Players Pty Ltd (in liquidation) (receivers appointed) v Clone Pty Ltd
[2013] SASCFC 25
•12 April 2013
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) & ORS v CLONE PTY LTD
[2013] SASCFC 25
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Blue and The Honourable Justice Stanley)
12 April 2013
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - USE OF DOCUMENTS
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION - GROUNDS FOR RESISTING PRODUCTION - CLIENT LEGAL PRIVILEGE
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - WAIVER OF PRIVILEGE
This is an appeal from an interlocutory order made by a Judge of this Court - before the primary Judge, the appellants sought directions that they were at or should have liberty to disclose and use evidence of the contents of documents in the possession of the respondent’s solicitors which had been inspected by one of the appellants in connection with the taxation of costs in the proceeding - legal professional privilege was claimed in respect of a number of those documents - the Judge refused the appellants’ application - the appellants appealed to the Full Court against that decision - whether the Judge made errors of law and fact - whether there had been intentional or imputed waiver of legal professional privilege - whether the collateral use rule precluded use of the documents - whether there had been an abuse of the processes of the Court.
Held (the Court): Permission to appeal granted - appeal allowed - orders of the Judge set aside - the documents over which privilege was claimed are no longer the subject of legal professional privilege - any privilege in those documents has been waived - even if privilege existed and there had been no intentional waiver, imputed waiver arose for use of the documents in related proceedings - the collateral use rule did not preclude use of the documents - any privilege that would otherwise have existed could not be claimed as the documents disclose a colourable case of abuse.
Supreme Court Act 1935 (SA) s 50 and s 72; Supreme Court Civil Rules 2006 (SA) r 242, r 271 and r 274; Supreme Court Civil Rules 1987 (SA) r 84.12, referred to.
Players Pty Ltd & Ors v Clone [2006] SASC 118; Mohtar v Mohtar (1988) 146 LSJS 377; Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247; Goldberg v Ng (1995) 185 CLR 83; Mann v Carnell (1999) 201 CLR 1; Hearne v Street (2008) 235 CLR 125; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526; Giannarelli v Wraith (No 2) (1991) 171 CLR 592; Goldman v Hesper [1988] 3 All ER 97; Bourns Inc v Raychem Corp [1999] 3 All ER 154; Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475; R v Braham and Mason [1976] VR 547; Ainsworth v Wilding [1900] 2 Ch 315; Nicholl v Jones (1865) 2 H & M 588; Rawstone v Preston Corporation (1885) 30 Ch D 116; In Re Worswick; Robson v Worswick (1888) 38 Ch D 370; Spenceley v Schulenburgh (1806) 7 East 357; Baker v London and South Western Railway Company (1867) LR 3 QB 91; Kennedy v Lyell (1883) 23 Ch D 387; Parry v News Group Newspapers Ltd (1990) 140 NLJ 1719; Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337; Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362; Clone Pty Ltd v Players Pty Ltd & Ors [2005] SASC 281; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, considered.
PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS APPOINTED) & ORS v CLONE PTY LTD
[2013] SASCFC 25Full Court: Gray, Blue and Stanley JJ
THE COURT
This is an appeal from an interlocutory order made by a Judge of this Court.[1] The Judge refused to permit the disclosure and use of documents that had been produced for inspection in relation to a taxation of costs. The Judge’s order related to two separate actions in this Court. Before coming to discuss the terms of the application and the order under appeal, it is convenient to refer to the history of the proceedings.
[1] Permission to appeal is required. In accordance with the practice of this Court, the Court proceeded on the basis that, in the event that permission is granted, the appeal be heard instanter.
An Overview
The plaintiffs and appellants are Players Pty Ltd (in liquidation) (receivers appointed), Gregory Michael Griffin, Darren John Cahill and Christopher Stephen McDermott. When convenient in these reasons, these parties are referred to collectively as the Players parties. The defendant and respondent is Clone Pty Ltd.
Clone, at relevant times, was the owner of premises at Pirie Street, Adelaide. In March 1995 it leased the premises to Players. Clone and Players entered into an agreement to lease before ultimately executing a memorandum of lease which was then registered.
The substance of the agreement to lease was that Clone would lease the premises to Players for ten years. The premises were to be substantially renovated by Players at its expense and were to be used as a hotel, restaurant, gaming venue, office and car park.
In about September 1994, Players obtained permission to transfer a liquor licence from premises in Adelaide known as the Grenfell Tavern. Players obtained a gaming machine licence for the Planet Hotel as an original grant. The lease came to an end in February 2005 in circumstances of some acrimony leading to the issue of proceedings. These proceedings are described in these reasons as the original proceedings.
The original proceedings were heard by Vanstone J in 2005. Clone, as plaintiff, claimed that it was entitled to a transfer of both licences at no cost, and sought orders protecting and giving effect to its claimed proprietary interest in those licences. The Players parties were the defendants. They claimed that Clone was only entitled to a transfer of the licences upon paying to Players a reasonable price. The Liquor and Gambling Commissioner was joined as a defendant but took no part in the trial, it being indicated that the Commissioner would abide the order of the Court.
Vanstone J determined that Clone was entitled to judgment.[2] Vanstone J declared that, upon execution, the memorandum of lease became the sole embodiment of the parties’ agreement and that as at 28 February 2005, Players was liable to transfer the liquor and gaming licences to Clone at no cost.
[2] Clone Pty Ltd v Players Pty Ltd & Ors [2005] SASC 281.
The decision of Vanstone J was appealed to the Full Court. On 24 April 2006, the appeal to the Full Court with respect to the above declarations was dismissed.[3]
[3] Players Pty Ltd & Ors v Clone Pty Ltd [2006] SASC 118.
The proceedings before Vanstone J and the Full Court were concerned, inter alia, with the terms of the agreement to lease. The original agreement to lease was missing. Two copies of the agreement to lease were produced at the hearing. Although the evidence at trial established that there were further copies, no further copy was produced.
Subsequent to the hearing of the trial and the appeal to the Full Court, two further copies of the agreement to lease were located by the Players parties.
In 2010, the Players parties applied to the Court in the original proceedings to set aside the orders made by Vanstone J and the Full Court.[4] The same application has also been made in a new action instituted in 2010 seeking orders setting aside the order of Vanstone J and the Full Court. The new action is described in these reasons as the separate proceedings.
[4] Clone Pty Ltd v Players Pty Ltd & Ors [2005] SASC 281; Players Pty Ltd & Ors v Clone Pty Ltd [2006] SASC 118.
On 23 December 2010, the Players parties sought directions in the original proceedings that they have liberty to disclose and use evidence of the contents of documents in the possession of Clone’s solicitors which had been inspected by one of the Players parties in January 2010 in connection with the taxation of costs in the original proceedings. Those documents fall into the following categories:
- written communications passing between Clone’s solicitors and the office of the Liquor and Gaming Commissioner in April 2005, in respect of which a claim for privilege was originally made by Clone but subsequently abandoned;
- records of oral communications passing between Clone’s solicitors on one hand and the office of the Liquor and Gambling Commissioner or the Crown Solicitor’s Office on the other hand, in respect of which a claim by Clone of privilege is pressed;
- emails between Clone’s solicitors and Clone’s counsel and a file note by one of Clone’s solicitors relating to an attendance, in respect of which a claim by Clone of privilege is pressed.
