Clone Pty Ltd v. Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) & Ors [2017] HCATrans 130 (16 June 2017)

Last Updated: 19 June 2017

[2017] HCATrans 130

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A1 of 2017

No A2 of 2017

B e t w e e n -

CLONE PTY LTD

Applicant

and

PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED)

First Respondent

GREGORY MICHAEL GRIFFIN

Second Respondent

DARREN JOHN CAHILL

Third Respondent

CHRISTOPHER STEPHEN McDERMOTT

Fourth Respondent

LIQUOR & GAMING COMMISSIONER

Fifth Respondent

ATTORNEY-GENERAL OF SOUTH AUSTRALIA

Sixth Respondent

Applications for special leave to appeal

NETTLE J
GORDON J

FROM MELBOURNE BY VIDEO LINK TO ADELAIDE

ON FRIDAY, 16 JUNE 2017, AT 10.08 AM

Copyright in the High Court of Australia

____________________

MR J.H. KARKAR, QC: If the Court pleases, I appear with my learned friend, MR B.C. ROBERTS, SC, for the applicant. (instructed by Finlaysons)

MR A.S. BELL, SC: If the Court pleases, I appear with my learned friend, MR P. ZAPPIA, QC, appear for the first to the fourth respondents. (instructed by Griffins Lawyers)

MR C.D. BLEBY, SC, Solicitor-General for the State of South Australia: If the Court pleases, I appear with my learned friend, MR B.L.GARNAUT, for the sixth respondent. (instructed by the Crown Solicitor’s Office (SA))

NETTLE J: Thank you, Mr Karkar.

MR KARKAR: Your Honours, in my respectful submission, special leave should be granted because the proceedings involve questions of law of public general importance in respect of which there are differences of opinion between the Full Court of the Federal Court and the New South Wales Court of Appeal. Further, we submit, your Honours, that the interests of the administration of justice, in particular, require concentration of the judgments of the majority of the Full Court.

Your Honours, the questions of principle are as follows. First, what are the principles applicable to an action to set aside a perfected judgment on the ground of fraud or malpractice? Secondly, what is the mental element required in such an action that counsel misled the court and, thirdly, what is the meaning of “custody” and, in particular, the nature of control required to establish custody in the discovery context?

NETTLE J: That is ground 4(1)?

MR KARKAR: Yes.

NETTLE J: It is rather a question of fact and degree as opposed to principle, is it not?

MR KARKAR: There may be something in what your Honour said but it does involve what is meant by control and whether the transient inspection by one party of another party’s document render that document in the person’s custody. The importance of this question - - -

GORDON J: Can I ask it this way? Is assessment of that question necessary for your question 2?

MR KARKAR: No.

GORDON J: In other words, as I understood it, the question of whether you have got malpractice, is it necessary?

MR KARKAR: No, it is relevant to determine whether the document was discoverable by reason of its being in the custody of Clone as a determinant of whether there was malpractice.

GORDON J: That is my question.

MR KARKAR: Yes.

NETTLE J: Put it this way, even if it were right that there was custody, you would still have your argument on malpractice, would you not?

MR KARKAR: Yes, I would because we would submit that there was no findings by the majority in the Full Federal Court that the failure to discover was deliberate malpractice. The issue is partly one of principle and partly one of fairness and the interests of justice.

GORDON J: Let us deal with the question of principle first. As I understand it, you have got questions about whether or not the authorities that have dealt with the setting aside of a judgment in an appellate context, that is, for statutory appeal, to the extent to which they are applicable in the circumstances here where you have got a perfected judgment, so you have got the distinction between McDonald and Quade and Monroe to deal with.

MR KARKAR: Yes.

GORDON J: Why would we go beyond that?

MR KARKAR: Because there were findings – sorry, I will start again. That is the principal question, there is no doubt about that. In its trail it raises the issue as to what do you need to establish in order to render counsel guilty of malpractice in misleading the Court?

NETTLE J: It is hardly likely to turn on whether it was custody or not, is it?

MR KARKAR: That is correct.

NETTLE J: So we could do without grounds 4.2 and 5, could we not, and still deal with the question of principle?

MR KARKAR: Yes, your Honours.

NETTLE J: So we finish up with, what, in effect two questions of principle? Is the test Quade or is it the higher test and what constitutes malpractice given the circumstances which obtain?

