Hallett v Endeavour Industries Ltd

[2016] NSWSC 886

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Hallett v Endeavour Industries Ltd [2016] NSWSC 886

Hearing dates:

24 June 2016

Date of orders:

28 June 2016

Decision date:

28 June 2016

Jurisdiction:

Common Law

Before:

Rothman J

Decision:

1. The Court determines that the following documents enumerated in MW2 to the Affidavit of Melanie Wilde of 15 June 2016 are not and cannot be the subject of legal professional privilege by the defendant against the first plaintiff and the Unit Trust: 2, 3, 4, 5, 6, 7, 9, 12, 13, 16, 25, 26, 27, 42, 54, 58 and 61;

 

2. The above documents be produced to the Court;

 3. Other documents in the aforesaid MW2 be returned to the defendant.

Catchwords:

PRACTICE AND PROCEDURE – subpoenas – legal professional privilege – onus of proof – allegation of joint client and therefore privilege does not run – joint client in some respects and in other respects a wholly independent relationship – documents inspected and rulings on documents given.

Legislation Cited:

Evidence Act 1995
Uniform Civil Procedure Rules 2005

Cases Cited:

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1

Category:

Procedural and other rulings

Parties:

Keith Martin Hallett (First Plaintiff)
Elisabeth Sigrid Hallett (Second Plaintiff)
K. M & E. S Hallett Pty Ltd (Third Plaintiff)
Endeavour Industries Ltd (Defendant)

Representation:

Counsel:
F Assaf (Plaintiff)
D Hughes (Defendant)

  Solicitors:
Sparke Helmore Lawyers (Plaintiff)
Wilde Legal (Defendant)

File Number(s):

2015/211749

Judgment

1. HIS HONOUR: By an Amended Notice of Motion filed 16 June 2016, the defendant, Endeavour Industries Ltd (“EIL”) seeks an order pursuant to the Uniform Civil Procedure Rules 2005, r 33.4(1) modifying or setting aside in part a subpoena to Chapman Thackeray issued on 1 April 2016 (the subpoena) to the extent that Chapman Thackeray (a firm of solicitors) is not obliged to produce to the Court the documents identified as privileged in Exhibit MW2 to the Affidavit of Melanie Wilde dated 15 June 2016.

2. In the alternative, an order is sought that, following production of the documents, no party other than the defendant have access to the privileged documents. The subpoena dated 1 April 2016 is addressed to Chapman Thackeray Law, or its Managing Director, to produce all drafts of the Unitholders’ Agreement and all documents referring to, or evidencing instructions from or on behalf of, EIL to Chapman Thackeray Law regarding the drafting of the Unitholders' Agreement and amendments to same.

Background

3. It is necessary to explain some background to the motion and to the proceedings. That which follows is not a finding or conclusion but a summary of the relevant manner in which the plaintiffs plead their case.

4. The plaintiffs commenced proceedings by the filing of a Statement of Claim on 20 July 2015. The plaintiffs allege, relevantly to this application, that there was a Joint Venture arrangement between the plaintiffs and the defendant in or about 2011. The Joint Venture arrangement was one where the parties did, and would continue to, conduct an olive growing business in the Hunter Valley in New South Wales.

5. As part of the establishment of the Joint Venture and its conduct, the plaintiffs, they allege at the request of the defendant, provided software services to the defendant or to the unit trust. Essentially, the plaintiffs sue for reimbursement and/or payment for the work done. The plaintiffs proceed on a number of bases, one of which is that the Joint Venture was established and operated both formally and informally. The claim is for $1.8 million or thereabouts.

6. The first plaintiff is a Director and shareholder of the third plaintiff (the software company), and a joint owner of the property on which olive trees were grown and an experienced software engineer. The first plaintiff owns a registered business name, styled “Lonely Goat Olive Trees”.

7. The second plaintiff, Mrs Elisabeth Sigrid Hallett, is the wife of the first plaintiff, a joint owner of the rural property and a person who authorised the first plaintiff to speak on her behalf in dealings with the defendant.

8. It is alleged that the parties negotiated with each other for the purpose of forming a Joint Venture from in or about late November 2011. The negotiations went well and the business venture seemed to move forward.

