South Australian Government Financing Authority & Ors v Bank of New Zealand A13/2002 [2002] HCATrans 49 (18 February 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A13 of 2002

B e t w e e n -

SOUTH AUSTRALIAN GOVERNMENT FINANCING AUTHORITY

First Named Applicant

BT FINANCIAL GROUP LIMITED

Second Named Applicant

BT AUSTRALIA (HK) LIMITED

Third Named Applicant

and

BANK OF NEW ZEALAND

Respondent

Application for a stay

KIRBY J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 18 FEBRUARY 2002, AT 10.32 AM

Copyright in the High Court of Australia

MR W.H. NICHOLAS, QC: If your Honour pleases, I appear for the applicants. (instructed by the Crown Solicitor for South Australia)

MS W.A. HARRIS: If the Court pleases, I appear for the respondent, Bank of New Zealand. (instructed by Finlaysons)

HIS HONOUR: Would you just make clear the evidentiary material so that I have that in order.

MR NICHOLAS: Does your Honour have the summons which was filed on 14 February?

HIS HONOUR: I have the summons.

MR NICHOLAS: That is seeking a stay your Honour may appreciate.

HIS HONOUR: I saw the summons but - - -

MR NICHOLAS: Your Honour, I can hand up a copy, if that would help.

HIS HONOUR: Thank you. Yes, I have the summons, sorry. I have the summons and there is an affidavit of Susan Mary O'Toole.

MR NICHOLAS: There is. That is the affidavit sworn 14 February 2002.

HIS HONOUR: Yes. Is there any objection to anything in that affidavit, Ms Harris?

MS HARRIS: Your Honour, there is. I do not want to delay the hearing in the Court but can I just draw your Honour's attention to paragraphs 15 and 16 of Ms O'Toole's affidavit.

HIS HONOUR: Yes. Just a moment. Yes, I think in your written submissions you say the role of Mr Bell is important to the issues involved in the trial.

MS HARRIS: That is certainly the case, your Honour, and I do not object to that part of what Ms O'Toole says. Ms O'Toole purports to depose to the nature of the documents and to the circumstances in which they came into existence and, of course, it is important to remember that the present applicant did not have anything to do with the bringing into existence of the documents. So strictly what Ms O'Toole says there is unattributed hearsay. I do not think much turns on it, your Honour. His Honour Justice Debelle made findings in his Honour's judgment about the nature of the documents and the circumstances.

HIS HONOUR: Well, I am not going to be finally determining factual questions of that kind, so I will note that you object but I allow those paragraphs for this application.

MS HARRIS: As your Honour pleases.

HIS HONOUR: That is to say paragraphs 15 and 16 are objected to but allowed.

MR NICHOLAS: If the Court pleases.

HIS HONOUR: Is that the only affidavit - - -

MR NICHOLAS: It is, your Honour.

HIS HONOUR: I should perhaps ask you, Ms Harris, do you wish to cross-examine Ms O'Toole?

MS HARRIS: I do not, your Honour.

HIS HONOUR: No. Is that the only affidavit you will be filing?

MR NICHOLAS: It is the only affidavit, your Honour, yes.

HIS HONOUR: Is there any affidavit on behalf of the respondent?

MS HARRIS: Not on this application, your Honour, no.

HIS HONOUR: Right, thank you. Well, that is the factual basis of the application and you also have before me, or you have filed in the Court and it is in my file, the application for special leave to appeal.

MR NICHOLAS: Yes, your Honour.

HIS HONOUR: Have you seen that, Ms Harris?

MS HARRIS: I have, your Honour.

HIS HONOUR: Yes. Is there any objection to my having regard to that document in respect of this application?

MS HARRIS: No, your Honour.

HIS HONOUR: Yes. Is there any other material that you would wish to place before me, Mr Nicholas?

MR NICHOLAS: Your Honour, there is a document, I think, described as a book of documents.

HIS HONOUR: Yes, I have that.

MR NICHOLAS: Your Honour, the purpose of me taking you to that is because on page 1 through to - - -

HIS HONOUR: And it has the judgment of Justice Debelle.

MR NICHOLAS: It has the judgment and I will be coming back to that, your Honour. Would your Honour also turn to page 14, which is the - - -

HIS HONOUR: Yes, that has the orders and you are seeking to stay order 1 and 6. Order 6 is merely the costs, is that correct?

MR NICHOLAS: Yes, your Honour.

HIS HONOUR: So that is purely consequential and 1 is the substantive order.

MR NICHOLAS: That is so, and, your Honour, then what happened was that the matter went to the Full Court of South Australia.

HIS HONOUR: Were there any reasons given by the Full Court for their decision?

MR NICHOLAS: No, and the orders, your Honour - - -

HIS HONOUR: Not even short reasons?

MR NICHOLAS: No.

HIS HONOUR: That is the practice in South Australia, is it, simply to grant or refuse - - -

MR NICHOLAS: I do not know whether it is the practice but it is what happened. Reasons were reserved I am told. It does not answer your Honour's question as to whether it is the practice.

HIS HONOUR: I see. Well, I do not have those reasons.

MR NICHOLAS: I will yield to Mr Keneally on that.

MS HARRIS: Perhaps I can just indicate, your Honour, that the matter was dealt with with some expedition by the Full Court.

HIS HONOUR: Yes, I can see that.

MS HARRIS: But there was not perhaps an opportunity for the preparation of reasons. That might explain the absence.

HIS HONOUR: Yes.

MR NICHOLAS: Thank you. Your Honour, at page 25 of the book is the Full Court's orders rejecting the applications and your Honour will see that the interim stay operates until Wednesday 5.00 pm.

HIS HONOUR: Yes.

MR NICHOLAS: So that is what brings us here as a matter of urgency. Your Honour, could I first take you to the affidavit of Ms O'Toole.

HIS HONOUR: Yes.

MR NICHOLAS: Shall I read it, your Honour?

HIS HONOUR: No. Just draw my attention to any paragraphs that you think are relevant. Could I ask you at the outset: are there any factual statements in the statement of background in the submissions for the respondent which were placed before me, they having been received last week, which you say are inconsistent with the affidavit of Ms O'Toole?

MR NICHOLAS: No, I do not - - -

HIS HONOUR: I did not assume that there were and they appear to follow what Justice Debelle said were the factual premises on which his Honour ruled.

MR NICHOLAS: We do not have any quarrel with that, your Honour.

HIS HONOUR: Thank you.

MR NICHOLAS: Your Honour, there are no particular matters. I should say to you I do not read paragraph 18. The matters referred to there are better dealt with in the judgment and this Court will get a better appreciation of the situation from me taking you to the judgment.

HIS HONOUR: Yes, very well. I will note paragraph 18 not read.

MR NICHOLAS: And paragraph 24, your Honour, is really argumentative and I do not read that.

HIS HONOUR: Paragraph 24 not read. At some stage I would be grateful if you would take me to the special leave application so that I understand what the grounds that you will be urging upon the Court on the special leave application would be.

MR NICHOLAS: Yes, your Honour. Can I do that now?

HIS HONOUR: I sat in Goldberg in the Court of Appeal - - -

MR NICHOLAS: Yes, your Honour did.

HIS HONOUR: - - - and I dissented - - -

MR NICHOLAS: I know your Honour did.

HIS HONOUR: - - - and the High Court favoured the view of the majority, though there were two dissentients, Justices Toohey and Gummow.

MR NICHOLAS: Yes, and your Honour, with respect, reminds us of that in Mann v Carnell which I will be taking your Honour to.

HIS HONOUR: I do not wish to appear to be - - -

MR NICHOLAS: No, but, your Honour, it points up part of the problem perhaps. The application for special leave your Honour has and I am not sure that there is particular utility in me taking your Honour to that. Your Honour will appreciate - - -

HIS HONOUR: It seemed to me that if there were a special leave point, it was possibly the revisiting of Goldberg v Ng but that was not a point that was raised before Justice Debelle or the Full Court, as I understand it. It was not reserved before their Honours.

MR NICHOLAS: That is certainly so, your Honour, and I should say to your Honour at this stage I do not, today, propose to put to the Court that an additional ground for seeking special leave will be revisiting Goldberg. I do not want to abandon that if and when the occasion comes for the special leave application to proceed, but I am not asking this Court to take into account that prospect.

HIS HONOUR: Well, it is in the special leave application - - -

MR NICHOLAS: It is, your Honour.

HIS HONOUR: - - - but you say it would not be at the forefront of the application.

MR NICHOLAS: Today.

HIS HONOUR: Yes.

MR NICHOLAS: And it needs, your Honour, some further thought and when the occasion comes for putting in the summary of argument in support of the special leave application then it can be addressed, if we can reserve our position on that, but I do not want to distract your Honour today on that question.

HIS HONOUR: No. I shall allay my enthusiasm. Perhaps I could ask the representative of the Registrar as to when in the normal course the application for special leave would be listed. Is there a South Australian list that is coming up and is there a slot in that list, or do you have any idea of when the matter would be listed for special leave hearing?

DEPUTY REGISTRAR: Unfortunately I do not, your Honour.

HIS HONOUR: No. It would be a matter of months, I would have thought.

THE COURT: I would imagine so.

MR NICHOLAS: And your Honour may have picked up from Ms O'Toole's affidavit that the trial of this matter is listed to begin 4 or 5 March.

HIS HONOUR: Yes, 5 March. How long has been set aside for the trial?

MR NICHOLAS: Eight weeks.

HIS HONOUR: Yes.

MR NICHOLAS: And I will have to deal with that, obviously, your Honour, in relation to balance of convenience - - -

HIS HONOUR: Yes, indeed.

MR NICHOLAS: - - - and matters of that kind. Can I take your Honour to the judgment of Mr Justice Debelle and that, if I may say so, might be the efficient way of taking you to the matter.

HIS HONOUR: Yes. You did not have any written submissions, did you?

MR NICHOLAS: I am afraid I did not, your Honour.

HIS HONOUR: No, it is all right. I am not saying they are compulsory but they are helpful.

MR NICHOLAS: I know that, your Honour, and I am - - -

HIS HONOUR: But this has come on very quickly, so it is understandable that you did not have the time.

