H Stanke & Sons Pty Ltd & Cape Banks Processing Company Pty Ltd v Von Stanke, O'MEARA - [2006] SASC 308

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
H STANKE & SONS PTY LTD & CAPE BANKS PROCESSING COMPANY PTY LTD v VON STANKE, O'MEARA & ORS
[2006] SASC 308
Judgment of The Honourable Justice White
5 October 2006
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INJUNCTIONS FOR PARTICULAR PURPOSES - TO RESTRAIN BREACH OF CONFIDENCE
Application by first defendant to restrain second defendant from using, in these and other proceedings, documents said to be privileged or confidential, and to restrain second defendant from continuing to retain her present firm of solicitors - second defendant sought production of documents pursuant to s 84B of the Trustee Act 1936 (SA) - first defendant's solicitors provided their file, and a copy of their predecessor's file - later claim that the documents provided included documents which were privileged and confidential and which s 84B did not require to be produced - documents inspected, and used by solicitors for the second defendant before being returned to first defendant - whether equitable jurisdiction to protect confidential information or Court's supervisory jurisdiction over legal practitioners should be exercised - whether all documents were documents to which s 84B of the Trustee Act applied - whether documents to which legal professional privilege applied attracted the operation of special principles in the exercise of the equitable jurisdiction to protect confidences.
Held: documents not provided to second defendant in circumstances importing an obligation of confidence - a reasonable solicitor in the position of the second defendant's solicitor would not have thought it obvious that a mistake had been made in the disclosure of the documents - in any event privilege in the documents had been waived - the circumstances did not indicate that an exercise of the Court's supervisory jurisdiction over solicitors was required - application for injunctions dismissed.
Trustee Act 1936 (SA), s 84B; Trustee Regulations 1996 (SA), reg 6, referred to.
Trevorrow v State of South Australia (No 4) (2006) 94 SASR 64; The Daniels Corporations International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, applied.
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; Corrs Pavey Whiting and Byrne v Collector of Customes (Vic) (1987) 14 FCR 434; Coco v AN Clark Engineers Ltd (1968) 1A IPR 587; Esso Australian Resources Limited v Commissioner of Taxation (1999) 201 CLR 49; Guinness Peat Properties Ltd v Fitzroy Robinson Partnership (1987) 1 WLR 1027; National Insurance Co Ltd v Whirlybird Holdings Ltd [1994] 2 NZLR 513; Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511; Goddard v Nationwide Building Society (1987) 1 QB 670; ISTIL Group Inc v Zahoor [2003] 2 All ER 252; Kingston v State Fire Commission (1998) 8 Tas R 152; Webster v James Chapman and Co [1989] 3 All ER 939; Rouse v IOOF Australia Trustees Limited (1999) 73 SASR 484; Davies v Clough (1837) 8 Sim 262; Newman v Phillips Fox (1999) 21 WAR 309; Frankland River Olive Company Ltd v Charters Securities Pty Ltd [2004] WASC 88; DPP for Western Australia v Bennett & Co [2005] WASC 1; Rouse v IOOF Australia (No 2) [1999] SASC 205; Kallinicos v Hunt (2005) 64 NSWLR 561; Spincode Pty Ltd v Look Software (2001) 4 VR 501; Derby & Co Ltd v Weldon (No 8) (1991) 1 WLR 73, considered.

H STANKE & SONS PTY LTD & CAPE BANKS PROCESSING COMPANY PTY LTD v VON STANKE, O'MEARA & ORS
[2006] SASC 308
Civil

WHITE J: The first defendant in this action contends that the second defendant (“Mrs O’Meara”) and her solicitors, Lipman Karas, have possession, and have made use in this and other related litigation, of his privileged and confidential material. He seeks injunctions restraining Mrs O’Meara from continuing to retain Lipman Karas to act on her behalf, and from using or disclosing the privileged and confidential material. The first defendant also seeks the striking out of certain pleadings in which it is said use has been made of the privileged and confidential material.
The Underlying Dispute
The first defendant (“John”) and Mrs O’Meara are brother and sister. They are the children of Frederick William von Stanke (“Fred”) and Gwendoline Mary von Stanke (“Gwendoline”). Fred died on 12 November 1995 and Gwendoline died on 3 April 2001. John is the executor of each of their estates.
For many years, Fred conducted fishing and export businesses at Carpenter’s Rocks in partnership with his two brothers, John Hurtle von Stanke and Robert Charles von Stanke. The partnership businesses were (in effect) conducted by two Companies: H Stanke & Sons Pty Ltd and Cape Banks Processing Company Pty Ltd (“the Companies”). Initially, Fred and his two brothers were the directors of the Companies. In June 1994 John and Robert Denis von Stanke (the son of Robert Charles) were appointed directors. Additional directors have since been appointed.
John and Mrs O’Meara are each beneficiaries in the estates of Fred and Gwendoline. Mrs O’Meara is concerned that there has been delay by John in the administration of the estates. She is also concerned that the assets of the estates have not been, or are not being, properly applied. Mrs O’Meara has retained the firm of Lipman Karas to act for her in relation to those concerns.
There are three sets of proceedings on foot in this Court.
The first action (SCCIV-05-304) was instituted by Mrs O’Meara on 23 March 2005. It sought production of documents to which Mrs O’Meara claimed to be entitled under s 84B of the Trustee Act 1936 (SA) (“the Trustee Act”). No steps have been taken in that action to date because of the agreement by the firm of solicitors, Strachan Carr, who formerly acted for John in his capacity as executor of the two estates, to provide certain documents to Lipman Karas. It is the provision of those documents by Strachan Carr which has given rise to the present proceedings.
The second action (SCCIV-05-645) is a construction summons instituted by John in his capacity as executor of the estates of his parents. In general terms it seeks a determination of the respective interests of himself and Mrs O’Meara in particular assets of the two estates. Those proceedings were instituted on John’s behalf by the firm Iles Selley. Since 22 December 2005, Rosemary H Craddock (“Mrs Craddock”) has acted for John in his capacity as executor of these estates. Mrs O’Meara filed a counter-claim in this action on 14 July 2005. By that counter-claim Mrs O’Meara seeks declarations as to Fred’s interest in certain land, an order removing John as the executor of their parents’ estates, and declarations as to the proper construction of their parents’ wills.
