Hawksford v Hawksford

[2008] NSWSC 31

CITATION:	Hawksford v Hawksford; Hawksford v Hawksford [2008] NSWSC 31
HEARING DATE(S):	30/05/07
JUDGMENT DATE :	1 February 2008
JURISDICTION:	Equity
JUDGMENT OF:	White J
DECISION:	See paras 45 and 46 of judgment.
CATCHWORDS:	PROCEDURE – Discovery and inspection of documents – Grounds for resisting production – Client legal privilege – Whether documents privileged – Dominant purpose for creation of documents – Whether two directors of company each equally entitled to maintain claims for privilege on behalf of company – Director defending claims on behalf of company entitled to maintain claims for privilege on behalf of company – Where retainer of solicitor by company invalid because director who retained services of solicitor on behalf of company acted ultra vires – Whetherbelief that retainer exists sufficient to support privilege – Privilege available where client bona fide believed on reasonable grounds that the solicitor was retained as its solicitor – Held that director with authority to defend proceedings on behalf of company entitled to maintain claim for privilege, on behalf of company, over certain communications with solicitor which were created when company believed retainer existed.CORPORATIONS – Orders previously made for inspection of documents by a director – Supplemental orders made for purpose of making more efficacious the principal orders.
LEGISLATION CITED:	Evidence Act 1995 (NSW) Corporations Act 2001 (Cth)
CASES CITED:	Hawksford v Hawksford [2005] NSWSC 463 Hawksford v Hawksford [2006] NSWSC 1458 Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 Grofam Pty Limited v Australia & New Zealand Banking Group Ltd (1993) 45 FCR 445 Health Insurance Commission v Freeman (1998) 88 FCR 544 Minter v Priest [1929] 1 KB 655 Cromack v Heathcote (1820) 2 Brod & Bing 4; 129 ER 857 Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 Hawksford v Hawksford [2005] NSWSC 1316
PARTIES:	Brett Paul Hawksford & Anor v Michael Jeffrey Hawksford & 3 Ors; Michael Jeffrey Hawksford & 2 Ors v Brett Paul Hawksford & 3 Ors
FILE NUMBER(S):	SC 4348/04; 3487/05
COUNSEL:	Plaintiffs (4348/04): CJ Bevan, A Tsekouras Defendants (4348/04): GKJ Rich
SOLICITORS:	Plaintiffs: Evangelos Patakas & Associates Defendants: Clayton Utz

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Friday, 1 February 2008

4348/04 Brett Paul Hawksford & Anor v Michael Jeffrey Hawksford & 3 Ors
3487/05 Michael Jeffrey Hawksford & 2 Ors v Brett Paul Hawksford & 3 Ors

JUDGMENT

1 HIS HONOUR: This judgment concerns a claim for privilege made by Michael Hawksford on behalf of Bremick Pty Limited in respect of six documents discovered by Bremick and a large number of documents discovered by Mr Daley of Colin Daley Quinn. It also concerns claims by Brett Hawksford that the Michael Hawksford parties have not properly interpreted and applied orders made by Palmer J on 8 December 2005 whereby Brett Hawksford and his professional advisers were authorised to inspect the books and financial records of Bremick and BMB Investments.

Privilege Issue

2 The 2004 proceedings were commenced on 5 August 2004. Mr Timothy Daley of Colin Daley Quinn is the fourth defendant. Until 16 May 2005, Mr Daley purportedly acted for Bremick and BMB Investments, who are the second and third defendants. He filed a notice of appearance for them on 13 September 2004. The plaintiffs challenged Mr Daley’s retainer. That challenge was successful (Hawksford v Hawksford [2005] NSWSC 463; (2005) 191 FLR 173). On 16 May 2005, Campbell J made declarations that neither Mr Daley nor Colin Daley Quinn were or had, at any time, been retained in the proceedings by Bremick or BMB Investments. The notice of appearance filed on their behalf was struck out.

3 The circumstances that led to these orders was that the boards of Bremick and BMB Investments were deadlocked. There was no resolution of directors authorising the retainer of Mr Daley to act for the companies in the proceedings. Campbell J held that Michael Hawksford’s office as joint managing director did not carry with it an implied actual authority to instruct solicitors to act for the companies in the proceedings in which the plaintiffs challenged the internal administration of the companies (at [68]-[70]). His Honour rejected the submission that there was an agency of necessity.

4 There followed a period of impasse, which I endeavoured to resolve by orders of 18 December 2006 (Hawksford v Hawksford [2006] NSWSC 1458; (2006) 61 ACSR 27). I gave leave to Michael Hawksford to defend the 2004 proceedings on behalf of Bremick and BMB Investments, with authority to give discovery and permit inspection on behalf of Bremick and BMB Investments, and to make any claims for legal professional privilege that might arise in respect of those claims.

