Should the orders sought be made?
20Mr Cotman submitted that the orders sought in the notice of motion should be made essentially for two reasons. First, he submitted that it is apparent from several of the documents that were produced in an unredacted form (as a consequence of the error referred to earlier) that privilege had not been properly claimed in relation to those documents or the redacted parts. Documents 64, 193 and 361 fall within that category. Mr Cotman also referred in written submissions to other unredacted versions of documents. However, those documents were not within one of the classes in respect of which I directed the Bank to provide additional information. Mr Cotman saw those documents as a result of what is now accepted to be an error. In those circumstances, I have not considered the submissions in relation to those documents. Second, Mr Cotman submitted that the additional information given in Mr Hocking's affidavit was still inadequate to justify a claim for privilege.
21It is convenient to deal first with the documents that Mr Cotman submits that, on inspection, are not privileged.
22Document 64 consists of a series of emails concerned with the drafting of a section of a standard form letter to be given to potential franchisees of the Bank. The relevant section concerns IT services to be provided by the Bank. In the first email in the chain, Ms Bayles, a corporate solicitor with the Bank who also served on the committee of the Bank responsible for overseeing the Bank's expansion interstate, sets out the proposed text of the section and asks various employees of the Bank whether they have any comments. She also draws attention to some text that Mr Young, the Head of Technology, wanted to include in the letter and observes that the text is "contrary to our discussions in the OMB Expansion Team Meeting". Ms Bayles also asks in her email "Who has the final say? IT or us..." In the last email in the chain, Mr Young gives instructions on what he wants done. Mr Cotman submits that the email chain is a commercial discussion between members of the interstate expansion team on what should be included in the letter and for that reason is not privileged. I do not accept that submission. In my opinion, the dominant purpose of the chain was to obtain or to give instructions on what should be included in the letter so that Ms Bayles could finalise its drafting. In drafting the letter, Ms Bayles was acting as a lawyer.
23Document 193 is a series of emails. In the first of the series, Mr Davies asks Mr Cornish whether "we can move forward with all parties on Hurstville". The last contains a response to that question from Mr Cornish in which Mr Cornish reports on a conversation he had with a solicitor from HWLE. Privilege is only claimed over that email. Mr Cotman submits that that email is not privileged because it does not itself reveal legal advice obtained from HWLE. He submitted that the case was analogous to those that have held that memoranda of fees are not privileged: see, for example, Lake Cumbeline Pty Limited v Effem Foods Pty Limited [1994] FCA 1479. In that case Tamberlin J said at [58]:
In the present case, I have perused the memoranda of costs which have been provided by the applicants and I do not consider that they disclose the nature or content of privileged material. I do not therefore consider that it can be said that disclosure of and reliance upon these memoranda amounts to a use of, or partial disclosure of, legally privileged material ...
However, I do not accept the analogy. Section 118 of the Evidence Act 1995 (NSW) provides:
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 communication between the Bank and HWLE concerning progress that HWLE had made in carrying out instructions that had been given to them was clearly a confidential communication between a client and lawyer. It had no other purpose than HWLE providing legal advice to the Bank. The fact that the advice itself was not given in the communication does not mean that the communication did not occur for the purpose of HWLE providing legal advice.
24The position in Lake Cumbeline was different. The question in that case was whether the memoranda of fees were brought into existence for the sole purpose of giving legal advice (as the test for privilege then was). Tamberlin J held that they were not because they were brought into existence for the purpose of recording and raising charges. Moreover, they did not disclose the nature or content of other communications and consequently were not privileged for that reason. Here, however, the internal communications within the Bank do disclose the nature and content of the communication with HWLE and, for the reason I have given, that communication was privileged. Consequently, the internal communication itself is privileged.
25Document 361 is a handwritten note recording a telephone conference with Mr Gill and someone referred to as "Stuey" or possibly "Stacey" or some other name. The note records three points. The first relates to Hamilton; the second to Tuggeranong; and the third to Toronto, each franchises of the Bank at the time. Only the first two notes were redacted. Mr Hocking gave evidence that he originally thought that the note recorded a conversation with Stacey Hester, who was a lawyer with the Bank, and he inferred that they recorded legal advice because he knew that there were issues with those two branches at the time. He now concedes that he cannot be certain that the note records a conversation with Ms Hester, and for that reason the claim for privilege is no longer maintained.
26It is worth observing, however, that privilege was never claimed in respect of the item concerning Toronto, which is one of the franchises in issue in this case, and that the notes recorded in relation to Hamilton and Tuggeranong are irrelevant to any issue in the case.
27The balance of the documents fall into a number of categories.
28First, there are documents that were originally described as letters between parties neither of whom were lawyers. Those letters were in fact drafts which Mr Hocking says in his affidavit were prepared for the dominant purpose of legal advice. Documents 1 to 3, 5, 8, 9, 11, 15 to 19 and 33 fall into that category.
