GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd

GR Capital Group Pty Ltd and Xinfeng Australia International Investment Pty Ltd were the parties involved in an appeal before the New South Wales Court of Appeal concerning an application to set aside a subpoena. The core of the dispute revolved around whether certain documents sought by subpoena were protected by legal professional privilege, and if so, whether that privilege had been waived by the conduct of the party seeking to uphold it.

The Court of Appeal was required to determine two primary legal issues. Firstly, it had to consider whether the documents, which were held by Colin Biggers & Paisley, were subject to legal professional privilege, specifically advice regarding the legality or illegality of an underlying transaction or a compromise agreement. Secondly, the Court had to assess whether any such privilege had been waived by the conduct of GR Capital Group Pty Ltd. The Court also considered the appropriate procedural approach when seeking variations to interlocutory orders, noting that it is often preferable to approach the first instance judge again rather than seek leave to appeal.

In its reasoning, the Court applied the established test for waiver of legal professional privilege by conduct, which requires an inconsistency between the conduct of the party asserting privilege and the maintenance of that privilege. The Court found that the conduct of GR Capital Group Pty Ltd in relation to the documents in question did not demonstrate such an inconsistency as to amount to a waiver of privilege concerning legal advice on the legality of the underlying transaction or compromise. Consequently, the Court granted leave to appeal, set aside the first instance order for production, and substituted an order requiring the production of only those documents containing legal advice as to the legality or illegality of the underlying transaction or agreement to compromise the proceedings, while otherwise excusing compliance with the subpoena. The respondent was ordered to pay the applicants’ costs of the appeal.