Lane v Channel Seven Adelaide Pty Ltd - [2005] SASC 181

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
LANE & ANOR v CHANNEL SEVEN ADELAIDE PTY LTD
Reasons of Judge Lunn a Master of the Supreme Court
26 May 2005
PROCEDURE
Legal professional privilege - solicitor doing non legal work - dominant purpose for creation of documents - most documents of the solicitor held not to be privileged except where documents prepared for use in litigation or where solicitor acting as agent of another solicitor who was representing the client in litigation.

LANE & ANOR v CHANNEL SEVEN ADELAIDE PTY LTD
[2005] SASC 181

JUDGE LUNN In this action the plaintiffs have sued the defendants for damages for defamation. The plaintiffs were respectively the counsel and solicitor acting for Peter Liddy (“Liddy”) who, at the relevant times, was charged with serious criminal offences and was later convicted of them. The subject matter of the alleged defamatory statements relates to the disposal of Liddy’s house at Kapunda and its contents prior to his conviction. The defendant has pleaded, inter alia, justification and fair comment.
By an application of 7 October 2004 the defendant sought third party discovery under R60 from Mr W Morris. The exact legal relationship between Mr Morris and Liddy is unclear and will be dealt with below. On 31 March 2005 Mr Morris filed an affidavit making discovery of the documents which he had held in relation to the dealings which he had with, and on behalf of, Liddy. (I am not concerned with any issues of relevance concerning these documents.)
At all material times Liddy has been in gaol. On 21 December 2004 another solicitor, Christopher McDonough, filed an affidavit stating that he was acting for Liddy in some matters, but not in relation to this matter. However, he deposed that he had been instructed by Liddy to inform the Court and the parties to this action that Liddy did not waive his legal professional privilege in relation to any of the documents possessed by any of the lawyers who had previously been instructed by him, that he did not wish to be present at any Court hearings and he did not wish to be represented at any Court hearings. This information was interpreted to mean that Liddy maintained a claim for legal professional privilege over all of the documents held by Mr Morris. Notice was given to Liddy of subsequent hearings concerning the defendant’s challenges to his claim for privilege, but he made no response to them. I have treated his position as being that he claims legal professional privilege over all of the documents discovered by Mr Morris, but he does not wish to adduce any evidence or make submissions in support of his claims for privilege.
In his list of documents Mr Morris discovered in Part 1A thirty-seven documents which he accepted could not be subject to the claim of privilege. In Part 1B he discovered sixty-six documents for which he asserted Liddy’s claim to legal professional privilege. He quite properly took the position that the privilege belonged to Liddy and he had no authority to waive it. He could be in breach of his duty to Liddy if he produced documents to the defendant which were properly subject of Liddy’s legal professional privilege. However, whether these documents are subject to such privilege is not for Mr Morris to decide. He properly took the position that if there was any possibility that documents could be subject to privilege they should be included in Part 1B of his list of documents.
By an affidavit of its solicitor filed on 20 April 2005, the defendant has challenged the claim to privilege for the documents in Part 1B. Pursuant to my direction Mr Morris’ solicitors have lodged with the Court the documents contained in Parts 1A and 1B of this list in what Mr Morris believes to be their chronological order. He and his solicitor have been most helpful in presenting the documents to the Court in the best way possible to facilitate the resolution of the issues of privilege, but without unnecessarily disclosing anything about the contents of the documents in Part 1B to the solicitors for the parties.
The plaintiffs did not oppose the application of the first defendant for it to inspect and copy the documents in Part 1B of the list of Mr Morris. The defendant has agreed that if it is successful in its application it will supply copies of the documents it obtains from Part 1B to the plaintiffs’ solicitors. Pursuant to R59.04 it was agreed by the parties that I should inspect the documents for the purpose of ruling whether each is subject to Liddy’s legal professional privilege. I have now read each of the documents. However, in some instances I have not been able to decipher hand writing or symbols or to understand the significance of some statements contained in them. Nevertheless, from the contents of the documents in Parts 1A and 1B of the list, and from the affidavits filed relating to the application, I believe I have a reasonably good grasp of the import of the documents and the context in which they were produced. However, particularly in relation to the documents for which I uphold the claim of privilege I cannot give reasons which will disclose the contents of those documents.
In law the onus is on the person claiming the privilege, ie Liddy, to adduce evidence to support the claim for privilege and the onus is on him to establish it on the balance of probabilities: Zappia v Registrar Supreme Court (2004) 90 SASR 193. Liddy has not sought to adduce any evidence in support of his claim for privilege for any of the documents. However I must act on the evidence which I do have which is constituted by the affidavits and the contents of the documents themselves. If on that evidence I am not satisfied that a document is subject to privilege, then the claim for privilege fails and that document is to be produced to the defendant.
