In November 2016, the plaintiffs ("the Craigs") commenced professional negligence proceedings against the partners of the legal firm Johnson Winter and Slattery ("JWS"). The Craigs claim that negligent advice was given to them in relation to an offer of settlement made in September 2013 to resolve proceedings that they had commenced in the Commercial List of this Court against an inventor and associated companies - ("the Commercial Proceedings"). The offer was, on advice, "ignored". In November 2013, the Craigs lost the commercial proceedings.
The Craigs claim damages from JWS for the lost opportunity to accept the settlement offer, or in the alternative, the lost opportunity to negotiate a more favourable outcome and avoiding having to pay the costs of the Commercial Proceedings.
JWS deny liability and contest that the Craigs can establish the case required under ss 5B and 5D of the Civil Liability Act 2002 (NSW). JWS has pleaded s 5O of the Civil Liability Act (the peer professional defence) and denied that any loss or damage was suffered at all. Contributory negligence is also alleged.
In the context of this litigation, the Craigs have issued, for the second time, a subpoena to produce documents to a solicitor, Ms Fiona Inverarity, who acted for the defendants in the Commercial Proceedings - ("the Silverbrook Parties").
On 6 August 2019, JWS filed a notice of motion seeking an order setting the subpoena aside, with costs. For the reasons that follow, I set aside the subpoena as an abuse of process, with an order that the Craigs pay JWS's costs of the motion.
[2]
Procedural history
The proceedings have had a less than smooth history. A statement of claim was filed in November 2016 and was then significantly amended on 10 March 2017. The whole claim was again substantially re-pleaded in a Further Amended Statement of Claim in December 2018.
An application filed by the Craigs for a separate determination of liability and damages issues was filed in October 2017. It was not ready to be argued as listed in December 2017. The order sought was re-cast in May 2018. The hearing on 24 May 2018 was unable to be completed because the evidentiary material that would allow the court to make the necessary assessment of whether there were overlapping issues had not yet been prepared, filed or served. The application was adjourned part heard.
There were delays in the filing and service of the Craigs' evidentiary statements. There were multiple directions hearings and re-negotiated timetables for the necessary evidentiary statements and hearing dates for the notice of motion regarding the separate question.
[3]
The previous subpoena, notice of motion and ruling over the confidential documents held by Ms Inverarity
Against this background, in April 2018 the Craigs first issued a subpoena to produce documents to the solicitor for the Silverbrook Parties in the Commercial Proceedings, Fiona Inverarity. The schedule to the subpoena sought:
(1) File notes made by you on or about 6 September 2013 to record the instructions pursuant to which you (practising as "In Legal" solicitors) sent a letter ("Offer Letter") to Johnson Winter Slattery solicitors dated 6 September 2013 making an offer to settle proceedings numbered 2010/333159 in the Supreme Court of New South Wales ("Proceedings")."
(2) The email or emails to which the Offer Letter was attached
(3) File notes made by you recording any telephone conversations which you had with Mr Andreas Piesiewicz, Solicitor employed by Johnson Winter Slattery or any other person at Johnson Winter Slattery in relation to the subject matter of the Offer Letter and any response thereto.
(4) Any letter, email, or other documents which you received from Johnson Winter Slattery referring or referring to the Offer Letter or its contents.
(5) Any documents which you have which define the value or quantum of the offer made in the Offer Letter.
Ms Inverarity complied with the subpoena and provided documents to the Court in response, and claimed legal professional privilege over material produced.
The Craigs sought orders by notice of motion that objection taken by Ms Inverarity to inspection of the documents produced by her should be "overruled" and access given to the material she had produced on the basis that the legal professional privilege had been waived.
At the hearing of the motion on 1 June 2018 Mr Archibald of counsel appeared and made submissions as to why the order he sought should be made. JWS proceeded on the basis that the question of privilege and waiver was a matter for the Court, and made no formal submissions.
I dismissed the notice of motion with costs for the reasons set out in Loretta Craig & Ors v Anthony Johnson & Ors [2018] NSWSC 1539. As set out in that judgment, consistently with the approach in Grant v Downs (1976) 135 CLR 674; [1976] HCA 63, I reviewed the documents produced and concluded that the documents were confidential communications between the client and a lawyer acting for the client or confidential communications made between two or more lawyers acting for the client [19].
