Daymond & Anor and Daymond & Ors

[2012] FamCA 1041

FAMILY COURT OF AUSTRALIA

DAYMOND AND ANOR & DAYMOND AND ORS [2012] FamCA 1041

FAMILY LAW – EVIDENCE – Admissibility – where application made to rely on affidavit of solicitor – where affidavit objected to on basis that annexures contained privileged correspondence – whether the Court ought examine the contents of the affidavit before making a determination – consideration of the Evidence Act 1995 (Cth) – where the Court can have regard to the affidavit in ascertaining whether its contents are privileged – whether the contents of the affidavit sought to be relied upon were privileged – where the absence of the words ‘without prejudice’ does not, of itself, prove that a document is not privileged – where the applicant contended that the documents annexed to the affidavit were evidence of a concluded agreement and therefore not privileged – where the annexures were proof of counter-proposals and privileged.

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

Bradford v Bradford (1996) 19 Fam LR 488
GPI Leisure Corp Ltd v Yuill (1997) 42 NSWLR 225
New South Wales v Jackson [2007] NSWCA 279

1^st APPLICANT: Ms M Daymond

2^nd APPLICANT: Ms R Daymond

1^st RESPONDENT: Mr D Daymond

2^nd RESPONDENT: Mr I Daymond

3^rd RESPONDENT: P Pty Ltd

3^rd PARTY: Mr A Daymond

FILE NUMBER:	BRC	18	of	2011
FILE NUMBER	BRC	11578	of	2010

DATE DELIVERED: 3 December 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 3 December 2012

REPRESENTATION

COUNSEL FOR THE 1^ST APPLICANT: Mr George

SOLICITOR FOR THE 1^ST APPLICANT: A M Law

COUNSEL FOR THE 2^ND APPLICANT: Mr Hackett

SOLICITOR FOR THE 2^ND APPLICANT: Bruce Dulley Family Lawyers

COUNSEL FOR THE 1^ST, 2^ND, 3^RD

RESPONDENTS:

Ms Carew

SOLICITOR FOR THE 1^ST, 2^ND, 3^RD

RESPONDENTS:

Best Wilson Family Law

COUNSEL FOR THE 3^RD PARTY: Mr Williams

SOLICITOR FOR THE 3^RD PARTY: Shannon Donaldson Province Lawyers

Orders

1. The oral application by the First Applicant for leave to rely upon the affidavit of Andrew Anthony George, filed 28 November 2012, is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Daymond and Anor & Daymond and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC18/2011 and BRC11578/2010

Ms M Daymond

1^st Applicant

And

Ms R Daymond

2^nd Applicant

And

Mr D Daymond

1^st Respondent

And

Mr I Daymond

2^nd Respondent

And

P Pty Ltd

3^rd Respondent

And

Mr A Daymond

3^rd Party

EX TEMPORE

REASONS FOR JUDGMENT

1. At the outset of the continuation of these trial proceedings before me, an application was made for leave to file an affidavit by the solicitors for the first applicant. 

2. Counsel for the respondents, who are collectively each of two husbands and a corporation of which they are directors, objects to the receipt of that affidavit on the basis that its annexures, being correspondence passing between solicitors for the respondents and solicitors for the third party contains privileged material.  In doing so, counsel for the respondent foreshadowed the necessity for the court to have other correspondence so as to decide the issue of privilege.

3. Counsel for the first applicant was joined by counsel for the second applicant in contending jointly that the correspondence annexed to the affidavit is admissible by reason of it constituting a concluded agreement as between the respondents and the third party. Section 131 of the Evidence Act provides relevantly:

   (1)      Evidence is not to be adduced of:

   (a)a communication that is made between persons in dispute or between one or more persons in dispute, and a third party, in connection with an attempt to negotiate a settlement of the dispute, or

   (b)A document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. 

4. The section goes on to provide a number of exceptions not relevant for present purposes.

5. Section 133 of the same Act, provides as follows: 

   If a question arises under this Part, in relation to a document, the court may order that the document be produced to it and may inspect the document for the purpose of determining the question.

6. Argument ensued as to whether the court ought examine for itself the contents of the documents.  In essence counsel for the respondents argues that the court, here the sole arbiter of fact, might be prejudiced in the further conduct of the trial, if the contents of the correspondence were read when in fact they ought be privileged. 

