Cape Wools SA v KPMG Corporate Finance (Vic) Pty Ltd

[2002] VSC 571

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7236 of 2000

CAPE WOOLS SA	Plaintiff
v
KPMG CORPORATE FINANCE (VIC) PTY LTD (ACN 007 363 215) AND OTHERS	Defendants

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	10 OCTOBER 2002
DATE OF JUDGMENT:	18 DECEMBER 2002
CASE MAY BE CITED AS:	CAPE WOOLS SA v KPMG CORPORATE FINANCE (VIC) PTY LTD
MEDIUM NEUTRAL CITATION:	[2002] VSC 571

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practice and procedure – Discovery – Claim of legal professional privilege – Form of affidavit – Relating grounds of claim of privilege to individual documents – What is required to "state sufficiently the grounds of the privilege" – Appropriate method of describing privileged documents – Rule 29 and Form 29B of the Supreme Court Rules.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P.W. Collinson	Madgwicks
For the Fourth Defendant	Mr K.W.S. Hargrave QC and Mr A.P. Young	Phillips Fox
For the First and Third Defendants and the First, Second and Fourth Third Parties	Mr S.R. Horgan	Norton Gledhill

HIS HONOUR:

The Appeal and the Application

1. On 22 May 2002, Master Kings made an order by consent which dealt with a number of unresolved interlocutory matters in this proceeding.  Paragraphs 6 and 7 of that order were as follows:

"6.The Plaintiff file and serve by 29 May 2002 on the Fourthnamed Defendant an affidavit in which:

(a)each of the documents in respect of which the Plaintiff claims legal professional privilege is enumerated and listed individually;

(b)is set out in respect of each document referred to in sub-paragraph (a) above, all of the facts upon which the Plaintiff relies to support its claim of legal professional privilege in respect of that document.

7.The Fourthnamed Defendant file and serve by 29 May 2002 on the Plaintiff an affidavit in which:

(a)each of the documents in respect of which the Fourthnamed Defendant claims legal professional privilege is enumerated and listed individually;

(b)is set out in respect of each document referred to in sub-paragraph (a) above, all of the facts upon which the Fourthnamed Defendant relies to support its claim of legal professional privilege in respect of that document."

1. In purported compliance with that order, the plaintiff, Cape Wools SA, filed and served an affidavit of Paul Stephannus Buys sworn on 29 May 2002.  That affidavit was 216 pages long and contained a list and a description and, generally, the date of 5,302 documents, in respect of which the plaintiff had claimed privilege in the following terms:

"The documents are privileged on the grounds that they consist of:

(a)communications between the Plaintiff and/or its agents, and/or its legal advisers for the dominant purpose of obtaining and giving legal advice;  or

(b)communications between the Plaintiff and/or its agents, and/or its legal advisers or communications between those persons and third parties made for the dominant purpose of anticipated or existing litigation.  These communications include communications between the Plaintiff and/or its agents, and/or third parties made for the purpose of obtaining information to be submitted to the legal advisors for the dominant purpose of obtaining advice upon anticipated or existing litigation;  and

(c)documents brought into existence for the dominant purpose of preparing for, or for use in anticipated or existing litigation on behalf of the Plaintiff;  or

(d)'without prejudice' correspondence or records of 'without prejudice' communications, or documents protected by virtue of a without prejudice regime."

1. By a summons filed on 9 July 2002, the fourth defendant, KPMG Corporate Finance (Vic) Pty Ltd, sought an order that the plaintiff comply with the order of Master Kings.  This summons was heard on 6 August 2002 by Master Wheeler and his reserved decision was handed down on 16 August 2002.  After argument concerning the form of order, on 4 September 2002, Master Wheeler made an order that:

"The Plaintiff file and serve by 4.00 p.m. on 18 September 2002 an affidavit in which is set out in respect of each document referred to in Schedule 1 to the affidavit of Paul Stephannus Buys sworn 29 May 2002:

(i)where it is not already stated in the said Schedule 1, the author of that document;  and

(ii)all of the facts upon which the Plaintiff relies to support its claim of legal professional privilege in respect of that document."

