Barrow v McLernon & Anor [2012] VSC 134 (12 April 2012):Discovery, use of discovered documents in subsequent proceedings, use discovered documents to amend pleadings, ss 26 and 27 of Civil Procedure Act 2010 & s35 Defamation Act 2005

April 12, 2012 |

Today Justice Beach, in Barrow v McLernon & Anor [2012] VSC 134 handed down a very interesting and useful decision regarding discovery and the operation of section 27 of the Civil Procedure Act. It is an appeal from a decision of an Associate Justice.


The Plaintiff is suing Hugh McLernon and IMF (Australia) Limited for defamation arising out of the publication on 30 May 2011 of an email and two pdf attachments [1]. The Plaintiff wishes to use documents discovered in this proceeding in support of issuing other proceedings, also a cause of action in defamation [2].  Five documents discovered constitute, the Plaintiff alleges, 5 publications to variously the Australian Securities Exchange, journalists and ASIC [15] and are to be the basis of fresh proceedings, with the following imputations, see [17]:

(a) About 1 June 2010 Mr Barrow had some unlawful business involvement with Mr Byrnes, a person banned from managing corporations by ASIC.

(b) About 1 June 2010 Mr Barrow had some unlawful business involvement with Mr Byrnes, a person banned from managing corporations by ASIC, in relation to Bank Fees litigation.

(c) About 1 June 2010 Mr Barrow had some business involvement with Mr Byrnes, a person banned from managing corporations by ASIC.

(d) About 1 June 2010 Mr Barrow had some business involvement with Mr Byrnes, a person banned from managing corporations by ASIC, in relation to Bank Fees litigation.

(e) Mr Barrow is a dangerous individual.

(f) Mr Barrow is an abusive person.”


Section 27 of the Civil Procedure Act 2010

Beach J, in considering the operation of section 27 of the Civil Procedure Act, found that the power to grant leave should be governed by the same principles as the power at common law; that is the authorities that govern the release of a Home Office v Harman undertaking also govern the application of s 27(3)(b) of the Act (see [22][23]). The relevant principles his Honour noted, in citing the authorities are:

  • the dispensing power is not freely exercised and will only be exercised where special circumstances appear [27]
  • for special circumstances to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present which may include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document , the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding [28]
  • special circumstances has been defined as arising ” where there are special features (or a special feature) of the case which afford good reason for modifying or releasing the undertaking, being circumstances which are of sufficient gravity to override the private and public interest in protection of the confidentiality of a person’s private documents which are required by law to be produced to a court” [ 29]
  • the purpose of the implied undertaking is to protect against the misuse of material produced under coercion of the Court’s processes, not to prevent a party’s access to justice. If the proposed use is for the purposes of other proceedings, the Court’s power in relation to its own proceedings will provide the necessary protection against misuse. Commonality of subject matter may be sufficient to establish that the party has a legitimate forensic purpose for the use of the material in the second proceeding, but the test is not commonality of subject matter [31].
  • Generally, use in a subsequent proceeding would not be an improper use of material previously obtained subject to an implied undertaking, unless that material was obtained in the first proceeding for an ulterior purpose. There is no suggestion in this case that Laen had any improper motive in obtaining the disclosure to it in the first proceeding of the documents in question [31].

The special circumstances the Plaintiff relied upon was summarised, at [40] as:

(a) the proceeding (and the underlying concerns expressed by the plaintiff) are said to be matters of public interest;

(b) the summons documents constitute an attack on the plaintiff that was made in secret;

(c) there was misconduct in failing to disclose all of the summons documents under s 26 of the Civil Procedure Act;

(d) the summons documents are not true internal documents, being documents that were published by the defendants to third parties; and

(e) if there had been appropriate disclosure under s 26 of the Civil Procedure Act, then the plaintiff would have been in a position to use the documents in the present proceeding.

His Honour found there was no public interest point [41] and while the other points were not without substance [42] the circumstances of the case are not unusual or special in any relevant sense [43].   Even if  special circumstances could be shown his Honour found that exercise of the Court’s jurisdiction and discretion would not to permit the  documents being used to commence a fresh proceeding because they are relevant in the present proceeding and would be relied upon by the plaintiff as part of his case on malice and  form a foundation for a claim for aggravated damages [48]. Given the likelihood of the Defendants pleading defences in any other proceeding substantially similar to those pleaded in this proceeding his Honour found that “ would not be either reasonable or appropriate to attempt to separate these issues across two proceedings” [49]

Special Leave to rely on affidavit material

An applications for special leave to rely upon evidence not given before the Associate Judge is to avoid the hearing before the Associate Judge as a “dry run” and, depending on the result, appealing and, on the appeal, filing additional affidavits to bolster the relevant case [26].  In this case the additional materail was permitted because his Honour accepted that was not what the Plaintiff was attempting to do when he relied upon the more limited in his hearing before the Associate Justice.

Section 35 Defamation Act

The Plaintiff relied upon Buckley v The Herald & Weekly Times Pty Ltd in support of an argument that he should not be obliged to use the documents to amend existing pleadings rather than commence fresh proceedings.  His Honour stated, at [47] that in Buckley:

“..the plaintiff had the right to bring two separate proceedings. The plaintiff has no such right in the present case. The plaintiff needs leave to use the summons documents so as to be able to commence a subsequent proceeding.”

The court noted the Plaintiff’s concession that but for section 35 cap on damages he would have amended the pleadings in the current proceeding rather than issuing a new proceeding.  His Honour noted the requirement of section 29 of the Supreme Court Act where the jurisdiction of the Court must be exercised so as to avoid a multiplicity of proceedings [50].


Beach’s analysis of the obligations of section 27/Home Office v Harman is detailed and methodical. The threshold in establishing the special circumstances in using documents discovered in one proceeding for the purposes of other litigation is high.  There are strong public policy underpinning for the court to be wary of granting leave .


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