Jaeger v Bowden

Supreme Court of NSW|2015-06-22|Before: Robb J

Introduction

The plaintiff in these proceedings, Ms Kim Frances Jaeger (Ms Jaeger), sues in her capacity as executor of the estate of the late Adelaide Emily Bowden (Mrs Bowden), who was her mother.
The first defendant, Mr Stephen James Bowden (Mr Bowden), was Mrs Bowden's son, and is Ms Jaeger's sister.
The third to tenth defendants are companies owned and controlled by Mr Bowden. For the purposes of determining the applications that are before the court, it will be sufficient to proceed on the basis that Mr Bowden's interests are relevantly the same as those of the companies.
The second defendant, Ms Jane Louise Bowden, is the former wife of Mr Bowden. She did not make any submissions in relation to the relief claimed by the other parties in their notices of motion. As I understand it, the second defendant's interests are similar to those of the other defendants in relation to the present applications.
As the second defendant did not take an active part in the argument, it will be convenient to refer to the first and the third to tenth defendants collectively as the "defendants".
The principal proceedings have been set down for hearing on 2 November 2015, for a period of 10 days, before me.

Background

For the purposes of these applications, the defendants agreed that the background to the proceedings set out in pars 4 to 20 of an affidavit of Karen Rita Beashel, who is a solicitor acting for Ms Jaeger, made on 12 June 2015, is largely correct.
It is sufficient to record that Mr Bowden and his mother were partners in a partnership, which conducted the business of the Hurstville Ritz Hotel.
The proceedings principally concern the effect of a series of four deeds executed in 2003 (the 2003 Deeds). Prior to the execution of the 2003 Deeds, Mr Bowden and his mother each held a 50% interest in the partnership, and a 50% interest in the freehold property upon which the partnership business was conducted.
The deed that is most relevant for the purposes of the present applications is a deed of assignment dated 30 December 2003, between Mr Bowden and his mother. Recital H to the deed of assignment provided: [Mrs Bowden] has requested that [Mr Bowden] acquire from her one half of her interest in the Partnership, goodwill of the Hotel business and the licence (but not the freehold) (and being the same interests originally acquired by [Mrs Bowden] in 1978 and 1982 and not the interest acquired by [Mrs Bowden] in 1994 consequent upon the death of [Mrs Bowden's husband]), in consideration of the payment of the Purchase Price by [Mr Bowden] to [Mrs Bowden].
Mrs Bowden originally held her 50% interest in the partnership and the freehold property jointly with her late husband. Those interests were acquired before the date upon which acquisitions of property would be liable to payment of capital gains tax (CGT) as a result of later sales. Mrs Bowden's husband died after that date, and Mrs Bowden acquired his interest in the partnership and the freehold property by survivorship. I infer from the material in evidence, but only in a general way for the purposes of the present application, that a desire to avoid Mrs Bowden incurring an obligation to pay capital gains tax, as well as Mr Bowden having to pay stamp duty on the transfer of a half interest in the freehold, may have influenced the structure of the transaction. That may be reflected in the agreement that Mrs Bowden would sell one half of her interest in the partnership, but only the half to which she personally became entitled before the introduction of capital gains tax; as well as the fact that Mrs Bowden retained her interest in the freehold.
By cl 3 of the deed of assignment, Mrs Bowden assigned to Mr Bowden half of her 50% interest in the partnership (as described in Recital H) for a price of $3 million.
The evidence discloses, put broadly, that one reason why Mrs Bowden decided to sell half of her interest in the partnership to Mr Bowden was that she wanted to make a gift of about $2 million to Ms Jaeger to enable her to acquire a business.
Apparently, on the same date as the deed of assignment was executed, another deed was executed between Mrs Bowden, Mr Bowden and Ms Jaeger (the copy of the deed in evidence is undated). This deed, in Recital H, referred to Mrs Bowden's intention to sell one half of her interest in the partnership to Mr Bowden, and also in Recital I to Mrs Bowden's intention to pay a substantial part of the proceeds she received from Mr Bowden to Ms Jaeger to enable her to acquire a business. Recital J then provided: As part of the [assignment deed transaction] [Mrs Bowden] has agreed to leave to [Mr Bowden] in her Will her remaining interest in the goodwill and licence and the Partnership, all her interest in the freehold property on which the Hotel stands and all her shares in the Hotel companies, and [Mr Bowden] has agreed that [Mrs Bowden] is free to leave the rest of her estate to whomsoever she thinks fit. As part of the [assignment deed transaction] [Mr Bowden] has requested that [Mrs Bowden] and [Ms Jaeger] execute this Deed].
It is sufficient to note that cl 3.1 of this deed recorded that, on the date of the deed, Mrs Bowden had executed a new will whereby she had left to Mr Bowden her interest in the goodwill and licence of the Ritz Hotel, her interest in the partnership, her interest in the freehold upon which the Ritz Hotel stands, and all her shares in the companies involved in the business. By cl 3.3, Mrs Bowden covenanted that she would not revoke, vary, delete, alter or change the provisions of her will that had the effect set out in clause 3.1.
The combined effect of the deed of assignment and Mrs Bowden's new will would be that, following Mrs Bowden's death, Mr Bowden would become the legal owner of the whole of the partnership and the freehold property, as well as all other associated interests and companies.
Mrs Bowden in fact executed a new will dated 13 November 2003 (the new will), cl 4 of which complied with her obligation in cl 3.1 of the deed referred to above.
On 29 October 2007, Mr Bowden sold the Ritz Hotel including, as I understand it, the freehold, for $52 million.
Shortly after the sale of the Ritz Hotel in 2007, Mrs Bowden sought an accounting in respect of her ongoing interest.
It is at this point that the essence of the dispute may most conveniently be set out. Put broadly, the defendants' case is that the $3 million price that Mr Bowden paid under the deed of assignment did not reflect only the value of half of Mrs Bowden's 50% interest in the partnership, but represented half of the equity of the partners in the partnership and the freehold and related interests and companies. According to Mr Bowden, the only reason for the arrangement whereby Mrs Bowden would covenant to leave him by her will the whole of the balance of her interest in the Ritz Hotel was to avoid the imposition of CGT and stamp duty. The defendants' case is that Mr Bowden became the beneficial owner of all of the interests in the Ritz Hotel from the date of the deed of assignment.
Ms Jaeger's case, as executor of Mrs Bowden's estate, is that the suite of deeds that were entered into at the end of 2003 did not have any effect on Mrs Bowden's ownership and entitlement to one half of her original 50% interest in the partnership, and her remaining half interest in the freehold, and other relevant property interests. Mrs Bowden remained entitled to receive the fruits of her continuing interests in the Ritz Hotel, and Mr Bowden would only acquire those interests upon the execution of Mrs Bowden's will after her death. Accordingly, Mr Bowden, who was the sole manager of the partnership and the Ritz Hotel generally, was obliged to account to Mrs Bowden in respect of her continuing entitlements.
In his second further amended defence, Mr Bowden raises a number of additional issues that are relevant to the present applications.
Mr Bowden pleads (in par 4(d)(i)) in response to Ms Jaeger's claim based upon the deed of assignment, that on 1 July 2003, Ms Jaeger, Mrs Bowden and Mr Bowden entered into an oral agreement (the July agreement) that was reflected in a document signed by them on that date (the 1 July memorandum) whereby Mr Bowden would acquire all of Mrs Bowden's interests in the Ritz Hotel, the Hotel business, the partnership, and the companies that operated the Hotel business, as well as the freehold property, on certain terms set out in sub-par 4(d)(i). Mr Bowden claims that the July agreement was the final agreement between the parties, by which they intended immediately to be bound, although they agreed that the terms of the agreement were to be restated in writing, which was to be a full or more precise agreement, but not different in effect.
Alternatively, the parties to the July agreement intended that there would be no departure from its terms, but performance would be conditional upon the execution of formal documents.
Mr Bowden's case is that either the July agreement takes precedence over the deed of assignment, and the other 2003 Deeds, or alternatively those deeds should be rectified in the manner sought in Mr Bowden's amended first cross-claim to reflect the terms of the July agreement.
Mr Bowden also pleads (in par 4(d)(ii)) that between April and July 2003, Mrs Bowden made a number of representations to the effect that the agreement between Mrs Bowden and Mr Bowden for the sale of the former's interests in relation to the Ritz Hotel would have effects that were consistent with Mr Bowden's present claim as the true effect of the deed of assignment and related deeds, and the July agreement.
Mr Bowden also pleads that Ms Jaeger, Mrs Bowden and he also had a common understanding, or an agreed assumption, that the effect of the transactions would be, in brief, that Mrs Bowden would relinquish her beneficial interest in, and any rights attaching to, Mrs Bowden's residual interests that were not expressly assigned by the deed of assignment. Mr Bowden claims that he relied on the common understanding and assumption in proceeding with the transactions, and in particular that he "gave instructions for the preparation of and entered into the Deeds and the Management Agreements" on that understanding (par 4(d)(iii)(B)).
Finally, Mr Bowden pleads (in par 4(d)(v)) that Ms Jaeger, as executor of Mrs Bowden's estate, is estopped from denying that Mrs Bowden held her interests that were not assigned to Mr Bowden by the deed of assignment in trust for Mr Bowden between the date of the 2003 Deeds and her death, and that the agreement was inconsistent with the common understanding and assumption.

The parties' modified claims

During the hearing of the notices of motion, the parties handed to the court a document (the joint document) that listed all of the orders sought in the notices of motion, and stated the parties' respective positions concerning the orders that should be made. This was the culmination of discussions between the parties that led in some instances to confinement of the relief sought, and concessions as to whether the orders sought were pressed, or abandoned. The final form of the document was sent to the court on 3 July 2015.
The most straightforward and convenient approach will be for the court to interpolate its consideration of the claims for relief that are still pressed into the joint document provided to the court by the parties, as that sets out the final ambit of the dispute. I will, in some respects, paraphrase the parties' description of the issues that remain in dispute.

