Kirby v Centro Properties Ltd (No 2)

Case [2012] FCA 70

FEDERAL COURT OF AUSTRALIA

Kirby v Centro Properties Limited (No 2) [2012] FCA 70

Citation: Kirby v Centro Properties Limited (No 2) [2012] FCA 70
Parties:

RICHARD KIRBY v CENTRO PROPERTIES LIMITED, CPT MANAGER LIMITED, PRICEWATERHOUSECOOPERS (A FIRM), BRIAN HEALEY, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, ROMANO GEORGE NENNA AND ANDREW THOMAS SCOTT

RICHARD KIRBY v CENTRO RETAIL LIMITED, CENTRO MCS MANAGER LIMITED, PRICEWATERHOUSECOOPERS (A FIRM), BRIAN HEALEY, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, ROMANO GEORGE NENNA AND ANDREW THOMAS SCOTT

NICHOLAS VLACHOS, MONATEX PTY LTD AND RAMON FRANCO v CENTRO PROPERTIES LIMITED, CPT MANAGER LIMITED, CENTRO RETAIL LIMITED, CENTRO MCS MANAGER LIMITED, PRICEWATERHOUSECOOPERS (A FIRM), BRIAN HEALEY, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, ANDREW THOMAS SCOTT AND ROMANO GEORGE NENNA

NICHOLAS STOTT v PRICEWATERHOUSECOOPERS SECURITIES LIMITED, CENTRO RETAIL LIMITED, CENTRO MCS MANAGER LIMITED, CENTRO CORPORATE SERVICES PTY LTD, PRICEWATERHOUSECOOPERS (A FIRM), BRIAN HEALEY, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, ANDREW THOMAS SCOTT, ROMANO GEORGE NENNA, CENTRO PROPERTIES LIMITED AND CPT MANAGER LIMITED

NICHOLAS VLACHOS, MONATEX PTY LTD AND RAMON FRANCO v PRICEWATERHOUSECOOPERS (A FIRM), CENTRO PROPERTIES LIMITED, CPT MANAGER LIMITED, CENTRO RETAIL LIMITED, CENTRO MCS MANAGER LIMITED, BRIAN HEALEY, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, ANDREW THOMAS SCOTT AND ROMANO GEORGE NENNA
File number(s): VID 326 of 2008
VID 327 of 2008
VID 366 of 2008
VID 1028 of 2010
VID 1041 of 2010
Judge: BROMBERG J
Date of judgment: 10 February 2012
Corrigendum: 27 February 2012
Catchwords:

PRIVILEGE – legal professional privilege – legal advice – whether parts of retainers which revealed or permitted to be inferred the nature of legal advice sought by a client were privileged – whether privilege can attach to communications between solicitor and a prospective client – whether communications between in-house lawyer and employing corporation and corporation and external lawyers were privileged – whether evidence from in-house lawyer and Company Secretary sufficient to discharge burden as to dominant purpose – whether communications between directors disclosing legal advice from external lawyers privileged – whether evidence from Company Secretary sufficient to discharge burden – whether adverse inference should be drawn because authors of communications were not called – whether (i) communications between solicitors and client; (ii) solicitors’ internal work product; (iii) communications between solicitor and third parties (accountants and other solicitors); were privileged – whether evidence of solicitors sufficient to discharge burden in circumstances where it was claimed the client had multiple purposes including an operational purposes – whether the claimed operational purpose involved the purpose of obtaining legal advice – claims for privilege upheld

Waiver – implied waiver – whether privileged contents of retainers waived because gist of the nature of advice sought was disclosed in furtherance of protecting retainers from disclosure – whether voluntary but limited and qualified disclosure to a third party resulted in an implied waiver as against the person seeking disclosure – whether implied waiver by reason of asserted deployment of the substance of privileged documents by directors of the…

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Kirby v Centro Properties Ltd (No 2) [2012] FCA 70
Case
[2012] FCA 70
Decision Date

CaseChat Overview and Summary

In Kirby v Centro Properties Ltd (No 2), the Federal Court was called upon to determine whether various categories of documents were protected by legal professional privilege, and whether any such privilege had been waived. The primary issue was the applicability of legal professional privilege to communications between Centro Properties Ltd (Centro) and its external lawyers, its internal lawyers, and third parties such as accountants and other solicitors. Additionally, the court had to decide whether any waiver of privilege had occurred.

