British American Tobacco Australia Limited v Gordon & Ors

Supreme Court of Victoria|2009-12-24|Before: KAYE J

PRACTICE AND PROCEDURE - Applications to deliver amended defences - Claims for injunction to restrain use of confidential information given by plaintiff to its solicitors - Documents containing information given to defendant - Intended use by defendant to re-open unsuccessful appeal to Court of Appeal - Defence that information discloses iniquity upon which defendant wishes to rely - Whether public interest defence recognised - Pleading of civil conspiracy between plaintiff and others as iniquity - Defence of public policy to claims based on contract - Adequacy of proposed pleading - Whether proposed pleading sufficiently particularised.

For the Plaintiff (British American Tobacco Australia Services Ltd)

1 In each of these proceedings, the third defendant makes application to file and serve an amended defence. A previous such application, on behalf of the third defendant, was refused by Byrne J in a ruling delivered by his Honour on 27 March 2009.[1]

2 The application is made by the third defendant in two proceedings. In the first proceeding (No 5617 of 2007) British American Tobacco Australia Limited ("BATAL") is the plaintiff, and the defendants are Mr Peter Gordon, Slater & Gordon Limited, and the third defendant, Mrs Roxanne Cowell. In the second proceeding (No 5618 of 2007) British American Tobacco Australia Services Limited ("BATAS") is the plaintiff, and Slater & Gordon Limited and Mrs Cowell are each the defendants. The claims against Slater & Gordon and Mr Gordon have been settled, and the sole defendant, to each proceeding, is now the third defendant, Mrs Cowell.

3 The background of these proceedings is set out in the previous ruling of Byrne J, and I shall not repeat it in detail. A short summary is sufficient for present purposes. The third defendant is the executrix of the estate of the late Rolah McCabe. In October 2001, Slater & Gordon issued proceedings on behalf of Mrs McCabe against BATAS, claiming damages for personal injury caused to her as a result of having been a smoker of cigarettes manufactured and distributed by BATAS and its predecessor. In March 2002, the trial judge (Eames J) made a ruling striking out the defence pleaded on behalf of BATAS, on the basis that BATAS had subverted the discovery process by its destruction of relevant discoverable documents. His Honour entered interlocutory judgment against BATAS. The jury awarded Mrs McCabe damages in the sum of $687,560, and the trial judge entered judgment in her favour for that amount, together with interest and costs. Subsequently, the appeal by BATAS against those decisions was successful, and the Court of Appeal set aside the judgment and directed a new trial.[2]

4 In those proceedings, Clayton Utz had been retained to act on behalf of BATAS. At the same time, Clayton Utz had been retained to act generally on behalf of BATAS, and to provide legal services to companies in the British American Tobacco Australasia group. Following the judgment at trial in the McCabe proceeding, Clayton Utz undertook an internal review in 2002 of the events, which were the subject of the trial judge's criticisms. In the course of that review, a number of documents were brought into existence and placed before the board of Clayton Utz. In the current proceedings, BATAS claims that the documents, which are the subject of this proceeding, include information which Clayton Utz received in circumstances of confidence from it. In the BATAL proceeding, the plaintiff similarly claims that other documents, created by Clayton Utz, contain information received in confidence by Clayton Utz from BATAL.

5 Subsequently, after completion of the review, Mr Christopher Dale, a partner of Clayton Utz, in September 2006, provided copies of the documents, which are the subject of these two proceedings, to Mr Peter Gordon, a partner of Slater & Gordon. In turn, Mr Gordon provided copies of those documents to a number of persons, including the third defendant, Mrs Cowell. In each of the two proceedings, the claim against the third defendant is pleaded in a similar manner. It is pleaded that the information contained in the documents is confidential to the plaintiff, and further or alternatively discloses communications between the relevant plaintiff and its legal advisors which are subject to legal professional privilege. In each case, the statement of claim pleads that the confidentiality of the information derived from fiduciary duties of the solicitors, and also from express or implied terms of the retainer of the solicitors by the plaintiff. It is pleaded that when Dale provided the documents to Gordon, he did so in breach of the contractual, equitable and professional obligations, which Clayton Utz, and he, as a member of Clayton Utz, owed to their client, and that Gordon, in receiving them, knew or ought to have known that that was so. The plaintiffs allege that, in receiving the documents, Gordon was acting as the solicitor for the third defendant, and as such the conduct of Slater & Gordon (and Gordon) should be attributed to the third defendant. It is thus pleaded that, by Gordon receiving the documents from Dale, Mrs Cowell knowingly participated in the breach by Dale of his contractual and equitable obligations to the plaintiff.

6 The defence in each proceeding relates, in a broad sense, to the effect of the destruction of documents, said to have been discoverable in the McCabe proceeding, by the plaintiffs, and evidence given in that case before the trial judge, and to the Court of Appeal, in relation to that matter. In each of the present proceedings, the third defendant, in one form or another, pleads that that conduct has the effect that the information, which is the subject of these proceedings, is not confidential, or, alternatively, that the plaintiffs are not entitled to bring proceedings against the third defendant to enforce the confidential nature of that information.

7 In the BATAL proceeding, the third defendant relies on six defences, pleaded in paragraphs 10.2 and 13.1. They may be paraphrased as follows:

(b) That the information was not privileged, the information disclosed the existence, or real likelihood of the existence of, a crime, fraud or civil offence, and the duties of confidence attaching to the information do not operate to preclude the use or dissemination of the information to a third party with a real and distinct interest in redressing the crime, fraud or civil offence;

(c) That confidentiality did not attach to information which was not privileged, and the use or dissemination of which was in the public interest;

(d) Confidentiality did not attach to information which was imparted for the purpose of facilitating or furthering the commission of a crime, fraud or civil offence;

(e) The professional duties of Clayton Utz did not operate to impose on the members of that firm an obligation to keep information confidential if an attempt by BATAL to restrain the dissemination of that information could be met by a defence of unclean hands.

(f) The professional duties of the members of Clayton Utz were subject to paramount obligations pleaded in paragraph 10.3 of the defence, namely, obligations of candour to the Court and similar professional obligations of legal practitioners.

8 Schedule 1 of the defence identifies each document held by the third defendant, and the information contained in that document, which the third defendant contends corresponds with the defences which I have just outlined. Paragraphs 14, 31.1 and 51 of the defence seek to link those six defences with the information in the documents set out in Schedule 1, using a code or index of different letters of the alphabet and numbers.

9 The crime or fraud, which is referred to in the defence, is spelt out in paragraphs 43 to 169 of the BATAL defence. Paragraph 46 pleads that BATAL, BATAS, Graeme Maher (the solicitor employed by BATAS), Robin Chalmers (a partner of Mallesons acting for BATAS), Brian Thomas Wilson (a partner of Clayton Utz acting for BATAS), Glenn David Eggleton and Richard Clayton Travers (each of whom were members of Clayton Utz acting for BATAL and BATAS), and "other persons not presently known to Mrs Cowell", in or from about 1999 agreed and combined, and thereby conspired:

(i) To conceal or destroy documents in their possession which would or might be prejudicial to any defence of BATAS and/or BATAL in proceedings which those parties (referred to as "the conspiracy parties") contemplated were likely to be, or might be, brought involving claims against BATAS and/or BATAL for damages for personal injury caused by smoking their products.

(ii) Not to disclose the identity of those documents, and the fact of their concealment or destruction, in the course of discovery to litigants in such contemplated litigation.

(iii) To conceal from prospective plaintiffs, and the courts in such contemplated litigation, the existence of such a conspiracy in combination, and the acts done in furtherance of it.

10 Paragraph 46A pleads that the conspiracy was made:

(a) With the sole or predominant purpose of injuring the prospective plaintiffs; and/or

11 Paragraph 47 of the BATAL defence pleads that pursuant to and in furtherance of the conspiracy, the conspiracy parties, between 1987 and 2002 (inclusive) did the following overt acts (which I summarise):

(a) BATAS and BATAL established and implemented document retention policies with the purpose of falsely providing an innocent explanation for the concealment or destruction of documents in their possession, which might be, or would be, prejudicial to any defence in the contemplated litigation.

(b) BATAS and BATAL destroyed documents for the purpose of depriving prospective plaintiffs, and the courts in contemplated litigation, of documents in their possession, which might be prejudicial to the defence of BATAS and/or BATAL in that litigation.

(c) The lawyers for BATAS and BATAL, namely Clayton Utz, established, and BATAS and BATAL funded, a database of tobacco related documents in preparation for anticipated tobacco litigation, in a manner which was contrived to ensure that the database would not appear to be within BATAS's or BATAL's possession, custody, power or control.

(d) BATAS and BATAL colluded to limit their discovery obligations and/or to prevent discovery in respect of prejudicial documents, and then colluded so as to avoid the appearance of collusion. As particulars of that allegation, an agreement referred to as "the Cremona agreement" is pleaded, in relation to litigation against BATAL by Mrs Cremona in the Supreme Court of Victoria.

(e) Pursuant to the Cremona agreement the lawyers acting for BATAS and BATAL subsequently entered into a further agreement, the objective of which was to conceal that they were cooperating in relation to discovery in the litigation.

(f) BATAS and BATAL subsequently agreed that in relation to documents, which were once in their possession but no longer in their possession, those documents would be discovered by a general description in affidavits of documents in the Cremona proceeding, and, in the event of challenge to that approach, the document retention policies could be relied upon by BATAS and BATAL.

(g) The database, and the documents disclosing its existence, were not discovered by BATAS and BATAL in the Cremona proceeding or in the McCabe proceeding.

(h) In September 1999, Travers proposed a strategy for BATAS and BATAL to cooperate on discovery strategies in another proceeding (the "Nixon proceeding") in order to limit their discovery obligations in that proceeding.

(i) BATAS and BATAL prepared for anticipated litigation at the same time as they destroyed documents.

12 As a further overt act, paragraph 47(j) pleads that pursuant to and in furtherance of the conspiracy, BATAS, Maher, Wilson, Chalmers and Eggleton engaged in acts which are alleged in paragraphs 55 to 169 of the defence. Those paragraphs are divided into five sections, each representing an alleged crime or offence committed by one or more of the members of the conspiracy pleaded in the defence. In brief compass, those overt acts consist of the following:

(1) An attempt to pervert the course of justice in the giving of evidence concerning discovery in the McCabe proceeding (paragraphs 55 to 86). Each of Chalmers, Travers and BATAS are alleged to be parties to that offence.

(2) An attempt by BATAS to pervert the course of justice by devising and implementing the document retention policy (paragraphs 116 to 121).

(3) An attempt by Eggleton to pervert the course of justice in evidence given by him in relation to the document retention policy in the McCabe proceeding (paragraphs 122 to 136). It is pleaded that BATAS aided, abetted, counselled or procured the commission by Eggleton of that offence, and accordingly is responsible for it.

(4) An attempt by Eggleton to pervert the course of justice in the McCabe proceeding by giving misleading evidence in that proceeding. It is alleged that BATAS aided, abetted, counselled or procured the commission by Eggleton of that offence, and is thus responsible for it (paragraphs 137 to 154).

(5) An attempt by Wilson and BATAS to pervert the course of justice, both by Wilson's role in the destruction of documents, and, subsequently, by submissions which he made, and evidence which he gave, to the Court of Appeal in the McCabe proceeding (paragraphs 155 to 169).

13 The BATAS defence is based on the same propositions as are contained in the BATAL defence, but it is differently constituted. In paragraphs 12, 13 and 13A, it is pleaded that the obligations of confidentiality of Clayton Utz to its client did not attach to the information, by reason of the first five of the six bases pleaded in paragraphs 10.2 and 13.1 of the BATAL defence. (See also paragraph 32C). Paragraphs 42 to 181 plead, in almost identical form, the same five crimes or offences alleged (as overt acts) in paragraphs 55 to 169 of the BATAL defence. Paragraphs 182 to 193 then plead the conspiracy, which is set out in paragraphs 43 to 46, of the BATAL defence.