MR KARKAR: Yes.

NETTLE J: All of which are expressed in grounds 1, 2, 3, 4.1 and 6?

MR KARKAR: That is correct. Now, we submit that this is a most suitable vehicle for this Court to decide this issue that arises out of Monroe Schneider and the New South Wales Court of Appeal in Toubia.

NETTLE J: Mr Karkar, how if at all do you conceive of the Attorney-General’s proposed additional ground relating to that question?

MR KARKAR: We think it is apposite, your Honours, because it illuminates the questions that we have posed.

GORDON J: So, if you are going to formulate them in a sort of succinct manner, are they any more than whether the principles in McDonald or Quade apply to the setting aside of perfected orders outside a statutory appeal?

MR KARKAR: Yes.

GORDON J: Power of the court to set aside a perfected order outside of the statutory appeal, is it limited to fraud or extends to malpractice?

MR KARKAR: Yes.

GORDON J: Then you have the question of intention – intentional or reckless, as I understand the way it is put.

MR KARKAR: Yes.

GORDON J: Is it any more than that?

MR KARKAR: No, it is exactly that, your Honours.

GORDON J: With no disrespect, the questions and grounds go on for a long way.

MR KARKAR: Your Honours, with the first question that your Honour Justice Gordon just articulated, that carries with it, of course, what is the significance of the lack of due diligence and what degree of materiality is required to be demonstrated?

GORDON J: Well, it may or may not. The question is whether or not – what are the principles to be applied in setting aside or seeking to set aside a perfected judgment outside of the statutory appeal context and the question is, as Justice Nettle put it, does the Court apply the principles set out in those authorities dealing with statutory appeals in an appellate context or are there to be more stringent requirements and that is the question.

MR KARKAR: That is the question. The answer to that question, in our respectful submission, we carry with it the result, if we are correct, that the majority judgments below were in error. That is to say, if the correct test is that adumbrated in Monroe Schneider and Owens Bank v Bracco, then it must follow that the majority in the Full Court were in error.

NETTLE J: Then, why do we need all the other questions?

MR KARKAR: They arise as a consequence of an answer to the principle question. Effectively, the answer to the first question answers them. They are not strictly necessary as questions because the answer to the first principal question will carry with it, in our respectful submissions, answers to those questions.

NETTLE J: That would seem to suggest we do not need any more than question 1, would it not? If you do not get up on question 1 you are not going to get up, are you?

MR KARKAR: That is correct.

NETTLE J: If you do get up on question 1 you say you are bound to succeed.

MR KARKAR: Yes.

NETTLE J: Do we need to have any more than question 1?

MR KARKAR: Strictly speaking not but - - -

NETTLE J: That is good enough for me.

MR KARKAR: Your Honour has always been well known for pithiness. I appreciate what your Honours are putting to me.

GORDON J: Let us put it bluntly, if one goes to the proposed grounds of appeal and they go for pages, which is pages 370 and 371, when one then goes to the special leave questions and they are in effect predicated on the assumption. Your issue is the one that Justice Nettle just put to you.

MR KARKAR: Yes, I accept that, and McDonald to the extent even that it applies in the appellate sphere needs to be reconsidered by this Court. Indeed - - -

GORDON J: But it is an appellate context, this is not appellate context. So if you put Quade and McDonald in one side in appellate context, it has a set of principles relevant in that context. The question is here, which is not that context, is it that principle or is it some other principle that is to be applied?

MR KARKAR: With respect, we accept what your Honour has just put. We would submit that where the action is one to set aside a perfected judgment, McDonald and Quade do not apply.

GORDON J: Outside the appellate context.

MR KARKAR: Outside the appellate context.

GORDON J: If you are putting it otherwise, as I understand it, your position would be – the question is whether or not there is a further

requirement in this context to require something in addition to the principles set aside or set out in Quade and McDonald because we have moved on.

MR KARKAR: Yes. Your Honours, in our respectful submission, the judgments of the majority in the Full Court should not stand. They involve errors of law that really call for correction by this Court.

NETTLE J: I think we follow. We might hear from Dr Bell as to the importance of the issue.

