FEDERAL COURT OF AUSTRALIA
Mitic v OZ Minerals Limited [2015] FCA 1152
Citation: Mitic v OZ Minerals Limited [2015] FCA 1152 Parties: TOBIAS MITIC v OZ MINERALS LIMITED (ACN 005 482 824);
OZ MINERALS LIMITED (ACN 005 482 824) v ALLENS (A FIRM) (ABN 47 702 595 758);
ALLENS (A FIRM) (ABN 47 702 595 758) v GRANT SAMUEL & ASSOCIATES PTY LTD (ACN 050 036 372), ANTHONY CHARLES LARKIN, DEAN PRITCHARD, RICHARD KNIGHT, ANTHONY BARNES, OZ MINERALS HOLDINGS LIMITED (ACN 101 657 309), OWEN HEGARTY, BRIAN JAMIESON, RONALD BEEVOR, BARRY CUSAK, JEFFREY SELLS, CLAYTON UTZ (A FIRM) (ABN 35 740 217 343) and OZ MINERALS LIMITED (ACN 005 482 824);
OZ MINERALS LIMITED (ACN 005 482 824) v GRANT SAMUEL & ASSOCIATES PTY LTD (ACN 050 036 372), ANTHONY CHARLES LARKIN, DEAN PRITCHARD, RICHARD KNIGHT, ANTHONY BARNES, OZ MINERALS HOLDINGS LIMITED (ACN 101 657 309), OWEN HEGARTY, BRIAN JAMIESON, RONALD BEEVOR, BARRY CUSAK, JEFFREY SELLS and CLAYTON UTZ (A FIRM) (ABN 35 740 217 343)
File number(s): VID 114 of 2014 Judge(s): EDELMAN J Date of judgment: 28 October 2015 Catchwords: PRIVILEGE – legal professional privilege – advice privilege – whether certain documents protected by legal professional privilege – whether privilege waived Cases cited: Australian Hospital Care (Pindara) Pty Ltd v Duggan [1999] VSC 131
AWB Ltd v Cole (No 5) (2006) 155 FCR 30
AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382
Balabel v Air India [1988] Ch 317
Candacal Pty Ltd v Industry Research and Development Board [2005] FCA 649; (2005) 59 ATR 615; 223 ALR 284
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Trade Practices Commission v Sterling [1979] FCA 33; (1979) 36 FLR 244
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501
Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 60 ATR 466
Commonwealth v Vance [2005] ACTCA 35; (2005) 158 ACTR 47
Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325
DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191; (2003) 135 FCR 151
Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233
Gotha City v Sotheby’s [No 1] [1998] 1 WLR 114
Grant v Downs [1976] HCA 63; (1976) 135 CLR 674
GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146
Kennedy v Lyell (1883) 23 Ch D 387
Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185
Lyell v Kennedy (No 3) (1884) 27 Ch D 1
Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1
McKinnon v Secretary, Department of Foreign Affairs and Trade [2004] AATA 1365; (2004) 86 ALD 780
National Crime Authority v S (1991) 29 FCR 203
Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976
Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122
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Details
- AGLC
- Mitic v Oz Minerals Limited [2015] FCA 1152
- Case
- [2015] FCA 1152
- Decision Date
CaseChat Overview and Summary
In the case of Mitic v Oz Minerals Limited, the primary proceeding is a representative action brought by Mr Mitic on behalf of the former shareholders of Zinifex. The shareholders are seeking damages from OZ Minerals, which was formed through a merger between Zinifex and Oxiana Ltd, on the basis of alleged breaches of duty by OZ Minerals, including failures to disclose material information relevant to the merger. The respondents, OZ Minerals, Oxiana, and Clayton Utz, have claimed legal professional privilege over certain documents related to the proceedings. The central issue before the court was whether the redacted parts of the seven representative documents were protected by legal professional privilege.
