Premier Building & Consulting Pty Ltd v Spotless Group Limited (No 6)
[2005] VSC 256
•29 July 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 8264 of 2003
| PREMIER BUILDING & CONSULTING PTY LTD (ACN 066 568 367) | Plaintiff |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) & ORS | Defendants |
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JUDGE: | BYRNE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 June 2005 | |
DATE OF JUDGMENT: | 29 July 2005 | |
CASE MAY BE CITED AS: | Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 6) | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 256 | |
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Practice and Procedure – documents produced on subpoena – documents containing privileged legal advice – whether delivery of documents to third parties waives privilege – whether transmittal of documents between third parties waives privilege – no waiver – inspection refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G J Digby QC Mr N Pane | Baker & McKenzie |
| For the Defendants | Mr T J P Walker | Freehills |
| For the 5th Defendant | Mr D Aghion | Deacons |
HIS HONOUR:
Before the Court are applications for the inspection of certain documents produced to the Court under three subpoenas. The subpoenas were filed by the Spotless Parties returnable before the Prothonotary pursuant to r. 42.10. The persons named are:
·Balmain NB Commercial Mortgages Pty Ltd[1] (“Balmain”).
·Australian Mortgage Administration Ltd[2] (“AMAL”).
·Royce (Vic) Pty Ltd[3] (“Royce”).
Premier has notified the Spotless Parties of its objections to the inspection of certain of the documents produced and the Prothonotary has referred the matter to me as the judge managing this litigation. Two issues fall for decision with respect to the documents in question.
1) Do they have sufficient relevance for me to permit inspection?
2) Is inspection to be denied on the basis of privilege?
[1]Subpoena 5 October 2004. Exhibit SM1.
[2]Subpoena 5 October 2004. Exhibit SM5.
[3]Subpoena 19 April 2005.
Keen Planning supports the Spotless Parties’ application and itself seeks inspection of the documents.
The Background
The claim by Premier concerns alleged contamination of its land at 227 Barkly Street, Brunswick. Its case is that this contamination was caused by the commercial activities conducted on the neighbouring property at 225 Barkly Street by the Spotless Parties or persons for whom they are responsible. Premier’s claim is for damages, for mandatory orders that they clean up the neighbouring land and for statutory compensation pursuant to s. 62A of the Environment Protection Act.
The purchase and development of the Premier land was funded by a loan given by Colonial First State Investment Ltd (“CFS”) which was put in place in or about 2001. In fact, the loan was arranged by the first person named, Balmain, which is a mortgage broker with which CFS has had dealings for some 11 years. Balmain ceased to have any involvement with this project in late 2003 or early 2004. The administration of the loan is entrusted to the second person named, AMAL, with which CFS has had a longstanding relationship. The loan was established, as I have mentioned, for the purchase of the Premier land and for the construction of 49 apartments on it.
Premier says that on or about 7 March 2003 it became aware that the Premier land was contaminated.[4] In February 2003 Premier engaged IT Environmental (Australia) Pty Ltd (“ITE”) to conduct an environmental audit of the Premier land. This audit was terminated by agreement between Premier and ITE shortly after 19 August 2003[5] at a time when the audit was still incomplete. Thereafter, the Environmental Protection Authority on 18 November 2003 and on 27 February 2004 served upon Premier a notice to clean up the Premier land. It seems that in August 2003 the EPA was not in a position to serve upon the Spotless Parties a notice to clean up the neighbouring property, but it was preparing a pollution statement notice for that land.[6]
[4]Statement of claim, para 5C.
[5]In her affidavit sworn 24 March 2004 in the VCAT proceeding, Ms Moon says that the auditor’s termination report was completed 5 September 2003.
[6]Exhibit SM/26.
