Trade Practices Commission v Allied Mills Industries Pty Ltd

[1980] FCA 151

TRADE PRACTICES COMMISSION v. ALLIED MILLS INDUSTRIES PTY. LTD. (No. 2)
55 FLR 108
Practice

COURT

FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Sheppard J.(1)

CATCHWORDS

Practice - Application for leave to bring cross-claim out of time - Action for pecuniary penalties and injunctions - Documents discovered by applicant - Cross-claim by respondent to retain use of and for recovery of documents - Jurisdiction - Discretion - Judiciary Act 1903 (Cth), s. 78B - Federal Court of Australia Act 1976 (Cth), s. 32 - Administrative Decisions (Judicial Review) Act 1977 (Cth), s. 3 - Federal Court Rules, O. 5, rr. 5, 9.

HEADNOTE

The first respondent to proceedings by the applicant Trade Practices Commission for pecuniary penalties and injunctive relief for alleged breaches of s. 45 of the Trade Practices Act 1974 sought leave to bring a cross-claim out of time for an order for the recovery of, and restraining the use of, documents discovered by the Commission and to be relied upon by it at the trial but which the first respondent alleged had been removed from its possession by a former employee. At the time of the application the first respondent had known of the documents' existence for some time; the principal proceedings had commenced and the former employee was about to be called to give evidence.

Held: (1) The matter which would exist if the cross-claim were brought would appear to be within the jurisdiction of the Federal Court pursuant to s. 32 (1) of the Federal Court of Australia Act 1976.

(2) In deciding what was the just thing to be done as between the immediate parties to the application the following matters were relevant: (a) No respondent opposed the application. (b) The application Commission might possibly lose evidence. Brambles Holdings Ltd. v. Trade Practices Commission (No. 2) (1980), 44 FLR 182, referred to. (c) An adjournment of the principal proceedings would be required to hear any application pursuant to the cross-claim. (d) The possible need of counsel for the Commission who had knowledge of the documents to withdraw from the case if the Commission were forbidden to use the documents.

(3) The first respondent should be allowed to put on the cross-claim but on terms as to costs.

HEARING

Sydney, 1980, October 27; November 10. #DATE 10:11:1980

APPLICATION.

The first respondent sought leave pursuant to O. 5, r. 5 and O. 5, r. 9 of the Federal Court Rules to file a cross-claim out of time.

The facts appear from the headnote and judgment.

K. R. Handley Q.C. and J. O. North, for the applicant.

R. V. Gyles Q. C. and W. W. Caldwell, for the first respondent.

Cur. adv. vult.

Solicitor for the applicant: B. J. O'Donovan, Commonwealth Crown Solicitor.

Solicitors for the first respondent: Sly & Russell.

T. J. GINNANE

JUDGE1

November 10.

SHEPPARD J. delivered the following judgment.

By its notice of motion of 24th October last the respondent, Allied Mills Industries Pty. Ltd. (hereinafter referred to as the company) seeks leave to file and serve a cross-claim in this matter. The application is supported by the affidavit of the company's solicitor, Mr. Huntington, also sworn 24th October last. The proceedings in which it is sought to file the cross-claim are proceedings brought by the Trade Practices Commission (the Commission) pursuant to ss. 77 and 80 of the Trade Practices Act 1974 (Cth). The Commission seeks to recover penalties for alleged breaches by the respondents, of whom the company is one, of s. 45 of the Trade Practices Act, which are said to have occurred in the latter months of 1976 and thereafter. The Commission also seeks injunctive relief. (at p109)

1. The proceedings were commenced by application filed on 1st August, 1979. Pursuant to O. 10 of the rules directions hearings have been held on frequent occasions since the commencement of the proceedings. Since the commencement of this year they have been held on: 14th March, 1980; 10th April, 1980; 11th April, 1980; 5th May, 1980; 6th June, 1980; 28th July, 1980; 10th September, 1980; 18th September, 1980; 19th September, 1980; 29th September, 1980; 3rd October, 1980. (at p109)

2. The hearing of the matter commenced on 20th October last. The hearing date had been fixed, at first tentatively, some months earlier. The hearing was to have commenced on 13th October, but on the application of the Commission its commencement was delayed for one week. The length of the hearing was estimated to be four to six weeks. In the way that the case has developed since the hearing began, I would think that the hearing will be considerably longer than six weeks. (at p109)

3. One of the witnesses to be called in the Commission's case is one Anthony Henry Matthews. He was formerly employed by the company in a senior executive position, being its Victorian manager. He has made a statement to the Commission and has provided it with a number of documents which the company claims to be its property, and to have been taken by Mr. Matthews without its authority and in breach of obligations he owed the company as its servant. It is likely that a number of these documents will be tendered by the Commission in the course of presenting its case, and that use may be made of others short of their being tendered. (at p109)