5 In his list of documents, Mr Daley identified seven folders of documents in respect of which he said Bremick or BMB Investments might be entitled to claim privilege. Michael Hawksford, on behalf of Bremick, now claims privilege in respect of many of those documents. All but sixteen or seventeen of the documents post-date the commencement of the proceedings. It is apparent from the description of the documents, and confirmed by my inspection of the documents, that the documents brought into existence after the commencement of the proceedings in respect of which privilege is claimed are all documents which would be privileged if there were no issue about the retainer of Colin Daley Quinn. They include communications between counsel retained by Colin Daley Quinn to act for Bremick and that firm of solicitors, and correspondence between the chief financial officer of Bremick and that firm. The Brett Hawksford parties contend that the documents are not privileged because there was no valid retainer of Colin Daley Quinn or Mr Daley to act for Bremick.

6 There are also sixteen or seventeen documents (one undated document could not be located), which pre-date the commencement of the proceedings. The Brett Hawksford parties contend that Mr Daley had been retained to act jointly for Michael Hawksford and Brett Hawksford to advise them and Bremick as to how to overcome irreconcilable differences in the management of Bremick’s business. The Brett Hawksford parties contend that no claim for privilege can be asserted by one of the parties to the joint retainer against the other.

7 The question of whether the documents are privileged depends on whether objection could be taken by a party under Div 1 Pt 3.10 of the Evidence Act 1995 (NSW) to evidence being adduced of the contents of the documents (Uniform Civil Procedure Rules, r 21.3, r 21.5 and definitions of “privileged document” and “privileged information”).

8 I will deal first with the six documents discovered by Bremick pursuant to my orders of 18 December 2006 in respect of which privilege is claimed. They consist of:

a) Correspondence between Bremick and Colin Daley Quinn dated 12 May 2003, 17 June 2004 and 21 July 2004;

b) two drafts of an affidavit of Michael Hawksford created in 2002;

c) a fax from the Australian Taxation Office to Colin Daley Quinn dated 7 October 2004.

9 In relation to the letter from Colin Daley Quinn to Bremick of 12 May 2003, privilege was claimed on the ground that it was confidential communication between Bremick and its lawyers made for the dominant purpose of the lawyers providing Bremick with legal advice. The email correspondence of 17 June and 21 July 2004 was claimed to be privileged on the ground that they were confidential communications between Bremick and its lawyers, when litigation was anticipated, for the dominant purpose of the lawyers providing Bremick with legal advice.

10 The Brett Hawksford parties submitted that this was a formulaic claim for privilege. I have inspected the documents in question. I do not consider the letter of 12 May 2003 from Colin Daley Quinn to Mr Macourt of Bremick was a confidential communication made for the dominant purpose of Mr Daley providing legal advice to Bremick. It rather refers to the opening of files in relation to anticipated legal proceedings and the allocation of costs to different files. As privilege was not claimed on the basis of s 119 of the Evidence Act, I reject the claim for privilege in relation to the first document.

11 I also reject the claim for privilege in respect of the email of 17 June 2004. Whilst the subsequent email shows that legal advice was provided by Mr Daley to Mr Macourt of Bremick in relation to the subject matter of both emails, there is nothing to indicate that the dominant purpose of the email of 17 June 2004 being brought into existence was for Mr Daley to provide such advice. It rather requests advice as to the outcome of proceedings between the Australian Taxation Office and Brett Hawksford Management Pty Ltd which was said to be relevant to whether provision should be made in respect of a loan owed by Brett Hawksford Management Pty Ltd to Bremick. There was nothing in the email of 17 June 2004 to suggest that Mr Macourt brought the communication into existence in order that he could obtain legal advice from Mr Daley, as distinct from being informed as to the outcome of litigation between other parties, where Mr Macourt had formed his own view as to the accounting consequences of the potential outcomes of those proceedings. I reject the claim for privilege in respect of the second document.

12 The third document, being an email of 21 July 2004 from Mr Macourt to Mr Daley, sets out the substance of advice given by Mr Daley. The advice would not appear to be relevant to the alleged joint retainer for Mr Daley to act on behalf of both Michael and Brett Hawksford. It appears to relate to a different retainer. I uphold the claim for privilege in relation to that document.

13 The fourth and fifth documents in respect of which privilege is claimed were draft affidavits. It can be inferred from the face of the documents, as well as from the affidavit of discovery, that those documents relate to anticipated legal proceedings in 2002. Those documents are clearly privileged pursuant to s 119 of the Evidence Act unless they were prepared pursuant to the alleged joint retainer of Mr Daley. The documents are not of the kind which would be brought into existence pursuant to the alleged joint retainer. Assuming such a retainer as alleged by the Brett Hawksford parties, I do not consider that the documents were brought into existence pursuant to such a retainer. I uphold the claim for privilege in relation to the fourth and fifth documents.

14 The sixth document is a letter from the Australian Taxation Office to Colin Daley Quinn relating to proceedings brought by the Deputy Commissioner of Taxation against Brett Hawksford Management Pty Ltd. The communication is not a confidential communication. I reject the claim for privilege in respect of the sixth document.

15 It was also submitted for the Brett Hawksford parties that the effect of my orders of 18 December 2006 was that each director/brother had an entitlement equal to that of the other director/brother to assert privilege on behalf of Bremick and BMB Investments in relation to documents which are sought by the other in the various proceedings between them. That was plainly not the intention, nor is it the effect of my orders of 18 December 2006. Michael Hawksford is entitled to maintain claims for privilege on behalf of Bremick in defending the claims brought by the Brett Hawksford parties against Bremick.

