Div 1 of Pt 3.10
Uniform Civil Procedure Rules 2005, rr 1.2, 1.9, 21.9, 21.10, 21.11
[1999] HCA 67
Grant v Downs (1976) 135 CLR 674
[1976] HCA 63
Hancock v Rinehart [2016] NSWSC 12
Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) (1999) 1 Qd R 141
[1997] QCA 450
Re Southland Coal Pty Ltd (receivers & managers appointed) (in liq) (2006) 203 FLR 1
Source
Original judgment source is linked above.
Catchwords
Div 1 of Pt 3.10
Uniform Civil Procedure Rules 2005, rr 1.2, 1.9, 21.9, 21.10, 21.11[1999] HCA 67
Grant v Downs (1976) 135 CLR 674[1976] HCA 63
Hancock v Rinehart [2016] NSWSC 12
Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) (1999) 1 Qd R 141[1997] QCA 450
Re Southland Coal Pty Ltd (receivers & managers appointed) (in liq) (2006) 203 FLR 1
Judgment (8 paragraphs)
[1]
The Applicant Council's case
The Applicant Council's case is that the Respondent has not discharged its onus of proving that the relevant documents were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent. On the available facts, the Applicant Council contended that the Court would not conclude that the claim of privilege has been established.
In support of this claim, the Applicant Council made the following key points with respect to the available evidence.
First, the Applicant Council asserted that it is apparent from the available evidence that Mr Beveridge and Mr Connelly had an established relationship that pre-dated Mr Gough retaining Mr Connelly on 7 April 2014 (a relationship said to have begun in early 2013). Relying on the correspondence that has already been produced to it for inspection (Annexure B to the affidavit of Ms Jessica Dorricott affirmed on 21 November 2017), the Applicant Council argued that it could be inferred that Mr Beveridge and Mr Connelly had an existing (and at times informal) relationship which involved Mr Beveridge periodically seeking town planning advice from Mr Connelly.
Secondly, the Applicant Council drew the Court's attention to the following two particular sentences from Mr Connelly's evidence:
I would also provide advice to Mr Beveridge in those emails which would later be discussed with Storey & Gough. I confirm that each of the emails between myself and Mr Beveridge were for the purpose of fulfilling my retainer by Storey & Gough to provide expert advice in connection with their retainer by Reysson.
With respect to this evidence, the Applicant Council submitted that it is apparent that Mr Connelly makes a distinction between providing advice to Mr Beveridge and that advice subsequently being discussed with Storey & Gough. It was contended that it might be inferred from this distinction that Mr Connelly prepared his email correspondence to Mr Beveridge for the dominant purpose of providing town planning advice, which would not be protected by client legal privilege. The fact that the advice came to be discussed subsequently with Mr Gough cannot change this dominant purpose.
Moreover, the Applicant Council emphasised the words "in connection with their retainer". In this respect, it was submitted that "[t]he existence of a nexus between Mr Connelly's advice and Mr Gough's retainer to the respondent is insufficient to discharge the respondent's onus of showing that this was the dominant purpose of the emails".
Thirdly, the Applicant Council noted that the pattern of emails between Mr Beveridge, Mr Connelly and Mr Gough in the period 7 April 2014 to 10 July 2015 was as follows: two emails were exchanged between Mr Gough and Mr Connelly in April 2014 and, after a gap of approximately eight months, 15 emails were exchanged between Mr Connelly and Mr Beveridge in a six week period (from 6 January 2015 to 20 February 2015). The Applicant Council submitted that this pattern does not suggest that the dominant purpose of these particular emails was the provision of legal advice. Indeed, the Applicant Council reinforced this submission by noting that there is no evidence that any of these emails were ever sent to Mr Gough or contributed to a relevant report or document that was provided to Mr Gough.
Fourthly, the Applicant Council challenged the significance of the evidence of Mr Gough on the following bases.
With respect to Mr Gough's statement that the emails deal with issues which he also provided legal advice to the Respondent on, the Applicant Council submitted that this is not conclusive of the dominant purpose of the emails. It is equally plausible that Mr Connelly simply provided planning advice on the same issues that Mr Gough later provided legal advice on.
With respect to Mr Gough's statement that he was aware that Mr Connelly and Mr Beveridge would liaise for the purpose of assembling a planning background to inform his legal advice, the Applicant Council contended that this evidence does not prove what was the dominant purpose of those communications.