The third action (SCCIV-05-1491) was instituted by the Companies. In substance, the Companies seek declarations as to their interest in certain land upon which the businesses of the Companies are conducted. They contend that their interest is superior to the interests of either of the estates of Fred and Gwendoline. Piper Alderman act for the Companies in relation to those proceedings. In this action, Mrs O’Meara has filed a contribution notice by which she alleges various breaches of duty by John in his capacity as executor, seeks an order removing him as executor, an order that he pay equitable compensation or damages to her, and an order that he account to Fred and Gwendoline’s estates and to her for any profits made by him or his family from his administration of the estates. This contribution notice is in relevantly identical terms to the counter-claim filed by Mrs O’Meara in action No 645 of 2005. John’s applications for orders against Lipman Karas and Mrs O’Meara in respect of their alleged use of privileged and confidential information are made in this third action.
Lipman Karas act for Mrs O’Meara in relation to each of these proceedings.
The Relief Sought
In this action, John seeks an injunction restraining the firm Lipman Karas from representing Mrs O’Meara in any of the three actions; in the alternative, an order that Mrs O’Meara be restrained from using or disclosing any information contained in what he calls the “Privileged Strachan Carr Documents” (which will be defined more particularly below); and orders striking out the contribution notice in this action and the counter-claim of Mrs O’Meara in action No 645 of 2005.
The Delivery of Documents to Lipman Karas
The documents and information which form the basis of John’s claim are documents and information which were provided to Lipman Karas in 2005 by Strachan Carr, the firm of solicitors retained by John between 1998 and April 2005 to act on his behalf in his capacity as executor of the two estates.
In late September 2004 Lipman Karas commenced a series of correspondence to Strachan Carr, raising Mrs O’Meara’s concerns about the administration of the estate, and requesting information and documents concerning that administration. Being dissatisfied with the adequacy of the responses, on 23 March 2005 Mrs O’Meara commenced the action No 304 of 2005. By that action she sought an order for production of the documents to which, as a beneficiary of her parents’ estates, she was entitled pursuant to s 84B of the Trustee Act.
Following the service of those proceedings, Strachan Carr, under cover of a letter dated 8 April 2005 and by courier, delivered to Lipman Karas a volume of documents. The substance of the letter of 8 April 2005 was as follows:
We refer to our most recent telephone conversation concerning the matter and provide you with a copy of the respective files. We confirm that you will not proceed in the matter now that you have received the files.
We have not provided you with the material that has passed between our respective offices as you are in possession of that and we have not included a copy of the lengthy declaration by Robert von Stanke as you are in possession of that also.
The documents provided comprised some 542 pages.
The Court did not receive evidence from either Mr Strachan nor Mr Lipman, the solicitors with the conduct of the matter in the respective firms of Strachan Carr and Lipman Karas. It can be inferred, however, from his letter, and other correspondence which was tendered, that Mr Strachan and Mr Lipman had reached some form of agreement that the delivery to Lipman Karas of certain files would, or may, satisfy Mrs O’Meara’s claims in the proceedings for production of documents.
By letter dated 10 April 2005, Lipman Karas informed Strachan Carr that they regarded the documents provided as being inadequate to satisfy Mrs O’Meara’s requests. They also commented on what was said to be the “idiosyncratic order” in which the documents had been delivered. They sought confirmation that the order in which the documents had been provided accorded with the order in which the documents had been maintained by John and/or Strachan Carr, and that there had been no documents which had been excluded from production. The letter also informed Strachan Carr that a copy of the documents produced would be made by Lipman Karas.
It seems that following that letter a telephone discussion took place between Mr Strachan and Mr Lipman. Mr Strachan requested that the documents provided to Lipman Karas be returned so that they could be put in order. Lipman Karas then returned the documents on an agreement that they would be returned, in order, within seven days. Before returning the documents to Strachan Carr, Mr Lipman caused a complete copy of the documents to be made.
The next communication came not from Strachan Carr but from the firm Iles Selley. That firm was instructed by John to act in relation to the estates in lieu of Strachan Carr. By letter dated 18 April 2005 Iles Selley confirmed their client’s willingness to provide the documents to which Mrs O’Meara was entitled pursuant to s 84B, and sought further time in which to collate those documents. The letter also contended that Lipman Karas’ requests for documents, and the documents already provided by Strachan Carr, went beyond those to which s 84B entitled Mrs O’Meara. The letter continued:
Our understanding is that Mr Strachan sent to you his file in relation to the Estate/Trust. This was a file that, apparently, comprised material generated by Mr Strachan and his predecessor, Mr Frank Di Giorgio, solicitor, of Naracoorte. Some of this material is confidential to the Trustee (see Rouse & Ors v IOOF Australia Trustees Limited [1999] SASC 18), some privileged, some of little relevance and in many instances outside s 84B. For example, many documents relate to other Trusts, eg: the John Hurtle von Stanke estate, or to companies in respect of which the Trust has no relevant interest.
We understand that you have perused this material (some 541 pages), but returned it to Mr Strachan, in full. Do you retain a copy of this material? If you retain copies of selected pages only, can you please identify these copy documents by reference to your page numbers?
By letter dated 26 April 2005, Lipman Karas agreed that Iles Selley should have further time in which to provide the requested documentation. They also stated that they had retained a copy of the material which had been provided by Strachan Carr.
By letter dated 19 May 2005, Iles Selley informed Lipman Karas, amongst other things, that they had completed the task of obtaining and collating the documents and that the documents would be provided to Lipman Karas shortly. The letter continued:
In our view, you are holding copies of documents to which you are not entitled. The provision by Mr Strachan to you of his files without apparent regard to Regulation 6 was in error. We ask that insofar as you hold copies of documents which are not included in the papers which we will provide to you, these documents should be returned to us as soon as possible. Any error on the part of Mr Strachan is not and cannot be a waiver of our client’s or any other parties’ rights.
