New South Wales Supreme Court CITATION : Application concerning Section 80 of the Supreme Court Act and Sections 119 and 128 of the Evidence Act [2004] NSWSC 614 HEARING DATE(S) : Suppressed JUDGMENT DATE : 1 July 2004 JUDGMENT OF : Brownie AJ at 1 DECISION : Order made for limited publication. CATCHWORDS : Practice and procedure - proceeding in closed court - publication of reasons for rulings on questions of law decided in closed court. - Evidence - privilege - common interest privilege. - Evidence - privilege - privilege against self-incrimination. David Syme Limited v General Motors Holden Limited [1984] 2 NSWLR 294 R v Bikic (2001) NSWCCA 537 at 15 British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 191 Douglas v Hello! Limited [2003] EWHC 55 at 86 CASES CITED : Accident Insurance Mutual Holdings Limited v McFadden (1993) 31 NSWLR 412 at 430 Ex parte P re Hamilton (1957) 74 WN(NSW) 397 at 399 Farrow Mortgage Company Pty Limited (In Liquidation) v Webb (1996) 39 NSWLR 601 at 612 DSE (Holdings) Pty Limited v InterTAN Inc (2003) 203 ALR 348 State of South Australia v Peat Marwick Mitchell (1995) 67 SASR 72 at 77 United States Surgical Corporation v Hospital Products International Pty Limited , extracted in Ritchie's Supreme Court Practice at 13023 PARTIES : Suppressed FILE NUMBER(S) : SC 13177/02 COUNSEL : Suppressed SOLICITORS : Suppressed IN THE SUPREME COURT OF NEW SOUTH WALES COMMOM LAW DIVISION BROWNIE AJ 1 July 2004 13177/02 – Application concerning Section 80 of the Supreme Court Act and Sections 38 and 128 of the Evidence Act JUDGMENT 1 HIS HONOUR: On an earlier occasion another judge made an order that the present proceeding be conducted in closed court. In the course of the hearing a number of questions were raised about the admissibility of evidence and I gave various rulings concerning these questions. At the conclusion of the hearing, counsel for one party made an application that the reasons I gave in respect of some of these rulings be treated as having been made in open court: in effect, that I now republish the rulings or at least edited versions of them. It was submitted that the rulings were all on questions of law and that the public had an interest in knowing of those rulings. 2 Other counsel made submissions to the effect that since the proceedings had taken place in closed court, and the rulings had been given in closed court, the rulings should not be made public, or at least should not be made public yet. 3 It is a fundamental feature of our legal system that curial proceedings take place in open court except in the most exceptional of cases. Section 80 of the Supreme Court Act now governs the position in this court. In this case, one of the exceptional ones, there was an order that the proceeding take place in closed court. 4 The rulings now in question were rulings about evidence given during the hearing and, therefore, given in closed court. They do not constitute judgments of the court or any final rulings in relation to proceeding. Nevertheless, there are powerful policy reasons why, as a general proposition, the reasons for the rulings should be made public if it is possible to do so, without undermining the reasons that lay behind the making of the earlier order that the proceeding take place in closed court. 5 The decision in David Syme Limited v General Motors Holden Limited [1984] 2 NSWLR 294 concerned the content of the order and the reasons for judgment to be published on an interlocutory application in a case concerning the alleged disclosure of confidential information, so that it is different to the present case. What arose in this case, so far as is presently relevant, was that there were questions raised about the admissibility of particular questions. 6 The submission of counsel was that the questions were of general importance concerning, as they do, not just questions of fact in the present case, but questions of law potentially applicable to future cases. 7 The submissions to the contrary may be summarised for present purposes by saying that assuming this to be so, either the reasons for the rulings should not be published at all, or that they should not be published until some time in the future, difficult if not impossible to fix now, or that they should be published only in some form that effectively does not disclose the names of the parties or identify the witness in question or identify the substance of the evidence of that witness or even the subject matter of his evidence. 8 Repeating that David Syme is a different case, I consider that some guidance can be obtained from what was said then. At 301 Street CJ said: "I turn finally to the non-disclosure of the terms of the order. Here again, I find it almost inconceivable to contemplate a case in which there should be a total black-out upon the terms of the order. Important as it is that proceedings and reasons should be heard and stated in public, it is even more important that the solemn formality of a curial order should be capable of publication. To admit to exceptions to this requirement is a far-reaching step. It affects not merely the individual against whom the order may be made. The public itself has a right to know what orders are being made by courts and it is incumbent on judges so to formulate their orders as to give effect to this right." 