Racing New South Wales v Racing Victoria Ltd - [2024] NSWSC 312 - NSWSC 2024 case summary — Zoe

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Racing New South Wales v Racing Victoria Ltd

[2024] NSWSC 312

Supreme Court of NSW|2024-03-26|Before: Rees J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2024-03-26

Before

Rees J

Source

Original judgment source is linked above.

Judgment (22 paragraphs)

[1]

JUDGMENT

HER HONOUR: On 23 February 2024, I gave judgment in respect of a number of issues which have arisen following orders for preliminary discovery: Racing New South Wales v Racing Victoria Ltd [2024] NSWSC 147. In respect of claims of client legal privilege, I was not persuaded that the defendants' claims must be supported by direct evidence. The plaintiffs' challenge to such claims was left on the basis that the parties proposed to identify a sample of documents for me to inspect and rule on.
Whilst the parties were of like mind that the Court should rule on privilege claims for 'sample' documents, so that the parties could deploy the Court's rulings to confer and resolve remaining disputed privilege claims, I have my doubts as to whether this is a useful exercise. As I observed in Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525, whether each sample document is privileged depends upon the particular circumstances in which that document was brought into existence: at [45]. The transferability of a ruling on a sample document to any other document does not go without saying. Nor am I convinced that this is a good use of the Court's time. A better course, in future, may be for parties to jointly appoint an expert solicitor or barrister to undertake such a task.
In any event, on 5 March 2024, the parties provided their agreed list of sample documents, being some 30 in number. The samples come from two groups of documents, described as Group 1 (in-house lawyer communications) and Group 2 (communications between non-lawyers). This judgment assumes familiarity with my earlier judgment.
The evidence in respect of Racing Victoria's in-house counsel is described in my earlier judgment at [122]-[124]. In short, the in-house legal team comprised four solicitors including Simonette Foletti, who reported to Louise Lane, who reported to Racing Victoria's chief executive officer. Ms Lane also had other staff reporting to her in respect of her "Risk" and "Occupational Health & Safety" functions. Ms Lane's role did not include responsibility for commercial matters, nor making commercial decisions, but providing legal advice to those responsible for and involved in making such decisions. Michelle Fielding took over Ms Lane's role in September 2022.

[2]

Principles

The onus to establish the facts upon which claims for privilege are based is on the party claiming privilege: Grant v Downs (1976) 135 CLR 674 at 689 (per Stephen, Mason and Murphy JJ). That onus may be discharged by direct evidence, "by reference to the nature of the documents supported by argument and submissions" and by inferences drawn from other proven facts: AWB Ltd v Cole (No 5) (2006) 155 FCR 30, [44(1)] (per Young J); Hastie Group Ltd (in liq) v Moore (2016) 339 ALR 635 at [33]-[34] (per Beazley P and Macfarlan JA).
The defendants were silent as to the precise basis on which the claims for privilege were made. I have proceeded on the assumption that s 118 of the Evidence Act 1995 (NSW), or its Victorian counterpart (Evidence Act 2008 (Vic) s 118), is the relevant provision, which provides: 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 of - (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 person, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
The plaintiffs do not dispute the confidential nature of the communications and documents. In issue, however, is whether the "dominant purpose" of the communications was the provision of legal advice to Racing Victoria. The "dominant purpose" is the ruling, prevailing or most influential purpose having the element of clear paramountcy: 789Ten v Westpac Banking Corporation Ltd (2005) 215 ALR 131; [2005] NSWSC 123 at [22] (per Bergin J); Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416. The Court will look at the document's 'purpose' from an objective standpoint, considering all relevant evidence including evidence of subjective purpose: Rawlinson & Hunter Trustees SA v Akers [2014] EWCA Civ 136 at [13]; 789Ten v Westpac at [46].
In DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151; [2003] FCA 1191, Allsop J endorsed the observations of Taylor LJ in Balabel v Air India [1988] 1 Ch 317, "In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. … Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach:" Balabel at 330, cited in DSE at [38]. In DSE, Allsop J also observed that legal advice may go beyond formal advice as to the law and it may be "impossible to disentangle the lawyer's views of the legal framework" from other reasons that all go to make up the advice as to what should be done within the legal framework; while privilege does not extend to commercial advice, the form and nature of advice should be recognised in a practical day-to-day context: at [45]. Allsop J observed at [52]: "[T]he obligation of the lawyer to advise, once retained, is pervasive. It would be rare that one could, with any degree of confidence, say that a communication between client (or agent) and lawyer, in the circumstances of a retainer requiring legal advice and the directing of the client by a legal adviser, was not connected with the provision or requesting of legal advice. … too literal a requirement of identifying legal advice as express advice about the law would place undue emphasis on formalism and undermine the privilege."
As Young J put it in AWB Ltd v Cole (No 5) (2006) 155 FCR 30; [2006] FCA 1234, the concept of legal advice will be interpreted widely so as to include advice as to what a client should prudently or sensibly do: at 44].

