Billington and Billington (No. 2)

[2007] FamCA 786

FAMILY COURT OF AUSTRALIA

BILLINGTON & BILLINGTON (NO. 2) [2007] FamCA 786

FAMILY LAW – EVIDENCE - Legal professional privilege asserted over communications with engaged professionals - Need to call evidence to establish dominant purpose of the communications where the circumstances do not appear to obvious to be in the pursuit of legal advice - Waiver of privilege in respect of lawyer’s file concerning communication where the other end of the communication is volunteered by non-lawyer

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

AWB v Cole (2006) 152 FCR 382
AWB Ltd v Honourable Terrence Rhoderic Hudson Cole (No 5) (2006) 155 FCR 30
ESSO Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49
Grant v Down (1976) 135 CLR 674
Kennedy v Wallace (2004) 142 FCR 185
Mann v Carnell (1999) 201 CLR 1

APPLICANT: MRS BILLINGTON

RESPONDENT: MR BILLINGTON

FILE NUMBER: SYF 3567 of 2005

DATE DELIVERED: 20 July 2007

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cronin J

HEARING DATE: 9, 10, 11 & 12 July 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richardson SC with Mr Kearney

SOLICITOR FOR THE APPLICANT: Barkus Edwards Doolan

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Watts McCray

Orders

1. That the husband produce to the wife for inspection:

   (a)all file notes and correspondence between the solicitors for the husband and Mr G in relation to the valuation of  the P Group; and

   (b)all file notes and correspondence between the solicitors for the husband and MJ in relation to the discrete inquiries by MJ of the said solicitors in the course of the provision of information to the court-appointed single expert, the attendances for which were billed to the husband and for which the husband now seeks a contribution from the wife.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Cronin delivered this day will for all publication and reporting purposes be referred to as Billington v Billington

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3567 of 2005

MRS BILLINGTON

Applicant

And

MR BILLINGTON

Respondent

REASONS FOR JUDGMENT

1. This is the second interlocutory judgment during the final hearing of the property trial between the parties.

2. This matter was briefly argued before me on 12 July 2007 and I made an order that the solicitors for the husband produce to the solicitors for the wife, various documents about which the claim of legal professional privilege had been asserted.

3. There are two main issues arising out of the argument. 

4. Both arguments relate to the question of whether the husband should be required to produce correspondence and file notices of his legal practitioners in respect of their dealings with:

   a)Mr G, a forensic accountant engaged by the husband; and

   b)the husband’s accountants.

5. Notwithstanding the apparent wide nature of these issues, the discrete documents pursued by the wife relate to:

   a)the “flip side” or other end of the communication and dialogue of the legal practitioner for the husband with Mr G where his file has been produced and already inspected; and

   b)the correspondence and communication between the husband’s legal practitioner and the husband’s accountant relating to specific items on an invoice sent by the accountants to the husband for specific professional work done on the husband’s behalf to comply with the request for information by the court appointed (and agreed) single expert.

6. The second or latter issue above arises because the husband seeks a contribution from the wife towards the cost to him of production of the documents and information by his accountants to the single expert.  The wife has been provided with not only the invoices associated with the production of the documents but also the time/cost sheets of the accountants.  Those time records show communications between the husband’s legal practitioner and the accountants in respect of the discrete task to which I have referred.

7. It is the husband and not the accountant who proposes that the wife contribute towards those costs.

8. The issue of whether the wife should contribute is a contentious one.  The wife argues that the single expert’s request was nothing out of the ordinary and that the husband should have been able to answer the queries personally.  The husband argues that he had not the expertise so he handed the issue to his accountants to respond.

9. The general rule is that the parties share the cost of the single expert but these are the costs of the husband’s compliance with the single expert’s request.  It must be borne in mind that the single expert was valuing the husband’s interest in an international architectural business.

10. The husband now argues that the file notes and documents between his accountant and his legal practitioner are protected by legal professional privilege.

11. The first or other of the issues is also not simple. 

12. In Reasons for Judgment in this case, I ruled that the husband could not rely upon the proposed adversarial witness Mr G.  Quite independently of that ruling, the file of Mr G has now been produced and inspected by the wife’s legal practitioners.

13. Senior Counsel for the wife asserts that having undertaken the inspection, it may be that the file is not complete and therefore the “flip side” of the communications with the husband’s legal practitioner should be examined.  The husband argues that those are covered by legal professional privilege.  The wife argues that the privilege has been waived and notwithstanding the husband cannot now call the adversarial expert, the waiver remains and the documents should be produced.

14. The husband maintains not only that the adversarial issue is no longer alive but in any event, he does not waive his right of privilege.  The husband says that if the issue is really about the file records being incomplete then that is a matter for the enforcement of compliance with the subpoena.

15. Senior Counsel for the wife argues, and I think correctly, if a party wishes to rely upon the privilege, the onus is on them to prove its existence.  There was no suggestion that the husband would call evidence about these issues.  Even if there could be said to be some evidence to support the privilege, in my view, the issue is clear.