14 In each of the two proceedings, the third defendant, in her defence, maintains that she intends to use the documents, which are the subject of the two proceedings, solely for the purposes of making an application, as executrix of the McCabe estate, to the Supreme Court of Victoria, or to the High Court of Australia, for orders setting aside the judgment and orders of the Court of Appeal in the McCabe proceeding of December 2002, and reinstating the judgment of Eames J at first instance in the McCabe proceeding. Thus, the basic issue in each case is whether the plaintiffs have the right to preclude Mrs Cowell from using the information, contained in the documents, in the application which she wishes to make in respect of the judgment and orders of the Court of Appeal.

15 In considering the application by the third defendant, in each proceeding, for leave to amend her defence, it is important to bear in mind the basic purposes served by pleadings in a proceeding such as this. First, the pleading must be so couched as to fairly inform the opposing parties of the matters upon which the defendant seeks to rely at trial. In other words, the pleading must put the opposing party on appropriate notice as to the issues being raised. Secondly, the pleading must be sufficiently precise so as to define adequately the issues in the case. In cases such as these, it is important that the pleadings define the issues with sufficient clarity, for the purposes of resolving interlocutory disputes in the case, and, significantly, in order to ensure that matters raised at trial are relevant to the issues between the parties. Thirdly, the proposed defences each contain allegations of criminality, fraud and serious wrongdoing against a number of persons, all but two of whom are not parties to the present proceeding. Serious allegations such as those must be pleaded with some precision and with sufficient supporting particularity.[3]

16 Further, an amended defence may only be permitted, if it discloses a triable answer to the claim by the plaintiff. However, an application for leave to amend a defence is not an occasion upon which the court ought to assess the merits or otherwise of the proposed defence. Provided that the proposed defence is not demonstrably futile or untenable, the court should not disallow it.[4]

17 In approaching the third defendant's application in each proceeding, I adopt the principles stated and applied by Byrne J in his previous ruling[5], including his Honour's helpful observations, in the concluding paragraph of his ruling[6], as to what appears to be the fundamental issues between the parties.

18 Both plaintiffs have submitted that there are a number of deficiencies in the manner in which, in each proposed defence, the third defendant seeks to allege the existence of the conspiracy, relied on. In particular, the following objections have been raised to that section of each proposed defence:

(1) The conspiracy claim now sought to be pleaded is not materially different to the allegations of conspiracy which were disallowed by Byrne J in his previous ruling.

(2) The objects of the conspiracy have not been adequately identified.

(3) The parties to the conspiracy have not been adequately defined.

(4) The essential elements of the tort of conspiracy, for the predominant purpose of injuring the plaintiff, have not been properly pleaded.

(5) The essential elements of the tort of conspiracy, to injure by unlawful means, have not been adequately pleaded.

(6) The overt acts relied on are not capable of supporting the existence of the alleged conspiracy.

(7) On behalf of BATAS, it is also submitted that the conspiracy claim serves no legitimate purpose in the BATAS proceeding.

19 In paragraphs 51 to 53 of his ruling, Byrne J held that the conspiracy claim, sought to be pleaded in the proposed amended defences then before him, was unacceptable because it was unspecific in a number of respects. The plaintiffs contend that the conspiracy claims, now sought to be pleaded in the proposed defences which are before me, are not materially different. For that purpose, I was provided with a table which compares the previous pleading of the conspiracy claim with that now contained in each proposed defence.

20 There is, of course, one material respect in which the conspiracy claims are now different to those previously pleaded. In paragraph 51 of his ruling, Byrne J noted that the previous pleading did not specify whether the plea was of a criminal conspiracy, or of the civil tort of conspiracy. His Honour noted that "the pleaders must therefore make their allegation specific". By contrast, the third defendant has made it clear, both in the proposed amended defence, and in communications with the plaintiffs, that the conspiracy claim now sought to be pleaded is based on a civil tort of conspiracy, and does not allege a criminal conspiracy.

21 There are some other, lesser, differences between the previous expositions of the conspiracy claim and that now sought to be made in the proposed amended defence. The reasons for decision of Byrne J do not expressly state the other respects, in which his Honour criticised the previous pleadings as being unspecific. It was unnecessary for his Honour to do so in his ruling, since, in substance, his Honour was responding to submissions then made to him, and the parties to whom those remarks were directed, would have understood his Honour's reasons in that light. However, in that respect, I am unable to make a useful comparison between the proposed defences, which were before his Honour, and those which are now proffered to me, in order to determine whether the differences in the current draft pleading address the deficiencies to which his Honour was referring. I am therefore not prepared to disallow the current proposed pleading on the basis, contended for by the plaintiffs, namely, that they have been previously disallowed.

22 Both plaintiffs have submitted that the pleading of the conspiracy is defective, because it does not adequately, or properly, identify the objects of the alleged conspiracy. The submissions in this respect raise issues of both the form of the pleading, and of a matter of substance as to whether, properly construed, the pleading does adequately define the objects of the conspiracy.

23 Both plaintiffs correctly point out that it is an essential element of both forms of the tort of conspiracy that the alleged conspirators intend to injure a person, or persons, by their acts.[7] In the proposed pleading, the third defendant has pleaded that the objects of the conspiracy were "prospective plaintiffs". In each pleading, those persons are defined as "litigants in the contemplated litigation". In turn, the phrase "contemplated litigation", is defined as "proceedings which the conspiracy parties contemplated were likely to be or might be brought involving claims against BATAS and/or BATAL for damages for personal injury caused by smoking their products".

24 The plaintiffs each submit that that pleading is defective, because it defines the objects of the conspiracy by reference to the individual states of mind of a number of alleged conspirators. In each case, the conspirators are pleaded to be BATAS, BATAL, Maher, Wilson, Chalmers, Eggleton, Travers and "other persons not presently known to Mrs Cowell". Thus, it is submitted, the identification of the objects of the conspiracy, in the pleading, is by reference to the states of mind of two corporations, a number of named individuals and others unnamed. Accordingly, it is submitted, the question of whether any person is an object of the "conspiracy" could only be ascertained by inquiring into the varying states of mind of the various conspiracy parties over a fifteen year period.

25 Pausing there, in my view that construction of the proposed amended defence tends to overstate the degree of uncertainty deriving from the concept of "contemplated litigation" in both proposed pleadings. The pleading makes it clear that the persons, who are intended to be the objects of the conspiracy, are persons who either are, or will become, litigants against BATAL or BATAS in claims for damages for personal injury caused by smoking their products. The use of the word "contemplated", in the definition of the "contemplated litigation", is not used to describe any particular individual piece of contemplated litigation. Rather, it is used generically, to describe the nature of the litigation, which it is contemplated might be brought against BATAS and/or BATAL, namely, litigation for damages for personal injury caused by smoking their products. Thus, the relevant class of individuals, who are to be the objects of the conspiracy, are those who, from time to time, commence that type of litigation against BATAS and/or BATAL. That much is made clear by the use of the noun "litigants" in the proposed defence. It is also made clear by the pleading of the intended purpose of the conspiracy, namely, to impair the rights of discovery of those persons who become litigants in such contemplated litigation.

26 It is with that understanding of the proposed pleading that I turn to the more difficult issue of substance raised by the submissions of both BATAS and BATAL. In short, it is submitted that it is an essential element of both species of the tort of conspiracy that the parties to the conspiracy intend to injure the object or objects of the conspiracy. It is insufficient that the acts in question necessarily involved injury to the plaintiff, or that the plaintiff was likely to suffer injury as a result of the acts of the conspirators.[8] Thus, it is submitted that the objects of the conspiracy must be identified and pleaded with sufficient clarity and precision, and that descriptions of the objects which are "amorphous" or "nebulous" are inadequate.[9] The plaintiffs acknowledge that a conspiracy may be directed at a class of persons, rather than at an individual, but the members of the class must be capable of being readily ascertained.[10] They submit that, in this respect, the class of objects of the alleged conspiracy in these proceedings is less definite than the class of objects of the conspiracy, the pleading of which was disallowed, both by Weinberg J[11], and by the Full Court of the Federal Court[12], in Dresna Pty Ltd v Misu Nominees Pty Ltd.

27 In order to determine this issue, it is necessary to examine the decisions, both of Weinberg J, and the Full Court, in Dresna in a little detail, and to compare them with the subsequent decision of the Court of Appeal of Western Australia in Stanley v Layne Christensen Company[13].

28 In Dresna, the applicant had entered into an agreement with Franklins to purchase the Franklins Mentone Store. That acquisition was part of a sell down of assets by Franklins, for the purposes of which Franklins had given an undertaking to the Australian Consumer and Credit Commission to sell its assets to independent operators. Subsequent to the sale of the store to Dresna, difficulties were encountered with obtaining the consent of the lessor to the assignment of the lease. In November 2001, Franklins rescinded the agreement, and sold the store to Coles. In his proposed amended statement of claim, the applicant (inter alia) sought to plead that Franklins and Coles had conspired, by unlawful means, to injure the applicant. Weinberg J refused to grant leave to Dresna to plead the conspiracy, because the amended statement of claim did not adequately plead an intention by the respondents to injure the applicant.

29 In reaching that decision, his Honour reviewed the general principles relating to the tort of conspiracy. His Honour observed that it is an essential element of the tort of conspiracy that there be an intention to injure the plaintiff, whether the conspiracy is in the form of an "unlawful means" conspiracy, or, alternatively, whether it is a combination of acts the sole or predominant purpose of which is to injure the claimant. In respect of an "unlawful means" conspiracy, he considered that the correct test of the requisite intention was that it be "aimed or directed" at the claimant.[14] In preferring that formulation of the test, his Honour adopted the previous statement of it by Lord Denning MR in the Court of Appeal decision in Lonrho Ltd v Shell Petroleum Co Limited[15], and in his own previous decision in McKellar v Container Terminal Management Services Limited[16]. In particular, his Honour noted that it is insufficient that damage to the plaintiff, as a result of the unlawful means, be reasonably foreseeable. Weinberg J further noted that the target may be a "general one", in the sense that it may be a group[17], but the conspiracy must be directed at all members of that class or group.

30 In Dresna, the conspiracy, proposed to be pleaded by the applicant, was alleged to be constituted by an:

"... intention to deprive the independent operator that entered into an agreement to purchase the Franklins business at Mentone, of the benefit of that agreement, and thereby cause it harm."

31 His Honour noted that the applicant had not pleaded (nor could it plead) that either the lessor or Coles intended to injure the entire class of persons known as "independent operators". Thus, his Honour rejected the formulation of the conspiracy proposed by Dresna, stating:

"The degree of precision required by the authorities tells strongly against Dresna's somewhat amorphous formulation, where the intent to injure is expressed in terms that are nebulous at best. This part of the (Proposed Further Amended Statement of Claim) does not identify any specific targets, or any group within which such a target could readily be ascertained. In these circumstances, I am of the view that Dresna should not be granted leave to plead a conspiracy, by unlawful means, to injure 'the independent operator', in the form contemplated."[18]

32 Pausing there, it is important to note that the observations of Weinberg J were directed to the particular pleading proposed in that case. In the context of the facts asserted in the proposed statement of claim, the pleading failed to identify, with specificity, a class, to all members of which the pleaded intention was directed.

