SG v New South Wales Crime Commission (No 2)

[2018] NSWSC 600

Supreme Court

New South Wales

Medium Neutral Citation:	SG v New South Wales Crime Commission (No 2) [2018] NSWSC 600
Hearing dates:	15 March 2017
Date of orders:	07 May 2018
Decision date:	07 May 2018
Jurisdiction:	Common Law
Before:	Rothman J
Decision:	(1)   The motion of the first defendant, New South Wales Crime Commission, under the Court’s equitable jurisdiction is dismissed in its entirety;  (2)   The first defendant shall pay the plaintiff’s costs of and incidental to that motion.
Catchwords:	PRACTICE & PROCEDURE – Reliance on equitable jurisdiction to dismiss proceedings and to enjoin plaintiff from using certain legal representatives – basis for dismissal impossible to make out – other orders relying on 3rd party’s alleged breach of confidentiality and/or secrecy provisions require separate proceedings to which third party would need to be defendant and cannot be persuaded as interlocutory proceeding in this matter.
Legislation Cited:	Crime Commission Act 2012 (NSW), s 80
Cases Cited:	Haviland v McLeary [1894] NSWLawRp 1; (1894) 15 LR (NSW) (Eq) 22 New South Wales Crime Commission v SG [2017] NSWCA 102 Phillips v Walsh (1990) 20 NSWLR 206 Re Jay-O-Bees; Rosseau v Jay-O-Bees (2004) 50 ACSR 565; [2004] NSWSC 818 SG v New South Wales Crime Commission [2016] NSWSC 1615
Category:	Principal judgment
Parties:	SG (Plaintiff) New South Wales Crime Commission (First Defendant) State of New South Wales (Second Defendant)
Representation:	Counsel: S Hartford Davis (Plaintiff) B Mostafa (First Defendant)   Solicitors: Laxon Lex Lawyers (Plaintiff) Crown Solicitor’s Office (First and Second Defendant)
File Number(s):	2015/194130
Publication restriction:	Publication restriction as to evidence or any material that would identify any individual mentioned in the proceedings, other than legal practitioners.

Judgment

1. HIS HONOUR: The parties have sought clarification in relation to the nature of the orders issued on 17 November 2016 by the Court as presently constituted. The Judgment on 17 November 2016 (SG v New South Wales Crime Commission [2016] NSWSC 1615) was the subject of an appeal, which has been determined.

2. The Judgment of 17 November 2016 (“the earlier judgment”) issued orders to the following effect: dismissing the Motion to Dismiss the proceedings; declaring that legal professional privilege may be available for some documents, in accordance with the Reasons for Judgment then issued; and, further, that detailed directions on the availability of legal professional privilege should be subject to further submissions and inspection of the documents by the Court.

3. The clarification that is sought does not deal with the detailed directions referred to in the immediately preceding paragraph. Rather, the clarification seeks to clarify for the parties what was intended by the dismissal of the Motion to Dismiss.

4. The Court, in issuing the earlier judgment, had before it a number of motions for the setting aside of Notices to Produce, and for the determination of legal professional privilege and/or public interest privilege and/or privilege arising under the provisions of the Crime Commission Act 2012 (NSW). Further to those motions was a motion for the dismissal of the proceedings (hereinafter referred to as the “Equity Motion”), including dismissal of the proceedings on the basis of equitable relief and orders preventing the use of certain legal practitioners.

5. The parties seek to clarify whether the dismissal of the motions to dismiss the proceedings includes dismissal of the motions for equitable relief. It is necessary to set out some background.

Background Facts

6. On 2 July 2015, SG, the plaintiff whose identity has been suppressed, filed a Statement of Claim seeking damages for breach of contract and a breach of duty of care. The allegations in the Statement of Claim relate to the purported existence of a confidential agreement, being, it seems, a contract of employment, which is alleged to have existed between SG and the New South Wales Crime Commission (“the Commission”), under which agreement SG would provide information to the Commission in exchange for sums of money. On 9 October 2015, SG (or solicitors acting for him) served a Notice to Produce on the Commission. That Notice was later withdrawn.

7. On 26 October 2015, the Commission filed a Motion to Dismiss summarily the proceedings and to dismiss, summarily, the Notice to Produce issued by SG (that Notice to Produce will hereinafter be referred to as “the first Notice to Produce”).

8. On 23 March 2016, the Commission served a Notice to Produce on SG (hereinafter referred to as “the second Notice to Produce”). Notices of Motion were filed and served seeking to have the Court make orders giving effect to the Notices to Produce, on the one hand, or Notices to set aside the Notices to Produce on the other hand. The motions were heard by the Court. The first Notice to Produce was eventually withdrawn, as earlier indicated.