Discovery

In her original notice of motion, Ms Jaeger sought discovery by the defendants of 10 categories of documents.
Category 1. All documents created between 1 May 2003 and 30 March 2004 inclusive, recording or disclosing advice given to Stephen Bowden or anyone acting on his behalf from, or instructions given by Stephen Bowden or anyone acting on his behalf to, Darryl Goode, or Conway MacCallum Lawyers in relation to: (a) the transactions or any of them contemplated by or referred to in the "Bowden Estate Plan Minutes of Meeting" as referred to in paragraph 99 of the affidavit of Stephen Bowden dated 28 August 2014 (Bowden affidavit); (b) without limiting (a), the "Deeds" or "documents" and all drafts thereof (or any of them) as referred in each of paragraphs 105, 106, 109, 110, 111, 116, 119-137, 141-145, 148-149 of the Bowden affidavit (Deeds).
The plaintiff presses this category. The defendants oppose discovery on the grounds of (1) no necessity and (2) no waiver.
Mr Darryl Goode was, at the relevant time, a solicitor at Conway MacCallum, solicitors, who was instructed by Mr Bowden in relation to the transactions the subject of these proceedings. The plaintiff has not challenged the defendants' claim that the documents the subject of Category 1 would be the subject of a valid claim for legal professional privilege by the defendants, if the defendants have not, by their conduct, waived the privilege.
The document referred to in sub-par (a) is the 1 July memorandum concerning the meeting between Ms Jaeger, Mrs Bowden and Mr Bowden that took place on that date. Ms Jaeger therefore seeks discovery of documents that record or disclose instructions given by Mr Bowden to, and advice given to Mr Bowden by, the lawyers referred to, concerning the transactions contemplated by the 1 July memorandum, as well as the deeds, documents and drafts referred to in the identified paragraphs of Mr Bowden's affidavit.
The first argument put by the defendants against an order being made against them to give discovery of documents in Category 1 is that such an order is not necessary.
The parties have served all of their evidence so the aspect of Practice Note SC Eq 11 concerning "Disclosure in the Equity Division" that is relevant is par 5, which provides: "There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings". This is the source of the defendants' 'no necessity' argument.
The test for "necessity" is set out by Ward J (as her Honour then was) in In the matter of Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at [20] and following, which was followed by McDougall J in Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458. McDougall J said: [21] The related concept of "necessity" was considered by Ward J in the matter of Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at [20] and following. That case was concerned with the administration of interrogatories; something closely connected, at least historically, with discovery (both were obtained, before the Judicature Act system came into place, through bills in Chancery). At [22], her Honour noted that the concept of necessity should not be pitched so high as meaning "essential", but should be considered as referring to what was reasonably required to the achievement of a fair trial. At [23], her Honour said that "the accepted test of necessity is what is reasonably necessary for the disposing fairly of the matter or necessary in the interests of a fair trial." [22] In the context of the practice note, the disclosure (either pre-evidence or at all) must be shown to be reasonably necessary for disposing of the matter fairly or in the interests of a fair trial.
The defendants' 'no necessity' argument is based upon the proposition that "almost all of the documents sought" in Ms Jaeger's discovery categories have already been produced on subpoena by various solicitors for the defendants. The defendants put the matter as follows in their initial written submissions: In the broad, the defendants contend that they have, in substance, already produced, all or almost all of the documents sought in most of the discovery categories contended for by the plaintiff in answer to various subpoenas issued by the plaintiff. [Emphasis added]
It thus appears that the defendants' argument is not absolute, in the sense that it recognises that all documents within Ms Jaeger's categories may not have been produced. It is, ultimately, uninformative on the issue of whether there are material documents that have not already been produced, the number of such documents, or their significance to the issues in the proceedings.
The defendants rely upon the statement in par 101 of Ms Jaeger's written submissions that "The subpoenas are in largely similar terms to certain of the discovery categories"; and that "the subpoena to Diamond Conway [formerly Conway MacCallum] is in similar terms to categories 1…" [Emphasis again added]. This observation is effectively repeated in par 108 and Schedule 5 of Ms Jaeger's submissions.
The defendants submit in par 4 of their written submissions, in response to Ms Jaeger's claim for discovery, that there is "a very substantial overlap" between Category 1 and the documents produced on subpoena, and that there was "fulsome" production in answer to the subpoena, so that "most" of the discovery will be superfluous "to the extent that [it] overlap[s] with the subpoena".
The defendants also rely upon Ms Jeager's solicitors' letter to their solicitors dated 12 May 2015, to support this submission that the principal aim of Ms Jaeger's request for discovery is to require the defendants to verify on an affidavit that there are no further documents to be disclosed in addition to those which have already been produced on subpoena. That letter refers to the defendants' claim that "most, if not all" documents in Category 1 have been annexed to the defendants' evidence. The letter stated: In the absence of a clear statement that your clients have disclosed all documents within category 1, we can only assume that there are other documents which have not been disclosed. Indeed, even if you were in a position to confirm that there were no other documents our client would be entitled to a list of documents with an affidavit from your clients in the usual form swearing that there are no documents within this category that are within your clients' possession, custody or power.
Ms Jaeger's submission on this issue (par 42 of her primary written submissions) is: In this case, [Mr Bowden] has deployed evidence of what purports to be all of his dealings with Daryl Goode of Conway MacCallum. He repeatedly sets out the alleged content of privileged conversations. He repeatedly exhibits detailed advices. His evidence purports to be comprehensive and detailed. Schedule 2 of these submissions summarises the comprehensive and detailed disclosure and deploying in evidence of the otherwise privileged instructions and advice he received. [Emphasis added]
Ms Jaeger then submits in par 43 that it is therefore not open to Mr Bowden now to suggest that Ms Jaeger cannot have access to other communications between him and Conway MacCallum recording other instructions he provided or advice he received.
Ms Jaeger's argument is therefore that Mr Bowden's use in his evidence of advice received from Conway MacCallum in a manner that appears to include all of the instructions given and advice received prevents him from denying Ms Jaeger access to "other communications". The question begged is whether there are any other communications.
The position in which these submissions leave the court is not satisfactory. Ms Jaeger's submission conveys that the defendants' evidence creates the appearance that all of the documents within Category 1 have been put into evidence. However, I infer that the defendants have not made any positive and unequivocal assertion to that effect. The defendants have not even done so in their submissions on the present application. They use words such as "broad", "in substance", "almost all", "most", and so on. It therefore may be the case, but the reality is not quite clear, that there are no additional documents that have not already been produced on subpoena, or included in the defendants' evidence, so that the real issue is whether Ms Jaeger is entitled to an order that requires the defendants to formally comply with the discovery process in relation to Category 1 documents, where the only purpose is to obtain a verified claim that there are no other documents.
It must be remembered, as McDougall J said in the Leighton International case at [7], in relation to Practice Note SC Eq 11: "… It is clear, and uncontroversial, that one of the principal functions of practice notes is to assist in the achievement of the overriding objective of the Civil Procedure Act 2005 (NSW) and of the Uniform Civil Procedure Rules 2005 (NSW), as set out in s 56 of the Act: to facilitate the just, quick and cheap resolution of the real issues in dispute in any proceedings before the court".
The present situation therefore is as follows: (1) There is no statement from the defendants that no documents fall within Category 1 that have not already been produced on subpoena or included in the defendants' evidence. (2) The most that can be said is that there may be such documents, but their number and significance has not been disclosed. (3) It may be that the only real purpose of the claim for discovery is to make the defendants list all documents within Category 1, so that a comparison between that list and all documents produced on subpoena or put into the evidence will enable Ms Jaeger to deduce that there were in fact no additional documents; and have the benefit of a verification by Mr Bowden of that position. (4) In the meantime, the court is required to consider the waiver argument, without having the benefit of knowing whether or not there is any real need to address that issue.
I will return to a consideration of the 'no necessity' argument below, after I have dealt with the defendants' 'no waiver' argument.
The second issue raised by the defendants is the 'no waiver' response. The parties accept that the effect of s 131A(1) of the Evidence Act 1995 (NSW) is that the issue of whether or not the defendants have waived any privilege that they have in the Category 1 documents is governed by s 122(2) of the Evidence Act, which raises the issue of whether the defendants have acted in a way that is inconsistent with the defendants' objecting to the relevant documents being adduced into evidence, if that were sought to be done by Ms Jaeger at a hearing in these proceedings.
Ms Jaeger puts her waiver argument on two bases: (1) First, she submits that there has been a waiver as a result of the selective disclosure of communications between Mr Bowden and his solicitors in relation to the subject matter of Category 1. (2) Secondly, Mr Bowden has acted in a manner inconsistent with the maintenance of the privilege because of his evidentiary deployment of his state of mind as to his legal rights. I will consider the basis of each of these claims in turn.
In relation to selective disclosure, Ms Jaeger relies upon the summary of the principles established by the High Court in Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 made by Judd J in Elliott v Tippett [2008] VSC 175; (2008) 20 VR 195 at [38], in the following terms: Waiver by selective disclosure is sometimes described as associated or derivative waiver. It is necessary to ask whether a person will be taken to have waived material associated with that which has been disclosed and whether the material that the party has chosen to release represents the whole of the material relevant to the same issue or subject-matter.
Ms Jaeger's detailed submissions in support of her argument that there has been waiver by the defendants by selective disclosure are found in Schedule 2 to her primary submissions, which is said to summarise the comprehensive and detailed disclosure and deploying in evidence of the otherwise privileged instructions and advice Mr Bowden received.
Ms Jaeger's submission concerning the relevance of Schedule 2 immediately precedes her submission in par 42 that I have set out above (in par 45). It will be necessary to consider the submissions in Schedule 2 in detail. However, if the question is whether the disclosure by Mr Bowden is inconsistent with the maintenance of privilege in relation to associated material, and as suggested by Ms Jaeger in par 42 of her submissions, Mr Bowden' evidence purports to disclose all of his dealings with the relevant solicitors in a detailed and comprehensive way, it is difficult to see how the court will be able to establish that any associated material exists.
It is one thing to say that a party may waive privilege by disclosure of part of privileged material, when that disclosure is inconsistent with the right to maintain the privilege, but if the party appears to have disclosed all of the privileged material, a conundrum arises as to how it could be concluded that there has been inconsistent behaviour and consequential waiver in respect of other privileged material, in the absence of separate evidence that such material exists. That evidence may be found in the disclosed material which may itself justify an inference that other associated privileged material exists, or it may be independent evidence.
The court may not be justified in ordering that a party give verified discovery of a category of documents unless there is some good reason to do so that arises out of a finding that the disclosure, by whatever means, that has occurred, is sufficiently likely to be incomplete so as to justify the imposition of an order for discovery. There may be exceptional cases, but ordinarily it would not be justified for the court to make an order for formal discovery in respect of a category of documents just to achieve the result of verification that there are no documents in addition to those already disclosed.
That should at least be so in the context of Practice Note SC Eq 11, where there will be no order for disclosure unless disclosure is necessary for the resolution of the real issues in dispute in the proceedings.
Ordinarily, it should not be sufficient proof of that necessity for a party to establish that the other party has apparently disclosed all privileged material within a particular category, so that privilege in relation to associated material would be waived, if it existed, but there is no basis for finding that it does exist.
It will be necessary for this issue to be borne in mind when the submissions in Schedule 2 made by Ms Jaeger are being considered.
The defendants submit in response to Schedule 2, that the disclosure that they have made does not in any case constitute waiver, because for the disclosure to lead to inconsistency and unfairness it must be a disclosure of the "content" of the confidential communications between the party and his or her legal adviser; and that it is not sufficient that a party has merely referred to privileged documents in the relevant disclosure. The defendants rely principally on the observation made by Hodgson J (as his Honour then was) in Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 at 94-95, where he said: I think it would be consistent with Attorney-General for the Northern Territory v Maurice to formulate the principal in Thomason in this way. If a party, by pleadings or evidence, expressly or impliedly makes an assertion about the content of confidential communications between that party and the legal adviser, then fairness to the other party may mean that this assertion has to be taken as a waiver of any privilege attaching to the communication.
His Honour, as Hodgson JA, repeated this observation in Council of the New South Wales Bar Association v Archer [2008] NSWCA 164; (2008) 72 NSWLR 236 at [47]. Campbell JA and Handley AJA agreed with his Honour.
