McCabe v British American Tobacco Australia Services Limited [2002] VSC 150

Supreme Court of Victoria|2002-05-07|Before: Byrne J

PRACTICE AND PROCEDURE - documents produced under compulsion - implied undertaking not to use documents for collateral purpose - application of undertaking to witness statements and answers to interrogatories - cesser of undertaking upon receipt into evidence in open court.

The plaintiff, Rolah Ann McCabe, on 26 October 2001 commenced proceeding number 8121 of 2001 in this Court against the defendant, British American Tobacco Australia Services Ltd ("BATAS") seeking damages for personal injury. On 22 March 2002 Eames J published his reasons for striking out the defence of BATAS and directed that the trial proceed as an assessment of damages. The trial is over and the matter has moved on to the Court of Appeal.

Mrs McCabe returns to the Court by originating motion in this fresh proceeding filed on 24 April 2002. She seeks orders with respect to documents which came into the possession of her solicitors in the course of her earlier proceeding. Although the present application ought properly to have been brought in the earlier proceeding[2], no point is taken about this by BATAS.

This application is brought in the following circumstances. In the earlier proceeding application was made on behalf of Mrs McCabe by summons filed on 25 January 2002 for orders striking out the defence of the defendant on the ground of irregularities in its discovery. In brief, it was alleged that BATAS had engaged in a policy of document destruction to put beyond the reach of would-be plaintiffs evidence which they might otherwise obtain on discovery and use to the detriment of BATAS. There was an issue of fact in this strike-out application whether the document destruction was carried out on proper legal advice and not with the primary intention of destroying all documents which might prove damaging to BATAS in later litigation. In opposition to the application, BATAS filed an affidavit by Graham Franklin Maher, its then in-house solicitor, sworn on 29 January 2002, to which was exhibited a letter of advice from Mallesons Stephen Jaques dated 19 March 1998. In addition there was in evidence a further letter from Clayton Utz dated 7 July 1992.

In the strike-out application the solicitors for Mrs McCabe had served a notice to produce dated 31 January 2002 directed to the defendant pursuant to Rule 35.08 and two subpoenas directed to Clayton Utz and Mallesons Stephen Jaques respectively for the production of documents, broadly speaking relating to the document destruction policy or practice. Pursuant to Rule 35.08(2) the party receiving such a notice to produce is obliged to produce the specified documents on the application, subject to claims for privilege; it is a coercive process. In response, a number of documents were identified as falling within this description, but BATAS claimed legal professional privilege as a ground to resist their production to those conducting Mrs McCabe's case.

This claim for professional privilege was met with an allegation of waiver based on Mr Maher's affidavit and the exhibits to which I have referred. In his judgment, given on 6 February 2002[3], Eames J upheld the waiver argument and directed that certain documents from the period 1990 to 1998 be produced, and this was done.

In the course of the strike-out application, affidavits were filed by each of the parties, including exhibits to those affidavits. The deponents gave oral evidence verifying their affidavits and in some, if not all, cases they were cross-examined. In the course of cross-examination, documents were tendered through the witnesses. In addition, it seems that certain documents were put in evidence otherwise than through a witness.

The present application seeks the following orders:

"2. A declaration that the following documents are not the subject of any implied undertaking by the Plaintiff or her solicitors: - (a) All exhibits tendered in evidence during the Plaintiff's application commenced by summons dated 25 January 2002 in proceeding numbered 8121 of 2001. (b) All affidavits (and exhibits attached thereto) filed and served by the defendant for the purposes of the plaintiff's application commenced by summons dated 25 January 2002 in proceeding numbered 8121 of 2001. 3. Alternatively, that the plaintiff and her solicitors be released from their implied undertakings in relation to the documents identified in paragraph 2 herein."

It is supported by an affidavit of Peter Gordon, the solicitor for the plaintiff, sworn on 24 April 2002. Mr Gordon says that he has received two requests that he provide copies of documents concerning the decision in the earlier proceeding. The first request dated 21 April 2002 is from the US Department of Justice in Washington DC in the United States of America which says that it is representing the United States in a claim alleging violation of the Racketeer Influenced and Corrupt Organizations statute 1961 against "certain cigarette companies, including British American Tobacco (Investments) Limited ("BATCO"), and its North American affiliate-agent Brown & Williamson Tobacco Corp". Neither of these two named companies is a party to either of the McCabe proceedings in this Court.

