Anpor Holdings Pty Limited v Frederick Swaab

LEGISLATION CITED : Uniform Civil Procedure Rules Evidence Act 1995

CASES CITED : DSE Holdings Pty Ltd v Intertan Inc [2003] FCA 384; 127 FCR 499

PARTIES : Anpor Holdings Pty Limited Frederick Swaab (trading as Swaab Attorneys)

COUNSEL : J. O'Connor (Plaintiff) D.R. Pritchard SC (Defendants)

SOLICITORS : JT Law (Plaintiff) Middletons (Defendants)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PROFESSIONAL NEGLIGENCE LIST

2009/00297830 Anpor Holdings Pty Limited v Frederick Swaab (trading as Swaab Attorneys)

JUDGMENT 1 McCallum J: These are proceedings for professional negligence brought by Anpor Holdings Pty Limited against its former solicitors. The application presently before the court is the solicitors' application for access to six documents produced on subpoena over which Anpor Holdings claims client legal privilege. 2 It is acknowledged on behalf of the defendant solicitors that the claim for privilege is properly supported by evidence establishing that there was a relevant retainer and that the documents in question record confidential communications within the scope of that retainer. The only issue for my determination is whether the privilege otherwise properly asserted has been waived. The defendants contended that in order to determine that issue, it would be necessary for me to inspect the documents in accordance with the court's power under Rule 1.8 of the Uniform Civil Procedure Rules. Anpor Holdings did not oppose that course. 3 In order to understand the contention that privilege has been waived, it is necessary to explain something of the history of the proceedings. The present proceedings are not the first proceedings between the parties. On 21 December 2007, Anpor Holdings commenced proceedings based, as I was informed, on substantially the same allegations as those that underlie its claim in the present proceedings. 4 On 26 August 2008, Malpass AsJ made an order by consent in the original proceedings that Anpor Holdings provide security for costs in the sum of $700 000. The security was to be provided in two instalments, the first in the sum of $400 000 payable by 19 September 2008. 5 Anpor Holdings did not comply with that order and on 3 July 2009, Rothman J dismissed the proceedings on the grounds of its extended default in that respect. That order, of course, did not preclude the commencement of further proceedings pleading the same causes of action. 6 In due course, Anpor Holdings decided to bring a fresh action. The present proceedings were commenced by statement of claim filed 30 October 2009. The statement of claim was valid for service for a period of six months in accordance with rule 6.2(4)(a) of the UCPR. Accordingly, unless that period was extended by order of the court, the statement of claim had to be served on or before 30 April 2010. It was in fact served ten days later, on 10 May 2010. 7 On 21 May 2010, the defendants filed a Notice of motion seeking an order that the originating process be set aside pursuant to rule 12.11 of the UCPR and, alternatively, that the proceedings be dismissed for want of due despatch. 8 Anpor Holdings responded to the defendants' application by moving the court (by Notice of Motion filed 10 June 2010) for an extension of the time within which the statement of claim was valid for service. Neither of those applications has yet been listed for hearing. 9 The defendants then issued subpoenas to Anpor Holdings' present and former solicitors. The documents the subject of the present application were produced in response to those subpoenas. 10 On 7 July 2010, Anpor Holdings' sole director, Mr Alfred Wong, swore an affidavit in support of the application for an extension of the time for service of the statement of claim. The present application is based principally on the contention that service of the affidavit waived privilege over a series of previously confidential communications and that it is inconsistent with that waiver for Anpor Holdings to maintain the privilege now claimed.

