Re Hedrlin, J.

[1990] FCA 794

JUDGMENT No. .?.2.f/...9~

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION VICTORIA DISTRICT REGISTRY
i
BANKRUPTCY DISTRICT OF THE STATE	)
OF VICTORIA	)

U :	JOSEPH H E D U (Applicant)
m:	MAX CHRISTOPHER DONNELLY
(Respondent)

m:  Ryan J

RECEIVED

Date:	12 November 1990
W:	Sydney  FEDERAL COURT OF

AUSTRALIA	PRlNaPAL
RE018TRI

m TEMPORE REASONS FOR JUDGMENT

In this matter the applicant, Joseph Hedrlin, has applied for annulment of the sequestration order made on 18 May 1983, and, alternatively, for removal of the Trustee of his estate, Max Christopher Donnelly.

bankruptcy administration."

By way of providing evidence in support of his application the applicant has caused a subpoena to be issued to the Inspector-General in Bankruptcy requiring him to produce:

'All correspondence, file notes and related records and documents recording contact between your office and Max Christopher Donnelly, the Trustee in the herein named bankruptcy administration from the first communication between the Trustee and your office up to and including communications to the time you present this documentation to the Court and specifically letters from M.C. Donnelly to you requesting funds under section 305 of the Bankruptcy Act dated September 1984, June 1986, November 1987 and your replies to those letters dated November 1983, October 1984, June 1986, January 1988 and any other applications under section 305 and all documents relating to applications under section 305 in relation to the aforementioned

In response to that subpoena the Inspector-General has produced three voluminous files and has indicated that no objection is taken to the bankrupt's having access to those files provided that he be not permitted to copy certain ministerial minutes and the like. However, Mr Duggan who appears on behalf of the Trustee has objected to three documents being made available to Mr Hedrlin on the ground that those documents are the subject of legal professional privilege which his client is entitled to maintain. I have inspected the three documents for myself in accordance with the principles laid down by the High Court in Grant v. Downs (1976) 135 CLR 674 at 688 to 689.

Mr Hedrlin who has been assisted in the presentation of this part of the application by his son, Mr P. Hedrlin, has been at a disadvantage in debating the claim for privilege because, of necessity, he has been denied access to the documents until the claim has been ruled upon. The need to preserve the efficacy of the privilege until it is shown not to be supportable also

disclose the nature and contents of the three disputed	imposes considerable constraints on the extent to which I can
documents.
The first of those documents is a letter dated 11 November 1983 from the Trustee to the Inspector-General in support of an application under s.305 of the Bankru~tcv Act for a direction by the Minister that the Trustee's costs of certain proceedings and inquiries, including any costs that might be awarded against the Trustee, be paid by the Commonwealth.
That letter with enclosures occupies folios 142 to 83 of Part I of file M83-9686. It is clear that it is to communications that legal professional privilege attaches and the privilege is that of the client and not that of the legal adviser or the third party to whom or by whom the communication is made. In the present case the client is the Trustee himself. It is also clear the legal professional privilege is not confined to communications passing between the client and legal adviser. In Trade Practices Commission v. Sterlinq (1978) 36 PLR 244 at page 246 Lockhart J instanced, without attempting to be exhaustive, seven categories of documents to which legal professional privilege extends including:

"F. Communications passing between the party and the third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or even without any such request or suggestion, they are made for the purpose of being put before the eol~citor with the object of obtaining his advice or enabling him to prosecute or defend an action. See Wheeler v. Le Marchant (1881) 17 Ch.D. 675, Cork v. Union steams hi^ Co. (1904)

