Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496...

[2003] NSWSC 386

CITATION:	Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496 (GK), for the purposes of applying for orders under section 33 of the Evidence on Commission Act 1995 [2003] NSWSC 386
HEARING DATE(S):	1/5/03
JUDGMENT DATE:	9 May 2003
JUDGMENT OF:	Bell J at 1
DECISION:	Motion dismissed; Applicant to pay the plaintiff's costs of the motion
LEGISLATION CITED:	Evidence Act 1995 Evidence on Commission Act 1995 Evidence (Evidence on Commission) Amendment Act 1988 Supreme Court Rules 1970
CASES CITED:	Australian Securities Commission v Marlborough Goldmines Ltd (1993) 177 CLR 485 Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 Forsyth; Re Cordova v Philips Roxane Laboratories Inc (1984) 2 NSWLR 327 In the Will of Sheppard [1972] 2 NSWLR 714 Lenning v Alexander Proudfoot Company World Headquarters (unreported) NSWCA, 22 April 1991 McCabe v British American Tobacco Australian Services Ltd [2002] VSC 73 National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8 National Mutual Holdings Pty Limited v The Sentry Corporation (unreported) FCA, 30 May 1990 Newcastle City Council v Kern Land Pty Ltd (unreported) NSWSC, 9 December 1996 NSW Commissioner of Police v Tuxford [2002] NSWCA 139 Pickles v Gratzon [2002] NSWSC 688 Principal Registrar of the Supreme Court v Ali Tastan (1994) 75 A Crim R 498 Schutt v Queenan [2000] NSWCA 341 Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 Westpac Banking Corp v Abemond Pty Ltd (unreported) NSWSC, 28 October 1994
PARTIES :	Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496 (GK), for the purposes of applying for orders under section 33 of the Evidence on Commission Act 1995
FILE NUMBER(S):	SC 13177/02
COUNSEL:	Dr Bell (Plaintiff/Respondent) Mr M.R. Speakman / Ms K. Richardson (Applicant)
SOLICITORS:	Ebsworth & Ebsworth (Plaintiff/Respondent) Gilbert & Tobin (Applicant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BELL J

13177/02 Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496 (GK), for the purposes of applying for orders under section 33 of the Evidence on Commission Act 1995

JUDGMENT

1 BELL J: The plaintiff commenced proceedings by summons claiming orders, including that Nicholas Basil Cannar (the applicant) be examined in relation to the topics set out in a Letter of Request for International Judicial Assistance (the Letter of Request) issued by the United States District Court for the District of Columbia (the US District Court).

2 On 9 December 2002 James J made orders, ex parte, pursuant to s 33 of the Evidence on Commission Act 1995 (“the Act”) including that the applicant attend at the offices of the National Disputes Centre on 12 March 2003 to be examined in relation to the topics set out in the letter of request (the orders).

3 On 5 February 2003 the applicant filed a notice of motion claiming orders, including that the orders be set aside (the principal motion).

4 The applicant’s solicitors served a notice to produce dated 21 March 2003 on the plaintiff returnable on 8 April 2003 (the notice). On that date the plaintiff moved to have the notice set aside. The plaintiff’s motion came on for hearing before Senior Deputy Registrar Whitehead (the Registrar) on 17 April 2003. After a lengthy hearing on that day the Registrar set aside the notice.

5 The applicant moves pursuant to Pt 61 r 3 of the Supreme Court Rules 1970 (the SCR) for a review of the order setting aside the notice.

6 The parties submitted that I would approach the conduct of the review on the basis that it was a hearing de novo. Both parties sought, without objection, to lead additional evidence to that which was before the Registrar.

The Registrar’s reasons

7 On 22 April 2003 the Registrar published short reasons for his determination. He observed that it was the applicant’s case that he may expose himself to the risk of criminal prosecution and to civil liability in the event that he was required to give evidence before the examiner. He also noted that the applicant contended that the plaintiff may use his deposition “for impermissible purposes”. In this respect the Registrar referred to the suggestion that there was an association between the United States Department of Justice (the DOJ) and an Australian law firm. He went on to say:

“The respondent submits that this material permits me to be satisfied that the plaintiff is likely to use the evidence obtained at the examination to the detriment of the respondent. It is suggested that the arrangement between the Australian law firm and the Department of Justice will result in the evidence being placed in the public domain. I have perused the tender bundle. I am unable to reach that conclusion. It would appear that following the deposition of David Schechter, in what I would call the main proceedings in the United States of America, his evidence appeared in the public domain. There is no evidence this occurred as a result of any steps taken by the Department of Justice. I conclude that the notice seeking the documents referred to in the schedule is a fishing expedition as that term is well known and must be set aside.”