The Regulation 6 to which Iles Selley referred is reg 6 of the Trustee Regulations 1996 (SA) (“the Trustee Regulations”). That regulation contains a specification of the documents which the Trustee is required to keep, and of which a beneficiary is, pursuant to s 84B of the Trustee Act, entitled to have copies. The passage quoted from the Iles Selley letter of 19 May 2005 seems to be an assertion that the documents provided by Strachan Carr went beyond those to which Mrs O’Meara was entitled under s 84B. That impression is confirmed by later correspondence. Reference will be made later in these reasons to s 84B.
On 20 May 2005 Iles Selley provided documents (“the Iles Selley documents”) in four separate categories to Lipman Karas. This material comprised some 698 pages. It included some, but not all, of the documents which had originally been provided by Strachan Carr.
Thus, it can be seen that Lipman Karas were provided with documents by solicitors acting for John in his capacity as executor of his parents’ estates on two separate occasions. The first was on 8 April 2005 when “files” were provided by Strachan Carr (“the Strachan Carr documents”). Although these documents were returned by Lipman Karas to Strachan Carr for the purpose of them being put in appropriate order, Lipman Karas had made and kept a complete copy of them.
The second provision of documents occurred on 20 May 2005 when the Iles Selley documents were provided.
The Claim that Lipman Karas had Privileged or Confidential Documents
I have referred already to the assertions made in the Iles Selley correspondence of 18 April 2005 and 19 May 2005. Some further correspondence and telephone communications took place between Iles Selley and Lipman Karas, the detail of which has not been provided to the Court. It seems that Iles Selley requested Lipman Karas to compare the Iles Selley documents with the Strachan Carr documents provided on 8 April 2005 and which had been copied by Lipman Karas. Iles Selley asserted that any of the Strachan Carr documents which were not included in the Iles Selley documents were documents to which Mrs O’Meara was not entitled pursuant to s 84B, and they sought their return. The request for the return was repeated in correspondence from Iles Selley to Lipman Karas dated 2 June 2005 and 9 June 2005. By letter dated 14 June 2005, Lipman Kara denied that Mrs O’Meara held any documents to which she was not entitled. They said that if John maintained his request, the documents would be returned under protest. By return letter dated 14 June 2005, Iles Selley maintained John’s request for return of the documents, again making it plain that the basis of the request was that the document were not documents to which s 84B entitled Mrs O’Meara to have access.
Eventually, Lipman Karas did do the comparison which had been requested by Iles Selley and on 14 July 2005 delivered to Iles Selley the documents contained in the Strachan Carr documents which had not also been provided by Iles Selley. In this action John referred to these documents as “the Privileged Strachan Carr Documents”. It is convenient in these reasons to refer to them in the same way, but without thereby implying any judgment as to their privileged status. The Lipman Karas letter which accompanied the return of the documents included the following:
[The documents] are returned to your client under protest and we expressly deny being under any obligation to do so. We do so because we wish to avoid any distraction in the current litigation from the serious breaches of trust which are pursued against your client. You will note that a number of the documents have been used by us to formulate and particularise the claims against your client. While we have not undertaken verbatim transcript of these documents, we are well familiar with the most significant of them and have noted the important issues which arise.
The statement that the documents had been used in the formulation of Mrs O’Meara’s counter-claim is to be noted. However, between 14 July 2005 and December 2005, no action was taken by John in relation to any use which Lipman Karas may have made of the Privileged Strachan Carr Documents whilst in their possession.
In December 2005 Mrs Craddock commenced to act for John in his capacity as executor of the two estates. On 3 February 2006, Mrs Craddock wrote to Lipman Karas. Her letter recorded some of the history as to the production of documents to Lipman Karas by Strachan Carr to which I have already referred. Mrs Craddock concluded her letter with the following:
At no time did my client instruct Mr Strachan to hand over the files, nor did he waive any privilege in the documents. Indeed my client was unaware that the documents had been handed over until after the event.
In the circumstances, you have had, and continue to have, privileged and confidential information of my client in your possession. Your possession of this information gives rise to the real possibility that this information will be used to advance the interests of Mrs O’Meara, to the detriment of the Estates and our client.
On this basis, I consider that you should cease acting for Mrs L M O’Meara as a matter of urgency. If you so decline voluntarily to cease acting then I foreshadow an application to restrain you from further acting in these matters.
This was the first occasion upon which it was asserted that Mr Strachan had acted without instructions in agreeing to deliver, and then delivering, copies of his files to Lipman Karas.
By letter dated 7 February 2006, Lipman Karas informed Mrs Craddock that they declined to cease acting.
The Application for an Injunction and Other Orders

The application by John seeking the injunctions foreshadowed by Mrs Craddock was instituted on 24 February 2006. The affidavit of Mrs Craddock filed in support of the application contained an assertion of her belief that:
a significant portion of the material provided by Strachan Carr to Lipman Karas is necessarily privileged and/or confidential. I am also instructed by Mr von Stanke and believe that he claims that many of the documents are subject to legal professional privilege.
The document did not identify the documents which it was said were privileged or confidential with any precision. Mrs Craddock did, however, define the term “Privileged Strachan Carr Documents” to mean “the material provided by Strachan Carr to Lipman Karas on or about 8 April 2005 which was not subsequently provided by Iles Selley to Lipman Karas on 20 May 2005”. That meant that the precise material said to be privileged and/or confidential could only be identified by a comparison of the material provided by Stachan Carr with the material later provided by Iles Selley. No such comparison or other identification was made in Mrs Craddock’s affidavit. However, in a later affidavit, sworn 13 April 2006, Mrs Craddock did identify those documents. They are Exhibit RHC 25 to that affidavit. These were the documents which were included in the files provided by Strachan Carr on 10 April 2005, and held by Lipman Karas, with other documents, until 14 July 2005 when they were returned to Iles Selly.
By an affidavit sworn 23 February 2006, John deposed that Strachan Carr provided the documents to Lipman Karas without any instructions from him to do so, and without his knowledge. He says (in effect) that had his instructions been sought, he would have instructed Strachan Carr to provide only those documents to which Mrs O’Meara was entitled by virtue of s 84B. He denies that Strachan Carr had his authority to waive privilege over any material held by them.
