GRIFFIN David James v SOGELEASE AUSTRALIA LIMITED & ORS

Court of Appeal (NSW)|2002-12-19|Before: Sheller JA, Ipp JA, Barrett J, Kirby P, Lockhart J, Brandon J

CITATION : GRIFFIN David James v SOGELEASE AUSTRALIA LIMITED & ORS [2002] NSWCA 421 FILE NUMBER(S) : CA 41105/02 HEARING DATE(S) : 19 December 2002 JUDGMENT DATE : 20 December 2002

PARTIES : DAVID JAMES GRIFFIN V SOGELEASE AUSTRALIA LIMITED & ORS JUDGMENT OF : Sheller JA; Ipp JA; Davies AJA

Claimant: Mr A W Street SC Mr G T Wembler Opponent/Resp: 1st: G.C.Lindsay SC COUNSEL : Opponent: 2nd: R. Benjamin (Sol) (Submitting Appearance) Opponents,3rd,4th,5th,7th: J McNamara (Sol) Opponent: 8th: N Manousiridis

Claimant/App: North & Badgery SOLICITORS : Opponent/Resp: 1st: Aper Alderman Lawyers Opponent/Resp: 2nd: R. Benjamin (Sol) (Submitting Appearance) Opponents/Resp: 3rd,4th,5th,7th: Corrs Chambers Westgarth CATCHWORDS : PRACTICE AND PROCEDURE - stay whether civil proceedings should be stayed when criminal prosecution likely LEGISLATION CITED : Evidence Act 1995 - s.84 Halabi v Westpac Banking Corp (1989) 17 NSWLR 26 PT Garuda Indonesia Pty Ltd v Grellman (1994) 48 FCR 252 Jefferson Limited v Bhetcha [1979] 1 WLR 898 CASES CITED: Yuill v Spedley Securities Limited (in Liq) [1992] 8 ACSR 272 McMahon v Gould (1982) 7 ACLR SC (NSW) 202 Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 Cameron's Unit Services Pty Ltd v Whelpton & Assoc Pty Ltd (1984) 59 ALR 754 DECISION : See paragraph 20. [ORDERS MADE 19 DECEMBER 2002, REASONS DATED 20 DECEMBER 2002]

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA41105/02 SHELLER JA IPP JA DAVIES AJA December 2002

DAVID JAMES GRIFFIN v SOGELEASE AUSTRALIA LIMITED & ORS

REASONS FOR JUDGMENT 1 The Court: This was an application for leave to appeal from an Interlocutory order, made by Barrett J on 21 November 2002, in proceedings which had been instituted by the first plaintiffs, Sogelease Australia Limited ("SGA") and SG Australia Limited ("SG"), the present first opponents, against the applicant, David James Griffin, and seven other defendants. His Honour refused to grant a stay of the proceedings, notwithstanding that there was a likelihood that Mr Griffin would be prosecuted for criminal offences arising out of the events which were the subject of the plaintiffs' claim. 2 Senior Counsel for Mr Griffin, Mr A W Street SC, submitted that the proceedings should have been stayed as the plaintiffs alleged that Mr Griffin, who had been an employee of SGA, fraudulently misappropriated property of the plaintiffs. Mr Street referred to the fact that the allegations were extremely serious and that it was likely that Mr Griffin would be prosecuted for several crimes. Mr. Street submitted that Mr Griffin was, until convicted, presumed to be innocent and that he had the right to silence. Mr. Street submitted that, if the civil proceedings continued against Mr Griffin, he would be obliged to plead to the statement of claim, to give discovery of documents and so on and might thereby be obliged to make admissions or statements which might, in a criminal trial, be used against him. Mr. Street submitted that there was a real danger that, if the civil proceedings continued, there would be a wrongful conviction. 3 Mr Street did not, however, refer to any particular factor or factors which would justify a stay in the particular case, relying as he did merely upon the point that it was likely that a criminal prosecution would be instituted. Mr Street submitted that the right to silence was a fundamental right established by the Common Law. 4 The approach which Mr Street urged the Court to take is one which has been abandoned in this country. It was at one time considered that there was a felony-tort rule which entitled a party in civil proceedings, founded upon a cause of action which involved facts constituting a felony, to obtain a stay of the proceedings until the felony was prosecuted. The history of the rule was discussed by Kirby P in Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 at 32-3 and by Lockhart J in P T Garuda Indonesia Pty Ltd v Grellman (1994) 48 FCR 252 at 260-4. However, that rule no longer applies. 5 In Jefferson Limited v Bhetcha (1979) 1 WLR 898, Megaw LJ, with whom Brandon J agreed, said at 904-5: "There is, I say again, in my judgment, no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under Order 14, or in the pleading of his defence, or by way of discovery or otherwise what his defence is or may be, in whole or in part, with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceedings. The protection which is at present given to one facing a criminal charge - the so-called "right of silence" - does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings." 6 The same view was adopted by Kirby P and McHugh JA, Samuels JA, dissenting, in Halabi v Westpac Banking Corporation, by Kirby P, Priestley and Meagher JJA in Yuill v Spedley Securities Limited (in Liq) (1992) 8 ACSR 272, by Young CJ in Philippine Airlines v Goldair (Aust) Pty Limited (1990) VR 385 and by Lockhart J in PT Garuda Indonesia Pty Limited v Grellman.

