Should leave to appeal be granted?
22 In Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399 a Full Court of this Court said that the approach discussed by the Full Court of the Supreme Court of Victoria in Niemann v Electronic Industries Ltd [1978] VR 431 provides "general guidance which a court should normally accept" when considering whether to grant leave. That approach involves two tests. First, whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the appellate court and, second, whether substantial injustice would result if leave were refused, supposing the decision to be wrong. Further, the Full Court in Décor noted (ibid) that the two tests bear upon each other so that the degree of doubt which is sufficient in one case may be different from that required in another. Implicit in that statement is the possibility that quite a slight degree of doubt would be sufficient in a particular case if the consequences of a wrong decision remaining unreversed were very serious.
23 A further relevant consideration, as the Full Court noted in Décor at 400, is whether the judgment below was in a matter of practice and procedure. In Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 Gibbs CJ, Aickin, Wilson and Brennan JJ repeated with approval the "oft-cited statement" of Sir Frederick Jordan in In re The Will of F B Gilbert (deceased) (1946) 46 SR (NSW) 318 at 323 as follows:
"… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."
24 While the judgment below did not involve the exercise of a discretion (indeed, as will be seen, we reject one of ABB's arguments which suggested that in some respects it did) the observations of Sir Frederick Jordan are as compelling now as they were over half a century ago. The present case involved a hearing before Emmett J extending over six days. Three senior counsel and six juniors appeared. His Honour delivered a forty-seven page reserved judgment carefully analysing the different categories of documents and the settings in which they were produced by the various parties. As already noted, ABB were partially successful. ABB have had a very fair opportunity to ventilate their complaints about privilege in the forum which Parliament has designated as the usually appropriate one for disputes about matters of practice and procedure.
25 As often happens in applications for leave, it was not practicable to separate the arguments on the leave issue and then proceed to a subsequent hearing on the substantive appeal if leave is granted. Rather the parties presented at the same time their arguments on leave and also what would be their arguments on the appeal. In such a setting there is always a risk that attention will be concentrated on the substantive arguments as to the correctness or otherwise of the judgment below. However Décor makes it clear that one possibility is that leave will be refused even though the judgment is shown to be wrong.
26 What then is the substantial injustice which ABB would suffer if his Honour's decision, insofar as it upholds privilege, is wrong but remains unreversed? The only basis suggested is that ABB would not obtain access to some documents relating to statements previously made by witnesses to be called by the Commission at the trial. It is entirely speculative as to whether such material would be at all forensically helpful to ABB, as for example constituting prior inconsistent statements. It is further a matter for speculation as to whether such an advantage would affect the final result. ABB are thus at two removes from establishing that they will be deprived of substantive rights.
27 In one sense, for a party to be subjected to an erroneous decision is necessarily an injustice. Moreover, since rules of practice and procedure are usually made for good reason, it might be said that a wrong decision as to the application of such a rule is likely to produce injustice which is not trivial or inconsequential. Nevertheless the statement in Gilbert wisely accepts that there will necessarily be, in matters of practice and procedure, wrong decisions made which would be set aside if there were an appeal as of right, but there is a greater public interest in keeping litigation within reasonable bounds (especially when the litigants are well-resourced) which outweighs any such injustice.
28 In any event, we are not persuaded that his Honour's judgment is attended with sufficient doubt. Since we are dealing with the arguments in a leave context our reasons will be brief. (In some intermediate appellate courts the general practice is that no reasons at all are given for the grant or refusal of leave: see for example in relation to the New South Wales Court of Appeal Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd (No 2) (1990) 21 NSWLR 200 at 215, 218.)
29 As to without prejudice privilege it was argued that his Honour did not draw any distinction between admissions and statements of objective facts. Reference was made to Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291-293 and Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69 at 72-74. However the circumstances clearly supported his Honour's conclusions to the effect that the drafts of the agreed statements of facts and communications in relation thereto were for the purpose of achieving a compromise of the proceedings. An essential element of such a compromise was the production of a statement of agreed facts. If in such a context a party says "I would be prepared to admit facts A, B and C", that is clearly a matter of negotiation, as distinct from an assertion of an existing fact. The very nature of such negotiations make such assertions "hypothetical, conditional or tentative": see Davies v Nyland (1975) 10 SASR 76 at 91.
