DOI v NSW Trustee and Guardian

[2018] NSWCATAD 206

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

DOI v NSW Trustee and Guardian [2018] NSWCATAD 206

Hearing dates:

29 August 2018

Date of orders:

04 September 2018

Decision date:

04 September 2018

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

Emeritus Prof. G D Walker, Senior Member

Decision:

By 14 September 2018 the respondent is to produce to the tribunal copies of all documents in respect of which it claims legal professional privilege in the present proceedings.

Catchwords:

TRUSTEE AND GUARDIAN - review of exercise of manager’s power – legal professional privilege – manner of claiming – whether advice purely on administrative matters – whether privilege lost or waived -- production of documents to tribunal for inspection.

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)
Civil and Administrative Tribunal Act 2013 (NSW)
Evidence Act 1995 (NSW)
NSW Trustee and Guardian Act 2009 (NSW).

Cases Cited:

Nash v Glennies Creek Coal Management Pty Ltd (No.6) [2014] NSW IRComm 36;
NRMA Ltd v Morgan (No. 2) [1999] NSWSC 694;
Talbot v NRMA Ltd [2000] NSWSC 602.

Category:

Procedural and other rulings

Parties:

DOI (Applicant)

  New South Wales Trustee and Guardian (Respondent)

Representation:

Applicant in person

 

Counsel:
Mr R M Higgins (Respondent)

  Solicitors:
Carroll & O’Dea (Respondent)

File Number(s):

2018/00219185

REASONS FOR DECISION

1. The applicant known as DOI for the purposes of these proceedings, applied to this tribunal on 17 July 2018 for review of a decision by the New South Wales Trustee and Guardian (commonly referred to as TAG) in its capacity as financial manager of the estate of his mother, Mrs A, aged 76 (for the purposes of anonymization and in the interests of convenience the persons involved will be referred to, with all due respect, by their first names).

2. The management of Mrs A's estate was committed to TAG by a financial management order made by the Guardianship Division of this tribunal on 30 September 2016. She is thus a protected person within the meaning of s 38 of the NSW Trustee and Guardian Act 2009 (TAG Act) and the applicant is her guardian and principal carer. She lives at home with her husband, who is also one of her carers, and the applicant.

3. As at 6 August 2014, Mrs A and her husband of 57 years, J****, were the registered proprietors as joint tenants of a property at **** Street, Bondi Junction. On 23 December 2016, the property was sold for $2 million (including a deposit of $200,000), Dibbs Barker, solicitors, acting for J.

4. It is common ground that this tribunal has jurisdiction to hear the current application for review of a decision made in connection with the exercise of the TAG’s functions as financial manager, by virtue of s 62 of the TAG Act, and that the applicant is an “affected person” and thus has standing under that provision to apply for the review. There is also no suggestion that the applicant is anything other than a dedicated and efficient carer who is giving his mother excellent full-time care.

5. As regards the other statements of fact recited below, it should be noted that so far the tribunal has heard only the respondent’s case, as the applicant maintains that he cannot prepare his own case without further information. Consequently, the tribunal is not in a position to make any findings of fact on potentially contentious matters and statements regarding facts and circumstances that are not admitted must be regarded as provisional assumptions.

6. On 2 December 2016, Dibbs Barker wrote to TAG, among other things proposing that the sale proceeds be divided 70:30 between J and Mrs A respectively. Then on 22 December Dibbs Barker wrote to TAG foreshadowing that the sale would be settled on 23 December and proposing that in the short term a provisional arrangement about the purchase money should be arrived at on the following terms:

1. 50 percent of the sale proceeds to be released to J;

2. 30 percent of the sale proceeds to be released to Mrs A (care of TAG); and

3. 20 percent of the sale proceeds to be held by TAG on behalf of J and Mrs A, pending resolution of the “split” of the sale proceeds.

7. TAG accepted that proposal. On or about 23 December, Dibbs Barker provided TAG with cheques for, among other things, Mrs A’s agreed provisional share and the portion to be held on trust by TAG. Cheques representing a similar division of the $200,000 deposit were also paid to TAG.

8. On 30 May 2017, TAG’s solicitors, Carroll & O’Dea, wrote to Dibbs Barker requesting documents and information to substantiate J’s contention that he should receive 70 percent of the sale proceeds. There followed an exchange of letters and emails repeating and responding to Carroll & O’Dea’s request for material to support J’s claim and noting that TAG had not yet received the requested information and documents. Some time around mid-2017, Dibbs Barker ceased to act for J and were replaced in that role by Lang Noonan, who informed Carroll and O’Dea that they had so far been unable to obtain the complete file and were therefore not in a position to comply with their request for particulars.

