Alan Hickinbotham Pty Ltd v The Australian Kidney Foundation
[2017] SASC 4
•3 February 2017
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ALAN HICKINBOTHAM PTY LTD v THE AUSTRALIAN KIDNEY FOUNDATION
[2017] SASC 4
Judgment of Judge Roder a Master of the Supreme Court
3 February 2017
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - DOCUMENTS
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY
The plaintiff seeks inspection of documents in respect of which legal professional privilege has been claimed - the defendant seeks orders that the plaintiff provide further and better particulars, that the defendant have permission to amend its defence, that the plaintiff make further and better disclosure and that the plaintiff file and serve a supplementary list of documents.
Held:
1. Uphold the claims to privilege in respect of documents AKF.0144 and AKF.0147.
2. Reject the claims to privilege in respect of documents AKF.0145, AKF.0149 and AKF.0150.
3. Dismiss paragraphs 2 and 3 of FDN 19.
4. Within 28 days the plaintiff file and serve a further list of documents in respect of which privilege is claimed and describing those documents without disclosing their contents in sufficient particularity as to enable the Court to decide if the privilege claimed is maintainable.
5. The documents produced for inspection by the defendant be returned to the defendant’s solicitors.
6. Permission to the parties to apply for further directions and orders – including as to costs, if necessary – as they may be advised.
Retail and Commercial Leases Act 1995 (SA); Supreme Court Civil Rules 2006 (SA) r 98(2), r 102(3), referred to.
AWB Ltd v Cole (No 5) (2006) 155 FCR 30; Kadlunga Proprietors & Ors v Electricity Trust of South Australia & Ors (1985) 39 SASR 410; Spotless Group Ltd v Premier Building & Consulting P/L [2006] VSCA 201; Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (ACCC) (2002) 213 CLR 543; X & Y v Z (2015) 123 SASR 298, considered.
ALAN HICKINBOTHAM PTY LTD v THE AUSTRALIAN KIDNEY FOUNDATION
[2017] SASC 4
JUDGE RODER. This is a lease dispute. The defendant leased premises at North Terrace, Hackney, from the plaintiff. The lease was for five years. The lease expired on 30 November 2013. Thereafter, the plaintiff continued in possession, but vacated on 2 November 2015.
In the action, the plaintiff claims that:
1.A new lease (“the new lease”) was entered into after the expiry of the lease;
2.In the alternative, there is an enforceable agreement to enter into a new lease (“agreement to lease”);
3.In the further alternative, there is an estoppel by convention (“the lease estoppel”); and
4.In the further alternative the defendant has contravened section 18 of the Australian Consumer Law (“misleading and deceptive conduct”).
The plaintiff seeks damages for breach of the new lease, breach of the agreement to lease, breach of the lease by estoppel or under the Australian Consumer Law.
Two applications were argued before me on 13 December 2016:
·By FDN 17 the plaintiff sought inspection of certain documents disclosed in the defendant’s Third List of Documents. Those documents were described in the list as:
1.1 AKF.0144 – 2 February 2015 – Extract of Minutes Audit Committee Meeting;
1.2 AKF.0145 – 25 March 2015 – SA New Office Proposal with attachment entitled “SA New Office Proposal – 136 Frome Street Adelaide”;
1.3 AKF.0147 – 23 November 2015 – Extract of Minutes Audit Committee Meeting;
1.4 AKF.0149 – 14 December 2015 – Extract of Minutes Audit Committee Meeting; and
1.5 AKF.0150 – 18 December 2015 – Extract of Minutes Board Meeting.
The Third List of Documents claimed legal professional privilege in respect of those documents.
·By FDN 19 the defendant sought orders in paragraphs 2-5 as follows:
2.That the plaintiff provide further and better particulars of the following paragraphs of its statement of claim dated 8 December 2015 (FDN 2):
2.1 paragraph 8;
2.2 paragraph 10.3;
2.3 paragraph 12;
2.4 paragraph 21.2;
2.5 paragraph 23.1;
2.6 paragraph 23.3.
3.Subject to order 2 sought above, that the Defendant have permission to amend its defence dated 15 January 2016 by filing a second defence in the terms set out in the Affidavit of Andrew Nicholas Wesley Bullock filed contemporaneously with this interlocutory application.
4.That the plaintiff make further and better disclosure in relation to the documents and categories of documents set out in Annexure A to this Application.
