VISCARIELLO v MACKS

[2010] SASC 2

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master)

VISCARIELLO v MACKS

[2010] SASC 2

Reasons for Decision of The Honourable Justice Bleby

13 January 2010

PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - USE OF DOCUMENTS

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW

Appeal from decision of a master dismissing the plaintiff’s application for release from the implied undertaking given by him in this action in respect of the use of certain documents disclosed by the defendant – purpose of the application was to enable similar applications to be made in other actions in order that documents disclosed in those other actions could be used by the plaintiff in these proceedings – whether Master erred in holding that the plaintiff was required to identify the individual documents in respect of which he was seeking release from the implied undertakings in the other actions – whether documents in respect of which release from the implied undertaking is sought are relevant to issues to be determined in other proceedings – whether special circumstances exist which would justify release from the implied undertaking – appeal dismissed.

Supreme Court Act 1935 (SA) s 50; Supreme Court Civil Rules 2006 (SA) r 17, referred to.
Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283; House v The King (1936) 55 CLR 499, applied.
Remm Construction (SA) Pty Ltd v Wallbridge & Gilbert Pty Ltd (1991) 162 LSJS 99; Remm Construction (SA) Pty Ltd v EPT Group Holdings Ltd (1991) 162 LSJS 123, considered.

VISCARIELLO v MACKS
[2010] SASC 2

Appeal from a Master

BLEBY J.

Introduction

1. On 23 December 2009 I dismissed an appeal from the decision of a master for reasons to be published. These are those reasons.

2. The plaintiff in these proceedings made an application to the Master for release from the implied undertaking given by him in this action in respect of the use of certain documents disclosed by the defendant in this action. The purpose of the application was to enable similar applications to be made by one Tania Hamilton-Smith in six other actions in which she is a party in the Magistrates Court of South Australia, in this Court, in the Federal Magistrates Court and in the Federal Court of Australia for the release of her (Ms Hamilton-Smith) from the implied undertakings given by her in respect of the use of documents disclosed by the parties in each of those other proceedings. There was a further intended application for release of the plaintiff from his implied undertaking in respect of the use of documents disclosed in another Federal Court action in which he was party.

3. The intended purpose of the release in each of those actions is to enable Ms Hamilton-Smith to provide such documents to the plaintiff for use in these proceedings or, in the case of the action in which the plaintiff himself is a party, to enable him to use such documents in these proceedings.

4. The Master refused the application. The plaintiff appealed as of right[1] against that decision.

   [1]    Supreme Court Act 1935 (SA) s 50(1) & (2), Supreme Court Civil Rules 2006 (SA) r 17(2).

5. I am told that some of the intended applications have been made in the other actions but not in all of them.

   The Master’s decision

6. The Master referred to the principles governing such applications. In essence they are that the Court will not release a party from such undertakings save in special circumstances and where the release will not occasion injustice to the other party. I refer in more detail to those principles below.

7. It was not argued before the Master or before me that the release from the undertaking in these proceedings would occasion injustice to the defendant. The sole question was whether there were “special circumstances” justifying release from the implied undertaking.

8. The first ground for the Master refusing the plaintiff’s application was that the plaintiff had not identified, for the purpose of the present application, the individual documents and other pieces of evidence in respect of which he was seeking release from the implied undertakings in the other actions. The second ground on which the Master refused the application was that the plaintiff had not shown how any of the documents in respect of which release from the implied undertaking was sought in these proceedings would be admissible or of any significant weight in the applications to be made in the other proceedings. It was not demonstrated that the content of the relevant documents identified in these proceedings would assist in showing special circumstances for the purpose of the release from the undertakings in respect of documents in the other proceedings. Accordingly, the application was dismissed.

   The relevant principles

9. The principles governing an application of this nature are conveniently summarised in the joint judgment of Branson, Sundberg and Allsop JJ in Liberty Funding Pty Ltd v Phoenix Capital Ltd:[2]

   [2] [2005] FCAFC 3, [31], (2005) 218 ALR 283, 289-290.

   In order to be released from the implied undertaking it has been said that a party in the position of the appellants must show "special circumstances": see, for example, Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217; 110 ALR 685. It is unnecessary to examine the authorities in this area in any detail. The parties were not in disagreement as to the legal principles. The notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. In Springfield Nominees, Wilcox J identified a number of considerations which may, depending upon the circumstances, be relevant to the exercise of the discretion. These were:

   •the nature of the document;

   •the circumstances under which the document came into existence;

   •the attitude of the author of the document and any prejudice the author may sustain;

   •whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain;

   •the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information):

   •the circumstances in which the document came in to the hands of the applicant; and

   •most importantly of all, the likely contribution of the document to achieving justice in the other proceeding.

