Plaintiff v First defendant

Supreme Court of Victoria|2017-06-22|Before: ALMOND J

PRIVILEGE - Whether client legal privilege attaches to emails sent between solicitors, client and third party - Evidence Act 2008 (Vic) ss 117, 118, 119 - Documents privileged - Circumstances indicating confidentiality - R v Sharp [2003] NSWSC 1117; (2003) 143 A Crim R 344, applied.

PRIVILEGE - Loss of privilege - Evidence Act 2008 (Vic) ss 122, 126 - Where documents may indicate party's state of mind - Where state of mind is in issue - Relationship between relevance and privilege - Relevance does not lead to loss of privilege - Commissioner of Taxation v Rio Ltd [2006] FCAFC 86; (2006) 151 FCR 341; Liquorland Australia Pty Ltd v Anghie [2003] VSC 73; (2003) 7 VR 27, applied - Privilege not waived - Party did not act inconsistently with privilege.

For the First, second and fourth to ninth defendants

1 This application is brought by the first, second and fourth to ninth defendants (Connective) challenging the objection of the plaintiff (Slea) (and a subpoenaed party, James Boyle) to production of discovered documents. Slea and Mr Boyle objected to production on the ground that the documents are subject to client legal privilege.

2 A subpoena to produce documents was issued and served on Mr Boyle in July 2016. In August 2016, Slea and Mr Boyle raised objections to the subpoena and sought orders to have it set aside. Those objections were heard and determined by Randall AsJ at a hearing on 3 November 2016. By orders of that same date, Randall AsJ varied the scope of the subpoena and extended the time for compliance to 30 November 2016.[1]

3 By letters dated 30 November 2016, Slea and Mr Boyle each raised further objections to production and inspection of the subpoenaed documents, asserting that the only documents responsive to the subpoena were those over which legal professional privilege applied.

4 The parties subsequently agreed that the objecting parties would provide a list of documents over which they claimed privilege, including the details and basis for each privilege claim.[2]

5 On 15 March 2017, Mr Boyle produced a List of Privileged Documents to the Prothonotary in purported compliance with the subpoena (as varied). A letter to the Prothonotary of the same date again indicated that the only documents responsive to the subpoena were those over which legal professional privilege applied.[3]

6 Connective challenged Slea's privilege claims with respect to the subpoenaed documents by letter dated 13 April 2017.

7 On or about 19 April 2017, Slea's solicitors provided to Connective's solicitors a revised List of Privileged Documents identifying the specific ground of privilege claimed by Slea in relation to each of 42 listed documents.[4] Slea relies on client legal privilege in respect of each document; specifically, legal advice privilege under s 118 of the Evidence Act 2008 (Vic) ('the Act'), litigation privilege under s 119 of the Act, or both.

Client legal privilege under sections 118 and 119 of the Act

Section 118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of¾

(a) a confidential communication made between the client and a lawyer; or

(b) a confidential communication made between 2 or more lawyers acting for the client; or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person¾

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

Section 119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of¾

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential document (whether delivered or not) that was prepared¾

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

9 In an affidavit filed in support of Slea's claim of client legal privilege, Mr Vaatstra provides background details about the individuals who were party to the documents subject to the privilege claim as follows:

(a) Mr Tsialtas is the sole director of Slea, has been an employee of the Liberty Group since about October 2008 and is currently employed by Liberty Financial Pty Ltd (Liberty) as State Sales Manager for Victoria and Tasmania.[5]

(b) Mr Sherman Ma is a director of Liberty.[6]

(d) Ms Angela Quintarelli, General Counsel of the Liberty Group, is and was at all relevant times an Australian Legal Practitioner holding a Practising Certificate.[8]

(e) Ms Kimberley MacKay is a Senior Associate at Arnold Bloch Leibler, the solicitors for Slea.[9]

(f) Mr Raphael Leibler is a lawyer at Arnold Bloch Leibler.[10]

(g) Mr Justin Taede Vaatstra is a partner of Arnold Bloch Leibler.[11]

