Deep Investments Pty Ltd v Casey

Legal framework concerning notices to produce 2 Rule 30.28(1) of the Federal Court Rules 2011 provides relevantly: (1) A party may serve on another party a notice, in accordance with Form 61, requiring the party served to produce any document or thing in the party's control: (a) at any trial or hearing in the proceeding; or (b) at any hearing before a Registrar or any examiner or other person having authority to take evidence in the proceeding. … (3) If a notice under subrule (1) specifies a date for production, and is served 5 days or more before that date, the party served with the notice must produce the document or thing in accordance with the notice, without the need for a subpoena for production. 3 In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2012] FCA 707 at [10], Jessup J noted that although a notice to produce has the same effect as a subpoena, it is not a subpoena, and the source of the obligation which it carries differs from that of a subpoena which is an order of the court. At [11], Jessup J observed that a notice to produce is not an order of the court, and is not converted into one by the terms of r 30.28(3). It is the subrule itself, in cases to which it applies, which obliges the party served to comply with the notice.

Form of notices to produce 4 At the outset, Deep Investments disputed that the notice to produce issued by the fifth to seventh respondents (collectively "Raven respondents"), and the notice issued by Mr Emanuel, complied with r 30.28(1). 5 The notice issued by the Raven respondents, dated 12 April 2017 ("Raven notice") requires the production of specified documents "at the offices of [the Raven respondents' solicitor] or at the Registry of the Federal Court of Australia Queens Square Sydney 2000". 6 Although the notice purports to be in accordance with Form 61, by requiring production at one of these locations instead of an occasion of the kind mentioned in r 30.28(1), the notice does not meet the description in r 30.28(1). The Rules do not provide for production in the manner asserted by the purported notice to produce. In order to require Deep Investments to produce documents of the kind sought in the notice to produce, it was necessary for the Raven respondents to either comply with r 30.32(1) or seek an appropriate order from the Court. 7 Accordingly, I was satisfied that the Raven notice was not effective to require production of documents by Deep Investments in accordance with its terms. 8 The Raven respondents sought an order dispensing with compliance with r 30.28(1) in respect of the notice and requiring the production of the documents set out in the notice on a date determined by the Court. 9 For the reasons below, I was not satisfied that I should order production of the documents. Accordingly, for the avoidance of doubt, I ordered that compliance with r 30.28(3) be dispensed with in relation to the Raven notice. 10 The notice issued by Mr Emanuel, dated 21 April 2017 ("Emanuel notice"), was similarly defective. It is not an answer to that defect to say, as Mr Emanuel did, that the procedures of the Court are to be applied flexibly. As a legal practitioner, Mr Emanuel should have recognised that the proper course for him was to apply to the Court for discovery of the relevant documents rather than seeking to place the onus on Deep Investments to resist production. 11 Again, I considered that I should not require production of the documents sought by that notice and, accordingly, I ordered that compliance with r 30.28(3) be dispensed with in relation to the Emanuel notice. However, I granted leave to Mr Emanuel to require production of documents evidencing receipt of the 5 April 2012 letter from Wilson HTM to Australian Securities and Investments Commission ("5 April 2012 letter") and the accompanying form FS80 referred to below. In summary, those documents contain serious allegations concerning the conduct of the fifth respondent ("Mr Robinson").