33 On appeal, the Full Court of the Federal Court in Dresna Pty Ltd v Misu Nominees Pty Ltd[19] upheld the decision of Weinberg J, basically for the same reasons as those enunciated by his Honour. In particular, the Court accepted that a conspiracy might be directed to all members of a class. However, in the instant case, the difficulty was that the only conceivable class could be any member of the public at large. The Court rejected the submission of the applicant that it was sufficient to establish that the lessor intended to injure whichever independent operator was awarded the contract to the Franklins Mentone business. Such a person was not a member of a class, other than the class of the members of the general public.[20]

34 The decision of the Federal Court in Dresna is to be contrasted with the decision of the Court of Appeal of Western Australia in Stanley & Ors v Layne Christensen Co & Ors[21]. In that case, the first defendant (Stanley) sold his shares in a number of companies, including the second plaintiff (Stanley Mining Services Pty Ltd) ("SMS"), to the first plaintiff, Layne Christensen Company ("Layne"). Stanley entered into a consultancy agreement with Layne and SMS, by clause 10 of which he undertook not to solicit for himself or for any other person any business, which would be in competition with SMS or any related or affiliated corporation. Notwithstanding that covenant, Stanley then proceeded to assist and organise a business conducted by the second, third and fourth defendants in competition with SMS. In the meantime, SMS assigned its assets to the third and fourth plaintiffs ("WADS 1" and "WADS 2").

35 In its amended statement of claim, the plaintiffs pleaded (inter alia) a cause of action in conspiracy, whereby the defendants had agreed and combined in a course of action to commit unlawful acts with the intention of injuring WADS 1 and WADS 2. The defendants submitted that no material facts had been pleaded in the statement of claim, which would indicate that the defendants had been given notice of the assignment of the assets to WADS 1 or WADS 2, or by which they would otherwise have been aware of the existence of those two companies. Accordingly, it was submitted that it could not be arguable that the defendants had conspired to injure those two companies. That submission was rejected by the Court of Appeal. Wheeler JA (who delivered the leading judgment) referred to the decision of the Federal Court in Dresna, and stated:

"[47] Although I would accept the analysis in [11] of Dresna, it seems to me to be arguable that it does not determine the issue in this case. That is to say, it is arguable that there may be a conspiracy directed at every member of a group, being the group having the benefit of clause 10 in the consultancy agreement. The members of that group may vary over time, but its membership would be ascertainable at any particular date. Of course, only those members who actually suffered loss as a result of a conspiracy directed at the group would be able to bring an action founded on the conspiracy. Alternatively, and more narrowly, it may be the category or group of entities having the benefit of that clause and operating the business of drilling and contracting in either Africa generally, or in Ghana."

36 The precise point of distinction between Dresna and Stanley is arguable. However, it would seem that the difficulty with the pleading in Dresna was that, ultimately, only one person could be injured as a result of the conspiracy sought to be pleaded, that person being the individual operator who purchased the Mentone store. At the time of the alleged conspiracy, there was no identifiable class of such persons. Rather, such person would come from an amorphous group, being the members of the public at large. On the other hand, in Stanley, it was considered that the group, to which the conspiracy was arguably directed, was the group of persons having the benefit of clause 10 of the consultancy agreement from time to time. While members of that group might vary over time, its membership could be ascertained at any particular date.

37 The application of that fine distinction in the present case is not without difficulty. However, I consider that the distinction between Dresna and the present case, contended for by Mr Burnside QC (who appeared with Dr M Collins for the third defendant) is at least arguably sound. In the present case, it is not pleaded that the conspiracy was directed at members of the public. Rather, it is pleaded that the conspiracy was directed ("aimed") at such persons who, from time to time, issued proceedings against the two plaintiffs, claiming damages for injury caused by smoking their products. Although the members of such a group may vary over time, the membership of that group could be ascertained at any particular date. Further, it is clear that the conspiracy, sought to be pleaded in this case, was one directed at each member of that group, because the pleaded intention was to deprive any person, who instituted such litigation, of that person's rights to obtain discovery against one or other of the plaintiffs in the present proceeding. At the very least, in my view the proposition relied on by Mr Burnside is sufficiently arguable, so that it could not be concluded that any conspiracy, which is pleaded in the two defences, would necessarily be doomed to failure at trial.

38 In reaching those conclusions, I consider that the decision of Hely J in Australian Wool Innovation Limited v Newkirk[22] might, at least arguably, be distinguished. The applicant in that case was Australian Wool Innovation Limited, which represented 30,000 Australian wool growers. It brought proceedings against four respondents, who had announced and implemented a boycott of Australian wool, until the industry discontinued using the veterinary surgical technique known as "mulesing", and until it ceased the exploit of live sheep for sale as meat. The applicant sought leave to amend the claim to add 103 companies and persons as applicants, and (inter alia) to plead a cause of action in conspiracy. The conspiracy sought to be pleaded in the amended statement of claim was a combination to commit unlawful acts with the intention of harming the first to 104th applicants "and/or the persons represented by the first applicant". Unsurprisingly, Hely J held that such a conspiracy failed to identify the object or objects of the conspiracy. His Honour observed that a pleading of a single conspiracy, the objects of which may be 104 people, or 30,104 people, was embarrassing "... as a conspiracy takes its shape and scope from its objects and a conspiracy defined in that way is shapeless".[23]

39 It is thus evident that the conspiracy, sought to be pleaded in Newkirk, lacked any precise definition of the objects of the alleged conspiracy, they being pleaded to be 104 persons "and/or 30,104 persons represented by the first plaintiff". By contrast, in the present case the conspiracy is pleaded to be directed to each person who is, or becomes, a litigant against one of the two plaintiffs in proceedings claiming injuries arising out of smoking the products of the plaintiffs. In that way, in my view the two cases are distinguishable, or at least arguably so.

40 For those reasons, I do not consider that the proposed pleading of the objects of the conspiracy is deficient.

41 The defendants next contend that the proposed pleading of the conspiracy is defective, because it does not adequately identify the parties to the conspiracy. In essence, two principal complaints are made.

42 First, BATAS submits that the third defendant has failed to identify the person or persons, who directed the minds of the two corporate parties to the conspiracy, namely BATAS and BATAL. It is pointed out that, as companies, BATAS and BATAL could only commit a conspiracy through the acts and intentions of persons who, for their relevant purpose, constituted their directing mind and will.[24] The proposed defence does not identify the individuals who are alleged to have constituted, for this purpose, the relevant mind and will of BATAS and BATAL. Accordingly, it is submitted that the pleading fails to properly identify the parties to the conspiracy in that way.

43 I do not consider that the matter relied upon by BATAS in this regard constitutes a defect in the proposed pleading. I agree with the submission, made on behalf of the third defendant, that the complaint by BATAS relates to matters of particularity. In the proposed defences, the actions attributed to the solicitors Wilson, Eggleton, Travers and Chalmers are pleaded as acts carried out in the course of their retainers by the plaintiffs. The pleading, in each case, is that those solicitors performed those acts in the course of their professional retainers by BATAS and/or BATAL. It is the actions of those solicitors, in the course of those retainers, which are relied on as constituting the overt acts pleaded in the proposed defences. It is understandable that the third defendant is not presently placed to identify the particular individuals, constituting the relevant directing mind and will of the corporate plaintiffs, who were responsible for the instructions given to the solicitors relating to the overt acts, which were alleged to be carried out in the course of their retainer by the plaintiffs.

44 In a case such as this, in which the party alleging the conspiracy relies on a process of inferential reasoning from overt acts, it has been accepted as appropriate to defer the provision of particulars, until after the completion of discovery. Thus in Stanley's case, Wheeler JA accepted that it was appropriate to defer, until after discovery, the requirement that the plaintiffs provide particulars of the facts, from which an inference could be drawn that the defendants were aware of the existence of WADS 1 and WADS 2, either as individual entities or as members of the relevant class. Her Honour stated[25]:

"I note in this connection that in claims of conspiracy which are sought to be proved by inference from facts done in pursuance of the apparent common purpose, it may be appropriate to defer the provision of particulars until after discovery: Porteous v Rinehart (1996) 22 ACSR 364, 376. Similarly, there will be occasions when a plea will not be struck out for want of particularity if the necessary particulars are within the knowledge of the defendant: see Jingellic Minerals NL v Abigroup Limited (1992) 7 WAR 566, 570, 575. It appears to me that it is necessary in this case that the pleadings either make it clear that the intention pleaded was to injure WADS 1 and WADS 2 specifically, or members of a class, and if the latter, how that class may be identified. However, the question of what particulars should be provided at this stage, as opposed to after discovery and after further amendment of the defence, is a matter which, it seems to me, should be dealt with by the master."

45 The second criticism, made by both BATAS and BATAL, of the pleading of the parties to the conspiracy, relates to the dates, upon which it is alleged that the particular individuals became members of the conspiracy.

46 The particulars to paragraph 46 of the BATAL defence, and to paragraph 185 of the BATAS defence, plead that BATAS, BATAL and Eggleton entered into the conspiracy on or about 7 April 1987; that Wilson and Travers joined the conspiracy in about 1990; that Chalmers joined the conspiracy in about 1991; and that Maher joined it in about 1996. The dates on which Travers, Wilson, Chalmers and Maher are each alleged to have joined the conspiracy correspond with the dates, on which they are alleged to have commenced working on matters involving BATAS and/or BATAL. However, in each case, no overt act has been pleaded in respect of such an alleged conspirator until a later date. For example, the first overt act pleaded in relation to Ms Chalmers seems to be 6 December 2001, when (it is pleaded) she swore an affidavit on behalf of BATAS in the McCabe proceeding (BATAS defence paragraph 55; BATAL defence paragraph 67).

47 I consider that the contention made on behalf of the plaintiffs in this respect is correct. In each case, the third defendant will rely on the overt acts, pleaded by her, to establish the conspiracy. The fact that a solicitor commenced to act for one or other of the plaintiffs on a particular date could not, standing alone, or in combination with any of the pleaded overt acts, logically lead to an inference that, on that date, or shortly thereafter, the solicitor became a party to the alleged conspiracy. It is trite law that the constituent parties to a conspiracy may change over a period of time. However, ultimately it will need to be proven how and in what circumstances a particular alleged conspirator joined the conspiracy. At present, there is a clear disconformity, in that respect, between the dates pleaded in the proposed further amended defence, and the dates of the overt acts, from which the conspiracy is to be inferred, and from which the membership of the conspiracy, by the named persons, is to be inferred. The conspiracy alleged in this case is a serious one, namely, a conspiracy which involved acts described as attempts by the named persons to pervert the course of justice. Insofar as the third defendant seeks to allege that any particular member of the conspiracy joined it, that allegation must be made on the basis of a pleaded overt act. I would only permit the pleading of the conspiracy to be made, if the disconformity between the overt acts alleged, and the dates on which it is said that the particular conspirators joined the conspiracy, is cured.

BATAL defence paragraph 48: BATAS defence paragraph 187

48 While I am dealing with the topic of the parties to the alleged conspiracy, it is useful to address a point made by Mr Connock, SC, who appeared with Mr D Bennett on behalf of BATAL, in respect of paragraph 48 of the proposed BATAL defence. That paragraph is in identical terms to paragraph 187 of the proposed BATAS defence. As I stated, paragraph 47 of the BATAL defence (and paragraph 186 of the BATAS defence) plead the overt acts to the alleged conspiracy. Paragraph 48 of the BATAL defence (and paragraph 187 of the BATAS defence) then plead:

"The acts done by the conspiracy parties were done on behalf of and for the interests of BATAL (BATAS)."

49 It is correctly pointed out on behalf of the plaintiffs that, generally, a company may not be found guilty for a criminal offence on the basis of vicarious liability.[26] In their written submissions, and in Mr Burnside's oral submissions before me, counsel for the third defendant disavowed any intention to plead vicarious liability of BATAS and BATAL for the acts specified as overt acts in the proposed defences. In his oral submissions, Mr Burnside stated that the purpose of paragraph 48 of the BATAL defence (paragraph 187 of the BATAS defence) is to allege that the overt acts were carried out "for the benefit" of BATAS and BATAL, so as to lay a basis for reliance on the doctrine of unclean hands, in response to the claim for equitable relief by way of injunction. If that is the intention of the third defendant, then the paragraphs should be re-drafted to ensure that such an intention is clearly expressed in the language of the pleading. Further, in those circumstances, the positioning of the relevant paragraphs, immediately after the overt acts, and somewhat remote from the pleading of unclean hands, tends to obscure, rather than assist, in an understanding of the intended purpose of the plea. I would therefore not permit the pleading to go forward without appropriate amendment being made to paragraph 48 of the proposed defence in BATAL and paragraph 187 of the proposed defence in BATAS.