At this time, that is in August 2003, Premier was contemplating legal action and CFS was aware of this. The contracts which Premier had obtained from purchasers of the apartments had been cancelled and the project was then facing commercial difficulty, if not disaster. The CFS senior corporate solicitor, Russell Grigg, was at that time corresponding with Anne Maree Moon, the partner in Baker & McKenzie, the solicitors for Premier. Also involved were counsel retained by Premier and one Darren Smith from Balmain. It is apparent from the documents which I have been shown that Premier was then gathering information for the purposes of commencing litigation against one or more of the Spotless Parties. The present proceeding in the Court was commenced by writ filed on 7 October 2003. An associated proceeding in the VCAT was commenced on 24 March 2004.
The documents in question are described in the affidavits of Ms Moon sworn 25 May 2005 and 14 June 2005. In summary, there are two categories of documents for which privilege is claimed. The first comprises eight AMAL documents dated between 3 September 2003 and 9 October 2003 and 13 Balmain documents dated between 12 August 2003 and 26 August 2004 and three Royce documents dated between 15 September 2003 and 11 February 2004 and two undated Royce documents. These documents are said to be the subject of legal professional privilege, broadly speaking, on the basis that they contain legal advice. The second category comprises 19 AMAL documents dated 4 August 2003 to 2 April 2004 and 14 Balmain documents dated 5 August 2003 to 13 May 2004. This category is said to comprise invoices and supporting material for Baker & McKenzie’s legal costs. Baker & McKenzie, of course, were the solicitors for Premier at all relevant times.
I have not inspected any of the documents in question.
Relevance
The degree of relevance which must be shown in order that documents delivered to the Court may be inspected by a party is not high. Inspection will be permitted where it appears that the party has a legitimate forensic purpose in the inspection[7].
[7]Killorgan Investments Pty Ltd v Baycorp Advantage Business Information Services Ltd [2002] VSC 270.
On behalf of Spotless it is said that the documents may shed some light on the decision of Premier to terminate the environmental audit in 2003[8] and to encourage the EPA to issue the clean-up notices in respect of the contamination of the Premier land. I was told that the involvement of Premier in this went so far as to participate in the drafting of the clean-up notices. The final claim of Premier in this proceeding is against the Spotless Parties as persons who carried out or permitted the contamination, seeking compensation pursuant to s. 62A of the EP Act in respect of the cost it has and will incur in good faith in complying with the clean-up notices.
[8]T 3.
It is said that the documents might shed some light on the good faith of Premier in incurring these costs. It was pointed out, however, that the Spotless Parties do not in their defences raise an issue as to good faith.[9]
[9]T 20. [Check this against defences.]
Next, it was put that the documents might bear upon the issue of causation. Premier must demonstrate that its losses flowed from the wrongful contamination emanating from the neighbouring land. It was put that, had the environmental audit been completed, the Premier land might have been able to be used after modest remediation work. The abandonment of the audit has therefore led to increased losses for Premier. It may be assumed for present purposes that Premier must show that it acted reasonably to mitigate its loss and that its deliberate decision on its part to terminate the more economic remediation course will be a relevant matter at trial. I, of course, express no view as to the prospect of success of such a contention or as to the response to this offered on behalf of Premier. Any document which bears on this issue, however, must be made available for inspection. It is said that the chronology of the documents in question, including the Baker & McKenzie invoices, may also show the extent of its involvement in these contentious matters. I accept that sufficient relevance has been demonstrated to warrant an order for inspection.
Privilege
In her affidavit sworn 25 May, Ms Moon says that she was asked on 25 August 2003 by Mr Smith of Balmain on behalf of Mr Grigg of CFS to provide “a detailed summary of the issues, the strategy proposed and the prospects of the case”. She says that she complied with this request by providing written advices from counsel and summaries of counsel’s advice.[10] Then, with respect to all of the category 1 documents she says this:
“13.All of these documents constitute e-mails, memoranda or correspondence containing references to legal advice provided to the Plaintiff by Baker & McKenzie and/or its counsel.
14.The Plaintiff’s disclosure of legal advice to its financiers was to a limited number of persons and for a limited purpose. The advice was communicated to representatives of the Plaintiff’s financiers for the purpose of keeping them up to date of the status of the proceedings and the views of its legal advisers as to the prospects of the case.
