ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD AND THE BELL GROUP FINANCE Pty Ltd -v- WA GLENDINNING & ASSOCIATES PTY LTD [2019] WASC 54 (22 February 2019)

(b) Bell Group NV (in liq) (BGNV) seeks orders to the effect that the following documents, over which BGNV makes a claim for privilege, not be produced or made available for inspection being:

(i) 18 documents discovered in pt 1 of the sch 1 of Mr Woodings (together with duplicates) instead be discovered in pt 2 (sch 1 documents); and

(ii) 108 documents discovered in pt 1A by ICWA (together with duplicates) instead be discovered in pt 2 (sch 2 documents).

2. The Bell companies and background relevant to this application

1. Mr Geoffrey Frank Totterdell was appointed the official liquidator of TBGL on 24 July 1991. Mr Totterdell ceased to be the liquidator of TBGL on 21 August 2014. On 3 March 2000, Mr Woodings was appointed a joint liquidator of TBGL. On 21 August 2014, upon the resignation of Mr Totterdell, Mr Woodings became the sole liquidator of TBGL.
2. Mr Woodings was appointed official liquidator of BGF on 3 March 1993.
3. Mr Woodings is also the provisional liquidator of another related Bell company, Western Interstate Pty Ltd.
4. BGNV is one of two overseas subsidiaries of TBGL. BGNV is a company incorporated in the Netherlands Antilles. On 3 January 1995, a liquidator was appointed to BGNV in the Netherlands Antilles. On 19 July 1996, the court made orders that the BGNV liquidator be appointed as Australian liquidator to assist the external administration in the Netherlands Antilles. On 26 March 1997, the court ordered that BGNV be wound up as an insolvent pt 5.7 body pursuant to the Corporations Law and appointed the BGNV liquidator as the ancillary liquidator of BGNV in Australia.[1]
5. BGNV's trustees in bankruptcy are Mr Leo Spigt, of Curacao and Mr Fiso Meeter, of Rotterdam. BGNV's liquidator, in Curacao, is Troka Holdings BV. BGNV's Australian liquidator is Garry John Trevor and its representative is Paul Grise.
6. The other overseas subsidiary of TBGL is Bell Group Holdings (UK) Ltd (BGUK). BGF is a creditor of BGUK in its own right.

1. TBGL collapsed in the 1980s. In 1995, in the wake of the collapse, the liquidators of TBGL and BGF; ICWA; the Law and Debenture Trust Corporation Plc (LDTC); BGNV and the Commonwealth entered into agreements (known as indemnifying agreements). The indemnifying agreements were entered into for the purpose of securing funding to enable the liquidators to pursue proceedings to recover or preserve the assets of TBGL and BGF, especially through proceedings against a number of banks (the Main Proceedings).
2. In the Main Proceedings, the claim against the banks was that:

(a) they had knowingly assisted and participated in breaches of fiduciary duty by the directors of the various companies in the Bell Group; and

(b) the banks knowingly received the benefits which flowed to them as a result of those breaches.[2]

1. The liquidators were successful in the Main Proceedings.[3] As a result of the Main Proceedings, and other proceedings brought by the liquidators, the liquidators in 2008 recovered approximately $1.8 billion (including interest).[4]
2. In this matter the parties to the interlocutory applications were all plaintiffs (among others) in the Main Proceedings. BGNV and ICWA are now defendants to the application brought by Mr Woodings in COR 146 of 2014.
   1. In Bell Group Ltd (in liq) v Westpac Banking Corporation [No 10] Owen J summarised the findings he made in the Main Proceedings in Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9][5] (when determining the precise form of relief that should be granted) as follows:[6]
      1. The plaintiffs established a cause of action on the first limb of Barnes v Addy; namely, the banks received trust property knowing that it arose from a breach of the directors' fiduciary duties.
      2. The plaintiffs failed to establish a cause of action based on equitable fraud.
      3. There is no such thing as a 'group' Barnes v Addy claim. This, combined with the failure of the equitable fraud claim, means that relief must attach to individual companies and individual transactions.
      4. It follows from the establishment of the first limb Barnes v Addy claim that the plaintiffs have identified trust property (more accurately in the circumstances of this case property to which fiduciary obligations attached) received by the banks.
      5. The plaintiffs are entitled to equitable relief. The guiding principle is that equity intervenes only to the extent necessary to do practical justice between the parties. The court has a wide discretion to mould equitable relief for this purpose. But, like all discretions of this nature, it must be exercised judicially. One aspect of that principle is that there must be a reasonable evidentiary base for the relief ordered.
      6. A prerequisite to equitable relief of the type sought by the plaintiffs is that the other party can be restored to the position it enjoyed prior to the event giving rise to the claim for equitable relief. But exact restoration is not essential. The party must be restored to its original position so far as is possible.
      7. Not all of the Bell group companies that entered into Transactions are plaintiffs in the action. As a general proposition relief cannot be granted to an entity that is not a party to the action. This is especially so where, as in this case, Transactions entered into by non-plaintiff entities have not been set aside.
      8. The primary monetary relief to which the plaintiffs are entitled is the disgorgement by the banks of the proceeds from assets realised or obtained by virtue of rights and powers arising from the impugned Transactions. The proceeds fall into five categories, as discussed in s 35 of Bell (No 9).
      9. The plaintiffs are also entitled to compensatory relief. In Bell (No 9) I made it clear that the compensatory relief would be measured by an award of interest, not through an account of profits.
      10. The banks established that the on-loans from the three BGNV bond issues were subordinated. The plaintiffs failed to establish that the BGNV Subordination Deed was procured by breach of fiduciary duty by BGNV's director. That Transaction has not been set aside.
      11. There are litigation funding arrangements in place between the liquidators of the various Bell group companies and funding creditors. I am not aware of details of the arrangements. At least one application has already been made under s 564 of the Corporations Act 2001 (Cth) (although it has been deferred pending the outcome of this action) and, no doubt, other similar applications will be made in due course. The litigation funding arrangements are of no relevance to my deliberations on relief as between the parties to these proceedings.
   2. The proceeds of the Main Proceedings have yet to be distributed by the liquidators in the course of the liquidation of TBGL and BGF. Consequently, in COR 146 of 2014, the substantive application by Mr Woodings is for orders to be made as to how, and to whom, the proceeds of the amounts recovered in the Main Proceedings are to be made in preference to the indemnifying creditors.

1. On 6 April 1995, TBGL (by Mr Totterdell), and the indemnifying creditors (the Commonwealth, LDTC, BGNV and ICWA (known then as the State Government Insurance Commission)), entered into an agreement for indemnification to secure the funding to enable Mr Totterdell as liquidator to recover or preserve the assets of TBGL.
2. On the same day, BGF (by Mr Woodings) entered into an agreement for indemnification with the same indemnifying creditors. This agreement was on the same terms as the agreement for indemnification that Mr Totterdell had entered into with each of the indemnifying creditors.
3. The Commonwealth was a creditor of TBGL and BGF in relation to unpaid tax.
4. LDTC is a trustee of bonds issued by BGNV to conduct the Main Proceedings on its behalf.[7] Each of the indemnifying creditors were the four principal creditors of TBGL.[8]
5. It is common ground that but for the indemnifying agreements the Main Proceedings (against the banks) would not have commenced.
6. Pursuant to cl 7.1, 7.2 and 7.3 of each of the indemnifying agreements it was a condition precedent to the Commonwealth, LDTC, BGNV and ICWA indemnifying Proceedings[9] that Mr Woodings and Mr Totterdell make an application to the court for orders under s 564 of the Corporations Law (repealed).
7. Section 564 of the Corporations Law provided that:

564 Power of Court to make orders in favour of certain creditors

Where in any winding up:

(a) property has been recovered under an indemnity for costs of litigation given by certain creditors, or has been protected or preserved by the payment of money or the giving of indemnity by creditors; or

(b) expenses in relation to which a creditor has indemnified a liquidator have been recovered;

the Court may make such orders, as it deems just with respect to the distribution of that property and the amount of those expenses so recovered with a view to giving those creditors an advantage over others in consideration of the risk assumed by them.[10]

1. An application under s 564 was made by Mr Woodings and Mr Totterdell but was dismissed by Templeman J on 13 November 1996.[11]
2. Among other grounds, Templeman J dismissed the s 564 application on grounds that:

(a) there was no jurisdiction to grant relief under s 564 for the distribution of the proceeds of a claimed chose in action until that claim had been established by a judgment; and

(b) even if there was jurisdiction, due to a 'catalogue of uncertainties', it would not be appropriate to exercise the court's discretion to grant relief at that time.[12]

1. As a consequence of the dismissal of the s 564 application, on 4 July 1997, the parties to the indemnifying agreements entered into further amending agreements to amend each of the indemnifying agreements. One amendment deleted cl 7.2 from each indemnifying agreement. The deleted cl 7.2 in each agreement was replaced by an amendment that had the effect of deleting the condition precedent requiring the liquidators to institute s 564 proceedings. Instead, the replacement clause required the liquidators to use their best endeavours to procure a s 564 order in the terms provided in cl 7.1 of the indemnifying agreements.
2. By notice of termination on 26 March 1999, pursuant to cl 3.2 of the indemnifying agreements BGNV gave notice to Mr Totterdell and Mr Woodings as liquidators of TBGL and BGF respectively that it (BGNV) terminated its obligations to indemnify the liquidators under each of the indemnifying agreements.
3. Consequently, on and from 31 March 1999, BGNV became a terminating creditor and ceased to provide funding to the liquidators for the Main Proceedings. The remaining indemnifying creditors continued to provide the necessary funding for the Main Proceedings after BGNV became a terminating creditor.
4. The effect of termination was provided as set out in cl 3.4 of each of the indemnifying agreements, as amended on 4 July 1997. Clause 3.4 (as amended) provided:

Upon the happening of any of the events referred to in clause 3.2, the Terminating Creditors shall have no continuing rights, entitlements and obligations under this Agreement other than any obligation which arose prior to the Termination Date as well as its continuing obligations under clause 12.1 and save to receive a payment under paragraph (b) of clause 7.1 or a payment, right or entitlement which arises under either clause 3.1 of the Amending Agreement or clause 5.5 but shall for all other purposes of this Agreement (but for no other purpose) cease to be a Creditor.

1. The onus of establishing privilege rests on those claiming it.[13] However, whilst the ultimate legal onus remains upon the party claiming privilege, under O 26 r 12(1)(a) an evidential onus is cast upon the party seeking inspection if the claim for privilege is 'apparently proper'.[14]
2. In CMA Assets Pty Ltd v John Holland Pty Ltd [No 2], Allanson J observed:[15]

The general principle, at least where legal professional privilege is in issue, is that the party claiming the privilege has the onus to establish the facts on which the privilege is based: Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, 689; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 [11]. Mere assertion of the claim is not enough: what is required is exposure of facts from which an informed decision can be made as to whether the claim for privilege is supportable: National Crime Authority v S [1991] FCA 234; (1991) 100 ALR 151 at 159160.

This, however, is subject to O 26 r 12 of the Rules of the Supreme Court 1971 (WA). Where the claim of privilege is made in a list of documents supplied on discovery, the party claiming discovery may traduce the claim by evidence, but in the absence of evidence to that effect the claim shall be sustained. Accordingly, in relation to the discovery the plaintiff bears at least an evidentiary onus to displace the claim to privilege, at least where the claim has been properly formulated in the affidavit of discovery. See CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48 [33] [35]; Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239, 246 247 (Owen J), cf 240 241 (Kennedy J) and 243 (Rowland J); Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1, 5, 16, 22. That onus may, of course, be satisfied by evidence adduced by the plaintiff.