8 A review of an order made by a Registrar pursuant to Pt 61 r 3 is not an appeal. It is not necessary for the applicant to demonstrate that the decision of the Registrar was affected by error: In the Will of Sheppard [1972] 2 NSWLR 714 at 716-717; Westpac Banking Corp v Abemond Pty Ltd (unreported) NSWSC, 3 November 1994, per Santow J. In the latter case Santow J observed that it is proper for the court to exhibit a natural inhibition against the unrestrained substitution of its view for that of the original tribunal. The further evidence led by the applicant was principally directed to proof that the deposition of David Schechter (the Schechter deposition) became public prior to the DOJ filing it in the proceedings United States of America v Philip Morris, Inc and Ors (the US proceedings). I will return to this issue. For present purposes I note that the evidence before me on the review was in a number of respects different to that before the Registrar.

The Notice to Produce

9 In the proceedings before the Registrar the applicant did not press the whole of the terms of the notice. On the review he further refined the scope of the notice. By the notice, as amended in the course of the hearing before me, the applicant seeks production of the following documents:

(i) All documents relating to Tobacco Litigation that constitute, record or evidence any communications between any employee, officer or agent of the United States Department of Justice and any employee, officer or agent of the Australian law firm, Slater & Gordon.
(ii) All documents relating to Tobacco Litigation that constitute, record or evidence any present or proposed agreement, arrangement, understanding, cooperation or assistance between the United States Department of Justice and the Australian law firm, Slater & Gordon, including any of its employees, agents or representatives.
(iii) All documents relating to Tobacco Litigation that constitute, record or evidence any secondment, employment, contract or engagement, for fee or otherwise, of any employee, officer, agent or representative of the Australian law firm, Slater & Gordon to the United States Department of Justice including, but not limited to, the individual named Andrew Higgins.
(iv) All documents relating to Tobacco Litigation that constitute, record or evidence any present or proposed agreement, arrangement, understanding, cooperation or assistance between the United States Department of Justice and any private law firms or attorneys for a private law firm or attorney, or any of their employees, officers, agents or representatives, to act as Assistant Attorney-General or otherwise cooperate, work on or assist in the United States of America in respect of proceedings of Tobacco Litigation.
(v) (omitted)
(vi) All documents that constitute, record, evidence or relate to the use of the deposition of David Schechter of August 2002 (the Schechter Deposition).
(vii) All documents that constitute, record or evidence the use of any deposition of a person, other than David Schechter, obtained in the course of or for the purpose of the Proceedings, for any purpose other than the Proceedings.

10 “Document” is defined to mean “the original of any document including but not limited to, any memorandum, file note, other note, diary, handwriting, correspondence, facsimile communication, photograph, audio tape, email, print out of email, electronic file note, computer disc, or any means of document storage or, if the original is not available, a copy of the document together with all copies which may vary from the original (because of annotation, amendment or otherwise).

11 “Tobacco Litigation” is defined to mean the US proceedings and the proceedings in McCabe v British American Tobacco Services Limited [2002] VSC 73 (the McCabe proceedings) and the decision of the Court of Appeal in those proceedings, together with the application for special leave to appeal to the High Court filed by Roxanne Joy Cowell, representing the estate of Rolah Ann McCabe.

12 The Letter of Request recites that the US proceedings are within the jurisdiction of the US District Court. The claims asserted in the US proceedings arise out of alleged violations of the United States’ racketeering laws. The plaintiff’s complaint in the US proceedings alleges, inter alia, that not later than 1953 the defendant companies entered into a conspiracy to deceive consumers into starting and continuing to smoke, without regard to the truth or the health consequences to the American people. Various acts and omissions said to evidence the conspiracy are set out.