The legal issues at the heart of this case involved determining the dominant purpose of the communications in question. The court needed to establish whether these communications were made for the dominant purpose of obtaining or giving legal advice, thereby qualifying them for privilege. The court also had to consider whether privilege extended to communications between Centro and its internal lawyers, as well as between its external lawyers and third parties. Furthermore, the court needed to assess whether any implied waiver of privilege had occurred due to the disclosure of privileged information in limited contexts.

The court found that the communications between Centro and its external lawyers, as well as the internal communications and those between the external lawyers and third parties, were indeed privileged. The evidence, particularly the privileged terms of the retainers with Freehills and Middletons, sufficiently demonstrated that the dominant purpose of these communications was to obtain and provide legal advice. The court also determined that there was no waiver of privilege as the disclosures made were not sufficient to constitute an implied waiver. As a result, the application by PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited to compel the disclosure of certain documents was dismissed. The respondents were awarded costs, and the applicants were given a limited time to file an application for leave to appeal.

In summary, the court upheld the claims of privilege for the contested documents and dismissed the application for disclosure, ruling that no waiver of privilege had occurred. The final orders included dismissing the application, awarding costs to the respondents, and setting a deadline for any appeal applications.

Orders

Orders of the court

1. The application made by PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited dated 16 August 2011 (the Application) is dismissed.

2. PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited pay the Respondents’ costs of the Application.

3. The time for PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited to file a written application for leave to appeal under Division 35.2 of the Federal Court Rules is 14 days after the date His Honour Justice Bromberg provides written reasons in respect of these orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The Investigation Documents fell into and may be considered by reference to a number of categories and subcategories as follows:(i)Communications passing between Centro and its solicitors (“the Centro/External Lawyers Communications”) which fell into two sub-categories:(a)Communications between CNP and Freehills (“the Centro/Freehills Communications”); and(b)Communications between CER and Middletons (“the Centro/Middletons Communications”);(ii)Communications between Centro and its internal lawyers (“the Centro/Internal Lawyers Communications”) which again fell into two subcategories as follows:(a)Communications passing between Centro and its General Counsel Mr Hutchinson (“the Centro/Hutchinson Communications”); and (b)Communications between Centro and its internal lawyer Jacqueline Jovanovski (“the Centro/Jovanovski Communications”);(iii)Notes of interviews conducted by Centro’s external solicitors with Centro’s employees and of meetings between those solicitors and Centro (“the Solicitor Notes of Interviews and Meetings”) which fell into two subcategories as follows:(a)File notes of interviews conducted by Freehills with Centro’s employees and file notes of meetings between Freehills and Centro (“the Freehills Notes”); and(b)File notes of interviews conducted by Middletons with Centro’s employees and file notes of discussions between Middletons and Centro (“the Middletons Notes”);(iv) Solicitors’ internal communications, including draft advices prepared by the solicitors (“the Solicitor Internal Communications”) which fell into the following two subcategories:(a)Internal Freehills’ communications and draft advices (“the Freehills Internal Communications”); and(b)Internal Middletons’ communications and draft advices (“the Middletons Internal Communications”);(v)Communications between Centro’s external solicitors and KPMG (“the Centro Solicitors/KPMG Communications”) which fell into the following two subcategories:(a)Communications between Freehills and KPMG (“the Freehills/KPMG Communications”); and(b)Communications between Middletons and KPMG (“the Middletons/KPMG Communications”); and(vi)Communications between Middletons and other solicitors (“the Middletons/Other Solicitors Communications”) which fell into three subcategories as follows:(a)Communications between Middletons and Freehills;(b)Communications between Middletons and Gadens; and(c)Communications between Middletons and Strongman & Crouch.The Evidence in Relation to the Investigation DocumentsThe Centro/External Lawyers Communications Centro claimed that these communications were privileged as confidential communications passing between Centro and its external lawyers for the dominant purpose of obtaining and giving legal advice. Other than for four documents to which I will shortly return, the evidence before me was that the documents in question under this category record communications flowing between Centro and a solicitor or solicitors at Freehills or Centro and a solicitor or solicitors at Middletons. Each of the large number of solicitors involved as either the maker or receiver of the communication, deposed that his or her sole or only purpose or dominant purpose in making or receiving the communication was for Freehills (in the case of a Freehills solicitor) or for Middletons (in the case of a Middletons solicitor) to give, and for Centro to obtain, legal advice and assistance under the terms of the Freehills Retainer (in the case of a Freehills Solicitor) or the Middletons Retainer (in the case of a Middletons solicitor).