On 3 February 2012, a Judge of this Court refused an application by the Players parties that they be exempted from their obligation not to make collateral use of the documents in the last two categories above.[5] This appeal is against those orders.
[5] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12.
On the appeal, it was contended that the Judge made errors of fact and law in reaching his decision. Several contentions were advanced. It was said that there has been intentional waiver or, alternatively, imputed waiver. It was further contended that the Players parties were denied access to at least one of the copies of the agreement to lease in circumstances involving abuse of the processes of the Court. It was submitted that the documents over which privilege is claimed reveal an improper course of conduct of such a nature that privilege could not be claimed to attach to the documents. To this end, the circumstances in which Clone became aware of the existence of at least one further copy of the agreement, and the alleged steps taken to preclude or deny the Players parties from having access to that document in the original proceedings, are of particular relevance.
In the course of the hearing of the appeal, the Court raised its concern that the Liquor and Gambling Commissioner was not represented before the Court. In our view, the Commissioner should have been represented on the initial hearing of the application. The conduct of the Commissioner, and in particular a Deputy Assistant Commissioner, was under consideration.[6] Both the Players parties and Clone agreed that the Commissioner should have been given notice of the application and of this appeal. The appeal proceedings were adjourned to enable this to occur. On resumption, the South Australian Solicitor-General appeared for the Commissioner.
[6] Senior counsel for the Players parties informed the Court that no complaint was now being directed against the Crown Solicitor's Office. It was said that none had ever been intended. Counsel further confirmed that no complaint was being made against the Licensing Court of South Australia.
During the course of submissions on the appeal, counsel for the Players parties said that the case against the Licensing and Gambling Commissioner and his Deputy Assistant Commissioner, Ms Varricchio, was one of innocent agency. Counsel was explicit in confirming that it was not suggested that the Commissioner or Ms Varricchio were parties to any abuse of process of this Court whether by direct conduct or through any conspiracy.
For the reasons which appear below, any privilege in the documents that once may have existed no longer exists. We have concluded, that by making available the documents for inspection by Mr Griffin in January 2010 when under no obligation to do so, without claiming confidentiality and without restriction or limitation, Clone waived privilege in respect of all of the documents.
In any event, we consider that, as a consequence of Clone’s conduct in January 2010, there was an imputed waiver of privilege which extends to and encompasses the use of the documents on the Players parties’ applications to set aside the judgments of Vanstone J and the Full Court.
We have concluded that the use of the documents, and of secondary evidence being Mr Griffin’s notes of their content, for the purposes of the set aside applications in both the original and separate proceedings does not breach the implied undertaking as to collateral use. We also consider that the Players parties have established a colourable case that the documents in question evidence an abuse of process in connection with additional copies of the agreement to lease and, accordingly, Clone is not entitled to the protection of legal professional privilege in relation to those documents.
While it is not strictly necessary to decide, we have concluded that this Court has a general power under the inherent jurisdiction and rule 242 of the Supreme Court Civil Rules 2006 (SA) to set aside a judgment if the justice of the case so requires.
The Original Proceedings
A primary issue arising in the original proceedings was whether the lease granted by Clone to Players was subject to an agreement that, upon the expiration or earlier determination of the lease, Players would transfer and assign the hotel liquor licence and the gaming machine licence applicable to the leased premises to Clone for NIL consideration or alternatively for consideration. At the trial, the Players parties contended that the word NIL had been deleted by Mr Griffin by the scoring of a line with a blue pen through the word NIL in clause 11(i) of the agreement to lease. This was said to have been done in the presence of two of the other directors of Players.
At trial, as earlier mentioned, the original agreement to lease was not produced. Apparently, it had been lost or destroyed. Two photocopies of the agreement to lease were received as exhibits. A copy produced by Clone was marked as D9 and that produced by the Players parties as P9. Each photocopy was from an indeterminate generation of photocopying. An examination of each copy disclosed a horizontal line appearing through the word NIL in clause 11(i) of the agreement to lease. That clause, as it appeared in P9 and D9 with the horizontal line or scoring, provided:
11. SPECIAL CONDITIONS
…
i)The Lessee will upon expiration or earlier determination of the Lease transfer to the Lessor any Liquor Licences or gaming machine Licences held in respect of the premises for
NILconsideration.The trial of the original proceedings took place between 7 March and 26 April 2005. Shortly before the commencement of the trial, Clone’s solicitors wrote to the Commissioner’s solicitors, the Crown Solicitor, requesting that the Commissioner provide documents described as the Harborsboard files to the Court. On 4 March 2005, the Crown Solicitor wrote to the Players parties’ solicitors informing them of that request and saying they would have an opportunity to inspect the files at Court. The Harborsboard files were understood by all parties to mean the Commissioner’s files relating to an application by Players in 2003/2004 for removal of the liquor licence for the Planet Hotel to premises in Victoria Square to be known as the Harborsboard.
On 8 March 2005, during Clone’s opening at the trial, counsel for Clone called for the production of a photocopy of the agreement to lease which had been discovered by the Players parties. As noted above, this was produced and tendered by Clone. Clone also called for the production of the enclosure to a letter to Mr Griffin dated 30 August 1994, being a letter from Clone’s real estate agent, Mr Mackie. The enclosure was said to be a copy of the agreement to lease. The response to the call was that the Players parties could only locate one copy of the agreement to lease, being the copy which had already been tendered and received as exhibit D9. The Players parties could not identify when or how that copy had come into their possession.
On 5 April 2005, Clone called for production of a copy of the agreement to lease being the enclosure to a letter from Clone’s solicitors to Mr Griffin dated 22 March 1995. The Players parties’ response was that the only copy in their possession was the copy which had been tendered and received as exhibit P9.
On 6 April 2005, counsel for the Players parties, when opening their case, informed the trial Judge that inquiries had been made of the Licensing Commissioner to locate any file that had been created concerning the consent of the Licensing Court Judge to the removal of the hotel licence from the Grenfell Tavern to the subject premises. Counsel advised that the Players parties’ solicitors understood from the Licensing Commissioner that any such file had been destroyed.
On 6 April 2005, in the course of responding to calls for copies of the agreement to lease, the Players parties’ counsel referred to Mr Griffin having sent to the Licensing Court of South Australia a copy of the agreement to lease in September 1994. In response to a question from the trial Judge, the Players parties’ counsel informed the Judge that the document sent to the Commissioner was not in the files which had been “subpoenaed”, referring to the Harborsboard files which had been produced to the Court by the Crown Solicitor on about 4 March 2005.
On the same day, by letter, Ms Karagiannis of Clone’s solicitors informed Ms Varricchio of the Commissioner’s office of remarks made in the opening of the Players parties’ case that a copy of the agreement to lease had been provided to the Commissioner in the latter part of 1994. The letter suggested that the copy of the agreement to lease might be in the file relating to the removal of the Grenfell Tavern licence. The letter further requested the Commissioner to search his files, including the Oaks Tavern file and the Grenfell Tavern file as well as the Planet Hotel file, and to produce a copy of the agreement to lease to the Court if it could be located. The letter put the Commissioner on notice that, if a copy of the agreement to lease were located, the Commissioner would be required to produce the document to the Court with several copies and let counsel sight the primary copy in the file. This letter was one of the documents examined by Mr Griffin in January 2010 during the taxation of costs. Initially, privilege was claimed but that claim was later abandoned.
