Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd

Federal Court of Australia|1997-03-07|Before: Black CJ, Sackville JJ, Northrop J

The applicant is not a party to the proceedings below. Leigh-Mardon Pty Ltd ("Leigh-Mardon") is the applicant in those proceedings, to which there are eleven respondents (to whom we refer as "the respondents"). The tenth "respondent" comprises two individuals, while the first to ninth are companies. Leigh-Mardon is claiming relief in respect of the sale to it by the second to ninth respondents of a business conducted under the name "Keydata", involving the performance of data entry work. Leigh-Mardon alleges, inter alia, that the Keydata companies overcharged clients, with the consequence that Leigh-Mardon paid an amount greatly in excess of the true value of the business acquired by it. The activities of the Keydata group have attracted the attention of the Victoria Police who, for a period of nearly four years, have been investigating possible criminal offences by persons involved in these activities, including the two individuals referred to above. The Judgment Below The judgment delivered by Northrop J on 7 November 1996 related to two subpoenas directed to the applicant. Those subpoenas were issued at the request of the respondents (or, at least, at the request of those that remained parties), pursuant to the Federal Court Rules ("FCR"), O.27, r.6. The subpoenas sought, inter alia, the production of written statements made to the Victoria Police by a number of named persons for the purposes of the Keydata criminal investigation. The respondents claimed that they required the statements for legitimate forensic purposes in connection with their defence of the civil proceedings. It was common ground that the statements were made by former employees or associates of the Keydata group. The applicant resisted the production of the statements sought in the subpoenas on several grounds, including that of public interest immunity. The applicant submitted to Northrop J that production of the statements would prejudice the ongoing investigation and would be a matter of concern to the persons who had given the statements. Northrop J declined to find, on the evidence before him, that "there ha[d] been established the existence of a public interest immunity sufficient to release the person subpoenaed from producing the documents". Accordingly, his Honour concluded that the claim for public interest immunity failed and he ordered that the applicant produce the statements sought in the subpoenas to the Court. The Contentions The applicant apparently took the view that he was entitled to appeal as of right and did not need leave to appeal. However, he filed a notice of motion the day before the hearing seeking leave to appeal, if the Court considered that leave was required. No affidavit was filed in support of the motion. Neither the amended notice of appeal nor the notice of motion seeking leave to appeal joined Leigh-Mardon. Leigh-Mardon did not appear on the hearing of the application for leave to appeal.

