Michael Wilson and Partners Limited v Robert Colin Nicholls

[2009] NSWSC 763

CITATION:	Michael Wilson and Partners Limited v Robert Colin Nicholls & Ors [2009] NSWSC 763
HEARING DATE(S):	15/6/09, 16/6/09, 23/6/09, 24/06/09, 29/06/09, 30/06/09, 13/07/09, 14/07/09, 23/07/09, 24/07/09, 27/07/09 - 30/07/09
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Einstein J
EX TEMPORE JUDGMENT DATE:	10 August 2009
DECISION:	See paragraph numbers 26 - 30.
CATCHWORDS:	Practice and procedure - Notices to produce - Legal professional privilege - Waiver of privilege - Weighing exercise - Application of Evidence Act 1995 to matters ancillary to proceedings before the court - Effect in New South Wales of changes to the rules concerning pre-trial inspection of documents including notices to produce - Legal professional privilege as a substantive right - Legal professional privilege applies to the advice of foreign lawyers-Onus for assertion of legal professional privilege
LEGISLATION CITED:	Evidence Act 1995 Supreme Court Rules Uniform Civil Procedure Rules 2005
CATEGORY:	Procedural and other rulings
CASES CITED:	Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 Akins v Abigroup Ltd (1998) 43 NSWLR 539 Baker v Campbell (1983) 153 CLR 52; 49 ALR 385 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 Bailey v Department of Land and Water Conservation [2009] NSWCA 100 Esso Australia Resources Ltd v Commissioner of Taxation (1998) 83 FCR 511 Esso Australia Resources v Commissioner of Taxation [1999] 201 CLR 49 Grant v Downs (1976) 135 CLR 674 Grofam Pty Ltd v ANZ Banking Group (1993) 45 FCR 445 Harris Scarfe Ltd (Receivers and Managers Appointed) (in liq) v Ernst & Young (No 10) (2006) 204 FLR 165 In the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 543 Kennedy v Wallace [2004] 142 FCR 185 Mann v Carnell (1999) 74 ALJR 378; 201 CLR 1 Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 National Crime Authority v S (1991) 100 ALR 151; 29 FCR 203 New Cap and Reinsurance Corporation v Renaissance Reinsurance [2007] NSWSC 258 Northern Territory v GPAO (1999) 196 CLR 553 Ritz Hotel Ltd v Charles of the Ritz Ltd (No 4) (1987) 14 NSWLR 100 Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 277 Trade Practices Commission v Port Adelaide Wool (1995) 60 FCR 366 Waterford v The Commonwealth (1987) 163 CLR 54, 71 ALR 673
PARTIES:	Michael Wilson & Partners (Plaintiff) Robert Colin Nicholls (First Defendant) David Ross Slater (Second Defendant) Temujin Services Limited (Third Defendant) Temujin International Limited (Fourth Defendant) Temujin International FZE (Fifth Defendant) Shaikenov & Partners, LLP (Sixth Defendant) Scoulton Holdings Limited (Seventh Defendant)
FILE NUMBER(S):	SC 50151/06
COUNSEL:	Mr M Walton SC, Mr J Carney (Plaintiff) Mr G McGrath, Mr A Fox (First Defendants) Mr G Lindsay SC, Mr A Fox, Mr S Adair (Second to Fifth Defendants)
SOLICITORS:	Clayton Utz (Plaintiff) Henry Davis York (First to Fifth Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Monday 10 August 2009 ex tempore
Revised 11 August 2009

50151/06 Michael Wilson & Partners v Robert Colin Nicholls & Ors

JUDGMENT

The alleged abuse of process of this Court and ancillary considerations

1 In previous judgments the Court has made clear that there are being heard together:

i. these proceedings brought by Michael Wilson and Partners Ltd;

ii. the defendants’ contention that the proceedings constitute an abuse of process.

The notice to produce

2 Towards the conclusion of the cross examination of Mr Michael Wilson by Mr Lindsay SC, an issue arose following the defendants having served a notice to produce particular documents. The notice to produce had been dated 7 July 2009 [and became MFI P 17]. It required the plaintiff to produce all documents recording, referring or relating to any proposed or actual criminal complaint made in Switzerland in the period from 20 December 2006 to date against a number of entities and persons including Mr Emmett and Mr Risby.

