Arysta Lifescience Australia Pty Ltd v Patton - [2018] SASC 83

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
ARYSTA LIFESCIENCE AUSTRALIA PTY LTD v PATTON & ORS
[2018] SASC 83
Judgment of Judge Dart a Master of the Supreme Court
18 June 2018
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION - GROUNDS FOR RESISTING PRODUCTION - LEGAL PROFESSIONAL PRIVILEGE - WAIVER OF PRIVILEGE
Order for preservation of evidence made pursuant to Rule 149 - whether discretion to permit inspection of the documents should be exercised - defendants say documents privileged from inspection - consideration of litigation privilege and advice privilege - Court inspection of the disputed documents.
Held:
1. Claim for privilege made out in part.
2. Plaintiff entitled to inspect documents not subject to privilege.
Supreme Court Civil Rules 2006 (SA) r 149, referred to.
Evans Deakin Pty Ltd v Orekinetics Pty Ltd & Ors [2002] QSC 42, applied.
Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316; Brookfield Multiplex Ltd v International Litigation Funding Partners PTE Ltd (No 2) [2009] FCA 449; Esso Australia Resources v Commissioner of Taxation (1999) 201 CLR 49; Grant v Downs (1976) 135 CLR 674; Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; Network Ten Ltd v Capital Television Holdings (1995) 36 NSWLR 275; Perazzoli v BankSA (A Division of Westpac Banking Corporation Ltd) [2017] FCAFC 204; Rich v Harrington [2007] 245 ALR 106, considered.

ARYSTA LIFESCIENCE AUSTRALIA PTY LTD v PATTON & ORS
[2018] SASC 83
JUDGE DART:

On 19 March 2017 the Court made an order pursuant to Rule 149 for the purpose of preserving evidentiary material. The evidentiary material is primarily comprised of business records stored electronically. An issue has arisen in respect of the entitlement of the plaintiff to inspect the evidence that has been collected.
Background
The plaintiff is a company owned by a global entity listed on the New York Stock Exchange. Its primary business is the franchising of the Hannaford system of mobile grain cleaning and grading. Franchisees take the mobile machines to various farming properties for the purpose of seed grading, cleaning and to treat seed and grain after harvest. The treatment often involves the application of chemicals.
The first and second defendants are husband and wife. Teldata Pty Ltd (“Teldata”) is the third defendant. The first defendant is the director of that company and each of the first and second defendants are shareholders. The Grain Team Pty Ltd (“the Grain Team”) is the fourth defendant. The first defendant is the sole director of that company, which was registered on 6 November 2015.
The Hannaford system franchising arrangement has 30 franchisees operating across Western Australia, South Australia, Victoria and New South Wales. The plaintiff holds various registered trademarks. The mobile machines used in the conduct of franchises have a capital value of between $250,000 and $750,000, depending on the size of the machine. The plaintiff provides the majority of the required chemicals to its franchisees.
The business is seasonal. The busiest period of the year for franchisees is from approximately October to April. That involves both the harvest and planting periods. Client lists are developed for each franchise territory and are compiled and maintained by the plaintiff.
Relevantly, there were a series of franchises conducted on Eyre Peninsula known collectively as the Kellidie Bay Franchise Agreements. There were three separate franchises. The first and second defendants became involved with the Kellidie Bay Franchises in 2013 as employees. Each signed an operator’s agreement in 2013. The operator agreement contained a number of obligations, including an obligation to keep confidential information in respect of the Hannaford system. The obligation of confidence was expressed to extend beyond the termination of the franchise agreements. The operator agreement also contained a restraint provision. The restraint provision sought to prevent the first and second defendants competing with or being engaged in a competitive business or from soliciting the clients of the plaintiff’s franchises.
In September 2014 a Mr Paul Hutchinson started negotiations with the plaintiff with a view to taking over the conduct of the three Kellidie Bay franchises. In the result, he incorporated a company called Hannaford (Eyre Peninsula) Pty Ltd (“HEP”). The company changed its name to M106 Pty Ltd in 2016 and is now in liquidation. In November 2014 HEP commenced operating the three Kellidie Bay franchises and an additional three franchises. Each of the six franchises had a separate territory on the Eyre Peninsula. The first defendant became the authorised representative of HEP.
