Total Trading SRL v Nastri & Anor
[2007] VSC 313
•31 August 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 5110 of 2007
| TOTAL TRADING SRL (FORMERLY KNOWN AS TRIULZI ENGINEERING SRL) | Plaintiff |
| v | |
| LUIGI NASTRI AND NASTRI NOMINEES PTY LTD (ACN 004 960 196) | Defendants |
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JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 16 AUGUST 2007 | |
DATE OF JUDGMENT: | 31 AUGUST 2007 | |
CASE MAY BE CITED AS: | Total Trading SRL v Nastri & Anor | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 313 | |
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Proceedings seeking orders that defendants treat certain documents as privileged and confidential and not use them for the purposes of two related proceedings and return the documents to plaintiff – documents evidence defendants’ role in assisting plaintiff and another in legal proceedings and associated matters – documents not obtained unlawfully, under compulsion, by mistake, or pursuant to any agreement they would be returned – claim for return of documents fails – difficulty in determining question of privilege of documents independently of the related proceeding – plaintiff should have applied under Supreme Court (General Civil Procedure) Rules r9.06 to be added as a party to the related proceeding – originating motion dismissed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr I Waller | Clayton Utz |
| For the Defendants | Mr P Cawthorn | J R Morrow Solicitors |
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HIS HONOUR:
Introduction
The plaintiff (“Triulzi”) is a company incorporated in Italy. The evidence supports the conclusion that it is controlled by one Giovanni Jemma (“Jemma senior”).
The first defendant is a director of the second defendant and it would appear in a controlling position with respect to it. I shall refer to both defendants jointly as “Nastri”.
Triulzi has instituted proceedings by way of originating motion seeking orders that the defendants:
(a)treat certain documents as privileged and confidential and not use them for the purposes of two current proceedings in this Court (being No. 8504 of 2005 “the companies proceeding” and No. 8607 of 2005 “the debt proceeding”); and
(b)return to the plaintiff the documents and any copy of the documents in the defendants’ possession, custody or control.
Both the companies proceeding and the debt proceeding are cases in the Corporations List of this Court. This proceeding was also commenced in that list, but referred out first, to Master Efthim and then to the Practice Court. It has come before me as an independent proceeding despite (in part) seeking orders with respect to the conduct of other proceedings.
The parties have agreed that this proceeding be resolved on the basis of documentary evidence, including affidavit material (but without cross-examination) and despite a series of material conflicts between the affidavits filed for the respective parties.
Background Facts
By affidavit sworn 15 March 2007 Jemma senior deposes that Triulzi is the plaintiff in a further proceeding No. 7221 of 2002 in this Court (“the Alessi proceeding”).
Clayton Utz are Triulzi’s solicitors in the Alessi proceeding and in this proceeding. They are also the solicitors for the defendants in the companies proceeding (save for one Jude Francis, who is currently unrepresented),[1] and the debt proceeding in which Global Bins Australia Pty Ltd (“Global Bins”) is the defendant.
[1]The other defendants are Antonio Jemma, Ciro Barella, Giovanni Jemma, Monfino SA and Global Bins Australia Pty Ltd.
In the Alessi proceeding Triulzi sought the return of manufacturing equipment from some 15 defendants, including Francesco Alessi. It also claimed damages. It obtained summary judgment for possession of the equipment from Mandie J on 7 May 2003. The claim for damages by Triulzi in the Alessi proceeding remains outstanding. The proceeding appears moribund, having been adjourned sine die by consent of the parties in 2005.
The current proceeding arises out of assistance given by Nastri to Jemma senior with respect to the Alessi proceeding.
Jemma senior and Nastri were childhood friends, growing up in Battipaglia near Salerno in Italy. Nastri migrated to Australia in his early twenties over 40 years ago. In or about early 2000 Jemma senior visited Australia and re-established a close friendship with Nastri.
During the course of the Alessi proceeding Jemma senior received reports from Clayton Utz in English, principally by way of facsimile. It was in these circumstances, the Plaintiff contends Nastri agreed to assist Jemma senior. Jemma senior deposes:
As my close friend, Nastri was aware of the Alessi proceeding, he having helped me to engage Clayton Utz and he having been present when I instructed them. In order to assist me to conduct the Alessi proceedings on behalf of Triulzi, Nastri offered to translate and interpret for me correspondence which I received from Clayton Utz. I accepted this offer as Nastri was my friend and I trusted him to keep the Clayton Utz correspondence confidential.