MR NICHOLAS: Your Honour, I regret that.

HIS HONOUR: I have the reasons of Justice Debelle.

MR NICHOLAS: Can I take your Honour through it simply to give your Honour obviously the background to it and then I will focus on some of the more important issues we say which give rise to this application. Shall I read it to your Honour?

HIS HONOUR: No. I have read it quickly and I have read the written submissions of the respondent.

MR NICHOLAS: Thank you.

HIS HONOUR: And there, as you have said, is no real contest as to the factual background. So I know how this problem has arisen.

MR NICHOLAS: Thank you. Then, your Honour, what I would be proposing your Honour of is the finding at paragraph 14 or the recognition at paragraph 14 by his Honour that it was:

Common ground that the statements and copies of them -

these are the subsequent statements, the ones the subject of the orders -

are properly the subject of legal professional privilege.

Then the opposing contentions, your Honour - - -

HIS HONOUR: Who does the privilege belong to? It belongs to the client, but who is the relevant client?

MR NICHOLAS: The relevant client are each of the applicants, your Honour. There is a common interest. Initially it was BT's - the communication was to BT and BT provided the - - -

HIS HONOUR: It was to BT Australia (HK) Limited, I think.

MR NICHOLAS: I am told both, your Honour.

HIS HONOUR: I see. Well, are BT Financial Group Limited and BT Australia (HK) Limited applicants in these proceedings?

MR NICHOLAS: Yes, they are and I indicated my appearance for the applicants plural, your Honour.

HIS HONOUR: Yes. But, as I understand it, BT Financial Group and BT Australia (HK) Limited have dropped out of the proceedings for which the trial is fixed on 5 March.

MR NICHOLAS: Yes, that is so.

HIS HONOUR: They have settled as between themselves and the South Australian Government Financing Authority?

MR NICHOLAS: Yes, and they did so upon terms which are incorporated in a deed and a part of that required the disclosure by BT to SAFA of the communications which are the subject of these proceedings. Now, your Honour, the question which really came up for consideration in this case is whether or not in the circumstances contended for the disclosure by BT to SAFA in those circumstances amounted to an imputed waiver of the privilege which was recognised to attach to the documents.

Your Honour, that is dealt with in the judgment from paragraph 24 and following. With respect, it is going to be necessary for me to spend some time on the next few paragraphs, so may I take your Honour to it. Paragraph 24, it was BNZ's submissions - and this seemed to be the basis of their case for production:

That the interests of fairness require an implied waiver on the part of the BT companies in the case of the two statements of Mr Bell. It grounds that submission on the fact that the BT companies have provided the documents to SAFA knowing that SAFA had already in 1998 expressly waived privilege in respect of both a statement made by Bell in December 1998 and a draft affidavit to be sworn by him. The circumstances in which that waiver occurred in 1998 are these.

And I need not trouble your Honour, I think, with the detail of that, except to remind your Honour at the foot of the page are each of the - - -

HIS HONOUR: There was discovery, and a non-party discovery, as I understand it, because the BT interests had already dropped out and they produced the 1998 statement of Mr Bell plus the other documents.

MR NICHOLAS: They produced those three documents.

HIS HONOUR: And there was no claim for privilege in respect of them at that time?

MR NICHOLAS: No, that is so.

HIS HONOUR: And access has been had to that material?

MR NICHOLAS: Yes, and there was no qualification about that at all. As his Honour notes at the top of page 8:

All of these documents have been produced to BNZ and BNZ hold copies. No claim for privilege was made in respect of any one of them.

The principles relating to fairness have been mentioned already. Fairness requires that an opposing party is not misled. Thus, as a general rule, it would not be fair to allow privilege to be waived with respect to a portion of a document or a conversation without requiring disclosure of the rest of it, at least if the document or conversation dealt with one subject matter -

and cases are referred to and the passage from Lord Justice Mustill in the Great Lakes Case:

"... where a party chooses to deploy evidence which would otherwise be privileged the court and the opposition must, in relation to the issue in question, be given the opportunity to satisfy themselves that they have the whole of the material and not merely a fragment."

If I can come to paragraph 27, your Honour:

The fact that SAFA waived privilege in respect of the statement made by Mr Bell in December 1998 and in the draft affidavit for swearing by him dated 19 December 1998 . . . "the 1998 statements"), means that BNZ has been informed of Mr Bell's then recollection of the events in 1985. It is possible that BNZ will be misled, and thereby unfairness occur, if it is provided with the first statement of Mr Bell but does not receive the two later statements.

And we have submissions to make about this approach in due course, your Honour.

The absence of the two later statements might result in quite an inaccurate perception of the tenor of the evidence he might give or of particular facts to which he refers. The possibility of differences between the 1998 statements and the later statement is perhaps greater, given the fact that Mr Bell is being asked to recall events which, in 1998, had occurred 13 years earlier. The later statement may modify the earlier 1998 statements. I acknowledge that, if Mr Bell's evidence departed from his 1998 statements, he could be cross-examined on his prior inconsistent statement and his actual statement might be tendered pursuant to s 28 of the Evidence Act 1929 . However, the question whether privilege in the later statements is waived by operation of law should not, I think, be determined by forensic tactics or strategy but by the principles of fairness which apply in this context. Another possibility is that Mr Bell's later statements may include facts concerning the telephone conversation on 24 July 1985 and the events flowing from it which are not disclosed in the earlier statement and which might be detrimental to the case of SAFA. Those facts might never be capable of being ascertained by BNZ. That will give rise to even greater unfairness.

When determining whether the later two statements should be produced, I do not regard all of the statements as if they were one document. Plainly, if they were, the later statement would have to be produced. Although they are not one document, to the extent that they represent Bell's recollection of the relevant events, they all relate to the same issue. Because privilege has been waived in respect of the 1998 statements, fairness requires that the later statements are also made available to BNZ so that it can ascertain whether Bell's recollection remains the same or is greater or less or is otherwise qualified. If the statements are not made available, BNZ might have a completely wrong picture of the evidence which Bell might give and thereby be misled. To adapt the already quoted remarks of Mustill J in Nea Karteria, to supply the 1998 statements but not the later statements is to provide a fragment, albeit a substantial fragment, but not the whole of the material.

And we will have submissions about that in a moment, your Honour.

For these reasons, both of the later statement should be made available to BNZ so that it is not misled and no unfairness results. However, it must be recognised that Mr Bell's latest statements may contain privileged communications quite unrelated to this litigation. In order to avoid disclosure of such privileged information, the documents should be inspected -

and, your Honour, arrangements to be made about that. If I can bring your Honour down to paragraph 31:

For all of these reasons, and primarily in order to avoid the possibility of BNZ being misled, the interests of fairness require disclosure of the latest statement made by Mr Bell subject to inspection of the document by a judicial officer before production to BNZ. As the 1998 statements extend over the whole transaction referring, among other things, to a series of connected events, it would be misleading if what might be a more complete account or an amended account is not made available. The statements are privileged communications while in the possession of the BT companies and their legal advisers. There is an implied waiver because the BT companies, knowing that BNZ have a copy of the 1998 statements of Mr Bell, provided SAFA with copies of his later statements.

I do not think I need read to your Honour the remaining passages of the judgment for the purposes of our submissions. He does, of course, in those following paragraphs deal with each of the later documents and - - -

HIS HONOUR: His Honour did not have the document before him, did he? Did he have the second statement of Mr Bell?

MR NICHOLAS: Yes, I am told he did. Perhaps I should take your Honour to it. In paragraph 33 - - -

HIS HONOUR: I see, yes, and, in fact, he revised his reasons, did he not, because some part of his original reasons might have disclosed information?

MR NICHOLAS: That is so, the content of this deed, yes.

HIS HONOUR: Yes.

MR NICHOLAS: Your Honour, he notes at the top of page 10 in a summary way the contents of the first set of documents, then at paragraph 34:

The second statement was obtained on 16 and 17 March. Broadly speaking, the statement covers the same ground as the earlier statement and affidavit. However, it contains a great deal more detail. In addition, it gives details of his prior experience, the structure of the relevant BT companies, the legal advisers to the BT companies and his own relationship with BT. He also sets out his understanding of the structure of SAFA and BNZ. I do not think that this additional material is privileged. Some of it is simply more detail of what was contained in his December 1998 statement on the structure of the BT companies and of BNZ. If it is privileged, it can be masked. I will hear the parties on that issue. As for the balance, it covers the same subject matter and fairness requires that it be produced for inspection.

And, your Honour, in 35 to the same effect. He concludes by stating:

It is a more detailed account but, as it covers a matter which is critical to the issues in this action which is also dealt with in the first statement, the interests of fairness requires disclosure. That conclusion is reinforced by the fact that the statement made on 16 and 17 March 200 bears an endorsement

"Bell subsequently requested we amend it and there was a subsequent ph (sic) call on 18 April 2000 incorporated in this statement".

And his Honour concludes that the order should be made. Your Honour, I will come back to those concluding paragraphs in a moment, if I may, but what I was wishing to briefly put to the Court is the submission that we have satisfied the principles which we must in order to obtain a stay. I wanted to remind your Honour of what your Honour said in Ampolex and to indicate that we have satisfied that and then to spend the bulk of my submissions on dealing with the proposition that we have substantial prospects of success on the special leave application. Does your Honour wish to be reminded of - - -

HIS HONOUR: I do, indeed.

MR NICHOLAS: Can I hand up to your Honour then a copy of - - -

HIS HONOUR: I have it in this compilation which has been supplied by one of the parties - this is the Bank. They have supplied a compilation. It is case No 1.

MR NICHOLAS: It is, indeed.

HIS HONOUR: Normally in these matters Burgundy Royale is case No 1. I am proud to see that Ampolex has risen, but it may just be alphabetical.

MR NICHOLAS: No, no, your Honour. The clarity with which the principles are set out have become a very important guide for us practitioners.

HIS HONOUR: Thank you very much.

MR NICHOLAS: Your Honour, those are set out at page 31. Your Honour begins the statement of the principles - - -

MS HARRIS: Is that the ALR version or - - -

MR NICHOLAS: I am sorry, I am reading from the Australian Law Reports.