3 The plaintiff in its formal response stated as follows:

i. that in respect of documents sought under sub paragraphs (a), (b), (c), (f) and (g), the plaintiff had no knowledge information or belief as to whether any such documents existed;

ii. that in relation to those documents not produced by the plaintiff under sub- paragraphs (d) and (e), those documents constituted communications between the plaintiff and its Swiss and other legal advisers and were subject to legal professional privilege.

4 A fairly extensive segment of the transcript of 29 July 2009 identifies the respective cross contentions of the parties in relation to the matter. It is inappropriate to revisit those sections of the transcript save to observe that:

i. Mr Lindsay identified the perceived relevance of having a full and proper answer to the notice to produce as going to the defendants’ abuse of process case . As I understood the contention it was to be:

a) that the plaintiff secured from this Court, leave to use documents within the control of this Court for a complaint to the Swiss authorities.

b) that in fact that complaint when made was based upon a false representation to the Swiss authorities of the nature of the relationship between the plaintiff and Mr Emmett by the plaintiff.

c) that these matters were not disclosed to the Court on the occasion when an ex parte application for relief was made.

d) that the alleged abuse of the process of this Court was that the plaintiff had failed to fully disclose to this Court matters which would have been germane to its decision as to whether or not to exceed to the ex parte application, and principally had not disclosed any proposed wrongdoing in and about its suggested intent to manufacture a case that might be presented to the Swiss authorities as management fraud.


ii. The issue first surfaced late in Mr Lindsay's cross examination in terms of his seeking to elicit from Mr Wilson certain matters which had apparently also been put to him in the United Kingdom arbitration.

iii. Centrally the defendant sought to ascertain the precise genealogy said to have involved Mr Wilson in terms of the process taken prior to the complaints being forwarded to the Swiss authorities.

iv. The court was informed that an issue concerns the identification of the very first English translation seen by Mr Wilson, and a requirement to examine the German translations or iterations thereof.

v. Mr Wilson gave evidence in these present proceedings that prior to his having signed the German version of the complaint, he had had a form of that version in English to examine. Whilst it is difficult to explain in short fashion why the issue may have been important, it suffices to make clear that the defendant's contention is that in broad terms the allegations made against Mr Emmett in Switzerland were or included an allegation that he had been guilty of management fraud so as to enliven powers to engage Swiss laws.

5 Orders had been made on 15 July 2009 one of which was that subject to further order, the claims for relief made under the heading "abuse of process" in the notice of motion filed by the defendants on 13 July 2009 be heard together with the trial of the proceedings. The defendant's case relevantly in this regard had formulated the abuse of process claims now under consideration qua the Switzerland complaint as follows:

i. the plaintiff has, without notice to the defendant or Mr Emmott used the processes of this Court in aid of a criminal complaint against Mr Emmott , in a foreign jurisdiction, designed to expose Mr Emmott and the defendants to criminal investigation.

ii. In or about March, April, June and October 2007, the plaintiff obtained ex parte confidential orders from the Court to facilitate the making of a Criminal Complaint overseas without disclosing to the Court that the terms of the Complaint proposed to be made, (and made) falsely asserted that Mr Emmott was the managing director of the plaintiff in Kazakhstan and misrepresented the terms of [particular causes of the December 2001 agreement between Mr Emmett and the plaintiff on are then referred]... The plaintiff induced the Court to maintain the confidentiality of orders made ex parte without disclosing to the Court the terms of the complaint as made or discrepancies between those terms and the agreement dated 7 December 2001. At no time since the complaint was filed with the Swiss prosecutor has the plaintiff brought that discrepancy to the attention of the court or admitted it.

The plaintiff waives privilege to a particular document

6 In any event on 29 July Mr Walton [transcript 751] indicated that he had instructions to waive any privilege that might exist in respect of a 32 page document described as the third draft of 10 April 2007 written in English. That document became MFI P 18.

