The Commonwealth of Australia v Temwood Holdings Pty Ltd
[2001] WASC 282
THE COMMONWEALTH OF AUSTRALIA -v- TEMWOOD HOLDINGS PTY LTD & ORS [2001] WASC 282
| (2001) 25 WAR 31 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 282 | |
| Case No: | CIV:1427/2001 | 5 OCTOBER 2001 | |
| Coram: | PULLIN J | 12/10/01 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Discovery ordered | ||
| A | |||
| PDF Version |
| Parties: | THE COMMONWEALTH OF AUSTRALIA TEMWOOD HOLDINGS PTY LTD (ACN 052 503 152) ASEAN AUSTRALIAN ASSETS PTY LTD (ACN 009 424 193) NEIL OLIVER |
Catchwords: | Discovery Whether the Commonwealth is bound by the implied undertaking on discovery Whether discovery should be ordered in proceedings commenced by originating motion |
Legislation: | Foreign Acquisitions and Takeovers Act (Cth) 1975 Rules of the Supreme Court, O 26 r 6(1), O 26 r 7(3)(b)(i) Supreme Court Act 1935, s 4 |
Case References: | Australian Securities & Investments Commission v Knightsbridge Managed Funds Ltd & Anor [2001] WASC 177 Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476 Bell Resources Ltd v Turnbridge Pty Ltd, unreported; SCt of WA (Master White); Library No 7180.2; 30 June 1988 Bunning v Cross (1978) 141 CLR 54 Crane v Gething (2000) 97 FCR 9 Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 Jacobsen v Rogers (1995) 182 CLR 572 Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 Rank Film Ltd v Video Information Centre [1982] AC 380 Re Borthwick [1948] Ch 645 Riddick v Thames Board Mills Ltd [1977] QB 881 Temwood Holdings Pty Ltd v Oliver & Ors [1999] WASC 212 A v Hayden (1984) 156 CLR 532 AttorneyGeneral for the Northern Territory v Kearney (1985) 158 CLR 500 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 Nicholas v The Queen (1998) 193 CLR 173 Ridgeway v The Queen (1995) 184 CLR 19 Sybron Corporation v Barclays Bank Plc [1985] Ch 299 Sydney Harbour Trust Commissioners v Ryan (1911) 13 CLR 358 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
TEMWOOD HOLDINGS PTY LTD (ACN 052 503 152)
First Respondent
ASEAN AUSTRALIAN ASSETS PTY LTD (ACN 009 424 193)
Second Respondent
NEIL OLIVER
Third Respondent
Catchwords:
Discovery - Whether the Commonwealth is bound by the implied undertaking on discovery - Whether discovery should be ordered in proceedings commenced by originating motion
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Legislation:
Foreign Acquisitions and Takeovers Act (Cth) 1975
Rules of the Supreme Court, O26 r 6(1), O 26 r 7(3)(b)(i)
Supreme Court Act 1935, s 4
Result:
Discovery ordered
Category: A
Representation:
Counsel:
Applicant : Mr E M Heenan QC & Mr P R Shanahan
First Respondent : Mr D H Solomon
Second Respondent : Mr M J McPhee
Third Respondent : Mr M J McPhee
Solicitors:
Applicant : Australian Government Solicitor
First Respondent : Solomon Bros
Second Respondent : Michell Sillar McPhee
Third Respondent : Michell Sillar McPhee
Case(s) referred to in judgment(s):
Australian Securities & Investments Commission v Knightsbridge Managed Funds Ltd & Anor [2001] WASC 177
Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476
Bell Resources Ltd v Turnbridge Pty Ltd, unreported; SCt of WA (Master White); Library No 7180.2; 30 June 1988
Bunning v Cross (1978) 141 CLR 54
Crane v Gething (2000) 97 FCR 9
Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613
Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477
Jacobsen v Rogers (1995) 182 CLR 572
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Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756
Rank Film Ltd v Video Information Centre [1982] AC 380
Re Borthwick [1948] Ch 645
Riddick v Thames Board Mills Ltd [1977] QB 881
Temwood Holdings Pty Ltd v Oliver & Ors [1999] WASC 212
Case(s) also cited:
A v Hayden (1984) 156 CLR 532
AttorneyGeneral for the Northern Territory v Kearney (1985) 158 CLR 500
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10
Nicholas v The Queen (1998) 193 CLR 173
Ridgeway v The Queen (1995) 184 CLR 19
Sybron Corporation v Barclays Bank Plc [1985] Ch 299
Sydney Harbour Trust Commissioners v Ryan (1911) 13 CLR 358
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1 PULLIN J: This is an application for discovery made by Temwood Holdings Pty Ltd ("Temwood"), the first respondent in these proceedings, against the Commonwealth.