4. By the cross-claim which it seeks leave to file the company proposes to seek orders that the Commission be restrained from making use of or disclosing any information contained in the documents, and that the Commission deliver up to the company the said documents and all copies thereof. Consequential relief is also sought. (at p109)

5. The cross-respondent proposed to be joined in the cross-claim is the Commission. The application is not now one to join Matthews as well. Originally the primary application which was made was to join both Matthews and the Commission, but during the argument counsel for the company said that he had been instructed not to pursue an application for leave to file a cross-claim in which Matthews would be joined as a party. (at p110)

6. Leave to bring the cross-claim is required by reason of the operation of two rules. The first of these is O. 5, r. 5, which provides for leave where, as is here the case, it is sought to file a cross-claim out of time. The second rule is O. 5, r. 9, which provides that a cross-claim may not be filed without leave once there has been a directions hearing. If the application to join Matthews had been maintained, leave would also have been required pursuant to O. 5, r. 8 (1). That is because Matthews is not a party to the proceedings as they are presently constituted. (at p110)

7. There is, of course, an initial question of the jurisdiction of this Court to entertain the proceedings. Counsel for the company submitted that there is jurisdiction by reason of the operation of s. 32 of the Federal Court of Australia Act 1976 (Cth). Subsection (1) of that section provides: "To the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked." (at p110)

8. Counsel for the company may well be correct in his submission, but there is a question about it. The position is not straight forward as he himself conceded. Jurisdiction aside, there can be no doubt that, if there is to be a claim made for relief of the kind here sought, it is the most convenient course for that claim to be brought here. (at p110)

9. The questions of the validity and ambit of operation of s. 32 are undetermined, but it is likely that those questions will be resolved as a result of the judgments to be delivered by the High Court in Philip Morris Incorporated v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 55 ALJR 120 . The High Court heard argument in those matters on 14th and 15th October last and reserved its decision. (at p110)

10. An alternative basis for jurisdiction was said by counsel for the company to be the Administrative Decisions (Judicial Review) Act 1977 (Cth) which came into force on 1st October, 1980. After the principal argument on the motion had concluded, amendments were made to the form of the cross-claim which the company sought leave to file. These are designed to bring the case within the Act just mentioned. Counsel for the Commission submitted that for two reasons of substance and one of procedure the alternative basis for jurisdiction was without foundation. He submitted that the proposition that the decision of the Commission not to return the documents was, within the meaning of s. 3 of the Act, "a decision to which this Act applies", was plainly untenable. (at p111)

11. He also submitted that any such decision had been made not later than May 1980, many months before the Act came into force. In making that submission, he bore in mind a more recent demand for the return of the documents, but said that any rights which the Commission had to the return of the documents arose, by reason of the noncompliance in May 1980 with an earlier demand, in May rather than in November. For that reason also he submitted that the Act plainly had no application. (at p111)

12. The procedural ground upon which he relied was based upon the terms of O. 54 of the rules. In my opinion the terms of that order provide no reason why the alternative basis for jurisdiction should not be relied upon. If it were necessary, the provisions of O. 1 rr. 8 and 9, could be invoked to enable an appropriate procedure to be devised. I express no opinion on whether that course would be necessary or not. The matters of substance relied upon by the applicant are, however, in a different category. To them, and to s. 32 of the Federal Court of Australia Act, I shall return in due course. (at p111)

13. In considering the question of jurisdiction, I must bear in mind the terms of s. 78B of the Judiciary Act 1903 (Cth) which provides that where a cause pending in a Federal Court other than the High Court involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause until and unless the court is satisfied that the notice there provided for has been given. Counsel for the company claims jurisdiction for the reasons mentioned in his submission. Counsel for the Commission does not dispute it. But I am not saved, by the failure of either counsel to submit that there is no jurisdiction, from the problem of considering whether I am satisfied that I have it. It is a matter about which I must be satisfied. (at p111)

14. The documents which the applicant, by its proposed cross-claim, seeks to recover, were specified in the affidavit of discovery filed on behalf of the Commission. They are referred to in par. 7 of the schedule to Mr. Conlan's affidavit of discovery of 14th December, 1979; Mr. Conlan being a member of the staff of the Commission. Paragraph 5 of Mr. Huntington's affidavit establishes that the company was not aware that the documents referred to in par. 7 of the schedule to Mr. Conlan's affidavit had been furnished to the Commission by Mr. Matthews until it had received a copy of the affidavit of discovery. It was not aware of the nature and identity of the documents until they were inspected on 21st January, 1980. Mr. Huntington's affidavit also establishes that the documents were documents prepared for the purposes of the company's business, either by Matthews himself, or by other employees of the company, and contained information which was confidential to the company and its employees and which had been imparted to Matthews in confidence. It related to prices charged by the company, the manner in which such prices were arrived at, the manner in which the company dealt with certain of its customers, details of its starch division budgeting and other confidential affairs of the company's business. Mr. Huntington draws the conclusion - it is not disputed by the Commission - that the documents were received by the Commission from Matthews during the month of November 1976. On 24th March, 1980, Huntington wrote letters to Matthews and to the Crown Solicitor in his capacity as the solicitor on the record for the Commission. The letters specified the documents said to be the property of the company and demanded their immediate return. The documents so specified were all the documents listed in par. 7 of the schedule to Conlan's affidavit and some others. (at p112)

