Chan v Valmorbida Custodians Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

COMMERCIAL LIST

S CI 2017 03211

KAIRU (ERICA) CHAN & Ors (according to the attached Schedule)	Plaintiffs
v
VALMORBIDA CUSTODIANS PTY LTD (ACN 609 840 539) & Ors (according to the attached Schedule)	Defendants

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JUDGE:	Matthews AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24-25 May 2021
DATE OF RULING:	27 August 2021
CASE MAY BE CITED AS:	Chan v Valmorbida Custodians Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 527

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EQUITY – Trusts – Beneficiary application for inspection of trust documents granted in the exercise of the Court’s supervisory jurisdiction – Trustees withheld certain “excluded documents” from production on the basis of legal professional privilege and on the grounds of confidentiality – Beneficiary disputed large number of the excluded documents – Application of Evidence Act 2008 (Vic) – Trustees’ claims regarding privilege largely upheld – Privilege claims in respect of third parties analysed – Trustees’ claims regarding confidentiality upheld – Court’s inspection of documents – Evidence Act 2008 (Vic) ss 118, 119, 122, 131A – Chan v Valmorbida Custodians Pty Ltd (Ruling) [2020] VSC 590 – Schreuder v Murray [No 2] (2009) 260 ALR 139 – IOOF Holdings Ltd v Maurice Blackburn Lawyers Pty Ltd [2016] VSC 311 - Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477 - Farrow Mortgage Services v Webb (1996) 39 NSWLR 601 - Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 - Hancock v Rinehart [2015] NSWSC 646 – Deutsch v Trumble (2016) 52 VR 108.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms C H Sparke QC	Arnold Bloch Leibler
For the second, third and fourth Defendants	Mr J S Graham QC with Mr R Chaile	Lawson Hughes Peter Walsh
Iconic Food Distributions Pty Ltd and Sirena (Aust) Pty Ltd, Interested Parties	Mr P Somers, solicitor	Russell Kennedy

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

The parties and the trusts............................................................................................................. 2
The proceedings............................................................................................................................ 4
The key issues and claims in the Trustee Removal Proceeding and the Golden Fin Proceeding................................................................................................................................................ 6
The orders made on 14 September 2020.................................................................................... 8
Summary of process used by the Trustees to produce the Trust Documents and to identify the Excluded and Other Withheld Documents................................................................... 11

Consideration.................................................................................................................................... 14

The Court’s approach to considering the disputed documents........................................... 14
The Court’s inspection of disputed documents...................................................................... 15

Legal professional privilege.......................................................................................................... 16

Does the Evidence Act or the common law apply in these circumstances?....................... 17
General principles regarding legal professional privilege.................................................... 19
Statutory provisions.......................................................................................................... 19
Applicable Principles........................................................................................................ 21

When a trustee can validly withhold documents from a beneficiary on the grounds of legal professional privilege........................................................................................................ 23
The Plaintiffs’ submissions............................................................................................... 23
The Trustees’ submissions................................................................................................ 24
Consideration..................................................................................................................... 26

Waiver or loss of privilege......................................................................................................... 29
Plaintiffs’ submissions...................................................................................................... 29
Trustees’ submissions....................................................................................................... 32
Consideration..................................................................................................................... 33

Confidentiality................................................................................................................................. 35

Plaintiffs’ submissions................................................................................................................ 35
Trustees’ submissions................................................................................................................. 36
Consideration.............................................................................................................................. 39

Application to disputed documents as set out in the Hughes Schedules............................. 40

Schedules concerning documents withheld on the basis of privilege claims by the Trustees 40
Hughes Schedules 2 and 3................................................................................................ 40
LHPW invoices issued to Golden Fin regarding the Golden Fin Proceeding 42
LHPW invoices issued to Golden Fin regarding the Katsalidis Proceeding 44
LHPW invoices issued to Maradval regarding the Bendigo Bank facilities 45
LHPW invoices issued to Golden Fin regarding other proceedings............ 46
LHPW invoices issued to the Trustees regarding the Trustee Removal Proceeding................................................................................................................ 47
LHPW invoices issued to the Trustees regarding general advice................. 49
Hughes Schedule 2............................................................................................... 50

Hughes Schedule 6............................................................................................................ 50
Hughes Schedule 8............................................................................................................ 53
Hughes Schedule 9............................................................................................................ 56
Hughes Schedule 11.......................................................................................................... 58
Hughes Schedule 14.......................................................................................................... 63

Schedules concerning documents withheld on the basis of privilege claims which may be available to persons other than the Trustees................................................................. 65
Hughes Schedules 1 and 15.............................................................................................. 69
Hughes Schedule 4............................................................................................................ 70
Hughes Schedule 10.......................................................................................................... 73
Hughes Schedule 12.......................................................................................................... 74
Hughes Schedule 16.......................................................................................................... 76
Hughes Schedule 7............................................................................................................ 77

Schedules concerning documents withheld on the basis of them recording or evidencing the reasons of a Trustee for exercising a discretionary power (Reason C)...................... 78
Schedules concerning documents withheld on the basis of confidentiality...................... 79
Hughes Schedule 18 – Reason D..................................................................................... 79
Hughes Schedule 19 – Reason E...................................................................................... 80
Financial documents and reports of other entities – Sirena Group and Italian Media Group.................................................................................................... 81
Documents disclosing bank account details or financial information of other third party corporate entities....................................................................... 86
Documents disclosing bank account details, financial or personal information of other third parties................................................................................ 88
Conclusion regarding Hughes Schedule 19..................................................... 89

Hughes Schedule 20 – Reason F...................................................................................... 90

Conclusion......................................................................................................................................... 90

HER HONOUR:

Introduction

This decision concerns the Court’s ruling in respect of certain claims by the second, third and fourth defendants (collectively, the ‘Trustees’, individually, each a ‘Trustee’) to resist inspection by the Plaintiffs of certain classes of trust documents on the basis of legal professional privilege and/or confidentiality.

In support of their position, the Trustees rely on the affidavit of Lachlan Owen Stuart Hughes sworn 30 April 2021 (‘Hughes Affidavit’). Mr Hughes is a partner of the firm Lawson Hughes Peter Walsh (‘LHPW’), the solicitors for the Trustees. In opposition to the Trustees’ position, the Plaintiffs rely on the affidavit of Susanna Ford affirmed 18 May 2021 (‘Ford Affidavit’). Ms Ford is a partner of Arnold Bloch Leibler (‘ABL’), the solicitors for the Plaintiffs.

Leave was granted to appear to two interested parties, Iconic Food Distributions Pty Ltd ATF the Iconic Food Distribution Unit Trust (‘Iconic’) and Sirena (Aust) Pty Ltd ATF the Valmorbida Unit Trust No. 9 (‘Sirena’) (collectively, the companies are referred to as the ‘Sirena Group’ and the two trusts as the ‘Sirena Group Trusts’). The application for leave was not opposed. The Sirena Group relies on the affidavit of Ivan Rizio affirmed 21 May 2021 (‘Rizio Affidavit’). Mr Rizio is the company secretary of each of Iconic and Sirena.

In addition, the Trustees rely on the written outline of submissions of their Counsel dated 20 May 2021 (‘Trustees’ Outline’), and the Plaintiffs rely on the written outline of submissions of their Counsel dated 19 May 2021 (‘Plaintiffs’ Outline’). Both sets of Counsel made extensive oral submissions. Mr Somers also made oral submissions on behalf of the Interested Parties.

These materials are extensive, and it has not been necessary to refer to all of the matters raised. However, all of the abovementioned affidavits, written outlines and oral submissions have been taken into account in the preparation of these reasons.

For the reasons which follow, in general terms I have:

(a) Accepted the Trustees’ approach regarding instances where they can withhold trust documents (or parts thereof) from the Plaintiffs (despite them being beneficiaries of the trusts) on the grounds of legal professional privilege;

(b) Accepted the Trustees’ approach regarding withholding documents (or parts thereof) which were provided by third parties to the Trustees on a confidential basis and which contain confidential information; and

(c) Accepted the Trustees’ approach regarding withholding documents (or parts thereof) which would reveal the confidential, sensitive or personal information of beneficiaries and of third parties.

Where I have formed the view that particular documents or categories of documents should be produced (either in whole or redacted), I have indicated that where considering those particular categories.

Background

An explanation of the parties, the trusts, this proceeding and other proceedings between some or all of them is necessary so as to understand and analyse the basis for the privilege and confidentiality claims made by the Trustees and resisted by the Plaintiffs which is the subject matter of these reasons.

The parties and the trusts

The relevant background in respect of the parties to this proceeding and the trusts is set out in the decision of the Honourable Justice Delany in Chan v Valmorbida Custodians Pty Ltd (Ruling) (‘Chan No 1’).[1] It is convenient to adopt that summary, which is set out below:[2]
[1][2020] VSC 590.
[2]Chan No 1, [1]-[13].

