Clark v State of New South Wales [2006] NSWSC 673 (30 June 2006)

Last Updated: 3 July 2006

NEW SOUTH WALES SUPREME COURT

CITATION: Clark v State of New South Wales [2006] NSWSC 673



CURRENT JURISDICTION:

FILE NUMBER(S): 20233/02

HEARING DATE{S): 23 August 2005, 24 August 2005

DECISION DATE: 30/06/2006

PARTIES:
Peter Frederick Clark (Plaintiff)
State of New South Wales (Defendant)

JUDGMENT OF: Johnson J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Ms L McManus (Plaintiff)
Mr M Neil QC; Mr D Aquilina (Defendant)

SOLICITORS:
IV Knight (Defendant)


CATCHWORDS:
ABUSE OF PROCESS - claim for damages for malicious prosecution, false arrest, false imprisonment and abuse of process - plaintiff alleges that he possesses tape recording of police officer soliciting a bribe from him - tape said to be important potential evidence in proceedings - directions made by judge for technical analysis of tape - proceedings adjourned for that purpose - plaintiff then destroys the original tape - application by defendant that proceedings be stayed or dismissed as an abuse of process - elements of abuse of process - principles applicable where application is made for stay or dismissal of proceedings on grounds of destruction of potential evidence after proceedings commenced - order made dismissing proceedings

ACTS CITED:
Civil Procedure Act 2005
Uniform Civil Procedure Rules
Supreme Court Rules
Evidence Act 1995
Crown Proceedings Act 1998
Crimes Act 1900
Unauthorised Documents Act 1922
Listening Devices Act 1984
Law Reform (Vicarious Liability) Act 1983

DECISION:
1. Further Amended Statement of Claim dismissed
2. Plaintiff is to pay the Defendant’s costs of this application.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION


Johnson J


30 June 2006


20233/02 Peter Frederick Clark v State of New South Wales


JUDGMENT

1 JOHNSON J: The Plaintiff, Peter Frederick Clark, has commenced proceedings against the Defendant, the State of New South Wales, seeking damages for false imprisonment, false arrest, malicious prosecution and abuse of process. The Defendant is sued in respect of alleged acts or omissions of members of the New South Wales Police. On 11 October 2004, the proceedings were called on for hearing before Wood CJ at CL. The hearing did not commence. Senior counsel for the Plaintiff informed the Court that the Plaintiff possessed an audio cassette said to contain a record of a conversation between the Plaintiff and a police officer in which the police officer solicited a bribe from the Plaintiff. The tape was said to be of great significance to the proceedings. The case was adjourned to allow technical analysis of the tape for use at a future hearing of the matter and the Court gave directions for this purpose. Soon after, the Plaintiff destroyed the tape. The Defendant now seeks that the proceedings be stayed or dismissed alleging that the Plaintiff’s conduct constitutes an abuse of process.

The Present Application

2 By Notice of Motion filed on 14 December 2004, the Defendant seeks orders that the proceedings be stayed or dismissed pursuant to Part 13 r 5 Supreme Court Rules (“SCR”). By the time the hearing of the Notice of Motion came before me, the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules (“UCPR”) had commenced. Section 67 Civil Procedure Act 2005 now provides for a statutory power to stay proceedings. Part 13 r 13.4 UCPR is in similar terms to Part 13 r 5 SCR with respect to the power of dismissal.

3 Mr M Neil QC appeared with Mr D Aquilina for the Defendant, the Applicant on the Notice of Motion. Ms L McManus of counsel appeared for the Plaintiff, the Respondent to the Notice of Motion. Ms McManus appeared pro bono for the Plaintiff. On 17 December 2004, Wood CJ at CL had certified, for the purposes of Part 66A r 4(3) SCR that it is in the interests of the administration of justice that the Plaintiff be referred for legal assistance for the purpose of the hearing of the Defendant’s Notice of Motion for a stay or dismissal of the proceedings. Pursuant to that referral, Ms McManus appeared for the Plaintiff. The Court was assisted by the submissions of counsel on this unusual application.

4 The following evidence was read or tendered in the Defendant’s case on the present application:

(a) affidavit of Corrie Rebecca Goodhand sworn 16 December 2004;

(b) Exhibit CRG1 to that being a folder containing pleadings, transcripts, affidavits, correspondence and other documents relevant to the application;

(c) affidavit of Corrie Rebecca Goodhand sworn 23 December 2004;

(d) affidavit of Corrie Rebecca Goodhand sworn 26 May 2005.

5 These documents were admitted without objection and Ms Goodhand was not required for cross-examination.

6 The Plaintiff did not swear an affidavit or give evidence on this application. I raised with Ms McManus the absence of evidence from the Plaintiff concerning the destruction of the cassette tape. Ms McManus submitted, correctly, that the Plaintiff faced a difficulty with self incrimination (T11.58, 23 August 2005). The Plaintiff made no application to give evidence with the protection of a certificate under s.128 Evidence Act 1995. Nor did he seek to utilise the provisions contained in s.87 Civil Procedure Act 2005 concerning protection against self incrimination in relation to interlocutory matters. The material relied upon to throw light upon the Plaintiff’s conduct arose from the contents of affidavits of the Plaintiff’s former legal representatives. I will return to these matters later in this judgment.

7 Ms McManus sought to read an affidavit of Dr David Moore sworn 5 August 2005 on the application. The Defendant objected to this and I heard submissions on the question. In a separate judgment delivered on 23 August 2005, I rejected the affidavit of Dr Moore. There were a number of reasons for rejecting this affidavit. It had been served late and well outside the timetable for service of evidence. The primary reason for rejecting the affidavit, however, related to the absence of any evidence from the Plaintiff which could relate the contents of Dr Moore’s affidavit (concerning treatment provided to the Plaintiff) to the events of 12 October 2004 when the Plaintiff destroyed the cassette tape.

History of the Proceedings

8 It is appropriate to set out in some detail the history of proceedings brought by the Plaintiff to place in context the Defendant’s application arising from the unusual circumstances of this case.

9 The following outline of the history of the proceedings emerges from the affidavits of Ms Goodhand and the documents contained in Exhibit CRG1. There is no controversy concerning these matters until the events of 12 October 2004.

Events from June 1997 to 12 October 2004

10 The Plaintiff commenced proceedings in the Taree District Court on 1 September 1998 against Senior Constable Thomas Cusack (“Senior Constable Cusack”) and the Director of Public Prosecutions. Put shortly, the Plaintiff alleged in this claim that on 11 June 1997, Senior Constable Cusack solicited a bribe of $50,000.00 which the Plaintiff refused to pay. It was alleged that, because of this refusal, Senior Constable Cusack prosecuted the Plaintiff maliciously for a charge of aggravated indecent assault. Having been convicted of the offence in the Local Court, the Plaintiff appealed to the Parramatta District Court where, on 27 July 1998, the Director of Public Prosecutions offered no evidence and the appeal was upheld.

11 The Plaintiff amended his claim several times in the District Court and the claim was, on occasions, not reached or did not proceed to hearing for other reasons.

12 On 15 May 2001, the Plaintiff filed a Summons in the Supreme Court seeking transfer of the District Court proceedings to that Court.

13 On 21 May 2001, the Plaintiff filed a Statement of Claim in the Supreme Court. That Claim has been amended on three occasions. It was common ground before me that the Plaintiff’s claims now appear completely within the Further Amended Statement of Claim filed on 23 April 2004. It was that Claim which was listed for hearing before Wood CJ at CL by way of a judge-alone trial to commence on 11 October 2004 (T29, 23 August 2005).

The Further Amended Statement of Claim

14 The sole Defendant in the proceedings brought by the Plaintiff is the State of New South Wales. The Plaintiff’s claim relates to three sets of criminal proceedings which were brought against him.

15 The Defendant is sued pursuant to the Crown Proceedings Act 1998 in respect of the alleged acts and omissions of officers of the New South Wales Police pursuant to the Law Reform (Vicarious Liability) Act 1983.

16 The first claim alleges false arrest, false imprisonment and malicious prosecution arising from charges brought by Senior Constable Cusack and Detective Senior Constable Birch of Burwood Police Station on 11 June 1997. The first charge arose when the Plaintiff was allegedly alone with a boy named TR who escaped from the Plaintiff to a restaurant complaining of being indecently assaulted by him. The Plaintiff was prosecuted in the Local Court and was legally represented in those proceedings. He was convicted of the charge of aggravated indecent assault on 23 October 1997 following a hearing before Mr Ashton, Magistrate, at the Burwood Local Court. By way of sentence, the Plaintiff was ordered to perform 200 hours community service. Thereafter, he appealed to the District Court against conviction. TR declined to give evidence again and, as a result, the Director of Public Prosecutions offered no evidence at the hearing of the appeal in the District Court. On 27 July 1998, her Honour Judge Karpin, at the Parramatta District Court, allowed the appeal and set aside the conviction and sentence.

17 The Further Amended Statement of Claim included in the particulars of malice with respect to this prosecution an allegation of collateral and/or improper purpose being to conceal evidence of a corrupt demand allegedly made by Senior Constable Cusack to the Plaintiff that the Plaintiff pay to Senior Constable Cusack an amount of $50,000.00 to prevent the Plaintiff being charged.

18 The second proceedings allege false arrest, false imprisonment and malicious prosecution arising from charges brought by Detective Senior Constable Metcalf and Constable Muxlow of Taree Police Station on 21 February 2000. The Plaintiff was charged with seven counts of using a false instrument contrary to s.300(2) Crimes Act 1900 and seven charges of serving or causing to be served false tribunal documents contrary to s.4 Unauthorised Documents Act 1922. The Crimes Act charges were withdrawn at the Taree Local Court on 8 August 2000 and the prosecution proceeded with the charges under the Unauthorised Documents Act 1922. On 23 March 2001, the Plaintiff was convicted in the Local Court on each of the seven counts alleging offences under the Unauthorised Documents Act 1922. On appeal against conviction to the District Court, the Plaintiff’s appeal was allowed with respect to some counts and dismissed with respect to the balance.

19 The third proceedings allege false arrest, false imprisonment and malicious prosecution arising from a charge brought by Detective Senior Constable Metcalf and Constable Muxlow of Taree Police Station on 29 February 2000. The Plaintiff was charged with perverting the course of justice under s.319 Crimes Act 1900. This charge arose when the Plaintiff appeared before his Honour Judge Christie QC at the Taree District Court on 23 February 2000. The Plaintiff had an appeal matter before the Taree District Court and was appearing for himself. The Plaintiff announced that he had some sensitive issues to raise and requested that the parties speak to the presiding Judge in Chambers about those matters. In the Judge’s Chambers, the Plaintiff alleged that he had been informed by a Constable Smoothy that his Honour Judge Christie QC was corrupt and accepted bribes and that his Honour and his wife were part owners in a Sydney hotel through which money was laundered for organised crime. The Plaintiff was charged with perverting the course of justice, was tried unrepresented and convicted following a trial before Dowd J and a jury in the Supreme Court. The Plaintiff was sentenced to imprisonment for 12 months to be served by way of period detention. Upon appeal to the Court of Criminal Appeal, the Court found error in the summing of the trial Judge, quashed the conviction, but determined, for discretionary reasons, that a new trial should not be ordered and that a verdict of acquittal ought be entered: R v Clark [2002] NSWCCA 16.

