Takano, M.H. v Shirono, M.

[1991] FCA 265

IN THE FEDERAL COURT OF AUSTRALIA	)
)
QUEENSLAND DISTRICT REGISTRY	1 No QG 67 of 1990
1
GENERAL DIVISION	1

BETWEEN: MOT0 HIRO T w

(Applicant)

m:

(First Respondent)

&m:	JOHN FREDERICK JOHNSON (Second Respondent)
AND:	DELAEAST PTY LTD (Third Respondent)

: m a - Ryan J

Date: 17 April 1991

W: Brisbane

MINUTES OF ORDER

THE COURT ORDERS:

1.   That the respondents, their servants and agents, be restrained from publishing or making use of any copy of a letter dated 10 May 1988 from Fitz-Walter & CO to the applicant or a trust account authority dated 12 May 1988 from the applicant to Fitz-Walter & CO or any information contained in either of those documents.

the Federal Court Rules.

9

1. That the costs of all parties of and incidental to the motion for an injunction herein be reserved.

NOTE: Settlement and entry of orders is dealt with in Order 36 of
IN THE FEDERAL COURT OF AUSTRALIA )

1

DUEENSLAND DISTRICT REGISTRY	1	No QG 67 of 1990
1
GENERAL DIVISION	)

BETWEEN: POT0 HIRO TAKANQ

(Applicant)

m:	MASAKI SHIRONQ (First Respondent)
&Q:	$OHN FREDERICK JOHNSON (Second Respondent)
AND :	PELAEAST PTY LTD (Third Respondent)

Goram: Ryan J

Date: 17 April 1991

Place: Brisbane

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUS: An application has been made on behalf of the applicant for an order requiring the respondents to deliver up

and refrain from using in any way in these proceedings a copy	letter obtained from Fitz-Walter & CO, solicitors, who acted for
the applicant, Mr Takano, in connection with the purchase and
conveyance of the and which is the subject of the substantive

I

proceedings before me. Those proceedings were instituted on 8

June 1990 by Messrs Witheriff Nyst on behalf of the applicant.

In the course of the hearing of this ancillary application,
the applicant's claim for relief was extended to cover a

memorandum dated 12 May 1988 which is described as follows in the third schedule to a supplementary affidavit of documents filed on behalf of the respondents:

"copy Trust Account Authority
and instruction to proceed
with conveyance

The circumstances in which the documents in issue came into the possession of the respondents' solicitors, Messre Steindls, are detailed in this extract from a diary note by Mr Boston, a member of that fin:

"2 r 20pm 18th January 1991

SHIRONO - TAKANO:  900392

Telephone call from Mark Fitzwalter. I asked Mark if he could tell me something about the Takano, Shirono, Delaeaat File and he said that he felt that he would be our clients' best witness because he aaid he wrote a letter to Takano saying that he believed that he could get him out of the contract if he wanted to and that he felt that he should not proceed with the purchase of this land and he said in hie letter apparently that if Takano was insistent upon proceeding contrary to Mark's advice he wanted him to sign an acknowledgment that he had been advised by his solicitor not to proceed with the contract and that on his insistence he was willing to go ahead and wanted Mark to proceed with the conveyance on his behalf. He believes that he has a copy of that letter in his possession and he aaid that he believes that that letter went to Takano's solicitors Witheriff Nyst. He aaid that he also recalls that he spoke to Taka Yoshida a day before the settlement and told Taka Yoshida that he felt that the property was not worth

that and in any event he said that he is quite willing to talk to me about this matter and he said that he feels that he should have	no problems giving me a copy of that letter in the circumstances
and he said that he would see me this afternoon. We confirmed a time of 3:OOpm.
RBB
9 r OOpm
18th January 1991
Attendance at the offices of Fitzwalter Cull & Walker solicitors at 29 Elkhorn Avenue, Surfers Paradime for the purposes of conferring with Mark Fitzwalter in respect of his representing Takano in the purchase of the land at Cudgen.
Mark produced to me a letter dated the 10th May 1988 which is attached to this diary note indicating that he had advised Takano the purchaser, after the contract had been signed, that he felt
that there were grounds t o have the contract overturned on the strength o f t h e i r investigations and he a l s o produced an authority saying that i f Takano wanted t o proceed with settlement then he would require written instructions t o do so . H e a l s o produced t o
m e a copy of the written authority signed by Takano dated the 12th
May 1988."