Plaintiffs’ Application
As already noted, the plaintiffs in this action are the Companies. By an application filed on 24 February 2006 and amended on 28 March 2006, the Companies sought an injunction restraining Lipman Karas and Mrs O’Meara from making any use of a letter of advice dated 9 April 1992 from the firm of solicitors Wallace Degaris & Co and provided to their accountants Oakeshott and Oakeshott; an injunction restraining Lipman Karas and Mrs O’Meara from communicating in any way the contents of that advice; and an order that Lipman Karas and Mrs O’Meara deliver up all copies of that advice which may be in their possession. It can be seen that the relief sought by the Companies was of a more limited kind than that sought by John.
Both John’s and the Companies’applications were heard at the same time. Part way through the hearing, the Companies discontinued their application. The circumstances in which they discontinued their application need not be described herein.
The Court’s Inspection of the Documents
With the consent of Mrs O’Meara, the Privileged Strachan Carr Documents were inspected by the Court, without them being produced at the same time to Mr O’Bryan SC and Mr Lipman, who appeared for her. A list of the documents containing a short description was provided both to the Court and to Mr O’Bryan and Mr Lipman. Submissions were made by Ms Nelson QC, who appeared with Mr Ower for John, with respect to the documents themselves. Mr O’Bryan made submissions based on the list and on the submissions made by Ms Nelson with respect to the documents.
In general, the documents seem to be of a kind which one would expect to find in the files of a solicitor acting for the executor of the subject estates. The documents were of the following kinds: notes of instructions taken by a solicitor from John whether in meetings, or by telephone; notes of telephone attendances by a solicitor with others concerning the assets of the estate, or aspects of the administration of the estate; internal office memoranda and notes; correspondence between the solicitors for the estate and John; correspondence between the solicitors for the estate and third parties concerning assets of the estate or its administration; and copies of documents which evidenced assets or possible assets of the estate. In respect of this last category, it was claimed that even if the originals of those documents were not privileged, the copies in the Strachan Carr Privileged Documents were copy documents provided either to Mr Di Giorgio or to Strachan Carr for the dominant purpose of obtaining legal advice or for use in legal proceedings, and accordingly themselves privileged.[1]
[1] Commissioner of Australian Federal Police v Propend Finance Pty Ltd[1997] HCA 3; (1997) 188 CLR 501.
The Privileged Strachan Carr Documents also contained a large amount of material which Ms Nelson QC conceded was neither privileged nor confidential.
The Principles
As already indicated, the basis of John’s claim for injunctions is his assertion that Mrs O’Meara and Lipman Karas have had possession of, and have made use of, his privileged and confidential material contained in the Privileged Strachan Carr Documents. As noted above, Lipman Karas provided to Iles Selley on 14 July 2005 the copies of the documents comprising the Privileged Strachan Carr Documents which it had made in April 2005. At the hearing John accepted that neither Lipman Karas nor Mrs O’Meara had retained any other copies of the documents comprising the Privileged Strachan Carr Documents.
Ms Nelson QC invoked, in the first instance, the law relating to legal professional privilege as well as the equitable jurisdiction to protect confidential information in support of John’s claims for injunctions and other orders. As was pointed out by the Full Court in Trevorrow v State of South Australia (No 4),[2] legal professional privilege operates to protect the confidentiality of communications made in connection with the giving or obtaining of legal advice by relieving a party to a communication, or the holder of a document recording the communication, from being compelled to disclose the communication or document to a court or to a third party.[3] When confidential communications, including privileged communications, have been disclosed, it is the law relating to the protection of confidences which provides the remedy.[4]
[2] [2006] SASC 42; (2006) 94 SASR 64.
[3] Ibid at 70-1, [11]-[16] per Doyle CJ; at 80, [78] per Debelle J; at 100-1, [171]-[173] per White J. See also The Daniels Corporations International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at 552-3, [9]-[10] per Gleeson CJ Gaudron, Gummow and Hayne JJ, at 563 [44] per McHugh J.
[4] Commissioner of Australian Federal Police v Propend Finance Pty Ltd[1997] HCA 3; (1997) 188 CLR 501 at 565-6, 570 per Gummow J; Trevorrow (No 4) at 70, [12] per Doyle CJ; at 80-1, [79]-[81] per Debelle J, at 101, [173] per White J.
The equitable jurisdiction to protect confidences was reviewed in Trevorrow (No 4).[5] It is not necessary to repeat that review. In order to obtain relief against a breach of confidence, an applicant must show that the information has the necessary quality of confidence about it, that the information was imparted in circumstances importing an obligation of confidence, and that there was, or is threatened, an unauthorised use of that information to the detriment of the party communicating it.[6]In Corrs Pavey Whiting and Byrne v Collector of Customs (Vic)[7]Gummow J said:
It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff: (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question; and must also be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence; and (iv) there is actual or threatened misuse of that information … [Citations omitted].[8]
[5] [2006] SASC 42; (2006) 94 SASR 64 at 71-3, [18]-[25] per Doyle CJ; at 80, [80] per Debelle J; at 89-90, [117]-[188] per White J.
[6] Coco v AN Clark Engineers Ltd (1968) 1A IPR 587 at 590 per Megarry J.
[7] (1987) 14 FCR 434.
[8] Ibid at 443.
This does not mean that an assertion of legal professional privilege, or the cases involving an inadvertent disclosure of communications which are the subject of the privilege, cease to have relevance. As was said by Doyle CJ in Trevorrow (No 4):
However, the claim of legal professional privilege remains in the background. If the documents are subject to a valid claim of legal professional privilege, despite their disclosure to the plaintiff’s solicitor, and if the disclosure of the documents was by mistake, there are decisions that suggest that ordinarily a court should prevent the plaintiff from using those documents: see ISTIL Group Inc v Zahoor. That is because usually (although not always) a document subject to a valid claim of legal professional privilege will be of a confidential nature as between the provider of the advice it contains and the recipient of that advice, and because ordinarily (although not always) the confidential nature of that document will be protected by the court, exercising the court’s equitable jurisdiction to restrain breach of confidence: ISTIL (at [74]).[9]
[9] (2006) 94 SASR 64 at 70-1, [14].
