Jess and Jess and Ors
[2016] FamCA 1022
•24 November 2016
FAMILY COURT OF AUSTRALIA
| JESS & JESS AND ORS | [2016] FamCA 1022 |
| FAMILY LAW – LEGAL PROFESSIONAL PRIVILEGE – joint legal professional privilege |
| APPLICANT: | Ms E Jess |
| RESPONDENT: | Ms N Jess | ||||
RESPONDENT THIRD PARTIES | Mr Jess Jnr & Ors | ||||
| FILE NUMBER: | MLF | 3444 | of | 2006 | |
| DATE DELIVERED: | 24 November 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 7 September 2016, 2–3, 7, 10, 11 November 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dickson QC and Mr O’Shannessy |
| SOLICITOR FOR THE APPLICANT: | Kenna Teasdale Lawyers |
| COUNSEL FOR THE RESPONDENT: | No appearance |
| SOLICITOR FOR THE RESPONDENT: | Self-represented |
| COUNSEL FOR THE REPRESENTED THIRD PARTIES: | Mr Waller QC, Mr Strum QC and Mr Mitchell |
| SOLICITOR FOR THE REPRESENTED THIRD PARTIES: | HWL Ebsworth Lawyers |
Orders
IT IS ORDERED THAT:
1.Paragraph 5 of the Order made on 11 March 2015 be and is hereby discharged with effect from 12.00 noon on 1 December 2016.
2.By not later than 10.00 am on 25 November 2016 the solicitors for the Represented Third Parties deliver to my Court Officer two copies of the Pages, each copy in a sealed envelope marked “The Pages – not to be opened or inspected otherwise in accordance with an order of the Court”.
3.From 12.00 noon on Thursday 1 December 2016 the husband be and is hereby entitled to collect from my Court Officer and retain one of the envelopes referred to in paragraph 2 of this Order (and the other envelope remain in the Court).
4.Until further order, the wife, MS E JESS, be and is hereby restrained by herself her servants or agents (including her lawyers) from inspecting or viewing the Pages (or any of them) or from causing permitting or suffering anyone else to do so in circumstances where the contents of the Pages (or any of them) may come to her attention.
5.I reserve liberty to the parties to apply on short notice, and in particular to the wife, to apply for a discharge of paragraph 4 of this Order.
6.The applicant and Mr Jess Jnr are each granted a costs certificate pursuant to s 10(2) of the Federal Proceedings (Costs) Act 1981, in relation to the proceedings on each of 14, 15 and 16 November 2016 limited to the costs of the attendance of senior counsel, counsel and solicitors on the basis that I could not sit due to ill health.
7.The matter be otherwise adjourned to 11.00 am on 1 December 2016 for any application by Mr Jess Jnr for a stay of this Order and otherwise for directions.
AND IT IS NOTED that paragraph 4 of this Order was suggested by and consented to by the wife as a short term measure to facilitate inspection by Ms N Jess of the Pages.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jess & Jess and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 3444 of 2006
| Ms E Jess |
Applicant
And
| Ms N Jess |
Respondent
And
| Mr Jess Jnr & Ors |
2nd to 29th Respondent Third Parties
REASONS FOR JUDGMENT
Table of Contents
Introduction
The Law
The Subpoena
The Hearing and Legal Representation
The Dispute
Background
Relationship
The business and the DODT
The franchise proceedings
Family Law proceedings
Mr LM, solicitor
Mr Mitchell, solicitor
Other privilege
Proof and Findings of Fact
Evidence
Mr Jess Jnr
Mr FG
The Pages
Page 1104
Pages 1106–1107, 1113, 1132, 1134, 1141 and 1204
Page 1108
Page 1111
Page 1112
Page 1125
Pages 1126 and 1130
Pages 1128 to 1129
Pages 1195 to 1197 and Pages 1199 to 1200
Confidence in the Process of Identifying Documents to which Legal Professional Privilege Attaches
Abandonment of claim of privilege to documents
Pages 1176 and 1177
Page 1127
Conclusion
Annexure A: Pages 1176 and 1177
Introduction
The applicant wife seeks that 18 pages of documents produced by Mr FG, a taxation lawyer, on subpoena be released for inspection. The 2nd respondent, Mr Jess Jnr, objects on the basis of legal professional privilege which he claims is solely attributable to him and, therefore, entitles him to resist the documents being released to the wife and/or the husband. The central issues are whether Mr Jess Jnr was the client of Mr FG at the time the documents were created and whether the dominant purpose of giving or obtaining the advice or the provision of Mr FG’s services on these occasions was referrable to Mr Jess Jnr. The wife challenges Mr Jess Jnr’s claim of legal professional privilege and contends that legal professional privilege attaches to Mr N Jess rather Mr Jess Jnr.
This interlocutory dispute arises in the context of the wife’s application commenced in September 2013 to set aside a settlement of financial proceedings in this court and proceedings in the Supreme Court of Victoria entered into by her with the husband and Mr Jess Jnr in September 2009. At all material times, the wife claimed that a Deed of Declaration of Trust (“DODT”), entered into between the husband and Mr Jess Jnr, dated and allegedly created in 28 February 2002, was not genuine and was a document which was created fraudulently by Mr Jess Jnr and an employee, Mr W, for the purpose of defeating her entitlement to an alteration of property interests. In financial proceedings in this court, the husband had relied upon the DODT, as between himself and the wife, to say that the substantial business Y Limited (“YL”) had been transferred to Mr Jess Jnr and, therefore, ought to be excluded from the alteration of property interests in this court. The first documentary reference to the DODT appears in a solicitor’s note dated 9 January 2007, which was well after separation and nearly five years after the husband, Mr Jess Jnr and Mr W say the DODT was executed. In July 2007, Mr Jess Jnr instituted proceedings in the Victorian Supreme Court for declaratory relief and to implement the terms of the DODT, a course supported by Mr N Jess.
A consequence of the DODT was, however, to leave Mr N Jess with an assessment for a large amount of capital gains taxation and an apprehension on the part of Mr Jess Jnr that he might also be assessed for a large amount of capital gains taxation. Mr N Jess’s personal liability was initially assessed at $16 million plus penalties but, by a re-assessment, quickly increased to $50 million inclusive of penalties. It is now more than twice that amount. The capital gains tax issue had nothing to do with the wife. It was between Mr Jess Jnr and Mr N Jess and the Australian Taxation Office.
From January or February 2009, Mr FG acted for both Mr N Jess and Mr Jess Jnr in relation to negotiations with the Australian Taxation Office (“ATO”). The negotiations with the ATO necessarily involved consideration of the DODT because that was the instrument which provided for the transfer of units which had triggered Mr N Jess’s liability for capital gains tax and Mr Jess Jnr’s potential liability. Apart from being a client of Mr FG, Mr Jess Jnr instructed Mr FG in his capacity as Mr N Jess’s attorney under power until mid-2010.
All of the documents which are the subject of this dispute were created between 12 February 2009 and 21 September 2009. Mr N Jess was closely aligned to Mr Jess Jnr and Mr W during that period. All of them were aligned against the wife.
In late September 2009 and on the eve final hearing in the Supreme Court proceedings about the DODT, which came to be called the Supreme Court trust proceeding, an overall settlement was reached between Mr N Jess, Mr Jess Jnr and the wife. The financial proceedings in the Family Court, the Supreme Court Trust proceeding and the franchise proceeding involving the wife’s sister were all compromised and concluded within a matter of days.
The DODT survived the settlements and was implemented by Mr Jess Jnr.
By mid-2010 the relationship between Mr Jess Jnr and Mr N Jess had deteriorated. Mr W remained aligned to Mr Jess Jnr. Mr N Jess’s taxation liability, referrable to the DODT remained unpaid.
On 17 June 2010 Mr Jess Jnr instructed Mr FG that Mr N Jess “has let [Ms E] back into his life” and that “[Mr N] saying things like [DODT] is a sham”.[1]
[1] “W46”, Tab 33, Pages 1020.
Later on 17 June 2010, Mr FG attended upon Mr N Jess in conference. Mr FG’s file note of the attendance[2] records, inter alia, “[Mr N Jess] say [Mr Jess Jnr] and [Mr B] concocted documents in 2005 for Family Law Proceedings — alleging a fraud”.
[2] “W46”, Tab 31, Pages 1025–1027.
On 22 June 2010 Mr Jess Jnr drafted a letter to Mr N Jess which he sent to Mr FG with a request to “let me know if anything is not correct or if you think that I have missed something”.[3] The draft letter addresses a number of points about the ATO’s assessment of Mr N Jess and that Mr Jess Jnr had a potential corresponding liability. In the course of summarising three alternative courses of action, Mr Jess Jnr wrote:
(c)The alternative point is that we pretend it didn’t happen and hope it goes away:
(i) ATO does not have to accept this point and will say that it is constructive avoidance
(ii) 3 years of court hearings would all have been for rubbish. Would have to be claimed to be a lie and perjury would have been committed.
(iii) This could only be done in court you against me one wins one loses. No one will win out of that except if you win. [Ms E] can claim more, you will be disgraced, as will [Mr B] as I as well as all of us could go to jail. NY consent would be ignored by the ATO. Doesn’t make a lot of sense just to get out of a Tax assessment that our legal advice and we believe is grossly incorrect.
The best approach is to let me work with [Mr FG] and get this sorted out before something stupid happens lets deal with the facts that we have presented to the ATO and get a resolution. They have made it very clear to me if they can’t get what they want from you they will try to get it from me.
…
[3] “W46”, Tab 35, Pages 1017–8.
On 25 June 2010 Mr FG wrote to Mr N Jess and Mr Jess Jnr[4] informing them that he could continue to act for them if they both accepted that “consistent with the whole basis of the arguments you both put forward during the Family Court and Supreme Court proceedings, the [DODT] was properly executed on 28 February 2002”. Mr FG sought written confirmation from Mr N Jess of his approval to proceed as he proposed. Mr N Jess did not provide those instructions.
[4] “W46”, Tab 36, Page 1014.
The basis of the wife’s application filed in September 2013 is that the 2002 Deed of Declaration of Trust was not entered into on the date it bears, was a fraudulent endeavour by the husband, Mr Jess Jnr and Mr W to defeat the wife’s interests in this court and is a sham. Mr N Jess supported the wife’s application.
The wife contends that the documents and files held by Mr FG relevant to the taxation affairs of Mr N Jess and Mr Jess Jnr between 12 February 2009 and 21 September 2009 and the advice which Mr FG gave or obtained for them, are probative of whether the DODT was created on the date it bears or was created much later and fraudulently.
By a document signed and dated 5 July 2016,[5] Mr N Jess has waived legal professional privilege in relation to any instructions given by him or on his behalf to all relevant lawyers, including Mr FG, “Personally as to my affairs and/or as to the affairs of any corporate entity and/or beneficiary or which I controlled, up to and including 30 April 2010”.
[5] Exhibit “W48”.
This dispute has focussed on for whom Mr FG was acting when the documents were created and whether the dominant purpose for which the documents were created was to provide legal services to Mr Jess Jnr as opposed to Mr N Jess.
Mr FG gave evidence by affidavit and orally and was cross examined by both parties. Having been engaged to act for both Mr N Jess and Mr Jess Jnr from February 2009 in relation to the capital gain taxation consequences of the DODT, his evidence included a statement from the witness box that between 1 January 2009 and 30 June 2010 “I must say, I never really turned my mind to who was the ultimate client because, to me, they were one in the same”.[6]
[6] Transcript-in-Confidence, Page 519, lines 3–5.
The Law
As the plurality of the High Court observed in Daniels Corporation International v ACCC [2002] HCA 49 at page 5:
It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the "dominant purpose" test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the "sole purpose" test which had been applied following the decision in Grant v Downs. Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and the giving of evidence in judicial proceedings
Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell, that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth).
Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps, more accurately, an important common law immunity.
The legal onus of proving that documents are privileged in on a party claiming privilege, but an evidential onus may be cast upon the party seeking inspection if the claim for privilege is ‘apparently proper’(Coal Hub Pty Ltd v NSL Consolidated Ltd [2016] WASC 203[17]).
The court is entitled to look at any evidence before the court which may be capable of raising doubts as to the authenticity of the privilege claim. It is not confined to considering material relied upon by the party pressing privilege claim or the party seeking inspection (CTC Resources NL v Australian Stock Exchange Ltd [2006] WASCA 19).
The Subpoena
On 16 January 2015, Mr N Jess caused a subpoena to issue directed to Mr FG [folio 238] (“the subpoena”).
The schedule to the subpoena described the documents to be produced as follows:
1.All documents (hard copy of electronic) including all attachments to emails, in respect to Ms N Jess including your filed, file notes and instructions.
