Dianne Twigg v Maxwell James Twigg (Privilege ruling)

[2021] NSWSC 595

Supreme Court

New South Wales

Medium Neutral Citation:

Dianne Twigg v Maxwell James Twigg (Privilege ruling) [2021] NSWSC 595

Hearing dates:

19, 26 May 2021

Decision date:

26 May 2021

Jurisdiction:

Equity - Commercial List

Before:

Hammerschlag J

Decision:

Rulings made – see paras [22]-[47]

Catchwords:

PRIVILEGE – Rulings on claims for privilege – No issue of principle

Legislation Cited:

Evidence Act 1995 (NSW)

Cases Cited:

Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) [2020] NSWSC 1159

Twigg v Twigg (No 5); Lambert v Twigg Investments; Pty Ltd (No 4) [2020] NSWSC 1782

Category:

Procedural rulings

Parties:

Diane Twigg - First Plaintiff/First Cross Defendant
Ipswich Landfill Pty Ltd atf Ipswich Landfill Trust - Second Plaintiff/Second Cross Defendant
Brooklyn Landfill & Waste Recycling Pty Ltd - Third Plaintiff/Third Cross Defendant
Twigg Plant Hire Pty Ltd - Fourth Plaintiff/Fourth Cross Defendant
Maxwell James Twigg - First Defendant/Fifth Cross Defendant
Twigg Landfill Pty Ltd - Second Defendant/Sixth Cross Defendant
Byron Bay Beach Hotel Properties Pty Ltd - Third Defendant/Seventh Cross Defendant
Twigg Consulting Pty Ltd - Fourth Defendant/Eighth Cross Defendant
B Bay H Pty Ltd - Fifth Defendant/Ninth Cross Defendant
Twigg Investments Pty Ltd - Sixth Defendant/Tenth Cross Defendant
Maly Holdings Pty Ltd - Seventh Defendant/Eleventh Cross Defendant
Twigg Property Development Pty Ltd - Eighth Defendant/Twelfth Cross Defendant
Twigg Motor Sport Pty Ltd - Ninth Defendant/Thirteenth Cross Defendant
Vision Motor Sport Pty Ltd - Tenth Defendant/Fourteenth Cross Defendant
Twigg Motor Racing Pty Ltd - Eleventh Defendant/Fifteenth Cross Defendant
Surf Street Holdings Pty Ltd - Twelfth Defendant/Sixteenth Cross Defendant
W & E Twigg Pty Ltd - Thirteenth Defendant/Seventeenth Cross Defendant
Frances Lambert - Fourteenth Defendant/Cross-Claimant
Twigg Co Pty Limited - Fifteenth Defendant

Representation:

Counsel:

M R Elliott SC - Plaintiffs/First to Fourth Cross Defendants
P Miller - First to Thirteenth and Fifteenth Defendants/Fifth to Seventeenth Cross Defendants

Solicitors:
Roberts and Partners Lawyers - Plaintiffs/First to Fourth Cross Defendants
O’Loughlin Westhoff - First to Thirteenth and Fifteenth Defendants/Fifth to Seventeenth Cross Defendants

File Number(s):

2019/71329

EX TEMPORE Judgment

1. The principal judgment in these proceedings was handed down by Ball J on 31 August 2020: Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) [2020] NSWSC 1159 (the principal judgment). His Honour found that the plaintiffs had established that the first defendant (Max Twigg) had breached his fiduciary duties to them by paying the proceeds of sale of the Twigg Group business to himself or entities controlled by him, and that, to the extent the plaintiffs could trace the proceeds of sale to assets still held by the defendants, they were held on constructive trust for the plaintiffs.

2. The principal judgment was preceded by orders made by his Honour on 3 June 2020 restraining the defendants from dealing with, amongst others, “funds deposited into bank accounts” in the name of the fifteenth defendant, Twigg Co Pty Limited (Twigg Co) up to the sum of $2.593 million. These orders were amended on 30 June 2020 to increase the figure to $3.844 million.

3. On 11 December 2020, his Honour acceded to an application made by the plaintiffs by motion filed on 30 October 2020 to reopen for the purposes of varying his Honour’s reasons to find that certain assets (being a series of unlisted Australian Notes) not dealt with in the principal judgment comprised traceable proceeds: Twigg v Twigg (No 5); Lambert v Twigg Investments; Pty Ltd (No 4) [2020] NSWSC 1782.