By letter dated 20 October 2016, addressed to the plaintiff’s solicitors, the solicitors for HEP gave notice of an intention to terminate all six of the franchise agreements. The plaintiff’s solicitors responded by letter dated 30 October 2016 in which they stated that HEP was not entitled to terminate the franchise agreements. The letter also said that the purported termination was an act of repudiation, which the plaintiff could elect to accept or reject. No election was made at that time.
In December 2016 HEP advised, by its new solicitor, that it had ceased trading. In response the plaintiff’s solicitors stated that HEP had repudiated the franchise agreement by ceasing to trade or by abandoning the franchises. That was said to be a fundamental breach of the contractual arrangement and allowed for immediate termination by the plaintiff.
After the termination of the franchise agreements it came to the attention of the plaintiff that a particular machine, known as an Edmonds Seed Grader, was being used by someone on Eyre Peninsula with the plaintiff’s trademarks attached to it. It also became apparent to the plaintiff that clients of the Kellidie Bay franchises were being serviced by the first and second defendants in what the plaintiff regarded as a breach of the contractual restraints contained in the operator agreements. It further became apparent that the first two defendants had established a new business trading under the name “The Grain Team”.
The purpose of these proceedings is to determine whether, as alleged by the plaintiff, the first and second defendants and their corporate entities have acted in breach of their contractual or other obligations.
The subject order
Upon the request of the plaintiff, an ex parte order was made on 19 May 2017 protecting electronic data and allowing access to that data. The order was made pursuant to Rule 149 of the Supreme Court Civil Rules, which provides as follows:
149—Orders for custody and control of evidentiary material
(1)The Court may, on its own initiative or on application by a party to proceedings (or proposed proceedings) before the Court, make orders for—
(a)the custody and control of evidentiary material;
(b)the preservation of evidentiary material.
(2)The Court may make orders for access to evidentiary material in the control of the Court or a person to whom the Court has given the custody or control of the material under subrule (1).
(3)The Court may, for any good reason, dispense with notice of an application under this rule.
The operative part of the order is found in paragraph 5, which is in the following terms:[1]
[1]    Restraining Order 19 May 2017, FDN9.
5.Mr Jean-Pierre du Plessis, a partner in the firm of Ferrier Hodgson and/or Mr Josh Schwarz, a Forensic Analyst employed by Ferrier Hodgson (together Ferrier Hodgson) be permitted to remove the Computers from the custody of the Court or have access to them at the address in Port Lincoln to which they are delivered (upon their undertaking to preserve them) and make an electronic image thereof and:
5.1     …
5.2     that Ferrier Hodgson be permitted to inspect and search the images made by him pursuant to order 5 for the purpose of identifying and making a record of the data and records on the Computers:
(a)which is or is in the nature of:
(i)lists of clients or customers of the plaintiff;
(ii)lists of clients or customers of Hannaford (Eyre Peninsula) Pty Ltd;
(iii)lists of clients or customers of Kellidie Bay Pty Ltd; and/or
(iv)data relating to any such clients or customers and any extract from or copy or adaptation thereof; and/or
(b)which evidences conduct on the part of the defendants (or any of them) that directly or indirectly involves them engaging or participating in the provision of any services which are similar to or are competitive with the plaintiff’s business and relate to or involve the supply of seed grading, seed treatment or grain cleaning services and/or the sale or supply of seed treatments or other agricultural chemicals on the Eyre Peninsula; and/or
(c)which evidences details of the services involving the supply of seed grading, seed treatment or grain cleaning services and/or the sale or supply of seed treatments or other agricultural chemicals on the Eyre Peninsula including the dates on which the service or good was supplied, the client to whom it was supplied and the price paid for the supply;
(d)which evidences the terms upon which the defendants are occupying and carrying on business from the premises located at 33 Pine Freezer Road Port Lincoln; and
(e)which evidences the terms upon which the defendants have assumed the conduct of the business formerly conducted by Hannaford (Eyre Peninsula) Pty Ltd under and pursuant to any one of the 6 franchise agreements made between that company, Mr Paul Hutchinson and the plaintiff;
The plaintiff engaged the firm of Ferrier Hodgson for the purpose of conducting a search of the various electronic records. That search uncovered approximately 7000 documents. A further search was conducted using key words to establish the relevance of the documents which had been obtained from the various electronic records. That search reduced the number of documents to approximately 4300. The plaintiff has inspected most of those documents without complaint from the defendants.
