Total Trading SRL v Nastri & Anor
[2007] VSCA 244
•25 October 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 5110 of 2007
| TOTAL TRADING SRL | |
| Applicant | |
| v | |
| LUIGI NASTRI and ANOR | Respondents |
| LUIGI NASTRI and ANOR | Applicants |
| v | |
| TOTAL TRADING SRL | Respondent |
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APPLICATIONS ON SUMMONS
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JUDGES: | CHERNOV and REDLICH JJA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 25 October 2007 |
DATE OF JUDGMENT: | 25 October 2007 |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 244 |
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PRACTICE & PROCEDURE – Application for leave to appeal against dismissal of originating motion seeking orders that certain documents be treated as confidential and restrained from use in related proceedings – Whether leave required – Whether ‘interlocutory application’ – Whether ‘case of granting or refusing an injunction’ – Supreme Court Act 1986 s 17A (4)(b), s17A(4)(b)(ii).
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant Total Trading SRL | Mr I G Waller | Clayton Utz |
| For the Respondents Nastri | Mr P G Cawthorn | John R Morrow |
CHERNOV JA
REDLICH JA:
The Court has before it two summonses. By the first summons, filed on 14 September 2007, Total Trading SRL, formerly known as Triulzi Engineering SRL, (‘Total’) which is misdescribed in the summons as the appellant, seeks, in so far as may be necessary, leave to appeal from the decision of a judge of the Supreme Court made on 31 August 2007 dismissing Total's originating motion of 14 March 2007, whereby it sought orders against the respondents, Luigi Nastri (‘Nastri’) and Nastri Nominees Pty Ltd (‘the Nastri company’) in respect of certain documents.
By the second summons, filed on 3 October 2007, Nastri and the Nastri company, who are misdescribed in the summons as the respondents, seek orders that Total's appeal filed on 7 September 2007 against his Honour's decision be dismissed as incompetent under r 64.03(4) of the Supreme Court Rules and that Total provide security for their costs of the appeal and pay the costs below into court pending the hearing and determination of the appeal.
It is necessary to refer briefly to the relevant background circumstances. Total is a company that is incorporated in Italy and at all material times has been controlled by one Giovanni Jemma (‘Jemma’). Nastri is a director and controller of the Nastri company. He and Jemma were childhood friends from Italy, and although Nastri has lived in Australia for about 40 years, Jemma remained in Italy; he does not speak English. In 2002, Total instituted proceedings (‘the Alessi proceedings’) in which it sought the return of manufacturing equipment from 15 defendants. It also claimed damages. On 7 May 2003 Total obtained summary judgment for possession of the equipment but its claim for damages remains outstanding. As his Honour observed, this proceeding appears moribund, having been adjourned sine die by consent of the parties in 2005.
It is apparent from his Honour's reasons that Nastri provided considerable assistance to Jemma in the Alessi litigation. In the course of it, Nastri came into possession of a number of Total's documents, including reports written in English from Total’s solicitors that had been sent to Jemma. It seems that in order to reward Nastri for assisting him in the Alessi proceeding, Jemma caused Global Bins Australia Pty Ltd (‘Global Bins’), a company which he controlled, to allocate to Nastri 20 per cent of its capital. Nastri took an active part in the operation of that company until about March 2004, when he fell out with its then new managing director and Jemma. In about June 2004 a restructure of the shareholding in Global Bins was implemented by or at the behest of Jemma such as to reduce Nastri's shareholding in it from 20 per cent to under one per cent. In the result, in 2005, the Nastri interests brought proceedings against Global Bins and others alleging oppression and other wrongs (‘the oppression proceeding’); and in an action instituted in 2004 Nastri claimed from Global Bins fees and expenses incurred by him while acting in a management capacity in relation to its business (‘the debt recovery proceeding’). It was in the course of the discovery process in the latter action that Total ascertained that the Nastri interests had documents (‘the disputed documents’) from the Alessi proceeding. It claimed that they belonged to it. In the result, Total filed the originating motion to which reference has been made, seeking recovery of the disputed documents and orders preventing their use by the Nastri interests in both proceedings.
