Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd

Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd - [2017] FCA 324 - FCA 2017 case summary — Zoe

[11]

Background to application 4 In 2012, the first defendant ("Whitebox") conducted index arbitrage trading on behalf of, and on the account of, the National Australia Bank Limited ("NAB"). The personnel of Whitebox who engaged in relevant order and trading activity on 18 October 2012 were the second defendant ("Mr Boshoff") and Simon Archer. 5 On 18 October 2012, the business press reported on a "sudden spike in the share price of a number of ASX 200 companies" that morning and quoted a statement by ASIC that "ASIC … is looking into the matter and has commenced enquiries with the market participants involved in trading in these stocks and related derivatives". 6 On the morning of 22 October 2012, Mr Boshoff and Mr Archer retained Thompson Eslick, a law firm of which Peter Thompson is the principal. NAB separately retained King & Wood Mallesons ("KWM") lawyers. 7 On 22 October 2012, ASIC issued a notice to NAB under s 33 of the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act") requiring the production of books in relation to suspected contraventions of s 1041B of the Corporations Act 2001 (Cth), the suspected contraventions being in relation to dealings in listed securities comprising the ASX S&P 200 Index on 18 October 2012. 8 By 23 October 2012, ASIC had commenced an investigation under s 13(1) of the ASIC Act into suspected contraventions of s 1041B of the Corporations Act by Mr Boshoff, Mr Archer and NAB in relation to trading on 18 October 2012 in listed securities comprising the S&P ASX 200 Index. The scope of the investigation was expanded on 16 November 2012, and was again expanded and amended on 5 August 2014. 9 By letter dated 26 October 2012, NAB produced documents to ASIC in response to the 22 October 2012 s 33 notice. Attached to the letter was a document called "Schedule A". Concerning Schedule A, the letter stated: Further, to assist ASIC in its understanding of events relevant to the Notice as they occurred on and immediately prior to 18 October 2012, NAB has prepared the document which forms Schedule A to this letter. The documents referred to in Schedule A are in the enclosed folder. The information in Schedule A is based upon NAB's present understanding of events. While NAB and its advisers have used best efforts to ensure the accuracy and completeness of this understanding, it has necessarily been derived from review of documents and information provided by staff (in particular Messrs Boshoff and Archer) in the limited time available. 10 The disputed documents, described in detail below, were created between 25 October 2012 and 17 December 2012. Documents 1 to 3, 6 and 12 came into ASIC's possession because they were provided to the regulator by NAB on 20 February 2013, in answer to a notice issued by ASIC to NAB on 6 February 2013 pursuant to s 33 of the ASIC Act. Document 7 was voluntarily produced to ASIC by NAB on 26 August 2015. Documents 4 and 5 were voluntarily produced to ASIC by NAB on 25 October 2015. 11 No consent was obtained from any of Mr Thompson, Mr Boshoff, Mr Archer or Whitebox prior to the provision of any of the disputed documents to ASIC. 12 During a review of documents produced by NAB, Ms Vucic, an officer of ASIC, identified that Mr Boshoff, as the author of one of the emails contained in two of the documents, had prefaced the text of his email with the words "LEGALLY PRIVILEGED AND CONFIDENTIAL". The relevant email forms part of the email chains comprised in documents 1 and 2 ("Boshoff email"). 13 On 5 June 2015, ASIC wrote to Mr Thompson asking whether Mr Boshoff claimed legal professional privilege in respect of the Boshoff email and, if so, to provide information to enable ASIC officers to decide whether the claim could be supported. On 15 July 2015, Mr Thompson asserted claims of "advice" privilege and "anticipated litigation" privilege on behalf of Whitebox, Mr Boshoff and Mr Archer over communications in the period from 22 October 2012 to 31 October 2012, which appear to have included the disputed documents, except documents 6, 7 and 12. Mr Thompson stated relevantly: First, the communications were confidential communications sent or received, or confidential documents prepared, at least, for the dominant purpose of: (a) Mallesons (and in-house legal counsel at NAB) providing legal advice to NAB and its authorised representatives working on its index arbitrage desk; and (b) from 22 October 2012, Thompson Eslick providing legal advice to Mr Boshoff, Mr Archer and Whitebox; in relation to the events of 18 October 2012 and ASIC's investigation of those events. The communications were therefore privileged under s 118 of the Evidence Act 1995 (Cth) ("Evidence Act") and at common law. 14 Mr Thompson sought: … ASIC's confirmation that the email exchanges attached with your letters will not be used or disclosed to any person or used in any way by ASIC or disclosed to any person, given that they are privileged and that privilege has not been waived. 15 By letter dated 3 March 2016, ASIC informed Mr Thompson that it did not accept that the legal professional privilege claims made by Whitebox, Mr Boshoff and Mr Archer could be supported. ASIC said relevantly: ASIC proposes to commence proceedings in the Federal Court against Whitebox and Mr Boshoff on 18 March 2016. Unless your clients have obtained orders preventing ASIC from doing so, ASIC will proceed to use the documents in respect of which those claims have been made, as well as [documents 6 and 7], for the purpose of those proceedings (including by considering whether to tender the documents). However, ASIC will not do so prior to 25 March 2016 in order to allow your clients time to take such steps as they are advised in the event they press their claims for LPP. 16 By letter dated 23 March 2016, Mr Thompson complained that ASIC had not provided reasons for ASIC's view that the claims for privilege cannot be supported. Relevantly, Mr Thompson also wrote: We confirm that our clients maintain that, for the reason given in our letter dated 15 July 2015: (a) the documents referred to in that letter were privileged under ss 118 and 119 of the Evidence Act 1995 (Cth) ("Evidence Act") and at common law at the time of their creation, such privilege being possessed by each of Whitebox, Mr Boshoff and Mr Archer; (b) the privilege has not been waived by any conduct of our clients; (c) the National Australia Bank ("NAB"), Whitebox, Mr Boshoff and Mr Archer had a common interest in the subject-matter of the communications; and (d) the provision of the documents by NAB to ASIC did not, and could not, effect any waiver of the privilege in those document held by Whitebox, Mr Boshoff and Mr Archer. 17 Mr Thompson's letter set out a detailed argument under the heading "ASIC must not use the documents over which privilege is claimed". In particular, the letter stated that Mr Thompson's clients would object, on the ground of legal professional privilege, to any attempt to put the disputed documents into evidence before the Court. The letter also said: Our clients object to ASIC disclosing or making any use of those documents, for any purpose, in the proceedings, including (without limitation) seeking to tender the documents, using them to instruct expert witnesses or otherwise referring to them in any pleading, evidence or other Court document. … Our clients again demand the immediate delivery to us of the original, and all copies, of the documents over which privilege is claimed which are or have been in ASIC's power, possession or control. Our clients maintain that the documents are confidential and privileged; call upon ASIC to respect and preserve and confidentiality and privilege; and do not consent in any way to any disclosure or other use of the documents which would be inconsistent with the preservation of confidentiality and privilege in the documents. We consider that, having been put squarely (and repeatedly) on notice of our clients' claims of privilege, it is incumbent upon ASIC to return the documents over which privilege is claimed and not to disclose or use the documents in any way, including for the purpose of the proceedings. We refer, by way of analogy, to the remarks of the High Court in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [64]-[67] concerning the obligations of litigants, and the professional obligations of their solicitors, to return privileged documents. … If ASIC wishes to obtain an early determination from the Court of our clients' claims of privilege, it is entirely a matter for ASIC to make any such application as it thinks fit. We put you on notice that, pending determination by the Court (at trial or earlier) of our clients' claims of privilege, any disclosure or use by ASIC of the documents, in the fact or our clients' continuing express objections, will be entirely at ASIC's own risk. 18 On 15 April 2016, Foster J made orders for the hearing of ASIC's application for an advance ruling. Order 9 required ASIC to inform the defendants, in respect of each disputed document, whether it seeks to tender the whole or any part of the document (and if so which part) at the hearing of the proceeding. 19 By letter dated 26 April 2016, ASIC informed Thompson Eslick that ASIC presently intends to tender or use in evidence the whole of documents 1, 2, 7 and 12, an email sent at 5:03 pm on 26 October 2012 that comprises part of document 3, and the emails to which Mr Boshoff and or Mr Archer were parties that comprise part of documents 4, 5 and 6.

