British American Tobacco Australia Services Limited v Cowell

549. In our opinion, both parties adopted a position which was too extreme. On the one hand it was troubling that the defendant seemed to be claiming carte blanche to destroy documents, however imminent the proceeding against it and however relevant, and obviously relevant, the documents would be. Suppose, for the sake of argument, a continuing dispute between neighbours over a fence line - or perhaps, as in one of the cases to be mentioned, a continuing dispute between employer and employee over the dangers and risks involved in repetitive work of a certain type. It surely cannot be the case that the prospective defendant, learning that litigation was about to be commenced against it, could simply destroy all relevant records bearing upon the principal issue, for the purpose only of defeating the claim when brought against it. On the other hand, if it be supposed, for the sake of argument, that there is some impediment to such conduct by a person apprehensive of litigation against him or her, how far back does the obligation to preserve documents reach? It surely cannot be, as suggested by the plaintiff in argument, that the defendant was in this instance at fault in destroying documents in 1985 because those documents might well be (or perhaps were) relevant in this proceeding which the plaintiff commenced against the defendant in 2001. It must remembered that a hold order, precluding the implementation of the document retention policy, was put in place in November 1990 once litigation commenced against the defendant in Australia, and that the last of those hold orders was revoked only in March 1998. Yet the plaintiff's claim to have the defence struck out relied not only on the destruction of documents in 1998; it went back much further than that (although to what precise, or even approximate, date if not "early 1990"[178], was not clear made clear on appeal).

552. The common ground was that there was no authority directly governing the problem raised for decision in this instance. In order to establish that the court had the power to act if a "fair trial" was denied, the judge referred to four English decisions, but on examination they do not go so far. In Coleman v Dunlop Ltd.[179] in the course of a retrial in the County Court after a successful appeal by the plaintiff, the plaintiff obtained an order striking out the defence as to liability and entering judgment for the plaintiff with damages to be assessed. The order was based upon the failure of the defendants to provide adequate or proper discovery of documents relevant to liability in the context of what had become quite protracted litigation. The decision was affirmed by the Court of Appeal.

555. In Coleman the plaintiff was suing for damages for personal injury sustained in the course of employment by the defendants and the essential question was whether the nature and extent of the work required of the plaintiff by his employer made injury foreseeable. A critical issue was the speed at which the plaintiff was required to work and the weight of the work he performed as an assembler in the carbon brake department. It was established, on the hearing of the application to strike out which was made in the course of the retrial, that relevant records had been kept but that these records had been destroyed in a fire, or in the efforts to extinguish the fire, which had occurred in 1995 - after the commencement of the commencement of the present proceedings and after discovery had apparently been completed. In the end, the defendants accepted that documents that had been available and discoverable were no longer available and that they should have been disclosed at an earlier stage.

558. The application to strike out the defence as to liability was based upon two grounds: first, non-compliance with requirements for discovery and, secondly, abuse of process making a fair trial impossible. The trial judge rejected the second ground, but concluded the first was established. The defendants appealed against her conclusion and the plaintiff sought, if necessary, to uphold the decision on the second ground as well as the first. The Court of Appeal, speaking through Judge, L.J., upheld the judge's decision in so far as it rested upon non-compliance with the provisions for discovery, and found it unnecessary to consider the second ground.[180] The trial judge had held that the missing documents went to the core of the plaintiff's case and that the deficiencies in discovery could no longer be made good so that a fair trial was not possible. Judge, L.J. said that he found himself "entirely persuaded without the slightest difficulty, by the judge's approach and analysis of the submissions made to her".

561. Thus Coleman said nothing at all about the alternative ground, of abuse of process making a fair trial impossible; it rested simply upon the failure of a party to comply with the requirements for discovery, where compliance had been possible at the commencement of the proceeding but was no longer possible because the relevant records had in the meantime been destroyed in a fire or as the result of the fire (which may be supposed to have been an accident). The case says nothing about documents destroyed prior to the commencement of the proceeding, let alone the deliberate destruction of documents with a view to prejudicing a prospective plaintiff. None the less Coleman was the only case to which we were referred dealing with default by a defendant.

564. In Logicrose Ltd v Southend United Football Company Ltd.[181] it was alleged that Harris, the principal director and shareholder of the plaintiff (and its principal witness) had not merely failed to disclose the existence of a crucial document in his possession or power, but, having obtained it during the course of the trial (and indeed during the course of his cross-examination) had deliberately suppressed it, and for a time had successfully concealed its existence from the court. Millett, J., however, was not satisfied that that allegation was established. In rejecting the submission that the relevant standard was the criminal one, his Lordship drew a contrast between punishing an offender for the crime of contempt and responding when a party disregards his or her obligations even in the absence of contempt, saying: -

"Deliberate disobedience of a peremptory order for discovery is no doubt a contempt and, if proved in accordance with the criminal standard of proof, may, in theory at least, be visited with a fine or imprisonment. But to debar the offender from all further part in the proceedings and to give judgment against him accordingly is not an appropriate response by the Court to contempt.[182] It may, however, be an appropriate response to a failure to comply with the rules relating to discovery, even in the absence of a specific order of the Court, and so in the absence of any contempt, not because that conduct is deserving of punishment but because the failure has rendered it impossible to conduct a fair trial or would make any judgment in favour of the offender unsafe. In my view a litigant is not to be deprived of his right to a proper trial as a penalty for his contempt or his defiance of the Court, but only if his conduct had amounted to an abuse of the process of the Court which would render any further proceedings unsatisfactory and prevent the Court from doing justice. Before the Court takes that serious step, it needs to be satisfied that there is a real risk of this happening."

In the end, after considering the evidence, his Lordship concluded that is was "quite impossible for me to be satisfied on the evidence before me at this stage that Mr. Harrison deliberately attempted to suppress [the document in question]" and for that reason the application was dismissed. But his Lordship added that he "would in any event, have refused to accede to this application once the missing document had been produced", because the object of Order 24 Rule 16 is "not to punish the offender for his conduct but to secure the fair trial of the action in accordance with the due process of the Court". Millett, J. was satisfied that there was no risk of injustice if the trial was allowed to continue. He said:-

"The deliberate and successful suppression of the material document is a serious abuse of the process of the court and may well merit the exclusion of the offender from all other participation in the trial. The reason is that it makes the fair trial of the action impossible to achieve and any judgment in favour of the offender unsafe. But if the threat of such exclusion produces the missing document, then the object of Order 24 Rule 16 is achieved."

570. The plaintiff relies on this, pointing to the inability now of the defendant to repair the wholesale destruction of documents that took place in March 1998 and earlier pursuant to the document retention policy; but again Millett, J. was speaking in the context of a document allegedly coming to hand in the course of the trial, and, indeed, during cross examination. That is not this case. Logicrose says nothing, it seems to us, about the suppression of documents before the commencement of the proceeding. Interestingly, in view of the complaint in this case made by the defendant that the judge had never ordered the plaintiff to give particulars of precisely what was being alleged against the defendant in support of the application made on 25 January, Millett, J. recorded (on page 4 of 10) that he had directed a pro forma notice of motion be served on the plaintiff "so that they might know exactly what was alleged".

573. For its part, the defendant relied upon this passage in the judgment of Millett, J:-

"This might well be the case [i.e., exceptional circumstances requiring action by the court] if it was no longer possible to remedy the consequences of the document's suppression despite its production, perhaps because a material witness who could have dealt with the document had died in the meantime or where, despite the production of the document, there was reason to believe that other documents have been destroyed or remain concealed. But I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice."[183]

With some force, counsel for the defendant submitted to us that at first instance on this occasion the judge had indeed allowed his indignation to carry the day. His Honour expressly accepted that this was not a case for punishment for misconduct: his Honour addressed the question whether there was a real risk that the further conduct of proceedings must be unsatisfactory, but in the context of misconduct allegedly occurring before the commencement of the proceeding, not during it.

578. In Landauer Ltd. v. Comins & Co.[184], it was again the plaintiffs who were in breach of their discovery obligations under the rules. A number of relevant documents which were not at first listed by the plaintiffs as part of discovery had since been destroyed. Reliance was placed upon Order 24 rule 16(1) which, upon default in compliance with the requirements for discovery, authorised the court to make such order as it thought just, including an order that the action be dismissed or the defence struck out and judgment entered accordingly. The County Court judge had struck out the plaintiffs' claim for failure to comply with a requirement as to discovery and, as Lloyd, L.J. said in the Court of Appeal, there was no doubt that the judge had had jurisdiction to make the order which he did. The plaintiffs contended, however, that the exercise of the discretion had miscarried in the particular circumstances of the case. The appeal was dismissed.