Elements of the tort of conspiracy: pleading of predominant purpose

50 BATAS submits that the pleading of the predominant purpose alternative of the conspiracy is defective. Paragraph 185A(a) of the BATAS defence alleges: "The conspiracy was made with the sole or predominant purpose of injuring the prospective plaintiffs". It is submitted on behalf of BATAS that a conspiracy may not have an intent; rather what is relevant is the intent of the conspirators. In support of that proposition, counsel relied on the statement by Dixon J in McKernan v Fraser[27]:

"It appears now to be settled that, for a combination or acts done in furtherance of the combination to be actionable in such circumstances, the parties to the alleged conspiracy must have been impelled to combine, and to act in pursuance of the combination, by a desire to harm the plaintiff, and that this must have been the sole, the true, or the dominating, or main purpose of their conspiracy."

51 In my view, the point made by BATAS is without substance. A conspiracy is actionable if either it constitutes an agreement to injure a plaintiff by unlawful means, or if the predominant purpose of the conspiracy was to injure the plaintiff. That formulation of the tort brings into focus the purpose or object of the conspiracy. Not uncommonly, the authorities speak in terms of the purpose or intent of "the conspiracy".[28] Of course, the conspiracy does not exist as an independent entity; rather it is brought into being by the combined intentions of each of the parties. Nevertheless, a pleading of the common purpose of the conspiracy necessarily involves an allegation of the purpose and intention of each of the constituent members of the conspiracy. I consider that the shorthand expression of that intention, adopted in paragraph 185A(a) of the BATAS defence is adequate.

Essential elements of the tort of conspiracy: pleading of agreed unlawful means

52 Both BATAS and BATAL contend that the pleading of the second type of conspiracy, namely a conspiracy with the intention of using unlawful means, is inadequate. In particular, it is submitted that the bare pleading that the conspiracy was made with the intention of using unlawful means (BATAS proposed defence paragraph 185A(b); BATAL proposed defence paragraph 46A(b)) is defective, because the pleading fails to identify the unlawful means, which the conspirators agreed would be adopted for the purpose of injuring prospective claimants in tobacco litigation against BATAS and/or BATAL.

53 I consider that the submission made by both BATAS and BATAL is valid. Clearly, it is an essential element of the alternative type of conspiracy, sought to be pleaded, that the parties to the conspiracy agree to use unlawful means in order to injure the plaintiff.[29] In Elliott v Seymour[30], Ryan J held that the proposed pleading, of an unlawful means conspiracy, was objectionable, because the pleading had failed to properly identify the unlawful means agreed between the conspirators.

54 In the course of argument, Mr Burnside stated that the agreed unlawful means were the overt acts alleged in the proposed defence. Those overt acts occurred at various times over an alleged fifteen year period. In such a pleading, it is necessary for the third defendant to identify properly the unlawful means, which it is alleged were agreed to be employed in the conspiracy. The pleading in each proposed defence is deficient in that regard, and I would not accept it in its current form.

55 BATAS relies on three grounds, upon which to submit that the pleading of overt acts of the conspiracy, in paragraph 186 of the proposed defence, is defective.

56 First, it is submitted that the overt acts, in large part, do not disclose overt acts at all. It is contended that they are not allegations of "outward acts or conduct but are allegations of conduct combined with, and tendentiously coloured by, allegations about the alleged purpose with which the conduct was carried out". I do not consider that that criticism is fairly made out. Each of the subparagraphs of paragraph 186 refer to particular categories of conduct alleged to be overt acts. Each of the paragraphs refer to specific conduct and, where necessary, set out, seriatim, specific acts constituting the conduct alleged. In my view, the pleading is not defective in the respect contended for by BATAS.

57 Secondly, it is submitted on behalf of BATAS that the overt acts, pleaded in paragraph 186, are incapable of supporting the allegation of conspiracy.

58 The submission made on behalf of BATAS involves, in the first instance, a rephrasing of each of the overt acts in a way which proceeds beyond simply removing from the third defendant's pleading "spurious allegations of purpose" and "conclusionary language". For example, paragraph 186 subparagraph (a) of the proposed defence pleads the establishment and implementation by BATAS and BATAL of a policy for the purpose of falsely providing an innocent explanation for the concealment and destruction of documents in their possession, which would or might be prejudicial to any defence in the contemplated litigation. It then provides three particulars, namely: that each of BATAS, BATAL and the Tobacco Industry Association, devised and implemented a document retention policy; that Wilson gave advice to BATAS in April 1990 to destroy all documents, other than those in the public domain, so that plaintiffs would be limited to oral evidence from persons who used to handle such documents; and that each of BATAS and BATAL destroyed documents in purported reliance on the document retention policies. That overt act is reduced, by BATAS in its submissions, to the following:

"(a) BATAS and BATAL established and implemented document retention policies."

59 The submission then proceeds, in a similar way, to reduce and neuter each of the overt acts pleaded in paragraph 186, in a manner which, in my view, does not accurately or fairly reflect the import of the factual allegations made in each subparagraph of paragraph 186 of the proposed defence. Further, and as pointed out on behalf of the third defendant, the contention advanced on behalf of BATAS fails to take into account the united and combined effect of the overt acts in giving rise to the implication of the conspiracy contended for. As is common in a case of conspiracy, the party alleging the conspiracy (here the third defendant) relies on a process of inference, by which to establish the alleged conspiracy, that inference being based on a number of overt acts pleaded by the third defendant. The drawing of an inference does not take place by a series of independent judgments based on individual facts taken in isolation. Rather, the process of inferential reasoning involves a consideration of the united and combined force and effect of the overt acts, when taken together.[31] It is the relevant coincidence of a number of facts, considered in combination, which may or may not be sufficient to give rise to the inference contended for. In R v The Associated Northern Collieries[32], Isaacs J stated:

"Community of purpose may be proved by independent acts, but it need not be. If the other defendant is shown to be committing other acts, tending to the same end, then though primarily each set of acts is attributable to the person whose acts they are, and to him alone, there may be such a concurrence of time, character, direction and result as naturally to lead to the inference that these separate acts were the outcome of pre-concert, or some mutual contemporaneous engagement, or that they were themselves the manifestations of mutual consent to carry out a common purpose, thus forming as well as evidencing a combination to effect the one object towards which the separate acts are found to converge."

60 It must also be borne in mind that the drawing of inferences from admissible evidence is essentially a question of fact, to be determined on the evidence.[33] The relevant inferences to be drawn, and the question whether ultimately the evidence to be adduced in support of the overt acts support an inference of the existence of the alleged conspiracy, will significantly depend on the nature and quality of the evidence given at trial. The submission made on behalf of BATAS is, in effect, that at trial a court could not reasonably infer, on the balance of probabilities, the existence of the conspiracy contended for, from the overt acts pleaded in the proposed defence.

61 At this preliminary stage, I do not consider that it could be properly concluded that the combination of the overt acts, pleaded in paragraph 186 (even when the "tendentious" language is removed from them), could not, in combination, give rise to the implication of the conspiracy contended for on behalf of the third defendant. Thus, I do not consider that the pleading of the conspiracy is "hopeless" in the manner contended for by BATAS. In other words, in my view, the allegation of conspiracy, as thus pleaded, is not so untenable, implausible or improbable as to not give rise to a real question to be tried in the proceeding.[34]

62 The third basis upon which BATAS attacks the pleading of overt acts, in the proposed defence, is that paragraph 186 does not allege the overt acts with sufficient particularity, given the nature of the serious allegation for which they are pleaded in aid.

63 In particular, it is submitted that paragraphs 186(a), (b), (d) and (i) do not contain sufficient particularity. In support of that proposition, reliance was placed on the principle that where a conspiracy is alleged, sufficient particulars of the overt acts, relied on, must be pleaded, so as to clearly define the issues which are before the court.[35]

64 Each of the subparagraphs in question contain particulars. In addition, it would seem that the overt acts pleaded in subparagraphs (a) to (c) of paragraph 186 are largely related to the first and third alleged "crimes, frauds and civil offences" pleaded, in some detail, in paragraphs 42 to 121 of the amended defence. While the particulars of the overt act, pleaded in paragraph 186(d) standing alone, may not support the allegation of "collusion", the question whether the alleged agreement referred to in paragraph 186(d)(iv) amounted to "collusion", will depend on the relationship between the agreement referred to in that subparagraph and the other overt acts which are pleaded. On its own, paragraph 186(d) does, in any event, identify, with sufficient particularity, the nature of the agreement which is alleged to be the "collusion". The same observations may be made relating to the overt act pleaded in paragraph 186(i). Thus, I do not consider that the overt acts, in paragraph 186, are deficient, for lack of particularity.

65 BATAS also objects to paragraph 186(j), which pleads that pursuant to and in furtherance of the conspiracy, BATAS, Maher, Wilson, Chalmers and Eggleton engaged in the specific acts of wrongdoing alleged in paragraphs 42 to 181. It is submitted that such a pleading is an unacceptable method of identifying the overt acts relied on to support the allegation of conspiracy. In particular, it is contended that the third defendant has failed to attempt a meaningful identification of the matters contained in paragraphs 42 to 181, which are said to be "overt acts", and which support the inference of a conspiracy. Rather, it is submitted, the third defendant has deployed those 139 paragraphs in a "blanket fashion", in the hope that ultimately some of them might prove useful.

66 In my view, the reference in 186(j), to each of the five alleged acts of wrongdoing, specifically pleaded in paragraphs 42 to 181, is sufficient. This case is quite distinct from the decision of the High Court in R v Weaver[36], relied on by BATAS. In that case, the High Court held that particulars of a criminal conspiracy, which referred, in globo, to all exhibits and documents tendered at the committal proceeding, did not sufficiently particularise the overt acts. By contrast, in this case the third defendant, in paragraphs 42 to 181, has pleaded five different acts of alleged wrongdoing, with supporting paragraphs in respect of each of them. I do not consider that such a pleading constitutes a "blanket" pleading of overt acts. The acts specified in paragraphs 42 to 181 have sufficient specificity to inform the plaintiff of the case which the third defendants will seek to make at the trial of the proceeding.

The role of the conspiracy allegation against BATAS

67 BATAS also contends that the proposed conspiracy plea serves no legitimate purpose, as it is based on allegations of overt acts, which themselves are alleged, in the defence, to be criminal acts performed by the plaintiff. No corresponding contention is directly advanced on behalf of BATAL in its written submissions, although I note that BATAL seems to make the same point, in those submissions, albeit on behalf of BATAS.

68 In criminal prosecutions, it is generally not permissible to combine a charge of conspiracy, on the same presentment, with a charge of the substantive offence, which is the subject of the conspiracy.[37] There is authority which suggests that the same approach, generally, is adopted in civil proceedings, where a pleading seeks to rely on both a conspiracy to commit a wrong, and also on the wrong itself, as separate causes of action.[38] On the other hand, in State of Queensland v Pioneer Concrete (Queensland) Limited[39] Drummond J expressed doubts whether the principle, which is applied in the criminal law, is also applicable to the pleading of alternative causes of action in a claim for civil damages.

69 In any event, I do not consider that the proposed pleading offends the principle, if it does apply to civil proceedings. The allegations of specific wrongdoing, contained in the BATAS defence, do not make a direct allegation against BATAL. In that defence, the only wrongdoing pleaded against BATAL is that it is alleged to have been a party to the conspiracy pleaded in paragraphs 185 to 188. Thus, an additional wrong is pleaded against BATAS in paragraphs 185-188 of the BATAS defence, namely, the act of combining, with BATAL and others, with the intention of injuring prospective plaintiffs in tobacco-related litigation. In that way, the conspiracy claim does plead an additional substantive wrongdoing against BATAS.