6. Mr Woodings' application A. Clause 9.11 of the indemnifying agreements

1. Of importance for the determination of Mr Woodings' application (and to a lesser extent BGNV's application) is that amendments to the indemnifying agreements made by the further amending agreements inserted a new cl 9.11, into each indemnifying agreement. Clause 9.11 provides:[16]

Each Creditor hereby acknowledges and agrees that it will not use any information or document provided to it by the Liquidator under this Agreement or otherwise voluntarily in a manner which is prejudicial to the effective prosecution of the Proceedings. This provision does not restrict a Creditor from using as it sees fit any information or document provided to it by the Liquidator as a result of proceedings brought by the Creditor on its own account in relation to a Company or the Liquidator.

1. ICWA claims that for Mr Woodings to resist disclosure of the documents Mr Woodings must necessarily rely upon cl 9.11.
2. The documents the subject of Mr Woodings' application were created between 15 November 1995 and 19 June 1998. Clause 9.11 was inserted into the indemnifying agreements on 4 July 1997.
3. Mr Woodings claims, and ICWA accepts,[17] that the documents the subject of Mr Woodings' application would ordinarily attract legal professional privilege on grounds that each document:

(a) is a communication made between Mr Woodings or his predecessor Mr Totterdell, their legal advisors Blake Dawson Waldron and counsel retained to advise and represent the liquidators; and

(b) was prepared for the dominant purpose of legal advice to Mr Woodings and Mr Totterdell (and others) in relation to the Main Proceedings.

1. ICWA was provided with copies of the Woodings' documents, as an indemnifying creditor, to make decisions with respect to the funding of Proceedings.
2. Mr Woodings claims the use of the documents by ICWA was permitted, so long as it was consistent with the ongoing maintenance of confidentiality over the documents. For any use that might involve the destruction of that confidentiality, Mr Woodings says that ICWA would require his express consent, and perhaps the consent of Mr Totterdell.
3. The indemnifying agreements contained no confidentiality obligation until the amendment by the further amending agreements, entered into on 4 July 1997.
4. ICWA concedes that until cl 9.11 came into effect, all of the Woodings' documents were protected from use by ICWA by the equitable obligation of confidence.[18]
5. ICWA claims the operative effect of cl 9.11 is that:

(a) its express terms have destroyed any and all privilege in the Woodings' documents;

(b) it contains a limited express confidentiality obligation cast upon ICWA; and

(c) clause 9.11 no longer prevents ICWA from disclosing the documents in pt 1A of its list of documents.

1. ICWA argues that the first sentence in cl 9.11 no longer has any work to do as there are no longer any Proceedings on foot, given that the Main Proceedings are concluded.
2. ICWA points out that Proceedings are defined in cl 1.1 of each of the indemnifying agreements to mean as follows:

'Proceedings' means any litigation or claim which either the Company or the Liquidator may pursue either in the Company's name or in the name of the Liquidator either with or without coplaintiffs against Third Parties and which litigation will, if successful, result both in the Company's property being recovered, protected or preserved or the assets of the Company generally available for the satisfaction of the claims of its creditors being increased and in expenses incurred by the Liquidator pursuant to or under this Agreement being recovered.

1. Mr Woodings does not concede that all Proceedings have been concluded. Senior counsel for Mr Woodings referred to an appeal that Mr Woodings has instituted to recover a large tax payment from the ATO. Despite the submission put by ICWA that there are no longer any Proceedings on foot, it does not appear to be disputed by ICWA that this appeal would also constitute Proceedings within the meaning of that term in the indemnifying agreements.
2. ICWA concedes that the second sentence in cl 9.11 does not apply to it or to the proceedings in COR 146 of 2014. Further, that 'proceedings' referred to in the second sentence of cl 9.11 does not refer to 'Proceedings' as defined in cl 1.1 of the indemnifying agreements.
3. ICWA says the first sentence of cl 9.11 defines the confidentiality obligation that was imposed upon ICWA (and other indemnifying creditors) in respect of documents and information provided to it by Mr Woodings or solicitors Blake Dawson Waldron. ICWA says the clause encompasses the parties' express agreement as to the metes and bounds of their confidentiality obligations.
4. ICWA claims it was the obvious intent of the parties to the indemnifying agreements that the parties would be free to disclose such documents in the s 564 proceedings. It says that this was because when the parties entered into the indemnifying agreements, they contemplated bringing the proceedings in COR 146 of 2014. They also point out that pursuant to cl 7.1 of the indemnifying agreements the liquidators were obliged to bring the s 564 application that Mr Woodings makes in these proceedings.
5. ICWA argues that the determination of the s 564 application is focused upon the risk run by the indemnifying creditors and that those risks were considered in the privileged communications. As such, the parties must have known that there would be a need to place privileged communications before the court.
6. ICWA's argument also relies upon the effect of cl 7.4 of the indemnifying agreements. Clause 7.4 was inserted by amendment to the indemnifying agreements on 4 July 1997. Clause 7.4 provides:[19]

Each Creditor must severally support any application brought by the Liquidator in accordance with clause 7.2 including, but not limited to, the supply to the Court of all necessary information to the extent that the Creditors are able and appearing at the hearing of such an application.

1. ICWA contends that, rather than the indemnifying creditors being prevented from disclosing information in relation to the s 564 application, creditors were obliged by cl 7.4 to each severally support any application brought by the liquidator in accordance with cl 7.2. This, according to ICWA, included but was not limited to their supply to the court of all necessary information to the extent that creditors are able. Thus, it is said that the parties expected that there would come a time at which the obligations of confidentiality would cease, and they would need to lay communications which had previously been privileged before the court.
2. ICWA also points out that the second sentence in cl 9.11 is not engaged. This is because ICWA has not as a creditor been provided with any documents by Mr Woodings or Mr Totterdell as a result of proceedings brought by it on its own account. Consequently, ICWA claims that it follows from this that because the restrictions on the disclosure of documents provided to ICWA by Mr Woodings related to the Main Proceedings (in its capacity as an indemnifying creditor) cl 9.11 is no longer operable, and ICWA is free to use the information or documents.
3. ICWA's construction of cl 9.11 relies in part upon an argument that once cl 9.11 was introduced by the further amending agreements the obligation of confidence and entered 'the field' of confidential obligations in the documents was ousted or replaced by cl 9.11. This is said to be the case because cl 9.11 comprehensively covers the field of the indemnifying creditors' confidentiality obligations.
4. ICWA argues that cl 9.11 captures any information or document which would be perceived as confidential or otherwise privileged. Further, it says that the word 'use' in cl 9.11 goes further than disclosure. Consequently, it attempts to put an argument that the obligation covered by cl 9.11 appears to be wider than the equitable duty of confidence.
5. Also in support of its argument, ICWA claims the objective purpose of cl 9.11 (when read in the context of the entire terms of the indemnity agreements as amended) is to be found in recital C of the further indemnifying agreements which provides that the purpose of the amendments were to facilitate the prosecution of the Main Proceedings.
6. ICWA says to implement the objective purpose in recital C, cl 7.4 was included in the further amending agreements together with cl 9.6 which required the liquidator to make available to the indemnifying creditors all books and records of BGF and TBGL, as well as all books and records brought into existence in connection with the liquidation of BGF and TBGL in the course of the examination Proceedings or in the Main Proceedings. ICWA also points to cl 9.6, which expressly permitted the indemnifying creditors to take copies of such books, records and transcripts, and to provide to specified others as it may reasonably require for that purpose of reviewing such books, records and transcripts so as to enable the indemnifying creditors to assess the conduct and outcome of the examination or the Proceedings.
7. ICWA claims that having paid for the documents, by providing funding for the Main Proceedings, it cannot now be restricted by cl 9.11 from now using the information and documents.
8. Finally, in support of its argument, ICWA also relies upon the effect of the entire agreement provisions in the indemnifying agreements. Clause 18.1 is to the effect that each indemnifying agreement constitutes the entire agreement between the parties and supersedes all prior agreements, arrangements, undertakings, understandings and negotiations.

B. Legal principles - is the equitable duty of confidence ousted by contractual promises of confidentiality?

1. This issue has been considered by a number of Australian courts but the principles to be applied have not been comprehensively settled. Perhaps this is because each matter has largely turned upon an assessment of the remedies sought in the context of the cause of action and the facts before the court in each matter.
2. In Coles Supermarkets Australia Pty Ltd v FKP Ltd, Gordon J was called upon to consider whether the equitable duty of confidence and a contractual promise of confidentiality can coexist.[20] Her Honour's reasoning in respect of this point was made in the context of considering whether a remedy in equity could coexist with a remedy at law.[21]
3. The question before Gordon J in Coles Supermarkets was whether, as a consequence of breaches of an express contractual confidentiality provision (in circumstances where the plaintiff relied upon the same conduct to make a claim for a breach of the equitable duty of confidence), the equitable obligation of confidence still existed.[22] Her Honour found that it was not possible to recover both in law and in equity. Her Honour said:[23]

The question of the equitable breach of confidentiality alleged by Coles is in a different category. The conduct relied upon by Coles to make out this claim is the same conduct that I have found constitutes a breach of the confidentiality term in the Offer Letter. Coles argues that equitable and legal obligations of confidence can co-exist. I disagree. In my view, no equitable duty of confidence arises where there is a contractual duty: see Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326 at [118]. The fundamental rule is that equity will not intervene where there is an adequate remedy at law. This was recognised by Fullagar J in Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VicRp 17; [1979] VR 167 at 195, where his Honour considered that equity would withhold further remedies for breach of confidence where adequate remedies were available at law.

Moreover, even if the matter were not settled by the authorities, the conclusion that contractual and equitable obligations cannot co-exist would still follow as a matter of logic and basic principles. If a party were allowed to elect whether to bring an action in equity for breach of confidence (which Coles does to get an account of FKP's profits on the Woolworth's deal, in the hopes that those profits are more than its damages), that would effectively eliminate the efficient breach theory of contract because whenever a defendant entered into inconsistent contracts the party whose contract ended up being not performed could then capture any extra profit made by the defendant by suing in equity instead of recovering his own losses at law.

1. Consequently, Gordon J appears to have determined the point by having regard to the principle that equity will not intervene in a breach of an equitable duty where there is an adequate remedy at law. This, however, is not a point relevant in this matter. Mr Woodings' application does not concern a breach of contract or breach of confidentiality. No use of the documents in question has yet been made by ICWA.
2. In a subsequent decision of the Full Court of the Federal Court in Optus Networks Pty Ltd v Telstra Corporation Ltd,[24] the court found that both contractual and equitable relationships might happily coexist.[25] In a joint judgment, their Honours referred to the observations of Gordon J in Coles Supermarkets and her reliance on the observation made by Campbell JA in Del Casale v Artedomus (Aust) Pty Ltd,[26] that where a contractual obligation covered the topic, there would be no occasion for equity to intervene,[27] and found that those observations did not apply in the case before the Full Court. The basis for this conclusion was that the contract before the Full Court expressly permitted an account of profits as an available remedy.[28]
3. Whilst their Honours in Optus found that the express terms of the contract contemplated an account of profits, their Honours also went on to observe that the point made by Gordon J in Coles Supermarkets was opposed to much authority. Their Honours cited a number of cases to that effect.[29] The Full Court in Optus also observed that after Coles Supermarkets was decided the High Court in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd[30] made unfavourable observations about the doctrine of 'efficient breach'.[31] In Tabcorp, the High Court observed that the doctrine of 'efficient breach' took no account of the availability of equitable remedies such as specific performance and injunction, which ensure or encourage the performance of contracts rather than payment of damages for breach.[32]
4. In Streetscape Projects (Aust) Pty Ltd v City of Sydney, Barrett JA referred to the reasoning in Coles Supermarkets and Del Casale and Optus (among other decisions) and said that:[33]

... The approach preferred by Gordon J and Campbell JA accords with the residual nature of the equitable duty as recognised by Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (above) at 4378. Deane J referred to 'the equitable jurisdiction to grant relief against an actual or threatened abuse of confidential information not involving any tort or any breach of some express or implied contractual provision, some wider fiduciary duty or some copyright or trade mark right' (emphasis added). It is also consistent with the notion of equity's 'supplementing' role discussed above in relation to fiduciary duties.