I do not accept that this is a full and accurate account of the extent of the relationship between Jemma senior and Nastri, but I do accept, as the affidavit suggests, that the essence of the relationship was a personal arrangement between Jemma senior and Nastri. I further accept that the arrangement was one which was understood to be concerned in large part with confidential information.
Nastri describes the relationship he had with Jemma as follows:
… I did much more than merely translate and interpret correspondence. I was instrumental in the conduct of the Alessi/Triulzi proceeding on behalf of Jemma. I was not merely copied with correspondence, as Jemma seems to suggest. I was specifically consulted by Clayton Utz and they sought and obtained instructions from me at various points in time in the course of the litigation. Jemma told me from time to time that he wished to do this on his behalf.
By affidavit of 10 May 2007 Jemma senior joins issue with Nastri and disputes that Nastri acted as the “interface” between Clayton Utz and Jemma.
In part it is stated:
(e)All of the communications between Clayton Utz, Nastri and Triulzi in connection with the Alessi proceedings were for the sole purpose of the conduct of the Alessi proceeding for Triulzi; and
(f)Clayton Utz rendered its accounts in connection with the Alessi proceeding to Triulzi and Triulzi paid those accounts.
I am satisfied from the documentary evidence that neither of the above statements is wholly true.[2] Moreover, Jemma’s affidavit materially is generally unpersuasive, in that it essentially asserts conclusions of fact and law rather than the evidentiary basis upon which such conclusions might be based. The above assertion concerning ‘sole purpose’ exemplifies this.
[2]The communications extended to other matters, which I will refer to below, and the accounts were in fact paid initially by Nastri on a series of occasions.
The documentation over which there is currently dispute, demonstrates that Nastri’s role went significantly beyond that of a mere interpreter or go-between. It further demonstrates that it extended beyond matters strictly concerned with the Alessi proceeding.
Among other things, the documentation evidences the following:
·The documents corroborate Nastri’s allegations that he was involved in very extensive communications with Jemma.
·They demonstrate continuing communications with the solicitors for Triulzi, and also with accountants and other persons involved in the Alessi proceeding and in a further proceeding in which Alessi was plaintiff and JCO Plastic SpA[3] and Triulzi were defendants.
[3]A company of which it appears Jemma Senior was a director.
·They demonstrate such communications included a number of discussions about the proceedings, independently of and prior to the forwarding of relevant copy documents to Jemma senior.
·They demonstrate these discussions extended to consideration of the tactical position of Triulzi and were not simply concerned to advise of the progress of the matter.
·They reflect the fact that Nastri made a series of practical arrangements on behalf of Triulzi and Jemma with third parties.
·They reflect continuing telephone and written communications between Clayton Utz and Nastri.
·They show that Nastri early in the proceedings provided $50,000 by way of advance of fees to Clayton Utz, for which he was subsequently reimbursed by Triulzi. They show that this was later repeated with payment of a similar sum.
·The actions of Nastri were taken in a context where Jemma was concerned to limit his costs.
·The actions of Nastri were taken in part in a context where there was agreement between Clayton Utz and Jemma senior that the tactics of Triulzi should be constantly reviewed.
·Nastri was advised of information from third parties to pass on to Jemma which was not placed in print.
·Settlement discussion took place between Jemma and Alessi in part direct. Nastri was used to communicate Jemma’s instructions to Clayton Utz in relation to this and other matters.
·An accountant’s report as to the result of financial investigations into Adriatic Plastics Pty Ltd, a defendant to the Alessi proceeding, was provided to Nastri.
·There was some disagreement from time to time as to the tactics Triulzi should adopt and Nastri participated in debate with respect to this question.
·Nastri was involved in the choice of counsel to act on behalf of Triulzi.
·Nastri was involved in discussions concerning the position of F&T Industries Pty Ltd (receiver and manager appointed) as owner of the land upon which Triulzi’s machinery was located.
·Nastri was responsible for complicated and extended practical arrangements seeking to effect and ultimately effecting the moving of Triulzi’s machinery to new premises, after judgment was obtained for its possession.
