FRASER -v- FRASER [2019] WASC 135 (26 April 2019)

1. I first turn to the background and to the issues raised in the proceedings, as it is necessary to understand the context in which the waiver of privilege is said to have occurred.

1. Robert and Genene reside in New Zealand, whereas until about mid 2018, Ronald and Deborah resided in Western Australia. Robert and Genene commenced a proceeding as against Ronald and Deborah in New Zealand in 2016.[3]
2. In summary, Robert and Genene allege that in 2013 and 2014, they advanced to Ronald and Deborah a total of NZD$900,000, which Ronald and Deborah intended to use in their business developing residential blocks. Robert and Genene say that the money was advanced as a loan; that interest was payable on the loan; and that the agreed rate of interest was 10% per annum. Robert and Genene say that after Ronald and Deborah made repayments of NZD$900,000, and after Ronald and Deborah undertook to make enquiries as to how to make further repayments, Ronald and Deborah ceased to make repayments.
3. Ronald and Deborah applied to stay the New Zealand proceeding on the grounds that the parties had entered into a partnership rather than a loan agreement. Ronald and Deborah asserted that the partnership business was conducted in Western Australia; that Ronald and Deborah were entitled to counterclaim for losses; and that any trial should occur in Western Australia.

1. The New Zealand proceeding was stayed and Robert and Genene commenced District Court Action CIV 2151 of 2017 as against Ronald and Deborah on 20 June 2017. I understand that the statement of claim filed by Robert and Genene in the New Zealand proceeding was in substantially the same terms as the statement of claim filed in the District Court Action.[4]
2. It was common ground as between the parties that the following amounts were paid by Ronald and Deborah to Robert and Genene:

1. The District Court Action, like the New Zealand Proceeding, concerned a claim by Robert and Genene for unpaid interest. That is, the sum of NZD$283,152.53, together with interest on that amount, being money that Robert and Genene say is due and owing by Ronald and Deborah pursuant to loan agreements.[5]

1. Ronald and Deborah filed a defence, set-off and counterclaim in the District Court Action in August 2017. By that pleading, they denied the existence of a loan agreement or agreements and claimed that they had agreed with Robert and Genene to carry on a joint undertaking, with a shared goal to earn and distribute profits. Ronald and Deborah pleaded that in or about early 2013, they had orally agreed with Robert and Genene to carry on a 'Joint Undertaking', the material terms of which were that:[6]

5.1 [Ronald and Deborah] would, through [Abingdon Court Consulting Pty Ltd], contribute [2 residential blocks of land] which at that time were valued at approximately AUD$600,000;

5.2 [Robert and Genene] would make an initial contribution of NZD$600,000;

5.3 a building company would be incorporated with its sole purpose being to construct houses on the Blocks on behalf of the Joint Undertaking utilising [Ronald's] Builder Registration Number;

5.4 [Ronald] would, as a registered builder, contribute his skills and expertise as a builder, and his experience in the construction and sale of 'spec' houses to project manage the development of the Blocks on behalf of and at no cost to the Joint Undertaking;

5.5 the proceeds of the sale of the 'spec' houses would be reinvested and put towards the purchase of further blocks by Abingdon Court and the development of those blocks for the benefit of the Joint Undertaking; and

5.6 that at a time to be mutually agreed the Joint Undertaking would be wound up, a final accounting done and the profits, if any distributed.

1. Ronald and Deborah also pleaded that pursuant to the Agreement and in furtherance of the Joint Undertaking:[7]

6.1 in or about March 2013 [Robert and Genene] transferred NZD$600,000 (AUD$488,902.86) from their bank account to an account in New Zealand in the names of [Ronald and Deborah];

6.2 in or about October 2013 Debron Pty Ltd (Debron) was incorporated;

6.3 Debron constructed houses on the Blocks (the Houses);

6.4 [Ronald] project managed the construction of the Houses; and

6.5 the Houses were sold.