Defendants oppose inspection
These reasons deal with documents in respect of which there is a dispute as to the plaintiff’s entitlement to inspect. The defendants filed three lists at Court, FDN15, FDN16 and FDN17.[2] The lists contain approximately 160 documents. After discussions between the parties, and further consideration by the plaintiff, there are now approximately 80 documents from those lists which the plaintiff still wishes to inspect. The defendants object to inspection. Folders containing copies of the 80 documents have been provided to the Court.
[2] Each filed 2 November 2017.
The objections of the defendants are that:
1The documents are not documents relevant to or of the type for which the Court ordered production in paragraph 5.2 of the order.
2The Court should not permit inspection of the documents at this point in time, because the purpose of Rule 149 is to preserve evidence and the Court need not go beyond that at this time. The Court’s discretion to permit inspection should not be exercised.
3That a number of the documents are subject to a claim for legal professional privilege.
The first point made by the defendants is the documents are not relevant. The position of the plaintiff is that, by date and description, the subject documents would appear to be relevant to issues in dispute between the parties. I am not satisfied that, in the circumstances, the evidence put before the Court by the defendants establishes the documents are outside of the terms of the order.
The second point of the defendants goes to whether the Court should exercise the discretion to allow access to the documents. Rule 149 clearly provides that there will be circumstances in which it will be appropriate for the Court to grant access to the evidentiary material. It might be thought that, in the usual case, access would be granted. The interests of justice are most likely to be advanced by allowing litigants the opportunity, at an early time, to make an assessment of the merits of their respective cases. Quarantining evidence from an inspection by one or more of the parties is likely to delay an assessment of merits of the litigation.
The defendants say that the disputed documents are private and confidential and that the Court should be slow to permit inspection. There is considerable merit to that submission. All Court processes requiring disclosure are an intrusion on the right of a person to keep private their documents. It is always a balancing exercise to decide between the right to privacy and a fair and open litigation process. It is a matter the Court should always have regard to.
The defendants rely on the case of Metso Minerals (Australia) Ltd v Kalra (No 3).[3]That was a Federal Court decision dealing with an Anton Piller order. That is a slightly different type of order than the one made in this case, but the defendants submit that the differences are immaterial. In Metso Minerals Flick J said:[4]
[3] [2008] FCA 1201.
[4] Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201 at [28].
In that context, it is considered that the discretion to allow an applicant to inspect seized documents may be exercised to permit:
(a) an assessment to be made as to whether or not there has been compliance with the order as made and (possibly) whether any further order pursuant to O 25B may be warranted;
(b) the identification and separation from the entirety of those documents that were in fact seized, those documents which do or may provide evidence pending the hearing and determination of a proceeding; and
(c)the identification and separation from the entirety of those documents that were in fact seized, those documents which do not provide such evidence so that those documents may be returned.
And, in identifying those documents which should be preserved pending the final hearing and determination of a proceeding:
(d)the search is not limited to those documents directly related to the precise cause of action then known: cf Aristocrat Technologies Australia Pty Ltd v Global Gaming Pty Ltd [2006] FCA 862 at [6]–[7] per Allsop J; Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2006] FCA 1707 at [4] per Jacobson J.
There may well be other reasons for granting leave to an applicant to inspect seized documents. All of the purposes identified, however, have one thing in common -- they allow the documents which have been seized to be inspected in order to ensure that the search order has been complied with and to ensure that only evidence which should be preserved is in fact preserved pending the final determination of a proceeding.
The approach of Flick J was to limit the exercise of discretion for the purpose of establishing compliance with the subject order and to ensure the documents to be preserved were only those documents which needed to be preserved because of their evidentiary value. That is, with respect, a narrow approach to the question of inspection.
