the Application of Nicholas Basil Cannar; re Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13177/02 the Application of Nicholas Basil Cannar; re Sharon Y Eubanks, being the person nominated by the United States District Court for the District of Columbia in proceedings United States of America v Phillip Morris Incorporated et al Civil Action No.99-CV-2496 (GK), for the purposes of applying for orders under section 33 of the Evidence on Commission Act 1995

JUDGMENT 1 BELL J: On 9 December 2002 James J made Orders, ex parte, pursuant to s 33 of the Evidence on Commission Act 1995 (NSW) (the Act), requiring that Nicholas Basil Cannar (the applicant) be examined in relation to the topics of testimony identified a letter of request for international judicial assistance (the letter of request) issued by the United States District Court for the District of Columbia (the US District Court) to the Registrar of this Court on the application of the respondent, Sharon Eubanks, the person nominated by the US District Court in proceedings United States of America v Philip Morris Incorporated et al Civil Action no 99-CV-2496 (GK) (the US proceedings) (the Orders).

2 By notice of motion filed on 5 February 2003 the applicant moved to have the Orders set aside. The power so to do is provided by Pt 40 r 9 of the Supreme Court Rules 1970 (the SCR).

3 British American Tobacco Australia Services Limited (BATAS) filed a notice of motion in the proceedings on 11 February 2003 claiming orders including that it be joined as a defendant in the proceedings. 4 British American Tobacco (Investments) Limited (BATCo) by notice of motion filed on 19 February 2003 claimed orders, including that it have leave to appear at any examination of the applicant and to cross-examine the applicant. 5 Each of the motions came before me for hearing on 4 June 2003. On that occasion I granted leave to the applicant to file an amended notice of motion. By this motion he seeks to have the Orders, as amended by Buddin J on 17 February 2003 and by me on 9 May 2003, set aside and, in the alternative, he seeks certain variations to them. There was no objection to the applicant moving on his amended notice of motion on the basis that the hearing would be confined to the relief sought in paragraph 1 and that argument as to the variations proposed by the applicant in paragraph 2 would await the determination of the former. 6 With the consent of the respondent, the applicant and BATAS and BATCO I directed that evidence led with respect to one motion be evidence in the other two motions. The joint tender bundle, Ex "A", contained copies of the letter of request. Paragraphs 6 to 9 and paragraph 11 in the copy of the letter of request (at pp 97-100 of Ex "A") was the subject of objection by BATCo. These paragraphs refer to the contents of documents exhibited to the letter of request over which BATCo claims client legal privilege. Copies of the documents the subject of BATCo's claim, exhibits "2" to "7" to the letter of request, form part of an exhibit to the affidavit sworn by Mr John Anthony Highfield on 22 November 2002, which was tendered in the proceedings and is Ex "H". Further copies of exhibits "3" to "7" to the letter of request are annexed to the affidavit of John Anthony Highfield that was sworn on 2 June 2003 and which forms part of Ex "A". I received the copies of paragraphs 6 to 9 and paragraph 11 of the letter of request and the copies of exhibits "2" to "7" to the letter of request that appear in Ex "A" and Ex "H" subject to BATCo's objection.

7 The letter of request is signed by Judge Gladys Kessler of the US District Court. Her Honour states that the US proceedings are pending before the US District Court and that it is necessary for the purpose of justice and for the due determination of the matters in question between the parties that the applicant be called upon to provide evidence. Judge Kessler sets out in summary form the information furnished to her by the plaintiff in support of the issue of the letter of request including: "Mr Cannar is the former long-time Senior Solicitor and head of the legal department for BATCo in the United Kingdom. The United States alleges that Mr Cannar's responsibilities included devising and implementing document management policies for BATCo in the UK, and also for the implementation of BATCo's world wide document management, retention and destruction policies. This included setting requirements of document retention and destruction for BATCo operating companies throughout the world. … One such BATCo operating company was WD&HO Wills ("Wills"), at one time a wholly owed BATCo subsidiary in Australia, later known as BAT Australia Services Ltd ("BATAS"). Mr Cannar also had a responsibility for managing the flow of documents between BATCo and its United States affiliate, Brown & Williamson, and also the exchange of documents and information among BATCo's various operating companies (including Wills), and Brown & Williamson. … Later, in mid-1990's Mr Cannar moved from BATCo in the UK to work full-time at Wills in Australia. He held several roles with Wills, and was, among other things, an attorney with responsibility for document management, retention and destruction at Wills. … Mr Cannar, as head of Wills' legal section in Australia, oversaw discovery in the Cremona case."

The BATAS motion 8 BATAS by its motion filed on 11 February 2003 claimed orders including that it be joined as a defendant in the proceedings pursuant to Pt 8 r 5 of the SCR, that the Orders be set aside, and in the alternative, that BATAS have leave to participate in the examination of the applicant for the purpose of maintaining any claim that it has to confidentiality and privilege. 9 I ruled that I would not join BATAS as a defendant in the proceedings and I dismissed BATAS' motion. I also declined to hear Mr Middleton QC, who with Mr Leeming appeared on behalf of BATAS, as amicus curiae to contend in oral and written submissions that the Orders were beyond power. These are my reasons for those rulings. 10 Prior to 31 March 2000 BATAS was known as WD & HO Wills (Australia) Ltd. The applicant is a qualified legal practitioner, who was admitted to practice in 1970. He held a United Kingdom Practicing Certificate as a solicitor in the period 1986 to 1999. From 1 March 1997 until September 1999 the applicant was employed by BATAS as its Director of Legal Services.

11 BATAS submitted that pursuant to Pt 8 r 8(1)(a) of the SCR it was a person who ought to have been joined as a party to the proceedings. Alternatively, BATAS submitted that it should be joined as a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon: Pt 8 r 8(1)(b). 12 In Mr Middleton's submission BATAS has an interest in protecting both its legal professional privilege in its confidential communications and, more generally, in the confidentiality of its information. It is reasonable to assume that if the applicant is examined upon the topics specified in the letter of request the answers to some questions asked of him will disclose the contents of communications in respect of which BATAS claims privilege. This was said to be a sufficient interest to require that BATAS be joined as a party. If joined as a defendant in the proceedings BATAS would have the opportunity of seeking to persuade the Court that the Orders should be set aside as having been made without jurisdiction. If successful in this endeavour BATAS would be spared the need of attending at any examination in order to maintain its claim of privilege. In the event that the Orders are not set aside BATAS, if joined as a defendant, would have the opportunity of making submissions with respect to variations to the Orders with a view to protecting its interests. 13 The respondent opposed both the joinder of BATAS as a defendant and the grant of leave to BATAS to be heard as amicus curiae on whether relief in the nature of certiorari should be granted to quash the Orders.

14 Mr Middleton referred to a number of cases dealing with the joinder of a person as a party within the scope of Pt 8 r 8(1)(a) and/or (b). The principles are conveniently set out in the judgment of McHugh J in Victoria v Sutton (1998) 195 CLR 291 at [77] - [78]: "[77] The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order. That practice also assists in avoiding duplication of hearings on the same issues and in avoiding the spectre of inconsistent decisions by courts or the judges of the same court. In Penang Mining Co Ltd v Choong Sam ([1969] 2 MLJ 52 at 55-56) Lord Diplock, delivering the opinion of the Judicial Committee of the Privy Council, said: 'In their Lordships' view one of the principal objects of the rule (79) is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard ... a better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?' [78] The test for determining whether a person is a necessary party has usually arisen in the context of a person seeking to join proceedings rather than a failure to join a relevant person. But the same principle must apply in both situations. Thus, in News Ltd v Australian Rugby Football League ((1996) 64 FCR 410), the Full Federal Court held that an order 'which directly affects a third person's rights against or liabilities to a party should not be made unless the person is also joined as a party. If made, the order will be set aside' (at 524). (Note that the New South Wales Court of Appeal in Chappuis v Filo (1990) 19 NSWLR 490 at 511-512 held that where a necessary party is not joined in the proceedings, the Court could determine the issues in the absence of the party although that party would, if prejudiced by the orders, have a right to apply to have the orders set aside). The Full Court pointed out that O 6, r 7 of the Federal Court Rules which states that proceedings will not be defeated by a misjoinder or non-joinder was 'intended to give effect to the abolition of the plea of abatement' ( News Ltd (1996) 64 FCR 410 at 523). The Court said that the rule was directed 'to cases where there is a curable defect, for example the misnaming of a party' ( News Ltd at 524)."

15 BATAS is not a party to the US proceedings. BATAS' interest in maintaining its legal professional privilege (and/or client legal privilege should any examination of the applicant be proceedings to which the Evidence Act 1995 (NSW) applies) did not seem to me to amount to a right or interest in the proceedings such that it ought to be joined as a defendant. Nor did I consider that BATAS was a person whose joinder was necessary in order to ensure that all matters in dispute in the proceedings be effectually and completely determined and adjudicated upon. In the event that the applicant is required to be examined on the topics of testimony set out in the letter of request it is open to BATAS to attend at the examination and to object to evidence being adduced that would disclose the contents of its privileged communications. 16 Mr Middleton submitted that I should I should hear him in any event on the question of the jurisdiction to make the Orders. In this respect he submitted that it is open to a stranger to claim orders in the nature of certiorari to quash an order made in excess of jurisdiction. In support of his submission Mr Middleton relied on the judgment of McHugh J in Re McBain; ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at [89]: "A stranger to the proceedings that gives rise to the relevant record may apply for certiorari to quash an order or judgment contained in the record. The judgment of Blackburn J in R v Justices of Surrey ((1870) LR 5 QB 466) is frequently cited (cf Waterside Workers' Federation of Australia v Gilchrist, Watt & Sanderson Ltd (1924) 34 CLR 482 at 517) for this proposition, although earlier cases had also recognised the right of a stranger to obtain certiorari. The rule that a stranger to the proceedings can apply for certiorari to quash an order, made without jurisdiction, has the same historical basis as the rule that a stranger can apply for prohibition to quash such an order ( R v Justices of Surrey at 472-3). Permitting strangers to apply for certiorari helps to ensure that 'the prescribed order of the administration of justice' is not disobeyed. In Worthington v Jeffries ((1875) LR 10 CP 379 at 382) in a passage cited in this Court, ( R v Federal Court of Australia; ex parte WA National Football League (1979) 143 CLR 190 at 201; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund (1998) 194 CLR 247 at 263 [40]) Brett J said: '[T]he ground of decision, in considering whether prohibition is or is not to be granted, is not whether the individual suitor has or has not suffered damage, but is, whether the royal prerogative has been encroached upon by reason of the prescribed order of administration of justice having been disobeyed. If this were not so, it seems difficult to understand why a stranger may interfere at all.' Perhaps a better reason - particularly in a federal system where cases deal with questions of constitutional validity - is that, if the losing party does not appeal, a judgment or order made without jurisdiction will become a precedent ( R v Federal Court of Australia; ex parte WA National Football League at 204). Hence, the public interest may be enhanced by allowing a stranger to apply for certiorari to quash such a judgment or order. As Barwick CJ pointed out in R v Federal Court of Australia; ex parte WA National Football League (at 204) such considerations 'apply with equal, if not greater, force with respect to matters where jurisdiction depends on constitutional competence'. In similar vein, Professor Wade has written ('Unlawful Administrative Action: Void or Voidable? Part 1' (1967) 83 Law Quarterly Review 499 at 503) that certiorari 'is designed to keep the machinery of justice in proper working order by preventing inferior tribunals and public authorities from abusing their powers'. These statements of Barwick CJ and Professor Wade apply with equal force to records of curial proceedings, made within jurisdiction, but which on their face demonstrate an error of law." 17 In McBain the Australian Catholic Bishops Conference sought to invoke the original jurisdiction of the High Court of Australia to claim an order for a writ of certiorari to quash the decision of a judge of the Federal Court of Australia. In the proceedings before the Federal Court the primary judge held that s 8(1) of the Infertility Treatment Act 1995 (Vic) was inconsistent with s 22 of the Sex Discrimination Act 1984 (Cth). The Court made a declaration of invalidity. None of the parties to the proceedings before the Federal Court sought to appeal from that decision. The majority in the High Court concluded that the proceedings did not involve a "matter" within the meaning of Ch III of the Constitution. The discussion of certiorari related to the power of the High Court to issue the writ to quash a decision of the Federal Court for non-jurisdictional error of law on the face of the record.

18 The circumstance that the Federal Court of Australia is a court created by the Federal Court of Australia Act 1976 (Cth) as a superior court of record is significant to the discussion of the writ of certiorari in McBain. 19 Justice Kirby observed (at [165]) that in England the prerogative writs were not available against the judgment or orders of a judge of a superior court. His Honour went on to note that the expression "officer of the Commonwealth" in s 75(v) of the Constitution has from an early time been given a wide interpretation such that the constitutional writs, and the writ of certiorari to perfect them, have issued to judges of federal courts (at [167]). 20 In Craig v the State of South Australia (1994-1995) 184 CLR 163 Brennan, Deane, Toohey, Gaudron & McHugh JJ observed that the writ of certiorari only went to an inferior court (citing R v Gray; ex parte Marsh per Deane at 387) or to certain tribunals exercising governmental powers (at 174). Their Honours went on to observe (at 175-176): "Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud, and "error of law on the face of the record". (Footnotes omitted.) 21 In McBain Hayne J set out the above passage from the joint judgment in Craig and went on to observe (at [254]): "This description of when the writ of certiorari will be available is a description apt to the supervisory role of a State Supreme Court. When the writ is sought, in the High Court, to quash the order of a federal superior court, in circumstances where the order could have been, but was not the subject of an appeal by a party, it is necessary to examine the issues in a different light".

22 In R v Gray; ex parte Marsh (1981) 157 CLR 351 at 385 Deane J reviewed the history of the writ of certiorari. After noting that the writ differed in nature from the writs of mandamus and prohibition his Honour said (at 386-7): "While the fact that a court is a superior court of record does not preclude prohibition being directed to it to prevent it from transgressing the limits of its jurisdiction, its status as such a court is prima facie inconsistent with the interference with its exercise of that jurisdiction by writ of certiorari directed to it by a supervisory court. That being so, and subject to some anomalous exceptions of which the most important is that certiorari was for a period issued to the High Court of Admiralty (cf., e.g., Marsden (ed.), op. cit., vol. I, pp. lxxvi, 1ff., 17ff., 149ff., 165ff. and vol. II, pp. xli, xliv), it has long been accepted as basic law that certiorari lies only to an 'inferior' court or tribunal and not to a superior court of record: see, e.g., per Latham C.J., R. v. Metal Trades Employers' Association; Ex parte Amalgamated Engineering Union, Australian Section (1951) 82 C.L.R., at p. 241; Chitty, ( The Practice of Law in all its Departments , 1st ed (1833) vol. II, pp. 353-354; the citations from Bacon's Abridgment, Comyns' Digest and Lilly's Practical Register set out in R. v. Chancellor of St. Edmundsbury and Ipswich Diocese ([1948] 1 K.B. 195, at p. 213), and de Smith's Judicial Review of Administrative Action , 4th ed., p. 588ff. 'It [i.e. certiorari] never goes to a superior court': per Lord Goddard C.J., R. v. Northumberland Compensation Appeal Tribunal; Ex parte Shaw ([1951] 1 K.B. 711, at p. 714), and see, generally, on appeal, (at pp. 340-342), per Singleton L.J.; (at pp. 346-347), per Denning L.J.; and (at pp. 355-356), per Morris L.J. That is not, of course, to say that the fact that a court is properly regarded as having the status of a superior court of record will preclude that status being modified either by the Constitution or by statutory provision for the issue of certiorari by, or the removal of its proceedings into, another court in a particular category of case." 23 It is to be noted that BATAS did not seek relief in the nature of certiorari in any of the prayers for relief in its motion. I was not persuaded that I have the power to grant relief in the nature of certiorari to quash a decision made by a judge of this Court. In the event that I am wrong in coming to this conclusion, I considered that there were sound discretionary reasons for refusing to grant BATAS the relief that it sought.

