Command Energy Pty Ltd v Nauru Phosphate Royalties Trust
[1999] VSC 355
•24 September 1999
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION Do not Send for Reporting Not Restricted
No. 6425 of 1997
| COMMAND ENERGY PTY LIMITED (ACN 002 141 068) | Plaintiff/Respondent |
| v | |
| NAURU PHOSPHATE ROYALTIES TRUST | Defendant/Appellant |
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JUDGE: | Warren J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 September 1999 | |
DATE OF JUDGMENT: | 24 September 1999 | |
CASE MAY BE CITED AS: | Command Energy Pty Ltd v Nauru Phosphate Royalties Trust | |
MEDIA NEUTRAL CITATION: | [1999] VSC 355 | |
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Discovery – Privilege – Attachment of and annotation upon an unprivileged document to a document submitted for legal advice – Particulars of contractual terms implied at law.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff/Respondent | Mr A.C. Archibald QC with | Blake Dawson Waldron |
| For the Defendant/Appellant | Mr W.F. Lally QC with Mr V.A. Morfuni | Clayton Utz |
HER HONOUR:
The plaintiff alleges repudiation of contract in relation to the operation and servicing of a significant building in the central business district of Melbourne known as Nauru House ("the building"). The defendant disputes the allegations and alleges by counterclaim that it was entitled to repudiate the agreement between it and the plaintiff and is entitled to damages.
The central agreement between the parties is referred to as the "maintenance agreement" made on 6 January 1993. The plaintiff agreed as contractor to provide certain services to the defendant with respect to the maintenance and operation of the building. The services under the maintenance agreement were defined and included, in particular, for present purposes the maintenance and operation of a security system, lift and plant operation.
It is alleged by the plaintiff that on about 30 May 1997 the defendant's building manager, Gardner & Lang purported to act on behalf of the defendant and notify the plaintiff that as from 1 July 1997 the services to be provided by the plaintiff under the maintenance agreement were to be changed. The changes were that the plaintiff would cease to provide front door reception services, the services of security system, lift and reception and that another contractor, Chubb Security would provide those services to the defendant instead of the plaintiff. The agents advised, further, that the fees payable to the plaintiff under the maintenance agreement would be reduced accordingly. The notice was given in the form of a letter dated 30 May 1997 from Gardner & Lang to the plaintiff. The plaintiff alleges that in breach of the maintenance agreement as from 1 July 1997 the defendant withdrew or prevented the plaintiff from providing the servicing and maintenance to the control room, the security system and the lift system and that such services were thereafter provided by the other contractor, Chubb.
Before me is an appeal under Order 77.05 of the Rules against orders made by the Listing Master on 18 August 1999. The Listing Master determined two summons. The first summons was filed by the defendant seeking further and better discovery (a matter I need not deal with at this point except in relation to the question of costs), sufficient particulars of the grounds for which a claim for privilege was made with respect to certain documents and, finally, further and better particulars of the plaintiff's amended statement of claim. The second summons was issued by the plaintiff seeking further and better particulars of the defendant's defence and counterclaim. On the return of both summons before the Listing Master orders were made requiring the defendant to file and serve further and better particulars of its defence and counterclaim and the defendant's summons was dismissed. There were other orders dealing with costs and incidental matters. The appeal before me proceeds as a hearing de novo pursuant to Order 77.05. As the defendant appeals against the orders made by the Listing Master with respect to both summons they are matters that I must consider afresh.
I turn firstly to the defendant's summons and consider each area of relief sequentially.
1.Request for affidavit particularising grounds for claim of privilege – "the privileged document"
The nub of the dispute between the parties with respect to the issue of documents for which privilege is claimed is that initially the plaintiff discovered a group of documents and did not claim privilege. Subsequently, the plaintiff informed the defendant that the discovery of those documents without a claim for privilege was inadvertent and accordingly a supplementary affidavit of documents was filed on behalf of the plaintiff. The critical category of documents for which privilege was claimed subsequently appears to relate to correspondence between the plaintiff's agents, Gardner & Lang and the plaintiff and its officers. Initially upon discovery those documents were discovered without a claim for privilege and the general description of such documents is indicative that they represent correspondence between the agents and the plaintiff.
