Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 6)

[2021] FCCA 1637

FEDERAL CIRCUIT COURT OF AUSTRALIA

Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 6) [2021] FCCA 1637

File number(s):	SYG 2771 of 2019
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	13 July 2021
Catchwords:	PRACTICE AND PROCEDURE – whether legal professional privilege claimed in relation to documents produced in answer to a notice to produce has been waived by reason of statements made in affidavit – legal professional privilege not waived.
Cases cited:	Commissioner of Taxation & Rio Tinto (2006) 151 FCR 341
Number of paragraphs:	13
Date of hearing:	13 July 2021
Place:	Sydney
Counsel for the Applicants:	Mr J Hennessy SC and Mr C McMeniman, by video
Solicitor for the Applicants:	Gilbert + Tobin
Counsel for the Ninth and Fourteenth Respondents:	Mr M Heath, by video
Solicitor for the Ninth and Fourteenth Respondents:	Matthews Folbigg Lawyers

ORDERS

SYG 2771 of 2019

BETWEEN:

SELF CARE CORPORATION PTY LTD

First Applicant

SELF CARE IP HOLDINGS PTY LTD

Second Applicant

AND:

GREEN FOREST INTERNATIONAL PTY LTD ACN 607 602 988

First Respondent

YAOAN (ERIC) CHEN

Second Respondent

YILIN TRADING PTY LTD ACN 626 244 479 (and others named in the Schedule)

Third Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	13 JULY 2021

THE COURT ORDERS THAT:

1.The claims for privilege in relation to the redacted portions of documents numbered 40, 41, 42, 43, 44, 45 and 46 identified in the document titled “Documents in the control of the Ninth Respondent and Fourteenth Respondent for which privilege from production is claimed”, are upheld.

REASONS FOR JUDGMENT
(Revised from transcript)

1. On 2 July 2021 I made orders setting aside paragraphs 2 and 6 of a notice to produce, issued by the applicants to the ninth and fourteenth respondents (respondents), dated 16 June 2021.  After those orders were made the respondents produced documents. Many of the documents were the subject of a claim for legal professional privilege; and to give effect to that claim documents were produced in a redacted form. 

2. When the matter came before me on 12 July 2021 an issue was raised on behalf of the applicants about the accuracy of the redaction; and by that I mean whether the redaction covered only matters that did not relate to the documents called for by the notice to produce. That was the subject of a judgment I gave orally on 12 July 2021, after I went through the unredacted documents. In that judgment I identified documents that were over redacted - not an elegant term, but a term that conveys what I did correctly enough. 

3. Following that judgment the respondents, through their lawyers, provided some nine documents which were revised in terms of the redactions made. A query was raised as to whether the redactions reflected the intentions as I expressed them in my oral reasons for judgment delivered on 12 July 2021.  That was a fair enough concern because, for obvious reasons, I did not identify what I had found to be over-redactions. That led me to review those documents.  Those documents are the documents that were listed as numbers 26, 27, 41, 42, 44, 45, 47, 48 and 49, being the numbers given to the documents in the document I have previously referred to as document titled “Part 2 - Documents in the control of Ninth Respondent and Fourteenth Respondent for which privilege from production is claimed”. 

4. I retired from the bench and looked at those documents. I found the redactions correctly reflected my intentions in all but three of them, these being documents 41, document 42 (to which I will return in a moment), and document 45. Document 42 was the subject of submissions. Counsel for the respondents said it was unclear which part of that document I had considered had been over-redacted. I identified that portion sufficiently for counsel to understand the portion I had in mind, and submissions were made to the effect that the portion was privileged, and that privilege had not been waived. 

5. I also heard submissions in relation to documents numbered 40 and 43. Counsel for the respondents submitted the documents should be read together, and they were the subject of privilege. There is no doubt, and it has not been submitted otherwise, that the documents record communications which attract legal professional privilege; and here I am referring to the principles of the common law as they apply to legal professional privilege. The real question in dispute between the parties is whether legal privilege that has attached to those communications, has been waived. 

6. The applicants submit that privilege has been waived. The grounds on which they submit waiver has occurred are set out in their written submissions dated 8 July 2021. In paragraph 15 of those submissions there is a reference to passages from the judgment of the Full Federal Court in Commissioner of Taxation & Rio Tinto (2006) 151 FCR 341. The first passage is from paragraph 45 of the Federal Court’s judgment, which is as follows:

   Where, as here, one party alleges that another has impliedly waived legal professional privilege, a court is bound to analyse the acts or omissions of the privilege holder that are said to be inconsistent with the maintenance of the privilege.  In concluding that the Commissioner had waived the privilege in the eight contested documents, the docket judge in fact applied the ‘inconsistency’ principle of Mann, as he was obliged to do.

7. The second passage referred to in those written submissions is as follows, which is from paragraph 52 of the Federal Court’s judgment:

   These authorities show that, where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence.  Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication.

8. The applicants submit the respondents, through their lawyer, Mr Brown, have made an assertion or a series of assertions in relation to communications which would otherwise attract the privilege.  The assertions are made in an affidavit sworn by Mr Brown on 17 May 2021.  In particular, the applicants rely on the following passage:

   Since the making of the freezing orders, I have issued tax invoices to my clients in respect of works conducted in these proceedings.  I am informed by my clients and ….. believe that the liability for these tax invoices has primarily been met by withdrawals from bank accounts that were made the subject of the freezing orders at paragraph 4(a) and 6(a) of attachment 1. 

   As at the date of ….. this affidavit, invoices issued by Matthews Folbigg Lawyers to my clients, totalling $116,086.82, remain unpaid.  Annexed to ….. “B” is a copy of a report generated by the file management software maintained by Matthews Folbigg Lawyers in relation to these proceedings.  Further, from a review of the file management software maintained by Matthews Folbigg Lawyers I have determined that work in progress (WIP) totalling $85,098 has been incurred by myself and staff of Matthews Folbigg Lawyers under my supervision which has not yet been made the subject of a tax invoices.

9. In their written submissions the applicants submit that the first of these two paragraphs deploys and lays open communications in relation to the invoices issued by Matthews Folbigg and the payment of these invoices, including who they were paid by and any arrangements for the payment of them, and they submit that any privilege over such communications that may have existed has been waived. The applicants in their written submissions also refer to the affidavit of Mr Brown, sworn on 11 June 2021. The submissions quote the following two paragraphs:

   During my time in practice I have acted for parties in large complex multi-party litigation conducted over multiple days.  As part of my tasks as Solicitor on the record for those parties, I have cause to provide initial estimates of the legal expenses likely to be incurred and to re-engage with clients by providing updated estimates as those matters progress closer to the commencement of the hearing. 

   On the basis of my experience described above, my review of both the current state of the proceedings and the tasks which in my opinion will need to be carried out from now until the completion of those proceedings, and consultation with Mr Heath of counsel, I have made an estimate of the future legal costs and disbursements my client are likely to incur of $203,810 plus GST. 

10. From this it can be seen that the act or omission the applicants contend constitutes the waiver of legal professional privilege or, more generally, the act or omission which the applicants contend is inconsistent with maintaining confidentiality that would otherwise attach to communications, are two in nature. The first are communications about fees charged to the respondents, and disbursements incurred on their behalf, that have been met by the respondents. The second are communications dealing with estimates of costs. The precise question, therefore, that arises on whether there has been a waiver is whether any of the documents, and, more precisely, the passages from the documents which had been caught by the notice to produce to which I have referred above, manifest a communication about how fees have been met, or relate to such communication, or whether they constitute communications in relation to the estimate of costs, or at least related to any such communication. That requires me to go through each of the relevant passages of the documents. 

11. I first turn to the relevant passage in document 40. That is not, in my view, a communication about how fees have been met in the past, or about any arrangements for the payment of such fees; nor do they relate to any estimate of costs.  In those circumstances, I am not satisfied there has been any waiver in relation to that passage. The passage in document 41 also is not a communication of the sort to which I have referred. It is advice. Similarly, the passages in document 42 are not communications about how fees have been paid or the arrangements or any communication relating to that or in relation to an estimate of costs.  They constitute the giving of advice. Similarly with document 45, but the passage in there is not a communication of the sort to which I have referred, and does not relate to any such communications. Similarly with the material contained in document 46. 

12. I have expressed these conclusions in summary form, largely because to do otherwise would be disclosing the contents of the confidential communications.  I understand that a party who makes submissions of the sort that the applicants have made will react with a degree of scepticism to a judgment of the sort that I have just given. All I can say to the parties is, having looked at the material, I am satisfied that the material is privileged, and the material does not reveal communications about how fees have been paid or about arrangements that have been made for their payment; and they do not otherwise constitute communications relating to the estimate of costs. The material squarely falls within the giving of legal advice. 

13. In those circumstances, there has been no waiver.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.

Associate:

Dated:       19 July 2021

SCHEDULE OF PARTIES

SYG 2771 of 2019
Respondents
Fourth Respondent:	FREEZEFRAME CHINA CO PTY LTD ACN 621 016 975
Fifth Respondent:	KEFEI (EMILIO) WANG
Sixth Respondent:	PASCAL SKELIN
Seventh Respondent:	EPAQ INTERNATIONAL PTY LTD ACN 608 870 588
Eighth Respondent:	QUANJIAN PTY LTD
Ninth Respondent:	YIPING YANG
Tenth Respondent:	TAOYU PAN
Eleventh Respondent:	KEFEI (IVAN) WANG
Twelfth Respondent:	ZUREN INTERNATIONAL PTY LTD
Thirteenth Respondent:	SIQI HUO
Fourteenth Respondent:	YULIN WANG
Fifteenth Respondent:	E-GO CHANNEL PTY LTD
Sixteenth Respondent:	AUSTRALIAN VITAMIN PLUS PTY LTD
Seventeenth Respondent:	YAN (CYNTHIA) LI