Elvin v Vuleta

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Elvin v Vuleta
Citation:	[2024] ACTSC 84
Hearing Date:	12 March 2024
Decision Date:	28 March 2024
Before:	McWilliam J
Decision:	(1) Within 7 days of the date of these orders being made, the first defendant is to provide to the second and third defendants a copy (electronic or otherwise) of the remaining documents over which privilege continues to be maintained. (2) The second and third defendants are to confirm whether they maintain their objection to the discovery of any, or all, of the documents referred to in Order 1 on the grounds of client legal privilege within 7 days of their receipt. (3) The applications filed by the plaintiff on 30 January 2024, 27 February 2024 and 1 March 2024 in relation to discovery and particulars are otherwise dismissed. (4) Costs of the applications are reserved.
Catchwords:	EVIDENCE – PRIVILEGES – Legal professional privilege – Evidence Act 2011 (ACT) – pre-trial discovery – whether litigation or advice privilege attaches PRACTICE & PROCEDURE – PLEADINGS – Defences – denial of allegations – whether better particulars required
Legislation Cited:	Court Procedures Rules 2006 (ACT) rr 406(1), 407, 409, 430, 434, 441, 447(1), 606, 608, 609, 609(4), 610, 621(2)(b), 621(2)(e), 621(3) Evidence Act 2011 (ACT) Div 3.10.1, ss 117(1), 118, 119, 122, 122(1), 122(2), 122(5)(b), 122(5)(c), 125, 126, 131A
Cases Cited:	Attorney-General (NT) v Kearney (1985) 158 CLR 500 AWB Limited v Cole (No 5) [2006] FCA 1234; 155 FCR 30 Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Commissioner of Taxation (Cth) v Spotless Services Limited (1996) 186 CLR 404 Commonwealth v Vance [2005] ACTCA 35; 158 ACTR 47 Franks v Warringah Council [2010] NSWSC 1318 GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266 Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305; 339 ALR 635 Ingot Capital Investments Pty Ltd v Macquarie Equity [2008] NSWSC 25 Mann v Carnell [1999] HCA 66; 201 CLR 1 Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118; 58 VR 333
Parties:	C Elvin ( Plaintiff) S Vuleta (First Defendant) E Senatore (Second Defendant) N Cussen (Third Defendant)
Representation:	Counsel Self-Represented ( Plaintiff) V Huntington (First Defendant) J Larkings (Second and Third Defendant)
Solicitors Self-Represented ( Plaintiff) Sparke Helmore Lawyers (First Defendant) Johnson Winter & Slattery (Second and Third Defendant)
File Number:	SC 215 of 2022

McWILLIAM J:

1․The proceeding before the Court is listed for hearing of a claim for breach of statutory duty, unconscionable conduct, conspiracy and professional negligence in April 2024.
2․The plaintiff is the former director of a company that entered into voluntary administration on 15 December 2015. The first defendant, Mr Stipe Vuleta, is a solicitor at Chamberlains Law Firm (CLF) who provided advice to the administrators in relation to the administration. The plaintiff alleges that Mr Vuleta also provided advice to him before the company entered into administration. Messrs Senatore and Cussen, the second and third defendants, were the administrators appointed (collectively, the Administrators).
3․By way of broad overview, the plaintiff alleges he has suffered various losses arising from:
(a)the advice he received from Mr Vuleta;
(b)the conduct of the defendants, which he says was both unconscionable and was a conspiracy to generate work for themselves;
(c)the conduct of the administration, which included the business not being sold as a going concern; and
(d)losses arising from subsequent action against the company and himself personally taken in the Federal Court of Australia by the Fair Work Ombudsman (FWO), which resulted in a judgment against the plaintiff personally.

The applications for determination

4․In preparing for trial, the plaintiff has brought two applications in proceedings. The first was filed on 27 February 2024. It is a challenge to a claim at the discovery stage for legal professional privilege made by the first defendant, on behalf of the Administrators as the former client, over a bundle of 95 documents (Privilege Application).
5․A separate application regarding a similar challenge to the claim for privilege was filed by the plaintiff on 30 January 2024 and was also formally before the Court, but it was largely overtaken by the subsequent Privilege Application which was limited to the first defendant’s discovered documents, after the second and third defendants waived privilege in respect of documents to be discovered by them.
6․The documents over which privilege is claimed are contained in Part Two of the first defendant’s Amended List of Documents for discovery, filed 27 February 2024. The dispute also includes three documents over which privilege was partially waived. The plaintiff has been provided with redacted copies of those documents and challenges the claim for privilege over the parts that have been redacted.
7․The second application was filed on 1 March 2024. It concerns the “Defence of the Second and Third Defendants to the Second Amended Statement of Claim filed 21 December 2023”, which was filed by the Administrators on 30 January 2024 (Defence). Pursuant to r 434 of the Court Procedures Rules 2006 (ACT) (Rules), the plaintiff seeks better particulars to certain paragraphs of the Defence (Particulars Application).

The Court’s power to decide the Privilege Application

8․The Court has the power to decide a dispute about whether a document is privileged, upon application by either the party making the claim for privilege or the party challenging the claim: r 609(4) of the Rules.
9․The rule operates in the context of a regime for discovery between the parties. A document is privileged from production if evidence of it could not be adduced over objection because of the Evidence Act 2011 (ACT) (Evidence Act): r 601 of the Rules.
10․That rule serves s 131A of the Evidence Act, which applies the statutory provisions in Div 3.10.1 dealing with client legal privilege to disclosure requirements, including pre-trial discovery. In this way, the Territory scheme achieves a single consistent application of the law dealing with privilege, regardless of whether the dispute over privilege arises at the trial or pre-trial stage.
11․Rule 606 of the Rules enables the Court to make various orders, either requiring disclosure, or ordering non-disclosure, of any discoverable document in the party's possession, as well as providing for the Court to make any other order about disclosure or non-disclosure of documents that the Court considers appropriate.
12․The Court may inspect a document to decide whether it ought to be disclosed: rr 606(5) and 621(2)(b) of the Rules. Both parties acceded to this course.

