Plaintiffs v Defendants

Supreme Court of Victoria|2008-12-18|Before: FORREST J

PRACTICE and PROCEDURE - Release of documents obtained pursuant to search and seizure order - Obligation to use documents for the purpose of the proceeding only - Application for documents to be released to Victoria Police - Sufficiency of evidence adduced - Application dismissed.

1 The plaintiffs, Visy Board Pty Limited and associated companies ("the Visy Group"), in February of 2006, obtained from this Court search and seizure orders[1] in respect of a large number of the defendants' documents. Pursuant to that order, documents were seized and have since been held by Visy Group's solicitors.

2 Mr Stephen D'Souza, the first defendant, and the second defendant, Mr Mario Murzello, were employed by one or other of the Visy Group companies in the shipping department. The other defendants, including Aero Marine Logistics Pty Ltd ("AML") are alleged to have assisted Mr D'Souza and Mr Murzello in breaching their contractual and fiduciary duties or alternatively were in knowing receipt of proceeds obtained in breach of fiduciary duties.

3 Visy Group now seeks to be released from its obligation not to use the documents other than for the purpose of this proceeding. It seeks to have the documents released to an officer of Victoria Police for the purpose of his investigations into the conduct of one or more of the defendants.

4 The history of this proceeding is complex and only part needs to be retold for the purpose of this application.

5 On 8 February 2006, Habersberger J made ex parte search and seizure orders in relation to documents located at:

(a) The Highett premises of Mr D'Souza and his wife, Valerie, the sixth defendant.

(b) The Taylors Lakes premises of Mr Murzello and the seventh defendant, Jacinta D'Souza, who is no longer a party to the proceeding.

(d) The offices of Mr D'Souza and Mr Murzello at the Visy Group premises in Melbourne.

6 The sixteen boxes of documents seized pursuant to the orders remain in the possession of the Visy Group's solicitors.[2]

7 In October 2006, Visy Group issued a summons seeking summary judgment against each of the defendants. It was heard by a Master and on 17 December 2007 it was dismissed and leave given to the defendants to defend. On 21 November 2008, Byrne J dismissed the appeal from the Master.[3]

8 It was not in issue that before Visy Group and its solicitors could release the documents seized pursuant to Habersberger J's order, an order of the Court was necessary.[4]

9 The issue between the parties is whether the material relied upon is such that I should be persuaded to relieve Visy Group from its obligation of confidentiality and release the contents of the sixteen boxes to Victoria Police.

10 Mr Delany SC, who appeared with Mr Archibald on behalf of the Visy Group, relied upon an affidavit sworn by Detective Senior Constable Mynott, an investigating police officer. They contended that, given the request made by Detective Senior Constable Mynott, Visy Group should be released from the undertaking. He pointed to the fact that a criminal investigation is ongoing and such an order would avoid complications associated with the issuing of a search warrant, which was the alternative means by which Detective Senior Constable Mynott could obtain the documents. He argued that there was a public interest in facilitating the police investigation of the defendants and this outweighed the public interest in protecting the confidentiality of documents compulsorily acquired. The investigation needed to be progressed and this was the way to do so.

11 Mr Panna SC for the first defendant and Mr Selimi for the third, fourth, fifth and sixth defendants opposed the making of an order on the basis that the material did not support the granting of the application.[5] The affidavit of Detective Senior Constable Mynott, it was submitted, arrived at a curious time in the proceedings - shortly prior to the hearing by Byrne J of an appeal from the Master in relation to the application for summary judgment. They pointed to the odd role being taken by Visy Group as a public minded citizen at the same time as prosecuting a civil claim against the defendants. They argued there were a number of significant deficiencies in the affidavit and particularly the failure of Detective Senior Constable Mynott or Visy Group to identify, with any specifity, the reason for the release of all the documents, or the relevance of the documents required when the law required some precision as to these matters.

12 As I have said, Visy Group filed an affidavit prepared by its solicitors sworn by Detective Senior Constable Mynott of the Crime Department of the Victoria Police. He is a subordinate to Detective Inspector Potter who is in charge of the investigation into the dealings between AML and Visy Group.[6] He deposes that Victoria Police received a complaint in February 2006 from Visy Group in relation to "transactions and dealings with AML". Victoria Police was supplied with a folder of documents by Visy Group, then, over two years later, in May 2008 it received material consisting of nineteen lever arch folders of documents obtained in the course of this proceeding, but not including the documents obtained pursuant to the search and seizure orders made by Habersberger J.

