Boensch v Pascoe

Case [2007] FCA 532

FEDERAL COURT OF AUSTRALIA

Boensch v Pascoe [2007] FCA 532

PRACTICE AND PROCEDURE – privilege – legal professional privilege – production of documents by solicitor in response to s 77A bankruptcy notice – inadvertent tender of documents by counsel – whether waiver of privilege

Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 referred to
DES (Holdings) Pty Limited v Intertan Inc [2003] FCA 384 referred to
Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 referred to
Lombe v Pollack [2004] FCA 264 referred to
Mann v Carnell (1999) 201 CLR 1 followed
Van Zonneveld v Seaton [2004] NSWSC 960 referred to

FRANZ BOENSCH v SCOTT DARREN PASCOE AND SABINE BOENSCH
NSD 2356 OF 2006

JACOBSON J
16 APRIL 2007
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2356 OF 2006

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT

BETWEEN:

FRANZ BOENSCH
Appellant

AND:

SCOTT DARREN PASCOE
First Respondent

SABINE BOENSCH
Second Respondent

JUDGE:

JACOBSON J

DATE OF ORDER:

16 APRIL 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT Orders 1, 3 and 4 sought in the appellant’s notice of appeal filed on 13 February 2007 be made.

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

NSD 2356 OF 2006

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT

BETWEEN:

FRANZ BOENSCH
Appellant

AND:

SCOTT DARREN PASCOE
First Respondent

SABINE BOENSCH
Second Respondent

JUDGE:

JACOBSON J

DATE:

16 APRIL 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Introduction

  1. The real issue in this appeal can be stated shortly.  It is whether the tender by counsel of six documents, forming part of a 73 page exhibit, constituted a waiver of privilege in the six documents.

  2. Ironically, the issue arose at first instance in the course of an application to claim privilege over a separate part of the 73 page exhibit.  The learned Federal Magistrate found that legal professional privilege had been waived in the six documents.  His Honour said, at [11] of his judgment of 22 November 2006, that counsel for the party who tendered the documents “specifically eschewed” any suggestion of inadvertence in the tender.  He proceeded on the basis that the tender was deliberate.

  3. The appellant, Mr Boensch, contends that his Honour was in error in concluding that the tender was deliberate and that any claim of inadvertence had been eschewed.  Mr Boensch submits that, upon the proper application of the principle stated by the High Court in Mann v Carnell (1999) 201 CLR 1 at 13, there was no implied or accidental waiver of privilege in the six documents.

  4. The essential reason why this issue arises is the failure of the solicitor who produced the documents to the first respondent, Mr Pascoe, and to the Court, to make proper enquiry as to the extent of the materials comprised within the documents that were produced and tendered.

  5. In the hope of…

Continue reading Boensch v Pascoe

Sign in free to access the full text

Details
AGLC
Boensch v Pascoe [2007] FCA 532
Case
[2007] FCA 532
Decision Date

CaseChat Overview and Summary

In the case of Boensch v Pascoe, the parties involved were Mr Boensch, a bankrupt, and Mr Pascoe, his trustee in bankruptcy. The dispute centred on the admissibility of certain documents in legal proceedings, specifically whether these documents were subject to legal professional privilege. The matter was heard in the Federal Magistrates Court, with a subsequent appeal to a higher court. The central legal issue was whether the privilege claimed over certain documents had been waived through the voluntary act of counsel in tendering those documents in court.

The court examined whether the privilege over the documents in question had been waived. The Federal Magistrate found that the privilege over the documents in Exhibit SDP6 had not been waived, but that the privilege over the Extra Documents had been waived due to the intentional act of disclosure by counsel. The court applied the test for implied waiver of privilege as set out by the High Court in Mann v Carnell, which requires an intentional act of disclosure inconsistent with the maintenance of confidentiality. The court held that the act of tendering the Extra Documents in court constituted such an intentional act, thereby waiving the privilege over those documents.

The court's reasoning focused on the distinction between the documents in Exhibit SDP6 and the Extra Documents. While the privilege over the documents in Exhibit SDP6 was upheld, the court determined that the privilege over the Extra Documents was waived due to their inclusion in the tender of Exhibit 1. The Magistrate concluded that the act of tendering these documents was deliberate and inconsistent with the maintenance of confidentiality, thus resulting in the waiver of privilege. This decision was subsequently appealed, but the appeal did not alter the finding on the waiver of privilege over the Extra Documents.