Privilege Application – does privilege attach to the documents?

13․The documents in dispute are in the possession of the first defendant (being the solicitor), who has objected to their discovery upon confirmation of the objection by their former clients, the second and third defendants (the Administrators).
14․The statutory regime provides that, upon discretionary objection by the client, evidence must not be “presented” if it falls within one of the recognised categories of privilege under the Act. Here, the Court is concerned with the categories of legal advice and litigation privilege under ss 118 and 119 of the Evidence Act.

Applicable statutory provisions

15․The relevant sections relating to legal advice and litigation privilege are as follows (emphasis added):
118Legal advice
Evidence must not be presented if, on objection by a client, the court finds that presenting 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 someone else;

for the dominant purpose of the lawyer, or 1 or more of the lawyers, providing legal advice to the client.
119Litigation
Evidence must not be presented if, on objection by a client, the court finds that presenting the evidence would result in disclosure of—
(a)a confidential communication between the client and someone else, or between a lawyer acting for the client and someone else, 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.

Definitions of statutory terms

16․The above sections refer to a ‘client’, which is defined in s 117(1) of the Evidence Act. Relevant to the present dispute, it includes an entity that engages a lawyer to provide legal services or that employs a lawyer (including under a contract of service), an employee of a client, or an employee or agent of a client.
17․Thus (and relevant to the documents disputed in the present proceeding), an in-house counsel providing legal advice to their employer falls within the definition: Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 510. It is not necessary that an in-house counsel possess a current practising certificate: Commonwealth v Vance [2005] ACTCA 35; 158 ACTR 47 at [20]-[22].
18․The definition of ‘confidential communication’ under the Evidence Act makes clear that a relevant relationship of confidence must exist between the parties who are communicating, but only one of the participants is under an express or implied obligation not to disclose its contents, and such obligation does not have to be legal. In Ingot Capital Investments Pty Ltd v Macquarie Equity [2008] NSWSC 25 (Ingot), Campbell JA gave the following example (referring to the statutory analogue in NSW) at [23] (emphasis added):
Under the definition of “confidential communication” in the Evidence Act it is not necessary for the relevant relationship of confidence to be one that exists between the parties to the communication. It is sufficient if only one of them is under an obligation of confidence in relation to that communication. For example, if a solicitor were to discuss with a potential witness the evidence that that witness could give, the solicitor would clearly be under an obligation of confidence to his client concerning the contents of the discussion. That is sufficient to make it a “confidential communication” within the Act, even though the potential witness might be free to discuss with anyone he chooses the contents of his conversation with the solicitor.
19․Similarly, and given the submissions made by the parties below, an important aspect about both advice privilege and litigation privilege under ss 118 and 119 of the Evidence Act is that the privilege or immunity protects confidential communications as well as confidential documents. A document may not be confidential of itself, such as a publicly available document. However, if it is attached to an email that is a ‘confidential communication’ prepared for the dominant purpose of legal advice or litigation, then that copy of the document becomes part of the confidential communication, regardless of whether it might be obtained via a different source: see Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 507-509.
20․A confidential document or confidential communication will have the provision of legal advice or the use in litigation as its ‘dominant purpose’ if that was the prevailing or most influential purpose: Commissioner of Taxation (Cth) v Spotless Services Limited (1996) 186 CLR 404 at 416. The assessment is objective: Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 at [2]. It is significant here that the discovered documents over which privilege is claimed are all contained on the file of the solicitor who was engaged to advise the Administrators. Matters to consider (non-exhaustively) include the intended use of the document which accounted for it being brought into existence, and this may gleaned not only from the contents of the document itself, but who authored it or who procured its creation, and if it was sent, who sent it and the recipient. See for example, the discussion in Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305; 339 ALR 635 at [12] citing AWB Limited v Cole (No 5) [2006] FCA 1234; 155 FCR 30 at [44].

The parties’ arguments

21․The first defendant’s claim for privilege was set out in a table, describing each document, who the communication was sent to, and who received it, supported by an affidavit sworn by the solicitor with daily carriage of the matter on behalf of the first defendant, Ms Victoria Huntington. I have incorporated parts of that table as an attachment to these reasons which contain the rulings (Attachment 1).
22․The plaintiff made a number of complaints about why the claim for privilege was not justified. I will deal with each of them in turn.

Non-compliance with the Rules

23․The plaintiff raised r 608 of the Rules, implicitly if not expressly arguing a failure to comply with the rule, insofar as there was a requirement for the nature of the claim for privilege to be clearly described.
24․Rule 610 of the Rules provides that if a party does not comply with the requirements of r 608 in relation to the list of documents over which privilege is claimed, or those in r 609 in relation to the filing and serving of an affidavit stating the claim once a challenge is made, then privilege is taken to be waived by the party.
25․The list of documents filed by the plaintiff described the claim for privilege made in respect of certain documents using the common law terminology of a claim for “legal professional privilege”.
26․So described, the claim does provide the necessary details in order to substantively comply with the requirements of the Rules. However, given that in the Territory, the legislative scheme applies the Evidence Act to discovery procedures, it may assist an opponent (particularly where the opponent is self-represented) to understand the basis of the claim if the specific terms of the statute are used, namely litigation privilege, or advice privilege. The more general descriptor appears to have created some confusion here.

