Mango Boulevard Pty Ltd v Whitton; In the matter of Spencer

JUDGE: GREENWOOD J DATE: 2 april 2014 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 These proceedings are concerned with an interlocutory application made by the second and third respondents in the principal proceeding, Mr Spencer and Ms Perovich, heard on 17 March 2014. 2 By their application, they seek an order that the applicants in the principal proceeding, Mango Boulevard Pty Ltd ("Mango") and BMD Holdings Pty Limited ("BMD") produce for the Court's inspection (pursuant to r 20.35 of the Federal Court Rules 2011) 47 documents recited at para 1 of the application in respect of which Mango and BMD assert various grounds of privilege from production. 3 By para 2, they seek an order that the documents recited in para 1 for which no valid claim to privilege attaches, be produced to them. 4 By para 3, they seek an order that Mango and BMD discover any other documents relevant to the issues in the action "which they have presently failed to discover", in particular, but not limited to, the documents in categories described as documents "which relate to the applicants' dealings with the former trustees" of the estates of Mr Spencer and Ms Perovich, and documents "which relate to the matters in issue in the [principal] proceedings". 5 By para 4, they seek an order that Mango and BMD produce a revised electronic trial bundle accommodating particular requirements and by para 5 they seek orders for security for costs against Mango and BMD. 6 Mango and BMD filed an application which also was returnable on 17 March 2014. By that application, they seek particular directions under s 50(1) of the Evidence Act 1995 (Cth). That matter was substantially resolved prior to the commencement of the interlocutory applications made on 17 March 2014. 7 As to the security for costs aspect of the interlocutory application by Mr Spencer and Ms Perovich, their solicitors failed to serve the affidavit material in support of that part of the application until the last minute (put anecdotally) as a result of which counsel for those applicants, Mr Douglas QC (and Mr Burrow) conceded that that part of the application could not proceed and ought to be adjourned. 8 An indemnity costs order followed. 9 The questions dealt with on 17 March 2014 therefore were concerned with the application for inspection of the documents about which privilege was claimed, and further discovery. 10 Mr Ian Walker is a member of the firm Minter Ellison, the solicitors acting for Mango and BMD. Mr Walker has the carriage on behalf of those parties of the principal proceeding. In Mr Walker's affidavit sworn 24 January 2014, he addresses aspects of the claims for privilege in relation to the documents the subject of the present application. At para 23, Mr Walker acknowledges that Document 0145 described in his affidavit as "Priv [privileged] Letter - Letter from I Slatter to KHD [Kinsella Heights Developments Pty Ltd ("KHD")] marked without prejudice (copied to Spencer and Perovich) containing demand for payment of monies owed to him", although discovered by Mango and BMD and withheld from production on a ground of privilege, has been disclosed to Mr Spencer and Ms Perovich and thus privilege has been waived. 11 No further claim for privilege is pressed in respect of this document. 12 At para 24, Mr Walker says that the following 25 documents recited in para 1 of the present application have been discovered by Mango and BMD and withheld from production on the ground that the documents are subject to a claim of without prejudice privilege. List of Documents Number in List Discovery Number Description 0035 MHD.04.001.0178 Priv Agreement - From Mango to SV Partners - Transfer of Shares 0036 MHD.04.001.0192 Priv Agreement - From Mango to SV Partners - Heads of Agreement 0037 MHD.04.001.0257 Priv Agreement - From Mango to SV Partners - Heads of Agreement 0533 MHD.03.005.0057 Priv Email - Clayton Utz to IL Walker regarding negotiation to resolve dispute regarding I Slatter loans 0564 MHD.03.005.0149 Priv Email - IL Walker to Clayton Utz regarding negotiation to resolve dispute regarding I Slatter loans 0565 MHD.03.005.0156 Priv Email - Clayton Utz to IL Walker regarding negotiation to resolve dispute regarding I Slatter loans 1202 MHD.03.005.0199 Priv Letter - L Willis to J Atkinson negotiating repayment of certain loan agreements 1620 MHD.03.006.0093 Priv Letter - Minter Ellison Calderbank letter to Hume Lawyers on behalf of BMD 1623 MHD.03.001.0038 Priv Fax - Minter Ellison Calderbank letter to P Sayer (QLG) on behalf of BMD 1755 MHD.03.002.0023 Priv Letter - Tucker & Cowen to Gall Stanfield Solicitors regarding negotiations of dispute surrounding I Slatter loan