2 In the proceedings in which this application is brought, the Commonwealth, by originating motion, seeks:
"1. A declaration that documents which were both:
• provided to the Commonwealth by Mr Neil Oliver under cover of letters from Mr Oliver to 'The Executive Member, Foreign Investment Review Board' dated 22 March 2000, 10 May 2000, 22 September 2000 and 8 November 2000, and
• obtained by Mr Oliver in the course of proceedings between Temwood Holdings Pty Ltd, ASEAN Australian Assets Pty Ltd, and Mr Oliver, being Supreme Court of Western Australia action CIV 2008 of 1997 and other consolidated actions
('the Relevant Documents') may be used by the Commonwealth for the purposes of:
(a) investigating alleged breaches of the Foreign Acquisitions and Takeovers Act (Cth) 1975, or
(b) discharging powers obligations and discretions conferred upon the Commonwealth (including the Treasurer and the Commonwealth's other representatives) under the provisions of that Act
('the Potential Uses').
2. Alternatively, a declaration that the Commonwealth is released from any implied undertaking or restraint for the purposes of the Potential Uses of the Relevant Documents."
3 The Commonwealth has brought the application because it has been given copies of documents by Mr Oliver, the third respondent. The documents, or some of them, are said to be documents which were discovered by Temwood in action CIV 2008 of 1997 (which has been consolidated with CIV 2173 of 1997 and CIV 2244 of 1997) between
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- Temwood Holdings Pty Ltd and Mr Oliver and ASEAN Australian Assets Pty Ltd and another ("the main action").
4 Steytler J in the main action, in a decision reported as Temwood Holdings Pty Ltd v Oliver & Ors [1999] WASC 212, at pars [1] to [10], gives an account of what the main action is about, which account I adopt for present purposes. In short, the third respondent, Mr Oliver, was a director of Temwood when a notice was given under s 26A of the Foreign Acquisitions and Takeovers Act (Cth) 1975 ("FATA") of Temwood's intention to acquire a property at Singleton Beach in Western Australia. Mr Oliver's company, ASEAN (the second respondent) was a consultant to Temwood. Temwood alleges Mr Oliver breached fiduciary duties in procuring the appointment of ASEAN, and ASEAN is claiming fees from Temwood.
The facts in this case
5 Mr Brosnan, the manager of a compliance unit within the Foreign Investment Policy Division of the Treasury of the Commonwealth of Australia has sworn an affidavit explaining that it was in September 1991 when Temwood gave notice under s 26A of the FATA. Section 26A requires a corporation in which a natural person not ordinarily resident in Australia holds a substantial interest, to notify the Treasurer of its intention to acquire an interest in Australian urban land. Upon notification, the Treasurer is entitled to make an order pursuant to s 21A(2) of the FATA, prohibiting Temwood's proposed acquisition or, alternatively, pursuant to s 25(1A) of the FATA, to decide that the Commonwealth had no objection to the proposed acquisition, provided Temwood complied with certain conditions.
6 In October 1991, Temwood was advised, pursuant to s 25(1A) of the FATA, that the Commonwealth had no objection to Temwood's acquisition, subject to Temwood's compliance with certain conditions.
7 Since then, Mr Oliver and Temwood have engaged themselves in the bitterly-fought main action.
8 In the first quarter of 2000, Mr Oliver communicated with the Foreign Investment Review Board ("FIRB"), alleging that Temwood had not complied with the development conditions specified under s 25(1A) and that some of the information provided by Temwood, when Temwood sought permission for its purchase of the property, was incorrect and that
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- Temwood's directors or staff provided that information knowing that it was false.
9 The affidavit of Mr Brosnan reveals the correspondence and communications from Mr Oliver. The following selection from certain of the correspondence gives an indication of some of the material revealed to the FIRB and other departments.