·Nastri was party to ongoing communications thereafter with Clayton Utz as to what occurred at the time of removal and the fate of components claimed by the National Australia Bank.
·Nastri was advised of and communicated about ongoing complications concerning questions of costs, recovery of costs, an appeal by Alessi in the Alessi proceeding and other procedural developments.
The Corporations List Proceedings
In June 2003 following the successful recovery of Triulzi’s equipment, Jemma senior rewarded Nastri by agreeing to allocate to him a 20% interest in Global Bins. This company was established as a vehicle to conduct manufacturing with the equipment at new premises. Nastri was allocated 20 shares in Global Bins and Antonio Jemma (the son of Jemma senior) was allocated 80 shares.
Nastri took an active part in the relocation of the equipment to the new premises and in the operation of Global Bins. In February 2004, however, one Barella was sent out from Italy by Jemma senior to act as managing director. Nastri and Barella did not establish a satisfactory working relationship. The circumstances in which this occurred are contentious, but do not fall to be resolved in this proceeding. Nastri ceased an active management role with Global Bins in March 2004.
In about June 2004 Jemma senior was appointed a director of Global Bins and a restructure of shareholdings was implemented. Following the restructure Nastri continued to hold 20 shares but the total number of shares had been increased to 7,151,933. Antonio Jemma held 59,080 shares and Monfino SA, a company incorporated in Luxembourg, held the balance. The effect of the restructure was to reduce Nastri’s shareholding from 20% to a vestigial level of .000027%.
The share restructure constitutes the subject of the companies proceeding. In that proceeding it is alleged that the directors of Global Bins acted in an oppressive and unfair manner with respect to the interests of Nastri:
(a) because he was and is entitled to a 20% share in the company; and
(b)because the 20% represented value for the worth and assistance he had previously rendered to Jemma senior and thereby conferred on the business of Global Bins.
This latter aspect is particularised as follows:
16(d)alternatively, it was unfair because the plaintiff had conferred substantial benefits on Global Bins Co by reason of, at least, the following:-
(i)In the year 2000 Giovanni Jemma approached the plaintiff regarding difficulties that he had with a company named F&T Industries Pty Ltd “(F&T”) and a Mr Alessi. He told him that these difficulties concerned a proposed partnership or joint venture with Mr Alessi and Mr Alessi’s use of machinery owned by a company named Triulzi Engineering Pty Ltd (“Triulzi”) that Giovanni Jemma was associated with. Triulzi owned machinery which had been sold to a Mr Alessi for use by F&T.
(ii)Between 2000 and July 2002 the plaintiff assisted Giovanni Jemma in his dealings with Mr Alessi by acting as an intermediary for their communications, by translating, interpreting and acting as a general consultant for Giovanni Jemma. At the request of Giovanni Jemma he monitored the arrival of machinery at the Port of Melbourne and arranged to have the machinery moved to a store costing $250.00 per month, as against a cost of $250.00 per day storage fees that Giovanni Jemma was incurring with the Port Authorities. He appointed Mr Vince Juliano, a solicitor, to act for Giovanni Jemma and maintained telephone liaison with Mr Juliano on behalf of Giovanni Jemma. On one occasion he provided $5,000.00 to Mr Juliano’s office to cover machinery rental payments being incurred by Giovanni Jemma.
(iii)In or about July 2002 Giovanni Jemma told him that he wanted to take legal action against Mr Alessi and that he wanted him to assist him with the litigation by recommending appropriate lawyers to act for Triulzi and to instruct those lawyers during the conduct of the litigation. He assisted Giovanni Jemma initially by selecting Mr Vince Annetta, Solicitor of Clayton Utz Lawyers, to conduct the litigation on behalf of Triulzi, and continued to assist him with the litigation by instructing Clayton Utz during the conduct of the litigation, advancing money to those solicitors, paying accounts for Giovanni Jemma and setting up the business to act as a manufacturing and distributing business in Australia for large plastic bins.
(iv)He agreed to procure a lease over a factory to be acquired. He arranged for machinery to be moved into the factory. He did those things at the request of Giovanni Jemma.
(v)He devoted about 20-25 hours per week from the time that Clayton Utz was first instructed, on 24 July 2002, until a final Court order was obtained on 7 May 2003. Over this period he gave instructions, attended conferences at Clayton Utz, attended mediations and court hearings, and continually reported progress of the litigation to Giovanni Jemma.