7 Mr Walton had earlier in further answer to the notice to produce indicated that he had five volumes of material in court which documents were said to be subject to a claim to legal professional privilege.

The application of the Evidence Act 1995 to matters ancillary to proceedings before the Court

8 I do not understand the following propositions to be exceptional:

i. A question which vexed various first instance judges and intermediate appellate courts was the precise reach of the provisions of the Act. In terms, the Act applies only to proceedings in court: s4(1). However, the notion - which may be traced back to the decisions of McLelland CJ in Eq in Telstra Corporation v Australis Media Holdings ([No 1) (1997) 41 NSWLR 277 and Branson J in Trade Practices Commission v Port Adelaide Wool (1995) 60 FCR 366 - that the Act had an indirect or flow on effect to pre-trial proceedings, such as the issuing of a subpoena, or notice to produce, the answering of interrogatories, or the discovery of documents, obtained the approval of the NSW Court of Appeal in Akins v Abigroup Ltd (1998) 43 NSWLR 539, and of the Full Court of the Federal Court in Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360. The latter decision was, however, overruled by a majority of a five member Full Court of the Federal Court in Esso Australia Resources Ltd v Commissioner of Taxation (1998) 83 FCR 511.

ii. The question whether the Act has an application by analogy to matters ancillary to proceedings in Court was resolved in the negative by the High Court in three decisions. Northern Territory v GPAO (1999) 196 CLR 553, Mann v Carnell (1999) 74 ALJR 378 and Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 74 ALJR 339.

iii. The effect in New South Wales of changes to the rules [originally the Supreme Court Rules (Part 23, Rule 1 (c), and later as transported into the Uniform Civil Procedure Rules 2005 ] extend to the pre-trial inspection of documents including notices to produce. The effect of the rules is that notwithstanding the decisions of the High Court of Australia referred to above, when it comes to the application of legal professional privilege in most instances in connection of litigation - both in Court and in matters ancillary to it - it is to the Act that one must now look. [cf New Cap and Reinsurance Corporation v Renaissance Reinsurance [2007] NSWSC 258 at 15] [cf Section 131A of the Evidence Act 1995 ] [See also Part 34 UCPR].

9 Nor do I see that there is any substantive difference between the relevant provisions of the Act and their Common Law analogues.

Legal professional privilege as a substantive right

10 Legal professional privilege is a rule of substantive law and not merely a rule of evidence: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 per Gleeson CJ, Gummow, Gaudron and Hayne JJ at 552 [9]-[10]. It is not merely a rule of substantive law, “it is an important common law right or, perhaps more accurately, an important common law immunity”: at 553[11].

11 McHugh J described legal professional privilege in the same case at 563 [44] as “a fundamental right or immunity”. Kirby J at 575-576 [85] referred to it as “a basic doctrine of the law” and a “practical guarantee of fundamental rights”.

12 Accordingly, as a substantive common law right or immunity, legal professional privilege is not something the Court can simply abrogate as a matter of judicial discretion.

Legal professional privilege applies to the advice of foreign lawyers

13 Allsop in Kennedy v Wallace [2004] 142 FCR 185 at 220-223 [198]-[215] (with whom Black CJ and Emmett J at [62] agreed) stated that because legal professional privilege is a fundamental right and because members of the community may well need to seek the assistance of foreign lawyers this entailed the extension of the privilege to foreign lawyers. As his Honour noted at [210] this position is in conformity with the authorities, in particular the decision of McLelland J in Ritz Hotel Ltd v Charles of the Ritz Ltd (No 4) (1987) 14 NSWLR 100, at 102, and the decision of the Full Federal Court in Grofam Pty Ltd v ANZ Banking Group (1993) 45 FCR 445, at 455.

Legal professional privilege may be determined following inspection of documents by the Tribunal without a waiver of privilege

14 Rule 1.8 of the UCPR provides:

“ The court may determine any question arising under these rules (including any question of privilege) and, for that purpose:

(a) may inspect any document in relation to which such a question arises, and

(b) if the document is not before the court, may order that the document be produced to the court for inspection. ”

15 The exercise of a court’s power to determine claims for privilege was condoned, even encouraged, in Grant v Downs (1976) 135 CLR 674 at 689, per Stephen, Mason and Murphy JJ.