10 The first of these letters was dated 22 March 2000, and in it Mr Oliver enclosed copies of contracts of sale for "broad acre" undeveloped urban land. The letter refers to a telephone conversation which had taken place with Mr Brosnan before the letter was sent.
11 On 24 March 2000, Mr Brosnan wrote to the general manager of Temwood, stating that "through our compliance activities" he was aware that a portion of the lot was being sold as a super lot and undeveloped. He stated that the project was not completed as originally planned. The letter continued by stating that the government was extremely concerned that the development commitment the company undertook as a condition of approval had only been partially fulfilled. The letter stated that he should be aware that on-selling certain portions of the land without development was viewed as a serious breach of the FATA and under s 25(1C) substantial penalties could be incurred. The letter sought an explanation.
12 Solicitors for Temwood responded by letter dated 31 March 2000, denying the allegations.
13 Mr Oliver then wrote a further letter, dated 1 May 2000, to Mr Brosnan referring to the litigation on foot between Temwood and Mr Oliver, and in the letter said:
"The current local director is a Singaporean who at a recent hearing in chambers submitted a perjured affidavit. The submission to a Master of the Supreme Court by Temwood's Counsel on that day, like the application to FIRB was false and required an apology to the court.
The original application to FIRB was also false as the shareholders did not have AUD $7M as stated but subsequent [sic] required my company to arrange an AUD $5.5M overdraft with the Bank of Western Australia.
Ling Tung Leh was the only shareholder and did not have the funds to develop the property as stated in the application. The
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- property was then listed for sale with Jones Long Wootten of Kuala Lumpur during the option period.
This listing action was in direct conflict with the yet to be approved false FIRB application submitted in order to comply with the [FATA]."
14 The letter continued:
"We are not aware how FIRB is capable of monitoring development of their approvals but our litigation and the various discovered documents that are privileged will be tabled during the trial.
Statements of defence to the respective actions are to be filed on or before the 5 May 2000 with the Supreme Court of Western Australia. Obviously many of the documents that will be filed with the statements will cease to be privileged and provide adequate evidence of Temwood's non compliance with your FIRB approval."
15 On 10 May 2000, Mr Oliver wrote:
"We have reviewed our correspondence of 22 March 2000 and 1 May 2000 regarding the application to FIRB under the Foreign Acquisition and Takeover Act by the above company.
In our review we have noted that the most significant not privileged document that was disclosed in an affidavit by Chin Hoy Charn was excluded. The later affidavit was contrary to the earlier false affidavit as to the future intentions of Temwood Holdings Pty Ltd.
We enclose a copy of the new document which is an updated valuation by Christie Whyte Moore which also states the corporate intentions of Temwood on page 3 and is highlighted.
Obviously Temwood Holdings as 'a passive land developer and that the arrangement for a third party to progressively acquire the englobo land and develop the land' is a direct and continuing breech [sic] of the Foreign Acquisitions & Takeover Act.
We trust this information is of assistance with the current serious difficulties experienced by FIRB with the enforcement of the legislation and its approvals."
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16 By letter dated 22 September 2000, Mr Oliver wrote to Mr Peter Biggs, who was the general manager of the Foreign Investment Policy Division, referring to a meeting which they had had in Canberra on 29 August 2000. The letter notes that the meeting was held with Mr Brosnan in attendance. Mr Oliver urged action by FIRB and said that there was evidence which the government had the right to demand under s 36 of the FATA "when its attention has been drawn to a prima facie case of gross violation". The letter referred to a communication from Temwood's chartered accountants for Temwood's principals, which referred to the FIRB's concern about developers doing small improvements to land and then selling it in a rising market for large gains. Mr Oliver continued in that letter:
"As we now know, from a large bundle of documents sighted through the 'discovery' process, relating to my legal action against Temwood, this is precisely what the foreign directors of Temwood planned, conspired to execute and, in fact in relation to all the major parts of the property, have succeeded in doing.
The evidence that the FIRB application was part of a fraudulent conspiracy is fairly clear from the documents that I know exist through 'discovery'. While the 'privileged' status of some of these documents restricts references to them, I can say that a document exists, dated 13 March, 1992, from Mr Lim Yee Ching to Temwood's supposed key financial backer, Mr Ling Tung Leh, of Kota Kinabalu, in Sabah, Malaysia … which refers to Oliver as being uneasy with the growing dishonesty of Temwood's position and goes on to set out the details of Temwood's plan to push their speculative objectives."