15. The company does not, as I understand the position, seek the delivery up of any documents other than the documents specified in par. 7 of the schedule to Conlan's affidavit. The letters were answered by a letter from the Crown Solicitor dated 30th April, 1980. The letter included the following paragraphs: "2. The Commission does not intend to voluntarily return the documents to your client regardless of whether the documents are or are not the property of your client and are or are not confidential, which allegations are not admitted. I am advised that a court is not likely to order their return. Moreover any order for return of the documents would be futile having regard to the Commission's powers to serve notices under ss. 155 and 156 of the Trade Practices Act before or after they are returned. 3. Moreover, many copies of these documents now exist which are clearly the Commission's property, and indeed copies have been furnished to yourselves and to the solicitors for all the other respondents pursuant to the order for discovery and inspection in this case." (at p112)

16. Paragraphs 10 and 11 of Mr. Huntington's affidavit are as follows: "10. On or about 2nd May, 1980, I sought the advice of counsel then briefed as to whether or not the first respondent should take action to retrieve the documents referred to in annexure B. Counsel orally advised that the first respondent should not take action to recover the said documents without giving any reasons that I can recall. 11. During the course of a conference with counsel on 19th October, 1980, the right of Mr. Matthews to furnish the applicant with documents and the right of Mr. Matthews and the applicant to use those documents referred to in par. 7 of the schedule to the affidavit of discovery in connexion with these proceedings arose and I sought advice theron, following which senior counsel forthwith contacted senior counsel for the applicant and alerted him to the question." (at p112)

17. After the letter dated 30th April, 1980, was written by the Crown Solicitor, nothing further about the matter was said by the company's counsel or solicitors until mention was made of the matter to senior counsel for the Commission on 19th October last. The application now made was foreshadowed to the court on the day the hearing commenced, 20th October, 1980. For the period of almost six months which elapsed between 2nd May, 1980, and the commencement of the hearing, the matter was in the list for directions on at least seven occasions. On one of those occasions, 10th September, 1980 (p. 322 of the transcript) counsel for the company sought leave to inspect one of the documents in question, a diary which had been kept by Mr. Matthews. The diary had already been inspected and copied by the company's legal advisers. But they wished the diary to be inspected by a handwriting expert. The Commission had no objection to that being done. Presumably the diary was inspected accordingly. (at p113)

18. In support of its application, senior counsel for the company relied upon the well-known principles stated by Bowen L.J. in Cropper v. Smith (1884) 26 ChD 700 . His Lordship said: "Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace" (1884) 26 ChD, at p 710 . (at p113)

19. His Lordship then referred to the relevant rule and continued: "It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right. It was said by Mr. Barber in his very powerful speech to us: 'You are taking away an advantage from the Plaintiffs who have got judgment below, by making an amendment at the last moment.' In one sense we should be taking away an advantage from them, but only an advantage which they have obtained by a mistake of the other side, contrary to the true bearing of the law on the rights of the parties" (1884) 26 ChD, at p711 . (at p113)

20. Those words have been echoed many times since they were spoken in 1884. The case was, however, concerned with a belated application to amend, not to prosecute a cross-claim. (at p113)

21. Counsel for the Commission referred to the decision of Kay J. (as he was) in Gray v. Webb (1882) 21 ChD 802 in which his Lordship decided that a defendant would not be permitted to bring a counterclaim which would unduly delay the trial of the principal action. That was a case, however, where the matters sought to be raised in the counterclaim did not have the direct bearing upon the proceedings brought by the plaintiff as would the cross-claim here sought to be brought have upon the principal proceedings in this case. (at p114)

22. In the end, I think it is a question of giving effect to what the demands of justice require. In other words, I must do my best to decide the application by reaching that conclusion which will be most just as between the company and the Commission. (at p114)

