FEDERAL COURT OF AUSTRALIA RRG Nominees Pty Ltd v Visible Temporary Fencing Australia Pty Ltd (No 3) [2018] FCA 404 File number: SAD 275 of 2016 Judge: WHITE J Date of judgment: 13 March 2018 Date of Publication of reasons: 27 March 2018 Catchwords: EVIDENCE – an Applicant recorded a meeting between himself and two Respondents – admissibility of that recording and a transcript of the recording at trial – whether recording was made in contravention of law – whether Court should permit the reception of the evidence under s 138 of the Evidence Act 1995 (Cth) – evidence ruled inadmissible. Legislation: Evidence Act 1995 (Cth) ss 48(1), 102, 138 Acts Interpretation Act 1915 (SA) s 16(1) Listening and Surveillance Devices Act 1972 (SA) ss 3, 4, 7 Surveillance Devices Act 2016 (SA) Sch 1, cl (4)(1) Cases cited: Alliance Craton Explorer Pty Ltd v Quasar Resources Ltd [2010] SASC 266 DW v The Queen [2014] NSWCCA 28; (2014) 239 A Crim R 192 Employment Advocate v Williamson [2001] FCA 1164; (2001) 111 FCR 20 Groom v Police [2015] SASC 101 Thomas v Nash [2010] SASC 153; (2010) 107 SASR 309 Date of hearing: 13 March 2018 Registry: South Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 44 Counsel for the Applicants: Mr I Thomas Solicitor for the Applicants: Andreyev Lawyers Counsel for the Second and Third Respondents: The Second and Third Respondents appeared in person Counsel for the remaining Respondents: The remaining Respondents did not appear ORDERS SAD 275 of 2016 BETWEEN: RRG NOMINEES PTY LTD (ACN 066 061 903) First Applicant SCHNIK NOMINEES PTY LTD (ACN 155 094 456) Second Applicant FRANK SCHIRRIPA NOMINEES PTY LTD (ACN 008 032 835) Third Applicant AND: VISIBLE TEMPORARY FENCING AUSTRALIA PTY LTD (ACN 165 489 743) First Respondent MILORAD NESTOROVIC Second Respondent DRAGANA PINNERI (and another named in the Schedule) Third Respondent JUDGE: WHITE J DATE OF ORDER: 13 MARCH 2018 THE COURT ORDERS THAT: 1. The Applicants not be permitted to adduce into evidence either the recording or the transcription of the recording of the meeting held on 11 August 2015. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT WHITE J: 1 On 13 March 2018, I ruled that the Applicants should not be permitted to adduce into evidence in the trial either a recording of a meeting which had taken place on 11 August 2015 involving Mr Schirripa and the Second and Third Respondents, or the transcription of the recording. I considered that the recording had been made in contravention of s 4 of the former Listening and Surveillance Devices Act 1972 (SA) (the Listening Devices Act) and the circumstance contemplated by s 138 of the Evidence Act 1995 (Cth) for the admission of evidence of that kind did not exist in this case. 2 I said that I would publish reasons later. The following are my reasons. 3 The Applicants seek to recover damages from the Second and Third Respondents in respect of losses resulting from failed investments. They allege that they made the investments in reliance on the truth of representations made by the Second Respondent and, in two cases, by the Third Respondent. Initially, the Applicants sought to recover damages from 11 Respondents but the proceedings against the remaining Respondents have been stayed, they all having gone into liquidation. These include the companies into which the Applicants made many of the investments, to which the parties have referred as "the State Companies". 4 The Applicants made the investments in the period between October 2013 and August 2015. The representations they allege are said to have been made in the same period. The investments were made into start-up businesses to be operated by the State Companies which had the intention of acquiring and hiring out temporary fencing panels. The panels in question had features which made them highly visible both in daylight and in darkness. 5 The Second and Third Respondents are father and daughter. The Second Respondent held the majority of the shares in the companies in which the investments were made. It seemed to be common ground that the Third Respondent was a participant in the businesses. 6 Mr Schirripa, the principal of two of the Applicants which made the investments, became concerned in July 2015 about aspects of the businesses of the respondent companies and about the reliability of some of the information concerning them which he had been given by the Respondents. 7 On 11 August 2015, a meeting occurred between Mr Schirripa and the Second and Third Respondents. The meeting appears to have lasted for approximately one hour and 45 minutes and covered a number of topics. These included complaints by Mr Schirripa about a lack of information being provided by the Second Respondent, Mr Schirripa's assertions as to the entitlements of the directors of the State Companies (of which he was one) to receive information, the obtaining of contracts for the hire of panels of temporary fencing and the identification of the contacts made by the Second Respondent. Mr Schirripa made a recording of the meeting on his mobile phone. There is no evidence that the Second and Third Respondents were aware that the meeting was being recorded. 8 The Applicants wished to adduce into evidence pursuant to s 48(1) of the Evidence Act a USB stick containing the recording as well as a transcript of the recording. 