ACN 007 528 207 PTY LTD (IN LIQ) v BIRD CAMERON AND ORS No. SCCIV-99-1392 [2002] SASC 144

Supreme Court of SA|2002-05-02|Before: Bleby J

The application for an increase in the amount of costs is supported by the affidavit of the defendants' solicitor, Mr Keane, affirmed on 7 March 2002. In paragraph 3 of that affidavit he has said:

"3. I have examined the accounts rendered to the defendants since 13 July 2001 and estimate that the defendants incurred costs in relation to this action in excess of $40,000.00 on or before 20 January 2002."

The plaintiff wishes to ascertain the basis upon which the defendants have calculated actual costs to 5 March 2002. Paragraph 2.1 of the order sought deals with accounts rendered by the defendants' solicitors to their clients since 13 July 2001, that being the date on which Bleby J ordered provision of security for costs in the sum of $40,000.00. Paragraph 2.2 of the order sought deals with Item 15 of the draft short form bill of costs. That item relates to letters prepared by the defendants' solicitors during the period commencing 21 January 2002 and ending 5 March 2002, totalling 29 pages.

I shall deal first with the documents referred to at Item 15 of the draft short form bill of costs. These are documents referred to in an exhibit to an affidavit. The question arises whether SCR 59.02 applies to documents referred to in an exhibit to an affidavit as opposed to documents referred to in the body of an affidavit. In Beneficial Finance Corporation Ltd and Ors v Price Waterhouse (1996) 68 SASR 19, Lander J (at 49), as a member of the Full Court, expressed his views as to whether or not SCR 59.02 applied to documents referred to in an exhibit to an affidavit. The other members of the Court did not find it necessary to deal with the point. His Honour said:

"That letter is then exhibited in conformity with r 59.02 being a document referred to in the affidavit. It is not the affidavit which refers to the documents which are the subject of the orders made by Olsson J but it is the exhibit. In Re Hinchliffe the court obliged a party to produce the exhibits to an affidavit which the party had in his possession. The case stands for no more than the rule itself. It is not authority for the proposition that where a party exhibits a document to an affidavit any other documents referred to in that exhibit become subject to immediate and summary production.

The ratio of the case is succinctly stated by A L Smith LJ:

'When a person makes an affidavit, and states therein that he refers to a document marked with the letter A, the effect is just the same as if he had copied it out in the affidavit. It is only made an exhibit to save expense. Therefore any person who is entitled to see the affidavit is equally entitled to see the document referred to therein.'

I would be disinclined to interpret this rule, as his Honour has, to require any party who exhibits a document to be required to produce any document referred to in that exhibit. That could produce significant hardship. So also, I would not interpret this rule as requiring a party who has referred to a document in a pleading as thereafter under an obligation to produce any document referred to in any of those first-mentioned documents. That is not what the rule says in my opinion. The qualification for the production of the document is that the pleading refers directly to that document, or the document is exhibited to an affidavit, not that the document referred to in the pleading or exhibited in the affidavit in turn refers to another document making that last-mentioned document subject to production."

The effect of the above is that SCR 59.02 does not apply to documents which are referred to in exhibits to affidavits. I consider that I should follow this decision and, accordingly, I must refuse to make an order for production in respect of the documents set out in sub-paragraph 2.2 of the plaintiff's application.

As to the documents set out in sub-paragraph 2.1 of the application, it has not been suggested by Mr Brohier, counsel for the plaintiff, that the bills of costs referred to by Mr Keane in paragraph 3 of his affidavit may not be the subject of a claim for legal professional privilege. The defendants make such a claim and resist an order for production on that basis. The plaintiff says that a combination of SCR 59.02 and SCR 59.03 operate to defeat the claim for legal professional privilege in the circumstances of this case or, alternatively, if those rules do not override a claim for legal professional privilege, the defendants have waived privilege.

I state at the outset that if the rules either allow me to override a claim for privilege or if privilege has been waived, an order for inspection should be made under SCR 59.03 because such an order is necessary for disposing fairly and expeditiously of the action and is not injurious to the public interest. Mr Keane, counsel for the defendants, has not suggested that an order for production would be injurious to the public interest. The "public interest" referred to in the rule must, in my view, be taken to refer to public interest immunity for production which applies to certain types of documents. It could not be said that that form of privilege may be claimed in respect of the documentation the subject of this application.

The bills referred to, since they are documents to which legal professional privilege applies, cannot be the subject of an order for production unless the claim for privilege is waived. I do not understand SCR 59.03 to have the effect of allowing the Court to override a claim for legal professional privilege once that claim has been properly established. It follows that the only basis upon which the plaintiff may obtain an order for production of the bills of costs is where privilege has been waived. Mr Brohier contended that in the circumstances of this application there had been a waiver of privilege. He relied upon Adelaide Steamship Co Ltd v Spalvins [1998] FCA 144; (1998) 81 FCR 360 at 371-372 and 376-377 and SA Government Financing Authority v Bank of New Zealand and BT Australia (HK) Ltd [2002] SASC 56.

If there has been a waiver of privilege, it could only be of the type which is referred to in the cases as "imputed waiver": Mann v Carnell [1999] HCA 66; (1999-2000) 201 CLR 1 at 13. This case was referred to and relied upon by Gray J (at paragraph 28 of his judgment) in SAGFA v Bank of New Zealand. In essence, waiver is to be imputed to a party who would otherwise be able to claim legal professional privilege if that party's conduct is inconsistent with the maintenance of confidentiality in relation to solicitor/client communications. In my view, the statement made by Mr Keane on behalf of the defendants in paragraph 3 of his affidavit does not constitute behaviour which is inconsistent with the maintenance of confidentiality. He could quite easily have deleted reference to the bills from what he deposed to at paragraph 3 of his affidavit and the same result would have been achieved. To hold otherwise would be to render any applicant for security for costs liable to an order for production of privileged documents relied upon in order to support their claim in relation to the quantum of costs which have been incurred in the past. Such a result would severely inhibit the making of such applications.

For these reasons, the application should be refused.

Judgment No. [2002] SASC 144

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