Upon learning of its error the plaintiff filed a supplementary affidavit of documents. In that affidavit the plaintiff claimed privilege for a number of documents that it had inadvertently discovered without claiming privilege in its original affidavit of documents. In the course of claiming privilege the documents which represented in part communications between the plaintiff's agents Gardner & Lang and the plaintiff and its officers were re-listed in the supplementary affidavit of documents and privilege claimed. Privilege was claimed on the basis that the document was attached to and formed part of another document being a document on which the plaintiff had made handwritten notes in the form of a facsimile from the plaintiff to its solicitors. It was asserted by the plaintiff that privilege attached to the particular documents because they formed part of the facsimile. There were additional documents for which privilege was claimed on the basis that the particular document formed part of another document being a without prejudice letter.
The defendant seeks better particularisation by the plaintiff of these groups of documents for which privilege is claimed. The defendant alleges that the mere attaching of a document to a facsimile transmission does not attach privilege to the document. It further alleges that the plaintiff has not established that the sole purpose for which the documents in which respect of which privilege is claimed was brought into existence for the purpose of a submission to its legal advisers for the purposes of obtaining legal advice. The defendant wants the position clarified with respect to the document or documents that were attached to the relevant facsimile transmissions. It is submitted that if an original of the document attached to the facsimile transmission exists then privilege does not attach to that original document. Furthermore, it is submitted that if an original is no longer available and which document is unprivileged the document upon its submission to the plaintiff's solicitors as forming part of a facsimile transmission or otherwise for the purposes of obtaining legal advice loses privilege once the original document ceases to be in existence.
The proper test to be applied was spelled out by Brennan CJ in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1996) 188 CLR 501 at 508:
"The test is anchored to the purpose for which the document was brought into existence; the use to which a document is put after it is brought into existence is immaterial. So, on a strictly logical application of the test, if a copy is made solely for the purpose of providing it to a legal adviser in order to obtain legal advice or for use in connection with apprehended litigation, the copy would be privileged. A test which focuses on the purpose for which a document is brought into existence, rather than on the information given by or contained in the document, creates practical problems in ascertaining the intention of the maker of the document. If there be two copies on a file, has one (and if so, which), or both, or neither been brought into existence for a privileged purpose? Though the test raises problems of that kind, it must be applied unless there is some countervailing principle. Is there any countervailing principle? That calls for a consideration of the reason for according legal professional privilege to protect a copy of an unprivileged original from seizure or inspection."
Applying that test to the present matter it is necessary for the defendant to fulfil the burden that privilege does not and could not attach to the documents for which privilege is claimed. The basis of the privilege is that they are attached to and form part of other documents and which have been the subject of annotation for the purposes of obtaining legal advice. This demonstrates in my view that the documents were brought into existence for the purpose of providing them to a legal adviser in order to obtain legal advice. Accordingly, in light of the test articulated by Brennan CJ in Propend the attached document, whether it is a copy or not, is privileged.
Mr A. Archibald QC who appeared with Mr I. Williams for the plaintiff submitted that it is a question in each case not of what is contained in each document but rather that the decisive criterion is the occasion the document was brought into existence. In other words, it is the "privileged occasion" that leads to the attachment of privilege to the document. Certainly it was conceded for the plaintiff that privilege does not attach to a document merely by the joining or attachment of that document to another document and forwarding the "joined" document to a solicitor. Such was not the case before me. Rather, the documents that are the subject of the challenge were created on a privileged occasion, that is, brought into existence for the purposes of creating and/or obtaining legal advice. It is a misconception to say that privilege does not attach to a document created on a "privileged occasion" simply because other copies are in existence.
There was no debate or challenge before me with respect to the issue of the initial inadvertent discovery by the defendant of the relevant document or documents or as to whether the documents satisfied the sole purpose test. The debate encompassed entirely the status of the document or documents once a document formed part of another document that was compiled for the purposes of obtaining legal advice and, furthermore, that was the subject of annotations relating to the obtaining of that legal advice.