5.That the Plaintiff file and serve a Supplementary List of Documents identifying the documents disclosed as being privileged on the Plaintiff’s List of Documents dated 26 April 2016 with a greater precision than required under Rule 137(1) of the District Court Civil Rules 2006.
I reserved my decision in respect of each application. I also raised with the parties the question of the applicability of the Retail and Commercial Leases Act 1995 (SA). If that Act applies, it would appear that the action should have been commenced in the Magistrates Court and could have been transferred to the District Court. I invited the parties to make written submissions on that point.
The Plaintiff’s Application
The description of the documents in the Third List of Documents does not suggest that they would be privileged. In correspondence between the parties the bases for the claim of privilege were described as follows:
Number
Reason for Privilege Grounds for Privilege AKF.0144 Advice Privilege Records the substance of legal advice sought or received by the defendant. AKF.0145 Advice/Litigation Privilege Prepared for the purposes of obtaining legal advice and encloses communications between the defendant and its legal advisors in relation to this dispute. AKF.0147 Advice/Litigation Privilege Created after the plaintiff issued its letter of demand.
Records the substance of legal advice sought or received by the defendant.AKF.0149 Advice/Litigation Privilege Created after the plaintiff served its Claim.
Records the substance of legal advice sought or received by the defendant.AKF.0150 Advice/Litigation Privilege Created after the plaintiff served its Claim.
Records the substance of legal advice sought or received by the defendant.
Mr Livesey QC for the plaintiff submitted that the defendant’s claim for privilege in respect of other documents had proved to be unfounded and therefore I should closely scrutinise this claim. I do not think that that submission is helpful. However, I agree that even the claims in the table set out above are formulaic. Further, while the reasons asserted for privilege appear to be the same, the grounds asserted in respect of the documents are different. It is not possible, in my opinion, to conclude that the reason and grounds asserted in the correspondence actually identify why the documents in question are the subject of privilege.
I suggested to the parties that a Kadlunga[1] order could be made.
[1] Kadlunga Proprietors & Ors v Electricity Trust of South Australia & Ors (1985) 39 SASR 410.
Mr Livesey QC pressed for an order of the type made by Blue J in X & Y v Z[2]. Mr Bullock, counsel for the defendant, agreed that that would be an appropriate way to proceed. I therefore made an order that the documents in question be produced to me in chambers to consider the claims for privilege.
[2] (2015) 123 SASR 298 at [24].
The documents were produced to me on 20 December 2016. I have inspected the documents.
As Young J explained in AWB Ltd v Cole (No 5)[3]:
(12)The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power: … If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege.
[3] (2006) 155 FCR 30 at [44].
I am guided by the comments of the plurality in Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (ACCC)[4]:
[9] It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. … [Citation omitted.]
The privilege attaches to the communication, not to documents per se.
[4] (2002) 213 CLR 543 at [9].
I now turn to the documents that were produced.
Document AKF.0144 is page 2 of Minutes of an Audit Committee Meeting held on 2 February 2015. In Item 5 of the Minutes it is recorded that legal advice has been received by the defendant as to its obligations and entitlements in respect of its occupation of the leased premises. The nature of the advice is stated in the minutes.
The discussion at a committee of the defendant of legal advice the defendant had received is properly characterised as communication of legal advice protected by legal professional privilege. The communication made to the Audit Committee was the communication of the legal advice that had been provided to the defendant [5]. I uphold the claim for privilege.
[5] Spotless Group Ltd v Premier Building & Consulting P/L [2006] VSCA 201 at [20].
AKF.0145 is an email from the defendant’s Chief Financial Officer and Company Secretary to the Chief Executive Officer of the defendant. A proposal relating to the lease of the subject premises and a lease of other premises in Adelaide is attached to the email. That proposal does include references to advice given by the defendant’s lawyers. However, I cannot accept that the dominant purpose of the communication is to record that advice. The dominant purpose appears to be commercial. I do not consider that the document is protected by privilege.
AKF.0147 is Minutes of an Audit Committee Meeting held on 23 November 2015. It records a discussion by the Audit Committee of documentation relating to this dispute after the plaintiff issued a letter of demand. Advice from the defendant’s solicitors as to the course that the defendant should take in respect of the dispute is recorded. That is clearly protected by legal professional privilege. There is no other part of the document that is relevant to the action. I uphold the claim of privilege.
AKF.0149 are Minutes of the Audit Committee Meeting held on 14 December 2015. The Minutes record a reference to the dispute and a resolution as to the accounting treatment of the dispute. I do not consider that the Minutes disclose the nature of legal advice. The document is not protected by legal professional privilege.