I will refer below to the recent decision of the Victorian Court of Appeal in Vic Hotel Pty Ltd v DC Payments Australasia Pty Ltd [2015] VSCA 101; (2015) 321 ALR 191, in which the difference between disclosure waiver (which is the aspect of waiver that is presently relevant) and what Beach JA described as "issue waiver" was considered.
It is necessary to resolve the dispute between Ms Jaeger in Schedule 2 (pars 112 to 129), and the defendants' response in par 7 of their submissions in reply. Because of the quantity and detail of the evidence relied upon by Ms Jaeger, I will only refer to the content of the evidence where that is necessary. I will deal in turn with each of the paragraphs in Schedule 2: 1. [112]. Bowden affidavit par 90. This evidence concerns a discussion between Mr Bowden and Mr Goode in early June 2003. It related to what Mr Bowden had defined as the "Davidson Meeting" in par 80, which was a meeting between Mr Bowden, Mrs Bowden, Mr Bowden's adviser John Morrison, and a chartered accountant and tax expert, Mr Stephen Davidson. In pars 81 to 84 Mr Bowden gives evidence of what occurred at the meeting; which involved principally Mr Davidson giving advice as to how Mrs Bowden might structure a transfer of her interests in the Ritz Hotel to Mr Bowden. In par 90, Mr Bowden says: "In my discussions with Daryl Goode, I told him of the Davidson Meeting and my conversations with my mother". However, he then said: "I said to him" and then set out a specific statement and reply. I interpret this evidence as meaning that the statement and reply constituted the whole of what Mr Bowden "told" Mr Goode. Mr Bowden, in effect, said to Mr Goode that he had been told that the CGT obligation could be overcome if Mrs Bowden transferred half her interest in the Hotel Business now and left the balance of her interest to Mr Bowden in her will. I accept the defendants' submission that all Mr Goode said in response was that he would "get back to [Mr Bowden]". 2. [113]. Bowden affidavit par 91. Ms Jaeger relies upon a statement by Mr Morrison that he would ask Conway MacCallum about "what they have to say about this document and the proposal". The relevant document had been prepared by Mr Phillip Wiseman, a solicitor at Blake Dawson Waldron (as it was then known). Mr Bowden said to Mr Morrison, in substance, that he was concerned that the document prepared by Mr Wiseman did not give him complete control over the Hotel and the ability to sell it. This paragraph establishes no more than that Mr Morrison would ask for Conway MacCallum's response to Mr Wiseman's document. The defendants' submission is correct in this regard. 3. [114]. Bowden affidavit par 93. Mr Bowden exhibits a document entitled "Bowden Group Discussions Points" given to him by Mr Morrison, which Mr Morrison described as "a combination of what Wiseman and Goode have said to me". The document referred to in this paragraph is not included in the evidence, so apart from the court knowing that it apparently contained a combination of what two solicitors, the relevant one being Mr Goode, said to Mr Morrison, the court has no basis for determining whether the disclosure of the content of that document contributes to the waiver of privilege in relation to any associated material. The defendants' submission is that the conversation deposed to in par 93 does not reveal the content of the advice. That is true, but I do not know whether the document that is not in Mr Bowden's evidence did so. 4. [115]. Bowden affidavit par 94. Ms Jaeger's submission is that Mr Bowden deposes to a further conversation in which Mr Goode provided advice in relation to the timing of the execution of the Deeds. The defendants say that this is not an accurate summary of the evidence. The defendants are correct. At par 94, Mr Bowden exhibits a letter dated 27 June 2003 that he received from Mr Goode. The conversation deposed to is with Mr Morrison, who only says that he would send the document to Ms Jaeger and go over the document with Mrs Bowden. The letter itself, however, is three pages long, and gives advice (summarised shortly) concerning the possibility that Mrs Bowden may only be prepared to transfer the whole of her interest to Mr Bowden, rather than only a part of it, which might have the result that Mr Bowden could not service the loan. Mr Goode gave advice about the possibility that various persons could challenge Mrs Bowden's will. He also made a series of suggestions concerning issues that should be dealt with in the proposed agreements in order to protect Mr Bowden. This letter predated the 1 July 2003 meeting, but it clearly canvassed many issues that should be addressed. Some of the points addressed the period between the proposed transfer of part of Mrs Bowden's interest and her death, including in particular: Some provision should be inserted in the agreement as to the amount payable to your mother by way of rent for her interest in the Freehold and by way of income from her remaining one-quarter interest in goodwill. 1. This observation shows that Mr Goode specifically adverted to the possibility that Mrs Bowden would continue to have a financial interest in the Ritz Hotel if she did not transfer all of her rights to Mr Bowden. 2. [116]. Bowden affidavit par 100. Mr Bowden sets out in itemised form his understanding and belief as to what he and Mrs Bowden had agreed at the 1 July 2003 meeting. He then says that he decided to have lawyers draw up the documentation to reflect that understanding. He instructed Mr Morrison to get Mr Wiseman to prepare the documentation, and Mr Morrison responded that he would get Mr Goode, Mr Wiseman and Mr Davidson to give some advice on the 1 July meeting. Ms Jaeger's submission reflects this summary of the content of the paragraph. 3. [117]. Bowden affidavit par 109. Mr Bowden says that, in early September 2003, he instructed Mr Goode to examine the draft deeds to advise whether they gave effect to the matters agreed at the 1 July meeting. On 26 September 2003, Mr Bowden received a letter from Conway MacCallum. The defendants submit that this paragraph does not provide the content of any advice, but to the extent it does, the letter is annexed. 4. [118]. Mr Goode's 26 September 2003 letter. The letter is an 11 page letter of advice. Mr Goode reviewed all five draft deeds; advised Mr Bowden that he considered that they did not conform to the minutes of the 1 July meeting, and that they should be substantially amended or preferably redrawn. Mr Goode made a multitude of suggestions, which are too many to consider here. The letter says what it says, and I have not noticed anything said in the letter that might identify other associated privileged material that has not separately been disclosed. 5. [119]. Bowden affidavit par 111. Mr Bowden says that he told Mr Wiseman that he had received the letter from Mr Goode, which had confused him, and that he was getting two different opinions from two lawyers. The defendants observe that this paragraph does not disclose the contents of the advice that confused Mr Bowden. 6. [120]. Bowden affidavit par 113. Mr Bowden gives evidence that Mr Morrison told him that Mr Wiseman, Mr Goode, Mr Davidson and Mrs Bowden's solicitor were trying to sort out the documents. Again the defendants observe that this paragraph does not disclose the contents of any advice. 7. [121]. Bowden affidavit pars 121 and 122. In par 121, Mr Bowden gives evidence of instructions he gave to Mr Morrison for specific amendments to be made to the draft deeds. He says no more in par 122 than, after this conversation, he did not give much further thought to the deeds, and expected his lawyers to carry out his instructions. 8. [122]. Ms Jaeger refers to Mr Morrison's affidavit sworn on 28 August 2014. 9. [123]. Morrison affidavit pars 75 and 118. In par 75, Mr Morrison says that he was aware that Mr Bowden was instructing Mr Wiseman and Mr Goode. In par 118, Mr Morrison exhibits copies of his emails to Mr Wiseman and Mr Goode dated 2 July 2003. Those emails attached minutes of the 1 July 2003 meeting, and instructed the solicitors to prepare the appropriate legal documentation. The email to Mr Wiseman also attached "recent correspondence from Conway MacCallum", which I assume is the letter referred to in par (7) above. 10. [124]. Morrison affidavit pars 149 and 150. Mr Morrison gives evidence that he had introduced Mr Bowden to Mr Goode, and had been forwarded correspondence from Mr Goode to Mr Bowden. 11. [125]. Morrison affidavit par 151. Mr Morrison exhibits a copy of the 26 September 2003 letter of advice from Mr Goode to Mr Bowden. 12. [126]. Morrison affidavit pars 159 and 160. Mr Morrison exhibits a copy of Mr Wiseman's 1 October 2003 letter of advice addressed to Mr Morrison. The letter responds to the instructions Mr Bowden had earlier given concerning amendments, and also the comments made in Mr Goode's letter. It also makes detailed suggestions as to what issues needed to be dealt with, and what amendments should be made to the draft documents. Apart from referring to Mr Morrison's fax of 29 September 2003 and its enclosures, and subsequent telephone conversations with Mr Morrison and Mr Bowden, the letter does not appear to identify any other document that has not been disclosed in the evidence. 13. [127]. Morrison affidavit pars 167 and 168. Mr Morrison says that he provided further instructions to Mr Goode on 15 October 2003. The instructions attached a copy of a valuation summary and Mr Wiseman's 27 May 2003 tax opinion. 14. [128]. Morrison affidavit par 169. Mr Morrison refers to the fact that Mr Bowden had received conflicting advice from Mr Goode and Mr Wiseman, and that he sought advice from the accountant, Mr Davidson. 15. [129]. Morrison affidavit par 190. Mr Morrison says that he understood that Mr Bowden was obtaining advice from Mr Goode as well as Mr Wiseman and that Mr Bowden said to him that he had handed to Mr Goode a copy of the five deeds that Mr Wiseman had drafted prior to 26 September 2003, and that on about 26 September 2013, Mr Bowden handed him a copy of Mr Goode's letter dated 26 September 2003.
I return to the submission made by Ms Jaeger at par 42 of her written submissions. Mr Bowden has deployed in his evidence the advice that he received from Conway MacCallum referred to in sub-pars (3), (4), (6) and (7) of the preceding paragraph. (I do not know whether the document referred to in sub-par (3) has been produced on subpoena, or been included in the evidence by means other than Mr Bowden's affidavit. The existence of the document has clearly been disclosed). In that respect, Mr Bowden has utilised the advice that he received by apparently disclosing all of it. The balance of the evidence to which Ms Jaeger has referred in Schedule 2 simply shows the involvement of Mr Bowden and Mr Morrison in the process that led to the drafting of the 2003 Deeds, without disclosing that any additional legal advice was given. Mr Bowden has clearly relied upon the legal advice that he received; and has accordingly introduced that advice into the proceedings. However, I have not discerned anything in the evidence to which Ms Jaeger has referred that would suggest that there is other legal advice from Conway MacCallum that Mr Bowden received that has not been disclosed in the evidence. Ms Jaeger's par 42 does not suggest any different conclusion.
The only issue therefore appears to be: if Mr Bowden has put into evidence legal advice that he received from his solicitors in relation to the drafting of the 2003 Deeds; his evidence does not state or imply that he received any documentary legal advice that he has not included in his evidence; but he does not specifically state that there was no additional documentary advice; should the court order the defendants to give discovery of Category 1 documents, if the only real purpose is to establish by comparison on a verified basis that there are no additional documents containing legal advice?
I will return to a consideration of this question after I have dealt with the second basis upon which Ms Jaeger puts her claim that Mr Bowden should be ordered to give discovery of Category 1 documents.
Ms Jaeger's second submission is that the defendants have waived any privilege they may have had concerning legal advice from Conway MacCallum, because they have advanced as an issue in the proceedings Mr Bowden's state of mind by pleading estoppel and rectification, and giving evidence as to his relevant state of mind as to legal rights (par 44).
Ms Jaeger relies upon the decision of the Court of Appeal of the Supreme Court of Victoria in Vic Hotel v DC Payments Australasia (above) at [29]-[39] and [50]-[53]. It will be sufficient to set out the following parts of that judgment (Dixon AJA, Mandie JA agreeing) (footnotes omitted): 29] I accept the applicants' submission that the judge applied a wrong test, as he focused on a narrower question of whether the pleadings made any express or implied assertions about the content of the privileged communications, either as a material fact or as a particular to any material fact pleaded. All that was called for was an orthodox application of the principles in s 122 of the Evidence Act 2008 and in Mann v Carnell. … [31] In Mann v Carnell, the plurality stated the common law principles applicable to waiver of legal professional privilege to be: [28]… Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege … [29] Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is 'imputed by operation of law'. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege … What brings about the waiver is the inconsistency, which the courts, when necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. (Citations omitted)
… [33] In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd, the High Court stated: [30] According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. [31] In Craine v Colonial Mutual Fire Insurance Co Ltd, it was explained that "[w]aiver" is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has "approbated" so as to prevent him from "reprobating". In Mann v Carnell, it was said that it is considerations of fairness which inform the court's view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though "not some overriding principle of fairness operating at large." [32] Those considerations, articulated in relation to waiver at common law, apply with equal force in relation to the statutory question posed by s 122(2) of the Evidence Act, and made applicable by s 131A of that Act to the determination of a question of waiver of client legal privilege arising in the context of pre-trial discovery. That question is whether the client or party concerned "has acted in a way that is inconsistent with the client or party objecting to" the production of a document. (Citations omitted) [34] The test for waiver is not whether the pleadings made any express or implied assertions about the content of the privileged communications, pleaded either as a material fact or as a particular to any material fact, which might be inconsistent with maintenance of the privilege. Rather, it is whether the privilege holder, DC Payments, by its conduct in its pleading of the state of mind of Next Payments, acted in a way that was inconsistent with its objection to Next Payments adducing evidence that would result in disclosure of its knowledge of the privileged legal advice. Put another way, was DC Payments' conduct in pleading a state of mind of Next Payments inconsistent with the maintenance of confidentiality in communications relevant to that state of mind. [35] It is the privilege holder's conduct that effects waiver. Here, waiver is not the consequence of the privilege holder's disclosure of confidential communications to the senior managers; it is the consequence of the issue that was pleaded. Where the privilege holder puts into issue the state of mind of another who is aware of the confidential communications, the waiver of the privilege is in relation to the issue. I doubt that it is open to another party to litigation to force waiver of a party's legal professional privilege by making assertions about, or seeking to put in issue, that party's state of mind,18 but that is not this case.