70 Further, the act of wrongdoing, pleaded in the BATAL defence, is confined to an allegation of conspiracy, pleaded in paragraphs 46 to 155 of that defence. In that defence, BATAS is pleaded to be a party to the conspiracy. The conspiracy so pleaded is the same conspiracy alleged in paragraphs 185 to 188 of the BATAS defence. It is highly likely, if not inevitable, that the two proceedings will be heard together. Thus, the allegation, that BATAS was party to the conspiracy, will be heard at the same trial, whether or not it is made in the pleading against BATAS.

Allegations against Wilson - proposed BATAS defence paragraphs 170-177

71 In paragraphs 163 to 168 of the proposed defence in the BATAS proceeding, the third defendant pleads that in 1990 Wilson gave advice to BATAS to destroy all documents, other than those in the public domain, so that potential plaintiffs would be limited to oral evidence from persons who used to handle such documents. The defence pleads that by giving such advice, Wilson committed the common law offence of attempting to pervert the course of justice. In paragraph 169, it is pleaded that BATAS did not call Wilson to give evidence in the hearing before Eames J in the McCabe proceeding. Paragraph 170 pleads findings made by Eames J, in those proceedings, concerning the conduct of Wilson. Paragraph 171 pleads that each of those findings was true.

72 Paragraph 172 of the proposed defence pleads that Wilson "made submissions, and gave evidence", to the Court of Appeal in the McCabe proceeding to the effect:

(a) that he had not been involved in the representation of BATAS in that proceeding; and

(b) that the allegations made against him in the proceeding, and the findings made by Eames J in respect of him, were unsupported by evidence, and were untrue.

Paragraphs 174 and 175 allege that the submissions made, and evidence given, by Wilson in the Court of Appeal were intentionally misleading. Paragraph 176 alleges that Wilson thereby committed the common law offence of attempting to pervert the course of justice, and in paragraph 177 it is alleged that, accordingly, Wilson committed a crime or a fraud.

73 BATAS submits that the allegation in paragraphs 172(a) and (174) - that Wilson gave misleading evidence to the Court of Appeal that he had not been involved in the representation of BATAS in the McCabe proceeding - is identical to the allegation contained in paragraph 18V(a) and paragraph 18VB(a) of the previous proposed defence, which Byrne J rejected as unsupported on the facts pleaded in the proposed defence.[40] In my view, the same criticism could not now attach to the proposed defence. The particulars, provided under paragraph 172, include a reference to an affidavit sworn by Wilson in the Court of Appeal proceeding, in which he deposed that he was not involved in the representation of BATAS in those proceedings. Paragraph 171(b) alleges, with three specifics, that Wilson was involved in the representation of BATAS in the McCabe proceeding. The relevant issue of fact is thus sufficiently identified and defined in the pleading. The criticism, made by Byrne J of the previous pleading, was that the facts, upon which the misleading statement were made, do not support it. Particulars have now been provided as to the statements and evidence given by Wilson to the Court of Appeal. As I stated, paragraph 171(b) sufficiently identifies what are said to be the true facts. It will be a matter at trial to determine whether the evidence, given by Wilson to the Court of Appeal, was misleading. I consider that the particulars thus provided at paragraph 172 sufficiently cure the defect, which was referred to by Byrne J, to permit the allegation in the pleading before me to go forward.

74 It is further submitted on behalf of BATAS that the matters alleged in paragraph 171(b) do not have the capacity to demonstrate that the evidence and submissions of Mr Wilson, referred to in paragraph 172(a), were misleading in any sense. In my view, that proposition, insofar as it relates to the evidence given by Wilson to the Court of Appeal, is a matter to be assessed at trial. On the face of it, paragraph 171(b) alleges: involvement of Wilson, in February 2002, in a meeting relating to the documents which had been subpoenaed in the McCabe trial, including the Oxland file notes; a telephone call by Wilson to Travers during that meeting; and, subsequently, Wilson spending some time reading submissions filed on behalf of Mrs McCabe in those proceedings, and advising Travers that he was content with BATAS's draft submissions in those proceedings. Those facts, if established, are capable of demonstrating that the evidence given by Wilson to the Court of Appeal, in his affidavit in support of his application for leave to appear on the appeal, was misleading in the sense alleged in the proposed amended defence.

75 On the other hand, I am not persuaded that the extracts from the submissions, made on behalf of Wilson to the Court of Appeal as to his involvement in the McCabe proceeding, and set out in the particulars to paragraph 172 of the proposed defence, could be characterised as misleading, in such a manner as to constitute an attempt to pervert the course of justice. The extracts of the submissions, in the particulars, demonstrate that the submissions were made in relation to the state of the evidence in the McCabe trial, and which was then before the Court of Appeal. Not surprisingly, the submissions did not, themselves, seek to put before the court any evidence from "the Bar table". The suggestion that a submission, of the kind set out in subparagraphs (v) and (vi) of the particulars under paragraph 172, could be characterised as an attempt to pervert the course of justice, is unsupported by authority and principle. It runs counter to the adversarial nature of the court processes. I therefore would allow paragraph 172(a) of the proposed BATAS pleading (paragraph 164(a) of the BATAL proceeding), but subject to the deletion from it of the words "made submissions and".

76 Paragraph 172(b) pleads that Mr Wilson made submissions, and gave evidence, to the Court of Appeal in the McCabe proceeding, that the allegations against him in those proceedings, and the findings by Eames J, were unsupported by evidence and/or untrue. Paragraph 171(a) of the proposed defence pleads that each of the findings of fact made by Eames J (as summarised in paragraph 170) were true.

77 BATAS takes exception to that pleading on three grounds. First, Mr Wheelahan SC, who appeared for BATAL with Mr D O'Meara, submitted that the plea, in paragraph 171(a), that the findings of Eames J were correct, is no more than a "bald assertion". In my view, that criticism is valid. The allegation contained in the defence is a serious one. In order to support it, full particulars would be required, setting out the material facts relating to the state of the evidence before Eames J, and specifying how, given that state of the evidence, it would be intentionally misleading for Mr Wilson to have submitted (and stated on affidavit) that his Honour's findings were unsupported by evidence. The complexity of that task itself raises a real issue as to the legitimate purpose to be served by paragraph 172(b) of the proposed defence. The global nature of the submission and the alleged evidence, made and given, to the Court of Appeal - that the allegations against Wilson, and the findings in respect of him, were unsupported and untrue - raises a real question as to the viability of an allegation that such a representation could be intentionally misleading. At best, such a representation to the court would be tendentious, when expressed in such general and global terms. In the absence of appropriate and specific particularisation, I would not permit the pleading to contain paragraph 172(b).

78 The second argument made by Mr Wheelahan, concerning paragraph 172(b), points to a further difficulty. The particulars under paragraph 172 only contain one item (subparagraph (iii)) in which Wilson is said to have claimed, in evidence to the Court of Appeal, that the findings and allegations (in the proceedings before Eames J) were untrue. That allegation was contained in an article in the Australian newspaper, exhibited to Wilson's affidavit before the Court of Appeal. Without more, the placing of such an exhibit before the court could not constitute a submission and evidence, given to the court, to the effect alleged. In particular, it is not sensible to suggest that such an exhibit could have been intended to have the effect of intentionally misleading the Court of Appeal (or Mrs McCabe) as to the state of evidence before Eames J.

79 Thirdly, I agree with the submission by Mr Wheelahan that it could not be tenably contended that the offence of attempting to pervert the course of justice would be committed by a party to a proceeding, through his counsel, submitting to the Court of Appeal that particular findings, by a trial judge, were unsupported by evidence, even where such a submission lacked merit. Again, such a proposition is unsupported by authority and principle, and is inconsistent with the adversarial nature of our court process.

80 BATAL has not taken an objection to the same pleading against it in paragraph 164(b) of the proposed defence in the BATAL proceeding. However, for the same reasons which I have just enunciated, I would not permit the defence to go forward with paragraph 164(b).

81 In summary, then, I would allow paragraph 172(a) of the proposed BATAS defence, but by deleting from it the reference to Wilson "made submissions and". I would disallow paragraph 172(b) of the proposed BATAS defence. It follows, from what I have stated, that subparagraphs (iii) to subparagraphs (vi) of the particulars under paragraph 172 are irrelevant, and should be deleted. Paragraph 173, 174 and 175 will need to undergo amendment, to delete reference to "submissions made" by Wilson to the Court of Appeal. The same conclusions apply, mutatis mutandis, to the relevant parts of the BATAL defence. In that defence, I would allow paragraph 164(a), subject to the deletion from it of the reference to Wilson "made submissions and". I disallow paragraph 164(b). Subparagraphs (iii) to (vi) of the particulars under paragraph 164 are irrelevant and should be deleted. Paragraphs 165, 166 and 167 will need to be amended, to delete reference to the submissions made by Wilson to the Court of Appeal.

Allegations of criminal liability against BATAS: identification of the individual(s) who represented BATAS

82 In paragraphs 73, 116, 127, 135, 157, 167.1 and 167.2 of the proposed defence, the third defendant alleges criminal liability, both accessorial and direct, against BATAS. Objection is taken to those allegations, on the grounds that the proposed defence does not identify the individual(s), who is or are alleged to have committed the acts, and have had the relevant knowledge and intention, by which BATAS is alleged to have committed the offences, of which it is accused.[41] I note that BATAL does not make a similar objection.

83 Paragraphs 116 and 167.1 and 167.2 plead direct liability of BATAS in relation to the implementation of the document retention policy and the destruction of discoverable documents. It would be unrealistic to expect the third defendant to know the precise identity of the individual, or individuals, who represented the relevant mind and will of BATAS in performing those acts. Paragraphs 127, 135 and 157 plead accessorial liability of BATAS in respect of evidence given by Eggleton in the McCabe proceeding. Essentially, the accessorial liability would be based on the proposition that the officer or employee of BATAS, responsible for instructing counsel in the McCabe trial, possessed the relevant intent, and performed the relevant acts. That knowledge would be peculiarly in the possession of BATAS, and not the third defendant. For the reasons which I have already set out earlier in this decision, I consider that the third defendant should be entitled to defer providing particulars, of the relevant individual or individuals, within each of the two plaintiffs, who directed their mind and will in respect of the acts which are alleged, until completion of discovery.

84 In this context, I observe that paragraph 73 of the BATAS defence is, on its face, rather curious. It alleges direct, as distinct from accessorial, liability of BATAS in respect of Travers filing an affidavit sworn by Chalmers in the McCabe proceeding. BATAS has not made a point about this aspect of the pleading in its submissions, and it was not the subject of argument before me. The direct liability is postulated on the rather surprising allegation, in paragraph 72, that BATAS filed the affidavit. Notwithstanding the curiosity of that proposition, I consider that, as with the other allegations, the third defendant should be entitled to defer providing particulars in relation to it until the completion of discovery.

Allegations of accessorial criminal liability against BATAS - paragraphs 127, 135 and 157 of the proposed defence

85 BATAS next makes objection to the allegations, in paragraphs 127, 135 and 157 of the proposed amended defence, that BATAS aided, abetted, counselled or procured the commission of the offence of attempting to pervert the course of justice, which offences were alleged to have been committed by Eggleton in giving misleading evidence in the McCabe proceeding.

86 It is submitted, on behalf of BATAS, that the acts, by which BATAS is alleged to have aided, abetted, counselled or procured the offences of Eggleton, consist solely of calling him to give evidence in the McCabe proceeding. The evidence, which is alleged to be misleading, was given by Eggleton in cross-examination by counsel for the plaintiff in that proceeding. It is submitted, on behalf of BATAS, that it could not be tenably argued that a person, who calls a witness to give evidence before a court, by that act alone, aids, abets, counsels or procures the commission of an offence, by the witness giving misleading (or even false) evidence under cross-examination.

