High Title (Ashburton) Pty Ltd v Bradmill Industries Ltd

[1982] FCA 76

HIGH TITLE (ASHBURTON) PTY. LTD. v. BRADMILL INDUSTRIES LTD.
No. G133 of 1981 (1982) 61 FLR 476
Trade Practices - Practice - Evidence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Trade Practices - legal professional privilege - applicants commenced proceedings alleging contravention of s. 52 of the Act, passing off and infringement of trade marks - respondents filed verified lists of documents claiming privilege for certain documents - applicants challenge sufficiency of discovery of documents - Grant v. Downs considered.

Trade Practices Act (Cth.) 1974 s. 52

Practice - Discovery - Sufficiency - Legal professional privilege - Documents - Whether privileged.

Evidence - Legal professional privilege - Discovery.

HEADNOTE

In proceedings for injunctions and damages based on alleged contraventions of s. 52 of the Trade Practices Act 1974 the applicants challenged the sufficiency of discovery of the documents of the respondents.

One respondent claimed that certain enumerated documents were privileged from production on the grounds that, inter alia, they were confidential and came into existence after the present litigation was contemplated and with a view to the litigation for the purpose of giving and receiving advice or obtaining evidence or obtaining information which might disclose relevant evidence and in each case in respect of the proceedings.

Held: (1) In the case of communications and materials submitted by a client to his legal adviser, legal professional privilege is confined to such of those documents as are brought into existence for the sole purpose of their being submitted to the legal advisers for advice or for use in existing or anticipated litigation. A document which would, in any event, have been brought into existence for another purpose is not privileged from production after discovery on that ground.

Grant v. Downs (1976) 135 CLR 674, applied.

National Employers' Mutual General Insurance Association Ltd. v. Waind (1979) 141 CLR 648; Trade Practices Commission v. Sterling (1979) 36 FLR 244, referred to.

(2) The claim of privilege from production of the enumerated documents did not satisfy the sole purpose test.

(3) Documents described as memoranda from officers from the respondents to each other which came into existence following the receipt of the letter of demand from the applicants' patent-attorneys solely in response to that letter and solely as a result of anticipated litigation - there being no suggestion in the description that the documents were brought into existence for the purpose of submission to the respondents' legal advisers - did not satisfy the sole purpose test.

HEARING

Sydney, 1982, April 5, 16. #DATE 16:4:1982

MOTION.

The facts appear in the judgment.

C.A. Sweeney, for the applicants.

G.K. Downes, for the respondents.

Cur. adv. vult.

Solicitors for the respondents: Allen Allen & Hemsley.

H.W. FRASER

ORDER

1. Each of the respondents give further discovery of documents by filing and serving on the solicitors for the applicants within fourteen days of today a further full and sufficient list of documents in accordance with Order 15 Rule 6 of the Federal Court Rules relating to any matter in question between it and the applicants and an affidavit verifying the list.

2. Costs of the applicants of this application will be their costs in the proceeding. Orders accordingly.

JUDGE1

High Title (Ashburton) Pty. Limited and associated companies ("the applicants") sue Bradmill Industries Limited and Actil Limited ("the respondents") for damages and injunctions based on alleged contraventions of s. 52 of the Trade Practices Act 1974, passing off and alleged infringements of trade marks.

The applicants manufacture and sell ladies' fashion garments under the name and bearing the trade mark and label "FEELINGS". The respondents manufacture and sell bed linen under the name "FEELINGS".

The applicants challenge the sufficiency of the discovery of documents by the respondents. Each respondent filed separate verified Lists of Documents; but for present purposes they are the same in all material respects.

Paragraph 2 of the List of Documents filed by the second respondent (I refer to it for convenience in view of one of the submissions of the applicants which I shall mention in a moment) provides:-
"2. The documents enumerated in Part II of Schedule 1 are privileged from production on the grounds that:-

(a) they are confidential and were written to or by the Respondents' solicitors for the purpose of receiving and giving legal advice to the Respondents in respect of these proceedings; and/or

(b) they are confidential and came into existence after the present ligitation(sic) was contemplated and with a view to the litigation for the purpose of giving and receiving advice or obtaining evidence or obtaining information which might disclose relevant evidence and in each case in respect of these proceedings."

Part II of Schedule 1 provides:-
"1. All correspondence between the Second Respondent and its solicitors and Patent and Trade Mark Attorneys, file notes, briefs to Counsel, memoranda and other correspondence on the file of its solicitors relating to matters the subject of this action.

2. Memoranda and other documents prepared by the Second Respondent for the purpose of obtaining legal advice and/or for the purpose of this litigation or in contemplation of litigation."

The solicitors for the respondents wrote to the solicitors for the applicants describing the particular documents in respect of which privilege from production, was claimed under paragraph 2 of the Lists of Documents. The description is contained in two letters dated 25 March 1982 and 1 April 1982; and it is necessary (though regrettably a little confusing) that I set out the relevant parts of each letter as there are some differences between them:-
(a) "1. Letter Arthur S. Cave & Co to Actil Limited dated 20 March, 1981. We enclose a copy of this letter less one paragraph which has been blanked from page 2 of the letter. The part which has been omitted contains legal advice to our client. The letter was signed by Stanley Cave, a patent attorney and partner of Arthur S. Cave & Co." (25 March letter. This is not mentioned in the 1 April 1982 letter).