9. The business venture involved the purchase of Mungarra Olive Trees from the Mungarra Nursery. The arrangement in relation to the Joint Venture is alleged to have been part-performed.

10. One example of that part-performance is that, on 14 December 2011, after a range of discussions and mutual representations, the first plaintiff paid a $1,500 deposit to the Mungarra Nursery to secure the purchase of the Mungarra Olive Trees. The first plaintiff told the officers of the defendant of the payment of the deposit; that the olive trees belonged to both the defendant and the plaintiffs; that the trees were off the market; and that the total cost involved was approximately $60,000 (excluding labour).

11. On or about 16 February 2012, the first plaintiff and an officer of the defendant travelled to the Mungarra Nursery to inspect the olive trees and the officer of the defendant suggested that the entire 140,000 Mungarra Olive Trees ought be purchased and, once purchased, could be stored at the defendant’s property. To this suggestion, the first plaintiff, on behalf of all of the plaintiffs, agreed to purchase 140,000 olive seedlings for $30,000.

12. The olive trees were transported by arrangement between the parties and, in or about May 2012, the defendant prepared a document headed “Memorandum of Understanding made between Endeavour Industries Ltd and Lonely Goat Olives Pty Ltd” relating to the desire of the parties to enter into an agreement to conduct a business in relation to the olive trees.

13. It is alleged in the Statement of Claim that the parties agreed that they would conduct a Joint Venture. The agreement was partly oral, partly written and partly by conduct, or so it is alleged.

14. As a consequence of what is said to be an agreement between the parties, the defendant occupied part of the rural property owned by one or more of the plaintiffs.

15. It was agreed that the Joint Venture would lease approximately three hectares of land located on the plaintiffs’ rural property at a rent of $10,000 per month and that the defendant would guarantee payment of the rent. A draft Lease was compiled and amendments made by one or more of the parties.

16. In or about 16 October 2012, allegedly in furtherance of the Joint Venture, the defendant caused the incorporation of a company known as Endeavour Olive Trees Pty Ltd of which the first named plaintiff was appointed one of two directors together with an officer of the defendant. On 13 November 2012, a Unit Trust was established called the Endeavour Olive Trees Trust (‘the Trust”) in which Endeavour Olive Trees Pty Ltd would be the Trustee of which the initial Unitholders were the first named plaintiff and, it seems, EIL was the other.

17. The work that was performed and for which the plaintiffs sue for payment was performed for the Joint Venture and/or the Unit Trust, to the extent that they may be different.

18. Thereafter, for some significant period, the parties, being EIL and the plaintiffs, sought to negotiate a Unitholders’ Agreement and between December 2013 and February 2014 entered into negotiations with a view to executing a Unitholders’ Agreement to regulate the conduct of the Joint Venture, the Unit Trust and the relationship and modus operandi of the Unitholders.

19. According to the Statement of Claim, the plaintiff alleges that Chapman Thackeray Law, solicitors, were, at least at some period of time, acting for and on behalf of EIL and, in that capacity, prepared a draft Unitholders’ Agreement between each of EIL, the plaintiffs and the Trustee (“Draft Unitholders’ Agreement”).

20. The Draft Unitholders’ Agreement recorded the arrangements in place between the parties as at 7 February 2014 in respect of the ownership governance and operation of the Trustee, the conduct of the business of the Joint Venture and the conduct of the business of the development, commercialisation and sale and/or licensing of the software.

21. It is said that representations were made by EIL as to cooperation and liaison in good faith with a view to preparing a project plan; engaging the software company as an independent contractor; the payment by the defendant of the software company and an annual licence fee; and that the defendant would pay and continue to pay the licence fee to the Trustee until such time as the Trustee achieved sufficient turnover to allow it to be profitable after which time the licence fee would reduce to $1 per annum.

22. The Unitholders’ Agreement was never executed.

23. Nevertheless, the parties, being the plaintiffs and the defendant, seemed, on the material before the Court, to retain and pay for services (and goods) on behalf of the Trustee after which it would be reimbursed by the Trustee by way of Unitholder loan in the books of the Trust Company.