24 Certiorari to quash is not granted as of right: McBain per McHugh J at [95] and Hayne J at [260]. BATAS is not a person aggrieved by the Orders. The Orders were the subject of challenge by the applicant pursuant to Pt 40 r 9 of the SCR upon grounds that include a jurisdictional challenge. The applicant was represented by senior counsel and I considered it reasonable to assume that he would fully ventilate all legitimate submissions on the question of the Court's power to make the Orders. In these circumstances I did not consider that I should give BATAS leave to be heard as amicus curiae on the jurisdictional question. BATCo's claim of client legal privilege 25 The letter of request was addressed to the Registrar of this Court. A number of exhibits were annexed to it. Exhibit "2" is a copy of the judgment of Eames J in McCabe v British American Tobacco Services Limited [2002] VSC 73. Exhibits "3", "4", "5", "6" and "7" are copies of memoranda, the minutes of a meeting and a letter. The contents of exhibits "3", "4", "5", "6" and "7" are referred to in paragraphs 6 to 9 and paragraph 11 of the letter of request. 26 The proceedings before James J were commenced by summons filed on 22 November 2002. A copy of the letter of request was annexed to the summons. The exhibits to the letter of request were not annexed to the summons. In the proceedings before James J the respondent relied on the affidavit of Anthony John Highfield sworn on 22 November 2002. Exhibit "AJH-1" to that affidavit included a copy of the letter of request and copies of each of the exhibits thereto. A copy of Mr Highfield's affidavit of 22 November 2002 forms part of Ex "A". The respondent also tendered exhibit "AJH-1" to that affidavit which became Ex "H" in the proceedings before me. Ex "A" included a copy of the summons and the letter of request (at pp 5 - 21). 27 Mr Highfield annexed copies of five documents, that he said were identical to exhibits "3" - "7" to the letter of request, to his further affidavit that was sworn on 3 June 2003. He said that he had downloaded copies of these five documents from an Internet site. 28 BATCo objected to the respondent adducing evidence of the contents of exhibits "2", "3", "4", "5", "6" and "7" to the letter of request. The objection included the adducing of evidence of the contents of paragraphs 6 - 9 and 11 of the letter of request. The objection with respect to the contents of exhibit "2" to the letter of request was confined to those paragraphs in the copy of the judgment that disclose the contents of a document written by a solicitor, Andrew Foyle (the Foyle memorandum).

29 I received the joint tender bundle, Ex "A," and Ex "H" on a confidential basis subject to BATCo's objection to paragraphs 6 to 9 and paragraph 11 of the copy of the letter of request (pp.9 - 13 of Ex "A" and pp 5 - 8 of Ex "H") being adduced in evidence. The copies of exhibits "2" to "7" to the letter of request in Ex "H" and annexures "1" to "5" to the affidavit of Anthony John Highfield sworn on 2 June 2003 forming part of Ex "A" were also received on a confidential basis subject to BATCo's objection. The questions raised by BATCo's claim of client legal privilege were not without difficulty and the respondent and BATCo were content to have me defer ruling on it during the course of the hearing. In this respect, while the respondent maintained that paragraphs 6 to 9 and 11 in the copies of the letter of request that were included in Ex "A" and in Ex "H" and the copies of the exhibits thereto were both relevant and admissible in the proceedings it was not submitted that there was any prejudice to her in the ruling on BATCo's claim being deferred. 30 It was BATCo's submission that exhibits "3" to "7" to the letter of request and the Foyle memorandum are confidential documents or confidential communications for the purposes of Div 1 Pt 3.10 of the Evidence Act 1995 (NSW) (the Evidence Act). Each document was said to have been prepared or made in circumstances that satisfy s 118 and/or s 119 of the Evidence Act such that client legal privilege attaches to it. In BATCo's submission evidence that would disclose the contents of these confidential communications or confidential documents may not to be adduced over its objection.

31 A "confidential communication" is defined by s 117 of the Evidence Act to mean a communication made in such circumstances that, when it was made: (a) the person who made it, or (b) the person to whom it was made, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. 32 A "confidential document" is defined in s 117 of the Evidence Act to mean a document prepared in such circumstances that, when it was prepared: (a) the person who prepared it, or (b) the person for whom it was prepared;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. 33 Section 118 of the Evidence Act deals with client legal privilege arising out of the provision of legal advice and s 119 deals with client legal privilege arising out of the provision of legal services in connection with litigation or anticipated litigation. Those sections are in these terms: "118 Legal Advice Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or (b) a confidential communication made between 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 119 Litigation Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential documents (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party." 34 A "client" for the purposes of Div 1 Pt 3.10 includes an employer (not being a lawyer) of a lawyer, and an employee or agent of a client. "Lawyer" includes an employee or agent of a lawyer. 35 Section 134 of the Evidence Act provides that evidence that may not be adduced in a proceeding by reason of the provisions of Pt 3.10, which deals with various privileges including client legal privilege, is inadmissible.

36 In support of its claim to client legal privilege BATCo relied on the affidavit of Andrew John Christopher sworn on 29 May 2003 (the principal affidavit), together with two further affidavits sworn by Mr Christopher on 4 June and 5 June 2003 respectively. The respondent challenged BATCo's claim and relied on the affidavits of Anthony John Highfield sworn on 23 April 2003 and on 2 June 2003. 37 In his principal affidavit Mr Christopher deposed to his belief, based upon information conveyed to him by Martyn Gilbey, Senior Litigation Counsel for BATCo, that for some years prior to 1989 Brown & Williamson Tobacco Corporation Inc (Brown & Williamson), a manufacturer of cigarettes associated with BATCo, had been involved in litigation in the United States brought by plaintiffs who claimed to have suffered personal injury as the result of smoking cigarettes. This litigation together with the prospect that BATCo would itself become involved in similar litigation, led BATCo to instruct an English firm of solicitors, Lovell, White & King (Lovells) to provide it with legal advice as to the nature and scope of its potential liability to smokers and how such claims might best be defended. BATCo and a sister company, BAT (UK & Export) Limited (BATUKE), sought advice from Lovells on their potential obligations by way of discovery in anticipated litigation. In seeking this advice BATCo acted through the applicant and others. The applicant had been employed in BATCo's legal department since 1981. He was the head of that Department between January 1985 and December 1991.

38 Mr Christopher deposed to his belief that exhibits "3", "4", "5", "6" and "7" to the letter of request were: "…confidential documents created for the purpose of BATCo obtaining or being provided with legal advice and/or for the purpose of BATCo being provided with professional legal services relating to anticipated litigation in which BATCo might be a party" (paragraph 13 of the principal affidavit).

39 The respondent did not accept that the exhibits attracted client legal privilege under s 118 or 119 of the Evidence Act. Mr Sullivan QC, who appeared with Dr Bell on the respondent's behalf, observed that the assertions made in Mr Christopher's principal affidavit concerning the circumstances in which the documents were created was based on information supplied by Martyn Gilbey. The evidence was said not establish that Martyn Gilbey had personal knowledge of these matters. Mr Christopher states that Mr Gilbey was responsible for coordinating BATCo's discovery in various proceedings including the US proceedings. I note that Mr Christopher also relied for his belief on the contents of discussions and other communications that he had with partners and solicitors of Lovells and a firm named Chadbourne & Parke for the purpose of interpreting certain of the documents and confirming the matters of which he had been informed by Mr Gilbey. I was not persuaded that there was no foundation for the assertions that Mr Christopher made in his principal affidavit on information and belief.

40 Section 133 of the Evidence Act makes provision for the Court to inspect a document in order to determine a question arising under Pt 3.10. In light of the respondent's submissions as to the insufficiency of the evidence to support the assertion set out at [38] above, Mr Darke SC, who appeared for BATCo, invited me to inspect the documents. I have done so. · Exhibit "2" is a copy of the judgment of Eames J in McCabe. Quotations from a document referred to by his Honour as the Foyle memorandum are set out in paragraphs 23, 25, 27, 28, 29, 31, 32, 97, 98 and 99. · Exhibit "3" is a memorandum dated 10 September 1985. It purports to have been prepared by the applicant and another person, A. Johnson. It purports to have been signed by the applicant. The intended recipients are Messrs Bruell and Heywood. It has the appearance of being an internal memorandum.

· Exhibit "4" is a memorandum dated 26 February 1986. It appears to have been prepared by A. Johnson and the applicant. It purports to have been signed by both of them. The intended recipient is E Bruell. It has the appearance of being an internal memorandum.

· Exhibit "5" is a draft document dated 24/3/86 and described as being a "Note for the Tobacco Strategy Review Team". The document does not identify its author by signature or otherwise. I note that in a schedule to Mr Christopher's principal affidavit exhibit "5" is identified as being prepared by the applicant and A. Johnson.

· Exhibit "6" is the minutes of a meeting with the BATCo legal department held on 15 May 1986. The applicant, A. Johnson, and three other persons attended the meeting. The schedule to Mr Christopher's principal affidavit identifies the other persons present as being Andrew Foyle, Ray Thornton and Jonathon Maas. · Exhibit "7" is a letter dated 21 March 1988 on the letterhead of Lovells. It I addressed to "Mr R Thornton, BAT (UK & Export) Limited, Research and Development Centre". It purports to have been copied to the applicant.

41 Taking into account the contents of Mr Christopher's affidavit and my inspection of the documents I was satisfied that each of exhibits "3" to "7" was prepared in circumstances such that the person or persons who prepared it were under an express or implied obligation not to disclose its contents and that the dominant purpose of its preparation was the provision of legal advice to BATCo (and, in the case of exhibit "7", to BATCo and BATUKE a sister company) and/or the provision of professional legal services to BATCo (and, in the case of exhibit "7", to BATCo and BATUKE a sister company) relating to an overseas proceeding to which it or, in the case of exhibit "7", they might have become a party.

42 As I have noted, s 133 of the Evidence Act allows the court to inspect a document that is the subject of a question under Pt 3.10 "for the purposes of determining the question". I was not able to draw any inference from the appearance of the Foyle memorandum as I have not seen the document. Mr Christopher deposes to the Foyle memorandum, the subject of BATCo's claim, being the document to which reference is made in the McCabe judgment. Mr Christopher states that it was prepared by Andrew Foyle, a partner of Lovells in 1990 and he asserts that both BATAS and BATCo claim client legal privilege in it. These assertions were not said to be based upon information supplied by Mr Gilbey. The basis for BATCo's claim is not identified. To the extent that pursuant to s 133 it was open to me to determine the question by reference to the paragraphs in the McCabe judgment that purport to be quotations from the Foyle memorandum, I considered them to lend support to the claim.

43 In the course of the hearing little, if any, attention was directed to the way in which BATCo put its claim with respect to the Foyle memorandum. It is fair to say that the respondent's contention that the documents were not prepared in circumstances that attracted client legal privilege under s 118 and /or s 119 was not to the fore in the way the matter was argued. Not without hesitation, given the state of the evidence, I concluded the Foyle memorandum was prepared in circumstances such that when it was prepared the person who made it was under an obligation not to disclose its contents and that the dominant purpose of its preparation was the provision of legal advice to BATCo, and associated BAT group companies, and/or the provision of professional legal services to BATCo, and associated BAT group companies, relating to an overseas proceeding to which it, or they, might have become a party.

44 The principal ground upon which the respondent challenged BATCo's claim to client legal privilege related to the circumstance that all of the documents are in the public domain.

45 In his affidavit sworn on 23 April 2003 Mr Highfield deposed to his belief that exhibits "1" to "12" to the letter of request are documents that:

· Have been discovered or filed in the United States proceedings; · Form part of a pre-trial deposition in those proceedings; · Are publicly available; or · Are a matter of public record.

46 In his further affidavit sworn on 2 June 2003 Mr Highfield said that on 30 May 2003 he accessed a web site known as "Tobacco Documents Online" (www.tobaccodocuments.org). He viewed and obtained copies of documents from that site that are identical to exhibits "3", "4", "5", "6" and "7" to the letter of request.

47 The exhibits were filed publicly in the US District Court on 1 July 2002 in support of the United States' motion for the issue of the letter of request. They are available for public inspection and copying at the office of the Clerk of the US District Court. 48 Mr Christopher asserts that the exhibits to the letter of request have only been discovered in the US proceedings to the extent that they are listed in BATCo's privilege log. The privilege log is served on the opponent but the documents listed in it are not produced. Copies of the BATCo privilege log filed in the US proceedings, describing each of exhibits "3" to "7", form part of exhibit "AJC-1" to Mr Christopher's principal affidavit. I accept that the extent of discovery of the documents in the US proceedings has been their inclusion in BATCo's privilege log and that BATCo has not produced the originals or copies of those documents to the United States' Department of Justice in the US proceedings.

49 In so far as exhibits "3" to "7" have formed part of any pre-trial deposition in the US proceedings, BATCo objected to their admission and moved, unsuccessfully, to have them sealed as privileged.

50 Copies of exhibits "3" to "7" are acknowledged by BATCo to be in the hands of the United States' Department of Justice, BATCo maintains its privilege in respect of them.

51 The Evidence Act confers client legal privilege on confidential documents as well as on confidential communications. Part 2 cl 8(b) of the Dictionary to the Evidence Act provides that a reference in the Act to a document includes a reference to any copy, reproduction or duplicate of the document or any part of the document. 52 It was BATCo's submission that the copies of Exhibits "2" to "7" annexed to the affidavit of Mr Highfield sworn on 22 November 2002, being copies of the documents that were annexed to the letter of request, and the documents that are annexed to his affidavit of 2 June 2002, that were downloaded from the Internet, cannot be admitted over its objection unless the respondent can establish that BATCo's client legal privilege has been lost in accordance with the provisions of s 122 of the Evidence Act. (It was not suggested that the other provisions contained in Pt 3.10 of the Evidence Act that deal with the loss of client legal privilege had application in the circumstances of this case.) 53 BATCo acknowledged the contents of the documents to have been knowingly and voluntarily disclosed by it but asserted that this was done under compulsion of law and not otherwise. The respondent submitted that BATCo had expressly or impliedly consented to the contents of the documents being disclosed. In order to resolve the competing submissions in this respect it is necessary to set out the history of proceedings in the Ramsey County District Court, Minnesota (the Minnesota District Court), brought by the Attorney-General of Minnesota and another against a number of tobacco companies (the Minnesota proceedings). The plaintiffs in those proceedings were seeking to recover health care costs incurred in the provision of medical care to persons suffering from smoking-related medical conditions. The history of the Minnesota proceedings is set out in Mr Christopher's principal affidavit.

54 On 17 August 1994 BAT industries plc (BAT Industries), which was then BATCo's ultimate holding company, was named as a defendant in the Minnesota proceedings.

55 The plaintiffs in the Minnesota proceedings requested the production of BAT Industries' documents on 22 May 1995. The smoking and health related documents sought by the plaintiffs for production were for the most part in the possession of BATCo. At the time BATCo had not been joined as a defendant in the proceedings. BATCo consented to BAT Industries producing its files in those proceedings. 56 BATCo and BATUKE were joined as defendants in the Minnesota proceedings in December 1996. BAT Industries, BATCo and BATUKE gave discovery in the Minnesota proceedings by producing documents into a warehouse located in Guildford, in the United Kingdom. This became known as the "Guildford depository". 57 A case management order made on 29 March 1995 in the Minnesota proceedings required each party to produce a privilege log. A privilege log comprising many thousands of BATCo and BAT Industries documents was created. The plaintiffs in the Minnesota proceedings challenged the defendants' privilege claims contending that privilege had been lost under the "crime/fraud exception". They also challenged the defendants' claims to privilege in documents that related to scientific research. 58 On 9 May 1997 the Minnesota District Court found that a prima facie case of crime/fraud had been made out by the plaintiffs and issued an order outlining the procedure for evaluating the defendants' claims for privilege. The defendants unsuccessfully appealed against that order. 59 The Minnesota District Court ordered that the review of the documents that were the subject of the defendants' privilege claim be undertaken by reference to categories of documents as agreed between the parties. A special master was appointed to consider the validity of the claims upon the basis of a sample of documents taken from each category. Not every document the subject of the claim would be examined. The defendants unsuccessfully appealed against that part of the order that related to the determination of their claims of privilege on the basis of the random selection of sample documents by category. 60 On 7 March 1998 Judge Fitzpatrick of the Minnesota District Court ordered that BATCo produce to the plaintiffs documents including exhibits "4" and "5" to the letter of request. BATCo appealed against Judge Fitzpatrick's order. The Minnesota Court of Appeals dismissed the appeal on 17 March 1998. A further appeal was filed in the Minnesota Supreme Court. This appeal was dismissed on 27 March 1998. The defendants then sought to appeal to the United States' Supreme Court. On 6 April 1998 this appeal was dismissed. Thereafter the documents the subject of Judge Fitzpatrick's order, including exhibits "4" and "5", were produced to the plaintiffs in the Minnesota proceedings. 61 On 17 February 1997 the plaintiffs in the Minnesota proceedings served a notice of intention to take depositions from former BAT employees, including two scientists who had been employed by BATCo, Ray Thornton and Alan Heard. There was a question as to whether Mr Thornton and Mr Heard were under the control of BATCo for the purposes of being deposed in the United States. On 5 January 1998 Judge Fitzpatrick held that Mr Thornton and Mr Heard were under the control of the "BAT Group Defendants". His Honour ordered that Mr Thornton and Mr Heard be deposed in St Paul, Minnesota, during the week commencing 12 January 1998. Neither Mr Thornton nor Mr Heard attended to have their depositions taken. Judge Fitzpatrick imposed sanctions on BATCo by reason of its failure to produce Mr Thornton and Mr Heard in accordance with his order. The sanctions included an order that BATCo and BATUKE produce documents referred to in their privilege logs "which either reference Dr Thornton or Mr Heard or those which were authored by, received by or copied to Dr Thornton or Mr Heard". Documents produced in consequence of that order included exhibits "3", "6" and "7" to the letter of request. 62 BAT Industries and BATCo petitioned the Minnesota Court of Appeals for an order restraining the enforcement of Judge Fitzpatrick's sanctions order. This petition was denied on 27 March 1998. Thereafter BAT Industries and BATCo petitioned the Minnesota Supreme Court for a review of the determination of the Court of Appeals. Their petition was denied on 16 April 1998. Following the denial of this petition BATCo produced documents, including exhibits "3", "6" and "7", to the plaintiffs in the Minnesota proceedings in accordance with the Court's order. Exhibit "7" was subsequently tendered in the plaintiff's case in the Minnesota proceedings. 63 On 8 May 1998 the Minnesota proceedings were settled. In his principal affidavit Mr Christopher asserted that although the claims against BAT Industries, BATCo and BATUKE were discontinued they had not been parties to the Minnesota settlement. A copy of the Settlement Agreement and Stipulation for Entry of Consent Judgment (the settlement agreement) forms part of Ex "AJC-1". The settlement agreement appears to have been signed by four of the eleven defendants. The signatories are described in the settlement agreement as "settling defendants".