HIS HONOUR: I have the Australian Law Journal Report, 70 ALJR 603 at 605.

MR NICHOLAS: Right, thank you, your Honour. I have a copy of that and your Honour has that. Does your Honour wish me to read the passage?

HIS HONOUR: No, I am just going quickly through them now to remind myself. They are pretty familiar. Yes. There are some similarities between that case and this, are there not?

MR NICHOLAS: Yes, there are.

HIS HONOUR: Some interlocutory appeal and the efforts to get the stay from the court below have been exhausted and it is said that this is an extraordinary jurisdiction, especially, one might say, in interlocutory matters involving questions of practice and procedure, and I still do not have the reasons of the Full Court, which is understandable in the circumstances, which were reserved, and I have to anticipate what they might be and you have also sought special leave to appeal from Justice Debelle's orders and reasons, is that correct?

MR NICHOLAS: That is so, your Honour.

HIS HONOUR: So that I think I have to act on the basis that the Full Court must have either agreed with what Justice Debelle said or did not consider that it should exercise its discretion to disturb it, having regard to what it thought was an absence of any relevant error of principle.

MR NICHOLAS: One must assume that, your Honour.

HIS HONOUR: So, I have to say to you, Mr Nicholas, my first reaction and to some extent, to be completely candid, special leave matters are in part questions of reaction and impression, and just reading the material it does not seem to me the type of matter which would attract special leave, partly because it is interlocutory and partly because it is dealing with a sort of question which is expressed in such vague terms of "fairness" that minds can differ can on such issues, as Goldberg v Ng really illustrates.

MR NICHOLAS: Your Honour, we are certainly alive, perhaps if I may respectfully put it, a superficial reaction to the situation in a case like that and I want to spend a moment obviously in demonstrating to your Honour, as I must, whether there are substantial prospects that special leave be granted, the point that you deal with in No 5. Your Honour, I just wanted to quickly go to the other matters which we say we have satisfied. For example, point No 7 in your Honour's judgment - that appears at, I think, page 606 of the report in the right-hand column:

In the present case, a stay or an order equivalent to a stay would, in my opinion, be needed, to preserve the utility of the subject matter of the litigation, namely the confidentiality -

et cetera. Does your Honour have that?

HIS HONOUR: Yes, I have it.

MR NICHOLAS: We would say that has been satisfied. As your Honour has already observed, point 6 going back to the court below and we remind your Honour, with respect, of what your Honour had to say in point 9 as to the importance of the law of legal professional privilege and your Honour concludes by noting that:

Generally speaking, I consider that the trend of recent authority supports the submission that legal professional privilege constitutes an important civic right to be defended, as such, by the law.

Now, the reason why I remind your Honour of that is that it is readily observed that these are matters, on one view of things, going to practice and procedure, but the cases which have come before this Court usually arise in the same way - Mann v Carnell was another, I think Maurice was another, the other Ampolex Case that was dealt with in this Court - by the very nature of the questions that are thrown up, important underlying principles are to be considered and it is usually in a context just as we have in this case, with respect.

Your Honour, in paragraph 11 deals with the issue of "balance of convenience". I have obviously to deal with this. We would say that when one goes to the history as set out in Ms O'Toole's affidavit, this emerges: BNZ sought orders against BT for production of the documents on 21 September 2001. On 24 September Justice Debelle fixed the hearing of this matter for 4 March 2002. The hearing of the application before him took place on 30 October. However, judgment was not given until 18 January 2002 and the orders were, in fact, made and entered on 29 January of this year. Then, as your Honour is aware, there was the applications made to the Full Court.

HIS HONOUR: Yes, there is no doubt that your client has acted with remarkable speed and done everything possible. This is not a case that falls within the class of matters where there was something more that your client could have done to get the stay. You have been defending the privilege.

MR NICHOLAS: We have. What we are saying, your Honour, in that context, to deal with the question of inconvenience, we would say obviously there is inconvenience in postponing the hearing date.

HIS HONOUR: Now that I know that it is eight weeks, which I do not think was revealed on the papers that I had, the inconvenience looms even larger than I thought because to get an eight-week slot in a busy Supreme Court would be very difficult.

MR NICHOLAS: But when one is coming to deal with balance - - -

HIS HONOUR: Would you accept that if I were to grant a stay that the likelihood would be that that would cause the matter to be adjourned?

MR NICHOLAS: We do. We recognise that, your Honour.

HIS HONOUR: Because you could not really expect, whilst this issue remains outstanding, for the Bank to be forced onto its defence without exhausting the possibilities of having all of the material with which to cross-examine Mr Bell.

MR NICHOLAS: We accept that.

HIS HONOUR: Who would be calling Mr Bell? He would be called in your case, I suppose.

MR NICHOLAS: Our expectation is that we would be calling him.

HIS HONOUR: I am not trying to embarrass you or fix you with that. That will be a decision taken by those who have the responsibility of the trial, but that would seem to be the natural thing.

MR NICHOLAS: It may be expected that that will happen. So, your Honour, we recognise that obviously there is an inconvenience. However, we say this, that the inconvenience will be the postponement of the commencement of the trial pending determination of this question. Our submission is that as a consequence there cannot really be said, in a substantial sense, to be any prejudice to any party by reason of the delay. It is obviously readily recognised it will upset the timetable of the Supreme Court, and that is an important factor. However, it is a situation not of the making of either of the parties, we would submit, and arises, with respect to him, from the period of time during which his Honour was considering the question and before he published reasons and made his orders. Now, it is a commercial matter. It is a substantial commercial matter. But they - - -

HIS HONOUR: What is the stake?

MR NICHOLAS: I think it is about $15 million, your Honour. We are the party out of pocket by any delay, of course. SAFA, that is, the current applicant seeking recovery. Our submission is, as your Honour appreciates, that recognising the inconvenience, the nature of it needs to be understood and on balance we would submit that that should not outweigh the importance of a stay pending the determination by this Court of the questions which arise.

So, your Honour, this is what brings us to the question of whether or not there is a substantial prospect of special leave being granted, because we submit that we have satisfied the various other requirements which stem from Burgundy Royale and which your Honour spelt out so clearly in Ampolex. Your Honour, can I now deal with the special leave points?

HIS HONOUR: Yes.

MR NICHOLAS: By starting off this way: our submission is that his Honour was in error in understanding and applying the tests in Mann v Carnell [1999] HCA 66; 201 CLR 1 and Attorney-General v Maurice [1986] HCA 80; 161 CLR 475. The relevant tests, if I can take your Honour firstly to Mann v Carnell. Can I hand up to your Honour a copy or does your Honour - I think your Honour has it in that collection.

HIS HONOUR: I think this might also be in this collection.

MR NICHOLAS: Tab 28 I am told, your Honour. I have a copy if your Honour would find it easier.

HIS HONOUR: I have it in this collection, so I will not trouble you. Yes, I have that.

MR NICHOLAS: Can I take your Honour on the way through to remind your Honour of the - it is perhaps fairly trite. On page 8 paragraph 16 the Court recognises, and what obviously is the situation in all cases:

The outcome does not turn upon the particular manner in which the content of the privileged communications was disclosed to Mr Moore. The privilege attached to the communications, not to the pieces of paper on which they were written. What Mr Moore was shown were copies, but they were relevantly copies of privileged communications. The question is whether the disclosure to Mr Moore of the communications resulted in the loss of the privilege.

And part of our submission will be that his Honour clearly lost sight of the fact that the matter for consideration is the communication and the considerations which go to that. Your Honour, at paragraph 19 on page 10 a general statement is made that:

The circumstances in which legal professional privilege my apply are not limited to the adducing of evidence in the course of a hearing in a court. The privilege may be invoked, and its application may be of importance, in pre-trial proceedings such as the discovery and inspection of documents. Documents may be discoverable even though they may not be admissible in evidence. Their importance may be, for example, that they indicate a useful line of investigation, or that they contain information which could affect the manner in which a party may decide to conduct proceedings.

And, once again, of course, it is recognised that there is no contest about the propriety of the claim for privilege in relation to the subject documents. At page 13, your Honour, is stated the test. I want to go to that first and then read it in its context. On the last few lines on page 13 their Honours say this:

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 maintenance of the confidentiality; not some overriding principle of fairness operating at large.

In the preceding paragraphs, your Honour, from the top of the page, their Honours discuss how that question of inconsistency and its effect is considered. Can I take your Honour to paragraph 28:

At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.

Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question ,it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege.

I need not read the example from Benecke, but can I take your Honour over the page, where in paragraph 30 - and perhaps really the passage cited there from Chief Justice Jordan in Thomason:

"The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client."

If I can now take your Honour back to Maurice [1986] HCA 80; 161 CLR 475 , where an illustration of the test and its application is considered and we suggest helpfully, your Honour, when dealing with this issue. Does your Honour have that?

HIS HONOUR: Yes. It is No 23 in the collection.

MR NICHOLAS: Thank you.

HIS HONOUR: Yes.

MR NICHOLAS: Your Honour, at page 481, from the paragraph at the top of the page:

There was of course no express waiver in the present case and there is nothing to suggest that the claimants had any actual intention to waive privilege in the source documents. The principle applicable in these circumstances seems to me to be well stated in Wigmore:

"In deciding it, regard must be had to the double elements that are predicated in every waiver, ie, not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final."

The decisions in which this question has been considered seem to me to be particular applications of the rule that in a case where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it -

and, your Honour, we say these are matters which trigger off sufficient general interest as to warrant the grant we are seeking -

is privileged from production. Thus it has been held that the privilege in respect of a document is not waived by the mere reference to that documents in pleadings.

Then at the foot of the page, your Honour, after the references:

These cases may be explained by saying that it is not unfair or misleading to refer to a document in a pleading or affidavit which is not put into evidence but that if the document is set out in full the privilege is waived. A fortiori, of course, privilege in respect of materials used in drawing a pleading or an affidavit and not referred to therein, would not lose their privilege because they had been used in that way.

HIS HONOUR: Could I just interrupt to clarify a factual point. When the original statements of Mr Bell were discovered, was that in the list of documents discovered by your client or by the BT interests when they were parties to the cause?