The privilege was for the second and third defendants to prove

27․There were two parts to this submission. The first was that the privilege claimed was properly that of the client, and it was therefore for the Administrators to prove that the claim was justified, not the solicitor who possessed the disputed documents and who was called upon to discover them.
28․The plaintiff is partially correct, in that under ss 118 and 119 of the Evidence Act, the objection to production is for the client to make and here, the clients were the Administrators. However, the evidence established that the Administrators have objected. It then falls to the party called upon to discover the documents, being the first defendant, to explain why he is not producing them.
29․The second part of the plaintiff’s submission was that the second and third defendants have waived the privilege they were entitled to claim in respect of the documents to be produced by them. He submitted that in those circumstances, the maintenance of the first defendant’s privilege claim was not justifiable.
30․To the extent that the same items are contained in the discovery lists for both the sender and the receiver of the confidential communication, there is some force in the plaintiff’s complaint that a claim for privilege over a document should not be maintained by the lawyer if the client, who is also a party to the proceedings, is prepared to waive the entirety of their claim for privilege over the documents in their possession.
31․However, the evidence before the Court is that the disputed documents are different from those over which the Administrators waived privilege.
32․Following the waiver of privilege by the Administrators in respect of documents held by them, Ms Huntington for the first defendant wrote to the solicitor for the Administrators and sought clarification of whether the Administrators maintained their objection. To the extent that there was overlap with the documents discovered by the Administrators, a small bundle of documents was released. Otherwise, Ms Huntington received confirmation that the Administrators continued to maintain any such privilege to which they were entitled.
33․Having reviewed the documents over which objection was maintained, I am concerned that the reply given by the lawyer for the Administrators was a general position of principle. It was not one that was made with any conscious reference to the specific documents in question, nor was it one that intellectually engaged with the substance of the discretionary waiver that had recently been made by his clients. The blanket objection to discovery appears to have resulted in some anomalies, which may not have been the Administrators’ intention.
34․The Court has the power under r 621(2)(e) of the Rules to make any order about production of documents that it considers appropriate. The Court must have regard to a number of matters specified in r 621(3) of the Rules, one of which is the ‘likely time, cost and inconvenience of producing documents or particular documents’. Relevantly here, the bundle of documents in dispute is confined and easily manageable in terms of the time that will be necessary to review them. Given the way that the privilege dispute has evolved and the pragmatic approach taken by the Administrators, I will make a direction that is intended to be consistent with the position taken by the Administrators, and in no way critical of the principled approach that has been taken to date in respect of the first defendants’ list of documents. I will direct the first defendant to provide to the second and third defendants a copy (electronic or otherwise) of the remaining documents over which the claim for privilege continues to be maintained and direct the Administrators to confirm whether they maintain their objection with regard to those documents within 7 days of receipt. It may be that when someone actually turns their mind to the specific documents that remain the subject of dispute between the parties, the objection is not maintained in respect of some or all of the documents.
35․In the meantime, as will be seen from the rulings set out in Attachment 1 below and the reasons dealing with specific complaints made by the plaintiff, applying the dominant purpose test described above under the Evidence Act, the claim that has been maintained by the first defendant is justifiable and accordingly, I will not make an order requiring the disputed documents to be discovered to the plaintiff.

Documents filed with ASIC

36․The plaintiff argued that documents filed with ASIC, being public documents, cannot be privileged. However, as explained above, a document that is not itself confidential may nevertheless be privileged from production if it formed part of a confidential communication. The documents that fall into this category are attachments to emails that themselves were confidential communications. This however does not preclude the plaintiff from obtaining the public documents through other means, including by requesting copies from ASIC.

Documents which concerned the plaintiff: Deed of Company Arrangement (DOCA), Individual Flexibility Agreement, family law proceedings

37․The plaintiff argued that he was actually a party to the DOCA and that any documents disclosed to him or in relation to which he was a party to discussions cannot be privileged.
38․I have attempted to deal with that submission by extracting the passage from Ingot at [23] in the principles set out above. Third persons who are involved in confidential communications are bound by the privilege in the same way that the lawyer involved in that communication is bound to maintain the privilege. The fact that the plaintiff was a former director of the company involved and a party to the DOCA that was ultimately executed does not mean that he is entitled to the earlier drafts of the DOCA prepared by the lawyers on instructions from the Administrators, nor that the privilege is necessarily waived by the fact that any particular document was not kept confidential from him.
39․The same reasoning applies to the family law proceedings. The plaintiff argued that the substance of the advice had already been disclosed to him because the first defendant discussed his ex-partner’s application to stay the voluntary administration with him at the time. However, the plaintiff was not the client. The disclosure that occurred was in the context of the plaintiff as a third party being under the same obligation of confidence as the lawyer giving the advice in relation to the defending the ex-partner’s application.
40․Again, with the Individual Flexibility Agreement that was drafted to replace the employment agreements for the employees of the company, while the plaintiff argued that he was provided with a copy of the agreement and should therefore be entitled to discovery of the agreement and documents relating to it, he received it in the context of the solicitor providing legal advice to the Administrators.
41․In short, the fact that the plaintiff was involved in some of the communications does not mean that the claim for privilege cannot be maintained in discovery processes in subsequent litigation. However, whether the privilege should be maintained in those particular circumstances is a different question for the Administrators, not the Court. Such considerations may inform the decisions to be made when the documents are reviewed by the Administrators pursuant to the direction foreshadowed above.