13 Having reviewed those documents, he deposed as follows:

"I consider that:

(a) there are grounds to suspect that there may have been offences committed in relation to the matters which are the subject of the investigation, including obtaining property by deception contrary to s 81 of the Crimes Act, requiring further investigation;

(b) in order to continue the investigation, it is necessary for Victoria Police to have access to all materials obtained from the defendants' premises as a result of execution of the search orders made on 8 February 2006, and all other materials filed and served or otherwise obtained by Visy Group in the proceeding;

(c) some documents may require forensic examination, in which case it will be necessary for Victoria Police to have access to the original documents; and

(d) without access to the documents referred to in paragraphs (b) and (c) the investigation by Victoria Police will be unable to proceed."[7]

14 A letter of 15 May 2008 written by Mr Kaye, general counsel of Visy Industries, to Detective Inspector Potter was exhibited[8] and accompanied the folders.

15 In Hearne v Street, [9] the High Court set out the nature of the obligation of a party who obtains material pursuant to the compulsory processes of the Court. Hayne, Heydon and Crennan JJ said:

"Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits." (My emphasis).

16 The statement of principle is derived from the decision of the House of Lords in Harman v Home Department State Secretary[10] and is often referred to as the implied undertaking; the Court in Hearne noted that this expression may be misleading and that in truth "it is an obligation of law arising from circumstances in which the material was generated and received."[11]

17 It was not in issue on this hearing that a party may obtain an order of the Court releasing that party from the obligation and permitting the disclosure of the documents to a third party. The question here is whether the evidence warrants such an order.

18 In Crest Homes PLC v Marks,[12] Lord Oliver (with whom the other members of the House agreed) said of the general principle in respect of release of such documents or information:

"... the Court will not release or modify the implied undertaking given of discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery." (My emphasis).

19 In Rank Film Distributors Ltd v Video Information Centre[13], Lord Fraser acknowledged that there may be a public interest in favour of the disclosure of material covered by the obligation to the criminal authorities which would override the public interest in the administration of justice in preserving the confidentiality of the material obtained by the compulsory processes of the law.

20 In Australia, in Esso Australia Resources Ltd v Plowman,[14] Brennan J stated that -

"the dispensing power is not freely exercised but it will be when special circumstances appear".

21 As the Court of appeal said in British American Tobacco Australia Services Ltd v Cowell (No.2), the release from the obligation "must vary from case to case".[15]

22 The relevant considerations in determining whether to release documents to authorities investigating alleged criminal activities were identified by Lee J in Bailey v Australian Broadcasting Corporation:[16]

"In the present case that countervailing public interest is said to be the location and prosecution of criminal offenders. In my opinion, in determining the weight to be given to a public interest of that kind, some of the factors on which the Court will focus include: the nature of the offence alleged; the cogency of the evidence sought to be adduced in support of it; the authority to which the documents are sought to be disclosed; the manner of the authority's intended user; the possibility of misuse by that authority and any prejudice, actual or potential, which may be occasioned to the respondents by the disclosure. Of course this is not an exhaustive list.

...

Where the administration of justice would not be frustrated or unduly impeded by other than strict adherence to the undertaking that was a circumstance, not in favour of granting leave, but which would comfort a court otherwise disposed to do so in an appropriate case."

23 In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd,[17] Wilcox J said the following in relation to special circumstances:

"For 'special circumstances' to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding."

24 Merkel J, in Australian Securities and Investments Commission v Marshall Bell Hawkins Ltd,[18] noted that the observations of Wilcox J have been applied on a number of occasions by judges of the Federal Court. Indeed, his Honour then applied those principles and identified in general terms the requirements upon a party seeking to establish special circumstances to justify the release:

• Specify the documents in respect of which the modification or release is sought.

• Specify the purpose for which the modification or release is sought.

• Satisfy the Court that the special circumstances relied upon by the party warrant or justify the modification or release sought.

"The requirements of specificity in respect of the documents to be used and the purpose for which they are to be used is appropriate because the implied undertaking should only be modified or released to the extent that it is in the interests of the administration of justice or in the public interest to do so. Thus, the modification or release should be no greater than is necessary or appropriate to meet the interests of the administration of justice or the public interest. Further, in determining whether to exercise its discretion to grant the modification or release sought, it will usually be necessary for the Court to identify with precision the documents to be released and the purpose of that release." (Citations removed, emphasis added).

The circumstances in which the documents came into the hands of the applicant

25 Search and seizure orders are, by their very nature, Draconian, empowering a party to hold, against the will of a civil opponent, the other party's documents. It is not surprising that in circumstances where, in the course of criminal proceedings, a search warrant would be necessary to obtain such documents based upon proper grounds, that the law requires special circumstances to be demonstrated before documents are released. It is in this context that the law requires that the applicant provide a proper and cogent basis for the modification of the obligation on the part of the party holding the documents. This is a pre-requisite to the exercise of the Court's discretion in releasing the documents which have been seized.