9. SG made a claim of legal professional privilege in response to the second Notice to Produce.

10. On 17 November 2016, as earlier stated, Judgment to the effect described above, issued. On 6 April and 29 May 2017, the Commission sought leave to appeal against the Judgment issued on 17 November 2016. The Court of Appeal (New South Wales Crime Commission v SG [2017] NSWCA 102) dismissed leave to appeal and ordered that costs of the application for leave to appeal be costs of the Motion of 8 April 2016, when it is finally determined.

11. In the meantime, after discussion between the parties, there seemed to be some consensus as to the means by which the matter could proceed further. The consensus between the parties was that the Court could by dealing with the Equity Motion, avoid the fight over legal professional privilege.

12. In effect, the plaintiff seeks that the Court dismiss the Commission’s Motion, being the Equity Motion. The Court has already expressed the view that the course proposed by the parties seems to be avoiding the inevitable.

13. In the earlier Judgment, the Court set out s 80 of the Crime Commission Act (see, earlier Judgment at [32]) and, at [33] and following, discussed the effect of that section. The Court, in the discussion in the earlier Judgment of the secrecy provisions, said:

“[39] Once the Court embarks upon a construction of the provisions of s 80 of the Act, which construction accords with the purpose and objects of the Act, there are more obvious limitations on the application of the secrecy provisions and the criminal offence associated with its breach. The secrecy provisions of the Act (namely, the terms of s 80 of the Act) underpin the principal functions of the Commission in protecting the work of the Commission and, inferentially, the administration of justice, by prohibiting any disclosure of the investigation into relevant matters, the assembling of evidence in relation to such matters, the furnishing of evidence and reports and the like.

[40] The Commission is, as earlier commented, established as a corporation and, as such, may buy, lease or rent property, purchase goods and enter into contracts for any of its ancillary functions. The provisions of s 80 of the Act are not intended and do not apply to information relating to those ancillary functions. Were the Commission to enter into a leasehold arrangement with a landlord, it would not be a criminal offence for the landlord to provide information provided to it by the Commission in that capacity. Likewise, were the landlord and the Commission, by way of example, to dispute as to the terms of the lease, it would not be impermissible (or otherwise illegal) for the landlord to seek, by Notice to Produce or otherwise, any notes relating to the terms of the contract for lease and for the Court to require its production.

[41] A different attitude may be taken if the lease arrangements were to involve a particular property for the purpose of investigation into the occupants of an adjoining property. In other words, the provisions of s 80 and the requirements of secrecy and confidentiality relate to the disclosure of investigations, the disclosure of evidence and any information that would jeopardise or otherwise disclose aspects of such investigation, reporting or collating of evidence, namely, its special statutory functions. The secrecy provisions in s 80 of the Act do not, on such a purposive construction, go beyond such matters.

[42]   In circumstances where the Commission acts in its corporate capacity, as any corporation might, the secrecy provisions do not apply.”

14. The submission of the Commission in the earlier proceeding was to the effect that all the information relating to the alleged agreement between SG and the Commission was caught by the secrecy provisions. That submission was rejected.

15. The parties have agreed that the Notices to Produce (or the extant Notice to Produce) falls away if there are no Motions remaining for which those documents are necessary or their production expedient. In other words, if, as a matter of form or substance, the Court were to determine that the Equity Motion, seeking equitable relief the effect of which was the setting aside of the proceedings, and other ancillary relief, purportedly in the public interest, failed, then there would be no forensic purpose in the production that had been sought and it would be unnecessary for the Court to deal with the details of the legal professional privilege or the assessment of whether a particular document or particular communication fell within the secrecy provisions of the Crime Commission Act (s 80) and were or were not required to be produced.

Equitable Relief

16. By Motion on notice, the Commission sought, pursuant to the Court’s equitable jurisdiction, that the plaintiff’s Statement of Claim be struck out; that the plaintiff be restrained from using, directly or indirectly, information regarding the Commission divulged or communicated to the plaintiff by JG, a former officer of the Commission; that the plaintiff be restrained from instructing his current solicitors; that the plaintiff be restrained from permitting any other solicitors retained in relation to these proceedings from briefing counsel, who have been instructed in these proceedings by the plaintiff’s current solicitors or instructing such counsel on a direct access basis; and costs.

17. While there are different discretionary aspects to the orders sought under prayers [2], [3] and [4] of the Motion, summarised above, each depends upon the basis upon which the plaintiff’s Statement of Claim would be struck out utilising the Court’s equitable jurisdiction.

