Generate Group Pty Ltd v Sea-Tech Automation Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Generate Group Pty Ltd v Sea-Tech Automation Pty Ltd [2017] FCA 1261

File number: NSD 1701 of 2015
Judge: GLEESON J
Date of judgment: 30 November 2017
Catchwords: PRIVILEGE – legal professional privilege – application for an order to the effect that certain documents not protected by legal professional privilege – inspection of documents by the Court – application refused
Cases cited:

AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382

Bailey v Department of Land and Water Conservation [2009] NSWCA 100; (2009) 74 NSWLR 333

Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd [2017] FCA 856

District Council of Mallala v Livestock Markets Ltd [2006] SASC 80; (2006) 94 SASR 258

Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49

Grant v Downs [1976] HCA 63; (1976) 135 CLR 674

Hancock v Rinehart (Privilege) [2016] NSWSC 12

Trade Practices Commission v Sterling (1979) 36 FLR 244

Westminster Airways Ltd v Kuwait Oil Co Ltd [1951] 1 KB 134

Heydon JD, Cross on Evidence (11th ed, LexisNexis Butterworths, 2017)

Date of hearing: 12 September 2017
Date of last submissions: 26 September 2017
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Copyright and Industrial Designs
Category: Catchwords
Number of paragraphs: 44
Counsel for the Applicant: Mr T Brennan
Solicitor for the Applicant: SBA Lawyers
Counsel for the Respondents: Mr CA Botsman
Solicitor for the Respondents: Wilson & Co Lawyers

ORDERS

NSD 1701 of 2015
BETWEEN:

GENERATE GROUP PTY LTD (ACN 072 667 228)

Applicant
AND:

SEA-TECH AUTOMATION PTY LTD (ACN 003 916 434)

First Respondent

GREGORY JOHN HARRIS

Second Respondent
AND BETWEEN:

SEA-TECH AUTOMATION PTY LTD (ACN 003 916 434)

Cross-Claimant
AND:

GENERATE GROUP PTY LTD (ACN 072 667 228)

Cross-Respondent

JUDGE:

GLEESON J

DATE OF ORDER:

30 NOVEMBER 2017

THE COURT ORDERS THAT:

1.Paragraph 2 of the interlocutory application dated 17 July 2017 be dismissed.

2.Within seven days of the date of this order, the parties file and serve written submissions of no more than three pages on the question of costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

GLEESON J:

  1. The applicant (“Generate”) claimed legal professional privilege (“LPP”) over two packets of documents produced in answer to subpoenas addressed to Generate and Generate’s lawyer, Stephen Blanks trading as SBA Lawyers.

  2. By prayer 2 of interlocutory application dated 17 July 2017, the first respondent (“Sea-Tech”) sought an order that LPP “does not arise” in respect of certain documents contained in the two packets of documents. On 16 August 2017, Jagot J, the docket judge, referred the determination of that application to another judge.

  3. The issue for decision is whether Generate’s LPP claims have been established.

    BACKGROUND FACTS

  4. This proceeding commenced on 18 December 2015.

  5. A mediation was conducted on 6 February 2017 by a registrar of this Court.

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Details
Case
[2017] FCA 1261
Decision Date

CaseChat Overview and Summary

In the case of Generate Group Pty Ltd v Sea-Tech Automation Pty Ltd, the Federal Court of Australia was tasked with determining whether certain documents were protected by legal professional privilege (LPP). The proceedings began on 18 December 2015, and the primary dispute centred on the validity of LPP claims made by Generate over several documents, which were produced in response to subpoenas. The documents in question were produced by both Generate and Stephen Blanks, a lawyer, and related to communications between Generate, Blanks, and the Auburn Tennis Club.

The legal issues before the court involved whether the documents were indeed protected by LPP and, if so, whether the court should inspect the documents to verify the claims. The evidence presented included affidavits from Simone Pettit, Generate's Operations Manager, who detailed the nature of the communications and the context in which the documents were created. The court considered whether the privilege claims were substantiated and whether inspection of the documents was necessary to resolve the dispute. The court referenced several precedents, including State of New South Wales v Jackson and Woollahra Municipal Council v Westpac Banking Corporation, to guide its decision.

After reviewing the evidence, Tobias JA, with Allsop P and Hodgson JA concurring, concluded that the documents were protected by LPP. The court found that Ms. Pettit had sufficient personal knowledge to make the LPP claims and that the documents primarily related to communications occurring after the commencement of the proceedings or pertained to obtaining legal advice. The court found that the documents were created for the purpose of obtaining legal advice and conducting the proceedings, which is a clear indication of legal professional privilege. An exception was noted for a document dated 12 February 2015, which was deemed to be protected by LPP based on the evidence provided.