Supplementary List Number in List Discovery Number Description giving in Privilege Application 191 MHD.10.001.0375 Memorandum - From Greg Rodgers to Ian Walker 198 MHD.10.001.0318 Letter from Ian Walker to Greg Rodgers 202 MHD.10.001.0311 Email from Stocks to Russell Thomson, Mick Power, Craig Mortensen, Andy Marcos, Ken Bird and John Atkinson discussing attempts to negotiate a settlement with the trustees and discussing advice received from Minter Ellison 203 MHD.10.001.0314 Email from Stocks to Russell Thomson, Mick Power, Craig Mortensen, Andy Marcos, Ken Bird and John Atkinson discussing attempts to negotiate a settlement with the trustees and discussing advice received from Minter Ellison 207 MHD.10.001.0265 Without prejudice letter from Ian Walker to Greg Rodgers re composition 208 MHD.10.001.0268 Email from Ian Walker to Greg Rodgers 213 MHD.10.001.0165 Letter from Ian Walker to Greg Rodgers 217 MHD.10.001.0062 Without prejudice letter from Minter Ellison to Mills Oakley Lawyers regarding assignment of rights under Share Sale Agreement and settlement of monies owed to TVM 220 MHD.10.001.0271 Heads of Agreement between Mango and SV Partners 221 MHD.10.001.0283 Heads of Agreement between Mango and SV Partners 222 MHD.10.001.0295 Heads of Agreement between Mango and SV Partners 223 MHD.10.001.0356 Heads of Agreement between Mango and SV Partners 224 MHD.10.001.0409 File note by Urbex of without prejudice meeting with SV Partners 225 MHD.10.001.0419 File note with handwritten notes of without prejudice meeting with SV Partners 226 MHD.10.001.0427 Heads of Agreement

13 These documents are described a little differently in the List of Documents and the Supplementary List of Documents. Document 0035, for example is described in Part 1 of the List of Documents (sworn by Ms Jodi Nicole Palmer on 27 March 2012), as "Agreement for Transfer of Shares". In the application, that document is described as "Priv Agreement - from Mango to SV Partners - Transfer of Shares". In the list of documents sworn to by Ms Palmer she says that the Part 1 documents in the list are documents in the control of Mango and BMD but that parts of the documents in Part 1 are concealed on the footing that the applicants claim privilege from production of those parts "on the grounds that production would disclose legal advice". Also, the documents set out in Part 1 are said to include communications with the solicitors of the former trustees in bankruptcy (of Mr Spencer and Ms Perovich), Terry van der Velde and Paul Desmond Sweeney, which are the subject of "without prejudice" privilege. 14 Ms Palmer says that the documents set out in Part 2 of the list are the subject of a claim for privilege from production of each document on the ground of communications between Mango and BMD on the one hand, and their legal advisers on the other, made for the purpose of obtaining legal advice. 15 In simple terms, Mr Spencer and Ms Perovich say that they cannot be satisfied about the appropriateness or validity of the claims for privilege recited in the affidavits verifying each list, by reference to the description of the document in the list or in the supplementary list. They seek an order that the documents the subject of the various claims for privilege be produced to the Court under r 20.35(1) of the Federal Court Rules 2011 so that the Court can inspect each document and determine, pursuant to r 20.35(2), the validity of the objection to production on the claimed ground of privilege. 16 As to the 25 documents described at para 24 of Mr Walker's affidavit, he says this at para 25. 17 The privilege claimed for those documents arises because the communications relate to settlement negotiations conducted on a without prejudice basis between Mango and BMD on the one hand and the former trustees and their legal representatives, Rodgers Barnes & Green, on the other, and settlement negotiations on a without prejudice basis between Mango and BMD on the one hand, and Mr Ian Slatter and his legal representatives on the other. 