13 The Letter of Request repeats information placed before the US District Court by the plaintiff in support of its issue. A number of assertions are made about the applicant. These include:

(i) that he is the former long-time senior solicitor and head of the legal department of British American Tobacco Company Limited (BATCo) in the United Kingdom,
(ii) his responsibilities included devising and implementing document management policies for BATCo and the implementation of BATCo’s world-wide document management, retention and destruction policies,
(iii) his responsibilities also included managing the flow of documents between BATCo and its United States affiliate, Brown & Williamson,
(iv) the document management policy resulted in the destruction of relevant documents for the purpose of preventing the discovery of documents in litigation in the United States and otherwise,
(v) in the mid-1990’s he took up fulltime employment with WD & HO Wills in Australia,
(vi) he participated in policies and practices that resulted in the destruction of relevant documents in the United Kingdom and elsewhere, including Australia.

14 The Letter of Request sets out those paragraphs of the plaintiff’s amended complaint in the US proceedings that allege that the defendants destroyed smoking and health related documents. It recites that the Court is authorised by rule 28(b) of the Federal Rules of Civil Procedure and 28 United States Code 1781 and 1782 to issue the Letter of Request. There follows the request by Judge Kessler, US District Court Judge that the applicant be summonsed to appear before this Court, or a competent person appointed by it, for the purpose of giving evidence relating to the topics set out therein. The topics relate to the creation of the document management policy, the implementation of that policy, the rules and procedures set forth by that policy, the destruction of smoking and health documents pertaining to BATCo and Brown & Williamson’s litigation position in the United States and the transportation, routing, storage and warehousing of documents.

The Applicant’s Case on the Principal Motion

15 The applicant seeks, on the hearing of his principal motion, that the orders be set aside upon the following grounds:

(i) They were made beyond power; or
(ii) If not made beyond power, this Court should, in the exercise of its discretion, decline to make the orders sought in the Letter of Request on the grounds of oppression.
Four grounds of oppression are identified in written submissions that have been filed on the applicant’s behalf in support of the principal motion. They are as follows:
(a) The examination is directed to whether the applicant engaged in conduct that under the United States law constitutes both:
(i) an offence; and
(ii) a serious civil wrong;
(b) The testimony sought to be obtained in the examination could be used against the applicant even if he were to claim privilege against self-incrimination:
(i) In these or in later civil or criminal proceedings brought by the Department of Justice; and
(ii) In any other civil or criminal or disciplinary proceedings brought by anyone else anywhere in the world;
(c) The court cannot control the later use of the examination testimony; and
(d) The examination is so widely framed as to be oppressive.

16 The ground that the orders are beyond power involves two discrete areas of challenge. The first is not relevant to the present determination. The second basis is that the Letter of Request was issued for a purpose other than the US proceedings being a purpose that is “investigatory”. It is the applicant’s case that the DOJ and a firm of solicitors based in Melbourne, Slater & Gordon, have been cooperating by exchanging material obtained in one tobacco proceeding for use in another proceeding. It is the applicant’s submission that should the Court find that the Letter of Request to have been issued for a purpose that included an impermissible purpose the jurisdiction conferred by s 33 of the Act is not enlivened (alternatively, as a matter of discretion the orders should be set aside).

The Principles

17 Part 36 r 16(1) of the SCR provides that where a party to any proceedings serves on another party a notice requiring the party served to produce at any hearing in the proceedings any document or thing for the purpose of evidence and the document or thing is in the possession, custody or power of the party served, the party served shall, unless the court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production. The effect of the rule is to impose an obligation to comply with a notice to produce similar to the obligation that exists with respect to a subpoena; Bailey v Beagle Management Pty Ltd [2001] FCA 60; 105 FCR 136.

18 The principles that apply in dealing with an application to set aside a subpoena are as stated by Jordan CJ in The Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 574-575:

“Where the subpoena is addressed to a party, it is still necessary that it should state with reasonable particularity the documents which are to be produced : A.-G. v Wilson (7) Sim 526 at 529; Earl of Powis v Negus [1923] 1 Ch 186 at 190. It is true that a party, unlike a stranger, can be required to give discovery; but it is not legitimate to use a writ of subpoena duces tecum as a substitute for an application for discovery of documents, or as an alternative to an application for further and better discovery. Discovery applications should be made at the proper time and place. It would greatly impede the trial of actions at nisi prius , and impose an intolerable burden upon the presiding judge, if he were required from time to time to suspend proceedings and wade for himself through masses of documents for the purpose of endeavouring to determine whether any of them are relevant. Especially is this so when the documents may be called for whilst the case is still at the stage when it is difficult or perhaps impossible for the Judge to know what may become relevant and what may not. In the absence of special circumstances, eg Griebart v Morris [1920] 1 KB 659, a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of “fishing”, ie, endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all; Hennessy v Wright (24 KBD 445 at 448) or to discover the nature of the other side’s evidence: Griebart v Morris (at 666). Even if the documents are specified, a subpoena to a party will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant: Steele v Savory [1891] WN 195.”