9. TAG’s primary position is that as a joint tenant, Mrs A is entitled to 50 percent of the total sale proceeds unless J is able to substantiate a greater entitlement for himself. The issue not having been resolved after a significant amount of correspondence, TAG took the view that it could not hold the 20 percent of the sale proceeds indefinitely, nor as financial manager could it “simply give Mrs A’s money away”.

10. Forming the view that further correspondence would not achieve a resolution of the split issue, Mr Gregory J Mackey, a senior legal officer with TAG, obtained legal advice and determined that commencing proceedings was the appropriate means of resolving the impasse. He considered consulting the applicant and any other interested persons about commencing proceedings, but decided that the proposed action was of such a nature that neither the applicant nor any of his relatives should be consulted and that no consultation was required. He considered the action was necessary to protect Mrs A’s financial interests.

11. Proceedings were accordingly commenced in the Equity division of the Supreme Court on 20 June 2018 (case No. 2018/190868), naming Mrs A and TAG as plaintiffs and J as defendant, seeking a declaration that Mrs A and J are entitled in equal shares to the sale proceeds and an order that the defendant provide a written direction to TAG to pay to Mrs A the money currently held by TAG pending resolution of the split of the sale proceeds.

12. The applicant challenges TAG’s decision to commence Supreme Court proceedings against his father, J. As a practical matter, as the proceedings are now on foot, his challenge is in effect to TAG’s action in continuing with the suit. It is not disputed that the decision is a reviewable decision.

13. TAG claims legal professional privilege (also known as client privilege) over the legal advice it obtained and other communications with Carroll & O’Dea. The present interlocutory application is a challenge by the applicant to that claim of privilege. The respondent’s case on the interlocutory point and the substantive issue was presented in the tribunal on 29 August, but the applicant maintains that he cannot prepare his own case on the substantive issue without access to the material over which TAG claims privilege. The substantive hearing has been adjourned part heard to 10 October 2018.

Applicable legislation

14. The administrator’s duty to lodge documents relevant to a tribunal review is set out in s 58 of the Administrative Decisions Review Act 1997 (ADR Act):

58   Duty of administrator to lodge material documents with Tribunal where decision reviewed

(1)  An administrator whose administratively reviewable decision is the subject of an application for review to the Tribunal must, within 28 days after receiving notice of the application, lodge with the Tribunal:

(a)  a copy of any statement of reasons given to the applicant under section 49 (or, if no such statement was given to the applicant, a statement of reasons setting out the matters referred to in section 49 (3)), and

(a1)  a copy of any statement of reasons for a decision in an internal review conducted in respect of the administratively reviewable decision, and

(b)  a copy of every document or part of a document that is in the possession, or under the control, of the administrator that the administrator considers to be relevant to the determination of the application by the Tribunal.

(2)  If the applicant has not been given a statement of reasons under section 49, the Tribunal may direct that a copy of the statement of reasons lodged with the Tribunal under subsection (1) (a) be given to the applicant within such period or periods as the Tribunal directs.

(3)  If the Tribunal or President considers that a party to the proceedings would or might suffer hardship if the period of 28 days provided by subsection (1) is not shortened or extended, the Tribunal or President may, at the request of the party, make an order directing that the copies referred to in that subsection be lodged with the Tribunal within such shorter or extended period as is specified in the order.

(4)  If the Tribunal or President considers that other particular documents (or that other documents included in a particular class of documents) may be relevant to the determination of the application, it may cause a notice in writing to be served on the administrator:

(a)  stating that the Tribunal or President is of that opinion, and

(b)  directing the administrator concerned to lodge with the Tribunal, before a date specified in the notice, a copy of each of those other documents that is in the possession, or under the control, of the administrator.

(5)  The principal registrar of the Tribunal is to grant reasonable access to the applicant in the proceedings to any copy of a document lodged under this section by an administrator. Reasonable access includes, but is not limited to, enabling the applicant to make a photocopy of a document during ordinary business hours.

(6)  If a party to proceedings before the Tribunal seeks a summons under the Civil and Administrative Tribunal Act 2013 against an administrator for the production of any document and a copy of that document has been lodged with the Tribunal under subsection (1) or (4), the Tribunal may (on such conditions as it considers appropriate) direct the principal registrar of the Tribunal to grant the party access to its copy of the document instead of issuing a summons if access to the document could lawfully be required by the issue of a summons.