64 In his principal affidavit Mr Christopher says of BAT Industries and BATCo that they: "… nevertheless have obligations pursuant to the Minnesota consent judgment (a copy of which is at pages 290 - 299 of Exhibit "AJC-1"). These include an obligation to give the public access to the documents produced by BAT Industries and BATCo in the Minnesota proceedings, save to the extent that such documents were privileged, or where they contained highly confidential trade secret material". (paragraph 49) 65 BAT Industries and BATCo provide public access to the documents by allowing members of the public to visit the Guildford Depository and to review the files contained there. None of exhibits "3" to "7" to the letter of request are available for review by the public at the Guildford Depository. 66 BATCo was also required to place documents in the Minnesota Depository. These included all non-privileged documents produced to and selected by the Minnesota plaintiffs from the Guildford Depository together with other non-privileged documents produced from document collections prepared for the purposes of smoking and health related proceedings in the United States. 67 The settlement agreement provided that the settling defendants would each pay certain sums of money into an account designated by the State of Minnesota. The settlement agreement provided for the Court to enter final judgment dismissing with prejudice all claims as to all defendants.

68 Consent judgment was entered in the Minnesota proceedings in conformity with the settlement agreement. Part VII of the consent judgment deals with public access to documents and court files and, inter alia, provides: "A. The Court's previous Protective Orders are hereby dissolved with respect to all documents, including the 4A and 4B indices and the privilege logs, which have been produced to the plaintiffs and for which the Defendants have made no claim of privilege or Category II trade secret protection. Such documents shall be made available to the public at the Depository, in the manner provided as follows: 1. The public shall be given access to all non-privileged documents contained in the Minnesota Depository, including all documents set forth in Paragraph VIIA above. … C. For documents upon which a privilege was claimed and found not to exist, including any briefs, memoranda and other pleadings filed by the parties which include reference to such documents, plaintiffs may seek court approval to make such documents available to the public, provided that any such request be made to the court within 45 days of the entry of this Consent Judgment. E. The Minnesota Depository shall be maintained and operated at Settling Defendants' sole expense, in the manner set forth above for ten years after the date hereof, or such longer period as may be provided in federal legislation for a national document depository. At the end of such period, or sooner, at the States discretion, the document shall be transferred to the State Archives or other appropriate state body, where they shall remain available for historical and research purposes. The parties and the Depository staff shall cooperate with the State Archivist or such other state officials as may be involved in transferring the documents to the custody of the State. F. Settling Defendants shall provide to the State for the Depository a copy of all existing CD-ROMs of documents produced in this action that do not contain any privileged or work-product documents or information, to be placed in the Depository. G. Defendants shall produce to the Depository all documents produced by such Defendants in other United States smoking and health litigation but not previously produced in Minnesota, within 30 days of their production such the other litigation, provided Defendants do not claim privilege with respect to such documents, and provided such documents are not subject to any protective order."

69 Pursuant to the mechanism provided by Part VIIC of the consent judgment the plaintiffs in the Minnesota proceedings sought the approval of the Minnesota District Court to make documents, upon which privilege had been claimed but found not to exist, available to the public. BATCo opposed the application. It appears that Chief Judge Cohen of the Minnesota District Court approved the making of certain documents (including exhibits "3" to "6") available to the public pursuant to cl VIIC of the consent judgment. A copy of his Honour's orders is contained in Exhibit "AJC-3" to the affidavit of Mr Christopher sworn on 4 June 2003. BATCo appealed, unsuccessfully, to the Court of Appeals of Minnesota against Chief Judge Cohen's orders. BATCo then petitioned the Supreme Court of Minnesota for further review of the order. Its petition was denied. 70 Following the dismissal of its petition by the Supreme Court of Minnesota BATCo placed the documents over which it claimed privilege into the Minnesota Depository. In his principal affidavit Mr Christopher said that exhibits "4" and "5" were placed into the Minnesota Depository at this time. He said that BATCo did not appeal against the orders to the extent that they required that exhibit "7" be placed in the Minnesota Depository since it had become a trial exhibit following the earlier determination of the court that compelled BATCo to produce it to the plaintiffs. Exhibit "7" was thus already public in the United States. In his further affidavit, sworn on 4 June 2003, Mr Christopher stated that he had been informed by the attorneys acting for BATCo in the US proceedings that exhibits "3" and "6" to the letter of request were also been placed in the Minnesota Depository as the result of Chief Judge Cohen's order. 71 Mr Christopher states that BATCo has not made any non-confidential disclosure of Exhibits "3" to "7" to the letter of request save in the respects that have been set out.

72 BATCo asserts that it has not lost its client legal privilege in the Foyle memorandum. In McCabe Eames J found that BATAS' legal professional privilege in a number of documents, including the Foyle memorandum, had been waived and he ordered that documents (that included the Foyle memorandum) be produced to the plaintiff. The Court of Appeal held that his Honour erred in finding privilege to have been waived and it set aside the order for production: British American Tobacco Services Ltd v Cowell (as representing the Estate of Rolah Anne McCabe, deceased) [2002] VSCA 197 at [192]: "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 a 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."

73 The documents to which objection is taken are in the possession of the respondent. It is not submitted that they were obtained by accident, trickery or theft. They are in the public domain. At common law original or secondary evidence might be given of privileged communications in circumstances in which the opposing party obtained possession of a document recording the same: Calcraft v Guest [1898] 1 QB 759; Bell v David Jones Ltd (1948) 49 SR (NSW) 223 at 227 and Baker v Campbell (1983) 153 CLR 52 per Gibbs CJ at 67 - 70. 74 In BATCo's submission the terms of s 117 of the Evidence Act direct attention to the circumstances that existed at the time the confidential communication was made or the confidential document was prepared. The fact that a confidential communication or confidential document may subsequently lose the character of confidentiality does not mean that it is no longer a "confidential communication" or "confidential document" for the purposes of Div 1 Pt 3.10 of the Evidence Act. In BATCo's submission confidential communications or the contents of confidential documents made or prepared in circumstances that fall within s 118 or 119 of the Evidence Act may only be adduced over the objection of the privilege holder in accordance with the provisions of Div 1 Pt 3.10. The circumstance that copies of confidential documents over which it asserts client legal privilege are in the public domain was said not to be to the point. 75 In his written submissions Mr Darke put it this way: "The fact that the communications or documents may subsequently lose the character of confidentiality does not mean that the definitions are no longer satisfied and does not of itself have the consequence that the privilege recognised under Division 1 of Part 3.10 can no longer be maintained. A suggestion to the contrary was made by Santow J in Kang v Kwan , 16 August 2001 at paragraph 34. However, it does not appear that the point was the subject of substantial argument or detailed consideration and it is submitted that his Honour's remarks in this regard were made in error."

76 Justice Santow delivered two judgments in Kang v Kwan on 16 August 2001: [2001] NSWSC 697 (the first judgment) and [2001] NSWSC 698 (the second judgment). The reference in Mr Darke's submission is a reference to the second judgment. The first and the second judgments concern a question of privilege that fell to be determined as a matter of urgency and they are to be read together. Any privilege in the documents was that of the second and third defendants who were no longer taking any active role in the proceedings. No objection was made by the second or third defendants to the contents of their confidential communications or confidential documents being adduced in evidence. 77 In the first judgment Santow J detailed the history of the documents, PX6 and PX7, noting that they had been produced in answer to a subpoena by a solicitor who had been acting for the second and third defendants. The solicitor in a covering letter drew attention in a general way to the circumstance that some of the documents may be privileged. He said that his firm had not been able to obtain instructions with respect to any such claim since their former clients were no longer in the jurisdiction. An order for access in favour of both parties was made by a Senior Deputy Registrar. Both parties inspected the documents. Neither were aware of the contents of the solicitor's letter. The plaintiff included references to the documents in a chronology to which reference had been made during the course of the proceedings. 78 In the first judgment Santow J recorded that the first defendant had drawn the question of privilege in the documents to the Court's attention but that he had disclaimed making any claim of client legal privilege on behalf of the second or third defendants, inviting the Court to reject the documents in the exercise of the discretion conferred by s 135(a) of the Evidence Act (paragraph 6).

79 The passage to which Mr Darke directed my attention was paragraph 34 of the second judgment in which his Honour considered the significance of the loss of confidentiality: "Turning now to the question of the maintenance of confidentiality, I consider that the documents produced by Mr Stenberg and made available to all parties by Court order and which are to be found in PX6, have rendered no longer confidential that relevant communication or document. Thus legal privilege could not be maintained under s 118 (or indeed s 119). … No objection was apparently then made by the Woowins (the second and third defendants) to that production nor has any material been put before the Court as to indicate subsequent objection. In those circumstances they must be taken to have consented (see s 122(1) of the Act), or if they have not, then the matter is resolved by the events and according to the reasoning of my other judgment of to-day." 80 I am persuaded that I should not take Kang v Kwan as authority for the proposition that once confidential communications or confidential documents lose the quality of confidentiality for any reason that client legal privilege may not be asserted in them. I accept Mr Darke's submission that the terms of s 117 are against such a construction. Section 122(2) and (4) contemplates that disclosure of the substance of a confidential communication or confidential document does not of itself abrogate the privilege. In Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 Gleeson CJ Gaudron and Gummow JJ in their joint judgment noted at [4] that the ambit of the common law doctrine of legal professional privilege exceeds that of client legal privilege under the Evidence Act in that the latter is limited to the adducing of evidence. Their Honours went on to refer to the Australian Law Reform Commission's final Report observing (at [5]): "The Australian Law Reform Commission was aware of the problem, and adverted to it in its report. After referring to the limitation in its terms of reference, the Commission said (Australian Law Reform Commission, Evidence , Report No 38 (1987), par 199): "Situations may arise where a party obtains access to documents outside the courtroom which are protected in the courtroom by the proposed privilege. Under the proposal, the privilege will still apply in the courtroom unless the client voluntarily disclose the document. Having wider access on discovery or under a search warrant is usual. Access is not determined by the rules of admissibility such as relevance and hearsay. It is not unreasonable to have wider access in the investigative stage."

81 Mr Sullivan focussed attention on the terms of s 118 and 119 that provide that evidence is not to be adduced if, relevantly, the court finds that to do so would result in disclosure of a confidential communication or the contents of a confidential document. He referred me to definitions of the verb to "disclose" contained in a number of dictionaries. It is sufficient to refer to part of the definition given in the Shorter Oxford English Dictionary, Clarendon Press, Oxford, "to uncover; to remove a cover from and expose to view". In Mr Sullivan's submission admitting the documents into evidence would not expose to view material that was not already in the public domain.

82 I was not persuaded that s 118 and s 119 should be read in this way. As I have already noted Div 1 Pt 3 of the Evidence Act contemplates disclosure of the contents of confidential documents and confidential communications without loss of client legal privilege. Thus, s 122(2) provides that client legal privilege is not lost in a case where the knowing and voluntary disclosure of the substance of the evidence falls within one or more of sub-paragraphs (a) to (d). Thus, knowing and voluntary disclosure of the contents of a confidential document brought about by deception does not result in loss of the privilege.

83 BATCo submitted that the question of whether it has lost its client legal privilege turned upon whether the respondent could establish that the privilege had been lost pursuant to the provisions of s 122 of the Evidence Act. I accepted that to be the case. Section 122 provides: " 122 Loss of client legal privilege: consent and related matters (1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: (a) in the course of making a confidential communication or preparing a confidential document, or (b) as a result of duress or deception, or (c) under compulsion of law, or (d) if the client or party is a body established by, or a person holding an office under, an Australian law - to the Minister, or to the Minister of the Commonwealth, the State of Territory, administering the law, or the part of the law, under which the body is established or the office is held. (3) Subsection (2) does not apply to a disclosure by a person who was, at the time, an employee or agent of a client or party or a lawyer unless the employee or agent was authorised to make the disclosure. (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party, or (b) if the client or party is a body established by, or a person holding an office under, an Australian law - the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held. (5) Subsections (2) and (4) do not apply to: (a) a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or (b) a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to a proceeding or an anticipated or pending proceeding in an Australian court or a foreign court. (6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness's memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence by police officers)." 84 Section 122(1) permits evidence the subject of client legal privilege to be adduced with the consent of the client or party concerned. In Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 168 the majority (Branson and Lehane JJ) held that consent for the purposes of s 122(1) includes consent imputed to a party on the basis of considerations of fairness akin to those that at common law may give rise to an imputed waiver of legal professional privilege: Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475.

85 In Mann v Carnell (1999) 201 CLR 1 Gleeson CJ Gaudron Gummow and Callinan JJ explained at [29]: "What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality; not some overriding principle of fairness operating at large." The Evidence Act 1995 (Cth) did not apply to the determination of the question in Mann . Their honours observed at [23] that the provisions of s 122 as to the circumstances in which privilege may be lost are not identical to the corresponding common law principles. 86 The view of the majority in Telstra Corporation as to the scope of s 122 (1) has been followed in this Court: Garratt's Ltd v Thanga Thangathurai [2002] NSWSC 39 per Bergin J at [51] (see, too, Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 per Hely J at [10]). I approached the matter upon the basis that "consent" for the purposes of s 122(1) of the Evidence Act includes consent that is imputed to the client or party in circumstances that are analogous to those that may give rise to the imputed waiver of legal professional privilege at common law.

87 BATCo is a defendant in the US proceedings. The exhibits to the letter of request were filed publicly in the US District Court in support of the United States' Department of Justice' motion for the issue of the letter of request. BATCo opposed the issue of the letter of request. However, it took no action before the US District Court on the hearing of the motion to have the exhibits to the letter of request marked as confidential by the Court.

88 In his affidavit, sworn on 2 June 2003, Mr Highfield deposed to his instructions that a procedure was available to BATCo to make an application to have the exhibits marked as confidential in the US proceedings pursuant to Order # 7 made on 7 March 2000 titled "Protective Order Governing Confidential Information" and Order #36 made on 15 November 2000 and titled "Addendum to Protective Order for Highly Sensitive Information". Order #7 is annexed to the affidavit of Loren Kieve sworn on 27 March 2003. Mr Highfield referred to clauses 7, 12, 14 and 18 of Order # 7 in support of his belief in this respect. 89 The respondent also relied upon BATCo's failure to exhaust its rights of appeal with respect to the public filing of exhibits "4" and "7" to the letter of request as exhibits to the deposition transcript of David Schechter taken on 18 June and 13 and 14 August 2002. BATCo filed a motion in the US District Court seeking to have certain of the exhibits to the Schechter deposition, including exhibits "4" and "7" to the letter of request, sealed as confidential. On 19 November 2002 Judge Kessler denied BATCo's request. BATCo did not appeal against her Honour's order. 90 BATCo submitted that there would have been no utility, assuming that it was open to it to do so, in it seeking to have documents that were available for public inspection at the Minnesota Depository designated as confidential pursuant to Order #7 and Order #36 in the US proceedings. The purpose of designating a document as confidential is to keep it out of the public domain. BATCo pointed to paragraphs 19 and 23 of Order #7 noting that the Order does not prevent the use of the documents designated as confidential at trial and that it does not determine claims of attorney-client privilege. 91 In BATCo's submission the circumstance that it did not appeal the Order made by Judge Kessler refusing its motion to have exhibits "4" and "7" to the Schechter deposition sealed does not give rise to a loss of its client legal privilege under s 122 of the Evidence Act. 92 It was not clear whether the respondent's submissions concerning the significance of BATCo's failure to designate the documents as confidential, or to exhaust its rights of appeal with respect to the public filing of exhibits "4" and "7" to the Schechter deposition, were directed to imputed consent for the purposes of s 122(1) or implied consent for the purposes of s 122(4) of the Evidence Act.