On 7 April 2005, Ms Varricchio sent an email to Ms Karagiannis of Clone’s solicitors advising that she had located a copy of the agreement to lease on the Grenfell Tavern file, that it was “identical” to the copy sent to her the day before, and that she had requested the early parts of the Planet Hotel file from archives. This email was another of the documents examined by Mr Griffin during the taxation of costs. Initially, privilege was claimed but that claim was later abandoned.
Also on 7 April 2005, Mr Griffin commenced giving evidence. He concluded his evidence on 12 April 2005. Mr Griffin gave evidence concerning the deletion of the word NIL in the agreement to lease. He gave evidence that he scored the line on the original in blue pen, thereby deleting the word NIL from the agreement. Mr McDermott gave evidence that Mr Griffin discussed that proposed deletion with him and another director of Players, and that he then witnessed Mr Griffin scoring the word NIL in the agreement.
Mr Griffin also gave evidence that on 13 September 1994 he requested a copy of the executed agreement to lease from the leasing agent for Clone. Having received a copy, he then provided this copy to the Liquor and Gambling Commissioner as evidence of the Players parties’ tenure of the leased premises. He did so to support the Players parties’ application for the removal of a liquor licence from the Grenfell Tavern to the leased premises.
On or before 8 April 2005, a solicitor for the Players parties attended at the office of the Liquor and Gambling Commissioner. Ms Varricchio produced four volumes of the Commissioner’s Liquor Licensing file relating to the Planet Hotel. These volumes did not include the Grenfell Tavern file, the first volume of the Liquor Licensing file or what was described as the Gaming file. The solicitor conducted an inspection of the volumes but his inspection did not disclose any copy of the agreement to lease.
On 8 April 2005, Ms Varricchio telephoned Ms Karagiannis’ secretary in response to a request made by Clone’s junior counsel to be informed if anyone from Mr Griffin’s firm inspected the Commissioner’s files. Ms Varricchio told Ms Karagiannis’ secretary that a solicitor from Mr Griffin’s firm had inspected orders, applications and historical licences which were matters of public record as well as two items of correspondence between the Players parties’ solicitors and the Commissioner. It was apparent that the Grenfell Tavern file was not inspected and nor was any copy of the agreement to lease. The secretary made a record of the conversation as an email to Ms Karagiannis and Clone’s counsel. This document was examined by Mr Griffin in January 2010 during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On 10 April 2005, Clone’s junior counsel sent an email to Ms Karagiannis seeking more detailed information about the particular files inspected by Mr Griffin’s firm and when those files were inspected. This document was examined by Mr Griffin during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On 10 April 2005, Mr Hamilton from the office of Clone’s solicitors sent an email to Ms Karagiannis and to Clone’s junior counsel questioning whether certain licensing documentation should be shown to a barrister who was an acknowledged liquor licensing expert. This document was examined by Mr Griffin and its contents noted. A claim for privilege is maintained in respect of this document.
On 11 April 2005, Ms Karagiannis sent a facsimile letter to Ms Varricchio, being a notice to produce to the Commissioner, requiring production to the Court of all Planet files in his possession by 4.00 pm that day or at the latest by 9.30 am the following morning. The text of the letter was as follows:
I refer to the message left at your office earlier today in relation to my inspection of all the Players files in relation to the Planet site.
After discussing this with counsel I have been requested to require your office to produce to the Court all the Planet files in your possession, including files from the inception of The Planet Hotel. You will recall that only the 2004 files are currently in Court. As part of this request, we require all plans that have been approved by the Commission in accordance with the licence from time to time. We would appreciate it if you could comply with this request by 4:00pm today or at the latest by 9:30 tomorrow morning.
I will be in Court most of today.
Could you please contact Annette Wescombe of this office if there are any difficulties.
[Emphasis added.]
This was one of the documents examined by Mr Griffin during the taxation of costs. Initially, privilege was claimed but that claim has now been abandoned.
On 11 April 2005, Ms Karagiannis, or another of Clone’s solicitors, spoke to Ms Varrichio. They discussed the Grenfell Tavern file and the Gaming file. The solicitor made a file note of the conversation. This document was examined by Mr Griffin during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On 11 April 2005, Ms Karagiannis’ secretary spoke to Mr Mackintosh, a solicitor employed by the Crown Solicitor’s Office, concerning the terms of the notice to produce. She informed him that the notice was now limited to the Planet Hotel file and that the files for the Oaks Tavern and Grenfell Tavern were excluded. Ms Karagiannis’ secretary made a record of this conversation as an email to Ms Karagiannis. This document was examined by Mr Griffin during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On 11 April 2005, Mr Mackintosh telephoned Ms Karagiannis’ secretary. He advised her that the files would be in Court the following morning. Ms Karagiannis’ secretary made a record of this conversation as an email to Ms Karagiannis. This document was examined by Mr Griffin during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On the afternoon of 11 April or the morning of 12 April 2005, Mr Mackintosh caused volumes two to five of the Planet Hotel Liquor Licensing file, together with the two volumes comprising the Planet Hotel Gaming file, to be produced to the Court. The files were taken into the possession of the Court either by the Registry or by being received by the Judge’s associate. It transpired that another copy of the agreement to lease was contained in one of the volumes of the Planet Hotel Gaming file produced to the Court.
On 11 April 2005, one of Clone’s solicitors made a file note recording an attendance in Court at which time files produced by the Commissioner were perused. This document was examined by Mr Griffin during the taxation of costs and its contents noted. A claim for privilege is maintained in respect of this document.
On 12 April 2005, in the course of cross-examination of Mr Griffin, Clone’s counsel asked that two plans contained in volume five of the Planet Liquor Licensing file be produced and shown to Mr Griffin. The plans were tendered and received into evidence. No reference was made to the Gaming file which had been produced to the Court.
On 22 July 2005, Vanstone J delivered her reasons for judgment. Vanstone J found that Mr Griffin had not scored a line through the word NIL in clause 11(i) of the agreement to lease.[7] In so doing, she rejected the evidence of Mr Griffin and Mr McDermott to that effect.
[7] Clone Pty Ltd v Players Pty Ltd & Ors [2005] SASC 281, [42]-[43].
The Players parties appealed. As noted above, on 24 April 2006 the Full Court dismissed the appeal.
Subsequent Events
The Legal Practitioners Conduct Board conducted an investigation into the evidence given by Mr Griffin at the trial. In the course of its investigation, the Board inspected the files of the Commissioner and learnt that a copy of the agreement to lease appeared on the Planet Hotel Gaming file which had been produced to the Court on 11 or 12 April 2005 and was still in the Court’s possession. The Board also learnt that another copy appeared in the Grenfell Tavern Liquor Licensing file which was still in the possession of the Commissioner. In December 2009, the Board informed the Players parties’ solicitors of the existence of those two copies of the agreement to lease. The Board resolved to take no action against Mr Griffin.