16 I next consider the claims for privilege made by Michael Hawksford on behalf of Bremick in respect of the documents discovered by Mr Daley. As noted above, the substantial ground of challenge to the claim of privilege is based upon the absence of a valid retainer for Mr Daley to act as solicitor for Bremick.

17 A contract of retainer is not essential to the existence of a relationship between lawyer and client or to the existence of client legal privilege. In Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855, Barrett J said (at [7] and [11]):

“ 7 There is a definition of ‘client’ in s.117(1). It is, however, the kind of explanatory or enlarging definition that specifies items which are included in the defined term, leaving the core meaning to be discovered by other means. In ordinary parlance, a ‘client’ vis-à-vis a lawyer is a person for whom the lawyer performs legal services. Whether a relationship of that kind exists is to be determined by reference to the intentions of the parties objectively ascertained. This is, I think, recognized in the judgment of Mahoney JA (with whom Priestley and Powell JJA agreed) in Maxwell v Chittick (unreported, NSWCA, 23 August 1994):
‘It is, of course, to be accepted that persons in the relationship that existed between Mr Maxwell and the plaintiffs may also undertake the relationship of solicitor and client. Whether that relationship existed depends essentially upon whether it was the intention of the parties that it should be created. I am of the opinion that, having regard to the circumstances, no such relationship was intended to be created … [W]hat occurred between them at each of these times did not constitute in terms the making of a contract of the accepting of a retainer so as to create the relationship of solicitor and client. And I do not think that the circumstances require it to be implied that such a relationship was intended to be created between them.’


...

11 ‘Client’, in its ordinary signification, must therefore be regarded as referring to a person who, in respect of some legal matter within the scope of professional services normally provided by lawyers, has, with the consent of a lawyer, come to stand in a relationship of trust and confidence to the lawyer entailing duties of the lawyer to promote the person’s interests, to protect the person’s rights and to respect the person’s confidences. The privilege exists so that a person may consult his legal adviser in the knowledge that confidentiality will prevail. ”

18 Counsel for the Brett Hawksford parties submitted that this description of what was required to bring into existence a relationship of lawyer and client omitted an essential ingredient, being that the client had retained the lawyer to act for him or her. In the present context, this meant, according to the submission, that there must have been a valid contract of retainer.

19 I do not agree. It is clearly established that privilege can exist in respect of communications where there is no valid retainer of the lawyer because the lawyer lacked statutory authority to act (Grofam Pty Limited v Australia & New Zealand Banking Group Limited (1993) 45 FCR 445 at 455-456; Health Insurance Commission v Freeman (1998) 88 FCR 544 at 566-567). Communications between a person who seeks to secure the services of a solicitor and the solicitor are privileged notwithstanding that the solicitor refuses the retainer (Minter v Priest [1929] 1 KB 655 at 666, 675; Cromack v Heathcote (1820) 2 Brod & Bing 4; 129 ER 857). In Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 Young J (as his Honour then was) held (at 130) that:

“At least in a situation where the client thought that the lawyer was his or her solicitor and that thought was contributed to by the action of the solicitor or by the person who is seeking to tender the statement, the privilege will exist. In my view the authorities go further to support the proposition that if the client bona fide believes on reasonable grounds that the other is his or her solicitor, then the privilege exists up to the time when that belief is exploded.”

20 This was the position at common law. There is no express requirement in s 118 of the Evidence Act or in the definition of “client” or “lawyer” which requires that a person only becomes a client if there is a contract of retainer or if the lawyer has accepted instructions to act.

21 It is clear that those purporting to act on behalf of Bremick believed that Mr Daley was Bremick’s solicitor. Mr Daley acted in the same belief in retaining counsel. The documents in respect of which privilege is claimed include instructions given by Michael Hawksford and Mr Macourt to Mr Daley, legal advice given by Mr Daley to them purportedly on behalf of Bremick in relation to anticipated proceedings against Brett Hawksford, correspondence with counsel and notes of meetings with counsel in relation to the dispute between Brett Hawksford, Bremick and Michael Hawksford, and briefs to counsel. Notwithstanding that Michael Hawksford and Mr Macourt did not have authority to retain Mr Daley on behalf of Bremick, I consider that Bremick is entitled to claim privilege over the communications and documents. As Michael Hawksford is now authorised to defend the proceedings on behalf of Bremick, he is entitled to maintain that claim for privilege on behalf of Bremick. The absence of a contract of retainer does not mean that these were not communications between a lawyer and client within the meaning of ss 118 and 119 of the Evidence Act or between Mr Daley, as a lawyer acting for a client and counsel for the dominant purpose of a client being provided with professional legal services relating to anticipated and then pending proceedings to which Bremick, as a client, was a party.

22 It was also submitted for the Brett Hawksford parties that the claim for privilege in respect of the documents discovered by Mr Daley should fail because there was no affidavit sufficiently establishing the grounds for the privilege. Mr Daley merely said that the documents were documents in respect of which Bremick and BMB Investments might be entitled to make a claim for privilege.