The second request is from the Australian Competition and Consumer Commission ("ACCC") dated 18 April 2002. The ACCC says that it is investigating possible breaches of the Trade Practices Act 1974 by BATAS and Clayton Utz arising from conduct identified in the judgment of Eames J of 22 March 2002. It then requests "a copy of documents in your possession which relate to the McCabe matter and which you are able to provide voluntarily". These requested documents are particularised as being transcripts of court proceedings, pleadings, affidavits filed on behalf of the plaintiff and "any other documents you think may be relevant".

It will be noted from this summary that, for the purposes of the present application, the letters are not specific in their requests. Insofar as ACCC has particularised the documents in which it has an interest, the transcript, the pleadings and the plaintiff's affidavits (except perhaps exhibits) are not the subject of the present application. I gather from what I have been told that Mr Gordon has been in contact with the writer of the letter from the US Justice Department but this person in his letter of 21 April 2002 seeks only "materials concerning the recent decision" of 22 March 2002. Neither writer suggests that any compulsion or even encouragement is being brought to bear on Mrs McCabe or her solicitors. It would seem, however, that she is, or perhaps they are, sufficiently willing to comply with the request to take the trouble to make this application.

The present application seeks orders with respect to exhibits tendered in evidence in the strike-out application and affidavits, including the exhibits, filed and served by BATAS in that application. Counsel for BATAS accepted that no relief was required with respect to the affidavits and the exhibits to these affidavits, for these were voluntarily filed by it and read in the application. My concern, therefore, is with the exhibits tendered in the course of oral evidence of the BATAS witnesses.

Mr Gordon, in a memorandum submitted after the close of oral argument, provided a list of 37 documents which are some of the 52 exhibits tendered by the plaintiff at the strike-out application. He seeks orders with respect to all of these 37 documents; BATAS resists these orders with respect to each of them. Thirty-one of the 37 documents were the subject of a claim for legal professional privilege. Of the 37 documents, all but two[4] may be said to have been produced under compulsory court process[5]. These two documents are simply shown as having been "produced by the defendant during the hearing". I have been told that they were produced by counsel for BATAS pursuant to a call for production by counsel for Mrs McCabe in the course of the hearing. Given their description, I shall assume that these documents, too, were not brought into court voluntarily.

Six of the listed documents were not the subject of a claim for privilege. The details of these documents are as follows:

Produced by the defendant in response to notice to produce

Memorandum from Mr Cannar to Mr Nagle 25/02/98 and attachment dated 12/06/98

Produced by the defendant in response to notice to produce

Plaintiff's interrogatories for the examination of the defendant and defendant's answers to interrogatories

Supplementary Order 44 Statements of Dr George Seinden dated 26/02/02

On behalf of Mrs McCabe, two fundamental propositions were advanced. First, any restraint upon use for a collateral or ulterior purpose which may attach to a document which comes into the hands of a litigating party in the course of the court coercive process disappears if and when the document is tendered in evidence, unless the court makes some suppression or other order. Second, alternatively, if the restraint survives the tender, the plaintiff should be released from it in this case, at least to the extent of complying with the requests of the ACCC and US Justice Department.

Counsel for BATAS contended that no circumstances here exist to warrant the release of Mrs McCabe and those advising her from the undertaking. Counsel submitted, too, that the rights and obligations of Mrs McCabe and her legal advisers with respect to the dissemination of the documents in question are further affected by the claims for legal professional privilege, which claims are not waived or abandoned by BATAS.

It is clear that, in civil proceedings, documents produced by one party to litigation to another party pursuant to the coercive process of the Court are received subject to an implied undertaking to the Court[6] not to disclose them for any purpose other than in relation to that litigation.[7] Such an implied undertaking automatically arises with respect to documents produced by a party pursuant to the discovery process[8] or by a stranger in response to a subpoena to produce[9] or pursuant to any other coercive court process. This undertaking extends not merely to the documents themselves but also to copies of those documents and information derived from these documents[10]. Accordingly, it attaches to information provided in answers to interrogatories[11] and to the content of witness statements delivered in obedience to court order[12]. It may also attach to other classes of document or their content with which I am not here concerned[13]. The existence of this restraint has the further consequence that such documents, when filed in court, are not, so long as the restraint continues, available for public inspection pursuant to Rule 28.05.

The rationale behind this principle lies in the fact that the court's coercive process is an interference with the private right of a person to the confidentiality of their own documents or information. Where this private right is required to yield to the higher public right, that justice must be afforded by the legal process to litigating parties, this interference must be kept to the minimum necessary to give effect to the public right[14].