In January 2010, Mr Griffin attended at the offices of Clone’s solicitors to inspect documents in relation to Clone’s claim for costs against the Players parties. Mr Griffin inspected several documents. These documents were the subject of the application to the Judge at first instance. Each was listed as an item in the bill of costs lodged by Clone’s solicitors for the purpose of recovery of the costs of the original proceedings.
No claim for privilege was made at the time the documents were produced. No suggestion was made as to limited waiver. No claim was made as to confidentiality. No restriction was specified as to the use to be made either in the original proceedings, any related proceedings or other proceedings. Nothing was said in respect of any of the above matters.
In the course of Mr Griffin’s inspection, he reviewed and noted the contents of the documents described above. The notes made by Mr Griffin are the subject of the Players parties’ application. It is the Players parties’ contention that the transcription made by Mr Griffin provides important evidence to support the application to set aside the judgments of Vanstone J and the Full Court.
The Hearing at First Instance
The Players parties tendered at the hearing before the Judge at first instance proposed amendments to their points of claim in a form described as “proposed fourth amended Points of Claim”. The following paragraphs extracted from the existing pleading embody the initial plea concerning the conduct of Clone said to amount to improper conduct or malpractice:
53.By letter dated 11 April 2005 from Karagiannis to Varricchio (of the Licensing Court of South Australia), expressed to be a notice requiring production to the Court, Clone required production of all the Planet files.
54.Later on the same day the solicitors for Clone informed Don Mackintosh of the Crown Solicitor’s Office, who was acting for the Liquor and Gambling Commissioner and the Licensing Court of South Australia in the Previous Proceedings, that production was only required of the Planet Hotel Premises File and directed him not to produce the Grenfell Tavern Removal File.
55.On 12 April 2005, pursuant to the notice requiring production to the Court, the Licensing Court and/or the Office of the Liquor and Gambling Commissioner produced to the Court a number of files, which included Volumes II, III, IV and V of the Planet Premises File and the Gaming Machine Application File.
56.The Gaming Machine Application File contained the 4th Copy Agreement.
57. On 12 April 2005, Clone:
57.1 through its legal advisers, took possession of, and/or inspected, the documents thus produced to the Court, without obtaining the leave of Justice Vanstone, or otherwise informing the Plaintiffs, the Plaintiffs’ legal advisers or the Court of the fact that documents had been produced to the Court; and
57.2 through its counsel, made use in the cross-examination of Griffin of certain documents in the nature of plans of the Planet Hotel obtained from the said documents.
58.Despite being aware of the existence of the 3rd Copy Agreement, and the fact that this rendered at best fanciful the suggestion that the Line was machine generated, Clone, through its Counsel, continued to advance a case premised upon the Line being generated accidentally during the photocopying process, either by photocopier or by a human hand.
59.At no time did Clone discover or otherwise disclose to the Plaintiffs, or any of them, or their legal advisers:
59.1 the 7 April 2005 email from Varricchio to Karagiannis;
59.2 the 11 April 2005 notice requiring production to the Court of certain documents;
59.3 the fact that documents had been produced to Court pursuant to this notice;
59.4 the fact that Clone, through its legal advisers, had had access to these documents; and/or
59.5 the existence of either the 3rd Copy Agreement or the 4th Copy Agreement.
The proposed amended plea added further paragraphs in the following terms:
59A.The conduct of Clone pleaded in paragraphs 53, 55, 57, 59.2, 59.3, 59.4 and 59.5 above, either by itself, or in conjunction with the operation of the Condition, amounted to malpractice of the kind identified by the High Court of Australia in Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 as justifying an order setting aside the Judgment and Orders referred to in paragraph 1 of the Prayer for Relief below.
59BFurther to the matters pleaded in paragraph 59A above, or in the alternative, Clone encouraged or procured the Liquor and Gambling Commissioner and/or the Licensing Court not to comply with the Condition and/or to frustrate the object and intention of the Condition.
The Players parties contended before the Judge that the material disclosed at the time of taxation, when considered with other material, established an abuse of process of the Court in a number of respects, but in particular, in the hiding from the Players parties and their legal representatives of the existence of a further copy of the agreement to lease said to be crucial to the fair determination of the applications to set aside the judgments in the original proceedings.
The Players parties’ contention, inter alia, was that the documents were not protected by privilege. However, as Clone had put the Players parties on notice that it was said that a breach had occurred of the undertaking with respect to the use of discovered documents, the Players parties, out of an abundance of caution, sought a ruling that the documents were not privileged and that the Players parties were not in breach of any undertaking. Alternatively, if it was necessary to do so, the Players parties sought permission to use the documents on the set aside applications in the original proceedings and the separate proceedings.
The Judge considered the entitlement of the Players parties to use for extraneous purposes the privileged documents produced through discovery in relation to the taxation of costs. He was of the view that the request to inspect certain items in Clone’s bill of costs, ahead of the agreed sequence for the taxation, was motivated by Mr Griffin’s desire to further investigate the circumstances in which the Commissioner’s Grenfell Tavern file was produced to this Court in the original proceedings. In his view, where disclosure of a document on which a claimant for costs relies is necessary in order to ensure procedural fairness, reliance on the document by provision of it to the taxing officer necessarily entails a limited waiver of privilege. The opposing party to the taxation is entitled to see the document, or part of it, for the limited purpose of taxation. The Judge concluded that the material noted by Mr Griffin was the subject of privilege and that privilege had only been waived for the limited purpose of the taxation of costs.
The Judge considered that Clone had not used the documents in a way that was inconsistent with the maintenance of privilege. He reasoned that there was no inconsistency in Clone claiming both privilege and costs, as a successful party is entitled to its judgment even if a different judgment might have been given had the privileged material been voluntarily disclosed.
The Judge concluded that the subject documents, taken at their highest, could support an inference that Clone’s legal representatives were anxious to know in advance if the solicitors acting for the Players parties had discovered other copies of the agreement to lease, so as to be in a position to be prepared with a response to any such use of them. The Judge could, however, find no evidence of improper conduct by Clone’s legal representatives, and no prima facie case that the privileged communications were made for an improper purpose. In his view, the documents did not evidence or give any reason to suspect that any communication by Clone’s legal representatives was calculated to hinder the efforts of the Players parties to locate copies of the agreement to lease. The Judge found no good reason to exempt the Players parties from their obligation, upholding the rule of preclusion.
The Power to Set Aside Perfected Orders
During the course of submissions, attention was drawn to the powers of the Court to reopen a proceeding which had been finalised and in which the final orders had been sealed. Questions arose as to the extent of the Court’s powers and the reach of the Rules of the Court in relation to the setting aside of perfected judgments of a trial judge and of the Full Court of the Supreme Court.