1. By notice of appeal dated 5 September 2002, the plaintiff appealed against the order of Master Wheeler ("the appeal").  On the same day, the plaintiff issued a summons seeking leave to appeal against the relevant part of the consent order of Master Kings and the extension of the time within which to appeal from that order ("the application"). 

The Background to the Proceeding

1. It is sufficient for present purposes to give only the briefest explanation of the issues involved in this complex commercial proceeding.  Prior to 1998, the plaintiff and the Australian Wool Research and Promotion Organisation ("AWRAP") held shares in a company which owned significant intellectual property, including the Wool mark and the Woolblend mark.  The plaintiff's complaint stems from a valuation of the two marks performed by the fourth defendant.  The process leading to that valuation commenced in April 1998 when the plaintiff served on AWRAP a notice under a members agreement which in effect required it to buy the plaintiff's interest in the two marks.  On the recommendation of AWRAP, the fourth defendant was retained by the plaintiff and AWRAP in May 1998.  The valuation of the two marks, produced by the fourth defendant on 30 October 1998, was nil. 

1. On 26 November 1998, pursuant  to the members agreement, the plaintiff served a notice on AWRAP disputing the fourth defendant's valuation.  Attempts were then made to resolve the dispute arising from the fourth defendant's valuation.  On 18 February 1999, the plaintiff commenced a proceeding against AWRAP.  In April 1999, an unsuccessful mediation of the dispute was held.  However, in June 1999, the plaintiff and AWRAP entered into a settlement deed for the purpose of resolving the dispute.  Pursuant to that settlement deed, Mr Jim Eales of the accounting firm Ernst & Young was appointed to conduct a further valuation of the two marks.  To assist him in the preparation of his valuation, Mr Eales held meetings, conducted interviews and issued directions.  Between October 1999 and February 2000, the plaintiff and AWRAP both made several written submissions to Mr Eales. 

1. In October 2000, the plaintiff discovered that the fourth defendant had prepared an earlier valuation for AWRAP which had advised that the fair market value of the two marks was between nil and $11.6 million.  This led to the plaintiff commencing this proceeding on 17 October 2000 against AWRAP and other related parties ("the AWRAP parties") and the fourth defendant alleging that it had suffered loss and damage exceeding $40 million as a result of the defendants' conduct, in particular the non-disclosure that the fourth defendant had prepared an earlier valuation.  On 13 December 2000, the plaintiff and the AWRAP parties entered into another deed of settlement and release whereby AWRAP agreed to pay to the plaintiff the sum of $11,432,275 in consideration for a release by the plaintiff of its claims against the AWRAP parties. 

1. However, a contribution notice was subsequently issued by the fourth defendant against some of the AWRAP parties excluding AWRAP.  They in turn claimed against the plaintiff for an indemnity against the fourth defendant's claim pursuant to the December 2000 deed of settlement.  In its turn, the plaintiff counterclaimed against some of the AWRAP parties, seeking a variety of relief including a declaration that they were not entitled to rely on the December 2000 deed of settlement.

1. Mr Hargrave QC, who appeared with Mr Young of counsel for the fourth defendant, submitted that this was a loss of opportunity case and that the issues thus raised in the proceeding involved the state of mind of the plaintiff from time to time concerning a number of matters, such as its belief as to the value of the two marks and its knowledge of the various courses of action available to it under the members agreement.  These state of mind issues, it was said, continued right up to the plaintiff's settlement with the AWRAP parties on 13 December 2000, some two months after this proceeding commenced.

The Involvement of the AWRAP Parties

1. Although the AWRAP parties were not respondents to the appeal and the application, their counsel, Mr Horgan, sought to intervene in support of the position adopted by Mr Hargrave.  Mr Horgan submitted that the decision in this case would govern the question of any claim by the plaintiff for legal professional privilege in giving discovery to the AWRAP parties.  Mr Collinson of counsel, who appeared for the plaintiff, initially objected to Mr Horgan being heard.  However, he withdrew his opposition after Mr Horgan agreed, in response to a question from me, to be bound by the result of this case and not to seek to re-litigate the point in respect of the discovery of documents by the plaintiff to his clients.