1. However, in reasons that immediately followed, Barrett JA found that the question of the coexistence of contractual and equitable duties of confidence did not arise in the matter before the court. His Honour observed that the proceedings before the primary judge at first instance were fought on the basis of coexisting contractual and equitable duties of Streetscape and a separate but equitable duty of confidence cast upon Mr Obeid (who was not party to a contractual obligation).
2. The question of whether equitable duties can coexist with contractual obligations was subsequently considered by Stevenson J in Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd.[34] In Gold & Copper Resources, Stevenson J considered a claim for damages for breach of a confidentiality agreement and in doing so considered whether the evidence established a breach of the equitable duty of confidence. In Gold & Copper Resources, the question was whether, in light of the express terms of the confidentiality agreement, there was any room for an equitable obligation of confidence. In considering this issue Stevenson J found that:

(a) the Court of Appeal in Streetscape, by way of obiter, preferred the views of Campbell JA in Del Casale and Gordon J in Coles Supermarkets;[35]

(b) the decision of the Full Court of the Federal Court in Optus could be distinguished on the facts because the agreement before the court in that matter contained a provision that provided that the agreement was the 'entire agreement and understanding between the parties on everything connected with the subject matter of the agreement';[36] and

(c) in these circumstances, the obiter observations in Streetscape should be followed and the words of Campbell JA in Del Casale that where 'there is a contractual obligation covering the topic there is no occasion for equity to intervene to impose its own obligation' should be adopted.[37]

1. I do not agree that if a contractual provision deals with the subject matter of confidentiality, that an equitable duty of confidence is inevitably ousted.
2. In my respectful opinion, the approach taken by Stevenson J in Gold & Copper Resources; Gordon J in Coles Supermarkets; and Campbell JA in Del Casale should be approached with some caution in this matter.
3. Firstly, in each of those matters the court was called upon to consider the effect of confidential contractual provisions that created duties of confidentiality in order to consider whether breaches of contractual terms had been made out.
4. Secondly, I do not agree with Stephenson J's view in Gold & Copper Resources that the view of the Court of Appeal in Streetscape, expressed as obiter, demonstrated a preference for the views of Gordon J in Coles Supermarkets and Campbell JA in Del Casale. Barrett JA expressed no conclusive opinion on the question. In Streetscape, Barrett JA put a question which was not directly called upon to be answered in Optus, Coles Supermarkets, Del Casale or Gold & Copper Resources. The question was 'whether an equitable duty of confidence arises against one party and in favour of another where those parties have given and received contractual promises of confidentiality creating equal or greater protection of the same subject matter'.[38]
5. In Streetscape, the point Barrett JA squarely put is that to determine whether the equitable duty of confidence is excluded by a contractual provision, dealing with the same subject matter is an issue that turns upon the scope and effect of the contractual provision. If this approach is applied in this matter, the questions to be determined are, firstly, whether cl 9.11 leaves room for the equitable duty of confidence, and secondly if not, what is the effect of cl 9.11.
6. As Gordon J said in Coles Supermarkets the fundamental rule is that equity will not intervene where there is an adequate remedy at law. Consequently, as contemplated by Barrett JA in Streetscape an assessment may be required in a matter as to whether a contractual promise of confidentiality created equal or greater protection than the equitable duty of confidence.
7. It does not necessarily follow that the equitable duty of confidence is excluded by an entire agreement clause. Such clauses prevent a finding that the contract contains additional express terms, but they do not prevent a finding that a contract contains implied terms, at least where a term is implied as a matter of construction of the contract rather than from a consideration of background facts.[39]
8. The equitable duty of confidence is not an implied term but takes effect as an implied undertaking to keep documents and information confidential.[40]
9. In ascertaining whether cl 9.11 creates a greater or lesser duty of confidence than that which arises in equity, consideration must first be given to the nature of the equitable duty of confidence.
10. In NP Generations Pty Ltd v Feneley,[41] Debelle J applied the orthodox duty of the equitable obligation as defined by Lord Denning MR in Seager v Copydex Ltd.[42] In NP Generations Pty Ltd Debelle J said:[43]

As Lord Denning MR noted in Seager v Copydex Ltd [1967] 2 All ER 415 at 417; [1967] 1 WLR 923 at 931:

'The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent.'

To like effect, are the remarks of Megarry J in Coco v AN Clark (Engineers) Ltd [1969] RPC 41 at 46 that the equitable obligation not to use confidential information other than for the purpose for which it was disclosed stems from the concern of equity to enforce obligations of conscience. See also the discussion in Meagher, Gummow and Lehane, Equity, Doctrines & Remedies, Butterworths, Sydney, 1992, 3rd ed, (hereinafter 'Meagher et al') at [4106].

It follows that, where confidential information is entrusted to an employee for a limited purpose, it can only be used for that purpose and no other: Morison v Moat [1851] EngR 790; (1851) 9 Hare 241 at 256 ; [1851] EngR 790; 68 ER 492 at 499 which has been consistently followed and applied since: Torrington Manufacturing Co v Smith & Sons (England) Ltd [1966] RPC 285 at 301; Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services [1989] FCA 384; (1990) 22 FCR 73; 95 ALR 87 . See also the discussion in Dr Gurry's text, Breach of Confidence, OUP, New York, 1984, pp 11315; and in Meagher et al, at [4110].

C. Conclusion - does cl 9.11 extinguish privilege over the liquidator's documents?

1. It is notable that all but one of the Woodings documents were provided to the indemnifying creditors (including ICWA) prior to the parties entering into the further amending agreements in July 1997 which inserted cl 9.11 into the indemnifying agreements. However, this point is not determinative.
2. For the reasons that follow, I am not satisfied that legal professional privilege in the Woodings documents (in the possession of ICWA) have been abrogated or otherwise extinguished by the operation of cl 9.11 of the indemnifying agreements.
3. As senior counsel for Mr Woodings points out:

(a) Proceedings included the Main Proceedings and the examination proceedings (the Examination Proceedings are proceedings instituted under either s 596A or s 596B of the Corporations Law);[44]

(b) pursuant to cl 9.1 of the indemnifying agreements, the liquidators were obliged to give due regard to the unanimous resolutions of the indemnifying creditors in and about the conduct of both the Examination and the Proceedings;

(c) by cl 9.2 the liquidators promised to conduct the Examination;

(d) by cl 9.3 the liquidators, subject to certain matters promised to institute and diligently prosecute Proceedings;

(e) clause 9.4 gave the indemnifying creditors some power over discontinuance, settlement or compromise over Proceedings;

(f) clause 9.5 gave the indemnifying creditors a power to direct discontinuance of Proceedings; and

(g) clause 9.7, as amended, imposed an obligation on the liquidators to give various reports to the indemnifying creditors.

1. It is clear that cl 9.11 of the indemnifying agreements, when read with the other amendments to the indemnifying agreements that took effect on 4 July 1997, did not provide for the use or disclosure of the liquidators' document at large. Nor did cl 9.11 comprehensively cover the field by creating an equal or greater protection of confidence than the equitable duty of confidence.
2. Clause 9.11 is permissive in its terms. It enables the indemnifying creditors to use documents and information (pursuant to the obligations cast upon the liquidators to provide the documents) in limited circumstances.
3. Clause 9.11 simply creates in part the purposes for which the indemnifying creditors may use the information or documents provided by the liquidators to the indemnifying creditors.
4. Clause 9.11 does not comprehensively deal with the subject matter of confidentiality. All the first sentence in cl 9.11 does is to prohibit the use of information or documents in the manner that is prejudicial to the prosecution of the Proceedings. The second sentence is an exception to that restriction.
5. If the equitable duty of confidence was ousted by cl 9.11, and cl 9.11 could be characterised as constituting a code, inferentially it could be said to follow that the indemnifying creditors could not use the documents and information provided by the liquidators for any other purpose than cl 9.11. In particular, the indemnifying creditors could not use the documents or information for the purposes for which the documents were first provided, that is for the purposes specified in cl 9.1 to 9.7 of the indemnifying agreements. For example, the documents and information may not have been used by the indemnifying creditors for the purpose of considering and obtaining advice in respect of continuing settlement or discontinuing the Main Proceedings.
6. Clause 9.11 is a very specific provision about the use by the indemnifying creditors to which documents provided by the receivers can be put. It is a not a provision which operates at large to abrogate by replication the equitable duty of confidentiality over the documents provided to the indemnifying creditors.
7. As senior counsel for Mr Woodings points out, cl 9.11 does not say that it overrides the equitable duty. Nor does it say that it removes, modifies or abrogates the equitable duty. Clause 9.11 restricts what the indemnifying creditors can do with information in the documents for purposes other than the purposes provided for in cl 9.1 to 9.7 of the indemnifying agreements. Clause 9.11 does not enlarge what indemnifying creditors can do with the documents or the information in the documents.
8. It is a wellestablished general rule of construction of all instruments, including contractual agreements, that rights which exist at common law or by statute are not to be regarded as denied by words of dubious import. Before any such denial is accepted, it must appear with reasonable clarity from the language used that the denial is intended.[45]
9. In these circumstances, I am not satisfied that it can be said that cl 9.11 creates a greater or equal protection of confidence than the equitable duty.
10. The question whether cl 9.11 leaves no room for the operation of the equitable duty of confidence could also be said to be answered by considering whether a breach of cl 11 by an indemnifying creditor (such as ICWA) would result in an adequate remedy in the law of contract. Raising this question reveals the nature of the rights and obligations not to use the documents and information, except as prescribed by cl 9.11 which directs attention to whom the rights and obligations created in cl 9.11 are vested.
11. There is no obligation cast upon the liquidators in cl 9.11 to waive confidentiality or privilege in the documents or information in the documents they are obliged by the terms of the indemnifying agreements to provide to the indemnifying creditors. Yet, a contractual right is conferred upon the liquidators to insist upon use and disclosure by the indemnifying creditors of the documents and information in accordance with the express terms of cl 9.11. This obligation would be enforceable in the law of contract. However, cl 9.11 does not cover the field of the indemnifying creditors' right to use the documents, or the information contained in the documents, as the indemnifying creditors may also use the documents and information for the purposes presented in cl 9.1 to 9.7.
12. The terms of cl 9.11 do not permit ICWA to now use the documents it has obtained (over which Mr Woodings claims privilege) in circumstances where ICWA concedes these documents are otherwise privileged and no consent to do so (by Mr Woodings or Mr Totterdell) is forthcoming.
13. In the same way that documents produced in obedience to an order of the court cannot be used for any other purpose other than the purpose for which the documents were provided (unless received into evidence), the same principle could be said to apply. The obligation provided for in cl 9.11 subsists and continues after any Proceedings are concluded without the agreement of the party having the corresponding right to agree to the use (being the liquidators). As counsel for BGNV points out 'once privileged, always privileged. Privilege does not expire by effluxion of time. It only expires by waiver'.[46]
14. In these circumstances, it is immaterial whether the equitable duty of confidence continues to apply or whether the equitable duty was extinguished by cl 9.11 of the indemnifying agreements.
15. In this context, the entire agreement clause does not assist ICWA. On the contrary, the effect of the entire agreement clause, as contended by ICWA, is that cl 9.11, when read with the entire agreement clause in cl 18.1, is immaterial. The express terms of cl 9.11 bind ICWA not to disclose or use the documents or information except as provided for in cl 9.11 or for the purposes of cl 9.1 to 9.7.
16. For these reasons Mr Woodings' claim of privilege over these documents is made out.
17. In light of ICWA's concession that it is not open for it to rely upon cl 9.11 to use or disclose the documents, it also necessarily follows that on this ground also, the orders Mr Woodings seeks should be made.