[12]

Should the Court exercise its discretion to give a ruling or make a finding under s 192A? 20 At the hearing, Mr McHugh SC, senior counsel for Whitebox and Mr Boshoff, accepted that the "jurisdictional threshold" for exercising the discretion under s 192A had been satisfied. That is, it was not disputed that a question arose in the proceeding about the operation of a provision of the Evidence Act in relation to evidence proposed to be adduced. 21 Section 192A permits, but does not compel, advance rulings to be given on the admissibility of evidence: Bailey v Director-General, Department of Natural Resources [2013] NSWSC 515 at [55]. Whether the Court should make an advance ruling is "a discretionary case management decision": NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000 (No 4) [2012] NSWLEC 120 at [40]; Beslic v MLC Ltd [2015] NSWSC 908 ("Beslic") at [33]. In this Court, that directs attention to the overarching purpose identified in s 37M of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act"), namely to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. 22 The authorities indicate that "some good reason should be advanced in order that the court exercise jurisdiction under s 192A": Beslic at [33], quoting Lambert Leasing Inc v QBE Insurance Australia Ltd [2012] NSWSC 953 at [13]. It may, for example, be appropriate to give an advance ruling "if all matters relevant to the issue have been or can then be ascertained and if it is clear that a ruling will inevitably be required": TKWJ v The Queen [2002] HCA 46; (2002) 212 CLR 124 at [42] (Gaudron J). Further, the giving of a ruling, or the making of a finding, under s 192A may be appropriate where "a considerable amount of time, effort and money might be saved if the documents were ruled to be admissible now": ACCC v Allphones Retail Pty Ltd (No 3) [2009] FCA 1075; (2009) 259 ALR 541 at [12]. 23 In some cases, trial preparation may be assisted by an evidentiary ruling in advance of the trial, so as to justify departure from the procedure in the ordinary case of dealing with objections at or shortly before the hearing: Gondarra v Minister for Families, Housing, Community Services and Indigenous Affairs [2012] FCA 185; (2012) 127 ALD 288 at [25]. 24 A sound reason to refuse to give a ruling under s 192A may exist where the proceeding is in its infancy, the issues have not yet been joined because the pleadings have not closed, and it is uncertain whether the evidence sought to be the subject of the advance ruling will be relied upon at final hearing: cf. Trusted Cloud Pty Limited v Core Desktop Pty Limited [2015] FCA 33 at [56] to [57]. 25 ASIC put forward the following reasons for why the Court should exercise the discretion conferred by s 192A: (1) The issue that has arisen in relation to the potential use of the disputed documents is one that has arisen at the insistence of the defendants that the documents are subject to legal professional privilege. Notwithstanding ASIC's invitations to do so, the defendants have declined to take any action to make out those claims, nor do they assert any right to maintain the confidentiality of the documents or to obtain remedies flowing from any breach of any obligation of confidentiality. In correspondence with ASIC, the defendants have asserted that because they claim privilege over the disputed documents, ASIC should not use the documents for any purpose in these proceeding. Although it is not under any obligation to do so, ASIC has taken the approach that it will not use the disputed documents except for the purpose of its s 192A application, pending an early determination of that application. An early determination of the issue will therefore address the claims of the defendants and will allow all parties to prepare for the hearing of the substantive proceeding. The exercise of the Court's discretion to give the ruling sought would therefore enable necessary issues to be determined and its exercise at this stage of the proceeding would aid the efficient preparation, by all parties, of the proceeding for hearing, reflecting the overarching purpose of civil practice as articulated in s 37M of the Federal Court Act. (2) The disputed documents came into ASIC's possession because they were provided to it by NAB. The situation is analogous to ASIC having come into possession of documents by reason of having issued a subpoena to NAB. In such a situation, a claim for privilege by the defendants would, as a matter of course, be determined at an interlocutory stage, and well in advance of a final hearing, as most privilege disputes are. ASIC's s 192A application is being used as a vehicle to determine whether the disputed documents are subject to client legal privilege, and the application accords with the commonly pursued, and efficient, practice of determining privilege disputes in advance of final hearings. (3) Thirdly, because a different judge has been assigned to this aspect of the proceeding, determination of the s 192A application poses no risk to the impartiality of the judge who will preside at the hearing and determine the substantive proceeding (which may be a concern in other kinds of s 192A applications: cf Adam v The Queen [2001] HCA 57; (2001) 207 CLR 96 at [52]). 26 The defendants argued that it is premature and inappropriate for the Court to give an advance ruling in this case. They submitted that, unless or until ASIC determines whether, how, when and why it will use the disputed documents in evidence in the proceeding, there is a substantial likelihood that the defendants' claim of privilege need never be determined. They argued that the time and resources of the Court and of the parties should not be expended upon the determination of a claim for privilege which does not assist in the preparation for trial and does not advance the just resolution of the proceeding as quickly, inexpensively and efficiently as possible. 