The Plaintiff's Affidavit of Privileged Documents

1. In an affidavit sworn on 1 August 2002 by Tracey Jane Davies of Madgwicks, the solicitors for the plaintiff, it was said that of the 5,302 listed documents, 4,591 were "documents which comprise solicitors' files".  Approximately 2,343 of these were documents in the files of Madgwicks and 2,248 were documents from the files of the plaintiff's former solicitors, PriceWaterhouse Cooper, which in turn incorporated the files of other former solicitors, Gillis Delaney Brown and Dunhill Madden Butler.  Ms Davies also stated in her affidavit that of the remaining 711 documents, 606 were "correspondence emanating from or directed to or documents drafted by Cape Wool's [sic] legal representatives" concerning the events set out in paragraphs [6] to [8] above.

1. By my calculations, about two-thirds of the 5,302 documents were dated on or after 17 October 2000, which was the date of commencement of this proceeding, and just over half were dated after 13 December 2000, which was the date of the deed of settlement between the plaintiff and the AWRAP parties.

1. The plaintiff submitted that it had already incurred considerable expense in preparing the Buys affidavit.  In her affidavit sworn 1 August 2002 Ms Davies stated that:

"35.If Cape Wools were required to provide more specific particularity as to the privilege claim for each of the 5,302 documents, I estimate that professional time in the order of 20-25 days would be incurred.  Taking into account the fees of Madgwicks and Counsel who would be involved in the procedure, I consider the estimated cost would be in excess of $60,000.

36.Each of the documents would need to be reviewed for a second time.  In this regard, I would observe that many of the documents, in particular Madgwicks' file, are not in one location as they are being used for the current proceeding.

37.In any event, I am advised by Counsel that the provision of any more detail as to the supporting claim for privilege creates a risk of waiver of privilege.  In the circumstances, I believe it would oppressive [sic] for Cape Wools to provide a further Affidavit."

1. The plaintiff accepted that there was a deficiency in the Buys affidavit in that a few of the documents had no attribution of the author.  If known, the author should have been named.  If the author was not known, this fact should have been stated.  This meant that the first part of Master Wheeler's order was not subject to challenge.

1. The other error in the Buys affidavit was that it mistakenly included documents in respect of which privilege had been claimed based on them being "without prejudice" communications.  This was not necessary because Master Kings' order only related to documents in respect of which the plaintiff (and the fourth defendant) claimed legal professional privilege.  There was no dispute that any fresh affidavit of privileged documents could omit reference to the "without prejudice" communications.

The Fourth Defendant's Compliance With the Order of Master Kings

1. In order to understand some of the competing submissions, it is necessary to make some reference to the attempts by the fourth defendant to comply with that part of the order of Master Kings which applied to it.  On 29 May 2002, the fourth defendant filed its second supplementary affidavit of documents sworn on that day by Michael Adams in purported compliance with paragraph 7 of the order of Master Kings.  This affidavit clearly did not so comply.  It did not list and enumerate the documents individually but referred to its solicitor's files for a stated period and the file of its general counsel, Michael Adams.  Further, it was stated in the affidavit that "the documents are privileged for reasons apparent from their description".  That description simply stated in respect of the solicitor's files that they contained "notes, memoranda, and correspondence between the fourth defendant, its legal counsel, partners, employees and agents, and its solicitors for the dominant purpose of seeking or giving legal advice or for use in these legal proceedings" and "correspondence between the solicitors for the fourth defendant and third parties including counsel for the dominant purpose of giving legal advice or for use in these legal proceedings".  In respect of the internal file, it was stated that it contained:

"correspondence, notes and memoranda passing between Michael Adams and the fourth defendant, its partners, employees and agents, Michael Adams and the solicitors for the fourth defendant and Michael Adams and third parties, for the dominant purpose of seeking or giving legal advice or for use in these legal proceedings."