Waiver of legal professional privilege 12 An important objection made by Deep Investments to the production of the documents sought by the various respondents was that the documents are, or are likely to be, protected by legal professional privilege. I accepted that this was a relevant consideration in deciding whether to require the production of the documents, in the case of the Raven and Emanuel notices, and whether to dispense with compliance with the CBC respondents' notice to produce dated 18 April 2017 ("CBC notice"). 13 The respondents countered this objection by arguing that any relevant privilege was waived by Deep Investments' service of an affidavit of Peter Jamieson Kumnick sworn 31 March 2017. In the affidavit, Mr Kumnick refers to earlier evidence that he first received the 5 April 2012 letter and the accompanying form FS80 on 29 January 2016. 14 Mr Kumnick's affidavit states relevantly: 11. After 29 January 2016, there were 15 business days remaining until commencement of the trial. As the exchange of correspondence between 29 January 2016 and 23 February 2016, exhibited as PJK18, demonstrates, that period was fully occupied by preparation for the trial, which was scheduled to run for 3 weeks. My and counsels' involvement in that preparation was typical of the full-time commitment necessary to prepare for a trial of that length. 12. There was no opportunity to investigate, give advice to the client and take instructions, because preparing for the trial was the priority. 13. It was only after conclusion of the trial in the Supreme Court that it was opportune and appropriate to properly consider the ramifications, take full and proper instructions, obtain advice and act upon it. 14. In any event it would have been impossible to have claims now brought in the Federal Court proceedings heard in the trial of the Supreme Court proceedings, which commenced only 15 business days later, and to which the first to fourth respondents in these Federal Court proceedings were not even party. 15 The respondents referred to the general principle that, at common law, legal professional privilege is waived in the event of inconsistency between the conduct of the client and the maintenance of the privilege: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [29]. The relevant principles are explained in Macquarie Bank Limited v Arup Pty Limited [2016] FCAFC 117 at [25]-[40].

Did Deep Investments put the contents of legal advice in issue? 16 The CBC respondents argued that, by this evidence, Deep Investments disclosed the gist of legal advice, said to be that there was now a cause of action against the CBC respondents and that it did not previously have a cause of action against them. Orally, senior counsel for the CBC respondents, Mr Donaldson SC, argued that the effect of Mr Kumnick's evidence was that Deep Investments was advised not to sue the CBC respondents until the 5 April 2012 letter was received. 17 This contention was made in support of the further contention that, by disclosing the gist of legal advice and putting in issue Mr Kumnick's state of mind as to what he did or did not have an opportunity to investigate, there was a waiver of legal professional privilege in relation to communications concerning a raft of issues. 18 I did not accept that Mr Kumnick's evidence involved a disclosure of the gist of any legal advice. In particular, and contrary to the CBC respondents' submission above, Mr Kumnick's evidence does not include evidence of advice as to the existence or not of a cause of action against the CBC respondents. Nor does it state or imply that Deep Investments was advised not to sue the CBC respondents at any time.

Did Deep Investments put a state of mind in issue? 19 At the 11 May 2017 hearing, senior counsel for Deep Investments, Mr Dunning QC, confirmed that Deep Investments' case was not that it did not have the opportunity to consider whether Mr Robinson was a rogue, but only that it did not have the opportunity to consider that matter by reason of the contents of the 5 April 2012 letter. 20 I accepted that Deep Investments put in issue the correctness of Mr Kumnick's asserted belief about when he had an opportunity to investigate, give advice to the client and take instructions arising out of the 5 April 2012 letter and the form FS80. I accepted that documents of the kind sought may be relevant to the truthfulness of that asserted belief and may contain material inconsistent with that belief. However, this is not a case where Deep Investments is putting forward a case that it had a state of mind likely to have been affected by legally privileged communications. Rather, it is a case where legally privileged communications may evidence or contradict a submission about Deep Investments' state of mind (ignorance as to the contents of the 5 April 2012 letter and the form FS80) based upon Mr Kumnick's evidence.

