ACN 105 753 731 Pty Ltd v Cameron
[2009] VCC 637
•9 June 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL – GENERAL DIVISION
Case No. CI-08-05016
| ACN 105 753 731 PTY LTD | Plaintiff |
| (ACN 105 753 731) | |
| and | |
| DOUGLAS GORDON CAMERON AND OTHERS | Defendants |
| (According to the Schedule attached hereto) | |
| AND BETWEEN | |
| DOUGLAS GORDON CAMERON AND OTHERS | Plaintiffs by Counterclaim |
| (According to the Schedule attached hereto) | |
| and | |
| ACN 105 753 731 PTY LTD | Defendants by Counterclaim |
| (ACN 105 753 731) AND ANOTHER (According to the Schedule attached hereto) |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 26 May 2009 |
| DATE OF RULING: | 9 June 2009 |
| CASE MAY BE CITED AS: | ACN 105 753 731 Pty Ltd v Cameron and Ors |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 0637 |
RULING
Catchwords: LEGAL PROFESSIONAL PRIVILEGE – discovery of documents in an Affidavit of Documents relevant to a conveyancing file – documents removed from the conveyancing file – documents said to privileged from disclosure on the basis of legal professional privilege – question whether legal professional privilege waived – discovery of documents referred to in the plaintiff's Statement of Claim – whether discoverable – whether the documents related to a question to be determined in the proceeding: Order 29
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R Moore | McNab McNab & Starke |
| For the Defendants | Mr G Dalton | Mahonys |
| HIS HONOUR: |
Introduction
1 Before the Court are two Summonses, both filed 21 May 2009, which seek orders relevant, among other orders sought, to discovery and inspection of documents which the parties require of each other.
2 The principal proceeding and the counterclaim essentially revolve around a transaction entered into which resulted in the defendants selling land, being Lots 4, 5, 6 and 7 on Plan of Subdivision number 55514, being the whole of the land comprised in Certificate of Title Volume 8420 Folios 551, 552, 553 and 554 to the plaintiff by a Contract of Sale of real estate dated 20 March 2008 (“the land”).
3 The plaintiff alleges that it discovered that there were significant restrictions on the use of the land which resulted in a meeting between the relevant parties representing the plaintiff and the defendants, at which time the plaintiff alleges that the parties mutually agreed to avoid and/or terminate the contractual obligations under the Contract of Sale (“the termination agreement”)
4 The plaintiff further alleges that acting in reliance on the termination agreement, Somerton Rise Pty Ltd sold it Lot 1, 208 Hume Highway, Somerton (“the Somerton property”).
5 The plaintiff claims a return of its partial deposit of $150,000 presently held by the defendants.
6 By the Defence and Counterclaim, the defendants deny the allegations made by the plaintiff and seek specific performance of the Contract of Sale and of a Deed of Guarantee dated 20 March 2008 alleged to have been executed by Doogalook Mining Pty Ltd.
7 The foregoing is sufficient to identify the nature of the principal proceeding and to provide the basic background to the relief sought in the Summonses.
The Plaintiff's Summons
8 The plaintiff filed an Amended Summons seeking an order pursuant to Rule 29.11 of County Court Civil Procedure Rules 2008 that the defendants provide for inspection all of the documents contained in Schedule 1 of the defendants’ Supplementary Affidavit of Documents sworn 19 May 2009.
9 Mr Douglas Gordon Cameron, the first defendant, swore an Affidavit of Documents on 23 March 2009 and a Supplementary Affidavit of Documents on 21 April 2009.
10 The call for inspection made by the plaintiff arises from the discovery of a conveyancing file by the first defendant.
11 The Supplementary Affidavit of Documents is divided into Schedule 1 and Schedule 2. Schedule 1 is described in the body of the affidavit in paragraph 4 as follows:
"We have in our possession, custody or power the documents relating to
the question to this proceeding in new narrated Schedule 1."
12 The relevant documents discovered in Part 1 of Schedule 1 are described as follows:
"Documents contained in the conveyancing file regarding 8-32 Patullos
Lane, Craigieburn."
13 No specific claim for privilege was taken, save for paragraph 5, which is as follows:
"The documents enumerated in Part 2 of Schedule 1 are privileged and we object to producing them. The documents are privileged on the ground that they were brought into existence for the dominant purpose of, and in connection with, the conduct of this litigation once commenced or reasonably anticipated and/or constitute a professional communication between us and our solicitors."
14 Part 2 does not specify any documents to which privilege attaches, but rather is drafted in the broadest of terms as follows:
"Brief notes, memoranda, correspondence, advice, reports and other documents made or obtained by us, and our servants and agents, and our legal advisers for the purpose of obtaining and giving legal advice and for the dominant purpose of, and in connection with, the conduct of this litigation once commenced or reasonably anticipated."
15 As a direct result of the plaintiff requiring inspection of the conveyancing file, the first defendant swore a Further Supplementary Affidavit of Documents on 19 May 2009 specifying 33 documents which he says are privileged.