(7)  Nothing in this section requires the disclosure of, or the granting of access to, any document (or a copy of a document) in contravention of any of the following:

(a)  an order made under section 59 (Objections to lodgment),

(b) an order made under section 64 (Tribunal may restrict disclosures concerning procedures) of the Civil and Administrative Tribunal Act 2013,

(c)  section 66 (Effect of Government Information (Public Access) Act 2009) or section 67 (Privileged documents) of the Civil and Administrative Tribunal Act 2013 (as applied by section 67 of this Act).

(8)  For the purposes of this section, a reference to a document in the possession of an administrator includes a reference to a document to which the administrator has an immediate right of access.

15. Under s 59 of the ADR Act, an administrator may seek a tribunal ruling on a claim for privilege:

59   Objections to lodgement

(1) An administrator may apply to the Tribunal before the expiry of the period referred to in section 58 (1) for an order that the administrator not be required to lodge a copy of a document under section 58.

(2)  On any such application, the Tribunal may make an order that a copy of a document not be lodged with the Tribunal if:

(a) it is satisfied that section 67 (Privileged documents) of the Civil and Administrative Tribunal Act 2013 (as applied by section 67 of this Act) operates so as not to require the disclosure of the document, or

(b) it considers that, if an application were made under section 64 (Tribunal may restrict disclosures concerning procedures) of the Civil and Administrative Tribunal Act 2013, it would be appropriate to make an order under that section prohibiting or restricting the publication or disclosure of evidence of the document.

16. Both the above sections refer to s 67 of the Civil and Administrative Tribunal Act (CAT Act) 2013:

67   Privileged documents

(1)  Nothing in this Act requires the disclosure of a document if the Tribunal or President is satisfied that evidence of the document could not be adduced in proceedings before a NSW court by reason of the operation of any of the following provisions of the Evidence Act 1995:

(a)  section 9 (Application of common law and equity), but only to the extent that it preserves any privilege against the adducing of evidence,

(b)  section 10 (Parliamentary privilege preserved),

(c) Part 3.10 (Privileges) of Chapter 3.

(2)  In this section:

disclosure of a document includes the following:

(a)  the provision of copies of the document,

(b)  the granting of access to the document,

(c)  the disclosure of the contents of the document.

document includes a part of a document.

NSW court has the same meaning as in the Evidence Act 1995.

Applicant’s submissions

17. The applicant’s letter to NCAT’s registrar dated 27 August 2018 (exhibit A1) outlines the applicant’s main lines of argument. In it he submits inter alia that Mr Mackey’s affidavit of 10 August 2018 makes it clear that the obtaining of legal advice was crucial in the respondent’s decision to institute proceedings. To assess the merits of its decision, it is necessary to consider the advice on which it was based. When he had asked Carroll & O’Dea for the advice (which he had not received), they had replied that all communications between solicitor and client are protected by legal professional privilege. The applicant had rejoined that such communications are not always protected because there are many qualifications to the principle.

18. Further, the respondent had made no claim of privilege for the advice when it was mentioned in the bundle of documents that were supplied. It was not until 35 days after TAG had received notice of the application that Carroll & O’Dea had written to him claiming privilege. But claiming privilege did not in itself confer immunity, nor did the simple application of the label “legal advice” to a document or item of information do so.

19. Further, privilege was not automatic and had to be claimed. Section 59 of the ADR Act makes specific provision for an administrator whose decision is under review to rely on legal privilege, but only if the administrator applies to the tribunal within 28 days after receiving notice of the application (for an order that the administrator not be required to lodge a copy of a document under s 58). But the respondent had never made such an application. the applicant therefore submitted that for the purposes of the present merits review by the tribunal, the respondent did not obtain privilege for the legal advice. As the advice was the basis of Mr Mackey’s decision, his decision could not be reviewed if the advice were not produced.

20. Not all legal advice was privileged, nor was all advice by a lawyer necessarily legal advice. It could have been for the purposes of the respondent’s administration of his mother’s estate, in which case it would not constitute legal advice. The question therefore arose as to which part of the advice, if any, was legal advice attracting privilege. It might have been for some other purpose, such as administrative or operational purposes, and therefore not entitled to legal privilege.

21. Again, if when the advice was sought there was no intent to commence proceedings or no contemplation of doing so, then the advice might well have been for purposes other than legal purposes. Furthermore, is the fact that when the legal advice was obtained itself privileged? That raised the question of whether the act of obtaining legal advice was itself also privileged. The date when the advice was sought was also relevant for the purpose of assessing the decision to commence proceedings.