Ms Jaeger relied upon the detailed submissions contained in Schedule 3 of her written submissions in support of this aspect of the case. 1. [130]-[133]. Ms Jaeger refers to the allegations in the second further amended defence concerning the common understanding and assumption; the actions taken by the defendants in reliance upon those representations; and Mr Bowden's understanding of the legal consequences of the representations; which the defendants allege give rise to an estoppel. I have considered these aspects of the pleading in outline above. I accept that the pleading places in issue Mr Bowden's understanding of the legal effect of the alleged representations. 2. [135] and [136]. Bowden affidavit pars 134 and 135. I accept that Mr Bowden in par 134 makes a positive assertion that, in entering into identified Deeds, he understood that Mrs Bowden, in effect, gave up all of her rights and interests in the Ritz Hotel and related properties in favour of him, and would hold them in trust for her, and leave her remaining interest to him in her Will, and that he had no obligation to account to her in relation to any profits. This is, in substance, an understanding that the defendants' legal rights were as they assert them to be in these proceedings. Paragraph 135 is a statement that Mr Bowden entered into the Deeds in reliance on the representations. 3. [137] and [138]. Ms Jaeger refers to evidence to a similar effect in other identified paragraphs of Mr Bowden's affidavit, including Mr Bowden's disclosure of the legal advice that he received. It is not necessary to refer separately to this evidence.
Ms Jaeger's submission is that it is not open to Mr Bowden to advance a positive case that he held a particular understanding of legal matters, and to give evidence that his instructions to his lawyers reflected that understanding, and to attach advice received from his lawyers, but on the other hand to insist that the plaintiff is not entitled to access to the whole of those instructions and that advice.
I will now set out my conclusions concerning the Jaeger's claim for an order that the defendants give discovery of documents in Category 1.
The defendants' submission that the evidence relied upon by Ms Jaeger in most cases did not disclose the content of legal advice received by Mr Bowden, but in other cases, when it did so, appeared to do so completely, is generally correct. However, if the evidence is considered as a whole, it is clear that the defendants have put into evidence a significant amount of legal advice that they received from Conway McCallum, and instructions given on their behalf to that firm; together with related evidence that explains in substantial detail the whole process of the negotiations, and the drafting of the documents that led to the 2003 Deeds. The evidence put forward by the defendants goes so far as to establish that Mr Bowden retained two solicitors, Mr Goode and Mr Wiseman, and that the former gave a substantial amount of advice concerning what he perceived to be the inadequacy of the steps being taken to implement the family agreement, and to protect Mr Bowden.
However, I could not find in the evidence relied upon by Ms Jaeger any evidence that implied that there were further documents, whether in the nature of instructions or legal advice, that were brought into existence, but which have not been included in the defendants' evidence.
It must be recognised that Ms Jaeger's application for access to the documents produced on subpoena by Conway McCallum is relevant to her application for discovery of Category 1 documents. (This is an issue that I will deal with below in relation to Order 11). On my reckoning from Part A Annexure B to the affidavit of Tom Anthony Doumanis sworn 17 April 2015, the defendants originally claimed privilege in respect of 36 documents in the file produced by Conway McCallum. In the joint document provided to the court, the defendants reduced their claim to 9 documents. I will consider below whether Ms Jaeger should be allowed to inspect any of those documents.
The point is that, as Ms Jaeger has not been able to inspect any of the documents in the Conway McCallum file for which the defendants have claimed privilege, she is not in a position to say whether the content of any of those documents support a conclusion that there are additional documents, which have not been included in the defendants' evidence or Conway McCallum's file, which should be disclosed to Ms Jaeger.
I am satisfied by the evidence that the use that the defendants have made in their evidence of the circumstances in which Mr Bowden gave instructions and received legal advice, has been so extensive, and apparently comprehensive, that it is likely that, if in fact other documents exist that convey instructions or advice, legal professional privilege has been waived. It is logically impossible, however, to make a rational judgment that fairness requires the defendants to give access to Ms Jaeger to documents, if it is not known that the documents exist, or what they contain if they do exist.
I have reached a similar conclusion in relation to Ms Jaeger's second argument based upon the way in which the defendants have made an issue of Mr Bowden's state of mind.
The question is: what is to be done? Given the terms of par 5 of Practice Note SC Eq 11, I am not satisfied in this case that it is necessary in the relevant sense to order the defendants to give formal discovery of all documents in Category 1, where it appears that there are no additional documents that have not already been put into evidence or produced on subpoena by Conway McCallum, and where the only purpose of the exercise is to establish by comparison and exclusion that there are indeed no additional documents.
However, the use by the defendants of documents that would otherwise have been privileged has been so extensive that, in my view, Ms Jaeger is entitled to verification that there are no additional documents in respect of which the defendants have waived privilege. Ms Jaeger should not be required to be content with the qualified statements made by the defendants to which I have referred in par 48 above.
I propose to order the defendants to serve on Ms Jaeger an affidavit that either identifies any additional documents falling within Category 1, which either have not been included in the defendants' evidence, or produced by Conway McCallum on subpoena, or alternatively to verify that no such documents exist. The objective of this approach is to avoid the need for producing extensive list of documents. It has a potential practical shortcoming in that it will require some means to identify with precision the documents within Category 1 that have already been disclosed, to provide a sound foundation for identifying additional documents or being able to verify that no such documents exist. The exercise will also require the defendants to carry out an analysis of the documents that have already been included in the evidence, or produced by Conway McCallum on subpoena, to enable verification to be given in the manner that I contemplate.
I propose to allow the parties in the first instance to consider what order the court should make to give Ms Jaeger the verification to which I have found she is entitled, without imposing on the defendants the wasteful task of producing a lengthy list of documents.
I will leave it to the parties to consider whether it will be more efficient for Ms Jaeger to inspect first the documents in the Conway McCallum file for which no claim for privilege is pressed, or such a claim is not allowed, before the court finally makes the order contemplated by the preceding paragraph. It may be possible that the contents of documents in the file that have not yet been inspected by Ms Jaeger may influence the terms of the order that should be made.
Category 2. All documents created between 1 May 2003 and 30 March 2004 inclusive, recording or disclosing advice given to Stephen Bowden or anyone acting on his behalf from, or instructions given by Stephen Bowden or anyone acting on his behalf to, Phillip Wiseman, or Blake Dawson Waldron in relation to: (a) the transactions or any of them contemplated by or referred to in the "Bowden Estate Plan Minutes of Meeting" as referred to in paragraph 99 of the Bowden affidavit; (b) without limiting (a), the Deeds.
The plaintiff presses this category. The defendants oppose discovery on the grounds of no necessity, but do not oppose discovery on the basis that the documents are privileged.
It would appear from Ms Jaeger's written submissions that she was initially in some doubt about whether the defendants were maintaining a claim that their privilege in relation to Category 2 documents subsists. One reason for that doubt is that the defendants did not, apparently, make any claim to privilege in relation to the documents produced by Blake Dawson Waldron on subpoena. It is clear from the joint document that the only point that the defendants now take in relation to Category 2 documents is the 'no necessity' ground.
Although Ms Jaeger makes due allowance for the fact that the Category 2 documents relate to the defendants' dealings with a different firm of solicitors to Category 1, she makes substantially the same submissions as to why the defendants should be ordered to give discovery of Category 2 documents.
Ms Jaeger relies upon the specific submissions concerning individual documents that are contained in Schedule 3 of her submissions. As the defendants no longer resist Ms Jaeger's claim that any privilege in the Category 2 documents has been waived, it is not warranted that the court engage in the exercise of examining each of the documents referred to in Schedule 3, or resolving the competing submissions made by the parties.
A review of the submissions made by Ms Jaeger in Schedule 3 leads to the same conclusions that I have stated above in relation to Category 1. While it was correct for the defendants not to press their assertion that they can maintain privilege in relation to those documents, there is nothing in those submissions that suggests in a positive way that there are likely to be additional documents that have not been included in the defendants' evidence, or were not produced by Blake Dawson Waldron on subpoena, which might be disclosed if the defendants are ordered to give discovery of Category 2 documents. The absence of any submission by Ms Jaeger that there is reason to believe that the defendants have not disclosed all documents for which privilege has been waived is more significant in the case of the Category 2 documents, because (I assume) Ms Jaeger has had the opportunity to review all of the documents produced on subpoena by Blake Dawson Waldron, and has not put any submission that either the defendants' evidence, or the documents produced by those solicitors on subpoena, suggest that any further undisclosed documents exist.
The same problem therefore arises in respect of Category 2 as arose in respect of Category 1. The defendants have probably waived privilege in relation to documents in that category that would otherwise have been privileged, but there is no evidence before the court that supports a conclusion that any additional such documents exist. In the absence of knowing that additional documents exist, and if they do, what they might contain, it is not possible to make a positive decision as to whether s 122(2) of the Evidence Act would apply to the documents.
The same order should be made in respect of Category 2 as I have indicated above should be made for Category 1 documents.
Category 3. All documents which record, disclose or constitute any communication or correspondence between any or all of Anthony Milton of the National Australia Bank (NAB), Stephen Bowden, and John Morrison, (or in each case anyone acting on their behalf) on the subject of: (a) the valuation undertaken by Robertson & Robertson of the Ritz Hotel and land dated 11 September 2003; or (b) the granting by the NAB of approval to refinance the loan with respect to the Hurstville Ritz Hotel in or around mid-late 2003
The plaintiff does not press for discovery of Category 3. Accordingly, this category does not require further consideration.
Category 4. All documents which record, disclose or constitute any instructions given by or on behalf of Stephen Bowden to Anne Taylor (or any other lawyer) at Clayton Utz, and any advice given by Clayton Utz to Stephen Bowden from 1 January 2007 to 31 December 2008, in relation to the matters referred to in paragraphs 158 to 160 of the Bowden affidavit.
The plaintiff presses this category. The defendants oppose discovery on the grounds of no necessity, but do not oppose discovery on the basis that the documents are privileged.
It is not necessary to consider the submissions made by Ms Jaeger concerning waiver of privilege in respect of Category 4 documents.
Her submissions note that Clayton Utz advised Mr Bowden in 2007 concerning Mrs Bowden's claims for an accounting, after Mr Bowden sold the Ritz Hotel and the freehold property. She referred only to the evidence given by Mr Bowden in pars 158 to 160 of his 28 August 2014 affidavit to support her waiver of privilege claim. In that evidence, Mr Bowden said that he gave instructions to Anne Taylor of Clayton Utz to write to Mrs Bowden's solicitor and request that she execute a codicil to her will, or that she execute a new will, leaving Mr Bowden certain assets and the proceeds of sale of her remaining legal interest. The only evidence that Ms Taylor gave Mr Bowden any advice is the following extract from par 159 of the affidavit: … However, the solicitor from Clayton Utz strongly advised that as a precaution, I should have my mother execute a Codicil or a new will.
It does not appear from the evidence that Ms Jaeger served a subpoena on Clayton Utz. In her affidavit affirmed on 12 June 2015 in support of Ms Jaeger's claim, Ms Beashel refers in par 95 to subpoenas that Ms Jaeger caused to be issued to 3 parties, which do not include Clayton Utz. Ms Beashel deals with Ms Jaeger's claim for an order for discovery of Category 4 documents in pars 49 to 55 of her affidavit, but she does not refer to any evidence that any undisclosed instructions or advices may exist that have not already been disclosed, except for the evidence in par 159 of Mr Bowden's affidavit, which is extracted immediately above.
It is unclear at present whether there are any documents that fall within Category 4 that have not already been included in the defendants' evidence. The initial problem is the same as that which arose in relation to Categories 1 and 2. There is no positive reason to believe that additional documents exist. I am satisfied that the court should make the same sort of order in relation to Category 4 as I have indicated above should be made in relation to Category 1.
Category 5. All documents created between 24 August 2010 to 24 September 2010 inclusive which: (a) record, disclose or constitute: (i) any drafts of paragraph 113 of the "Family Law Affidavit" described in paragraph 179 of the Bowden affidavit or any statement or other document prepared for the purpose of drafting paragraph 113 of the Family Law Affidavit; (ii) any instructions given by or on behalf of Stephen Bowden to his solicitors or legal representatives with respect to the preparation of paragraph 113 of the Family Law Affidavit and all advice given to Stephen Bowden with respect to the preparation of paragraph 113 of the said Family Law Affidavit; (iii) any correspondence and communication between Stephen Bowden and anyone acting on his behalf and his solicitors with respect to the preparation of paragraph 113 of the Family Law Affidavit; (b) record, disclose or constitute any advice given either by the solicitors for Stephen Bowden, or by any counsel or senior counsel acting for Stephen Bowden, and any instructions given by Stephen Bowden or anyone acting on his behalf for the purpose of obtaining that advice, with respect to: (i) the entitlement or potential entitlement of his mother, the late Adelaide Bowden to a payment from the "asset pool" as referred to in paragraph 184(c) of the Bowden affidavit; (ii) any other actual or potential liability of Stephen Bowden to his mother, the late Adelaide Bowden; (iii) the effect or meaning of the Deeds.