27 The defendants made the following contentions: (1) A ruling under s 192A can have utility, and increase efficiencies in the preparation for trial, only if ASIC demonstrates that the disputed documents are relevant to an issue of fact in the substantive proceedings and will be used by ASIC in some identified way to advance its case in the proceedings. ASIC has failed to demonstrate either matter, by evidence or by submission. Without identification of the relevance of the disputed documents and the use that will be made of them by ASIC in the proceedings, no useful purpose would be served in giving a ruling under s 192A in respect of documents that may never be relied upon at trial. (2) The analogy with the procedure adopted following the production of documents to the Court in answer to a subpoena is not apt. Upon production to the Court, the subpoenaed documents are in the control of the Court and it is necessary for the Court to rule upon any claim for privilege before granting access to the documents, irrespective of whether or not the documents are relevant to any fact in issue or will be used in evidence by any party in the proceedings. By contrast, the giving of a ruling under s 192A is a matter of discretion and of case management. It does not advance the efficient management of the proceedings for the Court to give such a ruling where the party seeking the ruling has not established that the documents are relevant to an issue in the proceedings and that the documents will be used in a particular way at trial. (3) The defendants' objection to ASIC using the disputed documents in the substantive proceedings does not prevent ASIC from identifying for the Court, by evidence on the present application, why ASIC wishes to rely upon the disputed documents at trial and how and for what purpose it intends to do so in the event that ASIC succeeds on its present application. After all, ASIC claims to have made the decision, according to its own submissions, to tender the disputed documents. That decision must have been made on an informed basis. ASIC cannot have it both ways. (4) It is incorrect to say that the defendants have taken no action to make out their privilege claims. They were under no obligation to seek orders to vindicate their claims. ASIC seeks an advance ruling and must persuade the Court that there is a proper reason to give that ruling. (5) In the absence of an explanation of the relevance of the particular documents, it is difficult to know whether it is appropriate to rule at all. Defences have not been filed and the issues in the proceeding have not been identified. 28 The defendants argued that the appropriate course is either to refuse ASIC's application under s 192A or to adjourn it until such time as ASIC determines whether, how, when and why it will seek to use the disputed documents in evidence in the proceeding. 29 I am satisfied that it is appropriate to give a ruling on the question identified by ASIC for the following reasons: (1) ASIC wishes to know whether it is prevented from adducing the disputed documents in evidence, which is a matter of obvious relevance to its trial preparation including ASIC's assessment of the strength of its case. The documents are of apparent relevance to the claims that ASIC seeks to prove. The proceedings are civil penalty proceedings and it is prudent for ASIC to assume that it will need to prove every fact necessary to make out its claims. I do not accept that more is required to conclude that a ruling is likely to advance the efficient management of the proceedings. (2) All matters relevant to the ruling are now known and it is convenient to give a ruling in the light of the continuing dispute between the parties about whether the documents are protected by privilege. (3) The defendants have not pointed to any prejudice arising out of an advance ruling, apart from the costs of the application. (4) Courts commonly determine questions of privilege well in advance of the trial, albeit typically in the context of discovery or production of documents under subpoena. 30 Accordingly, I will now consider the legal principles governing the application of ss 118 and 119 of the Evidence Act.

[13]

Law concerning client legal privilege 31 Section 118 of the Evidence Act provides: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer; or (b) a confidential communication made between 2 or more lawyers acting for the client; or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 32 Section 119 provides: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or (b) the contents of a confidential document (whether delivered or not) that was prepared; for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. 33 Section 122 provides, relevantly: (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120. … (5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because: … (b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or (c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court. 34 The party claiming privilege bears the onus of proving by admissible evidence that the communication was undertaken, or the document was brought into existence, for the dominant purpose of the party being provided with legal advice or being provided with legal services relating to proceedings or anticipated proceedings. In Grant v Downs [1976] FCA 63; (1976) 135 CLR 674 at [28], Stephen, Mason and Murphy JJ said: It is for the party claiming privilege to show that the documents for which the claim is made are privileged. He may succeed in achieving this objective by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by resort to any verbal formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.

