Adma Group Pty Ltd v Trustees of Edmund Rice Education Australia (Privilege)
[2022] VCC 1530
•15 September 2022
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-21-01215
| ADMA Group Pty Ltd | Plaintiff |
| v | |
| Trustees of Edmund Rice Education Australia | Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | On the papers | |
DATE OF HEARING: | Affidavits filed 30 June and 11 July 2022 and submissions dated 28 July 2022 | |
DATE OF RULING: | 15 September 2022 | |
CASE MAY BE CITED AS: | ADMA Group Pty Ltd v Trustees of Edmund Rice Education Australia (Privilege) | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 1530 | |
RULING
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Subject:LEGAL PROFESSIONAL PRIVILEGE – LITIGATION PRIVILEGE – ADVICE PRIVILEGE
Catchwords: Legal Professional Privilege – Subpoenaed documents – Objection by party to inspection by other party – ss118 and 119 Evidence Act 2008 (Vic) – Court’s discretion to inspect documents – Common law principles
Legislation Cited: Evidence Act 2008 (Vic) ss117, 118, 119 and 131A
Cases Cited:Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; Bolton v Liverpool Corporation (1833) 39 ER 614; Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357; Grant v Downs (1976) 135 CLR 674; Waterford v Commonwealth (1987) 163 CLR 54; Alphington Developments Pty Ltd v Amcor Limited [2018] VSC 293; Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796; Begley & Anor v Baxter Quarries Pty Ltd & Anor (Privilege) [2018] VCC 1662; Built Environs WA Pty Ltd v Perth Airport Pty Ltd (No 5) [2021] WASC 237
Texts Cited:Sue McNicol, ‘Implications of the Human Right Rationale for Legal Professional Privilege – The Demise of Implied Statutory Abrogation?’ in P Mirfield and R Smith (eds), Essays for Colin Tapper (2003) 48
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | HFW Australia | |
| For the Defendant | Champions Lawyers |
HER HONOUR:
Introduction
1By summons filed 11 July 2022, the plaintiff made an application seeking inspection of the documents produced to the registrar under the subpoena issued by the plaintiff to Smith + Tracey Architects (“the Architect”) dated 8 April 2022, over which the defendant claimed privilege.
Background Facts
2This proceeding was commenced on 29 March 2021 and involves two contracts entered into between the plaintiff (“ADMA”) and the defendant (“TEREA”). Under the first contract (“Sports Contract”), ADMA was to carry out the construction of an extension to the existing sport centre for St. Bernard’s College at 41 Rosehill Road, Essendon (“Project”). Under the second contract (“Science Contract"), ADMA was to carry out the construction of a science and learning facility at the Project.
3ADMA claims it was delayed in bringing the works to practical completion under the Sports Contract for various reasons and that it suffered loss, expense and/or damage as a result of these delays. ADMA states that, under the Sports Contract, it was entitled to make claims for, inter alia, adjustments of time and contract price.
4Between 17 March 2015 and 15 November 2016, the Architect issued assessments granting ADMA adjustments to time and costs.
5On 28 November 2016, ADMA issued Notices of Dispute disputing certain adjustments of time and costs assessed by the Architect.
6On 8, 13, 16 and 19 December 2016, the Architect issued letters purporting to rescind certain adjustments of time and costs.
7ADMA claims that the Architect failed to act fairly and impartially having regard to the interests of TEREA and ADMA and in accordance with the Sports Contract when issuing the assessments of adjustment of time and costs claims. ADMA claims it suffered loss due to this.
8ADMA makes similar claims regarding the Science Contract.
9Between 2 February 2015 and 1 December 2019, ADMA submitted payment claims to the Architect pursuant to the Sports Contract.
10Between February 2015 and 16 December 2016, the Architect certified completion of the Sports Works and adjustments to the Sports Contract price and deductions to the Sports Contract price on account of provisional sums.
11ADMA claims that TEREA breached the Sports Contract by paying ADMA less than the adjusted Sports Contract price and TEREA is indebted to ADMA in the sum of $15,036.84 plus interest, alternatively, ADMA has suffered loss and damage in this amount plus interest as a result of TEREA’s breach of the Sports Contract.
12ADMA makes similar claims regarding the Science Contract and claims that TEREA breached the Science Contract by paying ADMA less than the adjusted Science Contract price. ADMA claims that TEREA is indebted to ADMA in the sum of $127,064.11 plus interest, alternatively, ADMA has suffered loss and damage in this amount plus interest as a result of TEREA’s breach of the Science Contract.
