Lombe v Pollak

Case [2004] FCA 264

FEDERAL COURT OF AUSTRALIA

Lombe v Pollak [2004] FCA 264

EVIDENCE – common law waiver of privilege - whether the holder of the privilege has acted inconsistently with the maintenance of confidentiality of the communication in an examination under the Bankruptcy Act and in a pleading.

Bankruptcy Act 1966 (Cth) ss 77A, 81 & 121

Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 referred to
Data Access Corporation v Powerflex Services Pty Ltd (1994) AIPC 91-112 not followed
DSE (Holdings) Pty Limited v Intertan Inc [2003] FCA 384 applied
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 applied
Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 referred to
Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 540 referred to
Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 referred to
Mann v Carnell (1999) 201 CLR 1 applied
Re Compass Airlines Pty Ltd (1992) 35 FCR 447 referred to
Spedley Securities Ltd (In Liq) v Bank of New Zealand (1991) 26 NSWLR 711 applied in part
Telstra Corp Ltd v BT Australasia Pty Limited (1998) 85 FCR 152 referred to
Torcasio Developments Pty Ltd v County Park Developments Pty Ltd (unreported, Supreme Court of Victoria, 9 September 1991) referred to
Wardrope v Dunn [1996] 1 Qd R 224 not followed
Worrell v Woods (1999) 90 FCR 264 applied

J D Heydon Cross on Evidence, 6th Aust edn, Butterworths 2000, referred to

DAVID JOHN FRANK LOMBE (AS TRUSTEE OF THE BANKRUPT ESTATE
OF JOSEPH POLLAK) v AANA POLLAK (ALSO KNOWN AS
ANNA POLLAK AND AANA CZEIZLER)

N7209 of 2003

JACOBSON J
SYDNEY
18 MARCH 2004


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 7209 of 2003

BETWEEN:

DAVID JOHN FRANK LOMBE
(AS TRUSTEE OF THE BANKRUPT ESTATE
OF JOSEPH POLLAK)
APPLICANT

AND:

AANA POLLAK (ALSO KNOWN AS
ANNA POLLAK AND AANA CZEIZLER)
RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

18 MARCH 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.

Until further order, the Trustee is not to be permitted to have access to those documents produced in answer to the subpoena to Mr Peach being the documents listed in paragraph 9 of the affidavit of Mr King filed on 28 November 2003 (other than the documents referred to in paragraph 11 over which no claim for privilege is made). 



2.

That access be granted to the Trustee to the letter of advice from Musgrave Peach to Mrs Pollak dated 5 December 1994 produced in answer to the subpoena.



3.No order as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 7209 of 2003

BETWEEN:

DAVID JOHN FRANK LOMBE
AS TRUSTEE OF THE BANKRUPT ESTATE
OF JOSEPH POLLAK
APPLICANT

AND:

AANA POLLAK ALSO KNOWN AS
ANNA POLLAK AND AANA CZEIZLER
RESPONDENT

JUDGE:

JACOBSON J

DATE:

18 MARCH…

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AGLC
Lombe v Pollak [2004] FCA 264
Case
[2004] FCA 264
Decision Date

CaseChat Overview and Summary

Lombe v Pollak involved a dispute between the Trustee and Mrs Pollak regarding the waiver of legal professional privilege on certain documents. The central issue was whether Mrs Pollak had waived privilege on a letter from her solicitors, Musgrave Peach, by not objecting to detailed questioning about its contents during her s 81 examination. The Trustee argued that the lack of objection during the examination indicated a waiver of privilege, while Mrs Pollak maintained that privilege had not been waived. The court needed to determine whether the absence of an objection during the examination constituted a waiver of privilege.

The court found that the failure to object during the s 81 examination did not amount to a waiver of privilege. The court reasoned that Mrs Pollak had not been put on notice that the questioning about the contents of the Musgrave Peach letter could potentially lead to a waiver of privilege. The court also noted that Mrs Pollak’s solicitors had consistently asserted privilege over the letter both before and after the examination. Given these circumstances, the court concluded that there was no basis to find that privilege had been waived.

Consequently, the court ordered that the Trustee was not to have access to certain documents produced in response to a subpoena, except for the Musgrave Peach letter, which the Trustee was permitted to access. No order was made regarding costs.

Orders

Orders of the court

1.

Until further order, the Trustee is not to be permitted to have access to those documents produced in answer to the subpoena to Mr Peach being the documents listed in paragraph 9 of the affidavit of Mr King filed on 28 November 2003 (other than the documents referred to in paragraph 11 over which no claim for privilege is made).

2.

That access be granted to the Trustee to the letter of advice from Musgrave Peach to Mrs Pollak dated 5 December 1994 produced in answer to the subpoena.

3. No order as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The Trustee submits that Mrs Pollak has waived privilege on the MP letter by failing to claim privilege when she was examined in some detail about the terms of the MP letter at the s 81 examination. The Trustee points out that Mrs Pollak was represented by senior counsel at the examination and that he took no objection to the questions asked of her. By contrast, Mrs Pollak’s solicitors claimed privilege for the MP letter before and after the s 81 examination and stated that privilege had not been waived.The Deed and the evidence about it at the s 81 examination The Deed recites that Mrs Pollak has from time to time advanced monies to Dr Pollak for use by him in his business and other ventures. The Deed also recites that Dr Pollak has agreed to pay Mrs Pollak interest on the monies advanced at the rate paid by the Commonwealth Bank of Australia on savings investment passbook accounts. Recital C is as follows:-“As at the date of this Deed the total outstanding monies advanced by the Lender to the Borrower together with accrued interest amounts to $204,605.00 (the ‘Outstanding Amount’).” The Deed recites that Mrs Pollak has requested Dr Pollak to repay the outstanding amount, that Dr Pollak and Mrs Pollak are the registered proprietors as joint tenants of the properties, that the properties have been independently valued at $1,125,000, that Dr Pollak has borrowed $850,000 from the Commonwealth Bank of Australia secured by first mortgage over the properties (“the mortgage”) and that Dr Pollak has agreed to transfer his interest in the properties to Mrs Pollak in part repayment of the outstanding amount. Clause 2.1 provides for Dr Pollak to transfer his interest in the properties to Mrs Pollak subject to the mortgage. Clause 2.2 provides:-“Upon completion of the Transfer the Outstanding Amount shall be reduced by the sum of $139,007.00 (representing an amount equal to one half of the difference between the value of the Properties and the amount currently outstanding under the Mortgage.” At the examination, Mrs Pollak was asked about the loans which were the source of the indebtedness stated as the outstanding amount. She was also asked how interest was calculated. The following exchange took place:-“When you came to arrive at this figure of 204,000-odd that is on the face of the deed, what did you do to calculate how much your husband owed you insofar as it comprised the interest going back to 1981?---I did not do the calculation. They were done by a solicitor.The solicitor would need, wouldn’t he, or she, information as to how much that interest was to do those calculations --- Yes.Did you provide the solicitor with those ---? --- I asked the solicitor to find out from the Commonwealth Bank what the investment account interests were over a number of years and to average them out.Going back from 1995 right back to 1981?---I cannot remember the specific years that he actually looked at but there were quite a number of years. I can’t be specific on exactly how many years, I can’t remember.Can you tell us approximately how much the interest was that formed part of this $204,000?---I cannot.”

Decision

Reasons for decision

JACOBSON J

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Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

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