Cheung and Cheung

[2008] FamCA 624

FAMILY COURT OF AUSTRALIA

CHEUNG & CHEUNG [2008] FamCA 624

FAMILY LAW – PROPERTY – Third Party privilege – Professional privilege – Costs

APPLICANT: MR CHEUNG

1^ST RESPONDENT: MS CHEUNG

2^ND RESPONDENTS: C CHEUNG and
Y CHEUNG

3^RD RESPONDENT: G PTY LTD

FILE NUMBER: BRF 1286 of 2006

DATE DELIVERED: 11 June 2008

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: The Honourable Justice Jordan

HEARING DATE: 11 June 2008

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Cooper, Charles Cooper Lawyers

COUNSEL FOR THE 1^ST RESPONDENT: Mr Beacham

SOLICITOR FOR THE 1^ST RESPONDENT: Jones Mitchell Lawyers

COUNSEL FOR THE 2^ND RESPONDENTS Mr Williams

SOLICITOR FOR THE 2^ND RESPONDENTS: Hopgood Ganim Lawyers

SOLICITOR FOR THE 3^RD RESPONDENT Mr Black, Anthony Black Family
Law Services

Orders

1. That the Application in a Case filed 6 May 2008 be dismissed.

2. That the Applicant Husband pay the Respondent G Pty Ltd’s costs of and incidental to the Application in a Case filed 6 May 2008.

3. That the privileged documents produced by G Pty Ltd pursuant to a subpoena filed 14 March 2008 be returned to G Pty Ltd forthwith.

IT IS NOTED that publication of this judgment under the pseudonym CHEUNG & CHEUNG is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  BRF1286 of 2006

MR CHEUNG

Applicant

And

MS CHEUNG

1^st Respondent

And

C CHEUNG and Y CHEUNG

2^nd Respondents

And

G PTY LTD

3^rd Respondent

REASONS FOR JUDGMENT

EX TEMPORE

1. I have had the benefit of Mr Cooper's submissions.  In addition, I have had the benefit of submissions made on behalf of G Pty Ltd (“G”)and earlier submissions made by Mr Jones, who was a solicitor appearing on a previous occasion.

2. I have now received some further submissions by counsel appearing on behalf of the wife.  They seem to be largely a reflection of the types of sentiments expressed by Mr Jones in his earlier submission.  I understand the logic of the dominant purpose argument advanced by Mr Cooper on behalf of his client.  In the course of my reading, I have had particular regard to the observations of a number of other courts, in particular, the Court of Appeal in Victoria in Spotless Group Ltd and Others v Premier Building and Consulting Group Pty Ltd (2006) 16 VR 1; [2006] VSCA 201; the unreported decision of Carmody J in Brine & Brine [2007] FamCA 1444, and the decision of Santow J in Re Global Medical Imaging Management Ltd (in liq); Australian Mezzanine Investments Pty Ltd [2001] NSWSC 476.

3. I broadly endorse and follow the principles and sentiments set out in those cases.  In particular, I note in the Spotless case that the majority of the Court held in a similar situation that, whilst there was no relevant community of interest between the litigant and the bank in that case such as to find a common interest privilege, they went on to observe that to properly characterise the recommunication by the litigant to the financier was to do so on a basis of privileged legal advice, even though it was not specifically created for the dominant purpose of obtaining that legal advice.

4. The Court determined that there was no inconsistency with the maintenance of privilege and the communication of legal advice to a financier on a confidential basis in order to secure funds to enable the litigation to be pursued.  Santow  J observed that the funding agreement might at first blush not pass the dominant test, but went on to say that:

   To deny legal privilege to a funding agreement of this sort would fail to give proper weight to its inextricable connection with the very subject matter of the legal advice that might be given and the nature of the professional legal services to be rendered.

1. As his Honour observed:

   The funding agreement in a literal and substantive sense, fulfils the purpose of providing legal services in terms not only of the overall capacity to have them at all, but also their availability at critical junctures in the case.

   He went on to say:

While it may not reveal the content of legal advice, it reveals the confidential circumstances of its availability and throws oblique light on the confidential circumstances to which the advice is directed.

1. I also concur with the observations of his Honour Carmody J in pars 43, 45 and 59 of his judgment in the unreported decision of Brine, to the effect that the conclusions reached by these other courts are not only consistent with precedent and principle, but they are also consistent with public policy, a view I hold strongly.

2. For those reasons, I propose to dismiss the applicant's Application for Review.

   RECORDED  :  NOT TRANSCRIBED

3. The issue of costs is a troublesome one, in that I am satisfied that the husband had an arguable case to advance in relation to the documents.

4. It is fair to observe that there is not, at this stage, any binding authority on the propositions argued directly on point to the Full Court or the High Court.  The husband was unsuccessful before the Registrar and has been unsuccessful before me. 

5. I accept that a component of the arguments advanced on behalf of the husband is sound at law, in that the objection is one strictly taken by the wife and consistent with my view that the wife had a right to object and the respondent to the subpoena had a right to be heard.  There was, at least at face value, a surviving argument on that front.

6. What also makes this aspect of the matter difficult is not only my determination that the husband's application was not so without merit as to be bound to fail, but also that, at the end of the day, a third party has incurred costs.  Ordinarily, in this jurisdiction, in proceedings between parties to the marriage and third parties and in other civil jurisdictions between strangers, costs usually follow the event.

7. I would be concerned about the prospect that G Pty Ltd would be out-of-pocket when it has been successful on the substantive application now on two occasions.  Further, the stand it took was entirely consistent with the obligations set out in the application for finance forms and was entirely consistent with important considerations of public policy that have been a significant component of the decision I have made.

8. In those circumstances, it seems to me that it would be unfair to burden G Pty Ltd with the entirety of the costs of the exercise.  In finding a balance between all of those matters, I take the view that it would be appropriate to require of the husband an obligation to pay the costs of and incidental to the review application only, that is, from the date of that decision.  I take that stand, in part, because the husband has had the benefit of knowledge of the reality of the situation from that point on.  He knew that the wife was objecting, notwithstanding formalities not being attended to.  He had the benefit of a decision of a Registrar, which, of course, I am not bound by as this is a hearing de novo.  However, in terms of the application for costs, the husband has, in effect, had a decision before him which coincidentally has been adopted, reinforced and confirmed by the effect of the decision I have made.

9. In those circumstances, he has sought the indulgence of a second bite of the cherry.  In the circumstances, I take the view that it is appropriate that G Pty Ltd should be indemnified against those costs.

   ORDER DELIVERED

   RECORDED  :  NOT TRANSCRIBED

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Jordan

Associate: 

Date: