FEDERAL COURT OF AUSTRALIA

McHugh v Australian Jockey Club Limited (No 12) [2011] FCA 1374

THE COURT ORDERS THAT:

1.    The third respondent’s interlocutory application be dismissed.

2.    The third respondent pay the applicant’s costs of the third respondent’s interlocutory application.

3.    The fifth respondent’s interlocutory application be dismissed.

4.    There be no order as to the costs of the fifth respondent’s interlocutory application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    These reasons deal with two interlocutory applications heard by me on 30 November 2011. Both interlocutory applications arose out of paragraphs of the final written submissions filed on behalf of the applicant.

2    One interlocutory application was brought by the third respondent and the other by the fifth respondent. Each of those parties asked that its application be heard and determined in advance of final oral submissions for reasons relating to confidentiality, a concern that there would not be enough time to deal with the present issues on the days allocated for the hearing of final submissions and, in the case of the fifth respondent, because the relief it sought in the alternative was leave to adduce further evidence. For those reasons I acceded to those requests.

3    The third respondent's interlocutory application sought orders both under s 50 of the Federal Court of Australia Act 1976 (Cth) and otherwise limiting or preventing the publication of paragraphs 114 and 116 of the applicant’s Outline of Submissions filed 11 November 2011. Also, at paragraph 3 of its interlocutory application, the third respondent sought an order that "[a]ll copies of the Applicant’s Outline of Submissions filed 11 November 2011 . . . on the Court file be destroyed". In addition, the third respondent sought, at paragraph 6 of its interlocutory application, an order that "For the purposes of these proceedings, the Applicant and his legal representatives be restrained from repeating or otherwise relying upon paragraphs 114 and 116 of the Applicant’s Submissions, or the substance thereof, in open court."

4    The fifth respondent's interlocutory application sought directions under s 136 of the Evidence Act 1995 (Cth) limiting the use of evidence to prevent it from being used to support the matters raised in two sentences of paragraph 193 and a single sentence of paragraph 202 of the applicant’s Outline of Submissions or leave to the fifth respondent to file further responsive evidence in relation to the matters raised by the applicant in those paragraphs.

The third respondent’s interlocutory application

5    Turning first to s 50, the question is whether it appears to the Court to be necessary in order to prevent prejudice to the administration of justice that an order forbidding or restricting the publication of particular evidence be made.

6    I also drew the parties' attention to rule 6.01 of the Federal Court Rules 2011 (Cth) which provides that if a document filed in a proceeding contains matter that is scandalous, vexatious or oppressive, a party may apply to the Court for an order that the document be removed from the Court file or the matter be struck out of the document.

7    The evidentiary basis, apart from the contents of paragraphs 114 and 116 of the applicant's Outline of Submissions themselves, was slight. The solicitor for the third respondent deposed to his concern that if those paragraphs were published in open court those matters had the capacity to damage the persons referred to “even though:

5.1    there is no basis for the making of those allegations;

5.2     serious questions of procedural fairness arise;

5.3     the Applicant and his legal representatives have not advanced a basis and have elected not to engage in debate in response to correspondence from the Third Respondent about the issue;

5.4     the matters referred to above are otherwise capable of being dealt with in submissions and by any final judgement.”

8    Part of the third respondent’s application was that the application itself be heard in closed court. I did not accede to this part of the application and, with some circumspection applied to what was said in open court, it became unnecessary further to consider that issue.

9    Another and related part of the third respondent's application was that, under s 50, the affidavits read, the documents tendered or any written outline of submissions relied upon for the purposes of the interlocutory application also be the subject of an order forbidding or restricting publication. As I understood it, no separate submissions were addressed to this aspect of the relief sought. I therefore deal with it as part of the substantive interlocutory application.

10    Turning to the balance of the application to limit or prevent publication, I am not satisfied that an order under s 50 is necessary: Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30]-[32]. On the present facts I am not satisfied that the matters complained of in relation to paragraphs 114 and 116 of the applicant's Outline of Submissions, even if made out, fall to be dealt with under s 50. Neither am I satisfied that publication should otherwise be restricted or prevented.