16 It is a common practice for courts throughout Australia to exercise this power. A discussion of the rule, its history and practice is set out in the judgment of Debelle J in Harris Scarfe Ltd (Receivers and Managers Appointed) (in liq) v Ernst & Young (No 10) (2006) 204 FLR 165 at 173-179 [25]-[42]. The discussion of the authorities in that judgment makes it clear that inspection should only take place where it is necessary to the determination of the question of privilege.

17 Section 133 of the Evidence Act 1995 contains an equivalent rule. It reads:

“If a question arises under this Part relating to a document, the court may order that the document be produced to it and may inspect the document for the purpose of determining the question.”

18 In Bailey v Department of Land and Water Conservation [2009] NSWCA 100 the Court of Appeal clearly stated that s. 133 permitted judicial inspection of the documents to determine a claim for privilege: see per Tobias JA at [57]-[61]; also per Allsop P at [2]; and per Hodgson JA at [6].

19 In Esso Gleeson CJ, Gaudron and Gummow JJ observed at 70 [52] that a court should not be hesitant to exercise its power to examine documents.

Onus for assertion of legal professional privilege

20 It is accepted that the party claiming privilege bears the onus of establishing the basis of the claim: Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 at 337; In the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 543 at [24]), and that the party claiming privilege must establish the facts from which the court can determine that the privilege is capable of being asserted: National Crime Authority v S (1991) 100 ALR 151 at 159.

21 It is to be noted that“lawyer” for the purpose of s.118 includes under s.117 “a natural person who, under the law of a foreign country, is permitted to engage in legal practice in that country”.

The evidence given by Mr Radosavljevic

22 Mr Radosavljevic, a lawyer in the employ of the plaintiff, has deposed as follows:

6. One task in which I was involved between about January 2007 and May 2009 related to MWP obtaining the assistance of the law firm Baer & Karrer in Zurich, Switzerland, in connection with MWP filing a criminal complaint against Mr Emmott and Mr Risbey in Switzerland (the Baer & Karrer Period).

7. I worked with Mr Wilson during the Baer & Karrer Period in connection with the obtaining of Baer & Karrer's legal advice in relation to:


(a) potentially making a criminal complaint in Switzerland, the preparation of the complaint and the subsequent developments in connection with the complaint; and

(b) a civil claim for losses that could run in parallel with the criminal proceedings.


8. A complaint was in fact filed on about 13 April 2007. A copy of the complaint, which was in German, together with a copy of the final English draft is annexed hereto and marked "A". A civil claim for losses suffered by MWP related to the subject matter of the complaint was filed on 16 May 2007, a copy of which is annexed hereto and marked "B".

9. I have had numerous discussions, meetings and telephone conversations with Mr Wilson during the Baer & Karrer Period about various aspects of the investigations which MWP was undertaking and the steps which MWP wanted Baer & Karrer to take in connection with the complaint. I was also involved in numerous telephone conferences with lawyers at Baer & Karrer.

MWP Staff involved in obtaining advice from Baer & Karrer

10. The following persons employed by MWP during the whole of or part of the Baer & Karrer Period included:


(a) Michael Wilson (director and principal lawyer);

(b) Christopher LaHatte (lawyer);

(c) Paul Mallon (litigation assistant);

(d) Aida Zhumyrova (secretary);

(e) Amitava Bhattacharya (litigation assistant /accountant);

(f) Andrew Paul Sherry (accountant); and

(g) myself.


11. Ms Aida Zhumyrova, was employed by MWP as Mr Wilson's secretary during the Baer & Karrer Period. Mr Wilson would sometimes have her send out from her own email address emails which he had prepared. Some of the documents which I have reviewed for the purpose of this Affidavit were emails sent by or to Ms Zhumyrova with Mr Wilson's authority.

