DOCUMENTS 2-13
32 Counsel for the applicant said that it was documents 2-12 that were very much in issue having regard to the higher public policy contention that the applicant wished to advance.
33 Documents 2-12 involve the law firm Allion Legal Pty Ltd.
34 By his affidavit filed 15 March 2012, Mr Harford states he is a director of Allion Legal Pty Ltd and a principal of Allion Legal in West Perth, where he practices primarily in the commercial and property law areas.
35 Mr Harford states that prior to his retention by Mrs Oswal to provide legal advice in relation to the subject matter of documents 2-12, he had previously been retained by her to provide legal advice in relation to the purchase of nine lots at 2 Bay View Terrace, Peppermint Grove in 2007 and the amalgamation of those lots and the purchase by her as trustee of the Shrikar Trust of farming land at North Dandalup, Western Australia in 2009.
36 Mr Harford says that, for the purpose of doing work for Mrs Oswal pursuant to the earlier property retainers, he communicated directly with Mr Allen and Mr Martin of DMG and those dealings with Mr Allen and Mr Martin included obtaining instructions from them, attending meetings with Mr Allen concerning the purchase of the properties and providing legal advice to Mr Allen and Mr Martin for the benefit of Mrs Oswal in relation to the purchase of the properties.
37 Mr Harford said that all client correspondence in relation to the property retainers was between him, or someone on his behalf at Allion Legal, and DMG including Mr Allen and Mr Martin.
38 Mr Harford says that in December 2010 he was retained by Mrs Oswal to provide legal advice in relation to a proposed mortgage over her properties at 2 Bay View Terrace, Peppermint Grove and 72 Philip Road, Dalkeith. The scope of the mortgage retainer was to:
(1) prepare mortgage documentation including a mortgage and discharge of mortgage;
(2) provide advice in relation to securing the monies to be advanced in relation to the proposed mortgage; and
(3) after he was instructed that the certificates of title could not be found in relation to Mrs Oswal's properties, to apply for replacement certificates of title.
39 Mr Harford says that during the course of doing work for Mrs Oswal for the purpose of the mortgage retainer, he did not speak directly with Mrs Oswal and, with the exception of documents 7 and 8, did not correspond directly with Mrs Oswal. In the case of each of documents 7 and 8, Allion Legal sent the communication directly to Mrs Oswal with copies to Mr Oswal and Mr Allen. Otherwise all communications were between him or someone on his behalf at Allion Legal and DMG, including Mr Allen and Mr Martin.
40 Mr Harford says the purpose of his communications, reflected by documents 2-12, was to provide legal advice to Mrs Oswal in relation to the mortgage retainer.
41 He says the first contact he had in relation to the mortgage retainer was a telephone call from Mr Allen shortly before he received the email from him which is document 2. He knew Mr Allen from his earlier dealings in relation to the property retainers.
42 At all times, he says, he assumed, due to the fact that they knew that they were for Mrs Oswal dealing with him and Allion Legal in their capacity as lawyers, that each of Mr Allen and Mr Martin would keep confidential all communications and correspondence for her which took place between them. Mr Harford states that in light of his duty as a lawyer to keep his client's affairs confidential he would not have communicated or corresponded with them otherwise.
43 As to a third party, Mr Sodum, to whom some documents were sent or copied, Mr Harford says that on 15 December 2010, he had a meeting with Mr Allen and Mr Sodum at the offices of Allion Legal in West Perth in relation to the mortgage retainer. At this meeting, he obtained further instructions from Mr Allen and Mr Sodum in relation to the preparation of the mortgage documentation and the two men also reviewed the draft mortgage and discharge of mortgage that Ms Sowden, his secretary, had sent on his behalf to Mrs Oswal on 13 December 2010.
44 Mr Harford states this meeting was the first time that he had met Mr Sodum and he does not recall what position Mr Sodum held at the time, but he was aware from the meeting and subsequent dealings that he worked for a company with which Mrs Oswal had a connection. He also recalls that at the meeting Mr Sodum gave him his email address and telephone number so that he could correspond with him on behalf of Mrs Oswal.
45 Mr Harford states that as requested by Mr Sodum on 16 December 2010, he sent an email to him which he enclosed a further revised draft mortgage and discharge of mortgage based upon his discussions at the meeting on 15 December 2010.
