Re Forge Group Construction Pty Ltd (in Liq); Ex parte Jones [No 2]
[2016] WASC 87
•18 MARCH 2016
RE FORGE GROUP CONSTRUCTION PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED); EX PARTE JONES [No 2] [2016] WASC 87
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 87 | |
| Case No: | COR:28/2015 | 20 NOVEMBER 2015 | |
| Coram: | TOTTLE J | 18/03/16 | |
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to inspect and copy subpoenaed documents dismissed | ||
| B | |||
| PDF Version |
| Parties: | MARTIN BRUCE JONES BENJAMIN MICHAEL JOHNSON (Joint and Several Liquidators of Forge Group Construction Pty Ltd) |
Catchwords: | Evidence Privilege Legal professional privilege Dominant purpose test Where more than one purpose Applicants sought to prove documents were created for an improper purpose Where applicants claim liquidators acted on request of receivers Where applicants seek leave to inspect documents in order to discharge examination summonses Whether the ultimate objective of party making the communication or producing the document is dominant purpose Dominant purpose ascertained objectively by looking at each individual document Evidence Privilege Legal professional privilege Common interest privilege Waiver Whether privilege attaching to document waived by providing document to a third party Privilege upheld Liquidators and receivers have a common interest in assets of company and duties to company Evidence Privilege Legal professional privilege Advice privilege Litigation privilege Whether documents prepared by receivers' solicitors for liquidators' solicitors for purpose of giving legal advice to liquidators is privileged Practice Production of documents Where applicants seek to discharge examination summonses Corporations Act 2001 (Cth) s 596B Where applicants claim subpoenaed documents relevant to application to discharge examination summonses Where applicants submit receivers requested liquidators apply for examination summonses Whether plaintiff liquidators acted for improper purpose Where applicants claim examination brought for improper purpose of assisting receivers in separate arbitration proceedings Where co-operation between liquidators and receivers as to the conduct of the examination Whether plaintiff liquidators sought to satisfy themselves of proper purpose for examination summonses Practice Subpoenaed documents Produced documents Application to inspect and copy Objection to inspection Relevance test not applied Consideration of case management principles and efficient administration of justice not applied Legal professional privilege considered |
Legislation: | Rules of the Supreme Court 1971 (WA), O 36B r 9(3) |
Case References: | AW v Raney [2010] WASCA 161 AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382 Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 Hansfield Developments v Irish Asphalt Ltd [2009] IEHC 420 Marshall v Prescott [2013] NSWCA 152 Wookey v Quigley [No 5] [2011] WASC 275 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
MARTIN BRUCE JONES
BENJAMIN MICHAEL JOHNSON
(Joint and Several Liquidators of Forge Group Construction Pty Ltd)
Plaintiffs
Catchwords:
Evidence - Privilege - Legal professional privilege - Dominant purpose test - Where more than one purpose - Applicants sought to prove documents were created for an improper purpose - Where applicants claim liquidators acted on request of receivers - Where applicants seek leave to inspect documents in order to discharge examination summonses - Whether the ultimate objective of party making the communication or producing the document is dominant purpose - Dominant purpose ascertained objectively by looking at each individual document
Evidence - Privilege - Legal professional privilege - Common interest privilege - Waiver - Whether privilege attaching to document waived by providing document to a third party - Privilege upheld - Liquidators and receivers have a common interest in assets of company and duties to company
Evidence - Privilege - Legal professional privilege - Advice privilege - Litigation privilege - Whether documents prepared by receivers' solicitors for liquidators' solicitors for purpose of giving legal advice to liquidators is privileged
Practice - Production of documents - Where applicants seek to discharge examination summonses - Corporations Act 2001 (Cth) s 596B - Where applicants claim subpoenaed documents relevant to application to discharge examination summonses - Where applicants submit receivers requested liquidators apply for examination summonses - Whether plaintiff liquidators acted for improper purpose - Where applicants claim examination brought for improper purpose of assisting receivers in separate arbitration proceedings - Where co-operation between liquidators and receivers as to the conduct of the examination - Whether plaintiff liquidators sought to satisfy themselves of proper purpose for examination summonses
Practice - Subpoenaed documents - Produced documents - Application to inspect and copy - Objection to inspection - Relevance test not applied - Consideration of case management principles and efficient administration of justice not applied - Legal professional privilege considered
Legislation:
Rules of the Supreme Court 1971 (WA), O 36B r 9(3)
Result:
Application for leave to inspect and copy subpoenaed documents dismissed
Category: B
Representation:
Counsel:
Plaintiffs : Mr J C Vaughan SC
Applicants : Mr C G Colvin SC & Mr G D Cobby
Subpoena Addressees : Mr M Holler
Solicitors:
Plaintiffs : Lavan Legal
Applicants : Herbert Smith Freehills
Subpoena Addressees : Norton Rose Fulbright Australia
Case(s) referred to in judgment(s):
AW v Raney [2010] WASCA 161
AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
Hansfield Developments v Irish Asphalt Ltd [2009] IEHC 420
Marshall v Prescott [2013] NSWCA 152
Wookey v Quigley [No 5] [2011] WASC 275
1 TOTTLE J: Mr Juyeul Son, Mr Anthony Clifford and Samsung C&T Corporation (Samsung) (collectively the applicants) have applied for leave to inspect and copy documents produced to the court in answer to subpoenas issued to Mr Scott Langdon, Mr Mark Mentha and KordaMentha Pty Ltd.
