Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited

Date of hearing: 17 April 2014

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 96

Counsel for the Applicants: Dr S B McNicol QC with Mr R D Williams

Solicitor for the Applicants: Corrs Chambers Westgarth

Counsel for the 1st to 13th and 17th to 18th Respondents: Mr M Borsky with Ms C Van Proctor

Solicitor for the 1st, 3rd, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th 13th and 17th Respondents: Arnold Bloch Leibler

Solicitor for the 2nd, 4th and 18th Respondents: Allens

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 87 of 2013

BETWEEN: ASAHI HOLDINGS (AUSTRALIA) PTY LTD (ACN 135 315 767) AND ANOTHER (NAMED IN THE ATTACHED SCHEDULE)

AND: PACIFIC EQUITY PARTNERS PTY LIMITED (ACN 082 283 949) AND OTHERS ACCORDING TO THE ATTACHED SCHEDULE

JUDGE: BROMBERG J DATE OF ORDER: 13 May 2014 WHERE MADE: MELBOURNE

1. On or before 12.00 pm on 14 May 2014, the applicants produce to each of the First to Thirteenth and Seventeenth and Eighteenth respondents an unredacted copy of the "EBITDA Adjustment Reports" referred to as having been provided to the insurers on 1 March 2013 at paragraph [23] of the affidavit of Daniel Marquet of 15 April 2014. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 87 of 2013

BETWEEN: ASAHI HOLDINGS (AUSTRALIA) PTY LTD (ACN 135 315 767) AND ANOTHER (NAMED IN THE ATTACHED SCHEDULE)

AND: PACIFIC EQUITY PARTNERS PTY LIMITED (ACN 082 283 949) AND OTHERS (NAMED IN THE ATTACHED SCHEDULE)

JUDGE: BROMBERG J DATE: 13 May 2014 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicants' claims in the substantive proceeding include claims that the respondents engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) or s 1041H of the Corporations Act 2001 (Cth) and breached certain warranties, by making representations about the financial position of a business operated by Flavoured Beverages Group Holdings Limited (FBGHL). By a transaction completed on 30 September 2011, the shares of FBGHL were purchased by the second applicant (ILNZ) as the nominated purchaser of the first applicant (Asahi), pursuant to a Share Sale Agreement (SSA) made between Asahi and the third to ninth respondents (Sellers). Other respondents include directors or employees of the Sellers. Since I reserved my judgment on this application, other parties (whom I later collectively define as the "Insurer") have been joined as respondents. It is not necessary that I take that fact into account. For ease of reference I will refer to the Sellers and those of their directors or employees who are also parties as the respondents. 2 Of particular relevance to the legal professional privilege claim which is the subject of these reasons for judgment, is the applicants' claim that the Sellers misrepresented FBGHL's 'rolling last 12 months normalised earnings before interest, taxes, depreciation and amortisation' to various dates in 2011 (FBGHL's EBITDA). The applicants claim that FBGHL's EBITDA was variously inflated or overstated due to the wrongful inclusion of certain income and the wrongful exclusion of certain expenditure. 3 A report (EA Report) was prepared by the applicants' current solicitors Corrs Chambers Westgarth (Corrs). The EA Report consists of some 29 memos (Memos) each of which particularises an item of adjustment said to be necessary to be made to the FBGHL's EBITDA in order to reflect the true financial position of FBGHL at the relevant time. 4 Broadly speaking, each Memo sets out detailed particulars of conduct asserted to have led to the item in question causing FBGHL's EBITDA to be inflated or overstated and thus misrepresented. 5 The applicants contended that the EA Report was, at the time that it was prepared, protected from disclosure by legal professional privilege. However, redacted copies of the EA Report were provided to the respondents in the course of this litigation on 7 February 2014. At that time, and based on a claim of legal professional privilege, some 69 redactions were made to the copies of the EA Report provided to the respondents. By the time this application was heard, the applicants only pressed their claim of privilege in respect of 14 redactions (the Redactions) made to the copies of the EA Report provided to the respondents. 6 In the context of the respondents' application for an order that the applicants produce and provide to them an unredacted copy of the entirety of the EA Report, I need to determine whether the information the subject of the Redactions is protected from disclosure to the respondents by reason of legal professional privilege. As will become apparent, the major issue for consideration is whether the protection conferred by the privilege was lost, as against the respondents, when a copy of the entirety of the EA Report was provided by the applicants to a third party.