19 In Travel Compensation Fund v Blair [2002] NSWSC 1228 McClellan J collected a number of the authorities since Small dealing with the circumstances in which a subpoena will be set aside and the circumstances in which a court will refuse inspection of documents produced on subpoena in the absence of identification of the legitimate forensic purpose for which access is sought. In the latter respect his Honour referred to NSW Commissioner of Police v Tuxford [2002] NSWCA 139 and Principal Registrar of the Supreme Court v Ali Tastan (1994) 75 A Crim R 498 per Barr AJ (as his Honour then was) at 504. Significant to the issues raised by this application is McClellan J’s observation that the principle that a subpoena is not be used by a party to litigation for the purpose of fishing is one that requires careful consideration. His Honour noted that a subpoena is less likely to be set aside if the information that it seeks is exclusive to the other party. In this respect he cited Newcastle City Council v Kern Land Pty Ltd (unreported) NSWSC, 9 December 1996 and Schutt v Queenan [2000] NSWCA 341 per Mason P at [14]. The Court in Bailey v Beagle Management observed that the concept of fishing is one that has undergone substantial re-thinking in recent years (at 143).

20 In Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 Clarke J said at 719G:

“On the other hand, there is no doubt that a subpoena, particularly one addressed to a stranger, must be couched in terms of reasonable particularity. It may call for the production of such a large number of documents of doubtful possible relevance that it should be regarded as oppressive and an abuse of process: see the example given by Moffitt P in Waind (at 382). If a court is called upon to rule that a subpoena is an abuse of process in this sense, it will need to carry out an exercise of judgment upon the particular facts in each case, including but not limited to the terms of the subpoena, bearing in mind the need to balance the reasonableness of the burden imposed upon the recipient and the invasion of his private rights with the public interest in the due administration of justice and, in particular, that all material relevant to the issues be available to the parties to enable them to advance their respective cases. There is, in every case, a clash between these competing interests and whilst the balancing exercise to which I have referred must be carried out, it is the latter interest which is predominant. If the needs of justice require or could require that a stranger be obliged to carry out a very burdensome task in the collection, transportation and production of a large number of documents, then a subpoena calling upon the stranger to produce those documents will be upheld. I note, in passing, that the rules have recently been amended by the inclusion of Pt 37 r 9 to minimise the cost prejudice to a person obliged to perform an onerous task. It is obvious that the greater the particularity of the specification of the documents the easier it is to see how the documents might be relevant in some way to the issues being litigated. On the other hand, a subpoena couched in vague or wide terms and requiring production of many documents will be open to the objection that it probably calls for many documents that can have no possible relevance to the issue and may well be set aside.”

21 As appears from the extract set out above, his Honour’s observations were directed to a subpoena duces tecum addressed to a stranger.

22 Dr Bell submitted that in considering the scope of a subpoena addressed to a party it is appropriate to have regard to the refinement of the scope of discovery effected by the amendment of Pt 23 of the SCR. It is no longer sufficient that a document if discovered might lead an opposing party to a train of inquiry which might advance that party’s case or damage the discovery party’s case; National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8.

The Evidence on the Motion for review

23 The applicant tendered a bundle of documents, Ex A. I do not propose to refer to the whole of the contents of the bundle or to all of the other evidence led by the applicant. Mr Speakman, who with Ms Richardson appeared on the applicant’s behalf, took me through the documents on which reliance was placed. The bundle included an affidavit sworn by Peter Gordon, a solicitor with Slater & Gordon, on 24 April 2002 in the McCabe proceedings. In para [4] of his affidavit Mr Gordon deposed to receipt of a letter from the DOJ on 21 April 2002 asking Slater & Gordon to provide it with certain materials produced in the McCabe proceedings. It was his understanding that the request was made in connection with US proceedings.

