Hooke v Bux Global Limited

Federal Court of Australia|2018-08-14|Before: Colvin J, Smith J

The parties are to file within three business days an agreed short minute of orders reflecting these reasons.
Liberty to apply on two days notice.
Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BANKS-SMITH J: 1 The plaintiffs in this matter dispute various claims to legal professional privilege claimed by the defendant, Bux Global Limited. 2 On 11 July 2018 Colvin J made orders to the effect that I am to determine outstanding legal professional privilege claims by inspecting identified documents referred to in an affidavit of Tharun Kuppanda filed 26 June 2018: Hooke v Bux Global Limited (No 3) [2018] FCA 1038. 3 The documents provided to me comprise a set of emails and attachments passing between Bux Global, its solicitors K&L Gates and Boardroom Pty Ltd (Boardroom). Boardroom provides corporate secretarial services to Bux Global. It is not in issue that Boardroom has responsibility for maintaining the register of shareholders for Bux Global. I note, for example, the copy documents discovered by Bux Global and annexed to the affidavit of Caroline Spencer filed 2 July 2018 that confirm that role. A company is obliged to maintain, amongst other things, a register of members (Part 2C Corporations Act 2001 (Cth)). 4 I respectfully adopt Colvin J's summary of the background issue (at [21]): As I have noted, the issue raised by the plaintiffs concerning the claim to privilege in respect of the email communications extends from the involvement of Boardroom in those communications. Those submissions were advanced in the following chronological context which was not disputed: (1) on 10 May 2018, Bux Global brought an application for summary dismissal of the proceedings on the basis that the plaintiffs are not members of Bux Global; (2) on 15 May 2018, the defendant provided by way of disclosure a copy of its share register which did not show any shareholding by the plaintiffs but did show a shareholding described as 'Shampagne Corporation Ltd [non rollover account]'; and (3) on 16 May 2018, in answer to a subpoena issued by the plaintiffs, ASIC produced two documents including a holdings report for Bux Global which showed the plaintiffs as shareholders as at 1 May 2018 and did not show any 'non rollover account'. 5 Initially a claim for privilege was made on a general basis (affidavit of Mr Kuppanda filed 12 June 2018). It appears the relevant documents were within a bundle described as: Bundle of correspondence between the defendant's officers, agents and employees, and its solicitors and counsel, including notes, memoranda, letters, opinions, statements from witnesses, proofs of evidence, drafts of court documents and other drafts, made or produced in contemplation of litigation or for the dominant purpose of giving or obtaining legal advice or for use in legal proceedings. 6 Mr Kuppanda's affidavit filed 26 June 2018 provided a further explanation. The documents provided to me for inspection and the asserted privilege claims are described in that affidavit as follows: No. Description of document Date of Document Grounds of privilege 7(a) Email from K&L Gates to the defendant and Boardroom with attachment 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving or obtaining legal advice and litigation 7(b) Email from Boardroom to K&L Gates and the defendant with attachment 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving or obtaining legal advice and litigation 7(c) Email from Boardroom to K&L Gates and the defendant with attachment 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving or obtaining legal advice and litigation 7(e) Email from K&L Gates to Boardroom and the defendant with attachments 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates and Boardroom made or produced for the dominant purpose of giving or obtaining legal advice and litigation 7(f) Email from Boardroom to K&L Gates and the defendant with attachment 14 May 2018 Legal professional privilege: the document contains confidential communications between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving or obtaining legal advice and litigation 7(g) Email from the defendant to Boardroom and K&L Gates with attachment 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving legal advice and litigation 7(h) Email from Boardroom to the defendant and K&L Gates with attachments 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving legal advice and litigation 7(i) Email from K&L Gates to Boardroom and the defendant 14 May 20187 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving legal advice and litigation 7(j) Email from K&L Gates to Boardroom and the defendant 14 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving legal advice and litigation 7(k) Email from Boardroom to K&L Gates and the defendant with attachment 15 May 2018 Legal professional privilege: the document contains a confidential communication between K&L Gates, the defendant and Boardroom made or produced for the dominant purpose of giving legal advice and litigation