"The writ was issued on 2nd August 1986. On 11 September 1987 the plaintiffs furnished their first list of documents. The list was defective, since a number of relevant documents were omitted altogether, some of these documents had already been destroyed. Others were destroyed later. The destruction took place in three phases. The first phase was as a result of a policy of destruction initiated in October 1986, a few months after the writ was issued. Further destruction took place in February 1989, when the plaintiffs moved their offices. The final phase was in June 1990, when Mr. Axford retired. There is an issue between the parties as to the plaintiffs' state of mind when carrying out their policy of destruction. The defendants do not say that the plaintiffs deliberately destroyed documents which they knew to be relevant to these proceedings in order to prevent them coming to the eyes of the defendants. But they do say, or at any rate did say in the court below, that the plaintiffs carried out their policy of destruction in knowing disregard of their discovery obligations. In other words, they destroyed these files without first checking the files to see whether they contained any relevant documents. That applied particularly to documents destroyed by Mr. Axford in June 1990, despite advice which the plaintiffs had received from their solicitors. Mr Axford on the other hand, in his affidavit, says that the destruction of the documents was inadvertent."

585. It is plain then that in Landauer, as in Coleman, the destruction of documents occurred after the commencement of proceedings - and in the end it did not matter whether the destruction had been deliberate or inadvertent. It was held that the County Court judge had been "fully entitled to find that there was a serious risk that essential documents may have been destroyed in this case as a result of which a fair trial of the action is no longer possible, that being the test which he had been invited to apply", and it could not be said, in the view of the Court of Appeal, that the judge was "plainly wrong" in his application of it, even assuming in the plaintiffs' favour that the destruction of documents was merely inadvertent.

588. About this last, however, Lloyd, L.J. went on to say this[185]:-

"There was, however, some discussion in argument before us as to what would have been the position if the documents had been destroyed in knowing disregard of the plaintiffs' obligation as to discovery. I find some difficulty in seeing how, if the sole question is whether a fair trial can still be held, the conduct of the plaintiffs in destroying the documents, whether it was merely inadvertent or whether it was in knowing disregard of their obligation as to discovery and therefore more blameworthy, can be fitted into the equation. But the question does not arise in the present case. It will need careful consideration when it does arise."

His Lordship adopted the view of Millett, J. in Logicrose "that it was not part of the function of the court in exercising its discretion under Order 24 rule 16 to punish the party in default". He reserved, for further consideration, however, cases of contumacious conduct[186] "such as the deliberate suppression of a document" which, his Lordship said, might justify the striking out "even if a fair trial was still possible". Such cases "must necessarily be extremely rare", he added.

593. Thus again, the case says nothing about the destruction of documents before the commencement of proceedings. It raises an interesting question about the proper test where essential documents are destroyed in consequence of which a fair trial may no longer be possible, particularly if that conduct is not deliberate but inadvertent (or as in Coleman accidental) and it suggests that the test of fair trial may not always be helpful. But it says nothing, we emphasise, about the destruction of documents before the commencement of the proceeding. Even the first phase of destruction occurred a few months after the writ was issued and, whatever might be said of that, there was further destruction of documents after the provision of the first list of documents.

596. Arrow Nominees Inc. v. Blackledge[187], another case referred to in his Honour's reasons for judgment, concerned forgery. An application was made by certain of the respondents to strike out a petition for relief under s.459 of the Companies Act 1985 on the basis of unfair conduct in relation to the affairs of the company. Their application was made because of an attempt by one Tobias "to pervert the course of justice by the production in the course of standard discovery of documents which he knew to be forged", thereby making (it was alleged) a fair trial of the petition impossible. In the Chancery Division, a judge held that he was not satisfied on the material before him that a fair trial was impossible, but he reserved to the applicants the right to renew the application should evidence emerge of other breaches of the disclosure obligations. The applicant-respondents appealed and the appeal was allowed, the Court of Appeal ordering that the petition be struck out. That was because the judge had concluded that, on one of the issues raised by the petition, "there was a substantial risk that the allegations ... were incapable of a fair trial" and, on the analysis adopted by the Court of Appeal of the other issues in the case, the judge's conclusion meant in truth that there was "no case for relief which remained to be tried" (para 53). It was very much a decision on the facts.

599. Of more immediate interest to the present proceeding is the further proposition of Chadwick, L.J. (in para 54); for his Lordship adopted, as a general principle, the observations of Millett, J. in Logicrose -

"... that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the Court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules - even if such disobedience amounts to contempt for or defiance of the court - if that object if ultimately secured, by (for example) the late production of a document which has been withheld".

"But where a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled - indeed I would hold bound - to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. The reason, as it seems to me, is that it is no part of the court's function to proceed to trial if to do so would give rise to a substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in a trial. His object is inimical to the process which he purports to invoke."

"In my view, having heard and disbelieved the evidence of Nigel Tobias as to the extent of his fraudulent conduct, and having reached the conclusion (as he did) that Nigel Tobias was persisting in his object of frustrating a fair trial, the judge ought to have considered whether it was fair to the respondents - and in the interests of the administration of justice generally - to allow the trial to continue. If he had considered that question, then - as it seems to me - he should have come to the conclusion that it must be answered in the negative."

607. Two things may be said of this. First, this was a case in which, after the commencement of the proceeding, Tobias had deliberately indulged in fraudulent conduct designed to mislead the court by the production in the course of discovery of documents which he knew to be forged and, secondly, he had persisted in that fraudulent conduct during the proceeding. The case therefore says nothing directly about conduct, such as the destruction of documents, before the commencement of the proceeding[188]. It was anyway, quite plainly, a case of one party attempting to pervert the course of justice.

610. In the course of his Honour's reasons, reference was made also to the position in the United States where, his Honour said, "the extension of the court's regulatory power to contemplated litigation is well recognised" and, he added, "predates the tort of spoliation which has applied in many States since 1984", citing Smith v. Superior Court[189]. In Smith the defendant had agreed with the plaintiff's counsel to maintain certain automotive parts which were physical evidence in the case, pending further investigation; yet the defendant later destroyed, lost or transferred the physical evidence, making it impossible for the plaintiff's experts to inspect and test those parts in order to pin-point the cause of failure of a wheel assembly on a van. Though the tort of spoliation was indeed recognised in Smith, the defendant submitted before us that reference to the tort was unhelpful, if not error, inasmuch as Smith was the first case to recognise the tort; that only eight states had since recognised it[190]; and that both California and Texas no longer recognise the tort as between parties[191]. Nor was it a tort recognised in Australia.

613. The trial judge referred also to Willard v. Caterpillar Inc.[192] In that case the tort of spoliation was invoked for the destruction of evidence before the injury giving rise to the underlying prospective claim for damages, but (as Mr. Myers pointed out) the court there concluded that the claim should not have been submitted to the jury. Further Willard was itself disapproved by the Supreme Court of California in Cedars-Sinai Medical Center v. Superior Court of Los Angeles County[193], the court expressing the opinion that relying upon existing non-tort remedies was preferable to creating a tort remedy[194]. And much the same was said in Canada, in Spasic v. Imperial Tobacco Ltd.[195].

616. In Spasic, which was another claim by a smoker against a tobacco company for damages for personal injury, Cameron, J. said this of the tort of spoliation:-

"There is in Canada a rebuttable rule of evidence omnia praesumuntur contra spoliatorem. In appropriate circumstances, where a party destroys a document the court may presume that the document was detrimental to that party's case: St. Louis v. The Queen (1895), 25 S.C.R. 649.

The tort of spoliation by a party to a lawsuit is recognized in some states of the United States but not in others. It originated in California in the 1970's or early 1980s. It is based on the intentional, or sometimes negligent, destruction of important evidence which disrupts the plaintiff's case in forthcoming litigation. This raises a duty to preserve the evidence. Some courts say the duty arises only when the prospect of litigation is certain while others suggest the duty can arise when litigation is reasonably anticipated or probable. Some courts require the existence of a special duty to preserve the evidence created by statute or contract.