10 Slea bears the onus of establishing its claim to privilege. For the purposes of argument, Slea categorises the documents (which are all communications by email) into four categories:

emails from Arnold Bloch Leibler to Tsialtas and to Liberty (Category 1);[12]
emails from Liberty to Arnold Bloch Leibler and Tsialtas (Category 2);[13]
emails between Tsialtas and Liberty (Category 3);[14] and
an email internal to Liberty (Category 4).[15]

(a) that the Category 1 documents are email communications about this proceeding between the plaintiff's solicitors, Arnold Bloch Leibler, and its client, the plaintiff (Slea by its sole director Mr Tsialtas). They were made during the course of this proceeding. The Category 2 documents are email communications responding to the Category 1 emails;

(b) that the emails are confidential communications made (or alternatively, confidential documents prepared) for the dominant purpose of the lawyer providing legal advice to the client (s 118 of the Act) and for the dominant purpose of the client being provided with professional legal services (s 119 of the Act);

(c) that the only additional circumstance is that a third party, Liberty (the employer of the plaintiff's sole director Mr Tsialtas), is funding this litigation for Slea pursuant to an agreement described as the Accommodation Agreement and is included in the correspondence.[16] Slea submits that the inclusion of Liberty in the correspondence does not:

(i) negate the confidentiality of the communications at the time they were made or the confidentiality of the documents when they were prepared; or

(ii) deny the characterisation of the communication as a communication made between the client and a lawyer; and

(d) that the Category 3 documents are email communications between Mr Tsialtas and Liberty (but not Arnold Bloch Leibler), but when considered in their context are communications made or documents prepared for the dominant purpose of Arnold Bloch Leibler providing legal advice or professional legal services to Slea.

(a) that the emails between Slea and its solicitors were also communicated to a third party (Liberty) and, accordingly:

(i) the documents are not 'confidential' within the meaning of s 117 of the Act and therefore the prerequisite of confidentiality under ss 118 and 119 of the Act cannot be satisfied; and

(ii) the communications are not communications 'between the client and a lawyer' for the purposes of s 118(a) of the Act; and

(b) that Slea's material filed in support of its claim for privilege (i.e. the Vaatstra affidavit) does not reveal the purpose of the emails or documents, and that it seemed doubtful that they were created for the dominant purposes specified in ss 118 and 119 of the Act because it appears that many of the communications are between Liberty, the third party, and a lawyer, and some communications are between Slea and Liberty.

confidential communication means a communication made in such circumstances that, when it was made¾

(a) the person who made it; or

(b) the person to whom it was made¾

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

confidential document means a document prepared in such circumstances that, when it was prepared¾

(a) the person who prepared it; or

(b) the person for whom it was prepared¾

was under an expressed or implied obligation not to disclose its contents, whether or not the obligation arises under law.

14 Both Connective and Slea rely on R v Sharp[17] but for different reasons. In R v Sharp, an accused person and a number of police entered the accused's unit at the time a telephone rang. The accused picked up the handset and, in a conversation which was overheard by those present, made admissions of her knowledge of the circumstances of a crime. It transpired that the telephone conversation was with the accused's solicitor. The question arose as to whether the overheard conversation was a 'confidential communication' between a solicitor and a client for the purposes of client legal privilege.

15 In his reasons, Howie J referred to a previous decision of Lush J in R v Braham in the following terms:[18]

In R v Braham [1976] VicRp 56; [1976] VR 547, Lush J referred to the following statement of Innes J in Re Griffin [1887] NSWLawRp 28; (1887) 8 LR (NSW) 132 in respect of legal professional privilege:

It seems to me that if a statement be made in the presence of a third party there can be no privilege properly so called. The only privileged communications are those made between solicitor and client when they are alone.

I am unable to accept, if I may say so, with respect, Innes J's categorical statement that the presence of a third party will always destroy privilege and that privilege can only exist when the solicitor and client are alone. It appears to me that any particular situation must be examined a good deal more subtly than that. However, the reason why his Honour made those observations was that he was examining the question whether the particular communication in that case was confidential, and the necessity that the communication for which protection is sought must be confidential is also referred to by Cross at the page to which I have referred.

In my opinion, each case must be examined to see whether the communication was one which should be classed as confidential. The fact of the presence of a third party should be examined to see whether that presence indicates that the communication was not intended to be confidential, or whether the presence of the third party was caused by some necessity or some circumstances which did not affect the primary nature of the communication as confidential;...

