Prince v Decision Advantage Pty Ltd
[2001] VSC 131
•4 May 2001
| SUPREME COURT OF VICTORIA | Not Restricted | |
| COMMERCIAL AND EQUITY DIVISION | ||
COMMERCIAL LIST
No. 2086 of 2000 F5200
No. 6833 of 2000 F5206
No. 6887 of 2000 F5270
| MARCUS PRICE AND ORS | Plaintiffs |
| v | |
| DECISION ADVANTAGE PTY LTD AND ORS | Defendants |
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JUDGE: | Mandie J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 April 2001 |
DATE OF JUDGMENT: | 4 May 2001 |
CASE MAY BE CITED AS: | Price v Decision Advantage Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2001] VSC 131 |
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Legal Professional Privilege – whether documents transmitted by solicitor to third party were brought into existence for the dominant purpose of providing legal advice to a party with a common interest or the dominant purpose of obtaining information from that party for use in anticipated or contemplated litigation.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiffs | A. Myers QC | Clayton Utz |
| For the Defendants | N. Young QC and P. Anastassiou | Mallesons Stephen Jaques |
HIS HONOUR:
In the course of the process of discovery of documents in these proceedings, disputes have arisen as to claims by the defendants of legal professional privilege in relation to a number of discovered documents. If these claims are not resolved, I intend to refer them to a Master for hearing. However, I have heard argument concerning two documents (“document 1” and “document 60”) which seem to be of particular importance. I considered it to be appropriate, due to doubts raised by the nature of the material, to inspect the documents (which indeed were offered for inspection by the defendants).
Document 60 is described as “Briefing paper from solicitors acting for Data Advantage Limited, Credit Advantage Limited and Decision Advantage Pty Limited, Ebsworths, to Macquarie Bank”. The claim for privilege is put as follows in an affidavit of John Samaha (a partner of the solicitors for the defendants) sworn on or about 4 April 2001 (paragraph 16):
“The basis of the claim for privilege is that this document contains confidential legal advice concerning alleged improper conduct of Marcus Price and Tony Castagna in which Macquarie Bank and the corporate defendants have a common interest. Further, it was prepared for the purpose of anticipated litigation, including the present wrongful dismissal and Killorgan actions, by solicitors acting for the corporate defendants, Ebsworths.”
Document 60 was accompanied by document 1, a covering letter from Ebsworth & Ebsworth to Macquarie Bank dated 29 May 2000.
Both documents are further described, and the claim to privilege is further supported, by an affidavit of Robert Guy Johnston, another partner of the solicitors for the defendant, sworn 5 April 2001, which in relevant paragraphs deposes as follows:
“4. Item 60 is a confidential briefing paper dated 29 May 2000. The briefing paper was created and prepared by me on the instructions of the Data Advantage Group for provision to Macquarie Bank, for the purposes described in paragraphs 7 and 8 of this my affidavit.
5.The confidential briefing paper deposed to in paragraph 4 of this my affidavit was accompanied by a confidential covering letter of Ebsworth & Ebsworth addressed to Macquarie Bank dated 29 May 2000. That letter was also created and prepared by me on the instructions of the Data Advantage Group for provision to Macquarie Bank, for the purposes described in paragraphs 7 and 8 of this my affidavit.
6.I understand that the confidential briefing paper and the confidential covering letter of Ebsworth & Ebsworth dated 29 May 2000, deposed to in paragraphs 4 and 5 respectively of this my affidavit, were provided to Macquarie Bank by some of the Data Advantage Group’s directors on or about 29 May 2000. I also understand that the defendants in these proceedings claim legal professional privilege and common interest privilege over both the said confidential briefing paper and the confidential covering letter of Ebsworth & Ebsworth, dated 29 May 2000.
7.The confidential briefing paper deposed to in paragraph 4 of this my affidavit, contains reference to legal advice given by me to the Data Advantage Group. The disclosure of confidential and privileged information by the Data Advantage Group to their bank was to inform that bank of Data Advantage Group’s concerns and the legal and factual basis of those concerns, about Decision Advantage – related and Jeremex – related activities of a consultant to the bank, Dr Tony Castagna. This was done for the dominant purpose of obtaining the bank’s assistance in furthering Data Advantage Group’s investigations into Mr Marcus Price’s former employment related activities, including his former employment related activities with Dr Tony Castagna. The investigations were being undertaken in anticipation of litigation. The litigation anticipated was by Mr Marcus Price and Killorgan Investments Pty Limited, the corporate plaintiff in these proceedings, against the Data Advantage Group, including some of the directors of the Data Advantage Group. (Marcus Price having been dismissed by Decision Advantage Pty Limited, some 4 days earlier). Further, it was also anticipated that litigation would be instituted by some or all of the entities within the Data Advantage Group, in connection with the former employment related activities of Mr Marcus Price, including his former employment related activities with Dr Tony Castagna.
8.Furthermore, as deposed to in paragraph 6 of this my affidavit, the disclosure of confidential and privileged information to Data Advantage Group’s bank, was also done in furtherance of Macquarie Bank’s common interest with Data Advantage Group’s investigations into the former employment related activities of Mr Marcus Price and the consulting activities of Dr Tony Castagna, in so far [sic] their activities may have deleteriously affected the Data Advantage Group and the Macquarie Bank.”
The documents were produced shortly after what Mr Price (the plaintiff in two of the proceedings) alleges to have been his wrongful dismissal by Decision Advantage and at a time when litigation by or against him might reasonably have been anticipated (and was so anticipated) by the defendants.