11 Anpor Holdings initially claimed privilege over all of the documents identified in an annexure to the affidavit of Mr John Tomaras (Anpor Holdings' present solicitor) sworn 4 July 2010. At the outset of the hearing of the motion, I was informed that the claim was maintained only in respect of documents 1, 2, 3, 18, 19 and 20 in that list. 12 The defendants tendered Mr Wong's affidavit sworn 7 July 2010 as evidence on the present application, contending that it contains admissions as to the waiver of privilege. It may be more accurate to say that the service of the affidavit itself constitutes the alleged waiver. 13 Mr Wong's affidavit was served voluntarily in support of Anpor Holdings' application for an extension of time. It was not served pursuant to any order or direction of the court, or otherwise under compulsion of law: cf s 122(5)(a)(iii) of the Evidence Act 1995. In that circumstance, counsel for Anpor Holdings did not oppose the admission of the affidavit as evidence on the present application. He did not accept, however, that the affidavit constituted any relevant waiver of privilege or any admission of such waiver. 14 The defendants placed particular reliance on the following parts of Mr Wong's affidavit : a. paragraph 13, in which Mr Wong states that "some time after the dismissal of [the original proceedings]" he instructed his solicitor to commence fresh proceedings against the defendants in respect of the same causes of action; b. paragraph 15, in which Mr Wong states that, following the commencement of winding up proceedings against Anpor Holdings by the Australian Taxation Office, he instructed his solicitor to suspend the intended fresh proceedings against the defendants for the time being; c. paragraph 22, in which Mr Wong states that, in about October 2009, his solicitor reminded him that the causes of action in the proposed fresh proceedings would soon be statute-barred under the relevant legislation and that, in those circumstances, he determined to proceed with the fresh proceedings, despite having not decided on the fate of Anpor Holdings, and instructed the solicitor to complete the statement of claim and file it in Court; d. paragraph 23, in which Mr Wong states that, on about 23 October 2009, he instructed his solicitor, following the filing of the statement of claim, not to serve it on the defendants pending the determination on placing Anpor Holdings under voluntary administration. I repeat, for convenience of reference, that the statement of claim was then filed on 30 October 2009; e. paragraph 33, in which Mr Wong states on information and belief that an email attaching a letter dated 21 April 2010 was received by Anpor Holdings's in-house counsel from the solicitor " in relation to his appearance on behalf of Anpor at a conference hearing before Registrar Bradford in these proceedings" , which email and attachment were forwarded to Mr Wong on the same day; f. paragraph 33-34 (scil: 34-35), in which Mr Wong explains that he overlooked the letter of 21 April until 7 May, when he instructed the solicitor to serve the statement of claim "as soon as possible"; g. paragraph 36, in which Mr Wong asserts that at no time prior to being informed by his solicitor of Swaab's notice of motion to dismiss these proceedings was Mr Wong aware of the requirement under the Rules that Anpor Holdings had 6 months from the date of filing the statement of claim within which to serve it on the defendants and, further, that had he been aware of such 6 month limitation period he would have given instructions to serve the statement of claim promptly after the execution of the document; and h. paragraph 37, in which Mr Wong expresses his concern that Anpor Holdings will no longer be able to recommence fresh proceedings. 15 The documents on Mr Tomaras' list over which privilege is claimed are described as follows: Doc Date Document Description 1 3 July 2009 Handwritten document been (sic) hearing notes of the Notice of motion for dismissal of proceedings [previous court proceedings between the parties] by Ted Tzovaras of Tzovaras Legal. 2 3 July 2009 Email from Ted Tzovaras to Alfred Wong in relation to payment of security for costs ordered on 7 July 2009. 3 3 July 2009 Email from Ted Tzovaras to Alfred Wong providing an advice and reporting with respect to the Defendants Notice of Motion for the dismissal of the proceedings listed before Justice Rothman on 3 July 2009. 18 21 April 2010 Letter from JT Law Pty Ltd to Mr Alfred Wong providing advice in relation to the outcome of the hearing before the registrar at the conference hearing on 21 April 2010. 19 7 May 2010 Email from Wai Kim Kok to John Tomaras providing instructions to the current proceedings. 20 6 May 2010 Letter from JT Law Pty Ltd to Mr Alfred Wong providing advice and seeking instruction with respect to the current proceedings.