9 At 307 Hutley AP said: "That there is jurisdiction to prohibit the disclosure of a judgment is not in dispute, but what is in dispute is whether every aspect of this judgment should be prohibited from disclosure. This litigation is part of a systematic campaign, no doubt justifiable, being waged by the respondent against the media in many jurisdictions. This order may be used as a precedent. The complete suppression so that all aspects of the judgment are only known between the parties, in my opinion, is so extreme as to involve a genuine question of principle, which this Court should itself consider, namely, whether a judge errs in making an order which excludes his judgment from public knowledge beyond the extent that such disclosure might endanger confidentiality which a party is entitled to have protected by the order itself." 10 At 311 Samuels JA said: "I agree with Hutley AP that a judge should, in circumstances of the kind which obtained here, do everything possible to explain in his judgment what has occurred ..." 11 In the present case, counsel pointed to reasons based upon factual considerations that are recorded in the transcript, and that I need not mention now, as to why there should be no publication of the reasons for rulings previously given. Given that an order was made earlier that the proceeding take place in closed court, I say only that it has not been established that the reasons that lay behind the making of the order for the proceeding to take place in a closed court should not be regarded as being no longer influential, but that there is an overriding need for all orders of the court and the reasons for those orders to be made public, except to the extent, in this case, that section 80(b) of the Supreme Court Act points to the contrary - that is, that the publication of the reasons given in relation to the rulings on evidence, and in that sense the presence of the public when learning of those rulings and the reasons for them, will defeat the ends of justice. 12 One argument that was advanced seems to me to be cogent. A large number of lawyers were present in court when I gave the rulings so that they are aware of them. If one of them encounters a case in what I held would be regarded as a persuasive or even a binding precedent, what is that lawyer to say to the next court? 13 I consider that it is possible to publish edited versions of the reasons that I gave for the rulings in question - that is, versions edited to remove references to the identities of the parties and the witness, or to the evidence otherwise given on the proceeding - and I propose to do that. I will stay the publication for 14 Days to enable anyone concerned to take whatever action might be advised to continue the stay or to overrule my present ruling. 14 One of the rulings that I gave on 28 June, recorded in the passage commencing at page 4, line 45, of the transcript, might, I think, be published now without harm to anyone. There is nothing in that passage which seems to need protection. On the other hand, that passage will not make much sense to the reader if it is published now and it might as well be published later, together with the other rulings. 15 What I propose to do, therefore, is edit the transcripts of the rulings in the way I have mentioned and to then publish them. The first ruling 16 Objection was taken to the question asked of Mr X on the ground that the answer to the question may tend to prove that he had committed an offence against or arising under an Australian law or a law of a foreign country. Before that question was asked, it had been established, sufficiently for present purposes, that Mr X was a solicitor employed by Company A and that in that capacity he had meetings with representatives of a firm of solicitors in London, which firm were the external solicitors acting for Company A. Mr Y evidently worked within that firm. 17 After giving evidence that Mr X had meetings with Mr Y, and had sought his advice from time to time, there was a question asked to which objection was taken: "What were the topics about which you sought advice from Mr Y?" 18 The objection has to be decided under the terms of section 128 of the Evidence Act 1995, and cases concerning the common law or the Fifth Amendment to the United States Constitution must be considered in this context: see R v Bikic (2001) NSWCCA 537 at 15 19 I accept that if it is necessary for a witness - in this case, Mr X - to take the relevant objection himself rather than to have counsel take it for him, then in the events that happened yesterday Mr X took the objection himself in a sufficient manner. 20 The test to be applied, initially, is under subsection (2) of section 128. The subsection provides: "Subject to subsection (5), if the court finds that there are reasonable grounds for the objection, the court is not to require the witness to give that particular evidence..." 