Brayton & Brayton (No 5)
[2022] FedCFamC1F 780
Federal Circuit and Family Court of Australia
(DIVISION 1)
Brayton & Brayton (No 5) [2022] FedCFamC1F 780
File number(s): SYC 5516 of 2017 Judgment of: STRUM J Date of judgment: 14 October 2022 Catchwords: FAMILY LAW – EVIDENCE– Asserted legal-professional privilege – Where there is no evidence of the circumstances giving rise to the creation of the documents said to be privileged – Orders previously made for the filing of evidence – Claim to privilege dismissed. Cases cited: Bailey and Anor v Director-General, Department of Land and Water Conservation and Ors (2009) NSWLR 333
Hancock v Rinehart (Privilege) [2016] NSWSC 12
Schreuder v Murray (No 2) (2009) 260 ALR 139
Strahan & Strahan & Commissioner of Taxation (2013) FLC 93 - 570
Waterford v Commonwealth (1987) 163 CLR 54
X Corporation Pty Ltd & Jess and Anor (2016) FLC 93-696
Heydon, J D, Cross on Evidence, (LexisNexis, 13th edition, 2021)
Division: Division 1 First Instance Number of paragraphs: 28 Date of hearing: 7 October 2022 Place: Melbourne Counsel for the Applicant: Ms Jeliba Solicitor for the Applicant: Barkus Doolan Winning Solicitor for the First Respondent: Landerer & Company Solicitors Solicitor as counsel for the Second to Tenth and Twelfth to Nineteenth Respondents: Mr Carragher Solicitor for the Second to Tenth and Twelfth to Nineteenth Respondents: WRP Legal & Advisory ORDERS
SYC 5516 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BRAYTON
Applicant
AND: MR BRAYTON
First Respondent
MS AA BRAYTON
Second Respondent
MR TOBLER (and others named in the Schedule)
Third Respondent
order made by:
STRUM J
DATE OF ORDER:
7 OCTOBER 2021
THE COURT ORDERS THAT:
1.The First Respondent Husband be excused from further appearance at the hearing this day.
2.The Notices of Objection filed by DD Group Pty Ltd, the Sixth Respondent on 24 February 2022 and by Mr BB Brayton on 3 March 2022 (“objectors”) be dismissed.
3.The objectors produce the three documents the subject of their dismissed objections to the Sydney Registry of this Court by 4:30pm this day.
4.Upon production, the documents be released for inspection and copying by all parties.
AND THE COURT NOTES THAT:
A.This matter has been allocated to the Major Financial Proceedings List (“the List”) and will be managed by a judge of Division 1 of the Court and docketed to the Honourable Justice Strum
B.Pursuant to s 68 of that Federal Circuit and Family Court of Australia 2021 (Cth) (“the FCFCOA Act”), the parties are expected to note and comply with the overarching purpose as identified in s 67 of the FCFCOA Act and r 1.04 of the Rules.
C.The Court expects the parties and their legal representatives to comply with the Rules of Court, observe the overarching purpose as identified above, comply with the practice direction referable to the List and comply with directions.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Brayton & Brayton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
DELIVERED EX TEMPORESTRUM J:
These proceedings have been extant for five years and are listed for trial before the Honourable Justice Wilson on 7 November 2022, having previously been listed for trial and adjourned in 2021 and again in September 2022, through no fault of the court.
The applicant wife, Ms Brayton, was represented today by Ms Jeliba of counsel. The first respondent husband, Mr Brayton, was represented by his solicitor, Mr Pozniak, who belatedly sought to be and was excused from attendance at this hearing. There is a multitude of other respondents, only two of whom were represented today by Mr Carragher, solicitor, namely: the sixth respondent, DD Group Pty Ltd (“DD Group Pty Ltd”), and the 13th respondent, Mr BB Brayton.
On 24 November 2021, a subpoena for the production of documents was issued at the behest of the wife, directed to the proper officer of DD Group Pty Ltd, seeking the production of (inter alia) “all correspondence passing between the company and the husband (or anyone on his behalf) including documents sent with such correspondence relating to the share transfer from the husband to [DD Group Pty Ltd] dated 9 July 2021”.
On 24 February 2022 a Notice of Objection to that subpoena was filed on behalf of DD Group Pty Ltd merely asserting that “production of 2 documents marked ‘subject to claim for legal professional privilege by [DD Group Pty Ltd]’ are objected to on basis of [sic] claim for LPP [sic] from both production and inspection”. It is clear that is a reference to legal professional privilege.
