Clifford v Vegas Enterprises Pty Ltd [2010] FCA 36 | Case summary

The copy of Mr Pickup's Affidavit 14 The applicant makes a claim for privilege in respect of a document that he describes in his affidavit of discovery sworn 19 October 2009, as "copy of affidavit of Harvey Eastwood Pickup dated 5 November 2008". It is common ground that the applicant in the Family Court of Western Australia proceeding at the hearing sought to tender Mr Pickup's affidavit as evidence in the proceeding. However, the tender was the subject of an objection on behalf of the wife as to its admissibility. The trial Judge reserved her decision as to its admissibility. I am informed, and it is common ground, that the proceedings were subsequently settled between the applicant and his wife and so there was no need for the question of admissibility of the affidavit finally to be ruled upon by her Honour. 15 In their written submissions the second and third respondents say that "there is no doubt that a copy of the Pickup Affidavit was provided to the Family Court and to [the wife] and her lawyer". 16 Little express information is to be gained from gleaning the various affidavit materials before this Court in relation to this current notice of motion in regard to the history of circulation of the affidavit. I proceed though on the basis, generally accepted by the parties before me, that the Family Court of Western Australia did not make any formal case management or other orders requiring the applicant to prepare the affidavit and/or file and serve the affidavit for the purpose of the hearing. Rather, it appears that a decision was made in the course of the litigation by or on behalf of the applicant, as husband in the proceeding, to seek to tender the evidence of an expert accountant, Mr Pickup, in relation to financial matters - including it seems the shares that are central to the proceedings in this Court and were in issue, amongst other things, in that proceeding. 17 I also proceed on the basis that it may properly be inferred, particularly from the objection as to the admissibility of the affidavit by counsel for the wife in the Family Court of Western Australia proceeding, that at the time of the tender the affidavit of Mr Pickup was given to the wife through her solicitors or counsel. 18 In these circumstances, the respondents contend that, if not at the time of the making of the affidavit - when the applicant must have intended that it be used as evidence in the Family Court of Western Australia proceeding - then at least at the point at which it was tendered and provided to the wife and her counsel and/or solicitors, the document did not attract any litigation privilege, or in the alternative, that any such privilege was waived. 19 The respondents submit that it matters not that the affidavit was not formally received into evidence at any relevant point in the Family Court of Western Australia proceedings. At the point of preparation or tender and production to the wife or her lawyers it did not attract client privilege; or such privilege was waived. 20 In making these submissions, counsel for the second and third respondents relies in particular on the Full Federal Court decision in Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547; 254 ALR 198; [2009] FCAFC 32 (Cadbury Schweppes). 21 The applicant however resists the claim that he has no privilege in the affidavit of Harvey Pickup or that privilege has been lost or waived. 22 The applicant also suggests there are grounds for an issue estoppel because the Court has previously upheld a claim to privilege in respect of communications with the lawyers for the wife in relation to the Family Court of Western Australia proceedings when earlier dismissing the applicant's application for compliance with discovery orders on 30 September 2009. 23 That latter particular submission may be dispensed with quickly. Plainly there is no common issue in respect of which a ruling has been made that results in the respondents now being estopped from seeking discovery of Mr Pickup's affidavit. There has been no ruling made in respect of the Pickup affidavit to this point. Rather, there has been continuing disputation concerning the discovery of the affidavit and the parties have in fact been moving cautiously to the point where this ruling is now required. 24 The more substantive submission made on behalf of the applicant as to why privilege still attaches to the Pickup affidavit concerns the question of waiver. The applicant says that in the affidavit of discovery he made it plain that he sought Mr Pickup's financial advice not only for the purposes of the Family Court of Western Australia proceedings, but also in relation to the possible legal action between him and the parties in these proceedings. In the applicant's continuing list of discoverable documents, sworn 19 October 2009, at [2(b)(iv)] concerning Mr Pickup's affidavit, the applicant states this: Following the email mentioned in paragraph 2(b)(i) above and the without prejudice meetings mentioned in paragraphs 2(b)(ii) and (iii) above, having not had any resolution of my claims and in contemplation of having to commence these proceedings and also to deal with financial issues in the property settlement proceedings my former spouse had commenced in the Family Court of Western Australia, I instructed Leach Legal to obtain an expert's report from a Mr Harvey Pickup ('Pickup Report') in order to take legal advice on and about the acquisition of the Vegas shares. 25 He says that the tender of the affidavit of Mr Pickup in the Family Court of Western Australia proceedings was therefore only a limited waiver for the purpose of those proceedings and cannot constitute a waiver in respect of the proceedings that have subsequently been instituted and are now in this Court between these parties. In this regard, the applicant relies on Bell Group Ltd (In Liquidation) v Westpac Banking Corporation (1998) 86 FCR 215; 166 ALR 699; (1998) FCA 849. 