Kairu (‘Erica’) Chan personally (the first plaintiff) and in her capacity as the executrix of the estate of her late husband, Adrian Valmorbida (deceased) (the second plaintiff) is the moving party in this litigation. Shortly after the death of her husband, Adrian Valmorbida, aged 57, on 4 August 2016, after a long battle with cancer, there was a falling out between Kairu Chan and her two young daughters, Xuan Valmorbida, born 6 September 2006, and Ruowei Valmorbida, born 27 August 2012, and the Valmorbida family.
In 2017 three separate proceeding were issued in this Court, including this proceeding (the ‘Trustee Removal Proceeding’).
Admarval Pty Ltd (‘Admarval’, the third plaintiff) is a company that, prior to his death, was controlled by Adrian and is now controlled by Kairu Chan. As well as holding all of the shares in Admarval, Kairu Chan is and since 26 October 2016 has been the sole director of Admarval.
From 23 May 2006 when the Admarval Trust was established until December 2016, Admarval was trustee of the Admarval Trust. The Principals (protectors) of the trust as named in the original trust deed were Adrian and his father Mariano Valmorbida. On 12 February 2016 Adrian and Mariano appointed Valmorbida Custodians Pty Ltd (‘VCPL’) as the Principal of the trust.
Adjoval Pty Ltd (‘Adjoval’, the fourth plaintiff) is trustee of the Adrian Valmorbida Family Trust (‘AVFT’). Adjoval is a company also controlled by Kairu Chan. It was added as a plaintiff to this proceeding on 24 July 2020.
VCPL (the first defendant) was incorporated on 15 December 2015, at which time Adrian and Mariano were the only directors. Each held two of the four issued shares in VCPL. On 23 September 2016 Mariano appointed Ivan Rizzo and Luisa Valmorbida, a cousin of Adrian and the niece of Mariano as additional directors of VCPL. The shares in VCPL previously held by Adrian are now held by Kairu Chan.
Golden Fin Pty Ltd (’Golden Fin’, the second defendant) is, and since 2004 has been, the trustee of the Ferval Trust. There are two ordinary shares issued in Golden Fin. One is held by Mariano, the other, by Kairu Chan. The directors of Golden Fin from 31 March 2014 were Adrian, Mariano and Luisa Valmorbida. Following the death of Adrian, Mariano and Luisa continued on and remain as the current directors.
The Ferval Trust was established on 2 May 1988. In 2004, Adrian became a joint guardian of the Trust with Mariano. Kairu Chan and her two children are Principal Beneficiaries of the Ferval Trust. Adrian was also a Principal Beneficiary of the Trust prior to his death.
Maradval Pty Ltd (‘Maradval’, the third defendant) was incorporated in December 2016. Mariano is the sole director and shareholder of that company. Shortly after Maradval was incorporated, on 7 December 2016, VCPL removed Admarval as trustee of the Admarval Trust and appointed Maradval in its place.
Mariano and Adrian are the Primary Beneficiaries named in the Admarval Trust Deed. Kairu Chan and her two daughters are Secondary Beneficiaries of that Trust. Adjoval, as trustee of AVFT, a trust in which at least one Beneficiary has a beneficial interest, is a Tertiary Beneficiary of the Admarval Trust.
Vinrose Pty Ltd (‘Vinrose’, the fourth defendant) is trustee of the Keck Trust. From 20 May 1986 until the death of Adrian on 4 August 2016, Adrian and Mariano were the directors of Vinrose. On 5 August 2016, the day after Adrian died, Mariano appointed Luisa Valmorbida as a director. The current directors of Vinrose are Mariano and Luisa.
The Keck Trust was established on 20 June 1980. The trust deed provides that the Principal Beneficiaries are the children of Mariano. On 30 June 2004 the trustee exercised its power under the trust deed to exclude Adrian’s two siblings, Nadia and Elise from the class of Principal Beneficiaries. In 2008, Mariano appointed Adrian joint guardian of the Keck Trust. Prior to Adrian’s death, the Keck Trust was jointly controlled by Adrian and Mariano. As the widow of a Principal Beneficiary, Kairu Chan is a Secondary Beneficiary of the Keck Trust.
Mariano Valmorbida (the fifth defendant) was born on 28 April 1931. In August 2016 when Adrian died, Mariano was aged 85. At his instigation, but on the application of the Kairu Chan parties, Mariano was added as a defendant to this proceeding on 24 July 2020. No relief is sought against him personally by the amended statement of claim filed pursuant to leave granted on 24 July 2020.

To summarise, then:

(a) Golden Fin is the trustee of the Ferval Trust;

(b) Maradval is the trustee of the Admarval Trust; and

(c) Vinrose is the trustee of the Keck Trust.

In these reasons, each of these trusts is referred to as the Trusts, individually, a Trust. Where ‘trust’ is used, it is used in the general sense or not in terms of a particular trust.

The proceedings

Again, I gratefully adopt the summary of the various proceedings in Chan No 1,[3] which is set out below:
[3]Chan No 1, [14]-[16].

In the Trustee Removal Proceeding, detailed orders sought by the Kairu Chan parties include:
(a) a declaration that Admarval is the Trustee of the Admarval Trust,
(b)an order that Maradval deliver up the assets of the Admarval Trust to Admarval,
(c)orders for the payment of substantial sums of money from Maradval to the estate of Adrian Valmorbida,
(d)an order that an independent trustee be appointed as trustee of the Keck Trust in substitution for Vinrose,
(e)an order that an independent person or entity be appointed as guardian of the Keck Trust in substitution for VCPL, and
(f)an order that an independent trustee be appointed as trustee of the Ferval Trust in substitution for Golden Fin.

Proceeding 01845 of 2017 is a related proceeding involving two of the same protagonists. Golden Fin is the plaintiff in that proceeding and Kairu Chan is the defendant (the Golden Fin Proceeding). The relief sought by Golden Fin in that proceeding includes:
(a)an order that Kairu Chan, in her capacity as executrix of the estate of Adrian Valmorbida, transfer to Golden Fin the title to a property at 21C Avoca Street, South Yarra, and
(b)an order that Kairu Chan transfer to Golden Fin title to the property located at 19 Avoca Street, South Yarra.

In 2017 a proceeding was issued by Mariano seeking rectification of Adrian Valmorbida’s will (the ‘Rectification Proceeding’). Not long after the hearing, the Court received a request from the parties that delivery of the reasons be delayed to enable the parties to engage in discussions to seek to resolve the disputes between them. In March 2019, after a number of unsuccessful attempts to resolve the disputes, including with the assistance of Ray Finkelstein QC as mediator, the parties requested that the Court deliver judgment in the Rectification Proceeding. The Court delivered its judgment on 5 June 2019.

In addition, there are or have been other proceedings involving all or some of the same parties, as follows:

(a) In 2016, Golden Fin issued proceeding No S CI 2016 05135 against Kyriacou Lawyers (‘Kyriacou’) seeking production of documents in respect of the properties at 19 and 21C Avoca Street South Yarra (‘Kyriacou Proceeding’). Kyriacou had previously been engaged by Adrian on behalf of Golden Fin, however after Adrian’s death LHPW was engaged by Golden Fin to act on its behalf in its own capacity and as trustee of the Ferval Trust. Orders were made for the production of documents by Kyriacou on 22 December 2016;

(b) In 2017, Golden Fin issued proceeding No S CI 2017 00764 against Kyriacou for delivery up of documents (‘Kyriacou Delivery Up Proceeding’);

(c) In 2017, Maradval issued proceeding No S CI 2017 00765 against Admarval seeking recovery of trust assets from former trustees (‘Maradval v Admarval Proceeding’);

(d) In 2017, Epaminondas Katsalidis issued proceeding No S CI 2017 1666 against Golden Fin and the second plaintiff in respect of the property at 17 Avoca Street South Yarra (‘Katsalidis Proceeding’). LHWP represented Golden Fin and ABL represented the Second Plaintiff; and

(e) There are other proceedings involving some of the same parties, however these are not presently relevant, or will be explained in response to particular issues.

The key issues and claims in the Trustee Removal Proceeding and the Golden Fin Proceeding

For the purposes of determining the matter before me, it is necessary to have some understanding of the key issues and claims in the Trustee Removal Proceedings and the Golden Fin Proceeding. Both of these proceedings are being managed together and I understand they will be tried at the same time.

A very detailed summary of the key events, issues and claims in the Trustee Removal Proceeding and the Golden Fin Proceeding is set out in Chan No 1.[4] It is not necessary for me to repeat that level of detail here. Rather, I have simply set out a high level summary of the key matters, as described in that decision.
[4]Chan No 1, [17]-[49].

One of the key areas of dispute concerns the properties at 17, 19 and 21C Avoca Street, South Yarra:

(a) Golden Fin has been the registered proprietor of 17 Avoca Street since 2007.

(b) In August 2008, Golden Fin became the registered proprietor of 21C Avoca Street, which adjoins 17 Avoca Street. In December 2014, 21C Avoca Street was transferred to Adrian. Golden Fin alleges, in the Golden Fin Proceeding, that Adrian procured the transfer without the informed consent of Mariano and for no consideration, such that the property is held on trust for Golden Fin. The Plaintiffs allege that 21C Avoca Street was distributed by Golden Fin to Adrian as a primary beneficiary of the Ferval Trust and at the same time, land in Reservoir was distributed to Mariano as a secondary beneficiary.

(c) In May 2013, Adrian and Kairu Chan as joint tenants as to 90% and Golden Fin as to 10% became registered as proprietors of 19 Avoca Street. On 17 June 2016, Golden Fin’s 10% interest in that property was transferred to Adrian and Kairu Chan. Golden Fin alleges, in the Golden Fin Proceeding, that the transfer was procured by Adrian in breach of his duties as a director of Golden Fin. Further, Golden Fin alleges that the initial registration of Adrian and Kairu Chan as to 90% was without consideration and the informed consent of Mariano, such that the whole of the property is held on trust for Golden Fin.

The Plaintiffs allege that Adrian and Mariano agreed in about 2013 to develop the Avoca Street properties by constructing five units on 17 Avoca Street (to be leased out by Golden Fin) and a house on 19 and 21C Avoca Street for Adrian and Kairu Chan and their children. They say that in order to fund the development, Admarval was to obtain bank finance, Golden Fin was to pay the expenses of the development, and Vinrose was to distribute money to Admarval so it could repay the bank finance. Bank finance was obtained, a construction contract was entered into, and work commenced on each of the properties. That work is alleged to have ceased in late 2016 at Golden Fin’s instruction.

The Plaintiffs allege that in around December 2016, by removing Admarval as trustee of the Admarval Trust and replacing it with Maradval, Mariano, Maradval and VCPL were involved in actions that caused a default in the bank facilities, which actions are alleged to have been taken in bad faith and in breach of duty by VCPL.