22. In assessing the claim of privilege, certain questions needed to be answered:

1. In whose interests was the advice sought – the respondent’s or Mrs A’s?

2. What was the purpose of obtaining the advice?

3. What was the reasoning in the advice that led Mr Mackey to his decision to commence proceedings?

4. Who gave the advice?

5. Was the advice given in-house or by an external lawyer? If in-house, it was more likely that the advice was sought for operational or administrative purposes.

23. Finally, the applicant also submitted that the combined effect of ss 122(1), 126 and 121(3) of the Evidence Act 1995 was to entitle him to adduce evidence of the contents of the advice obtained by Mr Mackey.

24. In his oral submissions at the hearing the applicant reiterated those points and stressed that s 59 of the ADR Act is a specific provision which refers to s 58 only for the purposes of setting the timeframe. As the respondent had not complied with it, a claim of privilege could not succeed. The legal advice being the basis of the decision, there could be no review without it. Mr Mackey’s affidavit contained no documentation relating to the risks, costs or other factors relevant to the commencement of the proceedings. It was over-simplistic, as litigation in the Supreme Court could involve costs of $200,000. His parents had been a happily married couple for 57 years and it was unseemly for them to be placed in the position of suing each other.

25. The only record of the decision was the file note of 4 January 2018, which was 12 months after the sale, not 18 months as the respondent had stated. When such a substantial sum of money was at stake, much more documentation was needed if the respondent was to satisfy its statutory audit obligations. There could be no guarantee of success in the Supreme Court, but no options other than litigation had been considered. Logically there would have had to have been more than one advice.

26. Even if privilege had existed, by reason of ss 121 to 126 of the Evidence Act, it had been lost because of consent to disclosure, the disclosure of related communications, the effect of there being joint clients and because non-disclosure affected the right of a person (in this case the applicant’s right to an administrative review). Because the same solicitors had been acting in three different roles, the respondent was fighting to prevent release of the documents in order to conceal the conflict involved.

Consideration

27. The first matter to consider is the applicant’s submission that an administrator can claim legal professional privilege only if it has applied to the tribunal for an order under s 59 of the ADR Act within 28 days after receiving notice of the application for review and the tribunal has made an order under s 59(2). As TAG had not so applied, it was not entitled to privilege for the documents in question. Neither party having referred to any authorities dealing with the relationship between the two sections, the point appears to be a case of first impression. The parliamentary explanatory notes shed no light on the matter.

28. As client privilege is regarded as a fundamental support for the adversarial system (or for an inquisitorial system for that matter), that would be a somewhat surprising result. It could mean, for example, that if a legal opinion were to come to light while a trial or hearing was in progress, it would by then be too late to claim privilege for it.

29. The language of the provisions itself affords little support for the applicant’s position. It will be noticed that s 59 is not expressed in imperative terms, but states that an administrator “may” apply for an order and does not purport to exclude any other means of claiming privilege.

27. More significant is the fact that both ADR Act provisions turn on the application of s 67, the privileged documents provision of the CAT Act. In s 59 it is the basis of the tribunal’s power to make an order, and in s 58(7) it is the basis of the exemption from disclosure, an arrangement that suggests that the two provisions are intended to confer privilege independently. The applicant submitted that the reference to s 58(1) in s 59(1) was purely for the purpose of setting the timeframe, but even if that were so, it would not mean that s 59 was intended to be the exclusive method of establishing privilege.

28. Furthermore, s 58(7) designates an order made under s 59 as being only one of three possible bases on which a document can be exempted from disclosure, another being s 67 of the CAT Act. That section exempts from disclosure any document that would be privileged before a New South Wales court by reason of, relevantly, part 3.10 (Privileges) of Chapter 3 of the Evidence Act. Part 3.10 includes ss 118 and 119, the provisions that give statutory force to legal professional privilege.

29. In other words, s 58 contemplates that an order under s 59 is not the only way in which a document can receive privilege; it is only one of three ways, another being the applicability of ss 118 or 119 of the Evidence Act. Consequently, it is not necessary for an administrator to apply for privilege under s 59, though it may be convenient to do so if there is potentially a dispute about whether or not client privilege applies. TAG is therefore entitled to make a claim for privilege in this case.