[3]

In-house lawyer communications

In respect of communications with in-house counsel, the plaintiffs accepted that Ms Fielding, Ms Lane and Ms Foletti may have provided legal advice from time to time. However, it was said to be clear that at least Ms Lane also operated in a commercial capacity such that her communications were not always privileged, or were not privileged in their entirety. If Ms Fielding, Ms Lane or Ms Foletti communicated with Racing Victoria in circumstances where the dominant purpose of that communication was not the giving of legal advice, the mere fact that the communication was preparatory to a communication by Racing Victoria with its external solicitors will not render Ms Fielding, Ms Lane or Ms Foletti's initial communication privileged.
Further, Racing NSW submitted that the defendants did not claim privilege in respect of communications between the PRAs in respect of Plan A and Plan B, reform and governance but then asserted privilege over internal communications at Racing Victoria in respect of the same subject matter. A question arose as to whether the dominant purpose of these communications was the provision of legal advice to Racing Victoria or, in fact, an equally weighty purpose, being the progression of discussions between the PRAs. Racing Victoria submitted that there was nothing unusual about this: in the lead up to meetings, Racing Victoria obtained legal advice on documents that were then part of those meetings. The defendants simply got legal advice before they did the things about which allegations have been made.
Obviously, privilege does not attach to a communication created in a non-legal capacity or where the dominant purpose was not the provision of legal advice: Sydney Airports Corp Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [24] (per Spigelman CJ); Priest v New South Wales [2006] NSWSC 1281 at [43]-[48] (per Johnson J) (where his Honour reviewed a report prepared by a legally qualified police officer for the Commissioner of Police and concluded that the dominant purpose of the document was an administrative or process review rather than the provision of legal advice). Nor will privilege attach if the intended use of a document is to advise and inform the client in making the client's communication with a lawyer, rather than to record the communication to be made to the lawyer: Pratt Holdings Pty Ltd v Federal Commissioner of Taxation (2004) 136 FCR 357; [2004] FCAFC 122 at [47] (per Finn, Merkel and Stone JJ).
Nonetheless, the approach to be taken when considering privilege claims involving in-house lawyers has been described as "broad and practical … [as] to the scope or meaning of "legal advice": Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2020] FCA 1232 at [194] (per Wigney J), citing DSE at [21], [45]. His Honour there upheld a privilege claim where, although the advice also involved commercial and administrative elements, those aspects of the advice were essentially part of the overall legal advice and could not be separated from it. As Matthews AsJ summarised the position in Andrianakis v Uber Technologies Inc; Taxi Apps Pty Ltd v Uber Technologies Inc [2022] VSC 196, the fact that "some in-house lawyers may have a mixed role in their organisation" is relevant to the enquiry, but "does not preclude their documents/communications from attracting privilege": at [138]. Further, indicia of independence of an in-house lawyer, such as a practising certificate or a separate legal team within the organisational structure, may indicate that the dominant purpose of a communication was providing legal advice, but are neither essential nor determinative; "In the end, it all comes down to a consideration of the particular organisation, the individual in-house lawyers, the context and the specific communications or documents": Andrianakis at [140]-[141].

[6]

Items 1, 2 and 4 (RVL.001.005.6094 and attachments RVL.001.005.6095 and RVL.001.005.6105)