[14]

Dominant purpose 35 In AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at [44(1)], Young J said: The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs (1976) 135 CLR 674 at 689; Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 60 ATR 466 at [30]; and AWB v Cole at [63]. 36 The test of what is a "dominant purpose" is an objective test, but the subjective intention of the person responsible for the document coming into existence is entitled to weight: cf. Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways Ltd [2005] NSWCA 47 ("Sydney Airports Corporation") at [6] (Spigelman CJ, Sheller JA and Campbell AJA agreeing). In Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49, at 107 [172], Callinan J said: Whether a purpose is a dominant purpose is, in my view, a matter to be objectively determined but the subjective purpose will always be relevant and often decisive. (Footnotes omitted.) 37 The dominant purpose will not necessarily be ascertained by reference solely to the intention of the author of the document or solely to the intention of the individual upon whose instructions the document was brought into existence: Sparnon v Apand Pty Ltd (1996) 68 FCR 322 ("Sparnon") at 328. In Sparnon, Branson J contemplated that the intentions of the superiors of the individual upon whose instructions a document was brought into existence could be relevant. 38 The requisite purpose is a dominant one in the sense of the "ruling, prevailing or most influential purpose", or the "paramount" purpose: AWB Ltd v Cole (No 5) at [44(5)]; Sydney Airports Corporation at [7]. If two purposes were of equal weight, one would not dominate the other: Sparnon at 328. 39 A "but for" test may be used to ascertain whether a particular purpose is a dominant purpose. Thus, in Sparnon at 328, Branson J expressed the view that, if the decision to bring the document into existence would have been made irrespective of any intention to obtain professional legal services, it was doubtful that the purpose of obtaining professional legal services could be regarded as the dominant purpose for the making of the document.

[15]

Common interest 40 The defendants noted that, where it exists, a "common interest" operates as an exception to the waiver of client legal privilege under s 122(5)(c) of the Evidence Act and to the waiver of legal professional privilege at common law. The defendants argued that the existence of a common interest may be a circumstance relevant to the purpose for which communications were made. 41 In Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 at 279, Giles J explained common interest privilege at common law as follows: If two parties with a common interest exchange information and advice relating to that interest, the documents or copy documents containing that information will be privileged from production in the hands of each; thus, if one of the parties obtains a letter of advice attracting legal professional privilege and provides it to the other, the other can also claim legal professional privilege. 42 At 280 and 282, Giles J expressed the view that it is not necessary to have a common solicitor in order to attract common interest privilege. 43 The passage above was cited, with evident approval by Sheller JA (Wardell AJA agreeing) in Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 611-612. 44 In Marshall v Prescott [2013] NSWCA 152, Barrett JA, McColl and Ward JJA agreeing, explained common interest privilege as follows: [57] If a document in which legal professional privilege subsists is given to someone else so that the content ceases to be confidential, the privilege is usually lost. This is because the act of giving is, in the particular circumstances, inconsistent with any continuing intention to maintain confidentiality: Mann v Carnell (above) at [13]. An exception operates, however, where the person entitled to the privilege and the person to whom the content of the document is made known have such a commonality of interest in relation to the subject matter of the privilege that sharing of the content is consistent, rather than inconsistent, with an ongoing intention to preserve confidentiality and privilege. Questions of common interest privilege usually arise (as here) when litigation is on foot or foreshadowed. The present case does not raise the question whether the concept extends beyond the litigation context. [58] Common interest privilege was described by Lord Denning Mr in Buttes Gas & Oil Co v Hammer (No 3) [1981] QB 223 at 243 as a privilege in aid of anticipated litigation in which several persons have a common interest. He said: "There is a privilege which may be called a 'common interest' privilege. That is a privilege in aid of anticipated litigation in which several persons have a common interest. It often happens in litigation that a plaintiff or defendant has other persons standing alongside him - who have the self-same interest as he - and who have consulted lawyers on the self-same points as he - but these others have not been made parties to the action. Maybe for economy or for simplicity or what you will. All exchange counsels' opinions. All collect information for the purpose of litigation. All make copies. All await the outcome with the same anxious anticipation - because it affects each as much as it does the others. Instances come readily to mind. Owners of adjoining houses complain of a nuisance which affects them both equally. Both take legal advice. Both exchange relevant documents. But only one is a plaintiff. An author writes a book and gets it published. It is said to contain a libel or to be an infringement of copyright. Both author and publisher take legal advice. Both exchange documents. But only one is made a defendant." 45 At [60], Barrett JA noted that it is not necessary that the parties have a common solicitor for common interest privilege to arise. Nor will a presently existing common interest be destroyed by the circumstance that there is potential for future divergence of interests (at [62]). 46 At [65], Barrett JA concluded: Normally, disclosure of protected content by the holder of the privilege causes the privilege to be lost. This is because of the inherent inconsistency between failing to safeguard the confidentiality essential to privilege and, at the same time, seeking to maintain the immunity that the privilege confers. Where there is, in relation to actual or pending litigation (or its course or outcome), a commonality of interest between, on the one hand, a party to the litigation who is also the holder of the privilege and, on the other, the person to whom disclosure of the privileged content is made by that party for a purpose relevant to that litigation, the commonality of interest supplies a rational basis for inferring an intention that the party's confidentiality should continue and the party's privilege should be maintained, even though the subject matter of the disclosure has passed into the hands of the other person.