7. BGNV's application A. Documents discovered by Mr Woodings (sch 1)

1. BGNV's application for orders that 18 documents (together with duplicates) listed in sch 1, and discovered in pt 1 of Mr Woodings' list of documents dated 26 October 2018, not be produced or made available for inspection is opposed. Mr Woodings opposes the application on the grounds that BGNV is unable to make out a claim that any of the documents listed in sch 1 are privileged.
2. BGNV claims that privilege over the documents in sch 1 fall into five categories:[47]

(i) claims of without prejudice privilege in connection with the Western Interstate documents (applicable to all 18 documents);

(ii) a claim of common interest privilege involving advice allegedly given or sought from the Australian Government Solicitor or counsel to the Commonwealth and disclosed to BGNV, ICWA and others (applicable to two documents);

(iii) claims of joint legal professional privilege involving advice given or sought from solicitor Paul Edgar (applicable to four documents);

(iv) claims of common interest privilege (applicable to three documents) involving advice given or sought from Blake Dawson Waldron; and

(v) claims of joint legal professional privilege (applicable to one document) involving advice given or sought from Blake Dawson Waldron.

1. BGNV have applied for orders that certain documents listed in sch 2, and discovered in pt 1A of ICWA's list of documents dated 26 October 2018, not be produced or made available for inspection. The application relates to 108 documents and 28 duplicates. In respect of these documents, BGNV relies on three grounds of privilege: legal professional privilege (on grounds of joint privilege), common interest privilege and without prejudice privilege (falling into six categories).[48]
2. ICWA (like Mr Woodings in respect of sch 1 documents) put BGNV to proof in respect of its claims of privilege.
3. ICWA points out that each of the documents the subject of sch 2 were provided to it as a funding or indemnifying creditor pursuant to the terms of the indemnifying agreements.
4. Many of the documents in the Woodings list (sch 1) and the ICWA list (sch 2) are subject to claims of more than one category of privilege.
5. Mr Woodings also claims privilege over five documents on ICWA's list in pt 1A. These are items 5, 8, 10, 11 and 12 in pt 1A (Mr Woodings' application) and items 23, 28, 59, 60 and 61 in sch 2 (ICWA's list).
6. Insofar as BGNV asserts privilege over five documents in sch 2 (together with duplicates), over which Mr Woodings also claims privilege in his application, for the reasons given in respect of Mr Woodings' application, on grounds that Mr Woodings has not waived privilege in respect of each of these documents, BGNV's application is made out.
7. BGNV are successful in relation to these five documents because cl 9.11 of the indemnifying agreements does not permit ICWA to now use documents that it received as an indemnifying creditor without the permission of at least Mr Woodings.
8. Consequently, it is immaterial that BGNV is now a terminating creditor as the express terms of the indemnifying agreements, including cl 9.11, continue to bind ICWA.

C. Reserved issues BGNV'S application - the retainers and matters discussed in a meeting on 11 June 1996 relevant to entering into a posttermination intercreditor agreement (PTICA)

1. Whether BGNV held retainers with particular firms of solicitors, at relevant times, is material to BGNV's claim of joint legal professional privilege over some of the documents in Mr Woodings' list (sch 1) and a substantial number of documents in ICWA's list (sch 2). The question is whether BGNV held retainers with Blake Dawson Waldron; Mr Edgar (of solicitors Hely Edgar) and solicitors, Lipman Karas.
2. During the course of hearing submissions from counsel for BGNV and ICWA on 20 and 21 November 2018, I was satisfied that the issue of whether BGNV held relevant retainers at the material times was a point that took BGNV by surprise. For this reason, I granted leave to BGNV to file and serve any evidence concerning the existence, scope and effect of the retainers by 1 February 2019. I then listed this issue for further hearing on 1 March 2019 to hear further evidence and submissions in respect of BGNV's claims for joint legal professional privilege arising out of any joint retainer.
3. I also reserved argument on, and made an order allowing, further evidence to be adduced in respect of an issue which goes to matters discussed at a meeting between representatives of BGNV and ICWA on 11 June 1996. The meeting concerned negotiations between ICWA, BGNV, Mr Trevor and the Commonwealth over entry into a posttermination intercreditor agreement (PTICA). The matters discussed at this meeting may be material to BGNV's claim for without prejudice privilege over a number of documents. BGNV claim that these documents were created in the course of negotiations which led to the parties entering into the PTICA, after BGNV became a terminating creditor to the indemnifying agreements.
4. Leaving aside the reserved issues, the parties indicated that it would be of assistance to the preparation for hearing of the substantive matters in COR 146 of 2014 and CIV 2666 of 2016, if prior to 1 March 2019, findings could be made in respect of the remaining claims of privilege made by BGNV. These are:

(a) the without prejudice privilege claims over the Western Interstate documents (listed in sch 1 and sch 2);

(b) the without prejudice privilege claims over documents said to have been created by Mr Woodings for a mediation with the banks in the Main Proceedings (listed in sch 2 only); and

(c) common interest privilege claims that BGNV received as an indemnifying creditor and party to indemnifying agreements (listed in sch 1 and sch 2).

D. BGNV's without prejudice privilege claim over the Western Interstate dispute documents (sch 1 and sch 2)

1. Western Interstate Pty Ltd (Western Interstate) was an Australian Bell Group company and a subsidiary of Bell Brothers Pty Ltd (in liq). Mr Woodings is the liquidator of Western Interstate.
2. In the Main Proceedings, Owen J described the issues raised in relation to Western Interstate as follows:[49]
   1. Western Interstate was an Australian Bell group company and a subsidiary of Bell Bros, which held 95,000 ordinary fully paid shares of $2. In December 1988 (after the BCHL takeover), the memorandum and articles of association of Western Interstate were amended to increase the nominal capital and to create a class of redeemable preference shares. In several separate transactions during December 1988, a total of 43,405 redeemable preference shares in Western Interstate were issued to BGUK at the par value of $2, together with a premium of $9,998 per share. The minutes of the BGUK directors meeting approving the first allotment indicates that the subscription moneys would be 'upstreamed' to the Bell group.

1. Western Interstate passed the subscription moneys through to BGF. According to the book value SNAs (which the banks do not dispute), as at 26 January 1990 Western Interstate was a creditor of BGF in the amount of $537.4 million and Western Interstate's only creditor was BGUK in the amount of $854. The only external creditor of BGUK alleged by the plaintiffs in 8ASC was the Lloyds syndicate banks. Leaving BGNV to one side, Western Interstate was by far the largest inter-group debt owed by BGF.
2. In 8ASC par 8A the plaintiffs plead that the worth or value of Western Interstate's assets may have flowed through to TBGL and BGF as a direct or indirect creditor, shareholder or ultimate shareholder of those Bell Participants wound up as a result of TBGL and (or) BGF taking steps to realise their intra-group investments. The plaintiffs say that this arises because Bell Bros, being the only ordinary shareholder in Western Interstate, had an asset of real and substantial value and that asset could benefit TBGL by reason of it being the ultimate shareholder of Bell Bros.
3. The banks deny that any interest of Bell Bros in Western Interstate, as the ordinary shareholder, would not have been made available to Bell Bros or TBGL. Rather, the banks say, BGUK could have been entitled to a measurably significant potential benefit from the holdings in Western Interstate. As the plaintiffs point out, the crucial issue is the respective interests of the ordinary shareholder, Bell Bros (and hence, ultimately, TBGL) and the preference shareholder, BGUK. They point out that TBGL was also the ultimate shareholder of BGUK, but in this regard it would stand behind the Lloyds syndicate banks as creditors of BGUK.

1. As I understand it, the validity of the Western Interstate preference share issue may still be a live issue between the parties. But it will not be decided in these proceedings.
2. More recently in Insurance Commissioner of Western Australia v Woodings [No 2],[50] Pritchard J described the relevance of the Western Interstate issues in COR 146 of 2014 to the proceedings in CIV 2666 of 2016 by way of the relief sought by ICWA to include:[51]
   • declarations in relation to the construction and operation of agreements known as the Western Interstate Assignment Agreement (WIAA) and the Western Interstate Inter-Creditor Agreement (WIICA) including declarations that BGNV is a 'Terminating Indemnifier' for the purposes of the WIAA and the WIICA; that upon becoming a Terminating Indemnifier, BGNV ceased to have any interest in or claim to 57,000 ordinary shares in Western Interstate Pty Ltd (in prov liq) (Western Interstate) which were the subject of the WIAA; declarations that Bell Bros Pty Ltd (in liq) (Bell Bros) is obliged to transfer those 57,000 shares to the liquidator of BGF; that the liquidator is obliged to receive those shares; and that upon that transfer BGF will hold those shares on trust for ICWA and the Commonwealth; and that ICWA and the Commonwealth are the sole beneficial owners of those shares; and a declaration that any distribution by Western Interstate to ICWA and the Commonwealth, with respect to those shares, is not subject to certain clauses of the WIICA or the PTICA.

ICWA does not seek an order from the Court pursuant to s 564 in relation to the winding up of BGF or TBGL. As I have already observed, ICWA considers that some of the issues raised in the present action are relevant or antecedent to the exercise of the Court's discretion under s 564. By way of example, the relief sought in respect of the shares in Western Interstate is considered relevant to the determination of the assets of BGF which will ultimately be available for distribution in the liquidation of BGF. The relief sought appears to be intended to deal with a contention, actual or anticipated, that BGNV has an interest in those shares.

1. BGNV claim that the communications and documents referred to in sch 1 and sch 2, that are subject to this claim of privilege, are communications which form part of, or disclose the contents of, genuine negotiations undertaken to try and settle a dispute.
2. BGNV says the dispute was between it and the Australian Tax Office, and was about whether Western Interstate should be reinstated and joined as a plaintiff in the Main Proceedings.
3. BGNV claims there was a dispute between the indemnifying creditors. In particular, between it and the Commonwealth. The dispute was alleged to be over how the reinstatement and joinder of Western Interstate should be funded, and how any funds recovered by Western Interstate should be shared.
4. The negotiations in question were undertaken between the indemnifying creditors and the liquidators or their solicitors, or the indemnifying creditors or their solicitors, between September 1995 and February 1996.
5. BGNV point out that it is ICWA's case in CIV 2666 of 2016 that such a dispute existed and that the dispute was resolved by BGNV, ICWA and the Australian Tax Office by entering into three agreements.[52] This, BGNV says, led to ICWA pleading in its further amended statement of facts, issues and contentions dated 7 September 2018 that:[53]
   1. The WIICA, WIAA and WIIA were drafted, in the period from 25 January 1996 to 2 February 1996, following BGNV, ICWA and ATO reaching agreement in relation to funding on the evening of 25 January 1996.
   2. ICWA executed the WIICA, WIAA and WIIA on 2 February 1996 and delivered them to Blakes on either 2 or 5 February 1996.
   3. The context in which the agreement made on 25 January 1996 was reached and the WIAA, WIICA and WIAA were drafted and executed is as follows.