18. During the course of the proceedings, in relation to the various Notices to Produce and Notices of Motion, the plaintiff, by leave granted without objection, sought to amend his Motion to include the striking out of the second Motion on notice by the Commission (the “Equity Motion”).

19. The plaintiff relies upon the judgment of Campbell J (as his Honour then was) in Re Jay-O-Bees; Rosseau v Jay-O-Bees (2004) 50 ACSR 565; [2004] NSWSC 818. At [63], Campbell J discussed the relationship between an interlocutory process and the principal relief obtained or to be obtained in the proceedings. At [64] of Re Jay-O-Bees; Rosseau v Jay-O-Bees, his Honour discussed the kind of matters that may be involved in interlocutory applications and concluded:

“But relief which is sought in an interlocutory application must always be relief which is sought for the purpose of advancing claims which either a plaintiff or a defendant makes in the principal proceedings.”

20. His Honour then relied upon this purposive requirement and the judgment of Owen CJ in Eq in Haviland v McLeary [1894] NSWLawRp 1; (1894) 15 LR (NSW) (Eq) 22 and Phillips v Walsh (1990) 20 NSWLR 206, in which McLelland J dealt with a Motion, brought in proceedings concerning administration of a deceased’s estate, seeking relief beyond that claimed by the principal proceedings. His Honour, Campbell J, then remarked at [67] and following:

“[67]   It is to be noted that this rule requires an application to be made by motion in three differently described circumstances – when it is ‘in’ proceedings, when it is ‘for the purpose of’ proceedings, or when it is ‘in relation to’ proceedings. In Phillips v Walsh (1990) 20 NSWLR 206 the plaintiff submitted that the relief sought in her Notice of Motion was appropriate because it was ‘in relation to’ the original proceedings commenced by Statement of Claim because both related to the administration of the same estate, and because the relief was intended to enforce compliance with a consent order which had been made in the principal proceedings. His Honour said, at 209-10:

‘In my opinion, it is not the purpose or the effect of Pt 19, r 1, to prescribe the kinds of applications which can be made in existing proceedings: the purpose of the rule is merely to prescribe the mode by which applications in existing proceedings are to be made, namely by motion. The question whether any particular application can properly be made in existing proceedings is a matter to be determined according to general law principles as modified by any relevant statutory provision ... This exception or qualification does not, however, extend to an application made for the purpose of giving substantive relief not sought in the statement of claim or which is substantially different to that given by the final order: see generally Haviland v McLeary [1894] NSWLawRp 1; (1894) 15 LR (NSW) (Eq) 22; 10 WN (NSW) 146; Poisson & Woods v Robertson & Turvey (1902) 86 LT 302; 50 WR 260; 46 Sol Jo 196; Dowdle v Hillier (1949) 66 WN (NSW) 155; Re Porteous [1949] VicLawRp 68; [1949] VLR 383; [1950] ALR 89; Cristel v Cristel [1951] 2 KB 725 and Re Scott (1964) 82 WN (Pt 1) (NSW) 313; [1964-5] NSWR 1636.’

[68]   At 210 McLelland J concluded that it was inappropriate to try, on motion in proceedings, a question of whether those proceedings had themselves been compromised, and said:

‘it would not be proper to do so where substantial matters are involved beyond the ambit of the proceedings as originally constituted, or where, in the interests of justice, disposition of the matter on summary application is inappropriate’.

[69]   In Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697, Handley JA recognised that a consent judgment can be set aside on the same grounds as an agreement to compromise proceedings can be set aside, and continued:

‘However it is also established that the jurisdiction to set aside a consent order on such a ground should be invoked by a new action brought for that purpose and not by a motion in the original proceedings: see Ainsworth v Wilding [1896] 1 Ch 673 and Kinch v Walcott [1929] AC 482 at 494; compare Phillips v Walsh (1990) 20 NSWLR 206. This rule was described by the Privy Council as “alone consistent with convenient practice”: see Kinch v Walcott (at 494).’

[70]   In Johnston v Australia and New Zealand Banking Group Ltd; Johnston v Richardson [2003] NSWSC 454 at [57], Davies AJ declined to entertain an interlocutory motion seeking to have a person declared a vexatious litigant, and required any such application to be brought by separate proceedings. All the cases I have just been considering can be seen to be ones where the Court declined to entertain an interlocutory motion because it was not for the purpose of advancing the relief claimed in the principal proceedings.