23 The absence of an affidavit was explained by the circumstances in which the claim arose. There was no formal process by which the claim for privilege was either raised or challenged. However, I have inspected the documents and the ground of privilege plainly appears on the face of the documents.

24 I uphold the claim for privilege made on behalf of Bremick in respect of the documents identified by the solicitors acting for Michael Hawksford as set out in the schedule to their letter of 28 May 2007 (exhibit 2).

25 I reject the claim for privilege in respect of the three documents numbered 1, 2 and 6 of Part 1 of the amended list of documents filed for Bremick in respect of which privilege was claimed and uphold that claim in respect of the documents numbered 3, 4 and 5 of that part of the list.

Implementation of Access Orders of Palmer J made on 8 December 2005

26 On 8 December 2005, Palmer J decided an application by Brett Hawksford to inspect the financial books and records of Bremick and BMB Investments (Hawksford v Hawksford [2005] NSWSC 1316). The application was made by Brett Hawksford as a director and pursuant to ss 198F, 247A, 299 and 1324 of the Corporations Act 2001 (Cth). His Honour recorded that the Michael Hawksford parties did not maintain opposition to Brett Hawksford being entitled to inspect the financial books and records of Bremick and BMB Investments but that the parties could not agree on the terms upon which access and inspection should take place. His Honour made the following orders (the paragraph numbers are taken from his Honour’s judgment):

“ 26 The First Defendant, Brett Paul Hawksford (‘Brett’) is authorised to inspect the books as defined in s.9 of the Corporations Act 2001 (Cth) (‘the Act’) of the Third Defendant, Bremick Pty Ltd (‘Bremick’), and the Fourth Defendant, BMB Investments Pty Ltd (‘BMB’), at the business premises of Bremick and BMB in the manner specified in paragraphs 33 and 34 (‘Brett Hawksford's book access rights’).
27 The solicitors, counsel, accountants and financial advisers acting for Brett (hereinafter collectively ‘the Professional Advisers’) are authorised to inspect the books (as defined in s.9 of the Act) of Bremick and BMB at the business premises of Bremick and BMB in the manner specified in paragraphs 33 and 34 (‘the Professional Advisers' book access rights’).

28 Brett is authorised to inspect the financial records (as defined in s.9 of the Act) of Bremick and BMB at the business premises of Bremick and BMB in the manner specified in paragraphs 33 and 34 (‘Brett Hawksford's financial records access rights’).
29 The Professional Advisers are authorised to inspect the financial records (as defined in s.9 of the Act) of Bremick and BMB at the business premises of Bremick and BMB in the manner specified in paragraphs 33 and 34 (‘the Professional Advisers’ financial records access rights’).

30 The Third and Fourth Defendants shall do all things necessary to give effect to the orders and authorisation in paragraphs 26 to 29.

31 The financial records and books defined for the purposes of these orders in s 9 of the Corporations Act shall exclude:

a) documents recording the access or login security codes or administrator rights referred to in paragraph 11 of the affidavit of Mark Andrew Macourt sworn 5 October 2005;
b) documents recording the access or login security codes or passwords of individual employees of Bremick.

32 The authorisations and inspections referred to in paragraphs 26 to 29, insofar as they relate to documents which identify the names and locations of Bremick’s suppliers, are subject to Brett Hawksford undertaking to the Court:

a) to keep the information in those documents confidential;
b) not to use that information for any purpose other than the conduct of the proceedings between Michael Hawksford, Brett Hawksford and the other Defendants; and
c) not to disclose that information to any person other than a Professional Adviser who has signed a written confidentiality undertaking in accordance with these Orders.


33 Each of the following, namely:

a) Brett Hawksford's book access rights;

b) the Professional Advisers' book access rights;

c) Brett Hawksford's financial records access rights; and
d) the Professional Advisers' financial records access rights
(hereinafter collectively referred to as ‘the Access Rights’) shall be exercised, subject to the following conditions, whilst any of these proceedings or proceedings numbered 5399 of 2003 and 4348 of 2004 in this Division remain pending and unresolved awaiting final determination, namely:
e) notice of the intention to exercise the Access Rights and of the categories of documents of which inspection is sought shall be given by Brett Hawksford through his solicitors to Michael Hawksford's solicitors at least two business days before the Access Rights are to be exercised and the notice shall specify the time or times at which access is sought and the identity of the persons who will be exercising the Access Rights;
f) the Access Rights shall only be exercised by Brett Hawksford while he is accompanied by at least one of the Professional Advisers, although any one or more of the Professional Advisers shall be entitled to exercise the Access Rights without Brett Hawksford being personally present;
g) Brett Hawksford shall only use the information obtained in the exercise of the Access Rights for the purposes of carrying out his duties as a director or his rights as a shareholder of Bremick and BMB or for the purposes of conducting these proceedings and proceedings numbered 5399 of 2003 and 4348 of 2005 in this Division;
h) the Access Rights shall be exercised in accordance with the notice referred to in paragraph 33(e) between the hours of 9am and until 5pm from Monday to Friday (not including public holidays) and at the business premises of Bremick and BMB;
i) there shall be a limit of three Professional Advisers who may accompany Brett Hawksford whilst exercising the Access Rights or who shall be entitled to exercise the Access Rights without him being personally present;
j) Brett Hawksford shall cause his solicitors to prepare a list of the categories of documents (being categories which are defined by reference to the general nature of the documents and the financial year in which the documents in that category are dated where the documents concerned are dated) constituting the books and financial records which have been copied in the exercise of the Access Rights and shall cause that list to be maintained by his solicitors as a current list (either electronically or in hard copy) by preparing it and then updating it within twenty-eight days of each occasion on which the Access Rights are exercised (‘the list of copied documents’);
k) Brett Hawksford shall cause his solicitors to make the list of copied documents available to Michael Hawksford’s solicitors within seven (7) days of a request for a copy of it being received from those solicitors;