I specifically considered the arguments made regarding waiver of privilege and concluded that the facts underlying the assertion of waiver were not made out. I also considered the argument posed in relation to s 126 of the Evidence Act 1995 (NSW), that there had been waiver by reason of the communication of the offer of settlement. To the extent that it was in fact pressed, I rejected that argument as incorrect [32].
Leave to appeal my decision was sought, submissions filed and a hearing date obtained, however when the matter was called on in the Court of Appeal on 24 May 2019, the application for leave was "withdrawn", and the Court of Appeal made orders dismissing the Summons, with costs.
The Silverbrook parties and Ms Inverarity had been named as respondents to that appeal. In that context, the Silverbrook Parties forwarded a letter to the solicitor for JWS on 1 April 2019 stating that they maintained privilege over any privileged documents that were produced by their former solicitor in answer to the 2018 subpoena.
[4]
The subpoena issued on 19 June 2019 to Ms Inverarity
On 19 June 2019 the Craigs issued a further subpoena for production to Ms Inverarity, seeking at least potentially, part if not all of the same material sought in the April 2018 subpoena.
The schedule to the June 2019 subpoena was as follows:
All 'documents" as defined in the Dictionary to the Evidence Act 1995 (New South Wales) (not including solicitors' file notes) which record, state, set out or confirm the instructions (or any component thereof) received from any one or more of the clients for whom you acted, pursuant to which you (practising as "In Legal solicitors) sent a letter ("Offer Letter") to Johnson Winter Slattery solicitors dated 6 September 2013 making an offer to settle proceedings numbered 2010/333159 in the Supreme Court of New South Wales ("Proceedings").
Quite apart from the fact that the documents sought would almost without question have to result in production of privileged documents, the Craigs' solicitor was informed by communications from Ms Inverarity on 9 and 11 July and on 6 August 2019, that the documents that would respond to the schedule were exactly the same as those that had been the subject of the previous determination of the Court and as a result, the same position would be taken by her over the documents - i.e. that legal professional privilege applied to the documents. Nevertheless, the Craigs' solicitor pressed for production.
[5]
Submissions of JWS
JWS argued that the subpoena seeks to re-litigate an issue which had already been determined in this Court as well as in the Court of Appeal when it dismissed the summons seeking leave to appeal.
The documents sought in the new subpoena are in substance either the same or in the same category as documents already found by the court to be privileged.
The Court may set aside a subpoena for various reasons, including if it constitutes an abuse of process. UCPR 33.4.
Reliance was placed on what the Court of Appeal said in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 at [15]:
"The accountants were not parties to the action in the Supreme Court, nor were they privies of the vendor, and they cannot claim the benefit of any cause of action estoppel or issue estoppel: see James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 at 362, per Spigelman CJ. However in Reichel v Magrath (1889) 14 App Cas 665 the House of Lords held that a defence which was not barred by res judicata estoppel may nevertheless be struck out as an abuse of process. Lord Halsbury LC said (at 668): "… it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again … there must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure … ."
[6]
Submissions of the Craigs
Counsel for the Craigs, Mr Archibald, argued that the correct test, based on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 at 602, was whether it would be unreasonable for the plaintiffs to now seek access to the documents produced by Ms Inverarity.
As I understand the argument, it is not unreasonable because the Craigs, through no fault of their own, at the time the previous subpoena was issued and argued, did not apprehend that their solicitor had a description of the documents produced and so could not mount the arguments they wished to as to waiver of privilege. This subpoena now seeks "different" documents because, unlike the earlier subpoena, the schedule to this subpoena specifically excludes file notes.
Mr Archibald argued that it is reasonable for the Craigs to issue this further subpoena to determine whether Ms Inverarity was in possession of any other documents, which recorded her instructions but were not "file notes" because "this would put the matter beyond doubt".
The written submissions filed on behalf of the Craigs deviated into matters that were proposed to be argued in the Court of Appeal but were never argued as the appeal did not proceed. The arguments appear to be based on a view that any parts of confidential documents that recorded instructions as to the terms upon which an offer of settlement was to be made, lose legal professional privilege once an offer of settlement is made that reflects those instructions.
I interpolate here that this argument - or something close to it - was made orally when dealing with the 2018 subpoena and was rejected by me as incorrect. If that rejection was to be challenged, the opportunity to do so was in the appeal but it was not pursued and the appeal was dismissed.