1. After the argument before Master Wheeler was completed and before he handed down his decision, the fourth defendant filed and served a third supplementary affidavit of documents sworn by Michael Adams on 13 August 2002, which constituted a fresh attempt to comply with the order of Master Kings.  This affidavit listed and enumerated each document in each file individually and stated the category of privilege for each document by reference back to one of the two paragraph numbers in which the claim for privilege had been made.  The claimed grounds of privilege were as follows:

"3.1communications between the fourth defendant, its directors (including its in house legal counsel), employees andor agents and its legal advisors (including its in-house legal counsel) for the dominant purpose of obtaining andor giving legal advice in these proceedings;

3.2documents brought into existence by the fourth defendant, its directors (including its in house legal counsel), employees and or agents and its legal advisors for the purpose of obtaining or giving legal advice and or for use in these legal proceedings."

1. In the plaintiff's Outline of Submissions prepared for the hearing of the appeal in the Practice Court on 9 September 2002, the following appeared:

"KPMG is in the absurd position of contending for a construction of the order of Master Kings which it has not followed in the format of its own affidavits of documents.  …  KPMG's second affidavit was only filed and served after the argument before Master Wheeler.  This affidavit purports to describe whether each of the privileged documents falls within the first head of legal professional privilege (communications between the client and its lawyers) and the second head of legal professional privilege (documents brought into existence for the purpose of anticipated or existing legal proceedings) but goes no further.  At the final hearing before Master Wheeler on 4 September 2002 to determine the form of the orders to be made by the Court, KPMG submitted that Cape Wools' affidavit should go further than KPMG's second affidavit."

1. Perhaps in anticipation of this criticism, on 9 September 2002, the fourth defendant filed and served yet another affidavit of Michael Adams in purported compliance with the order of Master Kings.  This fourth supplementary affidavit of documents again listed and enumerated each document individually but did so by grouping them under four separate claims of privilege which essentially were as follows:

"9.       … confidential communications between:

(a)       Phillips Fox and me, and/or,

(b)      the fourth defendant's directors and/or agents and me,

made for the dominant purpose of seeking or giving legal advice in connection with the Proceeding and/or for the conduct of the same."

"10.… communications between Phillips Fox and one or more of [identified] Counsel, made for the dominant purpose of obtaining or giving legal advice or otherwise for the conduct of the Proceeding."

11.Documents created by Phillips Fox "… for the dominant purpose of giving legal advice to the fourth defendant or otherwise for the conduct of the Proceeding."

12.… communications between Ms Harris of Harris Costs Consultants and Phillips Fox, in relation to the … application for security for costs."

The Applicable Principles

1. Rule 29.04 of the Supreme Court (General Civil Procedure) Rules 1996 ("the Supreme Court Rules") states that an affidavit of documents "for the purpose of making discovery of documents shall be in Form 29B …". Rule 29.04(d) further provides that where the party making the affidavit claims that any document in his possession is privileged from production, the affidavit shall "state sufficiently the grounds of the privilege". The relevant part of Form 29B is as follows:

"2.The documents enumerated in Part 2 of Schedule 1 are privileged, and I object to produce them.  The documents are privileged on the ground –

(a)       as to documents numbered 4 to 6, that [state the ground];

(b)      as to document numbered 7, that [state the ground]."

1. Other relevant provisions in the Supreme Court Rules are as follows.  When a party wishes to inspect a document listed in the affidavit of documents that party may serve a notice to produce requiring that the other party "produce the documents in his possession referred to in his affidavit (other than any which he objects to produce) for inspection" (r.29.09(1)).  When a document has been referred to by one party in a pleading, interrogatories or answers, affidavit or notice, the other party may by notice require production of the document (r.29.10(2)).  A claim for privilege can be made by the first party filing an affidavit in which he "states sufficiently the grounds of the privilege" (r.29.10(4)(a)).  When a party objects to produce any document for inspection the Court may order that it be produced (r.29.11(c)).  Where an application is made for an order under r.29.11 and a claim is made that the document is privileged from production the Court may inspect the document for the purpose of deciding the validity of the claim (r.29.13). 

