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Supreme Court of the ACT |
Last Updated: 30 September 2008
RUSSELL VANCE v AIR MARSHALL ERROL JOHN McCORMACK in his
capacity as CHIEF OF AIR FORCE and COMMONWEALTH OF AUSTRALIA [2007]
ACTSC 80 (28 September 2007)
PRACTICE AND PROCEDURE – application to strike out defence due to repeated failures to provide adequate discovery – general principles.
Air Force Regulations, reg 81
Court Procedure Rules 2006, rule 671
ACT (Self Government) Act 1998, s
48A
Archives Act 1983 (Cth), s 24
British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197 (unreported) 6 December 2002
Logicrose Ltd v Southend United Football Company Ltd Chancery Division 5 February 1988
Walter Family Trust v National Australia Bank Ltd [2001] VSC 441 (14 November 2001)
“Destruction of Documents before Proceedings Commence: What is a Court to do?” (2003) Melbourne University Law Review, Vol 27 273-307
No SC 317 of 2001
Judge: Crispin J
Supreme Court of the ACT
Date: 28 September 2007
IN THE SUPREME COURT OF THE )
) No. SC 317 of
2001
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: RUSSELL VANCE
Plaintiff
AND: AIR MARSHALL ERROL JOHN McCORMACK IN HIS CAPACITY AS CHIEF OF AIR FORCE
First Defendant
AND: THE COMMONWEALTH
Second Defendant
ORDER
Judge: Crispin J
Date: 28 September 2007
Place: Canberra
THE COURT ORDERS THAT:
1. The present applications constitute the latest outbreak of interlocutory
skirmishing in what appears to have become a war of attrition
between the
plaintiff and the defendants. The essential issues in the substantive case
relate to the plaintiff’s involuntary
retirement from the Air Force,
purportedly on the ground of his ill health, which he alleges was in reality
based upon mala fides.
He maintains that the relevant decision involved an
unlawful termination of his employment and/or a breach of a duty of care
allegedly
owed to him by the defendants.
2. It is not clear when the
plaintiff’s superior officers became disenchanted with the
plaintiff’s performance, but hostilities
were apparently signalled when a
Board of Inquiry (“BOI”) that had been appointed on 24 October 1995,
apparently in response
to his own “redress of grievance”, proceeded
to enquire into aspects of his conduct whilst he had been the officer in
charge
of the RAAF base at Butterworth in Malaysia. The BOI investigated an
extraordinarily wide range of issues, including allegations
that he had spoken
to people rudely and even told risqué jokes.
3. An RAAF legal officer,
Ms Kelly, who is now a member of the Commonwealth Parliament, became concerned
when the cost of the inquiry
reached about $50,000, which she thought was
disproportionate to the cost of other inquiries concerning more serious issues.
She
recommended that the terms of reference be redrafted with greater precision.
This recommendation was not adopted. Instead, the funding
of the Inquiry was
taken out of her hands and administered by her superiors in Canberra. The
Inquiry proceeded over a period of
many months and, apparently, at an ultimate
cost to the taxpayers of more than $6 million. It was suggested that this
extraordinary
approach may have reflected an underlying attitude towards the
plaintiff. That may not have been the case, though the suggestion
is
understandable. I note in passing that the amount spent on this Inquiry would
presumably have covered the cost of the plaintiff’s
salary for more than a
century. It is true that the inquiry considered a wide range of issues but it
is difficult to see how even
a season of storms in a teacup could have justified
such financial profligacy.
4. The report of the BOI finally delivered on 17
September 1997, made certain findings against the plaintiff.
5. The plaintiff
subsequently contended that he had been denied natural justice and that the
findings were vitiated by errors of law
and, at least in some cases, were so
unreasonable that no reasonable person could have made them.
6. In response
to these contentions and, it seems, public concern about the extravagant
expenditure of public funds, two barristers,
Mr Hilton SC and Dr Renwick, who
were also Naval Reserve officers, were appointed to carry out a review of the
Inquiry. The evidence
does not reveal the cost of this exercise.
7. Their
report (the Hilton report”) was duly delivered in March 1998. Mr Hilton
and Dr Renwick made some criticisms of
the manner in which the BOI had been
conducted. They recommended that one aspect of the conduct of counsel assisting
the BOI be
referred to the Law Society of South Australia “by way of a
complaint of unprofessional conduct.” They also noted that
the plaintiff
had been under a significant disadvantage due to his representation by an
inexperienced junior officer who had been
placed by his superiors in a position
involving an irreconcilable conflict of interest. They said, however, that they
doubted whether
any lawyer could have persuaded the BOI not to make the strongly
critical findings against the plaintiff, given the strength of the
evidence
against him and his decision not to answer questions in the witness box. They
ultimately concluded that the BOI’s
findings had not been vitiated and
indicated that they could see no legal reason why the recommendations should not
be implemented.