13ADMA further claims that it provided security by issuing two bank guarantees under the Sports Contract and two bank guarantees under the Science Contract in the sum of $166,519.40 (“Cashed Bank Guarantees”). TEREA unlawfully accessed the Cashed Bank Guarantees when it was not entitled to. Further and/or in the alternative, TEREA contravened s21 of the Australian Consumer Law (“ACL”) in Schedule 2 of the Competition and Consumer Act 2010 (Cth) by engaging in unconscionable conduct in trade and commerce due to its access to the Cashed Bank Guarantees. ADMA suffered loss and damage due to this.
14ADMA claims against TEREA $15,036.84 as a debt under the Sports Contract and $127,064.11 as a debt under the Science Contract, damages, interest and costs.
15TEREA filed a defence to the further amended statement of claim and counterclaim against ADMA, claiming that ADMA failed to bring the works under the Sports Contract and Science Contract to practical completion by the date for practical completion.
16By email from Glenn Walsh dated 15 September 2016, TEREA notified the Architect of its intention to enforce its entitlement to liquidated damages. ADMA was liable to pay or allow TEREA liquidated damages in the sum of $70,000.00 under the Sports Contract and $34,500.00 under the Science Contract.
17The Architect issued various notices instructing ADMA to carry out rectification work during the defects liability periods under the Sports Contract and Science Contract. By notice dated 10 November 2016, the Architect notified ADMA that TEREA wished to use another person to carry out the said rectification work and the plaintiff was no longer permitted to carry out this work. By notices dated 15 February 2017 and/or 10 March 2017, TEREA made claims to adjust the contract by reason of the rectification work.
18On or about 4 May 2017, the Architect issued a certificate for payment pursuant to the Sports Contract, certifying that the sum of $75,561.68 was payable by ADMA to TEREA after taking into account ADMA’s claims for extension of time costs and the defendant’s claims for liquidated damages.
19On or about 19 July 2017, the Architect issued a revised certificate for payment pursuant to clauses M15.3 and N7.2 in respect of the Science Contract, certifying a sum of $525,585.97 inclusive of GST was payable by the plaintiff to the defendant after taking into account the plaintiff’s claims for extension of time costs and the defendant’s claims for liquidated damages.
20TEREA claims that ADMA has failed to pay TEREA the sums of $75,561.68 and $528,585.97 certified by the Architect.
Legal Framework
Common Law Principles
21Both the common law and statute recognise two types of privilege: legal advice privilege and litigation privilege.
22Common law privilege attaches to confidential communications made between a lawyer and their client when the communication was made for the dominant purpose of giving or obtaining legal advice (advice privilege), as well as communications made for use in existing or contemplated litigation (litigation privilege).[1]
[1] Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at 64.
23Legal professional privilege also attaches to communications between a lawyer and third parties when the communication is made for the benefit of the client, with the purpose of preparing for existing or reasonably apprehended litigation,[2] as well as attaching to material that records confidential legal advice, including any document that records the work of a lawyer carried out for the benefit of the client, encompassing both advice and confidential legal work.[3] The advice from and the request for advice to the lawyer are privileged.[4]
[2] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 550 per McHugh J.
[3] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 569 per Gummow J.
[4] Bolton v Liverpool Corporation (1833) 39 ER 614 at 617.
24The test is “anchored to the purpose for which the document was brought into existence”.[5] The important question to be asked is “what was the intended use (or uses) of the document which accounted for it being brought into existence”.[6] This is to be determined as a question of fact.[7]
[5] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 508 per Brennan CJ.
[6] Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at 366; see also Grant v Downs (1976) 135 CLR 674 at 692; Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 at 508.
[7] Waterford v Commonwealth (1987) 163 CLR 54 at 66.
25At common law, agency (whether within the meaning of that expression in s117 of the Evidence Act 2008 (Vic) (“the Act”) or otherwise) is not required. A communication between a solicitor and a third party may be privileged if it could be established that they were prepared for the dominant purpose of giving or obtaining legal advice. Justice Finn in Pratt Holdings held at [41]–[43]:
“To deny that a third party is an agent in such circumstances does not, though, provide a sufficient or principled reason for denying privilege to the documentary communication (or contents) it has authored. The important consideration in my view is not the nature of the third party’s legal relationship with the party that engaged it but, rather, the nature of the function it performed for that party. If that function was to enable the principal to make the communication necessary to obtain legal advice it required, I can see no reason for withholding the privilege from the documentary communication authored by the third party. That party has been so implicated in the communication made by the client to its legal adviser as to bring its work product within the rationale of legal advice privilege.