[16]

Relevance of common interest in this case 47 In Whitebox's outline of submissions dated 9 August 2016, the following argument was put: (1) from 22 October 2012 to at least 17 December 2012, there was a common interest between NAB, Whitebox, Mr Boshoff and Mr Archer in relation to the ASIC investigation and the litigation that was anticipated to follow that investigation; (2) by reason of that common interest, the sharing of documents between those parties did not involve the waiver of any privilege held separately by each of them; (3) the relevant communications between NAB or KWM on the one hand and Whitebox, Mr Boshoff, Mr Archer and Thompson Eslick were communications by which instructions were sought and received which enabled Thompson Eslick to advise Mr Boshoff and Mr Archer concerning the events of 18 October 2012 and how best to deal with the publicised concerns of ASIC about those events; (4) the instructions were sought and obtained in the presence of, or copied to KWM or legal staff at the NAB on the basis that there was an acknowledged common interest with the NAB which allowed those instructions to be shared with the NAB and its external and internal lawyers; and (5) accordingly, each of the disputed documents is privileged under either or both of s 118 or 119 of the Evidence Act. 48 It is not obvious that propositions (1) to (4) support the conclusion in proposition (5). It is also far from clear that the evidence supports propositions (3) and (4). 49 In Whitebox's submissions in reply, it is argued that: (1) at the time of the creation of the disputed documents, NAB, Whitebox, Mr Boshoff and Mr Archer shared a common interest in the subject matter of the documents, namely in responding to ASIC's investigation and in addressing the perceived risk of legal proceedings being instigated by ASIC against them; (2) because of the common interest of the clients in receiving legal advice and legal services from their respective solicitors, in relation to the same subject matter and as part of an agreed joint defence strategy, the two dominant purposes are to the same effect and are not mutually exclusive; (3) the existence of a common interest may be a circumstance relevant to the purpose for which communications were made; (4) in this case, both clients have the same dominant purpose, or a dominant purpose to the same effect and directed to the same joint objective, in the creation or exchange of the document or communication; (5) thus, there is no difficulty in concluding that the relevant purpose, assessed from the perspective of either or both of the clients, is the "ruling, prevailing, or most influential purpose" of the document or communication; and (6) the relevant dominant purpose, shared by the NAB and by the defendants (and Mr Archer) was to obtain legal advice or legal services (albeit from different solicitors) in connection with the preparation of a document to be provided to ASIC as part of a joint defence strategy agreed between the NAB and the defendants (and Mr Archer) to address the perceived risk that ASIC might conclude that the events of 18 October 2012 involved a contravention of the Corporations Act and that legal proceedings would be commenced against the NAB and either or both of the defendants (and Mr Archer). 50 I accept that, at the time of the creation of the disputed documents, NAB, Whitebox, Mr Boshoff and Mr Archer shared a common interest in responding to ASIC's investigation and in addressing the perceived risk of legal proceedings being instigated by ASIC against them. 51 I also accept Mr Thompson's uncontradicted affidavit evidence, set out at [60] below, about the "joint defence strategy" adopted by NAB, Mr Boshoff and Mr Archer. It is not clear that the joint defence strategy involved, as Mr McHugh SC suggested, the provision by the parties of a single document to ASIC. As it turned out, Schedule A was provided to ASIC by NAB (and not also by Mr Boshoff and Mr Archer) in response to a s 33 notice directed to NAB. 52 Mr McHugh SC accepted that, while the Evidence Act contemplates common interests in s 122, the defendants nevertheless have to justify their claims by reference to s 118 or s 119. However, he argued that two sets of lawyers with two different sets of clients, both wanting the same thing, may have the same purpose. I accept that this proposition is correct, at least theoretically.

[17]

Client legal privilege in this case 53 For s 118, Mr McHugh SC put his argument principally on the basis of s 118(c), that is, that the evidence would result in disclosure of the contents of a confidential document prepared by the client (Mr Boshoff or Mr Archer) or another person (NAB or KWM). 54 For s 119, the case was that the evidence, if adduced, would result in disclosure of a confidential communication between the client (Mr Boshoff or Mr Archer) and another person (NAB or KWM) or the contents of a confidential document. 55 ASIC did not dispute that the disputed documents variously would meet the requirements of s 118(c) or s 119(a) or s 119(b) to the extent that, if adduced, they would result in disclosure of a confidential communication between the parties specified in s 119(a) or the contents of a confidential document of the kind specified in s 118(c) or s 119(b). ASIC also accepted that legal proceedings were anticipated when the disputed documents were created, and that Whitebox, Mr Boshoff, Mr Archer and NAB had a common interest related to those anticipated legal proceedings. 56 ASIC's case was that the disputed documents were not created for the requisite dominant purpose of Whitebox, Mr Boshoff and Mr Archer being provided with legal services (whether legal advice or legal services relating to anticipated legal proceedings). 57 Mr Thompson gave uncontradicted evidence that the disputed documents: … were all created for the dominant purpose of me giving legal advice to Mr Boshoff and/or Mr Archer in relation to the ASIC Investigation and/or me providing legal services to them in relation to a proceeding which I and they anticipated ASIC might bring against them, Whitebox and NAB, in relation to the events of 18 October 2012. 58 Mr Thompson also gave evidence, in relation to the emails contained in documents 1 and 2, that they were communications: … requesting or providing information for the purposes of me advising Mr Archer and Mr Boshoff, and me providing professional legal services to them relating to an anticipated proceeding … 59 In relation to the emails in the email chains contained in documents 1 and 2 to which Mr Thompson was not a party, Mr Thompson deposed that: I was aware that those email communications were taking place, because I was still having discussions with Mr Morris at that time concerning the strategy of dealing with ASIC and I was of the view that those communications were for the same purposes I have identified … above, and thus protected by the same umbrella of common interest privilege that had been in place throughout the process described … above. 60 Mr Morris is a partner of KWM. 61 Mr Thompson said, as to the communications that occurred in the period from 22 October 2012 and 31 October 2012, that they were: … confidential communications where I was being provided with: (a) instructions and information for the purpose of me providing legal advice to Mr Boshoff and Mr Archer, who were my clients at the relevant time; and (b) information, and where I was providing information and advice when providing legal services to Mr Boshoff and Mr Archer, for the purpose of preparing a document to be provided by NAB to ASIC, as part of an agreed joint defence strategy between my clients, Whitebox and NAB, to address the then-perceived risk (that was held by NAB, its legal representatives, Messrs Boshoff and Archer and Whitebox and me) that ASIC would conclude that the events that occurred on 18 October 2012 from the activities of the NAB Index Arbitrage desk, constituted "market manipulation" and other market misconduct in breach of the [Corporations Act] and that legal proceedings would be commenced against NAB and one or more of Whitebox, Mr Boshoff and Mr Archer. 62 Mr Thompson is a senior legal practitioner and I accept his evidence as to matters that are within his knowledge. However, Mr Thompson's evidence must be evaluated by reference to the disputed documents themselves and having regard to the circumstances in which the documents were brought into existence as well as the extent to which the evidence discloses Mr Thompson's role in connection with the creation of the documents. 63 Mr Thompson was not the author of any of the disputed documents. Nor are any of the relevant communications from either of Mr Boshoff or Mr Archer to Thompson Eslick. There is no evidence from any of the persons who sent or authored the emails which comprised the disputed documents (apart from document 12). Mr Thompson does not suggest that he procured the creation of any of the documents. Although Mr Thompson says that the documents were confidential communications "where [he] was providing information and advice", he did not provide information and advice through the medium of the confidential communications because none of the disputed documents contains any communication by or on behalf of Mr Thompson. I understood this aspect of Mr Thompson's evidence to mean that the communications occurred in the context of Mr Thompson's provision of legal advice. 64 Taking these matters into account, Mr Thompson's evidence about the purpose of the documents has relatively little weight. 65 As Mr McHugh SC explained the documents, they were created while the defendants, represented by Mr Thompson, were trying to work out how to defend themselves against proceedings anticipated to be brought against them by ASIC, and, to that end, they participated in a process, working collaboratively with NAB and its lawyers, in the course of which the disputed documents were created. 66 Although Mr McHugh SC referred to the defendants as Mr Thompson's clients at the relevant time, the evidence was that Mr Thompson's clients were Mr Boshoff and Mr Arthur, rather than Whitebox and Mr Boshoff. ASIC did not suggest that anything turns on this distinction.

