Bradford v Devlot 17 Pty Ltd (No 3)
[2021] VSC 368
•25 June 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 01134
| VICKI ADELE BRADFORD and JONATHAN ALAN UPHILL | Plaintiffs/Defendants by Counterclaim |
| v | |
| DEVLOT 17 PTY LTD (ACN 126 265 790) | Defendant/Plaintiff by Counterclaim |
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JUDGE: | Matthews AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7, 9 June 2021 | |
DATE OF RULING: | 25 June 2021 | |
CASE MAY BE CITED AS: | Bradford v Devlot 17 Pty Ltd (No 3) | |
MEDIUM NEUTRAL CITATION: | [2021] VSC 368 | (First Revision 12 July 2021) |
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PRACTICE AND PROCEDURE – Legal professional privilege – Application to ‘clawback’ privileged documents disclosed to adversarial party – Whether disclosure of privileged documents inadvertent – Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 applied.
PRACTICE AND PROCEDURE – Legal professional privilege – Whether plaintiffs’ selective disclosure of privileged material constitutes a broad waiver of privilege in undisclosed documents – Whether inconsistent to maintain privilege claim – Merial, Inc v Intervet International B.V. (No 2) [2016] FCA 1070 considered.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr D.P. Lorbeer | Aitken Partners |
| For the Defendant | Mr P.H. Wallis QC with Mr E. Gisonda | Clayton Utz |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background......................................................................................................................................... 3
What this proceeding is about..................................................................................................... 3
Relevant procedural background............................................................................................... 4
The Return Application.................................................................................................................... 7
The parties’ general submissions regarding the Return Application................................. 10
The Plaintiffs’ general submissions regarding the Return Application.................... 11
The Defendant’s general submissions regarding the Return Application................ 12
The Gorman Return Documents............................................................................................... 15
The Apteds documents.............................................................................................................. 24
The Apted Erroneous Approach............................................................................................... 27
Plaintiffs’ evidence............................................................................................................ 27
The Defendant’s evidence................................................................................................ 32
Submissions........................................................................................................................ 35
Analysis............................................................................................................................... 37
The Erroneous Apted Inclusion................................................................................................ 43
The Aitkens documents.............................................................................................................. 46
The Aitkens 13 Feb Bundle........................................................................................................ 49
The Aitkens 17 Feb Bundle........................................................................................................ 52
The Aitkens 30 Jan Bundle......................................................................................................... 54
Conclusion regarding the Return Application....................................................................... 57
Broader Waiver Application.......................................................................................................... 57
The Defendant’s evidence.......................................................................................................... 58
The Defendant’s submissions.................................................................................................... 59
The Plaintiffs’ evidence.............................................................................................................. 65
The Plaintiffs’ submissions........................................................................................................ 68
Consideration.............................................................................................................................. 74
Whether the disclosed documents which the Defendant says are privileged are privileged.................................................................................................................................. 75
Whether there has been selective disclosure................................................................. 78
Whether it is unfair for the Plaintiffs to selectively maintain privilege in the circumstances.................................................................................................................................. 79
Conclusion regarding the Broader Waiver Application....................................................... 82
Conclusion......................................................................................................................................... 83
HER HONOUR:
Introduction
These reasons concern two matters, both concerning legal professional privilege, which have arisen in the course of this proceeding.
The first matter is an application by the Plaintiffs to clawback certain documents over which they maintain a claim to legal professional privilege which have been disclosed to the Defendant. The Plaintiffs say that the disclosure of these documents to the Defendant is inadvertent and that the documents should be returned to them (‘Return Application’). The Defendant resists this.
The second matter is an application by the Defendant for a ruling that the Plaintiffs have waived privilege over all of the documents produced to the Court by the Plaintiffs’ current solicitors, Aitken Partners (‘Aitkens’), and their former solicitors, Apteds Lawyers (‘Apteds’) in response to subpoenas issued 21 January 2020. This waiver is said to arise as a consequence of the Plaintiffs’ alleged selective disclosure of many documents which would otherwise be the subject of claims to legal professional privilege, which is said to have reached a level where it would be unfair for the Plaintiffs to maintain their privilege claim in respect of the remaining documents (‘Broader Waiver Application’).
While heard together, I shall deal first with the Return Application and then the Broader Waiver Application.
The Plaintiffs rely on the following:
(a) The affidavit of Robert Andrew Bradley sworn 29 January 2021 (‘First Bradley Affidavit’). Mr Bradley is a principal of Aitkens;
(b) Mr Bradley’s affidavit sworn 16 February 2021 (‘Second Bradley Affidavit’);
(c) Mr Bradley’s affidavit sworn 26 March 2021 (‘Third Bradley Affidavit’);
(d) Mr Bradley’s affidavit sworn 3 June 2021 (‘Fourth Bradley Affidavit’);
(e) The affidavit of Elizabeth Susan Apted sworn 18 February 2020 (‘First Apted Affidavit’). Ms Apted is a principal of Apteds;
(f) Ms Apted’s affidavit sworn 20 February 2020 (‘Second Apted Affidavit’);
(g) Ms Apted’s affidavit sworn 16 February 2021 (‘Third Apted Affidavit’);
(h) The affidavit of Lucinda Maree Sheehan affirmed 7 June 2021 (‘Sheehan Affidavit’). Ms Sheehan is a solicitor employed by Aitkens;
(i) Outline of submissions dated 1 April 2021 regarding the Return Application;
(j) Outline of submissions dated 2 June 2021 regarding the Broader Waiver Application; and
(k) An amalgamated outline of submissions of the two outlines referred to above with amendments (‘Plaintiffs’ Combined Outline’).
The Defendant relies on the following:
(a) The affidavit of Vince Annetta sworn 20 April 2021 (‘Annetta Affidavit’). Mr Annetta is a partner of Clayton Utz, the solicitors for the Defendant;
(b) The affidavit of Lucy Margaret Broughton affirmed 23 April 2021 (‘First Broughton Affidavit’). Ms Broughton is a solicitor employed by Clayton Utz;
(c) Ms Broughton’s affidavit affirmed 4 May 2021 (‘Second Broughton Affidavit’);
(d) Outline of submissions dated 21 April 2021 regarding the Return Application (‘Defendant’s Return Outline’); and
(e) Outline of submissions dated 5 May 2021 regarding the Broader Waiver Application (‘Defendant’s Broader Waiver Outline’).
Both parties referred from time to time to other affidavits filed in this proceeding, however the ones mentioned above were the principal affidavits relied upon.
In addition, at my instigation, the documents which are the subject of the Return Application have been listed and described in a table produced by the Plaintiffs, contributed to over time by both parties so that it represents a compendium and brief summary of the documents and the parties’ positions in respect of them (as last updated on 8 June 2021, the ‘Return List’). I will describe the contents of the Return List later in these reasons.
For the reasons which follow:
(a) The Return Application is dismissed with the exception of certain documents, as detailed in paragraph 138 below, which I have found should be returned to the Plaintiffs; and
(b) The Broader Waiver Application is dismissed.
Background
What this proceeding is about
I have previously summarised the subject matter of this proceeding in an earlier ruling I published on 7 May 2020 in Bradford & Anor v Devlot 17 Pty Ltd (‘Application of Issue Waiver Ruling’).[1] For reasons which will become apparent, it has been necessary for me to consider the Return Application and the Broader Waiver Application and publish a ruling as soon as practicable. Accordingly, these reasons assume a familiarity with my earlier Application of Issue Waiver Ruling and I have not repeated matters here. Unless otherwise mentioned in this ruling, defined terms have the same meaning as used in the Application of Issue Waiver Ruling.
[1][2020] VSC 246, [7]-[16].
Suffice to say that the Plaintiffs entered into a contract with the Defendant to sell the Land, with an option for the Plaintiffs to buy back part of the Land. Amongst other things, the parties are in dispute as to whether the option has been exercised and about the portions of the Land to which it applies.
Relevant procedural background
I have not attempted here to outline all of the procedural background, but it is necessary for me to set out some of it as it has a bearing on both of the applications before me, particularly the Return Application.
On 21 January 2020, the Defendant issued a number of subpoenas for the addressee to produce documents to the Prothonotary. Relevantly, these subpoenas included those addressed to:
(a) Matt Gorman and Gyorgi Gorman trading as Big Picture Urban Rural (‘Gorman Subpoena’);
(b) Aitkens (‘Aitkens Subpoena’); and
(c) Ms Apted trading as Apteds Lawyers (‘Apteds Subpoena’).
No objection was taken to the Gorman Subpoena. The Plaintiffs objected to the other two subpoenas referred to above, including on the grounds of legal professional privilege. As it turned out, that ended up being the only basis for the objection that was pressed by the Plaintiffs.[2]
[2]Application of Issue Waiver Ruling, [29].
The addressee of the Gorman Subpoena produced documents to the Prothonotary as required and, there being no objection to that subpoena or to inspection of the documents produced on that subpoena, the Defendant uplifted, copied and inspected the documents on 3 February 2020.[3]
[3]Annetta Affidavit, [9(a)].
When producing documents to the Prothonotary, Aitkens provided a USB stick containing copies of the documents over which the Plaintiffs claimed privilege and a bundle of hard copy documents over which there was no objection. Aitkens indicated that copies of the documents which had not been objected to had been provided to Clayton Utz.[4]
[4]Application of Issue Waiver Ruling, [20]-[23].
When producing documents to the Prothonotary, Ms Apted divided them into separate bundles, based on whether they were said to be privileged or not.[5]
[5]Application of Issue Waiver Ruling, [27].
On 11 February 2020, I heard the objections to the Aitkens Subpoena and the Apteds Subpoena (‘First Hearing’). At that time, the trial of the proceeding was due to commence on 18 February 2020 and therefore the objections needed to be dealt with as expeditiously as possible. At that hearing, one of the Defendant’s arguments was that if the documents produced by Aitkens and Apteds were privileged, then that privilege had been waived. The Plaintiffs conceded that there had been a waiver of privilege, however there was disagreement between the parties as to the scope of the waiver. The basis for the waiver was accepted by both parties as ‘issue waiver’. After hearing the parties and considering the evidence, I gave an oral ruling ex tempore in relation to the scope of the issue waiver at the First Hearing (‘Issue Waiver Ruling’). The Issue Waiver Ruling was recorded in the transcript and is set out in the Application of Issue Waiver Ruling.[6]
[6]Application of Issue Waiver Ruling, [35].
At the conclusion of the First Hearing, I made orders which included:[7]
[7]Application of Issue Waiver Ruling, [36].
(a) The Defendant could inspect the documents produced by Apteds over which privilege was not claimed;
(b) The Plaintiffs were to review (in light of the Issue Waiver Ruling) the documents over which privilege was claimed and provide, by 12.00 pm on 13 February 2020, a list of the documents over which privilege was claimed, whether it was waived, and the basis for that;
(c) By 12.00 pm on 13 February 2020, the Plaintiffs were to produce to the Defendant for inspection copies of the documents over which privilege was no longer claimed or over which privilege had been waived;
(d) By 12.00 pm on 13 February, the Defendant was to file and serve its material in response, which was to include an identification of any documents over which the privilege claim or waiver is disputed, setting out the reasons why;
(e) By 5.00 pm on 14 February, the parties were to confer and advise my Associate which documents remained in dispute and provide any further submissions; and
(f) The further hearing of the objections to the Apteds Subpoena and the Aitkens Subpoena was adjourned to 12.00 pm on 17 February 2020.
The above timetable ended up being extended by consent on at least two occasions and the further hearing of the subpoena objection was re-scheduled for 20 February. On 14 February 2020, the parties had been advised by the Court’s listing coordinator that the trial fixed for 18 February 2020 had been vacated.[8] At that point, a new trial date had not been fixed.
[8]Application of Issue Waiver Ruling, [38].