The Judge concluded that the Court retains jurisdiction to set aside a judgment when fraud is established by reason of its constitution as a superior court of law and equity by the Supreme Court Act 1935 (SA). He accepted that fraud in this context has a wide meaning. However, he considered that the statutory right of appeal was inconsistent with an ability to re-open a judgment following appeal other than on the ground of intentional or reckless abuse of process calculated to frustrate the just disposition of the proceedings. In particular, he considered that rule 242 of the Supreme Court Civil Rules 2006 (SA) did not extend the Court’s powers in equity to set aside a perfected judgment on the basis of fresh evidence alone.
Counsel for the Players parties submitted that the Judge took an unnecessarily narrow view of the powers of the Court to set aside a perfected judgment following trial. It was the submission of counsel that the Judge had not adequately recognised the broad inherent jurisdiction of the Court to control its processes. Counsel accepted that in part this may overlap with the equitable jurisdiction of the Court. It was the submission of the Players parties’ counsel that rule 242 and its progenitor rule 84.12 of the Supreme Court Rules 1987 (SA) were rules made in aid of and to support the inherent jurisdiction of the Court.
Rule 242 of the Supreme Court Civil Rules 2006 (SA) provides:[8]
Power to correct, vary or set aside judgment
(1) The Court may correct an error in a judgment at any time.
(2) If satisfied that the justice of a case so requires, the Court may—
(a) vary a judgment; or
(b) set aside a judgment and reopen an action.
[8] The precursor rule 84.12 of the Supreme Court Rules 1987 (SA) provided:
Court may vary or set aside a judgment or order
84.12The Court may vary or set aside a judgment or order at any time if the justice of the case so requires.
Example—
The Court might set aside a judgment and reopen an action if satisfied that the judgment is vitiated by a mistake.
(3) The Court may act under this rule on its own initiative or on application by a party.
(4) If the Court proposes to act under this rule on its own initiative, it must notify the parties and allow them an opportunity to make representations on the proposed course of action.
It is convenient to turn in more detail to the reasoning of the Judge in support of his conclusion that rule 242 and its progenitor rule 84.12 are beyond power.
The Judge undertook an extensive historical review of the jurisdiction to set aside judgments, in particular dealing with the early development of the equitable jurisdiction. The Judge reasoned that, by constituting the Supreme Court as a court of law and equity, the Supreme Court Act accumulated in this Court those same powers to control its proceedings and records as were formerly exercised by both the superior common law courts and the Court of Chancery in England.
In the Judge’s view, the public interest in the finality of the administration of justice militated against the existence of a power to set aside a perfected judgment made after a contested hearing on the ground of fresh evidence. This would, he considered, be inconsistent with an appeal by way of rehearing pursuant to section 50 of the Supreme Court Act. He considered that section 50 affects a balance between the public interest in finality and the public interest in ensuring the most just resolution of a controversy by confining the availability of the remedy.
The Judge discussed authorities dealing with rule 84.12 of the Supreme Court Civil Rules 1987 (SA). Before doing so, his Honour said:[9]
Rule 242 of the Supreme Court Civil Rules 2006 (the 2006 Rules) regulates the power of the Court to set aside its judgment. Just as, in my view, it is not useful to speak of an equitable jurisdiction to set aside the orders of this Court, it is not sensible to speak of a “rules based” jurisdiction. Rather, as the very terms of the rule making power of s 72 of the 1935 Act show, rules do not confer jurisdiction but regulate the pleading, practice and procedure of the Court in the exercise of its jurisdiction. The decisions of this Court on the scope of r 242, and its predecessor r 84.12 of the Supreme Court Rules 1987 (the 1987 Rules), have not considered those rules in the historical context which I have adumbrated above.
[Footnote omitted.]
[9] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12, [75].
In Mohtar v Mohtar,[10] von Doussa J proceeded on the assumption that, prior to rule 84.12, the power of the Court to set aside a sealed judgment was limited to the correction of matters covered by the “slip rule” and to judgments entered by mistake or obtained by fraud. von Doussa J considered that rule 84.12 vested in the Court a wider power to vary or set aside a judgment or order entered by consent than that which had previously existed. This discretion is only fettered by the words “if the justice of the case so requires”.[11]
[10] Mohtar v Mohtar (1988) 146 LSJS 377.
[11] Mohtar v Mohtar (1988) 146 LSJS 377, 390-391.
In Commonwealth Bank of Australia v Forshaw,[12] Cox J, with King CJ and Olsson J agreeing, characterised rule 84.12 as a rule relating to practice and procedure within the meaning of section 72 of the Supreme Court Act, despite the fact that an order setting aside a summary judgment, as was the case there, undoubtedly affected the rights of the parties. In respect of its general operation, he observed:[13]
In my opinion, a rule such as r 84.12 should be interpreted with the same liberality. It should not be given an unnaturally restricted meaning for fear that anything else would imperil the finality of every judgment or order that the court ever makes. That does not necessarily mean that every kind of judgment or order falls within the terms of r 84.12.
Importantly, this Court in Commonwealth Bank of Australia v Forshaw[14] proceeded on the basis that there is no statutory limit affecting the valid operation of the rule.
[12] Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247.
[13] Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247, 257.
[14] Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247.
With respect to Commonwealth Bank of Australia v Forshaw,[15] the Judge noted that, though a summary judgment is a final order, the Court does not allow a party a full hearing. It was suggested that it might be an implicit condition of such a judgment that it is within the discretion of the Court to set it aside. Later in his reasons, his Honour observed:[16]
Whatever might be the proper scope of r 242 of the 2006 Rules, in cases like Mohtar and Commonwealth Bank of Australia v Forshaw, the rule-making power in s 72 of the 1935 Act does not allow this Court to arrogate to itself powers which the Act expressly, or by implication, denies it. The conferral and regulation of a power to set aside judgments is plainly enough a matter of procedure. However the powers exercised by the Courts with whose jurisdiction this Court has been invested must inform the construction of the Rule. More importantly, the scope of the rule-making power is affected by the nature of the jurisdiction conferred on the Court and, in its application to perfected judgments, by the availability of an appeal from those judgments in accordance with the 1935 Act.
[15] Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247.
[16] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12, [88].
The Judge distinguished the judicial process engaged in setting aside a judgment on the grounds of new evidence on the one hand, and fraud on the other. He viewed the latter adjudication as a power to protect the Court’s own processes from abuse. He considered that the central issue of whether impropriety in the conduct of litigation is a proper ground on which a trial court might set aside a sealed judgment is dependent on the extent to which it is analogous to fraud.
The Judge concluded as follows:[17]
I conclude that this Court is empowered to set aside a perfected judgment on an application brought in the action in which it was made, or in a separate action brought for that purpose, on the ground of an intentional or reckless abuse of the procedures of this Court which has concealed, from the unsuccessful party, important evidentiary material which it would otherwise have obtained.
[17] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12, [105].
In our view, rule 84.12 of the Supreme Court Rules 1987 (SA) and rule 242 of the present rules are both a proper exercise of the rule making power invested in Judges of the Supreme Court. Both rules are in aid of the inherent jurisdiction of the Court to control its processes. It is to be accepted that there is a strong public interest in the finality of judgments once entered. However, this interest sits alongside other interests, namely that of a just result to litigation. It is our view that the Court retains a discretion in its inherent jurisdiction to control its own processes and provide an appropriate remedy when justice requires. We consider that Mohtar v Mohtar[18] and Commonwealth Bank of Australia v Forshaw[19] were correctly decided and should be applied and followed. Rule 242 should be read liberally. The Court’s discretion is only fettered by the words “if satisfied that the justice of the case so requires”. Insofar as the Judge further qualified or limited the discretion, we respectfully disagree.