The tort is regarded as a clandestine form of obstruction of justice which can have a devastating effect on a potential plaintiff and its ability to obtain justice. The U.S. courts regard a prospective civil action in a product liability case as a valuable probable expectancy or a property interest which the court must protect from such interference, even though the plaintiff's damages cannot be stated with any certainty. The courts which recognize the tort consider that the traditional procedural and non-procedural remedies are inadequate to prevent the spoliation. See Smith v. Superior Court, 151 Cal.App.3d 191, 198 Cal.Rptr. 829 (1984); Foster v. Lawrence Memorial Hospital, 809 F.Supp. 831 (D. Kan. 1992); Hazen v. Municipality of Anchorage, 718 P.2d 456 (Alaska 1986) (Supreme Court); Smith v. Howard Johnson Company Inc., 615 N.E.2d 1037 (Ohio 1993); St. Mary's Hospital, Inc. v. Brinson, 685 So.2d 33 (Fla. App. 4 Dist. 1996); Viviano v. CBS Inc., 597 A.2d 543 (N.J. Super A.D. 1991) at pp.549-50; Henry v. Deen, 310 S.E. 2d 326 (N.C.) 1984)."

In Canada, said Cameron, J., the law relies rather upon procedural sanctions remedies. And so it is in Australia. The question on this appeal is the sufficiency (and applicability) of the procedural remedies available, not the invocation of a new tort.

623. In one sense, therefore, this discussion of the tort of spoliation is a diversion; as the judge himself recognised, the tort forms no part of our law. What he said, however, was this:-

"Although that tort [of spoliation] does not exist in this country the underlying rationale for the principle applied by the American courts could as readily be applied with respect to the rules relating to discovery in this country, in my opinion."

It was in that context that his Honour referred to Willard and also to Bowmar Instrument Corp v. Texas Instruments Inc. [196] (a case of failing to produce documents under subpoena), quoting from each, in relation to the conduct of a party prior to the commencement of the proceedings, this same passage[197]:-

"The proper inquiry is whether the defendant, with knowledge that this lawsuit would be filed, wilfully destroyed documents which it knew or should have known would constitute evidence relevant to this [or the] case".

Plainly that was the principle which his Honour drew from the American cases to support the order to strike out the defence in this instance for destruction of documents, though it occurred before the commencement of this proceeding (and if in 1998 at a time when no proceedings at all were on foot against the defendant).

630. There is no doubt that in America the courts do inquire into conduct before the commencement of the litigation when considering spoliation, and in particular the destruction of documents. But much care is needed when seeking to apply that learning to the position in Australia. That is because the topic is approached in the United States somewhat differently. Even where the tort of spoliation is not at issue (either because it is not recognised or because it is not relied upon) the destruction of documents before suit commenced is not explored simply in the context of the question whether to strike out the offender's pleading; it is explored in the wider context of imposing "sanctions" for that conduct and those sanctions, although they include striking out the whole or part of a pleading, include also the drawing of adverse inferences, the exclusion of particular evidence and the exaction of pecuniary penalties by way of costs or additional costs. Hence the inquiry into whether the conduct was deliberate, whether it was done after notice that litigation was likely, and so on. Obviously adverse inferences, or indeed penalty costs, would ordinarily not be justified if documents, however relevant, were destroyed by sheer accident; aliter, if destroyed deliberately by a prospective defendant, either after the commencement of the litigation against it or in full knowledge that suit was about to be instituted. That explains why the "proper inquiry" was described as it was in Bowmar and Willard.

633. In this connection reference may be made to a number of cases in federal District Courts by way of illustration. In Turner v. Hudson Transit Lines[198] a passenger injured in a bus accident sued the owner-operator alleging improper equipment and negligence. He applied to have sanctions imposed on the defendant for destroying the bus maintenance records, after the commencement of the litigation. What the plaintiff sought was a direction to the jury that they might infer that the records would have demonstrated that the bus had bad brakes. It was held that the obligation to preserve evidence arose even before the commencement of litigation, at least if a defendant was on notice; but in this case an adverse-inference direction was refused for want of sufficient evidence that the documents had been destroyed in order to prevent discovery. That did not preclude all relief, however, as sanctions wore two aspects (said the judge), remedial and punitive. Though an adverse inference was inappropriate, penalty costs were to be paid for the defendant's "unjustifiably destroying documents after litigation had been commenced".

636. In Shaffer v. RWP Group Inc.[199] adverse inferences did constitute the sanction imposed by the court on the defendants for the destruction of evidence "relevant to pending, imminent or reasonably foreseeable litigation". In Dillon v. Nissan Motor Co. Ltd.[200] it was the plaintiff whose conduct was under scrutiny. Before commencing his proceeding for injury he sustained allegedly through a defect in a motor vehicle, the plaintiff had had the vehicle inspected by an expert and had then arranged for it to be destroyed, and in consequence he was denied the right to lead evidence of the inspection at trial - a sanction akin to an adverse inference about what further inspection would have revealed. In Donarto v. Fitzgibbons[201] one of the defendants had destroyed the headlights of one of the cars involved in the accident that caused the plaintiff's injuries, though the defendant was (it seems) on notice "prior to the filing of this case"[202] that the vehicles were to be preserved. In Millsap v. McConnell Douglas Corporation[203], evidence was destroyed after the commencement of litigation, but, as appears common in the American cases, it was accepted by the court that the obligation to preserve evidence attached as soon as a party was on notice that litigation was imminent and the evidence material.[204]

639. The effect of the American cases was put pithily in Turner: when the court is asked to draw adverse inferences, two important factors to be weighed are intent and content: intent of the offending party and content of the evidence. In respect of the first, the commencement of litigation can scarcely be determinative; it is surely enough that the offending party is on notice that the evidence in question will shortly be needed[205]. Yet none of that is in issue on this appeal; as already noticed, all of the advice given the defendant was that, if documents were destroyed, adverse inferences might be drawn against it, should circumstances so warrant. That was never questioned. What is now in issue was whether the court could properly strike out the defendant 's pleading for destroying documents at a time when litigation was not on foot, and on that issue cases on the drawing of adverse inferences are not directly relevant.

642. If the American cases are to be regarded at all, cases in which the defence was struck out, or application to strike out was explicitly refused, will be more helpful than those in which the sanction sought and imposed was the drawing of adverse inferences. In Carlucci v. Piper Aircraft Corporation[206], default judgment was entered against the defendant, an aircraft corporation, in an action for damages arising out of a plane crash in which three people died. There was an extensive history of misconduct by the defendant, including a practice of destroying engineering documents with the intention of preventing them from being produced in law suits. On that issue alone, District Judge Campbell held it appropriate to enter a default judgment, saying:-

"I conclude that the defendant engaged in a practice of destroying engineering documents with the intention of preventing them from being produced in law suits. Furthermore, I find that this practice continued after the commencement of this law suit and that documents relevant to this law suit were intentionally destroyed. I am not holding that the good faith disposal of documents pursuant to a bona fide, consistent and reasonable document retention policy cannot be a valid justification for a failure to produce documents in discovery. That issue never crystallised in this case because [the defendant] has utterly failed to provide credible evidence that such a policy or practice existed. Having determined that [the defendant] intentionally destroyed documents to prevent their production, the entry of a default is the appropriate sanction. Deliberate, wilful and contumacious disregard of judicial process and the rights of opposing parties justifies the most severe sanction. ... The policy of resolving lawsuits on their merits must yield when a party has intentionally prevented the fair adjudication of the case. By deliberately destroying documents, the defendant has eliminated the plaintiffs' right to have their cases decided on the merits. Accordingly, entry of a default is the only means of effectively sanctioning the defendant and remedying the wrong."[207]

The judge went on to hold that the entry of a default judgment was also warranted in respect of other misconduct on the part of the defendant. It is interesting, however, that the destruction of documents "continued after the commencement of this law suit", which brings this case closer to the English cases already rehearsed, where conduct, committed during the course of the proceeding, could be regarded as contumacious.

647. Carlucci may be contrasted with Capellupo v. FMC Corporation[208]. In that case one of three co-plaintiffs suing their employer advised her employer's equal opportunity manager, "during the summer of 1983", that she was "fed up with" the company's gender-based treatment and that she was contemplating bringing a class action against it accordingly. In October 1983, the company's solicitors "systematically destroyed [the company's] documents relating to ... employment practices and the employee relations department's personally held records relating to equal opportunity and employee complaints of discrimination". In November 1983, the company received the plaintiff's equal opportunity claim. The three plaintiffs sought sanctions against their employer for the alleged intentional destruction of evidence and sanctions were imposed, although summary judgment was refused. District Judge Rosenbaum considered that there was other evidence concerning the company's liability, if any, and so he ordered the defendant to pay to the plaintiffs an amount equal to twice their costs of the application.