On 2 December 2021, another subpoena for the production of documents was issued at the behest of the wife, directed to Mr BB Brayton, seeking the production of (inter alia) “all original or copy documents and records, including but not limited to correspondence, emails, letters, file notes and memoranda, relating to the change of shareholdings in the name of the husband in his capacity as a shareholder” in various companies to DD Group Pty Ltd as trustee for The DD Trust in or around June 2021.
On 3 February 2022, a Notice of Objection to that subpoena was filed on behalf of Mr BB Brayton, in the following terms: “I object to production of 1 document marked ‘subject to claim for legal professional privilege by [DD Group Pty Ltd]’, on the basis that it is subject to a claim for legal professional privilege from both production and inspection. I make that claim as a director of [DD Group Pty Ltd]”.
On 25 March 2022, submissions were filed on behalf of DD Group Pty Ltd in support of its Notice of Objection to the subpoena to it.
On that same date, submissions were filed on behalf of Mr BB Brayton and DD Group Pty Ltd in support of his Notice of Objection.
On 4 April 2022, an outline of submissions was filed on the half of the wife in response to the Notices of Objection.
On 7 September 2022, Wilson J made orders for the transfer of the “issue of implied waiver” to me, and for the parties to file and serve affidavit material in support of the documents to which I have referred above. Neither the wife, nor the objectors, have done so. Any such documents were required to be filed, at the latest, by 29 September 2022.
This aspect of the proceedings having been transferred to me, I made further orders on 7 September 2022, including for the preparation of an electronic court book by 3 October 2022. This morning, four days late, an electronic court book was provided, comprised of 34 pages, which the index thereto suggests is comprised of three categories of documents: a vesting deed, various acknowledgements of bare trust and various share transfer forms.
At the commencement of the hearing, I was told by the parties that the only documents upon which they relied, and which they sought I read, were the subpoenas, the Notices of Objection thereto and the written submissions, together with, on the part of the wife, her third further amended points of claim in respect of the relief sought in paragraph 1 of her fifth further amended Initiating Application filed 28 July 2022. Accordingly, it is not apparent how the documents in the late-filed court book were said to be germane to the matter in issue today.
The matter was stood down briefly to enable me to read those documents. When the matter resumed, I confirmed with the parties that they were content to proceed today, notwithstanding none of them having filed affidavits pursuant to the orders made by Wilson J on 7 September 2022, and that they did not wish to rely upon any other filed affidavit material.
Mr Carragher, who appeared on behalf of the objectors, confirmed that, in respect of all three documents the subject of objection by his clients, the argument is the same and that I could determine the issue by reference to the submissions in support of the objection to only one of those documents. Accordingly, I focused on the first of the two documents to which DD Group Pty Ltd objects in the subpoena addressed to it. The argument is contained at paragraphs 8, 9 and 10 of the submissions on its behalf. They provide as follows:
First Document
8.The First document that is objected to is what can be referred to in general terms as an email chain, comprising four (4) emails with the earliest in time dated 25 June 2021 and the latest dated 25 June 2021 (First Document). The four (4) emails comprising the email chain are between [Mr Brayton and Mr Tobler], with [Mr BB Brayton] copied to two (2) of them. The final email in the chain also attaches a number of draft Share Transfer forms and a draft Vesting Deed.
9.In respect of the above persons who either sent or received the email correspondence:
9.1.[Mr Brayton (Mr Brayton)] is a director of Argus;
9.2.[Mr Tobler] is [employed at] WRP Legal & Advisory. WRP Legal & Advisory act as legal representative for [DD Group Pty Ltd]; and
9.3.[Mr BB Brayton] is also director of [DD Group Pty Ltd].
Claim for legal professional privilege in respect of the First Document
10.[DD Group Pty Ltd] objects to the production and or inspection of the First Document on the basis that:
10.1.it comprises a communications between [Mr Brayton] in his capacity as a director of [DD Group Pty Ltd] with [Mr Tobler] in his capacity as legal representative of [DD Group Pty Ltd] for the purpose of [Mr Tobler] advising and preparing legal documents on behalf of [DD Group Pty Ltd], namely share transfer forms and a vesting deed; and
10.2.in the premises, legal professional privilege attaches to the First Document as it comprises a confidential communication between a lawyer ([Mr Tobler]) and a client ([DD Group Pty Ltd], by its directors [Mr Brayton]) made for the dominant purpose of the lawyer ([Mr Tobler]) providing legal advice and legal services to [DD Group Pty Ltd].
The matters set out in paragraphs 8 and 9 of the submissions do not appear in dispute.