On 20 February 2020, I conducted a second hearing in relation to the objections to the subpoenas (‘Second Hearing’). The purpose of this hearing was to consider the objections to the subpoenas based on privilege and any dispute between the parties as to whether certain documents fell within or outside the scope of the Issue Waiver Ruling. After hearing submissions from the parties, it became apparent that only the documents produced by Aitkens could be dealt with, as the situation in respect of the Apteds documents should be dealt with after ruling on the Aitkens documents.
Following the Second Hearing, on 7 May 2020 I published the Application of Issue Waiver Ruling. This ruling concerned the dispute between the parties which had arisen to the application of the Issue Waiver Ruling to particular documents produced by Aitkens which the Plaintiffs claimed were privileged and did not fall within the scope of the Issue Waiver Ruling, such that they were not required to be produced for inspection by the Defendant.
In short terms, in the Application of Issue Waiver Ruling I held that privilege in respect of most of the disputed Aitkens documents had not been waived, and I made orders for the production of those documents which I had held were subject to the Issue Waiver Ruling.
The Defendant appealed the Application of Issue Waiver Ruling. As I was a judicial registrar of this Court at the relevant time, an appeal from my ruling proceeded as a de novo review hearing conducted by a judge in the trial division. The Honourable Justice Kennedy heard the appeal and published reasons on 27 November 2020 in Bradford v Devlot 17 Pty Ltd (‘Review Ruling’).[9] Her Honour concluded that my “delineation of the scope of the waiver contained in the Issue Waiver Ruling was essentially correct” and noted that it had not been suggested that I had made an error in my application of the Issue Waiver Ruling to the Aitkens documents.[10] Her Honour dismissed the Defendant’s appeal.
[9][2020] VSC 792.
[10]Review Ruling, [86]-[87].
The Defendant has applied to the Court of Appeal for leave to appeal the Review Ruling. As I understand it, that application has not yet been heard and determined.
On 6 July 2020, the proceeding was set down for trial commencing on 3 February 2021. On 18 December 2020, that trial date was vacated by consent between the parties. On 12 January 2021, the proceeding was set down for trial commencing on 31 August 2021.
With the trial now quite proximate, it has been necessary and desirable, as I noted in paragraph 10 above, for my ruling in respect of the Return Application and the Broader Waiver Application to be delivered as soon as practicable.
The Return Application
As I will shortly explain, the documents which are the subject of the Return Application can conveniently be grouped into the following categories:
(a) Documents produced pursuant to the Gorman Subpoena over which the Plaintiffs claim privilege and wish to have returned to them (‘Gorman Return Documents’);
(b) Documents produced pursuant to the Apteds Subpoena which were disclosed to the Defendant as a result of what is said to be:
(i) Ms Apted’s erroneous understanding and application of the Issue Waiver Ruling (‘Apted Erroneous Approach’); or
(ii) the erroneous inclusion in the bundle of documents provided to Clayton Utz by Aitkens (on behalf of Apteds) on 17 February 2020 of documents which Ms Apted had categorised as privileged and not waived (‘Erroneous Apted Inclusion’);
(c) Documents produced pursuant to the Aitkens Subpoena which were disclosed to the Defendant as a result of what is said to be:
(i) a failure by the Plaintiffs’ lawyers to review a bundle of documents produced to the Defendant on 13 February 2020 to remove documents that had been identified as privileged and not within the scope of the Issue Waiver Ruling (‘Aitkens 13 Feb Bundle’);
(ii) similarly, a failure by the Plaintiffs’ lawyers to review a bundle of documents produced to the Defendant on 17 February 2020 to remove documents that had been identified as privileged and not within the scope of the Issue Waiver Ruling (‘Aitkens 17 Feb Bundle’); or
(iii) in respect of two documents produced to the Defendant on 30 January 2020, a failure to redact emails between Mr Bradley and the First Plaintiff from threads of emails which culminated in emails between Mr Bradley and Mr Gorman (‘Aitkens 30 Jan Bundle’).
For the reasons set out in paragraph 27 above, I have not attempted to set out all of the evidence relied upon by the parties or all of their submissions in respect of the Return Application. The evidence and submissions are on the Court file or recorded in the transcript of the hearing. I have only set out that evidence and those submissions which have been essential to me in determining the application. However, all evidence and submissions have been taken into account.
It is convenient at this point to describe the Return List. The Return List now contains 122 documents. It contains the following columns:
(a) The table and row number in the Plaintiffs’ evidence;
(b) Date of the document;
(c) Description of the document;
(d) Date the document was produced to the Defendant;
(e) Whether privilege was claimed when the document was produced to the Defendant;
(f) Nature of the asserted inadvertent error in production of the document to the Defendant;
(g) Whether the document is a duplicate of another document in the Plaintiffs’ table and, if so, the table and row number in the Plaintiffs’ evidence;
(h) The Defendant’s response; and
(i) The Plaintiffs’ response.
The first seven of these columns were completed by the Plaintiffs, the eighth by the Defendant, and the ninth by the Plaintiffs after seeing the Defendant’s response.
As mentioned above, the Return List was prepared in this way at my direction, so as to have in one table a summary of the position in respect of each of the documents.
The parties’ general submissions regarding the Return Application
Some of the submissions made by the parties were of general application, whereas others were directed to the particular categories described in paragraph 28 above. It is convenient to first summarise these general submissions, and then to consider those in the context of each of the categories, along with the specific submissions on those categories.
Both parties referred extensively to the High Court decision in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (‘Expense Reduction Analysts’).[11] It is convenient to set out here the relevant facts in that case, which were succinctly summarised in the Defendant’s Return Outline.
[11](2013) 250 CLR 303.
The appellants in Expense Reduction Analysts had made discovery of approximately 60,000 documents in substantial commercial proceedings.[12] They had used an electronic database to store, sort and code the documents. Despite using appropriate, adequate and reasonable efforts, including to correctly distinguish privileged and non-privileged documents from each other, 13 privileged documents were disclosed to the respondents as a result of inadvertent error on the part of the reviewers of the documents, which had caused them not to activate the ‘yes’ instruction in relation to privilege thereby causing the database to default to ‘no’ for privilege.[13] As a result of the error, 9 of the 13 documents were included in both the privileged and non‑privileged sections of the discovery list and the remaining 4 were included only in the non-privileged section of the list.[14]
[12]Expense Reduction Analysts, [6], [8].
[13]Expense Reduction Analysts, [10].
[14]Expense Reduction Analysts, [18].
The respondents in Expense Reduction Analysts did not dispute the appellants’ assertions of inadvertence,[15] with the only possible cause of the failure to claim privilege over the documents being the failure of the reviewers properly to manipulate the electronic database.[16] After receiving the discovery list and a copy of the documents, the respondents’ solicitors wrote to the appellants’ solicitors noting that a number of documents appeared to record communications between directors of the corporate appellant parties and solicitors.[17] Eleven days later, the respondents’ solicitors responded, noting that the production of the documents was inadvertent and requesting their return.[18] The respondents refused to return the documents, despite the Court being unable to see any prejudice to the respondents in them doing so or any benefit to the respondents in retaining them based on the pleaded issues in the proceeding.[19]
[15]Expense Reduction Analysts, [4].
[16]Expense Reduction Analysts, [15].
[17]Expense Reduction Analysts, 304 (headnote).
[18]Expense Reduction Analysts, 304 (headnote).
[19]Expense Reduction Analysts, [61]-[62].
The High Court held that the appellants had not waived privilege in respect of the 13 documents and ordered that they be returned to the appellants.[20]
[20]Expense Reduction Analysts, [68].
The Plaintiffs’ general submissions regarding the Return Application
The Plaintiffs submit that the Court’s powers of case management permit it to direct the return of privileged documents which have been inadvertently disclosed, rather than the party seeking the return of such documents having to rely on the equitable jurisdiction of the Court.[21] That is uncontroversial, particularly since the decision in Expense Reduction Analysts.
[21]Expense Reduction Analysts, [7], [55]; Civil Procedure Act 2010 (Vic), s 47(1).
The Plaintiffs rely on the statement of the High Court in Expense Reduction Analysts, that:
Although discovery is an inherently intrusive process, it is not intended that it be allowed to affect a person’s entitlement to maintain the confidentiality of documents where the law allows. It follows that where a privileged document has been inadvertently disclosed, the court should ordinarily permit the correction of that mistake and order the return of the document, if the party receiving the document refuses to do so.[22]
[22]Expense Reduction Analysts, [45].
The Plaintiffs note that the High Court was dealing with documents produced in discovery and that under the earlier approach to applications for the return of documents, it was generally more difficult to obtain relief in respect of a privileged document which had been discovered and that relief was granted more readily in respect of subpoenaed documents.[23]
[23]Relying on Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 (‘Meltend’); Bendigo & Adelaide Bank Ltd v Abdelkodous [2011] NSWSC 32 (‘Abdelkodous’); Mills v Wojcech [2011] NSWSC 86.
The Plaintiffs also submit that in the context of subpoenas addressed to solicitors or former solicitors, the following statement from Kang v Kwan is apposite:[24]
It must be remembered that the privilege is that of the client. Neither solicitor nor an intermediary (who is the agent of either the client or the solicitor) can without the client’s authority either consent to the material being adduced or, again without instructions, abandon that obligation that goes with a solicitor’s retainer, to maintain the privilege. The powers and duties of the solicitor and the agent are not affected by the termination of the solicitor-client relationship or the agency.
[24][2001] NSWSC 698, [29].
The Plaintiffs submit that it is important to bear in mind the context in which the subpoenaed documents were produced and disclosed to the Defendant. The context here is that the subpoenas were received and responded to in close proximity to the then scheduled trial, and that after the Issue Waiver Ruling was delivered, they were under pressure to review documents in light of that ruling, prepare lists and affidavits, prepare for the hearing before me on 20 February 2020, and provide inspection of documents which were not objected to, all within a short space of time and with the Defendant’s solicitors frequently demanding delivery of the documents, and with trial preparation occurring alongside all of this.
The Defendant’s general submissions regarding the Return Application
The Defendant accepted the High Court’s observations in Expense Reduction Analysts that it was appropriate for a party to litigation to be permitted to correct a genuinely inadvertent disclosure of privileged documents by having the documents returned to it without the need for satellite litigation.[25]
[25]Expense Reduction Analysts, [45].
However, the Defendant relied on the principles set out by the High Court as providing limits to the circumstances in which a party will be able to claw back privileged documents, including:
(a) The party must have made ‘every reasonable effort’ to ensure the accuracy of its list of discovered documents;[26]
[26]Expense Reduction Analysts, [46].
(b) The party will only be allowed to correct its error if it acts promptly;[27]
[27]Expense Reduction Analysts, [49].
(c) Relief may be refused where the party to whom the documents have been disclosed has been placed in a position, as a result of the disclosure, where it would be unfair to order the return of the privileged documents;[28]
[28]Expense Reduction Analysts, [49].
(d) Such unfairness may arise where the disclosed documents assume particular importance in the proceeding;[29]
[29]Expense Reduction Analysts, [49].
(e) The Court will closely assess the evidence of the alleged mistake, particularly where the fact of a mistake is disputed by the party to whom the documents were disclosed;[30]
(f) The Court will take into account any conduct on the part of the party seeking relief which may weigh against the grant of relief;[31] and
(g) The Court will also take into account any prejudice that might be suffered by the party to whom the documents were disclosed and any benefit to that party in retaining the documents.[32]
[30]Expense Reduction Analysts, [61]
[31]Expense Reduction Analysts, [61].
[32]Expense Reduction Analysts, [61]-[62].
The Defendant submits that a striking feature of this proceeding is that the Plaintiffs have disclosed to it, at various stages of the proceeding, numerous documents which prima facie would be subject to a proper claim for legal professional privilege. The Defendant submits that the Plaintiffs’ discovery includes several documents which may fall into such a category.
By way of example,[33] the Defendant refers to a file note prepared by Ms Apted as her record of what happened at a meeting held on 9 May 2014 attended by Ms Apted, the Plaintiffs, representatives of the Greater Geelong City Council (‘GGCC’), and Rory Costelloe and Fraser East of the Defendant (‘Discovery Document No 39’). The meeting is referred to in the First Plaintiff’s witness statement, as well as in Mr Costelloe’s witness statement. Mr Costelloe’s witness statement also refers to Ms Apted’s file note. The Annetta Affidavit explains this.
