Hamod & Anor v State of NSW & Anor

CASES CITED : A v New South Wales [2007] HCA 10; 81 ALJR 763

Anthony Hamod (First Plaintiff) Hamock Investments Pty Ltd (Second Plaintiff) PARTIES : State of NSW (First Defendant) UBS Australia Ltd (Second Defendant)

R McKeand SC (Plaintiffs) COUNSEL : J Maconachie QC/M Hutchings (First Defendant) P Holmes (Second Defendant)

Simon Diab & Associates (Plaintiffs) SOLICITORS : I V Knight Crown Solicitor (First Defendant) Allens Arthur Robinson (Second Defendant)

LOWER COURT JURISDICTION : Supreme Court (Associate Judge)

LOWER COURT FILE NUMBER(S) : SC 20147 of 2003

LOWER COURT JUDICIAL OFFICER : Associate Justice Harrison

LOWER COURT MEDIUM NEUTRAL CITATION : [2007] NSWSC 425

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20147/03 Anthony Hamod & Anor v State of NSW & Anor

1 HER HONOUR: This is an appeal against a decision of Harrison AssJ of 2 May 2007 (Hamod v State of NSW [2007] NSWSC 425), ordering that the (first) defendant give discovery of certain documents identified in a list headed "Amended Categories of Documents for Discovery by First Defendant". 2 The substantive proceedings were commenced by application in the Federal Court of Australia on 19 June 2000. On or about 22 May 2003 the proceedings were transferred to this Court. The current operative initiating process is a Sixth Amended Statement of Claim (which runs to 30 substantive pages) filed on 1 June 2004. Two plaintiffs are named, Anthony Hamod, and Hamock Investments Pty Ltd. Two defendants are named, the State of NSW and UBS Australia Ltd (the Australian arm of the Union Bank of Switzerland ("UBS")). The plaintiffs plead a variety of causes of action. The present proceedings concern only the first plaintiff, Mr Hamod, and the first defendant, the State of NSW. Relevantly, for present purposes, the causes of action pleaded by Mr Hamod are said to be "false arrest and false imprisonment", malicious prosecution, and "injurious falsehood by members of the NSW Police". The trial is fixed for hearing, with a 7 week estimate, commencing on 29 October 2007. 3 The following is a general account of what Mr Hamod (so far as is relevant for the purpose of this judgment) pleads and will allege in the proceedings. It does not represent any findings of fact. 4 Up to and including January 1995 Mr Hamod was a businessman operating a large engineering concern in Melbourne. Sometime prior to October 1994 he came into possession of an item called a "Platinum Certificate". The Platinum Certificate was an extremely valuable document. It was, in fact, the property of PT Galaxy Indonesia Trust ("PT Galaxy") an Indonesian trustee corporation. PT Galaxy authorised Mr Hamod to sell the Platinum Certificate. In about October 1994 two individuals (who are named in the statement of claim and said to be servants or agents of PT Galaxy) made a series of threats to him, including that the Platinum Certificate would be stolen (or taken from him by force), and that his daughter would be kidnapped. As a consequence Mr Hamod "laid information" with police at the Nowra Police Station. The police officers to whom he reported were Detective Superintendent Green and Detective Sergeant Eastham. He provided both officers with documentary evidence to establish the authenticity and validity of the Platinum Certificate and of his right to possession thereof, and with other information. 5 In or about October 1994 a member of the Australian Federal Police contacted Mr Hamod and told him that a complaint had been made by PT Galaxy to the International Police ("Interpol") that the Platinum Certificate had been stolen by Mr Hamod from PT Galaxy. Mr Hamod invited the Federal Police to refer to Superintendent Green and Detective Eastham in order to verify his entitlement to possession of the Platinum Certificate. 