8. On 4 June 1998 the first defendant issued a
“Termination Notice” which stated that he intended to terminate the
plaintiff’s
appointment as an officer of the Air Force pursuant to
Regulation 81 of the Air Force Regulations. The stated ground was that his
retention as an officer was not in the best interests of the Australian Defence
Force (“ADF”). The particulars of this
ground referred to a
recommendation in the BOI’s report that such a notice be issued and to
various findings in the Report.
The particulars also referred to the review
carried out by Mr Hilton and Dr Renwick and their observation that they could
see no
reason why the recommendations of the BOI should not be implemented. The
notice invited the plaintiff to provide a written statement
of reasons why his
employment should not be terminated.
9. The plaintiff’s solicitors
responded by letter dated 8 July 1998, addressing the relevant portions of the
report of the BOI
and aspects of the “culled” version of the Hilton
report with which the plaintiff had been provided. They suggested
that the
plaintiff had had ample reason to decline to give evidence; he had been
suffering from a psychological illness. Indeed,
he had been “posted
non-effective” on medical grounds since 26 May 1997 and on 3 July 1997 his
treating psychiatrist,
Dr Lowden, had certified that he was not competent to
give evidence. His solicitors said that the BOI had failed to mention the
fact
that a copy of her report had been provided to it. I should mention that there
is no evidence to suggest that Mr Hilton or
Dr Renwick had known this and it is
difficult to imagine that they would have formed the same conclusions if they
had. The letter
from the plaintiff’s solicitors objected to the proposed
termination in unequivocal terms:
In our view the BOI report offends most, if not all, of the criteria set out in the AD(JR) Act. Perhaps the ‘edited’ parts of the Hilton report advert to same. For instance, it is plain enough that a decision to terminate Vance on the BOI’s findings must be a decision so unreasonable that no reasonable decision maker could possibly make.
10. On 27 July 1998 the first defendant proceeded to issue a further
document described as “Decision on Termination Notice issued
to 0225672
SQNLDR R. P. Vance” (“decision on termination notice”)
expressing the opinion that the ground of termination
specified in the
termination notice of 4 June 1998 had been established and purporting to
terminate the plaintiff’s employment
on 10 August 1998.
11. The
plaintiff had not been mollified by the opinions expressed in the Hilton report
and on 6 August 1998 his solicitors wrote
to the first defendant advising them
of the plaintiff’s intention to commence proceedings in the Federal Court
of Australia
for a review of this decision.
12. On 10 August 1998 the
decision on termination notice was amended to defer the termination from that
day until 31 August 1998.
13. On 13 August 1998, minutes of an
Employment Standards Committee meeting stated that this extension had been
approved to enable
a determination as to whether his medical condition resulted
in him being unfit for further service and mentioned that, if so, the
first
defendant might be willing to allow him to resign on that ground. It noted that
his condition had been raised at an earlier
meeting on 9 December 1997, but that
it had been decided to defer consideration until completion of the BOI as his
condition had
probably been exacerbated those proceedings.
14. The plaintiff
commenced the threatened proceedings in the Federal Court on 14 August
1998.
15. On 20 August 1998 the first defendant again amended the decision on
termination notice, further deferring its intended effect
until 19 October 1998.
On the following day, 21 August 1998, the first defendant wrote to the plaintiff
calling upon him to show
cause why he should not be retired as medically unfit
for further service. His response was required within 28 days.
16. A draft
“public information plan” subsequently prepared for submission to
the Minister for Defence included the following
statements:
Chief of Air Force has agreed that the prime ground for discharge of Squadron Leader Vance will be that he is medically unfit for further service. If this is successful and he is discharged on or about 8 October 1998, the public release of the BOI will not proceed.
If however Squadron Leader Vance appeals against the medical decision and it currently appears that this process will be drawn out for some time, the alternate ground of termination of service will be pursued and this is likely to result in a Federal Court Appeal. . . .
17. On 19 October 1998, the second defendant issued a notice purporting to
retire the plaintiff on medical grounds and on the same
day he revoked the
decision on termination notice.