23. In opposition to the application, counsel for the Commission relied principally upon the impact which permitting the cross-claim to be brought at this stage would have upon the trial. He submitted that the probable result of allowing the application would be the adjournment of the proceedings for a substantial period. The Commission would not seek such an adjournment unless force of circumstances required it to do so, but an adjournment would be the inevitable result of the bringing of the cross-claim. Counsel for the company said that if that were the situation - he disputed that it necessarily was - that was not a reason for refusing the application, provided the Commission recovered a proper indemnity as to costs, which as I understand it, counsel for the company offers. (at p114)

24. In developing his submissions upon the impact upon the trial of the cross-claim, if it were allowed to be brought, counsel for the Commission referred to the lengthy preparation of what is undoubtedly a complex and difficult piece of litigation. He also referred to the fact that there had been marshalled a substantial number of witnesses, many from interstate and the fact that it was desirable that the evidence be called in case it be lost. Some of the witnesses already called have proved not to be young men. There was a real risk that evidence might be lost either altogether or in part, due to many circumstances, not the least of which was the frailty of human recollection. (at p114)

25. A further and independent matter strongly relied on by counsel for the Commission in opposition to the application was this. The documents the subject of the proposed cross-claim had been in the Commission's possession since the end of 1976. They had been discovered. Copies had been made available to all of the respondents, including the company. From the end of 1979 it was made plain to all, including the company, that it was likely that the documents, or at least some of them, would be relied upon in support of the Commission's case. Counsel and solicitors for the Commission had been instructed upon this basis. The case had been prepared by them upon the basis that the documents would be so used. If an injunction restraining the use of the documents were granted, the Commission would be in a very difficult position. Counsel for the Commission would, in the event of an order for the delivery up of the documents to the company being made, not be able to tender the documents. (at p114)

1. That was only one aspect of the problem. A more important aspect of it was counsel's very knowledge of the documents. That, in other circumstances, would have enabled them to examine and cross-examine witnesses, not only Mr. Matthews, with the contents of the documents in their minds. Counsel and solicitors would endeavour to put their knowledge aside, but this was imposing upon them a burden which, particularly in the context of running a heavy case, was almost impossible for them to carry. Each time evidence of a matter dealt with directly or indirectly in one or other of the documents was given, or was about to be given, counsel would need to ask themselves whether there was any danger of their using information which they had by reason only of what was in documents which the Commission was forbidden to use. (at p115)

2. The reality was that counsel, and I have their assurance for this, were so enmeshed in the preparation of the case, which included substantial reliance on the documents which are in question, that if relief of the kind sought in the cross-claim were granted they would have to withdraw from the case, or there was a very real danger they might have to take that course. Otherwise, there was a serious risk of the Commission, by their use of the information in the documents, being in contempt of this Court. Counsel themselves might also be guilty of contempt or of unprofessional conduct. Thus, whatever else happened as a result of the prosecution of the cross-claim, it would almost as a necessity lead to an adjournment because of the need to retain other counsel and for different members of the Crown Solicitor's staff to take over the conduct of the proceedings. (at p115)

3. That aspect of the matter was further developed in argument which took place this morning. Counsel made mention of the fact that copies of the documents had been furnished upon discovery to the other respondents. Whatever happened as between the company and the Commission, counsel for other respondents might use the documents directly or indirectly in relation to the prosecution of their own cases or in the cross-examination of witnesses. (at p115)

4. Then, independently of the problems to which I have so far referred, there were said to be other considerations which made it probable that there would need to be a lengthy adjournment of the proceedings with the risk of the loss of evidence. On the morning the motion was first argued. Franki J. delivered his judgment in Brambles Holdings Ltd. v. Trade Practices Commission (No. 2) (1980) 44 FLR 182 . His Honour held that the issue by the Commission of a notice pursuant to s. 155 of the Act during the course of proceedings was a contempt of this Court. That decision puts paid to the suggestion in the Crown Solicitor's letter of 30th April, 1980, that the production of the documents, in the event of the company being entitled to succeed on its cross-claim, could be compelled by a notice under s. 155 of the Act. (at p116)

5. At the time the matter was argued, however, counsel for the Commission said that the Commission would wish to consider his Honour's decision with a view to a possible appeal. He also said that the Commission might wish to consider whether it would not be entitled to obtain the documents by the issue of a subpoena for their production. That was a course which he contended was open to the Commission, notwithstanding that it was not entitled to discovery of documents against the respondents. (at p116)

6. The two matters I have mentioned may not arise directly for consideration in the hearing of the cross-claim if the company be permitted to prosecute it. They may rather be matters for consideration in the event that the Commission's defence to it proves unsuccessful. Furthermore, it would seem unlikely that any challenge to the decision of Franki J. would be successful before me. If his decision is to be challenged, it is more likely that that challenge will be made in an appeal from his judgment in Brambles' case or in an appeal in proceedings between these parties. But it would be possible for the matters raised to be relied upon in answer to the cross-claim, if the company be allowed to bring it. It may be put that it ought not to suceed in the cross-claim because the relief it seeks will be of no advantage to it if the documents must be produced either in answer to a notice under s. 155 or a subpoena. (at p116)