His Honour was satisfied that the documents were supplied to the Nastri interests voluntarily by Total's solicitors who acted in that respect at the request of, or on behalf of, Jemma and Total. The judge considered that Total had failed to put forward a proper basis for its claim for the return of the documents. His Honour said that they were not obtained unlawfully or under compulsion or by mistake and were not delivered on the basis that they would be returned to the solicitors or Total or Jemma. Further, said his Honour, there was no evidence that Nastri had misused the documents in any way. In that context we note that his Honour recognised that Total has rejected an offer by Nastri, made prior to the hearing of the proceeding, to undertake to keep the documents confidential and use them solely for the purpose of the debt proceeding and the oppression proceeding. Total has also rejected, as his Honour noted, a series of other like offers and undertakings made during the course of the hearing of the originating motion.
The real issue between the parties, as his Honour explained, was what use, if any, Nastri should be permitted to make of the documents in the oppression proceeding. The judge noted that there was no dispute that the documentation is potentially relevant to the issues in the two proceedings. In the circumstances, his Honour concluded that, notwithstanding that the disputed documents were, at least in large part, subject to an equitable obligation of confidentiality, Total was not entitled to an order that the Nastri interests not use the documents for the purpose of the proceedings or that they return them to Total. The learned primary judge also concluded that there was real doubt that all the documentation in respect of which a claim was made for legal professional privilege was in fact subject to such privilege. His Honour said, understandably, that detailed consideration of this issue should be left until the relevance of the documentation is better ascertained and its significance better proven, presumably in the context of the two proceedings. His Honour also noted that an additional and compelling reason for refusing the application for an order to limit the use of the disputed documents in the oppression proceeding was the absence of all interested parties in the originating motion.
In the circumstances, the two summonses that are before us raise the following issues for determination: first, whether Total is entitled to appeal against the impugned decision as of right, or whether leave to appeal is required; secondly, if leave is required, has Total established that such leave should be granted?; thirdly, if leave to appeal is to be granted, should Total be ordered to provide security for the respondents' costs of the appeal?
We now turn to deal with each of these issues. The question whether leave is required potentially raises two matters for consideration. First, whether the proceeding below was a ‘case granting or refusing an injunction’ for the purposes of s 17A(4)(b)(ii) of the Supreme Court Act 1986. If so, it is plain that no leave is required. Secondly, if the ‘case’ was not concerned with the granting or the refusal of an injunction, is the decision one in an ‘interlocutory application’ for the purposes of s 17A(4)(b) of the Supreme Court Act?
In our view, on its proper characterisation, the originating motion was not a proceeding for injunctive relief as the term is used in a legal context. The mere fact that an order for the return of documents was sought did not convert the proceeding into one dealing with injunctive relief. It is plain enough that not all court orders are injunctions in the legal sense.[1] It seems to us that the originating motion was not concerned with injunctive relief as such but was concerned to prevent Nastri from using the disputed documents on the basis of claimed breach of confidentiality and/or the operation of the doctrine of legal professional privilege. In substance, it was no different from the situation in Rouse v IOOF Australia Trustees Ltd (No 2)[2], in which Lander J held that an application for delivery up of certain documents on the basis that they were confidential and privileged was not an application for an injunction. It is true that the application in that case was made in a proceeding, whereas here it was brought by way of a separate proceeding, the originating motion. Counsel for the applicant effectively hung his argument on this issue on this distinction. He effectively conceded that, if the applications were made in a principal proceeding, the case would not have involved an injunction application. But to rely on such a distinction is, in our view, to mistake form for substance. We consider that, as a matter of substance, the originating motion sought to regulate the use of the disputed documents in the principal proceedings. Counsel agreed, in the course of argument, that the applicant's right to the documents was enlivened by their threatened misuse by the Nastri interests. In the circumstances, on its proper characterisation, the originating motion could not be properly described as giving rise to a case for the ‘granting of an injunction’ within the meaning of s 17A(4)(b)(ii) of the Supreme Court Act.