15.The information was disseminated to persons with an obligation to keep the Plaintiff’s affairs confidential. It was not intended that any legal professional privilege be waived.”
[10]Affidavit 25 May, para 11.
In the course of argument some criticisms were addressed to the generality of these three paragraphs. The mere fact that a document is one “containing references to legal advice” does not meet the formal requirements for a claim for privilege of this kind.
Second, it was pointed out that most of the 21 category 1 documents appear from their description not to be communications between Baker & McKenzie and Premier or between Baker & McKenzie or Premier and third parties. The analysis undertaken by counsel for the Spotless Parties of these category 1 documents shows that none was a document passing between Baker & McKenzie and Premier, six passed between Baker & McKenzie and third parties. The remaining 15 documents passed between CFS, AMAL and Balmain. Furthermore, two of the Balmain documents antedate the request of 25 August 2003.
Insofar as these communications contained legal advice given by Baker & McKenzie or counsel to Premier which is protected by privilege, the privilege is asserted by Premier on the basis that the privileged communications containing this advice was passed to and between third parties for a purpose which was limited and confidential and which was related to the pursuit of the litigation. Accordingly, it was contended that no waiver of privilege occurred. Reliance was placed in this regard upon the decision of Giles J in Network Ten Ltd v Capital Television Holdings Ltd[11]. This was a decision upon the waiver of privilege by disclosure by the client to a third party of otherwise privileged documents. Insofar as the otherwise privileged material was communicated between third parties, this waiver is different. In Newcrest Mining (WA) Ltd v Commonwealth[12], French J approached the question on the basis that waiver would arise only where the non-disclosure of the documents would create a relevant unfairness for the applicant parties.
[11](1995) 36 NSWLR 275 at 286.
[12](1993) 113 ALR 370.
In support of the contention of Premier that the privileged communications were released to and passed between the third parties on a limited and confidential basis, counsel relied upon paragraph 15 of Ms Moon’s affidavit which I have set out above. This too was subjected to criticism: it contains nothing more than a bald allegation, of doubtful admissibility, that the recipients of the privileged communications had an obligation of confidentiality. This was backed up by an equally unhelpful assertion, of doubtful relevance, that some unidentified person did not intend to waive privilege in some unidentified circumstances. Notwithstanding this, I was not invited to reject the evidence contained in this paragraph or to permit the deponent to be examined upon it. I therefore proceed on the basis that each of the parties concerned, CFS, AMAL and Balmain, had a legitimate interest in the furtherance of the litigation by Premier, either as a funder or prospective funder or as an advisor or agent of the funder or of Premier in respect of this, and that they had no other interest in doing sending or receiving the documents. I accept that the privileged information was disclosed to each of them in circumstances of confidence and for the purpose of its dissemination between them in the furtherance of that legitimate interest. In the circumstances, I find no waiver. The legal advice remains privileged.
The position with respect to the Royce documents is a little different. Royce itself was a public relations consultant engaged by Premier with respect to the contamination problem on the Premier land. For reasons which were not clear, a copy of privileged legal advice was released to this consultant. It is not suggested that the consultant in the course of its activities placed any of the privileged material in the public domain. In the circumstances, I find that the privileged material was passed to Royce in circumstances where it was confidential and for use for a limited purpose associated with the overcoming or mitigation of the impact on Premier of the contamination problem on the Premier land. There is no waiver.
In the light of this conclusion, I can shortly dispose of the privilege claim for the category 2 documents. These documents are Baker & McKenzie invoices dated between August 2003 and May 2005. The documents contain “detailed descriptions of discussions with the plaintiff and other members of the legal team and often details of advice”. They are therefore privileged in the hands of the client, Premier.[13]
[13]Packer v DCT [1985] 1 Qd R 275 at 281-2, per Andrews SPJ, and at 286, per McPherson J.
These documents, too, were communicated to CFS, AMAL and Balmain in circumstances where they were confidential, they were to be used for a limited purpose and this purpose was for the promotion of the litigation. There is no waiver.
I therefore uphold the claim for privilege for both the category 1 and the category 2 documents. An order for inspection will be refused.
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