...

(d) the Liquidator, BGNV, ATO and ICWA identified that actions to set aside transactions of four of the identified companies would benefit ATO financially but not ICWA or LDTC;

(e) a dispute then arose principally between ATO and BGNV (and in particular its funder, Plaza) about who should pay the costs of these companies and whether the amount that ATO might receive as a consequence should be shared as between ICWA/LDTC, ATO and BGNV in accordance with the TBGL Inter-Creditor Agreement;

(f) this dispute first emerged in about May 1995; and

1. The dispute over Western Interstate held up execution of the amendments to the TBGL AFI and BGF AFI, central to the Main Proceeding (those became the First Amending Agreements).
2. The dispute between ATO and BGNV came to a head in about mid December 1995 just before the commencement of the Main Proceeding on 18 December 1995.

...

989. By around 17 December 1995, the dispute between the Indemnifying Creditors had reached a point where BGNV threatened to terminate funding for any of the Bell group companies if Western Interstate joined in the actions with the other Bell group companies without ATO agreeing to share any amounts it received from Bell Bros.

1. The dispute continued until mid-January 1996, during which time BGNV failed to make Advances under the TBGL AFI and BGF AFI and the Liquidators' solicitors threatened to cease work on the Main Proceeding.

1. ICWA agreed with this view but took a neutral position in respect of the dispute. ICWA pointed out to BGNV that ATO's position also meant that BGNV would not be required to pool any dividends it received from the one third left following the anticipated s 564 order.
2. ICWA also pleads in the statement of facts, issues and contentions in CIV 2666 of 2016 that:
   1. On 25 January 1996, ATO gave its first indication that it would enter an agreement that would result in funds that would otherwise come to ATO (via Bell Bros) being shared with BGNV and ICWA. A proposal was made by ATO that, in consideration for providing funding for the additional parties in the Main Proceeding, Bell Bros would transfer a percentage of Western Interstate shares to BGF to be held on trust for ATO, ICWA and BGNV. This was proposed as a solution to ATO's claimed inability to agree to share its receipts (by way of the collection of tax debts) from the Bell Bros liquidation. This proposal was anticipated to result in a benefit to ATO, ICWA and BGNV because in the winding up of BGF, funds would flow to Western Interstate (as a creditor of BGF) and the shareholders of Western Interstate would thereby receive a return of capital.
   2. During the evening of 2 January 1996, ICWA and BGNV each accepted ATO's proposal and reached an agreement as stated in paragraph 979 above, and Blakes was informed of that agreement.
3. The issues and arguments raised by Mr Woodings and ICWA, in relation to BGNV's claims of without prejudice privilege over the Western Interstate documents (listed in sch 1 and sch 2), are as follows:

(a) It is accepted by Mr Woodings that there was a Western Interstate dispute. However, it is said that it was a commercial dispute. Mr Woodings makes a concession that it can be assumed that the documents in question in this category constituted or recorded communications in a genuine attempt to resolve the dispute; but ICWA does not make this concession.

(b) Both Mr Woodings and ICWA argue that without prejudice privilege does not apply to any Western Interstate documents. This argument is made on the basis that there was not at any relevant time any actual litigation on foot about the dispute, nor was litigation reasonably contemplated as a manner of resolving the dispute.

(c) ICWA contends that BGNV is unable to establish that the documents constitute genuine negotiations to settle any dispute.

(d) In the alternative, ICWA argues that even if it can be established that there was a dispute in respect of which litigation was contemplated, and the documents constitute genuine negotiations to settle that dispute, ICWA seeks a range of declarations as to the proper construction of agreements which arose from those negotiations in CIV 2666 of 2016, and the resolution of these claims is relevant to the proceedings in COR 146 of 2014. ICWA claims the use of documents created for the purpose of settlement negotiations to construe agreements arising from these negotiations is one of the exceptions to without prejudice privilege.

(e) ICWA and Mr Woodings also argue that a claim for without prejudice privilege can only be sustained in respect of subsequent proceedings (where the subsequent proceedings do not concern the dispute to which the communication related), if it can be found that the party resisting disclosure would have had a legitimate expectation that the material brought into existence for the purpose of settling an earlier dispute, would not be used against it in the later dispute.[54] ICWA and Mr Woodings point out that BGNV knew that a s 564 application would be made. They contend that communications, such as the documents in this category, would be relevant to the determination of COR 146 of 2014.

1. The documents over which BGNV makes a claim of without prejudice privilege are Western Interstate documents created in a period commencing 15 July 1995 to 16 February 1996. The documents were created prior to BGNV becoming a terminating creditor. Some of these documents were created after BGNV became a party to the Western Interstate Inter-Creditor Agreement (WIICA).[55]
2. The construction of the terms of the WIICA, the Western Interstate Assignment Agreement (WIAA) and of the Western Interstate Indemnity Agreement (WIIA) are pleaded in [1005] [1067], [1076] [1078] and [1114] [1132] of ICWA's further statement of facts, issues and contentions in CIV 2666 of 2016.[56]
3. ICWA points out that the allegations made by it in CIV 2666 of 2016 in respect of this issue are denied or not admitted by BGNV.
4. In Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd, McLure J summarised the relevant principles to establish a claim of without prejudice privilege and some of the exceptions as follows:[57]

Statements made without prejudice in an attempt to settle a dispute or action are privileged. Without prejudice privilege is a joint privilege and thus cannot be waived without the consent of the negotiating parties. The mere fact that a document is or is not marked 'without prejudice' is not decisive. The test is whether the communication was part of a genuine attempt to settle a dispute: Rodgers v Rodgers (1964) 114 CLR 608 at 614. If so, the whole course of the negotiations is privileged: South Shropshire District Council v Amos [1987] 1 All ER 340.

A binding contract brought into existence as a result of without prejudice negotiations is not protected by the privilege. Although the resulting contract is not privileged, the negotiations leading to the agreement remain privileged: Biala Pty Ltd v Mallina Holdings Ltd (1990) WAR 174 at 180; Bentley v Nelson [1963] WAR 89 at 93.

However, without prejudice negotiations leading to an agreement can be considered where there is a dispute as to whether or not an agreement to settle was made: Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378; Unilever Plc v Procter & Gamble Co [1999] EWCA Civ 3027; [2000] 1 WLR 2436 at 2444.

The authorities establish that the without prejudice rule is not absolute and resort may be had to without prejudice material for a variety of reasons when the justice of the case requires it: Rush & Tompkins Ltd v Greater London Council [1988] UKHL 7; [1989] AC 1280 per Lord Griffiths at 1300.

Thus, without prejudice negotiations may be 'pleaded into evidence' in such a way that the privilege is no longer available, by analogy with the rule concerning legal professional privilege: Western Australia v Southern Equities Corp Ltd (in liq) (1996) 142 ALR 597 at 601-602. The principle is not confined to the case where the party seeking to assert privilege raises a positive case: Data Access Corp v Powerflex Services Pty Ltd (1994) AIPC 91-112.

1. In Insurance Commission of Western Australia v Woodings [No 2], Pritchard J applied these principles when considering whether to strike out a number of paragraphs in ICWA's statement of issues, facts and contentions in CIV 2666 of 2016.[58] Her Honour observed that:[59]

The operation of the privilege was also discussed by the Queensland Court of Appeal in Glengallen Investments Pty Ltd v Arthur Andersen. Williams JA, with whom McPherson JA and Ambrose J agreed, noted that the two essential prerequisites for the operation of the rule are:

(1) a genuine attempt to reach a settlement of a dispute the subject of litigation or which will become so if the dispute is not resolved; and

(2) the making of an express or implied admission in so doing. The rule then operates to prevent the use of such admissions in subsequent litigation.

In Pihiga Pty Ltd v Roche, Lander J explained that there are two bases for the rule. The first lies in public policy, in that the existence of the rule encourages parties to engage in full and frank discussions aimed at settling their disputes without recourse to the courts. The second is that the rule is founded on the express or implied agreement of the parties that the communications between them should not be admissible in evidence if those communications do not lead to a settlement. Accordingly, the rule protects admissions in the form of an offer to settle, and communications between parties generally in respect of issues in the dispute including assertions made of the strength and weakness of a party's case or an opponent's case.

1. In support of its argument that the communications and documents in question are communications which form part of, or disclose the contents of, genuine negotiations, counsel for BGNV referred to document 16 in sch 1 (being a facsimile from Mr Griese to the indemnifying creditors, the liquidators and Blake Dawson Waldron seeking instructions). Counsel for BGNV made a submission that the document identifies a cause of action in the Western Interstate dispute. However, as senior counsel for Mr Woodings points out, the author of the document does no more than refer to a cause of action without any analysis or further comment and then goes on to set out three alternatives to resolve the dispute, none of which involved litigation.
2. Having read each of the 15 Western Interstate dispute documents over which BGNV claims without prejudice privilege, I am satisfied that there was a dispute. However, I am not satisfied that BGNV has met the threshold test of showing that there was a dispute that involved, or was likely to involve, legal proceedings. In particular, there is nothing in the documents which indicate that litigation was contemplated at any point in time in respect of a dispute as to how the reinstatement and joinder of Western Interstate should be funded, and how any funds recovered by Western Interstate should be shared.
3. Consequently, I am not satisfied that BGNV has demonstrated that the Western Interstate dispute documents are privileged on grounds of without prejudice privilege. If I am wrong on this point, I make the following findings.
4. The law as a matter of policy excludes from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation, or anticipated litigation. The purpose of this is to enable parties engaged in an attempt to settle litigation to communicate freely with each other and without the prejudice that may be caused to them if the negotiations fail and their communications are later used in evidence against them.
5. Without prejudice privilege, however, conflicts with another matter of public policy. Specifically, the principle that a court should have access to all relevant evidence.
6. In Dowling v Ultraceuticals Pty Ltd, Hammerschlag J observed that without prejudice privilege extends to prevent disclosure to third parties in a subsequent dispute, provided there is sufficient connection between the subject matter of the original dispute and the later dispute.[60] In this context, his Honour went on to observe:[61]

That policy, as the High Court said in Field, is to enable free communication without the embarrassment which the liability of a communication being put in evidence subsequently might impose on a party, or as Lord Griffiths articulated it in Rush & Tompkins, it would discourage settlement if a party believed that admissions might be held against it.

Accordingly, the Court must assess whether the party resisting disclosure would have had a legitimate expectation that the material brought into existence for the purposes of settling the earlier dispute would not be used against it in the later dispute.

Put another way, protection is given to induce lack of inhibition in making potentially damaging statements to facilitate dispute resolution. The policy protects those statements from disclosure in a later dispute if, fairly viewed, having regard to the subject matter of the later dispute, the party making them would be expected legitimately to have had the same inhibition.