24 Mr Gordon’s affidavit was sworn in support of a summons in the Supreme Court of Victoria claiming orders including a declaration that exhibits tendered in the McCabe proceedings were not the subject of an implied undertaking (not to disclose or use them other than for the purpose of the litigation), alternatively, that the plaintiff and her solicitors be released from their implied undertakings with respect to them.

25 Exhibit A also included a copy of a bill of costs prepared by Slater & Gordon in the McCabe proceedings. My attention was directed to entries showing, inter alia, that the plaintiff in the McCabe proceedings had proposed to rely on documents discovered by companies related to the defendant in the US that had now become public and that her solicitors had conducted extensive research from what is known in tobacco litigation as the Minnesota and Guildford Tobacco Document Depositories in the USA and UK respectively. The bill of costs included claims for obtaining the transcript of evidence given by a man named Wigand in proceedings in the US and for later conferences with him. A claim was made for an attendance on Hagens Burman, US Attorneys, in connection with assistance concerning smoking documents. There were claims relating to correspondence with US attorneys including a letter to a US Attorney advising “of current position” and seeking “any discovery abuse findings against B and W or BAT in USA”. Various attendances associated with obtaining information concerning David Schechter are recorded. There is a claim for 411 hours undertaken by Andrew Higgins, articled clerk, researching databases, depositories and other documents in relation to issues concerning document destruction. I have not set out every entry to which my attention was directed, but this represents a fair sample.

26 Included in the applicant’s bundle were copies of a number of newspaper articles. An article published in The Age on 23 August 2002 purported to quote extracts from the deposition of David Schechter filed in the U S proceedings. This material is relevant to para [6] of the notice.

27 An article published in the Herald Sun of 12 May 2002 referred to articled clerk, Andrew Higgins, briefing the DOJ attorneys on the McCabe case. In another article Andrew Higgins was described as having been seconded to the DOJ. An article dated 7 June 2002 appearing in Lawyers Weekly asserted that Andrew Higgins had spent the best part of the last month imparting the firm’s (Slater & Gordon) knowledge to US lawyers currently taking depositions from senior BAT headquarters staff. An article in Lawyers Weekly of 6 September 2002 stated:

“The outcome of the recently completed British American Tobacco Australian (BATA) appeal may entail massive global ramifications, with respondent solicitors Slater & Gordon asking the court for permission to allow the US Department of Justice to inspect documents used to uncover the infamous destruction policy.
As reported by Lawyers Weekly earlier this year, Slater & Gordon Solicitors have been assisting officials from the US legal watchdog who are eager to take advantage of the McCabe ruling in their fight against the tobacco giants. Newly admitted solicitor Andrew Higgins travelled to London to assist the Department’s task of taking depositions from past and present BAT senior staff members. Towards the end of the depositions, American lawyer and former BAT in-house counsel, David Schechter, confessed the company destroyed documents deemed harmful to its chances in the event of future litigation.”

The material concerning the association between the DOJ and Andrew Higgins of Slater & Gordon is relevant to paras [1], [2], [3] and [6] of the notice.

28 Also included in the applicant’s bundle were copies of documents printed from internet websites relating to a Seattle law firm, Hagens Burman. That firm is described in that material as one that has concentrated its practice in multi-plaintiff litigation. In recent years it claims to have expanded its practice to include representing governmental entities including in actions against the tobacco industry. It is said to have been involved in the State tobacco litigation in a number of States.

29 The applicant read the affidavit of Loren Kieve sworn on 24 April 2003. Mr Kieve is a lawyer practising in the United States. He deposed to the practice in the United States concerning the taking of pre-trial depositions. He states that a deposition is normally taken in a non-public setting, typically at the office of a law firm and that it is unusual to have outside observers present. The significance of the evidence of Mr Kieve relates to paras [6] and [7] of the notice. This evidence was not before the Registrar. Also relevant to these two paragraphs of the notice is a document in the applicant’s bundle being a report prepared for Henry Waxman, a member of the United States House of Representatives, titled Tobacco Industry Statements in the Department of Justice Law Suit. The report cites the contents of the Schechter deposition. The latter is footnoted in the report in this way:

“United States’ Notice of Filing of Official Transcripts, U.S. v Philip Morris Inc., 99-CV-2496 (D.D.C. filed Aug. 27,2002), Ex. A. (Deposition of David Schechter on Aug. 13, 2002) & Ex. B. (Deposition of David Schechter on Aug. 14, 2002).”