7 The present rule is that the issue of conflict is considered not under the felony-tort rule but under the general discretion of the court "to control proceedings before it in the interests of fairness and due process", to adopt the words of Kirby P in Halabi at 42. In Halabi, at 58, McHugh JA, said: "The liberty to stay the civil proceedings based on felonious conduct will only be exercised so as to achieve justice between the competing rights of the plaintiff and the defendant". 8 In Jefferson Limited v Betcha, Megaw LJ, said at 904, "I should be prepared to accept that the court which is competent to control the proceedings in the civil action, whether it be a master, a judge, or this court, would have a discretion, under section 41 of the Supreme Court of Judicature (Consolidation) Act 1925, to stay the proceedings, if it appeared to the court that justice - the balancing of justice between the parties - so required, having regard to the concurrent criminal proceedings, and taking into account the principle, which applies in the criminal proceedings itself, of what is sometimes referred to as the "right of silence" and the reason why that right, under the law as it stands, is a right of a defendant in criminal proceedings. But in the civil court it would be a matter of discretion, and not of right." 9 In Philippine Airlines v Goldair (Aust) Pty Limited, Young CJ observed at 390: "It is sufficient to say that the "right of silence" is a right which relates to criminal proceedings and it would need a very strong case indeed before the Court should intervene solely on that ground to stay civil proceedings pending the determination of criminal proceedings." 10 The guidelines for the execution of the discretion which were enunciated by Wootten J in McMahon v Gould (1982) 7 ACLR SC (NSW) 202 at 206-207 have been applied frequently. In Yuill v Spedley Securities Limited, Priestley J, at 275, described the guidelines "as a useful guide to the exercise of the courts discretion in cases of this kind." Two of the guidelines enunciated by Wootten J in McMahon v Gould are the following: "(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court." …….. "(h) However, the so-called "right of silence" does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding." 11 Guideline (a) adopted the words of Sugerman CJ, with whom Holmes and Mason JJA agreed, in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 where his Honour referred, at 19, to:

"the fundamental principle that a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court, subject only to an exercise of judicial discretion on proper grounds as part of the court's inherent powers". 12 In the present case, Mr Street simply emphasised the importance of what he said was the right to silence and the possibility that, if the civil proceedings continued, Mr Griffin might do or say something that might contribute to a conviction, a conviction which Mr Street submitted would be wrongful, because the right to silence had been breached. That approach was wrong for the law, as it now stands, is that a plaintiff in civil proceedings is entitled to proceed notwithstanding the existence or likelihood of a relevant criminal prosecution, unless factors are identified which justify a stay of the proceedings in the interests of justice.