Personnel at Baer & Karrer and other lawyers engaged by MWP

12. During the Baer & Karrer Period, the personnel at Baer & Karrer with whom MWP corresponded regarding to the legal services which Baer & Karrer were providing to MWP included:


(a) Tina Wuestemann (principal lawyer);

(b) Barbara Lautenschlager (lawyer);

(c) Paula Alonso (lawyer);

(d) Flavia Bieri (lawyer);

(e) Sandra Hunziker; and

(f) Silvia Marcaccini.

I do not know what positions were held by Sandra Hunziker and Silvia Marcaccini.
13. In addition to obtaining advice from and communicating with Baer & Karrer during the Baer & Karrer Period, MWP also sought advice from, and communicated with, other lawyers and law firms (many of whom were in other jurisdictions) regarding matters which were related to or ancillary to MWP's investigations into the conduct of Mr Emmott and Mr Risbey and the making by MWP of a criminal complaint against them in Switzerland. The personnel at those other law firms included:


(a) Sid Wang (partner), Kate Dixon, David Sim and Kate Evans (formerly Donohoe) (all lawyers) of Clayton Utz, Sydney;

(b) Mathew Walton SC, Barrister, Sydney;

(c) Lawrence Cohen QC, Barrister, London;

(d) Dr Martin Neese, Special Counsel, Switzerland;

(e) James Drake, Barrister, London;

(f) Sophie Eyre (partner), Lucas Pitts (lawyer) and Christine Davidson (secretary) of Lane & Partners, London;

(g) Phillip Kite (partner) and Andrew Thorp (lawyer) of Harney, Westwood & Riegels, British Virgin Islands; and

(h) Jo Vinsen (lawyer) of Fox Williams, London.
In this affidavit where I use the expression "Swiss Lawyers" I am referring to Baer & Karrer and Dr Martin Neese.

23 The plaintiff has put before the court evidence by way of a 'Schedule of Privileged Documents" which schedule has been reviewed by Mr Radosavljevic. He has given evidence in relation to the five lever arch folders earlier referred to in these reasons. He has deposed that the communications set out in those documents may be conveniently divided into the following categories:

(a) Communications which relate to MWP's initial request for legal advice from Baer & Karrer regarding a potential criminal complaint in Switzerland and the service in Switzerland of freezing orders obtained in the BVI. Those documents are at items 1 to 18 in the Schedule;

(b) Communications between MWP and its lawyers regarding drafts of the criminal complaint, documents to be used as exhibits to the criminal complaint, a Power of Attorney from Bear & Karrer to MWP. Those documents are at items 19 to 42 in the Schedule. The document at item 24 is an email sent by Tina Wuestemann to MWP, its lawyers and the Receiver for Myrzaly Limited and Hakkisan Finance Corporation Limited, Mr William Tacon.

(c) Communications between MWP and its lawyers regarding various drafts and the final version of the "Participation of the Injured Party in Criminal Proceedings". MWP had to prepare this document so that a civil claim for losses could run in parallel with the criminal proceedings. Those documents are at items 43 to 54 in the Schedule.

(d) Communications between MWP and its lawyers regarding updates on the progress of the criminal proceedings and advice on steps to be taken. Those documents are at items 55 to 61 in the Schedule.

(e) Communications between MWP and its lawyers regarding the disclosure in Switzerland of the Suspicious Activity Report filed by MWP with the Serious Organised Crime Agency in the United Kingdom. Those documents are at items 62 to 65, 67 to 70, 75 and 76 in the Schedule.

(f) Communications between MWP and Baer & Karrer regarding documentation which MWP requested Baer & Karrer use for providing updates to the Swiss Prosecutor. Those documents are at items 66, 79, 80, 83 and 84 in the Schedule.

(g) Communications between MWP and Baer & Karrer regarding updates received by Baer & Karrer from the Swiss Prosecutor and Baer & Karrer's advice about MWP's next steps. Those documents are at items 71 to 74, 77, 81 and 82 in the Schedule.