30 The plaintiff read two affidavits of Anthony John Highfield sworn 10 April 2003 and 1 May 2003. In the latter Mr Highfield deposed to his belief that production of the documents sought in the notice would be onerous. That belief was based upon a number of matters set out in bullet points in para [4]. Annexed to the affidavit is a memorandum opinion, dated 22 December 2000, prepared by Judge Kessler of the US District Court. In that document her Honour refers to the US proceedings as being of “enormous magnitude and complexity”. She says that at an early state of discovery more than three thousand requests for production of documents have been made. The defendants have served 1,723 comprehensive document requests on the plaintiff requesting documents under or in the possession, custody or control of at least twenty “executive branch departments, agencies and offices”. The defendants have made available to the plaintiff over twenty-six million pages of documents through depositories, data tapes and internet websites.

31 Mr Highfield deposes in his affidavit sworn 1 May 2003 to his instructions that to-date the US proceedings have comprised of about two thousand two hundred court filings and the taking of over two hundred depositions.

32 In his affidavit sworn on 1 May 2003 Mr Highfield states:

“I am informed by the plaintiff and I believe on information and belief, that in relation to the deposition of David Schechter taken in London on 18 June 2002 and 13 and 14 August 2002, that no party in the US proceedings sought to designate any part of the testimony given during the deposition as confidential and that the only application made with respect to this deposition was an unsuccessful application by British American Tobacco (Investments) Limited to seal four exhibits annexed to the deposition of David Schechter.”

Also annexed to that is a document titled Report and Recommendation # 85 of the Special Master . In that report the Special Master (appointed to case manage aspects of the US proceedings) refers to exhibits attached to David Schechter’s deposition taken on 13 and 14 August 2002. He goes on to report:

“On August 19, 2002, Plaintiff publicly filed the two day deposition transcript, along with all exhibits, as supplemental authority in support of a group of pending discovery motions. The following day, BATCo objected to the filing and requested that the submission be stricken. Plaintiff responded by stating that it would ‘not comply with [BATCo’s] request to treat these exhibits as ‘under seal’ and that it would ‘not alter or mark copies of the Schechter transcript in such a fashion”

33 Another annexure to the affidavit of Mr Highfield sworn on 1 May 2003 is a letter written by the plaintiff, dated 22 April 2003, addressed to him stating:

“I am the counsel of record for the United States in United States v Philip Morris Inc et al No. 99-CV-2496(GK) (D.D.C.) (‘the US proceedings’), and was nominated by the US District Court for the District of Columbia (‘the US District Court’) to bring proceedings in the New South Wales Supreme Court for an order compelling Nicholas Cannar to give testimony pursuant to a Letter of Request issued by the U.S. District Court.
As you are aware, on behalf of the United States, I undertake to the NSW Supreme Court that, until the transcript of testimony to be given by Mr Cannar at the forthcoming examination commencing on June 4, 2003 (including any videotape recording of such testimony) is tendered into evidence at the trial in the U.S. proceedings commencing on September 13, 2004, the United States will not use the testimony other than for the purposes of the U.S. proceedings (such purposes including any pre-trial motions and submissions that the United States may make in connection with the U.S. proceedings; I understand that Australian convention refers to such motions and filings as “interlocutory”), unless the United States is compelled to produce or disclose the testimony to another person under the compulsion of law or as directed by the U.S. District Court or any court of competent jurisdiction.”

The Parties’ Submissions

34 Mr Speakman, who with Ms Richardson, appeared on the applicant’s behalf, submitted that I would draw the inference that Andrew Higgins, an articled clerk in the employ of Slater & Gordon, had been seconded to the DOJ to work on the US proceedings and that he had assisted in taking the deposition of David Schechter. They also submitted that I would infer having regard to the date of publication of the contents of the Schechter deposition in the Age and the footnote in the report prepared for Rep Waxman, that the Schechter deposition was made available to Slater & Gordon who released it to the press prior to it being filed in the US District Court. Generally, Mr Speakman submitted that the applicant has established a foundation for a case that there exists a relationship between the DOJ and Slater & Gordon in connection with litigation against tobacco companies. Evidence of the nature and extent of this relationship would bear relevantly on his contention that a significant purpose in obtaining the issue of the Letter of Request was a wider investigatory one. Evidence of the relationship would also be relevant as showing the risk that his evidence would be made available to Slater & Gordon by the DOJ.