20 The Further Amended Statement of Claim alleged abuse of process with respect to the three sets of charges. The particulars of improper object included an allegation that criminal process was utilised by the police officers in an effort to justify the unlawful charging and arrest of the Plaintiff on the three occasions and in an effort to conceal earlier improper investigations against the Plaintiff and to conceal improper conduct on the part of the police officers.

21 The Further Amended Statement of Claim included each of the Plaintiff’s claims with respect to the three sets of charges. The matter was listed for hearing before Wood CJ at CL commencing on 11 October 2004 with an estimate of 10 hearing days. Mr Steirn SC and Mr A Kostopoulos were briefed to appear for the Plaintiff instructed by Ms Pamela Mileski of Greg Walsh & Co, Solicitors. Mr Neil QC and Mr Aquilina were briefed to appear for the Defendant at the hearing of the Plaintiff’s claims.

22 The matter was mentioned before Wood CJ at CL on 11 October 2004 and stood over for the hearing to commence before his Honour the next day. Mr Steirn SC informed his Honour on 11 October 2004:

“STEIRN: Subject to some documents we are gathering together, we will be in a position to proceed with the matter tomorrow.

HIS HONOUR: I am going to require each of you to prepare an outline as to your submissions on liability and similarly to each prepare a schedule as to what damages you say are payable in the event the plaintiff succeeds. That’s my standard practice these days in any case of any length, and I want you to itemise each item of damages and what you say is either properly recoverable or properly payable.”

Events on 12 October 2004

23 When the matter was called on 12 October 2004, Mr Steirn SC informed the Court that the matter should not proceed “in the interests of justice to both sides”. He said (T1, 12 October 2004):

“STEIRN: Contrary to what I put to the court yesterday, this matter in my submission is not ready to proceed. However, they are not my instructions. My instructions are in fact to proceed, according to my client’s wishes. May I elaborate?

HIS HONOUR: I do not understand what you said. Are you seeking an adjournment or is the matter proceeding?

STEIRN: In my submission this matter should not proceed in the interests of justice to both sides.”

24 Mr Steirn SC then outlined the position to his Honour. He submitted that the “main plank” of the Plaintiff’s case related to the arrest on 11 June 1997 and a conversation between Senior Constable Cusack and the Plaintiff in which the police officer allegedly solicited a bribe of $50,000.00 in exchange for which the Plaintiff would not be charged with indecent assault. Mr Steirn SC that the conversation was alleged to be in the following terms (T1.40, 12 October 2004):

“’CUSSACK: Are you a player?
PLAINTIFF: Pardon?

CUSSACK: Are you a player?
PLAINTIFF: I don’t understand.

CUSSACK: Once we go through that door you will be charged. For 50 grand you could walk.
PLAINTIFF: I haven’t done anything.

CUSSACK: I know the kid [the complainant] is full of shit. For 50 grand you walk. No charge, no publicity.
PLAINTIFF: You do what you want to do but I won’t pay anything.

CUSSACK: Well’ I’ll burn you and Chris Murphy’.”

25 Mr Murphy, solicitor, appeared for the Plaintiff in the proceedings arising from the first charge.

26 Mr Steirn SC then informed Wood CJ at CL that the conversation had been allegedly tape recorded by the Plaintiff (T2.7):

“Now the court should know, as indeed the defendant does know now, that particular conversation which is in precise terms was recorded by the plaintiff at the time by the use of a pocket recorder. The plaintiff kept that cassette and later on when Mr Walsh, my instructing solicitor, became involved in the matter he, Mr Walsh, listened to that cassette and because of distortions and background noises one was unable to hear those precise words. The consequence was that the plaintiff obtained an enhanced version of that cassette and it was recorded on a disk, which is a modern way of doing things I understand.

That disk, your Honour, was listened to back in February of this year by Mr Walsh of course, by my junior Mr Kostopoulos, and then other counsel in the matter, Mr Graham Ellis. I am instructed, and I accept for the purpose of this submission that those words that I previously read to you are as clear as a bell.”

27 Mr Steirn SC explained that, when he came into the matter, he turned his mind to the provisions contained in s.5(3)(b)(i) Listening Devices Act 1984 concerning recording a conversation as a means of protecting the lawful interests of a participant in the conversation (T2.26). He informed the Court that he had required the original type and an enhanced version of it to be played in his presence, but that he was unable to hear the tape and could not hear what was supposed to be on the enhanced version. He said that “you cannot intelligently decipher what was said on the original tape” (T2.41). He explained that efforts had been made the previous day by experts to re-enhance the copy of the tape, but that these efforts had been unsuccessful. Mr Steirn SC then said (T2.49):

“It is my view that that piece of evidence is probably the main plank in the plaintiff’s case because if it be true then that evidence would stand unassailed in my respectful submission. Absent that evidence, the plaintiff is in a very difficult position given the fact that he was there by himself.

It is my respectful submission that that evidence should come before this court as part of the plaintiff’s case and copies should be given to the other side for them to obtain instructions. But that cannot be done of course until the original is retested and/or enhancements made.

It is my respectful submission that the matter should be adjourned in the plaintiff’s own interests.

Having said that, I was told not one minute before your Honour came on the bench that the plaintiff wishes to continue regardless. So therefore my instructions at the end of the day are for the matter to proceed. But not unnaturally, when I learnt of the predicament which the plaintiff had suffered, I communicated my concerns to Mr Neil early this morning having received instructions from my solicitor Mr Walsh that the matter should be adjourned for the reasons I have given. Those instructions have since changed.”

28 Discussion ensued between his Honour, Mr Steirn SC and Mr Neil QC as to the appropriate course to be followed in the circumstances. Mr Neil QC informed the Court that the conversation alleged had been particularised previously and was completely denied (T3.40). Wood CJ at CL observed (T3.44):

“HIS HONOUR: It may be denied but if there is a contemporaneous tape recording -- At the moment secondary evidence could be led I assume from Mr Ellis, Mr Walsh and Mr Kostopoulos.

NEIL: There has been some complaint made by the plaintiff about the police to the internal affairs but I am not able to discuss that in court, as I understand the law. What I can tell your Honour is at the plaintiff’s trial where he was originally convicted before a magistrate but the DPP, for reasons which would appear in this trial we say unconnected with the merits of the case --

HIS HONOUR: Convicted or committed?

NEIL: Convicted of a summary charge. It was appealed but the DPP took it over and did not offer any evidence. For reasons we say not connected with the merits of the case.

At the his [sic] trial Mr Cussack’s statement was admitted without objection. Mr Murphy appeared for the plaintiff and there was no allegation of this matter in the trial.

Our concern is if there is anything on this tape, and Mr Steirn was told it was as clear as a bell on the enhanced version, it is a matter of grave import that requires investigation and the difficulties that we would face could include the question of possible independent advice that Mr Cussack would have to take.”

29 Mr Neil QC proposed a way forward which would involve technical examination of the tapes (T4.29):

“I have also put to my learned friend this morning that in terms of when he was asking for an adjournment I did put to him, and I think he agrees although his instructions may have since changed because he told me it was only as your Honour just about came on that his instructions rechanged, that we would like an affidavit setting out the circumstances of this recording, his solicitor’s listening to it and what happened to it and what happened to the enhancement and some regime. At this stage I had thought, perhaps supervised by the court, your Honour or some judicial officer, at which we could ask for the provision of the original, all copies that had been made, a statement of who was the enhancing person so we could interview them and have the provenance and the reliability of these tapes looked at by our experts. We would have to get some experts.

HIS HONOUR: It would have to be a joint situation. I don’t think in these circumstances it would be appropriate for the plaintiff simply to hand the material over without being present at whatever testing took place. It would need to be a joint testing.

NEIL: I would accept that. I had in mind we might bring in some minutes to your Honour, perhaps tomorrow, for a regime that the court would approve because in my submission it is vital.”

30 A question was raised as to the relationship between the conversation allegedly tape recorded and the other arrests and charges of the Plaintiff involved in the second and third proceedings. Mr Steirn SC informed the Court (T.57):

“STEIRN: In essence what we are saying, there was a concerted effort by the police. The police became involved with the plaintiff both at Burwood and his home town of Wingham. Also the Taree police, when they learnt of the plaintiff’s statement of claim in relation to the Burwood incident, the police at both Wingham and Taree took an active role in applying pressure in a variety of ways.

HIS HONOUR: The matters which happened at Taree are in the year 2000. These proceedings were commenced in 2002. What is it that is said incited the Taree police to act in the way it is alleged they acted?

STEIRN: After the criminal proceedings which were finalised at the Burwood court where he was convicted at that stage the plaintiff then dismissed his legal advisers. The matter, as your Honour now knows, went on appeal to the Parramatta court where the DPP offered no evidence. As a consequence of that, the plaintiff acting for himself took out a statement of claim in the District Court of New South Wales commencing the present action. That was in about 1998.

HIS HONOUR: That was based on an allegation of a bribe being demanded or sought.

STEIRN: Yes.

HIS HONOUR: By the use of the expression which is now apparently in vogue of being ‘stamped’.

STEIRN: And it limped along for some years until my current solicitor became involved and the matters brought before this court.

HIS HONOUR: If there is any truth in this it is a very nasty nest of whatever which needs to be investigated and it might cause the defence some difficulty in calling witnesses who would be required to incriminate themselves if there is any truth in it. Or alternatively to give false evidence, or to refuse to give evidence.

STEIRN: It is a can of worms.

NEIL: Alternatively, if it turned out there was nothing in it, it strengthens the defendant’s case.

HIS HONOUR: If there is nothing in it the defence case presumably dies in its tracks.

STEIRN: That’s right. That is why I said at the beginning it is in the plaintiff’s own interests that the matter be adjourned despite his instructions to me. I have to put on the record my instructions.

HIS HONOUR: It may have to be adjourned only on your client’s wishes, but it might be the defence seeks an adjournment.”

31 Whilst instructions were being obtained as to whether an adjournment application was to be made by either Plaintiff or Defendant, the following discussion took place between Wood CJ at CL, Mr Steirn SC and Mr Neil QC concerning a regime for testing the tape in the event that an adjournment occurred (T7.6):

“HIS HONOUR: Do you want to wait until you get some formal instructions? In the meantime if there is to be some regime for testing the tape then you should perhaps prepare some short minutes but I would insist on it being a joint inspection. I have no reason to distrust those who work in the electronic area of the Police Force but I think it is only fair if there has been a problem with it there be a joint regime for testing.

STEIRN: That would be my application too for the reasons your Honour advances.

NEIL: I accept that. However, in order to be able to put forward a regime I would need to get instructions on what the technical systems are, who the people are, what we go to. I may not be able to do it today, to put something before the court, no later than the end of this week I imagine.

HIS HONOUR: The first thing we need to do is decide whether the matter is going to proceed or not.”

32 Following an adjournment, Mr Neil QC informed the Court that his instructions were to consent to an adjournment “on the basis that it would seem to be in the interests of justice” (T8.3). Mr Kostopoulos, junior counsel fro the Plaintiff, informed his Honour that the Plaintiff now sought an adjournment (T8.21). Mr Neil QC said (T8.24):

“NEIL: We consent. Could I just say without prejudice to an application for costs I wish to make that at least costs be reserved. In the future we may want to have this case stayed. I won’t go into that at the moment.

HIS HONOUR: This is premature at this stage. The costs will have to be reserved. If there is substance in the allegation then clearly the plaintiff is entitled to his costs. If there is no substance in the allegations then the defendant will get its costs, but that’s in the future.