[1]Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (4th ed), [21-005].
[2][1999] SASC 205.
We are also of the view that the decision is interlocutory and not final, for at least two reasons. First, we consider that, on its proper characterisation, the decision falls within the second category of interlocutory orders that were identified by Callaway JA in Dodoro v Knighting[3], namely, an order that does not finally determine the rights of the parties in the principal proceeding. The only legal effect of the decision was to determine a matter that related to, or was ‘ancillary’ to, the two proceedings in question. Section 17A(4)(b) of the Supreme Court Act relevantly speaks of ‘a judgment or order in an interlocutory application’, but, as was explained in Border Auto Wreckers (Wodonga) Pty Ltd v Strathdee[4], this is not a reference to the nature of the application but to the nature of the impugned judgment or order. Thus, subject to the statutory exceptions, leave to appeal is required if the decision is interlocutory. It follows that the question for present purposes is whether the decision or order in this case dismissing the originating motion is final or interlocutory. Obviously enough, the mere fact that the impugned order determines finally, subject to appeal, an application on an originating motion does not necessarily make it a final order. Windeyer J, in Hall v The Nominal Defendant[5] (‘Hall’), said:
It is never enough to ask simply: does the order finally determine the actual application or matter out of which it arises; because, subject to the possibility of an appeal, every order does that unless it be an order that is expressly declared to be subject to variation.
In order to be final in the relevant sense, the order must ‘finally determine the rights of the parties in a principal cause pending between them’.[6] Importantly, whether the decision so determines the rights of the parties is to be decided by the legal, not the practical, effect of the order.[7] And, as Marks J said in Herald & Weekly Times Ltd v Guide Dog Owners and Friends Association[8], a final order must be distinguished from a binding order, which has the appearance of being final because it has the practical effect.
[3](2004) 10 VR 277.
[4][1997] 2 VR 49 (Brooking JA with whom Winneke P and Tadgell JA agreed).
[5](1966) 117 CLR 423, 443.
[6]Ibid.
[7]See, for example, Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, 248 (Gibbs CJ); Little v State of Victoria [1998] 4 VR 596, 598 (Callaway JA).
[8][1990] VR 451, 461.
The order here was made on the originating motion which is inextricably tied to the substantive proceedings. It was the process by which Total sought to prevent the Nastri parties from using the disputed documents in the proceedings. Thus, as a matter of substance, the originating motion was concerned with a procedural aspect of those actions, namely, the use of the disputed documents in relation to them.[9] Importantly, as we have said, the only relevant legal consequence of the order was that the Nastri interests were not denied the right to use them in the proceedings. Clearly enough, that position may change when the proceedings are heard, and, since the originating motion did not deal with the rights of the parties in the two proceedings, it is unsurprising that the order did not determine them finally.
[9]Given our conclusion, it is not necessary to determine conclusively whether the originating motion amounts to an abuse of process.
Relevantly, the situation here is not unlike that in Hall, where the impugned order dismissed an application for extension of time within which the applicant could sue the nominal defendant. It was pointed out by Taylor J in that case that the impugned order was made in the proceeding that was preliminary to the proposed principal cause between them and did not determine any rights in that cause.[10] In the circumstances it was decided, as we have noted, that the decision was interlocutory. And in Hornsby v Kaschke[11] the order of the Supreme Court that quashed the decision of the Magistrates' Court in relation to pre-trial disclosure was held to be interlocutory because it was ancillary to the Magistrates' Court proceedings. The order on the originating motion is, in essence, ancillary to the principal proceedings and therefore, as we have said, interlocutory.
[10](1966) 117 CLR 423, 440.
[11][1999] 3 VR 27.
The second basis for this conclusion is that, once it is accepted, as it was for the applicant, that the claim for possession of the documents rests on threatened breach of their proper use, the order must be interlocutory because the right to prevent such use rests on the determination of this question in the principal proceeding.