1. As at August 2017, the position of Ronald and Deborah, as pleaded, was that:[8]
   1. In or about April 2014 [Robert and Genene] contributed a further NZD$300,000 (AUD$272,317) and [Ronald and Deborah] AUD$260,000 to the Joint Undertaking (the Additional Funds).
   2. The Additional Funds together with the proceeds from the sale of the Houses were used to purchase 2 further blocks (the Additional Blocks) and to construct houses on the Additional Blocks (the Additional Houses).
   3. In anticipation of selling the Additional Houses, offers were made by Abingdon Court on behalf of the Joint Undertaking to purchase 2 further blocks (the Further Blocks) with a view to similarly developing and selling them.
   4. Due to the downturn in the Western Australian economy the Additional Houses took longer to sell and the price ultimately realised for them was less than what had been anticipated. Settlement of the purchase of the Further Blocks did not proceed and [Ronald and Deborah] on behalf of the Joint Undertaking negotiated a release from the contracts relating to the Further Blocks.
   5. The Joint Undertaking was then terminated by mutual agreement between [Robert and Genene] and [Ronald and Deborah].
2. Ronald and Deborah alleged that the relationship between them and Robert and Genene was in the nature of a partnership, or alternatively a joint venture, and not one of borrower and lender, as alleged by Robert and Genene.[9]
3. An alternative plea, together with a set‑off and counterclaim were also pressed on behalf of Ronald and Deborah. Ronald and Deborah pleaded that the Joint Undertaking made a loss of AUD$562,235 (exclusive of currency conversion / exchange rate losses), which sum Ronald and Deborah, through Abingdon Court and Debron, had borne entirely.[10] The set-off and counterclaim concerned the losses that Ronald and Deborah said they incurred in the Joint Undertaking.

1. After answering the request made on behalf of Robert and Genene for further and better particulars of defence, set‑off and counterclaim, an amended defence was filed on behalf of Ronald and Deborah in November 2017.
2. By that amended pleading, the defendants no longer pleaded a joint undertaking as between Ronald and Deborah and Robert and Genene. Rather, they said that: [11]

'... such relationship as existed was:

12.1 between the plaintiffs and Abingdon Court; and

12.1.1 in the nature of a partnership, or alternatively a joint venture,

and not one of borrower and lender as between the plaintiffs and the defendants as has been alleged by the plaintiffs.

1. In the alternative, it was pleaded that if the moneys advanced by Robert and Genene to Ronald and Deborah were advanced pursuant to loan agreements (as alleged), then the loan agreements were free of interest, alternatively, at least in relation to interest, the loan agreements were uncertain and therefore any claim in respect of interest is unenforceable.[12] That is, Ronald and Deborah asserted that if there was a loan or loans, then the moneys advanced had been repaid in full.[13] As noted at [14] above, it is common ground as between the parties that a total of NZD$900,000, or AUS$851,846.33, has been paid by Ronald and Deborah to Robert and Genene.
2. The set‑off and counterclaim were abandoned by Ronald and Deborah in November 2017. On behalf of the defendants, the following explanation is proffered.[14]
   1. After filing the Counterclaim it became apparent that land the defendants say was contributed to the pool for the purposes of development and sale was not owned by them personally but by a company they controlled (Company).
   2. It is submitted that as a matter of law, the defendants therefore had no standing to bring the Counterclaim and the company is not now and never has been a party to the within action.
   3. The Counterclaim was accordingly discontinued upon the filing of an amended defence on 16 November 2017.

1. In late 2017, the solicitors for Robert and Genene expressed concern that the defendants' response to the allegations that the payments made were pursuant to a loan that accrued interest has changed significantly over time.[15]
2. On 31 January 2018, a chamber summons was filed on behalf of Robert and Genene for summary judgment in their favour.[16] The application was supported by an affidavit sworn by Robert on 31 January 2018.
3. Ronald's affidavit was filed in opposition to the application. In his affidavit, Ronald addresses the various paragraphs of Robert's affidavit in turn.[17] The affidavit was structured in a style similar to a pleading, where the matters deposed to by Robert were admitted, denied or otherwise responded to by Ronald.
4. The chamber summons was listed for hearing before a registrar of the District Court on 4 April 2018. The application for summary judgment was dismissed.

