BETWEEN : GOLDACE HOLDINGS PTY LTD (ACN 082 875 134)

CASH CONVERTERS INTERNATIONAL LTD (ACN 069 141 546)

Practice and procedure - Application for discovery of particular documents - Claim for privilege - Turns on its own facts

Alfred Crompton Amusement Machines Ltd v Commissioners of Customs & Excise (No 2) [1972] 2 All ER 353

Allen, Allen & Hemsley v Deputy Commissioner of Taxation (NSW) & Ors (1988) 81 ALR 617

Astra-National Productions Ltd v Neo-Art Productions Ltd [1928] WN 218

Attorney-General (NT) v Kearney [1985] HCA 60; (1985) 158 CLR 500

Australian Hospital Care (Pindara) Pty Ltd v Duggan (No 2) [1999] VSC 131

Baker v Campbell [1983] HCA 39; (1983) 49 ALR 385

Balabel v Air India [1988] Ch 317 (CA)

Beecham Group Ltd v Bristol-Myers Co [1979] VicRp 27; [1979] VR 273

Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239

Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co [1882] 11 QBD 55

Dalleagles Pty Ltd v ASC (1991) 4 WAR 325

Douglas-Hill v Parke-Davis Pty Ltd (1990) 54 SASR 346

Edmiston v British Transport Commission [1956] 1 QB 191

Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 168 ALR 123

Format Communications Manufacturing Ltd v ITT (UK) Ltd [1983] FSR 473

Fuller v Wood [1913] VicLawRp 23; [1913] VLR 92

Grant v Downs [1976] HCA 63; (1976) 135 CLR 674

Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627

Middleton v Western Australia (1996) 17 WAR 201

O'Reilly & Ors v Commissioner of State Bank of Victoria & Ors [1983] HCA 47; (1982) 44 ALR 27

Pardy's Mozambique Syndicate Ltd v Alexander [1903] 1 Ch D 191

Pegrum v Fatharly (1996) 14 WAR 92

PDM Australia Pty Ltd v Kellogg Overseas Corp & Ors, unreported; SCt of WA; Library No 6646; 26 March 1987

Rosenberg v Jaine [1983] NZHC 6; [1983] NZLR 1

Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178

Smith's Weekly Publishing Co Ltd v Sunday Times Newspaper Co Ltd [1923] HCA 9; (1923) 31 CLR 552

Southern Equities Corp Ltd v Western Australian Government Holdings Ltd (1993) 10 WAR 1

Turner v Davies [1981] 2 NSWLR 324

Waterford v Commonwealth of Australia [1987] HCA 25; (1987) 163 CLR 54

Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd [1980] FCA 26; (1980) 29 ALR 261

1 MASTER SANDERSON: This is the plaintiff's application for an order for further and better discovery against both defendants and for orders for inspection of certain documents of both defendants in respect of which the defendants have made a claim for privilege. At the conclusion of the hearing, I dismissed both applications brought against the second defendants. As against the first defendant, I ordered that further and better discovery be provided. I also ordered the first defendant to file a further affidavit better describing the documents over which privilege was claimed. I indicated to the parties I would publish my reasons for decision. These are those reasons.

2 This matter has been before the Court on at least two previous occasions in relation to interlocutory applications. Most recently, I dealt with an application to strike out certain paragraphs of the statement of claim: see Goldace Holdings Pty Ltd v Vodafone Network Pty Ltd [2000] WASC 248. In that decision, I provided a brief outline of the facts. I do not propose to repeat what I said in my earlier decisions. Insofar as it is necessary for me to detail the facts, I would incorporate the summary provided in my earlier reasons by reference.

3 The plaintiff made its applications by chamber summons dated 21 July 2000. Prior to issuing the chamber summons, the plaintiff had corresponded with solicitors for both defendants outlining its concerns about the discovery. Correspondence had failed to resolve the issues between the parties. Subsequent to the issue of the chamber summons, both defendants filed further affidavits of discovery. The first defendant filed an affidavit of Justine Maree Larkin verifying amended list of documents, declared and affirmed on 8 September 2000. The second defendants filed a supplementary affidavit of Michael Ian Cooke verifying supplementary list of documents, sworn 11 September 2000. They also filed an affidavit of Brian Cumins verifying further supplementary list of documents, sworn 17 October 2000. The last of these affidavits was filed and served two days before the hearing. The plaintiff's solicitors had not had the opportunity to inspect any of the documents referred in the affidavit and they were, therefore, necessarily restricted in dealing with the application. Nonetheless, the plaintiff elected to proceed. In my view, in the circumstances that was the proper approach to adopt.

4 The applications for further and better discovery were, properly considered, applications for discovery of particular documents. They were brought under O 26 r 6. Rule 6(3) is in the following terms:

"An application under this Rule must be supported by an affidavit stating the belief of the deponent that the party from whom discovery is sought under this Rule has, or at some time had, in his possession, custody or power the document or class of document specified or described in the application and that it relates to one or more of the matters in question in the cause or matter."

5 I will deal first with the application brought against the first defendant. The class of documents of which the plaintiff sought discovery is not specified in the chamber summons. Rather, there is reference in the chamber summons to a letter from the plaintiff's solicitors to the first defendant's solicitors dated 6 June 2000. A copy of this letter appears as annexure "PK3" to the affidavit of Peter Karageorge, sworn 21 July 2000 and filed in support of the application. Even in that letter, the documents the plaintiff seeks to have discovered are not precisely described. However, they can be broken down into two broad categories. First, the plaintiff says that the first defendant should discover documents relating to dealings between the second defendants and various companies associated with the first defendant in relation to dealings concerning offshore enterprises. During the course of the hearing, counsel for the plaintiff conceded, in the light of evidence filed on behalf of the first defendant, that this application could not succeed. It was not pressed and, in my view, properly so. No more need be said about it.

