FEDERAL COURT OF AUSTRALIA
Lane v Admedus Regen Pty Limited [2016] FCA 864
File number: WAD 334 of 2014 Judge: MCKERRACHER J Date of judgment: 1 August 2016 Catchwords: DISCOVERY – proceedings relating to a claim of oppressive conduct – interlocutory application to inspect documents – relevant principles in relation to legal professional privilege and common interest privilege – relevant principles in relation to waiver of privilege – privilege over attachments to privileged documents – whether there is a waiver of privilege over documents disclosed between defendants for the purpose of discovery – whether the equitable fraud exception to privilege is established – examination by the Court of a sample of documents over which privilege is claimed Cases cited: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405
Ananda Marga Pracaraka Samgha Ltd v Tomar (No 2) [2010] FCA 1342
AWB Ltd v Cole (No 5) (2006) 155 FCR 30
Baker v Campbell (1983) 153 CLR 52
Barnes v Commissioner of Taxation [2007] FCAFC 88
Clements, Dunne and Bell Pty Ltd v Commissioner, Australian Federal Police (2001) 188 ALR 515
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151
Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1996) 39 NSWLR 601
Grant v Downs (1976) 135 CLR 674
Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 2) [2010] WASC 217
Marshall v Prescott [2013] NSWCA 152
Media Ocean Ltd v Optus Mobile Pty Ltd (No 10) [2010] FCA 1348
New South Wales v Betfair Pty Ltd (2009) 180 FCR 543
Osland v Secretary, Department of Justice (2008) 234 CLR 275
Seven Network Limited v News Limited [2005] FCA 1342
Date of hearing: 22 March 2016 Date of last submissions: 11 April 2016 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 88 Counsel for the Plaintiffs: Mr MG Goldblatt Solicitor for the Plaintiffs: Murcia Pestell Hillard Counsel for the First Defendant: Ms K Hawkins Solicitor for the First Defendant: Tottle Partners Counsel for the Second and Third Defendants: Mr CM Scerri QC with Ms SE Russell Solicitor for the Second and Third Defendants: Clifford Chance (at the time of hearing North Rose Fulbright) ORDERS
WAD 334 of 2014 BETWEEN: GEOFFREY KINGSTON LANE
First Plaintiff
KEITH VICTOR WOOLLARD
Second Plaintiff
PALKINGSTON PTY LTD ACN 008 750 025 AS TRUSTEE FOR THE LANE SUPERANNUATION FUND (and another named in the Schedule)
Third Plaintiff
AND: ADMEDUS REGEN PTY LIMITED ACN 095 710 339
First Defendant
ADMEDUS LIMITED ACN 088 221 078
Second Defendant
ADMEDUS (AUSTRALIA)…
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Details
- Case
- [2016] FCA 864
- Decision Date
CaseChat Overview and Summary
In the case of Lane v Admedus Regen Pty Ltd, the court addressed a complex issue involving claims of oppressive conduct and the discovery of documents. The dispute centered on whether Admedus Regen Pty Ltd and its associated entities had waived their claims of legal professional privilege and common interest privilege during the discovery process. The plaintiffs argued that the defendants had improperly disclosed privileged documents, while the defendants maintained that they had properly asserted their claims of privilege. The court was required to decide whether the defendants had indeed waived their privilege claims and if the equitable fraud exception to privilege applied.
The court examined the principles relevant to legal professional privilege and common interest privilege, particularly focusing on how these claims should be articulated without inadvertently waiving them. The court noted that privilege claims must be sufficiently specific to identify the documents without disclosing their contents. The court also considered the defendants' method of discovery, finding that it did not constitute a waiver of privilege. However, the question of whether all the documents concerned attracted common interest privilege was more challenging to resolve without examining a sample. The court concluded that the interests of justice would be best served by examining a sample of documents proposed by the defendants, which would be reviewed by another judge. The court ordered the parties to provide the sample documents to the nominated judge for examination and reserved costs pending further determination.