MR BELL: So, confining myself to the proposed ground 1, your Honours, we say that the apparent difference between Monroe Schneider is chimerical. I will come to that, because Monroe Schneider when you look at what it decided and when you look at the fact that it cited McDonald and the particular passages of Chief Justice Barwick and Justice Menzies in McDonald make absolutely clear that it was not seeking to depart from McDonald at all and when one comes to the language used by the Full Court in disposing it has talked about a “real possibility”. That is not the language that my friends urge is otherwise supported. But before I come to that, your Honours, can I make a couple of what we would submit are very important points about the administration of justice here, both generally and in the particular facts of this case?

It is common ground that this case, the trial before Justice Hargrave ran for nine days on an agreed basis that Quade applied and that was an agreement made by Clone represented by a very eminent experienced senior counsel and it ran for nine days. His Honour made findings in accordance with the language of Quade, so his Honour found a “reasonable possibility”. That was the language – that is the language in Quade. The great vice here, from my client’s perspective, is that in their written submissions in support of this appeal in paragraph 24.4, for example, in appeal book 394 it is said:

As to the materiality of the 3rd Copy Agreement, the primary judge held only that “there was a real possibility” that the issue would have been decided differently –

But, your Honours, of course, is what he was told was one of the probanda to be found because both parties agreed that Quade was the appropriate test. My client is now faced with a new test which has a different standard of materiality, so the fourth aspect of ground 1 of the proposed notice of appeal says unless we could demonstrate that the evidence was so material that it probably would have affected the outcome, we lose. Now, that is really unjust. We had a nine day trial on an agreed basis and we had findings which were made in the context of that agreed basis and Clone now says that finding is inadequate to see us home.

Now, the Court should not, in our respectful submission, expose my client to that injustice. More generally, in relation to the administration of justice, your Honour, the Court has this. The Court has five key undisturbed findings. It has an undisturbed finding of serious malpractice by reckless failure to discover the so-called third copy agreement.

That was a finding made by Justice Hargrave, upheld on appeal, reckless failure in relation to a document also found to be forensically significant and of importance to the trial judge Justice Vanstone. Secondly, you have got an undisturbed finding of “reckless refusal to consider Clone’s discovery obligations”. That is at appeal book 188. You have got undisturbed findings that the trial judge was misled as a result of that serious malpractice, an undisturbed finding that for these reasons the 30 day trial before Justice Vanstone was “unfairly conducted”, that was Justice Hargrave’s words after his nine day examination of the matter and then you have additional findings in the Full Court that quite apart from the question of discovery, Justice Vanstone and the Full Court were misled.

Now, if it be the case and which it has to be the case that those findings are not appropriately challenged in this Court and that is what really what grounds 2 to 6 were seeking to do - - -

GORDON J: If you put grounds 2 to 6 aside because that is important.

MR BELL: I am. So, if it be the case that one has those findings that I have just recited, we would submit that from the administration of justice point of view it is plain that the decision to order a new trial in this case on the basis of those findings was entirely just and any decision to the contrary would have been perverse and that the party responsible for that conduct ought not – it is not in the interests of the administration of justice for the party the subject of those findings to now seek to agitate on a different basis to what it argued below that a different test applied and notwithstanding the very serious and unchallengeable factual findings that it should not be – the decision is not capable of being set aside.

Now, let me turn then – and, of course, it is important to bear in mind, as is common ground also, that it was a discretionary decision at the end of the day by Justice Hargrave and the appeal from that discretionary decision based on Quade because our friends notice of appeal to the Full Court included a challenge on Quade principles. It did not just say we got it wrong, it is a different principle. It continued to persist in the Quade line, that was a principal aspect of its appeal, and that challenge to that discretionary decision was rejected by House v The King grounds, bearing in mind that if you had a nine day trial considering a 30 day trial in 2004. This Court should not be, with respect, getting into the morass of this case and I move then to the key - - -

GORDON J: We are not talking about the morass, Dr Bell, we are talking about the principle.

MR BELL: Yes, I am coming to that now.

GORDON J: You might want to focus on that.

MR BELL: We say, your Honour, it is a false issue. Monroe Schneider does not seek to say for one moment that a different test applies in the different context to McDonald and Quade. It simply does not say that. What we have got is an attempt which most applicants for special leave seek to engage in to try and create a clash in the authorities. There is no clash in the authorities. What the Full Court did was to apply Quade and they said if there is a difference, if this was not a perfected judgment because the Full Court’s reasoning was you cannot say this was a perfected judgment because it was tainted.