[18] Mohtar v Mohtar (1988) 146 LSJS 377.
[19] Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247.
The Appeal
On appeal, the conclusions of the Judge at first instance concerning privilege were challenged. The Players parties contended that the circumstances of the production of the documents involved a waiver of any privilege that existed. It was claimed that the documents were produced voluntarily under no circumstance of compulsion, that no claim to privilege was made and that nothing was said about limited waiver or confidentiality.
It was contended by the Players parties that, in accordance with High Court authority, the documents could be used both in the original proceedings and in any related proceedings. It was said that the separate proceedings were relevantly a related proceeding.
Finally, it was contended by the Players parties that, when viewed in their entirety and context, the documents over which privilege was claimed evidenced a colourable or arguable case of abuse of process in circumstances in which the documents could not be withheld under the cloak of privilege.
Waiver of Privilege and Collateral Use
The Judge concluded that the production of the documents involved a limited waiver and that the contents of the documents could only be used in respect of the taxation of costs. He also concluded that the collateral use rule precluded use of the documents by the Players parties other than for the purposes of the taxation of costs.
In relation to waiver of privilege, the Judge observed:[20]
In the ordinary course, it is not necessary to disclose the contents of a file note or an email to resolve a dispute about the costs claimed with respect to it. It is the fact of the making of the note or receipt of the document, its length and any notation as to time spent which is relevant to the costs question. If that proposition is accepted, it follows that r 271(3) of the 2006 Rules, or the Master’s order if it was made under the 1987 Rules, required production of documents which went beyond that which was necessary to ensure procedural fairness. In either case, the width of the obligation is, in my view, a further reason to find that production in accordance with the rule or order did not waive privilege generally and that the production was subject to a rule precluding use of the documents for any other purpose. The decision of Hobhouse J in Pamplin appears to me to be based on similar reasoning.
For the above reasons, I hold that disclosure of the internal documents for the purposes of the taxation resulted in a waiver of litigation privilege only for those purposes.
[20] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12, [154]-[155].
In relation to the collateral use rule, the Judge observed:[21]
When is a use collateral for the purposes of this rule? On that question an evaluative judgment must be made. That judgment is informed by the underlying rationale for the rule. In the ordinary course, the close connection between interlocutory applications and the matter in issue will demonstrate an identity of purpose. Similarly, even though an action may comprise multiple parties and causes of action, there is usually a single underlying legal controversy so that documents obtained from one party, or with respect to one part of the claim, can be deployed in all of the claims and counterclaims without infringing the rule of preclusion. However there is, in my view, a clear distinction between the production of documents for a purpose related to the adjudication of the underlying controversy and the production of documents to validate and quantify the costs payable pursuant to an award of costs which is made consequent upon, and incidentally to, the judicial resolution of that controversy.
...
Even though I have held that an application to set aside orders made at trial for fraud or on analogous grounds may be brought in the same action in which the judgment was entered, the rule of preclusion should still be applied to documents produced only for the purposes of taxation.
[21] Clone Pty Ltd v Players Pty Ltd (In Liquidation Receivers Appointed) & Ors [2012] SASC 12, [183], [185].
On appeal, the Players parties contended that there had been an intentional waiver of privilege by the disclosure of the documents to Mr Griffin in January 2010, that there was no limitation imposed at the time of disclosure and hence no limited waiver, and that the disclosure was not made under compulsion of law. The Players parties contended in the alternative that there was an imputed waiver which extends to use of the documents on the set aside applications in both the original proceedings and the separate proceedings and, in any event, that the collateral use rule does not preclude their use for that purpose. Clone contended that there was no intentional waiver, that any waiver was a limited waiver only to permit the use of the documents in connection with the taxation of costs and, in any event, that the disclosure was compelled by law.
Legal professional privilege is lost by the conduct of the party entitled to the privilege which is characterised by the law as resulting in a waiver of the privilege. The High Court has distinguished between two types of such conduct and hence two types of waiver – intentional and imputed.
Intentional or express waiver occurs when the person entitled to the privilege intentionally and voluntarily discloses the communication or other subject matter of the privilege to a person in circumstances in which the communication or other subject matter of the privilege loses its confidentiality.
There are two relevant corollaries to the principle of intentional waiver. Where the disclosure is made to a specific person for a specific purpose on the basis that that person is generally to maintain the confidentiality of the privileged material, there is no intentional waiver at large. This is often described as “limited waiver” – although in one sense, there is no waiver because the person to whom the privileged material is disclosed is within a continuing circle of confidentiality. Where disclosure of the privileged material to a specific person for a specific purpose is compelled by law, there is no intentional waiver at large because the disclosure is not voluntary.
Imputed waiver occurs when there is no intentional waiver but the conduct of the holder of the privilege in respect of the privileged material is such that considerations of fairness require the abrogation of the privilege, at least as against certain persons.
Under the collateral use rule, a party to litigation who receives confidential material under compulsion is obliged not to use that information for a collateral purpose. There is an intersection between the doctrine of waiver of privilege and the collateral use rule in relation to privileged materials. On the one hand, the preclusion of the collateral use of privileged material may be taken into account in determining whether there is limited waiver or, in other words, a preservation of confidentiality by reason of the collateral use rule. On the other hand, the scope of permitted use of privileged material under the collateral use rule may inform the extent of imputed waiver.
Intentional Waiver
Because legal professional privilege is confined to confidential communications, the privilege is lost where the litigant intentionally discloses the protected material to an opponent or another person outside the confidential circle. In Attorney-General for the Northern Territory v Maurice, Mason and Brennan JJ observed:[22]
When the privilege applies, it enables the client to keep the communication from disclosure and interferes with the public’s “right to every man’s evidence” …
The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver. A litigant can of course waive his privilege directly through intentionally disclosing protected material.
[Emphasis added.]
[22] Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475, 487.
In Goldberg v Ng,[23] documents were disclosed by Mr Goldberg to the Law Society on the express basis that they were confidential and that they were not to be shown to anyone else. The High Court held that for this reason there was no intentional waiver. Deane, Dawson and Gaudron JJ observed:[24]
It is clear that there has been no express or intentional general waiver by Mr Goldberg of legal professional privilege in the present case. Any waiver of the privilege as against the Ngs, if there has been one, must have resulted from Mr Goldberg's disclosure of the relevant documents to an officer (Ms Shirvington) of the Law Society. That disclosure was for the limited purpose of dealing with inquiries made on behalf of the Law Society in relation to the complaint which had been made against Mr Goldberg by Mr Ng and was on the express basis that the documents would not be shown to anyone else. It could not properly be seen as constituting an express or intentional general waiver of legal professional privilege or as destroying the confidentiality which is necessary for its maintenance.
[Footnote omitted.]
Their Honours accepted that an intentional waiver may be limited at the time of disclosure by the holder of the privilege limiting the scope or purposes of the disclosure and hence generally preserving its confidentiality.