16 It is well established that client legal privilege is a substantive common law right and not something that can be abrogated as a matter of judicial discretion. The critical task on the present application is to determine whether there is inconsistency between the conduct of the client and the maintenance of the confidentiality. The application is not to be determined by "some more broad ranging notion of fairness" or by balancing the competing interests of the parties: DSE Holdings Pty Ltd v Intertan Inc [2003] FCA 384; 127 FCR 499 at [24] per Allsop J (as his Honour then was). If there is no inconsistency, Anpor Holdings is entitled to keep the communications immune from disclosure. 17 The alleged inconsistency in the present case rests in the fact that Mr Wong has made open assertions as to instructions given by him at various points in time and as to his awareness (or lack of it) of the provision in the Rules that the statement of claim was valid for service for only 6 months from the date on which it was filed. As noted on behalf of Anpor Holdings, it is not enough that the contents of the privileged communications might assist the defendants in the resolution of any fact in issue raised by those contentions. Nor would it be enough if I were satisfied, upon inspecting the documents, that they recorded communications consistent with the assertions made by Mr Wong in his affidavit. 18 What is pertinent in the context of the present case is to ascertain whether there has been an open assertion as to the contents of a confidential communication, or which necessarily lays open the contents of that communication to scrutiny, so as to give rise to a relevant unfairness. 19 Subject to one exception, I am not satisfied that Mr Wong's affidavit articulated the contents of confidential communications between Anpor Holdings and its solicitors or otherwise opened them to scrutiny. At the hearing of the application, I acceded to the suggestion that it would be necessary for me to inspect the documents to determine that question. On further reflection, I am not sure whether that was necessary but for abundance of caution I have taken that course. 20 Document 1 is described as "hearing notes" dated 3 July 2009. The author of the document is Anpor Holding's former solicitor, Mr Ted Tzovaras. The document is handwritten and I should note that parts of it are difficult to read. Nonetheless, I do not think there is any aspect of Mr Wong's contentions in support of Anpor Holding's extension application that opens the solicitor's notes taken at court to scrutiny. The defendants' application for leave to inspect that document is refused. 21 Document 2 is an email in relation to payment of the security for costs ordered by Malpass AsJ. Nothing said by Mr Wong in his affidavit exposes or invokes support from the contents of that document so as to render it unfair of Anpor Holdings to seek to maintain its confidentiality. My inspection of the document has not altered that view. The defendants' application for leave to inspect that document is refused. 22 Document 3 is an advice to the client following the decision of Rothman J dismissing the proceedings. Mr Wong did not expressly refer to the content of that advice in his affidavit. However, a careful comparison of the contents of another document that has been disclosed (the first document under tab 3 of the exhibit to Mr Wong's affidavit) with document 3 reveals that Anpor Holdings has disclosed and relied upon advice set out in that letter in support of the extension application. The defendants should have leave to inspect document 3, subject to the plaintiff having an opportunity to mask, at least, the last paragraph of the document should it wish to do so. 23 Documents 18 and 19 are the letter dated 21 April 2010 referred to in paragraph 33 of Mr Wong's affidavit and an email to which it was an attachment. Mr Wong's affidavit was careful to avoid invoking the contents of that letter in support of Anpor Holding's extension application. I am not satisfied that there is any inconsistency between Mr Wong's reliance on the matters set out in his affidavit and Anpor Holding's maintenance of confidentiality in the communications recorded in those documents. 24 Separately, I have given consideration to the question whether, by his contention in paragraph 36 of his affidavit as to an absence of awareness of the six-month rule, Mr Wong has opened to scrutiny all advice Anpor Holdings received consequent upon the dismissal of the first proceedings.

25 Upon analysis, I do not think that is the correct approach. It goes without saying that a solicitor who had knowledge inconsistent with such a contention could not maintain a case on the strength of it consistently with his duty to the court (I do not mean to suggest that is the position in the present case). That is a different question. I am not satisfied that a statement by a client to the effect that he was never advised about a certain matter opens the content of all legal advice ever received. The defendant's application for leave to inspect documents 18 and 19 is refused. 26 Document 20 is a letter dated 6 May 2010 addressed by Mr Tomaras to Mr Wong. In paragraph 34 of Mr Wong's affidavit, he states that, on about 7 May 2010, his brother, Ivan Wong, who works closely with Wai Kim, reminded him that the proceedings were stood over until the following week and that the statement of claim should be served prior to the next court date. The affidavit does not, however, invoke or refer to the contents of document 20 in that context. I am not satisfied that its contents have been waived. The defendant's should not have leave to inspect that document. 27 The orders are: 1. That the defendants have leave to inspect document 3, subject to the plaintiff having an opportunity to mask the last paragraph of the document should it wish to do so; 2. That the defendants' Notice of motion filed 15 July 2010 otherwise be dismissed; 3. That the defendants pay the plaintiff's costs of the hearing of the motion.

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