Seven Network Ltd v News Ltd

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FEDERAL COURT OF AUSTRALIA

Seven Network Limited v News Limited [2005] FCA 142

PRACTICE AND PROCEDURE – discovery – legal professional privilege – documents prepared by in-house counsel – claims of privilege withdrawn in respect of majority of documents – two affidavits of verification withdrawn after requests made to cross-examine deponents – remaining affidavit inadequate to sustain claims of privilege – no careful and reasonable evaluation of list of documents prior to swearing affidavit – appropriate for court to inspect documents

COSTS – indemnity costs

Federal Court Rules O 15 r 9

Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 cited
Telstra Corp Ltd v Australis Media Holdings (unreported, Supreme Ct of New South Wales, Equity Division, McLelland CJ, 18 March 1997) cited
Southern Equities Corporation Ltd (In liquidation) v Arthur Andersen & Co (No 6) [2001] SASC 398 discussed
Balabel v Air India (1988) 1 Ch 317 discussed
DSE (Holdings) Pty Ltd v InterTAN Inc [2003] 135 FCR 151 discussed
Three Rivers District Council v Governor and Company of the Bank of England [2004] UKHL 48 discussed
Latoudis v Casey (1990) 170 CLR 534 cited
Ohn v Waltob (1995) 36 NSWLR 77 cited
De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 cited

SEVEN NETWORK LIMITED (ACN 052 816 789) & ANOR v NEWS LIMITED (ACN 007 871 178) & ORS

N1223 OF 2002

TAMBERLIN J
SYDNEY
28 FEBRUARY 2005


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1223 OF 2002

BETWEEN:

SEVEN NETWORK LIMITED & ANOR
ACN 052 816 789
APPLICANTS

AND:

NEWS LIMITED & ORS
ACN 007 871 178
RESPONDENTS

JUDGE:

TAMBERLIN J

DATE OF ORDER:

28 FEBRUARY 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Documents other than 16-19 inclusive and 25 be made available for inspection by the applicants.

2.News Limited pay the costs of the applicants on an indemnity basis and leave be granted to tax and recover those costs forthwith.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N1223 OF 2002

BETWEEN:

SEVEN NETWORK LIMITED & ANOR
APPLICANTS

AND:

NEWS LIMITED & ORS
RESPONDENTS

JUDGE:

TAMBERLIN J

DATE:

28 FEBRUARY 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

  1. The first applicant (“Seven”) seeks an order for access to 22 documents in respect of which privilege has been claimed in an Affidavit verifying discovery on behalf of the respondents (“News”).  Seven submits, among other reasons, that there has been no properly verified claim for privilege and, having regard to the unsatisfactory sequence of events in relation to the privilege claim, it should therefore be granted access.

    LEGAL PRINCIPLES

  2. The relevant test for determining whether a document attracts the protection of legal professional privilege is whether it came into existence for the dominant purpose of seeking legal advice or giving such advice or for the purpose of litigation or for…

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Details
Case
[2005] FCA 142
Decision Date

CaseChat Overview and Summary

Seven Network Ltd brought proceedings against News Ltd for misuse of private information and copyright infringement. The dispute centred on the disclosure of certain documents and whether they were subject to legal professional privilege. The case was heard in the Federal Court of Australia. The key legal issues were whether the documents were privileged and, if so, whether the privilege could be substantiated without the testimony of the lawyers involved.

The Court held that the withdrawal of the affidavits by the lawyers, Mr Ball and Mr Philip, left insufficient evidence to determine the dominant purpose behind the creation of the documents. The Court found that accurate and reliable discovery was essential for the proper functioning of the adversarial system. The Court was left without sufficient evidence to determine the dominant intention behind the documents, as Mr Philip, who was in the best position to inform the Court about his purposes, had withdrawn his affidavit. Consequently, the Court ruled that the applicants should be allowed to inspect certain documents and ordered News Limited to pay the applicants' costs on an indemnity basis.

The Court's decision underscores the importance of providing adequate evidence to substantiate claims of privilege. The Court ordered that documents other than 16-19 inclusive and 25 be made available for inspection by the applicants, and granted leave for the applicants to tax and recover their costs.

Orders

Orders of the court

1. Documents other than 16-19 inclusive and 25 be made available for inspection by the applicants.

2. News Limited pay the costs of the applicants on an indemnity basis and leave be granted to tax and recover those costs forthwith.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Mr Philip has declined to inform the Court as to his purpose in respect of the documents by withdrawing his affidavit for tactical or strategic reasons. The written submissions for News on this application at [9]-[13] make it clear that he was concerned to avoid cross-examination at this stage:“Evidence9. In relation to those documents where Mr Philip was the legal advisor, it is clear that Mr Philip is the person best placed to give evidence about the purpose of the particular communication. The applicants have suggested in correspondence that if News proposes to rely on Mr Philip’s understanding and purpose, they are entitled to test Mr Philip’s evidence: see letters dated 10 and 14 December 2004. The applicants are not entitled to demand that a particular person be made available for cross-examination.10.There is a very good reason why Mr Philip has not been called to give evidence in this context. This is a claim in which News and Mr Philip are being sued for vast sums of money. The applicants have suggested that the amount claimed approaches $500m. Mr Philip has signed a lengthy witness statement and it is intended that, in due course, he will be called as a witness in the case against himself and News. It may be assumed that the applicants will wish to test that evidence at the trial. The applicants would be given a significant forensic advantage if they were provided an opportunity to cross-examine Mr Philip in the present context.11.The breadth of the evidence and written submissions filed for the applicants would suggest that the applicants might, in the present context, seek to cross-examine Mr Philip extensively about his witness statement and the matters in dispute in the hearing generally. News and Mr Philip may not be able to object to that kind of cross-examination.12.It is not suggested that Mr Philip would be cross-examined for an improper purpose. But in testing Mr Philip’s evidence for the purposes of the present application, there is a high risk that the applicants would, incidentally, obtain various advantages in terms of the final hearing. For an applicant, it is plainly of assistance in advance of a final hearing to see a witness give evidence, particularly where the evidence concerns factual matters that are relevant to the final hearing. It is a further advantage to have the opportunity to test the evidence. The forensic advantage to the cross-examiner at the hearing is potentially very significant.13.Naturally, it is in the interests of News and Mr Philip to deny the applicants that forensic advantage. That can only be done if Mr Philip does not give evidence in this context. For the reasons given below, the claim for privilege can be substantiated without evidence from Mr Philip.” (Emphasis added) In my view, this explanation is unsatisfactory in circumstances where the Court is faced with a specific challenge to the claim for privilege and must determine the dominant purpose for which the documents came into existence. Accurate, adequate and reliable discovery is essential to the proper working of the adversary system and the just resolution of disputes before the Courts. The Court is left in a position where two practising solicitors, Mr Ball and Mr Philip, have sworn affidavits verifying the list, but then have withdrawn them and left it to Mr Brodie, who on the evidence has made no sufficient or reasonable inquiries, to satisfy himself as to the sufficiency or correctness of the list or claims to privilege in order to swear the affidavit of verification. The Court is therefore left without any real evidence, apart from the form and contents of the documents themselves, to determine the “dominant intention” behind the documents in circumstances where Mr Philip is clearly in the best position to inform the Court as to his purposes.

Decision

Reasons for decision

TAMBERLIN J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: TAMBERLIN J

Full text does not contain this section.