MR NICHOLAS: By SAFA, your Honour.

HIS HONOUR: So it was by SAFA and the sequence of events was that pursuant to the settlement between SAFA and the BT interests BT supplied Mr Bell's later statements to SAFA?

MR NICHOLAS: That is correct.

HIS HONOUR: So that the party that originally discovered Mr Bell's statements is now in possession of an elaboration of Mr Bell's statements which it is trying to withhold from discovery?

MR NICHOLAS: That is a summary of the situation, your Honour, but we would be saying that they are in possession of a subsequent set of communications which - - -

HIS HONOUR: But according to Justice Debelle some of them, at least, elaborate and they are in more detail than the first set.

MR NICHOLAS: Certainly, and that is part of our concern, your Honour, because one can perhaps jump ahead to what I am proposing to put in a moment, namely Mr Justice Debelle seems to decide the question of associated material on the basis of a commonality of information and we say he is fundamentally wrong in approaching it that way. If one goes to the 1998 documents, there is - - -

HIS HONOUR: These are the ones that were discovered?

MR NICHOLAS: Yes. They were privileged but waived and there are out in the open. Now, in a sense - perhaps if I use the term they stand alone. In other words, they make again, obviously enough, no reference to what the subsequent documents might refer to. There is no disclosure of contents and - - -

HIS HONOUR: They were prepared two years earlier.

MR NICHOLAS: Of course. Now, there is no issue of - and it could never be - conduct concerning those documents which had been disclosed, plainly. Now one comes to the subsequent documents. They plainly record subsequent communications.

HIS HONOUR: But about the events of 1985.

MR NICHOLAS: Yes, the information may be common but nevertheless - - -

HIS HONOUR: And elaborating the earlier documents.

MR NICHOLAS: Yes, but, your Honour, the privilege attaches to the occasion of the communication rather than the documents themselves, plainly enough. So that what we are saying, your Honour, is - - -

HIS HONOUR: But the communication, according to Justice Debelle's brief description of it, is an elaboration of the material that is contained in the discovered documents of 1998.

MR NICHOLAS: Yes, he does say that but - - -

HIS HONOUR: The practical thing that is concerning me is that, if you succeed, if your client's succeeds in excluding access to these communications, then the result is that the case runs on part only of the statements of Mr Bell that he has made and that could be completely misleading, if there is material in the statements which cast doubt on, elaborates, or modifies, or varies, or amends, what was said earlier.

MR NICHOLAS: We say, your Honour, that that consideration is entirely irrelevant to questions as to privilege and the requirement by operation of law that that privilege has been waived. One tests it this way, with respect. The earlier documents record a certain parcel of information. Rhetorically, can it be said that by reason of the disclosure of those communications on a particular subject matter then subsequent communications with the solicitor, in circumstances which are privileged, then the privilege thereafter is lost because of the commonality of information? That is, we would say, the important matter which his Honour simply did not deal with.

HIS HONOUR: Except that in this case, as I understand it, these are statements, first of all, by Mr Bell for your client's solicitor which were discovered and then subsequently for his own camp and then, pursuant to the settlement handed into your camp and therefore available to you in the litigation, though you were a stranger to the privilege when made, but not available to the other party to the litigation. One's impression is - and I think this is Justice Debelle's impression too - that is really not fair.

MR NICHOLAS: But, your Honour, we say, with respect, that he really misses what the authorities are looking at in dealing with any questions of fairness. For example, in the cases that are dealt with and considered in Maurice - and I was going to take your Honour to them - on the next page, at page 482 - let me give it by way of example, your Honour. I will come back to deal more specifically with the question your Honour raised. At the foot of page 481 it says:

It is not difficult to see that where a document -

a document -

deals with a single subject-matter it would be unfair to allow a party to use part of the document and claim privilege as to the remainder. So it has been held that where cross-examining counsel asked a witness whether he had said certain things in a written statement, examining counsel was entitled to require the whole statement to be put into evidence. Similarly, where a party disclosed a document which contained part only of a memorandum which dealt with a single subject-matter, and then read the document to the judge in the course of opening the case, it was held that privilege was waived as to the whole memorandum.

HIS HONOUR: Can I say I understand the point you are making and I take the point, which is an effective point, that just because you waive privilege at one point does not mean that forever after you have waived every element of communication privilege thereafter. But where, as in this case, you have a sequence of events and a stranger to the privilege seeking now to get the advantage of the privileged communication, you are at the cusp of the principle to be applied and the judge with the responsibility of deciding it has decided it one way. The Full Court has refused leave to appeal from that. It does not seem to me that that is the sort of matter that this Court would be concerned to become involved in. It is just simply a factual extension of the settled principle. It is a matter of seeing how the principle applies in the rather peculiar of this case. I think Justice Debelle begins his reasons by saying these are "unusual circumstances".

MR NICHOLAS: But, your Honour, what Mr Justice Debelle does not really do, as we read his judgment from paragraph 26 and following, he does not really identify the conduct which is said to be inconsistent. You see, your Honour, as we understand the statement of the test, both in Mann and in Maurice, one needs to identify conduct in relation to the privileged document - "document" is a wrong word - the privileged communication which can be said to be somehow inconsistent with the position taken - the obvious illustration is where part only is disclosed and so on. Before one gets to concepts of fairness or unfairness, one obviously needs to identify conduct and come to a conclusion that it is somehow or other inconsistent with the position taken before. That simply is not identified in this case.

The other thing that we would submit, with respect, is that when one is dealing with the concept of fairness or unfairness in the way in which the authorities do, with regard to whether or not the material in respect of which a claim is sought to be maintained really bears upon the understanding or appreciation of what has been - or qualifies what has been, in fact, disclosed. That is why the authorities seem to make it fairly plain that if one is talking about a single document, then, plainly enough, such of it as requires to be disclosed in order to get a fair and non-misleading understanding of what has been disclosed ought to - there will be an imputed waiver.

Then it is recognised that there may be associated material, but the associated material will be material, quite clearly, one might think, which would have some bearing on the impression that the party having the open document would gain from it absent that associated material. Your Honour, what emerges, we would submit, from paragraph 27 and following of his Honour's judgment - perhaps at paragraph 28 he points it out, if I can take your Honour to it. His Honour says this:

When determining whether the later two statements should be produced, I do not regard all of the statements as if they were one document. Plainly, if they were, the later statement would have to be produced. Although they are not one document, to the extent that they represent Bell's recollection of the relevant events, they all relate to the same issue.

So our submission, with respect, your Honour, is really what he is saying, that because the content of the communication relates to the same issue, that is to say the information is common, then the communication should be treated as material associated with the earlier disclosed communication, in other words, as if it is but a fragment of the same material - to use the expression in another one of the cases - and as a consequence the privilege is lost. Your Honour, we would submit that that simply cannot be a correct understanding of what these cases make plain to be the approach of a court in dealing with the question of what one ought to be looking at.

We would go on to submit this, that if his Honour is wrong in holding that the later communications are associated with the earlier, in the way dealt with in the cases, then it throws up the question again, "What is the conduct concerning the later communications which abuse the privilege?". The only conduct referred to, your Honour, is BT's disclosure to SAFA in paragraph 31. But such conduct, plainly, is consistent with preservation of the privilege attaching to those communications, the later communications, and thus we would put that there is no question of inconsistency in relation to those communications arise, so one never gets to a question of fairness at all.

As perhaps is already put, as to the conduct concerning the subject communications, plainly enough, they have no connection with, nor are part of, the communications made two years earlier. Once again, at the risk of repetition, the fact that the information may relate to the same subject is irrelevant to the privilege which attaches to each particular communication. Thus we submit, your Honour, that the correct approach is to recognise that the conduct for inquiry as to whether or not there is inconsistency in respect of a claim for privilege is the conduct as to the specific communication, which brings you back, in this case, we say, to the later documents, the later communications.

As already put, no question arises in relation to the 1998 documents. The whole of that material has been disclosed. No questions of fairness or misleading arises in relation to that. The conduct in relation to the 2000 communications requires separate consideration. So we say that the conduct that his Honour refers to in paragraph 31, which founded BNZ's claim, namely - and I am reading the last sentence:

There is an implied waiver because the BT companies, knowing that BNZ have a copy of the 1998 statements of Mr Bell, provided SAFA with copies of his later statements.

Now, we simply put that that could be understood as no more than a common interest communication which is incapable of amounting to a waiver and wholly irrelevant to the kind of conduct to be considered in order to decide a question of inconsistency from partial disclosure.

Your Honour, we would also submit this, that it is plain that the Full Court may be taken to have upheld his Honour. The question of general - - -

HIS HONOUR: We just do not know. We do not have their reasons.

MR NICHOLAS: No, we do not, but that is the only - - -

HIS HONOUR: They have upheld his orders.

MR NICHOLAS: They have upheld his orders.

HIS HONOUR: Maybe for different reasons. But I think it is probably fair to assume for the moment that they have accepted - - -

MR NICHOLAS: That that is the consequence.

HIS HONOUR: - - - that there is no material error of principle in what Justice Debelle has said.

MR NICHOLAS: We say the consequence of that, your Honour, that if we are right in how we put the trial judge's errors, then one is left with what we submit is a dangerous precedent which undermines well-established principles in this area.

HIS HONOUR: But in rather particular circumstances.

MR NICHOLAS: Your Honour, the difficulty is that this Court - what has happened in the Full Court, the effect of which is to uphold his Honour, on any view, goes beyond the decided cases by a substantial degree. What it really means is from the 1998 disclosure it flows that all communications on the same subject matter - - -

HIS HONOUR: Not quite. It means that the communications by the witness who is, by all accounts, a crucial witness, who is giving statements 15 years later as to what happened in 1985, as now elaborated by statements two years later and supplied to a stranger to the privilege, who has already revealed the earlier statements, will pick up, for reasons of fairness, the imputed waiver that was involved in the statement because it is an elaboration of what has already been waived.