The rationale for the privilege, and its importance in the administration of justice, as explained in Esso Australian Resources Limited v Commissioner of Taxation[10] indicate that the privileged nature of the documents will be a relevant consideration in the exercise of the equitable jurisdiction. The existence of the privilege is likely to be relevant to each of the three factors to be considered under the Coco formulation, and to the second, third and fourth factors in the formulation by Gummow J in Corrs Pavey Whiting and Byrne v Collector of Customs (Vic).[11]
[10] [1999] HCA 67 at [35]; (1999) 201 CLR 49 at 64. See also Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 at [9]; (2002) 213 543 at 552.
[11] (1987) 14 FCR 434
In considering whether the information was imparted in circumstances importing an obligation of confidence, the position of a reasonable solicitor in Lipman Karas’ position at the time of the receipt is to be considered.[12] The question is whether such a reasonable solicitor would have appreciated that the Privileged Strachan Carr Documents had been disclosed by mistake or inadvertence.
[12] Trevorrow (No 4) at 74-5, [41] per Doyle CJ; at 94-5, [140], [142] per White J.
Ms Nelson QC did not accept that the approach outlined above was appropriate. Ms Nelson put her submissions in the alternative. In the first place, it was submitted that, despite the decision in Trevorrow (No 4), the approach to the exercise of the equitable jurisdiction to protect confidences varied according to whether or not the subject of the claim was material to which legal professional privilege applied. It was submitted that the Coco and Corrs Pavey Whiting formulations applied in cases where the subject material was not privileged. In cases where a claim of privilege was made, it was submitted that the jurisdiction was to be exercised by applying the approach of the Court of Appeal in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership[13] and by considering whether or not there had been a waiver, express or imputed, of the privilege.
[13] (1987) 1 WLR 1027 at 1045-6.
In Guinness Peat, the Court of Appeal considered a circumstance in which, on discovery, a privileged document had been disclosed by mistake. It was held that the mistake must have been obvious to the recipient. Slade LJ, writing the judgment of the Court of Appeal said:
If … the other party or his solicitor either (a) has procured inspection of the relevant document by fraud, or (b) on inspection, realises that he has been permitted to see the document only by reason of obvious mistake, the court has the power to intervene for the protection of the mistaken party by the grant of an injunction in exercise of the equitable jurisdiction illustrated by the Ashburton, Goddard and Herbert Smith cases. Furthermore, in my view it should ordinarily intervene in such cases, unless the case is one where the injunction can properly be refused on the general principles affecting the grant of a discretionary remedy, for example, on the ground of inordinate delay.[Citations omitted.][14]
[14] Ibid.
In addition to Guinness Peat, Ms Nelson QC referred to a number of subsequent authorities in which courts have intervened to protect the confidentiality of privileged documents inadvertently disclosed in circumstances in which the recipient was, or should have been, aware of the mistake, including Derby & Co Ltd v Weldon (No 8)[15] and National Insurance Co Ltd v Whirlybird Holdings Ltd.[16]
[15] (1991) 1 WLR 73.
[16] [1994] 2 NZLR 513.
In Ms Nelson’s submission, the present case was one of inadvertent disclosure of documents which were plainly privileged. That meant that the matter was to be approached first by considering whether or not there had been a waiver of the privilege, express or imputed. If not, the Court should intervene to protect the privilege if a reasonable solicitor, in the position of Lipman Karas, would have appreciated that a mistake had been made.
Ms Nelson QC also referred to Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd[17] in which Goldberg J reviewed a number of the authorities concerning inadvertent disclosure of privileged material. It is not necessary to repeat that review. Meltend concerned the question of whether privilege had been lost over a document disclosed as a non-privileged document in a list of documents, and inspected by the opponent. Goldberg J found that the circumstances were not such that the opponent should have realised that the mistake had been made.
[17] (1997) 75 FCR 511.
Ms Nelson sought to distinguish Trevorrow (No 4), submitting that this case, unlike Trevorrow (No 4), was a case of inadvertent disclosure. I do not accept that this is a ground of distinction. The premise upon which the submission is based is not established. The disclosure in this case can hardly be described as inadvertent. At best for John, it is a case of intended, but unauthorised, disclosure. No evidence was led from Mr Strachan to indicate that the disclosure of the documents was inadvertent. The circumstances to which I have already referred above do not suggest that there was anything inadvertent at all about the provision by Strachan Carr of the copies of the respective solicitors’ files relating to the estate. On the contrary, the disclosure appears to have been quite deliberate. Further, I do not think it can be said that the reasoning of either Doyle CJ or myself in Trevorrow (No 4) rested on a characterisation of the disclosure in that case as having been inadvertent.
I do not accept the submission of Ms Nelson QC with respect to the approach to be applied. It is contrary to the approach adopted by Doyle CJ and myself in Trevorrow (No 4). Further, by seeking to have the Court focus first on the question of whether the privilege has been lost, the submission does not give effect to the purpose of the privilege as stated in Trevorrow (No 4) and by the High Court in The Daniels Corporation International Pty Ltd v ACCC.[18] Legal professional privilege “may be availed of to resist the giving of information”.[19] It “describes a person’s immunity from compulsion to produce documents that evidence confidential communications about legal matters made between a lawyer and client or between a lawyer and a third party for the benefit of a client”.[20]
[18] [2002] HCA 49; (2002) 213 CLR 543.
[19] Ibid per Gleeson CJ, Gaudron, Gummow and Hayne JJ at [9], 552.
[20] Ibid per McHugh J at [44], 563. [Footnotes omitted.]
This is not a case of John seeking to resist the production of documents. Rather he is seeking to restrain the use of material which was previously disclosed. This suggests that focus on the circumstances in which John would have an immunity from compulsion to produce the documents is inappropriate.