24. The foregoing is probably sufficient background of the principal proceedings to allow an understanding of the issues between the parties on this motion. In short, as is clear from the terms of the Subpoena, the plaintiff has sought the production of, and will eventually seek access to, instructions from the defendant to Chapman Thackeray, advices received by the defendant from Chapman Thackeray that evidence instructions and all drafts of the Unitholders’ Agreement.

25. The defendant’s motion seeks to set aside the Subpoena (or pre-empt access to any production) in relation to a number of documents it claims are the subject of legal professional privilege. At the instance of the Court, the documents were produced to the Court over objection.

26. Some documents fitting the descriptions in the subpoena have been produced without a claim for privilege on the basis that they are documents that were otherwise sent to the parties and therefore documents on which privilege has been waived. The plaintiffs, being the respondents to the motion, object to the Court inspecting the documents as they say it is for the defendant to satisfy the Court that the documents are privileged and it is not for the Court itself to determine that issue in the absence of admissible evidence satisfying the onus of proof.

27. Ultimately the issues can be described in a relatively confined way, but the description will be misleading, if it were to give the impression that the issues are simple.

Issues and Submissions

28. Essentially, the defendant, being the applicant on the motion, relies on a number of documents including a retainer between it and Chapman Thackeray and correspondence (not otherwise privileged) that it says discloses the relationship of legal representative/advisor and client seeking advice as to the formation and documents to which the client should agree, relating to the formation and operation of a Joint Venture. As a consequence, the defendant says the documents over which it claims privilege that have been sought by the plaintiffs are privileged.

29. They are documents in a solicitor’s file created in the ordinary course of a legal retainer to draft and advise on a contract. As a consequence, the defendant seeks orders as earlier described setting aside the subpoena, at least insofar as it requires the production of privileged documents or modifying the subpoena so that any production remains confidential, being orders restricting access to the documents over which privilege has been claimed.

30. The Affidavits that are relied upon are the Affidavit of Melanie Wilde of 15 June 2016. Affidavits have also been sworn by David Thackeray (15 June 2016) Peter Chapman (2 May 2016) and Andrew Hughes (15 June 2016). Mr Hughes is a director of the defendant, and Messrs Thackeray and Chapman are principals of Chapman Thackeray Law. Each attest to the fact that between October 2013 and 28 November 2014 Chapman Thackeray Law was retained by the defendant to provide legal advice to the defendant. The retainer is in evidence and it is dated 8 October 2013.

31. The scope of the work contained in the retainer is for Chapman Thackeray Law to perform the following work:

“Act on behalf of Endeavour Industries Limited to prepare a Unitholders’ Agreement in relation to the Endeavour Olive Trees Unit Trust, generally in accordance with your notes emailed on 26 September 2013 and our telephone discussion on 2 October 2013.”

32. Further, the Affidavit of Melanie Wilde attests to the fact that she has conducted a review of the documents that Chapman Thackeray considers answers the subpoena and annexes a Schedule being a list of documents subpoenaed (MW2) and in the possession of the solicitors. The Schedule describes each document and signifies the provision in the Evidence Act 1995 upon which the defendant relies in claiming privilege. Some documents in the list do not rely on any provision, because privilege is not claimed in relation to those documents. Attached to these reasons for judgment is a copy of the Schedule described.

General Principles Relevant to the Existence of Privilege

33. Pursuant to the provisions of UCPR r 1.9(3), a person may object to the producing of a document on the ground that the document is a privileged document or to answer a question on the ground that the answer would disclose privileged information. Each of the terms “privileged document” and “privileged information” is defined in the dictionary to the Uniform Civil Procedure Rules.

34. A privileged document is a document that contains privileged information. Privileged information is information of which evidence could not, by virtue of the operation of Part 3.10, Division 1 of the Evidence Act be adduced in the proceedings over the objection of any person.

35. Division 1 of Part 3.10 of the Evidence Act includes s 117, s 118, s 119, s 121, ss 124-126. Those sections deal with legal professional privilege, being the disclosure of a confidential communication between a client and lawyer or between two or more lawyers acting for the client or the contents of a confidential document prepared by the client, lawyer or another person for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice.

