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Carbotech-Australia Pty Ltd v Yates

Carbotech-Australia Pty Ltd v Yates

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Case Copied 10 October 2008 23 min read

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CITATION: Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151

HEARING DATE(S): 10 October 2008

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 10 October 2008

DECISION: Privilege claimed by SES and ERA defendants over documents produced by Sparke Helmore and Phillips Fox lost due to fraud exception. All parties may have access

CATCHWORDS: PROCEDURE – SUBPOENAS – plaintiffs seeking access to documents produced under subpoena by former solicitors of defendants – whether question of access to subpoenaed material determined under common law, (NSW) Evidence Act 1995, or Uniform Civil Procedure Rules, r 1.9 – CLIENT LEGAL PRIVILEGE – whether documents subject to client legal privilege – where substantial volume of documents produced to Court with no evidence of authors’ purpose(s) – inspection by Court – necessity for proper evidence of purpose – whether client legal privilege lost due to communications being in furtherance of criminal or fraudulent act – whether person providing advice must know criminal or fraudulent purpose – meaning of “furtherance” of a criminal or fraudulent act – WAIVER – where some documents over which privilege is claimed were exhibited to affidavits read in proceedings – whether the defendants have waived privilege over those documents

LEGISLATION CITED: (NSW) Evidence Act 1995, ss 118, 125
(NSW) Uniform Civil Procedure Rules, r 1.9, Pt 33

CATEGORY: Procedural and other rulings

CASES CITED: A G Australia Holdings Ltd v Burton [2002] NSWSC 170; (2002) 58 NSWLR 464
Barclays Bank plc v Eustice [1995] 4 All ER 511
Butler v Board of Trade [1971] 1 Ch 680
Cassaniti v Paragalli [2006] NSWSC 160; (2006) 229 ALR 416
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49
Finers (a firm) v Miro [1991] 1 All ER 182
Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1983] RPC 1
Gamlen Chemical Co (UK) Ltd v Rochem (Court of Appeal (Civil Division), 7 December 1979, unreported (Goff LJ))
Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538
ML Ubase Holdings Co Limited v Trigem Computer Inc [2007] NSWSC 859
National Employers’ Mutual General Association v Waind & Hill [1978] 1 NSWLR 372
O'Rourke v Darbishire [1920] AC 581
R v Cox & Railton (1884) 14 QBD 153
Re Bauhaus Pyrmont Pty Limited (in liq) [2006] NSWSC 543
Ryder v Frohlich [2005] NSWSC 1342
Watson v McLernon [2000] NSWSC 306
Westpac Banking Corp v 789TEN Pty Ltd [2005] NSWCA 321; (2005) 55 ACSR 519
Zemanek v Commonwealth Bank of Australia (FCA, 2 October 1997, unreported)

TEXTS CITED: A V Ritchie et al, Ritchie's Uniform Civil Procedure NSW (2005) LexisNexis

PARTIES: Carbotech-Australia Pty Ltd (P1)
Ground Consolidation Pty Ltd (P2)
Minova International Pty Ltd (P3)
Ian Kenneth Yates (D1; XD1 in XC1; XD2 in XC2; XP1 in XC3)
Donna Yates (D2; XD2 in XC1; XD3 in XC2; XP2 in XC3)
Eligild Pty Ltd (D3; XD3 in XC1; XD4 in XC2; XP3 in XC3)
Ron Godfrey Nielsen (D4;…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWSC 1151
Decision Date: 10 October 2008

CaseChat Overview and Summary

Carbotech-Australia Pty Ltd brought an application against Yates, seeking access to documents produced under subpoena by the former solicitors of the defendants. The application was before the Supreme Court of New South Wales. The central issue was whether the access to subpoenaed material was governed by common law, the provisions of the Evidence Act 1995, or the Uniform Civil Procedure Rules, rule 1.9. Additionally, the court had to determine whether the documents in question were subject to client legal privilege. The defendants argued that the privilege applied because the documents were communications between lawyers and clients, while the plaintiffs contended that the communications were in furtherance of a criminal or fraudulent act, thereby losing the privilege.

The court considered whether the privilege was lost due to the communications being in furtherance of a criminal or fraudulent act. It examined whether the person providing the advice needed to be aware of the criminal or fraudulent purpose for the privilege to be lost. The court concluded that communications in furtherance of a criminal or fraudulent act would lose their privilege, but it was not necessary for the person providing the advice to know about the criminal or fraudulent purpose. The court also noted that "furtherance" could include indirect assistance towards the criminal or fraudulent act. Furthermore, the court examined whether the defendants had waived the privilege over some documents by exhibiting them in affidavits read in the proceedings.

The court found that the defendants had waived the privilege over the documents that were exhibited in the affidavits. Consequently, these documents were not subject to privilege. Regarding the other documents, the court held that the plaintiffs were entitled to inspect them, but the defendants could redact any material that was protected by client legal privilege, provided they provided proper evidence of the purpose of the communications. The court ordered that the plaintiffs be granted access to the subpoenaed documents, subject to the redactions as necessary.

Orders