93 I did not consider that BATCo should have consent to the tender of the documents imputed to it by reason of the fact that it had not sought to have the exhibits designated as confidential under Order #7 or Order #36 in the US proceedings. Both parties referred me to clauses in Order #7 in support of competing submissions concerning the effect of the order. Such inferences as I draw from the terms of Order #7 support the contention advanced by BATCo that the purpose of designating a document as confidential pursuant to the Order is to prevent it becoming public. Documents designated as confidential produced in the litigation are disclosed to those persons identified in cl 8 (a) to (e). These persons include the Court and counsel in the litigation (save to the extent that in house counsel for a defendant may have access to confidential information produced by the plaintiff but not produced by another defendant). As noted above, cl 23 makes it clear that the Order is not intended to cover the determination of attorney-client privilege. The circumstance that BATCo did not seek to have documents that were in the public domain in the United States designated as confidential under Protective Order #7 or supplementary Order #36 did not seem to me to be inconsistent with the stance that it takes in proceedings brought in this State to which the Evidence Act applies. 94 I did not consider that BATCo's failure to exhaust its rights of appeal with respect to exhibits "4" and "7" that were filed publicly to the Schechter affidavit was to be taken as consent to their tender for the purposes of s 122(1).

95 I come now to a consideration of whether privilege has been lost under s 122(2) or (4). In Telstra v Australis Media Holdings (No. 2) (1997) 41 NSWLR 346 McLelland CJ in Eq sought to reconcile ss (2) and ss (4) by construing the former as applying in the case of disclosure by the client or party and the latter as applying in circumstances where the disclosure is made by a person other than the client or party (at 351). His Honour's reasoning was adopted by the Full Federal Court in Carnell v Mann (1998) 89 FCR 247 at 260B - 261D. The High Court found that the Full Federal Court erred in finding that the Evidence Act applied derivatively to the matter. It was not necessary to address the question of the construction of s 122 in Mann.

96 In Sovereign Motor Inns Pty Limited v Bevillesta [2000] NSWSC 521 Austin J, in an ex tempore judgment, expressed reservations about the reasoning in Telstra v Australis Media as to the reconciliation of ss (2) and (4). His Honour observed that he had not had the benefit of argument on the point and dealt with the question of whether there had been a loss of client legal privilege by considering the matter by reference to both s 122(2) and (4).

97 BATCo submitted that I should adopt the analysis of s 122(2) and (4) in the judgment of McClelland CJ in Eq in Telstra v Australis Media. I was invited to find that there was no evidence of disclosure of the substance of the evidence by a person other than BATCo. It was submitted that I should address the question of whether client legal privilege had been lost by reference to s 122(2). BATCo accepted that I would find that the substance of the evidence had been knowingly and voluntarily disclosed by it. In BATCo's submission its disclosure of the substance of the evidence that is sought to be adduced was made under compulsion of law.

98 BATCo pointed to the production of exhibits "3" to "7" to the plaintiffs in the Minnesota proceedings as taking place only as the result of orders made by the Minnesota District Court and then only after it had exercised its rights of appeal. It was BATCo's submission that the subsequent placement of the documents into the Minnesota Depository, where they are available for inspection by members of the public, was under compulsion of the orders made by Chief Judge Cohen. 99 It was uncontroversial that copies of the documents that are exhibits "3" to "7" to the letter of request are published on the Internet. The evidence does not establish who published them. BATCo did not. In the course of argument Mr Darke accepted that having regard to the publication on the Internet, accepting the correctness of the reasoning in Telstra v Australis Media, it remained to consider whether privilege has been lost under s 122(4). 100 In Mr Sullivan's submission the substance of the evidence has been disclosed with the implied consent of BATCo. He relied on the terms of the consent judgment entered in the Minnesota proceedings. For its part BATCo emphasised that it was not a signatory to the settlement agreement and that exhibits "3" to "7" had only become available for inspection by the public as the result of Chief Judge Cohen's orders.

101 The proceedings were settled as against all the defendants including BATCo by the entry of the consent judgment. While BATCo was not a "settling defendant" it seems to me that it must be taken to have consented to the proceeding against it being resolved by the entry of the consent judgment. The consent judgment made provision for the Minnesota Depository to be open to the public for a period of years and for the public to be given access to all non-privileged documents contained in it including those documents described in Part VII A. Significantly, the consent judgment contemplated that documents over which one or more of the defendants had claimed privilege, but which claim had not been upheld, might become available for inspection by the public should the plaintiffs make application within the period specified and the Minnesota District Court give its approval. Exhibits "3" to "7" to the letter of request were documents within this latter category.

102 BATCo resisted the grant of approval to the public release of documents over which it had unsuccessfully claimed privilege in the Minnesota proceedings and it exhausted its rights of appeal in this respect. Nonetheless I considered that there was force to Mr Sullivan's submission that having consented to the entry of judgment BATCo must be taken to have consented to a regime that made provision for documents over which it had unsuccessfully claimed privilege to become available for public inspection in the event that the Minnesota District Court granted its approval pursuant to cl VIIC of the consent judgment. 103 I am of the opinion that the respondent is not prevented from adducing evidence of the contents of exhibits "3" to "7" to the letter of request by reason that the substance of the evidence has been disclosed to members of the public at the Minnesota Depository and by publication on the Internet with the implied consent of BATCo within the meaning of s 122(4) of the Evidence Act. 104 I turn now to BATCo's claim with respect to those paragraphs in the judgment in McCabe that disclose the contents of the Foyle memorandum. Mr Sullivan submitted that there could be no claim of client legal privilege in respect of the material published in a judgment. In this respect he referred me to the judgment in British American Tobacco Services Limited v Cowell (as representing the estate of Rolah Ann McCabe, deceased) [2003] VSCA 43 at [38]: "…Strangers to litigation are entitled to make what use they can of what they hear in open Court (whether or not of documents) or read in the transcript (if they have a transcript) or see in the reasons for judgment once published (which happens not uncommonly on the internet these days). As already mentioned, we do not as yet subscribe to the opinion expressed by Scott J that the parties may not make use of what appears in the judgment; we should have thought that once a document is copied or quoted in the reasons for judgment, its contents to that extent are public knowledge and use can accordingly be made, by party and non-party alike, of what appears in the judgment…" 105 The passage upon which the respondent relies is a statement of the common law dealing with the use that a stranger may make of material that appears in reasons for judgment. BATCo's objection is to the tender of a judgment in evidence in proceedings to which the Evidence Act applies to the extent that it discloses the contents of a document over which it claims client legal privilege. 106 The judgment of Eames J in McCabe is a judgment of the Supreme Court of Victoria. It does not require to be proved in evidence. However this is what the respondent seeks to do and to which BATCo objects. Mr Darke acknowledged that BATCo's objection, that is limited to adducing evidence of the contents a confidential document the subject of its client legal privilege referred to in the judgment, does not extend to the copy of the judgment that is annexed as exhibit 2 to the original of the letter of request (it not having been the subject of tender). 107 For the reasons earlier given I accept that the Foyle memorandum is the subject of BATCo's client legal privilege. In proceedings to which the Evidence Act applies privilege may only be lost in accordance with the provisions of Part 3.10. There was no suggestion that BATCo had lost client legal privilege in the contents of the Foyle memorandum by a knowing and voluntary disclosure of it not made under compulsion or law or that the substance of the Foyle memorandum had been disclosed to a third person with its express or implied consent. I accepted BATCo's submission that there had been no loss of privilege pursuant to the scheme of Div 1 Pt 3.10 of the Evidence Act. For these reasons I reject the tender of those paragraphs in the copy of the judgment in McCabe, in Ex "H", that contain quotations from the Foyle memorandum or that otherwise disclose the contents of the Foyle memorandum, being paragraphs 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 36, 40, 97, 98, 99, 100, 178 and 179.

108 The Orders that the respondent seeks to have set aside are as follows: "1. That Nicholas Basil Cannar … attend the offices of the National Dispute Centre, Level 1 Selborne Chambers, 174 Philip Street, Sydney 2000 at 10:00 am on Wednesday, 12 March 2003, continuing thereafter at such place and time as the Examiner may direct from day to day until complete, to be examined in relation to the topics of testimony listed on pages 12 to 16 of the Letter of Request for International Judicial Assistance issued by the United States District Court for the District of Columbia to the Registrar of the Supreme Court of New South Wales. 2. That Mr Morton Rolfe QC of 233 Macquarie Street, be appointed examiner to administer the taking of an oath or affirmation and the conduct of the examination. 3. That the examination of Mr Cannar be videotaped and transcribed, and that such videotapes and transcripts be signed and certified as correct and authenticated by the examiner and forwarded to the Sydney Registry of this Honourable Court by no later than 12 April 2003. 4. That a certified copy of the transcript and videotapes be made available to Mr Anthony Highfield of Ebsworth & Ebsworth by no later than 12 April 2003. 5. An order that the plaintiff meet the cost of travelling or loss of time reasonably incurred by Mr Cannar in complying with these orders upon the provision of evidence by Mr Cannar as to such cost, pursuant to section 33(7) of the Evidence on Commission Act 1995. 6. Leave to the plaintiff to participate in the examination by United States Department of Justice Counsel and legal practitioners of the Supreme Court of New South Wales. 7. Leave to the plaintiff to issue a subpoena to give evidence addressed to Mr Cannar compelling his attendance at the examination. 8. A copy of this order, the amended summons and the affidavits of Anthony John Highfield sworn 22 November 2002 and 6 December 2002 be served on Mr Cannar on or before 4:00 pm on 23 December 2002." 109 After the applicant filed his motion, by consent the Orders were varied by Buddin J who vacated the date appointed for the examination and substituted that of 4 June 2003. Consequential amendments to the remaining Orders were made to reflect that change. On 9 May 2003 I further varied the Orders, vacating the date fixed for the examination and substituting therefor that the examination was to take place on a "date to be determined by the Court". Further consequential amendments were made to the remaining orders.

110 Section 32 of the Evidence on Commission Act 1995 (the Act) provides applications may be made to this Court for an order that evidence be taken for the purposes of proceedings in a jurisdiction outside the State. Section 33 confers the power to make orders with respect to such an application. Those sections are, relevantly, in these terms: " 32. Application to the Supreme Court for assistance in obtaining evidence for proceedings in other court (1) The following provisions of this Part apply if an application is made to the Supreme Court for an order for evidence to be obtained in the State and the Court is satisfied: (a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal exercising jurisdiction in a place outside the State, and (b) that the evidence to which the application relates is to be obtained for the purposes of proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated. 33. Power of the Supreme Court to give effect to application for assistance (1) The Supreme Court has power, if an application is made under section 32, by order to make such provision for obtaining evidence in the State as may appear to the Court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made. (2) An order under this section may require a specified person to take such steps as the Court may consider appropriate for that purpose. (3) Without limiting the generality of subsections (1) and (2), an order under this section may, in particular, make provision as follows: (a) for the examination of witnesses, either orally or in writing, (b) for the production of documents, (c) for the inspection, photographing, preservation, custody or detention of any property, (d) for the taking of samples of any property and the carrying out of any experiments on or with any property, (e) for the medical examination of any person, (f) without limiting paragraph (e), for the taking and testing of samples of blood from any person. (4) An order under this section is not to require any particular steps to be taken unless they are steps that can be required to be taken by way of obtaining evidence for the purposes of proceedings in the Supreme Court (whether or not proceedings of the same description as those to which the application for the order relates).

(5) Subsection (4) does not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath if this is asked for by the requesting court. (6) An order under this section must not require a person: (a) to state what documents relevant to the proceedings to which the application for the order relates are or have been in the person's possession, custody or power, or (b) to produce any documents other than particular documents specified in the order and appearing to the court making the order to be, or likely to be, in the person's possession, custody or power. (7) A person who, because of an order under this section, is required to attend at any place is entitled to similar conduct money and payment for expenses and loss of time on attendance as is a witness in proceedings before the Supreme Court." The Applicant's Grounds of Challenge - Power

111 The applicant challenged the Orders as having been made without jurisdiction. Mr Gageler SC, who appeared with Mr Speakman and Ms Richardson on the applicant's behalf, contended that I would not be satisfied that the letter of request is a request for an order for evidence to be obtained for the purposes of proceedings within the meaning of s 32(1)(b) of the Act. In his submission the reference to the evidence in s 32(1)(b) must be read as a reference to evidence that is both admissible and to be admitted at trial.

112 In the alternative, it was Mr Gageler's submission that if the letter of request is a proper request within the terms of s 32(1)(b), the Orders do not conform to the requirements of s 33, which relevantly mandates that: (i) the order be limited to one for "obtaining evidence" (this, in turn, was said to require that the order be for obtaining evidence both admissible and to be admitted in the United States proceedings), (ii) the order does not require any particular steps to be taken unless they are steps that can be required to be taken by way of obtaining evidence for the purpose of proceedings in this Court, and

(iii) that it give effect to the request that has been made.

113 Important to the way in which Mr Gageler put his first ground of challenge (the Court could not be satisfied that the request is within the terms of s 32(1)(b)) but also significant to the alternative ground of challenge (the inability to frame an order that complies with the requirements of s 33) is the contention that the letter of request seeks pre-trial discovery; a procedure common in civil litigation in the United States but for which there is no equivalent in this jurisdiction. This contention depended in part upon a consideration of the Federal Rules of Civil Procedure (Fed R Civ P) and the Rules of the United States District Court for the District of Columbia. I had the benefit of expert, albeit conflicting, evidence on this question. Significant also to the applicant's contention that the letter of request seeks pre-trial discovery were the terms of Special Master Levie's report and recommendation concerning the United States' motion for the issue of the letter of request and Judge Kessler's adoption of it. The terms of the letter of request 114 The letter of request is signed by Judge Gladys Kessler of the US District Court. It is dated 3 October 2002. In the opening recital Judge Kessler states that the US proceedings are properly within the jurisdiction of, and are now pending before, the US District Court. She continues:

"WHEREAS, the claims asserted in this action arise out of violations of United States racketeering laws under 18 U.S.C.s 1962(c) and 18 U.S.C.s 1962(d). Section 1962(c) prohibits 'any person employed by or associated with any enterprise' engaged in or affecting interstate or foreign commerce from 'conduct[ing] or particpate[ing], directly or indirectly, in the conduct of such enterprises affairs through a pattern of racketeering activity or collection of unlawful debt'. Section 1962(d) prohibits a conspiracy to violate any of the provisions of 18 U.S.C. s 1962. Racketeering activity is 'defined as behaviour that violates certain other laws, either enumerated Federal statutes or State law addressing specified topics and bearing specified penalties'. Rotella v. Wood , 528 U.S. 549, 552, 120 S.Ct 1075, 1079 (2000) (citing 18 U.S.C. s 1961(1)). Civil racketeering activity may include, but is not limited to, a conspiracy to commit fraud or other intentional tortious conduct, and a civil racketeering action may be brought by an individual, corporation, or government entity. Paragraph 174 of the Amended Complaint in this action alleges that not later than 1953, Defendants formed an enterprise and entered into a conspiracy, which was reaffirmed by subsequent explicit and implicit agreements, to deceive consumers into starting and continuing to smoke, without regard to the truth, the law, or the health consequences to the American people by: (1) fraudulently maintaining that there was an open question as to whether smoking causes disease, despite the fact that that defendant knew otherwise; (2) concealing and suppressing relevant research on the health consequences of smoking and funding biased or irrelevant research on the health consequences of smoking, while publicly claiming to do everything in their power, including fund independent research, in order to determine if smoking causes cancer or other diseases; (3) deceiving consumers into becoming or staying addicted to cigarettes by claiming that nicotine is not addictive, despite the fact that defendants knew that nicotine is addictive; (4) manipulating the design of cigarettes and the delivery of nicotine to smokers to maintain and enhance the addictiveness of cigarettes, while at the same time denying that they were engaged in such manipulation; (5) marketing and advertising 'light' and 'ultra-light' cigarettes as conferring health benefits over other cigarettes, despite their knowledge that no such health benefits existed; and (6) marketing and advertising with the intent of addicting children into becoming lifetime smokers, while claiming that they did not market to children. WHEREAS, it appears that it is necessary for the purpose of justice and for the due determination of the matters in question between the parties that Nicholas Cannar, within your jurisdiction should be called upon to provide certain evidence relating to those matters. … In support of its Motion to this Court for the issuance of a letter of request, the Plaintiff has offered the following information, set forth in the numbered paragraphs below, all of which are allegations of the Plaintiff and are not the findings of this Court: 1. Mr Cannar is the former long-time Senior Solicitor and head of the legal department for BATCo in the United Kingdom. The United States alleges that Mr Cannar's responsibilities included devising and implementing document management policies for BATCo in the UK, and also for the implementation of BATCo's worldwide document management, retention and destruction policies. This included setting requirements of document retention and destruction for BATCo operating companies throughout the world. Employees of the various operating companies were required to follow these policies - including, among other things, to destroy documents in accordance with certain schedules. One such BATCo operating company was WD & HO Wills ["Wills"], at one time a wholly-owned BATCo subsidiary in Australia, later known as BAT Australia Services Ltd ["BATAS"]. Mr Cannar also had a responsibility for managing the flow of documents between BATCo and its United States affiliate, Brown & Williamson, and also the exchange of documents and information among BATCo's various operating companies (including Wills), and Brown & Williamson. 2. Later, in the mid-1990's, Mr Cannar moved from BATCo in the UK to work full-time at Wills in Australia. He held several roles with Wills, and was, among other things, an attorney with responsibility for document management, retention and destruction at Wills. 3. Plaintiff, the United States, alleges that in those capacities Mr Cannar participated in the development and implementation of a document management policy, that resulted in the destruction of relevant documents, for the purpose of preventing the discovery of certain sensitive documents in litigation in the United States and otherwise. In McCabe v. British American Tobacco Australia Services Ltd . [2002] VSC 73 (Supr. Ct of Victoria at Melbourne (Australia) Mar. 22, 2002) (copy attached as exhibit 2), the Supreme Court of Victoria struck BATAS' defences on the basis that it destroyed potentially relevant documents when faced with impending litigation. In its decision, the McCabe Court concluded that: The role of Cannar is of considerable importance, and his absence from the witness box is glaring. He was involved in the development of the Document Retention Policy from at least 1990, when as Senior Solicitor for BATCo he visited Australia for talks with Gulson and Australian solicitors from Clayton Utz and Allen, Allen and Hemsley. His name emerges constantly. He was present when Wilson advised in conference on 2 April 1990, 'As to the rest, get rid of them'. McCabe , ¶165. 4. The United States alleges that, among other things, Mr Cannar participated in policies and practices that resulted in the destruction of relevant documents in the UK and elsewhere, including Australia. Furthermore, documents determined to have been destroyed by an Australian court are relevant to the United States' claims in its Amended Complaint in this action, and the document destruction policies and practices identified by the Australian court involved actions of BATCo employees and agents. 5. The United States has reason to believe that Mr Cannar not only directed the destruction of responsive documents located within the UK, but also the destruction of responsive documents in Australia and elsewhere." 115 There follow further particulars of the United States' allegations concerning the role of the applicant in connection with the document management policy of BATCo and associated entities.

116 The letter of request recites that the US District Court is authorised by Rule 28(b) of the Federal Rules of Civil Procedure and 28 U.S.C. ss 1781 and 1782 to issue the request to the appropriate judicial authority in Australia requesting assistance in the matter. Judge Kessler continues: "NOW THEREFORE, I, Gladys Kessler, United States District Court Judge, pursuant to Rule 28(b) of the Federal Civil Judicial Procedure Rules hereby request that, in furtherance of justice and by the proper and usual process of your court, you summon Nicholas Cannar to appear before you or some competent person appointed by you, at a time and place by you to be fixed, for the purpose of the giving of his evidence in the proceedings recited herein relating to the following matters;"

The topics of testimony upon which it is sought to have the applicant examined are set out in fifty-three subheadings under the following five headings: (1) the creation of the document management policy, (2) the implementation of the document management policy,

(3) rules and procedures set forth by the document management policy,

(4) destruction of smoking and health documents that pertain to BATCo and Brown & Williamson's litigation position in the United States, and

(5) the transportation, routing, storage and warehousing of documents.

The letter of request concludes in these terms: "And that you will cause his testimony to be committed to writing and be videotaped, and that the transcript and videotape and any exhibits thereto be sent to: Sharon Y Eubanks, Civil Division, Torts Branch, United States Department of Justice, 1331 Pennsylvania Avenue, Suite 1150, Washington, D.C. 20004, USA; and that you will permit the United States to participate by United States Department of Justice counsel and by local Australian counsel. This Court also requests that - should you deem it appropriate - the United States be allowed to propound written interrogatories to Mr Cannar concerning the topics given above, to be answered under oath. This Court expresses its appreciation to you for your courtesy and assistance in this matter and states that, pursuant to authority of 28 U.S.C. s 1782, it stands ready and willing to do the same for you in a similar matter when required."

The Pleadings in the US Proceedings 117 Exhibit 1 to the letter of request is the first amended complaint for damages and injunctive declaratory relief in the US proceedings (the complaint). The complaint is dated 28 February 2001. It is a pleading of 114 pages. The proceedings are an action to recover health care costs paid for and furnished, and to be paid for and furnished, by the federal government for lung cancer, heart disease, emphysema and other tobacco-related illnesses that are alleged to have been caused by the fraudulent and tortious conduct of the defendants. They are brought pursuant to the Medical Care Recovery Act, 42 U.S.C. ss 2651, et seq (Count One), and the Medicare Secondary Payer provisions of Subchapter 18 of the Social Security Act, 42 U.S.C. s 1395 y(b)(2)(B)(ii) & (iii) (Count Two), and the civil provisions of Chapter 96 of Title 18, United States Code, codified at 18 U.S.C. ss 1961 through 1968, entitled Racketeer Influenced and Corrupt Organisations ("RICO"), that authorise the United States to seek a judicial order preventing and restraining certain unlawful conduct (Counts Three and Four).

118 The United States' pleads in paragraph 5 of the complaint: "In order to avoid discovery of their fraudulent conduct and the possibility that they might be called to account for their conduct, defendants engaged in a widespread scheme to frustrate public scrutiny by making false and deceptive statements and by concealing documents and research that they knew would have exposed their public campaign of deceit. This scheme included making false and deceptive statements to the public and in congressional, judicial, and federal agency proceedings." 119 Among the facts pleaded by the United States the following are set out at paragraph [33] of the complaint and following: "[33] The decisions made by these chief executives at the Plaza Hotel meeting have shaped the actions of the Cigarette Companies, including companies not in attendance at the meeting, to this day. The chief executives at the Plaza Hotel agreed that the strategy they were implementing was a 'long-term one' that required defendants to act in concert with each other on the current health controversy, as well as on issues that would face them in the future. This enterprise and conspiracy still continues today. [34] The fundamental goal of the Enterprise and conspiracy was to preserve and expand the market for cigarettes and to maximise the Cigarette Companies' profits. To achieve this goal, defendants' strategy was to respond to scientific evidence of the adverse health consequences of cigarette smoking with fraud and deception. Rather than provide full disclosure to the public and in congressional, federal agency and judicial proceedings about what they knew or learned about the dangers of cigarette smoking, defendants and their agents determined, in furtherance of this Enterprise and conspiracy, to deny that smoking caused disease and to maintain that whether smoking caused disease was an 'open question', despite having actual knowledge that smoking did cause disease. [35] Defendants sought to ensure that no company - in the United States or overseas - broke ranks from defendants' public posture, which was based on falsehood and deception. If any Company admitted that smoking was hazardous, that nicotine was addictive, that the delivery of nicotine was manipulated by the Cigarette Companies, the defendants' research commitment was a sham, or that the Cigarette Companies marketed to children, the conspiracy would be endangered. To further and protect the Enterprise and conspiracy and their profits, defendants: · made false and misleading statements to the public through press releases, advertising, and public statements, such as before Congress, that were intended to be heard by the consuming public. · adhered to their common scheme of deception and falsehood in lawsuits, including, among other things, destroying and concealing documents. [36] Throughout the course of the Enterprise and conspiracy and to the present day, defendants have engaged in these acts knowingly and intentionally and with a common purpose. Their own documents - secreted in internal files and revealed only in recent years despite defendants' involvement in continuous litigation about their products for more than forty-five years - demonstrate that defendants: · … · … · Suppressed research, destroyed documents and took steps to prevent discovery of such documents; · … · … [45] Contrary to their repeated promises, the Cigarette Companies had a 'gentleman's agreement' - so called by defendants themselves - not to perform or commission internal research designed to investigate the relationship between smoking and health. They did not routinely employ or support scientists to conduct such research; and, in the rare instances that the companies did conduct such research internally, they did so in secret and suppressed the results, in some cases by destroying documents and in other cases by taking steps to shield documents and materials from discovery. [52] Brown & Williamson also endeavoured in litigation brought by smokers to prevent the disclosure of research documents created by its affiliate, BATCo, which contained information contrary to Brown & Williamson's public positions that smoking did not cause disease and that cigarettes were not addictive. To further this effort, a Brown & Williamson research scientist received scientific reports and designated documents harmful to Brown & Williamson as protected by the attorney work product privilege.

The Timetable for the US Proceedings 120 On 1 October 2002, two days prior to the issue of the letter of request, Judge Kessler issued order # 230 in the proceedings, the Tenth Case Management Order (Annexure "C" to the affidavit of Loren Kieve sworn 27 March 2003). A revised timetable for the conduct of the US proceedings was specified in the order. The trial date for the proceedings was vacated and a new date of 15 September 2004 was fixed. A new timetable for pre-trial proceedings was fixed as follows: "January 15, 2003 - Preliminary Proposed Findings of Fact and Conclusions of Law; April 1, 2003 - Completion of Fact Discovery Except for FTC and EOP; August 1, 2003 - Completion of All Fact Discovery; September 1, 2003 - Completion of Expert Witness Discovery; … June 15, 2004 - Final Proposed Findings of Fact and Conclusions of Law; July 15 2004 - Final Pretrial Conference."

121 Loren Kieve, a partner in the firm, Quinn Emanuel Urquhart Oliver & Hedges, a law practice based in San Francisco, gave evidence in the applicant's case. The respondent qualified John Fellas, a partner in the Hughes Hubbard & Reed, a law practice based in New York. 122 In his report dated 27 March 2003 (the first report) Mr Kieve explained: "3. Discovery" in a federal district Court is governed by the Federal Rules of Civil Procedure ( Fed R Civ P ) and in particular Rules 26 through 37. Fed R Civ P 26(b)(1) provides in pertinent part that: (b) Discovery, Scope and Limits . Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows: (1) In General . Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defence of any party, including the existence, description, nature, custody, condition, and location of any books, documents or other tangible things and the identity and location of persons having knowledge of any discoverable matter. For good cause shown, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence . All discovery is subject to the limitations imposed by Rule 26(b)(2)(i), (ii), and (iii). (Emphasis added.)

123 Mr Kieve said that in a typical federal court civil action, including proceedings in the US District Court, there is a discovery "cut-off" date. As the date of trial approaches, the Court requires the parties to submit "pretrial statements". These documents contain a statement of the claims and defences, the witnesses whom it is proposed to call at trial, the exhibits to be tendered at trial and a statement of disputed issues of law. The parties' respective pretrial statements are amalgamated into a "Final Pretrial Order" which is entered by the Court. Fed R Civ P 16(e) dealing with the final pretrial order provides that: "[T]his order shall control the subsequent cause of the action unless modified by a subsequent order. The order following a final pretrial conference shall be modified only to prevent manifest injustice".

124 The Local Rules governing the conduct of proceedings in the US District Court, follow Fed R Civ P 16, and require the parties to submit pretrial statements, which are then incorporated into a Final Pretrial Order that "shall govern the trial of the case". Local Rule 16.5(a)(3) provides that: "[O]bjections to the Pretrial Order shall be promptly made, and shall be determined by the court before trial. Thereafter, no departures from the final Pretrial Order shall be permitted except to prevent manifest injustice."

125 Mr Kieve explained in paragraph 16 of his first report that the final Pretrial Order, as entered, determines the issues in the case. The testimony and exhibits listed in the Pretrial Order are intended to be evidence in the trial and it is expected that they will be admissible and relevant within the meaning of the Federal Rules of Evidence 401 and 402. A trial court uses the Pretrial Order as the touchstone for the making of pre-trial evidentiary rulings. 126 Taking into account the timetable fixed by Judge Kessler in the Tenth Case Management Order, Mr Kieve expects that the final Pretrial Order in the US proceedings will be entered on 15 July 2004.

127 The letter of request is expressed to be authorised by Fed R Civ P r 28(b). That rule provides: "Rule 28. Persons before whom depositions may be taken … (b) In foreign countries. Depositions may be taken in a foreign country (1) pursuant to any applicable treaty or convention, or (2) pursuant to a letter of request (whether or not captioned a letter rogatory), or (3) on notice before a person authorized to administer oaths in the place where the examination is held, either by the law thereof or by the law of the United States, or (4) before a person commissioned by the court, and a person so commissioned shall have the power by virtue of the commission to administer any necessary oath and take testimony. A commission or a letter of request shall be issued on application and notice and on terms that are just and appropriate. It is not requisite to the issuance of a commission or a letter of request that the taking of the deposition in any other manner is impracticable or inconvenient; and both a commission and a letter of request may be issued in proper cases. A notice or commission may designate the person before whom the deposition is to be taken either by name or descriptive title. A letter of request may be addressed 'To the Appropriate Authority in [here name the country]'. When a letter of request or other device is used pursuant to any applicable treaty or convention, it shall be captioned in the form prescribed by that treaty or convention. Evidence obtained in response to a letter of request need not be excluded merely because it is not a verbatim transcript, because the testimony was not taken under oath, or because or any similar departure from the requirements for depositions taken within the United States under these rules."

128 Mr Kieve observed, in the context of a discussion of Fed R Civ P r 28 in paragraph 23 of his first report that, "Both subparts (a) and (b) of Rule 28 are found among the rules governing discovery in general and contain no limitation on the scope of inquiry in a deposition". In Mr Kieve's opinion depositions taken under r 28(b) are not confined to evidence that is admissible at trial. It is open to examine the witness on topics that may elicit information reasonably calculated to lead to the discovery of admissible evidence.

129 Mr Fellas rejected any suggestion that because the letter of request is authorised by Fed R Civ P r 28(b) it is to be considered as a discovery deposition governed by the broad scope of Fed R Civ P 26(b)(1). In his report of 22 April 2003 (the first report) Mr Fellas says that Fed R Civ P 26(b)(1), "sets forth the permissible scope of inquiry with respect to a deposition taken in the United States" (paragraph 19). Mr Fellas considered that Mr Kieve's assumption overlooked the text and the legislative history of Fed R Civ P 28(b) together with the implications of the fact that the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Evidence Convention) is in force between Australia and the United States. At paragraph 26 of the first report Mr Fellas noted that the words "pursuant to any applicable treaty or convention" had been inserted into r 28(b) by amendment in 1993. He set out the explanation given for the introduction of the amendment by the Federal Rules Advisory Committee (at paragraph 27 of his report dated 22 April 2003): "This revision is intended to make effective use of the Hague Convention on the taking of evidence abroad in civil or commercial matters, and of any similar treaties that the United States may enter into in the future which provide procedures for taking depositions abroad. The party taking the deposition is ordinarily obliged to conform to an applicable treaty or convention if an effective deposition can be taken by such internationally approved means, even though a verbatim transcript is not available or testimony cannot be taken under oath."

130 Mr Fellas observed that Article 9 of the Hague Evidence Convention provides that the country executing a letter of request shall apply its own laws to the taking of evidence in that country. In his opinion it is important to note that Fed R Civ P r 28(b) contemplates that the procedures under which a deposition is taken will depart from the Federal Rules of Civil Procedure. Thus, Fed R Civ P r 28(b) provides: 'Evidence obtained in response to a letter of request need not be excluded merely because it is not a verbatim transcript, because the testimony was not taken under oath, or because of any similar departure from the requirements for depositions taken within the United States under these rules. '" (Emphasis added).