650. In the course of his judgment, the judge said:-

"Sanctions are appropriately levied against a party responsible for causing prejudice when the party knew or should have known that the destroyed documents were relevant to pending or potential litigation. ... This tenet is particularly applicable when a party is on notice that documents in its possession are relevant to existing or future litigation, but still abrogates its duty of preservation. The Court finds sanctions to be absolutely appropriate in this case. The conduct of the defendant's officers and employees, both in the destruction of documents and in their efforts to disguise their wrongful acts, are charitably described as `outrageous'. ... They have demonstrated a `deliberate, wilful and contumacious disregard of the judicial process and the rights of [the] opposing party':[209] Carlucci, 102 F.R.D. at 486. ... The Court holds that the defendant's senior officials and senior employees were on notice of this potential lawsuit and were acutely aware of its subject. Those individuals reacted by instituting a broad program of document destruction. Given these facts, sanctions are more than appropriate."

As to which sanction should be imposed, his Honour said of striking out:-

"The most severe sanction available to the Court is default and dismissal. This is an extreme measure, reserved only for the most egregious offenses against an opposing party or a court. The Court must consider default and dismissal as a last resort if no alternative remedy by way of a lesser, but equally efficient, sanction is available. See Perkinson, 821 F.2d at 691; Adolph Coors Co. v. Movement Against Racism and the Klan, 777 F.2d 1538, 1542-43 (11th Cir.1985); Alexander, 687 F.2d at 1205-06; Fox, 516 F.2d at 993; EEOC, 690 F.Supp. at 998; Carlucci, 102 F.R.D. at 486."

656. The foregoing is sufficient to demonstrate how limited is the nature of the authority available. Nothing governs directly, and there are many questions raised (especially by the cases in England) even where the destruction of documents occurs after the commencement of a proceeding, let alone before it. The judge here was disposed to accept a "fair trial" as constituting the relevant criterion, but when documents are destroyed before the commencement of a proceeding, that test is less than helpful. After all, what is a "fair trial"? According to the defendant, there is a fair trial if, according to the rules of court and the obligations of the parties to the court, the court adjudicates upon the documents put in evidence and the oral testimony of the witnesses during the hearing. Of course what is a "fair trial" must inform any test which is adopted, but it cannot stand in place of one.[210]

659. As indicated at the outset, it seems to us that there must be some balance struck between the right of any company to manage its own documents, whether by retaining them or destroying them, and the right of the litigant to have resort to the documents of the other side. The balance can be struck, we think, if it be accepted that the destruction of documents, before the commencement of litigation, may attract a sanction (other than the drawing of adverse inferences) if that conduct amounts to an attempt to pervert the course of justice or (if open) contempt of court, meaning criminal contempt (inasmuch as civil contempt comprises wilful disobedience of a court order[211] and will ordinarily be irrelevant prior to the commencement of proceedings). Such a test seems to sit well with what has been said in the United States as well as what has been said in England. Whether contempt, even criminal contempt, is possible before any proceeding has been instituted need not be examined on this occasion. (For instance, in James v. Robinson[212], which did not involve disobedience of a court order, it was said that that there can be no contempt of court before there is any litigation actually on foot, but, as the majority in the High Court pointed out[213], that case concerned only the narrower type of contempt, namely interference with the fair trial of a particular cause.[214]) Certainly, there can be an attempt to pervert the course of justice before a proceeding is on foot, as R. v. Rogerson[215] demonstrates, and that, we think, provides a satisfactory criterion in the present instance. The standard of proof is the civil rather than the criminal standard, bearing in mind also the seriousness of the allegation as required by Dixon, J. in Briginshaw v. Briginshaw[216] (as modified or explained in Neat Holdings Pty. Ltd. v. Karajan Holdings Pty. Ltd[217]). Both attempting to pervert the course of justice and contempt of court (in the relevant sense) are criminal offences, but where a civil sanction is sought a civil standard of proof suffices: Helton v. Allen[218] and Rejfek v. McElroy[219], compare Logicrose per Millett, J.[220] There is considerable force, we think, in Mr. Myers' submission that the rule of law is endangered if intervention by the court, for conduct occurring before the commencement of litigation, were to be grounded otherwise than on illegality, albeit illegality proved to the civil standard.

662. In the present case, the plaintiff did not seek to put her case on the basis either of attempting to pervert the course of justice or contempt of court (as the judge specifically noted[221]) and accordingly, as that was not the case put and considered below, it would not be appropriate to consider it on this appeal. No notice of contention was filed and, although during argument Mr. Hughes made a belated attempt[222] to put the case on the basis of the former, that should not be permitted at this late stage[223]. As defendant's counsel pointed out, had there been such a serious allegation made below, of a criminal offence, the course of the plaintiff's application must have been very different. Those accused (other than the company itself[224]) would have had available to them the protection against self-incrimination and against exposure to penalties; all would have enjoyed the right to silence; the filing of affidavits must have attracted different or at least additional considerations on the defendant's part; and no doubt the judge would not have allowed the application to evolve as it did, over the days of hearing. The application made at the outset by Mr. Middleton for the defendant, that the plaintiff be required to furnish proper particulars of what was being alleged against the defendant, must surely have met with a more favourable response from the judge, and well before day 7.

665. Accordingly, there being no authority directly in point, we consider that this court should state plainly that where one party alleges against the other the destruction of documents before the commencement of the proceeding to the prejudice of the party complaining, the criterion for the court's intervention (otherwise than by the drawing of adverse inferences, and particularly if the sanction sought is the striking out of the pleading) is whether that conduct of the other party amounted to an attempt to pervert the course of justice or, if open, contempt of court occurring before the litigation was on foot. We say nothing about the drawing of adverse inferences because that is not raised for consideration on this appeal. Nor, for the reason already given, do we express any opinion at all on whether the conduct which was under challenge in this instance, and which the defendant sought to justify by reference to its document retention policy, did or did not amount to an attempt to pervert the course of justice. That it did was not the case raised and considered below and so for the purpose of this appeal it must be taken that at first instance the court was not entitled to impose any sanction on that ground. More particularly it must follow too, contrary to his Honour's conclusion, that the destruction of documents by the defendant in March-April 1998, and before, was not shown to be in breach of any rules relating to discovery in this proceeding.

669. It was immediately after setting out his more significant findings of fact (in paragraph 289 of the reasons for judgment) that the judge turned to the question of prejudice to the plaintiff, which he subtitled "Denial of a fair trial". The treatment of prejudice wore two aspects: prejudice by reason of non-compliance by the defendant with its obligations to discover according to the order made on 6 December 2001 and, secondly, prejudice through the deliberate destruction of documents by the defendant over many years (not only in 1998 after the end of the Cremona litigation) for the purpose of prejudicing those who, like the plaintiff, might thereafter commence litigation against the defendant alleging personal injury through smoking. Obviously the two aspects could overlap. As the judge observed at the outset (in paragraph 290 itself):-

"It is impossible to precisely access what documents may have been destroyed in 1998, and earlier, and to what extent there has been a failure to give full and complete discovery as to documents in the categories for which I ordered discovery."

673. None the less it is necessary to consider each of the two aspects of prejudice separately, not least because the plaintiff submitted that his Honour saw each as entitling the plaintiff to the relief which was ultimately granted[225]. In fact his Honour put it somewhat differently, saying that, as he saw it, the defendant's failure to comply with the order for discovery was such as to empower him to make an order granting the plaintiff relief under the rules "even if the destruction of documents, of itself, was not open to be regarded as constituting a breach of the rules relating to discovery by virtue of the fact that it occurred before the proceedings were issued"[226]. At the end of the day the judge made the order striking out the defence for all of the reasons given, including both non-compliance with the order for discovery and the wholesale destruction of documents, but (as the plaintiff contended) as his Honour saw it the order could rest upon the former alone[227]. The defendant submits that was error and we agree.