[33]The Defendant’s Return Outline refers to other examples, and its submissions referred to in paragraphs 56 and 57 below are based on the various examples referred to as well as the Plaintiffs’ general approach to claiming privilege and disclosing documents, whether arising from discovery or from a number of different subpoenas issued by the Defendant.
A copy of Discovery Document No 39 was produced by Ms Apted in response to the Apted Subpoena,[34] and is the subject of the Return Application. The Plaintiffs contend that the file note produced by Ms Apted in response to the Apted Subpoena is privileged and was disclosed to the Defendant in error, without making reference to its previous disclosure.[35]
[34]Annetta Affidavit, [5(a)].
[35]Item 50 in the Return List.
The Defendant submits that this demonstrates the incoherent nature of the Plaintiffs’ approach to claiming privilege, as well as underscoring the importance of the documents in question to the issues in dispute in the proceeding and the unfairness to the Defendant in now seeking to have the documents returned to the Plaintiffs.
More fundamentally, according to the Defendant, it calls into question the Plaintiffs’ evidence of the inadvertent nature of their disclosure of the documents the subject of the Return Application. The Defendant submits that the Plaintiffs’ affidavit material in support of the Return Application is confusing, inconsistent, incomplete and largely inadmissible, which is compounded by the fact that parts of that material have been withdrawn and changed.[36]
[36]Second Bradley Affidavit, [7].
The Defendant does not accept the Plaintiffs’ claims of inadvertence and says that the Plaintiffs’ own evidence shows that they did not make reasonable efforts to ensure that the documents they disclosed in response to the subpoenas were not privileged.
I should point out here that the Plaintiffs no longer seek the return of Ms Apted’s file note of the 9 May 2014 meeting (being Item 50 in the Return List), as they accept that a copy of it had previously been discovered. The Defendant acknowledges this, but says that it is unsatisfactory for the Plaintiffs to include the document in the Return Application and only concede it after the Defendant had done the work to show that it had been disclosed to the Defendant months earlier. I accept the submission that this is an unsatisfactory way for the Plaintiffs to approach the Return Application.
The Gorman Return Documents
Eleven of the documents produced by Mr Gorman are the subject of the Return Application and are referred to here as the Gorman Return Documents.[37]
[37]These are Items 105-115 on the Return List: Plaintiffs’ Combined Outline, footnote 38 to paragraph 37.
The return of three of these documents, being Items 107, 114 and 115, is no longer pressed by the Plaintiffs. In respect of Item 107, it had been discovered by the Plaintiffs in their discovery on 13 June 2019. A copy of Item 114 had been produced to the Defendant with the uplift on 11 February 2020 of the Apteds documents not the subject of an objection and again by Aitkens on 1 February 2021. A copy of Item 115 had also been produced to the Defendant by Aitkens on 1 February 2021.
Mr Gorman is a town planner.[38] Ms Apted deposes that Mr Gorman was engaged when she acted for the Plaintiffs (she does not say who engaged Mr Gorman). Mr Gorman was to investigate the current state of the two lot subdivision and to inform Ms Apted and the Plaintiffs of the easiest way to facilitate it and expedite the process wherever possible. Mr Gorman was also to liaise with Fraser East of Villawood (the Defendant’s project manager), and with GGCC in relation to assist with having the two lot subdivision effected as soon as possible.[39]
[38]Second Bradley Affidavit, [33].
[39]Third Apted Affidavit, [3].
Ms Apted also deposes that from time to time, Mr Gorman was privy to communications between her and the Plaintiffs. She says that insofar as those communications concerned the Plaintiffs’ dealings with the Defendant, she considered those communications to be confidential and privileged and she expected Mr Gorman not to disclose them unless he was told otherwise. She also says that she has no reason to think Mr Gorman may have considered himself at liberty to disclose confidential and privileged communications.[40]
[40]Third Apted Affidavit, [4].
Mr Bradley also gives evidence as to his communications with Mr Gorman. He says that from time to time he had privileged communications via email with the First Plaintiff and he sometimes forwarded those to Mr Gorman with some questions for him to address.[41] Mr Bradley states that he has since reviewed the documents produced by Mr Gorman pursuant to the subpoena and “Regrettably some privileged emails between the Plaintiffs on one hand and Ms Apted or me on the other were forwarded to the town planners and produced pursuant to the subpoena.”[42]
[41]Second Bradley Affidavit, [34].
[42]Second Bradley Affidavit, [36].
Mr Bradley goes on to depose as follows:
When I forwarded such exchanges between the Plaintiffs and me to Mr Gorman, I expected that Mr Gorman would treat the communications between the Plaintiffs and me in confidence because, as I deposed to in the [First Bradley Affidavit], from about May 2015 when I was retained by the Plaintiffs, I anticipated a need to file a vendor and purchaser Summons to ascertain the effect of the contracts of sale. Further, I was concerned by the possibility that the Defendant was deliberately engineering a situation that would enable it to retain the land it had agreed to sell back to the Plaintiffs and Mr Gorman was being asked for his professional opinion as to the likelihood that the plans they were then proffering would be rejected. If it was likely that those plans would be rejected, that could support the view that the Defendant was not doing all it could to give effect to the sale agreement, one of the matters about which I was advising and representing the Plaintiffs.[43]
[43]Second Bradley Affidavit, [37].
The Plaintiffs submit that Mr Gorman had a dual role, as described in paragraph 54 above. Mr Bradley deposes that, while acting as the agent of the plaintiffs in their dealings with Mr East and GGCC, his communications were not privileged; but while acting under the engagement with Apteds and then with Aitkens in connection with the legal advice being provided to the plaintiffs, his communications were privileged.[44] On this basis, Mr Bradley deposed that documents which disclose privileged communications with Mr Gorman have been disclosed inadvertently due to a failure to properly observe the distinction between the dual roles occupied by Mr Gorman.[45]
[44]Fourth Bradley Affidavit, [5].
[45]Fourth Bradley Affidavit, [5].
The Defendant does not take issue with the Plaintiffs’ claim to privilege in respect of the documents produced by Mr Gorman which are the subject of the Return Application.[46] Nonetheless, I do note that there has been no evidence adduced to demonstrate that Mr Gorman was included in otherwise privileged communications on the basis of confidentiality and that Ms Apted’s expectations as to his maintenance of confidentiality and privilege was communicated to Mr Gorman. Ms Apted does not go that far in her evidence; she merely explains what she thought and expected. Similarly, Mr Bradley’s evidence is in terms of his expectations of Mr Gorman and there is no evidence that those expectations or conditions of confidentiality were communicated to Mr Gorman. That Mr Bradley goes into some detail about what was in his own mind at the time of forwarding those exchanges to Mr Gorman may be part of the Plaintiffs’ case as to why Mr Bradley’s communications with Mr Gorman were privileged, but that adds nothing to the confidentiality issue so far as Mr Gorman is concerned.
[46]Defendant’s comments in respect of the relevant items in the Return List.
However, since the Defendant has accepted that the Gorman Return Documents are privileged, I will proceed on that basis.
A copy of the Gorman Subpoena was served on Aitkens, as solicitors for the Plaintiffs, on 22 January 2020.[47] No objection to the Gorman Subpoena was made, either by Mr Gorman or the Plaintiffs, and following Mr Gorman producing documents to the Prothonotary in accordance with the Subpoena, Clayton Utz uplifted and copied the documents on 3 February 2020.[48]
[47]Second Bradley Affidavit, [33]; Annetta Affidavit, [5(b)].
[48]Annetta Affidavit, [9(c)].
Mr Bradley deposes that the Plaintiffs did not seek to and did not inspect the documents produced by Mr Gorman prior to them being made available for inspection. Mr Bradley says that at the time Aitkens was served with the Gorman Subpoena, it had already been served with the Aitkens Subpoena which it was dealing with, the trial was listed for 18 February 2020, and the Defendant was pressing for the Plaintiffs’ outline of opening submissions for trial which were due on 28 January 2020. Mr Bradley says that he does not believe that anyone at Aitkens was aware that Mr Gorman had produced documents to the Prothonotary pursuant to his subpoena and so they did not review the documents before they were inspected by the Defendant and did not obtain the Plaintiffs’ instructions in that regard.[49] Mr Bradley goes on to say that:
Given the circumstances, it did not occur to me at the time that Mr Gorman would have privileged documents on his file or that we should seek to inspect the materials he produced before the Defendant did so. I was mistaken in that respect.[50]
[49]Second Bradley Affidavit, [33].
[50]Second Bradley Affidavit, [33].
The Plaintiffs submit that the production of the Gorman documents to the Defendant was not by the Plaintiffs or their solicitors. They submit that in this respect the situation is similar to that in Mills v Wojcech in which it was held that documents produced to the court by a party’s former solicitor under a subpoena to which the party had not objected, copies of which had thereby been obtained by the party’s adversary, remained privileged, and the party was entitled to their return.[51] The Plaintiffs contend that in the circumstances deposed to by Mr Bradley as to not having inspected the Gorman documents first or objecting to the Gorman Subpoena, the Defendant obtained copies of the Gorman documents through the Plaintiffs’ inadvertence.
[51][2011] NSWSC 86.
The Defendant submits that the Plaintiffs face numerous hurdles in seeking to retrieve the Gorman Return Documents, as they:
(a) failed to make reasonable efforts to claim privilege over the documents;
(b) did not act promptly to retrieve the documents;
(c) allowed one of the emails to be read in open court before seeking to claw it back. The Plaintiffs reject this submission, saying that they had written to Clayton Utz on 19 February 2020 (the day before the email was read in court), asserting privilege in respect of the emails between Mr Bradley and the First Plaintiff in the context of the same email chain earlier produced by Aitkens. They say this claim was renewed at the hearing on 20 February when the document produced by Mr Gorman and Aitkens arose during discussion; and
(d) have picked and chosen which of Mr Gorman’s emails to release to the Defendant, to the point where it would be unfair on the Defendant for the Plaintiffs to now claw back the documents.
The Defendant submits that Mr Bradley’s evidence that it did not occur to him at the time of being served with a copy of the Gorman Subpoena that Mr Bradley would have privileged documents on his file should not be accepted. They say that this is contradictory to his evidence as to Mr Gorman’s role in relation to the transaction and to his own communications with Mr Gorman where he forwarded privileged communications between himself and the First Plaintiff to Mr Gorman for comment and his opinion.
I accept the Defendant’s submission in this regard. It ought to have been obvious to Mr Bradley, as on his own evidence he had forwarded privileged communications to Mr Gorman, that he may have privileged documents on his file. It therefore ought to have been obvious that the Plaintiffs may need to object to the Gorman Subpoena on the grounds of privilege or at the very least seek to inspect them prior to the Defendant having access to them. Further, there is evidence that Mr Bradley had reviewed at least some of Ms Apted’s documents at the time of reviewing documents for privilege in the context of discovery, several months earlier.[52] It therefore must also have been obvious to him that she too had had emails with Mr Gorman which may have contained privileged communications, as some such documents were on her file.
[52]Affidavit of Reuben Amrik Gill sworn 6 February 2020, [5]-[8] (‘Gill Affidavit’); Transcript 7 June 2021, 19.29-20.20, 23.2-5.
Nor do I accept the suggestion in Mr Bradley’s evidence that Aitkens were very busy at the time as somehow excusing or explaining the failure to inspect the Gorman documents first. A simple letter to the Prothonotary prior to the date for production of the documents[53] would have served to prevent the Defendant inspecting the Gorman documents, at least temporarily.[54] After all, the rationale for the requirement that parties serving subpoenas in accordance with Order 42A of the Rules also serve a copy of the subpoena on the other parties to the proceeding and file an affidavit of service to that effect[55] is clearly to give the other parties to the proceeding an opportunity to object to the subpoena or to the inspection of documents. Having complied with the Rules in this regard, and there being no objection filed, there was no obstacle to the Defendant inspecting the Gorman documents and using them in relation to the proceeding.[56]
[53]In accordance with r 42A.08 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’).