In the Trustee Removal Proceeding, there are claims and counterclaims between the parties regarding various financial transactions concerning the three Trusts, including:

(a) The Plaintiffs allege that following Adrian’s death, Mariano has had effective control over the affairs of the Trustees and VCPL, and that he has shown a want of proper fitness and capacity to execute the Trusts;

(b) The Trustees, VCPL and Mariano are suspicious of the administration of the Trusts by Adrian prior to his death;

(c) There are allegations regarding the treatment of loan account balances for Adrian and Mariano, and of false accounting in respect of distributions of income in each of the 2015 and 2016 financial years for the Admarval Trust;

(d) Various breaches of trust by Admarval and Golden Fin are alleged by the Plaintiffs, including by Golden Fin paying Mariano’s legal costs of the Rectification Proceeding and the legal costs of Vinrose and Admarval; and

(e) In around May 2019, the AV Children’s Trust was established, it appears by interests associated with Mariano. For the year ended 30 June 2019, the Admarval Trust distributed its profit of $5.053m as to one half to the AV Children’s Trust and as to the other half to the Mariano Valmorbida Family Trust. The Plaintiffs allege that Maradval exercised its discretion to make such distributions as trustee without acting in good faith.

The orders made on 14 September 2020

Chan No 1 concerned an application by the Plaintiffs for orders that the Trustees provide them with inspection of Trust records for each of the three Trusts (‘Trust Records Application’). That application was opposed and following the filing of affidavit evidence and submissions,[5] Delany J issued his decision in Chan No 1. By the time of the making of the Trust Records Application, discovery in both proceedings had been ordered and made.[6] As his Honour noted, the discovery orders are relevant to the Trust Records Application, which arises in the context of the unresolved disputes between the parties.[7]
[5]Chan No 1, [57].
[6]Chan No 1, [51]-[56].
[7]Chan No 1, [51].

In Chan No 1, his Honour found that while the proprietary approach (being that a beneficiary has a prima facie entitlement to inspect and copy all trust documents) was generally the correct approach to be applied, as opposed to the discretionary approach (the Court having a discretion whether or not to order inspection of trust documents, in the exercise of its supervisory jurisdiction), in the circumstances of this case the discretionary approach was applicable. His Honour then went on to consider whether an order for inspection should be made and, if so, the appropriate scope and content of that order.[8]
[8]Chan No 1, [61]-[63].

Having delivered his reasons in Chan No 1, on 14 September 2020 his Honour made orders in respect of the Trust Records Application (‘Trust Records Orders’), which included the following orders:

(a) The Trustees were to provide to ABL, for inspection by or on behalf of the Plaintiffs, copies of trust documents for each of the three Trusts for the period commencing 1 July 2013 to date, other than the Excluded Documents (‘Paragraph One’);

(b) The Trustees were to provide a list of documents or categories of documents which comprise either (‘Paragraph Two’):

(i) The excluded documents;

(ii) “such other documents as the Trustees contend ought not be made available for inspection pursuant to this order” (I shall refer to this category as ‘Other Withheld Documents’); and

(iii) Such list to include a brief description of the reason the document in question is an excluded document or “should not otherwise be required to be produced for inspection pursuant to this order”;

(c) The Plaintiffs were then to provide a schedule listing those documents, if any, referred to in Paragraph Two which they contend are not excluded documents or should otherwise be made available for inspection (‘Paragraph Three’);

(d) Any dispute as to inspection of excluded documents or Other Withheld Documents as provided in Paragraphs Two and Three was referred to an Associate Judge for determination (‘Paragraph Four’); and

(e) To the extent documents are produced for inspection pursuant to Paragraph One, it shall not be necessary for the party producing those documents to also make discovery of those documents (‘Paragraph Five’).

The Trust Records Orders defined certain terms used in the orders, including:

(a) The trusts (‘Trusts’) means the Admarval Discretionary Trust, the Keck Trust and the Ferval Trust or any of them;

(b) The Trustee means the trustee of the Trusts or any of them from time to time including the second to fourth defendants;

(c) The trust documents (‘Trust Documents’) means:

all written records that record and/or explain each transaction of the trusts, or of the Trustee of the trusts as the case may be and of the financial position and performance of the trusts as would enable true and fair financial statements of the trusts to be prepared and audited and for the purposes of this order includes:
(A)documents which evidence or consist of an explanation as to:
(i)how any amount in the accounts of the trusts, or any amount which goes to make up the amounts comprised in such accounts was ascertained;
(ii)the basis and purpose of each journal entry (including those relating to legal fees) and transaction;

including client instructions or explanations, working papers and calculations, file notes, emails (including emails such as the ‘emails from Anton’) and records of communications related to or concerning each such amount and entry;
(B)meeting minutes for each of the trusts as to decisions made about distributions;
(C)accounting records for each of the trusts, including financial statements and ledgers and primary vouchers and receipts;
(D)documents recording or evidencing professional advice given to or taken by the Trustees of trusts or any one of them concerning the administration of the trusts; and
(E)such documents or copies of such documents as described above held or in the possession or power of the third parties or any of them as defined below.

(d) The excluded documents (‘Excluded Documents’) means:

(A)any settlor’s memorandum of wishes, unless such memorandum of wishes has previously been discovered in this proceeding;
(B)any document of the trustee to which legal professional privilege or without prejudice privilege attaches being the privilege of one or more of the Trustees of the trust;
(C)documents recording or evidencing the reasons of any one or more of the Trustees for exercising a discretionary power, other than the minutes of meetings of Trustees; and
(D)documents recording or evidencing information provided to the Trustees or any one of them, in confidence by a beneficiary where such document contains confidential information.

(e) The ‘third parties’ means the servants and agents of the Trustees of the trusts or any one of them, from time to time, and includes Moran accountants, Mr Kal de Silva and Mr Freeman.

Summary of process used by the Trustees to produce the Trust Documents and to identify the Excluded and Other Withheld Documents

Mr Hughes deposes that LHPW on behalf of the Trustees collated documents for the purposes of complying with the Trust Records Orders. These were collated from various sources, including Moran Accountants (‘Morans’), the accountants for the Trustees; Grace Culvenor, the bookkeeper for the Trustees; Kal De Silva, the former bookkeeper for the Trustees; David Freeman, advisor to the Trustees, along with his company, Applebay Pty Ltd (‘Applebay’); Luisa Valmorbida (‘Luisa’), director of the Trustees; Irving Errol Lenton (‘Irving’), director of the Trustees; Mariano; and Kyriacou.[9]
[9]Hughes Affidavit, [19].

After collation of the documents, they were reviewed by LHPW staff and Excluded Documents, Other Withheld Documents, and irrelevant documents (in the sense of being outside the ambit of the Trust Records Orders, referred to as ‘Out of Scope Documents’) were identified. This was done on the basis of privilege, confidentiality or being out of scope, either as to the whole of the document or part of the document.[10]
[10]Hughes Affidavit, [21(a)(vii)].

Documents which were not Excluded Documents, Other Withheld Documents or Out of Scope Documents were compiled and produced for inspection by ABL. Over 14,000 Trust Documents were produced for inspection pursuant to the Trust Records Orders. This production occurred in a number of tranches, commencing on 9 October 2020 and concluding on 13 November 2020.[11]
[11]Hughes Affidavit, [18], [21(a)(x)]; Ford Affidavit, [8]-[9].

A list of the Excluded and Other Withheld Documents was also produced in tranches to ABL at the same time, each list incorporating and superseding the list in the previous tranche.[12] When producing the lists, a column on the list recorded the reason for each document’s exclusion by reference to a key. Those reasons for exclusion were as follows:[13]
[12]Hughes Affidavit, [22].
[13]Hughes Affidavit, [23]; Ford Affidavit, [10].

(a) Any settlor’s memorandum of wishes, unless such memorandum of wishes has previously been discovered in this proceeding (‘Reason A’);

(b) Any document of the Trustee to which legal professional privilege or without prejudice privilege attaches being the privilege of one or more Trustees of the trust (‘Reason B’);

(c) Documents recording or evidencing the reasons of any one or more of the Trustees for exercising a discretionary power, other than the minutes of meetings of Trustees (‘Reason C’);

(d) Documents recording or evidencing information provided to the Trustees or any one of them, in confidence by a beneficiary where such document contains confidential information (‘Reason D’);

(e) Documents containing confidential information of other parties or provided by other parties on a confidential basis (‘Reason E’); and/or

(f) Documents recording sensitive or private details of other parties (‘Reason F’).

In addition, the list of Excluded and Other Withheld Documents included a column indicating whether a particular document was redacted (marked R) or excluded in full (marked A), and copies of the redacted documents were provided for inspection.[14]
[14]Hughes Affidavit, [24].

Further versions of this list were subsequently provided, which contained further descriptions of the documents for Reasons C to F and for Reason B. This was all compiled and produced on 22 December 2020 (’22 December List’) along with the descriptions of the reasons, including some further categorisation of the documents (‘Key Descriptions Document’).[15] The Plaintiffs then responded to the 22 December List and the Key Descriptions Document pursuant to Paragraph Three of the Trust Records Order, on 10 March 2021 (‘Plaintiffs’ Schedule’).[16] This is how the disputed documents have been identified.
[15]Hughes Affidavit, [30]. Exhibit LOSH-5 to that affidavit contains a copy of the Key Descriptions Document.
[16]Hughes Affidavit, [30]; Ford Affidavit, [28].

Mr Hughes deposes that in the course of preparing his affidavit and reviewing unredacted versions of documents for this purpose, he has identified some documents which on reflection he considers not to be Trust Documents within the definition in the Trust Records Orders. These were identified in the Hughes Affidavit.[17]
[17]Hughes Affidavit, [32].

In her affidavit, Ms Ford deposes to and exhibits the significant correspondence between ABL and LHPW between 16 October 2020 and 10 March 2021, primarily regarding the Excluded Documents and Other Withheld Documents, particularly in respect of legal professional privilege and confidentiality.[18] The parties’ respective positions are set out in some detail in that correspondence and summarised in the Ford Affidavit. Other than noting this, I do not set it out further as many of the issues were raised in the parties’ submissions before me, and to do so here would be unnecessarily repetitive.
[18]Ford Affidavit, [11]-[28].