29Second, there are documents which contain handwritten notes "by" or "of" or "to" "lawyers in the litigation" and privilege is claimed over those notes. Documents 4, 6, 7, 10, 13, 14, 21, 22, 23, 27, 29, 34, 308, 350, 362 and 522 fall into that category.
30Third, in some cases two emails have been scanned together and have been described as a single email. In others, the document consists of an email chain. The chain is referred to as a single document and that document is described by reference to only one of the emails in the chain. Privilege is not claimed in relation to all emails in the chain. Document 12 is an example. It consists of two emails. One is an email from Mr Xu to the Bank. The other is an internal email from Ms Clegg to Mr Allsopp which is said by Mr Hocking to be for the dominant purpose of legal advice. Document 30 is another example, that document is described as an email from Mr Heckenberg to Ms McMahon, a corporate solicitor. Some emails passing between Mr Heckenberg and Ms McMahon are said to be privileged because they are communications for the dominant purpose of legal advice. A third example is document 58. That document is an email chain which includes an email from Mr Teitzel to Ms Bayles as corporate solicitor which Mr Hocking says forwards the described email for the dominant purpose of obtaining legal advice. Documents that raise similar issues are documents 20, 24, 25, 31 and 102.
31Fourth, privilege is claimed over the handwritten notes on some documents on the ground that they are notes of "the Bank's Lawyers for the dominant purpose of legal advice". Documents 26 and 28 fall into this category.
32Fifth, privilege is claimed over some communications because they repeat legal advice from the Bank's external lawyers or the Bank's internal lawyers. Documents 35, 36, 38, 39, 40, 53 and 280 fall, in whole or in part, into this category.
33Sixth, there are a number of communications to or from B Edwards, General Counsel, Ms Bayles or Ms Hester, Manager Legal, that are said to be for the purpose of giving legal advice or documents prepared by them for the purpose of giving legal advice. Documents falling into this category are documents 53, 280, 348, 365, 559, 563, 564, 584, 690, 693 and 701.
34Seventh, there are a number of miscellaneous documents. Document 41 is one. That is simply described as an email chain for the dominant purpose of legal advice. Document 99 is similar. It is an email chain. Privilege is claimed over emails in the chain from Mr Rodriguez, the Head of Asset Management, on the ground that they are communications in contemplation of litigation. Documents 46, 106 and 522 were incorrectly described in the list. Document 46 is said to be privileged because it repeats legal advice, although it does not identify who gave the advice. Document 106 is actually an email from Ms Bayles to Mr Allsopp which is said to be for the dominant purpose of legal advice. Document 522 is not actually a bill but is said to be a document prepared for the purposes of invoicing the Bank that discloses legal advice and contains handwritten notes of the lawyers in the litigation. Document 47 is an email chain emanating from K Bird, a paralegal employed by the Bank, which is said to repeat legal advice and to be for the dominant purpose of legal advice. Document 77 is said to be an email from a paralegal employed by the Bank for the dominant purpose of legal advice and in contemplation of litigation.
35Mr Cotman makes two main submissions in relation to these documents. First, he submits that the descriptions of the documents are inadequate to understand properly the claim for privilege that has been made. Second, in relation to the documents said to be communications to or from in-house lawyers for the purposes of obtaining legal advice, he submits that the relevant lawyers performed both legal and commercial functions with the Bank and it is not possible from the description of the documents to determine in what capacity the lawyers were acting when sending, preparing or receiving the relevant documents.
36There is considerable force in what Mr Cotman says in relation to at least some of the documents. For example, the descriptions in relation to a number of documents do not identify who prepared the document or gave the advice in respect of which privilege is claimed. The documents referred to in paragraphs 28 and 32 above contain examples. In those circumstances, I asked to inspect 31 of the 65 documents in question. Mr Couper QC, who appeared for the Bank, informed me that two of those documents were the same. In addition, he informed me that he had inspected document 690 himself, that he was satisfied that there was a proper basis for the claim for privilege and that I may be embarrassed if I inspected the document and concluded that it was privileged. The only question in relation to that document is whether Ms Bayles in sending it was acting as a lawyer. Having regard to Mr Hocking's affidavit and what Mr Couper said, I chose not to look at that document. I am satisfied on the basis of what I have been told that Ms Bayles was acting as a lawyer when sending that email. Finally, the Bank was unable to produce unredacted versions of documents 20, 24 and 25. Parts of those documents were redacted for privilege in other proceedings. The originals cannot be found and only the redacted versions are still available. Each of the three documents is an email to the Bank's lawyers and privilege is claimed on the basis that the communication was for the dominant purpose of obtaining legal advice. On the face of it, claim for privilege appears to be a proper one.
37The result is that I inspected 26 documents. I did not inspect documents referred to in paragraphs 28, 29 and 31 above. Although some of those documents are inadequately described, in my opinion it is not necessary to inspect the documents to be satisfied of the claims for privilege. The documents referred to in paragraph 28 are described as drafts. Mr Hocking says that they were prepared for the dominant purpose of providing legal advice. There is no reason to doubt what he says. The same can be said of the documents referred to in paragraph 31 above.
