Muller, M.M. v Excel Finance Corporation Ltd

[1991] FCA 732

N o r FUR D l s r R ~ g u T l O W B

332

JUDGMENT Na ------

I - . - - - L)

)

l ) No. NG 144 of 1991

1

SOUTH

BETWEEN :

Applicant

AND :  P C E L FINANCE CORPORATION

Respondent

21 NOVEMBER 1991
SYDNEY

In this matter a question has arisen about a claim on behalf of the applicant that two documents referred to in his supplementary affidavit of documents are protected from production by legal professional privilege. The documents in question are described as follows in part I1 to Schedule 1 of the affidavit of documents as added to by the supplementary affidavit.

with Turnbull and Bustice was becoming men it became apparent to me that my deal

"3. Copy original statement of Xorrfe

Muller.

4.    Second statement of Morrie Muller. "

AB to those documents the applicant has deposed:

The facts surrounding the coming into existence of both my statements are as follows:

compl icated I approached G e o f f Gibba,

solicitor, and he s a i d t o me ' w i l l you

p l e a s e write	o u t a s ta tement	ae	t o a l l	the
c i rcumstances	surrounding	the	c r e a t i o n	o f

the documents and drop it i n to me.'

I prepared	this i n my handwri t ing and he
d i d not have a d a t e on it b u t was made i n	arranged for it to be typed . T h i s s ta t emen t
about November 1990. I do not r e c a l l
s i g n i n g the s ta tement . T h i s i s the first
s ta t emen t document 3, i n Schedule l Part 2.
There was an error i n t h a t s t a t emen t .
When I changed solicitors I po in ted o u t this
error to Michael F i t z g e r a l d , m y new
pages o f the s tatement t o reflect m y t r u e solicitor, he then re-engrossed the first 2
i n s t r u c t i o n s and th is i s the s ta t emen t now
t h a t forms the b a s i s o f my A f f i d a v i t and i s
document 4 i n Schedule 1 , Part 2 o f th is
L i s t .
Around February 1991 I complained t o the Liverpool Police about stolen books and ment ioned t o them the problems t h a t I had exper ienced regard ing this t r a n s a c t i o n . I
spoke t o Constable Bob Prenter. I showed
him my first s tatement con ta in ing , a s it
had, the o r i g i n a l miss ta tement . H e s a i d he
d i d not have time to read i t now b u t he
would r ead it sometime l a t e r . I con tac t ed
Cons tab le Prenter i n about A p r i l and asked
him for my s tatement back. Cons tab1 e
P r e n t e r s a i d he had showed my s ta t emen t t o a Policeman, M i c k Lewis, I s a i d I had showed him the s ta tement for an op in ion only and I d i d not want h im t o show it t o anybody else.
Kick Lewis apparen t l y i s a f r i e n d o f the

S t a t e Bank's Kevfn P l a t t .

A t no time d i d I i n t e n d t o waive p r i v i l e g e i n the first o r second s ta tement by showing t h a t document t o the Police."

. .

.

By his statement of claim the applicant has alleged that on 6 October 1991 he advanced the sum of $300,000 on security of a mortgage granted by the third respondent, Decoin Pty Limited ("Decoin') over certain land.

At the time of that advance there was delivered to the applicant a postponement of a first mortgage granted by Decoin to the first respondent so that it ranked after the mortgage from Decoin to the applicant. There was also delivered to the applicant an irrevocable authority to the applicant to receive the certificate of title to the subject land from the Registrar General. It appears that before that irrevocable authority was presented the Registrar General had returned the certificate of title to the solicitors for the first respondent ("Excel") and that Excel now disputes the authority of the fifth and sixth respondents, M Turnbull and M Freemantle, who claimed to be directors of Excel to execute the postponement of mortgage or the irrevocable authority.

The sum of $300,000 was paid to the second respondent, KJE Holdings Pty Limited, a company controlled by the fourth respondent, Mr Eustice, to enable control of Excel to pass to SP Stationers Pty Limited, a company controlled by the fifth respondent, M Turnbull. In the result, the applicant has so far

security from Decoin or to recover the sum of $300,000 advanced	not been able to enforce what he believed to be a first mortgage
by him.

- . - - - - . - . - . - - - -

The statement in the applicant 'S supplementary affidavit of

documents that: "it became apparent that my deal with m u l l and Eustice was becoming complicated" I take to be a reference to the applicant's perception of the difficulties created by his inability to have his mortgage from Decoin registered as a first mortgage and to obtain the certificate of title to the subject land.

It was understandable that he should seek advice from a solicitor other than one who had been involved in the transaction itself. It is clear from their terms as well as from the surrounding circumstances that both statements, each of which I have inspected, were prepared for the sole purpose of obtaining that legal advice. Accordingly, they are prima facie privileged whether or not they were prepared for use in litigation then contemplated. The come within the first limb of the principle stated as follows by Barwick CJ in %ant v Downes (1976) 135 CLR 674 at 677:

"A document which was produced or brought into existence either with the dominant purpose of its author or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its content8 in order to obtain legal advice or to conduct -or aid in the conduct of

li ti gatf on, at the t h e of its production in
rea~onable	prospect, should be privileged

and excluded from inspection."