NEIL: I would ask your Honour if an affidavit could be filed and served from my learned friend’s instructing solicitor and any other persons that he wishes to put on an affidavit, perhaps some of the gentlemen he mentioned earlier, so we can see the history of the original and all other enhancements and the names of the person who did the enhancing and the names of any persons who have any other copies so that I can take some instructions as to putting before the court a regime for a joint arrangement for expert assessments.

HIS HONOUR: I think that probably should be done, Mr Steirn.

STEIRN: I would not oppose that in the circumstances. That will be done.”

33 Wood CJ at CL vacated the hearing and gave the following directions (T9.8):

“I will direct that the plaintiff file and serve upon the defendant by 5.00 pm on Monday [18 October 2004] next an affidavit identifying the original tape and all enhancements which have been made thereof, together with a list of the persons who have been involved in undertaking enhancements and of the date of those enhancements. I note that the parties will bring in some short minutes to establish a joint regime for the further testing and possible enhancement of the original tape.”

34 His Honour listed the matter on 25 October 2004 “with a view to giving directions as to further testing and possible enhancement of the tape” (T9.28).

Events Following 12 October 2004

35 On 15 October 2004, the Plaintiff wrote to the Crown Solicitor’s Office stating that he was no longer represented by counsel or his solicitors, Greg Walsh & Co, and requesting that all correspondence be directed to his address at Taree. He stated that, when the matter returned for directions on 25 October 2004, he would ask that it be listed for hearing as a matter of urgency.

36 On 18 October 2004, the Defendant’s solicitor received copies of affidavits of Gregory Alexander Walsh sworn 15 October 2004 (the Plaintiff’s former solicitor), Graham Paul Ellis sworn 15 October 2004 (the Plaintiff’s former barrister) and Pamela Mileski sworn 18 October 2004 (a solicitor employed by Mr Walsh who instructed Mr Steirn SC and Mr Kostopoulos on 11 and 12 October 2004). The affidavit of Mr Walsh included the following (paragraphs 24-26):

“24. On the afternoon of the 12th October 2004 I was contacted urgently by Senior Counsel who disclosed to me that a fax had been received from the Plaintiff in which he had indicated that he had destroyed the said mini cassette recording of the conversation between himself and Detective Cusack. Annexed hereto and marked ‘A’ is a true copy of a letter received from the Plaintiff on 12th October 2004. ...

25. I further disclose to this Honourable Court that I telephoned the Plaintiff at approximately 5.00 pm on 12th October 2004 and without going into the details of the said conversation the Plaintiff confirmed that he had destroyed the said tape.

26. I further disclose to this Honourable Court that having regard to the conduct of the Plaintiff in destroying original evidence I can no longer act on the Plaintiff’s behalf. I propose, subject to any further Directions by this Honourable Court, to seek Leave of this Honourable Court to cease acting for the Plaintiff and to file a Notice of Ceasing to Act.”

37 The letter from the Plaintiff annexed to Mr Walsh’s affidavit was dated 12 October 2004 and was addressed to Messrs Walsh, Kostopoulos, Steirn SC and Ms Mileski. The letter said:

“You only had to get me in the witness box I would have produced the original and the CD both crystal clear.

How many times did I say that I wanted to get the tapes before a judge then it would be in his hands, over and over I have stated this?

That’s all you had to do get me in the witness box, the court was the only entity that I would trust with the original tape and copy.

My suspicions were raised when I learnt that a former police officer was now senior council [sic]. I though [sic] and believed the matter is not going to proceed on the 11th October and sure enough out comes this crap about PIC and the matter is adjourned.

And to use Mr Stern’s [sic] word ‘unbelievable’ how can this matter go before several district court judges, registrars, masters and a Supreme Court Judge back in 2002 and they not pick up that the matter should be referred PIC [sic] first.

This I just cannot comprehend.

If only you had put me on the stand, well on the way back to Taree I destroyed the original crystal clear tape and CD. They are scattered from Sydney to my home.

Its [sic] not you that have metal implants in your face, it’s not your family’s lives that have been threatened over this tape. You haven’t had a gun put to your head with the hammer cocked.

Well now there [sic] gone and I am glad, I will now be able to confront Thomas Cusack face to face and the judge will decide who is telling the truth based on all the facts.

Please read attached two previous letters to your office.

I now intend to rest till Friday and return to my normal dose of Efexor I await to hear from you then.”

38 On 25 October 2004, the matter again came before Wood CJ at CL. Mr Steirn SC and Mr Kostopoulos were present and Mr Neil QC and Mr Aquilina appeared for the Defendant. In reply to a question from his Honour concerning the status of the matter, Mr Steirn SC said (T1.37, 25 October 2004):

“STEIRN: In a nutshell, on the evidence before your Honour, as I would understand it, the original tape has been destroyed.”

39 Wood CJ at CL overruled a claim for client legal privilege with respect to the letter from the Plaintiff set out above (T3.33). Exhibited to Mr Walsh’s affidavit was an original compact disc handed to him by the Plaintiff in counsel’s chambers on 6 February 2004 which was said to contain a version of the alleged conversation. Also exhibited to Mr Walsh’s affidavit was a compact disc said to have been created at a sound recording studio in Sydney when attempts were made to record the conversation on the mini cassette tape (paragraph 19, affidavit, GA Walsh, 15 October 2004). The two compact discs were produced to the Court in envelopes which have remained with the Court papers. As I understand it, these compact discs are said to contain copies of the conversation alleged to have been made from the original mini cassette tape. It was not submitted before Wood CJ at CL in October 2004, or at the hearing before me in August 2005, that some further technical analysis could be undertaken with respect to these compact discs. Nor was it submitted that the existence of these compact discs was relevant to the Defendant’s application to stay or dismiss the proceedings. It appears that the critical question, at all times, has been the Plaintiff’s destruction of the original mini cassette tape which was required to be subjected to technical analysis to determine its authenticity.

40 Mr Steirn SC confirmed that the Plaintiff had withdrawn instructions to counsel and his solicitor and leave was granted for each of them to withdraw. The Plaintiff was present. The Plaintiff informed Wood CJ at CL that he would like the matter to proceed “on the first sittings of next year” (T4.26).

41 His Honour said to the Plaintiff (T4.29):

“HIS HONOUR: What I am going to do is put it back before the list judge to reallocate a date, but it won’t get a date until it is ready for hearing. Of course that won’t be on the first day of next year, it will be whenever the court has time next year.

The real question is this. The defendant seeks some information in relation to the history of this tape and its destruction, not so much its destruction, more its history, and it would seem prima facie entitled to that. You will you would need, I think, some time to get some instructions or get someone to advise you, unless you are going to run the case yourself from here on in.

CLARK: I believe I will run the case myself.

HIS HONOUR: You haven’t had a chance to see these short minutes.

CLARK: No, your Honour.

NEIL: They would be preparatory to then revisiting the question of some kind of arrangement for expert assessment of whatever is left.

HIS HONOUR: ... You might well be advised to seek some legal advice, because what occurs from here on in may be highly relevant as to whether you have committed a criminal offence and also as to whether you are guilty of contempt of court in destroying what was to be a potential exhibit in the proceedings.

CLARK: Yes.

HIS HONOUR: You are entitled not to answer questions yourself relating to those matters because you have a privilege against self-incrimination, but I think you need very carefully to consider your position.”

42 The matter was stood over to 19 November 2004 before Wood CJ at CL. On that day, the Plaintiff appeared in person. Mr Aquilina informed the Court that the Defendant would apply to permanently stay the proceedings (T2.37, 19 November 2004). Wood CJ at CL said to the Plaintiff with respect to the Defendant’s foreshadowed motion (T4.30):

“I can indicate that the motion will not be heard by me, having regard to the fact of the history of the proceedings so far, I am merely going to be involved in this matter so far as that initial management is concerned, but having been the trial Judge whose orders, in effect, were disobeyed, it would be utterly inappropriate for me to determine the motion or hear the matter. Do you understand that, Mr Clark?

PLAINTIFF: I understand that, your Honour. I don’t agree with it. I think with your Honour’s experience --

HIS HONOUR: I made orders regarding the tape. You then destroyed it.

PLAINTIFF: But I wasn’t aware of those orders, your Worship.

HIS HONOUR: You were in Court when I made the orders.

PLAINTIFF: I left the courtroom before you ---

HIS HONOUR: You were in Court and you were aware of the orders. Some other Judge will hear it. I am not going to hear the matter.”

43 In the course of submissions concerning the Defendant’s application for costs, the Plaintiff said (T5.12):

“Mr Neil, as he points out in the transcript of that, was acting in the interests of justice. It was on his behalf that the matter was to be adjourned and he made references to Mr Neil - sorry, Mr Clive Stern, who was in my employ. He made the reference there in the transcript that the matter was in the best interests of justice.

HIS HONOUR: The interests of justice were to allow for the tape, which you said recorded police officers corruptly seeking a bribe from you, to be tested so that everybody could determine whether the tape did in fact record a genuine conversation between police officers who were standing over you and yourself.

PLAINTIFF: Yes.

HIS HONOUR: And it was in your interests, as much as the defence interests, to have that tape tested so that people could determine whether it said what you said it said. You then, on the way home from Court, destroyed the tape. So, you having frustrated the purpose of the adjournment, why should you not bear the costs?

PLAINTIFF: Mr Stern was acting outside my instructions.

HIS HONOUR: He was not. You went out of the Court, you came back, you gave him instructions.

PLAINTIFF: They are documented in writing to Greg Walsh & Co, the tape was, and to be produced when I was in the witness box.

HIS HONOUR: Well, I don’t understand. That was not the effect of the orders. I am going to order that you pay the costs.”

44 In the course of giving judgment on the Defendant’s costs application on 19 November 2004, Wood CJ at CL said (paragraphs 7-9):

“7. I observe that the earlier adjournments and the directions which were made were designed to see whether the original tape could be enhanced. In that regard, it had been alleged by the plaintiff, originally, that the tape was audible. However, when Senior Counsel and the solicitors came to hear it, shortly before the proceedings were due to start, it became apparent that it was no longer audible. That gave rise to the attempts to secure a joint testing and to the additional efforts to enhance the tape which have been frustrated by the plaintiff’s act in destroying the cassette.

8. The State now seeks the costs which have been thrown away on these various occasions. That application is opposed by Mr Clark who says, amongst other things, that he has been threatened by police, pursued by police and otherwise harassed and that, in due course, he will make his claim for damages good, by reference to his own evidence in the proceedings.

9. I am not concerned obviously with the outcome of the case. I have no idea whether or not the plaintiff will make good his claim. However, what is clear at this stage is that, although the matter was fixed to be heard commencing 11 October, the hearing has been frustrated and the further progress of the matter obstructed by the fact of the destruction of the tape.”

45 His Honour directed that the Defendant’s costs be assessed and payable by the Plaintiff forthwith pursuant to Part 52A r 9(3) SCR.

46 On 14 December 2004, the Defendant filed the Notice of Motion to which this judgment relates.

47 On 17 December 2004, Wood CJ at CL issued a certificate for the purposes of Part 66A r 4(3) SCR which led to the Plaintiff receiving pro bono legal assistance for the purpose of this application.

Abuse of Process

48 In support of the application for a stay or dismissal of the proceedings, the Defendant relies principally upon Part 13 r 5 SCR which provides as follows:

“13.5 Frivolity etc

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a) no reasonable cause of action is disclosed,

(b) the proceedings are frivolous or vexatious, or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under subrule (1).”