6 In about October 1994 Detective Eastham told Mr Hamod that after conferring with Detective Superintendent Green and officers of the AFP and reviewing the documentary evidence "they had dismissed and would not pursue the allegations of [PT Galaxy] to Interpol". 7 Notwithstanding that, on 20 January 1995 two officers of the NSW Police (Detective Senior Constable Andrew Day and Detective Sergeant Craig Riddle) arrested the plaintiff and detained him without charge for several hours at the Strawberry Hills Police Station. Later on the same day Mr Hamod was charged with offences under s 178BB (Make false statement with intent to obtain financial advantage) and s 300 (Use false instrument) of the Crimes Act 1900. He remained in custody in corrective services institutions until 24 August 1995 when he was released on bail. 8 On the day of Mr Hamod's arrest, members of the NSW Police made statements to the media concerning what they alleged against Mr Hamod, including that they believed that the Platinum Certificate was forged, and that what they were prosecuting might have been the biggest fraud attempted in Australia or even the world. These are the foundation for the cause of action pleaded as "injurious falsehood". 9 The charges came on for hearing before Ms Horler, LCM. The hearing proceeded over 24 days. On 3 April 1998 her Worship (as she was then titled) dismissed both charges. On a later date she gave written reasons for so doing. It seems that the proceedings on the two charges before her Worship were conducted in tandem, the charge under s 300 being prosecuted as a committal, and the charge under s 178BB as a final hearing of a matter to be dealt with summarily. In any event, the important aspect is that both charges eventually were determined in favour of Mr Hamod, with a complete acquittal. 10 These asserted facts give rise to Mr Hamod's claims in false imprisonment, malicious prosecution, and injurious falsehood. Underlying each of the torts pleaded is a common element, although it is not always expressed in the same language. A plaintiff asserting malicious prosecution must prove, inter alia, that the defendant had no reasonable or probable cause to bring (or maintain) the prosecution; a plaintiff asserting injurious falsehood must prove, inter alia, that the defendant acted out of malice; a plaintiff asserting false imprisonment (or false arrest) must prove, inter alia, that the arrest and/or restraint was (were) "wrongful". In this case, the plaintiff seeks to establish each of these by reference to essentially the same asserted fact: that the police officers (Green and Eastham) had evidence of, and believed in, the validity of the Platinum Certificate and his entitlement to possession of it; accordingly (i) they had no reasonable and probable cause to bring or maintain the prosecution; (ii) they acted out of malice; and (iii) the arrest and restraint of Mr Hamod was unlawful because the police officers had no reasonable cause to suspect that he had committed any offence (see Crimes Act, s 352, now repealed and replaced). 11 Mr Hamod has pleaded and particularised his allegations in respect of these causes of action. It is convenient here to set out the relevant parts of the pleadings. 12 In pleading "False arrest and false imprisonment" he asserts: "49 … at all material times prior to 20 January 1995 members of the New South Wales Police had been made aware of false allegations made by PT Galaxy … that the Platinum Certificate held by the first and second plaintiffs was stolen and [(i)] knew that the said Platinum Certificate … was authentic and [(ii)] had no reasonable or probable cause to believe to the contrary. Particulars

