Buzzle Operations Pty Ltd (In Liq) v Apple Computer Australia Pty Ltd

[2009] NSWSC 225

Reported Decision: 74 NSWLR 469

New South Wales

Supreme Court

CITATION:	Buzzle Operations v Apple Computer Australia [2009] NSWSC 225 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	13 March 2009
JUDGMENT DATE :	31 March 2009
JURISDICTION:	Equity
JUDGMENT OF:	White J
DECISION:	Refer to para 33 of judgment.
CATCHWORDS:	EVIDENCE - whether affidavits and witness statements filed and served in previous Federal Court proceedings are privileged – the documents lack confidentiality as defined in s 117 of the Evidence Act 1995 and as required by s 119 of the Act – further, the documents were not prepared for the dominant purpose of the client being provided with professional legal services as required by s 119 of the Act – hence the documents are not privileged
LEGISLATION CITED:	Evidence Act 1995 (NSW) Corporations Act 2001 (Cth) Civil Procedure Act 2005 (NSW)
CATEGORY:	Procedural and other rulings
CASES CITED:	Akins v Abigroup Ltd (1998) 43 NSWLR 539 Carbotech Australia Pty Ltd v Yates [2008] NSWSC 1151 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32 Dubbo City Council v Barrett [2003] NSWCA 267 R v King [1983] 1 All ER 929 Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1 State Bank of South Australia v Smoothdale No. 2 Ltd (1995) 64 SASR 224 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2004] NSWSC 40 Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244 Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; 164 FCR 32 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 Attorney-General (NT) v Maurice [[1986] HCA 80; (1986) 161 CLR 475 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 New Cap Reinsurance Corporation Ltd (in liq) & Anor v Renaissance Reinsurance Ltd [2007] NSWSC 258 Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 Sevic v Roarty (1998) 44 NSWLR 287 Ingot Capital v Macquarie Equity [2008] NSWSC 25 Comfort Hotels Ltd v Wembley Stadium Ltd [1988] 1 WLR 872 Markisic v Commonwealth of Australia [2007] NSWCA 92; (2007) 69 NSWLR 737
PARTIES:	Buzzle Operations Pty Ltd (in liquidation) & Anor v Apple Computer Australia Pty Ltd
FILE NUMBER(S):	SC 6768/04
COUNSEL:	Applicant/Defendant: R Newlinds SC & R Higgins Respondent/Plaintiff: L V Gyles SC
SOLICITORS:	Applicant: Clayton Utz Respondent: Piper Alderman

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Tuesday, 31 March 2009

6768/04 Buzzle Operations Pty Ltd (in liquidation) & Anor v Apple Computer Australia Pty Ltd

JUDGMENT

1 HIS HONOUR: The defendants seek access to affidavits and witness statements over which the plaintiffs claim client legal privilege. The affidavits and witness statements were prepared for the purposes of proceedings brought by the first plaintiff in the Federal Court of Australia against the partners of Deloitte Touche Tohmatsu. The plaintiffs accept that the documents have potential relevance to the present proceedings. The plaintiffs claim privilege in respect of 13 affidavits and three witness statements setting out the anticipated evidence of witnesses for the Federal Court proceedings. The affidavits and witness statements were filed and served on the respondents to the Federal Court proceedings. This was done pursuant to orders made by the Federal Court on five occasions between 15 February 2007 and 4 February 2008 by which the first plaintiff was ordered to “file and serve its lay evidence” by particular dates. Those dates were extended from time to time.

2 The Federal Court proceedings were settled. The affidavits and witness statements were not read in court.

3 Privilege was claimed in respect of each of the documents pursuant to s 119 of the Evidence Act 1995 (NSW). The plaintiffs contend that the documents were privileged prior to their being filed and served in the Federal Court proceedings and that privilege was not waived by the filing and service of the documents because the documents were served pursuant to orders of that Court and hence were served under compulsion of law (Evidence Act, s 122 (5)(a)(iii)).

4 The defendants dispute the claim of privilege. They submit that although privilege might attach to drafts of affidavits and witness statements, affidavits which have been sworn or affirmed, and witness statements which have been signed, with the intention of their being served on the opposite party, are not confidential documents within the meaning of s 117 of the Evidence Act and hence cannot be privileged under s 119. They also submit that the dominant purpose of such documents being prepared was not that the plaintiff be provided with professional legal services relating to the Federal Court proceedings. They submitted that the dominant purpose of the documents is to be determined objectively and that it should be concluded that the affidavits and witness statements were prepared for purposes which included the advancing of the first plaintiff’s claim in the Federal Court proceedings, or to put facts before the Court in those proceedings. If the documents are privileged, the defendants contend that the privilege has been waived by their being filed in the Federal Court and being served on the respondents to the Federal Court proceedings. They submit that Akins v Abigroup Ltd (1998) 43 NSWLR 539 and cases which have followed it are distinguishable by reason of the terms of the orders made in the Federal Court.