17 The letter concluded by stating that there was attached to it "a necessarily selective choice of documents" and stated that further documentation could be provided on request. Over a hundred pages of documents were enclosed, including an affidavit sworn by the executive director of Temwood in the main action. Other documents included an affidavit sworn by Mr Oliver in the proceedings and correspondence sent by the solicitors for Temwood to Durack & Zilko, who appear to have been acting for ASEAN Australian Assets Pty Ltd, and perhaps Mr Oliver.
18 A letter dated 8 November 2000 from Mr Oliver to Mr Biggs at the Foreign Investment Policy Division stated, in part:
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- "On or about July 1999 an application for discovery was granted by the Trial Judge and we examined some 30,000 documents of Temwood's, many of which are in duplicate or triplicate. Many documents originated from us and are therefore not privileged.
On a selective basis, some 100 unknown documents were photocopied and duplicates provided to us by Temwood's solicitors. The majority of the documents that you require are in this category. I am advised that I can provide some form of identification or, alternatively within the provisions of the Act, you can demand my disclosure of these documents to you."
19 Later, in January 2001, Mr Brosnan received legal advice from the Australian Government Solicitor, and he says that he then became aware that the Commonwealth "may have been subject to an implied undertaking not to use the Temwood/Oliver/AAA documents for an improper, collateral or ulterior purpose since the time when the Commonwealth became aware those documents were obtained by Mr Oliver in the Temwood/Oliver/AAA proceedings. I am not a lawyer. As a lay person, I was unaware that the Temwood/Oliver/AAA documents could be subject to an implied undertaking or that such an implied undertaking could limit the Commonwealth's use of the Temwood/Oliver/AAA documents".
20 Mr Brosnan says that he and other treasury officers had perused and considered the documents received from Mr Oliver. He says that, as far as he knows, the Temwood/Oliver/AAA documents had not been put to any other use.
21 The affidavit concludes by stating that the Commonwealth wishes to ensure that it may freely use all of the documents provided to it by Mr Oliver, and the information contained in those documents, for the purposes of investigating alleged breaches of the FATA or discharging powers, obligations and discretions conferred upon the Commonwealth under the provisions of that Act without contravening any implied undertaking not to use those documents.
22 As I have already noted above, the allegations raised by Mr Oliver are that Temwood gave false information to the Treasurer in 1991 and that since then, conditions imposed in relation to the permission granted have been breached. If those allegations are correct, then it raises the possibility of:
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- (a) The Treasurer forming an opinion that he had reason to believe that persons associated with Temwood are capable of giving information or producing documents relevant to the exercise by the Treasurer of his powers under the Act, following which he may, by notice in writing, require persons to furnish information or to produce documents.
(b) The Treasurer making an application to the court for enforcement orders under s 35.
(c) The Treasurer making a revocation order under s 23.
(d) The Treasurer referring papers to prosecuting authorities for prosecution of offences under s 25, s 31 or s 36A of the FATA.
23 The Commonwealth in the originating motion, in effect, seeks:
(a) A declaration that the usual restriction against the collateral use of affidavits or documents discovered in proceedings does not apply to the Commonwealth in the present circumstances or, alternatively
(b) if the usual restriction does apply, then the Commonwealth seeks leave to use the documents for the purposes of
(i) investigating alleged breaches of the FATA; and
(ii) discharging powers, obligations and discretions conferred upon the Commonwealth (including the Treasurer and the Commonwealth's other representatives) under the provisions of the FATA.
24 The originating motion has been programmed for a hearing, but the first respondent seeks an order for discovery before the hearing.
25 The issues raised in the hearing on the summons for discovery were:
(a) an issue raised by the Commonwealth as a result of its submission that the Court has no power to order discovery in proceedings of this kind;
(b) alternatively to (a), an issue raised by the Commonwealth which submits that if the Court has power to order discovery, then discovery should not be ordered because the Commonwealth is not making any collateral use of the documents it received, as a result of which discovery is unnecessary;
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- (c) alternatively to (a) and (b), an issue raised by the Commonwealth which submits that the Court should exercise its discretion against ordering discovery in this case.
Does the Court have power to order discovery in these proceedings?