46 As with both Mr Allen and Mr Martin, he assumed based upon his meeting with Mr Sodum and subsequent communications and the fact that he knew that he was, for Mrs Oswal, dealing with him and Allion Legal in their capacity as lawyers, that Mr Sodum would keep confidential his communications and correspondence with him for Mrs Oswal. In light of his duty as a lawyer to keep his client's affairs confidential he would not have communicated or corresponded with Mr Sodum otherwise.
47 As to Mr Oswal, Mr Harford says that he asked his secretary, Ms Sowden, to send the emails which are documents 7 and 8 to him on his behalf. He also asked Ms Sowden to copy Mr Oswal in on his correspondence because he understood from acting for Mrs Oswal that he was her husband and the communications concerned current and future residential premises for Mr and Mrs Oswal and their family. He therefore assumed he had the same interest in the matter as she did and sent him copies for that reason.
48 As to document 13, Mr Harford states that this is in relation to a notice of dispute lodged by Limited Edition Luxury Homes Pty Ltd regarding the construction of Mrs Oswal's property at 2 Bay View Terrace. Shortly after receiving it, he telephoned Mr Allen and indicated he could not help him as he did not practice in construction law, and Mr Allen said words to the effect of "Okay".
49 For BFPL, counsel says the issue in dispute is whether the various documents were not of a confidential nature or whether there has been an act of waiver with the result that Mrs Oswal is not entitled to enjoy the privilege claimed. It is submitted the fact they were commonly addressed to a range of recipients suggests, in the absence of cogent evidence to the contrary, that they were not confidential communications between lawyer and client for the purpose of securing legal advice.
50 BFPL says the decision in Pratt Holdings may be distinguished as the communications in this case are no longer confidential. In addition, the communications were not passed for a limited purpose, unlike in Mann v Carnell.
51 As to the affidavit of Mr Harford, and his statement that he acted on an understanding that the third parties he was dealing with were acting as confidential agents of Mrs Oswal, it is submitted there is no direct evidence that either Mrs Oswal or the alleged agents confirming the nature of the relationship, including whether the agents were in fact acting on her behalf and, if so, whether on a confidential basis. Rather, the Court is asked to infer each element in circumstances where Mrs Oswal and/or the alleged agents could easily have put on direct evidence confirming the nature of the alleged engagement and any terms of confidentiality but have not done so.
52 The evidence is, it is submitted, that DMG were architects engaged in relation to the construction of a home owned by Mrs Oswal. There is, however, nothing more as to the nature of that engagement and nothing inherent in the relationship between property owner and architect which suggests an agency subject to confidentiality commitments. Indeed, a common role of an architect is to certify or administer the contract with the builder.
53 The applicant says there is even less evidence of the relationship between Mrs Oswal and Mr Sodum. BFPL submits that Mrs Oswal's justification for claiming privilege in relation to each contested document may be answered concisely as follows. The evidence does not support that Mr Sodum was the agent of Mrs Oswal. His duties were owed to his employer not Mrs Oswal personally and there is no direct evidence of any authority having been given to him. Mr Harford has merely assumed this occurrence in his affidavit which is evidence only of his state of mind.
54 As to document 13, the applicant submits the evidence before the Court does not support Mr Khanna, a third party, was the agent of Mrs Oswal. His duties were owed to his employer, not personally to Mrs Oswal and there is no direct evidence of any authority having been given to Mr Khanna. Again, Mr Harford has merely assumed this occurrence which is evidence only of his state of mind.
55 BFPL says that, in these circumstances, it is entirely appropriate for the Court to assess the purpose why each of the documents has been brought into existence. The Court should not be required to draw an inference as to the confidential nature of the alleged agency arrangements, particularly where direct evidence could easily have been put on. In the absence of such evidence and unless the content of various communications, when reviewed by the Court, discloses a basis for confidentiality obligations to be grounded, the Court should find the requisite degree of confidentiality has not been maintained.