676. Of course, non-compliance with an order for discovery is the very thing which enlivens the court's power under Rule 24.05 to strike out the defendant's pleading[228]: see also the alternative procedure to like effect in Rule 29.12.1. But whichever route be followed, the granting of the relief prescribed by rule obviously depends upon the nature and extent of the prejudice suffered by the plaintiff in consequence of the defendant's default. As Millett, J. observed in Logicrose, supra, the rules do not exist to punish. Yet in this instance, submitted the defendant, the judge found no prejudice - or no significant prejudice - arising from the defendant's defaults, as found, in complying with the order of 6 December 2001.

679. The 15 child smoking studies provide an example. These were clearly the subject of one paragraph of the order for discovery made on 6 December. According to the judge (in paragraph 291), these studies were "destroyed by the defendant in 1998", though all of them were "available in the public domain and the defendant has now admitted that it had the documents in its possession at or about the dates they were published". Accordingly, said the judge, the prejudice to the plaintiff, caused by the destruction of those documents -

".... must now be confined to the fact that if there were any notations made by servants or agents of the defendant on the copies of the documents such records have been lost. There is no reason to assume that the copies of the documents would have had such notations. There is no evidence before me of such a practice occurring with respect to any documents which have been discovered by the defendant. The prejudice of the loss of those 15 child smoking studies has been substantially eliminated."

As his Honour then added, the destruction of "any internal documents recording comments or responses to the reports" was a separate issue.

684. The judge then dealt (in paragraphs 292 and 293) with documents which, it was said by the plaintiff, fell within categories of which discovery had been ordered "and which had been disclosed in the Cremona discovery but were not discovered in this case". His Honour referred in particular to the documents listed by Mr. Gordon in Exhibits PG2 and PG3 to his affidavit of 25 January 2002, but many of the documents so listed were identified as now in the public domain and some fell outside the categories described by the order of 6 December. In part, this was because of the interpretation placed by the defendant on the word "of" in category 6 in paragraph 6 of the order, an interpretation which the judge was prepared to reject - although, as we have said, we are not prepared to join in that rejection. Complaint was made, too, about documents relating to "youth smoking" but, as the judge observed, that was a category not included in the order of 6 December 2001 and "not otherwise agreed to by the defendant".

687. The judge dealt next (in paragraph 296) with the document entitled "Interpretation of Leaf Analysis". This, it was said by the plaintiff, was a report produced by the defendant which, though discovered in the Cremona litigation, had not been discovered on this occasion. A document obtained by the plaintiff's advisers, dated 1959, suggested that this report was a product of many years' research by a large team of people employed by the defendant; it was a document of importance, contended Mr. Gordon, "because it reflects a knowledge by the defendant of the pharmacological and addictive effects of nicotine in years before the plaintiff commenced smoking". The defendant conceded that the document had been destroyed, but it was a document of which, according to Mr. Gordon's affidavit, he had obtained a copy, and so it is difficult to see what prejudice flowed, unless it be the general prejudice occasioned by the failure of the defendant to refer to the manner of and reason for its destruction.

690. As to the 34 notice to admit documents, these were considered next (in paragraphs 297ff). The defendant had produced nine similar documents, but none other. Three of the documents had been discovered in the Cremona litigation, but all of them were already in the possession of the plaintiff's solicitors. As his Honour observed (in paragraph 300), the mere fact that the plaintiff had or could obtain copies of the missing documents "does not eliminate all prejudice which flows from destruction of the defendant's copies". In the absence of admissions from the defendant, it must be the harder for the plaintiff to prove the state of knowledge of the defendant. Yet as the judge readily acknowledged, the problems were not insurmountable.

693. The foregoing is sufficient to indicate the way in which his Honour approached the question of prejudice flowing from non-compliance by the defendant with the order for discovery made on 6 December. We think it fair to conclude that in the end he found little, if any, prejudice as a consequence of non-compliance considered independently of the more general problem of the destruction of documents before the commencement of the litigation. After dealing with the latter in detail, the judge returned to the former (in paragraph 353), before concluding, as already mentioned[229], that such non-compliance was sufficient in itself to support the order to strike out the defence.

696. In paragraph 353, the judge referred expressly (and apparently by way of summation) to these faults and omissions: the "failure [of the defendant] to comply with the requirement of the order to depose to what had become of documents which had been destroyed"; that the affidavit of documents was "deceptive or misleading in a number of ways"; and that documents had been omitted from discovery "by virtue of what was an unreasonable interpretation of the terms of the order". These were all complaints of the plaintiff and, having already considered them to a greater or lesser extent earlier in this judgment, we do not repeat what we said then. Suffice it to say now that, as indicated there, none of the matters mentioned here, whether taken separately or together, justified an order striking out the defendant's pleading; the prejudice, such as it was, was simply not so severe as to require, or indeed to warrant, that step. A further order for discovery, a further affidavit of documents, a further affidavit in explanation, any of these might have been justified in order to make express that which, in his Honour's opinion, had not yet been stated, even if the failure to state it was (as he suggested) "more than an oversight" and rather the result of a "very deliberate strategy" - an opinion which flowed, not simply from the failure to state that documents had been destroyed but from the implementation of the policy which his Honour found (without justification) had been put in place with a view to masking what was happening, on the advice of the solicitors.

699. It was this last, it seems to us, which led the judge to make the order striking out the defence. The prejudice from the destruction of documents was seen as very considerable, as his Honour made plain in the following (in paragraph 309):-

"It is, of course, to be kept in mind that whilst I am satisfied that thousands of documents were destroyed in 1998, an untold number was destroyed before that date, and for the same purpose. I have no doubt that many BATCO documents which the defendant held were destroyed after 1985, and there seems little doubt (as Foyle's `note' would have confirmed) that many research documents of Wills' own Research Unit were destroyed, too. Furthermore, the prejudice to the plaintiff might be immense by virtue of the deliberate destruction of just one document, which might have been decisive in her case. It would be interesting to know, for example, how many of the Cremona documents had been rated 5 (a `knockout' blow for the plaintiff) and how many of those had been discovered in this case. The dilemma, stressed by counsel for the plaintiff, is that they can not now know, at least not by virtue of cross examination of any of the witnesses who were called on this application, whether they have been denied such documents. The people who would be likely to know whether such documents were destroyed might be thought to be people such as Wilson, Cannar, Schechter, Northrip, Travers and Kinross. Whilst their unexplained absence leads to the inference that their evidence would not have been helpful to the defendant, that does not relieve the plaintiff's anxiety that she may have been denied at least one `knockout' document, if not many."

These comments lose significance if, as already concluded, the defendant was not shown to have been in breach of any obligation in destroying documents before the commencement of this proceeding - or, more accurately, any relevant obligation as the matter was argued. With relevant prejudice then limited to the consequences, such as they were, of non-compliance with the order of 6 December, there was not sufficient ground for striking out the defence.

705. There is little more to be said about the remedy employed by the judge in this instance to grant relief to the plaintiff. It should be mentioned, however, that his Honour gave consideration, as might be expected in such a thorough judgment, to alternative remedies. He said (in paragraph 373):

"I have considered whether the appropriate course might be not to strike out the defence but to permit the trial to proceed, after appropriate orders had been made for further discovery and interrogatories, and such other directions as may be appropriate. That might enable me to assess during the running of the trial whether the prejudice to the plaintiff by the destruction of documents had been reduced or exacerbated. I considered, too, whether I could make orders restricting or denying the defendant the right to contest certain issues on which it was shown that documents had been destroyed. Quite apart from the fact that I doubt that I have power to make such orders for issues-based sanctions in the face of objection by the defendant (and the defendant has given no indication that it would make any evidentiary concessions in this case), it would be impossible, in my view, to differentiate between the issues in this trial so as to determine which issues should be subject to such an issues-based order and which would not. Indeed, the plaintiff's contentions as to all of the liability issues in the case are likely to have been prejudiced by the destruction of documents."

709. First, we do not share his Honour's hesitation about the power to make what he called "orders for issues-based sanctions", whether or not "in the face of objection by the defendant". Rule 24.02 empowers the court specifically to strike out a defence for default in complying with an order to give particulars, for discovery or inspection or for answers to interrogatories, and in our opinion the power to strike out the whole includes power to strike out part only. With respect, we see no reason, in the wording of the rules at least, why the judge might not have made an order restricting or denying the defendant's right to contest certain issues if in relation to those issues there was prejudice of such a type as to require that remedy.