26 In my opinion, discovery can be ordered in proceedings commenced by originating summons.
27 Order 26 r 6(1) states that the court may make an order for discovery in a "cause or matter". Section 4 of the Supreme Court Act1935 defines "cause" to include "any action, suit or other original proceedings between a plaintiff and defendant … ", and a "matter" is defined to include "every proceeding in the court not in a cause". The proceedings by way of originating motion satisfy the description of a "cause". The court has power to order discovery in proceedings commenced by originating summons or motion. See Bell Resources Ltd v Turnbridge Pty Ltd, unreported; SCt of WA (Master White); Library No 7180.2; 30 June 1988. Australian Securities & Investments Commission v Knightsbridge Managed Funds Ltd & Anor [2001] WASC 177 at [14] - [19] and Re Borthwick [1948] Ch 645.
Is the Commonwealth bound by the usual restriction on the collateral use of documents obtained compulsorily in legal proceedings?
28 Subject to the qualifications set out in the next paragraph, a party to court proceedings who receives information from documents discovered by his or her opponent pursuant to the court's compulsory process, is subject to an implied undertaking not to use or disclose the documents or information except for the purpose of those proceedings. The undertaking is often described as one not to use discovered documents or information for any "collateral or ulterior" purpose. Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476 at 484. The undertaking applies not just to discovery, but to information disclosed in an affidavit sworn as a result of the court's compulsory process. Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764. The undertaking extends to any party into whose hands the documents come, unless it be directly connected with the action in which they are disclosed. Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613 at 621.
29 The undertaking does not apply when the person from whom the information was obtained consents to the use or disclosure. The
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- undertaking ceases upon the information being admitted into evidence in open court, and the Court may grant leave for the proposed use or disclosure. As a general rule, leave will not be granted if the use to which the documents are to be put is in the furtherance of a private interest. However, if public interest factors which lie behind the implied undertaking not to use or disclose the information except for the purpose of proceedings, is counterbalanced by a public interest in disclosure, then the Court will weigh up those competing public interests when considering whether to grant leave for the proposed use or disclosure.
30 None of the foregoing was in dispute between the parties; however, the Commonwealth submits that, when the executive government is using the documents to investigate alleged breaches of the law, it is not subject to the undertaking because such use is not a "collateral or ulterior" purpose.
31 When these submissions were made to me by the Commonwealth, I suggested that, this being the effect of the first declaration sought by the Commonwealth in the originating motion, this point should be finally determined on the hearing of the originating motion. The Commonwealth's contention is that, if it succeeds in obtaining the first declaration, then that would be the end of the case and there would be no need for discovery to be ordered. Counsel for Temwood, however, disagreed that the matter could be finally determined. He submitted that, even in relation to the claim for the first declaration, the plaintiff sought discovery.
32 The result is that, in this interlocutory application, it is necessary for me to express my opinion on the subject .
33 The Commonwealth argues that the implied undertaking does not apply to it when it wishes to consider what action is to be taken to vindicate the public interest in the enforcement of the law. It refers to the fact that it is the function of the executive government to investigate and prosecute crime. See Jacobsen v Rogers (1995) 182 CLR 572 at 587. It submits that if the Commonwealth comes into possession of documents or evidence which suggests that a law of the Commonwealth may have been infringed, then it is for the Commonwealth to decide what, if any, action should be taken to vindicate the public interest in the enforcement of the law. The Commonwealth submits that this is so, even if the documents or evidence have been delivered to the Commonwealth by third persons in breach of the implied undertaking that binds persons who receive documents or information from their opponent as a result of compulsory
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- process in litigation. The Commonwealth submits that if there is an issue about whether or not the documents or evidence may be used as evidence in subsequent court proceedings, then that issue should be addressed in the future court proceedings themselves. See, for example, Bunning v Cross (1978) 141 CLR 54.
34 The Commonwealth also referred to Crane v Gething (2000) 97 FCR 9, where French J declined declaratory relief because the claim for relief was made after an investigation had commenced in relation to possible criminal offences, and after a search warrant had issued in connection with the investigation. French J said, at page 23, that the claim "involves an unproductive interference with the normal processes of investigation and prosecution of criminal offences."