As I noted in my earlier judgment, Ashurst received instructions from Ms Lane in late January 2022, to give legal advice in relation to the potential establishment of a national racing authority and the Australian Pattern: at [15]. In connection with those instructions, in February 2022 Ms Lane asked Greg Carpenter, Executive General Manager - Racing, to provide her with documents regarding a review of the Australian Pattern conducted by a working group of Racing Australia, for the purpose of providing those documents to Ashurst to enable them to provide the requested advice.
Following her request, on 10 February 2022, Ms Lane received an email from Mr Carpenter (Item 4). On 15 February 2022, Ms Lane provided a copy of Mr Carpenter's email and its attachments to Ashurst for the purpose of Ashurst providing competition law advice regarding the Australian Pattern.
On 14 February 2020, Ms Lane sent an email (Item 1) to Racing Victoria's chief executive officer, Giles Thompson, marked "Privileged and Confidential", attaching a memorandum entitled, "Racing Australia Update", to which was annexed a draft framework for the potential establishment of a new national racing body (Annexure A), the email of 10 February 2022 and its attachments (Annexure B), a legal advice from Gilbert + Tobin (Annexure C) and various other attachments.
Ms Lane informed the defendants' solicitor that she drafted Annexure A for the purpose of providing legal advice regarding various matters in connection with Racing Australia including the potential establishment of a new entity, the Australian Pattern (for which purpose, she annexed the email of 10 February 2022) and another matter in respect of which Gilbert + Tobin had provided an advice but which is not presently relevant. After preparing Annexure A, Ms Lane sent her email of 14 February 2022 for the purpose of providing legal advice to Racing Victoria regarding those matters.
On the evidence, Item 4 is a confidential communication between a Racing Victoria employee and in-house counsel, supplying documents so that Racing Victoria's external lawyers can give legal advice. On the evidence, the dominant purpose is that described in s 118 of the Evidence Act. As such, Item 4 is privileged under s 118(a).
Having regard to the principles earlier outlined, Item 1 and its attachments (inter alia Item 2 and Item 4) are also privileged. The dominant purpose of Item 1, being an email from Racing Victoria's in-house counsel to its CEO, is the provision of legal advice, as described by Ms Lane. The fact that Ms Lane's email and the attachments, including Annexure A (Item 2) also involved commercial and administrative elements does not detract from the overall quality of the communications and cannot readily be separated from it. Ms Lane is giving advice on a proposed transaction. The documents are privileged.

[7]

Items 76 to 81 (RVL.001.005.9991, RVL.001.006.0017, RVL.001.006.0018, RVL.001.006.0019, RVL.001.006.0139 and RVL.001.006.0141)

As noted in my earlier judgment at [22]-[31], Racing Victoria approached other PRAs seeking support to establish a new national racing body. A non-disclosure agreement was exchanged and an initial meeting held. A draft open letter to Racing Australia and a Tactical Communications Plan were prepared and circulated. A public relations consultant was retained.
On 2 April 2022, Ms Lane sought instructions from Brian Kruger, Chairman of Racing Victoria, and Mr Thompson regarding obtaining legal advice from Janet Whiting of Gilbert + Tobin in relation to a number of matters. On receipt of these instructions, Ms Lane briefed Ms Whiting.
From 14 to 19 April 2022, Ms Lane informed the defendants' solicitor that she sent and received the emails comprising this 'sample', in order to arrange a meeting between Racing Victoria's board and Ms Whiting on 9 May 2022. The purpose of the meeting was for Ms Lane and Ms Whiting to provide legal advice to Racing Victoria in relation to legal disputes with Racing NSW and various legal matters in connection with Racing Australia, including the matters the subject of the brief provided to Ms Whiting.
Item 76 is an email from Ms Lane to Racing Victoria's directors and executive staff to arrange a meeting. The potentially privileged portion of these emails is the part of Ms Lane's initial email describing what was to be discussed at that meeting, and reproduced in all subsequent email chains. However, Ms Lane's description of the proposed meeting does not align with the emails, where the subject on which Ms Whiting of Gilbert + Tobin was instructed to advise differs from the subject of the proposed meeting, where the emails were not copied to Gilbert + Tobin, no mention is made of the law firm and the dates being discussed do not include 9 May 2022.
The question remains whether such a meeting, apparently to be hosted by Ms Lane, is nonetheless privileged. The subject of these emails is "Strategy Meeting", which suggests that the subject of the proposed meeting concerned matters of strategy rather than, necessarily, the provision of legal advice. Overall, and taking a "broad and practical" approach to the scope of "legal advice", I am nonetheless not satisfied that the dominant purpose of these emails was the provision of such advice but, rather, the discussion of strategy. This group of emails is not privileged.