2 The procedural context of this application is as follows.
3 On 17 February 2015, on the application of Mr Martin Jones and Mr Benjamin Johnson, in their capacity as the joint and several liquidators of Forge Group Construction Pty Ltd (the liquidators and Forge respectively), Master Sanderson made orders pursuant to s 596B of the Corporations Act 2001 (Cth) for the examination of Mr Son, Mr Clifford and Mr David Brough. The Master also ordered that Samsung produce certain specified books.
4 Messrs Langdon and Mentha were appointed Receivers and Managers of Forge on 11 February 2014. KordaMentha Pty Ltd is the company through which their professional practice is conducted. Unless it is necessary to distinguish between them, I will refer to Messrs Langdon and Mentha and KordaMentha Pty Ltd as the 'receivers'. The receivers were appointed by ANZ Fiduciary Services Ltd pursuant to a General Security Agreement registered over the assets of Forge as security for advances made by various financiers (the Financiers).
5 On 2 April 2015 the applicants filed an interlocutory process to discharge the examination summonses so far as they related to them. The application to discharge is being case managed by Chaney J.
6 On 10 April 2015 the applicants' solicitors caused subpoenas to be issued to Messrs Langdon and Mentha and KordaMentha Pty Ltd requiring them to produce documents generated between 11 February 2014 and 27 February 2015:
(a) containing or recording any request by the receivers to the liquidators to seek the examination orders;
(b) recording or referring to the reasons or the purpose or purposes for making any such request; and
(c) relating to or concerning the making of any such request.
7 The examination summonses and the subpoenas have generated a substantial amount of correspondence. With isolated exceptions, this correspondence has been exchanged between the solicitors for the applicants, Herbert Smith Freehills (HSF - Mr Ante Golem), the solicitors for the receivers, Norton Rose Fulbright Australia (NRF - Mr Chris McLeod and Mr Dylan McKimmie), and the solicitors for the liquidators, Lavan Legal (Lavan - Ms Alison Robertson and Mr Gavin Rakoczy).
8 NRF, on behalf of the receivers, answered the subpoenas in stages. On 13 May 2015 NRF produced to the court a memorandum dated 22 May 2014 from NRF addressed to Lavan to which were annexed a number of documents. A claim for common interest privilege was made in respect of the memorandum and its attachments. The claim was articulated as follows:
The document contains confidential legal advice to another party which commonly shares an interest with our clients in the prospective public examinations of Mr Juyeul Son, Mr Anthony John Clifford, and Mr David Brough.
9 On 26 May 2015 NRF produced six lever arch files of documents. On behalf of the receivers, NRF claimed that the documents contained in five of the files were the subject of legal professional privilege on the basis that, all but two of the documents, comprised confidential communications passing between the receivers and the in-house legal representatives of the secured creditor for the dominant purpose of obtaining or providing legal advice about the management of the receivership. The other two documents were said to comprise confidential communications between the receivers and in-house counsel constituting internal communications which disclose legal advice in a way that is not inconsistent with the maintenance of professional privilege over that advice. On that basis, it was said that those two documents were covered by legal professional privilege.