Mr Carragher conceded that his clients bear the onus of proving that the communications are privileged. As became clear in the course of my exchanges with him, I am of the view that the grounds of objection and the submissions in support thereof, in the absence of any evidence before the Court, are fatally flawed. These are my ex tempore reasons.
relevant law
In X Corporation Pty Ltd & Jess and Anor (2016) FLC 93-696 at [35] – [36], the Full Court (Strickland, Aldridge and Cronin JJ) said as follows:
35.There is no doubt that a person seeking to resist the production of a document to a court on the ground that it records a confidential communication must prove its nature by sufficient and persuasive evidence.
36.In Barnes and Anor v Commissioner of Taxation (Cth) (2007) 242 ALR 601 the Full Court of the Federal Court said at 605:
18.The authorities emphasise the need for focused and specific evidence in order to ground a claim for legal professional privilege. In Kennedy v Wallace (2004) 142 FCR 185; 213 ALR 108; [2004] FCAFC 337 (Kennedy), Black CJ and Emmett J reiterated the principles that verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege: see also National Crime Authority v S (1991) 29 FCR 203 at 211; 100 ALR 151 at 158–60 (per Lockhart J); Grant at CLR 689; ALR 589 (per Stephen, Mason and Murphy JJ). Where possible the court should be assisted by evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each particular document. The fact that generalised evidence is not challenged in cross-examination does not mean that such evidence must be accepted, particularly when it is as manifestly inadequate as it is in this case. As in Kennedy, mere general assertions of the purpose of creation of the documents are insufficient to discharge this onus. Even though in that case some evidence as to the purpose of particular records was adduced, Allsop J at [168] considered that the onus had not been discharged because the evidence did not permit a conclusion to be drawn as to the dominant purpose of the creation of any particular document or entry in a document. Simply to show that one purpose for creation of the document was to obtain legal advice or assistance is not good enough.
(Emphasis in original)
The gravamen of the objection in the case of each of the three disputed documents is that they constitute communications between the husband, in his capacity as a director of DD Group Pty Ltd, with a legal representative of that company, for the purpose of that lawyer “advising and preparing legal documents” on behalf of DD Group Pty Ltd, such that (it is asserted) legal professional privilege attaches to each of the documents as, in each case, it is said to comprise “a confidential communication between a lawyer … and a client … made for the dominant purpose of the lawyer … providing legal advice and legal services to [DD Group Pty Ltd]”.
That argument is unsupported by reference to any evidence whatsoever. However, Mr Carragher submitted that I could draw certain inferences. Given the unparticularised submissions and the absence of any evidence whatsoever in support thereof, I disagree. In my view, the objections do not in any way meet the requirements discussed by the Full Court in X Corporation & Jess. There is no evidence whatsoever in order to ground the claim for legal professional privilege, let alone any focused and specific evidence. The objections do no more than resort to verbal formulae and bare conclusory assertions of purpose. There is no evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each of the three documents. The mere general assertions as to the purpose of the creation of the documents, in submissions and not even in evidence, are insufficient to discharge the objectors’ onus. Even the submissions (let alone any evidence) do not permit a conclusion to be drawn as to the dominant purpose of the creation of any of the documents or any particular entry therein. Even if the objectors were able to show that one purpose for the creation of the documents was to obtain legal advice or assistance that would not be good enough.
I was invited by Mr Carragher to inspect the documents. However, as Tobias JA said in Bailey and Anor v Director-General, Department of Land and Water Conservation and Ors (2009) NSWLR 333, to which the full Court referred in X Corporation & Jess at [37], where there has been a failure to file and serve adequate evidence to support a claim for privilege, the “parties should not assume that any deficiencies in the evidence will be covered by the judge inspecting the document in question”. In this case, it is not a question of deficiencies in evidence; there simply is no evidence.
In Strahan & Strahan & Commissioner of Taxation (2013) FLC 93 - 570 at [29] (to which reference was made in X Corporation & Jess), the Full Court referred to the 9th edition of Heydon’s Cross on Evidence at [25240]. That passage also appears in the most recent, namely,13th edition, but with the following addition in the body thereof:
There must be proper identification of the basis on which privilege is claimed. ‘It is not appropriate for the party merely to assert the existence of the privilege, deliver the documents to the presiding in judicial officer, and request him or her to analyse them and determine whether there is a proper basis for the claim’.
See also Schreuder v Murray (No 2) (2009) 260 ALR 139 at [62] per Buss JA.
