Optiver Australia Pty Ltd v Tibra Trading Pty Ltd

Federal Court of Australia|2012-12-07|Before: Mr P, Rares J

The matter be fixed for hearing before Rares J commencing on 10 March 2014. Westpac Subpoena
The Respondents produce to the Applicants the documents produced pursuant to a subpoena issued on behalf of the Applicants on 25 July 2012 (the Westpac Subpoena) to the extent that such documents: (a) relate to the raising, or investment by any of the Respondent Entities, of capital in the Tibra Companies, including any: (i) provision of any loan facility, credit facility or overdraft; (ii) application to create, open or vary any loan facility, credit facility or overdraft; (iii) other application for credit or finance; or (iv) drawdown or any instruction request, direction or application for a drawdown on any loan facility, credit facility or overdraft, made between 4 November 2005 and 30 September 2006 by or on behalf of any of the Respondent Entities for the purpose of investing in the Tibra Companies; or (b) record or evidence: (i) any password, PIN, security phrase or passphrase used in relation to banking services by Mr Dinesh Bhandari (also known as Danny Bhandari or Dinny Bhandari) at any time between 1 January 2005 and 31 December 2009; or (ii) the dates of any change or changes made to any such password, PIN, security phrase or passphrase made between 1 January 2005 and 31 December 2009.
All documents produced by Westpac under the Westpac subpoena be retained by the Registry until further order.
Access by the Applicants to the documents produced pursuant to the Westpac Subpoena be otherwise refused until further order. Wilson and Garnett Evidence
The respondents have leave to file the affidavit and report of Mark Garnett dated 26 October 2012 (Garnett report).
The respondents have leave to file the affidavit of Matthew Wilson affirmed on 16 May 2012 (Wilson report).

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 681 of 2009

JUDGE: RARES J DATE: 7 DECEMBER 2012 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The Tibra parties have challenged Optiver's claims for legal professional privilege based on some more expansive affidavits by three experts engaged by Optiver parties at an early stage of the litigation, namely, John Mylordis, Associate Professor Fethi Rabhi and his senior research assistant, Kader Lattab. Each of the parties argued that the reasons that I gave on the first round of this dispute Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (No 5) [2012] FCA 1226 were determinative of an outcome in their respective favours.

The basis of the claim for privilege. 2 The parties were content to argue the challenge on the basis of Mr Mylordis' evidence. Mr Mylordis said that he had been retained by the Optiver's solicitors in late April 2009 and that he had not produced any material relating to the subject matter of the litigation other than pursuant to that retainer. Prior to the dispute about privilege over his documents, he had not made any affidavits or experts reports in the proceeding. He said that between June 2009 and July 2010 he had assisted Optiver's solicitors and barristers "in understanding technical issues associated with the Optiver and Tibra source code". As part of that assistance, Mr Mylordis prepared a number of summaries of the results of his work which he had undertaken and sent those to one of Optiver's solicitors. The Tibra parties do not challenge the privilege claimed in respect of those summaries. 3 Mr Mylordis, in his affidavit, identified the documents he had prepared in order to determine the content of each of those summaries and said that at the time he created each of the documents that were caught by his subpoena, he knew that the ultimate objective was for him to communicate to Optiver's solicitors in summary form the results of the work he had performed. He said that at the time he brought the other documents, not being the summaries to which I have referred, into existence, his only purpose and intention in creating them was: "to create documents which would assist me to determine what I would communicate to [Optiver's solicitors] in relation to the results of my work. That is, I intended to create intermediate working documents which would assist me to finalise the form and content of the communication with [Optiver's solicitors] which summarised my work. I did not find it practicable or feasible to independently prepare in real time in the course of undertaking my work the final form of the communication [to Optiver's solicitors]." 4 He said that the work he was undertaking was highly technical and complex and it was not possible for him immediately to finalise a form of communication to the solicitors while he was undertaking the work, but that he had not generated any documents for any reason other than to assist him in preparing the summaries that he ultimately communicated.

