Plaintiff v Defendant

(a) the proceeding be permanently stayed as an abuse of process; or alternatively

(b) pursuant to s 33(N)(1) of the Supreme Court Act 1986 (Vic), the proceeding no longer continue as a group proceeding under Part 4A of the Act.[1]

2 Prior to the commencement of oral submissions in relation to the applications, the Defendant, through its counsel, called for the production of documents pursuant to a Notice to produce served on the Plaintiff and dated 1 May 2015 ("Notice to produce").

3 The Plaintiff produced a bundle of documents responsive to paragraphs 2(a), 2(c), 2(e) and 2(f) of the Notice to produce and indicated that there were no documents to produce in relation to paragraphs 1, 2(b), 2(d) and 2(g).

4 A dispute has arisen over the production of documents pursuant to paragraphs 3(b) and (d) of the Notice to produce. It is necessary to rule on this dispute before hearing the two applications.

5 Paragraph 3 of the Notice to produce calls for the production of:

3. All Documents evidencing or referring to:

(a) the role of Mr Mark Elliott or Melbourne City Investments Pty Ltd in giving instructions to solicitors and/or counsel for the Plaintiff in proceeding No. S CI 2014 04712 against WorleyParsons Limited;

(b) Mr Mark Elliott or Melbourne City Investments Pty Ltd being provided with information with respect to the conduct of, or matters arising in, proceeding No. S CI 2014 04712 against WorleyParsons Limited; and

(c) the role of Mr Mark Elliott or Melbourne City Investments Pty Ltd in making decisions with respect to the conduct of proceeding No. S CI 2014 04712 against WorleyParsons Limited;

(d) any arrangement, understandings, agreements or requirements with respect to matters set out in subparagraphs 3(a) to (c) above.

6 The Plaintiff objects to the production of documents pursuant to paragraph 3(b) on two principal bases: (i) the absence of a legitimate forensic purpose underpinning the category of documents sought; and (ii) privilege. The plaintiff also objects to paragraph 3(d), insofar as it relates to 3(b), on the same grounds.

7 The Plaintiff asserts that she has no documents answering paragraphs 3(a) and 3(c).

8 I will deal with the legitimate forensic purpose issue first.

9 The Plaintiff submits that, it being, as a matter of law, impossible to establish an abuse of process merely by reason of a litigation funder or indemnifier being provided with information, paragraph 3(b) (and 3(d) to that extent) cannot have a legitimate forensic purpose.

10 The Plaintiff relies on the High Court's decision in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd,[2] and the decision of the NSW Court of Appeal from which that appeal went (Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203) as recognising the legitimacy of litigation funding, and as authority for the proposition that it could not be an abuse of process for Mr Elliott to communicate with Mr Peters in relation to this proceeding.

11 It became clear that the Defendant does not assert that the mere provision of information to Mr Elliott is in any sense improper or an abuse of process. Rather, as counsel for the Defendant submits, the Defendant seeks to look to the content of the information being provided, and what is done with the information, to inform questions regarding the level of control being exercised over the proceeding by Mr Elliott.

12 The Defendant submits that the Plaintiff has already called on the Court to rule on the very categories of documents sought by paragraphs 3(b)-(d) of the Notice to produce.

13 On 15 April 2015, I ruled on the validity of 18 subpoenas that the Defendant had caused to be issued.[3] Amongst those subpoenas were two that had been issued to Mr Elliott and Melbourne City Investments Pty Ltd ("MCI") dated 18 February 2015 (which were described as the First February subpoenas). Both subpoenas sought:

1. All Documents evidencing or referring to any arrangements, understandings, agreements or requirements:

(a) in relation to the terms on which Stewart Peters is, would or might be retained to act on behalf of the plaintiff in proceeding No. S CI 2014 4712 against WorleyParsons Limited;

(b) in relation to the role of Mark Elliott or Melbourne City Investments Pty Ltd in giving instructions to solicitors and/or counsel for the plaintiff in proceeding No. S CI 2014 4712 against WorleyParsons Limited;

(c) by which Mark Elliott or Melbourne City Investments Pty Ltd might be provided with information with respect to the conduct of, or matters arising in, proceeding No. S CI 2014 4712 against WorleyParsons Limited; and

(d) in relation to the role of Mark Elliott or Melbourne City Investments Pty Ltd in making decisions with respect to the conduct of proceeding No. S CI 2014 4712 against WorleyParsons Limited.