131 Mr Fellas explained, in paragraph 38 of his first report, that under the Federal Rules of Civil Procedure when a party seeks to take the deposition of a person in the United States, the party is required to issue a notice of deposition (in the case of a party) and a notice of deposition and subpoena (in the case of a non-party). It is not necessary to identify in the notice (or in the subpoena) the questions that will be put to the witness or the subjects on which it is proposed that the witness be examined in the notice of deposition (or subpoena) addressed to a person in the United States. Article 3 of the Hague Evidence Convention requires that a letter of request contain information including the questions to be put to the person to be examined or a statement of the subject-matter about which the person is to be examined. In Mr Fellas' opinion a deposition taken outside the United States pursuant to a letter of request issued by a United States Court in proceedings to which the Federal Rules of Civil Procedure is to be contrasted with a notice of deposition to a person under the Federal Rules of Civil Procedure which leaves the party taking the deposition free to ask questions on any subjects within the scope of Fed R Civ P 26(b)(1).

132 In the course of his cross-examination Mr Kieve said that there was a presumption that the United States "norms of scope of a discovery" would apply to a deposition taken in a foreign country (T 235.37). Mr Gageler placed some emphasis on this answer, submitting that there was nothing to displace the presumption in this case. He drew attention to Mr Fellas' concession in cross-examination that, as a matter of power, a deposition pursuant to Fed R Civ P r 28(b) taken for purposes under the Hague Evidence Convention might extend to the full scope of r 26(b)(1). It is appropriate to set out the terms of Mr Fellas' evidence in this regard: "Q. The question that I asked concerned the scope of the power conferred by Rule 28(b). It is, I suggest, a power that extends to issuing a letter of request seeking testimony that would fall within the full scope of Rule 26(b)(1)? A. The reason I would disagree with that is that when you issue a letter of request seeking testimony, you would include within it Article 3 of the Hague Evidence Convention, and here I am reading, 'where appropriately the letter shall specify inter alia the names and addresses of the persons to be examined, the questions to be put to the witnesses and the documents or other (inaudible) to be inspected.' In other words, if you are seeking documents, it is appropriate to set forth the documents you are seeking. If you are seeking testimony, you identify the witness by name and address and you identify the questions to be put to the persons to be examined or the statement of the subject matter about which they are to be examined. I think, having done that, if you comply with this you are inevitably going to have a more limited scope of inquiry than you would if you just applied Rule 26(b). Now, in principle you could put in the letter of request that the questions to be put to the witness shall be, or the subject matter shall be, information reasonably calculated to lead to the discovery of permissible evidence. The United States District Court I guess could do that. Would it ever do it? I very much doubt it. Q. I am sorry, I don't think I understood you. Do you say in principle it would be possible as a matter of power to put in a letter of request that the US District Court is seeking information reasonably calculated to lead to the discovery of admissible evidence; did I understand you correctly? A. I would guess so. I would guess so, I mean, I don't see any reason why a court couldn't frame a letter of request in that way." (T 90-91). 133 Mr Fellas conceded the power existed for the United States District Court to issue a letter of request seeking evidence within the broad scope of Fed R Civ P r 26(b)(1) however I did not understand him to agree that there is a presumption that full scope of discovery provided by r 26(b)(1) applies to evidence taken outside the United States pursuant to a letter of request authorised under r 26(b). 134 Mr Kieve agreed that the only way in which the US District Court might validly request a court in Australia to have a person examined in Australia who was otherwise unwilling to be examined for the purposes of giving trial testimony is in accordance with the Federal Rules of Civil Procedure and the Hague Evidence Convention (T223). He agreed that a request for a deposition of trial testimony issued under the authority of the Hague Evidence Convention by a United States court must be made pursuant to the rules contained in Pt 5 of the Federal Rules of Civil Procedure. Part 5 is headed "Depositions and discovery" and contains the rules for both pre-trial depositions and depositions taken exclusively for trial testimony (T 230.32). In this context the following exchange took place during the cross-examination of Mr Kieve: "Q. So the mere fact that a deposition is requested pursuant to the rules set out in Part 5 does not indicate in any shape or form whether the request is one for pre-trial discovery on the one hand, or pure trial testimony on the other, does it?

Q. You agree, don't you, Mr Kieve, that the rules in Part 5 from Rule 26 onwards, apply, or some of them apply, whether the deposition is sought overseas in respect of pre-trial discovery or in respect of testimony purely for trial?

A. I have already testified that I accept that proposition.

Q. And there is no other part of the Federal Civil Procedure Rules, apart from Part 5 of those rules which I put to you, which is relevant to how depositions to take trial testimony in foreign countries is taken, is there? A. There may be some other rules that would have some applicability, but as I sit here today right now, I don't think so.

Q. So, in other words, any time a deposition needs to be taken overseas for trial testimony, it has to be done, doesn't it, in accordance with Part 5, including Rule 28(b)?

A. To the extent that those rules would apply, subject of course to the procedures in the foreign court, the answer is yes.

Q. And in the light of that, I suggest to you that it is just nonsense to say that, therefore, when you have a deposition sought to be taken in respect of evidence in a foreign country, the normal assumption would be for pre-trial discovery; what do you say about that?

A. I would say your presupposition is nonsense because you don't understand how the US courts work. There is a presumption that US norms of scope of a discovery will apply.

Q. But if we are talking about a request purely for trial testimony, are you suggesting that there is any other mechanism which can be pursued other than compliance, to the extent to which they are applicable, with the provisions of Part 5 of the Civil Procedure, including Rule 28(b)?

A. The necessary condition of your question presumes that it is seeking solely trial testimony.

A. And if that is the case, then of course it is seeking solely trial testimony.

Q. And that testimony has to be sought, doesn't it, in compliance with the rules set out in Part 5, including Rule 28(b)?

135 Mr Kieve said that the question of whether a letter of request is seeking trial testimony, as opposed to pre-trial discovery, depends a consideration of both the language of the letter of request and the context in which it is made. I understood him to say that it may be of significance that a letter of request is issued during the discovery phase of the proceedings (T 237.29). Equally, he acknowledged that taking into account that the Hague Evidence Convention contemplates that trial testimony may be sought from a foreign court at any time (including before the proceedings are commenced) it is not possible to determine whether the testimony sought is trial testimony or pre-trial discovery from the timing of the request (T 238.36).

136 It was common ground that Fed R Civ P r 32 makes provision for the use of depositions in court proceedings and that at trial or on the hearing of a motion or other interlocutory proceeding any part or all of a deposition, so far as it is admissible under the rules of evidence, may be tendered against any party who was present or represented at the taking of the deposition or who had reasonable notice thereof. Fed R Civ P r 32 applies to a deposition taken pursuant to a letter of request. It is open to a party at trial to tender the whole of the deposition or part of it or not to tender it at all. The decision as to which of these course is to be taken would ordinarily have been made by a party at the time its final pretrial statement is filed. 137 Mr Fellas agreed that it would be possible for the plan for trial formulated at the final pretrial conference to include a proposal for the taking of a r 28(b) deposition. He considered that such a course would be extremely unusual. He had never heard of it being done. He thought that leaving the proposal for the taking of a r 28(b) deposition to a date after the final pretrial conference would cause the trial judge concern that the trial would be delayed. In this respect Mr Fellas observed that it had been his experience that letters of request can take a great deal of time from issue to the date of on which the evidence is taken.

138 It is open to a United States court exercising jurisdiction in proceedings to which the Federal Rules of Civil Procedure apply, to issue a letter of request after the final pretrial conference to obtain evidence that is to be admitted trial. I am satisfied that to wait until that relatively late stage in the management of the proceedings would be to risk delay and that it is common for parties in proceedings in the United States who are seeking to obtain evidence for use at the trial to apply for the issue of the letter of request before the final pretrial conference. I do not draw an inference from the timing of the issue of the letter of request in this case that it seeks pre-trial discovery.

139 I do not find that the fact that the letter of request was authorised under Fed R Civ P r 28(b) carries with it a presumption that the deposition that is sought is a discovery deposition to which Fed R Civ P r 26(b)(1) applies.

Judge Kessler's Memorandum of Opinion and the Special Master's Report 140 The United States' motion for the issue of letters of request to obtain the evidence of the applicant together with the evidence of two other persons, Andrew Foyle and Martin Broughton, was referred to Special Master Levie for report and recommendation. The Special Master issued his report and recommendation # 78 on 4 September 2002. He recommended that the United States' motion with respect to the applicant and Andrew Foyle be granted with certain modifications. He recommended that the motion relating to Martin Broughton be denied. 141 Judge Kessler in her memorandum of opinion dated 3 October 2002 adopted in part the report and recommendation of the Special Master. She appears to have adopted that part of the Special Master's report and recommendation relating to the application to issue the letter of request to obtain the evidence of the applicant. 142 The content of the Special Master's report and recommendation #78 was significant to the way Mr Gageler put the applicant's case. Special Master Levie noted that the United States had previously submitted a Fed R Civ P r 30(b)(1) notice of deposition for the applicant's testimony and that the notice was withdrawn following BATCo's submission that it had no control over the applicant. In setting out the relevant history in Report and Recommendation #78 Special Master Levie observed, "plaintiff withdrew its notice of deposition on May 16, 2002, indicating that it would seek a letter of request for Mr Cannar's testimony."(Report p 3 paragraph 2.)

143 Special Master Levie recorded that that the United States' had submitted that a letter of request was the appropriate vehicle for obtaining evidence, "from each of these deponents in the nature of proof to be used at trial" (Report p 4) and referred in this context to the Hague Evidence Convention. BATCo opposed the motions upon the ground that they were an untimely request for fact discovery being advanced on the eve of the close of fact witness discovery (Report p 5). Special Master Levie went on to record: "According to BATCo, the fact that Plaintiff now seeks testimony from these three individuals by way of letters of request does not permit plaintiff to avoid the requirements of the Federal Rules of Civil Procedure as defined by the Orders of this Court. Plaintiff seeks the letters of request pursuant to Fed R Civ P 28(b) which does not distinguish between testimony sought for discovery and testimony sought for use at trial. … Essentially, BATCo argues, Plaintiff is seeking fact witness discovery past the cut-off date for such discovery." (Report p 5). It is apparent from the terms of his report that in its submissions in reply the United States' contended that English and Australian law distinguished discovery from the request to seek testimony for trial. Special Master Levie observed: "Moreover, because the proposed depositions are for purpose of trial, Plaintiff contends that BATCo is not prejudiced by the timing of these Motions and that the taking of testimony will not delay the case" (Report p 7).

144 Special Master Levie noted that both the United Kingdom and Australia have adopted Article 23 of the Hague Evidence Convention, which permits signatories to declare that they will not execute letters of request issued for the purpose of obtaining pre-trial discovery of documents as known in common law countries. He went on to observe (at p 9): "Preliminarily, the Special Master agrees that the Hague Convention is the proper vehicle through which to obtain the trial testimony Plaintiff seeks. While it may seem contrary to English and Australian law and the application of Article 23 of the Hague Convention for the English or Australian courts to enforce a letter of request if such letter seeks pre-trial discovery, the Special Master notes that the ultimate decision as to whether the testimony will be taken properly rests with the foreign court . (Emphasis added.) 145 The Special Master went on to consider BATCo's allegations of delay. It is appropriate to set out a lengthy passage from the report under this heading: "2. BATCo's allegations of delay .

As stated, BATCo takes issue with the timing of Plaintiff's motions for letters of request, arguing that Plaintiff improperly seeks last-minute fact witness discovery. BATCo argues that Plaintiff's 'dilatoriness should not be rewarded.' Foyle Opp. at 5; Cannar Opp. at 6; Broughton Opp. at 8. BATCo has not alleged, however, that Plaintiff's Motions have caused BATCo any prejudice. Rather, BATCo's argument rests on the fact that Plaintiff has delayed in seeking discovery, and because of that delay Plaintiff should not be permitted to take the testimony it seeks. Plaintiff counters this argument by asserting that it seeks to preserve testimony for trial and is not attempting to take a deposition for factual pre-trial discovery.

The Special Master disagrees with BATCo's assertions relating to the timing of Plaintiff's Motion. In fact, one commentator has noted that in drafting a letter of request, 'the drafter should clearly state that the evidence sought in the letter of request is intended for use at trial in the underlying case'. Robert C O'Brien compelling the production by non-parties in England under the Hague Convention 24 SYRACUSE J. Int'l L & COM. 77, 104 (1997). One way to convince the foreign court that the testimony is not for discovery purposes is for the requesting court to note 'that the discovery cut-off date in the underlying case has past'. Id. citing Rio Tinto Zinc Corp. v Westinghouse Elec. Corp [1978] App. Cas. 547, 612, 636, 653; in re Asbestos Ins. Coverage Cases , [1985] 1 WLR 331, 336 (HL(E)). Therefore, it does not appear that Plaintiff's Motions are untimely and, in fact, arguably are timed appropriately from the perspective of the enforcing court."(Report pp10 & 11.) In the penultimate paragraph of his report Special Master Levie stated: "The Special Master believes, therefore, that it is appropriate to include Plaintiff's allegations in the Letters of Request to allow the receiving courts to examine their propriety. The Special Master also believes that it should be abundantly clear that Plaintiff's factual assertions, particularly those factual assertions that are in dispute, are Plaintiff's allegations and not the findings of the Court."

146 In Mr Gageler's submission a fair reading of the Special Master's report conveys that he arrived at his recommendation with respect to the applicant upon a view that the US District Court had a limited discretion to refuse the motion for the issue of the letter of request and that it was a matter for the New South Wales Court to determine whether the testimony was for pre-trial discovery or for use at trial. Mr Gageler relied on the passage in the report extracted at [144] above in this respect. In his submission the Special Master's recommendation with respect to the issue of the letter of request to obtain the testimony of the applicant was adopted by Judge Kessler without any attempt being made by her Honour to determine whether the evidence that was sought was for use at trial or by way of pre-trial discovery.

147 I reject the Mr Gageler's submission as to the construction of the Special Master's report. The passage in the report at p 9 (set out at [144] above) upon which the applicant placed reliance is to be read in light of the paragraph at p 11 (set out at [145] above). The Special Master found against BATCo's contention that the plaintiff was seeking fact witness discovery past the cut-off date for discovery.

148 In light of the submissions as to the significance of the Special Master's report, and the adoption of it by Judge Kessler, it is necessary to refer to the motion to take the evidence of Martin Broughton.

149 Mr Broughton was the Chairman of British American Tobacco (BAT) at the date of the motion. The United States' sought to take his evidence on the following topics: (i) management and retention of documents; (ii) the role of BAT in the Minnesota Settlement Agreement; (iii) the role of BAT in Brown & Williamson's acquisition of American Tobacco Company; (iv) the relationship of BAT to BATCo and Brown & Williamson, and (v) corporate reorganisation issues. The Special Master dismissed the United States' motion with respect to Mr Broughton. The United States' challenged his recommendations in this respect. Judge Kessler adopted the recommendations with respect to topics (i) to (iii). She allowed the United States' objections with respect to the remaining two topics. In determining whether for the purposes of Fed R Civ P r 28(b) "it was just and appropriate" to issue the letter of request her Honour observed (at p 3 of her Memorandum Opinion): "Second, because the letter of request seeks trial testimony, the ramifications of denying the Government's motion would be even more serious than denying leave to take a deposition. It is rare for a court to prohibit altogether the taking of a deposition. Salter v Upjohn Co. , 593 F. 2d 649, 651(5th Cir. 1979). A letter of request represents the Government's last opportunity to take Mr Broughton's testimony; to deny the motion is therefore equivalent to barring him as a witness. For this reason, issuance of the letter is just and appropriate."