1. Waiver may be express or implied. In this case, there was no express waiver. The species of waiver relied upon by Robert and Genene is implied waiver.
2. The onus of establishing an implied waiver lies upon the party seeking to displace the existence of the legal professional privilege - in this case, Robert and Genene.[18] The legal standard to be applied for an implied waiver is the existence of conduct, which by its nature is evaluated as being inconsistent with the maintenance of the privilege. It is an objective test. It is the existence of an act of inconsistency with the privilege which is assessed around considerations of overall fairness.[19]
3. At the hearing, counsel for the defendants referred to authorities identified in a supplementary list,[20] which included Viterra Malt Pty Ltd v Cargill Australia Ltd,[21] a Victorian Court of Appeal decision. However, during the course of the hearing, I was referred to the decision of Macaulay J in Cargill Aust Ltd v Viterra Malt Pty Ltd (No 7), which judgment had been appealed to the Court of Appeal.[22]
4. Although counsel for the plaintiffs was only afforded a very short opportunity to consider Macaulay J's reasons (and it is not clear whether he was taken to the reasons of the Court of Appeal), it was common ground as between counsel that the judgment of Macaulay J at [49] contained a summary of the principles applicable to an application concerning implied waiver.
   1. Consistently with the principles espoused in Mann v Carnell, DSE, Rio Tinto and Vic Hotel - and the authorities on which they are based - I understand the following propositions to apply:

(a) Legal professional privilege is an important common law right (not just a rule of evidence).
>
> (b) That right is only destroyed if the right-holder acts inconsistently with the maintenance of the privilege: that is, the relevant inconsistent act needs to be the act of the right-holder, not some other person.
>
> (c) It follows that the combination of the relevance of the confidential material to an issue in the case, and the forensic unfairness that may follow if the material is not made available to the other party, does not of itself bring about waiver: it is the inconsistent act of the right-holder that does that.
>
> (d) Accordingly, the task for this Court is not to make a choice between one public interest or right over another, or to balance 'fairness and justice' against the right-holder's interest in the maintenance of confidentiality. Instead, the task is deciding whether the important common law right has been lost by the right-holder's act of waiver.
>
> (e) The right can be waived even though the right-holder did not subjectively intend to waive it: that is, the waiver can be imputed objectively from the inconsistent acts of the right-holder.
>
> (f) Inconsistency refers to a contradiction between the confidential nature of the communication, on the one hand, and the act of the privilege holder which necessarily lays open the communication to scrutiny, on the other: so inconsistency is the test for waiver because it exposes the contradictory act which effects the waiver.
>
> (g) Relevant inconsistency is found in the making of an assertion (express or implied) or the bringing of a case either about the contents of a confidential communication or which necessarily lays open the confidential communication to scrutiny.
>
> (h) In either event, it is the contents of the privileged communication which the assertion or the case must be about or which is necessarily laid open to scrutiny - not merely some 'state of mind' to which legal advice might be relevant.
>
> (i) Putting a state of mind in issue, even together with a likelihood that legal advice was obtained that might be relevant to the issue (for example, by showing chronological coincidence), is not necessarily enough. The privileged communication must itself be 'central' to the case.
>
> (j) An assessment of whether an act is in fact contradictory and inconsistent may involve questions of judgment and degree.
>
> (k) Because it does not involve a 'balancing exercise' between competing public interests, the waiver of privilege is not determined by the application of a general test of fairness;
>
> (l) Rather, as Mann v Carnell explains, where necessary, considerations of fairness may inform the Court's perception of the essential ingredient of inconsistency - it follows, considerations of fairness are subordinate to the essential test of inconsistency. (footnotes omitted)

5. At [49(g)] of his Honour's decision, Macaulay J summarises how a inconsistency is found, which is explained in further detail by his Honour at [44] ‑ [46]:
   1. In DSE (Holdings) Pty Ltd v Intertan Inc, a frequently quoted decision in this context, Allsop J (as he then was) undertook a thorough review of the cases as at 2003. His Honour embarked on a detailed discussion of the seminal decision of Jordan CJ in Thomason, in which the Chief Justice had drawn an analogy between the case before him and a claim brought in undue influence. At [58], Allsop J said:

It is unnecessary to explore the existence or extent of any such qualification to what Jordan CJ said in Thomason about undue influence or cases such as In re Coomber. It is sufficient to understand, I think, that in most undue influence cases (and in Thomason when its circumstances are appreciated) 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.