14 Without repeating my reasoning, I found that the Defendant had demonstrated that there was a legitimate forensic purpose for the issue of the First February subpoenas.[4]

15 The terms of the subpoenas as set out above are substantially similar to those in paragraph 3 of the Notice to produce (save for paragraph 1(a) above). Counsel for the Plaintiff sought to distinguish the Notice to produce from the First February subpoenas on the basis that the Notice to produce seeks '[a]ll documents evidencing or referring to... Mr Mark Elliott or Melbourne City Investments Pty Ltd being provided with information' (among other things), whereas the subpoenas called for '[a]ll documents evidencing or referring to any arrangements, understandings, agreements or requirements...by which Mark Elliott or Melbourne City Investments Pty Ltd might be provided with information...'. The Plaintiff submits that the Notice to produce is broader in that it calls for the provision of actual communications in which Mr Elliott has been provided with information about the proceeding.

16 In my view the differences between the First February subpoenas and the Notice to produce do not result in any distinction in the analysis with respect to the legitimacy of the forensic purpose. In seeking production of documents under paragraph 3(b) (and 3(d)) of the Notice to produce, the Defendant seeks to ascertain, from the content of those documents, the level of control exercised by Mr Elliott over the conduct of the proceeding. As noted in paragraph 55 and 56 of my 15 April 2015 ruling, this is a legitimate forensic purpose which is directly relevant to the impending abuse of process application and s 33N application. The plaintiff's objection to production on this basis is without merit.

18 The Plaintiff submits that the documents which would be produced in response to paragraph 3(b) consist largely of emails which have passed from time to time between Ms Walsh's current solicitor, Mr Peters, and Mr Elliott. Senior counsel for the Plaintiff informed the Court that, in those emails, Mr Elliott has been provided with information in respect of the conduct of the proceeding, and many of those emails have been copied to counsel in the course of running the proceeding.

19 The Plaintiff submits that the documents responsive to paragraph 3(b)[5] are privileged on the basis of common interest privilege between Mrs Walsh and MCI, as identified by the Federal Court of Australia in Gurtler v Finance Now Pty Limited[6] and the NSW Supreme Court in Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Limited.[7]

20 In Gurtler v Finance Now, the plaintiff (Mr Gurtler) was being funded by Hillcrest Litigation Services Ltd. Hillcrest had retained its own solicitors, Williams & Hughes. The retainer between Hillcrest and William & Hughes was characterised by Finn J as a retainer for 'limited legal services ("[a]dvising and negotiating on behalf of Chris Gurtler in communications with the [defendants'] solicitors")'.[8] There was also a 'common retainer' agreement between Williams & Hughes, Hillcrest and Mr Gurtler and a litigation funding agreement between Hillcrest and Mr Gurtler. The litigation funding agreement obliged Hillcrest to pay the fees and disbursements of its own solicitors (Williams & Hughes) and also created in Hillcrest an entitlement to: receive monthly reports on the proceeding and any negotiations carried out in relation to the proceeding; receive invoices rendered monthly; and to be advised immediately of any proposal for settlement.[9] The funding agreement also provided that the plaintiff, Mr Gurtler, not Hillcrest, would instruct Williams & Hughes during the proceeding, and would instruct Williams & Hughes to provide the above documents to Hillcrest.[10]

21 By way of a notice to produce, Finance Now (the defendant) sought, among other things, the production of documents relating to 'communications between Mr Gurtler and Mr Van Noort [of Hillcrest] relating to the possible joinder of Mr Turnbull', the 'provision of instructions to Williams & Hughes' regarding a decision that Mr Van Noort would communicate directly with the solicitors for the defendant and 'instructions provided by or on behalf of Mr Gurtler to Williams & Hughes to join Mr Turnbull'.[11]

22 A claim of privilege was made by the plaintiff over various responsive documents. In response, Finance Now submitted that there was a prima facie basis for alleging that the substantial purpose of advice provided by Williams & Hughes was for Hillcrest's own purposes in conducting the litigation for its own benefit and hence was not subject to any privilege claimed by the plaintiff.

23 In rejecting this argument, Finn J stated that:[12]

46 ... The funding agreement gave Hillcrest and Mr Gurtler common individual interests in the successful prosecution of the litigation... There is nothing at all unusual in contractual arrangements giving rise to both common and several interests in the contracting parties.

...

48 Before dealing directly with the first respondent's contention there is one matter to which I need refer concerning the characterisation of Gurtler-Hillcrest relationship for the purposes of legal professional privilege. It relates to common interest privilege. Having regard to their relationship inter se in light of the funding agreement and the common retainer, and of their common interest in the successful prosecution of the litigation and in advice given in relation thereto, I am satisfied that a possibly distinctive form of common interest privilege exists between them in relation to lawyer-client communications in the Gurtler proceedings: on common interest privilege see generally Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 609 ff; Patrick v Capital Finance Corporation (Australasia) Pty Ltd [2004] FCA 1249; (2004) 211 ALR 272 at [17]- [19]; Cross on Evidence, 25-265 (Aust ed). I do not, for present purposes, consider it appropriate to characterise their individual interests as selfish and potentially adverse to each other: cf Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 409-410. Rather, while each stands to gain differentially from the litigation, their interests are nonetheless common in that their individual interest came together in the successful prosecution of it.