38The documents referred to in paragraph 29 above are notes of lawyers or notes to lawyers in the litigation. Mr Hocking does not say for what purpose the notes were prepared. However, it can be inferred that they were prepared for the dominant purpose of the Bank being provided with professional legal services in connection with these proceedings. On that basis, they are privileged under s 119 of the Evidence Act, which provides:
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 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 prepared;
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.
39With four possible exceptions, I am satisfied that the remaining documents are properly the subject of a claim for privilege. In particular, where a claim for privilege is made in relation to a communication to or from a corporate lawyer, I am satisfied that the lawyer was acting as a lawyer for the purpose of sending or receiving the communication.
40The first exception is document 35. That is an email from Mr Edwards to Ms Quinn among others which is said to repeat legal advice. The email relevantly says:
Just thinking more about the Ross debacle - I think we should definitely stand strong on our previous advise [sic] and action as we stated on the 4pm deadline of yesterday. Sole reason is we do not want him to be controlling the situation. If we don't, and delay further, it will be placing the control back with him.
The reply to be along the lines that he has not meet [sic] our requests and we will action as previously advised.
In my opinion, this email does not repeat legal advice that the Bank should "stand strong". The reference to "advise" is a reference to the Bank's previous stated position to Mr Chapman. Mr Edwards is expressing a commercial opinion on how best to deal with Mr Chapman in the circumstances.
41The second exception is document 99. That is an email chain to and from Mr Rodriguez, the person responsible for the recovery of debts, which is said to be in contemplation of litigation. As Mr Couper points out, the communications do not have to be to or from a lawyer in order to attract the privilege conferred by s 119 of the Evidence Act. However, the communications must be for the dominant purpose of the client being provided with professional legal services in relation to anticipated or actual proceedings. It is clear, however, that the communications in question are concerned with what provision must be made in the Bank's accounts following termination of the Bankstown franchise. That is made clear by Mr Rodriguez's email dated 25 August 2008 in which he says:
To enable us to determine if a provision is required or not, can you please advise if this OMB was terminated with Compensation or not and what the value of the branch is estimated to be.
42The third possible exception is document 522. That is a draft account which contains a description of the work covered by the account. The work relates to reading and replying to correspondence from the OMB Parties' lawyers. In my opinion, the claim for privilege in relation to this document is marginal. Although the bill contains a description of the work that was done, the information that it reveals is that HWLE did work in responding to a letter from McCabe Terrill. The response itself, however, reveals that that work was done. But even if the document is not privileged, in my opinion it is clearly not discoverable. I do not see how it could be relevant to a fact in issue in these proceedings in the sense required by UCPR r 21.1(2).
43The fourth possible exception is document 584. That is an email from Ms Barker, who is apparently a paralegal employed by the Bank, by which Ms Barker sends to various people at Ms Bayles' request a document the subject of which is described as "NSW Labour Council - NSW Government MOU". It is not possible from inspecting the document to know whether it was sent at Ms Bayles' request for the purpose of Ms Bayles giving legal advice. Once again, however, it is difficult to understand how the email could be relevant to a fact in issue in these proceedings.
44It is clear from what I have said that the list of 1061 privileged documents did not comply with UCPR r 21.4 because it did not adequately set out the facts relied on in support of the claim for privilege. Mr Hocking's affidavit does not completely cure the defects in relation to the 65 documents it deals with. In some cases, the documents are not adequately described, and where privilege is claimed on the basis that the communication is for the dominant purpose of providing legal advice, it is not clear who it is said provided the advice. In addition, it would have been preferable if the basis for the claims corresponded more precisely to the grounds of privilege set out in ss 118 and 119 of the Evidence Act. However, in my opinion, the evidence given by Mr Hocking demonstrates that the Bank has gone about the task of giving discovery diligently. Moreover, there is nothing to suggest that Mr Hocking has misunderstood the appropriate tests for privilege. As I have said, privilege was claimed over five documents where the claim could not be maintained (and in one case was abandoned), or might be regarded as marginal or, in the case of one document, where it is not possible to determine the claim from inspection of the document. However, as I have also said, some of those documents were clearly not discoverable and there is a question, having regard to their subject matter and what they say, whether any of them were.
45It would take a substantial amount of time to redo the list. That conclusion is borne out by the time it has taken me to consider the 26 documents I have inspected. The sample I have considered has not revealed any serious errors in the approach that the Bank has taken. Indeed, if the sample is representative, as is likely, it reveals that a substantial number of the documents were not discoverable in the first place. Certainly, none of the documents I have inspected take the case any further. The only reason for ordering that the list be redone is on the off-chance that a claim for privilege has been made in respect of a significant document which cannot be maintained. That chance does not justify either of the orders the OMB Parties seek.