So much was not controversial before me. On behalf of Mrs McCabe it was then contended that this undertaking is dissolved when the document or the answer to interrogatory is received in evidence or the witness statement is adopted or verified by the witness or otherwise received in evidence at a hearing in open court. In Harman v Secretary of State for the Home Department[15], documents were read in the course of counsel's opening but not tendered in evidence. The words spoken by counsel in open court were spoken to the world and, subject to contrary order of the court, the information which they convey may have been used by the hearer for any purpose. The majority of the Lords held that, notwithstanding this, the documents, which may have been read aloud and whose content may therefore have been disclosed by counsel in the opening, retained the protection of the implied undertaking. Accordingly, if a party or its legal representative were to release them or a copy of them or otherwise use them otherwise than for the purpose of the litigation in which they received them, this was a breach of this undertaking. This common law principle, which has been abrogated in England in 1987[16] and in the Federal Court of Australia in 1989[17], remains the law in this Court.

The application of the common law restraint upon the use of such documents and information when they have been received into evidence in open court in a civil proceeding has been the subject of controversy. This is because the rationale of the rule which requires a minimal intrusion upon the private right of confidence comes at this point into conflict with the ancient public policy that requires that, subject to immaterial exceptions, the judicial process be conducted in the public eye[18]. In the past, when civil litigation was conducted mainly orally and often with the participation of a jury, this conflict may have been resolved by the fact that the evidence was spoken aloud. The evidence, thereupon, moved into the public domain, for words spoken in open court are available to all, unless the judge otherwise directs[19]. Moreover, interested members of the public might obtain copies of the transcript of the proceeding if this is available. By 1982, when Harman's case was decided, some judges had adopted the practice of reading documents out of court rather than consume expensive court time by permitting them to be read aloud. Indeed, Lord Diplock and Lord Roskill both encouraged trial judges to avoid the uneconomic practice of unnecessarily permitting the lengthy reading aloud of documents:

"Where the documents are voluminous - and the more voluminous they are the greater the advantage of possessing a complete set of copies of them if it is desired to make use of their contents for any purpose - the judge who has control of the trial of the action and whose duty, as a member of the judiciary, is owed not only to the litigants in that particular action but also to litigants in other actions that are waiting to come on has a duty to see that time is not wasted. He ought to be chary of allowing written documents which he (or a witness) can read for himself much more quickly silently to be read aloud by counsel in their entirety instead of confining counsel to oral references to the most material parts of them. The reason for the rule in Scott v. Scott [1913] A.C. 417 is not to encourage such judicial torpitude; as Bentham put it one of the reasons for the rule is just the contrary."[20]

Implementation of this recommended practice has the consequence that the expression "read in court", when referring to an affidavit or an exhibit, becomes a fiction which harks back to the days when this was done aloud.

The ensuing two decades of civil commercial litigation have witnessed the progress of this trend in the interests of increased efficiency in the trial process. The modern trial judge is confronted with substantial court books, often in electronic form, volumes of witness statements, written outlines of counsel's openings and final addresses, chronologies and photocopies of cases relied upon, most of which are to be read out of court and which, for the most part, are merely alluded to at trial. This serves to make the curial and adjudicative process less and less comprehensible to the person in the public gallery. The achievement of the fundamental policy objective, that this process be conducted under public scrutiny, may require in this modern environment not only that judgments be fuller than may have been the practice a century past[21], but that the public have more ready access to the written communications to the judge by witnesses and counsel as part of this process[22].

I mention these matters because the debate in Harman's case concerned the contention that the implied undertaking disappeared when the document was read in open court and its content thereupon lost its confidential character. The majority[23], as I have mentioned, held that it did not. The minority opinion[24], which was that the undertaking was dissolved when the document was read in court, fastened upon the anomaly that when a document was read in open court its content might be used for a collateral purpose by any person in court except the party and its legal advisers, for it is only these who are bound by the implied undertaking. All of the Lords, however, were troubled by the consideration that the suggested cesser of the undertaking depended upon the fortuitous circumstance whether the document was actually read aloud in court.