712. In the cases to which reference has already been made[230], we have seen that, in considering the remedy to be applied, efforts were made to relate the destruction of the documents in question to the issues raised in the case. There was no such attempt made in this instance. But surely the defaults of the defendant in making discovery, such as they were, and the destruction of documents more generally, were not relevant to the allegations that the plaintiff smoked cigarettes, that she had done so for 40 years, that she had lung cancer and that the cancer was, in her case, related to the smoking. All of these were matters upon which she should have been required to make proof and yet the judge simply made an order by which the plaintiff was relieved of that need. By striking out the defence in all respects save loss and damage, all other allegations in the statement of claim were taken to be admitted and so it became unnecessary for her to prove even that she had smoked, let alone smoked the defendant's cigarettes. It is true that when it came time to assess damages an offer was made on behalf of the plaintiff to prove that she had been smoking for 40 years and defendant's counsel said that that would not be necessary; but of course it was not necessary because the allegation in the statement of claim was already admitted by virtue of the order for striking out. In our opinion, there was no justification, even if the judge's criticisms of the defendant were accepted, for relieving the plaintiff from the need to prove anything in respect of her claim save damage. The remedy should have been related more directly to the prejudice seen to have been suffered. With respect, the remedy adopted[231] was out of proportion to the wrong, even if the judge's criticisms of the defendant's conduct, both in relation to the order for discovery and the destruction of documents more generally, were to be accepted.

715. In not dissimilar vein, the defendant submitted that, while the judge did not identify the issue or issues in the case in respect of which the plaintiff was prejudiced, the arguments of the plaintiff below were put in relation to the defendant's knowledge between 1950 and 1992 about the risk of lung cancer and the addictive effect of nicotine and in relation to the defence of volenti. As for the second, the defendant contended that the plaintiff had failed to establish any prejudice resulting from the destruction of the defendant's documents; for ultimately the issue of volenti would depend upon the knowledge of the plaintiff as to the risks and consequences of smoking and whether she had accepted such risks or consequences. Documents that the defendant might have had prior to destruction could not be directly relevant to the plaintiff's actual knowledge and belief which she would have to prove. Documents in the public domain were one thing; documents in the private possession of the defendant were altogether different.

718. As for the defendant's knowledge between 1950 and 1992 about the risks of lung cancer and the addictive effect of nicotine, we return to the initial proposition that the plaintiff sought only discovery which was limited to certain categories, the contents of which were framed by the plaintiff's own legal advisers. The history of the application for the order made on 6 December has been earlier rehearsed, from which it can be seen that questions of knowledge on the part of the defendant were put to one side. It was said by the plaintiff's solicitors that they already had the documents upon which they relied to show the relevant knowledge[232]. That was the context in which his Honour should have weighed the consequences for the plaintiff of the destruction of documents if, as the defendant contends, prejudice was asserted by reference to the issue of knowledge; yet that was not the approach taken in the reasons for judgment. There is no need, however, to pursue that further: the point to be emphasised is the need, in a case like the present, to weigh the effect of the alleged destruction of documents in respect of the issues in the proceeding, in order that the remedy be not out of proportion to the prejudice occasioned. However understandable it may have been, given the considerable pressure under which the judge was proceeding, the order his Honour made was not sufficiently related to the deficiencies, such as they were, in the defendant's discovery.

722. For these reasons, we consider that the order made on 25 March 2002 was erroneous - and we say that notwithstanding that the order was made in the exercise of discretion. In so far as it rested upon non-compliance by the defendant with the order for discovery made on 6 December 2001, such prejudice as was occasioned by the defendant's neglects or defaults did not warrant or require an order which left the defendant without any defence save as to quantum. In so far as the order rested upon the destruction of documents both before 1998 and in March-April 1998 after the end of the Cremona litigation and the Harrison litigation, his Honour's findings were, we think, flawed in relation to the criticism he levelled at legal advisers and what he saw to be the "devising" of a "strategy" to enable the defendant deliberately to destroy disadvantageous documents while at the same time claiming "innocent" purpose. Those findings were flawed, with respect, not merely in the construction placed by his Honour upon the documents to which he referred, but also in allowing reference to those documents by over-ruling the defendant's claim to legal professional privilege. Nor, in our view, was the defendant shown to be in breach of any relevant obligation not to destroy documents before the commencement of the proceeding, given that the plaintiff did not rest her case on either an attempt to pervert the course of justice or contempt of court. We do not say what the result would have been had such an allegation been made, because that was not the case put below and it was not the case considered by his Honour. Furthermore, if the defendant had been in breach of some obligation by destroying documents, the remedy imposed in this instance was, we think, out of proportion to the ill, in the sense that it was not related to the issues affected by the destruction of documents. Had it been so related, it could have led to no more than an order striking out certain paragraphs of the defence; it would not have led to an order striking out the defence altogether save only as to loss and damage.

725. In all the circumstances, we are clear that the appeal should be allowed, the order striking out the defence set aside and the judgment given for damages set aside in consequence. In addition, we would as matter of form (though both have already been carried into effect) set aside the two orders for production of documents made on 6 and 13 February 2002, the first being the direct consequence of his Honour's overruling the defendant's claim to legal professional privilege that was made in response to the notice to produce served on it on 31 January 2002 and the subpoenas served on the two firms of solicitors on the same day. We would order that the plaintiff do deliver up forthwith to the defendant the documents so produced and any copies made by the plaintiff. Despite the misfortune for the defendant that the contents of some of these documents have now been published to the world at large by means of the internet and the international media, it should be declared, we think, that privilege in relation to such documents, if otherwise properly claimed, has not been waived either expressly or by implication as held by the judge on 6 February. The like is true in relation to the Stowe advice, the object of the ruling on 13 February. The filing of any further affidavits could serve no useful purpose now, for they could scarcely tell the plaintiff anything beyond that which has been so fully canvassed in relation to discovery. Accordingly we think that the proper exercise of discretion by this Court dictates that the plaintiff's application by summons on 25 January 2002 be simply dismissed and the proceeding as a whole remitted to the Trial Division for a new trial. That will, of course, be in the light of any change of parties needed since the death of Mrs. McCabe herself. Immediately before delivering these reasons for judgment, we ordered that one of the two persons named as executors in her will be appointed to represent the estate of the deceased plaintiff and that the appointee be made respondent accordingly, but that was for the purposes of the appeal only.

[1] On 3 May 2002 the Court of Appeal made consent orders in relation to the application for leave to appeal which inter alia consolidated the application and the appeal as of right.

[2] These depositories were first mentioned at the directions hearing on 14 November 2001 by Mr. Gordon: see paragraph [34] below. They were also mentioned in his affidavit of 18 December 2001 (in paragraph 3) and again in his affidavit of 25 January (in paragraphs 4(b) and 9).

[3] See s.29(2) Administration and Probate Act 1958. An exception to these limitations, but only with respect to dust-related conditions, was introduced by the insertion of sub-s.(2A) in 2000.

[4] AB5 1737-8 incorporating later oral corrections: and see the Appellant's Summary para.48.

[7] The affidavit in question was that sworn by Mr. Maher sworn on 29 January 2002 and the exhibits were GFM 3 and GFM 4: AB 4 1191, 1226, 1251. The topic is dealt with later in detail under the heading "The rejection of the claim to privilege".

[9] On 13 February 2002, another ruling was made that the defendant had waived legal professional privilege, this time in relation to what was called the Stowe memorandum: see paragraph [133] below.

[10] Respondent's Outline of Submissions paras.3, 4, and 5.

[11] In the Appellant's Outline of Submissions the reference to later paragraphs (after 348) of the reasons for judgment used numbers which were different by one from those appearing in the reasons for judgment as reproduced in the Appeal Book, volume 11. In this judgment the paragraph numbers are as they appear in the Appeal Book.

[12] As mentioned already in paragraph [9].

[13] Appellant's Chronology p.5, Respondents' Chronology p.7.

[14] The proceeding was discontinued, according to the Respondent's Outline of Submissions, para. 59: see also Respondent's chronology p.12.

[15] When notice of discontinuance was filed: AB9 2736. According to the Respondent's Outline, para. 59, that was preceded by an application (at least initiated) by the defendant to have the proceeding dismissed for want of prosecution, notice of motion to that effect being filed on 11 February 1998: AB9 2738.

[18] Affidavit of Nicholson 29 January 2002 para.26.

[19] Affidavit of Nicholson, 29 January 2002, paras.29-35; affidavit of Maher, 31 January 2002.