At the time of his meeting with Mr Fitz-Walter, Mr Boston knew that the applicant's solicitors had withheld from production, on the basis of a claim of legal professional privilege, a document embodying advice from Fitz-Walter to Mr Takano. That knowledge was derived when Mr Boston was inspecting discovered documents at the offices of Messrs Witheriff Nyst on 23 August 1990.

Mr Nyst of that firm intimated to him that he had removed from Fitz-Walter & CO's file, or otherwise from the documents made available for inspection, a letter of advice from Fitz- Walter to Mr Takano, which Mr Nyst claimed was the subject of legal professional privilege. Mr Nyst further indicated that he would discuss that matter with counsel and get back to Mr Boston.

Mr Fitz-Walter, who was called on behalf of the respondents, gave evidence that before his meeting with Mr Boston he had a meeting early in July 1990 with Mr Nyst, the solicitor for the applicant in the substantive litigation. In the course of that discussion reference was made to Mr Fitz-Walter's letter of advice of 10 May 1988. According to Fitz-Walter, Mr Nyst said, in effect, that he and the applicant were not particularly concerned about that letter as they proposed to rely on pre-contractual representations.

Mr Fitz-Walter further said that he was left with the impression from that comment of Mr Nyst that the letter of 10 May 1988 was not particularly important. Mr Fitz-Walter also said that before meeting Mr Boston on or shortly after 18 January 1991 he tried to telephone Mr Nyst to let him know of the proposed meeting, but had been unable to speak to him. After the meeting with Mr Boston, Mr Fitz-Walter telephoned Mr Nyst to acquaint him with the fact of his, Fitz-Waiter's, meeting with Mr Boston and their discussion of what Fitz-Walter Called "general aspects of the conveyance".

Mr Fitz-Walter had no direct recollection of whether or not he told Mr Nyst that he had given to Mr Boston a copy of the letter of 10 May 1988 or the sheet dated 12 May 1988. Nor did he recall any expression by Mr Nyst of objection to that action. Mr Nyst has, in evidence, explicitly denied that any request was made to him on or about 18 January 1991 to waive any privilege attaching to the letter of 10 May 1988 or the authority of 12 May 1988.

Counsel for the applicant contends that, in the equitable jurisdiction of the Court, an injunction should be granted requiring the respondents and their legal advisers to deliver up to the applicant's solicitors the copy of Mr Fitz-Walter's letter of advice and the authority of 12 May 1988 thus obtained from Mr Fitz-Walter.

In support of the motion reliance is placed on Ashburton v

[l9131 2 Ch 469. In that case the respondent obtained by a trick letters which had been written by the plaintiff to his solicitors and which were therefore privileged. The Court of Appeal, in effect, granted an injunction restraining the respondent from publishing or making any use of the copies of such letters or any information contained therein.

In the course of their Lordships' judgments in that case, reference was made to the principle that an illegally obtained copy of a privileged document may be tendered in proceedings if relevant, notwithstanding the circumstances in which it came into the possession of the party seeking to tender it; see, e.g., Calcraft v Guest [l8981 1 QB 759.

Prima facie, a letter of advice of the type suggested by Mr Boston's diary note and a memorandum of the type apparently constituted by that of 12 May 1988 are the subject of legal professional privilege, being within class (a) of the classes of

v Sterling (1978) 36 FLR 244 at 245 as included in those to which	documents identified by Lockhart J in Trade Practices Commissioq
the protection of legal professional privilege extends.

His Honour there said:

"Legal professional privilege extends to various classes of

documents including the following:

(a) Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assietance;

notwithstanding t h a t t h e communication i e made through agents

of t h e pa r ty and t h e s o l i c i t o r o r t h e agent of e i t h e r of them. See Wheeler v. Le Marchant (1881) 17 Ch.D. 6751 Smith v. Daniel1 (1874) L.R. 18 Eq. 649; Bull ivant v. Attornev-General f o r Vic tor ia [l9011 A.C. 196; Jones v. G r e a t Central Railway

-	Co. [l9101 A.C. 4, and O'Rourke v. Darbiehire [l9201 A.C.
581."

I do not consider that any of the evidence establishes a waiver by Mr Takano or by Messrs Witheriff Nyst as his agents of the privilege attaching to the two documents in issue. Indeed, Mr Batch of counsel for the respondents did not contend for any such waiver but suggested that the privilege had been lost in circumstances similar to those outlined by Lord Simon of Glaisdale in Wauah v British Railwavs Board (1980) AC 521 at 536 where his Lordship said:

"I can see no i n t r i n s i c reason why t h e one p r i n c i p l e r a t h e r than

t h e o the r should p reva i l i n a s i t u a t i o n where they are counter-

indica t ive . Neither is absolute: both a r e eubject t o numerous

exceptions. For example, i f a document protected by l e g a l

profeesional p r i v i l e g e (or eecondary evidence of it) ha8 been obtained by t h e opposi te pa r ty independently - even through t h e d e f a u l t of t h e l e g a l adviser - even by diehoneety - e i t h e r w i l l probably be admissible! Phioson on Evidence, 12th ed. (1976), p. 241, para. 584; Sixteenth Report of t h e Law Reform Committee, para. 31."