1. It may be noted that Allsop J's formulation contains two limbs or two means by which an inconsistency can arise: first, by making an assertion (express or implied) or bringing a case which is about the contents of the confidential communication; and, secondly, by making an assertion or bringing a case that necessarily lays open the confidential communication to scrutiny.
2. In Vic Hotel the Court of Appeal took up the first of those two limbs, saying:

Counsel contended that the test identified by the trial judge was that identified by the Full Court of the Federal Court in Commissioner of Taxation v Rio Tinto Ltd, in particular, the following passage (at [52]):

These authorities show that, where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication.

However, the judgment of the court in Rio Tinto did not confine conduct constituting inconsistency for the doctrine of waiver to assertion about the contents of otherwise privileged communications. The court also stated:

It is plain enough that the majority in Mann also saw the 'issue waiver' cases as a species of waiver, to which the same basic principle applied. Their Honours' analysis in Spalvins emphasises, as does the majority in Mann, that waiver comes about because the privilege holder's conduct is inconsistent with the continued confidentiality of the communication because he or she has put in issue the character or contents of the communication in pursuing a right or claim, or has created a situation where another party must reasonably do so by way of a defence.

1. The application before Macaulay J, later considered by the Victorian Court of Appeal, concerned an alleged 'issue waiver', a particular manifestation of the principle of implied waiver.[23] The application was made on the basis that, by their pleadings, the Cargill parties had waived privilege over certain documents. The application was not about the contents of any privileged communication, but about the relationship between certain communications and the issue propounded.[24]
2. I also note the caution expressed by the Court of Appeal in Viterra Malt Pty Ltd v Cargill Australia Ltd at [44]:

... as the cases themselves make clear, there is no settled list of kinds of action which, by their very nature, give rise to implied waiver: each case must depend upon its own facts and circumstances and drawing generalisations from other cases may be dangerous.

Disposition Was the substance of advice received by the defendants disclosed?

1. In this case, Ronald and Deborah have gone further than simply making reference to the fact that legal advice had been obtained. By pars 12, 13, 14, 15(q) and 16 of Ronald's affidavit, Ronald and Deborah have communicated to Robert and Genene and to the court as follows.[25]
2. First, that Ronald and Deborah's solicitors in New Zealand and in Western Australia advised them after the commencement of the New Zealand proceeding and the commencement of the District Court Action that the arrangement described to them by Ronald and Deborah suggested a partnership.
3. Secondly, that Ronald and Deborah's Western Australian solicitors advised them that:

(a) the true party to the arrangement was one of their companies, Abingdon Court Consulting Pty Ltd, and not Ronald and Deborah; and
>
> (b) Ronald and Deborah could not counterclaim for losses incurred.

4. Thirdly, that the advice received by Ronald and Deborah and summarised at [37] and [38] was current as at the swearing of Ronald's affidavit.
5. Fourthly, that Ronald and Deborah had first obtained advice from lawyers in New Zealand that the arrangement between the parties was, in their opinion, what they called a 'loose partnership'. Lawyers engaged in Western Australia later advised Ronald and Deborah that they thought that 'the circumstances described a joint undertaking, such as a partnership or joint venture'.
6. Fifthly, that Ronald and Deborah's pleading amendments on 16 November 2017 (by which it was alleged that Ronald and Deborah were not parties to the agreement, and by which it was alleged that the arrangement was in fact a partnership between the plaintiffs and Abingdon Court) came about by reason of the advice received from Ronald and Deborah's lawyers, summarised at [38].
7. Sixthly, that Ronald and Deborah did not understand prior to receiving advice in or around November 2017 that there was a difference between their personal rights and entitlements, and those of their company Abingdon Court, in circumstances where they were the sole directors and shareholders in Abingdon Court.
8. Seventhly, that Ronald and Deborah were advised by their Western Australian lawyers that they had no standing to pursue the counterclaim as against Robert and Genene. To recover the losses, Abingdon Court Consulting Pty Ltd would need to bring a separate claim as against Robert and Genene.
9. This is not a case where it might be argued that a mere reference was made to legal advice. By Ronald's affidavit, the substance and conclusions of advice obtained by Ronald and Deborah at different points in time were disclosed. What was not disclosed was the reasoning or instructions relevant to the advice, nor (with precision) the time or the manner in which the advice was given, nor the content of the advice beyond a summary.[26]