Furthermore, the Applicant Council submitted that Mr Gough's articulation of his own view of the dominant purpose of the emails is not significant because he is not in a position to give direct evidence on this question. It is merely an assertion of legal opinion rather than a fact which allows the Court to make its own determination.
Finally, it should also be recorded that the Applicant Council noted that it is of some significance that the Respondent did not adduce evidence from Mr Beveridge as to the purpose of the emails that he sent.
[2]
Inspection
In the course of the hearing of this Notice of Motion, an issue arose between the parties as to whether the Court could and should inspect the documents subject to the claim of privilege in the context of the decision of Brereton J in Hancock v Rinehart. The position of the Applicant Council was that the Court should inspect the documents whereas the position of the Respondent was that the Court need not inspect the documents. Nevertheless, both parties agreed that if the Court was to determine that it ought to inspect the documents, then it would be necessary to take the following path.
Given that rule 1.9 of the Procedure Rules did not initally apply to the present circumstances (see r 1.9(1)), the power of the Court to require documents to be produced for the Court's inspection under r 1.9(5)(c) was not enlivened: see Hancock v Rinehart at [30]. However, under r 21.11(1), the Court has the power to order that a party produce the relevant documents to the Court. Once such an order is made, r 1.9 becomes applicable due to r 1.9(1)(a) and, thereafter, the Court has the power under r 1.9(5)(c) to compel a party to produce the documents to the Court for inspection (in order to assist in determining the Respondent's objection to producing the documents to the Applicant Council).
In the circumstances of this case, the Court was satisfied that it was desirable for the Court to inspect the relevant documents subject to the claim of privilege. To be clear, this inspection is not for the purpose of assessing whether the documents themselves prove the facts necessary to sustain the claim of privilege; rather, the inspection will "provide a means of enabling a claim to be scrutinised and tested": Hancock v Rinehart at [31]. In this respect, the Court was also mindful of the applicability of principle (f): see Walker Corporation Pty Ltd v Director-General of the Department of Environment and Climate Change at [7].
It should also be recorded that whilst the Respondent submitted that the inspection of the documents was not necessary, it certainly did not say that it was inappropriate for the Court to inspect the documents for the purpose described above.
Hence, at the conclusion of the hearing, the Court made the necessary orders to obtain the relevant documents for inspection and to inform the Court's consideration and determination of the Notice of Motion. The Respondent immediately provided a copy of the documents to the Court at the conclusion of the hearing.
[3]
Consideration
Dr Ronald Desiatnik has observed (quoting Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) (1999) 1 Qd R 141 at 148; [1997] QCA 450) that "[t]he doctrine of legal professional privilege is an emotive one, which generates strong feelings, simply because: 'the achievement of one desirable end - that people may be free to deal privately with legal advisers - may inhibit achievement of others which are equally desirable - such as that trials, civil and criminal, may reach fair and true results'": Dr Ronald Desiatnik, Legal Professional Privilege in Australia (2nd ed 2005, LexisNexis Butterworths) at 41.
Be that as it may, the Court is charged with resolving the present dispute as to whether or not the Respondent has discharged the onus of establishing, on a sufficient evidentiary basis, that the relevant documents in dispute were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent. In order so to do, it is convenient to consider the documents in two tranches: (1) documents 5-12 and (2) documents 13-25, 28, 29 and 31-35.
[4]
Tranche 1
Having carefully considered the available evidence and competing positions of the parties, the Court is not satisfied that the Respondent has established that documents 5-12 were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent. The Court has reached this conclusion for the following reasons.
First, addressing the critical passage of the Respondent's submissions, the Court places no significant weight on the opinion of Mr Gough as to the (en globo) dominant purpose of the relevant communications. Mr Gough's opinion in this respect is not direct evidence of a fact that assists the Court to determine the claim of privilege; it is an assertion of law: see Hancock v Rinehart at [7].
In contrast, Mr Connelly's evidence as to what he understood to be the purpose of his communications is significant and entitled to weight. Yet Mr Connelly's evidence, read as a whole, is equivocal as to whether he prepared his correspondence for the dominant purpose of Mr Gough providing legal advice to the Respondent. That is, it is not clear that Mr Connelly, at the time of preparing his emails to Mr Beveridge, believed that he was preparing the emails for the dominant purpose of Mr Gough providing legal advice to the Respondent.