GORDON J: The question is what happens – there are two circumstances here. One is an appellant procedure, we are not in that. The second is a non-appellant procedure being an application to set aside a perfected order either because it is not seen to be perfected because of some other reason or because something has happened subsequently that causes you to doubt its validity. The question is what principles is a court to apply in the second category? Are they the same as the first? Are they different?

MR BELL: We would say that they are the same and they ought to be the same. In the question of what is ultimately, at the end of the day, the interests of justice, because in the interests of justice bearing in mind the importance of finality on the one hand and the importance of courts not being misled and malpractice not being rewarded, bearing those considerations, it is inconceivable, in our submission, that this Court would rigidify a test in the way proposed by our learned friends.

What is significant about Quade and what is significant about McDonald is that the Courts – both differently constituted High Courts, were keen to identify the key matters to be taken into account but not to confine themselves in the exercise of a discretion which was ultimately at the end of the day what is involved. We make three points on this. First, can I go to McDonald, your Honours have that, at [1965] HCA 45; 113 CLR 529 at 533. Chief Justice Barwick about point 6 of the page after referring to the Privy Council in Hip Foong Hong said:

It is not necessary in that event that the evidence of the fraud, the surprise or the subornation, though it should be “fresh”, should be evidence which would be admissible on the issues between the parties in the action; or that it should be found to be probably conclusive of those issues.

which is the test our friends would urge on the Court:

The Court’s conclusion upon the fresh evidence before it that the verdict was obtained by fraud, by surprise or that witnesses were suborned, is sufficient to justify setting aside the verdict and ordering a new trial. Whether or not the Court does so must finally depend on the Court’s view as to whether or not the interests of justice, either particularly in relation to the parties or generally in relation to the administration of justice, require such a course.

Almost identical language, one finds, in Quade. Then, your Honours, in Justice Menzies’ judgment at page 540 about point 8:

Where, however, the acceptance of fresh evidence would also prove a party’s fraud at the earlier trial, it seems that it is not necessary to go to the length of showing that, had the evidence been available at the earlier trial, it would have produced an opposite result.

At 541 point - - -

GORDON J: Just stop there. That is the question, though, is that sufficient in this context? What would be the discrimination? That is the point, I mean - - -

MR BELL: The distinction which has always been drawn, your Honour, is fresh evidence per se is the harder test.

GORDON J: I agree.

MR BELL: Where the fresh evidence has been fraudulently concealed the court is more inclined or less inclined to insist on that stricture. There is a correlation which makes conceptual sense, in our submission.

GORDON J: The thing that is distinguishable here is the question of finality. Here they are not concerned with finality because they are in the process of determining the finality of the matter. In this matter there has been finality or arguably finality and that is the thing that does not seem to have been addressed in these sort of decisions.

MR BELL: Well, except for the fact that it is, as Justice Blue said, a tainted finality. It is a tainted finality. There was absolutely no Quade, for example, but also the trial judge Justice Hargrave and the Full Court advert in terms to the importance of finality and they considered it, they considered it. It is not as though finality was ignored or swept over. Of course, obviously, it was taken into account but at the end of the day the interest of justice inquiry of the kind that Chief Justice Barwick spoke of was employed. The final reference in Justice Menzies which is important is at 543 where he in terms rejects the – you will see at 543, point 1, 2:

For the reasons which I have given, I regard as too narrow the learned author’s propositions –

and the propositions are set out. They are the propositions. They are the propositions which Mr Karkar contends for. Now, could I then go to Monroe Schneider to make my point that this is all chimerical? If one then goes to Monroe Schneider, your Honours, which is [1992] FCA 367; (1992) 37 FCR 234 and could I take you to page 242 about point 5. You will see that there is reference to McDonald v McDonald, reference to page 533 of Chief Justice Barwick’s judgment, the very passage I have taken you to:

The Court’s conclusion upon the fresh evidence before it that the verdict was obtained by fraud, by surprise or that witnesses were suborned, is sufficient to justify setting aside the verdict and ordering a new trial.

See also Justice Menzies 542 to 543. What are those passages? They are the passages and particularly the passage at the top of 543 where he in terms rejects the test which Mr Karkar is advocating. Now, as we have put, as Justice Blue put and as we have put in our written submissions, an argument of this kind was trialled in the New South Wales Court of Appeal in a case called Toubia and Justice Handley said it was foreclosed by the decision in McDonald, and Toubia was a case where this Court rejected special leave to appeal. So this is, of course, well known to your Honours, a true applicant for special leave will seek to identify a clash in the authorities or a problem in the authorities but, in our submission, it is chimerical here.