…

[72]   I should also say that whether the relief which is sought on an interlocutory application is for the purpose of advancing claims which either a plaintiff or defendant makes in the principal proceedings is not a matter of the subjective motivation of the person who brings the application. Rather, the application must be one of a kind which can be seen objectively to be of a type which advances those claims. If A brings an action for damages against B, it might be subjectively very useful for A, in deciding what steps to take concerning that action, to have a Court determination that B is covered by a valid policy of insurance for the type of claim which A brings, but an application for a declaration to that effect could (apart from any other problems it has) not be brought by notice of motion in the action between A and B.”

The Basis of the Defendant’s Motion

21. Some clarification is necessary in relation to the manner in which the matter proceeded before the Court before the earlier judgment. There were two fundamental issues associated with the Notices to Produce. First, the defendant submitted that all of the documents required to be produced under the first Notice to Produce were unavailable for production pursuant to the terms of s 80 of the Crime Commission Act. That Notice to Produce fell away (or was withdrawn).

22. Nevertheless, the defendant sought the production of documents for which a schedule was tendered and in relation to which a number, if not all, of the documents required to be produced were claimed as privileged. The defendant, in response to the claim for privilege, submitted that the privilege did not run in circumstances where a communication between the legal representative and the plaintiff was an aspect of unlawful conduct, being the breach of the secrecy provisions in the Crime Commission Act (see s 80).

23. Again, the underlying assumption in the Commission was that any communication between its former officer, JG, and the plaintiff was a communication in which information was passed contrary to the provisions of s 80 of the Crime Commission Act.

24. On the other hand, the plaintiff submitted that none of the information was in that category; legal professional privilege applied; and the plaintiff was not required to produce any of the documentation. In the earlier judgment, the Court took the view that each party’s “all or nothing” approach was being agitated for their own purposes, rather than that which was appropriate in determining the motions then before the Court.

25. The Court determined, as earlier recited, that information passed in relation to the ancillary functions of the Commission, in its “corporate” capacity, were not documents containing information to which s 80 of the Crime Commission Act applied.

26. Further, the Court determined that a conversation between an officer or agent of the Commission with a person who was to be engaged by the Commission, either as an employee or under a contract purportedly binding on the Commission and under which the Commission was obliged to make payment for services rendered, was not information caught by s 80 of the Crime Commission Act. More importantly, such a conversation was a conversation in terms known to the plaintiff, in this case, or person engaged in the conversation and purportedly engaged as an employee or contractor to the Commission.

27. As such, the terms of a conversation or document that purported to engage the plaintiff in a legally binding arrangement, under which the plaintiff would perform work or provide services, and the Commission would be required to pay an amount in relation to the performance of that work or the provision of those services, did not form a basis for a breach of the secrecy provisions in s 80 of the Crime Commission Act.

28. Further again, the plaintiff’s Statement of Claim does not depend upon documents or information provided in breach of s 80 of the Crime Commission Act.

29. Given the submission of the Commission that the whole of the proceeding was defective because it relied upon a breach of s 80 of the Crime Commission Act in order for it to be commenced and to proceed, the Court determined that the Motion to Dismiss the proceeding, based as it was on that proposition, could not succeed. Further, the question of legal professional privilege must be determined on a document by document approach and not on the basis that the provision of any or all information relating to the Commission was rendered impermissible by the provisions of s 80 of the Crime Commission Act.

21. In relation to the Notice of Motion for equitable relief, the same applied to the prayers in that Motion. The order of the Court dismissing the motions to dismiss the proceedings was intended to apply to all motions seeking to dismiss the proceedings, whether under the common law or in accordance with equitable relief.

22. The basis for that is that the Court held, in the earlier judgment, that s 80 of the Crime Commission Act did not apply to a conversation between an officer or agent of the Commission, on the one hand, and the plaintiff, on the other hand, when that conversation “engaged” (or purportedly engaged) the plaintiff or was a conversation which, assuming it was agreed, delineated the terms of any such arrangement.

23. In relation to the Equity Motion, the defendant submits that the orders sought are properly orders that may be agitated as part of an interlocutory proceeding in the course of the proceedings now before the Court. The Motion to Dismiss proceedings is plainly one that may be agitated during the course of an interlocutory hearing in these proceedings and may be agitated on motion in the proceedings. This is because it relates to, or forms part of, the substantive proceedings and its proper determination.

24. The effect of a successful motion of that kind may be final (in the sense that the proceedings would be dismissed), but the subject matter is interlocutory in that it depends upon matters other than the final determination of the rights of the parties in relation to this substantive matter.