87 The four words commonly used to describe accessorial liability - aid, abet, counsel or procure - to some extent overlap, but each are to be accorded their own individual meanings. Essentially, to aid means to intentionally help the principal offender to commit the crime; to abet an offender means to instigate or encourage that offender to commit that offence; to counsel means to intentionally induce, advise or solicit the commission of the offence; and to procure means to take steps to effect the commission of an offence.[42] The essential common element of each concept is, as stated by Cussen ACJ in R v Russell[43], that the person charged as a secondary party should, in some way, be "linked in purpose" with the person who actually commits the crime.

88 In particular, the party, alleged to be the accessory to the crime, must know that the particular act or acts, constituting the crime, were in contemplation, and must intentionally assist, encourage, advise or procure the commission of those acts with the intention that they be carried out.[44] In paragraph 122 of the proposed defence, it is pleaded that BATAS called Eggleton to give evidence in the McCabe proceeding in relation to the document retention policy, and that Eggleton gave evidence to the effect that he did not believe that the purpose of that policy was to place prejudicial documents beyond the reach of litigants, or potential litigants, and to avoid being required to discover those documents in litigation. It is alleged, further, that Eggleton gave that evidence knowing that it was misleading, and with the intention of misleading Mrs McCabe and the Court, and that he thereby committed the common law offence of attempting to pervert the course of justice. In paragraph 126, it is pleaded that BATAS knew those facts and matters. Paragraph 127 pleads that BATAS "in the premises" aided, abetted, counselled or procured the commission of that offence.

89 The proposed defence adopts a similar structure in relation to two other parts of the evidence given by Eggleton (paragraphs 128 to 135, and paragraphs 151 to 157). As I understand it, the crux of the submission, made on behalf of BATAS, is that it is untenable to suggest that a person could aid, abet, counsel or procure the giving of false evidence, where that false evidence is given, not in evidence in chief, but in cross-examination. It is submitted that the act of calling a witness, who intentionally gives false evidence in cross-examination, could not constitute aiding, abetting, counselling or procuring the witness to give that evidence.

90 In response, it is submitted on behalf of the third defendant that it was inevitable that Eggleton would be cross-examined by counsel for Mrs McCabe about the matters, which are the subject of the allegations in the proposed pleading, and that BATAS knew that he intended, and intended him, to give evidence to the effect alleged in relation to those matters.

91 The submissions, made on behalf of BATAS, do point to a difficulty, which the third defendant may, ultimately, have in proving the allegation of accessorial liability on behalf of BATAS. However, I do not consider that, on its face, the pleading is so untenable that it should not be permitted. In assessing the evidence of Eggleton, referred to in the proposed pleading, much will depend upon the particular context in which the cross-examination occurred. If, for example, in a particular case it was likely that a witness would be asked about a particular matter, and the party only called that witness because the party knew that the witness would intentionally give false evidence, favourable to the party, on that matter, it is, at the least, arguable that the party calling the witness has thus aided, abetted, counselled or procured the offence constituted by the false evidence given by the witness. As I have stated, ultimately, the viability or otherwise of the allegation of accessorial liability would depend upon the particular facts of the case to be agitated at trial. I do not consider that the allegation is, as a matter of law, unsustainable in the sense contended for by BATAS, and accordingly the plea will be allowed.

92 The observations, which I have made above, are subject to one qualification, relating to the wording of the relevant paragraphs of the proposed defence. In each instance in which the third defendant pleads accessorial liability against BATAS, in respect of evidence given by Eggleton in cross-examination, the proposed defence pleads that BATAS knew of the facts and matters set out in the previous paragraphs, namely, the evidence given by Eggleton, and his intention, in giving that evidence, to mislead the court and Mrs McCabe. That formula is adopted in paragraphs 126 and 156 of the proposed defence. By contrast, in paragraph 134 of the proposed defence, it is pleaded that BATAS knew the facts and matters (to which I have just referred) "and called Eggleton to give evidence as alleged in the McCabe proceeding". In each case, in order to plead accessorial liability of BATAS, the third defendant would need to plead, and ultimately prove, that before Eggleton gave the evidence in question, BATAS knew and intended that he would give the misleading evidence which is alleged. Further, it will be necessary to plead (and ultimately prove) the relevant act of BATAS, by which it is alleged that BATAS aided, abetted, counselled or procured Eggleton to give that evidence. In oral submissions, Mr Burnside stated that the pleading is intended to allege that BATAS gave a relevant instruction that Eggleton be called, knowing and intending that Eggleton would give the misleading evidence which is alleged. The proposed pleading should properly reflect that formulation of the accessorial liability, which is sought to be relied upon by the third defendant, so that both the plaintiffs and the court can know, with some precision, the basis upon which that liability is being asserted against BATAS.

93 BATAS also contends that there is an inconsistency between paragraph 128 of the proposed defence, and the case which is intended to be put on behalf of the third defendant. Paragraph 128 alleges that in the McCabe proceeding BATAS called Eggleton to give evidence as to whether the documents, comprising the document retention policy, had been discovered in the Cremona proceeding or the McCabe proceeding, and that Eggleton gave evidence that he did not know whether the document retention policy had been discovered in those proceedings. It is contended on behalf of BATAS that it would be inconsistent to contend that BATAS aided, abetted, counselled or procured any misleading evidence contained in evidence of the type described in paragraph 128. In my view, there is no such inconsistency as contended on behalf of BATAS. In paragraph 130 of the defence, it is alleged that Eggleton knew that BATAS had not discovered the documents, comprising its document retention policy, in the Cremona and McCabe proceedings. The third defendant alleges that BATAS knew that Eggleton intended to give misleading evidence, as to his state of knowledge regarding that matter, and yet called Mr Eggleton to give the misleading evidence referred to in paragraph 128. That analysis of the proposed defence does not, in my view, reveal any inconsistency as contended by BATAS.

Allegations against BATAS of perverting the course of justice: proposed defence paragraphs 112 to 121, 167.1 and 167.2.

94 BATAS raises two main objections to paragraphs 112 to 121 of the proposed defence. First, it is submitted that there is an almost complete overlap between the allegations in those paragraphs and those in paragraphs 167.1 to 167.2. I do not accept that contention. The allegations at paragraphs 112 to 121 are allegations that BATAS attempted to pervert the course of justice, by devising and implementing the document retention policy, and by concealing the fact that the documents had been destroyed. On the other hand, the allegations in paragraphs 167.1 to 167.2 are allegations that, by BATAS acting on advice from Wilson to destroy all documents other than those in the public domain, BATAS committed the common law offence of attempting to pervert the course of justice. While there are a number of similar features between the two sets of allegations, they are not the same.

95 The second point raised by BATAS is that the pleading does not identify the persons, constituting the controlling mind of BATAS, who were responsible for the conduct alleged. Again, for the reasons which I have previously stated, I do not consider that the third defendant ought to be required to provide particulars of the particular individuals involved, until the completion of discovery in the proceeding.

96 Paragraph 122 of the BATAS defence alleges that Eggleton gave evidence in the McCabe proceeding that he did not believe that the purpose of the document retention policy was to place prejudicial documents beyond the reach of litigants or potential litigants, and to avoid being required to produce those documents during the discovery process. The particulars, subjoined to paragraph 122, contain an extract of the cross-examination of Mr Eggleton in the McCabe proceeding. BATAS contends that the allegations, contained in paragraph 122 of the proposed BATAS defence, are unsupported by the facts. In particular, it is submitted that the extract of the transcript of the cross-examination of Eggleton, reproduced in the particulars under paragraph 122, does not support the characterisation of that evidence pleaded in paragraph 122 of the proposed defence. A similar submission is made by BATAL in respect of the same paragraphs in the proposed BATAL defence.

97 I do not accept that submission. In my view, there is sufficient correspondence between the substance of the evidence pleaded in paragraph 122, and the extracts of the transcript reproduced in the particulars. At the least, it is sufficiently arguable that paragraph 122 accurately and fairly reflects the substance of the evidence given by Eggleton in cross-examination in the McCabe proceeding.

Paragraph 147 of the proposed BATAL defence and paragraphs 151 of the proposed BATAS defence

98 Paragraph 151 of the proposed BATAS defence and paragraph 147 of the proposed BATAL defence each allege that, in the McCabe proceeding, Eggleton gave evidence to the effect summarised in subparagraphs (a) to (i) of the paragraph. Particulars to the paragraph are set out in Schedule 3 to the defence, which contains twenty extracts from the transcript of the cross-examination of Eggleton in the McCabe proceeding. BATAL and BATAS make four complaints about that pleading.

99 First, both BATAL and BATAS contend that no attempt has been made, by the third defendant, to identify which of the twenty transcript passages, in Schedule 3, relate to each of the nine subparagraphs ((a) to (i)) in paragraph 147 of the BATAL defence and in paragraph 151 of the BATAS defence. I do not accept that criticism of the defences. In my view, it was not necessary for the third defendant to descend to such specificity. There is some overlap between the various passages in the transcript. It is sufficient and appropriate for the third defendant to have pleaded what she says is the purport of the relevant transcript passages in the body of the pleading, and to have annexed, by way of particulars, the extracts of the transcript, from which those passages are derived.

100 The second criticism is that not all of the allegations in subparagraph (a) to (i) are supported by the particulars provided in Schedule 3. In the course of submissions, that discrepancy was repaired by Mr Burnside, who provided two further extracts in the transcript which do not form part of Schedule 3. The relevant parts of those transcripts will need to be transposed into Schedule 3.

101 Thirdly, it was pointed out that the extract of the transcript contained in subparagraph (xv) of the schedule is irrelevant to any of the matters alleged in paragraph 147 (of the BATAL defence) and paragraph 151 (of the BATAS defence). I agree with that criticism. The validity of it was accepted by Mr Burnside in submission. Accordingly, that subparagraph should be deleted from the particulars.

102 Finally, it was contended that the proposed defence is inadequate, in that it fails to properly plead how it is alleged that the evidence given by Eggleton, and summarised in paragraph 147 (of the BATAL defence) and 151 (of the BATAS defence) was misleading. In each proposed defence, the third defendant has set out a number of facts relating to Eggleton (BATAL defence paragraphs 137 to 146; BATAS defence paragraphs 141 to 150) by reason of which it is alleged that the evidence given by Eggleton was, in material respects, misleading. The plaintiffs complain that the proposed pleading does not "link" what is claimed to be the "true" facts with the evidence attributed to Eggleton in the pleading. In my view, it was not necessary for the third defendant to plead such a link. In most instances, the contrast between what is pleaded as the "true" facts, and the evidence attributed to Eggleton, may be readily perceived and assessed. If the pleading is unclear in any particular respect, an appropriate request for particulars would sufficiently address the issue.

103 In various parts of the proposed defence in each proceeding, the third defendant relies on a defence of "public interest". In particular, such a defence is pleaded in response to claims by the plaintiffs based on: contractual obligations of confidentiality; equitable obligations of confidentiality; and professional duties said to be imposed on the practitioners involved under the Professional Conduct and Practices Rules 2005 made under the Legal Profession Act 2004 (Vic). Typically, the plea takes the form that the relevant individual was not under any obligation to keep the information contained in the documents confidential if:

"(i) the instructions or the information were not privileged; and

(ii) there was a just cause or excuse for the use or dissemination of the instructions or the information, in that the use or dissemination of the instructions or the information was in the public interest and that public interest outweighed the public interest in the maintenance of (the plaintiffs) confidence in the instructions or the information."