(vi)During the period that the litigation was on foot Giovanni Jemma told him that if he was successful in obtaining an order for recovery of the machinery he wanted him to find a suitable factory to house and operate the machinery as a going concern manufacturing business.
(vii)Ultimately, Giovanni Jemma’s company, Triulzi, was successful in the litigation in the Court and an order was made on 7 May 2003 that the machinery be delivered up to Triulzi. The litigation was on foot for about 10 months. Giovanni Jemma was not in Australia during this period.
(viii)By 2 June 2003 he had acquired a factory for lease at 430 Barry Road, Coolaroo on the basis that a company to be formed would be the tenant but the lease was otherwise in his name. He paid a deposit of $51,000 from his own resources in respect of a deposit bond and the first two months rent.
(ix)He also took steps to arrange for the transfer of the machinery from Moorabbin to the new factory at Coolaroo. He contacted a company named Machinery Movers to arrange for the transfer of the machinery at a cost of $100,000 or more.
(x)He also engaged BF Machinery, a hydraulics company, to disconnect the machinery from its moorings at the Moorabbin factory, disassemble it into two parts, and then subsequently reassemble it and reconnect it at the new factory.
(xi)He arranged for electrical work to be carried out at the factory and for construction of three specially reinforced concrete pads for the machinery to stand on. He purchased a third machine belonging to the National Australia Bank Ltd (“the Bank”) after negotiating a very favourable price of $400,000.00 plus GST. Similarly, with the transport arrangements, he arranged a discounted price from the original quoted price. He also arranged for the payments to be made at a later date to suit cash flow arrangements. He also arranged for plumbing works at the factory. In all the setting up of the factory took approximately 3 to 3½ months from June 2003.
(xii)In consideration of the work that was done by the plaintiff as referred to above it was agreed with Giovanni Jemma and Antonio Jemma that the plaintiff would have a 20% in Global Bins Co. Specifically at a meeting in June 2003 between the plaintiff and Giovanni Jemma (on his own behalf and on behalf of Antonio Jemma) it was agreed that Global Bins Co. would be incorporated and that the plaintiff would retain a 20% interest in it.
(xiii)Between May 2003 and March 2004 the plaintiff devoted approximately 30 to 40 hours per week to establishing and running the business of Global Bins Co.
By its amended defence to the points of claim the defendants denied each and every allegation contained in the paragraph to which the above particulars are subjoined.
In November 2004 Nastri claimed from Global Bins fees and expenses incurred by him, while acting in a management capacity in relation to the business of Global Bins. These claims form the subject of the debt claim.
The Trigger Event
In the course of the debt proceeding Nastri has given discovery of documents comprising copy documents received by him from Clayton Utz.
Triulzi seeks to recover these documents and prevent their use in both that proceeding and the companies proceeding.
Triulzi has rejected an offer prior to the hearing of this proceeding by Nastri, to undertake to keep the documents confidential and use them solely for the purposes of the debt proceeding and the companies proceeding.
Triulzi has further rejected a series of offers of undertakings made during the course of the hearing of this proceeding, including an undertaking not to disclose the documents to anyone other than Clayton Utz, without giving a further seven days’ notice to Triulzi.
The Claim to Possession of the Documents
The documents discovered by Nastri were supplied voluntarily by Clayton Utz acting at the request of or for and on behalf of Jemma senior and Triulzi.
They were so supplied in the course of a business relationship in which I am satisfied Nastri:
·Acted as a go-between and agent for Jemma senior and Triulzi in Melbourne;
·Acted as a go-between between Clayton Utz and Jemma senior; and
·Advised Jemma senior with respect to the progress of the Alessi proceeding;
·Exercised or assisted in the exercise of discretion on behalf of Jemma senior and Triulzi as to the course of procedural steps taken in the Alessi proceeding, e.g. the choice of counsel;
·Paid legal fees for and on behalf of Triulzi, from Nastri’s own resources, which funds were subsequently reimbursed to Nastri;
·Monitored accounting and other evidentiary investigations;
·Effected or assisted to effect the relocation of the equipment in dispute to new premises; and
·Acted as Jemma senior’s confidant with respect to the proceedings, independently in some respects of the process of advice and instructions as between Clayton Utz and Triulzi.