[20] Reasons for judgment, paragraph 289 finding 15 (AB11 4043).

[21] Respondent's Chronology p.15, AB10 3370.

[22] That hold order is Exhibit GFM 15 to the affidavit of Mr. Maher of 31 January 2002.

[23] In fact they had been instructed on behalf of Mrs. Cremona to sue the solicitors who had been acting for her in that litigation.

[25] Pursuant to R.S.C. Chapter I Rule 29.05.

[27] As recounted above, in paragraph [25].

[31] Paragraph 3 of the order of 6 December 2001.

[36] Paragraph 1 of the order of 6 December 2001.

[39] This was apparently understood as meaning "documents which it has then identified in each of the following categories".

[41] Apparently thereby drawing a distinction between what the defendant might be able to identify by 17 December (as described in paragraph 6 of the order) and the totality, as described in paragraph 8.

[50] AB1 145-6; see also AB 10 3600-01, Respondent's Summary para.23.

[59] Compare Chitty's Queen Bench Forms (18th ed.) 383-4, Atkin's Court Forms and Precedents (2nd ed.) vol.15 p.153-6.

[61] Respondent's Outline of Submissions para. 216.

[63] See for example in Chapter I of the Rules, Form 29B para. 5.

[64] Reasons for judgment, para. 180, AB11 4007.

[65] [1968] 1 W.L.R. 693, [1968] 2 All E.R. 98 at 99.

[67] See also reasons for judgment para. 183.

[79] Para.289, finding 20 (AB11 4044-5).

[81] Para.289, finding 20 (AB11 4044-5).

[82] This was the point repeated in paragraph 62 of the notice of appeal.

[83] Particularly as Project Hippo was a matter expressly mentioned in subparagraph (a) of category 6 in paragraph 6 of the order of 6 December 2001.

[84] Respondent's Outline of Submissions para.69.

[86] Under the heading "Destruction of documents before litigation commences".

[87] We say "if" because the defendant submitted that the failure to discover the database was no defect in discovery because it did not fall within the order of 6 December. The plaintiff submitted that while the judge had agreed with Mr. Angus that the database was discoverable his Honour did not say that it should have been discovered in this instance: Respondent's Outline of Submissions para.130.5.

[89] AB2 385. It is relevant for other purposes that this document was a document exhibited to Mr. Gordon's affidavit of 25 January 2002; for it could not be said to be something of which the plaintiff was by then unaware.

[90] This is consistent with Mr. Eggleton's evidence during cross-examination, that Clayton Utz gave advice in 1985 on the statutory requirements for document retention (AB6 2074) . As to 1990, see AB6 2099.

[91] Set out in paragraph [76] above.

[92] Respondent's Outline of Submissions, para.89. See affidavit of Mr. Gordon's affidavit of 25 January 2002, Exhibit PG5 tab 4 (AB2 384).

[93] The later "hold orders" themselves suggest an earnest endeavour to see that proper procedure was followed, and not ignored or circumvented.

[94] Respondent's Outline of Submissions para.16. Refer AB6 2075, 2100, 2109.

[100] Reasons for judgment para.37 (AB 11 3960).

[103] [1981] HCA 35; (1981) 148 C.L.R. 245. The letter itself referred to the report in [1981] HCA 35; 35 A.L.R. 322 at 332.

[104] [1980] 1 N.S.W.L.R. 688.

[106] In cross-examination Mr. Eggleton was disposed to accept that the notes were so made: AB 6 2217.

[109] Respondent's Outline of Submissions para.43.

[111] Again the contrary was not put to the judge: Respondent's Outline, para.42. Defendant's counsel submitted to his Honour that the advice was correct legal advice: AB7 2480.

[112] In paragraph [92], where para.43 of the reasons for judgment is quoted.

[113] There is yet another handwritten sheet, Exhibit P31, which according to Mr. Eggleton in evidence (AB6 2140) is a note of the meeting on 2 April made by Mr. Wilson himself. Save, however, to record his attending with Cannar and Gulson, it is a very uninformative note.

[114] Indeed, when asked in the course of argument what was the point of the defendant's going to Allens if the Oxland note meant what was now alleged, counsel (Mr. Rush) said: "I can't say".

[115] Harrison affidavit 29 January 2002, paras.10, 11 (AB4 1071-2).

[116] Harrison affidavit para.19 (AB4 1073).

[118] As already explained in paragraph [53] above.

[120] See below, under the heading "Destruction of documents before litigation commenced".

[123] As mentioned at the outset, in paragraph [9] above.

[126] AB5 1453, 1454. In fact when ruling orally, his Honour did say "November 1990" or "late 1990", but he subsequently corrected that to read "early 1990": see the discussion at transcript AB5 1703-4.

[138] C denotes the creation of the document.

[139] [1999] HCA 66; (1999) 201 C.L.R. 1 at 13, following upon Attorney General (N.T.) v. Maurice [1986] HCA 80; (1986) 161 C.L.R. 475 per Gibbs, C.J. at 482, 484, Mason and Brennan, JJ. at 488 and Dawson, J. at 497.

[140] These cases concern waiver in respect of "associated material"; that is, material associated with material in respect of which there has already been intentional waiver so that the question is whether in the circumstances that intentional waiver must be taken by operation of law to extend also to the associated material.

[141] Contrast Goldberg v. Ng [1995] HCA 39; (1995) 185 C.L.R. 83 at 95, where the very different question was considered of limited purpose waiver. A solicitor who had waived privilege intentionally for the purpose of inquiry by a disciplinary body into the propriety of his conduct was held (by a majority of 3 to 2) to have waived it also for the purpose of inquiry by a court into his conduct in the course of litigation over its consequences. The question of related purpose waiver is to be distinguished from the question of associated material waiver.

[142] This advice did not have to be produced and it did not, we think, go into evidence. Quite probably it was the letter of 13 December 1985 mentioned on page 2 of the Clayton Utz advice of 29 March 1990, Exhibit P17 (AB9 3065).

[145] Attorney-General (NT) v. Maurice [1986] HCA 80; (1986) 161 C.L.R. 475 at 490-1.

[150] [1999] HCA 66; (1999) 201 C.L.R. 1 at 13.

[151] [1986] HCA 80; (1986) 161 C.L.R. 475 at 487-8.

[152] In the larger extract from Wigmore which is to be found in the judgment of Gibbs, C.J. (at 481), the learned author concludes: "He may elect to withhold or to disclose, but after a certain point his election must remain final." That certain point, it is suggested, depends more upon inconsistency than it does upon fairness writ large. Election itself suggests a choice between inconsistent courses.

[153] Respondent's Outline of Submissions para. 251, see also para.252.

[154] In para.263 of the reasons for judgment, his Honour recognised how important to his findings was the order made requiring production of legal advice given to the defendant.

[155] As mentioned above, in paragraph [97].

[158] Respondent's Outline of Submissions para.257.

[159] (1993) 40 F.C.R. 507 at 509

[160] Mr. Nicholson's affidavit of 29 January 2002, para. 27 (AB4 904).

[161] Exhibit GFM 1 to the further affidavit of Mr. Maher of 31 January 2002 (AB4 1256). See also Exhibit MNN6 to the affidavit of Mr. Nicholson, 29 January 2002 (AB4 1044)

[162] Exhibit GFM 2 to that affidavit (AB4 1260).

[163] Emphasis added to last sentence only.

[164] Exhibit GFM 15 to that affidavit (AB4 1297).

[165] Exhibit MNN 10 to Mr. Nicholson's affidavit of 29 January 2002 (AB4 1065). See also Exhibits GFM 13 and GFM 14 to Mr. Maher's affidavit of 31 January 2002 (AB4 1293, 1295).

[166] The date was perhaps taken from the Wills' Records Management Program, Staff Handbook (Exhibit PG5 tab 31) or some such; for, at p.14, that handbook sets the time "for the annual records review and disposal process" at the "first quarter of each year by 15th April of that year": AB2 562.

[167] Affidavit of 29 January 2002, para.36 (AB4 906).

[169] As the judge noted in para.115 of the reasons for judgment.

[171] See para.289, findings 15 to 18.

[172] Perhaps that was because the plaintiff's solicitors already had the earlier affidavit of discovery, which is likely given the detailed references they made to it from time to time.

[173] As found by the judge in para.135. See also para.289, finding 16.

[175] In para.139 of the reasons for judgment.