The court's decision highlighted the delicate balance required in asserting privilege claims, emphasizing the need for specificity while avoiding the inadvertent disclosure of privileged information. The case underscored the importance of properly articulating privilege claims in discovery processes to maintain their validity. The court's order to examine a sample of documents demonstrated a pragmatic approach to resolving complex privilege issues without unnecessarily burdening the parties with extensive discovery procedures.
The court examined the principles relevant to legal professional privilege and common interest privilege, particularly focusing on how these claims should be articulated without inadvertently waiving them. The court noted that privilege claims must be sufficiently specific to identify the documents without disclosing their contents. The court also considered the defendants' method of discovery, finding that it did not constitute a waiver of privilege. However, the question of whether all the documents concerned attracted common interest privilege was more challenging to resolve without examining a sample. The court concluded that the interests of justice would be best served by examining a sample of documents proposed by the defendants, which would be reviewed by another judge. The court ordered the parties to provide the sample documents to the nominated judge for examination and reserved costs pending further determination.
The court's decision highlighted the delicate balance required in asserting privilege claims, emphasizing the need for specificity while avoiding the inadvertent disclosure of privileged information. The case underscored the importance of properly articulating privilege claims in discovery processes to maintain their validity. The court's order to examine a sample of documents demonstrated a pragmatic approach to resolving complex privilege issues without unnecessarily burdening the parties with extensive discovery procedures.
Orders
Orders of the court
1. The parties do provide forthwith to the Honourable Justice Barker the sample of documents referred to in these reasons to enable his Honour to consider the claims for privilege should his Honour be so minded.
2. The plaintiffs file brief submissions on the question to be determined by Justice Barker by 4.00 pm on 3 August 2016, and the second and third defendants file brief written submission in response by 4.00 pm on 5 August 2016.
3. Costs of the amended interlocutory application filed 21 March 2016 be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Admedus Limited and Admedus Australia submit, and I accept, that a party describing a document for which a claim for privilege attaches must strike a balance between, on the one hand, identifying the document by describing it sufficiently and on the other, by not disclosing its contents and risk waiving his or her claims for privilege. To require something more would be to give detail that indirectly enables the contents of the documents and potentially the advice sought or given to be ascertained.RELEVANT BACKGROUND The issue of discovery in this proceeding has been before the Court on a number of occasions. It commenced on 24 June 2015 pursuant to an order made that day. Subsequently, there have been six tranches of discovery by Admedus Limited and Admedus Australia: some 55,000 documents. The plaintiffs complain that a major problem with the discovery of Admedus Limited and Admedus Australia in relation to their claims of privilege is that discovery has been made by the defendants jointly by their common company secretary Mr Mann. Mr Mann has not, according to the plaintiffs, applied his mind individually to the claims of privilege of each of the second and third defendants in respect of each of the documents and has, instead, repeated ‘incantations of privilege’ claims ‘holus bolus’ in relation to ‘large swathes’ of documents. For example, the plaintiffs say that:(a)Mr Mann claims privilege in terms of a document being, containing or revealing a confidential communication between Admedus Regen and its external legal advisers. He does not say which one of the three alternatives applies in relation to any particular document;(b)Mr Mann claims privilege in terms of documents being, containing or revealing a confidential communication between the ‘Second and - or [sic] Third Defendant’ and its external legal advisers. That creates a further overlay of permutations as to the privilege claims and the party or parties which are claiming the privilege. Had Mr Mann deposed separate affidavits of discovery on behalf of Admedus Limited and Admedus Australia, he would have been obliged to apply his mind pertinently to the issue of which of those defendants was claiming privilege in respect of each and every document and the basis there of, instead of relying upon broad privilege claims ‘in the form of incantations or mantras’;(c)Mr Mann claims privilege in respect particular document relying on both ‘incantations’ set out above, namely, he says of the document ‘it is contains or reveals’ a confidential communication between Admedus Regen and its external legal advisers and at the same time, the same document ‘is, contains or reveals’ a confidential communication between Admedus Limited and/or Admedus Australia and external it legal advisers; and(d)Mr Mann claims ‘common interest privilege’ in bald terms on behalf of apparently both the second and third defendants in relation to all of the documents over which the privilege admittedly resides in Admedus Regen.
