By way of an amended notice of motion of 4 August 2015, National Australia Bank (the defendant) seeks to have two compulsory processes of the Court set aside. The first is a notice to produce of 7 July 2015 addressed to the defendant and seeking production of various documents. The second is a subpoena of 30 July 2015 addressed to the solicitors for the defendant, again seeking production of various documents. CBX2 Pty Ltd (the plaintiff) is the moving party with regard to each. Each is resisted on a number of bases by the defendant.
The matter came into my list as Duty Judge on 6 August 2015. As a result of the urgency of the matter (due to other motions between the parties that are to be heard shortly) the parties requested that I at least pronounce orders by the morning of 12 August 2015. In the event, I have found that I am able to provide my reasons for those orders as well, although it will be appreciated that they are not as comprehensive as they would have been if there had been no pressure as to time.
To state the background succinctly, by way of a statement of claim filed 19 August 2014, the plaintiff has claimed that the defendant engaged in various forms of wrongdoing. It is said in a nutshell that the defendant wrongfully permitted a Ms Evans to operate an account when she was not authorised to do so, to the detriment of the plaintiff; that the defendant failed to obey instructions given on behalf of the plaintiff with regard to the funds to which a particular cheque was to be applied, again to the detriment of the plaintiff; and that the defendant failed to fulfil various statutory duties, yet again to the detriment of the plaintiff.
With regard to the allegedly unauthorised operation of the account by Ms Evans, the statement of claim contains quite detailed particulars.
By way of a defence filed 19 September 2014, the defendant denies that it is in any way liable to the plaintiff.
Central material
To outline very briefly the most important evidence upon which the plaintiff relies, in support of the notice to produce the plaintiff submits that it is underpinned by a legitimate forensic purpose, and that it does not constitute a "fishing expedition". Those submissions are founded on para [3] of annexure K of the affidavit of Mr Sullivan, the solicitor for the plaintiff, of 5 August 2015, which in turn quotes from an affidavit of the solicitor for the defendant, Mr Delaney. That portion is as follows:
3. Affidavit of Samuel Peter Delaney dated 6 May 2015:
paragraph 12:
"Until about mid-November 2014, NAB continued with its investigation into the matters alleged in the SOC. As those matters related to events dating back to 1997, the investigation has taken time to carry out, and remains an ongoing exercise. NAB's investigation during late 2014 included:
(a) …;
(b) …; and
(c) interviews with Mr Craig Ball (referred to in paragraph 4 of the SOC) and Ms Nicole Evans (referred to in paragraph 15 of the SOC). Mr Ball is CBX2's former Accountant. Ms Evans was at all relevant times an employee of Mr Ball.
[emphasis added]
As for the subpoena addressed to the firm of solicitors, the plaintiff accepts that, generally, such a subpoena would be able to be resisted without difficulty on the basis that it seeks material that is the subject of client legal privilege. However, founded upon para [2] of the affidavit of Mr Tommy Man Tai Kam of 3 July 2015, the plaintiff submits that client legal privilege was waived, with the effect that the subpoena to the solicitors can be pursued.
That paragraph recounts the details of a telephone conversation between Mr Kam and Ms Evans on 12 November 2014. Due to the defendant claiming client legal privilege with regard to it for all and any purposes except for my determination of the motion, for abundant caution I shall not detail it further in this judgment.
Submissions about the notice to produce
In its original form, the schedule of the notice to produce was as follows:
You are required to produce the following documents or things to the court:
1. All file notes, statements, memoranda, summaries, emails, letters and all records and any other documents in respect to communications between any servant or agent of the National Australia Bank Limited and Ms Nicole Evans in the period from 1 June 2014 to date.
During discussion between Bench and Bar table, the plaintiff accepted the force of the submission of the defendant that in that form the notice to produce was far too broad, to the extent of being oppressive. By the end of the hearing, the plaintiff was content for its width to be markedly reduced, by way of its schedule being amended to read as follows:
All file notes, statements, emails, letters and any other documents directly recording communications between any servant or agent (not including internally or externally engaged lawyers) of the National Australia Bank Limited, engaged in an investigation of the management of the CBX2 account, and Ms Nicole Evans, in the period from 1 June 2014 to date, with regard to her operation of the CBX2 account.
The defendant submitted that, if it were amended in that way, the notice to produce would nevertheless capture communications between Ms Evans and something in the order of six bank officers. That would still involve, it was said, a significant exercise of searching for and retrieving documents. It was said, in short, that, even as amended, the notice to produce remains onerously broad.
The submission was maintained that the notice to produce to the defendant demonstrates no legitimate forensic purpose, and should be set aside on that basis as well.
Determination about the notice to produce
I reject both of those submissions of the defendant.