The court dismissed Sea-Tech's application for an order requiring the inspection of the documents, finding that the privilege claims were sufficiently supported by the evidence. The court ordered that the parties submit written arguments on the question of costs within seven days of the judgment.

Orders

Orders of the court

1. Paragraph 2 of the interlocutory application dated 17 July 2017 be dismissed.

2. Within seven days of the date of this order, the parties file and serve written submissions of no more than three pages on the question of costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The issue for decision is whether Generate’s LPP claims have been established.BACKGROUND FACTS This proceeding commenced on 18 December 2015. A mediation was conducted on 6 February 2017 by a registrar of this Court. On 10 February 2017, there was a case management hearing before Jagot J at which orders were made by consent. On 24 March 2017, there was an interlocutory hearing before Jagot J. The LPP claims were supported by two affidavits of Simone Pettit, Generate’s Operations Manager. Ms Pettit gave evidence that she attended the 6 February 2017 mediation.DISPUTED DOCUMENTS Documents in a packet marked “S-13” were produced in answer to the following paragraphs of the subpoena to Generate:8.Any documents evidencing or recording communications in the period 26 May 2014 to 12 February 2015 between [Generate] and Stephen Blanks or any solicitor working for, or with, Stephen Blanks.9.Any documents evidencing or recording communications in the period 30 January 2017 to 20 March 2017 between [Generate] and Stephen Blanks or any solicitor working for, or with, Stephen Blanks. Prima facie, documents falling within the scope of these paragraphs are likely to be protected by legal professional privilege. Documents in a packet marked “S-14” were produced in answer to the paragraphs of the subpoena to Mr Blanks which mirrored paras 8 and 9 of the subpoena to Generate, as well as the following paragraphs:5. Any documents evidencing or recording communications in the period 26 May 2014 to 12 February 2015 between [Generate] or any employee of [Generate] and the Auburn Tennis Club or any employee or officer of the Auburn Tennis Club.6. Any documents evidencing or recording communications in the period 30 January 2017 to 20 March 2017 between [Generate] or any employee of [Generate] and the Auburn Tennis Club or any employee or officer of the Auburn Tennis Club. In her affidavit made 26 July 2017, Ms Pettit stated that the documents over which the LPP claims were made are:(1)120 documents produced in answer to paras 8 and 9 of the subpoena to Generate; and(2)172 documents produced in answer to paras 5, 7 and 8 of the subpoena to Mr Blanks. Ms Pettit gave evidence that during the time periods identified in the relevant paragraphs of the subpoenas, and during the time in between those periods, Generate had retained Mr Blanks for the purposes of obtaining confidential legal advice in relation to a range of commercial matters; and confidential legal advice and representation in relation to various disputes including the present proceedings, unrelated District Court proceedings and anticipated litigation. On 26 July 2017, Jagot J ordered Generate to serve a list of documents specifying:(a)in respect of each document over which privilege is claimed and which was brought into existence in connection with the facts, matters and circumstances arising in these proceedings:(i)the type of document;(ii)the date and time of the document; (iii)the author(s) and the recipient(s) of the document; and (iv)the basis upon which a claim for privilege is made (e.g. advice privilege or litigation privilege) and the facts said to support such a claim; and (b)that documents other than those in (a) were not brought into existence in connection with the facts, matters and circumstances arising in these proceedings.