Has client legal privilege been lost (have the defendants waived privilege)?

42․There are three issues to address:
(a)Consent: Whether certain documents are the subject of a partial claim for privilege following the consent of the Administrators to their release: s 122(1) of the Evidence Act;
(b)Inconsistency: Whether the defendants have acted inconsistently with maintenance of the objection to disclosure on the grounds of legal privilege: s 122(2) of the Evidence Act; and
(c)Fraud: Whether there is a loss of legal privilege because the documents were created or communicated in furtherance of fraud: s 125 of the Evidence Act.

(a) Consent – can a partial claim for privilege be maintained?

43․The first issue arises under s 122(1) of the Evidence Act, which deals with loss of legal privilege by consent. Here, the Administrators consented to the first defendant no longer claiming privilege in respect of 5 documents which contained material that overlapped with documents to which the Administrators no longer raise any objection. The reference numbers are as follows: VUL.004.0041, VUL.002.0029, VUL.004.0015, VUL.004.0025 and VUL.004.0030.
44․Three of the documents in that small bundle still had partial redactions (VUL.004.0041, VUL.002.0029, and VUL.004.0025). The plaintiff challenges the redactions.
45․The unredacted parts are part of the same communication and remain subject to legal advice privilege as the confidential communication as a whole was on its face squarely prepared for the dominant purpose of giving advice. There are lines or parts of each document that are no longer subject to a claim for privilege. However, disclosure of the parts over which privilege is maintained is not reasonably necessary to enable a proper understanding of the remainder of the communication that has now been disclosed to the plaintiff: s 126 of the Evidence Act. Accordingly, the claim for privilege remains justified.

(b) Have the defendants acted inconsistently with the maintenance of the privilege?

46․The plaintiff relied on s 122(2) of the Evidence Act. Under that section, client legal privilege may be lost:
…if the client or party has acted in a way that is inconsistent with the client or party objecting to the presenting of the evidence because it would result in a disclosure mentioned in section 118 (Legal advice), section 119 (Litigation) or section 120 (Unrepresented parties).
47․Sections 122(5)(b) and 122(5)(c) relevantly provide that:
(5)A client or party is not taken to have acted in a way inconsistent with the client or party objecting to the presenting of the evidence only because –
…
(b)of a disclosure by a client to someone else if the disclosure is about a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or
(c)of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending Australian or overseas proceeding.

48․The plaintiff raised two separate arguments reliant on s 122(2). The first was that where the Administrators knowingly and voluntarily disclosed the substance of the advice to another person, or the substance of the evidence has been disclosed with the express or implied consent of the Administrators, then privilege has been lost.
49․The second argument related to the causes of action pleaded. The plaintiff’s submission, which he aptly described as the “nutshell version”, is that the Administrators “worked together to persuade” him to put his solvent company into voluntary administration by persuading him that it was insolvent and getting him to sign a resolution of director to that effect. When he took that step, the defendants profited from a “bogus voluntary administration”.
50․The plaintiff argued that it was likely that some of the documents over which the privilege is claimed, particularly communications relating to the DOCA and emails passing between the defendants may contain forensic material that may benefit him in his conspiracy claim.
51․That submission requires consideration of the law with respect to the defendants’ state of mind, and whether they have acted in a way such as to positively propound a particular state of mind in respect of the pleaded cases of conspiracy, fraud and breach of statutory duty, which is then inconsistent with the maintenance of a claim for privilege over the disputed documents.

Applicable principles

52․The test in s 122(2) reflects the common law test for implied waiver articulated in Mann v Carnell [1999] HCA 66; 201 CLR 1 (Mann): see Viterra Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333 (Viterra) at [39]. The test for waiver at common law is whether the court perceives an inconsistency, where necessary informed by considerations of fairness, between the conduct of the client and the maintenance of the confidentiality, not some overriding principle of fairness operating at large: Mann at [29].
53․With regard to the issue of whether there is a loss of privilege based on inconsistency with the Administrators’ conduct in respect of their states of mind with the privilege claimed, the legal principles were considered in detail and then distilled in GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266. At [47], in considering whether it was sufficient that the pleading put the client’s state of mind in issue, Macfarlan JA (with whom McCallum JA and Simpson AJA agreed) quoted Viterra at [78]:
... It is entirely to be expected that a party pleading a misleading or deceptive conduct case arising from a commercial transaction will have received legal advice regarding the transaction before its consummation. The applicants’ argument would suggest that privilege is waived by pleading such a case. The authorities show that something more is required.
54․Macfarlan JA went on to consider and discuss a number of authorities as to the test under s 122 of the Evidence Act, before distilling the applicable principles at [57] (emphasis added):
…
(1) The test is one of inconsistency between the privilege holder’s conduct and its maintenance of the privilege, not one of general fairness or of relevance to an issue in the proceedings.
(2) Enquiring whether the privilege holder has made express or implied assertions about the contents of the confidential communications, and whether its conduct has therefore “laid open the communications to scrutiny”, assists in ensuring that the court’s focus is on inconsistency rather than simply relevance. If the privilege holder is understood to be asserting something about the contents of the communications, it is but a short step to conclude that it would be inconsistent for it to prevent those contents being scrutinised.
(3) On the other hand mere relevance of the content of the privileged communications to an issue raised in the proceedings by the privilege holder does not equate to inconsistency – something more is needed. It is of the essence of legal professional privilege that, if maintainable, it entitles a party to withhold potentially relevant documents from inspection by the other party.
(4)The determination of whether there has been an express or implied assertion about the contents of privileged communications giving rise to a relevant inconsistency is an evaluative decision to be made after consideration of the whole of the circumstances of the case. No hard and fast rules can be formulated. Those circumstances will include the degree of relevance of any advice to the issues in the proceedings, the centrality of the relevant issues in the proceedings and the likelihood of advice having been given, informed, as the High Court said in Mann v Carnell, by considerations of fairness.
(5) Having considered all those circumstances, the court must decide whether it would be inconsistent with the privilege holder’s conduct for it to maintain privilege. The line between relevance to an issue and inconsistency in this context may be very fine and therefore one on which views might well differ.