MR NICHOLAS: Your Honour, one can see though, we would suggest, the difficulty then that will face a practitioner or, indeed, a person seeking advice, that where does one end the exercise, so that the risk of the loss of confidentiality will arise whenever they meet to deal with the same information. With the greatest respect, we would submit that that consequence is one simply never contemplated in the cases and is very difficult to accept as being one consistent with the maintenance of important law relating to privilege. That is the danger, we would say, because the Full Court's judgment will stand as an authority and will be used, we would say, as a basis for extending claims that privilege has been lost, albeit unwittingly, by reason of a mere commonality of subject matter.

Your Honour, we would submit that that just simply offends the statements in the cases to the effect that, recognising the importance of the privilege and its underlying rationale for it, that it will not be cut down lightly. So one has a situation now where commonality of information has been held to bring about that result with no temporal limits to it at all. We would submit to your Honour that that is a situation which this Court would be concerned to look at and to clarify.

It seems to us, with respect, that what requires this Court to clarify are matters which go to determining whether or not material can be properly regarded as associated material with disclosed material so that a claim for privilege in respect of it could be regarded as waived and no longer confidentiality applying. There is that. There are matters as to the approach of fairness and the criteria for it, remembering that the principles of fairness are there not operating as some overriding consideration. That is what the majority of this Court said in Mann.

One could rhetorically ask, of course, in the circumstances of this case, is what is the issue of fairness in any event in maintaining the privilege over these subsequent communications? One would have thought that the situation arises in every case in which a witness' testimony is to be challenged. Your Honour, one can imagine in this case, if Mr Bell is called and he gives evidence which is in some way inconsistent with the 1998 material, it is difficult to imagine that he would not face some testing by way of seeking explanations and clarification and variations, if there be variations. So, your Honour, it really is difficult to see how - - -

HIS HONOUR: Justice Debelle said there was a provision in the Evidence Act of South Australia whereby, in the event of it being a statement inconsistent with subsequent oral evidence, that the statement could be admitted itself as evidence.

MR NICHOLAS: Yes, but, your Honour, he is dealing with, somehow or other it will be unfair, in the sense, no doubt, of it being materially unfair, some unfair impediment to the proper conduct of BNZ's case if the privilege was maintained. Our submission to your Honour is it is difficult to see how the parties could either be misled or deemed to be operating from some unfair handicap by reason of the non-disclosure of the subsequent material. In the conduct of any piece of litigation, your Honour, it is a day-to-day occurrence and the considerations of fairness and misleading, as the cases deal with them in the examples cited, as put before, go to the illumination of, and the proper illumination of, the material that has been disclosed. That is not what we are concerned with here.

So, in our submission, the criteria for persuading your Honour, dealing with an application for a stay, have been made out, in our submission, that the questions raised do indicate there are substantial prospects for success in the special leave application and that the other requirements for the grant of a stay have been satisfied and that the consequences of a refusal of a stay, in the circumstances where the consequences of the conclusions of his Honour, endorsed by the Full Court, have a much wider effect by reason of the precedent effect that decisions at this level will necessarily have if left to stand. That would be a matter, your Honour, which, as I put before, would warrant the intervention of this Court.

HIS HONOUR: Having taken the objection to the discovery of the document, if you failed in this application and the document was discovered and the trial went ahead on that footing, then you would, at least in the theory of the law, have the right in an appeal against the outcome of the case, the final judgment, to raise as a ground of appeal all interlocutory rulings that have been made contrary to your clients' interests and at that time, if it was still a live issue and if it had resulted in a relevant miscarriage, then you could still advance the point that you are seeking to press now but with the advantage of the elaborated evidence and outcome of the trial.

MR NICHOLAS: In theory, with respect, that must be right. However, as your Honour, to use your Honour's phrase in Ampolex, the genie would be out of the bottle, and that is the problem and even on an appeal - - -

HIS HONOUR: Yes, it is very hard once that happens and I think it does put you at at least this disadvantage, that the privilege is lost and if the privilege is an important thing, as the law constantly says, it ought not to be lost except on proper legal grounds. As well as that you would, I think, have to prove that the ruling had led to a miscarriage as distinct from simply that an error had been made in an interlocutory ruling. Your burden is a little heavier.

MR NICHOLAS: Sure, and, your Honour, dealing with the practicalities of it all, of course, if this material is allowed out, then the proceedings are obviously going to be conducted in open court. Assume we could establish some miscarriage on an appeal and a new trial was ordered on relevant grounds, rhetorically, would it matter? I mean, there would be no, if you like - the confidence had gone.

HIS HONOUR: That is true, but one of the reasons for the restraint of appellate courts in interfering in interlocutory rulings is that often the problem disappears. For example, the cross-examiner may not, even with the second statement, for whatever contains, be able to lay a glove on Mr Bell. Mr Bell may come up to his first proof. He may be a magnificent witness in your cause and you may go on to win the case and the judge says he believed every word Mr Bell said and Abalos and all the others will stand in the way of any appellate court disturbing that and you walk out in triumph and the High Court of Australia has not been troubled.

I mean, I have to tell you, Mr Nicholas, when I first went to the Court of Appeal I was much more enthusiastic for interlocutory appeals than I was by the end of my term there because Justice Mahoney had really been vindicated. Often they led to interruptions and they became time consuming, costly and irrelevant to the ultimate cause.

MR NICHOLAS: That is readily recognised, your Honour. Could I put my final submission, at the risk of repeating it. The fact that it is an interlocutory matter of this kind has not been an obstacle of getting to the court. Principal cases have arisen in the same way. The matter of general concern, your Honour, flowing from this must be that subsequent communications touching on the same subject matter in a real way are ones in respect of which there is a real danger that the confidence could be maintained.

Now, that must be a very real problem and there is no temporal limits identified to it and where there is no clarification of the criteria which enables it to be said that the subsequent material is relevantly associated with the disclosed material - - -

HIS HONOUR: Except that Justice Debelle points out that there is a time sequence: it is the time sequence of the litigation, it is a space of two years and it is in circumstances where one statement was made for this very litigation and then within two years another statement was made for another party for this litigation and that document, pursuant to a settlement between those parties, was handed over, one to the other, and whilst you were happy to discover your own document, you were not happy to discover a document which is now your document. So it is a collection of facts. It is not as if this principle of fairness that Justice Debelle has purported to apply is in a vacuum. It is in the circumstances, rather peculiar, of this particular case.

MR NICHOLAS: Well, those are our submissions, your Honour.

HIS HONOUR: There is just one other matter. I have been informed since the case began that the first opportunity for a special leave hearing would be 19 April by video link from Canberra and the other would be in August, on 12 August. Now, does that affect in any way the submissions that you have just put to me?

MR NICHOLAS: No, your Honour. We have to face up to the fact that, assume you granted us a special leave tomorrow, then the next step, of course, will be for the Court to - we get a stay pending the determination of the appeal, no doubt, assuming we are successful, and that raises the question of when this Court would be able to deal with that.

HIS HONOUR: Yes. The thought that occurred to me was - and it may not be feasible really - that the trial could be conducted on a basis that Mr Bell gave his evidence later, but as everything in the rectification is going to turn on what was said by Mr Bell, and he being, as it were, the neutral witness, I just do not see how the trial could be conducted until 19 April without Mr Bell's evidence. It has to be out front.

MR NICHOLAS: I think those who are very much more involved in it than I am, your Honour - we face up to that. That is the reality of the matter.

HIS HONOUR: Yes, thank you.

MR NICHOLAS: Those are our submissions, your Honour.

HIS HONOUR: Thank you, Mr Nicholas.

MS HARRIS: Can I inquire whether your Honour has a had chance to have a brief look at our written submissions?

HIS HONOUR: I have, indeed, and I am grateful for that and there is no need for you to repeat what has been said in those written submissions.

MS HARRIS: Can I then just highlight for your Honour perhaps the main points that we rely on and also address a number of matters that have been raised by my learned friend.

HIS HONOUR: I think the strength of Mr Nicholas' application is he says if he does not get the stay, effectively the battle is lost on this point because the case can proceed down to 19 April but by that time the documents will have been discovered and the cat will be out of the bag, to use another metaphor, and Mr Bell will have been cross-examined and either will it have been devastating or it will proved irrelevant, so that he loses. I am effectively deciding, therefore, his clients' right to have the Full Court of this Court pass on the special leave application. That is point No 1.

Point No 2, he says that Justice Debelle, without identifying the linkages between the first and the second statements of Mr Bell, has cast the net too widely and thereby diminished the valuable privilege which the law upholds.

MS HARRIS: Can I just, your Honour, on those two matters perhaps to start with - - -

HIS HONOUR: Yes.

MS HARRIS: In relation to the first matter, I think it is your Honour's expression, the genie is out of the bottle, and we acknowledge that. Certainly there are residual rights of appeal that could be exercised, but we appreciate that this is at the end of the spectrum - closer to the end of the spectrum where rights of appeal would effectively be rendered nugatory if a stay were not granted. It is close to the end of that spectrum. It is not a Tait v The Queen case. It is not a Gerah Imports' Case where it is impossible to restore the parties to their former position, but it is close to that, but that is - - -

HIS HONOUR: That is an argument for granting the stay really.

MS HARRIS: Well, your Honour, that is the foundation of the Court's jurisdiction and that does not dictate whether the stay should be granted.

HIS HONOUR: No, but it is a real consideration in my mind, that in a collateral proceeding, in weighing up the prospects of grant of special leave, I am effectively determining that matter, although it would normally go - the special leave application goes to a Court of two or three or even more Justices.

MS HARRIS: Your Honour, that is right, but as I say, that is a threshold consideration, as it were. That establishes the Court's jurisdiction to grant a stay, but that does not answer the question whether a stay should be granted, and that question must be answered by reference to the discretionary considerations that your Honour has heard argument on. So that, as Justice Brennan pointed out in Jennings v Burgundy:

The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject-matter of the litigation. If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises.

That is at page 683. So we would not even get to first base unless Mr Nicholas was able to satisfy your Honour of that threshold consideration.

HIS HONOUR: Sometimes stays are granted even though the case falls short of preserving the utility of the subject matter of the suit simply because it is more convenient, when you look at all the factors in the matter, to provide the stay so that the inconveniences that would otherwise be occasioned can be avoided.