[54]By virtue of the operation of r 42A.09 of the Rules.
[55]Rule 42A.04.
[56]By virtue of r 42A.10 of the Rules.
I therefore accept the Defendant’s submission that the Plaintiffs failed to make reasonable efforts to claim privilege over the Gorman documents. The fact is that the Plaintiffs made no such efforts. It follows that I do not accept that the Plaintiffs’ failure to claim privilege over any of the Gorman documents was inadvertent.
I also accept the Defendant’s submission that the Plaintiffs failed to act promptly to retrieve the Gorman documents, essentially for the same reasons. At the earliest, the Plaintiffs raised concerns about some documents, which may have included the Gorman documents, by their letter dated 19 February 2020.[57] In the context of this proceeding, I do not accept that this was acting promptly. I also do not accept that the Gorman documents were squarely raised by that letter.
[57]See paragraph 64(c) above.
Mr Annetta deposes that after obtaining copies of the Gorman documents, they were reviewed by solicitors at Clayton Utz and a significant number of them were forwarded to counsel and to the Defendant. In particular, Mr Annetta says that:[58]
[58]Annetta Affidavit, [9].
(a) Between 3 and 6 February 2020, he read all of the Gorman documents and discussed them with Christine Demiris, a solicitor at Clayton Utz;
(b) On 6 February 2020, he sent a copy of some of the Gorman documents, including Items 105, 108, 109, 114 and 115 in the Return List, by email to Mr Murdoch and Mr Wallis, both counsel retained in the proceeding on behalf of the Defendant;
(c) On the same date, he sent a copy of some of the Gorman documents, including the same as those from the Return List which had been sent to Counsel, to Mr Costelloe by email;
(d) On 6 February 2020, he discussed the contents of some of the Gorman documents, including the ones listed in (b) above from the Return List, with Mr Murdoch, Mr Wallis and Mr Costelloe, separately and together in a conference at Mr Murdoch’s chambers;
(e) On 7 February 2020, Ms Demiris swore an affidavit (‘First Demiris Affidavit’) which exhibited as CZD-2 a copy of two of the Gorman documents, namely Items 105 and 115 in the Return List. The First Demiris Affidavit was relied upon by the Defendant at the hearings on 11 and 20 February 2020 and is referred to in the Application of Issue Waiver Ruling at paragraph 5;
(f) The plaintiffs had previously provided the Defendant with other documents involving prima facie privileged communications with Mr Gorman as part of their discovery and as annexures to the First Plaintiff’s witness statement dated 24 October 2019;
(g) Since receiving the Gorman documents, these have been used by the Defendant in the conduct of this proceeding;
(h) Aitkens’ versions of the Gorman Return Documents corresponding to Items 105 to 107 in the Return List were also produced by Aitkens in response to the Aitkens Subpoena; and
(i) An email chain produced by Mr Gorman (Item 109 in the Return List) includes an email from the First Plaintiff to Ms Apted at 9.54pm on 22 May 2014. The same email chain was produced by Ms Apted (Item 48 in the Return List), yet it is apparent from the email chain itself that on 23 May 2014 at 10.37am, Ms Apted forwarded the email to Mr Gorman and to Mr East (of the Defendant). Originally, the Plaintiffs sought to claw back both of these Items (Item 48 as it was said to have been disclosed as a result of the Apted Erroneous Approach). Now, the Plaintiffs no longer seek to clawback Item 48 but presses its application for the return of Item 109.
Mr Annetta’s evidence in respect of Item 109 was not challenged. Given that evidence, I do not see how the Plaintiffs can press for the return of Item 109 when they no longer press the return of Item 48. For that reason alone, I would not order the return of Item 109.
More importantly, I accept the Defendant’s submission that the Gorman Return Documents have been used by it in the proceeding, including having been read by solicitors, counsel, and a key witness of the Defendant, such that it would be unfair on the Defendant for the Plaintiffs to now retrieve those documents. The Plaintiffs rely on the statement in Expense Reduction Analysts that “in taking such considerations … into account, no narrow view is likely to be taken of the ability of a party, or the party’s lawyers, to put any knowledge gained to one side. That must be so in the conduct of complex litigation unless the documents assume particular importance.”[59] However, I do not consider that in the circumstances of this case, where the documents have not just been inspected but discussed, likely several times, between solicitors, between solicitors and counsel, and with the Defendant’s key witness, that it is sensible to expect that they would be able to put any knowledge gained to one side. Further, given those discussions, it is quite likely that the documents have assumed particular importance in the litigation. After all, we are not talking about documents disclosed during the course of a mammoth discovery several months if not years before trial which have been seen but not discussed or used. We are talking about documents disclosed in a relatively small production of documents closely proximate to trial.
[59]Expense Reduction Analysts, [49].
Even if I accepted that the disclosure of the Gorman Return Documents was inadvertent, which I do not, I will not order their return to the Plaintiffs as I do not accept that the factors identified in Expense Reduction Analysts lead to a conclusion that the documents should be returned. The balancing exercise which those factors entail lead me to the conclusion that such relief should be refused, as the prejudice to the Defendant of ordering the return of the Gorman Return Documents outweighs the prejudice to the Plaintiffs of them not being returned. The Plaintiffs made no effort, let alone every reasonable effort, to claim privilege; they did not act promptly; the Defendant has been placed in a position where, as a result of the disclosure, it would be unfair for them to be ordered to return the documents; and the evidence of the alleged mistake, that is, the purported inadvertence, is unconvincing, as I stated at paragraph 66 above.
I also do not accept that the circumstances of this case are similar to those which pertained in Mills v Wojcech.[60] The Plaintiffs’ description of the case is not inaccurate, however on a reading of that decision it is evident that the Court’s decision rested heavily on both the party claiming privilege not being aware that documents had been produced on subpoena and, more importantly, on a finding that it would have been obvious to the other party’s solicitor when inspecting the document that it was privileged. Here, given the Plaintiffs’ disclosure on several occasions of documents which prima facie appeared to be privileged, including in their own discovery, I accept the Defendant’s submission that it was not obvious that there had been an inadvertent failure to claim privilege by the Plaintiffs in respect of the Gorman Return Documents.
[60][2011] NSWSC 86.
The Apteds documents
It is convenient to set out here the Plaintiffs’ evidence as to the production of the Apteds documents generally, as two of the categories of alleged inadvertence concern these documents and it is less repetitious to set it out in this way.
Ms Apted deposes that before the return date of the Apteds Subpoena, she separated the contents of her copy file (the original of which had already been given to Aitkens) into communications with the Plaintiffs which were privileged and communications with third parties which she thought were not privileged. She says that she understood that the documents in the latter category had already been or would be produced to Clayton Utz.[61] It is common ground that when Ms Apted produced documents to the Court, they were hard copy documents which had been sorted by her into yellow manila folders (not privileged) and pink manila folders (privileged).[62]
[61]Second Apted Affidavit, [6].
[62]First Bradley Affidavit, [5].
Ms Apted deposes that after the Court hearing on 11 February 2020, she reviewed her documents and prepared a list, exhibited as ESA-1 to the First Apted Affidavit, where she identified whether each document was privileged and the basis for that and whether it fell within the scope of the Issue Waiver Ruling.[63] It is not entirely clear what the corpus of documents was which Ms Apted was working from, in that it is not clear from her affidavits whether it was all of the documents she had produced or just those she had earlier identified as privileged and placed in pink folders. I expect that it was the latter, as that is consistent with the approach she took after that date. It is also unlikely that she would have been asked to review the yellow folders in this way, since the Defendant had been able to uplift and inspect those documents, and did so, pursuant to orders I had made on 11 February 2020.[64] The Plaintiffs had not objected to that course at the hearing on 11 February 2020.[65]
[63]First Apted Affidavit, [18].
[64]Annetta Affidavit, [14(a)].
[65]First Bradley Affidavit, [5].
I will not detail here the approach Ms Apted took to identifying which privileged documents fell within the scope of the Issue Waiver Ruling; that will be done later in these reasons.
In respect of the Apteds Subpoena after 11 February 2020, Mr Bradley deposes that:
(a) After the hearing and Issue Waiver Ruling on 11 February 2020, Reuben Gill, a solicitor then employed by Aitkens who was assisting in this matter, contacted Ms Apted and explained that ruling to her;[66]
[66]First Bradley Affidavit, [6].
(b) By a number of emails on 12 and 13 February 2020, Ms Apted forwarded to Aitkens a number of files (which had been scanned) and requested that they be provided;[67]
[67]First Bradley Affidavit, [7].
(c) Aitkens briefed Mr Lorbeer of Counsel to assist in the preparation of materials that the Plaintiffs had been ordered to file;[68]
[68]First Bradley Affidavit, [8].
(d) Ms Apted’s list of documents was forwarded by Aitkens to Mr Lorbeer on 13 February, who reviewed the entries in the list and provided his comments on it that day. Mr Lorbeer had not looked at the underlying documents before doing so. The list was amended by Ms Apted and subsequently reviewed by Mr Lorbeer, including Ms Apted’s draft affidavit, and Mr Lorbeer again provided comments without reviewing the underlying documents. On 17 February 2020 Mr Lorbeer and Ms Apted liaised directly about her draft affidavit and list of documents; [69]
[69]First Bradley Affidavit, [9].
(e) On 17 February 2020, Aitkens produced some of the documents Ms Apted had sent to them on 12 and 13 February 2020 to Clayton Utz;[70]
[70]First Bradley Affidavit, [11].
(f) Subsequent to the Issue Waiver Ruling, the Application of Issue Waiver Ruling and the Review Ruling, Mr Bradley reviewed the documents produced by Ms Apted in the pink and yellow folders and the documents provided to Clayton Utz on 17 February 2020 through Aitkens.[71] He then prepared a list which identifies each of these documents:[72]
[71]First Bradley Affidavit, [20]; Fourth Bradley Affidavit, [12]-[22].
[72]This list is exhibit RAB-4 to the First Bradley Affidavit, the content of which became part of the Return List. See also First Bradley Affidavit, [20]; Fourth Bradley Affidavit, [12]-[22].
(iv) In the pink folders and whether or not each document is or was the subject of privilege;
(v) In the yellow folders in respect of which the Plaintiffs claim privilege, notwithstanding that they were produced to the Court and no objection was made at the hearing on 11 February 2020 to the Defendant inspecting them;
(vi) Identified which of the documents produced on 17 February 2020 in relation to which the Plaintiffs maintain their privilege claim;
(vii) Identifies whether or not the document or communication fell within the scope of the Issue Waiver Ruling.
Although not specifically mentioned in Mr Bradley’s evidence, on 1 February 2021, the Plaintiffs produced certain documents from the Apteds Subpoena to Clayton Utz.[73]
[73]Annetta Affidavit, [16(b)].
I turn now to the two categories of error in respect of the Apteds documents.
The Apted Erroneous Approach
A substantial proportion of the documents which the Plaintiffs seek to claw back are said to have been produced to the Defendant inadvertently as a consequence of the Apted Erroneous Approach.[74]
[74]Some 87 of the items in the Return List fall into this category, according to the Plaintiffs’ Combined Outline, [11]. These are Items 1, 2, 4-11, 13-27, 29-38, 40-41, 42-87, 90-94.
Plaintiffs’ evidence
It is necessary here to go into some detail as to how the Apted documents were reviewed after the Issue Waiver Ruling and produced to the Defendant.
It appears that the First Apted Affidavit was prepared and sworn, and Ms Apted’s list as set out in exhibit ESA-1 was prepared, prior to the error being identified.[75] I will set out the evidence regarding that identification shortly, but consider it useful to make that observation here, before I set out the evidence from the First Apted Affidavit where Ms Apted deposes as to the approach she took.
[75]First Bradley Affidavit, [14].
In the First Apted Affidavit, Ms Apted deposes that:
(a) In accordance with the orders made by me on 11 February 2020, she undertook a review of the contents of her file that was objected to on the basis of privilege;[76]
[76]First Apted Affidavit, [5].