13 A useful example of the application of the rule may be seen in Cameron's Unit Services Pty Limited v Whelpton & Associates Pty Limited (1984) 59 ALR 754 where Wilcox J refused a stay of proceedings notwithstanding that a director of the plaintiff company had been charged with fraud and other offences arising out of the events which were the subject of the proceedings. Wilcox J discussed the rule in terms similar to those which we have set out, and said, at 760, in relation to "the right to silence": "The 'right of silence' is a right which a person has in relation to present or anticipated criminal proceedings. As a matter of everyday experience, suspects or accused persons waive the right by giving an explanation of their conduct during the course of interrogation by police or other investigating authorities or in evidence at their trial. No doubt the right is often waived incautiously or through ignorance, but is also deliberately waived by informed persons who take the view that waiver will best serve their interests overall. The conflicts of interest which give rise to waiver already exist; the law does not step in to prevent those conflicts or to deny the ability to waive the right. The existence of a civil action which an accused person may wish to defend provides simply another example of a conflict of interest between maintaining silence and disclosing the substance of the defence in the criminal proceedings. I see no basis for the view that the court should intervene to relieve against this particular conflict, when it does not relieve against others. The fact that the existence of the civil action may result in a decision by the accused person to waive his right of silence is not, in itself, a sufficient reason to stay that action. The real question must be the likelihood of causing injustice in the criminal proceedings: para (i) above." 14 His Honour's reference to para (i) was a reference to one of the precepts enunciated by Wootten J in McMahon v Gould. 15 In the present case, the Learned Judge concluded: "The first defendant bears the onus of showing that the requirements of justice positively require that the plaintiffs be deprived of their right to press on with these proceedings. That onus has not been discharged in such a way as to warrant exercise by the court of its discretion to order a stay of proceedings at this point. I can discern no real (as distinct from merely notional) danger of injustice in any future criminal proceedings in allowing the present proceedings to progress in the normal way at this stage." 16 We agree with his Honours conclusion and with his Honour's approach to the matter. We see no error in his Honour's reasons for judgment. His Honour exercised the discretion of the Court in accordance with the rule as we have stated it and in accordance with the guidelines enunciated in McMahon v Gould. By the words "at this stage", his Honour indicated that, should a factor arise which would justify a stay of the proceedings or other appropriate order, a fresh application could be made. 17 Mr Street also challenged his Honour's admission into evidence of an affidavit of the plaintiff's solicitor which annexed an extract from an affidavit sworn in the proceedings by one of the officers of SGA. That officer had deposed that he and the chief operating officer of SG had spoken with Mr Griffin on 26 March 2002 at the offices of SGA and that Mr Griffin had informed them that he had got into serious debt with two bookmakers and, under pressure from them, had taken and given to them between $6 million and $7 million which belonged to the plaintiffs. Mr Griffin said that some of the payments were paid through his wife's NAB Account, that he had prepared the cheques and she had signed them. He said that he would make those admissions to the police. The officer deposed that Mr Griffin was then suspended from active employment. 18 Mr Street submitted that the evidence should not have been received as s.84 of the Evidence Act 1995 provided that an admission is not admissible unless the court is satisfied that the making of the admission was not influenced by "violent, oppressive, inhuman or degrading conduct" or "a threat of conduct of that kind". Mr Street had pointed out to the learned Judge that he wished to test whether the admission had been made in such a circumstance but was unable to do so as the affidavit was sworn by the plaintiffs' solicitor. Mr Street had submitted to the learned judge that there was no evidence upon which the Court could be satisfied that the admission was not influenced by such conduct. 19 That is not a point on which leave to appeal would be granted for the evidence played no material part in his Honour's reasons for judgment. However, we would observe that the evidence was not tendered before his Honour as an admission, for the guilt or otherwise of Mr Griffin was not an issue in the interlocutory proceedings. The evidence was tendered at most to establish the bona fides of the plaintiff and to give some flesh and blood to the rather dry and technical allegations in the statement of claim. Perhaps, the material was also tendered to show that Mr Griffin had made at least one statement about the matter and had indicated that he would make a statement to the police. The circumstances in which the evidence was tendered and received was not one which attracted the application of s 84 of the Evidence Act. 20 For these reasons, the Court dismissed the application for leave to appeal and ordered that the applicant pay the costs of the application.

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Judgment (12 paragraphs)

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Cases Cited (3)