Meetings between the first plaintiff [Mr Hamod], Detective Superintendent Green, Detective Eastham as well as members of the Federal Police on or about October/November 1994 dismissing allegations of an alleged theft of the Platinum Certificate by [Mr Hamod] from PT Galaxy …

51. On or about … 20 January 1995 … Detective Peter Biaggi … became aware as a result of a conversation between him and Mr Muhlbauer [the Chief of Staff of the UBS] that the Platinum Certificate … was genuine …

52. On or about … 20 January 1995 Detective Eastham and Superintendent Green confirmed to Superintendent Robert Lysaught, Detective Mike Edgerton, Detective Day and Detective Riddle that the Platinum Certificate was authentic …

61. From on or about 20 January 1995 until 2 April 1998 the Commissioner of Police and the New South Wales Director of Public Prosecutions initiated and maintained a prosecution of [Mr Hamod] for the said offences. Particulars

Persons instrumental in initiating and maintaining the prosecution of [Mr Hamod] were Super-Intendant (sic) Robert Lysaght, Sergent (sic) Andrew Day, Sergent (sic) Terry Flinders, Constable Craig Riddle and Solicitor Nick Borosh for the Office of the Director of the New South Wales Director of Public Prosecutions.

73. [Mr Hamod] pleads in the premises that his prosecution was in law malicious. Particulars

The prosecutors at all times knew that the Platinum Certificate was valid through discussions with Detective Eastham …

The prosecutors were in possession of evidence from Mr Geoff Adelman, a business associate as a result of interviews conducted in Canada which verified the authenticity of the Certificate.

Mr Muhlbauer, a representative of the second defendant, had admitted to the Police on 20 January 1995 that the Platinum Certificate was not a fake or a forgery but it was in fact genuine." 13 There are, in the statement of claim, repeated assertions that "NSW Police" were aware of the validity of the Platinum Certificate when particularised, these assertions invariably being made with specific reference to the information given to Detectives Green and Eastham. 14 Mr Hamod's notice of motion seeking discovery was filed on 4 December 2006. On 15 March the solicitor for Mr Hamod provided a document entitled "Categories of Documents for Discovery by First Defendant"; on 23 March he provided an amended document otherwise under the same title, and on 27 March a third document, again identifying categories of documents of which discovery was sought. In this latest version, the categories of documents of which discovery was sought were identified as follows: "1(a) All documents produced to or received by New South Wales Police or the New South Wales Director of Public Prosecutions relating in any way to A. the Platinum Certificate that is the subject of these proceedings, or

B. relating to the First Plaintiff, or to UBS Australia, or to USB AG in respect of the matters that were the subject of the prosecution of [Mr Hamod] (the subject of these proceedings),

Including documents so produced by or received before, during or after the prosecution:

iii. Under Mutual Assistance Scheme between Australia and Switzerland; and

(b) All documents created by New South Wales Police relating to investigations into the matters that were the subject of the prosecution of [Mr Hamod] (the subject of these proceedings), or relating to that prosecution, including documents created subsequent to the prosecution.

(c) All surveillance and transcripts of telephone intercepts produced by New South Wales Police for the purposes of the investigation or prosecution of [Mr Hamod] in relation to the Platinum Certificate.

(d) All documents containing records of complaints made by [Mr Hamod] to police at Nowra police station in October 1994 and all records of conversations by and action taken by police relating to those complaints, including records of statements made by other persons in relation to the complaints."

An explanation of the asserted relevance of the categories followed. It is not necessary to extract that here. 15 The notice of motion came on for hearing before Harrison AssJ on 5 April 2007. Her Honour gave judgment, as set out above, on 2 May 2007. She ordered that the State of NSW give discovery in accordance with the "Amended Categories of Documents for Discovery by First Defendant" dated 27 March 2007. 16 In para [15] her Honour said: "15. [Mr Hamod] asserts that the Nowra police officers believed that the certificate was genuine. Later, different police officers believed that the certificate was not genuine, and a prosecution was mounted . In order to test the reasonableness of the latter police officer's beliefs of reasonable and probable cause, it is necessary to examine the documents upon which they formed their views. The documents sought in the Amended Categories of Documents for Discovery, in my view, go to matters in issue…" (italics added) 17 It was common ground that this paragraph contained an error, in the second, italicised, sentence: that is, that police officers other than Detectives Green and Eastham (presumably meaning Day and Riddle) formed a view that the Platinum Certificate was not genuine. 18 Accordingly, the State of NSW filed a Notice of Contention, to the effect that the decision of Harrison AssJ should be affirmed on grounds other than those relied upon by her Honour, those grounds being stated as: "Her Honour … made no error of principle and the basis stated for the entitlement to discovery applied equally 'in order to test the reasonableness of the … police officer's (sic) beliefs of reasonable and probable cause' if the error is ignored." 19 On behalf of the State of NSW reliance was placed upon a recent decision of the High Court, A v New South Wales [2007] HCA 10; 81 ALJR 763. The decision was relied upon for the statements of principle concerning the tort of malicious prosecution. The following extract is from the joint judgment of Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ. Their Honours said: "[1] … For a plaintiff to succeed in an action for damages for malicious prosecution the plaintiff must establish: (1) that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant; (2) that the proceedings terminated in favour of the plaintiff; (3) that the defendant, in initiating or maintaining the proceedings acted maliciously; and (4) that the defendant acted without reasonable and probable cause." 20 In the present proceedings no issue arises as to the first or second of these. The real focus of the argument lay upon the need for Mr Hamod to prove that the police (or, as at times globally identified in the statement of claim, "the prosecutors") acted without reasonable and probable cause and the analogous elements of the other torts pleaded. This was concerned with their states of mind concerning the genuineness or authenticity of the Platinum Certificate. This is, essentially, the same issue, whether the tort under consideration is malicious prosecution, false imprisonment, or injurious falsehood. 21 The following passages from the joint judgment in A are apposite: "[38] … Insofar as one element of the tort concerns reasonable and probable cause, the question is not abstract or purely objective. The question is whether the prosecutor had reasonable and probable cause to do what he did; not whether, regardless of the prosecutor's knowledge or belief, there was reasonable and probable cause for a charge to be laid. The question involves both an objective and a subjective aspect.