Consideration
The Court’s approach to considering the disputed documents

By the time the matter came on for hearing in respect of the disputed documents, the position of the parties had been narrowed somewhat in that some documents or categories were no longer challenged by the Plaintiffs or sought to be excluded by the Trustees. These reasons deal only with those documents remaining in dispute.

The disputed documents were divided into categories and the document numbers for the disputed Excluded Documents and Other Withheld Documents for each category were listed in separate schedules to the Hughes Affidavit (‘Hughes Schedules’).

It is convenient to consider the matters raised in respect of the disputed documents by considering each issue separately, setting out the parties’ submissions and evidence on a particular issue and my analysis of that issue.

The issues can conveniently be separated as follows:

(a) Legal professional privilege

(iv) Whether the Evidence Act 2008 (Vic) (‘Evidence Act’) or the common law applies to considerations regarding legal professional privilege in these circumstances;

(v) General principles regarding legal professional privilege;

(vi) The circumstances in which a trustee may validly withhold documents from a beneficiary on the grounds of privilege; and

(vii) Waiver or loss of privilege.

(b) Confidentiality

(i) Confidential information of beneficiaries; and

(ii) Confidential information of third parties and/or information provided to the Trustees on a confidential basis by third parties.

After considering these issues, it is then necessary, by reference to them where appropriate, to deal with the documents/categories of documents which remain in dispute by considering each of the Hughes Schedules. The Hughes Schedules correspond either with the privilege issue or the confidentiality issue, and so I will deal with them in a grouped way.

The Court’s inspection of disputed documents

It was common ground that the Court has the power to inspect documents when determining disputes in respect of legal professional privilege and that whether or not to do so is an exercise of the Court’s discretion. It was also common ground between the parties that I should inspect the documents if I considered it necessary or appropriate to do so. Indeed, on a number of occasions the parties urged me to inspect the documents for myself.

The Trustees have provided me with copies of all of the disputed documents. Where documents have been produced to the Plaintiffs in redacted form, the Trustees have provided me with both the redacted and unredacted versions.

The Trustees have also provided me with a list of documents, being a sub-set of documents from the relevant Hughes Schedules, which they propose be used by me if I decide to inspect the documents by taking a sample of documents (‘Proposed Sample List’). Counsel for the Trustees informed me that the Proposed Sample List had been compiled using the following approach:[19]
[19]Transcript, 25 May 2021, 177.7 – 179.7.

(a) Where the particular Hughes Schedule contains only a small number of documents, they have included all of them (excepting any duplicates);

(b) Where the particular Hughes Schedule contains a large number of documents or a number that they consider excessive for review, they have listed a sample of them;

(c) The sampling is based on what they consider to be a fair spread; and

(d) Where a particular document has been referred to by the Plaintiffs, that has been included in the sample.

I have not adopted the sampling approach or followed the Proposed Sample List. I have inspected documents specifically referred to by the parties, and I have also inspected documents where I have considered it necessary to do so. In respect of the latter, those instances and my reasons for doing so are indicated where discussing the particular categories of documents. I have come to the view that if satisfied on the affidavit evidence that the category of documents is able to be withheld by the Trustees or is to be produced by the Trustees, then it is not necessary for me to inspect some of the documents in that category by way of sampling (whether using the Proposed Sample List or not) in order to verify the evidence or classification.

Legal professional privilege

The Trustees have excluded documents from production which they consider to be the subject of claims to legal professional privilege. Broadly speaking, these are either privilege claims belonging to one or more of the Trustees, or privilege claims belonging to someone else. Where the privilege claims are the latter, they are the subject of separate Hughes Schedules and I will deal with them separately.

Does the Evidence Act or the common law apply in these circumstances?

A threshold issue arises as to whether the Evidence Act or the common law applies here.

The Trustees contend that the Evidence Act applies on the basis that the Trust Records Orders is an order requiring the disclosure of documents and thus fall within the ambit of s 131A of the Evidence Act.[20]
[20]Relying on Krok v Szaintop (No 1) [2011] VSC 16 (‘Krok’).

Section 131A of the Evidence Act deals with the application of Part 3.10, dealing with privileges (including client legal privilege) to preliminary proceedings of courts. That section provides as follows:

(1) If—
(a) a person is required by a disclosure requirement to give information, or to produce a document, which would result in the disclosure of a communication, a document or its contents or other information of a kind referred to in Division 1, 1C or 3; and
(b)the person objects to giving that information or providing that document—

the court must determine the objection by applying the provisions of this Part (other than sections 123 and 128) with any necessary modifications as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence.
(2)In this section, disclosure requirement means a process or order of a court that requires the disclosure of information or a document and includes the following—
(a)a summons or subpoena to produce documents or give evidence;

(b)       pre-trial discovery;
(c)       non-party discovery;
(d)      interrogatories;
(e)       a notice to produce;
(f)a request to produce a document under Division 1 of Part 4.6;

(g) a search warrant.

The Trustees point to the nature of the Trust Records Orders, in that those orders were made by his Honour applying the discretionary approach in the Court’s supervisory jurisdiction rather than by applying the proprietary approach which his Honour had held was not applicable in these circumstances. The Trustees say that an exercise of the discretion in the Court’s supervisory discretion is what brings the Trust Records Orders within the definition of disclosure requirement contained in s 131A(2) of the Evidence Act.

The Plaintiffs submitted that the Evidence Act does not apply in these circumstances, as it applies to evidence in proceedings in Victorian courts, and that the obligation of trustees to produce documents to beneficiaries does not really dovetail into a proceeding. The Plaintiffs say that unless the circumstances give rise to a proceeding under the Evidence Act, then that Act does not apply and the common law applies. Counsel for the Plaintiffs referred to Sarto v Sarto[21] in this regard, in which Derham AsJ considered whether the Evidence Act or the common law applied to whether the reference in particulars to a pleading to a ‘without prejudice’ document should be struck out.
[21][2021] VSC 295, [31].

Counsel for the Plaintiffs submitted that at the end of the day, the analysis of the issues was the same and that no practical difference arises, except in that common or joint privilege may be different at common law than under the Evidence Act.

Counsel for both parties indicated that they had been unable to locate any cases dealing with the application of the Evidence Act to circumstances such as these.

In my view, the Evidence Act applies in the circumstances of this case, as:[22]
[22]I note here for completeness that to the extent that the objection to production is taken by a third party (eg Mariano) and not the Trustees, then the common law applies and not the Evidence Act, as s 131A only applies where it is the person obliged to produce the document who objects to its production: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 8) [2018] VSC 193, [42]. Nonetheless, the analysis in respect of those documents is likely to be the same.

(a) Production of documents by the Trustees is being made (or resisted) in the context of orders having been made by the Court, and so prima facie falls within the definition of ‘disclosure requirement’;

(b) The Trust Records Orders were made in this proceeding, rather than a separate proceeding in which the only relief sought was the production of documents by a trustee to a beneficiary. However I must say that on its own, I do not regard this factor as determinative or of significant weight; and

(c) Importantly, regard must be paid to Paragraph Five of the Trust Records Orders, where it is stated that to the extent documents are produced pursuant to Paragraph One (that is, by the Trustees producing for inspection copies of Trust Documents), it shall not be necessary for the party producing them to also make discovery of them. Undoubtedly, discovery of those documents would be governed by the Evidence Act. It would be inefficient and confusing for documents produced pursuant to Paragraph One to be treated differentially according to whether they are also discoverable. It seems to me highly likely that some documents produced pursuant to Paragraph One are unlikely to also be discoverable, and the assessment of them as to privilege has already been carried out by the Trustees, presumably by applying the Evidence Act.

General principles regarding legal professional privilege
Statutory provisions

Section 118 of the Evidence Act deals with legal advice privilege, providing as follows:

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 made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c)the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person—

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

Section 119 of the Evidence Act deals with litigation privilege, providing as follows:

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.

Section 122 of the Evidence Act relevantly provides as follows:

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.
(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.
(3) Without limiting subsection (2), a client or party is taken to have so acted if—
(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or
(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4) The reference in subsection (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.
(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because—
(a) the substance of the evidence has been disclosed—
(i)in the course of making a confidential communication or preparing a confidential document; or

(ii) as a result of duress or deception; or
(iii) under compulsion of law; or
(iv)if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or

(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or
(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

Applicable Principles

The principles in respect of client legal privilege[23] are well established and there is little utility setting out a fulsome discussion of them here, unless that is necessary to deal with the parties’ submissions. Generally speaking, the parties did not appear to differ on the general principles regarding privilege.
[23]The Evidence Act refers to it as ‘client legal privilege’ whereas it is usually referred to in common law cases as ‘legal professional privilege’. Nothing turns on this distinction and the terms are used interchangeably in these reasons.

The common law principles inform the content and application of ss 118 and 119.[24] In the context of applying the Evidence Act, in IOOF Holdings Ltd v Maurice Blackburn Lawyers Pty Ltd,[25] Elliott J stated that the principles applicable to privilege “are not controversial” and summarised them as follows:[26]
[24]Samenic Ltd v APM Group (Australia) Pty Ltd [2011] VSC 194, [19].
[25][2016] VSC 311 (‘IOOF v Maurice Blackburn’).
[26]IOOF v Maurice Blackburn, [47], citations omitted.