There are, in my view, clear reasons of policy that support extending the privilege to such third party authored documentary communications. Whether a natural person or a corporation, a party seeking to obtain legal advice may not have the aptitude, knowledge, skill and expertise, or resources to make adequately, appropriately or at all such communication to its legal adviser as is necessary to obtain the advice required. Such is commonplace today where advice is sought on complex and technical matters. To deny that person the ability to utilise the services of a third party to remedy his or her own inability or inadequacy unless he or she is prepared to forego privilege in the documents prepared by the third party, is to disadvantage that person relative to another who is able adequately to make the desired communication to a legal adviser by relying upon his or her own knowledge, resources, etc.
For the law to provide such an incentive not to utilise the services of third parties in such circumstances is to undercut the privilege itself. It would not facilitate access to effective legal advice nor would it facilitate effective communication with legal advisers for the purpose of obtaining legal advice.”
(Emphasis added.)
Evidence Act
26The relevant provisions of the Act are ss118 and 119:
118 “Evidence is not to be adduced if, on objection by the client, the court finds that the adducing of evidence would result in the 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.”
119 “Evidence is not to be adduced if, on objection by the client, the court finds that the adducing of evidence would result in the 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.”
27Justice Connock in Alphington Developments Pty Ltd v Amcor Limited (“Alphington”)[8] noted that the test to be applied in relation to establishing legal professional privilege is different for the purposes of documents produced in answer to a subpoena in circumstances where s131A of the Act is engaged. Sections 118 and 119 of the Act are relevant if the person objecting is the person required to produce the documents pursuant to the subpoena (here, the Architect). If the person objecting is not a person producing the documents (here, the defendant), then the common law principles apply.
[8] [2018] VSC 293.
28In Alphington at [7] and [33]–[34], both parties recognised the difference between the Act and the common law position. That is, that with respect to legal advice privilege, under s118 of the Act, there are differences with the common law in relation to confidential communications between lawyers or clients and third parties made for the dominant purpose of obtaining legal advice.[9]
[9] See Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357; Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796.
29At paragraph 34, Justice Connock observed:
“… for protection to be afforded under s 118(a) of the Act, the confidential communication must be between the client and the lawyer, and ‘client’ is defined in s 117 of the Act to include ‘an employee or agent’ of the client. At common law, agency (whether within the meaning of that expression in s 117 of the Act or otherwise) is not required. As observed in Asahi, the absence of agency does not deny the existence of the privilege attaching to the communication, although its presence ‘may’ fortify it. In terms of a third party adviser, the important characterisation is ‘not the nature of the third party’s legal relationship with the party that engaged it but, rather, the nature of the function it performed for that party”.
(Emphasis added.)
30In Begley & Anor v Baxter Quarries Pty Ltd & Anor (Privilege) (“Begley”),[10] the Court noted that:
“Given that both the subpoenaed parties and the defendants have objected in the present proceeding, I must apply both the common law and sections 118 and 119 of the Act. This is because sections 118 and 119 of the Act apply only to the adducing of evidence in the relevant proceedings. The common law doctrine of legal professional privilege applies in all other circumstances. It is clear from the decision in Alphington that the statutory concept of agency as opposed to the common law concept of the nature of the third party adviser’s role may give different results in different cases”.
[10] [2018] VCC 1662.
31The further key differences between the common law and the Act include:
a. the advice privilege at common law does not cover documents or third parties but s118(c) includes both;
b. the litigation privilege at common law generally does not cover either third party communications or documents but s119 includes both (even if they were not communicated to the client or his or her lawyer);
c. unrepresented litigants are given a privilege in the litigation situation;
d. in each case, s131A overcomes the fact that, unlike the common law, the ss118 and 119 privileges are restricted to curial proceedings.[11]
[11] Begley at [23] per Judicial Registrar Burchell.
32The party claiming the privilege bears the onus of proof.[12] Justice Connock in Alphington observed that there must be provision of adequate reasons for the grounds of privilege so as to distinguish between claims under ss118 and 119 of the Act or the common law basis upon which privilege was being claimed (advice privilege or litigation privilege). In the present proceeding, the defendant is the party objecting to the inspection of the documents produced to the registry, therefore, the common law principles apply.
[12] Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305.
33The sufficiency of the basis upon which the claim for privilege is asserted must be adequately disclosed without compromising the privileged content as:[13]
“The effect of a successful claim of privilege is often that information which may be vital and relevant to the proper administration of justice is suppressed. Hence it is important to ascertain whether there are worthwhile rationales behind each head of privilege such that each privilege can be defended against the valid competing claims of the proper administration of justice”.
[13] Sue McNicol, ‘Implications of the Human Right Rationale for Legal Professional Privilege – The Demise of Implied Statutory Abrogation?’ in P Mirfield and R Smith (eds), Essays for Colin Tapper (2003) 48 at 1.
Defendant’s evidence
34The defendant’s claim for privilege is set out in two affidavits of Michael Champion, the solicitor for the defendant.