However, the absence of any reference in his Lordship's authority makes it clear that he was concerned with the queetion	speech to Ashburton v PaDe or the later cases applying that
of admiseibility in the calcraft v Guest sense and not the anterior question of entitlement to a privileged document which was identified, for example, by Gibbs CJ in Baker v Cam~bell,
(1983) 153 CLR 52 at 68.
In my view, the existence of the principle applied in calcraft v Guest does not preclude an injunction of the kind now
sought if it is applied for in separate proceedings before the copy document is tendered in the other action. Thus, Gibbs CJ, in the passage to which I have just referred, after referring to Galcraft v Guest and Wauah v British Railwav Board and other cases in the same line of authority dealing with admissibility, said:

"There are some crualifications to the rule stated in the English
cases and recognized in Australia in Bell v. David Jones -~td.
119481 49 S.R.(N.S.W.) 223: the owner of the document which has
been improperly' obtained may secure an injunction prohibiting the
use of the document, including its use in evidence, provided that
he does so in separate proceedings and before the document has
been put in evidence: Ashburton v. Paue [l9131 2 Ch. 469; and in
some circumstances the document may not be admitted because it was
obtained by means which amounted to a contempt of court (e.g. by
stealth or trickery within the precincts of the court): J.T.C.
Ltd. v. Video Exchanae Ltd. [l9821 Ch. 431."

The availability of relief of the kind now sought by invocation of Ashburton v PaDe was also apparently recognised by Dawaon J in m v at 129 and by Warner J in LTC v Video Exchanae Ltd, [l9821 Ch 431 at 440. In my view, strong support for the grant of relief claimed by the applicant is provided by Guinness Peat Properties Ltd v Fitzrov Robinson

partners hi^ (1987) 1 WLR 1027, where inspection of a privileged

document was mistakenly allowed to the defendant's solicitor by	the plaintiff's solicitor.
After referring at p. 1040 to Ashburton v PaDe Slade LJ, with whom Woolf LJ and Sir George Waller agreed, observed at page

"A rather similar problem recently fell to be considered by this

court in Goddard v. Nationwide Buildina Societv [l9861 3 W.L.R.
734. In that case the plaintiffs had purchased a house with the
help of a mortgage from the defendant. The same solicitor had
acted for the plaintiffs and the defendant in the transaction. The
plaintiffs subsequently brought an action against the defendant
for damages for negligence, complaining of a defect in the house.
Having been told of the proceedings, the solicitor sent the
defendant a copy of an attendance note in which were recorded
conversations between the solicitor and one of the plaintiffs. The
defendant thereupon pleaded the substance of the contents of the
note in its defence. The ~laintiffe a~plied to have struck out
these passages in the defence and sought-an injunction restraining
the defendant from using or relying on the copy note and requiring
it to deliver up the document' and any furtfier copies w h k h it
miqht have made of it. The defendant in the court below
su6cessfully relied on the principle of Calcraft v. Guest [l8981 1
Q.B. 759. On an appeal by the plaintiff to this court, the
Briamore decision [l9861 1 W.L.R. i429, which had only been given
a few days before, was not cited, but the plaintiff relied on m
fiehburton v. PaDe [l9131 2 Ch. 469. This court upheld his
contention. May L. J. said, at p. 743, that that case and Calcrafk
v. Guest are good authority for the following proposition;

'If a litigant ha8 in his possession copiee of documents to which legal professional privilege attaches he may nevertheless use euch copies ae secondary evidence in his litigation: however, if he has not yet used the documents in that way, the mere fact that he intends to do so is no answer to a claim against him by the person in whom the privilege is vested for delivery up of the copies or to restrain him from disclosing or making any use of any information contained in them. '

Nouree L.J., at p. 7443, referred to

'The apparent conflict between the rule of evidence establiihed by Calcraft v. Guest [l8981 1 Q.B. 759 and the

equitable jurisdiction reaffirmed in -urton	v. P-
(19131 2Ch. 469 ... '

but agreed that those authorities were authority for the proposition which May L.J., had stated. Supporting this statement by reference to a number of authorities, he said, at p. 7450:

'the right of the party who desires the protection to invoke the equitable jurisdiction does not in any way depend on the conduct of the third party into whose possession the record of the confidential communication has come.'"