11    I turn to consider the submissions put by the third respondent in support of the balance of the relief claimed on the interlocutory application. I have assumed these submissions were referable to paragraph 3 or paragraph 6 of the interlocutory application but reading paragraph 6 as if it did not contain the words "in open court". I have set out above at paragraph 3 of these reasons the terms of those paragraphs of the third respondent’s interlocutory application.

12    The submissions were that paragraphs 114 and 116 of the applicant's Outline of Submissions contained very serious allegations against a witness called by the third respondent which paragraphs caused or could cause great damage to the reputation of the witness where the allegations were not put to the witness; the allegations were without foundation; the allegations were at odds with matters put by senior counsel for the applicant; and the applicant had refused in correspondence to identify the evidentiary basis for the submissions complained of.

13    The applicant submitted that the matters complained of by the third respondent could and should be ventilated in the substantive submissions in the proceeding and that the third respondent displayed oversensitivity in its interlocutory application. The applicant also submitted that the matters complained of were squarely put to the witness.

14    The third respondent did not invoke rule 6.01 and correctly so: the material complained of falls short of the language of that rule which refers to material which is "scandalous, vexatious or oppressive".

15    In my view on the present facts the basic question is whether there has been unfairness. For example, the rule in Browne v Dunn (1893) 6 R 67 has been said to be based upon general principles of fairness, designed to achieve not only fairness to a witness, but also a fair trial between the parties: Bale v Mills (2011) 282 ALR 336; [2011] NSWCA 226. So far as concerns a witness a question is whether some kind of imputation is to be made against a witness.

16    I accept for present purposes that if there is unfairness I have a discretion as to how best to remedy it and one remedy is to preclude the party in default from submitting that the evidence of the witness should not be accepted. The Court may, depending on the circumstances, preclude the party in default from addressing on a particular subject on which the relevant witness was not cross-examined.

17    I have considered exhibits 3R3 and 3R4 and the transcript from pages 2433 to 2454. It is largely this material on which paragraphs 114 and 116 of the applicant’s Outline of Submission are based. I also note pages 2262 to 2263 of the transcript where I granted leave to the applicant to further cross-examine the witness in relation to what are now exhibits 3R3 and 3R4.

18    I see no unfairness or other vice in the first sentence of paragraph 114. It is not put on behalf of the applicant that the endorsement there referred to was not passed. As to the second sentence of paragraph 114, in my view this issue was sufficiently put to the witness at pages 2442 to 2444 of the transcript and I am not persuaded that there is any relevant unfairness.

19    The third respondent made submissions about the entirety of paragraph 116. As I read it, the paragraph concerns the quality of the decision-making of the body there referred to. In my view the paragraph does not otherwise have the capacity to damage the persons there referred to, including that body.

20    In essence the complaint on the part of the third respondent comes down to the actual or potential difference between the body endorsing the paper which is now exhibit 3R4, on the one hand, and the witness’ unwillingness to answer questions “about confidential information discussions we have within the board” see, for example, transcript page 2448. This is because the matters referred to in paragraph 116 so far as they concern numbers and percentages of horses were put to the witness: see transcript pages 2156-2158 and 2452-2453.

21    Thus the complaint is that it is relevantly unfair for the applicant to make a submission about what the witness disclosed or did not disclose to the relevant body on the basis of his paper, exhibit 3R4, where the witness would not answer questions “about confidential information discussions we have within the board”.

22    In my view this does not give rise to any relevant unfairness and the merits or otherwise of the submissions put at paragraph 116 can and should be dealt with by submissions in the ordinary way. The matters relied on by the third respondent do not, in my view, require the intervention of the Court so as to prevent the applicant from putting those matters by reason of unfairness to the witness or between the parties. For completeness I should say that I do not regard the language at the end of the first sentence of paragraph 116 as unfair.