(b) "2. Memo C. E. Murphy from Robin Ferris dated 17 September. This memo is an internal memorandum and came into existence at a time when litigation was contemplated or anticipated and following receipt of the letter of demand sent by Clement Hack & Co. to Bradmill Industries Ltd." (25 March letter).

"1. Re document number 2 in our letter of 25 March, 1982. This memorandum is an internal memorandum and came into existence following the receipt of the letter of demand sent by Clement Hack and Co. to Bradmill Industries Limited solely in response to that letter of demand and solely as a result of anticipated or contemplated litigation." (1 April letter).

(c) "4. Internal memorandum from J. A. Francis to Mr. R. Ferris dated 18 September, 1981. This document is an internal memorandum which came into existence at a time when litigation was contemplated or anticipated and following receipt of the letter of demand from Clement Hack & Co." (25 March letter).

"2. Document numbered 4 in our letter of 25 March, 1982. This memorandum is an internal memorandum and came into existence following the receipt of the letter of demand sent by Clement Hack & Co. to Bradmill Industries Limited solely in response to that letter of demand and solely as a result of anticipated or contemplated litigation." (1 April letter).

(d) "5. Handwritten note: This document came into existence at a time when litigation was contemplated or anticipated and following receipt of the letter of demand." (25 March letter).

"3. Document numbered 5 in our letter of 25 March, 1982. This memorandum (sic) is an internal memorandum and came into existence following the receipt of the letter of demand sent by Clement Hack & Co. to Bradmill Industries Limited solely in response to that letter of demand and solely as a result of anticipated or contemplated litigation." (1 April letter).

(e) "8. Memorandum Mr. C. S. Simpson to Mr. A. R. Ferris dated 22 September 1981: This document came into existance(sic) at a time when litigation was contemplated(sic) or anticipated." (25 March letter).

"6. Document numbered 8 in our letter of 25 March, 1982. This memorandum is an internal memorandum and came into existence following the receipt of the letter of demand sent by Clement Hack & Co. to Bradmill Industries Limited solely in response to that letter of demand and solely as a result of anticipated or contemplated litigation." (1 April letter).

The documents under challenge fall conveniently into two categories: the letter of 20 March 1981 on the one hand and the other documents on the other hand.

As to the former, the point is a short one. The applicants submitted that the letter of 20 March 1981 from Arthur S. Cave & Co. to the second respondent does not fall within the description of the documents for which privilege from production is claimed in paragraph 2 (a) of the List of Documents because it is a letter from a firm of patent attorneys, not solicitors, and paragraph 2 (a) speaks only of documents "written. . . by the respondents solicitors for the purpose of . . . giving legal advice to the respondent in respect of these proceedings". The emphasis is mine.

The respondents sought to meet this objection by arguing that the description of documents in Part II of Schedule I which refers in terms to correspondence between the first or second respondent as the case may be, and its solicitors "and Patent and Trade Mark Attorneys", must be read as being incorporated in the words of paragraph 2 (a). The difficulty with this argument is that the documents described in Part II of Schedule I referring to Patent and Trade Mark Attorneys could fall within paragraph 2 (b) of the list also; and the respondents base their argument on the ground that the letter falls within paragraph 2 (a), not 2 (b). The point raised by the applicants is a technical one and is probably easily cured; but it is correct. The respondents should file further verified lists of documents.

I should add that no point is taken that, as the letter was written some six months before the letter of demand preceding the institution of this proceeding, was written (16 September 1981) it may not be a letter "written. . . for the purpose of. . . giving legal advice to the respondents in respect of these proceedings." Again the emphasis is mine.

As to the remaining four documents, it is common ground that if they fall within any paragraph of the Lists of Documents it can only be paragraph 2 (b); and that these documents can only successfully support a claim of immunity from production if they satisfy the test laid down by Stephen, Mason and Murphy JJ. in Grant v. Downs (1976) 135 C.L.R. 674.

The applicants made two submissions: first that the claim for privilege expressed in paragraph 2 (b) is not on its face a good claim as it falls short of the test laid down by the High Court in Grant v. Downs (supra); and second, that even if the language of paragraph 2 (b) does satisfy that test, the documents themselves, by their very description in the two letters of 25 March and 1 April 1982, cannot sustain a claim of privilege from production.

In Grant v. Downs (supra), the deceased Grant was admitted as a patient to a psychiatric centre. On the night of his admission he was left on his own in a single room. He escaped through a window and died of broncho-pneumonia in the hospital grounds. His widow sued the Nominal Defendant in the Supreme Court of New South Wales under the Compensation to Relatives Act 1897 (N.S.W.) alleging that the Government of New South Wales had the care, control and management of the psychiatric centre, that the deceased had been admitted to it as a mentally ill person, and that the Government had so negligently cared for him as to allow him to escape from his room whereby he had died from exposure.