35By affidavit affirmed 11 July 2022 (“Second Affidavit”), Mr Champion deposed that each of the documents that are the subject of claims for privilege are communications between the defendant and its solicitor, being communications between:
(a) the defendant’s direct employees – generally Glenn Walsh or Tony Paatsch;
(b) the Architect in their capacity as agent for the defendant; or
(c) Fonda Zahopoulos, a Senior Project Manager of Gallagher Jeffs who had also been instructed to act on behalf of the defendant and communicate with the defendant’s solicitor as its agent.
36Mr Champion further deposed that the Architect had been appointed to act as agent for the defendant prior to each of the contracts the subject of these proceedings being entered into. Each of those contracts contain correspondence from the Architect accepting tenders by the plaintiff on behalf of the defendant.
37Mr Champion stated that, on or about 21 July 2017, the plaintiff served the defendant with a payment claim pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOPA”) in relation to the sports centre extension. The payment claim was addressed to Gerard Smith of the Architect as agent for the defendant. The documents falling within this category (items 1, 6, 7, 17 and 18) concern legal services given by the defendant’s solicitor regarding the issuing of a payment schedule and the anticipated adjudication proceedings, and the adjudication application which was ultimately made.
38Mr Champion further deposes that, in the course of 2016, he was instructed to provide the defendant with legal advice arising out of the projects the subject of these proceedings. The documents falling within this category (items 2, 3, 4, 5, 6 and 19) concern legal advice that Mr Champion gave to the defendant and its agents, or emailed communications for the dominant purpose of obtaining instructions to enable him to provide legal advice.
39Mr Champion also deposes that the documents described at items 8, 10, 11, 12, 13, 14 and 15 either constitute or concern legal advice he gave to the defendant and its agents, or emailed communications which include or production of which would disclose that legal advice. He states that none of the emails referred to within the above items concern the Architect’s role in assessing, valuing or certifying under the contract.
Plaintiff’s submissions
40The plaintiff submits that the defendant has not provided sufficient information to make out a claim for privilege over the documents produced under subpoena.
41TEREA contends that it is entitled to rely on certificates issued by the Architect purportedly in accordance with the contracts. In those certificates, the Architect determined that substantial sums are payable by ADMA to TEREA.
42The certificates in question depart drastically from certificates issued in accordance with the contracts at an earlier stage of the project. The circumstances in which the later certificates came to be issued remain unexplained.
43ADMA submits that no privileged documents (including those over which the defendant now claims privilege) are identified in the defendant’s affidavit of documents. The circumstances which led the Architect to make drastic changes to its certification of ADMA’s entitlements is of considerable significance in this proceeding has been, at best, significant obfuscation on the part of TEREA in disclosing critical documentation.
44ADMA submits that the defendant has not provided sufficient information to make out a claim for privilege and it should accordingly be denied.
45Further, ADMA claims that privilege does not attach to communications between parties’ lawyers and a certifier in respect to communications concerning their certification functions.[14] The circumstances of any confidential communications between the defendant’s lawyers and the Architect must be properly explained, and sufficient evidence must be provided to enable the plaintiff to assess the validity of those claims by reference to non-privilege information about the document, including, at minimum, how, when and to whom the purportedly privileged communication was made.
[14] Built Environs WA Pty Ltd v Perth Airport Pty Ltd (No 5) [2021] WASC 237 at [22].
46ADMA submits that the affidavits produced by Mr Champion, which set out the grounds on which privilege is claimed, do not meet the above standard – there is no evidence of:
(a) who sent and received the communications;
(b) what date the communications were created, sent or received;
(c) on what basis the communications are said to be confidential; and
(d) the subject line of the correspondence.
47An assertion is made in Mr Champion’s Second Affidavit that he gave “advice” to “the defendant and its agents”, which it says include the Architect and another entity, Gallagher Jeffs. Very little information is given about the nature of that advice apart from that it was given “in the course of 2016”, that is, prior to the remaining work being taken out of the plaintiff's hands, and in circumstances where the Architect was performing its certification function. ADMA claims that, for the reasons set out above, there is a serious question as to whether such correspondence and advice is privileged.
48To conclude, the plaintiff submits that the defendant must provide further specific evidence about the communications over which it claims privilege and disclose the nature of the legal advice given to the Architect, and explain why it could not relate to or influence the Architect in carrying out its certification functions. The plaintiff states that unless the defendant does so, it has failed to prove the claimed privilege, and inspection of the subpoenaed documents must be allowed.
Discretion of the Court to inspect
49In my view, although there is an absence of satisfactory affidavit evidence provided by the defendant and inadequate reasoning stating the grounds for the claim for privilege, it is possible to infer from the uncontentious fact that Champions Lawyers are the solicitors acting for the defendant, and the dates of and parties to the relevant communications, to determine, on inspection of the documents, whether they were for a privileged purpose.
“Adma Group Subpoena” Documents
50Pages 90–94 are an email chain including Gerard Meehan from Smith + Tracey Architects and Michael Champion as recipients. The claim for privilege is legal advice provided for anticipated litigation. The defendant contends that the email includes advice to TEREA and its agents regarding proper construction of contract or performance of functions (non-certifying issue) in relation to a claim under the SOPA. The plaintiff submits that it is unclear what instructions the Architect would give/gave to ADMA in relation to a claim under the SOPA. This email is dated shortly after ADMA issued claims for payment to the Architect. Communications in respect to the SOPA may, and often will, relate to the architects’ certification functions under the Contracts, as a payment schedule sets out or “certifies” the amount payable by the Respondent in accordance with the Contracts. In circumstances where communications concerning the Architect’s certification functions are not privileged, those communications should be disclosed.
51Having inspected the document, it consists of an email chain that is a confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of statutory declarations and commissioning reports with the purpose of preparing for reasonably apprehended litigation.
52Pages 95–97 are an email chain including Gerard Meehan from the Architect and Michael Champion as recipients. The claim for privilege is legal advice provided for anticipated litigation sent in relation to a claim under the SOPA. The plaintiff submits that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. In the circumstances, the defendant does not make out a claim for privilege. It is unclear what instructions the Architect would give/gave to ADMA in relation to a claim under the SOPA. This email is dated shortly after ADMA issued claims for payment to the architect. This email was also sent in August 2017, shortly after ADMA issued a certificate dated 19 July 2017 purporting to certify payment of $538,585.67 to TEREA in respect to the Science Works, and three years before proceedings were commenced by ADMA. In those circumstances, the basis upon which this advice is said to relate to actual or anticipated legal proceedings is unclear.
53The email chain is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of sending payment schedules and claims.
“Correspondence A” Documents
54Page 111 (top email) is an email from Michael Champion to Gerard Meehan, Fonda Zahopoulos, Gerard Smith, Justin Noonan and copying in Glenn Walsh, Tony Paatsch and Tina Davis. The claim for privilege is legal advice, not anticipated or actual litigation and the defendant claims it includes advice to TEREA and its agents regarding proper construction of contract or performance of functions (non-certifying issue). The plaintiff contends that the description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege. This email appears to form part of an email chain where the preceding email encloses draft notices from the architect concerning liquidated damages and the release of bank guarantees. In that email the architect requests TEREA's agent review and advise on the notices prior to issue to ADMA.
55The email is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of the wording of proposed site instructions.
56Page 134 is an email from Michael Champion to Gerard Smith copying in Fonda Zahopoulos, Glenn Walsh and Adam Taylor. The claim for privilege is legal advice provided for anticipated litigation in relation to a claim under the SOPA. The plaintiff submits that it is unclear what instructions the Architect would give/gave to ADMA in relation to a claim under the SOPA and notes that this email is dated shortly after ADMA issued claims for payment to the architect.
57The email is confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of sending payment schedules and claims.
58Pages 146–147 are emails between Michael Champion and Gerard Meehan copying in Gerard Smith. The claim for privilege is legal advice, not anticipated or actual litigation, and includes advice to TEREA and its agents regarding proper construction of the contract or performance of functions (non-certifying issue). The plaintiff contends that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. The description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege. These emails appear to be dated on or around the time when the Architect purported to rescind extensions of time (“EOTs”) granted to ADMA, reject EOT claims, maintain rejection of EOT cost claims, and rescind EOT cost claims (see paragraphs 5(h) and 6(h) of the Further Amended Statement of Claim).
59The email is confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of specification items and warranties.
60Page 148–150 are emails between Michael Champion and Gerard Meehan copying in Gerard Smith, Glenn Walsh, Tony Paatsch and Fonda Zahopoulos. The claim for privilege is legal advice, not anticipated or actual litigation, and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff argues that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. The description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege. These emails appear to be dated on or around the time when the Architect purported to rescind EOTs granted to ADMA, reject EOT claims, maintain rejection of EOT cost claims, and rescind EOT cost claims (see paragraphs 5(h) and 6(h) of the Further Amended Statement of Claim).
61The email chain is confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of specification items and warranties.
“Business Correspondence A” Documents
62Pages 13–14 are emails between Michael Champion and Fonda Zahopoulos copying in Glenn Walsh, Tony Paatsch and Justin Noonan. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice as it includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff submits that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. The description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege.
63The email chain is confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of the wording for instructions to the Architect.