The facts here

55․In respect of the first argument, it is well-appreciated why the plaintiff as a self-represented litigant considers that there has been disclosure of the substance of many of the documents which is inconsistent with the maintenance of the privilege. He knew about the DOCA, the family court proceedings and the proposed arrangements with the employees from his involvement in the administration as a former director. The substance of each of those matters was disclosed to him, in that he signed the DOCA and was aware that his ex-partner had sought to stay the administration, which the Administrators then defended.
56․However, for reasons explained above, the disclosure was made in circumstances where the obligation of confidentiality extended to the plaintiff and occurred in the course of the first defendant providing professional legal services to the Administrators and (on the plaintiff’s case) to him, during the course of the administration. Alternatively, the plaintiff had a common interest relating to the proceeding (being the family law litigation or the employee dispute that led to the FWO litigation). There is no inconsistency in maintaining the privilege in those circumstances.
57․As to the second argument and the plaintiff’s pleading putting the Administrators’ states of mind directly in issue, the authorities above demonstrate that more is required than the fact that the Administrators’ defence joins issue with the plaintiff’s allegations in the pleading and that the confidential documents over which privilege is claimed are relevant to that issue.
58․There is nothing in the pleading or the evidence that was led on the application to give rise to any inconsistency with the preservation of confidentiality at this stage. However, the whole of the circumstances of the case are not yet before the Court. The position may change depending on the evidence that is led from the Administrators at trial, and the present ruling should not be taken to preclude revisiting argument on the point if it becomes necessary to do so.

(c) Is there loss of client legal privilege by reason of fraud or other abuse of power?

59․The plaintiff claims that the defendants have waived privilege pursuant to s 125 of the Evidence Act. In Franks v Warringah Council [2010] NSWSC 1318, R A Hulme J stated at [39] that for this section to be invoked:
…something more must be shown that simply that the documents or communications are relevant to, or might disclose, a fraud or an abuse of power. The moving party must demonstrate that the communications were made, or the documents prepared, in furtherance of the commission of a fraud or abuse of power.
60․Having reviewed the documents in dispute, there is simply no suggestion of any fraud or abuse of power by the defendants. Notwithstanding that there are allegations of fraud contained in the pleading, waiver has not been established on that basis.
61․Accordingly, client legal privilege has not been lost. The rulings on the documents are as set out in Attachment 1.

Particulars Application – should the Court order further particulars be provided?

62․This application related to the Defence of the Administrators, where 88 paragraphs are pleaded in the form of a bare denial of the allegation specified in the plaintiff’s pleading. The relief sought is an order that the Administrators be required to provide further and better particulars of those paragraphs.
63․The plaintiff submitted that such particulars are necessary to define the issues, so as to prevent surprise at the hearing. In his affidavit supporting the request, he argued that he needs to be able to identify the case that the pleaded Defence requires him to meet. He needs to know the particular reasons why the Administrators have in numerous instances made bare denials without providing the reasons for the legal and/or factual reasons for such denials.
64․The plaintiff further asserted that when a defendant denies a specific allegation and refers to facts which negate it, the defendant will be required to prove those facts at the trial. The plaintiff submitted (through his affidavit) that there are many instances where the allegations were denied but there is no reference to any facts which negate the allegations.

Applicable Rules

65․The relevant procedural rules governing the dispute are set out in the Rules as follows (emphasis added):
406 Pleadings—statements in
(1)Each pleading must—
...
(b)contain a statement in a summary form of the material facts on which the party relies but not the evidence by which the facts are to be proved; and
(c)state specifically any matter that if not stated specifically may take another party by surprise; and
...
(e)if a claim or defence under a statute is relied on—identify the specific provision of the statute.
...

66․Rule 407 then sets out a number of matters that must be specifically pleaded.
67․Rule 409 is significant to the present dispute. It provides (emphasis added):
409Pleadings—certain facts need not be pleaded
(1)A party need not plead a fact if—
(a)the law presumes the fact in the party's favour; or
(b)the burden of proving the fact does not lie with the party.

(2)This rule does not apply if it is necessary to plead the fact—
(a)to comply with rule 406 (Pleadings—statements in); or
(b)to meet a specific denial of the fact pleaded by another party.

68․The plaintiff relies on rr 430 and 434. The relevant part of r 430 provides:
430 Pleadings—all necessary particulars must be included
(1)A party must include in a pleading of particulars necessary to—
(a)define the issues for, and prevent surprise at, the trial; and
(b)enable the opposite party to identify the case that the pleading requires the opposite party to meet; and
(c)support a matter specifically pleaded under rule 407 (Pleadings—matters to be specifically pleaded).
…

69․Rule 434 of the Rules provides that a party may apply to the court for an order for better particulars of a pleading, and the court may make any order it considers appropriate on such an application.
70․Rules 441 and 447 round out the applicable provisions where a defence is concerned. The parts of those rules that are material here provide:
441 Pleadings—denials and non-admissions
(1)It is not enough for a party to deny generally the grounds alleged in a pleading.
(2)Instead, a party must deal specifically with each allegation of fact.
(3)However, a pleading in response to a pleading that alleges damage or damages is taken not to admit the allegation unless it specifically admits the allegation.
(4)A party in a pleading must not deny an allegation of fact in the previous pleading of an opposite party in an evasive way.
(5)Instead, a party must answer the point of substance.
…
447 Pleadings—allegations admitted unless denied etc
(1)An allegation of fact made by a party in a pleading is taken to be admitted by any opposite party required to plead in response unless, either expressly or by necessary implication—
(a)it is denied in the pleading of the opposite party; or
(b)it is stated to be not admitted in the pleading of the opposite party; or
(c)a joinder of issue under rule 482 (Pleadings—joinder of issue) operates as a denial of the allegation.

