Temwell Pty Ltd v DKGR Holdings Pty Ltd - [2003] FCA 1349

FEDERAL COURT OF AUSTRALIA
Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 1349
TEMWELL PTY LTD (ACN 082 656 157) -v- DKGR HOLDINGS PTY LTD (formerly known as DYNAMIC DATA SYSTEMS PTY LTD) (In Liquidation) (ACN 062 778 616), mCOM SOLUTIONS INC, DRAGON VENTURES. COM INC, mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950), DAVID HAINS, ROBERT VAN ZANTEN, DRAGONVENTURES.COM LTD, RICHARD HAINS and IAN MORRIS KIEFEL
AND
mCOM SOLUTIONS INC. and mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950) v TEMWELL PTY LTD (ACN 082 656 157), SLADEMERE PTY LTD (ACN 082 656 139), SHEPRIDGE PTY LTD (ACN 082 696 077), GEOFFREY MICHAEL TAUBER, MORRY FRAID, ROGER ENRIQUEZ
V 663 of 2000
RYAN J
21 NOVEMBER 2003
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 663 of 2000

BETWEEN: TEMWELL PTY LTD (ACN 082 656 157)
Applicant

AND: DKGR HOLDINGS PTY LTD (formerly known as DYNAMIC DATA SYSTEMS PTY LTD) (In Liquidation) (ACN 062 778 616)
First Respondent

mCOM SOLUTIONS INC.
Second Respondent

DRAGON VENTURES. COM INC
Third Respondent

mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950)
Fourth Respondent

DAVID HAINS
Fifth Respondent

ROBERT VAN ZANTEN
Sixth Respondent

DRAGONVENTURES.COM LTD
Seventh Respondent

RICHARD HAINS
Eighth Respondent

IAN MORRIS KIEFEL
Ninth Respondent

AND BETWEEN:

mCOM SOLUTIONS INC. and mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950)
Cross-Claimants

AND:

TEMWELL PTY LTD (ACN 082 656 157)
SLADEMERE PTY LTD (ACN 082 656 139)
SHEPRIDGE PTY LTD (ACN 082 696 077)
GEOFFREY MICHAEL TAUBER
MORRY FRAID
ROGER ENRIQUEZ
Cross-Respondents

JUDGE:

RYAN J

DATE:

21 NOVEMBER 2003

PLACE:

MELBOURNE

REASONS FOR RULING (NO 14) ON APPLICANT’S CALL FOR PRODUCTION
OF PRIVILEGED DOCUMENTS IN CATEGORIES 3 AND 4
Category 3

The third category of presumptively privileged documents of which Temwell seeks production by the mCom respondents has been described as follows:-
‘3.All documents prepared by or for your clients, Griffith Hack or Minter Ellison (including advices of solicitors or counsel) concerning:
i.the inclusion of the admissions that the assignment was of no binding effect and that our client did not in fact consent to the assignment, in your clients' Defence dated 21 December 2000; and
ii. the withdrawal of those admissions.’
In various versions of its amended statement of claim Temwell had alleged, amongst other things;
‘20D.Thereupon, the first respondent settled the sale of its business to the second respondent, and assigned all its rights in the Application Software to the second respondent.
21.The applicant has never consented to such assignment and accordingly it is unlawful and of no binding effect.’
The response to those allegations in the defence of the mCom respondents as it stood up to September 2002 was:
‘21.Subject to the following, they admit that the assignment is of no binding effect. They otherwise do not admit the allegations made in paragraph 21. They say further that:
(a)by the letter dated 22 February 2000 … … … the…

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: [2003] FCA 1349
Decision Date: 21 NOVEMBER 2003

CaseChat Overview and Summary

Temwell Pty Ltd sought production of documents from several respondents, including DKGR Holdings Pty Ltd and mCom Solutions Inc, in a legal dispute concerning the validity of an assignment of rights in software. The Federal Court of Australia was asked to rule on whether certain documents were subject to legal professional privilege and thus exempt from disclosure. The court examined whether the documents in question, which related to the mCom respondents' legal advice on the assignment's validity and their decision to withdraw an admission in their defence, were protected by legal professional privilege.

The court considered whether the mCom respondents had waived their privilege by admitting certain facts in their defence and subsequently seeking to withdraw those admissions. Temwell argued that the withdrawal of admissions implied a waiver of privilege concerning the legal advice that led to those admissions. The mCom respondents contended that the privilege remained intact because the advice was given in the context of preparing for the litigation and did not influence their state of mind or belief at the time of the events in question.

Justice Ryan determined that the mCom respondents had not waived their legal professional privilege. The court found that the advice in question was given in the context of preparing for litigation and did not contribute to any state of mind or belief held by the mCom respondents at the time the events occurred. As such, the documents prepared by their legal advisers remained privileged and were not subject to disclosure.

In conclusion, the court ruled that the mCom respondents were not required to produce the documents in categories 3 and 4 as they were protected by legal professional privilege. This decision affirmed the importance of maintaining the confidentiality of legal advice in litigation, particularly when such advice is given in preparation for the proceedings and does not influence the party's state of mind at the time relevant events took place.

Orders