COLVIN J:
1 On 31 May 2017, this Court ordered that the documents stored in a shipping container located at an address in Southern River in Western Australia be delivered up to, and held in safe storage by, the Commissioner of Taxation. The orders provided that the Commissioner could not review or copy any of the documents until there was a further hearing. At the time of the making of those orders some 62 parties were named as respondents. Those parties had been identified as possibly having a claim to ownership or legal professional privilege or both in respect of the documents.
2 The documents were obtained by the Commissioner and delivered to a secure place at barristers' chambers known as Francis Burt Chambers. The Commissioner seeks access to the documents subject to the maintenance of any claim of legal professional privilege. Ordinarily, orders might be made for the various interested parties to make any claim to privilege and for those claims to be considered and, if necessary, adjudicated by the Court. However, there are a number of difficulties with that course.
3 First, the sheer number of documents. They comprise some 216 archive boxes. Second, there is uncertainty as to ownership of the documents. Some respondents are insolvent and there are claims by various administrators to documents owned by those parties. There does not appear to be any ready means of identification of the particular owner of particular documents. Therefore, it is necessary to examine the documents in order to determine ownership. A process of inspection whereby any party with a claim to ownership may inspect the documents to determine ownership may result in claims to privilege being compromised. Third, at the time that orders were made not all respondents had been formally served. In those circumstances, on 28 June 2017 orders were made, at the request of the Commissioner, for a barrister to inspect the documents and create a list describing each document and for the completed list to be distributed to the parties. It was then proposed that parties would raise any claim to ownership or privilege by reference to the list.
4 When the matter came before me in March 2018 the process of preparing the list had reached the point where 67 boxes of documents had been reviewed and catalogued, leaving 149 boxes to be examined and indexed. Further, steps had not been taken by the Commissioner to serve all parties (or obtain appropriate orders in relation to service).
5 Orders were proposed by which the barrister might be relieved of duty and be replaced by two other barristers to continue the indexing process. Given the progress to date and the fact that continuing with such an approach would not advance any determination of claims to privilege, I raised with the parties the possibility of appointing a referee who would prepare a report in which three categories of documents were identified. First, those documents which in the opinion of the referee were clearly privileged (Category A documents). Second, those documents other than Category A documents in respect of which there is, in the opinion of the referee, a reasonable basis to claim legal professional privilege (Category B documents). Third, those documents in respect of which, in the opinion of the referee, there is no reasonable basis to claim legal professional privilege (Category C documents).
6 The Category A and Category B documents could then be separated from the Category C documents and access could be given to the Category C documents on a confidential basis so that claims to ownership could be addressed and the Commissioner could consider the contents of the documents for statutory purposes.
7 Adopting such an approach was likely to avoid the need to index the documents in Category A and Category C and could result in the release of documents in Category C in tranches.
8 I adjourned the matter for consideration of draft orders. I provided to the parties draft orders by which such an approach might be implemented. (At the request of the Commissioner, I made orders to allow the process of preparing the list to continue in the meantime).
9 The draft orders proposed directions to the referee to prepare a procedure for sorting the documents to be implemented by assistants to the referee and further directions to the referee as to the manner in which documents in each of Category A, Category B and Category C might be identified and separated. The draft orders contemplated reports being prepared by the referee on a rolling basis. The reports would state the procedure that had been adopted (and followed) as well as a concise summary of the legal principles and any other matters that the referee had applied in forming relevant opinions.
10 The proposed directions to the referee were as follows:
1. The referee shall convene an initial conference at which lawyers for any party to these proceedings may provide such information as that party wishes to provide concerning names of individual lawyers or legal firms who may have provided privileged advice to their clients and any other information that may bear upon the matters for report by the referee.
2. The referee shall instruct assistants as to a procedure to be followed for the review and removal of documents for consideration by the referee on the basis that the documents may be Category A documents or Category B documents, the marking of each removed document with a unique identification number and the replacement of the removed document with a page marked with the unique identification number (Removed Documents).
3. The referee shall sort the Removed Documents into Category A, Category B and Category C documents.
4. If the referee forms the opinion that any of the Removed Documents are Category C documents then the referee shall arrange for each of those documents to be returned to its original place.
5. Subject to these directions, the referee may otherwise conduct the inquiry in any way the referee thinks fit.
11 On return of the matter for a case management hearing, the parties raised a number of issues as to the form of the draft orders. I deal with those matters below.