…

Consideration

71․The plaintiff has misconceived the pleadings process. The elements of each cause of action alleged by the plaintiff are for the plaintiff to prove.
72․The exception is where the burden of proof lies on the defendant. In this regard, the Administrators have propounded positive defences, in that the Defence pleads:
(a)that the plaintiff has no standing to bring the causes of action;
(b)that the company is not a party to the proceeding;
(c)that the proceedings (commenced on 16 June 2022) are barred by statutory limitation periods.

73․The Administrators are required to prove those allegations, and have done so in paragraphs of the Defence that are not the subject of complaint. In short, the Administrators say their duties were to the company and any loss is that of the company, not the director. Further, any loss in respect of each cause of action was suffered more than 6 years before the proceedings were commenced and are statutorily barred by various limitation periods.
74․For every other allegation made by the plaintiff in the Second Amended Statement of Claim, the burden of proving the fact lies with the plaintiff. It is therefore the plaintiff that must particularise each allegation. It is permissible under r 409 of the Rules for the Administrators to expressly deny allegation (as required by r 447(1)(a)) without pleading the facts of the denial.
75․Again, it is understandable that the plaintiff wants to know why the allegations made are not accepted by the Administrators, but it is important to remember that the pleadings are about exposing the case and the issues. They are not about exposing the evidence that will address each issue. The plaintiff is entitled to request proper particulars but not evidence.

76․In this application, the particulars requested by the plaintiff are not proper, in the sense that they are not particulars to which the plaintiff is properly entitled under the Rules.
77․For completeness, r 441 provides that a denial must not be evasive. That means that if part of the allegation is admitted but part of the allegation is not admitted, the Administrators are not at liberty to simply deny the entirety of the allegation. They must deal with the substance of what is denied. Again, the Defence appears to comply with that rule, by specifying in detail which parts of the allegations in the plaintiff’s claim are denied.
78․Accordingly, as there is no defect in any of the paragraphs of the Defence that is the subject of the plaintiff’s complaint, the Particulars Application will be dismissed.

Costs

79․I have reserved the question of costs. The disputes are properly seen as part of broader preparations for an imminent substantive hearing. Taking into account the history of the Privilege Application, the first iteration of which was heard by Ainslie-Wallace AJ (with no costs orders made) and the fact that the plaintiff did achieve partial success by consent, with the Privilege Application being the dominant issue for determination on the applications that were before the Court, I consider that order is what best favours the interests of justice at this time. If any party seeks to agitate costs separately at a later date, then their position is preserved by the reservation of costs.

Orders

80․The Orders of the Court are as follows:

(1)Within 7 days of the date of these orders being made, the first defendant is to provide to the second and third defendants a copy (electronic or otherwise) of the remaining documents over which privilege continues to be maintained.
(2)The second and third defendants are to confirm whether they maintain their objection to the discovery of any, or all, of the documents referred to in Order 1 on the grounds of client legal privilege within 7 days of their receipt.
(3)The applications filed by the plaintiff on 30 January 2024, 27 February 2024 and 1 March 2024 in relation to discovery and particulars are otherwise dismissed.
(4)Costs of the applications are reserved.

I certify that the preceding eighty [80] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour, Justice McWilliam

Associate:

Date:

Attachment 1 – First Defendant’s discoverable documents for which claim for ‘legal professional privilege’ is made