5 The defendants sought the documents pursuant to a notice to produce. The documents have been produced to the Court in a sealed envelope. It was common ground that the question whether the plaintiffs could rely on privilege to resist the defendants inspecting the documents was to be determined by reference to the Evidence Act and not the common law. The notice to produce was served pursuant to r 21.10 of the Uniform Civil Procedure Rules which provides for production to a party rather than to the Court. Production has been made to the Court in order that the documents can be inspected if it is necessary or appropriate to do so in order to decide the claim for privilege. Nonetheless, the question of access is to be decided by whether the plaintiffs were not required to produce the documents for the defendants’ inspection pursuant to r 21.11 because they are “privileged documents”. That is to be determined by the provisions of the Evidence Act and not the common law. (See the definition of “privileged document” in the Dictionary.) The distinction between production and inspection which is said to arise where documents are produced on subpoena or pursuant to a notice to produce given under r 34.1, and questions of privilege are to be determined pursuant to rule 1.9, does not arise in this case. (Compare Carbotech Australia Pty Ltd v Yates [2008] NSWSC 1151 where Brereton J held (at [8]-[13]) that as rule 1.9 deals only with privilege against production, the Dictionary definitions of “privileged information” and “privileged document” did not apply where the objection was to inspection of subpoenaed documents, so that the common law rules of legal professional privilege applied.)

6 The first issue is whether the affidavits and witness statements are privileged. Privilege is claimed under s 119. That section provides:

“ 119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:
(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or
(b) the contents of a confidential document (whether delivered or not) that was prepared,
for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.”

7 The expressions “confidential communication” and “confidential document” are defined in s 117 as follows:

“ confidential communication means a communication made in such circumstances that, when it was made:

(a) the person who made it, or
(b) the person to whom it was made,

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

confidential document means a document prepared in such circumstances that, when it was prepared:

(a) the person who prepared it, or
(b) the person for whom it was prepared,
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. ”

8 The first plaintiff commenced proceedings against the partners of Deloitte Touche Tohmatsu in the Federal Court on 23 June 2006. On 15 February 2007 the Federal Court ordered that the applicant in that Court (the first plaintiff) file and serve its amended statement of claim, amended application, and its lay evidence by 1 March 2007. On 8 March 2007, the Court ordered that the time for the applicant to file and serve its lay evidence be extended to 16 April 2007. On 17 April 2007 the first plaintiff filed and served three affidavits sworn on 16 and 17 April 2007. On 23 April 2007 it filed and served an affidavit sworn on 20 April 2007. On 2 May 2007 it filed and served a further affidavit sworn on that day. On 5 June 2007 it filed and served a further affidavit sworn on 4 June 2007. It was said that this last affidavit was filed and served pursuant to the order made on 15 February 2007 as extended by the order of 8 March 2007 and further extended by an order of 6 June 2007, but the last order of 6 June 2007 was not in evidence. On 30 August 2007 the Federal Court ordered that the applicant file and serve any further lay evidence on or before 14 December 2007. That time was later extended to 14 March 2008. The remaining affidavits and witness statements were served on 14 March 2008 save for one witness statement served on 16 March 2008. They were sworn, affirmed or signed on dates ranging from 1 February 2008 to 14 March 2008.

9 The only evidence as to whether the documents were “confidential documents” within the meaning of s 117 or contained “confidential communications” within the meaning of that section was evidence of the plaintiffs’ solicitor, Ms Banton of Piper Alderman. She deposed:

“ 13. The Affidavits were never read, or otherwise tendered in open Court by any person during the conduct of the Deloitte Proceedings.
14. I was responsible for the conduct of the Deloitte Proceedings on behalf of Buzzle. This included the preparation of Affidavits. During the course of preparation of the Affidavits Piper Alderman communicated with the deponents of the Affidavits and received confidential communications from them as to the contents of the Affidavits, the substance of which would be disclosed if the affidavits were now produced. Those communications were sought by me or by solicitors in the employ of Piper Alderman, received and used for the dominant purpose of the client being provided with professional legal services relating to the Deloitte Proceedings, including as to what the Affidavits should contain and as to their form. In addition the Affidavits themselves when prepared were confidential documents prepared for the dominant purpose of the client being provided with legal services relating to the Deloitte Proceedings, namely to consider whether they should be deployed and used in the Deloitte Proceedings and if so, to serve them pursuant to the Federal Court’s orders.
15. I was not instructed at any time to serve the Affidavits on Deloitte or any other party except pursuant to the Federal Court’s orders. I did not myself, nor instruct any other solicitor to, serve the Affidavits on any other party except Deloitte. I have reviewed our files, and am able to say that the only time the Affidavits were sent to or served upon any third party (i.e. not including Counsel, or the plaintiffs’ litigation funder in the Deloitte Proceedings in respect of documents numbered 4 and 13 in the Schedule) was when they were served on Deloitte pursuant to the Federal Court’s orders identified above. ”

10 Ms Banton did not depose to any instruction or request having been given to any of the deponents of the affidavits or makers of the witness statements that they not disclose their contents. To the contrary, it must have been intended and known to the deponents, as well as the first plaintiff and its solicitors that the documents sworn, affirmed or signed would be served and thus disclosed to the Deloitte respondents. In turn, those respondents would be entitled to disclose the contents of the documents to others as might be necessary for the conduct of the Federal Court proceedings including, for example, to other potential witnesses. Whatever might be the position with respect to drafts of affidavits or witness statements, or with respect to the instructions given to the first plaintiff’s solicitors from which the affidavits and witness statements were prepared, the evidence does not establish that either the persons who prepared the document (the first plaintiff’s solicitors) or the person or persons for whom it was prepared (either the deponent or the first plaintiff) was under an express or implied obligation not to disclose its contents. To the contrary, the first plaintiff’s solicitors and the first plaintiff were required to disclose the contents of the documents, given that the documents were prepared in compliance with the orders made by the Federal Court for the documents to be filed and served. There is no evidence that the deponents were under an express or implied obligation not to disclose the contents of the documents.

11 In Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32, the Full Court of the Federal Court reached the same conclusion as to the absence of confidentiality in respect of finalised proofs of evidence created for the purpose of being served on the opponent and which were in fact served on the opponent (at [37], [42], [54]). There are conflicting authorities on this question. However, the most recent authority of an intermediate appellate court supports the conclusion I have reached. The Full Court of the Federal Court said:

“ [37] In our view, whatever is the extent of confidentiality arising from litigation privilege, one element of confidentiality is essential, namely non-disclosure to one’s opponent. To say (as does the ACCC) that the finalised proofs of evidence were created and served for the existing litigation can be accepted. However, in our view it is impossible for litigation privilege to attach to the finalised proofs of evidence, when the finalised proofs of evidence were created for the purpose of serving them on the ACCC’s opponent and when they were in fact served on that opponent.

...

[42] There have been other comments that indicate that the rationale of litigation privilege is to secure a fair trial within the adversarial process and to facilitate the common law mode of trial: see Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1 at 21 per Seaman J; Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 336 per Batt JA; Wheeler v Le Marchant (1881) 17 Ch D 675 at 685 and AWB Ltd v Cole (2006) 152 FCR 382 at 424 at [158] per Young J. All formulations emphasise, in one way or another, that the communications made or materials to be protected are those which are made confidentially between the client and the legal representative or otherwise come into existence for the dominant purpose of the litigation, and which are to be kept away from the opposing party.
...
[54] The above application of principle disposes of the appeal. The ACCC relies upon litigation privilege. The finalised proofs of evidence were prepared for provision to and provided to Visy, the ACCC’s opponent in existing litigation. The disclosure was not made on a relevantly confidential basis, although made expressly with the protection of the ‘implied undertaking’. The fact that the existence of the implied undertaking was expressly part of Heerey J’s orders makes no difference to the analysis. The ACCC did not seek any form of restriction upon the use Visy could make of the finalised proofs of evidence, save as to the limited ‘confidentiality’ regime already in place. ”

12 No authority has been cited to me which requires a different conclusion. In particular, in Akins v Abigroup Pty Ltd, the New South Wales Court of Appeal did not decide the question as to whether or not the witness statements there in issue were privileged. The Court refused leave to the appellant to argue that question as it had been accepted before the trial judge that the statements in question were privileged prior to being served in accordance with the requirements of the Practice Note (at 542, 550). In Dubbo City Council v Barrett [2003] NSWCA 267, the parties evidently accepted that the expert’s report served by one defendant on the plaintiff was privileged. (Compare R v King [1983] 1 All ER 929.) The only argument was whether privilege had been waived. In Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1, the affidavit was taken from a deponent who was known to be terminally ill and no decision had been made as to whether or not it would be served. It was in the same position as a proof of evidence. In State Bank of South Australia v Smoothdale No. 2 Ltd (1995) 64 SASR 224, the Full Court of the Supreme Court of South Australia held that witness statements served pursuant to orders of the Court were privileged and that it would make a mockery of legal professional privilege were it otherwise. However, for the reasons given by the Full Court of the Federal Court in ACCC v Cadbury Schweppes Pty Ltd (at [73]), that analysis should not be followed.