Evidence

Evidence Before The Court

At [60]-[62], Tobias JA said (Allsop P and Hodgson JA agreeing):[60]A common law claim for legal professional privilege was recently discussed by Giles JA, with whom Mason P and Beazley JA agreed, in State of NSW v Jackson [2007] NSWCA 279. His Honour said (at [24]): In ruling on a claim to legal professional privilege or client legal privilege the court may inspect the relevant documents (Grant v Downs (1976) 135 CLR 674 at 677 and 688-689; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246-247; Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 at 541-542; Esso Australia Resources Ltd v Commissioner of Taxation at [52]; AWB Ltd v Cole (2006) 152 FCR 382 at 391; see also s 133 of the Evidence Act 1995). Inspection is discretionary (Grant v Downs at 688-689; District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258 at [30]), for such assistance as it may provide in arriving at the documents’ status. In Esso Australia Resources Ltd v Commissioner of Taxation at [52] Gleeson CJ and Gaudron J and Gummow J said, after observing that a claim for privilege is not conclusively established by use of a verbal formula, that a court ‘should not be hesitant to exercise’ its power to examine documents. Where the parties have put evidence before the court, however, beyond the use of a verbal formula, I respectfully remain of the view expressed in Woollahra Municipal Council v Westpac Banking Corporation at 542, that the court should not unnecessarily pay regard to material which can not be known to the party challenging the claim to privilege.[61]In Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529, Giles J (as he then was) at 542 (being the page reference referred to by him in State of New South Wales v Jackson), when considering whether he should inspect the documents in dispute for the purpose of reaching a conclusion as to whether they were privileged, observed:In Grant v Downs (1976) 135 CLR 674 at 689, the power to do so [that is, to inspect] was recognised and it was said that ‘in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence’. Inspection should not be undertaken unless there is good reason to do so. The Court should be able to proceed upon evidence describing the documents and the circumstances of their creation, and should not unnecessarily pay regard to material which cannot be known to the party challenging the claim to privilege.[62]His Honour was there dealing with the power to inspect at common law. The critical word in the passage referred to is “unnecessarily”. If the court is unable to proceed upon the evidence, as in the present case, then in my view there is no impediment to the court exercising its undoubted discretion under s 133 to order that the document or documents be produced and inspected for the purpose of determining the question of whether privilege attaches. How the court utilises the power to inspect under s 133 will obviously depend on the circumstances of each case. I do not consider that merely because the party resisting the claim for privilege objects to the judge exercising the power under s 133 is of itself a legitimate reason to refuse to exercise the discretion: compare Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380 at [66] per McDougall J. As was noted by Giles JA in State of New South Wales v Jackson in the passage which I have recorded at 348 supra, in Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) 201 CLR 49 at 70 [52], Gleeson CJ, Gaudron J and Gummow J observed that a court “should not be hesitant to exercise” its power to examine documents.EVIDENCE TO SUPPORT LPP CLAIMSConfidential communications or lawyers’ work product

Decision

Reasons for decision

The exception is a document dated 12 February 2015 from Mr Godfrey to Mr Blanks. It is an inquiry which, I infer from Ms Pettit’s evidence concerning other communications requesting legal advice around this time, concerns the provision of that legal advice. On the basis of Ms Pettit’s evidence, I am satisfied that the document is protected by LPP.CONCLUSION The disputed documents are protected by LPP. Sea-Tech’s application for the order in prayer 2 of interlocutory application dated 17 July 2017 must be dismissed. I will make directions that the parties file and serve short written submissions on the question of costs.

Ratio Decidendi

Legal Principle Established

Sea-tech required Ms Pettit to attend for cross-examination and I granted leave for her to be cross-examined. The primary issue was whether Ms Pettit had sufficient personal knowledge to make the LPP claims on behalf of Generate. It is curious that this was doubted in the light of the fact that Ms Pettit had attended the mediation in February 2017. No basis emerged in cross-examination for doubting that Ms Pettit was an appropriate person to prove the LPP claims, or the accuracy and truthfulness of her evidence. In particular, Ms Pettit clarified that:(1)she was involved in reviewing and identifying the documents listed in SP-3 (Ms Pettit said that she worked with a solicitor from SBA Lawyers, Ms Steer, to do this task);(2)she gave SBA Lawyers instructions about what needed to be produced;(3)she reviewed all of the documents that were produced;(4)she is the primary person responsible at Generate for this litigation and the correspondence with SBA Lawyers, including the preparation for the mediation; (5)on occasions, she was the person responsible for initiating requests to Mr Blanks to provide legal advice and on other occasions, the instigator was Mr Godfrey (who works very closely together with Ms Pettit); and(6)Ms Pettit decided which documents would be the subject of LPP claims, and therefore included in SP-2, with input from a solicitor.CONSIDERATION In the light of Mr Botsman’s concession, at the hearing, that Sea-Tech no longer suggested that Ms Pettit’s evidence was insufficient to establish the LPP claims, I have considerable reservations about its request that the Court examine all of the documents to satisfy itself of the claims. However, I did review the bundle of documents and I was satisfied that there was nothing on the face of the documents which raised any doubt that the communications evidenced by the documents were not protected by LPP, or any doubt as to the veracity of Ms Pettit’s evidence concerning the purposes for which those communications occurred. In particular, I note that all of the documents (with a single exception) evidences a communication between client and lawyer which occurred well after the commencement of these proceedings. This appears from the descriptions of the documents in the index to the bundle which, I assume, are the same descriptions provided in SP-2 or SP-3 as the case may be. There is nothing to suggest that the communications were not confidential or that they occurred for any purpose other than the purpose of conducting the proceedings or the purpose of obtaining legal advice on matters arising out of the proceedings. I am satisfied that these documents are protected by LPP. The exception is a document dated 12 February 2015 from Mr Godfrey to Mr Blanks. It is an inquiry which, I infer from Ms Pettit’s evidence concerning other communications requesting legal advice around this time, concerns the provision of that legal advice. On the basis of Ms Pettit’s evidence, I am satisfied that the document is protected by LPP.CONCLUSION