(1)The party claiming the privilege bears the onus. That onus will only be discharged if the party establishes facts from which the court may determine that the privilege is being properly claimed.
(2)“Purpose” in “dominant purpose” means the purpose which led to the creation of the document or the making of the communication.
(3)The “dominant purpose” is the purpose which was the ruling, prevailing or most influential purpose at the time the document was brought into existence.
(4)There can be only 1 dominant purpose. If there are 2 purposes of equal weight, neither fits the description of a “dominant purpose”.
(5)If a dominant purpose existed, that dominant purpose must be determined objectively, having regard to the evidence, the nature of the document and the parties’ submissions. That said, evidence of the subjective purpose of the person making the communication or creating the document is relevant.
(6)Ordinarily, the relevant purpose is that of the person who brings into existence the document which includes the privileged communication, but this will not always be the case.
(7)As the test is directed towards the purpose of bringing the document into existence, a copy of a non-privileged document may be privileged.
(8)The material relied upon by the person claiming privilege must be focused and specific. Formulaic and bare conclusory assertions are not sufficient.
(9)With respect to advice privilege, in considering whether a communication is for the purposes of legal advice, the purposes must be construed broadly. Although it does not extend to pure commercial advice, legal advice, in this context, includes any advice as to what should prudently and sensibly be done in the particular legal circumstances in which the client finds itself.
(10)Further to subparagraph (9), a document created by a lawyer that records her or his legal work carried out for the benefit of the client, such as a research memorandum, a summary of documents or a chronology, will be protected by privilege whether or not the document is provided to the client. Similarly, notes and other material created by the client that relate to the legal advice sought (whether or not actually communicated to the lawyer), or that relate to communications with the lawyer, may be privileged where such documents meet the relevant “dominant purpose” test.
(11)With respect to litigation privilege, for a proceeding to be “anticipated or pending” for the purposes of s 119, there must be more than a mere possibility of litigation. As a general rule, there must be a real prospect of litigation, but it does not have to be more likely than not.
(12)Many claims for privilege may be determined by the court without the need to inspect the documents. Further, ordinarily, the court will not examine the documents if the party claiming privilege has not established a basis for the claim in an affidavit in support. However, in an appropriate case, the court may examine the documents to make a decision about privilege, particularly where the parties agree to this course.
(13)A law firm or a company may be a “client” if it engages or employs its own employee lawyer, but privilege will only attach to the relevant communication or document if the employee is consulted confidentially in her or his professional capacity, with the requisite degree of independence, in relation to a professional matter.

His Honour also stated that:[27]
[27]IOOF v Maurice Blackburn, [48], citations omitted.

With respect to waiver of privilege, and s 122(2) of the Evidence Act, a person may be taken as acting inconsistently with maintaining privilege by reason of the following:
(1)Partial disclosure of communications or documents, while claiming privilege over the remainder.
(2)A party making an assertion as part of its case that puts privileged communications or the contents of privileged documents in issue, or necessarily lays them open to scrutiny.

Further, a waiver of advice privilege extends to the documents and information which were taken into account in formulating, or which otherwise underpinned or influenced, the legal advice no longer the subject of privilege.

When a trustee can validly withhold documents from a beneficiary on the grounds of legal professional privilege

The Plaintiffs submitted, and the Trustees acknowledged, that specific principles apply to the circumstances in which a trustee can validly withhold documents from a beneficiary on the grounds of legal professional privilege.

The Plaintiffs’ submissions

The Plaintiffs submit that the usual position in relation to communications between lawyers for a trust, and the trustee is set out at Lewin on Trusts:[28]

Normally the court’s discretion under the supervisory jurisdiction will be exercised to order disclosure of cases submitted to, and opinions of, counsel taken by the trustees, and other instructions to and legal advice obtained from the trustees’ lawyers, for the guidance of the trustees in the discharge of their functions as trustees, and paid for from the trust fund. Even though such advice is privileged, the privilege is held for the benefit of the beneficiaries, not for the personal benefit of the trustees, and so privilege is no answer to the beneficiary’s demand for disclosure. A beneficiary should, of course, seek disclosure from the trustee, or, if necessary, in proceedings to which the trustee is a party, and not directly from the lawyer who gave the advice since the lawyer is bound by privilege and is in no position to waive it at the instance of a beneficiary.

[28]Lynton Tucker et al, Lewin on Trusts (Sweet & Maxwell, 20^th ed, 2020) 21-059 (citations removed) (‘Lewin on Trusts’).

The Plaintiffs submit that this principle extends to advice obtained from the trustees’ solicitors or counsel as to the manner in which they are in law entitled to exercise their powers or discretions,[29] noting that it excludes advice which may reveal the reasons for exercising discretion.
[29]Referring to Re Londonderry’s Settlement [1965] Ch. 918 at 940.

The Plaintiffs say that this principle was applied in Murray v Schreuder[30] to order production of any advice provided by, and invoices sent by, the solicitors to the executor of an estate, and that the Trust Records Orders include, in the definition of Trust Documents, documents ‘recording or evidencing professional advice’ about the administration of the Trusts.
[30][2009] WASC 51.

The Trustees’ submissions

The Trustees’ submissions are set out in paragraphs 61 to 64 below.

Ordinarily, a trustee is precluded from maintaining a claim of legal professional privilege against a beneficiary in two circumstances: first, where the confidential communications, information or documents relate to legal services in connection with the management or administration of the trust and, second, where the trustee (in his or her capacity as trustee) and the beneficiary (in his or her capacity as a beneficiary, and either alone or as a member of a class of beneficiaries) have a joint interest in the subject matter of those confidential communications, information or documents when they occur or come into existence.[31] A beneficiary will not, however, be entitled to production of a privileged communication if the communications, information or documents relate to legal services obtained for the benefit of the trustee personally or in legal proceedings commenced by a beneficiary against a trustee — for example, if the trustee seeks legal advice as to his or her personal rights or liabilities in connection with an alleged breach of trust or threatened legal proceedings against him or her personally.[32] I shall refer to circumstances where a beneficiary is not entitled to production of privileged documents as the ‘Trustee’s Withholding Rights’.
[31]Schreuder v Murray [No 2] (2009) 260 ALR 139 at 160-161 [94] (Buss JA, McLure JA agreeing), at 142 [10] (Pullin JA) (‘Schreuder v Murray’). See, also Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477, [17]-[20] (Macaulay J) (‘Dura’); Tabcorp Holdings Ltd v Victoria [2013] VSC 302, [119]-[120] (Sifris J); Krok (Judd J).
[32]Schreuder v Murray, 160-161 [94] (Buss JA, McLure JA agreeing).

As to documents recording confidential communications which were obtained by the trustee in anticipation or in the course of defending proceedings commenced by a beneficiary (which would be the subject of litigation privilege, if not advice privilege), the position was expressed by Brereton J in Hancock v Rinehart in the following terms:[33]

There are some exceptions. Documents relating to the trustees’ defence of proceedings brought against them by the beneficiaries will, at least ordinarily, be documents of the trustees personally, not trust documents. And at least in the absence of an action impugning their good faith, trustees may be permitted to withhold documents which evidence their confidential communications and considerations, as they are not obliged to disclose their reasons … (citations omitted)

[33]Hancock v Rinehart [2015] NSWSC 646, [360] (Brereton J).

Thus, a trustee may maintain a claim of legal professional privilege against the beneficiary when the privilege attaches to confidential communications obtained by the trustee for his or her personal benefit and not in relation to the administration of the trust generally, including where such communication arise in the course of defending anticipated proceedings commenced by the beneficiary against the trustee. The position is expressed in Lewin on Trusts,[34] in a passage cited with approval by Bergin CJ in Eq in Gray v BNY Trust Co of Australia Ltd, in the following terms:[35]
[34]Lynton Tucker et al, Lewin on Trusts (Sweet & Maxwell, 18^th ed, 2008) 23-49, (citations omitted).
[35](2009) 76 NSWLR 586, 596-597 (‘Gray’).

Legal advice and communications with lawyers in breach of trust actions
Trustees who are sued for breach of trust or other relief in contentious trust proceedings are not liable to disclose legal advice obtained and paid for by them for the purpose of their defence. They may assert privilege for such advice in the normal way and beneficiaries’ rights to disclosure under trust law make no difference. Similar considerations apply to communications with their lawyers for the purpose of their defence after commencement of proceedings, and in our view communications with their lawyers (paid for by themselves) before the commencement of proceedings in relation to their liability for breach of trust, though not to communications before commencement of proceedings in relation to the trust property.

Although this passage from Lewin on Trusts may be taken to suggest that, in the UK at least, a condition of any successful claim of privilege by a trustee is that the trustee has paid for the relevant legal advice itself, that is not the case in Australia. For example, no such condition was required in Schreuder v Murray, and in Gray Bergin CJ in Eq eschewed the suggestion that, in order to successfully claim privilege, a trustee must have paid for the relevant legal advice or services.[36] It is now settled that the “exceptions to the prima facie position that advice charged to the trust cannot be withheld include where the communication was made not for the trustee’s guidance in administration of the trust, but to enable him or her to resist litigation by a beneficiary.”[37] Accordingly, whether the Trustees paid for legal advice or legal work is not determinative of the Trustees’ claims of privilege.
[36]Gray, 601.
[37]Hancock v Rinehart (Trust documents) [2018] NSWSC 1684 at [60] (Brereton J). See, also Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477 at [20] (Macaulay J).

The Trustees submit the key focus is on whether the trustee and beneficiary have a joint interest in the advice, taking into account the nature of the relationship between them at the time (dealt with in more detail below).[38] In Dura, Macaulay J referred to Yunghanns v Elfic Pty Ltd (No 2),[39] where Warren J (as her Honour then was) cited with approval the following statement from Phipson on Evidence:[40]

But where the communications relate to matters outside the joint interest, they are privileged even as against a person bearing the expense of the communications — eg communications between … a trustee and his solicitor as against the cestui que trust, where the communication is not made for the former’s guidance in the trust, but to enable him to resist litigation by the latter; or where it concerns his character, not as trustee, but as mortgagee of the client.[41]
[38]Relying on Dura, [15]-[20].
[39](2000) 1 VR 92.
[40]Sidney Phipson, Phipson on Evidence (Sweet and Maxwell, 14^th ed, 1990).
[41]Yunghanns v Elfic Pty Ltd (No 2) (2000) 1 VR 92, 102-103 [35].

Consideration

The Plaintiffs’ Outline deals with the ordinary situation regarding privilege as between trustee and beneficiary, but does not deal with the exception to that, being the one identified by the Trustees in paragraph 61 above. Hence the situation is rather more nuanced and complex than a reading of the Plaintiffs’ Outline would suggest.

It is clear that the exception referred to in paragraph 61 above is well recognised by the law.