However, as already noted, the fact that the documents may be privileged in John’s hands is a relevant consideration. Further, if it should have been obvious to Lipman Karas that a mistake had been made in the provision of the documents to them, that would be very relevant to the issue of whether the documents had been disclosed in circumstances importing a duty of confidence. This issue will be considered further below.
Ms Nelson’s alternative submission was that it should have been obvious to Lipman Karas, on receipt of the files from Strachan Carr, that a mistake had been made. The submission was that in those circumstances the privileged material had been disclosed in circumstances importing an obligation of confidence. For reasons which will appear below, I do not accept this submission.
Discretionary Considerations
Ms Nelson QC submitted that there is no discretion in this Court “to refuse to exercise the equitable jurisdiction according to its view of the materiality of the communication, the justice of admitting or excluding it or the like”.
There are authorities to support this submission. For example, in Goddard v Nationwide Building Society,[21] Nourse LJ said:
[O]nce it is established that a case is governed by Lord Ashburton v Pape [1913] 2 Ch 469 there is no discretion in the court to refuse to exercise the equitable jurisdiction according to its view of the materiality of the communication, the justice of admitting or excluding it or the like. The injunction is granted in aid of the privilege which, unless and until it is waived, is absolute. In saying this, I do not intend to suggest that there may not be cases where an injunction can properly be refused on general principles affecting the grant of a discretionary remedy, for example on the ground of inordinate delay.[22]
[21] (1987) 1 QB 670.
[22] Ibid at 685.
This passage was explained by Lawrence Collins J in ISTIL Group Inc v Zahoor:[23]
… Nourse LJ was not saying in Goddard’s case that the court should never apply the general principles relating to confidential information. What he was saying was that in this context (protection of privileged documents under the Lord Ashburton v Pape principle) the court was not concerned with weighing the materiality of the document and the justice of admitting it.[24]
[23] [2003] 2 All ER 252.
[24] Ibid at 273. See also Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511 at 524 per Goldberg J; Kingston v State Fire Commission (1998) 8 Tas R 152 at 161 per Slicer J.
There may be a question as to whether the passage in Goddard upon which Ms Nelson QC relies remains good law in the light of the current understanding that legal professional privilege is a shield or an immunity from production, and that once a document which was otherwise privileged comes into the hands of a third party, it is the equitable jurisdiction with respect to the protection of confidences which provides the remedy.[25] However, having regard to the factual findings which I make below, I do not consider it necessary to discuss that question. Further, and in any event, John seeks not only an injunction restraining the use of confidential information, but also orders requiring Lipman Karas to cease acting for Mrs O’Meara, and the striking out of pleadings. Issues of materiality and proportionality are relevant to such applications.
[25] Cf Webster v James Chapman and Co [1989] 3 All ER 939 at 945 per Scott J.
Trust Documents

Mr O’Bryan SC submitted that the documents comprising the Privileged Strachan Carr Documents were documents to which Mrs O’Meara was entitled to have access as a matter of substantive entitlement. This was so, it was said, because they were trust documents to which Mrs O’Meara, as a beneficiary, had an equitable right to have access, or, alternatively, a right under s 84B of the Trustee Act to inspect. Mr O’Bryan relied upon the decision of the Full Court in Rouse v IOOF Australia Trustees Limited.[26] The submission was that this entitlement of Mrs O’Meara was a complete answer to the relief sought by John.
[26] [1999] SASC 181, (1999) 73 SASR 484.
Section 84B(1) of the Trustee Act requires a trustee to keep such records relating to his administration of the trust property as may be prescribed. Section 84B(2) requires a trustee, at the request of a beneficiary under the trust, to produce the records kept in accordance with the obligations established by sub-s (1) to a beneficiary of the trust and permit that beneficiary to examine and make copies of those records.
Regulation 6(1) of the Trustee Regulations prescribes 11 categories of documents which a trustee must keep for the purposes of s 84B. It is not necessary to specify each of those categories, as Mr O’Bryan SC relied upon four only, namely:
(b) each letter received by the trustee and a copy of each letter sent by the trustee;
(c)a copy of each statutory declaration and each affidavit made in the course of the administration of the trust;
…
(f)all written instructions for the sale or transfer of any trust property or any asset which forms or formed part of the trust property and any independent valuations obtained in relation to those assets;
(g)Minutes of the proceedings of all meetings relating to administration of the trust and which the trustee was or was entitled to be present.
There is an issue in this case as to whether some or all of the privileged Strachan Carr documents are documents to which s 84B applies or whether they are “trust documents” to which the equitable right of inspection by a beneficiary attaches.
In my opinion, Rouse, although relevant and helpful, is not decisive of the issue in this case. In Rouse, the principal question was whether a trustee had a discretion to refuse a beneficiary access to trust documents on the ground that the contents of the documents were privileged or confidential. The Full Court upheld the existence of such a discretion. The parties in Rouse accepted that the documents in question (essentially the contents of counsel’s brief in relation to a dispute about trust assets, and communications between the trustee and an unincorporated association of beneficiaries) were trust documents. Rouse was not decided on the basis that the documents in question were s 84B documents. Nor did Rouse decide the question of whether there was a discretion to refuse access to s 84B documents on the grounds of confidentiality or privilege. On this topic, the Chief Justice, who wrote the leading judgment of the Court, said:
It is also my view that the judge has not attempted to decide whether or not the appellants have a right of inspection under s 84B. As to that, the first issue that arises is the fundamental question of whether the documents in question are prescribed trust records. The Trustee Regulations 1996 set out the records that must be kept. Most of the prescribed records are financial and accounting records, and administrative records relating to the trust assets. I doubt whether the documents in issue are of this type. My impression is that documents of this type have already been disclosed. Much of what one would expect to find in counsel's brief does not appear to me to fall within the description of prescribed records. I suspect that some of the documents in counsel's brief would be prescribed records, but I suspect that those are documents that have an independent existence and have been or can be inspected in any event. The prescribed records do include "each letter received by the trustee and a copy of each letter sent by the trustee." The second group of documents in question therefore literally fall within that provision. There remains the question of whether these letters relate to the administration of the trust property. And there is the more difficult issue of whether the right of inspection conferred by s84B is subject to the same limit as that which the judge identified in relation to the equitable right of inspection.