2.All correspondence and documents (hard copy of electronic) that refer to or are consequential upon Ms N Jess entering or purporting to enter into a declaration of trust dated 28 February 2002 with Mr Jess Jnr, including correspondence with Mr Jess Jnr, his servants or agents.
Mr FG complied with the subpoena by producing 11 folders documents which have been the subject to disputation over about 9 days of hearing. All of the documents relevant to this current dispute are referred to in the penultimate page under Folder No. 9 (pages 985–1323) and under Item 2 which is headed “Privileged: Claim of legal professional privilege by [Mr Jess Jnr]”.
On 22 January 2015 Mr Jess Jnr and the 4th, 7th, 8th, 9th, 13th, 18th, 27th, 28th and 29th respondents filed objections to the inspection of some documents produced by Mr FG[7]. Further objections were filed on 6 March 2015.[8]
[7] Folio [242] on the Court file
[8] Folio [245] on the Court file
On 6 March 2015 Mr Mitchell, solicitor for Mr Jess Jnr, swore an affidavit in response to the subpoena. The affidavit was filed on 6 March 2015 [246]. I will discuss it later and, for ease of reference, I will refer to that affidavit as “Mr Mitchell’s affidavit”. It is an important affidavit.
Only 18 pages remain in dispute for the purpose of this determination.
The Hearing and Legal Representation
We have had 68 days of hearing since 16 July 2014. It has been a disjointed process. There have been numerous interlocutory disputes. The evidence of Mr N Jess was taken out of turn because of concerns about his capacity to give evidence in the future. Estimates of time have not been adhered to and consequently the proceedings have been adjourned for significant periods whilst further days of hearing became available. I was ill and not available to sit on scheduled sitting days 14, 15 and 16 November 2016.
The wife has been represented by Mr Dickson QC and Mr O’Shannessy of counsel. Mr Jess Jnr and the represented third parties have been represented by Mr Waller QC, Mr Strum QC and Mr Justin Mereine of counsel.
Mr N Jess has been represented by the following lawyers and counsel.
a)From 27 November 2013 to 16 July 2015, Goldsmiths Lawyers acted and instructed Mr McCormack of counsel to appear;
b)From 16 July 2015 to 10 February 2016, Condello Lawyers acted and instructed Mr Walmsley QC to appear;
c)From 10 February 2016, Templeton Fox acted. Mr Anamourlis, solicitor, appeared on 11 February 2016. They instructed Mr Levine of counsel to appear from 15 February 2016 until 11 March 2016.
Templeton Fox have not filed Notice of Ceasing to Act.
Mr N Jess last attended court in person on 11 March 2016 when the proceedings were adjourned to August 2016.
On 9 August 2016, Mr Dickson QC, counsel for the wife, informed the court that Mr N Jess had been declared bankrupt on 8 July 2016. The court was further advised by Mr Dickson QC that Mr N Jess had serious health problems and would take no further part in the proceedings and that it was highly unlikely that he would be represented.
On 29 September 2016, Lander & Rogers, lawyers, filed a Notice of Address for Service for Mr N Jess’s bankruptcy trustees, GH Accountants. The bankruptcy trustees have elected to not participate in the proceedings and have not done so to any significant degree. There appears to be a tacit acceptance that Mr N Jess is receiving palliative medical treatment but there is no medical evidence in that respect. My impression is that Mr Jess Jnr and the represented third parties are not entirely convinced that Mr N Jess lacks the capacity to attend court if he wanted to do so.
The Dispute
Mr Jess Jnr claims legal professional privilege over 18 pages of documents which have been produced by Mr FG and objects to the documents being released to any party for inspection.
On 9 March 2016 I granted leave to the wife to make submissions in relation to certain pages being 1104, 1106–1108, 1111–1113, 1125–1130, 1132, 1134, 1141, 1176–177, 1195-1197, 1199–1200 and 1204. The wife asserts that Mr Jess Jnr was not the relevant client in the 18 pages identified by Mr Jess Jnr as being subject to legal professional privilege attaching solely to him. The wife asserts that legal professional privilege in the pages attaches solely to Mr N Jess but Mr N Jess has expressly waived privilege (see Exhibit “W48”).
Neither Mr Jess Jnr nor the wife assert that the documents in issue are subject to legal professional privilege which attaches to Mr N Jess and Mr Jess Jnr jointly but both stated that they do not exclude the possibility that I might make a finding to that effect. If I did make that finding, Mr Jess Jnr’s claim to sole legal professional privilege would fail because he would then be only one of two relevant clients and the documents would still be subject to joint legal professional privilege as between the Jesses and the wife. This hearing has not considered how the wife would be entitled to inspect the documents in a joint privilege scenario it enough indications have been given for me to suspect that it will not be straightforward.
I will determine whether the documents are protected by legal professional privilege to which Mr Jess Jnr is solely entitled to the exclusion of Mr N Jess and/or Ms E Jess. I will not consider whether joint legal professional privilege applies with respect to the remanents. Legal professional privilege is a significant common immunity which can only be asserted by those entitled to it. No party to these proceedings has laid out a case to invoke or to claim joint legal professional privilege, indeed, both argued against it. I do not consider that it is my place to identify joint professional privilege and impose it on the parties, like a consolation prize.
I have not identified documents which are subject to legal professional privilege of Mr N Jess alone. That is because I am not entirely satisfied there are any in the contested Pages. It is likely that I would need to inspect them before I could be satisfied of sole legal professional privilege attributable to Mr N Jess.
Background
I will set out the following further particulars and historical matters which I understand to be uncontroversial but are necessary to understand the context in which witnesses gave evidence in this dispute.
Relationship
The husband is nearly 87 years old.
The wife 49 years old.
The husband and wife commenced to live together on 1986 and married in 1988. There are three children of the marriage, C, HI and IJ.
Mr Jess Jnr is the son of the husband and his former wife, Ms JK Jess. Mr Jess Jnr was 16 years old when the husband and wife married and about 34 years old when the husband and the wife separated on in 2006. He is 44 years old.
In early 2002 Mr Jess Jnr was appointed Chief Executive Officer of the business Y Pty Ltd. Mr N Jess suffered strokes in May 2005 and in June 2006. The strokes left Mr N Jess impaired but to what extent is a matter of controversy. Mr N Jess made a number of wills and at least one codicil between 2000 and 2006, on each occasion with a solicitor.
The husband and wife separated in November 2006.
The business and the DODT
The husband established Y in the 1960’s. Y Pty Ltd was incorporated in 1981 and in 2003 changed its name to Y Limited (“YL”).
Y Pty Ltd is trustee of the Y Unit Trust. Pursuant to the DODT, existing units and any future unit holding of Mr N Jess in the Y Unit Trust was held for the benefit of Mr Jess Jnr from 28 February 2002. The trust in favour of Mr Jess Jnr was to vest, and all units be transferred by Mr N Jess to Mr Jess Jnr if, whilst Mr Jess Jnr is CEO of the business and, the management accounts of the business disclose EBIT of, or in excess of, $10 million in any one year within seven years of the DODT.
Mr Jess Jnr’s interest under the DODT is said to have vested on 30 June 2006. The terms of the DODT are implemented.
The franchise proceedings
During the marriage, the wife and her sister, Ms KL, each acquired a Y franchise which they operated through their companies T Pty Ltd and L Pty Ltd. T Pty Ltd was the franchisee of Y at Suburb S and L was the franchisee of Y at Suburb K.
By December 2006 YL claimed that the franchises operated by the wife and her sister were indebted to it for approximately $450,000 for unpaid stock.
On 15 December 2006 the wife and her sister, commenced proceedings against YL in the Supreme Court of Victoria to prevent Mr Jess Jnr and Mr N Jess from removing them from their respective franchise outlets (“the franchise proceedings”). The parties were all corporate entities.
The plaintiffs alleged that Mr N Jess had represented to each of them that they did not have to pay their respective debts to YL.
Family Law proceedings
The wife initiated financial proceedings in this court on 18 December 2006.
The husband consulted family law solicitors, Carew Counsel. Mr Jess Jnr and Mr W were instrumental in instructing Carew Counsel to act on behalf of Mr N Jess. Each attended with, and independently of, Mr N Jess for the purpose of instructing Carew Counsel to act for Mr N Jess.
Mr LM, solicitor
LM is a partner in the legal firm of MN Lawyers. That firm first acted for YL in various matters including as legal advisors in the franchise system known as Y. Mr LM swore affidavits on 20 August 2014 [169] and 26 August 2016 [318], the latter being directed specifically to the current dispute. Both affidavits were prepared/settled by Mr Mitchell, solicitor.
MN Lawyers acted for X in the franchise proceedings.
The franchise proceedings were against YL only. LM refers to Mr N Jess as “one of the officers of YL”.[9] He deposes to having attended upon Mr N Jess, Mr Jess Jnr and Mr W and others.
[9] Affidavit of Mr LM, sworn 20 August 2014 [4].
Mr LM retained Mr NO, of counsel, to appear for YL in the franchise proceeding. In response to a query from Mr NO, on 20 December 2006 Mr LM wrote to Mr NO describing the husband’s interest in BCJ in the following terms:
[11] … I sent an email to [Mr NO] to explain to him that the [Mr N Jess] Unit Trust had 100 D class units, of which [Mr N Jess] held 72 and the remaining 28 were held by various companies, most of which [Mr N Jess] controlled.
This communication is said by the wife to be significant because Mr LM did not refer to the DODT which, the husband and Mr Jess Jnr were then alleging had been in existence since 28 February 2002 and which had operated to vest ownership of units, and therefore Mr N Jess’s interest in the business, in Mr Jess Jnr only six months earlier, in June 2006.
Mr LM deposes to having attended upon Mr N Jess, Mr Jess Jnr and Mr W in the New Year, on 9 January 2007, and having made a record that
[Mr Jess Jnr] docs at CPR. Decln of Trust to [Mr Jess Jnr]. Succession planning not in place yet. Search for? [Ms E] thinks all [Mr N Jess] — no idea. 2002 — bankers — [Mr Jess Jnr] CEO. Korda [FG]. [Mr N Jess]/AC to provide. Keep o/ship etc. out of SCt?[10]
[10] Affidavit of Mr LM, sworn 20 August 2014 [16]
Later, Mr LM explains how his email of 20 December 2006 to Mr NO was incorrect:
[16] …This records what [Mr W] and [Mr N Jess] told me at the meeting that day, namely, that my understanding of the structure had not been entirely accurate, as [Mr N Jess] had signed a declaration of trust in favour of [Mr Jess Jnr] in 2002 as part of his succession planning but that this fact was not disclosed to [Ms E] …
[17] To the best of my recollection, this was the first time that I recall a discussion with [YL’s] officers about the declaration of trust. However, the effect of the declaration of trust came as no surprise to me because in the preceding months [Mr N Jess] had told me that he was transferring ownership of the business to [Mr Jess Jnr]. [Mr N Jess] told me that he was unable to give me a copy of the declaration of trust immediately. He told me he believed the original had been in his safe at [Suburb D] from which his personal papers had been removed by [Ms E]. I recall [Mr W] saying words to the effect that a copy of the declaration of trust might be at [YL’s] offices.
[18] I recall [Mr N Jess] telling me to keep the declaration of trust out of his affidavit in the Franchise Proceeding, because [Ms E] did not know about him passing ownership of [YL] to [Mr Jess Jnr]. [Mr N Jess] told me that he hoped for a reconciliation with [Ms E] and that his passing of the ownership of YL to [Mr Jess Jnr] would complicate that possibility. [Mr N Jess] said that he believed [Ms E’s] Family Court proceeding was a tactical bluff only to avoid her franchises having to pay their debts to [YL].
[19] On 10 January 2007, I sent by email a further re-draft of [Mr N Jess’] affidavit to [Mr NO], with my suggested amendments in red print. I noted in the email that I still needed to confirm my instructions regarding the ownership of [YL] and the extent to which [Mr N Jess] wished it to be disclosed in his affidavit, given that [Mr N Jess] and [Mr W] had only a day earlier mentioned the declaration of trust in favour of [Mr Jess Jnr]. I had not yet seen a copy of the declaration of trust. At paragraph 21 of the further re-draft of [Mr N Jess’] affidavit, in accordance with [Mr N Jess’]instructions the previous day, I set out (in red print) the legal (as opposed to beneficial) ownership structure of the [Y] Unit Trust …
[20] On 11 January 2007, I sent a copy of the latest draft of [Mr N Jess’] affidavit to [Mr OP] for the specific purpose of confirming that nothing in it would impact on his case in the Family Court. I was instructed to do this by [Mr W].
Mr Mitchell, solicitor
Mr Mitchell is a partner of HWL Ebsworth Lawyers, and the solicitors for the represented third parties. He deposes to the production by Mr FG of 11 folders documents and the sequential numbering of all those documents by his firm.