7 The plaintiffs submitted before Colvin J that: (a) it can be inferred that there was a change to the share register of Bux Global sometime between 1 May 2018 and 14 May 2018 by which the plaintiffs' shareholdings were removed from the register and the 'non rollover account' holding was inserted; (b) the plaintiffs have pressed Bux Global for disclosure of a category of documents relating to that change and had been told that the only documents in such a category were privileged; (c) it can be inferred that by reason of the date and description of the identified documents that they are communications relating to the apparent change in the share register, and such communications were for the purpose of providing instructions to Boardroom concerning changes to the share register rather than for the purpose of providing legal advice to Bux Global; and (d) merely because a communication involves a solicitor does not mean it is privileged. 8 Bux Global submitted that: (a) the emails were created after the proceedings commenced; (b) the parties to the emails include K&L Gates; (c) K&L Gates are the lawyers for the defendant in these proceedings; (d) it is the purpose for which the documents are prepared that is relevant: the identified emails involve K&L Gates after this proceeding was commenced and 'by reason of those facts alone that is sufficient for the court to conclude, absent some evidence or reason provided by other factors, that those documents have been prepared for the requisite dominant purpose' (transcript 9 July 2018); (e) therefore it can be concluded the documents contain confidential communications made or produced for the dominant purpose of giving or obtaining legal advice and litigation. 9 Colvin J noted various difficulties with the manner in which Mr Kuppanda asserted the privilege claim. For example, there are no particulars as to why Boardroom was included in the email exchanges; the claims to privilege are formulaic and do no more than state the fact that the email communications were confidential and 'made or produced for the dominant purpose of giving or obtaining legal advice and litigation'; no attempt was made to engage with the timing of the emails and the apparent changes to the share registry; no attempt was made to deal with the effect on any privilege of the sharing of the documents with Boardroom. 10 Having inspected the documents, there are some additional relevant observations: (a) legal professional privilege may take two forms - advice privilege or litigation privilege. Legal advice privilege covers communications between a lawyer in his professional capacity and his client if they are confidential and for the dominant purpose of seeking or giving legal advice. Litigation privilege covers confidential communications made after litigation is commenced or contemplated, between a lawyer and his client, or third parties for the dominant purpose of such litigation, and includes seeking or giving advice in relation to it and obtaining information for the purposes of the litigation (as summarised in CMA Assets Pty Ltd v John Holland Pty Ltd [No 3] [2012] WASC 501 at [4]); (b) Bux Global asserts privilege for each email and attachment under both the advice and litigation heads of privilege without addressing the elements that apply with respect to each; (c) the recitation used by Bux Global does not state whether the communication in fact discloses or reveals the nature or content of legal advice; (d) a communication which states the subject matter of legal advice rather than disclosing the nature or content of legal advice is not of itself privileged: Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181 at [65], [87]; CMA Assets Pty Ltd v John Holland Pty Ltd at [29]; (e) privilege attaches to a communication. It does not necessarily attach to a document as a whole: AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at [44]. There must be careful consideration of whether parts of any email or email chain should be redacted, rather than by default seeking blanket protection from inspection; (f) in this case, Bux Global describes a lead email followed by a chain of emails as one email, and the affidavit provides no assistance as to whether privilege is claimed for the lead email only, for each email in the subsequent chain or for some emails only; (g) there is no differentiation between the email and the attachment: they are collectively referred to as 'the document' and it is unclear which part of the email or attachment is said to attract the privilege claim; and (h) no attempt has been made to redact those parts of emails or attachments which, by inference, I assume Bux Global asserts disclose the content or nature of legal advice or otherwise are the subject of litigation privilege. 11 In my view, the affidavit of 26 June 2018 does not sufficiently define or particularise the privilege claims. The authorities emphasise the need for focused and specific evidence in order to ground a claim of privilege: Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601 at [18]. It is not enough for a party to merely assert the existence of the privilege, deliver the documents to the presiding judicial officer and request him or her to analyse and determine whether there is a proper basis for the claim: Schreuder v Murray (No 2) [2009] WASCA 145; (2009) 41 WAR 169 at [62]. It seems to have been assumed by Bux Global that any deficiencies as to the evidentiary basis or particularisation can be cured by an inspection of the documents. 12 However, be that as it may, I have the advantage of having inspected the documents. I am able to discern that there are within the relevant documents communications that tend to disclose the nature and content of confidential legal advice or where the nature and content of the privileged communication may be inferred from the documents: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 at 569 . Doubts on the part of the plaintiffs as to the veracity of the privilege claims may have been quelled had the task of addressing the privilege claims been properly undertaken on the part of Bux Global in the first place. 13 A preliminary matter is whether the claim to both advice and litigation privilege is properly made. In my view, claims are validly made for legal advice privilege for all but parts of a small number of documents. As did Colvin J in Hooke v Bux Global Limited (No 3), I respectfully adopt the summary of the relevant principles as to legal advice privilege as collected by Thawley J in Kenquist Nominees Pty Ltd v Campbell (No 5) [2018] FCA 853 at [9]-[15]. I do not consider claims can be maintained for litigation privilege, because I am not satisfied that Bux Global has met the onus of establishing that the communications were made for the dominant purpose of litigation. Quite clearly, litigation is ongoing between the parties. However, in my view the dominant purpose of the communications/documents was accurate and proper compliance by Bux Global with its statutory obligations. For example, the fact that certain corporate records are required and may be discoverable documents in proceedings does not mean that they are therefore created for the dominant purpose of the proceedings. 14 However, Bux Global was entitled to take legal advice to assist it in complying with its statutory obligations. To the extent a privilege claim is established for the identified documents, it is established on the basis of Bux Global's right to maintain the confidentiality of such legal advice. I will now turn to each document. I will utilise the nomenclature of 'lead' email, second email etc, as used and explained in Kenquist Nominees Pty Ltd v Campbell (No 5) at [19].

