Bridgestone Aust v Deloitte Ross Tohmatsu & Corrs No. Scciv-99-1157

[2001] SASC 178

BRIDGESTONE AUSTRALIA LIMITED v DELOITTE ROSS TOHMATSU, CORRS (SA PARTNERS) AND

CORRS (INTERSTATE PARTNERS)
[2001] SASC 178

Civil

1. DEBELLE J.          This is an application for production of documents for inspection, the documents being documents for which legal professional privilege has been claimed by the plaintiff.  The applicants are the partners of Corrs who are not members of the South Australian part of that firm.  The claim is in respect of documents 282 to 294 in a supplementary list of documents of the plaintiff dated 11 September 2000. The claim for inspection is grounded on the fact that the documents are relevant to the question whether the plaintiff has mitigated its loss.

2. The issue whether the plaintiff has mitigated its loss has been raised in the defence of the third defendants, who are the South Australian partners of the legal firm Corrs. It is not raised in the defence of the applicants, who are the partners in Corrs who are not the South Australian partners of that firm. That, I do not think, is a material issue. In any event, there is another ground upon which this application can be determined.

3. The plaintiff has discovered a letter from the Australian Taxation Office dated 8 February 1996. In that letter the Australian Taxation Office questions deductions which have been made in consequence of the plaintiff entering into two sale and lease-back transactions in May and June of 1990. Attached to that letter was a position paper of the Australian Taxation Office.

4. The plaintiff took advice from counsel and ultimately responded to the letter. The effect of the response was the plaintiff adhered to its claim for deductions for the lease payments. The Australian Taxation Office ultimately disallowed the deductions and assessed the plaintiff for tax. The plaintiff claims in these proceedings damages for negligence as against all defendants for negligence in the provision of advice, both accounting and legal, relating to the deductions for the lease payments in respect of the two sale and lease-back transactions.

5. The applicant seeks inspection of these documents on the ground they are relevant to the issue whether the plaintiff has mitigated its loss. The plaintiff has provided a more complete description of the documents for which privilege has been claimed.  It is attached to these reasons. However, that document failed to provide a sufficiently adequate description of the documents. It was still not possible to determine the nature of the documents. The plaintiff, therefore, produced the documents for inspection by me to assist in dealing with the application. I have inspected the documents. Without disclosing the content of the documents or breaching the privilege claimed in respect of those documents, it is possible to say that they are, in essence, documents recording a decision of the plaintiff to obtain legal advice in order that it might respond to the letter from the Australian Taxation Office of 8 February 1996, the arrangements made for the purpose of obtaining that advice, the documents sent to counsel seeking that advice, and notes made by different persons who conferred with counsel when preliminary advice was obtained. It seems that from these documents that written advice was ultimately obtained from counsel and, in consequence of that advice, the plaintiff responded to the letter of 8 February 1996 from the Australian Taxation Office. The letter of April 1996 has been discovered. The ground upon which the application for inspection was made is that there has been an implied waiver of legal professional privilege by reason of the issues raised in this action, in particular, the question whether the plaintiff has mitigated its loss.

6. The difficulty with that submission lies in the fact that at this stage the response in April 1996 of the plaintiff, or the proprietary of that response, is not in issue. In other words, the applicant is aware of the contents of the plaintiff’s response. It is entitled to rely on that response to the extent to which it can for the purpose of contending the plaintiff failed to mitigate its loss. However, as there is no issue as to the propriety of the response, it seems to me that the advice leading to that response is not in issue between the parties with the consequence that there is no implied waiver of legal professional privilege. For that reason, I would dismiss the application.

7. The orders will be:

   1.Dismissing the plaintiff’s application dated 24 April 2001, document no. 71.

   2.The interstate partners of Corrs shall pay the costs of and incidental to the application.

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