(b) She read the Court orders and the transcript of the Issue Waiver Ruling and the transcript that followed it;[77]
[77]First Apted Affidavit, [5].
(c) She prepared ESA-1 in the manner I have summarised in paragraph 77 above;
(d) She did not have the Plaintiffs’ instructions to waive privilege;[78]
[78]First Apted Affidavit, [8].
(e) As to waiver, when a document in ESA-1
that is privileged is specified as not being the subject of a waiver of privilege, I am of the view that the plaintiffs have not waived privilege in the way specified in the Court’s ruling. I reached that view based on the contents of the document and having regard to the transcript of the ex tempore ruling on 11 February 2020 and the pages of transcript that follow it, and the confidential nature of the communication to me.[79]
[79]First Apted Affidavit, [12].
(f) She read the Issue Waiver Ruling. Ms Apted then goes on to set out her understanding of that, in the following terms (which I will refer to as the First Apted Explanation):
I understand that the plaintiffs conceded that they waived privilege in respect of initial instructions to Aitkens regarding whether there was a concluded agreement made on or about 13 April 2015 between the plaintiffs and the defendants [sic] for the plaintiffs to accept a reduced area of land in full settlement of their entitlements, which the Judicial Registrar said had also been described in submissions as the plaintiffs making an election to accept a smaller parcel of land: T47.8-17. Her Honour ruled, amongst other things, that the Plaintiffs had waived privilege in respect of the issue of whether there was a concluded agreement made on or about 13 April 2015 to accept a smaller parcel of land and in respect of any election by the plaintiffs to accept a smaller parcel of land, so that the waiver was not just in respect of documents recording initial instructions to Aitkens: T48.19-49.4. I observe that there are documents in the list that are dated on or after 13 April 2015 (being the date of the alleged agreement or the plaintiffs’ alleged election). I confirm that I have reviewed those documents in light of her Honour’s ruling, and that the contents of those documents do not relate to whether there was a concluded agreement or election on or about that date. For the purposes of clarity, the contents of those documents do not record or evidence discussions on or about 13 April 2015 between the plaintiffs and the defendant (or their representatives) in relation to the possibility of the plaintiffs accepting a reduced area of land. (As noted, in respect of some correspondence with Aitken Partners, I have referred in the list to the Aitken Partners list for their assessment of whether or not privilege has been waived in respect of the correspondence).[80]
[80]First Apted Affidavit, [13].
Mr Bradley deposes that on 18 February 2020, Ms Demiris made an affidavit which, amongst other things, exhibited documents produced by Ms Apted as exhibit CDZ‑13. He says that upon reviewing that exhibit, it became apparent to him that Ms Apted had adopted an erroneous approach to assessing whether the Plaintiffs had waived privilege. He says that by letter dated 19 February 2020, sent to Clayton Utz the next day, Aitkens raised the error.[81]
[81]First Bradley Affidavit, [14]. A copy of the letter dated 19 February 2020 from Aitkens to Clayton Utz referred to by Mr Bradley (‘Aitkens 19 February 2020 Letter’) is exhibit RAB-2 to the First Bradley Affidavit.
In the Second Apted Affidavit, Ms Apted deposes that:
(a) She first found out that she had to conduct the review on the morning of Wednesday 12 February 2020 when Mr Gill telephoned her;[82]
[82]Second Apted Affidavit, [5].
(b) Ms Apted provides a different explanation as to her understanding of the Issue Waiver Ruling (which I shall refer to as the Second Apted Explanation). She says that she understood from her discussion with Mr Gill that as a consequence of the orders and ruling made at the First Hearing,
we had to produce to the defendant’s solicitors more documents, to reduce the scope of the documents we were claiming privilege over, not to take a narrow view and only to claim privilege over documents that were important to the issues that remained in dispute between the parties (for example, I understood matters that remained in dispute to include whether an agreement had been reached between the parties on or about 13 April 2015). I also understood that the effect of the Court’s remarks was that the plaintiffs could not claim privilege over documents that were relevant to non-contentious matters (for example, matters leading up to the execution of the Deed of Variation dated 15 January 2014). I understood that this matter was extremely urgent and had to be completed by noon the following day.[83]
[83]Second Apted Affidavit, [5].
(c) Following her discussion with Mr Gill on 12 February 2020, she started the exercise she described in the First Apted Affidavit. In that regard, she realised that it would not be possible to have separately identified each document and the reason for privilege being claimed by noon the following day.[84] Accordingly:[85]
[84]Second Apted Affidavit, [7].
[85]Second Apted Affidavit, [7].
(viii) As a practical solution, she decided not to separately identify the ‘non-contentious’ documents which she understood were required to be released;
(ix)She focussed on the documents relevant to the issues in dispute over which privilege had been claimed and reconsidered these documents; and
(x) She identified in general terms in the list the files over which she understood privilege had been waived, other than in the case of specific documents relevant to the issues that remained in dispute, which she separately identified and listed;
(d) After she completed that exercise, the Issue Waiver Ruling was provided to her on 13 February 2020, along with some feedback from Aitkens on the exercise she had undertaken. She was advised that there was an extension in the timetable to permit the Plaintiffs to file materials in support of their objections to the Defendant inspecting the subpoenaed documents to noon on 17 February 2020;[86]
[86]Second Apted Affidavit, [7].
(e) She had a telephone message from Mr Gill on Sunday 16 February 2020 that Aitkens had provided further feedback to her in relation to her materials, which she considered;[87]
[87]Second Apted Affidavit, [8].
(f) She spoke about that with Aitkens on 17 February 2020 and also worked with Counsel on that day to finalise the list and affidavit;[88]
[88]Second Apted Affidavit, [8].
(g) Upon further analysis of the Issue Waiver Ruling with Counsel,
I formed the view that some of the specific documents that I had identified fell within the scope of the waiver that the Court found had occurred relevant to my Retainer. In particular, I came to understand that the relevant waiver was as described in paragraph 13 of my first affidavit, and that some of the documents that I had earlier identified as recording or evidencing communications of the relevant kind and that I had treated as privileged and not waived in fact fell within the scope of the waiver that the Court found to have occurred. My focus was on revisiting my treatment of the documents that I had specifically identified to ensure that my treatment of them was consistent with the Court Order, rather than on revisiting the documents that I had described generally as files (which I had treated as having been waived subject to specific exceptions). In other words, my focus was largely on ensuring that I had not incorrectly maintained a claim to privilege, and not taking a narrow approach, rather than on ensuring that I had correctly claimed privilege. It did not occur to me to reconsider my treatment of documents that fell within the general file description (which I had, as it now turns out, erroneously treated as having been waived). Again, this all took place under the pressure of a deadline of noon that day; a deadline that we made every effort to meet but were ultimately unable to meet.[89]
(h) It now occurs to her that documents that were generally described as files over which privilege had been waived are not within the scope of the relevant waiver found by the Court.[90] This is part of the Erroneous Apted Approach which resulted in disclosure of documents over which the plaintiffs now seek to maintain a claim of privilege.
[89]Second Apted Affidavit, [8].
[90]Second Apted Affidavit, [9].
In respect of the Erroneous Apted Approach, Mr Bradley deposes that:
(a) Mr Lorbeer informed him that in the course of him amending Ms Apted’s list and her first affidavit, he considered some of the documents in the list and provided comments, but neither this limited review nor his discussions with Ms Apted on 17 February 2020 revealed the error in her approach;[91]
(b) As Ms Apted had spoken with Mr Gill and been assisted by Mr Lorbeer, and as she herself was a lawyer, neither he nor to his knowledge Mr Gill had any reason to think that Ms Apted had adopted an erroneous approach;[92]
(c) Aitkens’ involvement in the production of documents from Ms Apted’s file was limited to collating those which she had determined were not privileged or if privileged, fell within the scope of the waiver. He did not review the documents to be produced by Ms Apted and to the best of his knowledge, Mr Gill did not undertake a substantive review to satisfy himself that she had performed the task correctly.[93]
[91]First Bradley Affidavit, [9].
[92]First Bradley Affidavit, [10].
[93]First Bradley Affidavit, [10].
Mr Bradley deposes that insofar as the Apteds documents produced by Aitkens to Clayton Utz on 17 February 2020 include documents over which the Plaintiffs assert a claim of privilege, they maintain that claim. Ms Apted was not instructed by the Plaintiffs to waive privilege; Ms Apted’s view of the scope of the issue waiver was erroneous; Aitkens and Counsel were working under immense time pressure to comply with the Court’s orders, leaving them a limited opportunity to identify the error; and the Defendant and its lawyers only had the documents for a brief period before the Plaintiffs informed it of the error.[94]
[94]First Bradley Affidavit, [26].
The Defendant’s evidence
The documents produced by Apteds in the yellow folders over which privilege was not claimed, and in relation to which no objection was taken to inspection by the Defendant at the First Hearing, were uplifted by Ms Demiris and copied.[95] Of those documents, Mr Annetta deposes that:
[95]Annetta Affidavit, [14(a)].
(a) This bundle included Items 73, 92-94 and 114 on the Return List;[96]
(b) On 11 February 2020, Ms Demiris arranged for this bundle of documents to be copied, including Items 73, 92-94 and 114; he read all of the documents in this bundle; and Ms Demiris sent a copy of one document to Counsel and separately to Mr Robertson (the Defendant’s former solicitor) who is a witness in the proceeding;[97]
(c) Between 12 and 17 February 2020, he sent a copy of that one document referred to in the preceding paragraph to Mr Costelloe and discussed it with him; be discussed that document with Mr Robertson; and he discussed the bundle of documents with Counsel and Ms Demiris.[98]
[96]Annetta Affidavit, [14(b)].
[97]Annetta Affidavit, [14(c)].
[98]Annetta Affidavit, [14(d)].
Clayton Utz received a second bundle of Apteds documents from Aitkens on 17 February 2020 at 5.42pm by email, attaching an electronic link (‘Apted Link’) which contained documents which Ms Apted had included in pink folders on the basis that they were privileged, but which the Plaintiffs said fell within the scope of the Issue Waiver Ruling.[99]
[99]Annetta Affidavit, [14(f)].
In respect of the Defendant’s inspection and use of the Apteds documents as provided in the Apted Link, Mr Annetta deposes that:
(a) On 17 February 2020 at 5.53pm, Ms Demiris sent the Apted Link by email to Mr Murdoch and Mr Wallis;[100]
[100]Annetta Affidavit, [14(g)].
(b) In the evening of 17 February 2020 and on 18 February 2020, he, Mr Murdoch, Mr Wallis and Ms Demiris reviewed the documents as follows:[101]
[101]Annetta Affidavit, [14(h)].
(xi)Mr Wallis did so via the Apted Link and extracted some of the documents on that link and emailed them to him, Mr Murdoch and Ms Demiris;
(xii) Ms Demiris did so via the Apted Link and produced a hardcopy of some of the documents which she gave to him;
(xiii) He did so via the hardcopy documents given to him by Ms Demiris and via the documents extracted by Mr Wallis;
(c) Ms Demiris made an affidavit on 18 February 2020 (‘Second Demiris Affidavit’) which exhibited as CDZ-13 one document from the first bundle (Item 73 o the Return List) and some of the documents from the Apted Link (including Items 8, 37, 41, 42, 43, 47, 49, 50, 51, 52, 55, 58, 63, 66, 67, 70, 75, 77, 78, 79 and 82 from the Return List). The Second Demiris Affidavit was relied upon at the Second Hearing.[102]
[102]Annetta Affidavit, [14(i)].
Of the Apteds documents produced to Clayton Utz in either of these bundles, Mr Annetta deposes that:
(a) Items 44, 49 and 50 in the Return List were also contained in the Plaintiffs’ discovery, being document numbers 36, 39 and 42 in the Plaintiffs’ affidavit of documents;[103]
[103]Annetta Affidavit, [15(a)].