56 BFPL further submits that, in relation to documents 2 and 7-11 which were expressed to relate to a "mortgage" and also in relation to documents 7 and 8 which refer to a "mortgage to secure advance from offshore finance provider" that were sent in the period 12 to 19 December 2010, the Court should take the view that these communications were designed to frustrate the processes of law and so will not be protected by legal professional privilege: AWB at [210] and [214]; In the Matter of ACN 005 408 462 Pty Ltd (formerly TEAC Australia Pty Ltd) [2008] FCA 964 at [15]-[16].
57 The applicant submits that on 24 December 2010 (shortly after the communications referred to concerning Mr Khanna) a mortgage was lodged in favour of Mercury Services Limited (Mercury) over properties at 2 Bay View Terrace, Peppermint Grove and 72 Philip Road, Dalkeith. The mortgage document shows that the address of the mortgagee, Mercury, is listed as PO Box 17398, United Arab Emirates or Apartment 4, Building 99, Jebel Ali, Dubai, United Arab Emirates. This address is, excluding the apartment number reference, the same address as the current address listed for Mrs Oswal and her husband, Mr Oswal, in recent Court documents filed by them and produced to the Court as attachments to the affidavits of Susan May Nicholas filed 21 March 2012 and Simon Guy Theobald filed 1 November 2011.
58 The applicant submits the mortgage document does not specify the amount of consideration (if any) given by Mercury, as mortgagee, nor the secured money which Mrs Oswal is liable to pay to Mercury. The solicitors for the applicant have corresponded with the solicitors for Mrs Oswal requesting an explanation, including whether Mrs Oswal, or any related entity, had any legal or beneficial interest in Mercury but no explanation has been forthcoming.
59 On behalf of Mrs Oswal in response to the latter submissions, it is said that the demand for an explanation was made in the context of a threat to commence proceedings to have the Mercury mortgage set aside in the absence of such an explanation and that no such proceedings have been commenced.
60 It is also submitted that there is no evidence:
(a) of the number of apartments in the building in question;
(b) of the reason why the consideration is not shown in the Mercury mortgage;
(c) that there was an obligation on the solicitors for Mrs Oswal to provide the explanation requested of them;
(d) of any connection between Mrs Oswal and Mercury; or
(e) of any involvement by Mrs Oswal in any intent to deceive creditors by the making of the Mercury mortgage.
61 In this particular proceeding, it is noted on behalf of Mrs Oswal, that she has expressly denied she was a director of Mercury and no allegation of fraud in respect of the Mercury mortgage or otherwise has been pleaded against her in these proceedings.
62 It is also submitted that the moving party must demonstrate by admissible evidence that objectively speaking communications were made in furtherance of an improper action before the claim to legal professional privilege will be ineffectual, and that it is not enough that documents may be or are relevant to some fraud or a crime: Franks v Warringah Council [2010] NSWSC 1318; Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 (Propend) at 556; The Attorney-General for the Northern Territory of Australia v Kearney (1985) 158 CLR 500 at 514.
63 Attention is also drawn to Exequatur Pty Ltd v Advanced Components and Peripherals Pty Ltd [1999] VSC 547 at [24] where Warren J (as her Honour then was) stated:
In the present matter the plaintiffs, in particular in the affidavit of their solicitor, Mr Petch, only go so far as to express suspicion, assertion and assumption. In Commissioner of Federal Police v Propend Finance Pty Ltd, supra, the views of Gaudron J were echoed by McHugh J at 556. In particular, McHugh J stated quite clearly that where an allegation of illegal purpose or fraud is made for the purposes of displacing a claim of legal professional privilege the party making the assertion bears the onus of proving the assertion. On the face of the affidavit material filed on behalf of the plaintiffs I cannot be so satisfied. More so, in Propend Finance, Gummow J at 576 referred to the classic statement by Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336, 361-362 that 'reasonable satisfaction' as to allegations of moral turpitude is required. The 'matrix of facts' put forward on behalf of the plaintiffs involve serious and sinister allegations. I cannot be satisfied on the face of the affidavits filed on behalf the plaintiffs that their concerns constitute any more than suspicion and assertion... Furthermore, in the course of considering the application by the plaintiffs for the setting aside of privilege in this matter, I observe that no allegation of fraud has been pleaded against the defendants by the plaintiffs in the further amended statement of claim.
64 I am satisfied that the claim made on behalf of Mrs Oswal to legal professional privilege in documents 2-13 is made out.
