Liddle v Burford

[2018] WADC 119

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   LIDDLE -v- BURFORD [2018] WADC 119

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   12 SEPTEMBER 2018

DELIVERED          :   1 OCTOBER 2018

FILE NO/S:   CIV 1497 of 2018

BETWEEN:   KIM LIDDLE

Plaintiff

AND

GILLIANE BURFORD

First Defendant

PAUL WILLIAM FARRER

Second Defendant

Catchwords:

Practice and procedure - Application to strike out affidavit filed in opposition to application for Summary Judgment - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	Mr G Gridland
First Defendant	:	Mr C Gough
Second Defendant	:	Mr C Gough

Solicitors:

Plaintiff	:	Munro Doig
First Defendant	:	Mills Oakley
Second Defendant	:	Mills Oakley

Case(s) referred to in decision(s):

Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd & Ors [2003] WASCA 11

DEPUTY REGISTRAR HEWITT:

The cause of action pursued by the plaintiff in this proceeding arises from his involvement as a shareholder in a company Parapharm Pty Ltd of which the defendants were directors.  The plaintiff purchased an allotment of shares in the company and paid the price of $250,000 for those shares which were duly issued to him.  It is alleged that the plaintiff borrowed the purchase monies in order to complete the purchase and the interest on those monies forms part of his claim.

Subsequent to the plaintiff's purchase of the shares a company named Pragmatic Training Pty Ltd made overtures to the company for the purchase of the shares in the company.  It is alleged that purchaser made it clear that it was only interested in purchasing all of the shares in the company and in the event that a purchase on those terms could not be achieved the purchaser would proceed to enforce its securities against the company and would not proceed with a purchase of the shares.  The sale of the shares to the proposed purchaser could only be achieved if the plaintiff was prepared to join with the defendants in the sale and thereby give the purchaser all the shares in the company in accordance with its wishes.

It is alleged that in order to facilitate the purchase the plaintiff agreed that he would sell his shares to the purchaser and in return for his cooperation the defendants would reimburse the plaintiff the difference between the price for which he had bought the shares and that which he achieved on the sale to the purchaser.  The plaintiff paid $250,000 for the shares and received 30,000 from the purchaser.  Accordingly, the plaintiff claims $220,000 pursuant to the agreement.

The writ of summons in this action was issued on 26 April 2018 and seeks repayment of the sum of $220,000, interest paid by the plaintiff in regard to the loan which he took out in order to purchase the shares and costs.

On 29 May 2018 the plaintiff applied for summary judgment in the action.  Affidavits have been filed by both parties and that with which this decision is concerned is the affidavit of Bethin Rachel Beck filed on 8 August 2018.  The purpose of that affidavit was to place before the court an email transmission from the solicitors for the plaintiff to the defendants and intended to be relied upon by the defendants in their defence of their summary judgment application.  The plaintiff has objected to the admission of this evidence on the basis that it is privileged and the hearing of the summary judgment application has been adjourned and argument has proceeded on whether or not the claim for privilege should be sustained and the affidavit struck out. 

The first and notable point about the email about the email is that it is not headed with a claim for privilege.  Although not determinative it is usual for solicitors who wish to claim privilege over correspondence to make that claim in as many words in the heading of the letter.  In the absence of such a heading, prima facie, the letter is simply that an open letter written by the lawyers of the plaintiff to the defendants concerning the claim which the plaintiffs proposed to commence. 

As I have said however, the absence of a claim to privilege is not determinative of the issue as to whether or not the letter is regarded a privileged document.

There are many cases confirming the existence of a privilege claim and the rationale behind such claims is the desirability of parties being able to freely discuss and negotiate the settlement of claims without being hampered in that process by the concern that the very process of negotiation might impede their prospects of success in the event that a negotiated settlement is not achieved.  There is no need to extensively canvas the authorities which support that proposition and I think it will suffice to quote from one of the authorities which was referred to in argument namely Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd & Ors [2003] WASCA 11 [91] where McLure J said:

Statements made without prejudice in an attempt to settle a dispute or action are privileged.  Without prejudice privilege is a joint privilege and thus cannot be waived without the consent of the negotiating parties.  The mere fact that a document is not marked 'without prejudice' is not decisive.  The test is whether the communication was a genuine attempt to settle a dispute.  Rodgers v Rodgers (1964) 114 CLR 608 at 614. If so, the whole course of the negotiations is privileged. South Shropshire District Council v Amos [1987] All ER 340.

There is in truth in my perception no difference between the parties as to the law concerning the law concerning a privileged negotiation, the dispute between the parties arises over whether or not the letter the subject of the dispute is in fact a negotiation which attracts the protection of privilege. 

On that point it is pertinent to consider the case which is advanced in the statement of claim.  In par 16B of the statement of claim it is alleged that the debt and associated interest were repayable on demand.  In par 20 it is alleged that the plaintiff has demanded repayment and the particulars of demand are 'by email sent by the plaintiff to first defendant on 23 January 2018 and subsequently'.  Copies of the relevant email are exhibited to the affidavit of the plaintiff lodged on 29 May 2018.  The text of that email is as follows:

Can you please advise re the payment plan you and [sic] promised to start in January. 

I need to know the amount per month and when the first payments will start.

The payments need to go into our Citibank account. 

The email is addressed to the first-named defendant and was forwarded by the plaintiff.  It is argued by the defendant that whatever the email may signify it cannot possibly be characterised as a demand.  I agree. 

The same cannot be said of the email which is under scrutiny in the course of this application.  It is plainly in part a demand as is evident by the third sentence of the body of the letter which states 'in the absence of agreement between the parties as to the terms of the loan, the loan is, at law, payable on demand'.  And the final sentence of the letter which is in the following terms 'in the meantime, you should consider this letter to be a demand for payment'.  In the course of argument counsel for the plaintiff withdrew the objection to the admissibility of the letter insofar as it constituted a demand.  Exactly which parts of the letter were conceded to be admissible was not clear to me because it is necessary in order to understand what is being demanded to have regard to much of the text of the email.

I find it difficult to understand the stance which is taken by the plaintiff in regard to the claim for privilege.  It appears to me that the cause of action has been pleaded in a way which pivots upon a demand being made and that demand being unsatisfied.  On the evidence before me the only document which qualifies as a demand is the letter the admissibility of which is challenged by the plaintiff.  In the absence of evidence that a demand was made it is difficult to see how the plaintiff's summary judgment application can succeed. 

The matters which I consider to be central to my decision are these:

1.There is no evidence presented that it was intended that the email was to be on a without prejudice basis.

2.The case has been pleaded on the basis that the monies claimed from the defendants are due on demand and the only cogent evidence that I am able to be see of the existence of such a demand is the letter which is the subject to the objection.

3.It is perfectly legitimate for a solicitor to write an open letter on behalf of a client and there is no evidence that the letter was ever intended to be privileged and the argument advanced by the plaintiff requires an inference rather than direct evidence. 

For these reasons I am of the view that the email is a demand for payment together with an indication of the manner in which the plaintiff would be content to see that demand satisfied.  I am also of the view that the email, on the evidence which is being presented to me, is the demand upon which the plaintiff relies in his pleading and as such is not properly the subject of a claim for privilege.

Accordingly, it is my conclusion that the claim for privilege should be rejected and I rule that the affidavit of Bethin Rachel Beck lodged on 9 August 2018 with its exhibited materials should be admitted into evidence and the application to have it struck out dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

AC
COURT OFFICER

28 SEPTEMBER 2018