The plaintiff presses this category. The defendants oppose discovery on the grounds of (1) no necessity and (2) no waiver.
Ms Jaeger relies upon the evidence given by Mr Bowden in his 28 August 2014 affidavit, whereby he attempts to explain the statements in his family law proceedings affidavit on the basis that he prepared the earlier affidavit with a "focus" on meeting the claim for spousal maintenance. She submits that the Category 5 documents are therefore necessary in order to enable Ms Jaeger fairly to test Mr Bowden's explanation.
Ms Jaeger again relies upon derivative waiver on the basis that Mr Bowden made positive assertions about the contents of legal advice, and also about his state of mind, or "focus", when he swore the 2010 affidavit.
As to derivative waiver, Ms Jaeger submits that, in pars 185 to 191 of his 28 August 2014 affidavit, Mr Bowden gives detailed evidence about instructions given to, and advice he received from, his solicitors in connection with the preparation of his 2010 affidavit. In doing that, she submits, Mr Bowden has made both express and implied assertions about what was, or what was not, the subject of advice from his solicitors in relation to the preparation of the earlier affidavit.
The defendants combined their submissions in relation to Categories 5 and 6. (As will be seen, Ms Jaeger does not press her claim for discovery in respect of Category 6). I find the submissions made on behalf of the defendants difficult to understand, in so far as they are intended to apply to the Category 5 documents. Most of the submissions appear to be directed to her Walker Wayland report, which is the subject of Category 6. The defendants assert that Mr Bowden and Mrs Bowden had a common interest in the preparation of the Walker Wayland report, which was never served or used because the proceedings between the first and second defendants in this case were compromised. Category 5 covers documents that do not relate to the preparation of the Walker Wayland report. It will be necessary to explain briefly how the subject matter of Category 5 arose.
Mr Bowden said in par 126 of his 28 August 2014 affidavit that what he described as his Family Law Affidavit was sworn on 24 September 2010.
The documents in Category 5 are accordingly limited to documents brought into existence in the month before Mr Bowden swore his Family Law Affidavit.
Mr Bowden said in par 113 of that affidavit, which he sets out in par 184(c) of his 28 August 2014 affidavit: I do not know how much is owed to my mother from the asset pool however which may be in the vicinity of between $4,000,000 and $12,000,000. I have engaged Walker Wayland Chartered Accountants to independently calculate my mother's entitlement from the asset pool.
I agree with Ms Jaeger's submissions that this statement may be found in the present proceedings to be an admission as to Mr Bowden's state of mind that is inconsistent with his assertions concerning his state of mind in entering into the December 2003 Deeds, and as to whether he believed that Mrs Bowden would have no continuing rights or interests in the business of the Ritz Hotel, the freehold property, and related assets after the execution of the Deeds.
Category 5 arises out of the first sentence of par 113 of the Family Law Affidavit, and Category 6 arises out of the second sentence.
The defendants' submissions on combined Categories 5 and 6 seem to focus almost exclusively on Category 6, in that they deal with whether privilege was waived in relation to the Walker Wayland report "and documents relating to it" (see par 18 of the defendants' written submissions).
As I have said, Ms Jaeger's claim that the defendants have waived privilege in relation to Category 5, concerning the first sentence of par 113, is based upon the content of that paragraph, and the evidence given by Mr Bowden in his 28 August 2014, to provide an explanation of why he made the statement that constitutes the first sentence of par 113; that is an apparent attempt to dilute the effect of what might be found to be an admission made by him.
Ms Jaeger therefore bases her submissions on the following paragraphs of Mr Bowden's 28 August 2014 affidavit, which I will analyse individually: 185. When preparing my Family Law Affidavit, I had been informed by my solicitor that I had a duty to the Family Court to disclose all of my assets in which I held the legal and/or beneficial interest all of my liabilities (including any contingent liabilities), superannuation interests and financial resources. In giving instructions with respect to the preparation of my Family Law Affidavit, I endeavoured to comply with that duty of disclosure as accurately as possible on the information and documents available to me at the time.
In this paragraph, Mr Bowden discloses that he received advice from his solicitor as to his duty of disclosure to the Family Court. In saying that he endeavoured to comply with that duty of disclosure, Mr Bowden is, by implication, conveying how he approached the preparation of his affidavit in relation to his instructions to his solicitor.
The next paragraphs are: 186. At the time I swore my Family Law Affidavit my focus was to deal with the Interlocutory Application filed by Louise and which was listed for hearing on 29 September 2010 in the Family Court in Sydney. Louise in the Interlocutory Application sought spousal maintenance of $10,000 per week, injunctions relating to the continued operations of the Ritz Hotel and to restrain my mother and I from the withdrawal of monies from a number of bank accounts listed in the Interlocutory Application. 187. My Family Law Affidavit was prepared only for the purpose of the Interlocutory Application without the benefit of full consideration of the agreements that had been entered into with my mother and other family members in 2003 and for the purposes of the Interlocutory Application and the preparation of my Family Law Affidavit. I did not consider those agreements in any detail.
Mr Bowden does not disclose the content of any legal advice that he received in either of these paragraphs. There may be an implication in Mr Bowden's statement that his affidavit was prepared without the benefit of full consideration of the 2003 agreements, and that the lawyers who were retained to assist him in the preparation of his affidavit were not given those agreements, or were not instructed to give consideration to them, for the purpose of preparing the affidavit. That would involve the negative implication that the lawyers did not provide advice to Mr Bowden concerning the effect of the 2003 agreements.
Then: 188. When preparing paragraph 113 of my Family Law Affidavit, the figures of $4 million-$12 million that I deposed to in that paragraph were given to me following conversation prior to preparing my Affidavit with John where he said to me: Look, off the top of my head, it can be anywhere between $4 to $12 million based on the Bowden Group 2010 balance sheets. I'll have to look at it in more detail and we can arrange a forensic accountant to assess any interest your mother may have in the Bowden Group. 189. On that basis I included the $4 to $12 million in paragraph 113.
This is a statement by Mr Bowden that he relied upon advice given to him by Mr Morrison that was based on Mr Morrison's view of the effect of the 2010 balance sheets, when he included par 113 in his affidavit. These paragraphs do not disclose expressly or by implication of the legal advice that Mr Bowden may have been given.
Next: 190. At the time I was advised that if the Family Law Proceedings went to a final hearing the effect of the Deeds would have to be investigated more closely and that Senior Counsel's advice would be sought as to the effect of the Deeds. I had not investigated the figures myself and I accepted what John had told me. On that basis I was content to deal with the Interlocutory Application and await Senior Counsel's advice as to the effect of the Deeds referred to in this affidavit after the Interlocutory application had been heard.
It is reasonable to infer that Mr Bowden's statement "I was advised" refers to advice that he was given by one of his lawyers. The effect of the advice was that, if the proceedings went to a final hearing; first, "the effect of the Deeds would have to be investigated more closely"; and secondly, that senior counsel's advice would be required as to the effect of the Deeds.
The reference to "more closely" in the first of these statements may imply that Mr Bowden's lawyers may have given some attention to the effect of the 2003 deeds, but that a closer investigation would be required if the matter proceeded to final hearing. The second statement also involves the giving of legal advice; but that advice was limited to the advice that senior counsel's advice would be needed if the matter proceeded.
Finally: 191. At the time I swore my Family Law Affidavit I left any communication with Walker Wayland to be handled by my solicitor and John. I believe Senior Counsel's advice was sought in respect of the effect of the Deeds however as Louise and I settled our property dispute through a binding Financial Agreement dated 1 June 2012 under section 90D of the Family Law Act and therefore Senior Counsel's advice was not required.
The meaning of par 191 is, in my view, unclear. Mr Bowden makes a positive statement of his belief that senior counsel's advice was sought in respect of the effect of the 2003 Deeds. He does not make any positive statement about the extent to which, if at all, that advice had any influence on the content of par 113. His statement that the effect of the matter settling was that senior counsel's advice "was not required" leaves open the question whether or not it nonetheless had an influence on the content of par 113.
I am not persuaded that the limited references that Mr Bowden has made in this part of his evidence to legal advice that he received has the result that the defendants should be ordered to give discovery of all documents in Category 5, on the ground that the use that has been made of legal advice makes it unfair for the defendants to maintain a claim of privilege in relation to all documents within the category.
First, I am not satisfied that the statement made in par 185 that Mr Bowden was advised by his solicitor that he had a duty of full disclosure to the Family Court has the effect of waiving privilege in respect of all advice given to Mr Bowden concerning the preparation of his Family Law Affidavit.
Secondly, I do not think the balance of the paragraphs relied upon by Ms Jaeger are sufficient to establish that Mr Bowden received and acted upon advice from his lawyers as to the meaning and effect of the 2003 Deeds for the purpose of preparing his Family Law Affidavit. The better view on the evidence is that senior counsel had not provided any legal advice on the meaning and effect of the 2003 Deeds before the family Law law proceedings were settled. Further, I am not satisfied that the evidence establishes with sufficient clarity that Mr Bowden prepared his Family Law Affidavit with the benefit of advice from any other lawyer as to the construction of the 2003 Deeds.
The evidence is insufficient, in my view, to justify a conclusion that Mr Bowden's legal professional privilege in respect of documents in Category 6 5 has been waived.
Category 6. All documents which record, disclose or constitute: (a) any instructions or communication between Stephen Bowden or anyone acting on his behalf and his then solicitors, or any instructions; or (b) any communication between Stephen Bowden or anyone acting on his behalf and Walker Wayland, in connection with the preparation by Walker Wayland of the report referred to in paragraph 184(c) and paragraph 191 of the Bowden affidavit.
The plaintiff does not press for discovery of Category 6. This category therefore also does not need further consideration.
Category 7 was not used.
Category 8. All documents which record, disclose or constitute any communication between Stephen Bowden and John Morrison in the period from 1 January 2003 to 30 March 2004: (a) on the subject of the Deeds or the negotiations leading to the execution of the Deeds; (b) on the subject of the document entitled "Bowden Estate Plan Minutes of Meeting" referred to in paragraph 99 of the Bowden Affidavit or any drafts thereof; (c) on the subject of the stamping of the Deed of Assignment referred to in paragraph 141 of the Bowden Affidavit; and (d) recording the date of the settlement of the purchase of the Gosford Palms Motor Inn referred to in paragraph 146 of the Bowden Affidavit.
The plaintiff presses this category. The defendants oppose discovery on the grounds of (1) no necessity. If discovery can be given informally by reference to the documents already produced on subpoena by Mr Morrison, the defendants do not oppose this category.
The final position reached by the defendants therefore is that they will not oppose discovery of Category 8 documents, provided that the discovery can be given informally by reference to the documents produced by Mr Morrison on subpoena. In my view, one clear objective of Practice Note SC Eq 11 is to limit the cost of discovery wherever that can reasonably be achieved. Accordingly, I would in principle accept that the defendants should give discovery informally in the manner that they suggest. However, that preference assumes that the way in which Mr Morrison has produced documents on subpoena will facilitate the defendants giving verified discovery of Category 8 documents by reference to the documents already produced on subpoena, in a manner which is sufficiently reliable and useful to Ms Jaeger.
I will, in the circumstances, leave it to the parties to agree on a form of order that will provide Ms Jaeger in a reasonably practical way with reliable, though informal, verified discovery in accordance with the offer made by the defendants. If the parties cannot agree to an appropriate order, and I am unable to formulate such an order with the benefit of any further submissions that the parties may make, I will leave the issue open as to whether some alternative discovery order should be made.
Category 9. A complete copy (including enclosures and attachments) of the letter dated 30 April 2009 that appears at pages 184 to 186 of exhibit AEB-1 to the plaintiff's evidence.
The defendants agree to give discovery of Category 9.
Category 10. All documents which record, disclose or constitute any communication to the first defendant of the following documents, or the substance or effect (in whole or in part) thereof from the date of their creation until the date 3 months after the date of their creation: (a) the document that appears at page 248 of exhibit AEB-1 to the plaintiff's evidence; (b) the document that appears at pages 902 to 903 of exhibit AEB-1 to the plaintiff's evidence; (c) the document that appears at page 1819 of exhibit AEB-1 to the plaintiff's evidence; (d) the document that appears at page 1823 of exhibit AEB-1 to the plaintiff's evidence (including, without limitation, the letter to which it was originally attachment "D"); (e) the document that appears at page 1824 of exhibit AEB-1 to the plaintiff's evidence.
The defendants agree to give discovery of Category 10.