the FACTS 7 The evidence was not controversial. The three deponents whose affidavits were tendered were not cross-examined. 8 The affidavit of Daniel Marquet, a partner of Corrs, annexed the SSA. The terms of the SSA contemplated that certain warranties specified in Schedule 7 of the SSA (Insured Warranties) would be provided by the Sellers if, on or before completion, the Buyer took out a warranty insurance policy in respect of the Insured Warranties to a limit of NZ$150 million. 9 In accordance with the SSA, Asahi took out policies of Warranty and Indemnity Insurance (the Policy) which insured Asahi or its nominee (ultimately ILNZ) against breaches of the Insured Warranties given by the Sellers pursuant to the SSA. The Policy was taken out with American Home Assurance Company as well as with a number of excess layer insurers (collectively the Insurer). The Policy has a limit of liability of NZ$150 million. 10 Mr Marquet deposed that there were four purposes for creating the EA Report. He stated that the EA Report was prepared by Corrs: …for the purpose of providing advice to the Applicants in relation to its potential claims in the anticipated proceeding against the [Respondents], in order to prepare particulars of the EBITDA adjustments that have been pleaded in this proceeding, to advise the Applicants in relation to any claim under the Policy, and in preparing a notice of claim which satisfied clause 6.5 of the Policy. Mr Marquet stated that some parts of the EA Report, and in particular the information that was the subject of the [initial 69] redactions, was information which was "sourced from" two categories of work product produced by Deloitte and/or Freehills. That work product was referred to as the "Deloitte Advices" (Deloitte Advices) and the "Interview Records" (Interview Records) 11 The provenance of the Deloitte Advices and the Interview Records was referred to by Mr Marquet but was the subject of more direct evidence from Eustathia Markopoulos. At the relevant time, Ms Markopoulos was a lawyer who was part of an in-house legal team that, on behalf of the applicants, instructed and dealt with Freehills and later with Corrs. Freehills acted as the applicants' lawyers until June 2012. They were initially retained to act for the applicants in relation to their purchase of the FBGHL shares. After the completion of the SSA, Freehills were instructed to investigate and advise the applicants in relation to the applicants' concern that one or more of the respondents may have engaged in misleading or deceptive conduct during the due diligence process. 12 Ms Markopoulos deposed that in order for the applicants to be properly informed about their legal rights and any possible legal claims they may have had against one or more of the respondents, the applicants also engaged Deloitte to provide forensic accounting services. The function of Deloitte was to enable the applicants to make the communications necessary to obtain the legal advice they required from Freehills. Ms Markopoulos stated that in order to assist Freehills to provide legal advice to the applicants, Deloitte produced (or was involved in Freehills producing) the Interview Records which comprised notes and records of interviews carried out with managers of FBGHL. The second category of work product produced by Deloitte was written advice that contained the results of Deloitte's work in analysing FBGHL's financial and accounting records, carrying out interviews of the managers of FBGHL and undertaking various other tasks. That work product is the Deloitte Advices. 13 Ms Markopoulos deposed that from her perspective as a lawyer for the applicants, the Interview Records and the Deloitte Advices were prepared for the dominant purpose of the applicants being advised in respect of anticipated litigation. 14 By the end of 2012, the applicants had formed the view that they may have a potential claim available under the Policy and also a claim against the respondents under the ACL. On 1 March 2012, ILNZ sent a notice of potential claims to the Insurer. On 5 March 2012, ILNZ sent a notice of potential claims to the Sellers. On 13 February 2013, Mr Marquet on behalf of ILNZ, sent a notice of claim (Notice of Claim) to the Insurer. In his covering letter, Mr Marquet noted that as the applicants' loss exceeded the cover available under the Policy, the applicants would shortly issue legal proceedings against various of the respondents to recover damages caused by conduct in contravention of s 18 of the ACL. On 14 February 2013, the applicants commenced this proceeding. 15 The Notice of Claim delivered to the Insurer specified that ILNZ made a claim for loss occasioned by the breach of Insured Warranties 17.2 and 6.3 contained in Schedule 7 of the SSA. It is sufficient for current purposes that I identify the terms of Insured Warranty 17.2 and briefly outline the basis upon which the Notice of Claim asserted the breach of that warranty. 16 Insured Warranty 17.2, as far as is relevant, was in the following terms: 17.2 Due Diligence Materials (a) So far as the Sellers are aware, no information has been omitted from the Due Diligence Materials that would render the Due Diligence Materials misleading in any material respect or that is known to the Sellers and which the Sellers reasonably consider is material to the Business. (b) As far as the Sellers are aware, the information contained in the Due Diligence Materials is not misleading or deceptive in any material respect. … 17 The Notice of Claim referred to the terms of Insured Warranty 17.2. It asserted that the Due Diligence Material provided to the Sellers included FBGHL's EBITDA and then set out why that information was misleading and deceptive. In doing so, the Notice of Claim identified items in relation to which ILNZ asserted that significant downward adjustments should have been made to FBGHL's EBITDA. It then stated: The Insured has prepared a report setting out a summary of the adjustments and the calculations of the adjusted EBITDA amounts for FBGHL for the twelve months to 31 March 2011, 30 June 2011 and 30 September 2011 (EBITDA adjustment report) which will be provided to the Insurers. 18 On 1 March 2013, under cover of a letter from Corrs (which was not tendered in evidence), Corrs provided the Insurer with a copy of the EA Report. Mr Marquet deposed that as the applicants did not wish to waive privilege in the contents of the EA Report by delivering the report to the Insurer, the documents provided were marked "Privileged and Confidential" or "Confidential and Privileged" on "many pages". 19 A perusal of the EA Report shows that it has no cover page. It begins with a glossary of terms (page 1) and a table which contains a summary of adjustments (page 2). Page 1 is marked "Privileged and Confidential". Thereafter, the first page of each of the Memos is marked "Privileged and Confidential" or "Confidential and Privileged". 20 On 13 June 2013, some three months later, Corrs responded to a request for further information from lawyers for the Insurer. The response included the following: We note that paragraphs 1.4.1, 1.4.2 and 1.6 of your request refer to the memos we provided to you by our letter dated 1 March 2013. These memos are confidential and privileged and were provided to you on this basis. The documents were provided in a pdf format and stamped privileged and confidential in order to maintain that privilege and confidential status. The specific documents you have identified in paragraphs 1.1.4. 1.4.2 and 1.6 are also confidential and privileged. We are not prepared to produce these documents in electronic or any other format due to their confidential and privileged status. 21 In relation to the ILNZ's provision of the EA Report to the Insurer, Mr Marquet deposed that he expected that the Insurer would maintain confidentiality and privilege in the EA Report "consistent with their duty of utmost good faith to ILNZ". 22 On 5 April 2013, the applicants provided the respondents with memoranda of Further and Better Particulars (FABP Memos) as particulars of the adjustments that the applicants' Statement of Claim alleges should have been made to FBGHL's EBITDA. The FABP Memos were annexed to an affidavit of Jonathan Light relied upon by the respondents. The respondents contended (and it was not submitted to the contrary) that aside from the information masked by the Redactions (the content of which was unknown to them), the content of the FABP Memos was in substance the same as the content of the copy of the EA Report provided to the respondents. Mr Marquet explained that the FABP Memos do not contain information sourced from the Deloitte Advices or information sourced from the Interview Records. According to Mr Marquet, that material was deliberately not included in the FABP Memos because the applicants wished to maintain confidentiality and their privilege in all of the Deloitte Advices and the Interview Records. 23 There are other provisions of the SSA and some provisions of the Policy which are relevant to the factual context in which the major issues for determination need to be considered. It is sufficient that I outline the relevant parts of the provisions in question and identify what the provision, at least arguably, provides for. I do so without seeking to intrude upon any potentially contested questions of construction which may need to be dealt with in the substantive proceeding. 24 Clause 11.1 of the SSA provided that where the Buyer has taken out a Warranty Insurance Policy (as contemplated by the SSA) the Sellers would give the Insured Warranties. By clause 11.3, the Sellers warranted to the Buyer that each warranty given was true and correct. However, putting aside exceptions not relevant for current purposes, clause 11.2(b) of the SSA provided that the Buyer agreed that it would not make, and waived any right it may have to make, any Claim against the Sellers arising out of a breach of an Insured Warranty. Clause 13.7 of the SSA relevantly provided that the Sellers have no liability in respect of a Claim to the extent that any Buyer Group Member (defined to include the Buyer and its related entities) has a right to recover under any contract of insurance in respect of any fact, matter or circumstance giving rise to the claim. In each case, Claim is defined to include any cause of action arising in relation to any provision of the SSA. 25 As the recitals to the Policy identify, the indemnity provided under the Policy relates to the warranties given pursuant to the SSA. Broadly speaking, the Policy indemnifies the Buyer (as defined by the SSA) against loss that the Buyer would have been entitled to claim against the Sellers pursuant to the SSA for a breach of clause 11.3 of the SSA in respect of the Insured Warranties, if the Sellers had been liable to the Buyer pursuant to the SSA but for "the waiver and release in clause 11.2" of the SSA. 26 Clause 9 of the Policy deals with the Insurer's right to subrogation and assignment of the ILNZ's right of recovery against other persons. However, the right to subrogate is qualified by clause 9.2 which provides that the Insurer irrevocably waives its rights of subrogation against each of the Sellers other than in the event of fraud by that Seller. 27 As earlier stated, Mr Marquet deposed that one of the purposes for preparing the EA Report was to prepare a notice of claim under the Policy which satisfied the requirements of clause 6.5 of the the Policy. That clause provides: 6.5 Claim Notice contents The Claim Notice shall describe to the best of the Insured's knowledge after reasonable inquiry: (a) the facts and circumstances relating to the Loss or potential Loss (including a specific reference to the Insured Warranties involved); and (b) to the extent the Insured is in a position to reasonably determine the amount of the Loss (but not otherwise), an estimate of the amount of the Loss, arising out of or resulting from the Claim or the facts, matters or circumstances that may give rise to the Claim; and (c) in sufficient detail to allow the Insurer to assess the Claim. 28 The requirement to deliver a "Claim Notice" is dealt with by clause 6.3 of the Policy. Clause 6.3 contemplates that a Claim Notice can be made in relation to a Warranty Claim, (such as was done in this case), but also contemplates that a Claim Notice may be delivered in relation to any "Third Party Demand". That phrase is defined and only relates to a claim brought against FBGHL and its subsidiaries by a person other than the Insured, a member of the FBGHL group and (broadly speaking) the Insurer. In relation to a claim made to the Insurer in respect of a Third Party Demand (but not any other kind of claim), clause 6.13 of the Policy makes provision for ILNZ to resist the disclosure of any information, document or material which is subject to a claim for legal professional privilege (to the extent that ILNZ has an obligation to disclose or give such information, document or material), unless the Insurer provides undertakings and assurances as to the use, disclosure and confidentiality of any such information as ILNZ may require (acting reasonably) to preserve privilege. 29 Lastly, clause 10.9 of the Policy requires ILNZ to keep the Policy and details of any dispute relating to it confidential. No corresponding obligation is imposed on the Insurer. 30 It was not in contest that the Insurer had not confirmed indemnity in relation to the claim made by ILNZ at the time that the copy of the EA Report was provided to it and had not done so at the time of this application was heard.

