THE STATE OF SOUTH AUSTRALIA (RESPONDENT) and SOUTH AUSTRALIAN ASSET... [1995] SASC 5055 | Case summary | Zoe

SASASC

THE STATE OF SOUTH AUSTRALIA (RESPONDENT) and SOUTH AUSTRALIAN ASSET MANAGEMENT CORPORATION (APPELLANT) v LEWIS BARRETT, DAVID WINSTON SIMMONS, ROBERT DAVID EAVESTAFF BAKEWELL, MOLLY VERONICA BYRNE, WILLIAM FIELD NANKIVELL, ROBERT PHILIP SEARCY AND ANTHONY GILBERT SUMMERS, TIMOTHY MARCUS CLARK, FAI GENERAL INSURANCE COMPANY LIMITED, RODNEY EDWARD HARTLEY AND EDMUND CHRISTOPHER JOSEPH JOHNSON and KEVIN LAURIE COPLEY No. SCGRG 94/456 Judgment No. 5055 Number of pages - 14 Evidence - documentary evidence

[1995] SASC 5055

Supreme Court of SA|1995-04-27|Before: Perry J, Cox J, Olsson J

View original source

At a glance

Source facts

Court

Supreme Court of SA

Decision date

1995-04-27

Before

Perry J, Cox J, Olsson J

Source

Original judgment source is linked above.

Judgment (4 paragraphs)

[21]

The application of all of the principles discussed does not lead to the conclusion that the legal professional privilege does not apply against the first eight respondents. They are no longer directors of the Bank. Their interests are adverse to those of the Bank. Their purpose in seeing the documents is not to serve the interests of the Bank or to enable the discharge of their duties as directors but to serve their own interests in the litigation.

[22]

Assuming that the privilege did not apply against them when they were directors of the Bank, it does not follow that it could never apply against them. In my view once they ceased to be directors and no longer had the right of inspection, they were placed in the same position as any other person outside the Bank and the privilege applied against them. There is no reason in principle or logic to conclude that the situation which existed when the documents came into existence must remain forever. The appropriate time to consider whether the privilege extends to relevant persons is when it is claimed.

[23]

Parties

Applicant/Plaintiff:

THE STATE OF SOUTH AUSTRALIA (RESPONDENT) and SOUTH AUSTRALIAN ASSET MANAGEMENT CORPORATION (APPELLANT)

Respondent/Defendant:

LEWIS BARRETT, DAVID WINSTON SIMMONS, ROBERT DAVID EAVESTAFF BAKEWELL, MOLLY VERONICA BYRNE, WILLIAM FIELD NANKIVELL, ROBERT PHILIP SEARCY AND ANTHONY GILBERT SUMMERS, TIMOTHY MARCUS CLARK, FAI GENERAL INSURANCE COMPANY LIMITED, RODNEY EDWARD HARTLEY AND EDMUND CHRISTOPHER JOSEPH JOHNSON and KEVIN LAURIE COPLEY No. SCGRG 94/456 Judgment No. 5055 Number of pages - 14 Evidence - documentary evidence

Legislation Cited (2)

State Bank of South Australia Act 1983

Cases Cited (15)

THE STATE OF SOUTH AUSTRALIA (RESPONDENT) and SOUTH AUSTRALIAN ASSET MANAGEMENT CORPORATION (APPELLANT) v LEWIS BARRETT, DAVID WINSTON SIMMONS, ROBERT DAVID EAVESTAFF BAKEWELL, MOLLY VERONICA BYRNE, WILLIAM FIELD NANKIVELL, ROBERT PHILIP SEARCY AND ANTHONY GILBERT SUMMERS, TIMOTHY MARCUS CLARK, FAI GENERAL INSURANCE COMPANY LIMITED, RODNEY EDWARD HARTLEY AND EDMUND CHRISTOPHER JOSEPH JOHNSON and KEVIN LAURIE COPLEY No. SCGRG 94/456 Judgment No. 5055 Number of pages - 14 Evidence - documentary evidence (1995) 13 ACLC 1369 (1995) 64 SASR 73 [1995] SASC 5055 (27 April 1995)

That dictum was expressly accepted by the High Court in Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 at 128.

No difficulty has been found by the Courts in adopting such an approach whilst, at the same time, recognising the so-called "Tesco" principle that a corporation must, of necessity, act through its officers, for which it is directly, and not merely vicariously, liable. (See discussion on this point in Hamilton v Whitehead (supra) at 127.) Given that situation, it is clear that, nevertheless, a single person may function in dual capacities (Lee v Lee's Air Farming Ltd (1961) AC 12 at 26). Such a concept lies at the heart of the reasoning of von Doussa J in Beach Petroleum NL and Anor v Johnson and Ors [1993] FCA 283; (1993) 115 ALR 411 at 568.

The above processes of reasoning derive support from the analysis by Beaumont J of the relevant authorities, as expressed in his judgment in Molomby v Whitehead and Australian Broadcasting Corporation [1985] FCA 421; (1985) 63 ALR 282 at 292-3 and, by analogy, from the reasoning of Lord Brightman in Birmingham City District Council v O and Anor (1983) AC 578 at 593.

First, he contended that, where privilege exists, it arises at the point of bringing the relevant document into existence (Grant v Downs [1976] HCA 63; (1976) 135 CLR 674; and that in the instant case, the circumstances which gave rise to the creation of the documents brought about what was, in effect, a joint privilege in favour of both the Bank and the personal respondents. This was because the documents were raised in the common interest of both, in the sense in which that expression was used in Woodhouse and Co (Limited) v Woodhouse (1914) 30 TLR 559 at 560. He also referred to the reasoning of Chitty J in Gouraud v The Edison Gower Bell Telephone Company of Europe (1888) 57 Ch 498 at 499-500 in that regard.

It is appropriate to mention one matter of detail with respect to the appellant's causes of action. It is alleged that on 24th March 1988, the Board resolved to approve the acquisition of the shares for $60m subject to various terms and conditions, one of which was the "preparation of a legal agreement acceptable to our advisers". It is further alleged that the agreement in writing for the acquisition of the shares was executed by a person acting on behalf of the Bank on 31st March 1988 in accordance with this resolution. We were told by Mr Martin QC that the appellants have waived the privilege with respect to all documents which relate to that matter in accordance with principles of fairness discussed in Attorney-General for the Northern Territory v Maurice and Ors [1986] HCA 80; (1986) 161 CLR 475.

It seems clear that the learned Judge accepted the contention that the directors of the Bank and the Bank were, in effect, one and the same at the time the documents came into existence and as the privilege arose at that time, it could not extend to them. This approach does not accord with relevant principle. The directors of the Bank and the Bank are not one and the same. A corporation is a legal entity separate and distinct from its members and officers: Salomon v Salomon and Company Limited [1896] UKHL 1; (1897) AC 22, Lee v Lee's Air Farming Ltd (1961) AC 12, R v Goodall (1975) 11 SASR 94 and Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121. The privilege is that of the Bank and not of the directors of the Bank as individuals.

(1995) 64 SASR 73

(1975) 11 SASR 94

(1988) 166 CLR 121

(1993) 115 ALR 411

(1985) 63 ALR 282

(1976) 135 CLR 674

(1986) 161 CLR 475

(1990) 115 ALR 411