18 In relation to the negotiations with Mr Slatter, those negotiations are said by Mr Walker to concern the resolution of a dispute in relation to a loan made by Mr Slatter to KHD that resulted in Mango paying Mr Slatter a settlement sum so as to avoid Mr Slatter enforcing a charge granted to him by KHD over its assets and undertaking. Mr Bloemendal from Clayton Utz acted for Mr Slatter. Mango contends that the existence of the charge had not been disclosed by Mr Spencer or Ms Perovich in breach of a Share Sale Agreement between them and Mango. The settlement sum paid by Mango to Mr Slatter then became part of Mango's claim for a set-off against amounts payable by it to Mr Spencer and Ms Perovich under the "first tranche" of the Share Sale Agreement. 19 The negotiations with the former trustees did not result in a settlement. However, Mr Walker says that the documents which he describes in para 24 of his affidavit are not susceptible of disclosure because, first, those documents were provided to Mango and BMD on a confidential basis and, second, all parties entitled to claim privilege (which presumably is a reference to a without prejudice privilege) in respect of the documents have not agreed to waive the entitlement to privilege. 20 At para 26 of his affidavit, Mr Walker says that the following 11 documents have been discovered and withheld from production by Mango and BMD on the ground that each document is subject to a claim of common interest legal professional privilege. List of Documents Number in List Discovery Number Description giving in Privilege Application 1885 MHD.04.001.0280 Priv File Note - Rodgers Barnes & Green - transfer of Perovich Shares 1886 MHD.04.001.0277 Priv File Note - Rodgers Barnes & Green - transfer of Perovich Shares 1888 MHD.04.001.0271 Priv Memo - Rodgers Barnes & Green to IL Walker 1891 MHD.04.001.0176 Priv Email - Rodgers Barnes & Green to IL Walker 1932 MHD.04.001.0231 Priv Agreement - Heads of Agreement (Draft) 2050 MHD.03.004.0174 Email - CBA to IL Walker 2053 MHD.03.004.0172 Fax - IL Walker to CBA 2054 MHD.03.004.0173 Transmission Report - CBA 2057 MHD.03.004.0165 Email - IL Walker to CBA

Supplementary List Number in List Discovery Number Description giving in Privilege Application 189 MHD.10.001.0393 File Note - Greg Rodgers re Perovich Shares 190 MHD.10.001.0380 Memorandum - from Greg Rodgers to D Hickey containing legal advice regarding Spencer and Perovich

21 At para 26 Mr Walker says that common interest legal professional privilege arises in respect of each document because the documents are either "legal opinions" provided by Rodgers Barnes & Green to Mr Walker "regarding the options for resolution of matters concerning the bankrupt estate in respect of which [Mango] had an interest"; or "communications" between Minter Ellison and the Commonwealth Bank of Australia "requesting and providing legal advice regarding a dispute between [Mango] and [Mr Spencer and Ms Perovich] that had been brought to the Commonwealth Bank's attention by [Mr Spencer and Ms Perovich] in connection with a resolution made by the Board of [KHD] relating to the extension of the Commonwealth Bank Facility". Mr Walker says that the Commonwealth Bank was a former financier of the property development project in respect of which the various participants held an interest either individually or through particular corporate structures and trusts, called the "Mango Hill Project". 22 At para 5 of his affidavit sworn and filed on 14 March 2014, Mr Walker makes further reference to the documents described at para 26 of his 24 January 2014 affidavit (listed at [20]) over which Mango and BMD claim "common interest" privilege. Mr Walker says that those documents which contain legal opinions provided by Rodgers Barnes & Green to him are also the subject of a claim for without prejudice privilege because the communications relate to settlement negotiations conducted on a without prejudice basis as described in Mr Walker's affidavit sworn 11 January 2013 at paras 37 and 41, Mr Atkinson's affidavit sworn 5 December 2012 at paras 36 to 39, Mr Rodgers's affidavit sworn 5 December 2012 at paras 32 and 35 and Mr van der Velde's affidavit sworn 5 February 2013 at para 8. Mr Walker also says that Documents 1885, 1886 and 1888 of the List of