26 The first issue to be dealt with, however, before waiver is considered, is whether the affidavit of Mr Pickup attracts any client privilege at all. In this regard, the recent decision of the Full Federal Court (Mansfield, Kenny and Middleton JJ) in Cadbury Schweppes is referred to by the parties. Cadbury Schweppes concerned the principles of legal professional privilege and the operation of those principles in relation to a final version of a witness statement or proof of evidence intended at the time of its creation to be filed in court and served upon an opponent to existing litigation and then in fact so filed and served pursuant to an order of the Court: Cadbury Schweppes at [2]. 27 In December 2005, the ACCC commenced proceedings alleging price fixing and unlawful market sharing against Visy and certain current and former officers of Visy. 28 The Cadbury proceeding commenced in December 2006, with Cadbury making allegations against Amcor, certain of which were in relation to the same subject matter as that of the ACCC proceeding against Visy. Amcor subsequently cross‑claimed against Visy. 29 In December 2006, in the ACCC proceeding, Heerey J made a number of orders that included a requirement that the ACCC file and serve any proofs of evidence of lay witnesses on which it proposed to rely by 30 June 2007. That requirement was attended by a further order that the content of a proof of evidence or witness statement would be subject to the same implied undertaking as to confidentiality as applies to a document produced upon discovery. 30 Subsequently, some 111 finalised proofs of evidence were filed and served by the ACCC on Visy in the ACCC proceedings. 31 Judgment was subsequently pronounced in the ACCC proceeding by Heerey J in November 2007, without a trial being conducted, but after facts had been agreed between the parties. The makers of the finalised proofs of evidence were never called to give evidence and the proofs were not introduced into evidence in the ACCC proceedings. 32 In November 2007, in the Cadbury proceeding, Gordon J ordered that Visy file and serve a list of witness statements served on it by the ACCC in the ACCC proceedings and that Visy be released from the implied undertaking directed by Heerey J in the ACCC proceeding. At that point, the ACCC claimed legal professional privilege in the finalised proofs of evidence in the hands of Visy. 33 The Full Court, at [13], noted that: The primary judge decided that the privilege held by the ACCC in its finalised proofs of evidence was lost when the ACCC filed and served the witness proofs on Visy in the ACCC proceeding in compliance with the order of Heerey J. Justice Gordon, in her Honour's reasoning, stated that 'it was agreed between the parties that the only issue to be resolved is whether the ACCC waived privilege when it, at the direction of the Court, filed the documents and served them on Visy' … . Accordingly, her Honour did not address the question of whether the finalised proofs of evidence in question were privileged upon their creation and immediately prior to their service on Visy, or whether the service of each finalised proof of evidence was itself a separate communication which attracted legal professional privilege. An issue arose before us as to whether agreement was in fact reached between the parties or the concession made by Cadbury, in terms of that recorded by the primary judge. We will return to this matter later. 34 The Full Court, at [34], noted that there has been some controversy over whether litigation privilege is confined to communications or whether it extends to documents themselves, the need for confidentiality in "litigation privilege", and the independent existence of "litigation privilege" itself. 35 The Court, at [35], considered that as to confidentiality it thought that the scope of the confidentiality arising from the litigation privilege was different from advice privilege, because, when dealing with third parties such as potential witnesses, unless there is a separate confidentiality agreement with such third parties, such potential witnesses would be free to discuss with others their potential evidence. However, for the purposes of the appeal no definition or investigation of the outer boundaries of the ambit of litigation privilege needed to be undertaken. 36 At [37], the Full Court observed that whatever is the extent of confidentiality arising from litigation privilege one element of confidentiality is essential, namely non‑disclosure to one's opponent. The Full Court noted at [37]: To say (as does the ACCC) that the finalised proofs of evidence were created and served for the existing litigation can be accepted. However, in our view it is impossible for litigation privilege to attach to the finalised proofs of evidence, when the finalised proofs of evidence were created for the purpose of serving them on the ACCC's opponent and when they were in fact served on that opponent. 