(b) One of those documents, being document number 39 in the Plaintiffs’ discovery, is referred to in Mr Costelloe’s witness statement;[104]
(c) Item 78 in the Return List was also produced by Aitkens as part of the Aitkens documents on 13 February 2020;[105] and
(d) Item 48 in the Return List was also produced by Mr Gorman in response to his subpoena (being Item 109 on the Return List).[106]
[104]Annetta Affidavit, [15(b)].
[105]Annetta Affidavit, [15(c)].
[106]Annetta Affidavit, [15(d)].
In relation to the Apteds documents, Mr Annetta deposes that on 1 February 2021, Aitkens sent an email to Clayton Utz attaching a letter containing a link to documents over which the Plaintiffs said that they made no claim for privilege. When printed, the documents comprised 4 lever arch folders, three of which were said to be from the yellow (non-privileged) folders and one of which was said to be from the pink (privileged) folders. Mr Annetta says that he and Mr Wallis both received these four folders and thereafter he, Mr Wallis and Ms Broughton reviewed them.[107]
[107]Annetta Affidavit, [16(b)].
Included with the Apteds documents provided to Clayton Utz on 1 February 2021 were the following documents from the Return List:[108]
(a) Items 21, 73, 86, 92, 93, 94, 114 and 115 from the yellow folders; and
(b) Items 21 and 25 from the pink folders.
[108]Annetta Affidavit, [16(b)]. I note here that the Plaintiffs no longer seek the return of these documents, which is evident from the current version of the Return List.
Submissions
The Plaintiffs submit that the Second Apted Explanation is plainly an incorrect understanding of the Issue Waiver Ruling. They say that her error, and the fact that it was not identified by Aitkens or counsel, has to be seen in the context of the circumstances in which they were working which involved significant time pressure. The Plaintiffs submit that the fact that documents were disclosed inadvertently during an accelerated discovery process was treated as relevant, even before Expense Reduction Analysts.[109] Just as in Abdelkodous, the production of documents in this case “was not an orderly discovery process”.[110] It is not the ‘discovery’ aspect which I am comparing here, but the ‘orderly’ aspect of it.
[109]Relying on Hooker Corp Ltd v Darling Harbour Authority (1987) 9 NSWLR 538, 543D-F.
[110]Abdelkodous, [58].
The Plaintiffs rely on the statement made by Mr Murdoch at the Second Hearing that the Apteds documents had been “quarantined” by Clayton Utz and that this would continue.
The Plaintiffs submit that a finding that the documents disclosed as a consequence of the Apted Erroneous Approach were disclosed through inadvertence is entirely appropriate and that they acted quickly to rectify the error. Consequently, they submit, the circumstances justify the exercise of the Court’s discretion to direct the return of those documents.
The Defendant submits that the factual position in respect of the Apted Erroneous Approach, including the extent of the involvement of Aitkens and the Plaintiffs’ counsel in the assessment of the scope of the waiver, remains murky. In any event, says the Defendant, it is clear that one or more lawyers acting for the Plaintiffs turned their mind to whether each of the documents fell within the scope of a waiver and in each case made a decision that it did.
The Plaintiffs reject this submission, contending that the role played by Aitkens and counsel in the process of producing the Apteds documents on 17 February 2020 emerges clearly from the evidence. They say that it is plain that Ms Apted misunderstood the scope of the waiver and that this is an error of a different kind than an error in the anterior assessment of whether a document is privileged. The Plaintiffs contend that an error of that kind, when made by a lawyer who is properly briefed, may be more difficult to countenance, but here, the scope of the waiver was entirely fact specific.
The Plaintiffs go on to contend that the Apted Erroneous Approach did not arise out of a misconception as to legal principle but out of a misunderstanding of the Issue Waiver Ruling. They say that Ms Apted was not acting for the Plaintiffs. Her error was based on her understanding of what Aitkens, the Plaintiffs’ solicitors, had said to her, and there can be no doubt that her understanding was erroneous. They say that the Defendant’s submission that Ms Apted turned her mind to whether each document fell within the scope of the waiver and decided that it did is too simplistic, because the premise of her decision (her understanding of the scope of the waiver) was fundamentally flawed. It is submitted that this is not simply a case of a judgment being made on which reasonable minds might differ, or a misunderstanding as to legal principle.
The Defendant submits that the fact that the Plaintiffs’ decision in respect of the waiver and each document may have been wrong seems far removed from the type of inadvertent error contemplated by Expense Reduction Analysts.
The Defendant submits that the Plaintiffs have not identified any analogous cases where an error of the type made by them has been held to be such an inadvertent error. In response to this, the Plaintiffs concede that this is true as far as it goes, but submit that it is difficult to imagine another case involving a similar error as that which occurred here, being as to the scope of a waiver rather than the anterior question of whether a document is privileged.
Analysis
I cannot reconcile the First Apted Explanation and the Second Apted Explanation. I find it difficult to understand how Ms Apted came to depose as she did in respect of the First Apted Explanation if her understanding of the Issue Waiver Ruling was as outlined in the Second Apted Explanation. There was nothing in the oral evidence given by Ms Apted that assisted with reconciling this. Further, I do not find the chronology of events as outlined in the Second Apted Affidavit to be particularly clear: for example, it is not clear whether Ms Apted came to the view that she may have taken the wrong approach before ESA-1 and her first affidavit was finalised, or afterwards.
Nonetheless, it is the Second Apted Explanation which the Plaintiffs rely upon to say that Ms Apted adopted the wrong approach to reviewing documents for privilege and waiver in light of the Issue Waiver Ruling, which caused documents to be disclosed to the Defendant which ought not have been. It is these documents which are said to have been disclosed as a consequence of the Apted Erroneous Approach.
There is little doubt that the Second Apted Explanation is mistaken and that by following it, Ms Apted adopted the wrong approach to reviewing the Apteds documents for privilege and waiver.
In its submissions and its cross-examination of Ms Apted and Mr Bradley, the Defendant attempted to make something of whether the mistaken understanding was that of Ms Apted or of Mr Gill. The import of that was not explained by the Defendant: if it was to contend that if it was Mr Gill’s mistake then it was made by the Plaintiffs’ current solicitors and, as their agent, the Plaintiffs were now stuck with his mistake, then I do not consider that to be of particular significance since Mr Bradley’s evidence clearly demonstrates (even if he does not express it this way) that Ms Apted was given the task of reviewing her documents in light of the Issue Waiver Ruling and that task was not performed by Aitkens. As such and for that exercise, it seems to me that Ms Apted was performing that task on behalf of the Plaintiffs and therefore they are also stuck with her mistake. I am reinforced in this conclusion by the manner in which the Apteds documents were first produced to the Prothonotary: they were produced under cover of a letter from Ms Apted in which she stated that the Plaintiffs objected to producing certain categories of documents sought by the Apteds Subpoena, on the grounds of privilege, and that they did not object to the other categories.[111] In conveying the views of the Plaintiffs, how can it be said that Ms Apted was not acting as their agent?
[111]Exhibit RAB-12 to the Second Bradley Affidavit; See also Application of Issue Waiver Ruling, [26].
Therefore, any notion that documents disclosed as a consequence of the Apted Erroneous Approach is not something that can be visited upon the Plaintiffs is rejected.
The question then becomes whether this is an ‘inadvertent error’ within the meaning of Expense Reduction Analysts.
The Plaintiffs contend that “how the error came to be made is not to the point”.[112] However, it cannot be said that the High Court made this statement in general terms, as it was made in the context of discussing whether the reviewers had neglected to choose a value for the ‘privilege’ button such that the system defaulted it to ‘no’. Importantly, the Court acknowledged that the evidence before the primary judge, which was accepted, was that ‘none of the reviewers claimed to have recalled forming a view about whether to claim privilege in respect to the documents in question.’[113] The High Court said that what was to the point was that the documents ended up in the wrong list, but in that respect were clearly concerned with how the technical error arose rather than any error of judgment. Therefore, I consider this to be far narrower a proposition than contended for by the Plaintiffs.
[112]Expense Reduction Analysts, [10].
[113]Expense Reduction Analysts, [15].
Following the Review Ruling, the Plaintiffs produced documents on the Aitkens Subpoena to the Defendant on 9 December 2020 which the Plaintiffs classified as not privileged or privileged but within the scope of the Issue Waiver Ruling.[199] Mr Bradley deposes that in the course of preparing Exhibit RAB-4, which was the list of documents the subject of the Apteds Subpoena, it became apparent to him that some of those documents he considered to be privileged and not within the scope of the Issue Waiver Ruling had not been treated the same way by Ms Taylor when preparing Exhibit CAT-2. For example, he says, Ms Taylor had characterised them as privileged but within the scope of a waiver. Mr Bradley then says that he formed the view that privilege could not be maintained over those documents as Aitkens had reviewed them and they had already been the subject of the earlier rulings. He says that he did not permit their disclosure because he formed the view that they assisted the Plaintiffs case and he has no reason to think that Ms Taylor adopted such an approach either.[200]
[199]Fourth Bradley Affidavit, [9]-[10].
[200]Fourth Bradley Affidavit, [11].
In respect of the Apteds documents, Mr Bradley goes into some detail as to his review of these between June and December 2020 and then as to his further review of them in January 2021 after becoming aware that the documents he had reviewed in the earlier period were not necessarily the same as those produced to the Prothonotary. He says that the entire exercise took in excess of 100 hours, including 9 full days in January 2021, when each document was checked off as to its correct privilege characterisation and as to whether or not it fell within the scope of the Issue Waiver Ruling.[201] Mr Bradley deposes that:
I did not undertake that exercise with a view to disclosing documents that I thought would assist the plaintiffs’ case, irrespective of whether I thought they were subject to a proper claim for privilege by the plaintiffs and I did not have the plaintiffs’ instructions to adopt such an approach. If I formed the view that a document was privileged and not within the scope of one of the waivers, I treated it as such. I did not regard myself as having the plaintiffs’ instructions to do otherwise.[202]
[201]Fourth Bradley Affidavit, [12]-[21].
[202]Fourth Bradley Affidavit, [21].
Mr Bradley also deposes that he has no reason to think Ms Apted disclosed privileged documents because she thought they may assist the Plaintiffs’ case.[203] Ms Apted has described, in both of her affidavits, the approach she took to classifying the documents as privileged or not. I have summarised this earlier in these reasons. Whatever one may say about her approach, I do not accept that Ms Apted selectively disclosed privileged documents which would assist the Plaintiffs’ case and withheld documents harmful to their case. Ms Apted’s oral evidence was consistent with this and she struck me as an honest witness.
[203]Fourth Bradley Affidavit, [23].
The Plaintiffs’ submissions
The Plaintiffs submit that waiver is not lightly to be inferred:
According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). […] The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.[204]
[204]Expense Reduction Analysts, [30].
Therefore, say the Plaintiffs, privilege “is not to be waived unless there is clear conduct or language which evidences an intention to waive the privilege either expressly or by necessary implication.”[205] The Plaintiffs accept that the notion of fairness may play a role, but not through an overriding principle of fairness operating at large.[206]
[205]Nine Films and Television Pty Ltd v Ninox Television Ltd (2005) 65 IPR 442, 443-444 [5], emphasis added by the Plaintiffs.
[206]Mann v Carnell, [1999] HCA 66, [29].
The Plaintiffs’ primary submission is that it is not altogether easy to see how the Broader Waiver Application differs in substance from the submission that was:
(a) made by the Defendant in February 2020[207] and rejected on 11 February 2020;[208]
(b) repeated in the Defendant’s formulaic response to the Plaintiffs’ claims of privilege that were said not to have been waived in the Aitkens table[209] and repeated in the Defendant’s submissions dated 28 February 2020 (at [29]) and rejected in the Application of Issue Waiver Ruling;[210]
(c) repeated in the defendant’s submissions on the appeal to Justice Kennedy[211] and rejected by her Honour.[212]
[207]Defendant’s submissions on privilege dated 10 February 2020, [6], [26].
[208]Issue Waiver Ruling.