1. In this case, there is no issue that the relevant communications as between the defendants and their solicitors in New Zealand and in Western Australia were subject to legal professional privilege in the hands of the defendants, as the original recipients of the advice.
2. No issue was taken that it was not advice for the benefit of the defendants, nor that the advice was capable of being waived by them.[27]

1. As noted above, relevant inconsistency may be found in the making of an assertion about the contents of a confidential communication. In Ronald's affidavit, the defendants have made various assertions about the contents of the confidential communications. Having regard to the circumstances in which the assertions were made, I find that that the defendants have acted inconsistently with the maintenance of the privilege.
2. I accept the defendants' submission that a limited disclosure of the existence, and the effect, of legal advice may not be inconsistent with maintenance of confidentiality in the terms of the advice; it depends on the circumstances of the case.[28]
3. In this case, Ronald and Deborah elected to disclose the substance of legal advice so as to refute the contention that they had changed their position during the various proceedings, or were disingenuous in the factual allegations made in the proceedings in their pleadings and / or affidavits.[29] Ronald and Deborah made a forensic decision to positively refute the assertion made by the plaintiffs in the context of their opposing the application for summary judgment.
4. The substance and conclusions of advice obtained by Ronald and Deborah at different points in time were disclosed. Such disclosure was inconsistent with the wish to maintain the confidentiality that would otherwise pertain to the communications. I accept that this was a case of a party to litigation 'deploying' a partial disclosure for forensic advantage, as the defendants' evidence to the court has been, and can be expected to remain, that the changes in position were the result of legal advice, and no other reason.

1. In opposing the application for production, the following submission was also made on behalf of Ronald and Deborah:[30]

Such documents as may exist, if any, over which privilege would be waived if an order as sought by the plaintiffs was made would go to matters which are now no longer in issue in the proceedings. They are therefore irrelevant. It is submitted that relevance or the lack thereof should be a threshold issue to be considered in determining such an order should be made.

1. That is, the defendants say that the application should fail as the documents sought are now not relevant to any matter in issue in the proceeding.
2. For the following reasons, I do not accept that the application should fail on this basis.
3. First, the suggestion that the relevance of the confidential material to an issue in the proceeding is to have paramouncy in determining whether there has been implied waiver can not readily be reconciled with Mann v Carnell.
4. Secondly, counsel for the plaintiffs conceded that if implied waiver was established, then I might, as a secondary question, consider relevance and whether the orders pressed on behalf of the plaintiffs ought be made.
5. Having found that there was an implied waiver, I now turn to consider relevance as a secondary question.
6. I do not accept the submission pressed on behalf of the defendants that credit is not presently an issue in the proceeding.[31] The pleadings disclose a contest as between competing accounts of oral and written communications between the parties.
7. I accept that it remains open to the plaintiffs to cross examine the defendants at trial on the change in their pleaded case, and also on the explanation proffered by Ronald for the change in position, as deposed to in his affidavit. The documents go to questions of credit.

1. For the reasons set out above, I find that privilege has been waived.
2. As to the appropriate form of order, I note that the plaintiffs do not press for, nor would they be entitled to the production of advice received after Rodney's affidavit was deposed and filed.[32]
3. Although the plaintiffs' proposed orders allow additional time for compliance, trial dates are fixed for June of this year and a mediation is proposed in May. In the circumstances, I propose to make orders substantively in the terms proposed by the plaintiffs, with a truncated timeframe. I will hear from the parties as to the appropriate form of orders and as to costs.

Schedule A - Affidavit of RL Fraser sworn 31 January 2018 and the affidavit of RW Fraser sworn 16 February 2018

10. I have seen from the Court documents in these proceedings that Ron and Deborah have alleged that:

a. Ron, Deborah, Genene and I were in a partnership concerning the developments of the land and that partnership made substantial losses, and that Genene and I were liable to reimburse Ron and Deborah for those losses (Defence, Set‑off and Counterclaim dated 2 August 2017);

12. Except to confirm that I have, since the commencement of the New Zealand proceedings and these proceedings, been advised by my lawyers both in New Zealand and here that the circumstances of the arrangement I have described above suggest a partnership, no comment is required in response to paragraph 10a.