36. Further, s 119 of the Evidence Act deals with the privilege between lawyer and client in relation to confidential communications for the dominant purpose of the client being provided with professional legal services relating to proceedings or anticipated or pending proceedings. Sections 121, 122, 123, 125 and 126 deal with circumstances in which there is a loss of client legal privilege. Section 124 deals with the situation of joint clients.

37. It is appropriate for me to recite the provisions that are most relevant to the determination of the issues between the parties in this preliminary hearing:

“118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing 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 another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.”

“121 Loss of client legal privilege: generally

(1)    This Division does not prevent the adducing of evidence relevant to a question concerning the intentions, or competence in law, of a client or party who has died.

(2)    This Division does not prevent the adducing of evidence if, were the evidence not adduced, the court would be prevented, or it could reasonably be expected that the court would be prevented, from enforcing an order of an Australian court.

(3)    This Division does not prevent the adducing of evidence of a communication or document that affects a right of a person.”

“122 Loss of client legal privilege: consent and related matters

…

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3)    Without limiting subsection (2), a client or party is taken to have so acted if:

(a)    the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or

(b)    the substance of the evidence has been disclosed with the express or implied consent of the client or party.”

“124 Loss of client legal privilege: joint clients

(1)    This section only applies to a civil proceeding in connection with which 2 or more parties have, before the commencement of the proceeding, jointly retained a lawyer in relation to the same matter.

(2)    This Division does not prevent one of those parties from adducing evidence of:

(a)    a communication made by any one of them to the lawyer, or

(b)    the contents of a confidential document prepared by or at the direction or request of any one of them,

in connection with that matter.”

38. The issues of lawyer client privilege were discussed and summarised by Young J in AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at 44-47 [44]. In numbered sub-paragraphs of [44] his Honour set out the general principles that apply:

“(1)    The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 (‘Grant v Downs’) at 689; Commissioner of Taxation v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266 at 278 [30] (‘FCT v Pratt Holdings’); and AWB v Cole at [63].

(2)    The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document’s maker, or of the person who authorised or procured it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication: see AWB v Cole at [110].

(3)    The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving ‘legal advice’: National Crime Authority v S (1991) 29 FCR 203 at 211–212 per Lockhart J; Candacal Pty Ltd v Industry Research & Development Board [2005] FCA 649; (2005) 223 ALR 284 (‘Candacal’) at 298 [70]; Seven Network Limited v News Limited [2005] FCA 142 at [6]–[8]. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 (‘Kennedy v Wallace’) at 189–190 [12]–[17] per Black CJ and Emmett J and at 211–212 [144]–[145] and at 215–216 [166]–[171] per Allsop J; see also Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398.

(4)    Where communications take place between a client and his or her independent legal advisers, or between a client’s in-house lawyers and those legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications: Kennedy v Wallace [2004] FCA 332; (2004) 208 ALR 424 at 442 [65] per Gyles J; affirmed on appeal, Kennedy v Wallace at 191-192 [23]-[27] per Black CJ and Emmett J. In Kennedy v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given.

(5)    A ‘dominant purpose’ is one that predominates over other purposes; it is the prevailing or paramount purpose: AWB v Cole at [105]-[106]; FCT v Pratt Holdings at 279-280 [30] per Kenny J.

(6)    An appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence: Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357 at 366 [35] per Finn J.

(7)    The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] 1 Ch 317 (‘Balabel’) at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon and Woodrow [1995] 1 All ER 976 (‘Nederlandse’) at 983; Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] UKHL 48; [2005] 1 AC 610 (‘Three Rivers’) at 652-653 [43]-[44], 657-658 [59]-[60], 681 [114] and 683 [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 (‘Dalleagles’) at 332-333; DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 1191; (2003) 135 FCR 151 (‘DSE’) at 161-173 [25]–[71]; and AWB v Cole at [100]-[101].

(8)    Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: Daniels at 563 [44] per McHugh J; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (‘Propend’) at 550 per McHugh J; Dalleagles at 333–334 per Anderson J; Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244 (‘Stirling’) at 245–246 per Lockhart J; and Kennedy v Lyell (1883) 23 Ch D 387 at 407; Lyell v Kennedy (1884) 27 Ch D 1 at 31 per Bowen LJ; Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 at 266 per Lindgren J.

