
In my view no point of general principle arises. The decision reached by Debelle J was open on the material before him. This Court has refused leave to appeal. Neither the decision to refuse leave to appeal nor the decision of Debelle J are attendant with sufficient doubt to lead to there being any substantial prospect of a grant of special leave.
The application for a stay must be dismissed.
List of citations as they appear in the judgment
1 Judgment No. [2002] SASC 10
2 Judgment No. [2002] SASC 22
3 (1986) 161 CLR 681 at 684
4 (1994) 68 ALJR 196
5 Gerah Imports v The Duke Group Ltd (In Liq) (1994) 173 LSJS 177 at 178-9
6These principles have been applied in many subsequent decisions including Bryant v Commonwealth Bank (1996) 70 ALJR 306, Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd & Ors (1996) 70 ALJR 603, Edelsten v Ward (No 2) (1988) 63 ALJR 346 and Roddan v Director of Public Prosecutions (1996) 70 ALJR 537.
7 (1999) SASC 373, Doyle CJ
8 (1977) SASC 644, Lander J
9 (1998) 20 WAR 79
10 Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd (1988) 165 CLR 452
11 Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd (1988) 165 CLR 452
12 see Ampolex at 607, 608.
13 (1986) 161 CLR 475
14 (1999) 201 CLR 1

[2002] SASC 49

13 February 2002