[209] As recorded in the Application of Issue Waiver Ruling, [47(c)]:
“The defendant accepts the privilege claim but disputes the non-waiver of privilege claim because the description of the contents of the document suggests that it either bears directly on the issue of election or is the subject of associative waiver, particularly in circumstances where the plaintiffs concede that privilege in respect of documents 3-7 has been waived.”
[210]At [93]ff.
[211]Defendant’s outline of submissions dated 14 August 2020, [34] and Sch C, [11].
[212]Review Ruling, [68]ff.
The Plaintiffs submit as follows:
(a) to the extent that the Defendant’s application is based on the production of documents prior to the hearing of its de novo appeal on 29 October 2020 (or at the earliest on the first hearing of the objections to the subpoenas on 11 February 2020), there is an element of vexation about it, and it should not be entertained absent some explanation why the matters the Defendant now asserts based on materials that were available to it earlier were not brought forward by the defendant on any of the numerous earlier opportunities it had to do so;
(b) this is exactly the sort of satellite litigation the High Court discouraged in Expense Reduction Analysts;
(c) it is not consistent with the edicts of modern civil litigation and case management principles;
(d) scarce public (and in particular, curial) resources should not be allowed to be consumed in this manner; and
(e) the public interest in finality and the concern to avoid relitigation militate strongly against entertaining the Defendant’s application.
While I accept that aspects of the Defendant’s application involve similar submissions made by them earlier in relation to the previous rulings, I think the Plaintiffs’ characterisation of this is too simplistic. The aspects that involve similar submissions are those as to the relevance of the documents, but there is a fundamental difference here and that is the basis upon which the waiver is said to have arisen. In the earlier rulings, waiver arose due to certain matters contained in Mr Bradley’s witness statement. The question before me at the First Hearing was as to the scope of that waiver: the Defendants said that it was over the whole of the files; the Plaintiffs contended for a far narrower scope. Similar questions arose with a similar foundation in the hearing before Justice Kennedy. By the Broader Waiver Application, I do not think that the Defendant is attempting to revisit the Issue Waiver Ruling, the Application of Issue Waiver Ruling and the Review Ruling. Rather, the foundation for the current application is quite different and is premised on what is said to be the Plaintiffs’ selective disclosure of privileged documents.
Secondly, the Plaintiffs’ submit that:
(a) the Broader Waiver Application is audacious, particularly in circumstances in which the Defendant has already contended that waivers have arisen out of specific aspects of Mr Bradley’s witness statement;
(b) the present application is not so confined, whether by subject matter or time;
(c) the Defendant’s submissions tend to leave the impression that the trial of the proceedings will be a roving enquiry into the communications between the Plaintiffs and their solicitors at any time, and about any subject. That is not the case;
(d) the trial will be a trial of the issues that arise from the parties’ pleadings;
(e) it appears that the Defendant has lost sight of this, as the Defendant’s application and submissions are not tethered, as they must be, to issues that arise on the pleadings and that the closest the Defendant comes to aligning its application to the live issues is in its assertion that the Transaction (as it has defined as set out in paragraph 173 above) forms the factual basis for the various legal disputes the subject of the proceeding. In this regard, the Plaintiffs say that:
(xviii) even as a generalisation, it is inaccurate, including in that the Defendant’s own footnoted references suggest that the earliest relevant event is the alleged exchange of the option contract in April 2014;
(xix) in any event, that is expressed at far too high a level of generality to be of any utility in the present context. The Plaintiffs say that to the extent that the communications between them and their solicitors go beyond the pleaded issues, they are simply not relevant, and privilege is not waived in respect of them.[213]
[213]Relying on Zantran Pty Ltd v Crown Resorts Ltd (No 2) (2020) 146 ACSR 235, 254 [56].
The Plaintiffs acknowledge that the number of documents identified in the Broughton Table may give the Broader Waiver Application the appearance of substance. However, they say that:
(a) their conduct in connection with each production must be carefully considered; and
(b) the question arises: what is their conduct that is said to be plainly inconsistent with their maintenance of confidentiality of privileged communications that have not been disclosed?
What is apparent, according to the Plaintiffs, is that documents have been produced on discovery that could have been the subject of a claim of privilege, which was erroneously not made on some occasions. The Plaintiffs submitted that Mr Gill evidently formed the view when he was preparing the Plaintiffs’ discovery that certain documents were not privileged, and Mr Bradley formed the opposite view when he was preparing the documents which became the Return List. However, the Plaintiffs submit that the fact that Mr Gill erroneously discovered privileged documents is not plainly inconsistent with their maintenance of confidentiality in documents that have not been disclosed. I should observe here that Mr Gill did not discover documents: he apparently reviewed them to prepare the Plaintiffs’ discovery. Further, I do not consider that it has been established that privileged documents were produced on discovery, whether that be erroneously or not. There is an assumption made by the Plaintiffs in this submission that because Mr Bradley included copies of such documents in the Return List that his assessment of privilege is right and Mr Gill’s is wrong. That assumption has not been established on the evidence.
The Plaintiffs say that:
(a) documents have been produced in response to subpoenas, some of which fall within the scope of the waivers that were earlier conceded or found to have occurred and some falling outside that scope but which are said to have been produced erroneously; and
(b) the erroneous disclosure of privileged documents on the return of a subpoena is not plainly inconsistent with the maintenance of confidentiality in other privileged documents that have not been disclosed.
The Plaintiffs submit that (a) it is a gross overstatement to say, as the Defendant does, that they have selectively deployed or picked and chosen the documents they have produced, a fortiori that it is the only available inference; and (b) it is not explained how the Plaintiffs have “selectively sought to deploy these documents to their advantage”,[214] beyond the mere fact of the disclosure itself. In light of the Fourth Bradley Affidavit, say the Plaintiffs, the inferences for which the Defendant contends cannot properly be drawn. Rather, they say, at its highest, their production of the documents that are relied upon by the Defendant is “apt to create confusion about the position” and is “strongly indicative of mistake” rather than “clearly suggest[ing] abandonment of the privilege”,[215] and is not sufficient to give rise to waiver.
[214]Defendant’s Broader Waiver Outline, [11].
[215]Expense Reduction Analysts, [33].
Similarly, the Plaintiffs submit that:
(a) it is an altogether too simplistic analysis to assert that they have produced many of their privileged communications with their lawyers and therefore should produce all privileged communications; and
(b) the Defendant does not explain why that should follow, beyond its assertion that it would “ensure that the real weight of meaning of the communications passing between the plaintiffs and their lawyers and agents is not misunderstood”.[216]
[216]Defendant’s Broader Waiver Outline, [19].
The Plaintiffs say that this begs the question: what communications? The Plaintiffs then say that the Defendant’s response upon which its application is premised: “all of them”, is, in substance, the same submission that it has made in the past, which was rightly rejected on each occasion. The Plaintiffs say that “implied waiver is not so generous a doctrine”,[217] and that the same result should follow on this occasion.
[217]British American Tobacco Ltd v Cowell (2002) 7 VR 524, 564 [121].
Rather, say the Plaintiffs, the Defendant is required to specify in relation to each of the privileged documents, how they are relevant to an issue in the proceeding based on the pleadings, and the conduct that is said to give rise to the waiver by reference to the disclosed documents such that the maintenance of privilege is said to be inconsistent. Further, in relation to each document, the Plaintiffs say that the Defendant is required to identify whether the document was available to it at the time of the earlier hearings before myself and the Honourable Justice Kennedy.
The Plaintiffs submit that the Defendant has not done this analysis and that without it, the application must fail. The Plaintiffs then submit that if the Court is prepared to undertake the analysis the Defendant should have done, then to the extent the application is based on materials available to the Defendant on the earlier hearings, the Broader Waiver Application should be dismissed. It was not explained how I was meant to arrive at a factual finding that particular documents were available to the Defendant at those earlier hearings. If I am meant to trawl through the subpoenaed documents and the tables prepared for the Application of Issue Waiver Ruling in order to undertake that task, I decline to do so. It is both laborious and time consuming, I do not consider it something which the Court should do, and in any event it is not clear to me that it would leave me in a position to make the factual finding as to which materials were earlier available to the Defendant. The Plaintiffs go on to say that if the materials relied upon or some of them were not available to the Defendant earlier, then I should ascertain what issue in the proceeding each document is relevant to and, if relevant, determine whether there is a waiver by focussing on the Plaintiffs’ conduct to see if it is plainly inconsistent with the maintenance of confidentiality. Again, I decline to undertake such an exercise, even if I accept that these are the matters which the Defendant must satisfy.
Consideration
The fundamental premise of the Broader Waiver Application is that the Plaintiffs have selectively disclosed privileged documents, such that documents which assist their case have been disclosed but ones which are either adverse to their case or assist the Defendant’s case have not been disclosed. The waiver is said to occur due to the unfairness in selectively maintaining privilege in this way. There are at least three aspects of this which require closer analysis:
(a) Whether the disclosed documents which the Defendant says are privileged are in fact privileged;
(b) Whether there has been selective disclosure, in other words, a deliberate disclosure of privileged material where that assists the Plaintiffs case; and
(c) Whether it is unfair for the Plaintiffs to selectively maintain privilege in the circumstances.
I will shortly deal with each of these in turn.
I accept the Defendant’s submission that where privilege was claimed over documents which fell within the scope of the Issue Waiver Ruling and those documents were subsequently disclosed, that disclosure was voluntary. This is because the Plaintiffs had voluntarily chosen to waive privilege and, even though the documents were subsequently disclosed as a consequence of Court order in respect of subpoenaed documents, the disclosure was voluntary in the relevant sense.
Whether the disclosed documents which the Defendant says are privileged are privileged
It seems to me that the Defendant’s submissions rest on the contention that the Plaintiffs have voluntarily disclosed to them hundreds of documents over which they could have claimed privilege, but either they did not so claim privilege or they were the subject of the Issue Waiver Ruling.
However, that contention has as its foundation that the documents are ones in respect of which the Plaintiffs could claim privilege but chose not to. It seems that the Defendant’s solicitors have reviewed the documents, made an assessment themselves as to whether they are privileged, and then the Broughton Table has been prepared based on that assessment.
It was clear from Mr Bradley’s evidence during cross-examination that he did not share the Defendant’s assessment that some of the disclosed documents were able to be the subject of a privilege claim.[218] I think that some of these were privileged but I accept Mr Bradley’s evidence that he did not think they were.
[218]Transcript 7 June 2021, 25.17-26, 29.18-30, 31.9-32.21, 44.1-46.8, 49.9-14.
Ms Apted was not taken to specific documents and asked for her view as to whether or not they were privileged.
Whether this was the product of different views about the application of privilege or what at times appeared to be a fairly rudimentary understanding of privilege is not to the point. It does, however, have an impact on the next question dealt with later in these reasons, which is whether there has been selective disclosure.
There was no real attempt made by the Defendant to take me to the documents and make submissions as to why they were privileged. Apart from the ones identified in the Defendant’s Broader Waiver Outline which I have defined as the Example Set, and the documents to which Mr Bradley or Ms Apted was taken in cross-examination and a small number of documents during oral submissions, no reference was made to the particular documents. Rather, it seems that I am expected to either assume that the Defendant’s assessment of the documents in the Broughton Table is correct or I am to go through some 689 documents and assess them for privilege myself. I do not consider that either of those alternatives is appropriate or palatable.
What I have done, however, is go through the Example Set. There are 33 documents in the Example Set. The Defendant’s Broader Waiver Outline does not explain how these were chosen. Of these 33 documents:
(a) 9 of them are the subject of a privilege claim by the Plaintiffs;[219]
[219]BD 36, 59, 88, 92, 103, 109, 112, 118, 126.
(b) 11 of them are not the subject of a privilege claim by the Plaintiffs but I consider that privilege could possibly have been claimed in respect of these.[220] A number of these documents involve communications with Mr Gorman, and whether or not they are privileged depends on an analysis of his role and the particular document;
(c) 11 of them are not the subject of a privilege claim and I consider that they are not privileged.[221] It is not apparent to me why they were assessed in the Broughton Table as privileged – some of them, for example, are file notes of conversations Ms Apted had with the Defendant’s then lawyers; and
(d) 2 of them are not the subject of a privilege claim by the Plaintiffs and I am unable to tell whether they are privileged or not (primarily as they are not easily readable or they include persons whose role I am unable to identify).[222]
[220]BD 60, 81, 82, 97, 107, 114, 133, 158, 159, 162, 163.