13 In Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2004] NSWSC 40, Bergin J upheld a claim for client legal privilege in respect of a supporting affidavit required to be served by rules of court applying to proceedings under the Corporations Act 2001 (Cth) and which was in fact so served. However, so far as appears, the argument in support of the claim that the documents were not privileged was confined to a submission as to the dominant purpose for which the affidavit was prepared, rather than to whether it was confidential. In any event, in the absence of binding authority of the Court of Appeal, I should follow the latest authority of an intermediate appellate court on this question. Although in ACCC v Cadbury Schweppes Pty Ltd the Full Court of the Federal Court was concerned with legal professional privilege at common law rather than client legal privilege under the Evidence Act, their Honours’ reasoning on the issue of the confidentiality of signed affidavits and witness statements which are intended to be and are served is directly applicable to the questions which arise under s 117 of the Act.

14 This is sufficient to dispose of the questions raised on this application. However, in case the matter goes further I will also deal with the other issues.

15 There is no doubt that the affidavits and witness statements were prepared for the dominant purpose of use by the first plaintiff in litigation then pending. At common law, communications between a party or its solicitor and a witness for the dominant purpose of use in or in relation to pending or anticipated litigation are privileged (Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244 at 246 [4]; Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; 164 FCR 32 at 41-42 [27]). In Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49, Gleeson CJ, Gaudron and Gummow JJ said (at 64 [35]):

“ Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court. ”

16 In Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, Barwick CJ said (at 677):

“Having considered the decisions, the writings and the various aspects of the public interest which claim attention, I have come to the conclusion that the Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.” (Reference omitted.)

17 In Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 Deane J said (at 490) that:

“It is a substantive general principle of the common law and not a mere rule of evidence that, subject to defined qualifications and exceptions, a person is entitled to preserve the confidentiality of confidential statements and other materials which have been made or brought into existence for the sole purpose of his or her seeking or being furnished with legal advice by a practising lawyer or for the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings.”

18 As Goldberg J observed in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, s 119 of the Evidence Act expresses the “litigation privilege” more narrowly than it is expressed at common law. At common law, the privilege applies to communications made in connection with the provision of legal services for the dominant purpose of use in legal proceedings. In Trade Practices Commission v Sterling, Lockhart J (at 246) described two of the categories of legal professional privilege as covering:

“ (e) Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence.
(f) Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action. ” (Citations omitted)

19 Under s 119 the relevant dominant purpose is not that the communication or document be for the purpose of litigation but that it be for the purpose of the client being provided with professional legal services. That is a narrower concept. In New Cap Reinsurance Corporation Ltd (in liq) & Anor v Renaissance Reinsurance Ltd [2007] NSWSC 258 I said:

“ 28 A lawyer will provide professional legal services in relation to a witness’ statement of evidence where the lawyer is asked to advise on what the statement should contain and settle the form of the statement. The deployment of the final report by the plaintiff’s lawyers through its service on the opposite party and its tender into evidence will also constitute the provision of professional legal services relating to the proceeding.

29 Section 119 directs attention to the dominant purpose for which each confidential communication or confidential document comes into existence. The dominant purpose for which a final expert’s report or final witness statement is brought into existence would presumably be for the purpose of being laid before the Court as the witness’ evidence. Prima facie, it would not be privileged ( Attorney-General (NT) v Maurice at 480 ). ”

20 I there concluded that drafts of an expert’s report which had been provided to the parties’ lawyers for the purposes of their comment and settling the form of the report were privileged. I observed that the same conclusion would not necessarily follow in respect of any drafts of the expert’s report retained by the expert (at [34]-[37]).