18. The plaintiff’s involuntary
retirement ultimately took effect on 22 December 1998.
19. The Federal Court
of Australia subsequently ordered, by consent, that the decision to terminate
the plaintiff’s employment
be set aside and that the first defendant pay
the plaintiff's costs.
20. The plaintiff commenced the present proceedings in
May 2001. He alleges that the termination purportedly made on medical grounds
was actually motivated by a desire to get rid of him without having to rely upon
the challenged findings of the BOI. In the alternative,
he alleges that the
second defendant was negligent in terminating his employment when it knew or
ought to have known that the recommendation
to take that step had not genuinely
been based upon medical grounds and/or in failing to make enquiries that would
have revealed
that fact. The plaintiff seeks damages based on loss of earnings,
loss of superannuation and loss of reputation.
21. In answer to these
claims, the defendant maintains, in essence, that the decision was based upon
substantially undisputed evidence
that by 21 August 1998 the plaintiff had been
suffering from a serious psychiatric illness, albeit one caused or exacerbated
by the
stress of the Inquiry, and hence had been unfit for duty.
22. The
conduct of the case during the six years that have elapsed since its
commencement has plainly resulted in substantial further
haemorrhages of public
funds but that is not a matter that I am required or, indeed, permitted, to take
into account.
23. I am concerned with three separate applications:
24. Since I am of the opinion that the first of these applications must be
granted and it is unnecessary to address the other applications
25. The first
application is reliant upon rule 671 of the Court Procedure Rules 2006 and/or
the inherent power of the court, which
in this jurisdiction is effectively
entrenched by s 48A of the ACT (Self Government) Act 1998.
26. Rule 671 is in
the following terms:
(1) If a party, without reasonable excuse, contravenes an order of the court made under this part, the court may—
(a) if the party is a plaintiff or other claimant—order that all, or a stated part, of the party’s proceeding be struck out, dismissed or stayed; or
(b) if the party is a defendant or respondent—order that the party not be allowed to defend all, or a stated part, of the proceeding against the party.
(2) This rule does not limit any other power of the court in relation to the contravention.
27. In the present case it is alleged that the defendants have failed to comply
with an order made by the Registrar on 2 April 2002
requiring them to provide
discovery by 30 August 2002. In purported compliance with this order,
Mr Miller, the Director
of Litigation for the Department of Defence, swore
no less than six affidavits, the first on 30 August 2002 and the last on 8 June
2007, and arranged for the provision of some further documents on several
occasions. Despite these efforts, it is clear that the
defendants have still
not adequately complied with the order.
28. Counsel for the plaintiff were
very critical of Mr Miller. It should be noted, however, that he was appointed
to his present
position only in 2000, which was well after the events in
question had occurred. Whilst it did appear from his cross-examination
that he
may not have fully appreciated the extent of the duty of disclosure cast upon
the defendants by the order for discovery,
he was obviously dependent upon
senior military officers for advice and assistance in locating relevant
documents.
29. It is now obvious that the searches instituted within the
military were not pursued with sufficient diligence or competence.
In February
2005, nearly three years after the order had been made, the plaintiff’s
solicitors were advised that a further
forty-one boxes of documents had just
been “discovered”. One might have expected that such a stark
demonstration of
the inadequacy of the earlier searches would have galvanised
those assisting Mr Miller into the most rigorous pursuit of every reasonable
avenue of inquiry. Yet, that obviously did not occur.
30. Mr Miller was
obliged to ruefully concede that his knowledge of the key documents and even of
the key participants in the relevant
events had been “an evolving
thing”. Whilst further documents were progressively supplied, the process
of discovery
is still not complete. Indeed, Mr Miller was obliged to give the
following evidence:
Now, it’s your responsibility when you swear an affidavit of discovery to have caused due search and inquiry to be made. You understand that, don’t you? --- Yes.
You’ve used that verbal formula on several occasions in these affidavits? --- Yes.
. . .
So, when you swore in this affidavit of 8 June this year that you’d conducted due search and inquiry, you’d done nothing of the kind had you, you hadn’t done that? - - - Well, to the extent that I was relying upon others doing through it AGS. ---
You had not done the --- ?--- I had not done it.
You had not done the inquiries. You hadn’t asked anybody else to do it and you had not been informed that it had been done? --- Correct.
So, how were you able to swear that you’d conducted due search and inquiry in your affidavit of 8 June? --- Well, plainly I haven’t been entitled to make that statement.