The court found that the redacted parts of the seven representative documents were clearly privileged. It held that the claims to legal professional privilege over the redacted parts of the seven documents were upheld, subject to certain conditions. The court did not make an order for Mr Mitic to pay the costs of the application, considering that OZ Minerals had abandoned its claims for privilege over a significant number of documents. The court also found that it was strongly arguable that privilege had been waived over passages in two of the documents. The court made several orders, including that OZ Minerals and Zinifex must serve a list of any further Challenged Documents in respect of which they no longer press their claims for legal professional privilege. It also granted liberty to all Challenging Parties to apply for the matter to be relisted for the determination of any remaining claims of legal professional privilege. The court reserved costs with respect to Allens’ challenge to the Zinifex claims for privilege and made no order as to the costs of Mr Mitic’s challenges to OZ Minerals’ claims for privilege.
The court found that the redacted parts of the seven representative documents were clearly privileged. It held that the claims to legal professional privilege over the redacted parts of the seven documents were upheld, subject to certain conditions. The court did not make an order for Mr Mitic to pay the costs of the application, considering that OZ Minerals had abandoned its claims for privilege over a significant number of documents. The court also found that it was strongly arguable that privilege had been waived over passages in two of the documents. The court made several orders, including that OZ Minerals and Zinifex must serve a list of any further Challenged Documents in respect of which they no longer press their claims for legal professional privilege. It also granted liberty to all Challenging Parties to apply for the matter to be relisted for the determination of any remaining claims of legal professional privilege. The court reserved costs with respect to Allens’ challenge to the Zinifex claims for privilege and made no order as to the costs of Mr Mitic’s challenges to OZ Minerals’ claims for privilege.
Orders
Orders of the court
1. By 10 November 2015, OZ Minerals and Zinifex are to serve on all other parties a list of any further Challenged Documents in respect of which they no longer press their claims for legal professional privilege, as a result of their abandoning their privilege claims in respect of various Representative Documents.
2. All Challenging Parties have liberty to apply, on two business days’ notice, for the matter to be relisted for the determination of any remaining claims of legal professional privilege as contemplated by the Court’s Order 10 of 28 September 2015.
3. Costs reserved with respect to Allens’ challenge to the Zinifex claims for privilege.
4. There be no order as to the costs of Mr Mitic’s challenges to OZ Minerals’ claims for privilege.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
These are my reasons in relation to those seven representative documents. For the reasons below, I uphold the claims to legal professional privilege over all the redacted parts of those documents, save for a passage in two documents over which OZ Minerals did not seek to maintain its claim for privilege.Background to the proceedings The primary proceeding is a representative proceeding brought by Mr Mitic. He represents the former shareholders of Zinifex. On 1 July 2008, by a scheme of arrangement, Zinifex merged with Oxiana Ltd. The merged entity is OZ Minerals. Under the scheme of arrangement, the former shareholders of Zinifex received shares in Oxiana in exchange for their Zinifex shares. Mr Mitic, on behalf of the shareholders of Zinifex, claims against OZ Minerals for alleged loss and damage arising from alleged breaches of duty by OZ Minerals. Mr Mitic says that the breaches of duty arise from alleged failures by OZ Minerals to disclose material information relevant to the merger. The breaches of duty are based on continuous disclosure obligations and proscriptions against engaging in misleading or deceptive conduct. Mr Mitic’s allegations concerning the non-disclosed material broadly relate to the matters including:(1)an 8 August 2008 refinancing deadline (which was later extended to 30 November 2008);(2)Oxiana’s current liability position;(3)a cross-default risk that arose for Oxiana if a failure to refinance occurred, ie the failure would trigger an event of default, making the debt payable, in the Loan Note Subscription Agreement of US $520 million (LNSA) and the Mezzanine Facility of US $140 million;(4)a refinancing risk that Oxiana would not be able to refinance its US Debt Facilities;(5)a development delay risk concerning the effect on cash flows of delays or cancellation of mining development or exploration projects to which Oxiana was committed; and(6)other risks including an insolvency risk, and an asset sale