The point which emerges in the present application is whether the implied undertaking disappears when the document is received into evidence, whether or not this be accompanied by its being read aloud in court. Counsel for BATAS did not directly submit that it did not then disappear. I say "directly" because the main thrust of their submission was that there were in this case no special circumstances warranting an order that the documents be permitted to be released to the US Justice Department or to the ACCC. Such a submission must presuppose that the implied undertaking continues, for, if it does not, no such order is required. In such a case, it would be for BATAS itself to seek an order restraining Mrs McCabe and her solicitors from complying with the requests that the documents be released. No such application has been made.

The answer to this indirect submission, in this jurisdiction at least, is to be found in the judgment of the majority of the High Court in Esso Australia Resources Ltd v Plowman[25]. This was a case were the point in issue was the application of the implied undertaking to documents and information produced by a party compulsorily under a direction of an arbitrator in a private arbitration conducted under the Commercial Arbitration Act 1984 (Vic). In the course of discussing the application of the undertaking to litigation, Mason CJ said this:

"In relation to documents produced by one party to another in the course of discovery in proceedings in a court, there is an implied undertaking, springing from the nature of discovery, by each party not to use any document disclosed for any purpose otherwise than in relation to the litigation in which it is disclosed. Over a century ago, Bray on Discovery stated: `A party who has obtained access to his adversary's documents under an order for production has no right to make their contents public or communicate them to any stranger to the suit... nor to use them or copies of them for any collateral object... If necessary an undertaking to that effect will be made a condition of granting an order.' Because an undertaking is implied, it has not been the practice to condition the making of orders in that way. The implied undertaking is subject to the qualification that once material is adduced in evidence in court proceedings it becomes part of the public domain, unless the court restrains publication of it."[26]

In Ainsworth v Hanrahan[27] Kirby P, speaking of the undertaking in the context of answers to interrogatories, said that "[o]nce the answers are tendered or read in open court, pace Harman, the liability in contempt for their later use will evaporate".

I should add that I do not see the earlier decision of McLelland J in United States Surgical Corp v Hospital Products International Pty Ltd[28] as taking a different position. This was a case where the defendant sought to prevent the plaintiff from having access to documents of a confidential nature which had been produced by the defendant upon discovery or by strangers in response to subpoenas. Specific directions had been given from time to time by his Honour to preserve this confidentiality by restricting access to certain individuals. These directions overrode the common law implied undertaking. In his discussion of Harman's case it appears that his Honour preferred the view of the minority: that the undertaking was dissolved once the documents were read aloud in open court, but, in any event, he concluded as follows in the context of the case where his specific direction had previously denied access to the documents by the plaintiff:

"On the other hand once those documents had been admitted into evidence in open court the plaintiff might have applied for leave to take copies thereof. The reason why the plaintiff has not heretofore applied for such leave is no doubt because it has not been necessary since the plaintiff's representatives already had copies as a result of discovery. But in my view if such leave had been sought in relation to documents admitted into evidence in open court, it would have been granted, possibly subject to some restrictions on use of the copies, depending upon the nature of individual documents, but certainly not subject to any restriction which would have the effect of precluding the use thereof for the purposes of the above-mentioned Connecticut proceedings. As between the parties such documents have lost their confidentiality by being admitted in evidence in open court in the (at least notional) presence of the public and of the plaintiff, and there is every reason why in such circumstances they should be available for the purposes of the related litigation in the United States."

I conclude therefore that, upon its receipt into evidence in this case, the implied undertaking of Mrs McCabe and her legal advisers not to use a document or the information contained in it otherwise than in the furtherance of her proceeding against BATAS was dissolved. Subject to any other applicable restraint, she and her advisers were and are at liberty to use the document and the information for such lawful purpose as they see fit.

The practical consequence of this conclusion in the conduct of a civil trial is that a person responding to a subpoena for production should be made aware that, in the event that one or more of the documents produced is tendered in evidence, this document and its contents may receive much greater publicity than may have been expected to follow its mere production to the court and inspection by the parties who are subject to the implied undertaking. It is therefore prudent for trial judges to alert the person responding, to the possibility that the document produced may move into the public arena when tendered and to enquire whether the person wishes to be heard upon such an event.

The conclusion which I have reached disposes of the matter before me, at least with respect to the six documents mentioned in [12] above. These documents are not affected by the implied undertaking. Eames J has on 11 April 2002 dissolved the order prohibiting the publication of any report of the strike-out application. I say nothing as to the uses to which they might be put, for there may be other restraints, legal or ethical which come into play.