On the one hand, Mr Connelly says that the correspondence was prepared "in the course of assisting Storey & Gough in the provision of legal advice" and "for the purpose of fulfilling my retainer". On the other hand, there is some force to the Applicant Council's submission that an inference can be drawn from Mr Connelly's statements that he prepared his correspondence to Mr Beveridge for the dominant independent purpose of providing planning advice. If so, the fact that the correspondence was subsequently used to inform discussions with Mr Gough does not and cannot, arguably contrary to the tenor of Mr Connelly's evidence, transform the dominant purpose of the emails into that of Mr Gough providing legal advice to the Respondent.
Secondly, the Court accepts the Respondent's propositions that it is significant that: Mr Connelly was retained by Mr Gough; Mr Gough was aware that Mr Beveridge and Mr Connelly would correspond with one another regarding matters within Mr Connelly's expertise; and that the nature of the relationship between Mr Beveridge and Mr Connelly changed once Mr Connelly was retained by Mr Gough. However, these propositions are not sufficient to satisfy the Court that the relevant correspondence (documents 5-12) were prepared by Mr Connelly or Mr Beveridge for the dominant purpose of Mr Gough providing legal advice. Properly considered, these propositions only show that a purpose (not the dominant purpose) of preparing the correspondence may have been to ultimately assist in the provision of legal advice to the Respondent.
Thirdly, in circumstances where (1) Mr Connelly and Mr Beveridge had a pre-existing relationship and (2) email correspondence between the two recommenced some considerable time after Mr Connelly was retained by Mr Gough (without any significant evidence explaining why this correspondence recommenced save for the suggestion in oral submissions that the catalyst may have been Council officer inspections of the property in November 2014) - it is equally (if not more) likely that Mr Beveridge (who did not give evidence) prepared his emails to Mr Connelly for the dominant purpose of receiving planning advice with respect to the Respondent's land and that Mr Connelly prepared his replies for the dominant purpose of providing this planning advice.
As the Applicant Council submitted, this is not inconsistent with the fact that this correspondence was subsequently used for the purpose of informing legal advice. Although it is true that a document need not be sent to a lawyer for it to be prepared for the dominant purpose of providing legal advice, the Court agrees with the Applicant Council that (with respect to documents 5-12) it is significant that there is no evidence that these emails were responsive to any instruction from Mr Gough, sent to Mr Gough or contributed to any document provided to Mr Gough.
Ultimately, with respect to documents 5-12, the Court is not satisfied that there is sufficient evidence to establish that these emails were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent. In fact, on the (limited) evidence, it appears to be as likely that the dominant purpose of the preparation of these emails was to receive or provide planning advice.
Furthermore, having inspected documents 5-12 for the purpose of scrutinising the claim of privilege, the Court concludes that the content of the documents supports a determination that there is insufficient evidence that the documents were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
[5]
Tranche 2
Conversely, the Court is satisfied that the Respondent has established that documents 13-25, 28, 29 and 30-35 were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
In order to understand this conclusion, it is important to have regard to Exhibit A and the produced email of 17 February 2015 from Mr Connelly to Mr Beveridge (Affidavit of Ms Dorricott, p 15). Together, these emails reveal that, by 18 February 2015, Mr Beveridge had confirmed an appointment with Mr Gough for 23 February 2015 (possibly for the purpose of devising a strategy to respond to a letter from the Applicant Council). Given the brevity and tone of Exhibit A, it is also reasonable to infer that, up to a few days before 18 February 2015, Mr Beveridge had flagged with Mr Connelly his intention to hold a joint conference. Critically, unlike the emails comprising documents 5-12, half of the relevant emails in the schedule sent after the scheduled joint conference of 23 February 2015 involved Mr Gough. Those emails that did not were relatively close in time to an email that did include Mr Gough.