In the present case, the objectors have not justified their claim to privilege. The submissions do not sufficiently establish the nature of the documents the subject of their objections. Further, there is no evidence describing the circumstances in which they were brought into existence. Rather, in my view, the submissions resort to inadequate verbal formulae and there exists no substantive difference between an affidavit of documents (to which reference is made in Cross on Evidence) and submissions such as those of the objectors, “baldly asserting that the privileged purpose was the dominant purpose for which the document was wrought into existence”. If anything, an affidavit of documents is at least some evidence, albeit inadequate. In this case, there is not even that.
In X Corporation & Jess, the Full Court further said at [53] – [58]:
53.In Bailey at 348 – 349, Tobias JA referred to recent authority as to the judge inspecting the relevant documents as follows:
60.A common law claim for legal professional privilege was recently discussed by Giles JA, with whom Mason P and Beazley JA agreed, in State of New South Wales v Jackson [2007] NSWCA 279. His Honour said (at [24]):
“In ruling on a claim to legal professional privilege or client legal privilege the court may inspect the relevant documents (Grant v Downs (1976) 135 CLR 674 at 677 and 688–689; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246–247; Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 at 541–542; Esso Australia Resources Ltd v Commissioner of Taxation at [52]; AWB Ltd v Cole (2006) 152 FCR 382 at 391; see also s 133 of the Evidence Act 1995). Inspection is discretionary (Grant v Downs (at 688–689); District Council of Mallalla v Livestock Markets Ltd (2006) 94 SASR 258 at [30]), for such assistance as it may provide in arriving at the documents’ status. In Esso Australia Resources Ltd v Commissioner of Taxation (at [52]) Gleeson CJ and Gaudron J and Gummow J said, after observing that a claim for privilege is not conclusively established by use of a verbal formula, that a court ‘should not be hesitant to exercise’ its power to examine documents. Where the parties have put evidence before the court, however, beyond the use of a verbal formula, I respectfully remain of the view expressed in Woollahra Municipal Council v Westpac Banking Corporation (at 542), that the court should not unnecessarily pay regard to material which can not be known to the party challenging the claim to privilege.”
61.In Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529, Giles J (as he then was) at 542 (being the page reference referred to by him in State of New South Wales v Jackson) when considering whether he should inspect the documents in dispute for the purpose of reaching a conclusion as to whether they were privileged, observed:
“In Grant v Downs (1976) 135 CLR 674 at 689, the power to do so [that is, to inspect] was recognised and it was said that ‘in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence’. Inspection should not be undertaken unless there is good reason to do so. The Court should be able to proceed upon evidence describing the documents and the circumstances of their creation, and should not unnecessarily pay regard to material which cannot be known to the party challenging the claim to privilege.”
62.His Honour was there dealing with the power to inspect at common law. The critical word in the passage referred to is “unnecessarily”. If the court is unable to proceed upon the evidence, as in the present case, then in my view there is no impediment to the court exercising its undoubted discretion under s 133 to order that the document or documents be produced and inspected for the purpose of determining the question of whether privilege attaches. How the court utilises the power to inspect under s 133 will obviously depend on the circumstances of each case. I do not consider that merely because the party resisting the claim for privilege objects to the judge exercising the power under s 133 is of itself a legitimate reason to refuse to exercise the discretion: compare Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380 at [66] per McDougall J. As was noted by Giles JA in State of New South Wales v Jackson in the passage which I have recorded at 348 [60] supra, in Esso Australia Resources Ltd v Commissioner of Taxation(Cth) (1999) 201 CLR 49 at 70 [52], Gleeson CJ, Gaudron J and Gummow J observed that a court “should not be hesitant” to exercise its power to examine documents.
54.In Bailey the complaint was that the trial judge had inspected the documents.
55.It is true that the High Court has encouraged judges to inspect the documents themselves. In Grant v Downs (1976) 135 CLR 674 Stephen, Mason and Murphy JJ said at 689:
…The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.
56.In Trade Practices Commission v Sterling (1979) 36 FLR 244, Lockhart J said at 246 - 247:
It is not open to doubt that the court has power, in a proper case, to inspect documents where a claim of privilege is made to resist an application for inspection of documents by the opposite party. See Grant v. Downs, and Westminster Airways Limited v. Kuwait Oil Co. Limited. However, it is as well to bear in mind what was said by Jenkins L.J. in Westminster Airways Limited v. Kuwait Oil Co. Limited: “But there is nothing in the rule, or in the authorities, to constrain the court to hold that, in every case where a claim to privilege is made and disputed, the party seeking production is entitled to come to the court and (as it were) demand as of right that the court should go behind the oath of the opposite party and itself inspect the documents. The question whether the court should inspect the documents is one which is a matter for the discretion of the court, and primarily for the judge of first instance…”
(Footnotes omitted)
57.Finally, there are the comments of Brereton J to the same effect in Hancock, where his Honour said:
31....Moreover, it has often been observed that a party is not entitled to insist on the court inspecting the documents, it being a matter for the discretion of the judge, who will only do so if there is good reason. While those comments have been made in response to requests by applicants for production asking the court to go behind the affidavit evidence in support of the claim and inspect the documents, they apply a fortiori where the claimant, having adduced insufficient evidence otherwise to sustain the claim, requests the court to inspect the documents (to the exclusion of the applicant).