Documents and Document 190 of the Supplementary List of Documents (at [20]) were provided to him by Mr Rodgers on a confidential basis in the context of the without prejudice communications to identify the issues and processes that would need to be dealt with and followed by Mango, BMD and the former trustees for an agreement to be reached between them. 23 As to Mr Walker's affidavit of 11 January 2013, he says at paras 37 and 41 that on 13 August 2010, Mango commenced discussions with the former trustees of the estate of Ms Perovich on a without prejudice basis to try and reach a settlement of the issues between Mango, BMD and the Perovich estate (arising out of the suite of agreements entered into between Mr Spencer (as trustee relevantly), Ms Perovich, Mango (as trustee) and others including KHD and Neolido Holdings Pty Ltd ("NLH") concerning the Mango Hill development project). At para 37, Mr Walker notes the contention of Mr Rodgers, the solicitor for the former trustees, that once Ms Perovich became aware of the negotiations she took steps to propose a composition with her creditors under s 73 of the Bankruptcy Act 1966 (Cth) (the "Bankruptcy Act"). 24 At para 41, Mr Walker says that he was involved in the 2010 negotiations between Mango and the former trustees which were designed to bring about the transfer of the Perovich shares in KHD (as property of the bankrupt estate) to Mango. Mr Walker says the former trustees were close to reaching agreement with Mango to transfer the shares. However, Mr Rodgers on behalf of the former trustees, advised Mr Walker that the former trustees were not willing to enter into any agreement to transfer the shares prior to the creditors determining whether the former trustees ought be replaced. 25 As to Mr Atkinson (who was either a "BMD Group" or "BMD Consulting" or "Urbex Pty Ltd" person), he says at paras 36-39 of his affidavit that on 13 August 2010 he and Mr Stocks (the Company Secretary of both Mango and BMD) met with Mr Cronan and Mr Hickey of SV Partners (references are made by Mr van der Velde in his affidavit to his "bankruptcy team" from SV Partners) to discuss a commercial settlement concerning the acquisition from the estate, of Ms Perovich's 25% share in KHD. Mr Atkinson says that the discussions were held on a confidential and without prejudice basis. The former trustees, according to Mr Atkinson, demonstrated a willingness to reach a commercial settlement. In August 2010, Ms Perovich enquired of the former trustees, says Mr Atkinson, about aspects of an annulment of her bankruptcy consequent upon a composition with her creditors, under s 73 of the Bankruptcy Act, in the context of her enquiries about approaches made by BMD for a commercial settlement of the claim for a transfer of the Perovich KHD shares (held by the bankrupt estate). The proposal for removal of the former trustees was to be put to a meeting of creditors on 4 November 2010. Mr Atkinson says that the former trustees were unwilling to sign the Heads of Agreement document put to them by Mr Walker arising out of the earlier negotiations. 26 Mr van der Velde says that Mr Sweeney and the SV Partners' bankruptcy team conducted the negotiations with Mango concerning the acquisition of the Perovich shares. Those negotiations were completed shortly before the creditor meetings called to vote on the removal resolution. Mr Rodgers assisted the former trustees in the negotiations with Mango. 27 Mr Rodgers in his affidavit describes the sequence of commercial negotiations with Mr Stocks and Mr Atkinson concerning attempts at settlement of the claims by the Perovich estate against Mango and BMD and the issue of the transfer of the Perovich shares to Mango. He says the negotiations proceeded on a without prejudice basis. Mr Rodgers describes at para 34 the "impression" he had gained by September 2010 that Ms Perovich had become aware of the negotiations with Mango, the emergence of the Perovich composition and annulment proposal, and the responses of the former trustees to the initial proposal. 28 Mr Rodgers says the negotiations between Mango and the former trustees continued until 6 October 2010 when the Heads of Agreement document was finalised. However, the former trustees instructed Mr Rodgers that the document would not be signed until the removal resolution was addressed by the creditors at a meeting. 