Legal professional privilege at common law protects the contents of documents brought into existence for the purpose of seeking or giving legal advice or, to some extent, for the purpose of preparing for existing or anticipated legal proceedings. It must be shown that such purpose is the dominant purpose for making the document or bringing it into existence (see Esso Australia Resources Ltd v Commissioner of Taxation (1999) HCA 67; 168 ALR 123). Typically, protected documents of the kinds mentioned will be communications between lawyer and client. Documents passing between lawyer or client on the one hand and third parties (who are not agents of the lawyer or client) on the other hand may also be protected. For present purposes (and in brief), a document passing from a client’s lawyer to a third party will be protected by privilege if:
(a)it is already a privileged document (eg legal advice to the client) and the third party has a “common interest” with the client in receiving the contents thereof; or
(b)it has been made or brought into existence for the dominant purpose of use in or preparation for existing or anticipated litigation including the purpose of obtaining evidence or information for that litigation.
Looking at document 1, the covering letter, it is an original communication (marked “private and confidential”) from Ebsworth & Ebsworth, in their capacity as solicitors for the Data Advantage Group of companies, to Macquarie Bank and thus is on its face brought into existence for the purpose of communicating with that third party. The letter informs Macquarie Bank that one of the Bank’s executives, Tony Castagna, has been an adviser to the Data Advantage Group and that recently there had been several very serious concerns held by Data Advantage in relation to Castagna’s conduct. The letter goes on to say:
“Data Advantage is undertaking certain further investigations and enquiries itself. However, because of the corporate governance issues raised, Data Advantage has also thought it appropriate to refer the matters of concern to Macquarie Bank. Data Advantage requests Macquarie Bank to assist in its further investigations.
Enclosed with this letter is a confidential briefing paper together with a bundle of relevant documents.
These papers have been prepared by Ebsworth & Ebsworth for the purposes of anticipated litigation. They are provided to you on a confidential basis to assist the Bank with any enquiries it may consider it appropriate to pursue.” (Emphasis added.)
The letter goes on to stress the confidentiality of the documents.
The enclosed briefing paper (Document 60) on its face appears to be a document prepared by the solicitors on behalf of the Board of Data Advantage for the specific purpose of briefing Macquarie Bank about the alleged activities of Castagna and to request the Bank’s assistance in investigating those activities. Although endorsed with the words “Confidential”, “Client Legal Privilege” and “Prepared for the purposes of litigation”, the briefing paper is introduced by words suggesting certain broad purposes of the Board of Data Advantage as follows:
“This document outlines the areas of concern currently held by the Board of Data Advantage Limited (‘Data Advantage’) in relation to the conduct of one of its advisers, Tony Castagna (a Macquarie Bank executive and one of the core members of the Macquarie Assignment Team).
The Board is undertaking further investigations and enquiries itself, however, because of the corporate governance issues raised, the Board has also thought it appropriate to refer the following matters for investigation to Macquarie Bank.” (Emphasis added.)
Four areas of the Board’s “concerns” are then set out followed by nine sections of detailed factual allegations referring to Castagna, Marcus Price and others, and containing numerous references therein to conduct which the “Board of Data Advantage considers… to be a very serious matter” and in relation to which the Board of Data Advantage “requires Macquarie Bank’s assistance in investigating” various specified aspects of the alleged conduct including the receipt of any personal benefit or benefits.
In the course of setting out the detailed factual allegations, aspects of the alleged conduct are briefly characterised at various points in the document as constituting a breach of duties of disclosure and as a conflict of interest.
In my opinion, having inspected the documents, there is no basis for the claim contained in Mr Samaha’s affidavit that the documents contain confidential legal advice or, as was submitted, that the documents represented legal advice from solicitor to client being passed on to the Bank, which had a common interest in such legal advice. The documents do not take the form of legal advice. It may be the case that the brief characterisations of aspects of the alleged conduct, to which I have referred, reflect conclusions expressed by the solicitors to the client but they were not passed on as such. It is clear that the documents were not at all produced for the purpose of conveying legal advice or the contents of legal advice but were produced for the purpose of requesting the Bank to conduct certain investigations. Mr Johnston swears that the briefing paper contains “reference to legal advice given by me to the Data Advantage Group” but there is no such “reference” except in the sense, no doubt intended by Mr Johnston, that the Bank was being informed of the “legal and factual basis of [Data Advantage Group’s] concerns”.
Next, although both the covering letter and the briefing paper refer to preparation for the purposes of anticipated litigation, an examination of the documents does not confirm that they were so brought into existence, as Mr Johnston deposes, or created “for the dominant purpose of obtaining the Bank’s assistance in furthering Data Advantage Group’s investigations into Mr Marcus Price’s former employment related activities with Dr Tony Castagna”. While it is clear that the documents were brought into existence in order to request the Bank to investigate the alleged conduct of Dr Castagna and the related matters set out therein, it is also clear both from the covering letter and the briefing paper that the request to the Bank was made, as stated, “because of the corporate governance issues raised”. The emphasis is on the investigation of the alleged activities of the Bank’s own executive, Dr Castagna. It is not stated that the Bank is being asked to collect information or evidence for anticipated or contemplated litigation by or against Price or any other person or for any other relevant anticipated litigation. The circumstances in which these documents came to be created and upon what instructions from the clients is not satisfactorily detailed or disclosed. The general assertions on affidavit by the solicitors are not sufficiently supported by reference to any such circumstances or by the terms of the documents themselves. I am not satisfied, on the material before the Court, that the dominant purpose actuating the solicitors or their clients in producing these two documents was to obtain evidence or information for use in litigation.
Accordingly, the claim of privilege in relation to these two documents is rejected and an order will be made permitting their inspection.
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