35 In my opinion, none of the above cases support the Commonwealth's submission that the Court should not keep control of, and monitor, what use is to be made of documents which have been produced under compulsory processes of the court. The Commonwealth submits that Riddick v Thames Board Mills Ltd [1977] QB 881 at 896 and Rank Film Ltd v Video Information Centre [1982] AC 380 at 442 provide support for its submission that the undertaking does not apply to it in the present circumstances.
36 Riddick's case was a decision of the Court deciding that a libel action should fail because the evidence to support it had been disclosed in earlier proceedings under compulsory process. There is nothing in the case which suggests that the Court in the earlier proceedings would not have had the authority to control the use to which the evidence disclosed in those proceedings could be put. Indeed, the point was that the plaintiff in the libel action had never sought leave of the Court in the earlier proceedings for permission to use the evidence.
37 The Rank Film case concerned a question about whether or not, in Anton Piller proceedings, the defendants should be ordered to supply information and produce documents when that process would tend to expose the respondents to a charge of conspiracy to defraud, and when the defendants had claimed privilege on the grounds that compliance with the order may incriminate the defendants. The House of Lords held that the claim of privilege against self-incrimination meant that the order for discovery should not be made. The plaintiff attempted to resist that conclusion by arguing that the defendants would not be prejudiced and the privilege against self-incrimination would not be breached, because the information disclosed could not be used for any "ulterior or alien
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- purpose", to use the words of Lord Denning in Riddick's case. Lord Wilberforce said in the Rank Film case at 442, "But it has never been held that these expressions, however wide, extend to criminal proceedings: if they did there would be no need for the privilege".
38 This statement is, however, explained by Lee J in Bailey v Australian Broadcasting Corporation (supra) at 485, where he said:
"His Lordship's observation certainly has much force: if a party to an action is unable to disclose documents revealing the commission of a criminal offence to the appropriate authorities then the privilege against self-incrimination would serve no purpose in civil discovery. But in stating this general proposition one must not overlook the fact that the undertaking has always been subject to the Court's discretion to grant leave to use discovered documents for a particular purpose in an appropriate case: Crest Holmes Plc v Marks [1987] AC 829. This includes, when necessary, the power to grant leave for the document to be used by a third party: Bibby Bulk Carriers at 163 per Hirst J."
39 Lee J then quoted what was said by Lord Fraser of Tullybelton in the Rank Film case at 447, when his Lordship said:
"The principle is, I think, that information is not to be used by the party who gets discovery for purposes other than that for which production was ordered. But the case of Riddick had nothing to do with the use of information for prosecution in the public interest. On the contrary, both Lord Denning MR at p 896 and Stephenson LJ at p 901, referred with approval to the observations of Talbot J in Distillers Co (Biochemicals) Ltd v Times Newspapers [1975] QB 613, 621, recognising that there might be a public interest in favour of disclosure which would override the public interest in the administration of justice which goes to preserve the confidentiality of documents disclosed on discovery. That is clearly correct. If a defendant's answers to interrogatories tend to show that he has been guilty of a serious offence I cannot think that there would be anything improper in his opponent reporting the matter to the criminal authorities with a view to prosecution, certainly if he had first obtained leave from the court which ordered the interrogatories, and probably without such leave."
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40 Lee J then asked, rhetorically, whether it followed that a party who through discovery has come into possession of documents which disclose the commission of a criminal offence may, as of right, disclose them to the criminal authorities. He concluded that it did not. I agree with Lee J's conclusion. With respect, I disagree with Lord Fraser's obiter suggestion that leave might not be necessary.
41 My conclusion is that the Commonwealth is bound, like any other third party, not to use information which is gained by one party from the other via the court proceedings under the court's compulsory processes for any purpose other than use in those proceedings. To seek to use the documents in deciding whether or not to prosecute, or whether or not to take enforcement action, is a "collateral or ulterior" use which requires the leave of the court.
42 The Commonwealth has also submitted that Temwood, being a corporation, would not be entitled to assert any claim of privilege against self-incrimination. Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477. That case will be relevant when the Court hears the originating motion, but it does not appear to assist me in relation to this application for discovery.
43 For my part, I cannot see anything in the authorities which suggests that, in present circumstances, the Court loses its authority to supervise the use which might be made of documents produced by compulsory process in legal proceedings. I do not accept the Commonwealth's argument that discovery cannot be ordered against it on the ground that the use to which it wishes to put the documents is not a "collateral or ulterior" use.