The Tibra parties' arguments 5 The Tibra parties argued that the reasoning of the Court of Appeal of the Supreme Court of Queensland in Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 2) [1999] 1 Qd R 141 and of Lindgren J in Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at [21] required a conclusion that none of the intermediate documents for which privilege was claimed could be protected. That was because, the Tibra parties contended, in Interchase [1999] 1 Qd R 141 the Court of Appeal held that documents produced by an expert valuer in the course of preparing valuation evidence, such as copies of schedules, plans and other documents on which the valuer had made written calculations and notes, and copies of documents he had collated for use in preparation of his valuation, were akin to the class of documents to which Mr Mylordis referred as the intermediate documents from which he would take his summaries. The Tibra parties also argued that the way in which Mr Mylordis had expressed the formation of the purpose for which he brought the documents into existence amounted to a mere assertion of a category of legal professional privilege. They contended that this was insufficient to articulate the claim, relying on what Black CJ and Emmett J had said in Kennedy v Wallace (2004) 142 FCR 185 at 188-189 [7]-[15] and also observations by Tamberlin, Stone and Siopis JJ in Barnes v Commissioner of Taxation (2007) 242 ALR 601 at 605 [18] where their Honours referred to what was said in Kennedy 142 FCR 185 as establishing the proposition that verbal formulae and bare conclusory assertions of the purpose of creation of the documents are insufficient to discharge this onus.

Consideration 6 Each of Kennedy 142 FCR 185 and Barnes 242 ALR 601 involved a claim by a party to the proceedings as to his purpose in bringing a document into existence. The question here is slightly different, where the experts have not been challenged in their assertions of their purposes or of the purpose for which they had been engaged. Each of the three experts had been engaged to provide assistance to the lawyers for Optiver in understanding technical issues associated with the source codes of each of the two parties' computer programs that lie at the heart of the proceedings. 7 The manner in which an expert will express his or her opinion, to some degree, depends upon the expert formulating that opinion in his or her own words. Anyone producing material that expresses an opinion for the purposes of assisting lawyers in the course of giving advice or in litigation may not be so gifted as to produce straight off a first draft that is right or adequate. Often drafts require refinement and work and sometimes the preparation of lengthier documents from which principles or opinions can be distilled that can form the basis of the advice. I discussed with counsel during the course of argument an example of a doctor who performs a blood test and then gives an opinion on its results to the party who engaged the doctor. The party who engaged the doctor could not claim that the test results were privileged because the results recorded an objective fact. However, the doctor's expression of view as to what the test results showed would be more likely to fall within the category of something for which a claim for privilege could be made, unless perhaps, no contentious question of interpretation is involved in expressing the test results. 8 Here, the experts deposed to having produced a large number of intermediate documents from which their summaries were taken. In Bristol-Myers Squibb Co v Apotex Pty Ltd (No. 3) [2012] FCA 1310, Yates J determined that, on the evidence there, notes of observations created by an expert asked to observe the other side's expert performing an experiment were brought into existence for the purpose of providing information, advice and opinions responsive to the lawyer's request to the observing expert to report his opinion on the conduct of the experiment. He held that the notes the expert produced did not fall into the category of working notes or field notes of the kind, such as "documents generated unilaterally", to which Lindgren J referred to in Southcorp 46 ACSR at 442 [21(3)] or, I take it, the Court of Appeal in Interchase (No 2) [1999] 1 Qd R 141 which I summarised in Optiver (No 5) [2012] FCA 1226 at [8] and [9]. 9 While the expression of the purpose of relevant documents could have been more fulsome in Mr Mylordis' affidavit than it was, I am satisfied by his evidence that his purpose was as he described it. In this matter there are hundreds of documents falling within the category of the intermediate working papers. Parties should not be required to go to enormous expense of describing every single document that might possibly be the subject of such a claim where one is dealing with documents in a category such as the documents here: see s 37M of the Federal Court of Australia Act 1976 (Cth).

Conclusion 10 In my opinion, Mr Mylordis' purpose for bringing the documents into existence was that they be used in his expressing his opinion in a confidential communication for the purposes of providing the assistance he was engaged by Optiver's lawyers to give them in understanding technical issues associated with the two parties' source codes. For these reasons, I am satisfied that Optiver is entitled to claim legal professional privilege over those documents and those in the same category created by Professor Rabhi and Mr Lattab, and they should not be required to be produced. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate: Dated: 10 January 2013 SCHEDULE NSD 681 of 2009 TIBRA TRADING PTY LTD First Respondent TIBRA CAPITAL PTY LTD ACN 120 313 160 Second Respondent TIBRA INVESTMENT MANAGEMENT LTD ACN 124 402 160 Third Respondent TIBRA GLOBAL SERVICES PTY LTD ACN 120 338 445 Fourth Respondent DINESH BHANDARI Fifth Respondent GLENN WILLIAMSON Sixth Respondent TIMOTHY BERRY Seventh Respondent ANDREW KING Eighth Respondent KINSEY COTTON Ninth Respondent MARTIN NICKOLAS Tenth Respondent NICHOLAS BEGG Eleventh Respondent

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