The Court is of the view that, for the second tranche of emails commencing with document 13, the balance of evidence tips in favour of the Respondent's claim that these documents were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
In all of the circumstances and on the evidence set out above, it is likely that the emails sent immediately before the joint conference was arranged and held (documents 13-17) were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent (possibly with respect to a letter sent to the Respondent by the Applicant Council). Moreover, as indicated by Mr Gough being included in many of the emails sent after the joint conference, it is likely that the immediately subsequent relevant emails were also prepared for this dominant purpose. To be sure, this is not to say that the scheduling of a joint conference and the inclusion of Mr Gough in emails is sufficient evidence alone to establish the claim of privilege. Rather, these facts are sufficient in the present circumstances to tip the balance of the broader body of relevant (albeit limited) evidence.
However, given this converse finding and the fact that the relevant factors tipping the balance are less applicable to some of the relevant documents (such as documents 33 and 34 - which are emails between Mr Connelly and Mr Beveridge temporally separated from an email with Mr Gough), it is important that the Court carefully tests the claim for privilege by reviewing the content of the relevant documents.
In undertaking this inspection, the Court is satisfied that documents 13 and 14 in the schedule have already been produced (see Affidavit of Ms Dorricott, p 15). With respect to the inspection of the abovementioned documents 33 and 34, the Court is not satisfied - having tested the claim for privilege - that those emails were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent. Rather, it is plainly apparent that these documents were not prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
Save for these exclusions, the Court is satisfied from its inspection that the claim for privilege on the balance of the documents in the second tranche is well-founded and sufficiently established.
To summarise, it follows that the Court is satisfied that the claim for privilege has been established with respect to documents 15-25, 28, 29, 31, 32 and 35. However, documents 13 and 14 are not privileged because those documents have already been produced and documents 33 and 34 are not privileged and ought to be produced.
[6]
Costs
I note that whilst the Applicant Council's motion also sought an order for costs, the Applicant Council has revised its position and agrees with the Respondent that costs should be costs in the cause. Therefore, I agree with the parties that the costs of this motion should be costs in the cause.
[7]
Orders
The Court orders that:
1. The Respondent is to produce, stayed until 12 noon 5 December 2017, to the Applicant Council documents 5 to 12, 33 and 34 listed in the schedule comprising Annexure A to the affidavit of Mr Bruce Woolf sworn 16 November 2017; and
1. The working copy of the bundle of documents referred to as Exhibit CG-1 be returned to the Respondent.
[8]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 28 November 2017
Parties
Applicant/Plaintiff:
Tweed Shire Council
Respondent/Defendant:
Reysson Pty Ltd
Cases Cited (16)
As is evident from the parts of the schedule set out above, the relevant documents subject to a claim of privilege are emails between Mr Warren Beveridge, Mr Steven Connelly and Mr Christopher Gough.
Mr Beveridge is the manager of the Respondent, Mr Connelly is the Respondent's town planner, and Mr Gough (of the firm Storey & Gough) was the former solicitor for the Respondent. In addition to the documents listed above, the Applicant Council's motion also seeks an order for production of two further emails described in Mr Woolf's affidavit as "two additional emails, one of 18 February 2015 from W. Beveridge to S. Connelly and an email of 24 March 2015 from S. Connelly to W. Beveridge".
However, documents 26 and 27 and the two additional emails described above have now been produced (the email of 18 February 2015 was tendered as Exhibit A and indicated that an appointment between Mr Beveridge, Mr Connelly and Mr Gough was made for 23 February 2015). Hence, the documents which the Applicant Council seeks production of and remain subject to a disputed claim of privilege are documents 5-25, 28, 29 and 31-35.
I observe, as I did during the Court hearing, that documents 26, 27 and the two additional emails (one of which became Exhibit A) are clearly uninformative and of no material relevance to the substantive proceedings. I make that observation in the context of my adoption in City of Ryde Council v Principal Healthcare Finance Pty Ltd [2017] NSWLEC 126 of the applicable principles regarding notices to produce; in particular, that such documents serve no legitimate forensic purpose and that it is clearly not "on the cards" that they will materially assist the case of the party seeking production.
As I said at the hearing of this motion, I again stress that those documents are simply "dross" which should never have been sought, produced, copied and then allowed to clog up litigation files. Legal practitioners must be ever vigilant to ensure that unnecessary and over-zealous exercises pursuing production - in essence fishing exercises - do not occur. When notices to produce are drafted in broad undiscerning terms, such as in this case seeking "all documents recording communications" over a four year period between the Respondent and their planners, a likelihood of falling foul of the principles arises.