Documents sought in the Raven Notice 21 The Raven notice sought the following documents: (1) All documents recording or referring to investigations undertaken in relation to or regarding any of the allegations contained in the statement of claim filed in this proceeding. (2) All documents recording or referring to legal advice provided to Deep Investments (or its agents or servants) in relation to or regarding: (a) any of the allegations contained in the statement of claim; (b) any application to adjourn the hearing listed on 22 February 2016 in the Supreme Court of NSW in proceeding 2013/379843 ("Supreme Court proceeding"); (c) any application to amend any of the three commercial list statements filed in the Supreme Court proceeding to include any of the allegations contained in the statement of claim; (d) any application to join any of the CBC respondents or Mr Emanuel to the Supreme Court proceeding; and (e) the possible operation of an estoppel of the kind identified in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 ("Anshun estoppel"), issue estoppel or res judicata in relation to any of the allegations contained in the statement of claim. (3) All documents recording or referring to instructions provided by or on behalf of Deep Investments in relation to or regarding: (a) any of the allegations contained in the statement of claim; (b) any application to adjourn the hearing listed on 22 February 2016 in the Supreme Court proceeding; (c) any application to amend any of the three commercial list statements filed in the Supreme Court proceeding to include any of the allegations contained in the statement of claim; (d) any application to join any of the CBC respondents or Mr Emanuel to the Supreme Court proceeding; and (e) the possible operation of Anshun estoppel, issue estoppel or res judicata in relation to any of the allegations contained in the statement of claim. (4) All documents recording or referring to the instructions referred to in para 13 of the affidavit of Peter Jamieson Kumnick sworn 31 March 2017. (5) All documents recording or referring to the advice referred to in para 13 of that affidavit. 22 In effect, the Raven respondents sought discovery of documents in accordance with the five identified categories. 23 The Raven respondents argued that the documents sought were: (1) Relevant to enable them to test Mr Kumnick's evidence in paras 12 and 13 of his 31 March 2017 affidavit. In particular, they argued that the documents may include evidence that the allegations in the statement of claim had previously been investigated or could have been investigated earlier, so that the Court should not accept that there had been "no opportunity" to investigate the allegations prior to the trial in the Supreme Court. (2) Relevant to the grounds of Anshun estoppel and abuse of process raised by the Raven respondents. Again, the Raven respondents submitted that, if the documents revealed that the allegations made in the statement of claim were investigated long prior to the Supreme Court trial or required only a minimal amount of investigation work after that trial, this would be likely to have a bearing on whether there was an opportunity available to fully litigate the allegations now made on an earlier occasion. (3) Relevant to abuse of process. It was submitted that if the allegations made in the statement of claim had been the subject of legal advice to Deep Investments or instructions from it prior to the consent judgment in the Supreme Court, it may be inferred that a conscious decision was made not to address them in the Supreme Court proceeding. 24 In the absence of evidence that Deep Investments received advice from anyone other than its legal team including Mr Kumnick, this submission posited that Mr Kumnick's evidence is false and, quite probably, knowingly false. There were no grounds to suspect that the relevant evidence is false: the Raven respondents wished to obtain documents to explore that possibility. 25 Once that concession was made, in the absence of any reason to think that Deep Investments may have procured the 5 April 2012 letter (and the form FS80) earlier (for example, from Wilson), I was not satisfied that production of the documents sought was likely to make a genuine contribution to the just and efficient resolution of the proceeding. I accepted that the documents have a degree of relevance, but not that there would be any great utility in exploring the extent of Deep Investments' earlier opportunity in the light of Mr Dunning QC's concession and in the absence of any real basis to believe that the documents produced would add to the Raven respondents' case. Accordingly, I did not make an order requiring production of the documents. 26 Although not accepting that the documents sought by the notice were prima facie subject to legal professional privilege, the Raven respondents' submissions nevertheless proceeded on the assumption that this was the case. In my view, it was appropriate to make that assumption in light of the nature of the documents sought, especially those recording or referring to legal advice and instructions given by client to lawyer. 27 The parties disputed whether Deep Investments had waived any privilege in the documents by Mr Kumnick's evidence. In the light of my earlier conclusion, it was not necessary for me to finally resolve that issue. However, in my view, there was no relevant inconsistency between the maintenance of the privilege and reliance on his evidence in defence of the respondents' interlocutory applications. In essence, my view was that Mr Kumnick did not either directly or indirectly put the contents of otherwise privileged communications in issue: cf Ferella & Another v Official Trustee in Bankruptcy [2010] FCA 766; (2010) 188 FCR 68 at [65] and DSE (Holdings) Pty Ltd v Intertan Inc & Anor [2003] FCA 384; (2003) 127 FCR 499 at [58].