64Pages 27–28 are emails between Michael Champion and Gerard Meehan copying in Gerard Smith. The claim for privilege is legal advice, not anticipated or actual litigation, and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis set out above and further claims that the emails appear to be dated on or around the time when the architect purported to rescind EOTs granted to ADMA, reject EOT claims, maintain rejection of EOT cost claims, and rescind EOT cost claims (see paragraphs 5(h) and 6(h) of the Further Amended Statement of Claim).
65The emails are confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of defects and incomplete works lists for the Science & Learning facility.
66Pages 39–40 are emails including between Michael Champion, Glenn Walsh, Gerard Smith, Fonda Zahopoulos and Gerard Meehan as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff contends that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. The description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege. Further, the plaintiff argues that this email is dated around the time when ADMA's bank guarantees were cashed by TEREA in breach of the contracts (see paragraph 9 of the Further Amended Statement of Claim).
67The emails attach two notices of dispute and which are confidential documents prepared for the dominant purpose of the lawyer providing legal advice. The email chain is a confidential communication between the client and lawyer and the lawyer and third parties for the dominant purpose of providing legal advice regarding the notices of dispute.
68Pages 74–75 are emails including between Gerard Meehan and Michael Champion as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff contends that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was. The description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege.
69In my view, the emails contain legal advice from the defendant’s lawyer to the client regarding proposed site instructions and requesting documents regarding certain progress claims.
70Pages 89–91 are emails between Fonda Zahopoulos, Gerard Meehan, Gerard Smith, Glenn Walsh and Tony Paatsch as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis as set out in the category above.
71In my view, the emails contain legal advice from the defendant’s lawyer to the client and its agent regarding the revised defects lists and the text to include as instructions to the Architect.
72Pages 92–104 are emails between Fonda Zahopoulos, Gerard Meehan, Gerard Smith, Glenn Walsh and Tony Paatsch as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis as set out in the category above.
73In my view, the emails contain legal advice from the defendant’s lawyer to the client regarding the revised defects lists and the text to include as instructions to the Architect.
74Pages 108–109 are emails including Gerard Meehan, Michael Champion, Fonda Zahopoulos and Gerard Smith as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis as set out in the category above.
75The email is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of the wording of proposed site instructions and advice in relation to the proper the construction of provisions of the Contract.
76Pages 117–119 are emails including Gerard Meehan, Michael Champion, Fonda Zahopoulos and Gerard Smith as recipients. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis as set out in the category above.
77The email is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of the wording of proposed site instructions and advice in relation to the proper the construction of provisions of the contracts.
“Builder’s Correspondence A Part 2” Documents
78Pages 34–40 are emails between Gerard Meehan, Michael Champion, Gerard Smith, Glenn Walsh, Tony Paatsch and Fonda Zahopoulos. The claim for privilege is legal advice provided for anticipated litigation and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff objects on the basis as set out in the category above and further argues that these emails appear to be dated on or around the time when the architect purported to rescind EOTs granted to ADMA, reject EOT claims, maintain rejection of EOT cost claims, and rescind EOT cost claims (see paragraphs 5(h) and 6(h) of the Further Amended Statement of Claim).
79The email chain is confidential communication between the lawyer and a third party for the dominant purpose of providing legal advice to the client in respect of specification items and warranties.
80Page 92 is an email from Michael Champion to Gerard Smith copying in Fonda Zahopoulos, Glenn Walsh and Adam Taylor. The claim for privilege is legal advice provided for anticipated litigation and sent in relation to a claim under the SOPA. The plaintiff it is unclear what instructions the architect would give/gave to ADMA in relation to a claim under the SOPA. This email is dated shortly after ADMA issued claims for payment to the Architect and is dated shortly after ADMA issued claims for payment to the Architect.
81The email is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of sending payment schedules.
82Pages 95–98 are emails including Michael Champion, Gerard Smith, Fonda Zahopoulos and Glenn Walsh as recipients. The claim for privilege is legal advice provided for anticipated litigation and sent in relation to a claim under the SOPA. The plaintiff submits that this item appears to contain multiple emails which are not separated into separate items and it is accordingly unclear who the author and recipient of each item of correspondence was and in the circumstances does not make out a claim for privilege. It is unclear what instructions the Architect would give/gave to ADMA in relation to a claim under the SOPA. This email is dated shortly after ADMA issued claims for payment to the Architect.
83One of the emails in the chain is confidential communication between the client and lawyer for the dominant purpose of providing legal advice to the client in respect of sending payment schedules and drafting a response to ADMA’s final payment claim.