10 NRF claimed that the documents in the remaining file were the subject of common interest privilege on the basis that the documents
contained legal advice to another party which commonly shares an interest with our clients in the prospective public examinations of Mr Juyeul Son, Mr Anthony John Clifford and Mr David Brough.
11 In addition to the claims of legal professional privilege and common interest privilege it was contended on the receivers' behalf that the documents produced in answer to the subpoena were outside the scope of the subpoenas and were commercially confidential and sensitive, and objection to their production was taken on those grounds.
12 As a result of case management directions made by Chaney J, the five files of documents in respect of which legal professional privilege was claimed were reduced to one file. The receivers' solicitors colour coded parts of the documents in that file to indicate those parts to which different objections to production were taken. In many instances, there was an overlap between the objections: that is, production of parts of the documents was objected to on more than one ground. There was a high level of co-operation between solicitors and counsel for the parties in their approach to the resolution of the objections to the production of the subpoenaed documents. This manifested itself in the development of agreed principles to be applied in considering whether leave to inspect the subpoenaed documents should be granted. These principles were set out in 'joint submissions' which were filed in advance of the hearing. The principles were varied slightly in the course of the hearing and, in their varied form, were as follows:
1. Those portions of the documents produced to the Court in answer to the subpoenas which do not:
(1) contain or record a request by the Receivers (by their servants agents or otherwise, including Norton Rose Fulbright (NRF) to the Liquidators (by their servants agents or otherwise, including Lavan Legal (Lavan)) that the Liquidators apply to examine any of the Examinees; or
(2) record or refer to the reason or reasons for making any such request; or
(3) comprise a communication between the Receivers (by their servants agents or otherwise, including NRF) and Australia and New Zealand Banking Group Ltd or ANZ Fiduciary Services Pty Ltd in its capacity as the Security Trustee relating to or concerning the making of a request that the Liquidators apply to examine any of the Examiners,
may be removed or redacted.
2. A communication between the Receivers or between any of the Receivers and one or more of their employees disclosing or restating legal advice received by the Receives from NRF is privileged.
3. A communication by the Receiver or their employees to the Financiers which discloses or restates legal advice provided to the Receivers by NRF is privileged.
4. A communication by the Receivers or their employees to any person recording, disclosing or stating the reason or reasons why the Receivers wish the Examinees to be examined is in dispute as to whether it is privileged.
5. A communication by NRF or the Receivers with Lavan Legal or the Liquidators concerning the terms on which the Receivers might agree to fund:
(1) any consideration by the Liquidators of a request by the Receivers that the Liquidators conduct the Examinations; or
(2) the conduct of the Examinations by the Liquidators,
is not privileged.
6. Whether a communication by the Liquidators (by their servants agents or otherwise, including Lavan) to the Receivers (by their servants agents or otherwise, including NRF) which discloses or restates legal advice provided to the Liquidators is privileged is in dispute.
7. The sections of the Order 1 Documents referred to in the Affidavit of Scott Harry Langdon dated 20 August 2015 redacted and coloured blue are in dispute as to whether they may be inspected and are to be left for determination by the Court.
13 As there was a real possibility that the judge hearing the application for inspection would be invited to inspect the documents Chaney J referred the application for hearing before another judge.
14 I heard the application on 20 November 2015. Following the hearing, the receivers' solicitors filed two folders of documents reproducing extracts of the subpoenaed documents. The first of these folders was filed on 11 December 2015 and comprised the documents produced on 13 May 2015 and the documents in respect of which common interest privilege was claimed, colour coded to show the basis upon which objection was taken to the disclosure of the whole or parts of those documents. The second folder of documents was filed on 23 December 2015. This was a reproduction of the single file of extracts from the original five files of documents in respect of which legal professional privilege was claimed. The extracts had been re-colour coded in the light of the agreed principles (those principles had not been developed at the time the original file was compiled). My task has been made easier by the production of the colour coded and redacted folders and I express my appreciation to those responsible.
The evidence
15 The applicants read and relied upon:
(i) three affidavits of Mr Golem sworn on 2 April 2015, 8 April 2015 and 17 July 2015 respectively; and
(ii) an affidavit of Martin Bruce Jones sworn on 9 February 2015 (the confidential affidavit).