Access to documents produced on subpoena

Order 11(a). An order that the plaintiff be granted access to the following documents identified in Part A of Annexure B to the affidavit of Tom Anthony Doumanis sworn 17 April 2015: (a) the documents under the heading "Conway MacCallum";
The plaintiff presses for access to these documents. The defendants agree to access being granted in respect of all documents under the heading "Conway MacCallum" other than those numbered 1.1.6, 1.1.7, 1.2.1, 1.2.4, 2.10, 2.13, 2.16, 2.17 and 2.19. The defendants oppose access being granted to those documents on the basis of privilege.
I should record, to reduce the possibility of confusion and error, that in the original version of the joint document provided to the court, the parties reserved their positions concerning documents numbered 2.1, 2.2, 2.4, 2.6, 2.9, 2.11, 2.15, 2.19 and 2.24, as the legal representatives for the defendants intended to get instructions about whether the defendants would also oppose access being granted to those documents to the plaintiff on the basis of privilege. The court was advised in the joint document that it would be informed of the defendants' position, after those instructions had been obtained. As I interpret the final form of the joint document received by the court on 3 July 2015, the defendants do not press their opposition to the plaintiff being given access to these documents. I will leave it open to the defendants to advise, if that be so, that my understanding of the final form of the joint document is incorrect.
Order 11(b). An order that the plaintiff be granted access to the following documents identified in Part A of Annexure B to the affidavit of Tom Anthony Doumanis sworn 17 April 2015:
(b) the documents under the heading "Diamond Conway" only to the extent that they are within the terms of the plaintiff's proposed discovery Category 5 as narrowed.
The plaintiff presses for access to these documents. The defendants oppose access being granted to those documents on the basis of privilege.
I will deal first with Order 11(a). Ms Jaeger presses this claim for access on the basis of pars 108 and 23 to 35 of her written submissions, and the defendants oppose the claim on the basis of privilege.
Ms Jaeger, in par 108, relies upon the submissions that she made in relation to discovery by the defendants in respect of the categories of documents for discovery that equate to the categories of documents listed in the schedule to the subpoena to Conway MacCallum. She attached a Schedule 5 to her submissions, which identified the extent to which the paragraphs of the subpoena overlap with the discovery categories. She said that it may be necessary for the court to inspect some of the documents produced on subpoena in order to rule on any relevant waiver.
As I read Schedule 5, pars 2, 3 and 4 of the subpoena to Diamond Conway (which I assume also covers that firm's earlier guise of Conway MacCallum) relate to discovery Categories 1, 5 and 6 respectively. It will be remembered that Category 1 concerned instructions given to, or advice received from, Conway MacCallum, in relation to the 1 July 2003 Bowden Estate Plan Minutes of Meeting (that is, the 1 July memorandum) and the 2003 Deeds, and any drafts thereof, referred to in specified paragraphs of Mr Bowden's 28 August 2014 affidavit.
I make the following observations about the nine documents whose access is still in issue: 1. Document 1.1.6. Letter dated 30 September 2003 from Mr Goode to Mr Bowden. Mr Goode noted that Blake Dawson Waldron would act in relation to the drafting of the documents, but repeated in some detail Mr Goode's opinion concerning the structure that should be adopted, and the process that should be followed, in preparing documents. 2. Document 1.1.7. Letter dated 6 November 2003 from Mr Goode to Mr Bowden. This letter refers to the fact that Mr Goode had been informed by Mr Morrison on behalf of Mr Bowden that Mr Bowden would proceed with the documents being prepared by Blake Dawson Waldron "provided they had the amendments suggested by me". The letter records Mr Goode's understanding that he would not be acting on the preparation of the documents. However, Mr Goode reiterated a number of warnings that he had given to Mr Bowden concerning the process that had been adopted in preparing the relevant documents. 3. Document 1.2.1. Facsimile dated 2 July 2003 from Mr Morrison to Mr Goode. The facsimile attaches a copy of the 1 July 2003 memorandum, and advises Mr Goode that the document will be sent to Mr Wiseman for him to prepare the legal documentation, together with excerpts from Mr Goode's 27 June 2003 advice. 4. Document 1.2.4. This document appears to be missing from MFI 6, which is a bundle of documents provided to the court by the defendants from the file of Conway MacCallum for which the defendants claim privilege. 5. Document 2.10. This is a file note prepared by Mr Goode on 15 September 2003. Mr Goode summarises a telephone conversation that he had with Mr Bowden, and also sets out a number of notes for himself. It records that Mr Bowden advised him that Mr Wiseman would act in relation to the drafting of the deeds. He summarises advice that he gave concerning a potential financial agreement between Mr Bowden and Louise Bowden during the course of their marriage, and also matters concerning Mr Bowden's will. The file note does not record any instructions or advice concerning the family arrangement between Mr Bowden and his mother and sister. 6. Document 2.13. This is a file note prepared by Mr Goode on 29 September 2003. The file note deals with two subjects. The first is a telephone discussion between Mr Goode and Mr Bowden concerning an aspect of the advice given by Mr Goode that involved transferring the Ritz Hotel to a new trust. Mr Bowden instructed Mr Goode to discuss the issue with Mr Morrison. The second consists of notes of a telephone discussion between Mr Goode and Mr Morrison. There was some general discussion about the brevity of the draft documents prepared by Mr Wiseman, and Mr Goode's concerns if the documents did not deal properly with all of the assets. There was discussion about Mr Morrison's concern that the transfer of the assets of the old into a new trust would have unsatisfactory taxation liabilities. 7. Document 2.16. This is a file note prepared by Mr Goode on 15 October 2013. It records a conversation between Mr Goode and Mr Morrison. In particular, it refers to a valuation of the hotel as at 24 September 2003, and contains a statement (presumably conveyed by Mr Morrison to Mr Goode) as to how much had been agreed to be paid by Mr Bowden to Mrs Bowden, and the assets of Mrs Bowden to which the payment was intended to relate. Mr Goode was requested at that stage only to give an estimate of his costs. 8. Document 2.17. This is a file note prepared by Mr Goode on 6 November 2003. It records another telephone conversation with Mr Morrison. Mr Goode was advised of the decision by Mr Bowden that Blake Dawson Waldron would draft the documents, taking into account the amendments suggested by Mr Goode. Mr Goode gave a warning to Mr Morrison about the stamp duty implications of the proposal to change the terms of the trust deed. 9. Document 2.19. This is a hand written note, undated, and entitled 'Steve Bowden'. On the present state of the evidence, the likelihood is that the file note was prepared by Mr Goode. It appears to contain a statement of the property that Mrs Bowden proposed to assign. It also appears to contain a statement concerning Mrs Bowden's intention to give part of the proceeds to Ms Jaeger.
The defendants have not made specific submissions to the court about why the legal professional privilege in these individual documents has not been waived.
The defendants have made general submissions concerning the documents produced on subpoena in their recent submissions in response to Ms Jaeger's written submissions in support of her notice of motion.
The defendants appear to have made one set of submissions, in pars 27 to 30, that are intended to apply to Ms Jaeger's Order 11(a) and 11(b), at the one time.
I accept the defendants' submission in par 28 that they have established that the documents are subject to legal professional privilege, unless the defendants have waived that privilege by their conduct.
The defendants say in par 29 that the basis for their privilege claim with respect to the documents recording conversations between Mr Goode and Mr Morrison is the same as that stated by the defendants in par 18 of their written submissions, concerning the documents produced by Walker Wayland on subpoena. Paragraph 18 deals with Ms Jaeger's claim for a discovery order in relation to Category 6, which is no longer pressed by Ms Jaeger.
I am confused by the position taken by the defendants. The documents that I have summarised briefly in par 149 above concern communications between Mr Goode and Mr Morrison (at least in most cases; in some cases the conversation may have been with Mr Bowden). The point is that all of the communications seem to relate to the time before the 2003 Deeds were executed. The defendants' submissions appear to suggest that Mr Morrison's involvement related to the preparation of the report by Walker Wayland. That is something that happened in 2010.
If that is correct, the defendants do not appear to have directed their submissions towards Ms Jaeger's entitlement to Order 11(a) at all.
My present view is that consistency with the conclusion that I have reached concerning Ms Jaeger's application for an order for discovery in relation to Category 1, requires that I find that the defendants have waived privilege in relation to documents 1.1.6, 1.1.7, 1.2.1 (as to this document, even though it only concerns a step taken by Mr Morrison to convey information to Mr Goode), 2.13, 2.16 and 2.17. I cannot make any finding in relation to document 1.2.4, because it appears to be missing from MFI 6. The defendants have not waived privilege in relation to document 2.10, as it concerns legal issues that may have arisen between Mr Bowden and Louise Bowden, which are immaterial to the issues in dispute in the present proceedings.
I am conscious that counsel for the defendants were of great assistance to the court in being economical with their submissions, and in reducing the amount of time that the court had to devote to the argument, given that the time available was limited. I will not rule that the defendants have waived privilege in relation to the documents identified in the preceding paragraph without giving the defendants, if they wish, the opportunity to make further specific submissions concerning why privilege in those documents has not been waived. I take this course because I am concerned that the defendants may be disadvantaged as a result of their efforts to streamline the argument. Any further submissions would, of course, have to take into account any relevant reasons expressed in this judgment.
It is now appropriate to deal with Order 11(b).
In Part A of Annexure B to his 17 April 2015 affidavit, Mr Doumanis lists some 64 documents contained in the Diamond Conway file produced on subpoena in respect of which the defendants claim privilege.
The effect of the limitation of Ms Jaeger's claim to documents that fall within the description of Category 5, is that Ms Jaeger now only seeks documents created between 24 August and 24 September 2010, and which relate, so far as the documents described in Category 5(a) are concerned, are to documents that relate to par 113 of Mr Bowden's Family Law Affidavit.
It is therefore left to the court to work out which of the documents remain in dispute. That would not be a problem if the list contained the date of each document. It does not (primarily in relation to file notes and drafts of affidavits). The only course open to the court is to deal with the documents that are dated, and leave it to the parties to consider what should be done in relation to the undated documents.
It appears that the Diamond Conway documents that have been listed in Part A of Annexure B to Mr Doumanis' 17 April 2015 affidavit have been included in the bundle that has been marked MFI 4.
It appears to me that, of the dated documents, only the following remain in dispute: 1. 1.1.1. Letter from Tom Doumanis to Grahame Richardson SC dated 26 August 2010. This document enclosed Louise Bowden's Initiating Application, Financial Statement, and her affidavit sworn 24 August 2010. It does not fall within the restricted category for which access is sought. 2. 1.1.2. Email from Tom Doumanis to Grahame Richardson SC dated 16 September 2010. This document enclosed a letter to Mr Richardson that described an offer of settlement that Mr Bowden had made to his wife, which was not accepted. It does not fall within the restricted category. 3. 1.1.3. Email from Tom Doumanis to Stephen Bowden dated 16 September 2010. This document discusses various possible outcomes in relation to the division of the available matrimonial property as between Mr Bowden and his wife. Although its subject-matter deals with a possible claim by Mrs Bowden, I do not consider it to relate to the preparation of par 113 of Mr Bowden's Family Law Affidavit, so as to bring it within Category 5(a). It does not fall within the restricted category. 4. 1.1.4. Brief from Tom Doumanis to Paul Livingstone dated September 2010. This document is dated [blank] September 2010. There is nothing in the document that enables me to infer that it was produced in the relevant period. In particular, the brief does not request Mr Livingstone to settle Mr Bowden's Family Law Affidavit, so I cannot infer that the brief was prepared before 24 September 2010. As a result of this uncertainty, I will not rule on this document, but leave the issue open to be addressed by the parties. 5. 1.2.1. Email from John Morrison to Tom Doumanis dated 10 September 2010. This email relates to the provision of certain documents by Mr Morrison to Mr Doumanis. There is some additional discussion in the chain of emails, but it does not fall within the restricted category. 6. 1.2.2. Letter from Scott Arnold to Tom Doumanis dated 23 September 2010. I infer that this document is a letter from Walker Wayland to Tom Doumanis dated 23 September 2010. The name of the writer does not appear on the letter, but I note that SE Arnold is described on the first page as a director of Walker Wayland. It appears to be a draft letter whereby Walker Wayland offered its terms for providing assistance in Mr Bowden's family law proceedings; and "In particular we are engaged to provide analysis of the financial interest of Mrs Adelaide Bowden in the entities of Mr Stephen Bowden". The document does not fall within the restricted category. 7. 1.2.3. Email from John Morrison to Tom Doumanis dated 24 September 2010. This document does not deal with any subject matter within the restricted category. 8. 1.3.2. Email from John Morrison to Scott Arnold, Tom Doumanis and Dennis Paltos dated 20 September 2010. This email appears to convey instructions to Walker Wayland concerning the objective of the report they were retained to prepare. It does not fall within the restricted category.
The consequence of this analysis of the Diamond Conway documents, considered in relation to the restricted category contained in the joint document provided to the court, is that, save for document 1.1.4, the documents do not fall within the restricted category. As I have indicated above, the issue concerning document 1.1.4 remains open, as I cannot tell from the document whether or not it was produced within the restricted range.
In these circumstances, it is not necessary, at this stage, for me to consider whether or not the defendants have, by their conduct, waived privilege in relation to the documents sought by Order 11(b).