AKF.0150 is Minutes of a Board Meeting held on 18 December 2015. These Minutes do refer to the dispute. They do not disclose instructions for or the contents of any legal advice. Again, I do not consider that the document is protected by legal professional privilege. If necessary, I will hear the parties as to the appropriate orders in light of my conclusions.
The defendant’s application
By paragraph 2 of FDN 19 the defendant seeks “further and better particulars” of paragraphs 8, 10.3, 12, 21.2, 23.1 and 23.3 of the Statement of Claim.
Rule 98(2) provides:
(2) A pleading—
(a)must be as brief as the nature of the case allows; and
(b) must state only material facts and matters relied on and not the evidence or arguments by which the facts and matters are to be proved; and
(c)must not contain matter that is—
(i)scandalous; or
(ii)evasive or ambiguous; or
(iii)frivolous or vexatious; or
(iv)an abuse of the process of the Court in some other respect.
(d) must plead such facts and matters as give fair notice of the party’s case at trial.
Rule 102(3) provides:
(3) The Court will only make an order for further particulars if satisfied that—
(a) the pleadings do not give fair notice of the party’s case; and
(b) the order is necessary to avoid substantial prejudice to the party in whose favour the order is to be made.
The Statement of Claim pleads clearly identified causes of action. Facts are pleaded in support of each. The pleading links each cause of action to a set of pleaded facts. The case that the plaintiff makes in respect of each cause of action is clear. The pleader has achieved all of that in only five pages. I accept Mr Livesey’s submission that this is exactly the sort of pleading that the Rules now envisage. The defendant is clearly on notice of the case that is put against it.
That is not to say that the case will succeed – or that each cause of action as pleaded is sustainable. There is no application for summary judgment, or to strike out. I do not mean by that to suggest that any such application would have prospects of success. In my view the pleading is an excellent example of what is required under the current Rules.
I now turn to the requests for more particularity.
Paragraph 8 of the Statement of Claim appears under the heading “New Lease”. Paragraph 5 pleads that the plaintiff made three alternative offers to the defendant. Paragraph 6 pleads a counter offer made by the defendant to the plaintiff. For these purposes, that is the relevant offer. Paragraph 7 pleads acceptance of that counter offer. That is sufficient pleading to plead a new lease. Paragraph 8 goes on to plead that:
8.By email of 7 October 2014, the Defendant confirmed agreement.
The plea in paragraph 8 is unnecessary to establish the cause of action in respect of the new lease. In that sense, it is evidence and would offend Rule 98(2)(b).
However, I cannot say that the plea is irrelevant to the claims in estoppel or misleading and deceptive conduct. Both of those pleaded causes of action refer to paragraph 8. I cannot see how any further particulars of the plea could be ordered. The plea refers to a particular email.
In paragraph 10.3 it is pleaded that:
10.3.the Defendant paid the New Rent.
Any complaint about that pleading appears to me to be a request for evidence. I would not make such an order.
The next complaint is about paragraph 12. Paragraph 12 pleads:
12.From December 2014 to March 2015, the parties engaged in communications at the Defendant’s request in relation to some of the Other Terms of the New Lease.
It was not suggested in submissions that the defendant does not know what case it has to meet – or that it could be the victim of substantial prejudice by reason of the particularity of this plea.
There is a complaint about paragraph 21.2 of the Statement of Claim. That paragraph pleads:
21.2.the Defendant has part performed the Agreement to Enter into Lease.
The pleading refers to paragraphs 5 to 15 of the Statement of Claim. Those are the matters that are relied on to establish the part performance. The pleading is either good or not. There is no basis for ordering more particularity.
Again, a complaint is made about paragraph 23.1:
23.1.the Defendant represented to the Plaintiff that it had entered into the New Lease or, in the alternative, an Agreement to Enter into Lease.
The plea is said to be based on the matters pleaded in paragraphs 5 to 15. Again, the plea is either good or it is not. There is no basis for an order for any further particularity. The plea gives further notice of the case the defendant has to meet. There is no suggestion of prejudice.
Paragraph 23.3 contains a plea as to reliance to the detriment of the plaintiff. It appears to me to be clear that the “detriment” in question is that pleaded at paragraph 15. Again, I do not see any basis for an order for any further particularity.
I am not prepared to make orders in terms of paragraph 2 of FDN 19.
There is no need for an order in terms of paragraph 3 of FDN 19.
I now turn to the argument about disclosure, based on paragraphs 4 and 5 of FDN 19.