1. In Halliday v ACN 003 075 394 Pty Ltd[1], it was held that an affidavit of documents was "defective because it failed properly to deal with documents which were the subject of a claim for privilege."[2]  The deponent of that affidavit said in paragraph 2:

"The documents enumerated in Pt 2 of Schedule 1 are privileged, and I object to produce them.  The documents are subject to legal professional privilege as appears from their description."

Part 2 of Schedule 1 read as follows:

"1.  Professional communications of a confidential character between the plaintiff and its solicitors and counsel for the purpose of obtaining or giving legal advice and assistance.  2.  Confidential communications at the instance and request and for the use of the plaintiff's solicitors between the plaintiff and its solicitors and third persons, after this action was threatened, anticipated or commenced, for the purpose of obtaining and furnishing to the plaintiff's solicitors evidence and information as to evidence which will be obtained and otherwise for the use of the plaintiff's solicitors to enable them to conduct this proceeding and advise.  3.  Documents prepared by the plaintiff's solicitors and counsel after this action was threatened, anticipated or commenced for the purpose of conducting this proceeding."[3]

[1]Unreported, Supreme Court of Victoria, Appeal Division, Ormiston, J.D. Phillips and O'Bryan JJ, 11 April 1994

[2]At p 6 per Ormiston J

[3]At p 6

1. Ormiston J, with whom the other members of the Court agreed, said in respect of the form of this affidavit:

"It is not appropriate, as has been laid down on many occasions, for a claim for privilege to be made simply in globo and by reference to three classes of documents of the kind set out.  It is, of course, not uncommon to see affidavits in this form, and often no objection is taken to them, but it is not a proper description, and one may look at works such as Atkin's Court Forms Vol.15 (1983 ed) at 117-119 to see that the appropriate method of describing privileged documents is to enumerate them, that is to list them, and then to identify the basis on which the privilege is claimed.

It is not necessary for the purpose of this judgment to go further and identify precisely how Pt 2 should have been drafted, except to indicate that, at least for Classes 1 and 2 of the documents referred to, there should have been an enumeration and listing of the relevant documents so that, if necessary, the claim to privilege might be challenged.  See generally Simpson, Bailey and Evans on Discovery and Interrogatories (2nd ed) at 44-46.  It is, of course, not required that the documents be listed in a manner which would result in the loss of the benefit of the privilege, but that does not mean that some listing should not be required."[4]

[4]At p 7

1. The decision in Halliday makes it clear, in my opinion, that the ground or grounds of the privilege have to be related to each document.  In the words of Ormiston J, as his Honour then was, "the basis on which the privilege is claimed" in respect of each document has to be "identified".  It is not sufficient, as is commonly done, and as was done by the plaintiff in this case, to state a number of grounds at the start of the affidavit, without identifying which of them apply to which document.  However, this does not mean, in my opinion, that a number of documents cannot in some way be grouped together under one or more grounds of privilege.  The form is not important so long as it is clear in respect of each document the basis or bases on which the privilege is claimed.

The Open Offer by the Plaintiff

1. During the course of the hearing before me, the plaintiff made an open offer that it would file and serve a further affidavit of privileged documents:

"(a)in which is set out in respect of each document referred to in Schedule 1 to the affidavit of Paul Stephannus Buys sworn 29 May 2002 the author of each document;

(b)in which is set out in respect of each document referred to the said Schedule 1 whether the document is the subject of a claim for legal professional privilege on the grounds that it is:

'3.1communications between the plaintiff, its directors (including its in-house legal counsel), employees and/or agents and its legal advisers (including its in-house legal counsel) for the dominant purpose of obtaining and/or giving legal advice;  or

3.2documents brought into existence by the plaintiff, its directors (including its in-house legal counsel), employees and/or agents and its legal advisers and third parties for the dominant purpose of anticipated or existing litigation.'

(c)which omits 'without prejudice' correspondence or records of 'without prejudice' communications or documents protected by virtue of a without prejudice regime."

Mr Collinson stated that this offer represented a written version of the position the plaintiff had adopted before Master Wheeler at the hearing, on 4 September 2002, concerning the form of his order.  From its unusual numbering of sub-paragraphs, it can be seen that the open offer was largely based on the format used by the fourth defendant in its third supplementary affidavit of documents.