Document 7(a) 15 Document 7(a) is a lead email from Nicholas Brown of K&L Gates to Tharun Kuppanda and David Parkinson of Boardroom, copied to Philip Murray of K&L Gates and Andrew Webber of Bux Global. It discloses a request for information sought in order to provide legal advice and also discloses the nature and content of legal advice. That is its dominant purpose. The attachment is provided for the same purpose. The fact that the email was sent to Boardroom gives rise to a question of waiver, a matter on which I received no submissions or evidence from Bux Global. However, I am prepared to infer from the circumstances of the communication that the disclosure was not inconsistent with maintaining confidentiality in the privileged communication (and this applies to all the below communications that include Boardroom). The email and attachment are privileged.

Document 7(b) 16 Document 7(b) is a lead email in a chain of two from David Parkinson replying to all recipients of document 7(a) and also copying the reply to Allan Nicol and Georgette Elias, both of Boardroom. There is no evidence as to the respective roles of the various Boardroom recipients, but I assume that the only lawyers are those from K&L Gates and no issue as to in-house lawyers arises. Mr Parkinson seeks clarification of matters the subject of document 7(a) and the communications within the email tend to disclose the nature and content of legal advice that was being obtained. It was sent for that dominant purpose. It is privileged. The second email is a copy of document 7(a) and it is privileged for the reasons already given.

Document 7(c) 17 Document 7(c) is an email from David Parkinson to Nicholas Brown and Tharun Kuppanda, copied to Philip Murray, Andrew Webber, Allan Nicol and Georgette Elias and an attachment. The attachment appears to be by way of draft and the nature of legal advice that has been sought and obtained tends to be disclosed by both the lead email and the attachment. Both are privileged. The second email is a copy of document 7(a) and is privileged for the reasons already given.

Document 7(e) 18 Document 7(e) is an email from Philip Murray to David Parkinson, Nicholas Brown and Tharun Kuppanda, copied to Andrew Webber, Allan Nicol and Georgette Elias. The lead email attaches a document for the purpose of seeking further instructions for legal advice. The attachment predates the date of the lead emails before me. It has been provided under cover of an email properly the subject of legal advice privilege and it is also privileged as relevant to the content of the email: Commissioner of Australian Federal Police v Propend Finance Pty Ltd at 571. 19 I do not know whether the attachment has been discovered separately and without any claim to privilege. 20 The second email is a copy of document 7(c). The third email is a copy of document 7(a). Both are privileged for the reasons already given.

Document 7(f) 21 Document 7(f) is an email from David Parkinson to Nicholas Brown and Tharun Kuppanda, copied to Philip Murray, Andrew Webber, Allan Nicol and Georgette Elias said to attach two worksheets, although I have only one page. I suspect this is because the attachment appears to be in .xlsx format and the second worksheet may be embedded if provided electronically. Alternatively, the second worksheet may have been separately discovered. Regardless, I can deal only with the documents provided to me. 22 The lead email contains information and instructions provided for the purpose of legal advice and would tend to disclose the nature and content of such advice. On its face that is the dominant purpose for which it is provided. It is privileged. The attachment is privileged for the same reasons. 23 The second email is a copy of document 7(a) and is privileged for the reasons already given.