29 Mr Walker also says (at para 7 of his 14 March 2014 affidavit) that Document 189 (at [20]) is mis-described both by him (at para 26 of his affidavit of 24 January 2014) and by Mr Spencer and Ms Perovich in their interlocutory application. Mr Walker says Document 189 is actually a memorandum containing legal advice provided by Mr Walker to Mr Atkinson and Mr Stocks. 30 At para 27 of his affidavit, Mr Walker says that the following 13 documents have been discovered and withheld from production by Mango and BMD on the ground that each document is subject to a claim of legal professional privilege. List of Documents Number in List Discovery Number Description giving in Privilege Application 1932 MHD.04.001.0231 Priv Agreement - Heads of Agreement (Draft) 2030 MHD.03.005.0220 Draft Letter - Mango to Tucker & Cowen

Supplementary List Number in List Discovery Number Description giving in Privilege Application 176 MHD.10.001.0254 Priv Copy of Memorandum - change of trustees - with handwritten notes summarising legal advice received 181 MHD.10.001.0457 Draft Letter from Minter Ellison to Delta Law 184 MHD.10.001.0413 Email from Atkinson to Mick Power, Ken Bird, Russell Thomson, Scott Power, Craig Mortensen, Tony Stocks and Ian Walker regarding meeting with SV Partners 185 MHD.10.001.0410 Email from Tony Stocks to John Atkinson, Russell Thompson, Craig Mortensen, Mick Power, Scott Power, Garry Ingram, Ian Walker and Melinda Smith re Trustee for Silvana Perovich 202 MHD.10.001.0311 Email from Stocks to Russell Thomson, Mick Power, Craig Mortensen, Andy Marcos, Ken Bird and John Atkinson discussing attempts to negotiate a settlement with the trustees and discussing advice received from Minter Ellison 203 MHD.10.001.0314 Email from Stocks to Russell Thomson, Mick Power, Craig Mortensen, Andy Marcos, Ken Bird and John Atkinson discussing attempts to negotiate a settlement with the trustees and discussing advice received from Minter Ellison 215 MHD.10.001.0131 Email from Tony Stocks to John Atkinson, Ian Walker, Craig Mortensen and Wayne Rex 227 MHD.14.001.0001 File Note John Atkinson of teleconference between representative of the applicants and I Walker of Minter Ellison 228 MHD.14.001.0018 File Note John Atkinson of teleconference between representative of the applicants and I Walker of Minter Ellison 229 MHD.14.001.0019 File Note John Atkinson of teleconference between representative of the applicants and I Walker of Minter Ellison 230 MHD.14.001.0020 File Note John Atkinson of teleconference between representative of the applicants and I Walker of Minter Ellison

31 The schedules in paras 24, 26 and 27 of Mr Walker's affidavit describe 47 documents although Documents 202 and 203 are included in the para 24 schedule and also the para 27 schedule. 32 As to Documents 184, 185 and 215, Mr Walker says at para 8 of his 14 March 2014 affidavit that these documents are emails (from officers of either Mango or BMD or both) to representatives of Mango and BMD (other officers) which were copied to either Mr Walker or Ms Melinda Smith (of Minter Ellison), or both. Mr Walker says he and Ms Smith were copied into these emails so as "to be provided with information by our clients for the pre-dominant purpose of enabling us to provide legal advice to our clients". 33 As to Documents 202 and 203, Mr Walker says that these documents are emails from Mr Stocks to representatives of the applicants (other officers of Mango and BMD or an employee of one of those entities) which "discuss legal advice" given to Mango and BMD by Minter Ellison. Mr Walker says at para 9 of the 14 March 2014 affidavit that these emails "were prepared for the pre-dominant purpose of ascertaining information to enable the applicants to obtain legal advice relating to existing and contemplated litigation". 34 The documents described at [12] which are concerned with the negotiations between Mango and BMD (and their lawyers) and the former trustees through their firm SV Partners (and their lawyers), on the evidence, are Documents 0035, 0036, 0037, 191, 198, 207, 208, 213, 220, 221, 222, 223, 224, 225 and 226. The evidence of Mr Walker, Mr Rodgers and Mr Atkinson is that the negotiations (reflected in oral and written exchanges) were conducted on a "confidential" and "without prejudice" basis. The negotiations with the former trustees began, on the evidence, on 13 August 2010 (see para 37 of Mr Walker's affidavit of 11 January 2013) and were concluded by 6 October 2010 according to Mr Rodgers (see para 35 of Mr Rodgers's affidavit of 5 December 2012). 