25. The prayers for relief, other than prayer [1], are in a different category. The prayers for relief in [2], [3] and [4] of the Equity Motion relate to enjoining the plaintiff from the use of any information regarding the Commission, communicated to the plaintiff by its former officer; restraining the plaintiff from instructing particular lawyers; and other ancillary matters, each of which is based upon the proposition that the former officer of the Commission has divulged or communicated information to the plaintiff in breach of s 80 of the Crime Commission Act.

26. Further, the relief sought is akin to relief sought against a subsequent employer of an employee who possesses confidential information. In ordinary circumstances, proceedings would be taken against the employee or officer restraining that employee from divulging, communicating or utilising any confidential information and, as a consequence thereof, the subsequent employer would be restrained from utilising any information already divulged.

27. The plaintiff, who may be wholly unaware of that which is said to be confidential information, ought not, in these proceedings, be restrained from utilising lawyers or an officer who has allegedly received confidential information without the defendant first establishing that the lawyer or officer has divulged such information, contrary to the legal duties imposed upon him.

28. That latter aspect may not be dealt with at an interlocutory process in these proceedings, first, because the prayer in order [1] is based on the fundamental premise that the Statement of Claim and/or proceedings could not be agitated without the provision of confidential information, inconsistent with s 80 of the Crime Commission Act.

29. That primary premise has not been established. Rather, the plaintiff is entitled (assuming legitimacy in his claim) to sue on what is said to be a contract formed with him by the Commission. The formation and terms of that contract do not depend (and on one view, could not depend) on the provision of information contrary to s 80 of the Crime Commission Act.

30. Secondly, the prayers in [2], [3] and [4] of the Equity Motion depend upon the proposition that confidential information has already been divulged (or that there is a threat that the information will be divulged), contrary to the provisions of s 80 of the Crime Commission Act. Again, that proposition has not been established. But, more importantly, is a matter primarily between the Commission and JG, who is not a party to the proceedings and could not be.

31. In other words, the prayers for relief in [2], [3] and [4] of the Equity Motion are not able to be agitated in interlocutory proceedings commenced by motion, and the prayers cannot be granted at this stage.

32. In simple terms, if the Commission, through one of its agents, officers or employees said to the plaintiff, at the time, “You are hereby employed under a contract of employment, the terms of which are, you will collect information as directed and you’ll be paid X dollars per week” and the plaintiff accepted that offer, there would be a contract of employment, presumably, upon which the plaintiff could sue. The information contained in that “offer” would not be covered by the provisions of s 80 of the Crime Commission Act.

33. The subsequent confirmation by an officer or employee of the Commission that the terms of the conversation were as indicated in the above hypothetical, would also not be covered by the secrecy provisions in s 80 of the Crime Commission Act. The fact, if it were the fact, that some of the directions for the obtaining of information might be covered by the secrecy provisions in s 80 of the Crime Commission Act, or the information obtained by the plaintiff, might be so covered, does not affect the legality of the conversation that is relied upon for the formation of legally binding obligations and the terms of any such contract. Indeed, information covered by s 80 of the Crime Commission Act would, with some exceptions, be irrelevant to the current proceedings.

34. The principles as to the capacity of a party to agitate by motion in interlocutory proceedings are those principles described by Campbell J in the passage recited above. As earlier stated, the factual basis of the relief sought is incapable of being established. Further, the Equity Motion concerns a breach of duty by JG and requires separate substantive proceedings.

35. The prayers in [2], [3] and [4] of the motion, on their face, depend upon the proposition that the officer mentioned in those paragraphs has breached s 80 and could be enjoined from divulging any information caught by s 80 of the Crime Commission Act. In order to succeed in prayers [2], [3] and [4] of the Equity Motion, the defendant would need first to succeed in relation to that underlying premise.

36. The officer in question is not a party to these proceedings and no claim for relief, including injunctive relief, has been sought against that officer. The orders sought are not orders that either the plaintiff or defendant advances in the current substantive proceedings. Nor do they advance any such claims.

37. Further, the prayers do not form any ancillary functions. The prayers seek substantive relief not claimed by either party in the current substantive proceedings.

38. In those circumstances, both for reasons of substance and reasons of form (by which I refer to whether the issues are capable of being dealt with as interlocutory proceedings in this matter), the claim for equitable relief, in its entirety, cannot succeed.

39. The Court makes the following orders:

1. The motion of the first defendant, New South Wales Crime Commission, under the Court’s equitable jurisdiction is dismissed in its entirety;

2. The first defendant shall pay the plaintiff’s costs of and incidental to that motion.

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Decision last updated: 07 May 2018