[58] … the inquiry about reasonable and probable cause has two aspects. That is, to decide whether the prosecutor did not have reasonable and probable cause for commencing or maintaining the prosecution, the material available to the prosecutor must be assessed in two ways. What did the prosecutor make of it? What should the prosecutor have made of it? …

[59] … the action for malicious prosecution has a temporal dimension. To ask whether a prosecution was commenced or maintained without reasonable and probable cause directs attention to the state of affairs when the prosecution was commenced, or when the prosecutor (the defendant in the subsequent civil claim) is alleged to have maintained that prosecution. Moreover, it necessarily directs attention to what material the prosecutor had available for consideration when deciding whether to commence or maintain the prosecution, not whatever material may later have come to light …

[61] Because the absence of reasonable and probable cause is understood as containing both subjective and objective elements, one of the chief forensic difficulties confronting a plaintiff is how to establish what the prosecutor … had in his or her mind when instituting or maintaining the prosecution. Absent some admission by the defendant, the plaintiff must make the case by inference and, if the defendant gives evidence, by cross-examination …

[71] … The subject matter of the relevant state of persuasion in the mind of the prosecutor is the sufficiency of the material then before the prosecutor to warrant setting the processes of the criminal law in motion ...

[77] There are three critical points. First, it is the negative proposition that must be established: more probably than not the defendant prosecutor acted without reasonable and probable cause. Secondly, that proposition may be established in either or both of two ways: the defendant prosecutor did not 'honestly believe' the case that was instituted or maintained, or the defendant prosecutor had no sufficient basis for such an honest belief. The third point is that the critical question presented by this element of the tort is: what does the plaintiff demonstrate about what the defendant prosecutor made of the material that he or she had available when deciding whether to prosecute or maintain the prosecution?

[83] … The objective element of the absence of reasonable and probable cause is thus sometimes couched in terms of the 'ordinarily prudent and cautious man, placed in the position of the accuser' … or … the question can be said to be 'whether a reasonable man might draw the inference, from the facts known to him, that the accused person was guilty'.