[18]

22 and 23 October 2012 67 When Mr Boshoff and Mr Archer retained Mr Thompson, Mr Boshoff told Mr Thompson that NAB's lawyers were KWM and that the responsible partner was Mr Morris. Soon after he was retained, Mr Thompson had a telephone conversation with Mr Morris in which one of them said words to the effect of: … we should speak on the basis that this call is all privileged and there is a common interest between our clients in discussing what's happened with ASIC's investigation. 68 In this conversation, or a conversation on 23 October 2012, Mr Morris told Mr Thompson that NAB had been served by ASIC with a notice under s 33 of the ASIC Act. From this conversation, Mr Thompson was aware that ASIC was conducting an investigation, at least in relation to NAB. 69 Also on 22 October 2012, Mr Thompson telephoned Neil Owen of ASIC and discussed with him an approach that Mr Thompson understood had been made by ASIC to interview Mr Boshoff and Mr Archer concerning events on 18 October 2012 at NAB. 70 Later on 22 October 2012, Mr Thompson had another telephone conversation with Mr Morris and again one or other of them made a statement that the call was occurring on a common interest privilege basis, and the other agreed. 71 Mr Thompson also briefed Mr Livingston, barrister, including by the provision of the press reports referred to at [5] above. 72 Mr Thompson gave evidence, which I accept, as to the views that he formed by the evening of 22 October 2012 about the prospect of litigation brought by ASIC against his clients, NAB and Whitebox (and, from 24 October 2012, against Mr Archer) and as to the common interest of NAB, Whitebox and Mr Boshoff (and, from 24 October 2012, Mr Archer) in respect of ASIC's investigation and in the anticipated litigation. 73 On 23 October 2012, Mr Thompson had a meeting with Mr Boshoff and Mr Archer which was also attended by Mr Morris and another KWM lawyer, Simon Burnett, as well as Ian Craig of Thompson Eslick. At the commencement of the meeting Mr Morris said words to the effect of: This meeting is all taking place under a common interest privilege. Everything we say will be privileged and confidential. 74 Mr Morris produced a document at the meeting entitled "Subject to Legal Professional Privilege - KWM draft - 23/10/12 - topics for discussion with Whitebox staff". 75 During the meeting, Mr Thompson received some detailed instructions from Mr Boshoff and Mr Archer. 76 Also on 23 October 2012, Mr Thompson had a telephone conversation with Mr Owen of ASIC. Subsequently, he received notices for Mr Boshoff and Mr Archer to attend for examinations pursuant to s 19 of the ASIC Act on 24 October 2012 at 2:00 pm and 3:00 pm. Mr Thompson sent copies of the notices to Mr Morris on 24 October 2012.

[20]