23    For these reasons I refuse the relief sought by the third respondent in its interlocutory application and I dismiss that application. There is no reason why costs should not follow the event and I order that the third respondent pay the applicant's costs of the interlocutory application.

The fifth respondent’s interlocutory application

24    The two sentences in paragraph 193 of the applicant's Outline of Submissions in respect of which the fifth respondent seeks relief are as follows (omitting the footnote):

After the merger (which gave Aushorse 2 members on the board, in addition to the State representatives) Mr Messara, who took over as Chairman, persuaded the [fifth respondent] to change its position to one of support for reinforcement. At the same meeting a proposal from South Australia to debate AI was quashed, Mr Messara having commented that “there is no debate on AI”.

The sentence in paragraph 202 in respect of which the fifth respondent seeks relief is as follows (omitting the footnote):

However, using the same data, and taking a three year time lag, instead of two years, the results for section 16 would be that the proportion of progeny not realising service fees from those offered for sale is 37% in 2007, 44% in 2008, 52% in 2009 and 49% in 2010.

25    These matters are related to two aspects of my rulings given on 1 November 2011: McHugh v Australian Jockey Club Limited (No 11) [2011] FCA 1247, especially paragraphs 11 to 13 in relation to paragraph 193 of the applicant's Outline of Submissions and paragraph 3 in relation to paragraph 202 of the applicant's Outline of Submissions.

26    As to paragraph 193, I raised with counsel for the applicant whether the word "persuaded" meant that Mr Messara had a role in persuading the fifth respondent to change its position. Counsel for the applicant confirmed that meaning. Similarly, in relation to the word "quashed" I raised with counsel for the applicant whether that word meant "not approved" and counsel confirmed that meaning. This is the meaning that follows from the language of MFI 67 at the relevant pages.

27    As to Mr Messara’s comment, that is an accurate restatement of what appears in the minutes of the Board Meeting of the fifth respondent on 14 September 2007 and I read it in the context of what is there said about artificial insemination and the debate or absence of debate on the subject of artificial insemination.

28    In those circumstances, including the clarifications by counsel for the applicant, the applicant is not asking me to draw inferences which the respondents have not had an opportunity to answer as referred to in paragraphs 11 to 13 of my 1 November 2011 rulings and I do not grant the relief sought by the fifth respondent in respect of paragraph 193.

29    As to paragraph 202, I note the letter of 15 November 2011 from the solicitors for the fifth respondent to the applicant’s solicitors complaining that the applicant did not provide a basis or derivation for the percentages stated in the relevant sentence of paragraph 202 and that there was no explanation provided as to which sales the percentages reflected or how those percentages were calculated.

30    The applicant accepted that although the figures have their source in the disk which is KMR 10 to the affidavit of Mr Rodgers sworn on 14 October 2011, they are submissions only. Further I note that the applicant, by letter dated 29 November 2011, provided to the fifth respondent an explanation of the source of these figures and some detail as to the basis of calculation of the percentages.

31    In these circumstances it seems to me that it is neither necessary nor appropriate to limit the use to which the evidence constituted by the disk may be put to the existing reports by the applicant's expert Mr Lidums, as contended for by the fifth respondent.

32    I do not accept the submission that the fifth respondent is prejudiced by the material in the third sentence of paragraph 202. Any defects and deficiencies contended for by the fifth respondent in relation to that material may be and should be dealt with by way of submission in the ordinary way. Because these percentages are not evidence I am not persuaded that prejudice to the fifth respondent flows from a lack of opportunity to cross-examine Mr Lidums in relation to them.

33    For these reasons I refuse the relief sought by the fifth respondent in its interlocutory application. However by reason of the clarifications in relation to paragraph 193 and the explanation for the source of the figures in paragraph 202 being given only on 29 November 2011, I make no order in respect of the costs of the fifth respondent’s interlocutory application.

Associate:

Dated:    2 December 2011