Plaintiff v Defendants

Plaintiff v Defendants - [2016] VSC 386 - VSC 2015 case summary — Zoe

[83]

22 There are of course many claims for legal professional privilege where a mere description of a document is sufficient to establish the claim for privilege. A description along the lines of 'Brief to Counsel to Advise' is one that immediately springs to mind. Other descriptions might call for further explanation, such as correspondence with anodyne titles, circulation of draft transactional documents to not only the client, but also to other professional advisers of the client, or internal communications within a client. Balanced against this is the practical difficulties in amassing evidence where there are claims over large numbers of documents, particularly given the distaste expressed in the authorities regarding the expenditure of excessive legal costs in interlocutory skirmishes.[6] In my view, in disputes such as the current case, there needs to be sufficient detail in the description of the documents, along with a sufficient explanation of the roles of the parties to the transactions and the context in which the communications took place in order to establish, in the face of a legitimate and cogent challenge by the other party, that there is a prima facie claim for legal professional privilege. As to whether it is appropriate to inspect the documents, I note that legal professional privilege is a substantive right not to be lightly lost or discarded,[7] and the very nature of that right is that evidence led in support of claims must necessarily be somewhat opaque in order to avoid destroying the confidentiality of the communication over which it is claimed. On the other hand, a court must be alert to preventing abuses of this right by parties attempting to protect disclosure of otherwise nonprivileged communications by devices such as routing them through lawyers, or having their lawyers retain third party experts to advise on purely commercial or technical matters rather than retaining them directly. Inspection of the documents is often a means by which such abuses can be detected. The practical value of inspection is no doubt why a facilitative provision such as s 133 is included in the Act. Finally, I accept the submissions of counsel for the ANZ parties that I should not approach the question of the exercise of my discretion under s 133 of the Act with any particular bias.

[116]

In a transaction of this kind, the clients would expect aspects of what was done and not done that might possibly be of significance to be considered by, and discussed between and among, the experienced lawyers and the experienced investment bankers. In reaching these conclusions, I have drawn on the evidence referred to above, and an application of what I hope is common sense in recognising the likely human reality of what was in fact done as set out in Mr Reid's affidavit. Given the nature of the subject matter, the experience of the advisers involved and the lack of adversion to any formal terms as to how the parties (clients, lawyers and investment bankers) would inter-react and communicate, I have no difficulty in inferring that there was a clear obligation of confidence owed to the respondents upon SSB and AAR, that AAR was authorised (and indeed expected) to communicate material to SSB (including privileged material) if AAR thought that SSB should know of it or asked for it, that SSB was authorised (and indeed expected) by the respondents to receive and pass on any information or document concerning the transaction which either agent thought appropriate so to do and that each of AAR and SSB was the agent of the respondents to request, give and receive views and information to and from each other for the purposes of best effectuating the respondents' position in the transaction.

The close cooperation of the parties is deposed to by Mr Reid; the lack of specific terms of retainer of AAR I infer from the evidence; the overlapping and complementary roles of SSB and AAR I infer from the nature of the transaction and the nature of their relevant expertise (SSB's expertise being reflected in the terms of their retainer). It would, in my view, be unrealistic to think that the instructions to each, implicit in the consent to cooperative communication which apparently occurred, did not contain an authorisation to request, give and receive information and views to and from the other in the way I have described.

[170]

5.18 In the course of the negotiations referred to in paragraph 5.14 above:

(a) the Bank repeated its demands for the Plaintiff and Pankaj to execute guarantees and mortgages as referred to in paragraphs 5.7 and 5.8 above;

(b) the Bank asserted:

(i) that the European Guarantees had been forged and were not valid documents;

(ii) that Pankaj had admitted (during a meeting with representatives of the Bank held at the Bank's offices at 100 Queen Street Melbourne on 9 December 2009) that he had forged the European Guarantees or caused them to be forged;

(iii) that the alleged forgeries constituted 'Events of Default' within the meaning of the ANZ Facilities, including an 'Event of Default' by YPF under the SBSA;

(iv) that, as a result of the alleged 'Events of Default', the Bank was entitled to demand immediate repayment of a total amount of US$928 million and to exercise certain rights and powers (including, without limitation, the right or power to appoint controllers or receivers to the assets and undertaking of YPF and/or YPH's shares in YPF);