84Page 116 is an email from Fonda Zahopoulos to Gerard Smith, Glenn Walsh, Gerard Meehan and Tony Paatsch. The claim for privilege is that the email would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice and includes advice to TEREA and its agents regarding the proper construction of the contract or the performance of functions (non-certifying issue). The plaintiff submits that the description provided by the defendant does not disclose the specific author of the document and in the circumstances does not make out a claim for privilege. ADMA notes the defendant's legal representative is not a party to this correspondence. This correspondence is dated shortly prior to the Architect rejecting a number of EOTs submitted by ADMA (see the particulars to paragraphs 5(f) and 6(f) of the Further Amended Statement of Claim).
85The email does not copy in the defendant’s lawyers. However, it does include a reply from St. Bernard’s College’s adviser regarding extension of time claims and the email is authored by the third-party agent of the client who has prepared the document, the function of which was to enable the communication necessary to obtain the legal advice required by the client, and is therefore subject to legal advice privilege.
Other items
86Mr Champion deposes in his Second Affidavit that items 1, 6, 7, 17 and 18 are a confidential communication between the defendant’s lawyers and another person for the dominant purpose of the defendant being provided with professional legal services relating to an anticipated proceeding in which the defendant might have been a party.
87The plaintiff submits that Mr Champion’s Second Affidavit makes an assertion that he gave “advice” to “the defendant and its agents”, which include the Architect and Gallagher Jeffs. It says that very little information is given about the nature of that advice apart from that it was given “in the course of 2016”, that is, prior to the remaining work being taken out of the plaintiff’s hands, and in circumstances where the Architect was performing its certification function.
88Item 1 is a standalone progress payment certificate addressed to Glenn Walsh from Gerard Smith. The defendant has not satisfied the onus of proof that this is a confidential communication between the lawyer and another person for the dominant purpose of providing legal advice to the client relating to an anticipated proceeding. It is not subject to litigation privilege.
89Item 6 contains standalone meeting minutes with a contract summary (including construction period and progress payments). The defendant has not satisfied the onus of proof that this is a confidential communication between the lawyer and another person for the dominant purpose of providing legal advice to the client relating to an anticipated proceeding. It is not subject to litigation privilege.
90Item 7 is standalone letter from Gerard Smith to Glenn Walsh (Property Manager of St. Bernard’s College) informing Mr Walsh that progress claims no. 18 from the contractor had been received and enclosing progress payment certificates. The stated ground for the claim for privilege is a mere assertion that is not verified on oath or properly particularized. The onus of proof has not been made out in respect of item 7 pursuant to common law. It is not subject to litigation privilege.
91Item 17 contains meeting minutes of the Sport Centre Extensions project at St. Bernard’s College, Essendon. The minutes include a contract summary with unidentified handwritten annotations. The defendant has not satisfied the onus of proof that this is a confidential communication between the lawyer and another person for the dominant purpose of providing legal advice to the client relating to an anticipated proceeding. It is not subject to litigation privilege.
92Item 18 is email correspondence between Michael Champion and Gerard Smith regarding St. Bernard’s College, attaching a letter to Gerard Smith and a moisture test and installation report. The letter contains the words “we stress at the outset that this correspondence is an expression of the College’s views, and not legal advice nor a direction to you. In assessing a progress payment you are required to act independently not as agent of the owner”. The stated ground for the claim for privilege is a mere assertion that is not verified on oath or properly particularized. The onus of proof has not been made out in respect of item 18. It is not subject to litigation privilege.
93Mr Champion deposes in his Second Affidavit that items 2, 3, 4, 5, 6 and 19 are confidential documents prepared by the defendant, its lawyer or another person for the dominant purpose of the lawyer providing legal advice.
94Item 2 contains standalone meeting minutes regarding Sport Centre Extensions project at St. Bernard’s College, Essendon, with contract summary (construction period and progress payments) and unidentified handwritten annotations. However, on the face of the document, and the evidence before me, I am unable to determine the purpose for which the communication was made or the document created. The stated ground for the claim for privilege is a mere assertion that is not verified on oath or properly particularized. The onus of proof has not been made out in respect of document and it is not subject to advice privilege.
95Item 3 contains standalone meeting minutes regarding Science and Learning Centre project at St. Bernard’s College, Essendon, with contract summary (including construction period and progress payments). It is not subject to advice privilege on the same grounds as item 2 above.
96Item 4 contains standalone annotated meeting minutes regarding Science and Learning Centre project at St. Bernard’s College, Essendon, with contract summary (including construction period and progress payments). It is not subject to advice privilege on the same grounds as item 2 above.