16 The liquidators read and relied upon an affidavit of Ms Robertson, sworn on 17 November 2015.
17 The receivers read and relied upon:
(i) two affidavits of Mr McLeod sworn on 10 July 2015 and 5 August 2015; and
(ii) an affidavit of Mr Langdon sworn on 20 August 2015.
Principles governing inspection of subpoenaed documents
18 The inspection of documents produced pursuant to a subpoena is regulated by Rules of the Supreme Court 1971 (WA) O 36B r 9(3). This rule provides that no one may inspect a document or thing produced in answer to a subpoena unless the Court has granted leave and the inspection is in accordance with that leave. The receivers and the liquidators oppose the grant of leave to inspect any of the produced documents.
19 The relevant principles were summarised by Beech J in Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] - [21].
The first question is whether the documents, or the passages to which objection is taken, have apparent relevance to the litigation.
Apparent relevance is a low threshold. It is not a question of whether it appears that the party issuing the subpoena could, or could probably, tender the document in evidence. It is enough to establish apparent relevance if a document or class of documents gives rise to a line of enquiry relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination: Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 at 374; Stanley v Layne Christensen Co [2004] WASCA 50 [9]; Commonwealth v Albany Port Authority [2006] WASCA 185 [18].
In advance of trial, the determination of whether a document is relevant is a difficult one: National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372 at 385; Apache Northwest Pty Ltd (373).
In determining relevance, the difficulty of assessing relevance prior to trial must be taken into account. The necessity for having a document in order to fairly dispose of the issues at trial might well not become apparent before trial: Apache Northwest Pty Ltd (374, 376, 379); Stanley v Layne Christensen Co [9]; Commonwealth of Australia v Albany Port Authority [18].
Ultimately the relevance of the documents produced will be a question for determination at the trial. It is not appropriate for the court to embark on a detailed preliminary enquiry involving evidence from the party seeking to issue the subpoenas and the recipient of the subpoenas: Apache Northwest Pty Ltd (379).
Documents can be inspected whether or not they are in an admissible form: Waind (385); Apache Northwest Pty Ltd (372).
One object of the rule permitting early return of subpoenas is to appraise the parties of the strengths and weaknesses of their case at an early stage in proceedings. Accordingly, a narrow view should not be taken as to the legitimate purposes of a subpoena of apparent relevance: Stanley v Layne Christensen Co [9]; Commonwealth v Albany Port Authority [18].
The determination of whether inspection should be permitted of documents produced on subpoena is separate from the question of whether to grant leave to issue the subpoena: Waind (381); Apache Northwest Pty Ltd (371); Stanley v Layne Christensen Co [11]-[13].
Further, the question of inspection is distinct from the question of whether a document may be tendered at trial: Waind (381); Apache Northwest Pty Ltd (371). The tests are very different. Many documents might meet the apparent relevance threshold for inspection, but fall well short of being sufficiently relevant to be admissible at trial.
If a document is apparently relevant, inspection will usually be permitted, even though it is not admissible as it stands and the party seeking the document has not undertaken to tender it or use it in cross-examination: Waind (385); Apache Northwest Pty Ltd (373-374).
Confidentiality is not of itself a ground to refuse inspection of an apparently relevant document. In the end, the public interest in the administration of justice prevails over the interest in confidentiality of the information: Apache Northwest Pty Ltd (379); Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 38. However, confidentiality can be taken into account, together with any assessment of the extent of the document's apparent relevance, in the exercise of discretion whether to permit inspection: Apache Northwest Pty Ltd (380-381).
The principles of case flow management and the objects in O 1 r 4(b) of the Rules of the Supreme Court 1971 (WA) must be kept in mind in the exercise of discretion whether to permit inspection: Wookey v Quigley (No 5) [2011] WASC 275 [35].
Legal professional privilege - relevant principles
20 There was no dispute between the parties as to the relevant principles in relation to legal professional privilege. They were summarised by McLure P in AW v Raney [2010] WASCA 161 at [17] - [20] and [23] - [25]:
Advice privilege attaches to confidential communications made for the dominant purpose of obtaining or giving legal advice. The traditional formulation of litigation privilege is that it applies to confidential communications passing between a client, the client's legal adviser and third parties for the dominant purpose of use in litigation which is either pending or in contemplation. There must be a real prospect of litigation as distinct from a mere possibility: Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59.