21 No evidence was adduced as to the purpose of the deponents of affidavits or the makers of the witness statements in providing their affidavits and statements. The evidence of the plaintiffs’ solicitor quoted in para [9] above is that it was her purpose that the affidavits should be prepared to consider whether they should be deployed and used in the Federal Court proceedings, and if so, for them to be served pursuant to the Federal Court orders. She could not give evidence of the deponent’s purpose, nor of the purpose of the first plaintiff’s liquidator. Moreover, whilst her purpose is relevant, the question of what is the dominant purpose for the preparation of the affidavits and witness statements is to be determined objectively (Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia per Callinan J at 107 [172]; Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [6]).

22 I do not consider that the plaintiffs’ solicitor’s own description of her purposes as being “dominant” carries any weight, particularly as she did not address any other purpose that she or her client had in the preparation of the documents. At least a purpose of the final affidavits and witness statements must have been to tell the Court and the respondents of the facts which the applicant in those proceedings sought to establish. It is hard to conceive how that could not have been the dominant purpose of the final affidavits and witness statements. The onus of establishing that the dominant purpose of preparation of the documents was for the first plaintiff to be provided with professional legal services fell on the plaintiffs. In my view that onus has not been discharged. I reach that conclusion notwithstanding that the plaintiffs’ solicitor was not required for cross-examination. In my view, the formulaic nature of her evidence, her failure to address with particularity each of the affidavits and statements for which privilege is claimed, and her failure to address other purposes the documents were intended to serve means that her assertion as to her dominant purpose carries no weight. In any event, the solicitor’s purpose is not the only relevant subjective purpose to be considered.

23 Mr Gyles SC for the plaintiffs submitted that the documents were privileged because the prior communications between the deponents and the plaintiffs’ solicitors would clearly be confidential and made for the dominant purpose of the plaintiffs being provided with professional legal services, namely, the preparation of the affidavits, and those communications would be reproduced in the affidavits. Hence, he submitted that the affidavits were privileged, and in this respect referred to the judgment of King CJ in State Bank of South Australia v Smoothdale No. 2 Ltd at 226. There his Honour said:

“ The argument sought to be advanced by the appellant is that the statements of which production is sought, as distinct from the original statements taken from the witnesses, were prepared and signed for the purpose of compliance with the order, and were not documents brought into existence for submission to legal representatives for the sole purpose of use in legal proceedings; Grant v Downs (1976) 135 CLR 674, Baker v Campbell (1983) 153 CLR 52 per Brennan J at 108. I think that the argument is fallacious. The documents in question are in substance merely a reproduction of statements already obtained from witnesses for the sole purpose of use in the proceedings, in a form suitable for compliance with the order. They do not lose their character as statements of witnesses because they are prepared with a view to compliance with the order.”

24 There are two difficulties with this submission. The first is that the evidence does not address the extent to which the signed affidavits and witness statements reflect prior communications of the deponents with the plaintiffs’ solicitors.

25 The second is that demonstrated by the Full Court of the Federal Court in ACCC v Cadbury Schweppes Pty Ltd at [73]. Their Honours said:

“ ...we do not consider it correct to conclude that the final witness statements were being prepared and signed for the purpose of compliance with a court order or that the documents were merely reproductions of statements already obtained by witnesses for the sole (now dominant) purpose of use in the proceedings so that they were privileged. This fails to appreciate a number of matters. Drafts and final proofs are by nature and in fact different documents. A draft may well include information which is not included in a final version of a witness statement given to an opposing party. A draft may well be a ‘discussion’ document, intended only to be seen and considered by the party’s legal advisor. It should not be assumed that the final version is just a reproduction of anything that comes before it. Even if it be so, once the decision has been made to call a particular witness to give evidence and that the evidence will comprise that which is in the witness statement, that final witness statement assumes a different character. The final version of a proof of evidence is the document prepared for disclosure to the court and to the opponent. The ‘essential character’ of a final proof of evidence is to make disclosure to the opponent and the court of the evidence which is proposed to be led at trial. Such finalised witness statements may be prepared in the finalised form because of the court order for disclosure of evidence before the hearing. However, the fact remains that the purpose of the party preparing and delivering a final version of a witness statement is to give advance notice of what evidence that party proposes to put before the court. It does not matter whether the finalised version was or was not intended to be tendered in court — the purpose of bringing into existence the finalised proof of evidence was to give it to the opposing party at the time of service and to disclose the information contained in the proof. ”

26 In ACCC v Cadbury Schweppes Pty Ltd the Full Court of the Federal Court said (at [55]):

“ [55] As the subject matter of this appeal is the finalised proofs of evidence in the possession of Visy, and not copies of them, say, in the hands of the ACCC, no issue waiver arises. If, for instance, the finalised proofs of evidence in the possession of Visy were no longer available, and copies in the hands of the ACCC were sought, a question of waiver may arise in these circumstances having regard to the service of the finalised proofs of evidence. This is not the current position. ”