Priya Wakhlu is an employee solicitor of HWL Ebsworth Lawyer.
With the exception of Page 1112, Mr Mitchell has no personal knowledge of the documents which are the subject of this ruling. He drew his own affidavit in which he deposed to various processes to do with the documents.
Relevantly, Mr Mitchell deposes as follows:
Folder 9 (item2) – Privilege of Mr Jess Jnr alone
[33] Based on my review of Folder 9 I can say that this folder also contains documents which:
(a) relate to the proceeding in the Supreme Court of Victoria (Proceeding No. 7412 of 2007) that was commenced by Mr Jess Jnr against Ms E Jess, Robert Jess and Y (Supreme Court Trust Proceeding) seeking a declaration that he was the beneficial owner of the units in the Y Unit Trust; and
(b) relate to the proceeding in the Supreme Court of Victoria (Proceeding No. 10347 or 2006) that was commenced by T Pty Ltd and L Pty Ltd against Robert Jess and the Y (Supreme Court Franchise Proceeding).
[34] Peter Rashleigh of DLA Piper was retained to act for Mr Jess Jnr in the Supreme Trust Court Proceeding.
[35] LM of MN Lawyers was retained to act for Y in the Supreme Court Franchise Proceeding.
[36] Pages 1013, 1017–1021, 1106–1108, 1111–1113, 1125–1130, 1132, 1134, 1141, 1187–1193, 1195–1197, 1199–1201, 1204 and 1217 in Folder 9 are confidential communications and confidential documents which:
(a) relate to one or both of the Supreme Court Trust Proceeding and Supreme Court Franchise Proceeding;
(b) were not made in the course of the Joint Retainer; and
(c) for the reasons set out below, are subject to a claim for legal professional privilege and litigation privilege.
(i) Pages 1013, 1017 to 1021, 118 to 1193, 1201 and 1217 record confidential communications between Mr Jess Jnr and Mr FG in relation to personal legal advice sought by Mr Jess Jnr separate to the Joint Retainer.
(ii) Pages 1104, 1106 to 1108, 1113, 1125, 1132, 1134 and 1204 record confidential communications between Mr FG and Mr Jess Jnr relating to the Supreme Court Trust Proceeding.
(iii) Pages 1111 and 1176 to 1177 records confidential communications between Mr FG and LM of MN Lawyers for the purpose of LM providing advice.
(iv) Page 1112 records confidential communication between myself and Mr FG at a time when I was retained by various entities, including the Y, to give them strategic advice.
(v) Pages 1126 to 1130, 1195 to 1197 and 1199 to 1200 record confidential communications between Mr FG, Mr Jess Jnr, Peter Rashleigh and LM relating to the Supreme Court Trust Proceeding.
(vi) Page 1141 records confidential communication between Peter Rashleigh and Mr FG relating to the Supreme Court Trust Proceeding.
[37] In respect of these documents, I am informed by Mr Jess Jnr and believe that both he and Y:
(a) have not waived the privilege which attached to these confidential communications and confidential documents;
(b) maintain the privilege in relation to these confidential communication and confidential documents which have been produced by Mr FG in response to the Subpoena; and
(c) object to Robert Jess his legal representatives and agents and Ms E Jess and her legal representatives and agents from being allowed to inspect any of these documents.
The pages referred to by Mr Mitchell were collated and numbered by his office. For ease of reference, I will refer to contentious documents as “the Pages” and to individual documents by the number they bear.
I will return to Mr Mitchell’s evidence.
Other privilege
On 11 March 2015 I made certain orders facilitating the release of other documents to Mr N Jess but restricting any inspection by the wife of any document produced by Mr FG.
On 20 April 2015, Mr N Jess swore an affidavit that does not appear to have ever been filed with the court but is in the possession of all parties.[11] Mr N Jess deposed to the time for which he was a director of various companies, being the 5th, 6th, 8th, 9th, 10th, 12th to 22nd and the 24th to 28th respondents. He deposed at [24] to his belief that he is “entitled to inspect every document related to advising any of the above companies while I was a director”. He deposed to having signed authorities to Mr Jess Jnr to discuss his taxation affairs with the ATO. Both authorities are directed to the ATO. The authority dated 11 March 2009 is to authorise Mr Jess Jnr to discuss Mr N Jess’s taxation affairs both as trustee of the trust created by the Declaration of Trust and personally. The authority dated 22 May 2009 clarifies that a previous notice of appointment of legal practitioner given by Mr N Jess in favour of Mr FG and his earlier authorisation to Mr Jess Jnr to discuss Mr N Jess’s taxation affairs extends to any assertions or enquiries of the ATO about offshore funds.
[11] Counsel for Mr N Jess was given leave to file the affidavit subject to the Mr Jess Jnr respondents having a right to respond. It was not filed or responded to.
On 21 and 22 April 2015 there was a hearing on the objections of Mr Jess Jnr and the represented third parties to the release and inspection of the documents produced by Mr FG. Submissions were made by Mr J. Mereine, counsel for Mr Jess Jnr and the represented third parties and Mr McCormack, counsel for Mr N Jess. The submissions related to various aspects of legal professional privilege including joint privilege and common interest privilege. The hearing as conducted without the presence of the wife and her lawyers. I closed the court and embargoed the transcript to all but the husband and Mr Jess Jnr and the represented third court parties.
These reasons do not relate to the legal professional privilege issue claimed by the represented third parties.
Proof and Findings of Fact
Section 140 of the Evidence Act 1995 (Cth) provides the relevant test for the Court’s assessment of evidence in this matter: the facts in issue are to be proved by the party with the persuasive onus on the balance of probabilities.
This is an interlocutory application relating to evidence. A statement of fact is not necessarily a finding of fact.
Evidence
I have already set out the evidence of Richard Mereine, solicitor, and the general evidence of LM.
The wife elected not to cross examine Mr Jess Jnr, Mr Mitchell or Mr LM in this hearing.
Initially Mr Jess Jnr was to be made available for cross examination. More recently his Senior Counsel submitted that Mr Jess Jnr should not be subjected to cross examination in an interim proceeding because to allow cross examination would not conform with Rule 5.10(2) of the Family Law Rules (2004). Ultimately, the wife elected to proceed without requiring Mr Jess Jnr or LM for cross examination. In relation to Mr Jess Jnr, the wife seeks to avoid a finding by me that is adverse to Mr Jess Jnr and which may entitle the represented third parties to move persuasively for me to recuse myself after so many days of hearing.
Mr Jess Jnr
Affidavit evidence by Mr Jess Jnr was not filed until after Mr Mitchell’s affidavit and the wife had obtained leave to make submissions in relation to legal professional privilege.
On 21 March 2016 Mr Jess Jnr swore an affidavit in support of his privilege claim over the Pages. That affidavit was filed on 21 March 2016 [291]. On 10 August 2016, there was a hearing on the admissibility of affidavit evidence and parts of Mr Jess Jnr’s affidavit sworn 21 March 2016 were struck out.
On 18 August 2016 Mr Jess Jnr swore a replacement affidavit which was filed on 22 August 2016 [317]. The revised wording appears as tracked changes. Red strike through indicates what was struck out. Blue underscore represents what has been added to the original text. I will refer to Mr Jess Jnr’s affidavit sworn on 18 August 2016 as the “revised affidavit”.
Under the heading “Background” Mr Jess Jnr deposed that on 19 January 2009 he received notification from the Australian Taxation Office (“ATO”) via his tax accountant that his entitlement under the deed of declaration of trust dated 28 February 2002 was a capital gains taxation event “E5” and “this would give rise to a capital gain to me”[6]. He contacted Mr FG on 19 January 2009, arranged for documents to be sent to Mr FG “so that he could provide me with legal advice concerning my potential tax liability”. Mr Jess Jnr met with Mr FG on 28 January 2009 [7, 8]. On 4 February 2009 he signed a notice of appointment in favour of Mr FG authorising Mr FG to act on his (Mr Jess Jnr’s) behalf “specifically, but possibly not limited to, the ATO’s views in relation to the CGT consequences arising out of the change in the ordinary unitholding in the Y Unit Trust”[9].
Mr FG deposes, at [4] in his affidavit affirmed on 5 April 2016 that in February 2009 he was engaged to act for both Mr N Jess and Mr Jess Jnr. At “JY-1” to Mr FG’s affidavit he annexes the notice of appointment dated 4 February 2009 referred to by Mr Jess Jnr as well as a notice of appointment, in the same terms, executed by Robert Jess and also dated 4 February. Mr FG further deposes that he sent both notices of appointment to the ATO by facsimile on 4 February 2009.
At [10] to [15] inclusive, Mr Jess Jnr deposed as follows (the relevant time being February 2009):
[10] By this time I had already retained Peter Rashleigh of DLA Piper to act for me in the proceeding which I commenced in the Supreme Court of Victoria (Proceeding No. 7412 of 2007) against Ms E Jess, Robert Jess and Mr N Jess Pty Ltd in relation to the Deed of Declaration of Trust for a declaration that I was the beneficial owner of the units in the Y Unit Trust (Supreme Court Trust Proceeding).
[11] My claim in the Supreme Court Trust Proceeding was essentially against Ms E Jess. Robert Jess and Mr N Jess Pty Ltd were only made defendants to the proceeding to ensure that they were bound by the outcome of the proceeding. LM, a partner at MN Lawyers, acted for Robert Jess and Mr N Jess Pty Ltd in the Supreme Court Trust Proceeding.
However he did not have a significant role in the proceeding because Robert Jess and Mr N Jess Pty Ltd were nominal defendants.The trial of this proceeding was scheduled to commence on 22 April 2009. However, on 22 April 2009 the trial was postponed and subsequently rescheduled to commence on 21 September 2009.[12] LM also acted for Y Pty Ltd in the proceeding which T Pty Ltd, L Pty Ltd, Ms E Jess, Ms KL and Glen Ryan had commenced in the Supreme Court of Victoria on 12 December 2006 (Franchise Proceeding). Although that proceeding had completed in mid-2008, T Pty Ltd, L Pty Ltd, Ms E Jess, Ms KL and Glen Ryan failed to pay the judgment debt owed to Y Pty Ltd. Between mid-2008 and 20 September 2009 LM was responsible for enforcing that judgment debt on behalf of Y Pty Ltd.
[13] In 2009 LM also advised Y Pty Ltd on legal issues that arose from time to time, including in relation to the Supreme Court Trust Proceeding and proceeding MLF 3444/2006 commenced on 18 December 2006 by Ms E Jess in this Court (Family Court Proceeding). On 27 July 2007 Ms E Jess had applied to join Y Pty Ltd to the Family Court Proceeding. On 30 January 2008 that application was refused by Justice Brown. Further, I was concerned that the CGT consequences arising out of the change in the ordinary unitholding in the Y Unit Trust may have had the potential to affect the operations of Y Pty Ltd. Accordingly, on behalf of Y Pty Ltd, I instructed LM
was also requiredto provide legal advice to Y Pty Ltd in relation to this issue.[14] On 19 August 2009 a mediation in relation to the Family Court Proceeding, the Supreme Court Trust Proceeding and the Franchise Proceeding (insofar as T Pty Ltd, L Pty Ltd, Ms E Jess, Ms KL and Glen Ryan had failed to pay the judgment debt) (Mediation) took place. I instructed LM to attend
edthe Mediation on behalf of Y Pty Ltd, which he did. Richard Mereine, who was a partner of Clayton Utz at the time, attended the Mediation on behalf of me and the Y Unit Trust. Now produced and shown to be marked “RBJ-3” is a copy of a list of attendees at the Mediation.
The mediation to which Mr Jess Jnr refers was a mediation which preceded the overall settlement achieved in late September 2009. Peter Rashleigh of DLA Piper, solicitors, was representing Mr Jess Jnr in the Supreme Court trust proceeding but was not available for the mediation. On 12 August 2009, Mr Jess Jnr asked Richard Mereine, then at Clayton Utz, to represent him (Mr Jess Jnr) at the mediation on 19 August 2009 and he did so.
On 26 August 2016 Mr LM swore a further affidavit which was filed on 29 August 2016 [318] for the purpose of commenting on Mr Jess Jnr’s revised affidavit. At [7] Mr LM deposed:
[7] In relation to the Supreme Court Trust Proceeding, MN Lawyers was retained to act for Robert Jess and Y Pty Ltd, which was subsequently replaced by Mr N Jess Pty Ltd. At all times during that proceeding I considered that the interests of Robert Jess and Y Pty Ltd (and later Mr N Jess Pty Ltd) were wholly aligned with Mr Jess Jnr. Accordingly:
(a) I considered that, in representing Robert Jess and Y Pty Ltd (and later Mr N Jess Pty Ltd), my role was to support Mr Jess Jnr in his claim against Ms E Jess;
(b) I did not consider it necessary to brief separate Counsel to act on behalf of Robert Jess and Y Pty Ltd (and later Mr N Jess Pty Ltd); and
(c) I communicated with Counsel briefed on behalf of Mr Jess Jnr to assist in the prosecution of Mr Jess Jnr’s case against Ms E Jess.