34 Each of the following, namely:

a) Brett Hawksford’s book access rights;

b) the Professional Advisers’ book access rights;

c) Brett Hawksford’s financial records access rights; and
d) the Professional Advisers’ financial records access rights,
shall include the right to copy books and financial records (as defined in s.9 of the Act, and includes copying by means of both photocopying and copying electronically onto diskettes or CD roms and by means of copying of data onto another computer system’s hard drive by electronic transmission, and this copying right may be exercised using the photocopying, laser printing and computer storage, retrieval and processing facilities of Bremick at the premises of Bremick and BMB.

35 The right of any Professional Adviser to inspect any books and records pursuant to these orders shall be subject to that Professional Adviser first providing to the solicitors for Michael Hawksford a signed written undertaking in favour of Bremick:

a) acknowledging that the financial records or books contain confidential commercial information owned by Bremick, which is of value to it, and the unauthorised disclosure or misuse of which could potentially substantially harm Bremick’s commercial interests; and
b) that the nominee may not use or disclose the information in the documents for any purpose other than advising the First Defendant about discharging his duties as a director of Bremick or his duties as a director of BMB or his conduct of these legal proceedings or proceedings 4348 of 2004 .”

27 It was a condition of Brett Hawksford and his professional advisers having access to the books and financial records of Bremick and BMB Investments that he give notice in advance of the categories of documents of which inspection was sought (para 33(e)). The Access Rights include the right to copy the books and financial records using the photocopying, laser printing and computer storage, retrieval and processing facilities of Bremick (para 34), and a list of the categories of documents copied is to be provided to the Michael Hawksford parties (para 33(j) and (k)).

28 At least one of the reasons for requiring the prior specification of the categories of documents to be inspected was to deal with any contest which might arise if the Michael Hawksford parties sought to maintain a claim for legal professional privilege in respect of documents which Brett Hawksford sought to inspect. Requiring the prior specification of categories of documents to be inspected should assist Michael Hawksford and Bremick to do all things necessary to ensure that access and inspection is afforded, and minimise disruption to Bremick’s staff which access and inspection would otherwise cause.

29 In May 2006, the solicitors for Brett Hawksford gave notice of categories of documents of Bremick which Brett Hawksford wished to inspect. They comprised categories of documents listed in a notice for discovery insofar as they were business records of Bremick or BMB Investments, all documents relating to any loan or other facilities or arrangement between Bremick and G E Capital Finance Pty Ltd, Bremick and BMB Investments Chartered Accounts, all documents relating to the software used by Bremick, and all documents relating to the balance sheet items for the balance dates of 30 June 2002, 30 June 2003, 30 June 2004 and 30 June 2005 of cash, receivables, and inventories. The solicitors for Brett Hawksford stated that they required access to Bremick’s computer system in order to exercise their rights of access and inspection. The position taken by the Michael Hawksford parties was that Brett Hawksford did not have the right to search Bremick’s records whether in hard copy or electronically, but that requested documents or categories of documents would be produced and, if sought, copies would be provided. The financial controller of Bremick, Mr Macourt, located documents which fell within the categories of documents and placed them in a conference room at Bremick’s premises for inspection. He, or another employee of Bremick, remained in the conference room during the period of inspection. Soft copies of documents requested were provided to Brett Hawksford’s professional advisers on compact disc at no cost. Michael Hawksford contended that any hard copies of documents should be paid for at a cost of twenty cents per page. The Michael Hawksford parties refused to permit secretarial or clerical staff employed by Brett Hawksford’s solicitors to attend to scan documents, whether or not that person provided a confidentiality undertaking.

30 On 3 November 2006, Brett Hawksford’s solicitors advised that they intended to inspect documents relating to all finance facilities by Bremick with any financiers prior to the commencement of the facility with G E Capital Finance Ltd; all documents in any way relating to all and any travel by Michael Hawksford, all and any member of Michael Hawksford’s family, all and any staff member of Bremick, Mr Daley or any other person, which travel was paid for directly or indirectly by Bremick; and all documents relating to Bremick’s dealings with Coventary (sic) since 1990. Although documents were made available for inspection, the inspection did not occur.