Legal professional privilege extends to material prepared for the dominant purpose of communication to the legal adviser even if the communication has yet to occur: Grant v Downs (1976) 135 CLR 674, 690.
Legal professional privilege ordinarily protects communications rather than documents; the test for privilege is anchored to the purpose for which the document was brought into existence: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501. Thus, legal professional privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfies the dominant purpose test: Propend (507) (Brennan CJ), (544) (Gaudron J), (553 - 554) (McHugh J), (571 - 572) (Gummow J) and (587) (Kirby J).
There is a qualification to the general rule. Legal professional privilege also protects from disclosure documents that record legal work carried out by the lawyer (such as research and file notes) for the benefit of the client whether or not they are, or are intended to be, provided to the client: Propend (550) (McHugh J); Trade Practices Commission v Sterling (1979) 36 FLR 244, 245-246 (Lockhart J); Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325, 333 - 334 (Anderson J).
…
The party resisting disclosure carries the onus of proving that legal professional privilege applies: Grant v Downs (689).
A dominant purpose is one that predominates over other purposes; it is the prevailing or paramount purpose: Pratt Holdings Pty Ltd v Cmr of Taxation (2004) 136 FCR 357 [35]. Where the question involves a document, the relevant purpose is the purpose for bringing into existence the document containing or comprising part of the confidential communications: Grant v Downs (688, 694).
The purpose for which a communication is undertaken or a document is brought into existence is a question of fact that must be determined objectively; evidence of the intention of the person who made, or caused to be made, the document is not conclusive: Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 [30].
21 That a document was produced with other purposes in mind does not preclude it being accorded the privilege so long as the dominant purpose was the obtaining or giving of legal advice or use in pending or contemplated litigation. A document is not privileged from production where there are two purposes of equal weight and neither is dominant in the relevant sense: AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382 [106] (Young J).
22 Determining what is the dominant purpose is a question of fact to be resolved objectively with regard to the evidence, the nature of the document and the parties' submissions, per Young J in AWB at [110].
23 Common interest privilege is derivative. It applies where material subject to legal professional privilege in the hands of one person is provided to another with a presently existing common interest. In Marshall v Prescott [2013] NSWCA 152, Barrett JA, (with whose reasons McColl and Ward JJA agreed), at [63] to [65] cited with approval the decision of McKechnie J in the Irish case of Hansfield Developments v Irish Asphalt Ltd [2009] IEHC 420 [53]:
A succinct description of the necessary process of analysis appears in the judgment of McKechnie J in the Irish case of Hansfield Developments v Irish Asphalt Ltd [2009] IEHC 420 at [53]. The first step, it was said, is to determine by normal standards whether the document would be privileged in the hands of the party communicating the information, assuming that no disclosure had in fact been made. If it is found that the documents would be so privileged, the court must proceed to the second step which is to ask whether the relationship between the parties was sufficiently close that the transmission of documents should not be held to amount to an implied waiver of the privilege. The nature of that assessment was described in this way (also at [53]):
'In considering this the Court should take into account the relationship between the parties, as well as the nature and purpose of the disclosure and whether there could be held to be an objective intention to waive privilege on the part of the holder.'
McKechnie J continued:
'Privilege should not be overborne lightly, and therefore the ultimate question must be whether it is reasonable in the circumstances to conclude that there was an implied waiver of the privilege. If such an implied waiver cannot be found, the Court should not otherwise interfere.'
This formulation in terms of implied waiver and intention to waive represents, in my opinion, an accurate summation of the relevant principle. Normally, disclosure of protected content by the holder of the privilege causes the privilege to be lost. This is because of the inherent inconsistency between failing to safeguard the confidentiality essential to privilege and, at the same time, seeking to maintain the immunity that the privilege confers. Where there is, in relation to actual or pending litigation (or its course or outcome), a commonality of interest between, on the one hand, a party to the litigation who is also the holder of the privilege and, on the other, the person to whom disclosure of the privileged content is made by that party for a purpose relevant to that litigation, the commonality of interest supplies a rational basis for inferring an intention that the party's confidentiality should continue and the party's privilege should be maintained, even though the subject matter of the disclosure has passed into the hands of the other person.
