In the matter of Recycling Holdings Pty Ltd (in liquidation) (deed administrator appointed) ACN 123 236 573 (No 4)

[2015] NSWSC 2018

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Recycling Holdings Pty Ltd (in liquidation) (deed administrator appointed) ACN 123 236 573 (No 4) [2015] NSWSC 2018
Hearing dates:	13 March 2015
Date of orders:	13 March 2015
Decision date:	13 March 2015
Jurisdiction:	Equity
Before:	Brereton J
Decision:	Interlocutory process dismissed with costs.
Catchwords:	EVIDENCE – subpoenae – objection to production of documents the subject of subpoenae – notes of solicitor-client-administrator meeting – legal professional privilege – waiver – where administrator’s notes already disclosed – relevance – where issue as to administrator’s independence – costs agreements – whether costs agreements subject to legal professional privilege – whether costs agreements relevant to proceedings.
Legislation Cited:	(NSW) Evidence Act 1995, s 119, s 122(3) (NSW) Uniform Civil Procedure Rules 2005, r 1.9
Cases Cited:	Cook v Pasminco Limited (No 2) [2000] FCA 1819; (2000) 179 ALR 462
Category:	Procedural and other rulings
Parties:	Salmat Limited ACN 002 724 638 (first plaintiff/first respondent) Salmat Mediaforce Pty Limited ACN 001 702 129 (second plaintiff/second respondent) Fuji Xerox Businessforce Pty Limited ACN 137 933 905 Recycling Holdings Pty Ltd (in liquidation) (deed administrator appointed) ACN 123 236 573 (first defendant) Philip Raymond Hosking and David Anthony Hurst in their capacities as deed administrators of Recycling Holdings Pty Ltd (in liquidation) (deed administrator appointed) ACN 123 236 573 (second defendants) Jason Kenneth Ryan (third defendant/first applicant) Front Foot Project Funding Pty Limited ACN 601 976 346 (fourth defendant/second applicant)
Representation:	Counsel: A Henskens SC w S A Wells (plaintiffs/respondents) D L Cook (third & fourth defendant/applicants) C Alexander (interested party) Solicitors: Thomson Geer (plaintiffs) Downeys Lawyers Pty Limited (first defendant) James Hamilton Surry Partners Lawyers (second defendants) Pure Legal (third & fourth defendants)
File Number(s):	2014/354864

Judgment (ex tempore)

1. HIS HONOUR: By interlocutory process filed on 2 March 2015, Kevin Emanuel, who is the solicitor for Recycling Holdings in other proceedings in which it sues the present plaintiffs, seeks an order setting aside a subpoena for production issued to him on 23 December 2014 and alternatively an order (pursuant to (NSW) Uniform Civil Procedure Rules 2005, r 1.9) that he not be required to produce the documents sought in the subpoena.

2. The subpoena requires production of the following documents:

1.   One copy of all documents evidencing or recording the communications at the meetings in respect of the administration of the Company held on 24 June 2014 and 9 September 2014 attended by, inter alios, the Deed Administrators of Recycling Holdings Pty Limited (In Liquidation) (Deed Administrators appointed), Mr Jason Ryan, you and others.

2.    One copy of any fee arrangements entered into with respect to the conduct of Supreme Court proceedings no. 2012/300643 on behalf of Recycling Holdings Pty Limited (In Liquidation) (Deed Administrators appointed).

3. Objection is taken to both paragraphs on the grounds of litigation privilege under the (NSW) Evidence Act 1995, s 119, and as to relevance.

4. The documents referred to in paragraph 1 of the subpoena are the solicitor's notes of meetings between his client, Mr Ryan, and the proposed deed administrators of his client, Recycling Holdings, who were subsequently appointed voluntary administrators and deed administrators. The question whether, as contended, the communications that took place at those meetings were for the dominant purpose of the litigation in which Mr Emanuel acts within the meaning of Evidence Act, s 119, is not a straightforward one.

5. On the one hand, there is a respectable argument that the whole purpose, or at least the main purpose, of appointing administrators was to enable those proceedings to be continued, the company having gone into liquidation. On the other, there is a respectable argument that the dominant purpose was not concerned with the provision of legal services in the proceedings, but with the appointment of administrators.

6. I am, however, relieved from the necessity to answer that question because, as a result of a subpoena issued to the administrators, their notes of those meetings were produced by the administrators of Recycling Holdings, who is at least one of the relevant clients for the purpose of s 119 and without any objection on the part of Mr Ryan, whose solicitor was present when they were produced without objection, and who was the other potential relevant client for that purpose. Those notes record the administrator's record of the communications that took place at those meetings. The effect then is that for the purpose of Evidence Act, s 122(3)(b), "the substance of the evidence", that is to say the communications that took place at the meeting, has been disclosed with the express or implied consent of the relevant clients. For that reason, the document is no longer entitled to privilege under s 119, if it originally was.

7. As to relevance, there will be an issue at the hearing as to whether whatever happened at this meeting bears on the independence of the administrators in any meaningful way. It may be ultimately that it is held that it does not. But at this stage, what transpired at these meetings is in issue on the pleadings. There has been no application to strike out the relevant pleadings, and in those circumstances it seems to me that it cannot be said that evidence that goes to prove or disprove an allegation of fact made in the pleadings is irrelevant. Accordingly, I cannot hold that the documents sought are not relevant in the adjectival sense that is applicable on this type of application.

8. Turning to paragraph 2, generally speaking, costs agreements are not subject to legal advice or litigation privilege [Cook v Pasminco Limited (No 2) [2000] FCA 1819; (2000) 179 ALR 462]. It may be otherwise if those costs agreements will disclose tactics or strategy, but there is no evidence that these costs agreements would do so.

9. As to relevance, there is an issue in the proceedings as to whether Front Foot has the financial capacity to fund the other proceedings which it has undertaken to fund by the funding agreement. Prima facie, the costs to be incurred in those proceedings are relevant to its capacity to fund them and insofar as it might be alleged that its capacity depends on the capacity of Mr Ryan who stands behind it, to his capacity to do so. While ultimately the agreements may not prove incapacity at all, on their own or even with other documentation, it cannot be said that they are not relevant in the adjectival sense to the question of Front Foot's capacity. Nor do I accept that only the latest agreement is necessarily relevant; one simply does not know what is the inter-relationship between the several costs agreements and what light each might cast on the other and on the ultimate position. For those reasons, the documents in paragraph 2 are neither privileged nor irrelevant.

10. The Court orders that the interlocutory process filed 2 March 2015 be dismissed with costs.

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Decision last updated: 18 February 2016