MS HARRIS: Certainly that is right and, again, that indicates that the Court has taken, not a rigid, but a flexible approach to the existence of the jurisdiction. The jurisdiction to grant a stay is, of course, a large one but it depends upon there being - that the threshold test is whether there is going to be - if a stay is not granted, then either it is impossible to put the parties back they were or you cannot do it without terrible inconvenience or whatever.

Certainly in the present case, if - and there are a lot of ifs involved, your Honour - if BNZ obtains the statements and if it uses them to cross-examine Mr Bell and if that has an impact on the learned trial judge's willingness to accept Mr Bell's evidence and if his findings as to credibility have an impact on the outcome of the trial, then if all of those ifs occur, then it may be a matter which SAFA would want to raise on an appeal and it may be something that an appellate court might ultimately take into account in determining that appeal, but there are a lot of ifs along the way.

In my submission, your Honour would not assume that all of those ifs would be satisfied, that it is necessarily something that SAFA will miss out on if this stay is not granted. But in any event, in my submission, it remains the case that, as in Ampolex - and your Honour, with respect, made this very clear in the Ampolex Case that that was a threshold consideration. Certainly your Honour in that case determined that once the advice was disclosed, the privilege was lost, and your Honour was taken to that passage by my learned friend at page 606 at paragraph 7. Then your Honour, your Honour having said:

The privilege is effectively lost. It cannot be retrieved.

Your Honour went on to say:

I must therefore focus my attention, as Dawson J did in Re Duke Group and as I earlier did in Bryant v Commonwealth Bank, upon whether the applicant has shown that there is a substantial prospect that special leave to appeal will be granted to it; whether, if so, a grant of a stay or similar order would cause loss to the other resisting parties; and where the balance of convenience lies.

Does your Honour see that in paragraph 7?

HIS HONOUR: Yes.

MS HARRIS: So that effectively, your Honour, we are in the same situation here. The second matter that your Honour has put to me relates to the - - -

HIS HONOUR: But in Ampolex the party had not sought leave from the New South Wales Court of Appeal, I think; is that correct? So they had not really exhausted all of their remedies in the court below. It was a very urgent application. But is that correct or not?

MS HARRIS: No, your Honour. They had been to - and that is one other matter I wanted to point out.

HIS HONOUR: It is on page 604. It says:

However, he ordered that access to the documents in the envelope be stayed pending an application to the New South Wales Court of Appeal which was foreshadowed . . .

By majority, the Court of Appeal ordered that, until 4 pm this day, the documents should remain in the sealed envelope, inaccessible -

until order of the High Court. So it looks as though something was done in the Court of Appeal anyway.

MS HARRIS: It does. If your Honour were to look at paragraph 8 on page 606, your Honour said:

It is unnecessary for me to determine whether the decision of Rolfe J effectively granting access to the legal opinions was an "order" giving rise to a right to apply for leave to appeal to the New South Wales Court of Appeal. That Court was prepared to assume, despite some contrary authority of its own, that it was and to deal with the matter on its merits. I will also proceed in that way.

HIS HONOUR: So it does look as though they dealt with it. I do not think anybody comes up here now, after Justice Brennan's judgment in Burgundy Royale, without having first come to the court in which the proceedings are pending.

MS HARRIS: Well, that is right. I mean, there are two applications before the Court of Appeal. The first was an application for leave to appeal, which was refused, and then there was an application for a stay, which was also refused, and that is the why the matter came on before your Honour. That is the position here also, that - - -

HIS HONOUR: Except that here a short stay was granted by the Full Court.

MS HARRIS: Indeed, and I believe actually an interim stay was granted in Ampolex as well to allow the matter to come on expeditiously before your Honour. So I think factually speaking they are very similar. Of course, the difference, I guess, between this case and Ampolex is that in the present case the applicant would seek special leave to appeal from both the order of the Full Court refusing leave to appeal and the order of the single judge, Justice Debelle, but otherwise it is reasonably similar factually speaking. The second matter that your Honour - - -

HIS HONOUR: You make some point in your written submissions about the fact that there is an application from the Full Court but that the only criticism and ground for special leave are founded on the reasons of Justice Debelle, but I did not think there was much merit in that because what else could the applicant do at the moment? I mean, all they have is Justice Debelle's reason. The applicant does not have the Full Court's reasons. So they just have to proceed as they did, it seems to me.

MS HARRIS: Well, nevertheless, in order to assess the prospects of them obtaining special leave to appeal they have to identify a way in which they say that the Full Court went wrong. Now, as I apprehend their submissions today, it is said that the Full Court must have gone wrong because it should have identified on the part of Justice Debelle an error of principle.

HIS HONOUR: Well, if they are right in that, that would be enough.

MS HARRIS: Well, it may be because the principles applicable to an application for leave to appeal do not simply rest on whether or not there was a potential error on the part of the trial judge and, of course, it is not up to the Full Court to determine whether there was or there was not an error on the part of the trial judge. They simply must seek to identify whether there is some reason to doubt the correctness of the trial judge's decision and, if there is, then they must consider whether there would be a substantial injustice if leave to appeal were not granted.

HIS HONOUR: I am not sure that they are the principles that a Full Court applies. It would have to consider whether or not, in the context of an interlocutory appeal concerned with a matter of practice and procedure, some error had been shown which warranted the re-examination of the matter by the court for reasons of principle or justice or both.

MS HARRIS: Your Honour, I have referred in my outline to the cases on applications for leave to appeal. It is at footnote 14. I think that is on about page 7. I am sorry, my submissions do not have - page 8, I beg your pardon. You see there I have set out the test and the authorities which establish that proposition.

HIS HONOUR: Which paragraph?

MS HARRIS: I beg your pardon, footnote 14.

HIS HONOUR: Yes.

MS HARRIS: And I have included not all of those cases, of course, but a number of those cases in your Honour's bundle, and those principles were not in dispute before the Full Court. It was common ground that they were the principles to be applied. So the question for the Full Court was whether the first instance decision was clearly wrong or at least attended by sufficient doubt to justify reconsideration on appeal. In the context of that exercise, it was relevant to consider the nature of the decision, the subject of the application, and then whether a substantial injustice would be occasioned if leave were not granted.

There is precedent for dealing with an application of this nature where the Court of Appeal's reasons are not available. I do not think they were available in Ampolex and certainly they were not available to the Full Court in Cohen v Peko-Wallsend, to which I have referred your Honour in my outline. Nevertheless their Honours there said that it was rare, indeed, for special leave to appeal to be granted in respect of a refusal by an intermediate Court of Appeal to grant leave to appeal. So that I have adverted in my outline, your Honour, to the cases that say it is only in exceptional circumstances that an interlocutory matter will be the subject - - -

HIS HONOUR: I think Mr Nicholas faces up to that but he says privilege is important; it ought not to be lost, except for good reasons of law; once waived, you will not impute waiver to every subsequent privileged communication, that is too broader a principle, which would discourage parties from getting legal advice and assistance which it is in the interests of society to uphold; and Justice Debelle has simply put a cloud of unfairness around it all and that that is not good enough and that, therefore, there is a question of drawing the line and that that is a matter that would attract a grant of special leave in this Court.

MS HARRIS: With respect, my learned friend places on Justice Debelle's decision a much greater burden than it wears. Justice Debelle did not purport to suggest that every communication on the same subject matter as the 1998 statements would lose privilege. He did not do that. Indeed, his Honour recognised, and it was common ground, that at the time the 2000 statements were brought into existence they were privileged. That is at the top of page 4 of his Honour's judgment, which is application book 5 at paragraph 14:

It is also common ground that the statements and copies of them are properly the subject of legal professional privilege.

So it was not the bringing into existence of those statements which gave rise to a waiver of privilege. His Honour went on to say that the communication of the statements per se did not give rise to an express waiver, but his Honour considered whether that conduct - and my learned friend has made a number of references in his submissions to a supposed failure on the part of Justice Debelle to identify relevant conduct on the part of the privilege holder giving rise to the waiver of privilege but that, in my submission, is precisely what his Honour did. It was the later statements would have remained privileged but for BT's conduct in giving to SAFA statements on the same subject matter as statements which had already been revealed to BNZ. That appears from paragraph 31 of his Honour's reasons.

So that there is no dangerous precedent set here. Justice Debelle made a decision on what were peculiar facts by applying established principles, principles that had been established in Maurice's Case and Mann v Carnell and affirmed in cases like Goldberg and he applied them to what is a peculiar fact situation. His Honour's decision cannot go further than that. It is only an application of principle to facts. It could not dictate the result in a case which had a different factual context.

HIS HONOUR: Yes. He says at the beginning "made in rather unusual circumstances".

MS HARRIS: That is so, your Honour, and his Honour identifies - it is not the fact that subsequent communications on the same subject matter were brought into existence. That was not the basis for his Honour's decision. The basis for his Honour's decision was that the communications on that subject matter were then in turn disclosed to one party to the litigation but not to another party to the litigation and that disclosure occurred in circumstances where BT very well knew that BNZ had been given a version of Mr Bell's evidence sometime before.

In relation to that, could I just draw your Honour's attention to what was said in Attorney-General v Maurice. It seems from my learned friend's submission that SAFA would seek to confine the principles of associative waiver to information which is part of the same original communication but would not recognise that it would extend to other communications on the same subject matter. Can I just draw your Honour's attention to the judgment of Chief Justice Gibbs where he considers that question.

HIS HONOUR: What page?

MS HARRIS: I beg your pardon, your Honour. At 482 to 483.

HIS HONOUR: Yes.

MS HARRIS: His Honour's consideration commenced at page 481 and Mr Nicholas has already read that passage to your Honour. Could I just also draw your Honour's attention to the passage starting at the middle of page 482 where his Honour addresses the question of associative waiver and refers to the remarks of Lord Justice Mustill in Nea Karteria and then to remarks of Justice Hobhouse in General Accident Corporation v Tanter. Then at the top of page 483, his Honour says:

In the United States it appears that so strict a view has not been taken. In United States v Cote it was held that a taxpayer by filing income tax returns waived privilege in the working papers used in preparing the returns. In the United States, also, the principle that there is a waiver if fairness requires it appears to be well accepted.