(v) that if the guarantees and mortgages referred to in (a) above were not executed, the Bank would issue notices of default under the ANZ Facilities and proceed to appoint controllers or receivers to the assets and undertaking of YPF and/or YPH's shares in YPF and/or sell the assets and undertaking of YPF;

(vi) that Pankaj could go to prison as a result of his alleged role in the alleged forgeries if the alleged forgeries were reported to the relevant authorities or became public knowledge as a result of steps taken by the Bank;

(vii) that if the Bank proceeded to issue notices of default under the ANZ Facilities, it would report the alleged forgeries to the relevant authorities or the alleged forgeries would become known to such authorities;

(viii) that it was wanting to 'help' Pankaj and the Plaintiff, and the Bank also didn't want the alleged forgeries to become public, but they had to execute the documents required by the Bank;

(ix) the Bank had reason to believe the Plaintiff knew everything about the alleged forgeries and that even she could go to prison;

(x) that so far as the Bank was concerned the defaults resulting from the alleged forgeries would become irrelevant once it was repaid the money owing to it under the ANZ Facilities from the proceeds of the sale to occur under the Sale Process Agreement which it was prepared to enter into if the guarantees and mortgages referred to in paragraphs 5.7(sa) and 5.8 were provided;

(c) Mr Pestell repeated to the Plaintiff the substance of the Bank's assertions as pleaded and particularised in sub-paragraphs (b)(v) to (vii) and (x) above;

(d) the Plaintiff believed that, if the alleged forgeries were reported or became known to the relevant authorities, Pankaj could go to prison as a result of his alleged role in the alleged forgeries;

(e) the Bank was aware that the Plaintiff held the belief referred to in paragraph (d) above;

(f) the Plaintiff believed that if the Bank issued notices of default, the Bank would report the alleged forgeries to the authorities or otherwise take steps which would lead to the alleged forgeries becoming known to the relevant authorities;

(g) the Bank was aware that the Plaintiff had the belief referred to in (f) and deliberately said nothing to change her belief;

(h) the Plaintiff believed that, if she and Pankaj did not sign the guarantees and share mortgages required by the Bank, then the Bank would appoint controllers or receivers to the assets and undertaking of YPF and/or YPH's shares in YPF;

(i) the Bank was aware that the Plaintiff had the belief referred to in (h) and deliberately said nothing to change her belief.

5.19 If it be the fact that during the December 2009 negotiations the Bank was not prepared to enter into any agreement concerning the reporting of the alleged forgeries to the authorities or the taking of steps likely to result in the forgeries becoming public knowledge (such an agreement being denied by the Bank in its Defence dated 20 October 2011), then the Plaintiff alleges that:

(a) the Bank failed to make that position known to the Plaintiff; and

(b) the Bank deliberately failed to do so.

5.20 At the time that the Bank made the assertions set out in paragraphs 5.18(b((i), (ii), (iii) and (iv), the Bank, by at least Mr Page, Mr Santamaria and Mr Gaudion, believed (but did not inform the Plaintiff or her solicitors) that:

(a) it was not clear, and the Bank was not sure, that the European Guarantees had been forged;

(b) if they had been forged, it was not clear, and the Bank was not sure, that Pankaj was involved;

(c) it did not know whether Pankaj admitted to having forged any documents, as he had spoken in ambiguities, been hazy and had contradicted himself and, in any event, it was not clear whether there had been any forgery or whether he had been involved in any forgery;

(d) as it was not possible to reach complete conclusions on key facts, it was not clear, and the Bank was not sure, whether any Event of Default within the meaning of the ANZ Facilities existed by reason of a possible forgery; and

(e) accordingly it was not clear, and the Bank was not sure, that it was entitled to demand immediate repayment of a total of US$928 million or any amount or exercise the rights and powers it asserted (including to appoint receivers).

[172]

5.18 To paragraph 5.18:

(a) They admit that during the negotiations and communications referred to in paragraphs 5.7 and 5.14 above ANZ requested that each of the plaintiff and Pankaj Oswal execute guarantees and share mortgages. Otherwise they do not admit the allegations in sub-paragraph 5.18(a) and say further that they refer to and repeat paragraphs 5.7 to 5.14 above.

(b) They admit that at a meeting on 20 December 2009 at which the plaintiff's lawyers and Pankaj Oswal's lawyers were present, a statement was made on behalf of ANZ.