7. The significance of the matters I have just discussed for present purposes is that they provide a basis for saying that if the cross-claim is put on there is a very real possibility that its prosecution and defence will cause the postponement of this trial. (at p116)

8. A further matter which may lead to its adjournment is that the Commission may wish, so its counsel has said, to interrogate the company and perhaps seek discovery of documents. It would not be prevented from having the benefit of these interlocutory steps, as is the case in the principal proceedings in which it is suing for penalties. (at p116)

9. Counsel for the Commission submitted that the various considerations to which I have referred demonstrated that any adjournment of the trial would probably be not for a short period. It might be for many months, whilst, in relation to some of the matters, the appellate process was exhausted. The Commission's fears were that, as a result of the company being allowed to prosecute the cross-claim, evidence might be lost, and that, in the event of its being successful, the Commission would almost certainly be forced to prosecute its case with different solicitors and counsel. Thus, so it was submitted, the application ought to be refused because of the substantial injustice it would case. (at p116)

10. In addition to the matters that I have mentioned going to delay, there were other matters relied on as well. The point of substance raised by the proposed cross-claim has been the subject of a number of dicta in England. These dicta do not bear directly on the problem, although in one case there are dicta dealing with a situation not dissimilar to this, where documents were taken and there were allegations of breaches of the restrictive trade practices legislation in force in the United Kingdom. (at p117)

11. Counsel for the Commission entered upon an extensive review of those authorities. This is not the occasion, in my opinion, to come to a conclusion as to the law which will ultimately govern this matter. The case is not one where it can be demonstrated that the company's case is plainly untenable with the result that the application should be refused on that ground alone. Counsel for the Commission did not submit that it was; but he did submit that the preponderance of authority was in his client's favour. He sought to use that circumstance in support of a submission that, assuming that the cross-claim were permitted to be brought, it would not be of use to the company unless it could obtain an interlocutory injunction to restrain the Commission, until the final hearing of the cross-claim, from making use of the documents in question. If such an injunction were not obtained, the principal proceedings would proceed. By the time the cross-claim came on to be heard, they would be over. There was thus no utility in giving leave to bring the cross-claim. The only remedy really available to the company was an action of damages which the company was free to prosecute in an appropriate court at any time. (at p117)

12. In counsel's submission, the state of the law was such as to demonstrate that the company, in an application for interlocutory relief, could not establish a probability of success. It would also fail in such an application because of its delay, which was gross in the extreme, and because the balance of convenience would be against the grant of interlocutory relief. (at p117)

13. After much reflection I have come to the conclusion that I should reject the submission. I do so not because I think there is any real likelihood that the company would succeed in an application for interlocutory relief, but because I do not regard its chances of success in such an application as bearing upon the outcome of this application. My reason for the conclusion is that the criterion which ought to determine whether this application should be granted is whether the impact upon the trial of allowing the company to prosecute the cross-claim will cause injustice to the Commission out of proportion to the injustice occasioned the company by failure to accede to its application. (at p117)

14. Before proceeding, I should perhaps make clear why I think that an application for interlocutory relief would fail. My reason is the company's delay in seeking to put on the cross-claim. It is, as counsel for the Commission has said, of the gravest kind. Thus, my reasons for saying that the company would be likely to fail in an application for interlocutory relief are not based upon the balance of convenience or upon the state of the law. The argument on the law has not proceeded sufficiently far for me to come to a concluded view upon the question of whether the company would establish that there was a real question to be tried. I do say, however, that the authorities cited by counsel for the Commission do indicate that there is a strong basis for saying that, notwithstanding the property which the company may have in the documents, or the breach of faith which may be involved on the part Mr. Matthews and the Commission, it is open to the Commission to use the documents in a case such as this. Considerations of public policy may require that to be so. (at p118)

15. The authorities relied upon were numerous. I refer only to Initial Services Ltd. v. Putterill (1968) 1 QB 396 . There Lord Denning M.R. referred to a submission that in the employment of every servant there is implied an obligation that a servant will not, before or after his service, disclose information or documents which he has received in confidence. His Lordship continued: "Now I quite agree that there is such an obligation. It is imposed by law. But it is subject to exceptions. Take a simple instance. Suppose a master tells his servant: 'I am going to falsify these sale notes and deceive the customers. You are not to say anything about it to anyone.' If the master thereafter falsifies the sale notes, the servant is entitled to say: 'I am not going to stay any longer in the service of a man who does such a thing, I will leave him and report it to the customers.' It was so held in Gartside v. Outram (1956) 26 LJ Ch, 133 . (at p118)