16 Ms Daria Dagher, solicitor for the plaintiff, swore an affidavit on 21 May 2009 in which she describes how the issue came to a head. Mr Skeels, solicitor for the plaintiff, took inspection of the conveyancing file. In the course of that inspection it became apparent to him that documents had been removed from the conveyancing file. Mr Skeels raised that with a solicitor in the employ of Mahonys who informed him that documents had indeed been removed by Mr Field on counsel's advice because they were privileged.
17 Mr Moore of counsel submitted that the failure of the first defendant to state that privilege attached to any of the documents in the conveyancing file in the Supplementary Affidavit of Documents must result in the plaintiff being entitled to inspection of all of the documents in the conveyancing file.
18 Mr Dalton submitted that the structure of the Supplementary Affidavit of Documents is adequate to establish that privilege attaches to documents within the conveyancing file and that practice dictates that when inspection is required that it is open to the party which produces an affidavit of documents to then more specifically identify the documents to which privilege attaches.
19 Mr Field, solicitor for the defendants, swore an affidavit on 25 May 2009 in which he refers to the conveyancing file. He swore that it contains confidential communications passing between himself the defendants and their estate agent.
The Authorities
20 Mr Moore referred me to Meltend Pty Ltd & Ors v Restoration Clinics of Australia Pty Ltd & Ors.[1] The relevant facts are that the applicant's solicitor took inspection of documents which included a letter. Subsequently, the solicitor taking inspection requested a copy of the document. Her request was denied. In correspondence the solicitors who provided inspection said the letter was privileged and that it had been inspected by mistake.
[1] (1997) 145 ALR 391
21 Goldberg J reviewed a number of authorities which led him to state the following conclusion:
“The conclusion I have reached is consistent with the obligations which are undertaken by parties and their legal advisers in relation to discovery. The obligation is on the party giving discovery to determine what documents are discoverable and what documents are able to be inspected. Any claim for legal professional privilege should be taken at the time an affidavit or list in relation to discovery is filed. A party seeking inspection should be entitled to assume that the discovering party has carried out the process of discovery properly and in accordance with relevant principles. Otherwise parties will be placed in difficult situations if documents can be withdrawn from inspection after an initial inspection with the result that there is an inability to use information properly obtained on discovery. If parties are to be able to change their mind about the privilege attaching to a document after it has been inspected the process of discovery has the potential to become unworkable. In the absence of obvious mistake apparent to an inspecting party and fraud I consider that the appropriate principle to apply is that once inspection has been allowed of a document listed in that part of an affidavit or list in which privilege from inspection is not claimed, any privilege attaching to that document is to be regarded as waived by being included in that part of the affidavit or list and by being made available for inspection.”[2]
[2] at 406
22 Mr Moore submitted that the ruling made by Goldberg J was not limited to situations where there was an inadvertent or mistaken discovery of a document, together with disclosure of its contents. He submitted that discovery of the document in an affidavit of documents was sufficient to require the defendants to provide inspection of it.
23 Mr Dalton submitted that what distinguishes the present case from what Goldberg J was dealing with in Meltend was the that the documents which had been removed from the conveyancing file had not been inspected by Mr Skeels, whereas in Meltend the controversial letter had been inspected and the solicitor who inspected it had made notes of her inspection of it.
24 Goldberg J specifically dealt with the question of fairness. His Honour said:
“… But once documents have been disclosed to an opposite party as part of the formal process of discovery and inspection, in circumstances involving no criticism of that party, I consider that fairness requires that that party be not disadvantaged in the use it can make of those documents.”[3]
[3] at 403
25 I reject Mr Moore's submission. It seems to me that what underwrites the ruling made by Goldberg J is not just the discovery of the document, but a lack of fairness if the party to whom it is disclosed by inspection is then not able to use it.
26 In this instance, the conveyancing file has been discovered, but the documents to which privilege attaches have not been inspected.
27 Mr Moore also referred me to Spedley Securities Ltd (in liq) v Bank of New Zealand[4] and Body Corporate No 413424R v Sheppard.[5] Neither of these authorities stand for a different proposition to that enunciated by Goldberg J. [6]
[4] (1991) 26 NSWLR 711, per Cole J at 730
[5] [2007] VSC 179, per Pagone J who cited Meltend with approval
[6] I was also referred to Attorney-General (NT) v Maurice (1986) 161 CLR 475 (cited with approval by Goldberg J and Cole J); State of Victoria v Davies (2003) 6 VR 245 and GT Corp Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123, none of which derogate from the ruling made by Goldberg J, and indeed, stand for the same proposition
28 The fact that the documents enumerated in the further supplementary affidavit of documents to which privilege is said to attach have not been inspected by the plaintiff, does not support a submission that privilege has been waived.[7]
[7] An affidavit of documents drafted in the form of the supplementary affidavit of documents is contrary to what is required by O29.04
The Defendants’ Summons
29 The defendants’ Summons seeks discovery of each of the documents and the classes of documents referred to in the letter of Mahonys dated 20 March 2009 to McNab McNab & Starke.