1. The claim of without prejudice privilege over these documents raises the points considered by Hammerschlag J in Dowling, namely whether there can be found to be a sufficient connection between the subject matter in dispute in the Western Interstate dispute, and the s 564 application in COR 146 of 2014 to justify, in line with the policy underlying the privilege, an extension of without prejudice privilege to the s 564 proceedings, and whether this point has any application in this matter.
2. In Dowling, after considering the policy underlying the purpose of without prejudice privilege, and the authorities that establish the ambit of the extension of that privilege to third parties in a subsequent dispute, Hammerschlag J said the following:[62]

[A]s can be seen from these dicta, the required connection has been articulated in different and not necessarily consistent ways. The formulations have included cases where the litigation has a connection, or a direct connection, with the same subject matter as the negotiations, cases where the negotiations and the litigation arise out of the same subject matter and the negotiations and settlement are of potential relevance to subsequent litigation, cases where the subject matter of the settlement discussions is substantially the same as the subject matter of the legal proceedings, and cases where the subject matter of the negotiation does not differ from that of the proceedings.

1. Having regard to the subject matter of the Western Interstate dispute and the matters pleaded in COR 146 of 2014, I am satisfied that there is a connection between the subject matter of each dispute.
2. However, I am not satisfied that there is a sufficient connection between the two disputes as there is no material before the court upon which it could be found that BGNV had a legitimate expectation that the material brought into existence for the purpose of settling the Western Interstate dispute, would not be used against it in the s 564 proceedings in COR 146 of 2014.
3. As ICWA points out, it has not been demonstrated that BGNV would not have expected that communications made in the course of negotiations to settle the dispute would not be available to be put into evidence in the s 564 proceedings.
4. If, however, I am wrong on this point, I am of the view that without prejudice privilege does not apply.
5. The operation of this class of privilege is not absolute. In Old Papa's, McLure J observed that resort may be had to without prejudice material for a variety of reasons and when the justice of the case requires it and thus may be pleaded into evidence in such a way that the privilege is no longer available.[63]
6. The documents can be properly found to be the subject of an exception to this claim privilege, which enables a court to examine such communications as evidence of background facts relevant to the construction of a concluded compromise agreement.[64] Whether the documents in question are admissible, and should be admitted into evidence, is not a matter that is open to be considered in this application.
7. However, it is open to the trial judge to examine these communications during the course of hearing the substantive matter in CIV 2666 of 2016 or in COR 146 of 2014 as these documents may be relevant in the determination of the substantive matters to construe the terms of the WIICA, WIAA and the WIIA.
8. Whether such material should be admitted is a matter for the trial judge. Evidence of precontractual negotiations is not generally admissible to interpret a concluded written agreement. But evidence of precontractual negotiations may be admissible to establish objective background facts known to both parties. Evidence of precontractual negotiations may also be admissible to establish that the parties were united in rejecting a possible construction.[65] Precontractual negotiations may also be admissible where the parties have agreed the meaning of the word or phrase in negotiation of an agreement.[66]
9. For these reasons these claims of privilege are not made out.

E. BGNV's without prejudice privilege claim over the Woodings' mediation documents (sch 2)

1. The documents that are the subject of this claim comprise a confidential discussion paper and attachments prepared by Mr Woodings for the plaintiffs in the Main Proceedings. These documents were prepared on 13 July 2005 and addressed settlement ranges for the purpose of a mediation and settlement negotiations with the banks (items 101 122 sch 2). The documents contain no legal advice.
2. The issues raised in respect of BGNV's claims of without prejudice privilege over the discussion paper and its attachments (listed in sch 2, items 101 122) are:

(a) In light of the fact that the documents in question are internal documents of Mr Woodings, who does not assert any continuing privilege over those documents (listed in sch 2), ICWA claims it is not open to BGNV to claim without prejudice privilege over these documents.

(b) ICWA also makes the same point that arises in Dowling in respect of this category of privilege that it raises in respect of the without prejudice privilege claim made by BGNV in respect of the Western Interstate documents. That is, in assessing whether there is a sufficient connection between the two disputes to extend without prejudice privilege over these documents in the s 564 proceedings, the court must assess whether BGNV had a legitimate expectation that the documents brought into existence for the purposes of the mediation of the Main Proceedings would not be used against it in a later dispute.[67]

1. BGNV claims that as one of the plaintiffs in the Main Proceedings it is the holder of joint privilege in these documents. BGNV says it is immaterial that Mr Woodings has waived privilege in the documents on grounds that joint privilege cannot be waived by one of the parties who share the privilege. I agree.
2. As to the second point, ICWA claims that the internal documents prepared by Mr Woodings on behalf of the plaintiffs in the Main Proceedings for a mediation with the banks, in respect over which Mr Woodings makes no claim of continuing privilege, are plainly necessary to assessing risk for the purposes of the s 564 application. BGNV claims, however, that ICWA puts no material before the court to support this assertion. However, it is for BGNV, not ICWA to make out this claim for privilege.
3. Whether the Dowling principle applies in circumstances where the parties to a subsequent dispute were all plaintiffs in the previous dispute (and thus not opposed to each other) was not addressed in Dowling. However, assuming this principle applies, I make the following findings.
4. Applying Dowling, the question is whether the policy that protects without prejudice privilege will be served by protecting disclosure of items 101 to 122 of sch 2.
5. The application by Mr Woodings in COR 146 of 2014 is for orders to be made as to how and to whom the proceeds recovered in the Main Proceedings are to be made in preference to the indemnifying creditors. An inspection of the documents reveals that the documents contain, among other calculations, calculations by Mr Woodings of a number of scenarios going to returns to the banks on Western Interstate loans.
6. As the subject matter of the dispute in the Main Proceedings and the s 564 proceedings in COR 146 of 2014 is not exactly the same, it is necessary to assess whether there is a sufficient connection between the two disputes to justify an extension of the privilege to the later dispute.
7. Plainly there is a connection between the two disputes.
8. Items 101 to 122 of sch 2 were created on 13 July 2005. By that time BGNV ceased to be an indemnifying creditor and became a terminating creditor. The issue is whether the connection is sufficient. The subject matter of the two disputes is not the same. However, the subject matter of s 564 proceedings may arguably raise matters relevant to the risk assumed in the Main Proceedings by the indemnifying creditors, one of which is ICWA. Whether that is so and whether items 101 to 122 of sch 2 should be admitted into evidence in COR 146 of 2014 as objective facts of matters stated in the mediation negotiations is a matter for the trial judge.
9. Having examined the documents, it is difficult to see how an argument could be raised that the documents are adverse to the interests of BGNV so as to raise a legitimate expectation of protection from disclosure in COR 146 of 2014.
10. In these circumstances, I am not satisfied that there is a sufficient connection to extend without prejudice privilege in these documents to the proceedings in COR 146 of 2014.
11. For these reasons, this claim of privilege is not made out.

F. BGNV's claims of common interest privilege (sch1 and sch 2)

1. BGNV's claims of privilege over documents on grounds of common interest privilege are raised in respect of five documents listed in sch 1.
2. In respect of two documents in sch 1 (items 2 and 18) Mr Woodings argues that the documents record no legal advice. Alternatively, in respect of these items and the other items in sch 1 over which this claim is made (items 3, 16 and 46), Mr Woodings argues that privilege over these documents has been impliedly waived.
3. The issues raised in BGNV's claims over documents listed in sch 2 on grounds of common interest privilege are:

(a) whether it is open to BGNV to claim common interest privilege over documents it received as an indemnifying creditor; and

(b) whether a claim of common interest privilege can be made out in circumstances where the original privilege holder (Mr Woodings) does not seek to maintain privilege over the documents in question.

1. BGNV does not claim to be the original privilege holder over any of the documents the subject of this claim in sch 1 and sch 2. However, BGNV says that because it received the documents as a funding creditor prior to it becoming a terminating creditor on 31 March 1999 on a common interest basis, it is entitled to resist disclosure of this category of documents.
2. Both Mr Woodings and ICWA argue that no common interest privilege arises over the documents the subject of this claim of privilege by disclosure to BGNV as an indemnifying creditor.
3. As senior counsel for Mr Woodings points out, common interest privilege is not a separate privilege but stands as an exception to the general rule that legal professional privilege does not attach to communications with, in the presence of, or later shared with, third parties. Communications must therefore be intrinsically privileged to deserve protection under a claim of common interest privilege.
4. As the learned author, J D Heydon in Cross on Evidence states, common interest privilege in the hands of someone other than the original privilege holder must presuppose the third party has a relationship with the original privilege holder and transaction in question to bring that third party within the ambit of confidence.[68] Whether common interest privilege can be maintained is to be determined by asking the essential question, whether the nature of their mutual interest in the context of their relationship is such that the party to whom the documents are passed receives them subject to a duty of confidence which the law will protect in the interests of justice.[69]
5. In Marshall v Prescott, Barrett JA outlined the steps to be taken by the court when determining this question. His Honour stated as follows:[70]

A succinct description of the necessary process of analysis appears in the judgment of McKechnie J in the Irish case of Hansfield Developments v Irish Asphalt Ltd [2009] IEHC 420 at [53]. The first step, it was said, is to determine by normal standards whether the document would be privileged in the hands of the party communicating the information, assuming that no disclosure had in fact been made. If it is found that the documents would be so privileged, the court must proceed to the second step which is to ask whether the relationship between the parties was sufficiently close that the transmission of documents should not be held to amount to an implied waiver of the privilege. The nature of that assessment was described in this way (also at [53]):

'In considering this the Court should take into account the relationship between the parties, as well as the nature and purpose of the disclosure and whether there could be held to be an objective intention to waive privilege on the part of the holder.'

'Privilege should not be overborne lightly, and therefore the ultimate question must be whether it is reasonable in the circumstances to conclude that there was an implied waiver of the privilege. If such an implied waiver cannot be found, the Court should not otherwise interfere.'

1. Thus, where common interest privilege is applicable, it only prevents privilege being lost by a particular disclosure.
2. In this matter, if common interest privilege applies to any or all of the documents that are the subject of this category of documents, BGNV will be allowed to resist disclosure of the document or documents.
3. For this ground of privilege to be made out, firstly, the court must be satisfied that the communications in question are privileged communications. Secondly, the court must be satisfied that BGNV, in receiving the documents as an indemnifying creditor, did so on the basis that it shared a common interest with the liquidators and the other indemnifying creditors.
4. Mr Woodings claims that the two documents in sch 1, namely item 2 and item 18 (the documents over which this claim is made) are documents that simply state the Commonwealth's view or position on certain legal matters arising in the course of negotiations in respect of the Western Interstate dispute. Mr Woodings claims that when properly understood, these documents do not purport to be a record of legal advice rendered by the Australian Government Solicitor or counsel to the Commonwealth.
5. In respect of item 18, in sch 1, BGNV claims this document discloses instructions from the Australian Taxation Office. Having inspected item 18, I agree that a mere reference to the topic on which the Australian Government Solicitor intended to seek advice from counsel discloses no privilege matter. Consequently, in respect of item 18 of sch 1, I am not satisfied that a claim of privilege can be made out.
6. Mr Woodings also claims item 2, in sch 1, does not record any legal advice given by the Australian Government Solicitor. Having inspected this document, I agree. In these circumstances, I am not satisfied that legal professional privilege can be claimed in respect of matters stated in this document going to advice given by the Australian Government Solicitor.
7. Despite my findings in respect of the without prejudice privilege claim in respect of the Western Interstate dispute for the purposes of determining this category of claim only, I have assumed that the other three documents over which BGNV claims common interest privilege in sch 1 (being items 3, (in respect of the part of item 3 that is not conceded) 16, and 46) contain privileged communications.
8. As to the sch 2 documents, for the purposes of determining this claim of privilege ICWA does not dispute that the documents in this category could be said to be privileged communications. However, ICWA says the holder of the privilege is Mr Woodings, who does not seek to maintain privilege over those documents.
9. It appears to be accepted by BGNV, in respect of the documents listed in sch 2 (over which this claim of privilege is made), that Mr Woodings is the primary privilege holder who in turn seeks to waive privilege in these documents.
10. Thus, the question is whether, in respect of this class of documents the dissemination of the privileged matter caused privilege to be lost when the documents were provided to the indemnifying creditors.
11. As BGNV point out, it is well settled that:

(a) it is not necessary that parties have a common solicitor before a common interest will arise;[71]

(b) it is not a bar to common interest privilege that the parties' relationship is not in all respects harmonious or that they disagree about some matters. The existence of a common interest will not be destroyed by the circumstance that there is a potential for future divergence of interests;[72] and

(c) persons will not have a common interest if their individual interests in question are selfish or potentially adverse to each other. In such a case there is not the necessary identity of interest.[73]

1. Pursuant to the terms of the indemnifying agreements, the indemnifying creditors not only agreed to fund Proceedings, but the liquidators were obliged to give due regard to the unanimous resolutions of the indemnifying creditors in and about the conduct of the Main Proceedings. The indemnifying creditors also had the power to require the liquidators to discontinue the Main Proceedings and to provide reports to the indemnifying creditors about the progress of the Main Proceedings. The liquidators were also obliged to make available to the indemnifying creditors, books and records so as to enable the indemnifying creditors to assess the conduct and outcome of the Main Proceedings. Consequently, it was contemplated by the terms of the indemnifying agreements that the relationship between the liquidators and the indemnifying creditors would be collaborative and require the ongoing assessment of the conduct of the Main Proceedings by both the liquidators and the indemnifying creditors.
2. Sufficient common interest has been held to exist in respect of confidential communications between a party and its financier.
3. In Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd, Bergin J found that since a litigation funder had an interest in the most advantageous conduct of proceedings by the plaintiff, and that the interest was identical with that of the plaintiff, the funder had a common interest in relation to the proceedings.[74]
4. In Rickard Constructions, the plaintiff was placed into voluntary administration and subsequently entered into a deed of company arrangement. Pursuant to the terms of the deed, one of the plaintiffs' directors and another agreed to provide funding (up to a particular limit) for the purpose of funding the proceedings in the matter before the court. Justice Bergin held that confidential communications made to the funder were protected by privilege because they were made for the dominant purpose of the plaintiff being provided with professional legal services in the context of the litigation. Her Honour said:[75]

In this case it is the confidential communications rather than the funding agreement that are under consideration. They are not anterior to the dominant purpose, they are inextricably linked to the nature of the professional legal services being provided to the client. Their dominant purpose was to ensure the overall capacity of the plaintiff to have funding and to ensure that such funding would be forthcoming for the continued funding of the litigation. That seems to me to fall within the description of a dominant purpose of the client 'being provided' with professional legal services. This description is to be contrasted with the expression 'providing professional legal services'. The concept of the client 'being provided with' something is of broader import and seems to me to encompass the purpose under consideration here. I am satisfied that the documents are also privileged pursuant to s 119 of the Act.

1. It is immaterial that the case before Bergin J in Rickard Constructions concerned a claim made pursuant to the provisions of the Evidence Act 1995 (NSW). In Marshall v Prestcott, Barrett JA found that Bergin J's statement that a funding agreement may satisfy the requirements of the claim of common interest privilege under provisions of the Evidence Act (NSW), was equally relevant to a case where common law legal professional privilege is in issue.[76]
2. It is my opinion that the circumstance considered by Bergin J in Rickard Constructions arises in this matter. The indemnifying creditors (including BGNV) were provided with the communications for the purpose of making decisions pursuant to their rights and obligations to do so according to the terms of the indemnifying agreements in the prosecution of the Main Proceedings.
3. In these circumstances, I am satisfied that it could be said that BGNV had a common interest in the communications. As an indemnifying creditor, BGNV received these communications in the common interest of all the indemnifying creditors and the liquidators.
4. The question then becomes whether, having regard to all of the relevant circumstances (of the dissemination of the contents of the confidential documents to all the indemnifying creditors), the common interest privilege in these communications could be said to have been lost by an implied waiver.
5. In Farrow Mortgage Services v Webb, the following observations were relevantly made by Sheller JA that can be applied in determining the answer to this question in this matter:[77]

In the case of common interest privilege, as distinct from joint privilege, I do not think it will always be necessary that all interested parties concur for the privilege to be waived. If in principle legal professional privilege vested in a party is not lost by dissemination of the contents of confidential documents to others with a common interest, I think that fairness, in many cases, will require that the privilege not be lost because one of those parties, be it the provider or the recipient, is minded to waive it. Once parties with a common interest have exchanged or provided one to another the contents of communications with legal advisers about the subject of their common interest, the question of whether the privilege is lost with its waiver by one must be determined by asking whether the waiver has made it unfair for the other parties with a common interest to maintain the privilege: Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 488. This requires account to be taken of such matters as the circumstances in which the privileged communication took place and came to be exchanged and provided to others.

1. It was also argued in Farrow Mortgage Services that the respondent's privilege had been waived by the terms of their defence to the appellant's allegation. However, the case was not determined on that basis because the case as put in the argument had not been pleaded in the defence.[78]
2. Farrow Mortgages was determined prior to the High Court decision in Mann v Carnell where the majority of the High Court held:[79]

Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is 'imputed by operation of law'. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. ... What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

1. However, Farrow Mortgages did not apply a test of fairness at large. As Sheller JA said in Farrow Mortgages, the question of whether the privilege is lost by waiver by one of the parties who share a common interest is to be determined by asking whether the waiver has made it unfair for the other parties with a common interest to maintain the privilege. That assessment is to be undertaken by having regard to the circumstances in which the privileged communication took place, came to be exchanged and provided to others.
2. The test in Farrow Mortgages was formulated by regard to the reasoning of Giles CJ in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd.[80] In Ampolex, Giles CJ applied the reasoning of French J in Newcrest Mining (WA) Ltd v Commonwealth.[81]
3. In Ampolex, before applying the reasoning of French J in Newcrest Mining, Giles CJ had regard to the facts in Newcrest as follows:[82]

Newcrest brought proceedings on behalf of itself and two joint venturers, Plutonic and Norgold. An estoppel was pleaded founded on representations made to Newcrest and to BHP Minerals, its predecessor in title to the mining leases the subject of the joint venture. Having disclosed elements of advice relevant to the estoppel, BHP Minerals waived privilege in relation to the balance, and the waiver seems to have been treated as a waiver by Newcrest. Plutonic and Norgold claimed privilege in relation to legal advice concerning the mining leases. French J said (at 509510):

'The question which arises here is whether there is to be attributed to Plutonic and Norgold an implied waiver of the privilege by virtue of the disclosures already made by their co-joint venturer and manager in proceedings brought for their benefit. The documents in question, it should be noted, span dates from 1984 through to 1989. They include some documents already disclosed by Newcrest and BHP Minerals including an important letter of advice from Ward Keller dated 14 June 1984.

The threshold question is whether the principle of implied waiver can extend to materials associated with those disclosed by one party, but in respect of which the privilege vests in another who had a common interest in proceedings brought by the disclosing party. Given that the underlying rationale of implied waiver is one of fairness which can overcome the established rationale of legal professional privilege, I think the answer to that threshold question is yes in principle. The extension of the principle is one, however, to be sparingly applied.

In my opinion the present case is one in which fairness mandates that extension. There are two reasons for that. The first is that the action is brought for the benefit of the joint venture as a whole and although there is no direct evidence on the point, it is difficult to imagine that it would have been brought against the wishes of Plutonic and Norgold or indeed without their consent. The second is that the decision-making process relied upon to support the estoppel appears to involve those parties. In these circumstances they cannot, in my opinion, withhold from scrutiny material which may have operated upon that process when partial disclosure has already been made in these proceedings. The claim for privilege cannot be sustained so far as it relates to legal advice in relation to the leases up to and including 1987. It is not clear to me however, that any later material falls within that category and I shall hear from counsel on that question.'

The reasoning was not that waiver by one holder of a common interest privilege automatically brings waiver by the other holders of that privilege. It was that there may be such an effect if the underlying rationale of fairness so requires, and that fairness required the consequential waiver where Plutonic and Norgold were beneficiaries of the proceedings and the decision-making process required to support the estoppel involved them. I respectfully agree that as a matter of principle there can be a consequential waiver: that follows from the nature of the common interest privilege, with the identity of interest meaning that each holder of the privilege is exposed to the consequences of the acts of the other. If, in prosecuting the interest for the benefit of both, one holder waives legal professional privilege, fairness may well require that the act impact upon the other. In my opinion that would be so in the present case if, contrary to what I have held, there was a common interest privilege between County NatWest and GPG Nominees and Allied. County NatWest shared with GPG Nominees and Allied the obtaining of advice and will share with GPG Nominees and Allied a commercial benefit or detriment according to the outcome of these proceedings; its fortunes are relevantly linked with those of GPG Nominees and Allied, and it could not preclude inspection of documents in the hands of GPG Nominees and Allied when those parties brought proceedings in the result of which County NatWest would share.

1. It is clear from the reasoning of French J in Newcrest Mining and Giles CJ in Ampolex that an assessment must be made of the interests of all of the parties who have a common interest in the privileged material. Further, if one holder of the privilege seeks to waive legal professional privilege there must be an assessment of whether fairness requires that the act of seeking to waive privilege has an impact upon the others who also hold a common interest in the documents, so as to determine whether there has been an implied waiver of the privilege.
2. In Patrick v Capital Finance Corporation (Australasia) Pty Ltd, Tamberlin J applied the reasoning of Giles CJ in Ampolex.[83] His Honour observed that the approach of Ampolex and Farrow Mortgages was applied in Australian Competition and Consumer Commission v Australian Safeways Stores Pty Ltd[84] and in Gray v Associated Book Publishers.[85]
3. The Australian authorities can be compared with the approach in the United Kingdom. The approach of Sheller JA in Farrow Mortgage Services was recently disapproved of by Sir Andrew Smith in Accident Exchange Ltd v McLean.[86] Accident Exchange Ltd (Accident Exchange) was a company that provided replacement motor vehicles to clients whose vehicles had been damaged in an accident. Under the terms of the hire arrangement, Accident Exchange was given the right to pursue claims against the other driver in the name of the client. Accident Exchange commenced actions in the name of the client against various defendants and the question was whether Accident Exchange and the clients had a common interest privilege in particular documents, and if so, whether Accident Exchange alone could waive it. Sir Andrew Smith found that the rule that if legal professional privilege is held jointly it cannot be waived by one person alone could also be applied to a claim to privilege on grounds of common interest. His Honour, however, did acknowledge that in some cases of common interest privilege a proper inference might be drawn that the parties' arrangements were such that one privilege holder might waive the protection.[87]
4. However, the facts of this matter are not similar to the facts of Accident Exchange. Accident Exchange was an insurer who was entitled to act on behalf of its clients in connection with proceedings in the names of the clients, who objected to the discovery of the documents in question.
5. The learned author of Cross on Evidence, J D Heydon, puts the test to be applied this way:[88]

Where 'common interest privilege' exists, normally all persons sharing the common interest must join in the waiver, so that while waiver by one does not automatically bring waiver by others, fairness may require this result in particular circumstances. It has been said that this 'follows from the nature of the common interest privilege, with the identity of interest meaning that each holder of the privilege is exposed to the consequences of the acts of the other. If, in prosecuting the interest for the benefit of both, one holder waives legal professional privilege, fairness may well require that the act impact upon the other'.