30. The applicant’s other line of argument is that even if the respondent originally had a sound claim for privilege, it had waived or otherwise lost it by reason of one or more of ss 121 to 126 of the Evidence Act. He submits, first, that s 121(3) makes the documents admissible because they affect “a right of a person”, in this case his own right to obtain a fully-informed review of the decision in question. The authorities do not support that proposition. In Talbot v NRMA Ltd [2000] NSWSC 602, [3], for example, Hodgson CJ in Eq observed:

In my opinion, [the words “affects the right of a person”] cannot mean a communication or document that is relevant to a right of a person because that would virtually eliminate the legal professional privilege as a ground for non-admission of evidence. In my opinion, that must mean a communication or document that affects in some fairly direct way what are the actual rights and perhaps also duties of a person.

34. Next, the applicant submitted that privilege had been lost because the respondent had consented to the adducing of the evidence within s 122(1), inter alia by revealing that it had obtained a legal opinion. But revealing that legal advice has been received does not normally constitute deployment of the substance of the legal advice for a forensic or commercial purpose: Nash v Glennies Creek Coal Management Pty Ltd (No. 6) [2014] NSWIRComm 36, [92] – [106].

35. Again, a mere reference to the existence of legal advice will not amount to disclosure. The words “I instructed counsel to advise on this liability” have been held not to result in a loss of privilege under s 122(3) because they “said no more than what it would have been necessary to say in order to claim client legal privilege”: NRMA Ltd v Morgan (No. 2) [1999] NSWSC 694, [9]. In that case Giles J continued (at [16]):

[I]n any event, his words did no more than indicate that there existed a confidential communication between himself and counsel on the subject of advising on the liability and did not, in my opinion, disclose the substance of the communication”.

36. The applicant also sought to rely on s 124, which permits a party to adduce evidence of communications with a lawyer, or the contents of a confidential document, where, before the commencement of the proceeding, the party had jointly retained a lawyer in relation to the same matter. He pointed out that he has been his mother’s confidant for 20 years and that Carroll & O’Dea are acting both for Mrs A .and for TAG. That is not a sufficient basis for the application of s 124, however. In the present proceedings the applicant has not had a joint lawyer with Mrs A. Nor has he ever been a client of Carroll & O’Dea.

37. In view of the conclusions I have reached above, s 126 cannot apply in the present circumstances either. Further, the applicant’s proposition that the advice given might have related purely to administrative and operational matters rather than legal matters, and might thus not constitute legal advice for the purposes of ss 118 and 119, is purely speculative. I therefore conclude that the respondent has not waived or lost client privilege and is not precluded by s 59 of the ADR Act from claiming it now.

38. That does not, however, settle the question of whether the documents the respondent has declined to produce are in fact covered by client privilege.

39. It is quite common for courts and tribunals to accept a claim of legal professional privilege on the basis of the evidence before them, but without actually inspecting the documents themselves. In the present case, I do not think that would be an appropriate course of action. the applicant has maintained strongly throughout the proceedings that the legal opinion was manifestly crucial to the respondent’s decision to institute proceedings against J. He argues emphatically that he cannot prepare his case for review of the decision without acquainting himself with the contents of the legal opinion.

40. The law relating to privilege does not recognize the intensity of a party’s desire for access to documents as a ground for treating client privilege as non-existent or lost. Nevertheless, in the circumstances of this case, for the tribunal to decide the question of privilege without itself seeing the documents to which the claim relates might not be consistent with the objects of the CAT Act as set out in s 3, notably s 3(g), “to promote public confidence in tribunal decision-making in the State….” Under s 38(5) the tribunal also has a duty “to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings”. It must also “ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings”: s 38(6)(a).

41. I will therefore direct that the respondent produce all documents in respect of which it claims legal professional privilege to the tribunal in order to permit the tribunal to determine the question. Section 67(1)(c) of the CAT Act adopts the privileges provisions of part 3.10 of chapter 3 of the Evidence Act. Part 3.10 includes s 133, which states that “If a question arises under this Part relating to a document, the court may order that the document be produced to it and may inspect the documents for the purpose of determining the question”. Section 67(1)(c) may have the effect of adopting s 133 as well as ss 118 and 119. Alternatively, s 38(1) of the CAT Act, which gives the tribunal the power to determine its own procedure, would authorize the tribunal to make such an order.

42. After inspecting the documents in question, I would propose to proceed to decide the interlocutory issue on the papers. Until then, the interlocutory application stands adjourned.

Order

43. By 14 September 2018 the respondent is to produce to the tribunal copies of all documents in respect of which it claims legal professional privilege in the present proceedings.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Amendments

04 September 2018 - Anonymization corrected

Decision last updated: 04 September 2018