16 Howie J followed the approach outlined by Lush J and examined the evidence to see whether the presence of the third party indicated that the communication was not intended to be confidential. His Honour said:[19]

But on the evidence before me I do not believe that the accused intended that the conversation be confidential and the police had no reason to believe that it was. They were unaware that the accused was speaking with her solicitor. Because the statement was not made, or intended to be made, in confidence, the solicitor was, therefore, under no obligation not to disclose it. It was not a "confidential communication" within the meaning of that term in s 117 and there was no privilege in it. It was thus unnecessary for me to consider whether any privilege in the statement had been waived by the voluntary disclosure of it to the police.

17 It is evident from these passages that Sharp is not authority for the proposition put by Connective (by extension) that a communication or document will not be confidential for the purposes of s 117 of the Act where a third party is present at the time of the communication or receives the document.[20]

18 On the contrary, in Sharp Lush J stated that he was unable to accept the categorical statement that the presence of a third party would always destroy privilege and that privilege could only exist when a solicitor and client were alone.

19 His Honour said that each case must be examined to see whether the communication was one which should be classed as confidential, and that the fact of the presence of a third party should be examined to see whether the presence of the third party indicates that the communication was not intended to be confidential or whether it was caused by some circumstance which did not affect the primary nature of the communication as confidential.

20 Sharp demonstrates that the mere presence of a third party when a communication is made will not necessarily be determinative. Applying the same reasoning to this case, in my view the mere inclusion of the third party recipient at the time the communication was made or the document prepared is not necessarily determinative.

21 In a related submission, Connective submitted that the communication is not a communication 'between the client and a lawyer' if it includes a third party.[21]

22 No authority was cited to support the proposition that a communication between a client and a lawyer which includes a third party cannot be a communication between the client and a lawyer for the purposes of s 118(a). The section does not state that the confidential communication must be made exclusively between the client and a lawyer. The Explanatory Memorandum for the Bill provides no support for this interpretation.[22] It may be observed that the legislative changes subsequently enacted to the Evidence Act 1958 extended and liberalised the protection from disclosure by changing the common law sole purpose test in Grant v Downs to a dominant purpose test, and by extending the privilege to confidential documents prepared by someone other than the client or the lawyer. This reflected developments in common law legal advice privilege, as discussed by the Full Federal Court in Pratt Holdings Pty Ltd v Federal Commissioner of Taxation.[23] Suffice to say, there is no warrant for construing the section so narrowly.

23 In my view, the relevant enquiry is whether or not the inclusion of a third party in a communication made between the client and a lawyer means that the communication (or the document) is no longer confidential. That question will be answered by determining whether the person who made the communication, or the person to whom the communication was made, was under an express or implied obligation not to disclose its contents. Similarly, in the case of documents, this will require determination of whether the person who prepared the document, or the person for whom it was prepared, was under an express or implied obligation not to disclose its contents.

24 With these principles in mind, I turn to the documents in this case.

25 I am satisfied that the emails in Categories 1 to 3 are confidential communications and confidential documents for the purposes of s 117.

26 First, Mr Vaatstra has deposed generally that all of the communications between Slea, Liberty and Arnold Bloch Leibler are confidential and are marked as such.[24]

27 Second, it can be discerned from Mr Vaatstra's affidavit that there are at least 112 references to assertions of confidentiality in headings and footers to the effect that the communication and any attachments are confidential, and that the communication does or may contain privileged information.[25]

28 Third, Mr Vaatstra deposes that the documents were variously for:

(d) dealing with queries about Arnold Bloch Leibler's legal advice;

(f) seeking to clarify matters raised in Arnold Bloch Leibler's legal advice; or

(g) dealing with responses to the recipients of the emails and providing clarification

29 Fourth, I inspected the covering email of the first six documents for the limited purpose of viewing the style, type and prominence of any heading asserting confidentiality without otherwise reading the contents of the document. In each case there was a prominent statement under the subject matter heading asserting that the contents were privileged and confidential, leaving the reader under no illusion that the contents were intended to be confidential. Whilst assertions of this kind are not determinative, they are indicative of intent and are to be taken into account for that purpose.