Then Slade LJ continued: 

"A yet more recent illustration of the application of this equitable jurisdiction is the decision of Sir Nicolae Browne- Wilkinson V.-C. in Enalish and American Insurance Co. Ltd. v, Herbert smith & Co. ra firmL (1987) 137 N.L.J. 148. In that case an,,action was pending in which B.I.C.C. Plc. was the plaintiff and 19 underwriters were defendants. Counsel instructed by the defendants' solicitors had handed his bundle of papers to his clerk for return to his instructing solicitors. Due to a mistake in the clerk's room, Messrs. Herbert Smith, who were the solicitors for the plaintiffs, were invited and permitted to collect the papere. The papers contained many documents entitled to legal professional privilege. Messre. Herbert Smith, clearly much influenced by the guidance as to professional conduct given in a Law Society booklet, and on the instructions of their clients, read the papers and took notes of what they found within them, without copying them. They then informed B.I.C.C. of what they had discovered. They then returned the bundle to the defendants' solicitors. The underwriters subsequently issued

proceedings against Messrs. Herbert Smith and B.I.C.C. seeking an injunction to restrain them from, inter alia, making any use of any information derived from any document forming part of the bundle. As the Vice-Chancellor observed, the Goddard decision [l9861 3 W.L.R. 734 was on the face of it completely conclueive and was binding on him. However, an attempt was made to distinguish that case on the grounds that the receipt by Mesers. Herbert Smith of the confidential information in the privileged documents was entirely innocent, whereas in Lord Ashburton v. Pave and Goddard'e case, the third party who had received the

' confidential information had been in some way wrongfully implicated in obtaining that information. It was submitted that the equitable right of the owner of the confidential information to restrain its use did not apply as against a third party (as opposed to the party who had himself undertaken the duty of confidentiality) where there had been an accidental escape of the information to the third party. Sir Nicolas Browne-Wilkinson V.-C.

rejected that submission, saying, at p. 149:

'I can see no ground for distinguishing the earlier Court of Appeal decieione on that ground. The judgment of May L.J. in Goddard v. Nati- Buil [l9861 3 W.L.R. 734 in no way suggests that the right to restrain the use of confidential information by a third party depends on the third party being improperly implicated in the leakage of the information. Nourse L.J. [at p. 7451 in fact dealm expreesly with the point.'

The Vice-Chancellor added that he was not satisfied that the receipt of the privileged information, as opposed to the documents in which it was contained, was entirely innocent, observing:

'In this case there was a deliberate decision, no doubt taken in good faith, to obtain the confidential information. That decision was taken before reading the document but after it was known that the document was confidential.'

In the result, the Vice-Chancellor granted the relief sought against the defendants."

A similar approach in reliance on F -

Ltd v Fitzrov Robinson Partnershig and the judgment of Rogers J

NSWLR 539 was taken by Kennedy J in Kev International Drillinq

C c (1989) WAR	9
280.

By the same reasoning, I am led to conclude that I should allow the motion and order that the respondents, their servants and agents be restrained from publishing or making use of any copy of a letter of advice from Fitz-Walter & CO to the applicant dated 10 May 1988 and the trust account authority dated 12 May 1988 or any information contained therein. It should in no way be thought that, in coming to this conclusion, I consider that Mr Boston has perpetrated any trick, or has acted otherwise than in accordance with his duty, as he perceived it, to further the interests of his clients as far as he legitimately could.

The delivery of those documents to Mr Boston has his explanation, I consider, in a misapprehension by Mr Fitz-Walter of the nature and extent of the duty of confidentiality which he owed to Mr Takano. That misapprehension was engendered, it seems to me, in whole or in part, by a concern to demonstrate to anybody with knowledge of the conveyancing transaction that he, Mr Fitz-Walter, had acted with the skill and propriety to be expected of a solicitor with a retainer of the kind which he held from Mr Takano in 1988.

pages are a true copy of the Reasons for Judgment	I certify that this and the preceding nine (9)
of His Honour Mr Justice Ryan.
Associate; &Lf%cc~ul @A

Counsel for Applicant	t	Mr T.W. Quinn
Solicitors for Applicant r	Witheriff Nyst
Codnsel for Respondent	:	Mr J. Batch
Solicitors for Applicant t	Steindls
Date of Hearing	16 and 17 April
Date of Judgment	:	17 April 1991