Applicable Legal Principles 31 There is no issue that, at this interlocutory stage of the proceedings, the common law of Australia and not the Evidence Act 1995 (Cth) (Evidence Act) governs the current dispute. 32 In Grant v Downs (1976) 135 CLR 674 at 677, Barwick CJ (whose approach was eventually accepted in Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) 201 CLR 49) expressed the primary principle upon which legal professional privilege is founded as follows: …a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection. 33 In Esso, at 64-65, Gleeson CJ, Gaudron and Gummow JJ identified the rationale for legal professional privilege in the following terms: Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court. In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisers, which are not protected from compulsory disclosure. The rationale of the privilege has been explained in a number of cases … The privilege exists to serve public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. In Waterford v The Commonwealth (1987) 163 CLR 54 at 64-65, Mason and Wilson JJ explained that legal professional privilege is itself the product of a balancing exercise between competing public interests and that, given the application of the privilege, no further balancing exercise is required. As Deane J expressed it in Baker v Campbell (1983) 153 CLR 52 at 114, a person should be entitled to seek and obtain legal advice in the conduct of his or her affairs, and legal assistance in and for the purposes of the conduct of actual or anticipated litigation, without the apprehension of being prejudiced by subsequent disclosure of the communication. 34 As the formulation of the principle by Barwick CJ in Grant v Downs shows, there are two categories of legal professional privilege. The first (advice privilege), is concerned with obtaining legal advice. The second (litigation privilege), relates to the conduct of litigation. 35 It is uncontroversial that legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client where the dominant purpose for the creation of that work product was the giving or receiving of legal advice or where the work product was prepared in anticipation of or for the purposes of litigation. The relevant authorities are collected under principle (8) at paragraph [44] of AWB Limited v Cole (No 5) (2006) 155 FCR 30 (Young J). 36 In relation to documents that record legal work carried out for the benefit of the client, legal professional privilege extends beyond actual communications. As Gummow J pointed out in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 569, that extension is necessary to deny access: …to any document prepared by a lawyer or client from which there might be inferred the nature of the advice sought or given. Examples include communications between the various legal advisers of the client, draft pleadings, draft correspondence with the client or the other party, and bills of costs. 37 The work product of the lawyer may be put to a number of different uses. It may be communicated to the client in order for the lawyer to provide legal advice. It may be used by the lawyer to facilitate the investigation, preparation and presentation of the client's case in anticipated or extant litigation. Legal professional privilege will attach to the documents made in furtherance of those uses. 38 However, legal professional privilege does not attach to all the work product of a lawyer produced for the benefit of a client. Relevantly, legal professional privilege will not attach to documents whose purpose is to communicate the work product of the lawyer to persons other than the client, in circumstances where the lawyer/client confidentiality attached to the work product of the lawyer is not to be maintained. Drafts of a pleading, witness statement, affidavit, legal submission or correspondence are all work product of a lawyer to which legal professional privilege will ordinarily attach when those documents are in draft form and in the hands of the lawyer, the client or their agent. Once in final form for the intended use of being provided to others, legal professional privilege will not attach to the non-confidential communication of the finalised document provided to such persons. 39 So much is apparent from the judgment of Mansfield, Kenny and Middleton JJ in Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547. That case (and the cases which have applied it) demonstrate that where the legal work of the lawyer is produced in order to be used for a multitude of purposes, the particular use to which the legal work is put has a bearing upon whether or not legal professional privilege attaches to the particular communication in question. As the legal work constituted by the preparation and collation of the EA Report was done for multiple purposes and then applied to a particular communication, the principles explained in Cadbury Schweppes have application. 40 In December 2005, the ACCC commenced proceedings against a corporation (Visy) and its related entities alleging various contraventions of Part IV of the Trade Practices Act 1974 (Cth). In the course of these proceedings, the ACCC filed and served on Visy some 111 finalised 'proofs of evidence' of witnesses pursuant to an order made by Heerey J on 8 December 2006. 41 The ACCC and Visy had agreed that the 111 witness proofs would be admitted into evidence if no factual issue arose as to their content. However, judgment in the proceeding was given on 2 November 2006 without a trial having been held due to agreement between the parties. Accordingly, the 111 witness proofs were not admitted into evidence in the proceedings. 42 In December 2006, a corporation (Cadbury) commenced proceedings against another corporation (Amcor) (and related entities) relating to matters arising from the same or similar subject matter as the ACCC and Visy proceeding. Amcor cross claimed against Cadbury, and joined Visy (and related entities) to that cross claim. In the course of the second proceeding, Gordon J ordered Visy to file and serve various categories of documents, including the 111 witness proofs which had been served on it by the ACCC in the earlier proceeding. The ACCC intervened to challenge these orders, seeking to prevent the production of the 111 witness proofs on the basis that legal professional privilege attached to them. 43 The Full Court in Cadbury Schweppes observed at [45] that it is important when addressing whether legal professional privilege attaches to a document "to have regard to the factual position and how the question comes to be determined". The Full Court noted in that regard that the documents in contest were finalised proofs in the possession of the party upon which they had been served and not proofs of evidence (copy or otherwise) in the possession of the party who had created them. As the served finalised proofs were the subject of the claim of legal professional privilege, attention needed to be directed to the creation of the finalised proofs and their service. Accordingly, and relying upon the observations of Finn J in Pratt Holdings v Federal Commissioner of Taxation (2004) 136 FCR 257, the Full Court considered that in those circumstances the proper question was "what was the intended use or uses of the finalised proofs of evidence which accounted for their being brought into existence"? 44 At [45] and [73], the Full Court distinguished between the purpose of creating a document for use by the client and its lawyers in the litigation and the creation of a document prepared for disclosure to an opponent in the litigation. Drafts and final versions of such documents (be they proofs of evidence, affidavits or pleadings) are "by nature and in fact different documents". That is so even if the final version is "just a reproduction of anything that comes before it". The final version of the document assumes a different character because that document was created for disclosure to the opponent and to the court. As the Full Court said at [73]: The "essential character" of a final proof of evidence is to make disclosure to the opponent and the court of the evidence which is proposed to be led at trial. Such finalised witness statements may be prepared in the finalised form because of the court order for disclosure of evidence before the hearing. However, the fact remains that the purpose of the party preparing and delivering a final version of a witness statement is to give advance notice of what evidence that party proposes to put before the court. It does not matter whether the finalised version was or was not intended to be tendered in court - the purpose of bringing into existence the finalised proof of evidence was to give it to the opposing party at the time of service and to disclose the information contained in the proof. 45 In making that distinction, the Full Court relied on observations made by Gibbs CJ and Dawson J in Attorney-General (NT) v Maurice (1986) 161 CLR 475. In that case, Aborigines claiming to be the traditional owners of certain land filed with the Aboriginal Land Commissioner and handed to other parties a claims book in which particulars of their claim and certain material in support were set out. The observations of Gibbs CJ and Dawson J relied upon by the Full Court in Cadbury Schweppes were directed to the question of whether the claims book was protected from disclosure by legal professional privilege. At 480 of Maurice, Gibbs CJ considered that the completed claims book (as distinct from a draft) would not be protected by legal professional privilege because it had been brought into existence with the intent that it be, and was in fact, "communicated to all the parties concerned and it was open to any party to make any proper use of it". At 496, Dawson J said: Before it emerges in its final form, successive drafts of a claim book may be privileged but this is not because of any privilege attaching to the final product. Draft pleadings in an action may be privileged, but I have never heard it suggested that a statement of claim or a defence or a reply is privileged so that the privilege is waived when it is filed or delivered to the other side. The reason why the draft may be privileged before the document is completed was early explained in Walsham v Stainton (1863) 2 H & M 1 at 4; 71 ER 357 at 358, upon the basis that, although after a pleading has been filed it becomes publici juris, the drafts "might disclose the precise character of confidential communications with the solicitor, by showing the alterations made from time to time". In the same way a letter to the other side in litigation which is drafted in a solicitor's office may be privileged before it is sent because it may reveal confidential communications between the solicitor and his client. Once it is sent, however, it ceases to be confidential and there is no privilege in it, not because privilege in the document is waived, but because no privilege attaches to it. When the claim book in this case reached final form or, at all events, when it was put to the use for which it was intended, it was not a confidential communication and not a privileged document. Legal professional privilege exists to secure confidentiality in communications between a legal adviser and his client but it can have no application in relation to a document the purpose of which is to communicate information to others. Of course, what is contained in such a document may reveal some confidential communication between a legal adviser and his client, but if it does do so and so waives privilege, the waiver is of the privilege in the anterior communication and not in the document itself. [Emphasis added.] 46 The reasoning of Dawson J in Maurice emphasises that the non-privileged character of final versions of pleadings and other documents created by the lawyer for the purpose of being delivered to other parties or filed in court is not based upon a waiver of legal professional privilege, but on the fact that legal professional privilege does not attach to documents created for a non-confidential purpose. That, as Dawson J explained, is because legal professional privilege exists to secure confidentiality in communications between a legal adviser and the client (lawyer/client confidentiality) and can have no application in relation to a document the purpose of which is to openly communicate information to others. 47 As those observations explain, the rationale for legal professional privilege is based upon the protection of lawyer/client confidentiality. As Goldberg J said in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 at 562 (citing Maurice and other authorities), "it is an integral component of the claim for privilege from production on the ground of legal professional privilege that the relevant documents be confidential". The Full Court in Cadbury Schweppes identified the nature of the confidentiality relevant to legal professional privilege as being "that of preventing one's opponent from seeing the confidential communications between a client and his or her legal representative or otherwise brought into existence for the dominant purpose of the litigation" (at [50]). A document created to enable its deployment for a use which is inconsistent with the maintenance of lawyer/client confidentiality is not a document to which legal professional privilege attaches because the purpose for creating the particular document is inconsistent with the rationale of litigation privilege. As the Full Court in Cadbury Schweppes said at [64]: Importantly, whether it be an affidavit, witness statement or finalised proof of evidence, the purpose in serving and filing is not within the rationale of litigation privilege once disclosed to an opposing party. This is because, if the privilege is to protect the confidential communication between one party and that party's legal advisers as to the evidence that might be led at trial, the very giving of such information to the opposing party flies in the face of the rationale for the continued existence of the litigation privilege. 48 Cadbury Schweppes was followed by Barker J in Clifford v Vegas Enterprises Pty Ltd (No 2) (2010) 182 FCR 448 and by White J in Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia (2009) 74 NSWLR 469. 49 In Clifford, a claim of legal professional privilege was made in relation to a copy of an affidavit containing an expert's report about the value of certain shares. The report of the expert had been procured by the applicant for various purposes including the contemplated litigation before Barker J and also for use in then extant litigation in the Family Court of Western Australia between the applicant husband and his wife. In those proceedings, the applicant had sought to tender the expert's affidavit but its admissibility was objected to. Before that objection was determined, that proceeding was settled. Applying the reasoning of the Full Court in Cadbury Schweppes, Barker J concluded that the affidavit which the applicant had sought to tender in the Family Law proceeding was not created for a purpose which attracted legal professional privilege. Its purpose was for tendering in open court and disclosing to the other party the husband's case in relation to an aspect of the proceeding, namely the value of the shares in question (at [57]). 50 In Buzzle Operations, legal professional privilege was claimed in relation to 13 affidavits and three witness statements which were prepared for the purposes of a proceeding in this Court. The affidavits and witness statements had been filed and served. The proceeding was settled before the affidavits and witness statements were read in court. The defendants to the proceeding before White J in the Supreme Court of New South Wales sought access to the affidavits and witness statements which the plaintiff had filed in this Court and served on the respondents to that litigation. The plaintiff in that proceeding claimed legal professional privilege. Whilst the claim was made pursuant to the Evidence Act 1995 (NSW), White J relied on and applied the reasoning of the Full Court in Cadbury Schweppes. At [27], White J stated: In the present case I am not concerned with copies of affidavits and witness statements in the possession of the respondents to the Federal Court proceedings on whom they were served, but those in the possession of the plaintiffs. Hence it might be said that the question is one of waiver of privilege rather than the existence of privilege. However, in my view, the reasoning in ACCC v Cadbury Schweppes Pty Ltd demonstrates that the finalised proofs of evidence which, at the time they were created as final documents were intended to be served, demonstrates that privilege did not attach either to the affidavits and witness statements which were filed, nor to those which were served, nor to the copies retained by the party by whom they were served. As the documents which were served were not confidential, the copies also could not have been confidential.