The documentation evidences parts of an entirely lawful relationship between Nastri and Jemma senior and Triulzi.
No satisfactory basis has been put forward for the alleged claim to entitlement to physical possession of the documentation.
The documents were not obtained unlawfully.
The documents were not obtained under compulsion.[4]
[4]Cf. British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524.
They were not obtained by mistake.[5]
[5]Cf. Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027; Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538; Webster v James Chapman & Co (1989) 3 All ER 939; Derby & Co Ltd v Weldon (No. 8) [1991] 1 WLR 73; Director of Public Prosecutions (Clth) v Kane (1997) 140 FLR 468; Deputy Commissioner of Taxation v Rettke (1995) 31 IPR 457.
Nor were the documents delivered pursuant to any agreement that they would be returned to Clayton Utz, Triulzi or Jemma senior.
There is no basis upon which it can be concluded Nastri should not be permitted to retain by way of record, copies of documents evidencing Nastri’s part in commercial transactions related to the conduct and subject matter of the Alessi proceeding.
Further, there is no evidence that Nastri has hitherto misused the documents in any way. The real issue between the parties is what use, if any, Nastri should be permitted to make of the documents in the Corporations List proceedings.
It follows that the primary claim made by Triulzi for return of the documents must fail.
What is asserted is first, that the documents contain confidential information and secondly, that they are subject to legal professional privilege. In my view both these propositions, if upheld, may have consequences with respect to the use Nastri may make of the documents, but do not entitle the plaintiff to require delivery up of their possession.
On one view this is the end of the plaintiff’s application. It is neither entitled to an order in absolute terms that Nastri not use the documents for the purposes of the Corporations List proceedings, nor is it entitled to return of the documents. Nevertheless, in deference to the arguments advanced by counsel and in an attempt to provide a way forward for the parties, I will further address the submissions made with respect to confidentiality and privilege.
Confidentiality
There is no dispute that the documentation is potentially relevant to the issues in both the debt proceeding and the companies proceeding.
Nevertheless, I accept that the documents in issue are (at least in large part) subject to an equitable obligation of confidentiality.
Such confidentiality does not derive from express agreement, but was necessarily implicit in the role Nastri undertook to play, even if his evidence as to the nature of that role is accepted in whole.[6]
[6]Cf AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 at 487.
More particularly, the documents in issue were supplied to Nastri in the course of the Alessi litigation by Clayton Utz and were principally concerned with matters concerning or arising out of or consequential upon the subject matter of that litigation.
Triulzi asserts that such obligation of confidentiality arises from a relationship between it and Nastri. As a consequence, it contends that it alone is entitled to the benefit of the relevant confidentiality.
I am not persuaded this is so. I do not accept Jemma senior’s affidavit evidence is to be preferred to that of Nastri. Further, the evidence as a whole, supports the view on the balance of probabilities, that the primary relationship pursuant to which the documents were received was one between Jemma senior and Nastri personally.
It follows the obligation of confidentiality pursuant to which the documentation was received will potentially be breached by its disclosure, save in the claim against Jemma senior.
It is not contended on behalf of Triulzi that breach of confidentiality alone will preclude the disclosure of relevant material in a proceeding. It is submitted:
Relief will be granted to prevent a party to litigation from breaching an equitable obligation of confidence by making unauthorised use of confidential information in the litigation, although the confidentiality will not operate to prevent any party to the litigation from taking proper steps to obtain the information or documents containing or comprising the information through subpoenas, discovery and interrogatories …[7]
[7]Submissions of the plaintiff filed 1 June 2007 (citations omitted).
The relevant principle was stated by Nourse LJ in Goddard v Nationwide Building Society[8] as follows:
Second, although the equitable jurisdiction is of much wider application, I have little doubt that it can prevail over the rule of evidence only in cases where privilege can be claimed. The equitable jurisdiction is well able to extend, for example, to the grant of an injunction to restrain an unauthorised disclosure of confidential communications between priest and penitent, or doctor and patient. But these communications are not privileged in legal proceedings and I do not believe that equity would restrain a litigant who already had a record of such a communication in his possession from using it for the purposes of his litigation. It cannot be the function of equity to afford a de facto privilege to communications in respect of which no privilege can be claimed. Equity follows the law …[9]
[8](1987) 1 QB 670.