6 The second broad area of documents of which discovery was sought related to financial dealings between the first defendant and the second defendants subsequent to the termination of the second defendants' agreement with the plaintiff. The first defendant's response was that the plaintiff had only produced a contentious affidavit that such documents existed. Without more, no order could be made: see Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341 per Menzies J at 344; John Allan Ltd v Keegan [1968] WAR 125 per Wolff CJ at 128. However, the affidavit of Cumins verifying the further supplementary list of documents makes it plain that documents relating to the financial relationship between the first defendant and the second defendants exist. For instance, document FS16 is described by Cumins as "Bundle of Vodafone cheque advices"; document FS20 is described as "Bundle of Vodafone commission statements". Clearly, documents related to a matter in issue between the parties exist and they should be discovered. On this basis, I was prepared to order that the first defendant provide further and better discovery of documents.

7 In relation to the second defendants, the plaintiff relied on a further affidavit of Karageorge, also sworn 21 July 2000. That affidavit had, as annexure "PK1", a letter from the plaintiff's solicitors to the second defendants' solicitors, outlining documents it was said had not been discovered. Subsequent to that affidavit, the further discovery affidavits of both Cooke and Cumins were filed. As I have indicated, the affidavit of Cumins was filed two days before the hearing. While reserving his position because inspection had not taken place, counsel for the plaintiff conceded during the course of the hearing that it now appeared as though complete discovery had been provided. In light of that concession, I made no orders against the second defendants in relation to the chamber summons.

8 In relation to both defendants, the plaintiff sought an order for inspection of documents over which the defendants claimed privilege pursuant to O 26 r 12. A party who attacks a claim for privilege faces a difficult task. Without the advantage of seeing the document, the applicant must produce some evidence to at least raise doubt as to whether or not privilege attaches to that document. Given the difficult task faced by an applicant, it is essential that the documents over which privilege is claimed are properly described. That means the documents should be accurately described so as to give a clear indication of their subject-matter and when they came into existence, but without disclosing the contents of the document: see Alfred Crompton Amusement Machines Ltd v Commissioners of Customs & Excise [1971] 2 All ER 843 at 847; Milbank v Milbank [1900] 1 Ch 376 at 383 - 384. It is clear that some of the descriptions of documents over which privilege is claimed by the first defendant lack clarity of description. For instance, document 9 in part 2 of the first schedule (annexure "A" to Larkin's affidavit) is described as "Facsimile from Justine Larkin to Paul Heath re: Goldace Holdings". There is no indication as to why this document should be privileged. This inadequacy of description is repeated throughout part 2 of the first schedule. The description of documents is, generally speaking, inadequate and for that reason I ordered that a further affidavit be filed with the documents over which privilege is claimed better described.

9 The same criticism cannot be made of the discovery provided by the second defendants. By way of example, document S44, to be found in part 2 of the first schedule in annexure "A" of Cooke's supplementary affidavit of 11 September 2000, reads as follows:

"Facsimile from Simon Bailey to Michael Cooke forwarding Goldace's facsimile correspondence to franchisees to Michael Cooke seeking legal advice for franchisees"

10 This description clearly indicates the nature of the document concerned and the basis upon which the privilege is claimed. No criticism can properly be made of the description and, in reality, none was made by the plaintiff's counsel.

11 What the plaintiff argued was that the description of the documents contained in Cooke's affidavit was such as to warrant, at the very least, the documents being inspected by the court to ascertain whether or not they should be available to the plaintiff for inspection.

12 The question of what evidence must be produced by a party seeking to challenge a claim for privilege was considered by the Full Court of this Court in CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19. This case was concerned with a claim for privilege based on public interest immunity. However, the principles apply equally to a claim such as this where privilege is based either on so-called litigation privilege or client advice privilege. The Court (Owen and Steytler JJ) concluded at par 30

"... The discretion conferred by O 26 r 12(2) to carry out a private inspection of documents in the course of an application for production under O 26 r 12(1) is of the broadest kind. Before the discretion is enlivened, the court must be satisfied that the documents are relevant to matters in issue. Beyond that it is not necessary, and nor would it be desirable, to attempt a definition of a threshold test. However, in exercising the discretion the judicial officer must not lose sight of the fact that the power to inspect exists for the purpose of deciding whether the claim of privilege is 'unfounded or mistaken'. In a case where the documents are prima facie immune from compulsory disclosure but are relevant to matters in issue in the litigation the court must go on to conduct the balancing exercise described in the authorities. The discretion, while a broad one, must be exercised judicially. There should be something in the circumstances of the case which excites the attention of the court to the view that the process of determining the challenge to the immunity claim will be aided by inspection."

13 In my view, there was nothing in this case which could lead to a view that inspecting the documents would aid in determining the challenge to the claim for privilege. Counsel's submissions did not refer to any evidence filed either by the plaintiff or the defendants. The attack was solely on the basis of doubt it was said might arise given the nature of the documents and their description. With respect, it seems to me in each case the description of the document provided by the second defendants is full and complete and suggests nothing other than that the claim for privilege is properly made. I can see no basis in any of the material that would justify my inspecting the documents. In the circumstances, then, I would dismiss the plaintiff's application for inspection of the second defendants' documents over which privilege is claimed.

14 It was for these reasons I made the orders that I did in relation to the plaintiff's applications.