Did Legal Professional Privilege attach to the Redactions? 51 The applicants contended that the EA Report as a whole was privileged prior to being provided to the respondents in redacted form and that the information the subject of the Redactions remains privileged. Further, the applicants contended that the information the subject of the Redactions was sourced from the Interview Records and the Advice Records which were themselves privileged. On that secondary basis, the applicants contended that the information the subject of the Redactions was also privileged. 52 On the question of whether legal professional privilege attached to the EA Report, the submissions of the parties as to the dominant purpose for the creation of the EA Report were not, in my view, sufficiently focused upon the actual document in relation to which production from disclosure is being resisted. 53 As the Full Court said in Cadbury Schweppes, when addressing whether legal professional privilege attaches to a document it is important to have regard to the factual position and how the question comes to be determined. In this case, an order was made on 9 October 2013 by Gordon J that the applicants discover: [d]ocuments concerning any claim or proposed claim under the Warranty Insurance Policy or similar policy or policies entered into by one or more of the Applicants pursuant to clause 11.1 of the SSA. 54 In response to that order, on 7 February 2014, Corrs provided to the respondents' solicitors what Corrs described as "copies of the memos regarding EBITDA Adjustments sent by Corrs to Asahi's Insurers on 1 March 2013". The document provided to the respondents was a copy of the EA Report with redactions. 55 It is evident then that what the applicants have in their possession is a copy of that copy of the EA Report which was delivered to the Insurer on 1 March 2013 (the Insurer's EA Report). It is the disclosure of some of the content of that document which is being resisted and which is the subject of the claim for legal professional privilege. The relevant question then is whether legal professional privilege attached to the Insurer's EA Report. Consistently with the reasoning in Cadbury Schweppes, whether the disclosure resisted by the applicants is protected by legal professional privilege falls to be determined by reference to the purpose for which the Insured's EA Report came into existence. 56 The evidence given by Mr Marquet as to the four purposes for Corrs preparing the original of the EA Report identified the uses that were intended to be made with the information collected. However that evidence did not directly address the purpose for which the Insurer's EA Report was brought into existence. The applicants' submissions suffered from the same problem. Those submissions focused on the dominant purpose for which the original EA Report was brought into existence and not the use which accounted for the Insurer's EA Report being brought into existence. The respondents' submissions on this issue suffered from the same vice. Ultimately, it seems to me, that led the respondents to concede in the course of oral submissions that the EA Report was privileged. As that concession was made in relation to the EA Report in a context in which the submissions of the parties failed to properly distinguish between the original EA Report and the Insurer's EA Report, the concession must be treated as a concession that legal professional privilege attached to the Insurer's EA Report when that document was first brought into existence. 57 In light of that concession, I need not further address whether legal professional privilege attached to the Insurer's EA Report. However, the symmetry of the applicable principles on that issue and those relevant to the issue of waiver are such that, despite the concession made, the ultimate result would likely have been no different. 58 The concession also makes it unnecessary to determine whether the second basis upon which the applicants relied to establish that the Redactions were privileged is made out. The only live issue then is whether there was a waiver of the privilege that was attached to the Insurer's EA Report immediately prior to its disclosure to the Insurer.