Document 7 79 Document 7 is an email entitled "NAB/IndexArb - trading on 8/10/12 - Subject to Legal Professional Privilege". The email dated 25 October 2012 12:57 am. The sender is Mr Morris; the addressees are Mr Boshoff, Mr Archer and Mr Thompson, as well as Christopher Leberne (General Counsel, Wholesale Banking at NAB), Andrew Stevenson (General Manager, Group Market Risk at NAB), Martha Georgiou (General Manager, Operational Risk and Compliance, Products and Markets at NAB), Chris Rogers (Senior Legal Counsel at NAB) and Damian Murphy (Chief Risk Officer, NAB). It is copied to Mr Burnett of KWM and another person apparently within KWM (Rosalind Persaud). 80 Document 7 refers to an attachment entitled "11247603_1 NAB - Whitebox - 18 October Trading Summary.docx" that does not form part of document 7. The email proposes that the addressees review and comment upon the attachment with certain specified aims. 81 Mr Thompson said that he used the process propounded in document 7 to obtain instructions from Mr Boshoff and Mr Archer so that he could give them legal advice. Mr Thompson also gave evidence of the purposes of the collaborative process described in document 7, namely: (1) so that Mr Thompson could provide legal advice to Mr Boshoff and Mr Archer (and KWM could provide legal advice to NAB) concerning the events of 18 October 2012 and the best way to engage with ASIC in its investigation; and (2) so that Mr Thompson could provide professional legal services to Mr Boshoff and Mr Archer (and KWM could provide professional legal services to NAB) relating to civil or criminal proceedings for alleged market misconduct which he and KWM anticipated ASIC might bring, or cause to be brought against NAB, Whitebox, Mr Boshoff and Mr Archer relating to the events of 18 October 2012. 82 Mr McHugh SC contended that document 7 is a communication that was made or a document that was prepared for the dominant purpose of both NAB being given legal services in relation to anticipated proceedings and Mr Boshoff and Mr Archer getting legal services in relation to such proceedings. In support of the contention that there was a single dominant purpose of the kind he identified, Mr McHugh SC argued that document 7 shows the parties trying to provide a single document to ASIC in order to deal with the anticipated proceedings. 83 Mr McHugh SC argued that the fact that a person makes a confidential communication for the purpose of advancing his or her own interest and being advised in relation to that interest is not inconsistent with a conclusion that the dominant purpose of the communication includes the provision of legal services to someone else with a common interest who is being represented by a different lawyer. That may be correct. Ultimately, the dominant purpose of a communication is a question of fact. 84 I accept that document 7 reveals a collaborative effort involving NAB, Mr Boshoff and Mr Archer to prepare a single document. However, the language of document 7 reveals that it was prepared for the dominant purpose of KWM providing legal advice to NAB and not for the dominant purpose identified by Mr McHugh SC. That purpose that I have identified is explicitly stated in the first two paragraphs of document 7 and is reinforced by the reference to "NAB's privilege in the draft document" in the fifth paragraph. 85 The stated purpose of the communication, insofar as it is made to Mr Boshoff, Mr Archer and Mr Thompson, is to obtain their assistance to confirm the facts that will inform KWM's advice to NAB. This appears from the second paragraph. 86 The fourth paragraph shows that the author of document 7 contemplated a claim of legal professional privilege that would be made by NAB over the attachment to document 7, and that "NAB's privilege" would not be waived by provision of the document to Mr Thompson. The stated belief that NAB "shares a common interest privilege" with the "index arb team" (which appears to refer to Mr Boshoff and Mr Archer) supports a conclusion that the author had an intention to preserve the confidentiality of the communication. It does not entail that the purpose of the communication included a purpose of Mr Thompson providing legal advice to his clients although the provision of legal advice by Mr Thompson was a likely consequence of the communication. 87 At least as a matter of subjective intention, there is nothing in document 7 to suggest that the author had a purpose concerning the provision of legal services or legal advice by Mr Thompson to Mr Boshoff or Mr Archer. 88 There is no evidence, apart from Mr Thompson's bare statement concerning an "agreed joint defence strategy" that, by the time that document 7 came into existence, the parties had decided to provide a document to ASIC. Document 7 suggests that the document attached to it was being created for a different purpose, namely the provision of advice to NAB. Mr Thompson's evidence, set out at [811] above, does not refer to the provision of a document but only to providing advice about "the best way to engage with ASIC". 89 I do not accept that the parties had decided to provide a document to ASIC by the time that document 7 came into existence. 90 I accept that document 7 would not have come into existence but for the fact that Mr Boshoff and Mr Archer had retained Mr Thompson. However, in my view, that fact is not determinative of the question of the document's dominant purpose. Mr Thompson was a party to the communication because KWM recognised that Mr Thompson had been retained by Mr Boshoff and Mr Archer, and not because the document was created for a purpose connected with the provision of legal services by Mr Thompson. To the extent that I am wrong in this conclusion, any such purpose was subsidiary to the dominant purpose of KWM providing legal services to NAB.

[24]

Document 2 97 At 10:10 am, Mr Stevenson sent an email (the second earliest email in the chain of emails comprising document 2) to Mr Boshoff and Mr Archer, copied to Peter Whitelaw (General Manager, Group Market Risk, NAB), Ms Georgiou, Mr Murphy, Mr Leberne, Mr Morris and Mr Rogers. It is entitled "LEGALLY PRIVILEGED AND CONFIDENTIAL - Basis". I infer that this title was inserted by Mr Stevenson, the title to the previous email sent by Mr Boshoff being only "Basis". 98 The 10:10 am email thanks Mr Boshoff for "your attached document" and says "You write about decision making during this period …". The email contains a request for information from Mr Stevenson to Mr Boshoff. 99 Mr McHugh SC submitted that this would be appear to have been a privileged communication that is being quoted by Mr Stevenson. 100 At 11:06 am, Mr Boshoff responded with an email commencing "LEGALLY PRIVILEGED AND CONFIDENTIAL". This is the email referred to by Ms Vucic as the "Boshoff email". Mr Boshoff's response was addressed to Mr Stevenson and Mr Archer and copied to Mr Whitelaw, Ms Georgiou, Mr Murphy, Mr Leberne, Mr Morris and Mr Rogers. 101 Mr McHugh SC submitted that, on any view, Mr Boshoff's dominant purpose in sending this email was to be defended by Mr Thompson. Mr Boshoff's email refers to a table provided by KWM. I accept that, in sending this email, Mr Boshoff was seeking to contribute to the collaborative process which led to NAB sending Schedule A to ASIC. However, having regard to the addressees of the email (who comprise NAB officers and Mr Morris of KWM, but not Mr Thompson), I do not accept that Mr Boshoff's dominant purpose was as identified by Mr McHugh SC. Rather, Mr Boshoff's dominant purpose appears to have been to provide information to NAB so that NAB could obtain legal advice from KWM. 102 At 2:42 pm, Mr Stevenson sent a further email to Mr Boshoff and Mr Archer, copied to Mr Whitelaw, Ms Georgiou, Mr Murphy, Mr Leberne, Mr Morris, Mr Rogers and Mr Burnett. Mr Stevenson requested a further calculation saying "I think this is relevant to our presentation to ASIC". 103 At 3:19 pm, Mr Stevenson sent a third email to Mr Boshoff and Mr Archer, copied to Mr Whitelaw, Ms Georgiou, Mr Murphy, Mr Leberne, Mr Morris, Mr Rogers and Mr Burnett. Mr Stevenson requested another calculation. 104 Mr Boshoff responded at 3:44 pm in an email sent to Mr Stevenson and Mr Archer, copied to Mr Whitelaw, Ms Georgiou, Mr Murphy, Mr Leberne, Mr Morris, Mr Rogers and Mr Burnett. 105 In the afternoon, after discussions with Mr Morris and Mr Burnett, Mr Thompson had a telephone conversation with Mr Boshoff and Mr Archer. There was then an email exchange, which Mr Thompson identifies as disputed documents 3, 4 and 5 "and included in" document 6.

