Strategic Financial and Project Services Pty Limited v Bank of China

REASONS FOR JUDGMENT 1 This morning, I have heard short submissions on behalf of the applicants, for whom Ms Taylor appears, and on behalf of the first respondent, for whom Mr Coles QC and Mr Golledge appear, on the question whether the contents of a number of documents entitled "Account Narrations for a Billing Period" in respect of the former solicitors of the first respondent and "Description" in "Details of Fees" by the present solicitors for the first respondent are the subject of legal professional privilege. In total, the number of pages involved is approximately 225. 2 The matter is urgent and has been dealt with informally by the parties because the more substantive question to which these documents relate is an interlocutory application by the first respondent, the Bank of China, to increase the level of security for costs. That application is listed for hearing on 30 April 2012. 3 The question of legal professional privilege arose in the course of responding to a notice to produce issued by the applicants and served on 14 March 2012. Documents were provided by the first respondent but with redactions for relevance and legal professional privilege. In a formal sense therefore the question is whether further production in answer to the notice to produce should be excused. 4 The evidence which is before me consists of an affidavit by Mr Luke Hastings affirmed on 22 February 2012 and an affidavit by Ms Higginbotham sworn 17 February 2012, in each case filed on behalf of the first respondent and then an affidavit sworn by Ms Xue-Li Sheryl Lee on 21 March 2012 filed on behalf the applicants. That affidavit in turn refers to 3 paragraphs of an earlier affidavit sworn by the same deponent on 20 March 2012. There is also an arch lever folder of material tendered by the first respondent and which I mark on this application BOC 1. Also tendered and which I mark SFPS 1 on this application is a bundle of documents indicating what parts of BOC 1 have been masked for privilege and relevance. The same masking has been done both for relevance and for privilege. 5 The first respondent, the Bank of China, submitted that the redacted material, being the narratives in the itemised bills of costs, was irrelevant. This may turn out to be so on the hearing of the substantive security for costs application on 30 April 2012 consistently with the broad brush approach referred to by Emmett J in Save The Ridge Inc v Commonwealth of Australia [2004] FCA 1289 and accepting that the best evidence is not required as indicated by Davies J in Pathway Investments Pty Ltd v National Australia Bank Limited [2012] VSC 97. 6 But for the purposes of the present application, the expert retained by the applicants for the security for costs application has said she requires some greater description of the work performed in order to form an opinion on the reasonableness of that work, including the accuracy of the excluded categories such as the change of solicitors and the unsuccessful application for summary judgment. 7 I should note that the question arises in this context because the security for costs application is in respect of work already done as well as work proposed to be done. But in terms of what it is that the applicants' expert requires, I refer to the affidavit sworn by Ms Lee on 21 March 2012, in particular paragraph 4. To that extent, therefore the material may be seen to be relevant for present purposes. 8 I accept that it appears that the expert retained by the Bank of China did not regard it as necessary for her purposes to proceed by reference to a detailed description of the work performed and that may turn out to be the preferable position. But that does not, in my view, determine relevance from the perspective of the applicants for present purposes. And I note the submission - and it may be the case -that Mr Hastings had some regard to this underlying material, including the narrations or the descriptions, in preparing his affidavit and perhaps his instructions to Ms Higginbotham. 9 I note the submission also made by the Bank of China that any attempt to further mask the narratives in the itemised bill of costs in part would place an oppressive and disproportionate burden on it. But, in my view, that proposition is not self-evident and I was not taken to specific evidence to support it. The number of pages, as I have said, is approximately 225, but as contemplated at an earlier directions hearing, in my view, once the principles are established, the task seems to be largely mechanical and should take no more than a few minutes for each page. 10 Returning to the question of legal professional privilege, I was asked by the parties to read in unredacted form a selection of pages for which the claim had been made and to give a ruling in relation to those entries as to whether privilege had or had not been made out. Then, on the assumption that I came to the view that some of the redacted material was not properly the subject of legal professional privilege, the solicitors for the Bank of China would perform the balance of the task of redacting material. 11 There was a large area of agreement between the parties as to the appropriate test to apply. I was taken to the decision of Edelman J in Carey v Korda (2011) 85 ACSR 331 at paragraphs 64 and following in support of the proposition that a bill of costs in detailed form will ordinarily disclose, directly or indirectly, the instructions given by a client to a solicitor or counsel, thus generally attracting privilege. The question is whether the bill of costs shows the nature of the instructions or advice or its content. Basic matters in a summary of costs which would not usually be communications the subject of a claim for legal professional privilege would include the date on which the work was done, the rates charged for the work done, who did the work, the time spent on the work and the amount charged with respect to each item of work. I note that in the present case, no claim for privilege is made in respect of those matters. 12 I accept also that a broad approach is necessary in the sense that a client would not ordinarily be expected to give particular or specific instructions about each step in the course of litigation. I have assumed that what the solicitors have done in the present case is in that broad sense carry out the instructions of the client. 