LM agreed with paragraphs 11 to 15 and 19 of Mr Jess Jnr’s revised affidavit [6(a)].
Mr FG
Mr FG affirmed an affidavit on 5 April 2016 which was drawn by Richard Mereine and filed in support of Mr Jess Jnr’s claim of legal professional privilege. Mr FG is also listed as a witness for the wife in the substantive part of this proceeding. He gave oral evidence and was cross examined with due limitation in relation to leading questions.[12] Counsel for the wife could not ask leading questions in relation to the issue of whether the DODT was created on the date is bears and that counsel for Mr Jess Jnr could not ask leading questions about the legal professional privilege issue.
[12] Mr FG gave evidence on 7 September, 2 November and 3November 2016.
I will discuss Mr FG’s specific evidence in relation to the Pages below. However, I will deal here with his general evidence and my impression of him in the witness box.
Mr Waller QC, for Mr Jess Jnr, submitted that Mr FG is a witness whose evidence I should place significant weight. To the extent that Mr FG’s evidence is not consistent with Mr Jess Jnr’s evidence or Richard Mereine’s evidence or his own evidence, he submits that Mr FG demonstrates independence of thought which lends weight to his evidence as a whole.
Mr FG deposed [4] that in February 2009 he “was engaged to act for both [Mr N Jess] and [Mr Jess Jnr] in relation to capital gains tax consequences arising from the [DODT]”. He described his role as follows:-
[7] The change in ordinary units in the Y Unit Trust potentially had capital gains tax consequences for both Mr Jess Jnr and Robert Jess. In relation to Mr Jess Jnr, it was contended by Peter Barrett of the ATO that as Mr Jess Jnr had become absolutely entitled to the units, capital gains tax event E5 had been triggered and this gave rise to a capital gain to him (exhibit “RBJ-1” to the RBJ Affidavit).
[8] After notices of assessment were issued by the ATO to Robert Jess in late February 2009 and March 2009, I considered that my primary role was to deal with those notices on behalf of Robert Jess. However, I also continued to act for Mr Jess Jnr as the issues potentially affected his tax liability. The ATO had not withdrawn the threat to pursue Mr Jess Jnr for capital gains tax and could have potentially issued him with a notice of assessment.
[9] During my appointment there were occasions when I dealt with discrete issues that only concerned Mr Jess Jnr. One of those issues concerned his own potential tax liability. Another issue concerned the proceeding that Mr Jess Jnr had commenced in the Supreme Court of Victoria against Ms E Jess in relation to the Deed of Declaration of Trust dated 28 February 2002 (Supreme Court Trust Proceeding). Accordingly, at various times during my appointment as his solicitor, I was required to communicate with”
(a) Mr Jess Jnr in relation to his potential tax liability and the Supreme Court Trust Proceeding;
(b) Peter Rashleigh, who I understood was acting for Mr Jess Jnr in the Supreme Court Trust Proceeding;
(c) Richard Mereine, who I understood was acting for Mr Jess Jnr; and
(d) LM, who I understood was acting for Y Pty Ltd.
In oral evidence, Mr Young was less certain about being able to say for whom he acted.
On 7 September 2016, Mr Dickson QC asked Mr FG whether he could discern for whom he was acting, albeit in a transaction which was prior to the time frame within which the Pages were created. Nonetheless, Mr FG’s responses are of interest[13]:
[13] Transcript-in-Confidence, Page 402, line 13 to Page 403, line 38.
The contents of this folder relates to advice given to Y in the period ’05 to ’06 in respect of a loan agreement between Robert Jess and Y –
…
MR DICKSON: Is that all that the file contains? Is that an accurate description of ‑ ‑ ‑?‑‑‑Well, I would have to have a look at the file. I ‑ ‑ ‑
Please do?‑‑‑Yes. I believe that’s an accurate description.
All right. And the descriptor on the outside of the file refers to estate planning?‑‑‑Sorry?
Your document ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ that is the cover sheet of the file refers to estate planning?‑‑‑Yes.
Why?‑‑‑Well, there were aspects of that file which touched on tax planning issues.
Tax planning is different?‑‑‑Sorry, estate planning issues.
Mr Mitchell goes on at paragraph 20 to assert that the corporation, Y, has my privilege, maintains privilege, and so on. Did you regard yourself when conducting that file as acting for the corporation of Mr Robert Jess or for anyone else? Who was your client?‑‑‑Well, at that particular time it was a combination of all those. There was – I don’t believe that I turned my mind specifically to who I would be acting for there.
Okay. Obviously, insofar as it dealt with a loan agreement, one part of the loan agreement was to be Robert Jess and the other party of the loan agreement the corporation?‑‑‑Correct.
All right. So the two opposing parties, if you like, to be two sides of the transaction; is that right?‑‑‑Yes.
But you can’t tell us for which side of that transaction you were acting?‑‑‑At that point I would have regarded myself as acting for both on the basis that they were probably no different from a number of circumstances I come across where a private company wants to enter in to a loan agreement with its only shareholder, or a major shareholder. I must say that I take the view that I can act in those cases for both the shareholder and the company when, in fact, the direction – the instructions are coming from the person who may be the borrower as well as the lending company, in effect.
Because as far as you were concerned, Mr Young, when did this file start? Does it show on ‑ ‑ ‑?‑‑‑2005 by the look of it.
And concluded when? When did it finish? What’s the last entry on the file?‑‑‑January 2006.
And so you were untroubled and, indeed, comfortable with acting for both sides of the transaction because you saw them as the same party?‑‑‑Yes.
Yes. So estate planning – well, on one view, a mixed concept to that of a loan agreement you thought because it was all to do with Bob it could all be on the one file?‑‑‑Yes.
Having looked at the file are you able to answer the earlier question I asked you, whether the accounts have been produced for folders 1 to 8?‑‑‑You’re talking about my accounts, are you?
Yes.
HER HONOUR: Your invoices?‑‑‑My invoices?
MR DICKSON: Your invoices. Yes. Your bills?‑‑‑I wasn’t sure by previous question whether you meant the accounts of the companies and that that ‑ ‑ ‑
No. Sorry. I apologise. No. I apologise. No. I meant your – the invoices rendered by your firm for the work done?‑‑‑No. They don’t appear to be.
And you can’t recall who was billed for this file?‑‑‑No.
Thank you. So it does become a bit blurry, doesn’t it, Mr Young, in terms of discerning exactly who you’re acting for from various – from time to time, isn’t it?‑‑‑Yes. In hindsight it does.
Thank you. …
…
On 2 November 2016, Mr Dickson QC asked Mr FG generally whom he regarded as a client including the following interchange:[14]
[14] Transcript-in-Confidence, Page 518, line 12 to Page 519, line 37.
MR DICKSON: Mr Young, was there a time, during either 2009 or 2010 – and I’m talking generally, not specifically about any particular communication at the moment. Was there a time during 2009 or 2010 when Mr N Jess was – you regarded Mr N Jess as your client?‑‑‑Not in my own mind.
HER HONOUR: Sorry?
MR DICKSON: Not in my own ‑ ‑ ‑
THE WITNESS: Not in my own mind. Well, he might – yes, there were. Yes, in ‑ ‑ ‑
MR DICKSON: What just changed then, Mr Young?‑‑‑What period – what period are we talking?
2009 and 2010, the whole of those two years. Sorry, I will keep it to the first half of 2010 at the moment. So between 1 January ’09 and 30 June 2010, did you regard Mr N Jess as being your client, at any time during that period?‑‑‑I would have to refer to my notes or some ‑ ‑ ‑
You would have to refer to your notes to answer that question?‑‑‑Yes.
HER HONOUR: Is “your client” the same as “a client”?
MR DICKSON: Yes, a client. Was he a client of yours?
HER HONOUR: Does it help you if the question is did you regard Mr N Jess as a client between 1 January 2009 and 31 December 2010.
MR DICKSON: No, it’s 30 June 2010, we will make it, your Honour, 30 June.
HER HONOUR: Thirty?‑‑‑I can’t remember the timeframe in terms of – there was a stage in a totally unrelated matter which I regarded Mr Mr N Jess as my client. But I don’t know whether that was ‑ ‑ ‑
At a time?‑‑‑ ‑ ‑ ‑ in that timeframe or not.
MR DICKSON: Okay. So but in relation to this unit holding file, the unit holding issue, the tax assessment that issue to him, did you regard him, Mr N Jess, as being a client of yours between 1 January ’09 and 30 June 2010?‑‑‑I must say, I never really turned my mind to who was the ultimate client because, to me, they were one in the same.
All right. You see, as soon as there was any disquiet between the two of them – and this is in June of 2010, Mr Young – all of a sudden, you were focussed on that, weren’t you? Who is my client?‑‑‑Yes. I didn’t have to be all that concerned up until then.
No. Because they were on the same side, as far as you were concerned?‑‑‑Yes.
Had a common interest in ‑ ‑ ‑?‑‑‑The tax dispute.
‑ ‑ ‑ minimising the tax bill. And you understand that to be because Rodney was going to pay the tax bill?‑‑‑I didn’t know where the funding was going to come from.
Well, hang on, Mr Young. It was one of the things you had a meeting about, wasn’t it, in February of 2009, wasn’t it?‑‑‑Who was that meeting with?
That’s the meeting – that’s the other meeting that you can’t find the file note for, the 18 February 2009 meeting with Mr Bradica and Mr Rashleigh and Rodney?‑‑‑Yes.
Is that right?‑‑‑That would have been discussed there.
Yes?‑‑‑But I don’t know whether there was any decision made as to who would be actually funding it.
Bob wasn’t going to be paying it, was he?‑‑‑Well, I didn’t know. I don’t know.
Well, what was the purpose, as you understood it, Mr Young, of convening a meeting to talk about the corporations capacity to fund a tax bill?‑‑‑Well, certainly, that was the – at that stage, it looked like that the entity, the unit trust or whatever the corporate entity was operating the business at that stage, might have to come up with the money but whether then it sought to be compensated by Bob was a separate issue that ‑ ‑ ‑
My impression is that Mr FG was accurate when he said, ultimately, that he was and is not sure for whom he was acting at various times. However, I am not favourably impressed by his initial statement that he did not regard Mr N Jess as his client during 2009 or 2010. Clearly Mr N Jess was a client. Mr FG appeared to be anticipating the issue whether the Pages were created for the dominant purpose of providing legal advice to Mr Jess Jnr rather than trying to provide an accurate answer.
Mr Dickson QC then referred Mr FG to his email dated Friday 25 June 2010 addressed to Mr N Jess and Mr Jess Jnr and which for ease of reference I will extract below, in greater detail than was mentioned by Mr Dickson QC:[15]
I refer to my telephone discussion with Rod earlier today and understand that it has now been accepted that, consistent with the whole basis of the arguments you both put forward during the Family Court and Supreme Court proceedings, the Declaration of Trust was properly executed on 28 February 2002. That being the case, I can continue to act.
…
As Bob has withdrawn his Power of Attorney in Rod’s favour and as he is the relevant taxpayer, I can only proceed in sending something off to Colleen [at the ATO] with Bob’s approval which I would need in writing such as a simple reply to this email. I understand both of you may be catching up tomorrow to discuss it. Whatever the instructions are, they really need to come from Bob’s computer or by a fax from Bob to me. My fax number is below.
…
[15] Exhibit “W46”, Tab 36, Page 1014.
Then Mr Dickson QC proceeded:
MR DICKSON: It was when their interests for a few days parted ways that you became concerned?‑‑‑Yes.
Yes. And with the benefit of hindsight now, Mr Young, do you accept that there was a distinction to be drawn between when you were acting for Bob, instructed by Rodney, and when you were acting for Rodney, instructed by Rodney? Leaving aside whether their interests are aligned and the outcome, do you accept that there’s a distinction to be drawn?‑‑‑Yes.
All right. Accepting that distinction as now being appropriate, I will re-ask the question I asked you a few minutes ago. Were there times between 1 January ’09 and 30 June 2010 when you were acting – when Mr N Jess was a client?‑‑‑Yes.
And now being aware of that distinction ‑ ‑ ‑
HER HONOUR: Now acknowledging the distinction.