Turning first to legitimate forensic purpose, it can be seen from the pleadings that the question of whether the alleged unauthorised operation of the account by Ms Evans is to be laid at the feet of the defendant is squarely raised as a fact in issue between the parties in the proceedings. And the extract from the affidavit of the solicitor for the plaintiff that I have provided at [6] above shows that the plaintiff has established a reasonable expectation that documents of the kind sought by the narrowed notice to produce are in the possession of the defendant.
In short, I consider that the plaintiff has established a legitimate forensic purpose for the notice to produce as narrowed. I also accept that it constitutes neither a "trawling of the lake" nor a "fishing expedition"; rather, it is founded upon evidence that emanates from an affidavit of the solicitor for the defendant.
Secondly, to my mind the notice to produce in its latest proposed form is highly specific as to dates, persons, and subject matter. It is true that compliance with it will put the defendant to a degree of time, trouble and expense, but I am by no means satisfied that any of that will be oppressive.
In short, there is no question but that the notice to produce in its current form must be set aside. But without making formal orders about the topic, I consider that there is nothing standing in the way of the plaintiff urgently serving a further notice to produce that replicates the terms that appear above at [10], and having an answer to it. That is because I consider that a notice to produce in those terms possesses a legitimate forensic purpose, is not a fishing expedition, and is not unduly onerous.
In short, although my formal order will merely be that the notice to produce of 7 July 2015 must be set aside, I consider that the plaintiff is entitled to seek timely compliance with a narrower version of that process.
Submissions about the subpoena
Turning next to the subpoena, as I have said there was no dispute between the parties that client legal privilege could be relied upon by its recipient to resist production, pursuant to s 118 of the Evidence Act 1995 (NSW). The real question is whether client legal privilege has been waived.
It was agreed between the parties that the affidavit of Mr Kam was filed and served but never read. That affidavit, I was told, was served in the context of a separate interlocutory skirmish between the parties.
The parties agreed that the question of waiver of client legal privilege leads one to focus on s 122 of the Evidence Act 1995 (NSW), and, in these circumstances, s 122(3) in particular. They also agreed that it may lead one to consider whether s 126 has any application, in the sense of extending the alleged waiver beyond the particular revealed conversation.
The plaintiff submitted that service of the affidavit recounting the contents of a particular conversation between Mr Kam and Ms Evans of 12 November 2014 has the effect that the defendant (through its solicitors) has advisedly waived client legal privilege with regard to all communications between Ms Evans about the general subject matter of that conversation, and with any solicitor assisting in the representation of the defendant.
The defendant submitted that the revelation of a communication that is the subject of client legal privilege that is occasioned by a compulsory process of a Court, is not to be characterised as a waiver, pursuant to s 122(5)(a)(iii) of the Evidence Act. And it was said that compulsory service of affidavits that are proposed to be read, in accordance with Practice Notes and other mandatory regimes of pre-hearing disclosure, is captured by that principle. In support of that proposition, I was taken to a number of authorities; see, for example, the judgment of Mason P (with whom Priestly JA and Rolfe AJA agreed) in Akins v Abigroup Ltd (1998) 43 NSWLR 539, commencing at 545.
The defendant also relied upon the recent judgment of Davies J in National Australia Bank Ltd v C & O Voukidis Pty Ltd (No 2) [2015] NSWSC 258. It was said that the circumstances were identical: a litigant, as part of an interlocutory dispute, had revealed a conversation between herself and her solicitor in an affidavit that was served but not read. In that case, his Honour determined that client legal privilege had not been waived.
The defendant also invited my attention to the principle in Harman v Secretary of State for the Home Department [1983] 1 AC 280, recently discussed by the High Court of Australia of in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125, that every party to litigation gives an implied undertaking not to use or reveal compulsorily supplied material for purposes other than the litigation in question.
Finally, the defendant submitted that, quite apart from all of those matters, the subpoena is far too broad, and that compliance with it would be oppressive.
Determination about the subpoena
Each party invited me to Attorney-General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475 and Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1. But I have approached each of those cases with caution, for two reasons. First, each dealt with waiver pursuant to the common law, not the Evidence Act. Secondly, each dealt with implied waiver; here, the plaintiff is surely asserting that there has been an express waiver.
Separately, I reject the submission of the plaintiff that the defendant has waived client legal privilege with regard to all conversations between its solicitors and Ms Evans. To my mind, the most that could be said is that client legal privilege has been waived with regard to the particular conversation of 12 November 2014 recounted in the affidavit of Mr Kam. And because the conversation that is recounted is complete and requires no reference to other material to understand it, s 126 of the Evidence Act has no application.
Turning to the submissions of the defendant, I readily accept the proposition of the defendant that the authorities establish that compulsory service of a statement of a witness whom one proposes to call does not waive client legal privilege.