The answer to the appellants' complaint about these matters is that the judge has not decided these points, and they remain for decision.[27]
[27] Ibid at [66]-[67], 495.
Furthermore, it was common ground between the parties in Rouse, both at first instance and on appeal, that the documents in question were “trust documents” for the purposes of the existence of the equitable right of a beneficiary to inspect. The Court was not required to address that question. While noting that it is not always easy to identify what is a trust document, the Chief Justice said that he would proceed on the basis accepted by the parties.[28]
[28] Ibid at [87], 497.
In the present case, it is likely that some, but not all, of the Privileged Strachan Carr Documents would come within reg 6(1). The correspondence between Strachan Carr on the one hand, and John on the other, would seem to come within reg 6(1)(b). It is arguable that some of the notes of instructions made by Mr Di Giorgio or by Strachan Carr come within reg 6(1)(g). It is also likely that some of the Privileged Strachan Carr Documents could be properly characterised as trust documents. But many of the Privileged Strachan Carr Documents are not the trustee’s documents at all. They are documents prepared and held by the solicitors retained by him. Mr O’Bryan SC did not develop any submission that documents prepared by an agent of a trustee are themselves trust documents, or documents to which s 84B applied. Mr O’Bryan did contend that if the agent provided documents to the trustee, then those documents in the trustee’s hands became trust documents but he acknowledged that a trustee is not under any obligation to produce for inspection documents prepared by an agent which have never come into the trustee’s possession.
The parties did not attempt to identify which of the Privileged Strachan Carr Documents came within s 84B and those which did not, nor to identify those documents which were trust documents for the purposes of the equitable right of inspection, and those which were not. It is not an easy task for the Court itself to carry out, and I will refrain from attempting to do so. I am satisfied that there are at least some documents within the Privileged Strachan Carr Documents which are not documents to which s 84B applies, and that there are some which could not reasonably be characterised as trust documents for the purposes of the exercise of the equitable right of inspection. That being so, I do not accept the submission of Mr O’Bryan SC that Mrs O’Meara’s entitlement to inspection provides a complete answer to John’s claims. As it will therefore be necessary to consider the remaining issues, I do not consider it necessary to attempt the identification which the parties themselves did not attempt.
The Attitude of a Reasonable Solicitor
Mr O’Bryan SC submitted that a reasonable solicitor in a position of Lipman Karas would not have thought it obvious, upon receipt of the Strachan Carr documents, that a mistake had been made. I consider that there is force in that submission and I accept it.
The evidence discloses that Lipman Karas had been pressing Strachan Carr, then acting for John, for the production of documents relating to the administration of the estate. Strachan Carr had been referred to s 84B of the Trustee Act. Then on 23 March 2005 proceedings were instituted in this Court seeking to compel the production of the s 84B documents to which Mrs O’Meara was entitled.
It is evident that Strachan Carr agreed to provide their files in an attempt to compromise those proceedings. Mr Lipman was entitled to consider that that agreement was a considered decision. He was entitled to regard Mr Strachan as an experienced solicitor in this field. It was not a case of him overbearing an inexperienced practitioner. The Strachan Carr letter of 8 April 2005 referred expressly to “a copy of the respective files” being provided. The documents provided were plainly from solicitor’s files. This suggests strongly that an intention to provide solicitors’ files had been formed. It is not as though documents of one character were being provided, but documents of a different character were mistakenly included. Further, no claim for privilege was made in respect of the files. The Strachan Carr letter of 8 April 2005 identified the documents which were not being provided without there being any suggestion that documents of a privileged kind which one would ordinarily expect to find on a solicitor’s file had been withheld.
It is true that the documents provided went beyond that which, strictly speaking, s 84B required to be produced. It is also true that it was the s 84B documents which had been the subject of the correspondence by Lipman Karas on behalf of Mrs O’Meara and which were the subject of the proceedings instituted by Mrs O’Meara. Those considerations, however, do not, in my opinion, warrant a different conclusion. When an experienced solicitor provides copies of his files, in particular in an attempt to compromise legal proceedings, it is difficult to conclude that a reasonable solicitor, in the position of the recipient, should think that a mistake had been made.
It is also relevant to note that when Lipman Karas wrote to Strachan Carr on 10 April 2005 they referred to the files as “your clients’ legal files”. If a mistake had been made by Strachan Carr, this description by Lipman Karas should have alerted them, and later Iles Selley, to the character of the files which had been provided. Despite this, there was no immediate assertion that a mistake had been made. Further, the letter from Iles Selley to Lipman Karas of 18 April 2005 revealed an understanding by that firm that Strachan Carr had provided its “file in relation to the Estate/Trust” which included material generated by both Strachan Carr and Mr Di Giorgio.
Waiver
It is not necessary to consider whether the privilege had been waived, nor whether Strachan Carr had the authority to waive John’s privilege. If it had been necessary, I would have been satisfied that there had been either an express or implied waiver of privilege. It was express because of the deliberate decision by Strachan Carr to provide to Lipman Karas their files. In the alternative, the waiver should be implied because Strachan Carr, on behalf of John, had made a use of the privileged documents in a way which made continued maintenance of a claim for privilege unfair. That use was to provide the files to Lipman Karas in performance of an agreement for the compromise of the litigation commenced by Mrs O’Meara. The discussion by Goldberg J in Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd on this topic is relevant.[29]
[29] (1997) 75 FCR 511 at 552-4.
Control of the Conduct of Solicitors
Ms Nelson QC submitted, in the alternative, that the Court’s power to control the conduct of solicitors as officers of the Court should be invoked as a basis for the orders sought by John.
The availability of a power to exercise authority over solicitors as officers of the Court as to the propriety of their actions is well established. The existence and exercise of the power have been discussed in a number of authorities including Davies v Clough;[30] Newman v Phillips Fox;[31] Frankland River Olive Company Ltd v Charters Securities Pty Ltd;[32] DPP for Western Australia v Bennett & Co;[33] Rouse v IOOF Australia (No 2);[34] Kallinicos v Hunt[35] (in which a number of authorities were reviewed); and Spincode Pty Ltd v Look Software Pty Ltd[36] The power exists to protect the integrity of the judicial process and to ensure that the administration of justice is not brought into disrepute by the conduct of members of the legal profession. In some cases, the occasion for an exercise of the power has been determined by applying an objective test, namely, whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required that a solicitor act, or be restrained from acting, in a specified way.