Mr Weinberg QC, who appeared with Mr Hayes QC and Mr Shirrefs for the respondents, submitted that leave to appeal was necessary, since the judgment of Northrop J was interlocutory in character: Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") , s.24(1A). He further submitted that this was not an appropriate case for the grant of leave within the principles laid down by the Full Court in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. On the other hand, Mr Nash QC, who appeared with Mr Scarfo for the applicant, submitted that the order appealed from was one that finally decided the only dispute between the applicant and the respondents. According to this submission, it was a final order and an appeal was available as of right. In the alternative, Mr Nash contended that if leave to appeal was required, it should be granted. At the conclusion of the argument on these questions, we reserved our decision on whether leave to appeal was necessary and, if so, whether leave should be granted. We took the view that the convenient course was to hear argument on the substantive issues raised by the appeal and we did so. However, we have concluded that leave to appeal is necessary and that it should be refused. Were the Orders Interlocutory? The Court has jurisdiction to hear and determine "appeals from judgments of the Court constituted by a single Judge": Federal Court Act, s.24. In the case of "an interlocutory judgment", leave to appeal is required from the Court or a judge: s.24(1A). "Judgment" is defined to mean a "judgment, decree or order, whether final or interlocutory, or a sentence": s.4. The term "interlocutory" is not defined. It has been said that "[t]he question whether a judgment is final or interlocutory for the purpose of the rules relating to appeals is one productive of great difficulty": Carr v Finance Corporation of Australia (No.1) (1981) 147 CLR 246 ("Carr"), at 248, per Gibbs CJ. But it may now be taken to be settled that the test for determining whether a judgment is final, as distinct from interlocutory, is whether the judgment finally determines the rights of the parties to proceedings: Lieul v Corney (1976) 50 ALJR 439, at 444; Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 (H Ct) ("Computer Edge"); Carr, at 248; Arrowcrest Group Pty Ltd v Gill (1993) 46 FCR 90 (FCA/FC), at 100-101. In applying this test, the court must have regard to the legal rather than the practical effect of the judgment, so that the question is whether the judgment finally determines, in a legal sense, all the rights of the parties that are in issue in the proceedings: Carr, at 248; Computer Edge at 768. In The Queen v Gray; Ex parte Marsh (1981) 157 CLR 351, subpoenas were issued at the request of a party to proceedings in the Federal Court, pursuant to FCR, O.27, r.6. The subpoenas were directed to a stranger to the proceedings, who moved to set them aside, pursuant to FCR, O.27, r.9. It was held by the High Court that the issue of the subpoenas to the stranger, and the application to set the subpoenas aside, were steps in the Federal Court proceedings. The Court rejected an argument that the setting aside of the subpoenas constituted an order made in a separate proceeding commenced by the issue of the subpoenas themselves: see at 362, per Gibbs CJ, with whom Mason, Wilson and Deane JJ agreed. The earlier case of Marsh v Adamson (1985) 9 FCR 408 (FC), at 417-418 is to the same effect. It would seem to follow that, if a subpoena is issued to a stranger to existing proceedings, and, as occurred in the present case, an order is made requiring the stranger to produce documents to the Court, the order does not "finally determine the rights of the parties" for the purpose of the notion of a "final" order. In Commonwealth v Northern Land Council (1991) 30 FCR 1 (FCA/FC), the Court considered an appeal by the Commonwealth from an order for the confidential inspection by legal representatives of the parties of notebooks recording discussions at Cabinet meetings. The matter came before the Full Court as a motion for leave to appeal and leave was granted at the outset. However, the Court (at 15) said this: "There was some debate about whether leave was in fact necessary, but the court was satisfied that the decision in question had the formal character of an interlocutory rather than a final decision. It nevertheless accepted that there was a critical element of substantive finality in the decision in that once the documents were disclosed, the disclosure could not be recalled."