7. It has been pointed out in a number of decisions that where a judge sits without a jury it will be a common experience for a judge to look at material the subject of a claim for privilege, and to thereafter hear the trial expunging from the trial judge’s mind the contents of documents ultimately held to be privileged.  Examples can be seen in New South Wales v Jackson [2007] NSWCA 279, in particular Mason P and Beasley J.A at 24 and Giles JA at 25. See also the decision of the Full Court of this court in Bradford v Bradford (1996) 19 Fam LR 488 (albeit that the counsel of perfection may be the determination of the question by another judge – for example – in pre-trial proceedings).

8. Ultimately, counsel for the respondents effectively conceded that it would be necessary for me to read the correspondence thoroughly as to determine the claim of privilege. 

9. A preliminary matter can be dealt with briefly.  It is deposed in the affidavit annexing the correspondence, at paragraph 4 that “neither of the above two letters claim to be submitted on a ‘without prejudice’” basis.  Reference was also made by counsel for the first applicant to correspondence being “open”. 

10. The addition of the words “without prejudice” does not give to a document the privilege (see, for example, GPI Leisure Corp Ltd v Yuill (1997) 42 NSWLR 225). Similarly the absence of the words without prejudice is not determinative of whether the document, or in this case, the relevant correspondence, meets the requirements of section 131 of the Act. What is required is a determination as to whether the relevant document or documents, here the correspondence, meets the requirements of the section as being “in connection with an attempt to negotiate a settlement of a dispute”.

11. The first of the letters annexed to the affidavit is dated 13 September 2012 and is correspondence dated 13 September 2012, from the solicitors for the respondents, addressed to the solicitors for the third party.  It sets out a proposal in what might be seen as three different respects.  The first relates to the payment of a sum, said to be owing in respect of a loan account in favour of the third party with the third respondent company.  Secondly, it relates to the issue of annual leave and long service leave entitlements, and monetary sums are addressed in each such respect.  Thirdly the correspondence goes on to say:

    Accordingly and with reference to our most recent facsimile of 13 September 2012, we confirm that there is an in-principle agreement between our clients and your client, that he receive a 25 per cent interest in the entity [P Pty Ltd] [the third respondent] and there to be a transfer of shareholdings to give affect to the acquisition of that interest.

12. As I have pointed out, counsel for the respondents contends that earlier correspondence passing between the relevant parties ought be examined.  That matter is referred to in the letter to which I have just referred, as follows

    On our understanding of the offers that have been exchanged, we are now awaiting confirmation from your client as to his acceptance of our client’s counter-proposal – which we confirm by way of response to your correspondence of 6 September 2012 are [the terms are thereafter set out pertaining to costs and the repayment of the loan account and long service and annual leave entitlements]. 

13. On 21 September 2012, the solicitors for the third party responded to that letter in a letter dated 21 September 2012.  That letter sets out what “we understand the terms of your offer are …” and thereafter is repeated the three matters to which I have just made reference, which concluded the earlier letter from the respondent to each reference has been made. 

14. The gravamen of the contention made on behalf of the applicants is then seen in the following paragraph where it is said “we have now received instructions from our client to accept the above offer”.  Of note, the first of the three paragraphs set out in that correspondence is that:

    Our client receives the equivalent of a 25 per cent interest in the entity [P Pty Ltd] and for there to be a transfer of shareholders to give effect to the acquisition of that interest.

15. If the letter concluded there, I would have little difficulty in concluding that there was in fact an accepted agreement and, as such, the correspondence was admissible as evidence of that agreement.  However, the letter of 21 September 2012 goes on to say this:

    In saying this, given the position that has been adopted by the applicants, it would appear likely that this matter will remain unresolved. 

    We put you, and more particularly the applicants, on notice that our client will be asserting his position that he is entitled to a controlling interest in [P Pty Ltd] at trial. 

16. On the basis of the correspondence annexed to that affidavit, that what was contended by the respondents as being an offer was that involving only the third party and the respondents.  However, equally plain, is that what was proposed by the third party is an agreement involving all of the parties to the current dispute before me, including the applicants. That is to say, it seems to me that the letter of 21 September 2012 is not an acceptance of the offer but, rather, is a conditional counter-proposal that the terms as they are set out would be acceptable only if the applicants were also parties to any settlement agreement. 

17. Accordingly it seems to me that the correspondence is not evidence of a concluded agreement and that the correspondence is privileged. I reject the application for leave to rely upon the affidavit of Andrew Anthony George, filed 28 November 2012.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 3 December 2012.

Associate: 

Date:  11 December 2012