The parties' submissions
24 The applicants' submissions start from the proposition that the examination summonses were issued for the improper purpose of assisting the receivers with claims made in arbitral proceedings against Samsung that the applicants allege are being pursued in the interests of the Financiers rather than for the purposes of securing any real benefit for Forge, its contributories or creditors. It was submitted that the receivers' improper purpose infected the decision of the liquidators to seek examination summonses.
25 Against the background of that overarching proposition the applicants developed a number of contentions. In outline they were as follows.
26 First, it is contended that the description of the documents produced and their general nature satisfies the low relevance threshold. Secondly, the applicants reject the receivers' claims that some of the documents produced are not 'within the scope of the subpoena' given the time taken to answer the subpoena and the evident care taken by NRF in doing so. Thirdly, the applicants contend that the communications between the receivers and the Financiers were not the subject of any form of legal professional privilege. Fourthly, the applicants contend that the dominant purpose of the communications between NRF and Lavan was to persuade the liquidators to apply for examination summonses and thereafter to settle the terms, particularly, the terms as to funding, on which the liquidators would apply for and undertake the summonses. Fifthly, the applicants submitted that the evidence relied upon to sustain the claims of privilege was inadequate. The applicants made the point that legal professional privilege and in particular, common interest privilege, is not established by merely labelling communications as being subject to 'common interest privilege'.
27 The receivers argued that the low relevance threshold had not been satisfied. It was submitted that the crux of the issue raised by the application to discharge the examination summonses was whether the receivers' claims were made solely in the interests of the Financiers and not for the purpose of securing any real benefit for Forge, its contributories or creditors. In those circumstances it was submitted that it is unsurprising the receivers' documents do not shed any light on whether the claims, if successful, will result in any benefit to any other creditor of Forge. Secondly, the receivers argued that their reports to the Financiers constituted secondary evidence that if disclosed would reveal the content of communications between NRF and the receivers made for the purpose of communicating legal advice. Thirdly, in so far as the contents of the documents comprise statements about the receivers' strategy or the merits of the claims, the receivers submit that they should not be disclosed. Fourthly, it was submitted that it was not necessary in the proper administration of justice to allow inspection and allowing inspection of a large volume of documents that required redaction would be contrary to case management principles. By way of an all-encompassing submission it was contended that allowing inspection would permit a 'foray into fields of documentary irrelevance': cf the observations of Kenneth Martin J in Wookey v Quigley [No 5] [2011] WASC 275 [35] - [37], [63].
28 It was submitted on the liquidators' behalf that their claims for privilege were squarely within the established principles when regard was had to Ms Robertson's affidavit evidence. Within that general framework emphasis was placed on a number of matters: first, it was contended that there was a clear common interest between the receiver and the liquidators: each had a duty and an interest in getting in Forge's assets and investigating the potential causes of action available to Forge. Secondly, the liquidators had made it clear that they required legal advice in order to decide whether to apply for examination summonses. It was contended that it was the liquidators' purpose in requesting advice that had to be considered in the assessment of the 'dominant purpose'. Information and advice provided by NRF to Lavan so that they could provide the independent legal advice sought by the liquidators attracted privilege. Thirdly, my attention was drawn to the fact that it was not only 'advice' privilege that was relevant. The fact that proceedings were contemplated gave rise to litigation privilege. Fourthly, it was submitted that the applicants' characterisation of 'purpose' of NRF's communications as being to persuade the liquidators to undertake the examinations was too broad. It is necessary to consider the purpose for bringing each document into existence.
29 Finally, I record that all the parties agreed that I should inspect the documents to assist me in the determination of the application.
Disposition
30 I have inspected the documents and considered each document individually. I set out my reasons in relation to each document or group of documents.
Redacted extract of memorandum dated 22 May 2014 and enclosures 2.7 to 2.10 (produced to the court on 13 May 2015)
31 Ms Robertson's evidence was to the effect that the memorandum was brought into existence to assist Lavan in providing advice to the liquidators about the merits of the proposed examinations and about the preparation and conduct of the examinations. Ms Robertson deposed the memorandum provided Lavan and the liquidators with an analysis of the legal issues in dispute between Forge and Samsung and thereby informed Lavan and the liquidators of the potential legal claims available to Forge against Samsung and the basis of those claims together with NRF's opinions on the merits of the claims. Ms Robertson deposed that she was involved in discussions with NRF and the receivers and the liquidators concerning the creation of the memorandum for the reasons outlined.