35 The negotiations between Mango and BMD (and their lawyers) and Mr Slatter (and his lawyers, Clayton Utz), were also conducted, on the evidence, on a confidential and without prejudice basis. The documents relevant to the Slatter negotiations on the evidence of Mr Walker recited at [18] are Documents 0533, 0564, 0565, 1202 and 1755. 36 Document 1620 at [12] is described as a Calderbank letter from Minter Ellison to Hume Lawyers (although the correct description may be Hunt Lawyers) as part of a "without prejudice" negotiation. Document 1623 is a Calderbank letter from Minter Ellison to the Queensland Law Group as part of a "without prejudice" negotiation. Document 217 is a without prejudice letter from Minter Ellison to Mills Oakley Lawyers concerning the assignment of rights under the Share Sale Agreement and the settlement of monies owed to TVM (the assignee of the benefit of a guarantee). 37 Subject to a matter to be mentioned shortly, as to Documents 225, 226 and 1202, I am satisfied that "without prejudice" privilege attaches to the documents at [12]. The privilege has not been waived by Mango, BMD, the former trustees or Mr Slatter or the parties to the exchanges relevant to Documents 1620, 1623 and 217. The qualification is that I propose to look at Documents 225, 226 and 1202 to determine the objection to production concerning those documents. 38 I accept the propositions put to the Court by counsel for Mango and BMD to the effect that "without prejudice" privilege, attaching to communications between parties to a dispute in the course of negotiating a resolution, or attempted resolution of that dispute, protects disclosure of those communications in a proceeding between a party to those communications and a person who was not engaged in those communications, unless the protection from disclosure is waived by all parties to the protected (privileged) communications (Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [13] and [17]; Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 3) [2009] SASC 100; 262 LSJS 265; Heron Wood Pty Ltd v Ampol Petroleum (Vic) Pty Ltd [1999] VSC 83). That has not occurred. 39 Documents 202 and 203 are also said by Mr Walker at para 25 of the 24 January 2014 affidavit to form part of confidential "without prejudice" protected communications concerning either negotiations with the former trustees or with Mr Slatter. As already mentioned, Mr Walker's 14 March 2014 affidavit asserts that the basis for the claim of legal professional privilege (made at para 27 of the earlier affidavit) is that each document (which discusses Minter Ellison's legal advice) was brought into existence for the predominant purpose of gathering information to enable Mango and BMD to obtain legal advice concerning the existing and contemplated litigation. 40 I am willing to look at each of those emails (Documents 202 and 203) to determine the claim of privilege. 41 Apart from Documents 202 and 203, Mango and BMD claim legal professional privilege in relation to the other 11 documents set out at [30] as well as Document 189. 42 The position on the affidavit evidence in relation to these documents is this. 43 Document 1932 is a draft Heads of Agreement prepared by Minter Ellison. Document 2030 is a draft letter prepared by Minter Ellison. Document 176 is a memorandum with handwritten notes of Mr Atkinson summarising Mr Walker's advice. Document 181 is a draft letter prepared by Minter Ellison. Document 184 is an email from Mr Atkinson to officers of the applicants and Mr Walker communicating information to enable legal advice to be obtained. Document 185 is in the same category as Document 184. Document 215 is in a similar category to Documents 184 and 185. Document 227 is a file note made by Mr Atkinson of a teleconference between representatives of Mango and BMD also involving Mr Walker. Document 228 is in the same category as Document 227 and so too are Documents 229 and 230. The content of Document 189 is described at [29]. 