10. I have seen from the Court documents in these proceedings that Ron and Deborah have alleged that:

b. Genene and I were in a partnership with Abingdon Court [Consulting] Pty Ltd (Abingdon Court), Ron and Deborah's company (although no plea is made about the partnership making losses) (Amended Defence dated 16 November 2017); and

c. Ron, Deborah, Genene and I were in a partnership, alternatively Genene and I were in a partnership with Abingdon Court (although no plea is made about the partnership making losses (Minute of Re‑Amended Defence dated 15 December 2017).

11. The first time that Ron and Deborah alleged any partnership was in a letter from their lawyers dated 26 January 2017.

13. So far as paragraphs 10b, 10c and 11 are concerned, it had never occurred to me that Deb and I could not deal with the land owned by Abingdon Court Consulting Pty Ltd as if it were ours because we are and have always been the sole directors and shareholders of Abingdon Court. However, I am advised by our present solicitors and now understand that as the land being contributed was owned by Abingdon Court any profit that might have been earned from the arrangement Robert and I had would have belonged to it and that therefore, legally speaking, the arrangement with Robert and Genene was with Abingdon Court.

14. I was advised by our present solicitors that in circumstances where it was Deb and I being sued for repayment of an alleged loan and interest, we could not counterclaim for a contribution to any losses suffered by the partnership because other than being the sole directors and shareholders of Abingdon Court, it was Abingdon Court which had suffered those losses and not us. Our advice is that rather than us pursuing a counterclaim which we would have no personal standing to do, Abingdon Court will need to bring a separate claim against Robert and Genene if it wants to recover those losses.

12. I verily believe that Ron and Deborah have no defence to the claims against them and are defending merely for the purposes of delay. Further, I verily believe that the defence(s) raised are inherently incredible, by reason of the following matters:

p. Genene and I commenced proceedings in New Zealand for repayment of the loan on 30 November 2016. On 26 January 2017, our New Zealand lawyers received a letter from Ron and Deborah's lawyers. Attached hereto and marked with the letters 'RLF‑23' is a true copy of this letter. This letter said that 'Prior to the loan agreement being entered into, we are advised that our respective clients agreed, albeit informally, to enter into a partnership with the intention of making a profit';

q. This was the first time that Ron and Deborah alleged a partnership agreement. At no time did we ever:

(i) receive partnership accounts or business documents;

(ii) contact accountants, contractors, buyers or sellers on behalf of or in relation the business;

(iii) sign, get asked to sign, be provided with or see any of the land contracts that Ron and Deborah or their companies entered into; or

(iv) get consulted with by Rona and Deborah about the running of their landholdings or their building business.

15. Contrary to what Robert says in paragraph 12 for the reasons set out above and to those which I will refer below, I believe Deb and I have a good defence to the claims Robert and Genene have made in these proceedings. For ease of reference, I will use the same headings and sub-paragraph letters as Robert has used in paragraph 12:

q. In relation to paragraph 12q, I concede that it may well have been the first time that the word 'partnership' had been used. As I have said, the reason for that is because Robert and I are not lawyers and at no time did we sit down together and put a label on what it was we were doing. I never called it a partnership and he never called it a loan. Those sort of things just didn't cross our minds and it wasn't until Robert involved his lawyers forcing me to go to mine that they (Cavell Leitch) said to me that in their opinion the arrangement we had was what they called a 'loose partnership'. When I engaged lawyers here they also advised me that they thought the circumstances described a joint undertaking such as a partnership or joint venture.

In relation to the numbered sub‑paragraphs to paragraph 12q, I say -

i. This is correct. My intention was that all this would be done in the final 'wash up' when we had some certainty of the final position;

ii. This is probably also correct because as I as in Perth where the land was and also because I was going to be the builder, I was dealing with those matters;

iii. They did not need to. The original blocks contributed were owned by Abingdon Court and for the sake of convenience, all subsequent blocks were also going to bought by Abingdon Court, I certainly kept Robert informed about plans to buy additional blocks;

iv. I was in regular contact with Robert and tried to keep him informed of all important developments. I spoke to him on the telephone often about how things were going and, when they visited Perth, discussed matters with him and showed him the blocks of land and the plans. In particular, I discussed construction progress, when properties were going to market, asking prices, length of time sales were taking and the eventual selling price.