32 The document is couched in terms that inform the reader of the matters to which Ms Robertson deposes. I accept that it was created against the background that receivers wanted the liquidators' assistance in the form of undertaking the examinations but the existence of that general desire on the part of the receivers does not determine the purpose for which this document was created. On the basis of Ms Robertson's evidence and my own assessment of the document I find that the purpose of bringing the memorandum and its annexures into existence was to enable Lavan to provide legal advice to the liquidators on the merits of the proposed examinations. Accordingly, the memorandum and its annexures are the subject of legal professional privilege.
Disposition of claims in respect of documents contained in folder filed on 11 December 2015
Document 1 - email from Mr Langdon to Mr Robert Kelly and Mr Simon Bellas sent on 10 April 2014 responding to an email from Mr Kelly to Mr Langdon
33 In his affidavit of 5 August 2015 at pars 5 and 6 Mr McLeod deposes that this email responds to a request from Mr Kelly, of one of the Financiers, for a summary of legal advice. Having inspected the document, I am satisfied that it sets out in summary form legal advice that had been obtained by the receivers and that inspection of the document by the applicants would disclose that legal advice. I am satisfied that the document is covered by legal professional privilege and should not be inspected.
Document 2 - email from Mr Robert Kelly to Mr Simon Langdon sent on 10 April 2014
34 This email is part of the same email chain as document 1 and is subject to legal professional privilege and should not be inspected.
Document 3 - email sent on 22 May 2014 by Mr McLeod to Ms Robertson and Mr Rakoczy attaching 22 May 2014 memorandum
35 In her affidavit sworn on 17 November 2015 Ms Robertson deposed that the email contains legal opinions and conclusions expressed by Mr McLeod sent to her to assist her in advising the liquidators about the commencement of the examination proceedings.
36 Having inspected the email, I conclude that it is privileged for the same reasons as the memorandum of advice of 22 May 2014 is privileged.
Documents 4, 5, 6, 7, 8, 9 and 10 - email chain comprising emails exchanged on 22 and 23 May 2014 between Mr McLeod and Ms Robertson and Mr Rakoczy
37 These emails fall within agreed principle 1 and, accordingly, should not be inspected.
Document 11 - email sent on 13 June 2014 from Ms Francesca Fogliani of Lavan to Mr McLeod and Mr McKimmie attaching letter from Ms Robertson to Mr McLeod and Mr McKimmie
38 The receivers propose that redacted versions of the email and letter only be inspected. The redactions are to remove the name of a third party unrelated to any issue concerning the applicants and to remove an extract from the letter which discloses the substance of legal advice provided to the liquidators in circumstances in which the receivers and the liquidators have a common interest.
39 I am satisfied that the redaction to remove the name of the third party falls within agreed principle 1. I am satisfied that the redaction to remove the other material from the letter to which I have referred is necessary to avoid the disclosure of the substance of legal advice. Essentially for the reasons advanced by the liquidators I am satisfied that there is a sufficient degree of common interest between the receivers and NRF and the liquidators and Lavan to establish the requisite degree of common interest for disclosure by Lavan to NRF not to amount to an implied waiver of privilege.
Document 12 - email dated 2 September 2014 sent at 7.03 pm by Mr Gavin Rakoczy to Mr Chris McLeod
40 The email falls within the agreed principle 1.
41 As to the advice, Ms Robertson deposed that the email attached counsel's advice concerning the merits of the proposed examinations and that the advice was privileged. The privilege is not waived by the disclosure because there is a sufficient degree of common interest between the receivers and the liquidators and their respective lawyers.
Document 14 - email sent on 18 September 2013 by Mr Rakoczy to Mr McLeod at 2.42 pm with attached paper
42 Ms Robertson deposed that the paper entitled 'Forge Examinations: Examinations Background' was prepared to assist the liquidators in determining the breadth of the examinations to be carried out and that it was sent to the receiver's solicitors as it was thought that they might be able to provide additional information which would be of benefit to the liquidators in the preparation of the examination proceedings.
43 I am satisfied that the examinations paper was prepared in anticipation of the examination proceedings and for the purposes of providing advice to the liquidators and is thus privileged. I am satisfied that the privilege was not waived by the provision of the document to the receivers' solicitors.