150 Included in Ex "H" is the United States' Motion for the Issuance of a Letter of Request for Nicholas Cannar. It is apparent from that document that the United States was mindful that Australian Courts would not enforce a letter of request seeking pre-trial discovery. The circumstance that it was seeking a letter of request to obtain evidence for use at trial, rather than as pre-trial discovery, was given as the reason for submitting the motion to the Court rather than to the Special Master (Motion for the Issuance of a Letter of Request for Nicholas Cannar p.4). In the event, Judge Kessler referred the United States' motion to Special Master Levie for report and recommendation. However the assertions in the United States' Motion as to the purpose of the letter of request and the associated reason for bringing the motion before the Court are of significance in evaluating the applicant's submission that Judge Kessler did not turn her mind to whether the request that she addressed to this Court was for pre-trial discovery or for testimony to be used at trial. 151 Judge Kessler's memorandum opinion, dated 3 October 2002, makes clear that her Honour was conscious of the distinction a request for pre-trial discovery and a request for trial testimony. So much seems to me to flow from her reasons dealing with the motion relating to Martin Broughton. The Construction of Pt 4 of the Act

152 I come back now to the first way in which the applicant puts his case on the jurisdictional issue, namely, that s 32(1)(b) of the Act poses as the threshold for the making of an order under s 33(1) that the requesting court be seeking evidence for the purposes of proceedings that is admissible and to be admitted at the trial. Mr Gageler drew to my attention that there are decisions at first instance in this State and in Queensland that do not lend support to the construction of the section for which he contended; Application of Forsyth; Re Cordova v Philips Roxane Laboratories Inc (1984) 2 NSWLR 327; Re Cochran Consulting Inc v Uwatec USA Inc (1996) 2 Qd R 137; Pickles v Gratzon (2002) 55 NSWLR 533. In each of the latter two judgments their Honours adopt a passage in the reasons of Clarke J in the Application of Forsyth at 333E: "In my view, there is power provided that the foreign court is desirous of obtaining the evidence for use, or possible use, at the trial notwithstanding that there is another, and dominant, purpose for which the evidence is required." 153 Mr Gageler takes issue with words "or possible use" in this passage. In his submission Clarke J's remarks in this respect were not necessary for decision. To the extent that White J and O'Keefe J adopted this portion of his Honour's reasoning in Cochran Consulting and in Pickles respectively their remarks were said to be obiter dicta. In Mr Gageler's submission I would not consider myself constrained to follow the approach of Clarke J in the Application of Forsyth or O'Keefe J in Pickles. It was contended that the preferable approach was that to be found in recent decisions of the Court of Appeal (Civil Division) of England and Wales dealing with legislation framed in like terms to Pt 4 of the Act. 154 In the Application of Forsyth Clarke J was dealing with the provisions of the Foreign Tribunal's Evidence Act 1856 (UK), which governed the application before him arising out of letters rogatory issued by the Superior Court of California. The latter sought orders that a medical practitioner who had conducted research into the effect of various drugs upon unborn children, and the proper officer of Foundation 41, appear before (and produce documents specified) to a commissioner authorised to take their oral evidence. For the purposes of the Foreign Tribunal's Evidence Act Clarke J considered the question of whether the Superior Court of California "is desirous of obtaining the testimony … of any witness". He approached this question by looking "to the substance of the matter" in conformity with the reasoning in Radio Corporation of America v Rauland Corporation [1956] 1 QB 618 per Lord Goddard CJ at 641 and Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 per Viscount Dilhorne at 624 and not by confining himself to a consideration of the precise wording of the letters rogatory. The order for the production of documents was couched in terms that Clarke J considered to be more consistent with discovery, or even fishing, than those of a commission examination for the purpose of obtaining evidence for tender at trial (333D). However, that finding did not lead him to conclude that the court was without power to make the orders sought. 155 In National Mutual Holdings Pty Limited v The Sentry Corporation (unreported) Federal Court of Australia, 30 May 1990 Northrop J expressed a disinclination to follow the approach of Clarke J in the Application of Forsyth set out at paragraph [151] above. In National Mutual Holdings Northrop J was concerned with the Evidence Act 1898 (NSW) as amended by the Evidence (Evidence on Commission) Amendment Act 1988 which inserted provisions into the principal Act similar to those contained in the Foreign Tribunals Evidence Act. This difference in judicial opinion was noted by Kirby P in Lenning v Alexandra Proudfoot Company World Headquarters (unreported) NSWCA, 22 April 1991 at [5]. It was not necessary to resolve the question in that case.

156 Mr Gageler referred me to the judgment of the Court of Appeal of England and Wales in State of Minnesota by Hubert H Humphrey III Its Attorney-General and anor v Philip Morris Incorporated & Ors (unreported), Court of Appeal (Civil Division), 30 July 1997. This was an appeal from an order made by the primary judge that four witnesses attend to give evidence before an examiner pursuant to a letter of request issued by a Judge of the Minnesota District Court in relation to the Minnesota proceedings. In his judgment Woolf MR (at p 8) set out a paragraph Minnesota District Court's letter of request observing that it provided the only guidance as to the issues upon which the proposed examinees were to be examined: "It is known that Sir Patrick Sheehy, Dr Ray Thornton, Mr Alan Heard and Dr Lionel C F Blackman, in their former employment with defendants BAT Industries Plc, British-American Tobacco Company Limited, and/or BAT (UK & Export) Limited may have obtained information regarding: smoking and health issues relating to tobacco and cigarettes; marketing of cigarettes; scientific research related to smoking and health issues; manipulation of nicotine by defendants BAT Industries Plc, British-American Tobacco Company Limited, and/or BAT (UK & Export) or their subsidiaries and affiliated companies including, but not limited to, [1] defendant Brown & Williamson Tobacco Corporation; [2] the exercise of control by defendants BAT Industries Plc, British-American Tobacco Company Limited, and/or BAT (UK & Export) over their subsidiaries and affiliated companies including, but not limited to, defendant Brown & Williamson Tobacco Corporation; [3] and the interactions of defendants BAT Industries Plc, British-American Tobacco Company Limited, and/or BAT (UK & Export) and their subsidiaries and affiliated companies including, but not limited to, defendant Brown & Williamson Tobacco Corporation." After citing the judgment of Kerr LJ in Re State of Norway's Application (No 1) [1987] QB 433 at 482, Woolf MR observed: "If, in relation to a request of a court in a foreign jurisdiction the conclusion of the court is that an application is fishing, then that has a more significant effect. In my judgment, the consequence is that the court does not have the power under the 1975 Act to make an order. It may be that, by curtailing the request the order can be cured. I express no final conclusion but I do regard this general position as a matter of some significance.

… Because of the general approach, to which I have drawn attention, when the court has to choose between either giving effect to a letter of request or refusing to do so, it will take into account any limitations, corrections or conditions which the party seeking the order is willing for the court to take into account. It will, if appropriate, be prepared to give the Request an amended effect. However, notwithstanding that, it is important to bear in mind that fishing still cannot be permitted as part of a Request. Furthermore because of the need to hold the balance between the requesting court and the witnesses who are to be examined, if the Request is given effect, the court will not allow uncertain, vague or other objectionable Requests to be implemented. A witness is entitled to know within reasonable limits the matters about which he or she is to be examined. Although there is the possibility, to which I have already referred, of matters coming back to the court for further rulings, in general the court has to take into account that once it makes an order it ceases to have any control of the examination." 157 The reference in the passage extracted above to the 1975 UK Act is a reference to the Evidence (Proceedings in Other Jurisdictions) Act 1975 (UK) (the 1975 UK Act). It is relevant to note that ss 1 and 2 of that Act broadly correspond to ss 32 and 33 of the Act.

158 In the State of Minnesota the terms of the letter of request were found to be unacceptably wide and uncertain. It was upon this basis that the appeal was allowed. 159 In Golden Eagle Refinery Co & Ors v Associated International Insurance Co & Ors (unreported) Court of Appeal (Civil Division), 19 February 1998 the appellants submitted that the letter of request (issued by a court in California) was in form and in substance an application for American pre-trial discovery and by reason of that fact not authorised by the provisions of the 1975 UK Act. The primary judge dealt with this objection by adding a rider to his order in terms that the witnesses be examined, "For the purposes of their trial testimony". On appeal Buxton LJ observed (at 10): "The appellant's first submission was that that step had not been open to the judge, because, once it was shown that the letter of request was infected by any element of a request for pre-trial discovery in the American sense identified by Devlin J the English court had no jurisdiction to make an order on the basis of that letter of request. Such a letter of request therefore simply could not in law form the basis of an order under the 1975 Act. If that submission was wrong, the appellants argued that the limitation imposed by Rougier J was unworkable, in that it would be impossible, or at least very difficult, for an English examiner, working under the terms of this letter of request, to identify what questions were limited to trial testimony and what were not. The Insurers contended that the letter of request was in truth not concerned at all with pre-trial discovery, but only with the seeking of evidence for use at the trial. If they were wrong about that, however, and the letter of request had a dual (or as it was at times called 'hybrid') purpose, that did not deprive the court of jurisdiction to make an order based on it. It was still open to the court, in exercise of its powers under the 1975 Act, to make such an order as met the requirements of the 1975 Act, as Rougier J had done in this case." 160 The conclusion reached in Golden Eagle Refinery by Buxton LJ was that the letter of request had a dual or hybrid purpose. His Lordship found that it sought testimony for use at the trial and that it was also concerned with the American style of pre-trial discovery. The latter could not be the subject of examination of an unwilling witness in an English court. This conclusion made it necessary to consider the appellant's contention as to that the Court was without jurisdiction to make an order under the 1975 Act. His Lordship considered that the approach of the House of Lords in the Westinghouse case was conclusive against the appellant's contention. He next considered the judgment of the Court of Appeal in the State of Minnesota case. After extracting the passage in the judgment of Lord Woof MR at 16E that I have set out at [156] above, his Lordship said: "That approach seems to me to be quite inconsistent with any suggestion that the presence in the letter of request of misconceived attempts at discovery deprived the English court of jurisdiction" (16). 161 The Court held in Golden Eagle that it had jurisdiction to issue the order and that subject to certain safeguards it was open to make an order. The safeguards included making provision in the order for the testimony to be transmitted to the Californian court. This served to lay to rest the concern that the process might resemble the taking of a proof, which would leave open that the examining party may ignore or suppress replies that did not assist its case. Secondly, the Court had before it an affidavit from the Californian attorney who would be conducting the examination on behalf of the Insurers, confirming that the Insurers sought only to perpetuate testimony for admission at the trial. Thirdly, the affidavit of the attorney included the undertaking that "the witnesses will be examined as if they were giving evidence at the trial of this matter". The latter undertaking was taken to carry with it that, although the proposed witnesses were from the standpoint of the Insurers hostile, they might only be asked questions that would be appropriate in examination in chief. 162 While the Golden Eagle case did not lend support to the applicant's submission that the Court lacked jurisdiction to make an order unless satisfied that the letter of request was one for the obtaining of evidence, meaning evidence that is (i) admissible and (ii) to be admitted at the trial, considerable weight was placed by Mr Gageler on the safeguards to which Buxton LJ referred. In this respect he observed that the respondent's undertaking conveyed in her letter of 22 April 2003 (annexed to the affidavit of Mr Highfield sworn on 23 April 2003) does not extend to an undertaking that the evidence would be put in at the trial. Nor was there any undertaking that the applicant would be examined as if he were giving evidence at trial.

163 The next case upon which Mr Gageler relied is Genira Trade & Finance Inc v CS First Boston and Standard Bank (London) Limited [2001] EWCA Civ 1733 (21 November 2001). Waller LJ reviewed the principles governing the making of orders for examination under the 1975 UK Act at paragraphs [28] - [32]. His Lordship referred to the judgments in Westinghouse, Golden Eagle Refinery and State of Minnesota. The Court held in Genira that the primary judge had been right to set aside the order. The request it was observed was in very broad form. Mr Gageler laid stress on Waller LJ's observation at [44]: "We do not think it should be the function of this Court to re-draft letters of request where there are serious doubts about the admissibility of the evidence. That is particularly so where it does not appear that the New York court has considered precisely what evidence is being sought for the trial, or its likely weight if it were obtained." 164 Mr Gageler submitted that the principles to be drawn from these recent decisions of the Court of Appeal of England and Wales is that the jurisdiction to make an order under s 33(1) of the Act arises only where the Court is satisfied that the request complies with s 32(b). The court may only attain that satisfaction where it is satisfied that what is being sought is evidence both admissible and to be admitted at trial. Where the court is satisfied of those matters it is not deprived of jurisdiction by reason that the request may go further. However, the order that the court can make under s 33(1) must be one that gives effect to the request that is made and may not require a step to be taken if that step may not be taken for the purposes of proceedings in this Court.

165 In Pickles O'Keefe J discussed the construction of Pt 4 of the Act. His Honour said this: "[79] Section 32 of the Act is the gateway through which an applicant, who seeks judicial assistance from the Supreme Court in fulfilment of a letter of request from a foreign court must pass. The applicant must satisfy the court as to the matters expressed in s 32(1)(a) and s 32(1)(b). On the proper construction of s 32 there is, in my opinion, no importation of, or need to import, a limitation on the breadth of the power conferred by the section by reading words into the section, or by limiting the oral evidence which may be obtained to that which has been specified with particularity beforehand. The limitations on the exercise of the powers conferred by s 32 are those that are expressed in s 33 of the Act. Section 33(4) imports into the exercise of the powers conferred by the Act, those limitations which exist under the law of New South Wales. If the request seeks the taking of a step that could not be taken in a proceeding in the Supreme Court, then the court is precluded from exercising the powers created by Pt 4 of the Act. Section 33(6) precludes the court from exercising the powers created by Pt 4 of the Act in such a way as, in effect, to require pre-trial or other discovery. This limitation reflects the law as stated in, for example, the Radio Corporation case. [80] Having regard to the purpose of Pt 4 of the Act, the express terms of the sections, the nature of the limitations built into the Part and the desirability of court having sufficient powers to give effect to requests from foreign courts for judicial assistance, I am of opinion that s 32 and s 33 of the Act should not be construed in a restrictive manner when determining the ambit of the court's power. The powers created by Pt 4 of the Act are discretionary. Under s 33, the Supreme Court 'has power' to make certain orders (s 33(1)). In furtherance of that power, an order 'may require' a specified person to take such steps as the court 'may consider appropriate' (s 33(2)). The generality of the powers conferred in s 33 (1) and (2) is enhanced by the provisions of s 33(3), under which the court 'may, in particular' make orders of a specific kind. The existence of the discretion enables the court to ensure that its process is not used inappropriately or unjustly. The existence of such a discretion itself, in my opinion, speaks against importing into s 32 and s 33 of the Act a limitation or limitations of the kind contended for by the applicant. [81] In applying the provisions of s 32 and s 33 of the Act, I am of opinion that the approach adopted by Clarke J in that regard in Application of Forsyth is correct.

166 Pickles is a recent considered decision by a Judge of this Court on the construction of the provisions of the Act with which I am concerned. I respectfully express my agreement with his Honour's observations extracted at [165] above.

167 The matters of which the court must be satisfied for the purposes of s 32(1)(b) include that the evidence is to be obtained for the purposes of proceedings "which either have been instituted … or whose institution is contemplated." I see no warrant for reading into the terms of the subsection the restriction for which Mr Gageler contended. I am note sure that it is apt to speak of evidence that is both admissible and "to be admitted" in respect of proceedings that are contemplated but that have not been instituted. I respectfully agree with O'Keefe J that the limitation on the broad terms of s 32(1) is to be found in s 33 including, relevantly, the provisions of s 33(4) that an order not require that any particular steps be taken save for those that might be required to be taken by way of obtaining evidence for the purposes of proceedings in this Court and in s 33(6) that an order may not be made for discovery. Conclusion 168 I concluded that the letter of request seeks that evidence be obtained for the purposes of the US proceedings. In coming to this finding I have had regard to the terms of the letter including the assertions made in paragraphs 1 - 15 and the topics of testimony viewed in the context of the particulars of the complaint. I also have regard to the terms of the Special Master's report and recommendation and Judge Kessler's Memorandum Opinion. I take into account the respondent's letter of 22 April 2003 that is annexed to the affidavit of Mr Highfield sworn on 23 April 2003. Mr Gageler was critical of this undertaking noting that it was not made on oath nor had it been given to the Court. He contrasted it with the undertakings in Westinghouse and in Golden Eagle. He also drew attention to the circumstance that the terms of the undertaking do not confine the use to be made of the applicant's testimony to the tender of the whole of it at trial. For the purpose of deciding whether I am satisfied that the letter of request seeks an order for evidence to be obtained for the purposes of the US proceedings, and that it does not require steps to be taken by way of obtaining evidence for the purposes of the proceeding that are not steps that may be required to be taken for the purposes of proceedings in this Court, I have accorded weight to the terms of the respondent's letter. She is the counsel of record for the United States in the US proceedings and responsible for the conduct of its case.

169 Taking into account the matters that I have referred to above I am satisfied that the letter of request seeks an order for evidence to be obtained for the purposes of proceedings within the meaning of s 32(1)(b) of the Act.

170 The applicant argued, in the alternative, that an order could not be made that would satisfy the requirements of s 33(1) and (4) giving effect to the request that is made and not requiring a step to be taken that might not be required to obtain evidence for the purposes of proceedings in this Court. Mr Gageler submitted that it is only after the entry of the final Pretrial Order that the issues between the parties are crystallised such as to admit of rulings on admissibility being made for the purposes of the trial. For the reasons that I have stated above, I was persuaded not to draw an inference that the purpose of the order was for the taking of a pretrial discovery deposition by reason of the timing of the letter of request. The admissibility of the applicant's evidence will be determined by reference to the pleading.