Applicable Legal Principles 59 The central guiding principles which govern waiver at common law are set out in the reasons for judgment of Gleeson CJ, Gaudron, Gummow and Callinan JJ at [28]-[30] of Mann v Carnell (1999) 201 CLR 1 and are as follows: Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. 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. What brings about the waiver is the inconsistency, which the courts, when 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. The test to determine if there is such inconsistency is an objective one so that implied waiver may be found notwithstanding that it may not reflect the subjective intention of the privilege holder. Voluntary disclosure to a third party does not necessarily waive privilege. 60 In Osland v Secretary, Department of Justice (2008) 234 CLR 275, Gleeson CJ, Gummow, Heydon and Kiefel JJ observed at [45] and at [49] that whether conduct was inconsistent with the maintenance of the confidentiality which the privilege is intended to protect is a judgment to be made in the context and circumstances of the case, and in light of any considerations of fairness arising from that context or those circumstances. Questions of waiver are matters of fact and degree. 61 The respondent asserted the privilege in the Insurer's EA Report was waived by the applicants in two ways: (i) By providing an unredacted version of the Insurer's EA Report to the Insurer; and (ii) By providing the FABP Memos to the respondents.

Was privilege lost when the Insurer's EA Report was provided to the Insurer? 62 The central issue is whether disclosure to the Insurer was inconsistent with the confidentiality purpose protected by the privilege attached to the Insurer's EA Report. It seems to me that the appropriate starting point is to identify the nature of the confidentiality which was attached to the Insurer's EA Report. The nature and general content of that document is significant. As I have earlier indicated, the EA Report set out detailed particulars of conduct alleged to have caused various items of the FBGHL's EBITDA to be inflated or overstated. There is no issue that the Redactions are particulars of the same subject matter. The nature of the EA Report is that of a document providing particulars of the kind that may be provided to support a pleading. This is reinforced by the applicants' service of the FABP Memos as further and better particulars of the adjustments that the applicants' Statement of Claim alleges should have been made to the FBGHL's EBITDA. As identified earlier, the content of the FABP Memos is not identical but most of its content is the same as the content of the EA Report. 63 It is apparent then that the Insurer's EA Report is not a document which records communications between the client and its lawyer. It does not provide the lawyer's opinion on the law, the client's prospects of success or the strategy which ought to be adopted in the litigation. The confidentiality in question here is the kind of confidentiality which litigation privilege rather than advice privilege serves to protect. 64 The Full Court in Cadbury Schweppes identified the rationale for litigation privilege to be different from that of advice privilege (at [38]). At [42], the Full Court observed that the rationale of litigation privilege is to secure a fair trial within the adversarial process and to facilitate the common law mode of trial. As the Full Court observed by reference to a range of authorities: All formulations emphasise, in one way or another, that the communications made or materials to be protected are those which are made confidentially between the client and the legal representative or otherwise come into existence for the dominant purpose of the litigation, and which are to be kept away from the opposing party. [Emphasis added] 65 That point was earlier emphasised by the Full Bench at [37] when it said: Whatever is the extent of confidentiality arising from litigation privilege, one element of confidentiality is essential, namely non-disclosure to one's opponent. 66 Put another way, the confidentiality purpose which litigation privilege serves to protect is to keep hidden from one's opponent or adversary (whether actual or potential) material that may prejudice the privilege holder or advantage his or her opponent. 67 Inconsistency will usually only be established by reference to a voluntary act of disclosure by the privilege holder. An involuntary disclosure is not the act of the privilege holder and cannot of itself give rise to inconsistency. The motivation for disclosure may however have some bearing upon whether the act of disclosure was or was not inconsistent with the maintenance of the confidentiality purpose. 68 It was not suggested here that the disclosure made by the applicants was not voluntary. Whilst the applicants had a duty of disclosure under the Policy, it was not contended that the duty extended to providing information which was protected by legal professional privilege. 69 Unlike many situations where an insurer and its insured may have a commonality of interest, the respondents contended that the particular and somewhat unique terms of both the Policy and the SSA, have, in the context of the claims made by the applicants both against the Insurer and the respondents, created an alignment of interest as between the Insurer and the respondents and a corresponding divergence of interests as between the applicants and the Insurer and the applicants and the respondents. The respondents relied upon the terms of the Policy and of the SSA which I have earlier described at [15]-[16] and [24]-[25]. 70 Shortly stated, the respondents contended that it is in the interests of the applicants, in relation to both the claim made to the Insurer and the claim made in the proceeding, to establish that the Sellers engaged in misleading or deceptive conduct in relation to FBGHL's EBITDA. In relation to that same subject matter, and so as to avoid liability, it is in the interests of the Insurer and in the interests of the respondents to establish that the Sellers did not engage in misleading or deceptive conduct. 71 The applicants had no answer to that analysis and at least for the purposes of this application it should be accepted as correct. 72 The applicants contended, however, that there were interests which the applicants and the Insurer did have in common. It was said that they shared a common interest in assessing the liability of the Sellers. In my view, that interest is of little significance (Network Ten v Capital Television (1995) 36 NSWLR 278 at 283B) and provides no basis for countering the disparity of interests upon which the respondents rely. Secondly, the applicants contended that a commonality of interests arises from the Insurer's rights of subrogation under the Policy. The contention was not developed and is unpersuasive. There was no evidence that at the time the claim was made, the Insurers were likely to provide indemnity (cf. Bulk Materials v Coal & Allied Operations (1998) NSWLR 689 at 695). More significantly, as I have already noted, the Insurer's right of subrogation under clause 9 of the Policy is highly qualified and limited to an event of fraud by the Sellers. No allegation of fraud was raised by the Notice of Claim and the evidence before me did not suggest that any such allegation was then in contemplation or has since been raised. 73 The absence of any significant commonality of interests as between the applicants and the Insurer and the potential for disparate and competing interests by reason of the claim under the Policy provides a backdrop which, in my view, is significant. I take into account ILNZ's duty of disclosure under the policy but as earlier stated it was not contended that disclosure of privileged material was required so that ILNZ was effectively compelled to provide the Insurer with the information masked by the Redactions. This is a case where, on the facts (including those which arise from the concession made by the respondents) privileged information was voluntarily disclosed to a potential opponent. 74 However, even where a privileged document is provided to an opponent, the confidentiality in the disclosed communication may be preserved. If the basis upon which privileged material is made available is restricted so as to secure the confidentiality, the act of disclosure may not be inconsistent with the maintenance of the confidentiality which the privilege serves to protect. 75 Restrictions of that kind are obviously better effectuated by an express agreement which spells out the basis upon which the disclosure is made and the limitations upon its further use. However, agreement as to confidentiality may be implied from the circumstances in which the disclosure was made: Gotha City v Sotheby's [1998] 1 WLR 114 at 222 (Staughton LJ, with whom Aldous LJ and Hutchison LJ agreed) and see Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253 at [44] (Sackville J); Bulk Materials at 695E; Rickard Constructions Pty Ltd v Rickards Hails Morett, Pty Ltd [2006] NSWSC 234 at [33] (Bergin J); and State of New South Wales v Jackson [2007] NSWCA 279 at [46]-[47] (Giles JA, with whom Mason P and Beazley JA agreed). In Berezovsky v Hine [2011] EWCA Civ 1089, the Master of the Rolls, speaking for the English Court of Appeal, said at [29]: …where privilege is waived, the question whether the waiver was limited, and, if so, the parameters of the limitation, must be determined by reference to all the circumstances of the alleged waiver, and, in particular, what was expressly or impliedly communicated between the person sending, and the person receiving the documents in question, and what they must or reasonably have understood. 76 The applicants relied heavily on the judgment of Chernov J (with whom Warren CJ agreed) in Spotless Group Limited v Premier Building and Consulting Group Pty Ltd [2006] 16 VR 1. They contended that as in that case, here, the disclosure of the privileged communication to a third party was for a limited and a specific purpose and under conditions of confidentiality and accordingly the disclosure did not result in a waiver. The submission made by the applicants tended to suggest that a voluntary disclosure to a third party for a limited and specific purpose and under conditions of confidentiality created some exception to the governing rule that inconsistency between disclosure and the maintenance of confidentiality will destroy the privilege. However, it is absolutely clear from the judgment of Chernov JA that Spotless was no more than the faithful application of that rule (see at [26]-[29]). 77 The applicants contended that upon the disclosure of the privileged material to the Insurer, the Insurer was brought into 'the charmed circle' and was precluded from using the privileged material without the consent of the privilege holder. That contention was not made in reliance upon the principle of common interest privilege. It was said to arise from the context of confidentiality in which the disclosure was made. In that respect, the applicants relied upon three primary matters. First, the fact that the Insurer's EA Report was variously marked "Privileged and Confidential" or "Confidential and Privileged". Secondly, the fact that disclosure occurred pursuant to the Policy and that from the Insurer's duty of utmost good faith, an obligation of confidence should be implied, and thirdly the commonality of interests said to have existed between the Insurer and the applicants to which I have already referred. 