The position with respect to the remaining 31 documents is or may be more complicated. They too are not subject to the implied undertaking. There is, however, on foot a claim for legal professional privilege with respect to these, a privilege which Eames J has held to have been waived. His decision on this point is, I understand, presently before the Court of Appeal. Moreover, counsel for BATAS said that, since the waiver was one limited to the application then before his Honour or perhaps limited to the whole of the earlier McCabe proceeding, the privilege otherwise continues and operates to prevent any legal representatives of Mrs McCabe forwarding the documents to the US Justice Department or a ACCC. Upon my enquiry whether the present application with respect to these 31 documents should await the determination of the Court of Appeal or whether it was a matter for the Court of Appeal itself, I was told no; the Court of Appeal will not as part of the appeal be called upon to determine this question. The submission put on behalf of BATAS was directed to resisting an order sought by Mrs McCabe that she and her legal advisers be released from the implied undertaking. Given my conclusion that the undertaking is gone, it is not necessary for me to consider this submission. If BATAS now wishes to rely upon some or all of the matters mentioned in their submission in support of an application that some fresh restraint be imposed upon the use of the documents, it is for it to apply for such an order. I will deal with this application if and when it is brought.

I therefore propose the following declaration and order:

1. Declare that the following documents received in evidence as exhibits in the application of the plaintiff brought by summons filed on 25 January 2002 in proceeding number 8121 of 2001, namely, Exhibits P.4, P.5, P.6, P.8, P.9, P.10, P.11, P.12, P.13, P.14, P.15, P.16, P.17, P.18, P.19, P.20, P.21, P.22, P.23, P.24, P.25, P.28, P.29, P.30, P.32, P.33, P.34, P.35, P.36, P.44, P.45, P.46, P.47, P.48, P.49, P.50 and P.51 are not the subject of any implied undertaking by the plaintiff or her solicitors not to use them or their content for any purpose other than in relation to that litigation.

2. The costs of the plaintiff be paid by the defendant.

[2] Holpitt Pty Ltd v Varimu Pty Ltd [1991] FCA 269; (1991) 29 FCR 576; Playcorp Ltd v Tyco Industries Inc [2000] VSC 440.

[5] Subpoena, notice to produce, answer to interrogatories and O44 Statements.

[6] Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764, per Hobhouse J.

[7] Riddick v Thames Board Mills Ltd [1977] QB 881; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10.

[8] Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32, per Mason CJ, Dawson and McHugh concurring, and at 46, per Toohey J.

[9] United States Surgical Corporation v Hospital Products International Pty Ltd (unreported, SC (NSW), McLelland J, 7 May 1982); Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322.

[10] Crest Homes plc v Marks [1987] 1 AC 829 at 854, approving Sybron Corporation v Barclays Bank plc [1985] 1 Ch 299 at 318, per Scott J.

[11] Ainsworth v Hanrahan (1991) 25 NSWLR 155.

[12] Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 at 510, per McPherson J; Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd [1994] FCA 1314; (1994) 53 FCR 125 at 131-2, per Hill J; ACCC v Telstra Corporation Limited [2000] FCA 28; (2000) 96 FCR 317 at 322, per Lindgren J.

[13] See Cross on Evidence, Aust ed [25055].

[14] Riddick v Thames Board Mills Ltd [1977] QB 881 at 896, per Lord Denning MR.

[16] See Order 24 Rule 14A which is presently found in CPR 31.22(1)(a).

[18] Scott v Scott [1913] AC 417; Russell v Russell (1976) 134 CLR 495 at 520, per Gibbs J.

[19] For example, no action is maintainable for a faithful and accurate report of court proceedings: Wrongs Act 1958 (Vic) s. 4.

[20] [1983] 1 AC 280 at 305-6, per Lord Diplock.

[21] See SmithKline Beecham Biologicals SA v Conaught Laboratories Inc [1999] 4 All ER 498 at 512, per Lord Bingham CJ.

[22] See Barings plc (in liq) v Coopers & Lybrand [2000] EWCA Civ 148; [2000] 1 WLR 2353 at 2346 and following, per Lord Woolf MR; Lilly Icos Ltd v Pfizer Ltd [2002] EWCA Civ 2; [2002] 1 All ER 842 at 846, per Buxton LJ.

[23] Lord Diplock, Lord Keith and Lord Roskill.

[26] (1995) 183 CLR 10 at 32-33 (footnotes omitted), Dawson and McHugh JJ concurring.

[28] Unreported, SC (NSW), 7 May 1982, set out in Ritchie, Supreme Court Procedure, NSW at [13,037].

Arbitration Act 1984

At a glance

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