[30] (1837) 8 Sim 262 at 267; 59 ER 105 at 106-7.
[31] [1999] WASC 171 at [21]-[25]; (1999) 21 WAR 309 at 315-6.
[32] [2004] WASC 88 at [25].
[33] [2005] WASC 1 at [33]-[4].
[34] [1999] SASC 205 at [56].
[35] [2005] NSWSC 1181; (2005) 64 NSWLR 561.
[36] [2001] VSCA 248; (2001) 4 VR 501.
The submission of Ms Nelson QC was that the conduct of Lipman Karas in the manner in which they obtained the Privileged Strachan Carr Documents, and then used them, despite being on notice of the assertion that they included documents, including privileged documents, to which Mrs O’Meara was not entitled, required the exercise of the supervisory jurisdiction.
For the same reasons given on the topic of whether Lipman Karas should have realised that a mistake had been made, my opinion is that it cannot reasonably be concluded that the manner by which Lipman Karas obtained the Privileged Strachan Carr Documents involved any affront to the integrity of the judicial process.
The fact that Lipman Karas retained the documents, and made use of them, despite Iles Selley’s request for their return, has given me pause. As already noted, legal professional privilege is an important common law right. It serves an important purpose in the administration of justice. Legal practitioners are expected to recognise its importance, and to respect claims for the application of the privilege when they are made. They should not engage in opportunistic conduct which abrogates the efficacy of the privilege. When disputes as to the applicability of the privilege arise, it is not appropriate, in my opinion, for practitioners to ignore the claim of privilege or confidentiality, and to make use of the documents in question in a way which frustrates that claim, at least without putting their opponent on notice of their intention to do so, and without giving the opponent an opportunity to have the dispute determined by a court. If practitioners do proceed in this way, an occasion for the exercise of the supervisory jurisdiction may arise. What I have just said is intended to be comment of a general nature, and not a characterisation of the conduct of Lipman Karas in this case.
In the present case, although Lipman Karas did make use of some of the documents in the preparation of the counter-claim before the dispute about their entitlement to access to the documents had been resolved, I do not consider that the supervisory jurisdiction should be invoked. First, the documents in question are not, in my judgment, the subject of any obligation of confidence. It would be an incongruous outcome if Lipman Karas were, nevertheless, to be restrained from acting for Mrs O’Meara.
Secondly, there is the fact of John’s delay in taking any action to restrain Lipman Karas. As already noted, apart from the claims and requests in correspondence, no action was taken by John to restrain the use of the documents, or to restrain Lipman Karas from acting, until February 2006. This is an area in which, if action is to be taken, it must be taken promptly.
Thirdly, John’s solicitors requested Lipman Karas to inspect the documents which it is now said are privileged and confidential. Iles Selley requested Lipman Karas to make the comparison between the Strachan Carr documents and the Iles Selley documents so as to identify the documents which should be returned. It is those documents which are now the subject of John’s claim. In effect, John requested Lipman Karas to engage in a process by which it was almost inevitable that they would obtain a certain familiarity with the documents which he now asserts are privileged and confidential. A reasonable and fair-minded person would not consider that John, having required Lipman Karas to develop that familiarity, should now be able to restrain Lipman Karas from acting on account of their having done so.
The circumstances of this case considered as a whole do not suggest, to my mind, that an exercise of the supervisory jurisdiction is required.
Discretionary Considerations
For the reasons given above, I am not satisfied that it is appropriate to make the orders sought by John. That makes it unnecessary, strictly speaking, to consider a number of discretionary considerations which would otherwise arise.
However, in case this matter should go further, I indicate briefly my present views regarding some aspects of the case relating to the exercise of the discretion.
I start with the proposition that it is no minor matter to restrain a firm of solicitors from acting for a litigant. That is not so much because of the impact on the firm of solicitors involved, but because it deprives a litigant of the solicitor of his/her choice. That is a particularly pertinent consideration in this case. Lipman Karas had been acting for Mrs O’Meara since about the middle of 2004. It is obvious that they have acquired an extensive knowledge regarding Mrs O’Meara’s claims, and the matters which underpin them. The value of that knowledge would be lost if Mrs O’Meara was required to instruct fresh solicitors. It is likely that it could be replaced only at significant expense. Further, it is likely that the knowledge of Lipman Karas has continued to be acquired, and developed, in the period since the Strachan Carr documents were provided to Lipman Karas. In this respect, the failure by John, until February 2006, to institute any proceedings seeking to have Lipman Karas restrained from acting is very relevant. As I have said earlier, this is an area in which a litigant should act promptly.
Next, although Lipman Karas have asserted that use has been made of the Privileged Strachan Carr Documents in the preparation of the counter-claim, it seems (based on the submissions of Mr O’Bryan SC) that any such usage has been minor. I do not think it necessary to make precise findings as to the actual usage. There are, in any event, difficulties in doing so. Ms Nelson QC, on behalf of John, abandoned the claim for privilege in respect of a substantial number of the Privileged Strachan Carr Documents. Ms Nelson also acknowledged that the originals of other documents would not themselves be privileged but contended that it was the copies of those documents in the hands of Strachan Carr which had that status. Although use has been made of some of the Privileged Strachan Carr Documents, it is not clear whether that usage has been of non-privileged documents, or to documents the originals of which could not ever have been the subject of privilege. In either case, it would be inappropriate to require Lipman Karas to cease acting.
For these brief reasons, I doubt that I would have thought it appropriate, in any event, to make an order restraining Lipman Karas from continuing to act for Mrs O’Meara.
Order of the Court
For the reasons given above, the application of the first defendant contained in the Notice for Specific Directions filed on 24 February 2006 [FDN 23] is dismissed. I will hear the parties as to costs.