Documents sought in the Emanuel Notice 28 Mr Emanuel's notice sought all documents created during the period 5 April 2012 to 1 March 2016 (inclusive) that: (1) refer to the existence and/or contents of: (a) the 5 April 2012 letter; and/or (b) the form FS80; (2) refer or relate to any claim or potential claim by any one or more of the plaintiffs in the Supreme Court proceeding against: (a) Mr Emanuel; and/or (b) any person arising out of, based upon or referable to the matters set out in the 5 April 2012 letter and/or the form FS80; (3) record or refer to any instructions sought or obtained from or provided by, or advice given to, any of the plaintiffs in the Supreme Court proceeding with respect to any of the matters referred to in (1) and (2) above. 29 Mr Emanuel submitted that Mr Kumnick's evidence set out above "opened up the issue of whether [Deep Investments] was, or was not, aware of the existence or contents of the 5 April 2012 letter or the FS80, and whether it did or did not give instructions or receive legal advice concerning the documents or their ramifications". Mr Emanuel submitted that his notice was directed to those issues. 30 I accepted those submissions, which I did not understand to be disputed by Deep Investments. However, it was not known whether Deep Investments had received either the 5 April 2012 letter or the form FS80 prior to 29 January 2016. In the light of the fact that the notice sought discovery of documents including documents likely to be protected by legal professional privilege (which I was not satisfied was waived by Mr Kumnick's evidence), I was not satisfied that an order for production of the documents specified in the notice was likely to make a genuine contribution to the just and efficient resolution of the proceeding. 31 I granted leave to issue a notice to produce returnable on 15 May 2017 requiring production of documents evidencing the receipt of the 5 April 2012 letter or the form FS80 with a view to the possibility of a further application for an order for production being sought in the event that documents were produced in answer to such a notice.

CBC respondents' notice to produce 32 In my view, the CBC notice was also defective, in that it did not specify a particular occasion for the production of the documents sought. However, Deep Investments did not take that point and I proceeded on the basis that the notice required production of the specified documents pursuant to r 30.28(3). 33 The documents sought by the CBC notice were: All documents that record any communication during the period from 1 October 2012 to 26 February 2016 (both dates inclusive) between any one or more or all of: (a) any partner and/or employee of K2 Law; (b) any barrister briefed by K2 Law; or (c) any plaintiff in the Supreme Court proceedings, regarding any one or more or all of the following issues in connection with the Supreme Court proceedings: (d) the significance of evidence which was or may be provided by the first respondent ("Mr Casey"); (e) the significance of evidence which was or may be provided by the second respondent ("Mr Clarke"); (f) whether or not to bring a claim against any of the CBC respondents; (g) the significance of any defence or potential defence to the effect that Mr Casey, Mr Clarke and/or CBC was a concurrent wrongdoer; (h) whether to abandon any claim based on an allegation of failure to take reasonable care; or (i) the 5 April 2012 and/or the form FS80 referred to in that letter. 34 The CBC respondents did not shy from the fact that the documents sought were prima facie protected by legal professional privilege, preferring to rely on the contention that any relevant privilege was waived. It was not clear whether the CBC respondents went so far as to say that there was a waiver in connection with documents falling within (d) to (h) above. To the extent that such a submission was put, I did not accept it. In particular, even if Mr Kumnick had given evidence of advice that Deep Investments should or should not sue the CBC respondents, that would not effect a waiver in relation to, for example, separate advice concerning the significance of evidence which was or may be provided by Mr Casey. 35 Accordingly, I dispensed with compliance with r 30.28(3) in relation to the CBC notice, but granted leave to the CBC respondent to issue a further notice to produce returnable on short notice in the same terms as for Mr Emanuel. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

SCHEDULE OF PARTIES NSD 2189 of 2016 Respondents Fourth Respondent: KEVIN EMANUEL Fifth Respondent: SIMON ROBINSON Sixth Respondent: RAVEN CAPITAL PTY LTD (ACN 149 962 649) Seventh Respondent: QWL PTY LTD (ACN 096 284 383)