49 Part 13 r 13.4 UCPR is in similar terms to Part 13 r 5 SCR except that the reference to staying proceedings no longer appears in the Rules. Section 67 Civil Procedure Act 2005 provides:

“67 Stay of proceedings

Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.”

50 The Defendant also called in aid Part 33 r 6(2) SCR which provided:

“(2) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may, on application by any party or of its own motion, stay or dismiss the proceedings.”

51 Section 61(3)(a) Civil Procedure Act 2005 appears to cover the field previously occupied by Part 33 r 6(2) SCR with respect to the power to dismiss proceedings. As mentioned, s.67 Civil Procedure Act 2005 now contains the power to stay.

52 Prima facie, the provisions of the Civil Procedure Act 2005 and the UCPR have application to the present proceedings unless the Court makes an order dispensing with the requirements of the UCPR in relation to the proceedings if that was considered appropriate in the circumstances: clause 5, Schedule 6, Civil Procedure Act 2005.

53 For present purposes, there is no significant difference between the provisions in the SCR or those contained in the Civil Procedure Act 2005 and the UCPR. I will approach the present application upon the basis that the provisions of the Civil Procedure Act 2005 and the UCPR are to be applied.

54 The historical development of Part 13 r 5 SCR was considered by the High Court of Australia in Batistatos (by his Tutor William George Rosebottom) v Roads and Traffic Authority of New South Wales [2006] HCA 27 (“Batistatos”). Gleeson CJ, Gummow, Hayne and Crennan JJ said at paragraphs 24-26:

“[24] If the provenance of Pt 13 r 5 is kept in mind, it is apparent that it serves several purposes, not all of a piece. Rule 5(1)(a) may be traced to the provision made in England in 1883 after the departure of the demurrer. Paragraph (b) of r 5(1) may be seen as a species of the genus of abuse of process identified specifically for the first time in para (c).

[25] A further and significant consideration is that, at the critical time for this litigation, there existed in the Supreme Court both the inherent jurisdiction or power to which reference has been made and the power under Pt 13 r 5 of the Rules to order a stay or dismissal of proceedings as an abuse of the process of the court, in each situation evidence being admissible on an application.

[26] It is with the several fields of operation of Pt 13 r 5 itself and with the duality of available avenues with respect to the agitation of allegations of an abuse of process leading to stay or dismissal, and the attendant possibility of confusion at several levels, that attention should be given to what now follows in these reasons.”

55 The term “abuse of the process of the court” is used in many senses: Batistatos at paragraph 1.

56 What amounts to abuse of court process is insusceptible of a formulation comprising closed categories: Batistatos at paragraph 9.

57 In Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 at 393, Mason CJ, Deane and Dawson JJ accepted as correct a passage in Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; (1982) AC 529 at 536 in which Lord Diplock spoke of:

“... the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.”

58 A distinction has been drawn between the policy considerations affecting abuse of process in criminal proceedings and civil proceedings. In Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 at 520, Mason CJ, Dawson, Toohey and McHugh JJ identified two fundamental policy considerations affecting abuse of process in criminal proceedings:

“The first is that the public interest in the administration of justice requires that the court protect its ability to function as a court of law by ensuring that its processes are used fairly by State and citizen alike. The second is that, unless the court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the court’s processes may lend themselves to oppression and injustice.”

59 These considerations are not present with the same force in civil litigation where the moving party is not the State enforcing the criminal law: Batistatos at paragraph 8. The criteria for determining what amounts to injustice in a civil case will necessarily differ from those appropriate to answering the question in a criminal context: Jago v District Court (NSW) [1989] HCA 46; (1989) 168 CLR 23 at 26.

60 The inherent power to deal with abuse of process exists to enable the Court to protect itself from abuse of its process thereby safeguarding the administration of justice. That purpose may transcend the interest of any particular party to the litigation: Batistatos at paragraph 12.

61 In Batistatos, the High Court determined that it was not necessary that there be an element of contumelious disregard, oppressive conduct or moral delinquency before the power to intervene with respect to abuse of process could be exercised. In this regard, the Court determined that statements to this effect in Birkett v James (1978) AC 297 ought not be followed in Australia: Batistatos at paragraphs 67-70, 137, 142. Gleeson CJ, Gummow, Hayne and Crennan JJ said at paragraph 70 (footnotes excluded):

“What Deane J said in Oceanic Sun Line Special Shipping Company Inc v Fay [(1988) [1988] HCA 32; 165 CLR 197 at 247] with respect to the staying of local proceedings, is applicable also to a case such as the present one. His Honour emphasised that there was no ‘requirement that the continuance of the action would involve moral delinquency on the part of the plaintiff’; what was decisive was the objective effect of the continuation of the action.”

I note that Batistatos was a case involving abuse of process by reason of delay and not conduct of the type involved in this case. Nevertheless, the statements concerning the elements of abuse of process assist in the resolution of the present case.

62 Although his Honour dissented as to the outcome of the appeal in Batistatos, Kirby J agreed with the majority that misconduct or delinquency was not an essential requirement for a stay. Kirby J said at paragraphs 141-142 (footnotes excluded):

“[141] Misconduct not essential for a stay: The suggestion that the respondents had to prove misconduct of some kind on the appellant's part before they could secure relief against proceedings classified as an abuse of process should be rejected. The considerations to be given weight are much more numerous. The preclusory theory of the power, propounded for the appellant, cannot be reconciled with the purposes of the power. The power to terminate or stay proceedings as an abuse of process does not exist simply to punish a party or its legal representatives who deliberately delay proceedings to the disadvantage of other parties. In the exceptional cases to which it applies, the power to stay exists to prevent the conduct, or further conduct, of proceedings that would be fundamentally unfair to another party, because, for example, of serious delay in the commencement, or continuation, of the proceedings.

[142] In some cases an order made under this power, or under analogous powers, will indeed be made to protect the parties proceeded against from the serious injustice involved in subjecting them to litigation in circumstances that render the proceedings grossly unfair. However, part at least of the reasons for the termination of such proceedings, or the provision of a permanent stay, on the ground of an abuse of process, is the self-regard of the court itself. At the one time, the court is protecting parties and defending the ‘temples of justice’. This is inherent in the performance by the court of its jurisdiction and the exercise of its powers. Thus, preclusion by misconduct is a consideration. But it is not the only consideration. Nor is it essential. Of its nature, the power exists for application in a wider range of circumstances.”

63 These principles must be considered against the background of the fundamental right of access to courts by citizens and that such access should not be denied other than in exceptional circumstances: Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 130; Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 at 602; Williams v Spautz at 519; Batistatos at paragraph 157ff.

64 When considering the notion of a fair trial, it should be borne in mind that, for a trial to be fair, it need not be perfect or ideal: Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 at 142; Batistatos at paragraph 163; Commonwealth of Australia v Smith [2005] NSWCA 478 at paragraph 129.

Destruction of Evidence or Potential Evidence

65 In the present case, the Plaintiff destroyed an original cassette tape and a compact disc which were expected at that time to play a significant, if not decisive, role in the civil proceedings then on foot. Those proceedings had been adjourned to allow a process of technical analysis of the tape recordings to be undertaken.

66 In considering what course the Court may take in response to the Plaintiff’s actions in destroying these items, it is appropriate to consider the law’s approach to destruction of material which may be used in evidence in future or current proceedings. These areas were touched upon during submissions.

Criminal Offences

67 Reference should be made to a number of public justice offences contained in Part 7 of the Crimes Act 1900.

68 Section 317 Crimes Act 1900 provides as follows:

“317 Tampering etc with evidence

A person who, with intent to mislead any judicial tribunal in any judicial proceeding:

(a) suppresses, conceals, destroys, alters or falsifies anything knowing that it is or may be required as evidence in any judicial proceeding, or

(b) fabricates false evidence (other than by perjury or suborning perjury), or

(c) knowingly makes use of fabricated false evidence,

is liable to imprisonment for 10 years.”

69 The terms “judicial tribunal” and “judicial proceeding” are defined in s.311(1) of the Crimes Act 1900 as follows:

“’judicial proceeding’ means a proceeding in or before a judicial tribunal in which evidence may be taken on oath.

‘judicial tribunal’ means a person (including a coroner and an arbitrator), court or body authorised by law, or by consent of parties, to conduct a hearing for the purpose of the determination of any matter or thing and includes a person, court or body authorised to conduct a committal proceeding.”

70 Section 319 is in the following terms:

“319 General offence of perverting the course of justice

A person who does any act, or makes any omission, intending in any way to pervert the course of justice, is liable to imprisonment for 14 years.”

71 Section 312 concerns the meaning of “pervert the course of justice” in provisions including s.319. Section 312 provides:

“312 Meaning of ‘pervert the course of justice’

A reference in this Part to perverting the course of justice is a reference to obstructing, preventing, perverting or defeating the course of justice or the administration of the law.”

72 It will be seen that s.317(a) provides for an offence of destroying a thing knowing that it is or may be required as evidence in any judicial proceeding with intent to mislead any judicial tribunal in such a proceeding. The proper construction of s.317 was considered by Latham J in Director of Public Prosecutions v Aydogan and Gosper [2006] NSWSC 558 in the context of a charge of fabricating false evidence under s.317(b) of the Act. Her Honour considered a number of authorities concerning the common law offence of attempting to pervert the course of justice including The Queen v Rogerson [1992] HCA 25; (1991-1992) 174 CLR 268. Latham J said at paragraphs 25-27:

“25 It is therefore beyond doubt that an offence amounting to an attempt to pervert the course of justice may be committed regardless of whether the false document or record or accusation finds its way into evidence in a judicial proceeding. The authorities also remark on the wide variety of conduct capable of amounting to an attempt to pervert the course of justice under the common law. Indeed, the range of conduct capable of amounting to a perversion of the course of justice warranted the retention of the general offence in the Crimes Act, notwithstanding the creation of other substantive offences within Part 7. It should not therefore be assumed that conduct is not capable of coming within more than one of the offences in Part 7.

26 Disregarding Divisions 1 and 5, Part 7 consists of three broad categories of offences: offences arising out of conduct which is antecedent to the institution of proceedings (Division 2); offences arising out of conduct that interferes with the proper performance of obligations undertaken by persons engaged in judicial proceedings (Division 3); offences arising out of conduct by persons in the course of judicial proceedings (Division 4). When one has regard to the qualifying words appearing in s 317(b), that is, ‘other than by perjury or suborning perjury’, the application of Division 2 to conduct that pre-empts the institution of proceedings is underscored. In the absence of the qualifying words, s 317(b) might be taken to include false testimony. The words appearing in parenthesis put that matter beyond doubt. In my opinion, Division 2 of Part 7 contains those offences which were otherwise recognised under the common law as attempts to pervert the course of justice, as discussed in the authorities at pars 21 to 24 above.

27 In the light of this analysis and taking into account the intention of the legislature to substitute statutory offences for the common law offences relating to interferences with the administration of justice, of which Division 2 of Part 7 is an expression, I can see no basis for adopting a construction of s 317(b) and (c) which would confine the offence either to physical items per se, or to physical items introduced into evidence or intended to be introduced into evidence.”