I prefer the summary of the relevant law as set out in paragraph 61 above.

Further, it is noted that the passage from Hancock v Rinehart cited in paragraph 62 above and that from Lewin on Trusts cited in paragraph 63 above refer to actions where the trustee is defending an action brought by a beneficiary. In the instant case, we have an action brought by the Plaintiffs against the Trustees in the Trustee Removal Proceeding, such that the Trustees are defending a proceeding brought against them by beneficiaries, however, we also have an action in which one of the Trustees is bringing an action against Kairu Chan, being the Golden Fin Proceeding, such that in that action a Trustee has commenced proceedings against one of the beneficiaries. What, then, is the situation where a trustee is the plaintiff?

The Trustees submit that issues in the Golden Fin Proceeding are also issues in the Trustee Removal Proceeding. They also say that they do not understand the principle regarding privilege in the context of trustee and beneficiary to take issue with whether the trustee is a plaintiff or a defendant. What matters, say the Trustees, is the contest/dispute between the trustee and the beneficiaries. They contend that if a beneficiary could have recourse to trust documents when in litigation against the trustee, that would offend the trustee’s rights in respect of legal professional privilege.

As the Plaintiffs stated during oral submissions, the key question is whether the legal advice or services were obtained for the purposes of the Trusts or for the Trustees personally. The Plaintiffs acknowledged that a common application of the exception to a beneficiary’s access to privileged documents is where there are hostile proceedings between trustee and beneficiary. However, they say that it is not the case that any hostile litigation between them attracts privilege; rather, only hostile litigation by a beneficiary against the trustee personally, for example for breach of trust, falls within the exception. The Plaintiffs say that for the Trustees to resist disclosure, they have to establish that the purpose of the privileged communication was in the nature of the Trustees acting personally.

Generally speaking, I accept the Trustees’ submissions in this regard. It does not matter whether the Trustees (or one of them) commenced the litigation or they are defending litigation brought against them by beneficiaries. The key point is that there is litigation between them, and where that litigation involves the Trustees personally, the Trustees are, subject to any specific matters to be considered below, entitled to resist disclosure of certain Trust Documents on the grounds of legal professional privilege.

I also accept the Trustees’ submission that the key focus is on whether the trustee and beneficiary have a joint interest in the advice and the nature of the relationship between them at the time (dealt with in more detail below).

Mr Hughes deposes that LHPW was retained on 8 June 2017 to issue the Golden Fin Proceeding and on 29 August 2017 to defend the Trustee Removal Proceeding and that the terms of LHPW’s retainers are set out in letters of engagement bearing those dates.[42] He says that the work performed by LHPW pursuant to those engagement letters has involved providing the Trustees with professional legal services in relation to all aspects of the litigation, including ancillary disputes and issues arising throughout the course of the proceedings.[43]
[42]Hughes Affidavit, [33]-[34].
[43]Hughes Affidavit, [35].

Mr Hughes also says that for the period between the commencement of LHPW’s engagement to 14 October 2019, being the date Irving was appointed as a director of Golden Fin and Vinrose, LHPW corresponded with Luisa and Mariano in their capacity as directors of the Trustees, in order to obtain instructions on behalf of the Trustees in relation to work being undertaken pursuant to the engagement letters. For the period after 14 October 2019, LHPW corresponds with Luisa and Irving in their capacity as directors of the Trustees to obtain instructions, sometimes obtaining instructions from Mr Freeman in respect of particular matters at the request of Luisa and/or Irving.[44]
[44]Hughes Affidavit, [36].

Mr Hughes deposes that Mr Senathirajah QC and Mr Graham QC have been engaged by LHPW to provide specialist legal advice and advocacy to the Trustees in their joint defence of the Trustee Removal Proceeding and to provide specialist legal advice and advocacy to Golden Fin in the commencement and continuation of the Golden Fin Proceeding.[45]
[45]Hughes Affidavit, [47].

It is self-evident that the relationship between LHPW and the Trustees (along with those who communicate on their behalf) is that of solicitor and client and is therefore, subject to the general principles set out in the previous section, one where communications between them are protected by legal professional privilege. The same applies in respect of the Trustees and Counsel.

Specific issues as to whether the Trustees obtained legal advice or services which are the subject of the Excluded Documents in their personal capacity, in other words, whether these fall within the Trustees’ Withholding Rights, will be dealt with in the discussion of the Hughes Schedules.

Waiver or loss of privilege
Plaintiffs’ submissions

The Plaintiffs submit that even if there is a basis for the Trustees to assert privilege, the Trustees have waived it, such that they cannot now resist disclosure to the Plaintiffs.

The Plaintiffs recognise that the touchstone of waiver of privilege is the inconsistency between the client’s conduct and the maintenance of privilege, which is the common law test propounded in Mann v Carnell.[46]
[46](1999) 201 CLR 1.

The Plaintiffs submit that:

(a) The facts demonstrate that the bulk of the documents over which privilege is claimed have not been held confidentially by each Trustee as ‘a client’, but shared with people who are agents of all of the Trustees, Mariano and entities who are not parties to the litigation. All of the disclosures have been voluntary. There is no evidence that documents have been shared for limited or confidential purposes.

(b) It is evident from the production pursuant to the Trust Records Orders so far that Trust Documents have not been kept separately in relation to each of the trusts. There is no evidence that the documents for which privilege is claimed have been managed or kept solely for the Trust to which it pertains.

(c) It appears that Grace Culvenor is the bookkeeper for, and that Morans are the accountants for what is described as ‘the Valmorbida group’.[47] The ‘Valmorbida group’ also appears to include entities who are not parties to the proceeding.[48] Mr Freeman’s company Applebay was apparently engaged by Golden Fin to provide services both to Mariano and ‘the Valmorbida Group.’[49] It is said that Freeman is the conduit for instructions.[50] No distinction is made in the Hughes Affidavit between instructions given for one entity as distinct from another.

[47]Hughes Affidavit, [42(a)].

[48]Ford Affidavit, [57].

[49]See Applebay letter dated 25 September 2016, being Exhibit SMF-45 tabs 32 and 33 to the Ford Affidavit.

[50]Hughes Affidavit, [42(a)].

From these matters, the Plaintiffs submit that it appears that documents of the Trusts are shared with third parties, being Ms Culvenor, Morans and Mr Freeman, without any cloak of confidentiality. None of them is a confidential agent of any one of the Trusts, but an agent for all of them (and others).

The Plaintiffs do not accept that the Trusts, and their Trustees, or the entities in the Valmorbida Group have a common interest which would justify them being treated as having a common interest privilege. In this regard, the Plaintiffs submit that:

(a) Trustees have a duty to keep their trust documents discrete and separate.[51] At this point, I would interpose to say that I do not regard the statement contained in the footnote to either support this contention or to be apposite to the situation at hand: we do not have one trustee who is trustee of a number of trusts, but each Trustee is a trustee of one Trust;
[51]Ford on Trusts, [9.4010]: a trustee of more than one trust must keep the accounts of each trust separate and the trustees’ duties relative to one trust should be discharged without regard to their duties relative to any other.

(b) Trusts are stand-alone entities which do not, and cannot, be considered as a group;[52]
[52]ASC v AS Nominees (1995) 62 FCR 504, 514.

(c) The separateness of the entities is demonstrated by the Ford Affidavit. The three Trusts each have their own trust deeds[53] and set of beneficiaries[54] (neither of which is identical to those of either of the other two Trusts). They have separate assets. They each have mutual debts or credits or both, some of which are the subject of allegations in the proceeding. They do not have a ‘common interest’ in the proceeding;
[53]Hughes Affidavit, exhibits LOSH-2, 3 and 4.
[54]Ford Affidavit, [33]-[38].

(d) The Trustees have engaged the one lawyer, but the question is whether it is a common legal enterprise. They have different interests in the outcome of the proceeding. Their interests in the litigation are different than, for example, two co-tenants, or two partners, who join to initiate or to defend proceedings in relation to the subject property or the partnership.[55] There must be an ‘identity of interests’ and if parties have interests which are ‘selfish and potentially adverse’ there is not an identity of interest;[56]

(e) Mariano has, since 28 August 2020 been separately represented. That of itself demonstrates the lack of common interest between him and the Trustees; and

(f) By being put into the shared possession of the other Trustees (or their agent or agents), any document to which a particular Trustee might have had a claim of privilege has lost the necessary quality of confidentiality for privilege to be maintained and any privilege has thus been waived.

[55]Odgers, Uniform Evidence Law (13^th edition), EA.122.360.

[56]Farrow Mortgage Services v Webb (1996) 39 NSWLR 601, 612 (‘Farrow v Webb’).

Trustees’ submissions

The Trustees rely on the application of s 122 of the Evidence Act in respect of the Plaintiffs’ submissions regarding waiver. They say that s 122(2) states that neither s 118 nor s 119 prevents the adducing of evidence in circumstances where “the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence”. Section 122(3) provides that a client or party is taken to have acted in the way to which s 122(2) refers if the “client or party knowingly and voluntarily disclosed the substance of the evidence to another person” or “the substance of the evidence has been disclosed with the express or implied consent of the client or party”. Section 122(2) is expressed to be subject to s 122(5), whereby a client or party is not taken to have acted in a “manner inconsistent” merely because inter alia: the substance of the evidence has been disclosed in the course of making a confidential communication or preparing a confidential document (s 122(5)(a)(i)); of a disclosure which concerns a matter in relation to which the same lawyer is providing professional legal services to both the client and the other person to whom the disclosure is made (s 122(5)(b)); or of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding (s 122(5)(c)).