27 In the present case I am not concerned with copies of affidavits and witness statements in the possession of the respondents to the Federal Court proceedings on whom they were served, but those in the possession of the plaintiffs. Hence it might be said that the question is one of waiver of privilege rather than the existence of privilege. However, in my view, the reasoning in ACCC v Cadbury Schweppes Pty Ltd demonstrates that the finalised proofs of evidence which, at the time they were created as final documents were intended to be served, demonstrates that privilege did not attach either to the affidavits and witness statements which were filed, nor to those which were served, nor to the copies retained by the party by whom they were served. As the documents which were served were not confidential, the copies also could not have been confidential.

28 In any event, for the reasons above in relation to s 119, the documents filed and served were not brought into existence for the dominant purpose of the plaintiffs being provided with professional legal services. The plaintiffs did not submit that the copies of the affidavits and witness statements retained by the plaintiffs and their solicitors were privileged even if the original of those documents filed with the Federal Court or the copies served on the respondents in the Federal Court were not privileged. It may be arguable that the copy documents retained by the plaintiffs and their solicitors were brought into existence for the dominant purpose of the first plaintiff being provided with professional legal services because they would be the documents to be used by the first plaintiff’s solicitors and counsel in the Federal Court proceedings. However, the point would be an arid one if the original documents filed with the Federal Court, or the copies in the hands of the respondents in the Federal Court were not privileged, as the defendants could obtain the documents by a longer and doubtless more expensive route. (As to obtaining inspection of affidavits on the Federal Court file see Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 225.) It is quite proper that no such argument was advanced for the plaintiffs, as success would be inconsistent with the quick and cheap resolution of the real issues in the proceedings. The argument could have no effect on the just resolution of the proceedings because the defendants could obtain the documents in another way. (Civil Procedure Act 2005 (NSW), s 56(3)).)

29 Accordingly, I conclude that the documents are not privileged because they are not confidential documents as defined in s 117 and it has not been shown that they were prepared for the dominant purpose specified in s 119.

30 It follows that no question of waiver of privilege arises. Had the question been one of waiver, I would be bound to hold that as the affidavits and witness statements were served pursuant to orders of the Federal Court, disclosure was made under compulsion of law (Akins v Abigroup Ltd; Sevic v Roarty (1998) 44 NSWLR 287 at 293, 301; Dubbo City Council v Barrett at [16]; Ingot Capital v Macquarie Equity [2008] NSWSC 25 at [32]). In Akins v Abigroup Ltd, Mason P, who gave the leading judgment, rejected the submission based on Comfort Hotels Ltd v Wembley Stadium Ltd [1988] 1 WLR 872 at 877-878 that the usual order and Practice Note merely brought forward the time at which the parties were required to disclose the evidence of their witnesses and thereby waive privilege (at 551). His Honour did so on the ground that the Practice Note obliged a party who intended to rely upon the evidence to serve statements or reports on pain of contempt.

31 Whilst it is true that the orders of the Federal Court were not framed in precisely the same terms, that is, they did not expressly provide that the first plaintiff should file and serve affidavits or witness statements it intended to use, such an obligation was implied. There is no reason that the same sanction would not be available for breach of the Federal Court’s orders as would have been available in Akins v Abigroup Ltd for breach of the usual order for hearing made pursuant to Practice Note no. 39. In any event, even if Akins v Abigroup Ltd could be distinguished on this ground, the later cases could not.

32 Nonetheless, for the reasons previously given, the authorities on waiver of privilege by disclosure under compulsion of law by which I am bound did not decide that such sworn affidavits and final statements of evidence which are intended to be and are served are privileged. It is true that in Akins v Abigroup Ltd and in Dubbo City Council v Barrett, it appears to have been assumed that the documents were privileged. However, those cases are authority for what they decide, not what they assume (Markisic v Commonwealth of Australia [2007] NSWCA 92; (2007) 69 NSWLR 737 at [56]).

33 For these reasons I conclude that the plaintiffs are not entitled to maintain privilege over the documents in question. I make an order in accordance with para 2 of the defendants’ interlocutory process dated 12 March 2009. I will hear the parties on costs, but prima facie the defendants are entitled to their costs of and incidental to the interlocutory process.

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01/02/2010 - r 21.20 amended to r 21.10 - Paragraph(s) 5