...

53 It is equally clear in my view, from the description of the listed documents for which privilege has been claimed, that Williams and Hughes, while occasionally communicating with Van Noort alone, recognised that Mr Gurtler was their client in the proceeding and included him in their communications. In the context of a litigation funding arrangement in which the funder can be expected to take a close interest in the conduct of the litigation, and having regard to the convenience to which Mr Gurtler referred, there is nothing unusual in the course of communications revealed in the list of documents for which privilege is claimed, the more so when Mr Gurtler has acquiesced in that course.

24 The Plaintiff also relies on Rickard materially to the same effect. Plainly all cases will turn on their facts. One of the issues considered in Rickard was whether the contents of documents, copies of which were provided to the litigation funder, were confidential and were prepared by the lawyers for the dominant purpose of providing legal advice to the plaintiff. It was submitted in that case that the documents were privileged and the copies in the hands of the funder had retained their privileged status.

25 It is enough to say that Bergin J held that the privilege subsisting in the copies of documents held by the litigation funder had not been lost by disclosure of their contents as she was satisfied on the facts that the litigation funder in this case had a "common interest" relating to the proceeding.[13]

26 In any case, her Honour held that the documents provided to the litigation funder were privileged on the basis that they were confidential communications made for the dominant purpose of the plaintiff being provided with legal services.[14]

27 The Plaintiff submits that the principles in Gurtler v Finance Now and Rickard are directly applicable in the circumstances of the present case, and should paragraph 3(b) be allowed to stand, a very substantial part of the Plaintiff's solicitor's file would be required to be produced, resulting in a 'wholesale abrogation' of Mrs Walsh's legal professional privilege.

28 The Defendant again submits that the issue of privilege in relation to this class of documents has been ruled on: Walsh v WorleyParsons Limited (No. 2) [2015] VSC 310. In this ruling, I found that 'document 4', an email dated 27 November 2015 sent by Mr Elliott to the Plaintiff (following the termination of their lawyer/client relationship) was not privileged as Ms Walsh was not a client within the meaning of the Act at the time of the communication. Otherwise, the Plaintiff's claim to litigation privilege was upheld.

29 The Defendant seeks to distinguish the two cases of Gurtler v Finance Now and Rickard on the basis that, in those cases, the Court had before it some evidence which could justify the conclusion that the relevant communications in question were covered by litigation privilege. In this case, however, the Defendant submits correctly that there is no evidence before the Court. The Plaintiff has not filed any affidavit in support of the objection to production, but relies on assertions made from the Bar table that a large part of the solicitor's file would need to be produced should paragraph 3(b) be held valid.

30 I accept this submission. Without such evidence, I cannot rule on whether particular documents or particular categories of documents should be produced. At this point I will indicate that I propose to order production of documents pursuant to 3(b) (and 3(d)) of the Notice to produce save to the extent that the documents are protected by privilege.

31 To facilitate agitation of that issue, the Plaintiff will be ordered to provide an enumerated list of the documents falling under paragraph 3(b) (and 3(d)) which the Plaintiff claims are protected by privilege which will identify the basis on which privilege is claimed, and to file and serve a supporting affidavit, so that any claim to privilege (not already decided in the ruling relating to the subpoenaed documents) can be tested, if so desired by the Plaintiff.

32 I have considered the exchange of correspondence passing between the solicitors for the respective parties between 1 May 2015 and 4 September 2015. The parties have agreed that I can read the correspondence and decide the appropriate outcome with respect to costs without hearing further from the parties. It is clear that the Plaintiff's objection to production was raised at the last moment despite earlier (repeated) requests from the solicitors for the Defendant. In my view, the late notice of the objection cannot be justified. The objection to production of documents should have been raised much earlier. As a consequence, it was necessary to adjourn the hearing of the Defendant's summonses dated 18 February 2015. Accordingly, I will order that the Plaintiff pay the Defendant's costs thrown away by reason of the adjournment of the hearing of the summonses dated 18 February 2015 on an indemnity basis. Otherwise I will reserve the costs of and incidental to the Plaintiff's objection to production.

[1] The background to this proceeding is set out in Walsh v WorleyParsons Limited [2015] VSC 135 at paragraphs [17] - [46].

[2] [2006] HCA 41; (2006) 229 CLR 386.

[3] Walsh v WorleyParsons Limited [2015] VSC 135.

[5] And to paragraph 3(d) to the extent that it applies to 3(b).

[6] [2007] FCA 477 ('Gurtler v Finance Now').

[7] [2006] NSWSC 234 ('Rickard').

[8] Gurtler v Finance Now [2007] FCA 477 [22].

[13] Rickard [2006] NSWSC 234 [57]; Evidence Act 1995 (NSW) s 122(5).

[14] Ibid [58], [59]; Evidence Act 1995 (NSW) s 119.