30 On page 2 of the letter, a request was made in eight numbered paragraphs which, among other things, referred to documents which the defendants require the plaintiff to discover, including documents relevant to the Somerton property.
31 The plaintiff agreed to make discovery of all of the documents, save for those relating to the Somerton property.
32 Mr Field swore an affidavit on 21 May 2009 deposing to a number of matters, including the failure of the plaintiff to discover the documents which the plaintiff has agreed to discover.
33 Mr Field makes passing reference to the objection made by the plaintiff to discover any documents relevant to the Somerton property, but does not depose to any matters suggesting on what basis the documents relevant to the Somerton property are discoverable.
34 In paragraph 20 of the Statement of Claim, reference is made to the Somerton property in the context of it being the property which the plaintiff purchased as a result of what it alleges followed from the termination agreement.
35 Mr Moore submitted that the reference to the Somerton property in the Statement of Claim is incidental and not material to the cause of action pleaded by the plaintiff against the defendants.
36 The Somerton property is referred to in paragraph 20 of the proposed Amended Defence and Amended Counterclaim.
37 The cause of action pleaded by the plaintiff will require the plaintiff to produce evidence to support the allegation that there was not only a termination agreement, but also representations made by the defendants which put the plaintiff in a position where it considered that it was free of any obligations or liability under the Contract of Sale enabling it to purchase the Somerton property.
38 It seems to me that part of the plaintiff's case involves proving that it entered into a contract of sale for the purchase of the Somerton property, that is, entering into that Contract of Sale was consistent with there being a termination agreement and the consequent representations.
39 Therefore, I consider that the documents sought by the defendants must be discovered.
40 Furthermore, Order 9 of the Orders made by His Honour Judge Anderson on 16 February 2009 referred to the requirement to discover documents referred to in a party's pleadings or particulars of pleadings and any document which may be produced by the party during evidence at the trial. The Contract of Sale of the Somerton property is referred to in the Statement of Claim, and in all probability the plaintiff will seek to adduce some evidence relevant to the Contract of Sale at the trial based upon its pleadings.
41 However, the standard orders for discovery made in the County Court are not necessarily directive of what documents must be discovered. What underwrites discovery referred to in Order 29 is commented upon in the text in Williams ‘Civil Procedure’ at paragraph 29.01.10, and that is, whether the requirement to disclose documents relates to questions for determination in the proceeding which could assist a party to establish a claim or a defence.
42 Furthermore, before the County Court developed specialist lists and very particular orders to govern the conduct of proceedings in those lists, Order 29.02(1) provided that discovery was required of all documents in a party’s possession which related to any question raised by the pleadings.
43 It seems to me that the Contract of Sale of the Somerton property is not only caught by the orders, but also by the characteristics of what discovery of documents amounts to both in a general sense and what is specifically required under Order 29.02 (1).
Conclusion
44 In relation to the Summonses, I propose to make the following orders:
(1)
The plaintiff file and serve an affidavit of documents limited to discovery of the documents referred to in paragraph 20 of the Statement of Claim relevant to the purchase by the plaintiff of Lot 1, 280 Hume Highway, Somerton on or before 26 June 2009.
(2) The defendants have leave to file and serve an amended defence and
amended counterclaim on or before 26 June 2009.(3)
The plaintiff have leave to file and serve any reply to the defendants’ Amended Defence and Amended Counterclaim on or before 17 July 2009.
(4) The defendants have leave to issue subpoenas pursuant to Order 42A
on:
(a) City Link Real Estate Agency Pty Ltd; (b) Paroissen Ground & Associates Pty Ltd; (c) CB Richard Ellis on or before 17 July 2009.
(5)
The trial date of 16 June 2009 is vacated and the proceeding is re-fixed for trial as a cause before a judge sitting alone (estimate three sitting days).
(6) The necessity for the payment of a further trial fee is waived. (7) Reserved costs. SCHEDULE OF CASE PARTIES
By Original Proceeding
ACN 105 753 731 PTY LTD Plaintiff (ACN 105 753 731) Douglas Gordon CAMERON First Defendant DOOGALOOK MINING PTY LTD Second Defendant (ACN 004 860 002) John Raymond ELLIOTT Third Defendant F PEGORARO PTY LTD Fourth Defendant (ACN 004 607 087) By Counterclaim
Douglas Gordon CAMERON First Plaintiff by Counterclaim DOOGALOOK MINING PTY LTD Second Plaintiff by Counterclaim (ACN 004 860 002) John Raymond ELLIOTT Third Plaintiff by Counterclaim F PEGORARO PTY LTD Fourth Plaintiff by Counterclaim (ACN 004 607 087) ACN 105 753 731 PTY LTD First Defendant by Counterclaim (ACN 105 753 731) Mehmet Ali KARAMEMIS Second Defendant by Counterclaim
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7
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