104 Both BATAS and BATAL object to the defence based on public interest, on a number of grounds. Their primary submission is that the public interest defence to a claim for confidentiality in equity, as pleaded in both defences, forms no part of the law of Australia. In particular, it is submitted that the defence has been rejected by Kellam J in Australian Football League v The Age Company Limited[45], by Gummow J in Corrs Pavey Whiting and Byrne v The Collector of Customs (Vic),[46], by the Full Court of South Australia in Sullivan v Sclanders[47], and by the Court of Appeal in Cowell v British American Tobacco Services Limited[48].

105 The genesis of the plea of public interest, in response to a claim in respect of equitable obligations of confidentiality, is traced to the dictum of Wood VC in Gartside v Outram[49]. Subsequently, the defence gained some currency in England in Court of Appeal decisions such as Lion Laboratories Limited v Evans[50], Fraser v Evans[51] and Hubbard v Vosper[52]. In those cases, it was held that a claim based on the confidentiality of information may be defeated, where it can be demonstrated that the public interest in knowing the truth, as revealed by that information, outweighed the public interest in maintaining the right to confidentiality in the information.[53]

106 On the other hand, in Australia, that defence has had only limited acceptance. In David Syme & Co Ltd v GMH Ltd[54], Samuels JA cited, with approval, the position then adopted in the United Kingdom, namely, that the information need not necessarily reveal an iniquity, in order for a court to find that the public interest in disclosure of the information outweighed the public interest in maintaining the confidentiality in it. On the other hand, Street CJ[55] noted that the law on this topic was unsettled. His Honour expressed the view that since the case involved an appeal from the grant of an interlocutory injunction, the application of the defence should be addressed "with very considerable circumspection".

107 The approach of Samuels JA in David Syme found favour with Kirby P in AG (UK) v Heinemann Publishers Pty Ltd[56]. In that case, his Honour cited, with approval, the dissenting judgment of Lord Denning MR in Schering Chemicals Limited v Falkman[57], in which his Lordship had found that a pressing social need for protecting the confidence must exist before the maintenance of confidentiality will outweigh the public interest in the freedom of the press. In Esso Resources Limited v Plowman[58], Brennan J[59] observed that in determining the scope of an implied obligation of confidentiality, a party will not be taken to have intended that it would keep information confidential, when that party had an obligation, albeit not a legal obligation, to satisfy a public interest in knowing what is contained in the information. On the other hand, Mason CJ (with whom Dawson and McHugh JJ concurred) noted that the precise scope of the public interest exception remained unclear.[60]

108 On the other hand, in Corrs Pavey Whiting and Byrne v Collector of Customs (Vic)[61], and in Smith Kline & French Laboratories (Australia) Limited v Secretary Department of Community Services and Health[62], Gummow J rejected the approach adopted by Samuels JA and Kirby P, and held that the principle in Australia should be limited to information which revealed a recognised "iniquity". In Corrs Pavey Whiting and Byrne[63], Gummow J analysed, in some detail, the decision of the Vice Chancellor in Gartside v Outram, and the subsequent development of the "public interest" defence in England, based on the dictum of the Vice Chancellor in that case. Gummow J concluded that Gartside v Outram provided an insufficient basis for any "public interest defence", of the kind which had been developed in the recent English authorities.[64] His Honour held that if there is any principle of general application to be derived from Gartside v Outram, it would be expressed in a narrower compass, namely:

"That principle, in my view, is no wider than one that information will lack the necessary attribute of confidence if the subject matter is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed."

109 Those views were adopted by the Court of Appeal of South Australia in Sullivan & Ors v Sclanders & Anor[65]. In that case, the plaintiff (Sclanders) and the defendant (Sullivan) had been jointly involved in a business. After disputes arose between them, Sclanders was removed as managing director of the business. Subsequently, an associate of Sclanders by stealth removed documents from a suitcase of Sullivan without the permission of Sullivan, photocopied them, and forwarded the photocopies to Sclanders. When he read the documents, Sclanders came to the view that they revealed a pattern of behaviour on the part of Sullivan to deprive him (or his company) of his entitlements in the business. Sclanders, recognising the confidential nature of the documents, applied to the Court for an order that he be permitted to seek legal advice relating to the documents. The primary judge upheld that application, on the grounds that the public interest, in ascertaining the truth, outweighed the defendant's private right to confidentiality of the information contained in the documents. The Court of Appeal overruled that decision, holding that the confidentiality of the information contained in the documents should be protected, and that no exception to the rule, relating to their confidentiality, had been made out. Accordingly, the court ordered (inter alia) that the plaintiff be restrained from disseminating, or making use of, the contents of the confidential documents.

110 In reaching that conclusion, Gray J, who delivered the leading judgment, examined the authorities relating to the "public interest" defence, which was relied on by the plaintiff to defeat the defendant's claim to confidentiality. His Honour concluded that the application of the iniquity rule, as stated by Gummow J, is the correct approach, and that a general defence of public interest, to a claim for breach of confidence, does not form part of the law of Australia.[66] Thus, his Honour stated:

"... as a matter of strict legal principle I consider the application of the iniquity rule to be the correct approach. Equitable principles are best developed by reference to what conscionable behaviour demands of the defendant rather than by balancing those demands with matters of public interest. This approach avoids the ad hoc judicial idiosyncrasy associated with deciding whether, on the facts overall, it is better to respect or override the obligation of confidence."[67]

111 Prior J agreed with Gray J. In a short concurring judgment, Williams J stated:

"In my view the statement of principle by Gummow J in Corrs Pavey Whiting and Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434, 445 to 456 expresses Australian law with respect to the defences which are available in a civil suit for breach of confidence."[68]

112 The same approach was also adopted and applied by Kellam J in Australian Football League v The Age Company Ltd[69]. In that case, the Australian Football League sought to restrain the publication, by the defendants, of the identities of three unnamed footballers who, since the introduction of the AFL Illicit Drugs Policy, had tested positive to illicit drugs. The defendants contended that the information had lost its confidential character, both because it disclosed iniquity, and also because the public interest, in revealing "reprehensible criminal drug taking", warranted disclosure of the information. Kellam J rejected those submissions, and granted the injunction sought by the plaintiff. In doing so, his Honour gave detailed consideration to the question whether a defence of public interest existed. Having reviewed the authorities, Kellam J concluded that he should adopt the approach of Gummow J in Corrs Pavey Whiting and Byrne and of Gray J in Sullivan v Sclanders. Like Gray J, Kellam J considered that the narrower "iniquity rule" was the correct approach, on the basis that equity is better developed by reference to what conscionable behaviour demands.[70]

113 The recent decision of the Court of Appeal in Cowell v British American Tobacco Services Limited & Anor[71] also provides some additional support for the approach adopted by Gummow J. In that case, the Court of Appeal was concerned with an earlier ruling by Byrne J in the present proceedings, in which his Honour made orders permitting the defendants to use the Clayton Utz documents, referrable to BATAS, in the defence of the claim by BATAL. BATAS submitted that its claim to privilege to the documents had the effect that the defendants could not use them in the BATAL proceeding. The Court of Appeal rejected that submission, because, it considered, it was based on a misconception of the jurisdiction to enjoin the use of a publication in a proceeding. It is significant that, in doing so, their Honours, albeit by obiter dictum, expressed views as to the circumstances in which confidentiality may not to be enforced, in terms of the iniquity principle developed by Gummow J in Corrs Pavey Whiting and Byrne. Thus, the Court of Appeal stated:

"But since the jurisdiction to enjoin publication or use of privileged information is limited to such equity as may inhere in the confidentiality of the communication, ordinary principles dictate that injunction ought not go at the suit of an applicant who comes to equity with unclean hands or where the subject matter of the communication 'is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed'."[72]

114 In stating the iniquity principle in those terms, the Court of Appeal, by way of footnote, cited the passages from the judgments of Gummow J in Corrs Pavey Whiting and Byrne and of Kellam J in Australian Football League v The Ago Co Limited, to which I have referred.

115 The position, then, is that the Court of Appeal of South Australia has expressly adopted and applied the narrower view of the iniquity defence as espoused by Gummow J in Corrs Pavey Whiting and Byrne. Ordinarily, as a judge at first instance, I should not depart from the decision of an intermediate appellate court of another jurisdiction, unless I am convinced that that decision is plainly wrong.[73] Further, the narrower view of the iniquity defence has already been adopted by another judge at first instance of this Court, and the Court of Appeal of this State has expressed the principle in terms which are consistent with it. In those circumstances, as a judge at first instance, I consider that the state of authorities is such that I should apply to this case the principles which have been stated by Gummow J in Corrs Pavey Whiting and Byrne. In particular, I do not consider that the authorities, which are binding on me, permit me to apply a broad principle of "public interest", in the manner in which it has been developed in England, and in the manner in which it was stated by Kirby P in AG (UK) v Heinemann Publishers Pty Ltd.

116 In a practical sense, the conclusions which I have just expressed are, to a large extent, somewhat academic. The plea of public interest, in each proposed defence, is expressed in broad and unspecific terms. It does not identify what "use or dissemination" would be in the public interest; nor does it identify what "public interest" is referred to. As I stated, in the defence in each case, the third defendant has pleaded that she intends, and wishes, to use the information solely for the purposes of making an application to the Court of Appeal, or to the High Court, for orders setting aside the previous judgment and orders of the Court of Appeal in the McCabe proceeding. In the context of the proposed defence, as I understand it, the third defendant intends to use the documents before that court in order to obtain redress in respect of the iniquities, which she claims are either revealed by, or contained in, the documents, and which she has pleaded in the body of each defence. If that is the case, then the "public interest" plea would add little, if anything, to the iniquity plea in each defence. In oral submissions, Mr Burnside accepted that that is so. If I had permitted the public interest defence to remain in each defence, I would have required the third defendant to plead appropriate material facts, and to provide full particulars, defining the intended use of the documents, and the "public interest" referred to. I would anticipate that that requirement would have been met by little more than a reference to the matters already alleged in support of the iniquity defence pleaded in each defence.

117 In those circumstances, the "public interest" defence, in its current form, is defectively pleaded, even if it were available. On the current state of the authorities, I do not consider that it is part of the law of Australia. In any event, it adds little, if anything, to the defences already sought to be pleaded on behalf of the third defendant. In each case, I shall therefore disallow the plea, which are sought to be made on that basis to the claims by the plaintiffs based on equitable obligations of confidentiality. (BATAS defence paragraphs 13.1(c), 26.3(c), 76, 119, 138, 160, 179, 191; BATAL defence paragraphs 11.1(c), 19(b)(iii), 19(h)(vi), 21(a)(vi), 22(c), 31.1(c), 35(b)(iii), 41(b)(iii), 52).

118 That conclusion should not, of course, obscure the point that the principle, which underlies the iniquity defence, is based on a public interest in the disclosure of the relevant wrongdoing to a person who has a relevant interest in redressing that wrongdoing. In Cowell v British American Tobacco Services Limited[74] the Court of Appeal observed:

"So to say does not mean that the defences of 'unclean hands' and 'iniquity' should apply in exactly the same way to a legal professional privileged communication as to other kinds of confidential communications. Generally speaking, the rationale of both defences in this context is that there is a public interest in disclosure of iniquity which makes it unconscionable for the applicant to insist upon the maintenance of a confidence which would keep the iniquity secret. But, as has been seen, with legal professional privileged communications the public interest favours maintenance of the confidence of the communication unless the communication comes within one of the established exceptions to legal professional privilege."

119 In this context, it is important, of course, to differentiate between, on the one hand, matters which ought to be disclosed in the public interest, and those matters which are merely of public interest, in the sense that people would like to know them.[75] The public interest, which is relied on in respect of the iniquity defence in a case such as this, is the public interest in the redress by the court of a wrong revealed by the confidential information, particularly where the wrong alleged has occurred in the administration of justice by the court. It is that public interest which may be relevant in determining, in a particular case, whether the defendant has satisfied the requirement of the iniquity defence, that the information reveals the existence, or real likelihood of the existence, of a "crime, civil wrong or serious misdeed of public importance".