78 In Berezovsky, disclosure was made as between friends and long-time commercial allies. The disclosure of what was described as "obviously sensitive" material was made principally for the benefit of the recipient although the contemplated use would have served the interests of both the privilege holder and the recipient. The material was provided under the cover of an email headed "Privileged and Confidential". The Court of Appeal determined that the privileged draft witness statements which were disclosed were provided on the basis that they would be utilised by the recipient for the purpose for which they were provided. That purpose was to assist the recipient in preparing his evidence and to ensure that there was no conflict between the recipient's anticipated evidence and that of the privilege holder. The witness statements were not to be used for any other purpose without the consent of the privilege holder. A waiver was found to have occurred, but only to that limited extent (at [34]). 79 From the point of view of the applicants, Berezovsky is the most supportive judgment that my research has been able to find. Its facts are distinguishable from the present and more favourable to the privilege holder than the facts of this case. Even so, the Court of Appeal held that waiver had occurred at least in relation to the objectively understood use for which the material was provided. 80 Here, the privileged material was provided as particulars given in support of a claim made under the Policy. The objective purpose of the provision of that material must clearly have included the use of it by the Insurer to assess the claim. The possibility must have been objectively contemplated that in assessing the claim, the Insurer may want to evaluate it by disclosing the information to others including persons who would not be under any restriction as to its further disclosure (see Amalgamated Television Services Limited v Marsden [1999] NSWCA 97 at [28] (Giles JA with whom Mason P and Handley JA agreed)). It must also have been objectively appreciated that the Insurer could use the information in open court should any legal proceeding be brought against it by ILNZ, if for example the Insurer rejected ILNZ's claim. It follows that it must have been objectively understood that in pursuit of the purposes for which the information was disclosed, its contents may pass into the public domain. In that context, the Insurer was not under an implied obligation not to disclose the contents of the Insurer's EA Report whilst pursuing the purposes for which it was provided (see further Seven Network Limited v News Limited [2005] FCAFC 125 at [35] (Allsop J) and NSW v Jackson at [44]-[51]). 81 It is necessary to recall Mr Marquet's evidence that the EA Report was prepared including so that the applicants could be advised in relation to any claim under the Policy and in preparing the Notice of Claim. That lawyers were utilised for that task not only points to a recognition by the applicants that their interests were potentially adverse to those of the Insurer, but more significantly, it serves to highlight the confidentiality purpose relating to the Insurer which was protected by the privilege which attached to the EA Report. That confidentiality purpose was, in plain language, to keep from the prying eye of the Insurer (for such time as may be necessary to best protect the interest of the applicants) any information that may prejudice the applicants in relation to the claim made under the Policy. 82 The disclosure of the information contained in the Insurer's EA Report for its use by the Insurer was entirely antithetical to that confidential purpose and thus was "inconsistent with the maintenance of the confidentiality which the privilege is intended to protect" (Mann v Carnell at [29]). In those circumstances, an implied waiver of privilege occurred. In my view, the waiver was complete and not merely limited to the Insurer. That is because as Gordon J reasoned at [16]-[17] of Cadbury Schweppes Pty Ltd v Amcor Limited (2008) 246 ALR 137, by reference to the observations made by Branson, Sundberg and Allsop JJ in Liberty Funding Pty Ltd v Pheonix Capital Limited [2005] 218 ALR 283, once the privilege holder provides the privileged information to another person and cannot control its further dissemination by that person, the privilege is destroyed. The representations made by Corrs to the Insurer (see at [20]) some three months after the disclosure did not alter that result. 83 Further, my conclusion that an agreement as to confidentiality is not to be implied from the circumstances is supported by the following matters: Unlike Berezovsky, Spotless or Rickard Constructions, here, for the reasons previously explained, the privileged material was being provided to what must have been recognised as a potential adversary; The terms of the Policy did not expressly require the Insurer to keep material provided by the applicants confidential, and no assurances as to confidentiality were sought or obtained from the Insurer (cf Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529) despite the fact that the disclosure was made as between sophisticated commercial parties and facilitated by a lawyer; The Policy included a process by which material which was privileged could be provided to the Insurer on terms that would limit its use and maintain its confidentiality. Whilst that process was directed to Third Party claims, it nevertheless provided an agreed process which could readily be adopted for other claims; Again unlike Berezovsky or Rickard Constructions, the material provided was not "obviously sensitive" or "obviously privileged" such that a reader of it would readily understand that the confidentiality of the material was intended to be maintained; At the time the Notice of Claim was lodged and some two weeks prior to the disclosure, the Insurer was informed that legal proceedings would shortly be instituted against various of the respondents. The terms of the letter providing that information and the terms of the claim made on the Insurer would have made it apparent to the Insurer (as must have been known to the applicants) that the same or similar claims of misleading or deceptive conduct which supported ILNZ's claim under the Policy were about to be pursued against the respondents in this Court; and By reason of the inter-relationship between the SSA and the Policy, including in particular the terms of clause 11.2(b) and 13.7 of the SSA, it must have been appreciated (at least by the applicants) that there was a possibility that the manner and extent to which the applicants had properly pursued any rights to recovery of their alleged loss against the Insurer would become (as it has become) an issue in this proceeding. The prospect that the claim upon the Insurer could become (as it has become) an issue in this proceeding would have been understood as making it even more unlikely that sensitive material would have been provided to the Insurer or if provided, provided without express undertakings maintaining confidentiality designed to protect the applicants against the very kind of application which they currently face. 84 Those facts and circumstances do not support the proposition that it would have been objectively understood that the Insurer's EA Report contained material of a privileged nature. By reference to those circumstances, it would have been entirely reasonable for the Insurer to have assumed that what had been provided to it by way of particulars of conduct in support of the claim under the Policy would likely be provided to the respondents in support of the applicants' claim in the proceeding. That the applicants were minded to provide particulars of their claim to the Insurer which they intended to keep hidden from the respondents would, in the circumstances, not have been readily apparent. Nor was the Insurer likely to assume, given the confluence of their interests with those of the respondents, that the applicants would provide them with sensitive information of the kind which may advantage the interests of the respondents without requiring express restrictions as to the use of that material. Indeed, the absence of any attempt by the applicants to have the Insurer expressly agree to restrictive terms under which the disclosure would be made was likely have been objectively understood as flowing from the absence of any need for such restrictions because of the absence of any subsisting confidentiality. 85 In that context, the fact that "Private and Confidential" appeared at the head of each Memo would not have carried much weight and would likely have been objectively understood as a hangover from a prior use of the Memo. Such an impression would likely have been reinforced by the fact (which I would infer from the failure of the applicants to tender the covering letter) that the covering letter with which the Insurer's EA Report was provided said nothing about either confidentiality or privilege. At best, the designation "Private and Confidential" would have been objectively understood as intending that the information not be used for a purpose extraneous to the purposes for which it was provided. 86 In the light of all those facts and circumstances, Mr Marquet's subjective opinion that he expected that the Insurer would maintain confidentiality and privilege "consistent with their duty of utmost good faith" is a subjective view of little significance. I should add that beyond making a submission to the same effect, the applicants did not develop that argument at all. In circumstances where the proper law of the Policy is arguably the law of New Zealand, I do not even know whether the applicants' reliance on the duty of good faith is sourced in the Insurance Contracts Act 1984 (Cth), the common law of Australia or a particular law of New Zealand. In any event, it is difficult to envisage that a duty of utmost good faith could extend to preclude an Insurer from pursuing its legitimate purposes under a policy of insurance, including by using information provided by an insured to assess and/or resist a claim upon the policy. 87 The applicants also contended, in the alternative, that there was a common interest privilege between ILNZ and the Insurer and that no waiver occurred when privileged information was shared between them. The applicants relied upon the same alleged common interests as those relied upon for the primary contention, identified at [72]. 88 This alternative contention must fail. For the reasons already given, I am not satisfied that ILNZ and the Insurer shared a sufficient commonality of interest let alone the necessary identity of interest required to found the privilege contended for. As, Giles J said in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 (at 6): [w]hat is important is that, as Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd and Network Ten itself show, two persons interested in a particular question will not have a common interest for the purposes of the common interest privilege if their individual interests in the question are selfish and potentially adverse to each other. In such a case there will not be the necessary identity of interest.