12 The only objection raised to the overall approach in the draft orders was by two of the respondents, namely Mr Allen Caratti and Ms Tina Bazzo. They claimed that the proposed directions might result in Category C documents being released to the Commissioner in circumstances where they would be denied the opportunity to make claims for privilege over those documents. They said that this should not occur because legal professional privilege was an important common law immunity.
13 These submissions advanced for Mr Caratti and Ms Bazzo misunderstand the nature of the referee process. The respondents are not denied the opportunity to make claims for privilege. Rather, those claims are allowed to be made and are to be adjudicated according to the process to be established as outlined in the proposed directions to the referee. In effect, the process proceeds on the basis that all available claims to legal professional privilege have been made and the referee assesses the merits of those claims and divides the documents into the three categories.
14 A further submission was made to the effect that the contemplated reference would not result in a proper assessment of claims to privilege because "inspection of documents alone is not a proper method to determine claims of privilege" since the question whether a document attracts legal professional privilege depends upon the circumstances and purpose of its creation. It was submitted that the claims to legal professional privilege could not be adjudicated unless Mr Caratti and Ms Bazzo were given an opportunity to inspect all the documents, to formulate claims for privilege after that inspection and to present those claims to a referee or the court.
15 It was submitted that Mr Caratti and Ms Bazzo were in a different position to other parties who had an interest in the documents because the documents in the container had been in their possession previously and therefore they had constructive knowledge of all the documents such that it could not be said that the contents of the documents should not be disclosed to them even if they were subject to a claim for privilege that could be asserted by another party. No evidence was advanced to support a claim that there were likely to be significant numbers of documents in respect of which Mr Caratti or Ms Bazzo had personal claims to privilege. Counsel accepted that he was unable to make a submission to the effect that there were a large number of such documents.
16 These submissions fail to recognise that as part of the process before the referee, all parties would be given an opportunity to put to the referee any matters of which they are aware that might bear upon the matters for report by the referee. It must be borne in mind that the respondents must be expected to have some knowledge of their own documents that came to be held in the container. They should be able to identify the lawyers who were engaged or the types of documents that might be the subject of a privilege claim and why. To the extent that contextual matters might be important these are matters that can be communicated to the referee. The referee will be required to report as to the process that has been followed. No evidence is advanced before me as to why there may be any difficulty for Mr Caratti and Ms Bazzo to participate in the process outlined by the proposed directions.
17 Further, the referee is not being asked to adjudicate all claims to privilege. Rather, the referee is asked to establish a procedure by which documents in respect of which there is no reasonable basis to claim legal professional privilege may be identified. This procedure is to be guided by information provided by the parties. Documents in respect of which there is a basis to claim privilege will then be considered separately.
18 If the claims were to be adjudicated in the manner proposed by Mr Caratti and Ms Bazzo then that approach would produce inordinate delay. No other party seeks an opportunity to inspect the documents as part of the referee process.
19 Further, the draft orders would not allow the release of any documents to any party otherwise than on an application to the Court once a report had been received from the referee. The draft orders contemplate a series of regular reports by the referee in respect of tranches of documents. Then, an opportunity would be given for any party to apply to the Court to seek all or any of the following:
(1) access to the Category C documents the subject of the report;
(2) the provision by the referee of a list of each of the Category B documents with a description, as far as possible, of a kind that would be provided by a party claiming legal professional privilege from production for inspection on discovery; and
(3) the adjudication of any claim to privilege in respect of the Category B documents.
20 I accept that the orders that might be sought upon receipt by the Court of the report from the referee should not be confined to such orders. Rather, there should be an opportunity for any party to seek particular orders as to the adoption, variation or rejection of part or all of report. This is consistent with the referee process.
21 Further, after each referee report has been prepared it should be made clear that there should be no access to any documents unless and until the court has considered the report and received submissions from any party as to whether it should be acted upon. I deal with these amendments below.
22 Otherwise, for the following reasons, I am satisfied that it is appropriate in all the circumstances for orders for the appointment of a referee to be made and I will make orders substantially in terms of the draft orders with some amendment to deal with particular issues raised by the parties.
23 I note that at this time not all respondents have been served. Nevertheless, I am satisfied that it is appropriate to proceed with the referee process. All relevant parties will need to be served before there is any adoption, variation or rejection of the report from the referee in the manner contemplated by the orders.