35 The plaintiff objects to paras [1], [2] and [3] principally on the grounds that the applicant is fishing and that material touching on any past contact between the DOJ and Slater & Gordon could not rationally affect the determination of either the purpose for which the Letter of Request was issued or any suggested oppression to which the applicant may be subject.

36 On the issue of improper purpose Dr Bell submitted that the Letter of Request on its face was issued by the US District Court for the purpose of taking evidence for the US proceedings. No case has been advanced by the applicant that a purpose of obtaining his evidence is to assist Slater & Gordon in the McCabe litigation or in any other tobacco litigation. If it be the fact that the DOJ and Slater & Gordon have assisted one another in connection with investigations of ongoing and future litigation in Australia and the United States, this was said to be irrelevant to the applicant’s claim for relief.

37 The question of whether the existence of an improper purpose (albeit not the dominant purpose) operates to invalidate the orders will be in issue on the hearing of the principal motion. The applicant’s proposition does not find support in Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc (1984) 2 NSWLR 327 per Clarke J at 333. However, as Mr Speakman noted in National Mutual Holdings Pty Limited v The Sentry Corporation (unreported) FCA, 30 May 1990, Northrop J dealing with the Evidence (Evidence on Commission) Amendment Act 1988 took a different approach. Dr Bell referred me to the decision of O’Keefe J in Pickles v Gratzon [2002] NSWSC 688, dealing with the provisions of the Act, and informed me of a decision of the Queensland Court of Appeal dealing with the equivalent legislation both of which followed the approach adopted by Clarke J in Forsyth.

38 The Act forms part of uniform State legislation giving effect to the Hague Convention and falls within that category of State legislation to which the observations of the High Court in Australian Securities Commission v Marlborough Goldmines Ltd (1993) 177 CLR 485 apply. Dr Bell acknowledged that he could not shut the applicant out from agitating that a subordinate improper purpose would invalidate the orders. However, in his submission in weighing up the competing considerations to which reference was made in Southern Pacific Hotel I might take into account that the judge hearing the principal motion will be constrained not to depart from the decision of the Queensland Court of Appeal unless convinced that it is plainly wrong.

39 It is apparent that the DOJ sought information from Slater & Gordon concerning the McCabe proceedings in connection with the US proceedings. Slater & Gordon appear to have diligently pursued lines of investigation in connection with the McCabe proceedings. I do not consider that the evidence shows Andrew Higgins to have been seconded to the DOJ. I accept that the evidence does suggest that he had contact with the DOJ and provided information to the DOJ concerning the McCabe proceedings while he was an employee of Slater & Gordon.

40 Dr Bell relied on the plaintiff’s undertaking (set out at [33] above) in support of a submission that even if there was material that tended to establish that the DOJ had exchanged information relating to litigation against tobacco companies with Slater & Gordon or some other law firm that material could not rationally bear on the determination of the issue of oppression. He submitted that it would be open to this Court to place a condition on the use to be made of the applicant’s testimony before the examiner. Given the undertaking by counsel responsible for the conduct of the US proceedings, and having regard to considerations of international comity that would favour the United States Court respecting a condition imposed by this Court, any evidence of past contact between the DOJ and Slater & Gordon might not meet the test of relevance for the purposes of s 55 of the Evidence Act 1995.

41 I am of the opinion that the material to which Mr Speakman took me does not demonstrate that the applicant has a case that the Letter of Request was issued with the provision of assistance to Slater & Gordon as any part of its purpose or for some other “wider investigatory purpose”. I am also of the opinion that it falls well short of demonstrating a case that the DOJ has any understanding or arrangement with Slater & Gordon such that it would make the applicant’s evidence available to Slater & Gordon at a time when it was not in the public domain. Taking into account the observations of the Full Federal Court in Bailey v Beagle Management concerning fishing to which I have referred (particularly in the case of a subpoena directed to a party) I am nonetheless of the view that the plaintiff’s objection to paras [1], [2] and [3] is made good and that no legitimate forensic purpose for obtaining the documents sought has been demonstrated.

