Re Mulsanne Resources Pty Ltd (in liq)
[2013] NSWSC 358
•11 March 2013
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Mulsanne Resources Pty Ltd [2013] NSWSC 358 Hearing dates: Monday 11 March 2013 Decision date: 11 March 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Claim for privilege upheld and access to document refused
Catchwords: PRACTICE & PROCEDURE - application to stay liquidators examinations as abuse of process - objection to notice to produce - client legal privilege - whether there are reasonable grounds for thinking that the document in question might evidence an abuse of process - whether claim for privilege maintainable Legislation Cited: (NSW) Evidence Act 1995, s 11(2), s 125 Cases Cited: Citicorp Australia Ltd v Cirillo [2000] SASC 219
Dataquest (Australia Pty Ltd) v Dataquest Inc (unreported, FCA, Tamberlin J 8 August 1996)
Georgeski v Owners of Strata Plan 9833 [2004] NSWSC 945
In re Daintrey [1893] 2 QB 116
Kang v Kwan (2002) 11 BPR 20,623
Pitts v Adney (1961) 78 WN (NSW) 886
Van Der Lee v State of New South Wales [2002] NSWCA 286Category: Interlocutory applications Parties: Nathan Leslie Tinkler (First Applicant)
Troy Allan Palmer (Second Applicant)
Matthew Thomas McClelland Keen (Third Applicant)
Amy Louise Hyde (Fourth Applicant)
Proper Officer of Aston Resources Investments P/L (Fifth Applicant)
Blackwood Corporation Ltd (Plaintiff)
Mulsanne Resources P/L (in liq) (Defendant)
Robyn Louise Duggan and John Melluish as liquidators of Mulsanne Resources Pty Ltd (Respondents)Representation: Counsel:
A Leopald SC w V Whittaker (Applicants)
C R Newlinds SC w D Sulan (Respondents)
Solicitors:
DLA Piper Australia (Applicants)
Clayton Utz (Respondents)
File Number(s): 2012/ 296966
Judgment (ex tempore)
HIS HONOUR: By interlocutory process filed on 8 March 2013, the applicants claim an order that the proceedings, which are liquidator's examinations of various examinees, be permanently stayed, on the grounds that the examinations are said to constitute an abuse of process, and are being used for a purpose foreign to their proper statutory purpose.
In aid of their application the applicants have issued to the plaintiff, Blackwood Corporation Ltd, a notice to produce calling for production of the following;
1. The hard copy of the email dated 7 March 23013 sent at approximately 7.12 pm by Ms Jennifer Ball to Mr Rory Moriarty (and copied to, amongst others, Mr Matthew Keen).
Blackwood has produced a document in answer to that notice, but claimed legal professional privilege in respect of it.
Although no further evidence has been tendered on that question, it does not appear to be in dispute that the document is one which, but for the argument to which I shall come, would prima facie be entitled to client legal privilege or litigation privilege. However, the applicants submit that, by operation of (NSW) Evidence Act 1995, s 11(2), which provides that the powers of the court with respect to abuse of process in a proceeding are not affected by the Evidence Act except so far as the Act otherwise provides expressly or by necessary intent, the circumstance that the present process alleges an abuse of process has the consequence that production is not precluded by a claim for legal professional privilege.
I am constrained by the judgment of the Court of Appeal in Van Der Lee v State of New South Wales [2002] NSWCA 286, especially in the judgment of Hodgson JA (at 62), to accept that s 11(2) has the effect that when evidence is tendered that could be evidence of an abuse of process, albeit that it is evidence of without prejudice settlement negotiations, the court may receive that evidence on the voir dire, and then if that evidence, either by itself or in combination with other evidence, does establish an abuse of process, to rule it admissible and make appropriate orders to deal with the abuse of process. His Honour explained this on the basis that the powers of the court with respect to abuse of process include its powers to receive evidence, and the authorities relied on by the claimants (which was a reference, in particular, to In Re Daintrey [1893] 2 QB 116, 120, Pitts v Adney (1961) 78 WN (NSW) 886, 889, Dataquest (Australia Pty Ltd) v Dataquest Inc (unreported, FCA, Tamberlin J 8 August 1996), and Citicorp Australia Ltd v Cirillo [2000] SASC 219, [20]) showed that at common law communications evidencing an abuse of process were not protected by without prejudice privilege. The other Judges of Appeal agreed with Hodgson JA and also adopted an alternative basis of admissibility of the document.
This approach was extended by Santow JA in Kang v Kwan (2002) 11 BPR 20,623 to cases of legal professional privilege (as distinct from without prejudice privilege). It was also referred to by Barrett J, as his Honour then was, in Georgeski v Owners of Strata Plan 49833 [2004] NSWSC 945.
It seems to me, however, that it cannot be that merely by asserting that there is an abuse of process does any document the subject of a subpoena or notice to produce otherwise the subject of legal professional privilege become open for inspection. It could only be so if, at the least, there were reasonable grounds to suppose that the document in question would evidence an abuse of process.
In the words of Hodgson JA in the passage to which I have already referred, the reception of evidence, even on the voir dire, is conditioned on the circumstance that it "could be evidence" of an abuse of process.
It seems to me that while not precisely equivalent to the concepts in Evidence Act, s 125, the idea or the notion that "reasonable grounds for finding" that there was an abuse of process provides an equivalent test; in other words, there would have to be at least reasonable grounds for thinking that the document was some evidence of an abuse of process.
At this stage, I know nothing of the present case except that an allegation is made that the liquidator's examinations are an abuse of process. On the face of the notice to produce, it would seem likely that the applicants have some evidence of the existence of the document, production of which is sought, and presumably some context from which they may have inferred that it evidences an abuse of process, but the court has not been made privy to that material.
It may be that, in the course of the proceedings, material emerges which provides reasonable grounds for thinking that the document in question might evidence an abuse of process, but no such grounds exist at the moment. No basis for concluding that the document in question is one that might evidence an abuse of process is apparent. While that does not preclude the question from being raised at a later stage, when more material is available to the court, at present no basis for overriding the claim for privilege is apparent.
At this stage, therefore, I uphold the claim for privilege and decline to grant access to the documents so produced.
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Decision last updated: 18 April 2013
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