44 Having regard to the explanation on the evidence of the circumstances surrounding each of these documents, I am satisfied that a claim for privilege from production on the ground of legal professional privilege is made out on the evidence and it is not necessary for the Court to examine each document. 45 The remaining 10 documents under challenge are those at [20] with the exception of Document 189 (which I have already dealt with). 46 These documents are the subject of a claim of "common interest legal professional privilege" (para 26 of Mr Walker's 24 January 2014 affidavit). As mentioned earlier, Mr Walker's evidence is that Documents 1885, 1886, 1888 and 190, comprising two file notes and two memoranda all made by the lawyers for the former trustees, were provided to Mr Walker by Mr Rodgers on a confidential basis in the course of without prejudice communications to identify issues to be addressed in trying to reach agreement between Mango, BMD and the former trustees. Some of the documents are said to contain the legal opinions of Rodgers Barnes & Green. 47 Document 1891 is an email sent by Rodgers Barnes & Green to Mr Walker. Document 1932 is the draft Heads of Agreement arising out of the negotiations. 48 Mr Walker's evidence is that Documents 2050, 2053, 2054 and 2057 are exchanges between Mr Walker and the Commonwealth Bank of Australia in providing advice concerning a dispute between Mango and Mr Spencer and Ms Perovich, brought to the Bank's attention by Mr Spencer and Ms Perovich, in connection with KHD's resolution to extend (or seek to extend) the existing Commonwealth Bank finance facilities available to KHD for the Mango Hill project. 49 I am satisfied that Documents 1885, 1886, 1888, 1891, 1932 and 190 are documents protected from production as communications passing between Mango, BMD and the former trustees (by their respective lawyers) as confidential without prejudice communications related to steps taken in the negotiation and attempted resolution of the issues between Mango and BMD on the one hand, and the former trustees, on the other. The privilege has not been waived. I am willing to look at Documents 2050, 2053, 2054 and 2057 to determine the objection to production on the ground of privilege. 50 Apart from without prejudice privilege, Mango and BMD say that the privileged communications (comprising exchanges, legal advices and draft documents) between the former trustees and Rodgers Barnes & Green, made available to Mr Walker (Documents 1885, 1886, 1888, 1891 and 190), were made available in confidential circumstances for the purpose of investigating issues to be addressed and processes to be implemented by the former trustees, Mango and BMD, in seeking to reach agreement concerning the claims made by the former trustees against Mango and BMD, and Mango's claim to a transfer of the Perovich shares (as property of the bankrupt estate). 51 Thus, it is said that Mango and BMD received the privileged documents (through Mr Walker) in pursuit of a common purpose with the former trustees "standing alongside" each other in pursuit of the "selfsame interest" (Buttes Gas & Oil Co v Hammer (No 3) [1981] QB 223 at 243), with the result that Mango and BMD received the privileged communications subject to a duty of confidence which protects the privileged documents in the hands of Mr Walker, Mango and BMD, from disclosure (Formica Ltd v Export Credits Guarantee Department [1995] 1 Lloyd's Rep 692 at 699). 52 It may be that the former trustees and Mango and BMD were pursuing a "common interest" in seeking to isolate issues and resolve questions leading to a settlement agreement. Perhaps each of these parties, in truth, had a "common objective" in seeking to resolve competing interests. In any event, I accept that disclosure to Mr Walker of communications protected by legal professional privilege, as between the former trustees and their lawyers, occurred in confidential circumstances as part of without prejudice negotiations in the course of seeking to resolve matters in issue between them. 53 In doing so, the former trustees did not waive legal professional privilege over the documents. 54 The law seeks to encourage the resolution of disputes by negotiation as serving the public interest. 