4. The motion was listed for hearing on 7 December 2020. On 1 December 2020, a series of liquid assets consisting of interest-bearing Floating Rate Notes (the Notes) were transferred out of Twigg Co to Max Twigg.

5. It appears that on 14 December 2020, Max Twigg liquidated two of the Notes notwithstanding his Honour’s principal judgment three days earlier. It does not seem to be in issue that the defendants did not inform the plaintiffs that the Notes had been transferred or liquidated.

6. On 18 December 2020, Ball J made final orders, including orders that Twigg Co held the Notes on constructive trust for the plaintiffs.

7. The defendants have appealed the principal judgment. The appeal has been heard and the Court of Appeal is presently reserved.

8. On 2 February 2021, Payne JA dealt with an application by the defendants for a stay of the principal judgment. On 12 April 2021, his Honour made orders by consent compelling the defendants to produce documents.

9. Documents have been produced.

10. Amongst others, they reveal that the Notes (which have been held to the be the property of the plaintiffs) were apparently transferred out of Twigg Co to or for the benefit of Max Twigg personally on 1 December 2020.

11. The defendants claim privilege over some of the documents, relying for the most part on s 119 of the Evidence Act 1995 (NSW) (the Act), which provides:

119    Litigation

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.

12. In respect of two documents, they rely on s 118 of the Act, which provides:

118   Legal advice

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.

13. By motion filed by the plaintiffs on 21 April 2021, they seek orders that the defendants do not transfer, dispose of, or otherwise deal with the Notes. The motion is returnable before Ball J for directions on 28 May 2021.

14. The parties are agreed that a Judge other than Ball J, who is seized with what remains of these proceedings at first instance, should determine whether the documents claimed to be privileged by the defendants are prima facie privileged (that is, before considering whether they are subject to any exception such as waiver).

15. On 30 April 2021, Ball J made certain orders to facilitate that determination.

16. The Court has been provided with unredacted versions of the documents, which I have examined, and the parties provided me with written submissions. The plaintiffs’ ability to make submissions is of course limited.

17. Save in respect of the two documents where s 118 of the Act is relied upon, the sole question is whether the documents were prepared for the dominant purpose of the client being provided with professional legal services relating to the proceedings.

18. Mr Christiaan Roberts (Roberts) is the plaintiffs’ solicitor. Mr Corey Radcliff (Radcliff) is the defendants’ solicitor. Radcliff practises in Queensland. The defendants also have Sydney solicitors. Pitcher Partners is a firm of accountants who have at all material times been retained by the defendants. Adam Stanley (Stanley) is an executive director of Pitcher Partners. Alex King (King) is a member of Pitcher Partners.

19. The following affidavits were read on the application:

1. Radcliff sworn 28 April 2021 and 20 May 2021; and

2. Roberts sworn 20 April 2021.

20. Counsel for the plaintiffs submitted that the Radcliff affidavits do not prove that the documents are privileged and that the Court should reject the claim without inspecting the documents. The submission that the affidavits do not in themselves sufficiently establish privilege is not without substance, but I nevertheless consider that it is appropriate, given that the documents have been produced, to rule on them, having regard to, rather than irrespective of, their contents, especially given the nature of the general controversy between these parties.

21. The documents have been put in chronological sequence and have been paginated from pages 1 to 28. The Court has inspected the documents for the purpose of ruling on their status. [1] The following are my rulings:

Email from Radcliff to Stanley dated 18 November 2020 (page 1)

1. See Evidence Act 1995 (NSW), s 133.

22. I am satisfied that part of this document was prepared for the dominant purpose of Max Twigg being provided professional legal services in relation to the proceedings, but not all of it. The email comprises two paragraphs. The second paragraph comprises a chapeau and three sub-paragraphs numbered (a), (b), and (c).

23. Sub-paragraph (a) satisfies s 119 of the Act as having been prepared for the purposes of providing professional legal services, but not sub-paragraphs (b) and (c) which, notwithstanding the introductory paragraph and the chapeau (which are self-serving), were prepared for the provision of professional financial services, not legal services. It follows that evidence of the introductory paragraph, the chapeau to the second paragraph, and sub-paragraphs (b) and (c) (but not (a)) may be adduced.

Email from Radcliff to Stanley dated 19 November 2020 (pages 2 to 4)

24. Page 2 includes the above email, plus part of an order made by Ball J on 30 June 2020. Page 3 includes the remainder of the order. Page 4 is an email from Radcliff to the defendants’ Sydney solicitors asking for a copy of the order.