Partnership allegation, alleging different parties to agreement

13. On 17 November 2017, Ron and Deborah filed and served an Amended Defence which alleged that Ron and Deborah were not parties to the agreement and it was in fact a partnership between Genene and I and Abingdon Court.

Partnership allegation, alleging different parties to agreement

16. As would be clear from the court file, the allegation made in paragraph 13 is correct. As I have already said, the reason that that was done was because my lawyer advised me that the land was being contributed by Abingdon Court and not us and explained to me that just because Deb and I were the sole directors and shareholders of Abingdon Court, that did not mean that its assets were our assets. Until then, I didn't appreciate that there was any difference. This was also the reason why we discontinued the counterclaim. We were told by our lawyers and believe that if anyone had the right to counterclaim it was Abingdon Court, not us and because Abingdon Court was not a party to the action, if it wanted to claim for the losses it had incurred we have no standing to counterclaim and it would have to bring a separate claim.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of RW Fraser sworn 31 January 2018.

[2] Plaintiffs' minute of proposed orders filed 27 March 2019.

[3] Defendants' written outline of submissions par 1.

[4] Defendants' written outline of submissions par 2.

[5] Indorsement of claim to the writ of summons filed 20 June 2017 in District Court Action CIV 2151 of 2017.

[6] Defence, set-off and counterclaim filed 2 August 2017 par 5.1 - 5.6.

[7] Defence, set-off and counterclaim filed 2 August 2017 par 6.1 - 6.5.

[8] Defence, set-off and counterclaim filed 2 August 2017 par 7 - 11.

[9] Defence, set-off and counterclaim filed on 2 August 2017 par 12.

[10] Defence, set-off and counterclaim filed on 2 August 2017 par 25.

[11] Amended defence filed on 16 November 2017 par 12.

[12] Amended defence filed on 16 November 2017 par 13.

[13] Amended defence filed on 16 November 2017 par 15.

[14] Defendants' written outline of submissions par 8-10.

[15] Affidavit of GM Scott affirmed 7 December 2017 in support of the plaintiffs' minute of proposed orders dated 7 December 2017 par 6.

[16] In the alternative, Robert and Genene sought orders to strike out the whole (alternatively par 5, 6, 12, 13 and 18) of the amended defence filed 16 November 2017.

[17] Affidavit of RW Fraser sworn 16 February 2018 par 5.

[18] Archer Capital 4A Pty Ltd v Sage Group Plc (No 2) [2013] FCA 1098; (2013) 306 ALR 384 [100] (Wigney J), citing with approval New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 [54]. See also Lanco Resources Australia Pty Ltd v Griffin Energy Group Pty Ltd (subject to a deed of company arrangement) [No 3] [2017] WASC 51 [37].

[19]As summarised by Kenneth Martin J in Lanco Resources Australia Pty Ltd v Griffin Energy Group Pty Ltd (subject to a deed of company arrangement) [No 3] [2017] WASC 51 [37], applying the principle explained by the High Court in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 and then by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499.

[20] Defendants' supplementary list of authorities - Plaintiffs' claim in relation to waiver of privilege filed 27 March 2019.

[21] Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118 (Whelan, Kyrou and McLeish JJA).

[22] Cargill Aust Ltd v Viterra Malt Pty Ltd (No 7) [2018] VSC 99.

[23] Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 [43]; Adelaide Steamship Co Ltd v Spalvins [1998] FCA 144; (1998) 81 FCR 360, 371; [1998] FCA 144; 152 ALR 418.

[24] Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118 [14] and [32].

[25] In framing [37] - [43] of these reasons, I have had regard to and substantially adopted par 20(a) - (g) of the plaintiffs' written outline of submissions.

[26] Plaintiffs' written outline of submissions par 22.

[27] Concession made by counsel for the defendants, see ts 27 (27 March 2019).

[28] Defendants' written outline of submissions par 16, citing Mann [30]-[32], and Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275 [49].

[29] Plaintiffs' written outline of submissions par 21; referring to the letter from Cullen Macleod dated 5 June 2018 annexed to the affidavit of GM Scott affirmed on 5 October 2018 as 'GMS-11'.

[30] Defendants' written outline of submissions par 20.

[32] Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 723 [20].