37 The Full Court, at [38], explained that the rationale for litigation privilege is different from that of advice privilege and rests on the basis that, in the adversarial system, the legal representatives and their clients generally control and decide for themselves which evidence they will use at trial, without any obligation to make disclosure to the opposing party or parties of the material required in the preparation of the case. At [43], the Full Court noted that with the introduction of case management principles some of the adversarial elements of the common law pre‑trial processes have been removed or tempered. However, a party still has the option of deciding what evidence to put before the Court and what witnesses to call in support of his or her case. 38 The Full Court, at [45], identified the documents the subject of the privilege claim before it to be "finalised proofs of evidence in the possession of Visy - not proofs of evidence (copy or otherwise) in the possession of the ACCC or those filed in the Court". As such, the Court said their attention was on the creation of the finalised proofs of evidence and their service upon Visy. The Court accepted that generally one would ask what was the intended use or uses of the finalised proofs of evidence, which accounted for their being brought into existence, and in this regard referred to Pratt Holdings Pty Ltd v Federal Commissioner of Taxation (2004) 136 FCR 357 at [35]; 207 ALR 217; [2004] FCAFC 122, per Finn J (Pratt Holdings). The purpose of creating a finalised proof of evidence to be served on the opposing party in existing litigation is, said the Court at [45], "quite different from, say, the creation of a version of a proof of evidence prepared for the purpose of only being used by counsel for the taking of the viva voce evidence of a witness in court". Equally, said the Court, the purpose for creating the finalised version of the proofs of evidence is different from the purpose for preparing drafts of proofs of evidence. Such proofs of evidence to be used by counsel and drafts of proofs of evidence would be privileged in the normal course of events. 39 The Full Court, at [46], mentioned that the question of whether one focuses on the time of the creation of the finalised proofs of evidence or their subsequent communication to Visy "does not appear to matter in this case, as there was no suggestion that the purpose for which they came to exist changed or was different between those two times". The Court noted that the relevant time might be the time of communication, not creation of the document: see GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at [34], per Holmes J. 40 The Full Court, at [47], noted that the implied limitation on use of the finalised proofs of evidence by Visy, once received, was not relevant to the present appeal. The appeal was concerned with such confidentiality as might have arisen in the circumstances from any legal professional privilege enjoyed by the ACCC in the finalised proofs of evidence. The Court noted that the decision in Harman v Secretary of State for Home Departments [1983] 1 AC 280 gives rise to an implied undertaking to the Court not to use documents accessed or any information contained in them through the litigation process otherwise than for the legitimate purposes of the litigation. That comprises an obligation that the Court may modify or discharge: see Hearne v Street (2008)235 CLR 125; [2008] HCA 37. On the other hand, legal professional privileges are common law rights the rationale for which is different from that supporting the existence of the implied undertaking. 41 At [51], the Full Court noted that there is no element of compulsion as to the nature and content of the evidence to be adduced where an order is made providing for the service and filing of witness statements, as in the case of the orders made by Heerey J in the ACCC proceeding. 42 The Full Court, at [53], noted that the finalised proofs of evidence were created and served for the dominant purpose of use in existing litigation, but were obviously not to remain confidential as far as Visy was concerned. Rather, they were intended to be provided to Visy. Accordingly, the Court held, at [54], that the disclosure was not made on a relevantly confidential basis, although made expressly with the protection of the 'implied undertaking'. 43 At [55], the Full Court noted that as the subject matter of the appeal was the finalised proofs of evidence in the possession of Visy, and not copies of them, say, in the hands of the ACCC, no issue of waiver arose. If, for instance, the finalised proofs of evidence in the possession of Visy were no longer available, and copies in the hands of the ACCC were sought, a question of waiver may arise in those circumstances having regard to the service of the finalised proofs of evidence. But that was not the position before the Court. In other words, the very documents that had been given to Visy were the ones subject to discovery, not copies of them in the hands of the ACCC. 44 The Full Court considered that the fact that a pleading under the Rules of the Court may become public and be inspected, but that a filed proof of evidence may not be without the leave of the Court, was not to the point. At [63], that Court stated that once a document in question is intended to be given to an opposing party, it is not a document in which privilege subsists. As a matter of principle, this was sufficient to conclude that no privilege attached to the finalised proof of evidence in that case. 45 At [64], the Full Court could see no distinction for the purposes of the appeal between final affidavits and finalised proofs of evidence. The Court added: Importantly, whether it be an affidavit, witness statement or finalised proof of evidence, the purpose in serving and filing is not within the rationale of litigation privilege once disclosed to an opposing party. This is because, if the privilege is to protect the confidential communication between one party and that party's legal advisers as to the evidence that might be led at trial, the very giving of such information to the opposing party flies in the face of the rationale for the continued existence of the litigation privilege. 