As to paragraph 4, the defendant seeks an order that the plaintiff make further and better disclosure in relation to the documents and categories of documents set out in Annexure A to FDN 19. Annexure A lists:
1. All communications between the plaintiff’s agents, including Mr Morton, and the plaintiff in relation to the negotiations regarding the alleged “New Lease”.
2. All communications between the plaintiff’s agents, including Mr Morton, and the plaintiff in relation to the understanding of the plaintiff and its agents as to the status of the “Original Lease” in light of the negotiations regarding the alleged “New Lease” and the matters alleged by the plaintiff at paragraph 16 of the Statement of Claim.
3. All communications between the plaintiff or Mr Morton and Mr Jim Miers, the “Lessor’s Property Portfolio Adviser” relating to the issues in dispute.
4. Any communications between the plaintiff and the defendant or any communications whatsoever relating to the vacation of the premises or the alleged “New Lease” after 2 November 2015.
5. Any documents relating to any loss the plaintiff has already suffered for the remainder of the term of the alleged “New Lease” including, but not limited to, invoices for outgoings it has allegedly had to pay for the premises.
6. Any leases, written or otherwise, entered into by the plaintiff after the defendant:
6.1 reduced the space it occupied at the premises; and
6.2vacated the premises.
7. Any legal advice received by the plaintiff in relation to the negotiations towards the “New Lease” or the status of the previous lease.
8. Any documents relating to the failure by the plaintiff to charge rent at the rate it now alleges was due under the alleged “New Lease” after the alleged commencement of the “New Lease” and its subsequent change of position, including any legal advice received in this regard.
9. Any documents relating to the allegation that the plaintiff’s understanding after 7 October 2014 was that the “New Lease” or an agreement in terms of the “New Lease” had been entered into or the plaintiff’s reliance upon that alleged understanding, including any legal advice received in this regard.
10. Any documents relating to the “detriment” alleged in paragraph 23.3 of the Statement of Claim.
11. Complete email chains of the emails previously disclosed by the plaintiff in document 19 of the plaintiff’s List of Documents dated 26 April 2016.
12. Any and all documents relevant to the steps the plaintiff took to re‑lease the premises after the defendant:
12.1informed the plaintiff that it was occupying the premises as a monthly tenant; and/or
12.2vacated the premises.
Paragraphs 7, 8 and 9 of FDN 19 seek disclosure of documents that include legal advice to the plaintiff. It was common ground that the plaintiff’s state of mind is an issue that is relevant – at least to the causes of action in estoppel and misleading and deceptive conduct.
The plaintiff’s Second List of Documents claims privilege in another formulaic manner. The plaintiff claims privilege in respect of “the usual documents privileged from disclosure on the grounds of professional privilege”. No proper basis on which the privilege is asserted is suggested. There is no proper evidence to support the claims for privilege. Indeed, it is not possible to identify what documents – or even categories of documents – are the subject of the claim.
Mr Livesey conceded that it would be appropriate to make a Kadlunga order in respect of the claims for privilege. I will make such an order.
The Act
I invited the parties to make written submissions as to the applicability or otherwise of the Act. The Act applies to a “retail shop lease”, subject to exclusions provided by sub-ss 4(2) and (3). None of those exceptions appear to apply.
There can only be a “retail shop lease” if the premises in question constitute a “retail shop”. “Retail shop” is defined in s 3 of the Act. The plaintiff submitted that the Act did not apply on the basis that the premises were not a “retail shop” as no goods were sold to the public by retail and services were not provided to the public on the premises. The defendant reserved its rights with respect to the issue.
There is no evidence before me on which I could come to a conclusion. The case has been pleaded and argued on the basis that the Act does not apply. It is not appropriate for me to come to any conclusion at this stage.
Orders
I order that:
1.I uphold the claims to privilege in respect of documents AKF.0144 and AKF.0147.
2.I reject the claims to privilege in respect of documents AKF.0145, AKF.0149 and AKF.0150.
3.I dismiss paragraphs 2 and 3 of FDN 19.
4.Within 28 days the plaintiff file and serve a further List of Documents in respect of which privilege is claimed and describing those documents without disclosing their contents in sufficient particularity as to enable the Court to decide if the privilege claimed is maintainable.
5.The documents produced for inspection by the defendant be returned to the defendant’s solicitors.
6.Permission to the parties to apply for further directions and orders – including as to costs, if necessary – as they may be advised.
I will arrange for the matter to be listed for a further directions hearing.
0
4
1