97Item 5 is an email from Michael Champion to Gerard Smith confirming receipt of quotations for the cost of rectifying the defects to the flooring and requesting a revised certificate by the contract incorporating the cost of replacing the defective flooring with unidentified handwritten annotations. The email itself does not provide legal advice. It may be that item 5 is a request for documents for the intention of providing legal advice, however, this has not been made out on the evidence before the Court. The Court is unassisted by any evidence to cast light on the circumstances in which the document came into existence. The purpose for which the communication is made or the document is created cannot be proved by mere assertion. The onus of proof has not been made out in respect of item 5.
98Item 6 contains standalone meeting minutes regarding Science and Learning Centre project at St. Bernard’s College, Essendon, with contract summary (including construction period and progress payments). It is not subject to advice privilege on the same grounds as item 2 above.
99Item 19 is a letter from Gerard Smith to Glenn Walsh attaching an amended progress payment certificate and acknowledging correspondence disputing the assessment of monies due pursuant to the contract issued on 15 February 2017. In my view, the evidence before the court does not establish that the communication is for the dominant purpose of providing legal advice to the client. On the face of the document it is transactional and not related to the obtaining of legal advice. The onus of proof has not been made out and item 19 is not the subject of advice privilege.
100Michael Champion deposes in his Second Affidavit that items 8, 10, 11, 12, 13, 14 and 15 would disclose a confidential document prepared by the defendant, its lawyer or another person or the contents of a confidential document prepared by the defendant’s lawyer for the dominant purpose of the lawyer providing legal advice.
101Item 8 contains email correspondence from Fonda Zahopoulos (Senior Project Manager of Gallagher Jeffs) to Gerard Smith containing a reply from St. Bernard’s College’s adviser about whether claims should be allowed and the email is authored by the third-party agent of the client who has prepared the document, the function of which was to enable the communication necessary to obtain the legal advice required by the client and is, therefore, the subject of advice privilege.
102Item 10 is letter correspondence from Gerard Smith to Glenn Walsh acknowledging receipt of correspondence disputing the assessment of monies due pursuant to the contract relating to the Science and Learning Centre and advising of contract costs to date for the project. In my view, the evidence before the court does not establish that the communication is for the dominant purpose of providing legal advice to the client. On the face of the document, it is transactional and not related to the obtaining of legal advice. The onus of proof has not been made out and item 10. It does not include legal advice and is not subject to advice privilege.
103Item 11 is email correspondence from Glenn Walsh to Gerard Smith regarding building permit modifications. It does not request legal advice and is not the subject of advice privilege for the provision of legal advice to the client. The purpose for which the communication is made or the document is created cannot be proved by mere assertion. The onus of proof has not been made out in respect of item 11 pursuant to common law.
104Item 12 contains an email correspondence chain, including:
(a) email from Gerard Smith to Glenn Walsh attaching prolongation costs claims and payment claim certificates for the Sports Centre Extension and Science and Learning Centre projects;
(b) email from Fonda Zahopoulos to Gerard Meegan, copying in Glenn Walsh and Tony Paatsch, requesting various status updates and the issuing extensions of time in relation to the projects.
105The Court is unassisted by any evidence to cast light on the circumstances in which the document came into existence. The purpose for which the communication is made or the document is created cannot be proved by mere assertion. The onus of proof has not been made out in relation to item 12. This item is not the subject of advice privilege.
106Item 13 contains emails from Fonda Zahopoulos to Gerard Smith regarding action items and requesting documents and information in relation to the projects, bank guarantees and requesting status updates regarding the adjustment and payment schedule of the recent progress claims. The Court is unassisted by any evidence to cast light on the circumstances in which the document came into existence. The purpose for which the communication is made or the document is created cannot be proved by mere assertion. The onus of proof has not been made out in respect of item 13 pursuant to common law. Further, it is not a confidential communication between lawyer and client and is not the subject of advice privilege.
107Item 14 is a letter entitled “Notice of dispute – Sport Centre Extension”. It is not communication between lawyer and client, nor does the letter specify that the document is confidential. It is not the subject of advice privilege.
108Item 15 is a letter from Gerard Smith to Glenn Walsh regarding notice of dispute of 1 December 2016 and the assessment on the extension of time claims. It is not the subject of advice privilege.
Conclusion
109The documents falling under the categories “Correspondence A”, “Adma Group Subpoena” documents, “Business Correspondence A” and “Builder’s Correspondence A Part 2” are subject to privilege. Other items falling outside of these categories, save for item 8, are not subject to legal or litigation privilege and the plaintiff has leave to inspect those documents.
110I will hear the parties as to the form of appropriate orders and as to the question of costs.
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Certificate
I certify that these 27 pages are a true copy of the reasons for the decision of her Honour Judge Burchell delivered on 15 September 2022.
Dated: 15 September 2022
Andrea Ko
Associate to her Honour Judge Burchell
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