Document ID	Item Date	Document Type	Description of document	Determination
VUL.001.0003	29/01/2016	Letter	Letter JB Associates Solicitors & Barristers to Deloitte - Sanchez & Elvin [attachment to VUL.001.0064]	Litigation privilege (because it is an attachment to a confidential communication)
VUL.001.0004	10/06/2016	File note	Foot & Thai Massage Pty Ltd (Administrators Appointed) - Status update	Litigation and/or Advice Privilege
VUL.001.0016	21/01/2016	Document	Report to Creditors pursuant to Section 439A of the Corporations Act 2001 with highlighting	Advice Privilege Although the Report to Creditors was executed and made publicly available, this copy of the document was printed and considered by a lawyer, with markings on pages 5 and 7. The dominant purpose of this particular copy was for legal advice, rather than the commercial purpose or the original document that was presented to creditors.
VUL.001.0019	3/02/2016 10:35AM	Email	RE: Defend Application to Stay Administration [17054] - Costs Disclosure	Advice Privilege
VUL.001.0020	Document	2015-16 Costs Disclosure & Legal Services Agreement [Attachment to VUL.001.0019]	Advice Privilege
VUL.001.0021	2/02/2016 1:43PM	Email	RE: Foot and Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.001.0022	4/02/2016 8:32:00 AM	Email	RE: Elvin & Sanchez - Family Law Matter [Attachment to VUL.001.0031]	Litigation and advice privilege (because it is an attachment).
VUL.001.0023	3/02/2016 9:38:00 AM	Email	Elvin & Sanchez - Family Law Matter [Attachment to VUL.001.0031]	Litigation and advice privilege (because it is an attachment).
VUL.001.0025	5/02/2016 8:26:00 AM	Email	Fwd: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation and Advice Privilege
VUL.001.0026	4/02/2016 10:41PM	Email	Re: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation and Advice Privilege
VUL.001.0027	4/02/2016 5:07PM	Email	FW: RE: Foot & Thai Massage P/L (Administrators Appointed)	Litigation and Advice Privilege
VUL.001.0028	4/02/2016 5:11PM	Email	FW: RE: Foot & Thai Massage P/L (Administrators Appointed)	Litigation Privilege
VUL.001.0031	4/02/2016 12:49 AM	Email	FW: Elvin & Sanchez - Family Law Matter	Litigation and Advice Privilege
VUL.001.0035	4/02/2016 5:38PM	Email	Re: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation and Advice Privilege
VUL.001.0036	4/02/2016 5:27PM	Email	FW: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation and Advice Privilege
VUL.001.0037	4/02/2016 5:07PM	Email	Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation and Advice Privilege
VUL.001.0040	4/02/2016	Letter	Draft - CLF to JB & Associates and FGD	Litigation Privilege
VUL.001.0050	5/02/2016 8:58:00 AM	Email	FW: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation Privilege
VUL.001.0051	5/02/2016 8:37:00 AM	Email	FW: Foot and Thai Massage Pty Limited (Administrators Appointed) - Sanchez v Elvin	Litigation Privilege
VUL.001.0064	2/02/2016 12:22PM	Email	Foot and Thai Massage Pty Limited (Administrators Appointed)	Litigation Privilege
VUL.001.0065	Undated	File Cover Sheet and Instructions	File Number 17054 Client Deloitte Touche Tohmatsu Ezio Senatore in his capcity as administrator of Foot & Thai Massage Pty Ltd (Administrators Appointed) - Defend Application to Stay Administration	Litigation and Advice Privilege
VUL.002.0001	Undated	File Cover Sheet	File Number 17235 Ezio Senatore in his capacity as administrator of Foot & Thai Massage Pty Ltd (administrators appointed) - Prepare Deed of Company Arrangement	Advice Privilege
VUL.002.0002	1/04/2016	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo and Colin Elvin	Advice Privilege
VUL.002.0003	1/04/2016	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo and Colin Elvin	Advice Privilege
VUL.002.0005	22/03/2016 11:14:00 AM	Email	Foot and Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.002.0006	8/02/2016 5:18:00 PM	Email	Foot and Thai Massage Pty Limited (Administrators Appointed) ("the Company") with handwritten notations	Advice Privilege
VUL.002.0007	14/12/2015	Document	Historic Company Extract Plus Report [attachment to VUL.002.0005]	Advice Privilege (because it is an attachment to a privileged communication)
VUL.002.0008	1/03/2016	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0009	1/04/2016	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0010	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0011	Undated	Handwritten File Note	CLF	Litigation and advice privilege (on the face of the document, prepared by an employee or agent of a law firm in the context of litigation and advice)
VUL.002.0012	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0013	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0014	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0016	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0017	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0018	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0019	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0020	Mar-16	Document	Draft - Deed of Company Arrangement between Foot & Thai Massage Pty Ltd (Administrators Appointed) and Ezio Senatore and Neil Cussen and Viet Ngo	Advice Privilege (because it is a draft)
VUL.002.0022	Undated	Handwritten Note	CLF	Advice Privilege (draft wording for DOCA)
VUL.002.0023	27/10/2015	Document	Draft - Deed of Company Arrangement (working document)	Advice Privilege (because it is a draft)
VUL.002.0024	Undated	Handwritten Note	CLF	Advice Privilege (solicitor’s file note written on its face for the purposes of giving advice)
VUL.002.0026	1/07/2015	Document	Best Practice Guide: Use of individual flexibility arrangements with handwritten notation	Advice Privilege Having regard to the content of the notations, this copy of the document was printed for the dominant purpose of providing legal advice, even though the original Guide itself was not a confidential communication or confidential document.
VUL.002.0028	22/03/2016 12:29:00 PM	Email	FW: Foot and Thai Massage Pty Limited (Administrators Appointed) ("Company")	Advice Privilege