Evidence
Evidence Before The Court
This common interest privilege claim falls to be determined under the common law, rather than under the Evidence Act 1995 (Cth). (While s 118 of the Evidence Act refers to adducing evidence in a proceeding, it does not cover all of the circumstances in which a claim for privilege might apply.) In Marshall v Prescott [2013] NSWCA 152, Barrett JA, with whom McColl and Ward JJA agreed, said (at [57]):If a document in which legal professional privilege subsists is given to someone else so that the content ceases to be confidential, the privilege is usually lost. This is because the act of giving is, in the particular circumstances, inconsistent with any continuing intention to maintain confidentiality: Mann v Carnell (above) at [13]. An exception operates, however, where the person entitled to the privilege and the person to whom the content of the document is made known have such a commonality of interest in relation to the subject matter of the privilege that sharing of the content is consistent, rather than inconsistent, with an ongoing intention to preserve confidentiality and privilege. Questions of common interest privilege usually arise (as here) when litigation is on foot or foreshadowed. The present case does not raise the question whether the concept extends beyond the litigation context. Common interest privilege is not a rigidly defined concept: Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1996) 39 NSWLR 601 (at 609) per Sheller JA, with whom Waddell AJA agreed. A common interest in the outcome of litigation will be sufficient to enable any party with that interest to rely upon it. For common interest privilege to apply:(a)the relevant communication must be subject to legal professional privilege;(b)the interest said to be common must be identified; and(c)the exchange of the information or advice, subject to legal professional privilege must relate to that interest. Communication of what would otherwise be privileged material in those circumstances would not be waived where there was a necessary common interest. Such common interest will not exist where the individual interest in the relevant question are selfish and potentially adverse to each other so that there is not the necessary identity of interest: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 (at 410) and Media Ocean Ltd v Optus Mobile Pty Ltd (No 10) [2010] FCA 1348 (at [53]-[54]). Common interest privilege is not limited to litigation or anticipated litigation: South Australia v Peat Marwick Mitchell (1995) 65 SASR 72 per Olsson J (at 77). Further, it is not necessary that parties have a common solicitor or that the identity of the interests between the parties be so close that they could have used the same lawyer: Bulk Materials (Coal Handling) Services Pty Ltd v Coal & Allied Operations Pty Ltd (1988) 13 NSWLR 689 (at 695). There is a two-step process. The first requires a determination in accordance with ordinary tests as to whether the document would be privileged in the hands of the party releasing the information which it communicates. If so, the second step is to ascertain whether a person or persons to whom the document has been communicated was sufficiently close, so that the communication should not waive privilege. Waiver of privilege
Decision
Reasons for decision
As indicated above, I do not propose to reach any conclusion in favour of the plaintiffs’ assertion that any claim for privilege should be eroded on the basis of equitable fraud. Numerous communications were exchanged prior to the hearing of this application and including letters, emails and submissions. The topic was raised as a last minute thought, apparently in a further communication on the day preceding the hearing. Quite properly, the defendants objected to the plaintiffs’ reliance upon it at the hearing. No fraud has been pleaded by the plaintiffs. The foundation for the argument is not only flimsy but has been pursued far too late in the piece. The plaintiffs’ contentions on this ground cannot succeed. CONCLUSION In my view the method by which Admedus Regen’s documents were discovered did not constitute a waiver for the reasons indicated above. As to whether all the documents concerned attracted common interest privilege, this is more difficult to ascertain in the absence of examination of a sample. The position is finely balanced, but I consider the interests of justice would best be served by accepting the defendants’ offer to examine the 21 sample documents which have been proposed, constituting three samples within each of the seven categories. Those documents or others agreed by the parties will be examined by another Judge of this Court who is not the docket/trial judge with a view to ascertaining whether the documents attract common interest privilege. To facilitate that exercise, each of the parties should have the opportunity to make very short submissions (many of the submissions having been made) in relation to each document. Again, those submissions should be provided to the Judge reviewing the documents. It follows that, as the matter is not fully resolved, any costs of this hearing will be reserved.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.