Re SLKALT Pty Ltd (in liq) - [2024] VSC 250

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 01010

IN THE MATTER OF SLKALT PTY LTD (IN LIQUIDATION) (ACN 005 289 190)

BETWEEN:

NICHOLAS GIASOUMI AND SHANE LESLIE DEANE IN THEIR CAPACITY AS LIQUIDATORS OF SLKALT PTY LTD
(IN LIQUIDATION) (ACN 005 289 190)

Plaintiffs

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JUDGE:	Attiwill J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 November 2023, 27 November 2023 and 7 May 2024 (further submission and a final list of disputed documents)
DATE OF JUDGMENT:	17 May 2024
CASE MAY BE CITED AS:	Re SLKALT Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2024] VSC 250

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APPEAL — Appeal from a determination of a judicial registrar concerning legal professional privilege — Where appeal is a de novo hearing — Where documents have been produced to the Court by various persons and companies pursuant to compulsive processes under the Corporations Act 2001 (Cth) — Whether the evidence in support of the claims of privilege is sufficient and, as a result, whether the appellants have discharged their evidentiary onus in support of the claims of privilege — Where communications involved a third party, being the Company’s external accountant — Whether the communications with the Company’s external accountant were communications for the dominant purpose of legal advice — Whether privilege in the communications in the documents is jointly held with the Company — Whether the communications in the documents were in furtherance of the commission of a fraud — Appeal allowed, in part, in relation to one of sixty documents —Evidence Act2008 (Vic) ss 118, 124, 125, 131A and 133 — Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796; Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357; Farrow Mortgage Services Pty Ltd (in liq) v Webb & Ors (1996) 39 NSWLR 601; Yunghanns v Elfic Pty Ltd (2000) 1 VR 92 and Great Southern Managers Australia Limited (Receivers and Managers Appointed) (in liq) v Clarke (2012) 36 VR 308 considered and applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr O Bigos KC with Mr H Hill-Smith	Maddocks
For the Appellants (Michael Kurc, Riot Stores Pty Ltd and Damiss Nominees Pty Ltd)	Mr C Archibald KC with Mr D F McAloon	B2B Lawyers
For David Lurie	Mr S J Maiden KC	B2B Lawyers

TABLE OF CONTENTS

INTRODUCTION.............................................................................................................................. 1

THE PROCEEDING.......................................................................................................................... 3

BACKGROUND FACTS.................................................................................................................. 4

Kurc family and family entities.................................................................................................. 4
Decisions to pay down debt and to restructure........................................................................ 6
Retainer and initial instruction of B2B Lawyers....................................................................... 7
Involvement of B2B Lawyers, steps taken by Mr Kurc and subsequent transactions........ 8
Retainer and instruction of other lawyers............................................................................... 22
Liquidation of the Company..................................................................................................... 22
The disputed communications in the Documents................................................................. 23

DO DOCUMENTS 5-27, 29-30, 33, 35-38, 40-43, 45, 50 AND 58-59 CONTAIN COMMUNICATIONS MADE FOR THE DOMINANT PURPOSE OF LEGAL ADVICE? 24

Applicable law............................................................................................................................. 24
Submissions................................................................................................................................. 30
Analysis........................................................................................................................................ 31
......... Sufficiency of evidence..................................................................................................... 32
......... Documents…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 250
Decision Date: 17 May 2024

CaseChat Overview and Summary

The appellants, in this case, are contesting a decision made by a judicial registrar that certain documents should be disclosed to the liquidators of SLKALT Pty Ltd. The appeal involves a complex dispute concerning the application of legal professional privilege to a set of documents produced under compulsory processes under the Corporations Act 2001 (Cth). The central issue before the court was whether the appellants had successfully discharged their evidentiary burden in proving that the documents in question were subject to legal professional privilege. The court was tasked with determining if the communications contained within the documents were for the dominant purpose of providing legal advice, if the privilege was jointly held with the company, and whether the communications were related to the commission of fraud.

The court examined the nature of the communications in the sixty documents, which involved the company's external accountant, and considered if these communications were primarily for the purpose of obtaining legal advice. The court also assessed whether the privilege was jointly held with the company, and if the documents were created in furtherance of a fraud. The court applied established legal principles and precedents, including the provisions of the Evidence Act 2008 (Vic), and considered cases such as Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited, Pratt Holdings Pty Ltd v Commissioner of Taxation, Farrow Mortgage Services Pty Ltd (in liq) v Webb & Ors, Yunghanns v Elfic Pty Ltd, and Great Southern Managers Australia Limited (Receivers and Managers Appointed) (in liq) v Clarke. The court concluded that while the appellants had successfully demonstrated privilege in relation to most of the documents, they had not met their burden in respect of one particular document.

The court allowed the appeal in part, ruling that the appellants had not discharged their burden of proof in relation to one of the sixty documents, thereby permitting the disclosure of that particular document to the liquidators. The court found that the appellants had, however, successfully established privilege in relation to the remaining fifty-nine documents, which were thus protected from disclosure. This decision highlights the importance of thoroughly establishing the evidentiary basis for claims of legal professional privilege, particularly in complex corporate disputes involving multiple parties and compulsory disclosure processes.

Orders