Blenkinsop v Jeffrey Laurence Herbert as trustee of the Blenkinsop Family Trust [No 2]
[2017] WASC 47
•15 FEBRUARY 2017
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BLENKINSOP -v- JEFFREY LAURENCE HERBERT AS TRUSTEE OF THE BLENKINSOP FAMILY TRUST [No 2] [2017] WASC 47
CORAM: ALLANSON J
HEARD: 15 FEBRUARY 2017
DELIVERED : 15 FEBRUARY 2017
FILE NO/S: CIV 1537 of 2014
BETWEEN: JUDITH ANNE BLENKINSOP
Plaintiff
AND
JEFFREY LAURENCE HERBERT AS TRUSTEE OF THE BLENKINSOP FAMILY TRUST
First DefendantJEFFREY LAURENCE HERBERT AS TRUSTEE OF THE BLENKINSOP FAMILY TRUST NO 2
Second Defendant
Catchwords:
Trusts - Application by beneficiary for production of documents - Claim of legal professional privilege by other beneficiary - Purpose of documents - Turns on own facts
Legislation:
Nil
Result:
Application dismissed with costs
Category: B
Representation:
Counsel:
Plaintiff: Mr C R Bailey
First Defendant : Mr S J Dundas
Second Defendant : Mr S J Dundas
Other party : Mr S F Blenkinsop
Solicitors:
Plaintiff: Williams & Hughes
First Defendant : HWL Ebsworth Lawyers
Second Defendant : HWL Ebsworth Lawyers
Other party : S F Blenkinsop
Case(s) referred to in judgment(s):
AWB Limited v Cole [2006] FCA 571; (2005) 152 FCR 382
Commissioner of Australian Federal Police v Propend Finance [1997] HCA 3; (1997) 188 CLR 501
Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49, 65
Federal Commissioner of Taxation v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266
Grant v Downs [1976] HCA 63; (1976) 135 CLR 674
GSA Industries (Aust) Pty Ltd v Constable [2001] QSC 180; [2002] 2 QdR 146
Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357
Schreuder v Murray [No 2] [2009] WASCA 145; (2009) 41 WAR 169
Sparnon v Apand Pty Ltd (1996) 68 FCR 322
ALLANSON J:
(These reasons were delivered orally on 15 February 2017 and have been edited)
Jeffrey Laurence Herbert is the trustee of two family trusts: the Blenkinsop Family Trust and the Blenkinsop Family Trust No 2. He was appointed to that office by order of this court in January 2016. At the time of his appointment, there were these proceedings between the plaintiff, Judith Anne Blenkinsop, and the trustees. Mrs Blenkinsop is a beneficiary of each trust but her claim is brought as a creditor.
Mrs Blenkinsop sought informal discovery from specified categories of documents to the extent that they were in the possession, custody or control of the trustee. These included all accounting analyses performed by Mr Herbert, PPB Advisory and BSM Accountants relating to any loans made by Mrs Blenkinsop and William Frederick Blenkinsop to the two trusts, together with documents referred to in those analyses.
Mr Herbert did not oppose discovery. In an affidavit, dated 7 February 2017, he said this:
1.That within weeks of his appointment in January 2016 he decided to prepare a report on the claimed loan accounts for the purpose of understanding the nature, calculation and extent of the liabilities alleged to be owing by the trust to Mrs Blenkinsop, with a view to determining the amounts actually owed. The review process included reviewing all loan account entries in the financial statements for each trust; summarising and categorising the entries on a spreadsheet; identifying unexplained credits and other queries; attempting to match unexplained credits to reciprocal movements in asset accounts and providing explanatory notes; and preparing a report containing his analysis of the loan accounts. It is that report, now referred to as the Loan Account Analysis, which lies at the bottom of this application.
2.When he commenced preparing the Loan Account Analysis, Mr Herbert had proposed to provide it to Mrs Blenkinsop and her children (all of whom are guardians and beneficiaries) and to request information relating to queries identified and other comments to assess the amount owed, subject to any legal advice; to advise beneficiaries of the outcome; and, in the event of objections, to appoint an independent expert to review the issues raised: see affidavit of Jeffrey Laurence Herbert, sworn 7 February 2017 [10], [11]. Mr Herbert says that he advised the appointors and guardians of the trusts of his proposed approach.
3.On 7 December 2016 Mr Herbert received a request from the solicitors acting for Mrs Blenkinsop for a copy of the Loan Account Analysis. On 20 December, through his solicitors, Mr Herbert advised the other guardians of the trusts of the request and of his intention to provide a copy.
4.Correspondence followed in which Scott Blenkinsop and Kim Holland, both of whom are both beneficiaries and guardians, asserted a claim to joint privilege in the Loan Account Analysis and did not consent to it being provided to Mrs Blenkinsop.
Mr Herbert states, unequivocally, that the Loan Account Analysis was prepared for the dominant purpose of his assessing the extent which the amount stated in the financial statements of the trust are properly owed. It does not contain any legal advice from, or comments or questions to lawyers for legal advice on particular issues, and it contains information that he and advisory staff had sourced from the trust's financial statements and other documents. It is, in effect, an analysis of accounting and other records.