VUL.002.0030	22/03/2016 11:14:00 AM	Email	Foot and Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.002.0031	5/02/2016 5:36pm	Email	Foot & Thai Massage Pty Limited (Administrators Appointed) [Attachment to VUL.002.0040]	Advice Privilege
VUL.002.0032	Undated	Document	Foot & Thai Massage Pty Limited (Administrators Appointed) - Employee Entitlements [Attachment to VUL.002.0031]	Advice Privilege (because it is an attachment to a privileged communication)
VUL.002.0033	Undated	Document	Assets List [Attachment to VUL.002.0031]	Advice Privilege (because it is an attachment to a privileged communication)
VUL.002.0034	4/02/2016	Document	ASIC Business Name search for Foot and Thai Massage [Attachment to VUL.002.0031]	Advice Privilege (because it is an attachment to a privileged communication)
VUL.002.0036	19/02/2016 11:50AM	Email	FW: Foot & Thai Massage Pty Limited (Administrators Appointed) - Costs Order - Sanchez	Advice Privilege
VUL.002.0039	Undated	Email	Foot and Thai Massage Pty Limited (Administrators Appointed) ("the Company") [Attachment to VUL.002.006]	Advice Privilege (because it is an attachment to a privileged communication)
VUL.002.0040	8/02/2016 9:05AM	Email	FW: Foot and Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.003.0001	Undated	File Cover Sheet	File Number 17078 Client Deloitte Touche Tohmatsu Title Sale of Foot and Thai Massage	Advice Privilege
VUL.003.0002	08/02/2016 11:38AM	Email	New matter Foot & Thai Massage	Advice Privilege
VUL.003.0003	09/02/2016 11:21AM	Email	Foot and Thai Massage, Business Sale Matter number 17078	Advice Privilege
VUL.004.0001	Undated	File Cover Sheet	File Number 16939 Client Deloitte Touche Tohmatsu Title Foot & Thai Massage - Individual Flexibility Agreements	Advice Privilege
VUL.004.0002	Undated	Post It Note	Employment Agreement	Advice Privilege
VUL.004.0003	Undated	Handwritten Document	F&M 11:00am	Advice Privilege
VUL.004.0004	Undated	Handwritten Document	10:05 - Research	Advice Privilege
VUL.004.0005	18/12/2015 9:41AM	Email	FW: Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0006	18/12/2015 11:48AM	Email	FW: Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0007	Undated	Handwritten Document	Ombudsman Award Massage Parlour	Advice Privilege
VUL.004.0009	Undated	Handwritten Document	Titled "Massage Therapists"	Advice Privilege
VUL.004.0010	21/12/2015	Form	Australian Industrial Relations Commission Order dated 25/09/09 with handwritten markings	Advice Privilege
VUL.004.0011	21/12/2015	Document	Subclass 457 Visa Working in Australia with handwritten markings	Advice Privilege
VUL.004.0012	Undated	Document	Extract of Health Professionals and Support Services Award 2010 with handwritten markings	Advice Privilege
VUL.004.0013	21/12/2015 7:12AM	Email	Re: Ombudsman Inquiry	Advice Privilege
VUL.004.0014	21/12/2015	Handwritten Document	Attendance Note (CLF)	Advice Privilege
VUL.004.0016	Undated	Document	Draft Individual Flexibility Agreement (IFA) Foot and Thai Massage with handwritten notations	Advice Privilege
VUL.004.0017	Undated	Handwritten Document	Call to Ombudsman	Advice Privilege
VUL.004.0018	Undated	Document	Draft employment contract for Massage Therapist with notations and highlighting	Advice Privilege
VUL.004.0019	Undated	Document	Draft employment contract for Massage Therapist with highlighting	Advice Privilege
VUL.004.0020	Undated	Handwritten Document	Individual Flexibility Agreement and HPSS Award	Advice Privilege
VUL.004.0021	Undated	Document	Draft employment contract for Massage Therapist	Advice Privilege
VUL.004.0022	25/03/2012	Document	Full-Time Employment Agreement with Delo Be N. Isugan with handwritten notations	Advice Privilege
VUL.004.0023	Undated	Document	draft Individual Flexibility Agreement (IFA) Foot and Thai Massage with handwritten notations	Advice Privilege
VUL.004.0024	22/12/2015 2:23PM	Email	New Matter - Foot and Thai Massage Pty Ltd	Advice Privilege
VUL.004.0026	Undated	Document	Individual Flexibility Agreement (IFA) Foot & Thai Massage with highlighting	Advice Privilege
VUL.004.0028	22/12/2015 2:23PM	Email	New Matter - Foot and Thai Massage Pty Ltd	Advice Privilege
VUL.004.0029	23/12/2015 2:48PM	Email	RE: Foot & Thai Massage Pty Limited (Administrators Appointed): Individual Flexibility Agreements	Advice Privilege
VUL.004.0031	Undated	Letter	draft Terms of Employment [attachment to VUL004.0029]	Advice Privilege
VUL.004.0032	Undated	Document	draft pro forma Individual Flexibility Agreement (IFA) for Foot & Thai Massage with highlighting [attachment to VUL004.0029]	Advice Privilege
VUL.004.0033	22/12/2015 4:21PM	Email	Foot and Thai Massage - Employment Agreements	Advice Privilege
VUL.004.0034	22/12/2015	Letter	draft letter of advice about Letter of Engagement and Individual Flexibility Arrangement [attachment to VUL004.0033]	Advice Privilege
VUL.004.0035	Undated	Document	draft Individual Flexibility Agreement (IFA) Foot & Thai Massage with highlighting and comments [attachment to VUL004.0033]	Advice Privilege
VUL.004.0036	18/12/2015 9:41AM	Email	Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0037	18/12/2015 12:12PM	Email	Re: Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0038	Undated	Document	2015-16 Costs Disclosure & Legal Services Agreement [attachment to VUL004.0037]	Advice Privilege
VUL.004.0039	18/12/2015 12:17PM	Email	Re: Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0040	18/12/2015 12:28PM	Email	Re: Foot & Thai Massage Pty Limited (Administrators Appointed)	Advice Privilege
VUL.004.0042	22/12/2015 7:04AM	Email	RE: Foot & Thai Massage Pty Limited (Administrators Appointed): Individual Flexibility Agreements	Advice Privilege
VUL.004.0043	22/12/2015 10:49AM	Email	RE: Foot & Thai Massage Pty Limited (Administrators Appointed): Individual Flexibility Agreements	Advice Privilege
VUL.004.0044	22/12/2015 11:37AM	Email	FW: Foot & Thai Massage Pty Limited (Administrators Appointed): Individual Flexibility Agreements	Advice Privilege
VUL.004.0045	21/12/2015 1:26PM	Email	RE: Foot & Thai Massage Pty Limited (Administrators Appointed): Individual Flexibility Agreements	Advice Privilege

[2024] ACTSC 84

28 March 2024