Mr W. Lally QC who appeared with Mr. V. Morfuni for the defendant relied upon the obiter dictum of Toohey J in his dissenting judgment in Propend (at 529) where it was observed:
"Legal professional privilege is concerned with protecting the confidence of communications between lawyer and client. If therefore an original document is not privileged, a copy of that document is not privileged merely because the lawyer receives it from his or her client, even if it is to assist in the conduct of litigation. Where privilege is claimed for the contents of a document, it is necessary to look at the purpose for which the document recording the information came into existence, not the purpose for which the information was obtained. If the document was not brought into existence for the purpose of litigation, its contents are not privileged even if the information which it contains was obtained for that purpose. … There must be something in the circumstances in which a copy of a non-privileged document came into existence in order to attach privilege to the copy."
In my view the observations of Toohey J in Propend do not assist the defendant in the present matter. Rather, the present matter involves the creation of a document by the attachment of an existing document to form part of another document and which other document is submitted to solicitors for legal advice and subject, further, to annotations in relation to the obtaining of that legal advice. In those circumstances, on the basis of the test cited previously of Brennan CJ in Propend privilege attaches to the documents presently in issue and cannot be the subject of challenge by the defendant.
It follows that insofar as the defendant appeals against the orders made by the Listing Master with respect to the request for better particularisation of the basis for the claim for privilege to certain documents, such appeal fails. I add that to some extent the argument before me was concerned with whether privilege actually attached to the documents in dispute, however, the relief sought by the defendant in its summons was for better particularisation of the claim for privilege and not for further and better discovery. For the reasons stated I am satisfied that the plaintiff has provided sufficient particulars of the basis upon which it claims privilege for the relevant documents.
2.Further and better particulars of the amended statement of claim.
The defendant criticises the particulars or lack thereof of the plaintiff to its amended statement of claim in two respects. Firstly, the allegation of implied terms pleaded to be terms implied by law. Secondly, particulars sought with respect to events that have transpired constituting the breaches alleged of the maintenance agreement against the defendant.
The plaintiff alleges in its pleading, among other matters, that there were implied terms of the agreement between the plaintiff and the defendant that as a matter of law each party was under an obligation to do certain things: to secure performance of the agreement; to do all that was necessary to achieve the carrying out of the agreement; to co-operate in the performance of obligations under the agreement; to enable the other party to have the benefit of the agreement; to not vary work under the agreement by giving work to another party such as a contractor; and to provide access and quiet possession. I am satisfied that each of these matters are implied at law and do not require particularisation by way of facts to support the implied term relied upon. The principles are well stated in the relevant authorities with respect to each of the implied terms relied upon by the plaintiff in its pleading (see MacKay v Dick (1881) 6 App. Cas 251, 263; Butt v M'Donald (1896) 7 QLJ 68, 70-1; Secured Home Real Estate v St. Martins Investments Pty Ltd (1979) 53 ALJR 745, 748-9; Carr v J.A. Berriman Pty Ltd (1953) 89 CLR 327; Commissioner for Main Roads v Reed & Stuart Pty Ltd (1974) 131 CLR 378; Lodder v Slowey (1904) AC 442). Indeed, an examination of the pleading in the amended statement of claim reveals that many of the implied terms alleged against the defendant are extracted from the relevant authorities. Ultimately, the plaintiff is entitled to rely upon its pleading of implied terms of its agreement with the defendant. If it fails in its allegations as a matter of law that is the end of the matter. The defendant cannot compel the plaintiff to insist upon particulars of matters by way of alleging facts that are correctly to be implied as a matter of law.
