Schwartz, D.C. v South Australian Public Service Savings & Loans Society Ltd

[1993] FCA 673

673 ,a13

JUDGMENT No. ........ ........ .. , , ,

NOT SUITABLE FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1
SOUTH AUSTRALIA DISTRICT REGISTRY )	SG 57 of 92

)

GENERAL DIVISION )

BETWEEN:  DEAN CHRISTIE SCHWARTZ

First Applicant

SONIA SCHWARTZ

Second Applicant

ALAN SCHWARTZ

Third Applicant

AND:  SOUTH AUSTRALIAN PUBLIC SERVICE SAVINGS & LOANS SOCIETY LIMITED

First Respondent

CHARLES CHIPPERFIELD

Second Respondent

2 7 SEP 1993 BAIN & COMPANY LIMITED

AUSTRALIA

PRINCIPAL

REOISTRY Third Respondent

BENNETT JOHNSTON CONSULTANTS PTY LTD

Fourth Respondent

were acting as auditors of the Family Security Friendly	sworn and filed. The third party is a firm of accountants who
Society, a Queensland Friendly Society which is and has for some time been under administration. The administrator claimed that in these circumstances the accountants held the documents in the capacity of auditors of the Society and should not waive any privilege of the Society except on its authority. The administrator was not willing to give any such authority. On the contrary, he insisted that privilege be claimed.
Privilege accordingly was claimed in the affidavit of documents. The question was then brought before the court by
the party seeking discovery whether the privilege in fact
applied. I took the course of examining the documents for myself, and at first sight it did appear that a number of documents and parts of documents did record legal advice and were prima facie entitled to legal professional privilege.
However, one of the documents was a draft of a letter intended to be widely disseminated, containing a disclosure of
party relies. Accordingly, I adjourned the hearing to enable the very same advice on which counsel for the discovering
the question to be clarified whether in fact a circular in those terms went out.
A circular has now been tendered, and it is not in dispute that this circular was widely disseminated to persons described as investors, being persons expressly stated by the administrator who signed the circular not to be members. In those circumstances, while there is still no consent to production of the documents, no argument has been put to me that the claim of privilege can still be maintained.
Accordingly, I order that the documents in dispute which have been produced to the court be made available for inspection and copying to the solicitors for the party who obtained the order for third party discovery.
I have been asked to make an order for costs in favour of the party seeking the discovery, or alternatively to make no order as to costs, on the footing that I have now ruled the documents should be produced and that the discovering party had resisted that. It seems to me that it requires a fairly strong case to justify either making an order for costs against a third party required to give third party discovery or to decline to order the payment of that party's costs.
The general rule is that such a party should receive its costs and should receive them as between solicitor and client. The reason for that is that such a party is brought to the
court to produce documents at the request and for the benefit of the party obtaining the discovery.
In this case I cannot see any misconduct on the part of the third party, who could not have ignored the instructions received from the administrator, and who did not take the part of active, and certainly not of obstructive, resistance, but simply informed the court of the instructions received and of the question that had arisen, without actively debating it.
The fact, of course, that the question was not actively debated will be taken into account when the taxing officer comes to assess the quantum, but I order that the third party receive its costs, and receive them as between solicitor and client.
I release exhibit 1 back to the party who tendered it, and the documents will now be released to Mr Trim on his undertaking to hand them back to Mr Jarvis on behalf of the party who produced them.

CORAM: Burchett J.
PLACE: Adelaide

DATE : 2 September 1993

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

In this matter an order was made for third party
discovery and an appropriate affidavit of documents was duly

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett.

Associate: (*	My---Q
Date: 27 September 1993
Solicitors for the Applicants:	Messrs Scales & Partners

Counsel for the Third Respondent: Mr D. Trim

Solicitors for the Third	Messrs Mouldens
Respondent:
Counsel for the Third Party:	Mr J. Jarvis
Solicitors for the Third Party:	Messrs Clayton Utz
Dates of hearing:	1 and 2 September 1993