Australian Competition and Consumer Commission v Geowash Pty Ltd

1. There be leave to the parties to inspect the documents produced by MDS Legal in response to the subpoena issued in these proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 The Australian Competition and Consumer Commission (ACCC) seeks relief relating to the conduct of a franchise business known as Geowash. Proceedings have been commenced against Geowash Pty Ltd, the franchisor and, amongst others its sole director Ms Ali. The case is proceeding on the basis of a concise statement and affidavits. The matter is listed for final hearing commencing on 18 June 2018. Ms Ali was previously legally represented but now acts on her own behalf. 2 A number of Geowash franchisees have been represented by Ms Tamra Seaton of MDS Legal. There is no dispute that there have been communications between MDS Legal and the ACCC concerning Geowash franchises. 3 At the request of Ms Ali, a subpoena issued to MDS Legal to produce documents. Documents have been produced in response to the subpoena and a claim to legal professional privilege has been made in respect of all documents produced. An affidavit was sworn by Ms Seaton setting out the basis for the privilege claim. Ms Ali has also sworn an affidavit. 4 MDS Legal informed the Court that it was content for the privilege issue to be determined on the papers based upon the contents of the affidavit of Ms Seaton and my review of the documents in question. Ms Ali did not oppose that course. 5 I have determined that legal professional privilege does not apply to the documents that have been produced and that there should be leave to the parties to inspect the documents produced in answer to the subpoena. These are my reasons for that conclusion. 6 All of the documents produced are copies of communications by Ms Seaton of MDS Legal with officers of the ACCC. They were prepared by Ms Seaton while representing various Geowash franchisees. They are the records of those documents held by MDS Legal. Ms Seaton has deposed that each of her clients seeks to maintain privilege in the documents. 7 As to the documents, Ms Seaton says: 8. The documents in question comprise email correspondence between myself and representatives of the Applicant in the period 13 November 2015 to 12 September 2016. 9. Those emails were sent by me to the Applicant in the course of acting for various Geowash franchisees who had instructed MDS Legal in relation to legal issues regarding their franchise agreements with Geowash. 10. In the course of advising those clients in relation to matters regarding their dealings with Geowash and their franchise agreements, I had occasion to correspond with the ACCC in relation to matters relating to my clients and their dealings with Geowash Pty Ltd. … 13. The emails were some of a number sent to the ACCC, on behalf of my clients, to raise with the ACCC concerns which my clients had in relation to the conduct of Geowash Pty Ltd, and to provide further updates to the ACCC as to the position of my clients' disputes with, and complaints about, Geowash Pty Ltd. 8 The affidavit from Ms Ali produced correspondence between Ms Ali and MDS Legal and raised concerns about delay in the production of documents in response to the subpoena and the claim to privilege. In one letter, Ms Ali says that some of the emails between Ms Seaton and the ACCC have already been discovered and their primary purpose seems to have been communication between a legal representative and the ACCC. It is then said that the communications appear to have lost their confidentiality for legal professional privilege to attach in accordance with the principles in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1. 9 Ms Ali also produced a letter from MDS Legal in which the claim to privilege was expressed in the following terms: 6. A document is protected from disclosure and production on the ground of legal professional privilege, if the document is prepared for the dominant purpose of a lawyer providing legal advice or legal services (see Esso Australia Resources v FCT (1999) 201 CLR 49. 7. The principle as stated in that case is that: 'Legal professional privilege (or client legal privilege) protects the confidentiality of certain communication made in connection with giving or obtaining legal advice or the provision of legal services including representation and proceedings in Court'. 8. Clearly categories 1 and 2 of the Subpoena relates to correspondence between MDS Legal, as solicitors for various of its clients, and the ACCC in relation to matters for which MDS Legal was providing legal advice and legal services to its client(s). 9. Category 3 of the Subpoena appears to seek copies of any file notes or other internal documents of MDS Legal in relation to conversations between MDS Legal and the ACCC. … 12. To the extent you refer to the decision of Mann v Carnell, in our view, with respect, that decision is not applicable to this situation. 13. As I understand it, Mann v Carnell dealt with the issue of waiver of privilege by disclosure to a third party of otherwise privileged correspondence or documents. As I understand it the issue there dealt with a situation where communications between two parties, which were found by the Court in and of themselves to be subject to legal professional privilege, were considered as to whether that privilege had been waived when there had been communication of those correspondences to a third party. 14. The only communication in this sense, upon which you seem to rely, is the fact that the communication itself is between MDS Legal and a third party, the ACCC. That does not alter the claim for legal professional privilege. 10 It can be seen that MDS Legal appears to consider communications with the ACCC to not be communications with a third party for the purposes of waiver of privilege. 11 Ms Ali responded: MDS legal and the ACCC were corresponding in relation to evidence that has been filed and served in the matter. The involvement of MDS legal takes such correspondence beyond confidential communications with a witness in relation to the preparation of drafts of evidence that may or may not be filed. The involvement of MDS legal suggests that there was aspects of the communication that went to the terms on which these former franchisees agreed to provide such evidence to the ACCC and either the conditions that those witnesses imposed as a requirement of their participation or the incentives that these witnesses were offered in relation to their evidence. Importantly, MDS represents those former franchisees in proceedings against the current franchisor and the issues that the ACCC was investigating appear to substantially overlap with the defence that has been raised by those franchisees in that hearing. … The matters that you raise in relation to the application of Mann v Carnell miss the relevant principle, that privilege is lost when the communications are no longer confidential. Correspondence between legally represented parties is rarely confidential, and the circumstances of this particular communication between the law firm representing the former Geowash franchisees in legal proceedings establishes that the requisite confidentiality has been lost. 12 I have reviewed the documents produced in response to the subpoena. They are communications by Ms Seaton with the ACCC on behalf of various Geowash franchisees requesting that the ACCC investigate Geowash and then providing information in response to requests from officers of the ACCC. None of the documents contain a request for confidentiality. Some of the documents contain, in summary form, a chronology of information provided by individual franchisees concerning their dealings with Geowash. 13 All the documents (being printed versions of email communications and attachments) produced in response to the subpoena are documents that constitute or reflect communications by MDS Legal with the ACCC. They were brought into existence for the purpose of communicating their contents to the ACCC. They attach or include information provided by individual franchisees to MDS Legal. The information itself may have been provided for the purpose of MDS Legal providing legal advice to the franchisees. However, that information was then provided to the ACCC by including it in documents created for that purpose. 14 In the above circumstances, the documents produced on the subpoena were not brought into existence for the dominant purpose of providing legal advice to the franchisees. Nor did they involve the provision of legal advice to them. They do not fall within s 118 of the Evidence Act 1995 (Cth). 15 Further, the documents were provided to the ACCC for its purposes. The ACCC may have contemplated litigation. However, the documents were not brought into existence by MDS Legal for the dominant purpose of providing professional legal services relating to court proceedings in which its franchisee clients were, or were to be, parties. Therefore, they do not fall within s 119 of the Evidence Act. 16 The present case may be distinguished from those instances where a lawyer takes notes of a communication with a third party. In such cases, the file note record may be confidential and privileged even though the communication with the third party was not: Sugden v Sugden [2007] NSWCA 312 at [64]-[65], [74]. Here the documents produced in response to the subpoena embody the communications made to the ACCC. 17 Therefore, the application for leave to inspect should be granted. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.