Turning to the other aspect of the further and better particulars sought by the defendant. In essence, the defendant seeks further and better particulars of the actual works, the works and services said to have been withdrawn and the works and services the plaintiff was prevented from performing. The plaintiff has alleged (in paragraph 18 of the amended statement of claim) that it suffered loss and damage as a result of the breaches by the defendant of the relevant agreement. In making that allegation in its further and better particulars the plaintiff has relied upon the matters alleged earlier in the amended statement of claim (see paragraphs 11 and 13 thereof). Consideration of the pleading set out in the amended statement of claim reveals that the plaintiff alleges breaches and, in terms of particulars of such breaches, relies upon the facts alleged in paragraphs 11 and 13 of its amended statement of claim. Paragraph 11 of the pleading alleges that as a result of the notification to the plaintiff by the defendant's agent the plaintiff was given notice that it would no longer be required to provide the services already described. Furthermore, it was alleged that as of 1 July 1997 the plaintiff was deprived or prevented from providing the services of which deprivation or prohibition it had previously been advised by the defendant's agent Gardner & Lang on 30 May 1997. In my view the reliance by the plaintiff upon the matters alleged in paragraphs 11 and 13 of the amended statement of claim are sufficient for the purposes of providing particulars of the breaches alleged in paragraph 18 of the pleading.
In forming this view I observe that in the course of the interlocutory dispute between the plaintiff and the defendant concerning both further and better particulars and discovery of documents a combative course of correspondence has ensued between the parties' respective solicitors. In the course of such correspondence the plaintiff's solicitor has adverted to a matter which it need not necessarily have done with respect to providing further and better particulars of the breaches alleged. In my view this is a matter of no consequence. On proper analysis it is the pleadings and the particulars actually provided that are the subject of consideration before me. Having considered those matters and for the reasons stated I consider that the plaintiff should not be required to provide further and better particulars as sought by the defendant.
It follows that insofar as the defendant appeals against the orders of the Listing Master concerning the provision of further and better particulars, the appeal fails.
3.Remaining matters
There is a further skirmish between the parties, largely at the instigation of the defendant, relating to documents which were discovered by the plaintiff and subsequently lost. I am informed that up until the day of the hearing before the Listing Master all bar four of the missing documents had been located. Four documents remain "missing" but such documents are described, in any event, in the affidavits of documents filed on behalf of the plaintiff. There is no evidence before me on behalf of the defendant disclosing that there is any prejudice to the defendant given the non-availability of the four documents. I am not informed any further upon the matter.
However, in addition to the orders previously adverted to, the Listing Master required the defendant to provide further and better particulars of its defence and counterclaim by a certain date. The defendant seeks an extension of the time to provide those particulars on the basis that it needs to see the four "missing" documents before it can finalise its particulars. No evidence is before me to support this assertion. I consider it appropriate for the defendant to provide its further and better particulars in accordance with the orders made by the Listing Master. If it transpires that the four "missing" documents are located and the defendant wishes to amend, vary or expand upon its particulars then it will be open to it to deliver additional particulars at the relevant time. In forming this view I am aware that an examination of the court file reveals that Beach J directed that the proceeding be allocated an expedited hearing as long ago as early 1998. Almost two years later the parties remain engaged in interlocutory disputes. In my view it would be inappropriate in any event to allow the defendant to delay the expedition of the proceeding by way of awaiting the location of the four lost documents.
It follows that insofar as the defendant seeks to appeal against the time ordered by the Listing Master for the provision of further and better particulars of its defence and counterclaim, such appeal fails.
Insofar as the defendant appeals the orders made by the Listing Master on the plaintiff's summons, the defendant concedes it should provide further and better particulars of its defence and counterclaim. Rather, the defendant appeals against the time for providing such particulars and I have disposed of that aspect of the appeal.
There is a remaining matter and it relates to the further and better discovery of documents referred to as the "sogelease documents". It was conceded by Mr Lally in the course of argument that these documents only related to the question of costs insofar as the Master made orders between the parties. The sogelease documents are not before me and accordingly I consider it inappropriate to consider this issue in any way whether it relates to the issue of costs or not. Furthermore, the view I have taken is that the orders of the Master should remain undisturbed. In those circumstances in my view the Master was seized of the matter on 18 August 1999 and in the best position to determine where the costs of the two applications before her should fall. Accordingly, I do not propose to interfere with the orders for costs made by the Listing Master.
On the basis of the reasons expressed I dismiss the appeal.
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