The Trustees submit that waiver under s 122(2) of the Evidence Act does not operate where the disclosure is among parties who have a common interest in the maintenance of the privilege. Parties have the requisite common interest when they have a common interest in the outcome of litigation. The fact that parties engage and retain the same firm of solicitors is a strong factor in establishing the existence of a common interest. As explained in Farrow v Webb:[57]

Two or more persons may join in communicating with a legal adviser for the purpose of retaining his or her services or obtaining his or her advice. The privilege which protects these communications from disclosure belongs to all the persons who joined in seeking the service or obtaining the advice. The privilege is a joint privilege. So is it also if one of a group of persons in a formal legal relationship communicates with a legal adviser about a matter in which the members of the group share an interest. Communications by one partner about the affairs of the partnership or a trustee about the affairs of the trust are examples. Implicit in the relationship is the duty or obligation to disclose to other parties thereto the content of the communication. Accordingly no privilege attaches to such communications as against others who, with the client, share an interest in the subject matter of communication.

[57]Farrow v Webb, 608 (Sheller JA).

The Trustees also rely on Buttes Gas and Oil Co v Hammer (No 3), where Lord Denning explained:[58]

… It often happens in litigation that a plaintiff or defendant has other persons standing alongside him - who have the self-same interest as he and who have consulted lawyers on the self-same points as he - but these others have not been made parties to the action. Maybe for economy or for simplicity or what you will. All exchange counsel’s opinions. All collect information for the purpose of litigation. All make copies. All await the outcome with the same anxious anticipation — because it affects each as much as it does the others …
In all such cases I think the courts should - for the purposes of discovery - treat all the persons interested as if they were partners in a single firm or departments in a single company. Each can avail himself of the privilege in aid of litigation. Each can collect information for the use of his or the other's legal adviser. Each can hold originals and each make copies. And so forth …
[58][1981] QB 223, 243, quoted in Farrow v Webb, 609.

Consideration

As I apprehend the Plaintiffs’ submissions, they contend that one of the necessary elements for maintaining a claim to privilege, being confidentiality, is missing here. That is, by Trust Documents being disclosed to those described within those submissions as third parties, the Trustees have waived privilege in the Trust Documents.

I also apprehend the Plaintiffs’ submission to be that to the extent that common interest privilege is relied on as between the Trustee defendants, there is no relevant common interest capable of being protected by that principle.

(c) The other directors of the Sirena Group have told Luisa that inspection of the documents by the Plaintiffs would be strenuously opposed.

Mr Rizio states that the Sirena Group objects to the disclosure of these documents beyond what has already been made available by the Trustees to the Plaintiffs.[167]
[167]Rizio Affidavit, [11].

Mr Hughes also deposes that Mr Rizio, accountant at Banks Group (the accountants for the Sirena Group entities),[168] and Vivek Agarwal, accountant at Morans, have informed him that the Sirena Group accounts are provided to Morans as accountants for Vinrose on the basis that they will maintain confidentiality in the documents and only use them for the limited purpose of preparing the financial statements of the Keck Trust. Mr Rizio gives direct evidence to the same effect.[169] Mr Hughes also says that Mr Rizio and Mr Agarwal have informed him that only the accounting distributable profit (or loss), the taxation distributable profit (or loss) and any relevant unitholder entitlement balances is used or disclosed by Morans and that all other information is to be kept confidential.[170]
[168]As noted above, Mr Rizio is also the company secretary of Iconic and Sirena.
[169]Rizio Affidavit, [10].
[170]Hughes Affidavit, [105(a)(iv)].

Mr Rizio also gives evidence of the “highly sensitive and confidential” nature of the information which is provided to Morans regarding the Sirena Group.[171] I do not need to detail this here, but suffice to say that I am satisfied by Mr Rizio’s explanation, and am satisfied that the information is confidential.
[171]Rizio Affidavit, [5]-[9].

In relation to the Italian Media Group, Mr Hughes deposes that Luisa and Mr Rizio have informed him that:[172]
[172]Hughes Affidavit, [105(a)(v)].

(a) There are other third party investors in the Italian Media Group and Vinrose as trustee for the Keck Trust, and the investors agree to retain confidentiality over the financial statements prepared;

(b) The financial statements of the Italian Media Group are provided to Morans as accountants for Vinrose on the basis they will maintain confidentiality in the documents and only use them for the purpose of preparing the financial statements of the Keck Trust;

(c) Similar restrictions to those set out above regarding the Sirena Group as to what information from the Italian Media Group financial statements can be used and disclosed by Morans apply.

Mr Hughes says that the Trustees consider that the beneficiaries should not be provided with unredacted copies of the Sirena Group and Italian Media Group documents as they were provided on a confidential basis, they contain confidential information, and the Trustees want to continue to receive the financial statements, which may be jeopardised if the Trustees do not respect confidentiality.[173] Luisa has told him that the information could be used to prejudice or disadvantage the commercial or competitive interests of the Sirena Group and/or the Italian Media Group, which could in turn have a negative effect on the financial position of the Keck Trust.
[173]Hughes Affidavit, [105(a)(iii)4, (vii)].

Further, Mr Hughes says that the Trustees take the view that the financial statements of the Trusts already contain salient information about the Sirena Group and Italian Media Group investment and income which is made available to the beneficiaries.[174]
[174]Hughes Affidavit, [105(a)(iii)4, (vi)].

In addition to the general submissions regarding confidentiality, the Trustees make submissions based on the above evidence and they also submit that the Italian Media Group and Sirena Group financial documents are not Trust Documents as they are not necessary to understand transactions of the trusts, primarily because of the matters referred to in paragraph 281 above.

The Plaintiffs submit that the Sirena Group and Italian Media Group documents are Trust Documents as they evidence the way in which the trust assets are invested.

The Plaintiffs submit that insofar as confidentiality is claimed over the Iconic documents, clause 16.2 of the Iconic Trust Deed provides that the financial statements and books of account in relation to the Iconic Food Distribution Trust shall be open to the inspection of the unit holders.[175] The Plaintiffs submit that there is no basis for Iconic to unilaterally impose confidentiality requirements as between it and unit holders including Vinrose. The Trustees submit that the Iconic trust deed does not say anything about confidentiality one way or the other, and does not seem to prevent it.
[175]Ford Affidavit, [71]; exhibit SMF-45, tab 36.

I do not accept the Plaintiffs’ submission in this regard, as it is not to the point. There is nothing to prevent Iconic from providing documents on a confidential basis and it is tolerably clear on the evidence that this is what it, and Sirena, have done.

I accept the evidence that the Sirena Group and Italian Media Group documents were provided on a confidential basis and that the redacted portions would reveal confidential information. As set out in paragraphs 109 to 112 above, I accept the Trustees’ submissions in respect of a trustee’s right to withhold documents provided to it confidentially from beneficiaries. Accordingly, the documents in Hughes Schedule 19 do not have to be produced in unredacted form to ABL. I do not consider it necessary for me to inspect these documents.

If pressed and if it were necessary for me to decide the question, I would not accept the Plaintiff’s submission that the Sirena Group and Italian Media Group documents are Trust Documents, as such documents are outside the scope of Trust Documents as they are not necessary for an understanding of the transactions of the Trusts.

The Plaintiffs submitted that the concerns expressed by Mr Hughes and Rizio as to the prejudice to the Sirena Group and the Italian Media Group should the documents be produced are unfounded. Ms Ford deposes that none of the Plaintiffs have any commercial interests in the food distribution industry in the same field as, or in competition with, them, and that the Plaintiffs do not intend to share any obtained documents with other beneficiaries of the Trusts.[176] Further, the Plaintiffs are prepared to enter into confidentiality undertakings in relation to any commercially sensitive documents, and during the course of the hearing the Plaintiffs’ Counsel circulated a revised form of undertaking. The Trustees reject the proposition that the offer of a confidentiality undertaking means that production of the documents should occur, but say that they will address that question if production of those documents is ultimately ordered. Rather, they submit that the consequence of a finding that the Trustees may properly withhold documents from the Plaintiffs by reason of their confidential nature is that the Plaintiffs have no right to inspect the documents or redacted parts at all. They say that the outcome in Hartigan Nominees and Deutsch v Trumble was that the trustees could withhold the documents in their entirety and the beneficiaries had no right or entitlement to access, even in a limited or regulated way.
[176]Ford Affidavit, [73].

In the circumstances of this case, where the production of documents has been ordered to beneficiaries by Trustees in the exercise of the Court’s discretion within its supervisory jurisdiction, I do not consider measures such as confidentiality undertakings typically utilised in respect of commercially sensitive documents in commercial litigation to be apposite. In the latter circumstance, documents are required to be produced due to their relevance to matters in the subject litigation and are part of the coercive powers of the Court in that context. In the instance before me, the question is what documents beneficiaries are entitled to, and the withholding of documents on the grounds of confidentiality was provided for in Paragraph Two of the Trust Records Orders. As set out above, I am persuaded by the Trustees’ submissions that Other Withheld Documents includes documents of third parties containing confidential information which has been provided confidentially, and that the Trustees not only have obligations to observe such confidentiality but a right or interest in doing so for the benefit of the Trusts. Accordingly, the offer of a confidentiality undertaking by the Plaintiffs does not persuade me that the documents should be produced.

Documents disclosing bank account details or financial information of other third party corporate entities

This sub-category is described as emails, letters and documents disclosing bank account details or financial information of other third party corporate entities including Vivik Pty Ltd as trustee for Valmorbida Unit Trust No. 11 (‘Vivik’), Adjoval, October Flower Pty Ltd (‘October Flower’) and Voyager CD Pty Ltd (‘Voyager’). These are all said by Mr Hughes to be entities currently or previously related to the wider Valmorbida family enterprise.[177]
[177]Hughes Affidavit, [105(b)].

Mr Hughes says that Ms Chan is a current director of Adjoval (noting that Adjoval is the Fourth Plaintiff in the Trustee Removal Proceeding), October Flower and Voyager. Luisa is a current director of Vivik. He says that Morans are the accountants for Vivik and were previously the accountants for Adjoval, October Flower and Voyager until Adrian’s death.[178]
[178]Hughes Affidavit, [105(b)(i)].

Mr Hughes deposes that the documents were redacted and that if disclosed in full, they would reveal sensitive or confidential information of these third party corporate entities such as bank account details and financial information, which information is not relevant to the trusts and is not required in order to understand the accounts of the trusts.[179]
[179]Hughes Affidavit, [105(b)(ii)].