[23] Goldberg v Ng (1995) 185 CLR 83.
[24] Goldberg v Ng (1995) 185 CLR 83, 95.
In Mann v Carnell, Gleeson CJ, Gaudron, Gummow and Callinan JJ noted:[25]
At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege.
[Footnotes omitted.]
[25] Mann v Carnell (1999) 201 CLR 1, [28].
Gleeson CJ, Gaudron, Gummow and Callinan JJ went on to hold that in determining whether privilege is waived by disclosure, it is essential to consider to whom the disclosure is made and whether it is in circumstances which import or are within the scope of confidentiality. In that particular case, disclosure by the Chief Minister to a Member of the Legislative Assembly of the Australian Capital Territory was on a confidential basis and there was no waiver of privilege. Their Honours accepted the concept of limited waiver in the following terms:[26]
Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
In Goldberg v Ng this Court considered a case in which there was disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party would treat the information disclosed as confidential. The Court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the Court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege. No application was made on the present appeal to re-open Goldberg or any of the earlier authorities on the subject. In Goldberg, reference was made to the statement of Jordan CJ in Thomason v Campbelltown Municipal Council:
“The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.”
[Footnotes omitted. Emphasis added.]
[26] Mann v Carnell (1999) 201 CLR 1, [29]-[30].
A recent consideration of the issue of intentional waiver in the context of compulsion is to be found in the judgment of Hayne, Heydon and Crennan JJ in Hearne v Street where their Honours observed:[27]
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits.
[Footnotes omitted. Emphasis added.]
[27] Hearne v Street (2008) 235 CLR 125, [96].
In Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd,[28] disclosure was made of privileged material on an interlocutory application. The ACCC argued that this was a limited waiver and did not entitle Australian Safeway Stores to use the material at the trial of the action. Goldberg J observed:[29]
Mr Beach … submitted that the documents were put into evidence not for all purposes and not for trial but rather for the purpose of the interlocutory application to meet Safeway’s challenge to the Commission’s claim for privilege. … In substance, Mr Beach was submitting there was a limited waiver.
…
I do not accept the submission that the exhibited documents were tendered in evidence for a limited purpose or that the privilege which otherwise attached to those documents was the subject of only a limited waiver. Certainly no such limitation was propounded at the time the documents were exhibited, the affidavit was filed and relied upon and tendered. It may be that the reason why the documents were put into evidence was only for the purposes of the interlocutory application and to meet the issue of when Mr Eva reasonably anticipated litigation against George Weston and/or Safeway, but once the privilege was waived in relation to those documents, I cannot see that the circumstances of this case warrant the conclusion that there was only a limited waiver. The waiver was express and intentional …
[28] Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526.
[29] Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 153 ALR 393, 433-434.
On the hearing of the appeal, it was said that the documents produced in the course of the taxation evidence the knowledge of Clone and its legal representatives of the existence of at least one further copy of the agreement to lease. A review of this copy discloses scoring through the word NIL. It was contended that, had this copy been available at the trial in the original proceedings, this would have provided independent documentary evidence supporting Mr Griffin’s account of what had occurred.
It was against this background that the Players parties submitted that, even if the documents in question would otherwise be privileged or their use precluded by the collateral use rule, they are entitled to use the documents produced on the taxation of costs in the proceedings seeking to set aside the judgments in the original proceedings. The substance of the submission advanced before this Court was that Clone had engaged in misconduct or malpractice of such a nature as to defeat any claim for legal professional privilege. It was further said that this misconduct or malpractice would support the set aside applications in both the original proceedings and the separate proceedings.
It is convenient to return to the factual circumstances providing the background to the above allegations. The relevant events have been set out earlier in these reasons. It is to be recalled that the Players parties’ counsel on 6 April 2005, when opening their case, informed the trial Judge that the solicitors for the Players parties had not been able to locate any file of the Commissioner dealing with the removal of the hotel licence from the Grenfell Tavern to the Pirie Street premises, and that that file had been destroyed. On 6 April 2005 and following the making of the above submission, Ms Karagiannis wrote to Ms Varricchio asking her to examine all files of the office of the Liquor and Gambling Commissioner relating to the leased premises in search for other photocopied versions of the agreement to lease. The letter advised that if any copy of the agreement to lease was located, then the Commissioner would need to produce the document at Court with several copies and let counsel sight the primary copy in the file.
On 7 April 2005, Ms Varrichio, by email, informed Ms Karagiannis that there was a copy of the agreement to lease within the Commissioner’s files. She said that this particular copy was on the Grenfell Tavern file, that is the transferor’s file, and not the Planet Hotel file, that is the transferee’s file.
On 11 April 2005, Clone’s solicitors issued the notice to produce to the Commissioner requiring production to the Court of all of the Planet Hotel files in the possession of the Commissioner, including files from its inception. Later the same day, Ms Karagiannis’ secretary contacted Mr Mackintosh of the Crown Solicitor’s Office, the solicitor acting for the Commissioner, and specifically requested that certain files not be produced to the Court, including the Grenfell Tavern file. This file, to the knowledge of Clone’s legal representatives, contained a copy of the agreement to lease.
On 11 or 12 April 2005, the materials the subject of the notice to produce were delivered to the Court. The notice to produce was not called in open court. The Players parties were unaware of the delivery to the Court. The Players parties were unaware that there was a copy of the agreement to lease amongst materials produced to the Court pursuant to a notice to produce. They were unaware that there was a copy of the agreement which was on the Grenfell Tavern file but had not been produced by the Commissioner at all. The Players parties were unaware that Clone’s solicitors had requested that the Grenfell Tavern file be excluded from the materials to be produced to the Court.
The submission of the Players parties in this Court was that the above circumstances, drawing on the documents informally discovered by the Commissioner, raised a colourable case of abuse of process. It was said that the conduct as set out above occurred against the background of the Players parties having expressed interest and concern in open court to the Judge about the original agreement being missing, as well as other copies. Of particular importance was the copy that was allegedly received by Mr Griffin from Clone’s leasing agent and forwarded on to the Commissioner.
It is the Players parties’ case that the evidence established that Clone and its legal representatives were taking steps to monitor the state of awareness of the Players parties and their legal representatives of the existence of copies of the agreement to lease in the Commissioner’s files. This monitoring was being undertaken at a critical time. Clone and its legal representatives had learnt of the existence of a further copy of the agreement to lease. Initially Clone had sought production of the files in terms that would have brought that copy to Court. It is argued that, at the time Clone and its legal representatives learnt that the Players parties were unaware of the existence of this copy, they limited the notice to produce so that a file containing the agreement to lease would not come to Court. They did not disclose to the Players parties and their legal representatives the terms of the notice to produce or the terms of the amended notice to produce. While all of this was occurring, it was said that Clone and its legal representatives were well aware that the Players parties were informing the Court of the importance of any further copies. It was contended that, by Clone’s failure to disclose the existence of the further copy, it was its intent to ensure that the trial proceeded without a further copy of the agreement to lease being before the Court.