[9]Ibid 685.
This passage was cited with approval by Campbell J in AG Australia Holdings Ltd v Burton.[10] Earlier his Honour had stated:[11]
There are well established limitations on obligations of confidentiality, being limitations which are established for the purpose of enabling the system of administration of justice to operate. Thus, at common law, a witness who is called to give evidence in court is not entitled, on the ground of owing an obligation of confidence alone, to decline to answer any relevant question which is permitted to be put.[12] If the confidential information also is the subject of a privilege recognised in the law of evidence which applies in the court before whom the person is called, it is that privilege, not the confidentiality, which provides a ground on which that person need not give the evidence.
[10](2002) 58 NSWLR 464, 509.
[11]Ibid 501.
[12]The National Society for the Protection of Cruelty to Children [1978] AC 171 at 218, 230, 237
In my view the critical question is thus, whether Triulzi and Jemma senior can prevent the discovery (save to Jemma senior) of the relevant documentation in the debt and companies proceedings, on the basis of legal privilege.
Privilege
In Baker v Campbell[13] Dawson J stated:
Legal professional privilege attaches only to communications made for the purpose of giving or receiving advice or for use in existing or anticipated litigation. Moreover, if the communication in question is in the form of a document submitted by a client to his solicitor for use in existing or anticipated litigation, privilege will attach to it only if it comes into existence solely for that purpose. The privilege cannot operate to put beyond the reach of the law documentary or other material which has an existence apart from the process of giving or receiving advice or the conduct of litigation.[14] There is no privilege for physical objects other than documents and there is no privilege for documents which are the means of carrying out, or are evidence of, transactions which are not themselves the giving or receiving advice or part of the conduct of actual or anticipated litigation. Communications which would otherwise be privileged lose their immunity from disclosure if they amount to participation in a crime or a fraud. The compass within which the doctrine of legal professional privilege operates is, therefore, narrow having regard to the principle which it protects.
[13](1983) 153 CLR 52, 122 - 123.
[14]See Grant v Downs (1976) 135 CLR 674.
The documents in issue were principally copied to Nastri, for use in association with the conduct of the Alessi proceedings, or assistance in management of associated business activities. Insofar as they moved into the latter area, it can be seen that they will not attract legal professional privilege in the senses clarified by Dawson J.
It is submitted on behalf of Nastri, that the privilege was a joint privilege, he having an independent interest in the outcome of the Alessi litigation, because of promises made to him that he would be rewarded for his part in it.
The affidavit evidence before me does not, in my view, satisfactorily establish a joint interest in this sense with respect to all the documents in issue. More particularly, it supports the view that agreement to compensate Nastri was expressly reached in or about June 2003 between Jemma senior and Nastri. The documents in issue both pre-date and post-date this express agreement. Insofar as the documentation pre-dates the agreement the evidence does not satisfactorily demonstrate a joint interest in the outcome of the proceeding. Rather, it demonstrates an agreement on behalf of Nastri to assist Jemma senior and Triulzi in the Alessi proceeding and business transactions concerned with it, without agreement that he would be compensated by way of an interest in a business utilising the disputed machinery.
The principal documents in issue are those contained in two lever arch folders relating to the period between 25 September 2002 and 18 March 2004 marked as containing Clayton Utz correspondence and “containing copy facsimile correspondence and documents received by the second named plaintiff from Clayton Utz”.[15]
[15]The further documents comprised: document 73, a copy fax from Jemma senior to Clayton Utz with attachments of 9 May 2003, relating to agreement with the mortgagee of the factory in which the equipment had been installed, such mortgagee not being a party to the Alessi proceeding; documents 74, 89, 90 and 92, being copy invoices and work reports of an accountant for work done investigating Adriatic Plastics Pty Ltd; document 99, being a copy letter of Nastri to Jemma senior of 16 January 2003 concerning retention of the investigating accountant; document 100, being copy of terms of engagement of the investigating accountant of 15 January 2003.
I accept Mr Waller’s submission that prima facie this documentation is discoverable in the Corporations List proceedings, but prima facie is subject to privilege.