10. The Court described the matters listed above as being “a helpful guide” in determining the application.[3]

    [3] Ibid [32], 290.

11. The application in this case involved the exercise of a discretion by the Master. The circumstances in which the exercise of that discretion may be successfully challenged are limited to the grounds discussed by the High Court in House v The King.[4]

    [4] (1936) 55 CLR 499, 504-505. See Remm Construction (SA) Pty Ltd v Wallbridge & Gilbert Pty Ltd (1991) 162 LSJS 99, 105; Remm Construction (SA) Pty Ltd v EPT Group Holdings Ltd (1991) 162 LSJS 123, 125.

    Consideration of the appeal

12. I consider that the Master was in error in holding that the plaintiff needed to identify the individual documents in the other actions in respect of which release from the implied undertakings in those actions was necessary. That was not a relevant consideration in the application before the Master. For reasons which are self-evident from the factors that have to be considered in relation to the documents concerned, the relevant documents will have to be identified before the courts in which the other applications are made. Indeed, to require them to be identified on the application before the Master might well compromise the implied undertaking release from which will be sought in each of the other actions.

13. If that were the only reason on which the Master relied the appeal would have to be allowed. However, it is not the only reason, and in my opinion the Master was justified in relying on the second ground.

14. Where an application is made for release of an implied undertaking to enable relevant documents to be used in other court proceedings, it seems to me that there are three questions which need to be addressed. The first is what are the issues in those other proceedings to which the documents are said to be relevant. On this application the issue in the other proceedings is whether a party to those other proceedings should be released from the implied undertaking in those proceedings not to use or allow the use of documents disclosed in those proceedings by the plaintiff in these proceedings. In the other applications to be made the issues to which the documents are said to be relevant will be by reference to the pleadings in this action. In this case the plaintiff pleads that the relevant proceedings to which Ms Hamilton-Smith and he were parties were proceedings improperly instituted at the behest of the defendant in these proceedings and involved the misapplication by the defendant of the funds of two companies in liquidation of which the defendant is the liquidator and of which the plaintiff was a director. The relevant matters are all pleaded in some detail in the plaintiff’s amended statement of claim.

15. The second question for consideration is whether the documents in respect of which the release from the implied undertaking is sought are relevant to a determination of those issues identified by the pleadings. That will necessarily involve a consideration of each of the documents in respect of which the release from the undertaking is sought and their relevance to a determination of the issues identified. Of course, it is not for this Court to determine the admissibility of such documents in those other proceedings, but it is not a difficult exercise to determine their relevance to the identified issues. Likewise, it will be for the other courts to determine whether the documents in question in those proceedings are relevant to the issues identified on the pleadings in this case, but not their admissibility in these proceedings.

16. The third question for consideration is whether there are special circumstances which justify the release from the implied undertaking in respect of the particular documents concerned. It may be that the particular document is the only relevant documentary evidence available to determine the issue in dispute. It may be relevant to inform the court that the document in question or a copy of it has not been disclosed in the other proceedings. It may even be sufficient to say that the document in question is part of the necessary evidentiary case of the plaintiff in respect of a particular issue in dispute in the other proceedings. Those and other factors will be relevant to a determination by the other court whether special circumstances exist for release from the implied undertaking.

17. However, the plaintiff, on this application, failed at the second and third questions. He was unable to demonstrate either before the Master or before me how the documents in respect of which the plaintiff seeks release from the implied undertaking for the purpose of making those other applications would assist in any way in resolving the applications in those actions. It is clear that these documents in question are relevant to a determination of the issues raised on the pleadings in this case. They may even form an important part of the evidentiary chain on which the plaintiff will rely. However, it has not been demonstrated that the documents will be relevant in determining whether release from the implied undertaking in other proceedings should be given in respect of other documents that may be relevant to the issues in these proceedings. Merely because it is said, as the plaintiff argues, that there is a close nexus between the subject matter of these proceedings and the subject matter of the other proceedings does not establish the necessary relevance to the applications to be made in those other proceedings. Nor does its amount to special circumstances justifying the plaintiff’s present application. No attempt was made to indicate how those documents would be relevant to a determination of the other applications in the other actions.

    Conclusion

18. It follows from the forgoing that, although there was an error in the approach of the Master, it was not fatal to the exercise of his discretion based on the second ground on which he relied. There are no grounds on which the Court as presently constituted can properly interfere with the exercise of that discretion. Indeed, there were no grounds before the Master on which he could properly have exercised his discretion in favour of the plaintiff. Accordingly, the appeal was dismissed.