46 At [72], the Full Court distinguished State Bank of South Australia v Smoothdale (No 2) Limited (1995) 64 SASR 224, which appeared to stand for a different proposition, on the basis that the purpose of witness statements in issue in that case was the consideration by the legal representatives of the parties which caused them to be created for use in the proceedings. 47 At [73], the Full Court drew a distinction between drafts and final proofs, noting that the "essential character" of a final proof of evidence is to make disclosure to the opponent and the Court of the evidence which is proposed to be led at trial. While the document may be prepared because of the Court order for disclosure, the fact remains that the purpose of the party preparing and delivering a final version is to give advance notice of what evidence that party proposes to put before the Court. 48 So far as the Harman principle was concerned, the Full Court, at [76], considered the principle applied in the case of disclosure to an opponent pursuant to a Rule of the Court or Court direction, not by recourse to principles of litigation privilege. 49 At [80], the Full Court concluded that whenever and whatever the communication was for the purposes of the application of the principle of litigation privilege, focussing on the creation of the finalised proof of evidence, or its service upon Visy, the purpose was to give them to the ACCC's opponent. 50 Thus, there was no need to address the waiver question because in a primary way the Full Court did not consider that litigation privilege attached to the final proofs of evidence in this case. 51 However, the Full Court, at [83], went on to consider the waiver issue on the basis that the primary judge found that any privilege in the finalised proofs of evidence had been waived in its entirety once they had been served on Visy. 52 The Full Court, at [102], considered the filing and serving of the finalised proofs of evidence obviously occurred in the context of existing litigation and for the purpose of the giving of notice of the proposed evidence to be adduced at trial. This, the Court said, was to be distinguished from the context of the cases of Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 (Mann) and Osland v Secretary, Department of Justice (2008)234 CLR 275; [2008] HCA 37 (Osland), which did not occur in the course of litigation. The filing and serving of the finalised proofs of evidence was a deliberate act and, whilst made because of the existence of the orders of Heerey J, was made with the purpose of informing Visy of the proposed evidence to be led by the ACCC in existing litigation. Thus the Court concluded it would have been inconsistent upon so filing and serving the finalised proofs of evidence on Visy for the ACCC to have claimed litigation privilege, and it remained inconsistent subsequently to claim such litigation privilege. 53 The Full Court also considered no unfairness arose in relation to the ACCC. The ACCC was content for the information contained in the finalised proofs of evidence to be made known to Visy, and presumably, to be led in open Court save as to certain parts specifically ordered to be confidential: [102]. 54 The Court therefore concluded, at [103], that there was a complete waiver. 55 Having regard to the Full Court's analysis in Cadbury Schweppes, the following propositions and findings might be made in respect of the matter now before me. 56 First, in this case, unlike that of Cadbury Schweppes, the affidavit of Mr Pickup was not the subject of tender and production to the wife in the Family Court of Western Australia proceeding as a result of any case management orders or the like requiring that to be done. Rather, in this case, the applicant husband made a deliberate decision to have Mr Pickup swear an affidavit for sole use in the Family Court of Western Australia proceeding. 57 The affidavit of Mr Pickup that was tendered by or on behalf of the husband in that proceeding was, consistent with the analysis in Cadbury Schweppes, not a document to which litigation privilege attached. This is because the affidavit was not created for a purpose that attracts either advice privilege or litigation privilege. It was not a document the purpose of which was communication to a lawyer for advice or in relation to the conduct of the Family Court of Western Australia proceeding. Its purpose was for tendering in open court in those proceedings and disclosing to the other party its case in relation to an aspect of the proceeding, namely the value of the shares in question. 58 On the basis of Cadbury Schweppes, on the creation of the affidavit - that is to say, the time at which the affidavit became an "affidavit", when signed by the deponent and the jurat was completed by the authorised person - should probably be taken as the time when the document ceased to have any privileged status as a mere draft affidavit. The document then did not attract any relevant client legal privilege. In that sense, the communication of the affidavit to the wife or her lawyers or by tender to the Court is probably not relevant. However, as in Cadbury Schweppes, that action of communication also occurred so it matters not precisely when the affidavit should be characterised as not attracting any relevant privilege. 59 However, in the case before me, unlike that of Cadbury Schweppes, the document that the respondents now say made available for inspection is merely a copy of the affidavit retained by the applicant husband in the Family Court of Western Australia proceeding, and not the affidavit tendered to the Court and provided to and held by the wife in those proceedings. 60 In those circumstances, this case is different on the facts from that considered in Cadbury Schweppes and the copy of the affidavit of Mr Pickup now held by the applicant husband cannot be equated with the proofs that Visy held at material times and were the subject of the appeal in Cadbury Schweppes. 