73 Although the present application does not involve determination of a criminal charge against the Plaintiff, it may be seen from the abovementioned statutory provisions and the analysis of those provisions by Latham J in Director of Public Prosecutions v Aydogan and Gosper, that the action of the Plaintiff of destroying the tape recordings appears to be capable of falling within one or other of those offences. Clearly, issues would arise concerning the Plaintiff’s intention at the time of destroying the tape recording. That said, however, the fact that his conduct in destroying the items appears capable of being characterised as criminal in nature is a factor to bear in mind in approaching the Defendant’s application in this case.

The Tort of Spoliation of Evidence

74 The relief being sought by the Defendant on this application does not, of course, involve any claim for damages or compensation against the Plaintiff. The Defendant seeks to bring to an end the Plaintiff’s claim for relief against it. The tort of spoliation of evidence was touched upon in submissions.

75 The tort of spoliation of evidence exists in some States in the United States of America and in Canada: Mills v Central Sydney Area Health Service [2002] NSWSC 728 at paragraph 64ff; British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197; (2002) 7 VR 524 at 580 [161] ff. It has been held that the tort forms no part of the law of Victoria: British American Tobacco Australia Services Limited v Cowell at 582 [164]. Nor does it form part of the law of New Zealand: Burns v National Bank of New Zealand [2003] NZCA 232; [2004] 3 NZLR 289 at paragraph 91. See generally: Witzleb, “Spoliation of Evidence - A New Tort for Australia?” (2003) 11 Tort L Rev 127; Gerber, “Tort: Spoliation of Evidence”, (2005) 79 ALJ 149.

Drawing Unfavourable Inferences Where Destruction of Potential Evidence has Occurred

76 From time to time, courts are required to assess the evidentiary consequences which ought flow when potential evidence in proceedings has been destroyed by a party or witness in proceedings. The question arises as to the nature and content of any inference to be drawn in these circumstances.

77 In Allen v Tobias [1958] HCA 13; (1957-1958) 98 CLR 367, Dixon CJ, McTiernan and Williams JJ considered the consequence which should follow where an agreement was destroyed by the defendant to proceedings before those proceedings had been commenced. Their Honours said at 375:

“Notwithstanding the difficulty which his Honour felt in arriving at a conclusion, there are two grounds why the Court should proceed upon the assumption that the document was so executed. In the first place to presume the fact against the defendant seems but a proper application to the circumstances of the principle omnia praesumuntur contra spoliatorem. It is a far cry from the municipal warfare of the present case to a case in Prize but no statement of the principle could be more apposite than that of Sir Arthur Channell delivering the opinion of the Privy Council in The Ophelia [(1918) 2 AC 206 at 229-230)]: ‘If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case.’

A second reason for acting on the assumption that the agreement was executed by the defendant and his brothers is that the burden of proof is cast upon the defendant.”

78 In Katsilis v Broken Hill Pty Co Limited (1977) 18 ALR 181, Barwick CJ elaborated upon the drawing of inferences in circumstances where an item of potential evidence (a pick) was destroyed in advance of civil proceedings. Although Barwick CJ dissented in the outcome in Katsilis, the principles referred to by the Chief Justice remain applicable. Barwick CJ said at 197-198:

“Ordinarily, though a case is normally better tried on the evidence which is produced than on that which is not, it can properly be said that the failure of a party to give or produce evidence which, in the circumstances of the case, that party in its own interest would be expected to give or produce, warrants the conclusion that, if given or produced, the evidence would not support that party's case. Indeed, in some circumstances it might be inferred that it would support the opponent's case; but, if so, it must depend very much on the circumstances. But, in any case, the inference would depend upon some element of conscious repression or withholding of the evidence. The warrant for the inference must depend upon the deliberation with which the evidence is withheld and the appreciation or likely appreciation of the party of its significance in the case. In my opinion, these propositions are in accord with the decided cases which I have taken occasion to examine.

A passage towards the end of their Lordships' advice in The Ophelia [1916] 2 AC 206 at 229, may call for comment in this connection”.

The Chief Justice set out the passage from The Ophelia (1918) 2 AC 206 at 229-230 referred to in Allen v Tobias and continued:

“I would make two comments on this passage. First, the use of the word 'presumption' might seem to put the matter too high. Of course, in the supposed circumstances the inference that the document, if produced, would not assist the spoliator is, in the circumstances, quite strong. But it merely becomes part of the body of evidence to be considered. Secondly, if the destruction is innocent no such inference can be drawn - that is to say, innocent because the significance of the document is not known or because the destruction was not deliberate but, for example, accidental. But bereft of the opportunity to produce the document to support him, the party who has thus innocently destroyed it is at the disadvantage of its absence. I take no more than this from the quoted passage from their Lordships' advice.

It thus seems to me that before any adverse inference is drawn, it must be possible to conclude that the failure to give evidence or to produce a piece of real evidence is deliberate and that it is likely that the party against whose interest the inference is to be drawn has or has reason to have an appreciation of the relevant nature of the evidence.

Thus, it seems to me that, having regard to what I have said already, there is no reason in this case for drawing any inference from the unavailability of the actual pick in use: ... "

79 In Bridges v Pelly [2001] NSWCA 31, Giles JA (Sheller JA and Brownie AJA agreeing) applied the statement of Barwick CJ in Katsilis in considering a submission arising from the unavailability of certain notes in a medical negligence case. Giles JA said at paragraph 52:

“Contrary to the submission which appears to have been made to the trial judge, unavailability of Mr Pelly's notes did not lead to an inference adverse to the respondent unless the respondent provided ‘an innocent explanation for not providing such notes’. Before such an inference was drawn it was necessary to conclude that there had been some element of conscious repression or withholding, a conclusion to be addressed with regard to relevant evidence with common sense appreciation of the circumstances (in Katsilis v Broken Hill Pty Co Ltd, that the pick may well have fallen unidentified into the employer's general stock of hand tools without design or neglect).”

80 In Marsden v Amalgamated Television Services Pty Limited [2001] NSWSC 510 at paragraph 40, Levine J, in the context of consideration of admissions by conduct, referred to the following statement of principle in Wigmore on Evidence, 3rd edn, 1940, Vol 2, paragraph 278:

“It has always been understood - the inference, indeed, is one of the simplest in human experience - that a party’s falsehood or other fraud in the preparation and presentation of his cause, his fabrication or suppression of evidence by bribery or spoliation, and all similar conduct, is receivable against him as an indication of his consciousness that his case is a weak or unfounded one; and from that consciousness may be inferred the fact itself of the causes lack of truth or merit. The inference thus does not apply itself necessarily to any specific fact in the cause, but operates, indefinitely though strongly, against the whole mass of alleged facts constituting his cause.”

81 Levine J said at paragraph 41:

“That same paragraph (of an earlier edition of Wigmore is referred to by Phillimore J in R v Watt (1905) 20 Cox CC 852 where his Honour (apparently in the course of a summing to the jury) said:

‘The principle is ... that the conduct in the litigation of a party to it, if it is such as to lead to the reasonable inference that he disbelieves in his own case, may be proved and used as evidence against him’ (at 853).”

82 Reference was made during submissions to the decision of the Court of Appeal of England and Wales in Arrow Nominees Inc v Blackledge [2000] EWCA Civ 200. In that case, the defendants applied to strike out the claim by reason of an attempt by a plaintiff to pervert the course of justice by the production, in the course of discovery, of documents which he knew to be forged. The first instance Judge was not satisfied that the past conduct of the plaintiff justified the “Draconian course” which he was being invited to take in striking out the proceedings (paragraph 30). On appeal, the decision of the first instance Judge was reversed. A number of statements of principle appear in the leading judgment of Chadwick LJ (Roch LJ agreeing).

83 Chadwick LJ said at paragraphs 54-55:

“54. I adopt, as a general principle, the observations of Mr Justice Millett in Logicrose Ltd v Southend United Football Club Limited (The Times, 5 March 1988) that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the Court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules - even if such disobedience amounts to contempt for or defiance of the court - if that object is ultimately secured, by (for example) the late production of a document which has been withheld. But where a litigant’s conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled - indeed, I would hold bound - to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. The reason, as it seems to me, is that it is no part of the court’s function to proceed to trial if to do so would give rise to a substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in a trial. His object is inimical to the process which he purports to invoke.

55. Further, in this context, a fair trial is a trial which is conducted without an undue expenditure of time and money; and with a proper regard to the demands of other litigants upon the finite resources of the court. The court does not do justice to the other parties to the proceedings in question if it allows its process to be abused so that the real point in issue becomes subordinated to an investigation into the effect which the admittedly fraudulent conduct of one party in connection with the process of litigation has had on the fairness of the trial itself. That, as it seems to me, is what happened in the present case. The trial was ‘hijacked’ by the need to investigate what documents were false and what documents had been destroyed.”

84 Chadwick LJ continued at paragraph 56:

“In my view, having heard and disbelieved the evidence of Nigel Tobias as to the extent of his fraudulent conduct, and having reached the conclusion (as he did) that Nigel Tobias was persisting in his object of frustrating a fair trial, the judge ought to have considered whether it was fair to the respondents - and in the interests of the administration of justice generally - to allow the trial to continue. If he had considered that question, then - as it seems to me - he should have come to the conclusion that it must be answered in the negative. A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned; rather, it is a proper and necessary response where a party has shown that his object is not to have the fair trial which it is the court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.”

85 Ward LJ agreed with Chadwick LJ and said, in a separate judgment, at paragraph 74 and 77:

“74. This was, therefore, a flagrant and continuing affront to the court. Striking out is not a disproportionate remedy for such an abuse, even when the petitioners lose so much of the fruits of their labour.

...

77. I have had the opportunity to read in draft the copy of the judgment of Chadwick LJ and I agree with it. I have added these words of my own simply to underline that the principles to apply are those in the new procedural code. They are encapsulated by the need to do justice, case by case. In this case it is no more than justice in that broad sense that the petitioners should be denied the relief which they sought to obtain by persistent cheating.”

86 In reaching these conclusions, the Court of Appeal in Arrow Nominees relied in part on the principles in Birkett v James. As mentioned earlier in this judgment, the High Court in Batistatos has determined that the principles in Birkett v James do not apply in Australia. To this extent, a less onerous test of abuse of process applies in this case given that it is not required to demonstrate blameworthiness or delinquency on such an application.

87 Reference was made in Arrow Nominees to the decision of Millett J in Logicrose Limited v Southend United Football Company Limited (Chancery Division, 5 February 1988). In that case, the principal director and shareholder of the plaintiff (and its principal witness) was alleged to have failed to disclose the existence of a crucial document in his possession or power and, having obtained it during the course of the trial (and during the course of his cross-examination) had deliberately suppressed it and for a time successfully concealed its existence from the Court. Millett J was not satisfied that there had been a deliberate attempt to suppress the document in question. His Lordship said, however, that he would in any event have refused to accede to the dismissal application once the missing document had been produced because the object of the relevant rules was not to punish the offender for his conduct, but to secure the fair trial of the action in accordance with the due process of the Court. Millett J was satisfied that there was no risk of injustice if the trial was allowed to continue. His Lordship said:

“The deliberate and successful suppression of the material document is a serious abuse of the process of the court and may well merit the exclusion of the offender from all other participation in the trial. The reason is that it makes the fair trial of the action impossible to achieve and any judgment in favour of the offender unsafe. But if the threat of such exclusion produces the missing document, then the object of Order 24 R16 is achieved.”