[221]BD 46, 54, 62, 71, 76, 80, 96, 99, 106, 124, 143.
[222]BD 100, 146.
In reviewing the Example Set, I was not able to discern a common theme as to why the Plaintiffs claimed privilege in relation to some documents and not in relation to others when they could have. It does not appear to me to be the product of selective disclosure based on what documents are helpful to their cause or not. That said, this exercise has limited value as there are documents that are the subject of privilege claims recorded in the Broughton Table which have not been produced, and I am obviously not able to make any assessment of those. What can be observed, however, is that of the Example Set, one-third of them have been assessed as privileged by the Defendant which I do not consider to be privileged. If the Example Set is representative of the documents in the Broughton Table, and I have no information about that, then it means that there are not as many documents disclosed which could have been the subject of a privilege claim than would otherwise appear from the Broughton Table.
In addition, I have reviewed the documents from the Broughton Table that are listed at footnote 6 of the Defendant’s Broader Waiver Outline. These are some 100 or so communications involving Mr Gorman during the period May 2014 to May 2015 which the Defendant says are privileged documents voluntarily produced to it, only 10 of which are the subject of the Return Application. As noted earlier, the Defendant says that the Plaintiffs have not explained how they sought to distinguish between them, although as I have already commented, the explanation given at the hearing was in connection with Mr Gorman’s dual role. In relation to these 100 or so documents, there are a number of them which I doubt are privileged, and the inconsistent treatment of many of them by the Plaintiffs appears more due to their haphazard approach to claiming privilege rather than to a discernible trend to only disclose privileged documents if helpful to the Plaintiffs.
I have also reviewed the documents specifically referred to in the Defendant’s oral submissions. I have not been able to discern a them or approach in respect of those documents.
Whether there has been selective disclosure
I do not think that the Plaintiffs’ disclosure of documents produced pursuant to the Aitkens Subpoena and the Apteds Subpoena is the product of a deliberate decision to disclose helpful documents and withhold harmful ones. My overwhelming impression is one of a shambolic, incoherent and inconsistent approach by the Plaintiffs, Aitkens and Apteds that is far from deliberate. It pains me to make such an observation and I mean no disrespect by it, but I consider it necessary to state this as the notion of deliberateness is a key part of the Broader Waiver Application.
This impression is based on my long connection with the case, having dealt with the Issue Waiver Ruling and the Application of Issue Waiver Ruling, as well as case managing this proceeding and now dealt with the Return Application and the Broader Waiver Application, as well as the evidence adduced on both of these applications.
Documents have been discovered by the Plaintiffs, copies of which have been produced pursuant to one or more of the Aitkens, Apteds or Gorman subpoenas, which the Plaintiffs have sought to claw back. As I indicated earlier, such an approach is inexplicable. Documents under the subpoenas have been produced without a claim for privilege and then copies of them have been the subject of the Return Application which again is inexplicable. Such an untenable position is hardly indicative of a deliberate approach to claiming privilege, let alone a deliberate approach based on a strategy of selectively disclosing only helpful documents.
Just as the Defendant assumes that the disclosed documents are privileged, its submissions also rest on an assumption that the disclosed documents assist the Plaintiffs’ case. I was not taken to any particular documents or there were no submissions made by the Defendant as to specific documents and why it should be said that these assist the Plaintiffs’ case. I do not consider it appropriate that I conduct an assessment of the documents in the Broughton Table to arrive at a conclusion as to whether those documents can be seen as assisting the Plaintiffs’ case.
Nor do I accept the Defendant’s submission that the only available inference from the Plaintiffs’ disclosure of some privileged documents but not others is that the Plaintiffs are seeking to withhold documents they believe harmful to their case. This may be an inference, but so too may be an inference that the Plaintiffs have disclosed documents in a haphazard way. In fact, I consider this to be the inference more likely to be the case than one based on selective disclosure. The Defendant itself submits that the Plaintiffs have demonstrated an incoherent approach to claiming privilege, an example of which is said to be seeking to claw back Ms Apted’s file note of a meeting held on 9 May 2014 which has separately been discovered and referred to in the First Plaintiff’s witness statement.[223]
[223]See paragraphs 46 to 48 above.
Further, Mr Bradley expressly states that he has not adopted a selective approach to disclosure or approached the exercise as one based on whether the documents assist the Plaintiffs’ case.[224] Ms Apted’s evidence is consistent with this.[225] In light of all of the evidence, particularly as to how documents were prepared for disclosure by Aitkens, Mr Bradley and Ms Apted, I accept this evidence. In addition, specific documents were put to Mr Bradley in cross-examination and he denied the proposition that those documents had been disclosed because they supported the Plaintiffs’ conspiracy theory.[226]
[224]See paragraphs 196, 197 and 201 above.
[225]See paragraph 202 above.
[226]Transcript, 7 June 2021, 42.30-44.8.
Whether it is unfair for the Plaintiffs to selectively maintain privilege in the circumstances
Fundamentally, I do not consider it appropriate to base a finding of a broad waiver on an argument that the Plaintiffs have disclosed a lot of documents, which the Defendant contends are privileged, and so therefore it is unfair to maintain privilege over the balance of the documents. It cannot be the case that this boils down to a numbers exercise.
The emphasis in the Defendant’s submissions regarding the Broader Waiver Application is on ‘unfairness’. However, unfairness is no longer the touchstone for waiver: inconsistency is that touchstone. So much is clear from the Mann v Carnell,[227] where the High Court said of waiver that:
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.[228]
[227][1999] HCA 66.
[228]Mann v Carnell, [29].
Therefore, the emphasis relied upon by the Defendant in cases such as AG v Maurice on unfairness needs to be read in light of the later case of Mann v Carnell.
As I do not accept that it has been established that the Plaintiffs have selectively disclosed privileged documents in the manner contended for by the Defendant, I do not consider their disclosure of privileged documents (if indeed they are privileged) to be inconsistent with maintaining privilege over the remainder.
It is still necessary, however, to consider the Defendant’s submission that waiver has occurred because maintaining privilege is inconsistent with the disclosure as fairness dictates disclosure of all of the documents so that “the real weight of meaning of the communications passing between the plaintiffs and their lawyers and agents is not misunderstood.”[229] In this regard, I accept the Plaintiffs’ submission that the Defendant should have identified which privileged and undisclosed documents are required in order for a proper understanding of the disclosed documents to be achieved. Which documents is it inconsistent to maintain privilege over when other documents have been disclosed? The Defendant says, all of them. But this is simply too imprecise.
[229]Defendant’s Broader Waiver Outline, [19].
I accept the Defendant’s submissions that it is highly likely that the disputed documents are relevant to issues in the proceeding. However, I do not think that Merial stands for the broad propositions advanced by the Defendant.
Importantly, Merial concerned communications between the party’s lawyers and a witness in the proceeding about the subject matter of the proceeding during the course of preparing evidence or conducting the proceeding. It was not concerned with the lawyers’ file at the time of the subject events. The former is far more focussed and it is not so difficult to see why the Court in that case viewed the withheld documents as forming part of the communications with the witness. This context is important, as it forms part of the basis for the holding in Merial that disclosure of all the documents was necessary so that the respondent could test whether the appellant had been selective in its disclosure. In Merial, Moshinsky J reviewed the disputed documents, saying that this review confirmed that they were of the same character as the disclosed documents.
Where there has been a clear strategic deployment of disclosed documents in the litigation, Merial is authority for the proposition that privilege may have been waived not just over part of a document but over a body of communications on the same issues.
The broader statements in that case, as relied on here by the Defendant, need to be seen in that context and are not statements of general application. Merial is confined to its facts: in the instance before me, it is unclear what the strategic deployment of the disclosed documents is.
Neither party took me to any decisions which have considered Merial. I have been able to find only one such case, being Mobis Parts Australia Pty Ltd v XL Insurance Company SE.[230] That case also concerned the question of whether the use of an otherwise privileged document on an application to amend a pleading also worked a waiver over all communications with that expert. In Mobis, the use of the document on the amendment application was simply to justify an alleged delay in making the application to amend, and not in relation to its substance. Of Merial, Beech-Jones J said in Mobis that:
I do not understand that Merial stands for the broad proposition that the deployment of privileged material on the application to amend necessarily waives privilege on all the related material which is sought either before or after the amendment was granted. At least in the context of considering whether there is a relevant inconsistency, it is relevant and perhaps critical to inquire into why the material was deployed on the application to amend and if the amendment is granted, whether any such inconsistency pertains. In Merial, the particularisation of the material in question in the notice of appeal suggested that the inconsistency pertained after the amendment was granted. In this case, the disclosure of the privileged material occurred as part of an explanation for the delay in bringing forward the amendments. Otherwise, for the reasons already noted, no inconsistency presently pertains in relation to the matter in which it is known that [the defendant – the party resisting disclosure] proposes to propound its case.[231]
[230][2016] NSWSC 1599 (‘Mobis’).
[231]Mobis, [59].
Mobis is consistent with the view that Merial has a more limited application than that submitted by the Defendant. In Mobis, the significant aspect of Merial was the strategic nature of the use of the material which advanced the appellant’s case without giving the respondent an appropriate way to test or respond to that evidence, which was not the case in Mobis and is not the case here.
Conclusion regarding the Broader Waiver Application
Legal professional privilege is a fundamental right and rule of substantive law.[232] In order to allow the Broader Waiver Application, I need to be satisfied that the Plaintiffs’ conduct in selectively disclosing privileged material is inconsistent with them maintaining privilege over the remaining documents, since it would be unfair for them to do so.
[232]Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, 552 [9].
Here, the application is at least partly based on the volume of material said to be privileged that has been voluntarily disclosed, in comparison with the volume of material sought to be withheld. I find it very difficult to accept that a finding of waiver can and should be based on such a broad concept. There has to be something more than a simplistic numerical exercise. The Defendant says that the Plaintiffs have not identified a rational basis for why they have disclosed certain documents but withheld others, but I do not accept that this is something which the Plaintiffs have to do. It is trite to say it, but the onus of establishing waiver rests on the person alleging waiver, which in this instance is the Defendant. It is not sufficient for the Defendant to raise the issue, albeit in a very detailed way as is evident from the work that has gone into compiling the Broughton Table and assessing the documents in it, and then call upon the Plaintiffs to explain their approach.
For these reasons and the reasons set out at paragraphs 217 to 246 above, I do not consider that the Defendant has discharged its onus in respect of the Broader Waiver Application. The Defendant has not established that there has been selective disclosure of privileged material such that it would be inconsistent or unfair for the Plaintiffs to selectively maintain privilege in the circumstances.
Conclusion
Accordingly, I will make orders in the following form:
(a) The Defendant is to return Items 3, 12, 28, 39 and 89 in the Return List to the Plaintiffs;
(b) The Return Application is otherwise dismissed; and
(c) The Broader Waiver Application is dismissed.
These orders will be made contemporaneously with the publication of this ruling. In addition, I will make directions in respect of the costs of both applications, as follows:
(a) The parties are to confer regarding any orders as to costs in respect of both applications;
(b) If there is agreement as to costs, the parties are to submit consent orders to my Chambers by no later than 4.00 pm on 7 July 2021;
(c) If there is no agreement as to costs, each party is to submit to my Chambers:
(xx) their preferred form of order along with a brief written outline of submissions (of no more than 5 pages) by 4.00 pm on 7 July 2021; and
(xxi) any brief outline of submissions in reply (of no more than 3 pages) by 4.00 pm on 9 July 2021.
(d) Any affidavits relied upon in respect of costs are to be filed and served by 4.00 pm on 7 July 2021.
I intend to deal with any determination of costs, if there is not consent, on the papers after 9 July 2021.
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