[87] … The objective sufficiency of the material considered by the prosecutor must be assessed in light of all of the facts of the particular case." 22 Necessarily involved in proof by a plaintiff of the torts of malicious prosecution and false imprisonment is an examination of all the material available at the time of launching and maintaining the prosecution (or imprisonment). 23 Where a plaintiff sets out to establish the state of mind of a defendant, or, as in this case, a person for whom the defendant is liable, it is frequently necessary that this be done by inference, unless the plaintiff is fortunate enough to obtain some form of admission or otherwise inculpatory statement by that person. It is clear from the decision in A that all the material available to the prosecution is potentially relevant to a determination of the questions that arise in relation to the proof of absence of reasonable and probable cause. 24 Senior counsel who appeared for the State of NSW focussed heavily upon the pleadings and particulars concerning the state of mind of Detectives Green and Eastham. In that context he accepted that some order for limited discovery would be not inappropriate. After the conclusion of the hearing, counsel provided to the Court a document identifying the nature of the discovery contended to be acceptable. 25 The argument so advanced can be stated with relative brevity. It was that, having regard to the manner in which Mr Hamod's case has been pleaded, the only material to which he would be entitled is that which might cast light upon what was in the minds of Detectives Green and Eastham. In this respect he focussed heavily upon the particularisation of the claim in that respect - which itself was very much dependent upon their states of mind. That is so, notwithstanding that those two detectives were not the detectives responsible for the arrest on the prosecution. 26 Senior counsel also relied upon the narrower basis on which discovery may be ordered following the adoption of the Uniform Civil Procedure Rules 2005. UCPR 21.2 provides: " 21.2 Order for discovery (1) The court may order that party B must give discovery to party A of: (a) documents within a class or classes specified in the order, or (b) one or more samples (selected in such manner as the court may specify) of documents within such a class. (2) A class of documents must not be specified in more general terms than the court considers to be justified in the circumstances. (3) Subject to subrule (2), a class of documents may be specified: (a) by relevance to one or more facts in issue, or (b) by description of the nature of the documents and the period within which they were brought into existence, or (c) in such other manner as the court considers appropriate in the circumstances. (4) An order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue."

Particular emphasis was placed upon sub-rr (2) and (4). 27 I am satisfied that the argument focussed too narrowly upon the particularisation of the plaintiff's case, and failed to have due regard to the nature of the torts alleged against the police officers. A reading of the extract from the decision of A confirms that view. 28 Subject to what follows, Mr Hamod is entitled to discovery of all the material in the possession of the State authorities concerned with his arrest and prosecution. 29 Although, during the course of argument, reference was made to what was said to be the vast bulk material coming within the categories identified, no attempt was made by evidence to delineate the extent of the task that would be required by the order made by Harrison AssJ. 30 After the conclusion of the hearing, I was provided with an alternative proposal from the State of NSW, identifying the categories of documents which it contended could appropriately be ordered to be the subject of discovery. This was as follows: " First Defendant's Proposed Categories of Discovery

(a) Documents received by Green & Eastham upon which (it is said) they formed their belief that the platinum certificate was genuine.

(b) Any record of communication between the UBS Chief of staff, Mr Phillip Muhlbauer, and a member of New South Wales Police, Mr Peter Biaggi, concerning the validity of the platinum certificate.

(c) Any record of communication between Eastham and Green, Day and Riddle (including any record created by Green and/or Eastham, Day and/or Riddle) as to the validity of the platinum certificate.

(d) Any record of communication between the Australian Federal Police and Green and Eastham concerning the validity of the platinum certificate.

(e) Any record of communication between Geoffrey Adelmann and the New South Wales Police concerning the validity of the platinum certificate." 31 Because this document was provided after the conclusion of the hearing, I have not had the benefit of hearing submissions from either party on the adequacy of the documents there identified. I have been forced to make my own evaluation. While I am sympathetic to the notion that discovery should be limited to those documents which may genuinely potentially cast light upon the issue of knowledge, what is proposed perpetuates the notion that the only police officers whose state of mind is relevant are Detectives Green and Eastham. I am satisfied that this incorrect. For that reason alone I am not prepared to adopt the proposal advanced on behalf of the State of NSW. 32 The other matter which is of significance is the late stage at which this application has been made. However, that loses some of its sting in the absence of evidence of the extent of the burden the order will impose upon the State of NSW. 33 I have concluded that, notwithstanding an agreed error of fact made by Harrison AssJ, her Honour did not act on any wrong principle and correctly directed herself as to the nature of the discretion she was called upon to exercise. That being so, and notwithstanding concerns about the breadth of the documents to which the order applies, and the delay on the part of Mr Hamod in bringing the application, the appeal from the Associate Justice's order ought to be dismissed. 34 The order I make is that the appeal is dismissed with costs. **********

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