Then his Honour goes on to say that Lord Justice Hobhouse had taken a too narrow a view he thought in General Accident Corporation. So that his Honour there clearly contemplates that a waiver of privilege in one communication might result in a waiver of privilege on another communication on the same subject matter. In a similar vein in Justice Dawson and, your Honour, I will not read the whole passage to you but can I draw to your Honour's attention the passage starting at the bottom of 497, commencing "This is a difficult area of the law" and then going through to 498, and his Honour discusses the same cases essentially as those discussed by Chief Justice Gibbs. At the bottom of page 498 at about point 9, he says:

In the United States it has been widely held that voluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege with respect to all other such communications upon the same subject-matter -

and goes on to cite the various cases in support of that proposition. Your Honour, that must stand to reason.

As was indicated in Maurice and recognised in Mann v Carnell, in the context of associative waiver considerations of fairness will come into play and it is important that part only of material with respect to a particular subject matter not be deployed if keeping the rest of the material back would somehow mislead the other party, place it at a disadvantage or potentially mislead the court. In that regard my learned friend says you can test the veracity of his 1998 statement by cross-examining him but, in my submission, we are entitled not only to explore inconsistencies between his evidence now and his evidence in 1998, but inconsistencies between what he said in 2000 and in 1998 and what he says in evidence now and what he said in 2000.

HIS HONOUR: I think much of what you are saying to me was said in your written submissions and I do not really need you to elaborate.

MS HARRIS: I am sure that is right, your Honour. The only thing that I did not address in my written submissions is the question of loss to BNZ if a stay were granted. Now, it is accepted by my learned friend that the trial would go off and assuming that the South Australian Supreme Court were similarly minded then there would be a cost to BNZ in terms of costs thrown away and that is something that could be addressed to the Supreme Court. Of course, if the trial did not go off, then BNZ would have to run the trial without the statements and would be thereby disadvantaged. I mean, it has orders that it is entitled to the statements and, in my submission, it is entitled to the benefit of those orders prior to running the trial. Unless there is anything else, your Honour, those are my submissions.

HIS HONOUR: Thank you, Ms Harris. Anything in reply, Mr Nicholas?

MR NICHOLAS: Very briefly, your Honour. My friend, with respect, has not dealt with the matter that we raise as warranting a grant of leave that emerges from paragraph 28 of the judge's judgment where he says:

Although they are not one document, to the extent that they represent Bell's recollection of the relevant events, they all relate to the same issue.

Then he goes on to conclude that:

To adapt the already quoted remarks of Mustill J in Nea Karteria, to supply the 1998 statements but not the later statements is to provide a fragment, albeit a substantial fragment, but not the whole of the material.

What he is saying, your Honour, of course, is that is all of the subsequent otherwise privileged communications and your Honour has heard our submissions about that. We would simply remind the Court, with respect, that in many places, but perhaps most very clearly articulated, Justice Deane in Maurice points up the great value that this Court attaches to this privilege and makes it plain that it ought not to be artificially or narrowly constrained and so one would not interfere lightly with this. We submit that what has been thrown up by this situation jeopardises the future communications which would otherwise be privileged without any limits as to time, the only limit being a loose and undefined concept of relating to the same issue.

Now, once that concept becomes a precedent, your Honour, our submission is that the very fundamental principles that have been recognised by this Court are at risk.

HIS HONOUR: Yes, thank you. Well, I will adjourn until about half past and I will return and give my decision at that point.

AT 12.13 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.41 PM:

HIS HONOUR: I have before me a summons. It asks that certain orders made by Debelle J in the Supreme Court of South Australia be stayed until the hearing and determination by this Court of an application for special leave to appeal to this Court from such orders. The application is brought by the South Australian Government Financing Authority ("SAFA").

The substantive order which is the principal subject of the stay application reads:

Subject to this Order BT Financial Group Limited and BT Australia (HK) Limited produce to the defendant the statements of Ian Fraser Bell made on 16 and 17 March 2000 and 18 April 2000 ("the Ian Bell Statements") for inspection and copying.

The other order, the subject of the summons, is a consequential one dealing with costs.

The course of the litigation

SAFA argued the matter in issue before Debelle J. On 29 January 2002, his Honour published reasons rejecting the application: see South Australia Government Financing Authority v Bank of New Zealand [No 2] [2002] SASC 10. Because the impugned orders are interlocutory, leave to appeal was required for any appeal from them. Such leave was first sought from Debelle J. However, on 30 January 2002 his Honour refused such leave. SAFA then sought leave to appeal from the Full Court of the Supreme Court of South Australia. On 7 February 2002, that court (constituted by Nyland, Martin and Gray JJ) refused such leave. It reserved its reasons. Those reasons have not yet been published. I must proceed without them. However, on the same day the Full Court acceded to an application for an interim stay of Debelle J's orders until 20 February 2002 to permit relief to be sought in this Court.

The summons in this Court was expedited by my order. Filed in this Court with the summons was an application for special leave to appeal from the identified orders of Debelle J and from the order of the Full Court of the Supreme Court refusing to intervene. In the ordinary course, the application for special leave would not be heard by this Court for several weeks, the earliest possible date for the hearing being 19 April 2002.

The last-mentioned fact is not irrelevant. The substantive proceeding to which the order of Debelle J relates is listed for trial in the Supreme Court of South Australia commencing on 4 March 2002. An estimate of up to eight weeks has been given for that trial. There is no possibility that the special leave sought could be heard and determined before the commencement of that trial. It was common ground that, if I were to grant the stay sought in the summons, it would have the potential to cause disruption to, and would almost certainly postpone the commencement of, the trial of the substantive proceedings.

The background facts

The application for the stay is brought by SAFA and two other companies, BT Financial Group Limited and BT Australia (HK) Limited ("the BT interests"). It is opposed by the Bank of New Zealand ("the respondent"). The respondent is the defendant in the proceedings pending in the Supreme Court of South Australia. By those proceedings SAFA, and initially the BT interests, sought rectification of a "side letter" issued in relation to certain bonds that had in turn been issued by SAFA to BT Australia (HK) Limited but onsold immediately to the respondent.

In advance of the trial the respondent applied for discovery against the BT interests of certain draft statements made by Mr Ian Bell that were prepared in March and April 2000. Those statements were prepared in relation to the defence of the BT interests in the proceedings. However, in July 2001 those interests settled their liability with SAFA so that, in substance, the trial will now proceed between SAFA and the respondent alone. The amount at stake is said to be of the order of 15 million dollars.

The respondent wanted the later Bell statements. On 30 October 2001, Debelle J heard its discovery application against the BT interests, by then a non-party. SAFA, which contested the application, was permitted to appear and to present arguments in support of the BT interests to resist the discovery of the documents by the BT interests. The BT interests resisted discovery and for this purpose made common cause with SAFA. The ground of resistance was that the communications in the documents were protected from disclosure by legal professional privilege. It was this proceeding which Debelle J determined in favour of the respondent on 29 January 2002.

The substantive issue in the pending trial is whether SAFA should have rectification of the side letter on the ground that the letter does not embody the agreement between SAFA, the respondent and the BT interests. That agreement was allegedly entered at a meeting involving Mr Bell (on behalf of the BT interests), Mr Ruse (on behalf of SAFA), and Mr Coakley (on behalf of the respondent). It is therefore clear that Mr Bell will be an important, perhaps a crucial, witness in the proceedings. So much was not disputed.

When the BT interests settled with SAFA they delivered to SAFA the copy of Mr Bell's statements prepared for them. At the time of such delivery discovery had already been conducted between SAFA and the respondent. In the course of that process, in its list of documents, SAFA had discovered statements made by Mr Bell in 1998, an affidavit by him of December 1998, together with supporting notes of a solicitor. In respect of none of these earlier statements and materials involving Mr Bell was legal professional privilege claimed by SAFA or by the BT interests or by Mr Bell. On the contrary, SAFA relied on Mr Bell's 1998 statement to secure an extension of the limitation period for bringing its proceedings against the BT interests.

The reasons of the Supreme Court

Before Debelle J, SAFA submitted that the communications in the later statements of Mr Bell were still the subject of legal professional privilege. It argued that they had been provided to SAFA by the BT interests under the protection of a common interest arising out of the settlement as between those parties and in connection with the litigation with the respondent.

In his reasons Debelle J was prepared to assume that there was a common interest privilege and that it had not been the subject of an express waiver in respect of the disputed Bell statements. However, his Honour held that, in the circumstances of the discovery of the earlier statements of Mr Bell, an implied or imputed waiver was to be attributed to the parties who enjoyed the privilege. In this respect he referred to the decisions of this Court in the Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 and Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1.

By reason of the acts and omissions on the part of the parties entitled to the privilege, Debelle J concluded that it had become "unfair" to maintain the privilege claimed against the demand of the respondent to have access to the later Bell statements. His Honour acknowledged that the imputed waiver of the privilege was to be sparingly inferred. However, he reached a firm conclusion that, in the present case, and in the events that had occurred, fairness meant that the opposing litigant should not be subjected to the risk of being misled. It should be supplied with the later statements of Mr Bell so as to complete the picture of what Mr Bell had to say about the subject of the proceedings.

The principles governing the grant of a stay

I am not today concerned, as such, with the special leave application but only with the stay application. However, the special leave application, seeking to enliven the constitutional jurisdiction of this Court in respect of appeals from a State Supreme Court, is a prerequisite to the jurisdiction and power of this Court to grant a stay of the orders of the Supreme Court of South Australia. In effect, a stay would be provided to prevent the exercise of this Court's appellate jurisdiction and powers being rendered futile: Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] [1986] HCA 84; (1986) 161 CLR 681 at 683. Nevertheless, the jurisdiction to grant a stay has been described as "extraordinary". Certainly it is so in advance of the grant of special leave to the party seeking the stay: see Jennings at 684, Bryant v Commonwealth Bank (1996) 70 ALJR 306 at 311, Ampolex v Perpetual Trustee Co (Canberra) Ltd (1996) 70 ALJR 603 at 607.