See also per Stephen, Mason and Murphy JJ at 682 and 688 and per
Jacobs J at 690.

A document prepared solely for submission to a legal practitioner for the purpose of obtaining advice also comes within paragraph (a) of the more detailed analysis of the categories of privileged documents undertaken by Lockhart J in

on v Ste

. , m (1979) 36 FLR 244 at 245

where his Honour said:

"Legal pro fess ional p r i v i l e g e ex tends t o

various c l a s s e s o f documents inc lud ing the

followingr

( a ) Any communication between a p a r t y and h i s pro fess ional l e g a l a d v i s e r i f it i s

c o n f i d e n t i a l and made t o or by the

p r o f e s s i o n a l a d v i s e r i n h i s

pro fess ional c a p a c i t y and w i th a v iew

to ob ta in ing or g i v i n g l e g a l adv ice or

ass i s tance , no twi ths tanding t h a t the

communication i s made through agents o f	the p a r t y and the solicitor or the
Le Marchant (1881) 17 Ch.D. 675; Smith agent o f either o f them. See Wheeler v v Daniel1 (1874) L.R. 18 Bq 649;
Bu l l i van t v Attorney-General for V i c t o r i a [l9011 A.C. 196; Jones v
Great Central Railway Company [1910], A. C. 4 and 08Rourke v Derbyshire [l9201 A.C. 581."

The question thus remains whether the privilege, which I consider attached to the first statement from the moment of its creation, has been impliedly waived by its being entrusted to Constable Prenter between February and April 1991. The rationale of impliedwaiver of legal-professional privilege has been stated in these terms by Mason and Brennan JJ in -era1 - fox

t o m v-	(1986) 161 CLR 475 at 487:
-

.- - -. -. - - - -

"The l i m i t i n g e f fect o f l e g a l pro fess ional

p r i v i l e g e on the a v a i l a b i l i t y o f evidence

otherwise r e l e v a n t i s con f ined , inter a l i a ,

by the d o c t r i n e o f waiver. A l i t i g a n t can

o f course waive his p r i v i l e g e d i r e c t l y

through	i n t e n t 1	o n a l l y	d i s c l o s i n g protected
mater ia l .	H e	can a l s o lose	t h a t protection

through a waiver by i m p l i c a t i on. An i m p l i ed

conduct on the p r i v i l e g e h o l d e r ' s par t , i t	waiver occurs when, by reason o f some
becomes u n f a i r t o main ta in the p r i v i l e g e . "

I can find nothing i n the applicant's conduct in entrusting the document t o a police o f f i cer which makes it unfair for him t o maintain the privilege against any o f the remaining

In

[ l 9 8 8 1 3 A l l &.R. 8 1 6 , the Court o f Appeal held that where

privileged documents had been handed by the plaint i f fs to the police and had been provided by the prosecutors to the defendants i n connection with a criminal t r i a l , the plaint i f f could s t i l l maintain the claim o f privilege to prevent use of the documents i n subsequent c ivi l litigation between it and the defendants.

Neill L. J . , with whom Dillon and Stocker L. J . J . agreed, said, a t

i n making documents available for the	" In my judgment the action o f the plainti f f
purpose of the criminal t r i a l d i d not
which it was entitled in the present civi l constitute a waiver o f the privilege to
proceedings. I t s action i n regard to both the categvryA and the category B documents was in accordance with i t s duty to assist i n could not properly be construed a s an the conduct o f the criminal proceedings, and
express or implied waiver o f i t s rights i n

- . - -. . i t s own civi l l i t 1 gation. Indeed, i t would

i n m y view be contrary to public policy i f

documents available i n the criminal	the plaint i f f ' s action i n making the
proceedings had the e f f ec t o f automatically removing the cloak o f privilege which would otherwise be available to them i n the civil
l i t igation for which the cloak was designed. "

In my view the argument in favour of an implied waiver of privilege is even less strong in the present case, where the document has not come into the possession of the respondents and where Mr Muller, by his subsequent conduct, made it clear that the document was entrusted to Constable Prenter for a limited purpose and was intended for his eyes only.

I do not regard 9 (1990)

20 NSWLR 724, to which I was referred by Mr Leahy of counsel for the first respondent, as casting any light on the present question. In that case it was held that there had been waiver of the privilege against self-incrimination by provision to the solicitors for the plaintiff in civil proceedings of a statutory declaration and a statement of evidence made by the person asserting the privilege.

Accordingly, for the reasons that I have indicated, I uphold

the claim of privilege-and rule that the applicant is not obliged

to produce for inspection either of the statements.

I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Ryan.

-

A a w i a L Q - h

-r 21 November 1991

Counsel for Applicant:	Mr G. Johnston
Solicitor for Applicant:	Helliars
Counsel for first Respondent:	Mr C.S. Leahy
Solicitor for first Respondent:	Sly & Weigall
Solicitor for second and fourth

Respondents:  Blessington Judd

Fifth and sixth Respondents appeared in person.

Date of Hearing:	18-22 November, 1991.
Date of Judgement:	21 November, 1991.