30 Even without the heading 'Privileged and Confidential' or variants of such a heading, the nature of the subject matter and the context of communications about this litigation between the solicitor, the solicitor's client and the funder of the litigation would have implied an obligation of confidentiality. In my view, the parties to those conversations had an ethical, moral or social obligation to keep the contents of the emails confidential.[27]

31 This case has some similarities with Rickard Constructions Pty Ltd v Richard Hails Moretti Pty Ltd.[28] In that case, a question arose as to whether documents provided to the litigation funder to ensure funding were privileged pursuant to s 118 or 119 of the Act. The material provided included correspondence with the defendant's solicitors, advice given to the plaintiff and letters of instruction. Bergin J was satisfied that the collaborative and supportive aspects of the relationship between the plaintiff and the funder, the nature of the meetings attended and the documents provided to the funder, were matters from which it was appropriate to imply that the funder had an obligation not to disclose the documents' contents. Accordingly, the Court held that the communications with the funder were confidential communications within the meaning of s 117 of the Act.

32 In light of the funding agreement in this case, both the plaintiff and the funder share an interest in the successful prosecution of the litigation and the advice given in relation to the litigation. In the circumstances, I consider that each would expect the other to maintain confidentiality.

33 For a confidential communication or confidential document to attract client legal privilege it must be made or created for the dominant purpose of the lawyer to provide legal advice (s 118) or to provide professional legal services to the client relating to a proceeding in which (relevantly) the client is a party (s 119).

34 In Commissioner of Taxation v Pratt Holdings Pty Ltd, Kenny J said:[29]

The purpose for which a document is brought into existence is a question of fact. Where there are a number of purposes for the creation of a document, it can be difficult to identify the dominant purpose. The dominant purpose must be determined objectively, having regard to the evidence, the nature of the documents and the parties' submissions. The purpose will ordinarily be that of the maker of the document, but this will not always be the case.

35 In Australian Wheat Board v Cole (No 5), Young J said:[30]

The party claiming privilege carries the onus of proving that the communication was undertaken or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation....

The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's maker, or of the person who authorised or procured it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication....

36 The High Court in Grant v Downs observed that, in many instances, the character of the relevant documents will illuminate the purpose for which they were brought into existence.[31]

37 Connective concedes that it is unable to assess whether the documents disclose the relevant purpose without having access to them.[32]

38 Nevertheless, Connective submits that the Vaatstra affidavit 'does not reveal anyone's purpose' and that accordingly Slea has failed to make out its asserted claims of privilege in respect of the 42 documents.[33]

39 Slea contends that in this case the relevant circumstances and context are that Slea is the plaintiff in the proceeding, ABL are its solicitors and Liberty is funding Slea and has an indirect interest in the proceeding under the Accommodation Agreement, and that Slea had instructed Mr Vaatstra to include the Liberty representatives in the communications from time to time.[34]

40 Mr Vaatstra deposes as to the purpose for sending each of the emails that he sent, as outlined earlier. Mr Vaatstra also deposes as to the nature of the emails sent from the Liberty recipients to Arnold Bloch Leibler and Tsialtas. In almost every instance the communications were responsive to Arnold Bloch Leibler's earlier emails and provided the information requested, gave updates or asked questions in relation to the proceeding. In one instance, Mr Boyle forwarded correspondence relevant to Arnold Bloch Leibler providing advice to Slea in relation to the proceeding.[35] I am satisfied that Category 1 and Category 2 documents, as characterised in the Vaatstra affidavit when considered in context and sequence, are intrinsically communications made and documents prepared for the dominant purpose of the lawyer providing legal advice to the client for the purposes of s 118, and the client being provided with professional legal services for the purposes of s 119. There is no evidence of another purpose.[36]

41 Mr Vaatstra also individually addresses Category 3 documents (emails passing between Tsialtas and Liberty). Mr Vaatstra deposes that in these communications:

• Mr Tsialtas raises queries in relation to Arnold Bloch Leibler's legal advice;

• Mr Ma (director of Liberty) requests Liberty's internal lawyer to clarify matters raised in Arnold Bloch Leibler's legal advice;