The plaintiff submits that the approach adopted by Flick J is not relevant, as we are not dealing with an Anton Piller order. They say the preferable approach was that adopted by Chesterman J in Evans Deakin Pty Ltd v Orekinetics Pty Ltd & Ors.[5] The matter involved a dispute in relation to alleged misuse of confidential information. The plaintiff wished to inspect particular devices manufactured by the defendants in alleged breach of their obligations in respect of the plaintiff’s confidential information. Again, the rule in question was not identical, but is similar to the rule in question here. It permitted the court to make an order for the inspection of property if it was property about which a question may arise in proceedings:[6]
The discretion conferred by the rule is a wide one. It should not be limited by the superimposition of conditions not found in the rule itself. The order should not be made unless, on the material before the court, it is proper to do so. It must be remembered that the rule exists to promote the efficient and economical conduct of litigation. If the result of an inspection would tend to bring about such a result the discretion should, I apprehend, ordinarily be exercised in favour of inspection subject to there being some counter-vailing circumstance. To say that there must be formidable grounds for alleging an infringement before inspection will be ordered is to say only that there must be sufficient grounds for making the order. I do not think there is any benefit in using any more particular or pejorative adjective. It is no doubt true that an order for inspection of property will not be made unless there is some evidence that the plaintiff's rights are being infringed and that an inspection will facilitate proof of the claim. This, I expect, is all that is meant by saying there must be a substantial and genuine dispute. There are, of course, degrees of suspicion as well as of proof. It is pointless to resort to semantic differences and refuse inspection where there is "mere suspicion" of an infringement, but allow it where there is "strong suspicion" or "proof" of it, even if the proof be weak. The discretion conferred by UCPR 250 should be addressed by considering whether in all the circumstances of a particular case the plaintiff has shown sufficient grounds for intruding on the defendant's property.
In my opinion inspection of the defendants' machines is likely to provide a firmer framework for the dispute than would exist without it. It is likely to limit the scope for misunderstanding or irrelevancies to develop. It will assist the parties to define the features of the machines which are said to incorporate information the plaintiff claims to be confidential to it. In the long run it is likely to save time and costs. I concur in the remarks of Romer LJ in British Xylonite (263):
"I cannot help feeling myself that sooner or later an inspection will have to be made, and the sooner it is made the better for reasons of economy and saving further trouble and expense."
The defendants all but concede that inspection of their machines will be appropriate in the future, at least if the plaintiff deposes in more detail to its case. I think it pointless to require the parties to engage in more interlocutory skirmishing. There is already, in my opinion, an indication of contrivance in the defendants' solicitors' correspondence in answer to the plaintiff's requests for inspection.
[5] [2002] QSC 42.
[6] Evans Deakin Pty Ltd v Orekinetics Pty Ltd & Ors [2002] QSC 42 at [19]-[20].
In my opinion, the approach to the exercise of the discretion discussed by Chesterman J is preferable. The defendants concede that some or all of these documents will need to be inspected in due course. They submit that they should not be available for inspection by the plaintiff until they have been disclosed formally by the filing of a list of documents. The efficient progress of this litigation will be enhanced by allowing inspection of the documents sooner rather than later. It is appropriate to exercise the discretion given by Rule 149(2), to permit the plaintiff to inspect disputed documents.
Legal professional privilege

The entitlement to inspect is subject to the Court dealing with the plaintiff’s assertion that all of the 80 documents are subject to a legitimate claim for legal professional privilege.
In Grant v Downs[7] the High Court made clear that it is for the party making a claim for privilege to establish that the subject documents are in fact properly privileged.[8] The plaintiff submits that the defendants have not made out the claim for privilege. It needs to be borne in mind that a legitimate claim for legal professional privilege may arise in at least two particular circumstances.
[7] (1976) 135 CLR 674.
[8] Grant v Downs (1976) 135 CLR 674 at 688-689
The first circumstance is litigation privilege. The Court is dealing with the protection of communications. Documents are the manifestation of the protected communications. Such communications in respect of actual or proposed litigation are protected in the circumstances set out in the authorities.
In respect of litigation privilege two considerations arise. They are how closely must the communication relate to the litigation and how likely is there to be litigation? In Esso Australia Resources v Commissioner of Taxation[9] the High Court established that for a communication to be protected by litigation privilege it must be for the dominant purpose of actual or reasonably apprehended litigation. In Australian Competition and Consumer Commission v Yazaki Corporation[10] Besanko J considered the appropriate test to determine whether a communication was in respect of litigation. His Honour said:[11]
In Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 at 341, [19], Batt JA, after analysing the authorities including Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 (“Grant v Downs”), said that litigation will be contemplated where there is a real prospect of proceedings being issued as distinct from a mere possibility. The commencement of litigation does not have to be more likely than not. Callaway JA expressly agreed (at 333, [3]) and Charles JA agreed with the reasons of Batt JA. In this Court, Goldberg J took a different view in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 (“ACCC v Australian Safeway Stores”). His Honour said (at 559) that proceedings were reasonably anticipated where:
... there is a reasonable probability or likelihood that such proceedings will be commenced – not that they will be but rather that more probably than not they will be.