31 By an Eighth Interlocutory Application, the Brett Hawksford Parties sought the following relief:

“ 1. A DECLARATION that, on the proper construction of the orders made by the Court on 8 December, 2005 in these proceedings (‘the Access Orders’):
a) Brett Hawksford and Brett Hawksford Management Pty Limited and their Professional Advisors (as defined in paragraph 27 [of] the Access Orders) are entitled, subject only,
i) to the giving of the notice referred to in paragraph 33(e) of the Access Orders;
ii) to the giving of confidentiality undertakings referred to in paragraphs 32 and 35 of the Access Orders; and
iii) to the creation of the lists referred to in paragraph 33(j) and (k) of the Access Orders
to have access to and to inspect any financial records and books (as defined in paragraphs 26 to 29 of the Access Orders) of Bremick Pty Ltd (‘Bremick’) and BMB Investments Pty Ltd (‘BMB’) as they may wish to access and inspect in their absolute discretion:
iv) wherever such financial records and books are usually kept, situated or stored at the business premises of Bremick and BMB; and
v) in whatever form such financial records and books are stored including but not limited to on computer files, disk or otherwise in electronic form;
b) Without limitation to the form of recording of the financial records and books or the place in Bremick’s and BMB’s business premises where access and inspection takes place, the Access Orders extend to direct access to all computer files and electronic records containing such financial records and books, subject only to the records and files described in paragraph 31 of the Access Orders being excluded from the rights of access granted under the Access Orders;
c) The reference to ‘Professional Advisors’ in the Access Orders includes a reference to the support staff of any such Professional Advisors, being employees who are engaged to assist any Professional Advisor with tasks such as copying of records and scanning of records onto disk or otherwise in electronic form provided that any such employee has executed a confidentiality undertaking in the terms of and in accordance with paragraph 35 of the Access Orders;
d) Without limitation to paragraph 30 of the Access Orders, the Access Orders do not include any right on the part of Michael Hawksford or Bremick or BMB by themselves or by their officers, agents, employees or representatives
i) being present at any time when inspection or copying or scanning of records in accordance with the Access Orders takes place or to otherwise prevent, hinder, supervise or control the mode of access, inspection or copying by Brett Hawksford and Brett Hawksford Management Pty Limited and their Professional Advisors; or
ii) to determine which financial records and books of Bremick and BMB fall into the categories of financial books and records notified by Brett Hawksford and Brett Hawksford Management Pty Limited and their Professional Advisors under the notice given under Order 33(e) of the Access Orders and which are proposed to be accessed and inspected by Brett Hawksford and Brett Hawksford Management Pty Limited and their Professional Advisors;
e) Without limitation to the right to copy described in paragraph 34 of the Access Orders that right includes:
i) the right to scan financial records or books by electronic means for storage onto computer files or otherwise to make electronic copies of financial records or books utilizing such portable scanning equipment as Brett’s Professional Advisors shall provide;
ii) the right to make copies of financial records or books by means of any copying device as the Professional Advisors of Brett Hawksford and Brett Hawksford Management Pty Limited shall provide;
iii) the right to copy by any of the means referred to in paragraph 34 of the Access Orders by using such equipment as owned and/or controlled by Bremick or BMB at their business premises; and
iii)[iv] where copying is undertaken in the form referred to in Order 1(e)(i) and (ii) above, no charge shall be made by Michael Hawksford, Bremick or BMB for such copying;
f) The rights of access granted under the Access Orders include a right on the part of Brett Hawksford, Brett Hawksford Management Pty Limited and their Professional Advisors and their support staff to have access to and the ability to utilize Bremick’s meeting room facilities at the business premises of Bremick and BMB at Maddox Street Alexandria when such rights of access are exercised, including access to Brett Hawksford’s office adjoining Bremick’s meeting room where such rights of [access] may be exercised in privacy, for the purpose of exercising the rights of access and inspection granted under the Access Orders;
g) Without limitation to the right to access to (sic) inspect the financial records and books of Bremick and BMB including computer files wherever they may be usually stored or kept, the rights of access granted under the Access Orders include a right on the part of Brett Hawksford, Brett Hawksford Management Pty Limited and their Professional Advisors and their support staff to have
i) uninhibited and unsupervised access to a dedicated computer terminal connected to the Bremick computer system and situated in Brett Hawksford’s office which adjoins the Bremick meeting room where the rights of access and inspection granted under the Access Orders may be exercised; and
ii) all necessary passwords and security codes of the kind referred to in paragraph 31 of the Access Orders to be entered by Bremick’s and BMB’s officers employees or agents as and when requested by Brett Hawksford, Brett Hawksford Management Pty Limited and their Professional Advisors so as to enable access and inspection of all financial records and books of Bremick and BMB which are stored in electronic form (except those records and files described in paragraph 31 of the Access Orders);
2. AN ORDER that the plaintiffs and the third and fourth defendants, by themselves or by their officers, agents, employees or representatives, do all things necessary to give effect to and the Access Orders and to facilitate the exercise of the rights of access of Brett Hawksford, Brett Hawksford Management Pty Limited and their Professional Advisors and their support staff in accordance with the Access Orders as construed by the Court in the declaration of right contained in paragraph 1 above. ”

32 It is not appropriate to make a declaration as to the proper construction of the orders of 8 December 2005, even if, which I doubt, there is any power to do so. A declaration is final relief. These are not contempt proceedings. The only effect that I can see of making the declaration sought, as distinct from making further orders to better implement the regime which Palmer J laid down, would be to advance a claim that the Michael Hawksford parties were in breach of the orders. That would not be a proper use of the declaratory power.