88 The decisions in Logicrose and Arrow Nominees were considered by the Victorian Court of Appeal in British American Tobacco Australia Services Limited v Cowell. In that case, the issue concerned the consequences which ought flow from the destruction of documents by the defendant prior to the commencement of the proceedings. The trial Judge, Eames J, held that the defendant had failed to comply with orders for discovery and had subverted the process of discovery with a deliberate intention of denying the plaintiff a fair trial. His Honour struck out the defence and gave judgment for the plaintiff. The jury assessed damages and the defendant appealed.

89 On appeal, the Court of Appeal (Phillips, Batt and Buchanan JJA) distinguished Logicrose upon the basis that the destruction of documents in the case under appeal had occurred before the commencement of proceedings (at 577 [151]). The Court of Appeal referred to a submission made by the defendant by reference to Logicrose at 577 [152]:

“For its part, the defendant relied upon this passage in the judgment of Millett J:

‘This might well be the case [ie exceptional circumstances requiring action by the court] if it was no longer possible to remedy the consequences of the document’s suppression despite its production, perhaps because a material witness who could have dealt with the document had died in the meantime or where, despite the production of the document, there was reason to believe that other documents have been destroyed or remain concealed. But I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice’. (emphasis added)

With some force, counsel for the defendant submitted to us that at first instance on this occasion the judge had indeed allowed his indignation to carry the day. His Honour expressly accepted that this was not a case for punishment for misconduct: his Honour addressed the question whether there was a real risk that the further conduct of proceedings must be unsatisfactory, but in the context of misconduct allegedly occurring before the commencement of the proceeding, not during it.”

90 Reference was made to the decision in Arrow Nominees. With respect to Arrow Nominees, the Court of Appeal said at 580 [160]:

“Two things may be said of this. First, this was a case in which, after the commencement of the proceeding, Tobias had deliberately indulged in fraudulent conduct designed to mislead the court by the production in the course of discovery of documents which he knew to be forged and, secondly, he had persisted in that fraudulent conduct during the proceeding. The case therefore says nothing directly about conduct, such as the destruction of documents, before the commencement of the proceeding It was anyway, quite plainly, a case of one party attempting to pervert the course of justice.”

91 The Court of Appeal said at 585 [172]:

“The foregoing is sufficient to demonstrate how limited is the nature of the authority available. Nothing governs directly, and there are many questions raised (especially by the cases in England) even where the destruction of documents occurs after the commencement of a proceeding, let alone before it. The judge here was disposed to accept a ‘fair trial’ as constituting the relevant criterion, but when documents are destroyed before the commencement of a proceeding, that test is less than helpful. After all, what is a ‘fair trial’? According to the defendant, there is a fair trial if, according to the rules of court and the obligations of the parties to the court, the court adjudicates upon the documents put in evidence and the oral testimony of the witnesses during the hearing. Of course what is a ‘fair trial’ must inform any test which is adopted, but it cannot stand in place of one.”

92 The Court of Appeal at 586[173] observed that an appropriate balance ought be struck with respect to the defendant’s approach to document retention in that case:

“As indicated at the outset, it seems to us that there must be some balance struck between the right of any company to manage its own documents, whether by retaining them or destroying them, and the right of the litigant to have resort to the documents of the other side. The balance can be struck, we think, if it be accepted that the destruction of documents, before the commencement of litigation, may attract a sanction (other than the drawing of adverse inferences) if that conduct amounts to an attempt to pervert the course of justice or (if open) contempt of court, meaning criminal contempt (inasmuch as civil contempt comprises wilful disobedience of a court order [See, for example, Miller on Contempt of Court, 2nd ed, (1989), pp 2–3; Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98 at 106; The Broken Hill Proprietary Company Ltd v Dagi [1996] VicRp 62; [1996] 2 VR 117 at 169–73] and will ordinarily be irrelevant prior to the commencement of proceedings). Such a test seems to sit well with what has been said in the United States as well as what has been said in England. Whether contempt, even criminal contempt, is possible before any proceeding has been instituted need not be examined on this occasion. (For instance, in James v Robinson [(1963) [1963] HCA 32; 109 CLR 593], which did not involve disobedience of a court order, it was said that that there can be no contempt of court before there is any litigation actually on foot, but, as the majority in the High Court pointed out [at 602], that case concerned only the narrower type of contempt, namely interference with the fair trial of a particular. Certainly, there can be an attempt to pervert the course of justice before a proceeding is on foot, as R v Rogerson [(1992) [1992] HCA 25; 174 CLR 268. See also Meissner v R [1995] HCA 41; (1995) 184 CLR 132 especially at 144] demonstrates, and that, we think, provides a satisfactory criterion in the present instance. The standard of proof is the civil rather than the criminal standard, bearing in mind also the seriousness of the allegation as required by Dixon J in Briginshaw v Briginshaw [(1938) [1938] HCA 34; 60 CLR 336 at 361–2] (as modified or explained in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [(1992) [1992] HCA 66; 110 ALR 449 ; 67 ALJR 170]. Both attempting to pervert the course of justice and contempt of court (in the relevant sense) are criminal offences, but where a civil sanction is sought a civil standard of proof suffices: Helton v Allen [(1940) [1940] HCA 20; 63 CLR 691] and Rejfek v McElroy [(1965) [1965] HCA 46; 112 CLR 517 compare Logicrose per Millett J[1999] HCA 66; [201 CLR 1 at 13]. There is considerable force, we think, in Mr Myers’ submission that the rule of law is endangered if intervention by the court, for conduct occurring before the commencement of litigation, were to be grounded otherwise than on illegality, albeit illegality proved to the civil standard.”

93 The Court laid down the following principle where one party alleges against another party the destruction of documents before the commencement of the proceedings at 587 [175]:

“Accordingly, there being no authority directly in point, we consider that this court should state plainly that where one party alleges against the other the destruction of documents before the commencement of the proceeding to the prejudice of the party complaining, the criterion for the court’s intervention (otherwise than by the drawing of adverse inferences, and particularly if the sanction sought is the striking out of the pleading) is whether that conduct of the other party amounted to an attempt to pervert the course of justice or, if open, contempt of court occurring before the litigation was on foot. We say nothing about the drawing of adverse inferences because that is not raised for consideration on this appeal. Nor, for the reason already given, do we express any opinion at all on whether the conduct which was under challenge in this instance, and which the defendant sought to justify by reference to its document retention policy, did or did not amount to an attempt to pervert the course of justice. That it did was not the case raised and considered below and so for the purpose of this appeal it must be taken that at first instance the court was not entitled to impose any sanction on that ground. More particularly it must follow too, contrary to his Honour’s conclusion, that the destruction of documents by the defendant in March–April 1998, and before, was not shown to be in breach of any rules relating to discovery in this proceeding.”

94 Although these principles are significant to the resolution of the present application, it must be borne in mind that the present case involves destruction of potential evidence whilst proceedings are on foot and not prior to the commencement of proceedings.

95 The principles emerging from Arrow Nominees and British American Tobacco Services Limited v Cowell were considered by Chesterman J of the Supreme Court of Queensland in Fuji Xerox Australia Pty Limited v Lee [2003] QSC 303.

96 In Fuji, the defendant applied for orders that the plaintiff’s claim be struck out or dismissed as an abuse of process or stayed permanently. The grounds advanced in support of the application alleged that the plaintiff had destroyed critical evidence before the commencement of proceedings. It was alleged that the conduct amounted to an attempt to pervert the course of justice and/or contempt of court. The defendant submitted that there could not be a fair trial of the action without the evidence which the plaintiff had destroyed. The claim related to a rental agreement of a photocopier. Following the termination of the agreement, the plaintiff took possession of the photocopier. It was leased to another entity and then returned to the plaintiff. The photocopier was destroyed along with several other machines of an identical type prior to the commencement of proceedings. The fact that the machine had been destroyed did not become known until after the proceedings were on foot. Chesterman J said at paragraph 8:

“I accept the defendant’s submission that if it be shown that the photocopier was destroyed in order to deprive him of critical evidence and prevent him advancing a good arguable the case the court would intervene to ensure that the attempt to distort the course of justice did not succeed. The particular order to achieve that end would depend on the circumstances.”

97 After referring to British American Tobacco Australia Services Limited v Cowell at paragraphs 173, 175, Chesterman J, at paragraphs 9 and 10, referred to the principles in The Queen v Rogerson:

“[9] According to Brennan and Toohey JJ in R v Rogerson (1991–[1992] HCA 25; 1992) 174 CLR 268–279:

The course of justice is perverted ... by impairing ... the capacity of a court ... to do justice. The ways in which a court ... may be impaired in ... its capacity to do justice are various. Those ways comprehend ... erosion of the integrity of the court ... hindering of access to it, deflecting applications that would be made to it, denying it knowledge of the relevant law or of the true circumstances of the case, and impeding the free exercise of its jurisdiction and powers ...

[10] This would seem to be a case of denying the court knowledge of the true circumstances relevant to the determination the court is called upon to make.”

98 Chesterman J referred to Arrow Nominees and the facts of the case before him and said at paragraph 14 - 16:

[14] It is not the case that a trial will only be fair if all possible evidence relevant to the issues in dispute is available to the parties. It is common experience that witnesses die or cannot be found, or that documents are lost or that objects or scenes which may help to determine a disputed course of events change or are obliterated. The parties must do the best they can with what is available. A trial in which a witness, even a critical witness cannot be called can still be fair.

[15] The remedy sought by the defendant’s application is drastic. It is to preclude the plaintiff from pursuing what is an arguable right to recover a substantial sum of money. I apprehend that a court would only accede to such an application where it is clear that there cannot be a fair trial and that that consequence is a result of the deliberate action of a party to the litigation.

[16] In this regard the intention of the person who destroys evidence or puts it beyond the reach of his opponent is critical. Actions which are themselves lawful may amount to a contempt of court if done with the intention to interfere with the course of justice. This was pointed out by the High Court in Lane v The Registrar of the Supreme Court of New South Wales [1981] HCA 35; (1981) 148 CLR 245 at 258 at which the court (Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ) said:

‘Thus it may be lawful for one man to advise another to take a holiday in Brazil, but the giving of the advice may constitute a contempt of court if the advice is given for the purpose of keeping the witness out of the way to avoid service of a subpoena. It may be lawful to dismiss a servant ... but if this is done for the purpose of punishing him for having given evidence it is a contempt of court’.”

99 Chesterman J dismissed the defendant’s application having concluded at paragraphs 41 and 42:

[41] It will be remembered that the photocopier was destroyed before the action was commenced. I have already drawn attention to the terms of the correspondence from the defendant’s solicitors which did not request that the photocopier be retained for the purposes of an inspection.

[42] There being evidence that the photocopier was not destroyed in order to defeat the defendant’s case and there being some evidence that an inspection would not produce anything of relevance it is not an appropriate case to enter judgment for the defendant.”

Principles Applicable to this Case

100 The principles surrounding the consequences of destruction of potential evidence by a party have emerged largely from cases where destruction has occurred before the commencement of proceedings.

101 Applications for a stay or dismissal of proceedings (Fuji) or entry of a verdict for the defendant (British American Tobacco Australia Services Limited v Cowell) have not been granted. Where destruction of potential evidence or fabrication of evidence has occurred after proceedings have commenced (Arrow Nominees), dismissal of proceedings has been ordered. In cases where material is intentionally suppressed but is finally produced (Logicrose), the Court has taken the view that the Court’s processes have not been defeated and that the proceedings should be allowed to proceed.