55 Confidential disclosure for that purpose of privileged material does not have the effect of waiving for all purposes, privilege from production of documents for which legal professional privilege properly attaches. The privilege, of course, is the client's privilege not that of the lawyer. Here, the former trustees have not waived their privilege by disclosure of the documents in the circumstances described in the evidence. Nor have they otherwise elected, on the evidence, to waive privilege. Their position as to this particular application is not known. 56 Mr Whitton, the new trustee, says that any claim of privilege enjoyed by the former trustees concerning the communications between them and their lawyers is a privilege which also now belongs to him. It may be that Mr Whitton stands in the shoes of the former trustees for all purposes and any privilege the former trustees enjoyed, only subsisted in them in their capacity as trustees, with the result that the right to assert or waive privilege passed to the new trustee upon appointment. However, the former trustees as the parties in whom the privilege vested at the relevant time (as a right of action to prevent unauthorised disclosure) may continue to have a relevant interest in the privilege and retain a remedial entitlement to protect that right attaching to communications passing between them in the administration of the estate at the relevant time and their lawyers at that time. 57 In the result, I propose to look at Documents 202, 203, 225, 226, 1202, 2050, 2053, 2054 and 2057 for the purpose of determining the objection to production on the ground asserted. 58 By para 3 of the interlocutory application, Mr Spencer and Ms Perovich seek an order that Mango and BMD discover any other documents relevant to the issues in the action which Mango and BMD have presently failed to discover. On 5 January 2012, orders were made that the parties make discovery by list of documents according to categories to be agreed. Exchanges took place between the solicitors for the parties in an attempt to agree the categories. A document described as "Schedule A" to proposed orders was exchanged between the parties. Agreement was reached as to the categories in that document apart from one category. In any event, discovery was conducted in relation to a category described as: All dealings including communications, documents, recordings and/or evidencing communications between the applicants, or their solicitors, and the former trustees, or their solicitors, regarding the bankruptcies of Spencer and Perovich or the administration of the estates of Spencer and Perovich. 59 Mango and BMD say that they have made discovery as required by the Federal Court Rules 2011 and the orders of the Court in relation to discovery by categories. Two lists of documents have been prepared and sworn to by Ms Palmer verifying each list of documents. As mentioned earlier, Ms Palmer asserts grounds of privilege in relation to particular documents/communications. Those grounds have been elaborated upon in the affidavits referred to in these reasons filed on behalf of Mango and BMD. That evidence better describes both the documents for which privilege is asserted and the grounds of privilege relied upon (as compared with the relatively brief affidavits of Ms Palmer verifying both lists). There is nothing in the material filed on behalf of the second and third respondents which suggests any basis for finding that discovery on the part of Mango and BMD is inadequate. There is no evidence upon which the Court ought to go behind the affidavits of Ms Palmer so as to warrant ordering further discovery as sought by the second and third respondents. This question is an entirely different one from the specific challenge to the claims of privilege which have been dealt with extensively in these reasons. 60 I accept that the description of the documents for which privilege was sought and the grounds of privilege ought to have been more fully described and set out in the affidavits of Ms Palmer. For present purposes, I propose to reserve the costs of the present application for later determination, that is, the costs related to paras 1 and 3 of the interlocutory application. The costs related to para 5 of the interlocutory application are also reserved for later determination. The parties are required to advise the Associate to Greenwood J of the dates counsel will be available for the determination of the security for costs part of the interlocutory application. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.