MR DICKSON: Now acknowledging the distinction, let’s go back to paragraph 9 of your affidavit, shall we. So when you say, before the A, Bs and Cs there:
Accordingly, at various times during my appointment as his solicitor –
are you talking – the “his” is Rodney’s. And having a look through those subparagraphs that follow, do you maintain that you were wearing your hat as Rodney’s solicitor or now, on reflection, do you accept that you were acting as Bob’s solicitor but instructed by Rodney in relation to those various communications that you’re talking about?‑‑‑Well, there’s another layer to all of this in that, to a considerable extent, I regarded Rodney as being acting in his capacity as a director and the controller of what I would call “the group.” So there was a – there was the possibility that Rodney would get a tax assessment which would have been a personal liability. There was, as you point out, that meeting down in South Melbourne, the notes for which I cannot find.
Port Melbourne?‑‑‑Port Melbourne, sorry, Port Melbourne, where the focus was on the funding which was an issue, either for Rodney, Bob or the unit trust or the corporate entity running the business then. So it was all blended into one.
Right[16]
[16] Transcript-in-Confidence, Page 520, line 1–38.
I do not regard Mr FG’s response to Mr Dickson QC’s straightforward question “do you accept that you were acting as Bob’s solicitor but instructed by Rodney …” to have been directly responsive. My impression of Mr FG in the witness box is that, fundamentally, he was very happy to be on board as solicitor for either Rodney or Mr N Jess and he did not employ much clarity of thought or professional discipline at the time or when he gave evidence in the witness box. Furthermore, I obtained the impression that he had an overall disinclination to say that he acted for Mr N Jess if the implication could be drawn that he was not also acting for Mr Jess Jnr. Put another way, I observed him to be eager to be inclusive of Mr Jess Jnr as a client whilst tending to minimise the services he was obviously providing Mr N Jess.
Then at a little later, there was a long interchange in which Mr FG stated that he acted “in a blended capacity” for Mr N Jess and YL and concluded by stating that “it’s for others” to determine for whom he was acting:[17]
[17] Transcript-in-Confidence, Page 521, line 27 to Page 523, line 21.
MR DICKSON: Are you able to say, Mr Young, which hat you are wearing in relation to the communications with – or we will start with Rodney and his – in relation to his potential tax liability. That would have been – you would have been wearing your hat as Rodney’s solicitor there, wouldn’t you?‑‑‑Yes.
You wouldn’t talk to – if you were being Bob’s solicitor, you wouldn’t be talking to Rodney about his tax bill, would you, or potential tax bill?‑‑‑Sorry, would you repeat that?
If you were wearing your hat as Bob’s solicitor ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ but instructed by Rodney, you would have no cause to speak to Rodney about Rodney’s own potential tax bill, would you?‑‑‑No cause but I might – having been alerted by the ATO that they were going to issue an assessment to – or they were thinking about issuing an assessment to Rodney ‑ ‑ ‑
Yes?‑‑‑ ‑ ‑ ‑ there could have been occasions where I was communicating with Bob – with Rodney through the power of attorney for Bob but, at the same time, also mentioning to Rod in his own capacity this alternative assessment that could be issued to him.
Yes. Okay. Yes. All right. And so, for instance, I want to take the example of Mr Rashleigh, Mr Young. In February 2009 you told us the meeting took place at Port Melbourne. Mr Rashleigh was there. And the issues discussed were Bob’s tax liability and how it was to be funded. That’s right, isn’t it?‑‑‑I believe that was the case. That’s my recollection. Not having found the notes, I ‑ ‑ ‑
I want to suggest to you, you couldn’t have been wearing your hat as Rodney’s solicitor at that meeting, could you. You must have been there in your capacity as the solicitor for Mr N Jess, the taxpayer?‑‑‑Well, insofar as it related to the funding of any payment for Bob, it would impact on the group as a whole. So I was there in sort of a capacity where ‑ ‑ ‑
A blended capacity?‑‑‑Sorry?
A blended capacity, was it?‑‑‑Yes, because one of the issues that had to be discussed was whether the ATO would grant some sort of a deferment of the payment of the tax. And, of course, that was relevant in terms of how – if the ATO did not or only accepted a partial deferment, how we were going to fund what had to be paid.
“How we were going to fund”; “we”?‑‑‑Well ‑ ‑ ‑
That is, the group?‑‑‑I’m still part of the – I still throw back to the time that I was at that meeting. It was sort of a collegiate approach to the whole thing.
…
MR DICKSON: You are unable to, I want to suggest to you, draw a clear line on any particular occasion as to who you are acting for, aren’t you?‑‑‑Well, in the context of the documents I was shown on which I was requested to comment on that issue, I formed a view, on looking at them, that those – some of those, I think my – I haven’t read my affidavit for a long time, but I said in a couple of cases it was just a line ball. I couldn’t really say whether or not. In other cases I formed a view that it was for Rodney’s benefit. Now, that might be a value judgment I’ve put on it.
And I want to suggest to you, Mr Young, that your value judgment that you put on ‑ ‑ ‑
HER HONOUR: Can I just take you back. “Rodney’s benefit”, does that include with ‑ ‑ ‑?‑‑‑The group’s benefit.
‑ ‑ ‑ Mr Mr N Jess as the taxpayer whose liability is under consideration, but you’re forecasting that Rodney may either be in control of or entitled to an entity that could ultimately foot the bill for Bob’s liability?‑‑‑That’s correct, your Honour.
So you sort of jump over Bob and you get to Rodney?‑‑‑That’s correct.
MR DICKSON: So your value judgment that you applied when swearing this affidavit is overlayed with that, isn’t it?‑‑‑Yes.
That view that this was all sort of for the common good; what affected Bob was going to affect potentially the company and that was going to affect Rodney, and so we’re all one and the same?‑‑‑But I just didn’t have a cursory look at the documents. I considered them rather carefully as to – and as my affidavit shows, there were a couple of documents where I describe as a line ball, but it’s for others to determine the issue, I think.
Well, except we don’t get ‑ ‑ ‑
HER HONOUR: For whom you act?‑‑‑Beg your pardon.
For whom you act?‑‑‑Well, yes.
In so far as Mr Waller QC submitted that Mr FG was a strong witness upon whose evidence I should place considerable weight, I find that was not the case. He displayed a fogginess of thought with an inclination to give evidence which was supportive of Mr Jess Jnr over Mr N Jess.
Mr Waller QC referred me to the decision of Jessup J in Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Limited [2013] FCA 998 (“Asahi Holdings”). I will discuss the case in more detail below. In the meantime, I note the following description given by Jessup J of the lawyer’s role in a proceeding of this nature:-
When such a practitioner states that a communication in a document was made for the dominant purpose of giving or receiving legal advice, he or she expresses an objective professional conclusion based on his or her reading of the document and understanding of the context from instructions given by the client, and from his or her familiarity with the case generally (a conclusion which may, in a case in which the documents are voluminous, necessarily involve also the conclusions of other practitioners sharing the relevant workload).
It is my assessment, when the content of Pages 1127 and 1176 and 1177 is taken into account, Mr FG did not demonstrate an ability to make objective professional conclusions based, at least in part, on an understanding of the context from instructions given by the client. He did not at first instance identify Pages 1127, 1176 and 1177 as not being documents which fit the description given them by Mr Jess Jnr and Richard Mereine. Second, his inability to clarify for whom he was acting and apparent inability to appreciate that his inability to do so was a deficit, leads me to doubt the reliability of his evidence in relation to documents in respect of which he could not be tested. Finally, I have referred below, and in detail, to the instances of prevarication when he deposed that “I do not disagree” with whatever Mr Jess Jnr said. That was simply unhelpful.
I am not persuaded by Mr Waller QC’s description in closing submissions of Mr FG as “a legal practitioner who also brings to the task not just his knowledge of what, in fact, the purpose of the communication was and who his actual client was at the time”.[18]
[18] Transcript-in-Confidence, Page 726, line 24.
The Pages
I will now look at what the relevant witnesses have said about the Pages which are the subject of this dispute.
Page 1104
Mr Jess Jnr deposes at [17] that Page 1104 is dated 21 September 2009 and is a communication between Mr FG and himself relating to the Supreme Court trust proceeding. Of all the pages, Page 1104 is the latest in time. He deposes at [17] that Page 1104 records conversations between Mr FG and himself relating to the Supreme Court trust proceeding and that when he “spoke to Mr FG in relation to the matters recorded in [this page 1104], I understood that Mr FG, as my solicitor, was under an obligation not to disclose the contents of those conversations to anyone else without my consent”.
Mr Jess Jnr also deposes at [18] that in this and other communications referred to by page references, he spoke with Mr FG in relation to the conduct of the Supreme Court trust proceeding
primarily to seek his legal advice about my potential tax liability arising from the [DODT] and how this might impact on the conduct of that legal proceeding. At the time I sought the legal advice of Mr FG to enable me to instruct Peter Rashleigh and obtain legal advice from Peter Rashleigh in relation to the conduct of the Supreme Court Trust proceeding which also concerned the [DODT].
Mr FG, in his affidavit at [11] agrees with Mr Jess Jnr’s evidence in relation to Page 1104.
From early on in this evidentiary dispute, about legal professional privilege Mr Dickson QC has been critical of the description used by Mr Mitchell, and later Mr Jess Jnr, of documents being documents “relating to the Supreme Court proceedings”. In the wife’s initial written submissions of 11 March 2016 [“W30”] the phrase was criticised for being non-descriptive and unhelpful. Mr Jess Jnr’s case has been responsive to several criticisms and rulings in relation to evidence, as the revised affidavit of Mr Jess Jnr attests. However, they have not addressed the criticism of documents “relating to the Supreme Court proceedings” as being a generic term which is too general to sustain a claim for legal professional privilege which attaches solely to one party to the exclusion of another party, here Mr N Jess, who retained the same lawyer and was a party to the same proceedings.
The evidence supports the following propositions:
(a) Mr FG was appointed to deal with the ATO on behalf of Mr N Jess and Mr Jess Jnr;
(b) Mr N Jess authorised Mr Jess Jnr to instruct Mr FG on his (Mr N Jess’s) behalf and to deal with the ATO on his (Mr N Jess’s) behalf;
(c) Mr FG is a taxation lawyer;
(d) Peter Rashleigh of DLA Piper acted for Mr Jess Jnr in the Supreme Court Trust proceedings;
(e) LM of MN Lawyers acted for Mr N Jess (and YL) in the Supreme Court Trust Proceedings.
The wife submitted [W30, paragraph 11] “The description of this category of documents was “relating to the Supreme Court proceedings” is hardly descriptive. The subject matter of the Supreme Court proceedings and this part of the current proceedings is the validity of and questions surrounding the DODT. To say that some communication “relates to the Supreme Court proceedings” simply means the communication refers to the issue of the DODT and, absent some further descriptor, means no more than that. If it did not refer to the deed at all, the objection no doubt would be one of relevance”.
I accept the wife’s submission. The description of communications, instructions or advice as “relating to the Supreme Court proceedings” does not identify the communications with sufficient particularity to sustain a claim for legal professional privilege. There is no delineation in either Mr Jess Jnr’s evidence or the evidence of Mr FG which demonstrates that Page 1104 or the other pages which Mr Jess Jnr described thus (1106–8, 1113, 1125, 1132) was created for the dominant purpose of providing legal advice to Mr Jess Jnr as opposed to Mr N Jess for whom, it is clear, Mr FG was also acting and who was also a party to the proceedings in the Supreme Court. In the circumstances of this case, the description would suffice as between Mr Jess Jnr and the wife or in the context of a claim for joint privilege but it does not properly identify the basis on which privilege is sustainable by Mr Jess Jnr vis-à-vis Mr N Jess.
In the circumstances of this case, I do not consider that the wife bore an, or any significant, evidential onus, as described by Le Miere J in Coal Hubs Pty Ltd v NSL Consolidated Ltd (supra) at [17], to demonstrate that the communication to which Page 1104 relates was made for a dominant purpose other than providing legal services to Mr Jess Jnr to the exclusion of Mr N Jess. That is because the description provided by those who have access to the document, Mr Jess Jnr and Mr FG, is simply too general to sustain the immunity which Mr Jess Jnr asserts against Mr N Jess given that the interests which each of them had in both the taxation matter and the proceedings about the validity of the DODT.
Mr Jess Jnr has not provided sufficient information in relation to Page 1104 upon which I can be satisfied that the claim for legal professional privilege can be made for him alone and to the exclusion of Mr N Jess.
Pages 1106–1107, 1113, 1132, 1134, 1141 and 1204
Mr Jess Jnr deposes at [17] that Pages 1106 and 1107 are dated 15 September 2009 and record conversations between Mr FG and himself relating to the Supreme Court trust proceeding. He deposes that when he
spoke to Mr FG in relation to the matters recorded in [these pages 1106 and 1107], I understood that Mr FG, as my solicitor, was under an obligation not to disclose the contents of those conversations to anyone else without my consent.
