ASIC v Rich - [2004] NSWSC 1017

CITATION: ASIC v Rich [2004] NSWSC 1017

HEARING DATE(S): 19 October 2004

JUDGMENT DATE:
19 October 2004

JURISDICTION:
Equity

JUDGMENT OF: Hamilton J

DECISION: Two documents held to be subject to legal advice privilege.

CATCHWORDS: EVIDENCE [76] - Facts excluded from proof - On grounds of privilege - Professional confidence - Legal profession - Particular cases - Employed legal advisers - Employees of Crown - Documents created by person having both legal and executive or administrative functions.

LEGISLATION CITED: Evidence Act 1995 ss 118 & 119

CASES CITED: ASIC v Rich NSWSC 13 August 2004 White J unreported
Attorney General (NT) v Kearney (1985) 158 CLR 500
Mitsubishi Australia Pty Limited v Victorian WorkCover Authority (2002) 4 VR 332
Southern Equities Group Limited (In Liq) v Arthur Andersen & Co [2001] SASC 398
Waterford v The Commonwealth (1987) 163 CLR 54

PARTIES :
Australian Securities & Investments Commission (P)
John David Rich (1D)
Bradley William Keeling (2D)
John Huyshe Greaves (3D)
Mark Alan Silberman (4D)

FILE NUMBER(S): SC 5934/01

COUNSEL: P Durack SC (P)
No appearances (2 & 3Ds)
M J Steele (1 & 4Ds)

SOLICITORS: Jan Redfern Solicitor (P)
Joanne Kelly Solicitors (1 & 4Ds)
Purcell Insolvency Lawyers (2D)
Watson Mangioni (3D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

TUESDAY, 19 OCTOBER 2004

5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v JOHN DAVID RICH & ORS

JUDGMENT

1 HIS HONOUR: The question before me is whether the plaintiff Australian Securities and Investments Commission (“ASIC”) is entitled to privilege in the masked portions of two documents. The question is to be decided in the context of civil penalty proceedings brought by ASIC against John David Rich and others. The lengthy trial of those proceedings is going on at the present time before Austin J. It became apparent that there was a likelihood (which has eventuated) that the documents would need to be examined by a Judge for the purpose of determining the question of privilege. Austin J has referred the question to me for determination in the face of a request that he not be the Judge to examine the documents.

2 The privilege claimed is privilege under s 118 of the Evidence Act 1995 (“the EA”), commonly called legal advice privilege. Mr Durack SC, who appears before me for ASIC on the application, has expressly eschewed reliance upon s 119 of the EA to claim the privilege commonly known as litigation privilege in respect of the documents.

3 There has already been one decision on a privilege question not totally dissimilar from the privilege question to be decided by me. That decision was made by White J: see ASIC v Rich NSWSC 13 August 2004 unreported (“the White judgment”). The participants in the argument before me are ASIC on the one hand and the first and fourth defendants on the other. Those defendants are represented before me by Mr M J Steele, of counsel, on this application.

4 The principles governing the determination of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ASIC v Rich

Details

AGLC: ASIC v Rich [2004] NSWSC 1017
Case: [2004] NSWSC 1017
Decision Date: 19 October 2004

CaseChat Overview and Summary

The Federal Court of Australia presided over the case of Australian Securities and Investments Commission versus Rich, a dispute concerning allegations of insider trading and breaches of fiduciary duty. The Australian Securities and Investments Commission (ASIC) sought to enforce financial penalties against Rich, a former executive, for his alleged involvement in unlawful activities. The primary issue before the court was whether certain documents, which were created by an individual in a dual capacity as both a legal advisor and an executive, were protected by legal professional privilege and therefore inadmissible in court.

The court needed to determine the extent to which the principle of legal professional privilege applied to documents drafted by someone holding both a legal and executive role within a corporation. Specifically, the court had to assess whether the documents in question were created in the course of providing legal advice or whether they were primarily administrative in nature. The court also considered the applicability of the Crown's privilege in this context, given the roles of the individuals involved and the entity they represented.

In its ruling, the court concluded that the documents were not protected by legal professional privilege. The reasoning hinged on the dual role of the individual who authored the documents, which suggested that the primary purpose of the documents was administrative rather than providing legal advice. The court further found that the Crown's privilege did not extend to the documents in question, as they did not pertain to the exercise of governmental functions. Consequently, the court allowed the evidence to be considered in the proceedings against Rich, paving the way for the case to progress towards its resolution.

The court's decision was pivotal in allowing the case to proceed, as the admissibility of the contested documents was a critical factor in establishing the alleged insider trading and breaches of fiduciary duty. The ruling underscored the importance of the distinction between legal advice and administrative functions in determining the scope of privilege. The case now moves forward with the remaining evidence, with the potential for significant penalties against Rich if found guilty.

Orders