In terms of the attitude of these corporate third parties to the release of their confidential information, Mr Hughes deposes that:[180]

(a) Vivik has been asked whether it wishes to maintain a claim of confidentiality in respect of its information but as at the date of his affidavit, no response had been received.[181]

(b) LHPW wrote to ABL in respect of the documents relating to Adjoval, October Flower and/or Voyager containing confidential information. As I understand it, the parties as at the date of the Hughes Affidavit, the parties are still corresponding regarding documents relating to Adjoval and to Adrian, but no response had been received by that time in respect of October Flower or Voyager.

[180]Hughes Affidavit, [105(b)(iii)].

[181]Hughes Affidavit, [105(b)(iii)1].

The parties’ submissions in respect of confidentiality, already set out in these reasons, apply to this sub-category.

I see no good reason as to why documents revealing confidential or sensitive information of third party corporate entities should be produced to the Plaintiffs. As set out above, the Trustees are entitled to withhold such information. I do not consider it decisive that Vivik has not yet responded to HWLE’s enquiry: it seems reasonable to me that it would expect such information to be kept confidential by the Trustees.

To the extent that the Plaintiffs wish to follow up on obtaining documents revealing confidential information of Adjoval, then they can do so separately with the Trustees by requesting those particular documents. There seems little reason to refuse such a request. I do not consider it an appropriate use of the Court’s resources for me to trawl through some hundreds of documents in Hughes Schedule 19 so as to ascertain which documents fall within such a category.[182] There is insufficient evidence before me as to whether October Flower and Voyager are within Ms Chan’s control or not: the only evidence I have is that she is a director of those entities. In the circumstances, I am not prepared to make orders for production of documents revealing confidential or sensitive information of those entities.

Documents disclosing bank account details, financial or personal information of other third parties

[182]The Trustees have provided a list of documents in Hughes Schedules 19 and 20 pertaining to the Sirena Group and Italian Media Group, such that those have been identified and could be disregarded in such an exercise, but there remain over 200 documents in Hughes Schedule 19 which would have to be reviewed should I be inclined to undertake the task.

This sub-category is described as emails, letters and documents disclosing bank account details, financial information or personal information of other third parties, including Luisa (in her personal capacity), Empaval, Mariano (in his personal capacity), Patricia Amad (Mariano’s partner), Nadia Valmorbida, Elise Valmorbida, other members of the extended Valmorbida family, Kal, Vinrose in its capacity as trustee for the McDonald Trust, Ms Chan, and Adrian.[183]
[183]Hughes Affidavit, [105(c)(i)].

Mr Hughes deposes that the documents were redacted and that if disclosed in full, they would reveal sensitive or confidential information of these third parties such as bank account details, personal expenditure or other private information, which information is not relevant to the trusts and is not required in order to understand the accounts of the trusts.[184]
[184]Hughes Affidavit, [105(c)(ii)].

In terms of the attitude of these third parties to the release of their confidential information, Mr Hughes deposes that:[185]
[185]Hughes Affidavit, [105(c)(iii)].

(a) Insofar as documents relate to Ms Chan or Adrian, the matters referred to in paragraph 293(b) apply;

(b) Insofar as documents relate to Mariano or Empaval, HWLE stated that they maintain their claims of confidentiality and do not consent to unredacted versions being provided to ABL; and

(c) Insofar as the other third parties are concerned, it was not practical or efficient to contact each of them individually. Nonetheless, the information is confidential, personal or sensitive on its face.

The parties’ submissions in respect of confidentiality, already set out in these reasons, apply to this sub-category.

I see no good reason as to why documents revealing confidential, personal or sensitive information of third parties should be produced to the Plaintiffs. As set out above, the Trustees are entitled to withhold such information. I do not consider it decisive that not all such persons have been asked for their views about producing such information to the Plaintiffs: it seems reasonable to me that they would expect such information to be kept confidential by the Trustees.

To the extent that the Plaintiffs wish to follow up on obtaining documents revealing confidential information only of Ms Chan or Adrian, then they can do so separately with the Trustees by requesting those particular documents. There seems little reason to refuse such a request. I make the same comments as to the appropriateness of the use of the Court’s resources to identify such documents as I made in paragraph 296 above.

Conclusion regarding Hughes Schedule 19

I do not consider it necessary for me to inspect the documents in Hughes Schedule 19,[186] as I am satisfied that the evidence has established that the confidential information withheld by the Trustees is information that they are entitled to withhold pursuant to Paragraph Two of the Trust Records Orders. Being satisfied with that evidence, I do not consider it necessary for me to inspect a sample of these documents so as to verify the Trustees’ categorisation of them.
[186]Save that I did inspect documents specifically referred to in submissions from that schedule, being document numbers 989, 857, and 762-766.

Accordingly, the Trustees are entitled to resist production of the documents withheld, or unredacted versions of those which have been redacted, listed in Hughes Schedule 19.

Hughes Schedule 20 – Reason F

Hughes Schedule 20 contains 81 documents which were excluded on the grounds of Reason F, being documents recording sensitive or private details of other parties, many of which overlap with Reason E.[187] In other words, these fall within the Other Withheld Documents. The other parties include Gary Norris (a former employee of Voyager), CW Retail Trust (a tenant at property owned by Golden Fin), and the entities and persons referred to when discussing Hughes Schedule 19.
[187]Hughes Affidavit, [106].

Mr Hughes deposes that the 81 documents in Hughes Schedule 20 have been redacted and that he has reviewed the redactions. He says that if fully produced, the documents would disclose sensitive or confidential information of these third parties such as tax file numbers, bank account details, bank statements and personal or corporate information which is not relevant to the trusts and not required in order to understand the accounts of the trusts.

I take the same approach to this schedule as I do to Hughes Schedule 19. I am satisfied with the evidence as to the sensitive or confidential nature of the information withheld and the Trustees are entitled, for the same reasons as previously, expressed, to continue to withhold the redacted information. For the sake of completeness, I note that I have not considered it necessary to inspect the documents in Hughes Schedule 20.

Conclusion

It is convenient here to summarise the outcomes in respect of each of the Hughes Schedules:

(a) The Trustees are not required to produce to ABL the documents, or redacted portions thereof, listed in Hughes Schedules 2, 3, 8, 16, 17, 18, 19 and 20;[188]
[188]See paragraphs 155, 156, 179, 252, 263, 269, 304 and 307 above respectively.

(b) The Trustees are required to produce all of the documents, or redacted portions thereof, listed in Hughes Schedules 1, 15, 4, 10 and 7;[189]
[189]See paragraphs 225, 235, 241 and 256 above.

(c) In respect of Hughes Schedule 6, the Trustees are required to produce these documents, however they may first be redacted using the approach taken in respect of Hughes Schedules 2 and 3.[190]
[190]See paragraph 168 above.

(d) In respect of Hughes Schedule 9:

(viii) The Trustees are required to remove the redactions specified in paragraph 187 above; and

(ix)Otherwise, the Trustees are not required to produce any of the other documents in this schedule.

(e) In respect of Hughes Schedule 11:

(i) The Trustees agreed, during the course of submissions, to produce the documents referred to in paragraph 193 above;

(ii) The Trustees are required to produce the 6 documents listed in paragraph 196(e) above; and

(iii) Otherwise, the Trustees are not required to produce any of the other documents in this schedule.

(f) In respect of Hughes Schedule 12, the Trustees are required to produce the documents, or the redacted portions thereof, listed in Hughes Schedule 12, save for those listed as having been excluded on account of Reason E;[191]

(g) In respect of Hughes Schedule 14, the parties should review my conclusions as set out in paragraphs 202 to 204. If there is not consent between them following that ruling, then further material is required from the parties in respect of documents which relate to the VCAT proceeding, as set out in paragraph 204 above; and

(h) In respect of Hughes Schedule 19, apart from what I have said in paragraph (a) hereof, it is up to the Plaintiffs to follow up with the Trustees the matters referred to in paragraphs 296 and 302 above.

[191]See paragraph 246 above.

The parties are to confer regarding a form of orders to give effect to this ruling (including as to costs) and to provide my Chambers with proposed consent orders by 4.00 pm on 10 September 2021. If the parties do not agree on the proposed consent orders, then each party is to send to my Chambers their preferred orders and a short written submission of no more than 3 pages by that date, in which case the proceeding will be listed for hearing and the making of orders (including as to costs) on 17 September 2021.

SCHEDULE OF PARTIES

S CI 2017 03211
BETWEEN:
KAIRU (ERICA) CHAN	First Plaintiff
KAIRU (ERICA) CHAN (in her capacity as executor of the estate of ADRIAN VALMORBIDA, deceased)	Second Plaintiff
ADMARVAL PTY LTD (ACN 119 834 543)	Third Plaintiff
ADJOVAL PTY LTD (ACN 119 834 561)	Fourth Plaintiff
- and -
VALMORBIDA CUSTODIANS PTY LTD (ACN 609 840 539)	First Defendant
GOLDEN FIN PTY LTD (ACN 109 809 832) AS TRUSTEE OF THE FERVAL TRUST	Second Defendant
MARADVAL PTY LTD (ACN 616 314 222) AS TRUSTEE OF THE ADMARVAL DISCRETIONARY TRUST	Third Defendant
VINROSE PTY LTD (ACN 004 744 307) AS TRUSTEE OF THE KECK TRUST	Fourth Defendant
MARIANO VALMORBIDA	Fifth Defendant
AND BETWEEN:
MARIANO VALMORBIDA	Plaintiff by Counterclaim
- and -
KAIRU (ERICA) CHAN (in her capacity as executor of the estate of ADRIAN VALMORBIDA, deceased)	First Defendant by Counterclaim
ADMARVAL PTY LTD (ACN 119 834 543)	Second Defendant by Counterclaim
ADJOVAL PTY LTD (ACN 119 834 561)	Third Defendant by Counterclaim

[2021] VSC 527

27 August 2021