Pascoe v Boensch

[2007] FMCA 1214

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PASCOE v BOENSCH & ANOR (No.4) [2007] FMCA 1214

BANKRUPTCY – EVIDENCE – Legal professional privilege – whether disclosure documents are privileged – whether privilege attaches to ledger documents – whether handwritten note on ledger documents is privileged – whether documents can be severed.

Legal Profession Act 2004 (NSW)
Evidence Act 1995 (Cth), s.118

Packer v Deputy Commissioner for Taxation (1984) 55 ALR 242
Green v AMP Life [2005] NSWSC 95

Applicant: SCOTT DARREN PASCOE

First Respondent: FRANZ BOENSCH

Second Respondent: SABINE BOENSCH

File number: SYG 1995 of 2006

Judgment of: Raphael FM

Hearing date: 19 July 2007

Date of last submission: 19 July 2007

Delivered at: Sydney

Delivered on: 19 July 2007

REPRESENTATION

Counsel for the Applicant: Mr  J.T. Johnson

Solicitors for the Applicant: McLean & Associates

Counsel for the 1^st Respondent: Mr M. Heath

Solicitors for the 1^st Respondent: Wright Pavuk Lawyers

Solicitors for the 2^nd Respondent: Shanahan Tudhope Solicitors

ORDERS

1. The respondents shall provide the Court with a copy of each of the two ledgers without the holograph annotations.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1995 of 2006

SCOTT DARREN PASCOE

Applicant

And

FRANZ BOENSCH

First Respondent

SABINE BOENSCH

Second Respondent

REASONS FOR JUDGMENT

1. There comes before me the difficult question of whether certain documents are susceptible to a claim for legal professional privilege.  The documents with which I am presently concerned fall into two distinct groups, each containing two documents.  The first group is two documents constituting what is known as a disclosure document and what used to be known as a fee agreement between the legal advisor and his client.  The second group consists of two documents which are ledgers indicating transfers between accounts upon which the client has made handwritten notations.  In this second group, privilege is claimed not only for the client’s handwritten notations but also for the ledger part of the document.

2. I have had the benefit of a lengthy debate between the Bench and the Bar table concerning these documents.  I do not think that anyone would suggest that the decision is an easy one to come to.  The courts have been charged with giving decisions as to the availability of privilege in respect of a variety of the typical documents that arise between legal advisers and their clients including bills of costs.  But the disclosure document has not yet been the subject of judicial consideration.

3. A disclosure document is something that is required under the Legal Profession Act2004 (NSW), the purpose of which is to provide the client with an indication of the work which the solicitor intends to do on his or her behalf, and the cost of doing that work. To that extent, it could be said that the dominant purpose of producing the document is to comply with the Act. It is also arguable that the purpose of informing the client, or confirming to the client the nature of the advice that is to be provided and the work to be done in that connection, is equally dominant.

4. This is the approach taken by Mr Heath on behalf of the respondents who are claiming the privilege. He says that by setting out what work is to be done the document falls squarely within the provisions of s.118 of the Evidence Act 1995 (Cth), as the words “legal advice” have been understood. I have no difficulty in accepting Mr Heath’s submission that these documents are confidential. The very nature of the relationship between a solicitor and client is a confidential one.

5. The question seems to me to be whether the naming of the advice that is to be provided is effectively the same as the giving of the advice.  In Packer v Deputy Commissioner for Taxation (1984) 55 ALR 242 Andrews SPJ says at 243:

   “Essentially, what are protected from disclosure are communications between solicitor and client.  Disclosure of the nature of a transactional matter in respect of which legal advice is sought or given is not privileged unless the disclosure reveals the communication itself which may occur in the case of detailed bills of costs, for example.”

6. In Green v AMP Life [2005] NSWSC 95 at [18] Campbell J considers:

   “The notion of “disclosure” involves something becoming revealed which was previously hidden or known which was not previously known.  There can, it seems to me, be disclosure of a matter even if not everything concerning that matter is disclosed.  In the present case, it seems to me that allowing inspection of the material which is contained in the file, insofar as it consists of drafts of the policy and customer information brochure, would result in some information becoming available to the person who carries out the inspection, about the topics concerning which the assistance of Minter Ellison has been requested in the drafting of the documents.  To that extent, it would result in disclosure of a confidential communication made between client and lawyer.”

7. I have tested this matter in what some may consider to be an unsophisticated way by asking whether a witness in the witness box could be required to give evidence of the subject matter of what he might have sought advice upon from his solicitors.  The general view, which I believe is accepted by those sitting at the Bar table and is certainly accepted by myself, is that he would not be so required. The letters with which I am currently dealing seem to me to be nothing more than the mirror image of that situation: namely, the solicitor telling the client what the client has asked him to do.  It is the commencement of the confidential relationship between the parties, and as such, as relevant as this document might be for the trustee, I am afraid that I have come to the conclusion that it is protected.

8. In regard to the second group of documents I take the view that insofar as they consist of a ledger I do not believe that they would be protected.  In that I am supported by the views of the Queensland Supreme Court in Packer.  But insofar as the document consists of written instructions I think that it clearly falls within the definition of a privileged document.  The courts have allowed documents to be severed and I think that the appropriate course of action is to require the respondents to provide the court with a copy of each of the two ledgers without the holograph annotations.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date:  19 July 2007