At the relevant times the second plaintiff was acting as the solicitor for Liddy, initially as an associate of McGee & Co and later as a solicitor practising in her own right. She was the solicitor on the record for Liddy in the criminal proceedings and also in various actions in the District Court where his victims were seeking damages from him.
It is difficult to make findings about the precise legal relationship between Mr Morris and Liddy. Mr Morris is an admitted legal practitioner, but he was never the solicitor on any Court record for Liddy. It is likely that the precise nature of the relationship changed from time to time. In his affidavit Mr Morris says that he was instructed by McGee and Associates to assist in respect of certain aspects of Liddy’s affairs arising from the criminal proceedings and his instructions came both direct from Liddy and through McGee and Associates and the second plaintiff. On 10 April 2001 Liddy gave an enduring power of attorney to Mr Morris for him to act generally on his behalf. It is also clear from some of the documents that Mr Morris was a personal friend of Liddy and was seeking to assist him in that capacity. On 15 August 2001 he stated in a fax that he acted for Liddy “as a solicitor for his financial affairs”. In a letter to Liddy on 22 October 2001 he said he was not going to render a bill to him, but he would continue to assist him, although not as his solicitor, but in December 2001 he did render an account for work done as Liddy’s attorney and otherwise. At the relevant times Mr Morris was living in Kapunda, and therefore he was close to Liddy’s property. Because he was in gaol Liddy was personally unable to look after his Kapunda property or to make the necessary arrangements for its sale. The documents disclose that much of what Mr Morris did for Liddy was no more than act as the person on the scene to preserve, and arrange for the disposal of, assets for the absent Liddy. It was in this role that Mr Morris created most of the documents in question which emanated from him and received the documents which came into his possession. Much of what he did for Liddy would not be categorised as legal work, but as work which could have been done by any person conversant with business affairs, eg arranging insurance, reporting thefts to the Police, organising the preparation of income tax returns, etc.
Even assuming that there was a solicitor/client relationship between Liddy and Mr Morris in relation to the creation and receipt of the documents in question, legal professional privilege will only attach to them if they were brought into existence either for the purposes of seeking or conveying legal advice, albeit not construed too narrowly: DSE (Holdings) Pty Ltd v Intertan Inc (2004) 203 ALR 348, or for use in actual or contemplated litigation: ETSA v Mitsubishi (1991) 57 SASR 48. From my examination of the documents in Part 1B of Mr Morris’ list it is clear that most of them are unrelated to any existing or anticipated litigation and do not relate to either Liddy seeking, or Mr Liddy giving, legal advice or assistance to Liddy. Hence they are not privileged.
The documents numbered 4, 10, 12, 21, 23, 27 and 29 in Part 1B do contain some material which might be construed as coming within the ambit of legal professional services. However, legal professional privilege attaches to a document not because it contains such material but because of the particular purpose for which it was brought into existence: Health & Lifecare Ltd v Price Waterhouse (1997) 69 SASR 362; GSA Industries (Aust) Pty Ltd v Constable [2002] 2 QR 6. Furthermore, privilege only attaches to the document if the necessary purpose of seeking or giving legal advice, or for use in actual or anticipated litigation, is the dominant purpose for which the document was brought into existence or received: ESSO Australia Resources Ltd v FCT (1999) 201 CLR 49. The Macquarie Dictionary at p 532 defines “dominant” as “ruling, governing, controlling, most influential”. Hence, even if the document contained legal advice, or was for use in litigation, it does not attract the privilege unless that was the dominant purpose in its creation. In the documents mentioned at the beginning of this paragraph there is also to a varying degree, but significant, other material relating to non legal matters from which I infer that the necessary purpose for privilege in their creation was not their dominant purpose. Therefore privilege does not attach to these documents.
Document B46 is a letter of 24 October 2001 to McGee Solicitors from Mr van Kruyssen relating to valuations of the contents of Liddy’s house. The document bears an endorsement:
This document is brought into existence for the sole purpose of giving or obtaining legal advice in the conduct of, or contemplation of legal litigation and legal professional privilege is claimed.
However, the affidavit of the defendant’s solicitors shows that this document was earlier discovered by Mr van Kruyssen without any claim for privilege. There is nothing in its contents, or in the context in which it appears in Mr Morris’ file, that suggests that it should not be treated as a valuation obtained for the purpose of the sale of Liddy’s assets, and not for any dominant purpose relating to litigation.
I uphold the claim for privilege for the documents B22, 47 and 51. Each of these documents relates to dealings with the second plaintiff where Mr Morris was acting as the agent of Liddy for the purpose of communicating between the second plaintiff and Liddy on matters relating to the legal proceeding in which Ms Hurley was acting for Liddy: DSE (Holdings) Pty Ltd v Intertan Inc above.
I uphold the claim for privilege in respect of documents B25 and 31 which are documents prepared for use in the District Court litigation involving Liddy.
In respect of all other documents in Part 1B, apart from B22, 47, 51, 25 and 31, I find that the claim for privilege has not been made out. Accordingly these other documents will be made available to the defendant’s solicitors for their inspection