13 I should also say, before coming to the detail of the matter, that a submission was put on behalf of the applicants that there was an implied waiver flowing from the fact that in the applicants' counsel's submission it was the retrospective nature of the security for costs application that made this exercise necessary. I was taken to the decision of the Full Court in Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341, which is a working out of some of the implications of the well-known decision in Mann v Carnell (1999) 201 CLR 1. But I am not persuaded that the mere fact of retrospectivity means that there is any inconsistency in the sense explained in Mann v Carnell. Each case, of course, has to be decided on its facts. The facts in Rio Tinto were quite different to the present facts. In Rio Tinto, the party claiming, unsuccessfully, legal professional privilege had deployed in answering a request for particulars the material in respect of which the privilege was claimed. 14 I approach the present documents on the basis that the activity to which they refer in the ordinary case is not confidential or privileged, but that the subject-matter of the activity is privileged, unless it appears that by later events, such as the filing of an affidavit, there is no longer any confidentiality in relation to the subject-matter. Thus, in my view, the activity of "research", or "telephone call", or "attending a meeting" would not be privileged, and in the category of later events showing that if the subject-matter was privileged, it might have ceased to be privileged, I would give as examples preparing a notice of appearance, preparing a defence, preparing an affidavit of a named deponent where that affidavit had been filed. Another example would be attendance on return of a subpoena. 15 At the level of description this approach would coincide with the headings or summary of tasks provided by the Bank of China to Ms Higginbotham as referred to on pages 79 and following of Mr Hastings' affidavit which, I was told, constituted annexure 6 to the brief given to Ms Higginbotham, but broken up by reference to the individual activities which informed the summary of tasks which are referred to in that material. 16 There is force in Mr Coles' submission that at the level of activity the material would not, or might not, be in fact of any utility to the exercise referred to by the applicants' expert retained on the security for costs application. But that is not a matter which I think is appropriate to be dealt with to finality at this stage. For that reason however, I do not propose to direct immediately that the task that I have in mind should be undertaken for the entirety of the approximately 225 pages to which I have referred. 17 What I have in mind is that by reference to the first "Account Narrations for a Billing Period" in relation to the former solicitors, which is a two and a half page document, and for the first "Description" in "Details of Fees" for the present solicitors, the task of redaction should be undertaken in the manner in which I propose to give an indication. Confidential names need not be disclosed where they appear in the narration, and by "confidential names" I do not mean the person who has undertaken the activity, but where there is a confidential name referred to in the narration, and in particular, I do not require the disclosure of otherwise unknown names, particularly the names of employees or officers of the relevant client. 18 So going to the first of those documents, there is the activity which is research. I would exclude the subject matter of the activity, but in relation to that narration there is no confidentiality attaching to the name. So I would direct that only the subject matter - which is about six words - should be excluded. 19 Going to the second entry, I would exclude the subject-matter following the shortened word "including". So I would exclude the balance of that from what should be disclosed. 20 In the third entry, the activity, in my view, is the telephone call. I would not require the disclosure of the balance of that entry. 21 I cannot see any difficulty with the fourth entry. It seems to be all activity rather than subject matter. 22 The next entry, the last two words or the shortened last word should be excluded as going to the subject matter, and I think that falls into a pattern that - as I say, the subject-matter should be excluded in each case unless what has been done is something that has later become self-evident by the filing of an affidavit or the taking of some other public step in the litigation. 23 I turn from there briefly to the tab 2 exercise and for the first description, I would have thought the only subject-matter part of that would be the last three words, but unless there is some dispute about that, I would direct that the balance of that entry be disclosed. 24 The next entry, 9 April, I cannot at the moment see anything there that deals with subject-matter. 25 The next entry, 12 April, again, there is some subject-matter in there beginning with the words, I think, "on" in the fourth line and continuing into the fifth and sixth lines up to the word "with" in the penultimate line. 26 For the next entry, there are some activities there again consistently with the earlier entry for 9 April. The fourth entry which begins "reviewing" - that is the fourth entry for 12 April second occurring, may well have a subject matter in there, and I would not require the production of that material. 27 Now, the "Description" in "Details of Fees" document is, unlike the earlier one which is two and a half pages, much more extensive. It seems to be some 12 pages. So for the purposes of consistency, I would only require the exercise to be done, in the first instance, for the first three pages of that document, that is, the page that begins on 9 April 2010 and ends at the foot of the third page, on 30 April 2010. 28 I therefore direct that the limited redaction task be carried out by 5 pm today 27 March 2012 so far as the first respondent is concerned, and then the applicants' counsel will notify by 5 pm tomorrow 28 March 2012, having consulted with the expert, as to whether that limited disclosure in fact enables the expert to carry out the task that she wishes to carry out. That will take the matter to the end of Wednesday, and then I relist the matter for directions on Thursday morning 29 March 2012, but with liberty to apply on half a day's notice. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.