(9)    Subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda or other documents made by officers or employees of the client that relate to information sought by the client’s legal adviser to enable him or her to advise: Stirling at 246. The privilege extends to drafts, notes and other material brought into existence by the client for the purpose of communication to the lawyer, whether or not they are themselves actually communicated to the lawyer: Saunders v Commissioner of Australian Federal Police (1998) 160 ALR 469 at 472.

…

(12)    The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege.”

39. I accept that it is for the person claiming privilege, the defendant, to establish the documents are privileged. I do not accept the plaintiffs’ submission that the defendant has not satisfied that onus, at least at the initial level.

40. The defendant, as already stated, has adduced the retainer between Chapman Thackeray and the defendant (the scope of which is recited above).

41. Further, the plaintiffs’ Statement of Claim alleges that Chapman Thackeray are “the solicitor acting on behalf of the defendant” (see above). Evidence has been adduced of invoices showing the work that was done, which is described in those invoices and both Messrs Thackeray and Chapman attest to the fact that the documents were created for the dominant purpose of providing legal advice to the defendant.

42. Over and above that, the terms of the Subpoena seek drafts of Unitholders’ Agreements and all instructions in relation to it. On the face of it, such documents would be within the scope of work of the retainer as earlier set out.

43. As a consequence, prima facie and without more, the documents over which privilege has been claimed would be privileged. Further, pursuant to the terms of the Uniform Civil Procedure Rules objection may be taken to their production, as has been done.

The Plaintiffs’ Position

44. The prima facie position is contested by the plaintiffs on three broad bases. First it is said that the defendant has failed to discharge the onus of showing that the documents are privileged and the plaintiffs itemised 22 documents, the description of which do not, of themselves, signify that the document is confidential and/or privileged. I do not accept that proposition.

45. The documents are created by a solicitor retained for the purpose of providing advice and drafting documents and retained by the defendant so to do, as a consequence, at least on a prima facie basis, the documents would be privileged and confidential.

46. Another point (the third point pressed by the plaintiffs) is that any privilege has been waived because the defendant or Chapman Thackeray have engaged in conduct that is inconsistent with the privilege being maintained. Certainly, in relation to some documents, Chapman Thackeray and/or the defendant have so acted. For example, some documents that otherwise may have been privileged, have been sent to the plaintiffs or are otherwise disclosed and their content disclosed.

47. In those circumstances, the conduct of disclosing the contents of a document would be conduct inconsistent with the maintenance of privilege. Nevertheless, the onus of proof that there has been a waiver of the privilege rests on the party claiming that waiver has occurred. The evidence, so far as it goes, does not support a waiver in relation to those documents upon which privilege has been claimed: see Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 and s 122(1) and s 122(2) of the Evidence Act.

48. The far more difficult proposition is that which is referred to as the joint privilege submission. In essence, the plaintiffs submit that, given the formation of the Unit Trust, and the activities by the plaintiffs, on the one hand, and the defendant, on the other hand, for and on behalf of the Unit Trust, Chapman Thackeray were jointly retained and were acting for both the defendant and the Unit Trust (and possibly the individual plaintiffs, in particular the first named plaintiff).

49. In general, in the formation of a Joint Venture and its operation, two quite distinct relationships with legal advisers can occur. On one hand, each party to the Joint Venture may retain, instruct and receive advice from its own solicitor, under which arrangement draft contracts would be exchanged, amendments suggested and, one would hope, agreement reached and a document executed. In those circumstances, each solicitor acts for one only of the Joint Venture partners.

50. The other arrangement is one in which the parties to the Joint Venture jointly obtain advice as a consequence of which the one firm of solicitors has two (or more) clients and, to the extent they are joint clients, there is no privilege in relation to documents drafted for one client, which could foreclose the other client inspecting those documents.

51. There is some significant material before the Court from which an inference could be drawn that the last-mentioned arrangement was one that, at least from time-to-time, operated in relation to the Joint Venture and the Trust for the carrying on of the Olive Tree business.

52. The parties before the Court have submitted that one or other arrangement applies and each submission assumes the arrangements are mutually exclusive. That may not be the case.