9 The Second and Third Respondents opposed that evidence being received, on three grounds: the recording was made in contravention of s 4 of Listening Devices Act; the recording is incomplete with the consequence that its contents are "out of context"; and Mr Schirripa "slanted" the line of questioning in the conversations so as to favour his own position. 10 The Second and Third Respondents are now unrepresented. It was evident that they sought to invoke s 138 of the Evidence Act. Section 138(1) provides that evidence obtained in contravention of an Australian law is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that was obtained in the way in which the evidence was obtained. Subsection (3) lists a number of matters which the Court may take into account in making a decision under subs (1): (3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: (a) the probative value of the evidence; and (b) the importance of the evidence in the proceeding; and (c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding; and (d) the gravity of the impropriety or contravention; and (e) whether the impropriety or contravention was deliberate or reckless; and (f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and (h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law. 11 For the purposes of the ruling, I have had regard to the transcription of the recording provided by the Applicants. The alleged unlawfulness 12 Section 4 of the Listening Devices Act provides: Regulation of use of listening devices Except as provided by this Act, a person must not intentionally use any listening device to overhear, record, monitor or listen to any private conversation, whether or not the person is a party to the conversation, without the consent, express or implied, of the parties to that conversation. Maximum penalty: $10 000 or imprisonment for 2 years. 13 It was not in issue that Mr Schirripa's mobile phone was a "listening device" as defined in s 3 of the Listening Devices Act. 14 The term "private conversation" used in s 4 is defined in s 3 of the Listening Devices Act: [P]rivate conversation means any conversation carried on in circumstances that may reasonably be taken to indicate that any party to the conversation desires it to be confined to the parties to the conversation 15 Section 7 of the Listening Devices Act provides (relevantly): Lawful use of listening device by party to private conversation (1) Section 4 does not apply to or in relation to the use of a listening device by a person (including a person to whom a warrant is issued under this Act) if that listening device is used— (a) to overhear, record, monitor or listen to any private conversation to which that person is a party; and (b) in the course of duty of that person, in the public interest or for the protection of the lawful interests of that person. … (3) A person must not knowingly communicate or publish information or material derived from the use (whether by that person or another person) of a listening device under this section except— … (d) being a party to the conversation to which the information or material relates, as reasonably required for the protection of the person's lawful interests; or … Maximum penalty: $10 000 or imprisonment for 2 years. 16 The Listening Devices Act was repealed by Sch 1, cl (4)(1) of the Surveillance Devices Act 2016 (SA) which came into force on 18 December 2017. By reason of s 16(1) of the Acts Interpretation Act 1915 (SA), the repeal of the Listening Devices Act did not affect the unlawfulness of anything done before its repeal. 17 In the circumstances already described, it is plain that Mr Schirripa's use of his mobile phone to record the conversation was intentional. He acknowledged that neither of the Second and Third Respondents had granted their consent, express or implied, to the recording of their discussion. 18 The Applicants contended that s 4 of the Listening Devices Act was not engaged in relation to Mr Schirripa's recording. 19 The Applicants' first submission focussed on the term "private conversation" in s 4 of the Listening Devices Act. They submitted that the meeting on 11 August 2015 should not be characterised as a "conversation". 20 The Applicants relied for this submission on the decision in Alliance Craton Explorer Pty Ltd v Quasar Resources Ltd [2010] SASC 266. Sulan J held, at [31], that although the term "conversation" in s 4 should not be given a restricted meaning, it does connote communications with a degree of informality and would not normally apply to the proceedings of a committee. His Honour then went on to hold that the meeting of the management committee of a joint venture was not a private conversation for the purposes of s 4, noting that the meeting had a commercial character and purpose, and that there was a degree of formality about it given the way in which it was conducted, including the use of both an agenda and minutes. The Applicants submitted that the same reasoning should be applied in the present case, given that the meeting on 11 August 2015 was a business meeting, involving the management of the State Companies and addressing important business issues. 