1. When the plaintiff made its open offer, Mr Collinson indicated that this was now the plaintiff's position in respect of the appeal.  I understood by this statement that he was no longer arguing that the purpose of individually listing privileged documents was not to provide a basis for a claim for privilege to be challenged but to ensure that if the Court ordered production of any documents claimed to be privileged the documents were described with sufficient particularity that there could be no doubt as to the documents ordered to be produced.  In any event, whatever might be the position in other States[5], it seems to me that in Victoria it is clear that one of the purposes of individually listing privileged documents is "so that, if necessary, the claim to privilege might be challenged."[6]

   [5]Mr Collinson cited authorities such as Braegrove Pty Ltd v Bendeich (1993) 2 Qd R 239; Interchase Corporation Limited (In Liq) v Grosvenor Hill (Queensland) Pty Ltd (No 2) (1999) 1 Qd R 163; Lazenby v Zammit (1987) Tas R 54; and Lanzon v State Transport Authority (1985) 38 SASR 321.

   [6]Halliday at p 7 per Ormiston J

1. I also understood the plaintiff's open offer to mean that it was no longer contending that it was permissible to list separately the grounds on which privilege was claimed and all of the documents in respect of which privilege was claimed, without relating the one to the other.  In support of that submission, Mr Collinson relied on the decision of Hayne J in Farrow Mortgage Services Pty Ltd (In Liq.) v Bailey[7].  It was said that the facts of that case were similar to the facts of the present case.  In Bailey, the Master ordered the plaintiffs to file an affidavit dealing with some particular documents or classes of documents and "describing and enumerating each of the documents for which privilege is claimed and the grounds therefor (excluding documents brought into existence solely for the purpose of the conduct of this proceeding)."

   [7]Unreported, 9 August 1994

1. The affidavit filed on behalf of the plaintiffs contained the following statement:

"The plaintiffs object to producing each of the documents enumerated in the schedule hereto on the basis that the documents are privileged in that they contain or record confidential communications between the plaintiffs, their solicitors and counsel, being either instructions provided to the plaintiffs' solicitors and/or counsel for the purpose of obtaining legal advice or legal advice."

The Schedule then listed the documents, assigning a number to each and describing each by a description such as "file memo", "file note", "letter to" a named recipient, or "draft letter" to a named recipient.

1. Hayne J rejected the defendant's argument that the Master's order had not been complied with.  His Honour said:

"I leave aside for the purposes of the present debate the utility of the exercise which the defendant has had the plaintiff undertake.  It is, of course, a very expensive exercise, and one which may, at least in some cases, lead to a delay in bringing the action on for trial.  However, the order was made, and the question now is whether it has been obeyed.

The defendant contended that where a claim for privilege is made in an affidavit of documents, the documents should be properly enumerated and listed not simply referred to by class and moreover, must be 'so described as to enable the Court and the other party to gauge from the description how the documents are capable of attracting the privilege claimed.'  It is said that the description given in the schedule is 'so vague and inadequate that it is impossible for the Court and the defendant to form any meaningful view as to the sufficiency of the claim for legal professional privilege'.  Without pausing to examine the premises from which the defendant's argument proceeded, it is enough if I say that I consider that the documents have been described by Edge sufficiently to enable the Court to gauge how it is said that the documents attract the privilege that is claimed.  (cf. Halliday v ACN 003 075 394 Pty Ltd Appeal Division, unreported, 11 April 1994).  The defendant's argument appeared to assume that the schedule could be read divorced from the paragraph of the affidavit which introduces it.  However, when Edge's affidavit is read as a whole, I consider that it is clear that even if the test adopted in the defendant's argument is applied (a test which may or may not be universally apposite) that test has been satisfied."

1. There is an important distinction, in my opinion, between the facts of Bailey and the present case.  In Bailey, the form of the Master's order meant that the affidavit only listed documents in respect of which legal professional privilege was claimed on the basis of obtaining legal advice.  Thus, there was no difficulty in putting at the front of the affidavit what Mr Collinson called the "generic description" of the basis of the claim to legal professional privilege.  In this case, however, the plaintiff included in its affidavit four different "generic descriptions" of the claim of privilege, including one not being a claim to legal professional privilege, without indicating which "generic description" related to which document.