[176] As the judge mentioned, in para.141.

[178] The date back to which the judge ordered the production of documents after overruling the defendant's claim to legal professional privilege.

[179] Court of Appeal, England, 20 October 1999, unreported. The defendant supplied us with the transcript of the judgments as delivered.

[180] This contrasts with what was said about Coleman in the reasons for judgment below.

[181] Chancery Division, 5 February 1988, unreported save in the Times newspaper of 5 March 1988. The defendant supplied us with a print of an electronic version of the judgments delivered.

[184] Court of Appeal, England, 14 May 1991, unreported save in the Times Law Reports of 7 August 1991. The defendant supplied us also with a print of an electronic version of the judgments.

[185] This is taken from the electronic version of the judgment. As the defendant demonstrated, the passage quoted by his Honour at para.348 of the reasons for judgment is not to be found in the judgment; rather it is in the summary of the case provided at the commencement of The Times Law Report of 7 August 1991 as quoted (not altogether accurately) in the plaintiff's submissions to the judge (AB11, 3802).

[186] Lloyd, L.J. said that he used the word "contumacious" because it expressed the required meaning more accurately than "contumelious". According to the Oxford English Dictionary (2nd edn.) "contumacious", in the law, means "wilfully disobedient to the summons or order of a court". It is important, then, that the case was concerned with the destruction of documents after the commencement of proceedings.

[187] Court of Appeal, England, 22 June 2000, reported only in [2000] EWCA Civ 200; [2000] All E.R. (D) 854, [2000] 2 B.C.L.C. 167 and the Times Law Reports of 7 July 2000. The defendant supplied us with the transcript of the judgments as delivered.

[188] Although in para.353 of the reasons for judgment his Honour spoke of the English decisions as "concerned with the equivalent English provisions" - equivalent, that is, to Rule 24.02 of our Chapter I - Arrow Nominees was concerned with C.P.R. Rules 3.4 and 24.2 (see the judgment of Ward, L.J. para.68). C.P.R. Rule 3.4 (set out by Ward, L.J. in para.71) has no direct equivalent in Victoria.

[189] 151 Cal. App. 3d 491 (Court of Appeals of California, Second Appellate District, Division 3, 31 January 1984).

[190] Sommers & Siebert "Intentional Destruction of Evidence: Why Procedural Remedies are Insufficient" (1999) 78 Canadian Bar Review 38 (an article relied upon by his Honour in his reasons for judgment: see para.361 footnote 51).

[191] Further defendant's counsel submitted that what was said in Smith about recognising a new tort was in stark contrast to the approach taken by the High Court in Northern Territory v. Mengel (1996) 185 C.L.R. 307 when overruling Beaudesert Shire Council v. Smith [1966] HCA 49; (1966) 120 C.L.R. 145 at 156 and in A.B.C. v Lenah Game Meats Pty Ltd. (2002) 76 A.L.J.R. 1, where the High Court refused to recognise invasion of privacy as a specific tort.

[192] 48 Cal. Rptr 2d 607 (Cal.App.5 Dist. 1995).

[193] 954 P 2d 248 (1998).

[194] It was also held in Cedars-Sinai that there was no tort remedy for intentional spoliation of evidence by a party to the cause of action to which the evidence was relevant when the spoliation "is or reasonably should have been discovered before the trial or other decision on the merits of the underlying cause of action", because it was unsettling to re-open a decision on the merits of the underlying cause of action to speculative reconsideration regarding how the presence of the spoliated evidence might have changed the outcome, and that course was to be avoided where unnecessary.

[195] (1998) 42 O.R. (3d) 391.

[196] Cited in Sommers & Siebert supra at 42-43 footnote 17. The Appellant's Outline of Submissions para.73(c)(i) asserts that Bowmar was not cited at all in Willard (contrary to what the judge said in para.364 of the reasons for judgment). But in Willard at 625 (as appears from the quotation from Willard set out by his Honour in para.364) the court quoted a passage from General Atomic Co. v. Exxon Nuclear Co. Ltd at 304 and in that passgae the court (in General Atomic) was in fact approving an earlier passage in Bowmar at 10-11 (according to Sommers & Siebert at 43, footnote 17 and at 60, footnote 76).

[197] The full quotations from these two cases are in paras.363 and 364 of the reasons for judgment.

[198] 142 F.R.D. 68 (S.D.N.Y. 1991)

[199] 169 F.R.D. 19 (E.D.N.Y. 1996).

[200] 986 F.2d 263 (8th Cir. 1993).

[201] 172 F.R.D. 75 (S.D.N.Y. 1997).

[203] 162 F.Supp. 2d 1262 (N.D. Okla. 2001).

[204] In Helmac Products Corporation v. Roth (Plastics) Corporation 150 F.R.D. 563 (E.D. Mich. 1993) it was held that the power to impose sanctions extended to the principal shareholder and chief executive officer of the corporate defendant, after the commencement of the litigation but before that individual became a party.

[205] Compare Allen v. Tobias [1958] HCA 13; (1958) 98 C.L.R. 367 at 375, approving what was said by the Judicial Committee in The Ophelia [1916] 2 A.C. 206. See also Armory v. Delamirie 1 Stra. 504[1722] EWHC KB J94; , 93 E.R. 664, Smith's Leading Cases (13th edn.) vol.1, 404-5, Broom's Legal Maxims (10th edn) 637-640.

[206] 102 F.R.D. 472 (1984).

[208] 126 F.R.D. 545 (D. Minn. 1989).

[210] McHugh, J. has been very critical, more than once, of the concept of "fairness" standing as a criterion: Perre v. Apand Pty. Ltd. [1999] HCA 36; (1999) 198 C.L.R. 180 especially at 211-2, Mann v. Carnell [1999] HCA 66; (1999) 201 C.L.R. 1 at 40-41 (dissenting). The concept of "fair trial", particularly when divorced from the way in which a current proceeding is being conducted, is surely capable of attracting like criticism.

[211] See for example Miller on Contempt (2nd edn) 2-3, Australasian Meat Industry Employees' Union v. Mudginberri Station Pty. Ltd. [1986] HCA 46; (1986) 161 C.L.R. 98 at 106, B.H.P. v. Dagi [1996] VicRp 62; [1996] 2 V.R. 117 at 169-173.

[212] [1963] HCA 32; (1963) 109 C.L.R. 593.

[214] See and compare Television New Zealand Ltd. v. Solicitor General [1989] NZCA 67; [1989] 1 N.Z.L.R. 1, where James v. Robinson was not followed.

[215] [1992] HCA 25; (1992) 174 C.L.R. 268. See also Meissner v. R. [1995] HCA 41; (1995) 184 C.L.R. 132 especially at 144.

[216] [1938] HCA 34; (1938) 60 C.L.R. 336 at 361-2.

[217] [1992] HCA 66; (1992) 67 A.L.J.R. 170.

[218] [1940] HCA 20; (1940) 63 C.L.R. 691.

[219] [1965] HCA 46; (1965) 112 C.L.R. 517.

[222] On Thursday 29 August 2002, Mr. Hughes said, in answer to a question from the Bench, that while the destruction of documents before the commencement of litigation could be an attempt to pervert the course of justice, "I don't need to go so far". It was not until the next day of hearing (Monday 2 September) that Mr. Hughes said, in relation to the destruction of documents before litigation, that, although the trial judge had not made such a finding, it was open on the evidence to find that what the defendant had done amounted to an attempt to pervert the course of justice, and that we should so find.

[223] In a late submission dated 19 September 2002, made after the conclusion of argument and without leave, the plaintiff referred us to two references to perverting the course of justice, found in the parties' written submissions below - plaintiff's submissions para.375 (AB11 3809) and defendant's submissions para.97 (AB11 3886) - references which were obviously regarded by the judge as of no great significance. See also the exchange with counsel at AB7 2262-3.

[224] The Daniels Corporation International Pty. Ltd. v. A.C.C.C. [2002] HCA 49 at [32].

[225] Respondent's Outline of Submissions para.5.

[226] Reasons for judgment para.353, Appellant's Outline of Submissions para.54(c).

[228] Which his Honour no doubt had in mind in considering his options, in para.373.

[231] As described by the Full Court in Exell v. Exell [1984] VicRp 1; [1984] V.R. 1 at 9, striking out a defence is a "Draconian result" and should not be ordered "save in the most exceptional circumstances, or, as a last resort".