120 Paragraph 31.1(b) of the proposed BATAL defence pleads that the information, set out in Schedule 1 to the defence and marked "b", is "... information that discloses the existence, or the real likelihood of the existence, of a crime or fraud, namely the crimes and frauds referred to in paragraphs 43 to 169 below". That plea recites the formula, stated by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)[76], and which has, for shorthand purposes, been described as the "iniquity" defence to a claim based on confidential information. Schedule 1 contains a key, subclause (b) of which adopts the same formula. The schedule also includes, in the key, references to paragraph 47 (conspiracy) and to each of the subparagraphs (a) to (i) (but not (j)) of paragraph 47. In the table in Schedule 1, each item of information has a notation alongside it, reciting the number "47", together with the same number and one or more of the subparagraphs (a) to (i) adjacent to it. Thus, for example, in respect of document number 6 there is noted (inter alia) the letter "(b)", and "47, 47(e), 47(f), 47(g)".

121 Two criticisms are made of that pleading on behalf of BATAL. First, pursuant to paragraph 31.1(b) of the defence, the reference in the schedule to "subparagraph (b)" denotes a claim that the information in the document discloses the existence or real likelihood of the existence of "... a crime or fraud, namely, the crimes and frauds referred to at paragraphs 43 to 169 below". On behalf of BATAL it is complained that, on its face, the pleading purports to allege, in respect of each document, that it discloses the existence of the five crimes alleged in paragraphs 43 to 169, without specifying which of them is disclosed by the information in the document.

122 Pausing there, in my view the first criticism, thus made by BATAL, is valid. In written submissions made on behalf of the third defendant in response, it is stated that, as there are no references to paragraph 47(j) in Schedule 1, it is not part of the third defendant's case that the information, in Schedule 1, is connected with the five crimes or frauds expressly alleged in paragraphs 43 to 169. That response overlooks that, alongside each item of information in Schedule 1, there is denoted the letter "(b)", which, by the express terms of paragraph 31.1(b), means that each item of information in Schedule 1 is information which discloses the existence or real existence of those five crimes or frauds. If, as it seems, it is not intended that the proposed defence make that plea, then an appropriate amendment will need to be made to "disconnect" the reference to subparagraph (b) in an appropriate manner.

123 The response made on behalf of the third defendant, to the above criticism, points to a second problem in the pleading, which is also identified in the submissions made on behalf of BATAL. It seems that the intention of the third defendant is to plead that the information, referred to in the schedule, discloses the existence, or the real likelihood of the existence, of the overt acts pleaded in subparagraphs (a) to (i) of paragraph 47. However, none of those overt acts are pleaded to constitute a crime or a fraud. Rather, by their terms, they are pleaded as overt acts, from which the civil conspiracy, alleged in paragraph 46, is said to have been inferred. That being so, the defence thereby fails to specify the crime or fraud which is relied on, in paragraph 31.1(b) and paragraph 51 of the proposed defence.

124 It is clear, then, that those acting for the third defendant need to give further consideration to how it is to be alleged, both in the body of the pleading, and in Schedule 1, that the information in Schedule 1 discloses an "iniquity" of the kind described by Gummow J in Corrs Pavey Whiting & Byrne. In particular, the column "Cowell response" in Schedule 1 needs to be amended in order to properly convey, with some specificity, what crime or crimes (or fraud or frauds) are alleged to be disclosed by the information referred to in the schedule.

Public policy defence to contractual claims by BATAS for confidence

125 Paragraph 11 of the further amended statement of claim of BATAS alleges that it was an express term of the retainer of Clayton Utz by BATAS that Clayton Utz (including Dale) would keep "the instructions and any information received in the course of their work for BATAS confidential". Paragraph 12 of the further amended statement of claim alleges that it was an implied term of the retainer of Clayton Utz that Clayton Utz (including Dale) would keep confidential, and would not without BATAS's consent, use or disseminate -

(b) any other confidential information received in the course of their retainer by BATAS.

126 In paragraph 26 of the further amended statement of claim, it is pleaded that Dale breached those terms, by disclosing the information, over which BATAS claims confidentiality and privilege, to various persons, including Gordon. It is then pleaded (in paragraphs 27 to 32) that Gordon induced Dale to breach the terms of the retainer alleged in paragraphs 11 and 12. Paragraphs 33 to 35 plead that Gordon, in carrying out those acts, was acting as the legal practitioner and agent of the third defendant, so that his conduct is attributed (inter alia) to the third defendant.

127 In response to that claim, the third defendant, in paragraph 26.1 of the proposed defence, pleads that if the retainer of Clayton Utz by BATAS included the terms pleaded in paragraphs 11 and 12 of the further amended statement of claim, the application of those terms "in the circumstances of the Dale conduct" would be prejudicial to the administration of justice, and accordingly the terms are unenforceable on the ground that they offend against public policy.

128 On behalf of BATAS, it is submitted that that defence is misconceived. For, it is contended, if Dale was possessed of information to which the terms of Clayton Utz's retainer applied, that information was privileged and confidential information. Accordingly, it is argued, in the absence of some matter which denies the application of legal professional privilege, it could not be tenably suggested that some paramount public policy prevents enforcement of the terms of the retainer.

129 In my view, the short answer to that submission is that the terms of the retainer, pleaded in paragraphs 11 and 12 of the further amended statement of claim, are not confined to the confidentiality of information and instructions, which are privileged. Paragraph 11, which pleads the express term, refers not only to instructions, but also to "any information" received in the course of the solicitor's "work for BATAS". Paragraph 12, which pleads the implied term, purports to apply to three categories of information, expressed in the alternative (by use of the word "or"), namely, instructions, privileged information, or "any other confidential information" received in the course of the retainer. Irrespective of the application of recognised exceptions to legal professional privilege (such as communications which are in furtherance of a crime or fraud), in any event, not all information received by a solicitor in the course of a retainer is necessarily privileged.[77] Thus, the defence pleaded in paragraph 26.1, to the alleged express and implied terms, may have application to some of the non-privileged information which passed between BATAS and the solicitors, irrespective of whether it was received (for example) in the furtherance or course of the commission of a crime or fraud.

130 The second objection, made on behalf of BATAS to paragraph 26.1 of the proposed defence, is that it pleads a defence of "public policy" to a claim in contract, which is not known to law. Mr Wheelahan submitted on behalf of BATAS that the principle, that the law will not enforce a contractual obligation of confidence, where its enforcement would be inimical to the public interest, is only engaged where the obligation of confidence would frustrate the administration of the criminal law. He submitted that it is not necessarily engaged, because the enforcement of the obligation of confidence would interfere with the conduct of civil proceedings by a party.

131 In my view, the authorities, to which I was referred, do not confine the public policy defence to obligations of confidence which would frustrate the administration of the criminal law, but also permit the defence to apply, in an appropriate case, to obligations of confidence which would interfere with the conduct of civil proceedings by a party.

132 The leading case on this topic is the decision of the High Court of A & Ors v Hayden & Ors[78]. In that case, the judgments of the members of the High Court are, generally, expressed in terms that the relevant public policy is engaged where failure to disclose the information would tend to obstruct the administration of the criminal law.[79] However, those statements of principle were made in a case which concerned the disclosure of information relevant to the investigation of alleged crimes. It is, indeed, noteworthy that in their joint judgment Wilson and Dawson JJ stated the principle in terms that an obligation of confidentiality will not be enforced where its application might involve an "interference with the administration of justice".[80]

133 In Richards v Kadian[81], Beazley JA (with whom Hodgson JA and Stein AJA agreed) undertook an extensive analysis of the relevant authorities, in a case in which a defendant to proceedings, involving a claim for medical negligence, contended that enforcement of an obligation of confidentiality of the plaintiff's treating doctors would be inimical to the administration of justice in that case. The court dismissed an appeal by the defendant from a decision, in which the defendant had made an application that the proceeding be stayed until the plaintiff provided a written authority permitting his treating doctors to be interviewed by the representatives of the defendant.

134 Having reviewed the authorities in some detail, Beazley JA concluded that the principle, that an obligation of confidentiality will not be enforced if it interferes with the administration of justice, is not necessarily confined to criminal cases. Her Honour stated:

"The following, at least, is apparent from the foregoing cases. The principle that an obligation of confidentiality will not be enforced by a court, or will be treated as void if it interferes with the administration of justice, is not confined to criminal cases, but extended also to civil cases. That does not mean, however, that any interference will suffice to render an obligation of confidentiality unenforceable or void. Rather, in order for the protection of a confidence to be lost, there needs to be some public element relevant to the administration of justice that is affected. ... The mere fact that a confidentiality provision may have the effect of protecting the disclosure of a crime or some other wrong does not necessarily render the provision contrary to public policy. It will depend on all the circumstances, including what information is sought to be protected, the extent of the protection said to be afforded by any confidential agreement, whether the rights of third parties are necessarily affected and whether there are any wider public policy questions involved. In particular circumstances, the court may be required to weigh up or balance competing interests in determining whether the confidentiality clause should be enforced. ... ."[82]

135 Accordingly, in a particular civil proceeding, it may be inimical to the administration of justice for a confidentiality provision in a contract to be enforced. Applying the principle stated by the Court of Appeal in Richards v Kadian, it would, in such a case, be necessary to demonstrate that some public element, which is relevant to the administration of justice, would be adversely affected by maintenance of the confidentiality. In the present case, the proposed defence contains allegations that the information, in respect of which confidentiality is sought to be maintained by the plaintiffs, discloses the commission of offences, such as the attempt by legal practitioners and their clients to pervert the course of justice. The third defendant seeks to use that information to redress what she alleges were public wrongs committed by those parties in the administration of justice in the Supreme Court and in the Court of Appeal. In light of those allegations, I consider that the public policy defence, pleaded in answer to BATAS's contractual claims for confidentiality, is sufficiently arguable to permit the defence to be pleaded in the proceeding.

Defence to BATAS proceeding based on implied contractual terms of confidentiality subject to public interest

136 Paragraph 12.2(c) of the proposed defence in the BATAS proceeding pleads that there was to be implied, into any retainer of Clayton Utz by BATAS, a term (inter alia) that there was no obligation on Clayton Utz (including Dale) to keep instructions and information received in the course of work for BATAS confidential, if the instructions or information were not privileged, and if there was "just cause or excuse for the use or dissemination of the instructions or the information, in that the use or dissemination of the instructions or the information was in the public interest and that public interest outweighed the public interest in the maintenance of BATAS's confidence in the instructions or the information".

137 In objecting to that paragraph of the proposed pleading, counsel for BATAS referred to principle stated in the authorities that the test for the implication as a matter of law of a new class of term into a contract is the test of necessity.[83]

138 The defence has not pleaded any basis upon which a term, of such breadth, is alleged to have been implied into a contract by which a client retains a legal practitioner. Nor has any authority been cited to me on behalf of the third defendant, which would justify the implication of such a term into a retainer of a legal practitioner. It has not been demonstrated why, at least arguably, the implication of such a term into a retainer of a legal practitioner would be necessary. On its face, it would introduce a substantial element of uncertainty into the contract. Nor could it be arguably maintained that such a term would be implied as being so obvious that "it goes without saying".[84] Paragraph 12.2(b) of the defence pleads an implied term, which is equivalent to the "iniquity" defence pleaded in response to the fiduciary obligations of confidentiality. In light of that term, it is not apparent why it is also "necessary" to imply the term alleged in paragraph 12.2(c). Indeed, it would add little, if anything, to the terms sought to be implied by 12.2(b) in its application in the present case. For those reasons, I would disallow paragraph 12.2(c) of the proposed defence in the BATAS proceeding. It follows that the equivalent plea, in paragraph 10.2(c) of the BATAL defence, is also disallowed.

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