23 N.Z.U.L.R. 933 and In Re Holloway (1887) 12 P.D. 167."

In my view, on similar principles, a communication from the as in this case, the Minister under s.305 made with a view to	client to a statutory authority like a Legal Aid Commission or,
obtaining financial assistance for litigation which is anticipated or has been commenced can also attract privilege. The privilege so attracted must extend at least to communications which detail evidence collected or expected to be collected by the client and legal advice which he has been given about the conduct of the litigation or his prospects of success in it.
The letter of 11 November 1983 on examination contains expressions of opinion about the proposed examination of M r Hedrlin under s.69 and proposed examinations under s.81 of his wife and two sons together with proposed actions, if so advised, under s.66G of the Convevancina Act 1919 and against Mr Hedrlinls wife in respect of certain allegedly preferential transfers to her of property. As well, application was made by the same letter for financial assistance to resist an application by the Trustee for annulment of the bankruptcy.
In my view the whole of that communication attracts the protection of legal professional privilege on the principle which I have just adumbrated. Of the documents enclosed with that letter a copy of the bankrupt's statement of affairs, folios 137 to 128, a notice of a meeting of creditors dated 12 October 1983 and attachments, folios 127 and 110, a copy certificate of title volume 13622 folio 107 and certificate of title volume 13103 folio 199, and the minutes of a meeting of
creditors folios 101 to 99 are not privileged being matters of public record. However, privilege does attach for obvious reasons to a letter of advice to the Trustee from his solicitors, Messrs Duggan and Doyle, dated 1 November 1983 with an annexure, folios 98 to 92, which was included in the material submitted to the Inspector-General under s.305.
A copy of the bankrupt's application to this Court dated 15 October 1983 and the affidavit in support, folios 92 to 83, are not privileged.
For reasons similar to those already given I uphold the claim to privilege in respect of the letter on the Attorney-
General's Department file BRK 86/6771 dated 10 October 1986 from
the Trustee to the Inspector-General "to provide an update" in respect of the matter concerning Mr Hedrlin. That letter is folio 163 in that file and had attachments, also privileged, in
the form of a letter dated 1 December 1986 from M.F. Callanan &
CO, solicitors for the Trustee, and similarly privileged attachments to that letter being letters and memoranda to those solicitors from Counsel and a firm of process servers. I uphold the claim of privilege to folios 163 to 159 inclusive in that file.
The most recent file produced to the Court on behalf of the letter from Messrs Tillyard & Callanan dated 16 July 1987 by way Inspector-General is that numbered BRK 87/7466. It contains a
of a report on applications made by Mr Hedrlin before Wilcox J., on 14 July 1987 which that firm had been retained on behalf of the Trustee to resist. That letter which occupies folios 125 to 124 on that file is also privileged for the reasons which I have earlier given.

I was referred on behalf of the bankrupt to ~ommissioneq

for Cor~orate Affairs v. Eastoe (1989) 7 ACLC 1051 where a

claim to privilege raised by a solicitor for a Trustee of a unit trust was rejected. However, a close examination of the reasoning in that case shows that it was founded on a finding that the communications in question were not made to the solicitor for the purpose of giving or receiving advice or for use in existing or anticipated litigation.

The communications which I have ruled to be privileged in this case are quite otherwise. There is, as I am aware, authority to the effect that legal opinion obtained by a trustee must be disclosed by him to any beneficiary. However that authority applies to opinions in respect of trust property or the administration of the trust. It does not extend, I consider, to advice obtained about litigation taken by a trustee or defended by him in which a beneficiary is an adversary.

Accordingly, in the result, I propose to order that M r

Hedrlin be permitted to inspect in the presence of a Registrar-

which are identified being file number M83/9686 Part I from	in-Bankruptcy or other officer of the Court the three files
which folios 142 to 138 and folios 98 to 92 should first be removed and delivered into the custody of the Inspector-General.

I make a similar order in respect of file number BRK

86/6771 excluding folios 163 to 159 and again a similar order in

respect of file number BRK 87/7466 excluding the letter which
occupies folios 125 to 124.

I further order that Mr Hedrlin not be permitted to copy any parts of the files produced to him without the consent of the Inspector-General or an officer designated by him for that purpose. I shall adjourn the hearing of the application to a time after Mr Hedrlin has completed the inspection which I have ordered should be permitted. That hearing date can be fixed after consultation with the listing officer and the parties will be notified accordingly.

I reserve the costs of the Trustee and, if necessary, the Inspector-General of this day.

I certify that this and the preceding six

(6) pages are a true copy of the Reasons for

Judgment of His Honour Mr Justice Ryan.

Associate: &Gwiw

Date:  /Z 1990

Counsel for Applicant	1
) No appearance
Solicitors for Applicant )
Counsel for Respondent	:  -
Solicitors for Respondent:	Mr P.J. Duggan
Date of Hearing	12 November 1990
Date of Judgment	12 November 1990