The final orders of the court confirmed that the privilege over the documents in Exhibit SDP6 was maintained, whereas the privilege over the Extra Documents was waived. This ruling underscored the importance of the distinction between the documents in determining the applicability of legal professional privilege in the context of the proceedings.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The critical documents, for the purpose of this judgment, fall into three categories. The first category is the six documents that were tendered as part of Exhibit JL1. I will call them the Extra Documents. The second category is certain documents produced to Mr Pascoe and described in my reasons as the First Documents. The third category is certain documents described as Exhibit SDP6 in the application heard before his Honour on 22 November 2006.The Background Facts Mr Boensch is a bankrupt. Mr Pascoe is his trustee in bankruptcy. The second respondent, Mrs Boensch, is Mr Boensch’s wife. On or about 30 August 2005 Mr Pascoe gave a notice under s 77A of the Bankruptcy Act 1966 (Cth) to the former solicitor for Mr and Mrs Boensch, Mr James Leong. That section of the Act provides for compulsory production of the documents and records of a bankrupt whose examinable affairs are under investigation. On or about 30 September 2005 Mr Leong answered the s 77A notice by providing a number of documents to Mr Pascoe. I will call the documents that were produced to Mr Pascoe in answer to the notice “the First Documents”. Mr Leong’s evidence before the Federal Magistrate was that he did not obtain any instructions from Mr Boensch before answering the s 77A notice. Accordingly, Mr Leong had no instructions to claim privilege, nor does he appear to have made such a claim when he produced the First Documents to Mr Pascoe. Moreover, he did not have instructions to waive privilege. Nearly ten months later, on 19 July 2006, Mr Pascoe commenced proceedings in the Federal Magistrates Court against Mr and Mrs Boensch seeking orders under ss 120 and 121 of the Bankruptcy Act setting aside certain transactions entered into between Mr and Mrs Boensch prior to the date of the sequestration order. The application filed in the Federal Magistrates Court was supported by an affidavit sworn by Mr Pascoe. Exhibited to the affidavit was a bundle of documents produced to Mr Pascoe by Mr Leong in answer to the s 77A notice. The documents were described as Exhibit SDP6. I will refer to those documents as Exhibit SDP6 in these reasons. Counsel for Mr Boensch submits that the documents in Exhibit SDP6 are a subset of the First Documents. I have not inspected Exhibit SDP6 but the description of them in Mr Pascoe’s affidavit filed on 19 July 2006 in the Federal Magistrates Court, as a bundle of file notes of meetings or conversations, indicates that the submission is correct. The matter came before Federal Magistrate Raphael for directions on 15 August 2006. The legal representatives for Mr and Mrs Boensch stated that a claim for privilege was to be made over the documents contained in Exhibit SDP6. His Honour directed that any application in relation to the admissibility of Exhibit SDP6 be filed by 5 September 2006. On 8 September 2006, Mr and Mrs Boensch filed a document entitled “Amended Interim Application” seeking inter alia a declaration that the documents comprising Exhibit SDP6 were documents to which legal professional privilege attaches. His Honour then made an order for the determination of that issue, and an associated question, as a separate question under Part 17 of the Federal Magistrates Court Rules 2001. His Honour also referred to the hearing of a preliminary question under s 189 of the Evidence Act 1995, although it is difficult to see how the occasion for such a hearing had arisen.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JACOBSON J
The “certain documents” to which Mr Heath referred, were the documents in Exhibit SDP6. They were the subject matter of the hearing, not the Extra Documents to which the argument moved only after they were tendered.His Honour’s reasons for judgment His Honour said at [6] that the essence of Mr Johnson’s argument was that the tender of Exhibit 1, that is to say Mr Leong’s statement and the exhibit described as Exhibit JL1, was a voluntary act of counsel which had the effect of bringing into the public domain all the documents contained in Exhibit 1 (including the Extra Documents) and waiving any privilege therein. His Honour then observed at [7] that, as Mr Heath had correctly pointed out, this was a hearing solely to determine whether the contents of Exhibit SDP6 were the subject of privilege. His Honour went on to say at [9] that unfortunately the documents contained in Exhibit 1 were not confined to those in Exhibit SDP6. He said that some of the documents in Exhibit 1 were new documents that had not previously been seen by Mr Pascoe (that is, the Extra Documents). The substance of his Honour’s reasons may be found in the following paragraphs:“[10] What then is the situation with regard to those? Mr Heath says that these documents are no different from SDP6 documents and that Mr Leong’s statement in paragraphs 50 and 51 is sufficient to provide privilege to them. But I have difficulty with that. The documents which are contained in the Exhibit are not the documents which are annexed to the statement. I made it clear yesterday that I appreciated that the documents found in the Exhibit may have been placed there as a matter of inadvertence or for some other reason which might mitigate a loss of privilege. But those appearing for the respondents specifically eschewed such an approach. All I am left with then is a deliberate tender of documents which could have been tendered under cover with no more than a description and added to the list of SDP6 documents if that was thought appropriate. But it was not.[11] It seems to me that in those circumstances the dicta of his Honour the Chief Justice in Birks [(1990) 19 NSWLR 677] at 683-684 would apply notwithstanding Mr Heath’s eloquent argument of the special nature of these proceedings. It is an argument that I accept but only for those documents for which these proceedings applied, namely the documents in SDP6.” I granted leave to appeal from his Honour’s orders and judgment on 6 February 2007.Whether there was a waiver of privilege over the Extra Documents The test of implied waiver of privilege was stated by the High Court in Mann v Carnell at [29]. Their Honours pointed to an intentional act of disclosure which was inconsistent with the maintenance of confidentiality in the communication. Their Honours went on to say that “[w]hat 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 confidentiality”. They said the test is “not some overriding principle of fairness operating at large”.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

Full text does not contain this section.