On 8 February 2017 Mrs Blenkinsop's application for discovery came before me. Mr Blenkinsop did not then attend. Mr Herbert did not consent to the order for discovery because of the attitude expressed by Mr Blenkinsop and Ms Holland, but did not oppose it. For reasons which I gave orally at the time, I made an order for informal discovery to be given.
After that hearing Mr Blenkinsop wrote to my associate, by email, requesting a hearing at which he could put his objection to production and his claim to joint privilege. He said that although he was aware of the hearing on 8 February, he was not given formal notice and only became aware of it the day before. Because the order had been made in his absence, and because, although he is not a party to the action by Mrs Blenkinsop, he was claiming privilege in documents, I listed this matter for hearing today.
In support of his claim for joint privilege, Mr Blenkinsop has filed an affidavit, sworn 14 February 2017. In it he states:
1.On 15 June 2016 he applied to the Supreme Court for judicial advice as to whether, as a beneficiary of each trust, he was entitled to inspect a brief to counsel prepared by the trustee's solicitors in connection with the action by Mrs Blenkinsop, and the opinion delivered in response to the brief. The application was made to the court because the trustee refused to grant access.
2.In September 2016 the master made consent orders which included that Mr Blenkinsop be provided with access to the brief and the opinion of counsel.
3.The brief included the document which Mr Herbert has described as the Loan Account Analysis.
Mr Blenkinsop states that he considers that the Loan Account Analysis is subject to legal advice privilege and litigation privilege by reason of being included in the brief to counsel for the purposes of counsel's opinion. He submitted that the document which he has seen is not accurately described by Mr Herbert in his affidavit, although he does not, and in my opinion cannot, challenge what Mr Herbert has said regarding the purpose for which it was brought into existence.
Analysis
Legal professional privilege often applies to documents because privileged communications are frequently in writing and privilege questions frequently arise in the context of discovery of documents. Thus, privilege in this case is said to attach to a document, the Loan Account Analysis. But where privilege applies, it applies to communications, not to pieces of paper: Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49, 65 [36].
A document created for the dominant purpose of obtaining legal advice, or obtaining or providing legal services attracts privilege: Esso Australia [67]. A document is not privileged from production where one purpose for its creation is to obtain legal advice, but there are one or more equally important other purposes: AWB Limited v Cole [2006] FCA 571; (2005) 152 FCR 382, 411 [106]; Federal Commissioner of Taxation v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266, 279 - 280 (Kenny J).
When the relevant communication is a document, the use made of the document is not determinative. The test is 'anchored to the purpose for which it was brought into existence': Commissioner of Australian Federal Police v Propend Finance [1997] HCA 3; (1997) 188 CLR 501, 508 (Brennan CJ). The relevant question is 'what was the intended use of the document which accounted for it being brought into existence': Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357, 366; Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, 692 (Jacobs J).
The purpose for which a document is brought into existence is a question of fact. That purpose will ordinarily be that of the maker of the document, but this will not always be the case. In Pratt Holdings v Commissioner of Taxation, Finn J said that 'attention must focus on the purpose or purposes of the person who created the document or who, if not its author, had the authority to and did procure its creation': [36]. In this case, on the evidence, that is Mr Herbert.
Evidence given by a person involved in the making of the document is not decisive as to the purpose for which the document came into existence: Sparnon v Apand Pty Ltd (1996) 68 FCR 322, 328; GSA Industries (Aust) Pty Ltd v Constable [2001] QSC 180; [2002] 2 QdR 146, 153. In this case, however, it is the only evidence of purpose. On the basis of Mr Herbert's affidavit, no privilege attaches to the Loan Account Analysis. It may be that a particular copy of the document, as part of the brief for legal advice, will attract privilege because the communication to the legal advisor is a privileged communication. But that is specific to that communication and not to all copies of the document. That is sufficient to dispose of this application.
I will, however, comment briefly on a further issue raised by Mr Blenkinsop, that the privilege is a joint privilege. If Mr Blenkinsop can assert privilege jointly with Mr Herbert as trustee, it is a privilege common to the beneficiaries. In his affidavit, Mr Blenkinsop attempts to distinguish his position from that of Mrs Blenkinsop by referring to his vested indefeasible interest in trust income for particular years, by reason of default provisions under each trust deed (that is the vesting of income where the trustee makes no distribution for the relevant period). That, in my opinion, is not sufficient to distinguish him from the other beneficiaries for this purpose with regard to documents of the trust relating to the trust property, including the one in question. If there is a joint privilege, it is held by the trustee and the beneficiaries. Persons entitled to joint privilege are entitled together to maintain it against third parties but not to maintain it against each other: Schreuder v Murray[No 2] [2009] WASCA 145; (2009) 41 WAR 169 [64] ‑ [65] (Buss JA). Mrs Blenkinsop is not, in this context, a third party. The claim for privilege is dismissed, and the application to reopen and set aside my earlier orders is dismissed.
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