Lifeplan Australia Friendly Society Ltd v Woff

REASONS FOR JUDGMENT 1 The decision concerns the entitlement of the applicants to inspect documents produced to the Court by a non-party in compliance with a subpoena. It is made in the unusual circumstance that, whilst the first and second respondents claim legal professional privilege in respect of some of the subpoenaed documents, they have chosen not to advance any evidence or submissions in support of that claim. 2 The applicants, Lifeplan and FPM respectively, sell prepaid funeral plans. FPM is a wholly owned subsidiary of Lifeplan. 3 Until his resignation on 29 December 2010, the first respondent (Mr Woff) was employed by Lifeplan in Melbourne as Manager of FMP. The second respondent (Mr Corby) was employed as National Sales Manager by Lifeplan and was also based in Melbourne. He reported to Mr Woff. Mr Corby resigned his employment on 25 November 2010. 4 Lifeplan and FPM allege that, during the course of their employment, Mr Woff and Mr Corby took, without permission, their confidential information and intellectual property. They allege that, since leaving their employment, Mr Woff and Mr Corby have established a new entity, Funeral Planning Australia Pty Ltd (FPA) to compete directly with their business. FPA, which is now in liquidation, is the third respondent to the proceedings. 5 Lifeplan and FPM allege that on 31 December 2010, Mr Woff and Mr Corby entered into employment contracts with the fourth respondent (Foresters): Mr Woff as General Manager and Mr Corby as National Sales and Marketing Manager. They also allege that on 31 October 2010, Foresters entered into an agreement with FPA in the nature of a joint venture pursuant to which FPA was to provide and market Foresters' funeral plan products. 6 Lifeplan and FPM allege that Mr Woff and Mr Corby have breached their employment and fiduciary duties by, amongst other things, taking and exploiting to their own advantage the applicants' intellectual property and confidential information. They allege further that, since the commencement of their employment by Foresters, Mr Woff and Mr Corby have infringed the applicants' copyright in materials which they have produced for use in the business of FPA. 7 FPA has taken no part in the proceedings. Foresters is separately represented. 8 On 14 October 2014, Lifeplan and FPM issued, by leave, subpoenas addressed to a number of persons. One of these was MGR Accountants Pty Ltd. The subpoena required MGR Accountants to produce: All documents describing, recording or constituting any communication or dealing with, or received from or provided to: (a) Noel Woff; (b) Richard Corby; (c) FPA or Funeral Planning Australia Pty Ltd or FPA or Funeral Planning Australia or Funeral Planning Australia Pty Ltd or Funeral Planning Australia Pty Ltd (in liquidation) ACN 147 314 663; or (d) Ancient Order of Foresters in Victoria Friendly Society Limited ACN 087 648 842 (including under the name "Foresters Friendly Society" or any other name), since 1 January 2010. 9 KellyHazellQuill Lawyers answered the subpoena on behalf of MGR Accountants on 28 January 2015, producing to the Court three folders of documents as well as documents in an envelope marked "Privileged Documents". In an accompanying letter, KellyHazellQuill Lawyers said that the defendants in the proceedings asserted legal professional privilege in respect of the documents in the envelope. They did not assert any claim of privilege on behalf of MGR Accountants themselves or on behalf of any other person. 10 It is evident that the defendants to whom KellyHazellQuill Lawyers referred were Mr Woff and Mr Corby. Foresters has not made any claim for privilege in relation to the documents contained in the envelope. 11 On the same day, a Registrar gave the parties leave to inspect and copy the documents produced by MGR Accountants over which no claim for privilege had been made and gave the legal representatives of Mr Woff and Mr Corby leave to inspect the documents in the envelope. The Registrar directed that any claim for privilege in respect of those documents, together with its basis, was to be notified to the other parties by 4:00pm on 4 February 2015. 12 Esser Legal, the solicitors for Mr Woff and Mr Corby, purported to comply with the Registrar's order by an email sent on 4 February 2015 which said: Our clients claim the privilege on the basis that each such document is a letter or communication passing between the client(s) and for the purpose of seeking or receiving legal advice. This is the only articulation of the basis of the claim for privilege which has been provided. As can be seen the articulated basis is quite narrow. 13 On 12 February 2015, Lifeplan and FPM filed an application seeking leave "to uplift and inspect" all documents in the envelope. At a directions hearing on 17 February 2015, Mr Esser from Esser Legal informed the docket Judge, Besanko J, that the application for leave to inspect was opposed. In order to avoid the possibility that his ability to hear the underlying proceedings may be compromised by his inspection of the documents, Besanko J referred the application for hearing by another judge. 14 In an email to the Associate of Besanko J on 20 February 2015, Esser Legal said (relevantly): For your assistance we also now provide the following information: … 3. At present our clients are content to inform the Presiding Judge's Associate (by way of letter copied to all interested parties) that they continue to maintain their claim for legal professional privilege in respect of each and every of the documents kept for the time being in the sealed envelope. This position is in line with the claim for privilege which is already before the Court. 4. It follows we had no objection to the Presiding Judge breaking the seal on the envelope and examining each of the documents inside for the limited purpose of determining, whether as a matter of law, the privilege extends to the subject document. 15 Before listing the application for hearing, the Court sought an indication from the parties as to whether further affidavits would be filed as well as an estimate of the time required for the hearing. The substance of the response from Esser Legal on 2 March 2015 was as follows: As you know, we act for Noel Woff and Richard Corby, the first and second respondents in these proceedings. While we do not have instructions to file any further affidavits in connection with the application and we do not have instructions to appear, we are nevertheless instructed to maintain our objection to revealing any further documents to the Applicants and their solicitors, based on legal professional privilege. For the avoidance of doubt, we re-state that our clients' claim of legal professional privilege is made in connection with each and every document contained in the sealed envelope which we delivered to the Court in answer to the subpoena. It follows from our instructions we have no objection to His Honour, in Court, breaking the seal and then examining each document for the limited purpose of ruling whether the claim for privilege can be made or not. From memory there may have been about 30 documents in the file. We submit that, on its face, each such document is easily identified as privileged. We expect that it would take less than one hour for the judge to look at each document individually and to make a ruling. 16 There was no appearance by Mr Woff or Mr Corby, or any legal representative on their behalf, at the hearing on 5 March 2015 of the application by Lifeplan and FPM.