It the course of interlocutory proceedings for discovery the defendant disclosed the existence of certain reports to the Department of Public Health relating to the deceased's death; but objected to produce them on the ground of legal professional privilege. The Commissioner for Personal Health Services in the Health Commission who had been Director of State Psychiatric Services at the time of the death, deposed in an affidavit that the reports were prepared for several purposes:-
"One purpose for the preparation of the reports was to assist in determining whether there had been any breaches of discipline by staff and, if so, what action should follow.

A further purpose was to detect whether there were any faults in the security and general running of the Institution concerned so as to prevent, so far as possible death or injury of patients.

The remaining purpose was to have a contemporaneous detailed report. . . which could be submitted to the legal representatives of the Department of Public Health for the purpose of enabling them to advise the said Department respecting its legal position and, in the case of death of a patient to represent the said Department at Inquests and in any civil proceedings relating to death or injury of a patient to act on behalf of the said Department. With respect to civil proceedings it was considered at these conferences that patients injured in unusual circumstances, and also relatives of patients who died in unusual circumstances, might comment civil proceedings seeking compensation for the injury or death and that therefore it was important that these reports be prepared so as to be available for the legal representatives of the Department should such proceedings result."
Grant v. Downs (supra) at p. 681.

Stephen, Mason and Murphy JJ. considered the relevant principles of law governing the privilege which attaches to communications and material submitted by a client to his solicitor for the purpose of advice or for the purpose of use in existing or anticipated litigation, in particular when the materials have been called into existence to serve more than one purpose, submission to the solicitor being only one of the purposes. Their Honours held at p. 688:-
"All that we have said so far indicates that unless the law confines legal professional privilege to those documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings the privilege will travel beyond the underlying rationale to which it is intended to give expression and will confer an advantage and immunity on a corporation which is not enjoyed by the ordinary individual. It is not right that the privilege can attach to documents which, quite apart from the purpose of submission to a solicitor, would have been brought into existence for other purposes in any event, and then without attracting any attendant privilege. It is true that the requirement that documents be brought into existence in anticipation of litigation diminishes to some extent the risk that documents brought into existence for non-privileged purposes will attract the privilege but it certainly does not eliminate that risk. For this and the reasons which we have expressed earlier we consider that the sole purpose test should now be adopted as the criterion of legal professional privilege."

Barwick C. J. adopted a different test which he expressed in these words at p. 677:-
"Having considered the decisions, the writings and the various aspects of the public interest which claim attention, I have come to the conclusion that the Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection."

The remaining member of the Court, Jacobs J., said at p. 692:-
"I think that the question which the court should pose to itself is this - does the purpose of supplying the material to the legal adviser account for the existence of the material? I use the word purpose here in the sense of intention - the intended use. The question is one of fact."

In National Employers' Mutual General Insurance Association Limited v. Waind and Anor (1979) 141 C.L.R. 648 the High Court reaffirmed Grant v. Downs and rejected an argument that:-
"If, on the facts, the documents are brought into existence for the dual purpose of deciding what it will do and for use in litigation by legal advisers when appropriate, that purpose should be considered as one purpose which, including as it does submission to legal advisers, would attract the relevant head of privilege.":
National Employers' Mututal General Insurance Association Limited v. Waind and Anor (supra) at p. 656. Thus, it is the law of Australia that in the case of communications and materials submitted by a client to his legal adviser, legal professional privilege is confined to such of those documents as are brought into existence for the sole purpose of their being submitted to the legal advisers for advice or for use in existing or anticipated litigation. A document which would, in any event, have been brought into existence for another purpose is not privileged from production after discovery on that ground.

As I observed in Trade Practices Commission v. Sterling (1978) 36 F.L.R. 244, Grant v. Downs did not purport to cover the whole field of documents immune from production on the ground of legal professional privilege. For example, briefs to counsel, counsel's opinions, and notes made by solicitors of communications which are themselves privileged are well recognised categories of documents which may attract legal professional privilege. However, the sole purpose test enunicated in Grant v. Downs may apply to all such documents.

The claim of privilege from production described in paragraph 2 (b) of the Lists of Documents plainly does not satisfy the sole purpose test; nor does it answer the dominant purpose test preferred by Barwick C. J. in Grant v. Downs.

As to the second submission of the applicants, assuming that the documents answer their description in the two letters of 25 March and 1 April 1982, they are memoranda from officers of the respondents to each other which came into existence following the receipt of the letter of demand from the applicants' patent attorneys solely in response to that letter and solely as a result of anticipated or contemplated litigation. That description does not satisfy the sole purpose test enunciated in Grant v. Downs; or the test proposed by Jacobs J. Indeed there is nothing in the description of the documents which suggests that they were brought into existence for the purpose of submission to the respondents' legal advisers at all.

By consent, the documents in question in this application were handed to my Associate by counsel for the respondents so that I could examine them for myself if I wished. I did not examine them because I did not think it necessary to do so.

I order each of the respondents to give further discovery of documents by filing and serving on the solicitors for the applicants within fourteen days of today a further full and sufficient list of documents in accordance with Order 15 Rule 6 of the Federal Court Rules relating to any matter in question between it and the applicants and an affidavit verifying the list.

The costs of the applicants of this application will be their costs in the proceeding.