This prima facie position is attended by a series of qualifications and difficulties:
(a) the position of Jemma senior;
(b)uncertainty as to the relevance of individual documents to disputed issues;
(c) the global characterisation of the documents;
(d)the effect of the relief which Triulzi seeks upon parties who are not before the Court;
(e) issues of waiver;
(f) issues of competing equities; and
(g) consideration of alternative remedies.
The Position of Jemma Senior
Unless Triulzi can establish the privilege is that of Triulzi alone, then the position of Jemma senior materially complicates the situation. Once it is concluded that Triulzi cannot demonstrate Jemma senior is not also entitled to the privilege (which having regard to my conclusions with respect to confidentiality I find it cannot do) then the proposition that the issues raised in this proceeding can be satisfactorily dealt with independently of the Corporations List proceedings is very difficult to sustain.
Relevance
The relevance of the documents to disputed issues in the Corporations List proceedings will not be entirely clear until the finalisation of interlocutory steps in those proceedings. I have formed the provisional view that the pleading of the defence in the companies proceeding is plainly deficient, but that is ultimately a matter for the judge managing that proceeding.
The fact that it seems probable the dispute as to what Nastri did may ultimately be a limited one when the Corporations List proceedings come to trial, suggests that as a matter of convenience and practicality dispute over the relevant documentation should be dealt with in the Corporations List proceedings.
Global Characterisation
Dispute over arch folders of documents is in my view inherently productive of difficulty in a case such as this. Affidavit material filed on behalf of Nastri draws attention to the fact that the documentation in issue appears to go to a series of matters other than the Alessi proceedings themselves. It is sufficient for present purposes to say I am satisfied that there is some real doubt that all the documentation in respect of which a claim is made for legal professional privilege, is in fact the subject of such privilege. Once again, detailed consideration of this issue is sensibly left until the relevance of the documentation is better ascertained and its significance better proven.
Parties Not Before the Court
If it be accepted, as is conceded by Triulzi, that prima facie the documentation is relevant to the issues in both the debt proceeding and the companies proceeding, then Triulzi’s claim in this proceeding may deprive the defendants to those proceedings of access to that documentation.
If, as counsel for Triulzi submits, the interests of Global Bins and the individual defendants in the Corporations List proceedings are not to be equated with those of Jemma senior, then the effect of the orders sought in the present proceeding would be to deprive the defendants other than Jemma senior of access to relevant evidence.
I do not regard this as an entirely hypothetical possibility, despite the protestations made on behalf of Nastri that all the defendants are in Jemma senior’s camp. Most obviously the documentation might assist in conveying to individual defendants that the defence of proceedings, in which they may ultimately be personally liable for costs, is hopeless.
But whatever may be the practical realities, it does not in my view lie open to Triulzi, to on the one hand assert absolute independence of its interest in the documentation, and on the other to fail to join the parties to the Corporations List proceedings in this proceeding.
This is most simply illustrated by the fact that if the claim to possession of the documents is refused (as I have held it should be) the remaining limb of relief sought is explicitly in respect of use of the documents in the Corporations List proceedings.
The absence of the relevant parties was drawn to the attention of the plaintiff during the course of discussion with the bench. The position adopted on behalf of Triulzi was that it maintained its right to bring this proceeding without joining the additional defendants. In my view this is an additional and compelling reason why the present application should fail.
Waiver
Legal professional privilege is waived, if without objection, the person entitled to its protection, discloses the material the subject of privilege, to another party or to the Court. An implied waiver may occur when by reason of the conduct of the holder of the privilege, it would be unfair to maintain the confidentiality of the communications in issue.[16]
[16]Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475; Mann v Carnell (1999) 201 CLR 1.
In Mann v Carnell Gleeson CJ, Gaudron, Gummow and Callinan JJ stated:[17]
[28]At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.
[29]Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank[18], the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
[17]Mann v Carnell (1999) 201 CLR 1, 13 (citations omitted).
[18](1993) 35 NSWLR 110
Although the allegation of waiver advanced on behalf of Nastri shifted somewhat during the course of argument before me, I took it ultimately to be put on three bases:
(a)implied waiver arising out of publication to Clayton Utz and the defendants in the Corporations List proceedings;
(b)implied waiver arising out of the pleading in the companies proceeding; and
(c)implied waiver demonstrated by an affidavit sworn in the companies proceeding by Jude Francis, the production manager of Global Bins.