The difference between the two tests was discussed by the Full Court of this Court in Visy Industries Holdings Pty Ltd and Others v Australian Competition and Consumer Commission [2007] FCAFC 147; (2007) 161 FCR 122 (“Visy Industries v ACCC”). Weinberg J reviewed the authorities, both in this country and in other common law jurisdictions, and said that as the test of “reasonably anticipated” required such close attention to the facts, the application of the two tests was likely to make a difference in only a handful of cases (130131, [24][34]). Lander J (with whom Moore J agreed) discussed the issue, but, as far as I can see, his Honour did not express a preference for one test over the other (at 140141, [67][70]).
In ASIC v Australian Lending Centre (at 306, [23]) Perram J said that the weight of authority favoured the real prospect test over the more likely than not test. Since his Honour considered the matter, it has been considered by a Full Court in Ensham Resources Pty Ltd v AIOI Insurance Company Ltd and Others [2012] FCAFC 191; (2012) 209 FCR 1. That decision is binding on me and it provides that litigation is reasonably anticipated where there is a real prospect of litigation (at 10, [54][57] per Lander and Jagot JJ).
[9] (1999) 201 CLR 49.
[10] [2014] FCA 1316.
[11] Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316 at [31]-[32].
A consideration of the meaning of “dominant purpose” was undertaken in Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority.[12] The principal judgment was written by Batt JA, with whom Charles and Callaway JA agreed. His Honour said:[13]
In its ordinary meaning "dominant" indicates that purpose which was the ruling, prevailing, or most influential purpose.[14] Barwick, C.J., whose view in Grant v. Downs propounding the test of dominant purpose has now been adopted by the majority decision in Esso Australia Resources, distinguished "dominant" from "primary" and "substantial".[15] Lord Edmund-Davies in Waugh,[16] in adopting the test propounded by Barwick, C.J., was of the view that the element of clear paramountcy should be the touchstone. That, as it seems to me, shows the meaning of "dominant".
I propose to assess the defendants’ claim for privilege by applying the real prospects of litigation approach.
[12] [2002] VSCA 59.
[13] Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59 at [10].
[14] FCT v. Spotless Services Ltd. [1996] HCA 34; (1996) 186 C.L.R. 404 at 416.
[15] FCT v. Spotless Services Ltd. [1996] HCA 34; (1996) 186 C.L.R. 404 at 416 at 678.
[16] FCT v. Spotless Services Ltd. [1996] HCA 34; (1996) 186 C.L.R. 404 at 416 at 543.
The second circumstance in which legal professional privilege may arise is advice privilege. Obviously enough, not all communications between solicitor and client relate to litigation, but all such communications are intended to be confidential.
In Brookfield Multiplex Ltd v International Litigation Funding Partners PTE Ltd (No 2)[17] Finkelstein J had to consider the issue of advice privilege. His Honour said:[18]
Legal professional privilege has its origins in Elizabethan times: see Berd v Lovelace [1576] EngR 9; (1577) Cary 62; [21 ER 33]. Strangely, certain aspects of the privilege are still to be settled. The current view is that there are two branches of legal professional privilege – they are usually referred to as advice privilege and litigation privilege. Advice privilege is concerned with direct communications between a lawyer and his client, or their respective agents or employees: Greenough v Gaskell [1833] EngR 333; (1833) 1 My & K 98; [39 ER 618]; Anderson v Bank of British Columbia [1876] 2 Ch D 644, 649. Initially the privilege was confined to communications in relation to existing or contemplated litigation: The Southwark and Vauxhall Water Company v Quick (1878) 3 QBD 315; Wheeler v Le Marchant (1881) 17 Ch D 675. That is no longer the case: Grant v Downs [1976] HCA 63; (1976) 135 CLR 674.
The rationale for advice privilege is to promote “the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers”: Grant v Downs at 685. To qualify, the usual criteria are that the communication must be: (a) confidential; (b) of a professional nature; and (c) made with the intention of obtaining or giving legal advice: 1 McCormick on Evidence (6th ed, 2006) § 88; Baker v Campbell (1983) 153 CLR 52, 115-116. The third proposition should be amplified. The advice given or sought need not be confined to matters of legal principle. It may include advice as to what should or should not be done in a “relevant legal context”: Balabel v Air India [1988] Ch 317, 330 per Taylor LJ (“[L]egal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context”); Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610.