21 It is no longer relevant to know whether a witness fears any consequence of answering a particular question objected to or what the consequences might be in the mind of a witness. The test is an objective one, in this case to be decided by me. 22 [One party] submitted that the test has to be satisfied by evidence and only evidence. I do not agree. What is required is that I be satisfied that there be reasonable grounds for the objection - that is, for a finding that the particular evidence under consideration may tend to prove that the witness has committed an offence against or arising under an Australian law or the law of a foreign country. 23 I do not have to be satisfied that an offence was committed, just that there are reasonable grounds for objecting on the ground that the evidence may have the tendency to prove that. 24 There must, of course, be some material upon which courts can be satisfied about these matters. The present hearing is taking place under the provisions of the Evidence on Commission Act 1995, following upon the receipt of a letter of request from a foreign court made under the provisions of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. In these circumstances, I consider that the letter of request may be examined to see what it is that the plaintiff alleges. 25 [A review of the material then before the Court is now suppressed, for the time being.] 26 In summary, the material I have mentioned shows, I think, reasonable grounds for concluding that if Mr X is required to answer the question put to him, in subsequent proceedings a court might find that, by reason of that evidence, he participated in a course of conduct intending to destroy documents that, if not destroyed, would be capable of being used and would be likely to be used in litigation, that litigation being then not pending but expected. 27 That leads to the question of whether provisions of section 128 are triggered. It was suggested on Mr X's behalf that the evidence, if permitted, would tend to incriminate him on a charge under either section 317 or 319 of the Crimes Act 1900. Section 317 provides relevantly: "A person who with intent to mislead any judicial tribunal in any judicial proceeding destroys anything knowing that it is or may be required as evidence in any judicial proceeding is liable to imprisonment." 28 The definition of "judicial proceeding" is wide enough for any present purpose. 29 Section 319 provides, relevantly: "A person who does any act intending in any way to pervert the course of justice is liable to imprisonment." 30 Some of the conduct about which, I gather, the plaintiff intends to ask questions of Mr X involves conduct not just in New South Wales but also in Victoria and the United Kingdom. If the matter had to be dealt with in a court in the United Kingdom, the relevant law appears to be the common law concerning perverting the course of justice or perhaps attempting to pervert the course of justice. 31 In British American Tobacco Australia Services Ltd v Cowell [2002] VSCA191, the Victorian Court of Appeal said: "As indicated at the outset, it seems to us that there must be some balance struck between the right of any Company to manage its own documents, whether by retaining them or destroying them, and the right of a litigant to have resort to the documents of the other side. The balance can be struck, we think, if it be accepted that the destruction of documents before the commencement of litigation may attract a sanction other than the drawing of adverse inferences if that conduct amounts to an attempt to pervert the course of justice....certainly there can be an attempt to pervert the course of justice before a proceeding is on foot....the criterion for the court's intervention...is whether that conduct of the other party amounted to an attempt to pervert the course of justice...." 32 That passage was adopted as an accurate statement of the law by Vice-Chancellor Morritt in Douglas v Hello! Limited [2003] EWHC 55 at 86. That is, it seems to me that there are reasonable grounds for finding that the evidence which the plaintiff seeks to have Mr X give might tend to prove against him that he has committed an offence against either the law of New South Wales or the common law of the United Kingdom. If it is relevant, it might also offend against the statute law or the common law in Victoria. 33 Generally speaking, then, I conclude that to compel Mr X to answer the question may tend to prove the commission of some offence. 34 In Accident Insurance Mutual Holdings Limited v McFadden (1993) 31 NSWLR 412 at 430 Justice Clarke said, speaking of the common law: "The rule a witness is not compellable to answer questions where the answers would have a tendency to expose the witness to any kind of criminal charge, is one of great antiquity - see Taylor... Whether the answer may tend to incriminate the witness is a point which the court will determine under all the circumstances of the case as soon as the protection is claimed. It will do so without requiring the witness fully to explain how the effect would be produced for if this were necessary, the protection which the rule is designed to afford to the witness would at once be annihilated. " 35 In a number of other cases - for example, Ex parte P re Hamilton (1957) 74 WN (NSW) 397 at 399 - the expression has been used: "A question which at first sight might appear a very innocent one might, by affording a link in the chain of evidence, become a means of bringing home an offence to the witness." 