42 I move now to para [4] of the notice. The applicant’s case on oppression raises a number of issues for consideration. Not all are sought to be advanced by reliance on the documents described in the notice. One aspect of his case on oppression arises out of what is said to be the practice in the United States of retaining private law firms by the DOJ and/or Attorney’s-General and District Attorneys in connection with the prosecution of tobacco litigation. It is submitted that if such a practice is employed in the US proceedings the risk that the evidence of the applicant may be made use of in connection with other litigation is magnified. Mr Speakman submitted that a private lawyer might not regard himself or herself as bound by the undertaking given by the plaintiff (assuming for present purposes that the undertaking might operate to bind her). In the way Mr Speakman put the matter, the greater the number of lawyers involved in the litigation the greater the likelihood of use of the applicant’s evidence for some purpose other than the US proceedings.

43 The applicant did not identify with any greater precision the case that he seeks to make arising out of the suggestion that private law firms may be retained by the DOJ in connection with the US proceedings.

44 Such evidence as is before me on this issue concerns Hagens Burman and its retainer on behalf of various of the States in litigation against tobacco companies not forming part of the US proceedings.

45 Para [4] is framed in broad terms. Mr Speakman resisted that criticism noting that it is confined, in that it relates only to the tobacco litigation as defined and to law firms providing assistance in the United States. He submitted that it was further confined in that it did not seek all correspondence, memoranda or the like. The terms of the paragraph require the plaintiff, inter alia, to search for any document (as broadly defined) that “evidences” “cooperation” between the DOJ and any private law firm to act as Assistant Attorney General or otherwise cooperate, work on or assist in the US in respect of the tobacco litigation as defined.

46 I consider that para [4] should be set aside because it is framed so broadly as to impose an onerous burden on the plaintiff, and because it is an exercise in fishing.

47 The applicant’s case with respect to para [6] was advanced on the basis that the documents sought might evidence “the wider investigatory purpose” for which the Letter of Request had been issued and of oppression. In both respects the applicant’s case was significantly dependent upon a view that the Schechter deposition was in the public domain prior to the date on which it was filed in the US District Court. The affidavit of Mr Highfield together with the report of the Special Master to which I have referred at para [32] above, is against such a finding. Mr Speakman acknowledged so much. However, he contended that the evidence on this application is of conflicting dates as to the date of filing of the Schechter deposition. The applicant’s case, that the Schechter deposition was filed in the US District Court after the date on which parts of it were quoted in the Age, was said to be arguable and to provide a proper foundation for obtaining the documents described in para [6].

48 I consider that the report of the Special Master is evidence of the date on which the Schechter deposition was filed with the US District Court. The report prepared for Rep Henry Waxman is some evidence that the United States’ Notice of Filing of Official Transcripts was filed on 27 August 2002. I do not consider that in light of the footnote to that Report the applicant has established a foundation for his asserted case that the Schechter deposition was in the public domain before it was filed. Again the objection that the applicant’s notice is fishing is good. Equally, the submission that the documents relating to the use of the Schechter deposition do not bear rationally on the determination of either the purpose for which the Letter of Request was issued or any oppression to which the applicant may be subject, should he be required to comply with the orders, is one of substance.

49 The plaintiff objected to para [7] on the grounds that it was fishing, that it did not bear relevantly on the issues raised by the applicant’s claim for relief and that it imposed an onerous burden on her. As to the latter, there are 200 depositions that she would be required to consider and, in each case, to make a determination whether any documents in her possession, power or control evidenced the use of the same “for any purpose other than the proceedings”. The legitimate forensic purpose identified in support of the production of the documents sought by this paragraph essentially depends upon reasoning that the Schechter deposition was used for a purpose other than the US proceedings and, hence, the likelihood that a similar fate attended some or all of the other depositions. It does not seem to me that a foundation for that chain of reasoning has been established. Each of the plaintiff’s objections is made out.

50 I consider that the Registrar was correct to set aside the notice to produce. After giving consideration to the additional evidence that was led on the review I am not persuaded that the order made by the Registrar should be set aside. I decline to do so.

51 For these reasons the orders that I make are:

1. Dismiss the motion;

2. The applicant is to pay the plaintiff’s costs of the motion.

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Last Modified: 05/12/2003