• Liberty's internal lawyer provides legal advice and the clarification requested by the CEO;

• there is discussion of advice provided by Arnold Bloch Leibler;

• Mr Ma responds to Mr Tsialtas' queries in relation to the proceeding;

• Mr Tsialtas clarifies a previous email in which he discusses advice provided by Arnold Bloch Leibler and raises queries in relation to the proceeding;

• Mr Ma responds to Mr Tsialtas' email and discusses points in relation to Arnold Bloch Leibler's legal advice;

• Liberty raises queries with its general counsel about advice from Arnold Bloch Leibler in relation to the oppression proceeding and seeks legal advice in relation to Arnold Bloch Leibler's legal advice; and

• Mr Tsialtas comments on legal advice provided by Arnold Bloch Leibler.

42 It is open to infer, and I do infer from the evidence as to the subject matter of each of the Category 3 documents, that the documents were prepared for the dominant purpose of the client (Slea) being provided with professional legal services relating to an Australian proceeding or an anticipating proceeding. As with Category 1 and Category 2 documents, there is no evidence of another purpose. Both Slea and the funder (Liberty) have an interest in ensuring that the oppression proceeding is prosecuted satisfactorily. The funding is inextricably linked to, and fulfils the purpose of, providing legal services.[37] I note in particular the fact that the communications relate back to legal advice provided by Arnold Bloch Leibler.

43 Given the respective interests in the proceeding, I would expect Mr Tsialtas and representatives of Liberty to raise questions and discuss and clarify between each other the legal advice given by Arnold Bloch Leibler. This would include, if necessary, Liberty's general counsel.

44 Adducing evidence of such communications would plainly result in disclosure of the communications themselves and the underlying advice of Arnold Bloch Leibler to which they refer. In my view, these documents satisfy the requirements of s 119: they are confidential communications between the client and another person that were made, or the contents of a confidential document that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian proceeding or an anticipated Australian proceeding.

45 There is only one document in Category 4. This document is an internal email from Liberty's general counsel to Mr Boyle. In this document, Liberty's general counsel discusses the legal advice provided by Arnold Bloch Leibler in document 34[38] and provides legal advice in relation to Slea's position and the next steps in the oppression proceeding.[39]

46 I accept Slea's submission that the document comes within s 119. The internal email follows immediately on from an email from Arnold Bloch Leibler to Slea and Liberty and comprises a discussion with Liberty in connection with that email. Subsequently, Mr Tsialtas commented on the legal advice provided by Arnold Bloch Leibler in document 34.[40] I accept that the document is a confidential document prepared for the dominant purpose of Slea being provided with professional legal services relating to an Australian proceeding.

47 In any event, in my view email 2 (within document 37) is not responsive to the subpoena. It is an email which is internal to Liberty and does not include anyone from Slea. The revised scope of the subpoena set out in the annexure to the orders of Randall AsJ made 3 November 2016 relevantly requires production of:

All documents...which evidence, record or refer to any communications between at least you and Slea...regarding Minerva's (whether referred to as Minerva or Liberty):

(a) interest in;

(b) involvement in;

(c) direction to make; or

(d) reasons to give such directions to make,

the Application or any contemplated or proposed application to seek relief under section 237 of the Corporations Act 2001 (Cth).

48 For the avoidance of doubt, I have inspected email 2 in document 37. It seems to me that this document does not evidence, record or refer to any communications between Mr Boyle and Slea (by its officers, agents, employees or representatives) and is not therefore within the scope of the subpoena.

49 Connective submits that any privilege in the 42 documents has been lost.

Section 122 Loss of client legal privilege: consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3) Without limiting subsection (2), a client or party is taken to have so acted if¾

(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or

(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4) The reference in subsection (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because¾

(a) the substance of the evidence has been disclosed¾

(i) in the course of making a confidential communication or preparing a confidential document; or

(ii) as a result of duress or deception; or

(iii) under compulsion of law; or

(iv) if the client or party is a body established by, or a person holding an office under, an Australian law--to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or

(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or

(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

...

Section 126 Loss of client legal privilege: related communications and documents

If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document.