16. The onus of establishing that legal professional privilege applies to the documents or the communications they evidence is on the person who seeks to rely upon it.[1]

    i)[1] Grant v Downs (1976) 135 CLR 674 at 689

17. If the document is created for the “dominant purpose” of obtaining legal advice, it attracts privilege[2]

    ii)[2] Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49

18. The “dominant purpose” test is that expressed by Barwick CJ in Grant v Downs[3]

    ...a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.

    iii)[3] op cit

19. There are several authoritative definitions of dominant purpose but each directs the attention to something more than primary or substantial.  The question I have asked myself in this case is what was the prevailing purpose for which the documentary record of the communications came into existence.

20. In AWB v Cole[4] and AWB Ltd v Honourable Terrence Rhoderic Hudson Cole (No 5)[5]  Young J observed:

    The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions.

    iv)[4] (2006) 152 FCR 382

    v)[5] (2006) 155 FCR 30

21. Here, I am dealing with the matter on submissions but, also being aware of the invoices of the accountants, I have not been asked to read the relevant documents. Indeed, it is suggested that some of the documents may take time to disgorge because they will still be part of the running file of the legal practitioners.

22. The immediate difficulty is in determining the question of the reason why these documents were brought into existence objectively.  I think I am entitled to assume that in the normal course of events, legal advice was being sought.  However, in respect of both of the issues that I have to determine, the underlying issue was accounting advice or assistance for either the single expert or discussions centring round the value of the business.  Without evidence of the fact that legal advice was so sought, I cannot objectively determine that that was the dominant purpose.

23. In Kennedy v Wallace[6], Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given.  The circumstances here could not be said to be “uncontroversial”.

    vi)[6] (2004) 142 FCR 185

24. Referring back to Young J’s decision above, his Honour made the following pertinent observation:

    The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character.

25. To fall within that definition, some evidence would be needed to establish just what the context was.  I do not have that specific evidence but I do have an unequivocal indication that the proposed adversarial witnesses’ documents have been examined and in respect of the husband’s accountants, they provided information to the single expert.

26. The parties still have a significant dispute about the valuation of the PTW Group and as such, the cross-examination of the single expert by both parties will be important.  In the interests of justice, it is vital that information about the PTW Group in the possession of the husband or his professional advisors that may assist in that determination should also be available to the wife.

27. Notwithstanding this is a matter being conducted in the middle of a hearing, both of the issues which I have referred to above do not appear to me to relate to adducing evidence but rather to what might be loosely termed “pre trial procedure”.  On that basis, the Common Law applies rather than the provisions of the Evidence Act 1995 (Cth).

28. I propose to treat the issue of the MJ accountancy matters differently from what I might describe as the G issue.

29. Thus, dealing first with the MJ matter, apart from the fact that counsel asserted that the accountants contacted the legal practitioners and therefore, the privilege applied, I do not know specifically why the conversations and documents in relation to the provision of materials to the single expert ought be protected.

30. Accordingly, I am not satisfied that there is evidence upon which a claim of legal professional privilege can be sustained.

31. The second issue relating to the communication between the husband’s legal practitioners and Mr G is again slightly different.  It is asserted here by the wife that there has been a waiver.

32. The facts are that having initially claimed the privilege in relation to what was described as communications with the husband’s legal practitioners, the husband conceded that the documents could be examined and thereby waived the privilege.  The documents that the wife now pursues are those in the hands of the legal practitioners which would record the same communications as those about which the privilege was waived.

33. The waiver of privilege can be either express or implied.

34. What is covered is arguable but it is interesting that the Evidence Act points the way.  It refers to the adducing of documents necessary for a proper understanding of the communication.  In this case, to properly understand what transpired between Mr G and the legal practitioners, the documents that are the “flip side” of what Mr G produced need to be disclosed because otherwise, the examiner could be looking at one side of the conversation as well as only Mr G’s understanding of the instructions about the Group that he was being given.

35. The more important issue however is that the waiver having been made in respect of the G documents, in my view, it must apply to all documents associated with the issue.  It is argued that there was no waiver by the husband but in my view there has been either an express waiver by the handing over of the documents of Mr G and if I am wrong about that, then there has been an implied waiver.

36. The test for an implied waiver of privilege was set out in Mann v Carnell[7] where the majority (Gleeson CJ, Gaudron, Gummow and Callinan JJ) stated:

    vii)[7](1999) 201 CLR 1 at 29

    What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

37. To rely upon and demand the maintenance of the privilege one way, that is, in respect of the communications recorded in the lawyers’ files with Mr G but not the other way, that is, in respect of the same communications with his records of the communications would be conduct which is inconsistent with the conduct preserved by the privilege.

38. Accordingly, I rule that the privilege has been waived in respect of the communications between

I certify that the preceding Twenty Nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  20 July 2007