44 The email falls within agreed principle 1.
Document 15 - email sent on 19 September 2014 at 11.13 am by Mr McLeod to Mr Rakoczy attaching a revised version of the Forge Examinations: Examinations Background paper sent under cover of Lavan Legal's email of 18 September 2014
45 Ms Robertson deposed that the email and a revised version of the paper was brought into existence to assist Lavan and the liquidators by drawing upon the greater knowledge of the receivers and their solicitors. I am satisfied that the document is the subject of legal professional privilege.
Document 16 - email sent on 13 November 2014 at 11.12 am by Mr Joseph Abberton to Mr McLeod attaching letter from Mr Abberton to Mr McLeod
46 No claim for legal professional privilege is maintained in respect of the email and letter. Having inspected the documents, I am satisfied that they fall within agreed principle 1 and thus should not be disclosed to the applicants.
Document 17 - email sent on 16 December 2014 at 2.49 pm by Mr McLeod to Mr Rakoczy attaching a memorandum dealing with various aspects of the examination proceedings
47 Ms Robertson deposed that the memorandum was brought into existence at the instigation of Lavan Legal to assist them in relation to the examination proceedings. Both the email and the memorandum are the subject of legal professional privilege.
Document 18 - email sent on 18 December 2014 at 2.45 pm by Mr McKimmie to Mr Rakoczy and attachments
48 Ms Robertson deposed that the email and attachments were provided by NRF to Lavan to assist them in providing legal advice to the liquidators in relation to potential topics for examination in the examination proceedings and to also provide an analysis of the claims available to Forge against Samsung to assist in providing advice to the liquidators. The email falls within agreed principle 1. The memorandum is the subject of legal professional privilege. For the reasons given in relation to the documents to which I have already referred privilege was not waived.
Document 19 - email sent on 2 February 2015 at 5.46 pm by Mr Rakoczy to Mr McKimmie of NRF
49 No claim for legal professional privilege is maintained in respect of the email and its attachment. Having inspected the documents, I am satisfied that they fall within agreed principle 1 and thus should not be disclosed to the applicants.
Document 21 - email sent on 3 February 2016 at 2.44 pm by Mr McLeod to Mr Rakoczy
50 Having inspected the document, I am satisfied that it falls within agreed principle 1.
Documents for which legal professional privilege claimed included in folder filed on 23 December 2015
51 In his affidavit sworn on 20 August 2015 Mr Langdon confirmed evidence that had been given by Mr McLeod to the effect that he, Mr Langdon, reported to the Financiers by providing monthly reports termed 'update reports' and by holding face-to-face meetings with representatives of the Financiers referred to as 'strategy days' or 'strategy sessions'. In advance of these meetings, Mr Langdon and his staff prepared 'strategy reports'. I will refer to the update reports and the strategy reports collectively as 'the reports'.
52 Mr Langdon deposed that the reports dealt with a wide range of matters. Forge's claims against Samsung were only one of many matters dealt with in the reports. Mr Langdon also deposed that he received advice from NRF on an ad hoc basis reflecting the demands and pressures of a busy receivership. He deposed that the content of legal advice was summarised for inclusion in the reports without express identification that the summary was derived from legal advice provided by NRF.
53 I have inspected each of the documents, I am satisfied that most of the content of the documents falls within agreed principle 1. I am satisfied that those parts of the documents for which claims for legal professional privilege have been made contain what appears to be a synthesis of legal advice and comment from the receivers. Disclosure of those parts of the documents would involve disclosure of the substance of legal advice and for that reason inspection should not be permitted. Further, they fall within agreed principle 3.
54 For the reasons I have given above the applicants should not be permitted to inspect any of the documents produced in answer to the subpoena.
Concluding observation
55 It will be apparent from my reasons that I have resolved the issues in relation to each document or group of documents by reference to agreed principles 1 and 3 and by determining whether the documents are the subject of legal professional privilege and common interest privilege. It has not been necessary for me to give close consideration to whether the documents satisfy the apparent relevance test or whether having regard to the principles of case management it is in the interests of the administration of justice for the documents to be disclosed. Having inspected the documents the relevance of them is not readily apparent to me.
56 I will hear the parties in relation to the terms of the orders to be made and in relation to costs.
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