…
35....No party – least of all the party claiming privilege – may insist that the court inspect the documents.
58.These authorities establish that any inspection of documents is essentially an issue for the trial judge. They support a trial judge’s reticence to do so in order to overcome a lack of evidence adduced by the person seeking to maintain the privilege. This is so even though r 15.26(2) of the Family Law Rules 2004 (Cth) permits the court to compel the production of documents to it for the purpose of ruling on an objection to production.
Insofar as Tobias JA in Bailey said that if the Court is unable to proceed upon the evidence, there is no impediment to the court exercising its discretion to order that the document(s) be produced and inspected for the purpose of determining the question of whether privilege attaches, in my view, that does not apply where an objector, whether by omission or commission, does not put any evidence whatsoever before the Court. I am fortified in coming to this conclusion by the comments of Brereton J in Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [31] and [35] that no party may insist that the Court inspect documents, least of all the party claiming privilege, where that claimant has adduced insufficient evidence otherwise to sustain the claim.
In my view, inspection of the documents in this case would not be to support the claim to privilege; rather, it would be to make out the claim. That is not the task of the court. In this case, the objectors are represented by Mr Carragher, who is a solicitor in the employ of WRP Legal & Advisory, the very firm said to have been a party to the asserted confidential communications with the objectors, made for the asserted dominant purpose of that firm providing legal advice to them. The objectors were provided with the opportunity to file affidavit material and they have not done so.
conclusion
In the circumstances, I decline to inspect the documents and I shall dismiss the Notices of Objection. However, there is one matter I wish to add. Given my decision on the threshold issue, it has not been necessary for me to consider the wife’s outline of submissions filed on 4 April 2022 in any detail. Like the objectors, she too has not filed any evidence pursuant to the orders made by Wilson J on 7 September 2022, nor was I referred to any affidavits previously filed by her. However, in her outline of submissions, she refers to a number of matters which should have put the objectors on notice, all the more so, that they would be well advised to respond to. These matters include that Mr Tobler, a legal practitioner at WRP Legal & Advisory and a person said to be a party to the communications constituted by two of the three documents to which objection is taken, is the third respondent in these proceedings, is a co-director of various companies with the husband and is (he admits) a friend and business associate of the husband.
It is submitted on behalf of the wife at [6], in reliance upon Waterford v Commonwealth (1987) 163 CLR 54 at 62, 70 and 95, that in order for a communication to be privileged, the lawyer giving the advice must be independent to the client. Given the way I have decided this case, I do not need to determine this point. However, given the matters flagged on behalf of the wife in her outline of submissions, it behoved the objectors, all the more so, to put evidence before the Court.
In the circumstances, I shall order that the Notices of Objection filed on 24 February 2022 and on 3 March 2022 be dismissed; that the objectors produce the three documents the subject of their dismissed Notices of Objection to the Sydney Registry of this Court by 4:30pm this date; and that upon production, the documents be released for inspection and copying by all parties.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strum. Associate:
Dated: 14 October 2021
SCHEDULE OF PARTIES
SYC 5516 of 2017 Respondents
Fourth Respondent:
AM PTY LTD
Fifth Respondent:
CC HOLDINGS PTY LTD
Sixth Respondent:
DD GROUP PTY LTD
Seventh Respondent:
EE INVESTMENTS PTY LTD
Eighth Respondent:
FF PTY LTD
Ninth Respondent:
GG HOLDINGS PTY LTD
Tenth Respondent:
AN HOLDINGS PTY LTD
Eleventh Respondent:
MR AQ
Twelfth Respondent:
MR CS TOBLER
Thirteenth Respondent:
MR BB BRAYTON
Fourteenth Respondent:
Z GROUP OF COMPANIES PTY LTD
Fifteenth Respondent:
AW PTY LTD
Sixteenth Respondent:
CT PTY LTD
Seventeenth Respondent:
AV PTY LTD
Eighteenth Respondent:
AX PTY LTD
Nineteenth Respondent:
Z CORP PTY LIMITED
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