102 In other cases, the issue has been left to the drawing of inferences adverse to the party who has destroyed the material prior to trial, applying the principles in Allen v Tobias and Katsilis. Whether an adverse inference will be drawn, and the strength of the inference, will depend upon the particular circumstances of the case. In a clear case of conscious destruction of material which was likely to be used in evidence, a strong inference adverse to the destroying party may be drawn with the ultimate inference being of the type referred to in Marsden v Amalgamated Television Services Pty Limited.

103 However, the remedies available in such circumstances are not confined to the drawing of appropriate inferences. If the conduct of the destroying party may be characterised as an abuse of process, then the power of the court to stay or dismiss proceedings may be utilised in an appropriate case. This power is to be exercised sparingly.

104 Ordinarily, a party is entitled to initiate and continue proceedings with the court determining those proceedings on their merits. Where, however, a party to proceedings intentionally destroys material which is significant to the determination of the proceedings, and such destruction occurs after the proceedings have been commenced, then a clear foundation would appear to exist for the court to call in aid its power to stay or dismiss the proceedings. The court will have in mind the interests of the individual parties to the civil proceedings, but also the protection of the administration of justice and the integrity of the courts and the system of justice generally. Resolution of an application for a stay or dismissal of the proceedings will consider the question whether a fair trial may take place in the absence of the destroyed material even where an appropriate inference may be drawn adverse to the destroying party.

105 I turn to the submissions made by the parties in the present case with this analysis of the relevant principles in mind.

The Submissions of the Parties

The Defendant’s Submissions

106 Mr Neil QC submitted that the Plaintiff had destroyed on 12 October 2004 items which the Plaintiff’s then senior counsel had described to Wood CJ at CL as the “main plank” of his case. This had occurred on the very day when his Honour had made orders for the purpose of the tape being subjected to technical analysis for further evidentiary use in the proceedings.

107 The tape recording was said by the Plaintiff to contain a conversation including the soliciting of a bribe by a police officer. The words recorded on the tape had been enhanced on a compact disc and it was alleged that Mr Ellis of counsel and Mr Walsh, the Plaintiff’s then solicitor, played the compact disc and heard a conversation in which the alleged soliciting of a bribe was audible. The Plaintiff had destroyed the original cassette tape and the compact disc and his actions had permanently deprived the Defendant of an opportunity of having either of them forensically tested as was contemplated by the orders of the Court.

108 The Defendant submitted that Mr Ellis, Mr Walsh and the Plaintiff were the only persons who had the benefit of hearing the compact disc and only the Plaintiff had heard both the compact disc and the cassette tape. Were the matter to be further litigated, the Plaintiff would have an unfair advantage over the Defendant if oral evidence was given by these persons in the form of secondary evidence of the words allegedly spoken in the recordings. It was submitted that, to allow the case to proceed, would be oppressive and an abuse of process.

109 The Defendant submitted that the Plaintiff had deliberately flouted the direction of the Court given on 12 October 2004.

110 Mr Neil QC submitted that the destruction of the critical evidence amounted to an attempt to pervert the course of justice and that there cannot be a fair trial of the action without the evidence which the Plaintiff has destroyed. He submitted that the destruction of the tape amounted to an abuse of process. Reliance was placed upon The Queen v Rogerson at 279 in support of this proposition.

111 Mr Neil QC submitted that the destruction of the tape constituted a successful attempt by the Plaintiff to deny the Court of knowledge of the true circumstances relevant to the determination which the Court would be called upon to make. In this regard, reliance was placed upon the principles in Arrow Nominees.

112 It was stressed that the Defendant and his legal representatives had no opportunity to hear the tape played, unlike the Plaintiff and his legal representatives, nor had the Defendant access to the tape for forensic testing. Were the matter permitted to proceed to trial, the Defendant submitted that it would be significantly and irreparably prejudiced having been permanently deprived of this opportunity.

113 If the matter proceeded to trial and the Plaintiff sought to lead secondary evidence of the contents of the tape, the Defendant would not be in a position to contest it and this would work a significant prejudice against the Defendant. In these circumstances, Mr Neil QC submitted that there was a significant risk to a fair trial or a significant risk of an unfair trial.

114 Mr Neil QC referred to Fuji and stressed that the destruction of material in that case preceded the commencement of proceedings. In the present case, the Plaintiff destroyed the tape and compact disc not only after the proceedings had been commenced, but at a critical juncture in the proceedings where the items were to play a critical role in the determination of the proceedings. The Defendant submitted that the Plaintiff’s deliberate and contumacious disregard for the Court’s directions had created a significant forensic disadvantage for the Defendant and, as a consequence, there could not be a fair trial of the proceedings.

115 Mr Neil QC submitted that one of the primary reasons for the proposed joint forensic testing of the tape was to ascertain whether or not it was a forgery. If it proved to be a forgery, then the Plaintiff’s credit would have been significantly, if not totally, diminished. Mr Steirn SC had informed Wood CJ at CL that all of the police officers in the three sets of criminal charges had allegedly acted in collusion and with malice against the Plaintiff. In these circumstances, Mr Neil QC submitted that the loss of the tape created a significant prejudice to the Defendant which has infected its ability to defend all three sets of proceedings which were interrelated in their nature. The Defendant submitted that it was deprived of a significant line of forensic enquiry as a result of the Plaintiff’s deliberate defiance of the Court’s directions and that a fair trial of the matter could not eventuate.

116 The Defendant stressed that the Plaintiff himself had not placed before the Court, on the present application, any explanation for his deliberate action in destroying the tape.

117 Mr Neil QC submitted that an Allen v Tobias inference was insufficient in this case. Likewise, he submitted that a ruling excluding any reference to the making of the tape recording would not meet the justice of the case. The Plaintiff would seek to give oral evidence of the conversation which had allegedly been recorded. The Defendant was deprived of the opportunity of forensically examining the tape which was alleged to record that conversation. To allow the proceedings to advance with the Court to determine the factual issues surrounding that conversation on an oath-against-oath basis alone would not suffice. The Defendant has been deprived of the opportunity to challenge the credit of the Plaintiff with respect to the tape.

118 Mr Neil QC submitted that even the strongest inference adverse to the Plaintiff would not be sufficient. Such an inference would involve a conclusion that the Plaintiff had destroyed the tape because it did not assist his case and that such destruction pointed to the fact that he did not have a case. In circumstances where the destruction occurred within hours of the Court with respect to the tapes themselves, Mr Neil QC said the inference would not be sufficient. He submitted that the Plaintiff’s actions in destroying the tapes had so compromised the entire proceedings that a fair trial could not occur.

119 He submitted that an important factor was the need for the Court to protect the integrity of its own processes and the administration of justice generally. In the unusual circumstances of this case, an order staying or dismissing the proceedings was required. In urging such an approach, Mr Neil QC acknowledged the drastic nature of such a step and the recognition in the authorities that exceptional circumstances were required before a court would, in effect, terminate a citizen’s ability to litigate a claim. He submitted that this test was satisfied in the present case.

120 I raised with Mr Neil QC, as one of a number of available approaches, a stay or dismissal of that part of the proceedings which relate to the first charges in 1997 given that the conversation which was allegedly recorded relates to those charges. Mr Neil QC submitted that the three sets of proceedings are so inextricably linked that a stay or dismissal of the first proceedings would not suffice in this case. It was the Plaintiff’s case, as articulated by Mr Steirn SC, that his arrest and prosecution for the second and third groups of charges related back to the events surrounding the first set of charges. In these circumstances, the Defendant submitted that there could be no fair trial of the second and third sets of charges alone. Once again, the Defendant points to the loss of the chance to forensically test the tape recording and, if it had proved to be a forgery, to challenge the credit of the Plaintiff in this respect.

121 Mr Neil QC submitted that the present case constituted a “high watermark” where a party is entitled to ask the Court to stay or dismiss a proceeding that has been so tainted by the Plaintiff’s conduct and has created a basic unfairness to the Defendant which is irremediable and involves a basic attack on the public interest (T40.6, 23 August 2005). The Defendant had been deprived of an opportunity that Wood CJ at CL considered it ought to have in the context of the proceedings (T41.39). The tape recording was not peripheral, but was clearly to play a central part in the proceedings. Although punishment of the Plaintiff ought play no part in the determination of the present application, Mr Neil QC submitted that to allow the proceedings to advance to hearing would result in a form of punishment of the Defendant. The Plaintiff would be permitted to proceed on his terms and contrary to the fair and just terms imposed by the Court (T42.33).

122 Mr Neil QC pointed to the unusual nature of the present application in the following submission (T7.1, 24 August 2005):

“This is not just a normal tort case claim. This is a case where he claims my main client committed a crime and he had prior evidence of it and even if you exclude it at a trial or even if a trial judge were to exclude the evidence of Mr Ellis, it still leaves Mr Cusack in peril and deprived of the opportunity that he otherwise would have had to have his position cleared and we say the inference must be from destroying the tape that it wouldn't help the plaintiff. It is not to say that you can have directions for yourself at a trial by a judge to cure this problem because it is so serious and so unique and such a serious abuse of process.

Let us ask on the other side of the coin, supposing none of the evidence of the others were to go in. As seems to have been put by Mr Steirn, the case of the plaintiff will end up collapsing, so why should we go through a long trial where we would be unlikely to get costs out of the plaintiff. I need not go that far. This is a case that calls out for the type of order we ask your Honour to make.”

123 Mr Neil QC submitted that the element of flagrancy and contumelious conduct on the part of the Plaintiff, involving an element of defiance of the Court, ought be taken into account and that the procedural halfway house involving the drawing of inferences was insufficient to meet the justice of this extraordinary case (T15-16, 24 August 2005).

The Plaintiff’s Submissions

124 Ms McManus, for the Plaintiff, sought to place her client’s actions in context by reference to a number of surrounding circumstances identified in the evidence. Reference was made to parts of the affidavits of Mr Walsh and some comments made by the Plaintiff when appearing for himself.

125 Firstly, Mr Walsh recounted that prior to 6 February 2004, he had asked the Plaintiff to produce the original mini cassette tape, but the Plaintiff was not prepared to allow Mr Walsh or counsel to listen to the original tape. It was Mr Walsh’s understanding from the Plaintiff’s instructions that “he was gravely concerned about his and his family’s welfare and that he believed that by retaining the possession of the tape that in some way this would ensure his safety” (paragraph 15, affidavit, GA Walsh, 15 October 2004).

126 Secondly, Mr Walsh stated that when the Plaintiff brought the cassette to counsel’s chambers in February 2004, it was contained in an orange juice container and the Plaintiff disclosed to Mr Walsh and counsel “that he had secreted the CD in the orange juice container as he was fearful that police would attempt to obtain the CD from him” (paragraph 13, affidavit, GA Walsh, 15 October 2004).

127 Thirdly, Ms McManus pointed to submissions made on 11 and 12 October 2004 by Mr Steirn SC including his fluctuating instructions as to whether an adjournment should be sought. Reference was made to the Plaintiff’s statement to Wood CJ at CL on 25 October 2004 that Mr Steirn SC had acted outside his instructions.

128 Fourthly, reference was made to the Plaintiff’s letter of 12 October 2004 in which he reiterated his instructions and concerns about police.

129 Ms McManus submitted that these matters were important to understand and place in context the Plaintiff’s actions. In the proceedings, the Plaintiff alleged that police solicited a bribe, assaulted him and then engaged in his false arrest, false imprisonment, malicious prosecution and abuse of process.