[25]

Document 3 106 Document 3 is a chain of two emails. The earlier email is dated 26 October 2012 4:58 pm and is from Mr Rogers, Senior Legal Counsel at NAB, to Mr Morris, copied to Mr Burnett. In the email, Mr Rogers tells Mr Morris that NAB needs certain information. Mr McHugh SC sought to rely on the terms of the earlier email, which stated: We need confirmation that Simon [Archer] and Hannes [Boshoff] are happy that the document attached is correct and are ok for us to provide it on an open basis to ASIC. 107 The later email in the chain is dated 26 October 2012 05:03 pm and is entitled "FW: Emailing: Schedule A". The sender is Mr Morris. The addressees are Mr Boshoff and Mr Archer. The email is copied to Mr Thompson, Mr Burnett and Mr Leberne. The message is headed "Confidential communication". The message requests Mr Boshoff and Mr Archer to "Please call Peter about providing this response ASAP". Peter is a reference to Mr Thompson. The message appears to refer to the possibility of providing to ASIC the document attached to the email which is marked "Schedule A". 108 From this email chain, it is plain that by 26 October 2012, NAB had decided to prepare the document that eventually became Schedule A. It is possible that Schedule A is an iteration of the draft document referred to in document 7. As I have noted earlier, Schedule A is an iteration of document 12. 109 Mr McHugh SC submitted that document 3 is clearly for the purpose of bringing into effect the strategy that both sides had been pursuing as a joint defence strategy. That is, they agreed to create a persuasive document to give to ASIC to explain what had occurred. In order to do that, each side needed the other and the dominant purpose of the later email was to enable both sides to be able to fulfil that strategy. 110 Despite Mr Thompson's evidence, document 3 reveals that the purpose of the later email is to obtain the information identified by Mr Rogers to Mr Morris in the earlier email. That is, the purpose of the later email is to respond to NAB's earlier email. The documentary evidence does not refer to a joint defence strategy. 111 In any event, the existence of a joint defence strategy of the kind described by Mr Thompson does not compel a conclusion that the dominant purpose of document 3 included Mr Boshoff and Mr Archer being provided with legal advice or legal services relating to anticipated legal proceedings. In my view, the dominant purpose of document 3 was the promotion of NAB's interests. That conclusion is based primarily on the fact that the later email was authored by Mr Morris, who was then acting for NAB, in response to an email request from NAB's Senior Legal Counsel. The words "confidential communication" reflect the author's intention to protect the communication from waiver of privilege on the ground of common interest. They do not reflect an intention to claim privilege on behalf of Mr Boshoff or Mr Archer, for whom Mr Morris was not acting.

[26]

Documents 4, 5 and 6 112 Documents 4 and 5 are each email chains containing emails responding to Mr Morris's email that is the later email in document 3. 113 Document 4 includes an email from Mr Boshoff to Mr Morris sent on 26 October 2012 at 5:05 pm and an email from Mr Morris, sent at 5:08 pm to Mr Leberne, Mr Rogers, Mr Murphy, Mr Whitelaw, Ms Georgiou, Mr Stevenson and Mr Burnett. 114 Document 5 includes an email from Mr Archer to Mr Morris sent on 26 October 2012 at 5:05 pm and an email from Mr Morris, sent at 5:14 pm to Mr Leberne, Mr Rogers, Mr Murphy, Mr Whitelaw, Ms Georgiou, Mr Stevenson and Mr Burnett. 115 Document 6 is an email chain that relevantly includes the email from Mr Archer to Mr Morris sent on 26 October 2012 at 5:05 pm that forms part of document 5. 116 The 26 October 2012 letter from NAB to ASIC, referred to at [9] above, was sent to ASIC shortly after the last emails in documents 4 and 5 were sent. There is an email, forming part of document 6 but which is not the disputed portion of that document, from Mr Rogers to Mr Morris and copied to several NAB officers, sent at 26 October 2012 5:23 pm and referring to the provision of the 26 October 2012 letter to ASIC. None of Mr Thompson, Mr Boshoff and Mr Archer is copied into this email. 117 Mr McHugh submitted that the emails from Mr Boshoff (in document 4) and from Mr Archer (in document 5) are communications that were in furtherance of the joint defence strategy. He submitted that the dominant purpose of those communications was to enable Mr Thompson to defend Mr Boshoff and Mr Archer on the basis of the strategic document that was being sent to ASIC to persuade ASIC that there was no problem. 118 I accept that these emails were sent by Mr Boshoff and Mr Archer respectively in pursuit of the joint defence strategy. However, as for document 3, that fact does not entail a conclusion that the dominant purpose of each email was being provided with legal advice or legal services relating to anticipated legal proceedings. In each case, the email was sent directly to Mr Morris, without being copied to Mr Thompson. In my view, the dominant purpose in each case was simply to confirm to NAB's lawyers the accuracy of Schedule A and to permit the document to be sent to ASIC.

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