NETTLE J: But you say we do not get to it anyway because it was all argued on the agreed basis of Quade.

MR BELL: That is an additional extremely important matter going to fairness and fairness in the administration of justice in the particular circumstances of the case to pick up section 35A(b), I think, of the Judiciary Act because, as Mr Karkar frankly put to your Honours in confining it to ground 1, he said, “Well, yes, if we win the point of principle we win”. They win because we do not have a finding from the trial judge. We have a finding which only goes so far, it goes as far as they needed to go. He was not asked to make a finding going further and he did not need to make such a finding but, of course, had they argued this at the outset we would have sought such a finding.

So, your Honours, we do submit it is just not a suitable vehicle and when one looks at and analyses Monroe and if your Honours – the other point about Monroe is this. At 244, about point 5 of the page, the paragraph beginning “The terms of his Honour’s reasons for decision”, you will see in the third line “incapable of showing a reasonable possibility” et cetera and then towards the end of that paragraph “failed to show a reasonable possibility of establishing a case”.

That is not the language of some different test that Mr Karkar is advocating, see part (d) of ground 1, would probably have made a difference. That is language much more akin to Quade. So they have taken Monroe Schneider, they have taken the fact that that article of Mr Gordon, QC, which was quoted in Monroe Schneider, they have taken the fact that it was quoted to say, well, Monroe Schneider endorsed that. It did not endorse that. Monroe Schneider decided the case on the facts. The discussion was really a survey of the law in different areas at common law and in equity for disturbing judgments, such as may be.

But what Monroe Schneider is authority for is that given Justice Wilcox’s decision that, I think, the perjury in that case was not material, that was the end of the matter. So, we say that an edifice has been sought to be created, a clash in the authorities which is on proper analysis not there, then you compound that with the unfairness to my client, including the huge amount of time and resources that has been engaged in righting a wrong because do not forget we do have those finding, serious malpractice, recklessness, misleading of the court, none of which ought able to be challenged.

The justice of this case does not require the grant of special leave. We would say this, your Honours, that if, contrary to what I have put, your Honours were inclined to grant special leave, even if confined to ground 1, it should be on conditions that given the different and agreed basis upon which Clone conducted the trial, any grant of special leave should be on the basis that Clone pays Players costs of the proceedings before Hargrave J and this Court in any event.

GORDON J: So we do not disturb the cost orders?

MR BELL: That ought to be a condition, yes. But I just want to make it clear this is very much a fall back if the Court grants leave because we will still be if the Court grants leave - - -

NETTLE J: You have made it clear, Mr Bell.

GORDON J: Before you sit down, Dr Bell, can I just ask one other question? I notice in the Attorney-General of South Australia’s submissions before this Court, they propound an additional question of principle not identified by the applicant. Do you wish to say anything on that matter?

MR BELL: Yes, your Honour, that question of surprise, there is authority of this Court, I give your Honours the references. It is Wollongong v Cowan, Chief Justice Dixon’s judgment with the rest of the Court agreeing, where his Honour – this is [1955] HCA 16; 93 CLR 435 at 444.5 – Justice Dixon talked about fraud, malpractice and surprise and malpractice was included. Quade also treats malpractice in this context as analogous to fraud and Justice Menzies in McDonald v McDonald at 541 also used the term “malpractice” et cetera.

So we do not with respect – there are findings of reckless malpractice, serious malpractice, so we do not see that there is any separate point about the notion of surprise on the authorities in this Court. There is no doubt that malpractice travels together with fraud in this context as, indeed, it should. And, I should say, at first instance, and I think this is recorded, that Clone accepted if serious malpractice were made out a jurisdiction ought be enlivened and the Attorney-General did too.

Mr Zappia reminds me, that was a common ..... cause. But, your Honours, we submit that in the circumstances of this case that the seriousness of the findings is really not an appropriate vehicle and, indeed, from my client’s perspective would be contrary to the interests of justice for this to be prolonged given the amount of time and effort and basis on which it was fought by senior counsel at first instance.