The reason why the grant of a stay is extraordinary is because no appeal is now heard by this Court as of right. Something special is required to attract the grant of leave to appeal. This Court has set its face against treating the judgments of intermediate appellate courts of Australia, or other judgments of Supreme Courts, as provisional or conditional on the rejection of an application for special leave. Such judgments stand as final unless and until, exceptionally, this Court provides special leave to appeal and subsequently allows the appeal, discharging those judgments.

In considering whether, in advance of a grant of special leave, a stay should be provided to a party, a single Justice of the Court will take into account a number of considerations. I collected several of these in Ampolex (1996) 70 ALJR 603 at 605-608. I there listed 12 considerations. However, in the present application the most important considerations are, in my opinion, five, namely:

1. Whether the applicants have exhausted all available facilities to seek the stay from the courts below: see Jennings at 685 and The Duke Group Ltd (in Liq); Gerah Imports Pty Ltd v The Duke Group Ltd (in Liq) [1994] HCA 3; (1994) 68 ALJR 196 at 197;

2. Whether to deny relief would effectively determine finally the rights of the parties and render the intended proceedings in this Court futile which consequence could not be avoided or minimised by making special orders, for example, the expedition of the hearing of the application for special leave;

3. Whether to grant relief would cause loss to the party successful in the courts below which loss could not be avoided or adequately minimised by making special orders to diminish that loss;

4. Whether there is judged to be a substantial prospect that special leave will be granted to the applicant in the circumstances of the case: see Jennings at 685, The Duke Group at 197 and Bryant at 309; and

5. Where the balance of convenience lies: see Jennings at 685 and The Duke Group at 198.

The application of the principles

The applicants have fully exhausted their entitlement to challenge the judgment of Debelle J in the Supreme Court of South Australia and to secure a stay from that court. Accordingly, they have passed the first hurdle.

The respondent conceded, properly in my view, that once the substantive order of Debelle J took effect and copy of Mr Bell's second statements to the BT interests was provided to, and copied by, the respondent that would, as a practical matter, reduce the incentive for the applicants to pursue the application for special leave further in this Court. Nevertheless, the respondent submitted that there would still be issues to be argued. SAFA could do so in a later challenge to any final adverse judgment of the Supreme Court of South Australia in respect of any interlocutory order that has been made on the way to that judgment which it was able to show had caused a miscarriage of justice. Arguably, the order of Debelle J now before this Court might be such an interlocutory order.

Nevertheless, in the exigencies, I consider that I should approach the application in the light of my conclusion that, once disclosed, the second Bell statements would inevitably influence the conduct of the respondent's case at trial. Especially if the trial were to proceed as listed on 4 March 2002, it is difficult to escape the conclusion that the decision on this application would, or likely might, influence the applicants to abandon their attempts to challenge the judgment of Debelle J. This conclusion does not merely lay the foundation for the jurisdiction of this Court. It is also a consideration in favour of the grant of a stay. Generally speaking it is preferable that parties should lose any substantive legal entitlements in proceedings in which those entitlements are considered directly and on their merits rather than in proceedings in which, as here, such entitlements are merely collateral to the issue in hand.

This said, there is no doubt that to provide a stay would work a significant disadvantage on the respondent. It would be obliged to seek an adjournment of the proceedings in the Supreme Court of South Australia and to await the outcome of the application for special leave in this Court and, if granted, the outcome of the appeal. The close proximity of the trial dates make it doubly undesirable that there be a disruption to the orderly conduct of the trial. It is not difficult to infer that preparing for such a case would be a significant undertaking. Large considerations of the public interest, as well as of private interests, are involved. I would be willing to infer that obtaining a second allocation from the Supreme Court of South Australia for such a lengthy trial might be difficult for some considerable time. During that time the burden and distraction of the trial would hang over both parties.

The prospects of the grant of special leave

This brings me to the crucial considerations, namely the prospect of the grant of special leave to the applicants and where the balance of convenience lies.

It is somewhat invidious for a single Justice to decide the first of these considerations. The institutional consideration of special leave applications normally involves the participation of at least two, often three, and sometimes more, Justices of the Court. Such combined consideration of the points in issue, before and during the hearing of such applications, adds to the emergence of the issues that tend in favour of, or against, the grant of special leave. Nonetheless, the duty of a single Justice, in a position such as I now find myself in, to consider the prospects of the grant of special leave and to refrain from providing interlocutory relief without a clear conclusion that a grant of special leave is likely, has recently been emphasised by the Full Court in the context of bail orders: see Cabal v United Mexican States [2001] HCA 60; (2001) 75 ALJR 1663 at 1679 para [77]. It is therefore my duty to endeavour to assess the likelihood of the grant of special leave to the applicants but in the context of this somewhat different case.

I would by no means conclude that a grant of special leave would be impossible. I make no final decision to that effect. However, it is my estimation that such a grant would not be likely in this case. The grounds that lead me to this conclusion are principally the following.

First, there is a well-known disinclination on the part of this Court, as of other appellate courts, to intrude in the orderly conduct of proceedings in courts of trial at an interlocutory stage of proceedings. This approach is most strictly observed in respect of criminal trials: see R v Elliott (1996) 185 CLR 250 at 257. But it also applies to the case of civil trials: see Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd [1988] HCA 53; (1988) 165 CLR 452 at 457-458. Most especially it applies to such a trial where the hearing is proceeding or is about to commence and would be significantly disrupted by any appellate intervention. The foregoing is not an absolute rule, as the decisions of the Court in Maurice, Goldberg and Mann demonstrate. However, it is a strong rule of appellate restraint. I must conform to it.

Secondly, the restraint proper to appellate consideration of interlocutory judgments and orders, for reasons explained in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-5, is still further reinforced where the judgments and orders in question involve, as do Debelle J's orders in this case, discretionary decisions in matters of practice and procedure. In such matters considerations of opinion, evaluation, judgment and estimation are inescapable.

Thirdly, in the present case the circumstances of the litigation are such that the special leave points would not be presented in a propitious way so as to permit this Court to consider the rules applicable to imputed waiver of legal professional privilege. I am far from saying that that question may not one day be one suitable for re-examination by this Court. Perhaps it might arise in these proceedings at the conclusion of the litigation, if the question is still relevant.

The most pertinent case relevant to the issue which the applicants wish to argue is Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83. The correctness of the principle stated in that decision was not reserved at trial before the primary judge. Nor was its correctness reserved before the Full Court. However, in the applicants' special leave application to this Court (ground 4.2) the correctness of the holding in that case is challenged. The applicants made it clear that the challenge was not the principal basis for their application for special leave. Yet, in my view, it presents potentially the most important of the questions they have raised. Perhaps it is the only important question of general legal principle.

In that case this Court was divided, Toohey and Gummow JJ dissenting from the majority. In the Court of Appeal of New South Wales I too had dissented: see Goldberg v Ng (1994) 33 NSWLR 639 at 661. So I am not unsympathetic to the point of substance which the applicant makes by ground 4.2.

However, the ruling of the primary judge had of course to be made under the exigencies of time and complying with the holding of this Court in Goldberg v Ng. The primary judge pointed out that the ruling might, in other circumstances, have been made during the course of the trial itself. This Court would not, therefore, have the advantage of any reflections by the Full Court on any difficulties or uncertainties or injustices which the present rule presents. I am prepared to infer that the Full Court saw no error of principle or injustice in the actual decision of Debelle J.

To the extent to which the authority of this Court is expressed in terms of avoiding "unfairness" to a party in the particular circumstances of the case, it necessarily presents a somewhat unpromising foundation for a grant of special leave. Normally something more than an arguable case on the facts is necessary to secure the grant of special leave. The applicants, however, say that Debelle J erred in his approach to the protection of the privilege and that he unacceptably pushed the exception to the privilege further than this Court had done in Maurice, Goldberg or Mann. They submit that his Honour's decision sets a dubious precedent which this Court should intervene to correct.

Conclusion and orders

As I read Debelle J's reasons for judgment, his Honour was not concerned with establishing any new principle of law. On the contrary, he confined his consideration of this case to its peculiar circumstances where the facts were, as he pointed out in his reasons, unusual.

I do not regard what Debelle J said in his reasons as establishing a new and broader principle, as the applicants fear, that once a privilege is waived by a party, all later communications by that party on the same subject are lost. This is not the law. It is not the way in which Debelle J expressed his reasons. Those reasons were anchored firmly in the unique sequence of events of this particular case. They did not suggest that an unembellished consideration of "fairness" authorised his Honour to override an established case of privilege: cf Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at 13 [29]. So viewed, it appears to me, at least on my present understanding of the matter, that no new principle was established. This was merely the application of established principles. Certainly this is what Debelle J thought he was doing. He said as much when refusing leave to appeal to the Full Court.

For these reasons I consider that the prospects of success in a special leave application are poor. When this conclusion is reached, the balance of convenience strongly favours a refusal of the stay so that the trial of the substantive proceedings will not be delayed. It follows that the stay must be refused.

The orders I make are:

1. Dismiss the summons;

2. Order that the applicants pay the costs of the respondent of the summons; and

3. Certify for counsel.

I will not vacate the order of the Full Court of the Supreme Court of South Australia which provided a stay of its orders for a further three days in case the applicants wish to take the matter further.

Are there any matters of fact in those reasons which you would wish to correct?

MR NICHOLAS: No, your Honour.

MS HARRIS: The only matter, your Honour, is my learned friend indicated to you during the course of his argument that the trial is to go for eight weeks. As I understand the position, that is certainly the estimate that has been provided by SAFA to - - -

HIS HONOUR: I will simply correct that by saying "estimated to be eight weeks".

MS HARRIS: Yes, because that is a more recent estimate. It was earlier estimated to go for only four to six weeks, I understand, and that is a longer estimate.

HIS HONOUR: Yes. Thank you for making that clear. But, anyway, it is a matter of weeks.

MS HARRIS: Indeed. Certainly, your Honour.

HIS HONOUR: Yes, thank you very much. I express appreciation to both of you for your assistance. The Court will now adjourn.

AT 1.10 PM THE MATTER WAS CONCLUDED