Clone submitted to this Court, as it did to the Judge at first instance, that the inferences of an abuse of process sought to be drawn by the Players parties were no more than mere speculation without any evidentiary support. It was accepted that the documents over which privilege is claimed did disclose a level of monitoring. It was said that there was nothing unusual or sinister about this and the steps taken in the monitoring process were not illegal and were entirely proper. The Players parties’ assertion that there was a colourable case of abuse was strenuously denied.
The drawing of inferences at the interlocutory stage from incomplete and untested material is always difficult. In principle, there is nothing wrong with a party taking lawful steps to ascertain what investigations another party may be pursuing. On the other hand, a party so informed should not be involved in the Court being misled as to the true circumstances involving matters being discussed, raised or advanced in Court. A party must be zealous not to be involved in any conduct that may mislead the Court or cause the Court to act under a material misapprehension.
In the present case, the situation was complex. All in Court were aware of the need to produce as many of the copies of the agreement to lease as may exist. Both parties, at times, asserted to the Court that they had produced all copies in their possession. It is the Players parties’ case that Clone understood at the time of the trial that the Players parties believed that the Grenfell Tavern files had been destroyed and that Clone further understood that that was incorrect and that there was a further copy of the agreement to lease in the possession of the Commissioner. To our mind, the evidence before the Court does raise a level of suspicion. The question is: does the evidence raise a colourable case of abuse? We have concluded that, for the purposes of an interlocutory finding, there is sufficient evidence to raise a colourable case. We emphasise that the persons concerned have not been examined or cross-examined. There are no affidavits from several important witnesses. We accept that we are being asked to draw inferences from incomplete material. Notwithstanding these reservations, we consider that a colourable case of abuse has been made out. As a consequence, any valid claim for privilege cannot be maintained.
A Further Matter
Legal professional privilege protects confidential communications made in connection with and for the dominant purpose of legal advice or contemplated or pending litigation. It is fundamental that the communication be confidential. Accordingly, a communication is not privileged if it is conducted in public[49] or if it is a communication between opposing parties to litigation.[50]
[49] R v Braham and Mason [1976] VR 547, 549.
[50] Ainsworth v Wilding [1900] 2 Ch 315, 324-325.
It has been held that notes taken of a hearing in court or before an arbitrator, in the course of and for the purposes of proceedings, are not privileged.[51] It has also been held that notes taken by a solicitor of a discussion with an opponent in litigation are not privileged.[52] As Stirling J said in Ainsworth v Wilding:[53]
Now, it seems to me that records of proceedings at chambers containing nothing else may be brought under both heads. They are proceedings which took place in the presence of the opposite party, and seem as much to fall within the exception as communications with the opposite party; and, again, they also may be said to be communications as to matters of fact, because they are statements simply of what took place at chambers.
[51] Nicholl v Jones (1865) 2 H & M 588, 595-596; Rawstone v Preston Corporation (1885) 30 Ch D 116, 118; In Re Worswick; Robson v Worswick (1888) 38 Ch D 370, 372-373.
[52] Spenceley v Schulenburgh (1806) 7 East 357, 358; Baker v The London and South Western Railway Company (1867) LR 3 QB 91, 93-94; Kennedy v Lyell (1883) 23 Ch D 387, 405-406; Parry v News Group Newspapers Ltd (1990) 140 NLJ 1719, 1719.
[53] Ainsworth v Wilding [1900] 2 Ch 315, 324-325.
In Parry v News Group Newspapers Ltd, Dillon LJ, with Stocker and Bingham LJJ agreeing, observed:[54]
… a solicitor’s attendance note recording what happened in court in the presence of both parties to the litigation is not privileged. Mr Brown has submitted that that applies merely if the solicitor makes the attendance note as a mechanical recording of what has been happening and not if he makes it with a view of advising his client. I do not read any such distinction in Stirling J’s judgment. A solicitor will take a note of judgment that is delivered in court as a note of the judgment, but also having in mind that it may be necessary for him to advise his client on what should be done if it should turn out that the judgment is against his client …
I can see for my part no distinction in principle between attendance notes made by the solicitor recording what took place in court or in chambers in the presence of the parties on both sides, and attendance notes recording meetings between the legal advisers of the parties on both sides with or without their clients in attendance, or attendance notes recording telephone conversations between the parties.
In all those cases the solicitor’s attendance note is recording what happened as a matter of record, setting out what passed publicly between the two parties or their advisers … The attendance note is not a privileged document, but any communication by Mr Barton-Taylor to his clients informing them about his discussion with Mr Crone and advising them or seeking their comments or further instructions, or anything of that nature, is a privileged document.
[54] Parry News Group Newspapers Ltd (1990) 140 NLJ 1719, 1719.
In Telebooth Pty Ltd v Telstra Corporation Ltd,[55] senior executives of opposing parties had a telephone conversation. One executive made a tape recording and caused a transcript to be made of the conversation for the purpose of legal advice and litigation. Hedigan J observed:[56]
The conversation that took place is admittedly non-confidential. In the circumstance here prevailing, it seems to me that it would be anomalous, contrary to the principle which drives legal professional privilege and an encouragement to inappropriate use of the client-solicitor relationship, to conclude that the tape-recording of the non-confidential conversation is privileged.
It is not necessary to consider whether or not a handwritten note taken of the conversation would be privileged in similar circumstances, although I should say that there must be powerful arguments in support of the view that such a note taken for the purpose of giving it to the solicitor would not be privileged.
[55] Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337.
[56] Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337, 347-248.
In Health & Life Care Ltd v Price Waterhouse,[57] a solicitor prepared a proof of evidence of a potential witness who might have been called by the solicitor’s client in proceedings in the Federal Court. Lander J, with Doyle CJ agreeing, held that while the witness was not bound by a confidentiality obligation in relation to the conversation which he had with the solicitor, the witness proof was prepared by the solicitor in circumstances of confidentiality solely for the purpose of the client and solicitors knowing what evidence the witness would give if he were called as a witness.[58]
[57] Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362.
[58] Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362, 370-371.
It is to be recalled that privilege was claimed over records of oral communications. Several of those communications were with the Office of the Liquor Licensing Commission. One communication was with the Crown Solicitor’s Office. There does not appear to be a basis for finding that the records of those oral communications were prepared in circumstances of confidentiality as was the case in Health & Life Care Ltd v Price Waterhouse.[59] We incline to the view that these documents were not privileged at all. We consider the analysis in the earlier referred to authorities in the United Kingdom and in Telebooth Pty Ltd v Telstra Corporation Ltd[60] support this conclusion. However, we acknowledge that this issue was not fully argued and in those circumstances, it would be inappropriate to express a concluded view.
[59] Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362.
[60] Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337.
Conclusion
We grant permission to appeal. We allow the appeal and set aside the orders of the Judge. The documents over which privilege has been claimed are no longer the subject of legal professional privilege. Any privilege in those documents has been waived. Even if privilege existed and there had been no intentional waiver, imputed waiver arises for the use of the documents in related proceedings. Further, any privilege that would otherwise have existed cannot be claimed as the documents disclose a colourable case of abuse. The Players parties are not in breach of their undertaking with respect to disclosed documents by their use as proposed. Minutes of order are to be prepared to give effect to the ruling of this Court.
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