Relief sought by the defendants

Order 1. An Order, pursuant to UCPR 33.9 or alternatively the Court's inherent jurisdiction, that the legal representatives of the Defendants have leave to forthwith inspect and copy all of the documents produced by: (a) Peter Kilmurray to the Court on 10 June 2014 in answer to a Subpoena to Produce issued to Mr Kilmurray at the request of the First Defendant on 4 June 2015 (which documents are exhibited to the Affidavit of Karen Beashel affirmed in these proceedings on 25 November 2014, and marked "KB-01"), with the exception of those documents marked KB-01 at 64, 71, 74, 81, 102, 104, 105 and 107. (b) Phillip Sim to the Court on 4 March 2015 in answer to a Subpoena to Produce issued to Mr Kilmurray at the request of the First Defendant on 25 February 2015 (which documents are exhibited to the Affidavit of Karen Beashel affirmed in these proceedings on 27 March 2015, and marked "KB-02" or are in the possession of the plaintiff's solicitors).
The application of the defendants for access to documents is based upon an alleged loss of privilege pursuant to s 121 of the Evidence Act, and is, subject to their alternative submission described below, limited to those documents (if any) which satisfy both of the following criteria: (1) they constitute correspondence or communications between Mrs Bowden and either Trisley Kilmurray or Philip Sim & Associates; and (2) they relate to Mrs Bowden's testamentary intentions concerning her will or wills.
The plaintiff opposes access to those documents on the basis that s 121 does not apply to this category of documents.
In the alternative, the defendants seek access to those documents (if any) recording Mrs Bowden's instructions to prepare her will or wills, on the grounds that such instructions do not attract privilege.
The plaintiff opposes access to those documents on the basis that such instructions do attract privilege.
As I understand it, Mr Kilmurray acted for Mrs Bowden (and also to some extent Ms Jaeger and her husband) in the negotiation and execution of the 2003 Deeds, and also for the purpose of preparing the will that Mrs Bowden agreed to make in favour of Mr Bowden (which I have described as the first will). Mr Sim acted for Mrs Bowden at the time she made a later will that differed from the will that she had covenanted to make in the 2003 Deeds (the second will).
The defendants originally argued that the evidence tendered by Ms Jaeger in support of her claim as executor, that Mrs Bowden was entitled to maintain the privilege, was not sufficient to establish that the relevant documents are privileged. The defendants have not maintained that position, and now accept that the privilege claim would be good but for the effect of s 121 of the Evidence Act.
As appears from the extract from the parties' joint document stating their present positions, the defendants now only challenge Ms Jaeger's privilege claim in relation to correspondence or communications between Mrs Bowden and either Mr Kilmurray or Mr Sim, and which relate to Mrs Bowden's testamentary intentions concerning her will or wills.
Alternatively, if the defendants' claim based upon s 121 of the Evidence Act fails, the defendants seek access to those documents in the file (if any) that record Mrs Bowden's instructions to prepare her will or wills on the grounds that such instructions do not attract privilege.