But to my mind the situation here is rather different: the affidavit under discussion is not generic, in the sense of being merely a statement of a witness, who is proposed to be called but who is ultimately not called, about certain events or observations. Rather, it can be seen that the contents of the affidavit itself advisedly reveal to the solicitors for the plaintiff the contents of a communication between a solicitor and a person to whom one can infer he was speaking for the purposes of the litigation in question. In other words, it is not the compulsory service that could be said to waive the privilege, it is the contents of the document itself that explicitly do so. Cases such as Akins do not determine the question.
Separately, the judgment of Davies J is, of course, highly persuasive, whilst not strictly binding. But I accept the submission of the plaintiff that it is readily distinguishable on its facts. I do so for three reasons.
First, as paras [1] and [38] of the judgment of his Honour show, the party claiming client legal privilege in that case frankly informed the Court that the contents of the affidavit in question were wrong. That meant that the opponent would have the benefit of the subpoena in any event, because that very damaging concession as to credit could be put to the claiming party in due course.
Secondly, as can be seen from paras [11], [30] and [38] of his Honour's judgment, the whole of the claim that underpinned the contents of the conversation with regard to which client legal privilege had allegedly been waived had been struck out. In that sense, the contents of the conversation that was said to be the subject of the waiver had become irrelevant to the facts in issue.
Neither of those circumstances applies here: there is no assertion that the contents of the affidavit of Mr Kam are wrong, and the conduct of Ms Evans is a very important part of the claim of the plaintiff.
Thirdly, his Honour referred at [40] to the judgment of Schmidt J in Banksia Mortgages Ltd v Croker [2010] NSWSC 535. In that case, the determination was that client legal privilege had indeed been waived. To my mind, that simply shows that questions of whether there has been a waiver of client legal privilege very often turn on their own facts.
In short I do not consider that the judgment of his Honour determines the question, because it is readily distinguishable on its facts.
Separately, counsel for the defendant accepted in discussion that (speaking entirely hypothetically) if Mr Kam denied the occurrence of the conversation in the witness box, his opponent would be entitled to put the contents of the affidavit to Mr Kam. If it is conceded that the affidavit is able to be used for that adversarial forensic purpose, it is difficult to see how it could be said that client legal privilege has not been waived to permit another forensic purpose; namely, compliance with a subpoena to produce documents.
As well as that, the fact that the affidavit was never "used' in the sense of being formally read is, to my mind, significant but not determinative. It is surely possible for client legal privilege to be waived without the revealed confidential communication being relied upon as evidence. And in any event, the affidavit was "used" in the more general sense of being served upon one's opponent as part of the process of adversarial, pre-trial skirmishing.
Finally, I consider that there is no question of the plaintiff contravening the principle in Hearne v Street. That is because it seeks to use an alleged waiver in the proceedings adversarially against the defendant in the same proceedings.
As I have said, the subpoena in its current form is founded on the incorrect proposition that there has been a waiver with regard to any discussions between any solicitors on behalf of the defendant with Ms Evans. Accordingly, the subpoena must be set aside.
Again, I shall not make formal orders about the subpoena that I consider would be appropriate. But on reflection, I have come to the view that, by advisedly serving the affidavit of Mr Kam upon the solicitors for the plaintiff, the solicitors for the defendant have "knowingly and voluntarily disclosed the substance of the evidence to another person", to use the precise words of s 122(3)(a). In doing so, I consider that they have waived client legal privilege with regard to that conversation only.
In light of the facts in issue revealed by the pleadings, and the extract that I have provided at [6] above, I consider that there is a legitimate forensic purpose in the plaintiff having access to documents that record prior statements that Ms Evans has made to other persons about one of the central issues in this dispute; namely, whether or not she was operating the account in question without authorisation. Because I consider that client legal privilege has been waived with regard to this particular conversation, those other persons include Mr Kam.
As well as that, there is nothing to suggest that a subpoena that is highly focused upon the particular conversation would be too broad or oppressive.
In short, the subpoena in its current form must be set aside. I shall not make any further formal order. But I consider that the plaintiff should be permitted urgently to issue, and have an answer to, a subpoena in the following form:
All documents (paper, electronic, or otherwise) directly recording the contents of the telephone conversation between Mr Tommy Man Tai Kam and Ms Nicole Evans of 12 November 2014 detailed at paragraph 2 of the affidavit of Mr Kam of 3 July 2015.
Costs
Neither party succeeded completely on the motion.
The plaintiff accepted that the notice to produce was too broad. The defendant failed in resisting the proposed narrow version of the notice to produce.
The plaintiff failed in asserting that, with regard to the subpoena, client legal privilege had been waived with regard to a multitude of possible conversations. The defendant failed in its submission that client legal privilege with regard to the particular conversation in question had not been waived.
In the circumstances, I consider that the appropriate costs order is that each party pay its own costs of the motion.
Orders
I make the following orders:
1. The notice to produce of 7 July 2015 in its served form is set aside.
2. The subpoena in its issued form of 30 July 2015 is set aside.
3. Each party must pay its own costs of the motion.
[3]
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Decision last updated: 19 August 2015