61 This distinction was recognised in Cadbury Schweppes at [55] where the Full Court suggested that if, for instance, the finalised proofs of evidence in the possession of Visy were no longer available and copies in the hands of the ACCC were sought, the question of waiver may arise in these circumstances, having regard to the service of the finalised proofs of evidence. The point here is that, on the face of it, absent any waiver, the copy of the affidavit retained by the applicant husband or his solicitors would properly continue to attract a litigation privilege in the Family Court of Western Australia proceedings as one may reasonably infer that the copy was generally intended for continued use by the applicant and his lawyers in advancing his case in the Family Court proceedings. 62 One should also interpolate at this point to say that the affidavit of Mr Pickup must be considered a different document, for these privilege considerations, from the initial report prepared by Mr Pickup for the applicant husband. That report may well, at the time of its creation, have attracted both litigation privilege and advice privilege, in the sense discussed in Pratt Holdings by Finn J at [11] - [22]. One should proceed here on the basis that the initial report of Mr Pickup is probably privileged and that the privilege asserted by the applicant in it by reference to the potential proceedings between Vegas, its directors and the applicant either results in that report being covered by litigation privilege or advice privilege. However, the affidavit of Mr Pickup prepared for the purposes of the Family Court of Western Australia proceeding is a separate document and must be separately considered in privilege terms. This much is evident from the decision of the High Court of Australia in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; [1997] HCA 3, where the High Court held that a copy of a document, which document in its original form was not privileged, could, as a copy, nonetheless attract privilege on the basis that it was provided to a lawyer for the purpose of providing legal advice or for use in legal proceedings. In other words, a distinction may be and will be drawn between specific documents and the purposes of their creation. Here it seems appropriate to accept and find that the copy affidavit of Mr Pickup, identified by the applicant in his discovery affidavit at item 80 of Pt 2 of the First Schedule, is a different document from the report initially prepared by Mr Pickup which is referred to more generally by the applicant in his affidavit of discovery. 63 Consistent then with what the Full Federal Court said in Cadbury Schweppes at [55], the question of waiver becomes important in relation to the copy of Mr Pickup's affidavit discovered by the applicant. I assume that, save for the question of waiver, that copy of the affidavit would be attended by client legal privilege because it may be inferred it was for continued use in relation to the Family Court of Western Australia proceedings - not because of any privileges attracted in relation to any prospective proceedings involving Vegas or other directors of the company. The affidavit was not made in relation to such prospective proceeding. 64 Having regard to the waiver analysis provided by the Full Court in Cadbury Schweppes, the tendering of the affidavit of Mr Pickup and provision of the affidavit to the wife or her solicitors or counsel was a deliberate act on behalf of the husband, made with the purpose of informing the Court and the wife of proposed evidence to be led by the applicant in that litigation. Indeed, at the point of tender it was a very immediate indication that the applicant husband intended to lead that evidence. In the circumstances, it would have been inconsistent upon tender and providing a copy of the affidavit to the Court and the wife for the husband to have claimed litigation privilege in that affidavit, and it should be said that it remains inconsistent to now claim such litigation privilege; nor does any unfairness to the husband applicant arise. The applicant was content for the information contained in the affidavit of Mr Pickup to be made known to the wife and led in open court, albeit subject to the trial judge ruling that it was admissible evidence over the objections of the wife. In those circumstances, the test for when waiver will be considered to have been communicated, in accordance with Mann and Osland, is made out. 65 Therefore, in my view, given the context and circumstances of the tender and production of the affidavit of Mr Pickup in the course of the Family Court of Western Australia proceeding, there was a complete waiver in respect of it and the copy of Mr Pickup's affidavit held by the applicant must be considered not to be the subject of any continuing litigation privilege. As explained above, no other information has been provided to the Court to suggest that the affidavit of Mr Pickup held by the husband, as distinct from the report that Mr Pickup may have initially provided to the husband or his lawyers, attracts any client legal privilege. 66 In these circumstances, there is no continuing client legal privilege in the copy of the affidavit of Mr Pickup held by the husband and the respondents are entitled to inspect it. 67 Accordingly, I would order that: · The respondents be entitled to inspect the copy affidavit of Harvey Eastwood Pickup referred to in the applicant's application of discovery made 19 October 2009 in Sch 1, Pt 2.

Clifford v Vegas Enterprises Pty Ltd

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Cases Cited (20)

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