(h) Communications between MWP and its Swiss Lawyers regarding submissions to the Prosecutor made by Mr Risbey's lawyers, Mr Risbey's request to partially lift freezing orders made against certain Swiss accounts of certain companies which he operated, the Prosecutor's subsequent decree and MWP's appeal against that decree. These documents are at items 85 to 94 in the Schedule.

(i) Communications between MWP's lawyers, copied to MWP, regarding the disclosure in Switzerland of the Suspicious Activity Report filed by MWP with the Serious Organised Crime Agency in the United Kingdom. These documents are at items 85A, 95 to 98 and 100 in the Schedule.

(j) Email from Baer & Karrer to MWP regarding the letter of the Swiss Prosecutor to the High Court of Zug re the partial lifting of the freezing orders against the Swiss accounts of certain of Mr Risbey's companies. This document is at item 99 of the Schedule.

(k) Email from Baer & Karrer to MWP regarding submissions of Mr Risbey's lawyers regarding MWP's appeal to the partial lifting of the Freezing orders. This document is at item 101 of the Schedule.

(l) Communications between MWP and its lawyers regarding forcing disclosure by Mr Risbey of Hakkisan's and Myrzaly's financial dealings. These documents are at items 102, 103 and 106 to 108 of the Schedule.

(m) Communications between MWP and its Swiss Lawyers regarding MWP's Power of Attorney issued to Mr Neese. These documents are at items 104 and 105 of the Schedule.

(n) Communications between Baer & Karrer and Clayton Utz, copied to MWP and other lawyers, regarding confidentiality regime issues. These documents are at items 109 and 110 of the Schedule.

(o) Communications between MWP and its Swiss Lawyers regarding the remedies available to MWP under Swiss law as a result of assistance given by Mr Risbey to the NSW Defendants to circumvent the NSW and BVI Freezing orders through Temujin Holdings Limited. Those documents are at items 111 to 113 and 115 to 117 in the Schedule.

(p) Communications between MWP and its lawyers regarding indicators of further misconduct by Mr Risbey and appropriate submissions to the Prosecutor. Those documents are at items 114 and 118 to 124 in the Schedule.

(q) Communications between MWP and its lawyers regarding further submissions to be filed with the Swiss Prosecutor regarding MWP's proceeding in the Bahamas, BVI and Colorado. Those documents are at items 125 to 127 in the Schedule.

(r) Communications between MWP and its Swiss Lawyers regarding Prosecutor's Decree ordering partial closure of the criminal investigation and MWP's further submissions. Those documents are at items 128 to 130 in the Schedule.

(s) Communications between MWP and Baer & Karrer regarding secret commissions received by Mr Emmott, his unauthorised drawing from MWP's accounts and breaches of fiduciary duty. Those documents are at items 131 to 134 in the Schedule.

(t) Email from Baer & Karrer to MWP regarding MWP's appeal against the Prosecutor's costs award. This document is at item 135 in the Schedule.

(u) Communications between MWP and its Swiss Lawyers regarding the progress of the Swiss criminal complaint proceedings and MWP's next steps. These documents are at items 136 to 151 of the Schedule.

(v) Email from Baer & Karrer to MWP regarding allegation by Mr Risbey's lawyers that MWP has been struck of the BVI Register of Companies. This document is at item 152 of the Schedule.

(w) Communications between MWP and its Swiss Lawyers regarding further letters to the Prosecutor and documentary evidence. These documents are at items 153 to 160 in the Schedule.

(x) Communications between MWP and its Swiss Lawyers regarding the criminal complaint and MWP's next steps. These documents are at items 161 to 163 in the Schedule.

(y) Communications between MWP and its Swiss Lawyers regarding allegations by Mr Risbey's lawyers that MWP was not in good standing and MWP's response. These documents are at items 164 to 167 in the Schedule.

(z) Communications between MWP and its lawyers regarding lifting of confidentiality orders in the NSW proceedings. These documents are at items 168 to 174 in the Schedule.

(aa) Communications between MWP and Baer & Karrer regarding the status of the Swiss criminal proceedings. These documents are at items 175 and 177 in the Schedule.
(bb) Email from Baer & Karrer to MWP regarding MWP's successful appeal against the Prosecutor's costs award. This document is at item 176 in the Schedule.