risk. These risks are pleaded as relevant to the merger as involving “Merger Refinancing Risk” and “Merger Development Delay Risk”. Mr Mitic says that if the market had been informed about matters concerning Oxiana’s indebtedness, its business prospects, and the risks of the merger then the result would have been either that (i) the merger would not have proceeded, or (ii) the merger would have proceeded but Zinifex shareholders would have received better consideration under the scheme of arrangement. OZ Minerals denies liability. In the alternative, and in ancillary proceedings, OZ Minerals seeks apportionment of its liability. One of the ancillary proceedings is brought by OZ Minerals against Oxiana’s former solicitors, Clayton Utz. OZ Minerals pleads in its defence that Clayton Utz was a member of the Oxiana Due Diligence Committee and was engaged to provide due diligence legal services. OZ Minerals relies on matters including alleged representations by Clayton Utz to Oxiana which it says were misleading or deceptive. The first representation is pleaded as being:That there were no matters in relation to the Financing Documents or their terms which were material and which ought to be disclosed to the ASX in accordance with Oxiana’s continuous disclosure obligations under the Corporations Act and the ASX Listing Rules, and which had not previously been disclosed by Oxiana to the ASX.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
I have reviewed this document. The redacted parts are clearly privileged.Conclusion Each claim for legal professional privilege in Representative Documents 2, 6, 7, 8, 13, 15, and 27 is upheld subject to the undertakings given by OZ Minerals to “unredact” the passages mentioned in these reasons in Representative Documents 2 and 6. In circumstances in which legal professional privilege continues over the remainder of the redacted parts of the seven Representative Documents it is unnecessary to make any order to this effect. Although Mr Mitic has been unsuccessful in this challenge to legal professional privilege it does not follow that the usual order should be made that he should pay OZ Minerals’ costs of this application. In particular, when the application was commenced, Mr Mitic nominated 20 representative documents pursuant to my orders. OZ Minerals subsequently abandoned its claim for privilege over nine of those 20 documents. The abandonment of OZ Minerals’ claim for privilege over 45% of the documents over which privilege had initially been claimed in this application is a strong reason weighing against the success of OZ Minerals in this application for making no order as to costs. OZ Minerals submits that it should be entitled to some of its costs in circumstances in which (i) it is successful and (ii) Mr Mitic abandoned his challenge to privilege over eight of the remaining documents nominated by Mr Mitic together with the 20 documents nominated by OZ Minerals. However, as counsel for Mr Mitic rightly said, Mr Mitic’s conduct in not pressing claims for privilege over documents which he has not seen in light of submissions and evidence received is less significant in the exercise of my costs discretion than OZ Minerals’ abandoning claims to legal professional privilege over its own documents where some or all of those claims for privilege might have precipitated this application. Although OZ Minerals’ conduct in abandoning its claims to legal professional privilege over some of these documents was appropriate and laudable, Mr Mitic’s persistence with his challenge in relation to the remaining seven documents must also be understood in that light, even bearing in mind the puzzle to which I referred above at [17]. Further, after a close reading of the seven representative documents in this case, I considered it strongly arguable that privilege had been waived over passages in two of them. A claim for privilege over those passages was not abandoned after the hearing. On balance, I consider that the appropriate order as to the costs of this application between Mr Mitic and OZ Minerals is that there be no order as to costs. Since orders (1) to (3) below were not opposed, the appropriate orders are as follows:(1)By 10 November 2015, OZ Minerals and Zinifex are to serve on all other parties a list of any further Challenged Documents in respect of which they no longer press their claims for legal professional privilege, as a result of their abandoning their privilege claims in respect of various Representative Documents.(2)All Challenging Parties have liberty to apply, on two business days’ notice, for the matter to be relisted for the determination of any remaining claims of legal professional privilege as contemplated by the Court’s Order 10 of 28 September 2015.(3)Costs reserved with respect to Allens’ challenge to the Zinifex claims for privilege.(4)There be no order as to the costs of Mr Mitic’s challenges to OZ Minerals’ claims for privilege.
Ratio Decidendi
Legal Principle Established
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