36 That seems to me to be the fact here. To compel Mr X to answer the question asked of him might perhaps provide a link, and it might serve to annihilate the defence of privilege which section 128 otherwise gives him. 37 The remaining question, then, is what I should do now. The plaintiff submitted that I should direct Mr X to answer the question but give him a certificate under subsection (5). I do not think that is appropriate because a certificate under the Evidence Act of New South Wales, which is the Act regulating the present hearing, would have no effect outside New South Wales. 38 One of the risks to which he would be exposed, if he answered the question, would be of prosecution in the United Kingdom. I propose, therefore, to uphold the objection and to tell Mr X that he need not answer that question. The second ruling 39 The plaintiff has tendered document 107A of the bundle, a copy of a fax dated 12 February 1998. Separate objections have been taken by each of Company B and Company C. 40 Each objection was taken under the provisions of section 119 of the Evidence Act 1995, which is in the following terms: "Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding...or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party." 41 To paraphrase section 119(a) sufficiently for present purposes, the tender of the fax must be rejected if its admission into evidence would result in the disclosure of communication of the kind mentioned, made for the dominant purpose mentioned. 42 There are, I think, six different communications that need to be considered. First, an oral communication between an unidentified person, some representative of … (solicitors), and a second unidentified person, a partner in … (solicitors). That firm was acting for Company C in litigation brought by … against Company C and Company B, and possibly other companies. 43 Second, a communication, probably oral, between the second unidentified person just mentioned and Mr …, one of his partners. 44 Third, a letter from Mr … to Ms … of, … the solicitors for Company B in the earlier litigation. 45 Fourth, a communication, probably written, or at least conveying a copy of the third communication, from [Ms …] to Mr X or to Company B. 46 Fifth, the fax in question, which was directed to two named persons, each of them an in-house lawyer for Company A. 47 Sixth, the fifth communication was also sent by fax to Mr … , the chief executive officer of Company B. 48 The first of these communications might have been of a without prejudice nature, but it was not protected by section 119 and it can be put out of consideration at this stage. The third communication does not seem to me to be protected by section 119. It was submitted that there was a common interest privilege that arose within the meaning of the legislation in that Company C and Company B had a common interest in the earlier litigation. I do not accept this as correct. 49 In the earlier litigation, Company C and Company B were sued, it seems, on the basis that they were several tortfeasors. I consider that litigants sued as several tortfeasors should be regarded as being within the description of persons whose interests in the relevant question are selfish and potentially adverse to each other: see Farrow Mortgage Company Pty Limited (In Liquidation) v Webb (1996) 39 NSWLR 601 at 612. 50 Going back, then, to the second communication, between Mr … and his partner, I accept that this communication was originally privileged but consider that the privilege was waived by the making of the third communication, at least to the extent that something is disclosed now in document 107A. More may have been communicated than is recorded there, but the admission into evidence of document 107A will not result in the disclosure of that. 51 Similarly, I accept that the fourth communication between Ms … and Company B and/or Mr X was originally privileged: see DSE (Holdings) Pty Limited v InterTAN Inc (2003) 203 ALR 348, particularly at 38 and 51. 52 The real question now seems to be whether that privilege survives. It is clear from the fax now tendered that it cannot be said that Mr X did no more than just forward on a copy of the letter, the third communication. Rather, he made observations as to the potential effect of the termination of the earlier litigation. By itself, this seems to constitute the provision of professional legal services by him to Company B, if not to Company A, relating to some proceeding or proceedings, actual or anticipated. I do not think it is necessary to analyse the detail of this. 53 The question then arises whether the fifth communication was made for the dominant purpose mentioned in the section. Mr X said that the purpose of his fax was to provide a legal update. On the face of the fax, it was directed not to Mr X's client, Company B, but to named officers of Company A, and it was merely copied to Company B by means of what I have called the sixth communication. 