16. "Mr. Michael Kerr suggested that this exception was confined to cases where the master has been 'guilty of a crime or fraud'. But I do not think that it is so limited. It extends to any misconduct of such a nature that it ought in the public interest to be disclosed to others. Wood, V-C put it in a vivid phrase: 'There is no confidence as to the disclosure of iniquity' (1856) 26 LJ Ch, at p 114 . (at p118)

17. "In Weld-Blundell v. Stephens (1919) 1 KB 520 Bankes L.J. rather suggested that the exception is limited to the proposed or contemplated commission of a crime or a civil wrong. But I should have thought that was too limited. The exception should extend to crimes, frauds and misdeeds, both those actually committed as well as those in contemplation, provided always - and this is essential - that the disclosure is justified in the public interest. The reason is because 'no private obligations can dispense with that universal one which lies on every member of the society to discover every design which may be formed, contrary to the laws of the society, to destroy the public welfare': see Annesley v. Anglesea (Earl) (1743) LR 5 QB 317n . (at p118)

18. "The disclosure must, I should think, be to one who has a proper interest to receive the information. Thus it would be proper to disclose a crime to the police; or a breach of the Restrictive Trade Practices Act to the registrar. There may be cases where the misdeed is of such a character that the public interest may demand, or at least excuse, publication on a broader field, even to the press" (1968) 1 QB, at pp 405-406 . (at p119)

19. His Lordship's dictum is obiter because the case was one in which the question was whether a defence to an action for breach of confidence raising matters associated with the public interest should be struck out. It was sufficient to decide that such a defence was not so untenable as to be one which ought not to be allowed to stand. (at p119)

20. So much is clear from the judgments of Salmon L.J. (as he was) and Winn L.J. Winn L.J., however, said: "I do not desire to burden this judgment with quotations from the judgment of the Court of Appeal in Weld-Blundell v. Stephens. If I had felt that time would be thus usefully employed, I would have drawn attention to the fact that nothing in any of those judgments touches upon the precise point here; all the judgments are certainly open to the construction that the members of the court would have been ready enough to refuse to enforce the agreement had they thought the agreement itself offended against public policy, that being the essential point in the present appeal" (1968) 1 QB, at p 412 . (at p119)

21. My tentative view of the law as revealed by the authorities, although not relevant to the submission made by the Commission that the company would fail in any application for an interlocutory injunction, may possibly have ultimate significance when I come to consider later on what the outcome of this application should be. It is a matter to which I shall return. (at p119)

22. Before proceeding further, I should say more on the question of jurisdiction. I have already referred to the provisions of s. 32 of the Federal Court of Australia Act. Assuming validity, which I am prepared to do, the question is what is meant by the words in the section, "matters . . . that are associated with matters in which the jurisdiction of the Court is invoked". The matter has not been fully argued before me, principally for the reasons I have mentioned, but I am prepared to say, tentatively, that I think that the matter which would exist if the cross-claim were brought is within the jurisdiction of this Court. I am not so clear about the matter, however, that I am prepared, in the event that leave to bring the cross-claim is granted, to countenance a situation under which no notice is given pursuant to the provisions of s. 78B of the Judiciary Act. In my opinion those provisions do apply. In my opinion, the question of my jurisdiction does involve a matter arising under the Constitution or involving its interpretation. One reason why I think that is so is because of the introductory words of s. 32, "To the extent that the Constitution permits". In the event that I grant leave to bring the cross-claim, I will require to be satisfied that the notices provided for under s. 78 have been served. It would seem that they should be served on the Attorneys-General for the Commonwealth and of Victoria. It may be as well, in the event that the application is granted, if notice is also served on the Attorney-General for New South Wales. (at p120)

23. A further matter to be mentioned before conclusions can be reached is the attitude of the respondents other than the company. Originally I did not invite any statement from the other respondents as to their attitude to the application. However, when I came to consider the matter more fully, I thought their attitude could have a bearing both on the outcome of the application and upon any terms I might impose if I decided to accede to it. Two matters were in my mind. The first was the question of costs thrown away in the event of there being any lengthy adjournment of the proceedings. The costs I had in mind were the costs of the respondents other than the company. The second matter was concerned with what would happen if there were any lengthy adjournment of the trial and I, for any reason, were unable to continue the hearing of it. I raised these matters on Thursday last. Later in the day counsel for the third respondent said: "We do not wish to say anything in opposition to the application for leave to file the cross-claim. Secondly, if there is to be an adjournment in consequence of that leave being granted, the third respondent would be prepared or resigned to facing the fact that any costs occasioned or thrown away by such an adjournment should lie where they fall. . . . Thirdly, we would submit that no order should be made at this stage covering the contingency that an adjourned hearing may not take place before your Honour. That matter should be left open, in our submission." (at p120)