51 Connective submits that any privilege has been lost because Slea has brought an application for leave to bring a derivative proceeding. That application requires Slea to establish that it is acting in good faith.[41] Connective submits that the Connective parties will contend that Slea's application is not brought in good faith, but rather for the collateral purpose (among other things) of advancing Liberty's interests under the Accommodation Agreement.[42] Connective submits that Slea acts inconsistently with privilege by putting its good faith in issue where any of the documents are forensically relevant to Slea's purpose or 'may have likely affected' Slea's purpose.[43]

52 Slea submits that privilege is not waived merely because the communication is forensically relevant to an issue which the privilege holder has raised. If relevance were sufficient to waive privilege then privilege would have no work to do.[44]

53 Slea submits that for the privilege to be waived the privilege-holder must have done one of two things. First, directly or indirectly put the contents of the communication in issue. Alternatively, made an assertion as part of its case that lays open the communication to necessary scrutiny, with the consequence that there is an inconsistency between the privilege holder's conduct and the maintenance of the privilege.[45]

54 Slea submits that it has not expressly or impliedly relied on any of the privileged communications to vindicate or support its claim that it is 'acting in good faith' within the meaning of that expression in s 237(2)(b) of the Corporations Act 2001 (Cth). Nor has it done so by its reliance on paragraph 36 of an affidavit of Mr Tsialtas (sworn 2 August 2016) to the effect that Minerva (Liberty) did not instruct nor direct him to issue the leave application and that the application was not made at its behest.[46]

55 The test for loss of privilege in this context is set out in Commissioner of Taxation v Rio Ltd, where the Full Court of the Federal Court held:[47]

[T]he question is not whether the Commissioner has put his state of mind in issue but whether he has directly or indirectly put the contents of the otherwise privileged communications in issue in the litigation, either in making a claim or by way of defence. Put another way, to adopt Allsop J's language in DSE,[48] has the Commissioner (being the privilege holder) made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege?

56 In Macquarie Bank Ltd v Arup Pty Ltd,[49] the Full Court of the Federal Court referred to the approach to be taken in determining whether there has been an implied waiver of privilege. After referring to Commissioner of Taxation v Rio Ltd and Mann v Carnell,[50] the Court said as follows:[51]

The correct approach was succinctly described by Yates J in Ferella v Official Trustee in Bankruptcy [2010] FCA 766; (2010) 188 FCR 68 at [65] in the following terms:

...However the question is not simply whether the holder of the privilege has put that person's state of mind in issue but whether that person has directly or indirectly put the contents of the otherwise privileged communication in issue: see [Rio Tinto] at [65]. Indeed, even the fact that the holder of the privilege makes clear that the advice was relevant or contributed to a particular course of conduct would not be sufficient to waive the privilege unless, possibly, the contents of the legal advice (and not merely the fact of the advice) are specifically put in issue by relying on the contents of the advice to vindicate a claimed state of mind: [Rio Tinto] at [67].

57 In this case, I am not satisfied that there has been any conduct that is inconsistent with the maintenance of confidentiality in the communication over which the privilege is asserted. The contention that Slea is acting in good faith in its application for leave, and that the application is not brought at the behest of Liberty, necessarily makes relevant those documents bearing upon such matters. However, it does not follow that if a document relevant to that allegation is privileged the privilege in the document is therefore waived.

58 In Liquorland Australia Pty Ltd v Anghie, Byrne J said:[52]

...to adopt the striking image of Heerey J in Equuscorp Pty Ltd v Kamisha Corporation Ltd,[53] 'If legal professional privilege applies, privilege trumps relevance'. It follows from this that mere materiality to an issue in litigation can provide no ground to remove the privilege. There must be more. Otherwise the privilege would have no work to do...

59 In this case, I am not satisfied that Slea has put the contents of otherwise privileged communications in issue, or made an assertion as part of its case that lays open any of the communications to necessary scrutiny. The position would be different if Slea purported to rely on the contents of the communications as vindicating its state of mind. However, there is no demonstrated inconsistency between Slea's conduct and the maintenance of the confidentiality.

60 Given there is no loss of privilege in relation to any of the 42 communications or documents, the issue of loss of client legal privilege for related communications and documents does not arise.

