Temwell Pty Ltd v DKGR Holdings Pty Ltd

Case [2003] FCA 1032

FEDERAL COURT OF AUSTRALIA

Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 1032

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

29 SEPTEMBER 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:

29 SEPTEMBER 2003

PLACE:

MELBOURNE

RULING No 9
RULING ON CLAIM OF LEGAL PROFESSIONAL PRIVILEGE IN RESPECT OF DOCUMENTS PRODUCED ON SUBPOENA BY JUNE WILSON

  1. A subpoena has been issued at the instigation of the mCom respondents to June Wilson an expert accounting or valuation witness who has sworn affidavits in these proceedings and whose evidence is to be relied on by the applicant (“Temwell”).  A claim has been advanced on behalf of Temwell that two of those documents are protected by legal professional privilege from disclosure to the legal advisers for the mCom respondents.  I have reviewed the two documents in issue and applied to them the principles discussed in my earlier rulings of 9 September and 24 September 2003.

  2. The first document comprises Ms Wilson’s handwritten notes of a conference on 23 November 2001 attended by Ms Wilson and a colleague with Counsel and solicitors for Temwell.  That appears to be no more than a record of information given to Ms Wilson and her understanding of the “exercise” which she was required to carry out.  I characterise the communications recorded by that document as instructions, suggestions or information given to Ms Wilson to enable her to furnish an expert report.  Consistently with the indication given at [6] of my ruling of 24 September 2003, it would be unfair for the claim of privilege to be sustained in respect of those communications.  That part of the claim of privilege is therefore rejected.

  3. The second document, as far as I can decipher it, comprises Ms Wilson’s handwritten notes of a conference on 19 May 2003 with Senior Counsel for Temwell. I infer that Ms Wilson was then acquainted with arguments which had been advanced on behalf of the mCom respondents and views which I had expressed during argument about the admissibility of an earlier report of Ms Wilson and another expert accounting witness, Mr Rayner; see my ruling of 5 August 2003 [2003] FCA 806 at [10]-[11]. She then recorded five matters to which her attention had been directed as necessary to ring her report “up to date to March 2000.” Further notes were made in respect of some of those matters of queries or lines of enquiry which had been suggested or had occurred to Ms Wilson. Consistently with the principles applied by Lindgren J in Australian Securities and Investment Commission v Southcorp [2003] FCA 804, the claim of legal professional privilege in respect of this second document must also be rejected.

I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated:            29 September 2003

Counsel for the Applicant
and Cross Respondents: 		Mr C D Golvan SC with Dr S Ricketson
Solicitors for the Applicant
and Cross Respondents: 		Meerkin & Apel
Counsel for the mCom Respondents
and Cross-Claimants: 		Mr J L Sher QC with Mr J Delany
Solicitors for the mCom Respondents
and Cross-Claimants: 		Minter Ellison
Counsel for Mr Elbaum
and D&E Consulting Pty Ltd: 		Mr M Goldblatt
Solicitors for Mr Elbaum
and D&E Consulting Pty Ltd 		Walker Herceg
Date of Hearing: 26 September 2003
Date of Ruling: 29 September 2003
Details
AGLC
Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 1032
Case
[2003] FCA 1032
Decision Date

CaseChat Overview and Summary

Temwell Pty Ltd sought to prevent the disclosure of certain documents to the respondents in two related proceedings. The respondents were various mCom entities, including mCom Solutions Inc, mCom Solutions Australia Pty Ltd, and associated individuals. The dispute centred on the application of legal professional privilege to documents produced by an expert accounting witness, June Wilson, who had prepared affidavits for Temwell. The Federal Court of Australia was tasked with determining whether the documents in question were protected by legal professional privilege and thus exempt from disclosure to the mCom respondents' legal advisers.

The central legal issue was whether the documents produced by June Wilson were covered by legal professional privilege. Temwell argued that two specific documents, one a set of handwritten notes from a conference on 23 November 2001 and the other from a conference on 19 May 2003, were privileged. The court had to assess whether these documents constituted confidential communications between a client and their legal adviser, essential for the purpose of giving or receiving legal advice. The court applied the principles of legal professional privilege, as discussed in earlier rulings, to determine if the documents should be exempt from disclosure.

Justice Ryan reviewed the documents and concluded that neither qualified for legal professional privilege. The first document was characterised as a record of information given to Ms Wilson and her understanding of her task, which did not involve confidential legal advice. It was more akin to instructions or suggestions to enable her to prepare an expert report, which did not meet the criteria for privileged communications. The second document, while more complex, contained notes on points Ms Wilson needed to address to update her report, based on arguments and views expressed during court proceedings. This document also did not constitute confidential legal advice. Justice Ryan rejected the claim of legal professional privilege for both documents, allowing their disclosure to the mCom respondents.

In summary, the Federal Court ruled that the documents in question were not protected by legal professional privilege and thus could be disclosed to the mCom respondents. This decision underscored the importance of distinguishing between confidential legal advice and other professional communications when applying the principle of legal professional privilege.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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