Document 7(g) 24 Document 7(g) is an email from Andrew Webber to David Parkinson, copied to Nicholas Brown, Tharun Kuppanda, Philip Murray, Allan Nicol and Georgette Elias. The lead email contains a communication from which the nature and substance of legal advice that has been provided and is requested can be inferred. It is privileged. The attachment is privileged for the same reason, in the particular circumstances of its attachment to the email. The attachment is described as 'final'. If that is accurate, then it may also have been separately discovered. 25 The second email is a copy of the lead email of document 7(f). The third email is a copy of document 7(a). They are privileged for reasons already given.

Document 7(h) 26 This is an email from David Parkinson to Andrew Webber, copied to Nicholas Brown, Tharun Kuppanda, Philip Murray, Allan Nicol and Georgette Elias with two attachments. 27 I do not consider the first sentence of the lead email to be privileged. It does not disclose or seek any confidential legal advice or give rise to an inference to that effect. It simply refers to the fact that it attaches a copy of the share register for Bux Global as at 4.00 pm that day. The first attachment is the copy register. The second sentence of the email is privileged as disclosing by inference the nature and content of legal advice about the second attachment. Similarly, the second attachment is privileged. The email should be produced in redacted form, together with the first attachment. 28 The second email is an email from Andrew Webber to David Parkinson, copied to Nicholas Brown, Tharun Kuppanda, Philip Murray, Allan Nicol and Georgette Elias. The email forwards a copy of an email between Andrew Webber to David Parkinson. Neither email contains a privileged communication. Neither discloses any confidential legal advice or gives rise to an inference to that effect. 29 The third email is another email from Andrew Webber to David Parkinson, copied to Nicholas Brown, Tharun Kuppanda, Philip Murray, Allan Nicol and Georgette Elias. The email forwards a copy of an email from David Parkinson to Andrew Webber. Neither email contains a privileged communication. Neither discloses any confidential legal advice or gives rise to an inference to that effect. 30 The fourth email is a copy of document 7(g) and is privileged for the reasons already given. It appears to forward or reply to a copy of document 7(f), which is also privileged for reasons already given. The fifth email is a further copy of document 7(a) and so is privileged for the reasons already given.

Document 7(i) 31 Document 7(i) is an email from Philip Murray to David Parkinson and Andrew Webber, copied to Nicholas Brown, Tharun Kuppanda, Allan Nicol and Georgette Elias. The lead email does not disclose any confidential legal advice but seeks to clarify a non-confidential typographical matter. It is not privileged. 32 The second email forming part of document 7(i) is a copy of document 7(h) less attachments, and is subject to the same determination as above with respect to document 7(h). That is, privilege continues to apply to those parts of document 7(h) for which the claim is established.

Document 7(j) 33 Document 7(j) is an email from Philip Murray to David Parkinson and Andrew Webber, copied to Nicholas Brown, Tharun Kuppanda, Allan Nicol and Georgette Elias. The lead email asks a question that, when read with document 7(k) (see below), requires legal advice and therefore tends to disclose content of a confidential legal nature. It is privileged. The second email is a copy of document 7(i). It is to be treated in the same manner as document 7(i). The fact that a copy of document 7(i) is attached to document 7(j) does not lead to a conclusion that all of the emails that comprise document 7(i) become privileged. The determination above with respect to document 7(i) continues to apply. The question asked in document 7(j) is discrete.

Document 7(k) 34 Document 7(k) is an email from David Parkinson to Philip Murray and Andrew Webber, copied to Nicholas Brown, Tharun Kuppanda, Allan Nicol and Georgette Elias. It seeks advice of a confidential legal nature with respect to the question asked by document 7(j) and is privileged. The second email is a copy of document 7(j). The same position as set out above with respect to documents 7(j) and 7(i) continues to apply.

Conclusion 35 The parties should file within three business days an agreed short minute of orders reflecting these reasons. There will be liberty to apply. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Banks-Smith.

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