54 I do not think that this means that I could hold that the dominant purpose of the preparation of the fifth communication was to provide the client Company B with professional legal services. However, Company B contends that there was a common interest privilege created or preserved as between Company B and Company A. At the time, Company A was a significant shareholder in Company B. There is no authority that is directly binding upon me in relation to the question whether a common interest privilege exists in these circumstances. 55 However, the analysis of Sheller JA in Farrow at 609 to 612 points towards the existence of such a common interest privilege, and the decision of Justice Olsson in State of South Australia v Peat Marwick Mitchell (1995) 67 SASR 72 at 77 supports the submissions of Company B, and I accept them. I therefore reject the tender of document number 107A. It is not necessary, then, to consider the effect of section 119(b). 56 Next, the plaintiff tendered document 111 in the bundle, a letter from Company B to Ms … dated 9 March 1998 and enclosures. 57 On the face of the letter, it and its enclosures were the subject of client legal privilege within the meaning of Part 3.10 of the Evidence Act. However, the plaintiff submits that the privilege has been lost because the document was tendered in evidence in the proceedings brought by … against Company B in the Supreme Court of Victoria. Therefore, it is said, the document having been tendered and received into evidence, the plaintiff, which was a stranger to that litigation, is entitled to use the document notwithstanding that the Court of Appeal of Victoria allowed the appeal from the judgment at first instance: see [the decision in that case]. 58 I accept the submissions of Company B that the judgment of the Victorian Court of Appeal dealt relevantly for present purposes with two separate topics. The first related to the use that the earlier plaintiff and those associated with her might make of documents that had been produced by Company B pursuant to the coercive powers of the Supreme Court of Victoria. 59 A party in the position of the earlier plaintiff, having had documents produced in this way, is in a position of advantage or privilege as compared to the rest of the world. She has obtained access to what would otherwise have been the confidential documents of her opponent, but that advantage or privilege carries with it a disadvantage or qualification, in that she may only use the documents so produced to her for the purposes of the litigation in which the documents were produced, unless she obtains the leave of the court to use them otherwise. 60 That qualification leaves her in a position of relative disadvantage to the rest of the world, in that whilst the rest of the world might make use of the documents produced once the documents have entered the public domain - for example, being tendered successfully into evidence or quoted in a judgment - she may not do so without leave. 61 The second topic concerned the question whether, in the earlier case, Company B had waived the legal professional privilege that it formerly had in respect of some of the documents. The Court of Appeal ruled that Company B had waived the privilege, but only for the limited purpose that it identified. 62 On this analysis of the judgment it follows, Company B submitted, that the document now tendered remained the subject of legal professional privilege or client legal privilege. Whilst Company B had waived privilege for a limited purpose in the earlier case, that was presently irrelevant. Apart from the limited waiver, privilege persisted and neither the plaintiff nor anyone else was entitled to tender the documents. 63 [Another party] referred to the decision of McClelland J, as he then was, in United States Surgical Corporation v Hospital Products International Pty Limited, 13 October 1981, extracted in Ritchie's Supreme Court Practice at 13023, where his Honour referred to the effect of deploying privileged material in court, but I do not think that his Honour was discussing the question now debated. 64 I conclude that there was a common interest privilege as between Company A and Company B, and that Company B is entitled to successfully claim that the document is still privileged. There was a waiver of the privilege but only for a limited purpose. The fact that [another party] has a copy of the document - and I do not at this stage know how it obtained it - seems to me to be irrelevant. As I see the position, Company B is entitled to maintain its privilege. I therefore reject the tender of document 111. ********** Last Modified: 07/26/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.