Mr Jess Jnr also deposes at [18] that in this and other communications referred to by page reference, he spoke with Mr FG in relation to the conduct of the Supreme Court trust proceeding
primarily to seek his legal advice about my potential tax liability arising from the [DODT] and how this might impact on the conduct of that legal proceeding. At the time I sought the legal advice of Mr FG to enable me to instruct Peter Rashleigh and obtain legal advice from Peter Rashleigh in relation to the conduct of the Supreme Court Trust proceeding which also concerned the [DODT].
Mr FG, in his affidavit at [11] agrees with Mr Jess Jnr’s evidence in relation to Pages 1106 to 1107.
I make the same finding in relation to Pages 1106 and 1107 as I made in relation to Page 1104, that is Mr Jess Jnr has not provided sufficient information upon which I can be satisfied, in all the circumstances of this case, that a claim for legal professional privilege can be made for Mr Jess Jnr alone to the exclusion of Mr N Jess. I make the same finding in relation to Pages 1113 (dated 11 August 2009) and1132 (dated 17 April 2009) and Page 1134 (dated 15 April 2009) and Page 1141 (dated 13 March 2009) and 1204 (dated 2 February 2009).
Page 1108
Mr Jess Jnr deposes at [29] that this page is dated 14 September 2009 and records a conversation between Mr FG and Peter Rashleigh which took place primarily so that Peter Rashleigh could provide Mr Jess Jnr with legal advice in relation to the Supreme Court trust proceeding. He also deposes at [30]:
At the time of these conversations, I understood that Mr FG and Peter Rashleigh was each under an obligation, as my respective solicitors, not to disclose the content of this communication to anyone except me without my consent.
I refer to and restate here my finding that Mr Jess Jnr has not provided sufficient information to sustain a claim for sole legal professional privilege. However, Before leaving Page 1108 I want to say something of Mr FG’s evidence.
Mr FG, in his affidavit at [14] deposed that “I do not disagree with the statements made by Mr Jess Jnr in paragraph 29 of the RBJ Affidavit. Mr Jess Jnr was my client. I was aware that Peter Rashleigh was acting for Mr Jess Jnr in the Supreme Court Trust Proceedings. However, I cannot recall the context of my discussions with Peter Rashleigh.” In oral evidence, Mr FG clarified the distinction between the phrase “I agree” with his use, as here, of the phrase “I do not disagree”.
On 2 November 2016 there was the following exchange:[19]
[19] Transcript-in-Confidence, Page 539, line 31–35.
What’s the distinction between “I agree” and “I don’t disagree”?‑‑‑
MR YOUNG: Well, I had always thought that if somebody disagrees, then they’re confident in what they’re saying. Whereas, if they don’t agree – “I do not disagree” – they’re sort of ambivalent. They don’t know either way.
And then later:[20]
[20] Transcript-in-Confidence, Page 541, line 42.
MR YOUNG: “Do not disagree” is pretty close to agree but ‑ ‑ ‑
HER HONOUR: How much closer is it to agree than disagree?‑‑‑
MR YOUNG That’s how I’ve sort of, in other contexts, used the ‑ ‑ ‑
HER HONOUR: That’s what I’m asking you?‑‑‑
MR YOUNG That’s how I – that’s how I have, in the past, tried to express some – not in this context but, quite often, I might use that phrase to soften the blow with somebody. Rather than say I disagree or to say I agree, I say, “Well, I don’t disagree with you, so it’s sort of ‑ ‑ ‑
HER HONOUR: Yes. So my question to you ‑ ‑ ‑?‑‑‑
MR YOUNG: It’s sort of ‑ ‑ ‑
HER HONOUR: ‑ ‑ ‑ is – you’ve already said that, in your mind, “I do not disagree” is closer to agreeing than it is to disagreeing and I would ask you why?‑‑‑
MR YOUNG: Well, perception, I suppose.
HER HONOUR; Because then you went on to give evidence just then, about 20 seconds ago, which indicated that it was not closer to agree. It was softening a disagreement?‑‑‑
MR YOUNG: Well, it might be in the context in which I used the phrase.
HER HONOUR: Does it, in fact, have any precise meaning to you at all?‑‑‑
MR YOUNG: No.
HER HONOUR: Okay. Thank you.
Based on the above evidence given by Mr FG, I cannot be satisfied that he agrees with Mr Jess Jnr’s evidence. In fact, I am satisfied that he is not agreeing with Mr Jess Jnr’s evidence because, if he did agree, it would have been easy for him to say so. As it stands, Mr FG has used a phrase “I do not disagree” which, on his evidence, has no precise meaning for him.
In an evidentiary dispute such as this, where one side will necessarily not be permitted to view the document and the court has not inspected the document either, it is incumbent on a lawyer in the position of Mr FG to be meticulously accurate and meticulously fair in his evidence. In my assessment, by remaining ambivalent and trying to “soften the blow” his evidence has little or no value over and above satisfying me that he does not agree with what has been put.
Page 1111
Mr Jess Jnr deposes at [19] that Page 1111 is dated 14 August 2009 and is a communication between Mr FG, who was acting for him, and LM who was acting for YL on instructions from Mr Jess Jnr in his capacity as a director of YL. Mr Jess Jnr deposes that the primary purpose of the communications was so that LM could advise YL “whether there were any issues which affected its interests prior to the Mediation.” Rodney deposes that he understood that Mr FG and LM were each “under an obligation not to disclose the content of these communications to anyone except me without my consent.”
In his affidavit sworn 26 August 2016 [318], LM referred to paragraphs [25] to [26] of the revised affidavit and deposed [6(b)] that “I agree that I was acting for [YL] in relation to communications which are referred to therein”.
It follows from the evidence of Mr Jess Jnr and LM that, even if I were to accept that Mr FG was acting solely for Mr Jess Jnr in relation to the communications at Page 1111 (dated 14/08/2009), that Mr Jess Jnr authorised the communication of otherwise privileged communications to LM who acted not for Mr Jess Jnr but for YL. Whereas, on Mr Jess Jnr’s case, Page 1111 was a document to which legal professional privilege attached, Rodney’s authorisation to send the privileged communication it to the lawyer who was acting for YL is an act which is inconsistent with Rodney being able to maintain the confidentiality of the communication between lawyer an client that this privilege is designed to protect (Mann v Carnell (1999) 201 CLR 1 at [28]). It was not a waiver of privilege vis-à-vis the world but it was a waiver vis-à-vis YL. It is not asserted by YL or by Rodney that Mr FG was providing professional legal services to YL as contemplated by s122(5)(b) of the Evidence Act 1995 (Cth).
Finally, in his affidavit sworn 20 April 2015,[21] Mr N Jess deposes at [9] that he was a director of YL from 19 June 1994 to 12 July 2010, therefore, a director during the period in which Page 1111 (dated 14/08/2009) was created. Having regard to the fiduciary duty which both directors owed to YL and to one another as a director of YL, I cannot see how Mr Jess Jnr can assert privilege in relation to Page 1111 against Mr N Jess either at the time the communication was passed to LM or now.
[21] Exhibit “RJ….”
Page 1112
Mr Jess Jnr deposes at [24] that Page 1112 is dated 14 August 2009 and is a communication between Richard Mereine and Mr FG, on Mr Jess Jnr’s instructions, “primarily so that Richard Mereine could give Mr Jess Jnr legal advice prior to, and at, the mediation, which he did. He further deposes that “At the time of this conversation, I understood that Richard Mereine and Mr FG was each under an obligation, as my respective solicitors, not to disclose the content of this communication to anyone except me without my consent”.
Mr FG deposes at [11] that he agrees with Mr Jess Jnr’s evidence.
The mediation took place on 18 August 2009. Mr N Jess was represented by Carew Counsel and barristers retained by them. Richard Mereine stepped up because Peter Rahsleigh was not available.
Richard Mereine deposes at [36(c)(iv)] that Page 1112 “records a confidential communication between myself and Mr FG at a time when I was retained by various entities, including the Y, to give them strategic advice”. I find the extent of Mr Mitchell’s evidence about Page 1112 to be brief to the point of superficial.
The Jesss’ litigation in this court has been extensive. At one point the husband sought to enjoin Mr Mitchell for acting for the represented third parties, a matter determined by Cronin J in February 2014 and reported under the case neutral citation [2014] FamCA 92. The husband’s application failed. Cronin J’s reasons discuss the evidence give my Richard Mereine in the restraining proceedings about his role prior to, and at, the mediation, including the following (a reference to “the solicitor” is a reference to Richard Mereine):
[33] I am satisfied that, whether it was intended or not by the retainer, the solicitor was engaged to act for the husband. The fact that the husband had discrete solicitors acting for him in the family law proceedings, is not to the point.
[34] It was submitted that it was of significance that the husband did not confer with the solicitor “alone” nor was any information provided.
[35] The solicitor’s evidence was that no information was provided about the controversial deed of declaration of trust nor the ultimate deed of settlement or the subject of these proceedings. The solicitor said that no advice was given in relation to the Family Court proceeding, the trust proceeding or indeed a franchisee proceeding.
[36] Thus on the evidence in relation to the May 2008 retainer, I do not find that there was any confidence of the husband to protect.
[37] In August 2009, a mediation was apparently conducted in relation to the family law proceeding, the trust proceedings and what was described as the franchisee proceeding. The solicitor was requested by the son of the husband to attend because in respect of one of those proceedings (and not the family law proceeding), the son’s commercial lawyer was not available. The solicitor attended the mediation on 19 August 2009. A record of the attendees showed that the husband was represented by senior and junior counsel as well as his family lawyer. The same recorded document noted the solicitor acting for the son and a unit trust.
[38] The solicitor observed that prior to the mediation he had been asked to comment on a position paper prepared by the family lawyer and he did so. That document has now been admitted into evidence and was the subject of considerable focus of counsel for the husband. Counsel for the husband submitted that I should conclude that the solicitor had not only attended the family law mediation but had also provided comments on the position paper. There are clearly alterations underlined and the movement of various items within the document prepared by the family lawyer which might suggest a correction or clarification by the solicitor of some of the statements. That said, on the untested evidence, I cannot conclude, even by inference, what the reasoning was behind those changes. I do not know whether it was comment, advice, correction or just cosmetic change.
[39] In his evidence, the solicitor observed that no agreement was reached at the mediation and the solicitor had no further involvement.
Given the earlier scrutiny of Richard Mereine’s evidence in the restraining proceeding which traversed the time at which Page 1112 was created (14 August 2009), I consider that Mr Jess Jnr has provided insufficient information for the court (or the wife) for me to be confident that Richard Mereine’s telephone conversation with Mr FG (who acted for Mr N Jess) was for the dominant purpose of providing legal services to Mr Jess Jnr to the exclusion of Mr N Jess. Indeed, Richard Mereine’s evidence describes himself as acting for “various entities” rather than for Mr Jess Jnr. I accept that Mr Jess Jnr may have instructed Richard Mereine in his capacity as a director of YL but, if the telephone conversation between Mr FG and Richard Mereine was for the dominant purpose of advising Mr Jess Jnr in his personal capacity, it would have been easy for that to be stated unambiguously.
I did offer the parties alternatives to this interlocutory hearing. First, I suggested that they consider taking this evidence dispute to arbitration. Section 13E of the Act allows a court, with the consent of the parties, to make an order referring Part VIII proceedings, or any part of them, or any matter arising in them, to an arbitrator for arbitration. These proceedings fit within the definition of Part VIII proceedings as they relate to an application under s 79A. The part of the proceedings which I suggested be referred to an arbitrator for determination would have had the issue of legal professional privilege determined without my having to look at the documents. A further advantage of arbitration is that the decision could be obtained within the parties’ own time frame, including sitting on non-court days, and without incurring further delay. The disadvantage is that the parties would have been required to pay the arbitrator. Counsel for the wife indicated that the cost of arbitration was more than the wife was able to accommodate and at the same time finance the ongoing proceedings. As arbitration is preconditioned on the mutual consent of the parties, this part of the proceedings could not be referred for arbitration.
Second, I suggested that Berman J. could hear the privilege dispute. Berman J. is extensively familiar with this case, was in this Registry at the time and could have made himself available to hear the privilege issue. This would have meant a loss of court time before me whilst the matter proceeded before Berman J because we were sitting concurrently. I was informed that the parties preferred to continue with the proceedings before the trial judge.
The alternative modes of determination would have permitted the court (or arbitrator) to inspect all documents without any risk to the ongoing proceedings before me.
The alternative courses carried the added attraction of cross examination. The wife could have tested the evidence upon which Mr Jess Jnr relies by cross examination and counsel for Mr Jess Jnr could have been in a position to submit that their client’s evidence on this interlocutory dispute had been thoroughly tested and not shaken.
