and Australian Securities Commission v Dimitri, Peter

[1997] FCA 1434

FEDERAL COURT OF AUSTRALIA

PRACTICE & PROCEDURE     )
EVIDENCE  ) discovery - claim of legal professional privilege - whether documents should be made available for inspection - whether documents can be said to relate to communications in furtherance (on the client’s part) of an attempt to evade the requirements of an undertaking to the Court - if documents may reasonably be held to be of that kind, inspection on discovery held to be appropriate - discussion of s 121(2) of the Evidence Act.

Evidence Act 1995, ss 121(2), 125(1)

The Queen v Bell; Ex parte Lees (1980) 146 CLR 141
Reg. v Cox and Railton (1884) 14 QBD 153

IN THE MATTER OF STRIKERS MANAGEMENT PTY LIMITED; AUSTRALIAN SECURITIES COMMISSION v PETER DIMITRI

NG 3789 of 1996

Burchett J
Sydney
18 November 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3789 of 1996

IN THE MATTER OF STRIKERS MANAGEMENT PTY LIMITED

BETWEEN:	AUSTRALIAN SECURITIES COMMISSION Applicant
AND:	PETER DIMITRI Respondent

JUDGE:	BURCHETT J
DATE:	18 NOVEMBER 1997
PLACE:	SYDNEY

THE COURT ORDERS THAT:

1. The documents listed 1 to 8 inclusive in the Reasons for Judgment herein be made available for inspection by the legal representatives of the applicant.

1. The respondent pay the applicant’s costs of the application for inspection.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3789 of 1996

IN THE MATTER OF STRIKERS MANAGEMENT PTY LIMITED

BETWEEN:	AUSTRALIAN SECURITIES COMMISSION Applicant
AND:	PETER DIMITRI Respondent

JUDGE:	BURCHETT J
DATE:	18 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

These reasons for judgment are concerned with an application to inspect documents produced by the respondents’ former solicitors under subpoena.  The wider proceeding in which this application is made is a motion to punish the respondent for contempt alleged to have been committed by the breach of an undertaking given to the Court on 2 January 1997, as varied on 13 February 1997.  The varied undertaking was to return to Australia by 27 March 1997, the respondent having gone to the United States of America.

Although the respondent failed to return to Australia within the required period, the applicant says that he was compelled by the United States authorities to do so later, and upon his return the proceeding for contempt was instituted.  In that proceeding, he has appeared in person.

A matter which sometimes causes difficulties in proceedings for contempt, particularly in relation to an undertaking to the Court expressed in positive terms, is proof of the alleged contemnor’s knowledge of the terms of his undertaking:  see Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110. Here, the applicant has sought support for its case by the issue of a subpoena requiring the solicitor who appeared for Mr Dimitri at the time of the giving of the undertaking in question, and again at the time when it was varied, to produce his file. The file has been produced to the Court pursuant to this subpoena, but Mr Dimitri has objected, on the ground of legal professional privilege, to any use being made of the documents produced, and also specifically to their inspection on behalf of the applicant.

Counsel for the applicant claimed to see the documents on a number of bases.  At the forefront of her argument, she placed The Queen v Bell; Ex parte Lees (1980) 146 CLR 141, where Gibbs J said (at 146-147) that the privilege in respect of confidential communications between solicitor and client, “which arises only because the public interest requires it, does not exist when it is seen that it would be contrary to a higher public interest to give effect to it.” But that was a special case involving the paramount consideration of the welfare of a child whose whereabouts were being concealed, and the “higher public interest” to which Gibbs J referred was not at all comparable to the public interest in the prosecution of a motion for contempt. I do not think it is possible to sustain the applicant’s general case that the privilege is inapplicable, in the present circumstances, to the whole of the solicitor’s file.

However, a much firmer basis does appear in Bell for a more limited proposition pertaining to those documents only in the solicitor’s file which can be said to relate to communications in furtherance (on the respondent’s part) of an attempt to evade the requirements of his undertaking to the Court.  Stephen J (at 153-154) and Wilson J, with whom Aickin J agreed, (at 161-162) rested their decision on the principle that the privilege requires “both professional confidence and professional employment”, as the Court had put it in Reg. v Cox and Railton (1884) 14 QBD 153 at 168, and that there can be no professional confidence or professional employment in respect of a client’s plan to engage in unlawful conduct. This principle, discussed in Cross on Evidence 4th Australian ed (1991) at 709-710, is now enshrined in s 125 of the Evidence Act 1995, which relevantly provides:

“(1)    This Division does not prevent the adducing of evidence of:

(a)a communication made or the contents of a document prepared by a client or lawyer (or both) ... in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty”.

I have considered the documents produced under the subpoena. In my opinion, the following documents are, on their face, liable to be produced upon the principle to which I have just referred. Of course, so to state is not to draw any actual conclusion; whether documents do in fact lead to a particular conclusion can only be determined when all the evidence is in. At this stage, if the documents may reasonably be held at the hearing to fall within the terms of s 125(1)(a), as I think they may, that is sufficient to enliven my discretion to order their inspection: cf Interim Report on Evidence of Australian Law Reform Commission (1985) vol 1 para 885; s 125(2) of the Evidence Act.

The documents to which I have referred are:

1. memorandum in handwriting endorsed “7th May 1997. 9.15AM.”

2. copy letter dated 21 April 1997 from the solicitors to Mr Dimitri

3. copy letter dated 2 April 1997 from the solicitors to the Australian Securities Commission

4. handwritten memorandum headed “17/3/97 Peter Dimitri”

5. copy letter dated 4 March 1997 from the solicitors to Mr Dimitri

6. copy further letter of the same date between the same persons

7. copy letter dated 13 February 1997 from the solicitors to Mr Dimitri

8. memorandum headed “13.2.97 Peter Dimitri.”

It may well be that some of these documents would also be liable to be produced for inspection having regard to the terms of s 121(2) of the Evidence Act 1995, but in the circumstances it is unnecessary to pursue that question. The section is very curiously drafted, and the comments of the Australian Law Reform Commission (made at the end of para 885 cited above) are of very little assistance. The difficulty is that the subsection is couched in terms of the effect upon proceedings of the rejection of the evidence, rather than in terms of the nature of that evidence. Does this mean that the same evidence would be admissible or not admissible, depending on whether without it the enforcement proceeding would actually fail or succeed? If so, when is the ruling on admissibility to be given? Fortunately, these questions can be left for another day, since s 125(1)(a) is a sufficient basis for my order.

For the applicant, it was also submitted that the privilege had been waived, but there is no evidence on which I would find such a waiver in respect of any of the documents which are covered by legal professional privilege.  I shall order that the documents listed 1 to 8 inclusive in these reasons be made available for inspection.  As that order represents substantial success for the applicant upon the application, I shall also order that the respondent pay the applicant’s costs.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett

Associate:

Dated: 18 November 1997   

Counsel for the Applicant:	Ms L Muston
Solicitor for the Applicant:	Legal Department of  the Australian Securities Commission
Respondent:	appeared in person
Date of Hearing:	28 July 1997
Date of Judgment:	18 November 1997