I’m sorry? --- Plainly I haven’t been entitled to make that statement.
31. Mr Crowe SC, who again appeared for the defendants, ably advanced every
argument that could conceivably have been raised in mitigation
of their
continued failure to provide adequate discovery, stressing such factors as the
lapse of time between the plaintiff’s
retirement and the commencement of
proceedings and the fact that some officers had left the military during that
period. However,
even when these matters are given full weight, it is
difficult, if not impossible to accept that there has been a sufficiently
conscientious
response to the order for discovery. It is inescapable that the
defendants have already had almost five and a half years to find
the documents
relevant to the retirement of a single officer. An earlier generation of
military officers waged the First World War
in substantially less
time.
32. No plaintiff should be forced to endure such an extraordinary delay
in the litigation of his or her claim due to the sustained
default of a
defendant and even Mr Crowe’s eloquent submissions have left me quite
unconvinced that there has been any
real justification for it. I accept that
there may have been a substantial number of documents to find and collate, but
it has not
been suggested that the magnitude of the task remotely approached
that which litigants are sometimes forced to confront in complex
commercial
causes. It should also be noted that the date initially set for compliance was
almost five months after the order was
made, and that the defendants would have
been able to draw upon the considerable human and financial resources of the ADF
to undertake
the necessary searches and enquiries. Yet, there has still not
been due compliance.
33. The plaintiff has also relied upon evidence as to
the destruction of emails that might have contained relevant evidence, though
it
is plain that the defendant’s sustained breach of the order is not limited
to its failure to disclose documents of that
nature.
34. Mr Purnell SC, who
appeared for the plaintiff with Mr Erskine and Mr Mossop, submitted that the
destruction by staff of the first
defendant of emails that may have contained
relevant material provided a further reason to make orders effectively striking
out the
defences. It should be noted, however, that most of the emails of any
present relevance would have been destroyed in accordance
with standard ADF
practice prior to the commencement of the proceedings. In the absence of any
relevant statutory provision or court
order, people or organisations are
generally free to decide for themselves how long they should retain documents.
They have no obligation
to maintain archives on the off chance that someone
might later sue them and wish to draw upon the evidence so provided. Hence,
as
the Victorian Court of Appeal held in British American Tobacco Australia
Services Ltd v Cowell [2002] VSCA 197 (unreported 6 December 2002) at [173]
there must be some balance struck between the right of a company to manage its
own documents
and the right of a litigant to have resort to the documents of the
other party. Their Honours held that a balance could be struck
by accepting
that destruction of documents prior to the commencement of litigation might
attract a sanction (other than the drawing
of adverse inferences) only if that
conduct amounts to an attempt to pervert the course of justice or criminal
contempt of court.
Their Honours went on to say that such a test seemed to sit
well with what had been said in the United States as well as what had
been said
in England. They pointed out that there can be an attempt to pervert the course
of justice before a proceeding is on foot
but accepted that there had been
considerable force in a submission that the rule of law would be endangered if
intervention for
conduct occurring before the commencement of litigation were to
“be grounded otherwise than on illegality, albeit proved to
the civil
standard”.
35. This judgment has been subjected to serious criticism.
In particular, Camille Cameron and Jonathan Liberman have argued that
the
Victorian Court of Appeal erroneously focused on the lawfulness or unlawfulness
of the destruction of documents and lost sight
of the primary issue, namely the
extent to which the destruction of evidence had affected the plaintiff’s
capacity to obtain
a fair trial of the allegations: see “Destruction of
Documents before Proceedings Commence: What is a Court to do?”
(2003)
Melbourne University Law Review, Vol 27 273-307. If I may say so with respect,
it does seem to me to be somewhat incongruous
for a court to approach its duty
to do justice between the parties to a civil case by dipping into the criminal
law and asking whether
conduct that may have caused irremediable prejudice to
one side was tainted by illegality. If free to resolve the matter res integra,
I may have been inclined to approach it somewhat differently. However, as Mr
Crowe pointed out, considerations of judicial comity
require me to give very
considerable weight to the decision of the Victorian Court of Appeal, though I
am not, of course, bound by
it.
36. In any event, it was contended that the
defendants could derive no support from the decision in British American Tobacco
Australia
Services Ltd v Cowell because some of the emails had apparently been
destroyed after the proceedings had commenced and all had been
destroyed in
breach of s 24 of the Archives Act 1983 (Cth). There was an issue between the
parties as to whether a direction concerning the retention and deletion of
emails reflected
a “practice or procedure”, in which case it would
have provided an exception to the general rule in s 24 only if approved by the
National Archives of Australia (“the Archives”), or a “normal
administrative practice”,
in which case it would have provided such an
exception unless the Archives had notified the ADF of its disapproval.