I am not critical of the parties for not availing themselves of either of the two alternative means of determination. I mention the alternatives merely to illustrate that some thought was applied to the process. I think it fair to say, that no-one envisaged evidence and submissions taking nine and a half days including the court regularly sitting until 5 pm and sitting into the night on at least one occasion to conclude the evidence of Mr FG.
Abandonment of claim of privilege to documents
When Richard Mereine made his affidavit on 6 March 2015, he included in Mr Jess Jnr’s exclusive claim for privilege documents described as
Pages 1013, 1017 to 1021, 1187 to 1193, 1201 and 1217 [which] record confidential communications between Mr Jess Jnr and Mr FG in relation to personal legal advice sought by Mr Jess Jnr separate to the Joint Retainer.
And he relied for the claim of exclusive privilege on the same basis as for the Pages described at [36(c)(ii) to (vi)] of his affidavit.
In April 2016 Richard Mereine wrote to Mr N Jess’s then solicitors, Goldsmith Lawyers notifying them that Mr Jess Jnr no longer maintained joint legal professional privilege in relation to the documents described at [36(c)(i)] of his affidavit. It was said that the documents were handed over to provide context.
Some of the documents have been tendered in this part of the proceedings. I have looked at pages 1013, 1017 to 1021.
Document 1013 is a file note of Mr FG dated 26 June 2010 but agreed by all parties to have been created on 25 June 2010. It records Mr Jess Jnr’s instructions that Mr N Jess agreed to proceed with a toned down version of proposed correspondence to the ATO. That appears to me to be a communication by Mr Jess Jnr in relation to the actual assessment which had issued to Mr N Jess, then standing at about $50 million, and the potential of a similar liability for himself. It does not appear to me to be a document over which Mr Jess Jnr can properly claim legal professional privilege to the exclusion of Mr N Jess. Indeed, when one looks at the draft of the toned down letter[32], it abundantly clear that Mr FG is not corresponding about Mr Jess Jnr exclusively. For instance, the penultimate paragraph of the draft letter, which is addressed to Colleen Lambert of the High Wealth Individuals Taskforce and is headed “Mr N Jess Section 99A Assessment”. The first paragraph refers to the ATOs letter of 15 June 2010 addressed to Mr N Jess care of Mr FG’s office. The penultimate paragraph of the letter starts “On behalf of Bob and Rob I ask that the next step be …”
[32] Exhibit “W46”, Tab 36, Pages 1015–1016.
Documents 1017 to 1021[33] do not give rise to any concern about privilege having been inappropriately claimed.
[33] Exhibit “W46”, Tab 35 and 34.
Mr Dickson QC, for the wife conceded that documents 1187 to 1193 are communications for which Mr Jess Jnr is the sole client. They do not foster suspicion that privilege has been inappropriately claimed.
Pages 1176 and 1177
Pages 1176 and 1177 are documents in respect of which privilege was pressed but which I allowed the wife to use after they were handed over inadvertently. The privilege claim and the content of Pages 1176 and 1177 inform my assessment of the process undertaken by and on behalf of Mr Jess Jnr for the identification of documents to which he asserts legal professional privilege attaches.
Pages 1176 and 1177 are contained in the bundle of documents produced by Mr FG pursuant to the subpoena and collated by lawyers for Mr Jess Jnr and the represented third parties. That bundle is “Exhibit 335” and comprises 1335 pages. Within Exhibit 355, only the documents which have a stickers affixed to then have been tendered and are in evidence. The sticker should specify by whom and on what date the tender occurred.
Mr Jess Jnr deposes at [20] to [21] that the pages are dated 5 March 2009 and are:
(a) communications between me, Mr FG and Peter Rashleigh, who were acting for me, LM, who on instructions given by me in my capacity as a director of Y Pty Ltd was acting for Y Pty Ltd and Anthony Bradica of Deloitte, who were and stall are the accountants for Y Pty Ltd; and
(b) a communication between Mr FG, who was acting for me, and LM, who on instructions given by me in my capacity as a director of Y Pty Ltd was acting for Y Pty Ltd.
[21] The communications on page 1176 and 1177 were made
for the dominant purposemainprimarily so thatofMr FG could giveingme legal advice in relation to my potential tax liability arising from the Deed of Declaration of Trust. A copy of some of the communications was sent to Peter Rashleigh so that he was kept informed and could advise me in the Supreme Court Trust Proceeding.and to enable Peter Rashleigh to give me legal advice in relation to the Supreme Court Trust Proceeding which also concerned the Deed of Declaration of Trust.A copy of the communications was sent to LM, who on my instructions was acting for Y Pty Ltd, so that he was kept informed of the issues and could advise Y Pty Ltd whether any of the issues affected its interests. LM responded to Mr FG for the purpose of Mr FG providing me with legal advice. A copy of the communications was sent to Anthony Bradica so that he was kept informed of the issues and could advise Y Pty Ltd whether any of the issues affected its interests. At the time of these communications, I understood that Mr FG, Peter Rashleigh, LM and Anthony Bradica was each under an obligation not to disclose the content of these communications to anyone except me without my consent.Mr FG refers to the communications at Pages 1176 and 1177 and says the following:
[13] Paragraph 21 of the RBJ Affidavit refers to communications on 5 March 2009. Page 1176 contains three communications on 5 March 2009. The last communication on that page continues on page 1177. That communication was sent to Mr Jess Jnr and a copy was sent to LM, Peter Rashleigh and Anthony Bradica. That communication concerned the position of both Robert Jess and Mr Jess Jnr. Accordingly, I cannot say whether that communication was predominantly directed to Mr Jess Jnr and his possible personal tax exposure. However, I can say that at the time I had not yet received the 11 March 2009 Authority. I otherwise agree with paragraph 21 of the RBJ Affidavit.
I have read Pages 1176 and 1177. I am unable to reconcile the contents with Mr Jess Jnr’s description of the communications being primarily to enable Mr FG to advise Mr Jess Jnr of his potential taxation liability.
Paragraphs 4, 5 and 8 on Page 1177 relate to Mr Jess Jnr’s potential liability for capital gains tax but the balance of the letter, some nine paragraphs clearly relate to Mr N Jess’s actual assessment and not directly to Mr Jess Jnr. I recognise that Mr N Jess’s taxation liability was a matter of interest to Mr Jess Jnr because it stood to be met by the Corporation which was then under Mr Jess Jnr’s control. Furthermore, that Mr Jess Jnr had a potential liability for capital gains tax “for close to just as much as your father”. Such a liability was never assessed against Mr Jess Jnr but the potential was there. but, in the circumstances of this case, I cannot agree that the communication was primarily for the purpose of advising Mr Jess Jnr.
Mr FG equivocates and says at [13] that
Accordingly, I cannot say whether that communication was predominantly directed to Mr Jess Jnr and his possible personal tax exposure. However, I can say that at the time I had not yet received the 11 March 2009 Authority. I otherwise agree with paragraph 21 of the RBJ Affidavit.
Mr FG confirmed that his evidence remained the same in response to a question by Mr Dickson QC on 7 September 2016.[34] Notably, Mr FG does not agree or disagree with Mr Jess Jnr’s description. He deposes he “cannot say” which, in the circumstances of this case, is confounding and does not engender confidence in the process. It is important to remember that, but for the inadvertence of Mr Jess Jnr’s solicitors, the contents of Pages 1176 and 1777, would not have come to light.
[34] Transcript-in-Confidence, Page 391, line 12-28.
In Asahi Holdings (supra), Jessup J stated, and I agree:
[38] In the context of a claim of legal professional privilege, what was the purpose for which a particular communication was made is a question which must be answered objectively: Commissioner of Taxation v Pratt Holdings [2005] FCA 1247 at [30]; AWB Ltd v Cole (No 5) (2006) 155 FCR 30, 44 [44]; Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 at [2]-[3]. The say-so of the maker of the communication will not be conclusive and, in the usual run of cases, will not even be necessary. Purpose is to be determined from the content of the document understood in its full context. The same approach is to be taken, in my view, where, as here, the question relates to the range of persons entitled to the privilege. In such a setting especially, it must be remembered that the question relates to the purpose of the communication rather than to the immediate thinking of the maker of the communication at the relevant time.
There was no explanation as to why Mr Young, who was the author of the communication, is unable to say to what issue the communication was predominantly or primarily directed. However, I am satisfied that Mr FG is not agreeing with Mr Jess Jnr’s description and that his evidence on this point is not corroborative of Mr Jess Jnr’s assertion that this communication was primarily directed to him and not to him and Mr N Jess or Mr N Jess alone.
Mr FG’s reference to not having received an authority to act on behalf of Mr N Jess was explored by Mr Dickson QC in the following interchange:[35]
[35] Transcript-in-Confidence, Page 548, line 27 to Page 549, line 19.
MR DICKSON: And, Mr Young, at paragraph 6 – I’m grateful to my learned friend – you define that as – and you annexe it as JY3. Can you just have a look at JY3 for me, could you? It’s a letter, a document marked the 11th of March 2009, addressed to the deputy commissioner of taxation, signed by Bob, authorising Rodney to discuss Bob’s ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ tax affairs at the meeting scheduled for Thursday, the 12th of March. Right?‑‑‑Yes.
Fairly specific authority?‑‑‑Yes.
Specifically worded to the – dated to the meeting the next day. Yes?‑‑‑Yes.
You were concerned, weren’t you, that Bob wasn’t going to be coming. It was going to be Rodney coming along with you to that meeting and you were worried that the Tax Office might say we can’t talk to Rodney, I’m sorry, unless we’ve got a certificate of authority?‑‑‑Yes.
Yes. Okay. Because you had earlier authority, hadn’t you, to act on Rodney’s instructions for Bob more generally, hadn’t you?‑‑‑I must have but I can’t remember seeing the ‑ ‑ To the extent that you were worried about it, it was all overcome by the fact that, at that stage, you thought you had – there was a power of attorney in place. Rodney was giving you the instructions clearly to deal with Bob’s tax issue?‑‑‑Yes.
Yes. All right. So why, Mr Young, in that setting, why did you see it as either necessary or appropriate that that last sentence – the second-last sentence:
However, I can say that at the time –
that time being the 5th of March 2009 which is the date of 1176 and 77 –
… I hadn’t received the 11 March 2009 authority.
MR DICKSON: Are you somehow trying to say, well, I wasn’t sure that I really had authority to act on Bob’s behalf at that stage because I hadn’t got the authority? Is that what you’re trying to suggest by that sentence?‑‑‑I think I was trying to put a gloss on the ambivalence I expressed in the previous paragraph, saying I didn’t know whether the communication was predominantly directed to Rod and his personal tax exposure by saying, well, at that stage, I had no received an authority signed by Bob for Rod to act for him. So there was a – if you like, there was a – an inference that the communication with Rodney was to Rodney.
Was there, seriously? An inference that all communications before you got that 11th of March document, all your communication with Rodney were Rodney as Rodney. Really?‑‑‑Not every communication, no.
Just some and we’ve got to guess which ones, do we?‑‑‑Well ‑ ‑ ‑
Or does it depend on the subject matter?‑‑‑It does depend on the subject matter.
And where the subject matter was Bob’s tax bill?‑‑‑It was through Bob ‑ ‑ ‑
Should ‑ ‑ ‑?‑‑‑Sorry, through Rod under his power of attorney.
Okay. So before the 11th of March you were comfortable that you were taking instructions from Rod where it was about Bob’s tax bill, that was Rod as with Bob as the client. Is that right?‑‑‑Yes.
And the 11th of March authority made no difference to that other than ‑ ‑ ‑?‑‑‑It was noted ‑ ‑ ‑
‑ ‑ ‑ the technocrats at the ATO might have insisted on that specific authority rather than just a power of attorney and so that’s the purpose for which you got it. Is that right?‑‑‑Yes.
It otherwise made no difference at all to the process by which you took instructions and gave advice, did it?‑‑‑No.
I am satisfied that the authority to which Mr FG referred was an authority directed to the ATO and had no bearing whatsoever on whom he regarded as his client when he undertook the communication at Pages 1176 and 1177. Mr FG’s description of that part of his affidavit as[36] “I think I was trying to put a gloss on the ambivalence I expressed in the previous paragraph, saying I didn’t know whether the communication was predominantly directed to Rod and his personal tax exposure .. ” was a reasonable description but it did him and the drafter of his affidavit little credit. Particularly, as Mr FG’s affidavit was drawn and sworn prior to me making the ruling that the wife’s practitioner could retain and make use of Pages 1176 and 1177 so he could not have assumed the court or other party would ever access the document.
[36] Transcript-in-Confidence, Page 549, line 16-18.