21 I reject that submission. On any reasonable view, the meeting on 11 August 2015 comprised a conversation. The fact that the subject matter of the conversation was the business affairs of the State companies does not alter that character. Business matters can be the subject matter of a conversation as much as personal matters. The meeting on 11 August 2015 did not have any of the hallmarks discussed in Alliance Craton: it was marked by informality (with much of being in the form of a free flowing discussion); there was seemingly little structure to the meeting; there was no agenda; and there were no minutes. 22 Initially, the Applicants submitted that even if the meeting constituted a conversation in the requisite sense, it had not been a "private" conversation. However, they did not pursue that contention. 23 The definition of "private conversation" in the Listening Devices Act was considered by Doyle CJ in Thomas v Nash [2010] SASC 153; (2010) 107 SASR 309: [36] The definition of "private conversation" indicates that a conversation is private if the conversation, as it takes place and progresses, is intended to be confined to the parties to the conversation, or known participants in the conversation. [37] A conversation can be private even though the participants are at liberty to tell others about it later. In the Act, "private" is used not in the sense of "secret" or "confidential", but in the sense of "not public". A telephone conversation with a friend is a private conversation, even though the friend is at liberty later to tell another about it. On the other hand, a telephone conversation on talkback radio is not a private conversation. [38] There is no reason to give a narrow meaning to the concept of "private conversation", bearing in mind the objects of the Act. There is no need to trace the precise limits of the concept of a private conversation. … 24 In my opinion, there is little difficulty in concluding that the meeting on 11 August 2015 was a private conversation in the sense discussed by Doyle CJ. It concerned the internal business affairs of the State Companies. Amongst other things, the participants discussed the pricing for the hire of the temporary fencing panels and the identification of persons or entities to which the panels could be hired. These matters are of the very kind which it is reasonable to suppose that the participants intended to keep private in the sense discussed in Thomas v Nash. It is reasonable to suppose that those attending intended that the matters discussed would remain private even if Mr Schirripa was at liberty to tell other investors later about what had been discussed. 25 Accordingly, the Applicants' concession concerning the private nature of the conversation was appropriate. 26 The Applicants' third submission invoked s 7(1)(b) of the Listening Devices Act. They submitted that Mr Schirripa had, within the meaning of that subsection, used the listening device for the protection of his lawful interests. 27 The term "lawful interests" in the context of s 7(1) and of its cognates elsewhere has been considered in a number of authorities. See Thomas v Nash at [43]-[49], followed in Groom v Police [2015] SASC 101 at [34]-[35] (Nicholson J). See also DW v The Queen [2014] NSWCCA 28; (2014) 239 A Crim R 192 at [27]-[37]. 28 The Applicants submitted that a number of matters in combination indicated that Mr Schirripa had a lawful interest in recording the meeting: he was a director of a number of the State Companies and of First Applicant (RRG) and as such owed duties to those companies; he was concerned that his fellow director, the Second Respondent, was not providing necessary information; he was concerned that it was contrary to the interests of the businesses of the State Companies for the Second Respondent to keep the information to himself; that he suspected that the Second Respondent had tricked him into putting money into the VTF businesses; and that he was considering investment in the VTF business in Queensland. It was said that by reason of these matters it was in his lawful interest to make notes so as to be able to recall the details of the meeting. 29 A number of the authorities have made the point that an exception of the kind contained in s 7(1)(b) is not to be construed so widely so as to undermine the protection given by s 4 and its counterparts, that protection being at the very heart of the Listening Devices Act. It is also to be kept in mind that it is Mr Schirripa's purpose in using the recording device at the relevant time which is to be considered for the purposes of s 7(1)(b). 30 In his affidavit of 16 November 2017, Mr Schirripa deposed that his purpose in making the recording was "so I would be able to make notes and recall all the detail[s]". 31 In Thomas v Nash at [48], Doyle CJ endorsed the view that a mere desire to have a reliable record of a conversation is insufficient, by itself, to constitute "protection of the lawful interests" of the person for the purposes of s 7(1). I respectfully am of the same view. 32 The matters to which counsel referred appear to be in the nature of a retrospective justification for Mr Schirripa's purpose and not reflective of his actual purpose. He did not depose to any of these matters being his purpose nor indicate how the recording of the conversation related to his pursuit of the identified topics. Accordingly, I consider that the Applicants have not established that Mr Schirripa used his mobile phone to record the conversation for the protection of his lawful interests. 