In the circumstances, therefore, we think that it is plain enough that the impugned decision is interlocutory. Thus leave is required before an appeal against it can be instituted.[12]
[12]Little v State of Victoria [1998] 4 VR 596, 602 (Callaway JA).
Should leave be granted
We now turn to consider whether Total should be granted leave to appeal. We mention for completeness that, as Brooking JA, with whom Charles JA agreed, said in X v Director of Public Prosecutions[13], in general, applications for leave to appeal are disposed of in Victoria without giving detailed reasons. In order to obtain leave, Total must establish that the impugned order is attended with such doubt as to warrant its reconsideration on appeal (in other words, whether the proposed appeal has sufficient prospects of success)[14] and that substantial injustice would result if the decision were to stand.[15]
[13][1995] 2 VR 622, 623. See also Dodoro v Knighting (2004) 10 VR 277, 279 (Winneke P), 284 (Callaway JA).
[14]King v Lintrose Nominees Pty Ltd (2001) 4 VR 619, 629 (Callaway JA).
[15]See, for example, Niemann v Electronic Industries Ltd [1978] VR 431, 438 (Murphy J); BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756, 758, 764; Secretary to the Department of Premier & Cabinet v Hulls [1999] 3 VR 331, 336 (Phillips JA).
Taking the latter requirement first, we note that Phillips JA in Secretary to the Department of Premier & Cabinet v Hulls[16] said that the injustice attending an impugned order continuing to stand is probably more readily discernible if it is final rather than interlocutory. It seems to us that, here, no substantial injustice would arise if the impugned order were to remain. The question whether any particular document may or may not be tendered in evidence would be decided in the course of the principal proceedings, so that it is difficult to see what real prejudice would flow to Total if the impugned order were to remain. Although there is some force in Mr Waller's claim that mere wrongful denial to the true owner of documents held and/or used in breach of confidence amounts to a substantial injustice, in the context of this case, where their use will be determined in the principal proceedings, and where the undertakings were given as has already been mentioned, the mere holding of such documents by Nastri seems to us not to amount to substantial injustice. Be that as it may, we think that in any event the decision, as distinct from the reasoning behind it, is not attended with sufficient doubt such as to warrant its reconsideration on appeal. We consider that no relevant error has been established in his Honour's conclusion that in the circumstances as found by him, Total was not entitled to possession of the disputed documents, nor at this stage to an order that the Nastri interests are not entitled to use the documents. In essence, the judge found that the Nastri interests were rightfully in possession of the disputed documents, as has been outlined earlier, and the basis for this, as set out in paragraphs 29, 32-40 of his Honour's reasons, was not shown to be wrong. It must be remembered, as counsel for the respondent pointed out, that his Honour read the documents and was seized of the circumstances in which they were provided to Nastri. As the judge noted, the questions of confidentiality and privilege that were raised before him related to the two proceedings, so that Total will have the opportunity to deal with those issues later should they arise and should it wish to pursue them.
[16][1999] 3 VR 331, 336-7.
We note that nearly all the proposed grounds of appeal seek to challenge his Honour's findings of fact. It is plain enough that an appellate court is reluctant to interfere with such findings unless the findings were not reasonably open to the judge. We consider that no such apparent error was made by his Honour. The errors of law for which Total contends in paragraphs 5 and 11 of the filed notice of appeal are essentially challenges to his Honour's conclusions dressed up as questions of law. Moreover, no basis has been established that put those conclusions into relevant doubt.
In the circumstances, we would not grant leave to appeal. It follows that, in our view, the appeal is incompetent and it should be struck out and that in the circumstances the question whether security for the respondent's costs of the appeal should be ordered does not arise. Thus, the Court proposes to order that the applicant's summons for leave to appeal be dismissed, its appeal be dismissed as incompetent and that, subject to hearing the parties, the applicant pay the respondents' costs.
The Court will order:
1.The applicant’s summons dated 14 September 2007 is dismissed.
2.The applicant's appeal be dismissed as incompetent.
3.The applicant pay the respondents’ costs of the proceeding before us.
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