53. The permutations and combinations or relationships is as variable as the imagination or intention of the parties. While a relationship which allowed a firm of solicitors to act, on the one hand, for a Unitholder and, on the other hand, for the Trust and both Unitholders, may give rise to conflicts or potential conflicts, as long as each of the parties is aware of the totality of the relationship, there is no reason why such arrangements cannot be made.

54. It is possible that Chapman Thackeray, for some purposes, acted on the instructions of the defendant in its interests and for other purposes acted on instructions conveyed by the defendant in the interests, and for and on behalf, of the Unit Trust and each of the Unitholders. For example, I have no doubt, on the documents before the Court, that if the parties were to have reached agreement on the Unitholders’ Agreement it would have been Chapman Thackeray that would have overseen the execution of any documents, the payment of any stamp duty and the like. In such circumstances they would plainly have been acting on behalf of the Unit Trust and/or each of the Unitholders and not just the defendant.

55. There is no difference in principle between the foregoing example and work that may have been done during the course of discussions and negotiations around the Unitholders’ Agreement. Some of the documents and correspondence evidence an approach in which Chapman Thackeray are acting on behalf of parties to these proceedings beyond the defendant.

56. The onus of proof of the proposition of joint client relationship rests on the plaintiffs who asserts such a relationship. If, as I suspect, any joint client relationship would subsist for some parts of the work performed by Chapman Thackeray that have given rise to documents that have been sought to be subpoenaed and would not subsist in relation to other documents, it is impossible, without an inspection of the documents in the privileged folder, for the Court to determine whether one or more of those documents are a result of work performed for joint clients or the result of advice to the defendant in a separate capacity and not as part of the relationship, which is a joint client relationship.

57. The plaintiffs have objected to the Court inspecting the documents. That objection was taken in the context of a submission that it is for the defendants to prove lawyer client privilege under s 118 of the Evidence Act as applied by the Uniform Civil Procedure Rules. The defendant has done that. What is now in issue is whether the documents may be inspected to determine whether any one of them is a document that arises from a relationship in which the solicitors, Chapman Thackeray, are acting for joint clients that include one or more of the plaintiffs or the Trust.

Inspection of the Documents

58. I start from the proposition that any note taken, even a note of a conversation with one or more of the plaintiffs, as part of the relationship between Chapman Thackeray and the defendant, is a privileged document and any objection to its production should be successful. Nevertheless I have examined the documents and, in my view, some of the documents are not the result of any confidential communication (including a note) drawn as part of the relationship between the defendant and Chapman Thackeray, but are, on their face, a document drawn as part of the work being undertaken by Chapman Thackeray for the Trust and/or on behalf of both Unitholders and not in the different interests of the defendant.

59. It must be said that many of the documents are handwritten notes, which are difficult to read. Nevertheless, I have done the best possible in the short time available.

60. Some of the documents have clearly been created for the purpose of advising the defendant in the defendant’s interests. Some documents have been created, on their face, for the purpose of advising the Unit Trust or the plaintiffs and defendants. Those latter documents are an exception but fall into the class of some work that has been done in circumstances where Chapman Thackeray were acting for both the defendant and either the Trust or the plaintiffs (or one of them). Those documents are documents 2, 3, 4, 5, 6, 7, 9, 12, 13, 16, 25, 26, 27, 42, 54, 58 and 61. I determine that, as a consequence of those documents being created as part of a relationship between Chapman Thackeray and joint clients, they are not privileged as against the plaintiffs.

61. As to the existence of that joint relationship, I accept, in part, the submissions of the plaintiffs, but I determine that two quite different sets of relationships existed: Chapman Thackeray acted as the solicitor for the defendant; and also acted, from time-to-time as the solicitor for the Unit Trust and/or the plaintiffs as well as the defendant. The determination of the documents that are not privileged reflects that latter finding.

62. For the foregoing reasons, the Court determines that the following documents are not and cannot be the subject of legal professional privilege by the defendant against the first plaintiff and the Unit Trust and I order that those documents be produced to the Court: 2, 3, 4, 5, 6, 7, 9, 12, 13, 16, 25, 26, 27, 42, 54, 58 and 61. I shall return all other documents over which privilege has been claimed.

**********

Amendments

28 June 2016 - [38] amended

Decision last updated: 28 June 2016