Documents produced on subpoena by Mr Kilmurray

I will deal first with the defendants' claim, based upon s 121 of the Evidence Act, in relation to the documents produced by Mr Kilmurray in respect of which access is still sought by the defendants.
Ms Jaeger claims legal advice privilege in respect of the documents in Mr Kilmurray's file identified in pars 7.1 to 7.4 of Ms Beashel's 25 November 2014 affidavit. The documents, which comprise Exhibit KRB to the affidavit, became MFI 1.
Section 121(1) of the Evidence Act provides: (1) This Division does not prevent the adducing of evidence relevant to a question concerning the intentions, or competence in law, of a client or party who has died.
The defendants submit that this provision applies in the present case, as Mrs Bowden has died, and the documents for which the defendants seek access concern Mrs Bowden's "intentions" for the purposes of the provision.
I have considered the defendants' written submissions on this issue, and also the submissions that were put orally in argument. I find the point of the defendants' argument somewhat elusive. They submit that there is no definition of the word "intentions" in the Evidence Act, and they contend that the word has a broad application. The meaning of the word in this context has not been judicially examined, but it usually means (they submit) a person's purposes or designs, or the ends or objects intended (relying upon The Macquarie Dictionary (1981) p 922). The defendants refer to the following observations by White J in d'Apice v Gutkovich [2010] NSWSC 1336 at [20]: [20] … It seems to me that the rational construction of the provision and one which fits its context is that it abrogates a claim for privilege which the deceased person as a client or party could have maintained but for his or her death if the privileged documents or communications are relevant to the deceased's intentions or competence.
This case was concerned with the issue of a testator's competence, which is not relevant to the present case. While I respectfully agree with White J's observation, for present purposes it casts little light on the intentions that the provision is intended to catch.
Initially, in their written submissions, the defendants argued that s 121 applied to Mrs Bowden's intentions with respect to the 2003 Deeds, and her testamentary wishes and disposition. It appears that they no longer press their case in respect of the 2003 Deeds.
The question then is - and this is the point I find elusive - what is the relevance to the present proceedings of any intentions that Mrs Bowden may have had in respect of either of her wills? The defendants do not claim, so far as I am aware, that any difficulty of construction arises in respect of either will that requires any consideration of Mrs Bowden's intention in making either will (see s 32 of the Succession Act 2006 (NSW)). The defendants asserted in their written submissions (par 18) that "[Mrs Bowden's] intentions and state of mind with respect to firstly the Deeds, secondly the Family Agreement of 2003 and thirdly her 2008 Will (and thereby the earlier transactions) are all relevant to the issues in the proceedings, including the Defendants' defences of estoppel, common intention and understanding and rectification". The defendants elaborated this submission in their oral submissions (T 56): … The covenants contained in the deed of assignment or the family deed contained the covenant whereby [Mrs Bowden] agreed to make the testamentary dispositions I referred to… We say the intentions are revealed in those instructions are covered by section 121. Similarly, when she made a decision to revoke the will in breach of the covenant… What we say in relation to both those transactions evidence her intentions is relevant to these proceedings in this respect, because (a), it was a covenant and the circumstances whereby she came to change her mind are also part of the general factual basis of this case. … So my learned friend says that there is no issue and therefore the questions of intentions are irrelevant. We say it goes further than that. We say that the word intentions can deal with any aspect obviously limited to her testamentary dispositions, I'm not going behind that, in relation to a person who is deceased. Therefore it is properly admissible.
Further (T 58): The evidence in Mr Bowden's affidavit is that he spoke to his mother and she fully understood that while she held the legal title the beneficial interest passed to him, and that she was to complete the gift by making the dispositions in her will so only the legal title passed. That's all she was given. It would be relevant to that issue because that is part of his case, a very basic part of his case… So the issue about her understanding and as to her understanding about obligations and why she revoked is relevant in that respect.
As I understand it, this case involves the proper construction of the 2003 Deeds, a determination of the legal effect of the alleged agreement that is recorded in the 1 July 2003 memorandum concerning the family meeting that occurred on that date, and whether by various means Mrs Bowden made representations to Mr Bowden that led to the formation of a common understanding and intention between the two that gives rise to an estoppel that prevents Ms Jaeger, as Mrs Bowden's executor, from asserting that the 2003 Deeds have a legal effect that is inconsistent with the representations and the common understanding and intention. That is only a preliminary and simplified statement of the issues in this case. With respect, I fail to see, or understand the case, as to how any instructions given by Mrs Bowden to her solicitors, or any communications between her and them, which relate to her testamentary intentions concerning her wills are in any way relevant to the issues. That is particularly so as, as I understand it, the first will that Mrs Bowden made was consistent with her obligation under the 2003 Deeds. The later will was inconsistent with that obligation, and reflected a change of mind by Mrs Bowden. I am not aware of any case pleaded by the defendants, or in any other proper way put by them, which would entitle the court to have regard to Mrs Bowden's testamentary intentions for the purpose of deciding any of the issues that I have outlined above.
I therefore do not see how any of the documents that the defendants now wish to inspect could have any relevance to the issues in these proceedings. In my view, that is sufficient reason for the court to reject the defendants' claim for access to this category of documents produced on subpoena by Mr Kilmurray.
Ms Jaeger submits that, in any event, the term "intentions", as used in s 121 of the Evidence Act, does not have the effect that Ms Jaeger loses her right to claim privilege in her capacity as Mrs Bowden's executor.
Ms Jaeger submits that s 121(1) does not apply to the intentions of the deceased generally, but rather, it is concerned with threshold questions going to validity such as testamentary intention or capacity.
In d'Apice v Gutkovich, White J referred to the following observations made by the Australian Law Reform Commission concerning the proposed s 121(1): I think this is consistent with the Australian Law Reform Commission Report on the Evidence Act. In the Australian Law Reform Commission, Evidence, Report No 26 (Interim) (1985), the Law Reform Commission said of the section which became s 121(1) (at [884]): In addition, the privilege will not apply to communications relevant to an issue between parties claiming through the same deceased client - for example, setting aside or resisting a grant of probate on grounds of testamentary incapacity or undue influence. [18] In the Australian Law Reform Commission, Evidence, Report No 38 (Final), the Commission said (at [196]): Evidence relevant to intention or competence. The interim proposal [viz the interim report] lifted the protection of the privilege in respect of evidence of the intentions or competence of a client or party who has died. This loss of protection would only operate where an issue arises of, for example, testamentary capacity or the intentions of the deceased in a testator's family maintenance case. It does not override rules of substantive law, such as those relating to the construction of the wills and other instruments.
Ms Jaeger submits that s 121(1) was not intended to have the effect of abrogating a deceased person's privilege in relation to all issues as to which that person's intentions may be relevant, and that the applicable principle of statutory construction is that statutes which may diminish important common law rights and immunities (such as legal professional privilege) "will be construed as effecting no more than is strictly required by clear words or as a matter of necessary implication": Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252; Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (ACCC) [2002] HCA 49; (2002) 213 CLR 543 at 553 [11].
I am inclined to accept the submissions put on behalf of Ms Jaeger, although I would prefer to base my decision on my conclusion that it has not been shown that Mrs Bowden's testamentary intentions are relevant in any real way to the issues in these proceedings. I do not think it is appropriate, in the absence of a necessity to do so, for me to decide this important point of statutory construction, given the brevity of the submissions that have been put to the court on this issue.
Ms Jaeger also submits that, even if the documents were in some way relevant to the issues, the defendants are in any event not entitled to rely upon s 121 of the Evidence Act, because that provision does not apply to the situation where a stranger to the litigation produces documents to court in answer to a subpoena, and that person does not make a claim that he or she has a legal professional privilege in respect of the documents produced, but rather a party to the proceedings makes a claim of that nature. Ms Jaeger submits that, in that particular context, s 131A of the Evidence Act does not have the effect that s 121 applies; so that the common law rules of evidence apply; and they do not include an equivalent of s 121.
On this subject, White J said in d'Apice v Gutkovich: [9] In Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151, Brereton J held that where there is an objection to the production of documents on subpoena (the first stage of the process of complying with a subpoena), then pursuant to r 1.9(3) of the Uniform Civil Procedures Rules and the definitions of "privileged document" and "privileged document" in the dictionary to the Rules, the question of whether privilege is available as an answer to production of documents is to be answered by reference to the Evidence Act (at [8]-[10]). [10] However, his Honour held that r 1.9 does not apply to the second stage where documents are called for production on subpoena, namely whether access to documents produced to the court should be provided to the parties for inspection. The Evidence Act does not apply to pre-trial procedures analogically and as neither the Civil Procedure Act 2005 (NSW) nor the Rules expressly apply to the second stage, his Honour found that at the stage of inspection the question of whether privilege attaches to the documents and whether such privilege has been waived was to be decided according to common law. His Honour's decision was followed by McDougall J in Waugh Asset Management Pty Ltd v Merrill Lynch [2010] NSWSC 197, where his Honour also held (at [11]) that s 131A (introduced after Carbotech-Australia Pty Ltd v Yates applies only "at the stage of production" of a document to the court, and not to the second stage. I would not depart from these decisions unless I were satisfied that they were clearly wrong. I do not consider them to be clearly wrong.
If it were necessary for me to do so, I would respectfully follow White J, and the other decisions to which his Honour referred, which would have the result that s 121 of the Evidence Act would not be available to the defendants in the circumstances of this application.
As an alternative, the defendants submit that documents relating to instructions for the preparation of a will cannot be privileged. Even if that principle is correct, it follows from what I have said above, that the defendants have not established that any instructions that Mrs Bowden gave for the preparation of either of her two wills has any real relevance to the issues in dispute in these proceedings. If her testamentary intentions are not relevant, the instructions that Mrs Bowden gave to her solicitors to prepare her wills should also not be relevant.
At this stage of the proceedings, I do not think it would be necessary or proper to make an order in favour of the defendants giving them access to any instructions that Mrs Bowden made for the preparation of her wills, even if the defendants are correct in their submissions that such instructions are not protected by legal professional privilege. Accordingly, there is no need to decide the point of principle raised by the defendants.
It will remain open to the defendants, if circumstances change and they believe they can make out a case as to the relevance to the issues of Mrs Bowden's instructions concerning the preparation of her wills, to renew their application for access to any such documents that may have been produced on subpoena by Mr Kilmurray.

Documents produced on subpoena by Mr Sim

Ms Jaeger claims privilege in the two documents produced by Mr Sim, being those at pages 11 and 16 of Exhibit KB-02 to Ms Beashel's 27 March 2015, which has become MFI 2. The defendants submit that these documents are likely to relate principally to instructions with respect to the preparation of Mrs Bowden's 2008 will.
In my view, the communications between Mrs Bowden and Mr Sim concerning Mrs Bowden's second will are even more remote from the issues that arise in the present proceedings than are her communications with Mr Kilmurray concerning the earlier will that was prepared in performance of Mrs Bowden's obligations under the 2003 Deeds. I reject the defendants' application for an order giving access to the documents in respect of which Ms Jaeger claims privilege, for essentially the same reasons as I have given above concerning the documents produced by Mr Kilmurray, and subject to the same qualification that the defendants may become entitled to renew their application.

Defendants' claims for orders for discovery

Order 1A(a). An Order, pursuant to UCPR 21.2, that the Plaintiff give discovery to the First Defendant of: (a) All documents created between 1 May 2003 and 30 March 2004 inclusive recording or disclosing advice given by Peter Kilmurray of Trisley Kilmurray Lawyers or any other legal adviser to Mrs Bowden or Kim Jaeger or anyone acting on their behalf, or instructions given by Mrs Bowden or Ms Jaeger or anyone acting on their behalf to Peter Kilmurray or Trisley Kilmurray Lawyers or any other legal adviser, in relation to: (i). the transactions or any of them contemplated by or referred to in the "Bowden Estate Plan Minutes of Meeting" as referred to in paragraph 99 of the Affidavit of Stephen Bowden dated 28 August 2014 ("Bowden Affidavit"); (ii). without limiting (a), the "Deeds" or "documents" and all drafts thereof (or any of them) as referred to in each of paragraphs 105, 106, 109, 110, 111, 116, 119-137, 141-145, 148-149 of the Bowden Affidavit ("Deeds");
The defendants press this category. The plaintiff opposes discovery on the basis of (1) no necessity and (2) no waiver.
As I understand it, the defendants press this claim on the basis of the submissions in pars 32 to 37 of their written submissions in support of their notice of motion.
The defendants said in par 32 of their primary submissions that their claim for Order 1A was only pressed if, and to the extent that, Ms Jaeger succeeds with respect to her application for orders that the defendants give discovery of documents. It may be that the position now taken by the defendants is, as stated in the preceding paragraph, and that the joint document that sets out the present ambit of the dispute between the parties has superseded the defendants' original submission in this respect.
The difficulty I have with this change of position by the defendants, if indeed they had changed their position, is that the only argument that the defendants appear to put in pars 32 to 37 of their written submissions is based upon the proposition that, if the defendants have to give the discovery sought by Ms Jaeger, then she should be required to give the discovery sought by them. Strangely, the defendants' claim appears solely to be put on a 'tit for tat' basis, as it were.
The documents that fall within the category of documents described in Order 1A(a) are all communications that constitute instructions given by Ms Jaeger and Mrs Bowden to their solicitors, or advice received from those solicitors. The court would ordinarily infer that those communications were privileged. It does not appear to me that the defendants have put any submission as to why they are not privileged.
Furthermore, the defendants have made no suggestion that Ms Jaeger, in her own capacity or as executor of Mrs Bowden's estate, has disclosed the contents of any of the privileged documents, or put in issue her state of mind, in any way that could arguably cause a waiver of privilege.
It is true that, under the former practice, when parties were entitled to discovery almost as of right, parties had to list privileged documents, even though an effective claim for privilege might have the result that the party claiming privilege did not have to disclose the privileged documents to the other party. Now that Practice Note SC Eq 11 applies, the court may decide that it is not necessary for the resolution of the real issues in dispute in the proceedings to order a party who claims privilege in respect of a category of documents, that appears clearly to be privileged, to verify a formal list of documents, when the only practical effect will be to formalise the claim for privilege.
In the present case, I do not consider that the submissions made by the defendants justify the court in imposing upon Ms Jaeger the pointless task of preparing a formal verified list of documents, within a category of documents which appear to be privileged, and in respect of which the defendants have not really attempted to prove to the contrary.
Order 1A(b). An Order, pursuant to UCPR 21.2, that the Plaintiff give discovery to the First Defendant of: 1. (b) All documents created between 1 May 2003 and 30 March 2004 which record, disclose or refer to any correspondence or communications between Mrs Bowden and Ms Jaeger relating to: (i). the Deeds or the negotiations leading to the execution of the Deeds; (ii). the document entitled "Bowden Estate Plan Minutes of Meeting" as referred to in paragraph 99 of the Bowden Affidavit or any drafts thereof; (iii). the stamping of the Deed of Assignment referred to in paragraph 141 of the Bowden Affidavit; and (iv). the purchase of the Gosford Palms Motor Inn referred to in paragraph 146 of the Bowden Affidavit.
The plaintiff agrees to give discovery of Category 1A(b).

Conclusion

The parties should bring in short minutes of order to give effect to these reasons for judgment.
I will hear the parties on costs, but it seems to me that the appropriate order is probably that the costs of the two notices of motion should be the successful parties' costs in the cause. I do not invite the parties to make detailed submissions on the issue of costs.

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