171 For the purposes of s 33(1) I am satisfied that the Orders giving effect to the request do not offend s 33(4) of the Act.

172 I am not persuaded that James J was without power to make the Orders.

173 The applicant submitted that, were I to find that the Orders were within power, I would nonetheless discharge them in the exercise of discretion. There were three limbs to his argument on discretion: (i) The scope of the evidentiary inquiry; (ii) the conduct which on the face of the letter of request the applicant is said to have engaged in constitutes both a serious civil and criminal wrong in the United States in circumstances in which there exists no guarantee that the applicant will not be joined to the proceedings and no guarantee that he will not be subjected to other proceedings referable to the same subject matter in the United States, the United Kingdom and in this country; (iii) the real potential for the public disclosure of the applicant's testimony even if it were not admitted at trial.

174 The applicant submits that the pleadings in the US proceedings embrace a course of conduct commencing in or around 1953 and continuing. The applicant is alleged to have had a role in the document management policy of BATCo, and BATCo's operating companies, spanning the period from 1985 to 2002 and relating to conduct in the United Kingdom, Australia and the United States. In his submission the proposed examination is oppressive in that it amounts to a roving inquiry.

175 Mr Gageler took me to the decisions of Re State of Norway's Application (No. 1) and Re State of Norway's Application (No. 2) [1989] 1 All ER 701 and First American Corp v Sheikh Zayed Al-Nahyan [1998] 4 All ER 439 as illustrative of the approach taken by the Court of Appeal of England and Wales to the exercise of the discretion to refuse to make orders for examination in cases in which the topics specified by the requesting court are widely framed.

176 In Re State of Norway's Application (No. 1) the Court by majority allowed the appeal and set aside the order requiring the examination of the two proposed witnesses in proceedings before the Norwegian Court. The topics upon which the testimony of the proposed witnesses was sought were broad. They are set out in the judgment of Kerr LJ (at 670). It was not in issue in that case that the evidence that was sought was for use at the trial. Kerr LJ considered that a letter of request seeking oral evidence for use at trial might nonetheless involve a degree of impermissible "fishing" when that which was sought was information to support a party's case and not evidence tending to prove facts that had been raised bona fide with adequate particulars (at 684). Glidewell LJ agreed with Kerr LJ on this aspect. Ralph Gibson LJ in was in dissent. His Lordship cited the judgment of Lord Keith in Rio Tinto Zinc Corp v Westinghouse Elec. Corp [1978] AC 547 at 654. His Lordship considered that the witnesses were probably able to give relevant evidence and that the request was not so wide that the Court should reject the application (at 697). 177 The State of Norway made a further application to the Norwegian Court, which issued a second letter of request for the oral examination of the witnesses on twelve specific issues. This second letter of request set out the specific questions to be put to the witnesses. In State of Norway's Application (No. 2) Lord Woolf doubted whether the concept of 'fishing' was appropriate in dealing with a request that a witness be required to give oral evidence. His Lordship said (at 743): "But subject to the question of privilege, what I would expect normally to concern the court when considering whether effect should be given to a request, is whether the request is confined to seeking to obtain evidence which will be relevant to the proceedings in the foreign court. If it is, then normally that will be the end of the matter. Under the 1975 Act the court does not however have a general discretion and if there are special circumstances making it important that the examination is confined the court can take the appropriate action. Here the question of confidentiality can be highly significant. However, subject to confidentiality I can see no possible objection to the latest request, which is clearly designed to obtain evidence for use at the hearings."

His Lordship went on to express a preference for the reasoning of Ralph Gibson LJ in State of Norway Application (No 1) over that of the majority who favoured extending principles which he regarded as applicable to discovery to evidence required for the hearing itself (743). 178 Sir Richard Scott VC (with whose judgment Auld LJ and Schiemann LJ agreed) reviewed the judgments in State of Norway's Application (No. 1) and State of Norway's Application (No. 2) in Sheikh Zayed observing (at 447): "I am in respectful and complete agreement with the opinion expressed by Woolf LJ in the passage I have cited. If oral evidence is being sought for the purpose of use at trial and if there is good reason to believe that the intended witness has knowledge of matters in issue at the trial so as to be likely to be able to give evidence relevant to those issues, I do not understand how an application to have the intended witness orally examined can be described as 'fishing'. It cannot be necessary that it be known in advance what answers to the questions the witness can give. … In my opinion, the disagreement between Ralph Gibson LJ and the majority in Re State of Norway's Application (No. 1) was not really one of principle. The majority were not, in my view, taking a jurisdictional point. Their view of the 'fishing' character of the request was based upon its width and led them to conclude that it would not be right to accede to the letter of request, not that they lacked power to do so. I regard the case as authority for the proposition that, as a matter of discretion, a request for oral testimony should not be acceded to if the intention were to obtain information rather than to obtain evidence for use at the trial. It is not, in my opinion, authority for any broader proposition. Moreover, it is not always possible to draw a sharp distinction between, on the one hand, questions 'designed to establish allegations of fact' and, on the other hand, questions designed to extract 'information which may lead to obtaining evidence in support of a party's case' (See [1989] 1 All ER 661 at 684, [1987] QB 433 at 482 per Kerr LJ)." 179 His Lordship went on to note that the decisions in State of Norway's Application (No 1) and (No 2) had been appealed to the House of Lords and that Lord Goff (with whose speech the other members of the House agreed) had expressly left unresolved the conflict of opinion between Kerr LJ and Glidewell LJ on the one hand and Ralph Gibson LJ and Woolf LJ on the other. The judgments of Kerr and Glidewell LJJ in Re State of Norway's Application (No. 1) constituted the ratio of the case and were binding. Woolf LJ's comments in Re State of Norway's Application (No. 2) were obiter. His Lordship went on to observe (at 448): "The principle for which the former judgments stand as authority does not, however, go further than to require that a letter of request, if it is to be acceded to by an English court, must be intended to obtain relevant evidence for use at the trial. The intention underlying a letter of request may often, of course, be inferred from its contents and it was the width of the contents of the original Norwegian letter of request that led the majority in the Court of Appeal to categorise the underlying intention as fishing. The question as to what evidence would, and what evidence would not, be relevant to an issue in the foreign action is primarily a matter for the foreign court. The House of Lords so held in Re Asbestos Insurance Coverage Cases [1985] 1 All ER 716 at 722-723, [1985] 1 WLR 331 at 339 per Lord Fraser: 'It would be quite inappropriate, even if it were possible, for this House or any English court to determine in advance the matters relevant to the issues before the Californian courts on which each of these witnesses is in a position to give evidence.' In my opinion, therefore, an English court must look at the issue of the relevance of the requested testimony, if it is raised, in broad terms, leaving to the foreign court, in all but the clearest cases, the decision as to whether particular answers, or answers on particular topics, would constitute relevant admissible evidence."

180 Significant to the way Mr Gageler put the applicant's case were the observations of Sir Richard Scott VC in Sheikh Zayed (at 449): "The second matter of importance is that, in deciding what response to make to a letter of request, the court should bear in mind the need to protect intended witnesses from an oppressive request. There is a balance to be struck in each case between the legitimate requirements of the foreign court and the burden that those requirements may place on the intended witness. I agree with Ralph Gibson LJ that the balance is much the same as that which has to be struck if an application is made to set aside a subpoena."

His Lordship observed that, notwithstanding the width of some of the paragraphs of the schedule of requested testimony, he did not see any reason to doubt that questions put to the witness on the specified topics would be questions intended to elicit evidence for use at trial. Next his Lordship considered whether the width of the topics rendered the letters of request oppressive. In this respect he quoted the judgment of Woolf MR in State of Minnesota that, "A witness is entitled to know within reasonable limits the matters about he or she is to be examined" (at 451). The width of the topics in the schedule to the letter of request in Sheikh Zayed is illustrated by a number of examples that are set out at 451. By way of illustration, paragraph 6 referred to, "BCCI's banking relationship with Manuel Noriega". His Lordship noted that there was no indication of the basis upon which such a banking relationship was relevant to the issues in the underlying litigation. This and a number of other paragraphs in the schedule were found to be oppressively wide.

181 Mr Gageler referred me to Witness v Marsden [2000] NSWCA 52; 49 NSWLR 429 per Heydon JA at [51] and [57] in support of the contention that were the applicant to be served with a subpoena ad testificandum in proceedings in this State involving allegations of the breadth of those in the US proceedings he might successfully move to have the subpoena set aside as an abuse of the process of the Court. 182 The pleadings in the US proceedings involve allegations of a conspiracy said to have been on foot over a period of more than forty-five years. The pleading is lengthy and includes a large number of material facts upon which the United States' seeks to rely. These include the assertions set out at [120] above. The topics upon which it is sought to examine the applicant are identified with some particularity. The circumstance that they address aspects of the document management policy employed by BAT, BATCo, Brown & Williamson over the period of the applicant's employment with one or other of those companies arises out of the nature of the US proceedings. Each of the topics of testimony is referable to the allegations that are made in the complaint. It appears from the assertions contained in the letter of request that the applicant may reasonably be expected to have relevant evidence to give with respect to the topics identified.

183 I do not consider that the Orders should be discharged in the exercise of discretion upon the ground that the topics of testimony are so broad as to amount to a roving inquiry . I record my respectful agreement with the observations of Sir Richard Scott VC in Sheikh Zayed at 447 and 448 in this respect.

184 In written submissions filed on the applicant's behalf it was put that the applicant faces the distinct prospect of being joined as a defendant in civil proceedings in the United States or elsewhere: "[43] That Mr Cannar could be subject to future proceedings is by no means fanciful - a commentator observed that the allegations 'could trigger a 'litigation Armageddon' around the world' (The Guardian, 20 April 2002 at p 27). Indeed, the matters referred to in paragraph 13 above raised the distinct prospect of Mr Cannar finding himself a party to, or at least a principal witness in, future proceedings in Australia. [44] Against this backdrop, the proposed examination is inherently oppressive for the additional reason that it would require Mr Cannar to answer questions in a wide-ranging enquiry on subject-matters aimed squarely at the 'very topics that would be relevant in a [civil] action against [him]'. Zayed (at 452)." 185 The applicant's submissions on discretion placed considerable emphasis on the decision in Sheikh Zayed to which I have referred. This was an appeal from a judgment dismissing an application by First American and for an order giving effect to letters of request which had been issued by the US District Court. The underlying litigation involved a claim by First American that the defendants (who were former directors of First American) had illegally conspired to obtain control of the company by acquiring control, through nominees, of its holding company with funds provided by BCCI. An English firm of accountants, Price Waterhouse, had undertaken work relating to the auditing of the accounts of BCCI. First American alleged that two partners of Price Waterhouse had been knowing participants in the conspiracy. In 1997 the US Court issued letters of request for the oral examination of these two partners. The primary judge dismissed First American's application on the ground that it was a fishing exercise. First American appealed.

186 Sir Richard Scott VC considered that the allegations of Price Waterhouse's knowing complicity in the nominee shareholding arrangements were to be taken into account. In this respect he said (at 451 - 452): "First American have given no undertaking that they will not join Price Waterhouse in a civil action, whether the existing action or a new action, in an attempt to recover damages for Price Waterhouse's alleged knowing complicity in the fraud. First American's lawyers plainly believe that they have already material that justifies them in making public allegations to that effect. It is, it seems to me, inherently oppressive to hold over the head of two witnesses serious allegations of complicity in fraud and the real possibility of being joined as defendants in a civil action based on that alleged complicity, while at the same time requesting an opportunity for a wide examination of the two witnesses on the very topics that would be relevant in an action against them. … But allegations of fraud raise special considerations and so long as First American hold themselves free to use any information they may obtain from these two witnesses in a civil action for fraud in which the witnesses, or their firm, are defendants, the requests are, in my judgment, oppressive."

His Lordship considered that First American "must come off the fence" (at 452). If it wished to join Price Waterhouse as defendants in an action based upon the firm's alleged complicity in the fraudulent conduct upon which the underlying proceedings in the US were based it should do so. This was in the context of the stance adopted by senior counsel before the primary judge, which was that although the pleading did not allege that Price Waterhouse were aware of the fraud, it was open to the plaintiffs to make such an allegation at the trial and that this was his case ( at 451).

187 The respondent in her letter dated 21 April 2003, which is annexed to Mr Highfield's affidavit sworn on 23 April 2003, states that the United States has no intention joining the applicant as a defendant in the US proceedings. I am mindful that this assertion is not on oath. Nonetheless it is the statement made by counsel of record in the US proceedings of the stance that her client takes. I do not consider that the concerns that troubled the Court in Sheikh Zayed arising out of the stance that the plaintiffs took with respect to the underlying proceedings to be present in this case.

188 I do not understand the considerations to which Sir Richard Scott directed attention in Sheik Zayed to extend to the possible use of testimony in proceedings that may be commenced by a plaintiff or claimant in a jurisdiction in the United States or elsewhere at some time in the future. In this respect I note the observations of Wilberforce LJ in Westinghouse (at 611): "Unless a case of bad faith is made against Westinghouse (which is expressly disclaimed) it is impossible to deny that the letters rogatory were issued for the purposes of obtaining evidence in the Richmond proceedings. The fact, if it be so, that evidence so obtained may be used in other proceedings and indeed may be central in those proceedings is no reason for refusing to allow it to be requested: all evidence, once brought out in court, is in the public domain, and to accept the argument would largely stultify the letters rogatory procedure." 189 I would not discharge the Orders upon the second of the applicant's discretionary grounds.

190 Mr Gageler acknowledged his third ground to be the least pressing. It arises from the circumstance that in the conduct of litigation in the United States there is no implied undertaking not to use documents obtained by way of discovery, or a deposition, for a purpose other than the proceedings. In his first report Mr Kieve stated that although the letter of request asks that the transcript of the evidence be transmitted to an attorney with the United States' Department of Justice this did not import any obligation of confidentiality. He said that there are few constraints on the use that may be made of a deposition. It is Mr Kieve's evidence that, in the absence of some form of restriction, it would not be a breach of ethics for an attorney to furnish a copy of a deposition to a representative of the media. 191 It is acknowledged on the applicant's behalf that the terms of the respondent's letter of 22 April 2003, which is annexed to Mr Highfield's affidavit sworn on 23 April 2003, goes some of the way to allaying any concern as to the pre-trial use that might be made of the transcript of his evidence. Mr Gageler accepted that the respondent has given an assurance that the transcript would not be disseminated to the public in advance of the trial. The applicant's concern is that the respondent has given no assurance that the transcript would not be filed in advance of the trial. Indeed, the terms of her letter expressly reserve that the evidence might be used in interlocutory proceedings including in support of motions and submissions. Mr Kieve states that "once a document is filed in the court record, it is generally considered to be a matter of public record." (second report at paragraph 3). 192 It seems to me that the concern arising out of the potential for the transcript of the evidence to become public by being filed before trial may be addressed by the form of the order made under s 33 of the Act. I note Mr Kieve's opinion that it is not clear that a United States' court would consider itself bound by any protective order that an Australian Court might make (first report, paragraph 81). Mr Kieve cited Laker Airways Ltd. v Sabena Belgium World Airlines 731 F.2d 909 (D.C. Cir. 1984) in support of this proposition. Mr Fellas disagreed with the interpretation that Mr Kieve placed on the reasoning in Laker Airways in this respect (report of 22 April 2003 at paragraph 69 and following). Mr Fellas extracted passages from Laker Airways in which emphasis was placed by the court on considerations of comity as tending to favour giving effect to the decisions of foreign tribunals in domestic courts (paragraph 71 and following). It seemed to me that Laker Airways raised issues somewhat removed from a consideration of the likelihood that the US District Court would seek to give effect to a request made by this Court that applicant's evidence not be filed publicly prior to it being admitted in evidence.

193 I am satisfied that the orders made were within power and that they should not be discharged in the exercise of discretion.

194 In paragraph 2 of his amended motion the applicant does not seek a variation of the Orders to address any concern that his evidence may be made public before it is admitted at the trial or with respect to the matters discussed in Golden Eagle to which I have referred at [162] above. I will hear from him in this respect and on the variations that he seeks in paragraph 2 of his motion.

195 The hearing focussed on the relief that the applicant sought in paragraph 1 of his motion. BATCo did not make submissions on the relief that it seeks in its motion during the course of the hearing. I was informed that the only contentious matter raised by BATCo's motion is the relief sought in paragraph 2 and that this question might conveniently be dealt with following the determination of the applicant's claim to have the Orders set aside. ORDERS

1. Refuse to set aside the Orders made by James J as subsequently varied,
2. Stand over the balance of the applicant's motion and BATCo's motion to a date to be fixed by arrangement with my Associate on three day's notice. *****

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