JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CAREY -v- KORDA & WINTERBOTTOM [No 2] [2011] WASC 220
CORAM: EDELMAN J
HEARD: 26 JULY 2011
DELIVERED : 26 AUGUST 2011
FILE NO/S: COR 147 of 2010
BETWEEN: NORMAN PHILLIP CAREY
First Plaintiff
QUARTS NOMINEES PTY LTD
Second PlaintiffAND
MARK ANTHONY KORDA and DAVID JOHN WINTERBOTTOM In Their Capacity as Receivers and Managers of Huntingdale Village Pty Ltd (Receivers and Managers Appointed),Silkchime Pty Ltd (Receivers and Managers Appointed), Vannin Pty Ltd (Receivers and Managers Appointed), Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed), Paragon Apartments Ltd (Receivers and Managers Appointed), Westpoint Corporation Pty Ltd (Receivers and Managers Appointed) (in liq), Bayview Port Melbourne Ltd (Receivers and Managers Appointed) (in liq), Westpoint Managment Ltd (Receivers and Managers Appointed) (in liq)
First DefendantsPERPETUAL NOMINEES LTD and/or FOR CUSTODIAN of the ING MORTGAGE POOL for ING FUNDS MANAGEMENT LTD ABN 21 002 800 as the Responsible Entity of THE ING MORTGAGE POOL
Second Defendant
Catchwords:
Evidence - Privilege - Legal professional privilege - Receivers and managers - Whether solicitors engaged by receiver and manager are engaged to act for company - Whether sufficient basis to maintain claim for legal professional privilege over bills of costs and recharge schedules - Whether legal professional privilege waived - Whether privilege abrogated by statute
Legislation:
Corporations Act 2001 (Cth)
Legal Practice Act 2003 (WA)
Legal Profession Act 2008 (WA)
Result:
Defendants' claim to legal professional privilege upheld
Category: A
Representation:
Counsel:
First Plaintiff : Mr D Williams QC & Mr G R Dean
Second Plaintiff : Mr D Williams QC & Mr G R Dean
First Defendants : Mr J Stoljar SC, Mr M Feutrill & Mr R Johnson
Second Defendant : No appearance
Solicitors:
First Plaintiff : Metaxas & Hager
Second Plaintiff : Metaxas & Hager
First Defendants : Mallesons Stephen Jaques
Second Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Ainsworth v Wilding [1900] 2 Ch 315
Attorney General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475
AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
Boulos v Carter; Re TARBS World TV Australia Pty Ltd [2005] NSWSC 891
Brambles Holdings Ltd v Trade Practices Commission (No 3) (1981) 58 FLR 452
Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239
Bride v Freehill Hollingdale & Page (Unreported, WASC, Library No 950548, 16 October 1995, BC9502646)
Bristol & West Building Society v Mothew [1998] Ch 1
British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113
Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co‑operative Assurance Co of Australia Ltd (1931) 46 CLR 41
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501
Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44
Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (2002)…
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- Case
- [2011] WASC 220
- Decision Date
CaseChat Overview and Summary
The court examined the nature of the engagement of the solicitors by the receivers and managers and found that the receivers and managers were acting in a fiduciary capacity, rather than as agents for the companies. The court held that legal professional privilege attached to the receivers and managers as the clients, and not to the companies. The court further held that the receivers and managers had not waived the privilege by disclosing the documents to the companies, and that the privilege had not been abrogated by statute or policy. The court noted that the relevant statutory provision, s 421(2), was concerned only with financial records, and that the privilege was not necessary to compel the production of narratives of legal advice received.
The court concluded that the legal professional privilege held by the receivers and managers in relation to communications from Corrs was valid and had not been waived or abrogated. The court further held that the receivers and managers had discharged their onus of showing that the redactions they made in the bills of costs and Recharge Schedules were privileged. The court found that the privilege was a product of a balancing exercise between competing public interests, and that no further balancing was either necessary or possible.
The court ordered that the defendants produce the documents in question, subject to the redactions made by the receivers and managers, and that the receivers and managers be indemnified against any costs or damages arising from the disclosure. The court also noted that the receivers and managers were not entitled to indemnity for costs incurred in relation to the proceedings.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In the context of a provision which was more broadly worded than s 421, in Daniels Corporation International v ACCC the High Court of Australia rejected an argument that legal professional privilege had been abrogated by implication. By comparison, s 421(2) is concerned only with financial records. Receivers and other managing controllers of property are held to account under s 421(2) by the myriad of financial records which can be inspected, without the need also to abrogate legal professional privilege to compel the production of narratives of legal advice received. Section 9 defines 'financial records' to include invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers, documents of prime entry, and working papers and other documents needed to explain the methods for making up financial statements or adjustments to the financial statements. As to scrutiny of the Receivers in this particular case, I have already referred above to all the information disclosed by the Receivers in the cover sheets before the narratives in the bills of costs and in the Recharge Schedules. The Receivers have also disclosed records of receipts and payments for each bank account maintained by them as MYOB records: see affidavit of Mr Morgan dated 12 October 2010, and Carey v Korda [2]. I do not accept the submission that without abrogation of legal professional privilege, the Receivers would 'escape all scrutiny' (ts 200). Finally, to the extent to which the plaintiffs suggested that there was some general public policy that had abrogated legal professional privilege in this case, then such an argument must be rejected. Legal professional privilege is itself the product of a balancing exercise between competing public interests. No further balancing of public interests is either necessary or possible: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501, 583 (Kirby J). For these reasons, there has been no statutory abrogation of the legal professional privilege held by the Receivers, nor any abrogation for any reasons of policy. The legal professional privilege in relation to communications from Corrs is held by the Receivers. The Receivers hold that privilege on their own account, not as agents for the Companies. The Receivers have discharged their onus of showing that the redactions they made in the bills of costs and Recharge Schedules are privileged. The Receivers did not waive the privilege by disclosure of the bills of costs or Recharge Schedules to the Companies. And the legal professional privilege of the Receivers has not been impliedly abrogated by statute or for any reason of policy.