24. Since then, counsel for the second, fourth and fifth respondents have stated the position of their clients to be broadly the same as that stated by counsel for the third respondent. No respondent has mentioned any other considerations as being appropriate for me to take into account in relation to the question of whether I grant the application or in relation to any terms which I think ought to be imposed as a result of the grant of it. (at p120)

25. I have now said enough to enable me to come to the question of what the outcome of the application should be. In my opinion, as I have earlier said, the question to be decided is what is the just thing to be done as between the immediate parties to the application. In the light of the attitude to the application by the other respondents, I need not take their interests into account. If the application be granted, I think the probabilities are that there will be a not insubstantial delay in the hearing of the principal proceedings. Without reaching a final conclusion, I think the only way of managing the cross-claim, if it is to be brought on, is to hear it separately and before any direct use of the documents is sought to be made. That means it must be finally disposed of before Matthews gives evidence, and possibly at an earlier stage of the presentation of the Commission's case. The time when Matthews is to be called is approaching, the Commission having called, as I understand it, the bulk of what has become known as the trade or consumer evidence in the case. I think it will be inevitable that an adjournment will then need to be granted to enable the cross-claim to be heard. It may well be needed, because the Commission will require to consider the form of its defence and whether it wishes there to be discovery and/or interrogatories. Time will also be needed to enable the requirements of s. 78B of the Judiciary Act to be met. It is not impossible that an answer by one or more of the Attorneys-General served may be that the hearing should await the outcome of the proceedings in the High Court earlier referred to. Thus the granting of the application will almost certainly mean that the proceedings will be not inconsiderably delayed. Just to what extent they will be delayed I find it impossible to say. (at p121)

26. Delay of itself should not, however, be a reason for refusing the application. It can be granted upon condition that costs, perhaps as between solicitor and client, thrown away should be paid by the company in any event. The evidence so far led does not disclose that any breach of the law which may have been committed is continuing. If penalties are to be imposed and an injunction to restrain repetition of past conduct granted, that can as easily and as satisfactorily be done next year or in 1982. Thus, if delay were the only consideration, such injustice as would result from it could not outweigh the injustice occasioned the company if it were effectively prevented from bringing its claim. It is true that it is free to commence independent proceedings in one of the Supreme Courts, subject to any question of the ouster of jurisdiction as the result of the operation of s. 9 of the Administrative Decisions (Judicial Review) Act, or perhaps in the High Court, but there is a real question of whether, in the light of the delay up to now, it could obtain any effective relief. If it failed to obtain interlocutory relief, it would no doubt apply for the adjournment of the principal proceedings, that is apply before me for an adjournment of the principal proceedings. The considerations would then be much the same as they are now. (at p121)

1. But there are two matters of possible injustice to the Commission which might not be able to be overcome by an appropriate order of costs. The first of these is possible loss of evidence to which I have earlier referred. Most of the other evidence will in fact be in by the time any adjournment is necessary. Of course Mr. Matthews' evidence would not be in. (at p121)

2. There is a question of whether the other evidence would be available if another judge, for any reason, had to undertake the adjourned hearing. That was a matter raised with counsel for the other respondents. None is prepared at this stage to commit his client to a situation in which it would be so available. I was referred to The Forest Lake (1968) p. 270 but a reading of the judgment there suggests that the old evidence was used by consent as indeed was the case in Simonius Vischer v. Holt & Thompson (Unreported (Supreme Court of New South Wales, 19th December, 1975.)) , as the result of the unfortunate illness of the original trial judge. I have no reason to think that I will not be available to resume any adjourned hearing, but the future is difficult for any of us to foresee. It would be gravely unjust to the Commission if it should lose evidence by reason of what is a very belated application to bring this cross-claim. I shall say more of this matter in a moment. (at p122)

3. The second matter which causes me concern is the fact that, for the reasons advanced by counsel for the Commission, and mentioned earlier in this judgment, counsel for the Commission and perhaps instructing solicitors, might not, if relief be granted, be able to continue. Moreover there is a problem of cross-examination, upon the basis of the documents, by counsel for the other respondents or other use by them of those documents. I do not repeat what counsel for the Commission said in his submission. I have earlier set it out. I accept it unreservedly. (at p122)

4. But if there is to be a delay, the problems to which the submission gives rise can be overcome, albeit with a great deal of difficulty. There will be time for fresh counsel and solicitors to be instructed. Again, of course the Commission in that event would have to have a proper indemnity as to costs lost or thrown away. (at p122)

5. The question I have to ask myself is whether the two matters which I have mentioned as providing plain evidence of injustice to the Commission, if the application is granted, outweigh the injustice that might be caused if I refuse the application. The matter has caused me grave anxiety. I make no apology for the time I have taken to come to a conclusion. (at p122)