Mr Archibald relied upon Moreay Nominees Pty Ltd v McCarthy (1994) 10 WAR 293 at 305-306 as support for the proposition that waiver had occurred. He argued that the effect of the judgment of Owen J (with the concurrence of Pidgeon and Wallwork JJ) was to conclude that the correct approach to determine whether there had been a waiver was to assume that privilege initially applied to settlement discussions between a lawyer and client, and then to ask whether the conduct of the parties, particularly the client, the nature of the dispute and the interests of justice generally required a conclusion that the privilege was waived in relation to all or part of the discussions.
Counsel for the defendant Mr Lloyd argued that even if the test is merely one of unreasonableness of the kind advanced by Mr Archibald, the conduct of the Craigs, in issuing this further subpoena, is unreasonable. The Craigs had the previous opportunity to litigate the questions associated with whether documents produced by Ms Inverarity were appropriately protected by legal professional privilege. They failed at first instance and then despite filing an application for leave and an appeal with detailed grounds and written submissions, at the last minute withdrew the appeal, with the result that the Court of Appeal dismissed the appeal. To now seek to re-litigate the same point but on a different basis is patently unreasonable.
[7]
Decision
The subpoena should be set aside as an abuse of process.
Whilst it may be that the subpoena was designed to catch documents that may not have been produced on the last occasion, because of the terms of the schedule, it inevitably does capture the same documents.
First there is the infelicitous use of the term "all documents" at the beginning of the schedule followed by the exclusion - "except file notes" - which causes confusion in interpretation.
Second, in requiring "all documents" that "record, state, set out or confirm the instructions", production of items such as confidential communications with counsel and others in the legal team - such as those already produced in 2018 and subject to the ruling already made - are again caught by the subpoena.
There is no assistance to be obtained from the decision of Moreay Nominees. The issue examined in that case was what a court should do with respect to legal professional privilege where proceedings subsequently issued by a client, and so the holder of the relevant privilege, disputed that certain instructions were given. In such a case there is a solid basis upon which to find that privilege is waived by a client who chooses to litigate these issues.
The nature of the dispute is not a matter that establishes that there has been any waiver of privilege by or on behalf of the Silverbrooks. They are not a party to these proceedings. To the extent that they were briefly involved as respondents to the appeal, they took the opportunity to assert in writing that they maintained their privilege over the documents produced in 2018. The privilege over the documents is not waived, and for the reasons I set out in Loretta Craig & Ors v Anthony Johnson & Ors [2018] NSWSC 1539, nothing Ms Inverarity did or did not do had the effect of waiving privilege.
The reality of what is being sought by the issue of this further subpoena to Ms Inverarity is to attempt to use the Court's subpoena process to obtain access to documents already ruled to be protected from disclosure by legal professional privilege.
As submitted by Mr Lloyd, this is vexatious, oppressive and unfair. Even if it was not so to begin with, to pursue the subpoena to press for access, having been told of the fact that the same documents already held to be privileged are the only documents that respond, amounts to an abuse of the processes of this Court.
[8]
Costs
The notice of motion sought an order that the plaintiffs pay the defendants costs of the motion forthwith. I have not yet entertained submissions on costs but make the following observations.
On 26 June 2019, the solicitors for JWS wrote to the solicitor for the Craigs explaining the bases of their view that the subpoena issued on 19 June 2019 was an abuse of process and proposing that the subpoena be withdrawn.
On 9 and 11 July and on 6 August 2019, the recipient of the subpoena Ms Inverarity explained in writing to the solicitor for the Craigs that the documents responsive to the subpoena are identical to those already ruled upon and that the change in wording of the schedule to the subpoena made no effective difference to this.
I have granted the order setting aside the subpoena and so JWS should be awarded their costs of the motion. The question is whether I should order that those costs be paid forthwith.
The order I make at this stage is that the plaintiffs are to pay the defendants' costs of the notice of motion.
If JWS wishes to press the additional aspect to the costs order, notice should be given to the solicitor for the Craigs within 7 days and a timetable agreed for written submissions and, if necessary, evidence to be filed addressing that issue.
[9]
ORDERS
The orders I make are as follows:
1. Pursuant to UCPR 33.4, the subpoena to produce documents issued to Fiona Inverarity filed on 19 June 2019 is set aside.
2. The plaintiffs are to pay the defendants costs of the notice of motion
3. If the defendants wish to press for an additional order that the costs of the motion are to be paid forthwith, notice in writing must be provided to the solicitor for the plaintiffs within 7 days of this judgment and a timetable agreed within 14 days of judgment for the filing and serving of any necessary evidence and written submissions.
4. A copy of this judgment is to be provided to Ms Inverarity.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 April 2020