25. The first email comprises two paragraphs.

26. In my view, the first paragraph satisfies s 119 but not the second. The second was not prepared for the purposes of providing professional legal services.

27. The request for the order and the orders are pertinent to the first paragraph and those documents are therefore privileged.

Email from Radcliff to Stanley dated 19 November 2020 (pages 5 to 8)

28. Page 5 is an email from Radcliff to Stanley with a copy to Max Twigg dated 19 November 2020. The subject line is “Legal Professional Privilege Claimed – Twigg v Twigg”.

29. In my view, the first sentence of the email satisfies either s 118 or s 119 or both. The remainder of the email was not prepared for the purposes of providing professional legal services, but once again, financial services.

30. Pages 6 and 7 are documents apparently intended to record “Actual Asset Allocation” for Twigg Co’s portfolio. They are dated 21 October 2020 and are attached the 19 November 2020 email.

31. They are pertinent to the non-privileged part of that email and are themselves not privileged.

32. Page 8 states the name of a law practice trust account and its account numbers. No privilege with respect to this page has been established.

Email from Stanley to Max Twigg dated 19 November 2020 (pages 9 to 11)

33. Page 9 includes an email from Stanley to Max Twigg copied to Radcliff. It is a request for confirmation to transfer money from one account to another. It is not privileged.

34. This page also includes the earlier email of two paragraphs on page 2 to which the ruling with respect to that document applies.

35. Pages 10 and 11 are duplicates of the documents on part of pages 2 and 3 (the orders) and page 4 (the request) and are subject to the ruling with respect to those pages.

Email from Radcliff to Stanley dated 20 November 2020 (pages 12 to 18)

36. Page 12 is an email from Radcliff to Stanley attaching the orders made by the Court on 20 November 2020. The orders appear from pages 14 to 18. Page 13 is blank.

37. I am satisfied that these documents (including the copy of the orders attached) were prepared for the dominant purpose of providing professional legal services relating to the proceedings and are privileged.

Email from Stanley to Max Twigg dated 25 November 2020 (pages 19 and 20)

38. Page 19 is an email from Stanley to Max Twigg dated 25 November 2020, copied to Radcliff.

39. I am not satisfied that the defendants have established that this document was created for the dominant purpose of providing professional legal services, as opposed to professional financial services, given that it was written by an accountant, not by a lawyer. Separately, it includes recording a request to prepare off-market transfers of fixed-interest investments, being property of Twigg Co to Max Twigg personally, which recording was not prepared for the purposes of the provision of legal services.

40. Part of page 19 and page 20 include the 20 November 2020 orders. This copy is not privileged.

Email from Radcliff to Alex King dated 1 December 2020 (pages 21 to 23)

41. Page 21 is an email from Radcliff to King dated 1 December 2020. It refers to an email from Jonathan O’Loughlin of the defendants’ Sydney solicitors and an email from Radcliff to O’Loughlin.    

42. Each of these documents satisfies s 118 of the Act. They include a copy of the 30 June 2020 orders on page 23, which copy also attracts privilege.

Email from Radcliff to Stanley and Max Twigg dated 1 December 2020 (pages 24 to 26)

43. Page 24 includes an email from Radcliff to Stanley and Max Twigg dated 1 December 2020.

44. It is not established that this document was prepared for the dominant purpose of the provision of professional legal services.

45. Parts of pages 24, 25, and 26 are duplicates of pages 19 and 20, which are covered by rulings above.

Email from Max Twigg to Stanley dated 1 December 2020 (pages 27 to 28)

46. Page 27 includes an email from Max Twigg to Stanley dated 1 December 2020 authorising him to complete a transaction as his agent and deposit the sale proceeds to his solicitor’s trust account. This was not prepared for the dominant purpose of being provided with professional legal services and it is not privileged.

47. Part of pages 27 and 28 are a duplicate of pages 19 and 20, which are covered by earlier rulings.

CONCLUSION

48. I record that I invited the defendants to make submissions on whether, even if certain of the documents might otherwise be privileged, s 121(2) of the Act applied. I received a written submission from them dated 26 May 2021.

49. I have concluded that the section does not apply. Whilst there is a live issue as to whether the defendants have breached the Court’s orders, non-disclosure of the documents will not preclude the Court from enforcing its orders.

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Endnote

Decision last updated: 26 May 2021