1. On behalf of the fourth defendant, Mr Hargrave rejected the open offer.  He submitted that the plaintiff was required, by the rules relating to discovery, to do what the fourth defendant had belatedly done in its fourth supplementary affidavit of documents.  That is, to group the documents in respect of which privilege was claimed into their separate categories and to explain by way of narrative the facts on which the claim for privilege was based.  Mr Hargrave did not accept that the order of Master Kings went beyond the normal requirements of discovery.  But if it did, he argued that nevertheless the plaintiff should be required to provide no more and no less than what it agreed to provide by the consent order - in respect of each document a statement setting out "all of the facts upon which the Plaintiff relies to support its claim of legal professional privilege in respect of that document".  He submitted that the wording of Master Kings' order was clear and that there was no ambiguity.  Further, Mr Hargrave submitted that there would not be compliance with the order of Master Kings if all that the plaintiff provided was an indication by means of a label or a coding system which of two general statements of the two limbs of legal professional privilege was said to be applicable to each of the documents.  (Of course, this was pretty much what was done by the fourth defendant in its third supplementary affidavit of documents.)

1. Mr Hargrave forcefully argued that the fourth defendant was entitled to a statement of the grounds of the privilege claimed in respect of, at the very least, the 1,700 or so documents brought into existence prior to the commencement of this proceeding.  He pointed out that although there was an earlier proceeding, commencing in February 1999, that settled in June 1999 and it was not until well over a year later, in October 2000, that the plaintiff discovered that the fourth defendant had prepared the earlier valuation.  He therefore queried how privilege could be claimed in respect of documents, and particularly valuations, brought into existence in the intervening 16 months.  Similarly, Mr Hargrave queried how privilege could be claimed in respect of documents, and particularly valuations, brought into existence prior to the commencement of the first proceeding in February 1999.  Mr Hargrave indicated that the fourth defendant was likely to challenge the claim to privilege in respect of most, if not all, of these pre-17 October 2000 documents.  He frankly conceded that the present dispute was an attempt to set up the proper framework upon which that argument could take place.

1. On behalf of the plaintiff, Mr Collinson submitted that the open offer overcame many of the difficulties arising from the form of the order of Master Kings.  In particular, he submitted that the offer stated an obligation on the plaintiff in positive terms so that it knew what it had to do.  Previously, he submitted, it was not clear to the parties just what they were required to do in order to comply with Master King's order.

Conclusions

1. In resolving this dispute, it is necessary, in my opinion, to decide, first of all, just what Master Kings' order required the plaintiff to provide in the affidavit of privileged documents.  In my opinion, properly understood, the order of Master Kings went no further than the normal requirements for making a claim of legal professional privilege in respect of discovered documents.  The requirement to set out in respect of each document "all of the facts" upon which the plaintiff relied in support of its claim of legal professional privilege in respect of that document, was simply a requirement that the plaintiff "state sufficiently the grounds of the privilege"[8] or "identify the basis on which the privilege is claimed."[9]  I am not prepared to construe that order as meaning that each party was required, in respect of each and every document for which privilege was claimed, to provide a detailed narrative of precisely how the claim for legal professional privilege was justified.  Mr Collinson correctly submitted, in my opinion, that such a requirement involved the risk that the plaintiff would lose the benefit of the claim for privilege.[10]

   [8]Rule 29.04(d)

   [9]Halliday at p 7 per Ormiston J

   [10]Halliday at p 7 per Ormiston J

1. The next question is whether the plaintiff's open offer satisfied the requirements of Master Kings' order.  Mr Horgan submitted that, if this approach were to be adopted, instead of the two categories of documents proposed by the plaintiff, there should be three categories, with the category of "documents brought into existence for the dominant purpose of anticipated or existing litigation" being split into two – one relating to the plaintiff and its legal advisers and the other relating to third parties and the plaintiff's legal advisers.