Was privilege lost when the FABP Memos were provided to the respondents? 89 Having found for the respondents on their primary contention, it is not necessary that I set out in any detailed way why I would have found against the respondents on their secondary contentions as to waiver. 90 The respondents contended that by serving the FABP Memos as further and better particulars in the proceeding, the applicants made a disclosure inconsistent with the maintenance of their claim for privilege in the EA Report. It was contented that the FABP Memos were served for a forensic purpose in the proceeding. That conduct, it was contended, amounted to the selective deployment by the applicants of the bulk of the EA Report. A relevant unfairness and inconsistency was therefore said to have arisen. That was said to be the case, particularly having regard to the fact that the applicants' substantive claim in the proceeding includes allegedly misleading representations made by senior management of FBGH against whom the respondents have cross-claimed. 91 The contention is misconceived. As is apparent from my reasons, the EA Report was prepared including for the purpose of preparing further and better particulars in the proceeding. In that respect, the EA Report may be characterised as a draft of the further and better particulars which were served in finalised form when the FABP Memos were served on the respondents. That context could not possibly lead to a conclusion that a selective deployment had resulted in relevant unfairness and inconsistency and thus a waiver of privilege. 92 A litigant is entitled to be selective as between a draft and the finalised form of a pleading, a witness statement, an affidavit, or a legal submission. As has already been observed, the rationale of litigation privilege is based upon the capacity of one party, in the adversarial process, to keep from the other information that came into existence for the dominant purpose of the litigation and which may be prejudicial. Accordingly, the selective deployment of the contents of a draft document which came into existence for the purposes of the litigation, could not amount to a waiver of the privilege attached to the draft upon the finalised document being filed and served. 93 It was further contended by the respondents that by providing the FABP Memos and the redacted EA Report to the respondents, the applicants had already effectively disclosed to the respondents the substance of the information in the EA Report including that which was masked by the Redactions. The Court was invited to inspect an unredacted copy of the EA Report in order to ascertain whether that was in fact the case on the basis that, if it was, it would follow that having disclosed the privileged material, the applicants could not maintain their claim to privilege. A logical consequence of that argument was the rather absurd position that the respondents now seek disclosure of material already disclosed to them. 94 It is not necessary that I take up the invitation to examine the unredacted EA Report provided to the Court. Mr Marquet deposed that, unlike the unredacted EA Report, the FABP Memos do not contain information sourced from the Deloitte Advices and the Interview Records. It must follow that those two documents are different in substance and that for the same reason the copy of the redacted copy of the EA Report provided to the respondents and the unredacted copy of the EA Report are also different. Mr Marquet's evidence was not challenged. I accept that the Redactions mask information the substance of which has not already been provided to the respondents. For those reasons, I reject the respondents' secondary contentions that the privilege was waived.

orders 95 In light of my conclusions, I will make an order requiring the production of a copy of the documents sought by the respondents. The particular document in question should be specifically identified in the order. I will order that the applicants produce an unredacted copy of the "EBITDA Adjustment Reports" referred to as having been provided to the insurers on 1 March 2013 at paragraph [23] of the affidavit of Daniel Marquet of 15 April 2014. Given the proximity of the trial, that should be done forthwith. 96 In the event that the applicants' claim for privilege was not upheld, the respondents sought an order that the applicants pay the respondents' costs of this application. No submission to the contrary was made and it seems to me appropriate that costs should follow the event. I will therefore make a further order that the applicants pay the respondents' costs of this application. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