Should discovery be ordered against the Commonwealth in this case?
44 When an application is made to the court for leave to use documents for some purpose outside the proceedings in which they were disclosed, the application should be made before any use is made of the documents. The party seeking leave would be required to identify, with precision, the documents it wishes to use. In most cases, there would be no need for discovery to be ordered because the documents to be disclosed will be on the court record or referred to in documents in the court record.
45 In Re Borthwick (supra) at 649, Lord Greene MR said:
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- "In the procedure by originating summons where the issues are not defined in the way in which they are defined in pleadings, where there are in general affidavits in which the relevant evidence appears, affidavits which can, if necessary, be cross-examined to, there is really no room for the application of the ordinary rather strict rules relating to discovery which takes place in ordinary actions conducted with pleadings. … discovery in proceedings … by originating summons ought only to be ordered in very special cases where the facts are such as to justify such an order being made."
46 The difficulty in this case is that the application for leave is being made after the event. It is not clear which documents given to the Commonwealth officers by Mr Oliver are subject to the implied undertaking and which are not. Counsel for Mr Oliver denied that he had breached his implied undertaking at all. The Commonwealth must consider that there has been, or may have been, a disclosure of some documents subject to the undertaking or else it would not have commenced these proceedings.
47 In some cases, the documents supplied may have been documents which Mr Oliver had in his possession and which were not obtained by the court's compulsory processes from Temwood. Mr Oliver was free to give those documents to the Commonwealth officers. Other documents may be documents discovered by Mr Oliver or his company and therefore not subject to the undertaking by Mr Oliver. On the other hand, there are indications that at least the contents of documents discovered by Temwood have been disclosed to the Commonwealth. See the letter of 22 September 2000 quoted above. Whether this is so is still to be finally decided. Added to this, is the fact that Mr Oliver has met with Commonwealth officers and had discussions with them disclosing information, some of which may be information from documents disclosed by Temwood under compulsion in the main action.
48 I agree with Lee J when he says in Bailey v Australian Broadcasting Corporation at 486 that all of the circumstances must be looked at in order to determine the nature and extent of the public interest which would support the grant of leave which the Commonwealth seeks. The first step in that process is to establish exactly what documents are under consideration in the application for leave. On the materials presently before the Court, it would be difficult for the Court to exercise its supervisory role in relation to the use of documents disclosed, because it is not clear to the Court, and perhaps it is not even clear to the
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- Commonwealth, which documents, if any, have been disclosed by Mr Oliver in breach of his undertaking.
49 The Commonwealth would not normally have to disclose evidence that it is gathering for law enforcement purposes, but the difficulty in this case is that the Commonwealth officers involved did not invite Mr Oliver to seek the leave of the Court to disclose the documents the subject of the undertaking before they received information from him. The Commonwealth was clearly on notice that some information may have been subject to the undertaking, but they continued to meet with Mr Oliver and to receive information from him in that knowledge. The officers involved were not aware of the law, but the collection of information and documents has, prima facie, resulted in a mixing of some material which may be the subject of the undertaking and some which is not.
50 In my opinion, the unusual circumstances make this a special case, requiring the Commonwealth to give discovery of the documents given to its officers by Mr Oliver and to give discovery of documents created by those officers recording information given to them by Mr Oliver. Once all of the relevant documents have been identified, it will then be possible for Temwood to identify which of the documents it alleges are documents disclosed by it under compulsory processes of the court in the main action.
51 I will therefore order that the Commonwealth make and serve on the respondents, a list of documents which are, or have been, in its possession, custody or power relating to the documents or information disclosed to the Commonwealth or its officers by Mr Oliver, and to file an affidavit sworn by the proper officer verifying the list and serve a copy on the respondents.
52 I will hear the parties concerning the time for compliance and concerning the identity of the officer who should swear the affidavit.
53 I anticipate that directions will be necessary to require Temwood to identify which of the documents discovered by the Commonwealth it alleges are copies of documents Temwood disclosed under compulsion in the main action (or which record information that came from such documents). It may be appropriate to consider whether or not Mr Oliver should be directed to specify whether he agrees or disagrees with Temwood's allegations. I will hear the parties concerning the directions which should be given.
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