1. In my opinion, in the rather unusual circumstances of the history of the dispute, more categories than usual are probably required in order for the plaintiff to "state sufficiently the grounds of the privilege"[11] or to "identify the basis on which the privilege is claimed."[12]  Simply to refer to "anticipated or existing litigation", for example, is not sufficient, in my opinion, without identification of which proceeding, the February 1999 proceeding or the current proceeding, is being referred to.  Normally, there would only be the current proceeding to consider.  Further, it may be that distinctions should be drawn between each "anticipated" and "existing" proceeding because different considerations might apply to them.  It can be seen, therefore, that I do not consider that the plaintiff's open offer satisfies the requirements of either r.29.04(d) or paragraph 6(b) of the order of Master Kings, because paragraph (b) of the open offer does not contain sufficient categories identifying the various ways in which the privilege is being claimed.  As Eveleigh J said in Alfred Crompton Amusement Machines Ltd v Commissioners of Customs and Excise[13]:

'There are a variety of situations which can give rise to a claim for privilege.  Which situation is relied on must be clearly stated in relation to the particular document, or to the type or class of documents alleged to be protected."

[11]Rule 29.04(d)

[12]Halliday at p 7 per Ormiston J

[13][1971] 2 All ER 843 at 848

1. It is not for me to list all of the possible categories which may be required to be set out in the plaintiff's further affidavit of privileged documents.  Only the plaintiff's legal advisers can decide this.  However, I trust that the above discussion has provided sufficient guidance on what I consider the plaintiff is required to do in order to comply with both r.29.04(d) and paragraph 6(b) of the order of Master Kings.

1. Given my views on the similarity between the requirements of r.29.04(d) and paragraph 6(b) of the order of Master Kings, I do not propose to grant the plaintiff leave to appeal against Master Kings' consent order.

Documents post 13 December 2000

1. Although Mr Collinson said that the open offer was now the plaintiff's minimum position, he did state that it would be preferable from the plaintiff's point of view to have paragraph (b) of the open offer limited to documents prior to 13 December 2000.  He submitted that it was this period which was the real issue between the parties (see paragraph [9] above).  This submission was hardly surprising because Mr Hargrave conceded that "everything" after 13 December 2000 was "likely to be privileged" and he accepted that the order could be limited to documents brought into existence on or before 13 December 2000.

1. In the circumstances, it seems to me to be very sensible to limit the order as suggested by Mr Collinson.  This would have the effect of cutting in half the number of documents which have to be re-considered by the plaintiff's legal advisers, with a significant saving in costs.  It is true that this will mean that the plaintiff will not have identified the precise basis on which the privilege is claimed in respect of just over half of the documents in the affidavit, but I did not understand Mr Hargrave to be seriously opposing this suggested course of action.  He was prepared to accept the global claim for privilege in respect of the documents falling within this period.  After all, the fourth defendant is able to study the description of each of the post 13 December 2000 listed documents and challenge the claim of legal professional privilege in the usual way, if the description of the document raises any doubts about the validity of the claim of privilege.

1. On some occasions, the date of a document is said to be either "Undated" or "Various".  As these documents cannot be seen to have been brought into existence after 13 December 2000, in my opinion, they cannot be included in that exemption.

Orders

1. Subject to hearing from counsel as to their precise form, the orders I would propose making are that:

1.The appeal against the order of Master Wheeler made on 4 September 2002 be allowed.

2.The plaintiff file and serve by 4.00 p.m. on [date to be fixed] 2003 a further affidavit of privileged documents:

(a)in which is set out in respect of each document referred to in Schedule 1 to the affidavit of Paul Stephannus Buys sworn 29 May 2002, the author of each document;

(b)in which is set out in respect of each document referred to in the said Schedule 1, which is either dated on or before 13 December 2000 or is undated or the date of which is said to be "Various", all of the facts upon which the plaintiff relies to support its claim of legal professional privilege in respect of that document;

(c)which omits "without prejudice" correspondence or records of "without prejudice" communications or documents protected by virtue of a without prejudice regime.

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