Decision

Reasons for decision

For those reasons, I rejected PWC’s contention that Centro had waived legal professional privilege in relation to the Investigation Documents. CONCLUSION For all those reasons, on 28 November 2011 orders in the following terms were made:(1)The application made by PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited dated 16 August 2011 (the Application) is dismissed.(2)PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited pay the Respondents’ costs of the Application.(3)The time for PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited to file a written application for leave to appeal under Division 35.2 of the Federal Court Rules is 14 days after the date His Honour Justice Bromberg provides written reasons in respect of these orders.

Ratio Decidendi

Legal Principle Established

Whilst I am unable to reveal the content which I have determined was privileged, I need to indicate that in determining the dominant purpose of CNP and CER in relation to the Investigation Documents, I placed significant reliance upon the privileged content of the Freehills Retainer and the Middletons Retainer. Consideration I accepted that in relation to the Centro/External Lawyers Communications and the Solicitor Notes of Interviews and Meetings, the communications concerned occurred between a client and its solicitor acting in a professional capacity with reference to transactions covered by the solicitors’ retainer. Evidence of those facts was either expressly given or may be inferred from the evidence given by the solicitors involved who deposed to the general circumstances in which the communications occurred as well as to their understanding of the purpose of those communications. Those facts, for reasons I have already dealt with, may be accepted as demonstrating on a prima facie basis that the communications occurred for the dominant purpose of the lawyers providing, and Centro obtaining, legal advice. It is well established that, subject to the dominant purpose test being met, legal professional privilege will extend to communications made by officers or employees of the client that relate to the information sought by the client’s legal advisor to enable him or her to advise: AWB at [44] (Principle (9)). The evidence given by the solicitors in relation to communications received by them from Centro, in the context of the solicitors acting in a professional capacity in pursuance of a retainer to give legal advice, is sufficient to support a finding that, the communications received by them were provided to them to enable the giving of legal advice. Legal professional privilege also protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client such as memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: AWB at [44] (Principle (8)). So long as the dominant purpose test is satisfied, legal professional privilege will extend to the work product (including draft advices) that fall within the Solicitors Internal Communications subcategory identified above. Those communications were created by lawyers in a professional capacity with reference to the performance of work covered by the lawyers’ retainer to give legal advice, and in the absence of contrary indications, must be assumed to be for the purpose of the lawyers providing legitimate legal advice to Centro: AWB at [44] (Principle (4)). So long as the dominant purpose requirement is satisfied, communications between a solicitor and a third party (such as an accountant or another solicitor) will be protected by legal professional privilege where the function of the third party was that of enabling the client of the solicitor to obtain legal advice from the solicitor: State of New South Wales v Betfair Pty Ltd (2009) 180 FCR 543, at [29]-[33] (Kenny, Stone and Middleton JJ). The evidence in relation to the Centro Solicitors/KPMG Communications (including the privileged terms of the Freehills/KPMG Retainer and the Middletons/KPMG Retainer) and the evidence in relation to the Middletons/Other Solicitors Communications is sufficient to demonstrate that the function of those communications was to enable Centro to obtain legal advice from Freehills pursuant to the Freehills Retainer or from Middletons pursuant to the Middletons Retainer. Absent any contrary indications, that evidence is also sufficient to permit a conclusion, at least on a prima facie basis, that the dominant purpose for the creation of those communications was for Centro to obtain, and for Freehills and Middletons to provide, legal advice. I deal further below with the nature of the advice in question and why I was satisfied that the advice to be provided with the assistance of KPMG was legal advice.