24 Mr Radosavljevic has also deposed as follows:

Because of my involvement in the above matter I can say that all of the documents listed above constitute communications between MWP and its lawyers or records of such communications which were and are kept confidential and created for the sole purpose of seeking or receiving legal advice in connection with the criminal complaint and associated civil claim for compensation brought in Switzerland.

The weighing exercise

25 There is no doubt but that there is an important weighing exercise whenever questions of legal professional privilege or waiver thereof arise in a litigious setting. The matter was carefully treated with in Esso Australia Resources v Commissioner of Taxation [1999] 201 CLR 49, Gleeson CJ, Gaudron and Gummon JJ restating the rationale for legal professional privilege at 64-65 [35]:

“ Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court. In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisers, which are not protected from compulsory disclosure. The rationale of the privilege has been explained in a number of cases, including Baker v Campbell , and Grant v Downs itself. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. In Waterford v The Commonwealth , Mason and Wilson JJ explained that legal professional privilege is itself the product of a balancing exercise between competing public interests and that, given the application of the privilege, no further balancing exercise is required. As Deane J expressed it in Baker v Campbell , a person should be entitled to seek and obtain legal advice in the conduct of his or her affairs, and legal assistance in and for the purposes of the conduct of actual or anticipated litigation, without the apprehension of being prejudiced by subsequent disclosure of the communication. The obvious tension between this policy and the desirability, in the interests of justice, of obtaining the fullest possible access to the facts relevant to the issues in a case lies at the heart of the problem of the scope of the privilege. Where the privilege applies, it inhibits or prevents access to potentially relevant information. The party denied access might be an opposing litigant, a prosecutor, an accused in a criminal trial, or an investigating authority. For the law, in the interests of the administration of justice, to deny access to relevant information, involves a balancing of competing considerations.

Decision

26 The plaintiff has made good its proposition that subject to any question of waiver, the categories of documents referred to by Mr Radosavljevic, prima facie establish legal professional privilege. The seminal question concerns whether, if so to what extent and in respect of what documents, the plaintiff has waived that privilege.

27 As I see it that question can only be answered in terms of the defendant's abuse of process case earlier explained in relation to the suggestion of a deliberate intent [undisclosed to this Court] to mislead the Swiss authorities by passing to them a doctored set of relevant materials.

28 Importantly to be noted is the fact that the alleged abuse of process is put as an abuse of the process of the Supreme Court of New South Wales.

29 In these circumstances it is clear that the plaintiff has waived privilege to the following classes of document:

i. any documents in the possession, power and control of the plaintiffs which reveal the terms of the first initial complaint. However my understanding is that the plaintiffs have already discharged that obligation with the production of MFI P 18;

ii. the documents described in categories (a), (b), and (c) in the above described schedule of so-called privileged on documents. That is to say the documents described as items 1 to 18,19 to 42, and 43 to 54;

iii. the documents together with any attachments described:


(a) in box 66 at page 77 of annexure C to the 30 July affidavit;

(b) in box 134 at page 81 of annexure C to the 30 July affidavit;

(c) in box 162 at page 83 of annexure C to the 30 July affidavit.

30 Whether or not the plaintiff has waived privilege in respect of the numerous other documents summarised in the above described affidavit will be made clear if and when the court directs that the other documents summarised above are to be made available to the court for its private inspection. At this stage of these proceedings counsel for the defendant to my understanding has objected to the court inspecting those further documents, my principal understanding currently being that that objection is based on the proposition that the defendants should first have a proper opportunity to inspect the documents in respect of which I have indicated there has been a clear waiver of privilege. As I have understood Mr Lindsay in particular, he contends that it may be that following the defendant’s inspection of the documents which I have indicated in respect of waiver having occurred, the defendants may not pursue with the Court any intent that they should have access to the additional documents. In which case, as I have understood Mr Lindsay, it would be otiose for me presently to be reading five volumes of material arguably to no end.

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