33 The Brett Hawksford parties submit that it was not the intention nor the effect of the orders of 8 December 2005 that Michael Hawksford, or employees of Bremick, should themselves determine which of Bremick’s documents fall within the categories specified by Brett Hawksford for inspection. They submit that they are entitled to inspect the originals of Bremick’s documents, whether in hard copy form or stored electronically. They should not be compelled to accept copies. They have been provided with original paper documents except where only some of original documents in a file fall within a requested category. In that event, they have been provided only with copies of the documents requested. They have been provided only with soft copies of documents stored electronically.

34 In relation to Bremick’s computer system, Mr Macourt deposed:

“ 81. Bremick is divided into six departments: Sales and Marketing, Purchasing, Operations, Information Technology, Warehouse and Finance. Each Department Manager is responsible for the management of that Department’s records. Bremick has an integrated computer system incorporating databases storing information about stock management, customers and product sales. Access to various parts of the system is allocated to users on the basis of the information they require in order to perform their job function within the company such as purchasing (i.e. inventory levels) or sales (i.e. area sales figures). The reason for this is twofold: to protect the confidential nature of information which is commercially sensitive to Bremick by ensuring that access to it is restricted to those people who need it to carry out their jobs for Bremick, and to maintain the integrity of the operation of the system itself by restricting access to those parts of the system which relate to the operation of the system itself.
...
83. Security access is granted to the system on a per user basis and grants the user not only the ability to access various parts of the system but also to interact and manipulate the data stored in the system. That is to copy the data, delete the data and change the data. There is no means of simply searching a particular database in Bremick’s system without also giving the user the ability to alter the information they access. For example, the search engine for the Sequel Plus database called Sequel Query is a data editor and search engine. ”

35 The Brett Hawksford parties submit that having Mr Macourt determine which documents within the categories specified by Brett Hawksford should be made available for inspection interferes with Brett Hawksford’s access rights. Such access should primarily be by way of access to Bremick’s computer system rather than by copies of documents, even electronic copies. The effect of Mr Macourt’s evidence is that all documents which Brett Hawksford has asked to inspect have been made available for inspection.

36 The Brett Hawksford parties also submit that Michael Hawksford has interpreted the orders of Palmer J to impose a regime for computer access which Michael Hawksford had contended before Palmer J should be implemented, where he failed in that contention before Palmer J. The Brett Hawksford parties also complain that the presence of Mr Macourt or another employee of Bremick whilst the Access Rights are being exercised interferes with the exercise of those rights because it inhibits discussion between Brett Hawksford and his professional advisers. The Brett Hawksford parties also contend that the denial of access to secretarial staff employed by Brett Hawksford’s solicitors for the purpose of collating and scanning documents is unreasonable and unwarranted. The Brett Hawksford parties also contend that they should be entitled to inspect books and financial records wherever they are usually kept or stored rather than being confined to inspecting documents, including electronic documents, in a conference room and on a computer allocated for that purpose.

37 I do not accept the submission for the Brett Hawksford parties that the requirements of paras 33(e), (j) and (k) are merely procedural and for administrative convenience of Bremick, and do not impose any limitation on Brett Hawksford’s substantive rights of access to the books and financial records of Bremick and BMB Investments. The exercise of the access rights is subject to the conditions in paras 33(e)-(k). Those conditions include the giving of at least two business days’ notice of the categories of documents of which inspection is sought. Para 33(h) expressly provides that the access rights be exercised “in accordance with the notice referred to in paragraph 33(e)”. If, as the Brett Hawksford parties contend, they are entitled to conduct any searches they choose of Bremick’s computer system, (and they contend that they are required to be given access codes to enable them to effect such searches), then they would necessarily be able to inspect any documents stored on the computer system whether they were in the categories notified or not. On the other hand, there is no reason the Brett Hawksford parties should not be permitted to inspect original documents. There is nothing in the orders of Palmer J which restricts the access rights to electronic copies of documents on Bremick’s computer system.

38 Palmer J’s orders (understandably) do not descend to the detail of such matters as whether an employee of Bremick may be present when the Brett Hawksford parties exercise their access rights. Bremick has a legitimate interest in such a person being present if the Brett Hawksford parties or their advisors have access to original documents, including access to the documents stored on the computer system. However, if the documents made available to the Brett Hawksford parties are copy documents, including electronic copies of documents stored on a compact disc, I can see no proper basis for an employee of Bremick to be present if Brett Hawksford or his advisors ask for privacy. It would be a different matter if Brett Hawksford or his advisors asked for assistance. It is clear that from time to time such assistance has been sought. According to Michael Hawksford’s solicitors, the purpose of such a person being present was to facilitate the inspection process.