37. I have ultimately found it unnecessary to resolve this issue because I
am not satisfied that the destruction of the emails, even
if carried out in
unwitting breach of a statutory prohibition, would warrant the drastic remedy
sought by the plaintiff.
38. In my opinion, the real question raised by this
case is what should be done about the extraordinarily persistent non-compliance
with the order for discovery? In Logicrose Ltd v Southend United Football
Company Ltd Chancery Division, 5 February 1988, unreported
save in the Times
newspaper of 5 March 1988 but cited in British American Tobacco Australia
Services Ltd v Cowell at [152] Millet
J said that it would not be right to
deprive a litigant of justice without determination of the issues as punishment
for his or her
conduct, however deplorable, unless there was a real risk that
that conduct would render the further conduct of the proceedings unsatisfactory.
His Lordship added the admonition that a court “must always guard itself
against the temptation of allowing its indignation
to lead to a miscarriage of
justice”. On the other hand, I am conscious of the old adage of
“justice delayed is justice
denied”. It is true, of course, that
delay is a regrettable but inevitable concomitant of contemporary litigation
and, generally
speaking, a party should not be denied the opportunity for a full
and fair hearing on the merits of the case when the delay caused
by its default
has not led to irredeemable prejudice. However, in this case there has been a
persistent failure to adequately comply
with a court order and a defendant
cannot expect a court to be mollified by a contention that, no matter how many
years the case
is delayed by its persistent default, it will always be possible
for the plaintiff to eventually obtain a fair trial of the action.
Indeed, in
some cases a very serious view has been taken of even a short delay in
compliance with court orders. To take one example,
in Walter Family Trust v
National Australia Bank Ltd [2001] VSC 441 (14 November 2001) Eames J dismissed
an appeal against a Master’s refusal to strike out a defence on the ground
that the defendant
had failed to provide discovery within the 39 days permitted
by the order and, when given a further 7 days, had been one day late.
Whilst
that delay may seem to pale into insignificance compared to the delay in the
present case, his Honour said that the defendant
would be wise not to regard the
outcome as having been a foregone conclusion or to assume that the Court would
grant a similar indulgence
if orders were not complied with in the future. At
least in an extreme case it cannot be doubted that substantial delay in
compliance
with court orders may itself be sufficient to warrant even the
drastic remedy of striking out a defence in whole or in part.
39. I accept
that, even when there has been protracted default, it may be relevant to
consider the nature and extent of the potential
prejudice suffered by the
plaintiff as a consequence. In the present case, counsel for the plaintiff have
taken me through many
of the ADF records in chronological order, pointing to the
absence of further documents that are referred to in the records that
have been
produced, and others the existence of which may be inferred form the
circumstances. It does appear that some of the missing
documents could be
potentially important to the plaintiff’s case. In any event, parties who
persistently fail to comply with
court orders must understand that they do so at
their peril.
40. Mr Crowe has argued that the plaintiff’s case is
destined to fail because he was undeniably incapacitated at the time the
decision to retire him was made. That may be so, but the plaintiff is entitled
to have access to the documents that should have
been produced in compliance
with the court’s order of 2 April 2002 before being required to prove his
case. Furthermore a
party is not relieved of the duty to comply with a court
order merely because it believes it has a strong case.
41. The defendants
have now been in breach of the order for discovery for more than five years.
There has been no adequate explanation
for this extraordinary default and I have
not even been given any assurance as to when due search and inquiry would be
undertaken
or as to when Mr Miller or some other officer would be placed in a
position to validly swear a seventh affidavit of discovery.
42. I have no
doubt that it is appropriate to make the orders sought by the plaintiff.
43. I will hear counsel as to costs.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.
Associate:
Date: 28 September 2007
Counsel for the plaintiff: Mr FJ Purnell SC with Mr C Erskine and
Mr D Mossop
Solicitor for the plaintiff: Maliganis Edwards
Johnson
Counsel for the defendants: Mr R Crowe SC with Ms C
Besemeres
Solicitor for the defendants: The Australian Government
Solicitor
Dates of hearing: 23-27 July, 20-21 August 2007
Date of
judgment: 28 September 2007
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