I am not satisfied that the primary or predominant purpose of Pages 116 and 1177 was for Mr FG to advise Mr Jess Jnr in relation to Mr Jess Jnr’s taxation position.
Finally, in his affidavit sworn 26 August 2016 [318], LM referred to paragraphs [20] to [21] of the revised affidavit and deposed at [6(b)] that “I agree that I was acting for [YL] in relation to communications which are referred to therein.”
It follows from the assertions of Mr Jess Jnr and LM that, even if I were to accept that Mr FG was acting solely for Mr Jess Jnr in relation to the communications at that Mr Jess Jnr authorised the communication of otherwise privileged communications to LM who acted not for Mr Jess Jnr but for YL. As with Pages 1111, 1126 and 1130, 1195 to 1197 and Pages 1199 to 1200, Mr Jess Jnr acted in a way which was inconsistent with him being able to maintain the confidentiality of the communication recorded at Pages 1176 and 1177 (Mann v Carnell (supra)) It was not a waiver of privilege vis-à-vis the world but it was a waiver vis-à-vis YL. Likewise, having regard to the fiduciary duty which Mr Jess Jnr and Mr N Jess owed YL and one another as directors of YL, Mr Jess Jnr’s claim of privilege must fail against Mr N Jess who could, in his capacity as a director of YL have obtained the communication.
Page 1127
Page 1127 is a document in respect of which privilege was claimed but which has now been released. The basis of the release is unclear. That is, whether privilege is claimed but waived or whether Mr Jess Jnr recasts his objection to not include a claim for privilege over Page 1127. In any event, the privilege claim, subsequent release and content of Page 1127 informs my assessment of the process undertaken by and on behalf of Mr Jess Jnr for the identification of documents to which he asserts legal professional privilege attaches.
On 6 March 2015, Richard Mereine deposed at [36(c)(v)] that document 1127 (together with other documents) “record confidential communications between Mr FG, Mr Jess Jnr, Peter Rashleigh and LM relating to the Supreme Court Trust Proceeding”. Richard Mereine deposed that he is informed and believed that Mr Jess Jnr and YL maintain the privilege, have not waived the privilege and object to Mr N Jess and the wife and their respective lawyers being permitted to inspect the document.
Mr Jess Jnr deposed in his revised affidavit, as follows:-
[27] I have read page 1127 (dated 20/04/2009). The page is a communication between Mr FG and me which relates to the communication recorded on page 1126. The communication was made
for the dominant purpose ofprimarily so that Mr FG could provideingme with the legal advice, which he did on page 1126. When this communication was made I understood that Mr FG was under an obligation not to disclose its contents to anyone else without my consent.As is evident from the track changes, Rodney swore one version on 21 March and 2016 and the revised affidavit on 18 August 2016. However, the purport of the two versions is the same. That is, Page 1127 is a standalone document to which legal professional privilege attaches.
LM, in his affidavit sworn 26 August 2016 [318] deposes at [4] to having read certain of the Pages including Page 1127 but does not give an further evidence in relation to Page 1127 or paragraph [27] of Mr Jess Jnr’s revised affidavit.
Mr FG deposed at [11] that he agreed with Mr Jess Jnr’s affidavit which was, necessarily, the version sworn on 21 March 2016. In oral evidence on 7 September 2016, in response to questions by Mr Mitchell for Mr Jess Jnr, Mr Young twice confirmed[37] that he agreed with paragraph 27 of Mr Jess Jnr’s revised affidavit and that “nothing of any substance, in my opinion, has changed”.
[37] Transcript-in-Confidence, Page 389, line 33 to Page 390, line 28.
MR MITCHELL: … With the permission of your Honour and my learned friends, I seek leave to hand a copy of those two pages, 1126 and 1130, to Mr Young, without showing my learned friends and without showing your Honour, so Mr Young can confirm what ‑ ‑ ‑
HER HONOUR: Which is what would have happened if he had had it, so that’s fine, yes.
MR MITCHELL: Yes. Thank you, your Honour.
THE WITNESS: Thank you. I’ve now read those documents. Nothing of substance has changed from Rodney’s original affidavit.
MR MITCHELL: And, therefore, do I understand that your evidence in paragraph 11, insofar as it refers to paragraph 26, that you agree with that paragraph, would be the same in respect of Mr Jess’s amended paragraph 26? You would agree with it?‑‑‑Yes.
Can you – can I have those two pages back please, Mr Young? Can you now please have a look at paragraph 27 of Mr Jess’s amended affidavit?‑‑‑I might have to repeat the request in respect of page 1127.
Would you also like a copy of 126 back?‑‑‑Yes.
HER HONOUR: It seems to make sense.
MR MITCHELL: Yes. And you may need it, then. What I might do, your Honour, is actually hand Mr Young pages 127 ‑ ‑ ‑
HER HONOUR: 126 to 129.
MR MITCHELL: Exactly?‑‑‑Yes.
MR MITCHELL: Just so we can give to you more than one. Yes, 1126 to 1129. And if you could, Mr Young, given you’ve got all those pages now, have a look at both paragraphs 27 and 28 of Mr Jess’s amended affidavit?‑‑‑Well, in relation to paragraph 27 of Rodney’s affidavit, again nothing of any substance, in my opinion, has changed.
MR MITCHELL: And so the evidence you’ve given in paragraph 11 of your affidavit, that you agree with the statement made by Mr Jess Jnr in paragraph 27, now being his amended affidavit, remains that you agree with it?‑‑‑Yes.
However, Mr Mitchell re-examined Mr FG on 3 November 2016,[38] Mr FG revised his evidence about Page 1127, as follows:
MR MITCHELL: Have a look at paragraph 27 for me please, Mr Young. Same concession was made. I understand that you could not know what Mr Mr Jess Jnr understood was the position with respect to confidentiality, but what was your understanding in respect to that communication about the obligation of confidentiality?‑‑‑On that document, which is known as 1127 ‑ ‑ ‑
Yes?‑‑‑ ‑ ‑ ‑ standing alone ‑ ‑ ‑
Yes.
HER HONOUR: You mean also with 1126?‑‑‑Well, it’s ‑ ‑ ‑
MR MITCHELL: Before you go there, Mr Young?‑‑‑And relates to a communication recorded on 1126. I would have to say that that document, on reflection, probably is not privileged in my mind, because, well, it doesn’t really say that the ‑ ‑ ‑
HER HONOUR: The content isn’t that to which privilege would attach?‑‑‑No, I don’t believe it is.
MR MITCHELL: And that’s 1127, is it?‑‑‑That’s 1127 by itself.
[38] Transcript-in-Confidence, Page 694, line 15 –34.
In light of Mr FG’s evidence that Page 1127 was not a document to which privilege could attach, on 10 November 2016 I asked Mr Waller QC whether Page 1127 had been released. It had not. Senior Counsel submitted that Page 1127 may be a document subject to legal professional privilege attaching to Mr Jess Jnr and Mr N Jess and, if so, Mr N Jess could merely seek to adduce evidence of the document and its contents in accordance with s 124 of the Uniform Evidence Act and that this would, in his view, need to be done by Mr N Jess in his own right rather than by his bankruptcy trustee and that Mr Jess Jnr may require Mr N Jess for cross examination.[39] The day concluded with Mr Waller QC indicating that, if instructions were forthcoming, Page 1127 may be provided overnight.[40]
[39] The discussion is recorded at various parts of Transcript-in-Confidence, Page 818, line 45 to Page 875, line 46.
[40] Transcript-in-Confidence, Page 887, line 46–47.
On 11 November 2016 a copy of Page 1127 was tendered by consent[41]. It was part of an email communication from Mr Waller QC and Senior Counsel for the wife dated 10 November 2016 at 5:53 pm (an hour and a half after we had adjourned for the day) and evidenced that Page 1127 had been provided under cover of a message which, omitting formal and irrelevant parts, read:
Provision of this document:
·Is made having regard to the evidence of Mr FG at T.694:14-36 on 3 November 2016;
·Does not constitute a waiver of privilege in respect of any other Pages; and
·Does not amount to a concession that the claim for privilege in respect of this document (having regard to its association with 1126) was improper.
[41] Exhibit “W49”.
Mr Waller QC’s statement, on 10 November 2016,[42] that he was familiar with the contents of Page 1127 and that it would not take long to read, was accurate. Page 1127 is an email dated Monday 20 April 2009 at 11:27 am addressed to Mr Jess Jnr.[43] The only message appears in the subject line and reads:
I have just sent you an email to your gmail address (also to Mark and Peter)
The footer is Mr FG’s particulars and a notification about confidentiality.
[42] Transcript-in-Confidence, Page 875, line 42.
[43] Exhibit “W49”.
On 11 November 2016, Mr Waller QC said that Page 1127 had not been handed over earlier
[b]ecause, your Honour, professional judgment in relation to documents like fax headers or documents that point to and therefore disclosure of, may waive privilege in other documents are legitimately the subject of claims for privilege.[44]
I have difficulty with that submission. First, Page 1127 was a separate document. Second, if Mr Jess Jnr and his lawyers were concerned that releasing Page 1127 would constitute a waiver of privilege in relation to other Pages, it could have been released under cover of a proviso in the form of the second dot point to Mr Waller QC’s communication to Mr Dickson QC on 10 November 2016 (referred to and extracted earlier in these reasons). That is “Provision of this document does not constitute a waiver of privilege in respect of any of the other Pages”.
[44] Transcript-in-Confidence, Page 913, line 15-19.
In my view, Page 1127 was not a document in respect of which legal professional privilege could be claimed by Mr Jess Jnr to the exclusion of Mr N Jess or at all. Notably Mr Jess Jnr twice swore that it was, once on 21 March 2016 and again on 18 August 2016. Mr FG provided affidavit evidence on 5 April 2016 and oral evidence on 7 September 2016 agreeing with Mr Jess Jnr’s assertion that it was a privileged communication. He did not resile from that evidence until 3 November 2016 and then the document was not released for another week. These circumstances lead me to have lessened confidence in the process by which Mr Jess Jnr’s legal team identified documents to which a claim of legal professional privilege referrable solely to Mr Jess Jnr attaches.
Senior Counsel for Mr Jess Jnr, Mr Waller QC, submitted, correctly in my view, that in a proceeding of this nature, the court should not lightly ignore evidence given under oath by a solicitor who is an officer of the court particularly where that witness is not required for cross examination. However, the fact that a deponent is a solicitor does not make that witness’ evidence sacrosanct. Mr Young is a solicitor. He was cross examined and I am satisfied that his evidence in relation to Page 1127 was, at best, given without bringing to the task adequate care and attention to detail, particularly in the context of the party challenging the claim to legal professional privilege necessarily not having access to the document under consideration. Furthermore, it would have been apparent to Mr Young, at least by 7 September 2016, that the court had not examined the document either.
In Asahi Holdings (supra), Jessup J observed [55] “I am, in the circumstances, in no position to suspect that communications which contained, or related to, advice which was also of apparent interest to the Company were inappropriately made the subject of the privilege claims vouches by those solicitors”. I do not share his Honour’s sense of ease given the circumstances of this case.
I consider the tripartite role of Richard Mereine, solicitor in this application. He is, first, the solicitor who has care and conduct of the proceedings on behalf of Mr Jess Jnr and the represented third parties and therefore he has a general supervisory role in the proceedings, an overarching professional responsibility.
Second, Richard Mereine drafted the affidavit which he swore or affirmed on 6 March 2015 and, relevantly, for reasons which I have expressed above, I find that his evidence in relation to Page 1127 is not sustainable.
Third, Richard Mereine apparently drafted the other affidavits being Mr Jess Jnr’s affidavit of 21 March 2016 and the revised affidavit, Mr FG’s affidavit as well as LM’s affidavit relevant to the privilege dispute. The drafting of affidavit evidence for a dispute such as this, where only those claiming privilege may ever see the document under consideration, requires a high degree of exactitude, diligence, fairness and attention to detail. An inspection of Page 1127 and the circumstances surrounding its release leaves me with less confidence than I would like in the processes brought to this task by the lawyers for Mr Jess Jnr. I might be harsh but, ultimately, they had only 18 Pages plus Pages 1176 and 1177 with which to contend.
Conclusion
Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps more accurately, an important common law immunity (Daniels Corporation International v ACCC [2002] 213 CLR 543 at 553]). It must not be stripped away simply to reveal evidence. However, in the circumstances of this case I am satisfied that none of the documents in respect of which Mr Jess Jnr has claimed legal professional privilege, to the exclusion of Mr N Jess, are documents subject to the privilege claimed.
I certify that the preceding two hundred and one (201) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett and that the following two (2) pages is the annexure referred to by her Honour at paragraph 175 of these reasons for judgment
Legal
Date: 24 November 2016
Annexure A: Pages 1176 and 1177
Removed for anonymised version
0
10
0