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Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd

Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd

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CITATION: Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Limited [2006] NSWSC 234
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 9 March 2006

JUDGMENT DATE :
5 April 2006

JUDGMENT OF: Bergin J

DECISION: Access to documents refused.

CATCHWORDS: [PRIVILEGE] Secured creditor agrees to fund litigation pursuant to Deed of Company arrangement - whether funder under implied obligation to keep communications with plaintiff's lawyers confidential - whether documents provided to the funder to ensure funding of litigation are privileged pursuant to s 118 and/or s 119 of the Evidence Act 1995 (NSW) - whether common interest between funder and plaintiff so that s 122(2) and s 122(4) of the Evidence Act 1995 (NSW) do not apply

LEGISLATION CITED: Evidence Act 1995 (Cth)
Evidence Act 1995 (NSW)

CASES CITED: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405
Bank of Nova Scotia v Hellenic Mutual War Risks Associations (Bermuda) Ltd ("The Good Luck") [1992] 2 Lloyd's Rep. 540
Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689
Buttes Gas & Oil Co v Hammer (No. 3) [1981] QB 223
Carnell v Mann (1998) 89 FCR 247
Farrow Mortgage Services Ptd Ltd (in liq) v Webb (1996) 39 NSWLR 601
Guinness Peat Properties Ltd. v Fitzroy Robinson Partnership [1987] 1 WLR 1027
Mann v Carnell (1999) 201 CLR 1
Network Ten Ltd v Capital Televsion Holdings Ltd (1995) 36 NSWLR 275
R v Cox & Railton (1884) 14 QBD 153
Rank Film Distribution Ltd v ENT Ltd (1994) 4 Tas R 281
Re Global Medical Imaging Management Limited (in liq) [2001] NSWSC 476
Somerville v Australian Securities Commission (1995) 60 FCR 319
Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (a firm) (1998) 84 FCR 472
Telstra Corporation v Australis Media Holdings (No 2) (1997) 41 NSWLR 346

PARTIES: Rickard Constructions Pty Limited ACN 055 192 919 (Plaintiff/ Respondent)
Allianz Australia Insurance Limited ACN 000 122 850 (Third Defendant/ Applicant)

FILE NUMBER(S): SC 55027/00

COUNSEL: TGR Parker SC (Plaintiff/ Respondent)
A S Martin SC (Third Defendant/ Applicant)

SOLICITORS: Henderson Taylor Workplace Lawyers (Plaintiff/ Respondent)
Moroney Betts (Third Defendant/ Applicant)

- 27 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

BERGIN J

5 APRIL 2006

55027/00 RICKARD CONSTRUCTIONS PTY LIMITED v RICKARD HAILS MORETTI PTY LIMITED

JUDGMENT

1 This is an application in which the plaintiff, Rickard Constructions Pty Limited, claims privilege in respect of certain documents that have been produced pursuant to a Notice to Produce. The third defendant, Allianz Australia Insurance Limited (Allianz), challenges the plaintiff’s claim for privilege. The documents the subject of the claim for privilege were produced by SST Consulting Services Pty Limited (SST).

2 The main proceedings relate to the failure of pavement laid by the plaintiff at the Port Botany container park and include a claim for a declaration…

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: [2006] NSWSC 234
Decision Date: 5 April 2006

CaseChat Overview and Summary

The case involved a dispute between Rickard Constructions Pty Ltd, a creditor, and Rickard Hails Moretti Pty Ltd, a company in financial difficulty. The creditor had agreed to fund the litigation in exchange for security interests over the company’s assets. The dispute centred on whether the funder had an obligation to keep communications with the plaintiff’s lawyers confidential and whether the documents provided to the funder to secure funding were privileged under sections 118 and 119 of the Evidence Act 1995 (NSW). Additionally, the court considered whether there was a common interest between the funder and the plaintiff that would exclude the application of sections 122(2) and 122(4) of the Evidence Act 1995 (NSW).

The court needed to determine whether there was an implied obligation of confidentiality between the funder and the plaintiff's lawyers. This involved examining the terms of the funding agreement and whether the funder's involvement in the litigation created a relationship akin to that of solicitor and client. Furthermore, the court had to decide whether the documents exchanged between the funder and the plaintiff were privileged under the Evidence Act. The court considered the nature of the documents and the context in which they were exchanged. Finally, the court examined whether the funder and the plaintiff shared a common interest that would exclude the application of sections 122(2) and 122(4) of the Evidence Act, which relate to the admissibility of documents prepared in anticipation of litigation.

The court held that there was no implied obligation of confidentiality between the funder and the plaintiff's lawyers. The funding agreement did not contain any terms that suggested such an obligation, and the court found that the funder’s role did not create a solicitor-client relationship. Regarding privilege, the court concluded that the documents provided to the funder to secure funding were not privileged under sections 118 and 119 of the Evidence Act. These sections apply to communications between a client and their legal adviser made for the dominant purpose of giving or receiving legal advice or for the purpose of litigation. The court found that the documents were prepared for the purpose of obtaining funding rather than for legal advice or litigation. Lastly, the court found that the funder and the plaintiff did not share a common interest that would exclude the application of sections 122(2) and 122(4) of the Evidence Act.

The court ordered that the funder was not under an obligation to maintain confidentiality with the plaintiff's lawyers, and the documents exchanged were not privileged. The court also held that sections 122(2) and 122(4) of the Evidence Act did not apply in this case. These findings had significant implications for the disclosure of documents and communications in the ongoing litigation.

Orders