[17] [2009] FCA 449.
[18] Brookfield Multiplex Ltd v International Litigation Funding Partners PTE Ltd (No 2) [2009] FCA 449 at [2]-[3].
Thus, for the defendants to establish the validity of the claim for legal professional privilege in respect of the disputed document, they must establish to the Court’s satisfaction that the documents satisfy the criteria for either or both of litigation or advice privilege. A related issue is said to arise in these proceedings. That is whether the defendants to these proceedings, or some of them and HEP, are entitled to claim common interest privilege. There is no controversy in respect of the principle that, where two parties with a common interest exchange communications and advice relating to the interest, the documents exchanged will be privileged from production, whichever of the parties holds the information.[19]
[19] Network Ten Ltd v Capital Television Holdings (1995) 36 NSWLR 275 at 279.
The test is quite strict and the common interest must be very closely aligned. If there is any potential for the interests to diverge, then the common interest privilege does not arise. In Rich v Harrington Branson J said: [20]
However, two persons interested in a particular question will not have a common interest for the purpose of common interest privilege if their individual interests in the question are selfish and potentially adverse to each other; in such a case there will not be the necessary identity of interest: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 410.
[20] [2007] 245 ALR 106 at [68].
Her Honour also went on to discuss issues of waiver. The plaintiff submits that, even if privilege is established, it has been waived. A party may impliedly or expressly waive the entitlement to maintain a claim for privilege in a variety of circumstances. Her Honour said:[21]
At common law a person who would otherwise be entitled to the benefit of client legal privilege will waive that privilege, perhaps unintentionally, if he or she engages in conduct that is inconsistent with the maintenance of the confidentiality that the privilege protects: Mann v Carnell (1999) 201 CLR 1; 168 ALR 86; [1999] HCA 66 at [28] per Gleeson CJ, Gaudron, Gummow and Callinan JJ.
[21] Rich v Harrington [2007] 245 ALR 106 at [9].
In cases where it is not clear whether a document is privileged or not, it sometimes falls to a judicial officer to inspect the document or documents, to determine the question.
In Perazzoli v BankSA (A Division of Westpac Banking Corporation Ltd)[22] the Full Federal Court was considering an appeal from a primary judgment which dismissed a party’s claim that documents were properly subject to a claim for legal professional privilege. The primary judge did not inspect the subject documents. That fact was the basis of a distinct ground of appeal. In the joint judgment of Perram, Foster and Murphy JJ the Court said:[23]
In our respectful view, the primary judge did not pay sufficient regard to the Privilege Schedule, treated Mr Griffin’s evidence as unequivocal when it was far from that, made findings incompatible with the document descriptions in the Privilege Schedule, and thereby mistook the facts. His Honour’s approach was contrary to that recommended in Esso (at [52]), where the plurality said that a court should not be hesitant in examining documents in respect of which disputed claims of privilege are made. In the circumstances, and having regard to the seriousness of the adverse consequences for the appellants and class members of a loss of privilege over important documents in major litigation, the primary judge should not have reached the findings that he did without examining the documents. The appellant suffered a “substantial wrong” because, had the primary judge examined the documents, the only available conclusion would have been that there was a real prospect of litigation from October 2009 and that litigation privilege attached to the relevant documents.
[22] [2017] FCAFC 204.
[23] Perazzoli v BankSA (A Division of Westpac Banking Corporation Ltd) [2017] FCAFC 204 at [104].
In the circumstances, and having regard to the considerations raised in Perazzoli, I have inspected the disputed documents. The three sets of documents relate to different issues. The documents in FDN15 relate to this litigation. The documents in FDN16 relate to a dispute between certain of the defendants and Graintech, which is a separate dispute. The documents in FDN17 relate to a dispute between HEP (M106) and the plaintiff.
In undertaking the inspection of the documents, I had regard to the principles of litigation privilege, advice privilege and common interest privilege set out above. I also considered the issue of waiver. I have come to the following conclusion:
1In respect of the documents in FDN15, the claim for legal professional privilege is not made out, save for document number 4046 which is privileged.
2In respect of the documents in FDN16, the claim for legal professional privilege is made out in respect of all documents except document number 4073.
3In respect of the documents in FDN17, the claim for legal professional privilege is not made out except for documents numbered 4108, 4110, 4145 and 4184 which are privileged.
I will hear the parties as to the form of orders to be made