39 If, however, Brett Hawksford or his advisors is given direct access to the computer system, then it is entirely appropriate that an employee of Bremick be present to ensure that no data is deleted or changed. Such a person’s presence is also necessary to ensure that, in accordance with order 33, documents which Brett Hawksford and his advisors seek to inspect on the computer system fall within the categories of documents for which prior notice has been given.

40 Whilst the present orders do not envisage that access should be afforded to support staff employed by Brett Hawksford’s solicitors, the only reason advanced for the Michael Hawksford parties as to why such access should not be afforded to such persons is that not being a professional such persons might not have a reasonable appreciation of their responsibility to the court pursuant to the undertaking as to confidentiality which is to be given. I see no reason why that should be so. The orders should be varied to permit support staff employed by Brett Hawksford’s Professional Advisors, who are engaged to assist with tasks such as scanning or copying of records, to have access to the records for that purpose on their providing the confidentiality undertaking in accordance with para 35 of the orders.

41 I am not persuaded that there is any legitimate basis of complaint that documents and electronic information have been made available to Brett Hawksford in a conference room. The right of access and inspection under the orders does not extend to Brett Hawksford and his advisors having access to records kept by an employee in that employee’s office. However, as the access rights extend to access to original records, including electronic records, Brett Hawksford and his advisors are entitled to access to the computer system in which such records are stored. That does not mean that the access to the computer system is unlimited. Nor is the only restriction on access the restriction in para 31 of the orders. A further restriction is that prior notice be given of the categories of records to be inspected. There is no reason why such access should not be given in a conference room for that purpose.

42 The making of copies, including electronic copies, of documents is expressly dealt with by order 34. The right to make copies is part of the Access Rights. Brett Hawksford is entitled to make copies. Order 34 does not provide that copies may only be made using Bremick’s facilities. I see no reason why, if he wishes, Brett Hawksford or his solicitors should not use their own facilities to copy the records inspected. Paragraph 34 is silent as to whether Bremick is entitled to charge for the use of its facilities to make copies. Bremick has provided electronic copies of documents requested and has not charged for doing so. I see no reason to make any orders to the effect of the declarations sought in para 1(e). No objection has been made to Brett Hawksford or his advisors using their own equipment to scan or copy documents. The declaration sought by Brett Hawksford does not extend to a declaration that he is entitled to use Bremick’s equipment to make copies at no charge. I see no reason to make any further orders in relation to copying.

43 In summary, I will make supplemental orders to give further effect to the orders of Palmer J of 8 December 2005 to provide that:

a) the definition of “Professional Advisors” should be varied to include support staff employed by any such professional advisor who are to provide clerical services in connection with the scanning or copying of records, provided that any such employee has executed a confidentiality undertaking in the terms of and in accordance with para 35 of the orders of 8 December 2005;

b) Brett Hawksford and his Professional Advisors are entitled to exercise the Access Rights in relation to duplicate documents provided to them, whether in hard copy or electronic form, in private (unless such duplicate documents are Bremick’s or BMB Investments only copies of such documents);

c) Brett Hawksford and his Professional Advisors are entitled to access to original documents, including original records stored on Bremick’s computer system (other than documents the subject of order 31 of 8 December 2005), where such documents have been the subject of a notice in accordance with order 33(e);

d) access to such original documents stored on Bremick’s, or BMB Investments’, computer system, may be made available by an employee of Bremick or BMB Investments accessing the computer system to obtain access to such documents as were the subject of prior notice for the inspection of Brett Hawksford and his Professional Advisors, and that Bremick and BMB Investments are entitled to have such employee remain in control of the computer terminal through which access to such documents is made available for inspection by Brett Hawksford and his Professional Advisors; and

e) Bremick and BMB Investments are entitled to an employee of theirs being present whilst original documents in hard copy form are inspected by Brett Hawksford and his Professional Advisors.

44 I do not accept that the effect of these last orders is to “water down” the orders made by Palmer J on 8 December 2005 by revisiting and upholding arguments which were unsuccessfully advanced before Palmer J. As I have said, the Access Rights are expressly conditional upon the giving of prior notice of categories of documents to be inspected and are to be exercised in accordance with that notice. That is inconsistent with Brett Hawksford’s contentions that he is entitled to the access codes to enable uninhibited and unsupervised access and inspection of all financial records and books of Bremick stored in electronic form. In any event, the evidence adduced on this application, which apparently was not before Palmer J, that it is not possible to grant “read only” access to the computer system would justify a variation of the existing orders if, which I do not accept, the orders I will make would involve a variation of substance to the orders of Palmer J.

45 I direct that counsel for the Brett Hawksford parties bring in short minutes of order in accordance with these reasons.

Costs

46 The Michael Hawksford parties were substantially successful on the privilege issue. Neither party was successful in relation to the Eighth Interlocutory Application. There will be no orders as to costs in relation to Eighth Interlocutory Application. Apart from the orders to give effect to these reasons, that application should be dismissed. The costs of the privilege issue will be the Michael Hawksford parties’ costs in the proceedings.

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