Associate: Dated: 13 May 2014 Schedule of Parties No: (P)VID87/2013 Federal Court of Australia District Registry: Victoria Division: General Second Applicant: INDEPENDENT LIQUOR (NZ) LIMITED Second Respondent: UNITAS CAPITAL PTE. LTD. Third Respondent: EAGLE COINVESTMENT PTY LIMITED (AS TRUSTEE FOR PACIFIC EQUITY PARTNERS FUND III CO-INVESTMENT TRUST) Fourth Respondent: JOMARK INTERNATIONAL IV B.V. Fifth Respondent: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS FUND III (AUSTRALASIA) UNIT TRUST) Sixth Respondent: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III (AUSTRALIA) UNIT TRUST) Seventh Respondent: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS FUND III LP Eighth Respondent: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III LP Ninth Respondent: PEP INVESTMENT PTY LIMITED Tenth Respondent: RICKARD JAN ROLF GARDELL Eleventh Respondent: ANTONY JOHN DUTHIE Twelfth Respondent: SIMON DAVID PILLAR Thirteenth Respondent: GEOFFREY JOHN HUTCHINSON Fourteenth Respondent: EUGENE WON SUH Fifteenth Respondent: JULIAN ALEXANDER BUCKLEY Sixteenth Respondent: PHILLIP MICHAEL BOWER Seventeenth Respondent: PEP ADVISORY III PTY LTD Eighteenth Respondent: UNITAS CAPITAL PTY LTD Nineteenth Respondent: AIG INSURANCE NEW ZEALAND LIMITED (NZBN 942 903 131 0048) Twentieth Respondent: ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED Twenty First Respondent: BEAZLEY SOLUTIONS LIMITED Twenty Second Respondent: CONTINENTAL CASUALTY COMPANY OF CNA OPEN BROKERAGE CLAIMS Twenty Third Respondent: HISCOX SYNDICATES LIMITED Twenty Fourth Respondent: NOVAE SYNDICATES LIMITED Twenty Fifth Respondent: BRIT SYNDICATES LIMITED Twenty Sixth Respondent: R J KILN & CO LIMITED Twenty Seventh Respondent: ASPEN MANAGING AGENCY LIMITED FIRST CROSS CLAIM First Cross Claimant: PACIFIC EQUITY PARTNERS PTY LIMITED Second Cross Claimant: EAGLE COINVESTMENT PTY LIMITED (AS TRUSTEE FOR PACIFIC EQUITY PARTNERS FUND III CO-INVESTMENT TRUST) Third Cross Claimant: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS FUND III (AUSTRALASIA) UNIT TRUST) Fourth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III (AUSTRALIA) UNIT TRUST) Fifth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS FUND III LP Sixth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III LP Seventh Cross Claimant: PEP INVESTMENT PTY LIMITED Eighth Cross Claimant: RICKARD JAN ROLF GARDELL Ninth Cross Claimant: ANTONY JOHN DUTHIE Tenth Cross Claimant: SIMON DAVID PILLAR Eleventh Cross Claimant: GEOFFREY JOHN HUTCHINSON Twelfth Cross Claimant: PEP ADVISORY III PTY LTD First Cross Respondent: PETER MURPHY Second Cross Respondent: NICK MONTAGUE Third Cross Respondent: GREGORY ELLERY Fourth Cross Respondent: JULIAN DAVIDSON SECOND CROSS CLAIM First Cross Claimant: UNITAS CAPITAL PTE. LTD. Second Cross Claimant: JOMARK INTERNATIONAL IV B.V. Third Cross Claimant: EUGENE WON SUH Fourth Cross Claimant: JULIAN ALEXANDER BUCKLEY Fifth Cross Claimant: PHILLIP MICHAEL BOWER Sixth Cross Claimant: UNITAS CAPITAL PTY LTD First Cross Respondent: PETER MURPHY Second Cross Respondent: NICK MONTAGUE Third Cross Respondent: GREGORY ELLERY Fourth Cross Respondent: JULIAN DAVIDSON THIRD CROSS CLAIM First Cross Claimant: PETER MURPHY Second Cross Claimant: NICK MONTAGUE Cross Respondent: INDEPENDENT LIQUOR (NZ) LIMITED FOURTH CROSS CLAIM Cross Claimant: GREGORY ELLERY Cross Respondent: INDEPENDENT LIQUOR (NZ) LIMITED FIFTH CROSS CLAIM Cross Claimant: JULIAN DAVIDSON Cross Respondent: INDEPENDENT LIQUOR (NZ) LIMITED SIXTH CROSS CLAIM First Cross Claimant: UNITAS CAPITAL PTE. LTD. Second Cross Claimant: JOMARK INTERNATIONAL IV B.V. Third Cross Claimant: UNITAS CAPITAL PTY LTD First Cross Respondent: AIG INSURANCE NEW ZEALAND LIMITED (NZBN 942 903 131 0048) Second Cross Respondent: ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED Third Cross Respondent: BEAZLEY SOLUTIONS LIMITED Fourth Cross Respondent: CONTINENTAL CASUALTY COMPANY Fifth Cross Respondent: UNDERWRITING MEMBERS OF LLOYD'S SYNDICATES 33, 2007, 2987, 4711 AND 510 IN RESPECT OF THE 2011 UNDERWRITING YEAR OF ACCOUNT SEVENTH CROSS CLAIM First Cross Claimant: PACIFIC EQUITY PARTNERS PTY LIMITED Second Cross Claimant: EAGLE COINVESTMENT PTY LIMITED (AS TRUSTEE FOR PACIFIC EQUITY PARTNERS FUND III CO-INVESTMENT TRUST) Third Cross Claimant: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS FUND III (AUSTRALASIA) UNIT TRUST) Fourth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III (AUSTRALIASIA) PTY LIMITED (AS TRUSTEE FOR THE PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III (AUSTRALIA) UNIT TRUST) Fifth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS FUND III LP Sixth Cross Claimant: PACIFIC EQUITY PARTNERS FUND III GP (JERSEY) LIMITED AS GENERAL PARTNER OF PACIFIC EQUITY PARTNERS SUPPLEMENTARY FUND III LP Seventh Cross Claimant: PEP INVESTMENT PTY LIMITED Eighth Cross Claimant: RICKARD JAN ROLF GARDELL Ninth Cross Claimant: ANTONY JOHN DUTHIE Tenth Cross Claimant: SIMON DAVID PILLAR Eleventh Cross Claimant: GEOFFREY JOHN HUTCHINSON Twelfth Cross Claimant: PEP ADVISORY III PTY LTD First Cross Respondent: AIG INSURANCE NEW ZEALAND LIMITED (NZBN 942 903 131 0048) Second Cross Respondent: ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED Third Cross Respondent: BEAZLEY SOLUTIONS LIMITED Fourth Cross Respondent: CONTINENTAL CASUALTY COMPANY Fifth Cross Respondent: UNDERWRITING MEMBERS OF LLOYD'S SYNDICATES 33, 2007, 2987, 4711 AND 510 IN RESPECT OF THE 2011 UNDERWRITING YEAR OF ACCOUNT EIGHTH CROSS CLAIM First Cross Claimant: EUGENE WON SUH Second Cross Claimant: JULIAN ALEXANDER BUCKLEY Third Cross Claimant: PHILLIP MICHAEL BOWER First Cross Respondent: AIG INSURANCE NEW ZEALAND LIMITED (NZBN 942 903 131 0048 Second Cross Respondent: ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED Third Cross Respondent: BEAZLEY SOLUTIONS LIMITED Fourth Cross Respondent: CONTINENTAL CASUALTY COMPANY Fifth Cross Respondent: UNDERWRITING MEMBERS OF LLOYD'S SYNDICATES 33, 2007, 2987, 4711 AND 510 IN RESPECT OF THE 2011 UNDERWRITING YEAR OF ACCOUNT