Clarke v Dixie Cummings Enterprises Pty Ltd

REASONS FOR JUDGMENT 1 This is an application under s 35A of the Federal Court of Australia Act 1976 (Cth) for the review of a decision of a Deputy District Registrar of the court made on 27 August 2013 in which the respondent's claim to resist the production of a document upon the ground of legal professional privilege was upheld, and in which the Registrar ordered the applicant to pay costs incurred by the respondent in connection with that claim after 16 August 2013. 2 The starting point for the determination of the privilege controversy was an order made by the court on 28 June 2013 in the following terms: The Respondent produce to the Applicant documents requested. The requested documents should be produced without delay and in any event in tranches with the final tranche to be produced prior to 4:00pm on 5 July 2013. If any requested document(s) can not be produced by 4:00pm on 5 July 2013, the solicitor for the Respondent must advise the court the reason(s) for non-compliance. In compliance with that order, on 1 July 2013, the respondent produced to the applicant a bundle of copy documents which included emails sent from and received by various employees of the respondent in January 2013. That was not problematic in itself, but the bundle of documents then provided was covered by an index, an item on which read: Further statement of Yasmin Hamad attaching copies of emails sent and received. The emails referred to in that description were those to which I have referred. 3 The statement of Yasmin Hamad referred to in the index was not provided to the applicant on 1 July 2013 or at any other time. Subsequently, the solicitors for the applicant made a request of the respondent to see that statement, which request was met with an indication that the statement had been referred to in the index by mistake, and with a claim that it was covered by legal professional privilege and was not required to be, and would not be, produced. 4 That gave rise to a controversy which the parties' solicitors subsequently played out in correspondence, and which came before the Registrar on 27 August 2013. As I have indicated, the Registrar upheld the respondent's claim to resist the production of Ms Hamad's statement and, in that context, he rejected the applicant's contention that circumstances existed which would have amounted to a waiver of the privilege on the part of the respondent. 5 The present application is, of course, by way of a hearing de novo. In such circumstances, the questions whether the document was privileged and, if so, whether the privilege has been waived arise afresh. The argument proceeded before me today on the basis that the document was prima facie privileged. Counsel for the applicant argued that the privilege had been waived by the production on 1 July 2013 of the emails referred to in the relevant entry in the index to the documents. I stress that it is not submitted on behalf of the applicant that there is any significance to the inclusion on the index of a reference to the statement: rather it was the provision of the emails which was said to have given rise to a waiver. 6 Counsel for the applicant relied upon what was said by the Full Court in Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341, 349 [61], where their Honours referred to what had been said by Allsop J (as he then was) in DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499, 519 [58], namely, that waiver arises when: … the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication. Although both the Full Court and Allsop J were concerned with issue waiver in the judgments referred to, counsel for the applicant was content to rely upon the principle to which Allsop J referred, namely, that the provision of the January 2013 emails on 1 July 2013 necessarily laid open to scrutiny the statement by Ms Hamad and involved an inconsistency between the provision of the emails, on the one hand, and the maintenance of the confidence in that statement, on the other. 7 I have looked at the emails, and I must say that it is quite impossible to see how the production of them by the respondent would necessarily lay open to scrutiny a statement by one of the participants in those emails which must otherwise be presumed to be covered by legal professional privilege. The emails appear to be unremarkable and, I would have to say, unrevealing communications between employees within the respondent's business. Even if it may be assumed that Ms Hamad's statement deals with the subject of the emails, it is commonplace in litigation that primary documents, which would conventionally be both discovered and produced, may be the subject of instructions or elaborations by those involved in them for the purposes of advancing or resisting a case in court. The circumstance that a statement of that kind may, and in the present case I am prepared to assume does, deal with the subject of the emails in some way does not give rise to a waiver of the privilege which is inherent in the statement. 8 Although, as I have said, this is a hearing de novo, I am content to adopt the conclusion which the Deputy District Registrar himself expressed about the potential for the production of the emails to give rise to a waiver of privilege in the statement. He said: [T]he production of emails which were attached to the Hamad statement, or the inclusion of a reference to the Hamad statement in the index of documents, do not amount to an assertion about the contents of the Hamad statement to the extent that privilege has been made. The emails are separate documents from the communication recorded in the Hamad statement, over which privilege has not been claimed by the respondent. 9 For those reasons, I propose to dismiss what I would describe as the substantive aspect of the present application for review. 10 There is, in addition, a procedural aspect to that application which needs attention. As I have said, one of the orders made by the Deputy District Registrar dealt with the question of costs, and did so adversely to the applicant. His reasons for making a costs order were expressed as follows: Even though the respondent's mistake in including the Hamad statement in the index of document appears to be the catalyst for the application, I see no reason for not exercising my discretion in relation to costs in the normal way; that is, that costs follow the event. However, to avoid uncertainty, the order for costs in favour of the respondent should be confined to those costs incurred after the application was made on 16 August 2013. 11 Regrettably, the Registrar's attention was not drawn to s 570 of the Fair Work Act 2009 (Cth) ("the Act"). The present is a proceeding in relation to a matter arising under the Act, in which circumstances, s 570(1) provides that a party must not be ordered to pay the costs of another party, save as provided for in s 570(2). Because the Deputy District Registrar's attention was not drawn to that embargo, he proceeded as though this was a case in the normal course, and ordered that costs follow the disposition of the event which had been before him. 12 On the present review, counsel for the respondent has sought to uphold the Deputy District Registrar's decisions on costs, and has also applied for costs on behalf of her client in the review itself. It is said that one or other of the exceptions for which s 570(2) of the Act provides has application to the present case. Specifically, it is said that the application before the Deputy District Registrar and the application for review, were both instituted without reasonable cause, and that the act of instituting those applications was an unreasonable act or omission on the part of the applicant which caused the respondent to incur its relevant costs. 13 So far as the proceeding before the Deputy District Registrar is concerned, the difficulty with this submission is that his attention was not drawn to s 570. Therefore, no submissions were made before him, and he made no findings, such as would attract the exceptions for which s 570(2) provides. That might not, of course, be fatal to the respondent now seeking to uphold the Deputy District Registrar's costs order under one or other of those exceptions, but that would, on any view, be an unusual and, in a number of respects, unsatisfactory course. It is sufficient, however, for me to say that, both with respect to the proceeding before the Registrar, to the extent that that might now be regarded as properly before the court, and with respect with the present application for review, I am not satisfied that either of the matters referred to paras (a) and (b) of s 570(2) of the Act has been satisfactorily established. 14 It is true that I have found that the applicant's resistance to the respondent's privilege claim was without substance, and it might even be said that I regard this as a clear case. On the other hand, I think there is a danger of the exceptions in s 570(2) being used in circumstances in which the most that one can say is that the losing party had a self-evidently weak case. In my opinion, that is not the kind of situation to which s 570(2) is addressed. There must be a higher level of criticism or disapprobation which the court is able to express about a losing party's case if the bars in paras (a) and (b) of s 570(2) are to be crossed by a party which succeeds on the application concerned. 15 For those reasons I consider that the costs order made by the Deputy District Registrar ought to be set aside, and that I should make no costs order with respect to the review presently before the court. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.