It is plain that the documents in issue have been disclosed to Clayton Utz, who are the solicitors for the defendants in the Corporations List proceedings. It is also apparent that those proceedings are being managed jointly by the Court within the Corporations List and in turn managed jointly on behalf of the defendants by Clayton Utz.
If it be accepted that the documents are the subject of a joint privilege shared by Jemma senior who is a defendant to the companies proceeding, it is difficult to see that solicitors or counsel could act for both Jemma senior and the other defendants while maintaining the privilege against Nastri.
Whether the conduct of Jemma senior in utilising Clayton Utz both for this and the purposes of a joint defence with other defendants of the Corporations List proceedings constitutes a waiver, must, however, turn on precisely what the conduct involved in such utilisation involves. That conduct evidenced before me does not satisfy me that Nastri has established in this proceeding that a waiver has occurred.
Turning to the second basis on which waiver has been put, the bald denial contained in the points of defence delivered on behalf inter alia of Jemma senior in the companies proceeding, puts squarely in issue the history of work done by Nastri for the benefit of the business of Global Bins.
I have already indicated, however, that my provisional view that pleading is unsatisfactory. For present purposes, it is sufficient to say that I do not believe it is proper for me to rule on the effect of any alleged waiver arising out of it, when first, the proceeding in which the pleading was delivered is not before me, and secondly, the parties to that proceeding are not before me, including the parties on whose behalf the relevant pleading was delivered.
The third basis on which it is alleged a waiver is demonstrated, is the affidavit sworn on behalf of the defendants to the companies proceeding on 1 June 2006 by Jude Francis.
That affidavit exhibits a series of documents going to the history of the relationship between Nastri and Global Bins. One of these documents is identical to a document contained in the disputed documents in this proceeding, save for a fax heading at the top of the exhibited copy document.
I am not persuaded this document is or could be determinative of the fate of the privilege asserted in respect of the bulk of the documents, whatever view were to be taken with respect to this individual document. In BAT v Cowell[19] the Court of Appeal emphasised that the disclosure of part of a document would not necessarily result in a waiver of privilege of the other parts of the document. A fortiori waiver of privilege with respect to an individual document cannot be said to necessarily involve waiver with respect to the lever arch folders in which it is contained.
[19](2002) 7 VR 524, 563-567.
Having said this, the exhibits to the Francis affidavit as a whole demonstrate the defendants in the companies proceeding have access to documentation relating to the same matters as documents in dispute in this proceeding. As such the material points out the difficulty of assessing the underlying equities in this matter.
Competing Equities
In AG Australia Holdings Ltd v Burton Campbell J concluded:[20]
It would, in my view, be extending the law to decide that, even in the exclusive jurisdiction of equity, the protection of confidence did not extend to information which was relevant to an allegation of iniquity, though not itself disclosing that iniquity.
[20](2002) 58 NSWLR 464, 523.
Whether this view be correct or not, it is apparent that a further difficulty confronting the plaintiff in his claim for injunctive relief, is that it would on the face of it be entirely unfair, if Jemma senior, and Global Bins could deny Nastri access to documentation evidencing work and labour done at Jemma senior’s request and in part for and on behalf of Global Bins.
The matters establishing such unfairness are, however, themselves facts in issue in the Corporations List proceedings. Once again it seems to me that the possibility of a competing equity is something which must be resolved having regard to findings of fact reached in those proceedings.
Alternative Remedies
It follows from what I have said above that there is much to be said for the view that Triulzi should have applied to be added as a party to the Corporations List proceedings pursuant to r.9.06 of the Rules of the Supreme Court.
9.06 Addition, removal, substitution of party
At any stage of a proceeding the Court may order that—
(a)any person who is not a proper or necessary party, whether or not that person was one originally, cease to be a party;
(b) any of the following persons be added as a party, namely—
…
(ii)a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;
…
If the real issue between the parties is the use that may, or may not be made of the documentation in the Corporations List proceedings, then once the claim to possession of the documents fails, it is apparent that the use and mode of publication (if any) of the documents in the Corporations List proceedings remains for regulation within those proceedings.
Conclusion
For the above reasons the originating motion should be dismissed.
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