[8]

Item 162 (RVL.001.006.4778)

As noted in my earlier judgment, on 28 April 2022, Mr Kruger asked that a SWOT analysis be prepared: at [38]. Shortly afterwards, Ms Lane emailed Simon Cunliffe, General Manager - Wagering & Corporate Development, and Aaron Morrison, chief operating officer of Racing Victoria, with the subject "RV/RNSW - historical assessments". Mr Cunliffe replied soon afterwards, copied to Mr Morrison and attaching various documents. It is this email exchange which comprises Item 162.
This email was attached to an email from Ms Lane to Mr Morrison on 15 June 2022 (Item 160, RVL.001.006.4771), which itself was later attached to an email from Ms Lane to Ms Foletti on 22 June 2022 (Item 158, RVL.001.006.4766). Privilege is claimed over these documents, including Item 162, as an attachment on the basis of Commissioner of Australia Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (copies of documents, whether privileged or not, attract privilege where the copy was made for the purpose of forming part of confidential communications between clients and their lawyers).
The email to which Item 162 was ultimately attached was sent by Ms Lane to Ms Foletti, for the purpose of providing legal advice to Racing Victoria together with Ms Foletti. Specifically, Ms Lane informed the defendants' solicitor that she sent the email to Ms Foletti in preparation for a meeting with Ms Foletti for the purpose of discussing the allocation of requests for legal advice referred to in the attachments, including legal advice from Ashurst to Racing Victoria regarding the Australian Pattern.
The defendants do not suggest that Item 162 is privileged in its own right but by dint of the fact that it is attached to a privileged communication between in-house counsel, Ms Lane and Ms Foletti. Thus, this privilege claim turns on whether the communication between in-house counsel is privileged, being Item 158. That email between in-house counsel is in advance of a meeting, apparently to discuss who will be doing what in relation to the various demands on their time and attaching, for that purpose, documents for discussion. Where both in-house counsel appear to have been engaged in providing legal advice to Racing Victoria on various matters, I am satisfied that the email is a confidential communication made between two lawyers acting for the client for the dominant purpose of providing legal advice to that client within s 118(b). As such, the attachments, including Item 162, are also privileged.

[18]

Items 188 to 194 (RVL.001.007.1387 and attachment RVL.001.007.1388, RVL.001.007.1389 and attachment RVL.001.007.1390, RVL.001.007.1391, RVL.001.007.1393 and RVL.001.007.1395

This group of 'sample' documents is a series of emails, some with attachments, sent on 5 September 2022. Some of these documents, being Item 188 and 194, are also in Group 2 (communications between non-lawyers).
Shortly before 5 September 2022, Mr Nichols informed the defendants' solicitor that he prepared a document for the purpose of obtaining legal advice from Racing Victoria's legal team in relation to its content. On 5 September 2022, Mr Nichols sent an email to Mr Jones, attaching the document, requesting Mr Jones to seek legal advice from Racing Victoria's legal team in respect of the attachment (being Item 188 and Item 189). Mr Jones forwarded the email and its attachment to Ms Foletti (Item 190 and Item 191) for the purpose of requesting legal advice from Ms Foletti or Ashurst in relation to the contents of the attachment. An hour later, Ms Foletti sent an email in reply to Mr Jones for the purpose of providing legal advice regarding the contents of the attachment (Item 192). Mr Jones forwarded Ms Foletti's email to Mr Nichols (Item 193) for the purpose of conveying Ms Foletti's legal advice to Mr Nichols and to ask whether Mr Nichols required further legal advice. Mr Nichols replied to Mr Jones (Item 194), confirming that no further legal advice was required.
The documents are as described. The first email from Mr Nichols to Mr Jones is a confidential document prepared by the client and provided to Mr Jones for the purposes of legal advice being obtained from in-house counsel on the document. The document was subsequently delivered to in-house counsel. Item 188 and its attachment Item 189 are privileged under s 118(c). Item 190 and attachment Item 191, by which Mr Jones provided Mr Nichols' email and attachment to Ms Foletti, are privileged under s 118(a). Ms Foletti's reply (Item 192) with her advice is privileged under s 118(a).
Perhaps more difficult is the subsequent email exchange between Mr Jones and Mr Nichols in respect of Ms Foletti's advice, accepting that the earlier emails in these chains are privileged for the reasons already given. This turns on whether the emails exchanged between Mr Jones and Mr Nichols disclose the earlier advice given by Ms Foletti: s 118(a). Mr Jones' email (Item 193) falls into this category. So too does the first sentence of Mr Nichols' email (Item 194). The last sentence does not. (The preceding email chain in Item 194 is privileged for reasons already given.)