The competing positions of the Applicant Council and the Respondent with respect to the Notice of Motion before the Court can be shortly stated. The Applicant Council contends that the Respondent has not discharged its onus of proving that documents 5-25, 28, 29 and 31-35 were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
Conversely, the Respondent contends that the relevant evidence which it relies on establishes that those documents were prepared for the dominant purpose of Mr Gough providing legal advice to the Respondent.
It should be noted that the parties agree that this issue - whether or not the Respondent has discharged its onus of establishing that those documents were prepared for the above mentioned dominant purpose - is the only issue for the Court to consider.
In order for the Court to resolve this dispute (as to whether or not the relevant documents are privileged and, therefore, need to be produced to the Applicant Council), it is convenient to first: briefly set out the relevant statutory framework and legal principles; outline the evidence that the parties rely upon in support of their positions; and explain why, at the hearing, the Court made orders to allow it to inspect the relevant documents subject to the claim of privilege.
The Evidence Act 1995
Given the interrelationship between the Procedure Rules and the Evidence Act 1995 created by the definition of "privileged information" under the former, it is necessary to set out, relevantly, s 118 of the latter (which falls within the Division concerning client legal privilege).
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.
It is also convenient to note here that, unlike Environment Protection Authority v Grafil Pty Ltd [2017] NSWLEC 88, this is not a case where the person objecting to the production of documents was not the person required to produce the documents. The Notice to Produce here required the Respondent to produce the relevant documents.
Legal principles
As the parties agreed, the party claiming the privilege bears the onus of establishing the basis of the claim and, therefore, the facts from which the Court can determine whether or not the documents are privileged: see, eg, Grant v Downs (1976) 135 CLR 674 at 689; [1976] HCA 63 and Re Southland Coal Pty Ltd (receivers & managers appointed) (in liq) (2006) 203 FLR 1; [2006] NSWSC 899.
As the parties also agreed, the relevant principles applying to the determination of a claim of client legal privilege include those distilled by Biscoe J in Walker Corporation Pty Ltd v Director-General of the Department of Environment and Climate Change [2009] NSWLEC 138 at [7]:
(a) the onus is on the party claiming privilege to show that the documents for which privilege is claimed are privileged: Grant v Downs (1976) 135 CLR 674 at 689; Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] NSWLEC 247, 161 LGERA 86;
(b) the dominant purpose must exist at the time the document is brought into existence: Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380 at [19] per McDougall J. This point did not arise on the unsuccessful appeal: Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [9];
(c) dominant purpose is a question of fact: Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; Walker at [91]; Sydney Airports Corporation Ltd at [7]. Dominant purpose must be determined objectively having regard to all the circumstances, but the subjective intention of the author and of the person or authority under whose direction the document was prepared is entitled to weight;
…
(e) the Court of Appeal has approved the test of "dominant" purpose as clear paramountcy, or as the ruling, prevailing or most influential purpose; yet has observed that a purpose may not be dominant even if it is greater than another purpose or is the most important purpose: Sydney Airports Corporation Ltd at [7], [49] per Spigelman CJ (Sheller JA and M W Campbell AJA agreeing). It has been commented that it is somewhat difficult to reconcile the observation in that case that the most important purpose does not necessarily mean the dominant purpose with the proposition earlier adopted that dominant purpose indicates the most influential purpose: Odgers, Uniform Evidence Law, (8th ed, 2009) 565 fn 72.
(f) the Court has power to examine documents in cases where there is a disputed claim, and it should not be hesitant to exercise such a power: Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at [52], Walker at [15].
…
However, with respect to principle (f), it is important to understand this principle in light of the decision of Brereton J in Hancock v Rinehart [2016] NSWSC 12. In particular, it is important to recognise that the power of the Court to require documents to be produced for its inspection (such as the power found in r 1.9(5)(c)) "exists not to facilitate proof by a claimant of the facts required to sustain the claim, but to provide a means of enabling a claim to be scrutinised and tested": at [31].
Finally, as was emphasised by the Respondent, it is not necessary for a lawyer to be a party to the relevant communications for those communications to be for the dominant purpose of a lawyer providing legal advice: citing Walker Corporation Pty Ltd v Director-General of the Department of Environment and Climate Change at [12], [13], [23] and [29].