6. One of the matters I have taken into account, but discarded, is the difficult legal problem which it would seem confronts the company. I refer to the dicta earlier cited from the Initial Services case (1968) 1 QB 396 . But, upon reflection, I think it would be wrong to take that matter into account as determinative of what I should do. It would be to pre-determine the matter. For similar reasons I have left out of account the fact that there is a question as to the jurisdiction of this Court to entertain the cross-claim. (at p122)

7. Having given the matter the reflection to which I have referred, I have reached the conclusion that in all the circumstances I should allow the company to put on the cross-claim, but upon terms to which I shall refer. One of the matters which has played some part in my decision, which, as I say, I have reached with great difficulty, is the fact that it would have been reasonable for the company to have sought to bring the cross-claim in May of this year. I do not think, upon the basis of what is disclosed in Mr. Huntington's affidavit, that that could have been regarded as an unreasonably late time to attempt to institute it. If that had occurred, the cross-claim would have been determined first, and it is unlikely that any evidence in the principal proceedings would have been led this year. One cannot say that that is certainly the situation, but it seems to me that it is not improbably the situation. (at p123)

8. The terms I have in mind must provide a proper indemnity for costs thrown away. I express the view, tentatively, that they should be ordered to be paid on the basis of costs as between solicitor and client. I am anxious, notwithstanding that the risk of my availability for any adjourned hearing may seem to be slight, that the Commission be protected as to the evidence which has already been led. It is unlikely that I will give leave, except on condition that all the respondents agree, subject, perhaps, to my saying something eventually about the demeanour of the various witnesses, to the transcript being available for use by another judge, should the need for that arise. I am also prepared to consider a term, which I have not formulated even in a tentative way, which would protect both the Commission and its legal representatives in relation to some use of the documents which may be inevitable, and against use of them which may be made or attempted to be made by counsel for the other respondents. I should also deal at some stage with the costs of the notice of motion. (at p123)

9. I am sorry that I cannot give you those reasons in writing, but what is needed is some formulation of terms.
   
   SHORT MINUTES OF ORDERS
   
   (1) Order that leave be granted to the applicant Allied Mills Industries Pty. Ltd. to file and serve a cross-claim against the Trade Practices Commission in terms of the amended draft annexure B to the notice of motion herein.
   (2) Order that such leave be granted subject to the applicant submitting to the terms and conditions contained herein. (3) Order that the costs of the motion for leave to file the cross-claim be costs in the cross-claim.
   (4) Order that the cross-claim be separately heard on a final basis prior to the Commission calling Matthews to give evidence in the main proceedings, apart from such evidence as is specifically provided for herein, such hearing to commence before me on Monday 1st December, 1980, the applicant submitting to all such directions as this Court may see fit to give to enable the final hearing of the cross-claim to commence on such date.
   (5) Order that the directions hearing of such cross-claim be held before me on Friday 14th November, 1980, at 10.15 a.m.
   (6) The other respondents in the main proceeding also consenting, the applicant consents to the Commission calling Matthews to give evidence in the main proceeding prior to the delivery of reasons for judgment in the cross-claim for the purpose only of identifying in chief and having marked for identification statements and such other documents as the Commission may be advised which the Commission if free to do so wishes to tender in evidence in the main proceeding.
   (7) The applicant further consents to the Commission tendering in evidence in the cross-claim all such statements and documents referred to in the cross-claim as it may be advised.
   (8) The other respondents in the main proceeding consenting, order that the evidence oral and documentary given in the main proceeding before me may be used in evidence before any other judge of this Court who may be required to conclude the final hearing of the main proceeding without it being necessary to recall any such witness before such judge unless such judge otherwise requires such witness to be recalled.
   (9) The applicant is ordered to pay the costs of the Commission, as between solicitor and client, occasioned or thrown away as a result of the main proceedings being adjourned to await the final outcome of the cross-claim, including those incurred in preparing again for the resumed hearing of the main proceedings together with any additional costs occasioned by the briefing of new counsel, should that become necessary for any reason.
   (10) It is noted that all the other respondents in the main proceedings agree to bear their own costs occasioned or thrown away as a result of the main proceedings being adjourned to await the final outcome of the cross-claim, including those incurred in preparing again for the resumed hearing of the main proceedings together with any additional costs occasioned by the briefing of new counsel, should that become necessary for any reason, and that they will not seek to recover such costs from the Commission and that any general order for costs in favour of such respondents shall not extend to or include such costs and it is ordered that the applicant Allied Mills Industries Pty. Ltd. shall bear its own costs occasioned or thrown away as aforesaid, and in any event shall not be entitled to recover such costs from the Commission. (at p124)

ORDER

Orders accordingly.