(c) They otherwise deny the allegations in sub-paragraph 5.18(b) and (ba) and say further that the statement made on behalf of ANZ was made by reading aloud a written statement, a copy of which was provided to the plaintiff's lawyers and Pankaj Oswal's lawyers on about 20 December 2009 ('the 20 December Statement'), the full terms and effect of which will be referred to at trial, including without limitation ANZ's statement that it reserved all of its rights.

(d) They do not admit the allegations in sub-paragraph 5.18(c) to (i) and say further that sub-paragraphs 5.18(d), (f) and (g) are embarrassing.

5.19 To paragraph 5.19:

(a) They admit that ANZ was not prepared to enter into any agreement of the kind alleged.

(b) Save that they deny that ANZ acted deliberately in the manner alleged in paragraph 5.19, they otherwise do not admit the allegations therein, and say further and in any event that Pankaj Oswal and the plaintiff knew that ANZ would not enter into an agreement of the kind alleged.

5.20 Save that they refer to and repeat paragraph 5.18 above, they otherwise deny the allegations in paragraph 5.20 and say further that:

(a) Paragraph 5.20 is embarrassing.

(b) That at the time alleged by the plaintiff:

(i) Pankaj Oswal had informed ANZ at the meeting on 9 December 2009 referred to in paragraph 5.1 above, that he had forged or procured the forgery of the European Guarantees.

(ii) By letter dated 15 December 2009, BGL BNP Paribas (BGL) informed ANZ that in respect of certain named deeds of indemnity referred to in that letter expressed to be as between Banque Générale du Luxembourg and ANZ (dated 22 July 2005), and Fortis Banque Luxembourg and ANZ (dated 16 December 2005 and 5 September 2006), the signatures on those documents were formally contested by the named persons, and BGL considered that the deeds of indemnity had not been issued by them.

Particulars

The letter was sent by Olivier Marlot and Marc Olinger of BGL to Christopher Page of ANZ. A copy of the letter is in the possession of the first to fourth defendants' solicitors and may be inspected by appointment.

(iii) By letter dated 23 December 2009, Intertrust International Management Limited (formerly BGL Reads International Management Limited) informed AZ that in respect of certain named deeds of undertaking referred to in that letter, its representatives did not sign the said deeds and the seal on the documents was 'counterfeit'.

Particulars

The letter was sent by M T Cahill and R Le Hegarat of Intertrust International Management Limited to Christopher Page of ANZ. A copy of the letter is in the possession of the first to fourth defendants' solicitors and may be inspected by appointment.

(iv) Pankaj Oswal had not provided ANZ with, and therefore ANZ could not know, all of the details regarding the circumstances concerning the forgery of the European Guarantees;

(v) Insofar as it is alleged that at the times referred to ANZ did not believe that the European Guarantees were forged, that Pankaj Oswal was involved in the forgery, that Events of Default had occurred under the ANZ Facilities or that ANZ was entitled to demand immediate repayment under the facilities and then exercise its rights to enforce existing securities:

(A) They deny the allegations.

(B) They say further that Events of Default had occurred under the ANZ Facilities such that ANZ could exercise its rights as necessary including by demanding immediate repayment under the facilities and/or appointing receivers and/or agents for the mortgagee in possession to the assets and undertaking of YPG, the shares in YPF held by YPH, and 15% of the shares in YPH.

Particulars

The Events of Default included: defaults arising by reason of the circumstances referred to in this paragraph above, being defaults under clauses 21.1(d)(iii), 21.1(b) and 21.1(f)(i)(B) of each of the Burrup Trust Facilities; clauses 23.1(d)(iii), 23.1(b) and 23.1(f)(i)(B) of the Maruti Facility; clause 7.1 of the Pankaj Oswal share mortgage dated 2 May 2007; clause 5.1 of the YPH Share Mortgage; clause 11.1 of the SBSA; clause 5.1 of the YPF fixed and floating charge dated 18 December 2002; and any and all other Events of Default whether or not known to ANZ or ANZ Fiduciary Services Pty Ltd which had occurred on or before 20 December 2009, and in respect of which all rights and powers were reserved by the 20 December Statement.

At a glance

Court

Decision date

Before

Source

Judgment (335 paragraphs)

The Oswal matters � pre trial discovery and privilege applications [2016] VSC 386 (3 March 2016)

Parties

Legislation Cited (1)

Cases Cited (10)