33 In these circumstances, I consider that the prohibition in s 4 applies and that it was contravened by Mr Schirripa on 11 August 2015, even if he acted innocently in doing so. That is sufficient to attract the application of s 138 of the Evidence Act. Application of s 138 of the Evidence Act 34 The Applicants submitted that, despite the improper way by which the evidence was obtained, the Court should permit the reception of the evidence. They submitted that the desirability of the Court admitting the evidence outweighed the undesirability of receiving evidence which had been obtained unlawfully. In particular, the Applicants submitted that the evidence is relevant to, and probative of: (a) the Second Respondent having made a number of the representations alleged by the Applicants; (b) that those representations were misleading or deceptive; (c) the reliance by Mr Schirripa on the representations; and (d) the credit of Mr Schirripa and of the Second and Third Respondents. 35 Counsel for the Applicants identified a number of passages in the transcript of the conversation which he said were capable of constituting admissions by the Second Respondent that particular pleaded representations had been made. I am willing to assume in favour of the Applicants that that may be so, although the discursive and disjointed manner in which much of the conversation proceeded makes difficult the distilling out of admissions. 36 Counsel did not develop the submission that the recording and transcription would be probative of the misleading or deceptive nature of the alleged representations but, again, I am willing to assume in the Applicants' favour that that may be so. 37 It is not easy to see that the recording and transcription may be probative of the Applicants' reliance on the alleged representations. As counsel seemed to acknowledge, whether this was so would depend on inferences being drawn from statements made by the Second and Third Respondents and, possibly, inferences on inferences. 38 Counsel did not develop the submission with respect to credibility, and it is not necessary to consider it in detail. I accept that the matters said by the participants in the meeting on 11 August 2015 are capable of bearing on their credibility now. However, s 102 of the Evidence Act has the effect that evidence is not admissible if it is relevant only to credibility (unless a specific statutory exception applies). Accordingly, the use of the evidence in the trial with respect to credibility would depend on it being admissible for some other purpose. 39 Even if the recording and transcription are not admitted into evidence, accounts of what was said at the meeting may, to the extent that they are admissible, be given in the oral evidence by Mr Schirripa, and the Second and Third Respondents. Section 138 does not operate with respect to evidence of that kind. Further, the recording and the transcription are likely to constitute the best evidence of what was said at the meeting because the witnesses' accounts of the conversation are likely to be affected by the ordinary difficulties in recalling a conversation in sequence and in detail, frailties of human memory and perhaps retrospective reconstruction. Those matters tend to point in favour of the reception of the evidence. They are matters of the kind to which s 138(3)(a) and (b) refer. 40 However, the policy underlying s 4 of the Listening Devices Act is important. It reflects the community's aversion to the surreptitious recording of private conversations. The policy underlying s 138 is also important. It reflects the legislature's view that the obtaining of evidence by unlawful means should be discouraged, and the integrity of the judicial system not be diminished by apparent condonation of unlawful conduct: Employment Advocate v Williamson [2001] FCA 1164; (2001) 111 FCR 20 at [77] (Branson J). 41 These policies ought not be circumvented by a too ready willingness to find that the desirability of admitting the evidence outweighs the undesirability of receiving evidence which has been obtained unlawfully. But obviously, much turns on the circumstances of each case. 42 The matters I have mentioned indicate that the advantages to be obtained in the present case by admitting the evidence do not outweigh the undesirability of admitting the unlawfully obtained evidence and that it would not be appropriate to exercise the power pursuant to s 138(3) of the Evidence Act to admit the recording and the transcription. Accordingly, I rule that the evidence is inadmissible. 43 This makes it unnecessary to consider the second and third objections raised by the Respondents. 44 These are my reasons for the ruling on 13 March 2018. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. Associate: Dated: 27 March 2018 SCHEDULE OF PARTIES SAD 275 of 2016 Respondents Fourth Respondent: VISIBLE TEMPORARY FENCING (SA) PTY LTD (ACN 166 193 264) Fifth Respondent: VISIBLE TEMPORARY FENCING (WA) PTY LTD (ACN 166 633 647) Sixth Respondent: VISIBLE TEMPORARY FENCING (QLD) PTY LTD (ACN 167 335 239) Seventh Respondent: VISIBLE TEMPORARY FENCING (NT) PTY LTD (ACN 167 335 220) Eighth Respondent: VISIBLE TEMPORARY FENCING (TAS) PTY LTD (ACN 601 303 431) Ninth Respondent: VISIBLE TEMPORARY FENCING (VIC) PTY LTD (ACN 603 517 684) Tenth Respondent: VISIBLE TEMPORARY FENCING (NSW) PTY LTD (ACN 604 689 296) Eleventh Respondent: STATUS SHOP MAINTENANCE PTY LTD (ACN 118 110 928)