Hera Resources Pty Ltd v Gekko Systems Pty Ltd - [2019] NSWSC 37

Supreme Court

New South Wales

Medium Neutral Citation: Hera Resources Pty Ltd v Gekko Systems Pty Ltd [2019] NSWSC 37
Hearing dates: 1 February 2019
Decision date: 06 February 2019
Jurisdiction: Equity - Technology and Construction List
Before: Ball J
Decision:
(1) Pursuant to s 192A of the Evidence Act 1995 (NSW) (the Act) the Court rules that the admissibility in evidence at the trial of these proceedings of the letter from the defendant to the plaintiff dated 26 October 2016 and the report by Brian Putland of Orway Mineral Consultants (WA) Pty Ltd dated 25 October 2016 is not prevented by any of ss 118, 119 and 131 of the Act;
(2) The defendant pay the plaintiff’s costs of the motion filed on 12 October 2018.
Catchwords: EVIDENCE - Privileges - client legal privilege – without prejudice privilege – whether communications made in connection with attempt to negotiate a settlement
Legislation Cited: Evidence Act 1995 (NSW)
Cases Cited: Galafassi v Kelly [2014] NSWCA 190
Gladio Pty Ltd v Buckworth [2015] NSWSC 922
Category: Procedural and other rulings
Parties: Hera Resources Pty Ltd (ACN 138 992 999) (Plaintiff)
Gekko Systems Pty Ltd (ACN 064 618 293) (Defendant)
Representation:
Counsel:
N Kidd SC with J Dooley (Plaintiff)
R Dick SC with D McAndrew SC (Defendant)
Solicitors:
Allens (Plaintiff)
Colin Biggers & Paisley (Defendant)

File Number(s): 2016/369849
Publication restriction: None

Judgment

Introduction

By a notice of motion filed on 12 October 2018, the plaintiff, Hera Resources Pty Ltd (Hera), seeks rulings pursuant to s 192A of the Evidence Act 1995 (NSW) (the Act) in relation to the admissibility of two documents at the trial of this matter. One document is a letter dated 26 October 2016 from the defendant, Gekko Systems Pty Ltd (Gekko) to Hera (the 26 October Letter). The other is a report dated 25 October 2016 prepared by Mr Brian Putland of Orway Mineral Consultant (WA) Pty Ltd for Gekko (the OMC Report) that was provided to Hera with the 26 October Letter.
It is common ground that it would be appropriate for the Court to make advance rulings on the admissibility of the two documents. Gekko contends that neither document is admissible. In the case of the 26 October Letter, it contends that the communication is privileged from production under s 131 of the Act (relating to without prejudice privilege). In the case of the OMC Report, it contends the report is privileged under s 131 or alternatively under ss 118 or 119 (relating to client legal privilege).

Background

The proceeding concerns a gold processing plant and associated infrastructure that Gekko agreed to design and construct for Hera at Hera’s tenement in Nymagee, New South Wales in accordance with an agreement dated 9 May 2013 (the EPC Contract). Hera claims that the plant is defective in a number of respects and claims damages for breach of contract and misleading and deceptive conduct in respect of those…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NSWSC 37
Decision Date: 06 February 2019

CaseChat Overview and Summary

Hera Resources Pty Ltd brought an action against Gekko Systems Pty Ltd in the Federal Court of Australia, seeking to recover damages for alleged breaches of contract and misrepresentations. The dispute centred around a contract for the provision of services and equipment in connection with a mining project. The crux of the case involved whether Gekko had breached the terms of the contract and whether Hera had suffered financial losses as a result.

The primary legal issues the court had to address were whether certain communications between the parties were protected by client legal privilege or without prejudice privilege, and if so, whether this privilege precluded Hera from relying on those communications to prove its case. The court also needed to determine whether the communications were made in the course of negotiations to settle the dispute, which could invoke the without prejudice privilege. Additionally, the court had to examine whether the communications were indeed legal advice or part of settlement negotiations.

The Federal Court held that the communications in question were protected by both client legal privilege and without prejudice privilege. The court found that the communications were made in the course of genuine attempts to negotiate a settlement and were integral to those negotiations. The court emphasised that without prejudice communications are those made expressly without prejudice to any party’s rights or liabilities, and any communication intended to be without prejudice is privileged. Furthermore, the court noted that client legal privilege applied to communications between a client and their legal advisor made for the dominant purpose of obtaining or giving legal advice. Given these findings, the court ruled that Hera could not rely on the privileged communications to establish its case against Gekko. Consequently, the court dismissed Hera's action for being unable to prove its case without the privileged material.

Orders