65 The fact that the documents - in every case emails - were copied to other persons does not, in my view, in the circumstances of this case, of itself indicate that the matters the subject of the emails were not confidential or that confidentiality has been waived.
66 Nor do I accept that, having regard to the evidence as a whole, the fact that the alleged agents, Mr Allen, Mr Martin, Mr Sodum, Mr Oswal and Mr Khanna have not put on affidavits is material. In my view, this is not a case where the so-called rule in Jones v Dunkel (1959) 101 CLR 298 applies. This is not a case where an answer is "required" in all the circumstances of the case: Schellenberg v Tunnel Holdings Pty Limited [2000] HCA 18; (2000) 200 CLR 121 at [51].
67 I am satisfied from the affidavit of Mr Harford that he understood at all times he was acting on behalf of Mrs Oswal and in fact was.
68 From both Mr Hardy's and Mr Harford's affidavits it is reasonable to infer that Mr Allen, Mr Martin and/or DMG acted as agents for Mrs Oswal in relation to both the construction law issues at 2 Bay View Terrace, Peppermint Grove and in relation to the mortgage retainer issues respectively.
69 In my view, it is also reasonable to infer from the affidavit of Mr Harford that Mr Sodum worked for a company connected with Mrs Oswal and was authorised to act as her confidential agent at all material times in relation to the mortgage retainer he accepted.
70 It is also reasonable to infer from Mr Harford's affidavit that Mr Oswal was authorised to receive communications on behalf of his wife, Mrs Oswal, which would be held confidentially by him. Certainly there is no reason to conclude that the act of copying some emails to Mr Oswal waived the privilege in those communications.
71 As to the copying of document 13, an email by Mr Allen to Mr Harford, copied to a Mr Khanna as well as to Mr Sodum and Mrs Oswal, the company search annexed to the affidavit of Peter Thomas Brabant, filed 15 March 2012, is that Mrs Oswal was a director at material times of Oswal Projects Perth Pty Ltd - a company which now bears the name of the third respondent. It is reasonable to infer Mr Khanna was associated with that company and document 13 was copied to him in that capacity. It is reasonable to infer, in all the circumstances, that he was under an obligation, understood by the terms of his engagement, to keep the communication confidential and there was no loss of confidentiality simply because it was copied to him.
72 Broadly speaking, documents 2-12 appear to be in relation to the mortgage retainer, the dominant purpose of which communications was for the purpose of providing legal advice from Mr Harford.
73 In oral submissions of counsel for BFPL, the main attack maintained was in relation to documents 2-12 is that any documents to do with the mortgage retainer should be viewed by the Court as documents in respect of which any privilege established is subject to the higher public policy consideration mentioned. The difficulty with this submission is that while it is generally stated on behalf of BFPL that the purpose of the mortgage instructions was to, in effect, defraud creditors, there is little, if anything, to support it. Questions as to what the mortgage dealing was all about may be raised, but nothing more. As stated in Propend, more than speculation is required about improper purpose before the Court will find that documents should be disclosed notwithstanding the fact that legal professional privilege would appear to attach to them. There is nothing to suggest that the documents in question are part of some fraudulent process.
74 Where, as here, solicitors are instructed to discharge a mortgage and prepare a new mortgage and provide advice to their client in relation to such matters, then do so, without more there is nothing to establish an allegation that the provision of the advice or the preparation of documents effects some fraudulent transaction, or indeed evidences some fraudulent intent or process on behalf of the client.
75 In accordance with the desire of the parties in this case I have also had regard to the confidential documents 1-13 that were provided to me in a sealed envelope in forming these judgments. In the result, I am satisfied that at all material times the documents 1-13 were documents provided for the purpose of the lawyers referred to providing legal advice to their client, Mrs Oswal. Nothing in the copying of some of the communications to or by persons who were not the client has resulted in the communication not being for the purposes of legal advice or any loss of confidentiality or waiver of privilege. At all times the person who caused documents to be provided to the lawyers were, by inference, the appointed, confidential agents of Mrs Oswal. Other persons to whom such communications were copied were also, by reasonable inference, agents or persons authorised by Mrs Oswal to receive those communications and to keep them confidential in her interests. No fraudulent transaction or intent is disclosed by the documents.