Commonwealth v Northern Land Council did not involve a subpoena issued to a stranger to the proceedings. However, the Court appears to have taken the view that an order for inspection of documents in the possession of a party does not finally determine the rights of the parties in issue in the proceedings, for the purpose of the distinction between final and interlocutory orders. Clearly, an order for production of documents by a stranger to proceedings does not do so either. In Attorney-General for New South Wales v Stuart (1994) 34 NSWLR 667 (NSW CCA), it was held that an order that a stranger to proceedings produce documents to the Court, following rejection of a claim of public interest immunity, was "an interlocutory order within the meaning of s.5F [of the Criminal Appeal Act 1912 (NSW)]". Hunt CJ at CL said this (at 673): "An order to a stranger to the proceedings that documents be produced to the court following the rejection of a claim of public interest immunity is one which commands the stranger to do something. It may be entered in the court record, and action may be taken upon it in the event that it is disobeyed. For myself, I have no doubt that it is an interlocutory order within the meaning of s.5F." See also at 689, per Smart J. While the debate in that case centred on whether the court below had made an order, the members of the Court clearly regarded the order as interlocutory in character. In Goldberg v Ng (1994) 33 NSWLR 639 (CA), at 669C, Clarke JA assumed that an application for leave to appeal was a necessary precursor to an appeal by a non-party who had unsuccessfully applied by motion to set aside a subpoena to produce documents served upon it. Reference was made in argument to Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No.3) (1996) 64 FCR 55 ("Allstate (No.3)"). There Lindgren J. granted an injunction to restrain a party permanently from exercising what was described as an independent right, granted by a United States statute, to depose a potential witness. His Honour held (at 58-59) that this relief should be regarded as a final order. Allstate (No.3) is, however, distinguishable from the present case. The order was made at the suit of one party to the proceedings against another. The order permanently restrained the latter from exercising a right conferred independently by a United States statute. Lindgren J observed that the order might have been classified differently if the right at issue was an incident of the procedures governing the proceedings. In substance, the order was regarded as finally determining an independent right at issue in the proceedings between the parties. It seems to us that, consistently with the authorities to which we have referred, the word "interlocutory" in the present context has been understood to bear a meaning by reference to the meaning of the word "final". The final orders to be made in proceedings No VG 346 of 1993 will be orders which will finally determine the rights of the parties to those proceedings in relation to the issues presented for decision in them. In contrast, a decision in relation to a subpoena, the issue of which is a procedural step in the existing proceedings provided for by the rules of court governing them, seems to us to be a paradigm case of an interlocutory judgment. There are sound policy reasons to support classification of the orders made by Northrop J as interlocutory in character. If Mr Nash's argument were correct, every stranger to proceedings required to produce documents to the Court in the course of those proceedings would be entitled to appeal to the Full Court as of right (cf Mason J's description of a "steady stream of appeals...from orders on applications to set aside default judgments" as "by no means an inviting prospect" in Carr, at 256). This would be so, as Mr Nash acknowledged, even if the stranger was effectively in the camp of one of the parties and was represented by the same legal representatives. Similarly, if copies of the same document were in the possession of a party and a non-party, it would be odd that an order against a party to produce it should be interlocutory while the same order against the non-party should be final. It may well be appropriate for an appellate court to review an order by a trial Court for a stranger to the proceedings to produce documents. However, like appeals in relation to other matters arising in the course of proceedings, an appeal from such an order should be subject to the process provided by the leave requirement specified in s.24(1A) of the Federal Court Act. Should Leave Be Granted? Given that the applicant requires leave to appeal from the orders made by Northrop J, we do not consider that this is an appropriate case for the granting of leave. The evidence before Northrop J, which was not supplemented on the leave application, showed that the likelihood is that the criminal investigation will be complete by the end of March 1997. If criminal charges are laid against some of the respondents, the practical outcome, because of the procedural requirements of Victorian criminal law, is likely to be that the respondents will receive the witness statements. If charges are not laid and the investigation is complete, it may well be that the respondents could obtain the witness statements under the provisions of the Freedom of Information Act 1982 (Vic): cf Sobh v Police Force of Victoria [1994] 1 VR 41. In any event, the thrust of the applicant's case before Northrop J was that disclosure of the witness statements to the respondents would prejudice the ongoing investigation. Since the evidence indicates that the investigation will probably be complete in a matter of weeks, it is difficult to see how the orders made by Northrop J could involve substantial injustice, even if they were wrongly made. This comment should not, however, be taken as indicating that we have formed the view that Northrop J was not entitled to make the orders which he made. While it is not necessary to express any final view, it is enough to say that, having heard the substantive argument, we are not persuaded that his Honour made any error of principle. We view the case as depending on its own facts. We make one further comment. As we have pointed out, the notice of appeal filed on behalf of the applicant named him as appellant. There is some doubt whether a non-party to proceedings in the Court has a right of appeal to the Full Court pursuant to s.24(1) of the Federal Court Act: Emanuele v Australian Securities Commission (1995) 63 FCR 54 (FCA/FC). Moreover, a question might have arisen whether Leigh-Mardon should have been joined as a party on the appeal, on the basis that it is a party to the proceeding affected by the relief sought in the notice of appeal: FCR, O.52, r.14(1). In view of the conclusion which we have reached, it is not necessary to address these issues. Conclusion The result is that the application for leave to appeal should be dismissed with costs. I certify that this and the preceding 10 pages are a true copy of the Reasons for Judgment of the Court. Associate: Dated: 7 March, 1997 Heard: 4 March, 1997 Place: Melbourne Decision: 7 March, 1997 Appearances: Mr P.G. Nash QC with Mr M.A. Scarfo of counsel, instructed by Victorian Government Solicitor, appeared for the applicant. Mr M.S. Weinberg QC with Mr P.R. Hayes QC and Mr S.A. Shirrefs of counsel, instructed by Jerrard & Stuk, Solicitors, appeared for the respondents.

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