26 Detective Senior Constable Mynott has sworn that there are grounds to suspect there may have been offences committed. He is prepared to commit to only one specifically, namely, obtaining property by deception contrary to s 81 of the Crimes Act. He does not identify which of the defendants are the subject of investigation, nor which of the defendants is suspected of committing the subject offence.

27 No attempt is made by either Detective Inspector Potter or Detective Senior Constable Mynott to identify or specify the nature or type of the documents sought to be obtained. Notwithstanding that there are 16 boxes of documents and that Victoria Police have had access to the 19 folders which, one assumes, should have given the investigators some insight as to what was in the boxes, nothing is said about the nature of the documents sought, nor their relevance to the particular defendants and the criminal charges they may face.

28 Some two years elapsed after Visy Group supplied the first tranch of documents. There is no evidence as to what, if anything, Victoria Police have done over the intervening two years in processing the investigation. There is no explanation proffered by Detective Senior Constable Mynott as to why it took so long to make this request. The timing of the request is curious. After a gap of over 26 months, there was a discussion between Detective Inspector Potter and Mr Robert Kaye, general counsel of Visy Industries.[20] The circumstances surrounding "the recent discussion" referred to in that letter are not deposed to by Detective Senior Constable Mynott. What is clear from the correspondence is that the 19 Lever Arch folders containing ten affidavits with exhibits sourced from Visy's own books and records were provided to Victoria Police, as well as affidavits sworn by some of the defendants, but excluding exhibits. In a schedule attached to the letter, topics are identified, including transcripts of interviews and statements of experts, including forensic accountants. One would have thought, with this array of information, Victoria Police would have been able to identify with some precision the documents required for its investigation and the purpose for seeking such documents. However, the basis upon which the documents are sought is not specified, other than, to use the vernacular, "assisting police with their inquiries". The documents sought are not identified with reference to date, time, place or author, and there is no indication of their relevance, other than an oblique reference to investigation of "transactions and dealings with AML".

29 Although, during the course of argument, there was reference by Visy Group's counsel to difficulties associated with the execution of a search warrant,[21] there was no suggestion in Detective Senior Constable Mynott's affidavit that he proposes to seek such a search warrant. I put this suggestion to one side.

30 The sixteen boxes of documents were seized at the commencement of the civil proceeding and now Visy Group, a party to that proceeding, seeks to be released from that obligation on the basis that it will provide those documents to Victoria Police to assist it with further enquiries as to the criminal liability of one or other of the defendants. That fact, of itself, would not preclude the release of the documents provided proper material supports the application. However, the material adduced in support of the application lacks any cogent force; it falls well short of providing a proper basis upon which to order release of the documents. The purpose for the release is identified in only the most general sense. Not one document or group of documents is identified with precision. There is no indication as to which of the defendants the documents relate to. A delay of over two years and then a request for all documentation does not engender confidence as to the extent of the research into the evidence currently available to Victoria Police.

31 No special circumstances have been demonstrated by Visy Group to justify the release of the documents.

32 Of course, in the event of the matter proceeding to trial, if the documents are used in the course of the trial, they will then become available to Victoria Police. Alternatively, a further application may be made at a later point of time upon proper grounds directed specifically to certain documents or groups of documents related to particular identifiable offences alleged to have been committed by identified persons.

33 I am not satisfied that the public interest requires Visy Group to be released from its obligation to maintain the confidentiality of the documents seized by it. The material is inadequate and does not demonstrate any proper basis for varying the order made by Habersberger J.

34 In the result, the application must be dismissed with costs.

[1] Also known as Anton Pillar orders: [1976] Ch 55; now the subject of O37B of Chapter 1 of R.S.C. and Practice Note 2 of 2006.

[2] Subsequently, orders were made by Williams J on 4 April 2007 and Byrne J on 17 December 2007 varying parts of the orders of Habersberger J - irrelevant to the issues on this application.

[4] See Bank of Crete S.A. v Koskotas (No.2) 1 WLR 919.

[5] The second defendant, by letter, did not consent or oppose the making of the orders and did not appear on the application.

[6] [1] and [4] of Detective Senior Constable Mynott's affidavit.

[7] [7] of Detective Senior Constable Mynott's affidavit.

[16] [1994] 1 Qd R 476, 488; in that case the judge examined the documents which were the subject of the application for release.

[20] Letter of 15 May 2008 - Exhibit RM1

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