Nipps (Administrator) v Remagen Lend ADA Pty Ltd, in the matter of Adaman Resources Pty Ltd (Administrators Appointed) (No 3)

The case of Nipps (Administrator) v Remagen Lend ADA Pty Ltd, in the matter of Adaman Resources Pty Ltd (Administrators Appointed) (No 3) involves a dispute over legal professional privilege concerning emails exchanged between a lawyer, Mr Madders, and several directors and the company secretary of Adaman Resources Pty Ltd, a company in administration. The defendant, Remagen Lend ADA Pty Ltd, a shareholder of Adaman Resources, sought to inspect the emails to challenge the privilege claims made by Mr Madders on behalf of the directors and the company secretary. The court was required to determine whether the advice provided by Mr Madders was given to the directors in their personal capacity or in their capacity as the directing mind and will of the company, and whether the inclusion of third parties in the communications waived the privilege.

The court examined the nature of the advice given by Mr Madders and the circumstances under which it was provided. Mr Madders, who was employed by Blondie Trading Pty Ltd on behalf of the Rivet Group, was introduced to the directors and the company secretary of Adaman Resources as someone who could provide them with legal advice. Mr Madders provided evidence that he gave legal advice on various issues, including the interpretation of the company's constitution and shareholders agreement, potential liabilities of officers, and corporate governance. The court noted that while some of the advice could have been sought by the company itself, the fact that directors sought the advice did not necessarily mean they were doing so on behalf of the company. The court found that there was a lawyer-client relationship between Mr Madders and the directors and the company secretary, and that the advice was given to them as individuals, not as the controlling mind of the company.

The court ordered that certain documents be provided to the District Registrar for inspection and determination of the privilege claims. The documents were to be sealed and retained confidentially until inspected by a judge. The court reserved costs, indicating that they would be considered at a later stage. This decision highlights the importance of establishing the nature of the legal advice provided and the capacity in which it was given, as well as the implications of including third parties in communications potentially affecting privilege.