30 Next it was argued that his Honour did not reveal any consideration being given to ABB's contention that the documents were provided "on an open basis without any qualification as to their use". As Gleeson CJ, McHugh and Gummow JJ have recently observed, the fact that a judge does not refer to an argument of the losing party is not in itself a ground for reversing the decision: Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62].
31 This argument led to some discussion about the meaning to be attributed to the word "open" in the Commission's letter of 14 July 1999. Where the word first appears in paragraph (a)(iv) we think it is used as a term of art meaning not without prejudice. As such it would refer to the report which the Commission was requesting within the space of a few weeks. Where next appearing ("material provided by Alstom and its officers must be complete, accurate, truthful and open") we think it is used in the non-technical sense of candid and frank. But in any event we agree with his Honour's characterisation of the co-operation agreement as an arrangement relating to the investigative stage of the Commission's initial investigation. The documents were obtained after Alstom's penalty hearing and were clearly primarily for the purpose of the continuing litigation against ABB.
32 On its face, the cooperation agreement was spent once the investigation phase had concluded and the admitting respondents were negotiating an agreed statement of facts. In any case, even if the parties, or some of them, thought the co-operation agreement might have still been in operation, what is important as his Honour found was the dominant purpose.
33 Next it was said that his Honour's decision as to without prejudice privilege was "a mere statement of conclusion without analysis" and contained "only limited consideration of the governing principles". We think, however, that his Honour's reasons provided a careful analysis of the documents in question and cogent reasons for finding that the respective privileges either did or did not apply. The relevant legal principles were not in dispute. His Honour did not embark upon a dissertation as to the law of privilege. But this was not called for.
34 Then it was argued that the rejection of ABB's application for access followed automatically from the holding that the documents were subject to without prejudice privilege "without any exercise of the discretion as to whether access should be granted in any event". This argument is misconceived. There are of course circumstances in which considerations of fairness might make it inappropriate to apply the privilege. Some examples are given by Lord Griffiths in Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1300. And, no doubt, such categories are not closed. But this is not to say that the law confers a general discretion to grant or withhold without prejudice privilege.
35 We were not directed as to any proper basis upon which without prejudice privilege, if otherwise established, should be withheld. Of course the Commission seeks in these proceedings, as ABB pointed out, very large pecuniary penalties. The consequences for ABB are potentially severe. Nonetheless major litigation usually has severe consequences for the losing party and that in itself is no ground for abrogating privilege. It was said that the Commission was required to conduct the prosecution as a "model litigant" by virtue of the Attorney-General's Legal Services Directions. That may be so, but claiming a well-established privilege, and having that claim upheld by a judge, is not unreasonable conduct for a litigant, whether model or otherwise.
36 Also as to without prejudice privilege it was contended that the privilege did not extend to the Commission because no admissions had been made by it. The rationale of the rule, it was argued, was that it was to protect parties who had made admissions. However it is clear that without prejudice privilege is a joint privilege applicable to both parties to the negotiations: Cross on Evidence (6th Australian Edition) at [25350]. Moreover the privilege continues to subsist notwithstanding that the negotiations have succeeded and a settlement has been reached: Rush & Tompkins at 1300.
37 In relation to legal professional privilege it was said that his Honour did not address the "threshold requirement" of confidentiality. But we were not directed to any evidence to show that the documents in question were not confidential. Given a finding, which was plainly open, that the documents were produced for the dominant purpose of use in litigation, it would usually follow that confidentiality was implicit. His Honour was not obliged to deal with questions which were not in issue.
38 It was said that his Honour did not address the fact that the documents over which the privilege was held to exist has passed between opposing parties. However the claim for legal professional privilege was upheld in relation to draft statements and affidavits created after the proceedings had been resolved against the admitting respondents. It was not in the context of communications between opposing parties. Once the proceedings had been resolved against them the admitting respondents were not in the position of opposing litigants vis-ŕ-vis the Commission.