NETTLE J: Thank you, Mr Bell. Mr Solicitor.

MR BLEBY: May it please the Court, I will be brief. We rely on our written submissions. I do not propose to address on the suitability of this case as a vehicle. Just by way of assistance to the Court, the Attorney-General intervened under section 9 of the Crown Proceedings Act 1992 at trial and argued that Quade principles did not apply in such a case. The Attorney was the only person represented at Court that made that argument. The Attorney’s argument was premised at the time on a thesis of the inherent jurisdiction of the Court. The position has changed to a degree in light of the decision of this Court in NH and otherwise and, effectively from the Attorney’s perspective, potentially narrowed the test.

That is why we assert or at least suggest a variation on the questions proposed by the applicant, and as to the Attorney’s submissions below that

malpractice would be sufficient, yes, the Attorney submitted that malpractice analogous to fraud would be sufficient. Again, the position since the judgment of this Court in NH potentially narrows the question in the equitable jurisdiction as to whether or not it is simply fraud. That is the motivating factor for the Attorney suggesting the additional question. But, as I say, as to whether this case is a vehicle or otherwise as to whether special leave should be granted, the Attorney-General takes no position. May it please the Court.

NETTLE J: Thank you, Mr Solicitor. Mr Karkar, any reply?

MR KARKAR: Your Honours, may I just point to this? We accept that before the trial judge, we agreed that the Quade principle should apply. We resiled from that in the Full Court and the Full Court heard full argument on that point and Justice Blue said this at paragraph 315 at page 220 of the application book. His Honour said:

Nevertheless, Players to not submit that, if Clone had contended at trial that diligence and materiality were essential requirements for Players to succeed, the point could have been met by their calling evidence at trial or that Players conducted or may have conducted their case differently at trial. Diligence and materiality were issues at trial and I am satisfied that Players would have conducted their case in the same manner if it had been Clone’s case at trial that diligence and materiality were essential requirements.

So, Players, in our respectful submission, accepted before the Full Court that they would not have conducted their case differently at trial had the point been raised at trial and, your Honours, it is clear that in the Full Court, the questions as set out by Justice Blue at paragraph 14 at page 153, encompassed the questions that would arise on an application of, if I may call it, the Monroe Schneider test.

Now, there is a difference of authority that your Honours need to resolve. There is a difference between, on the one hand, what was said in Monroe Schneider at page 241 and what the House of Lords said in Owens Bank Ltd v Bracco which is quoted by their Honours in the Full Court at page 240. There is a clear difference of opinion. In Toubia, the Court of Appeal of New South Wales said that neither Monroe Schneider nor Owens Bank represent the law of Australia. Now, that state of affairs cannot remain on the books. This case calls for your Honours’ intervention to clarify the position.

GORDON J: What is your response to Dr Bell’s contention that the costs order below should remain unaffected?

MR KARKAR: Your Honours, that is an issue that can be decided at the hearing, if your Honours were minded - - -

GORDON J: I think his proposition was that it should be a condition of the grant of special leave.

MR KARKAR: Well, your Honours, in our respectful submission, it should not be, as I have just adumbrated. They accepted before the Full Court that they would not have conducted their case differently at the trial, had the issue been raised and the issue had been raised by the Attorney-General squarely. So, in our respectful submission, it ought not to be a condition for the grant of special leave.

GORDON J: I have one more question, Mr Karkar - - -

MR KARKAR: Yes, your Honour.

GORDON J: - - - and that is this. The Attorney-General’s modification or additional question – do you wish to say anything about that?

MR KARKAR: We would submit that it is an appropriate question for your Honours to determine as well. It will clarify this area of the law fully rather than simply on the question of fraud. If the Court pleases.

NETTLE J: Thank you. Now, there will be grant of special on grounds 1, 2 and 3. There is also the Attorney-General’s additional ground, Mr Karkar. Are you applying to amend your notice of appeal to include a ground in those terms?

MR KARKAR: Yes, your Honour.

NETTLE J: There will be leave to the appellant to amend its notice of appeal to include as an additional ground of appeal the proposed ground of appeal referred to by the Solicitor-General for South Australia and there will also be a grant of special leave to appeal on that ground. The Court is not disposed to make any special costs orders at this stage of the proceeding, given what is said at paragraph 315 in the reasons of judgment of Justice Blue at page 220 of the application book and what has been said by the Solicitor-General for South Australia about the submissions made on behalf of the Attorney-General for South Australia at the hearing of first instance. It is not to say, however, that the subject of costs cannot or will not be revisited later in the proceedings. Dr Bell.

