LANGUAGE

British American Tobacco Australia Services Ltd v. Cowell

In this decision the Court of Appeal overturned the decision of Eames J in McCabe v British American Tobacco Australia Services Limited [2002] VSC 73. Eames J had struck out BATAS's defence because BATAS had not complied with orders for discovery and had subverted the discovery process by the implementation of its "Document Retention Policy". His Honour had further found that BATAS had done so with the deliberate intention of denying the plaintiff a fair trial, a strategy which had been successful.

The Court of Appeal agreed with the trial judge that BATAS had not complied with discovery. However, it disagreed that the prejudice that was caused to the plaintiff by this default warranted striking out the defence. Further, the Court of Appeal disagreed with the trial judge's findings of fact insofar as he had criticised BATAS's legal advisors for devising a strategy to allow BATAS to destroy documents whilst claiming an innocent intention. In particular, his Honour had erred in finding that legal professional privilege had been waived over the documents upon which he based that finding.

The Court of Appeal further found that, where one party alleges that the other party has destroyed documents before the commencement of proceedings, the criterion for the Court's intervention is whether the 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. Because the plaintiff had not made either of these allegations, the plaintiff had not shown that BATAS had been in breach of any relevant obligation not to destroy documents.

On that basis the Court of Appeal allowed the appeal and ordered that the proceeding be remitted for a new trial.

The plaintiff applied for special leave to appeal this decision to the High Court, which was refused (Cowell v. British American Tobacco Australia Services Ltd [2003] HCA Trans 384].