1. The question BGNV puts is, why would it be unfair for it to maintain the privilege?
2. Importantly, the position of BGNV in respect of its common interest in the sch 2 documents (and the sch 1 documents) is indistinguishable from the position of ICWA. Both ICWA and BGNV received the documents in question as indemnifying creditors.
3. BGNV were plaintiffs in the Main Proceedings and were jointly represented by Blake Dawson Waldron together with all the other plaintiffs against the banks. The liquidators were also plaintiffs in the Main Proceedings. The liquidators did not represent BGNV, their relationship was governed by the terms of the indemnifying agreements.
4. Importantly, whilst BGNV is a defendant in COR 146 of 2014 (and whilst there is a dispute about the ratio of payments to indemnifying creditors) the application is in one sense of benefit to BGNV and the other indemnifying creditors. The application seeks orders pursuant to s 564 of the Corporations Law to repay the indemnifying creditors amounts for advances made pursuant to the indemnifying agreements and other amounts from the balance of the proceeds from the Main Proceedings. When regard is had to these circumstances, where the primary privilege holder is content to waive privilege in these documents, I am of the view that it would be unfair to ICWA to require the consent of BGNV to give an effective waiver of the sch 2 documents.
5. In particular, it would be unfair to ICWA (who also holds a common interest in the receipt of these documents as an indemnifying creditor) to subrogate its wishes to the wishes of BGNV, as BGNV has no superior right to make any claim of privilege in respect of these communications than ICWA.
6. The same point applies to the sch 1 documents. BGNV has no superior right to claim privilege over these documents than Mr Woodings.
7. Irrespective of the issues in dispute in COR 146 of 2014, the proceedings brought by Mr Woodings in COR 146 of 2014 are proceedings brought by Mr Woodings (in the proper execution of his duty as liquidator) and are for the benefit of BGNV and the other indemnifying creditors for orders for the distribution of proceeds from the Main Proceedings.
8. In these circumstances, fairness mandates that common interest privilege in the sch 1 and sch 2 documents in these categories are to be regarded as impliedly waived.
9. For these reason, these claims of privilege are not made out.

Items in Dispute (excluding duplicates) by reference to category of privilege claim

Legal professional privilege - Blake Dawson Waldron*

1, 2, 2425, 2830, 3233, 35, 3845, 4951, 5861, 6566, 87 and 89

1, 2, 5, 1112, 1526, 2833, 35, 37, 4042, 4951, 5761, 65, 66, 95, 99, 123, 127, 129130, 132133

Without prejudice privilege - Post Termination Intercreditor Agreement* (PTICA)

69, 3839, 4347, 5456, 6263, 6770, 7778, 83, 90 and 136

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

Research Associate/Orderly to the Honourable Justice Smith

[1] Plaintiff's reamended statement of facts, issues and contentions dated 29 March 2018.

[2] Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 18 WAR 21, 24 (Templeman J).

[3] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1.

[4] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1.

[5] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1.

[6] Bell Group Ltd (in liq) v Westpac Banking Corporation [No 10] [2009] WASC 107; (2009) 39 WAR 930 [3].

[7] Affidavit of Antony Leslie John Woodings sworn 4 August 2014 [27]; see also ts 20 November 2018, page 996.

[8] Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 18 WAR 21, 25 (Templeman J).

[9] As that term is defined in the indemnifying agreements.

[10] Section 564 of the Corporations Act 2001 (Cth) is in identical terms.

[11] Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 18 WAR 21.

[12] Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 18 WAR 21, 33, 35 (Templeman J).

[13] Australian Securities and Investments Commission (ASIC) v Rich [2004] NSWSC 1089 [2] (Austin J); Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 [11] (Batt JA).

[14] CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48 [33] [34] (Owen & Steytler JJ); applied in Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 2] [2010] WASC 217 [32] (Murphy JA).

[15] CMA Assets Pty Ltd v John Holland Pty Ltd [No 2] [2012] WASC 126 [23] [24].

[16] Affidavit of Kenneth Paul Hickman sworn on 12 November 2018, attachment KPH1, pages 23, 36.

[17] ICWA's submissions dated 16 November 2018 [67].

[19] Affidavit of Kenneth Paul Hickman sworn on 12 November 2018, attachment KPH1, pages 22, 35.

[20] Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915 [63].

[21] Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915 [63] - [64].

[22] Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915 [63].

[23] Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915 [63] - [64].

[24] Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281.

[25] Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281 [37] [38] (Finn, Sundberg & Jacobson JJ); see also Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319 [120] (Kenny J).

[26] Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326.

[27] Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326 [118] (Campbell JA) in reliance upon Cole v AN Clark (Engineers) Ltd (1968) 1A IPR 587, 590 (Megarry J).

[28] Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281 [34] (Finn, Sundberg & Jacobson JJ).

[29] Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281 [38] (Finn, Sundberg & Jacobson JJ) citing (amongst others) Mense v Milenkovic [1973] VicRp 78; [1973] VR 784; Australian MedicCare Co Ltd v Hamilton Pharmaceutical Pty Ltd [2009] FCA 1220; (2009) 261 ALR 501 [628] [629].

[30] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272.

[31] Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281 [37].

[32] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272 [13] (French CJ, Gummow, Heydon, Crennan & Kiefel JJ).

[33] Streetscape Projects (Aust) Pty Ltd v City of Sydney [2013] NSWCA 2; (2013) 85 NSWLR 196; (2013) 295 ALR 760 [150] (Meagher JA & Ward JA agreeing).

[34] Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281.

[35] Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 [90] [91] (Stevenson J).

[36] Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 [94] [95] (Stevenson J).

[37] Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 [97] (Stevenson J).

[38] Streetscape Projects (Aust) Pty Ltd v City of Sydney [2013] NSWCA 2; (2013) 85 NSWLR 196; (2013) 295 ALR 760 [150] (Bennett JA).

[39] Hart v MacDonald [1910] HCA 13; (1910) 10 CLR 417, 430 (Isaacs J).

[40] Seager v Copydex Ltd [1967] 1 WLR 923, 931 (Lord Denning MR).

[41] NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151.

[42] NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151 [17] citing Seager v Copydex Ltd [1967] 1 WLR 923, 931.

[43] NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151 [17] [18] (Williams & Wicks JJ agreeing); applied in Consolidated Paper Industries Pty Ltd v Matthews [2004] WASC 161 [76] (M Newnes); see also observations made by Barrett JA in Streetscape Projects (Aust) Pty Ltd v City of Sydney [2013] NSWCA 2; (2013) 85 NSWLR 196; (2013) 295 ALR 760 [153] [156].

[44] Clause 1.1 of the indemnifying agreements.

[45] Duncombe v Parker [1953] HCA 78; (1953) 90 CLR 295, 311 (Fullagar J) applied in Castlemaine Tooheys Ltd v Carlton & United Breweries (1987) 10 NSWLR 468, 490 (Hope JA, Samuels JA & Priestley JA agreeing).

[47] See table in Annexure A which lists items in dispute (excluding duplicates) by reference to category of privilege claim.

[48] See table in Annexure A which lists items in dispute (excluding duplicates) by reference to category of privilege claim.

[49]Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1, [2097], [2100] [2102], [2105].

[50] Insurance Commission of Western Australia v Antony Leslie John Woodings (in liq) [No 2] [2017] WASC 372; (2017) 124 ACSR 45.

[51] Insurance Commission of Western Australia v Antony Leslie John Woodings (in liq) [No 2] [2017] WASC 372; (2017) 124 ACSR 45 [11], [12].

[52] The agreements were the Western Interstate InterCreditor Agreement (WIICA), the Western Interstate Assignment Agreement (WIAA) and the Western Interstate Indemnity Agreement (WIIA).

[53] Further amended statement of issues facts and contentions, filed on 26 October 2018.

[54] Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 [37] (Hammerschlag J).

[55] BGNV became a party to WIICA on 6 February 1996; ICWA's further amended statement of facts, issues and contentions dated 7 September 2018 [1001].

[56] Prayers for relief 23 to 26 of the writ in CIV 2666 of 2016; see also Woodings' re-amended statement of facts, issues and contentions filed on 29 March 2018 [219] (6) (7) and (11).

[57] Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [91] [95] (Murray & Parker JJ agreeing).

[58] Insurance Commission of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [No 2] [2017] WASC 372.

[59] Insurance Commission of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [No 2] [2017] WASC 372 [52] [53].

[60] Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 [28].

[61] Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 [36] [38].

[62] Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 [34].

[63] Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [44].

[64] Insurance Commission of Western Australia v Woodings (in liq) [No 2] [2017] WASC 372; (2017) 124 ACSR 45 [54] (Pritchard J) (in respect of the rectification exception) in reliance upon Oceanbulk Shipping and Trading SA v TMT Asia Ltd [2010] UKSC 44; [2010] 4 All ER 1011 [33] (Lord Clarke); see also Admiral Management Services Ltd v ParaProtect Europe Ltd [2002] EWHC 233; [2003] 2 All ER 1017.

[65] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352 353 (Mason J).

[66] Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290, 309 (Santow J); B & B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227, 236 (Kirby P).

[67] Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 [36] [39] Hammerschlag J).

[68] Cross on Evidence (11th ed, 2017) Butterworths [25265].

[69] Cross on Evidence (11th ed, 2017) Butterworths [25265]; see also Inlon Pty Ltd v Celli SpA [2017] NSWSC 569 [103] (Parker J).

[70] Marshall v Prescott [2013] NSWCA 152 [63] [64] (McColl JA & Ward JA agreeing).

[71] Marshall v Prescott [2013] NSWCA 152 [60(1)] (Barrett JA, McColl JA & Ward JA agreeing); Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 [51] (Bergin J).

[72] Marshall v Prescott [2013] NSWCA 152 [62] (Barrett JA, McColl JA & Ward JA agreeing).

[73] Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405, 410 (Giles CJ).

[74] Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234.

[75] Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 [59].

[76] Marshall v Prescott [2013] NSWCA 152 [78].

[77] Farrow Mortgage Services Pty Ltd (in liq) v Webb [1996] NSWSC 259; (1996) 39 NSWLR 601, 619 620 (Waddell AJA agreeing).

[78] Farrow Mortgage Services Pty Ltd (in liq) v Webb [1996] NSWSC 259; (1996) 39 NSWLR 601, 620.

[79] Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 [29] (Gleeson CJ, Gaudron, Gummow & Callinan JJ).

[80] Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405.

[81] Newcrest Mining (WA) Ltd v Commonwealth (1993) 40 FCR 507.

[82] Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405, 412 413.

[83] Patrick v Capital Finance Corporation (Australasia) Pty Ltd [2004] FCA 1249; (2004) 211 ALR 272 [22] [23].

[84] Australian Competition and Consumer Commission v Australian Safeways Stores Pty Ltd (1998) 81 FCR 526, 564 (Goldberg J).

[85] Gray v Associated Book Publishers (Aus) Pty Ltd [2002] FCA 1045 [31] (Branson J).

[86] Accident Exchange Ltd v McLean [2018] EWHC 23 (Comm).

[87] Accident Exchange Ltd v McLean [2018] EWHC 23 (Comm) [94].

[88] Heydon J D, Cross on Evidence (11th ed) [25015].