61 In the circumstances, I uphold the objection of the plaintiff Slea and the subpoenaed party, James Boyle, to production of the 42 documents on the grounds that they are subject to Slea's client legal privilege.

62 Accordingly, Connective's application must be dismissed.

[1] Order of Randall AsJ made 3 November 2016; Exhibit LFW-1 to the affidavit of Laura Frances Weston affirmed 21 April 2017, 61-4 (Weston affidavit); Affidavit of Justin Taede Vaatstra sworn 5 May 2017, [7] (Vaatstra affidavit).

[2] Letter from Quinn Emmanuel to the Prothonotary dated 13 April 2017, Exhibit LFW-1 to the Weston affidavit, 94-6.

[3] Exhibit LFW-1 to the Weston affidavit, 79-81.

[4] Exhibit LFW-1 to the Weston affidavit, 97-101.

[5] Vaatstra affidavit, [29(a)], [32]; Exhibit LFW-1 to the Weston affidavit, 25. Liberty was formerly known as Minerva Financial Group Pty Ltd and is sometimes referred to as Minerva.

[6] Vaatstra affidavit, [29(b)]; Exhibit LFW-1 to the Weston affidavit, 3.

[8] Vaatstra affidavit, [29(d)], [30], [31]; Exhibit JTV-9 to the Vaatstra affidavit.

[11] Vaatstra affidavit, [1], [29(g)].

[12] Document numbers 1, 2, 3, 4, 5, 8, 11, 12, 14, 15, 16, 17, 18, 20, 22, 24, 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36, 39, 40, 41, 42.

[13] Document numbers 3, 4, 5, 7, 12, 14, 17,18, 21, 24, 25, 28, 29, 31, 32, 33, 39, 40.

[14] Document numbers 3, 4, 5, 7, 12, 14, 17, 18, 21, 24, 25, 28, 29, 31, 32, 33, 39, 40.

[16] The Accommodation Agreement is exhibit JTV-10 to the Vaatstra affidavit.

[20] Submissions of the 1st, 2nd & 4th to 9th defendants as to Slea's claim of client legal privilege over the documents identified in the subpoenaed party's list of privileged documents dated 15 March 2017, (9 May 2017) [14], [15] (Connective written submissions).

[21] Connective written submissions, [16].

[22] Exploratory Memorandum, Evidence Bill 2008 (Vic), pp 44-45.

[25] See Vaatstra affidavit, [37]-[245].

[26] See Vaatstra affidavit, [37]-[245].

[27] Edwards v Vic Land Rehabilitation [2012] VSC 188, [24]-[26].

[29] [2005] FCA 1247; (2005) 225 ALR 266, 278 [30] (citations omitted); cited with approval in Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59, [3].

[30] [2006] FCA 1234; (2006) 155 FCR 30, 44-5 [44] (citations omitted).

[31] [1976] HCA 63; (1976) 135 CLR 674, 689 (Stephen, Mason and Murphy JJ).

[32] Connective written submissions (9 May 2017), [9].

[33] Connective written submissions (9 May 2017), [10]-[11].

[34] Plaintiff's Submissions in Relation to Privilege (12 May 2017), [15] (Slea written submissions).

[35] Email 1 in document 17, Vaatstra affidavit [114(a)]-[116].

[36] Cf. Powercorp Australia Ltd v Perry [2011] VSCA 239; (2011) 33 VR 548, 554 [26] in which there was a significant body of evidence of multiple purposes.

[37] See e.g. Rickard Constructions [2006] NSWSC 234, [57]-[59].

[40] Document 38; Vaatstra affidavit, [226].

[42] Connective written submissions (9 May 2017), [30].

[43] Connective written submissions (9 May 2017), [31].

[44] Liquorland Australia Pty Ltd v Anghie [2003] VSC 73; (2003) 7 VR 27, 31 [11].

[45] Slea written submissions (12 May 2017), [20].

[46] Slea written submissions (12 May 2017), [20], [22]; Connective written submissions (9 May 2017) [23]-[25].

[48] DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499.

[52] Liquorland Australia Pty Ltd v Anghie [2003] VSC 73; (2003) 7 VR 27, 31 [11].

At a glance

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Judgment (151 paragraphs)

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Cases Cited (10)