130 Ms McManus submitted that, although Mr Steirn SC had referred to the tape as the “main plank” in the Plaintiff’s case, the three incidents involved were different and discrete.

131 It was the Plaintiff’s primary position in submissions on the application that he ought be permitted at any future hearing to adduce oral evidence of the alleged conversation between himself and Senior Constable Cusack. That conversation had been fully particularised and its content was known to the Defendant. Accordingly, the Plaintiff submitted that the Defendant would not be taken by surprise by that evidence which ought be allowed to be given at the hearing of the matter.

132 The Plaintiff emphasised that the summary termination of civil proceedings was an exceptional step to be sparingly employed, citing General Steel Industries.

133 Ms McManus submitted that the Defendant would have available to it at any hearing of the matter a presumption arising from the principles in Allen v Tobias. Referring to the judgment of Chesterman J in Fuji, it was submitted that the drastic remedy of a stay or dismissal ought not be granted because I should not be satisfied in this case that the Defendant has established the cumulative requirements and that there cannot be a fair trial of the matter and that this result is a consequence of the deliberate action of the Plaintiff.

134 Ms McManus submitted that, without the tape, the evidence at the hearing will consist of the Plaintiff’s word against Senior Constable Cusack’s word, a not uncommon situation.

135 To emphasise the different and discrete nature of the three proceedings, Ms McManus submitted that if the Plaintiff proved the bribe allegation, it would not follow that he would have then established his case in relation to the other incidents. Likewise, if the tape had been proved to be false or not the voice of Senior Constable Cusack, it was submitted that this would be relevant to the Plaintiff’s credibility and undermine his version of the bribe, but it would not necessarily follow that his claim with respect to the second and third incidents would fail. If it could not be established whether the tape was genuine or false, then the case would fall to be determined upon the basis of the oral evidence of one witness against the other.

136 Ms McManus submitted that, in the absence of the tape, at any hearing of the matter, the Defendant:

(a) would have the benefit of a presumption that the tape would not have assisted the Plaintiff - the Defendant would have this benefit without the need for any technical analysis;

(b) would have the benefit of an inference adverse to the Plaintiff’s credit;

(c) would have the ability to cross-examine the Plaintiff, or adduce evidence in relation to such things as the destruction of the tape and the fact that the tape was not produced in earlier proceedings.

137 Ms McManus submitted that, although destruction of potential evidence must be viewed seriously, it was an overstatement to regard this case as a “high watermark” case as submitted by the Defendant.

138 It was submitted that the significant damage arising from the destruction of the tape operated adversely to the Plaintiff given that:

(a) he bore the onus of proving his case;

(b) the tape may have corroborated the Plaintiff’s evidence;

(c) the remaining evidence in relation to the alleged bribery conversation would involve the Plaintiff’s word of that against the word of Senior Constable Cusack, and the Plaintiff had significant credibility issues which he would need to overcome.

139 It was submitted that the Plaintiff’s allegations raised in the proceedings are serious. The pleadings had been settled and the case prepared for hearing by an experienced solicitor. Despite the actions of the Plaintiff in destroying the tape, Ms McManus submitted that the matter should proceed to a hearing with respect to each of the three proceedings.

140 During the course of submissions and in answer to questions posed by me, Ms McManus sought instructions from the Plaintiff with respect to the course proposed at any hearing of the matter. Ms McManus said (T23.52):

“Your Honour, I have got instructions in relation to the tape. The respondent in a future hearing would be willing to make no mention of the tape, and not call secondary evidence, including evidence of Mr Ellis, Mr Kostopoulos, Mr Walsh and any other of the people that were involved in hearing the tape.

HIS HONOUR: Does that mean if that happens, that certainly as far as he is concerned there would be no mention of the tape at all, including its destruction by himself? That is no Ophelia presumption running against him?

McMANUS: That's the difficulty, your Honour.

HIS HONOUR: That is one of the difficulties, it seems to me, with this.”

141 Ms McManus conceded that, prima facie, destruction of evidence may constitute an abuse of process, but submitted that this ought not be the end of the matter (T26.4, 24 August 2005). In summary, it was submitted for the Plaintiff that a fair trial could be had of the matter with appropriate procedural protections which would favour the Defendant in the circumstances of the case. The drastic step of stay or dismissal should not be taken.

Resolution of Competing Submissions

142 There is no real dispute as to the facts relevant to this application. On 12 October 2004, Wood CJ at CL gave directions, at the request of the parties, to facilitate the technical analysis of the original mini cassette tape and the compact disc which contained the alleged conversation in which Senior Constable Cusack solicited a bribe from the Plaintiff. The proceedings were adjourned for the specific purpose of allowing that analysis to take place. For reasons that are not disclosed in the evidence, the Plaintiff retained possession of the mini cassette tape and the compact disc. On his return journey from Sydney to Taree, he destroyed them. At the time when he so acted, he was aware of the evidentiary significance of these items to his civil proceedings.

143 A number of the submissions made by the Plaintiff appear to criticise the conduct of Mr Steirn SC in bringing the existence of the tape to the knowledge of the Defendant and to Wood CJ at CL on 12 October 2004. I have no doubt that the actions of Mr Steirn SC were entirely appropriate. He owed a duty to the Court as well as a duty to his client. There remained an issue concerning the legality of the tape recording, if it was genuine, given the provisions of the Listening Devices Act 1984. The Plaintiff’s instructions that the tape ought be produced as a surprise piece of evidence whilst he himself was giving evidence was not, in my view, an appropriate course for counsel to have followed. It is entirely understandable that an experienced counsel such as Mr Steirn SC took the course which he did.

144 I am satisfied that the destruction of the tape by the Plaintiff constitutes an abuse of process. The destruction of material which is in existence, and is to be subjected to analysis pursuant to court direction for evidentiary use in current proceedings, is a clear example of such abuse. It is not necessary for the Defendant to establish that the acts of the Plaintiff were delinquent, blameworthy or contumelious for the purposes of establishing abuse of process: Batistatos. Nevertheless, the circumstances of the present case establish, to the civil standard, an intentional destruction of items of potential evidence when their evidentiary significance was known to the Plaintiff. The conduct of the Plaintiff may be characterised appropriately as blameworthy or contumelious.

145 In my opinion, the circumstances of this case constitute a stark example of abuse of process. This is not a case where items of potential evidence were destroyed before the commencement of proceedings. The Plaintiff destroyed the tape and compact disc after the proceedings were on foot. Further, the act of destruction occurred within hours of directions being made by a Judge of this Court with respect to the preservation of the items in question for technical analysis to determine their genuineness. All of this was to be done for the purpose of future use of the items in evidence in the proceedings. I accept the submission of Mr Neil QC that this case constitutes a “high watermark” of the class of abuse of process involving destruction of potential evidence.

146 If the test in British American Tobacco Pty Limited v Cowell is applied, I am satisfied, on the balance of probabilities, that the acts of the Plaintiff in destroying the items constituted conduct falling within s.317(a) or s.319 Crimes Act 1900.

147 Having determined that an abuse of process has been established, the question arises as to what course should be taken with respect to the Defendant’s application for a stay or dismissal of the proceedings. The relief sought by the Defendant has been referred to in the authorities as being a “drastic” or “Draconian” step. Exceptional circumstances are required before such an order should be made.

148 It is necessary to consider whether a fair trial can take place following the Plaintiff’s destruction of the tape. Further, it is necessary to have regard to the protection of the integrity of the processes of the Court and the administration of justice generally. An order should not be made to punish the Plaintiff. Nor should an order be made as a means of demonstrating curial outrage in response to the Plaintiff’s actions. However, an order made for reasons protective of the administration of justice may have the consequence of preventing the Plaintiff from further litigating his claims. The Plaintiff may perceive this as punishment even though that is not the purpose of the order.

149 I have given consideration to the question whether a fair trial may take place with the Defendant having the benefit of strong inferences drawn in its favour. These inferences would include an inference that the tape would not have assisted the Plaintiff’s case, an inference adverse to his credit and an inference that the destructions of the tapes by the Plaintiff constituted an admission by conduct that his case was weak.

150 I am not satisfied that the abuse of process demonstrated in the present case would be met sufficiently by such an approach. I am not satisfied that a fair trial of the Plaintiff’s claims may take place, even with such inferences being drawn favourably to the Defendant. There remains a real and substantial risk that the Defendant will not have a fair trial of the proceedings.

151 Further, such an approach would give no proper weight to the need to protect the integrity of the processes of the Court and the administration of justice. There is a near contemporaneous link between the directions made by a Judge of this Court and the destruction of potential evidence by the Plaintiff in the face of those directions. This is a significant and unusual feature of this case which requires a judicial response. I emphasise that such a response is not by way of judicial outrage at the actions of the Plaintiff. Rather, the protection of the administration of justice must be given strong emphasis in this case.

152 I have considered, as one available approach, an order excluding any reference to the alleged tape recording from the proceedings. This would merely have the effect of allowing the Plaintiff to litigate his claims as if the tape had never existed. The justice of the case does not permit this approach.

153 I have considered, as an alternative, an order staying or dismissing the first proceedings relating to the 1997 arrest and prosecution. It is in the context of that arrest that the alleged conversation occurred. I do not consider that this approach is appropriate in the unusual circumstances of this case. The case advanced by the Plaintiff suggests an inextricable link between the three sets of proceedings. I do not accept the submissions for the Plaintiff that, in some way, the second and third set of proceedings can proceed justly to a fair trial.

154 In the exceptional circumstances of the present case, I am satisfied that the appropriate step is to order that the proceedings be stayed or dismissed. The better course, in this case, is that the proceedings be dismissed.

155 I am conscious that the claims of the Plaintiff involve strong allegations against police officers including an allegation of corruption. I have taken into account the submission of the Plaintiff that there is a public interest in having such allegations ventilated and determined by the Court by a final hearing on the merits of the Plaintiff’s claims. I bear in mind, however, that there are other avenues which may be taken, and may have already been taken, to allow investigation of allegations of corruption against police officers, including referral to the Police Integrity Commission. The Police Integrity Commission has substantial powers of investigation and an ability to publicly report concerning an investigation if it sees fit. The public interest in the investigation of allegations of police misconduct and corruption, as the Plaintiff ventilates in his claims, may be considered and assessed properly by that body acting in the public interest.

156 The Plaintiff instituted civil proceedings against the Defendant seeking damages for the torts alleged by him. In circumstances where his conduct constitutes a clear abuse of process committed whilst proceedings were on foot and in the face of directions of the Court, the appropriate course is an order dismissing the proceedings. That power ought be exercised in this case to safeguard the administration of justice and this purpose transcends the particular interests of the Plaintiff in the litigation: Batistatos at paragraph 12.

Conclusion

157 I note that there is a further Notice of Motion on foot filed by the Defendant which seeks to set aside a Notice to Produce served by the Plaintiff. It was agreed at the hearing of the Defendant’s motion for a stay or dismissal of the proceedings that the second Notice of Motion ought not proceed until the determination of the Defendant’s primary application. As I propose to make orders in favour of the Defendant dismissing the proceedings, the application with respect to the Notice to Produce does not arise.

158 I make the following orders:

(a) pursuant to Part 13 r 13.4 UCPR, the Further Amended Statement of Claim is dismissed;

(b) the Plaintiff is to pay the Defendant’s costs of this application.

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LAST UPDATED: 30/06/2006