MR BELL: Your Honour, I do apologise for this. I had mistakenly, obviously, advanced my submissions on the basis that your Honours did not want to hear me on other than ground 1 - - -

NETTLE J: Yes.

MR BELL: There is an issue about grounds 2 and 3. Grounds 2.4 and 2.5 really are challenges to findings of mixed fact and law.

NETTLE J: Yes, I think you are probably right, with respect.

MR BELL: We would - - -

NETTLE J: No, I take your point. Is there any other of that kind?

MR BELL: I think we are - - -

GORDON J: I wonder whether it might be appropriate, I ask you this question, whether or not we could not, in effect, shave off the sub-particulars because it seems to me the question of principle is the question that is to be resolved.

MR BELL: That is the basis on which I make my submission but there are both explicit and also implicit in grounds 2 and 3 challenges to findings which would require the Court to be involved in going back to the whole record - - -

NETTLE J: No, pardon me a minute, Dr Bell.

MR BELL: So, we - - -

NETTLE J: Yes, your submissions should be confined to ground 1.

MR BELL: Ground 1.

NETTLE J: Yes, and of course the Attorney-General’s additional ground.

MR BELL: Yes, I do not think that has the same vice and if you were going to permit some canvassing of the findings, we would wish also to be permitted to canvass the finding of lack of reasonable diligence, as a condition, because if it is going to be open to our friends to, as they seek in ground 2, to canvass findings about the effect, then as a matter of fairness, because there is a split - - -

NETTLE J: Let me be clear about this, is it accepted as Mr Karkar submits that if he were successful on ground 1, he would be successful in the appeal?

MR BELL: Your Honour, we still have the problem that 1.4, if 1.4 is accepted, the fact that the trial judge only went so far as he was asked to go, we did not ask him to go any further because the parties were agreed that it was Quade.

NETTLE J: Is that not met by what is said by Justice Blue at paragraph 315 at page 220?

MR BELL: I think, with respect, what is said there is, the concession was that we would not have called different evidence, et cetera, but had we been fighting the case on the basis that to win we needed to convince the judge that the result would probably have been different rather than a reasonable possibility, there is no way known on earth that senior counsel representing my client would not have made a submission to that effect, and I do not believe he did. His Honour Justice Hargrave went only so far as he was required to do on the Quade - - -

NETTLE J: That does seem to be contrary to what was said at paragraph 315 in the reasons for judgment of Justice Blue.

MR BELL: Well, the potential ambiguity lies in the distinction I have drawn - and I was not in the trial or below - between what was said, no doubt quite correct in terms of the evidence, but had a different test being applied. It would have been incompetent for us not to have sought a finding in terms of the more stringent test and I would, with respect, not understand that what is recorded there to be going beyond – we are not going to say that the evidence would have been different or the cross-examination would have been different. That is the difficulty I have and that is in a sense the vice we would be met with, a test and a failure to satisfy the test which would be because we do not have a finding at first instance, which the judge was not asked to make.

NETTLE J: Yes, thank you.

MR BELL: But we certainly submit it should be confined to ground 1.

NETTLE J: Yes. The order which I pronounced before will be varied as follows. There will be a grant of special leave to appeal on ground 1 and the additional ground for which leave to amend has been granted in the terms proposed by the Solicitor-General for South Australia and there will be no special order as to costs at this stage of the proceeding.

The appellant’s submissions and lists of authorities are to be filed and served on before 4.00 pm on Friday, 21 July 2017. The respondent’s submissions and lists of authorities are to be filed and served on or before Friday, 11 August 2017. The Attorney-General’s submissions and lists of authorities I think had better be filed at the same time as the appellant’s, on Friday, 21 July 2017, and the appellant’s reply is to be filed and served on or before 4.00 pm on Friday, 25 August 2017.

Once again, I draw counsels’ attention to the importance of complying with the timetable and to the requirement that the written submissions be in accordance with the new requirements of rule 1.08 and Part 44 of the High Court Rules 2004.

I am grateful to counsel for their assistance. Thank you.

AT 10.59 AM THE MATTER WAS CONCLUDED